[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2004 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          48


          Chapters 7 to 14

                         Revised as of October 1, 2004


          Federal Acquisition Regulations System
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2004
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2004



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                            Table of Contents



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

  Title 48:
          Chapter 7--Agency for International Development            3
          Chapter 8--Department of Veterans Affairs                135
          Chapter 9--Department of Energy                          273
          Chapter 10--Department of the Treasury                   539
          Chapter 12--Department of Transportation                 557
          Chapter 13--Department of Commerce                       625
          Chapter 14--Department of the Interior                   659
  Finding Aids:
      Table of CFR Titles and Chapters........................     679
      Alphabetical List of Agencies Appearing in the CFR......     697
      List of CFR Sections Affected...........................     707

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

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

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

[[Page v]]



                               EXPLANATION

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

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

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

LEGAL STATUS

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

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 2004), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

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

OMB CONTROL NUMBERS

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

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

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

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
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also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

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

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
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or write to the Director, Office of the Federal Register, National 
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[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

October 1, 2004.

[[Page ix]]



                               THIS TITLE

    Title 48--Federal Acquisition Regulations System is composed of 
seven volumes. The chapters in these volumes are arranged as follows: 
Chapter 1 (parts 1 to 51), chapter 1 (parts 52 to 99), chapter 2 (parts 
201 to 299), chapters 3 to 6, chapters 7 to 14, chapters 15 to 28 and 
chapter 29 to end. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of October 1, 2004.

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

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

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

    For this volume, Robert J. Sheehan was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

[[Page x]]




[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




                  (This book contains chapters 7 to 14)

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

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

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

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

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

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

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

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

[[Page 3]]



             CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT




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


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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
701             Federal Acquisition Regulation System.......           5
702             Definitions of words and terms..............          10
703             Improper business practices and personal 
                    conflicts of interest...................          12
704             Administrative matters......................          12
                   SUBCHAPTER B--ACQUISITION PLANNING
705             Publicizing contract actions................          13
706             Competition requirements....................          13
707             Acquisition planning........................          16
709             Contractor qualifications...................          16
711             Describing agency needs.....................          16
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
713             Simplified acquisition procedures...........          18
714             Sealed bidding..............................          18
715             Contracting by negotiation..................          18
716             Types of contracts..........................          22
717             Special contracting methods.................          23
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
719             Small business programs.....................          24
722             Application of labor laws to government 
                    acquisition.............................          28
724             Protection of privacy and freedom of 
                    information.............................          31
725             Foreign acquisition.........................          32
726             Other socioeconomic programs................          33
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
728             Bonds and insurance.........................          37

[[Page 4]]

731             Contract cost principles and procedures.....          38
732             Contract financing..........................          42
733             Protests, disputes, and appeals.............          44
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
734             Major system acquisition....................          47
736             Construction and architect-engineer 
                    contracts...............................          47
737             [Reserved]

                    SUBCHAPTER G--CONTRACT MANAGEMENT
742             Contract administration.....................          49
745             Government property.........................          49
747             Transportation..............................          50
749             Termination of contracts....................          50
750             Extraordinary contractual actions...........          51
                     SUBCHAPTER H--CLAUSES AND FORMS
752             Solicitation provisions and contract clauses          57
753             Forms.......................................          85
Appendixes A-C to Chapter 7 [Reserved]
Appendix D to Chapter 7--Direct USAID Contracts With a U.S. 
  Citizen or a U.S. Resident Alien for Personal Services 
  Abroad....................................................          85
Appendix E to Chapter 7 [Reserved]
Appendix F to Chapter 7--Use of Collaborative Assistance 
  Method for Title XII Activities...........................         110
Appendixes G-H to Chapter 7 [Reserved]
Appendix I to Chapter 7--USAID's Academic Publication Policy         114
Appendix J to Chapter 7--Direct USAID Contracts With a 
  Cooperating Country National and With a Third Country 
  National for Personal Services Abroad.....................         115

[[Page 5]]



                          SUBCHAPTER A_GENERAL





PART 701_FEDERAL ACQUISITION REGULATION SYSTEM--Table of Contents




               Subpart 701.1_Purpose, Authority, Issuance

Sec.
701.105 OMB approval under the Paperwork Reduction Act.

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

701.301 Policy.
701.303 Publication and codification.

             Subpart 701.4_Deviations from the FAR or AIDAR

701.402 Policy.
701.470 Procedure.

      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities

701.601 General.
701.602-1 Authority of contracting officers in resolving audit 
          recommendations.
701.602-3 Ratification of unauthorized commitments.
701.603 Selection, appointment, and termination of appointment.
701.603-70 Designation of contracting officers.

                Subpart 701.7_Determinations and Findings

701.704 Content.
701.707 Signatory authority.

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

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



               Subpart 701.1_Purpose, Authority, Issuance



701.105  OMB approval under the Paperwork Reduction Act.

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

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

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

[[Page 6]]

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

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



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

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



701.301  Policy.

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



701.303  Publication and codification.

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

[[Page 7]]



             Subpart 701.4_Deviations from the FAR or AIDAR



701.402  Policy.

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



701.470  Procedure.

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

[[Page 8]]

    (4) Deviations involving basic agreements or other master type 
contracts are considered to involve more than one contract.
    (5) Unless the approval is sooner rescinded, class deviations shall 
expire 2 years from the date of approval provided that deviation 
authority shall continue to apply to contracts or task orders which are 
active at the time the class deviation expires. Authority to continue 
the use of such deviation beyond 2 years may be requested in accordance 
with the procedures prescribed in paragraph (a) of this section.
    (6) Expiration dates shall be shown on all class deviations.
    (c) Requests for deviation shall contain a complete description of 
the deviation, the effective date of the deviation, the circumstances in 
which the deviation will be used, a specific reference to the regulation 
being deviated from, an indication as to whether any identical or 
similar deviations have been approved in the past, a complete 
justification of the deviation including any added or decreased cost to 
the Government, the name of the contractor, and the contract or task 
order number.
    (d) Register of deviations: Separate registers shall be maintained 
by the procuring activities of the deviations granted from the FAR and 
AIDAR. Each deviation shall be recorded in its appropriate register and 
shall be assigned a control number as follows: the symbol of the 
procuring activity, the abbreviation ``DEV'', the fiscal year, the 
serial number [issued in consecutive order during each fiscal year] 
assigned to the particular deviation and the suffix ``c'' if it is a 
class deviation, e.g. CM-DEV-85-1, CM-DEV-85-2c. The control number 
shall be embodied in the document authorizing the deviation and shall be 
cited in all references to the deviation.
    (e) Central record of deviations: Copies of approved deviations 
shall be furnished promptly to the M/OP/P, who shall be responsible for 
maintaining a central record of all deviations that are granted.
    (f) Semiannual report of class deviations:
    (1) USAID contracting officers shall submit a semiannual report to 
the M/OP/P of all contract actions effected under class deviations to 
the FAR and AIDAR which have been approved pursuant to paragraph (b) of 
this section.
    (2) The report shall contain the applicable deviation control 
number, the contractor's name, contract number and task order number (if 
appropriate).
    (3) The report shall cover the 6-month periods ending June 30 and 
December 31, respectively, and shall be submitted within 20 working days 
after the end of the reporting period.

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



      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities



701.601  General

    (a) (1) Pursuant to the delegations in ADS 103.5.10, the M/OP 
Director is authorized to act as the Head of the Agency for all purposes 
described in the Federal Acquisition Regulation (FAR, 48 CFR Chapter 1), 
except for the authority in (48 CFR) FAR sections 6.302-7(a)(2), 6.302-
7(c)(1), 17.602(a), 19.201(c), 27.306(a), 27.306(b), and 30.201-5, or 
where the ``head of the agency'' authority is expressly not delegable 
under the FAR or AIDAR. Further, the M/OP Director is responsible for 
implementing the procurement related aspects of the Foreign Assistance 
Act, Executive Order 11223, the Office of Federal Procurement Policy 
Act, and other statutory and Executive Branch procurement policies and 
requirements applicable to USAID operations, except for those 
authorities and responsibilities delegated to the Procurement Executive 
as specified in ADS 103.5.10f.
    (2) The M/OP Director has specified authority to:
    (i) Select and appoint contracting officers and terminate their 
appointments in accordance with section 1.603 of the Federal Acquisition 
Regulation; and
    (ii) Exercise in person or by delegation the authorities stated in 
subpart 1.4 of the Federal Acquisition Regulation with regard to 
deviations from that regulation.
    (b) Except as otherwise prescribed, the head of each contracting 
activity

[[Page 9]]

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

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



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

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

[62 FR 40466, July 29, 1997]



701.602-3  Ratification of unauthorized commitments.

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

[53 FR 6829, Mar. 3, 1988, as amended at 64 FR 42040, Aug. 3, 1999]



701.603  Selection, appointment, and termination of appointment.



701.603-70  Designation of contracting officers.

    A contracting officer represents the U.S. Government through the 
exercise of his/her delegated authority to negotiate, sign, and 
administer contracts on behalf of the U.S. Government. The contracting 
officer's duties are sensitive, specialized, and responsible. In order 
to insure proper accountability, and to preclude possible security, 
conflict of interest, or jurisdiction problems, it is USAID policy that 
USAID

[[Page 10]]

contracting officers must be U.S. citizen direct-hire employees of the 
U.S. Government.

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



                Subpart 701.7_Determinations and Findings



701.704  Content.

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

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



701.707  Signatory authority.

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

[58 FR 8702, Feb. 17, 1993]



PART 702_DEFINITIONS OF WORDS AND TERMS--Table of Contents




                       Subpart 702.170_Definitions

Sec.
702.170-1 USAID.
702.170-2 Administrator.
702.170-3 Contracting activities.
702.170-4 Cooperating country.
702.170-5 Cooperating country national (CCN).
702.170-6 Executive agency.
702.170-7 Foreign Assistance Act.
702.170-8 Government, Federal, State, local and political subdivisions.
702.170-9 Head of agency.
702.170-10 Head of the contracting activity.
702.170-11 Mission.
702.170-12 Overseas.
702.170-13 Procurement Executive.
702.170-14 [Reserved]
702.170-15 Third country national (TCN).
702.170-16 U.S. national (USN).
702.170-17 Automated Directives System.

                   Subpart 702.270_Definitions Clause

702.270-1 Definitions clause.

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

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



                       Subpart 702.170_Definitions



702.170-1  USAID.

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



702.170-2  Administrator.

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



702.170-3  Contracting activities.

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

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



702.170-4  Cooperating country.

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

[[Page 11]]



702.170-5  Cooperating country national (CCN).

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



702.170-6  Executive agency.

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



702.170-7  Foreign Assistance Act.

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



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

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



702.170-9  Head of agency.

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

[50 FR 52780, Dec. 26, 1985, as amended at 64 FR 42041, Aug. 3, 1999]



702.170-10  Head of the contracting activity.

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

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



702.170-11  Mission.

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



702.170-12  Overseas.

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



702.170-13  Procurement Executive.

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

[64 FR 42041, Aug. 3, 1999]



702.170-14  [Reserved]



702.170-15  Third country national (TCN).

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

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



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

    U.S. national (USN) means an individual who is a U.S. citizen or a 
non-U.S. citizen lawfully admitted for permanent residence in the United 
States.

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



702.170-17  Automated Directives System.

    ``Automated Directives System'' (``ADS'') sets forth the Agency's 
policies and essential procedures, as well as

[[Page 12]]

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

[64 FR 42041, Aug. 3, 1999]



                   Subpart 702.270_Definitions Clause



702.270-1  Definitions clause.

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



PART 703_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 703.1_Safeguards

Sec.
703.104-5 Disclosure, protection, and marking of proprietary and source 
          information.
703.104-10.1 Violations or possible violations.

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



                        Subpart 703.1_Safeguards



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

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

[64 FR 16648, Apr. 6, 1999]



703.104-10.1  Violations or possible violations.

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

[64 FR 16648, Apr. 6, 1999]



PART 704_ADMINISTRATIVE MATTERS--Table of Contents




    Subpart 704.4_Safeguarding Classified Information Within Industry

Sec.
704.404 Contract clause.

Subpart 704.8--Contract Files [Reserved]

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



    Subpart 704.4_Safeguarding Classified Information Within Industry



704.404  Contract clause.

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

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

Subpart 704.8--Contract Files [Reserved]

[[Page 13]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 705_PUBLICIZING CONTRACT ACTIONS--Table of Contents




Sec.
705.002 Policy.

           Subpart 705.2_Synopsis of Proposed Contract Actions

705.202 Exceptions.
705.207 Preparation and transmittal of certain synopses.
705.502 Authority.

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



705.002  Policy.

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

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



           Subpart 705.2_Synopsis of Proposed Contract Actions



705.202  Exceptions.

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

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



705.207  Preparation and transmittal of certain synopses.

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

For exceptions, see 726.7005.

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



705.502  Authority.

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

[64 FR 5006, Feb. 2, 1999, as amended at 64 FR 42042, Aug. 3, 1999]



PART 706_COMPETITION REQUIREMENTS--Table of Contents




Sec.
706.003 Definitions.

Subparts 706.1-706.2 [Reserved]

[[Page 14]]

           Subpart 706.3_Other Than Full and Open Competition

706.302-5 Authorized or required by statute.
706.302-70 Impairment of foreign aid programs.
706.302-71 Small disadvantaged businesses.
706.303-1 Requirements.

                   Subpart 706.5_Competition Advocates

706.501 Requirement.

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



706.003  Definitions.

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

[50 FR 40528, Oct. 4, 1985]

Subparts 706.1-706.2 [Reserved]



           Subpart 706.3_Other Than Full and Open Competition



706.302-5  Authorized or required by statute.

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

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



706.302-70  Impairment of foreign aid programs.

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

[[Page 15]]

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

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



706.302-71  Small disadvantaged businesses.

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

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



706.303-1  Requirements.

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

[50 FR 16086, Apr. 24, 1985]



                   Subpart 706.5_Competition Advocates



706.501  Requirement.

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

[[Page 16]]

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

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



PART 707_ACQUISITION PLANNING--Table of Contents




Subpart 707.1--Acquisition Plans [Reserved]



PART 709_CONTRACTOR QUALIFICATIONS--Table of Contents




Sec.

          Subpart 709.4_Debarment, Suspension and Ineligibility

709.403 Definitions.

           Subpart 709.5_Organizational Conflicts of Interest

709.503 Waiver.
709.507-2 Contract clause.

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



          Subpart 709.4_Debarment, Suspension and Ineligibility



709.403  Definitions.

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

[62 FR 40467, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999]



           Subpart 709.5_Organizational Conflicts of Interest



709.503  Waiver.

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

[64 FR 42042, Aug. 3, 1999]



709.507-2  Contract clause.

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

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



PART 711_DESCRIBING AGENCY NEEDS--Table of Contents




Sec.
711.002-70 Metric system waivers.
711.002-71 Solicitation provisions and contract clauses.

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



711.002-70  Metric system waivers.

    (a) Criteria. The FAR 11.002(b) requirement to use the metric system 
of measurement for specifications and quantitative data that are 
incorporated in or required by USAID contracts may be waived when USAID 
determines in writing that such usage is impractical or is likely to 
cause U.S. firms to experience significant inefficiencies or the loss of 
markets.
    (b) Authorization. (1) The USAID Metric Executive (as designated in 
ADS

[[Page 17]]

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

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



711.002-71  Solicitation provisions and contract clauses.

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

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

[[Page 18]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 713_SIMPLIFIED ACQUISITION PROCEDURES--Table of Contents




Sec.
713.000 Scope of part.

                          Subpart 713.1_General

713.101 Definitions.

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

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



713.000  Scope of part.

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



                          Subpart 713.1_General



713.101  Definitions.

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



PART 714_SEALED BIDDING--Table of Contents




           Subpart 714.4_Opening of Bids and Award of Contract

Sec.
714.406-3 Other mistakes disclosed before award.
714.406-4 Disclosure of mistakes after award.

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



           Subpart 714.4_Opening of Bids and Award of Contract



714.406-3  Other mistakes disclosed before award.

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

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



714.406-4  Disclosure of mistakes after award.

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

[49 FR 13240, Apr. 3, 1984, as amended at 64 FR 42040, Aug. 3, 1999]



PART 715_CONTRACTING BY NEGOTIATION--Table of Contents




                     Subpart 715.3_Source Selection

Sec.
715.303 Responsibilities.
715.303-70 Responsibilities of USAID evaluation committees.
715.305 Proposal evaluation.
715.370 Alternative source selection procedures.
715.370-1 Title XII selection procedure--general.
715.370-2 Title XII selection procedure--collaborative assistance.

                   Subpart 715.6_Unsolicited Proposals

715.602 Policy.
715.604 Agency points of contact.

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

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

[[Page 19]]



                     Subpart 715.3_Source Selection



715.303  Responsibilities.



715.303-70  Responsibilities of USAID evaluation committees.

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

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



715.305  Proposal evaluation.

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

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



715.370  Alternative source selection procedures.

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

[64 FR 16649, Apr. 6, 1999]



715.370-1  Title XII selection procedure--general.

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

[[Page 20]]

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

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

[[Page 21]]



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

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

[[Page 22]]

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

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



                   Subpart 715.6_Unsolicited Proposals



715.602  Policy.

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

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



715.604  Agency points of contact.

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

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



PART 716_TYPES OF CONTRACTS--Table of Contents




               Subpart 716.3_Cost Reimbursement Contracts

Sec.
716.303 Cost-sharing contracts.
716.306 [Reserved]
709.406 Contract clauses.

Subpart 716.5 [Reserved]

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



               Subpart 716.3_Cost Reimbursement Contracts



716.303  Cost-sharing contracts.

    (a)-(b) [Reserved]

[[Page 23]]

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

[54 FR 46390, Nov. 3, 1989, as amended at 64 FR 42042, Aug. 3, 1999]



716.306  [Reserved]



716.406  Contract clauses.

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

[64 FR 5007, Feb. 2, 1999]

Subpart 716.5 [Reserved]



PART 717_SPECIAL CONTRACTING METHODS--Table of Contents




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



                 Subpart 717.70_Pharmaceutical Products



717.700  General.

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

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

[[Page 24]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 719_SMALL BUSINESS PROGRAMS--Table of Contents




                         Subpart 719.2_Policies

Sec.
719.270 Small business policies.
719.271 Agency program direction and operation.
719.271-1 General.
719.271-2 The USAID Office of Small and Disadvantaged Business 
          Utilization (SDB).
719.271-3 USAID contracting officers.
719.271-4 Heads of contracting activities.
719.271-5 Cognizant technical officers.
719.271-6 Small business screening procedure.
719.271-7 Reports on procurement actions that are exempted from 
          screening.
719.272 Small disadvantaged business policies.

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

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



                         Subpart 719.2_Policies



719.270  Small business policies.

    (a) In keeping with section 602 of the Foreign Assistance Act of 
1961 (22 U.S.C. 2352), as amended, USAID shall, insofar as practicable 
and to the maximum extent consistent with the accomplishment of the 
purposes of said Act, assist United States small business to participate 
equitably in the furnishing of supplies and services for Foreign 
Assistance activities.
    (b) It is the policy of USAID to:
    (1) Fully endorse and carry out the Government's small business 
program for placing a fair proportion of its purchases and contracts for 
supplies, construction (including maintenance and repair), research and 
development, and services (including personal, professional, and 
technical services) with small business, including minority small 
business concerns; and
    (2) Increase their participation in USAID procurement.
    (c) In furtherance of this policy:
    (1) Cognizant technical officers shall make positive efforts (see 
719.271-5) to identify potentially qualified small and minority business 
firms during precontract development of activities and shall, with the 
responsible contracting officers, assure that such firms are given full 
opportunity to participate equitably;
    (2) Small business set-asides shall be made for all contracts to be 
executed in USAID/Washington which qualify for small business set-aside 
action under Part 19 of the FAR; and
    (3) Consideration shall be given in appropriate cases to the award 
of the contract to the Small Business Administration for subcontracting 
to small business firms pursuant to section 8(a) of the Small Business 
Act (15 U.S.C. 637(a)).
    (d) This program shall be implemented by all USAID/Washington 
contracting activities in order to attain these policy objectives. In 
accordance with 719.271, all USAID/Washington direct-procurement 
requirements which exceed the simplified acquisition threshold shall be 
screened for small business opportunities by the Office of Small and 
Disadvantaged Business Utilization (SDB) except those exempted by 
719.271-6(a).
    (e) Where practicable and desirable, small business and minority 
business enterprise award goals will be established for the respective 
USAID/Washington procuring activities to provide incentive for 
contracting personnel to increase awards to small firms. The goals will 
be set by SDB after consultation with the respective head of the 
contracting activity (see subsection 702.170-10).
    (f) In the event of a disagreement between SDB and the contracting 
officer concerning: (1) A recommended set-aside, or (2) a request for 
modification or withdrawal of a class or individual set-aside, complete 
documentation of the case including the reasons for disagreement shall 
be transmitted within five working days to the head of the contracting 
activity (see 719.271-6(e)) for a decision. Procurement action shall be 
suspended pending a decision.

[[Page 25]]

    (g) The above suspension shall not apply where the contracting 
officer:
    (1) Certifies in writing, with supporting information, that in order 
to protect the public interest award must be made without delay;
    (2) Promptly provides a copy of said certification to SDB; and
    (3) Includes a copy of the certification in the contract file.
    (h) SDB shall be the Small Business Advisor and Minority Business 
Procurement Policy Manager for all USAID/Washington procuring 
activities.
    (i) The details on the Agency's direction and operation of the small 
business program are set forth in 719.271.
    (j) No decision rendered, or action taken, under the coverage set 
forth in 719.271 shall preclude the Small Business Administration from 
appealing directly to the USAID Administrator as provided for in part 19 
of the FAR.

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



719.271  Agency program direction and operation.



719.271-1  General.

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



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

    (a) SDB is responsible for administering, implementing, and 
coordinating the Agency's small business (including minority business 
enterprises) program.
    (b) SDB, headed by the Director SDB, who also serves as the Minority 
Business Procurement Manager, shall be specifically responsible for:
    (1) Developing policies, plans, and procedures for a coordinated 
Agency-wide small business and minority business enterprise procurement 
program;
    (2) Advising and consulting regularly with USAID/Washington 
procuring activities on all phases of their small business program, 
including, where practicable and desirable, the establishment of small 
business and minority business enterprise award goals;
    (3) Collaborating with officials of the Small Business 
Administration (SBA), other Government Agencies, and private 
organizations on matters affecting the Agency's small business program;
    (4) Developing and maintaining an USAID Consultant Registry 
Information System (ACRIS) of bidders/offerors (annotated to identify 
small business and minority business enterprise firms) capable of 
furnishing services for use by the USAID contracting activities;
    (5) Cooperating with contracting officers in administering the 
performance of contractors subject to the Small Business and Minority 
Business Enterprises Subcontracting Program clauses;
    (6) Developing a plan of operation designed to increase the share of 
contracts awarded to small business concerns, including small minority 
business enterprises;
    (7) Establishing small business class set-aside for types and 
classes of items of services where appropriate;
    (8) Reviewing each procurement requisition to make certain 
individual or class set-asides are initiated on all suitable USAID/
Washington proposed contract actions in excess of the simplified 
acquisition threshold which are subject to screening (see 719.271-6);
    (9) Maintaining a program designed to:
    (i) Locate capable small business sources for current and future 
procurements through GSA and other methods;
    (ii) Utilize every source available to determine if an item is 
obtainable from small business; and

[[Page 26]]

    (iii) Develop adequate small business competition on all appropriate 
procurements;
    (10) Taking action to assure that unnecessary qualifications, 
restrictive specifications, or other features (such as inadequate 
procurement lead time) of the programming or procurement process, which 
may prevent small business participation in the competitive process, are 
modified to permit such participation where an adequate product or 
service can be obtained;
    (11) Recommending that portions of large planned procurements or 
suitable components of end items or services be purchased separately so 
small firms may compete;
    (12) On proposed non-competitive procurements, recommending to the 
contracting officer that the procurement be made competitive when, in 
the opinion of SDB, there are small business or minority business 
enterprises believed competent to furnish the required goods or 
services, and supplying the contracting officer a list of such firms;
    (13) Assisting small business concerns with individual problems;
    (14) Promoting increased awareness by the technical staff of the 
availability of small business firms;
    (15) Making available to GSA copies of solicitations when so 
requested;
    (16) Counseling non-responsive or non-responsible small business 
bidders/offerors to help them participate more effectively in future 
solicitations; and
    (17) Examining bidders lists to make certain small business firms 
are appropriately identified and adequately represented for both 
negotiated and advertised procurements.

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



719.271-3  USAID contracting officers.

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

[[Page 27]]

    (n) Including the Small Business and Minority Business Enterprises 
Subcontracting Program clauses in all contracts where required by part 
19 of the FAR.

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



719.271-4  Heads of contracting activities.

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

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



719.271-5  Cognizant technical officers.

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

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



719.271-6  Small business screening procedure.

    (a) General. All USAID/Washington proposed contract actions in 
excess of the simplified acquisition threshold shall be screened by SDB, 
with the exception of:
    (1) Class set-asides and those unilaterally set-aside by contracting 
officers (719.271-3(f));
    (2) Those where the contracting officer certifies in writing that 
the public exigency will not permit the delay incident to screening 
(719.271-7(b));
    (3) ``Institution building'' contracts (contracts for development of 
a counterpart capability in the host country) with educational or 
nonprofit institutions; or collaborative assistance contracts pursuant 
to AIDAR 715.370-2.
    (4) Those involving the payment of tuition and fees for participant 
training at academic institutions; and
    (5) Personal services contract requirements (see 719.270).
    (b) Preparation of Form USAID 1410-14 (the Small Business/Minority 
Business Enterprise Procurement Review Form). (1) The contracting 
officer shall prepare the subject form in an original and 3 copies and 
forward the original and 2 copies to SDB within one working day of 
receipt by the contracting activity of a procurement requisition.
    (2) The contracting officer will attach to his/her transmittal a 
complete copy of the procurement request and a copy of the recommended 
source list as furnished by the technical office and supplemented by 
him/her.
    (3) The contracting officer shall complete blocks 2, 3, 4, 5, 9, and 
10 (when appropriate) prior to submittal to SDB.
    (c) Screening of Form USAID 1410-14 by SDB. (1) SDB will screen the 
contracting officer's recommendations on set-aside potential, small 
business subcontracting opportunities, and section 8(a) subcontracting, 
and furnish him/her with either a written concurrence in his/her 
recommendations or written counter-recommendations on the original and 
duplicate copy within five working days from receipt of the form from 
the contracting officer.
    (2) SDB will complete Blocks 1, 6, 7, 8, 11, and 12 (when 
appropriate) prior to returning the screened form to the contracting 
officer.
    (d) Concurrence or rejection procedure. (1) The contracting officer 
shall complete Block 13 upon receipt of the original and duplicate copy 
of the screened form from SDB.

[[Page 28]]

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

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



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

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



719.272  Small disadvantaged business policies.

    In addition to the requirements in FAR part 19, part 726 provides 
for contracting and subcontracting with small disadvantaged businesses 
and other disadvantaged enterprises based on provisions of the foreign 
assistance appropriations acts.

[58 FR 8702, Feb. 17, 1993]



PART 722_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION
--Table of Contents




                   Subpart 722.1_Basic Labor Policies

Sec.
722.103 Overtime.
722.103-1 Definitions.
722.103-2 Policy.

[[Page 29]]

722.103-3 [Reserved]
722.103-4 Approvals.
722.170 Employment of third country nationals (TCN's) and cooperating 
          country nationals (CCN's).

               Subpart 722.8_Equal Employment Opportuntity

722.805-70 Procedures.

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

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



                   Subpart 722.1_Basic Labor Policies



722.103  Overtime.



722.103-1  Definitions.

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



722.103-2  Policy.

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

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



722.103-3  [Reserved]



722.103-4  Approvals.

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

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



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

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

[[Page 30]]

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



               Subpart 722.8_Equal Employment Opportunity



722.805-70  Procedures.

    (a) The procedures in this section apply, as appropriate, for all 
contracts excluding construction, which shall be handled in accordance 
with (48 CFR) FAR 22.804-2. Contracting officers are responsible for 
ensuring that the requirements of (48 CFR) FAR 22.8 and related clauses 
are met before awarding any contracts or consenting to subcontracts 
subject to these requirements.
    (b) Representations and Certifications. The first step in ensuring 
compliance with these requirements is to obtain all necessary 
representations and certifications (Reps and Certs) required by FAR 
22.810. The contracting officer must review the Reps and Certs to 
determine whether they have been completed and signed as required, and 
are acceptable.
    (1) If any of these Reps and Certs are incomplete or unsigned, the 
contracting officer must request that the offeror(s) complete and sign 
them, as necessary, unless the initial evaluation of the offeror's 
proposal results in the contracting officer's concluding that the 
offeror would not, in any event, be within a competitive range 
determined in accordance with (48 CFR) FAR 15.306(c), or would not be 
selected if award is to be made without discussions. A request as 
described in this paragraph (b)(1) constitutes either a clarification 
per (48 CFR) FAR 15.306(a) (``resolving minor or clerical errors'', 
paragraph (a)(2)), or a communication before establishment of 
competitive range per (48 CFR) FAR 15.306(b), not a discussion per (48 
CFR) FAR 15.306(d).
    (2) If completed and signed Reps and Certs raise questions 
concerning the offeror's compliance with EEO requirements, or if the 
contracting officer has information from any other source which calls 
into question the offeror's eligibility for award based on this section 
and (48 CFR) FAR 22.8, the contracting officer must refer the matter to 
the cognizant regional Department of Labor Office of Federal Contract 
Compliance Programs (OFCCP) regardless of the estimated value of the 
contract; only OFCCP may make a determination of non-compliance with EEO 
requirements.
    (c) OFCCP's National Preaward Registry. If the Reps and Certs are 
complete, signed, and deemed acceptable, and the contracting officer has 
no reason to doubt their accuracy, the contracting officer must then 
consult the OFCCP's National Preaward Registry at the internet website 
in 48 CFR 22.805(a)(4) (i) to see if the offeror is listed.
    (1) If the conditions stated in FAR 22.805(a) (4) are met (including 
the contract file documentation requirement

[[Page 31]]

in paragraph (a)(4)(iii)), then the Contracting Officer does not need to 
take any further action in verifying the offeror's compliance with the 
requirements of this subpart and (48 CFR) FAR 22.8.
    (2) If the offeror does not appear in the National Preaward 
Registry, and the estimated amount of the contract or subcontract is 
expected to be under $10 million then the contracting officer may rely 
on the Reps and Certs as sufficient verification of the offeror's 
compliance.
    (3) If the offeror does not appear in the National Preaward Registry 
and the estimated amount of the contract or subcontract is $10 million 
or more, then the contracting officer must request a preaward clearance 
from the appropriate OFCCP regional office, in accordance with 48 CFR 
22.805(a). If the initial contact with OFCCP is by telephone, the 
contracting officer and OFCCP are to mutually determine what information 
is to be included in the written verification request. The contracting 
officer may need to provide the following information in addition to the 
items listed in FAR 22.805(a)(5), if so requested by the OFCCP regional 
office:
    (i) Name, title, address, and telephone number of a contract person 
for the prospective contractor;
    (ii) A description of the type of organization (university, 
nonprofit, etc.) and its ownership (private, foreign, state, etc.).
    (iii) Names and addresses of the organizations in a joint venture 
(if any).
    (iv) Type of procurement (new contract--RFP or IFB, amendment, etc.) 
and the period of the contract.
    (v) Copy of approved Reps and Certs.
    (d) In the event that OFCCP reports that the offeror is not in 
compliance, negotiations with the offeror shall be terminated.
    (e) Documentation for the contract file. Every contract file must 
contain completed and signed Reps and Certs. The file must clearly show 
that these documents have been reviewed and accepted by the contracting 
officer. If the Reps and Certs were revised to make them acceptable (see 
paragraph (b) of this section), the file must also document what changes 
were required and why, and verify that the changes were made. The 
contracting officer shall also document the OFCCP National Preaward 
Registry review (see paragraph (c)(1) of this section), and, if the 
Registry does not include the offeror:
    (1) For contracts or modifications over $10,000 but less than $10 
million, the file must contain a statement from the contracting officer 
that the contractor is considered in compliance with EEO requirements, 
and giving the basis for this statement (see paragraph (c)(2) of this 
section). This statement may be in a separate memorandum to the file or 
in the memorandum of negotiation.
    (2) For contracts or modifications of $10 million or more, the file 
must document all communications with OFCCP regarding the offeror's 
compliance. Such documentation includes copies of any written 
correspondence and a record of telephone conversations, specifying the 
name, address, and telephone number of the person contacted, a summary 
of the information presented, and any advice given by OFCCP.
    (f) Documentation in the event of non-compliance. In the event OFCCP 
determines that a prospective contractor is not in compliance, a copy of 
OFCCP's written determination, and a summary of resultant action taken 
(termination of negotiations, notification of offeror and cognizant 
technical officer, negotiation with next offeror in competitive range, 
resolicitation, etc.) will be placed in the contract file for any 
contract which may result, together with other records related to 
unsuccessful offers, and retained for at least six months following 
award.

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



PART 724_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION--Table of Contents




                Subpart 724.2_Freedom of Information Act

Sec.
724.202 Policy.

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

[[Page 32]]


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



                Subpart 724.2_Freedom of Information Act



724.202  Policy.

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



PART 725_FOREIGN ACQUISITION--Table of Contents




                 Subpart 725.1_Buy American Act_Supplies

Sec.
725.170 Exceptions for Foreign Assistance Act functions.

                     Subpart 725.4_Trade Agreements

725.403 Exceptions.

             Subpart 725.70_Source, Origin, and Nationality

725.701 General.
725.702 Designation of authorized geographic code.
725.703 Contractor employees.
725.704 Source, origin and nationality requirements--Contract clause.
725.705 Local procurement--contract clause.
725.706 Geographic source waivers.

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

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



                 Subpart 725.1_Buy American Act_Supplies



725.170  Exceptions for Foreign Assistance Act functions.

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



                     Subpart 725.4_Trade Agreements



725.403  Exceptions.

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

[61 FR 39093, July 26, 1996]



             Subpart 725.70_Source, Origin, and Nationality



725.701  General.

    USAID's source, origin and nationality requirements for program-
funded contracts and subcontracts are established in 22 CFR part 228, 
Rules on Source, Origin and nationality for Commodities and Services 
Financed by USAID. These policies as they apply to subcontracts and 
purchases under USAID program-funded contracts have been incorporated 
into the contract clauses referenced in 725.704 and 725.705 of this 
subpart.

[62 FR 40468, July 29, 1997]



725.702  Designation of authorized geographic code.

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

[[Page 33]]

    (b) Individual country and geographic codes are defined in the 
Agency Geographic Code Book.

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



725.703  Contractor employees.

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

[51 FR 34985, Oct. 1, 1986]



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

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

[62 FR 40468, July 29, 1997]



725.705  Local procurement--contract clause.

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

[62 FR 40468, July 29, 1997]



725.706  Geographic source waivers.

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

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



PART 726_OTHER SOCIOECONOMIC PROGRAMS--Table of Contents




            Subpart 726.70_Disadvantaged Enterprises Program

Sec.
726.7001 Scope of subpart.
726.7002 Definitions.
726.7003 Policy.
726.7004 Determination to use other than full and open competition.
726.7005 Exceptions.
726.7006 Determination of status as a disadvantaged enterprise.
726.7007 Requirement for subcontracting with disadvantaged enterprises.
726.7008 Limitations on subcontracting.

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

726.7101 Policy.
726.7102 PD 20 provision.

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

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



            Subpart 726.70_Disadvantaged Enterprises Program



726.7001  Scope of subpart.

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

[[Page 34]]

using other than full and open competition.

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



726.7002  Definitions.

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

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



726.7003  Policy.

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

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



726.7004  Determination to use other than full and open competition.

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

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



726.7005  Exceptions.

    The notification requirement in 705.207 and the subcontracting 
requirement in 726.7007 are based on statutory requirement and may not 
be deviated

[[Page 35]]

from under the provisions of subpart 701.4. By statute, the 
Administrator or designee may determine that these requirements do not 
apply to a particular contract or category of contracts. The M/OP 
Director has been designated to make such determinations. One such 
determination concerning subcontracting is set out in 726.7007.

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



726.7006  Determination of status as a disadvantaged enterprise.

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

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



726.7007  Requirement for subcontracting with disadvantaged enterprises.

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

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



726.7008  Limitations on subcontracting.

    The contracting officer shall insert the clause at 752.226-3, 
Limitations on Subcontracting, in any solicitation and contract for 
technical assistance services which is to be awarded under the authority 
of 706.302-71.

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



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



726.7101  Policy.

    USAID Policy Determination (PD) 20, ``Guidelines to Assure USAID 
Programs do not Result in the Loss of Jobs in the U.S.'' implemented 
statutory prohibitions on expenditure of appropriated funds. The PD 
contains a standard provision for inclusion in USAID-funded grants and 
inter-agency agreements

[[Page 36]]

and indicates that when the PD applies to a contract, appropriate 
provisions covering the subject matter are to be included. When the 
provisions of PD 20 do apply to a contract, the cognizant technical 
office shall provide to the contracting officer appropriate language 
tailored to the specific circumstances for the contract statement of 
work, or if applicable to the circumstances, the provision included in 
the PD (see 726.7102) may be used as a clause in the contract. The 
provision is not required in subcontracts.

[61 FR 39093, July 26, 1996]



726.7102  PD 20 provision.

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

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

[61 FR 39093, July 26, 1996]

[[Page 37]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 728_BONDS AND INSURANCE--Table of Contents




                           Subpart 728.1_Bonds

Sec.
728.105-1 Advance payment bonds.

                         Subpart 728.3_Insurance

728.305-70 Overseas worker's compensation and war-hazard insurance--
          waivers and USAID insurance coverage.
728.307-2 Liability.
728.307-70 Medical Evacuation (MEDEVAC) Services (Mar 1993).
728.309 Contract clause for worker's compensation insurance.
728.313 Contract clauses for insurance of transportation or 
          transportation-related services.

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

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



                           Subpart 728.1_Bonds



728.105-1  Advance payment bonds.

    (a) Generally, advance payment bonds will not be required in 
connection with USAID contracts containing an advance payment provision. 
In lieu thereof, contracting officers will follow procedures set forth 
in FAR 32.409-3.
    (b) Whenever a contracting officer considers that an advance payment 
bond is necessary, the contracting officer will: (1) Establish a bond 
penalty that will adequately protect interests of the Government, (2) 
use the USAID Advance Payment Bond format, (3) place bond with a surety 
currently approved by the U.S. Treasury Department according to the 
latest Treasury Department Circular 570, (4) stipulate that the cost of 
the bond shall not exceed a rate of $7.50 per $1,000 per annum based on 
the penalty of the bond, without the prior written approval of the 
Office of Procurement, Policy Division (M/OP/P).
    (c) Where the surety's obligation under an advance payment bond 
covers all advances made to the contractor during the term of the 
contract, no release should be issued to the surety until all advances 
made and to be made under the contract have been fully liquidated in 
accordance with the provisions of the contract, such as no-pay vouchers, 
reports of expenditures, or by refund. Where the surety's obligation 
under the bond is limited to advances made during a specified period of 
time, no release should be issued to the surety until all advances made 
and to be made during the specified period have been liquidated as 
aforesaid.

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



                         Subpart 728.3_Insurance



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

    (a) Upon the recommendation of the USAID Administrator, the 
Secretary of Labor may waive the applicability of the Defense Base Act 
(DBA) with respect to any contract, subcontract, or subordinate 
contract, work location, or classification of employees. Either the 
contractor or USAID can request a waiver from coverage. Such a waiver 
can apply to any employees who are not U.S. citizens, not residents of, 
or not hired in the United States. Waivers requested by the contractor 
are submitted to the contracting officer for approval and further 
submission to the Department of Labor, which grants the waiver. 
Application for a waiver is submitted on Labor Department Form BEC 565. 
USAID has a number of blanket waivers already in effect for certain 
countries that are applicable to its direct contracts with contractors 
performing in such countries. Where such waivers are granted from 
coverage under the DBA, the waiver is conditioned on providing other 
worker's compensation coverage to employees to which the waiver applies. 
Usually this takes the form of securing worker's compensation coverage 
of the country where work will be performed

[[Page 38]]

or of the country of the employee's nationality, whichever offers 
greater benefits. The Department of Labor has granted partial blanket 
waivers of DBA coverage applicable to USAID-financed contracts performed 
in certain countries, subject to two conditions:
    (1) Employees hired in the United States by the contractor, and 
citizens or residents of the United States are to be provided DBA 
insurance coverage;
    (2) Waived employees (i.e., employees who are neither U.S. citizens 
nor U.S. resident aliens, and who were hired outside the United States) 
will be provided worker's compensation benefits as required by the laws 
of the country in which they are working or the laws of their native 
country, whichever offers greater benefits. Information as to whether a 
DBA Waiver has been obtained by USAID for a particular country may be 
obtained from the cognizant USAID contracting officer.
    (b) To assist contractors in securing insurance at minimal rates for 
the workmen's compensation insurance required under the DBA, and to 
facilitate meeting insurance requirements for such coverage, USAID, 
after open and competitive negotiation, has entered into a contract with 
an insurance carrier to provide such coverage at a specified rate. The 
terms of this contract require the insurance carrier to provide 
coverage, and the contractor to make payments to and handle its claims 
with that insurance carrier. Contracting officers are responsible for 
explaining and advising contractors of the details of securing such 
insurance.

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



728.307-2  Liability.

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

[53 FR 50630, Dec. 16, 1988]



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

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

[59 FR 33446, June 29, 1994]



728.309  Contract clause for worker's compensation insurance.

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

[53 FR 50630, Dec. 16, 1988]



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

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

[53 FR 50630, Dec. 16, 1988]



PART 731_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




                       Subpart 731.1_Applicability

Sec.
731.109 Advance agreements.

[[Page 39]]

          Subpart 731.2_Contracts With Commercial Organizations

731.205-6 Compensation for personal services.
731.205-46 Travel costs.
731.205-70 Overseas recruitment incentive.
731.205-71 Salary supplements for Host Government employees.

          Subpart 731.3_Contracts With Educational Institutions

731.370 Predetermined fixed rates for indirect costs.
731.371 Compensation for personal services.
731.372 Fringe benefits.
731.373 Overseas recruitment incentive.

          Subpart 731.7_Contracts With Nonprofit Organizations

731.770 OMB Circular A-122; cost principles for nonprofit organizations; 
          USAID implementation.
731.771 Bid and proposal costs.
731.772 Compensation for personal services.
731.773 Independent research and development costs.
731.774 Overseas recruitment incentive.

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

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



                       Subpart 731.1_Applicability



731.109  Advance agreements.

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

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



          Subpart 731.2_Contracts With Commercial Organizations



731.205-6  Compensation for personal services.

    (a) General. When establishing the workweek for employees overseas 
the contractor will take local and USAID Mission practice into account 
and will insure that the workweek is compatible with that of those USAID 
Mission and Cooperating Country employees with whom the contractor will 
be working.
    (b) Reasonableness. ADS Chapter 302.5.3 states USAID policy 
regarding personnel compensation exceeding the maximum annual rate for 
an Executive Service level ES-6. Consistent with this policy, any 
employee's or consultant's base salary plus overseas recruitment 
incentive, if any (see 731.205-70), subject to this policy will be 
allowable under USAID-direct contracts only if approved in accordance 
with the essential procedures in ADS chapter E302.5.3. USAID policies on 
compensation of third country national or cooperating country national 
employees are set forth in AIDAR 722.170.
    (d)-(l) [Reserved]
    (m) Fringe benefits. USAID's policies on certain fringe benefits 
related to overseas service, including but not limited to leave, 
holidays, differentials and allowances, etc. are set forth in the 
appropriate contract clauses in AIDAR subpart 752.70.

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



731.205-46  Travel costs.

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

[57 FR 5236, Feb. 13, 1992]



731.205-70  Overseas recruitment incentive.

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

    (a) If a contractor employee serving overseas under a contract does 
not qualify for the exemption for overseas income provided under section 
911 of the U.S. Internal Revenue Code (26 U.S.C. 911), such employee is 
eligible to receive an overseas recruitment incentive (ORI), to the 
extent the ORI: Is authorized by the contractor's normal policy and 
practice; is deemed necessary by the contractor to recruit and retain 
qualified employees for overseas services; and does not exceed 10% of

[[Page 40]]

the base salary of the employee from date of arrival at overseas post to 
begin assignment to date of departure from post at the end of 
assignment. ORI is to be paid as a single payment at the end of the 
employee tour of duty overseas. The contractor shall take all reasonable 
and prudent steps to ensure that ORI is not paid to any employee who has 
received the IRS section 911 exemption.
    (b) In the event that an employee subsequently receives a section 
911 exclusion for any part of the base salary upon which this supplement 
has been paid, such supplement or appropriate portion thereof shall be 
reimbursed by the contractor to USAID with interest. The interest shall 
be calculated at the average U.S. Treasury rate in effect for the period 
that the contractor or his employee had the funds. Neither the 
contractor's nor the subcontractor's inability to collect refunds from 
eligible employees shall be used as a basis to excuse subsequent refunds 
by the contractor to USAID.

[57 FR 5236, Feb. 13, 1992]



731.205-71  Salary supplements for Host Government employees.

    (a) Definitions. (1) A Host Government (HG) employee is a person 
paid by the HG, occupying an established position, either temporary or 
permanent, part-time or full-time, within a HG institution.
    (2) An HG institution is an organization in which the government 
owns at least a fifty percent share or receives at least fifty percent 
of its financial support from the government.
    (b) General. Salary supplement occurs when payments are made that 
augment an HG employee's base salary or premiums, overtime, extra 
payments, incentive payment and allowances for which the HG employee 
would qualify under HG rules or practices for the performance of his/
hers regular duties or work performed during his/hers regular office 
hours. Per diem, invitational travel, honoraria and payment for work 
carried out outside of normal working hours are not considered to be 
salary supplements subject to the provisions in USAID policy referenced 
in paragraph (c) of this section.
    (c) Salary supplements are eligible for USAID financing only when 
authorized in accordance with USAID policy established in the cable 
State 119780 dated April 15, 1988 (on ADS-CD under USAID Handbooks, 
Handbook 1). If salary supplements have been authorized in a particular 
case, the Contracting Officer shall provide written approval to the 
contractor in order for such costs to be eligible. Any specific 
requirements or limitations shall be specified in the approval.
    (d) Contracting Officers shall insert the Clause at 752.231-71 in 
all contracts in which there is a possibility of the need of HG 
employees. It should also be inserted in all subsequent subcontracts.

[64 FR 16649, Apr. 6, 1999]



          Subpart 731.3_Contracts With Educational Institutions



731.370  Predetermined fixed rates for indirect costs.

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



731.371  Compensation for personal services.

    (a) General. When establishing the workweek for employees overseas 
the contractor will take local and USAID Mission practice into account 
and will ensure that the workweek is compatible with that of those USAID 
Mission and Cooperating Country employees with whom the contractor will 
be working.
    (b) Salaries and wages. (1) ADS Chapter 302.5.3 states USAID policy 
regarding personnel compensation exceeding the maximum annual rate for 
an Executive Service level ES-6. Consistent with this policy, any 
employee's or consultant's base salary plus overseas recruitment 
incentive, if any (see 731.205-70), subject to this policy will be 
allowable under USAID-direct contracts only if approved in accordance 
with the essential procedures in ADS chapter E302.5.3.

[[Page 41]]

    (2) In considering consulting income as a factor when determining 
allowable salary for service under a contract:
    (i) For faculty members working under annual appointments, salary 
for service under the contract may include the employee's on-campus 
salary plus ``consulting income'' (that is, income from employment other 
than the employee's regular on-campus appointment, excluding business or 
other activities not connected with the employee's profession) earned 
during the year preceding employment under the contract.
    (ii) For faculty members working under academic year appointments, 
salary for service under the contract may include the employee's on-
campus academic year salary plus ``consulting income'' as defined above 
earned during the year proceeding employment under the contract, or 
salary for service under the contract may be derived by annualizing the 
academic year salary (in which case ``consulting income'' may not be 
included).
    (3) USAID policies and compensation of third country national or 
cooperating country national employees are set forth in AIDAR 722.170.

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



731.372  Fringe benefits.

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

[57 FR 5236, Feb. 13, 1992]



731.373  Overseas recruitment incentive.

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

[57 FR 5236, Feb. 13, 1992]



          Subpart 731.7_Contracts With Nonprofit Organizations



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

    (a) Paragraph 6 of the transmittal letter for OMB Circular A-122 
specifies that ``Agencies shall designate a liaison official to serve as 
the agency representative on matters relating to the implementation of 
this Circular.'' The Director, Office of Procurement, has been so 
designated. The Overhead and Special Cost and Contract Close-Out Branch, 
Office of Procurement (OCC) provides staff assistance to the Director 
concerning OMB Circular A-122. OCC is also responsible for obtaining 
cognizance under the criteria in the transmittal letter for OMB Circular 
A-122; for liaison with other cognizant agencies; for authorizing 
exclusion of OMB Circular A-122 coverage for a particular nonprofit 
organization pursuant to paragraph 5 of the OMB Circular A-122 
transmittal letter; and for advice and assistance in applying OMB 
Circular A-122 cost principles.
    (b) Paragraph 4b of the OMB Circular A-122 transmittal letter 
contains a definition of prior approval as follows:

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


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

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

[[Page 42]]

items) which are included in the budget of this award.

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



731.771  Bid and proposal costs.

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



731.772  Compensation for personal services.

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

[57 FR 5236, Feb. 13, 1992]



731.773  Independent research and development costs.

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



731.774  Overseas recruitment incentive.

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

[57 FR 5236, Feb. 13, 1992]



PART 732_CONTRACT FINANCING--Table of Contents




                          Subpart 732.1_General

Sec.
732.111 Contract clauses.

                     Subpart 732.4_Advance Payments

732.401 Statutory authority.
732.402 General.
732.403 Applicability.
732.406-70 Agency-issued letters of credit.
732.406-71 Circumstances for use of an LOC.
732.406-72 Establishing an LOC.
732.406-73 LOC contract clause.
732.406-74 Revocation of the LOC.

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



                          Subpart 732.1_General



732.111  Contract clauses.

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

[61 FR 39094, July 26, 1996]



                     Subpart 732.4_Advance Payments

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

[[Page 43]]



732.401  Statutory authority.

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

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



732.402  General.

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

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



732.403  Applicability.

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



732.406-70  Agency-issued letters of credit.

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



732.406-71  Circumstances for use of an LOC.

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

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



732.406-72  Establishing an LOC.

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

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

[[Page 44]]



732.406-73  LOC contract clause.

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

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



732.406-74  Revocation of the LOC.

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



PART 733_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                         Subpart 733.1_Protests

Sec.
733.101 Definitions.
733.103-70 Protests to the agency.
733.103-71 Filing of protest.
733.103-72 Responsibilities.
733.103-73 Protests excluded from consideration.

        Subpart 733.27_USAID Procedures for Disputes and Appeals

733.270-1 Designation of Armed Services Board of Contract Appeals 
          (ASBCA) to hear and determine appeals under USAID contracts.
733.270-2 Special procedures regarding contract disputes appeals 
          promulgated pursuant to paragraph 2 of the Administrator's 
          designation.

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



                         Subpart 733.1_Protests

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



733.101  Definitions.

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

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



733.103-70  Protests to the agency.

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



733.103-71  Filing of protest.

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

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



733.103-72  Responsibilities.

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

[[Page 45]]

    (b) Contracting Officer. The Contracting Officer is responsible for 
requesting an extension of the time for acceptance of offers as 
described in FAR 33.103(f)(2).

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



733.103-73  Protests excluded from consideration.

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

[61 FR 39094, July 26, 1996, as amended at 64 FR 42040, Aug. 3, 1999]



        Subpart 733.27_USAID Procedures for Disputes and Appeals



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

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

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



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

    (a) The following rules will apply, in lieu of Rules 3 and 4(a) of 
the ASBCA,

[[Page 46]]

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

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

[[Page 47]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 734_MAJOR SYSTEM ACQUISITION--Table of Contents




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



734.002-70  USAID policy.

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

[55 FR 39976, Oct. 1, 1990, as amended at 64 FR 42040, Aug. 3, 1999]



PART 736_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




                Subpart 736.6_Architect-Engineer Services

Sec.
736.602-2 Evaluation boards.
736.602-3 Evaluation board functions.
736.602-4 Selection authority.
736.602-5 Short selection process for procurements not to exceed the 
          simplified acquisition threshold.
736.603 Collecting data on and appraising firms' qualifications.
736.605 Government cost estimate for architect-engineer work.

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

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



                Subpart 736.6_Architect-Engineer Services



736.602-2  Evaluation boards.

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

[54 FR 46391, Nov. 3, 1989]



736.602-3  Evaluation board functions.

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

[[Page 48]]

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



736.602-4  Selection authority.

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



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

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

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



736.603  Collecting data on and appraising firms' qualifications.

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

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



736.605  Government cost estimate for architect-engineer work.

    See 736.602-3(c)(5).

                           PART 737 [RESERVED]

[[Page 49]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 742_CONTRACT ADMINISTRATION--Table of Contents




                    Subpart 742.7_Indirect Cost Rates

Sec.
742.770 Negotiated indirect cost rate agreement.

            Subpart 742.15_Contractor Performance Information

742.1501 [Reserved]
742.1502 Policy.
742.1503 Procedures.

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



                    Subpart 742.7_Indirect Cost Rates



742.770  Negotiated indirect cost rate agreement.

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

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



            Subpart 742.15_Contractor Performance Information

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



742.1501  [Reserved]



742.1502  Policy.

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

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



742.1503  Procedures.

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



PART 745_GOVERNMENT PROPERTY--Table of Contents




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



                          Subpart 745.1_General



745.106  Contract clauses.

    (a) The contracting officer shall insert the clause at 752.245-71 in 
all contracts under which the contractor will acquire property for use 
overseas and the contract funds were obligated under a Strategic 
Objective agreement (or similar agreement) with the cooperating country.
    (b) The contracting officer shall insert the applicable clause as 
required in (48 CFR) FAR 45.106 in all contracts

[[Page 50]]

under which the contractor will acquire property with funds not already 
obligated under a Strategic Objective agreement (or similar agreement) 
with the cooperating country.

[64 FR 5008, Feb. 2, 1999]



PART 747_TRANSPORTATION--Table of Contents




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



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



747.507  Contract clauses.

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

[64 FR 5008, Feb. 2, 1999]



PART 749_TERMINATION OF CONTRACTS--Table of Contents




                    Subpart 749.1_General Principles

Sec.
749.100 Scope of subpart.
749.111 Review of proposed settlements.
749.111-70 Termination settlement review boards.
749.111-71 Required review and approval.

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

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



                    Subpart 749.1_General Principles



749.100  Scope of subpart.

    The Foreign Aid and Related Agencies Appropriation Act, 1963, and 
subsequent appropriation Acts, have imposed the following requirement:
    None of the funds appropriated or made available pursuant to this 
Act for carrying out the Foreign Assistance Act of 1961, as amended, may 
be used for making payments on any contract for procurement to which the 
United States is a party entered into after the date of enactment of 
this Act which does not contain a provision authorizing the termination 
of such contract for the convenience of the United States.
    See, for example, section 110 of the Foreign Assistance and Related 
Agencies Appropriation Act, 1965.



749.111  Review of proposed settlements.



749.111-70  Termination settlement review boards.

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

[49 FR 13256, Apr. 3, 1984, as amended at 64 FR 42040, Aug. 3, 1999]



749.111-71  Required review and approval.

    (a) When required. The USAID Settlement Review Board shall receive 
and approve all USAID/W and Mission proposed settlements or 
determinations if:

[[Page 51]]

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

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



PART 750_EXTRAORDINARY CONTRACTUAL ACTIONS--Table of Contents




Sec.
750.000 Scope of part.

Subpart 750.70 [Reserved]

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

750.7100 Scope of subpart.
750.7101 Authority.
750.7102 General policy.
750.7103 Definitions.
750.7104 Types of actions.
750.7105 Approving authorities.
750.7106 Standards for deciding cases.
750.7106-1 General.
750.7106-2 Amendments without consideration.
750.7106-3 Mistakes.
750.7106-4 Informal commitments.
750.7107 Limitations upon exercise of authority.
750.7108 Contractual requirements.
750.7109 Submission of requests by contractors.
750.7109-1 Filing requests.
750.7109-2 Form of requests by contractors.
750.7109-3 Facts and evidence.
750.7110 Processing cases.
750.7110-1 Investigation.
750.7110-2 Office of General Counsel coordination.
750.7110-3 Submission of cases to the M/OP Director.
750.7110-4 Processing by M/OP Director.
750.7110-5 Contract files.
750.7110-6 Inter-agency coordination.

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

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



750.000  Scope of part.

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

Subpart 750.70 [Reserved]



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



750.7100  Scope of subpart.

    This subpart sets forth the standards and the procedures for 
disposition of

[[Page 52]]

requests for extraordinary contractual actions under Executive Order 
11223.



750.7101  Authority.

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

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

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



750.7102  General policy.

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



750.7103  Definitions.

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

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



750.7104  Types of actions.

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



750.7105  Approving authorities.

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

[50 FR 16086, Apr. 24, 1985, as amended at 64 FR 42040, Aug. 3, 1999]



750.7106  Standards for deciding cases.



750.7106-1  General.

    The mere fact that losses occur under a Government contract is not, 
by itself, a sufficient basis for the exercise of the authority 
conferred by the Executive Order. Whether, in a particular case, 
appropriate action such as amendment without consideration, correction 
of a mistake or ambiguity in a contract, or formalization of an informal 
commitment, will protect the foreign policy interests of the United 
States is a matter of sound judgment to be made on the basis of all of 
the

[[Page 53]]

facts of such case. Although it is obviously impossible to predict or 
enumerate all the types of cases with respect to which action may be 
appropriate, examples of certain cases or types of cases where action 
may be proper are set forth in sections 750.7106-2 through 750.7106-4. 
Even if all of the factors contained in any of the examples are present, 
other factors or considerations in a particular case may warrant denial 
of the request. These examples are not intended to exclude other cases 
where the approving authority determines that the circumstances warrant 
action.



750.7106-2  Amendments without consideration.

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



750.7106-3  Mistakes.

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

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



750.7106-4  Informal commitments.

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



750.7107  Limitations upon exercise of authority.

    (a) The Executive Order is not authority for:
    (1) The use of the cost-plus-a-percentage-of-cost system of 
contracting;
    (2) The making of any contract in violation of existing law relating 
to limitation on profit or fees;
    (3) The waiver of any bid, payment performance or other bond 
required by law.
    (b) No amendments, or modifications shall be entered into under the 
authority of the Executive Order:
    (1) Unless, with respect to cases falling within Section 4 of the 
Executive

[[Page 54]]

Order, a finding is made that the action is necessary to protect the 
foreign policy interests of the United States;
    (2) Unless other legal authority in the Agency is deemed to be 
lacking or inadequate;
    (3) Except within the limits of the amounts appropriated and the 
statutory contract authorization.
    (c) No contract shall be amended or modified unless the request 
therefor has been filed before all obligations (including final payment) 
under the contract have been discharged.
    (d) No informal commitment shall be formalized unless:
    (1) A request for payment has been filed within six months after 
arranging to furnish or furnishing property or services in reliance upon 
the commitment;
    (2) USAID has received the services satisfactorily performed, or has 
accepted property furnished in reliance on the commitment;
    (3) The USAID employees alleged to have made the informal commitment 
have accepted responsibility for making the informal commitment in 
question; and
    (4) USAID has taken appropriate action to prevent recurrence.

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



750.7108  Contractual requirements.

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



750.7109  Submission of requests by contractors.



750.7109-1  Filing requests.

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

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



750.7109-2  Form of requests by contractors.

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



750.7109-3  Facts and evidence.

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

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



750.7110  Processing cases.



750.7110-1  Investigation.

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

[62 FR 40469, July 29, 1997, as amended at 64 FR 42042, Aug. 3, 1999]

[[Page 55]]



750.7110-2  Office of General Counsel coordination.

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

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999]



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

    Cases to be submitted for consideration by the M/OP Director shall 
be prepared and forwarded by the cognizant contracting officer through 
M/OP/E to the M/OP Director by means of an action memorandum. M/OP/E 
will review the action memorandum for accuracy and completeness. The 
action memorandum shall provide for approval or disapproval by the M/OP 
Director of the disposition recommended by the contracting officer. The 
action memorandum shall address:
    (a) The nature of the case;
    (b) The basis for authority to act under section 750.7101;
    (c) The findings of fact essential to the case (see 750.7109-3) 
arranged chronologically with cross references to supporting enclosures;
    (d) The conclusions drawn from applying the standards for deciding 
cases, as set forth in 750.7106, to the findings of fact;
    (e) Compliance with the limitations upon exercise of authority, as 
set forth in section 750.7107 (for informal commitments, include 
statements addressing each of the limitations in paragraph (d) of 
750.7107):
    (f) Concurrences or comments obtained from the Office of General 
Counsel;
    (g) Verification of funds availability and the contracting officer's 
determination of cost/price reasonableness when the disposition 
recommended requires payment to a contractor;
    (h) The disposition recommended and, if contractual action is 
recommended with respect to cases falling within Section 4 of the 
Executive Order, the opinion of the contracting officer that such action 
is necessary to protect the foreign policy interest of the United 
States; and
    (i) The action memorandum shall enclose all evidentiary materials, 
including the reports and comments of all cognizant Government or other 
officials, and a copy of the contractor's request. The action memorandum 
should provide the following information related to the contractor's 
request, as applicable:
    (1) Date of request;
    (2) Date request received by USAID:
    (3) Contract number;
    (4) Contractor's name and address;
    (5) Name, address, and phone number of contractor's representative;
    (6) Name, office symbol, and phone number of cognizant contracting 
officer;
    (7) Amount of request.

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999]



 750.7110-4  Processing by M/OP Director.

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

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999]



750.7110-5  Contract files.

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

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



750.7110-6  Inter-agency coordination.

    (a) General. Where a case involves matters of interest to more than 
one

[[Page 56]]

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

[[Page 57]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 752_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




              Subpart 752.2_Texts of Provisions and Clauses

Sec.
752.200 Scope of subpart.
752.202-1 Definitions.
752.204-2 Security requirements.
752.209-71 Organizational conflicts of interest discovered after award.
752.211-70 Language and measurement.
752.216-70 Award fee.
752.219-8 Utilization of small business concerns and small disadvantaged 
          business concerns.
752.225-9 Buy American Act--Trade Agreements Act--Balance of Payments 
          Program.
725.225-70 Source, origin and nationality requirements.
725.225-71 Local procurement.
752.226-1 Determination of status as disadvantaged enterprise.
752.226-2 Subcontracting with disadvantaged enterprises.
752.226-3 Limitation on subcontracting.
752.228-3 Worker's compensation insurance (Defense Base Act).
752.228-7 Insurance--liability to third persons
752.228-9 Cargo insurance.
752.228-70 Medical Evacuation (MEDEVAC) Services.
752.229-70 Federal, state and local taxes.
752.231-71 Salary supplements for HG employees.
752.232-7 Payments under time-and-materials and labor-hour contracts.
752.232-70 Letter of credit advance payment.
752.245-70 Government property--USAID reporting requirements.
752.245-71 Title to and care of property.
752.247-70 Preference for privately owned U.S.-flag commercial vessels.

             Subpart 752.70_Texts of USAID Contract Clauses

752.7000 Scope of subpart.
752.7001 Biographical data.
752.7002 Travel and transportation.
752.7003 Documentation for payment.
752.7004 Emergency locator information.
752.7005 Submission requirements for development experience documents.
752.7006 Notices.
752.7007 Personnel compensation.
752.7008 Use of Government facilities or personnel.
752.7009 Marking.
752.7010 Conversion of U.S. dollars to local currency.
752.7011 Orientation and language training.
752.7012 Protection of the individual as a research subject.
752.7013 Contractor-mission relationships.
752.7014 Notice of changes in travel regulations.
752.7015 Use of pouch facilities.
752.7016 Family planning and population assistance activities.
752.7017 [Reserved]
752.7018 Health and accident coverage for USAID participant trainees.
752.7019 Participant training.
752.7020 [Reserved]
752.7021 Changes in tuition and fees.
752.7022 Conflicts between contract and catalog.
752.7023 Required visa form for USAID participants.
752.7024 Withdrawal of students.
752.7025 Approvals.
752.7026 [Reserved]
752.7027 Personnel.
752.7028 Differential and allowances.
752.7029 Post privileges.
752.7030 Inspection trips by contractor's officers and executives.
752.7031 Leave and holidays.
752.7032 International travel approval and notification requirements.
752.7033 Physical fitness.
752.7034 Acknowledgement and disclaimer.
752.7035 Public notices.

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

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

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



              Subpart 752.2_Texts of Provisions and Clauses



752.200  Scope of subpart.

    None of the clauses specified in this subpart are for use in USAID 
personal services contracts. For personal services contract clauses, see 
AIDAR Appendix D--Direct USAID Contracts with U.S. Citizens or U.S. 
Residents for Personal Services Abroad and AIDAR Appendix J--Direct 
USAID Contracts with Cooperating Country Nationals

[[Page 58]]

and with Third Country Nationals for Personal Services Abroad.

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



752.202-1  Definitions.

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

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

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

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

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

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

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

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

    (a) Contractor's Chief of Party shall mean the representative of the 
Contractor in the Cooperating Country who shall be responsible for 
supervision of the performance of all duties undertaken by the 
Contractor in the Cooperating Country.
    (b) Cooperating Country National (CCN) employee means an individual 
who meets the citizenship requirements of 48 CFR 702.170-5 and is hired 
while residing outside the United States for work in a cooperating 
country.
    (c) Dependents shall mean:
    (1) Spouse;
    (2) Children (including step and adopted children) who are unmarried 
and under 21

[[Page 59]]

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

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



752.204-2  Security requirements.

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

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

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



752.209-71  Organizational conflicts of interest discovered after award.

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

 Organizational Conflicts of Interest Discovered After Award (JUN 1993)

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

                             (End of clause)

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



752.211-70  Language and measurement.

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

                   Language and Measurement (JUN 1992)

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

                             (End of clause)

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



752.216-70  Award fee.

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

[[Page 60]]

                          Award Fee (MAY 1997)

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

                             (End of clause)

[64 FR 5008, Feb. 2, 1999]



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

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

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

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



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

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

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



752.225-70  Source, origin and nationality requirements.

    The following clause is required as prescribed in 725.704.

         Source, Origin and Nationality Requirements (FEB 1997)

    (a) Except as may be specifically approved by the Contracting 
Officer, all commodities (e.g., equipment, materials, vehicles, 
supplies) and services (including commodity transportation services) 
which will be financed under this contract with U.S. dollars shall be 
procured in accordance with the requirements in 22 CFR part 228, ``Rules 
on Source, Origin and Nationality for Commodities and Services Financed 
by USAID.'' The authorized source for procurement is Geographic Code 000 
unless otherwise specified in the schedule of this contract. Guidance on 
eligibility of specific goods or services may be obtained from the 
Contracting Officer.
    (b) Ineligible goods and services. The Contractor shall not procure 
any of the following goods or services under this contract:
    (1) Military equipment,
    (2) Surveillance equipment,
    (3) Commodities and services for support of police and other law 
enforcement activities,
    (4) Abortion equipment and services,
    (5) Luxury goods and gambling equipment, or

[[Page 61]]

    (6) Weather modification equipment.
    (c) Restricted goods. The Contractor shall not procure any of the 
following goods or services without the prior written approval of the 
Contracting Officer:
    (1) Agricultural commodities,
    (2) Motor vehicles,
    (3) Pharmaceuticals and contraceptive items,
    (4) Pesticides,
    (5) Fertilizer,
    (6) Used equipment, or
    (7) U.S. government-owned excess property.
    If USAID determines that the Contractor has procured any of these 
specific restricted goods under this contract without the prior written 
authorization of the Contracting Officer, and has received payment for 
such purposes, the Contracting Officer may require the contractor to 
refund the entire amount of the purchase.

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



752.225-71  Local procurement.

    For use in any USAID contract involving performance overseas.

                      Local Procurement (FEB 1997)

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

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



752.226-1  Determination of status as disadvantaged enterprise.

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

           Disadvantaged Enterprise Representation (APR 1991)

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

                           (End of provision)

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

[[Page 62]]



752.226-2  Subcontracting with disadvantaged enterprises.

    As prescribed in 726.7007, insert the following clause:

        Subcontracting With Disadvantaged Enterprises (APR 1997)

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

                             (End of clause)

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



752.226-3  Limitation on subcontracting.

    As prescribed in 726.7008, insert the following clause:

                Limitations on Subcontracting (JUN 1993)

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

                             (End of clause)

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



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

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

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

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



752.228-7  Insurance--liability to third persons.

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

    ( ) Insurance on private automobiles. If the Contractor or any of 
its employees or their

[[Page 63]]

dependents transport or cause to be transported (whether or not at 
contract expense) privately owned automobiles to the Cooperating 
Country, or they or any of them purchase an automobile within the 
Cooperating Country, the Contractor agrees to make certain that all such 
automobiles during such ownership within the Cooperating Country will be 
covered by a paid-up insurance policy issued by a reliable company 
providing the following minimum coverages or such other minimum 
coverages as may be set by the Mission Director, payable in United 
States dollars or its equivalent in the currency of the Cooperating 
Country: injury to persons, $10,000/$20,000; property damage, $5,000. 
The premium costs for such insurance shall not be a reimbursable cost 
under this contract. Copies of such insurance policies shall be 
preserved and made available as part of the Contractor's records which 
are required to be preserved and made available by the ``Audit and 
Records--Negotiation'' clause of this contract.

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



752.228-9  Cargo insurance.

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

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

[53 FR 50632, Dec. 16, 1988]



752.228-70  Medical Evacuation (MEDEVAC) Services.

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

            Medical Evacuation (MEDEVAC) Services (MAR 1993)

    (a) Contractors agree to provide medevac service coverage to all 
U.S. citizen, U.S. resident alien, and Third Country National employees 
and their authorized dependents while overseas under an USAID financed 
direct contract. Coverage shall be obtained pursuant to the terms of the 
contract between USAID and USAID's medevac service provider unless 
exempted in accordance with paragraph (b) of this clause.
    (b) The following are exempted from the requirements in paragraph 
(a) of this clause:
    (i) Eligible employees and their dependents with a health program 
that includes sufficient medevac coverage as approved by the Contracting 
Officer.
    (ii) Eligible employees and their dependents located at Missions 
where the Mission Director makes a written determination to waive the 
requirement for such coverage based on findings that the quality of 
local medical services or other circumstances obviate the need for such 
coverage.
    (c) Contractors further agree to insert in all subcontracts 
hereunder to which the medevac coverage is applicable, a clause similar 
to this clause, including this sentence, imposing on all subcontractors 
a like requirement to provide medical evacuation services coverage and 
obtain medevac coverage in accordance with the contract between USAID 
and USAID's medevac service provider.

[59 FR 33447, June 29, 1994]



752.229-70  Federal, state and local taxes.

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



752.231-71  Salary supplements for HG employees.

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

             Salary Supplements for HG Employees (OCT 1998)

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

[64 FR 16649, Apr. 6, 1999]



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

    USAID uses the payment provision contained in FAR 52.232-7 in 
indefinite quantity contracts for professional services up to 120 days, 
as provided in

[[Page 64]]

USAIDAR 716.501(c). When this provision is used the following preamble 
will be included:

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

[50 FR 11450, Apr. 3, 1986]



752.232-70  Letter of credit advance payment.

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

               Letter of Credit Advance Payment (OCT 1989)

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

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



752.245-70  Government property--USAID reporting requirements.

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

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

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

[[Page 65]]

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

                    Property Inventory Verifications

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

                          Authorized Signature

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



752.245-71  Title to and care of property.

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

                Title to and Care of Property (APR 1984)

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

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



             Subpart 752.70_Texts of USAID Contract Clauses



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

    As prescribed in 747.507, insert the following clause:

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

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

[[Page 66]]

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

                               Alternate I

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

[64 FR 5009, Feb. 2, 1999]



             Subpart 752.70_Texts of USAID Contract Clauses



752.7000  Scope of subpart.

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

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



752.7001  Biographical data.

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

                      Biographical Data (JUL 1997)

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

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



752.7002  Travel and transportation.

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

                  Travel and Transportation (JAN 1990)

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

[[Page 67]]

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

[[Page 68]]

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

[[Page 69]]

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

[[Page 70]]

amount in excess of the reduced rates available in accordance with the 
foregoing.

                             (End of clause)

[55 FR 6803, Feb. 27, 1990, as amended at 56 FR 2699, Jan. 24, 1991]



752.7003  Documentation for payment.

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

                  Documentation for Payment (NOV 1998)

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

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

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

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

BY:_____________________________________________________________________

TITLE:__________________________________________________________________

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

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

[[Page 71]]



752.7004  Emergency locator information.

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

                Emergency Locator Information (JUL 1997)

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

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



752.7005  Submission requirements for development experience documents.

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

 Submission Requirements for Development Experience Documents (OCT 1997)

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

[[Page 72]]

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

[64 FR 5010, Feb. 2, 1999]



752.7006  Notices.

    The following clause shall be used in all USAID contracts.

                           Notices (APR 1984)

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

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



752.7007  Personnel compensation.

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

                    Personnel Compensation (JUL 1996)

    (a) Direct compensation of the Contractor's personnel will be in 
accordance with the Contractor's established policies, procedures, and 
practices, and the cost principles applicable to this contract.
    (b) Compensation (i.e., the employee's base annual salary plus 
overseas recruitment incentive, if any) which exceeds the maximum 
payable annual or daily rate for an Executive Service level ES-6, as 
published in the Federal Register, will be reimbursed only with the 
approval of the Contracting Officer, as prescribed in 731.205-6(d) or 
731.371(b), as applicable.

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



752.7008  Use of Government facilities or personnel.

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

          Use of Government Facilities or Personnel (APR 1984)

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

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



752.7009  Marking.

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

                           Marking (JAN 1993)

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

[[Page 73]]

original should be retained by the Contractor.

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



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

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

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

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

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



752.7011  Orientation and language training.

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

              Orientation and Language Training (APR 1984)

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



752.7012  Protection of the individual as a research subject.

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

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

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

[[Page 74]]

as to the contractor, USAID staff, consultants and advisory groups may 
independently review and inspect research, and research processes and 
procedures involving human subjects, and based on such findings, the 
CHSO may prohibit research which presents unacceptable hazards or 
otherwise fails to comply with USAID procedures. Informed consent 
documents must include the stipulation that the subject's records may be 
subject to such review.

[61 FR 39095, July 26, 1996]



752.7013  Contractor-mission relationships.

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

               Contractor-Mission Relationships (OCT 1989)

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

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

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

                             (End of clause)

[54 FR 46391, Nov. 3, 1989]



752.7014  Notice of changes in travel regulations.

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

           Notice of Changes in Travel Regulations (JAN 1990)

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

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]



752.7015  Use of pouch facilities.

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

[[Page 75]]

                   Use of Pouch Facilities (JUL 1997)

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

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



752.7016  Family planning and population assistance activities.

    The following clause is applicable to all contracts involving any 
aspect of family planning or population activities.

     Family Planning and Population Assistance Activities (AUG 1986)

    (a) Voluntary Participation. (1) The Contractor agrees to take any 
steps necessary to ensure that funds made available under this contract 
will not be used to coerce any individual to practice methods of family 
planning inconsistent with such individual's moral, philosophical, or 
religious beliefs. Further, the Contractor agrees to conduct its 
activities in a manner which safeguards the rights, health and welfare 
of all individuals who take part in the program.
    (2) Activities which provide family planning services or information 
to individuals, financed in whole or in part under this contract, shall 
provide a broad range of family planning methods and services available 
in the country which the activity is conducted or shall provide 
information to such individuals regarding where such methods and 
services may be obtained.
    (b) Prohibition on Abortion-related Activities. No funds made 
available under this Contract shall be used to finance, support, or be 
attributed to the following activities: (i) Procurement or distribution 
of equipment intended to be used for the purposes of inducing abortions 
as a method of family planning: (ii) special fees or incentives to women 
to coerce or motivate them to have abortions; (iii) payments to persons 
to perform abortions or to solicit persons to undergo abortions; (iv) 
information, education, training, or communication programs that seek to 
promote abortion as a method of family planning; (v) any biomedical 
research which relates, in whole or in part, to methods of, or the 
performance of, abortions or involuntary sterilization as a means of 
family planning (epidemiologic or descriptive research to assess the 
incidence, extent or consequences of abortion is not precluded); or (vi) 
lobbying for abortion.
    (c) Voluntary Participation Requirements for Sterilization Programs. 
(1) None of the funds made available under this contract shall be used 
to pay for the performance of involuntary sterilizations or to coerce or 
provide any financial incentive to any person to practice 
sterilizations.

[[Page 76]]

    (2) The Contractor shall insure that any surgical sterilization 
procedures supported in whole or in part by funds from the contract are 
performed only after the individual has voluntarily come to the 
treatment facility and has given an informed consent to the 
sterilization procedure. Informed consent means the voluntary knowing 
assent from the individual given after being advised of the surgical 
procedures to be followed, the attendant discomforts and risks, the 
benefits to be expected, the availability of alternative methods of 
family planning, the purpose of the operation and its irreversibility, 
and the fact that the consent can be withdrawn at any time prior to the 
operation. An individual's consent is considered voluntary if it is 
based upon the exercise of free choice and is not obtained by any 
special inducement or any element of force, fraud, deceit, duress or 
other forms of coercion or misrepresentation.
    (3) Further, the Contractor shall document the patient's informed 
consent by: (i) A written consent document in a language the patient 
understands and speaks, which explains the basic elements of informed 
consent, as set out above, and which is signed by the individual and by 
the attending physician or by the authorized assistant of the attending 
physician; or (ii) when a patient is unable to read adequately a written 
certification signed by the attending physician or by the authorized 
assistant of the attending physician that the basic elements of informed 
consent above were orally presented to the patient, and that the patient 
thereafter consented to the performance of the operation. The receipt of 
the oral explanation shall be acknowledged by the patient's mark on the 
certification and by the signature or mark of the witness who shall be 
of the same sex and speak the same language as the patient.
    (4) Copies of the informed consent forms and certification documents 
for each voluntary sterilization (VS) procedure must be retained by the 
performing Contractor or subcontractor for a period of three years after 
the performance of the sterilization procedure.
    (d) The Contractor shall insert the substance of this clause in any 
subgrants, subcontracts, purchase orders, and other subordinate 
agreements hereunder whenever appropriate to the goods and services to 
be provided under such agreements.

[49 FR 13259, Apr. 3, 1984, as amended at 49 FR 33669, Aug. 24, 1984; 51 
FR 34985, Oct. 1, 1986]



752.7017  [Reserved]



752.7018  Health and accident coverage for USAID participant trainees.

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

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

    (a) In accordance with the requirements of USAID Automated Directive 
System (ADS) 253.5.6b, the Contractor shall enroll all non-U.S. trainees 
(hereinafter referred to as ``participants''), whose training in the 
U.S. is financed by USAID under this contract, in USAID's Health and 
Accident Coverage (HAC) program. Sponsored trainees enrolled in third-
country or in-country training events are not eligible for USAID's HAC 
program, but the Contractor may obtain alternative local medical and 
accident insurance at contract expense, provided the cost is consistent 
with the cost principles in FAR 31.2.
    (b) When enrollment in the HAC program is required per paragraph (a) 
of this clause, the Contractor must enroll each participant in the HAC 
program through one of two designated contractors prior to the 
initiation of travel by the participant. USAID has developed an Agency-
wide database training management system, the Training Results and 
Information Network (``TraiNet''), which is the preferred system for 
managing USAID's participant training program, including enrollment in 
the HAC program. However, until such time as the USAID sponsoring unit 
(as defined in ADS 253) has given the Contractor access to USAID's 
``TraiNet'' software for trainee tracking and HAC enrollment, the 
Contractor must fill out and mail the Participant Data Form (PDF) (Form 
USAID 1381-4) to USAID. The Contractor can obtain information regarding 
each HAC program contractor, including contact information, and a supply 
of the PDF forms and instructions for completing and submitting them, by 
contacting the data base contractor serving the Global Center for Human 
Capacity Development (G/HCD).
    (c) The Contractor must ensure that HAC enrollment begins 
immediately upon the participant's departure for the United States for 
the purpose of participating in a training program financed by USAID, 
and that enrollment continues in full force and effect until the 
participant returns to his/her country of origin, or is released from 
USAID's responsibility, whichever is the sooner.
    (1) The HAC insurance provider, not the Contractor, shall be 
responsible for paying all reasonable and necessary medical 
reimbursement charges not otherwise covered by student health service or 
other insurance programs, subject to the availability of funds for such 
purposes, in accordance with the standards of coverage established by 
USAID under its HAC program and by the HAC providers' contracts.
    (2) After HAC enrollment, upon receipt of HAC services invoice from 
the selected HAC provider, the Contractor shall submit payment directly 
to the HAC provider.

[[Page 77]]

    (3) The Contractor is responsible for ensuring that participants and 
any stakeholders (as defined in ADS 253) are advised that USAID is not 
responsible for any medical claims in excess of the coverages provided 
by the HAC program, or for medical claims not eligible for coverage 
under the HAC program, or not otherwise covered in this section.
    (d) The Contractor, to the extent that it is an educational 
institution with a mandatory student health service program, shall also 
enroll participants in that institution's student health service 
program. Medical costs which are covered under the institution's student 
health service shall not be eligible for payment under USAID's HAC 
program.
    (e) If the Contractor has a mandatory, non-waivable health and 
accident insurance program for students, the costs of such insurance 
will be allowable under this contract. Any claims eligible under such 
insurance will not be payable under USAID's HAC plan or under this 
contract. Even though the participant is covered by the Contractor's 
mandatory, non-waivable health and accident insurance program, the 
participant MUST be enrolled in USAID's more comprehensive HAC program.
    (f) Medical conditions pre-existing to the participant's sponsorship 
for training by USAID, discovered during the required pre-departure 
medical examination, are grounds for ineligibility for sponsorship 
unless specifically waived by the sponsoring unit, and covered through a 
separate insurance policy maintained by the participant or his employer, 
or a letter of guarantee from the participant or the employer (which 
thereby assumes liability for any related charges that might 
materialize. See ADS 253).

[64 FR 5010, Feb. 2, 1999]



752.7019  Participant training.

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

                     Participant Training (JAN 1999)

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

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

[64 FR 5011, Feb. 2, 1999]



752.7020  [Reserved]



752.7021  Changes in tuition and fees.

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

                 Changes in Tuition and Fees (APR 1984)

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



752.7022  Conflicts between contract and catalog.

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

[[Page 78]]

            Conflicts Between Contract and Catalog (APR 1984)

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



752.7023  Required visa form for USAID participants.

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

          Required Visa Form for USAID Participants (APR 1984)

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



752.7024  Withdrawal of students.

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

                    Withdrawal of Students (APR 1984)

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



752.7025  Approvals.

    For use in all USAID contracts.

                          Approvals (APR 1984)

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



752.7026  [Reserved]



752.7027  Personnel.

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

                          Personnel (DEC 1990)

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

[[Page 79]]

or occupation in the Cooperating Country or other foreign countries in 
which he/she is assigned. This provision does not apply to employees or 
consultants who are citizens or legal residents of the Cooperating 
Country.

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

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

                             (End of clause)

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



752.7028  Differential and allowances.

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

                 Differentials and Allowances (JUL 1996)

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

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

[[Page 80]]

quarters allowance are never both payable to an employee for the same 
period of time. The Contractor will be reimbursed for payments made to 
employees for a living quarters allowance for rent and utilities if such 
facilities are not supplied. Such allowance shall not exceed the amount 
paid USAID employees of equivalent rank in the Cooperating Country, in 
accordance with either the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 130, as from time to time amended, or 
other rates approved by the Mission Director. Subject to the written 
approval of the Mission Director, short-term employees may be paid per 
diem (in lieu of living quarters allowance) at rates prescribed by the 
Federal Travel Regulations, as from time to time amended, during the 
time such short-term employees spend at posts of duty in the Cooperating 
Country under this contract. In authorizing such per diem rates, the 
Mission Director shall consider the particular circumstances involved 
with respect to each such short-term employee including the extent to 
which meals and/or lodging may be made available without charge or at 
nominal cost by an agency of the United States Government or of the 
Cooperating Government, and similar factors.
    (c) Temporary quarters subsistence allowance. Temporary quarters 
subsistence allowance is a quarters allowance granted to an employee for 
the reasonable cost of temporary quarters incurred by the employee and 
his family for a period not in excess of (i) 90 days after first arrival 
at a new post in a foreign area or a period ending with the occupation 
of residence (permanent) quarters, if earlier, and (ii) 30 days 
immediately preceding final departure from the post subsequent to the 
necessary vacating of residence quarters, unless an extension is 
authorized in writing by the Mission Director. The Contractor will be 
reimbursed for payments made to employees and authorized dependents for 
temporary quarters subsistence allowance, in lieu of living quarters 
allowance, not to exceed the amount set forth in the Standardized 
Regulations (Government Civilians, Foreign Areas), Chapter 120, as from 
time to time amended.
    (d) Post allowance. Post allowance is a cost-of-living allowance 
granted to an employee officially stationed at a post where the cost of 
living, exclusive of quarters cost, is substantially higher than in 
Washington, DC. The Contractor will be reimbursed for payments made to 
employees for post allowance not to exceed those paid USAID employees in 
the Cooperating Country, in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 220, as from time to time 
amended.
    (e) Supplemental post allowance. Supplemental post allownce is a 
form of post allowance granted to an employee at his/her post when it is 
determined that assistance is necessary to defray extraordinary 
subsistence costs. The Contractor will be reimbursed for payments made 
to employees for supplemental post allowance not to exceed the amount 
set forth in the Standardized Regulations (Government Civilians, Foreign 
Areas), Chapter 230, as from time to time amended.
    (f) Educational allowance. Educational allowance is an allowance to 
assist an employee in meeting the extraordinary and necessary expenses, 
not otherwise compensated for, incurred by reason of his/her service in 
a foreign area in providing adequate elementary and secondary education 
for his/her children. The Contractor will be reimbursed for payments 
made to regular employees for educational allowances for their dependent 
children in amounts not to exceed those set forth in the Standardized 
(Regulations Government Civilians, Foreign Areas), Chapter 270, as from 
time to time amended.
    (g) Educational travel. Educational travel is travel to and from a 
school in the United States for secondary education (in lieu of an 
educational allowance) and for college education. The Contractor will be 
reimbursed for payments made to regular employees for educational travel 
for their dependent children provided such payment does not exceed that 
which would be payable in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 280, as from time to time 
amended. Educational travel shall not be authorized for regular 
employees whose assignment is less than two years.
    (h) Separate maintenance allowance. Separate maintenance allowance 
is an allowance to assist an employee who is compelled, by reason of 
dangerous, notably unhealthful, or excessively adverse living conditions 
at his/her post of assignment in a foreign area, or for the convenience 
of the Government, to meet the additional expense of maintaining his/her 
dependents elsewhere than at such post. The Contractor will be 
reimbursed for payments made to regular employees for a separate 
maintenance allowance not to exceed that made to Aid employees in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 260, as from time to time amended.
    (i) Payments during evacuation. The Standardized Regulations 
(Government Civilians, Foreign Areas) provide the authority for 
efficient, orderly, and equitable procedure for the payment of 
compensation, post differential and allowances in the event of an 
emergency evacuation of employees or their dependents, or both, from 
duty stations for military or other reasons or because of imminent 
danger to their lives. If evacuation has been authorized by the Mission 
Director

[[Page 81]]

the Contractor will be reimbursed for payments made to employees and 
authorized dependents evacuated from their post of assignment in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 600, and the Federal Travel Regulations, as from 
time to time amended.
    (j) Danger pay allowance. (1) The contractor will be reimbursed for 
payments made to its employees for danger pay not to exceed that paid 
USAID employees in the cooperating country, in accordance with the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
650, as from time to time amended.
    (2) Danger pay is an allowance that provides additional compensation 
above basic compensation to an employee in a foreign area where civil 
insurrection, civil war, terrorism or wartime conditions threaten 
physical harm or imminent danger to the health or well-being of the 
employee. The danger pay allowance is in lieu of that part of the post 
differential which is attributable to political violence. Consequently, 
the post differential may be reduced while danger pay is in effect to 
avoid dual crediting for political violence.

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



752.7029  Post privileges.

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

                       Post Privileges (JUL 1993)

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

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



752.7030  Inspection trips by contractor's officers and executives.

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

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

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



752.7031  Leave and holidays.

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

                      Leave and Holidays (OCT 1989)

    (a) Vacation leave. (1) The Contractor may grant to its employees 
working under this contract vacations of reasonable duration in 
accordance with the Contractor's practice for its employees, but in no 
event shall such vacation leave be earned at a rate exceeding 26 work 
days per annum. Reimbursement for vacation leave is limited to the 
amount earned by employees while serving under this contract.
    For regular employees during their tour of duty in the Cooperating 
Country, vacation leave is provided under this contract primarily for 
purposes of affording necessary rest and recreation. The Contractor's 
Chief of Party, the employee and the Cooperating Country institution 
associated with this project shall develop vacation leave schedules 
early in the employee's tour of duty taking into consideration project 
requirements, employee preference and other factors.
    (2) Leave taken during the concluding weeks of an employee's tour 
shall be included in the established leave schedule and be limited to 
that amount of leave which can be earned during a twelve-month period 
unless approved in accordance with paragraph (a)(3) of this clause.

[[Page 82]]

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

[[Page 83]]

    (7) Except as provided in the schedule or approved by the Mission 
Director or the Contracting Officer, home leave is not authorized for 
TCN or CCN employees.
    (d) Holidays. Holidays for Contractor employees serving in the 
United States shall be in accordance with the Contractor's established 
policy and practice. Holidays for Contractor employees serving overseas 
should take into consideration local practices and shall be established 
in collaboration with the Mission Director.
    (e) Military leave. Military leave of not more than 15 calendar days 
in any calendar year may be granted in accordance with the Contractor's 
usual practice to each regular employee whose appointment is not limited 
to 1 year or less and who is a reservist of the United States Armed 
Forces, provided that such military leave has been approved in advance 
by the cognizant Mission Director or Assistant Administrator. A copy of 
any such approval shall be provided to the Contracting Officer.
    (f) Leave Records. The Contractor's leave records shall be preserved 
and made available as part of the contractor's records which are 
required to be preserved and made available by the Examination of 
Records by the Comptroller General and Audit clauses of this contract.

                             (End of clause)

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



752.7032  International travel approval and notification requirements.

    For use in any USAID contract requiring international travel.

 International Travel Approval and Notification Requirements (JAN 1990)

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

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]



752.7033  Physical fitness.

    For use in all USAID contracts involving performance overseas.

                       Physical Fitness (JUL 1997)

    (The requirements of this provision do not apply to employees hired 
in the Cooperating Country or to authorized dependents who were already 
in the Cooperating Country when their sponsoring employee was hired.)
    (a) Assignments of less than 60 days in the Cooperating Country. The 
contractor shall require employees being assigned to the Cooperating 
Country for less than 60 days to be examined by a licensed doctor of 
medicine. The contractor shall require the doctor to provide to the 
contractor a written statement that in his/her medical opinion the 
employee is physically qualified to engage in the type of activity for 
which he/she is employed and the employee is physically able to reside 
in the country to which he/she is assigned. Under a cost reimbursement 
contract, if the contractor has no written statement of medical opinion 
on file prior to the departure for the Cooperating Country of any 
employee and such employee is unable to perform the type of activity for 
which he/she is employed or cannot complete his/her tour of duty because 
of any physical disability (other than physical disability arising from 
an accident while employed under this contract), the contractor shall be 
responsible for returning the disabled employee to his/her point of hire 
and providing a replacement at no additional cost to the Government. In 
addition, in the case of a cost reimbursement contract, the contractor 
shall not be entitled to reimbursement for any additional costs 
attributable to delays or other circumstances caused by the employee's 
inability to complete his/her tour of duty.
    (b) Assignments of 60 days or more in the Cooperating Country. (1) 
The Contracting Officer shall provide the contractor with a reproducible 
copy of the ``USAID Contractor Employee Physical Examination Form''. 
This form is for collection of information; it has been reviewed and 
approved by OMB (see 701.105(a)). Information required by the Paperwork 
Reduction Act for reporting the burden estimate, the points of contact 
regarding burden estimate, and the OMB approval expiration date, are 
printed on the form. The contractor shall reproduce the form as 
required, and provide a copy to each employee and authorized dependent 
proposed for assignments of 60 days or more in the Cooperating Country. 
The contractor shall

[[Page 84]]

have the employee and all authorized dependents obtain a physical 
examination from a licensed physician, who will complete the form for 
each individual. The employee will deliver the physical examination 
form(s) to the embassy health unit in the Cooperating Country.
    (2) (The following information is provided for two purposes: To 
assist fixed price offerors to develop their price proposal, and to 
provide cost reimbursement contractors with guidance in determining 
reasonable and allowable costs.) As a contribution to the cost of 
medical examinations, USAID shall reimburse the contractor for the 
physical examination authorized in paragraph (a) of this section in an 
amount not to exceed $100 for the physical examination, plus 
reimbursement of charges for immunizations to the extent not covered by 
the contractor's health insurance policy. For physical examinations 
authorized in paragraph (b)(1) above, the USAID contribution to the cost 
of the examination shall be as follows:
    (i) For the employee and authorized dependents 12 years of age and 
over, one half of the cost of each examination up to a maximum USAID 
share of $300 per individual, plus reimbursement of charges for 
immunizations to the extent not covered by the contractor's health 
insurance policy.
    (ii) For authorized dependents under 12 years of age, one half of 
the cost of each examination up to a maximum USAID share of $120 per 
individual, plus reimbursement of charges for immunizations to the 
extent not covered by the contractor's health insurance policy.
    (iii) The contractor must obtain the prior written approval of the 
Contracting Officer to receive any USAID contributions higher than these 
limits.

                             (End of clause)

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



752.7034  Acknowledgement and disclaimer.

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

                Acknowledgement and Disclaimer (DEC 1991)

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

                             (End of clause)

[57 FR 5237, Feb. 13, 1992]



752.7035  Public notices.

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

                        Public Notices (DEC 1991)

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

[[Page 85]]

                             (End of clause)

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

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



PART 753_FORMS--Table of Contents




                          Subpart 753.1_General

Sec.
753.107 Obtaining forms.

                   Subpart 753.2_Prescription of Forms

753.270 Prescription of USAID Forms.

                   Subpart 753.3_Illustration of Forms

753.300 Scope of subpart.

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

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



                          Subpart 753.1_General



753.107  Obtaining forms.

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

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



                   Subpart 753.2_Prescription of Forms



753.270  Prescription of USAID forms.

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



                   Subpart 753.3_Illustration of Forms



753.300  Scope of subpart.

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

                 Appendixes A-C to Chapter 7 [Reserved]

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

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

[[Page 86]]

    (8) USAID direct-hire employees means civilian employees appointed 
under USAID Handbook 25 procedures or superseding Automated Directive 
System (ADS) Chapters.

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

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

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

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

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

    (b) Limitations on Personal Services Contracts. (1) Personal 
services contracts may only be used when adequate supervision is 
available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.
    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, U.S. citizen personal services contractors 
(USPSCs) may be delegated or assigned any authority, duty or 
responsibility delegable to U.S. citizen direct-hire employees (USDH 
employees) except that:
    a. They may not supervise U.S. direct-hire employees of USAID or 
other U.S. Government agencies. They may supervise USPSCs and non-U.S. 
citizen employees.
    b. They may not be designated as Contracting Officers or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters, but may not 
be delegated authority to make a final decision on personnel selection.
    e. Exceptions to the limitations in this paragraph (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).
    (c) Withholdings and Fringe Benefits. (1) Personal services 
contractors (PSCs) are Government employees for purposes of the Internal 
Revenue Code (Title 26 of the United States Code) and are, therefore, 
subject to social security (FICA) and Federal income tax (FIT) 
withholdings. As employees, they are ineligible for the ``foreign earned 
income'' exclusion under the Internal Revenue Service (IRS) regulations 
(see 26 CFR 1.911-3(c)(3)).
    (2) Personal services contractors are treated on par with other 
Government employees, except for programs based on any law administered 
by the Federal Office of Personnel Management (e.g., incentive awards, 
life insurance, health insurance, and retirement programs covered by 5 
CFR Parts 530, 531, 831, 870, 871, and 890). While PSCs are ineligible 
to participate in any of these programs, the following fringe benefits 
are provided as a matter of policy:
    (i) The employer's FICA contribution for retirement purposes.

[[Page 87]]

    (ii) A contribution against the actual cost of the PSC's annual 
health and life insurance costs. Proof of health and life insurance 
coverage and its actual cost to the PSC shall be submitted to the 
Contracting Officer before any contribution is made. (See also paragraph 
4(c)(3) of this Appendix.)
    (A) The contribution for health insurance shall not exceed 50% of 
the actual cost to the PSC for his/her annual health insurance, or the 
maximum U.S. Government contribution for a direct-hire employee, as 
announced annually by the Office of Personnel Management, whichever is 
less. If the PSC is covered under a spouse's health insurance plan, 
where the spouse's employer pays some or all of the health insurance 
costs, the cost to the PSC for annual health insurance shall be 
considered to be zero.
    (B) The contribution for life insurance shall be up to 50% of the 
actual annual costs to the PSC for life insurance, not to exceed $500.00 
per year.
    (iii) PSCs shall receive the same percentage pay comparability 
adjustment as U.S. Government employees subject to the availability of 
funds.
    (iv) PSCs shall receive a 3% annual salary increase subject to 
satisfactory performance documented in their annual written evaluation. 
Such increase may not exceed 3% without a deviation. This 3% limitation 
also applies to extensions of the same service or negotiations for a new 
contract for the same or similar services unless a deviation has been 
approved.
    (v) PSCs shall receive the following allowances and differentials 
provided in the State Department's Standardized Regulations (Government 
Civilians Foreign Areas) on the same basis as U.S. Government employees 
(except for U.S. resident hires, see paragraph 4(d) and Section 12, 
General Provisions, Clause 22, ``U.S. Resident Hire Personal Services 
Contractors''):
    (A) Temporary lodging allowance (Section 120),\3\
---------------------------------------------------------------------------

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

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

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

    (F) Education allowance (Section 270),\4\
    (G) Educational travel (Section 280),\4\
    (H) Post differential (Section 500),
    (I) Payments during evacuation/authorized departure (Section 600), 
and
    (J) Danger pay (Section 650).
    (vi) Any allowance or differential that is not expressly stated in 
paragraph 4(c)(2)(v) is not authorized for any PSC unless a deviation is 
approved. The only exception is a consumables allowance if authorized 
for the post under Handbook 22 or superseding ADS Chapter.
    (vii) Health room services may be provided in accordance with the 
clause of this contract entitled ``Physical Fitness and Health Room 
Privileges.''
    (viii) PSCs are eligible to receive benefits for injury, disability, 
or death under the Federal Employees' Compensation Act since the law is 
administered by the Department of Labor not the Office of Personnel 
Management.
    (ix) PSCs are eligible to earn four hours of annual leave and four 
hours of sick leave for each two week period. However, PSCs with 
previous PSC service (not previous U.S. Government civilian or military 
service) earn either six hours of annual leave for each two week period 
if their previous PSC service exceeds 3 years (including 10 hours annual 
leave for the final pay period of a calendar year), or eight hours of 
annual leave for each two week period if their previous PSC service 
exceeds 15 years.
    (3) A PSC who is a spouse of a current or retired Civil Service, 
Foreign Service, or Military Service member and who is covered by their 
spouse's Government health or life insurance policy is ineligible for 
the contribution under paragraph 4(c)(2)(ii) of this appendix.
    (4) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contract (since 
the Government will normally have already paid its contribution for the 
retiree) unless the employee can prove to the satisfaction of the 
Contracting Officer that his/her health and life insurance does not 
provide or specifically excludes coverage overseas. If coverage overseas 
is excluded, then eligibility as cited in paragraph 4(c)(3) applies.
    (5) Retired U.S. Government employees may be awarded Personal 
Services Contracts without any reduction in or offset against their 
Government annuity.
    (d) U.S. Resident Hire Personal Services Contractors. U.S. resident-
hire PSCs are not eligible for any fringe benefits (except contributions 
for FICA, health insurance, and life insurance), including differentials 
and allowances unless such individuals can demonstrate to the 
satisfaction of the Contracting Officer that they have received similar 
benefits and allowances from their immediately previous employer in the 
cooperating country, or the Mission Director may determine that payment 
of such benefits would be consistent with the Mission's policy and 
practice and would be in the best interests of the U.S. Government.
    (e) Determining Salary for Personal Services Contractors. (1) There 
are two separate and

[[Page 88]]

distinct methods of establishing a salary for personal services 
contractors. Use of method number 1 is required unless justified and 
approved as provided for in paragraph (e)(1)(ii).
    (i) Method 1: Salaries for Personal Services Contractors shall be 
established based on the market value in the United States of the 
position being recruited for. This requires the Contracting Officer in 
coordination with the Technical Officer to determine the correct market 
value (a salary range) of the position to be filled. This method is 
required in establishing salary for all PSCs unless method 2 is 
authorized as provided for in paragraph (e)(1)(ii). Contract Information 
Bulletin (CIB) 96-8 dated February 23, 1996 provides a guide which 
contains information concerning Preparation of Scopes of Work, 
Determination of Salary Class Grade, Salary Class Bench Marks and Salary 
Class Review. The market value of the position then becomes the basis 
along with the applicants' certified salary history on the SF 171, 
``Personal Qualifications Statement'' for salary negotiations by the 
Contracting Officer. The SF 171 must be retained in the permanent 
contract file. Any position which is determined to be above the GS-13 
equivalent and exceeds six months in duration must be classified by M/
HR/POD. The crucial point is the establishment of a realistic and 
reasonable market value for a job. The final determination regarding the 
reasonableness of a salary level rests with the Contracting Officer. 
Paying salaries using this method avoids ``rank in person'' salaries 
which are in excess of the value of the job being contracted for.
    (ii) Method 2: If approved in writing by the Mission Director or the 
cognizant Assistant Administrator, based on written justification, 
salary may be negotiated based on the applicant's current earnings 
adjusted in accordance with the factors set out in paragraphs (e)(1)(ii) 
(A) through (C). This approval requirement cannot be redelegated. 
Current earnings must be certified by the contractor on the SF 171, (see 
paragraph 6(b)(3) of this appendix). This is guidance for establishing 
initial salaries, not subsequent increases, for the same contractor 
performing the same function.
    (A) As a rule, up to a 3 percent increase above current earnings may 
be given. However, a 3 percent increase is awarded only to a PSC whose 
earnings are based on a period of twelve months or more; 2 percent for 
established earnings of less than twelve months but not less than four 
months; or 1 percent for established earnings during the past four 
months.
    (B) Additional percentages may be given for the following factors. 
If a PSC has worked in a developing country for more than two years, an 
additional 1 percent may be awarded. Education related to the area of 
specialization and above the minimum qualification required may warrant 
an additional 1 percent, and those specialties for which there is keen 
competition in the employment market or a serious shortage category 
nationwide may be awarded an additional 2 percent. In addition, related 
technical experience over 5 years may increase the percentage by 1 and 
over ten years by 3.
    (C) All requests for an initial rate of pay above 10 percent over 
current earnings must be approved in writing by the appropriate 
Assistant Administrator or Mission Director. Current earnings are actual 
earnings for work reasonably related to the position for which the 
applicant is being considered. Paragraphs 4(e)(1)(ii) (A) through (C) 
apply only to salary setting method number 2 in paragraph 4 (e)(1)(ii).
    (2) When an applicant has no current earnings history (e.g., a 
person returning to the workforce after an absence of a number of years) 
or when an applicant's current earnings history doesn't accurately 
reflect the applicant's job market worth (e.g., a Peace Corps 
volunteer), every effort should be made to establish a market value for 
the position as a basis for negotiation, notwithstanding the lack of a 
current earnings history, provided that the applicant has the full 
qualifications for the job and could command a similar salary in the 
open job market.
    (3) Salaries in excess of the ES-6 level must also be approved by 
the M/OP Director based upon a memorandum through the appropriate 
Assistant Administrator or Mission Director and Contracting Officer, as 
provided for in internal guidelines on ``Approval Procedures for 
Contractor Salaries''. This approval level cannot be redelegated.
    (f) Incentive Awards. U.S. PSCs are not eligible to receive monetary 
awards. They are eligible for non-monetary awards such as certificates.
    (g) Annual Salary Increase. PSC contracts written for more than one 
year should provide for a 3% annual increase based on satisfactory 
performance documented in their annual written evaluations.
    (h) Pay Comparability Adjustment. PSCs shall receive the same 
percentage pay comparability adjustment as that received by U.S. 
Government employees subject to the availability of funds.
    (i) Subcontracting. PSCs are U.S. Government employees and may not 
be called upon (or permitted) to subcontract out any part of their work. 
Funds for subcontracting have no place in the budget of a personal 
services contract. Support services, equipment, and supplies (e.g., 
typing and report preparation, paper, pens, computers, and furniture) 
should be furnished to PSCs just as they would be to direct-hire 
employees. To the extent that direct-hire personnel may be authorized to 
purchase supporting services or supplies under a travel authorization, 
so may PSCs; otherwise, contracts for personal

[[Page 89]]

services should not contain any funds for procurement.

    5. Soliciting for Personal Services Contracts. (a) Technical 
Officer's Responsibilities. The Technical Officer will prepare a written 
detailed statement of duties and a statement of minimum qualifications 
to cover the position being recruited for. The statement shall be 
included in the procurement request (the Acquisition & Assistance 
Request Document) e.g., the request shall also include the following 
additional information as a minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) An estimate of what a comparable GS/FS equivalent position 
should cost, including basic salary, allowances, and differentials, if 
appropriate; and
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of SF 171s and SF 171As. (Upon receipt, one copy of 
each SF 171 and SF 171A shall be forwarded to the Project Officer.)
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for.
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, General Provisions as appropriate, as well as the FAR Clauses 
to be incorporated in full text and by reference.
    (iv) A copy of the USAID General Notice entitled ``Employee Review 
of the New Standards of Conduct''.
    (2) The Contracting Officer shall comply with the requirements of 
(48 CFR) AIDAR 706.302-70(c) as detailed in paragraph 5(c) except those 
recruited from the U.S.
    (c) Competition. (1) Under (48 CFR) AIDAR 706.302-70(b)(1), Personal 
Services Contracts (except those recruited from the U.S.) are exempt 
from the requirements for full and open competition with two limitations 
that must be observed by Contracting Officers:
    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) A justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) PSCs With Untied States Citizens or Resident Aliens Recruited 
from Outside the Cooperating Country. Solicitations for PSCs recruited 
outside the cooperating country must be publicized via the Agency's 
External Home Page on the Internet under the caption ``Business & 
Procurement, USAID Procurements.'' Instructions regarding how to access 
the External Internet and the information to be provided have been 
approved and included in a CIB. A justification under FAR 6.303 is not 
required when this procedure is followed.
    (3) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of (48 CFR) AIDAR 706.302-70(c)(2) 
for a justification in accordance with FAR 6.303. This class 
justification for Personal Services Contracts with U.S. Citizens may 
only be used for those who are recruited locally subject to the 
following conditions:
    (i) The position was publicized locally in accordance with 
established Mission policy or procedure, or the procedures in paragraph 
5(c)(ii) was followed;
    (ii) As an alternative to the procedures in paragraphs 5(c) (i) and 
(ii), at least 3 individuals were considered by consulting source lists 
(e.g., applications or resumes on hand) or conducting other informal 
solicitation.
    (iii) Extensions or renewals with the same individual for continuing 
services do not need to be publicized.
    (iv) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to (48 CFR) AIDAR 706.302-70(b)(1); that the conditions for use of this 
class justification have been met; and that the cost of the contract is 
fair and reasonable.
    (4) If the appropriate competitive procedure in paragraph 5(3) is 
not followed, the Contracting Officer must prepare a separate 
justification as required under (48 CFR) AIDAR 706.302-70(c)(2).
    (5) Since the award of a Personal Services Contract is based on 
technical qualifications, not price, and since the SF 171, ``Personal 
Qualifications Statement'', and SF 171A, ``Continuation Sheet for 
Standard Form 171'', are used to solicit for such contracts, FAR 
subparts 15.4 and 15.5 and FAR parts 52 and 53 are inappropriate and 
shall not be used. Instead, the solicitation and selection procedures 
outlined in this Appendix shall govern.

    6. Negotiating a Personal Services Contract. Negotiating a Personal 
Services Contract is significantly different from negotiating a 
nonpersonal services contract because it establishes an employer-
employee relationship; therefore, the selection procedures are more akin 
to the personnel selection procedures.
    (a) Technical Officer's Responsibilities. The Technical Officer 
shall be responsible for reviewing and evaluating the applications 
(i.e.,

[[Page 90]]

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

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

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

These modifications are not considered deviations subject to (48 CFR) 
AIDAR 701.470. (Justification and explanation of these modifications is 
to be included in the contract file);
    (g) Orientation is arranged in accordance with General Provision 23 
in section 12 of this Appendix;
    (h) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (i) The contract is complete and correct and all information 
required on the contract Cover Page (USAID Form 1420-36A) has been 
entered;
    (j) The contract has been signed by the Contracting Office and the 
contractor, and fully executed copies are properly distributed;
    (k) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties;

[[Page 91]]

    (1) Evidence of job classification in the file by the Mission except 
for grade equivalents above GS-13. For those positions with grade 
equivalent above GS-13, evidence of job classification done by M/HR/POD;
    (2) Security clearance, including the completed SF 86, to the extent 
required by USAID Handbook 6, Security or superseding ADS Chapter, (see 
General Provisions 14 and 24 in section 12 of this Appendix);
    (3) Mission, host country, Human Resources Office, and technical 
office clearance, as appropriate;
    (4) Medical examinations and certifications as required by the 
contract general provision entitled ``Physical Fitness and Health Room 
Privileges'';
    (5) One original executed IRS Form W-4 entitled ``Employee's 
Withholding Allowance Certificate'', and one copy, shall be obtained. 
The original shall be sent to the Controller of the paying office and 
one shall be placed in the contract file;
    (6) Evidence of DAA/HR clearance that the position may be filled by 
PSC.
    (7) The approval for any salary in excess of ES-6, in accordance 
with Appendix G of this chapter;
    (8) A copy of the class justification or other appropriate 
explanation and support required by (48 CFR) AIDAR 706.302-70, if 
applicable;
    (9) Any deviation to the policy or procedures of this appendix, 
processed and approved under (48 CFR) AIDAR 701.470;
    (10) A fully executed SF 171, and a copy of the position 
classification, and approved deviation, if appropriate;
    (11) The Memorandum of Negotiation; and
    (12) The Contracting Officer's signed certification that competition 
requirements have been satisfied as described in paragraph 5(c) of the 
policy text of this Appendix. The certification shall be a part of the 
Memorandum of Negotiations.
    (l) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 1341 (the Contracting 
Officer ensures that the contract has been properly recorded by the 
appropriate accounting office prior to its release for the signature of 
the selected contractor);
    (m) The contractor receives and understands the USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' and a copy 
is attached to each contract as provided for in paragraph (c) of General 
Provision 1, section 12;
    (n) Agency conflict of interest requirements as set out in the 
General Notice ``Employee Review of the New Standards of Conduct'' are 
met by the contractor prior to his/her reporting for duty;
    (o) A copy of a Checklist for Personal Services contractors which 
may be in the format set out in this section or another format 
convenient for the Contracting Officer, provided that a memorandum 
containing all of the information described in this section 7 shall be 
prepared for each PSC and placed in the contract file;
    (p) The contractor understands that he/she is an employee of the 
United States for purposes of the Foreign Assistance Act of 1961, as 
amended, and the Internal Revenue Code (Title 26 of the United States 
Code). This subjects the employee to withholding for both FICA and 
Federal Income Tax and precludes the employee from receiving the Federal 
Earned Income Tax exclusion of 26 U.S.C. Section 911. See Special Note 
on the Cover Page of USAID Form 1420-36.
    (q) The contractor also understands that he/she may commence work 
prior to the completion of the security clearance. However, until such 
time as clearance is received, the contractor may not have access to 
classified or administratively controlled materials. Failure to obtain 
clearances will constitute cause for termination.

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

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

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

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

[[Page 92]]

[GRAPHIC] [TIFF OMITTED] TR23JY97.000

                          Privacy Act Statement

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

[[Page 93]]

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

                                Schedule

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

                            Table of Contents

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

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

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

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

                     Article I--Statement of Duties

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

                 Article II--Period of Service Overseas

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

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

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

[[Page 94]]

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

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

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

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

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

           Article IV--Costs Reimbursable and Logistic Support

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

                               [Complete]

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

                               [Complete]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

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

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

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

                            Table of Contents

                           (Optional Schedule)

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

Article I--Statement of Duties

[[Page 95]]

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

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

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

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

                     Article I--Statement of Duties.

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

                 Article II--Period of Service Overseas.

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

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

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

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

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

[[Page 96]]

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

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

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

           Article IV--Costs Reimbursable and Logistic Support

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

                               [Complete]

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

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

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

    12. General Provisions

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

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

                            Index of Clauses

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

[[Page 97]]

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

                       1. Definitions (June 1990)

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

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

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

[[Page 98]]

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

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

 4. Workweek and Compensation (Pay Comparability Adjustments) (Dec 1985)

    (a) Workweek. The contractor's workweek shall not be less than 40 
hours, unless otherwise provided in the Contract Schedule, and shall 
coincide with the workweek for those employee of the Mission or the 
Cooperating Country agency most closely associated with the work of this 
contract. If the contract is for less than full time (40 hours weekly), 
the annual and sick leave earned shall be prorated (see the General 
Provision of this contract entitled Leave and Holidays).
    (b) Compensation (Pay Comparability) Adjustments. The contractor's 
compensation shall be adjusted to reflect the pay comparability 
adjustments which are granted from time to time to U.S. direct-hire 
employees by Executive Order for the statutory pay systems. Any 
adjustments authorized are subject to the availability of funds and 
shall not exceed that percentage stated in the Executive Order granting 
the adjustment. Further, the adjusted compensation may not exceed the 
maximum ES-6 annual compensation (or the equivalent daily rate).

                    5. Leave and Holidays (APR 1997)

    (a) Vacation Leave. (1) The contractor shall earn vacation leave at 
the rate of 13 workdays per annum or 4 hours every 2 weeks. However, no 
vacation shall be earned if the tour of duty is less than 90 days.
    (2) Notwithstanding paragraph (a)(1) above, if the contractor has 
had previous PSC service (i.e., has served under other personal services 
contracts (PSCs) covered by Sec. 636(a)(3) of the FAA), he/she shall 
earn vacation leave at the rate of either 6 hours every two weeks (10 
hours for the final pay period of a calendar year) cumulative PSC 
service

[[Page 99]]

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

[[Page 100]]

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

               6. Differential and Allowances (June 1990)

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

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

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

[[Page 101]]

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

[[Page 102]]

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

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

    (a) Since the contractor is an employee, F.I.C.A. contributions and 
U.S. Federal Income Tax withholding shall be deducted in accordance with 
regulations and rulings of the Social Security Administration and the 
U.S. Internal Revenue Service, respectively.
    (b) As an employee, the contractor is not eligible for the ``foreign 
earned income'' exclusion under the IRS Regulations (see 26 CFR 1.911-
3(c)(3)).

                  8. Advance of Dollar Funds (APR 1997)

    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to a USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapter.

                         9. Insurance (APR 1997)

    (a) Worker's Compensation Benefits. The contractor shall be provided 
worker's compensation benefits in accordance with the Federal Employees' 
Compensation Act.
    (b) Health and Life Insurance. (1) The contractor shall be provided 
a maximum contribution of up to 50% against the actual costs of the 
contractor's annual health insurance costs, provided that such costs may 
not exceed the maximum U.S. Government contribution for direct-hire 
personnel as announced annually by the Office of Personnel Management.
    (2) The contractor shall be provided a contribution of up to 50% 
against the actual costs of annual life insurance not to exceed $500.00 
per year.
    (3) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contracts. The 
Government will normally have already paid its contribution for the 
retiree unless the employee can prove to the satisfaction of the 
Contracting Officer that his/her health and life insurance does not 
provide or specifically excludes coverage overseas. In such case, the 
contractor would be eligible for contributions under paragraphs (b) (1) 
or (2) as appropriate.
    (4) Proof of health and life insurance coverage shall be submitted 
to the Contracting Officer before any contribution is paid. On 
assignments of less than one year, costs for health and life insurance 
shall be prorated and paid accordingly.
    (5) A contractor who is a spouse of a current or retired Civil 
Service, Foreign Service, or Military Service member and who is covered 
by their spouse's Government health or life insurance policy is 
ineligible for the contribution under paragraphs (b)(1) or (b)(2) of 
this provision.
    (c) Insurance on Private Automobiles. If the contractor or his/her 
dependents transport, or cause to be transported, privately owned 
automobile(s) to the Cooperating Country, or any of them purchase an 
automobile within the Cooperating Country, the contractor agrees to 
ensure that all such automobile(s) during such ownership within the 
Cooperating Country will be covered by a current, i.e., not in arrears, 
insurance policy issued by a reliable company providing the following 
minimum coverage, or such other minimum coverage as may be set by the 
Mission Director, payable in U.S. dollars or its equivalent in the 
currency of the Cooperating Country: injury to persons, $10,000/$20,000; 
property damage, $5,000. The contractor further agrees to deliver, or 
cause to be delivered to the Mission Director, the insurance policies 
required by this clause or satisfactory proof of the existence thereof, 
before such automobile(s) operated within the Cooperating Country. The 
premium costs for such insurance shall not be a reimbursable cost under 
this contract.

           10. Travel and Transportation Expenses (July 1993)

    (a) General. (1) USAID/Washington Office of Administrative Services, 
or such other office as may be designated by that office, may furnish 
Transportation Requests (TR's) to the contractor for transportation 
authorized by this contract originating in the United

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States, and the executive or administrative officer at the Mission may 
furnish TR's for such authorized transportation which is payable in 
local currency or is to originate overseas. When transportation is not 
provided by the Government-issued TR, the contractor shall procure his/
her own transportation, the costs of which will be reimbursed in 
accordance with the terms of this contract.
    (2) The contractor will be reimbursed for reasonable, allocable and 
allowable travel and transportation expenses incurred under and for the 
performance of this contract. Determination of reasonableness, 
allocability and allowability will be made by the Contracting Officer in 
accordance with USAID's established policies and procedures for USAID 
direct-hire employees, and the particular needs of the activity being 
implemented by this contract. The following paragraphs provide specific 
guidance and limitations on particular items of cost.
    (b) U.S. Travel and Transportation. The contractor shall be 
reimbursed for actual transportation costs and travel allowances in the 
United States as authorized in the Contract Schedule or approved in 
advance by the Contracting Officer or the Mission Director. 
Transportation costs and travel allowances shall not be reimbursed in 
any amount greater than the cost of, and time required for, economy-
class commercially scheduled air travel by the most expeditious route 
except as otherwise provided in paragraph (g) of this provision unless 
economy air travel is not available and the contractor certifies to this 
in his/her voucher or other documents submitted for reimbursement.
    (c) International Travel. For travel to and from post of assignment, 
the contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of the travel from the contractor's residence in the United States) to 
the post of duty in the Cooperating Country and return to place of 
residence in the United States (or other location provided that the cost 
of such travel does not exceed the cost of travel from the post of duty 
in the Cooperating Country to the contractor's residence) upon 
completion of services by the individual. Reimbursement for travel will 
be in accordance with USAID's established policies and procedures for 
its direct-hire employees and the provisions of this contract, and will 
be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the costs of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the Cooperating Country (except for reasons beyond 
his/her control) the costs of going to the post of duty are reimbursable 
hereunder but the costs of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract, or other location as approved by the 
Contracting Officer, are not reimbursable under this contract for the 
contractor and his/her dependents. When travel is by economy class 
accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas)-
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (d) Local Travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country or the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (e) Indirect Travel for Personal Convenience. When travel is 
performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (f) Limitation on Travel by Dependents. Travel costs and allowances 
will be allowed for authorized dependents of the contractor and

[[Page 104]]

such costs shall be reimbursed for travel from place of abode to 
assigned station in the Cooperating Country and returned, only if the 
dependent remains in the Cooperating Country for at least 9 months or 
one-half of the required tour of duty of the contractor, whichever is 
greater, except as otherwise authorized hereunder for education, medical 
or emergency visitation travel. If the dependent is eligible for 
educational travel pursuant to the ``Differential and Allowances'' 
clause of this contract, time spent away from post resulting from 
educational travel will be counted as time at post.
    (g) Delays Enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routine. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (h) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee and 
for each of the authorized dependents traveling in the POV, if the POV 
is being driven to or from the Cooperating Country as authorized under 
the contract, provided that the total cost of the mileage and the per 
diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (i) Emergency and Irregular Travel and Transportation. Emergency 
transportation costs and travel allowances while enroute, as provided in 
this section, will be reimbursed not to exceed amounts authorized by the 
Foreign Service Travel Regulations for USAID-direct hire employees in 
like circumstances under the following conditions:
    (1) The costs of going from post of duty in the Cooperating Country 
to the employee's permanent, legal place of residence at the time he or 
she was employed for work under this contract or other location for 
contractor employees and dependents and returning to the post of duty, 
subject to the prior written approval of the Mission Director that such 
travel is necessary for one of the following reasons.
    (i) Need for medical care beyond that available within the area to 
which the employee is assigned, or serious effect on physical or mental 
health if residence is continued at assigned post of duty. The Mission 
Director may authorize a medical attendant to accompany the employee at 
contract expense if, based on medical opinion, such an attendant is 
necessary.
    (ii) Death, or serious illness or injury of a member of the 
immediate family of the employee or the immediate family of the 
employee's spouse.
    (2) When, for any reason, the Mission Director determines it is 
necessary to evacuate the contractor or contractor's dependents, the 
contractor will be reimbursed for travel and transportation expenses and 
travel allowance while enroute, for the cost of the individuals going 
from post of duty in the Cooperating Country to the employee's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract or other approved location. The return of 
such employees and dependents may also be authorized by the Mission 
Director when, in his/her discretion, he/she determines it is prudent to 
do so.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations, when in his/her opinion, 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (j) Home Leave Travel. To the extend that home leave has been 
authorized as provided in the ``Leave and Holidays'' clause of this 
contract, the cost of travel for home leave is reimbursable for travel 
costs and travel allowances of travelers from the post of duty in the 
Cooperating Country to place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of travel to the contractor's residence in the United States) and return 
to the post of duty in the Cooperating Country. Reimbursement for travel 
will be in accordance with the Uniform State/USAID/USIA Foreign Service 
Travel Regulations, as from time to time amended, and will be limited to 
the cost of travel by the most direct and expeditious route. Travel 
allowances for travelers shall be in accordance with the rates 
authorized in the Standardized Regulations as from time to time amended, 
for not more than the travel time required by scheduled commercial air 
carrier using the most expeditious route using economy class. One 
stopover enroute for a period of not to exceed 24 hours is allowable 
when the traveler uses economy class accommodations for a trip of 14 
hours or more of scheduled duration. Such stopover shall not be 
authorized when travel is by indirect route or is delayed for the 
convenience of the traveler or the traveler uses other than economy 
class. Per diem during such stopover shall be paid in accordance with 
the Standardized Regulations.
    (k) Rest and Recuperations Travel. If approved in writing by the 
Mission Director,

[[Page 105]]

the contractor and his/her dependents shall be allowed rest and 
recuperation travel on the same basis as authorized USAID direct-hire 
Mission employees and their dependents.
    (l) Transportation of Motor Vehicles, Personal Effects and Household 
Goods.
    (1) Transportation costs will be paid on the same basis as for USAID 
direct-hire employees serving the same length tour of duty, as 
authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from the point of origin in the 
United States (or other location as approved by the Contracting Officer) 
to post of duty in the Cooperating Country and return to point of origin 
in the United States (or other location as approved by the Contracting 
Officer) of one privately-owned vehicle for the contractor, personal 
effects of the contractor and authorized dependents, and household goods 
of the contractor not to exceed the limitations in effect for such 
shipments for USAID direct-hire employees in accordance with the Foreign 
Service Travel Regulations in effect at the time shipment is made. These 
limitations may be obtained from the Contracting Officer.
    (2) The cost of transporting motor vehicles and household goods 
shall not exceed the cost of packing, crating, and transportation by 
surface common carrier. In the event that the carrier does not require 
boxing or crating of motor vehicles for shipment to the Cooperating 
Country, the cost of boxing or crating is not reimbursable. The 
transportation of a privately owned motor vehicle for a contractor may 
be authorized as a replacement of the last such motor vehicle shipped 
under this contract for such contractor when the Mission Director 
determines, in advance, and so notifies the contractor in writing, that 
the replacement is necessary for reasons not due to the negligence or 
malfeasance of the contractor. The determination shall be made under the 
same rules and regulations that apply to authorized Mission U.S. citizen 
direct-hire employees.
    (m) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents, and consideration should be 
given to advance shipments of unaccompanied baggage. The contractor will 
be reimbursed for costs of shipment of unaccompanied baggage (in 
addition to the weight allowance for household effects) not to exceed 
the limitations in effect for USAID direct-hire employees in accordance 
with the Foreign Service Travel Regulations as in effect when shipment 
is made. These limitations are available from the Contracting Officer. 
This unaccompanied baggage may be shipped as air freight by the most 
direct route between authorized points of origin and destination 
regardless of the modes of travel used. This provision is applicable to 
home leave travel when authorized by the terms of this contract.
    (n) International Ocean Transportation. (1)(i) Transportaiton of 
things. Where U.S. flag vessels are not available, or their use would 
result in a significant delay, the contractor may obtain a release from 
the requirement to use U.S. flag vessels from the Transportation 
Division, Office of Procurement, U.S. Agency for International 
Development, Washington, D.C. 20523-1419, or the Mission Director, as 
appropriate, giving the basis for the request.
    (ii) Transportation of persons. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
contractor may obtain a release from the requirement to use U.S. flag 
vessels from the Contracting Officer or the Mission Director, as 
appropriate.
    (2) Transportation of foreign-made vehicles. Reimbursement of the 
costs of transporting a foreign-made motor vehicle will be made in 
accordance with the provisions of the Foreign Service Travel 
Regulations.
    (3) Reduced rates on U.S.-flag carriers are in effect for shipments 
of household goods and personal effects of USAID contractors between 
certain locations. These reduced rates are available provided the 
shipper furnishes to the carrier at the time of the issuance of the Bill 
of Lading documentary evidence that the shipment is for the account of 
USAID. The Contracting Officer will, on request, furnish to the 
contractor current information concerning the availability of a reduced 
rate with respect to any proposed shipment. The contractor will not be 
reimbursed for shipments of household goods or personal effects in 
amounts in excess of the reduced rates which are available in accordance 
with the foregoing.
    (o) Storage of household effects. The cost of storage charges 
(including packing, crating, and drayage costs) in the U.S. of household 
goods of the contractor will be permitted in lieu of transportation of 
all or any part of such goods to the Cooperating Country under paragraph 
(l) above provided that the total amount of effects shipped to the 
Cooperating Country or stored in the U.S. shall not exceed the amount 
authorized for USAID direct-hire employees under the Uniform Foreign 
Service Travel Regulations. These amounts are available from the 
Contracting Officer.

                         11. Payment (Aug 1996)

    (a) Once each month, or at more frequent intervals, if approved by 
the paying office indicated on the Cover Page, the contractor may submit 
to such office form SF 1034 ``Public Voucher for Purchases and Services 
Other Than Personal'' (original) and SF 1034-A (three copies), or 
whatever other form is locally required or accepted. Each voucher

[[Page 106]]

shall be identified by the USAID contract number and properly executed 
in the amount of dollars claimed during the period covered. The voucher 
forms shall be supported by:
    (1) The contractor's detailed invoice, in original and two copies, 
indicating for each amount claimed the paragraph of the contract under 
which payment is to be made, supported when applicable as follows:
    (i) For compensation--a statement showing period covered, days 
worked, and days when contractor was in authorized travel, leave, or 
stopover status for which compensation is claimed. All claims for 
compensation will be accompanied by, or will incorporate, a 
certification signed by the Project Officer covering days or hours 
worked, or authorized travel or leave time for which compensation is 
claimed.
    (ii) For travel and transportation--a statement of itinerary with 
attached carrier's receipt and/or passenger's coupons, as appropriate.
    (iii) For reimbursable expenses--an itemized statement supported by 
original receipts.
    (2) The first voucher submitted shall account for, and liquidate the 
unexpended balance of any funds advanced to the contractor.
    (b) A final voucher shall be submitted by the contractor promptly 
following completion of the duties under this contract but in no event 
later than 120 days (or such longer period as the Contracting Officer 
may in his/her discretion approve in writing) from the date of such 
completion. The contractor's claim, which includes his/her final 
settlement of compensation, shall not be paid until after the 
performance of the duties required under the terms of this contract has 
been approved by USAID. On receipt and approval of the voucher 
designated by the contractor as the ``final voucher'' submitted on Form 
SF 1034 (original) and SF 1034-A (three copies), together with a refund 
check for the balance remaining on hand of any funds which may have been 
advanced to the contractor, the Government shall pay any amounts due and 
owing the contractor.
    (c) If approved by the paying office time and attendance may be 
submitted for PSCs in the same manner as is approved for direct-hire 
personnel.

       12. Conversion of U.S. Dollars to Local Currency (Dec 1985)

    Upon arrival in the Cooperating Country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of U.S. dollars to 
local currency. This may include, but not be limited to the conversion 
of said currency through the cognizant U.S. Disbursing Officer, or 
Mission Controller, as appropriate.

              13. Post of Assignment Privileges (July 1993)

    Privileges such as the use of APO, PX's, commissaries and officers 
clubs are established at posts abroad under agreements between the U.S. 
and host governments. These facilities are intended for and usually 
limited to members of the official U.S. establishment including the 
Embassy, USAID Mission, U.S. Information Service and the Military. 
Normally, the agreements do not permit these facilities to be made 
available to non-official Americans. However, in those cases where 
facilities are open to non-official Americans, they may be used.

                  14. Security Requirements (June 1990)

    (a) This entire provision shall apply to the extent that this 
contract involves access to classified information (``Confidential'', 
``Secret'', or ``Top Secret'') or access to administratively controlled 
information (``Limited Official Use''). Contractors that are not U.S. 
citizens shall not have access to classified or administratively 
controlled information.
    (b) The contractor (1) shall be responsible for safeguarding all 
classified or administratively controlled information in accordance with 
appropriate instructions furnished by the USAID Office of Security (IG/
SEC), as referenced in paragraph (d) of this provision and shall not 
supply, disclose, or otherwise permit access to classified information 
or administratively controlled information to any unauthorized person; 
(2) shall not make or permit to be made any reproductions of classified 
information or administratively controlled information except with the 
prior written authorization of the Contracting Officer or Mission 
Director; (3) shall submit to the Contracting Officer, at such times as 
the Contracting Officer may direct, an accounting of all reproductions 
of classified or administratively controlled information; and (4) shall 
not incorporate in any other project any matter which will disclose 
classified and/or administratively controlled information except with 
the prior written authorization of the Contracting Officer.
    (c) The contractor shall follow the procedures for classifying, 
marking, handling, transmitting, disseminating, storing, and destroying 
official material in accordance with the regulations in the Foreign 
Affairs Manual, Chapter 5 (5 FAM 900), a copy of which will be furnished 
by the Contracting Officer or Mission Director.
    (d) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, 
appropriately classified, of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity.

[[Page 107]]

    (e) The Government agrees that, when necessary, it shall indicate by 
security classification or administratively controlled designation, the 
degree of importance to the national defense of information to be 
furnished by the contractor to the Government or by the Government to 
the contractor, and the Government shall give written notice of such 
security classification or administratively controlled designation to 
the contractor and of any subsequent changes thereof. The contractor is 
authorized to rely on any letter or other written instrument signed by 
the Contracting Officer changing a security classification or 
administratively controlled designation of information.
    (f) The contractor agrees to certify after completion of his/her 
assignment under this contract that he/she has surrendered or disposed 
of all classified and/or administratively controlled information in his/
her custody in accordance with applicable security instructions.

             15. Contractor-Mission Relationships (Dec 1985)

    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails.
    (b) While in the Cooperating Country, the contractor is expected to 
show respect for the conventions, customs, and institutions of the 
Cooperating Country and not interfere in its political affairs.
    (c) If the contractor's conduct is not in accordance with paragraph 
(b) of this provision, the contract may be terminated under General 
Provision 16 of this contract. The Contractor recognizes the right of 
the U.S. Ambassador to direct his/her immediate removal from any country 
when, in the discretion of the Ambassador, the interests of the United 
States so require.
    (d) The Mission Director is the chief representative of USAID in the 
Cooperating Country. In this capacity, he/she is responsible for the 
total USAID Program in the Cooperating Country including certain 
administrative responsibilities set forth in this contract and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the U.S. Foreign Assistance Program. The contractor 
will be responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director, and shall 
keep the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

                       16. Termination (Nov 1989)

    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the Contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
Cooperating Country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calendar days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any unused vacation leave, return transportation costs 
and travel allowances and transportation of unaccompanied baggage costs 
at the rate specified in the contract and subject to the limitations 
which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the Contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any unused vacation or sick leave but shall be entitled to return 
transportation, travel allowances, and unaccompanied baggage costs at 
rates specified in the contract and subject to the limitations which 
apply to authorized travel status.

[[Page 108]]

    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

                  17. Release of Information (Dec 1985)

    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
Contractor and all reports and recommendations hereunder shall be 
treated as confidential by the Contractor and shall not, without the 
prior written approval of the Contracting Officer, be made available to 
any person, party, or government, other than USAID, except as otherwise 
expressly provided in this contract.

                         18. Notices (Dec 1985)

    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    To USAID: Administrator, U.S. Agency for International Development, 
Washington, D.C. 20523-0001, Attention: Contracting Officer.
    (name of the cognizant Contracting Officer with a copy to the 
appropriate Mission Director).
    To Contractor:
    At his/her post of duty while in the Cooperating Country and at the 
Contractor's address shown on the Cover Page of this contract or to such 
other address as either of such parties shall designate by notice given 
as herein required. Notices hereunder shall be effective in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

                         19. Reports (June 1987)

    (a) The Contractor shall prepare and submit 2 copies of each 
technical report required by the schedule of this contract to the Bureau 
for Program and Policy Coordination, Center for Development Information 
and Evaluation, Development Information Division (PPC/CDIE/DI). All 
documents should be mailed to:
    PPC/CDIE/DI, Acquisitions, Room 209, SA-18, U.S. Agency for 
International Development, Washington, D.C. 20523-1802.
    The title page of all reports forwarded to PPC/CDIE/DI pursuant to 
this paragraph shall include a descriptive title, the author's name(s), 
contract number, project number and title, contractor's name, name of 
the USAID project office, and the publication or insurance date of the 
report.
    (b) When preparing reports, the contractor shall refrain from using 
elaborate art work, multicolor printing and expensive paper/binding, 
unless it is specifically authorized in the Contract Schedule. Wherever 
possible, pages should be printed on both sides using single spaced 
type.

                 20. Use of Pouch Facilities (July 1993)

    (a) Use of diplomatic pouch is controlled by the Department of 
State. The Department of State has authorized the use of pouch 
facilities for USAID contractors and their employees as a general 
policy, as detailed in paragraphs (a)(1) through (a)(6) of this 
provision. However, the final decision regarding use of pouch facilities 
rests with the Embassy or USAID Mission. In consideration of the use of 
pouch facilities as hereinafter stated, the Contractor agrees to 
indemnify and hold harmless the Department of State and USAID for loss 
or damage occurring in pouch transmission.
    (1) Contractors are authorized use of the pouch for transmission and 
receipt of up to a maximum of 0.90 kilogram/2 pounds per shipment of 
correspondence and documents needed in the administration of foreign 
assistance programs.
    (2) U.S. citizen contractors are authorized use of the pouch for 
personal mail up to a maximum of 0.45 kilogram/one pound per shipment 
(but see (a)(3) below). Non-U.S. citizen Contractors are not permitted 
use of the pouch for personal mail except to the extent that such use 
may be authorized by the Chief of Mission.
    (3) Merchandise, parcels, magazines, or newspapers are not 
considered to be personal mail for purpose of this clause, and are not 
authorized to be sent or received by pouch.
    (4) Official and personal mail under paragraphs (a) (1) and (2) of 
this provision, sent by pouch, should be addressed as follows:
    Individual's Name (C), U.S. Agency for International Development, 
Washington, D.C. 20523-0001.
    (5) Mail sent via the diplomatic pouch may not be in violation of 
U.S. Postal laws and may not contain material ineligible for pouch 
transmission.
    (6) Use of military postal facilities (APO/FPO) is authorized to 
U.S. contractors on the same basis as approved for direct-hire employees 
at the USAID Mission. Posts having access to APO/FPO facilities and 
using such for diplomatic pouch dispatch, may, however, accept official 
and personal mail for the pouch provided, of course, adequate postage is 
affixed when onward transmission (mail to other than USAID/W) through 
U.S. postal channels is required.
    (b) The contractor shall be responsible for compliance with these 
guidelines and limitations on use of pouch facilities.
    (c) Specific additional guidance on use of pouch facilities in 
accordance with this clause is available from the Post Communication 
Center at the Embassy or USAID Mission.

[[Page 109]]

                    21. Biographical Data (June 1990)

    (a) The contractor agrees to furnish biographical information to the 
Contracting Officer on forms (SF 171 and 171As) provided for that 
purpose.
    (b) Emergency locator information. The contractor agrees to provide 
the following information to the Mission Administrative Officer on 
arrival in the host country regarding himself/herself and dependents:
    (1) Contractor's full name, home address, and telephone number 
including any after-hours emergency number(s).
    (2) The name and number of the contract, and whether the individual 
is the contractor or the contractor's dependent.
    (3) The name, address, and home and office telephone number(s) of 
each individual's next of kin.
    (4) Any special instructions pertaining to emergency situations such 
as power of attorney designees or alternate contact persons.

     22. U.S. Resident Hire Personal Services Contractor (June 1990)

    A contractor meeting the definition of a U.S. Resident Hire PSC 
contained in Section 12, General Provisions, Clause 1, Definitions, 
shall be subject to U.S. Federal Income Tax, but shall not be eligible 
for any fringe benefits (except contributions for FICA, health insurance 
and life insurance), allowances, or differentials, including but not 
limited to travel and transportation, medical, orientation, home leave, 
etc., unless such individual can demonstrate to the satisfaction of the 
Contracting Officer that he/she has received similar benefits/allowances 
from their immediately previous employer in the Cooperating Country, or 
the Mission Director determines that payment of such benefits would be 
consistent with the Mission's policy and practice and would be in the 
best interest of the U.S. Government.

            23. Orientation and Language Training (July 1993)

    (a) Except as set forth in paragraph (b)(4) below, the Contractor 
shall receive a maximum of 2 weeks USAID orientation before travel 
overseas. The dates of orientation shall be selected by the Contractor 
and approved by the Contracting Officer from the orientation schedule 
provided by USAID.
    (b) As either set forth in the Contract Schedule, or provided in 
writing by the Contracting Officer, the following may be authorized 
taking into consideration specific job requirements, contractor's prior 
overseas experience, or unusual circumstances, in connection with 
orientation of individual Contractors:
    (1) Modified orientation,
    (2) Language training,
    (3) Orientation for Contractor's dependents at contract expense.
    (4) Waiver of orientation for individual contractor.
    (c) Transportation costs and travel allowances not to exceed one 
round trip from the Contractor's residence to place of orientation and 
return will be reimbursed, pursuant to Clause 10 of the General 
Provisions, entitled ``Travel and Transportation Expenses,'' if the 
orientation is more than 80 kilometers/50 miles from the contractor's 
residence.
    Allowable salary costs during the period of orientation are also 
reimbursable.

 24. Conditions for Contracting Prior to Receipt of Security Clearance 
                               (July 1993)

    (a) U.S. Resident Hire PSC. The contractor may commence work prior 
to the completion of the security clearance. However, until such time as 
clearance is received, the contractor shall have no access to classified 
or administratively controlled materials. Further, failure to obtain 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.
    (b) U.S. PSC--Non-Resident Hire. The contractor may elect to 
commence travel to post immediately to begin work prior to completion of 
the security clearance. However, until such time as security clearance 
is received, the contractor shall:
    (1) Have no access to classified or administratively controlled 
materials;
    (2) Be authorized to travel to post himself/herself only; and
    (3) Be authorized no entitlements other than those normally 
authorized for short term (less than a year) employees at post. Even if 
the contract is for one year or more, dependents may not accompany 
contractor unless at his/her expense, and transportation/storage of 
household/personal effects and motor vehicle will not be financed by 
USAID prior to the receipt of the security clearance. Upon receipt of 
clearance, the Contracting Officer will authorize reimbursement of any 
such costs borne at contractor's expense prior to clearance provided 
they are reasonable, allocable and allowable. If appropriate given the 
length of time remaining, the Contracting Officer will authorize 
dependent travel and shipment/storage of motor vehicle and effects. 
Allowances which would not be provided to short term employees will be 
authorized after clearance is received provided that the contractor is 
otherwise entitled to such benefits. Failure to obtain the security 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.

          25. Medical Evacuation (MEDEVAC) Services (July 1993)

    (a) The contractor agrees to obtain medevac service coverage for 
himself/herself

[[Page 110]]

and his/her authorized dependents while performing personal services 
abroad. Coverage shall be obtained pursuant to the terms of the contract 
between USAID and USAID's medevac service provider unless exempted in 
accordance with paragraph (b).
    (b) The following are exempted from the requirements in paragraph 
(a):
    (1) Contractors and their dependents with a health insurance program 
that includes sufficient medevac coverage as approved by the Contracting 
Officer.
    (2) Contractors and their dependents located at Missions where the 
Mission Director makes a written determination to waive the requirement 
for such coverage based on findings that the quality of local medical 
services or other circumstances obviate the need for such coverage.
    (c) Information on the current medevac service provider, including 
application procedures, is available from the Contracting Officer.

                      26. Governing Law (Nov 1996)

    This contract is established under the procurement authorities of 
the United States Government and shall be interpreted in accordance with 
the body of Federal Procurement Law in the United States. This contract 
is a complete statement of the duties, compensation, benefits, leave, 
notice, termination, and the like; therefore, the laws of the country of 
performance with respect to labor and contract matters shall not apply 
to either the carrying out of the obligations of the parties or to the 
interpretation of this agreement.

    13. FAR Clauses to be Incorporated in Full Text in Personal Services 
Contracts.
    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.
1. Covenant Against Contingent Fees 52.203-5
2. Electronic Funds Transfer Payment Methods 52.232-28
3. Disputes 52.233-1 (Alternate 1)
4. Preference for U.S. Flag Air Carriers 52.247-63

    14. FAR Clauses to be Incorporated by Reference in Personal Services 
Contracts
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:
1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
          52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 52.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
          52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5
14. Limitation of Liability--Services 52.246-25

[62 FR 39453, July 23, 1997, as amended at 64 FR 42040, Aug. 3, 1999]

                   Appendix E to Chapter 7 [Reserved]

  Appendix F to Chapter 7--Use of Collaborative Assistance Method for 
                          Title XII Activities

                             1. Introduction

    This appendix provides a detailed description of the collaborative 
assistance method of contracting. This is a specialized contracting 
system which may be used for contracting with educational institutions 
eligible under, and for activities authorized under, Title XII of the 
Foreign Assistance Act of 1961, as amended, under the circumstances 
described in AIDAR 715.613-71.

                               2. Purpose

    The collaborative assistance system is designed to:
    (a) Increase the joint implementation authority and responsibility 
of the contractor and the LDC;
    (b) Encourage more effective collaboration between all participating 
parties (USAID, host country, and contractor) at important stages, 
including the design stage of a technical assistance project.

                                3. Policy

    The collaborative assistance approach represents an alternative 
method for long-term technical assistance which involves professional 
collaboration with eligible Title XII institutions and LDC counterparts 
for a problem-solving type activity to develop new institutional forms 
and capabilities, to devise operating systems and policies, and to 
conduct joint research and development--including training. In such an 
activity, the difficulty in defining, in advance, precise and 
objectively verifiable contractor inputs and long-term project content 
as a basis for payment usually requires a flexible approach to project 
design, contracting, and project implementation. Such flexibility is 
also essential to the collaborative style which is responsive to LDC 
desires in problem areas of great complexity and varying uncertainty. 
Other types of technical assistance, which are usually shorter in term 
are amenable to

[[Page 111]]

more precise definition in advance, or involve closely defined and 
relatively standardized services, or are otherwise more analogous to 
commodity resource transfers, may be suitable for other contracting 
methods, e.g., certain forms of institution building, on-the-job 
training, resource surveys, etc. The collaborative assistance method is 
an approved method for providing technical assistance when used in 
accordance with the circumstances outlined above, and with the 
guidelines set forth in paragraph 4, below.

                      4. Implementation Procedures

    (a) Introduction. This paragraph 4, provides background information, 
guidelines and procedures to effect the implementation of the policy set 
forth in paragraph 3 of this appendix.
    (b) Conditions and practices. In order for this policy to work 
effectively even when the proposed activity fits the criteria described 
under Policy, there must also be:
    (1) Acceptance of the notion that the host country, in consultation 
with the contractor, is in the best position to make tactical, day-to-
day decisions on project inputs within agreed-upon limitations and 
output expectations;
    (2) Sufficient trust and respect between the Agency and the 
contractor to allow this flexible implementation authority;
    (3) A direct-hire project monitor with appropriate background to be 
knowledgeable of progress and to assist in an advisory and facilitative 
capacity, both during and between periodic reviews. In addition, the 
following important conditions must be met:
    (i) Adequate preproject communication between, and identification of 
assistance required by, the host government and USAID;
    (ii) Full joint planning and improved project design (``Joint'' as 
used herein refers to the primary parties, i.e., the collaborating 
institutions, as well as the host government and USAID. In some 
instances, it can also include other donors.);
    (iii) Careful contractor selection, i.e., matching of the 
contractor's technical and managerial capabilities to the anticipated 
requirements of the overseas activity;
    (iv) Establishment of relationships between host country, USAID and 
contractor staff to include host country leadership, flexible 
implementation authority, and effective management by the contractor;
    (v) Improved joint project evaluation, feedback, and replanning; and
    (vi) Simplified administrative procedures and greater reliance on 
in-country logistical support.
    (c) Project Stages and Contractor Involvement. In the long-term 
technical assistance projects as described above, there are four 
discrete but sometimes overlapping decision stages which take place--
with the principal contractor usually involved in the last three.
    (1) Problem analysis and project identification. After the host 
government has indicated a desire for U.S. collaboration on a particular 
problem and the USAID field mission has determined that the proposed 
activity is consistent with its program goals and priorities, 
considerable effort is usually necessary to refine further the project 
purpose and type of assistance required and provide a basis for 
contractor selection. This is a crucial step and is focused on results 
sought--on what the prospective contractor is expected to produce in 
relation to resources to be used and to project purpose. It should 
result in a clear understanding of what the LDC wants, and an overall 
plan which includes agreement on specific objectives or outputs, 
acceptable types of activities and inputs and an initial budget--
resulting in project documentation. At this step, USAID makes decisions 
it cannot delegate on what it will support and at what cost. If needed 
to supplement its direct-hire expertise, USAID can use outside 
consultants for analysis and advice but retains the ultimate decision 
for itself in collaboration with, but independent of, the requesting 
host government. (Normally, the proposed contractor for project 
definition and subsequent implementation should not have been involved 
in the problem analysis and project identification stage as a consultant 
to either the host country government, host institution, or USAID. If a 
potential contractor has been so involved, particular care must be taken 
to prevent actual or apparent organizational conflicts of interest in 
the procurement that follows. This could require at a minimum, a careful 
assessment and complete documentation of reasons for selection.)
    Normally, there will need to be some mutual interaction between the 
overall planning stage outlined here and the detailed planning and 
design work which follows in the next phase. There will usually be some 
overlap, with preliminary decisions in this stage providing a basis for 
selection of implementing agents for stage (2) which in turn proceeds 
through some preliminary planning to guide completion of stage (1) as a 
basis for long-term contracting.
    (2) Project definition. At this stage, having selected the 
implementing agent, the U.S. and LDC organizations which will be 
collaborating in carrying out the project are encouraged to work out, to 
their mutual \3/8\satisfaction, the particulars of what to do and how to 
do it (i.e., detailed project design) within the context of LDC 
leadership and responsibility and the general agreements and budget 
reached in stage (1). The emphasis here is on the technical approach to 
be utilized and the scheduling and management of project inputs. This 
may involve a short-term reconnaissance and/or an extensive period of 
detailed joint planning and feeling out of what is feasible during a 
preliminary

[[Page 112]]

operating phase of the project, possibly lasting as much as a year or 
more. This stage recognizes the importance, for the problem-solving or 
ground breaking types of technical assistance, of involving the U.S. and 
LDC implementing organizations together as soon as the detailed design 
work begins. USAID's role here is to facilitate, not direct, the joint 
planning, assure consistency with prior agreements or concur in changes, 
affirm that the implementing parties have agreed on a reasonable project 
design, and prepare or cause to be prepared the documentation required 
for stage (3), including any amendments that might be required to the 
project documentation. If and when a decision is made by the host 
government and USAID to proceed into the operating phase with the same 
contractor, the U.S. intermediary should be treated as a cooperating 
partner in the negotiation of the subsequent long-term operating 
agreement(s) with the host government, host institution and USAID.
    (3) Implementation. The results of the approach outlined in the 
stage above should include, in addition to a better understanding and 
more meaningful commitment by all parties, the following specific 
products:
    (i) A jointly developed life-of-project design which reflects the 
commitment of all parties and includes clear statements of purpose, 
principal outputs, eligible types of activity and expenditure limits, 
critical assumptions, and major progress indicators;
    (ii) A workplan and input schedule for the first two years or at 
least as long as the expenditure period for the next obligation of 
project funds;
    (iii) Provisions for any administrative support, special services or 
other inputs by the host country, contractor, and/or USAID; and
    (iv) A plan for periodic joint evaluation and review or progress and 
subsequent workplans, normally annually, with the participation of all 
parties.
    Appropriate elements of these agreements and understandings are now 
embodied in a contract for project implementation, as described in 
paragraph (d)(3)(i) of the section on Contracting Implications. This 
contract allows the U.S. intermediary to apply its judgment, reflecting 
close collaboration with its LDC colleagues, in adjusting the flow of 
USAID-financed inputs and in making other operational decisions with a 
minimum of requirements for prior USAID approvals or contract amendments 
as long as the contractor stays within the bounds of the approved 
overall plan and budget. In this phase, USAID will give technical 
assistance contractors the authority and responsibility for using their 
specialized expertise to the fullest extent in the scheduling and 
managing of project inputs.
    (4) Monitoring, joint evaluation and replanning. With increased 
flexibility and responsibility for implementation placed with the 
technical assistance contractor, the host government, and/or 
institutional collaborator, improved and timely progress reporting and 
periodic, joint, and structured reviews of results and evolving plans 
are imperative as a basis for monitoring and evaluating contractor 
performance, revalidating or adjusting project design, and for 
determining future funding levels and commitments.
    Both the contractor's annual report and the joint review should be 
structured within the framework of purpose, outputs, performance 
indicators, etc., originally established in the project indentification 
phase--as modified by detailed project design--and reflected in the 
Project Agreement and other pertinent documentation. The field review 
will normally serve as the occasion for discussing changes in or 
additions to previously agreed-to workplans as well as proposing changes 
in purpose, types of activities authorized and budgets which require 
contract amendment. Obviously, the appropriate host government, host 
institution, and senior contractor officials should be thoroughly 
involved in the process, which will have to be adapted to the conditions 
within specific projects and countries. An important USAID 
responsibility is to assure that there is appropriate host country 
participation in developing and improving project plans prior to new 
obligations of funds. The special requirements and responsibilities of 
the various parties shall also be reflected in the project agreement and 
contract terms and in guidelines on the content of annual reports, 
evaluation procedures, etc.
    Standard checking on services actually delivered as a basis for 
reimbursement will be continued including appropriate audit of 
expenditures.
    (d) Contracting implications. The principal elements of change in 
present contracting practices, as detailed below, are earlier selection 
and involvement of the prime contractor, contracting by major stages of 
project design and operations, minimizing the need for precontract 
negotiations and contract amendments and USAID approvals, and providing 
technical assistance contractors with the authority and responsibility 
needed to manage implementation within the approved program bounds.
    (1) Selection. The early involvement of the contractor in the 
definition stage of a long-term technical assistance project, after 
USAID decides what it wants to undertake in stage (1), does not alter 
the Agency's responsibility to select its contractors carefully and in 
full compliance with appropriate contracting regulations and selection 
procedures. What is required here is that contractor selection be 
carried out at an earlier stage than has sometimes been the Agency 
practice in the past or with other types of

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contracts and in anticipation that the contractor, assuming adequate 
performance, will participate in all subsequent phases until final 
completion.
    (2) Contracting stages. In contracting, the initial design stage 
should be separated from the longer term implementation stage without 
any USAID commitment to undertake the second until it has exercised its 
independent judgment based on the product of the first plus any outside 
expert appraisal it and the host country want to use.
    The long-term implementation stage itself may be further subdivided 
into contract periods which permit time between predetermined events for 
analysis, determination of new project requirements, and evaluation of 
performance prior to initiating the next phase by contract amendment/
extension. If, for any reason, such an examination does not appear to 
warrant project continuation, then termination of the project and/or 
contract would be the next step.
    (3) Flexible implementation authority. While good project design 
will eliminate or diminish many operational problems, the very nature of 
long-term technical assistance requires flexible implementation within 
agreed purposes, ultimate outputs, types of activity and available 
financing. With these key variables for USAID management control 
established, contracts should be written so as to minimize the need for 
amendments and USAID approval of changes in input particulars. This can 
be facilitated, both for the USAID, host country, institution, and the 
contractor by:
    (i) Retention of operational plan in contract and removal of 
workplan. The contract narrative will contain the life-of-the-project 
Operational Plan, consistent with the project design as developed in 
stage (2) and reflected in the project documentation (and subsequent 
amendments thereto). The Operational Plan includes a statement of the 
purpose to be achieved, the outputs to be produced by the contractor and 
the types of activities to be undertaken, the more significant 
indicators of progress, a general description of the type of inputs that 
are authorized and intended to be provided during the life of the 
project, and the overall budget.
    In order to allow adjustments at the implementation level without 
going through the contract amendment process, the detailed but short-
term workplan containing specific descriptions and scheduling of all 
inputs such as numbers and types of staff, participants, commodities, 
etc., and specific activities, will not be a part of the contract. It is 
a working document to be modified in the field when the situation 
demands. The latest version will be available as a supporting document 
to justify proposed new obligation levels. Normally, the workplan and 
derived budget will cover a rolling two year period, i.e., each year 
another yearly increment is added after review and approval.
    (ii) Budget flexibility. To support this implementation flexibility, 
contract budget or fiscal controls will be shifted from fixed line items 
for each input category to program categories, permitting the technical 
assistance contractor to adjust amounts and timing to achieve previously 
approved types of activity. This same type of flexibility should apply 
to any local currency supplied for project operations and/or contractor 
staff support. While an essential corollary to eliminating the workplan 
from the contract, this is not a unique procedure under cost 
reimbursement type contracts when the contractor has demonstrated 
adequate management capability.
    (iii) Negotiation of advance understandings. To permit university 
and international research center contractors to manage their activities 
in accordance with their own policies and procedures and thereby sharpen 
their management responsibility while achieving substantial savings in 
time and reduced documentation, USAID may negotiate advance 
understandings with its technical assistance contractors on dollar costs 
and administrative procedures that would be included by reference in its 
subsequent contracts. Upon receipt of a request from the contractor that 
their policies be reviewed and approved for usage in their contract in 
lieu of the standard terms and conditions, OP/PS/OCC, USAID/W will 
initiate negotiations of such policies in an expeditious manner. The 
approved policies will be used in all relevant relations involving the 
Agency and respective contractors in lieu of traditional contract 
standard provisions, whenever this may be appropriate. This does not 
apply to local currency costs and host government procedures which must 
be negotiated in each case.
    The purpose of the practices listed above is not only to give a 
qualified contractor the authority to adjust the composition and timing 
of inputs but to assign to it clear responsibility for managing such 
resources, as the evolving circumstances require, to achieve the agreed-
upon outputs on a cost efficient basis. It should also reduce the delay 
and paperwork involved in frequent but minor contract amendments, and 
approvals. For the agency as a whole, both in the Mission and in USAID/
W, these have involved a large workload and cost.
    (e) Role of USAID. Nothing in this appendix is intended to delegate, 
diminish or otherwise modify USAID's final responsibility for the 
prudent management of public funds and its own programs. Rather in 
withdrawing from the day-to-day involvement in and responsibility for 
the management of adjustment of the flow of inputs during the 
implementation, the best use of limited agency staff and time can be 
devoted to protecting

[[Page 114]]

the public interest in gaining maximum results from the funds 
appropriated for technical assistance by:
    (1) Seeking optimum identification in terms of LDC priorities and 
U.S. capabilities;
    (2) Mobilizing and selecting the best U.S. professional talent to 
design and carry out the project;
    (3) Monitoring what is happening to assure adequacy of processes, 
get a feel of results, assure actual delivery of inputs being financed;
    (4) Assuring that the attention of USAID's implementation agents and 
LDC colleagues stay well focused on project purpose and results to be 
achieved (outputs) and the relation to these of what is being done and 
actual results;
    (5) Providing intermediaries adequate authority and responsibility 
to adjust inputs promptly and sensitively to the evolving project 
situations.
    Attention to these considerations, and to achievements of the 
preimplementation conditions prescribed above, should greatly increase 
the chances for successful project completion and impact on a cost 
effective basis, which is the final measurement of prudent management.

  Attachment to Appendix F--Guidelines for Requests for Expressions of 
                                Interest

                      A. Length and Level of Detail

    A Request for Expression of Interest (REI) should include more than 
just a short letter expressing interest, but should not be in the detail 
of a technical proposal (RFTP). The REI is not the only source of 
information that can or should be used for selection, but at least a 
minimum level of information should be contained in each document. A ten 
page paper that responds to the selection criteria included in every REI 
should be sufficient for evaluation purposes. The selection criteria 
should specify the technical inputs required for successful execution of 
the project and normally require a response in three general areas:
    1. A description of the institution's capability to address the 
problem described in the REI.
    2. Any related experience, whether in the country or region or in 
the problem area.
    3. A demonstrable commitment of the institution to support the 
project.
    The responses should address the capability, experience, and 
commitment to the particular project.

                    B. Specific Personnel Information

    The response should specify within the areas set out in the 
selection criteria the following planning and personnel factors.
    1. The design team plan and the scope of work for each member.
    2. A list of candidates for the design team and their credentials.
    3. A list of possible candidates for long-term assignment to the 
project. (Since there has been no project design, the specific technical 
assistance slots and technical responsibilities are vague. But it is 
expected that at least half of the personnel needs can be estimated 
early in the project. The institution should make its best guess for the 
team and present to the Agency the persons or types of persons with whom 
they are likely to contract.)

                   C. Multiple Institution Submissions

    Joint effort on the part of several institutions is encouraged when 
appropriate. A single institution may submit an expression of interest 
for part of the project without knowledge of other collaborators or it 
may submit information in response to A and B of this attachment as part 
of a suggested collection of institutions. In either case, a proposed 
plan for cooperation is necessary.
    However, such joint efforts must specify the division of 
responsibilities for the planning and personnel factors indicated in B 
of this attachment. Often USAID will identify the need for cooperation 
and suggest such an effort in the REI. Even if USAID does not suggest 
collaboration, joint efforts with a description of the cooperation would 
be an appropriate way to respond to an REI.

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

[49 FR 13301, Apr. 3, 1984, as amended at 49 FR 33669, Aug. 24, 1984; 50 
FR 16089, Apr. 24, 1985; 51 FR 20652, June 6, 1986; 52 FR 6160, Mar. 2, 
1987]

                 Appendixes G-H to Chapter 7 [Reserved]

      Appendix I to Chapter 7--USAID's Academic Publication Policy

                         1. Statement of Policy

    This is a statement of USAID policy on publication, or release to 
parties other than those specifically authorized, of unclassified 
materials gathered or developed under contracts with academic 
institutions.

                        2. Underlying Principles

    USAID favors and encourages the publication of scholarly research as 
well as the maximum availability, distribution, and use of knowledge 
developed in its program.
    This policy statement does not deal with material that is classified 
for security reasons. It does deal with considerations of national 
interest, not of sufficient gravity to warrant security classification, 
but serious enough to affect adversely the conduct of

[[Page 115]]

U.S. assistance programs. Consequently, in addition to the requirements 
of courtesy, propriety, and confidence which normally guide scholars in 
their work, there should also be consideration of the potential 
repercussions of publication on the successful execution of development 
and other cooperative programs in which the United States and foreign 
countries are involved.

                       3. Operational Definitions

    The Agency draws a distinction between two kinds of manuscripts 
which a scholar may wish to publish:
    (a) A report which is prepared and delivered to the Agency under the 
terms of the contract (a ``contract manuscript''); and
    (b) An article or book based upon experience and information gained 
under an USAID contract but not prepared or delivered under the contract 
(a ``non-contract manuscript'').
    There are two kinds of actions, to be specified in the contract, 
which the Agency can take upon notification of a contractor's desire to 
publish:
    (a) Comment only, under which USAID and the foreign government 
involved may review the manuscript, and have their comments considered 
seriously by the contractor prior to publication; and
    (b) Authorization for release, which USAID may withhold if 
reconciliation between the national interest and the author's interest 
is impossible.

                          4. Policy Statements

    (a) USAID, as a general rule, will not require an academic 
institution to obtain permission to publish the written work produced 
under a contract. It will ask for the opportunity to review the 
manuscript for comment only, prior to publication.
    In the case of a contract manuscript, USAID reserves the right to 
disclaim endorsement of the opinions expressed; if it is a noncontract 
manuscript, USAID reserves the right to disassociate itself from 
sponsorship or publication.
    (b) On the other hand, USAID may reserve the right of authorization 
for release in those exceptional cases where conditions exist making it 
reasonably foreseeable, in light of the contract's scope of work and the 
manner and place of performance, that the written work to be prepared 
and delivered under the contract may have adverse repercussions on the 
relations and programs of the United States. Where this right is 
reserved, it must be so specified in the contract. In determining where 
to reserve such right, USAID will consider all relevant factors, 
including:
    (1) The extent to which prompt and full performance of the contract 
will require access, facilitated by reason of the contract, to 
information not generally available to scholars;
    (2) The extent to which the work involves matters of political 
concern to foreign countries, particularly where any substantial part of 
the work is to be performed therein;
    (3) The extent to which, by reason of USAID's close involvement and 
cooperation in the performance of the contract, the work product may be 
so identified with USAID itself as to prevent effective disclaimer of 
USAID endorsement thereof;
    (4) The extent to which the objective of the contract is to provide 
advice to USAID or to a foreign government of immediate operational 
significance in the conduct of the USAID program or the implementation 
of governmental programs in the host country;
    (5) The desires of the host country.

                            5. Implementation

    The successful implementation of this policy on publication rests on 
a thorough understanding and acceptance of these principles by USAID and 
the prospective contractor. The actual publications provision for a 
particular contract, then, would be so worded as to reflect the 
agreement reached in the contract negotations.
    USAID's concern with noncontract manuscripts is related to the 
identification of a manuscript with the U.S. Government. This concern 
will be modified by the passage of time following termination of the 
contract.
    In the normal case of prepublication review for USAID comment, the 
institution will submit a copy of the manuscript not later than the date 
of submission to the publisher. This gives the Agency time to comment if 
it is deemed appropriate. However, in the case of review for 
authorization, timely notification of USAID's response will be given, 
consistent with the size of the manuscript and the number and location 
of the parties involved.
    The Agency will make every effort to expedite this review procedure 
in accordance with the underlying principle described at the beginning 
of this policy statement.

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

[49 FR 13304, Apr. 3, 1984]

   Appendix J to Chapter 7--Direct USAID Contracts With a Cooperating 
Country National and With a Third Country National for Personal Services 
                                 Abroad

                               1. General

    (a) Purpose. This appendix sets forth the authority, policy, and 
procedures under which USAID contracts with cooperating

[[Page 116]]

country nationals or third country nationals for personal services 
abroad.
    (b) Definitions. For the purpose of this appendix:
    (1) Personal services contract (PSC) means a contract that, by its 
express terms or as administered, make the contractor personnel appear, 
in effect, Government employees (see FAR 37.104).
    (2) Employer-employee relationship means an employment relationship 
under a service contract with an individual which occurs when, as a 
result of (i) the contract's terms or (ii) the manner of its 
administration during performance, the contractor is subject to the 
relatively continuous supervision and control of a Government officer or 
employee.
    (3) Non-personal services contract means a contract under which the 
personnel rendering the services are not subject either by the 
contract's terms or by the manner of its administration, to the 
supervision and control usually prevailing in relationships between the 
Government and its employees.
    (4) Independent contractor relationship means a contract 
relationship in which the contractor is not subject to the supervision 
and control prevailing in relationships between the Government and its 
employees. Under these relationships, the Government does not normally 
supervise the performance of the work, or the manner in which it is to 
be performed, control the days of the week or hours of the day in which 
it is to be performed, or the location of performance.
    (5) Contractor means a cooperating country national or a third 
country national who has entered into a contract pursuant to this 
appendix.
    (6) Cooperating country means the country in which the employing 
USAID Mission is located.
    (7) Cooperating country national (CCN) means an individual who is a 
cooperating country citizen or a non-cooperating country citizen 
lawfully admitted for permanent residence in the cooperating country.
    (8) Third Country National (TCN) means an individual
    (i) Who is neither a citizen nor a permanent legal resident alien of 
the United States nor of the country to which assigned for duty, and
    (ii) Who is eligible for return to his/her home country or country 
of recruitment at U.S. Government expense [see Section 12, General 
Provision 9 paragraph (n)].

                             2. Legal Basis

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

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

                            3. Applicability

    (a) This appendix applies to all personal services contracts with 
CCNs or TCNs to provide assistance abroad under Section 636(a)(3) of the 
FAA.
    (b) This appendix does not apply to:
    (1) Contracts for non-personal services with TCNs or CCNs; such 
contracts are covered by the basic text of the FAR and AIDAR.
    (2) Personal services contracts with U.S. citizens or U.S. resident 
aliens for personal services abroad; such contracts are covered by 
Appendix D of this chapter.
    (3) Appointments of experts and consultants as USAID direct-hire 
employees; such appointments are covered by USAID Handbook 25, 
Employment and Promotion or superseding Chapters of the Automated 
Directive System (ADS).

                                4. Policy

    (a) General. USAID may finance, with either program or operating 
expense (OE) funds, the cost of personal services as part of the 
Agency's program of foreign assistance by entering into a direct 
contract with a CCN or a TCN for personal services abroad.
    (1) Program funds. Under the authority of Section 636(h) of the FAA, 
program funds may be obligated for periods up to five years where 
necessary and appropriate to the accomplishment of the tasks involved.
    (2) Operating expense funds. Pursuant to USAID budget policy, OE 
funded salaries and other recurrent cost items may be forward funded for 
a period of up to three (3) months beyond the fiscal year in which these 
funds were obligated. Non-recurring cost items may be forward funded for 
periods not to exceed twenty-four (24) months where necessary and 
appropriate to accomplishment of the work.\2\
---------------------------------------------------------------------------

    \2\If there is a need, these contracts may be written for 5 years 
but only funded as outlined above.
---------------------------------------------------------------------------

    (b) Limitations on Personal Services Contracts.
    (1) Personal services contracts may only be used when adequate 
supervision is available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.

[[Page 117]]

    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, Cooperating Country or Third Country 
Nationals may be delegated or assigned any authority, duty or 
responsibility, delegated or assigned U.S. citizen direct-hire employees 
(USDH employees) except that:
    a. They may not supervise USDH employees of USAID or other U.S. 
Government agencies. They may supervise USPSCs and non-U.S. citizen 
employees.
    b. They may not be designated a Contracting Officer or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters but may not 
be delegated authority to make a final decision on personnel selection.
    e. Services which involve security classified material.
    (4) Exceptions. Exceptions to the limitations in (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).
    (c) Conditions of Employment.
    (1) General. For the purpose of any law administered by the U.S. 
Office of Personnel Management, USAID PSC contractors are not to be 
regarded as employees of the U.S. Government, are not included under any 
retirement or pension program of the U.S. Government, and are not 
eligible for the Incentive Awards Program covered by Uniform State/
USAID/USIA regulations. Each USAID Mission is expected to participate in 
the Joint Special Embassy Incentive Awards Program. The program is 
administered by a joint committee which establishes procedures for 
submission, review and approval of proposed awards. Other than these 
exceptions, CCNs and TCNs who are hired for work in a cooperating 
country under PSCs generally will be extended the same benefits and be 
subject to the same restrictions as Foreign Service Nationals (FSNs) 
employed as direct-hires by the USAID Mission.
    (2) Compensation. (i) It is USAID's general policy (see AIDAR 
722.170) that PSC compensation may not, without the approval of the 
Mission Director or Assistant Administrator, exceed the prevailing 
compensation paid to personnel performing comparable work in the 
cooperating country. Compensation for TCN or CCN personal services 
contractors set in accordance with the provisions of 4c(2)(ii) below 
satisfies this requirement.
    (ii) In accordance with Section 408(a)(1) of the Foreign Service Act 
of 1980, a local compensation plan forms the basis for all compensation 
payments to FSNs which includes CCNs and TCNs. The plan is each post's 
official system of position classification and pay, consisting of the 
local salary schedule which includes salary rates, statements 
authorizing fringe benefit payments, and other pertinent facets of 
compensation for TCNs and CCNs, and the local position classification 
system as reflected in the Local Employee Position Classification 
Handbook (LEPCH) or equivalent in effect at the Mission. Compensation 
for PSCs will be in accordance with the local compensation plan, to the 
extent that it covers employees of the type or category being employed, 
unless the Mission Director determines otherwise. If the Mission 
Director determines that compensation in accordance with the local plan 
would be inappropriate in a particular instance, then compensation will 
be set in accordance with (in order of preference):
    (A) Any other Mission policies on foreign national employee 
compensation; or
    (B) Paragraphs 4(c) (d), (e), (g), (h), and (i) of Appendix D. When 
compensation is set in accordance with this exception, the record shall 
be documented in writing with a justification prepared by the requesting 
office and approved by the Mission Director.
    (iii) The earning of leave (annual and sick), allowances and 
differential (if applicable), salaries and all other related benefits 
cannot be enumerated in this Appendix as they vary from Mission to 
Mission and are based upon the compensation plan for each.
    (iv) Unless otherwise authorized, the currency in which compensation 
is paid to contractors shall be in accordance with the prevailing local 
compensation practice of the post.
    (v) CCN and TCN contractors are eligible for allowances and 
differential on the same basis as direct-hire FSN employees under the 
post compensation plan.
    (vi) A USAID PSC who is a spouse of a current or retired U.S. Civil 
Service, U.S. Foreign Service, or U.S. military service member, and who 
is covered by their spouse's government health or life insurance policy, 
is ineligible for a contribution towards the costs of annual health and 
life insurance.
    (vii) Retired CCNs and TCNs may be awarded personal services 
contracts without any reduction in or offset against their Government 
annuity.
    (3) Incentives Awards. (i) All Cooperating Country Nationals direct-
hire and Personal Services Contractors (PSCs) and Third Country 
Nationals (PSCs) of the Foreign Affairs Community are eligible for the 
Joint Special Embassy Incentive Awards Program.
    (ii) Meritorious Step Increases for USAID FSN PSCs may be authorized 
provided the granting of such increases is the general practice locally.
    (iii) The Joint Country Awards Committee administers each post's 
(Embassy) award program, including establishment of procedures for 
submission, review and approval of proposed awards.

[[Page 118]]

    (4) Training. CCN and TCN PSCs are eligible for most of the training 
courses offered in the Training Course Schedule. However, applications 
will be processed on a case-by-case basis and are required to be 
approved by the Contracting Officer.

              5. Soliciting for Personal Services Contracts

    (a) Technical Officer's Responsibilities. The Technical Officer will 
prepare a written detailed statement of duties and a statement of 
minimum qualifications to cover the position being recruited for; the 
statement shall be included in the procurement request. The procurement 
request shall also include the following additional information as a 
minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) A certification from the officer in the Mission responsible for 
the LEPCH or equivalent that the position has been reviewed and is 
properly classified as to a title, series and grade in accordance with 
the LEPCH. If the position does not fall within the LEPCH or equivalent 
system, and estimate of compensation based on subparagraphs 4(c)(2)(ii) 
(A) or (B) of this Appendix after consultations or in coordination with 
the contract officer or executive officer;
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of certified biographical data and salary history. 
(Upon receipt, one copy of the above information shall be forwarded to 
the Project Officer);
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for;
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, and General Provisions as well as the FAR Clause to be 
included in full text and a list of those to be incorporated by 
reference; and
    (iv) A copy of General Notice entitled ``Employee Review of the New 
Standards of Conduct'' dated October 30, 1992.
    (2) The Contracting Officer shall comply with the limitations of 
AIDAR 706.302-70(c) as detailed in paragraph 5(c) below.
    (c) Competition. (1) Under AIDAR 706.302-70(b)(1), Personal Services 
Contracts are exempt from the requirements for full and open competition 
with two limitations that must be observed by Contracting Officers:
    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) a justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of AIDAR 706.302-70(c)(2) for a 
justification in accordance with FAR 6.303. Use of this class 
justification for Personal Services Contracts with Cooperating Country 
Nationals and Third Country Nationals is subject to the following 
conditions:
    (i) New contracts are publicized consistent with Mission/Embassy 
practice on announcement of direct hire FSN positions. Renewals or 
extensions with the same individual for continuing service do not need 
to be publicized.
    (ii) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to AIDAR 706.302-70(b)(1); that the conditions for use of this class 
justification have been met; and that the cost of the contract is fair 
and reasonable. If the conditions in paragraphs (2)(i) and (ii) are not 
followed, the Contracting Officer must prepare a separate justification 
as required under AIDAR 706.302-70(c)(2).
    (3) Since the award of a personal services contract is based on 
technical qualifications, not price, and since the biographical data and 
salary history are used to solicit for such contracts, FAR Subparts 15.4 
and 15.5 are inappropriate and shall not be used. Instead, the 
solicitation and selection procedures outlined in this Appendix shall 
govern.

               6. Negotiating a Personal Services Contract

    Negotiating a Personal Services Contract is significantly different 
from negotiating a nonpersonal services contract because it establishes 
an employer-employee relationship; therefore, the selection and 
negotiations procedures are more akin to the personal selection 
procedures.
    (a) Technical Officer's Responsibilities. The Technical Officer 
shall be responsible for reviewing and evaluating the applications 
received in response to the solicitation issued by the Contracting 
Officer. If deemed appropriate, interviews may be conducted with the 
applicants before the final selection is submitted to the Contracting 
Officer.
    (b) Contracting Officer's Responsibilities.
    (1) The Contracting Officer shall forward a copy of biographical 
data and salary history received under the solicitation to the Technical 
Officer for evaluation.
    (2) On receipt of the Technical Officer's recommendation, the 
Contracting Officer

[[Page 119]]

shall conduct negotiations with the recommended applicant. The terms and 
conditions of the contract will normally be in accordance with the local 
compensation plan which forms the basis for all compensation on payments 
paid to FSNs which includes CCNs and TCNs.
    (3) The Contracting Officer shall use the certified salary history 
on the certified statement of biographical data and salary history as 
the basis for salary negotiations, along with the Technical Officer's 
cost estimate.
    (4) The Contracting Officer will obtain necessary data for a 
security and suitability clearance to the extent required by USAID 
Handbook 6, Security or superseding ADS Chapters.

                7. Executing a Personal Services Contract

    Contracting activities, whether USAID/W or Mission, may execute 
Personal Services Contracts, provided that the amount of the contract 
does not exceed the contracting authority that has been redelegated to 
them. See AIDAR 701.601. In executing a personal service contract, the 
Contracting Officer is responsible for insuring that:
    (a) The proposed contract is within his/her delegated authority;
    (b) A written detailed statement of duties covering the proposed 
contract has been received;
    (c) The proposed scope of work is contractible, contains a statement 
of minimum qualifications from the technical office requesting the 
services, and is suitable for a personal services contract in that:
    (1) Performance of the proposed work requires or is best suited for 
an employer-employee relationship, and is thus not suited to the use of 
a non-personal services contract;
    (2) The scope of work does not require performance of any function 
normally reserved for direct-hire Federal employees (under paragraph 
4(b) of this Appendix); and
    (3) There is no apparent conflict of interest involved (if the 
Contracting Officer believes that a conflict of interest may exist, the 
question should be referred to the cognizant legal counsel);
    (d) Selection of the contractor is documented and justified (AIDAR 
706.302-70(b)(1) provides an exception to the requirement for full and 
open competition for Personal Services Contracts abroad; see paragraph 
5(c) of this Appendix);
    (e) The standard contract format prescribed for a Cooperating 
Country National and a Third Country National personal services contract 
(Sections 9, 10, 11, 12, and 13 of this Appendix as appropriate) is 
used, or that any necessary deviations are processed as required by 
AIDAR 701.470;
    (f) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (g) The contract is complete and correct and all information 
required on the contract Cover Page (USAID form 1420-36B) has been 
entered;
    (h) The contract has been signed by the Contracting Officer and the 
contractor, and fully executed copies are properly distributed;
    (i) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties:
    (1) Security clearance to the extent required by USAID Handbook 6, 
Security or other superseding Chapters of the Automated Directives 
System;
    (2) Mission, host country, and technical office clearance, as 
appropriate;
    (3) Medical clearance(s) based on a full medical examination(s) and 
statement of medical opinion by a licensed physician. The physician's 
medical opinion must be in the possession of the Contracting Officer 
prior to signature of contract. If a TCN is recruited, medical clearance 
requirements apply to the contractor and each dependent who is 
authorized to accompany the contractor;
    (4) The approval for any salary in excess of ES-6, in accordance 
with Appendix G of this chapter;
    (5) A copy of the class justification or other appropriate 
explanation and support required by AIDAR 706.302-70, if applicable;
    (6) Any deviation to the policy or procedures of this Appendix, 
processed and approved under AIDAR 701.470;
    (7) The memorandum of negotiation;
    (j) The position description is classified in accordance with the 
LEPCH, and the proposed salary is consistent with the local compensation 
plan or the alternate procedures established in 4(c)(2)(ii) above;
    (k) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 134 (the Contracting 
Officer ensures that the contract has been properly recorded by the 
appropriate accounting office prior to its release for the signature of 
the selected contractor);
    (l) The contractor receives and understands USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' dated 
October 30, 1992 and a copy is attached to each contract, as provided 
for in paragraph (c) of General Provision 2, Section 12;
    (m) Agency conflict of interest requirements, as set out in the 
above notice are also met by the contractor prior to his/her reporting 
for duty;
    (n) A copy of a Checklist for Personal Services Contractors which 
may be in the form set out above or another form convenient for the 
contracting officer, provided that a form containing all of the 
information described

[[Page 120]]

in this paragraph 7 shall be prepared for each PSC and placed in the 
contract file;
    (o) In consultation with the regional legal advisor and/or the 
regional contracting officer, the contract is modified by deleting from 
the General Provisions (Sections 12 and 13 of this Appendix) the 
inapplicable clause(s) by a listing in the Schedule; and
    (p) The block entitled, ``Acquisition and Assistance Request 
Document'' on the Cover Page of the contract format is completed by 
inserting the four-segment technical number as prescribed in USAID 
Handbook 18, the USAID Code Book Appendix D or superseding ADS Chapter 
if the PSC is project-funded.

                          8. Contracting Format

    The prescribed Contract Cover Page, Contract Schedules, General 
Provisions and FAR Clauses for personal service contracts for TCNs and 
CCNs covered by this Appendix are included as follows:
    9. ``Cover Page'' for a Contract with a Cooperating Country National 
or with a Third Country National for Personal Services.
    10. ``Schedule'' for a Contract with a Cooperating Country National 
or Third Country National Personal Services Contracts.
    11. ``Optional Schedule'' for a Contract with a Cooperating Country 
National or Third Country National Personal Services Contracts.
    [Use of the Optional Schedule is intended to serve as an alternate 
procedure for OE funded Foreign Service National PSCs. The schedule was 
developed for use when the Contracting Officer anticipates incremental 
recurring cost funded contracts. It should be noted that the Optional 
Schedule eliminates the need to amend the contract each time funds are 
obligated. However, the Contracting Officer is required to amend each 
contract not less than twice during a 12 month period to ensure that the 
contract record of obligations is up to date and agrees with the figures 
in the master funding document.]
    12. ``General Provisions'' for a Contract With a Cooperating Country 
National or With a Third Country National for Personal Services.
    13. FAR Clauses to be incorporated in full text as well as by 
reference in Personal Services Contracts.

9. ``Cover page'' for a Contract With a Cooperating Country National or 
          With a Third Country National for Personal Services.

    --AID Form 1420-36B (11/96)

[[Page 121]]

[GRAPHIC] [TIFF OMITTED] TR11AU97.005

 10. ``Schedule'' for a Contract With a Cooperating Country National or 
           Third Country National Personal Services Contracts

Contract No.------
Table of Contents
    The Schedule on pages ------ through ------ consists of this Table 
of Contents, the following Articles, and General Provisions:
Article I Statement of Duties

[[Page 122]]

Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

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

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6 Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

    Schedule

    Note: Use of the following Schedule is not mandatory.

    The Schedule is intended to serve as a guideline and as a checklist 
for contracting offices in drafting contract schedules. Article language 
shall be changed to suit the needs of the particular contract. Special 
attention should be given to the financial planning sections where 
unnecessary line items should be eliminated.

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Within ------ days after written notice from the Contracting Officer 
that all clearances, including the statement of medical opinion required 
under General Provision Clause 3, have been received, unless another 
date is specified by the contracting officer in writing, the contractor 
shall proceed to ------ and shall promptly commence performance of the 
duties specified above. The contractor's period of service shall be 
approximately ------ in ------. (Specify time of duties in each 
location.)

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or contracting officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due, in currency of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in Paragraph D, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during contractor's tour of duty (GP 
Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), and 
(3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. Allowable Costs.
    1. Compensation at the rate of LC ---- per (year) (month) (week) 
(day), equivalent to Grade FSN-------/------ in accordance with the 
Mission's Local Compensation Plan. If during the effective period of 
this contract the Local Compensation Plan is revised, contractor's 
compensation will be revised accordingly and contractor will be notified 
in writing by the contracting officer. Adjustments in compensation for 
periods when the contractor is not in compensable pay status shall be 
calculated as follows: Rate of LC ------ per (day) (hour).
    LC ------
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------

    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9).

a. United States--$------

[[Page 123]]

b. International--$------
c. Cooperating and Third Country--$------, LC------
    Subtotals Item 4--$------, LC------

    5. Other Direct Costs

a. Physical Examination (Ref. GP Clause 3)--LC------
b. Miscellaneous--LC------
    Subtotal Item--LC------

    Total Estimated Costs (Lines 1 thru 5) $------ LC ------
    E. Maximum U.S. Dollar and Local Currency Obligation.
    In no event shall the maximum U.S. Dollar obligation under this 
contract exceed $---- nor shall the maximum local currency obligation 
exceed LC ------. Contractor shall keep a close account of all 
obligations incurred and accrued hereunder and promptly notify the 
contracting officer whenever it appears that the said maximum is not 
sufficient to cover all compensation and costs reimbursable which are 
anticipated under the contract.
    F. Under the Joint Incentive Awards Program for FSN monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.

           Article IV--Costs Reimbursable And Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

(------) for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

11. Optional Schedule for a Contract With a Cooperating Country National 
          or Third Country National Personal Services Contracts

Contract No. ------
Table of Contents
(Optional Schedule)
    [Use of the Optional Schedule is not mandatory. It is intended to 
serve as an alternate procedure for OE funded Cooperating Country 
National and Third Country National PSCs. The schedule was developed for 
use when the Contracting Officer anticipates incremental recurring cost 
funded contracts.
    It should be noted that use of the Optional Schedule eliminates the 
need to amend the contract each time funds are obligated. However, 
Contracting Officer is required to amend each contract not less than 
twice during a 12 month period to ensure that the contract record of 
obligations is up to date and agrees with the figures in the master 
funding document.]
    The Schedule on pages ------ through ------ consists of this Table 
of Contents and the following Articles:

Article I Statement of Duties
Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

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

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance

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9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Employment under this contract is of a continuing nature. Its 
duration is expected to be part of a series of sequential contracts; all 
contract provisions and clauses and regulatory requirements concerning 
availability of funds and the specific duration of this contract shall 
apply.
    Within 10 days after written notice from the Contracting Offices 
that all clearances have been received, unless another date is specified 
by the Contracting Officer in writing, the contractor shall proceed to 
(name place) and shall promptly commence performance of the duties 
specified in Article I of this contract. The contractor's period of 
service shall be approximately (specify duration from date to date).

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or Contracting Officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due in currency of the cooperating country (LC) in accordance with the 
prevailing practice of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in paragraph E, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during the contractor's tour of duty 
(GP Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), 
and (3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. All employee rights and benefits from the previous contract or 
employment, i.e., accumulated annual and sick leave balances, original 
service computation dates, reserve fund contributions, accumulated 
compensatory time, social security contributions, seniority and 
longevity bonuses are considered allowable costs and as a continuation 
as long as the break in service does not exceed three days.
    E. Allowable Costs.
    1. The following illustrative budget details allowable costs under 
this contract and provides estimated incremental recurrent cost funding 
in the total amount shown. Additional funds for the full term of this 
contract will be provided by the preparation of a master PSC funding 
document issued by the Mission Controller for the purpose of providing 
additional funding for a specific period. The master PSC funding 
document will be attached to this contract and will form a part of the 
executed contract while also serving to amend the budget.
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    LC------
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9.)

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 4--$------, LC ------

    5. Other Direct Costs.

a. Physical Examination (Ref. GP Clause 3)--$------, LC ------
b. Miscellaneous--$------, LC ------
    Subtotals Item 5--$------, LC ------

Total Estimated Costs (Lines 1 thru 5) $------, LC ------

    F. Allowable costs compensation and all terms and benefits of 
employment under this contract will be in accordance with the Mission's 
local compensation plan. Salary

[[Page 125]]

changes and personnel-related contract actions will be made by 
processing the same forms as used in making such changes and actions for 
direct-hire FSN employees. When issued by the Contracting Officer, the 
forms utilized will be attached to the contract and will form a part of 
the contract terms and conditions.
    Any adjustment or increase in the compensation granted to direct-
hire employees under the local compensation plan will be allowed for in 
PSCs subject to the availability of funds. Such an adjustment will be 
effected by a mass pay adjustment notice from the Contracting Officer, 
which will be attached to the contract and form a part of the executed 
contract.
    At the end of each year of satisfactory service, PSC contractors 
will be eligible to receive an increase equal to one annual step 
increase as shown in the local compensation plan, pending availability 
for funds. Such increase will be effected by the execution of an SF-
1126, Payroll Change Slip which is to be attached to each contract and 
each action forms a part of the official contract file.
    Under the Joint Inventive Awards Program for FSNs, monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.
    The master PSC funding document may not exceed the term or estimated 
total cost of this contract. Notwithstanding that additional funds are 
obligated under this contract through the issuance and attachment of the 
master PSC funding document, all other contract terms and conditions 
remain in full effect.

           Article IV--Costs Reimbursable and Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

------ for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

    12. General Provisions for a Contract With a Cooperating Country 
     National or With a Third Country National for Personal Services

    To be used to contract with cooperating country nationals or third 
country nationals for personal services.

Index of Clauses
1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

1. Definitions (JUL 1993)
    [For use in both Cooperating Country National (CCN) and Third 
Country National (TCN) Contracts].
    (a) USAID shall mean the U.S. Agency for International Development.
    (b) Administrator shall mean the Administrator or the Deputy 
Administrator of the U.S. Agency for International Development.

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    (c) Contracting Officer shall mean a person with the authority to 
enter into, administer, and/or terminate contracts and make related 
determinations and findings. The term includes certain authorized 
representatives of the Contracting Officer acting within the limits of 
their authority as delegated by the Contracting Officer.
    (d) Cooperating Country National shall mean the individual engaged 
to serve in the Cooperating Country under this contract.
    (e) Cooperating Country shall mean the foreign country in or for 
which services are to be rendered hereunder.
    (f) Cooperating Government shall mean the government of the 
Cooperating Country.
    (g) Government shall mean the United States Government.
    (h) Economy Class air travel shall mean a class of air travel which 
is less than business or first class.
    (i) Local Currency shall mean the currency of the cooperating 
country.
    (j) Mission shall mean the United States USAID Mission to, or 
principal USAID office in, the Cooperating Country.
    (k) Mission Director shall mean the principal officer in the Mission 
in the Cooperating Country, or his/her designated representative.
    (l) Third Country National shall mean an individual (i) who is 
neither a citizen of the United States nor of the country to which 
assigned for duty, and (ii) who is eligible for return travel to the 
TCN's home country or country from which recruited at U.S. Government 
expenses, and (iii) who is on a limited assignment for a specific period 
of time.
    (m) Tour of Duty shall mean the contractor's period of service under 
this contract and shall include, authorized leave and international 
travel.
    (n) Traveler shall mean the contractor or dependents of the 
contractor who are in authorized travel status.
    (o) Dependents shall mean spouse and children (including step and 
adopted children who are unmarried and under 21 years of age or, 
regardless of age, are incapable of self-support.

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

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

    3. Physical Fitness (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Cooperating Country National.
    The contractor shall be examined by a licensed doctor of medicine, 
and shall obtain a statement of medical opinion that, in the doctor's 
opinion, the contractor is physically qualified to engage in the type of 
activity for which he/she is to be employed under the contract. A copy 
of the medical opinion shall be provided to the Contracting Officer 
before the contractor starts work under the contract. The contractor 
shall be reimbursed for the cost of the physical examination based on 
the rates prevailing locally for such examinations in accordance with 
Mission practice.
    (b) Third Country National.
    (i) The contractor shall obtain a physical examination for himself/
herself and any authorized dependents by a licensed doctor of medicine. 
The contractor shall obtain a statement of medical opinion from the 
doctor that, in the doctor's opinion, the contractor is physically 
qualified to engage in the type of activity for which he/she is to be 
employed under the contract, and the contractor's authorized dependents 
are physically qualified to reside in the cooperating country. A copy of 
that medical opinion shall be provided to the Contracting Officer prior 
to the dependents' departure for the cooperating country.
    (ii) The contractor shall be reimbursed for the cost of the physical 
examinations mentioned above as follows: (1) based on those rates 
prevailing locally for such examinations in accordance with Mission 
practice or (2) if not done locally, not to exceed $100 per examination 
for the contractor's dependents of 12 years of age and over and not to 
exceed $40 per examination for contractor's dependents under 12 years of 
age. The contractor shall also be reimbursed for the cost of all 
immunizations normally authorized and extended to FSN employees.

4. Security (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) The contractor is obligated to notify immediately the 
Contracting Officer if the

[[Page 127]]

contractor is arrested or charged with any offense during the term of 
this contract.
    (b) The contractor shall not normally have access to classified or 
administratively controlled information and shall take conscious steps 
to avoid receiving or learning of such information. However, based on 
contractor's need to know, Mission may authorize access to 
administratively controlled information for performance of assigned 
scope of work on a case-by-case basis in accordance with USAID Handbook 
6 or superseding ADS Chapters.
    (c) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, marked 
``Privileged Information'', of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity against the United States of America or the USAID 
Mission or the cooperating country government.

5. Workweek (OCT 1987)

    [For use in both CCN and TCN Contracts].
    The contractor's workweek shall not be less than 40 hours, unless 
otherwise provided in the Schedule, and shall coincide with the workweek 
for those employees of the Mission or the cooperating country agency 
must closely associated with the work of this contract. If approved in 
advance in writing, overtime worked by the contractor shall be paid in 
accordance with the procedures governing premium compensation applicable 
to direct-hire foreign service national employees. If the contract is 
for less than full time (40 hours weekly), the leave earned shall be 
prorated.

6. Leave and Holidays (OCT 1987)

    [For use in both CCN and TCN Contracts].
    (a) Vacation Leave.
    The contractor may accrue, accumulate, use and be paid for vacation 
leave in the same manner as such leave is accrued, accumulated, used and 
paid to foreign service national direct-hire employees of the Mission. 
No vacation leave shall be earned if the contract is for less than 90 
days. Unused vacation leave may be carried over under an extension or 
renewal of the contract as long as it conforms to Mission policy and 
practice. With the approval of the Mission Director, and if the 
circumstances warrant, a contractor may be granted advance vacation 
leave in excess of that earned, but in no case shall a contractor be 
granted advance vacation leave in excess of that which he/she will earn 
over the life of the contract. The contractor agrees to reimburse USAID 
for leave used in excess of the amount earned during the contractor's 
assignment under the contract.
    (b) Sick Leave.
    The contractor may accrue, accumulate, and use sick leave in the 
same manner as such leave is accrued, accumulated and used by foreign 
service national direct-hire employees of the Mission. Unused sick leave 
may be carried over under an extension of the contract. The contractor 
will not be paid for sick leave earned but unused at the completion of 
this contract.
    (c) Leave Without Pay.
    Leave without pay may be granted only with the written approval of 
the Contracting Officer or Mission Director.
    (d) Holidays.
    The contractor shall be entitled to all holidays granted by the 
Mission to direct-hire cooperating country national employees who are on 
comparable assignments.

7. Social Security and Cooperating Country Taxes (DEC 1986)

    [For use in both CCN and TCN Contracts].
    Funds for Social Security, retirement, pension, vacation or other 
cooperating country programs as required by local law shall be deducted 
and withheld in accordance with laws and regulations and rulings of the 
cooperating country or any agreement concerning such withholding entered 
into between the cooperating government and the United States 
Government.

8. Insurance (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Worker's Compensation Benefits.
    The contractor shall be provided worker's compensation benefits 
under the Federal Employees Compensation Act.
    (b) Health and Life Insurance.
    The contractor shall be provided personal health and life insurance 
benefits on the same basis as they are granted to direct-hire CCNs and 
TCN employees at the post under the Post Compensation Plan.
    (c) Insurance on Private Automobiles--Contractor Responsibility [For 
use in TCN contracts]. If the contractor or dependents transport, or 
cause to be transported, any privately owned automobile(s) to the 
cooperating country, or any of them purchase an automobile within the 
cooperating country, the contractor agrees to ensure that all such 
automobile(s) during such ownership within the cooperating country will 
be covered by a paid-up insurance policy issued by a reliable company 
providing the following minimum coverages, or such other minimum 
coverages as may be set by the Mission Director, payable in U.S. dollars 
or its equivalent in the currency of the cooperating country: injury to 
persons, $10,000/$20,000; property damage, $5,000. The contractor 
further agrees to deliver, or cause to be delivered to the Mission 
Director, copies of the insurance policies required by this clause or 
satisfactory proof of the existence thereof, before such automobile(s) 
is operated within the cooperating country. The premium costs for such 
insurance shall not be a reimbursable cost under this contract.

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    (d) Claims for Private Personal Property Losses [For use in TCN 
contracts]. The contractor shall be reimbursed for private personal 
property losses in accordance with USAID Handbook 23, ``Overseas 
Support'', Chapter 10, or superseding ADS Chapter.

9. Travel and Transportation Expenses (JUL 1993)

    [For use in both CCN and TCN Contracts as appropriate].
    (a) General. The contractor will be reimbursed in currency 
consistent with the prevailing practice at post and at the rates 
established by the Mission Director for authorized travel in the 
cooperating country in connection with duties directly referable to work 
under this contract. In the absence of such established rates, the 
contractor shall be reimbursed for actual costs of authorized travel in 
the cooperating country if not provided by the cooperating government or 
the Mission in connection with duties directly referable to work 
hereunder, including travel allowances at rates prescribed by USAID 
Handbook 22, ``Foreign Service Travel Regulations'' or superseding ADS 
Chapters as from time to time amended. The Executive or Administrative 
Officer at the Mission may furnish Transportation Requests (TR's) for 
transportation authorized by this contract which is payable in local 
currency or is to originate outside the United States. When 
transportation is not provided by Government issued TR, the contractor 
shall procure the transportation, and the costs will be reimbursed. The 
following paragraphs provide specific guidance and limitations on 
particular items of cost.
    (b) International Travel. For travel to and from post of assignment 
the TCN contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the country of recruitment (or 
other location provided that the cost of such travel does not exceed the 
cost of the travel from the place of residence) to the post of duty in 
the cooperating country and return to place of residence in the country 
of recruitment (or other location provided that the cost of such travel 
does not exceed the cost of travel from the post of duty in the 
cooperating country to the contractor's residence) upon completion of 
services by the individual. Reimbursement for travel will be in 
accordance with USAID's established policies and procedures for its CCN 
and TCN direct-hire employees and the provisions of this contract, and 
will be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the cost of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the cooperating country (except for reasons beyond 
his/her control) costs of going to the post of duty are reimbursable 
hereunder but the cost of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract are not reimbursable under this contract 
for the contractor and his/her dependents. When travel is by economy 
class accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas) 
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (c) Local Travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country by the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (d) Indirect Travel for Personal Convenience of a TCN. When travel 
is performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (e) Limitation on Travel by TCN Dependents. Travel costs and 
allowances will be allowed

[[Page 129]]

for authorized dependents of the contractor and such costs shall be 
reimbursed for travel from place of abode in the country of recruitment 
to the assigned station in the Cooperating Country and return, only if 
the dependent remains in the Cooperating Country for at least 9 months 
or one-half of the required tour of duty of the contract, whichever is 
greater, except as otherwise authorized hereunder for education, 
medical, or emergency visitation travel. Dependents of the TCN 
contractor must return to the country of recruitment or home country 
within thirty days of the termination or completion of the contractor's 
employment, otherwise such travel will not be reimbursed under this 
contract.
    (f) Delays Enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routing. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (g) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee 
and, if the POV is being driven to or from the cooperating country as 
authorized under the contract, for each of the authorized dependents 
traveling in the POV, provided that the total cost of the mileage and 
per diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (h) Emergency and Irregular Travel and Transportation. [For TCNs 
only]. Emergency transportation costs and travel allowances while 
enroute, as provided in this section, will be reimbursed not to exceed 
amounts authorized by the Foreign Service Travel Regulations for FSN 
direct-hire employees in like circumstances under the following 
conditions:
    (1) The costs of going from post of duty in the cooperating country 
to another approved location for the contractor and authorized 
dependents and returning to post of duty, subject to the prior written 
approval of the Mission Director, when such travel is necessary for one 
of the following reasons:
    (i) Need for medical care beyond that available within the area to 
which contractor is assigned.
    (ii) Serious effect on physical or mental health if residence is 
continued at assigned post of duty.
    (iii) Serious illness, injury, or death of a member of the 
contractor's immediate family or a dependent, including preparation and 
return of the remains of a deceased contractor or his/her dependents.
    (2) Emergency evacuation when ordered by the principal U.S. 
Diplomatic Officer in the cooperating country. Transportation and travel 
allowances at safe haven and the transportation of household effects and 
automobile or storage thereof when authorized by the Mission Director, 
shall be payable in accordance with established Government regulations.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations when in his/her opinion 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (i) Country of Recruitment Travel and Transportation. [For TCNs 
only]. The contractor shall be reimbursed for actual transportation 
costs and travel allowances in the country of recruitment as authorized 
in the Schedule or approved in advance by the Contracting Officer or the 
Mission Director. Transportation costs and travel allowances shall not 
be reimbursed in any amount greater than the cost of, and time required 
for, economy-class commercial-scheduled air travel by the most 
expeditious route except as otherwise provided in paragraph (h) above, 
unless economy air travel is not available and the contractor adequately 
documents this to the satisfaction of the Contracting Officer in 
documents submitted with the voucher.
    (j) Rest and Recuperation Travel. [For TCNs only].
    If approved in writing by the Mission Director, the contractor and 
his/her dependents shall be allowed rest and recuperation travel on the 
same basis as direct-hire TCN employees and their dependents at the post 
under the local compensation plan.
    (k) Transportation of Personal Effects (Excluding Automobiles and 
Household Goods). [For TCNs only].
    (1) General. Transportation costs will be paid on the same basis as 
for direct-hire employees at post serving the same length tour of duty, 
as authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from contractor's residence in 
the country of recruitment or other location, as approved by the 
Contracting Officer (provided that the cost of transportation does not 
exceed the cost from the contractor's residence) to post of duty in the 
cooperating country and return to the country of recruitment or other 
location provided the cost of transportation of the

[[Page 130]]

personal effects of the contractor not to exceed the limitations in 
effect for such shipments for USAID direct-hire employees in accordance 
with the Foreign Service Travel Regulations in effect at the time 
shipment is made. These limitations may be obtained from the Contracting 
Officer. The cost of transporting household goods shall not exceed the 
cost of packing, crating, and transportation by surface common carrier.
    (2) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents. To permit the arrival of 
effects to coincide with the arrival of the contractor and dependents, 
consideration should be given to advance shipments of unaccompanied 
baggage. The contractor will be reimbursed for costs of shipment of 
unaccompanied baggage (in addition to the weight allowance for household 
effects) not to exceed the limitations in effect for USAID direct-hire 
employees in accordance with the Foreign Service Travel Regulations in 
effect when shipment is made. These limitations are available from the 
Contracting Officer. This unaccompanied baggage may be shipped as air 
freight by the most direct route between authorized points of origin and 
destination regardless of the modes of travel used.
    (l) Reduced Rates on U.S.-Flag Carriers. Reduced rates on U.S.-flag 
carriers are in effect for shipments of household goods and personal 
effects of USAID contractors between certain locations. These reduced 
rates are available provided the shipper furnishes to the carrier at the 
time of the issuance of the Bill of Lading documentary evidence that the 
shipment is for the account of USAID. The Contracting Officer will, on 
request, furnish to the contractor current information concerning the 
availability of a reduced rate with respect to any proposed shipment. 
The contractor will not be reimbursed for shipments of household goods 
or personal effects in amounts in excess of the reduced rates which are 
available in accordance with the foregoing.
    (m) Transportation of things. [For TCNs Only]. Where U.S. flag 
vessels are not available, or their use would result in a significant 
delay, the contractor may obtain a release from the requirement to use 
U.S. flag vessels from the Transportation Division, Office of 
Procurement, U.S. Agency for International Development, Washington, DC 
20523-1419, or the Mission Director, as appropriate, giving the basis 
for the request.
    (n) Repatriation Travel. [For TCNs Only]. Notwithstanding other 
provisions of this Clause 9, a TCN must return to the country of 
recruitment or to the TCN's home country within 30 days after 
termination or completion of employment or forfeit all right to 
reimbursement for repatriation travel. The return travel obligation 
[repatriation travel] assumed by the U.S. Government may have been the 
obligation of another employer in the area of assignment if the employee 
has been in substantially continuous employment which provided for the 
TCN's return to home country or country from which recruited.
    (o) Storage of household effects. [For TCNs Only]. The cost of 
storage charges (including packing, crating, and drayage costs) in the 
country of recruitment of household goods of regular employees will be 
permitted in lieu of transportation of all or any part of such goods to 
the Cooperating Country under paragraph (k) above provided that the 
total amount of effects shipped to the Cooperating Country or stored in 
the country of recruitment shall not exceed the amount authorized for 
USAID direct-hire employees under the Foreign Service Travel 
Regulations. These amounts are available from the Contracting Officer.

10. Payment (MAY 1997)

    [For use in both CCN and TCN Contracts].
    (a) Payment of compensation shall be based on written documentation 
supporting time and attendance which may be (1) maintained by the 
Mission in the same way as for direct-hire CCNs and TCNs or (2) the 
contractor may submit such written documentation in a form acceptable to 
Mission policy and practice as required for other personal services 
contractors and as directed by the Mission Controller or paying office. 
The documentation will also provide information required to be filed 
under cooperating country laws to permit withholding by USAID of funds, 
if required, as described in the clause of these General Provisions 
entitled Social Security and Cooperating Country Taxes.
    (b) Any other payments due under this contract shall be as 
prescribed by Mission policy for the type of payment being made.

11. Contractor-Mission Relationships (DEC 1986)

    [For use in both CCN and TCN Contracts].
    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails. Favorable relations 
between the Mission and the Cooperating Government as well as with the 
people of the cooperating country require that the contractor shall show 
respect for the conventions, customs, and institutions of the 
cooperating country and not become involved in any illegal political 
activities.
    (b) If the contractor's conduct is not in accordance with paragraph 
(a), the contract may be terminated pursuant to the General Provision of 
this contract, entitled ``Termination.'' If a TCN, the contractor 
recognizes

[[Page 131]]

the right of the U.S. Ambassador to direct his/her immediate removal 
from any country when, in the discretion of the Ambassador, the 
interests of the United States so require.
    (c) The Mission Director is the chief representative of USAID in the 
cooperating country. In this capacity, he/she is responsible for the 
total USAID Program in the cooperating country including certain 
administrative responsibilities set forth in this contract and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the U.S. Foreign Assistance Program. The contractor 
will be responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director and shall keep 
the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

12. Termination (NOV 1989)

    [For use in both CCN and TCN Contracts].
    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
cooperating country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calender days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any accrued, unused vacation leave, return transportation 
costs and travel allowances and transportation of unaccompanied baggage 
costs at the rates specified in the contract and subject to the 
limitations which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any accrued, unused vacation leave, but shall be entitled to return 
transportation, travel allowances, and unaccompanied baggage costs at 
rates specified in the contract and subject to the limitations which 
apply to authorized travel status.
    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

13. Allowances (DEC 1986)

    [For TCNs only].
    Allowances will be granted to the contractor and authorized 
dependents on the same basis as to direct-hire TCN employees at the post 
under the Post Compensation Plan. The allowances provided shall be paid 
to the contractor in the currency of the cooperating country or in 
accordance with the practice prevailing at the Mission.

14. Advance of Dollar Funds (DEC 1986)

    [For TCNs only].
    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to an USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapters.

15. Conversion of U.S. Dollars To Local Currency (DEC 1986)

    [For TCNs only].
    Upon arrival in the cooperating country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of one currency to 
another currency. This may include, but not be limited to, the 
conversion of said currency through the cognizant U.S. Disbursing 
Officer, or Mission Controller, as appropriate.

16. Post of Assignment Privileges (DEC 1986)

    [For TCNs only].

[[Page 132]]

    Privileges such as the use of APO, PX's, commissaries and officer's 
clubs are established at posts abroad pursuant to agreements between the 
U.S. and host governments. These facilities are intended for and usually 
limited to U.S. citizen members of the official U.S. Mission including 
the Embassy, USAID, Peace Corps, U.S. Information Services and the 
Military. Normally, the agreements do not permit these facilities to be 
made available to non-U.S. citizens if they are under contract to the 
United States Government. However, in those cases where the facilities 
are open to TCN contractor personnel, they may be used.

17. Release Of Information (DEC 1986)

    [For use in both CNN and TCN Contracts].
    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
contractor and all reports and recommendations hereunder shall be 
treated as privileged information by the contractor and shall not, 
without the prior written approval of the Contracting Officer, be made 
available to any person, party, or government, other than USAID, except 
as otherwise expressly provided in this contract.

18. Notices (DEC 1986)

    [For use in both CNN and TCN Contracts].
    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    (a) TO USAID: To the Mission Director of the Mission in the 
Cooperating Country with a copy to the appropriate Contracting Officer.
    (b) TO THE CONTRACTOR: At his/her post of duty while in the 
Cooperating Country and at the contractor's address shown on the Cover 
Page of this contract or to such other address as either of such parties 
shall designate by notice given as herein required.
    Notices hereunder shall be effective when delivered in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

19. Incentive Awards (DEC 1996)

    [For CNN and TCN Contracts].
    (a) All Cooperating Country National (CCN) Personal Services 
Contractors (PSCs) and Third Country Nationals (TCNs) of the Foreign 
Affairs Community are eligible for the Joint Embassy Incentive Awards 
Program. The program is administered by each post's (Embassy) Joint 
Country Awards Committee.
    (b) Meritorious Step Increases
    Meritorious step increases may be granted to CNNs and TCNs paid 
under the local compensation plan provided the granting of such 
increases is the general practice locally.

20. Training (JUL 1993)

    [For CNN and TCN Contracts].
    The contractor may be provided job related training to develop 
growth potential, expand capabilities and increase knowledge and skills. 
The training may be funded under the personal services contract.

21. Medical Evacuation (MEDEVAC) Services (JUL 1993)

    [For TCN Contracts Only].
    (a) The contractor agrees to obtain medevac service coverage for 
himself/herself and his/her authorized dependents while performing 
personal services abroad. Coverage shall be obtained pursuant to the 
terms of the contract between USAID and USAID's medevac service provider 
unless exempted in accordance with paragraph (b).
    (b) The following are exempted from the requirements in paragraph 
(a):
    (i) Contractors and their dependents with a health insurance program 
that includes sufficient medevac coverage as approved by the Contractor 
Officer.
    (ii) Contractors and their dependents located at Missions where the 
Mission Director makes a written determination to waive the requirement 
for such coverage based on findings that the quality of local medical 
services or other circumstances obviate the need for such coverage.
    (c) Information on the current medevac service provider, including 
application procedures, is available from the Contracting Officer.

                             13. FAR Clauses

    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.

1. Covenant Against Contingent Fees 52.203-5
2. Disputes 52.233-1 (Alternate 1)
3. Preference for U.S. Flag Air Carriers 52.247-63
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:

1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 552.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5

[[Page 133]]

14. Limitation of Liability--Services 52.246-25

[62 FR 42929, Aug. 11, 1997]

[[Page 135]]



                CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
801             Veterans Affairs Acquisition Regulations 
                    System..................................         137
802             Definitions of words and terms..............         153
803             Improper business practices and personal 
                    conflicts of interest...................         153
804             Administrative matters......................         155
                   SUBCHAPTER B--ACQUISITION PLANNING
805             Publicizing contract actions................         156
806             Competition requirements....................         156
807             Acquisition planning........................         159
808             Required sources of supplies and services...         160
809             Contractor qualifications...................         161
811             Describing agency needs.....................         165
812             Acquisition of commercial items.............         170
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
813             Simplified acquisition procedures...........         172
814             Sealed bidding..............................         173
815             Contracting by negotiation..................         179
816             Types of contracts..........................         181
817             Special contracting methods.................         182
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
819             Small business and small disadvantaged 
                    business concerns.......................         184
822             Application of labor laws to Government 
                    acquisitions............................         190
824             Protection of privacy and freedom of 
                    information.............................         191
825             Foreign acquisition.........................         191
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
828             Bonds and insurance.........................         195
829             Taxes.......................................         197

[[Page 136]]

831             Contract cost principles and procedures.....         198
832             Contract financing..........................         201
833             Protests, disputes, appeals.................         203
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
836             Construction and architect-engineer 
                    contracts...............................         208
837             Service contracting.........................         214
                    SUBCHAPTER G--CONTRACT MANAGEMENT
842             Contract administration.....................         218
846             Quality assurance...........................         220
847             Transportation..............................         223
849             Termination of contracts....................         224
                     SUBCHAPTER H--CLAUSES AND FORMS
852             Solicitation provisions and contract clauses         227
853             Forms.......................................         254
           SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS
870             Special procurement controls................         257
871             Loan guaranty and vocational rehabilitation 
                    and counseling programs.................         259
873             Simplified acquisition procedures for 
                    health-care resources...................         264

[[Page 137]]



                          SUBCHAPTER A_GENERAL





PART 801_VETERANS AFFAIRS ACQUISITION REGULATIONS SYSTEM--Table of Contents




Sec.
801.000 Scope of part.

               Subpart 801.1_Purpose, Authority, Issuance

801.101 Purpose.
801.103 Authority.
801.104 Applicability.
801.104-70 Exclusions.

                      Subpart 801.2_Administration

801.201-1 The two councils.

            Subpart 801.3_Department Acquisition Regulations

801.301 Policy.
801.301-70 Paperwork Reduction Act requirements.
801.303 Publication and codification.
801.304 Department control and compliance procedures.

              Subpart 801.4_Deviations From the FAR or VAAR

801.403 Individual deviations.
801.404 Class deviations.

      Subpart 801.6_Career Development, Contracting Activity, and 
                            Responsibilities

801.601 General.
801.602 Contracting officers.
801.602-2 Responsibilities.
801.602-3 Ratification of unauthorized commitments.
801.602-70 Legal/technical review requirements to be met prior to 
          contract execution.
801.602-71 Processing contracts for legal/technical review.
801.602-72 Documents to be submitted for legal review.
801.602-73 Certification by reviewing official.
801.602-74 Results of General Counsel's legal review.
801.603 Selection, appointment, and termination of appointment.
801.603-1 General.
801.603-70 Representatives of contracting officers.
801.603-71 Representatives of contracting officers; receipt of 
          equipment, supplies, and nonpersonal services.
801.670 Special and limited delegation.
801.670-1 Issue of Government bills of lading--transportation of remains 
          of deceased beneficiaries.
801.670-2 Issue of Government bills of lading--transportation of 
          property.
801.670-3 Medical, dental, and ancillary service.
801.670-4 National Cemetery System.
801.670-5 Letters of agreement.
801.680 Contracting authority of the Inspector General.
801.690 VA Contracting Officer Certification Program.
801.690-1 Definitions.
801.690-2 General.
801.690-3 Responsibility for administration of Contracting Officer 
          Certification Program (COCP).
801.690-4 Selection.
801.690-5 Appointment.
801.690-6 Termination.
801.690-7 Interim appointment provisions.
801.690-8 Distribution of SF 1402, Certificate of Appointment.
801.690-9 Post appointment maintenance of certifications. [Reserved]

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12583, Mar. 29, 1984, unless otherwise noted.



801.000  Scope of part.

    This part prescribes general policies and background regarding the 
Veterans Affairs Acquisition Regulation (VAAR). It includes information 
regarding the maintenance and administration of the VAAR and includes 
procedures for deviations from the VAAR and the Federal Acquisition 
Regulation (FAR).

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31961, Aug. 3, 1989; 63 
FR 69217, Dec. 16, 1998]



               Subpart 801.1_Purpose, Authority, Issuance



801.101  Purpose.

    (a) This subpart establishes Chapter 8, Veterans Affairs Acquisition 
Regulation, of Title 48--Federal Acquisition Regulation System, Code of 
Federal Regulations.

[[Page 138]]

    (b) The VAAR must be utilized in conjunction with the FAR. The VAAR 
cannot be utilized by itself.

[49 FR 12583, Mar. 29, 1984, as amended at 63 FR 69217, Dec. 16, 1998]



801.103  Authority.

    The VAAR and any amendments thereto are issued by the Secretary of 
Veterans Affairs as provided by 38 U.S.C. 501 and the Federal Property 
and Administrative Services Act of 1949 (40 U.S.C. 486(c)).

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31961, Aug. 3, 1989. 
Redesignated and amended at 63 FR 69217, Dec. 16, 1998]



801.104  Applicability.

    (a) The FAR and the VAAR apply to all acquisitions of the Department 
(including construction) made with appropriated funds and procurements 
made with Supply Fund monies (38 U.S.C. 8121).
    (b) The FAR and VAAR will apply to the special procurement programs 
authorized by Title 38 U.S. Code (Viz., Veterans Canteen Service and the 
Loan Guaranty programs), to the extent indicated in the VAAR.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 40062, Sept. 29, 1989. 
Redesignated and amended at 63 FR 69217, Dec. 16, 1998]



801.104-70  Exclusions.

    The FAR and VAAR will not apply to purchases and contracts which 
utilize General Post Funds when such regulations would infringe upon a 
donor's prerogative to specify the exact item to be purchased and/or the 
source of supply.

[49 FR 12583, Mar. 29, 1984. Redesignated at 67 FR 49257, July 30, 2002]



                      Subpart 801.2_Administration



801.201-1  The two councils.

    A designee of the Office of Acquisition and Materiel Management will 
represent the Department of Veterans Affairs on the CAA (Civilian Agency 
Acquisition) Council.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



            Subpart 801.3_Department Acquisition Regulations



801.301  Policy.

    (a) VAAR, amendments and interim changes thereto will be issued by 
the Secretary of Veterans Affairs after necessary reviews by cognizant 
VA officials.
    (b) Implementing procedures, instructions and guidelines necessary 
to implement the VAAR and the FAR may be issued by the heads of 
contracting activities. Such issuances may include delegations of 
authority, review and approval for acquisition action up to the dollar 
level delegated to that contracting activity by this regulation as well 
as providing procedural guidance for users. Such issuances will be the 
minimum necessary to provide a logical implementation of FAR and VAAR 
requirements and will be internal to the facility, i.e., it will not 
specify reporting/recordkeeping requirements for the public (see 
801.301-70(b)).

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 28559, July 31, 1987; 
54 FR 31962, Aug. 3, 1989; 61 FR 20491, May 7, 1996]



801.301-70  Paperwork Reduction Act requirements.

    (a) It is the policy of the Government to keep to the minimum the 
amount of recordkeeping and reporting required of the public. This 
objective applies to the Department of Veterans Affairs acquisition 
system.
    (b) Contractors will not be requested to maintain systems of records 
unless prescribed in FAR or VAAR.
    (1) A deviation to this prohibition may be processed in accordance 
with 801.403 in order to allow the contracting officer to require 
contractor reporting or recordkeeping beyond that prescribed in the FAR 
and VAAR. The request for deviation will clearly specify what 
information or recordkeeping will be required and why it is required. 
The request will be signed by the head of the contracting activity.
    (2) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (95) will review the request and upon concurrence will 
likewise submit the request to Office of Management

[[Page 139]]

and Budget (OMB) for approval as prescribed by the Paperwork Reduction 
Act of 1980. If approved, the Deputy Assistant Secretary for Acquisition 
and Materiel Management will send the approval back to the requester 
with the OMB clearance number.
    (c) In accordance with the Paperwork Reduction Act of 1980 (Pub. L. 
96-511), the reporting or recordkeeping provisions that are included in 
this VAAR have been approved by OMB and have been given the following 
approval numbers:

------------------------------------------------------------------------
                                                             Current OMB
   48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
809.504(d).................................................    2900-0418
819.7003...................................................    2900-0445
836.606-71.................................................    2900-0422
852.207-70.................................................    2900-0590
852.219-70.................................................    2900-0584
852.211-70.................................................    2900-0587
852.211-74.................................................    2900-0588
852.211-75.................................................    2900-0586
852.211-77.................................................    2900-0585
852.214-70.................................................    2900-0593
852.236-72.................................................    2900-0422
852.236-79.................................................    2900-0422
852.236-80 (Alt. I)........................................    2900-0422
852.236-82 through 852.236-85..............................    2900-0422
852.236-88.................................................    2900-0422
852.236-89.................................................    2900-0622
852.236-91.................................................    2900-0623
852.237-7..................................................    2900-0590
852.237-71.................................................    2900-0590
852.270-03.................................................    2900-0589
871.201-2..................................................    2900-0416
------------------------------------------------------------------------


[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 790, Jan. 7, 1985; 54 
FR 31962, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 63 FR 17335, Apr. 
9, 1998; 63 FR 69217, Dec. 16, 1998; 67 FR 49258, July 30, 2002; 68 FR 
3467, Jan. 24, 2003]



801.303  Publication and codification.

    The VAAR is codified as chapter 8 of title 48, Code of Federal 
Regulations. Codified changes to the VAAR will be published in the 
Federal Register. The Deputy Assistant Secretary for Acquisition and 
Materiel Management arranges distribution of the issues to VA 
contracting activities and the Office of Acquisition and Materiel 
Management should be notified of changes to the distribution list.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



801.304  Department control and compliance procedures.

    Office of Acquisition and Materiel Management is responsible for 
ensuring that the VAAR and amendments thereto are developed as 
prescribed by the FAR.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



              Subpart 801.4_Deviations From the FAR or VAAR



801.403  Individual deviations.

    (a) When contracting officers consider it necessary to deviate from 
the policies set forth in the FAR or VAAR, a request for authority to do 
so will be submitted to the Deputy Assistant Secretary for Acquisition 
and Materiel Management (93). The request will clearly set forth the 
circumstances warranting the deviation and nature of the deviation.
    (b) When a deviation in an individual case is authorized by the 
Deputy Assistant Secretary for Acquisition and Materiel Management, the 
authorization will be filed in the purchase or contract file, whichever 
is appropriate.

[54 FR 31962, Aug. 3, 1989, as amended at 61 FR 20491, May 7, 1996]



801.404  Class deviations.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is responsible for determining the need for class deviations. 
If determined necessary, the Deputy Assistant Secretary for Acquisition 
and Materiel Management will request deviation authority from the Deputy 
Secretary through the Senior Procurement Executive as well as complying 
with the provisions in FAR 1.404.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 49016, Dec. 29, 1987; 
54 FR 31962, Aug. 3, 1989]



      Subpart 801.6_Career Development, Contracting Activity, and 
                            Responsibilities



801.601  General.

    (a) This subpart establishes general contracting officer authority 
and responsibility. However, other provisions

[[Page 140]]

in both the FAR and the VAAR contain some contracting officer 
limitations and it is incumbent upon each contracting officer to be 
aware of those limitations.
    (b) Personnel, other than those designated in 801.602, may determine 
quality, quantity and delivery requirements for items or services to be 
purchased. However, under no circumstances will individuals who have not 
been delegated contracting authority commit the Government for purchases 
of supplies, equipment or services. Individuals making such commitments 
may be held financially liable for the amount of the obligation.



801.602  Contracting officers.

    (a) Except as otherwise provided by law, VA regulations, VAAR and 
FAR, the authority vested in the Secretary to do the following is 
delegated to the Senior Procurement Executive and is further delegated 
to the Procurement Executive:
    (1) Execute, award, and administer contracts, purchase orders, and 
other agreements (including interagency agreements) for the expenditure 
of funds involved in the acquisition of personal property, service 
(including architect-engineer services), construction, issuing 
Government bills of lading, and for the sale of personal property, 
leases, sales agreements and other transactions;
    (2) Prescribe and publish acquisition policies and procedures;
    (3) Establish clear lines of contracting authority;
    (4) Manage and enhance career development of the procurement work 
force;
    (5) Examine, in coordination with the Office of Federal Procurement 
Policy, the procurement system to determine specific areas where 
Governmentwide performance standards should be established and applied, 
and to participate in the development of Governmentwide procurement 
policies, regulations and standards; and,
    (6) Oversee the competition advocate program.
    (b) Further delegation to execute, award, and administer contracts, 
purchase orders and other agreements will be made in accordance with the 
Contracting Officer Certification Program as prescribed in (VAAR) 48 CFR 
801.670 and 801.690.

[61 FR 1526, Jan. 22, 1996]



801.602-2  Responsibilities.

    (a) In the administration of a contract, many problems can and do 
arise that make the advice and assistance of the General Counsel either 
desirable or necessary. The final decision as to the action to be taken, 
however, must be made by the contracting officer in each instance. To 
reduce to the absolute minimum the possibility of litigation resulting 
from his/her decision, the contracting officer shall, except as provided 
in paragraph (c) of this section, submit the problem through channels in 
sufficient detail to the General Counsel for advice or assistance.
    (b) While legal review and concurrence of the General Counsel is 
required prior to a default termination, in some cases where a quick 
response is necessary, this review can be expedited by express mailing 
or telefaxing the default letter and related documents which are 
required to make an evaluation directly to the General Counsel (025). 
The default termination letter should contain, at a minimum, the 
following:
    (1) The proposed termination (FAR 49.102);
    (2) An explanation of what necessitated the default, including the 
reasons why the contracting officer considers the contractor to be in 
default;
    (3) A statement that the factors set forth in FAR 49.402-3(f) have 
been fully considered; and
    (4) Final decision language and appeal rights.
    (c) Contracts containing a mutual termination clause may be 
terminated without reference to the General Counsel.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



801.602-3  Ratification of unauthorized commitments.

    (a) Contracting officers shall not ratify contractual commitments 
made by other VA personnel without prior approval as prescribed below. 
Such unauthorized commitments include commitments made by other 
contracting

[[Page 141]]

officers which exceed their respective contracting authority as well as 
unauthorized commitments made by individuals lacking contracting 
authority.
    (1) At field stations, for supplies, services and construction, the 
approving authority is the director of the field facility concerned.
    (2) For central office contracting officers, for supplies, services, 
and construction, the approving authorities are the heads of the 
administrations and directors of the staff offices concerned, and the 
Deputy Assistant Secretary for Acquisition and Materiel Management.
    (3) For acquisitions of leasehold interest in real property the 
approving authority is:
    (i) The Chief Facilities Management Officer, Office of Facilities 
Management, for 1-5,000 square feet, and for 1-100 parking spaces 
costing less than $50,000 per annum.
    (ii) The Assistant Secretary for Management for 5,001-20,000 square 
feet, and for parking spaces exceeding 100 which cost less than $100,000 
per annum.
    (iii) The Deputy Secretary for 20,001 square feet and above, and for 
parking spaces exceeding 100 which cost more than $100,000 per annum.
    (4) This approval authority shall not be redelegated.
    (b) Requests received by contracting officers for ratification of 
commitments made by personnel lacking contracting authority shall be 
processed as follows:
    (1) The individual who made the unauthorized contractual commitment 
shall furnish the contracting officer all records and documents 
concerning the commitment and a complete written statement of facts, 
including, but not limited to, a statement as to why the procurement 
office was not utilized, why the proposed contractor was selected and a 
list of other sources considered, description of work to be performed or 
products to be furnished, estimated or agreed contract price, citation 
of appropriation available, and a statement of whether the contractor 
has commenced performance.
    (2) The contracting officer will review the file and forward it to 
the approving authority specified in paragraph (a) of this section with 
any comments or information which should be considered in evaluation of 
the request for ratification. If legal review is desirable, the 
approving authority will coordinate the request for ratification with 
the Office of the General Counsel or the District Counsel, as 
appropriate.
    (3) If ratification is authorized, the file will be returned to the 
contracting officer for issuance of a purchase order or contract, as 
appropriate.
    (c) In the case of otherwise proper contract awards made by 
contracting officers in excess of the limits of their delegated 
authority, the need for ratification will be brought to the attention of 
the head of the contracting activity. That individual will take such 
action as may be indicated to preclude future instances of such awards.

[54 FR 31962, Aug. 3, 1989, as amended at 61 FR 11585, Mar. 21, 1996; 63 
FR 69217, Dec. 16, 1998]



801.602-70  Legal/technical review requirements to be met prior to 
contract execution.

    (a) The following categories of proposed contracts and agreements 
will be reviewed and concurred in by the Office of Acquisition and 
Materiel Management prior to contract execution. (Additionally, the 
Office of Acquisition and Materiel Management may, when considered 
necessary, request preaward technical review regardless of dollar 
value). Office of General Counsel legal reviews of such proposed 
contracts and agreements will be performed when requested and determined 
necessary by the Office of Acquisition and Materiel Management. 
(Excluded from this requirement is the National Acquisition Center which 
will perform its own technical reviews at the thresholds herein 
prescribed. The National Acquisition Center will receive preaward legal 
review of solicitation from the General Counsel staff located in Hines, 
Illinois).
    (1) All negotiated and sealed bid contracts (except as specified in 
(a)(2) and (a)(3)) exceeding $250,000 in either appropriated or 
nonappropriated funds. This includes indefinite quantity contracts when 
expenditures of $250,000 or more can reasonably be expected, and 
multiyear contracts in which $250,000

[[Page 142]]

or more will be expended over the life of the contract. (Note also that 
multiyear contracts also require review any time the cancellation 
ceiling exceeds 20 percent of the contract amount (see 817.1)).
    (2) All fixed price, sealed bid construction contracts involving 
$500,000 or more in either appropriated or unappropriated funds.
    (3) All 8(a) contracts exceeding $500,000.
    (4) All proposed agreements and contracts coming within the purview 
of one or more of the following:
    (i) Contracts for insurance.
    (ii) Utility service agreements involving $50,000 or more.
    (iii) Contracts for consulting services (see subpart 837.2) and 
management and professional services (see 837.271).
    (iv) Contracts for research or research and development involving 
$50,000 or more.
    (v) Automatic data processing equipment, when purchased from other 
than a Federal Supply Schedule contract, involving $50,000 or more.
    (vi) Competitive contracts exceeding $1.5 million and noncompetitive 
contracts exceeding $500,000 for the acquisition of scarce medical 
specialist services acquired under the authority of 38 U.S.C. 7409.
    (vii) Competitive contracts exceeding $1.5 million and 
noncompetitive contracts exceeding $500,000 for the acquisition of 
health-care resources acquired under the authority of 38 U.S.C. 8151-
8153.
    (viii) Agreements with other Federal agencies regardless of dollar 
value. Those agreements of $5,000 or more will be forwarded to General 
Counsel for legal review. VA/DoD Sharing Agreements executed under the 
authority of Public Law 97-174 (38 U.S.C. 8111) and sections 201-206 of 
Public Law 102-585 are exempt from review by the Office of Acquisition 
and Materiel Management; however, they must be approved in accordance 
with VA Manual M-1, Part I, Chapter 1, Section XI.
    (ix) Contracts for ADP software exceeding $10,000.
    (x) ADP software licensing agreements for ADP software exceeding 
$10,000 (all software licensing agreements require technical review).
    (5) All proposed letter contracts and ensuing formal contracts 
involving expenditures of $5,000 or more.
    (6) Any proposed agreement that is unique, novel or unusual 
(including all consignment agreements, regardless of anticipated dollar 
value--except those established and provided in Federal Supply Schedule 
Contracts).
    (7) Step One of two-step sealed bid procurements when the 
anticipated value is more than $200,000.
    (b) The following categories of proposed contractual actions require 
the concurrence of the General Counsel:
    (1) Contract modifications, terminations (including final decision 
(cure) letters), disputes and claims in excess of $25,000 ($50,000 for 
contracts awarded by the Office of Facilities Management).
    (2) Contract modifications granting a time extension of more than 20 
days.
    (3) Assignment of claims.
    (4) Proposed awards to other than the low evaluated bidder/offeror.
    (c) In addition to the requirements of paragraphs (a) and (b) of 
this section, the following require review and concurrence of the 
General Counsel:
    (1) Changes or revisions to all contract clauses.
    (2) Changes or revisions to prescribed VA contract forms.
    (d) Utility construction and connection contracts which are 
developed in the Office of Facilities Management and cost $50,000 or 
more will be be reviewed by General Counsel and the Chief Facilities 
Management Officer, Office of Facilities Management.
    (e) When legal assistance is requested by any Central Office 
contracting activity, the contracting officer will brief the General 
Counsel regarding the facts and points of issue to facilitate prompt 
resolution.
    (f) With regard to solicitations and contracts awarded and 
administered by the Central Office contracting activities, the General 
Counsel will be requested to participate in conferences where it is 
expected that legal problems or contract provisions will be considered, 
and in meetings attended by legal representatives of private parties or 
other Government agencies. Assigned procurement counsel will be 
requested to participate in the drafting

[[Page 143]]

of correspondence involving controversial or sensitive contractual 
matters of a significant nature.
    (g) All protests against award will be reviewed by General Counsel 
in accordance with the provisions specified in 48 CFR 833.103.
    (h) Excluded from these legal review requirements are:
    (1) Agreements, licenses, easements, or deeds dealing with 
management, sale, or lease of properties acquired by VA as a result of 
liquidation of guaranteed, direct, acquired or vendee loans.
    (2) Orders or contracts for procurement of leased telecommunications 
systems, installation of and changes to telephone PBX systems at 
individual Department of Veterans Affairs locations or orders issued 
under GSA area-wide contracts with the American Telephone and Telegraph 
Company and local telephone companies.
    (i) If a change order (unilateral agreement) is essential for the 
logical process of the contract, the Office of Acquisition and Materiel 
Management, Acquisition Review Division shall be called prior to issuing 
the document. (This requirement does not apply to change orders issued 
by the Office of Facilities Management.)
    (j) The following apparent low responsive and responsible bids/
offers with the respective solicitations will be submitted for the 
review of the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Review Division, prior to award:
    (1) Negotiated contract actions in the Office of Facilities 
Management which exceed $2 million.
    (2) Bids/offers for construction contracts to be awarded by VHA 
facilities which exceed $5 million.
    (3) Bids/offers for service contracts, including A/E, which exceed 
$2 million, and
    (4) Bids/offers for supply contracts which exceed $5 million in 
total evaluated cost (excluding FSS contracts awarded by VA National 
Acquisition Center).

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23066, June 25, 1986; 52 FR 28559, July 31, 1987; 52 FR 49016, Dec. 
29, 1987; 54 FR 31963, Aug. 3, 1989; 55 FR 31391, Aug. 2, 1990; 58 FR 
31914, June 7, 1993; 61 FR 11585, Mar. 21, 1996; 68 FR 3468, Jan. 24, 
2003]



801.602-71  Processing contracts for legal/technical review.

    (a) All competitively awarded solicitations requiring legal and/or 
technical review will have such reviews completed prior to opening of 
bids or proposals. The contracting officer will fully evaluate technical 
and legal review comments prior to opening bids or proposals. Potential 
bidders/offerors will be advised of changes to the solicitation by 
amendment and afforded sufficient time for evaluation prior to opening 
of bids or offers.
    (b) Veterans Health Administration (VHA) Field Facilities, VA 
National Acquisition Center. (1) Proposed contracts or agreements 
specified in 801.602-70(a) (1), (2), (3), (4) (iii) through (v), (5), 
(6) and (7) will be forwarded by the contracting officer directly to the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Review Division. The Deputy Assistant Secretary for 
Acquisition and Materiel Management will review the submissions and when 
applicable, forward them directly to the General Counsel (025).
    (2) Proposed contracts and agreements for scarce medical specialist 
services or for the mutual use or exchange of use of health-care 
resources, as specified in 801.602-70(a)(4)(vi) and (a)(4)(vii), will be 
forwarded to Central Office in accordance with Veterans Health 
Administration directives and VA Manual M-1, Part 1, Chapter 34, for 
review and submission to the Office of the General Counsel (025).
    (3) Proposed interagency agreements specified in 801.602-
70(a)(4)(viii) will be forwarded by the approving official to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Program 
Development and Evaluation Division. The Deputy Assistant Secretary for 
Acquisition and Materiel Management will review the submissions and 
forward them directly to the General Counsel (025).
    (4) Proposed facility-level modification specified in 801.607-70(b) 
will be forwarded by the contracting officer to General Counsel (025), 
through the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Review Division.

[[Page 144]]

    (5) Proposed final decisions or settlement agreements specified in 
801.602-70(b) will be forwarded by the contracting officer directly to 
the Deputy Assistant Secretary for Acquisition and Materiel Management. 
The Deputy Assistant Secretary for Acquisition and Materiel Management 
will review the submissions and forward them to the General Counsel 
(025).
    (6) Proposed revisions to contract clauses specified in 801.602-
70(c) will be forwarded by the contracting officer directly to the 
Deputy Assistant Secretary for Acquisition and Materiel Management. If 
concurred in, the Deputy Assistant Secretary for Acquisition and 
Materiel Management will forward them directly to the General Counsel.
    (c) Veterans Benefits Administration field facilities. (1) All 
proposed State reimbursement contracts and Guidance Center and 
Vocational Rehabilitation contracts which are anticipated to ultimately 
involve the expenditure of $100,000 or more, will be forwarded by the 
contracting officer directly to the Director, Vocational Rehabilitation 
and Education Service, for review and approval. The Director, Vocational 
Rehabilitation and Education Service will review the submissions and 
forward them to the General Counsel.
    (2) Any other proposed agreement or contract specified in 801.602-
70(a) will be forwarded by the facility Director to the Chief Benefits 
Director for Field Operations (201) for coordination with Director(s) of 
the concerned service(s) and submission to the General Counsel.
    (3) Any other element of contracting falling within 801.602-70 (b) 
and (c) will be processed in accordance with paragraph (b)(2) of this 
section.
    (d) Central office. Any element of contracting prescribed for legal 
review in 801.602-70 originating in central office, will be submitted 
for legal review by the contracting officer, or approving official in 
the case of agreements with other Government agencies through the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Review Division. (Except that in the case of Office of Facilities 
Management contracts, a selected sample of contracts will be processed 
through the Office of Acquisition and Materiel Management, Acquisition 
Review Division. All other Office of Facilities Management contract 
actions identified in 801.602-70 will be sumitted for legal review in 
accordance with Office of Facilities Management procedures).
    (e) All bids/offers required to be reviewed prior to award in 
accordance with 801.602-70(j), will be forwarded to the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition Review 
Division, with a cover letter identifying:
    (1) The date in which the award is anticipated;
    (2) Responsibility determination results or efforts ongoing;
    (3) Determinations of price reasonableness;
    (4) Explanation of proposed award to other than low responsible 
bidder/offeror.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 28559, July 31, 1987; 
52 FR 49017, Dec. 29, 1987; 54 FR 31963, Aug. 3, 1989; 54 FR 40062, 
Sept. 29, 1989; 61 FR 11585, Mar. 21, 1996; 68 FR 3468, Jan. 24, 2003]



801.602-72  Documents to be submitted for legal review.

    The following documents are to be submitted for legal review:
    (a) For proposed construction contracts, one copy of all 
solicitation documents, excluding drawings. These documents will be 
submitted no later than at the time they are furnished to prospective 
bidders. Where feasible, these documents should be submitted for review 
prior to the time they are furnished to prospective bidders.
    (b) For proposed contracts and agreements for scarce medical 
specialist services or for the mutual use or exchange of use of health-
care resources, as specified in 801.602-70(a)(4)(vi) and (a)(4)(vii), 
the documents referred to in VA Manual M-1, Part 1, Chapter 34.
    (c) For all other proposed contracts and agreements, a copy of the 
documents to be used in the solicitation and/or award of contract, 
including any other documents which support the proposed procurement 
action, e.g., justification and approval in the case of noncompetitive 
procurement. Solicitation documents will be submitted no later than at 
the time they are mailed

[[Page 145]]

to prospective bidders. Where feasible, these documents should be 
submitted for review prior to the time they are mailed to prospective 
bidders.
    (d) For contract modifications described in 801.602-70(b) and 
801.602-71(b)(4) and (d):
    (1) A draft of the proposed modification. This shall be prepared on 
an SF (Standard Form) 30, Amendment of Solicitation/Modification of 
Contract, and shall specify the exact language to be used. Changes in 
work, time and cost must be specifically described;
    (2) A statement describing the need for the changed work. This 
should also be accompanied by any backup documentation, including a copy 
of the general statement of work in the original contract plus any 
existing contract language which will be modified. Include a statement 
that the work covered by the proposed modification is or is not within 
the original scope of the contract, setting forth fully the facts 
considered in reaching the conclusion;
    (3) A statement containing an analysis on what necessitated the 
modification, e.g., design error, technical change, medical center 
requirements;
    (4) The contracting officer's technical representative (COTR) 
technical evaluation of the proposed change;
    (5) For construction modifications and, where applicable for 
architect-engineer (A/E) modifications, a copy of drawings which the 
COTR has marked up to delineate the proposed changed work. If 
appropriate, include a copy of the pertinent technical specifications. 
Whenever a proposed contract modification involves numerous changes to 
drawings and specifications for a Central Office project, the drawings 
and specifications will be available for review in the office of the 
Project Director;
    (6) Costing information including:
    (i) The contractor's cost proposal in the format required by the 
contract.
    (ii) The COTR's independent cost evaluation.
    (iii) The A/E's independent cost evaluation.
    (iv) Contracting officer's Price Negotiation Memorandum (PNM) in 
accordance with VAAR 815.808. For Office of Facilities Management 
contracts, the PNM may be submitted by either the contracting officer or 
COTR.
    (v) For A/E contracts, a listing of the fees awarded in the original 
contract and previous modifications.
    (vi) For A/E working drawing contracts, a statement regarding the 
actual or estimated cost of the original construction and any estimated 
change to the overall project cost as a result of the proposed 
modification.
    (vii) Any other relevant costing information, such as independent 
market research, which was or will be used as negotiation criteria.
    (7) A concurrence on the memorandum from the appropriate office 
indicating that funds are available or a statement concerning the 
actions which must be taken to secure the required funds; and
    (8) The names and telephone numbers of the contracting officer and 
COTR.
    (e) For bids/offers submitted as required by 801.602-70(j), the 
following documents will be provided:
    (1) Request for contract action, including justification of need.
    (2) The solicitation.
    (3) Abstracts of bids/offers.
    (4) Price negotiations memorandum, if applicable.
    (5) Justification and approval (see FAR 6.303), if applicable.
    (6) Documents relevant to determination of contractor's 
responsibility.
    (7) Documents relevant to price reasonableness.

[49 FR 12583, Mar. 29, 1984, as amended at 51 FR 23066, June 25, 1986; 
52 FR 28559, July 31, 1987; 52 FR 49017, Dec. 29, 1987; 54 FR 31964, 
Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996; 
61 FR 20491, May 7, 1996; 68 FR 3468, Jan. 24, 2003]



801.602-73  Certification by reviewing official.

    In submitting proposed agreements or contracts received from field 
stations to the General Counsel, the Central Office reviewing officials 
will state on the transmittal memorandum or within the file that the 
proposal conforms to the Federal Acquisition Regulations and Department 
of Veterans Affairs Acquisition Regulations to the best of their 
knowledge.

[49 FR 12583, Mar. 29, 1984, as amended at 61 FR 11586, Mar. 21, 1996]

[[Page 146]]



801.602-74  Results of General Counsel's legal review.

    (a) Upon completion of the review, the General Counsel will advise 
the appropriate Central Office activity or contracting officers as to 
whether the proposal was approved as submitted or provide them with the 
recommended changes. The appropriate Central Office activity will advise 
the contracting officer as to whether: (1) The submission was approved 
as is, or (2) provide a copy of the changes required. Where changes are 
required, the contracting officer will take immediate action to amend 
the solicitation document.
    (b) The General Counsel's review will be completed as expeditiously 
as possible, with due regard to those procurement actions where 
circumstances dictate an unusually short period for completing 
procurement action.



801.603  Selection, appointment, and termination of appointment.



801.603-1  General.

    The policy and procedures for the selection, appointment, and 
termination of appointment of contracting officers are established in 
VAAR 801.690, The Contracting Officer Certification Program, and as 
otherwise provided in VAAR 801.670 and its subsections.

[52 FR 24010, June 26, 1987]



801.603-70  Representatives of contracting officers.

    (a) In carrying out the responsibilities of FAR 1.602-2, the 
contracting officer may designate another Government contracting 
officer, or other Government employees, or another contractor:
    (1) To furnish technical guidance and advice or generally supervise 
the work performed under the contract. Such designations will be in 
writing and will define the scope and limitation of the representative's 
authority; and, will be addressed to the designee with a copy to be 
forwarded to the contractor except as indicated in 801.603-71. Except as 
provided in paragraph (c) of this section representatives will not be 
authorized to make any commitments or changes which will affect the 
price, quantity, quality or delivery terms. (All changes to a contract 
must be authorized by a contracting officer acting within the scope of 
his/her authority.)
    (2) To take actions authorized in the contract, such as issue 
delivery orders, reject unsatisfactory items, order replacement of such 
items (materials or services) and, when necessary, declare contractor in 
default on specific delivery orders. Except for blood, this authority 
will be delegated only to other Government contracting officers under 
centralized indefinite delivery type contracts and the contract will so 
state. Centralized contracts for blood will provide that contracting 
officers at ordering offices are authorized to designate representatives 
and alternate representatives to place delivery orders subject to the 
same restrictions stated in paragraph (a)(3) of this section.
    (3) To place oral or other informal delivery orders for items such 
as, but not limited to, bread, milk, and blood against local indefinite 
delivery type contracts on which blanket purchase arrangements have been 
established and funds have been obligated. The designation of 
representatives and alternates will be in writing and will define the 
scope and limitations of the representative's authority, and will be 
addressed to the employee(s) with a copy to the contractor. Such 
designations will be made only by the prime contracting officer and are 
not redelegable.
    (b) In the administration of research and development contracts, any 
representative appointed pursuant to this section must be acceptable 
both to the contracting officer and the administration head or staff 
office director concerned. When it is necessary to designate a 
representative under this paragraph (b), the clause in 852.270-1 will be 
observed.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 24010, June 26, 1987; 
54 FR 40062, Sept. 29, 1989]



801.603-71  Representatives of contracting officers; receipt of equipment, 
supplies, and nonpersonal services.

    (a) Except as provided in paragraphs (b), (c) and (d) of this 
section, any contracting officer may, without prior notification to the 
contractor or vendor,

[[Page 147]]

designate the Chief, Storage and Distribution Section, or other 
competent personnel, to represent him/her in receiving and inspecting 
supplies, equipment and services at his/her facility. Duties such as, 
but not limited to, the following will be performed by these designees:
    (1) The inspection and certification as to compliance with the 
quality and quantity requirements of the purchase order or contract; and
    (2) Inspection of supplies and equipment for condition and quantity 
and the acceptance of supplies, equipment, and services, based on 
quality inspection made by other authorized representatives.
    (b) The Director, Library Services, VA Central Office, and the 
Chief, Library Service, at a field facility, are designated the 
representatives of the contracting officer to receive, inspect and 
accept library books, newspapers, and periodicals. Purchase documents 
will specify that delivery will be made direct to the library.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996; 63 FR 69217, Dec. 
16, 1998]



801.670  Special and limited delegation.

    The authority vested in the Secretary to execute, award and 
administer contracts, purchase orders and other agreements for the 
expenditure of funds involved in the acquisition of the specific 
services set forth in this 801.670 and its subsections, is hereby 
delegated to the Senior Procurement Executive for further delegation to 
those employees appointed or designated to the positions specified in 
these subsections.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31964, Aug. 3, 1989]



801.670-1  Issue of Government bills of lading--transportation of remains 
of deceased beneficiaries.

    The Chief, Medical Administration Service (MAS), or the person 
designated by the medical center director to perform MAS functions, at a 
Department of Veterans Affairs medical center, is delegated authority to 
issue and to sign as ``Issuing Officer,'' Government bills of lading for 
the shipment of the remains of beneficiaries expiring in a Department of 
Veterans Affairs medical center.

[49 FR 12583, Mar. 29, 1984. Redesignated at 52 FR 24010, June 26, 1987, 
as amended at 63 FR 69217, Dec. 16, 1998]



801.670-2  Issue of Government bills of lading--transportation of property.

    (a) Authority to issue and sign Government bills of lading for the 
transportation of supplies, material, and equipment is delegated to the 
following:
    (1) Chief, Warehouse Section, VA Forms and Publications Depot.
    (2) Traffic Manager, Office of Acquisition and Materiel Management, 
Central Office.
    (b) The employees named in paragraph (a) of this section may 
designate one or more of their subordinates as a contracting officer; 
and, authority is hereby delegated to such subordinates to issue and 
sign Government bills of lading for the transportation of supplies, 
material, and equipment. Designations will be in writing and 
specifically set forth the scope and limitation of the designee's 
authority.

[49 FR 12583, Mar. 29, 1984. Redesignated at 52 FR 24010, June 26, 1987, 
and amended at 54 FR 31964, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 
63 FR 69217, Dec. 16, 1998]



801.670-3  Medical, dental, and ancillary service.

    (a) The Chief of Staff, the physician assigned the responsibility 
for the ambulatory care function, and Chief, Medical Administration 
Service (MAS), or the person designated by the medical center director 
to perform MAS funtions, at a Department of Veterans Affairs facility 
are delegated authority to execute authorizations for medical, dental, 
and ancillary services under $10,000 per authorization when such 
services are not available from existing contracts or agreements. Forms 
specified in part 853 of this chapter will be used for this purpose and 
when ordering such services from existing contracts.
    (b) The contracting officers named in paragraph (a) of this section 
may designate one or more of their subordinates to execute the forms for 
purposes stated in paragraph (a) of this section.

[[Page 148]]

Designations will be in writing and will specifically set forth the 
scope and limitations of the designee's authority.

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985. 
Redesignated at 52 FR 24010, June 26, 1987, and amended at 54 FR 31964, 
Aug. 3, 1989; 63 FR 69217, Dec. 16, 1998]



801.670-4  National Cemetery System.

    Authority for the National Cemetery System to procure supplies, 
equipment and nonpersonal services is delegated as follows:
    (a) Authority to issue and sign Government bills of lading for the 
transportation of headstones and markers is further delegated to:
    (1) Chief, Centralized Contracting Division, Office of Operations 
Support.
    (2) Freight Rate Specialist, Office of Operations Support.
    (b) Authority to procure, in emergency situations when the servicing 
supply organization cannot be utilized, and in accordance with the 
provisions of FAR Part 13, supplies, equipment, and nonpersonal services 
(including construction) required for the operation of national 
cemeteries is delegated to:
    (1) Director, National Cemetery System, and Director, Office of 
Field Operations, National Cemetery System.
    (2) Director, National Cemetery Area Office.
    (c) Authority to procure items and nonpersonal services up to $300 
per transaction for the operation of national cemeteries is delegated to 
the Director of each national cemetery. The authority is to be used only 
in emergency situations when the servicing supply organization cannot be 
utilized, and the method of purchase is limited to the use of SF 44, 
Purchase Order--Invoice--Voucher, (FAR 13.306).

[49 FR 12583, Mar. 29, 1984. Redesignated and amended at 52 FR 24010, 
June 26, 1987; 54 FR 31964, Aug. 3, 1989; 63 FR 69217, Dec. 16, 1998]



801.670-5  Letters of agreement.

    (a) Authority to execute, award, and administer letters of agreement 
(subject to the limitation prescribed in 837.2) is delegated to the 
following:
    (1) General Counsel.
    (2) Deputy Assistant Secretary for Human Resources Management.
    (3) Under Secretary for Health.
    (4) Under Secretary for Benefits.
    (5) Under Secretary for Memorial Affairs.
    (6) Deputy Assistant Secretary for Acquisition and Materiel 
Management
    (7) Inspector General.
    (8) Directors, Regional Medical Education Centers (limited to 
obtaining instructors and training pursuant to section 7471 of Title 38, 
United States Code).
    (9) Directors, Domiciliary and Medical Centers and Research and 
Development Service Directors authorized to sign for the Chief Research 
and Development Officer (limited to obtaining peer review of research 
(see 837.2)).
    (b) The contracting officers named in paragraphs (a) (1) through (7) 
of this section may designate one or more subordinates, and authority to 
execute letters of agreement is hereby delegated to such subordinates. 
Such subordinates will be no more than one organizational level below 
the contracting officers designated in paragraph (a) of this section, 
except that the Under Secretary for Health may designate the Veterans 
Integrated Service Network Directors. All such designations will be in 
writing, will specifically state the scope and limitations of the 
designees' contractual authority, and will also specifically prohibit 
further delegation by the designees. Copies of the delegation will be 
submitted to the Office of Acqusition and Materiel Management, 
Acquisition Administration Team.
    (c) Copies of all letters of agreement issued by the designees 
identified in paragraphs (a) and (b) of this section will be forwarded 
to the servicing contracting activity in order that the procurement 
action may be entered into the Federal Procurement Data System.

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985. 
Redesignated at 52 FR 24010, June 26, 1987, and further amended at 54 FR 
31964, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 
1996; 63 FR 69218, Dec. 16, 1998]



801.680  Contracting authority of the Inspector General.

    (a) As provided by section 6(a) of Pub. L. 95-452 (October 12, 
1978), the Inspector General is authorized to enter into contracts and 
other arrangements for audits, studies, analyses, and other

[[Page 149]]

services with public agencies and with private persons, and to make such 
payments as may be necessary to carry out the provisions of the Act, to 
the extent and in such amounts as may be provided in advance by 
appropriations Acts.
    (b) In exercising the special authority provided in paragraph (a) of 
this section, the Inspector General may request the assistance of the 
servicing Acquisition and Materiel Management Service in developing 
appropriate contract or agreement documents.
    (c) If, in the opinion of the Inspector General, a reason to 
exercise the special authority does not exist, the services required by 
the Inspector General shall be obtained by the servicing Acquisition and 
Materiel Management Service or the local purchase and contract activity 
in accordance with the provisions of FAR and VAAR.
    (d) Contracts entered into under the authority of paragraph (a) of 
this section are subject to the provisions of the Federal Acquisition 
Regulation. In addition, such contracts are subject to those provisions 
of VAAR which implement and supplement the FAR on matters other than 
those stemming from or related to delegations of the Secretary's 
contracting authority (e.g., management controls and approvals specified 
in subpart 837.2 will not apply to contract actions under the contract 
authority of the Inspector General).

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 54 
FR 31964, Aug. 3, 1989; 61 FR 11586, Mar. 21, 1996; 63 FR 69218, Dec. 
16, 1998]



801.690  VA Contracting Officer Certification Program.

    The policy and procedures for the VA-wide Contracting Officer 
Certification Program (COCP) are established in this section and 
subsections.

[52 FR 24010, June 26, 1987]



801.690-1  Definitions.

    (a) Head of the Contracting Activity (HCA) means an individual who 
has overall responsibility for managing the procurement program assigned 
to the activity. HCA designations are prescribed in VAAR 802.100. The 
HCA has the authority to appoint contracting officers with authority to 
conduct procurements of up to and including $25,000 or the maximum order 
limitation for orders placed against established contracts, and 
terminate such appointments.
    (b) Recommending official means an individual who is authorized by 
VAAR 801.690 and its subsections to recommend to a designating official 
that an individual be appointed as a contracting officer.
    (c) Designating official means an individual who is authorized to 
appoint and terminate contracting officers.
    (d) Contracting Officer Certification Board (COCB) means the group 
of Department officials, listed in VAAR 801.690-3(c), that evaluates and 
recommends to the designating official individuals as contracting 
officers at the Intermediate and Senior levels of authority, which 
levels are described in VAAR 801.690-2(c).
    (e) Contracting Officer Certification Program (COCP) means a program 
designated by Department management for the selection, appointment, and 
termination of appointment of contracting officers. Training, 
experience, education, performance, and conduct are the objective 
criteria reviewed prior to appointment as contracting officer.
    (f) Qualifications means an employee's record of training, 
experience, education, performance, and conduct which are reviewed prior 
to designation as contracting officer. These ``qualifications'' are not 
identical, supplemental, or related to the position qualification 
requirements published by the Office of Personnel Management in Handbook 
X-118.
    (g) Appointment means the delegation of authority to any employee to 
enter into, administer or terminate contracts, and make related 
determinations and findings. Appointment provisions are identified in 
801.690-5.
    (h) Certification means an evaluation that the candidate has the 
experience, education and training to perform properly the duties of a 
contracting officer.
    (i) Selection means that an employee has been appointed or certified 
as a contracting officer. The ``selection'' process is not identical, 
supplemental or related to any process whereby an

[[Page 150]]

employee is placed into a position by any competitive action (merit 
promotion) or noncompetitive action (reassignment, reinstatement). 
Selection provisions are identified in 801.690-4.
    (j) Termination means the revocation of contracting authority of a 
contracting officer by the designating official. Termination provisions 
are identified in 801.690-6.
    (k) Acquisition Training Program (ATP) means a program designed to 
provide contracting officers with classroom knowledge to further develop 
their acquisition skills.

[52 FR 24010, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989]



801.690-2  General.

    (a) The VA COCP applies to all programs of the Department of 
Veterans Affairs except for those contracting officers appointed 
pursuant to the Inspector General Act (Pub. L. 95-452).
    (b) A certification of appointment is not required for contracting 
officers designated in 801.670 who exercise special and limited 
delegations of authority.
    (c) The COCP is based on three levels of authority:
    (1) Basic. Expenditures up to and including $25,000 or the maximum 
order limitation for orders placed against established contracts.
    (2) Intermediate. Expenditures up to and including $100,000 for 
negotiation and $1,000,000 for sealed bids.
    (3) Senior. Unlimited.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989]



801.690-3  Responsibility for administration of Contracting Officer 
Certification Program (COCP).

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (A&MM). The Deputy Assistant Secretary for A&MM is 
responsible for:
    (1) Administering the COCP to ensure that the certification board 
evaluates, recommends acceptance, rejection, or termination of 
applicants at the Senior and Intermediate Levels according to the 
requirements of the COCP.
    (2) Developing additional training and the level of certification as 
required by the COCP.
    (3) Serving as the designating official, and in that capacity 
appoints or terminates contracting officers at the Senior and 
Intermediate Levels of authority.
    (b) Heads of contracting activities (HCA). The HCA is responsible 
for:
    (1) Implementing and maintaining an effective and efficient program 
for the procurement of personal property and nonpersonal services 
assigned to the activity.
    (2) Establishing adequate controls to ensure compliance with 
applicable laws and regulations.
    (3) Appointing or terminating appointments of contracting officers 
at the Basic Level within their activity. Each HCA will establish 
procedures for the appointment or termination of appointment of 
contracting officers at the Basic Level to include maintenance of 
records on individual training and experience, as well as appointment 
and termination actions.
    (4) Recommending to the designating official the appointment or 
termination of appointment of contracting officers at the Intermediate 
and Senior Levels of authority based on candidate qualifications, as 
well as a valid organizational need.
    (c) Contracting Officer Certification Board (COCB). The COCB may 
receive, evaluate, and recommend to the designating official, candidates 
for contracting officer positions at the Intermediate and Senior Levels. 
The board will be chaired by the Associate Deputy Assistant Secretary 
for Acquisitions, OA&MM, and membership will consist of:
    (1) Chief Administrative Officer (VHA) (or designee),
    (2) Deputy Facilities Management Officer (or designee),
    (3) Acquisition Training Officer, and
    (4) Additional members to be selected on an ad hoc basis depending 
on the organizational need for certified contracting officers.
    (d) Acquisition Training Officer (ATO). The ATO in the OA&MM will 
serve as the Executive Secretary to the COCB. The ATO will coordinate 
all requests for certification with the COCB. Upon the decision by the 
Deputy Assistant Secretary for A&MM, the ATO will respond to the HCA 
with a copy of the

[[Page 151]]

appropriate action. In addition, the ATO will maintain records on the 
development and administration of the Contracting Officer Certification 
Program (COCP) as well as the records on individual training, 
certification and termination actions at the Intermediate and Senior 
Contracting Officer Level. The ATO will identify all records created and 
maintained and ensure they are scheduled for disposal by the Office of 
Acquisition and Materiel Management Records Officer.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989; 63 FR 69218, Dec. 16, 1998]



801.690-4  Selection.

    (a) Contracting officers (CO) shall be appointed only in those 
instances where a valid organizational need for certified personnel can 
be demonstrated. Such factors to be considered in making these 
assessments include complexity of work, volume of actions and 
organizational structure.
    (b) Requests for appointment of contracting officers will be made in 
writing. Request for appointments at the Senior and Intermediate Level 
will be signed by the HCA and forwarded to the Acquisition Training 
Officer (90) for processing. The request for appointment will include at 
a minimum a justification of need, and a qualification statement for the 
candidate. Requests for appointment of HCAs as contracting officers will 
be made at one level above the head of the contracting activity.
    (c) The COCB and HCAs (limited to Basic Level) will evaluate 
candidates for CO certifications based on training, experience, and 
performance, and consideration of academic education, in addition to 
meeting standards of ethical conduct and avoiding conflicts of interest. 
Minimum qualifications of contracting officers are based on a 
combination of training, experience, and performance with consideration 
of relevant academic credit or degrees earned. The following minimum 
requirements are established for designation of contracting officers:
    (1) Basic level. (i) Training--Forty hours of basic acquisition or 
small purchase training that can be accomplished on the job or in 
formalized courses of instruction. If on-the-job training is conducted, 
it must be documented for the record and include a brief description of 
the duties and responsibilities that comprised that training.
    (ii) Experience. Three years of progressive assignments in an 
acquisition related field within the last five years and demonstrated 
broad technical ability related to acquisition.
    (iii) Performance--Satisfactory rating.
    (iv) Education (desired)--High school diploma.
    (2) Intermediate level--(i) Training--(A) ATP Level I--Basic 
Acquisition.
    (B) ATP Level II--Advanced Contract Administration.
    (C) ATP Level III-- Cost and Price Analysis.

ATP courses may include tests or other assessments to indicate what 
information has been learned by the student. An assessment will then be 
made to determine if additional formal or on-the-job training is needed.
    (ii) Experience. Two years of progressive work assignments in an 
acquisition related field leading to broader technical ability within 
the last five years.
    (iii) Performance. Satisfactory rating.
    (iv) Education (desired). Associate degree.
    (3) Senior level--(i) Training--(A) ATP Level I-- Fundamentals of 
Acquisition.
    (B) ATP Level II-- Advanced Contract Administration.
    (C) ATP Level III-- Cost and Price Analysis.
    (D) ATP Level IV-- Contract Negotiation.


ATP courses may include tests or other assessments to indicate what 
information has been learned by the student. An assessment will then be 
made to determine if additional formal or on-the-job training is needed.
    (ii) Experience. Three years of progressive assignments in an 
acquisition related field within the last five years and demonstrated 
broad technical ability related to acquisition.
    (iii) Performance. Satisfactory rating.
    (iv) Education (desired). Bachelor degree.

[[Page 152]]

    (d) Other training courses may be substituted for the prescribed 
core curriculum provided that the training meets equivalent content and 
difficulty per course. Recommending officials must fully document and 
justify equivalent courses when recommending candidates for appointment 
as contracting officers. The COCB will review and determine if 
equivalent courses may be appropriately substituted. HCAs are 
responsible for providing their subordinates with advice and assistance 
necessary to complete required training.
    (e) Candidates who achieve additional academic credit beyond the 
desired education level may be eligible to receive credit toward 
experience for this additional academic credit. Substitutions of this 
nature must be fully justified and documented by the recommending 
official and forwarded to the COCB for evaluation and appropriate 
action. Candidates will receive a maximum credit of 1 year of experience 
when substitutions are approved for the Intermediate and Senior Level. A 
maximum credit of 6 months may be approved by the HCA for the Basic 
Level.
    (f) Candidates who do not meet the minimum qualifications 
established in this section, may be granted interim appointments in 
accordance with 801.690-7.
    (g) The Privacy Act of 1974 applies to the information collected 
during the selection and appointment of contracting officers.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989; 63 
FR 69218, Dec. 16, 1998]



801.690-5  Appointment.

    (a) The recommending official may recommend candidates for 
appointment as contracting officers to the designating official. Only 
the Deputy Assistant Secretary for A&MM or the HCA is authorized to sign 
the Standard Form 1402, Certification of Appointment.
    (b) Specific limitations imposed upon the authority of contracting 
officer shall be set forth in certificates of appointment or otherwise 
conveyed in writing to appoint contracting officers.
    (c) Appointment of COs at specific levels does not preclude 
imposition of administrative reviews, approvals, or other limitations 
for program management purposes.

[52 FR 24012, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989]



801.690-6  Termination.

    (a) The designating official may revoke the appointment of a 
contracting officer at any time after evaluation of written 
recommendations by an HCA or other management officials based on:
    (1) The fact that the need for the appointment no longer exists;
    (2) Personnel actions such as resignation or retirement;
    (3) Cause. (Cause covers such areas as, e.g., unsatisfactory 
performance, official misconduct pending criminal or administrative 
investigations, failure to meet training requirements.)
    (b) Situations involving termination of contracting authority of 
contracting officers for cause should be discussed with the servicing 
Human Resorces Service to determine impact, if any, on the employee's 
continued employment.

[54 FR 31965, Aug. 3, 1989, as amended at 63 FR 69218, Dec. 16, 1998]



801.690-7  Interim appointment provisions.

    (a) Individuals who do not meet all minimum qualifications as 
described in 801.690-4, may be appointed on an interim basis to ensure 
availability of procurement support. Requests to the designating 
official for interim appointments shall include information on the 
candidate's training, experience, performance, education, and 
justification for the interim appointment. All minimum training 
requirements shall be scheduled for individuals issued interim 
appointments and completed within a reasonable period of time. At least 
two required courses or equivalents will normally be completed each year 
after the date of appointment. Failure to complete minimum training 
requirements within the time frame may result in the loss of the interim 
appointment.
    (b) If training requirements are met during the interim appointment 
period

[[Page 153]]

through the ATP, a permanent warrant may be issued by the designating 
official upon satisfactory completion of all the required courses. Where 
equivalent courses have been completed, appropriate documentation 
(copies of course certificates) must be submitted before a permanent 
warrant can be issued.
    (c) Instances that may require the use of interim appointments may 
include, but are not limited to the following:
    (1) Organization changes;
    (2) Sudden extreme increases in the number of procurement requests; 
and
    (3) New hires or promotions into GS-1102 series.
    (d) Interim appointments shall normally not exceed a 2 year period.

[52 FR 24012, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989]



801.690-8  Distribution of SF 1402, Certificate of Appointment

    (a) The original SF 1402, Certificate of Appointment, shall be 
provided to the appointed contracting officer and displayed at the 
contracting officer's duty station.
    (b) A copy of the certificate will be filed in the delegation of 
authority file and another copy will be furnished to the fiscal 
activity.
    (c) Each certificate will be serially numbered.

[54 FR 31965, Aug. 3, 1989]



801.690-9  Post appointment maintenance of certifications. [Reserved]



PART 802_DEFINITIONS OF WORDS AND TERMS--Table of Contents






                        Subpart 802.1_Definitions



802.100  Definitions

    (a) In VA, head of the contracting activity means the Director, 
Acquisition Management Service, Central Office; Deputy Assistant 
Secretary for Facilities, Central Office; Director, Building and Supply 
Service, Central Office; Director, Publications Service, Central Office; 
Director, Monument Service, Central Office; Director, Vocational 
Rehabilitation and Education Service, Central Office; Director, Loan 
Guaranty Service, Central Office; Director, VA Marketing Center; Chief, 
Supply Service, at a field facility; and the Director, Regional Office.
    (b) Procurement Executive means the Deputy Assistant Secretary for 
Acquisition and Materiel Management.
    (c) Senior Procurement Executive means the Assistant Secretary for 
Management (004). The Senior Procurement Executive is responsible for 
the management direction of the VA acquisition systems.

(38 U.S.C. 501 and 40 U.S.C. 486(c))

[52 FR 24013, June 26, 1987, as amended at 52 FR 28559, July 31, 1987; 
54 FR 40062, Sept. 29, 1989; 61 FR 1527, Jan. 22, 1996]



PART 803_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 803.1_Safeguards

Sec.
803.101 Standards of conduct.
803.101-3 Department regulations.

       Subpart 803.2_Contractor Gratuities to Government Personnel

803.203 Reporting suspected violations of the Gratuities Clause.

         Subpart 803.3_Reports of Suspected Antitrust Violations

803.303 Reporting suspected antitrust violations.

                      Subpart 803.4_Contingent Fees

803.405 Misrepresentations or violations of the Convenant Against 
          Contingent Fees.

             Subpart 803.5_Other Improper Business Practices

803.502 Subcontractor kickbacks.

  Subpart 803.70_Contractor Responsibility To Avoid Improper Business 
                                Practices

803.7000 Policy.
803.7001 Display of VA hotline poster.
803.7002 Contract clause.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12592, Mar. 29, 1984, unless otherwise noted.

[[Page 154]]



                        Subpart 803.1_Safeguards



803.101  Standards of conduct.



803.101-3  Department regulations.

    (a) Standards of conduct for all VA employees, including contracting 
officials, are found in 38 CFR part 0.
    (b) Requirements for employee financial disclosure are contained in 
38 CFR part 0, subpart B. Generally contracting officers and all 
supervisory contracting officials must file financial disclosure 
statements.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 20491, May 7, 1996; 63 
FR 69218, Dec. 16, 1998; 64 FR 30442, June 8, 1999]



       Subpart 803.2_Contractor Gratuities to Government Personnel



803.203  Reporting suspected violations of the Gratuities Clause.

    (a) Suspected violations of the Gratuities Clause will be reported 
to the head of the contracting activity through the contracting officer. 
The head of the contracting activity will confirm that violations are 
evident and that reporting these violations to officials designated in 
paragraph (b) would be warranted.
    (b) When violations of the Gratuities Clause warrant actions 
described in FAR 3.204(c) the head of the contracting activity will 
request instructions from the VA General Counsel (025) through the 
Deputy Assistant Secretary for Acquisition and Materiel Management.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 1527, Jan. 22, 1996]



         Subpart 803.3_Reports of Suspected Antitrust Violations



803.303  Reporting suspected antitrust violations.

    Instances of possible antitrust violations will be reported by 
procurement activities in accordance with FAR 3.303 to the Deputy 
Assistant Secretary for Acquisition and Materiel Management for review 
and submission to the General Counsel, who will determine whether or not 
to submit the case to the Attorney General.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 1527, Jan. 22, 1996]



                      Subpart 803.4_Contingent Fees



803.405  Misrepresentations or violations of the Covenant Against Contingent 
Fees.

    Before taking any administrative action the heads of the contracting 
activity shall consult with their respective VA District Counsels. 
Contracting officers in Central Office shall consult with the Office of 
the General Counsel.

[49 FR 12592, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 61 
FR 20491, May 7, 1996. Redesignated at 63 FR 69218, Dec. 16, 1998]



             Subpart 803.5_Other Improper Business Practices



803.502  Subcontractor kickbacks.

    Suspected violations of the Anti-kickback Act will be reported to 
the Office of the General Counsel.



  Subpart 803.70_Contractor Responsibililty To Avoid Improper Business 
                                Practices

    Source: 57 FR 58718, Dec. 11, 1992, unless otherwise noted.



803.7000  Policy.

    It is Department of Veterans Affairs' (VA) policy to contract with 
companies that conduct business with the highest degree of integrity and 
honesty. To demonstrate this commitment to integrity and honesty, 
contractors should have standards of conduct and internal control 
systems that are designed to promote such standards, to facilitate the 
timely discovery and disclosure of improper conduct in connection with 
Government contracts, and to assure that corrective measures are 
promptly instituted and carried out. For example, a contractor's system 
of management controls should provide for--
    (a) A written code of business ethics and standards of conduct and 
an ethics training program for all employees;

[[Page 155]]

    (b) A mechanism, such as a hotline, by which employees may report 
suspected instances of improper conduct, and instructions that encourage 
employees to make such reports;
    (c) Disciplinary action for improper conduct;
    (d) Periodic reviews of company business practices, procedures, 
policies, and internal controls for compliance with standards of conduct 
and the special requirements of Government contracting;
    (e) Internal and/or external audits as appropriate;
    (f) Timely reporting to appropriate Government officials of any 
suspected or possible violations of law in connection with Government 
contracts or any other irregularities in connection with such contracts; 
and
    (g) Full cooperation with any Government agencies responsible for 
either investigation or corrective actions.

[57 FR 58718, Dec. 11, 1992, as amended at 63 FR 69218, Dec. 16, 1998]



803.7001  Display of VA hotline poster.

    Contractors who are awarded a VA contract of--
    (a) $500,000 or more for supplies or services, or
    (b) $3 million or more for construction, and who have not 
established an internal reporting mechanism and program, as described in 
803.7000(b), shall be required to display prominently in common work 
areas within business segments performing work under VA contracts, the 
VA hotline poster prepared by the VA Office of Inspector General.



803.7002  Contract clause.

    The contracting officer shall insert the clause at 852.203-71, 
Display of VA hotline poster, in solicitations and contracts expected to 
equal or exceed the dollar thresholds established in 803.7001.



PART 804_ADMINISTRATIVE MATTERS--Table of Contents






                    Subpart 804.1_Contract Execution

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



804.101  Contracting officer's signature.

    In the event a contracting officer's name and title has been typed, 
stamped or printed on the contract and the contracting officer is not 
available to sign the contract, a designee may sign for the contracting 
officer. Such designee must be a contracting officer as specified in 
801.602 and must have specific contracting authority to cover the 
contract to be signed.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 20492, May 7, 1996]

[[Page 156]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 805_PUBLICIZING CONTRACT ACTIONS--Table of Contents




              Subpart 805.2_Synopses of Proposed Contracts

Sec.
805.202 Exceptions.
805.205 Special situations.
805.207 Preparation and transmittal of synopses.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



              Subpart 805.2_Synopses of Proposed Contracts



805.202  Exceptions.

    In accordance with FAR 5.202, the contract actions in 806.302-5 do 
not require synopsizing.

[51 FR 23066, June 25, 1986 and 52 FR 28559, July 31, 1987; 61 FR 20492, 
May 7, 1996]



805.205  Special situations.

    Contracting officers are hereby delegated authority to procure paid 
advertising in a daily newspaper circulated in the local area, for the 
purpose of publicizing a proposed procurement of architect-engineer 
services expected not to exceed $10,000.

[49 FR 12592, Mar. 29, 1984, as amended at 63 FR 69218, Dec. 16, 1998]



805.207  Preparation and transmittal of synopses.

    At such time as an architect-engineer evaluation board is ready to 
advertise for architect-engineer services, it must establish the 
geographic area within which architect-engineer firms (including joint 
ventures) will be considered. The area determined must be large enough 
to assure selection of three to five firms highly qualified for the 
particular project involved, but not so large as to make the evaluation 
process unduly burdensome.

[49 FR 12592, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23066, June 25, 1986; 52 FR 28559, July 31, 1987; 54 FR 40063, Sept. 
29, 1989; 61 FR 20492, May 7, 1996]



PART 806_COMPETITION REQUIREMENTS--Table of Contents




           Subpart 806.3_Other Than Full and Open Competition

Sec.
806.302-3 Industrial mobilization; or experimental, development, or 
          research work.
806.302-5 Authorized or required by statute.
806.302-7 Public interest.
806.304 Approval of the justification.

         Subpart 806.4_Sealed Bidding and Competitive Proposals

806.401 Sealed bidding and competitive proposals.

                   Subpart 806.5_Competition Advocates

806.501 Requirement.
806.502 Duties and responsibilities.
806.570 Planning requirements.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 51 FR 23066, June 25, 1986, unless otherwise noted.



           Subpart 806.3_Other Than Full and Open Competition



806.302-3  Industrial mobilization; or experimental, development, or 
research work.

    Research authorized to be conducted by the Department of Veterans 
Affairs in accordance with the provisions of title 38, U.S. Code, will 
be negotiated under the authority of 41 U.S.C. 253(c)(3) (except 
prosthetics research authorized by 38 U.S.C. 7303 will be negotiated 
under the authority of 41 U.S.C. 253(c)(5), regardless of the dollar 
amount). Such acquisitions require justifications and approvals required 
by FAR 6.303 and 48 CFR 806.304.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996; 63 
FR 69218, Dec. 16, 1998]



806.302-5  Authorized or required by statute.

    (a) Scarce Medical Specialist contracts negotiated under the 
authority of 38 U.S.C. 7409 are approved for other than full and open 
competition only

[[Page 157]]

when such contracts are with institutions affiliated with the Department 
of Veterans Affairs pursuant to 38 U.S.C. 7302. The justification and 
approval requirements of FAR 6.303 and 806.304 are still applicable.
    (b) Contracts or agreements for the mutual use or exchange of use of 
health-care resources, consisting of commercial services, the use of 
medical equipment or space, or research, negotiated under the authority 
of 38 U.S.C. 8151-8153, are approved for other than full and open 
competition only when such contracts or agreements are with institutions 
affiliated with the Department of Veterans Affairs, pursuant to 38 
U.S.C. 7302, with medical practice groups or other approved entities 
associated with affiliated institutions (entities will be approved if 
determined legally to be associated with affiliated institutions), or 
with blood banks, organ banks, or research centers. The justification 
and approval requirements of FAR 6.303 and VAAR 806.304 do not apply to 
such contracts or agreements.
    (c) Contracts or agreements for the mutual use or exchange of use of 
health-care resources, consisting of commercial services or the use of 
medical equipment or space, negotiated under the authority of 38 U.S.C. 
8151-8153, and not acquired under the authority of paragraph (b) of this 
section, may be conducted without regard to any law or regulation that 
would otherwise require the use of competitive procedures for procuring 
resources, provided the procurement is conducted in accordance with the 
simplified procedures contained in (VAAR) 48 CFR part 873. The 
justification and approval requirements of FAR 6.303 and 806.304 shall 
apply to such contracts or agreements conducted on a sole source basis.
    (d) Various other sections of Title 38, United States Code, 
authorize the Secretary to enter into certain contracts, and certain 
types of contracts, without regard to any other provision of law. The 
justification and approval requirements specified in FAR 6.303 and 
806.304 are still applicable. VA contracting officers entering into 
contracts using other than competitive procedures for any of the 
following items or services, estimated to cost in excess of the 
simplified acquisition threshold, will cite, in addition to 41 U.S.C. 
253(c)(5), the appropriate section of Title 38, United States Code, as 
their authority to do so.
    (1) Contracts for orthopedic and prosthetic appliances and related 
services including research. 38 U.S.C. 8123.
    (2) Contracts to purchase or sell merchandise, equipment, fixtures, 
supplies and services for the operation of the Veterans Canteen Service. 
38 U.S.C. 7802.
    (3) Contracts or leases for the operation of parking facilities 
established under the authority of 38 U.S.C. 8109(b), provided that the 
establishment, operation, and maintenance of such facilities have been 
authorized by the Secretary or designee. 38 U.S.C. 8109(f).
    (4) Contracts for laundry and other common services such as the 
purchase of steam, may be noncompetitively negotiated with non-profit, 
tax-exempt, educational, medical, or community institutions, when 
specifically approved by the Secretary or designee and when such 
services are not reasonably available from private commercial sources. 
38 U.S.C. 8122(c).
    (5) Contracts or agreements with public or private agencies for 
services or translators. 38 U.S.C. 513.
    (6) Contracts for nursing home care. 38 U.S.C. 1720.

[51 FR 23066, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
54 FR 40063, Sept. 29, 1989; 61 FR 20492, May 7, 1996; 63 FR 69218, Dec. 
16, 1998; 68 FR 3468, Jan. 24, 2003]



806.302-7  Public interest.

    Use of 41 U.S.C. 253(c)(7) to support contract award using other 
than full and open competition will require a D&F prepared in accordance 
with FAR subpart 1.7 and VAAR subpart 801.7 and signed by the Secretary. 
The D&F will be prepared by the contracting officer and submitted by the 
head of contracting activity (Subpart 802.1) to the Agency Competition 
Advocate (806.501). The submission will include:
    (a) The date of expected contract award (Note: Congress must be 
notified 30 days prior to award), and

[[Page 158]]

    (b) A justification prepared by the contracting officer in 
accordance with FAR 6.303.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996]



806.304  Approval of the justification.

    (a) Approvals of justifications as specified in FAR 6.304, prepared 
in accordance with FAR 6.303, will be approved as follows:
    (1) For a proposed contract not exceeding $100,000, one contracting 
level above the contracting officer (see Subpart 801.6). However, if the 
contracting officer is also the head of the contracting activity 
approval will be made by:
    (i) The medical center director for acquisitions at Veterans Health 
Administration (VHA) medical facilities, or
    (ii) The Agency Competition Advocate (806.501(a)) in all other 
cases.
    (2) For a proposed contract over $100,000 but not exceeding 
$1,000,000, by the Contracting Activity Competition Advocate 
(806.501(b)). However, if the Contracting Activity Competition Advocate 
is also the contracting officer, approval will be made by:
    (i) The medical center director for acquisitions at VHA medical 
facilities, or
    (ii) The Agency Competition Advocate in all other cases.
    (3) For a proposed contract over $1,000,000 but not exceeding 
$10,000,000 by the Agency Competition Advocate (806.501(a)).
    (4) For a proposed contract over $10,000,000 by the Senior 
Procurement Executive (See 802.100).
    (b) Class justifications as specified in FAR 6.304(c), will be 
approved by the Agency Competition Advocate regardless of dollar amount.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989; 61 FR 20492, May 7, 1996; 63 FR 69218, 
Dec. 16, 1998]



         Subpart 806.4_Sealed Bidding and Competitive Proposals



806.401  Sealed bidding and competitive proposals.

    Contracting officers shall solicit sealed bids if the contract is 
expected to exceed the small purchase limitation or expected to exceed 
$1,000 for contracts made for repairs to property acquired by VA under 
38 U.S.C. Chapter 37 and the criteria in FAR 6.401(a) are met. The 
contract file shall include any findings by the contracting officer that 
sealed bidding is not appropriate.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989]



                   Subpart 806.5_Competition Advocates



806.501  Requirement.

    (a) The Associated Deputy Assistant Secretary for Acquisitions (90A) 
is designated as the Agency Competition Advocate.
    (b) The Executive Director and Chief Operating Officers, VA National 
Acquisition Center, or designee, will serve as the Competition Advocate 
for the Center. Each head of the contracting activity (see Subpart 
802.1) or designee will serve as the Contracting Activity Competition 
Advocate in all other cases.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989; 61 FR 1527, Jan. 22, 1996; 63 FR 69218, 
Dec. 16, 1998]



806.502  Duties and responsibilities.

    In addition to the responsibilities identified in FAR 6.502(a), the 
Agency Competition Advocate will coordinate the competition advocacy 
program as it is implemented at all VA contracting activities. The 
Agency Competition Advocate will:
    (a) Establish program guidelines to be used by contracting activity 
competition advocates;
    (b) Assist contracting activity competition advocates with obstacles 
to promoting competition;
    (c) Utilize supply technical surveys, other facility reports, and 
the Federal Procurement Data System to monitor

[[Page 159]]

contracting activity compliance with the advocacy program;

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996]



806.570  Planning requirements.

    Competition Plan. Each Contracting Activity Competition Advocate 
shall develop a Competition Plan and incorporate the Plan in the 
internal operating procedures of the facility or organization in which 
the contracting activity is located. It is essential that the plan be 
endorsed and supported by top level management and be clearly understood 
by the services and offices that the contracting activity support. As a 
minimum, the plan shall include:
    (a) The appoval requirements for other than full and open 
competition specified in FAR 6.304;
    (b) A description of the synopsizing requirements contained in FAR 
Subpart 5.2 in order that the necessity for Advance Procurement Planning 
is fully understood;
    (c) A description of how the Competition Plan should be integrated 
into Advance Procurement Planning;
    (d) Identification of any known obstacles to competition and a 
proposal for overcoming them;
    (e) A method for otherwise increasing competition for contracts on 
the basis of cost and other significant factors.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996; 63 
FR 69218, Dec. 16, 1998]



PART 807_ACQUISITION PLANNING--Table of Contents




         Subpart 807.3_Contractor Versus Government Performance

Sec.
807.300 Scope of subpart.
807.304 Procedures.
807.304-73 Bid opening/receipt of proposals.
807.304-75 Bid acceptance.
807.304-76 Contract effective date.
807.304-77 Right of first refusal.

    Authority: 38 U.S.C. 501; 40 U.S.C. 486(c).

    Source: 53 FR 43210, Oct. 26, 1988, unless otherwise noted.



         Subpart 807.3_Contractor Versus Government Performance



807.300  Scope of subpart.

    This subpart prescribes basic procedures and principles to be 
followed in performing the contracting aspect of the OMB Circular A-76 
cost comparison process.



807.304  Procedures.



807.304-73  Bid opening/receipt of proposals.

    The date established for bid opening or receipt of proposals will 
normally be 90 days after sending the request for publication to the 
Commerce Business Daily (CBD) (65 days after issuing the solicitation).



807.304-75  Bid acceptance.

    Bid acceptance shall be 90 days from bid opening/receipt of 
proposals in order to accommodate the time necessary to evaluate bids/
offers, finalize the cost comparison and process any appeals. 
Contracting officers will insert ``90 days'' in FAR clause 52.214-15.



807.304-76  Contract effective date.

    (a) A transition from in-house performance to contract requires a 
period of time from contract award to beginning of contract performance 
(contract effective date). This time is necessary to allow for personnel 
adjustments, e.g., right of first refusal process, and to allow a 
reasonable period for the contractor to make necessary resource 
reallocations. The contract effective date should be carefully 
considered in conjunction with the A-76 Task Group and must be specified 
in the solicitation.
    (b) Although outplacement planning to minimize the effect of any 
necessary reduction in force should be initiated in advace of bid 
opening/receipt of proposals as prescribed by Office of Personnel and 
Labor Relations, there are also employee and labor organization 
reduction-in-force notice requirements which must be satisfied.
    (c) When bargaining unit employees will be affected, facility 
officials also

[[Page 160]]

should review and comply with any employee or labor organization notice 
requirements in applicable negotiated agreements.



807.304-77  Right of first refusal.

    (a) In addition to the Right of First Refusal clause specified in 
FAR 52.207-3, the contracting officer will include the clause ``Report 
of Employment Under Commercial Activities'' in 852.207-70. This clause 
is primarily intended to verify that the contractor is meeting its 
obligation to provide adversely affected Federal workers the first 
opportunity for employment openings, for which they qualify, created by 
the contract.
    (b) The Report of Employment Under Commercial Activities clause is 
also prescribed to avoid inappropriate severance payment. In order to 
implement the clause, the contracting officer (or Contracting Officer's 
Technical Representative (COTR)) must first obtain a list from the 
servicing personnel office of Federal employees, including their Social 
Security numbers, who will be adversely affected as a result of the 
anticipated contract. The list should be requested as soon as a 
preliminary determination is made to contract out a function subject to 
A-76. (Contracting officers may designate a COTR to coordinate the 
information and reporting requirements.)



PART 808_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




Sec.
808.001 Priorities for use of Government supply sources.

          Subpart 808.4_Ordering From Federal Supply Schedules

808.401 General.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12593, Mar. 29, 1984, unless otherwise noted.



808.001  Priorities for use of Government supply sources.

    (a) Procurement will be effected from the following sources in the 
descending order of priority as indicated herein:
    (1) VA excess.
    (2) Other government agencies excess.
    (3) Federal Prison Industries.
    (4) Procurement list of products available from the Committee for 
Purchase From People Who Are Blind or Severely Disabled.
    (5) GSA stock and other Government agency inventory.
    (6) VA decentralized contracts.
    (7) Mandatory Federal Supply Schedule contracts.
    (8) Optional use Federal Supply Schedule contracts.
    (9) Commercial concerns, educational, or nonprofit institutions, as 
applicable.
    (b) Public exigency. A source lower in priority may be utilized in a 
public exigency as defined in FAR 6.302-2 and in Federal Property 
Management Regulation 41 CFR 101-25.101-5. Justification for each 
deviation must be included in the procurement file.
    (c) Eligible Beneficiaries. When it is determined that a therapeutic 
benefit to eligible beneficiaries will result from personal selection of 
shoes, clothing and incidentals, acquisition from the Veterans Canteen 
Service or commercial sources is authorized. When dress shoes similar to 
Federal Prison Industries, Inc., Style No. 86-A are purchased from 
commercial sources, FPI clearance No. 1206 will be cited on the purchase 
document.

[49 FR 12593, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987; 54 FR 40063, Sept. 29, 1989; 61 FR 20492, 
May 7, 1996; 63 FR 69219, Dec. 16, 1998]



          Subpart 808.4_Ordering From Federal Supply Schedules



808.401  General.

    The Executive Director and Chief Operating Officer, VA National 
Acquisition Center, advertises, negotiates, awards the contracts, and is 
responsible for contract administration for FSS (Federal Supply 
Schedule) Groups 65 and 89. The Executive Director and Chief Operating 
Officer issues the Federal Supply Schedules containing the

[[Page 161]]

necessary information for placing delivery orders with the contractors 
for the above FSS Groups.

[49 FR 12593, Mar. 29, 1984, as amended at 63 FR 69219, Dec. 16, 1998



PART 809_CONTRACTOR QUALIFICATIONS--Table of Contents




            Subpart 809.1_Responsible Prospective Contractors

Sec.
809.104-2 Special standards.
809.106-1 Conditions for preaward surveys.

                    Subpart 809.2_Qualified Products

809.206 Acquiring qualified products.
809.270 Qualified products for convenience/labor saving foods.

         Subpart 809.4_Debarment, Suspension, and Ineligibility

809.400 Scope of subpart.
809.403 Definitions.
809.404 Consolidated list of debarred, suspended, and ineligible 
          contractors.
809.405 Effect of listing.
809.406 Debarment.
809.406-1 General.
809.406-3 Procedures.
809.406-4 Period of debarment.
809.407 Suspension.
809.407-1 General.
809.407-3 Procedures.

           Subpart 809-5_Organizational Conflicts of Interest

809.504 Contracting officer's responsibilities.
809.505 General rules.
809.508-2 Contract clause.

  Subpart 809.7_Defense Production Pools and Research and Development 
                                  Pools

809.702 Contracting with pools.

    Authority: 38 U.S.C. 210, 40 U.S.C. 486(c) and 42 U.S.C. 2453(c).

    Source: 49 FR 12594, Mar. 29, 1984, unless otherwise noted.



            Subpart 809.1_Responsible Prospective Contractors



809.104-2  Special standards.

    Standards applicable to subsistence will be established based on 
preaward surveys prescribed by 809.106-1.



809.106-1  Conditions for preaward surveys.

    (a) Preaward on-site evaluation will be made for contracts covering 
the products and services of bakeries, dairies, ice cream plants and 
laundry and dry cleaning activities. A committee under the direction of 
the contracting officer and composed of representatives of the medical 
service and/or using service chiefs or designees appointed by the 
facility director will inspect and evaluate the plant, personnel, 
equipment and processes of the prospective contractor. Prior to any 
inspection, the contracting officer will inquire whether the plant has 
been recently inspected and approved by another Department of Veterans 
Affairs facility or Federal agency. Approved inspection reports of 
another Department of Veterans Affairs facility will be accepted by 
Department of Veterans Affairs facilities and approved inspection 
reports of other Federal agencies may be accepted as satisfactory 
evidence that the facilities of the bidder meet the requirements of the 
Invitation for Bid, provided inspection was made not more than 6 months 
prior to the proposed contract period.
    (b) Preaward on-site evaluation of dairy plants will not be made by 
the Department of Veterans Affairs when acceptable bids are received 
from suppliers of those dairy products designated as No. 1 in the 
Federal Specifications. Suppliers must have received, prior to opening 
of bids, a pasteurized milk rating of 90 percent or more for the type of 
product being supplied, on the basis of the U.S. Public Health Service 
milk ordinance and code. Such rating must be current (not over 2 years 
old), and will have been determined by certified State milk sanitation 
rating officer in the State of origin or by the Public Health Service 
and will continue at 90 percent or more during the period of the 
contract. Firms not so rated may only offer dairy products designated as 
No. 2 in the Federal Specifications. Award to such firms may be made 
only after completion of a preaward on-site evaluation conducted in 
accordance with paragraph (a) of this section.
    (c) Prior to any open market purchase of fresh bakery products (such 
as

[[Page 162]]

pies, cakes, cookies), the plant where these products are produced or 
prepared will be inspected and evaluated as provided in paragraph (a) of 
this section. On-site evaluation will be made at least annually and 
recorded on VA Form 10-2079, Inspection Report of Bakery.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989]



                    Subpart 809.2_Qualified Products



809.206  Acquiring qualified products.

    (a) Federal Qualified Products Lists are lists of products qualified 
under the applicable Federal or interim Federal specification. Such 
lists may be used as authorized by the appropriate administration or 
staff office. Requests to receive copies of existing Federal Qualified 
Products Lists will be submitted to the Deputy Assistant Secretary for 
Acquisition and Materiel Management (91) for transmittal to General 
Services Administration. Requests to establish a Federal Qualified 
Products List for a commodity will be submitted to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (91), supported by one 
or more of the following justifications:
    (1) The time required for testing after award would unduly delay 
delivery of the supplies being purchased.
    (2) The cost of repetitive testing would be excessive.
    (3) The tests would require expensive or complicated testing 
apparatus not commonly available.
    (4) The interest of the Government requires assurance, prior to 
award, that the product is satisfactory for its intended use.
    (5) The determination of acceptability would require performance 
data to supplement technical requirements in the specification.
    (b) VA Qualified Products Lists are lists of products qualified by 
VA under VA specifications or purchase descriptions. Such lists may be 
established as authorized by the appropriate administration or staff 
office.
    (1) VA Qualified Products Lists will be supported by one or more of 
the justifications in 809.206(a) or the following:
    (i) Where tests result in substantial or repetitive rejections, or
    (ii) Where professional requirements of performance, balance, 
design, or construction cannot economically be developed into clear 
specifications, and professional judgment is required in determining the 
acceptability of items meeting VA requirements.
    (2) In the event that the requirement for VA Qualified Products List 
is established for any given product, known suppliers of the type of 
item required will be notified and given an opportunity to submit 
samples for inspection, and test based upon guarantee that they will 
deliver the item to be inspected, provided the item is acceptable. A 
qualified products list shall not be used as a means of restricting 
competition to favored suppliers. All suppliers so desiring shall be 
given an opportunity to have their products tested for acceptability.
    (3) Costs involved in the inspection and test will be borne by VA. 
The supplier will be required to bear the cost of the sample and its 
transportation to the inspecting point. After inspection, the sample 
shall be returned to the supplier ``as is'' unless it is destroyed by 
inspection or disposed of or retained by VA as authorized by the 
supplier.
    (4) Items which have been accepted for the qualified products list 
will be subject to constant review for compliance with the applicable 
specification. Where there is a variance between the specification and 
item, the supplier shall be requested to furnish an item that conforms 
to the specification. Failure or inability on the part of the supplier 
to provide an item that conforms to the specification will be sufficient 
cause to consider the item unacceptable in response to subsequent 
invitations.
    (5) The acceptance of an item for the qualified products list does 
not guarantee acceptance in any future purchase, nor does it constitute 
a waiver of the requirements of the specifications as to acceptance, 
inspection, testing or other provisions of any future contract involving 
such item.
    (6) Bid invitations covering products which have been included in a 
qualified products list will include the clause set

[[Page 163]]

forth in FAR 52.209-1 or 52.209-2 as applicable.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989]



809.270  Qualified products for convenience/labor saving foods.

    (a) Each VA medical district's Dietetic Service representative is 
delegated authority to establish a common Qualified Products List for 
convenience/labor-saving foods for the use of medical centers within 
his/her respective district. The medical district Dietetic Service 
representative will notify the Director, Dietetic Service, VA Central 
Office, of the establishment of each Qualified Products List and 
amendments to each established list.
    (b) Each medical center is authorized to use its district Qualified 
Products List. Each medical center may test food of its own choice, but 
will submit test results to the district Dietetic Service 
representative. The Dietetic Service representative will coordinate and 
consolidate the test results and recommendations of individual medical 
centers with other medical centers within the district in order to avoid 
unnecessary duplication.
    (c) The approved medical district Qualified Products List will be 
furnished each Supply office within the district. The Supply Services 
will have access to complete and accurate records of established 
Qualified Products Lists and all test results. These records will be 
made available to the Office of Acquisition and Materiel Management, VA 
Central Office, upon request.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]



         Subpart 809.4_Debarment, Suspension, and Ineligibility



809.400  Scope of subpart.

    This subpart prescribes procedures for debarring or suspending 
contractors and the inclusion of those contractors on the consolidated 
list of debarred, suspended or ineligible bidders.



809.403  Definitions.

    Fact-finding as used in this subpart shall mean a gathering of facts 
which is accomplished through informal meetings with the contractor, 
submissions of information, either verbally or in writing, by the 
contractor, and any other method deemed appropriate by the debarring 
official.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]



809.404  Consolidated list of debarred, suspended, and ineligible contractors.

    (a) The Office of Acquisition and Materiel Management (93) shall be 
responsible for the action described in FAR 9.404(c) (1), (2), (4) and 
(6).
    (b) The Office of Acquisition and Materiel Management (91) shall be 
responsible for the actions described by FAR 9.404(c) (3) and (5).

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]



809.405  Effect of listing.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall make the determinations required by FAR 9.405(a) and 
9.405-2 to solicit from, award contracts to, or consent to subcontracts 
with contractors whose names are included on the consolidated list of 
debarred, suspended or ineligible contractors.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]



809.406  Debarment.



809.406-1  General.

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management is the debarring official for the Department of Veterans 
Affairs.
    (b) Any Department of Veterans Affairs employee may submit a 
recommendation to the Deputy Assistant Secretary for Acquisition and 
Materiel Management that a firm or individual be debarred by the 
Department of Veterans Affairs.
    (c) Such recommendations must be supported by documentary evidence 
of a cause listed in FAR 9.406-2.

[[Page 164]]



809.406-3  Procedures.

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall, upon a receipt of a recommendation for debarment, 
appoint a designee to conduct an investigation, initiate debarment and 
present the facts to the debarring official for consideration and 
action.
    (b) The appointed designee shall issue the proposed debarment notice 
as required by FAR 9.406-3(c).
    (1) If no reply is received from the firm or individual to the 
notice of proposed debarment, the case will be referred to the debarring 
official for decision on the basis of information available.
    (2) When a reply is received, the information provided will be 
considered by the appointed designee prior to making a recommendation to 
the debarring official. If the contractor's submission in opposition to 
the debarment raises a genuine dispute over facts material to the 
proposed debarment, the designee appointed by the Deputy Assistant 
Secretary for Acquisition and Materiel Management will conduct a fact-
finding as prescribed by FAR 9.406-3(b)(2).
    (3) Upon completion of the fact-finding with respect to disputed 
facts, a written findings of facts will be provided to the debarring 
official.
    (4) The debarring official shall make a decision on the basis of all 
information available including findings of facts, and/or arguments 
submitted by the contractor.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]



809.406-4  Period of debarment.

    The period of debarment will be based upon the circumstances 
involved but will not, except in unusual circumstances, exceed a period 
of 3 years. The Deputy Assistant Secretary for Acquisition and Materiel 
Management may for those firms or individuals debarred by the Department 
of Veterans Affairs decide to remove the debarment, reduce the period of 
debarment, or amend the scope of the debarment, if indicated, after 
review of documentary evidence submitted by or in behalf of the 
contractor setting forth the appropriate grounds for granting of such 
relief. Such grounds may be, but are not limited to, newly discovered 
material evidence, reversal of a conviction, bona fide change of 
ownership or management or the elimination of the cause for which 
debarment was imposed.



809.407  Suspension.



809.407-1  General.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is the suspending official for the Department of Veterans 
Affairs.



809.407-3  Procedures.

    (a) Suspension may be recommended by any Department of Veterans 
Affairs employee. These recommendations will be submitted to the Deputy 
Assistant Secretary for Acquisition and Materiel Management and must be 
supported by documentary evidence of a cause listed in FAR 9.407-2.
    (b) The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall designate an official to initiate suspension, conduct 
an investigation and present the facts to the suspending official for 
consideration and appropriate action.
    (c) The designee shall issue the proposed suspension notice as 
required by FAR 9.407-3(c).
    (1) If no reply is received from the contractor to the notice of 
proposed suspension, the case will be referred to the suspending 
official for decision on the basis of information available.
    (2) When a reply is received, the information provided will be 
considered by the official conducting the suspension proceedings prior 
to referring the case with recommendations to the suspending official. 
If the contractor's submission in opposition to the suspension raises a 
genuine dispute over facts material to the proposed suspension, the 
designee of the Deputy Assistant Secretary for Acquisition and Materiel 
Management will conduct a fact-finding as prescribed by FAR 9.407-
3(b)(2).
    (3) Upon completion of the informal hearing with respect to the 
disputed facts, a written findings of facts will be prepared and 
presented to the suspending official.

[[Page 165]]

    (4) The suspending official shall make a decision on the basis of 
all information available including findings of facts, and/or arguments 
submitted by the contractor.



           Subpart 809.5_Organizational Conflicts of Interest



809.504  Contracting officer's responsibilities.

    (a) Contracting officers will be responsible for determining the 
existence of actual and/or potential organizational conflicts of 
interest which would result from the award of the contract. The 
contracting officer will be guided by information submitted by offerors 
and by his/her own judgment. The contracting officer may obtain the 
advice of legal counsel and the assistance of technical specialists in 
evaluating potential organizational conflicts.
    (b) If it is determined that organizational conflicts of interest 
will be created by the award of the contract, the contracting officer 
may find an offeror nonresponsible.
    (c) Notwithstanding the existence of organizational conflicts of 
interest, it may be determined that the award of the contract would be 
in the best interest of the Government. In that case, the contracting 
officer may set terms and conditions which will reduce the 
organizational conflicts of interest to the greatest extent possible, 
with the approval of the head of the contracting activity.
    (d) The contracting officer will, in addition to any certifications 
required by this subpart, require in all solicitations for consulting 
services that the offeror submit as part of an offer a statement which 
discloses all relevant facts relating to existing or potential 
organizational conflicts of interest surrounding the contract and/or the 
proposed use of subcontractors during the contract.



809.505  General rules.

    The determination that organizational conflicts of interest exist 
can only be made when facts surrounding individual contracting 
situations are known. Therefore, it is up to the contracting officer to 
exercise common sense, good judgment and sound discretion in making such 
a determination and to take steps to mitigate to the greatest extent 
possible organizational conflicts of interest. The contracting officer 
will be guided by at least two underlying principles. These are that 
organizational conflicts of interest may result from (a) conflicting 
roles and interests of the contractor, in which case he/she would be 
unable to give unbiased and objective advice or may otherwise produce a 
biased work product; or (b) unfair competitive advantage which exceeds a 
normal flow of benefits from the award of the contract.



809.508-2  Contract clause.

    The representation in 852.209-70, Organizational Conflicts of 
Interest, will be made a part of all solicitations for consulting 
services.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]



  Subpart 809.7_Defense Production Pools and Research and Development 
                                  Pools



809.702  Contracting with pools.

    Department of Veterans Affairs contracting officers will be advised 
of, consider bids from, and make awards to, Small Business and Defense 
Production Pools. The Chief Medical Director, or designee, will notify 
the appropriate administrations and staff offices when such pools are 
approved.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989]



PART 811_DESCRIBING AGENCY NEEDS--Table of Contents




Sec.
811.001 Definitions.

      Subpart 811.1_Selecting and Developing Requirements Documents

811.104 Items particular to one manufacturer.
811.104-70 Purchase descriptions.
811.104-71 Bid evaluation and award.
811.104-72 Procedure for negotiated procurements.

[[Page 166]]

       Subpart 811.2_Using and Maintaining Requirements Documents

811.202 Maintenance of standardization documents.
811.204 Solicitation provisions and contract clauses.

             Subpart 811.4_Delivery or Performance Schedules

811.404 Contract clauses.

                    Subpart 811.5_Liquidated Damages

811.502 Policy.
811.504 Contract clauses.

                Subpart 811.6_Priorities and Allocations

811.602 General.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 63 FR 17335, Apr. 9, 1998, unless otherwise noted.



811.001  Definitions.

    (a) Brand name product means a commercial product described by brand 
name and make or model number or other appropriate nomenclature by which 
such product is offered for sale to the public by the particular 
manufacturer, producer or distributor.
    (b) Salient characteristics are those particular characteristics 
that specifically describe the essential physical and functional 
features of the material or service required. They are those essential 
physical or functional features which are identified in the 
specifications as a mandatory requirement which a proposed ``equal'' 
product or material must possess in order for the bid to be considered 
responsive. Bidders must furnish all descriptive literature and bid 
samples required by the solicitation to establish such ``equality''.



      Subpart 811.1_Selecting and Developing Requirements Documents



811.104  Items particular to one manufacturer.

    (a) Specifications shall be written in accordance with FAR 11.002 
unless otherwise justified by the specification writer and approved by 
the contracting officer as described in paragraph (b) of this section. 
The contract file shall be documented accordingly.
    (b) When it is determined that a particular physical or functional 
characteristic of only one product will meet the minimum requirements of 
the Department of Veterans Affairs (see FAR 11.104) or that a ``brand 
name or equal'' purchase description will be used, the specification 
writer, whether agency personnel, architect-engineer, or consultant with 
which the Department of Veterans Affairs has contracted, shall 
separately identify the item(s) to the contracting officer and provide a 
full written justification of the reason the particular characteristic 
is essential to the Government's requirements or why the ``brand name or 
equal'' purchase description is necessary. The contracting officer shall 
make the final determination whether restrictive specifications or 
``brand name or equal'' purchase descriptions will be included in the 
solicitation.
    (c) Purchase descriptions that contain references to one or more 
brand name products may be used only in accordance with 811.104-70, 
811.104-71, and 811.104-72. In addition, purchase descriptions that 
contain references to one or more brand name products shall be followed 
by the words ``or equal,'' except when the acquisition is fully 
justified under FAR 6.3 and VAAR 806.3. Acceptable brand name products 
should be listed in the solicitation. Where a ``brand name or equal'' 
purchase description is used, prospective contractors must be given the 
opportunity to offer products other than those specifically referenced 
by brand name if such other products are determined by the Government to 
fully meet the salient characteristics listed in the invitation. The 
contract file will be documented in accordance with paragraph (b) of 
this section, justifying the need for use of a brand name or equal 
description.
    (d) ``Brand name or equal'' purchase descriptions shall set forth 
those salient physical, functional, or other characteristics of the 
referenced products which are essential to the minimum needs of the 
Government. For example, when interchangeability of parts is required, 
such requirement

[[Page 167]]

should be specified. Purchase descriptions shall contain the following 
information to the extent available and include such other information 
as is necessary to describe the item required:
    (1) Complete common generic identification of the item required;
    (2) Applicable model, make or catalog number for each brand name 
product referenced, and identity of the commercial catalog in which it 
appears; and
    (3) Name of manufacturer, producer or distributor of each brand name 
product referenced (and address if not well known).
    (e) When necessary to describe adequately the item required, an 
applicable commercial catalog description or pertinent extract may be 
used if such description is identified in the solicitation as being that 
of the particular named manufacturer, producer or distributor. The 
contracting officer will insure that a copy of any catalogs referenced 
(except parts catalogs) is available on request for review by bidders at 
the purchasing office.
    (f) Except as noted in paragraph (d) of this section, purchase 
descriptions shall not include either minimum or maximum restrictive 
dimensions, weights, materials or other salient characteristics which 
are unique to a brand name product or which would tend to eliminate 
competition or other products which are only marginally outside the 
restrictions. However, purchase description may include restrictive 
dimensions, weights, materials or other salient characteristics if such 
restrictions are determined in writing by the user to be essential to 
the Government's requirements, the brand name of the product is included 
in the purchase description, and all other determinations required by 
811.104 are made.



811.104-70  Purchase descriptions.

    (a) When any purchase description, including a ``brand name or 
equal'' purchase description, is used in a solicitation for a supply 
contract to describe required items of mechanical equipment, the 
solicitation will include the clauses in 852.211-70 (Service Data 
Manual) and in 852.211-71 (Guarantee).
    (b) Solicitations using ``brand name or equal'' purchase 
descriptions will contain the ``brand name or equal'' clause in 852.211-
77, and the provision set forth at FAR 52.214-21, Descriptive 
Literature. Contracting officers are cautioned to review the 
requirements at FAR 14.202-5(d) when utilizing the descriptive 
literature provision.
    (c) Except as provided in paragraph 811.104-70(d), when a ``brand 
name or equal'' purchase description is included in an invitation for 
bids, the following shall be inserted after each item so described in 
the solicitation, for completion by the bidder:

                               Bidding on:

Manufacturer name_______________________________________________________

Brand___________________________________________________________________

No._____________________________________________________________________

    (d)(1) When component parts of an end item are described in the 
solicitation by a ``brand name or equal'' purchase description and the 
contracting officer determines that the clause in 811.104-70(b) is 
inapplicable to such component parts, the requirements of 811.104-70(c) 
shall not apply with respect to such component parts. In such cases, if 
the clause is included in the solicitation for other reasons, a 
statement substantially as follows also shall be included:

    The clause entitled ``Brand Name or Equal'' does not apply to the 
following component parts (list the component parts to which the clause 
does not apply): and

    (2) In the alternative, if the contracting officer determines that 
the clause in 811.104-70(b) shall apply to only certain such component 
parts, the requirements of 811.104-70(c) shall apply to such component 
parts and a statement substantially as follows also shall be included:

    The clause entitled ``Brand Name or Equal'' applies to the following 
component parts (list the component parts to which the clause applies):

    (e) When a solicitation contains ``brand name or equal'' purchase 
descriptions, bidders who offer brand name products, including component 
parts, referenced in such descriptions shall not be required to furnish 
bid samples of the referenced brand name products. However, 
solicitations may

[[Page 168]]

require the submission of bid samples in the case of bidders offering 
``or equal'' products. If bid samples are required, the solicitation 
shall include the provision set forth at FAR 52.214-20, Bid Samples. The 
bidder must still furnish all descriptive literature in accordance with 
and for the purpose set forth in the ``Brand Name or Equal'' clause, 
852.211-77(c)(1) and (2), even though bid samples may not be required.



811.104-71  Bid evaluation and award.

    (a) Bids offering products that differ from brand name products 
referenced in a ``brand name or equal'' purchase description shall be 
considered for award when the contracting officer determines in 
accordance with the terms of the clause at 852.211-77 that the offered 
products are clearly identified in the bids and are equal in all 
material respects to the products specified.
    (b) Award documents shall identify, or incorporate by reference, an 
identification of the specific products which the contractor is to 
furnish. Such identification shall include any brand name and make or 
model number, descriptive material, and any modifications of brand name 
products specified in the bid. Included in this requirement are those 
instances when the descriptions of the end items contain ``brand name or 
equal'' purchase descriptions of component parts or of accessories 
related to the end item, and the clause at 852.211-77 was applicable to 
such component parts or accessories (see 811.104-70(d)(2)).



811.104-72  Procedure for negotiated procurements.

    (a) The policies and procedures prescribed in 811.104-70 and 
811.104-71 should be used as a guide in developing adequate purchase 
descriptions for negotiated procurements.
    (b) The clause at 852.211-77 may be adapted for use in negotiated 
procurements. If use of the clause is not practicable (as may be the 
case in unusual and compelling urgency purchases), suppliers shall be 
suitably informed that proposals offering products different from the 
products referenced by brand name will be considered if the contracting 
officer determines that such offered products are equal in all material 
respects to the products referenced.



       Subpart 811.2_Using and Maintaining Requirements Documents



811.202  Maintenance of standardization documents.

    (a) Military and departmental specifications. Contracting officers 
may, when they deem it to be advantageous to the Department of Veterans 
Affairs, utilize these specifications when procuring supplies and 
equipment costing less than the simplified acquisition threshold. 
However, when purchasing items of perishable subsistence, contracting 
officers shall observe only those exemptions set forth in paragraphs 
(b)(2) and (b)(3) of this section.
    (b) Nutrition and Food Service specifications. (1) The Department of 
Veterans Affairs has adopted for use in the procurement of packinghouse 
products, the purchase descriptions and specifications set forth in the 
Institutional Meat Purchase Specifications (IMPS), and the IMPS General 
Requirements, which have been developed by the U.S. Department of 
Agriculture. Purchase descriptions and specifications for dairy 
products, poultry, eggs, fresh and frozen fruits and vegetables, as well 
as certain packinghouse products selected from the IMPS especially for 
Department of Veterans Affairs use, are contained in Part IV of the 
Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
Publication No. C8900-SL. A copy of Part IV of this catalog and the IMPS 
may be obtained from any Department of Veterans Affairs contracting 
officer.
    (2) The military specifications for meat and meat products contained 
in Part IV of the Federal Supply Catalog, Stock List, FSC Group 89, 
Subsistence, shall be used by the Department of Veterans Affairs only 
when purchasing such items of subsistence from the Defense Logistics 
Agency (DLA). Military specifications for poultry, eggs, and egg 
products contained in Part IV of the Federal Supply Catalog, Stock List, 
FSC Group 89, Subsistence, may be used when purchasing either from DLA 
or from local dealers.

[[Page 169]]

    (3) Except as authorized in part 846 of this chapter, contracting 
officers shall not deviate from the specifications contained in Part IV 
of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
and the IMPS without prior approval of the Deputy Assistant Secretary 
for Acquisition and Materiel Management.
    (4) Items of meat, cured pork and poultry not listed in either Part 
IV of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
or the IMPS, will not be purchased without prior approval of the Deputy 
Assistant Secretary for Acquisition and Materiel Management.
    (c) Department of Veterans Affairs specifications. (1) The Director, 
Publications Service, is responsible for developing, publishing, and 
distributing Department of Veterans Affairs specifications covering 
printing and binding.
    (2) Department of Veterans Affairs specifications, as they are 
revised, are placed in stock in the VA Forms and Publications Depot. 
Facility requirements for these specifications will be requisitioned 
from that source.
    (d) Government paper specification standards. (1) Invitations for 
bids, requests for proposals, purchase orders, or other procurement 
instruments covering the purchase of paper stocks to be used in 
duplicating or printing, or which specify the paper stocks to be used in 
buying printing, binding, or duplicating, will require that such paper 
stocks be in accordance with the Government Paper Specification 
Standards issued by the Joint Committee on Printing of Congress.
    (2) All binding or rebinding of books, magazines, pamphlets, 
newspapers, slip cases and boxes will be procured in accordance with 
Government Printing Office (GPO) specifications and will be procured 
from the servicing GPO Regional Printing Procurement Office or, when 
appropriate, from commercial sources.
    (3) There are three types of binding/rebinding: Class A (hard 
cover); Perfect (glued); and Lumbinding (sewn). The most suitable type 
of binding will be procured to satisfy the requirements, based upon the 
intended use of the bound material.



811.204  Solicitation provisions and contract clauses.

    Specifications. When product specifications are cited in an 
invitation for bids or requests for proposals, the citation shall 
include desired options and shall conform to the following:

    Shall be type ----------, grade ----------, in accordance with (type 
of specification) No. --------, dated------------ and amendment -------- 
dated ----------, except paragraphs -------- and ---------- which are 
amended as follows:



             Subpart 811.4_Delivery or Performance Schedules



811.404  Contract clauses.

    When delivery is required by or on a particular date, the time of 
delivery clause set forth in FAR 52.211-8 as it relates to f.o.b. 
destination contracts will state that the delivery date specified is the 
date by which the shipment is to be delivered, not the shipping date. In 
f.o.b. origin contracts, the clause will state that the date specified 
is the date shipment is to be accepted by the carrier.



                    Subpart 811.5_Liquidated Damages



811.502  Policy.

    Liquidated damages provisions will not be routinely included in 
supply or construction contracts, regardless of dollar amount. The 
decision to include liquidated damages provisions will conform to the 
criteria in FAR 11.502. In making this decision, consideration will be 
given to whether the necessity for timely delivery or performance as 
required in the contract schedule is so critical that a probable 
increase in contract price is justified. Liquidated damages provisions 
will not be included as insurance against selection of a non-responsible 
bidder, as a substitute for efficient contract administration, or as a 
penalty for failure to perform on time.



811.504  Contract clauses.

    When the liquidated damages clause prescribed in FAR 52.211-11 or 
52.211-12

[[Page 170]]

is to be used and where partial performance may be utilized to the 
advantage of the Government, the clause in 852.211-78 will be included 
in the contract.



                Subpart 811.6_Priorities and Allocations



811.602  General.

    (a) Priorities and allocations of critical materials are controlled 
by the Department of Commerce. Essentially, such priorities and 
allocations are restricted to projects having a direct connection with 
supporting current defense needs. The Department of Veterans Affairs is 
not authorized to assign a priority rating to its purchase orders or 
contracts involving the acquisition or use of critical materials.
    (b) In those instances where it has been technically established 
that it is not feasible to use a substitute material, the Department of 
Commerce has agreed to assist us in obtaining critical materials for 
maintenance and repair projects. They will also, where possible, render 
assistance in connection with the purchase of new items, which may be in 
short supply because of their use in connection with the defense effort.
    (c) Contracting officers having problems in acquiring critical 
materials will ascertain all the facts necessary to enable the 
Department of Commerce to render assistance to the Department of 
Veterans Affairs in acquiring these materials. The contracting officer 
will submit a request for assistance containing the following 
information to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (90):
    (1) A description of the maintenance and repair project or the new 
item, whichever is applicable;
    (2) The critical material and the amount required;
    (3) The contractor's sources of supply, including any addresses. If 
the source is other than the manufacturer or producer, also list the 
name and address of the manufacturer or producer;
    (4) The Department of Veterans Affairs contract or purchase order 
number;
    (5) The contractor's purchase order number, if known, and the 
delivery time requirement as stated in the solicitation or offer;
    (6) The additional time the contractor claims will be necessary to 
effect delivery if priority assistance is not provided;
    (7) The nature and extent of the emergency that will be generated at 
the station, e.g.,
    (i) damage to the physical plant,
    (ii) impairment of the patient care program,
    (iii) creation of safety hazards, and
    (iv) any other pertinent condition that will result because of 
failure to secure assistance in obtaining the critical materials; and
    (8) If applicable, a statement that the item required is for use in 
a construction contract which was authorized by the Chief Facilities 
Management Officer, Office of Facilities Management, to be awarded and 
administered by the facility contracting officer.



PART 812_ACQUISITION OF COMMERCIAL ITEMS--Table of Contents




   Subpart 812.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items

Sec.
812.301 Solicitation provisions and contract clauses for the acquisition 
          of commercial items.
812.302 Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 63 FR 17338, Apr. 9, 1998, unless otherwise noted.



812.301  Solicitation provisions and contract clauses for the acquisition 
of commercial items.

    (a) Notwithstanding prescriptions contained elsewhere in the VAAR, 
when acquiring commercial items, contracting officers shall be required 
to use only those provisions and clauses prescribed in this part.
    (b) The provision and clause in the following VAAR sections shall be 
used, in accordance with the prescriptions contained therein or 
elsewhere in the

[[Page 171]]

VAAR, in requests for quotations, solicitations, or contracts for the 
acquisition of commercial items:
    (1) 852.219-70, Veteran-owned small business.
    (2) 852.270-4, Commercial advertising.
    (c) The provisions and clauses in the following VAAR sections must 
be used, when appropriate, in accordance with the prescriptions 
contained therein or elsewhere in the VAAR, in requests for quotations, 
solicitations, or contracts for the acquisition of commercial items:
    (1) 852.207-70, Report of employment under commercial activities.
    (2) 852.211-71, Guarantee clause.
    (3) 852.211-72, Inspection.
    (4) 852.211-73, Frozen processed foods.
    (5) 852.211-74, Telecommunications equipment.
    (6) 852.211-75, Technical industry standards.
    (7) 852.214-70, Caution to bidders-bid envelopes.
    (8) 852.216-70, Estimated quantities for requirements contracts.
    (9) 852.229-70, Purchases from patient's funds.
    (10) 852.229-71, Purchases for patients using Government funds and/
or personal funds of patients.
    (11) 852.233-70, Protest content.
    (12) 852.237-7, Indemnification and Medical Liability Insurance.
    (13) 852.237-70, Contractor responsibilities.
    (14) 852.237-71, Indemnification and insurance (vehicle and aircraft 
service contracts).
    (15) 852.252-1, Provisions or clauses requiring completion by the 
offeror or prospective contractor.
    (16) 852.270-1, Representatives of contracting officers.
    (17) 852.270-2, Bread and bakery products.
    (18) 852.270-3, Purchase of shellfish.
    (d) The clauses in the following VAAR sections shall be used, when 
appropriate, in accordance with the prescriptions contained therein or 
elsewhere in the VAAR, in requests for quotations, solicitations, or 
contracts for the acquisition of commercial items, provided the 
contracting officer determines that use of the clauses is consistent 
with customary commercial practices.
    (1) 852.211-70, Requirements for operating and maintenance manuals.
    (2) 852.211-77, Brand name or equal.
    (e) The contracting officer shall insert the clause in 852.271-70, 
Services provided eligible beneficiaries, by reference, in all requests 
for quotations, solicitations, and contracts meeting the prescription 
contained therein.
    (f) Clauses are not required for micro-purchases using the 
procedures of this part or part 813. However, this does not prohibit the 
use of any clause prescribed in this part or elsewhere in this chapter 
in micro-purchases when determined by the contracting officer to be in 
the Government's best interest.
    (g) When soliciting for commercial services or the use of medical 
equipment or space under the authority of part 873 and 38 U.S.C. 8151-
8153, the provisions and clauses in the following VAAR sections may be 
used in accordance with the prescriptions contained therein or elsewhere 
in the VAAR:
    (1) 852.273-70, Late offers.
    (2) 852.273-71, Alternative negotiation techniques.
    (3) 852.273-72, Alternative evaluation.
    (4) 852.273-73, Evaluation--health-care resources.
    (5) 852.273-74, Award without exchanges.

[63 FR 17338, Apr. 9, 1998, as amended at 64 FR 69934, Dec. 15, 1999; 68 
FR 3468, Jan. 24, 2003]



812.302  Tailoring of provisions and clauses for the acquisition of 
commercial items.

    Agency procedures for approval of waivers: Waivers to tailor 
solicitations in a manner that is inconsistent with customary commercial 
practice shall be prepared by contracting officers in accordance with 
FAR 12.302(c). Waiver requests shall be submitted to the contracting 
officer's next higher level supervisor for approval. Approved requests 
shall be retained in the contract file.

[[Page 172]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 813_SIMPLIFIED ACQUISITION PROCEDURES--Table of Contents




                        Subpart 813.1_Procedures

813.106-70 Oral purchase orders.

              Subpart 813.3_Simplified Acquisition Methods

Sec.
813.302 Purchase orders.
813.302-5 Clauses.
813.307 Forms.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



                        Subpart 813.1_Procedures



813.106-70  Oral purchase orders.

    Oral purchase orders, when considered advantageous to the Department 
of Veterans Affairs, may be used for transactions not in excess of 
$2,500. This limitation does not apply to delivery orders against 
existing contracts, e.g., delivery orders against FSS Contracts. The 
transaction will be assigned a purchase order number and receipt 
documentation will be obtained on the copies of the purchase request 
utilized as a property voucher and receiving report. Documentation as to 
competition will be in accordance with FAR 13.106-3.

[52 FR 28560, July 31, 1987. Redesignated and amended at 64 FR 69935, 
Dec. 15, 1999]



              Subpart 813.3_Simplified Acquisition Methods



813.302  Purchase orders.



813.302-5  Clauses.

    When using VA Forms 90-2138 or 90-2138-ADP for maintenance contracts 
involving services performed on Government property which have the 
potential for property damage and liability claims, the contracting 
officer shall insert in the purchase order the Contractor 
Responsibilities clause found at 852.237-70. Applicable maintenance 
contracts include but are not limited to window washing, pest control, 
and elevator maintenance.

[64 FR 69935, Dec. 15, 1999]



813.307  Forms.

    (a) VA Form 90-2138, Order for Supplies or Services, VA Form 90-
2139, Order for Supplies or Services (Continuation), VA Form 90-2138-
ADP, Purchase Order for Supplies or Services, and VA Form 2139-ADP, 
Order for Supplies and Services (Continuation), provide in one set of 
forms a purchase or delivery order, vendor's invoice, and receiving 
report. They will be used in lieu of but in the same manner as Optional 
Form 347, Order for Supplies or Services, Optional Form 348, Order for 
Supplies or Services Schedule--Continuation, and Standard Form 1449, 
Solicitation/Contract/Order for Commercial Items.
    (b) The following order forms are for use when ordering the 
indicated medical, dental and ancillary services up to $10,000 per 
authorization when such services are not available under existing 
contracts.
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record, Authorization and Invoice for 
Outpatient Services.
    (c) In authorizing patient travel as set forth in VA Manual MP-1, 
Part II, Chapter 3, VA Form 10-2511, Authority and Invoice for Travel by 
Ambulance or Other Hired Vehicle, will be used as provided by that 
manual.
    (d) Standard Form 182, Request, Authorization, Agreement, and 
Certification of Training, will be utilized for the procurement of 
training in the manner prescribed in 870.104.
    (e) VA Form 10-2421, Prosthetics Authorization and Invoice, will be 
used for indicated procurements not in excess of $300.

[49 FR 12599, Mar. 29, 1984. Redesignated and amended at 64 FR 69934, 
Dec. 15, 1999]

[[Page 173]]



PART 814_SEALED BIDDING--Table of Contents




                   Subpart 814.1_Use of Sealed Bidding

Sec.
814.103 Policy.
814.103-1 General.
814.104 Types of contracts.
814.104-70 Fixed-price contracts with escalation.

                   Subpart 814.2_Solicitation of Bids

814.201 Preparation of invitations for bids.
814.202 General rules for solicitation of bids.
814.202-4 Bid samples.
814.203 Methods of soliciting bids.
814.203-1 Mailing or delivery to prospective bidders.
814.204 Records of invitations for bids and records of bids.
814.205 Solicitation mailing lists.
814.205-1 Establishment of lists.
814.205-2 Removal of names from solicitation mailing lists.
814.205-5 Release of solicitation mailing lists.
814.208 Amendment of invitation for bids (construction).

                    Subpart 814.3_Submission of Bids

814.301 Responsiveness of bids.
814.302 Bid submission.
814.304 Late bids, late modifications of bids, or late withdrawal of 
          bids.
814.304-2 Notification to late bidders.
814.304-4 Records.

           Subpart 814.4_Opening of Bids and Award of Contract

814.402 Opening of bids.
814.403 Recording of bids.
814.404 Rejection of bids.
814.404-1 Cancellation of invitations after opening.
814.404-2 Rejection of individual bids.
814.404-70 Questions involving the responsiveness of a bid.
814.407 Mistakes in bids.
814.407-3 Other mistakes disclosed before award.
814.407-4 Mistakes after award.
814.408 Award.
814.408-70 Award when only one bid is received.
814.408-71 Recommendation for award (construction).
814.409 Information to bidders.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12599, Mar. 29, 1984, unless otherwise noted.



                   Subpart 814.1_Use of Sealed Bidding



814.103  Policy.



814.103-1  General.

    Contracts in excess of the small purchase limitation or in excess of 
$1,000 for contracts made for repairs to property acquired by the 
Department of Veterans Affairs under chapter 37, title 38, United States 
Code, will be made by sealed bidding when all of the elements necessary 
for sealed bidding as prescribed in FAR 6.401(a) are present.

[51 FR 23068, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989]



814.104  Types of contracts.



814.104-70  Fixed-price contracts with escalation.

    When contracts of this nature are authorized pursuant to 816.102(b), 
contracting officers will be guided by the provisions of FAR 16.203.



                   Subpart 814.2_Solicitation of Bids



814.201  Preparation of invitations for bids.

    (a) Invitations for bids for supplies, equipment and services will 
be serially numbered at the time of issue. The number will consist of 
the station or National Acquisition Center division number, the serial 
number of the invitation, and the fiscal year in which issued, e.g., 
101-24-84. A series beginning with the number 1 will be started each 
fiscal year. Invitations for bids for supplies, equipment and services 
which are issued, accepted and become contracts in the same fiscal year 
but, because of procurement leadtime, will not be performed until the 
ensuing fiscal year will be numbered in the series of the year in which 
they are issued. However, invitations issued in one fiscal year that 
will result in a contract that will become effective and performed only 
in the ensuing fiscal year will be numbered in the ensuing fiscal year 
series.
    (b) Invitations for construction contracts will bear the applicable 
IFB number and project number, if assigned.

[[Page 174]]

    (c) In order to preclude adverse criticism of the Department of 
Veterans Affairs by prospective bidders relative to the disclosure of 
bid prices prior to bid opening, the provision entitled ``Caution to 
Bidders Bid-Envelopes,'' as set forth in 852.214-70, will be prominently 
placed in all invitations for bids.
    (d) To realize the greatest possible price advantage for the 
Government, items that may be processed by a contractor to effect a 
reduction in cost factors such as production, inspection and delivery, 
may be listed for award on both individual item and summary item bases. 
Items will be listed individually and, in addition, a summary price will 
be solicited for those items the contracting officer determines to be of 
a related character and normally handled by a majority of prospective 
bidders.
    (1) When different products are to be combined for a summary price, 
the quantity, unit and unit price columns opposite the summary item will 
be crossed out, e.g.:

(Item No.) Summary bid for furnishing items ------ to ------ inclusive 
on an all or none basis:

----------------------------------------------------------------------------------------------------------------
               Quantity                          Unit                  Unit Price                Summary
----------------------------------------------------------------------------------------------------------------
XX...................................  XX.....................  XX.....................  $ XX
----------------------------------------------------------------------------------------------------------------
(Bidder will enter summary amount.)

    (2) When a single unit price is solicited for a single product for 
delivery to various destinations, or for multiple deliveries, the total 
quantity required will be listed opposite the summary item, e.g.:

(Item No.) Summary bid for furnishing items ------ to ------ inclusive 
on all or none basis:

----------------------------------------------------------------------------------------------------------------
               Quantity                          Unit                  Unit Price                Summary
----------------------------------------------------------------------------------------------------------------
XX...................................  XX.....................  XX.....................  $ XX
----------------------------------------------------------------------------------------------------------------
(Bidder will enter unit price and summary amount.)

    (3) Invitations containing a summary bid request will contain the 
following statement:

    The award will be made on either an individual item basis or summary 
bid basis, whichever results in the lowest cost to the Government. 
Therefore, to assure proper evaluation of all bids, a bidder quoting a 
summary bid price must also quote a price on each individual item 
included in the summary bid price.

    (e) Bid invitations for supplies, equipment, or services (other than 
construction) must define the extent to which alternate bids will be 
authorized and considered. Alternates specified on construction projects 
will be considered for acceptance only as a part of the basic item.
    (1) When an alternate item will be considered only if no bids or 
insufficient bids are received on the item desired, the clause set forth 
in 852.214-71(a) will be included in the invitation.
    (2) When an alternate item will be considered on an equal basis with 
the item specified, the clause set forth in 852.214-71(b) will be 
included in the invitation.
    (3) In addition to the clauses referenced in paragraph (e) (1) or 
(2) of this section, the clause set forth in 852.214-71(c) will be 
included in the invitation when bids will be allowed on different 
packaging, unit designation, etc.
    (f) When a contracting officer determines that it will be 
advantageous to the Government to make the award by group or groups of 
items, a provision for such award will be included in the invitation for 
bids.
    (1) This may apply when:
    (i) The items in the group or groups are readily available from the 
sources to be solicited; and
    (ii) It is desirable to make a minimum number of contracts; or
    (iii) Furniture or fixtures are required for a single project and 
uniformity of design is desirable; or
    (iv) The articles required will be assembled and used as a unit.
    (2) Solicitations for supplies and services, other than 
construction, will contain the provision set forth in FAR 52.214-22.
    (3) Solicitations for construction contracts which solicit prices on 
an item and alternate item basis (when it is intended that a single 
aggregate award will be made for all items in the solicitation within 
certain fiscal limitations) will contain a statement as to the order of 
priority in which the alternate items will be awarded. This priority 
will be based on the relative importance of an item, the Department of 
Veterans Affairs' estimate, and the

[[Page 175]]

amount of funds available. Such schedules will be substantially as 
follows:

    Item No. 1--Furnish all labor, material, equipment, etc., to paint 
buildings No. 1, 2, and 3, $------.
    Alternate items in order of priority. Furnish all labor, material, 
equipment, etc., to paint:
    Item No. 2--Building No. 1 only $------.
    Item No. 3--Building No. 2 only $------.


A single award will be made on Item No. 1, but in the event the offer 
exceeds the funds available, a single award will be made on Item No. 2, 
or a combination of Item Nos. 2 and 3. Offerors should quote a price on 
each item listed.

[49 FR 12599, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23068, June 25, 1986; 52 FR 28559, July 31, 1987; 52 FR 49017, Dec. 
29, 1987; 54 FR 30044, July 18, 1989; 63 FR 69219, Dec. 16, 1998]



814.202  General rules for solicitation of bids.



814.202-4  Bid samples.

    When it has been determined that samples are necessary to the proper 
awarding of a contract, the provision set forth in 852.214-73 will be 
added to the provision in FAR 52.214-20.

[49 FR 12599, Mar. 29, 1984, as amended at 52 FR 49017, Dec. 29, 1987]



814.203  Methods of soliciting bids.



814.203-1  Mailing or delivery to prospective bidders.

    The contracting officer will include either a bid envelope, or 
Optional Form 17, Sealed Bid Label, with each invitation for bids 
furnished to prospective bidders.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987; 58 FR 48974, Sept. 21, 1993]



814.204  Records of invitations for bids and records of bids.

    (a) A single register will be established and maintained by the 
issuing office on a fiscal year basis for all solicitations by 
invitations for bid or requests for proposal number, date of issue, date 
of opening, commodity or service involved and disposition, i.e., 
contract number or purchase order number or, when applicable, no award.
    (b) Maintenance of the contract file prescribed by part 804 and 
retention of canceled Invitation for Bid files will fulfill the 
requirements set forth in FAR 14.204.



814.205  Solicitation mailing lists.



814.205-1  Establishment of lists.

    From the solicitations mailing list applications received, each 
contracting activity will compile and keep current a Solicitations 
Mailing List file. The lists will be maintained according to the 
commodity classification or group of items normally listed on the same 
invitation for bids.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987]



814.205-2  Removal of names from solicitation mailing lists.

    Except as provided for in FAR 14.205-2, no Department of Veterans 
Affairs contracting officer, or other employee, shall remove from the 
solicitation mailing list the name of any prospective solicitation.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987]



814.205-5  Release of solicitation mailing lists.

    When invitations for bids for supply and service contracts have been 
issued, contracting officers may furnish, upon request of an individual 
or institution having a bona fide interest in such information, a list 
of the prospective bidders to whom invitations for bids were submitted. 
The provisions of FAR 14.205-5 will be observed with respect to 
invitations for bids for construction contracts.



814.208  Amendment of invitation for bids (construction).

    Amendments will be sent to holders of drawings and specifications by 
certified mail, return receipt requested. (Amendments may be made by 
telegram, if time does not permit mailing.)

[[Page 176]]



                    Subpart 814.3_Submission of Bids



814.301  Responsiveness of bids.

    Where the timeliness of the submission of a bid, modification or 
withdrawal cannot be administratively determined in accordance with FAR 
14.301, the matter will be submitted by the contracting officer directly 
to the Comptroller General for decision. The submission will include 
copies of all pertinent papers. A copy of each submission will be 
forwarded to the Deputy Assistant Secretary for Acquisition and Materiel 
Management.



814.302  Bid submission.

    A bid hand-carried by the bidder or his agent will be considered 
late unless delivered to the addressee designated in the bid invitation 
prior to the time set for opening.

[49 FR 12599, Mar. 29, 1985, as amended at 50 FR 791, Jan. 7, 1985]



814.304  Late bids, late modifications of bids, or late withdrawal of bids.



814.304-2  Notification to late bidders.

    The notification to late bidders will specify the final date by 
which the evidence must be received to be considered. This date must be 
within the time allowed by the apparent low bidder for acceptance of his 
bid.



814.304-4  Records.

    All bids received by mail (or telegram where authorized) will be 
time and date stamped immediately upon receipt at the VA installation 
mail room and in the office of the addressee designated in the 
invitation. This will firmly establish the time of receipt of bids, or 
when bids are received in the office of the addressee subsequent to the 
time of opening, and it will establish whether or not the delay was due 
to mishandling on the part of VA.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989; 
63 FR 69219, Dec. 16, 1998]



           Subpart 814.4_Opening of Bids and Award of Contract



814.402  Opening of bids.

    (a) The contracting officer shall serve as, or designate, a bid 
opening officer, and shall also designate a recorder.
    (b) The form and amount of bid security and name of surety will be 
read aloud and recorded.

[49 FR 12599, Mar. 29, 1985, as amended at 50 FR 792, Jan. 7, 1985]



814.403  Recording of bids.

    The information required for bid evaluation shall be recorded on the 
appropriate Abstract of Offers form (SF 1409 or OF 1419). The evaluation 
data may be recorded on supplemental sheets or forms such as VA Form 10-
2237b, Request for Dietetic Supplies, providing that such supplemental 
sheets or forms are covered by one of the forms authorized above for 
recording bid or price data. In addition to those instructions set forth 
in FAR 14.403, the bid opening officer shall certify on the abstract the 
date and hour at which the bids were opened. Where erasures, 
strikeovers, or changes in price are noted at the time of opening, a 
statement to that effect will also be included on, or attached to, the 
abstract or record of bids.

[49 FR 12599, Mar. 29, 1985, as amended at 61 FR 11586, Mar. 21, 1996; 
63 FR 69219, Dec. 16, 1998]



814.404  Rejection of bids.



814.404-1  Cancellation of invitations after opening.

    (a) A copy of each invitation for bids which is canceled as provided 
for in FAR 14.404-1, together with the abstract showing to whom such 
bids were sent, will be filed in a separate folder identified by the 
invitation number. Invitations for bids which result in no bids being 
received will be handled in like manner. In each instance the abstract 
will be annotated to show why an award was not made. These folders will 
be retained for the current and two succeeding fiscal years.
    (b) The authority to approve cancellation of invitations for bid 
after

[[Page 177]]

opening and the authority to approve the acquisition after cancellation 
as provided in FAR 14.404-1(e) is delegated to the head of the 
contracting activity. The contracting officer will submit a D&F to the 
head of the contracting activity for signature.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28560, July 31, 1987; 63 FR 69219, Dec. 16, 1998]



814.404-2  Rejection of individual bids.

    (a) When a bid that is being considered for an award is found to be 
incomplete, e.g., all pages of the invitation have not been returned by 
the bidder, the contracting officer will take whichever of the following 
actions that is appropriate:
    (1) Make a determination that the bid as submitted is in such a form 
that acceptance would create a valid and binding contract, requiring the 
contractor to perform in accordance with all of the material terms and 
conditions of the invitation. Such a determination may be based on the 
fact that the bid as submitted includes evidence that the offeror 
intends to be bound by all the material terms and conditions of the 
invitation.
    (2) Make a determination that the bid as submitted is in such form 
that acceptance would not create a valid and binding contract.
    (b) When a single bid is received in response to a solicitation, the 
offer shall not be rejected simply because it specifies a bid acceptance 
time which is shorter than that contained in the solicitation, unless a 
compelling reason exists for rejecting such a bid. Insufficient time to 
properly evaluate an offer shall be considered a compelling reason for 
rejection; however, the contracting officer will first request the 
offeror to extend the acceptance date of the bid to allow for proper 
evaluation.
    Note: In those cases where more than one bid is received, an 
individual bid which is not in compliance with the Government's bid 
acceptance time shall be rejected as nonresponsive since consideration 
of such an offer would unfairly disadvantage other bidders.



814.404-70  Questions involving the responsiveness of a bid.

    Questions involving the responsiveness of a bid which cannot be 
resolved by the contracting officer may be submitted to the Comptroller 
General through the Deputy Assistant Secretary for Acquisition and 
Materiel Management, Acquisition Administration Team, or the Chief 
Facilities Management Officer, Office of Facilities Management, as 
appropriate. Pertinent documentation must accompany the submission.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989; 
61 FR 11586, Mar. 21, 1996; 63 FR 69219, Dec. 16, 1998]



814.407  Mistakes in bids.



814.407-3  Other mistakes disclosed before award.

    (a) In accordance with the provisions of the FAR 14.407-3(e), the 
authority of the Secretary to make the administrative determinations set 
forth in FAR 14.407-3 (a), (b), (c), and (d) is hereby delegated, 
without power of redelegation, to the Deputy Assistant Secretary for 
Acquisition and Materiel Management. This delegation in no way impairs 
the delegations contained in Comptroller General decision B-122003, 
dated November 22, 1954.
    (b) When a bidder alleges a mistake in his or her bid prior to 
award, after complying with the provisions of FAR 14.407-3, the 
contracting officer will submit the complete file to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, for an administrative determination. Based upon the 
evidence submitted, the Deputy Assistant Secretary for Acquisition and 
Materiel Management will determine the action to be taken by the 
contracting officer. Prior to its release to the contracting officer, 
this determination will be submitted to the General Counsel (025) for 
approval. Pending receipt of the determination, no award shall be made.
    (c) Based on the evidence, when the Deputy Assistant Secretary for 
Acquisition and Materiel Management believes that the case should be 
submitted to the Comptroller General for

[[Page 178]]

decision, he/she will prepare the submission and forward it to the 
Comptroller General through the General Counsel (025). The decision of 
the Comptroller General will be furnished to the contracting officer by 
the Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team. A copy of each such decision will be 
furnished to the General Counsel (025).

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
61 FR 11586, Mar. 21, 1996. Redesignated and amended at 63 FR 69219, 
Dec. 16, 1998]



814.407-4  Mistakes after award.

    (a) When a contracting officer corrects a mistake in bid pursuant to 
FAR 14.407-4(a), a copy of the contract amendment or supplemental 
agreement together with a copy of the contracting officer's 
determination will be forwarded to the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team 
Division.
    (b) For mistakes in bid alleged after award, the contracting 
officer's proposed determination, prepared in accordance with FAR 
14.407-4, will be forwarded to the General Counsel (025) through the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team, for legal coordination. The results of 
this coordination will be transmitted to the contracting officer by the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team. The final determination on the alleged 
mistake in bid after award will be made by the contracting officer.
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Administration Team, will maintain the agency 
records of mistakes in bids after award required by FAR 14.407-4.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989, 
as amended at 61 FR 11586, Mar. 21, 1996. Redesignated and amended at 63 
FR 69219, Dec. 16, 1998]



814.408  Award.



814.408-70  Award when only one bid is received.

    When only one bid is received in response to an invitation for bids, 
such bid may be considered and accepted if (a) the specifications used 
in the invitation were not restrictive, (b) adequate competition was 
solicited, (c) the price is reasonable, and (d) the bid is otherwise in 
accordance with the invitation for bids. Such determination will be made 
in writing, and included on or attached to the abstract of bids.

[49 FR 12599, Mar. 29, 1984. Redesignated at 63 FR 69219, Dec. 16, 1998



814.408-71  Recommendation for award (construction).

    (a) For Central Office contracts, the Chief Facilities Management 
Officer, Office of Facilities Management, after analyzing all bids 
received, will submit a memorandum to the Secretary (00) recommending 
award or other disposition of the project. A copy of each of the 
following will accompany the memorandum:
    (1) The invitation.
    (2) Each bid received.
    (3) The abstract.
    (4) Any other pertinent data.
    (b) On facility level contracts, the Chief, Engineering Service, 
will analyze all bids received and submit to the contracting officer a 
memorandum recommending award or other disposition of the project. 
However, the final decision to accept or reject the lowest responsive 
bid and the determination as to the responsibility of a prospective 
contractor shall be made by the contracting officer alone.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996. Redesignated at 
63 FR 69219, Dec. 16, 1998]



814.409  Information to bidders.

    (a) Prior to award, no information as to probable acceptance or 
rejection of any offer shall be given to any bidder or other person 
outside the Department of Veterans Affairs.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
information as to performance under contract or an accepted bid is not 
public information

[[Page 179]]

and will be released to persons outside VA only upon the authority of 
the immediate supervisor of the contracting officer.
    (c) Except as provided in paragraph (d) of this section, the 
contracting officer may furnish information as to performance under a 
contract to those having a legitimate interest, such as banks, other 
financial companies and Government departments and agencies.
    (d) When litigation is involved, all information will be furnished 
through the General Counsel (025).

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30045, July 18, 1989; 
54 FR 40063, Sept. 29, 1989. Redesignated at 63 FR 69219, Dec. 16, 1998]



PART 815_CONTRACTING BY NEGOTIATION--Table of Contents




                   Subpart 815.5_Unsolicited Proposals

Sec.
815.504 Advance guidance.
815.506 Department procedures.
815.506-1 Receipt and initial review.

                     Subpart 815.6_Source Selection

815.607 Disclosure of mistakes before award.

                     Subpart 815.8_Price Negotiation

815.804-70 Preproduction and start-up and other nonrecurring costs.
815.805-4 Technical analysis.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12604, Mar. 29, 1984, unless otherwise noted.



                   Subpart 815.5_Unsolicited Proposals

    Source: 51 FR 6005, Feb. 19, 1986, unless otherwise noted.



815.504  Advance guidance.

    (a) Any inquiries from a potential offeror of an unsolicited 
proposal shall be referred to the appropriate VA contact point 
designated in 815.506(a). The contact point will determine the nature of 
the potential proposal and determine what technical/professional 
disciplines need be consulted to determine the VA need for such a 
proposal and the likelihood that a formal proposal would be favorably 
reviewed. In consultation with such technical/professional offices, the 
VA contact point will inform the potential proposer of any additional 
information required to provide advance guidance as well as the 
information specified in FAR 15.504.
    (b) The FAR contact point will maintain a record of advance guidance 
provided and the disposition/recommendation regarding the potential 
offer.



815.506  Department procedures.

    (a) The Chief, Acquisition and Materiel Management Service, 
servicing the field facility and the Director, VA Marketing Center, 
Hines, Illinois are designated as the VA contact points for unsolicited 
proposals submitted at the facility level. The Deputy Assistant 
Secretary for Acquisition and Materiel Management is designated as the 
VA contact point for all unsolicited proposals received at VA Central 
Office.
    (b) Each unsolicited proposal received by the Department of Veterans 
Affairs will be submitted to the appropriate contact point.
    (c) The VA contact point will review the unsolicited proposal and 
ensure that it is complete as prescribed in FAR 15.505. If required 
information is not submitted, the VA contact point will:
    (1) Determine if advance guidance as specified in FAR 15.504 is 
necessary (2) request that the offeror provide the necessary information 
if it is determined that the formal evaluation prescribed in FAR 15.506-
2 is appropriate; and (3) establish an estimated due date for completion 
of the review process.

[51 FR 6005, Feb. 19, 1986, as amended at 54 FR 40063, Sept. 29, 1989; 
54 FR 42508, Oct. 17, 1989]



815.506-1  Receipt and initial review.

    (a) When VA contact point determines that a comprehensive evaluation 
is to be undertaken (i.e., the proposal complies with the requirements 
in FAR 15.506-1(a) and is related to the mission of VA), the offeror 
will be contacted to ensure that all data that should be restricted in 
accordance with FAR 15.509 has been identified.
    (b) The VA contact point will maintain a log of all unsolicited 
proposals

[[Page 180]]

which will be evaluated. The log will indicate:
    (1) The date the proposal was received;
    (2) The date that the unsolicited proposal has been determined to 
warrant a comprehensive evaluation;
    (3) A description of the proposal;
    (4) The offices requested to evaluate the proposal and the date such 
offices are requested to return their evaluations;
    (5) The date the reviewing offices finalize their respective 
evaluation; and
    (6) The final disposition of the proposal.
    (c) Each office which is assigned responsibility for reviewing an 
unsolicited proposal will be advised of the need to evaluate the 
proposal against the criteria set forth in FAR 15.507(a) (1) through 
(3), i.e., is the proposal available to the Government without 
restriction from another source, does it closely resemble a pending 
competitive acquisition, is the proposal lacking in demonstrated 
innovation or uniqueness? If the reviewers conclude in the affirmative 
as to any one of these questions, the VA contact point shall be advised 
and return the proposal to the proposer.
    (d) With regard to an unsolicited proposal being processed at a 
field facility, if the reviewing offices conclude that the unsolicited 
proposal should be accepted and provide the justification and 
certification required by FAR 15.507, the VA contact point will obtain 
the prior approval of the Deputy Assistant Secretary for Acquisition and 
Materiel Management (93) prior to proceeding with negotiation. In order 
to obtain the approval, the VA contact point will submit all necessary 
documentation supporting the noncompetitive negotiation including any 
justification and approval required by FAR Subpart 6.3 and results of 
any synopsis required by FAR Subpart 5.2 The Deputy Assistant Secretary 
for Acquisition and Materiel Management will coordinate the proposal 
with the cognizant VA Central Office program official(s) and furnish the 
VA contact point with the final decision.
    (e) All copies of the unsolicited proposal will be controlled by the 
contact point by numbering each copy. If a reviewing office requires 
additional copies, the reviewing office will obtain approval of the VA 
contact point prior to duplication, numbering the copies as specified by 
the contact point. All copies will be returned to the VA contact point 
once review is completed.

[51 FR 6005, Feb. 19, 1986, as amended at 54 FR 40063, Sept. 29, 1989]



                     Subpart 815.6_Source Selection



815.607  Disclosure of mistakes before award.

    The Head of the Contracting Activity (as defined in 802.1) is 
delegated authority to permit correction of mistakes in proposals before 
award consistent with FAR 15.607.

[54 FR 45736, Oct. 31, 1989]



                     Subpart 815.8_Price Negotiation



815.804-70  Preproduction and start-up and other nonrecurring costs.

    In evaluating start-up and other nonrecurring costs, the extent to 
which these costs are included in the proposed price and the intent to 
absorb or recover any such costs in any future noncompetitive 
procurement or other pricing action will be determined. The contracting 
officer will ascertain, with the assistance of the Assistant Inspector 
General for Policy, Planning and Resources (53), as required or 
considered necessary, that payment of such costs is not duplicated. For 
example, cost of equipment paid for by the Government through a setup or 
connection agreement will not be included in depreciation costs of a 
subsequently negotiated agreement.

[49 FR 12604, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 40063, Sept. 29, 1989]



815.805-4  Technical analysis.

    (a) Contracting officers are responsible for the technical and 
administrative sufficiency of the contracts they enter into and ensuring 
that all legal and technical reviews are accomplished. To this end, 
initial and revised pricing of all negotiated prime contracts (including 
subcontract pricing

[[Page 181]]

under them) and contract modifications will be subject to technical 
analyses to the degree the contracting officer deems necessary (see 
801.602-70 for required legal reviews). Technical analyses of the 
proposals will be requested by the contracting officer from the 
appropriate technical personnel to address, as a minimum, the items set 
forth in FAR Subpart 15.805-4. Contracting officers shall not begin 
negotiation of or award any negotiated contracts or contract 
modifications before receipt, analysis and consideration of documented 
technical evaluations for every procurement action requiring such 
analysis under the conditions prescribed in FAR 15.805-4. The results of 
such analyses will be documented in the contract file and will also be 
made available to the auditor performing the preaward audit required by 
815.805-5.
    (b) When, in the opinion of the contracting officer, the complexity 
of the proposed contract warrants, he/she will submit the proposed 
contract to the Deputy Assistant Secretary for Acquisition and Materiel 
Management (93) for review and comment. When deemed advisable, the 
Deputy Assistant Secretary for Acquisition and Materiel Management (93) 
will request the General Counsel to accomplish a legal review. This 
review is in addition to the legal review specified in 801.602-70.



PART 816_TYPES OF CONTRACTS--Table of Contents




                 Subpart 816.1_Selecting Contract Types

Sec.
816.102 Policies.

                 Subpart 816.70_Unauthorized Agreements

816.7001 Letters of availability.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



                 Subpart 816.1_Selecting Contract Types



816.102  Policies.

    (a) Contracts which include an economic price adjustment provision 
other than those contracts awarded by the National Cemetery System for 
monuments or those contracts that contain the clause for service 
contracts (FAR 22.1006(c)) require the prior approval of the Deputy 
Assistant Secretary for Acquisition and Materiel Management (90). The 
request for approval shall clearly set forth the need for the provision.
    (b) Any contract involving direct obligation of appropriations and 
which extends beyond the appropriation of the year in which the contract 
period begins or which is for more than one fiscal year, is to contain 
provisions to the effect that:
    (1) It is made for the period covered by the contract, subject to 
the availability of appropriations in the ensuing year(s), and
    (2) No service is to be performed by the contractor after September 
30 of each fiscal year unless and until specifically authorized by the 
contracting officer or representative.
    (c) Architect-engineer contracts, construction contracts, or 
professional engineer contracts, financed by ``no year appropriations'' 
are not subject to the requirements of paragraph (b) of this section.

[49 FR 12607, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 30045, July 18, 1989; 61 FR 20492, May 7, 1996]



                 Subpart 816.70_Unauthorized Agreements



816.7001  Letters of availability.

    (a) Description. A letter of availability (sometimes inappropriately 
called a letter of intent) is a letter to a supplier primarily for the 
purpose of obtaining a place on the supplier's production or delivery 
schedule for long lead time items. Such a letter typically indicates 
that products or services are being considered for procurement, but that 
the statement of intent is not to be construed as a commitment. Such 
letters of availability are sometimes solicited by prospective 
contractors, or they may be originated by Government personnel. A letter 
of availability is distinguished from a letter contract which is 
specifically authorized in FAR 16.603.
    (b) Policy. (1) Unless specifically authorized by the Deputy 
Assistant Secretary for Acquisition and Materiel Management, letters of 
availability are not to be utilized for the following reasons:

[[Page 182]]

    (i) While such letters of availability may disclaim Government 
liability, they may induce potential contractors to initiate costly 
preparations in anticipation of contract award.
    (ii) Procurements announced in such letters do not always 
materialize. The result may be costly to the Government, the prospective 
contractor, or both. If the author of the letter of availability is an 
authorized contracting officer of the Department, the Government may be 
bound by action, even though the action is contrary to sound procurement 
practices and/or fiscal regulations. If the author of the letter of 
availability lacks procurement authority, the prospective contractor may 
incur substantial expenditures which may not be recovered from the 
Government, but for which the prospective contractor may seek to hold 
the unauthorized author personally liable.
    (iii) The issuance of a letter of availability may violate the 
``Anti-Deficiency Act'' (31 U.S.C. 1341).
    (2) It is recognized that potential contractors have a need to 
obtain procurement information at the earliest possible moment in order 
to make timely preparations. To this end, procurement personnel are 
expected to act as efficiently and expeditiously as possible on all 
procurement actions.

[49 FR 12607, Mar. 29, 1974, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40064, Sept. 29, 1989]



PART 817_SPECIAL CONTRACTING METHODS--Table of Contents




                  Subpart 817.1_Multi-Year Contracting

Sec.
817.105 Policy.
817.105-1 Uses.

                          Subpart 817.2_Options

817.202 Use of options.

                Subpart 817.4_Leader Company Contracting

817.402 Limitations.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12608, Mar. 29, 1984, unless otherwise noted.



                  Subpart 817.1_Multi-Year Contracting



817.105  Policy.



817.105-1  Uses.

    (a) Pursuant to Title 38, United States Code, Chapter 1, Section 114 
(as amended by Pub. L. 101-237), multiyear contracting not exceeding 5 
years is authorized for obtaining supplies and services when the 
Secretary has made the following determinations:
    (1) Appropriations are available for obligation for the total 
payments for the fiscal year the contract is entered into plus the 
estimated amount of any cancellation charges.
    (2) The contract is in the best interest of the Government due to 
the effect it would have in:
    (i) Reducing cost;
    (ii) Achieving contract administration and other efficiencies;
    (iii) Increasing quality contract performance;
    (iv) Encouraging effective competition.
    (3) During the contract period:
    (i) There is a continuing need for the supplies or services;
    (ii) There is little likelihood of substantial changes in need for 
the supplies and services in terms of quantity or rate of delivery; and
    (iii) The specifications for the supplies or services are expected 
to be reasonably stable.
    (4) The risks relating to a prospective contractor's ability to 
perform in accordance with the specifications and other contract terms 
are not excessive;
    (5) The use of a multiyear contract will not inhibit competition 
from small business firms;
    (6) In the case of a pharmaceutical item for which a patent has 
expired less than 4 years before the solicitation issue date, there is 
no substantial likelihood that increased competition will occur during 
the term of the contact that would make the contract prices higher than 
would be reasonable.
    (b) The authority of the Secretary to enter into multiyear contracts 
and to make the determinations specified in 817.102-1(a) of this section 
is delegated as follows:

[[Page 183]]

    (1) Heads of contracting activities. For contracts not requiring 
legal/technical reviews pursuant to 801.602-70 (for purposes of 
determining applicability of the thresholds, the total dollar amount of 
the contract over its full multiyear term will be used), and which do 
not contain a first year cancellation ceiling which exceeds 20 percent 
of the total dollar amount of the contract over the full multi-year 
term.
    (2) Deputy Assistant Secretary for Acquisition and Materiel 
Management, will approve all proposed uses of multiyear contracts not 
authorized for approval by heads of contracting activities. For approval 
purposes, the head of the contracting activity will justify and document 
the use of a multiyear contract against each of the criteria specified 
in 817.102-1 (a)(1) through (a)(6) of this section. The justification 
will additionally delineate the cancellation ceiling and the method used 
for calculating that ceiling and will specify the advantages of 
multiyear contracts over other alternative methods, e.g., option year 
contracts.
    (c) Cancellation ceilings will be carefully developed in accordance 
with FAR 17.106-1.

[54 FR 980, Jan. 11, 1989, as amended at 57 FR 44129, Sept. 24, 1992. 
Redesignated and amended at 63 FR 69219, Dec. 16, 1998]



                          Subpart 817.2_Options



817.202  Use of options.

    All solicitations developed pursuant to Office of Management and 
Budget Circular A-76 (Revised) cost comparisons will provide for one 
year renewal options as prescribed in FAR Subpart 17.2. Requests to use 
less or more than the prescribed contract period for Circular A-76 
(Revised) cost comparisons will be forwarded to the Deputy Assistant 
Secretary for Acquisition and Material Management (90).

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 980, Jan. 11, 1989; 57 
FR 44129, Sept. 24, 1992]



                Subpart 817.4_Leader Company Contracting



817.402  Limitations.

    (a) Except as provided in 817.402(b), no leader company contracts 
shall be initiated or consummated.
    (b) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (90) may designate a contracting officer to enter into a 
leader company contract when considered beneficial to the Department and 
the Government. When a contracting officer is designated the authority 
to enter into a leader company contract, the designation will be by name 
for a specific contract. The proposed contract with a determination and 
finding will be submitted for legal review in accordance with 801.602-
71.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 980, Jan. 11, 1989; 54 
FR 40064, Sept. 29, 1989]

[[Page 184]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 819_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




Sec.
819.000 Scope of part.

                         Subpart 819.2_Policies

819.201 General policy.
819.202-5 Data collection and reporting requirements.
819.202-70 Additional responsibilities.

               Subpart 819.5_Set-Asides for Small Business

819.502-2 Total set-asides.
819.502-3 Partial set-asides.

     Subpart 819.6_Certificates of Competency and Determinations of 
                               Eligibility

819.602-3 Appealing Small Business Administration's decision to issue 
          Certificates of Competency.

 Subpart 819.8_Contracting With the Small Business Administration (The 
                              8(a) Program)

819.800 General.
819.803 Selecting acquisitions for the 8(a) program.
819.804 Evaluation, offering, and acceptance.
819.806 Pricing the 8(a) contract.
819.806-4 Funding business development expense.
819.807 Estimating fair market price.
819.807-70 Commitments of the Office of Facilities Mnaagement funded 
          projects for the 8(a) program.
819.809-70 Procurement of supplies, services, and research and 
          development.
819.809-71 Procurement of construction.

       Subpart 819.70_Veteran-Owned and Operated Small Businesses

819.7001 Policy.
819.7002 Definition.
819.7003 Procedure.
819.7004 Waiver of the use of veteran-owned firms.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12608, Mar. 29, 1984, unless otherwise noted.



819.000  Scope of part.

    This subpart sets forth the Department of Veterans Affairs small 
business program including section 8(a) contracts with Small Business 
Administration (SBA) and unilateral set-asides. It establishes 
responsibility for making such determinations, reviewing determinations 
and evaluation of the program.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



                         Subpart 819.2_Policies



819.201  General policy.

    (a) The Director, Office of Small and Disadvantaged Business 
Utilization (OSDBU) (00SB) is responsible for the overall supervision of 
the Department of Veterans Affairs Small and Disadvantaged Business 
Utilization program and will assist administrations and key staff 
officials in developing their respective small business programs.
    (b) The Chief Facilities Management Officer will develop and 
coordinate the Department small business program, as it affects 
construction projects, with the OSDBU.
    (c) The Director, Veterans Canteen Service (VCS), will designate an 
employee of his/her organization to serve as liaison between the VCS and 
the Office of Small and Disadvantaged Business Utilization on small 
business problems affecting the VCS.
    (d) The Director, National Cemetery System; Under Secretary for 
Benefits; Chief Facilities Management Officer; Deputy Assistant 
Secretary for Administration; Director, Acquisition Operations and 
Analysis Service; Executive Director and Chief Operating Officer, VA 
National Acquisition Center; and Directors of field facilities with 
acquisition and materiel management activities will designate an 
employee of their respective organizations to serve as a small and small 
disadvantaged business specialist. This employee will

[[Page 185]]

be a full-time employee of the respective contracting activity, will be 
familiar with the supplies and services purchased at the activity, and 
will be fully cognizant of the regulations implementing the Small 
Business Act. The principal duties will include assisting the Small 
Business Administration Procurement Center Representative (if assigned) 
in activities and functions relating to sections 8 and 15 of the Small 
Business Act. The name, telephone number, and mailing symbol of each 
designee and any successor will be forwarded to the Director, Office of 
Small and Disadvantaged Business Utilization, through the Deputy 
Assistant Secretary for Acquisition and Materiel Management.

[49 FR 12608, Mar. 29, 1984, as amended at 52 FR 37317, Oct. 6, 1987; 54 
FR 40064, Sept. 29, 1989; 55 FR 49899, Dec. 3, 1990; 56 FR 44011, Sept. 
6, 1991; 63 FR 69219, Dec. 16, 1998]



819.202-5  Data collection and reporting requirements.

    Administration heads, staff office directors and heads of 
contracting activities will, in addition to the responsibilities 
designated in FAR 19.202-5, cooperate with the Office of Small and 
Disadvantaged Business Utilization in formulating specific socio-
economic procurement goals and providing other data necessary for goal 
assessment.
    (a) Each VA acquisition activity shall establish goals for 
expenditure of funds with preferred businesses within their projected 
annual budget. The preference programs supported by VA are listed in 
paragraph (c) of this section. OSDBU is responsible for Department-wide 
goals and accomplishments and will approve or adjust each acquisition 
activity's goals.
    (b) A Procurement Preference Program Goals Report (Report Control 
Symbol 00-0427) shall be submitted annually by each acquisition activity 
to reach OSDBU by November 1. Each report shall contain total 
expenditure estimates and goals for the current fiscal year and 
explanations of the methods utilized to arrive at each proposed goal.
    (c) All acquisition activities shall submit information and 
procurement preference goals identified in paragraphs (c)(1) through 
(c)(8) of this section. In addition, the Office of Acquisition and 
Materiel Management, the VA National Acquisition Center and the Office 
of Facilities Management shall submit the information identified in 
paragraphs (c)(1) through (c)(11) of this section. Goals shall be 
expressed in dollars and rounded to the nearest thousand.
    (1) Estimate of the total procurement dollar expenditures (excluding 
delivery orders against General Services Administration (GSA) FSS 
contracts).
    (2) Small business awards (includes paragraphs (c)(3) through (c)(5) 
of this section).
    (3) Minority business direct awards.
    (4) SBA 8(a) awards.
    (5) Women-owned business awards.
    (6) Veteran-owned business awards (includes paragraphs (c)(8) and 
(c)(9) of this section).
    (7) Vietnam era veteran-owned business awards (including disabled 
Vietnam era veterans).
    (8) Disabled veteran-owned business awards (other than Vietnam era 
disabled veterans).
    (9) Estimate of total dollar value of subcontracts to be awarded by 
reporting prime contractors.
    (10) Subcontracts to be awarded to small business concerns by prime 
contractors.
    (11) Subcontracts to be awarded to small disadvantaged business 
concerns by prime contractors.
    (d) Anticipated problems in the attainment of the proposed goal in 
any category shall also be identified. This information will be used in 
negotiating the Department goals with SBA.
    (e) As an addendum to the report, each acquisition activity shall 
provide a narrative explaining the reason(s) for any shortfall(s) in the 
achievement of any previous fiscal year goal category. This explanation 
shall be specific and will be used by OSDBU to justify Department 
shortfalls.
    (f) Upon review by OSDBU of the proposed goals, each acquisition 
activity will be notified of the acceptance of goals as submitted, or of 
any deficiencies. If the goals are not acceptable, the acquisition 
activity will be requested to submit further written justification for 
the goals submitted. Based on documents submitted,

[[Page 186]]

OSDBU will make a final determination on the goal assignment.
    (g) Accomplishment of goals identified in paragraphs (c)(1) through 
(c)(8) of this section will be determined by OSDBU from data reported by 
acquisition activities into the VA Federal Procurement Data System 
(FPDS).
    (h) Achievement of subcontracting goals shall be reported by the 
Office of Facilities Management, the Office of Acquisition and Materiel 
Management, and the VA National Acquisition Center on a semiannual 
basis, to be received by OSDBU not later than April 30 for the period 
ending March 31, and November 1 for the period ending September 30.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
55 FR 49900, Dec. 3, 1990; 56 FR 44011, Sept. 6, 1991; 63 FR 69220, Dec. 
16, 1998]



819.202-70  Additional responsibilities.

    In addition to the duties designated in FAR 19.202, VA contracting 
officers will perform the following functions in furtherance of the 
small business program:
    (a) Develop a plan of operation to increase the share of contracts 
and purchase orders awarded to small business, including veteran, and 
Vietnam era and disabled veteran-owned concerns.
    (b) Promote the disadvantaged business program through the SBA 8(a) 
procedures set forth in Subpart 819.8.
    (c) Review the types and classes of items and services to be 
purchased to determine the applicability of individual small business 
set-asides. Class set-asides, established in accordance with criteria in 
FAR 19.503, shall be reviewed at least annually to determine whether 
items or services procured under a unilateral or joint set-aside should 
be modified or withdrawn. Updated lists of acquisitions reserved for 
small business on a class basis shall be maintained by heads of 
contracting activities.
    (d) On an annual basis, VA acquisition personnel shall request a 
Procurement Automated Source System (PASS) listing of veteran-owned, 
including Vietnam era and disabled, and woman-owned businesses capable 
of meeting identified requirements. Acquisition personnel will utilize 
PASS as a primary source file. Firms identified on the PASS list shall 
be included on solicitation mailing lists.
    (e) Assure that small business firms are identified on bid 
abstracts.
    (f) Assure that specifications are not unduly restrictive, thereby 
enabling small business participation to the maximum extent feasible.
    (g) Assist and counsel small business firms with individual 
problems.
    (h) Provide for counseling nonresponsive or nonresponsible small 
business bidders to help qualify them for future awards.
    (i) Attend conferences and meetings publicizing the small business 
program.
    (j) Promote the award of research contracts to small business firms.
    (k) Promote goals for small business, small business set-asides, 
small business subcontracting, 8(a) procurements, and purchases from 
women-owned businesses.
    (l) Review all urgent and sole source procurements to determine that 
they are sparingly made, thoroughly documented and approved by the head 
of the contracting activity.
    (m) If the acquisition activity is assigned an SBA Procurement 
Center Representative (PCR), assure that the representative is provided 
logistical support, cooperation, and access to all reasonably obtainable 
contract information directly pertinent to the PCR's official duties.
    (n) Encourage technical and requirements personnel to identify 
veteran-owned and women-owned small business sources.
    (o) Assure that plans are forwarded as specified in FAR 19.705-6(b).

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 51 
FR 23070, June 25, 1986; 52 FR 28559, July 31, 1987; 55 FR 49900, Dec. 
3, 1990; 56 FR 44011, Sept. 6, 1991; 63 FR 69220, Dec. 16, 1998]



               Subpart 819.5_Set-Asides for Small Business



819.502-2  Total set-asides.

    (a) When a total small business set-aside is made, one of the 
following statements, as applicable, will be included in the 
solicitation for bids:

[[Page 187]]

    (1) Notice of total small business set-aside, page --, applies to 
all items in this solicitation.
    (2) Notice of total small business set-aside, page --, applies to 
items -- through -- in this solicitation.
    (b) Contracting officers must ensure that appropriate product or 
service classification and the related size standard are included in 
each solicitation.
    (c) All proposed procurement for construction anticipated to cost 
between $10,000 and $3 million and all proposed procurements for 
architect-engineer services construction projects of $3 million and less 
will be considered as though SBA had initiated a set-aside request. 
Determinations of the need to deviate from this policy made by the head 
of a contracting activity will require review by the Director, Office of 
Small and Disadvantaged Business Utilization.

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 63 
FR 69220, Dec. 16, 1998]



819.502-3  Partial set-asides.

    When, in accordance with the provisions of FAR 19.502-3, it is 
determined that a particular procurement will be partially set aside for 
exclusive small business participation, the solicitation for bids shall 
state the appropriate product or service classification and appropriate 
size standard and the following statement shall be placed on the face 
page:

    Notice of partial small business set-aside, page ----, applies to 
Item ------ through Item ------ in this solicitation.

[63 FR 69220, Dec. 16, 1998]



     Subpart 819.6_Certificates of Competency and Determinations of 
                               Eligibility



819.602-3  Appealing Small Business Administration's decision to issue 
Certificates of Competency.

    Formal VA appeals of an initial concurrence by the SBA Central 
Office in an SBA Regional Office decision to issue a Certificate of 
Competency (CoC) will be processed as follows:
    (a) When the contracting officer believes that VA should formally 
appeal the concurrence by the SBA Central Office in an SBA Regional 
Office decision to issue a CoC, the contracting officer will so notify 
the Deputy Assistant Secretary for Acquisition and Materiel Management 
(95B) in writing within five business days after receipt of the SBA 
Central Office's written confirmation of its determination. Within ten 
business days of the contracting officer's receipt of the SBA's written 
confirmation (or within a period acceptable to VA and the SBA), the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95B) 
will advise the SBA Central Office that VA intends to file a formal 
appeal.
    (b) Within ten business days of the contracting officer's receipt of 
the SBA Central Office's written confirmation, the contracting officer 
will furnish an original and one copy of the appeal file to the Deputy 
Assistant Secretary for Acquisition and Materiel Management (95B). The 
file must contain a copy of the bid/offer from the firm considered 
nonresponsible, a copy of the bid/offer from the firm otherwise in line 
for award, a copy of the bid, a copy of the bid abstract, a copy of 
SBA's CoC Review Committee report, a copy of all correspondence with SBA 
on the matter, and the contracting officer's narrative statement 
establishing the error, omission, or other basis for disputing SBA's 
proposed responsibility determination.
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (95B) will review the file prepared by the contracting 
officer. If the contracting officer's position is accepted, the Deputy 
Assistant Secretary for Acquisition and Materiel Management (95B) will 
transmit the formal appeal to the SBA Central Office within ten business 
days after notifying that office of VA's intent to appeal (or within a 
period acceptable to VA and the SBA). The contracting officer will be 
informed of the final SBA decision.
    (d) If, after the Central Office review, it is decided that a formal 
appeal should not be made to the SBA, the contracting officer will be 
advised of this decision and that the CoC should be accepted by VA. The 
SBA Central Office will also be advised that VA will

[[Page 188]]

not pursue its formal appeal. If the decision concerns major 
construction projects and the Office of Facilities Management disagrees 
with the decision made by the Deputy Assistant Secretary for Acquisition 
and Materiel Management, the matter will be referred to the Senior 
Procurement Executive for a final VA determination.

[52 FR 46083, Dec. 4, 1987, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69220, Dec. 16, 1998]



 Subpart 819.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



819.800  General.

    (a) No contract will be entered into with SBA under section 8(a) of 
the Small Business Act (15 U.S.C. 637(a)) unless a certification is made 
by the Administrator of that agency, or designee, that SBA is competent 
to perform the contract.
    (b) When it is determined that the requirements of the Department of 
Veterans Affairs are appropriate for inclusion in this program, the 
contracting officer will make this fact known to proper officials of the 
SBA regional office servicing his/her area. However, when projects 
funded from minor construction appropriation (between $400,000 and $2 
million) are proposed for 8(a) acquisition, the Director, Office of 
Small and Disadvantaged Business Utilization (OSDBU) (00SB), shall be 
contracted by telephone or notified in writing in order to afford the 
OSDBU an opportunity to identify possible 8(a) sources prior to 
apprising SBA officials. If the certification required by paragraph (a) 
of this section is received, the Department of Veterans Affairs 
contracting officer will secure from SBA the name(s) and location(s) of 
their subcontractor(s) and the unit price(s) to be paid. Should these 
prices be within a range acceptable to the Department of Veterans 
Affairs, the contracting officer will notify SBA of acceptance.
    (c) The contract will be made between the Department of Veterans 
Affairs and SBA and will be administered by the Department of Veterans 
Affairs.
    (d) In addition to meeting the requirements of 801.602-70, 
contracting officers will secure cost and pricing data prescribed in FAR 
15.403-4 and 815.804-2 when negotiating contracts under the SBA 8(a) 
program. Contracting officers will request an audit in accordance with 
815.805-5 on proposals in excess of $500,000 before negotiating any 
contract or modification.

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 40064, Sept. 29, 1989. Redesignated and amended at 63 FR 69220, Dec. 
16, 1998]



819.803  Selecting acquisitions for the 8(a) program.

    The contracting officer will specify in writing the time limit for 
SBA to propose an acceptable 8(a) subcontractor. The time limit should 
be between 30 and 45 days, but may be extended by the contracting 
officer.

[50 FR 793, Jan. 7, 1985]



819.804  Evaluation, offering, and acceptance.

    (a) The contracting officer will notify SBA in writing of the time 
limit for contract negotiations in accordance with FAR 19.804-2. The 
time limit, as a minimum, should be 45 days, but may be extended by the 
contracting officer.

[50 FR 793, Jan. 7, 1985, as amended at 63 FR 69220, Dec. 16, 1998]



819.806  Pricing the 8(a) contract.

    In order to expedite the 8(a) process, SBA should be informed as 
soon as a disparity between the 8(a) offered price and the estimated 
fair market price is determined. The SBA and the VA contracting office 
should collaborate to determine if the disparity is:
    (a) A result of deficiencies in developing the fair market price, 
thereby requiring revision to the estimate;
    (b) A result of overpricing by the 8(a) company, thereby requiring 
further efforts to negotiate a decrease in the offered price; or
    (c) A legitimate differential which should be funded through the SBA 
business development expense.

[52 FR 37317, Oct. 6, 1987. Redesignated at 63 FR 69220, Dec. 16, 1998]

[[Page 189]]



819.806-4  Funding business development expense.

    If SBA declines to fund the business development expense, it will be 
reported in accordance with 819.870.

[52 FR 37317, Oct. 6, 1987]



819.807  Estimating fair market price.

    (a) Estimating the fair market price is a crucial initial step in 
determining what is a reasonable price for a negotiated 8(a) contract. 
For supplies and equipment, previous prices paid under competitive 
conditions, adjusted for inflation, may provide necessary data to make 
such an estimate.
    (b) Estimating fair market price for such services as architect-
engineer and construction may be accomplished through independent cost 
estimates and other pertinent data obtained from SBA when the estimated 
fair market price is not fully supportable from available documentation 
(see FAR 19.807).

[52 FR 37317, Oct. 6, 1987. Redesignated and amended at 63 FR 69220, 
Dec. 16, 1998]



819.807-70  Commitments of Office of Facilities Management funded projects 
for the 8(a) program.

    Major and minor projects funded by the Office of Facilities 
Management (including those delegated to the VHA medical facilities) 
which have been committed to the 8(a) program will not be withdrawn from 
that program without the consent of the Office of Small and 
Disadvantaged Business Utilization (00SB). Requests for consent from 
00SB will normally be in writing and will clearly set forth the 
circumstances necessitating 8(a) withdrawal. If the contracting officer 
determines that time does not permit a written request, an oral request 
will be made. Such an oral request will be confirmed in writing.

[49 FR 12608, Mar. 29, 1984, as amended at 52 FR 46083, Dec. 4, 1987; 54 
FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]



819.809-70  Procurement of supplies, services, and research and development.

    (a) Contracts for supplies, equipment and services other than 
construction will be prepared as any other prime contract and in 
accordance with FAR Subpart 19.8.
    (b) The Department of Veterans Affairs contracting officer will 
forward the prime contract to SBA in sufficient numbers to furnish two 
copies to SBA and one copy to each subcontractor. SBA will return the 
signed original to the Department of Veterans Affairs contracting 
officer.



819.809-71  Procurement of construction.

    Construction projects which have been selected for inclusion in this 
program will be contracted for as provided in this section and FAR 
Subpart 19.8.
    (a) The contracting officer will submit, for each project so 
identified, the complete project listing including technical 
specifications, drawings and wage rates to the proper official of the 
appropriate SBA regional office. Should SBA select a competent 
subcontractor capable of performing the work, they will so certify to 
the Department of Veterans Affairs contracting officer. They will 
furnish him/her the name and complete address of the subcontractor(s), 
the project involved and the price(s) quoted. If the price quoted is 
within the range acceptable to the Department of Veterans Affairs, the 
contracting officer will indicate acceptance to SBA.
    (b) When the contracting officer receives Standard Form 1442, 
Solicitation, Offer and Award (Construction, Alteration, or Repair), 
signed by SBA and the subcontractor, and the performance and payment 
bonds, the contracting officer will forward a notice to proceed to the 
subcontractor.



       Subpart 819.70_Veteran-Owned and Operated Small Businesses

    Source: 50 FR 793, Jan. 7, 1985, unless otherwise noted.



819.7001  Policy.

    (a) Pub. L. 93-237 amended the Small Business Act by directing SBA 
to give ``special consideration'' to veterans of the Armed Forces in all 
SBA programs. Consistent with and in furtherance of that statute, it is 
the policy of the Department of Veterans Affairs to encourage 
participation by veteran-

[[Page 190]]

owned and operated small businesses, including Vietnam era and disabled, 
in VA acquisitions.
    (b) All VA facilities having procurement requirements for which 
veteran-owned small businesses are known sources, will take affirmative 
action to solicit these firms and assist them in participating in VA 
acquisition opportunities.

[50 FR 793, Jan. 7, 1985, as amended at 55 FR 49900, Dec. 3, 1990]



819.7002  Definition.

    A veteran-owned small business is a small business that is at least 
51 percent owned by a veteran who also controls and operates the 
business. Control in this context means exercising the power to make 
policy decisions. Operate in this context means actively involved in 
day-to-day management. For purposes of this definition, eligible 
veterans include:
    (a) Veterans who served in the U.S. Armed Forces and were discharged 
or released under conditions other than dishonorable.
    (b) Vietnam era veterans who served for a period of more than 180 
days, any part of which was between August 5, 1964, and May 7, 1975, and 
were discharged other than dishonorably.
    (c) Disabled veterans with a minimum compensable disability of 30 
percent, or a veteran who was discharged for disability.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
55 FR 49900, Dec. 3, 1990]



819.7003  Procedure.

    (a) To obtain information on business development for veteran-owned 
businesses and further identify veteran-owned small businesses, 
contracting officers shall contact the veterans affairs officers at the 
local SBA district office. When counselling small businesses, 
contracting officers shall determine if the business is veteran-owned 
and operated and ensure that SF 129s are completed properly to identify 
veteran-owned business.
    (b) The veteran-owned business representation in 852.219-70 shall be 
included in all solicitations.

[55 FR 49901, Dec. 3, 1990]



819.7004  Waiver of the use of veteran-owned firms.

    It is the policy of the Department of Veterans Affairs to provide 
veteran-owned firms every opportunity to participate in the acquisition 
process. A contracting office wishing to waive this policy for a 
particular procurement involving other than small purchase procedures 
must first process a VA Form 90-2268. The contracting officer must 
clearly document on VAF 90-2268 the reasons that eligible veteran-owned 
firms are not intended to be solicited or quotations sought for the 
particular procurement. Exempt from this reporting requirement are SBA 
8(a) acquisitions.

[50 FR 793, Jan. 7, 1985, as amended at 52 FR 37317, Oct. 6, 1987; 52 FR 
46083, Dec. 4, 1987; 54 FR 40064, Sept. 29, 1989; 55 FR 49901, Dec. 3, 
1990; 63 FR 69220, Dec. 16, 1998]



PART 822_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
--Table of Contents




       Subpart 822.3_Contract Work Hours and Safety Standards Act

Sec.
822.304 Variations, tolerances, and exemptions.

   Subpart 822.4_Labor Standards for Contracts Involving Construction

822.478 Contract terminations.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12610, Mar. 29, 1984, unless otherwise noted.



       Subpart 822.3_Contract Work Hours and Safety Standards Act



822.304  Variations, tolerances, and exemptions.

    When a contract is entered into for nursing home care, the clause 
prescribed by FAR 22.305 will be modified to reflect the variation 
contained in 29 CFR 5.15(d)(3) as set forth in 852.222-70.

[[Page 191]]



   Subpart 822.4_Labor Standards for Contracts Involving Construction



822.478  Contract terminations.

    (a) Prior to terminating any contract because of violations of the 
labor standards provisions of the contract, contracting officers, other 
than those in the Office of Facilities Management will, through the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
present the facts in detail to the General Counsel for review. The 
contracting officer will be advised by the Deputy Assistant Secretary 
for Acquisition and Materiel Management as to the recommended action to 
be taken.
    (b) Prior to terminating a contract managed by the Office of 
Facilities Management for labor standards violation, the contracting 
officer will, through the Chief Facilities Management Officer, present 
the facts in detail to the General Counsel for review. The contracting 
officer will be advised by the Chief Facilities Management Officer, as 
to the recommended action.
    (c) If the contract is to be terminated, the Deputy Secretary for 
Acquisition and Materiel Management or the Chief Facilities Management 
Officer will submit the reports required by 29 CFR 5.7(d).

[49 FR 12610, Mar, 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69220, Dec. 16, 1998]



PART 824_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION--Table of Contents




             Subpart 824.1_Protection of Individual Privacy

Sec.
824.102 General.

                Subpart 824.2_Freedom of Information Act

824.202 Policy.

    Authority: 38 U.S.C. 210 and 40 U.S.C. 486(c).



             Subpart 824.1_Protection of Individual Privacy



824.102  General.

    (a) The pertinent Department rules regarding the implementation of 
the Privacy Act of 1974 consist of 38 CFR 1.575 through 1.584.

[49 FR 12611, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



                Subpart 824.2_Freedom of Information Act



824.202  Policy.

    Department rules implementing the Freedom of Information Act are 
contained in 38 CFR 1.550 through 1.559.

[49 FR 12611, Mar. 29, 1984; as amended at 54 FR 40064, Sept. 29, 1989]



PART 825_FOREIGN ACQUISITION--Table of Contents




                 Subpart 825.1_Buy American Act_Supplies

Sec.
825.102 Policy.
825.102-70 Nonavailability in the United States.
825.105 Evaluating offers.
825.108 Excepted articles, materials and supplies.

          Subpart 825.2_Buy American Act_Construction Materials

825.202 Policy.
825.202-70 Nonavailability in the United States.
825.203 Evaluating offers.

                Subpart 825.3_Balance of Payments Program

825.302 Policy.
825.302-70 Deviations from the Balance of Payments Program.
825.304 Excess and near-excess foreign currencies.
825.304-70 Determination of feasibility to use excess or near-excess 
          foreign currency.

                    Subpart 825.6_Customs and Duties

825.603 Procedures.
825.603-70 Technical assistance.

         Subpart 825.7_Restrictions on Certain Foreign Purchases

825.703 Exceptions.

[[Page 192]]

         Subpart 825.8_International Agreements and Coordination

825.870 Technical assistance.

        Subpart 825.10_Additional Foreign Acquisition Regulations

825.1001 Waiver of right to examination of records.

       Subpart 825.11_Solicitation Provisions and Contract Clauses

825.1102 Solicitation provisions and contract clauses.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12611, Mar. 29, 1984, unless otherwise noted.



                 Subpart 825.1_Buy American Act_Supplies



825.102  Policy.



825.102-70  Nonavailability in the United States.

    (a) If articles, materials, and supplies required for a particular 
procurement are not excepted in FAR 25.108, or when only foreign bids or 
offers are received, the determination concerning nonavailability 
required by FAR 25.108(b) will be prepared by the contracting officer 
for foreign construction materials costing less than $1 million. Each 
determination will be factually supported in writing and included in the 
contract file.
    (b) Nonavailability determinations for foreign materials costing 
over $1 million must be requested by field facility contracting officers 
from the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95). Each request for a determination must be fully 
justified with all pertinent facts.
    (c) A copy of all determinations made in accordance with paragraph 
(a) of this section shall be forwarded to the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95) concurrently with the 
submissions required by FAR 25.108 (b) and (c).

[49 FR 12611, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]



825.105  Evaluating offers.

    When a determination is required under FAR 25.105, the contracting 
officer will submit the proposed award to the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95) for approval by the 
Secretary. The submission will contain all the facts, including a 
comparison of all the bids or offers received, and any other pertinent 
information upon which a determination may be made. If approved, a 
report of the transaction will be prepared and submitted by the Deputy 
Assistant Secretary for Acquisition and Materiel Management in 
accordance with Executive Order 10582, dated December 17, 1954, as 
amended.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



825.108  Excepted articles, materials and supplies.

    The following items are added to the list of exceptions contained in 
FAR 25.108(d):

Glass, Wire
Glass, Lead
Insulin, Human.

[52 FR 32012, Aug. 25, 1987]



          Subpart 825.2_Buy American Act_Construction Materials



825.202  Policy.



825.202-70  Nonavailability in the United States.

    (a) If articles, materials, and supplies required for a particular 
procurement are not excepted in FAR 25.108, or when only foreign bids or 
offers are received, the determination concerning nonavailability 
required by FAR 25.202(a)(3) will be made by the contracting officer for 
foreign construction material costing $100,000 or less. Each 
determination will be factually supported in writing and included in the 
contract file.
    (b) Field facility contracting officers must request approval of 
nonavailability determinations from the Deputy Assistant Secretary for 
Acquisition and Materiel Management (95).
    (c) A copy of all determinations made in accordance with paragraph 
(a) of this section shall be forwarded to the

[[Page 193]]

Chief Facilities Management Officer, Office of Facilities Management, 
through the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95).
    (d) Each solicitation will include the clause specified in 852.236-
89. This provision reflects the general policy of not authorizing 
nondomestic materials on VA construction contracts.

[49 FR 12611, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 52 
FR 32012, Aug. 25, 1987; 54 FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 
16, 1998]



825.203  Evaluating offers.

    When a contracting officer believes that the requirement of the 
``Buy American Act'' is impracticable as provided in FAR 25.202(a)(2), 
or that it would be advantageous to VA to deviate from the provisions of 
the Act as authorized by FAR 25.203, authority to consummate the 
contract will be requested. The request containing all the facts, 
including a comparison of all the bids or offers received and any other 
pertinent information upon which a determination may be made, will be 
submitted through the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95), for approval by the Secretary. If approved, a 
report of the transaction will be prepared and transmitted by the Chief 
Facilities Management Officer, Office of Facilities Management, in 
accordance with Executive Order 10582, dated December 17, 1954, as 
amended.

[49 FR 12611, Mar. 29, 1984, as amended at 52 FR 32012, Aug. 25, 1987; 
54 FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]



                Subpart 825.3_Balance of Payments Program



825.302  Policy.



825.302-70  Deviations from the Balance of Payments Program.

    When a contracting officer believes that the requirement of the 
``Balance of Payments Program'' is not practicable as set forth in FAR 
25.302 (b)(2) or (b)(3), he/she will request authority to consummate the 
contract through the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95) for approval. Each request must be fully 
justified, containing all pertinent facts.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



825.304  Excess and near-excess foreign currencies.



825.304-70  Determination of feasibility to use excess or near-excess 
foreign currency.

    In accordance with FAR 25.304(c), contracting officers will submit 
requests for determination to utilize excess or near-excess foreign 
currencies to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (93).



                    Subpart 825.6_Customs and Duties



825.603  Procedures.



825.603-70  Technical assistance.

    Should the regulations contained in FAR 25.6 be inadequate to meet 
particular needs of a contracting officer in clearing items through 
customs and/or obtaining Duty Free Entry of goods, the nearest Regional 
Office of the United States Customs Service should be contacted for 
technical assistance. These offices are located as follows:

Regional Commissioner, U.S. Customs Service, 100 Summer St., Boston, 
Massachusetts 02110
Regional Commissioner, U.S. Customs Service, 99 S.E. 5th St., Miami, 
Florida 33131
Regional Commissioner, U.S. Customs Service, 585 Felipe St., Houston, 
Texas 77057
Regional Commissioner, U.S. Customs Service, 6 World Trade Center, New 
York, New York 10048
Regional Commissioner, U.S. Customs Service, 423 Canal St., New Orleans, 
Louisiana 70130
Regional Commissioner, U.S. Customs Service, 300 N. Los Angeles St., Los 
Angeles, California 90053
Regional Commissioner, U.S. Customs Service, 55 E. Monroe St., Chicago, 
Illinois 60603

[[Page 194]]



         Subpart 825.7_Restrictions on Certain Foreign Purchases



825.703  Exceptions.

    When felt to be in the best interest of the Government, the 
contracting officer may request exceptions to the requirements of FAR 
25.7 for purchases in excess of $10,000 from the Secretary through the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95). 
Each such request must be fully justified, containing all pertinent 
facts.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



         Subpart 825.8_International Agreements and Coordination



825.870  Technical assistance

    Contracting officers may obtain technical information or guidance on 
international agreements and treaties for procurements outside the 
United States by contacting the Executive Director and Chief Operating 
Officer, VA National Acquisition Center.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



        Subpart 825.10_Additional Foreign Acquisition Regulations



825.1001  Waiver of right to examination of records.

    (a) If the contracting officer determines that the ``Audit and 
Records--Negotiation'' clause with Alternate III should be used after 
all efforts to include the basic clause have failed, and provided that 
use of Alternate III of the clause is authorized in the instances cited 
in FAR 25.901, he/she may request, with appropriate documentation, a 
determination from the Secretary, through the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95). The Secretary, should he/
she concur in the contracting officer's determination that the clause 
should be omitted, will then forward an agency request for omission of 
the clause to the Comptroller General for a final determination as 
required by FAR 25.901(c)(1).
    (b) All determinations to omit the ``Audit and Records--
Negotiation'' clause will be supported by a determination and findings 
prepared by the contracting officer containing the information set forth 
in FAR 25.901(d). The completed determination and findings will be made 
a part of the contract file. One copy of the determination and findings 
will be forwarded to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95).

[49 FR 12611, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989. 
Redesignated and amended at 63 FR 69220, Dec. 16, 1998. Further 
redesignated at 67 FR 49258, July 30, 2002]



       Subpart 825.11_Solicitation Provisions and Contract Clauses



825.1102  Solicitation provisions and contract clauses.

    (a) The Buy American Act (41 U.S.C. 10a-d), except as modified by 
the Trade Agreements Act (TAA) and the North American Free Trade 
Agreement (NAFTA)), requires that only domestic construction material 
shall be used in the performance of contracts for construction. To 
clarify VA's position on foreign material, the contracting officer shall 
insert the clause at 852.236-89, Buy American Act, in solicitations and 
contracts for construction that contain the FAR clause at 52.225-9, Buy 
American Act'Balance of Payments Program'Construction Materials.
    (b) For solicitations and contracts for construction that include 
the FAR clause at 52.225-11, Buy American Act'Balance of Payment 
Program'Construction Materials Under Trade Agreements, with its 
Alternate I (i.e., subject only to the TAA), insert the clause at 
852.236-89, Buy American Act, with its Alternate I.
    (c) For solicitations and contracts that include the FAR clause at 
52.225-11 without its Alternate I (i.e., subject to both the TAA and 
NAFTA), insert the clause at 852.236-89, Buy American Act, with its 
Alternate II.

[67 FR 49258, July 30, 2002]

[[Page 195]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 828_BONDS AND INSURANCE--Table of Contents




           Subpart 828.1_Bonds and Other Financial Protections

Sec.
828.101 Bid guarantees.
828.101-2 Contract clause.
828.101-70 Safekeeping and return of bid guarantee.
828.106 Administration.
828.106-6 Furnishing information.
828.106-70 Bond premium adjustment.

          Subpart 828.2_ Sureties and Other Security for Bonds

828.203-7 Exclusion of individual sureties.

                         Subpart 828.3_Insurance

828.306 Insurance under fixed-price contracts.

   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts

828.7100 Scope of subpart.
828.7101 General.
828.7102 Extent of indemnification.
828.7103 Financial protection.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12612, Mar. 29, 1984, unless otherwise noted.



           Subpart 828.1_Bonds and Other Financial Protections



828.101  Bid guarantees.



828.101-2  Contract clause.

    Where a bid bond is required for supplies or services, the phrase 
``any cost of acquiring the work'' in paragraph (e) of the BID GUARANTEE 
clause in FAR 52.228-1 may be modified to refer to the cost of 
``supplies,'' ``services,'' etc.

[49 FR 12612, Mar. 29, 1984. Redesignated at 64 FR 40519, July 27, 
1999.]



828.101-70  Safekeeping and return of bid guarantee.

    (a) Certified checks or other negotiable security furnished as bid 
security with the three lowest acceptable bids will be retained in a 
safe. These will be returned by any method that will provide evidence of 
receipt, or in person upon presentation of proper receipt, after the 
contract and contract bonds have been signed and approved.
    (b) Certified checks or other negotiable security furnished in 
support of other than the three lowest acceptable bids should be 
returned promptly to the respective bidders by any method that will 
provide evidence of receipt or in person upon presentation of proper 
receipt.
    (c) Commercial bid bonds are not returned unless specifically 
requested by the bidders, and, even if requested by any of the three low 
bidders, are not returned until the contract and contract bonds have 
been executed by the successful bidder, or all bids have been rejected.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]



828.106  Administration.



828.106-6  Furnishing information.

    For all contracts except contracts awarded by the Office of 
Facilities Management, the head of the contracting activity, as defined 
in 802.100, shall be the Department designee referenced in FAR 28.106-
6(c) to furnish copies of payment bonds to requestors. For contracts 
awarded by the Office of Facilities Management, the Office of Facilities 
Management contracting officer shall be the Department designee.

[64 FR 40519, July 27, 1999]



828.106-70  Bond premium adjustment.

    When performance and payment bonds are required, the contract will 
contain the clause prescribed in 852.228-70.

[49 FR 12612, Mar. 29, 1984. Redesignated at 64 FR 40519, July 27, 1999]



           Subpart 828.2_Sureties and Other Security for Bonds

    Source: 64 FR 40519, July 27, 1999, unless otherwise noted.

[[Page 196]]



828.203-7  Exclusion of individual sureties.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is delegated authority to make the determinations referenced 
in FAR 28.203-7 to exclude individuals from acting as surety on bonds 
and to accept bonds from individuals named on the List of Parties 
Excluded from Federal Procurement and Nonprocurement Programs.



                         Subpart 828.3_Insurance



828.306  Insurance under fixed-price contracts.

    (a) Term contracts, or contracts of a continuing nature, for 
ambulance, automobile and aircraft service, will contain the provision 
in 852.237-71.
    (b) Exceptions. The provisions of paragraph (a) of this section do 
not apply to emergency or sporadic ambulance service authorized by VA 
Manual MP-1, part II, chapter 3; or other emergency or sporadic vehicle 
or aircraft services. Provided, That such service is not used solely for 
the purpose of avoiding entering into a continuing contract. Provided 
further, That such services will be obtained from firms known to carry 
insurance coverage in accordance with State or local requirements.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]



   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts



828.7100  Scope of subpart.

    (a) This subpart sets forth the policies and procedures concerning 
indemnification of contractors performing contracts covering medical 
research or development which involve risks of an unusually hazardous 
nature, as authorized by 38 U.S.C. 7317.
    (b) The authority to indemnify the contractor under this subpart 
does not create any rights to third parties which would not otherwise 
exist by law.
    (c) As used in this subpart the term ``contractor'' includes 
subcontractors of any tier under a contract containing an 
indemnification provision pursuant to 38 U.S.C. 7317.

[49 FR 12612, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998; 
64 FR 40519, July 27, 1999]



828.7101  General.

    (a) The approval for the indemnification of contractors will be made 
by the Secretary of Veterans Affairs.
    (b) Contracting Officers shall submit requests for approval, 
together with all available information, to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (95) for transmittal 
to the Secretary.

[49 FR 12612, Mar. 29, 1984, as amended at 54 FR 24173, June 6, 1989; 54 
FR 30044, July 18, 1989; 63 FR 69221, Dec. 16, 1998]



828.7102  Extent of indemnification.

    (a) Any contract for medical research or development authorized by 
38 U.S.C. 7303, the performance of which involves a risk of an unusually 
hazardous nature, may provide that the Government will indemnify the 
contractor against either or both of the following, but only to the 
extent that they arise out of the direct performance of the contract and 
to the extent not covered by the financial protection required under 
828.7103.
    (1) Liability (including reasonable expenses of litigation or 
settlement) to third persons, except liability under State or Federal 
worker's injury compensation laws to employees of the contractor 
employed at the site of and in connection with the contract for which 
indemnification is granted, for death, bodily injury, or loss of or 
damage to property, from a risk that the contract defines as unusually 
hazardous.
    (2) Loss of or damage to property of the contractor from a risk that 
the contract defines as unusually hazardous.
    (b) A contract that provides for indemnification in accordance with 
this subpart must also provide for:
    (1) Notice to the contracting officer of any claim or suit against 
the contractor for death, bodily injury, or loss of or damage to 
property; and

[[Page 197]]

    (2) Control of or assistance in the defense by the Government, at 
its election, of such suit or claim for which indemnification is 
provided in the contract.

[49 FR 12612, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]



828.7103  Financial protection.

    (a) The amount of financial protection that the contractor is 
required to have and maintain to cover liability to third persons and 
loss of or damage to the contractor's property shall be the maximum 
amount of insurance available from private sources; however, the 
Secretary may establish a lesser amount after taking into consideration 
the cost and terms of private insurance.
    (b) The financial protection may include private insurance, private 
contractual indemnities, self-insurance, other proof of financial 
responsibility, or a combination of such forms to provide the maximum 
amount required. When the contractor elects to utilize self insurance, 
proof of such financial responsibility up to the maximum amount required 
will be furnished the contracting officer prior to award.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]



PART 829_TAXES--Table of Contents




Sec.
829.000 Scope of part.

                   Subpart 829.2_Federal Excise Taxes

829.202 General exemptions.
829.202-70 Tax exemptions for alcohol products.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12614, Mar. 29, 1984, unless otherwise noted.



829.000  Scope of part.

    This part prescribes policies and procedures for exemptions from 
Federal excise taxes imposed on alcohol products purchased for use in 
the Department of Veterans Affairs medical care program.

[64 FR 38593, July 19, 1999]



                   Subpart 829.2_Federal Excise Taxes



829.202  General exemptions.



829.202-70  Tax exemptions for alcohol products.

    (a) General. (1) The procurement of spirits free of tax for 
nonbeverage purposes is permitted to Government agencies by regulations 
of the Bureau of Alcohol, Tobacco, and Firearms (ATF) (see 27 CFR 
211.231-237, 213.141-146 and 240.720-722). The use of tax-free alcohol, 
whiskey, beer, wine and denatured spirits for nonbeverage purposes shall 
include but not be limited to medicinal and scientific purposes and in 
the treatment of patients.
    (2) Authority is hereby delegated to the Director, Marketing Center, 
Hines, Illinois, and to the Chief, Acquisition and Materiel Management 
Service, Department of Veterans Affairs medical facilities to sign 
application permits on Bureau of Alcohol, Tobacco, and Firearms (ATF) 
prescribed forms. This authority is not to be redelegated.
    (b) Whiskey, alcohol, and denatured alcohol. (1) Application forms 
for tax-free purchases are to be obtained from and submitted to the 
Director, Bureau of Alcohol, Tobacco, and Firearms, Washington, DC 
20226.
    (2) ATF Form 1486, Specially Denatured Spirits for Use of United 
States, is the application/permit required for denatured spirits, and 
ATF Form 1444, Tax-Free Spirits for Use of United States, is required 
for distilled spirits (whiskey and alcohol). These are continuing 
permits to procure items tax free. Copies must be made available to the 
supplier in support of each procurement.
    (3) Purchases for excise tax-free whiskey and alcohol, not available 
through the depot can only be made from a distillery or a bonded 
premises. In accordance with 27 CFR 213.144, the vendor will also 
support each shipment with ATF 1473, Shipment and Receipt Specifically 
Denatured Tax-Free, or Recovered Spirits. The ATF 1473 will be completed 
by the accountable officer and the original copy will be forwarded to 
the Regional Regulatory Administrator whose address is shown in item

[[Page 198]]

12 of the form. A copy of ATF 1473 will be retained in the purchase 
order file.
    (c) Wine. No tax exemption form or ATF permit is required for the 
tax-free procurement of wine. An extra copy of a properly executed 
purchase order or requisition document may be furnished to the supplier 
(retailer, wholesaler or winery) to facilitate record keeping.
    (d) Beer. Tax-free beer may be procured only from licensed breweries 
and only when such product is prescribed for therapeutic use of 
patients. The application for an ATF permit is to be submitted in letter 
form to the Director, Bureau of Alcohol, Tobacco, and Firearms, 
Washington, DC 20226. The following information is required.
    (1) Name and address of facility;
    (2) Specific purpose for which beer will be used;
    (3) Quantity proposed to buy each month, year, etc.;
    (4) Name and address of brewery; and
    (5) Copy of document authorizing contracting officer to sign 
request.
    A new permit is needed only when beer is to be purchased from a 
different brewery than the one for which the original permit was 
requested.

[49 FR 12614, Mar. 29, 1984, as amended at 54 FR 24173, June 6, 1989]



PART 831_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




         Subpart 831.70_Contract Cost Principles and Procedures

Sec.
831.7000 Scope of subpart.
831.7001 Allowable costs under cost reimbursement vocational 
          rehabilitation and education contracts or agreements.
831.7001-1 Tuition.
831.7001-2 Special services or courses.
831.7001-3 Books, supplies and equipment required to be personally 
          owned.
831.7001-4 Medical services and hospital care.
831.7001-5 Secretary's Decision No. 557.
831.7001-6 Consumable instructional supplies.
831.7001-7 Reimbursement for other supplies and services.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12615, Mar. 29, 1984, unless otherwise noted.



         Subpart 831.70_Contract Cost Principles and Procedures



831.7000  Scope of subpart.

    This subpart contains general cost principles and procedures for the 
determination and allowance of costs in connection with the negotiation 
and administration of cost reimbursement type contracts pertaining to 
the furnishing of vocational rehabilitation, education, and training to 
eligible veterans under chapter 31 of Title 38, United States Code.



831.7001  Allowable costs under cost reimbursement vocational rehabilitation 
and education contracts or agreements.



831.7001-1  Tuition.

    (a) Except as provided in this section, when the contractor has a 
customary cost of tuition the charge to the Department of Veterans 
Affairs may not exceed that charged to similarly circumstanced 
nonveteran students; provided that where the contractor has more than 
one standard charge for the same service, the charge to the Department 
of Veterans Affairs will be the lowest price for the entire course, 
semester, quarter, or term which is offered or published.
    (b) VA will not normally pay tuition or incidental fees to 
institutions or establishments furnishing apprentice or other training 
on-the-job. VA may pay:
    (1) For such charges customarily made by nonprofit workshop or 
similar establishment for providing work adjustment training to 
similarly circumstanced nonveterans even though an incentive wage is 
paid the trainee as part of the training; or
    (2) For certain training expenses incurred by an employer providing 
on-the-job training following rehabilitation to the point of 
employability when such additional training is determined to be 
necessary by VA.
    (c) When the total cost of instruction is paid from Federal funds or 
a portion of the cost is covered by grants from the Federal Government, 
i.e., Smith-Hughes or other laws, excluding Federal Land Grant Funds, 
such subsidy

[[Page 199]]

will be taken into consideration in determining the charge to the 
Department of Veterans Affairs. The term, Federal Land Grant Funds, 
refers to those received under the Morrill-Nelson Act (Morrill Acts of 
1862 and 1890 and the Nelson amendment of 1907) and section 22 of the 
Bankhead-Jones Act of 1935.
    (d) Payments on behalf of a veteran who receives a fellowship, 
scholarship, grant-in-aid, assistantship, or similar award in complete 
or partial payment of tuition or fees or both will be made in accordance 
with the following:
    (1) The award will reduce, to the extent of the award, the amount of 
tuition or fee or both that is payable by the Department of Veterans 
Affairs.
    (2) Awards which are not paid in cash, except those which are made 
specifically for the purpose of defraying the cost of room and board in 
dormitories which will be disregarded, will reduce to the extent of the 
award the charges for which the Department of Veterans Affairs is 
responsible.
    (3) Cash awards may be retained by the veterans and will not be 
deducted from charges ordinarily paid by the Department of Veterans 
Affairs.
    (4) Waivers of tuition and fees provided under law by States or 
other Government authority will be utilized to reduce the charges 
payable by Department of Veterans Affairs in accordance with such 
waivers.
    (e) Enrollment fees in an amount sufficient to cover the cost of 
registration may be paid, provided the institution or training 
establishment usually makes such a charge, and it does not exceed that 
charge made to other students or trainees.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



831.7001-2  Special services or courses.

    Special services or courses are those services requested by the 
Department of Veterans Affairs which are over and above those 
customarily required by the institution for similarly circumstanced 
nonveterans and are considered by the contracting officer to be 
necessary for the rehabilitation of the trainee. The costs of such 
special services or courses will be negotiated prior to being requested 
by the Department of Veterans Affairs.



831.7001-3  Books, supplies and equipment required to be personally owned.

    (a) Reimbursement for books, supplies, or equipment and referred to 
as supplies, will be made as provided in this section.
    (1) Reimbursement will be made for those supplies customarily 
required to be owned personally by all students taking the same course 
or courses except that reimbursement may be made for items which are not 
specifically required by the school for pursuit of the course, but are 
determined to be needed by VA because of the demands of the course, 
general possession by other students, and the disadvantage imposed on 
the veterans by not having the item. In no instance will the supplies be 
in a greater variety, quality, or amount than required of nonveteran 
students. In this instance required is in contradistinction to requested 
or desirable to have or necessary for a future profession or job but not 
required by the institution of all students in the course.
    (2) When supplies are available in several prices, grades, or 
qualities, reimbursement may be made only for such quality or grade that 
will meet the requirements.
    (3) Partial payment agreements in which the Department of Veterans 
Affairs shares payment with the veterans is not allowable.
    (4) The costs incurred by the institution in connection with the 
veteran's thesis such as typing, printing, microfilming, or otherwise 
reproducing the required number of copies; research expenses when 
certified by the veterans committee chairman, major professor, 
department head, or appropriate dean that such expenses are required in 
order to complete the course requiring the preparation of a thesis are 
considered as supplies and are authorized for reimbursement.
    (5) When the institution operates a bookstore or supply store for 
all students the reimbursement for supplies issued to trainees will be 
no greater than charges made to nonveteran students.

[[Page 200]]

    (6) Where the institution, training establishment, or employer 
arranges for issuance of supplies to all students by stores or 
establishments not institutionally owned and to pay such store or 
establishment for supplies issued to trainees, reimbursement is 
allowable provided the charges are no greater than those paid by 
nonveterans or to the institutions whichever is the lesser.
    (7) Supplies purchased by the institution specifically for trainees 
will be reimbursed at the net cost to the institution.
    (8) Where the institution does not provide or arrange for issuance 
of generally required books, tools and supplies for students attending 
the facility, the institution, in cooperation with VA, may designate 
certain stores and establishments to provide generally required books, 
tools and supplies for veterans pursuing a vocational rehabilitation 
program. The vendor will be reimbursed in the same manner as for 
supplies provided or arranged for by the institutions.
    (9) Where it is customary in a survey subject to permit each student 
to obtain the aggregate of books for the subject on a rental basis 
(commonly referred to as a rental set) and the ownership or permanent 
possession by the student is not required, reimbursement is authorized 
for the rental charge provided it does not exceed the charge made to 
nonveteran students.
    (10) Educational and training institutions furnishing supplies to 
trainees which are required to be owned personally or on a rental basis 
by all students pursuing the same or similar course may be compensated 
for such services in an amount not exceeding 10 percent of the allowable 
charge for the supplies furnished or rented except:
    (i) Where the tuition covers the charges for supplies or rentals or 
a stipulated fee is assessed all students, handling charges are not 
allowable.
    (ii) The handling charge is not allowable for Government-owned books 
procured by the institution from the Library of Congress.
    (iii) In cases where an item of equipment will exceed $50 in cost, 
effort will be made to secure a lower handling charge than for those 
costing a lesser amount. The agreed percent for such handling charges 
will be included in the contract or added as an addendum.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



831.7001-4  Medical services and hospital care.

    (a) VA may pay the customary student health fee when payment of the 
fee is required for similarly circumstanced nonveterans. If payment of 
the fee is not required for similarly circumstanced nonveterans payment, 
payment may be made if it is determined by the Veterans Health 
Administration that such payment is in the best interest of the veteran 
and the government.
    (b) Where medical services or hospital care not covered by the 
customary students health fee are available in the school operated 
facilities or arrangements have been made by the institution with 
doctors and hospitals in the immediate area, reimbursement by the 
Veterans Benefits Administration for such services may be made in a 
contract for such services provided that the Director, VA Medical 
Center, determines:
    (1) That such arrangements are necessary to provide timely medical 
care for veterans attending the facility under provisions of Chapter 31; 
and
    (2) The general rates established for such services do not exceed 
the rates established by the Under Secretary for Health.
    (c) VA may reimburse a rehabilitation facility for incidental 
medical services provided during a veteran's program at the facility.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69221, Dec. 16, 1998]



831.7001-5  Secretary's Decision No. 557.

    (a) Fees and expenses authorized under Secretary's Decision No. 557 
may be authorized for payment when the educational institution or 
training establishment makes such payments on behalf of the veteran.
    (b) Payment for fees and expenses not made by the educational 
institution or training establishment will be made in

[[Page 201]]

accordance with the applicable provisions of parts 812, 813 or 815 of 
this chapter and FAR parts 12, 13, or 15.

[49 FR 12615, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]



831.7001-6  Consumable instructional supplies.

    (a) Reimbursement for consumable instructional supplies which 
institutions require for the instruction of all students, veteran or 
nonveteran pursuing the same or comparable course or courses will be 
made when:
    (1) The supplies are entirely consumed in the fabrication of a 
required project.
    (2) The supplies are not consumed but are of such a nature that they 
cannot be salvaged from the end product for reuse for further 
instructions by disassembling or dismantling the end product.
    (b) Reimbursement for consumable instructional supplies is not 
allowable when:
    (1) The supplies can be salvaged for reuse.
    (2) The supplies used in a project which has been elected by the 
student as an alternate class project in order to produce an end product 
of greater value than that which is normally required to learn the 
skills of the occupation and which will become his property upon 
completion.
    (3) The supplies used in a project which has been selected by the 
institution to provide the student with a more elaborate end product 
than is required to provide adequate instruction as an inducement to the 
veteran to elect a particular course of study.
    (4) The salable value of the end product is equal to or greater than 
the cost of the supplies used in its fabrication or assembly and a 
reasonable use has not been made of such supplies so that they are not 
readily salvaged from the end product to be reused for instructional 
purposes.
    (5) The end product is of permanent value and retained by the 
institution.
    (6) A third party provides the articles or equipment for repair or 
improvement and for which he or she would otherwise pay a commercial 
price.
    (7) The number of projects resulting in end products in excess of 
the numbers normally required to teach the recognized job operations and 
processes of the occupation stipulated in the approved course of study.
    (8) The cost of supplies are included in the charge for tuition or 
as a fee designated for such purpose.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



831.7001-7  Reimbursement for other supplies and services.

    Reimbursement shall be made for other services and assistance which 
may be authorized under provisions of applicable Chapter 31 regulations 
including but not limited to employment and self-employment, initial and 
extended evaluation, and independent living services.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



PART 832_CONTRACT FINANCING--Table of Contents




          Subpart 832.1_Non-Commercial Item Purchase Financing

832.111 Contract clauses for non-commercial purchases.

                     Subpart 832.4_Advance Payments

Sec.
832.402 General.
832.404 Exclusions.

             Subpart 832.5_Progress Payments Based on Costs

832.502 Preaward matters.
832.502-2 Contract finance office clearance.

                   Subpart 832.8_Assignment of Claims

832.805 Procedure.
832.805-70 Distribution/notification of assignment of claims.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12616, Mar. 29, 1984, unless otherwise noted.



          Subpart 832.1_Non-Commercial Item Purchase Financing



832.111  Contract clauses for non-commercial purchases.

    (a) In solicitations and contracts for construction that include the 
FAR clause at 52.232-5, Payments Under

[[Page 202]]

Fixed-Price Construction Contracts, but that do not contain a section 
entitled ``Network Analysis System (NAS),'' the contracting officer 
shall insert the clause at 852.236-82, Payments under fixed-price 
construction contracts (without NAS). When the solicitations or 
contracts include guarantee period services, the contracting officer 
shall use the clause with its Alternate I.
    (b) In solicitations and contracts for construction that include the 
FAR clause at 52.232-5, Payments Under Fixed-Price Construction 
Contracts, and that also contain a section entitled ``Network Analysis 
System (NAS),'' the contracting officer shall insert the clause at 
852.236-83, Payments under fixed-price construction contracts (including 
NAS). When the solicitations or contracts include guarantee period 
services, the contracting officer shall use the clause with its 
Alternate I.

[67 FR 49258, July 30, 2002]



                     Subpart 832.4_Advance Payments



832.402  General.

    The determination required by FAR 32.402(c)(1)(iii) will be made by 
the Deputy Assistant Secretary for Acquisition and Materiel Management. 
Prior to award, contracting officers will submit, through channels, the 
information required by FAR 32.409-1 for such determinations.



832.404  Exclusions.

    (a) Under the provisions of 31 U.S.C. 3324(d)(2), as amended, 
advance payment is authorized for subscriptions or other charges for 
newspapers, magazines, periodicals and other publications for official 
use of any office under the Government from appropriations available 
therefore, notwithstanding the provisions of 31 U.S.C. 3324(a). The term 
``other publications'' includes any publication printed, microfilmed, 
photocopied or magnetically or otherwise recorded for auditory or visual 
usage.
    (b) Under the provisions of 31 U.S.C. 1535, advance payment may be 
made for services and supplies obtained from another Government agency. 
This includes items such as coupons from the Government Printing Office 
and Operator Permits, Civilian Defense Radio System, and from the 
Federal Communications Commission.
    (c) Under the provisions of 5 U.S.C. 4109, advance payment may be 
made for all or any part of the necessary expenses for training 
Government employees in Government or non-Government facilities. This 
includes the purchase or rental of books, materials and supplies or 
services directly related to the training of a Government employee.



             Subpart 832.5_Progress Payments Based on Costs



832.502  Preaward matters.



832.502-2  Contract finance office clearance.

    Prior approval of actions listed in FAR 32.502-2 will be obtained 
from the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95). Requests for approval shall be accompanied by full 
justification together with the recommendations of the contracting 
officer.

[49 FR 12616, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]



                   Subpart 832.8_Assignment of Claims



832.805  Procedure.



832.805-70  Distribution/notification of assignment of claims.

    (a) The Contracting officer will file the retained copy of the 
notice of assignment and the certified copy of the original instrument 
of assignment with the General Accounting Office copy of the contract.
    (b) Contracting officers will notify field facilities of any 
recognized assignment of payments under contracts executed in Central 
Office or by the VA National Acquisition Center divisions in all cases 
where payment for articles and services under such contracts are 
certified and approved for payment in the field.

[49 FR 12616, Mar. 29, 1984, as amended at 54 FR 40065, Sept. 29, 1989; 
63 FR 69221, Dec. 16, 1998]

[[Page 203]]



PART 833_PROTESTS, DISPUTES, APPEALS--Table of Contents




                         Subpart 833.1_Protests

Sec.
833.102 General.
833.103 Protests to the Department.
833.104 Protests to GAO.
833.106 Solicitation provision.

                   Subpart 833.2_Disputes and Appeals

833.209 Suspected fraudulent claims.
833.211 Contracting officer's decision.
833.212 Contracting officer's duties upon appeal.
833.214 Alternative dispute resolution (ADR).

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



                         Subpart 833.1_Protests



833.102  General.

    Solicitations shall instruct interested parties (see FAR provision 
52.233-2) to deliver a copy of any protest filed with the General 
Accounting Office (GAO) to the contracting officer and the appropriate 
Central Office activity as follows:
    (a) For contracts to be awarded by the Office of Facilities 
Management: Chief Facilities Management Officer, Office of Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (b) For all other contracts: Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team, 
Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 
20420.

[51 FR 23070, June 25, 1986, as amended at 52 FR 28559, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 58 FR 48974, Sept. 21, 1993; 61 FR 11586, 
Mar. 21, 1996; 63 FR 15318, Mar. 31, 1998]



833.103  Protests to the Department.

    (a) Filing of protests. (1) An interested party may protest to the 
contracting officer or, as an alternative, may request an independent 
review by filing a protest with the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team, 
or, for solicitations issued by the Office of Facilities Management, the 
Chief Facilities Management Officer, Office of Facilities Management. A 
protest filed with the Deputy Assistant Secretary for Acquisition and 
Materiel Management or the Chief Facilities Management Officer will not 
be considered if the interested party has a protest on the same or 
similar issues pending with the contracting officer.
    (2) Protests must be in writing and addressed as follows:
    (i) Contracting officer protests--address where offer/bid is to be 
submitted;
    (ii) Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Administration Team, Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Washington, DC 20420; or
    (iii) Chief Facilities Management Officer, Office of Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (3) Protests regarding certain issues may be dismissed by VA without 
consideration of the merits or forwarded to another agency for 
appropriate action. Among these protests are the following:
    (i) Contract administration. The administration of an existing 
contract is within the discretion of the contracting agency. Disputes 
between a contractor and the Department are resolved pursuant to the 
disputes clause of the contract and the Contract Disputes Act of 1978. 
41 U.S.C. 601-613.
    (ii) Small business size standards and standard industrial 
classification. Challenges of established size standards or the size 
status of particular firms, and challenges of the selected standard 
industrial classification are for review solely by the Small Business 
Administration. 15 U.S.C. 637(b)(6); 13 CFR 121.3-6 (1984).
    (iii) Small business certificate of competency program. Any referral 
made to the Small Business Administration pursuant to section 8(b)(7) of 
the Small Business Act, or any issuance of a certificate of competency 
or refusal to issue a certificate under such section is not reviewed in 
accordance with bid protest procedures absent a showing of

[[Page 204]]

possible fraud or bad faith on the part of Government officials.
    (iv) Protests under section 8(a) of the Small Business Act. Since 
contracts are let under section 8(a) of the Small Business Act to the 
Small Business Administration at the contracting officer's discretion 
and on such terms as agreed upon by the procuring agency and the Small 
Business Administration, the decision to place or not to place a 
procurement under the 8(a) subcontract are not subject to review absent 
a showing of possible fraud or bad faith on the part of Government 
officials or that regulations may have been violated. 15 U.S.C. 637(a).
    (v) Affirmative determination of responsibility by the Contracting 
Officer. Because a determination that a bidder or offeror is capable of 
performing a contract is based in large measure on subjective judgments 
which generally are not readily susceptible to reasoned review, an 
affirmative determination of responsibility will not be reviewed, absent 
a showing that such determination was made fraudulently or in bad faith 
or that definitive responsibility criteria in the solicitation were not 
met.
    (vi) Walsh-Healey Public Contract Act. Challenges of the legal 
status of a firm as a regular dealer or manufacturer within the meaning 
of the Walsh-Healey Act is for determination solely by the procuring 
agency, the Small Business administration (if a small business is 
involved) and the Secretary of Labor. 41 U.S.C. 35-45.
    (vii) Subcontractor protests. The contracting agency will not 
consider subcontractor protests except where the subcontract is by or 
for the Government.
    (viii) Judicial proceedings. The contracting agency will not 
consider protests where the matter involved is the subject of litigation 
before a court of competent jurisdiction.
    (b) Where appropriate, alternative dispute resolution (ADR) 
procedures may be used to resolve protests at any stage in the protest 
process. The Department of Veterans Affairs Board of Contract Appeals 
(VABCA) is an independent and neutral entity within the Department of 
Veterans Affairs and is available to serve as the third-party neutral 
(Neutral) for bid protests. If ADR is used, the Department of Veterans 
Affairs will not furnish any documentation in an ADR proceeding beyond 
what is allowed by the Federal Acquisition Regulation.
    (c) Action upon receipt of protest. For protests filed with the 
contracting officer, the head of the contracting activity (HCA) shall be 
the approving official for the determinations identified in FAR 
33.103(f)(1) and (f)(3). If the HCA is also the contracting officer, the 
approving official shall be the Deputy Assistant Secretary for 
Acquisition and Materiel Management. For protests filed with the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, those individuals shall be the approving 
officials for the determinations identified in FAR 33.103(f)(1) and 
(f)(3).
    (d) Requests for GAO advance decisions. When a written protest has 
been filed with the contracting officer and the contracting officer 
considers it desirable to do so, the contracting officer may request an 
advance decision from the Comptroller General. The submission to the 
Comptroller General will be sent through the Deputy Assistant Secretary 
for Acquisition and Materiel Management, Acquisition Administration Team 
or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, and will include the material indicated in 
FAR 33.104(a)(2). The contracting officer shall notify the protesting 
individual or firm promptly in writing of the decision of the 
Comptroller General.
    (e) Protest after award. When a written protest is filed with the 
contracting officer after contract award:
    (1) If FAR 33.103(f)(3) requires suspension of contract performance, 
the contracting officer shall seek to obtain a mutual agreement with the 
contractor to suspend performance on a no-cost basis and, if successful, 
shall document the suspension with a supplemental agreement. If 
unsuccessful, the contracting officer shall issue a stop-work order in 
accordance with contract clause FAR 52.233-3, Protest After Award.

[[Page 205]]

    (2) If suspension of contract performance is not required by FAR 
33.103(f)(3) and if the contracting officer determines that the award 
was proper, the contracting officer shall furnish the protester a 
written explanation of the basis for the award which is responsive to 
the allegations of the protest. The contracting officer shall advise the 
protester that the protester may appeal the determination to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, in the case of a contract awarded by the 
Office of Facilities Management, or the Comptroller General, as 
specified in internal Department guidance.
    (3) If suspension of contract performance is not required by FAR 
33.103(f)(3) but the contracting officer determines that the award is 
questionable, the contracting officer may consult with the Office of the 
General Counsel (025) and shall advise the contractor of the protest and 
invite the contractor to submit comments and relevant information. The 
contracting officer shall submit the case promptly to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, in the case of a contract awarded by the 
Office of Facilities Management, who may consult with the Office of the 
General Counsel (025) and who shall either advise the contracting 
officer of the appropriate action to take, or submit the case to the 
Comptroller General for a decision. The contracting officer shall 
provide interested parties with a copy of the final decision.
    (f) Agency appellate review of contracting officer's protest 
decision. An interested party may request an independent review of a 
contracting officer's protest decision by filing an appeal with the 
Deputy Assistant Secretary for Acquisition and Materiel Management or, 
for solicitations issued by the Office of Facilities Management, with 
the Chief Facilities Management Officer, Office of Facilities 
Management. To be considered timely, the appeal must be received by the 
Deputy Assistant Secretary for Acquisition and Materiel Management or, 
for solicitations issued by the Office of Facilities Management, by the 
Chief Facilities Management Officer, Office of Facilities Management, 
within 10 calendar days of the date the interested party knew, or should 
have known, whichever is earlier, of the basis for the appeal. Appeals 
shall be addressed as provided in paragraphs (a)(2)(ii) or (iii) of this 
section. Appeals shall not extend GAO's timeliness requirements for 
appeals to GAO. By filing an appeal as provided herein, an interested 
party may waive its rights to further appeal to the Comptroller General 
at a later date. Agency responses to appeals submitted to the agency 
shall be reviewed and concurred in by the Office of the General Counsel 
(025).

[51 FR 23070, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
52 FR 49017, Dec. 29, 1987; 54 FR 40065, Sept. 29, 1989; 58 FR 48974, 
Sept. 21, 1993; 61 FR 11586, Mar. 21, 1996; 61 FR 20492, May 7, 1996; 63 
FR 15318, 15319, Mar. 31, 1998]



833.104  Protests to GAO.

    (a) General. (1) When a protest before or after award has been 
lodged with the General Accounting Office (GAO), the contracting officer 
will prepare a report to be forwarded to the Deputy Assistant Secretary 
for Acquisition and Materiel Management, Acquisition Resources Service, 
or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, within 5 workdays after receipt of verbal 
notice of the protest or receipt of a copy of the protest, whichever 
occurs first, for preparation of the Department report. The report 
should include a copy of the documentation indicated in FAR 
33.104(a)(3)(ii).
    (2) Contracting officers are responsible for the notification 
procedures outlined in FAR 33.104(a)(2).
    (b) Protests before award. When the Department has received notice 
from the GAO of a preaward protest filed directly with GAO, award shall 
not be made until the matter is resolved, unless the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition Resources 
Service, or the Chief Facilities Management Officer,

[[Page 206]]

Office of Facilities Management, as appropriate, approves the head of 
contracting activity findings required by FAR 33.104(b)(1) and GAO has 
been notified pursuant to FAR 33.104(b)(2).
    (c) Protests after award. Protests after award shall be handled in a 
manner consistent with procedures identified for protests before award. 
Although persons involved or affected by the filing of a protest may be 
limited, at least the contractor shall be furnished the notice of the 
protest and its basis by the contracting officer. When VA receives from 
GAO, within ten calendar days after award, a notice of protest filed 
directly with GAO, and it is determined by the head of the contracting 
activity pursuant to FAR 33.104(c)(2) that contract performance should 
be authorized, the written findings will first be approved by the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Resources Service (or the Chief Facilities Management Officer, Office of 
Facilities Management, as appropriate), and the GAO must be notified as 
required by FAR 33.104(c)(3).

[51 FR 23070, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 58 FR 48974, Sept. 21, 1993; 61 FR 11586, 
Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



833.106  Solicitation provision.

    (a) The contracting officer shall insert the provision at 852.233-
70, Protest Content, in each solicitation where the total value of all 
contract awards under the solicitation is expected to exceed the 
simplified acquisition threshold.
    (b) The contracting officer shall insert the provision at 852.233-
71, Alternate Protest Procedure, in each solicitation where the total 
value of all contract awards under the solicitation is expected to 
exceed the simplified acquisition threshold.

[63 FR 15319, Mar. 31, 1998]



                   Subpart 833.2_Disputes and Appeals



833.209  Suspected fraudulent claims.

    Matters relating to suspected fraudulent claims will be referred to 
the Assistant Inspector General, Office of Investigations (51) for 
investigation and referral to the Department of Justice. No collection, 
recovery or other settlement action will be initiated while the matter 
is in the hands of the Department of Justice without first obtaining the 
concurrence of the U.S. Attorney concerned, through the Inspector 
General.

[51 FR 23070, June 25, 1986]



833.211  Contracting officer's decision.

    (a) When a dispute cannot be settled by agreement and a final 
decision under the Disputes clause of the contract is necessary, the 
contracting officer shall furnish the contractor his/her final decision 
in the matter.
    (b) The decision must be identified as a final decision, be in 
writing, and include a statement of facts in sufficient detail to enable 
the contractor to fully understand the decision and the basis on which 
it was made. It will normally be in the form of a statement of the claim 
or other description of the dispute with necessary references to the 
pertinent contract provisions. It will set forth those facts relevant to 
the dispute, with which the contractor and the contracting officer are 
in agreement, and as clearly as possible, the area of disagreement.
    (c) Except as provided in paragraph (d) of this section, the 
decision shall, in addition to the material required by FAR 
33.211(a)(4), contain the following:

    The Department of Veterans Affairs Board of Contract Appeals (VABCA) 
is the authorized representative of the Secretary for hearing and 
determining such disputes. The rules of the VABCA are published in 
section 1.783, of Title 38, Code of Federal Regulations. The address of 
the Board is 810 Vermont Avenue, NW., Washington, DC 20420.

[51 FR 23070, June 25, 1986, as amended at 52 FR 28561, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 61 FR 20492, May 7, 1996]



833.212  Contracting officer's duties upon appeal.

    (a) When a notice of appeal in any form has been received by the 
contracting officer, that officer will endorse thereon the date of 
mailing (or date of receipt, if otherwise conveyed) and within 10 days, 
will forward said original notice of appeal and a copy of the 
contracting officer's final decision

[[Page 207]]

letter to the Department of Veterans Affairs Board of Contract Appeals 
(VABCA). Copies of the notice of appeal and the final decision letter 
will be transmitted concurrently to the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Resources Service and 
the Assistant General Counsel (025). (In cases of construction contracts 
administered by the Office of Facilities Management, copies of appeal 
and final decision letter need not be transmitted to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Resources Service.)
    (b) Within 20 days of receipt of an appeal, or advice that an appeal 
has been filed, the contracting officer will assemble and transmit to 
the VABCA, through the Office of General Counsel (025), an appeal file 
consisting of all documents pertinent to the appeal, including:
    (1) The decision and findings of fact from which the appeal is 
taken;
    (2) The contract, including specifications and pertinent amendments, 
plans and drawings;
    (3) All correspondence between the parties pertinent to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued;
    (4) Transcripts of any testimony taken during the course of 
proceedings and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal with the 
VABCA; and
    (5) Any additional information considered pertinent.

[51 FR 23070, June 25, 1986; 51 FR 44179, Dec. 8, 1986; 61 FR 11586, 
Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



833.214  Alternative dispute resolution (ADR).

    (a) Contracting officers and contractors are encouraged to use 
alternative dispute resolution (ADR) procedures to resolve contract 
disputes before they become appealable disputes by using the Department 
of Veterans Affairs' ADR Program.
    (b) Under the Department's ADR Program, the Department of Veterans 
Affairs Board of Contract Appeals (VABCA or Board) Chair, who is the 
Department's Dispute Resolution Specialist, will appoint a Board member 
or hearing examiner (at no cost to either party) to serve as a Neutral 
to aid in resolving matters before they become appealable disputes. The 
administrative judges and hearing examiners are trained Neutrals and are 
available to assist in ADR proceedings.
    (c) Under the ADR Program, the parties are able to select the ADR 
process they believe will help resolve the matter. Everything discussed 
during the ADR meeting is confidential. In the event a Board member 
serves as a Neutral in a matter that is not resolved using ADR, that 
Board member shall keep all discussions confidential and shall have no 
further input or contact with the parties or other Board members in 
subsequent Board activities (ref. the Administrative Dispute Resolution 
Act, 5 U.S.C. 571-583; and, Federal Acquisition Regulation, Subpart 
33.2).
    (d) The Department of Veterans Affairs and contractors are also 
encouraged to use ADR in disputes appealed to the VABCA.

[63 FR 15319, Mar. 31, 1998]

[[Page 208]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 836_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




      Subpart 836.2_Special Aspects of Contracting for Construction

Sec.
836.202 Specifications.
836.203 Government estimate of construction costs.
836.204 Disclosure of the magnitude of construction projects.
836.206 Liquidated damages.
836.209 Construction contracts with architect-engineer firms.
836.213-4 Notice of award.
836.213-70 Notice to proceed.

                     Subpart 836.5_Contract Clauses

836.500 Scope of subpart.



836.501  Performance of work by the contractor.

836.513 Accident prevention.
836.521 Specifications and drawings for construction.
836.570 Correspondence.
836.571 Reference to ``standards.''
836.572 Government supervision.
836.573 Daily report of workers and materials.
836.574 Subcontractors and work coordination.
836.575 Schedule of work progress.
836.576 Supplementary labor standards provisions.
836.577 Worker's compensation.
836.578 Contract changes--supplement.
836.579 Special notes.

                Subpart 836.6_Architect-Engineer Services

836.602 Selection of firms for achitect-engineer contracts.
836.602-1 Selection criteria.
836.602-2 Evaluation boards.
836.602-4 Selection authority.
836.602-5 Short selection process for contracts not to exceed the 
          simplified acquisition threshold.
836.603 Collecting data on and appraising firms' qualifications.
836.606 Collecting data on and appraising firms' qualifications.
836.606-70 General.
836.606-71 Architect-engineer's proposal.
836.606-72 Contract price.
836.606-73 Application of 6-percent architect-engineer fee limitation.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12618, Mar. 29, 1984, unless otherwise noted.



      Subpart 836.2_Special Aspects of Contracting for Construction



836.202  Specifications.

    (a) The procedures described in part 811 shall be applicable to 
construction specifications.
    (b) The use of ``brand name or equal'' or other restrictive 
specifications by contract architect-engineers is specifically 
prohibited without the prior written approval of the contracting officer 
during the design stage. The contracting officer shall inform the 
prospective architect-engineers of this requirement during the 
negotiation phase, prior to award of a contract for design.
    (c) If it is determined that only one product will meet the 
Government's minimum needs and VA will not allow the submission of 
``equal'' products, the bidders must be placed on notice that the 
``brand name or equal'' provisions of the ``Material and Workmanship'' 
clause found at FAR 52.236.5, and any other provision which may 
authorize the submission of an ``equal'' product, will not apply. In 
order to properly alert bidders to this requirement, the contracting 
officer shall include the clause found at 852.236-90, ``Restriction on 
Submission and Use of Equal Products,'' in the solicitation.

[52 FR 282, Jan. 5, 1987, as amended at 53 FR 7756, Mar. 10, 1988; 53 FR 
9631, Mar. 24, 1988; 54 FR 40065, Sept. 29, 1989; 61 FR 20492, May 7, 
1996; 63 FR 17338, Apr. 9, 1998; 67 FR 49258, July 30, 2002]



836.203  Government estimate of construction costs.

    The overall amount of the Government estimate shall not be disclosed 
until after award of the contract. After award, the overall amount may 
then be disclosed upon request.

[67 FR 49258, July 30, 2002]

[[Page 209]]



836.204  Disclosure of the magnitude of construction projects.

    In lieu of the estimated price ranges described in FAR 36.204, the 
magnitude of VA projects should be identified in advance notices and 
solicitations in terms of one of the following price ranges:
    (a) Less than $25,000;
    (b) Between $25,000 and $100,000;
    (c) Between $100,000 and $250,000;
    (d) Between $250,000 and $500,000;
    (e) Between $500,000 and $1,000,000;
    (f) Between $1,000,000 and $2,000,000;
    (g) Between $2,000,000 and $5,000,000;
    (h) Between $5,000,000 and $10,000,000;
    (i) Between $10,000,000 and $20,000,000;
    (j) Between $20,000,000 and $50,000,000;
    (k) Between $50,000,000 and $100,000,000;
    (l) More than $100,000,000.


(This section has been promulgated as a deviation to the FAR as provided 
in FAR Subpart 1.4.)

[53 FR 1631, Jan. 21, 1988]



836.206  Liquidated damages.

    Liquidated damage provisions may be included in construction 
contracts when the criteria of 811.502 is met. If partial performance 
may be accepted and utilized to the advantage of the Government, the 
clause substantially as set forth in 852.211-78 will be included in 
addition to the clause set forth in FAR 52.211-12.

[49 FR 12618, Mar. 29, 1984, as amended at 63 FR 17338, Apr. 9, 1998]



836.209  Construction contracts with architect-engineer firms.

    When it is considered necessary or advantageous to award a contract 
for construction of a design-bid-build project, as defined at FAR 
36.102, to the firm or person that designed the project, prior approval 
will be requested from the facility director or manager or, for National 
Cemetery Administration contracts, the Director, Office of Construction 
Management, for contracts involving nonrecurring maintenance (NRM) funds 
or from the Chief Facilities Management Officer, Office of Facilities 
Management, for contracts involving construction funds. Complete 
justification will be furnished in the request. This section does not 
apply to design-build contracts, as defined at FAR 36.102.

[67 FR 49258, July 30, 2002]



836.213-4  Notice of award.

    The contracting officer shall provide the contractor a notice of 
award (letter of acceptance) for any contract award in excess of 
$25,000.

[67 FR 49259, July 30, 2002]



836.213-70  Notice to proceed.

    (a) Construction contractors will be given a written ``Notice to 
Proceed'' with the work. A letter notice to proceed will normally be 
sent only after performance and payment bonds and the completed contract 
forms, where applicable, have been returned by the contractor and are 
accepted by the contracting officer. If the urgency of the work or other 
proper reason requires the contractor to begin work immediately, the 
award letter may include the ``Notice to Proceed'' with the reservation 
that payments are contingent upon receipt and approval of the required 
bonds.
    (b) If the contract provides for liquidated damages, the notice to 
proceed will be sent by certified mail, return receipt requested, or any 
other method that provides signed evidence of receipt. The notice to 
proceed will advise the contractor that the work will be completed 
within ---- (insert contract time for completion) calendar days from the 
date of receipt shown on the certified mail receipt card returned by the 
post office or on the proof of delivery provided by the delivery 
service.
    (c) If the contract does not provide for liquidated damages, 
certified mail is not required. Notices to proceed for these contracts 
will establish a date for completion taking into consideration the time 
required for the notice to arrive by regular mail.
    (d) At the time the notice to proceed is sent to the contractor, a 
copy will be furnished to the resident engineer or the Chief, 
Engineering Service. A copy of the notice to proceed will be filed with 
copy A of the contract. When certified mail or other method of delivery 
is used, the certified mail receipt card returned by the post office or 
the proof of delivery provided by the delivery

[[Page 210]]

service will be attached to the copy of the notice to proceed. Copies of 
the notice to proceed will be filed with copies C and D of the contract 
after the date of receipt has been established and indicated thereon.

[49 FR 12618, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 61 
FR 11587, Mar. 21, 1996; 61 FR 20492, May 7, 1996. Redesignated and 
amended at 67 FR 49259, July 30, 2002]



                     Subpart 836.5_Contract Clauses



836.500  Scope of subpart.

    (a) The clauses and provisions prescribed in this subpart are set 
forth for use in fixed-price construction contracts in addition to those 
in FAR Subpart 52.2.
    (b) Additional clauses and provisions not inconsistent with those in 
FAR Subparts 36.5 and 52.2 and those prescribed in this subpart are 
authorized when determined necessary or desirable by the contracting 
officer, and when approved as provided in subpart 801.4.
    (c) Clauses and provisions inconsistent with those contained in FAR 
Subpart 36.5 and 52.2 and this subpart, but considered essential to the 
procurement of Department of Veterans Affairs requirements, shall not be 
used unless the deviation procedure set forth in subpart 801.4 has been 
complied with.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 796, Jan. 7, 1985. 
Redesignated and amended at 67 FR 49260, July 30, 2002]



836.501  Performance of work by the contractor.

    The contracting officer shall insert the clause at 852.236-72, 
Performance of work by the contractor, in solicitations and contracts 
for construction that contain the FAR clause at 52.236-1, Performance of 
Work by the Contractor. When the solicitations and contracts include a 
section entitled ``Network Analysis System (NAS),'' the contracting 
officer shall use the clause with its Alternate I.

[67 FR 49259, July 30, 2002]



836.513  Accident prevention.

    The contracting officer shall insert the clause at 852.236-87, 
Accident Prevention, in all solicitations that contain the clause at FAR 
52.236-13, Accident prevention, or its Alternate.

[58 FR 48974, Sept. 21, 1993; 58 FR 58730, Nov. 3, 1993]



836.521  Specifications and drawings for construction.

    The contracting officer shall insert the clause at 852.236-71, 
Specifications and drawings for construction, in solicitations and 
contracts for construction that contain the FAR clause at 52.236-21, 
Specifications and Drawings for Construction.

[67 FR 49259, July 30, 2002]



836.570  Correspondence.

    The contracting officer shall insert the clause at 852.236-76, 
Correspondence, in solicitations and contracts for construction expected 
to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



836.571  Reference to ``standards.''

    The contracting officer shall insert the clause at 852.236-77, 
Reference to ``standards,'' in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



836.572  Government supervision.

    The contracting officer shall insert the clause at 852.236-78, 
Government supervision, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



836.573  Daily report of workers and materials.

    The contracting officer shall insert the clause at 852.236-79, Daily 
report of workers and materials, in solicitations and contracts for 
construction expected to exceed the simplified acquisition threshold. 
The contracting officer may, when in the best interest of the 
Government, insert the clause in solicitations and contracts for 
construction when the contract amount is expected to be at or below the 
simplified acquisition threshold.

[67 FR 49259, July 30, 2002]

[[Page 211]]



836.574  Subcontractors and work coordination.

    The contracting officer shall insert the clause at 852.236-80, 
Subcontracts and work coordination, in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold. When the 
solicitations or contracts are for new construction work with complex 
mechanical-electrical work, the contracting officer may use the clause 
with its Alternate I.

[67 FR 49259, July 30, 2002]



836.575  Schedule of work progress.

    The contracting officer shall insert the clause at 852.236-84, 
Schedule of work progress, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
and that do not contain a section entitled ``Network Analysis System 
(NAS).''

[67 FR 49259, July 30, 2002]



836.576  Supplementary labor standards provisions.

    The contracting officer shall insert the clause at 852.236-85, 
Supplementary labor standards provisions, in solicitations and contracts 
for construction that are expected to exceed the micro-purchase 
threshold.

[67 FR 49259, July 30, 2002]



836.577  Worker's compensation.

    The contracting officer shall insert the clause at 852.236-86, 
Worker's compensation, in solicitations and contracts for construction 
that are expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



836.578  Contract changes--supplement.

    (a) The contracting officer shall insert the clause at 852.236-88, 
Contract changes--supplement, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.
    (b) When negotiated changes exceed $500,000, paragraph (a) of the 
clause at 852.236-88 will apply. Because paragraph (a) does not provide 
ceiling rates for indirect expenses, the contractor must supply cost 
breakdowns and other supporting data on its rates for indirect expenses 
as part of its price proposal. The contracting officer must negotiate 
the rates for indirect expenses with the contractor and may request an 
audit in accordance with FAR 15.404-2. When the negotiated change will 
be $500,000 or less, paragraph (b) of the clause at 852.236-88 will 
apply.
    (c) As provided in FAR 15.403-4, proposals exceeding the cost or 
pricing data threshold shall be accompanied by certificates of current 
cost or pricing data. The contracting officer, if authorized by the head 
of the contracting activity, may require the submission of cost or 
pricing data for proposals valued at less than the cost or pricing data 
threshold specified in FAR 15.403-4(a)(1) and may require that the data 
be certified in accordance with FAR 15.403-4(a)(2).
    (d) It is emphasized that the indirect cost rates in paragraph (b) 
of the clause at 852.236-88, for changes costing $500,000 or less, are 
ceiling rates only and the contracting officer must negotiate the 
indirect expense rates within the ceiling limitations. The clause is a 
result of an approved FAR deviation pursuant to subpart 801.4.

[67 FR 49259, July 30, 2002]



836.579  Special notes.

    The contracting officer shall insert the clause at 852.236-91, 
Special notes, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



                Subpart 836.6_Architect-Engineer Services



836.602  Selection of firms for architect-engineer contracts.



836.602-1  Selection criteria.

    In addition to the evaluation criteria set forth in FAR 36.602-1, 
the board will consider the factors set forth in this section as they 
apply to the project or purpose of the selection. Values will be 
assigned to each factor in determining the relative qualifications of 
the firms identified as qualified through the

[[Page 212]]

preselection process. The values may be confirmed or adjustments may be 
made as a result of the discussions.
    (a) Reputation and standing of the firm and its principal officials 
with respect to professional performance, general management, and 
cooperativeness.
    (b) Record of significant claims against the client because of 
improper or incomplete architectural and engineering services.
    (c) Specific experience and qualifications of personnel proposed for 
assignment to the project and their record of working together as a 
team.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 67 
FR 49259, July 30, 2002]



836.602-2  Evaluation boards.

    Central Office architect-engineer contractors will be selected by 
the board appointed by the Chief Facilities Management Officer, Office 
of Facilities Management. Field facility architect-engineer contractors 
will be selected by the board appointed by the facility director.
    (a) The evaluation board for the Office of Facilities Management 
will be chaired by the Director, A/E Evaluation and Program Support 
Service. The Project Director or Project Manager will be designated to 
act as Chair when necessary. The board's members, as appointed by the 
Chief Facilities Management Officer, Office of Facilities Management, 
will include the appropriate Project Manager and as many qualified 
professional architects or engineers from the Office of Facilities 
Management technical services as may be considered appropriate for the 
particular project. Additional members from the Office of Facilities 
Management or from other VA administrations and staff offices will be 
designated for projects when appropriate.
    (b) The evaluation board for a VA field facility will consist of no 
less than two members, one of whom will be the head of the contracting 
activity (HCA) (or the senior contracting officer at the facility if 
there is no HCA on site) and the other the Chief, Engineering Service, 
or their alternates. Where a facility has two or more engineers on its 
staff, an additional engineer will be appointed to the board. The 
chairperson of the board will be the senior engineer.
    (c) The evaluation board for National Cemetery Administration (NCA) 
contracts will be appointed by the Director, Office of Construction 
Management, and will consist of no less than three members, one of whom 
will serve as the board's Chair, and one of whom will be an NCA senior 
level contracting officer.

[49 FR 12618, Mar. 29, 1984, as amended at 53 FR 1631, Jan. 21, 1988; 54 
FR 40065, Sept. 29, 1989; 61 FR 11587, Mar. 21, 1996; 64 FR 69221, Dec. 
16, 1998; 67 FR 49260, July 30, 2002]



836.602-4  Selection authority.Q

    The Chief Facilities Management Officer, Office of Facilities 
Management (for o;entral Office contracts), the Director, Office of 
Construction Management (for National Cemetery Administration 
contracts), and) and the facility director (for field facility 
contracts), or persons acting in those capacities, are designated as the 
approving officials for the recommendations of the evaluation boards.

[49 FR 12618, Mar. 29, 1984, as amended at 53 FR 1631, Jan. 21, 1988; 61 
FR 11587, Mar. 21, 1996; 67 FR 49260, July 30, 2002]



836.602-5  Short selection process for contracts not to exceed the 
simplified acquisition threshold.

    Either of the procedures provided in FAR 36.602-5 may be used to 
select firms for architect-engineer contracts not expected to exceed the 
simplified acquisition threshold.

[67 FR 49260, July 30, 2002]



836.603  Collecting data on and appraising firms' qualifications.

    The Chief Facilities Management Officer, Office of Facilities 
Management, for Central Office; the Director, Office of Construction 
Management, for National Cemetery Administration acquisitions; and the 
Chief, Engineering Service, for field facilities, are responsible for 
collecting Standard Forms 254 and 255 and for maintaining a data file on 
architect-engineer qualifications.

67 FR 49260, July 30, 2002]

[[Page 213]]



836.606  Negotiations.



836.606-70  General.

    To assure that the fee limitation is not violated, the contracting 
officer will maintain suitable records to be able to isolate the amount 
in the total fee to which the 6-percent limitation applies.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996]



836.606-71  Architect-engineer's proposal.

    The use of VA Form 08-6298, Architect-Engineer Fee Proposal, is 
mandatory for obtaining the proposal and supporting cost or pricing data 
from the contractor and subcontractor in the negotiation of all 
architect-engineer contracts for design services when the contract price 
is estimated to be $50,000 or over. In obtaining architect-engineer 
services for research study, seismic study, master planning study, 
construction management and other related services contracts, VA Form 
08-6298 shall also be used but supplemented or modified as needed for 
the particular project type.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996]



836.606-72  Contract price.

    Where negotiations with the top-rated firm are unsuccessful, the 
contracting officer will terminate the negotiations and undertake 
negotiations with the firm next in order of preference after 
authorization by the Chief Facilities Management Officer, Office of 
Facilities Management, or the facility director. Recommendation for 
award of the contract at the negotiated fee, will be submitted with a 
copy of the negotiation memorandum prepared in accordance with FAR 
15.406-3 and, whenever a field pricing report has been received, to the 
Chief Facilities Management Officer, Office of Facilities Management, or 
the facility director, as appropriate.

[52 FR 282, Jan. 5, 1987, as amended at 54 FR 40065, Sept. 29, 1989; 61 
FR 11587, Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



836.606-73  Application of 6-percent architect-engineer fee limitation.

    (a) The 6-percent fee limitation does not apply to the following 
architect or engineer services:
    (1) Investigative services including but not limited to:
    (i) Determination of program requirements including schematic or 
preliminary plans and estimates.
    (ii) Determination of feasibility of proposed project.
    (iii) Preparation of measured drawings of existing facility.
    (iv) Subsurface investigation.
    (v) Structural, electrical, and mechanical investigation of existing 
facility.
    (vi) Surveys: Topographic, boundary, utilities, etc.
    (2) Special consultant services not normally available in 
organizations of architects or engineers not specifically applied to the 
actual preparation of working drawings or specifications of the project 
for which the services are required.
    (3) Other:
    (i) Reproduction of approved designs through models, color 
renderings, photographs, or other presentation media.
    (ii) Travel and per diem allowances other than those required for 
the development and review of working drawings and specifications.
    (iii) Supervision or inspection of construction, review of shop 
drawings or samples, and other services performed during the 
construction phase.
    (iv) All other services that are not integrally a part of the 
production and delivery of plans, designs, and specifications.
    (4) The cost of reproducing drawings and specifications for bidding 
and their distribution to prospective bidders and plan file rooms.
    (b) The total cost of the architect or engineer services contracted 
for may not exceed 6 percent of the estimated cost of the construction 
project plus the estimated cost of related services and activities such 
as those shown in paragraph (a) of this section. To support project 
submissions, VA Form 10-1193, Application for Health Care Facility 
Project, and VA Form 10-6238, EMIS Construction Program-Estimate

[[Page 214]]

Worksheet, will be used and the proposed technical services shown where 
necessary and applicable.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 67 
FR 49260, July 30, 2002]



PART 837_SERVICE CONTRACTING--Table of Contents




                 Subpart 837.1_Service Contracts_General

Sec.
837.103 Contracting officer responsibility.
837.104 Personal services contracts.

             Subpart 837.2_Advisory and Assistance Services

837.203 Policy.
837.270 Special controls for letters of agreement.

    Subpart 837.3_Dismantling, Demolition, or Removal of Improvements

837.300 Scope of subpart.

             Subpart 837.4_Nonpersonal Health-Care Services

837.403 Contract clause.

                    Subpart 837.70_Mortuary Services

837.7001 General.
837.7002 List of qualified funeral directors.
837.7003 Funeral authorization.
837.7004 Administrative necessity.
837.7005 Unclaimed remains--all other cases.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12620, Mar. 29, 1984, unless otherwise noted.



                 Subpart 837.1_Service Contracts_General



837.103  Contracting officer responsibility.

    When the contracting officer determines that legal assistance is 
necessary in determining whether a proposed service contract is for 
personal or nonpersonal services, he/she shall gather all the pertinent 
facts and request the opinion of District Counsel responsible for 
servicing the VA facility involved.



837.104  Personal services contracts.

    (a) Personal service contracts having an employer-employee 
relationship shall not be awarded but will be consummated in accordance 
with VA Manual MP-5, Parts I and II.
    (b) In addition to the elements used in assessing whether or not a 
contract is personal in nature identified in FAR 37.104(d), the 
following circumstances may also indicate a possible personal service 
contract.
    (1) The contract does not call for an end product which is 
adequately described in the contract.
    (2) The contract price or fee is based on the time actually worked 
rather than the results to be accomplished.
    (3) Office space, equipment and supplies for contract performance 
are to be furnished by the Department of Veterans Affairs.
    (4) Contractor personnel are to be used interchangeably with 
Department of Veterans Affairs personnel to perform the same function.
    (5) The Department of Veterans Affairs retains the right to control 
and direct the means and methods by which contractor personnel 
accomplish the work.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 61 
FR 20493, May 7, 1996]



             Subpart 837.2_Advisory and Assistance Services



837.203   Policy.

    For the purpose of this subpart the definition of advisory and 
assistance services shall, in addition to examples listed in FAR 37.203, 
include services to obtain peer review of research proposals.

[64 FR 69221, Dec. 16, 1998]



837.270  Special controls for letters of agreement.

    (a) Letters of agreement may be used to procure advisory and 
assistance services and advisory board memberships only by those 
individuals designated in 801.670-5 and individuals delegated authority 
under the conditions specified in paragraph (b) of that section, and 
will be limited to a value of $500 per letter and to an accumulated 
annual total of $2,500 to any individual

[[Page 215]]

or firm. Letters of agreement should only be used where normal 
procurement channels are not feasible and only for obtaining the 
following services:
    (1) Advisory and assistance services including peer review of 
research proposals and advisory board memberships.
    (2) Management and professional services (837.271)
    (3) Instructors and training obtained pursuant to section 7472 of 
Title 38, United States Code.
    (b) The delegated official will perform or have performed for each 
letter of agreement all those duties and requirements prescribed in this 
subpart, as modified by paragraphs (c) and (d) of this section. That 
official will also insure that all reporting requirements are completed 
for each action.
    (c) The administration head or staff office director will be the 
highest level approving official for each procurement action which does 
not exceed $500 in consulting fees (excluding travel, per diem and other 
travel-related costs) and which does not award more than an accumulated 
total of $2,500 per year in consulting fees to any individual or firm. 
(Advisory and assistance services anticipated to exceed these dollar 
limitations will not be obtained through letters of agreement.)
    (d) Justifications for letters of agreement will provide a statement 
of need and will certify that such services do not unnecessarily 
duplicate any previously performed work or services. The justification 
will also certify that the procurement action will not violate post-
employment restrictions prescribed in the Ethics in Government Act and 
803.101-3.
    (e) Copies of all advisory and assistance services procurements 
accomplished through letters of agreement shall be provided to the local 
servicing purchase and contract office for entry into the Federal 
Procurement Data System.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989; 64 FR 69221, Dec. 16, 1998]



    Subpart 837.3_Dismantling, Demolition, or Removal of Improvements



837.300  Scope of subpart.

    Contracting officers should be cognizant of the requirements 
contained in VA Manual MP-3, Part II, Chapter 6, for approval necessary 
prior to entering into a contract for disposal of VA real property. Such 
approval(s) shall be included in the contract file.



             Subpart 837.4_Nonpersonal Health-Care Services



837.403  Contract clause.

    The contracting officer shall insert the clause at 852.237-7, 
Indemnification and Medical Liability Insurance, in lieu of FAR Clause 
52.237-7, in solicitations and contracts for nonpersonal health-care 
services, including solicitations and contracts for nonpersonal health-
care services awarded under the authority of 38 U.S.C. 8151-8153 and 
(VAAR) 48 CFR part 873. The contracting officer may include the clause 
in bilateral purchase orders for nonpersonal health-care services 
awarded under the procedures in FAR parts 12, 13, 14, or 15 and (VAAR) 
48 CFR parts 812, 813, 814, or 815.

[61 FR 52709, Oct. 8, 1996, as amended at 63 FR 69222, Dec. 16, 1998; 68 
FR 3469, Jan. 24, 2003]



                    Subpart 837.70_Mortuary Services



837.7001  General.

    This subpart establishes the policies and procedures governing the 
procurement of funeral and burial services for deceased beneficiaries of 
the Department of Veterans Affairs, as provided in 38 U.S.C. 2303.

[61 FR 52709, Oct. 8, 1996, as amended at 63 FR 69222, Dec. 16, 1998]



837.7002  List of qualified funeral directors.

    Contracting officers will establish, in coordination with cognizant 
Medical Administration Service personnel or other personnel designated 
by the medical center director to perform these functions, a list of 
funeral directors capable of performing the burial services

[[Page 216]]

specified in 837.7003. The contracting officer will attempt to establish 
a commitment to perform these services within the statutory limitation 
of $300. Each funeral director must be fully licensed in the 
jurisdiction in which the business operates. If there has been no prior 
experience with the funeral director which would ensure the adequacy of 
the funeral director's services and casket, arrangements will be made 
prior to contract negotiation to inspect the premises and the casket to 
be provided, and to check with the local business bureau and/or Chamber 
of Commerce.

[ 49 FR 12620, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 63 
FR 69222, Dec. 16, 1998]



837.7003  Funeral authorization.

    (a) When a veteran dies while receiving care in a Department of 
Veterans Affairs health care facility or in a non-Department of Veterans 
Affairs institution at Department of Veterans Affairs expense, and the 
decedent's remains are unclaimed, the Chief, Medical Administration 
Service, or the person designated by the medical center to perform these 
functions, will forward to the head of the contracting activity, a 
properly executed VA Form 10-2065, Funeral Arrangements, requesting that 
funeral and burial services for the deceased be procured. Burial will be 
made in the nearest National Cemetery having available grave space.
    (b) The contracting officer will enter into negotiations with local 
funeral directors to procure a complete funeral and burial service 
within the statutory allowance of $300. This service will consist of and 
will be specified on the purchase order, VA Form 90-2138, Order for 
Supplies or Services, or VA Form 90-2138-ADP, Purchase Order for 
Supplies or Services, as follows:
    (1) Preparation of the body, embalming.
    (2) Clothing.
    (3) Casket. (The casket, as a minimum, will be constructed from 
thick, strong particle board and must be of sufficient strength to 
support the weight of an adult human body. Cardboard or press paper or 
similar materials are not acceptable).
    (4) Securing all necessary permits.
    (5) Ensuring that a United States Flag (provided the funeral 
director in accordance with Veterans Health Administration Manual M-1, 
Part I, paragraph 14.40) accompanies the casket to place of burial.
    (c) An additional allowance for transportation of the body to the 
place of burial is provided in 38 U.S.C. 2303(a)(1)(B). This allowance 
will cover the transportation cost of shipment of the body by common 
carrier or by hearse from the VA facility to the funeral home and to the 
place of burial, any charges for an outside (shipment) box, and the 
charges for securing all necessary permits for removal or shipment of 
the body. These costs are not chargeable against the $300 allowance.
    (d) In accordance with Veterans Health Administration Manual M-1, 
Part I, paragraph 14.37, the contracting officer will designate the 
Chief, Medical Administration Service, or representative, or the person 
designated by the medical center director to perform these functions, to 
be responsible for the medical inspection of the mortuary services 
performed and inspection of the merchandise furnished. This designee 
will also be responsible for certifying receipt on the receiving report.
    (e) The head of the contracting activity will assist the Chief, 
Medical Administration Service, or the person designated by the medical 
center director to perform these functions, in developing the local 
procedures specified in Veterans Health Administration Manual M-1, Part 
I, paragraph 14.37c.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]



837.7004  Administrative necessity.

    (a) When persons die under Department of Veterans Affairs care who 
are not legally entitled to such care at Department of Veterans Affairs 
expense, and no relatives or friends will claim the remains, and the 
municipal, county or State officials refuse to provide for final 
disposition, arrangements will be made and expenses assumed for burial 
locally under separate contractual agreement.
    (b) When a full and complete funeral and burial service as 
prescribed in

[[Page 217]]

837.7003 cannot be obtained by the contracting officer within the 
statutory allowance, he/she will, prior to taking any further action, 
secure from the facility director a written determination that the 
disposition of the remains must be accomplished by the Department of 
Veterans Affairs as an administrative necessity. The facility director 
will also authorize in writing the expenditure of such additional funds 
as may be necessary for this purpose. The amount of these additional 
funds will be held to the minimum, keeping in mind, however, that the 
deceased must be given a proper and fitting interment.
    (c) The determination and authorization by the facility director 
will be made a part of the contract file.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989]



837.7005  Unclaimed remains--all other cases.

    Requests for information on the disposition of the unclaimed remains 
of a veteran whose death occurs while not under the direct care or 
treatment of the Department of Veterans Affairs will be referred to the 
Veterans Services Officer for processing in accordance with Veterans 
Benefits Administration Manual M27-1, Part II. This manual is available 
at any Department of Veterans Affairs regional office, medical center or 
VA office.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]

[[Page 218]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 842_CONTRACT ADMINISTRATION--Table of Contents




Sec.
842.000 Scope of part.
842.070 Definition.

  Subpart 842.1_Interagency Contract Administration and Audit Services

842.101 Policy.
842.102 Procedures.

           Subpart 842.2_Assignment of Contract Administration

842.202 Assignment of contract administration.

                    Subpart 842.7_Indirect Cost Rates

842.705 Final indirect cost rates.

                   Subpart 842.8_Disallowance of Costs

842.801-70 Audit assistance prior to disallowing costs.
842.803 Disallowing cost after incurrence.

          Subpart 842.12_Novation and Change-of-Name Agreements

842.1203 Processing agreements.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12624, Mar. 29, 1984, unless otherwise noted.



842.000  Scope of part.

    This part applies to all contracts, whether sealed bid or 
negotiated. (See 801.602-70 for requirements for legal review of certain 
contract administration actions.)

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 51 
FR 23072, June 25, 1986; 52 FR 28559, July 31, 1987]



842.070  Definition.

    Contract Administration is the coordination of actions required for 
the performance of a contract including the guidance and supervision 
necessary to assure that all contractural obligations are fulfilled.



  Subpart 842.1_Interagency Contract Administration and Audit Services



842.101  Policy.

    (a) Pursuant to FAR policy encouraging interagency cross-servicing 
in field contract support services, contracting officers of the 
Department of Veterans Affairs will utilize the support services of 
other agencies to the extent feasible. Examples of such services are: 
preaward surveys; quality assurance and technical inspection of contract 
items; and review of contractors' procurement systems. Requirements for 
support services available from any other Government department or 
agency will be obtained on the basis of an approved negotiated 
interagency support agreement.
    (b) An interagency support agreement is a written instrument of 
understanding executed between the parties to the agreement. The 
agreement should state clearly the accord which has been reached between 
the two parties involved, especially the obligations assumed by the 
rights granted each. The agreement will be specific with respect to 
resources to be provided by both the supplying and receiving activities. 
It will also provide for funding and reimbursement arrangements, and 
clauses permitting revisions, modifications thereto, or cancellation 
thereof, will be included.



842.102  Procedures.

    (a) The Department of Defense Directory of Contract Administration 
Services Components and the Directory of Federal Contract Audit Offices 
are available through the Department of Veterans Affairs Forms and 
Publications Depot.
    (b) Proposed interagency support agreements with any other 
Government department or agency involving the expenditures of Department 
of Veterans Affairs funds of $5,000 of more will be forwarded by the 
facility director (or Central Office official) to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (93),

[[Page 219]]

who will transmit with recommendation to the General Counsel for legal 
review and approval, as required by 801.602-70(a)(4).
    (1) Proposed agreements, both new and renewal, will be submitted in 
an original and four copies so as to reach Central Office 60 days prior 
to the effective date of the agreement.
    (2) Complete justification for all proposed agreements will be 
submitted, as approval depends on the adequacy of the justification.

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69222, Dec. 16, 1998]



           Subpart 842.2_Assignment of Contract Administration



842.202  Assignment of contract administration.

    Proposed assignments of contract administration responsibility 
outside of the procuring activity will be forwarded by the facility 
director to the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95), who will transmit the proposal to the General Counsel 
for legal review and approval, as required by 801.602-70(a)(6) and 
801.602-71. Complete justification will be provided, specifically 
addressing the need for and benefits to be provided by assignment of 
contract administration. (See 801.603-70 for policy on designating 
representatives of contracting officers, and 48 CFR 9904 (FAR Appendix 
B) for policy on contracts involving Cost Accounting Standards.)

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69222, Dec. 16, 1998]



                    Subpart 842.7_Indirect Cost Rates



842.705  Final indirect cost rates.

    (a) Contracting officers will request audits on proposed final 
indirect cost rates and billing rates for use in cost reimbursement, 
fixed price incentive and fixed price redeterminable contracts as 
described in FAR Subpart 42.7 unless the quick-closeout procedures 
described in FAR 42.708 are used. In this case, the contracting officers 
will perform a review and validation of the contractor's data submitted 
for accuracy and reasonableness of the proposed rates for negotiating 
the settlement of indirect costs for a specific contract.
    (b) Contracting officers in the Office of Acquisition and Materiel 
Management and Office of Facilities Management who are located in the VA 
Central Office have the option to request audits directly from the 
cognizant audit agencies or requesting audits through the Assistant 
Inspector General, Office of Departmental Reviews and Management Support 
(53C). All other contracting officers located in the VA Central Office 
and the Office of the General Counsel will send requests for audit to 
the Assistant Inspector, Office of Departmental Reviews and Management 
Support (53C). Contracting officers located at field facilities, VA 
National Acquisition Center and supply depots are required to arrange 
for the audits through the Deputy Assistant Secretary for Acquisition 
and Materiel Management or the Chief Facilities Management Officer. The 
Assistant Inspector General, Office of Departmental Reviews and 
Management Support (53C) will provide such accounting assistance or 
technical advice as is deemed desirable by the contracting officers.

[49 FR 12624, Mar. 29, 1984, as amended at 52 FR 49017, Dec. 29, 1987; 
54 FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]



                   Subpart 842.8_Disallowance of Costs



842.801-70  Audit assistance prior to disallowing costs.

    When a contracting officer determines during the performance of a 
cost reimbursement, fixed price incentive or fixed price redetermination 
contract exceeding the thresholds specified in FAR 15.403-4, that costs 
should be disallowed, audit assistance will be requested. Such requests 
submitted by field facility contracting officers will be directed to the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95) 
for review and forwarding to the Assistant Inspector General, Office of 
Audit (52), or other recognized audit agency, e.g., the Defense Contract 
Audit Agency.

[49 FR 12624, Mar. 29, 1984, as amended 63 FR 69222, Dec. 16, 1998]

[[Page 220]]



842.803  Disallowing cost after incurrence.

    Contracting officers may approve contractors' vouchers for payment 
and process them to the servicing fiscal office. Such approval must be 
within the limitations of the contracting officer and the contract for 
which the voucher is submitted must be within the contracting officers 
delegation of contracting authority. (Note 842.801-70 regarding 
disallowing costs.)



          Subpart 842.12_Novation and Change-of-Name Agreements



842.1203  Processing agreements.

    Prior to execution of novation and change-of-name agreements by a 
Department of Veterans Affairs contracting officer, he/she will forward 
the agreement and related documents to the Office of the General Counsel 
for review as to legal sufficiency. The documents will be submitted 
through the same channels as those prescribed for legal review of 
contracts in 801.602-72.

[49 FR 12624, Mar. 29, 1984, as amended 63 FR 69222, Dec. 16, 1998]



PART 846_QUALITY ASSURANCE--Table of Contents




                     Subpart 846.3_Contract Clauses

Sec.
846.302-70 Inspection.
846.312 Construction contacts.

           Subpart 846.4_Government Contract Quality Assurance

846.408-70 Inspection of subsistence.
846.408-71 Waiver of USDA inspection and specifications.
846.470 Use of commercial organizations for inspections and grading 
          services.
846.471 Determination authority.
846.472 Inspection of repairs for properties under the Loan Guaranty and 
          Direct Loan Programs.
846.472-1 Repairs of $1,000 or less.
846.472-2 Repairs in excess of $1,000.

                        Subpart 846.7_Warranties

846.710 Construction contracts.
846.710-70 Special warranties.
846.710-71 Warranty for construction--guarantee period services.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12625, Mar. 29, 1984, unless otherwise noted.



                     Subpart 846.3_Contract Clauses



846.302-70  Inspection.

    Contracts for property will include the clause 852.211-72(a), 
``Rejected Goods,'' except that contracts for packinghouse, dairy 
products, bread and bakery products, and fresh and frozen fruits and 
vegetables will include the clause prescribed in 852.211-72(b), 
``Rejected Goods.''

[49 FR 12625, Mar. 29, 1984, as amended at 67 FR 49260, July 30, 2002]



846.312  Construction contacts.

    The contracting officer shall insert the clause at 852.236-74, 
Inspection of construction, in solicitations and contracts for 
construction that contain the FAR clause at 52.246-12, Inspection of 
Construction.

[67 FR 49260, July 30, 2002]



           Subpart 846.4_Government Contract Quality Assurance



846.408-70  Inspection of subsistence.

    (a) The contracting officer will determine at the time of issuance 
of the solicitation whether inspection for specification compliance will 
be made: (1) Prior to shipment by representatives of the U.S. Department 
of Agriculture (USDA) or the Department of Commerce, or (2) at the time 
of delivery by personnel of the purchasing activity. The place of 
inspection will be indicated in the solicitation.
    (b) Since the requirement for USDA or Department of Commerce 
inspections and certifications results in additional contractor costs 
which may be ultimately reflected in bid prices, the contracting 
officer, in consultation with the Chief, Nutrition and Food Service, 
must evaluate the need for such inspections. The evaluation shall 
include the following:
    (1) The quality assurance already provided by other mandatory 
inspection systems;
    (2) The proposed suppliers' own quality control system;
    (3) Experience with the proposed suppliers;

[[Page 221]]

    (4) The feasibility of prequalifying suppliers' quality assurance 
systems and subsequently waiving certifications for future 
solicitations; and
    (5) The cost of the inspections.
    (c) When either the USDA or the Department of Commerce is indicated 
as the inspection activity, the solicitation will also provide that the 
contractor is responsible for:
    (1) Arranging and paying for inspection services.
    (2) Obtaining from the inspection activity a certificate indicating 
the product complies with specifications. Such certificate, or copy, 
should accompany the shipment or be furnished to the receiving 
installation prior to shipment. The contractor shall notify the 
installation when the certificate is not immediately available.
    (3) Seeing that acceptable products are covered by an inspection 
agency checkloading certificate or stamped by the inspector as 
prescribed by the contracting officer. Products not so identified shall 
be rejected.
    (4) Furnishing samples for inspection at his/her expense.
    (5) Indicating the address where inspection will be made.
    (d) The contracting officer will furnish a copy of the purchase 
document to the inspecting activity.

[49 FR 12625, Mar. 29, 1984, as amended at 51 FR 37027, Oct. 17, 1986; 
54 FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]



846.408-71  Waiver of USDA inspection and specifications.

    (a) Contracting officers may purchase butter; cheese (except cottage 
cheese); sausage; meat food products; \1\ bacon, smoked; and bacon, 
Canadian style, without reference to the specifications in Part IV of 
the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
Publication No. C900-SL, and the USDA inspection requirements, when the 
amount of an item to be purchased will not exceed 500 pounds per 
delivery. When these items are procured together with items that are not 
exempt, the solicitation shall include the following:
---------------------------------------------------------------------------

    \1\ Meat food products shall mean processed foods containing meat in 
substantial proportion and other listed ingredients including seasoning, 
e.g., frankfurters, coldcuts. Whole or prefabricated meats, e.g., pork 
chops, hamburger, are considered meats, not meat food products.

    Items * * * are not required to be in accordance with the 
specifications contained in Part IV of the Federal Supply Catalog, Stock 
List, FSC Group 89, Subsistence, Publication No. C900-SL, and the 
special USDA inspection is not required. Inspection for quality and 
condition will be made by VA upon delivery at destination. These items 
---------------------------------------------------------------------------
are, however, subject to the quality controls stated herein.

    (b) As appropriate, the following statements shall be included in 
each invitation for bid, request for proposal or purchase order:
    (1) Butter. This product must be graded by the USDA and labeled 
``Grade A'' or the grade specified herein.
    (2) Sausage and meat food products:
    (i) This product must be a high commercial product and shall have 
been prepared in a federally inspected plant and bear the USDA 
establishment number stamp which evidences that it is sound, healthful, 
wholesome and fit for human consumption; and
    (ii) This product must bear a label complying with the Federal Food, 
Drug and Cosmetic Act which requires that all ingredients be listed 
according to the order of their predominance.
    (3) Bacon, smoked; and bacon, Canadian style. This product must be a 
high commercial product and shall have been prepared in a federally 
inspected plant and bear the USDA establishment number stamp which 
evidences that it is sound, healthful, wholesome, and fit for human 
consumption.
    (c) When using a ``brand name or equal'' purchase description every 
brand name item that is known to be acceptable and available in the area 
will be listed.

[49 FR 12625, Mar. 29, 1984, as amended at 51 FR 37028, Oct. 17, 1986; 
63 FR 69222, Dec. 16, 1998]



846.470  Use of commercial organizations for inspections and grading services.

    Commercial organizations may be used for inspection and grading 
services when it is determined that the results of a technical 
inspection or grading are dependent upon the application of scientific 
principles or specialized

[[Page 222]]

techniques, and it is further determined that:
    (a) The Department of Veterans Affairs is unable to employ the 
personnel qualified to properly perform the services and is unable to 
locate another Federal agency capable of providing the service.
    (b) The inspection or grading results issued by a private 
organization are essential to verify the acceptance or rejection of a 
special commodity.
    (c) The services may be performed without direct Government 
supervision.

[49 FR 12625, Mar. 29, 1984, as amended at 54 FR 40065, Sept. 29, 1989]



846.471  Determination authority.

    The determinations required in 846.470 will be made by:
    (a) The Chief Facilities Management Officer, Office of Facilities 
Management, for those items and services for which purchase authority 
has been assigned to him/her.
    (b) The Director, Veterans Canteen Service, for those items and 
services purchased, or contracted for, by the Veterans Canteen Service 
(except those items purchased from Department of Veterans Affairs supply 
sources).
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management for all other supplies, equipment and services.

[49 FR 12625, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]



846.472  Inspection of repairs for properties under the Loan Guaranty and 
Direct Loan Programs.

    Final inspection will be made of all repair programs upon 
completion. In addition such intermediate or progress inspections will 
be made on extensive or technical jobs as specified in the contract.



846.472-1  Repairs of $1,000 or less.

    (a) Generally, inspections required will be made by the management 
broker. If the property has not been assigned to a management broker or 
if it has been determined that the nature of the repairs requires 
supervision by a technician, the inspection will be made by a qualified 
fee or staff inspector.
    (b) There is no form prescribed for this inspection but VA Form 26-
1839, Compliance Inspection Report, may be used if desired. Regardless 
of the form in which the report is submitted, it will be in sufficient 
detail to identify the contractor, property, and the repair program and 
to enable the contracting officer to make a determination that the work 
is being performed satisfactorily or completed in accordance with the 
terms of the contract.



846.472-2  Repairs in excess of $1,000.

    (a) The final inspection and any intermediate or progress 
inspections on repairs exceeding $1,000 will be made by a qualified fee 
or staff inspector. If a management broker is qualified to supervise 
major repairs, he/she may be authorized to conduct the inspections.
    (b) Report of inspections will be made on VA Form 26-1839, 
Compliance Inspection Report. The form will be completed to identify the 
property, contractor, and repair program and will also include such 
detailed information to enable the contracting officer to make a 
determination that the work is being performed satisfactorily or that it 
has been completed in accordance with the contract terms. Any 
deficiencies noted will be itemized and explained in detail.



                        Subpart 846.7_Warranties

    Source: 67 FR 49260, July 30, 2002, unless otherwise noted.



846.710  Construction contracts.

    Contracting officers shall insert the FAR clause at 52.246-21, 
Warranty of Construction, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.



846.710-70  Special warranties.

    The contracting officer shall insert the clause at 852.246-1, 
Special warranties, in solicitations and contracts for construction that 
include the FAR clause at 52.246-21, Warranty for Construction.

[[Page 223]]



846.710-71  Warranty for construction--guarantee period services.

    The contracting office shall insert the clause at 852.246-2, 
Warranty for construction'guarantee period services, in solicitations 
and contracts for construction that include the FAR clause at 52.246-21, 
Warranty for Construction, and also include guarantee period services.



PART 847_TRANSPORTATION--Table of Contents




            Subpart 847.3_Transportation in Supply Contracts

Sec.
847.303-1 F.o.b. origin.
847.303-70 F.o.b. origin, freight prepaid, transportation charges to be 
          included on the invoice.
847.304 Determination of delivery terms.
847.304-1 General.
847.305-70 Potential destinations known but quantities unknown.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12627, Mar. 29, 1984, unless otherwise noted.



            Subpart 847.3_Transportation in Supply Contracts



847.303-1  F.o.b. origin.

    (a) Normally shipments falling within this category will be shipped 
on a Government bill of lading, except for those shipments covered by 41 
CFR 101-41.304-2.
    (b) Shipment of flat bronze markers by the vendor, as directed by 
the Chief, Centralized Contracting Division, or his/her designee, will 
be made by parcel post. VA Form 40-4952, Order for Headstone or Marker, 
will be used for this purpose.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]



847.303-70  F.o.b. origin, freight prepaid, transportation charges to be 
included on the invoice.

    (a) The delivery terms will be stated as ``f.o.b. origin, 
transportation prepaid, with transportation charges to be included on 
the invoice,'' under each of the following circumstances:
    (1) When it has been carefully determined that an f.o.b. origin 
purchase or delivery order will have transportation charges not in 
excess of $100 and the occasional exception does not exceed that amount 
by an unreasonable amount;
    (2) Single parcel shipments via express, courier, small package, or 
similar carriers, regardless of shipping cost, if the parcel shipped 
weighs 70 pounds or less and does not exceed 108 inches in length and 
girth combined;
    (3) Multi-parcel shipments via express, courier small package, or 
similar carriers for which transportation charges do not exceed $250 per 
shipment.
    (b) Orders issued on VA Form 90-2138, Orders for Supplies or 
Services, will direct the vendor's attention to shipping instructions on 
the reverse of the form. When VA Form 90-2138 is not used, the vendor 
will be instructed as follows:
    (1) Consistent with the terms of the contract, pack, mark and 
prepare shipment in conformance with carrier requirements to protect the 
personal property and assure assessment of the lowest applicable 
transportation charge.
    (2) Add transportation charges as a separate item on your invoice. 
The invoice must bear the following certification: ``The invoiced 
transportation charges have been paid and evidence of such payment will 
be furnished upon the Government's request.''
    (3) Do not include charges for insurance or valuation on the invoice 
unless the order specifically requires that the shipment be insured or 
the value be declared.
    (4) Do not prepay transportation charges on this order if such 
charges are expected to exceed $100. Ship collect and annotate the 
commercial bill of lading, ``To be converted to Government Bill of 
Lading.''
    (c) Each contracting officer is responsible for:
    (1) Making a diligent effort to obtain the most accurate estimate 
possible of transportation charges; and
    (2) Utilizing the authority in paragraph (a) of this section only 
when consistent with the circumstances in that paragraph.
    (d) When in accordance with FAR Subpart 28.3 and FAR 47.102 it is 
determined that a shipment is to be insured

[[Page 224]]

or the value declared, the vendor will be specifically instructed to do 
so on the order, when a written order is used. If the order is an oral 
order, all copies of the purchase request will be annotated to show that 
insurance/declared value was specifically requested.



847.304  Determination of delivery terms.



847.304-1  General.

    When alternative delivery terms are appropriate but the contracting 
officer elects to use only one in the invitation for bids, or request 
for proposals, he shall document the contract file to show his reasons 
for so doing.



847.305-70  Potential destinations known but quantities unknown.

    When the VA National Acquisition Center contracts for decentralized 
procured items by all Department of Veterans Affairs installations, the 
evaluation of bids must follow specific procedures. To place each bid on 
an equal basis, even though specific quantities required by each 
hospital cannot be predetermined, an anticipated demand factor will be 
used in proportion to the number of hospital beds or patient workload. 
The clause prescribed in 852.247-70 shall be used in these instances.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]



PART 849_TERMINATION OF CONTRACTS--Table of Contents




                    Subpart 849.1_General Principles

Sec.
849.106 Fraud or other criminal conduct.
849.107 Audit of prime contract settlement proposals and subcontract 
          settlements.
849.111 Review and approval of proposed settlements.
849.111-70 Settlement review boards.
849.111-71 Required review and approval.
849.111-72 Submission of information.

                  Subpart 849.4_Termination for Default

849.402 Termination of fixed-price contracts for default.
849.402-6 Repurchase against contractor's account.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12628, Mar. 29, 1984, unless otherwise noted.



                    Subpart 849.1_General Principles



849.106  Fraud or other criminal conduct.

    When the circumstances set forth in FAR 49.106 are encountered, the 
contracting officer will immediately discontinue all negotiations. The 
contracting officer will submit all of the pertinent facts necessary to 
support his/her reasoning to the Deputy Assistant Secretary for 
Acquisition and Materiel Management (95), (or the Chief Facilities 
Management Officer (08) in the case of contracting officers from the 
Office of Facilities Management). The Deputy Assistant Secretary for 
Acquisition and Materiel Management (95), or the Chief Facilities 
Management Officer, Office of Facilities Management, will review the 
submission and fully develop the facts. If the evidence indicates fraud 
or other criminal conduct, the Deputy Assistant Secretary for 
Acquisition and Materiel Management or the Chief of Facilities 
Management Officer, Office of Facilities Management, will forward the 
submission with his/her recommendations, through channels (to include 
the General Counsel, if appropriate), to the Inspector General (51) for 
referral to the Department of Justice. The contracting officer will be 
advised by the Deputy Assistant Secretary for Acquisition and Materiel 
Management or the Chief Facilities Management Officer, Office of 
Facilities Management, as to any further action to be taken. Pending 
receipt of this advice, the matter will not be discussed with the 
contractor. No collection, recovery or other settlement action will be 
initiated while the matter is in the hands of the Department of Justice 
without first obtaining the concurrence of the U.S. Attorney concerned, 
through the Inspector General. If inquiry is made by the contractor, he/
she will be advised only that the proposal has been forwarded to higher 
authority.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]

[[Page 225]]



849.107  Audit of prime contract settlement proposals and subcontract 
settlements.

    Contracting officers will submit settlement proposals for review and 
audit prior to taking any further action, in accordance with the 
provisions and claim limitations applicable to prime and subcontractors 
as set forth in FAR 49.107. Contracting officers in the Office of 
Acquisition and Materiel Management and Office of Facilities Management 
who are located in the VA Central Office have the option to request 
audits directly from the cognizant audit agencies or to request audits 
through the Assistant Inspector General, Office of Departmental Reviews 
and Management Support (53C). All other contracting officers located in 
the VA Central Office and the Office of the General Counsel will send 
requests for audit to the Assistant Inspector General, Office of 
Departmental Reviews and Management Support (53C), to request audits 
directly from the cognizant agencies. Audit control numbers may be 
obtained verbally from the Deputy Assistant Secretary for Acquisition 
and Materiel Management (95).

[49 FR 12628, Mar. 29, 1984, as amended at 52 FR 42440, Nov. 5, 1987; 54 
FR 40065, Sept. 29, 1989; 63 FR 69223, Dec. 16, 1998]



849.111  Review and approval of proposed settlements.



849.111-70  Settlement review boards.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management and the Chief Facilities Management Officer will each 
establish within his/her own organization a settlement review board. The 
board may be established on a permanent or temporary basis. More than 
one such board may be established if settlements are to be made at 
different locations, if personnel with different qualifications are 
needed for different contracts, or if for other reasons, the 
establishment of more than one board is considered desirable. Each 
settlement review board should be composed of at least three qualified 
and disinterested employees. The membership of each board should include 
at least one lawyer and one accountant.

[49 FR 12628, Mar. 29, 1984, as amended at 63 FR 69223, Dec. 16, 1998]



849.111-71  Required review and approval.

    Prior to executing a settlement agreement, or issuing a 
determination of the amount due under the termination clause of a 
contract, or approving or ratifying a subcontract settlement, the 
contracting officer shall submit each such settlement or determination 
for review and approval by a settlement review board if:
    (a) The amount of settlement, by agreement or determination, 
involves $50,000 or more; or
    (b) The settlement or determination is limited to adjustment of the 
fee of a cost-reimbursement contract or subcontract, and:
    (1) In the case of a complete termination, the fee, as adjusted, is 
$50,000 or more; or
    (2) In the case of a partial termination, the fee, as adjusted, with 
respect to the terminated portion of the contract or subcontract is 
$50,000 or more; or
    (c) The head of the contracting activity concerned determines that a 
review of a specific case or class of cases is desirable; or
    (d) The contracting officer, in his/her discretion, desires review 
by the settlement review board.



849.111-72  Submission of information.

    (a) The contracting officer shall submit to the appropriate 
settlement review board a statement of the proposed settlement agreement 
or determination, supported by such detailed information as is required 
for an adequate review. This information should normally include copies 
of:
    (1) The contractor's or subcontractor's settlement proposal,
    (2) The audit report,
    (3) The property disposal report and any required approvals in 
connection therewith,
    (4) The contracting officer's memorandum explaining the settlement, 
and
    (5) Any other relevant material that will assist the board in 
arriving at a decision to approve or disapprove the

[[Page 226]]

proposal. The board may, in its discretion, require the submission of 
additional information.
    (b) When a review of a proposed settlement is required and the 
contract covers supplies, equipment or services, other than construction 
chargeable to Construction Appropriations, the contracting officer will 
submit the proposed settlement or determination to the settlement review 
board through the Deputy Assistant Secretary for Acquisition and 
Materiel Management.
    (c) When the contract covers construction chargeable to Construction 
Appropriations and review is required, the proposed settlement or 
determination will be submitted by the contracting officer to the 
settlement review board through the Chief Facilities Management Officer.

[49 FR 12628, Mar. 29, 1984, as amended at 63 FR 69223, Dec. 16, 1998]



                  Subpart 849.4_Termination for Default



849.402  Termination of fixed-price contracts for default.



849.402-6  Repurchase against contractor's account.

    (a) VA Form 90-2237, Request, Turn-in, and Receipt for Property or 
Services, or the file copy of the purchase order covering the purchase 
of supplies, equipment or services against a defaulting contractor shall 
be annotated to show the name of the defaulted contractor, the contract 
number, the contract price, the name of the contractor from whom 
procurement is made, the price paid, the competition secured and the 
difference in cost, if any, to the Department of Veterans Affairs. When 
reprocurement results in the payment of excess costs and the purchase is 
made through the Supply Fund, the excess costs, when collected, shall be 
deposited to the credit of the Supply Fund. In all other instances, the 
excess costs, when collected, shall be deposited to General Fund 
Receipts.
    (b) Contracting officers, when purchasing against a defaulted 
contractor, shall procure the items in a manner that will protect the 
interests of the contractor as well those of the Government.

[[Page 227]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 852_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




       Subpart 852.1_Instructions for Using Provisions and Clauses

Sec.
852.101 Using Part 852.
852.102 Incorporating provisions and clauses by reference.

              Subpart 852.2_Texts of Provisions and Clauses

852.203-71 Display of VA hotline poster.
852.207-70 Report of employment under commercial activities.
852.209-70 Organizational conflicts of interest.
852.211-70 Requirements for operating and maintenance manuals.
852.211-71 Guarantee clause.
852.211-72 Inspection.
852.211-73 Frozen processed foods.
852.211-74 Telecommunications equipment.
852.211-75 Technical industry standards.
852.211-76 Noncompliance with packaging, packing and/or marking 
          requirements.
852.211-77 Brand name or equal.
852.211-78 Liquidated damages.
852.214-70 Caution to bidders--bid envelopes.
852.214-71 Alternate items.
852.214-73 Bid samples.
852.216-70 Estimated quantities for requirements contracts.
852.219-70 Veteran-owned small business.
852.222-70 Contract Work Hours and Safety Standards Act--nursing home 
          care contract supplement.
852.228-70 Bond premium adjustment.
852.229-70 Purchases from patient's funds.
852.229-71 Purchases for patients using Government funds and/or personal 
          funds of patients.
852.233-70 Protest content.
852.233-71 Alternate Protest Procedure.
852.236-71 Specifications and drawings for construction.
852.236-72 Performance of work by the contractor.
852.236-74 Inspection of construction.
852.236-76 Correspondence.
852.236-77 Reference to ``standards''.
852.236-78 Government supervision.
852.236-79 Daily report of workers and materials.
852.236-80 Subcontracts and work coordination.
852.236-81 Work coordination (alternate provision).
852.236-82 Payments under fixed-price construction contracts (without 
          NAS).
852.236-83 Payments under fixed-price construction contracts (including 
          NAS).
852.236-84 Schedule of work progress.
852.236-85 Supplementary labor standards provisions.
852.236-86 Worker's compensation.
852.236-87 Accident prevention.
852.236-88 Contract changes--supplement.
852.236-89 Buy American Act.
852.236-90 Restriction on submission and use of equal products.
852.236-91 Special notes.
852.237-7 Indemnification and Medical Liability Insurance.
852.237-70 Contractor responsibilities.
852.237-71 Indemnification and insurance (vehicle and aircraft service 
          contracts).
852.246-1 xxx
852.246-2 Warranty for construction--guarantee period services.
852.247-70 Transportation provision for bid evaluation.
852.252-1 Provisions or clauses requiring completion by the offeror or 
          prospective contractor.
852.270-1 Representatives of contracting officers.
852.270-2 Bread and bakery products.
852.270-3 Purchase of shellfish.
852.270-4 Commercial advertising.
852.271-70 Services provided eligible beneficiaries.
852.271-71 Visits to Department of Veterans Affairs guidance centers.
852.271-72 Time spent by counselee in counseling process.
852.271-73 Use and publication of counseling results.
852.271-74 Inspection.
852.271-75 Extension of contract period.
852.273-70 Late offers.
852.273-71 Alternative negotiation techniques.
852.273-72 Alternative evaluation.
852.273-73 Evaluation--health-care resources.
852.273-74 Award without exchanges.

    Authority: 38 U.S.C. 501; 40 U.S.C. 486(c)

[[Page 228]]



       Subpart 852.1_Instructions for Using Provisions and Clauses



852.101  Using Part 852.

    Part 852 prescribes supplemental provisions and clauses to the FAR. 
Provision and clause numbering are as prescribed in FAR 52.101 (e.g, 
supplementary Architect-Engineer and Construction clauses are numbered 
852.236-70, 852.236-71, etc.).

[50 FR 794, Jan. 7, 1985]



852.102  Incorporating provisions and clauses by reference.

    (a) As authorized by FAR 52.102(c), any 48 CFR chapter 8 (VAAR) 
provision or clause may be incorporated in a quotation, solicitation, or 
contract by reference, provided the contracting officer complies with 
the requirements stated in FAR 52.102(c)(1), (c)(2), and (c)(3). To 
ensure compliance with FAR 52.102(c)(1) and (c)(2), the contracting 
officer shall insert the provision found at 852.252-1, Provisions or 
clauses requiring completion by the offeror or prospective contractor, 
in full text in a quotation, solicitation, or contract if the quotation, 
solicitation, or contract incorporates by reference a FAR or 48 CFR 
chapter 8 (VAAR) provision or clause that requires completion by the 
offeror or prospective contractor and submittal with the quotation or 
offer.
    (b) For any FAR or 48 CFR chapter 8 (VAAR) provision or clause that 
requires completion by the contracting officer, the contracting officer 
shall, as a minimum, insert in the quotation, solicitation, or contract 
the title of the provision or clause and the full text of the paragraph 
that requires completion. The balance of the provision or clause may be 
incorporated by reference.
    (c) If one or more FAR or 48 CFR chapter 8 (VAAR) provisions, or 
portions thereof, are incorporated in a quotation or solicitation by 
reference, the contracting officer shall insert in the quotation or 
solicitation the provision found at FAR 52.252-1, Solicitation 
Provisions Incorporated by Reference.
    (d) If one or more FAR or 48 CFR chapter 8 (VAAR) clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the 
quotation, solicitation, or contract the clause found at FAR 52.252-2, 
Clauses Incorporated by Reference.
    (e) If one or more FAR provisions or clauses, or portions thereof, 
are incorporated in a quotation, solicitation, or contract by reference, 
the contracting officer shall insert in the FAR provision or clause 
required by paragraph (c) or (d) of this section the following Internet 
address: http://www.arnet.gov/far/
    (f) If one or more 48 CFR chapter 8 (VAAR) provisions or clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the FAR 
provision or clause required by paragraph (c) or (d) of this section the 
following Internet address: http://www.va.gov/oa&mm/vaar/

[64 FR 69935, Dec. 15, 1999]



              Subpart 852.2_Texts of Provisions and Clauses



852.203-71  Display of VA hotline poster.

    As prescribed in 803.7002, insert the following clause:

                      Display of VA Hotline Poster

    (a) Except as provided in paragraph (c) below, the Contractor shall 
display prominently in common work areas within business segments 
performing work under VA contracts, VA Hotline posters prepared by the 
VA Office of Inspector General.
    (b) VA Hotline posters may be obtained from the VA Office of 
Inspector General (53E), P.O. Box 34647, Washington, DC 20043-4647.
    (c) The Contractor need not comply with paragraph (a) above, if the 
Contractor has established a mechanism, such as a hotline, by which 
employees may report suspected instances of improper conduct, and 
instructions that encourage employees to make such reports.

                             (End of clause)

[57 FR 58718, Dec. 11, 1992, as amended at 63 FR 69223, Dec. 16, 1998]



852.207-70  Report of employment under commercial activities.

    As prescribed in 807.304-77 and 873.110, the following clause must 
be included

[[Page 229]]

in A-76 cost comparison solicitations and solicitations issued under the 
authority of 38 U.S.C. 8151-8153 which may result in the conversion, 
from in-house to contract performance, of work currently being performed 
by VA employees:

       Report of Employment Under Commercial Activities (OCT 1988)

    (a) Consistent with the Government post-employment conflict of 
interest regulations, the contractor shall give adversely affected 
Federal employees the right of first refusal for all employment openings 
under this contract for which they are qualified.
    (b) Definitions. (1) An ``adversely affected Federal employee'' is:
    (i) Any permanent Federal employee who is assigned to the government 
commercial activity, or
    (ii) Any employee identified for release from his or her competitive 
level or separated as a result of the contract.
    (2) ``Employment openings'' are position vacancies created by this 
contract which the contractor is unable to fill with personnel in the 
contractor's employee at the time of the contract award, including 
positions within a 50 mile radius of the commercial activity which 
indirectly arise in the contractor's organization as a result of the 
contractor's reassignment of employees due to the award of this 
contract.
    (3) The ``contract start date'' is the first day of contractor 
performance.
    (c) Filling employment openings. (1) For a period beginning with 
contract award and ending 90 days after the contract start date, no 
person other than an adversely affected Federal employee on the current 
listing provided by the contracting officer shall be offered an 
employment opening until all adversely affected and qualified Federal 
employees identified by the contracting officer have been offered the 
job and refused it.
    (2) The contractor may select any person for an employment opening 
when there are no qualified adversely affected Federal employees on the 
latest current listing provided by the contracting officer.
    (d) Contracting reporting requirements. (1) No later than five 
working days after contract award the contractor shall furnish the 
contracting officer with the following:
    (i) A list of employment openings including salaries and benefits,
    (ii) Sufficient job application forms for adversely affected Federal 
employees.
    (2) By contract start date, the contractor shall provide the 
contracting officer with the following:
    (i) The names of adversely affected Federal employees offered an 
employment opening,
    (ii) The date the offer was made,
    (iii) A brief description of the position,
    (iv) The date of acceptance of the offer and the effective date of 
employment,
    (v) The date of rejection of the offer, if applicable for salary and 
benefits contained in the rejected offer, and
    (vi) The names of any adversely affected Federal employees who 
applied but were not offered employment and the reason(s) for 
withholding an offer.
    (3) For the first 90 days after the contract start date, the 
contractor shall provide the contracting officer with the names of all 
persons hired or terminated under the contract within five working days 
of such hiring or termination.
    (e) Information provided to the contractor. (1) No later than 10 
working days after the contract award, the contracting officer shall 
furnish the contractor a current list of adversely affected Federal 
employees exercising the right of first refusal, along with their 
completed job application forms.
    (2) Between the contract award and start dates, the contracting 
officer shall inform the contractor of any reassignment or transfer of 
adversely affected employees to other Federal positions.
    (3) For a period up to 90 days after contract start date, the 
contracting officer will periodically provide the contractor with an 
updated listing of adversely affected Federal employees reflecting 
employees recently released from their competitive levels or separated 
as a result of the contract award.
    (f) Qualification determination. The contractor has a right under 
this clause to determine adequacy of the qualifications of adversely 
affected Federal employees for any employment openings. However, an 
adversely affected Federal employee who held a job in the Government 
commercial activity which directly corresponds to an employment opening 
shall be considered qualified for the job. Questions concerning the 
qualifications of adversely affected Federal employees for specific 
employment openings shall be referred to the contracting officer for 
determination. The contracting officer's determination shall be final 
and binding on all parties.
    (g) Relation to other statutes, regulations and employment policies. 
The requirements of this clause shall not modify or alter the 
contractor's responsibilities under statutes, regulations or other 
contract clauses pertaining to the hiring of veterans, minorities or 
handicapped persons.
    (h) Penalty for Noncompliance. Failure of the contractor to comply 
with any provision of this clause may be grounds for termination for 
default.

                             (End of clause)

[53 FR 43211, Oct. 26, 1988; 53 FR 46872, Nov. 21, 1988, as amended at 
68 FR 3469, Jan. 24, 2003]

[[Page 230]]



852.209-70  Organizational conflicts of interest.

    The following provision will be used as prescribed in 809.508-2:

             Organizational Conflicts of Interest (APR 1984)

    (a) The offeror represents to the best of his/her knowledge and 
belief that the award of the contract would not involve organizational 
conflicts of interest as defined in this representation. The term 
organizational conflicts of interests shall mean that a relationship 
exists whereby an offeror or a contractor (including his/her chief 
executive, directors, proposed consultants and subcontractors) has 
interests which may: (1) Diminish his/her capacity to give impartial, 
technically sound, objective assistance and advice or may otherwise 
result in a biased work product; or (2) result in an unfair competitive 
advantage. It does not include the ``normal flow of benefits'' from the 
performance of a contract.
    (b) Based on this representation and any other information solicited 
by the contracting officer, it may be determined organizational 
conflicts of interest exist which would warrant disqualifying the 
contractor for award of the contract unless the organizational conflicts 
of interest can be mitigated to the contracting officer's satisfaction 
by negotiating terms and conditions of the contract to that effect. In 
the case of a formally advertised solicitation, the apparent successful 
offeror may enter into a supplemental agreement which mitigates the 
organizational conflicts of interest.
    (c) Nondisclosure or misrepresentations of organizational conflicts 
of interest at the time of the offer, or arising as a result of a 
modification to the contract, may result in the termination of the 
contract at no expense to the Government.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.211-70  Requirements for operating and maintenance manuals.

    (a) Solicitations and requests for proposals for technical medical 
and other technical equipment and devices issued by a field facility 
will normally require the contractor to provide operating and 
maintenance manuals.
    (b) The purpose of the requirement is for the manufacturer to 
provide the Department of Veterans Affairs a manual or groups of manuals 
that will allow the in-house repair of the equipment purchased. Unless 
the facility Chief, Engineering Service, indicates that such service 
manuals are not needed, each invitation for bid or request for proposal 
for technical medical or other technical equipment and devices will 
include the following clauses for operating and maintenance manuals:

                     Service Data Manual (NOV 1984)

    (a) The successful bidder will supply operation/service 
(maintenance) manuals with each piece of equipment in the quantity 
specified in the solicitation and resulting purchase order. As a 
minimum, the manual(s) shall be bound and equivalent to the manual(s) 
provided the manufacturer's designated field service representative as 
well as comply with all the requirements in paragraphs (b) through (i) 
of this clause. Sections, headings and section sequence identified in 
(b) through (i) of this clause are typical and may vary between 
manufacturers. Variances in the sections, headings and section sequence, 
however, do not relieve the manufacturer of his responsibility in 
supplying the technical data called for therein.
    (b) Title Page and Front Matter--The title page shall include the 
equipment nomenclature, model number, effective date of the manual and 
the manufacturer's name and address. If the manual applies to a 
particular version of the equipment only, the title page shall also list 
that equipment's serial number. Front matter shall consist of the Table 
of Contents, List of Tables, List of Illustrations and a frontispiece 
(photograph or line drawing) depicting the equipment.
    (c) Section I, General Description--This section shall provide a 
generalized description of the equipment or devices and shall describe 
its purpose or intended use. Included in this section will be a table 
listing all pertinent equipment specifications, power requirements, 
environmental limitations and physical dimensions.
    (d) Section II, Installation--Section II shall provide pertinent 
installation information. It shall list all input and output connectors 
using applicable reference designators and functional names as they 
appear on the equipment. Included in this listing will be a brief 
description of the function of each connector along with the connector 
type. Instructions shall be provided as to the recommended method of 
repacking the equipment for shipment (packing material, labeling, etc.).
    (e) Section III, Operation--Section III will fully describe the 
operation of the equipment and shall include a listing of each control 
with a brief description of its function and step-by-step procedures for 
each operating

[[Page 231]]

mode. Procedures will use the control(s) nomenclature as it appears on 
the equipment and will be keyed to one or more illustrations of the 
equipment. Operating procedures will include any preoperational checks, 
calibration adjustments and operation tests. Notes, cautions and 
warnings shall be set off from the text body so they may easily be 
recognizable and will draw the attention of the reader. Illustrations 
should be used wherever possible depicting equipment connections for 
test, calibration, patient monitoring and measurements. For large, 
complex and/or highly versatile equipment capable of many operating 
modes and in other instances where the Operation Section is quite large, 
operational information may be bound separately in the form of an 
Operators Manual. The providing of a separate Operators Manual does not 
relieve the supplier of his responsibility for providing the minimum 
acceptable maintenance data specified herein.
    Where applicable, flow charts and narrative descriptions of software 
shall be provided. If programming is either built-in and/or user 
modifiable, a complete software listing shall be supplied. Equipment 
items with software packages shall also include diagnostic routines and 
sample outputs. Submission information shall be given in the Maintenance 
Section to identify equipment malfunctions which are software related.
    (f) Section IV, Principles of Operation-- This section shall 
describe in narrative form the principles of operation of the equipment. 
Circuitry shall be discussed in sufficient detail to be understood by 
technicians and engineers who possess a working knowledge of electronics 
and a general familiarity with the overall application of the devices. 
The circuit descriptions should start at the overall equipment level and 
proceed to more detailed circuit descriptions. The overall description 
shall be keyed to a functional block diagram of the equipment. Circuit 
descriptions shall be keyed to schematic diagrams discussed in paragraph 
(i) below. It is recommended that for complex or special circuits, 
simplified schematics should be included in this section.
    (g) Section V, Maintenance-- The maintenance section shall contain a 
list of recommended test equipment, special tools, preventive 
maintenance instructions and corrective information. The list of test 
equipment shall be that recommended by the manufacturer and shall be 
designated by manufacturer and model number. Special tools are those 
items not commercially available or those that are designed specifically 
for the equipment being supplied. Sufficent data will be provided to 
enable their purchase by the Department of Veterans Affairs. Preventive 
maintenance instructions shall consist of those recommended by the 
manufacturer to preclude unnecessary failures. Procedures and the 
recommended frequency of performance shall be included for visual 
inspection, cleaning, lubricating, mechanical adjustments and circuit 
calibration. Corrective maintenance shall consist of the data necessary 
to troubleshoot and rectify a problem and shall include procedures for 
realigning and testing the equipment. Troubleshooting shall include 
either a list of test points with the applicable voltage levels or 
waveforms that would be present under a certain prescribed set of 
conditions, a troubleshooting chart listing the symptom, probable cause 
and remedy, or a narrative containing sufficient data to enable a test 
technician or electronics engineer to determine and locate the probable 
cause of malfunction. Data shall also be provided describing the 
preferred method of repairing or replacing discrete components mounted 
on printed circuit boards or located in areas where special steps must 
be followed to disassemble the equipment. Procedures shall be included 
to realign and test the equipment at the completion of repairs and to 
restore it to its original operating condition. These procedures shall 
be supported by the necessary waveforms and voltage levels, and data for 
selecting matched components. Diagrams, either photographic or line, 
shall show the location of printed circuit board mounted components.
    (h) Section VI, Replacement Parts List--The replacement parts list 
shall list, in alphanumeric order, all electrical/electronic, mechanical 
and pneumatic components, their description, value and tolerance, true 
manufacturer and manufacturers' part number.
    (i) Section VII, Drawings--Wiring and schematic diagrams shall be 
included. The drawings will depict the circuitry using standard symbols 
and shall include the reference designations and component values or 
type designators. Drawings shall be clear and legible and shall not be 
engineering or productions sketches.

                             (End of clause)

    (c) Solicitations and requests for proposals for mechanical 
equipment (other than technical medical equipment and devices) issued by 
a field facility will include the following clause:

                     Service Data Manual (NOV 1984)

    The contractor agrees to furnish two copies of a manual, handbook or 
brochure containing operating, installation, and maintenance 
instructions (including pictures or illustrations, schematics, and 
complete repair/test guides as necessary). Where applicable, it will 
include electrical data and connection diagrams for all utilities. The 
instructions

[[Page 232]]

shall also contain a complete list of all replaceable parts showing part 
number, name, and quantity required.

                             (End of clause)

    (d) When the bid or proposal will result in the initial purchase 
(including each make and model) of a centrally procured item, the 
following clause will be used:

                     Service Data Manual (NOV 1984)

    The contractor agrees, when requested by the contracting officer, to 
furnish not more than three copies of the technical documentation 
required by paragraph 852.211-70(a) to the Service and Reclamation 
Division, Hines, Ill. In addition, the contractor agrees to furnish two 
additional copies of the technical documentation required by 852.211-
70(a) above with each piece of equipment sold as a result of the 
invitation for bid or request for proposal.

                             (End of clause)

[50 FR 795, Jan. 7, 1985; 54 FR 40065, Sept. 29, 1989; 61 FR 11587, Mar. 
21, 1996. Redesignated at 63 FR 17338, Apr. 9, 1998, and amended at 63 
FR 69223, Dec. 16, 1998]



852.211-71  Guarantee clause.

    (a) When the bid or proposal will result in any purchase of 
equipment, the following clause will be used:

                          Guarantee (NOV 1984)

    The contractor guarantees the equipment against defective material, 
workmanship and performance for a period of ------,\1\ said guarantee to 
run from date of acceptance of the equipment by the Government. The 
contractor agrees to furnish, without cost to the Government, 
replacement of all parts and material which are found to be defective 
during the guarantee period. Replacement of material and parts will be 
furnished to the Government at the point of installation, if 
installation is within the continental United States, or f.o.b. the 
continental U.S. port to be designated by the contracting officer if 
installation is outside of the continental United States. Cost of 
installation of replacement material and parts shall be borne by the 
contractor. \2\
---------------------------------------------------------------------------

    \1\ Normally, insert one year. If industry policy covers a shorter 
or longer period, i.e., 90 days or for the life of the equipment, insert 
such period.
    \2\ The above clause will be modified to conform to standards of the 
industry involved.
---------------------------------------------------------------------------

                             (End of clause)

    (b) Where it is industry policy to furnish, but not install, 
replacement material and parts at the contractor's expense, the last 
sentence will be changed to indicate that cost of installation shall be 
borne by the Government. Where it is industry policy to: (1) Guarantee 
components for the life of the equipment (i.e., crystals in transmitters 
and receivers in radio communications systems); or (2) require that 
highly technical equipment be returned to the factory (at contractor's 
or Government's expense) for replacement of defective materials or 
parts, the clause used will be compatible with such policy.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



852.211-72  Inspection.

    (a) Contracts for property, other than packing house and dairy 
products and fresh and frozen fruits and vegetables will contain the 
following clause:

                        Rejected Goods (NOV 1984)

    Rejected goods will be held subject to contractor's order for not 
more than 15 days, after which the rejected merchandise will be returned 
to the contractor's address at his/her risk and expense. Expenses 
incident to the examination and testing of materials or supplies which 
have been rejected will be charged to the contractor's account.

                             (End of clause)

    (b) Contracts for packinghouse and dairy products, bread and bakery 
products and for fresh and frozen fruits and vegetables will contain the 
following clause:

                             Rejected Goods

    The contractor shall remove rejected supplies within 48 hours after 
notice of rejection. Supplies determined to be unfit for human 
consumption will not be removed without permission of the local health 
authorities. Supplies not removed within the allowed time may be 
destroyed. The Department of Veterans Affairs will not be responsible 
for nor pay for products rejected. The contractor will be liable for 
costs incident to examination of rejected products.

[[Page 233]]

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



852.211-73  Frozen processed foods.

    The following clause will be included in all solicitations for the 
purchase of frozen processed foods, issued by a field facility:

                    Frozen Processed Foods (NOV 1984)

    The products delivered under this contract shall be in excellent 
condition, shall not show evidence of defrosting, refreezing, or freezer 
burn and shall be transported and delivered to the consignee at a 
temperature of 0 degrees Fahrenheit or lower.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
54 FR 40065, Sept. 29, 1989. Redesignated at 63 FR 17338, Apr. 9, 1998]



852.211-74  Telecommunications equipment.

    (a) When a detailed purchase description of formal specification is 
the basis for solicitations for telecommunications equipment as defined 
in VA Manual MP-6, Part VIII, (available at any Department of Veterans 
Affairs facility), solicitations, including those for construction, will 
include the following provision:

                        Special Notice (APR 1984)

    Descriptive literature. The submission of descriptive literature 
with offers is not required and voluntarily submitted descriptive 
literature which qualifies the offer will require rejection of the 
offer.
    However, within 5 days after award of contract, the contractor will 
submit to the contracting officer literature describing the equipment 
he/she intends to furnish and indicating strict compliance with the 
specification requirements.
    The contracting officer will, by written notice to the contractor 
within 20 calendar days after receipt of the literature, approve, 
conditionally approve, or disapprove the equipment proposed to be 
furnished. The notice of approval or conditional approval will not 
relieve the contractor from complying with all requirements of the 
specifications and all other terms and conditions of this contract. A 
notice of conditional approval will state any further action required of 
the contractor. A notice of disapproval will cite reasons therefor.
    If the equipment is disapproved by the Government, the contractor 
will be subject to action under the Default provision of this contract. 
However, prior to default action the contractor will be permitted a 
period (at least 10 days) under that clause to submit additional 
descriptive literature on equipment originally offered or descriptive 
literature on other equipment.
    The Government reserves the right to require an equitable adjustment 
of the contract price for any extension of the delivery schedule 
necessitated by additional descriptive literature evaluations.

                           (End of provision)

    (b) The descriptive literature to be furnished by the contractor 
after award in accordance with paragraph (a) of this section is subject 
to the controls established in 870.112(b).
    (c) The time of delivery or performance to be specified in the 
solicitation will include the time required for submission, receipt, the 
evaluation and approval required by 870.112(b) of this chapter, and 
return to the contractor of the descriptive literature.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



852.211-75  Technical industry standards.

    When items are required to conform to technical industry standards, 
such as those adopted by Underwriter's Laboratories, Incorporated; 
Factory Mutual Laboratories; American Gas Association; American Society 
Mechanical Engineers; National Electrical Manufacturers' Association; 
American Society Heating, Refrigeration and Air Conditioning Engineers; 
or similar organizations where such standards are generally recognized 
and accepted in the industry involved, the invitation for bids, request 
for proposals or request for quotations will so state. In no instance, 
where there is a multiple choice of laboratories, shall the invitation 
for bid, request for proposal or request for quotation indicate that the 
label or certificate of only one such laboratory is acceptable. The 
following provision will be used unless comparable provisions are 
contained in the item specification:

[[Page 234]]

                 Technical Industry Standards (APR 1984)

    The supplies or equipment required by this invitation for bid or 
request for proposal must conform to the standards of the ------\3\ and 
------\3\ as to ------.\4\ The successful bidder or offeror will be 
required to submit proof that the item(s) he furnishes conforms to this 
requirement. This proof may be in the form of a label or seal affixed to 
the equipment or supplies, warranting that they have been tested in 
accordance with and conform to the specified standards. The seal or 
label of any nationally recognized laboratory such as those listed by 
the National Fire Protection Association, Boston, Massachusetts, in the 
current edition of their publication ``Research on Fire,'' is 
acceptable. Proof may also be furnished in the form of a certificate 
from one of these laboratories certifying that the item(s) furnished 
have been tested in accordance with and conform to the specified 
standards.
---------------------------------------------------------------------------

    \3\ Insert name(s) of organization(s), the standards of which are 
pertinent to the Government's needs.
    \4\ Insert pertinent standards, i.e. fire and casualty, safety and 
fire protection, etc.
---------------------------------------------------------------------------

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



852.211-76  Noncompliance with packaging, packing, and/or marking requirements.

    The following clause will be included in contracts for supplies for 
delivery to supply distribution warehouses or depots for storage and 
subsequent issue to a using activity. It may also be included when 
appropriate when delivery is direct to a using activity.

 Noncompliance with Packaging, Packing and/or Marking Requirements (JUL 
                                  1989)

    Failure to comply with the packaging, packing, and/or marking 
requirements indicated herein, or incorporated herein by reference, may 
result in rejection of the merchandise and request for replacement or 
repackaging, repacking, and/or marking. The Government reserves the 
right, without obtaining authority from the contractor, to perform the 
required repackaging, repacking, and/or marking services and charge the 
contractor at the actual cost to the Government for the same or have the 
required repackaging, repacking, and/or marking services performed 
commercially under Government order and charge the contractor at the 
invoice rate. In connection with any discount offered, time will be 
computed from the date of completion of such repackaging, repacking, 
and/or marking services.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 30045, July 18, 1989; 61 FR 11587, Mar. 21, 1996. Redesignated at 63 
FR 17338, Apr. 9, 1998]



852.211-77  Brand name or equal.

    The brand name or equal clause when used as prescribed by 811.104 
will be as follows:

                     Brand Name or Equal (NOV 1984)

    (Note: As used in this clause, the term ``brand name'' includes 
identification of products by make and model.)
    (a) If items called for by this invitation for bids have been 
identified in the schedule by a ``brand name or equal'' description, 
such identification is intended to be descriptive, but not restrictive, 
and is to indicate the quality and characteristics of products that will 
be satisfactory. Bids offering ``equal'' products (including products of 
the brand name manufacturer other than the one described by brand name) 
will be considered for award if such products are clearly identified in 
the bids and are determined by the Government to meet fully the salient 
characteristics requirements listed in the invitation.
    (b) Unless the bidder clearly indicates in his bid that he is 
offering an ``equal'' product, his bid shall be considered as offering a 
brand name product referenced in the invitation for bids.
    (c)(1) If the bidder proposes to furnish an ``equal'' product, the 
brand name, if any, of the product to be furnished shall be inserted in 
the space provided in the Invitation for Bids, or such product shall be 
otherwise clearly identified in the bid. The evaluation of bids and the 
determination as to equality of the product offered shall be the 
responsibility of the Government and will be based on information 
furnished by the bidder or identified in his/her bid as well as other 
information reasonably available to the purchasing activity. CAUTION TO 
BIDDERS. The purchasing activity is not responsible for locating or 
securing any information which is not identified in the bid and 
reasonably available to the purchasing activity. Accordingly, to insure 
that sufficient information is available, the bidder must furnish as a 
part of his/her bid all descriptive material (such as cuts, 
illustration, drawings or other information) necessary for the 
purchasing activity to: (i) Determine whether the product offered meets 
the salient characteristics requirement of the Invitation for

[[Page 235]]

Bids, and (ii) establish exactly what the bidder proposes to furnish and 
what the Government would be binding itself to purchase by making an 
award. The information furnished may include specific references to 
information previously furnished or to information otherwise available 
to the purchasing activity.
    (2) If the bidder proposes to modify a product so as to make it 
conform to the requirements of the Invitation for Bids, he/she shall: 
(i) Include in his/her bid a clear description of such proposed 
modifications, and (ii) clearly mark any descriptive material to show 
the proposed modifications.
    (3) Modifications proposed after bid opening to make a product 
conform to a brand name product referenced in the Invitation for Bids 
will not be considered.

                             (End of clause)

[50 FR 796, Jan. 7, 1985, as amended at 53 FR 7756, Mar. 10, 1988. 
Redesignated and amended at 63 FR 17338, Apr. 9, 1998]



852.211-78  Liquidated damages.

    As prescribed in 811.504 and 836.206, the contracting officer may 
insert the following clause when appropriate:

              Partial Performance and Acceptance (APR 1984)

    If any unit of the work contracted for is accepted in advance of the 
whole, the rate of liquidated damages assessed will be in the ratio that 
the value of the unaccepted work bears to the total amount of the 
contract. If a separate price for unaccepted work has not been stated in 
the contractor's bid, determination of the value thereof will be made 
from schedules of costs furnished by the contractor and approved by the 
contracting officer, as specified elsewhere in the contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985. 
Redesignated and amended at 63 FR 17338, Apr. 9, 1998]



852.214-70  Caution to bidders--bid envelopes.

    As provided in 814.201, the following provision will be prominently 
placed on all IFB's:

              Caution to Bidders--Bid Envelopes (APR 1984)

    It is the responsibility of each bidder to take all necessary 
precautions, including the use of a proper mailing cover, to insure that 
the bid price cannot be ascertained by anyone prior to bid opening. If a 
bid envelope is furnished with this invitation, the bidder is requested 
to use this envelope in submitting the bid. The bidder may, however, 
when it suits a purpose, use any suitable envelope, identified by the 
invitation number and bid opening time and date. If a bid envelope is 
not furnished, the bidder will complete and affix the enclosed Optional 
Form 17, Sealed Bid Label, to the lower left-hand corner of the envelope 
used in submitting the bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.214-71  Alternate items.

    As prescribed in 814.201, consideration of alternate items may be 
appropriate. The following provisions may be used under the specified 
conditions:
    (a) When an alternate item is to be considered only if no bids or 
insufficient bids are received on the item desired, the following will 
be included in the invitation:

                      Alternate Item(s) (APR 1984)

    Bids on ------ \5\ will be considered only if acceptable bids on --
---- \6\ are not received or do not satisfy the total requirement.
---------------------------------------------------------------------------

    \5\ Contracting officer will insert an alternate item that is 
considered acceptable.
    \6\ Contracting officer will insert the required item and item 
number.
---------------------------------------------------------------------------

                           (End of provision)

    (b) When an alternate item will be considered on an equal basis with 
the item specified, the following will be included in the invitation:

                      Alternate Item(s) (APR 1984)

    Bids ------ \5\ will be given equal consideration along with the --
---- \6\ and any such bids received may be accepted if to the advantage 
of the Government. Tie bids will be decided in favor of.\6\

                           (End of provision)

    (c) In addition to the clause in paragraph (a) or (b) of this 
section, the following provision will be included in the invitation when 
bids will be allowed on different packaging, unit designation, etc.

[[Page 236]]

               Alternate Packaging and Packing (APR 1984)

    The bidder's offer must clearly indicate the quantity, package size, 
unit, or other different feature upon which the quote is made. 
Evaluation of the alternate or multiple alternates will be made on a 
common denominator such as per ounce, per pound, etc., basis.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985]



852.214-73  Bid samples.

    As prescribed in 814.202-4, insert the following provision:

                         Bid Samples (SEP 1993)

    Any bid sample(s) furnished must be in the quantities specified in 
the solicitation and plainly marked with the complete lettering/
numbering and description of the related bid item(s); the number of the 
Invitation for Bids; and the name of the bidder submitting the bid 
sample(s). Cases or packages containing any bid sample(s) must be 
plainly marked ``Bid Sample(s)'' and all charges pertaining to the 
preparation and transportation of bid sample(s) must be prepaid by the 
bidder. Bid sample(s) must be received at the location specified in the 
solicitation by the time and date for receipt of bids.

                           (End of provision)

[58 FR 48974, Sept. 21, 1993]



852.216-70  Estimated quantities for requirements contracts.

    (a) When definite quantities cannot be determined, solicitations for 
facility-level requirements contracts will contain the applicable clause 
as set forth below. Solicitations issued by the VA National Acquisition 
Center will contain provisions developed by that Center for particular 
application to its operations, subject to legal review as prescribed in 
801.602-70(c)(1).
    (b) The following clause will be used for general equipment, 
supplies and services:

                     Estimated Quantities (APR 1984)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles or services 
that may be ordered during the contract term, except as he/she otherwise 
indicates in his/her bid and except as otherwise provided herein. Bids 
will be considered if made with the proviso that the total quantities 
delivered shall not exceed a certain specified quantity. Bids offering 
less than 75 percent of the estimated requirement or which provide that 
the Government shall guarantee any definite quantity, will not be 
considered. The fact that quantities are estimated shall not relieve the 
contractor from filling all orders placed under this contract to the 
extent of his/her obligation. Also, the Department of Veterans Affairs 
shall not be relieved of its obligation to order from the contractor all 
articles or services that may, in the judgment of the ordering officer, 
be needed except that in the public exigency procurement may be made 
without regard to this contract.

                             (End of clause)

    (c) The following clause will be used in local coal-hauling 
contracts.

                           Estimated Quantity

    The estimated requirements shown in this invitation for bids cover 
the requirements for the entire contract period. It is understood and 
agreed that during the period of this contract the Government may order 
and the contractor will haul such coal as may, in the opinion of the 
Government, be required, except that in the public exigency procurement 
may be made without regard to this contract.

                             (End of clause)

    (d) The following clause will be used for orthopedic, prosthetic, 
and optical supplies.

                               Quantities

    The supplies and/or services listed in the attached schedule will be 
furnished at such time and in such quantities as they are required.

                             (End of clause)

    (e) The following clause will be used for National Cemetery System 
contracts for monuments:

                     Estimated Quantities (JUL 1989)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles that may be 
ordered during the contract term, except as he or she otherwise 
indicates in his or her bid and except as otherwise provided herein. 
Bids will be considered if made with the proviso that the total 
quantities delivered shall not exceed a certain specified quantity. The 
fact

[[Page 237]]

that quantities are estimated shall not relieve the contractor from 
filling all orders placed under this contract to the extent of his or 
her obligation. Also, the Department of Veterans Affairs shall not be 
relieved of its obligation to order from the contractor all articles 
that may, in the judgment of the ordering officer, be needed except that 
in the public exigency procurement may be made without regard to this 
contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
54 FR 30045, July 18, 1989; 63 FR 69223, Dec. 16, 1998]



852.219-70  Veteran-owned small business.

    As prescribed in 819.7003(b), the following certification will be 
made a part of all solicitations and all requests for quotations:

                 Veteran-Owned Small Business (DEC 1990)

    The offeror represents that the firm submitting this offer ( ) is ( 
) is not, a veteran-owned small business, ( ) is ( ) is not, a Vietnam 
era veteran-owned small business, and ( ) is ( ) is not, a disabled 
veteran-owned small business. A veteran-owned small business is defined 
as a small business, at least 51 percent of which is owned by a veteran 
who also controls and operates the business. Control in this context 
means exercising the power to make policy decisions. Operate in this 
context means actively involved in day-to-day management. For the 
purpose of this definition, eligible veterans include:
    (a) A person who served in the U.S. Armed Forces and who was 
discharged or released under conditions other than dishonorable.
    (b) Vietnam era veterans who served for a period of more than 180 
days, any part of which was between August 5, 1964, and May 7, 1975, and 
were discharged under conditions other than dishonorable.
    (c) Disabled veterans with a minimum compensable disability of 30 
percent, or a veteran who was discharged for disability.

Failure to execute this representation will be deemed a minor 
informality and the bidder or offeror shall be permitted to satisfy the 
requirement prior to award (see FAR 14.405).

                           (End of provision)

[50 FR 796, Jan. 7, 1985; 54 FR 40065, Sept. 29, 1989, as amended at 55 
FR 49901, Dec. 3, 1990; 61 FR 11587, Mar. 21, 1996; 63 FR 17338, Apr. 9, 
1998]



852.222-70  Contract Work Hours and Safety Standards Act--nursing home 
care contract supplement.

    As prescribed in 822.304, nursing home care contracts will include 
the following clause.

 Contract Workhours and Safety Standard Act--Nursing Home Care Contract 
                          Supplement (APR 1984)

    In the performance of any contract entered into pursuant to the 
provisions of 38 U.S.C. 1720 to provide nursing home care of veterans, 
no contractor or subcontractor under such contract shall be deemed in 
violation of Section 102 of the Contract Work Hours and Safety Standards 
Act by virtue of failure to pay the overtime wages required by such 
section for work in excess of 8 hours in any calendar day or 40 hours in 
the workweek to any individual employed by establishment which is an 
institution primarily engaged in the care of the sick, the aged, or the 
mentally ill or defective who reside on the premises if, pursuant to an 
agreement or understanding arrived at between the employer and the 
employee before performance of the work, a work period of 14 consecutive 
days is accepted in lieu of the workweek of 7 consecutive days for the 
purpose of overtime compensation and if such individual receives 
compensation for employment in excess of 8 hours in any workday and in 
excess of 80 hours in such 14-day period at a rate not less than 1\1/2\ 
times the regular rate at which the individual is employed, computed in 
accordance with the requirements of the Fair Labor Standards Act of 
1938, as amended.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69223, Dec. 16, 1998]



852.228-70  Bond premium adjustment.

    The following clause will be utilized as prescribed by 828.106-70.

                   Bond Premium Adjustment (APR 1984)

    When net changes in original contract price affect the premium of a 
Corporate Surety Bond by $5 or more, the Government in determining basis 
for final settlement, will provide for bond premium adjustment computed 
at the rate shown in the bond.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 64 
FR 40519, July 27, 1999]

[[Page 238]]



852.229-70  Purchases from patient's funds.

    When contracts are for items to be purchased solely from personal 
funds of patients, the following tax provision will be used in lieu of 
the Federal, State and local tax clause in FAR 52.229-1 or, if the 
contract is for commercial items, in lieu of paragraph (k), Taxes, in 
FAR clause 52.212-4:

                      Sales or Use Taxes (APR 1984)

    The articles listed in this bid invitation will be purchased from 
personal funds of patients and prices bid herein include any sales or 
use tax heretofore imposed by any State, or by any duly constituted 
taxing authority therein, having jurisdiction to levy such a tax, 
applicable to the material in this bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan.7, 1985; 
63 FR 17339, Apr. 9, 1998]



852.229-71  Purchases for patients using Government funds and/or personal 
funds of patients.

    When contracts are for items to be purchased from both Government 
funds and personal funds of patients, the following provision will be 
included as a part of the Federal, State, and local tax clause in FAR 
52.229-1 or, if the contract is for commercial items, as an addendum to 
FAR clause 52.212-4:

                      Sales or Use Taxes (APR 1984)

    Any article purchased from this contract, payable from personal 
funds of patients, will be subject to any applicable sales or use tax 
levied thereon by any State, or by duly constituted taxing authority 
therein having jurisdiction to levy such a tax; the total amount of the 
tax applicable to such purchase payable from personal funds of patients 
will be computed on the total amount of the order and will be shown as a 
separate item on the purchase order and invoice. The bidder shall 
identify the applicable taxes and rates in his/her bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
63 FR 17339, Apr. 9, 1998]



852.233-70  Protest content.

    As prescribed in 833.106 of this chapter, insert the following 
provision in each solicitation where the total value of all contract 
awards under the solicitation is expected to exceed the simplified 
acquisition threshold:

                       Protest Content (JAN 1998)

    (a) Any protest filed by an interested party shall:
    (1) Include the name, address, fax number, and telephone number of 
the protester;
    (2) Identify the solicitation and/or contract number;
    (3) Include an original signed by the protester or the protester's 
representative, and at least one copy;
    (4) Set forth a detailed statement of the legal and factual grounds 
of the protest, including a description of resulting prejudice to the 
protester, and provide copies of relevant documents;
    (5) Specifically request a ruling of the individual upon whom the 
protest is served;
    (6) State the form of relief requested; and
    (7) Provide all information establishing the timeliness of the 
protest.
    (b) Failure to comply with the above may result in dismissal of the 
protest without further consideration.

                           (End of provision)

[63 FR 15320, Mar. 31, 1998]



852.233-71  Alternate Protest Procedure.

    As prescribed in 833.106 of this chapter, insert the following 
provision in each solicitation where the total value of all contract 
awards under the solicitation is expected to exceed the simplified 
acquisition threshold:

                 Alternate Protest Procedure (JAN 1998)

    As an alternative to filing a protest with the contracting officer, 
an interested party may file a protest with the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, Department of Veterans Affairs, 810 Vermont Avenue, 
NW, Washington, DC, 20420, or, for solicitations issued by the Office of 
Facilities Management, the Chief Facilities Management Officer, Office 
of Facilities Management, 810 Vermont Avenue, NW, Washington, DC 20420. 
The protest will not be considered if the interested party has a protest 
on the same or similar issues pending with the contracting officer.

[63 FR 15320, Mar. 31, 1998]

[[Page 239]]



852.236-71  Specifications and drawings for construction.

    As prescribed in 836.521, insert the following clause:

         Specifications and Drawings for Construction (JUL 2002)

    The clause entitled ``Specifications and Drawings for Construction'' 
in FAR 52.236-21 is supplemented as follows:
    (a) The contracting officer's interpretation of the drawings and 
specifications will be final, subject to the disputes clause.
    (b) Large scale drawings supersede small scale drawings.
    (c) Dimensions govern in all cases. Scaling of drawings may be done 
only for general location and general size of items.
    (d) Dimensions shown of existing work and all dimensions required 
for work that is to connect with existing work shall be verified by the 
contractor by actual measurement of the existing work. Any work at 
variance with that specified or shown in the drawings shall not be 
performed by the contractor until approved in writing by the contracting 
officer.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49260, July 30, 2002]



852.236-72  Performance of work by the contractor.

    As prescribed in 836.501, insert the following clause:

            Performance of Work by the Contractor (JUL 2002)

    The clause entitled ``Performance of Work by the Contractor'' in FAR 
52.236-1 is supplemented as follows:
    (a) Contract work accomplished on the site by laborers, mechanics, 
and foremen/forewomen on the contractor's payroll and under his/her 
direct supervision shall be included in establishing the percent of work 
to be performed by the contractor. Cost of material and equipment 
installed by such labor may be included. The work by contractor's 
executive, supervisory and clerical forces shall be excluded in 
establishing compliance with the requirements of ths clause.
    (b) The contractor shall submit, simultaneously with the schedule of 
costs required by the Payments Under Fixed-Price Construction Contracts 
clause of the contract, a statement designating the branch or branches 
of contract work to be performed with his/her forces. The approved 
schedule of costs will be used in determining the value of a branch or 
branches, or portions thereof, of the work for the purpose of this 
article.
    (c) If, during the progress of work hereunder, the contractor 
requests a change in the branch or branches of the work to be performed 
by his/her forces and the contracting officer determines it to be in the 
best interests of the Government, the contracting officer may, at his/
her discretion, authorize a change in such branch or branches of said 
work. Nothing contained herein shall permit a reduction in the 
percentage of work to be performed by the contractor with his/her 
forces, it being expressly understood that this is a contract 
requirement without right or privilege of reduction.
    (d) In the event the contractor fails or refuses to meet the 
requirement of the FAR clause at 52.236-1, it is expressly agreed that 
the contract price will be reduced by 15 percent of the value of that 
portion of the percentage requirement that is accomplished by others. 
For the purpose of this clause, it is agreed that 15 percent is an 
acceptable estimate of the contractor's overhead and profit, or mark-up, 
on that portion of the work which the contractor fails or refuses to 
perform, with his/her own forces, in accordance with the FAR clause at 
52.236-1.

                             (End of clause)

    Alternate I (JUL 2002) For requirements which include Network 
Analysis System (NAS), substitute the following paragraphs (b) and (c) 
for paragraphs (b) and (c) of the basic clause:

    (b) The contractor shall submit, simultaneously with the cost per 
activity of the construction schedule required by Section 01311, NETWORK 
ANALYSIS SYSTEM, a responsibility code for all activities of the network 
for which the contractor's forces will perform the work. The cost of 
these activities will be used in determining the portions of the total 
contract work to be executed by the contractor's forces for the purpose 
of this article.
    (c) If, during progress of work hereunder, the contractor requests a 
change in activities of work to be performed by the contractor's forces 
and the contracting officer determines it to be in the best interest of 
the Government, the contracting officer may, at his or her discretion, 
authorize a change in such activities of said work.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
53 FR 1631, Jan. 21, 1988; 53 FR 2669, Jan. 29, 1988; 67 FR 49260, July 
30, 2002]



852.236-74  Inspection of construction.

    As prescribed in 846.312, insert the following clause:

[[Page 240]]

                  Inspection of Construction (JUL 2002)

    The clause entitled ``Inspection of Construction'' in FAR 52.246-12 
is supplemented as follows:
    (a) Inspection of materials and articles furnished under this 
contract will be made at the site by the resident engineer, unless 
otherwise provided for in the specifications.
    (b) Final inspection will not be made until the contract work is 
ready for beneficial use or occupancy. The contractor shall notify the 
contracting officer, through the resident engineer, fifteen (15) days 
prior to the date on which the work will be ready for final inspection.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



852.236-76  Correspondence.

    As prescribed in 836.570, insert the following clause:

                        Correspondence (APR 1984)

    All correspondence relative to this contract shall bear 
Specification Number, Project Number, Department of Veterans Affairs 
Contract Number, title of project and name of facility.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40066, Sept. 29, 1989; 67 FR 49261, July 30, 2002]



852.236-77  Reference to ``standards.''

    As prescribed in 836.571, insert the following clause:

                  Reference to ``standards'' (JUL 2002)

    Any materials, equipment, or workmanship specified by references to 
number, symbol, or title of any specific Federal, Industry or Government 
Agency Standard Specification shall comply with all applicable 
provisions of such standard specifications, except as limited to type, 
class or grade, or modified in contract specifications. Reference to 
``Standards'' referred to in the contract specifications, except as 
modified, shall have full force and effect as though printed in detail 
in specifications.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 797, Jan. 7, 1985; 
67 FR 49261, July 30, 2002]



852.236-78  Government supervision.

    As prescribed in 836.572, insert the following clause:

                    Government Supervision (APR 1984)

    (a) The work will be under the direction of the Department of 
Veterans Affairs contracting officer, who may designate another VA 
employee to act as resident engineer at the construction site.
    (b) Except as provided below, the resident engineer's directions 
will not conflict with or change contract requirements.
    (c) Within the limits of any specific authority delegated by the 
contracting officer, the resident engineer may, by written direction, 
make changes in the work. The contractor shall be advised of the extent 
of such authority prior to execution of any work under the contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



852.236-79  Daily report of workers and materials.

    As prescribed in 836.573, insert the following clause:

             Daily Report of Workers and Material (APR 1984)

    The contractor shall furnish to the resident engineer each day a 
consolidated report for the preceding work day in which is shown the 
number of laborers, mechanics, foremen/forewomen and pieces of heavy 
equipment used or employed by the contractor and subcontractors. The 
report shall bear the name of the firm, the branch of work which they 
perform such as concrete, plastering, masonry, plumbing, sheet metal 
work, etc. The report shall give a breakdown of employees by crafts, 
location where employed, and work performed. The report shall also list 
materials delivered to the site on the date covered by the report.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002q]



852.236-80  Subcontracts and work coordination.

    As prescribed in 836.574, insert the following clause:

[[Page 241]]

              Subcontracts and Work Coordination (APR 1984)

    (a) Nothing contained in this contract shall be construed as 
creating any contractual relationship between any subcontractor and the 
Government. Divisions or sections of specifications are not intended to 
control the contractor in dividing work among subcontractors, or to 
limit work performed by any trade.
    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and of the subcontractors and 
their employees. The contractor shall also be responsible for 
coordination of the work of the trades, subcontractors, and material 
suppliers.
    (c) The Government or its representatives will not undertake to 
settle any differences between the contractor and subcontractors or 
between subcontractors.
    (d) The Government reserves the right to refuse to permit employment 
on the work or require dismissal from the work of any subcontractor who, 
by reason of previous unsatisfactory work on Department of Veterans 
Affairs projects or for any other reason, is considered by the 
contracting officer to be incompetent or otherwise objectionable.

                             (End of clause)

    Alternate I (Jul 2002) For new construction work with complex 
mechanical-electrical work, the following paragraph relating to work 
coordination may be substituted for paragraph (b) of the basic clause:

    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and subcontractors and their 
employees. The contractor shall also be responsible for coordination of 
the work of the trades, subcontractors, and material suppliers. The 
contractor shall, in advance of the work, prepare coordination drawings 
showing the location of openings through slabs, the pipe sleeves and 
hanger inserts, as well as the location and elevation of utility lines, 
including, but not limited to, conveyor systems, pneumatic tubes, ducts, 
and conduits and pipes 2 inches and larger in diameter. These drawings, 
including plans, elevations, and sections as appropriate shall clearly 
show the manner in which the utilities fit into the available space and 
relate to each other and to existing building elements. Drawings shall 
be of appropriate scale to satisfy the previously stated purposes, but 
not smaller than \3/8\-inch scale. Drawings may be composite (with 
distinctive colors for the various trades) or may be separate but fully 
coordinated drawings (such as sepias or photographic paper 
reproducibles) of the same scale. Separate drawings shall depict 
identical building areas or sections and shall be capable of being 
overlaid in any combination. The submitted drawings for a given area of 
the project shall show the work of all trades which will be involved in 
that particular area. Six complete composite drawings or six complete 
sets of separate reproducible drawings shall be received by the 
Government not less than 20 days prior to the scheduled start of the 
work in the area illustrated by the drawings, for the purpose of showing 
the contractor's planned methods of installation. The objectives of such 
drawings are to promote carefully planned work sequence and proper trade 
coordination, in order to assure the expeditious solutions of problems 
and the installation of lines and equipment as contemplated by the 
contract documents while avoiding or minimizing additional costs to the 
contractor and to the Government. In the event the contractor, in 
coordinating the various installations and in planning the method of 
installation, finds a conflict in location or elevation of any of the 
utilities with themselves, with structural items or with other 
construction items, he/she shall bring this conflict to the attention of 
the contracting officer immediately. In doing so, the contractor shall 
explain the proposed method of solving the problem or shall request 
instructions as to how to proceed if adjustments beyond those of usual 
trades coordination are necessary. Utilities installation work will not 
proceed in any area prior to the submission and completion of the 
Government review of the coordinated drawings for that area, nor in any 
area in which conflicts are disclosed by the coordination drawings until 
the conflicts have been corrected to the satisfaction of the contracting 
officer. It is the responsibility of the contractor to submit the 
required drawings in a timely manner consistent with the requirements to 
complete the work covered by this contract within the prescribed 
contract time.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



852.236-82  Payments under fixed-price construction contracts (without NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that do not contain a section entitled ``Network Analysis System 
(NAS)'':

      Payments Under Fixed-Price Construction Contracts (APR 1984)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
    (a) Retainage:
    (1) The contracting officer may retain funds:

[[Page 242]]

    (i) Where performance under the contract has been determined to be 
deficient or the contractor has performed in an unsatisfactory manner in 
the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following:
    (i) Unsatisfactory progress as determined by the contracting 
officer;
    (ii) Failure to meet schedule in Schedule of Work Progress;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this subparagraph shall be construed as limiting 
the contracting officer's right to withhold funds under other provisions 
of the contract or in accordance with the general law and regulations 
regarding the administration of Government contracts.
    (b) The contractor shall submit a schedule of cost to the 
contracting officer for approval within 30 calendar days after date of 
receipt of notice to proceed. Such schedule will be signed and submitted 
in triplicate. The approved cost schedule will be one of the bases for 
determining progress payments to the contractor for work completed. This 
schedule shall show cost by the branches of work for each building or 
unit of the contract, as instructed by the resident engineer.
    (1) The branches shall be subdivided into as many subbranches as are 
necessary to cover all component parts of the contract work.
    (2) Costs as shown on this schedule must be true costs and, should 
the resident engineer so desire, he/she may require the contractor to 
submit the original estimate sheets or other information to substantiate 
the detailed makeup of the schedule.
    (3) The sum of the subbranches, as applied to each branch, shall 
equal the total cost of such branch. The total cost of all branches 
shall equal the contract price.
    (4) Insurance and similar items shall be prorated and included in 
the cost of each branch of the work.
    (5) The cost schedule shall include separate cost information for 
the systems listed below. The percentages listed below are proportions 
of the cost listed in contractor's cost schedule and identify, for 
payment purposes, the value of the work to adjust, correct and test 
systems after the material has been installed. Payment of the listed 
percentages will be made only after the contractor has demonstrated that 
each of the systems is substantially complete and operates as required 
by the contract.

           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                            System                              Percent
------------------------------------------------------------------------
Pneumatic tube system........................................         10
Incinerators (medical waste and trash).......................          5
Sewage treatment plant equipment.............................          5
Water treatment plant equipment..............................          5
Washers (dish, cage, glass, etc.)............................          5
Sterilizing equipment........................................          5
Water distilling equipment...................................          5
Prefab temperature rooms (cold, constant temperature)........          5
Entire air-conditioning system (Specified under 600 Sections)          5
Entire boiler plant system (Specified under 700 Sections)....          5
General supply conveyors.....................................         10
Food service conveyors.......................................         10
Pneumatic soiled linen and trash system......................         10
Elevators and dumbwaiters....................................         10
Materials transport system...................................         10
Engine-generator system......................................          5
Primary switchgear...........................................          5
Secondary switchgear.........................................          5
Fire alarm system............................................          5
Nurse call system............................................          5
Intercom system..............................................          5
Radio system.................................................          5
TV (entertainment) system....................................          5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the contractor in preparing his/her bid and will not be 
binding as pertaining to any contract changes.
    (d) The contracting officer will consider for monthly progress 
payments material and/or equipment procured by the contractor and stored 
on the construction site as space is available, or at a local approved 
location off the site, under such terms and conditions as such officer 
approves, including but not limited to the following:
    (1) The material or equipment is in accordance with the contract 
requirements and/or approved samples and shop drawings.
    (2) Only those materials and/or equipment as are approved by the 
resident engineer for storage will be included.
    (3) Such materials and/or equipment will be stored separately and 
will be readily available for inspection and inventory by the resident 
engineer.
    (4) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (5) All of the other terms, provisions, conditions and covenants 
contained in the contract shall be and remain in full force and effect 
as therein provided.

[[Page 243]]

    (6) A supplemental agreement will be executed between the Government 
and the contractor with the consent of the contractor's surety for off-
site storage.
    (e) The contractor, prior to receiving a progress or final payment 
under this contract, shall submit to the contracting officer a 
certification that the contractor has made payment from proceeds of 
prior payments, or that timely payment will be made from the proceeds of 
the progress or final payment then due, to subcontractors and suppliers 
in accordance with the contractual arrangements with them.
    (f) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other things required by 
this contract, have been submitted to the satisfaction of the 
contracting officer.

                             (End of clause)

    Alternate I (Jul 2002) If the specifications include guarantee 
period services, the contracting officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:

    (6)(i) The contractor shall at the time of contract award furnish 
the total cost of the guarantee period services in accordance with 
specification section(s) covering guarantee period services. The 
contractor shall submit, within 15 calendar days of receipt of the 
notice to proceed, a guarantee period performance program which shall 
include an itemized accounting of the number of work-hours required to 
perform the guarantee period service on each piece of equipment. The 
contractor shall also submit the established salary costs, including 
employee fringe benefits, and what the contractor reasonably expects to 
pay over the guarantee period, all of which will be subject to the 
contracting officer's approval.
    (ii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld, and the 
contracting officer shall inform the contractor of the unsatisfactory 
performance, allowing the contractor 10 days to correct deficiencies and 
comply with the contract. The guarantee period service is subject to 
those provisions as set forth in the Payments and Default clauses.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 797, Jan. 7, 1985; 
53 FR 1632, Jan. 21, 1988; 54 FR 40066, Sept. 29, 1989; 67 FR 49261, 
July 30, 2002]



852.236-83  Payments under fixed-price construction contracts (including NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that contain a section entitled ``Network Analysis System (NAS)'':

      Payments Under Fixed-Price Construction Contracts (JUL 2002)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
    (a) Retainage:
    (1) The contracting officer may retain funds:
    (i) Where performance under the contract has been determined to be 
deficient or the contractor has performed in an unsatisfactory manner in 
the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following:
    (i) Unsatisfactory progress as determined by the contracting 
officer;
    (ii) Failure either to meet schedules in Section Network Analysis 
System (NAS), or to process the Interim Arrow Diagram/Complete Project 
Arrow Diagram;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this subparagraph shall be construed as limiting 
the contracting officer's right to withhold funds under other provisions 
of the contract or in accordance with the general law and regulations 
regarding the administration of Government contracts.
    (b) The contractor shall submit a schedule of costs in accordance 
with the requirements of Section Network Analysis System (NAS) to the 
contracting officer for approval within 90 calendar days after date of 
receipt of notice to proceed. The approved cost schedule will be one of 
the bases for determining progress payments to the contractor for work 
completed.
    (1) Costs as shown on this schedule must be true costs and, should 
the resident engineer so desire, he/she may require the contractor to 
submit his/her original estimate sheets or other information to 
substantiate the detailed makeup of the cost schedule.

[[Page 244]]

    (2) The total costs of all activities shall equal the contract 
price.
    (3) Insurance and similar items shall be prorated and included in 
each activity cost of the critical path method (CPM) network.
    (4) The CPM network shall include a separate cost loaded activity 
for adjusting and testing of the systems listed below. The percentages 
listed below will be used to determine the cost of adjust and test 
activities and identify, for payment purposes, the value of the work to 
adjust, correct and test systems after the material has been installed.
    (5) Payment for adjust and test activities will be made only after 
the contractor has demonstrated that each of the systems is 
substantially complete and operates as required by the contract.

           Values of Adjusting Correcting, and Testing System
------------------------------------------------------------------------
                            System                              Percent
------------------------------------------------------------------------
Pneumatic tube system........................................         10
Incinerators (medical waste and trash).......................          5
Sewage treatment plant equipment.............................          5
Water treatment plant equipment..............................          5
Washers (dish, cage, glass, etc.)............................          5
Sterilizing equipment........................................          5
Water distilling equipment...................................          5
Prefab temperature rooms (cold, constant temperature)........          5
Entire air-conditioning system (Specified under 600 Sections)          5
Entire boiler plant system (specified under 700 Sections)....          5
General supply conveyors.....................................         10
Food service conveyors.......................................         10
Pneumatic soiled linen and trash system......................         10
Elevators and dumbwaiters....................................         10
Materials transport system...................................         10
Engine-generator system......................................          5
Primary switchgear...........................................          5
Secondary switchgear.........................................          5
Fire alarm system............................................          5
Nurse call system............................................          5
Intercom system..............................................          5
Radio system.................................................          5
TV (entertainment) system....................................          5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the contractor in preparing the bid and will not be 
binding as pertaining to any contract changes.
    (d) The contracting officer will consider for monthly progress 
payments material and/or equipment procured by the contractor and stored 
on the construction site as space is available, or at a local approved 
location off the site, under such terms and conditions as such officer 
approves, including but not limited to the following:
    (1) The material or equipment is in accordance with the contract 
requirements and/or approved samples and shop drawings.
    (2) Only those materials and/or equipment as are approved by the 
resident engineer for storage will be included.
    (3) Such materials and/or equipment will be stored separately and 
will be readily available for inspection and inventory by the resident 
engineer.
    (4) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (5) All of the other terms, provisions, conditions and covenants 
contained in the contract shall be and remain in full force and effect 
as therein provided.
    (6) A supplemental agreement will be executed between the Government 
and the contractor with the consent of the contractor's surety for off-
site storage.
    (e) The contractor, prior to receiving a progress or final payment 
under this contract, shall submit to the contracting officer a 
certification that the contractor has made payment from proceeds of 
prior payments, or that timely payment will be made from the proceeds of 
the progress or final payment then due, to subcontractors and suppliers 
in accordance with the contractual arrangements with them.
    (f) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other things required by 
this contract, have been submitted to the satisfaction of the 
contracting officer.

                             (End of clause)

    Alternate I (Jul 2002) If the specifications include guarantee 
period services, the contracting officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:

    (6)(i) The contractor shall show on the critical path method (CPM) 
network the total cost of the guarantee period services in accordance 
with the guarantee period service section(s) of the specifications. This 
cost shall be priced out when submitting the CPM cost loaded network. 
The cost submitted shall be subject to the approval of the contracting 
officer. The activity on the CPM shall have money only and not activity 
time.
    (ii) The contractor shall submit with the CPM a guarantee period 
performance program which shall include an itemized accounting of the 
number of work-hours required to perform the guarantee period service on 
each piece of equipment. The contractor shall also submit the 
established salary costs, including employee fringe benefits, and what 
the contractor reasonably expects to pay over the guarantee period, all 
of

[[Page 245]]

which will be subject to the contracting officer's approval.
    (iii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and the 
contracting officer shall inform the contractor of the unsatisfactory 
performance, allowing the contractor 10 days to correct and comply with 
the contract. The guarantee period service is subject to those 
provisions as set forth in the Payments and Default clauses.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 797, Jan. 7, 1985; 
53 FR 1632, Jan. 21, 1988; 54 FR 40066, Sept. 29, 1989; 61 FR 11587, 
Mar. 21, 1996; 67 FR 49262, July 30, 2002]



852.236-84  Schedule of work progress.

    As prescribed in 836.575, insert the following clause:

                  Schedule of Work Progress (NOV 1984)

    (a) The contractor shall submit with the schedule of costs, a 
progress schedule that indicates the anticipated installation of work 
versus the elapsed contract time, for the approval of the contracting 
officer. The progress schedule time shall be represented in the form of 
a bar graph with the contract time plotted along the horizontal axis. 
The starting date of the schedule shall be the date the contractor 
receives the ``Notice to Proceed.'' The ending date shall be the 
original contract completion date. At a minimum, both dates shall be 
indicated on the progress schedule. The specific item of work, i.e., 
``Excavation'', ``Floor Tile'', ``Finish Carpentry'', etc., should be 
plotted along the vertical axis and indicated by a line or bar at which 
time(s) during the contract this work is scheduled to take place. The 
schedule shall be submitted in triplicate and signed by the contractor.
    (b) The actual percent completion will be based on the value of 
installed work divided by the current contract amount. The actual 
completion percentage will be indicated on the monthly progress report.
    (c) The progress schedule will be revised when individual or 
cumulative time extensions of 15 calendar days or more are granted for 
any reason. The revised schedule should indicate the new contract 
completion date and should reflect any changes to the installation 
time(s) of the items of work affected.
    (d) The revised progress schedule will be used for reporting future 
scheduled percentage completion.

                             (End of clause)

[50 FR 794, 797, Jan. 7, 1985, as amended at 53 FR 1632, Jan. 21, 1988; 
67 FR 49262, July 30, 2002]



852.236-85  Supplementary labor standards provisions.

    As prescribed in 836.576, insert the following clause:

           Supplementary Labor Standards Provisions (APR 1984)

    (a) The wage determination decision of the Secretary of Labor is set 
forth in section GR, General Requirements, of this contract. It is the 
result of a study of wage conditions in the locality and establishes the 
minimum hourly rates of wages and fringe benefits for the described 
classes of labor in accordance with applicable law. No increase in the 
contract price will be allowed or authorized because of payment of wage 
rates in excess of those listed.
    (b) The contractor shall submit the required copies of payrolls to 
the contracting officer through the resident engineer or engineer 
officer, when acting in that capacity. Department of Labor Form WH-347, 
Payroll, available from the Superintendent of Documents, Government 
Printing Office, Washington, DC 20402, may be used for this purpose. If, 
however, the contractor or subcontractor elects to use an individually 
composed payroll form, it shall contain the same information shown on 
Form WH-347, and in addition be accompanied by Department of Labor Form 
WH-348, Statement of Compliance, or any other form containing the exact 
wording of this form.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49262, July 30, 2002]



852.236-86  Worker's compensation.

    As prescribed in 836.577, insert the following clause:

                    Worker's Compensation (JUL 2002)

    The Act of June 25, 1936, 49 Stat. 1938 (40 U.S.C. 290) authorizes 
the constituted authority of States to apply their worker's compensation 
laws to all lands and premises owned or held by the United States.

                             (End of clause)

[67 FR 49262, July 30, 2002]

[[Page 246]]



852.236-87  Accident prevention.

    As prescribed in 836.513, insert the following clause:

                     Accident Prevention (SEP 1993)

    The Resident Engineer on all assigned construction projects, or 
other Department of Veterans Affairs employee if designated in writing 
by the Contracting Officer, shall serve as Safety Officer and as such 
has authority, on behalf of the Contracting Officer, to monitor and 
enforce Contractor compliance with FAR 52.236-13, Accident Prevention. 
However, only the Contracting Officer may issue an order to stop all or 
part of the work while requiring satisfactory or corrective action to be 
taken by the Contractor.

                             (End of clause)

[58 FR 48974, Sept. 21, 1993]



852.236-88  Contract changes--supplement.

    As prescribed in 836.578, insert the following clause:

                 Contract Changes--Supplement (JUL 2002)

    The clauses entitled ``Changes'' in FAR 52.243-4 and ``Differing 
Site Conditions'' in FAR 52.236-2 are supplemented as follows:
    (a) Paragraphs (a)(1) through (a)(4) apply to proposed contract 
changes costing over $500,000:
    (1) When requested by the contracting officer, the contractor shall 
submit proposals for changes in work to the resident engineer. 
Proposals, to be submitted as expeditiously as possible but within 30 
calendar days after receipt of request, shall be in legible form, 
original and two copies, with an itemized breakdown that will include 
material, quantities, unit prices, labor costs (separated into trades), 
construction equipment, etc. (Labor costs are to be identified with 
specific material placed or operation performed.) The contractor must 
obtain and furnish with a proposal an itemized breakdown as described 
above, signed by each subcontractor participating in the change 
regardless of tier. When certified cost or pricing data are required 
under FAR Subpart 15.403, the cost or pricing data shall be submitted in 
accordance with FAR 15.403-5.
    (2) When the necessity to proceed with a change does not allow 
sufficient time to negotiate a modification or because of failure to 
reach an agreement, the contracting officer may issue a change order 
instructing the contractor to proceed on the basis of a tentative price 
based on the best estimate available at the time, with the firm price to 
be determined later. Furthermore, when the change order is issued, the 
contractor shall submit a proposal, which includes the information 
required by paragraph (a)(1), for cost of changes in work within 30 
calendar days.
    (3) The contracting officer will consider issuing a settlement by 
determination to the contract if the contractor's proposal required by 
paragraphs (a) and (b) of this clause is not received within 30 calendar 
days or if agreement has not been reached.
    (4) Bond premium adjustment, consequent upon changes ordered, will 
be made as elsewhere specified at the time of final settlement under the 
contract and will not be included in the individual change.
    (b) Paragraphs (b)(1) through (b)(11) apply to proposed contract 
changes costing $500,000 or less:
    (1) When requested by the contracting officer, the contractor shall 
submit proposals for changes in work to the resident engineer. 
Proposals, to be submitted as expeditiously as possible but within 30 
calendar days after receipt of request, shall be in legible form, 
original and two copies, with an itemized breakdown that will include 
material, quantities, unit prices, labor costs (separated into trades), 
construction equipment, etc. (Labor costs are to be identified with 
specific material placed or operation performed.) The contractor must 
obtain and furnish with a proposal an intemized breakdown as described 
above, signed by each subcontractor participating in the change 
regardless of tier. When certified cost or pricing data or information 
other than cost or pricing data are required under FAR 15.403, the data 
shall be submitted in accordance with FAR 15.403-5. No itemized 
breakdown will be required for proposals amounting to less than $1,000.
    (2) When the necessity to proceed with a change does not allow 
sufficient time to negotiate a modification or because of failure to 
reach an agreement, the contracting officer may issue a change order 
instructing the contractor to proceed on the basis of a tentative price 
based on the best estimate available at the time, with the firm price to 
be determined later. Furthermore, when the change order is issued, the 
contractor shall submit with 30 calendar days a proposal, which includes 
the information required by paragraph (b)(1), for the cost of the 
changes in work.
    (3) The contracting officer will consider issuing a settlement by 
determination to the contract if the contractor's proposal required by 
paragraphs (a) and (b) of this clause is not received within 30 calendar 
days or if agreement has not been reached.
    (4) Allowances not to exceed 10 percent each for overhead and profit 
for the party performing the work will be based on the value of labor, 
material, and use of construction equipment required to accomplish the 
change. As the value of the change increases, a declining scale will be 
used in negotiating the percentage of overhead and profit. Allowable 
percentages on changes will not exceed

[[Page 247]]

the following: 10 percent overhead and 10 percent profit on the first 
$20,000; 7\1/2\ percent overhead and 7\1/2\ percent profit on the next 
$30,000; 5 percent overhead and 5 percent profit on balance over 
$50,000. Profit shall be computed by multiplying the profit percentage 
by the sum of the direct costs and computed overhead costs.
    (5) The prime contractor's or upper-tier subcontractor's fee on work 
performed by lower-tier subcontractors will be based on the net 
increased cost to the prime contractor or upper-tier subcontractor, as 
applicable. Allowable fee on changes will not exceed the following: 10 
percent fee on the first $20,000; 7\1/2\ percent fee on the next 
$30,000; and 5 percent fee on balance over $50,000.
    (6) Not more than four percentages, none of which exceed the 
percentages shown above, will be allowed regardless of the number of 
tiers of subcontractors.
    (7) Where the contractor's or subcontractors' portion of a change 
involves credit items, such items must be deducted prior to adding 
overhead and profit for the party performing the work. The contractor's 
fee is limited to the net increase to contractor of subcontractors' 
portions cost computed in accordance herewith.
    (8) Where a change involves credit items only, a proper measure of 
the amount of downward adjustment in the contract price is the 
reasonable cost to the contractor if he/she had performed the deleted 
work. A reasonable allowance for overhead and profit are properly 
includable as part of the downward adjustment for a deductive change. 
The amount of such allowance is subject to negotiation.
    (9) Cost of Federal Old Age Benefit (Social Security) tax and of 
Worker's Compensation and Public Liability insurance appertaining to 
changes are allowable. While no percentage will be allowed thereon for 
overhead or profit, prime contractor's fee will be allowed on such items 
in subcontractor's proposals.
    (10) Overhead and contractor's fee percentages shall be considered 
to include insurance other than mentioned herein, field and office 
supervisors and assistants, security police, use of small tools, 
incidental job burdens, and general home office expenses and no separate 
allowance will be made therefor. Assistants to office supervisors 
include all clerical, stenographic and general office help. Incidental 
job burdens include, but are not necessarily limited to, office 
equipment and supplies, temporary toilets, telephone and conformance to 
OSHA requirements. Items such as, but not necessarily limited to, review 
and coordination, estimating and expediting relative to contract changes 
are associated with field and office supervision and are considered to 
be included in the contractor's overhead and/or fee percentage.
    (11) Bond premium adjustment, consequent upon changes ordered, will 
be made as elsewhere specified at the time of final settlement under the 
contract and will not be included in the individual change.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 797, Jan. 7, 1985; 
51 FR 23073, June 25, 1986; 52 FR 28559, 28561, July 31, 1987; 52 FR 
32013, Aug. 25, 1987; 52 FR 49017, Dec. 29, 1987; 53 FR 1632, Jan. 21, 
1988; 61 FR 11587, Mar. 21, 1996; 63 FR 69223, Dec. 16, 1998; 67 FR 
49262, July 30, 2002]



852.236-89  Buy American Act.

    As prescribed in 825.1102, insert the following clause:

                       Buy American Act (JUL 2002)

    (a) Reference is made to the clause entitled ``Buy American Act--
Balance of Payments Program--Construction Materials,'' FAR 52.225-9.
    (b) Notwithstanding a bidder's right to offer identifiable foreign 
construction material in its bid pursuant to FAR 52.225-9, VA does not 
anticipate accepting an offer that includes foreign construction 
material.
    (c) If a bidder chooses to submit a bid that includes foreign 
construction material, that bidder must provide a listing of the 
specific foreign construction material he/she intends to use and a price 
for said material. Bidders must include bid prices for comparable 
domestic construction material. If VA determines not to accept foreign 
construction material and no comparable domestic construction material 
is provided, the entire bid will be rejected.
    (d) Any foreign construction material proposed after award will be 
rejected unless the bidder proves to VA's satisfaction: (1) It was 
impossible to request the exemption prior to award, and (2) said 
domestic construction material is no longer available, or (3) where the 
price has escalated so dramatically after the contract has been awarded 
that it would be unconscionable to require performance at that price. 
The determinations required by (1), (2), and (3) of this paragraph shall 
be made in accordance with subpart 825.2 and FAR 25.2.
    (e) By signing this bid, the bidder declares that all articles, 
materials and supplies for use on the project shall be domestic unless 
specifically set forth on the Bid Form or addendum thereto.

                             (End of clause)

    Alternate I (JUL 2002) As prescribed in 825.1102(b), substitute the 
following paragraphs for paragraphs (a) and (b) of the basic clause:


[[Page 248]]


    (a) Reference is made to the clause entitled ``Buy American Act--
Balance of Payment Program--Construction Materials Under Trade 
Agreements,'' FAR 52.225-11.
    (b) The restrictions contained in this clause 852.236-89 are waived 
for Trade Agreements Act (TAA) designated country construction material, 
as defined in FAR 52.225-11. Notwithstanding a bidder's right to offer 
identifiable foreign construction material in its bid pursuant to FAR 
52.225-11, VA does not anticipate accepting an offer that includes 
foreign construction material, other than TAA designated country 
construction material.
    Alternate II (JUL 2002) As prescribed in 825.1102(c), substitute the 
following paragraphs for paragraphs (a) and (b) of the basic clause:

    (a) Reference is made to the clause entitled ``Buy American Act--
Balance of Payment Program--Construction Materials Under Trade 
Agreements,'' FAR 52.225-11.
    (b) The restrictions contained in this clause 852.236-89 are waived 
for Trade Agreements Act (TAA) designated country construction material 
and North American Free Trade Agreement (NAFTA) country construction 
material, as defined in FAR 52.225-11. Notwithstanding a bidder's right 
to offer identifiable foreign construction material in its bid pursuant 
to FAR 52.225-11, VA does not anticipate accepting an offer that 
includes foreign construction material, other than TAA designated 
country construction material or NAFTA country construction material.

[67 FR 49263, July 30, 2002]



852.236-90  Restriction on submission and use of equal products.

    As prescribed in 836.202(c), the following clause shall be included 
in the solicitation if it is determined that only one product will meet 
the Government's minimum needs and the Department of Veterans Affairs 
will not allow the submission of ``equal'' products:

     Restriction on Submission and Use of Equal Products (NOV 1986)

    This clause applies to the following items:

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

    Notwithstanding the ``Material and Workmanship'' clause of this 
contract, FAR 52.236-5(a), nor any other contractual provision, 
``equal'' products will not be considered by the Department of Veterans 
Affairs and may not be used.

                             (End of clause)

[52 FR 282, Jan. 5, 1987, as amended at 53 FR 7756, Mar. 10, 1988]



852.236-91  Special notes.

    As prescribed in 836.579, insert the following clause:

                        Special Notes (JUL 2002)

    (a) Signing of the bid shall be deemed to be a representation by the 
bidder that:
    (1) Bidder is a construction contractor who owns, operates, or 
maintains a place of business, regularly engaged in construction, 
alteration or repair of buildings, structures, communication facilities, 
or other engineering projects, including furnishing and installing of 
necessary equipment; or
    (2) If newly entering into a construction activity, bidder has made 
all necessary arrangements for personnel, construction equipment, and 
required licenses to perform construction work; and
    (3) Upon request, prior to award, bidder will promptly furnish to 
the Government a statement of facts in detail as to bidder's previous 
experience (including recent and current contracts), organization 
(including company officers), technical qualifications, financial 
resources and facilities available to perform the contemplated work.
    (b) Unless otherwise provided in this contract, where the use of 
optional materials or construction is permitted, the same standard of 
workmanship, fabrication and installation shall be required irrespective 
of which option is selected. The contractor shall make any change or 
adjustment in connecting work or otherwise necessitated by the use of 
such optional material or construction, without additional cost to the 
Government.
    (c) When approval is given for a system component having functional 
or physical characteristics different from those indicated or specified, 
it is the responsibility of the contractor to furnish and install 
related components with characteristics and capacities compatible with 
the approved substitute component as required for systems to function as 
noted on drawings and specifications. There shall be no additional cost 
to the Government.
    (d) In some instances it may have been impracticable to detail all 
items in specifications or on drawings because of variances in 
manufacturers' methods of achieving specified results. In such instances 
the contractor will be required to furnish all labor, materials, 
drawings, services and connections necessary to produce systems or 
equipment which are completely installed, functional, and ready for 
operation by facility personnel in accordance with their use.
    (e) Claims by the contractor for delay attributed to unusually 
severe weather must

[[Page 249]]

be supported by climatological data covering the period and the same 
period for the 10 preceding years. When the weather in question exceeds 
in intensity or frequency the 10 year average, the excess experienced 
shall be considered ``unusually severe.'' Comparison shall be on a 
monthly basis. Whether or not unusually severe weather in fact delays 
the work will depend upon the effect of weather on the branches of work 
being performed during the time under consideration.

                             (End of clause)

[53 FR 1632, Jan. 21, 1988, as amended at 61 FR 11587, Mar. 21, 1996; 67 
FR 49263, July 30, 2002]



852.237-7   Indemnification and Medical Liability Insurance.

    As prescribed in 837.403, insert the following clause:

       Indemnification and Medical Liability Insurance (OCT 1996)

    (a) It is expressly agreed and understood that this is a nonpersonal 
services contract, as defined in Federal Acquisition Regulation (FAR) 
37.101, under which the professional services rendered by the Contractor 
or its health-care providers are rendered in its capacity as an 
independent contractor. The Government may evaluate the quality of 
professional and administrative services provided but retains no control 
over professional aspects of the services rendered, including by 
example, the Contractor's or its health-care providers' professional 
medical judgment, diagnosis, or specific medical treatments. The 
Contractor and its health-care providers shall be liable for their 
liability-producing acts or omissions. The Contractor shall maintain or 
require all health-care providers performing under this contract to 
maintain, during the term of this contract, professional liability 
insurance issued by a responsible insurance carrier of not less than the 
following amount(s) per specialty per occurrence: [Contracting Officer 
insert the dollar value(s) of standard coverage(s) prevailing within the 
local community as to the specific medical specialty, or specialties, 
concerned, or such higher amount as the Contracting Officer deems 
necessary to protect the Government's interests]. However, if the 
Contractor is an entity or a subdivision of a State that either provides 
for self-insurance or limits the liability or the amount of insurance 
purchased by State entities, then the insurance requirement of this 
contract shall be fulfilled by incorporating the provisions of the 
applicable State law.
    (b) An apparently successful offeror, upon request of the 
Contracting Officer, shall, prior to contract award, furnish evidence of 
the insurability of the offeror and/or of all health-care providers who 
will perform under this contract. The submission shall provide evidence 
of insurability concerning the medical liability insurance required by 
paragraph (a) of this clause or the provisions of State law as to self-
insurance, or limitations on liability or insurance.
    (c) The Contractor shall, prior to commencement of services under 
the contract, provide to the Contracting Officer Certificates of 
Insurance or insurance policies evidencing the required insurance 
coverage and an endorsement stating that any cancellation or material 
change adversely affecting the Government's interest shall not be 
effective until 30 days after the insurer or the Contractor gives 
written notice to the Contracting Officer. Certificates or policies 
shall be provided for the Contractor and/or each health-care provider 
who will perform under this contract.
    (d) The Contractor shall notify the Contracting Officer if it, or 
any of the health- care providers performing under this contract, change 
insurance providers during the performance period of this contract. The 
notification shall provide evidence that the Contractor and/or health-
care providers will meet all the requirements of this clause, including 
those concerning liability insurance and endorsements. These 
requirements may be met either under the new policy, or a combination of 
old and new policies, if applicable.
    (e) The Contractor shall insert the substance of this clause, 
including this paragraph (e), in all subcontracts for health-care 
services under this contract. The Contractor shall be responsible for 
compliance by any subcontractor or lower-tier subcontractor with the 
provisions set forth in paragraph (a) of this clause.

                             (End of clause)

[61 FR 52710, Oct. 8, 1996]



852.237-70  Contractor responsibilities.

    (a) Fixed-Price negotiated or advertised service contracts, other 
than automobile, ambulance and aircraft services, will include the 
following clause:

                 Contractor Responsibilities (APR 1984)

    The contractor shall obtain all necessary licenses and/or permits 
required to perform this work. He/she shall take all reasonable 
precautions necessary to protect persons and property from injury or 
damage during the performance of this contract. He/she shall be 
responsible for any injury to himself/herself, his/her employees, as 
well as for any damage to personal or public property that occurs

[[Page 250]]

during the performance of this contract that is caused by his/her 
employee's fault or negligence, and shall maintain personal liability 
and property damage insurance having coverage for a limit as required by 
the laws of the State of ------. Further, it is agreed that any 
negligence of the Government, its officers, agents, servants and 
employees, shall not be the responsibility of the contractor hereunder 
with the regard to any claims, loss, damage, injury and liability 
resulting therefrom.

                             (End of clause)

    (b) Automobile, ambulance and aircraft service contracts will 
utilize the clause prescribed in 852.237-71.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.237-71  Indemnification and insurance (vehicle and aircraft service 
contracts).

    (a) Contracts for vehicle and aircraft services will utilize the 
following clause as provided in 828.306.

                Indemnification and Insurance (APR 1984)

    (a) Indemnification. The contractor expressly agrees to indemnify 
and save the Government, its officers, agents, servants, and employees 
harmless from and against any and all claims, loss, damage, injury, and 
liability, however caused, resulting from, arising out of, or in any way 
connected with the performance of work under this agreement. Further, it 
is agreed that any negligence or alleged negligence of the Government, 
its offficers, agents, servants, and employees, shall not be a bar to a 
claim for indemnification unless the act or omission of the Government, 
its officers, agents, servants, and employees is the sole, competent, 
and producing cause of such claims, loss, damage, injury, and liability. 
At the option of the contractor, and subject to the approval by the 
contracting officer of the sources, insurance coverage may be employed 
as guaranty of indemnification.
    (b) Insurance. Satisfactory insurance coverage is a condition 
precedent to award of a contract. In general, a successful bidder must 
present safisfactory evidence of full compliance with State and local 
requirements, or those below stipulated, whichever are the greater. More 
specifically, workman's compensation and employer's liability coverage 
will conform to applicable State law requirements for the service 
contemplated, whereas general liability and automobile liability of 
comprehensive type, shall in the absence of higher statutory minimums, 
be required in the amounts per vehicle used of not less than $200,000 
per person and $500,000 per occurrence for bodily injury and $20,000 per 
occurrence for property damage. State approved sources of insurance 
coverage ordinarily will be deemed acceptable to the Veterans' 
Administration installation, subject to timely certifications by such 
sources of the types and limits of the coverages afforded by the sources 
to the bidder. (In those instances where airplane service is to be used, 
substitute the word ``aircraft'' for ``automobile'' and ``vehicle'' and 
modify coverage to require aircraft public and passenger liability 
insurance of at least $200,000 per passenger and $500,000 per occurrence 
for bodily injury, other than passenger liability, and $200,000 per 
occurrence for property damage. Coverage for passenger liability bodily 
injury shall be at least $200,000 multiplied by the number of seats or 
passengers, whichever is greater.)

                             (End of clause)

    (b) Exceptions. The provisions of this 852.237-71 do not apply to 
emergency or sporadic ambulance service authorized by VA Manual MP-1, 
Part II, Chapter 3: Provided, That such service is not used solely for 
the purpose of avoiding entering into a continuing contract. Provided 
further, That such services will be obtained from firms known to carry 
insurance coverage in accordance with State or local requirements.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.246-1  Special warranties.

    As prescribed in 846.710-70, insert the following clause:

                      Special Warranties (JUL 2002)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-21 is 
supplemented as follows:
    Any special warranties that may be required under the contract shall 
be subject to the elections set forth in the FAR clause at 52.246-21, 
Warranty of Construction, unless otherwise provided for in such special 
warranties.

[67 FR 49263, July 30, 2002]



852.246-2  Warranty for construction--guarantee period services.

    As prescribed in 846.710-71, insert the following clause:

     Warranty for Construction--Guarantee Period Services (JUL 2002)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-21 is 
supplemented as follows:

[[Page 251]]

    Should the contractor fail to prosecute the work or fail to proceed 
promptly to provide guarantee period services after notification by the 
contracting officer, the Government may, subject to the default clause 
contained at FAR Section 52.249-10, Default (Fixed-Price Construction), 
and after allowing the contractor 10 days to correct and comply with the 
contract, terminate the right to proceed with the work (or the separable 
part of the work) that has been delayed or unsatisfactorily performed. 
In this event, the Government may take over the work and complete it by 
contract or otherwise, and may take possession of and use any materials, 
appliance, and plant on the work site necessary for completing the work. 
The contractor and its sureties shall be liable for any damages to the 
Government resulting from the contractor's refusal or failure to 
complete the work within this specified time, whether or not the 
contractor's right to proceed with the work is terminated. This 
liability includes any increased costs incurred by the Government in 
completing the work.

                             (End of clause)

[67 FR 49261, July 30, 2002]



852.247-70  Transportation provision for bid evaluation.

    In circumstance enunciated in 847.305-70, the following provision 
will be inserted in the IFB:

     Determining Transportation Costs for Bid Evaluation (APR 1984)

    For the purpose of evaluating bids and for no other purpose, the 
delivered price per unit will be determined by adding the nationwide 
average transportation charge to the f.o.b. origin bid prices. The 
nationwide average transportation charge will be determined by applying 
the following formula: Multiply the guaranteed shipping weight by the 
freight, parcel post, or express rate, whichever is proper, to each 
destination shown below and then multiply the resulting transportation 
charges by the anticipated demand factor shown for each destination. 
Total the resulting weighted transportation charges for all destinations 
and divide the total by 20 to give the nationwide average transportation 
charge.

                           Anticipated Demand
Area destination:                                                 Factor
  Oakland, California.........................................         3
  Dallas, Texas...............................................         2
  Omaha, Nebraska.............................................         3
  Fort Wayne, Indiana.........................................         4
  Atlanta, Georgia............................................         3
  New York, New York..........................................         5
                                                               ---------
    Total of factors..........................................        20
 

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 798, Jan. 7, 1985; 
63 FR 69223, Dec. 16, 1998]



852.252-1  Provisions or clauses requiring completion by the offeror or 
prospective contractor.

    As prescribed in 852.102(a), insert the following provision:

    Provisions or Clauses That Require Completion by the Offeror or 
                    Prospective Contractor (DEC 1999)

    The following provisions or clauses incorporated by reference in 
this solicitation must be completed by the offeror or prospective 
contractor and submitted with the quotation or offer. Copies of these 
provisions or clauses are available on the Internet at the web sites 
provided in the provision at FAR 52.252-1, Solicitation Provisions 
Incorporated by Reference, or the clause at FAR 52.252-2, Clauses 
Incorporated by Reference. Copies may also be obtained from the 
contracting officer.
    [Contracting officer shall list all FAR and 48 CFR Chapter 8 (VAAR) 
provisions and clauses incorporated by reference that must be completed 
by the offeror or prospective contractor and submitted with the 
quotation or offer.]

                           (End of provision)

[64 FR 69935, Dec. 15, 1999]



852.270-1  Representatives of contracting officers.

    Whenever it is considered necessary to designate a representative 
under 801.603-70, the following provision will be made a part of the 
request for proposal or invitation to bid:

           Representatives of Contracting Officers (APR 1984)

    The contracting officer reserves the right to designate 
representatives to act for him/her in furnishing technical guidance and 
advice or generally supervise the work to be performed under this 
contract. Such designation will be in writing and will define the scope 
and limitations of the designee's authority. A copy of the designation 
shall be furnished the contractor.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 798, Jan. 7, 1985]

[[Page 252]]



852.270-2  Bread and bakery products.

    The following clause will be inserted in all contracts for bread and 
bakery products:

                          Quantities (APR 1984)

    The bidder agrees to furnish up to 25 percent more or 25 percent 
less than the quantities awarded when ordered by the Department of 
Veterans Affairs.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



 852.270-3  Purchase of shellfish.

    Invitations for bids or requests for proposals covering oysters, 
clams or mussels, fresh or frozen, will contain the following clause:

                          Shellfish (APR 1984)

    The bidder certifies that oysters, clams, and mussels will be 
furnished only from plants approved by and operated under the 
supervision of shell fish authorities of States whose certifications are 
endorsed currently by the U.S. Public Health Service, and the names and 
certificate numbers of those shell fish dealers must appear on current 
lists published by the U.S. Public Health Service. These items shall be 
packed and delivered in approved containers, sealed in such manner that 
tampering is easily discernible, and marked with packer's certificate 
number impressed or embossed on the side of such containers and preceded 
by the State abbreviation. Containers shall be tagged or labeled to show 
the name and address of the approved producer or shipper, the name of 
the State of origin, and the certificate number of the approved producer 
or shipper.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 798, Jan. 7, 1985]



 852.270-4  Commercial advertising.

    All VA contracts will include the following clause:

                    Commercial Advertising (NOV 1984)

    The bidder or offeror agrees that if a contract is awarded to him/
her, as a result of this solicitation, he/she will not advertise the 
award of the contract in his/her commercial advertising in such a manner 
as to state or imply that the Department of Veterans Affairs endorses a 
product, project or commercial line of endeavor.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 798, Jan. 7, 1985]



 852.271-70  Services provided eligible beneficiaries.

    The following clause will be included in all contracts covering 
services provided to eligible beneficiaries:

     Nondiscrimination in Services Provided Beneficiaries (APR 1984)

    The contractor agrees to provide all services specified in this 
contract for any person determined eligible by the Under Secretary for 
Health, or designee, regardless of the race, color, religion, sex, or 
national origin of the person for whom such services are ordered. The 
contractor further warrants that he/she will not resort to 
subcontracting as a means of circumventing this provision.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 17339, Apr. 9, 1998]



 852.271-71  Visits to Department of Veterans Affairs guidance centers.

    The following clause will be included in contracts entered into for 
services relating to vocational counseling:

                          Inspection (APR 1984)

    Any duly authorized representative of the Department of Veterans 
Affairs shall at all reasonable times be permitted to inspect the 
counseling and testing operations being performed under this contract 
and the records of these operations.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



 852.271-72  Time spent by counselee in counseling process.

    Insert the following clause in contracts entered into for services 
relating to vocational counseling:

        Time Spent by Counselee in Counseling Process (APR 1984)

    The contractor agrees that no counselee referred under the 
provisions of this agreement will be required to give any extra time in 
connection with the counseling process to supply test results or other 
information for purposes other than those specified in this contract.

[[Page 253]]

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.271-73  Use and publication of counseling results.

    Insert the following clause in contracts entered into for services 
relating to vocational counseling:

                      Publishing Results (APR 1984)

    The contractor agrees that none of the information or data gathered 
in connection with the services specified in this contract or studies or 
materials based thereon or relating thereto will be publicized without 
the prior approval of the Under Secretary for Benefits or his/her 
designee.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69223, Dec. 16, 1998]



852.271-74  Inspection.

    Insert the following clause in contracts entered into with 
educational institutions and training establishments for education and 
rehabilitation:

                          Inspection (APR 1984)

    The contractor will permit the duly authorized representative of the 
Department of Veterans Affairs to visit the place of instruction as may 
be necessary and examine the training facilities and work of the 
veterans in training under this contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.271-75  Extension of contract period.

    The following clause will be included in contracts where appropriate 
pertaining to services for education and rehabilitation:

                 Extension of Contract Period (APR 1984)

    This contract may be extended from year to year if agreeable to both 
parties provided the agreement for extension is consummated 30 days 
prior to the expiration date, and further provided that there is no 
change in the provisions, terms, conditions, or rate of payment. Any 
extension made hereunder is subject to the availability of funds during 
the period covered by the extension.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



852.273-70  Late offers.

    As prescribed in 873.110(a), insert the following provision:

                         Late Offers (JAN 2003)

    This provision replaces paragraph (f) of FAR provision 52.212-1. 
Offers or modifications of offers received after the time set forth in a 
request for quotations or request for proposals may be considered, at 
the discretion of the contracting officer, if determined to be in the 
best interest of the Government. Late bids submitted in response to an 
invitation for bid (IFB) will not be considered.

                           (End of provision)

[68 FR 3469, Jan. 24, 2003]



852.273-71  Alternative negotiation techniques.

    As prescribed in 873.110(b), insert the following provision:

              Alternative Negotiation Techniques (JAN 2003)

    The contracting officer may elect to use the alternative negotiation 
techniques described in section 873.111(e) of 48 Code of Federal 
Regulations Chapter 8 in conducting this procurement. If used, offerors 
may respond by maintaining offers as originally submitted, revising 
offers, or submitting an alternative offer. The Government may consider 
initial offers unless revised or withdrawn, revised offers, and 
alternative offers in making the award. Revising an offer does not 
guarantee an offeror an award.

                           (End of provision)

[68 FR 3469, Jan. 24, 2003]



852.273-72  Alternative evaluation.

    As prescribed in 873.110(c), insert the following provision:

                    Alternative Evaluation (JAN 2003)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror submitting the lowest priced 
offer that conforms to the solicitation. During the specified period for 
receipt of offers, the amount of the lowest offer will be posted and may 
be viewed by--[Contracting officer insert description of how the 
information may be viewed electronically or

[[Page 254]]

otherwise]--. Offerors may revise offers anytime during the specified 
period. At the end of the specified time period for receipt of offers, 
the responsible offeror submitting the lowest priced offer will be in 
line for award.
    (b) Except when it is determined not to be in the Government's best 
interest, the Government will evaluate offers for award purposes by 
adding the total price for all options to the total price for the basic 
requirement. The Government may determine that an offer is unacceptable 
if the option prices are materially unbalanced. Evaluation of options 
shall not obligate the Government to exercise the option(s).

                           (End of provision)

[68 FR 3469, Jan. 24, 2003]



852.273-73  Evaluation--health-care resources.

    As prescribed in 873.110(d), in lieu of FAR provision 52.212-2, the 
contracting officer may insert a provision substantially as follows:

              Evaluation--Health-Care Resources (JAN 2003)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror whose offer, conforming to the 
solicitation, will be most advantageous to the Government, price and 
other factors considered. The following information or factors shall be 
used to evaluate offers: --[Contracting officer insert evaluation 
information or factors, such as technical capability to meet the 
Government's requirements, past performance, or such other evaluation 
information or factors as the contracting officer deems necessary to 
evaluate offers. Price must be evaluated in every acquisition. The 
contracting officer may include the evaluation information or factors in 
their relative order of importance, such as in descending order of 
importance. The relative importance of any evaluation information must 
be stated in the solicitation.]--
    (b) Except when it is determined not to be in the Government's best 
interest, the Government will evaluate offers for award purposes by 
adding the total price for all options to the total price for the basic 
requirement. The Government may determine that an offer is unacceptable 
if the option prices are materially unbalanced. Evaluation of options 
shall not obligate the Government to exercise the option(s).
    (c) If this solicitation is a request for proposals (RFP), a written 
notice of award or acceptance of an offer, mailed or otherwise furnished 
to the successful offeror within the time for acceptance specified in 
the offer, shall result in a binding contract without further action by 
either party. Before the offer's specified expiration time, the 
Government may accept an offer (or part of an offer), whether or not 
there are negotiations after its receipt, unless a written notice of 
withdrawal is received before award.

                           (End of provision)

[68 FR 3469, Jan. 24, 2003]



852.273-74  Award without exchanges.

    As prescribed in 873.110(e), insert the following provision:

                   Award Without Exchanges (JAN 2003)

    The Government intends to evaluate proposals and award a contract 
without exchanges with offerors. Therefore, each initial offer should 
contain the offeror's best terms from a cost or price and technical 
standpoint. However, the Government reserves the right to conduct 
exchanges if later determined by the contracting officer to be 
necessary.

                           (End of provision)

[68 FR 3469, Jan. 24, 2003]



PART 853_FORMS--Table of Contents




Sec.
853.000 Scope of part.

                          Subpart 853.1_General

853.107 Obtaining forms.

                   Subpart 853.2_Prescription of Forms

853.201 Federal acquisition system.
853.201-1 Contracting authority and responsibilities (SF 1402).
853.213 Simplified acquisition procedures.
853.215 Contracting by negotiation (VA Form 10-1170).
853.236 Construction and architect-engineer contracts.
853.236-1 [Reserved]
853.236-2 Architect-engineer services (VA Form 08-6298).
853.271 Loan Guaranty, Education, and Vocational Rehabilitation and 
          Counseling Programs.
853.271-1 Loan Guaranty Program (VA Forms 26-6724 and 26-1839).
853.271-2 Vocational Rehabilitation and Counseling Programs (VA Forms 
          22-1903, 22-1905, and 22-1931).
853.271-3 Education Programs (VA Forms 22-1982, 22-1982e, 22-1982c, and 
          22-7398).

                   Subpart 853.3_Illustration of Forms

853.300 Scope of subpart.


[[Page 255]]


    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12639, Mar. 29, 1984, unless otherwise noted.



853.000  Scope of part.

    This part prescribes Department of Veterans Affairs forms for use in 
the acquisition of goods and services. It only identifies forms which 
are used between VA and its contractors or the general public. It does 
not identify forms for uses internal to VA or between VA and another 
Federal agency.

[49 FR 12639, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989]



                          Subpart 853.1_General



853.107  Obtaining forms.

    VA forms may be obtained from any VA contracting office or by 
requesting such forms from the Deputy Assistant Secretary for 
Acquisition and Materiel Management (97), Department of Veterans 
Affairs, 810 Vermont Avenue NW., Washington, DC 20420.

[49 FR 12639, Mar. 29, 1984; 50 FR 798, Jan. 7, 1985; 54 FR 40066, Sept. 
29, 1989; 63 FR 69223, Dec. 16, 1998]



                   Subpart 853.2_Prescription of Forms



853.201  Federal acquisition system.



853.201-1  Contracting authority and responsibilities (SF 1402).

    Current delegations of contracting authority appointed with VA Form 
90-2267, Certificate of Designation (contracting officer), will remain 
in effect until replaced with an executed SF 1402, Certificate of 
Appointment, in accordance with 801.603-3.



853.213  Simplified acquisition procedures.

    The following forms are prescribed as stated in this section for use 
in simplified acquisition procedures, orders under existing contracts or 
agreements, orders from required sources of supplies and services, and 
orders for other supplies or services:
    (a) VA Forms 90-2138, Order for Supplies or Services, or 90-2138-
ADP, Purchase Order for Supplies or Services, shall be used as stated in 
813.307. They will be used in lieu of Optional Form 347, Order for 
Supplies and Services, or Standard Form 1449, Solicitation/Contract/
Order for Commercial Items.
    (b) The following forms are for use for obtaining indicated medical 
and dental services within the limitations prescribed in 813.307:
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record, Authorization and Invoice for 
Outpatient Services.
    (c) VA Form 10-2511, Authority and Invoice for Travel by Ambulance 
or Other Hired Vehicle, will be used as prescribed in 813.307.
    (d) VA Form 10-2421, Prosthetics Authorization and Invoice, will be 
used for indicated procurements not in excess of $300 as prescribed in 
813.307.

[64 FR 69935, Dec. 15, 1999]



853.215  Contracting by negotiation (VA Form 10-1170).

    VA Form 10-1170, Application for Furnishing Nursing Home Care to 
Beneficiaries of the Department of Veterans Affairs, will be utilized 
for establishing contract nursing home care for VA beneficiaries.



853.236  Construction and architect-engineer contracts.



853.236-1  [Reserved]



853.236-2  Architect-engineer services (VA Form 08-6298).

    VA Form 08-6298, Architect-Engineer Fee Proposal, will be used as 
prescribed in 836.606-71.



853.271  Loan Guaranty, Education, and Vocational Rehabilitation and 
Counseling Programs.



853.271-1  Loan Guaranty Program (VA Forms 26-6724 and 26-1839).

    (a) VA Form 26-6724, Invitation, Bid, and/or Acceptance or 
Authorization, will be used in obtaining services specified in subpart 
871.1.
    (b) VA Form 26-1839, Compliance Inspection Report, will be used for 
inspection of repairs for properties under

[[Page 256]]

the Loan Guaranty Program as specified in 846.472.



853.271-2  Vocational Rehabilitation and Counseling Programs (VA Forms 
22-1903, 22-1905, and 22-1931).

    The following forms will be used in acquiring education or 
rehabilitation services as prescribed in subpart 871.2:
    (a) VA Form 22-1903, Contract for Education and Training.
    (b) VA Form 22-1905, Authorization and Certification of Entrance or 
Reentrance into Training and Certification of Trainee Status.
    (c) VA Form 22-1931, Contract for Services Relating to Vocational 
Counseling.



853.271-3  Education Programs (VA Forms 22-1982, 22-1982e, 22-1982c, and 
22-7398).

    The following forms are prescribed for use in obtaining services for 
the Veterans Benefits Administration Education programs:
    (a) VA Form 22-1982, State Approving Agency (SAA) Reimbursement 
Contract.
    (b) VA Form 22-1982e, Schedule No. 1 to the SAA Reimbursement 
Contract; Accredited and Non-Accredited Courses Under Chapter 32, 34, 
and 35, or 36, of Title 38 United States Code, whichever is applicable.
    (c) VA Form 1982c, Schedule No. 2 to the SAA Reimbursement Contract; 
Apprentice Or Other Training On-the-Job.
    (d) VA Form 22-7398, Quarterly Report of State Approving Agency 
Activities Under Chapter 36, Title 38, United States Code.



                   Subpart 853.3_Illustration of Forms



853.300  Scope of subpart.

    VA Forms will not be illustrated in this VAAR. Persons wishing to 
obtain copies of VA forms prescribed in the VAAR may do so in accordance 
with 853.107.

[[Page 257]]



            SUBCHAPTER I_DEPARTMENT SUPPLEMENTARY REGULATIONS





PART 870_SPECIAL PROCUREMENT CONTROLS--Table of Contents




                         Subpart 870.1_Controls

Sec.
870.111 Subsistence.
870.111-5 Frozen processed food products.
870.112 Telecommunications equipment.
870.113 Paid use of conference facilities.
870.114 Asbestos.
870.114-1 General.
870.114-2 Background.
870.114-3 Approving authority.
870.114-4 Exempted products containing asbestos.
870.115 Food service equipment.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12640, Mar. 29, 1984, unless otherwise noted.



                         Subpart 870.1_Controls



870.111  Subsistence.



870.111-5  Frozen processed food products.

    (a) All frozen, processed food products procured which contain meat, 
poultry or a significant proportion of eggs, will be processed or 
prepared in plants operated under the supervision of the U.S. Department 
of Agriculture (USDA). The product will be inspected and approved in 
accordance with the regulations of the USDA governing meat, poultry or 
egg inspection. A label or seal, affixed to the container, indicating 
compliance with these regulations will be accepted as evidence of 
compliance. The product must bear a label complying with the Federal 
Food, Drug and Cosmetic Act which requires that all ingredients be 
listed according to the order of their predominance.
    (b) All frozen, processed food products procured which contain fish 
or fish products will be processed or prepared in plants operated under 
the supervision of the U.S. Department of Commerce (USDC). The products 
listed in USDC publication titled, ``Approved List of Sanitarily 
Inspected Fish Establishments'' are processed in plants under Federal 
inspection of the National Marine Fisheries Service, National Oceanic 
and Atmospheric Administration, U.S. Department of Commerce. The 
inspected products packed under various labels bearing the brand names 
are produced in accordance with current U.S. Grade Standards or official 
product specifications, packed under optimum hygienic conditions, and 
must meet Federal, State, and city sanitation and health regulations. 
Such brand label or USDC seal, affixed to a container, indicating 
compliance with USDC regulations will be accepted as evidence of 
compliance. In lieu thereof, the shipment may be lot inspected by the 
USDC and containers stamped to indicate acceptance or a Certification of 
Inspection issued to accompany the shipment. The product must bear a 
label complying with the Federal Food, Drug and Cosmetic Act which 
requires that all ingredients be listed according to the order of their 
predominance.
    (c) Producers of frozen bakery products which are shipped in 
interstate commerce are required to comply with the Federal Food, Drug 
and Cosmetic Act. Therefore, it must be vertified that the product, in 
fact was shipped interstate or that the producer ships products to other 
purchasers interstate. In addition, the product must bear a label 
complying with the Act which requires that all ingredients be listed 
according to the order of their predominance.

[49 FR 12640, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989]



870.112  Telecommunications equipment.

    (a) Solicitations, including those for construction, based on 
detailed purchase descriptions or formal specifications for 
telecommunications equipment, as defined in VA Manual MP-6,

[[Page 258]]

Part VIII, \1\ will include the clause required by 852.211-74.
---------------------------------------------------------------------------

    \1\ Available at any Department of Veterans Affairs facility.
---------------------------------------------------------------------------

    (b) The descriptive literature to be furnished by the contractor 
after award, required by the clause in 852.211-74, is to be reviewed and 
approved by the Telecommunications Support Service prior to delivery 
and/or installation by the contractor. Promptly upon receipt of the 
descriptive literature, contracting officers will forward it together 
with a copy of the contract, the formal specification, or the detailed 
purchase description to the Deputy Assistant Secretary for Acquisition 
and Materiel Management, Acquisition Administration Team.
    (c) Solicitations, including those for construction, for 
telecommunications equipment based on ``brand name or equal'' purchase 
description are subject to the following:
    (1) Prior to award, contracting officers will forward to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, the abstract of bids, one copy of each offer 
received, including descriptive literature and pertinent letters, and 
the comments and recommendations of the contracting officer.
    (2) No commitments are to be made to contractors prior to receipt of 
Central Office reaction.
    (3) Allowance of at least 30 calendar days for acceptance will be 
specified in the solicitation in order to allow sufficient time for the 
review required by this paragraph (c). (See FAR 52.214-16.)

[49 FR 12640, Mar. 29, 1984, as amended at 50 FR 798, Jan. 7, 1985; 54 
FR 30044 and 30045, July 18, 1989; 54 FR 40066, Sept. 29, 1989; 63 FR 
17339, Apr. 9, 1998]



870.113  Paid use of conference facilities.

    (a) The rental of space for VA-sponsored symposia and training 
sessions may be unwarranted when other alternatives are available at no 
expense or reduced expense to the Government. After the geographical 
location for a VA conference has been selected, based on minimum overall 
travel costs for all Government participants and other relevant factors, 
a request for conference space will be forwarded to the servicing Supply 
activity. The request for conference space should afford the contracting 
officer every opportunity to secure rent-free facilities.
    (b) The following criteria for the selection of an appropriate 
facility will apply:
    (1) A thorough effort will be made to schedule conferences and 
training sessions so that the conference facilities of VA installations 
in the city where the conference is held may be used.
    (2) Where no VA space is available, the General Services 
Administration will be contacted to determine if there is other 
Government agency space which may be used.
    (3) Efforts will be made to schedule conferences, where Government 
space is not available, through hotels and motels which offer free 
conference facilities in exchange for a stipulated number of lodging 
reservations for participants. Surcharges per lodging or increased room 
rates, to offset the cost of the conference room, shall be considered 
payment for such space.
    (4) In the event none of these is available on the desired dates, 
consideration will be given to rescheduling the conference to avail VA 
of the use of facilities without payment of a fee.
    (5) If none of the above is practical, rental conference space will 
be obtained. Complete documentation of efforts to secure free conference 
space, as outlined above, will be maintained in the purchase order file. 
The costs of coffee, refreshments, meals, lodging, tips and other 
supplies and services not directly related to the presentations within 
the conference space are not allowable.
    (c) The conference coordinator of the requesting organization will 
continue to be responsible for individual room reservations, including 
any cancellations.

[49 FR 12640, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989]



870.114  Asbestos.



870.114-1  General.

    This section applies to the purchase and use of asbestos products 
and equipment or materials containing asbestos

[[Page 259]]

products in the Department of Veterans Affairs.



870.114-2  Background.

    Exposure to asbestos is associated with chronic and debilitating 
lung disease and cancer. To reduce the health hazard related to the 
exposure to asbestos, the U.S. Environmental Protection Agency and the 
U.S. Department of Labor (Occupational Safety and Health Administration) 
have issued specific regulations on asbestos. Although these regulations 
do not call for a complete ban on the use of asbestos, they do impose 
strict requirements on its use, airborne contamination and disposal.



870.114-3  Approving authority.

    Asbestos products and equipment or materials containing asbestos 
products shall not be specified nor purchased for use in the Department 
of Veterans Affairs if any suitable substitutes are available. If 
suitable substitutes are not available, specific authorization to 
purchase and use asbestos products and equipment or materials specifying 
asbestos products, must be granted by the Secretary or designee. 
Requests for authorization will be submitted through the Director, 
Network Program Support (10NB). The following information will be 
provided:
    (a) The name of the product, source of supply, and physical form of 
asbestos as used in the product or equipment;
    (b) A description of use, including purpose, urgency, methodology, 
qualities, and by whom; and
    (c) Safeguards being employed, with particular emphasis on the 
identification of the asbestos products, and procedures to be taken to 
prevent airborne contamination and disposal.

[49 FR 12640, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989; 
63 FR 69223, Dec. 16, 1998]



870.114-4  Exempted products containing asbestos.

    The Director, Network Program Support (10NB), VA Central Office, is 
responsible for maintaining a list of products containing asbestos which 
are exempted by the Secretary or designee from this policy.

[49 FR 12640, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989; 
63 FR 69223, Dec. 16, 1998]



870.115  Food service equipment.

    (a) All new food service equipment purchased for Nutrition and Food 
Service through other than the Defense General Supply Center (DGSC) 
sources must meet requirements set forth by the National Sanitation 
Foundation (NSF).
    (b) The contracting officer will accept an affixed NSF label and/or 
documentation of the certification by NSF from the contractor as 
evidence that the subject equipment meets sanitation standards issued by 
the Foundation.

[49 FR 12640, Mar. 29, 1984, as amended at 63 FR 69223, Dec. 16, 1998]



PART 871_LOAN GUARANTY AND VOCATIONAL REHABILITATION AND COUNSELING 
PROGRAMS--Table of Contents




                   Subpart 871.1_Loan Guaranty Program

Sec.
871.100 Scope of subpart.
871.101 Policy.
871.102 Authorization for repairs to properties.
871.104 Qualification of bidders.
871.106 Lien waivers.
871.107 Stipulations against liens.

     Subpart 871.2_Vocational Rehabilitation and Counseling Program

871.200 Scope of subpart.
871.201 General.
871.201-1 Requirements for the use of contracts.
871.201-2 Requirements when contracts are not required.
871.201-3 Medical services.
871.201-4 Letter contracts.
871.202 Marking and release of supplies.
871.203 Renewals or supplements to contracts.
871.204 Guaranteed payment.
871.205 Proration of charges.
871.206 Other fees and charges.
871.207 Payment of tuition or fees.
871.208 Rehabilitation facilities.
871.209 Records and reports.
871.210 Correspondence courses.
871.211 Information concerning correspondence courses.

[[Page 260]]

Subpart 871.3--Education Program [Reserved]

    Authority: 10 U.S.C. ch. 106, 107, 1606; 38 U.S.C. 501, ch. 30, 31, 
32, 35, 36, 37; 40 U.S.C. 486(c).

    Source: 49 FR 12641, Mar. 29, 1984, unless otherwise noted.



                   Subpart 871.1_Loan Guaranty Program



871.100  Scope of subpart.

    This subpart sets forth policy and procedure with respect to the 
loan guaranty and direct loan programs as it pertains to property 
management, including the acquisition, management, and disposition of 
property, real, personal, or mixed, which were secured by loans 
guaranteed, insured, or made pursuant to Title 38, United States Code.



871.101  Policy.

    All acquisitions for the repair and maintenance of VA property 
acquired under 38 U.S.C. Chapter 37 shall be made in accordance with FAR 
Parts 14, 15, and 16; (VAAR) 48 CFR Parts 814, 815, and 816; and (VAAR) 
48 CFR subpart 871.1.

(Authority: 10 U.S.C. ch. 106, 107, 1606; 38 U.S.C. 501, ch. 37; 40 
U.S.C. 486(c))

[61 FR 20493, May 7, 1996]



871.102  Authorization for repairs to properties.

    (a) Except as provided in this subpart, Directors, Loan Guaranty 
Officers, and Assistant Loan Guaranty Officers, VA Regional Offices, are 
authorized to approve a repair program for any Department of Veterans 
Affairs property acquired under Chapter 37, Title 38, United States 
Code, where the cost does not exceed $25,000. A repair program means the 
aggregate amount of the proposed contracts which are contemplated in a 
property analysis by the Loan Guaranty activity.
    (b) In those cases where the expenditure is known or estimated to 
exceed $25,000, the request, together with the loan guaranty folder, 
will be forwarded to the Under Secretary for Benefits for approval.
    (c) During the period when the Department of Veterans Affairs has 
assumed custody of the property from a holder and prior to its 
conveyance to the Deparment of Veterans Affairs pursuant to 38 CFR 
36.4320, repairs are authorized not in excess of $3,500 when appropriate 
to make the property ready for sale at an earler date than would 
otherwise be possible if the repair program was delayed until such time 
as the Department of Veterans Affairs acquired absolute title. In those 
cases where the expenditure is known or estimated to exceed $3,500, the 
request, together with the loan guarantee folder, will be forwarded to 
the Under Secretary for Benefits for approval.
    (d) No repairs may be made to property by the holder when it has 
continued custody except for emergeny repairs not in excess of $500 
unless adequate notice has been given the Director, VA Regional Office. 
Emergency repairs as applied in this paragraph will be deemed to mean 
those requiring immediate action to preserve the property from serious 
damage or to correct a situation imminently dangerous to life or limb, 
and includes the initial cleanup of the property in order to prevent the 
risk of damage by fire or vandalism.
    (e) An approved management broker may be authorized, at the time a 
property is assigned, to incur expenses for fuel and utilities or other 
recurring items which are required to be furnished by the Department of 
Veterans Affairs to its tenants or are required in the maintenance of 
the property. Advance blanket authorizations to management brokers will 
be limited to repairs not in excess of $500 in any transaction, (the 
management broker will either submit receipts with the invoice or 
maintain such receipts for inspection). Expenditures in excess of $500 
require prior approval of the Director, Regional Office, having 
jurisdiction of the property. Repair jobs may not be split to circumvent 
this restriction.

[49 FR 12641, Mar. 29, 1984, as amended at 55 FR 31600, Aug. 3, 1990; 61 
FR 20493, 20494, May 7, 1996; 63 FR 69223, Dec. 16, 1998]

[[Page 261]]



871.104  Qualification of bidders.

    (a) Qualification of bidders shall be established in accordance with 
procedures outlined in FAR Subpart 9.1 and subpart 809.1 of this 
chapter.
    (b) Management brokers are not considered acceptable bidders for 
repair contracts due to their close association on a fee basis with the 
Department of Veterans Affairs. This restriction would apply equally to 
any contracting firm in which the management broker has an interest and 
in which it could be presumed that such firm would have an advantage 
over the other bidders. This does not preclude the performance of work 
by management brokers of a routine recurring maintenance category or 
minor repairs by personnel employed directly on the payroll of the 
broker. In these cases, it must be established that any charges for such 
services are not in excess of the prevailing fees for like services in 
the area.



871.106  Lien waivers.

    (a) Contracts in the amount of $2,500 or more will contain a 
requirement that the contractor will sign a formal release in full or a 
lien waiver before payment may be made. The release or waiver will 
accompany the contractor's invoice.
    (b) Contractors will be required to notify the Director, Regional 
Office, of any subcontractors for services or materials in excess of 
$2,500. Such subcontractors will be required to sign the release or 
waiver jointly with the prime contractor or to execute release or waiver 
in the subcontractor's own name.
    (c) Prior to any authorized partial payment the contractor will be 
required to execute a release or waiver.
    (d) Due to the variations of local law, no standard release or 
waiver is prescribed. Each release or waiver will be prepared in 
accordance with local law and will be in form acceptable by the District 
Counsel.

[49FR 12641, Mar. 29, 1984, as amended at 61 FR 20494, May 7, 1996]



871.107  Stipulations against liens.

    (a) Where determined necessary by the Director, Regional Office, 
contracts in an amount less than $2,500 may contain the following:

    The contractor expressly waives any and all rights to file or 
maintain any mechanics lien or claim against the aforesaid premises.

    (b) Contracts in the amount of $2,500 or more where there is doubt 
as to the final responsibility of the contractor will provide maximum 
potection to the Government by including such requirements as are 
available under local law. Advice and approval of any contract 
stipulation or legal stipulations against liens will be obtained from 
the District Counsel.



     Subpart 871.2_Vocational Rehabilitation and Counseling Program



871.200  Scope of subpart.

    This subpart establishes policy and procedures for the vocational 
rehabilitation and counseling program as it pertains to contracts for 
training and rehabilitation services, approval of institutions 
(including rehabilitation facilities), training establishments, and 
employers under 38 U.S.C. Chapter 31, and contracts for counseling 
services under 38 U.S.C. Chapters 30, 31, 32, 35, and 36 and 10 U.S.C. 
Chapters 106, 107, and 1606.

(Authority: 10 U.S.C. ch. 106, 107, 1606; 38 U.S.C. 501, ch. 30, 31, 32, 
35, 36; 40 U.S.C. 486(c))

[61 FR 20494, May 7, 1996]



871.201  General.



871.201-1  Requirements for the use of contracts.

    Contracts will be negotiated for tuition, fees, books, supplies and 
other allowable expenses incurred by the institution, training 
establishment or employer for the training and rehabilitation of 
eligible veterans under Chapter 31, Title 38, United States Code, under 
the following conditions:
    (a) With institutions offering courses of instruction by 
correspondence. Courses of instruction by correspondence is deemed to 
mean a course of education or training conducted by mail consisting of 
regular lessons or reading assignments, the preparation

[[Page 262]]

of required written work which involves the application of principles 
studied in each lesson, the correction of assigned work with such 
suggestions or recommendation as may be necessary to instruct the 
student, the keeping of student achievement records and issuance of a 
diploma, certificate, or other evidence to the student upon 
satisfactorily completing the requirements of the course.
    (b) With institutions, training establishments, employers, or 
individuals approved to provide training and rehabilitation services 
under Chapter 31, Title 38, United States Code, for whom special 
services or special courses are furnished at the request of the 
Department of Veterans Affairs. The terms ``special services'' or 
``special courses'' have the same meaning as under 831.7001-2.

[49 FR 12641, Mar. 29, 1984; 50 FR 798, Jan. 7, 1985]



871.201-2  Requirements when contracts are not required.

    (a) When a contract is not required, a signed statement of charges 
will be obtained from the educational institution or training 
establishment for courses to be offered, including the rate of tuition, 
fees, and separate charges, if any, for books, supplies, and equipment 
handling charges, refund policy and such other provisions as are 
required to determine proper payment. The statement of charges may be in 
the form of a statement on VA Form 22-1905, Authorization and 
Certification of Entrance or Reentrance into Training, that charges will 
be in accordance with catalog or other published document (identify 
publication). The statement of charges may not exceed those charges paid 
by nonveterans or that is published in the school catalog or other 
published document.
    (b) For the purpose of this section a contract will not be required 
when all tuition, fees, books, supplies, or services necessary to train, 
or educate an eligible veteran under Chapter 31, Title 38, United States 
Code, are published in the school catalog or other published document.

[49 FR 12641, Mar. 29, 1984; 50 FR 798, Jan. 7, 1985]



871.201-3  Medical services.

    The medical services provided trainees under vocational 
rehabilitation and education contracts, agreements, or arrangements are 
separate and distinct from any other medical service under the 
jurisdiction of the Veterans Health Administration to which the veteran 
may be entitled and no certificate of eligibility is required from that 
administration.

[49 FR 12641, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989; 
61 FR 20494, May 7, 1996]



871.201-4  Letter contracts.

    Letter contracts are authorized for use in accordance with the 
provision of FAR 16.603 and in those cases in which it is not possible 
to complete a formal contract with an approved educational institution 
prior to the enrollment of eligible veterans for training.



871.202  Marking and release of supplies.

    Supplies will not be marked to indicate ownership by the United 
States and will be deemed released to the trainee at the time they are 
furnished.



871.203  Renewals or supplements to contracts.

    Except for contracts for educational and vocational counseling, 
contracts may be renewed from year to year, providing there is no change 
in the schedule or provisions as originally consummated by completion of 
a renewal agreement no later than 30 days prior to the expiration of the 
contract.
    (a) Supplements may be negotiated at any time during the contract 
period upon the completion of the supplemental agreement.
    (b) Contracts for educational and vocational counseling may provide 
for automatic extension from year to year.



871.204  Guaranteed payment.

    No contract or agreement may be entered into with any institution or 
training establishment whereby the Department of Veterans Affairs will 
be required to pay a minimum charge, or required to enroll a minimum 
number

[[Page 263]]

of participants per quarter, semester, term, course, or other period.

[49 FR 12641, Mar. 29, 1984; 50 FR 798, Jan. 7, 1985]



871.205  Proration of charges.

    The contract will include the exact formula agreed on for the 
proration of charges in the event that the veteran's program is 
interrupted or discontinued prior to the end of the term, semester, 
quarter, or other period, or the program is completed in less time than 
stated in the contract.



871.206  Other fees and charges.

    Fees and other charges which are not prescribed by law but are by 
nongovernmental organizations, such as initiation fees required to 
become a member of a labor union and the dues necessary to maintain 
membership incidental to training on the job or to obtaining employment 
during a period in which the veteran is a Chapter 31 participant, may be 
paid provided there are no facilities feasibly available whereby the 
necessary training can be feasibly accomplished or employment obtained 
without paying such charges. Payment for such fees will be made in 
accordance with part 813.

[49 FR 12641, Mar. 29, 1984, as amended at 54 FR 40066, Sept. 29, 1989]



871.207  Payment of tuition or fees.

    (a) Contracts, agreements, or arrangements requiring the payment of 
tuition or fees will provide for the following:
    (1) Payment for tuition or fees will be made in arrears and will be 
prorated in installments over the school year or the length of the 
course except that institutions may be paid in accordance with the 
provision of paragraph (a)(2) of this section, provided such 
institutions operate on a regular term, quarter, or semester basis and 
normally accept students only at the beginning of the term, quarter, or 
semester and provided for further such institutions are either:
    (i) Institutions of higher learning that use a standard unit of 
credit recognized by accrediting associations (such institutions will 
include those which are members of recognized national or regional 
educational accrediting associations, and those which, although not 
members of such accrediting associations, grant standard units of credit 
acceptable at full value without examination by collegiate institutions 
which are members of national or regional accrediting associations).
    (ii) Public tax supported institutions.
    (iii) Institutions operated and controlled by State, county, or 
local boards of education.
    (2) Institutions coming within the exceptions of paragraph (a)(1) of 
this section which have a refund policy providing for a graduated scale 
of charges for purposes of determining refunds may be paid part or all 
such tuitions or fees for a term, quarter, or other period of enrollment 
immediately following the date on which the refund expires.
    (3) Proration of charges will not apply to a fee which is for 
noncontinuing service such as registration fee, etc.
    (b) The period for which payment of charges may be made will be the 
period of actual enrollment and subject to the following:
    (1) The effective date will be the date of the trainee's entrance 
into training status except that payment may be made for an entire-
semester, quarter, or term in institutions operating on that basis if 
the trainee enters no later than the final date set by the institution 
for enrolling for full credit.
    (2) In those cases where the institution has not set a final date 
for enrolling for full credit or will not set a date acceptable to the 
Department of Veterans Affairs, payment may be prorated on the basis of 
attendance regardless of the refund policy.
    (3) If an institution customarily charges for the amount of credit 
or number of hours of attendance for which a trainee enrolls, payment 
may be made on that basis when a trainee enrolls after the final date 
permitted for carrying full credit for the semester or term.
    (c) The terminal date to which payment will be made is the day 
following:
    (1) The end of the semester, term or quarter during which the 
training is furnished.
    (2) The date of interruption or discontinuance of training.

[[Page 264]]

    (3) The date of completion of the course.

[49 FR 12641, Mar. 29, 1984, as amended at 50 FR 798, Jan. 7, 1985; 61 
FR 20494, May 7, 1996]



871.208  Rehabilitation facilities.

    The provisions for payment of charges to rehabilitation facilities 
for the rehabilitation services provided under Chapter 31 are paid in 
the same manner as charges for educational and vocational services 
through contract, agreement, or other arrangement.



871.209  Records and reports.

    Contracts, agreements, or arrangements will provide for the number 
and frequency of reports, adequate financial records to support payment 
for each trainee and maintenance of attendance and progress records. 
Such records will be preserved for a period of three years.



871.210  Correspondence courses.

    Contracts with institutions for correspondence courses will provide 
that:
    (a) Major changes in courses or course material will not be binding 
on the Department of Veterans Affairs until such time as a supplemental 
agreement is negotiated to the contract.
    (b) Minor changes in course or course material not affecting the 
length of the course or number of lessons and not lowering the 
educational value of the course or the quality of the course material 
such as revision of text, the substitution of a newer lesson for an 
older one, or the substitution of equipment of equal or greater value, 
are permitted without supplemental agreements. Such minor changes and 
revisions shall be placed on file with the contracting officer at the 
time of the change or revision.
    (c) Trainees be provided with prompt and adequate lesson service 
and, unless otherwise specified in the contract, be furnished the same 
texts, lessons service, diplomas, and other services as are normally 
provided for regularly enrolled nonveteran students.
    (d) All lessons be adequately serviced on an individual basis. 
Grouping of lessons, into units or partial servicing does not meet this 
requirement.
    (e) Each lesson must have a separate examination adequate in terms 
of lesson content.
    (f) The training of persons under a Department of Veterans Affairs 
contract or the fact that the United States is utilizing the facilities 
of the institution for training veterans shall not be used in any way to 
advertise the institution. References in the advertising media or 
correspondence of the institution shall be limited to a list of courses 
under Chapter 31, Title 38, United States Code, and shall not be 
directed or pointed specifically to veterans.
    (g) The rates, fees, and charges are not in excess of those charged 
nonveterans.
    (h) That payment will be made on a lesson completed basis in areas 
for assignments sent in by trainees and serviced during a pay period as 
established by the contract.
    (i) Payment will be made only once for each lesson even through it 
is necessary to service a lesson more than once.



871.211  Information concerning correspondence courses.

    Specific questions on correspondence courses as to the content of 
courses, academic credit, and entrance requirements for courses included 
in Department of Veterans Affairs contracts may be directed to the 
institutions offering the courses.

Subpart 871.3--Education Program [Reserved]



PART 873_SIMPLIFIED ACQUISITION PROCEDURES FOR HEALTH-CARE RESOURCES
--Table of Contents




Sec.
873.101 Policy.
873.102 Definitions.
873.103 Priority sources.
873.104 Competition requirements.
873.105 Acquisition planning.
873.106 Presolicitation exchanges with industry.
873.107 Socioeconomic programs.
873.108 Publicizing contract actions.
873.109 General requirements for acquisition of health-care resources.
873.110 Solicitation provisions.
873.111 Acquisition strategies for health-care resources.

[[Page 265]]

873.112 Evaluation information.
873.113 Exchanges with offerors.
873.114 Best value pool.
873.115 Proposal revisions.
873.116 Source selection decision.
873.117 Award to successful offeror.
873.118 Debriefings.

    Authority: 38 U.S.C. 8151-8153.

    Source: 68 FR 3469, Jan. 24, 2003, unless otherwise noted.



873.101  Policy.

    The simplified acquisition procedures set forth in this Department 
of Veterans Affairs Acquisition Regulation (VAAR) part apply to the 
acquisition of health-care resources consisting of commercial services 
or the use of medical equipment or space. These procedures shall be used 
in conjunction with the Federal Acquisition Regulation (FAR) and other 
parts of VAAR. However, when a policy or procedure in FAR or another 
part of VAAR differs from the procedures contained in this part, this 
part shall take precedence. These procedures contain more flexibility 
than provided in FAR or elsewhere in VAAR.



873.102  Definitions.

    Commercial service means a service, except construction exceeding 
$2,000 and architect-engineer services, that is offered and sold 
competitively in the commercial marketplace, is performed under standard 
commercial terms and conditions, and is procured using firm-fixed price 
contracts.
    Health-care providers includes health-care plans and insurers and 
any organizations, institutions, or other entities or individuals who 
furnish health-care resources.
    Health-care resource includes hospital care and medical services (as 
those terms are defined in section 1701 of title 38 United States Code 
(U.S.C.), any other health-care service, and any health-care support or 
administrative resource, including the use of medical equipment or 
space.



873.103  Priority sources.

    Without regard to FAR 8.001(a)(2), except for the acquisition of 
services available from the Committee for Purchase From People Who Are 
Blind or Severely Disabled, pursuant to the Javits-Wagner-O'Day Act (41 
U.S.C. 46-48c) and FAR subpart 8.7, there are no priority sources for 
the acquisition of health-care resources consisting of commercial 
services or the use of medical equipment or space.



873.104  Competition requirements.

    (a) Without regard to FAR part 6, if the health-care resource 
required is a commercial service, the use of medical equipment or space, 
or research, and is to be acquired from an institution affiliated with 
the Department in accordance with section 7302 of title 38 U.S.C., 
including medical practice groups and other approved entities associated 
with affiliated institutions (entities will be approved if determined 
legally to be associated with affiliated institutions), or from blood 
banks, organ banks, or research centers, the resource may be acquired on 
a sole source basis.
    (b) Acquisition of health-care resources identified in paragraph (a) 
of this section are not required to be publicized as otherwise required 
by 873.108 or FAR 5.101. In addition, written justification, as 
otherwise set forth in section 303(f) of the Federal Property and 
Administration Services Act of 1949 (41 U.S.C. 253(f)) and FAR part 6, 
is not required.
    (c) Without regard to FAR 6.101, if the health-care resource 
required is a commercial service or the use of medical equipment or 
space, and is to be acquired from an entity not described in paragraph 
(a) of this section, contracting officers must seek competition to the 
maximum extent practicable and must permit all responsible sources, as 
appropriate under the provisions of this part, to submit a bid, proposal 
or quotation (as appropriate) for the resources to be procured and 
provide for the consideration by the Department of bids, proposals, or 
quotations so submitted.
    (d) Without regard to FAR 5.101, acquisition of health-care 
resources identified in paragraph (c) of this section shall be 
publicized as otherwise required by 873.108. Moreover, for any such 
acquisition described in paragraph (c) of this section to be conducted 
on a sole source basis, the contracting officer must prepare a 
justification that

[[Page 266]]

includes the information and is approved at the levels prescribed in 
section 303(f) of the Federal Property and Administration Services Act 
of 1949 (41 U.S.C. 253(f)) and FAR part 6.



873.105  Acquisition planning.

    (a) Acquisition planning is an indispensable component of the total 
acquisition process.
    (b) For the acquisition of health-care resources consisting of 
commercial services or the use of medical equipment or space, where the 
acquisition is expected to exceed the simplified acquisition threshold 
(SAT), an acquisition team must be assembled. The team shall be tailored 
by the contracting officer for each particular acquisition expected to 
exceed the SAT. The team should consist of a mix of staff, appropriate 
to the complexity of the acquisition, and may include contracting, 
fiscal, legal, administrative, and technical personnel, and such other 
expertise as necessary to assure a comprehensive acquisition plan. The 
team should include the small business advocate representing the 
contracting activity or a higher level designee and the SBA Procurement 
Center Representative (PRC), if available. As a minimum, the team must 
include the contracting officer and a representative of the requesting 
service.
    (c) Prior to determining whether a requirement is suitable for 
acquisition using these simplified acquisition procedures, the 
contracting officer or the acquisition team, as appropriate, must 
conduct market research to identify interested businesses. It is the 
responsibility of the contracting officer to ensure the requirement is 
appropriately publicized and information about the procurement 
opportunity is adequately disseminated as set forth in 873.108.
    (d) In lieu of the requirements of FAR part 7 addressing 
documentation of the acquisition plan, the contracting officer may 
conduct an acquisition strategy meeting with cognizant offices to seek 
approval for the proposed acquisition approach. If a meeting is 
conducted, briefing materials shall be presented to address the 
acquisition plan topics and structure in FAR 7.105. Formal written 
minutes shall be prepared to summarize decisions, actions, and 
conclusions and included in the contract file, along with a copy of the 
briefing materials.



873.106  Presolicitation exchanges with industry.

    (a) This section shall be used in lieu of FAR part 10, except as 
provided in paragraph (b)(3)of this section. In conducting market 
research, exchange of information by all interested parties involved in 
an acquisition, from the earliest identification of a requirement 
through release of the solicitation, is encouraged. Interested parties 
include potential offerors, end users, Government acquisition and 
support personnel, and others involved in the conduct or outcome of the 
acquisition. The nature and extent of presolicitation exchanges between 
the Government and industry shall be a matter of the contracting 
officer's discretion (for acquisitions not exceeding the simplified 
acquisition threshold) or the acquisition team's discretion, as 
coordinated by the contracting officer.
    (b) Techniques to promote early exchange of information include--
    (1) Industry or small business conferences;
    (2) Public hearings;
    (3) Market research in accordance with FAR 10.002(b), which shall be 
followed to the extent that the provisions therein would provide 
relevant information;
    (4) One-on-one meetings with potential offerors;
    (5) Presolicitation notices;
    (6) Draft Requests for proposals (RFPs);
    (7) Requests for information (RFIs);
    (8) Presolicitation or preproposal conferences;
    (9) Site visits;
    (10) Electronic notices (e.g., Internet); and
    (11) Use of the Procurement Marketing and Access Network (PRO-NET).



873.107  Socioeconomic programs.

    (a) Implementation. This section provides additional authority, over 
and above that found at FAR 19.502, to waive small business set-asides. 
For acquisitions above the micro-purchase threshold, if, through market 
research,

[[Page 267]]

the contracting officer determines that there is reasonable expectation 
that reasonably priced bids, proposals, or quotations will be received 
from two or more responsible small businesses, a requirement for health-
care resources must be reserved for small business participation. 
Without regard to FAR 13.003(b)(1), 19.502-2, and 19.502-3, the head of 
the contracting activity (HCA) may approve a waiver from the requirement 
for any set-aside for small business participation when a waiver is 
determined to be in the best interest of the Government.
    (b) Rejecting Small Business Administration (SBA) recommendations. 
(1) The contracting officer (or, if a waiver has been approved in 
accordance with paragraph (a) of this section, the HCA) must consider 
and respond to a recommendation from an SBA representative to set a 
procurement aside for small business within 5 working days. If the 
recommendation is rejected by the contracting officer (or, if a waiver 
has been approved, by the HCA) and if SBA intends to appeal that 
determination, SBA must, within 2 working days after receipt of the 
determination, notify the contracting officer involved of SBA's 
intention to appeal.
    (2) Upon receipt of the notification of SBA's intention to appeal 
and pending issuance of a final Department appeal decision to SBA, the 
contracting officer involved must suspend action on the acquisition 
unless a determination is made in writing by the contracting officer 
that proceeding to contract award and performance is in the public 
interest. The contracting officer must promptly notify SBA of the 
determination to proceed with the solicitation and/or contract award and 
must provide a copy of the written determination to SBA.
    (3) SBA shall be allowed 10 working days after receiving the 
rejection notice from the contracting officer (or the HCA, if a waiver 
has been approved) for acquisitions not exceeding $5 million, or 15 
working days after receiving the rejection notice for acquisitions 
exceeding $5 million, to file an appeal. SBA must notify the contracting 
officer within this 10 or 15 day period whether an appeal has, in fact, 
been taken. If notification is not received by the contracting officer 
within the applicable period, it shall be deemed that an appeal was not 
taken.
    (4) SBA shall submit appeals to the Secretary. Decisions shall be 
made by the Procurement Executive, whose decisions shall be final.
    (c) Contracting with the Small Business Administration (the 8(a) 
Program). The procedures of FAR 19.8 shall be followed where a 
responsible 8(a) contractor has been identified.
    (d) Certificates of Competency and determinations of responsibility. 
The Director, Office of Small and Disadvantaged Business Utilization 
(OSDBU), Department of Veterans Affairs (VA), and the Assistant 
Administrator, Office of Industrial Assistance, Small Business 
Administration (SBA), shall serve as ombudsmen to assist VA contracting 
officers on any issues relating to Certificates of Competency (COC). 
Copies of all COC referrals to SBA shall be submitted to the Director, 
OSDBU (00SB).



873.108  Publicizing contract actions.

    (a) Without regard to FAR 5.101, all acquisitions under this part 
873, except as provided in paragraph (b) of this section, for dollar 
amounts in excess of the simplified acquisition threshold (SAT), as set 
forth in FAR part 13, shall be publicly announced utilizing a medium 
designed to obtain competition to the maximum extent practicable and to 
permit all responsible sources, as appropriate under the provisions of 
this part, to submit a bid, proposal, or quotation (as appropriate).
    (1) The publication medium may include the Internet, including the 
Governmentwide point of entry (GPE), and local, regional or national 
publications or journals, as appropriate, at the discretion of the 
contracting officer, depending on the complexity of the acquisition.
    (2) Without regard to FAR 5.203, notice shall be published for a 
reasonable time prior to issuance of a request for quotations (RFQ) or a 
solicitation, depending on the complexity or urgency of the acquisition, 
in order to afford potential offerors a reasonable opportunity to 
respond. If the notice includes a complete copy of the RFQ or

[[Page 268]]

solicitation, a prior notice is not required, and the RFQ or 
solicitation shall be considered to be announced and issued at the same 
time.
    (3) The notice may include contractor qualification parameters, such 
as time for delivery of service, credentialing or medical certification 
requirements, small business or other socio-economic preferences, the 
appropriate small business size standard, and such other qualifications 
as the contracting officer deems necessary to meet the needs of the 
Government.
    (b) The requirement for public announcement does not apply to sole 
source acquisitions, described in 873.104(a), from institutions 
affiliated with the Department in accordance with section 7302 of title 
38 U.S.C., including medical practice groups and other approved entities 
associated with affiliated institutions (entities will be approved if 
determined legally to be associated with affiliated institutions), or 
from blood banks, organ banks, or research centers. In addition, the 
requirement for public announcement does not apply to sole source 
acquisitions of hospital care and medical services (as those terms are 
defined in section 1701 of title 38 U.S.C.) or any other health-care 
services, including acquisitions for the mutual use or exchange of use 
of such services. However, as required by 38 U.S.C. 8153(a)(3)(D), 
acquisitions from non-affiliates, if conducted on a sole source basis, 
must still be justified and approved (see 873.104(d)).
    (c) For acquisitions below the SAT, a public announcement is 
optional.
    (d) Each solicitation issued under these procedures must prominently 
identify that the requirement is being solicited under the authority of 
38 U.S.C. 8153 and part 873.



873.109  General requirements for acquisition of health-care resources.

    (a) Source selection authority. Contracting officers shall be the 
source selection authority for acquisitions of health-care resources, 
consisting of commercial services or the use of medical equipment or 
space, utilizing the guidance contained in this part 873.
    (b) Statement of work/Specifications. Statements of work or 
specifications must define the requirement and should, in most 
instances, include qualifications or limitations such as time limits for 
delivery of service, medical certification or credentialing 
restrictions, and small business or other socio-economic preferences. 
The contracting officer may include any other such terms as the 
contracting officer deems appropriate for each specific acquisition.
    (c) Documentation. Without regard to FAR 13.106-3(b), 13.501(b), or 
15.406-3, the contract file must include:
    (1) A brief written description of the procedures used in awarding 
the contract;
    (2) The market research, including the determination that the 
acquisition involves health-care resources;
    (3) The number of offers received; and
    (4) An explanation, tailored to the size and complexity of the 
acquisition, of the basis for the contract award decision.
    (d) Time for receipt of quotations or offers. (1) Without regard to 
FAR 5.203, contracting officers shall set a reasonable time for receipt 
of quotations or proposals in requests for quotations (RFQs) and 
solicitations.
    (2) Without regard to FAR 15.208 or 52.212-1(f), quotations or 
proposals received after the time set forth in an RFQ or request for 
proposals (RFP) may be considered at the discretion of the contracting 
officer if determined to be in the best interest of the Government. 
Contracting officers must document the rationale for accepting 
quotations or proposals received after the time specified in the RFQ or 
RFP. This paragraph (d)(2) shall not apply to RFQs or RFPs if 
alternative evaluation techniques described in 873.111(e)(1)(ii) are 
used. This paragraph (d)(2) does not apply to invitations for bid 
(IFBs).
    (e) Cancellation of procurements. Without regard to FAR 14.404-1, 
any acquisition may be canceled by the contracting officer at any time 
during the acquisition process if cancellation is determined to be in 
the best interest of the Government.

[[Page 269]]



873.110  Solicitation provisions.

    (a) As provided in 873.109(d), contracting officers shall insert the 
provision at 852.273-70, Late offers, in all requests for quotations 
(RFQs) and requests for proposals (RFPs) exceeding the micro-purchase 
threshold.
    (b) The contracting officer shall insert a provision in RFQs and 
solicitations, substantially the same as the provision at 852.273-71, 
Alternative negotiation techniques, when either of the alternative 
negotiation techniques described in 873.111(e)(1) will be used.
    (c) The contracting officer shall insert the provision at 852.273-
72, Alternative evaluation, in lieu of the provision at 52.212-2, 
Evaluation--Commercial Items, when the alternative negotiation technique 
described in 873.111(e)(1)(ii) will be used.
    (d) When evaluation information, as described in 873.112, is to be 
used to select a contractor under an RFQ or RFP for health-care 
resources consisting of commercial services or the use of medical 
equipment or space, the contracting officer may insert the provision at 
852.273-73, Evaluation--health-care resources, in the RFQ or RFP in lieu 
of FAR provision 52.212-2.
    (e) As provided at 873.113(f), if award may be made without exchange 
with vendors, the contracting officer shall include the provision at 
852.273-74, Award without exchanges, in the RFQ or RFP.
    (f) The contracting officer shall insert the clauses at FAR 52.207-
3, Right of First Refusal of Employment, and at 852.207-70, Report of 
employment under commercial activities, in all RFQs, solicitations, and 
contracts issued under the authority of 38 U.S.C. 8151-8153 which may 
result in a conversion, from in-house performance to contract 
performance, of work currently being performed by Department of Veterans 
Affairs employees.



873.111  Acquisition strategies for health-care resources.

    Without regard to FAR 13.003 or 13.500(a), the following acquisition 
processes and techniques may be used, singly or in combination with 
others, as appropriate, to design acquisition strategies suitable for 
the complexity of the requirement and the amount of resources available 
to conduct the acquisition. These strategies should be considered during 
acquisition planning. The contracting officer shall select the process 
most appropriate to the particular acquisition. There is no preference 
for sealed bid acquisitions.
    (a) Request for quotations. (1) Without regard to FAR 6.1 or 6.2, 
contracting officers must solicit a sufficient number of sources to 
promote competition to the maximum extent practicable and to ensure that 
the purchase is advantageous to the Government, based, as appropriate, 
on either price alone or price and other factors (e.g., past performance 
and quality). RFQs must notify vendors of the basis upon which the award 
is to be made.
    (2) For acquisitions in excess of the SAT, the procedures set forth 
in FAR part 13 concerning RFQs may be utilized without regard to the 
dollar thresholds contained therein.
    (b) Sealed bidding. FAR part 14 provides procedures for sealed 
bidding.
    (c) Negotiated acquisitions. The procedures of FAR parts 12, 13, and 
15 shall be used for negotiated acquisitions, except as modified in this 
part.
    (d) Multiphase acquisition technique. (1) General. Without regard to 
FAR 15.202, multiphase acquisitions may be appropriate when the 
submission of full proposals at the beginning of an acquisition would be 
burdensome for offerors to prepare and for Government personnel to 
evaluate. Using multiphase techniques, the Government may seek limited 
information initially, make one or more down-selects, and request a full 
proposal from an individual offeror or limited number of offerors. 
Provided that the notice notifies offerors, the contracting officer may 
limit the number of proposals during any phase to the number that will 
permit an efficient competition among proposals offering the greatest 
likelihood of award. The contracting officer may indicate in the notice 
an estimate of the greatest number of proposals that will be included in 
the down-select phase. The contracting officer may down-select to a 
single offeror.
    (2) First phase notice. In the first phase, the Government shall 
publish a

[[Page 270]]

notice (see 873.108) that solicits responses and that may provide, as 
appropriate, a general description of the scope or purpose of the 
acquisition and the criteria that will be used to make the initial down-
select decision. The notice may also inform offerors of the evaluation 
criteria or process that will be used in subsequent down-select 
decisions. The notice must contain sufficient information to allow 
potential offerors to make an informed decision about whether to 
participate in the acquisition. The notice must advise offerors that 
failure to participate in the first phase will make them ineligible to 
participate in subsequent phases. The notice may be in the form of a 
synopsis in the Governmentwide point of entry (GPE) or a narrative 
letter or other appropriate method that contains the information 
required by this paragraph.
    (3) First phase responses. Offerors shall submit the information 
requested in the notice described in paragraph (d)(2) of this section. 
Information sought in the first phase may be limited to a statement of 
qualifications and other appropriate information (e.g., proposed 
technical concept, past performance information, limited pricing 
information).
    (4) First phase evaluation and down-select. The Government shall 
evaluate all offerors' submissions in accordance with the notice and 
make a down-select decision.
    (5) Subsequent phases. Additional information shall be sought in the 
second phase so that a down-select can be performed or an award made 
without exchanges, if necessary. The contracting officer may conduct 
exchanges with remaining offeror(s), request proposal revisions, or 
request best and final offers, as determined necessary by the 
contracting officer, in order to make an award decision.
    (6) Debriefing. Without regard to FAR 15.505, contracting officers 
must debrief offerors as required by 873.118 when they have been 
excluded from the competition.
    (e) Alternative negotiation techniques. (1) Contracting officers may 
utilize alternative negotiation techniques for the acquisition of 
health-care resources. Alternative negotiation techniques may be used 
when award will be based on either price or price and other factors. 
Alternative negotiation techniques include but are not limited to:
    (i) Indicating to offerors a price, contract term or condition, 
commercially available feature, and/or requirement (beyond any 
requirement or target specified in the solicitation) that offerors will 
have to improve upon or meet, as appropriate, in order to remain 
competitive.
    (ii) Posting offered prices electronically or otherwise (without 
disclosing the identity of the offerors) and permitting revisions of 
offers based on this information.
    (2) Except as otherwise permitted by law, contracting officers shall 
not conduct acquisitions under this section in a manner that reveals the 
identities of offerors, releases proprietary information, or otherwise 
gives any offeror a competitive advantage (see FAR 3.104).



873.112  Evaluation information.

    (a) Without regard to FAR 15.304 (except for 15.304(c)(1) and 
(c)(3), which do apply to acquisitions under this authority), the 
criteria, factors, or other evaluation information that apply to an 
acquisition, and their relative importance, are within the broad 
discretion of agency acquisition officials as long as the evaluation 
information is determined to be in the best interest of the Government.
    (b) Price or cost to the Government must be evaluated in every 
source selection. Past performance shall be evaluated in source 
selections for negotiated competitive acquisitions exceeding the SAT 
unless the contracting officer documents that past performance is not an 
appropriate evaluation factor for the acquisition.
    (c) The quality of the product or service may be addressed in source 
selection through consideration of information such as past compliance 
with solicitation requirements, technical excellence, management 
capability, personnel qualifications, and prior experience. The 
information required from quoters, bidders, or offerors shall be 
included in notices or solicitations, as appropriate.

[[Page 271]]

    (d) The relative importance of any evaluation information included 
in a solicitation must be set forth therein.



873.113  Exchanges with offerors.

    (a) Without regard to FAR 15.201 or 15.306, negotiated acquisitions 
generally involve exchanges between the Government and competing 
offerors. Open exchanges support the goal of efficiency in Government by 
providing the Government with relevant information (in addition to that 
submitted in the offeror's initial proposal) needed to understand and 
evaluate the offeror's proposal. The nature and extent of exchanges 
between the Government and offerors is a matter of contracting officer 
judgment. Clarifications, communications, and discussions, as provided 
for in the FAR, are concepts not applicable to acquisitions under this 
part 873.
    (b) Exchanges with potential offerors may take place throughout the 
source selection process. Exchanges may start in the planning stages and 
continue through contract award. Exchanges should occur most often with 
offerors determined to be in the best value pool (see 873.114). The 
purpose of exchanges is to ensure there is mutual understanding between 
the Government and the offerors on all aspects of the acquisition, 
including offerors' submittals/proposals. Information disclosed as a 
result of oral or written exchanges with an offeror may be considered in 
the evaluation of an offeror's proposal.
    (c) Exchanges may be conducted, in part, to obtain information that 
explains or resolves ambiguities or other concerns (e.g., perceived 
errors, perceived omissions, or perceived deficiencies) in an offeror's 
proposal.
    (d) Exchanges shall only be initiated if authorized by the 
contracting officer and need not be conducted with all offerors.
    (e) Improper exchanges. Except for acquisitions based on alternative 
negotiation techniques contained in 873.111(e)(1), the contracting 
officer and other Government personnel involved in the acquisition shall 
not disclose information regarding one offeror's proposal to other 
offerors without consent of the offeror in accordance with FAR parts 3 
and 24.
    (f) Award may be made on initial proposals without exchanges if the 
solicitation states that the Government intends to evaluate proposals 
and make award without exchanges, unless the contracting officer 
determines that exchanges are considered necessary.



873.114  Best value pool.

    (a) Without regard to FAR 15.306(c), the contracting officer may 
determine the most highly rated proposals having the greatest likelihood 
of award based on the information or factors and subfactors in the 
solicitation. These vendors constitute the best value pool. This 
determination is within the sole discretion of the contracting officer. 
Competitive range determinations, as provided for in the FAR, are not 
applicable to acquisitions under this part 873.
    (b) In planning an acquisition, the contracting officer may 
determine that the number of proposals that would otherwise be included 
in the best value pool is expected to exceed the number at which an 
efficient, timely, and economical competition can be conducted. In 
reaching such a conclusion, the contracting officer may consider such 
factors as the results of market research, historical data from previous 
acquisitions for similar services, and the resources available to 
conduct the source selection. Provided the solicitation notifies 
offerors that the best value pool can be limited for purposes of making 
an efficient, timely, and economical award, the contracting officer may 
limit the number of proposals in the best value pool to the greatest 
number that will permit an efficient competition among the proposals 
offering the greatest likelihood of award. The contracting officer may 
indicate in the solicitation the estimate of the greatest number of 
proposals that will be included in the best value pool. The contracting 
officer may limit the best value pool to a single offeror.
    (c) If the contracting officer determines that an offeror's proposal 
is no longer in the best value pool, the proposal shall no longer be 
considered for award. Written notice of this decision must be provided 
to unsuccessful offerors at the earliest practicable time.

[[Page 272]]



873.115  Proposal revisions.

    (a) Without regard to FAR 15.307, the contracting officer may 
request proposal revisions as often as needed during the proposal 
evaluation process at any time prior to award from vendors remaining in 
the best value pool. Proposal revisions shall be submitted in writing. 
The contracting officer may establish a common cutoff date for receipt 
of proposal revisions. Contracting officers may request best and final 
offers. In any case, contracting officers and acquisition team members 
must safeguard proposals, and revisions thereto, to avoid unfair 
dissemination of an offeror's proposal.
    (b) If an offeror initially included in the best value pool is no 
longer considered to be among those most likely to receive award after 
submission of proposal revisions and subsequent evaluation thereof, the 
offeror may be eliminated from the best value pool without being 
afforded an opportunity to submit further proposal revisions.
    (c) Requesting and/or receiving proposal revisions do not 
necessarily conclude exchanges. However, requests for proposal revisions 
should advise offerors that the Government may make award without 
obtaining further revisions.



873.116  Source selection decision.

    (a) An integrated comparative assessment of proposals should be 
performed before source selection is made. The contracting officer shall 
independently determine which proposal(s) represents the best value, 
consistent with the evaluation information or factors and subfactors in 
the solicitation, and that the prices are fair and reasonable. The 
contracting officer may determine that all proposals should be rejected 
if it is in the best interest of the Government.
    (b) The source selection team, or advisory boards or panels, may 
conduct comparative analysis(es) of proposals and make award 
recommendations, if the contracting officer requests such assistance.
    (c) The source selection decision must be documented in accordance 
with FAR 15.308.



873.117  Award to successful offeror.

    (a) The contracting officer shall award a contract to the successful 
offeror by furnishing the contract or other notice of the award to that 
offeror.
    (b) If a request for proposal (RFP) process was used for the 
solicitation and if award is to be made without exchanges, the 
contracting officer may award a contract without obtaining the offeror's 
signature a second time. The offeror's signature on the offer 
constitutes the offeror's agreement to be bound by the offer. If a 
request for quotation (RFQ) process was used for the solicitation, and 
if the contracting officer determines there is a need to establish a 
binding contract prior to commencement of work, the contracting officer 
should obtain the offeror's acceptance signature on the contract to 
ensure formation of a binding contract.
    (c) If the award document includes information that is different 
than the latest signed offer, both the offeror and the contracting 
officer must sign the contract award.
    (d) When an award is made to an offeror for less than all of the 
items that may be awarded and additional items are being withheld for 
subsequent award, each notice shall state that the Government may make 
subsequent awards on those additional items within the offer acceptance 
period.



873.118  Debriefings.

    Offerors excluded from a request for proposals (RFP) may submit a 
written request for a debriefing to the contracting officer. Without 
regard to FAR 15.505, preaward debriefings may be conducted by the 
contracting officer when determined to be in the best interest of the 
Government. Post-award debriefings shall be conducted in accordance with 
FAR 15.506.

[[Page 273]]



                     CHAPTER 9--DEPARTMENT OF ENERGY




                           (Parts 900 to 999)

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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
901             Federal Acquisition Regulations System......         275
902             Definitions of words and terms..............         276
903             Improper business practices and personal 
                    conflicts of interest...................         276
904             Administrative matters......................         279
                   SUBCHAPTER B--ACQUISITION PLANNING
905             Publicizing contract actions................         286
906             Competition requirements....................         286
907             Acquisition planning........................         287
908             Required sources of supplies and services...         287
909             Contractor qualifications...................         293
911             Describing agency needs.....................         298
912             Acquisition of commercial items.............         299
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
913             Simplified acquisition procedures...........         300
914             Sealed bidding..............................         300
915             Contracting by negotiation..................         301
916             Types of contracts..........................         315
917             Special contracting methods.................         317
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
919             Small business programs.....................         321
922             Application of labor laws to Government 
                    acquisition.............................         325
923             Environment, conservation, occupational 
                    safety, and drug free workplace.........         328
925             Foreign acquisition.........................         332
926             Other socioeconomic programs................         334
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
927             Patents, data, and copyrights...............         338

[[Page 274]]

928             Bonds and insurance.........................         346
931             Contract cost principles and procedures.....         347
932             Contract financing..........................         349
933             Protests, disputes, and appeals.............         353
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
935             Research and development contracting........         355
936             Construction and architect-engineer 
                    contracts...............................         355
937             Service contracting.........................         357
939             Acquisition of information technology.......         357
941             Acquisition of utility services.............         358
                    SUBCHAPTER G--CONTRACT MANAGEMENT
942             Contract administration.....................         359
945             Government property.........................         361
947             Transportation..............................         365
949             Termination of contracts....................         366
950             Extraordinary contractual actions...........         366
951             Use of Government sources by contractors....         369
                     SUBCHAPTER H--CLAUSES AND FORMS
952             Solicitation provisions and contract clauses         371
             SUBCHAPTER I--AGENCY SUPPLEMENTARY REGULATIONS
970             DOE management and operating contracts......         411

[[Page 275]]



                          SUBCHAPTER A_GENERAL





PART 901_FEDERAL ACQUISITION REGULATIONS SYSTEM--Table of Contents




               Subpart 901.1_Purpose, Authority, Issuance

Sec.
901.101 Purpose.
901.102 Authority.
901.103 Applicability.
901.104 Issuance.
901.104-1 Publication and code arrangement.
901.104-2 Arrangement of regulations.
901.104-3 Copies.
901.105 OMB control numbers.

              Subpart 901.3_Agency Acquisition Regulations

901.301-70 Other issuances related to acquisition.

        Subpart 901.6_Contracting Authority and Responsibilities

901.601 General.
901.602-3 Ratification of unauthorized commitments.

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

    Source: 61 FR 41704, Aug. 9, 1996, unless otherwise noted.



               Subpart 901.1_Purpose, Authority, Issuance



901.101  Purpose.

    The Department of Energy Acquisition Regulation (DEAR) in this 
chapter establishes uniform acquisition policies which implement and 
supplement the Federal Acquisition Regulation (FAR).



901.102  Authority.

    The DEAR and amendments thereto are issued by the Procurement 
Executive pursuant to a delegation from the Secretary in accordance with 
the authority of section 644 of the Department of Energy Organization 
Act (42 U.S.C. 7254), section 205(c) of the Federal Property and 
Administrative Services Act of 1949, as amended, (40 U.S.C. 486(c)), and 
other applicable law.



901.103  Applicability.

    The FAR and DEAR apply to all DOE acquisitions of supplies and 
services which obligate appropriated funds unless otherwise specified in 
this chapter.



901.104  Issuance.



901.104-1  Publication and code arrangement.

    (a) The DEAR and its subsequent changes are published in the Federal 
Register, cumulative form in the Code of Federal Regulations, and a 
separate loose-leaf edition.
    (b) The DEAR is issued as chapter 9 of Title 48 of the Code of 
Federal Regulations.



901.104-2  Arrangement of regulations.

    (a) General. The DEAR is divided into the same parts, subparts, 
sections, subsections and paragraphs as is the FAR.
    (b) Numbering. The numbering illustrations at (FAR) 48 CFR 1.104-
2(b) apply to the DEAR, but the DEAR numbering will be preceded with a 9 
or a 90. Material which supplements the FAR will be assigned the numbers 
70 and up.



901.104-3  Copies.

    Copies of the DEAR published in the Federal Register or Code of 
Federal Regulations may be purchased from the Superintendent of 
Documents, Government Printing Office, Washington, DC 20402.



901.105  OMB control numbers.

    The Paperwork Reduction Act of 1980, Public Law 98-511, and the 
Office of Management and Budget's implementing regulations at 5 CFR part 
1320, require that reporting and record keeping requirements affecting 
10 or more members of the public be cleared by that Office. The OMB 
control number for the collection of information under 48 CFR chapter 9 
is 1910-4100, except for the following: Reporting and Recordkeeping 
requirements for Make-or-Buy Plans (see 48 CFR 970.5215-2)--OMB

[[Page 276]]

number 1910-5102; Reporting and Recordkeeping Requirements for Safety 
Management (see 48 CFR 970.5223-1)--OMB number 1910-5103.

[61 FR 41704, Aug. 9, 1996, as amended at 62 FR 34861, June 27, 1997; 65 
FR 81005, Dec. 22, 2000]



              Subpart 901.3_Agency Acquisition Regulations



901.301-70  Other issuances related to acquisition.

    In addition to the FAR and DEAR, there are other issuances which 
deal with acquisition. Among these are the Federal Property Management 
Regulations, the DOE Property Management Regulations, and DOE 
Directives.



        Subpart 901.6_Contracting Authority and Responsibilities



901.601  General.

    (a) Contracting authority vests in the Secretary of Energy. The 
Secretary has delegated this authority to the Procurement Executive. The 
Procurement Executive has redelegated this authority to the Heads of 
Contracting Activities (HCA). These delegations are formal written 
delegations containing dollar limitations and conditions. Each HCA in 
turn makes formal contracting officer appointments within the 
contracting activity.
    (b) The Procurement Executive has been authorized, without power of 
redelegation, to perform the functions set forth at 48 CFR 1.601(b) 
regarding the assignment of contracting functions and responsibilities 
to another agency, and the creation of joint or combined offices with 
another agency to exercise acquisition functions and responsibilities.

[61 FR 41704, Aug. 9, 1996, as amended at 62 FR 53756, Oct. 16, 1997]



901.602-3  Ratification of unauthorized commitments. (DOE 
coverage--paragraph (b))

    (b) (2) The Procurement Executive is authorized to ratify an 
unauthorized commitment.
    (3) The ratification authority of the Procurement Executive in 
paragraph (b)(2) of this section is delegated to the Head of the 
Contracting Activity (HCA) for individual unauthorized commitments of 
$25,000 or under. The ratification authority of the HCA is nondelegable.



PART 902_DEFINITIONS OF WORDS AND TERMS--Table of Contents




    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.



                    Subpart 902.2_Definitions Clause



902.200  Definitions clause.

    As prescribed by FAR subpart 2.2, insert the clause at FAR 52.202-1, 
Definitions, but modify it to limit the definition at paragraph (a) of 
the clause, to encompass only the Secretary, Deputy Secretary, or the 
Under Secretaries of the Department of Energy, and the Chairman, Federal 
Energy Regulatory Commission. The contracting officer shall also add 
paragraphs (h) and (i) or (g) and (h) if Alternate I of the FAR clause 
is used. Paragraph (h) defines ``DOE'' as meaning the United States 
Department of Energy, ``FERC'' as meaning the Federal Energy Regulatory 
Commission, and ``NNSA'' as meaning the National Nuclear Security 
Administration. Paragraph (i) identifies the Senior Procurement 
Executive, DOE, as the Director, Office of Procurement and Assistance 
Management; the Senior Procurement Executive, NNSA, as the Administrator 
for Nuclear Security, NNSA; and the Senior Procurement Executive, FERC, 
as the Chairman, Federal Energy Regulatory Commission.

[67 FR 14870, Mar. 28, 2002]



PART 903_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 903.1_Safeguards

Sec.
903.101 Standards of conduct.
903.101-3 Agency regulations.
903.104-3 Definitions.
903.104-10 Violations or possible violations (DOE coverage--paragraph 
          (a)).

[[Page 277]]

       Subpart 903.2_Contractor Gratuities to Government Personnel

903.203 Reporting suspected violations of the Gratuities clause.
903.204 Treatment of violations.

         Subpart 903.3_Reports of Suspected Antitrust Violations

903.303 Reporting suspected antitrust violations.

                      Subpart 903.4_Contingent Fees

903.408-1 Responsibilities.

             Subpart 903.5_Other Improper Business Practices

903.502 Subcontractor kickbacks.

Subpart 903.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them

903.603 Responsibilities of the contracting officer.

     Subpart 903.9_Whistleblower Protection for Contractor Employees

903.901 Scope.
903.902 Definition.
903.903 Applicability.
903.970 Remedies.
903.971 Contract clause.

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

    Source: 49 FR 11940, Mar. 28, 1984, unless otherwise noted.



                        Subpart 903.1_Safeguards



903.101  Standards of conduct.



903.101-3  Agency regulations.

    Detailed rules applicable to the conduct of DOE employees are set 
forth in 10 CFR part 1010.

[49 FR 11940, Mar. 28, 1984, as amended at 60 FR 47307, Sept. 12, 1995]



903.104-3  Definitions.

    As used in this section and for the purposes of the post-employment 
restrictions at 48 CFR (FAR) 3.104-4(d)--
    Deputy program manager means the individual within DOE who normally 
acts as the program manager in the absence of the program manager, and 
does not mean an individual who occasionally acts for the program 
manager or the deputy program manager.
    Program manager means the individual within DOE who:
    (1) Exercises authority on a day-to-day basis to manage an 
acquisition program--
    (i) For a system attained through the acquisition process; and
    (ii) With one or more contracts, at least one of which has a value 
exceeding $10,000,000; and
    (2) Is generally the person at the lowest organizational level who 
has authority to make technical and budgetary decisions on behalf of 
DOE.
    System means a combination of elements that function together to 
produce the capabilities required to fulfill a mission need, including, 
but not limited to hardware, equipment, software, or any combination 
thereof.

[63 FR 56851, Oct. 23, 1998]



903.104-10  Violations or possible violations (DOE coverage--paragraph (a)).

    (a) Except for Headquarters activities, the individual within DOE 
responsible for fulfilling the requirements of 48 CFR 3.104-10(a) (1) 
and (2) relative to contracting officer conclusions on the impact of a 
violation or possible violation of subsections 27 (a), (b), (c) or (d) 
of the Office of Federal Procurement Policy Act shall be the legal 
counsel assigned direct responsibility for providing legal advice to the 
contracting office making the award or selecting the source. The legal 
counsel is the Chief Counsel for the Operations Offices or the Federal 
Energy Technology Center; the Counsel, or the Chief Counsel, for the 
Support Offices or the Naval Reactors Offices; and the General Counsel 
for the Power Administrations. For Headquarters activities, the 
individual designated to perform the responsibilities in 48 CFR 3.104-
10(a) (1) and (2) regarding questions of disclosure of proprietary or 
source selection information is the Assistant General Counsel for 
Procurement and Financial Assistance. The designated individual for 
other questions regarding 48 CFR 3.104-10(a) (1) and (2) for 
Headquarters activities is the Agency Ethics Official (Designated Agency 
Ethics Official).

[62 FR 53756, Oct. 16, 1997]

[[Page 278]]



       Subpart 903.2_Contractor Gratuities to Government Personnel



903.203  Reporting suspected violations of the Gratuities clause.

    (a) Suspected violations of the Gratuities clause shall be reported 
to the Head of the Contracting Activity (HCA) in writing detailing the 
circumstances. The HCA will evaluate the report and, if the report 
appears to substantiate the allegations, the matter will be referred to 
the Procurement Executive for disposition.

[49 FR 11940, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



903.204  Treatment of violations.

    Apparent violations will be processed in accordance with the 
debarment and suspension rules set forth at Title 10, part 1035, of the 
Code of Federal Regulations.



         Subpart 903.3_Reports of Suspected Antitrust Violations



903.303  Reporting suspected antitrust violations.

    (a) Potential anti-competitive practices, such as described in FAR 
3.301, and antitrust law violations as described in FAR 3.303, evidenced 
in bids or proposals, shall be reported to the Office of General Counsel 
through the Head of the Contracting Activity with a copy to the 
Procurement Executive. The Office of General Counsel will provide 
reports to the Attorney General, as appropriate.

[50 FR 12183, Mar. 27, 1985, as amended at 59 FR 9104, Feb. 25, 1994]



                      Subpart 903.4_Contingent Fees



903.408-1  Responsibilities.

    (b) Each Standard Form 119 completed in connection with a DOE 
contract, together with other relevant information, shall be reviewed by 
Counsel prior to the initiation of appropriate action.



             Subpart 903.5_Other Improper Business Practices



903.502  Subcontractor kickbacks.

    (b) Contracting officers shall report suspected violations of the 
Anti-Kickback Act through the Head of the Contracting Activity, or 
designee, to the Office of General Counsel.



Subpart 903.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them



903.603  Responsibilities of the contracting officer.

    (a) When the needs of the Government cannot be reasonably supplied 
by sources other than employees of the Government or sources which are 
substantially owned or controlled by Government employees, the 
contracting officer, in accordance with FAR 48 CFR 3.602, may submit, 
through the HCA, a request to the Procurement Executive, with 
appropriate justification, for approval of an exception to the 
prohibitions contained in FAR 3.601.

[49 FR 11940, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



     Subpart 903.9_Whistleblower Protection for Contractor Employees

    Source: 81005, Dec. 22, 2000, unless otherwise noted.



903.901  Scope.

    This subpart implements the DOE Contractor Employee Protection 
Program as set forth at 10 CFR part 708. Part 708 establishes criteria 
and procedures for the investigation, hearing, and review of allegations 
from DOE contractor employees of employer reprisal resulting from 
employee disclosure of information to DOE, to Members of Congress, or to 
the contractor; employee participation in proceedings before Congress or 
pursuant to this subpart; or employee refusal to engage in illegal or 
dangerous activities, when such disclosure, participation, or refusal 
pertains to employer practices

[[Page 279]]

which the employee believes to be unsafe; to violate laws, rules, or 
regulations; or to involve fraud, mismanagement, waste, or abuse.



903.902  Definition.

    Contractor, as used in this subpart, has the meaning contained in 10 
CFR 708.2.



903.903  Applicability.

    10 CFR part 708 is applicable to complaints of retaliation filed by 
employees of contractors, and subcontractors, performing work on behalf 
of DOE directly related to DOE-owned or leased facilities, if the 
complaint stems from a disclosure, participation, or refusal described 
in 10 CFR 708.5.



903.970  Remedies.

    (a) Contractors found to have retaliated against an employee in 
reprisal for such disclosure, participation or refusal are required to 
provide relief in accordance with decisions issued under 10 CFR part 
708.
    (b) 10 CFR part 708 provides that for the purposes of the Contract 
Disputes Act (41 U.S.C. 605 and 606), a final decision issued pursuant 
to 10 CFR part 708 shall not be considered to be a claim by the 
Government against a contractor or a decision by the contracting officer 
subject to appeal. However, a contractor's disagreement and refusal to 
comply with a final decision could result in a contracting officer's 
decision to disallow certain costs or to terminate the contract for 
default. In such case, the contractor could file a claim under the 
Disputes clause of the contract regarding the disallowance of cost or 
the termination of the contract.



903.971  Contract clause.

    The contracting officer shall insert the clause at 952.203-70, 
Whistleblower Protection for Contractor Employees, in contracts that 
involve work to be done on behalf of DOE directly related to activities 
at DOE-owned or leased sites.



PART 904_ADMINISTRATIVE MATTERS--Table of Contents




    Subpart 904.4_Safeguarding Classified Information Within Industry

Sec.
904.401 Definitions.
904.402 General.
904.404 Solicitation provision and contract clause. [DOE Coverage--
          Paragraph (d)]

Subpart 904.6 [Reserved]

               Subpart 904.7_Contractor Records Retention

904.702 Applicability.

                      Subpart 904.8_Contract Files

904.803 Contents of contract files.
904.804-1 Closeout by the office administering the contract (DOE 
          Coverage--paragraphs (a) and (b)).
904.805 Disposal of contract files.

                    Subpart 904.70_Facility Clearance

904.7000 Purpose.
904.7001 Applicability.
904.7002 Definitions.
904.7003 Disclosure of foreign ownership, control, or influence.
904.7004 Findings, determination, and contract award or termination.

  Subpart 904.71_Prohibition on Contracting (National Security Program 
                               Contracts)

904.7100 Scope of subpart.
904.7101 Definitions.
904.7102 Waiver by the Secretary.
904.7103 Solicitation provision and contract clause.

                      Subpart 904.72_Public Affairs

904.7200 Purpose.
904.7201 Contract clause.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401 et 
seq.

    Source: 49 FR 11941, Mar. 28, 1984, unless otherwise noted.



    Subpart 904.4_Safeguarding Classified Information Within Industry



904.401  Definitions.

    Access Authorization means an administrative determination that an 
individual is eligible for access to classified information or is 
eligible for access to,

[[Page 280]]

or control over, special nuclear material.
    Classified Information means information that is classified as 
Restricted Data or Formerly Restricted Data under the Atomic Energy Act 
of 1954, as amended, or information determined to require protection 
against unauthorized disclosure under Executive Order 12958, or prior 
Executive Orders, which is identified as National Security Information.
    Facility Clearance means an administrative determination that a 
facility is eligible to access, produce, use or store classified 
information, or special nuclear material.
    Restricted Data means all data concerning the design, manufacture, 
or utilization of atomic weapons; the production of special nuclear 
material; or the use of special nuclear material in the production of 
energy, but does not include data declassified or removed from the 
Restricted Data category pursuant to section 142 of the Atomic Energy 
Act of 1954, as amended (42 U.S.C. 2162).

[67 FR 14875, Mar. 28, 2002]



904.402  General.

    (a) The basis of DOE's industrial security requirements is the 
Atomic Energy Act of 1954, as amended, and Executive Orders 12958 and 
12829.
    (b) DOE security regulations concerning restricted data are codified 
at 10 CFR part 1045.
    (c)(1) Section 234B of the Atomic Energy Act (42 U.S.C. 2282b) 
requires that DOE contracts include a clause that provides for an 
appropriate reduction in the fees or amounts paid to the contractor 
under the contract in the event of a violation by the contractor or any 
contractor employee of any rule, regulation, or order relating to the 
safeguarding or security of Restricted Data or other classified 
information. The clause is required for all DOE prime contracts that 
involve any possibility of contractor access to Restricted Data or other 
classified information. The clause is required to specify various 
degrees of violations and the amount of the reduction attributable to 
each degree of violation. The clause prescribed at 48 CFR 904.404(d)(6) 
(Conditional Payment of Fee or Profit--Safeguarding Restricted Data and 
Other Classified Information) or the clause prescribed at 48 CFR 
923.7002(f) (Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information and Protection of 
Worker Safety and Health) shall be used for this purpose unless the 
clause prescribed at 48 CFR 970.1504-5(c) (Conditional Payment of Fee, 
Profit, and Other Incentives--Facility Management Contracts) is used.
    (2) The clause entitled ``Conditional Payment of Fee or Profit--
Safeguarding Restricted Data and Other Classified Information'' and the 
clause entitled ``Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information and Protection of 
Worker Safety and Health'' provide for reductions of fee or profit that 
is earned by the contractor depending upon the severity of the 
contractor's failure to comply with contract terms or conditions 
relating to the safeguarding of Restricted Data or other classified 
information. When reviewing performance failures that would otherwise 
warrant a reduction of earned fee, the contracting officer must consider 
mitigating factors that may warrant a reduction below the applicable 
range specified in the clause. Some of the mitigating factors that must 
be considered are specified in the clause.
    (3) The contracting officer must obtain the concurrence of the Head 
of the Contracting Activity:
    (i) Prior to effecting any reduction of fee or amounts otherwise 
payable to the contractor in accordance with the terms and conditions of 
the clause entitled ``Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information'' or of the clause 
entitled ``Conditional Payment of Fee or Profit--Safeguarding Restricted 
Data and Other Classified Information and Protection of Worker Safety 
and Health;'' and
    (ii) For determinations that no reduction of fee is warranted for a 
particular performance failure(s) that would otherwise warrant a 
reduction.

[67 FR 14876, Mar. 28, 2002, as amended at 68 FR 68776, Dec. 10, 2003]

[[Page 281]]



904.404  Solicitation provision and contract clause. [DOE Coverage--Paragraph 
(d)]

    (d) The security clauses to be used in DOE contracts are found at 
952.204. They are:
    (1) Security, 952.204-2. This clause is required in contracts and 
subcontracts, the performance of which involves or is likely to involve 
classified information. DOE utilizes the National Industrial Security 
Program but DOE's security authority is derived from the Atomic Energy 
Act which contains specific language not found in other agencies' 
authorities. For this reason, DOE contracts must contain the clause at 
952.204-2 rather than the clause at FAR 52.204-2.
    (2) Classification/Declassification, 952.204-70. This clause is to 
be used in all contracts which involve classified information.
    (3) Sensitive foreign nation controls, 952.204-71. This clause is 
required in unclassified research contracts which may involve making 
unclassified information about nuclear technology available to certain 
sensitive foreign nations. The contractor shall be provided at the time 
of award the listing of nations referenced in DOE N 142.1. (The 
attachment referred to in the clause shall set forth the applicable 
requirements of the DOE regulations on dissemination of unclassified 
published and unpublished technical information to foreign nations.)
    (4) Disclosure of information, 952.204-72. This clause may be used 
in place of the clauses entitled ``Security'' and ``Classification'' in 
contracts with educational institutions for research work performed in 
their own institute facilities that are not likely to produce classified 
information.
    (5) Facility Clearance, 952.204-73. This solicitation provision 
should be used in solicitations expected to result in contracts and 
subcontracts that require employees to possess access authorizations.
    (6) Except as prescribed in 48 CFR 970.1504-5(c), the contracting 
officer shall insert the clause at 48 CFR 952.204-76, Conditional 
Payment of Fee or Profit--Safeguarding Restricted Data and Other 
Classified Information, in all contracts that contain the clause at 48 
CFR 952.204-2, Security, but that do not contain the clause at 48 CFR 
952.250-70, Nuclear hazards indemnity agreement.

[49 FR 11941, Mar. 28, 1984; 49 FR 38949, Oct. 2, 1984, as amended at 54 
FR 27646, June 30, 1989; 59 FR 24358, May 11, 1994; 67 FR 14871, Mar. 
28, 2002; 67 FR 14876, Mar. 28, 2002; 68 FR 68777, Dec. 10, 2003]

Subpart 904.6 [Reserved]



               Subpart 904.7_Contractor Records Retention



904.702  Applicability.

    (b) Contracts containing the Safety and Health clause at 952.223-71, 
the Radiation Protection and Nuclear Criticality clause at 952.223-72, 
or the Nuclear Safety clause at 952.223-74 must also include the 
Preservation of Individual Occupational Radiation Exposure Records 
clause at 952.223-75 which will necessitate retention of records in 
accordance with schedules contained in applicable DOE Directives in the 
records management series, rather than those found at FAR 4.7.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994; 60 
FR 47307, Sept. 12, 1995; 62 FR 2312, Jan. 16, 1997]



                      Subpart 904.8_Contract Files



904.803  Contents of contract files.

    (a) (29) The record copy of the Individual Procurement Action Report 
shall be included in the file section containing procurement management 
reports.



904.804-1  Closeout by the office administering the contract (DOE Coverage--
paragraphs (a) and (b)).

    (a) The Head of the Contracting Activity shall ensure that necessary 
procedures and milestone schedules are established to meet the 
requirements of FAR 4.804-1, and that resources are applied to effect 
the earliest practicable deobligation of excess funds and the timely 
closeout of all contract files which are physically completed or 
otherwise eligible for closeout action.
    (b) Quick closeout procedures for cost reimbursable and other than 
firm fixed

[[Page 282]]

price type contracts are covered under 48 CFR 42.708.

[49 FR 11941, Mar. 28, 1984, as amended at 62 FR 53757, Oct. 16, 1997]



904.805  Disposal of contract files.

    Contract files shall be disposed of in accordance with applicable 
DOE Order 1324.2. (See current version.)

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



                    Subpart 904.70_Facility Clearance



904.7000  Purpose.

    This subpart sets forth the Department of Energy policies and 
procedures regarding Facility Clearances for contractors and 
subcontractors that require access to classified information or special 
nuclear material. A Facility Clearance is based upon a determination 
that satisfactory safeguards and security measures are carried out for 
classified activities being performed at the facility and upon a 
favorable foreign ownership, control, or influence (FOCI) determination.

[67 FR 14876, Mar. 28, 2002]



904.7001  Applicability.

    The provisions of this subpart shall apply to all offeror(s), 
contractors, and subcontractors who will or do have access to classified 
information or a significant quantity of special nuclear material as 
defined in 10 CFR part 710. In this subpart, the term ``contractor'' 
shall also mean subcontractor at any tier, the term ``contract'' shall 
also mean subcontract at any tier, and the term ``special nuclear 
material'' shall also mean significant quantity of special nuclear 
material as defined in 10 CFR part 710.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



904.7002  Definitions.

    Contracting officer means the DOE contracting officer.
    Facility Clearance means an administrative determination that a 
facility is eligible to access, produce, use, or store classified 
information, or special nuclear material.
    Foreign interest means any of the following:
    (1) Foreign government or foreign government agency or 
instrumentality thereof;
    (2) Any form of business enterprise organized under the laws of any 
country other than the United States or its possessions;
    (3) Any form of business enterprise organized or incorporated under 
the laws of the U.S., or a State or other jurisdiction within the U.S. 
which is owned, controlled, or influenced by a foreign government, 
agency, firm, corporation, or person, or
    (4) Any person who is not a U.S. citizen.
    Foreign ownership, control, or influence means the situation where 
the degree of ownership, control, or influence over an offeror(s) or a 
contractor by a foreign interest is such that a reasonable basis exists 
for concluding that compromise of classified information or special 
nuclear material may possibly result.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994; 67 
FR 14876, Mar. 28, 2002]



904.7003  Disclosure of foreign ownership, control, or influence.

    (a) If a contract requires a contractor to have a Facility 
Clearance, DOE must determine whether the contractor is or may be 
subject to foreign ownership, control or influence before a contract can 
be awarded.
    (b) If, during the performance of a contract, the contractor comes 
under FOCI, then the DOE must determine whether a continuation of the 
Facility Clearance may pose an undue risk to the common defense and 
security through the possible compromise of that information or 
material. If the DOE determines that such a threat or potential threat 
exists, the contracting officer shall consider the alternatives of 
negotiating an acceptable method of isolating the foreign interest which 
owns, controls, or influences the contractor or terminating the 
contract.
    (c) It is essential for the DOE to obtain information about FOCI 
which is sufficient to help the Department determine whether award of a 
contract to

[[Page 283]]

a person or firm, or the continued performance of a contract by a person 
or firm, may pose undue risk to the common defense and security. 
Therefore, the provision specified at 952.204-73 shall be included in 
solicitations that involve offeror(s) or contractors that are subject to 
904.7001.
    (d) The contracting officer shall not award or extend any contract 
subject to this subpart, exercise any options under a contract, modify 
any contracts subject to this subpart, or approve or consent to a 
subcontract subject to this subpart unless:
    (1) The contractor provides the information required by the 
solicitation provision at 48 CFR 952.204-73, and
    (2) The contracting officer has made a positive determination in 
accordance with 48 CFR 904.7004.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994; 62 
FR 42073, Aug. 5, 1997; 67 FR 14876, Mar. 28, 2002]



904.7004  Findings, determination, and contract award or termination.

    (a) Based on the information disclosed by the offeror(s) or 
contractor, and after consulting with the DOE Office of Safeguards and 
Security, the contracting officer must determine that award of a 
contract to an offeror(s) or continued performance of a contract by a 
contractor will not pose an undue risk to the common defense and 
security. The contracting officer need not prepare a separate finding 
and determination addressing FOCI; however, the memorandum of 
negotiation shall include a discussion of the applicability of this 
subpart and the resulting determination.
    (b) In those cases where FOCI does exist, and the DOE determines 
that an undue risk to the common defense and security may exist, the 
offeror(s) or contractor shall be requested to propose within a 
prescribed period of time a plan of action to avoid or mitigate the 
foreign influences by isolation of the foreign interest.
    (c) The types of plans that a contractor can propose are: measures 
which provide for physical or organizational separation of the facility 
or organizational component containing the classified information or 
special nuclear material; modification or termination of agreements with 
foreign interests; diversification or reduction of foreign source 
income; assignment of specific security duties and responsibilities to 
board members or special executive level committees; or any other 
actions to negate or reduce FOCI to acceptable levels. The plan of 
action may vary with the type of foreign interest involved, degree of 
ownership, and information involved so that each plan must be negotiated 
on a case by case basis. If the offeror(s) or contractor and the DOE 
cannot negotiate a plan of action that isolates the offeror(s) or 
contractor from FOCI satisfactory to the DOE, then the offeror(s) shall 
not be considered for contract award and affected existing contracts 
with a contractor shall be terminated.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



  Subpart 904.71_Prohibition on Contracting (National Security Program 
                               Contracts)

    Source: 58 FR 59684, Nov. 10, 1993, unless otherwise noted.



904.7100  Scope of subpart.

    This subpart implements section 836 of the Fiscal Year 1993 Defense 
Authorization Act (Pub. L. 102-484) which prohibits the award of a 
Department of Energy contract under the national security program to an 
entity controlled by a foreign government if it is necessary for that 
entity to be given access to information in a proscribed category of 
information in order to perform the contract.

[58 FR 59684, Nov. 10, 1993, as amended at 67 FR 14876, Mar. 28, 2002]



904.7101  Definitions.

    Effectively owned or controlled means that a foreign government or 
an entity controlled by a foreign government has the power, either 
directly or indirectly, whether exercised or exercisable, to control or 
influence the election or appointment of the Offeror's officers, 
directors, partners, regents, trustees, or a majority of the Offeror's 
board of directors by any means, e.g., ownership, contract, or operation 
of law.

[[Page 284]]

    Entity controlled by a foreign government means any domestic or 
foreign organization or corporation that is effectively owned or 
controlled by a foreign government or any individual acting on behalf of 
a foreign government. See 925.7 for a statement of the prohibition.
    Foreign government means any governing body organized and existing 
under the laws of any country other than the United States and its 
possessions and trust territories and any agent or instrumentality of 
that government.
    Proscribed information means--
    (1) Top Secret information;
    (2) Communications Security (COMSEC) information, except classified 
keys used to operate secure telephone units (STU IIIs);
    (3) Restricted Data, as defined in the Atomic Energy Act of 1954, as 
amended;
    (4) Special Access Program (SAP) information; or,
    (5) Sensitive Compartmented Information (SCI).



904.7102  Waiver by the Secretary.

    (a) 10 U.S.C. 2536(b)(1)(A) allows the Secretary of Energy to waive 
the prohibition on the award of contracts set forth in 10 U.S.C. 2536(a) 
if the Secretary determines that a waiver is essential to the national 
security interests of the United States. Any request for a waiver 
regarding award of a contract or execution of a novation agreement shall 
address:
    (1) Identification of the proposed awardee and description of the 
control by a foreign government;
    (2) Description of the procurement and performance requirements;
    (3) Description of why a waiver is essential to the national 
security interests of the United States;
    (4) The availability of other entities to perform the work; and
    (5) A description of alternate means available to satisfy the 
requirement.
    (b) 10 U.S.C. 2536(b)(1)(B) allows the Secretary of Energy to waive 
the prohibition on the award of contracts set forth in 10 U.S.C. 2536(a) 
for environmental restoration, remediation or waste management contracts 
at a DOE facility if the Secretary determines that a waiver will advance 
the environmental restoration, remediation or waste management 
objectives of DOE; will not harm the national security interests of the 
United States; and may be authorized because the entity to which the 
contract is to be awarded is controlled by a foreign government with 
which the Secretary is authorized to exchange Restricted Data under 
Section 144.c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)). Any 
request for such a waiver regarding award of a contract or execution of 
a novation agreement shall address:
    (1) Identification of the proposed awardee and description of the 
control by a foreign government;
    (2) Description of the procurement and performance requirements;
    (3) A description of how the Department's environmental restoration, 
remediation, or waste management objectives will be advanced;
    (4) A description of why a waiver will not harm the national 
security interests of the United States;
    (5) The availability of other entities to perform the work;
    (6) A description of alternate means available to satisfy the 
requirement; and
    (7) Evidence that the entity to which a contract is to be awarded is 
controlled by a foreign government with which the Secretary is 
authorized to exchange Restricted Data under Section 144.c. of the 
Atomic Energy Act of 1954 (42 U.S.C. 2164(c)).
    (c) Any request for a waiver under paragraph (a) or (b) of this 
section shall be forwarded by the Head of the Contracting Activity to 
the Office of Contract Management within the Headquarters procurement 
organization.
    (d) If the Secretary decides to grant a waiver for an environmental 
restoration, remediation, or waste management contract, the Secretary 
shall notify Congress of this decision. The contract may be awarded or 
the novation agreement executed only after the end of the 45-day period 
beginning on the date notification is received by the Senate Committee 
on Armed Services and the House Committee on National Security.
    (e) Any request for a waiver under this subpart shall be accompanied 
by

[[Page 285]]

the information required by DEAR 952.204-73 that has been developed by 
the Safeguards and Security Lead Responsible Office at the contracting 
activity.

[67 FR 14876, Mar. 28, 2002]



904.7103  Solicitation provision and contract clause.

    (a) Any solicitation, including those under simplified acquisition 
procedures, for a contract under the national security program which 
will require acess to proscribed information shall include the provision 
at 48 CFR 952.204-73.
    (b) Any contract, including those awarded under simplified 
acquisition procedures, under the national security program which 
require access to proscribed information to enable performance, shall 
include the clause at 48 CFR 952.204-2.

[58 FR 59684, Nov. 10, 1993, as amended at 61 FR 21976, May 13, 1996; 62 
FR 42074, Aug. 5, 1997; 67 FR 14877, Mar. 28, 2002]



                      Subpart 904.72_Public Affairs

    Source: 65 FR 81006, Dec. 22, 2000, unless otherwise noted.



904.7200  Purpose.

    It is the policy of the Department of Energy to provide to the 
public and the news media, accurate and timely unclassified information 
on Departmental policies, programs, and activities. The Department's 
contractors share the responsibility for releasing unclassified 
information related to efforts under their contracts and must coordinate 
the release of unclassified information with the cognizant contracting 
officer and appropriate DOE Public Affairs personnel.



904.7201  Contract clause.

    The contracting officer shall insert the clause at 952.204-75 in 
solicitations and contracts that require the contractor to release 
unclassified information related to efforts under its contract regarding 
DOE policies, programs, and activities.

[[Page 286]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 905_PUBLICIZING CONTRACT ACTIONS--Table of Contents




                    Subpart 905.5_Paid Advertisements

Sec.
905.502 Authority.

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



                    Subpart 905.5_Paid Advertisements



905.502  Authority.

    (a) Newspapers. When it is deemed necessary to use paid 
advertisements in newspapers and trade journals, written authority for 
such publication shall be obtained from the Head of the Contracting 
Activity or designee.

[49 FR 11943, Mar. 28, 1984]



PART 906_COMPETITION REQUIREMENTS--Table of Contents




                 Subpart 906.1_Full and Open Competition

Sec.
906.102 Use of competitive procedures.

   Subpart 906.2_Full and Open Competition After Exclusion of Sources

906.202 Establishing or maintaining alternative sources.

           Subpart 906.3_Other Than Full and Open Competition

906.304 Approval of the justification.

                   Subpart 906.5_Competition Advocates

906.501 Requirement.

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

    Source: 50 FR 12183, Mar. 27, 1985, unless otherwise noted.



                 Subpart 906.1_Full and Open Competition



906.102  Use of competitive procedures.

    (d) Other competitive procedures.
    (1) Professional architect-engineer services shall be negotiated in 
accordance with subpart 936.6 and FAR Subpart 36.6.
    (4) Competitive selection of research proposals for award received 
in response to a Program Research and Development Announcement (See 
subpart 917.73 and part 935).
    (5) Competitive selection for award of proposals offered in response 
to program opportunity notices (See subpart 917.72).



   Subpart 906.2_Full and Open Competition After Exclusion of Sources



906.202  Establishing or maintaining alternative sources.

    (b)(1) Every proposed contract action under the authority of FAR 
6.202(a) shall be supported by a determination and finding (D&F) signed 
by the Procurement Executive.



           Subpart 906.3_Other Than Full and Open Competition



906.304  Approval of the justification.

    (c) Class justifications within the delegated authority of a Head of 
the Contracting Activity may be approved for:
    (1) Contracts for electric power or energy, gas (natural or 
manufactured), water, or other utility services when such services are 
available from only one source;
    (2) Contracts under the authority cited in FAR 6.302-4 or 6.302-5; 
or
    (3) Contracts for educational services from nonprofit institutions. 
Class justifications for classes of actions that may exceed $10,000,000 
require the approval of the Procurement Executive.



                   Subpart 906.5_Competition Advocates



906.501  Requirement.

    The Secretary of Energy has delegated the authority for appointment 
of the agency and contracting activity competition advocates to the 
Procurement Executive. The Procurement Executive has delegated authority 
to the Head of the Contracting Activity to appoint contracting activity 
competition

[[Page 287]]

advocates. Procedural guidance is provided in internal DOE Directives.



PART 907_ACQUISITION PLANNING--Table of Contents




         Subpart 907.3_Contractor Versus Government Performance

Sec.
907.307 Appeals.

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

    Source: 49 FR 11944, Mar. 28, 1984, unless otherwise noted.



         Subpart 907.3_Contractor Versus Government Performance



907.307  Appeals.

    An appeal of a decision to convert to contract or to continue in-
house performance may be made by an affected party. Appeals shall be 
made in writing, be based only on specific alleged material deviation 
(or deviations),from OMB Circular A-76, and be supported by appropriate 
documentation. Appeals must be delivered within 15 working days of the 
announced decision, to the contracting officer. The contracting officer 
shall process any such appeal in accordance with internal Departmental 
procedures.



PART 908_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




       Subpart 908.8_Acquisition of Printing and Related Supplies

Sec.
908.802 Policy.

                Subpart 908.11_Leasing of Motor Vehicles

908.1102 Presolicitation requirements.
908.1104 Contract clauses.
908.1170 Leasing of fuel-efficient vehicles.

               Subpart 908.71_Acquisition of Special Items

908.7100 Scope of subpart.
908.7101 Motor vehicles.
908.7101-1 Scope of section.
908.7101-2 Consolidated acquisition of new vehicles by General Services 
          Administration.
908.7101-3 Direct acquisition.
908.7101-4 Replacement of motor vehicles.
908.7101-5 Used vehicles.
908.7101-6 Acquisition of fuel-efficient vehicles.
908.7101-7 Government license tags.
908.7102 Aircraft.
908.7103 Office machines.
908.7104 Office furniture and furnishings.
908.7105 Filing cabinets.
908.7106 Security cabinets.
908.7107 Alcohol.
908.7108 Helium.
908.7109 Fuels and packaged petroleum products.
908.7110 Coal.
908.7111 Arms and ammunition.
908.7112 Materials handling equipment replacement standards.
908.7113 Calibration services.
908.7114 Wiretapping and eavesdropping equipment.
908.7115 Forms.
908.7116 Electronic data processing tape.
908.7117 Tabulating machine cards.
908.7118 Rental of post office boxes.
908.7119-908.7120 [Reserved]
908.7121 Special materials.

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

    Source: 49 FR 11945, Mar. 28, 1984, unless otherwise noted.



       Subpart 908.8_Acquisition of Printing and Related Supplies



908.802  Policy. (DOE coverage--paragraph (b))

    (b) Inclusion of printing requirements (limited exceptions are set 
forth in paragraphs 35-2 through 35-4 of the Government Printing and 
Binding Regulations) in contracts for supplies and services is 
prohibited unless specifically approved by the Director, Office of 
Administrative Services, Headquarters. Contracting officers shall insert 
the clause at 48 CFR 952.208-70.

[61 FR 41705, Aug. 9, 1996]



                Subpart 908.11_Leasing of Motor Vehicles

    Source: 61 FR 41705, Aug. 9, 1996, unless otherwise noted.



908.1102  Presolicitation requirements. (DOE coverage--paragraph (a))

    (a)(4) Commercial vehicle lease sources may be used only when the 
General Services Administration (GSA) has advised that it cannot furnish 
the vehicle(s) through the Interagency

[[Page 288]]

Motor Pool System and it has been determined that the vehicle(s) are not 
available through the GSA Consolidated Leasing Program.



908.1104  Contract clauses. (DOE coverage--paragraph (e))

    (e) The clause at 48 CFR 952.208-7, Tagging of Leased Vehicles, 
shall be inserted whenever a vehicle(s) is to be leased over 60 days, 
except for those vehicles exempted by (FPMR) 41 CFR 101-38.6.



908.1170  Leasing of fuel-efficient vehicles.

    (a) All sedans and station wagons and certain types of light trucks, 
as specified by GSA, that are acquired by lease for 60 continuous days 
or more for official use by DOE or its authorized contractors, are 
subject to the requirements of the Energy Policy and Conservation Act of 
1975 (EPCA), Public Law 94-163 and of Executive Order 12003 and 
subsequent implementing regulations.
    (b) Leased vehicles will meet the miles-per-gallon criteria of, and 
be incorporated in, the approved plan of the fiscal year in which leases 
are initiated, reviewed, extended, or increased in scope. Vehicle leases 
will specify the vehicle model type to be provided.



               Subpart 908.71_Acquisition of Special Items



908.7100  Scope of subpart.

    This subpart sets forth requirements and procedures for the 
acquisition of special items by DOE and contractors authorized to use 
special sources of supply to the extent indicated herein.



908.7101  Motor vehicles.



908.7101-1  Scope of section.

    Acquisitions by purchase of motor vehicles shall be in accordance 
with this section.



908.7101-2  Consolidated acquisition of new vehicles by General Services 
Administration.

    (a) New vehicles shall be procured in accordance with FPMR 41 CFR 
101-25.304, 101-26.501, and 101-38.13, and DOE-PMR 41 CFR 109-25.304, 
109-38.13, and 109-38.51.
    (b) Orders for all motor vehicles shall be submitted on GSA Form 
1781, Motor Vehicle Requisition--Delivery Order--Invoice, in accordance 
with FPMR 41 CFR 101-26.501. Requisitions for sedans, station wagons, 
and certain light trucks as specified by GSA, should contain a 
certification that the acquisition is in conformance with Pub. L. 94-
163, and Executive Order 12003 and 12375 and subsequent implementations.
    (c) The schedule of dates for submission of orders is contained in 
FPMR 41 CFR 101-26.501-4. The Heads of Contracting Activities shall 
consolidate and submit their requirements for passenger automobiles 
early in the fiscal year. Requisitions for sedans, station wagons and 
certain types of light trucks shall be submitted through Headquarters as 
outlined in 908.7101-6. Requisitions for all other types of vehicles 
shall be submitted directly to GSA.

[49 FR 11945, Mar. 28, 1984; 49 FR 38949, Oct. 2, 1984, as amended at 59 
FR 9104, Feb. 25, 1994]



908.7101-3  Direct acquisition.

    Vehicles may be acquired by DOE activities directly rather than 
through GSA when a waiver has been granted by GSA. A copy of the 
activity's request to GSA for a waiver shall be forwarded to the 
Director, Office of Property Management, within the Headquarters 
procurement organization. In those cases involving general purpose 
vehicles where GSA refuses to grant a waiver and where it is believed 
that acquisition through GSA would adversely affect or otherwise impair 
the program, authority for direct acquisition shall be obtained from the 
above-mentioned Headquarters official, prior to acquisition. In the 
acquisition of special purpose vehicles for use by DOE and its 
authorized contractors, the Head of the Contracting Activity may 
authorize direct purchases. The purchase price for sedans and station 
wagons, shall not exceed any statutory limitation in effect at the time 
the acquisition is

[[Page 289]]

made. (See DOE-PMR 41 CFR 109-38.5102-4).

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984, as amended at 59 
FR 9104, Feb. 25, 1994]



908.7101-4  Replacement of motor vehicles.

    (a) The replacement of motor vehicles shall be in accordance with 
the replacement standards prescribed in FPMR 41 CFR 101-38.9 and DOE-PMR 
41 CFR 109-38.9.
    (b) The Heads of Contracting Activities may arrange to sell, as 
exchange sales, used motor vehicles being replaced and to apply the 
proceeds to the purchase of similar new vehicles. However, in the event 
personnel are not available to make such sales, or it is in the best 
interest of the DOE office, GSA may be requested to sell the used 
vehicles.

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]



908.7101-5  Used vehicles.

    Normally, DOE does not purchase or authorize contractors to purchase 
used vehicles. However, the Heads of Contracting Activities may 
authorize the purchase of used vehicles where justified by special 
circumstances; e.g., when new vehicles are in short supply, the vehicles 
are to be used for experimental or test purposes, or the vehicles are 
acquired from exchange sale. In accordance with DOE-PMR 41 CFR 109-
38.5102, the statutory passenger vehicle allocation requirements for DOE 
shall apply to any purchase of used vehicles except in the case of 
vehicles to be used exclusively for experimental or test purposes.

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984, as amended at 59 
FR 9104, Feb. 25, 1994]



908.7101-6  Acquisition of fuel-efficient vehicles.

    (a) All purchases of sedans and station wagons, and certain types of 
light trucks as specified by GSA, are subject to the requirements of the 
Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94-163, and 
of Executive Orders 12003 and 12375 and subsequent implementing 
regulations. Accordingly, the Director of Administration and the Heads 
of Contracting Activities will submit annually to the Director, Office 
of Property Management, within the Headquarters procurement 
organization, for approval, a forecast of plans for the purchase of such 
vehicles during the fiscal year. Such forecast shall be submitted so as 
to arrive at Headquarters on or before December 1 of each year. 
Additionally, the original and 2 copies of requisitions (GSA form 1781) 
for purchase of such vehicles shall also be forwarded to the above 
official for review and certification/approval prior to submission to 
GSA. All such documentation will be reviewed by this official and a 
determination made as to conformance with applicable annual forecasts 
and pertinent public laws and their implementations. (See DOE-PMR 41 CFR 
109-38.13.)
    (b) Sedans, station wagons, and light trucks requisitioned according 
to an approved forecast, but not contracted for by GSA until the 
subsequent fiscal year, will be included in the acquisition plan for the 
miles-per-gallon criteria of the year in which GSA signs the purchase 
contract along with the new vehicles planned for acquisition that year.

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984, as amended at 59 
FR 9104, Feb. 25, 1994]



908.7101-7  Government license tags.

    (a) Government license tags shall be procured and assignments 
recorded by DOE offices in accordance with FPMR 41 CFR 101-38.303.
    (b) The letter ``E'' has been designated as the prefix symbol for 
all DOE official license tags. Assignments of specific ``blocks'' of tag 
numbers and the maintenance of tag assignment records, are performed by 
the Director, Office of Property Management, within the Headquarters 
procurement organization. Assignments of additional ``blocks'' of tag 
numbers will be made upon receipt of written requests from field 
offices.
    (c) Special license tags for security purposes shall be purchased in 
accordance with state and local laws, regulations, and procedures.
    (d) In the District of Columbia, official Government tags shall be 
obtained

[[Page 290]]

from the Department of Transportation, Motor Vehicles Services Branch, 
District of Columbia, for all motor vehicles (except vehicles exempt for 
security purposes) based or housed in the District.
    (e) See DOE-PMR 41 CFR 109-38.3 and 109-38.6 for additional 
guidance.

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984, as amended at 59 
FR 9104, Feb. 25, 1994]



908.7102  Aircraft.

    Acquisition of aircraft shall be in accordance with DOE-PMR 41 CFR 
109-38.5205.



908.7103  Office machines.

    Acquisitions of office machines by DOE offices and its authorized 
contractors shall be in accordance with FPMR 41 CFR 101-25.104, 101-
25.302, 101-25.302-3, 101-25.302-4, and 101-25.302-6, and 101-25.403, 
and DOE-PMR 41 CFR 109-25.302, 109-25.302-3, and 109-25.4.



908.7104  Office furniture and furnishings.

    Acquisitions of office furniture and furnishings by DOE offices 
shall be in accordance with FPMR 41 CFR 101-25.104, 101-25.302, 101-
25.302-1, 101-25.302-5, 101-25.302-7, and 101-25.302-8, 101-25.404 and 
101-26.505, and DOE-PMR 41 CFR 109-25.302, 109-25.302-1, and 109-25.350.



908.7105  Filing cabinets.

    Acquisitions of filing cabinets shall be in accordance with FPMR 41 
CFR 101-26.308 and 101-25.302-2 and DOE-PMR 41 CFR 109-25.302-2.

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984]



908.7106  Security cabinets.

    (a) Acquisitions of security cabinets shall be in accordance with 
FPMR 41 CFR 101-26.507 and the ``prerequisites to ordering'' criteria 
contained in FPMR 41 CFR 101-25.302-2 and DOE-PMR 41 CFR 109-25.302-2.
    (b) Fixed-price prime contractors and lower tier subcontractors may 
use GSA acquisition sources for security cabinets in accordance with 
FPMR 41 CFR 101-26.407 and FAR 51.

[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984]



908.7107  Alcohol.

    (a) This section covers (1) Bureau of Alcohol, Tobacco and Firearms, 
(ATF), Treasury Department, alcohol regulations applicable to DOE, (2) 
delegations of authority to submit applications to purchase tax-free 
alcohol or specially denatured alcohol, and (3) purchases of alcohol by 
DOE or authorized contractors. To the fullest extent practicable, 
alcohol for use by DOE or its cost-type contractors shall be procured on 
a tax-free basis.
    (b) ATF regulations relating to the acquisition and use of alcohol 
free of tax, by Government agencies, are set forth in 26 CFR 213.141-
213.146. Copies of excerpts from these regulations may be secured from 
the Bureau of Alcohol, Tobacco and Firearms, Department of Treasury, 
Washington, DC 20226. These regulations shall be followed in the 
acquisition of alcohol.
    (c) ATF Form 1444/1486, ``Tax Free Spirits or Specially Denatured 
Spirits for Use of United States,'' shall be used for acquisitions of 
specially denatured alcohol and ethyl alcohol. Section I of the form is 
the application for permission to acquire and Section II is the permit. 
If acquisition from more than one warehouse is desirable, separate 
applications must be made for withdrawal from each warehouse. When 
permits are no longer required, they should be forwarded to the Bureau 
of Alcohol, Tobacco and Firearms for cancellation. Alcohol procured by 
use of the ATF form referred to in this subsection shall be used 
exclusively on DOE work.
    (d) The Procurement Executive has been authorized to sign and 
delegate to others authority to sign applications under Bureau of 
Alcohol, Tobacco and Firearms regulations relating to the acquisition 
and use of alcohol free of tax. Specific DOE personnel have been 
delegated authority to execute Part I of Form 1444/1486 by letters to 
the Director, Bureau of Alcohol, Tobacco and Firearms without power of 
redelegation. Copies of such letters have been

[[Page 291]]

furnished to field offices. Only the individuals so authorized shall 
execute Section I of these forms. Requests by field offices for new 
authorizations or changes to existing authorizations shall be submitted 
by letter to the Procurement Executive.
    (e) Applications on the ATF Form 1444/1486 shall be executed in 
duplicate by an authorized DOE official and mailed directly to the 
address on the application. Only one permit will be provided to each 
field organization. Due to the numerous locations managed by field 
operations offices, the exact shipping address need not be shown in 
block 3 of the form. Shipments, however, must be addressed to the 
``Department of Energy at various locations within the United States''. 
The ATF will assign the application a permit number and return it to the 
requestor. Distribution of certified copies shall be controlled and each 
holder of a certified copy recorded.
    (f) Annually, the Bureau of Alcohol, Tobacco and Firearms publishes 
printed lists of Distilled Spirits Plants, Bonded Warehouses and 
Denaturing Plants Authorized to Operate. Copies of these lists and 
supplies of Form 1444/1486 may be secured by written request to the 
Director, Bureau of Alcohol, Tobacco and Firearms, Special Operations 
Branch, Washington, DC 20226.
    (g) A signed copy of the permit shall accompany the original 
purchase order issued to the plant or warehouse, where it shall be 
retained or returned with the shipment. Subsequent orders shall refer to 
the permit on file in the plant or warehouse if it was retained.
    (h) When alcohol is shipped, the shipper prepares the required form 
as specified by Bureau of Alcohol, Tobacco and Firearms regulations and 
forwards them to the consignee. Upon receipt of the receiving report 
covering the shipment, the officer who signed the purchase order shall 
execute the certificate of receipt and forward it to the appropriate 
Regional Director, Bureau of Alcohol, Tobacco and Firearms. The carrier 
transporting the alcohol shall also be given a receipt as specified by 
Bureau of Alcohol, Tobacco and Firearms regulations.
    (i) Abandoned and forfeited alcohol which has come into the custody 
or control of a Federal agency may be obtained by following the 
procedure set forth in FPMR 41 CFR 101-48.1

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



908.7108  Helium.

    (a) Acquisitions of helium by DOE and its authorized contractors 
shall be in accordance with this section.
    (b) The Helium Act (Pub. L. 86-777, as amended (50 U.S.C. 167(d)) 
provides that, to the extent that supplies are readily available, 
whether in gaseous or liquid form, DOE shall purchase all major 
requirements of helium from the Secretary of Interior, Bureau of Mines, 
or from the Bureau of Mines distribution contractors eligible to sell 
Bureau of Mines helium to Federal agencies and their users in accordance 
with 30 CFR part 602.
    (c)(1) Purchases may be made directly from the Bureau of Mines by 
forwarding a purchase order in duplicate to: Bureau of Mines, Division 
of Helium Operations, 1100 South Fillmore Street, Amarillo, Texas 79101.
    (2) Purchases may be made from those commercial firms listed in the 
Bureau of Mines as eligible to sell helium to Federal users.
    (i) The purchase document shall contain the following statement: 
``Helium furnished under this contract shall be Bureau of Mines 
Helium.''
    (ii) A copy of each acquisition document shall be furnished to the 
address in paragraph (c)(1) of this section.

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



908.7109  Fuels and packaged petroleum products.

    Acquisitions of fuel and packaged petroleum products by DOE offices 
shall be in accordance with FPMR 41 CFR 101-26.602. When contractors are 
authorized, consistent with 951, to acquire such products from Defense 
sources, they shall do so in accordance with FPMR 41 CFR 101-26.602.



908.7110  Coal.

    DOE offices and authorized contractors may participate in the 
Defense Fuel Supply Center (DFSC) coal contracting program for carload 
or larger

[[Page 292]]

lots. If participation is desired, estimates shall be submitted to DFSC 
in accordance with FPMR 41 CFR 101-26.602.



908.7111  Arms and ammunition.

    Pursuant to 10 U.S.C. 4655, the Secretary of the Army is authorized 
to furnish arms, suitable accouterments for use therewith, and 
ammunition for the protection of public money and property.
    (a) The Department of the Army has granted clearance for Federal 
agencies to procure, without further reference to or clearance from that 
Department, all arms and ammunition of types which are not peculiar to 
the military services, and which are readily procurable in the civilian 
market.
    (b) Acquisition of arms and ammunition readily procurable in the 
civilian market shall be made in accordance with regular acquisition 
procedures.
    (c) Acquisition of arms and ammunition which are peculiar to the 
military services shall be made by submission of order form to the 
Commanding General, Headquarters, U.S. Army Material Development and 
Readiness Command, 5001 Eisenhower Avenue, Alexandria, VA 22333.

[49 FR 11945, Mar. 28, 1984, as amended at 49 FR 38950, Oct. 2, 1984]



908.7112  Materials handling equipment replacement standards.

    Materials handling equipment shall be purchased for replacement 
purposes in accordance with the standards in FPMR 41 CFR 101-25.405 and 
DOE-PMR 41 CFR 109-25.4. The Heads of Contracting Activities are 
authorized to replace an item earlier than the date specified in such 
standards under unusual circumstances. A written justification shall be 
placed in the purchase file.

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



908.7113  Calibration services.

    Orders for calibration services may be placed with the National 
Bureau of Standards, Washington, DC 20234, by either DOE acquisition 
offices or its authorized contractors. Copies of the letters authorizing 
contractors to order calibration services on behalf of DOE shall be sent 
to the Bureau of Standards, Attention: ``Administrative Services 
Division.''



908.7114  Wiretapping and eavesdropping equipment.

    Acquisition by DOE offices and contractors of devices primarily 
designed to be used surreptitiously to overhear or record conversations 
is prohibited.



908.7115  Forms.

    (a) DOE forms shall be obtained by DOE offices in accordance with 
DOE Order 1322.2, (See current version.). Cost-type contractors shall 
obtain DOE forms through the DOE contracting officer.
    (b) Standard, optional, and certain other agency forms as listed in 
the GSA Supply Catalog will be obtained by DOE offices in accordance 
with FPMR 41 CFR 101-26.302.
    (c) Marginally punched continuous forms shall be obtained in 
accordance with FPMR 41 CFR 101-26.703.

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



908.7116  Electronic data processing tape.

    (a) Acquisitions of electronic data processing tape by DOE offices 
shall be in accordance with FPMR 41 CFR 101-26.508.
    (b) Acquisitions of electronic data processing tape by authorized 
contractors shall be in accordance with FPMR 41 CFR 101-26.508-1. 
However, if adequate justification exists, the Heads of Contracting 
Activities may authorize contractors to obtain their tape from other 
sources. When such an authorization is granted, a copy of the 
authorization and justification shall be retained in the contract file.

[49 FR 11945, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



908.7117  Tabulating machine cards.

    DOE offices shall acquire tabulating machine cards in accordance 
with FPMR 41 CFR 101-26.509.



908.7118  Rental of post office boxes.

    DOE offices and authorized contractors may rent post office boxes on 
an

[[Page 293]]

annual basis, or for shorter periods by quarters, where necessary. 
Payments for annual rentals are to be made in advance at the beginning 
of the fiscal year, and for periods of less than a year, either in 
advance for the whole period or at the beginning of each quarter in 
which the box is to be used.



908.7119-908.7120  [Reserved]



908.7121  Special materials.

    This section covers the purchase of materials peculiar to the DOE 
program. While purchases of these materials are unclassified, the 
specific quantities, destination or use may be classified. See 
appropriate sections of the Classification Guide. Contracting activities 
shall require authorized contractors to obtain the special materials 
identified in the following subsections in accordance with the 
procedures stated therein.
    (a) Heavy water. The Senior Program Official or designee controls 
the acquisition and production of heavy water for a given program. 
Request for orders shall be placed directly with the cognizant Senior 
Program Official or designee.
    (b) Precious metals. The DOE Oak Ridge Operations Office is 
responsible for maintaining the DOE supply of precious metals. These 
metals are platinum, palladium, iridium, osmium, rhodium, ruthenium, 
gold and silver. The DOE Oak Ridge Operations Office has assigned 
management of these metals to Martin Marietta Energy Systems, Inc., 
MS8207, P.O. Box 2009, Oak Ridge, TN 37831. DOE offices and authorized 
contractors shall coordinate with the operating contractor regarding the 
availability of the above metals prior to the purchase of these metals 
on the open market.
    (c) Lithium. Lithium is available at no cost other than normal 
packing, handling, and shipping charges from Oak Ridge. The excess 
quantities at Oak Ridge are to be considered as the first source of 
supply prior to procurement of lithium compounds from any other source.

[54 FR 27646, June 30, 1989, as amended at 59 FR 9105, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997]



PART 909_CONTRACTOR QUALIFICATIONS--Table of Contents




            Subpart 909.1_Responsible Prospective Contractors

Sec.
909.104-1 General Standards.
909.104-3 Application of standards.

         Subpart 909.4_Debarment, Suspension, and Ineligibility

909.400 Scope of subpart.
909.401 Applicability.
909.403 Definitions.
909.405 Effect of listing.
909.406 Debarment.
909.406-2 Causes for debarment.
909.406-3 Procedures.
909.406-6 Requests for reconsideration of debarment.
909.407-2 Causes for suspension.
909.407-3 Procedures.

    Subpart 909.5_Organizational and Consultant Conflicts of Interest

909.503 Waiver.
909.504 Contracting Officer's Responsibility.
909.507 Solicitation provisions and contract clause.
909.507-1 Solicitation provisions.
909.507-2 Contract Clause.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 11949, Mar. 28, 1984, unless otherwise noted.



            Subpart 909.1_Responsible Prospective Contractors



909.104-1  General Standards.

    (h) For solicitations for contract work subject to the provisions of 
10 CFR part 707, Workplace Substance Abuse Programs at DOE sites, the 
prospective contractor must agree, in accordancewith 48 CFR 970.5223-3., 
Agreement Regarding Workplace Substance Abuse Programs at DOE Sites, to 
provide the contracting officer with its written workplace substance 
abuse program in order to be determined responsible and, thus, eligible 
to receive the contract award.

[57 FR 32675, July 22, 1992, as amended at 62 FR 42074, Aug. 5, 1997; 65 
FR 81006, Dec. 22, 2000]

[[Page 294]]



909.104-3  Application of standards. (DOE coverage-paragraph (e))

    (e) DOE may select an entity which was newly created to perform the 
prospective contract, including, but not limited to, a joint venture or 
other similarly binding corporate partnership. In such instances when 
making the determination of responsibility pursuant to 48 CFR 9.103, the 
contracting officer may evaluate the financial resources of other 
entities only to the extent that those entities are legally bound, 
jointly and severally if more than one, by means of a performance 
guarantee or other equivalent enforceable commitment to supply the 
necessary resources to the prospective contractor and to assume all 
contractual obligations of the prospective contractor. The guaranteeing 
corporate entity(ies) must be found to have sufficient resources in 
order to satisfy its guarantee.

[64 FR 16651, Apr. 6, 1999]



         Subpart 909.4_Debarment, Suspension, and Ineligibility

    Source: 61 FR 39857, July 31, 1996, unless otherwise noted.



909.400  Scope of subpart.

    This subpart--
    (a) Prescribes policies and procedures governing the debarment and 
suspension of organizations and individuals from participating in 
Department of Energy (DOE) contracts, procurement sales contracts, and 
real property purchase agreements, and from participating in DOE 
approved subcontracts and subagreements.
    (b) Sets forth the causes, procedures, and requirements for 
determining the scope, duration, and effect of DOE debarment and 
suspension actions; and
    (c) Implements and supplements FAR subpart 9.4 with respect to the 
exclusion of organizations and individuals from procurement contracting 
and Government approved subcontracting.



909.401  Applicability.

    The provisions of this subpart apply to all procurement debarment 
and suspension actions initiated by DOE on or after the effective date 
of this subpart. Nonprocurement debarment and suspension rules are 
codified in 10 CFR part 1036.



909.403  Definitions.

    In addition to the definitions set forth at FAR 9.403, the following 
definitions apply to this subpart:
    Debarring Official. The Debarring Official for both DOE and NNSA is 
the Director, Office of Procurement and Assistance Management, DOE, or 
designee.
    Suspending Official. The Suspending Official for both DOE and NNSA 
is the Director, Office of Procurement and Assistance Management, DOE, 
or designee.

[67 FR 14871, Mar. 28, 2002]



909.406  Debarment.



909.406-2  Causes for debarment. (DOE coverage--paragraphs (c) and (d))

    (c) The Debarring Official may debar a contractor for any other 
cause of so serious or compelling a nature that it affects the present 
responsibility of a DOE contractor. Such cause may include but is not 
limited to:
    (1) Commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a private contract or 
subcontract; and
    (2) Inexcusable, prolonged, or repeated failure to pay a debt 
(including disallowed costs and overpayments) owed to DOE, provided the 
contractor has been notified of the determination of indebtedness, and 
further provided that the time for initiating any administrative or 
legal action to oppose or appeal the determination of indebtedness has 
expired or that such action, if initiated, has been concluded.
    (d) The Debarring Official may debar a contractor:
    (1) On the basis that an individual or organization is an affiliate 
of a debarred contractor, subject to the requirements of FAR 9.406-1(b) 
and 9.406-3(c);
    (2) For failure to observe the material provisions of a voluntary 
exclusion (see 10 CFR 1036.315 for discussion of voluntary exclusion).

[[Page 295]]



909.406-3  Procedures. (DOE coverage--paragraphs (a), (b) and (d))

    (a) Investigation and referral. (1) Offices responsible for the 
award and administration of contracts are responsible for reporting to 
both the Deputy Assistant Secretary for Procurement and Assistance 
Management and the DOE Inspector General information about possible 
fraud, waste, abuse, or other wrongdoing which may constitute or 
contribute to a cause(s) for debarment under this subpart. Circumstances 
that involve possible criminal or fraudulent activities must be reported 
to the Office of the Inspector General in accordance with 10 CFR part 
1010, Conduct of Employees, Sec. 1010.217(b), Cooperation with the 
Inspector General.
    (2) At a minimum, referrals for consideration of debarment action 
should be in writing and should include the following information:
    (i) The recommendation and rationale for the referral;
    (ii) A statement of facts;
    (iii) Copies of documentary evidence and a list of all witnesses, 
including addresses and telephone numbers, together with a statement 
concerning their availability to appear at a fact-finding proceeding and 
the subject matter of their testimony;
    (iv) A list of parties including the contractor, principals, and 
affiliates (including last known home and business addresses, zip codes 
and DUNS Number);
    (v) DOE's acquisition history with the contractor, including recent 
experience under contracts and copies of pertinent contracts;
    (vi) A list of any known active or potential criminal 
investigations, criminal or civil proceedings, or administrative claims 
before the Board of Contract Appeals; and
    (vii) A statement regarding the impact of the debarment action on 
DOE programs. This statement is not required for referrals by the 
Inspector General.
    (3) Referrals may be returned to the originator for further 
information or development.
    (b) Decisionmaking process. Contractors proposed for debarment shall 
be afforded an opportunity to submit information and argument in 
opposition to the proposed debarment.
    (1) In actions based upon a conviction or civil judgment, or in 
which there is no genuine dispute over material facts, the Debarring 
Official shall make a decision on the basis of all the information in 
the administrative record, including any submissions made by the 
contractor. If the respondent fails to submit a timely written response 
to a notice of proposed debarment, the Debarring Official shall notify 
the respondent in accordance with FAR 9.406-3(e) that the contractor is 
debarred.
    (2) In actions not based upon a conviction or civil judgment, the 
contractor may request a fact-finding hearing to resolve a genuine 
dispute of material fact. In its request, the contractor must identify 
the material facts in dispute and the basis for disputing the facts. If 
the Debarring Official determines that there is a genuine dispute of 
material fact, the Debarring Official shall refer the matter to the 
Energy Board of Contract Appeals for a fact-finding conference.
    (3) Meeting. Upon receipt of a timely request therefor from a 
contractor proposed for debarment, the Debarring Official shall schedule 
a meeting between the Debarring Official and the respondent, to be held 
no later than 30 days from the date the request is received. The 
Debarring Official may postpone the date of the meeting if the 
respondent requests a postponement in writing. At the meeting, the 
respondent, appearing personally or through an attorney or other 
authorized representative, may present and explain evidence that causes 
for debarment do not exist, evidence of any mitigating factors, and 
arguments concerning the imposition, scope, or duration of a proposed 
debarment or debarment.
    (4) Fact-finding conference. The purpose of a fact-finding 
conference under this section is to provide the respondent an 
opportunity to dispute material facts through the submission of oral and 
written evidence; resolve facts in dispute; and provide the Debarring 
Official with findings of fact based, as applicable, on adequate 
evidence or on a preponderance of the evidence. The

[[Page 296]]

fact-finding conference shall be conducted in accordance with rules 
consistent with FAR 9.406-3(b) promulgated by the Energy Board of 
Contract Appeals. The Energy Board of Contract Appeals will notify the 
affected parties of the schedule for the hearing. The Energy Board of 
Contract Appeals shall deliver written findings of fact to the Debarring 
Official (together with a transcription of the proceeding, if made) 
within a certain time period after the hearing record closes, as 
specified in the Energy Board of Contract Appeals Rules. The findings 
shall resolve any disputes over material facts based upon a 
preponderance of the evidence, if the case involves a proposal to debar, 
or on adequate evidence, if the case involves a suspension. Since 
convictions or civil judgments generally establish the cause for 
debarment by a preponderance of the evidence, there usually is no 
genuine dispute over a material fact that would warrant a fact-finding 
conference for those proposed debarments based on convictions or civil 
judgments.
    (d) Debarring Official's decision. (4) The Debarring Official's 
final decision shall be based on the administrative record. In those 
actions where additional proceedings are necessary as to disputed 
material facts, written findings of fact shall be prepared and included 
in the final decision. In those cases where the contractor has requested 
and received a fact-finding conference, the written findings of fact 
shall be those findings prepared by the Energy Board of Contract 
Appeals. Findings of fact shall be final and conclusive unless within 15 
days of receipt of the findings, the Department or the respondent 
requests reconsideration, as provided in the Board's Rules, or unless 
set aside by a court of competent jurisdiction. The Energy Board of 
Contract Appeals shall be provided a copy of the Debarring Official's 
final decision.



909.406-6  Requests for reconsideration of debarment.

    (a) At any time during a period of debarment, a respondent may 
submit to the Debarring or Suspending Official a written request for 
reconsideration of the scope, duration, or effects of the suspension/
debarment action because of new information or changed circumstances, as 
discussed at FAR 9.406-4(c).
    (b) In reviewing a request for reconsideration, the Debarring or 
Suspending Official may, in his or her discretion, utilize any of the 
procedures (meeting and fact-finding) set forth in 48 CFR (DEAR) 
909.406-3 and 909.407-3. The Debarring or Suspending Official's final 
disposition of the reconsideration request shall be in writing and shall 
set forth the reasons why the request has been granted or denied. A 
notice transmitting a copy of the disposition of the request for 
reconsideration shall be sent to the respondent and, if a fact-finding 
conference under 48 CFR (DEAR) 909.406-3(b)(4) is pending (as in the 
case of a request for reconsideration of a suspension, where the 
proposed debarment is the subject of a fact-finding conference), a copy 
of the disposition shall be transmitted to the Energy Board of Contract 
Appeals.



909.407-2  Causes for suspension. (DOE coverage--paragraph (d))

    (d) The Suspending Official may suspend an organization or 
individual:
    (1) Indicted for or suspected, upon adequate evidence, of the causes 
described in 48 CFR (DEAR) 909.406-2(c)(1).
    (2) On the basis of the causes set forth in 48 CFR (DEAR) 909.406-
2(d)(2).
    (3) On the basis that an organization or individual is an affiliate 
of a suspended or debarred contractor.



909.407-3  Procedures. (DOE coverage--paragraphs (b) and (e))

    (b) Decisionmaking process.
    (1) In actions based on an indictment, the Suspending Official shall 
make a decision based upon the administrative record, which shall 
include submissions made by the contractor in accordance with 48 CFR 
(DEAR) 909.406-3(b)(1) and 909.406-3(b)(3).
    (2) For actions not based on an indictment, the procedures in 48 CFR 
(DEAR) 909.406-3(b)(2) and FAR 9.407-3(b)(2) apply.
    (3) Coordination with Department of Justice. Whenever a meeting or 
fact-finding conference is requested, the

[[Page 297]]

Suspending Official's legal representative shall obtain the advice of 
appropriate Department of Justice officials concerning the impact 
disclosure of evidence at the meeting or fact-finding conference could 
have on any pending civil or criminal investigation or legal proceeding. 
If such Department of Justice official requests in writing that evidence 
needed to establish the existence of a cause for suspension not be 
disclosed to the respondent, the Suspending Official shall:
    (i) Decline to rely on such evidence and withdraw (without 
prejudice) the suspension or proposed debarment until such time as 
disclosure of the evidence is authorized; or
    (ii) Deny the request for a meeting or fact-finding and base the 
suspension decision solely upon the information in the administrative 
record, including any submission made by the respondent.
    (e) Notice of suspending official's decision. In actions in which 
additional proceedings have been held, following such proceedings, the 
Suspending Official shall notify respondent, as applicable, in 
accordance with paragraphs (e)(1) or (e)(2) of this section.
    (1) Upon deciding to sustain a suspension, the Suspending Official 
shall promptly send each affected respondent a notice containing the 
following information:
    (i) A reference to the notice of suspension, the meeting and the 
fact-finding conference;
    (ii) The Suspending Official's findings of fact and conclusions of 
law;
    (iii) The reasons for sustaining a suspension;
    (iv) A reference to the Suspending Official's waiver authority under 
48 CFR (DEAR) 909.405;
    (v) A statement that the suspension is effective throughout the 
Executive Branch as provided in FAR 9.407-1(d);
    (vi) Modifications, if any, of the initial terms of the suspension;
    (vii) A statement that a copy of the suspension notice was sent to 
GSA and that the respondent's name and address will be added to the GSA 
List; and
    (viii) If less than an entire organization is suspended, 
specification of the organizational element(s) or individual(s) included 
within the scope of the suspension.
    (2) If the Suspending Official decides to terminate a suspension, 
the Suspending Official shall promptly send, by certified mail, return 
receipt requested, each affected respondent a copy of the final decision 
required under this section.

[61 FR 39857, July 31, 1996; 61 FR 41684, Aug. 9, 1996]



    Subpart 909.5_Organizational and Consultant Conflicts of Interest

    Source: 62 FR 40751, July 30, 1997, unless otherwise noted.



909.503  Waiver.

    Heads of Contracting Activities are delegated the authorities in 48 
CFR (FAR) 9.503 regarding the waiver of OCI requirements.



909.504  Contracting Officer's Responsibility. (DOE coverage-paragraphs (d) 
and (e)).

    (d) The contracting officer shall evaluate the statement by the 
apparent successful offeror or, where individual contracts are 
negotiated with all firms in the competitive range, all such firms for 
interests relating to a potential organizational conflict of interest in 
the performance of the proposed contract. Using that information and any 
other credible information, the contracting officer shall make written 
determination of whether those interests create an actual or significant 
potential organizational conflict of interest and identify any actions 
that may be taken to avoid, neutralize, or mitigate such conflict. In 
fulfilling their responsibilities for identifying and resolving 
potential conflicts, contracting officers should avoid creating 
unnecessary delays, burdensome information requirements, and excessive 
documentation.
    (e) The contracting officer shall award the contract to the apparent 
successful offeror unless a conflict of interest is determined to exist 
that cannot be avoided, neutralized, or mitigated. Before determining to 
withold award based on organizational conflict

[[Page 298]]

of interest considerations, the contracting officer shall notify the 
offeror, provide the reasons therefor, and allow the offeror a 
reasonable opportunity to respond. If the conflict of interest cannot be 
avoided, neutralized, or mitigated to the contracting officer's 
satisfaction, the contracting officer may disqualify the offeror from 
award and undertake the disclosure, evaluation, and determination 
process with the firm next in line for award. If the contracting officer 
finds that it is in the best interest of the United States to award the 
contract notwithstanding a conflict of interest, a request for waiver 
shall be submitted in accordance with 48 CFR 909.503. The waiver request 
and decisions shall be included in the contract file.



909.507  Solicitation provisions and contract clause.



909.507-1  Solicitation provisions. (DOE coverage-paragraph (e)).

    (e) The contracting officer shall insert the provision at 48 CFR 
952.209-8, Organizational Conflicts of Interest Disclosure-Advisory and 
Assistance Services, in solicitations for advisory and assistance 
services expected to exceed the simplified acquisition threshold. In 
individual procurements, the Head of the Contracting Activity may 
increase the period subject to disclosure in 952.209-8 (c)(1) up to 36 
months.



909.507-2  Contract Clause.

    (a)(1) The contracting officer shall insert the clause at 48 CFR 
952.209-72, Organizational Conflicts of Interest, in each solicitation 
and contract for advisory and assistance services expected to exceed the 
simplified acquisition threshold.
    (2) Contracting officers may make appropriate modifications where 
necessary to address the potential for organizational conflicts of 
interest in individual contracts. Contracting officers shall determine 
the appropriate term of the bar of paragraph (b)(1)(i) of the clause at 
48 CFR 952.209-72 and enter that term in the blank provided. In the 
usual case of a contract for advisory and assistance services a period 
of three, four, or five years is appropriate; however, in individual 
cases the contracting officer may insert a term of greater or lesser 
duration.
    (3) The contracting officer shall include Alternate I with the 
clause in instances in which a meaningful amount of subcontracting for 
advisory and assistance services is expected.
    (b) Contracts, which are not subject to part 970 but provide for the 
operation of a DOE site or facility or environmental remediation of a 
specific DOE site or sites, shall contain the organizational conflict of 
interest clause at 48 CFR 952.209-72. The organizational conflicts of 
interest clause in such contracts shall include Alternate I to that 
clause.



PART 911_DESCRIBING AGENCY NEEDS--Table of Contents




                Subpart 911.6_Priorities and Allocations

Sec.
911.600 Scope of subpart.
911.602 General.
911.604 Solicitation provision and contract clause.

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



                Subpart 911.6_Priorities and Allocations



911.600  Scope of subpart.

    This subpart implements and supplements FAR Subpart 11.6, Priorities 
and Allocations, and implements the regulations and procedures of the 
Defense Priorities and Allocations System (DPAS) in solicitations and 
contracts in support of authorized national defense programs and those 
energy programs which maximize domestic energy supplies. (See 15 CFR 
part 700).

[52 FR 38422, Oct. 16, 1987, as amended at 59 FR 9105, Feb. 25, 1994. 
Redesignated and amended at 61 FR 21976, May 13, 1996; 61 FR 30823, June 
18, 1996]



911.602  General.

    (d) Programs which maximize domestic energy supplies are eligible 
for priorities and allocations support depending on an executive 
decision made on a case-by-case basis. Eligibility is pursuant to 
section 104(a) of the Energy Conservation and Policy Act, Pub. L. 94-
163, which added a new section 101(c) to the Defense Production Act. 
Guidance

[[Page 299]]

is provided by 10 CFR part 216 and Department of Energy publication DOE/
MA-0192, ``Priorities and Allocations Support for Energy: Keeping Energy 
Programs on Schedule,'' dated August 1985. Rated orders placed in 
support of authorized energy programs are equivalent to orders placed in 
support of authorized defense programs under the DPAS and receive the 
same preferential treatment throughout the industrial supply chain.
    (e) The Heads of Contracting Activities shall ensure that members of 
their staffs and contractors under their jurisdiction are advised of the 
provisions of the DPAS regulation and that the related procedures are 
followed to ensure adherence to the regulation throughout the industrial 
supply chain. Under DPAS, it is mandatory that the priority rating be 
extended through the industrial chain from supplier to supplier.

[52 FR 38422, Oct. 16, 1987, as amended at 59 FR 9105, Feb. 25, 1994. 
Redesignated at 61 FR 21976, May 13, 1996]



911.604  Solicitation provision and contract clause.

    (a) The contracting officer shall insert the provision at 952.211-
70, Priorities and Allocations (Atomic Energy), in solicitations that 
will result in the placement of rated orders for authorized DOE atomic 
energy programs.
    (b) The contracting officer shall insert the clause at 952.211-71, 
Priorities and Allocations (Atomic Energy) in contracts that are placed 
in support of authorized DOE atomic energy programs.
    (c) The use of the provisions at 952.211-70 and the clause at 
952.211-71 is optional for industrial delivery orders of $5,000 or less.
    (d) The contracting officer shall insert the provision at 952.211-
70, Priorities and Allocations (Domestic Energy Supplies), with its 
Alternate I, in solicitations that may result in the placement of rated 
orders for authorized energy programs, and in solicitations for all 
management and operating contracts.
    (e) The contracting officer shall insert the clause at 952.211-71, 
Priorities and Allocations (Domestic Energy Supplies), with its 
Alternate I, if it is believed the contract involves a program the 
purpose of which is to maximize domestic energy supplies, and in all 
management and operating contracts.

[52 FR 38422, Oct. 16, 1987, as amended at 59 FR 9105, Feb. 25, 1994. 
Redesignated and amended at 61 FR 21976, May 13, 1996; 65 FR 81006, Dec. 
22, 2000]



PART 912_ACQUISITION OF COMMERCIAL ITEMS--Table of Contents




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



   Subpart 912.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



912.302  Tailoring of provisions and clauses for the acquisition of 
commercial items. (DOE coverage--paragraph (c))

    (c) The waiver required by 48 CFR 12.302(c) shall be in writing and 
approved by the contracting officer.

[62 FR 53757, Oct. 16, 1997]

[[Page 300]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 913_SIMPLIFIED ACQUISITION PROCEDURES--Table of Contents




              Subpart 913.3_Simplified Acquisition Methods

Sec.
913.307 Forms

                  Subpart 913.4_Fast Payment Procedure

913.402 General.

    Authority: 42 U.S.C. 7101 et seq., 41 U.S.C. 418(b); 50 U.S.C. 2401 
et seq.

    Source: 67 FR 14871, Mar. 28, 2002, unless otherwise noted.



              Subpart 913.3_Simplified Acquisition Methods



913.307  Forms. (DOE coverage paragraph (b))

    (b) Optional Forms 347 and 348, or DOE F 4250.3, may be used for 
purchase orders using simplified acquisition procedures. These forms 
shall not be used as the contractor's invoice. See 48 CFR 12.204 
regarding the use of SF-1449 for the acquisition of commercial items 
using simplified acquisition procedures.



                  Subpart 913.4_Fast Payment Procedure



913.402  General.

    The fast payment procedure delineated in FAR subpart 13.4 is not to 
be used by DOE.



PART 914_SEALED BIDDING--Table of Contents




           Subpart 914.4_Opening of Bids and Award of Contract

Sec.
914.404-1 Cancellation of invitations after opening.
914.407 Mistakes in bids.
914.407-3 Other mistakes disclosed before award.
914.407-4 Mistakes after award.
914.408-2 Award of classified contracts.

                  Subpart 914.5_Two-Step Sealed Bidding

914.502 Conditions for use.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 11954, Mar. 28, 1984, unless otherwise noted.



           Subpart 914.4_Opening of Bids and Award of Contract



914.404-1  Cancellation of invitations after opening.

    (c) The Procurement Executive has been delegated authority to make 
the determination under FAR 14.404-1(c) and (e) and has redelegated this 
authority to the Heads of Contracting Activities without power of 
redelegation.

[50 FR 12184, Mar. 27, 1985]



914.407  Mistakes in bids.



914.407-3  Other mistakes disclosed before award.

    (e) Pursuant to FAR 14.407-3(e), the Procurement Executive, has been 
delegated authority by the Secretary to make the determinations under 
FAR 14.407-3. In the case of mistakes in bids alleged after opening of 
bids and before award, the Procurement Executive has redelegated this 
authority to the Heads of Contracting Activities without power of 
redelegation and to make administrative determinations regarding 
withdrawal of bids as provided for in FAR 14.407-3, providing that each 
such determination shall be approved by Legal Counsel.

[49 FR 11954, Mar. 28, 1984, as amended at 56 FR 41964, Aug. 26, 1991; 
59 FR 9105, Feb. 25, 1994. Redesignated and amended at 67 FR 14871, Mar. 
28, 2002q]



914.407-4  Mistakes after award.

    The Procurement Executive has been delegated authority to make the 
determinations under FAR 14.407-4. Mistakes in bids after award, 
together with the data set forth in FAR 14.407-

[[Page 301]]

4(e), shall be submitted to the Procurement Executive for decision.

[49 FR 11954, Mar. 28, 1984. Redesignated and amended at 67 FR 14871, 
Mar. 28, 2002]



914.408-2  Award of classified contracts.

    DOE regulations regarding the safeguarding of restricted data and 
procedures for its destruction are contained at 10 CFR part 1016.

[49 FR 11954, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



                  Subpart 914.5_Two-Step Sealed Bidding



914.502  Conditions for use.

    (c) Use of the two-step sealed bidding method shall be approved by 
the Head of the Contracting Activity. The contracting officer shall 
submit a written request for approval justifying its use in accordance 
with FAR 14.502.

[50 FR 12184, Mar. 27, 1985]



PART 915_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 915.2_Solicitation and Receipt of Proposals and Information

Sec.
915.200 Scope of subpart.
915.201 Exchanges with industry before receipt of proposals.
915.207-70 Handling of proposals during evaluation.

                     Subpart 915.3_Source Selection

915.305 Proposal evaluation.

                     Subpart 915.4_Contract Pricing

915.404-2 Information to support proposal analysis.
915.404-2-70 Audit as an aid in proposal analysis.
915.404-4 Profit.
915.404-4-70 DOE structured profit and fee system.
915.404-4-70-1 General.
915.404-70-2 Weighted guidelines system.
915.404-4-70-3 Documentation.
915.404-4-70-4 Exceptions.
915.404-4-70-5 Special considerations--contracts with nonprofit 
          organizations (other than educational institutions).
915.404-4-70-6 Contracts with educational institutions.
915.404-4-70-7 Alternative techniques.
915.404-4-70-8 Weighted guidelines application considerations.
915.404-4-71 Profit and fee-system for construction and construction 
          management contracts.
915.404-4-71-1 General.
915.404-4-71-2 Limitations.
915.404-4-71-3 Factors for determining fees.
915.404-4-71-4 Considerations affecting fee amounts.
915.404-4-71-5 Fee schedules.
915.404-4-71-6 Fee base.
915.404-4-72 Special considerations for cost-plus-award-fee contracts.
915.408-70 Solicitation provision and contract clause.

                   Subpart 915.6_Unsolicited Proposals

915.602 Policy.
915.603 General.
915.605 Content of unsolicited proposals.
915.606 Agency procedures.
915.607 Criteria for acceptance of an unsolicited proposal.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 63 FR 56851, Oct. 23, 1998, unless otherwise noted.



   Subpart 915.2_Solicitation and Receipt of Proposals and Information



915.200  Scope of subpart.

    FAR 15.2 is not applicable to Program Opportunity Notices (See 48 
CFR 917.72) or Program Research and Development Announcements (See 48 
CFR 917.73).



915.201  Exchanges with industry before receipt of proposals. (DOE coverage--
paragraph (e)).

    (e) Approval for the use of solicitations for information or 
planning purposes shall be obtained from the Head of the Contracting 
Activity.



915.207-70  Handling of proposals during evaluation.

    (a) Proposals furnished to the Government are to be used for 
evaluation purposes only. Disclosure outside the Government for 
evaluation is permitted only to the extent authorized by, and in 
accordance with, the procedures in this subsection.
    (b) While the Government's limited use of proposals does not require 
that the proposal bear a restrictive notice, proposers should, if they 
desire to

[[Page 302]]

maximize protection of their trade secrets or confidential or privileged 
commercial and financial information contained in them, apply the 
restrictive notice prescribed in paragraph (e) of the provision at 48 
CFR 52.215-1 to such information. In any event, information contained in 
proposals will be protected to the extent permitted by law, but the 
Government assumes no liability for the use or disclosure of information 
(data) not made subject to such notice in accordance with paragraph (e) 
of the provision at 48 CFR 52.215-1.
    (c) If proposals are received with more restrictive conditions than 
those in paragraph (e) of the provision at 48 CFR 52.215-1, the 
contracting officer or coordinating officer shall inquire whether the 
submitter is willing to accept the conditions of paragraph (e). If the 
submitter does not, the contracting officer or coordinating officer 
shall, after consultation with counsel, either return the proposal or 
accept it as marked. Contracting officers shall not exclude from 
consideration any proposals merely because they contain an authorized or 
agreed to notice, nor shall they be prejudiced by such notice.
    (d) Release of proposal information (data) before decision as to the 
award of a contract, or the transfer of valuable and sensitive 
information between competing offerors during the competitive phase of 
the acquisition process, would seriously disrupt the Government's 
decision-making process and undermine the integrity of the competitive 
acquisition process, thus adversely affecting the Government's ability 
to solicit competitive proposals and award a contract which would best 
meet the Government's needs and serve the public interest. Therefore, to 
the extent permitted by law, none of the information (data) contained in 
proposals, except as authorized in this subsection, is to be disclosed 
outside the Government before the Government's decision as to the award 
of a contract. In the event an outside evaluation is to be obtained, it 
shall be only to the extent authorized by, and in accordance with the 
procedures of, this subsection.
    (e)(1) In order to maintain the integrity of the procurement process 
and to assure that the propriety of proposals will be respected, 
contracting officers shall assure that the following notice is affixed 
to each solicited proposal prior to distribution for evaluation:

                Government Notice for Handling Proposals

    This proposal shall be used and disclosed for evaluation purposes 
only, and a copy of this Government notice shall be applied to any 
reproduction or abstract thereof. Any authorized restrictive notices 
which the submitter places on this proposal shall also be strictly 
complied with. Disclosure of this proposal outside the Government for 
evaluation purposes shall be made only to the extent authorized by, and 
in accordance with, the procedures in DEAR subsection 915.207-70.

                             (End of notice)

    (2) The notice at FAR 15.609(d) for unsolicited proposals shall be 
affixed to a cover sheet attached to each such proposal upon receipt by 
DOE. Use of the notice neither alters any obligation of the Government, 
nor diminishes any rights in the Government to use or disclose data or 
information.
    (f)(1) Normally, evaluations of proposals shall be performed only by 
employees of the Department of Energy. As used in this section, 
``proposals'' includes the offers in response to requests for proposals, 
sealed bids, program opportunity announcements, program research and 
development announcements, or any other method of solicitation where the 
review of proposals or bids is to be performed by other than peer 
review. In certain cases, in order to gain necessary expertise, 
employees of other agencies may be used in instances in which they will 
be available and committed during the period of evaluation. Evaluators 
or advisors who are not Federal employees, including employees of DOE 
management and operating contractors, may be used where necessary. Where 
such non-Federal employees are used as evaluators, they may only 
participate as members of technical evaluation committees. They may not 
serve as members of the Source Evaluation Board or equivalent board or 
committee.
    (2)(i) Pursuant to section 6002 of Pub. L. 103-355, a determination 
is required for every competitive procurement as

[[Page 303]]

to whether sufficient DOE personnel with the necessary training and 
capabilities are available to evaluate the proposals that will be 
received. This determination, discussed at FAR 37.204, shall be made in 
the memorandum appointing the technical evaluation committee by the 
Source Selection Official, in the case of Source Evaluation Board 
procurements, or by the Contracting Officer in all other procurements.
    (ii) Where it is determined such qualified personnel are not 
available within DOE but are available from other Federal agencies, a 
determination to that effect shall be made by the same officials in the 
same memorandum. Should such qualified personnel not be available, a 
determination to use non-Federal evaluators or advisors must be made in 
accordance with paragraph (f)(3) of this subsection.
    (3) The decision to employ non-Federal evaluators or advisors, 
including employees of DOE management and operating contractors, in 
Source Evaluation Board procurements must be made by the Source 
Selection Official with the concurrence of the Head of the Contracting 
Activity. In all other procurements, the decision shall be made by the 
senior program official or designee with the concurrence of the Head of 
the Contracting Activity. In a case where multiple solicitations are 
part of a single program and would call for the same resources for 
evaluation, a class determination to use non-Federal evaluators may be 
made by the DOE Procurement Executive.
    (4) Where such non-Federal evaluators or advisors are to be used, 
the solicitation shall contain a provision informing prospective 
offerors that non-Federal personnel may be used in the evaluation of 
proposals.
    (5) The nondisclosure agreement as it appears in paragraph (f)(6) of 
this subsection shall be signed before DOE furnishes a copy of the 
proposal to non-Federal evaluators or advisors, and care should be taken 
that the required handling notice described in paragraph (e) of this 
subsection is affixed to a cover sheet attached to the proposal before 
it is disclosed to the evaluator or advisor. In all instances, such 
persons will be required to comply with nondisclosure of information 
requirements and requirements involving Procurement Integrity, see FAR 
3.104; with requirements to prevent the potential for personal conflicts 
of interest; or, where a non-Federal evaluator or advisor is acquired 
under a contract with an entity other than the individual, with 
requirements to prevent the potential for organizational conflicts of 
interest.
    (6) Non-Federal evaluators or advisors shall be required to sign the 
following agreement prior to having access to any proposal:

                         Nondisclosure Agreement

    Whenever DOE furnishes a proposal for evaluation, I, the recipient, 
agree to use the information contained in the proposal only for DOE 
evaluation purposes and to treat the information obtained in confidence. 
This requirement for confidential treatment does not apply to 
information obtained from any source, including the proposer, without 
restriction. Any notice or restriction placed on the proposal by either 
DOE or the originator of the proposal shall be conspicuously affixed to 
any reproduction or abstract thereof and its provisions strictly 
complied with. Upon completion of the evaluation, it is agreed all 
copies of the proposal and abstracts, if any, shall be returned to the 
DOE office which initially furnished the proposal for evaluation. Unless 
authorized by the Contracting Officer, I agree that I shall not contact 
the originator of the proposal concerning any aspect of its elements.

Recipient:______________________________________________________________

Date:___________________________________________________________________

                           (End of agreement)

    (g) The submitter of any proposal shall be provided notice adequate 
to afford an opportunity to take appropriate action before release of 
any information (data) contained therein pursuant to a request under the 
Freedom of Information Act (5 U.S.C. 552); and, time permitting, the 
submitter should be consulted to obtain assistance in determining the 
eligibility of the information (data) in question as an exemption under 
the Act. (See also 48 CFR 24.2, Freedom of Information Act.)

[[Page 304]]



                     Subpart 915.3_Source Selection



915.305  Proposal evaluation. (DOE coverage--paragraph (d))

    (d) Personnel from DOE, other Government agencies, consultants, and 
contractors, including those who manage or operate Government-owned 
facilities, may be used in the evaluation process as evaluators or 
advisors when their services are necessary and available. When personnel 
outside the Government, including those of contractors who operate or 
manage Government-owned facilities, are to be used as evaluators or 
advisors, approval and nondisclosure procedures as required by 48 CFR 
(DEAR) 915.207-70 shall be followed and a notice of the use of non-
Federal evaluators shall be included in the solicitation. In all 
instances, such personnel will be required to comply with DOE conflict 
of interest and nondisclosure requirements.



                     Subpart 915.4_Contract Pricing



915.404-2  Information to support proposal analysis. (DOE coverage--paragraphs 
(a), (c) and (e))

    (a)(1) Field pricing assistance as discussed in FAR 15.404-2(a) is 
not required for the negotiation of DOE contract prices or modifications 
thereof. The term ``field pricing assistance'' refers to the Department 
of Defense (DOD) system for obtaining a price and/or cost analysis 
report from a cognizant DOD field level contract management office 
wherein requests for the review of a proposal submitted by an offeror 
are initiated and the recommendations made by the various specialists of 
the management office are consolidated into a single report that is 
forwarded to the office making the contract award for use in conducting 
negotiations. In the DOE, such review activities, except for reviews 
performed by professional auditors, are expected to be accomplished by 
pricing support personnel located in DOE Contracting Activities. The DOE 
contracting officer shall formally request the assistance of appropriate 
pricing support personnel, other than auditors, for the review of any 
proposal that exceeds $500,000, unless the contracting officer has 
sufficient data to determine the reasonableness of the proposed cost or 
price. Such pricing support may be requested for proposals below 
$500,000, if considered necessary for the establishment of a reasonable 
pricing arrangement. Contracting officers, however, are not precluded by 
this section from requesting pricing assistance from a cognizant DOD 
contract management office, provided an appropriate cross-servicing 
arrangement for pricing support services exists between the DOE and the 
servicing agency.
    (c)(1) When an audit is required pursuant to 48 CFR 915.404-2-70, 
``Audit as an aid in proposal analysis,'' the request for audit shall be 
sent directly to the Federal audit office assigned cognizance of the 
offeror or prospective contractor. When the cognizant agency is other 
than the Defense Contract Audit Agency or the Department of Health and 
Human Services, and an appropriate interagency agreement has not been 
established, the need for audit assistance shall be coordinated with the 
Office of Policy, within the Headquarters procurement organization.
    (2) The request for audit shall establish the due date for receipt 
of the auditor's report and in so doing shall allow as much time as 
possible for the auditor's review.
    (e)(6) Copies of technical analysis reports prepared by DOE 
technical or other pricing support personnel shall not normally be 
provided to the auditor. The contracting officer or the supporting 
price, cost, or financial analyst at the contracting activity shall 
determine the monetary impact of the technical findings.



915.404-2-70   Audit as an aid in proposal analysis.

    (a) When a contract price will be based on cost or pricing data 
submitted by the offerors, the DOE contracting officer or authorized 
representative shall request a review by the cognizant Federal audit 
activity prior to the negotiation of any contract or modification 
including modifications under advertised contracts in excess of:
    (1) $500,000 for a firm fixed-price contract or a fixed-price 
contract with economic price adjustment provisions; or adjustment 
provisions; or

[[Page 305]]

    (2) $1,000,000 for all other contract types, including initial 
prices, estimated costs of cost-reimbursement contracts, interim and 
final price redeterminations, and target and settlement of incentive 
contracts.
    (b) The requirement for auditor reviews of proposals which exceed 
the thresholds specified in paragraph (a) of this section may be waived 
at a level above the contracting officer when the reasonableness of the 
negotiated contract price can be determined from information already 
available. The contract file shall be documented to reflect the reason 
for any such waiver, provided, however, that independent Government 
estimates of cost or price shall not be used as the sole justification 
for any such waiver.



915.404-4  Profit. (DOE coverage--paragraphs (c) and (d))

    (c)(4)(i) Contracting officer responsibilities. The statutory 
limitations on profit and fees as set forth in FAR 15.404-4(c)(4)(i) 
shall be followed, except as exempted for DOE architect-engineer 
contracts covering Atomic Energy Commission (AEC) and Bonneville Power 
Administration (BPA) functions. Pursuant to section 602(d) (13) and (20) 
of the Federal Property and Administration Services Act of 1949, as 
amended, those former AEC functions, as well as those of the BPA, now 
being performed by DOE are exempt from the 6 percent of cost restriction 
on contracts for architect-engineer services. The estimated costs on 
which the maximum fee is computed shall include facilities capital cost 
of money when this cost is included in cost estimates.
    (c)(6) In cases where a change or modification calls for 
substantially different work than the basic contract, the contractor's 
effort may be radically changed and a detailed analysis of the profit 
factors would be a necessity. Also, if the dollar amount of the change 
or contract modification is very significant in comparison to the 
contract dollar amount, a detailed analysis should be made.
    (d) Profit-analysis factors. A profit/fee analysis technique 
designed for a systematic application of the profit factors in FAR 
15.404-4(d) provides contracting officers with an approach that will 
ensure consistent consideration of the relative value of the various 
factors in the establishment of a profit objective and the conduct of 
negotiations for a contract award. It also provides a basis for 
documentation of this objective, including an explanation of any 
significant departure from it in reaching a final agreement. The 
contracting officer's analysis of these prescribed factors is based on 
information available prior to negotiations. Such information is 
furnished in proposals, audit data, performance reports, preaward 
surveys and the like.



915.404-4-70  DOE structured profit and fee system.

    This section implements FAR 15.404-4(b) and (d).



915.404-4-70-1  General.

    (a) Objective. It is the intent of DOE to remunerate contractors for 
financial and other risks which they may assume, resources they use, and 
organization, performance and management capabilities they employ. 
Profit or fee shall be negotiated for this purpose; however, when profit 
or fee is determined as a separate element of the contract price, the 
aim of negotiation should be to fit it to the acquisition, giving due 
weight to effort, risk, facilities investment, and special factors as 
set forth in this subpart.
    (b) Commercial (profit) organization. Profit or fee prenegotiation 
objectives for contracts with commercial (profit) organizations shall be 
determined as provided in this subpart.
    (c) Nonprofit organizations. It is DOE's general policy to pay fees 
in contracts with nonprofit organizations other than educational 
institutions and governmental bodies; however, it is a matter of 
negotiation whether a fee will be paid in a given case. In making this 
decision, the DOE negotiating official should consider whether the 
contractor is ordinarily paid fees for the type of work involved. The 
profit objective should be reasonable in relation to the task to be 
performed and the requirements placed on the contractor.
    (d) Educational institutions. It is DOE policy not to pay fees under 
contracts with educational institutions.

[[Page 306]]

    (e) State, local and Indian tribal governments. Profit or fee shall 
not be paid under contracts with State, local, and Indian tribal 
Governments.



915.404-70-2  Weighted guidelines system.

    (a) To properly reflect differences among contracts and the 
circumstances relating thereto and to select an appropriate relative 
profit/fee in consideration of these differences and circumstances, 
weightings have been developed for application by the contracting 
officer to standard measurement bases representative of the prescribed 
profit factors cited in FAR 15.404-4(d) and paragraph (d) of this 
section. This is a structured system, referred to as weighted 
guidelines. Each profit factor or subfactor, or component thereof, has 
been assigned weights relative to their value to the contract's overall 
effort. The range of weights to be applied to each profit factor is also 
set forth in paragraph (d) of this section. Guidance on how to apply the 
weighted guidelines is set forth in 48 CFR 915.404-4-70-8.
    (b) Except as set forth in 48 CFR 915.404-4-70-4, the weighted 
guidelines shall be used in establishing the profit objective for 
negotiation of contracts where cost analysis is performed.
    (c) The negotiation process does not contemplate or require 
agreement on either estimated cost elements or profit elements. 
Accordingly, although the details of analysis and evaluation may be 
discussed in the fact-finding phase of the negotiation process in order 
to develop a mutual understanding of the logic of the respective 
positions, specific agreement on the exact weights of values of the 
individual profit factors is not required and need not be attempted.
    (d) The factors set forth in the following table are to be used in 
determining DOE profit objectives. The factors and weight ranges for 
each factor shall be used in all instances where the weighted guidelines 
are applied.

------------------------------------------------------------------------
               Profit factors                  Weight ranges  (percent)
------------------------------------------------------------------------
I. Contractor Effort (Weights applied to
 cost):
  A. Material acquisitions:
    1. Purchased parts......................  1 to 3.
    2. Subcontracted items..................  1 to 4.
    3. Other materials......................  1 to 3.
  B. Labor skills:
    1. Technical and managerial:............
      a. Scientific.........................  10 to 20.
      b. Project management/administration..  8 to 20.
      c. Engineering........................  8 to 14.
    2. Manufacturing........................  4 to 8.
    3. Support services.....................  4 to 14.
  C. Overhead:
    1. Technical and managerial.............  5 to 8.
    2. Manufacturing........................  3 to 6.
    3. Support services.....................  3 to 7.
  D. Other direct costs                       3 to 8.
  E. G&A (General Management) expenses        5 to 7.
II. Contract Risk (type of contract-weights   0 to 8.
 applied to total cost of items IA thru E).
III. Capital Investment (Weights applied to   5 to 20.
 the net book value of allocable facilities).
IV. Independent Research and Development:
  A. Investment in IR&D program (Weights      5 to 7.
   applied to allocable IR&D costs).
  B. Developed items employed (Weights        0 to 20.
   applied to total of profit $ for items IA
   thru E).
V. Special Program Participation (Weights     -5 to +5.
 applied to total of Profit $ for items IA
 thru E).
VI. Other Considerations (Weights applied to  -5 to +5.
 total of Profits $ for items 1A thru E).
VII. Productivity/Performance (special        (N/A).
 computation).
------------------------------------------------------------------------



915.404-4-70-3  Documentation.

    Determination of the profit or fee objective, in accordance with 
this subpart shall be fully documented. Since the profit objective is 
the contracting officer's pre-negotiation evaluation of a total profit 
allowance for the proposed contract, the amounts developed for each 
category of cost will probably change in the course of negotiation. 
Furthermore, the negotiated amounts will probably vary from the 
objective

[[Page 307]]

and from the pre-negotiation detailed application of the weighted 
guidelines technique to each element of the contractor's input to total 
performance. Since the profit objective is viewed as a whole rather than 
as its component parts, insignificant variations from the pre-
negotiation profit objective, as a result of changes to the contractor's 
input to total performance, need not be documented in detail. 
Conversely, significant deviations from the profit objective necessary 
to reach a final agreement on profit or fee shall be explained in the 
price negotiation memorandum prepared in accordance with FAR 15.406-3.



915.404-4-70-4  Exceptions.

    (a) For contracts not expected to exceed $500,000, the weighted 
guidelines need not be used; however, the contracting officer may use 
the weighted guidelines for contracts below this amount if he or she 
elects to do so.
    (b) For the following classes of contracts, the weighted guidelines 
shall not be used:
    (1) Commercialization and demonstration type contracts;
    (2) Management and operating contracts;
    (3) Construction contracts;
    (4) Construction management contracts;
    (5) Contracts primarily requiring delivery of material supplied by 
subcontractors;
    (6) Termination settlements; and
    (7) Contracts with educational institutions.
    (c) In addition to paragraphs (a) and (b) of this section, the 
contracting officer need not use the weighted guidelines in unusual 
pricing situations where the weighted guidelines method has been 
determined by the DOE negotiating official to be unsuitable. Such 
exceptions shall be justified in writing and shall be authorized by the 
Head of the Contracting Activity. The contract file shall include this 
documentation and any other information that may support the exception.
    (d) If the contracting officer makes a written determination that 
the pricing situation meets any of the circumstances set forth in this 
section, other methods for establishing the profit objective may be 
used. For contracts other than those subject to 48 CFR 917.6, the 
selected method shall be supported in a manner similar to that used in 
the weighted guidelines (profit factor breakdown and documentation of 
profit objectives); however, investment or other factors that would not 
be applicable to the contract shall be excluded from the profit 
objective determination. It is intended that the methods will result in 
profit objectives for noncapital intensive contracts that are below 
those generally developed for capital intensive contracts.



915.404-4-70-5  Special considerations--contracts with nonprofit 
organizations (other than educational institutions).

    (a) For purposes of identification, nonprofit organizations are 
defined as those business entities organized and operated exclusively 
for charitable, scientific, or educational purposes, of which no part of 
the net earnings inure to the benefit of any private shareholder or 
individual, of which no substantial part of the activities is attempting 
to influence legislation or participating in any political campaign on 
behalf of any candidate for public office, and which are exempt from 
Federal income taxation under section 501 of the Internal Revenue Code.
    (b) In computing the amount of profit or fee to be paid, the DOE 
negotiating official shall take into account the tax benefits received 
by a nonprofit organization. While it is difficult to establish the 
degree to which a remuneration under any given contract contributes to 
an organization's overall net profit, the DOE negotiating official 
should assume that there is an element of profit in any amount to be 
paid.
    (c) In order to assure consideration of the tax posture of nonprofit 
organizations during a profit or fee negotiation, the DOE negotiating 
official shall calculate the fee as for a contract with a commercial 
concern and then reduce it at least 25 percent. However, depending on 
the circumstances, the contracting officer may pay profit or fees 
somewhere between this amount and the appropriate profit or fee as if it 
were a commercial concern. When this is the

[[Page 308]]

case, the contract file shall be documented to specifically state the 
reason or reasons.
    (d) Where a contract with a nonprofit organization is for the 
operation of Government-owned facilities, the fee should be calculated 
using the procedures and schedules applicable to operating contracts as 
set forth in 48 CFR part 970.



915.404-4-70-6  Contracts with educational institutions.

    In certain situations the DOE may contract with a university to 
manage or operate Government-owned laboratories. These efforts are 
generally apart from, and not in conjunction with, their other 
activities, and the complexity and magnitude of the work are not 
normally found in standard university research or study contracts. Such 
operating contracts are subject to the applicable provisions set forth 
in 48 CFR part 970.



915.404-4-70-7  Alternative techniques.

    (a) Profit or fees to be paid on construction contracts and 
construction management contracts shall be determined in accordance with 
the applicable profit/fee technique for such contracts set forth in 48 
CFR 915.404-4-71.
    (b) Profit and fee to be paid on contracts under $500,000, not using 
the weighted guidelines, shall be judgmentally developed by the 
contracting officer by assigning individual dollar amounts to the 
factors appropriate to DOE profit considerations discussed in 48 CFR 
915.404-4-70-2(d).
    (c) Contracts which require only delivery or furnishing of goods or 
services supplied by subcontractors shall include a fee or profit which, 
in the best judgment of the contracting officer, is appropriate. It 
would be expected that there would be a declining relationship of 
profit/fee dollars in relation to total costs. The higher the cost of 
subcontracts, for example, the lower the profit/fee ratio to these 
costs.
    (d) Profit/Fee considerations in termination settlements are often a 
question of equity. They are a matter of negotiation. They should not, 
however, exceed what would have otherwise been payable under weighted 
guidelines had the termination not occurred.



915.404-4-70-8  Weighted guidelines application considerations.

    The Department has developed internal procedures to aid the 
contracting officer in the application of weighted guidelines and to 
assure a reasonable degree of uniformity across the Department.



915.404-4-71  Profit and fee-system for construction and construction 
management contracts.



915.404-4-71-1  General.

    (a) Business concerns awarded a DOE construction or construction 
management contract shall be paid a profit or fee if requested or 
solicited. The profit or fee objective for a construction or 
construction management contract shall be an amount appropriate for the 
type of effort contained therein. It is the intent of DOE to
    (1) Reward contractors based on the complexity of work,
    (2) Reward contractors who demonstrate and establish excellent 
records of performance and
    (3) Reward contractors who contribute their own resources, including 
facilities and investment of capital.
    (b) Standard fees or across-the-board agreements will not be used or 
made. Profit or fee objectives are to be determined for each contract 
according to the effort or task contracted for thereunder.
    (c) Profit or fee payable on fixed-price and cost-reimbursable 
construction or construction management contracts shall be established 
in accordance with the appropriate procedures and schedules set forth in 
this subpart.



915.404-4-71-2  Limitations.

    Amounts payable under construction and construction management 
contracts shall not exceed amounts derived from the schedules 
established for this purpose. Requests to pay fees in excess of these 
levels shall be forwarded to the Procurement Executive for review and 
approval.



915.404-4-71-3  Factors for determining fees.

    (a) The profit policy stated in 48 CFR 915.404-4-71-1(a) reflects, 
in a broad

[[Page 309]]

sense, recognition that profit is compensation to contractors for the 
entrepreneurial function of organizing and managing resources (including 
capital resources), and the assumption of risk that all costs of 
performance (operating and capital) may not be reimbursable.
    (b) The best approach calls for a structure that allows judgmental 
evaluation and determination of fee dollars for prescribed factors which 
impact the need for, and the rewards associated with, fee or profit, as 
follows.
    (1) Management risk relating to performance, including the
    (i) Quality and diversity of principal work tasks required to do the 
job,
    (ii) Labor intensity of the job,
    (iii) Special control problems, and
    (iv) Advance planning, forecasting and other such requirements;
    (2) The presence or absence of financial risk, including the type 
and terms of the contract;
    (3) The relative difficulty of work, including consideration of 
technical and administrative knowledge, skill, experience and clarity of 
technical specifications;
    (4) Degree and amount of contract work required to be performed by 
and with the contractor's own resources, including the extent to which 
the contractor contributes plant, equipment, computers, or working 
capital (labor, etc.);
    (5) Duration of project;
    (6) Size of operation;
    (7) Benefits which may accrue to the contractor from gaining 
experience and know-how, from establishing or enhancing a reputation, or 
from being enabled to hold or expand a staff whose loyalties are 
primarily to the contractor; and
    (8) Other special considerations, including support of Government 
programs such as those relating to small, small disadvantaged, and 
women-owned small business in subcontracting, energy conservation, etc.
    (c) The total fee objective and amount for a particular negotiation 
is established by judgmental considerations of the factors in paragraph 
(b) of this section, assigning fee values as deemed appropriate for each 
factor and totaling the resulting amounts.
    (d) In recognition of the complexities of this process, and to 
assist in promoting a reasonable degree of consistency and uniformity in 
its application, fee schedules have been developed which set forth 
maximum fee amounts that contracting activities are allowed to negotiate 
for a particular transaction without obtaining prior approval of the 
Procurement Executive. In addition, the fee negotiation objective 
established in accordance with 48 CFR 915.404-4-71-3(a), (b), and (c) 
shall not exceed the applicable fee schedule amounts without prior 
approval of the Procurement Executive. To facilitate application to a 
contract, the fee amounts are related to the total cost base which is 
defined as total operating and capital costs.



915.404-4-71-4  Considerations affecting fee amounts.

    (a) In selecting final fee amounts for the various factors in 48 CFR 
915.404-4-71-3 of this section, the DOE negotiating official will have 
to make several judgments as discussed in this subsection.
    (b) Complexity of a construction project shall be considered by 
analysis of its major parts. For a project which includes items of work 
of different degrees of complexity, a single average classification 
should be considered, or the work should be divided into separate 
classifications. The following class identifications are appropriate for 
proper fee determinations.
    (1) Class A--Manufacturing plants involving operations requiring a 
high degree of design layout or process control; nuclear reactors; 
atomic particle accelerators; complex laboratories or industrial units 
especially designed for handling radioactive materials.
    (2) Class B--Normal manufacturing processes and assembly operations 
such as ore dressing, metal working plant and simple processing plants; 
power plants and accessory switching and transformer stations; water 
treatment plants; sewage disposal plants; hospitals; and ordinary 
laboratories.
    (3) Class C--Permanent administrative and general service buildings, 
permanent housing, roads, railroads, grading, sewers, storm drains, and 
water and power distribution systems.

[[Page 310]]

    (4) Class D--Construction camps and facilities and other 
construction of a temporary nature.
    (c) Normal management elements of principal tasks relating to a 
construction contract cover several categories of tasks with differing 
rates of application throughout the construction period. The principal 
elements of management effort are outlined in this paragraph. Although 
each project has a total management value equal to 100% for all 
elements, the distribution of effort among the various elements will be 
different for each project due to differences in project character or 
size. The basic management elements and the normal range of efforts 
expected to apply for a normal sized project are as follows. When the 
normally expected effort will not be performed by a contractor, this 
fact should be considered in arriving at appropriate fee amounts.

------------------------------------------------------------------------
                                                         Effort range
                 Management elements                 -------------------
                                                       Minimum   Maximum
------------------------------------------------------------------------
I. Broad project planning. Overall project planning         15        25
 and scheduling, establishment of key project
 organization and consultation with the A-E and DOE.
 Performed by highest level of contractor's
 officers, technical personnel and project manager..
II. Field planning. Mobilization and demobilization         18        28
 of top field organization from the contractor's
 existing organization and from other sources as
 necessary. Detailed project planning and scheduling
 for construction of facilities. Performed by the
 project manager and top field professional staff...
III. Labor supervision. Direct supervision of manual        12        16
 employees. Performed by contractor's
 subprofessional staff, such as superintendents and
 foremen (some salaried and some hourly rate). This
 includes the contractor's personnel to coordinate
 and expedite the work of Subcontractors............
IV. Acquisition and subcontracting. Acquisition of          12        16
 other than special equipment. Selection of
 subcontractors and execution and administration of
 subcontracts. Performed by contractor's staff under
 supervision and direction of elements I and II.....
V. Labor relations and recruit-ment (manual).                7        11
 Performed by the contractor's staff under
 supervision and direction of elements I, II and
 III. This includes demobilization of work forces...
VI. Recruitment of supervisory staff. Staffing               4         6
 required to supplement the organization under
 elements I and II, and demobilization during
 completion of the project. Performed by
 contractor's permanent staff and recruitment
 personnel under supervision and direction of
 management elements I and II.......................
VII. Expediting. Expediting contracting performed by         4         6
 contractor's staff and by subcontractors. Performed
 by contractor's staff under supervision and
 direction of elements I and II.....................
VIII. Construction equipment operations. This                4         6
 includes mobilization and demobilization. Performed
 by contractor's staff under supervision, direction
 and coordination of elements I, II, and IV.........
IX. Other services. Timekeeping, cost accounting,            4         6
 estimating, reporting, security, etc., by the
 contractor's staff under supervision and direction
 of elements I and II...............................
------------------------------------------------------------------------

    (d) Fee considerations dealing with the duration of a project are 
usually provided by the consideration given to the degree of complexity 
and magnitude of the work. In only very unusual circumstances should it 
be necessary to separately weight, positively or negatively, for the 
period of services or length of time involved in the project when 
determining fee levels.
    (e) The size of the operation is to a considerable degree a 
continuation of the complexity factor, and the degree and amount of work 
required to be performed by and with the contractor's own resources. 
Generally, no separate weighting, positively or negatively, is required 
for consideration of those factors.
    (f) The degree and amount of work required to be performed by and 
with the contractor's own resources affect the level of fees. Reasonable 
fees should be based on expectations of complete construction services 
normally associated with a construction or construction management 
contract. In the case of a construction contract, reduced services can 
be in the form of excessive subcontracting or supporting acquisition 
actions and labor relations interfaces being made by the government. If 
an unusual amount of such work is performed by other than the 
contractor, it will be necessary to

[[Page 311]]

make downward adjustments in the fee levels to provide for the reduction 
in services required.
    (g) The type of contract to be negotiated and the anticipated 
contractor cost risk shall be considered in establishing the appropriate 
fee objective for the contract.
    (h) When a contract calls for the contractor to use its own 
resources, including facilities and equipment, and to make its own cost 
investment (i.e., when there is no letter-of-credit financing), a 
positive impact on the fee amount shall be reflected.



915.404-4-71-5  Fee schedules.

    (a) The schedules included in this paragraph, adjusted in accordance 
with provisions of this section and 48 CFR 915.404-4-71-6, provide 
maximum fee levels for construction and construction management 
contracts. The fees are related to the estimated cost (fee base) for the 
construction work and services to be performed. The schedule in 
paragraph (d) of this section sets forth the basic fee schedule for 
construction contracts. The schedule in paragraph (f) of this section 
sets forth the basic fee schedule for construction management contracts. 
A separate schedule in paragraph (h) of this section has been developed 
for determining the fee applicable to special equipment purchases and to 
reflect a differing level of fee consideration associated with the 
subcontractor effort under construction management contracts. (See 48 
CFR 915.404-4-71-6(c) and 915.404-4-71-6(d)).
    (b) The schedules cited in paragraph (a) of this section provide the 
maximum fee amount for a CPFF contract arrangement. If a fixed-price 
type contract is to be awarded, the fee amount set forth in the fee 
schedules shall be increased by an amount not to exceed 4 percent of the 
fee base.
    (c) The fee schedule shown in paragraphs (d) and (f) of this section 
assumes a letter of credit financing arrangement. If a contract provides 
for or requires the contractor to make their own cost investment for 
contract performance (i.e., when there is no letter-of-credit 
financing), the fee amounts set forth in the fee schedules shall be 
increased by an amount equal to 5 percent of the fee amount as 
determined from the schedules.
    (d) The following schedule sets forth the base for construction 
contracts:

                     Construction Contracts Schedule
------------------------------------------------------------------------
                                                             Fee   Incr.
              Fee base (dollars)                   Fee       (per   (per
                                                (dollars)   cent)  cent)
------------------------------------------------------------------------
Up to $1 Million.............................  ...........  .....   5.47
1,000,000....................................       54,700   5.47   3.88
3,000,000....................................      132,374   4.41   3.28
5,000,000....................................      198,014   3.96   2.87
10,000,000...................................      341,328   3.41   2.60
15,000,000...................................      471,514   3.14   2.20
25,000,000...................................      691,408   2.77   1.95
40,000,000...................................      984,600   2.46   1.73
60,000,000...................................    1,330,304   2.22   1.56
80,000,000...................................    1,643,188   2.05   1.41
100,000,000..................................    1,924,346   1.92   1.26
150,000,000..................................    2,552,302   1.70   1.09
200,000,000..................................    3,094,926   1.55   0.80
300,000,000..................................    3,897,922   1.30   0.68
400,000,000..................................    4,581,672   1.15   0.57
500,000,000..................................    5,148,364   1.03
Over $500 Million............................    5,148,364  .....   0.57
------------------------------------------------------------------------

    (e) When using the Construction Contracts Schedule for establishing 
maximum payable basic fees, the following adjustments shall be made to 
the Schedule fee amounts for complexity levels, excessive 
subcontracting, normal contractor services performed by the government 
or another contractor:
    (1) The target fee amounts, set forth in the fee schedule, shall not 
be adjusted for a Class A project, which is maximum complexity. A Class 
B project requires a 10 percent reduction in amounts. Class C and D 
projects require a 20 percent and 30 percent reduction, respectively. 
The various classes are defined in 48 CFR 915.404-4-71-4(b).
    (2) The target fee schedule provides for 45 percent of the contract 
work to be subcontracted for such things as electrical and other 
specialties. Excessive subcontracting results when such efforts exceed 
45 percent of the total contract work. To establish appropriate fee 
reductions for excessive subcontracting, the negotiating official should 
first determine the amount of subcontracting as a percentage of the 
total contract work. Next, the negotiating official should determine a 
percentage by which the prime contractor's normal requirement (based on 
a requirement for doing work with its

[[Page 312]]

own forces) is reduced due to the excessive subcontracting and, finally, 
multiply the two percentages to determine a fee reduction factor.
    (3) If acquisition or other services normally expected of the 
contractor (see 48 CFR 915.404-4-71-4(c)) are performed by the 
government, or another DOE prime or operating contractor, a fee 
reduction may also be required. The negotiating official should first 
determine what percentage of the total procurement or other required 
services is performed by others. Then the negotiating official should 
apply this percentage reduction to the normally assigned weightings for 
the management services or effort as discussed in 48 CFR 915.404-4-71-
4(c) to arrive at the appropriate reduction factor.
    (f) The following schedule sets forth the base for construction 
management contracts:

               Construction Management Contracts Schedule
------------------------------------------------------------------------
                                                             Fee   Incr.
              Fee base (dollars)                   Fee       (per   (per
                                                (dollars)   cent)  cent)
------------------------------------------------------------------------
Up to $1 Million.............................  ...........  .....   5.47
1,000,000....................................       54,700   5.47   3.88
3,000,000....................................      132,374   4.41   3.28
5,000,000....................................      198,014   3.96   2.87
10,000,000...................................      341,328   3.41   2.60
15,000,000...................................      471,514   3.14   2.20
25,000,000...................................      691,408   2.77   1.95
40,000,000...................................      984,600   2.46   1.73
60,000,000...................................    1,330,304   2.22   1.56
80,000,000...................................    1,643,188   2.05   1.41
100,000,000..................................    1,924,346   1.92   1.26
150,000,000..................................    2,552,302   1.70   1.09
200,000,000..................................    3,094,926   1.55   0.80
300,000,000..................................    3,897,922   1.30   0.68
400,000,000..................................    4,581,672   1.15   0.57
500,000,000..................................    5,148,364   1.03
Over $500 Million............................    5,148,364  .....   0.57
------------------------------------------------------------------------

    (g) When applying the basic Construction Management Contracts 
Schedule for determining maximum payable fees, no adjustments are 
necessary to such payable fees for contractor Force account labor used 
for work which should otherwise be subcontracted until such Force 
account work exceeds, in the aggregate, 20 percent of the base. 
Excessive use of Force account work results when such effort exceeds 20 
percent of the fee base; and, when this occurs, appropriate fee 
reductions for such excessive Force account labor shall be computed as 
follows:
    (1) Determine the percentage amount of Force account work to total 
contractor effort.
    (2) Determine the percentage amount of subcontract work reduced due 
to the use of Force account work.
    (3) Multiply the two percentages to determine the fee reduction 
factor. It is not expected that reductions in the Construction 
Management Contracts Schedule fee amounts will be made for complexity, 
reduced requirements and similar adjustments as made for construction 
contracts.
    (h) The schedule of fees for consideration of special equipment 
purchases and for consideration of the subcontract program under a 
construction management contract is as follows:

          Special Equipment Purchases/Subcontract Work Schedule
------------------------------------------------------------------------
                                                             Fee   Incr.
              Fee base (dollars)                   Fee       (per   (per
                                                (dollars)   cent)  cent)
------------------------------------------------------------------------
Up to $1 Million.............................  ...........  .....   1.64
1,000,000....................................       16,410   1.64   1.09
2,000,000....................................       27,350   1.37   0.93
4,000,000....................................       45,948   1.15   0.77
6,000,000....................................       61,264   1.02   0.71
8,000,000....................................       75,486   0.94   0.66
10,000,000...................................       88,614   0.89   0.61
15,000,000...................................      119,246   0.79   0.53
25,000,000...................................      171,758   0.69   0.47
40,000,000...................................      242,868   0.61   0.43
60,000,000...................................      329,294   0.55   0.39
80,000,000...................................      406,968   0.51   0.37
100,000,000..................................      480,266   0.48   0.28
150,000,000..................................      619,204   0.41   0.23
200,000,000..................................      732,980   0.37   0.13
300,000,000..................................      867,542   0.29  .....
Over $300 Million............................      867,542  .....    013
------------------------------------------------------------------------


[63 FR 56851, Oct. 23, 1998, as amended at 64 FR 12227, Mar. 11, 1999]



915.404-4-71-6  Fee base.

    (a) The fee base shown in the Construction Contracts Schedule and 
Construction Management Contracts Schedule represents that estimate of 
cost to which a percentage factor is applied to determine maximum fee 
allowances. The fee base is the estimated necessary allowable cost of 
the construction work or other services which are to be performed. It 
shall include the estimated cost for, but is not limited to, the 
following as they may apply in the case of a construction or 
construction management contract:
    (1) Site preparation and utilities.

[[Page 313]]

    (2) Construction (labor-materials-supplies) of buildings and 
auxiliary facilities.
    (3) Construction (labor-materials-supplies) to complete/construct 
temporary buildings.
    (4) Design services to support the foregoing.
    (5) General management and job planning cost.
    (6) Labor supervision.
    (7) Procurement and acquisition administration.
    (8) Construction performed by subcontractors.
    (9) Installation of government furnished or contractor acquired 
special equipment and other equipment.
    (10) Equipment (other than special equipment) which is to become 
Government property (including a component of Government property).
    (b) The fee base for the basic fee determination for a construction 
contract and construction management contract shall include all 
necessary and allowable costs cited in paragraph (a) of this section as 
appropriate to the type of contract; except, any home office G&A expense 
paid as a contract cost per cost principle guidance and procedures shall 
be excluded from the fee base. The fee base shall exclude:
    (1) Cost of land.
    (2) Cost of engineering (A&E work).
    (3) Contingency estimate.
    (4) Equipment rentals or use charges. (See 48 CFR 936.70.)
    (5) Cost of government furnished equipment or materials.
    (6) Special equipment as defined in 48 CFR 936.7201.
    (c) A separate fee base shall be established for special equipment 
for use in applying the Special Equipment Purchases or Subcontract Work 
Schedule (see 48 CFR 915.404-4-71-5(h)). The fee base for determination 
of applicable fees on special equipment shall be based on the estimated 
purchase price of the equipment.
    (d) The fee base under the Construction Management Contracts 
Schedule for a maximum basic fee determination for a construction 
management contract shall be comprised of only the costs of the 
construction manager's own efforts. However, it is recognized that in 
the case of construction management contracts, the actual construction 
work will be performed by subcontractors. In most cases the subcontract 
awards for the construction work will be made by the construction 
management contractor. Occasionally the contract may involve management 
of construction performed under a contract awarded by the Department or 
by one of the Department's operating contractors. In these cases, the 
actual cost of the subcontracted construction work shall be excluded 
from the fee base used to determine the maximum basic fee (under the 
Construction Management Contracts Schedule) applicable to a construction 
management contract. A separate fee base for additional allowances 
(using the Special Equipment Purchases or Subcontract Work Schedule) 
shall be established, which shall be comprised of those subcontract 
construction costs, special equipment purchases, and other items' costs 
that are contracted for or purchased by the construction manager.



915.404-4-72  Special considerations for cost-plus-award-fee contracts.

    (a) When a contract is to be awarded on a cost-plus-award-fee basis 
several special considerations are appropriate. Fee objectives for 
management and operating contracts or other contracts as determined by 
the Procurement Executive, including those using the Construction, 
Construction Management, or Special Equipment Purchases/Subcontract Work 
schedules from 48 CFR 915.404-4-71-5, shall be developed pursuant to the 
procedures set forth in 48 CFR 970.15404-4-8. Fee objectives for other 
cost-plus-award-fee contracts shall be in accordance with 48 CFR 
916.404-2 and be developed as follows:
    (1) The base fee portion of the fee objective of an award fee 
contract may range from 0% up to the 50% level of the fee amount for a 
Cost-Plus-Fixed-Fee (CPFF) contract, arrived at by using the weighted 
guidelines or other techniques (such as those provided in 48 CFR 
915.404-4-71 for construction and construction management contracts). 
However, the base amount should not normally exceed 50% of the otherwise 
applicable fixed fee. In the event this 50% limit is exceeded, 
appropriate documentation shall be entered into the

[[Page 314]]

contract file. In no event shall the base fee exceed 60% of the fixed 
fee amount.
    (2) The base fee plus the amount included in the award fee pool 
should normally not exceed the fixed fee (as subjectively determined or 
as developed from the fee schedule) by more than 50%. However, in the 
event the base fee is to be less than 50% of the fixed fee, the maximum 
potential award fee may be increased proportionately with the decreases 
in base fee amounts.
    (3) The following maximum potential award fees shall apply in award 
fee contracts: (percent is stated as percent of fee schedule amounts).

------------------------------------------------------------------------
                                                               Maximum
               Base fee percent                  Award fee      total
                                                  percent     percentage
------------------------------------------------------------------------
50............................................          100          150
40............................................          120          160
30............................................          140          170
20............................................          160          180
10............................................          180          190
0.............................................          200          200
------------------------------------------------------------------------

    (b) Prior approval of the Procurement Executive, is required for 
total fee (base plus award fee pool) exceeding the guidelines in 48 CFR 
915.404-4-72(a)(3).

[63 FR 56851, Oct. 23, 1998, as amended at 64 FR 12229, Mar. 11, 1999]



915.408-70  Solicitation provision and contract clause.

    The contracting officer (after deleting ``under the clause at 48 CFR 
970.5203-3, Contractor's Organization'' from paragraph (a) if not a 
management and operating contract) shall insert the clause at 48 CFR 
952.215-70, Key Personnel, in contracts under which performance is 
largely dependent on the expertise of specific key personnel.

[65 FR 81006, Dec. 22, 2000]



                   Subpart 915.6_Unsolicited Proposals



915.602  Policy.

    (a) Present and future needs demand the involvement of all resources 
in exploring alternative energy sources and technologies. To achieve 
this objective, it is DOE policy to encourage external sources of unique 
and innovative methods, approaches, and ideas by stressing submission of 
unsolicited proposals for government support. In furtherance of this 
policy and to ensure the integrity of the acquisition process through 
application of reasonable controls, the DOE:
    (1) Disseminates information on areas of broad technical concern 
whose solutions are considered relevant to the accomplishment of DOE's 
assigned mission areas;
    (2) Encourages potential proposers to consult with program personnel 
before expending resources in the development of written unsolicited 
proposals;
    (3) Endeavors to distribute unsolicited proposals to all interested 
organizations within DOE;
    (4) Processes unsolicited proposals in an expeditious manner and, 
where practicable, keeps proposers advised as discrete decisions are 
made;
    (5) Assures that each proposal is evaluated in a fair and objective 
manner; and, (6) Assures that each proposal will be used only for its 
intended purpose and the information, subject to applicable laws and 
regulations, contained therein will not be divulged without prior 
permission of the proposer.
    (b) Extensions of contract work resulting from unsolicited proposals 
shall be processed in accordance with the procedures at 48 CFR 943.170.



915.603  General. (DOE coverage--paragraph (e)).

    (e) Unsolicited proposals for the performance of support services 
are, except as discussed in this paragraph, unacceptable as the 
performance of such services is unlikely to necessitate innovative and 
unique concepts. There may be rare instances in which an unsolicited 
proposal offers an innovative and unique approach to the accomplishment 
of a support service. If such a proposal offers a previously unknown or 
an alternative approach to generally recognized techniques for the 
accomplishment of a specific service(s) and such approach will provide 
significantly greater economy or enhanced quality, it may be considered 
for acceptance. Such acceptance shall, however, require approval of the 
acquisition of support services in accordance with applicable DOE 
Directives and be

[[Page 315]]

processed as a deviation to the prohibition in this paragraph.



915.605  Content of unsolicited proposals. (DOE coverage--paragraph (b)).

    (b)(5) Unsolicited proposals for nonnuclear energy demonstration 
activities not covered by existing formal competitive solicitations or 
program opportunity notices may include a request for federal assistance 
or participation, and shall be subject to the cost sharing provisions of 
48 CFR 917.70.



915.606  Agency procedures. (DOE coverage-paragraph (b)).

    (b) Unless otherwise specified in a notice of program interest, all 
unsolicited proposals should be submitted to the Unsolicited Proposal 
Coordinator, U.S. Department of Energy, National Energy Technology 
Laboratory (PGH), Pittsburgh, PA 15236-0940. If the proposer has 
ascertained the cognizant program office through preliminary contacts 
with program staff, the proposal may be submitted directly to that 
office. In such instances, the proposer should separately send a copy of 
the proposal cover letter to the unsolicited proposal coordinator to 
assure that the proposal is logged in the Department's automated 
tracking system for unsolicited proposals.

[63 FR 56851, Oct. 23, 1998, as amended atq 67 FR 14871, Mar. 28, 2002]



915.607  Criteria for acceptance of an unsolicited proposal. (DOE coverage
--paragraph (c)).

    (c) DOE's cost participation policy, at 48 CFR 917.70, shall be 
followed in determining the extent to which the DOE will participate in 
the cost for the proposed effort.



PART 916_TYPES OF CONTRACTS--Table of Contents




                   Subpart 916.2_Fixed-Price Contracts

Sec.
916.203 Fixed-price contracts with economic price adjustments.
916.203-4 Contract clauses.

               Subpart 916.3_Cost-Reimbursement Contracts

916.306 Cost-plus-fixed-fee contracts.
916.307 Contract clauses.

                    Subpart 916.4_Incentive Contracts

916.404-2 Cost-plus-award-fee contracts.

               Subpart 916.5_Indefinite-Delivery Contracts

916.504 Indefinite-quantity contracts.
916.505 Ordering.

   Subpart 916.6_Time and Materials, Labor Hour, and Letter Contracts

916.601 Time and Materials (DOE coverage (c)).

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 11972, Mar. 28, 1984, unless otherwise noted.



                   Subpart 916.2_Fixed-Price Contracts



916.203  Fixed-price contracts with economic price adjustments.



916.203-4  Contract clauses.

    (d)(2) The Head of the Contracting Activity, or designee, for 
contracts estimated to be within the limits of their delegated 
authority, may approve the use of an economic price adjustment clause 
when appropriate in accordance with (FAR) 48 CFR 16.203-4.

[49 FR 11955, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



               Subpart 916.3_Cost-Reimbursement Contracts



916.306  Cost-plus-fixed-fee contracts.

    (c)(2) The Head of the Contracting Activity, or designee, for 
contracts estimated to be within their delegated authority, may approve 
(sign) the determination and findings establishing the basis for 
application of the statutory price or fee limitations.

[49 FR 11955, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



916.307  Contract clauses.

    (j) The contracting officer shall insert the clause at FAR 52.216-
15, Predetermined Indirect Cost Rates, modified as specified in 952.216-
15 in solicitations and contracts when a cost-reimbursement research and 
development

[[Page 316]]

contract with a State or local government is contemplated and 
predetermined indirect cost rates are to be used.



                    Subpart 916.4_Incentive Contracts



916.404-2  Cost-plus-award-fee contracts.

    (d) Fee Determination Plans. Award fee arrangements limited to 
technical performance considerations are prohibited because they may 
increase cost disproportionately to any benefits gained. Instead, the 
award fee arrangement shall include both technical performance 
(including scheduling as appropriate) and business management 
considerations tailored to the needs of the particular situation. In 
addition, in a situation where cost estimating reliability and other 
factors are such that the negotiation of a separate predetermined 
incentive sharing arrangement applicable to cost performance is 
determined both feasible and advantageous, cost incentives may be added. 
The resulting contract would then be identified as a cost-plus-
incentive-fee/award-fee combination type. The goals and evaluation 
criteria should be results-oriented. The award fee should be 
concentrated on the end product of the contract, that is, output, be it 
hardware, research and development, demonstration or services, together 
with business management considerations. However, input criteria such as 
equal employment opportunity, small business programs, functional 
management areas, such as safety, security, etc., should not be 
disregarded and may be appropriate criteria upon which to base some part 
of the award fee. Specific goals or objectives shall be established in 
relation to each performance evaluation criterion against which 
contractor performance is measured.

[49 FR 11955, Mar. 28, 1984, as amended at 59 FR 9105, Feb. 25, 1994]



               Subpart 916.5_Indefinite-Delivery Contracts



916.504  Indefinite-quantity contracts. (DOE coverage--paragraph (c))

    (c) The contracting officer shall establish minimum ordering 
guarantees with each awardee for all indefinite-quantity, multiple award 
contracts to ensure that adequate consideration exists to contractually 
bind each awardee to participate in the ordering process throughout the 
term of the multiple award contract. Minimum ordering guarantees should 
be equal among all awardees, and shall be determined on a case-by-case 
basis for each acquisition commensurate with the size, scope and 
complexity of the contract requirements.

[62 FR 53757, Oct. 16, 1997]



916.505  Ordering. (DOE coverage--paragraph (b))

    (b) (4) The Director, Office of Management Systems, Office of 
Procurement and Assistance Management, is designated as the DOE 
Ombudsman for task and delivery order contracts in accordance with 48 
CFR 16.505(b)(4).
    (5) The Heads of Contracting Activities shall designate a senior 
manager to serve as the Contracting Activity Ombudsman for task and 
delivery order contracts. If, for any reason, the Contracting Activity 
Ombudsman is unable to execute the duties of the position, the Head of 
the Contracting Activity shall designate an Acting Contracting Activity 
Ombudsman.
    (6) The Contracting Activity Ombudsman shall:
    (i) Be independent of the contracting officer who awarded and/or is 
administering the contract under which a complaint is submitted;
    (ii) Not assume any duties and responsibilities pertaining to the 
evaluation or selection of an awardee for the issuance of an order under 
a multiple award, task or delivery order contract;
    (iii) Review complaints from contractors awarded a task or delivery 
order contract;
    (iv) Collect all facts from the cognizant organizations or 
individuals that are relevant to a complaint submitted to ensure that 
the complainant

[[Page 317]]

and all contractors were afforded a fair opportunity to be considered 
for the order issued in accordance with the procedures set forth in each 
awardees' contract;
    (v) Maintain a written log to track each complaint submitted from 
receipt through disposition;
    (vi) Ensure that no information is released which is determined to 
be proprietary or is designated as source selection information; and
    (vii) Resolve complaints at the contracting activity for which they 
have cognizance.
    (7) If, upon review of all relevant information, the Contracting 
Activity Ombudsman determines that corrective action should be taken, 
the Contracting Activity Ombudsman shall report the determination to the 
cognizant contracting officer. Issues which cannot be so resolved should 
be forwarded to the DOE Ombudsman.

[62 FR 53757, Oct. 16, 1997]



   Subpart 916.6_Time and Materials, Labor Hour, and Letter Contracts



916.601  Time and Materials (DOE coverage (c)).

    (c) Limitations. The Contracting Officer is not required to execute 
a separate Determination and Findings as required by FAR 16.601 3(c) if 
other file documentation adequately justifies contract actions.

[67 FR 14871, Mar. 28, 2002]



PART 917_SPECIAL CONTRACTING METHODS--Table of Contents




            Subpart 917.6_Management and Operating Contracts

Sec.
917.600 Scope of subpart.
917.601 Definitions.
917.602 Policy.

                    Subpart 917.70_Cost Participation

917.7000 Scope of subpart.
917.7001 Policy.

Subpart 917.72_Program Opportunity Notices for Commercial Demonstrations

917.7200 Scope of subpart.
917.7201 Policy.
917.7201-1 General.

      Subpart 917.73_Program Research and Development Announcements

917.7300 Scope of subpart.
917.7301 Policy.
917.7301-1 General.

      Subpart 917.74_Acquisition, Use, and Disposal of Real Estate

917.7401 General.
917.7402 Policy.
917.7403 Application.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 11974, Mar. 28, 1984, unless otherwise noted.



            Subpart 917.6_Management and Operating Contracts



917.600  Scope of subpart.

    (a) This subpart implements 48 CFR subpart 17.6, Management and 
Operating Contracts. Departmental policies, procedures, provisions and 
clauses to be used in the award and administration of management and 
operating contracts that either implement or supplement the Federal 
Acquisition Regulation and parts 901 through 952 of this chapter are 
contained in 48 CFR part 970.
    (b) The requirements of this subpart apply to any Department of 
Energy management and operating contract, including performance-based 
management contracts as defined in 48 CFR 917.601. References in this 
subpart to ``management and operating contracts'' include performance-
based management contracts.

[65 FR 81006, Dec. 22, 2000]



917.601  Definitions.

    Performance-based contracting has the meaning contained in 48 CFR 
37.101.
    Performance-based management contract means a management and 
operating contract that employs, to the maximum extent practicable, 
performance-based contracting concepts and methodologies through the 
application of results-oriented statements of work; clear objective 
performance standards and measurement tools; and incentives

[[Page 318]]

to encourage superior contractor performance.

[62 FR 34861, June 27, 1997, as amended at 65 FR 81006, Dec. 22, 2000]



917.602  Policy.

    (a) The use of a management and operating contract must be 
authorized by the Secretary, Deputy Secretary or Under Secretary.
    (b) It is the policy of the Department of Energy to provide for full 
and open competition in the award of management and operating contracts, 
including performance-based management contracts.
    (c) A management and operating contract may be awarded or extended 
at the completion of its term without providing for full and open 
competition only when such award or extension is justified under one of 
the statutory authorities identified in 48 CFR 6.302 and only when 
authorized by the Secretary. Documentation and processing requirements 
for justifications for the use of other that full and open competition 
shall be accomplished in accordance with internal agency procedures

[65 FR 81006, Dec. 22, 2000, as amended at 67 FR 14871, Mar. 28, 2002]



                    Subpart 917.70_Cost Participation

    Source: 61 FR 41706, Aug. 9, 1996, unless otherwise noted.



917.7000  Scope of subpart.

    (a) This subpart sets forth the DOE policy on cost participation by 
organizations performing research, development, and/or demonstration 
projects under DOE prime contracts. This subpart does not cover efforts 
and projects performed for DOE by other Federal agencies.
    (b) Cost participation is a generic term denoting any situation 
where the Government does not fully reimburse the performer for all 
allowable costs necessary to accomplish the project or effort under the 
contract. The term encompasses cost sharing, cost matching, cost 
limitation (direct or indirect), participation in kind, and similar 
concepts.



917.7001  Policy.

    (a) When DOE supports performer research, development, and/or 
demonstration efforts, where the principal purpose is ultimate 
commercialization and utilization of the technologies by the private 
sector, and when there are reasonable expectations that the performer 
will receive present or future economic benefits beyond the instant 
contract as a result of performance of the effort, it is DOE policy to 
obtain cost participation. Full funding may be provided for early phases 
of development programs when the technological problems are still great.
    (b) In making the determination to obtain cost participation, and 
evaluating present and future economic benefits to the performer, DOE 
will consider the technical feasibility, projected economic viability, 
societal and political acceptability of commercial application, as well 
as possible effects of other DOE-supported projects in competing 
technologies.
    (c) The propriety, manner, and amount of cost participation must be 
decided on a case-by-case basis.
    (d) Cost participation is required for demonstration projects unless 
exempted by the Under Secretary. Demonstration projects, pursuant to 
this subpart, include demonstrations of technological advances and field 
demonstrations of new methods and procedures, and demonstrations of 
prototype commercial applications for the exploration, development, 
production, transportation, conversion, and utilization of energy 
resources.



Subpart 917.72_Program Opportunity Notices for Commercial Demonstrations

    Source: 61 FR 41706, Aug. 9, 1996, unless otherwise noted.



917.7200  Scope of subpart.

    (a) This subpart discusses the policy for the use of a program 
opportunity notice solicitation approach to accelerate the demonstration 
of the technical feasibility and commercial application of all 
potentially beneficial non-nuclear energy sources and utilization 
technologies.

[[Page 319]]

    (b) This subpart applies to demonstrations performed by individuals, 
educational institutions, commercial or industrial organizations, or 
other private entities, public entities, including State and local 
governments, but not other Federal agencies. For purposes of this 
subpart, commercial demonstration projects include demonstrations of 
technological advances, field demonstrations of new methods and 
procedures, and demonstration of prototype commercial applications for 
the exploration, development, production, transportation, conversion, 
and utilization of non-nuclear energy resources.



917.7201  Policy.



917.7201-1  General.

    (a) It is DOE's intent to encourage the submission of proposals to 
accelerate the demonstration of the technical, operational, economic, 
and commercial feasibility and environmental acceptability of particular 
energy technologies, systems, subsystems, and components. Program 
opportunity notices will be used to provide information concerning 
scientific and technological areas encompassed by DOE's programs. DOE 
shall, from time to time, issue program opportunity notices for 
proposals for demonstrations of various forms of non-nuclear energy and 
technology utilization.
    (b) Each program opportunity notice shall as a minimum describe: the 
goal of the intended demonstration effort; the time schedule for award; 
evaluation criteria; program policy factors; the amount of cost detail 
required; and proposal submission information. Program policy factors 
are those factors which, while not appropriate indicators of a 
proposal's individual merit (i.e., technical excellence, proposer's 
ability, cost, etc.), are relevant and essential to the process of 
choosing which of the proposals received will, taken together, best 
achieve the program objectives. All such factors shall be predetermined 
and specified in the notice so as to notify proposers that factors which 
are essentially beyond their control will affect the selection process.



      Subpart 917.73_Program Research and Development Announcements

    Source: 61 FR 41707, Aug. 9, 1996, unless otherwise noted.



917.7300  Scope of subpart.

    (a) This subpart discusses the policy for the use of a program 
research and development announcement (PRDA) solicitation approach to 
obtain and select proposals from the private sector for the conduct of 
research, development, and related activities in the energy field.



917.7301  Policy.



917.7301-1  General.

    (a) PRDAs shall be used to provide potential proposers with 
information concerning DOE's interest in entering into arrangements for 
research, development, and related projects in specified areas of 
interest. It is DOE's intent to solicit the submission of ideas which 
will serve as a basis for research, development, and related activities 
in the energy field. It is DOE's desire to encourage the involvement of 
small business concerns, small disadvantage business concerns, and 
women-owned small business concerns in research and development 
undertaken pursuant to PRDAs.
    (b) The PRDA should not replace existing acquisition procedures 
where a requirement can be sufficiently defined for solicitation under 
standard advertised or negotiated acquisition procedures. Similarly, it 
should not inhibit or curtail the submission of unsolicited proposals. 
However, a proposal which is submitted as though it were unsolicited but 
is in fact germane to an existing PRDA shall be treated as though 
submitted in response to the announcement or returned without action to 
the proposer, at the proposer's option. Further, the PRDA is not to be 
used in a competitive situation where it is appropriate to negotiate a 
study contract to obtain analysis and recommendations to be incorporated 
in the subsequent request for proposals.
    (c) The PRDA is to be used only where:

[[Page 320]]

    (1) Research and development is required in support of a specific 
project area within an energy program with the objective of advancing 
the general scientific and technological base, and this objective is 
best achieved through:
    (i) A diversity of possible approaches, within the current state of 
the art, available for solving the problems;
    (ii) The involvement of a broad spectrum of organizations in seeking 
out solutions to the problems posed;
    (iii) The application of the unique qualifications or specialized 
capabilities of many individual proposers which will enable them to 
perform portions of the research project (without necessarily possessing 
the qualifications to perform the entire project) so that the overall 
support may be broken into segments which cannot be ascertained in 
advance; and,
    (iv) The fostering of new and creative solutions.
    (2) Consistent with paragraph (c)(1) of this section, it is 
anticipated that choices will have to be made among dissimilar concepts, 
ideas, or approaches; and
    (3) It is determined that a broad range of organizations exist that 
would be capable of contributing towards the overall research and 
development goals identified in paragraph (c)(1) of this section.
    (d) Each PRDA shall as a minimum describe: the area(s) of program 
interest; time schedule for award; proposal submittal information; 
evaluation criteria; and program policy factors. The PRDA should clearly 
emphasize to proposers that program policy factors are essentially 
beyond their control and will affect the selection process. The PRDA 
should also state that DOE reserves the right to select for award or 
support any, all, or none of the proposals received in response to an 
announcement.



      Subpart 917.74_Acquisition, Use, and Disposal of Real Estate

    Source: 61 FR 41707, Aug. 9, 1996, unless otherwise noted.



917.7401  General.

    Special circumstances and situations may arise under cost-type 
contracts when, in the performance of the contract or subcontract, the 
performer shall be required, or otherwise find it necessary, to acquire 
real estate or interests therein by:
    (a) Purchase, on DOE's behalf or in its own name, with title 
eventually vesting in the Government.
    (b) Lease, and DOE assumes liability for, or otherwise will pay for 
the obligation under the lease.
    (c) Acquisition of temporary interest through easement, license or 
permit, and DOE funds the cost of the temporary interest.



917.7402  Policy.

    It is the policy of the Department of Energy that, when real estate 
acquisitions are made, the following policies and procedures shall be 
applied to such acquisitions:
    (a) Real estate acquisitions shall be mission essential; 
effectively, economically, and efficiently managed and utilized; and 
disposed of promptly, when not needed;
    (b) Acquisitions shall be justified, with documentation which 
describes the need for the acquisitions, general requirements, cost, 
acquisition method to be used, site investigation reports, site 
recommended for selection, and property appraisal reports; and
    (c) Acquisition by lease, in addition to the requirements in 
paragraphs (a) and (b) of this section:
    (1) Shall not exceed a one-year term if funded by one-year 
appropriations.
    (2) May exceed a one-year term, when the lease is for special 
purpose space funded by no-year appropriations and approved by the 
Department.
    (3) Shall contain an appropriate cancellation clause which limits 
the Government's obligation to no more than the amount of rent to the 
earliest cancellation date plus a reasonable cancellation payment.
    (4) Shall be consistent with Government laws and regulations 
applicable to real estate management.



917.7403  Application.

    The clause at 48 CFR 952.217-70 shall be included in contracts or 
modifications where contractor acquisitions are expected to be made.

[[Page 321]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 919_SMALL BUSINESS PROGRAMS--Table of Contents




                         Subpart 919.2_Policies

Sec.
919.201 General policy.

               Subpart 919.5_Set-Asides for Small Business

919.501 General.
919.502-2 Total set-asides.
919.503 Setting aside a class of acquisitions.

     Subpart 919.6_Certificates of Competency and Determinations of 
                               Eligibility

919.602-1 Referral.

 Subpart 919.7_Subcontracting With Small Business, Small Disadvantaged 
            Business, and Women-Owned Small Business Concerns

919.705-6 Postaward responsibilities of the contracting officer.

 Subpart 919.8_Contracting With the Small Business Administration (The 
                              8(a) Program)

919.805-2 Procedures.

     Subpart 919.70_The Department of Energy Mentor-Protege Program

919.7001 Scope of subpart.
919.7002 Definitions.
919.7003 General policy.
919.7004 General prohibitions.
919.7005 Eligibility to be a Mentor.
919.7006 Incentives for DOE contractor participation.
919.7007 Eligibility to be a Protege.
919.7008 Selection of Proteges.
919.7009 Process for participation in the program.
919.7010 Contents of Mentor-Protege Agreement.
919.7011 Developmental assistance.
919.7012 Review and approval process of agreement by OSDBU.
919.7013 Reports.
919.7014 Solicitation provision.

    Authority: 40 U.S.C. 486 (c); 42 U.S.C. 7101, et seq.; 42 U.S.C. 
2201; 50 U.S.C. 2401, et seq.

    Source: 49 FR 11997, Mar. 28, 1984, unless otherwise noted.



                         Subpart 919.2_Policies



919.201  General policy.

    (c) The Director, Office of Small and Disadvantaged Business 
Utilization, Headquarters, is responsible for the administration of the 
DOE small, small disadvantaged, and women-owned small business programs. 
The Executive Director, Federal Energy Regulatory Commission, is 
responsible for the administration of the Commission's small, small 
disadvantaged, and women-owned small business programs. This includes 
responsibility for developing, implementing, executing, and managing 
these programs, providing advice on these programs, and representing DOE 
before other Government agencies on matters primarily affecting small, 
small disadvantaged, and women-owned small businesses. The Heads of 
Contracting Activities (HCAs) shall appoint a small business specialist.

[50 FR 12185, Mar. 27, 1985, as amended at 59 FR 9106, Feb. 25, 1994; 61 
FR 21976, May 13, 1996]



               Subpart 919.5_Set-Asides for Small Business



919.501  General.

    (c) The Department has established an internal comprehensive review 
and screening process for acquisitions exceeding the simplified 
acquisition threshold. The review is intended to enhance the prospect of 
participation by small business, small disadvantaged business, and 
women-owned small business concerns.
    (g) The policy prescribed by FAR 19.501(g), which requires that a 
product or service acquired by a successful small business set-aside 
shall continue to be acquired on a set-aside basis, is applicable to DOE 
on a contracting activity-wide basis. The small and disadvantaged 
business specialist at a contracting activity shall maintain a

[[Page 322]]

list of such small business set-aside awards.

[52 FR 38425, Oct. 16, 1987, as amended at 59 FR 9106, Feb. 25, 1994; 61 
FR 21977, May 13, 1996]



919.502-2  Total set-asides.

    In considering set-asides in the area of architect engineer 
contracts, contracting personnel must first consider the special 
procedures required by the Brooks Act, Pub. L. 92-582 pertaining to this 
type acquisition.



919.503  Setting aside a class of acquisitions.

    By agreement with SBA, the DOE has established a class set-aside for 
construction acquisitions not exceeding $3 million, including new 
construction and repair and alteration of structures. Lists of other 
class set-asides shall be maintained by all DOE contracting offices. 
These lists shall be updated at least annually.



     Subpart 919.6_Certificates of Competency and Determinations of 
                               Eligibility



919.602-1  Referral.

    (a)(2) The contracting officer shall coordinate with the small 
business specialist and the SBA procurement center representative prior 
to referring a determination of nonresponsibility of a small business to 
the SBA Area Office.

[52 FR 38425, Oct. 16, 1987, as amended at 61 FR 21977, May 13, 1996; 63 
FR 56860, Oct. 23, 1998]



 Subpart 919.7_Subcontracting With Small Business, Small Disadvantaged 
            Business, and Women-Owned Small Business Concerns



919.705-6  Postaward responsibilities of the contracting officer.

    A copy of the notification to the SBA of awards of contracts, 
amendments or modifications that contain subcontracting plans, as 
required by FAR 19.705-6(a), shall be provided to the Office of Small 
and Disadvantaged Business Utilization.

[49 FR 11997, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



 Subpart 919.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



919.805-2  Procedures.

    Acquisitions involving section 8(a) competition must comply with 
source selection procedures set forth in the FAR in accordance with 13 
CFR 124.311(e)(1).

[63 FR 56860, Oct. 23, 1998]



     Subpart 919.70_The Department of Energy Mentor-Protege Program

    Source: 65 FR 21369, Apr. 21, 2000, unless otherwise noted.



919.7001  Scope of subpart.

    The Department of Energy (DOE) Mentor-Protege Program is designed to 
encourage DOE prime contractors to assist small disadvantaged firms 
certified by the Small Business Administration (SBA) under Section 8(a) 
of the Small Business Act (8(a)), other small disadvantaged businesses, 
women-owned small businesses, Historically Black Colleges and 
Universities, and other minority institutions of higher learning, and 
small business concerns owned and controlled by service disabled 
veterans in enhancing their capabilities to perform contracts and 
subcontracts for DOE and other Federal agencies. The program seeks to 
foster long-term business relationships between these small business 
entities and DOE prime contractors, and to increase the overall number 
of these small business entities that receive DOE contract and 
subcontract awards.



919.7002  Definitions.

    Historically Black Colleges and Universities (HBCUs) means an 
institution determined by the Secretary of Education to meet the 
requirements of 34 CFR 608.2.

[[Page 323]]

    Other minority institutions of higher learning means an institution 
determined by the Secretary of Education to meet the requirements of 20 
U.S.C. 1067k.
    Small business concern owned and controlled by service-disabled 
veterans means a small business concern as defined in Public Law 106-50, 
Veterans Entrepreneurship and Small Business Development Act of 1999.
    Small disadvantaged business means a small business concern owned 
and controlled by socially and economically disadvantaged individuals 
that meets the requirements of 13 CFR part 124, subpart B.
    Women-owned small business means a small business concern that meets 
the requirements of 15 U.S.C. 637(d)(3)(D).



919.7003  General policy.

    (a) DOE contractors eligible under 48 CFR 919.7005 may enter into 
agreements with businesses certified by the SBA in the 8(a) Program, 
other small disadvantaged businesses, women-owned small businesses, 
HBCUs, other minority institutions of higher learning, and small 
business concerns owned and controlled by service disabled veterans to 
provide those firms appropriate developmental assistance to enhance the 
capabilities of Proteges.
    (b) Costs incurred by a Mentor to provide developmental assistance, 
as described in 919.7011, are allowable only to the extent that they are 
incurred in performance of a contract identified in the Mentor-Protege 
Agreement and are otherwise allowable in accordance with the cost 
principles applicable to that contract.
    (c) Headquarters Office of Small and Disadvantaged Business 
Utilization (OSDBU) is the DOE Program Manager for the Mentor-Protege 
Program.



919.7004  General prohibitions.

    DOE will not reimburse the costs of a Mentor in providing any form 
of developmental assistance to a Protege except as provided in 
919.7003(b).



919.7005  Eligibility to be a Mentor.

    To be eligible for recognition by DOE as a Mentor, an entity must be 
performing at least one contract for DOE.



919.7006  Incentives for DOE contractor participation.

    (a) Under cost-plus-award fee contracts, approved Mentor firms may 
earn award fees associated with their performance as a Mentor. The award 
fee plan may include provision for the evaluation of the contractor's 
utilization of 8(a) firms, other small disadvantaged businesses, women-
owned small businesses, HBCUs, other minority institutions of higher 
learning and small business concerns owned and controlled by service 
disabled veterans. DOE may evaluate the Mentor's performance in the DOE 
Mentor-Protege Program under any Mentor-Protege Agreement(s) as a 
separate element of the award fee plan.
    (b) Mentors shall receive credit for subcontracts awarded pursuant 
to their Mentor-Protege Agreements toward subcontracting goals contained 
in their subcontracting plan.



919.7007  Eligibility to be a Protege.

    (a) To be eligible for selection as a Protege, a firm must:
    (1) Be a small business certified under Section 8(a) of the Small 
Business Act by SBA, other small disadvantaged business, a women-owned 
small business, HBCU, or any other minority institution of higher 
learning, or a small business concern owned and controlled by service 
disabled veterans;
    (2) Be eligible for receipt of government contracts;
    (3) Have been in business for at least two (2) years prior to 
application for enrollment into the Mentor-Protege Program; and
    (4) Be able to certify as a small business according to the Standard 
Industrial Code for the services or supplies to be provided by the 
Protege under its subcontract with the Mentor.
    (b) A prospective Mentor may rely in good faith on written 
representations by a prospective Protege that the Protege meets the 
requirements in paragraph (a) of this section.



919.7008  Selection of Proteges.

    (a) A Mentor firm is solely responsible for selecting one or more 
Protege entities from firms eligible under 48 CFR 919.7007.

[[Page 324]]

    (b) A Mentor may have more than one Protege; however, a Protege may 
have only one Mentor.
    (c) The selection of Protege firms by Mentor firms may not be 
protested, except as provided in paragraph (d) of this section.
    (d) Only protests regarding the small business size status of a firm 
to be a Protege will be considered and shall be submitted to the DOE 
Office of Small and Disadvantaged Business Utilization for resolution. 
If that office is unable to resolve a protest, it will refer the matter 
to the Small Business Administration for resolution in accordance with 
13 CFR part 121.



919.7009  Process for participation in the program.

    A prospective Mentor must submit the following to the DOE Mentor-
Protege Program Manager.
    (a) A statement that it is eligible, as of the date of application, 
for the award of Federal contracts;
    (b) A statement that it is currently performing at least one 
contract for DOE;
    (c) The DOE contract number, type of contract, period of performance 
(including options), title of technical program effort, name of DOE 
technical program manager (including contact information) and the DOE 
contracting activity; and
    (d) An original and two copies of the Mentor-Protege Agreement 
signed by the chief executive officer or designee of the Mentor firm and 
the chief executive officer of the Protege firm.



919.7010  Contents of Mentor-Protege Agreement.

    The proposed Mentor-Protege Agreement must contain:
    (a) Names, addresses and telephone numbers of Mentor and Protege 
firms and a point of contact within each firm who will oversee the 
Agreement;
    (b) Requirements for the Mentor firm or the Protege firm to notify 
the other entity, DOE Headquarters OSDBU, and the contracting officer in 
writing at least 30 days in advance of the Mentor firm's or the Protege 
firm's intent to voluntarily terminate or withdraw from the Mentor-
Protege Agreement (such termination would not terminate any existing 
subcontract between the Mentor and the Protege);
    (c) A description of the form of developmental assistance program 
that will be provided by the Mentor to the Protege firm, including a 
description of any subcontract work, and a schedule for providing the 
assistance and the criteria for evaluation of the Protege's 
developmental success (48 CFR 919.7011);
    (d) A listing of the number and types and estimated amount of 
subcontracts to be awarded to the Protege firm;
    (e) Term of the Agreement;
    (f) Procedures to be invoked should DOE terminate its recognition of 
the Agreement for good cause (such termination of DOE recognition would 
not constitute a termination of the subcontract between the Mentor and 
the Protege);
    (g) Provision for the Mentor firm to submit to the DOE Mentor-
Protege Program Manager a ``lessons learned'' evaluation developed by 
the Mentor at the conclusion of the Mentor-Protege Agreement;
    (h) Provision for the submission by the Protege firm of a ``lessons 
learned'' evaluation to the DOE Mentor-Protege Program Manager at the 
conclusion of the Mentor-Protege Agreement;
    (i) Description of how the development assistance will potentially 
increase subcontracting opportunities for the Protege firm;
    (j) Provision for the Mentor firm to brief the DOE Mentor-Protege 
Program Manager, the technical program manager(s), and the contracting 
officer at the conclusion of each year in the Mentor-Protege Program 
regarding program accomplishments as pertains to the approved Agreement 
(where possible, this review may be incorporated into the normal program 
review for the Mentor's contract);
    (k) Recognition that costs incurred by a Mentor to provide 
developmental assistance, as described in 48 CFR 919.7011, are allowable 
only to the extent that they are incurred in performance of a contract 
identified in the Mentor-Protege Agreement and are otherwise allowable 
in accordance with the cost principles applicable to that contract (the 
DOE Mentor-Protege

[[Page 325]]

Program has no appropriation for paying for developmental assistance); 
and
    (l) Other terms and conditions, as appropriate.



919.7011  Developmental assistance.

    (a) The forms of developmental assistance a Mentor may provide to a 
Protege include, but are not limited to:
    (1) Management guidance relating to:
    (i) Financial management,
    (ii) Organizational management,
    (iii) Overall business management planning,
    (iv) Business development, and
    (v) Marketing assistance;
    (2) Engineering and other technical assistance;
    (3) Noncompetitive award of subcontracts under DOE or other Federal 
contracts where otherwise authorized;
    (4) Award of subcontracts in the Mentor's commercial activities;
    (5) Progress payments based on costs;
    (6) Rent-free use of facilities and/or equipment owned or leased by 
Mentor; and
    (7) Temporary assignment of Mentor personnel to the Protege for 
purposes of training.
    (b) Costs incurred by a Mentor to provide developmental assistance, 
as described in paragraph (a) of this section, are allowable only to the 
extent provided at 48 CFR 919.7003(b).



919.7012  Review and approval process of agreement by OSDBU.

    (a) OSDBU will review the proposed Mentor-Protege Agreement under 48 
CFR 919.7010 and will complete its review and assessment no later than 
30 days after receipt. OSDBU will provide a copy of its assessment to 
the cognizant DOE technical program manager and contracting officer for 
review and concurrence.
    (b) If OSDBU approves the Agreement, the Mentor may implement the 
developmental assistance program.
    (c) Upon finding deficiencies that DOE considers correctable, the 
OSDBU will notify the Mentor and request information to be provided 
within 30 days that may correct the deficiencies. The Mentor may then 
provide additional information for reconsideration. The review of any 
supplemental material will be completed within 30 days after receipt by 
the OSDBU and the Agreement either approved or disapproved.



919.7013  Reports.

    (a) Prior to performing an evaluation of a Mentor's performance 
under its Mentor-Protege Agreement for use in award fee evaluations, the 
Mentor-Protege Program Manager must consult with the cognizant DOE 
technical program manager and must provide a copy of the performance 
evaluation comments regarding the technical effort and Mentor-Protege 
development to the contracting officer.
    (b) The DOE Mentor-Protege Program Manager must submit semi-annual 
reports to the cognizant contracting officer regarding the participating 
Mentor's performance in the Program for use in the award fee 
determination process.
    (c) The Mentor firm must submit progress reports to the DOE Mentor-
Protege Program Manager semi-annually.



919.7014  Solicitation provision.

    The cognizant contracting officer must insert the provision at 
952.219-70, DOE Mentor-Protege Program, in all solicitations with an 
estimated value in excess of the simplified acquisition threshold.



PART 922_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION--Table of Contents




                   Subpart 922.1_Basic Labor Policies

Sec.
922.103 Overtime.
922.103-4 Approvals.
922.103-5 Contract clauses.

             Subpart 922.6_Walsh-Healey Public Contracts Act

922.608-3 Protests against eligibility.
922.608-4 Award pending final determination.
922.608-5 Award.
922.608-6 Postaward.

               Subpart 922.8_Equal Employment Opportunity

922.800 Scope of subpart.
922.802 General.
922.803 Responsibilities.
922.804 Affirmative action programs.

[[Page 326]]

922.804-1 Nonconstruction.
922.804-2 Construction.
922.807 Exemptions.

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

    Source: 49 FR 11998, Mar. 28, 1984, unless otherwise noted.



                   Subpart 922.1_Basic Labor Policies



922.103  Overtime.



922.103-4  Approvals.

    (d) Approvals. (1) Where the cost to the Government may be affected, 
approval of hours of work in excess of the normal workweek is justified 
only in those instances and for those employees where it can be shown 
that overtime would provide needed and demonstrable impetus to the 
accomplishment of DOE objectives and that all other means of meeting 
these objectives have been considered and found inadequate or not 
feasible. Accordingly, the Heads of Contracting Activities shall:
    (i) Establish controls to prevent excess casual overtime and to 
assure that such overtime work is in the best interest of the 
Government. Casual overtime means (A) work in excess of the normal 
workweek (or in excess of an authorized extended workweek) which cannot 
be regularly scheduled in advance, or (B) regularly scheduled work in 
excess of the normal workweek for a period of four consecutive weeks or 
less; and
    (ii) Establish controls to assure that any use of any extended 
workweek schedule is in the best interest of the Government. Extended 
workweek means a workweek regularly scheduled and established in excess 
of the normal workweek for a period in excess of four consecutive weeks.

[49 FR 11998, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



922.103-5  Contract clauses.

    In accordance with FAR 22.101-1(e) and FAR 22.103-5, the contracting 
officer shall insert the clause at FAR 52.222-1, Notice to the 
Government of Labor Disputes, in all solicitations and contracts for 
protective services at DOE owned facilities requiring continuity of 
services for public safety and national security reasons. The 
contracting officer may insert this clause in other solicitations and 
contracts where a significant need for continuity in contract 
performance exists. See 937.70, Protective Services Contracting, for 
additional policy guidance regarding protective services.

[58 FR 36151, July 6, 1993]



             Subpart 922.6_Walsh-Healey Public Contracts Act



922.608-3  Protests against eligibility.

    When an eligibility determination made by the contracting officer is 
challenged, this protest shall be handled in accordance with procedures 
for agency protests against award, except the matter shall be submitted 
to the Department of Labor for final determination. However, if the 
eligibility determination challenged pertains to a small business, the 
protest shall be forwarded to the Small Business Administration for 
determination.



922.608-4  Award pending final determination.

    (a) Award, as contemplated by FAR 22.608-4, may be made only with 
the approval of the Head of the Contracting Activity.



922.608-5  Award.

    The notice required by (FAR) 48 CFR 22.608-5 is to be sent to the 
appropriate Department of Labor Regional Office in which the contractors 
place of business is located. Regional Office locations are specified at 
FAR 22.609.

[49 FR 11998, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



922.608-6  Postaward.

    (c) Any postaward actions of the type discussed at FAR 22.608-6 
should be coordinated in advance with the Office of Industrial 
Relations, Headquarters.

[[Page 327]]



               Subpart 922.8_Equal Employment Opportunity



922.800  Scope of subpart.

    This subpart implements (FAR) 48 CFR part 22, subpart 22.8. It 
applies to all DOE contracts and subcontracts.

[49 FR 11998, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



922.802  General.



922.803  Responsibilities.

    (a) The Director, Office of Federal Contract Compliance Programs of 
the Department of Labor has been delegated authority and responsibility 
for carrying out the requirements of Executive Order 11246, as amended. 
In conjunction with the delegation, contracting officers shall be 
familiar with existing and any updated provisions of 41 CFR Ch. 60, and 
assist the Department of Labor in its compliance responsibilities. DOE 
contracting officers will include the applicable Equal Employment 
Opportunity (EEO)) and Affirmative Action Program (AAP) requirements in 
their solicitations and obtain the applicable reports of compliance from 
the Office of Federal Contract Compliance Programs (OFCCP) (when 
required) prior to awarding of contracts. The provisions of 41 CFR Ch. 
60, are applicable to all DOE contracts.
    (d) The OFCCP requires that requests for pre-award clearances be 
directed to the OFCCP Regional Office in which the contractor's facility 
is (to be) located. If OFCCP finds the contractor in compliance, the 
contracting officer will be notified. Findings of non-compliance can be 
communicated to the contracting officer by the OFCCP or Headquarters 
Director or his designee. The appropriate Regional Office will provide 
the appropriate contact point in cases of non-compliance. The Director, 
Office of Civil Rights (DOE HQ), when requested, will provide assistance 
to contracting officers resolving non-compliance issues by providing 
assistance in obtaining a final decision from the OFCCP.

[49 FR 11998, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 58 
FR 36365, July 7, 1993]



922.804  Affirmative action programs.



922.804-1  Nonconstruction.

    In the event a prospective contractor or subcontractor is entering 
into its first contract containing the Equal Opportunity clause, the 
contracting officer shall determine that the prospective contractor 
understands and appears able to conform to the requirements of the EEO 
clause.



922.804-2  Construction.

    (a) Construction contracts, including cost-sharing contracts, are 
subject to OFCCP orders applicable in particular areas.
    (1) When a proposed nonexempt construction contract is within a 
geographic area where construction is subject to the provisions of 
Federal EEO Bid Conditions, Part I or Part II, the solicitation shall 
contain those bid conditions. The contracting officer shall include in 
such solicitation a provision that ``the offeror shall adhere to the 
affirmative action plan (bid conditions) set forth in this 
solicitation.''
    (2) Lists of areas for which OFCCP has designated specific 
affirmative action requirements are available through the Procurement 
Executive. Contracting officers should assure that this list and copies 
of pertinent orders are made available to all concerned DOE offices and 
to DOE contractors and construction subcontractors for work to be 
performed in the specified geographical areas.
    (b) Other nonexempt construction contracts. (1) When a proposed 
nonexempt construction contract is not in a ``plan area'' and is in the 
amount of $10,000 or more, offerors must agree to comply with the Equal 
Employment Opportunity clause.
    (2) When proposed nonexempt contracts of $1,000,000 or over are not 
in plan areas and have not been designated as high impact, offerors also 
must submit to the contracting officer details regarding specific 
affirmative action steps to be taken by the offeror in connection with 
all work under the contract. Such details shall include estimates of the 
percentage of minority group persons expected to be employed

[[Page 328]]

in each craft involved in the performance of the contract work. All 
solicitations for construction contracts shall reference the affirmative 
action requirements and the offeror's obligation to make good faith 
efforts to employ women in craft positions.
    (3) Pursuant to the OFCCP order dated August 30, 1976, agencies 
shall develop ``Special Bid Conditions'' for use on high impact projects 
in non-plan areas. These special bid conditions will include mandatory 
goals and timetables for the utilization of minorities. The Procurement 
Executive using the criteria issued by OFCCP will determine those 
projects that are ``high impact.'' The contracting officer is 
responsible for compliance with policies and procedures contained in the 
OFCCP ``Construction Compliance Program Operations Manual.'' Language 
for inclusion in solicitations or contracts contained in the manual may 
be modified, provided all of the requirements are retained. The 
contracting officer shall develop the goals and timetables and shall 
confer with the appropriate OFCCP regional office. The Office of Civil 
Rights will provide assistance as necessary, when requested. Special bid 
conditions will be submitted by the contracting officer to the 
appropriate OFCCP regional office for approval unless otherwise directed 
by the Procurement Executive. When special bid conditions are 
applicable, adequate presolicitation lead time should be allowed for 
submission of the special bid conditions to OFCCP national and regional 
offices.
    (c) An attempt to limit in any major respect the equal opportunity 
requirements included in an invitation for bids or request for proposals 
for a construction contract shall constitute grounds for a determination 
that the offeror does not qualify as a responsible offeror and for 
rejection of the bid or proposal. In the case of construction 
acquisition by DOE prime contractors, this determination shall be made 
only with the approval of the DOE contracting officer.

[49 FR 11998, Mar. 28, 1984, as amended at 56 FR 41965, Aug. 26, 1991, 
58 FR 36365, July 7, 1993; 59 FR 9106, Feb. 25, 1994]



922.807  Exemptions.

    (c) Contracting officer requests for exemption from E.O. 11246 
should be directed to the Procurement Executive for submission to the 
Director, OFCCP.



PART 923_ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG FREE 
WORKPLACE--Table of Contents




                Subpart 923.4_Use of Recovered Materials

Sec.
923.405 Procedures [DOE supplemental coverage--paragraph (e)].
923.471 [Reserved]

            Subpart 923.5_Workplace Substance Abuse Programs

923.570 Workplace substance abuse programs at DOE sites.
923.570-1 Applicability.
923.570-2 Solicitation provision and contract clause.
923.570-3 Suspension of payments, termination of contract, and debarment 
          and suspension actions.

  Subpart 923.7_Contracting for Environmentally Preferable and Energy-
                     efficient Products and Services

923.703 Policy.

  Subpart 923.70_Environmental, Conservation, and Occupational Safety 
                                Programs

923.7001 Nuclear safety.
923.7002 Worker Safety and Health.
923.7003 Contract clauses.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401 et 
seq.



                Subpart 923.4_Use of Recovered Materials



923.405  Procedures [DOE supplemental coverage--paragraph (e)].

    (e) When acquiring items designated in the EPA Comprehensive 
Procurement Guidelines, the EPA recommended percentage of recovered/
recycled content or range of content contained in the Recovered 
Materials Advisory Notice (RMAN) shall be specified in the solicitation 
and contract as the minimum percentage of recovered/recycled content or 
range of content. Acquisition of a product with recycled

[[Page 329]]

content exceeding the RMAN recommended content or range of content is 
encouraged if the product performs acceptably.

[68 FR 6358, Feb. 7, 2003]



923.471  [Reserved]



            Subpart 923.5_Workplace Substance Abuse Programs

    Source: 57 FR 32676, July 22, 1992, unless otherwise noted.



923.570  Workplace substance abuse programs at DOE sites.

    (a) The Department of Energy (DOE), as part of its overall 
responsibilities to protect the environment, maintain public health and 
safety, and safeguard the national security, has established policies, 
criteria, and procedures for contractors to develop and implement 
programs that help maintain a workplace free from the use of illegal 
drugs.
    (b) Regulations concerning DOE's contractor workplace substance 
abuse programs are promulgated at 10 CFR part 707, Workplace Substance 
Abuse Programs at DOE Sites.



923.570-1  Applicability.

    (a) The policies, criteria, and procedure specified in 10 CFR part 
707, Workplace Substance Abuse Programs at DOE Sites, apply to contracts 
for work performed at sites owned or controlled by DOE and operated 
under the authority of the Atomic Energy Act of 1954, as amended, where 
such work:
    (1) Has a value of $25,000 or more, and;
    (2) Has been determined by DOE to involve:
    (i) Access to or handling of classified information or special 
nuclear materials;
    (ii) High risk of danger to life, the environment, public health and 
safety or national security; or
    (iii) The transportation of hazardous materials to or from a DOE 
site.
    (b) Except as otherwise provided for in this subpart, contracts 
subject to the requirements of 10 CFR part 707 and this subpart shall 
not be subject to FAR 23.5, Drug Free Workplace.

[57 FR 32676, July 22, 1992; 57 FR 41974, Sept. 14, 1992]



923.570-2  Solicitation provision and contract clause.

    (a) The contracting officer shall insert the provision at 48 CFR 
970.5223-3, Agreement Regarding Workplace Substance Abuse Programs at 
DOE Sites, in solicitations where the work to be performed by the 
contractor will occur on sites owned or controlled by DOE and operated 
under the authority of the Atomic Energy Act of 1954, as amended, as 
specified in 48 CFR 923.570-1, Applicability.
    (b) The contracting officer shall insert the clause at 48 CFR 
970.5223-4, Workplace Substance Abuse Programs at DOE Sites, in 
contracts where the work to be performed by the contractor will occur on 
sites owned or controlled by DOE and operated under the authority of the 
Atomic Energy Act of 1954, as amended, as specified in 923.570-1, 
Applicability.

[57 FR 32676, July 22, 1992, as amended at 62 FR 42074, Aug. 5, 1997; 65 
FR 81007, Dec. 22, 2000]



923.570-3  Suspension of payments, termination of contract, and debarment 
and suspension actions.

    (a) The contracting officer shall comply with the procedures of FAR 
23.506 regarding the suspension of contract payments, the termination of 
the contract for default, and the debarment and suspension of a 
contractor relative to failure to comply with 48 CFR 970.5223, Workplace 
Substance Abuse Programs at DOE Sites.
    (b) For purposes of 10 CFR part 707, the specific causes for 
suspension of contract payments, termination of the contract for 
default, and debarment and suspension of the contractor are:
    (1) The contractor fails to either comply with the requirements of 
10 CFR part 707 or perform in a manner consistent with its approved 
program;
    (2) The contractor has failed to comply with the terms of the 
provision at 48 CFR 970.5204-57; or

[[Page 330]]

    (3) Such a number of contractor employees having been convicted of 
violations of criminal drug statutes for violations occurring on the 
DOE-owned or -controlled site, as to indicate that the contractor has 
failed to make a good faith effort to provide a drug free workplace.

[57 FR 32676, July 22, 1992, as amended at 62 FR 42074, Aug. 5, 1997; 65 
FR 81007, Dec. 22, 2000]



  Subpart 923.7_Contracting for Environmentally Preferable and Energy-
                     efficient Products and Services



923.703  Policy.

    Executive Order 13149, dated April 21, 2000, entitled Greening the 
Government Through Federal Fleet and Transportation Efficiency, provides 
that the Federal Government exercise leadership in the reduction of 
petroleum consumption through improvements in its motor fleet fuel 
efficiency and increases in its use of alternative fuel vehicles and 
alternative fuels. The specific provisions affecting the Department's 
acquisition program are as follows. Part 2 of the Executive Order 
establishes goals for the reduction of petroleum consumption in the 
motor vehicle fleet and requires the development of strategies for the 
increased use of alternative fuel vehicles, increased use of alternative 
fuels accompanied by improved alternative fuel infrastructure, and the 
acquisition of higher fuel economy vehicles. Procurement personnel 
involved in the acquisition of motor vehicles, including lease, and 
motor vehicle products should familiarize themselves with these 
requirements and assist their fleet management personnel in acquiring 
vehicles and products which comply with the requirements of the 
Executive Order and the Department's compliance strategy. In addition, 
section 403 of the Executive Order provides for the acquisition of 
environmentally preferable motor vehicle products, including the use of 
biobased motor vehicle products. Environmentally preferable motor 
vehicle products include re-refined motor vehicle lubricating oils, 
retread tires, recycled engine coolants, and bio-based motor vehicle 
products. Use of these products is addressed by the Department's 
Affirmative Procurement Program required by 48 CFR (FAR) 23.404, Agency 
affirmative procurement programs, as implemented by 48 CFR (DEAR) 
923.405, Procedures [DOE supplemental coverage--paragraph (e)]. 
Environmentally preferable motor vehicle products are among the items 
designated in the Comprehensive Procurement Guidelines, which lists 
products with recovered content that Federal agencies and their 
contractors are to buy. That list is published by the Environmental 
Protection Agency pursuant to the Resource Conservation and Recovery Act 
of 1976, 42 U.S.C. 6962, and regulations published at 40 CFR part 247.

[68 FR 52131, Sept. 2, 2003]



  Subpart 923.70_Environmental, Conservation, and Occupational Safety 
                                Programs



923.7001  Nuclear safety.

    (a) The DOE regulates the nuclear safety of its major facilities 
under its own statutory authority derived from the Atomic Energy Act and 
other legislation. The DOE also regulates, under certain specific 
conditions, the use by its contractors of radioactive materials and 
ionizing radiation producing machines.

[49 FR 12003, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



923.7002  Worker Safety and Health.

    (a)(1) Except when the clause prescribed at 48 CFR 970.1504-5(c) is 
used, the clauses entitled ``Conditional Payment of Fee or Profit--
Safeguarding Restricted Data and Other Classified Information and 
Protection of Worker Safety and Health'' and ``Conditional Payment of 
Fee or Profit--Protection of Worker Safety and Health'' implement the 
requirements of section 234C of the Atomic Energy Act for the use of a 
contract clause that provides for an appropriate reduction in the fee or 
amount paid to the contractor under the contract in the event of a 
violation by the contractor or any contractor employee of any 
Departmental regulation relating to the enforcement of

[[Page 331]]

worker safety and health concerns. The clauses, in part, provide for 
reductions in the amount of fee, profit, or share of cost savings that 
is otherwise earned by the contractor for performance failures relating 
to worker safety and health violations under the Department's 
regulations.
    (2) The clauses provide for reductions of fee or profit that is 
earned by the contractor depending upon the severity of the contractor's 
failure to comply with contract terms or conditions relating to worker 
safety and health concerns. When reviewing performance failures that 
would otherwise warrant a reduction of earned fee, the contracting 
officer must consider mitigating factors that may warrant a reduction 
below the applicable range specified in the clauses. Some of the 
mitigating factors that must be considered are specified in the clauses.
    (3) The contracting officer must obtain the concurrence of the Head 
of the Contracting Activity--
    (i) Prior to effecting any reduction of fee or amounts otherwise 
payable to the contractor in accordance with the terms and conditions of 
the clause entitled ``Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information and Protection of 
Worker Safety and Health'' or of the clause entitled ``Conditional 
Payment of Fee or Profit--Protection of Worker Safety and Health''; and
    (ii) For determinations that no reduction of fee is warranted for a 
particular performance failure(s) that would otherwise warrant a 
reduction.
    (4) Section 234C of the Atomic Energy Act provides that DOE shall 
either pursue civil penalties (implemented at 10 CFR part 851) for a 
violation under section 234C of the Atomic Energy Act (42 U.S.C. 2282c) 
or a contract fee reduction, but not both.
    (5) The contracting officer must coordinate with the Office of Price 
Anderson Enforcement within the Office of the Assistant Secretary for 
Environment, Safety and Health (or with any designated successor office) 
before pursuing a contract fee reduction in the event of a violation by 
the contractor or any contractor employee of any Departmental regulation 
relating to the enforcement of worker health and safety concerns.

[68 FR 68777, Dec. 10, 2003]



923.7003  Contract clauses.

    (a) A decision to include or not include environmental, safety and 
health clauses in DOE contracts shall be made by the contracting officer 
in consultation with appropriate environmental, safety and health 
program management personnel.
    (b) When work is to be performed at a facility where the DOE will 
exercise its statutory authority to enforce occupational safety and 
health standards applicable to the working conditions of the contractor 
and subcontractor employees at such facility, the clause at 952.223-71 
shall be used in such contract or subcontract if conditions (b) (1) 
through (3), are satisfied:
    (1) DOE work is segregated from the contractor's or subcontractor's 
other work;
    (2) The operation is of sufficient size to support its own safety 
and health services; and
    (3) The facility is government-owned, or leased by or for the 
account of the government.
    (c) In facilities not meeting the requirements of 923.7002(b) above 
and which are a production or utilization facility where there is use or 
possession of source, special nuclear, or byproduct materials, DOE 
policy is not to enforce radiological safety and health standards 
pursuant to the contract or subcontract but rather to rely upon Nuclear 
Regulatory Commission (NRC) licensing requirements (including agreements 
with states under section 274 of the Atomic Energy Act). Pursuant to 
this policy, neither the clause found at 952.223-71 nor 952.223-72 is to 
be incorporated in the contracts or subcontracts for work at such 
facilities. Notwithstanding this general policy with respect to 
facilities not meeting the requirements of paragraph (b) above, the 
Secretary or his designee may determine in special cases, that DOE needs 
to enforce radiological safety and health standards pursuant to the 
contract or subcontract (see paragraph (d) below). When such a 
determination is made, the clause found at

[[Page 332]]

952.223-72 shall be included in the contract or subcontract.
    (d) In facilities not meeting the requirements of either 923.7002(b) 
or 923.7002(c) of this section and where there is a machine capable of 
producing ionizing radiation, it is DOE policy not to regulate such 
activity where it is adequately regulated by a state or other Federal 
agency. In such cases, neither clause 952.223-71 nor 952.223-72 shall be 
incorporated in the contract. Where the contracting officer, with 
appropriate environmental, safety and health advice determines that no 
state or other Federal agency exists to adequately regulate the 
operation and/or use of such machines, the clause found at 952.223-72 
shall be included in the contract. The Assistant Secretary for 
Environment, Safety and Health (or designee) shall be consulted to 
determine if a non-agreement (NRC) state or a facility located in a non-
agreement state has been reviewed by any other DOE office to establish 
that the state agency has the essential authority and resources for 
enforcing the radiation protection standards. This is to assure 
reasonable consistency in the assessment of radiation protection in non-
agreement states and subsequent use of 952.223-72.
    (e) In a situation where the contractor or subcontractor is 
performing DOE work at more than one location, inclusion of either, or 
both, 952.223-71 and 952.223-72 may be appropriate. In such cases, the 
contract or subcontract must include language to specify the extent of 
applicability of each clause used. For example, with a parenthetical: 
(Applicable only to work performed at a contractor site which has 
952.223-71 or 952.223-72 clause in its contract or subcontract).
    (f) Except as prescribed in 48 CFR 970.1504-5(c), the contracting 
officer shall insert the clause at 48 CFR 952.223-76, Conditional 
Payment of Fee or Profit--Safeguarding Restricted Data and Other 
Classified Information and Protection of Worker Safety and Health, in 
all contracts that contain both the clause at 48 CFR 952.204-2, 
Security, and the clause at 48 CFR 952.250-70, Nuclear hazards indemnity 
agreement.
    (g) Except as prescribed in 48 CFR 970.1504-5(c), the contracting 
officer shall insert the clause at 48 CFR 952.223-77, Conditional 
Payment of Fee or Profit--Protection of Worker Safety and Health, in all 
contracts that do not contain the clause at 48 CFR 952.204-2, Security, 
but that do contain the clause at 48 CFR 952.250-70, Nuclear hazards 
indemnity agreement.

[49 FR 12003, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997. Redesignated and amended at 68 FR 68777, Dec. 
10, 2003]



PART 925_FOREIGN ACQUISITION--Table of Contents




                 Subpart 925.1_Buy American Act_Supplies

Sec.
925.102 Policy.
925.105 Evaluating offers.
925.108 Excepted articles, materials, and supplies.

          Subpart 925.2_Buy American Act_Construction Materials

925.202 Policy.
925.204 Violations.

         Subpart 925.7_Restrictions on Certain Foreign Purchases

925.702 Restrictions.

          Subpart 925.9_Additional Foreign Acquisition Clauses

925.901 Omission of the audit clause.

         Subpart 925.70_Acquisition of Nuclear Hot Cell Services

925.7000 Scope of subpart.
925.7001 Definitions.
925.7002 Policy.
925.7003 Requirements.
925.7004 Contract clause.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 12003, Mar. 28, 1984, unless otherwise noted.



                 Subpart 925.1_Buy American Act_Supplies



925.102  Policy

    (b) Contracting officers may make the determination required by FAR 
25.102(a), provided such determination

[[Page 333]]

is factually supported in writing. If the contract is estimated to 
exceed $1 million, the Head of the Contracting Activity shall approve 
the determination.

[49 FR 12003, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984]



925.105  Evaluating offers.

    (c) Proposed awards shall be submitted (in triplicate) through the 
Procurement Executive, to the Head of the Agency for decisions required 
by FAR 25.105(c).



925.108  Excepted articles, materials, and supplies.

    (b) Suggestions for changes and additions to the (FAR) 48 CFR 
25.108(d)(1) list, with appropriate justifications, shall be submitted 
to the Procurement Executive.

[49 FR 12003, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



          Subpart 925.2_Buy American Act_Construction Materials



925.202  Policy.

    (b) Contracting officers may make the determination required by FAR 
25.202(a)(3). If the cost of the materials is expected to exceed 
$100,000, the Head of the Contracting Activity shall approve the 
determination.



925.204  Violations.

    Contracting officers shall make a complete written report (in 
triplicate) to the Secretary through the Procurement Executive of each 
violation of the Buy American Act--Construction Materials clause at 
52.225-5.

[49 FR 12003, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



         Subpart 925.7_Restrictions on Certain Foreign Purchases



925.702  Restrictions.

    No contract may be awarded to a company owned by an entity 
controlled by a foreign government if performance of the contract will 
require access to proscribed information. See 904.71 for additional 
guidance.

[58 FR 59684, Nov. 10, 1993]



          Subpart 925.9_Additional Foreign Acquisition Clauses



925.901  Omission of the audit clause.

    (c) Conditions for omission.
    Any proposed determinations and any reports mentioned at (FAR) 48 
CFR 25.901 shall be forwarded to the Director, Office of Contract 
Management, within the Headquarters procurement organization.

[59 FR 9106, Feb. 25, 1994, as amended at 61 FR 21977, May 13, 1996; 67 
FR 14871, Mar. 28, 2002]



         Subpart 925.70_Acquisition of Nuclear Hot Cell Services

    Source: 58 FR 8910, Feb. 18, 1993, unless otherwise noted.



925.7000  Scope of subpart.

    This subpart prescribes policies for selection for contract award of 
nuclear hot cell services when one of the competitors is a foreign 
company. This subpart does not apply to the acquisition and use of 
nuclear hot cell facilities on-site at a DOE-owned or -leased facility.



925.7001  Definitions.

    Costs related to the decommissioning of nuclear facilities, as used 
in this subpart, means any cost associated with the compliance with 
regulatory requirements governing the decommissioning of nuclear 
facilities licensed by the Nuclear Regulatory Commission. Such costs for 
foreign facilities and for Department of Energy facilities are costs of 
decommissioning associated with the compliance with foreign regulatory 
requirements or the Department's own requirements.
    Costs related to the storage and disposal of nuclear waste, as used 
in this subpart, means any costs, whether required by regulation or 
incurred as a matter of prudent business practice, associated with the 
storage or disposal of nuclear waste.
    Foreign company, as used in this subpart, means a company which 
offers to perform nuclear hot cell services at a facility which is not 
subject to the laws and regulations of the United

[[Page 334]]

States, its agencies, and its political subdivisions.
    Nuclear hot cell services, as used in this subpart, means services 
related to the examination of, or performance of various operations on, 
nuclear fuel rods, control assemblies, or other components that are 
emitting large quantities of ionizing radiation, after discharge from 
nuclear reactors, which are performed in specialized facilities located 
away from commercial nuclear power plants, generally referred to in the 
industry as ``hot cells.''
    Nuclear waste, as used in this subpart, means any radioactive waste 
material subject to regulation by the Nuclear Regulatory Commission or 
the Department of Energy, or in the case of foreign offers, by 
comparable foreign organizations.
    United States company, as used in this subpart, means a company 
which offers to perform nuclear hot cell services at a facility subject 
to the laws and regulations of the United States, its agencies, and its 
political subdivisions.



925.7002  Policy.

    In selecting offer(s) for award of contracts for nuclear hot cell 
services, costs related to the decommissioning of nuclear facilities and 
storage and disposal of nuclear waste are to be considered in a way 
which affords United States and foreign companies an equal competition 
in accordance with 925.7003. Upon determining that no offer from a 
foreign firm has a reasonable chance of being selected for award, the 
requirements of this subpart will not apply.



925.7003  Requirements.

    (a) For the acquisition of nuclear hot cell services under the 
conditions in paragraph (b) of this section, the selection official in 
evaluating competitive offers for selection purposes only shall:
    (1) Consider neither costs related to the decommissioning of nuclear 
waste facilities nor costs related to the storage and disposal of 
nuclear waste, or
    (2) Add these costs to offers of foreign companies.
    (b) The requirements of this section apply under the following 
circumstances:
    (1) One or more of the offers is submitted by a United States 
company and includes costs related to the decommissioning of nuclear 
facilities and costs related to the storage and disposal of nuclear 
waste because it is subject to such costs; and
    (2) One or more of the offers is submitted by a foreign company and 
does not include these types of costs. (A foreign company might not be 
subject to such costs or might not have to include these types of costs 
in its offer if the firm is subsidized in decommissioning activity or 
storage and disposal of nuclear waste, or a foreign government is 
performing the activities below the actual cost of the activity.)



925.7004  Contract clause.

    The contracting officer shall insert the clause at 952.225-70, 
Subcontracting for Nuclear Hot Cell Services, in solicitations and 
contracts involving nuclear hot cell services. This clause does not flow 
down to second-tier subcontracts.



PART 926_OTHER SOCIOECONOMIC PROGRAMS--Table of Contents




 Subpart 926.70_Implementation of Section 3021 of the Energy Policy Act 
                                 of 1992

Sec.
926.7001 Policy.
926.7002 Responsibilities.
926.7003 Review of the procurement request.
926.7004 Size standard for Energy Policy Act procurements.
926.7005 Preferences under the Energy Policy Act.
926.7006 Goal measurement and reporting requirements.
926.7007 Solicitation provisions and contract clauses.

 Subpart 926.71_Implementation of Section 3161 of the National Defense 
                 Authorization Act for Fiscal Year 1993

926.7101 Policy.
926.7102 Definition.
926.7103 Requirements.
926.7104 Contract clause.

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

    Source: 60 FR 22300, May 5, 1995, unless otherwise noted.

[[Page 335]]



 Subpart 926.70_Implementation of Section 3021 of the Energy Policy Act 
                                 of 1992



926.7001  Policy.

    (a) Section 3021(a) of the Energy Policy Act of 1992 (Pub. L. 102-
486) specifies that the Department of Energy shall, to the extent 
practicable, provide that not less than 10 percent of the total combined 
amounts obligated for competitively awarded contracts and subcontracts 
under the Energy Policy Act be expended with--
    (1) Small business concerns controlled by socially and economically 
disadvantaged individuals or by women;
    (2) Historically Black colleges and universities; or
    (3) Colleges and universities having a student body in which more 
than 20 percent of the students are Hispanic Americans or Native 
Americans.
    (b) These three groups are collectively referred to in this section 
as ``Energy Policy Act target groups.''
    (c) Awards of Energy Policy Act procurements should be in the 
following descending order of preference:
    (1) Competitive awards pursuant to a set-aside for small 
disadvantaged business;
    (2) Competitive awards to small businesses owned and controlled by 
socially and economically disadvantaged individuals and by women for 
Energy Policy Act requirements under the Small Business Administration's 
section 8(a) program; and
    (3) Competitive awards that provide an evaluation preference in 
accordance with 926.7006 to offerors from the Energy Policy Act target 
groups.
    (d) The DOE implementation of Section 3021 requirements with regard 
to the award of subcontracts under Energy Policy Act procurements is 
discussed at 926.7006.
    (e) Competitive procedures, for purposes of Energy Policy Act 
implementation, consist of awards under set-asides to small 
disadvantaged business and firms certified as 8(a) Small Business 
Administration and competitive procedures in accordance with (FAR) 48 
CFR 15.6 and (DEAR) 48 CFR 915.6.



926.7002  Responsibilities.

    Offices initiating procurement requests have primary responsibility 
to identify potential contract requirements falling within the scope of 
section 3021 of the Energy Policy Act. Identification shall occur at the 
earliest possible point in time in the acquisition cycle, but not later 
than the submission of the procurement request to the contracting 
officer. For purposes of Section 3021, a contract requirement is any 
award that directly satisfies an Energy Policy Act program or 
requirement.



926.7003  Review of the procurement request.

    Any Energy Policy Act procurement, including basic research 
contracts with educational institutions, shall be reviewed in accordance 
with the Small Business and 8(a) Program Review Procedures in order to 
ensure that full consideration is given to the potential for making 
Energy Policy Act awards.

[60 FR 22300, May 5, 1995, as amended at 61 FR 21977, May 13, 1996]



926.7004  Size standard for Energy Policy Act procurements.

    The size standard for Energy Policy Act engineering services 
procurements (SIC 8711) shall be the size standard specified for 
military and aerospace equipment and military weapons.



926.7005  Preferences under the Energy Policy Act.

    (a) Prime contracts. Solicitations for all competitive Energy Policy 
Act procurements not for 8(a) firms and in excess of the simplified 
acquisition threshold shall provide for an evaluation preference for 
offers received from entities from among the Energy Policy Act target 
groups. The evaluation criteria shall provide that in instances in which 
two or more proposals being considered for final selection are ranked as 
essentially equal after consideration of all technical and cost 
evaluation factors, and if one of these proposals is from an offeror 
from among an Energy Policy Act target group that offeror will be 
selected for award.

[[Page 336]]

    (b) Subcontracts. (1) The contracting officer shall assure that all 
competitive Energy Policy Act solicitations over the simplified 
acquisition threshold contain:
    (i) A solicitation provision providing for consideration of the 
extent to which the offerors have provided for subcontracting 
opportunities to entities from among the Energy Policy Act target 
groups; and
    (ii) A clause providing for the maximum utilization of entities from 
among Energy Policy Act target groups in the performance of Energy 
Policy Act contracts.
    (2) In addition, the contracting officer shall assure that all 
competitive Energy Policy Act procurements expected to exceed $500,000 
($1,000,000 for construction) include a clause for reporting after award 
as part of the Small Business and Small Disadvantaged Business 
Subcontracting Plan process.



926.7006  Goal measurement and reporting requirements.

    (a) General. The following types of contract awards for Energy 
Policy Act procurements shall be counted toward achievement by DOE of 
the 10 percent goal:
    (1) Any award set-aside for small disadvantaged business;
    (2) Any competitive section 8(a) award;
    (3) Any competitive award to one of the three target groups under an 
unrestricted procurement;
    (4) Any award to one of the three target groups conducted under 
simplified acquisition procedures in excess of the micro-purchase 
threshold; and,
    (5) Any competitively awarded subcontract to one of the three target 
groups under a prime award.
    (b) Prime contract awards. Award values and dollars obligated under 
prime contracts and modifications to prime contracts for Energy Policy 
Act requirements shall be reported through the Department of Energy 
Procurement and Assistance Data System.
    (c) Subcontract awards. The contractor shall be required to report, 
on an annual Federal Government fiscal year basis, its progress against 
Section 3021 goals by providing the actual dollar value of subcontract 
payments and the relationship of those payments to the incurred contract 
cost. If the contract includes reporting requirements under (FAR) 48 CFR 
52.219-9, Small Business and Small Disadvantaged Business Subcontracting 
Plan, the contractor's progress against the Section 3021 goals shall be 
included as an addendum to Standard Form (SF) 294, Subcontracting Report 
for Individual Contracts, and/or SF 295, Summary Subcontract Report, as 
applicable, for the period that corresponds to the end of the Federal 
Government fiscal year.



926.7007  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the provision at 952.226-
70, Subcontracting Goals under Section 3021(a) of the Energy Policy Act 
of 1992 (Pub. L. 102-486) (Energy Policy Act), in solicitations for 
Energy Policy Act procurements.
    (b) The contracting officer shall insert the clause at 952.226-71, 
Utilization of Energy Policy Act Target Entities, in contracts for the 
Energy Policy Act requirements with an award value in excess of the 
simplified acquisition threshold.
    (c) The contracting officer shall insert the clause at 952.226-72, 
Energy Policy Act Subcontracting Goals and Reporting Requirements, in 
contracts for Energy Policy Act requirements with an award value in 
excess of $500,000 ($1,000,000 in the case of construction).
    (d) The contracting officer shall insert the provision at 48 CFR 
952.226-73, Energy Policy Act Target Group Representation, in 
solicitations for Energy Policy Act procurements.
    (e) The contracting officer shall insert the clause at (FAR) 48 CFR 
52.219-14, Limitation on Subcontracting, in contracts for Energy Policy 
Act requirements with an entity from among the Energy Policy Act target 
groups.

[60 FR 22300, May 5, 1995, as amended at 62 FR 42074, Aug. 5, 1997]

[[Page 337]]



 Subpart 926.71_Implementation of Section 3161 of the National Defense 
                 Authorization Act for Fiscal Year 1993.

    Source: 62 FR 34861, June 27, 1997, unless otherwise noted.



926.7101  Policy.

    Consistent with the requirements of Section 3161(c)(2), 42 U.S.C. 
7474h(c)(2), in instances where DOE has determined that a change in 
workforce at a DOE Defense Nuclear Facility is necessary, the 
Department, to the extent practicable, is required to provide employees 
under Department of Energy contracts whose employment in positions at 
such a facility is terminated with a preference in any hiring of the 
Department. Consistent with published DOE guidance regarding Section 
3161, such preference in hiring extends to hiring by DOE contractors and 
subcontractors.



926.7102  Definition.

    Eligible employee means a current or former employee of a contractor 
or subcontractor employed at a DOE Defense Nuclear Facility--
    (1) Whose position of employment has been, or will be, involuntarily 
terminated (except if terminated for cause),
    (2) Who has met the eligibility criteria contained in Department of 
Energy guidance for contractor work force restructuring, as may be 
amended or supplemented from time to time, and
    (3) Who is qualified for a job vacancy with the Department or one of 
its contractors with respect to work under its contract with the 
Department at the time a position is available.



926.7103  Requirements.

    (a) Section 3161, 42 U.S.C. 7474h, confers a continuing right to a 
preference in hiring to an eligible employee of Department of Energy 
Defense Nuclear Facilities. This right to a preference in hiring 
includes employment opportunities of any Department of Energy 
contractor, regardless of the place of performance of the contract. 
Accordingly, eligible former employees of contractors and subcontractors 
employed at Department of Energy Defense Nuclear Facilities, to the 
extent practicable, shall be provided a hiring preference in employment 
opportunities of other Department of Energy contractors for work under 
their contracts.
    (b) The Office of Worker and Community Transition (WT) is 
responsible for establishing policies and procedures relating to the 
Department of Energy implementation of Section 3161. Contracting 
Officers, in concert with representatives of the field office 
responsible for implementation of Section 3161 at the Department of 
Energy Defense Nuclear Facility and local counsel, should consult with 
the Office of Worker and Community Transition to determine applicability 
of Section 3161 requirements, including hiring preference requirements, 
for displaced workers.



926.7104  Contract clause.

    The contracting officer shall insert the clause at 48 CFR (DEAR) 
952.226-74, Displaced Employee Hiring Preference, in contracts (except 
for contracts for commercial items, pursuant to 41 U.S.C. 403) which 
exceed $500,000 in value.

[[Page 338]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 927_PATENTS, DATA, AND COPYRIGHTS--Table of Contents




                          Subpart 927.2_Patents

Sec.
927.200 Scope of subpart.
927.201 Authorization and consent.
927.201-1 General.
927.206 Refund of royalties.
927.206-1 General.
927.206-2 Clause for refund of royalties.
927.207 Classified contracts.
927.207-1 General.

         Subpart 927.3_Patent Rights Under Government Contracts

927.300 General.
927.302 Policy.
927.303 Contract clauses.
927.304 Procedures.
927.370 [Reserved]

               Subpart 927.4_Technical Data and Copyrights

927.400 Scope of subpart.
927.402 Acquisition and use of technical data.
927.402-1 General.
927.402-2 Policy.
927.403 Negotiations and deviations.
927.404 Rights in technical data in subcontracts.
927.404-70 Statutory programs.
927.408 Cosponsored research and development activities.
927.409 Solicitation provisions and contract clauses.

Subpart 927.70 [Reserved]

    Authority: Atomic Energy Act of 1954, as amended (42 U.S.C. 2168, 
2182, 2201); Federal Nonnuclear Energy Research and Development Act of 
1974 (42 U.S.C. 5908); Department of Energy National Security and 
Military Applications of Nuclear Energy Authorization Act of 1987 (42 
U.S.C. 7261a.); Department of Energy Organization Act (42 U.S.C. 7101 et 
seq.); National Nuclear Security Administration Act (50 U.S.C. 4201 et 
seq.)

    Source: 49 FR 12004, Mar. 28, 1984, unless otherwise noted.



                          Subpart 927.2_Patents

    Source: 60 FR 11815, Mar. 2, 1995, unless otherwise noted.



927.200  Scope of subpart.

    When consulting 48 CFR part 27, subpart 27.2 of the FAR, consider 
``research, development, and demonstration'' to replace the phrase 
``research and development'' or ``R&D,'' for the purposes of DOE 
actions.



927.201  Authorization and consent.



927.201-1  General.

    In certain contracting situations, such as those involving research, 
development, or demonstration projects, consideration should be given to 
the impact of third party-owned patents covering technology that may be 
incorporated in the project which patents may ultimately affect 
widespread commercial use of the project results. In such situations, 
Patent Counsel shall be consulted to determine what modifications, if 
any, are to be made to the utilization of the Authorization and Consent 
and Patent Indemnity provisions or what other action might be deemed 
appropriate.



927.206  Refund of royalties.



927.206-1  General.

    The clause at 952.227-9, Refund of Royalties, obligates the 
contractor to inform DOE of the payment of royalties pertaining to the 
use of intellectual property, either patent or data related, in the 
performance of the contract. This information may result in 
identification of instances in which the Government already has a 
license for itself or others acting in its behalf or the right to 
sublicense others. Also, there may be pending antitrust actions or 
challenges to the validity of a patent or the proprietary nature of the 
data, or the contractor may be able to gain unrestricted access to the 
same data through other sources. In such situations the contractor may 
avoid the payment of a royalty in its entirety or may be charged a 
reduced royalty.

[[Page 339]]



927.206-2  Clause for refund of royalties.

    The contracting officer shall insert the clause at 952.227-9, Refund 
of Royalties, in solicitations and contracts for experimental, research, 
developmental, or demonstration work or other solicitations and 
contracts in which the contracting officer believes royalties will have 
to be paid by the contractor or a subcontractor of any tier.



927.207  Classified contracts.



927.207-1  General.

    Unauthorized disclosure of classified subject matter, whether in a 
patent application or resulting from the issuance of a patent, may be a 
violation of the Atomic Energy Act of 1954, as amended, other laws 
relating to espionage and national security, and provisions of the 
proposed contract pertaining to disclosure of information.



         Subpart 927.3_Patent Rights Under Government Contracts



927.300  General.

    (a) One of the primary missions of the Department of Energy is the 
use of its procurement process to ensure the conduct of research, 
development, and demonstration leading to the ultimate commercialization 
of efficient sources of energy. To accomplish its mission, DOE must work 
in cooperation with industry in the development of new energy sources 
and in achieving the ultimate goal of widespread commercial use of those 
energy sources. To this end, Congress has provided DOE with the 
authority to invoke an array of incentives to secure the 
commercialization of new technologies developed for DOE. One such 
important incentive is provided by the patent system.
    (b) Pursuant to 42 U.S.C. 2182 and 42 U.S.C. 5908, DOE takes title 
to all inventions conceived or first actually reduced to practice in the 
course of or under contracts with large, for-profit companies, foreign 
organizations, and others not beneficiaries of Pub. L. 96-517. 
Regulations dealing with Department's authority to waive its title to 
subject inventions, including the relevant statutory objectives, exist 
at 10 CFR part 784. Pursuant to that section, DOE may waive the 
Government's patent rights in appropriate situations at the time of 
contracting to encourage industrial participation, foster commercial 
utilization and competition, and make the benefits of DOE activities 
widely available to the public. In addition to considering the waiver of 
patent rights at the time of contracting, DOE will also consider the 
incentive of a waiver of patent rights upon the reporting of an 
identified invention when requested by such entities or by the employee-
inventor with the permission of the contractor. These requests can be 
made whether or not a waiver request was made at the time of 
contracting. Waivers for identified inventions will be granted where it 
is determined that the patent waiver will be a meaningful incentive to 
achieving the development and ultimate commercial utilization of 
inventions. Where DOE grants a waiver of the Government's patent rights, 
either at the time of contracting or after an invention is made, certain 
minimum rights and obligations will be required by DOE to protect the 
public interest.
    (c) Another major DOE mission is to manage the nation's nuclear 
weapons and other classified programs, where research and development 
procurements are directed toward processes and equipment not available 
to the public. To accomplish DOE programs for bringing private industry 
into these and other special programs to the maximum extent permitted by 
national security and policy considerations, it is desirable that the 
technology developed in these programs be made available on a selected 
basis for use in the particular fields of interest and under controlled 
conditions by properly cleared industrial and scientific research 
institutions. To ensure such availability and control, the grant of 
waivers in these programs may necessarily be more limited, either by the 
imposition of field of use restrictions or national security measures, 
than in other DOE programs.

[60 FR 11815, Mar. 2, 1995, as amended at 63 FR 10505, Mar. 4, 1998]

[[Page 340]]



927.302  Policy.

    (a) Except for contracts with organizations that are beneficiaries 
of Public Law 96-517, the United States, as represented by DOE, shall 
normally acquire title in and to any invention or discovery conceived or 
first actually reduced to practice in the course of or under the 
contract, allowing the contractor to retain a nonexclusive, revocable, 
paid-up license in the invention and the right to request permission to 
file an application for a patent and retain title to any ensuing patent 
in any foreign country in which DOE does not elect to secure patent 
rights. DOE may approve the request if it determines that such approval 
would be in the national interest. The contractor's nonexclusive license 
may be revoked or modified by DOE only to the extent necessary to 
achieve expeditious practical application of the invention pursuant to 
any application for and the grant of an exclusive license in the 
invention to another party.
    (b) In contracts having as a purpose the conduct of research, 
development, or demonstration work and in certain other contracts, DOE 
may need to require those contractors that are not the beneficiaries of 
Public Law 96-517 to license background patents to ensure reasonable 
public availability and accessibility necessary to practice the subject 
of the contract in the fields of technology specifically contemplated in 
the contract effort. That need may arise where the contractor is not 
attempting to take the technology resulting from the contract to the 
commercial marketplace, or is not meeting market demands. The need for 
background patent rights and the particular rights that should be 
obtained for either the Government or the public will depend upon the 
type, purpose, and scope of the contract effort, impact on the DOE 
program, and the cost to the Government of obtaining such rights.
    (c) Provisions to deal specifically with DOE background patent 
rights are contained in paragraph (k) of the clause at 952.227-13. That 
paragraph may be modified with the concurrence of Patent Counsel in 
order to reflect the equities of the parties in particular contracting 
situations. Paragraph (k) should normally be deleted for contracts with 
an estimated cost and fee or price of $250,000 or less and may not be 
appropriate for certain types of study contracts; for planning 
contracts; for contracts with educational institutions; for contracts 
for specialized equipment for in-house Government use, not involving use 
by the public; and for contracts the work products of which will not be 
the subject of future procurements by the Government or its contractors.
    (d) The Assistant General Counsel for Technology Transfer and 
Intellectual Property shall:
    (1) Make the determination that whether reported inventions are 
subject inventions under the patent rights clause of the contract;
    (2) Determine whether and where patent protection will be obtained 
on inventions;
    (3) Represent DOE before domestic and foreign patent offices;
    (4) Accept assignments and instruments confirmatory of the 
Government's rights to inventions; and
    (5) Represent DOE in patent, technical data, and copyright matters 
not specifically reserved to the Head of the Agency or designee.

[60 FR 11816, Mar. 2, 1995]



927.303  Contract clauses.

    (a) In solicitations and contracts for experimental, research, 
developmental, or demonstration work (but see (FAR) 48 CFR 27.304-3 
regarding contracts for construction work or architect-engineer 
services), the contracting officer shall include the clause:
    (1) At 952.227-13, Patent Rights Acquisition by the Government, in 
all such contracts other than those described in paragraphs (a)(2) and 
(a)(3) of this section;
    (2) At 952.227-11, Patent Rights by the Contractor (Short Form), in 
contracts in which the contractor is a domestic small business or 
nonprofit organization as defined at (FAR) 48 CFR 27.301, except where 
the work of the contract is subject to an Exceptional Circumstances 
Determination by DOE; and
    (3) At 970.5227-10, 970.5227-11, or 970.5227-12, as discussed in 
970.27, Patent, Data, and Copyrights, in contracts for the management 
and operation of

[[Page 341]]

DOE laboratories and production facilities.
    (b) DOE shall not use the clause at (FAR) 48 CFR 52.227-12 except in 
situations where patent counsel grants a request for advance waiver 
pursuant to 10 CFR part 784 and supplies the contracting officer with 
that clause with appropriate modifications. Otherwise, in instances in 
which DOE grants an advance waiver or waives its rights in an identified 
invention pursuant to 10 CFR part 784, contracting officers shall 
consult with patent counsel for the appropriate clause.
    (c) Any contract that has as a purpose the design, construction, 
operation, or management integration of a collection of contracts for 
the same purpose, of a Government-owned research, development, 
demonstration or production facility must accord the Government certain 
rights with respect to further use of the facility by or on behalf of 
the Government upon termination of the contract. The patent rights 
clause in such contracts must include the following facilities license 
paragraph:

    [Insert appropriate paragraph no.] Facilities License. In addition 
to the rights of the parties with respect to inventions or discoveries 
conceived or first actually reduced to practice in the course of or 
under this contract, the Contractor agrees to and does hereby grant to 
the Government an irrevocable, nonexclusive, paid-up license in and to 
any inventions or discoveries regardless of when conceived or actually 
reduced to practice or acquired by the Contractor at any time through 
completion of this contract and which are incorporated or embodied in 
the construction of the facility or which are utilized in the operation 
of the facility or which cover articles, materials, or products 
manufactured at the facility (1) to practice or have practiced by or for 
the Government at the facility, and (2) to transfer such license with 
the transfer of that facility. Notwithstanding the acceptance or 
exercise by the Government of these rights, the Government may contest 
at any time the enforceability, validity or scope of, title to, any 
rights or patents herein licensed.

                           (End of paragraph)

[60 FR 11816, Mar. 2, 1995, as amended at 63 FR 10505, Mar. 4, 1998; 65 
FR 68935, Nov. 15, 2000; 65 FR 81007, Dec. 22, 2000]



927.304  Procedures.

    Where the contract contains the clause at 952.227-11 and the 
contractor does not elect to retain title to a subject invention, DOE 
may consider and, after consultation with the contractor, grant requests 
for retention of rights by the inventor subject to the provisions of 35 
U.S.C. 200 et seq. This statement is in lieu of (FAR) 48 CFR 27.304-
1(c).

[60 FR 11816, Mar. 2, 1995]



927.370  [Reserved]



               Subpart 927.4_Technical Data and Copyrights



927.400  Scope of subpart.

    This subpart sets forth DOE's policy, procedures, and instructions 
for contract clauses with respect to the acquisition and use of 
technical data and copyrights in contracts or subcontracts entered into, 
with or for the benefit of the Government.



927.402  Acquisition and use of technical data.



927.402-1  General.

    (a) The provisions herein pertain to research, development, 
demonstration and supply contracts. Special considerations for contracts 
for the operation, design, or construction of Government-owned 
facilities are covered by subpart 970.27. Under DOE's broad charter to 
perform research, development, and demonstration work, in both nuclear 
and nonnuclear fields, and to meet the objectives stated in 927.402-2, 
DOE has extensive needs for technical data. The satisfaction of these 
needs and the achievement of DOE's objectives through a sound data 
policy are found in the balancing of the needs and equities of the 
Government, its contractors, and the general public.
    (b) It is important to keep a clear distinction between contract 
requirements for the delivery of technical data and rights in technical 
data. The legal rights which the Government acquires in technical data 
in DOE contracts, other than management and operating contracts (see 48 
CFR 970.2704)

[[Page 342]]

and other contracts involving the production of data necessary for the 
management or operation of DOE facilities or a DOE site, are set forth 
in Rights in Data--General clause at 48 CFR 52.227-14 as modified in 
accordance with 927.409 of this subpart. In those contracts involving 
the production of data necessary for the management or operation of DOE 
facilities or a DOE site, after consultation with Patent Counsel the 
clause at 48 CFR 970.5227-1 shall be used. However, those clauses do not 
obtain for the Government delivery of any data whatsoever. Rather, known 
requirements for the technical data to be delivered by the contractor 
shall be set forth as part of the contract. The Additional Technical 
Data Requirements clause at 48 CFR 52.227-16 may be used along with the 
Rights in Data--General clause to enable the contracting officer to 
require the contractor to furnish additional technical data, the 
requirement for which was not known at the time of contracting. There 
is, however, a built-in limitation on the kind of technical data which a 
contractor may be required to deliver under either the contract or the 
Additional Technical Data Requirements clause. This limitation is found 
in the withholding provision of paragraph (g) of the Rights in Data--
General clause at 48 CFR 52.227-14, as amended at 48 CFR 927.409(a), 
which provides that the Contractor need not furnish limited rights data 
or restricted computer software. Unless Alternate II or III to the 
Rights in Data--General clause is used, it is specifically intended that 
the contractor may withhold limited rights data or restricted computer 
software even though a requirement for technical data specified in the 
contract or called for delivery pursuant to the Additional Technical 
Data Requirements clause would otherwise require the delivery of such 
data.
    (c) In contracts involving access to certain categories of DOE-owned 
restricted data, as set forth in 10 CFR part 725, DOE has reserved the 
right to receive reasonable compensation for the use of its inventions 
and discoveries, including its related data and technology. Accordingly, 
in contracts where access to such restricted data is to be provided to 
contractors, the following parenthetical phrase shall be inserted after 
``contract data'' in paragraph (b)(2)(ii) of the clause at 952.227-75, 
after ``technical data'' in paragraph (b)(2) of the clause at 952.227-
77, or after ``technical data'' in paragraph (b)(2)(ii) of the clause at 
952.227-78 as appropriate: ``(except Restricted Data in category C-24, 
10 CFR part 725, in which DOE has reserved the right to receive 
reasonable compensation for the use of its inventions and discoveries, 
including related data and technology).'' In addition, there are other 
types of contract situations (e.g., no cost contracts for studies or 
evaluation) wherein the contractor is given access to restricted data. 
In such contract situations, limitations on the use of such data may be 
appropriate.

[49 FR 12004, Mar. 28, 1984, as amended at 63 FR 10505, Mar. 4, 1998; 65 
FR 81007, Dec. 22, 2000]



927.402-2  Policy.

    The technical data policy is directed toward achieving the following 
objectives:
    (a) Making the benefits of the energy research, development and 
demonstration programs of DOE widely available to the public in the 
shortest practicable time;
    (b) Promoting the commercial utilization of the technology developed 
under DOE programs;
    (c) Encouraging participation by private persons in DOE energy 
research, development, and demonstration programs; and
    (d) Fostering competition and preventing undue market concentration 
or the creation or maintenance of other situations inconsistent with the 
antitrust laws.



927.403  Negotiations and deviations.

    Contracting officers shall contact Patent Counsel assisting their 
contracting activity or the Assistant General Counsel for Technology 
Transfer and Intellectual Property for assistance in selecting, 
negotiating, or approving appropriate data and copyright clauses in 
accordance with the procedures set forth in this subpart and 48 CFR part 
27.4. In particular, contracting officers shall seek the prompt

[[Page 343]]

and timely advice of Patent Counsel regarding any situation not in 
conformance with this subpart and prescribed clauses, including the 
inclusion or modification of alternate paragraphs of the Rights in Data 
clause at 48 CFR 52.227-14, as amended at 48 CFR 927.409(a), the 
exclusion of specific items from said clause, the exclusion of the 
Additional Technical Data Requirements clause at 48 CFR 52.227-16, and 
the inclusion of any special provisions in a particular contract.

[63 FR 10505, Mar. 4, 1998]



927.404  Rights in technical data in subcontracts. (DOE coverage--paragraphs 
(g), (k), (l), and (m))

    (g)(4) Contractors are required by paragraph (d)(3) of the clause at 
FAR 52.227-14, as modified pursuant to 48 CFR 927.409(a)(1), to acquire 
permission from DOE to assert copyright in any computer software first 
produced in the performance of the contract. This requirement reflects 
DOE's established software distribution program, recognized at FAR 
27.404(g)(2), and the Department's statutory dissemination obligations. 
When a contractor requests permission to assert copyright in accordance 
with paragraph (d)(3) of the Rights in Data--General clause as 
prescribed for use at 48 CFR 927.409(a)(1), Patent Counsel shall 
predicate its decision on the considerations reflected in paragraph (e) 
of the clause at 48 CFR 970.5227-2 Rights in Data--Technology Transfer.
    (k) Subcontracts. (1)(i) It is the responsibility of prime 
contractors and higher tier subcontractors, in meeting their obligations 
with respect to contract data, to obtain from their subcontractor the 
rights in, access to, and delivery of such data on behalf of the 
Government. Accordingly, subject to the policy set forth in this 
subpart, and subject to the approval of the contracting officer, where 
required, selection of appropriate technical data provisions for 
subcontracts is the responsibility of the prime contractors or higher-
tier subcontractors. In many, but not all instances, use of the Rights 
in Technical Data clause of FAR 52.227-14, as modified pursuant to 48 
CFR 927.409(a)(1), in a subcontract will provide for sufficient 
Government rights in and access to technical data. The inspection rights 
afforded in Alternate V of that clause normally should be obtained only 
in first-tier subcontracts having as a purpose the conduct of research, 
development, or demonstration work or the furnishing of supplies for 
which there are substantial technical data requirements as reflected in 
the prime contract.
    (ii) If a subcontractor refuses to accept technical data provisions 
affording rights in and access to technical data on behalf of the 
Government, the contractor shall so inform the contracting officer in 
writing and not proceed with the award of the subcontract without 
written authorization of the contracting officer.
    (iii) In prime contracts (or higher-tier subcontracts) which contain 
the Additional Technical Data Requirements clause at FAR 52.227-16, it 
is the further responsibility of the contractor (or higher-tier 
subcontractor) to determine whether inclusion of such clause in a 
subcontract is required to satisfy technical data requirements of the 
prime contract (or higher-tier subcontract).
    (2) As is the case for DOE in its determination of technical data 
requirements, the Additional Technical Data Requirements clause at FAR 
52.227-16 should not be used at any subcontracting tier where the 
technical data requirements are fully known. Normally, the clause will 
be used only in subcontracts having as a purpose the conduct of 
research, development, or demonstration work. Prime contractors and 
higher-tier subcontractors shall not use their power to award 
subcontracts as economic leverage to acquire rights in the 
subcontractor's limited rights data or restricted computer software for 
their private use, and they shall not acquire rights to limited rights 
data or restricted computer software on behalf of the Government for 
standard commercial items without the prior approval of Patent Counsel.
    (l) Contractor licensing. In many contracting situations the 
achievement of DOE's objectives would be frustrated if the Government, 
at the time of contracting, did not obtain on behalf of responsible 
third parties and itself limited license rights in and to limited

[[Page 344]]

rights data or restricted computer software or both necessary for the 
practice of subject inventions or data first produced or delivered in 
the performance of the contract. Where the purpose of the contract is 
research, development, or demonstration, contracting officers should 
consult with program officials and Patent Counsel to consider whether 
such rights should be acquired. No such rights should be obtained from a 
small business or non-profit organization, unless similar rights in 
background inventions of the small business or non-profit organization 
have been authorized in accordance with 35 U.S.C. 202(f). In all cases 
when the contractor has agreed to include a provision assuring 
commercial availability of background patents, consideration should be 
given to securing for the Government and responsible third parties at 
reasonable royalties and under appropriate restrictions, co-extensive 
license rights for data which are limited rights data and restricted 
computer software. When such license rights are deemed necessary, the 
Rights in Data-General clause at FAR 52.227-14 should be supplemented by 
the addition of Alternate VI as provided at 48 CFR 952.227-14. Alternate 
VI will normally be sufficient to cover limited rights data and 
restricted computer software for items and processes that were used in 
the contract and are necessary in order to insure widespread commercial 
use or practical utilization of a subject of the contract. The 
expression ``subject of the contract'' is intended to limit the 
licensing required in Alternate VI to the fields of technology 
specifically contemplated in the contract effort and may be replaced by 
a more specific statement of the fields of technology intended to be 
covered in the manner described in the patent clause at 48 CFR 952.227-
13 pertaining to ``Background Patents.'' Where, however, limited rights 
data and restricted computer software cover the main purpose or basic 
technology of the research, development, or demonstration effort of the 
contract, rather than subcomponents, products, or processes which are 
ancillary to the contract effort, the limitations set forth in 
subparagraphs (k)(1) through (k)(4) of Alternate VI of 48 CFR 952.227-14 
should be modified or deleted. Paragraph (k) of 48 CFR 952.227-14 
further provides that limited rights data or restricted computer 
software may be specified in the contract as being excluded from or not 
subject to the licensing requirements thereof. This exclusion can be 
implemented by limiting the applicability of the provisions of paragraph 
(k) of 48 CFR 952.227-14 to only those classes or categories of limited 
rights data and restricted computer software determined as being 
essential for licensing. Although contractor licensing may be required 
under paragraph (k) of 48 CFR 952.227-14, the final resolution of 
questions regarding the scope of such licenses and the terms thereof, 
including provisions for confidentiality, and reasonable royalties, is 
then left to the negotiation of the parties.
    (m) Access to restricted data. In contracts involving access to 
certain categories of DOE-owned Category C-24 restricted data, as set 
forth in 10 CFR part 725, DOE has reserved the right to receive 
reasonable compensation for the use of its inventions and discoveries, 
including its related data and technology. Accordingly, in contracts 
where access to such restricted data is to be provided to contractors, 
Alternate VII shall be incorporated into the rights in technical data 
clause of the contract. In addition, in any other types of contracting 
situations in which the contractor may be given access to restricted 
data, appropriate limitations on the use of such data must be specified.

[63 FR 10505, Mar. 4, 1998, as amended at 65 FR 81007, Dec. 22, 2000]



927.404-70  Statutory programs.

    Occasionally, Congress enacts legislation that authorizes or 
requires the Department to protect from public disclosure specific data 
first produced in the performance of the contract. Examples of such 
programs are ``the Metals Initiative'' and section 3001(d) of the Energy 
Policy Act. In such cases DOE Patent Counsel is responsible for 
providing the appropriate contractual provisions for protecting the data 
in accordance with the statute. Generally, such clauses will be based 
upon the Rights in Data-General clause prescribed for use at 48 CFR 
927.409(a) with

[[Page 345]]

appropriate modifications to define and protect the ``protected data'' 
in accordance with the applicable statute. When contracts under such 
statutes are to be awarded, contracting officers must acquire from 
Patent Counsel the appropriate contractual provisions. Additionally, the 
contracting officer must consult with DOE program personnel and Patent 
Counsel to identify data first produced in the performance of the 
contract that will be recognized by the parties as protected data and 
what data will be made available to the public notwithstanding the 
statutory authority to withhold the data from public dissemination.

[63 FR 10506, Mar. 4, 1998]



927.408  Cosponsored research and development activities.

    Because of the Department of Energy's statutory duties to 
disseminate data first produced under its contracts for research, 
development, and demonstration, the provisions of FAR 27.408 do not 
apply to cosponsored or cost shared contracts.

[63 FR 10506, Mar. 4, 1998]



927.409  Solicitation provisions and contract clauses. (DOE coverage-paragraphs 
(a), (h), (s), and (t))

    (a)(1) The contracting officer shall insert the clause at FAR 
52.227-14, Rights in Data-General, substituting the following paragraph 
(a) and including the following paragraph (d)(3) and Alternate V in 
solicitations and contracts if it is contemplated that data will be 
produced, furnished, or acquired under the contract; except contracting 
officers are authorized to use Alternate IV rather than paragraph (d)(3) 
in contracts for basic or applied research with educational institutions 
except where software is specified for delivery or except where other 
special circumstances exist:

    (a) Definitions. (1) Computer data bases, as used in this clause, 
means a collection of data in a form capable of, and for the purpose of, 
being stored in, processed, and operated on by a computer. The term does 
not include computer software.
    (2) Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines, or statements, regardless of the media in which recorded, that 
allow or cause a computer to perform a specific operation or series of 
operations and (ii) data comprising source code listings, design 
details, algorithms, processes, flow charts, formulae, and related 
material that would enable the computer program to be produced, created, 
or compiled. The term does not include computer data bases.
    (3) Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The term 
includes technical data and computer software. For the purposes of this 
clause, the term does not include data incidental to the administration 
of this contract, such as financial, administrative, cost and pricing, 
or management information.
    (4) Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability, as well as data 
identifying source, size, configuration, mating, and attachment 
characteristics, functional characteristics, and performance 
requirements; except that for computer software it means data 
identifying source, functional characteristics, and performance 
requirements but specifically excludes the source code, algorithm, 
process, formulae, and flow charts of the software.
    (5) Limited rights data, as used in this clause, means data, other 
than computer software, developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged. 
The Government's rights to use, duplicate, or disclose limited rights 
data are as set forth in the Limited Rights Notice of subparagraph 
(g)(2) of this section if included in this clause.
    (6) Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and is confidential or privileged; or 
is published copyrighted computer software, including minor 
modifications of any such computer software. The Government's rights to 
use, duplicate, or disclose restricted computer software are as set 
forth in the Restricted Rights Notice of subparagraph (g)(3) of this 
section if included in this clause.
    (7) Technical data, as used in this clause, means recorded data, 
regardless of form or characteristic, that are of a scientific or 
technical nature. Technical data does not include computer software, but 
does include manuals and instructional materials and technical data 
formatted as a computer data base.
    (8) Unlimited rights, as used in this clause, means the rights of 
the Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, including by electronic means, and 
perform

[[Page 346]]

publicly and display publicly, in any manner, including by electronic 
means, and for any purpose whatsoever, and to have or permit others to 
do so.
    (d)(3) The Contractor agrees not to assert copyright in computer 
software first produced in the performance of this contract without 
prior written permission of the DOE Patent Counsel assisting the 
contracting activity. When such permission is granted, the Patent 
Counsel shall specify appropriate terms, conditions, and submission 
requirements to assure utilization, dissemination, and commercialization 
of the data. The Contractor, when requested, shall promptly deliver to 
Patent Counsel a duly executed and approved instrument fully 
confirmatory of all rights to which the Government is entitled.

    (2) However, rights in data in these specific situations will be 
treated as described, where the contract is--
    (i) For the production of special works of the type set forth in FAR 
27.405(a), but the clause at FAR 52.227-14, Rights in Data-General, 
shall be included in the contract and made applicable to data other than 
special works, as appropriate (See paragraph (i) of FAR 27.409);
    (ii) For the acquisition of existing data works, as described in FAR 
27.405(b) (See paragraph (j) of FAR 27.409);
    (iii) To be performed outside the United States, its possessions, 
and Puerto Rico, in which case agencies may prescribe different clauses 
(See paragraph (n) of FAR 27.409);
    (iv) For architect-engineer services or construction work, in which 
case contracting officers shall utilize the clause at FAR 52.227-17, 
Rights in Data-Special Works;
    (v) A Small Business Innovation Research contract (See paragraph (l) 
of FAR 27.409);
    (vi) For management and operation of a DOE facility (see 48 CFR 
970.2704) or other contracts involving the production of data necessary 
for the management or operation of DOE facilities or a DOE site, after 
consultation with Patent Counsel (See 927.402-1(b)); or
    (vii) Awarded pursuant to a statute expressly providing authority 
for the protection of data first produced thereunder from disclosure or 
dissemination. (See 927.404-70).
    (h) The contracting officer shall insert the clause at FAR 52.227-
16, Additional Data Requirements, in solicitations and contracts 
involving experimental, developmental, research, or demonstration work 
(other than basic or applied research to be performed solely by a 
university or college where the contract amount will be $500,000 or 
less) unless all the requirements for data are believed to be known at 
the time of contracting and specified in the contract. See FAR 
27.406(b). This clause may also be used in other contracts when 
considered appropriate.

                                * * * * *

    (s) Contracting officers shall incorporate the solicitation 
provision at FAR 52.227-23, Rights to Proposal Data (Technical), in all 
requests for proposals.
    (t) Contracting officers shall include the solicitation provision at 
952.227-84 in all solicitations involving research, developmental, or 
demonstration work.

[63 FR 10506, Mar. 4, 1998, as amended at 65 FR 81007, Dec. 22, 2000]

Subpart 927.70 [Reserved]



PART 928_BONDS AND INSURANCE--Table of Contents




                           Subpart 928.1_Bonds

Sec.
928.101-1 Policy on use.
928.103-3 Payment bonds.
928.103-70 Review of performance and payment bonds for other than 
          construction.

                         Subpart 928.3_Insurance

928.301 Policy.
928.370 Service-type insurance policies.

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

    Source: 49 FR 12010, Mar. 28, 1984, unless otherwise noted.



                           Subpart 928.1_Bonds

    Source: 61 FR 41708, Aug. 9, 1996, unless otherwise noted.



928.101-1  Policy on use.

    In addition to the restriction on use of bid guarantees in FAR 
28.101-1(a), a bid guarantee may be required only for

[[Page 347]]

fixed price or unit price contracts entered into as a result of sealed 
bidding. They may not be required for negotiated contracts.



928.103-3  Payment bonds.

    A determination that is in the best interest of the Government to 
require payment bonds in connection with other than construction 
contracts may be made by the contracting officer on individual 
acquisitions.



928.103-70  Review of performance and payment bonds for other than construction.

    A performance or payment bond, other than an annual bond, shall not 
antedate the contract to which it pertains.



                         Subpart 928.3_Insurance



928.301  Policy.

    The DOE policies and procedures for indemnification of DOE 
contractors are set forth in FAR Part 50 and 950.



928.370  Service-type insurance policies.

    (a) Service-type insurance policies are cost-reimbursement type 
contracts or subcontracts in which the insurer provides claim and loss 
adjustment services on a cost reimbursement basis, which satisfies state 
and Federal insurance requirements.
    (b) Service-type insurance policies may be used with contracting 
officer approval, when one or more of the following conditions are 
present:
    (1) Pure risk commercial insurance is not available or, if 
available, cost is not considered reasonable;
    (2) Inherent risks in the contract are new and a part of the process 
of commercialization;
    (3) The service-type insurance is needed to implement jointly funded 
projects; or
    (4) The service-type insurance arrangement is considered in the 
Government's best interest.



PART 931_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




                       Subpart 931.1_Applicability

Sec.
931.102 Fixed-price contracts.

          Subpart 931.2_Contracts With Commercial Organizations

931.205-18 Independent research and development (IR&D) and bid and 
          proposal (B&P) costs.
931.205-19 Insurance and Indemnification. (Department coverage-paragraph 
          (h)).
931.205-32 Precontract costs.
931.205-33 xxx
931.205-47 Costs related to legal and other proceedings.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.



                       Subpart 931.1_Applicability



931.102  Fixed-price contracts.

    The intent of the first sentence of FAR 31.102 is that applicable 
subparts of FAR Part 31 shall be used by the Government in (a) pricing 
fixed-price prime contracts and modifications, (b) evaluating the 
reasonableness of a prime contractor's (or prospective prime 
contractor's) proposed subcontract (or subcontract modification) prices, 
and (c) determining the allowability of contractor payments to 
subcontractors in accordance with the provisions of FAR 31.204(b).

[49 FR 12011, Mar. 28, 1984]



          Subpart 931.2_Contracts With Commercial Organizations



931.205-18  Independent research and development (IR&D) and bid and proposal 
(B&P) costs.

    (c)(2) IR&D costs are recoverable under DOE contracts to the extent 
they are reasonable, allocable, not otherwise unallowable, and have 
potential benefit or relationship to the DOE program. The term ``DOE 
program'' encompasses the DOE total mission and its objectives. B&P 
costs are recoverable under DOE contracts to the extent they are 
reasonable, allocable, and not otherwise unallowable.

[60 FR 30004, June 7, 1995]

[[Page 348]]



931.205-19  Insurance and Indemnification. (Department coverage-paragraph (h)).

    (h) The contracting officer shall insert the clause at 48 CFR 
952.231-71 in non-management and operating cost reimbursement contracts 
involving work performed at facilities owned or leased by the Department 
exceeding $100,000,000.

[66 FR 4627, Jan. 18, 2001, as amended at 67 FR 14871, Mar. 28, 2002]



931.205-32  Precontract costs.

    (a) To the extent practical, known expenditures of precontract costs 
under DOE contracts should be governed by establishing advance 
understandings as contemplated by FAR 31.109. Contracts that include 
authorized precontract costs shall include the ``Date of Incurrence of 
Cost'' clause specified at 952.231-70.
    (b) The following limitations apply to establishment of advance 
understandings relative to precontract costs:
    (1) Precontract cost authorizations shall not be used to cover a 
period in excess of 15 days, unless a longer period is approved by the 
HCA based upon a written finding that such an allowance is reasonable, 
and shall not be extended or renewed. A copy of the findings shall be 
forwarded to the Procurement Executive at the time of approval. If 
prolonged coverage is necessary, a letter contract shall be issued.
    (2) All precontract cost authorizations shall be reviewed and 
approved at a management level above the contracting officer.
    (3) Retroactive precontract cost authorization and the predating of 
contractual agreements shall not be used.
    (4) Precontract cost authorizations shall not authorize the delivery 
or furnishing of any goods or services from a contractor until after the 
contract is executed.

[49 FR 12011, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984]



931.205-33  Professional and consultant service costs. (Department 
coverage-paragraph (g)).

    (g)(1) Reasonable litigation and other legal expenses are allowable 
when incurred in accordance with 10 CFR part 719, Contractor Legal 
Management Requirements, if not otherwise made unallowable by law or 
provisions of the contract.
    (2)(A) Cost reimbursement contracts involving work performed at 
facilities owned or leased by the Department for an amount exceeding 
$100,000,000 are covered by this cost principle and 10 CFR part 719.
    (B) This cost principle and 10 CFR part 719 are applicable to legal 
counsel retained by the Department itself for litigation and other legal 
services where the legal costs over the life of the matter for which 
counsel has been retained are expected to exceed $100,000.
    (3) Contractors described in paragraph (g)(2)(A) of this section are 
required to submit a Legal Management Plan within 60 days of execution 
of a contract.

[66 FR 4627, Jan. 18, 2001]



931.205-47  Costs related to legal and other proceedings. (DOE 
coverage-paragraph (h)).

    (h) Costs Associated with Whistleblower Actions.
    (1) Definitions for purposes of this paragraph (h):
    Covered contractors and subcontractors means those contractors and 
subcontractors with contracts exceeding $5,000,000.
    Employee whistleblower action means any action filed by an employee 
in Federal or state court for redress of a retaliatory act by a 
contractor and any administrative procedure initiated by an employee 
under 29 CFR Part 24, 48 CFR subpart 3.9, 10 CFR Part 708 or 42 U.S.C. 
7239.
    Retaliatory act means a discharge, demotion, reduction in pay, 
coercion, restraint, threat, intimidation or other similar negative 
action taken against an employee by a contractor as a result of an 
employee's activity protected as a whistleblower activity by a Federal 
or state statute or regulation.
    Settlement and award costs means defense costs and costs arising 
from judicial orders, negotiated agreements, arbitration, or an order 
from a Federal agency or board and includes compensatory damages, 
underpayment for work performed, and reimbursement

[[Page 349]]

for a complainant employee's legal counsel.
    (2) For costs associated with employee whistleblower actions where a 
retaliatory act is alleged against a covered contractor or 
subcontractor, the contracting officer:
    (i) May authorize reimbursement of costs on a provisional basis, in 
appropriate cases;
    (ii) Must consult with the Office of General Counsel whistleblower 
costs point of contact, who will consult with other Headquarters points 
of contact as appropriate, before making a final allowability 
determination; and
    (iii) Must determine allowability of defense, settlement and award 
costs on a case-by-case basis after considering the terms of the 
contract, relevant cost regulations, and the relevant facts and 
circumstances, including federal law and policy prohibiting reprisal 
against whistleblowers, available at the conclusion of the employee 
whistleblower action.
    (3) Covered contractors and subcontractors must segregate legal 
costs, including costs of in-house counsel, incurred in the defense of 
an employee whistleblower action so that the costs are separately 
identifiable.
    (4) If a contracting officer provisionally disallows costs 
associated with an employee whistleblower action for a covered 
contractor or subcontractor, funds advanced by the Department may not be 
used to finance costs connected with the defense, settlement and award 
of an employee whistleblower action.
    (5) Contractor defense, settlement and award costs incurred in 
connection with the defense of suits brought by employees under section 
2 of the Major Fraud Act of 1988 are excluded from coverage of this 
section.

[65 FR 62301, Oct. 18, 2000]



PART 932_CONTRACT FINANCING--Table of Contents




Sec.
932.006-4 Procedures.

                          Subpart 932.1_General

932.102 Description of contract financing methods.

          Subpart 932.3_Loan Guarantees for Defense Production

932.304-2 Certificate of eligibility.

         Subpart 932.4_Advance Payments for Non-Commercial Items

932.402 General.
932.407 Interest.

             Subpart 932.5_Progress Payments Based on Costs

932.501-2 Unusual progress payments.

                      Subpart 932.6_Contract Debts

932.605 Responsibilities and cooperation among Government officials.

                   Subpart 932.8_Assignment of Claims

932.803 Policies.

                      Subpart 932.9_Prompt Payment

932.970 Implementing DOE policies and procedures.

               Subpart 932.70_DOE Loan Guarantee Authority

932.7002 Authority.
932.7003 Policies.
932.7004 Procedures.
932.7004-1 Guaranteed loans for civilian programs.
932.7004-2 Criteria.
932.7004-3 Eligibility.

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

    Source: 49 FR 12011, Mar. 28, 1984, unless otherwise noted.



932.006-4  Procedures.

    (a) The remedy coordination official shall follow the procedures 
identified in FAR 32.006-4.
    (b) [Reserved]

[63 FR 5273, Feb. 2, 1998]



                          Subpart 932.1_General



932.102  Description of contract financing methods. (DOE 
coverage--paragraph (e))

    (e)(2) Progress payments based on a percentage or stage of 
completion may be authorized by the Head of the Contracting Activity 
when a determination is made that progress payments based on costs 
cannot be practically employed and that there are adequate

[[Page 350]]

safeguards provided for the administration of progress payments based on 
a percentage or stage of completion.

[61 FR 41708, Aug. 9, 1996]



          Subpart 932.3_Loan Guarantees for Defense Production



932.304-2  Certificate of eligibility.

    (h) Guaranteed loan applications shall be authorized and transmitted 
to the Federal Reserve Bank only by the Secretary or designee specified 
for that purpose.



         Subpart 932.4_Advance Payments for Non-Commercial Items



932.402  General.

    (e)(1) The Head of the Contracting Activity or designee shall have 
the responsibility and authority for making findings and determinations, 
and for approval of contract terms concerning advance payments.
    (2) Before authorizing any advance payment arrangements, the 
approving official shall obtain the advice, and other inputs of the 
servicing finance office.



932.407  Interest.

    (d)(4) Advance payments may be made without interest under cost-
reimbursement contracts for construction or engineering services.



             Subpart 932.5_Progress Payments Based on Costs



932.501-2  Unusual progress payments.

    (a)(3) The Head of the Contracting Activity shall forward all 
requests which are considered favorable, with supporting information, to 
the Chief Financial Officer, Headquarters, will approve or deny the 
request.
    (d) Requests for unusual progress payments will not be considered as 
a handicap or adverse factor in the award of a contract; provided the 
bid or proposal is not conditioned on approval of such request.

[49 FR 12011, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



                      Subpart 932.6_Contract Debts



932.605  Responsibilities and cooperation among Government officials.

    (b) The DOE contracting officer has primary responsibility for 
determining the amount of contract debt and notifying the cognizant 
finance office of such debt due the Government. The servicing DOE 
finance office making payments under the contract has primary 
responsibility for debt collection.



                   Subpart 932.8_Assignment of Claims



932.803  Policies.

    (d) In the case of prime contracts, when it has been determined that 
the financing of contracts will be facilitated in the interest of DOE 
programs, it is the policy of DOE that such contracts provide, or be 
amended without consideration (see Assignment of Claims Act of 1940) to 
provide, in conformance with FAR 32.804, that payments to be made to an 
assignee shall not be subject to reduction or setoff. In the case of 
subcontracts, when loans are made for the purpose of financing 
performance of subcontracts under DOE prime contracts, financing 
institutions or the Government as guarantor in those instances in which 
such loans are guaranteed should not be required to incur risks of loss 
by reason of possible diversion of assigned subcontracts proceeds for 
payment of other claims of the prime contractor against the borrower, 
otherwise unrelated to the assigned subcontracts. The Head of the 
Contracting Activity shall require the adoption of these policies and 
practices by DOE prime contractors with respect to DOE subcontract work. 
The Head of the Contracting Activity should inform the Chief Financial 
Officer, Headquarters of each DOE contractor who is unwilling to adopt 
policies consistent with this paragraph and the reasons given in support 
of the contractor's position.

[49 FR 12011, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]

[[Page 351]]



                      Subpart 932.9_Prompt Payment



932.970  Implementing DOE policies and procedures.

    (a) Invoice payments--(1) Contract Settlement Date. For purposes of 
determining any interest penalties under cost-type contracts, the 
effective date of contract settlement shall be the effective date of the 
final contract modification issued to acknowledge contract settlement 
and to close out the contract.
    (2) Constructive acceptance periods. Where the contracting officer 
determines, in writing, on a case-by-case basis, that it is not 
reasonable or feasible for DOE to perform the acceptance or approval 
function within the standard period, the contracting officer should 
specify a longer constructive acceptance or approval period, as 
appropriate. Considerations include, but are not limited to, the nature 
of supplies or services involved, geographical site location, inspection 
and testing requirements, shipping and acceptance terms, and available 
DOE resources.
    (b) Contract financing payments. Contracting officers may specify 
payment due dates that are less than the standard 30 days when a 
determination is made, in writing, on a case-by-case basis, that a 
shorter contract financing payment cycle will be required to finance 
contract work. In such cases, the contracting officer should coordinate 
with the finance and program officials that will be involved in the 
payment process to ensure that the contract payment terms to be 
specified in solicitations and resulting contract awards can be 
reasonably met. Consideration should be given to geographical 
separation, workload, contractor ability to submit a proper request, and 
other factors that could affect timing of payment. However, payment due 
dates that are less than 7 days for progress payments or less than 14 
days for interim payments on cost-type contracts are not authorized.

[61 FR 41708, Aug. 9, 1996]



               Subpart 932.70_DOE Loan Guarantee Authority



932.7002  Authority.

    Guaranteed loan applications shall be authorized and transmitted to 
the Federal Reserve Board only by the Secretary, or designee specified 
for that purpose, and only when made pursuant to enabling legislation or 
other authority; e.g., by executive order or regulation.



932.7003  Policies.

    The following policies governing the exercise of its loan guarantee 
authority have been established by DOE:
    (a) The use of the loan guarantee authority is not restricted to 
contracts or subcontracts of any particular type or class. Each case is 
to be evaluated on its own merits and under the particular circumstances 
applicable thereto.
    (b) The fact that a contract has been awarded as a result of 
competitive bidding should not, of itself, render the loan ineligible 
for guarantee by DOE if the contractor is financially responsible and 
its need for working capital is the result of the impact of a defense 
program or any other DOE program for which guaranteed loans are 
authorized.
    (c) The guarantee authority should, in general, not be used in 
connection with loans to contractors required to furnish performance 
bonds, except in those cases in which the time likely to be required for 
the surety or DOE to take over in the event of default will result in 
delays which cannot be tolerated by the particular program concerned. 
When performance bonds have been furnished, the surety shall be required 
to subordinate its rights in favor of the guaranteed loan.
    (d) The criterion that the materials or services to be provided 
cannot readily be acquired from alternative sources does not require the 
finding that the materials or services are absolutely unobtainable 
elsewhere. The criterion should be so applied as to permit guarantees of 
loans when, although the materials or services can be obtained 
elsewhere, such factors as the urgency of supply schedules, technical 
capacity of the contractor, comparative prices,

[[Page 352]]

and time and expense involved in reissuing the contract, including 
termination payment, establish that it is to the Government's advantage 
not to resort to alternative sources merely because the contractor or 
subcontractor may require a guaranteed loan.
    (e) If it is known at the time the contract is to be awarded that 
the low offeror who is technically qualified and competent to furnish 
the required materials and services will require a guaranteed loan, the 
contracting officer should obtain appropriate advice and in reaching a 
decision should consider at least the following:
    (1) The savings to be realized by awarding the contract to the low 
offeror;
    (2) The risk to the Government in guaranteeing a loan; and
    (3) The likelihood, if award is made to the second low offeror, of 
that offeror's applying for a guaranteed loan at a later date.

Extreme care should be exercised in rejecting a low bid or proposal 
simply because the low offeror requires a guaranteed loan.
    (f) The amount of the loan should bear reasonable relationship to 
such factors as the value and terms of the contract, the probable 
investment required to be made by the contractor in payrolls and 
inventories, the frequency with which contract payments are to be made, 
and the borrower's current working capital position.
    (g) Borrowings for working capital purposes under guaranteed loans 
shall be limited to the amount necessary to perform the contract for 
which the loan is sought. In order that the contractor will also use its 
own funds in the performance of the contracts, amounts outstanding under 
the loan or line-of-credit shall be limited to an amount not to exceed 
90 percent of the borrower's investment in its contracts, regardless of 
the total amount of the loan or line of credit authorized. The 
borrower's investment includes all items for which the borrower would be 
entitled to payment on performance or termination of contracts, but does 
not include any items for which no work has been done nor expenditures 
made.
    (h) Unless there are exceptional circumstances, the loan should 
mature not later than 30 days after the estimated date of final payment 
under the contract.

[49 FR 12011, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



932.7004  Procedures.



932.7004-1  Guaranteed loans for civilian programs.

    The procedures for authorizing a guaranteed loan under legislation 
other than section 301 of the Defense Production Act of 1950 (50 U.S.C. 
App. 2091) shall be essentially the same as those set forth in FAR 
32.304, Procedures, FAR 32.305, Loan Guarantees for Terminated 
Contracts, and FAR 32.306 Loan Guarantee for Subcontacts; except that 
any contrary provisions required by enabling legislation authorizing the 
loan shall govern.



932.7004-2  Criteria.

    (a) The materials or services to be furnished by the contractor are 
necessary to the Government interest.
    (b) The materials or services cannot as a practical matter be 
obtained from alternate sources without delay or impeding the 
Government's interest, except that no small business concern shall be 
held ineligible for the issuance of such guarantee by reason of 
alternative sources of supply.
    (c) The contractor has demonstrated its inability to obtain the 
necessary financing in conventional credit channels without the 
guarantee.
    (d) There is reasonable assurance that the loan can be repaid.
    (e) The contractor is competent to perform the contract.

[49 FR 12011, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



932.7004-3  Eligibility.

    The applicant's eligibility for a guaranteed loan will be based on:
    (a) Contracting officer determinations and findings regarding items 
(a), (b) and (e) in 932.7004-2 as incorporated in a Certificate of 
Eligibility (FAR 32.304-2); and
    (b) The Chief Financial Officer's determination for items (c) and 
(d) in 932.7004-2 based on information contained in the application, the 
Federal Reserve Bank's report, and information

[[Page 353]]

furnished by the contracting activity concerned.

[49 FR 12011, Mar. 28, 1984, as amended at 59 FR 9106, Feb. 25, 1994]



PART 933_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                         Subpart 933.1_Protests

Sec.
933.102 General.
933.103 Protests to the agency.
933.104 Protests to GAO.
933.106 Solicitation provisions.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 51 FR 31336, Sept. 3, 1986, unless otherwise noted.



                         Subpart 933.1_Protests

    Source: 61 FR 41708, Aug. 9, 1996, unless otherwise noted.



933.102  General. (DOE coverage--paragraph (b))

    (b) The Heads of Contracting Activities, for contracts estimated to 
be within the limits of their delegated authority, may, without power of 
redelegation, provide corrective relief in response to a protest in 
accordance with 48 CFR 33.102(b).

[63 FR 53758, Oct. 16, 1997]



933.103  Protests to the agency. (DOE coverage--paragraphs (f), (i), (j), and (k))

    (f) If FAR 33.103(f) requires that award be withheld or performance 
be suspended or the awarded contract be terminated pending resolution of 
an agency protest, authority to award and/or continue performance of the 
protested contract may be requested by the Head of the Contracting 
Activity (HCA), concurred in by counsel, and approved by the Procurement 
Executive.
    (i)(1) Protests filed with the contracting officer before or after 
award shall be decided by the Head of the Contracting Activity except 
for the following cases, which shall be decided by the Procurement 
Executive:
    (i) The protester requests that the protest be decided by the 
Procurement Executive.
    (ii) The HCA is the contracting officer of record at the time the 
protest is filed, having signed either the solicitation where the award 
has not been made, or the contract, where the award or nomination of the 
apparent successful offeror has been made.
    (iii) The HCA concludes that one or more of the issues raised in the 
protest have the potential for significant impact on DOE acquisition 
policy.
    (2) Upon receipt of a protest requesting a decision by the 
Procurement Executive, the contracting activity shall immediately 
provide a copy of the protest to the Office of Contract Management.
    (j) The Department of Energy encourages direct negotiations between 
an offeror and the contracting officer in an attempt to resolve 
protests. In those situations where the parties are not able to achieve 
resolution, the Department favors the use of alternative dispute 
resolution (ADR) techniques to resolve protests. A protest requesting a 
decision at the Headquarters level shall state whether the protester is 
willing to utilize ADR techniques such as mediation or nonbinding 
evaluation of the protest by a neutral. Upon receipt of a protest 
requesting a decision at the Headquarters level, the Office of Contract 
Management will explore with the protester whether the use of ADR 
techniques would be appropriate to resolve the protest. Both parties 
must agree that the use of such techniques is appropriate. If the 
parties do not mutually agree to utilize ADR to resolve the protest, the 
protest will be processed in accordance with the procedures set forth in 
paragraph (k).
    (k) Upon receipt of a protest lodged with the Department, the 
contracting officer shall prepare a report similar to that discussed in 
FAR 33.104(a)(3)(iii). In the case of a protest filed at the 
Headquarters level, the report shall be forwarded to the Office of 
Contract Management within 21 calendar days of being notified of such a 
protest with a proposed response to the protest. The Procurement 
Executive (for protests at the Headquarters level or those specific HCA 
protests cited in paragraph (i)(1) of this section) or an HCA (for 
protests at the contracting activity level) will render a decision on a 
protest within 35

[[Page 354]]

calendar days, unless a longer period of time is determined to be 
needed.

[51 FR 31336, Sept. 3, 1986, as amended at 67 FR 14871, Mar. 28, 2002]



933.104  Protests to GAO. (DOE coverage--paragraphs (a), (b), (c), and (g))

    (a)(2) The contracting officer shall provide the notice of protest.
    (b) Protests before award. (1) When the Department has received 
notice from the GAO of a protest filed directly with the GAO, a contract 
may not be awarded until the matter is resolved, unless authorized by 
the Head of the Contracting Activity in accordance with FAR 33.104(b). 
Before the Head of the Contracting Activity authorizes the award, the 
required finding shall be concurred in by the DOE counsel handling the 
protest, endorsed by the Senior Program Official, and approved by the 
Procurement Executive. The finding shall address the likelihood that the 
protest will be sustained by the GAO.
    (c) Protests after award. Before the Head of the Contracting 
Activity authorizes performance, the finding required by FAR 
33.104(c)(2) shall be concurred in by the DOE counsel handling the 
protest, endorsed by the Senior Program Official, and approved by the 
Procurement Executive.
    (g) Notice to GAO. (1) The report to the GAO regarding a decision 
not to comply with the GAO's recommendation, discussed at FAR 33.104(f), 
shall be provided by the HCA making the award, after approval of the 
Procurement Executive. If a DOE-wide policy issue is involved, the 
report shall be provided by the Procurement Executive.
    (2) It is the policy of the Department to comply promptly with 
recommendations set forth in Comptroller General Decisions except for 
compelling reasons.
    (3) The GAO does not have jurisdiction to consider subcontractor 
protests. 933.106 Solicitation provisions.



933.106  Solicitation provisions.

    (a) The contracting officer shall supplement the provision at FAR 
52.233-2, Service of Protest, in solicitations for other than simplified 
acquisitions by adding the provision at 48 CFR 952.233-2.
    (b) The contracting officer shall include the provision at 48 CFR 
952.233-4 in solicitations for purchases above the simplified 
acquisition threshold.
    (c) The contracting officer shall include the provision at 48 CFR 
952.233-5 in solicitations for purchases above the simplified 
acquisition threshold.

[[Page 355]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 935_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents




Sec.
935.010 Scientific and technical reports.

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

    Source: 49 FR 12016, Mar. 28, 1984, unless otherwise noted.



935.010  Scientific and technical reports.

    (c) All research and development contracts which require submission 
of scientific and technical reports, shall include an instruction 
requiring the contractor to submit all scientific and technical reports, 
and any other notices or reports relating thereto, to the following 
address: U.S. Department of Energy, Office of Scientific and Technical 
Information, P.O. Box 62, Oak Ridge, TN 37831. The phrase ``any other 
notices or reports relating thereto'' does not include notices or 
reports concerning administrative matters such as contract cost or 
financial data and information.
    (d) Contractors shall be required to submit with each report a 
completed DOE Form 1332.15, ``DOE and Major Contractor Recommendations 
for Announcement and Distribution of Documents,'' except when the 
contract is with an educational institution, in which case the 
contractor shall be required to submit with each report a completed DOE 
Form 1332.16, ``University Contractor, Grantee and Cooperative Agreement 
Recommendations for Announcement and Distribution of Documents.''

[56 FR 41965, Aug. 26, 1991]



PART 936_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




      Subpart 936.2_Special Aspects of Contracting for Construction

Sec.
936.202 Specifications.

                Subpart 936.6_Architect-Engineer Services

936.602-70 DOE selection criteria.
936.609-3 Work oversight in architect-engineer contracts.

     Subpart 936.7_Standard and Optional Forms for Contracting for 
 Construction, Architect-Engineer Services, and Dismantling, Demolition 
                       or Removal of Improvements

936.702 Forms for use in contracting for architect-engineer services.

                Subpart 936.71_Inspection and Acceptance

936.7100 Scope of subpart.
936.7101 Construction contracts.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401 et 
seq.

    Source: 49 FR 12016, Mar. 28, 1984, unless otherwise noted.



      Subpart 936.2_Special Aspects of Contracting for Construction



936.202  Specifications.

    (a) To support all invitations for bids, plans and specifications 
will be available on request to all prospective bidders, including 
general contractors, subcontractors, and material and equipment 
suppliers. Where the cost of reproduction is $10 or more, the charge 
shall be a minimum of $10 and subject to a maximum of $500, depending 
upon the size of the project and the number of drawings and the volume 
of specifications involved. Where the cost of reproduction is less than 
$10, the contracting officer has authority to make distribution at cost 
of reproduction, or free of charge, as a particular situation dictates.
    (b) No refund for the return of plans and specifications will be 
made except when the invitation is canceled. Under such circumstances, 
refund of payments will be made upon return of the plans and 
specifications in good condition to the issuing office.
    (c) Plans and specifications will be issued without charge to such 
organizations as The Associated General Contractors of America, American 
Road Builders' Association, Dodge Reports, Blue Reports, Brown's 
Letters, Inc., builders and contractors exchanges in

[[Page 356]]

the locality in which the project is to be constructed, and others that 
maintain public plan display rooms.
    (d) Payments received for plans and specifications shall be handled 
in accordance with the regulations prescribed by the General Accounting 
Office in sections 3020-10 and 3030 of Title 7 of GAO Manual for 
Guidance of Federal Agencies.
    (e) If the contracting officer desires to have the architect-
engineer or construction manager handle the furnishing of plans and 
specifications and payments therefor, the invitations for bids should so 
state, and the architect-engineer or construction management contract 
shall provide the manner in which the receipts are to be handled, 
generally as a credit to the contract.
    (f) No charge will be made to original receivers of plans and 
specifications for revised sheets of drawings and revised pages of 
specifications which are issued by amendments to invitations.
    (g) Plans and specifications may be issued in complete sets only, or 
in complete sets and parts of sets, as the Head of the Contracting 
Activity determines to be best. If less than complete sets of plans and 
specifications are issued, the distribution should be based on an 
applicant's request for specific pages and drawing sheets.
    (h) When a non-refundable fee is to be charged, a provision 
substantially the same as 952.236-72 shall be included in the 
solicitation.

[49 FR 12016, Mar. 28, 1984, as amended at 60 FR 47308, Sept. 12, 1995]



                Subpart 936.6_Architect-Engineer Services



936.602-70  DOE selection criteria.

    Contracting officers or architect-engineer evaluation boards shall 
apply the evaluation criteria contained in this subsection, as 
appropriate, and any special criteria developed for individual 
selections. When special and additional criteria are to be used, they 
shall be set forth in the public announcement required by 936.601, and a 
written justification for their use shall be placed in the DOE file 
maintained for the project.
    (a) General qualifications, including:
    (1) Reputation and standing of the firm and its principal members;
    (2) Experience and technical competence of the firm in comparable 
work;
    (3) Past record in performing work for DOE, other Government 
agencies, and private industry, including projects or contracts 
implemented with no overruns; performance from the standpoint of cost 
including cost overruns (last 5 years); the nature, extent, and 
effectiveness of contractor's cost reduction program; quality of work; 
and ability to meet schedules including schedule overruns (last 5 years) 
(where applicable);
    (4) The volume of past and present workloads;
    (5) Interest of company management in the project and expected 
participation and contribution of top officials;
    (6) Adequacy of central or branch office facilities for the proposed 
work, including facilities for any special services that may be 
required;
    (7) Geographic location of the home office and familiarity with the 
locality in which the project is located:
    (8) In addition to these requirements, consider the Architect-
Engineer firm's experience in energy efficiency, pollution prevention, 
waste reduction, and the use of recovered and environmentally preferable 
materials and other criteria at FAR 36.602-1.
    (b) Personnel and organizations. (1) Specific experience and 
qualifications of personnel proposed for assignment to the project, 
including, as required for various phases of the work:
    (i) Technical skills and abilities in planning, organizing, 
executing, and controlling;
    (ii) Abilities in overall project coordination and management; and
    (iii) Experience in working together as a team;
    (2) Proposed project organization, delegations of responsibility, 
and assignments of authority;
    (3) Availability of additional competent, regular employees for 
support of the project, and the depth and size of the organization so 
that any necessary expansion or acceleration could be handled 
adequately;

[[Page 357]]

    (4) Experience and qualifications of proposed consultants and 
subcontractors; and
    (5) Ability to assign adequate qualified personnel from the proposed 
organization (firms own organization, joint-venture organizations, 
consulting firms etc.) including key personnel and a competent 
supervising representative.
    (c) Additional (or special) criteria developed for the specific 
project shall be considered and evaluated as may be appropriate.

[49 FR 12016, Mar. 28, 1984, as amended at 68 FR 6358, Feb. 7, 2003]



936.609-3  Work oversight in architect-engineer contracts.

    In addition to the clause at FAR 52.236-24, the contracting officer 
shall insert the clause at 952.236-71 in architect-engineer contracts.



     Subpart 936.7_Standard and Optional Forms for Contracting for 
Construction, Architect-Engineer Services, and Dismantling, Demolitation 
                       or Removal of Improvements



936.702  Forms for use in contracting for architect-engineer services.

    (a) The contracting officer shall also include the additional terms 
at 952.236-70 in Standard Form 252 item 6.



                Subpart 936.71_Inspection and Acceptance



936.7100  Scope of subpart.

    This subpart implements and supplements FAR Part 36 by prescribing 
the policies and requirements for inspection and acceptance under 
construction contracts.



936.7101  Construction contracts.

    (a) Inspection services may be performed by the architect-engineer 
responsible for the design. Inspection services may not be procured from 
a construction contractor with respect to its own work.
    (b) When one contractor is to inspect the work of another, the 
inspection contractor will be given written instructions defining its 
responsibilities and stating that it is not authorized to modify the 
terms and conditions of the contract, to direct additional work, to 
waive any requirements of the contract, or to settle any claim or 
dispute. Copies of the instructions will be given to the contractor who 
is to be inspected, with a request to acknowledge receipt on a copy to 
be returned to the contracting officer. In this manner, both contractors 
are on express notice of the authority and limitations of the authority 
of the inspecting contractor.



PART 937_SERVICE CONTRACTING--Table of Contents




             Subpart 937.70_Protective Services Contracting

Sec.
937.7040 Contract clauses.

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



             Subpart 937.70_Protective Services Contracting

    Source: 58 FR 36151, July 6, 1993, unless otherwise noted.



937.7040  Contract clauses.

    The contracting officer shall insert the clause at 952.237-70 
entitled ``Collective bargaining agreements--protective services'' in 
all protective services solicitations and contracts involving DOE-owned 
facilities requiring continuity of services for public safety and 
national defense reasons. See also, 922.103-5, Contract clauses, which 
prescribes use of the clause at FAR 52.222-1, Notice to the Government 
of Labor Disputes.



PART 939_ACQUISITION OF INFORMATION TECHNOLOGY--Table of Contents




         Subpart 939.70_Implementing DOE Policies and Procedures

Sec.
939.7000 Scope.
939.7001 Outdated information technology equipment.
939.7002 Contractor acquisition of information technology.

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

    Source: 62 FR 53758, Oct. 16, 1997, unless otherwise noted.

[[Page 358]]



         Subpart 939.70_Implementing DOE Policies and Procedures



939.7000  Scope.

    This part sets forth the policies and procedures that apply to the 
acquisition of information technology by the Department of Energy (DOE).



939.7001  Outdated information technology equipment.

    Solicitations and contracts for, or using, outdated information 
technology equipment shall be submitted to the Office of Management 
Systems, Office of Procurement and Assistance Management for review and 
approval. The Office of Information Management shall review these 
documents and make the decision whether to allow the acquisition or use 
of outdated information technology equipment.



939.7002  Contractor acquisition of information technology.

    (a) Management and operating (M&O) contracts. Except as provided in 
paragraph (c) of this section, M&O contractors and their subcontractors 
shall not be used to acquire information technology unrelated to the 
mission of the M&O contract either for sole use by DOE employees or 
employees of other DOE contractors, or for use by other Federal agencies 
or their contractors.
    (b) Other than M&O contracts. Where it has been determined that a 
contractor (other than an M&O contractor or its subcontractor) will 
acquire information technology either for sole use by DOE employees or 
for the furnishing of the information technology as government-furnished 
property under another contract, and after receiving written 
authorization from their cognizant DOE contracting office pursuant to 48 
CFR part 51, DOE contractors working under cost-reimbursement-type 
contracts may place orders against authorized contracts. All 
authorizations to contractors shall expressly and specifically reference 
the restriction regarding contractor use of the items acquired, cited at 
48 CFR 951.102(e)(4)(iii).
    (c) Consolidated contractor acquisitions. When common information 
technology requirements in support of DOE programs have been identified 
and it is anticipated that the consolidation of such requirements will 
promote cost or other efficiencies, the Designated Senior Official for 
Information Management may authorize an M&O contractor to acquire 
information technology for use by the following:
    (1) One or more other contractor(s) performing on-site at the same 
DOE-owned or -leased facility as the M&O contractor, or
    (2) Other M&O contractors.



PART 941_ACQUISITION OF UTILITY SERVICES--Table of Contents




                Subpart 941.2_Acquiring Utility Services

Sec.
941.201-70 DOE Directives.
941.201-71 Use of subcontracts.

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

    Source: 61 FR 41710, Aug. 9, 1996, unless otherwise noted.



                Subpart 941.2_Acquiring Utility Services



941.201-70  DOE Directives.

    Utility services (defined at FAR 41.101) shall be acquired in 
accordance with FAR part 41 and DOE Directives in subseries 4540 (Public 
Services).



941.201-71  Use of subcontracts.

    Utility services for the furnishing of electricity, gas (natural or 
manufactured), steam, water and/or sewerage at facilities owned or 
leased by DOE shall not be acquired under a subcontract arrangement, 
except as provided for at 48 CFR 970.4102-1 or if the prime contract is 
with a utility company.

[61 FR 41710, Aug. 9, 1996, as amended at 65 FR 81007, Dec. 22, 2000]

[[Page 359]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 942_CONTRACT ADMINISTRATION--Table of Contents




             Subpart 942.2_Contract Administration Services

Sec.
942.270-1 Contracting Officer's Representatives
942.270-2 Contract Clause

                    Subpart 942.7_Indirect Cost Rates

942.704 Billing rates.
942.705-1 Contracting officer determination procedure.
942.705-3 Educational institutions.
942.705-4 State and local governments.
942.705-5 Nonprofit organizations other than educational and state and 
          local governments.

                   Subpart 942.8_Disallowance of Costs

942.803 Disallowing costs after incurrence.

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

    Source: 49 FR 12026, Mar. 28, 1984, unless otherwise noted.



             Subpart 942.2_Contract Administration Services

    Source: 65 FR 81007, Dec. 22, 2000, unless otherwise noted.



942.270-1  Contracting Officer's Representatives.

    In accordance with internal agency procedures, a contracting officer 
may designate other qualified personnel to be the Contracting Officer's 
Representative (COR) for the purpose of performing certain technical 
functions in administering a contract. These functions include, but are 
not limited to, technical monitoring, inspection, approval of shop 
drawings, testing, and approval of samples. The COR acts solely as a 
technical representative of the contracting officer and is not 
authorized to perform any function that results in a change in the 
scope, price, terms or conditions of the contract. COR designations must 
be made in writing by the contracting officer, and shall identify the 
responsibilities and limitations of the designation. A copy of the COR 
designation must be furnished to the contractor and the contract 
administration office.



942.270-2  Contract Clause.

    The clause at 952.242-70, or a clause substantially the same, may be 
inserted in solicitations and contracts when a designated Contracting 
Officer's Representative will issue technical direction to the 
contractor under the contract.



                    Subpart 942.7_Indirect Cost Rates



942.704  Billing rates.

    (b) When the contracting officer or auditor responsible for 
establishing billing rates, in accordance with FAR 42.704, has not 
established such rates or such rates are not current for the performance 
periods (contractor FY) under contract, the DOE contracting officer 
responsible for administration of the contract shall establish an 
appropriate rate(s) for billing purposes. If the contractor holds more 
than one DOE contract covering that period of performance, the DOE 
office with the largest unliquidated obligations as of the beginning of 
that performance period shall take the lead in establishing the required 
billing rate for use on DOE contracts. Once appropriate billing rates 
are established by the responsible contracting officer designated by FAR 
42.704, such rates shall be adopted by the contracting officer and all 
billings and payments shall be retroactively revised to reflect the 
agreed upon rate(s).



942.705-1  Contracting officer determination procedure. (DOE 
coverage--paragraphs (a) and (b))

    (a)(3) The Department of Energy shall use the contracting officer 
determination procedure for all business units for which it shall be 
required to negotiate final indirect cost rates. A list of such business 
units is maintained by the Office of Policy, within the Headquarters 
procurement organization.

[[Page 360]]

    (b)(1) Pursuant to FAR 52.216-7, Allowable Cost and Payment, 
contractors shall be requested to submit their final indirect cost rate 
proposals reflecting actual cost experience during the covered period to 
the cognizant contracting officer responsible for negotiating their 
final rates.
    The DOE negotiating official shall request all needed audit service 
in accordance with internal procedures.

[61 FR 41710, Aug. 9, 1996]



942.705-3  Educational institutions. (DOE coverage--paragraph (a))

    (a)(2) The negotiated rates established for the institutions cited 
in OMB Circular No. A-88 are distributed to the Cognizant DOE Office 
(CDO) assigned lead office responsibility for all DOE indirect cost 
matters relating to a particular contractor by the Office of Policy, 
within the Headquarters procurement organization.

[61 FR 41710, Aug. 9, 1996]



942.705-4  State and local governments.

    A list of cognizant agencies for State/local government 
organizations is periodically published in the Federal Register by the 
Office of Management and Budget (OMB). The responsible agencies are 
notified of such assignments. The current negotiated rates for State/
local government activities is distributed to each CDO by the Office of 
Policy, within the Headquarters procurement organization.

[61 FR 41710, Aug. 9, 1996]



942.705-5  Nonprofit organizations other than educational and state and 
local governments.

    OMB Circular A-122 establishes the rules for assigning cognizant 
agencies for the negotiation and approval of indirect cost rates. The 
Federal agency with the largest dollar value of awards (contracts plus 
federal financial assistance dollars) will be designated as the 
cognizant agency. There is no published list of assigned agencies. The 
Office of Policy, within the Headquarters procurement organization, 
distributes to each CDO the rates established by the cognizant agency.

[61 FR 41710, Aug. 9, 1996]



                   Subpart 942.8_Disallowance of Costs



942.803  Disallowing costs after incurrence.

    (a) Contracting officer receipt of vouchers. Vouchers and invoices 
submitted to DOE shall be submitted to the contracting officer or 
designee for review and approval for payment. If the examination of a 
voucher or invoice raises a question regarding the allowability of a 
cost submitted therein, the contracting officer, shall:
    (1) Hold informal discussion with the contractor as appropriate.
    (2) Issue a notice (letter, memo, etc.) to the contractor advising 
of cost disallowed or to be disallowed and advising the contractor that 
it may:
    (i) Submit a written claim as to why the cost should be reimbursed--
if in disagreement with the disallowance.
    (ii) File a claim under the disputes clause, which will be processed 
in accordance with disputes procedures in the event disagreements cannot 
be settled.
    (3) Process the voucher or invoice for payment and advise the 
finance office to deduct the disallowed cost when scheduling the voucher 
for payment.
    (c) Auditor reports and other sources of questioned costs. (1) From 
time to time reports are received from professional auditors that may 
question the allowability of an incurred cost. Such reports are received 
as the result of auditors, in their independent role under OMB Circular 
A-73 or their own charters, scheduling and conducting financial or 
compliance audits of government contracts or as the result of an 
independent request for auditor service, as discussed in 942.70 Audit 
Services.
    (2) When auditor reports or other notifications question cost or 
consider them unallowable, the contracting officer shall follow up such 
reports and resolve all such cost issues promptly by determining, 
through discussions with the contractor and/or auditor within six months 
of the audit report date, or date of receipt if a non-Federal audit. One 
of the following courses of action shall be pursued:
    (i) Accept and implement audit recommendations as submitted.

[[Page 361]]

    (ii) Accept the principle of the audit recommendation but reject the 
cost questioned amount.
    (iii) Reject audit findings and recommendations.
    (3) When implementing the accepted course of action, the contracting 
officer shall--
    (i) Hold discussions with the auditor and contractor as appropriate.
    (ii) Issue a notice in writing advising the contractor of the 
government's intent to disallow the cost questioned, if the contracting 
officer agrees with the auditor concerning the questioned costs.
    (iii) Negotiate a mutual settlement of questioned costs if they are 
agreed with in principle but there is a difference of opinion as to a 
proper amount.
    (iv) Negotiate a mutual settlement of questioned costs if the 
auditor recommendations are acceptable to the contracting officer but 
the contractor does not accept the finding or disallowance.
    (v) Issue a final decision of the contracting officer disallowing 
the questionable cost where differences cannot be resolved, advising of 
the contractor's right to appeal the decision, and advising the 
procedure to be followed if it is decided to make such an appeal.
    (vi) Initiate immediate recoupment actions for all disallowed cost 
owed the government by:
    (A) Requesting the contractor to provide a credit adjustment 
(offset) against amounts billed the government on the next or future 
invoice(s) if such shall be submitted under a contract for which the 
disallowed cost applies.
    (B) Deducting (offset) the disallowed cost from the next or future 
invoice(s) submitted under the contract; if the contractor provides no 
adjustment under the contract for which the disallowed cost applies; 
provided such reduction is deemed appropriate.
    (C) Advising the contractor that a refund shall be directly payable 
to the government in situations where there are insufficient payments 
owed by the government to effect recovery via (A) or (B) above or an 
offset is otherwise inappropriate.
    (vii) Promptly notify the appropriate finance office of refunds 
directly payable to the government to ensure proper billing and follow-
up action for collection.

[49 FR 12026, Mar. 28, 1984, as amended at 59 FR 9107, Feb. 25, 1994]



PART 945_GOVERNMENT PROPERTY--Table of Contents




Sec.
945.000 Scope of part.

                          Subpart 945.1_General

945.101 Definitions.
945.102-70 Reporting of contractor-held property.
945.102-71 Maintenance of records.

       Subpart 945.3_Providing Government Property to Contractors

945.303-1 Policy.

     Subpart 945.4_Contractor Use and Rental of Government Property

945.407 Non-Government use of plant equipment.

  Subpart 945.5_Management of Government Property in the Possession of 
                               Contractors

945.505-11 Records of transportation and installation costs of plant 
          equipment.
945.506 Identification.
945.570-2 Acquisition of motor vehicles.
945.570-7 Disposition of motor vehicles.
945.570-8 Reporting motor vehicle data.

  Subpart 945.6_Reporting, Redistribution, and Disposal of Contractor 
                                Inventory

945.601 Definitions.
945.603 Disposal methods.
945.603-70 Plant clearance function.
945.603-71 Disposal of radioactively contaminated personal property.
945.607-2 Recovering precious metals.
945.608-2 Standard screening.
945.608-3 Agency screening.
945.608-4 Limited screening.
945.608-5 Special items screening.
945.608-6 Waiver of screening requirements.
945.610-4 Contractor inventory in foreign countries.

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

    Source: 49 FR 12032, Mar. 28, 1984, unless otherwise noted.

[[Page 362]]



945.000  Scope of part.

    This part and FAR Part 45 are not applicable to the management of 
property by operating and management contractors. In addition, the 
policies and procedures contained in FAR Part 45 governing the 
management, control, reporting, and disposal of special test equipment 
and special tooling are not followed by the DOE.



                          Subpart 945.1_General



945.101  Definitions.

    Personal property, as used in this part, means property of any kind 
or interest therein, except real property; records of the Federal 
Government; and nuclear and special source materials, atomic weapons, 
and by-product materials.
    Capital equipment, as used in this part, means personal property 
items having a unit acquisition cost of $5,000 or more and an 
anticipated service life in excess of two years, regardless of type of 
funding, and having the potential for maintaining their integrity as 
capital items; i.e., not expendable due to use.

[54 FR 27647, June 30, 1989]



945.102-70  Reporting of contractor-held property.

    Within 30 days after the end of each fiscal year, the Head of the 
Contracting Activity shall report the following information to the 
Director, Office of Property Management, within the Headquarters 
procurement organization.
    (a) Name and address of each contractor with DOE property in their 
possession, or in the possession of their subcontractors (do not include 
grantees, cooperative agreements, interagency agreements, or agreements 
with state or local governments).
    (b) Contract number of each DOE contract with Government property.
    (c) Date contractor's property management system was approved and by 
whom (DOE office, Defense Contract Management Command, or the Office of 
Naval Research).
    (d) Date of most current appraisal of contractor's property 
management system, who conducted the appraisal, and status of the system 
(satisfactory or unsatisfactory).
    (e) Total dollar value of DOE property as reported on last 
semiannual asset report (including date of report), for each DOE 
contract administered by the contracting activity.

[49 FR 12032, Mar. 28, 1984, as amended at 59 FR 9107, Feb. 25, 1994]



945.102-71  Maintenance of records.

    The contracting activity shall maintain records of approvals and 
reviews of contractors' property management systems, the dollar value of 
DOE property as reported on the most recent semiannual financial report, 
and records on property administration delegations to other Government 
agencies.



       Subpart 945.3_Providing Government Property to Contractors



945.303-1  Policy.

    The DOE has established specific policies concerning special nuclear 
material requirements needed under DOE contracts for fabricating end 
items using special nuclear material, and for conversion or scrap 
recovery of special nuclear material. Special nuclear material means 
uranium enriched in the isotopes U233, and U235, and/or plutonium other 
than PU238. The policies to be followed are:
    (a) Special nuclear material will be furnished by the DOE for fixed-
price contracts and subcontracts, at any tier, which call for the 
production of special nuclear products, including fabrication and 
conversion, for Government use. (The contractor or subcontractor must 
have the appropriate license or licenses to receive the special nuclear 
material. The Nuclear Regulatory Commission is the licensing agency.)
    (b) Contracts and subcontracts for fabrication of end items using 
special nuclear material generally shall be of the fixed-price type. 
Cost-type contracts or subcontracts for fabrication shall be used only 
with the approval of the Head of the Contracting Activity. This approval 
authority shall not be further delegated.
    (c) Contracts and subcontracts for conversion or scrap recovery of 
special

[[Page 363]]

nuclear material shall be of a fixed-price type, except as otherwise 
approved by the Head of the Contracting Activity.

[49 FR 12032, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994]



     Subpart 945.4_Contractor Use and Rental of Government Property



945.407  Non-Government use of plant equipment.

    The type of plant equipment and dollar threshold for non-Government 
use of DOE plant equipment will be determined by the Head of the 
Contracting Activity which awarded the contract. Approval of the Head of 
the Contracting Activity is required to authorize non-Government use 
exceeding 25% of operational use.



  Subpart 945.5_Management of Government Property in the Possession of 
                               Contractors



945.505-11  Records of transportation and installation costs of plant 
equipment.

    The requirements of FAR 45.505-11 apply to plant equipment having a 
unit cost of $1,000 or more.



945.506  Identification.

    The requirements of FAR 45.506 apply to Government property having a 
unit cost of $1,000 or more.



945.570-2  Acquisition of motor vehicles.

    (a) The GSA Interagency Fleet Management System (GSA-IFMS) is the 
first source of supply for providing motor vehicles to contractors; 
however, contracting officer approval is required for contractors to 
utilize this service.
    (b) Prior approval of GSA must be obtained before--
    (1) Fixed-price contractors can use the GSA-IFMS;
    (2) DOE-owned motor vehicles can be furnished to any contractor in 
an area served by a GSA-IFMS; and
    (3) A contractor can commercially lease a motor vehicle for more 
than 60 days.
    (c) GSA has the responsibility for acquisition of motor vehicles for 
Government agencies. All requisitions (GSA Form 1781) shall be processed 
in accordance with 41 CFR 101-26.501.
    (d) Contractors shall submit all motor vehicle requirements to the 
contracting officer for approval.
    (e) The acquisition of sedans and station wagons is limited to 
small, subcompact, and compact vehicles which meet Government fuel 
economy standards. The acquisition of light trucks is limited to those 
vehicles which meet the current fuel economy standards set by Executive 
Orders 12003 and 12375.
    (f) Cost reimbursement contractors may be authorized by the 
contracting officer to utilize GSA Federal Supply Schedule 751, Motor 
Vehicle Rental, for short term rentals not to exceed 60 days, and are 
required to utilize available GSA consolidated leasing programs for long 
term (60 continuous days or longer) commercial leasing of passenger 
vehicles and light trucks.
    (g) The Office of Property Management, within the Headquarters 
procurement organization, shall certify all requisitions prior to 
submittal to GSA for the following:
    (1) The acquisition of sedans and station wagons.
    (2) The lease (60 continuous days or longer) of any passenger 
automobile.
    (3) The acquisition or lease (60 continuous days or longer) of light 
trucks less than 8,500 GVWR.
    (h) Purchase requisitions for other motor vehicles may be submitted 
directly to GSA when approved by the contracting officer.
    (i) Contractors shall thoroughly examine motor vehicles acquired 
under a GSA contract for defects. Any defect shall be reported promptly 
to GSA, and repairs shall be made under terms of the warranty.

[49 FR 12032, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994]



945.570-7  Disposition of motor vehicles.

    (a) The contractor shall dispose of DOE-owned motor vehicles as 
directed by the contracting officer.
    (b) DOE-owned motor vehicles may be disposed of as exchange/sale 
items

[[Page 364]]

when directed by the contracting officer; however, a designated DOE 
official must execute the Title Transfer forms.



945.570-8  Reporting motor vehicle data.

    (a) Contractors conducting motor vehicle operations shall forward 
annually (on or before December 1) to the contracting officer their plan 
for acquisition of motor vehicles for the next fiscal year for review, 
approval and submittal to DOE Headquarters. This plan shall conform to 
the fuel efficiency standards for motor vehicles for the applicable 
fiscal year, as established by Executive Orders 12003 and 12375 and as 
implemented by GSA and current DOE directives. Additional guidance for 
the preparation of the plan will be issued by the contracting officer, 
as required.
    (b) Contractors operating DOE-owned and/or commercially leased (for 
60 continuous days or longer) motor vehicles shall prepare and submit 
the following annual year-end reports to the contracting officer:
    (1) DOE Report of Motor Vehicle Data (passenger vehicles).
    (2) DOE Report of Truck Data.

[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984]



  Subpart 945.6_Reporting, Redistribution, and Disposal of Contractor 
                                Inventory



945.601  Definitions.

    Personal property (See 945.101).



945.603  Disposal methods.



945.603-70  Plant clearance function.

    If the plant clearance function has not been formally delegated to 
another Federal agency, the contracting officer shall assume all 
responsibilities of the plant clearance officer identified in FAR 
Subpart 45.6.



945.603-71  Disposal of radioactively contaminated personal property.

    Special procedures regarding the disposal of radioactively 
contaminated property may be found at 41 CFR 109-45.50.



945.607-2  Recovering precious metals.

    (b) Contractors generating contractor inventory containing precious 
metals shall identify and promptly report such items to the contracting 
officer for review, approval and reporting to the DOE precious metals 
pool. This includes all precious metals in any form, including shapes, 
scrap or radioactively contaminated, except for silver. Only high grade 
nonradioactively contaminated silver should be reported to the precious 
metals pool. The Oak Ridge Operations Office is responsible for 
maintaining the DOE pool. Precious metals scrap will be reported to the 
DOE precious metals pool, operated by Martin Marietta Energy Systems, 
M.S. 8207, P.O. Box 2009, Oak Ridge, TN 37831.

[54 FR 27648, June 30, 1989, as amended at 59 FR 9108, Feb. 25, 1994]



945.608-2  Standard screening.

    (b)(1) Prior to reporting excess property to GSA, all reportable 
property, as identified in Federal Property Management Regulations 41 
CFR 101-43.4801, shall be reported to the contracting office. The 
contracting office shall transmit this information via terminal 
processing or hard copy to DOE Headquarters for centralized screening in 
the DOE Reportable Excess Automated Property System (REAPS). Agency 
screening will begin when the item is first included in the REAPS 
monthly catalog and will end upon the issuance of the following monthly 
catalog.
    (i) REAPS requires the inclusion of a five character address code 
which identifies the reporting contractor. The address code will be 
assigned by DOE Headquarters upon receipt of a completed Address 
Notification form for the contractor or DOE office reporting the 
property as excess.
    (ii) Excess screening documents and Address Notification forms shall 
be submitted to the Office of Contractor Management and Administration, 
within the Headquarters procurement organization.

[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 59 
FR 9108, Feb. 25, 1994; 62 FR 2312, Jan. 16, 1997]

[[Page 365]]



945.608-3  Agency screening.

    Items shall be reported to the contracting office and should be 
screened informally within the contracting office's complex of 
contractors and with other known users of the property at other DOE 
locations.



945.608-4  Limited screening.

    (a) Prior to reporting to GSA, all nonreportable property, excluding 
scrap and salvage, shall be reported to the contracting office for a 15 
day informal screening within the contracting office's complex of 
contractors and other appropriate DOE field locations.



945.608-5  Special items screening.

    Prior to reporting to GSA, that property in FAR 45.608-5 (a), (b), 
and (d) shall be reported and screened within DOE in accordance with 
945.608-2 and 945.608-3.
    (c) Printing equipment. All printing equipment excess to 
requirements shall be reported to the Office of Administrative Services, 
Headquarters.



945.608-6  Waiver of screening requirements.

    (a) The Director Office of Property Management, within the 
Headquarters procurement organization, is the designee who may authorize 
exceptions from screening requirements in accordance with the provisions 
of FAR 45.608-6.
    (b) A request to the Director of the Office of Property Management, 
within the Headquarters procurement organization for the waiver of 
screening requirements must be submitted by the HCA with a justification 
setting forth the compelling circumstances warranting the exception.

[54 FR 27648, June 30, 1989, as amended at 59 FR 9108, Feb. 25, 1994]



945.610-4  Contractor inventory in foreign countries.

    Contractor inventory located in foreign countries will be utilized 
and disposed of in accordance with DOE-PMR 41 CFR 109-43.5, and 45.51.

[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984]



PART 947_TRANSPORTATION--Table of Contents




         Subpart 947.5_Ocean Transportation by U.S. Flag Vessels

947.506 Procedures.

                      Subpart 947.70_Foreign Travel

Sec.
947.7000 [Reserved]
947.7001 Policy.
947.7002 Contract clause.

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

    Source: 49 FR 12038, Mar. 28, 1984, unless otherwise noted.



         Subpart 947.5_Ocean Transportation by U.S. Flag Vessels



947.506  Procedures.

    For contract awards involving foreign suppliers which will 
necessitate ocean transportation, a copy of the award document is to be 
furnished to the Maritime Administration at the following address: 
Inter-Agency Liaison, Division of National Cargo, Office of Market 
Development, Maritime Administration, 400 7th Street, SW., Washington, 
DC 20590



                      Subpart 947.70_Foreign Travel

    Source: 65 FR 81007, Dec. 22, 2000, unless otherwise noted.



947.7000  [Reserved]



947.7001  Policy.

    Contractor foreign travel shall be conducted pursuant to the 
requirements contained in DOE Order 551.1, Official Foreign Travel, or 
any subsequent version of the order in effect at the time of award.



947.7002  Contract clause.

    When foreign travel may be required under the contract, the 
contracting officer shall insert the clause at 48 CFR 952.247-70, 
Foreign Travel.

[[Page 366]]



PART 949_TERMINATION OF CONTRACTS--Table of Contents




                    Subpart 949.1_General Principles

Sec.
949.101 Authorities and responsibilities.
949.106 Fraud or other criminal conduct.
949.111 Review of proposed settlements.

               Subpart 949.5_Contract Termination Clauses

949.501 General.
949.505 Other termination clauses.

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

    Source: 49 FR 12038, Mar. 28, 1984, unless otherwise noted.



                    Subpart 949.1_General Principles



949.101  Authorities and responsibilities.

    The Procurement Executive shall be notified prior to taking any 
action to terminate (a) contracts for the operation of Government-owned 
facilities, (b) any prime contract or subcontract in excess of $10 
million, and (c) any contract the termination of which is likely to 
provoke unusual interest.



949.106  Fraud or other criminal conduct.

    Any evidence of fraud or other criminal conduct in connection with 
the settlement of a contract termination shall be reported in accordance 
with 909.406.



949.111  Review of proposed settlements.

    (a) The Heads of Contracting Activities shall establish settlement 
review boards for the review of each termination settlement or 
determination of amount due under the termination clause of a contract 
or approval or ratification of a subcontract settlement when the action 
involves $50,000 or more.
    (b) Settlement review boards may be established for actions below 
$50,000 when considered desirable by the Head of the Contracting 
Activity or when specifically requested by the contracting officer.
    (c) Proposed settlement agreements or determinations in excess of 
contractual authority of the Heads of Contracting Activities will be 
transmitted to the Procurement Executive for review and approval.
    (d) Contracting officers shall not conclude proposed settlement or 
determinations until the approvals required by this subsection have been 
obtained.

[49 FR 12038, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994]



               Subpart 949.5_Contract Termination Clauses



949.501  General.

    The standard clauses set forth in FAR Subpart 49.5 are applicable as 
prescribed subject to the cost principles referenced in the various 
termination articles shall be in accordance with part 931.

[49 FR 12038, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994]



949.505  Other termination clauses.

    (f) The clause at 952.249-70 is suggested for use in cost-plus-
fixed-fee Architect-Engineer contracts.



PART 950_EXTRAORDINARY CONTRACTUAL ACTIONS--Table of Contents




        Subpart 950.70_Nuclear Indemnification of DOE Contractors

Sec.
950.7000 Scope of subpart.
950.7001 General policy.
950.7002 Definitions.
950.7003 Nuclear hazards indemnity.
950.7004-950.7005 [Reserved]
950.7006 Statutory nuclear hazards indemnity agreement.
950.7007-950.7008 [Reserved]
950.7009 Fees.
950.7010 Financial protection requirements.

           Subpart 950.71_General Contract Authority Indemnity

950.7101 Applicability.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 12039, Mar. 28, 1984, unless otherwise noted.

[[Page 367]]



        Subpart 950.70_Nuclear Indemnification of DOE Contractors



950.7000  Scope of subpart.

    The General Services Administration (GSA) and, in some cases, the 
Department of Defense (DOD) Military Traffic Management Command 
negotiate agreements with commercial organizations to provide certain 
discounts to contractors traveling under Government cost-reimbursable 
contracts. In the case of discount air fares and hotel/motel room rates, 
the GSA has established agreements with certain airlines and thousands 
of hotels/motels to extend discounts which were previously only 
available to Federal employees on official travel status. DOD has 
negotiated agreements with car rental companies for special rates with 
unlimited mileage which were also to be used by only Federal employees 
on official Government business. GSA Federal Property Management 
Regulations (FPMRs) make these three travel discounts available to 
Government cost-reimbursable contractors at the option of the vendor.

[60 FR 30005, June 7, 1995]



951.7001  General policy.

    Contracting officers will encourage DOE cost-reimbursable 
contractors (CRCs) to use Government travel discounts to the maximum 
extent practicable in accordance with contractual terms and conditions. 
Vendors providing the service may require that Government contractor 
employees furnish a letter of identification signed by the authorizing 
contracting officer. Contracting officers shall provide CRCs with a 
``Standard Letter of Identification'' when appropriate to do so. An 
example of a ``Standard Letter of Identification'' is at 952.251-70(e).

[60 FR 30005, June 7, 1995]



950.7002  Definitions.

    DOE contractor means any DOE prime contractor, including any agency 
of the Federal Government with which DOE has entered into an interagency 
agreement.
    Nuclear incident means any occurrence, including an extraordinary 
nuclear occurrence, within the United States causing, within or outside 
the United States, bodily injury, sickness, disease, or death, or loss 
of or damage to property, or loss of use of property, arising out of or 
resulting from the radioactive, toxic, explosive, or other hazardous 
properties of source, special nuclear, or byproduct material. The term 
includes any such occurrence outside the United States if such 
occurrence involves source, special nuclear, or byproduct material owned 
by, and used by or under contract with, the United States.
    Person indemnified means:
    (1) With respect to a nuclear incident occurring within the United 
States or outside the United States as the term is defined above and 
with respect to any nuclear incident in connection with the design, 
development, construction, operation, repair, maintenance, or use of the 
nuclear ship Savannah, the person with whom an indemnity agreement is 
executed or who is required to maintain financial protection, and any 
other person who may be liable for public liability; or
    (2) With respect to any other nuclear incident occurring outside the 
United States, the person with whom an indemnity agreement is executed 
and any other person who may be liable for public liability by reason of 
his activities under any contract with the Secretary of Energy or any 
project to which indemnification under the provisions of section 170d. 
of the Atomic Energy Act of 1954, as amended, has been extended or under 
any subcontract, purchase order, or other agreement, or any tier under 
any such contract or project.
    Public liability means any legal liability arising out of or 
resulting from a nuclear incident or precautionary evacuation (including 
all reasonable additional costs incurred by a State, or a political 
subdivision of a State, in the course of responding to a nuclear 
incident or precautionary evacuation), except: (1) Claims under State or 
Federal workmen's compensation acts of employees of persons indemnified 
who are employed at the site of and in connection with the activity 
where the nuclear incident occurs; (2) claims arising out of an act of 
war; and (3) whenever

[[Page 368]]

used in subsections a., c., and k. of section 170 of the Atomic Energy 
Act of 1954, as amended, claims for loss of, or damage to, or loss of 
use of property which is located at the site of and used in connection 
with the licensed activity where the nuclear incident occurs. Public 
liability also includes damage to property of persons indemnified: 
Provided, that such property is covered under the terms of the financial 
protection required, except property which is located at the site of and 
used in connection with the activity where the nuclear incident occurs.

[49 FR 12039, Mar. 28, 1984, as amended at 50 FR 12185, Mar. 27, 1985; 
56 FR 57827, Nov. 14, 1991]



950.7003  Nuclear hazards indemnity.

    (a) Section 170d. of the Atomic Energy Act, as amended, requires DOE 
``to enter into agreements of indemnification with any person who may 
conduct activities under a contract with (DOE) that involve the risk of 
public liability * * *.'' However, DOE contractors whose activities are 
already subject to indemnification by the Nuclear Regulatory Commission 
are not eligible for such statutory indemnity. See 950.7006 below.
    (b) The Heads of Contracting Activities shall assure that contracts 
subject to this requirement contain the appropriate nuclear hazards 
indemnity provisions.

[56 FR 57828, Nov. 14, 1991, as amended at 59 FR 9108, Feb. 25, 1994]



950.7004-950.7005  [Reserved]



950.7006  Statutory nuclear hazards indemnity agreement.

    (a) The contract clause contained in 952.250-70 shall be 
incorporated in all contracts in which the contractor is under risk of 
public liability for a nuclear incident or precautionary evacuation 
arising out of or in connection with the contract work, including such 
events caused by a product delivered to a DOE-owned facility for use by 
DOE or its contractors. The clause at 952.250-70 shall be included in 
contracts with architect-engineer contractors for the design of a DOE 
facility, the construction or operation of which may involve the risk of 
public liability for a nuclear incident or a precautionary evacuation.
    (b) However, this clause shall not be included in contracts in which 
the contractor is subject to Nuclear Regulatory Commission (NRC) 
financial protection requirements under section 170b. of the Act or NRC 
agreements of indemnification under section 170c. or k. of the Act for 
activities to be performed under the contract.

[56 FR 57828, Nov. 14, 1991, as amended at 59 FR 9108, Feb. 25, 1994]



950.7007-950.7008  [Reserved]



950.7009  Fees.

    No fee will be charged a DOE contractor for a statutory nuclear 
hazards indemnity agreement.

[49 FR 12039, Mar. 28, 1984, as amended at 56 FR 57828, Nov. 14, 1991]



950.7010  Financial protection requirements.

    DOE contractors with whom statutory nuclear hazards indemnity 
agreements under the authority of section 170d. of the Atomic Energy Act 
of 1954, as amended, are executed will not normally be required or 
permitted to furnish financial protection by purchase of insurance to 
cover public liability for nuclear incidents. However, if authorized by 
the DOE Headquarters office having responsibility for contractor 
casualty insurance programs, DOE contractors may be (a) permitted to 
furnish financial protection to themselves or (b) permitted to continue 
to carry such insurance at cost to the Government if they currently 
maintain insurance for such liability.

[56 FR 57828, Nov. 14, 1991]



           Subpart 950.71_General Contract Authority Indemnity



950.7101  Applicability.

    (a) The DOE also has general contract authority to enter into 
indemnity agreements with its contractors. Under such authority a 
certain measure of protection is extended to the DOE contractor against 
risk of liability, but the assumption of liability by DOE will be 
expressly subject to the availability of appropriated funds.

[[Page 369]]

Prior to enactment of section 170 of the Atomic Energy Act 1954, as 
amended, this authority was exercised in a number of Atomic Energy 
Commission contracts and this type of indemnification remains in some 
DOE contracts.
    (b) It is the policy of the DOE, subsequent to the enactment of 
section 170, to restrict indemnity agreements with DOE contractors, with 
respect to protection against public liability for a nuclear incident, 
to the statutory indemnity provided under section 170. However, it is 
recognized that circumstances may exist under which a DOE contractor may 
be exposed to a risk of public liability for a nuclear occurrence which 
would not be covered by the statutory indemnity.
    (c) While it is normally DOE policy to require its non-management 
and operating contractors to obtain insurance coverage against public 
liability for nonnuclear risks, there may be circumstances in which a 
contractual indemnity may be warranted to protect a DOE non-management 
and operating contractor against liability for uninsured nonnuclear 
risks.
    (d) If circumstances as mentioned in paragraph (b) or (c) of this 
section do arise, it shall be the responsibility of the Heads of 
Contracting Activities to submit to the Head of the Agency or designee 
for review and decision, all pertinent information concerning the need 
for, or desirability of, providing a general authority indemnity to a 
DOE contractor.
    (e) Where the indemnified risk is nonnuclear, the amount of general 
authority indemnity extended to a fixed-price contractor should normally 
have a maximum obligation equivalent to the amount of insurance that the 
contractor usually carries to cover such risks in its other commercial 
operations or, if the risk involved is dissimilar to those normally 
encountered by the contractor, the amount that it otherwise would have 
reasonably procured to insure this contract risk.
    (f) In the event that a DOE contractor has been extended both a 
statutory indemnity and a general authority indemnity, the general 
authority indemnity will not apply to the extent that the statutory 
indemnity applies.
    (g) The provisions of this subsection do not restrict or affect the 
policy of DOE to pay its cost-reimbursement type contractors for the 
allowable cost of losses and expenses incurred in the performance of the 
contact work, within the maximum amount of the contract obligation.

[49 FR 12039, Mar. 28, 1984, as amended at 56 FR 28102, June 19, 1991. 
Redesignated and amended at 56 FR 57828, Nov. 14, 1991; 59 FR 9108, Feb. 
25, 1994; 61 FR 21977, May 13, 1996; 62 FR 34861, June 27, 1997]



PART 951_USE OF GOVERNMENT SOURCES BY CONTRACTORS--Table of Contents




        Subpart 951.1_Contractor Use of Government Supply Sources

Sec.
951.101 Policy.
951.102 Authorization to use Government supply sources.
951.103 Ordering from Government supply sources.

           Subpart 951.70_Contractor Employee Travel Discounts

951.7002 Responsibilities.

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

    Source: 49 FR 12042, Mar. 28, 1984, unless otherwise noted.



        Subpart 951.1_Contractor Use of Government Supply Sources



951.101  Policy.

    (a) It is DOE policy that contractors performing under cost-
reimbursement contracts should meet their requirements from Government 
sources of supply when these sources are available to them, and if it is 
economically advantageous or otherwise in the best interest of the 
Government.



951.102  Authorization to use Government supply sources.

    (a) The Head of the Contracting Activity may authorize contractors 
performing under cost-reimbursement contracts and subcontractors 
performing under cost-reimbursement subcontracts, where all higher tier 
contracts and subcontracts are cost-type, to use Government supply 
sources in accordance with the requirements and procedures in FAR Part 
51, DOE PMR

[[Page 370]]

41 CFR 109-26, and any necessary approval from the agency involved. This 
authority may be redelegated to the level of contracting officer. Direct 
acquisition by the DOE, rather than by a contractor under cost-
reimbursement contracts, shall be required where deemed necessary by the 
Head of the Contracting Activity in order to carry out special 
requirements of appropriation acts or other applicable laws relating to 
particular items.
    (c)(1) The DOE central point of contact for the assignment, 
correction, or deletion of FEDSTRIP activity address codes is the Office 
of Property Management, within the Headquarters procurement 
organization.
    (e)(4)(iii) Materials, supplies, and equipment acquired from 
Government sources of supply under the procedures described herein must 
be used exclusively in connection with Government work, except as 
otherwise authorized by the Head of the Contracting Activity.

[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 59 
FR 9108, Feb. 25, 1994]



951.103  Ordering from Government supply sources.

    (b) The Procurement Executive shall be informed of instances in 
which GSA sources of supply are not used because of the quality of the 
items available from GSA or when a Federal Supply Schedule contractor 
refuses to honor an order.



           Subpart 951.70_Contractor Employee Travel Discounts



951.7002  Responsibilities.

    The contracting officer shall insert the clause at 952.251-70, 
Contractor employee travel discounts, in all cost-reimbursable 
solicitations and contracts when significant costs for rail travel, car 
rental, or lodging will be required to perform the contract. The 
contracting officer may furnish the contractor with appropriate 
identification letters.

[65 FR 81007, Dec. 22, 2000]

[[Page 371]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 952_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




                          Subpart 952.0_General

Sec.
952.000 Scope of part.
952.001 General policy.

              Subpart 952.2_Text of Provisions and Clauses

952.202 Clauses related to definitions.
952.202-1 Definitions.
952.203-1 Whistleblower protection for contractor employees.
952.204 Clauses related to administrative matters.
952.204-2 Security requirements.
952.204-70 Classification/Declassification.
952.204-71 Sensitive foreign nations controls.
952.204-72 Disclosure of information.
952.204-73 Facility clearance.
952.204-75 Public Affairs.
952.204-76 Conditional payment of fee or profit--safeguarding restricted 
          data and other classified information.
952.208 Clauses related to required sources of supply.
952.208-7 Tagging of leased vehicles.
952.208-70 Printing.
952.209 Clauses related to contractor's qualifications.
952.209-8 Organizational Conflicts of Interest-Disclosure.
952.209-71 [Reserved]
952.209-72 Organizational conflicts of interest.
952.211 Clauses related to contract delivery or performance.
952.211-70 Priorities and allocations for energy programs 
          (solicitations).
952.211-71 Priorities and allocations for energy programs (contracts).
952.211-72--952.211-73 [Reserved]
952.215-70 Key personnel.
952.216 Clauses related to types of contracts.
952.216-7 Allowable cost and payment.
952.216-15 Predetermined indirect cost rates.
952.217-70 Acquisition of real property.
952.219-70 DOE Mentor-Protege program.
952.223 Clauses related to environment, conservation, and occupational 
          safety.
952.223-71 Integration of environment, safety, and health into work 
          planning and execution.
952.223-72 Radiation protection and nuclear criticality.
952.223-73--952.223-74 [Reserved]
952.223-75 Preservation of individual occupational radiation exposure 
          records.
952.223-76 Conditional payment of fee or profit--safeguarding restricted 
          data and other classified information and protection of worker 
          safety and health.
952.223-77 Conditional payment of fee or profit--protection of worker 
          safety and health.
952.224-70 Paperwork Reduction Act.
952.225-70 Subcontracting for nuclear hot cell services.
952.226-70 Subcontracting goals under section 3021(a) of the Energy 
          Policy Act of 1992.
952.226-71 Utilization of Energy Policy Act target entities.
952.226-72 Energy Policy Act subcontracting goals and reporting 
          requirements.
952.226-73 Energy Policy Act target group certification.
952.226-74 Displaced employee hiring preference.
952.227 Provisions and clauses related to patents, technical data and 
          copyrights.
952.227-9 Refund of royalties.
952.227-11 Patent rights--retention by the contractor (short form).
952.227-13 Patent rights--acquisition by the Government.
952.227-14 Rights in data-general.
952.227-70--952.227-72 [Reserved]
952.227-74 [Reserved]
952.227-82 Rights to proposal data.
952.227-84 Notice of right to request patent waiver.
952.231-70 Date of incurrence of cost.
952.231-71 Insurance-litigation and claims.
952.233-2 Service of protest.
952.233-4 Notice of protest file availability.
952.233-5 Agency protest review.
952.235-70 Key personnel.
952.236 Construction and architect-engineer contracts.
952.236-71 Inspection in architect-engineer contracts.
952.236-72 Nonrefundable fee for plans and specifications.
952.237-70 Collective bargaining agreements--protective services.
952.242-70 Technical direction.
952.245 Clauses related to Government property.
952.245-2 Government property (fixed-price contracts).
952.245-5 Government property (cost-reimbursement, time-and-materials, 
          or labor-hour contracts).
952.247-70 Foreign travel.
952.249 Clauses related to termination.
952.250 Clauses related to indemnification of contractors.

[[Page 372]]

952.250-70 Nuclear hazards indemnity agreement.
952.250-71--952.250-72 [Reserved]
952.251-70 Contractor employee travel discounts.

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 U.S.C. 
2401 et seq.

    Source: 49 FR 12042, Mar. 28, 1984, unless otherwise noted.



                          Subpart 952.0_General



952.000  Scope of part.

    This part implements FAR part 52 which sets forth contract clauses 
for use in connection with the acquisition of personal property and 
nonpersonal services (including construction), and supplements, as well 
as modifies, FAR part 52 by prescribing certain modifications to be made 
to FAR clauses when used in DOE contracts and specifying certain DOE 
contract clauses to be used in addition to or in place of such FAR 
clauses.



952.001  General policy.

    It is DOE policy to use the prescribed FAR and DOE contract clauses 
wherever practicable. Uniformity in the use of contract clauses helps to 
ensure impartial treatment of all contractors, expedites negotiation and 
contract review, and facilitates contract administration.



              Subpart 952.2_Text of Provisions and Clauses



952.202  Clauses related to definitions.



952.202-1  Definitions.

    (a) As prescribed in 902.200, insert the clause at FAR 52.202-1 in 
all contracts. The contracting officer shall substitute the following 
for paragraph (a) of the clause.

    (a) Head of Agency means: (i) The Secretary; (ii) Deputy Secretary; 
(iii) Under Secretaries of the Department of Energy and (iiii) the 
Chairman, Federal Energy Regulatory Commission.

    (b) The following shall be added as paragraphs (h) and (i) except 
that they will be designated paragraphs (g) and (h) if Alternate I of 
the FAR clause is used.

    (h) The term DOE means the Department of Energy, FERC means the 
Federal Energy Regulatory Commission, and NNSA means the National 
Nuclear Security Administration.
    (i) The term Senior Procurement Executive means, for DOE:
    Department of Energy--Director, Office of Procurement and Assistance 
Management, DOE;
    National Nuclear Security Administration--Administrator for Nuclear 
Security, NNSA; and
    Federal Energy Regulatory Commission--Chairman, FERC.

[67 FR 14871, Mar. 28, 2002]



952.203-70  Whistleblower Protection for Contractor Employees.

    As prescribed in 48 CFR 903.971, insert the following clause:

      Whistleblower Protection for Contractor Employees (DEC 2000)

    (a) The contractor shall comply with the requirements of ``DOE 
Contractor Employee Protection Program'' at 10 CFR part 708 for work 
performed on behalf of DOE directly related to activities at DOE-owned 
or -leased sites.
    (b) The contractor shall insert or have inserted the substance of 
this clause, including this paragraph (b), in subcontracts at all tiers, 
for subcontracts involving work performed on behalf of DOE directly 
related to activities at DOE-owned or leased sites.

                             (End of clause)

[65 FR 81008, Dec. 22, 2000]



952.204  Clauses related to administrative matters.



952.204-2  Security requirements.

    As prescribed in 904.404(d)(1) the following clause shall be 
included in contracts entered into under section 31 (research 
assistance) or 41 (ownership and operation of production facilities) of 
the Atomic Energy Act of 1954, as amended, and in other contracts and 
subcontracts, which involve or are likely to involve classified 
information.

                           Security (MAY 2002)

    (a) Responsibility. It is the contractor's duty to safeguard all 
classified information, special nuclear material, and other DOE 
property. The contractor shall, in accordance with DOE security 
regulations and requirements, be responsible for safeguarding

[[Page 373]]

all classified information and protecting against sabotage, espionage, 
loss or theft of the classified documents and material in the 
contractor's posession in connection with the performance of work under 
this contract. Except as otherwise provided in this contract, the 
contractor shall, upon completion or termination of this contract, 
transmit to DOE any classified matter in the posession of the contractor 
or any person under the contractor's control in connection with 
performance of this contract. If retention by the contractor of any 
classified matter is required after the completion or termination of the 
contract, the contractor shall identify the items and types or 
categories of matter proposed for retention, the reasons for the 
retention of the matter, and the proposed period of retention. If the 
retention is approved by the contracting officer, the security 
provisions of the contract shall continue to be applicable to the matter 
retained. Special nuclear material shall not be retained after the 
completion or termination of the contract.
    (b) Regulations. The contractor agrees to comply with all security 
regulations and requirements of DOE in effect on the date of award.
    (c) Definition of classified information. The term classified 
information means Restricted Data, Formerly Restricted Data, or National 
Security Information.
    (d) Definition of restricted data. The term Restricted Data means 
all data concerning (1) design, manufacture, or utilization of atomic 
weapons; (2) the production of special nuclear material; or (3) the use 
of special nuclear material in the production of energy, but shall not 
include data declassified or removed from the Restricted Data category 
pursuant to Section 142 of the Atomic Energy Act of 1954, as amended.
    (e) Definition of formerly restricted data. The term Formerly 
Restricted Data means all data removed from the Restricted Data category 
under section 142 d. of the Atomic Energy Act of 1954, as amended.
    (f) Definition of National Security Information. The term National 
Security Information means any information or material, regardless of 
its physical form or characteristics, that is owned by, produced for or 
by, or is under the control of the United States Government, that has 
been determined pursuant to Executive Order 12356 or prior Orders to 
require protection against unauthorized disclosure, and which is so 
designated.
    (g) Definition of Special Nuclear Material (SNM). SNM means: (1) 
plutonium, uranium enriched in the isotope 233 or in the isotope 235, 
and any other material which pursuant to the provisions of Section 51 of 
the Atomic Energy Act of 1954, as amended, has been determined to be 
special nuclear material, but does not include source material; or (2) 
any material artificially enriched by any of the foregoing, but does not 
include source material.
    (h) Security clearance of personnel. The contractor shall not permit 
any individual to have access to any classified information, except in 
accordance with the Atomic Energy Act of 1954, as amended, Executive 
Order 12356, and the DOE's regulations or requirements applicable to the 
particular level and category of classified information to which access 
is required.
    (i) Criminal liability. It is understood that disclosure of any 
classified information relating to the work or services ordered 
hereunder to any person not entitled to receive it, or failure to 
safeguard any classified information that may come to the contractor or 
any person under the contractor's control in connection with work under 
this contract, may subject the contractor, its agents, employees, or 
subcontractors to criminal liability under the laws of the United 
States. (See the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2011 
et seq.; 18 U.S.C. 793 and 794; and E.O. 12356.)
    (j) Foreign Ownership, Control or Influence.
    (1) The Contractor shall immediately provide the cognizant security 
office written notice of any change in the extent and nature of foreign 
ownership, control or influence over the Contractor which would affect 
any answer to the questions presented in the Certificate Pertaining to 
Foreign Interests, Standard Form 328 or the Foreign Ownership, Control 
or Influence questionnaire executed by the Contractor prior to the award 
of this contract. In addition, any notice of changes in ownership or 
control which are required to be reported to the Securities and Exchange 
Commission, the Federal Trade Commission, or the Department of Justice 
shall also be furnished concurrently to the Contracting Officer.
    (2) If a Contractor has changes involving foreign ownership, control 
or influence, DOE must determine whether the changes will pose an undue 
risk to the common defense and security. In making this determination, 
DOE will consider proposals made by the Contractor to avoid or mitigate 
foreign influences.
    (3) If the cognizant security office at any time determines that the 
Contractor is, or is potentially, subject to foreign ownership, control 
or influence, the Contractor shall comply with such instructions as the 
Contracting Officer shall provide in writing to safeguard any classified 
information or special nuclear material.
    (4) The Contractor agrees to insert terms that conform substantially 
to the language of this clause, including this paragraph, in all 
subcontracts under this contract that will require subcontractor 
employees to possess access authorizations. Additionally, the Contractor 
must require subcontractors to

[[Page 374]]

have an existing DOD or DOE Facility Clearance or submit a completed 
Certificate Pertaining to Foreign Interests, Standard Form 328, required 
in DEAR 952.204-73 prior to award of a subcontract. Information to be 
provided by a subcontractor pursuant to this clause may be submitted 
directly to the Contracting Officer. For purposes of this clause, 
subcontractor means any subcontractor at any tier and the term 
``Contracting Officer'' means the DOE Contracting Officer. When this 
clause is included in a subcontract, the term ``Contractor'' shall mean 
Subcontractor and the term ``contract'' shall mean subcontract.
    (5) The Contracting Officer may terminate this contract for default 
either if the Contractor fails to meet obligations imposed by this 
clause or if the Contractor creates a FOCI situation in order to avoid 
performance or a termination for default. The Contracting Officer may 
terminate this contract for convenience if the Contractor becomes 
subject to FOCI and for reasons other than avoidance of performance of 
the contract, cannot, or chooses not to, avoid or mitigate the FOCI 
problem.

[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 52 
FR 38425, Oct. 16, 1987; 59 FR 9108, Feb. 25, 1994; 62 FR 42074, Aug 5, 
1997; 67 FR 14877, Mar. 28, 2002]



952.204-70  Classification/Declassification.

    As prescribed in 904.404(d)(2), the following clause shall be 
included in all contracts which involve classified information.

               Classification/Declassification (SEP 1997)

    In the performance of work under this contract, the contractor or 
subcontractor shall comply with all provisions of the Department of 
Energy's regulations and mandatory DOE directives which apply to work 
involving the classification and declassification of information, 
documents, or material. In this section, ``information'' means facts, 
data, or knowledge itself; ``document'' means the physical medium on or 
in which information is recorded; and ``material'' means a product or 
substance which contains or reveals information, regardless of its 
physical form or characteristics. Classified information is ``Restricted 
Data'' and ``Formerly Restricted Data'' (classified under the Atomic 
Energy Act of 1954, as amended) and ``National Security Information'' 
(classified under Executive Order 12958 or prior Executive Orders).
    The original decision to classify or declassify information is 
considered an inherently Governmental function. For this reason, only 
Government personnel may serve as original classifiers, i.e., Federal 
Government Original Classifiers. Other personnel (Government or 
contractor) may serve as derivative classifiers which involves making 
classification decisions based upon classification guidance which 
reflect decisions made by Federal Government Original Classifiers.
    The contractor or subcontractor shall ensure that any document or 
material that may contain classified information is reviewed by either a 
Federal Government or a Contractor Derivative Classifier in accordance 
with classification regulations including mandatory DOE directives and 
classification/declassification guidance furnished to the contractor by 
the Department of Energy to determine whether it contains classified 
information prior to dissemination. For information which is not 
addressed in classification/declassification guidance, but whose 
sensitivity appears to warrant classification, the contractor or 
subcontractor shall ensure that such information is reviewed by a 
Federal Government Original Classifier.
    In addition, the contractor or subcontractor shall ensure that 
existing classified documents (containing either Restricted Data or 
Formerly Restricted Data or National Security Information) which are in 
its possession or under its control are periodically reviewed by a 
Federal Government or Contractor Derivative Declassifier in accordance 
with classification regulations, mandatory DOE directives and 
classification/declassification guidance furnished to the contractor by 
the Department of Energy to determine if the documents are no longer 
appropriately classified. Priorities for declassification review of 
classified documents shall be based on the degree of public and 
researcher interest and the likelihood of declassification upon review. 
Documents which no longer contain classified information are to be 
declassified. Declassified documents then shall be reviewed to determine 
if they are publicly releasable. Documents which are declassified and 
determined to be publicly releasable are to be made available to the 
public in order to maximize the public's access to as much Government 
information as possible while minimizing security costs.
    The contractor or subcontractor shall insert this clause in any 
subcontract which involves or may involve access to classified 
information.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994; 62 
FR 51802, Oct. 3, 1997]



952.204-71  Sensitive foreign nations controls.

    In accordance with 904.404(d)(3), the contracting officer shall 
include the following clause.

[[Page 375]]

              Sensitive Foreign Nations Controls (APR 1994)

    (a) In connection with any activities in the performance of this 
contract, the contractor agrees to comply with the ``Sensitive Foreign 
Nations Controls'' requirements attached to this contract, relating to 
those countries, which may from time to time, be identified to the 
contractor by written notice as sensitive foreign nations. The 
contractor shall have the right to terminate its performance under this 
contract upon at least 60 days' prior written notice to the contracting 
officer if the contractor determines that it is unable, without 
substantially interfering with its polices or without adversely 
impacting its performance to continue performance of the work under this 
contract as a result of such notification. If the contractor elects to 
terminate performance, the provisions of this contract regarding 
termination for the convenience of the Government shall apply.
    (b) The provisions of this clause shall be included in any 
subcontracts.

[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 59 
FR 9108, Feb. 25, 1994; 62 FR 2312, Jan. 16, 1997]



952.204-72  Disclosure of information.

    As prescribed in 904.404(d)(4) this clause may be used in place of 
the clauses entitled ``Security,'' 952.204-2, and ``Classification,'' 
952.204-70, in contracts with educational institutions for research 
involving nuclear technology which could but is not expected to produce 
classified information or restricted data.

                  Disclosure of Information (APR 1994)

    (a) It is mutually expected that the activities under this contract 
will not involve classified information. It is understood, however, that 
if in the opinion of either party, this expectation changes prior to the 
expiration or terminating of all activities under this contract, said 
party shall notify the other party accordingly in writing without delay. 
In any event, the contractor shall classify, safeguard, and otherwise 
act with respect to all classified information in accordance with 
applicable law and the requirements of DOE, and shall promptly inform 
DOE in writing if and when classified information becomes involved, or 
in the mutual judgment of the parties it appears likely that classified 
information or material may become involved. The contractor shall have 
the right to terminate performance of the work under this contract and 
in such event the provisions of this contract respecting termination for 
the convenience of the Government shall apply.
    (b) The contractor shall not permit any individual to have access to 
classified information except in accordance with the Atomic Energy Act 
1954, as amended, Executive Order 12356, and DOE's regulations or 
requirements.
    (c) The term Restricted Data as used in this article means all data 
concerning the design, manufacture, or utilization of atomic weapons, 
the production of special nuclear material or the use of special nuclear 
material in the production of energy, but shall not include data 
declassified or removed from the Restricted Data category pursuant to 
section 142 of the Atomic Energy Act of 1954, as amended.

[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 59 
FR 9108, Feb. 25, 1994; 62 FR 2312, Jan. 16, 1997]



952.204-73  Facility clearance.

    As prescribed in 904.404(d)(5), insert the following provision in 
all solicitations which require the use of Standard Form 328, 
Certificate Pertaining to Foreign Interests for contracts or 
subcontracts subject to the provisions of 904.70.

                      Facility Clearance (MAY 2002)

                                 Notices

    Section 2536 of title 10, United States Code, prohibits the award of 
a contract under a national security program to an entity controlled by 
a foreign government if it is necessary for that entity to be given 
access to information in a proscribed category of information in order 
to perform the contract unless a waiver is granted by the Secretary of 
Energy. In addition, a Facility Clearance and foreign ownership, control 
and influence (FOCI) information are required when the contract or 
subcontract to be awarded is expected to require employees to have 
access authorizations.
    Offerors who have either a Department of Defense or a Department of 
Energy Facility Clearance generally need not resubmit the following 
foreign ownership information unless specifically requested to do so. 
Instead, provide your DOE Facility Clearance code or your DOD assigned 
commercial and government entity (CAGE) code. If uncertain, consult the 
office which issued this solicitation.
    (a) Use of Certificate Pertaining to Foreign Interests, Standard 
Form 328.
    (1) The contract work anticipated by this solicitation will require 
access to classified information or special nuclear material. Such 
access will require a Facility Clearance for the Contractor organization 
and access authorizations (security clearances) for Contractor personnel 
working with the classified information or special nuclear material. To 
obtain a Facility Clearance the offeror must submit a Certificate 
Pertaining to Foreign

[[Page 376]]

Interests, Standard Form 328, and all required supporting documents to 
form a complete Foreign Ownership, Control or Influence (FOCI) Package.
    (2) Information submitted by the offeror in response to the Standard 
Form 328 will be used solely for the purposes of evaluating foreign 
ownership, control or influence and will be treated by DOE, to the 
extent permitted by law, as business or financial information submitted 
in confidence.
    (3) Following submission of a Standard Form 328 and prior to 
contract award, the Contractor shall immediately submit to the 
Contracting Officer written notification of any changes in the extent 
and nature of FOCI which could affect the offeror's answers to the 
questions in Standard Form 328. Following award of a contract, the 
Contractor must immediately submit to the cognizant security office 
written notification of any changes in the extent and nature of FOCI 
which could affect the offeror's answers to the questions in Standard 
Form 328. Notice of changes in ownership or control which are required 
to be reported to the Securities and Exchange Commission, the Federal 
Trade Commission, or the Department of Justice must also be furnished 
concurrently to the cognizant security office.
    (b) Definitions.
    (1) Foreign Interest means any of the following:
    (i) A foreign government, foreign government agency, or 
representative of a foreign government;
    (ii) Any form of business enterprise or legal entity organized, 
chartered or incorporated under the laws of any country other than the 
United States or its possessions and trust territories; and
    (iii) Any person who is not a citizen or national of the United 
States.
    (2) Foreign Ownership, Control, or Influence (FOCI) means the 
situation where the degree of ownership, control, or influence over a 
Contractor by a foreign interest is such that a reasonable basis exists 
for concluding that compromise of classified information or special 
nuclear material may result.
    (c) Facility Clearance means an administrative determination that a 
facility is eligible to access, produce, use or store classified 
information, or special nuclear material. A Facility Clearance is based 
upon a determination that satisfactory safeguards and security measures 
are carried out for the activities being performed at the facility. It 
is DOE policy that all Contractors or Subcontractors requiring access 
authorizations be processed for a Facility Clearance at the level 
appropriate to the activities being performed under the contract. 
Approval for a Facility Clearance shall be based upon:
    (1) A favorable foreign ownership, control, or influence (FOCI) 
determination based upon the Contractor's response to the ten questions 
in Standard Form 328 and any required, supporting data provided by the 
Contractor;
    (2) A contract or proposed contract containing the appropriate 
security clauses;
    (3) Approved safeguards and security plans which describe protective 
measures appropriate to the activities being performed at the facility;
    (4) An established Reporting Identification Symbol code for the 
Nuclear Materials Management and Safeguards Reporting System if access 
to nuclear materials is involved;
    (5) A survey conducted no more than 6 months before the Facility 
Clearance date, with a composite facility rating of satisfactory, if the 
facility is to possess classified matter or special nuclear material at 
its location;
    (6) Appointment of a Facility Security Officer, who must possess or 
be in the process of obtaining an access authorization equivalent to the 
Facility Clearance; and, if applicable, appointment of a Materials 
Control and Accountability Representative; and
    (7) Access authorizations for key management personnel who will be 
determined on a case-by-case basis, and must possess or be in the 
process of obtaining access authorizations equivalent to the level of 
the Facility Clearance.
    (d) A Facility Clearance is required prior to the award of a 
contract requiring access to classified information and the granting of 
any access authorizations under a contract. Prior to award of a 
contract, the DOE must determine that award of the contract to the 
offeror will not pose an undue risk to the common defense and security 
as a result of its access to classified information or special nuclear 
material in the performance of the contract. The Contracting Officer may 
require the offeror to submit such additional information as deemed 
pertinent to this determination.
    (e) A Facility Clearance is required even for contracts that do not 
require the Contractor's corporate offices to receive, process, 
reproduce, store, transmit, or handle classified information or special 
nuclear material, but which require DOE access authorizations for the 
Contractor's employees to perform work at a DOE location. This type 
facility is identified as a non-possessing facility.
    (f) Except as otherwise authorized in writing by the Contracting 
Officer, the provisions of any resulting contract must require that the 
contractor insert provisions similar to the foregoing in all 
subcontracts and purchase orders. Any Subcontractors requiring access 
authorizations for access to classified information or special nuclear 
material shall be directed to provide responses to the questions in 
Standard Form 328, Certificate Pertaining to Foreign Interests, directly 
to the

[[Page 377]]

prime contractor or the Contracting Officer for the prime contract.

  Notice to Offerors--Contents Review (Please Review Before Submitting)

    Prior to submitting the Standard Form 328, required by paragraph 
(a)(1) of this clause, the offeror should review the FOCI submission to 
ensure that:
    (1) The Standard Form 328 has been signed and dated by an authorized 
official of the company;
    (2) If publicly owned, the Contractor's most recent annual report, 
and its most recent proxy statement for its annual meeting of 
stockholders have been attached; or, if privately owned, the audited, 
consolidated financial information for the most recently closed 
accounting year has been attached;
    (3) A copy of the company's articles of incorporation and an 
attested copy of the company's by-laws, or similar documents filed for 
the company's existence and management, and all amendments to those 
documents;
    (4) A list identifying the organization's owners, officers, 
directors, and executive personnel, including their names, social 
security numbers, citizenship, titles of all positions they hold within 
the organization, and what clearances, if any, they possess or are in 
the process of obtaining, and identification of the government 
agency(ies) that granted or will be granting those clearances; and
    (5) A summary FOCI data sheet.
    Note: A FOCI submission must be attached for each tier parent 
organization (i.e. ultimate parent and any intervening levels of 
ownership). If any of these documents are missing, award of the contract 
cannot be completed.

[67 FR 14877, Mar. 28, 2002]



952.204-75  Public Affairs.

    As prescribed in 48 CFR 904.7201, insert the following clause.

                        Public Affairs (DEC 2000)

    (a) The Contractor must cooperate with the Department in releasing 
unclassified information to the public and news media regarding DOE 
policies, programs, and activities relating to its effort under the 
contract. The responsibilities under this clause must be accomplished 
through coordination with the Contracting Officer and appropriate DOE 
public affairs personnel in accordance with procedures defined by the 
Contracting Officer.
    (b) The Contractor is responsible for the development, planning, and 
coordination of proactive approaches for the timely dissemination of 
unclassified information regarding DOE activities onsite and offsite, 
including, but not limited to, operations and programs. Proactive public 
affairs programs may utilize a variety of communication media, including 
public workshops, meetings or hearings, open houses, newsletters, press 
releases, conferences, audio/visual presentations, speeches, forums, 
tours, and other appropriate stakeholder interactions.
    (c) The Contractor's internal procedures must ensure that all 
releases of information to the public and news media are coordinated 
through, and approved by, a management official at an appropriate level 
within the Contractor's organization.
    (d) The Contractor must comply with DOE procedures for obtaining 
advance clearances on oral, written, and audio/visual informational 
material prepared for public dissemination or use.
    (e) Unless prohibited by law, and in accordance with procedures 
defined by the Contracting Officer, the Contractor must notify the 
Contracting Officer and appropriate DOE public affairs personnel of 
communications or contacts with Members of Congress relating to the 
effort performed under the contract.
    (f) In accordance with procedures defined by the Contracting 
Officer, the Contractor must notify the Contracting Officer and 
appropriate DOE public affairs personnel of activities or situations 
that may attract regional or national news media attention and of non-
routine inquiries from national news media relating to the effort 
performed under the contract.
    (g) In releases of information to the public and news media, the 
Contractor must fully and accurately identify the Contractor's 
relationship to the Department and fully and accurately credit the 
Department for its role in funding programs and projects resulting in 
scientific, technical, and other achievements.

                             (End of clause)

[65 FR 81008, Dec. 22, 2000]



952.204-76  Conditional payment of fee or profit--safeguarding restricted 
data and other classified information.

    As prescribed at 48 CFR (DEAR) 904.404(d)(6), insert the following 
clause.

 Conditional Payment of Fee or Profit--Safeguarding Restricted Data and 
                 Other Classified Information (JAN 2004)

    (a) General. (1) The payment of fee or profit (i.e., award fee, 
fixed fee, and incentive fee or profit) under this contract is dependent 
upon the contractor's compliance with the

[[Page 378]]

terms and conditions of this contract relating to the safeguarding of 
Restricted Data and other classified information (i.e., Formerly 
Restricted Data and National Security Information) including compliance 
with applicable law, regulation, and DOE directives. The term 
``contractor'' as used in this clause to address failure to comply shall 
mean ``contractor or contractor employee.''
    (2) In addition to other remedies available to the Government, if 
the contractor fails to comply with the terms and conditions of this 
contract relating to the safeguarding of Restricted Data and other 
classified information, the contracting officer may unilaterally reduce 
the amount of fee or profit that is otherwise payable to the contractor 
in accordance with the terms and conditions of this clause.
    (3) Any reduction in the amount of fee or profit earned by the 
contractor will be determined by the severity of the contractor's 
failure to comply with contract terms and conditions relating to the 
safeguarding of Restricted data or other classified information pursuant 
to the degrees specified in paragraph (c) of this clause.
    (b) Reduction Amount. (1) If in any period (see 48 CFR 952.204-76 
(b)(2)) it is found that the contractor has failed to comply with 
contract terms and conditions relating to the safeguarding of Restricted 
Data or other classified information, the contractor's fee or profit of 
the period may be reduced. Such reduction shall not be less than 26 
percent nor greater than 100 percent of the total fee or profit earned 
for a first degree performance failure, not less than 11 percent nor 
greater than 25 percent for a second degree performance failure, and up 
to 10 percent for a third degree performance failure. The contracting 
officer must consider mitigating factors that may warrant a reduction 
below the specified range (see 48 CFR 904.402(c)). The mitigating 
factors include, but are not limited to, the following:
    (i) Degree of control the contractor had over the event or incident.
    (ii) Efforts the contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of safeguarding 
Restricted Data and other classified information and compliance in 
related security areas.
    (2)(i) Except in the case of performance-based firm-fixed-price 
contracts (see paragraph (b)(3) of this clause), the contracting 
officer, for purposes of this clause, will at the time of contract 
award, or as soon as practicable thereafter, allocate the total amount 
of fee or profit that is available under this contract to equal periods 
of [insert 6 or 12] months to run sequentially for the entire term of 
the contract (i.e., from the effective date of the contract to the 
expiration date of the contract, including all options). The amount of 
fee or profit to be allocated to each period shall be equal to the 
average monthly fee or profit that is available or otherwise payable 
during the entire term of the contract, multiplied by the number of 
months established above for each period.
    (ii) Under this clause, the total amount of fee or profit that is 
subject to reduction in a period in which a performance failure occurs, 
in combination with any reduction made under any other clause in the 
contract that provides for a reduction to the fee or profit, shall not 
exceed the amount of fee or profit that is earned by the contractor in 
the period established pursuant to paragraph (b)(2)(i) of this clause.
    (3) For performance-based firm-fixed-price contracts, the 
contracting officer will at the time of contract award include negative 
monetary incentives in the contract for contractor violations relating 
to the safeguarding of Restricted Data and other classified information.
    (c) Safeguarding Restricted Data and Other Classified Information. 
Performance failures occur if the contractor does not comply with the 
terms and conditions of this contract relating to the safeguarding of 
Restricted Data and other classified information. The degrees of 
performance failures relating to the contractor's obligations under this 
contract for safeguarding of Restricted Data and other classified 
information are as follows:
    (1) First Degree: Performance failures that have been determined, in 
accordance with applicable law, regulation, or DOE directive, to have 
resulted in, or that can reasonably be expected to result in, 
exceptionally grave damage to the national security. The following are 
examples of performance failures or performance failures of similar 
import that will be considered first degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating a risk of, loss, 
compromise, or unauthorized disclosure of Top Secret Restricted Data or 
other information classified as Top Secret, any classification level of 
information in a Special Access Program (SAP), information identified as 
sensitive compartmented information (SCI), or high risk nuclear weapons-
related data.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data, or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of

[[Page 379]]

Top Secret Restricted Data or other information classified as Top 
Secret, any classification level of information in a SAP, information 
identified as SCI, or high risk nuclear weapons-related data.
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (2) Second Degree: Performance failures that have been determined, 
in accordance with applicable law, regulation, or DOE directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
serious damage to the national security. The following are examples of 
performance failures or performance failures of similar import that will 
be considered second degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Secret Restricted Data or other 
information classified as Secret.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Sceret Restricted 
Data, or other information classified as Secret.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Restricted Data or other information 
regardless of classification (except for information covered by 
paragraph (c)(1)(iii) of this clause).
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data or other information classified as Secret.
    (3) Third Degree: Performance failures that have been determined, in 
accordance with applicable law, regulation, or DOE directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
undue risk to the common defense and security. In addition, this 
category includes performance failures that result from a lack of 
contractor management and/or employee attention to the proper 
safeguarding of Restricted Data and other classified information. These 
performance failures may be indicators of future, more severe 
performance failures and/or conditions, and if identified and corrected 
early would prevent serious incidents. The following are examples of 
performance failures or performance failures of similar import that will 
be considered third degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Restricted Data or other information 
classified as Confidential.
    (ii) Failure to promptly report alleged or suspected violations of 
laws, regulations, or directives pertaining to the safeguarding of 
Restricted Data or other classified information.
    (iii) Failure to identify or timely execute corrective actions to 
mitigate or eliminate identified vulnerabilities and reduce residual 
risk relating to the protection of Restricted Data or other classified 
information in accordance with the contractor's Safeguards and Security 
Plan or other security plan, as applicable.
    (iv) Contractor actions that result in performance failures which 
unto themselves pose minor risk, but when viewed in the aggregate 
indicate degradation in the integrity of the contractor's safeguards and 
security management system relating to the protection of Restricted Data 
and other classified information.

                             (End of clause)

[68 FR 68777, Dec. 10, 2003]



952.208  Clauses related to required sources of supply.



952.208-7  Tagging of leased vehicles.

    As prescribed in 908.1104, insert the following clause when leasing 
commercial vehicles for periods in excess of 60 days.

                  Tagging of Leased Vehicles (APR 1984)

    (a) DOE intends to use U.S. Government license tags.
    (b) While it is the intention that vehicles leased hereunder shall 
operate on Federal tags, the DOE reserves the right to utilize State 
tags if necessary to accomplish its mission. Should State tags be 
required, the contractor shall furnish the DOE the documentation 
required by the State to acquire such tags.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9108, Feb. 25, 1994; 67 
FR 14872, Mar. 28, 2002]



952.208-70  Printing.

    As prescribed in 908.802, insert the following clause.

                           Printing (APR 1984)

    The contractor shall not engage in, nor subcontract for, any 
printing (as that term is defined in Title I of the U.S. Government 
Printing and Binding Regulations in effect on the effective date of this 
contract) in connection with the performance of work under

[[Page 380]]

this contract. Provided, however, that performance of a requirement 
under this contract involving the duplication of less than 5,000 copies 
of a single unit, or no more than 25,000 units in the aggregate of 
multiple units, will not be deemed to be printing. A unit is defined as 
one sheet, size 8\1/2\ by 11 inches one side only, one color. A 
requirement is defined as a single publication document.
    (1) The term printing includes the following processes: composition, 
plate making, presswork, binding, microform publishing, or the end items 
produced by such processes.
    (2) If fulfillment of the contract will necessitate reproduction in 
excess of the limits set forth above, the contractor shall notify the 
contracting officer in writing and obtain the contracting officer's 
approval prior to acquiring on DOE's behalf production, acquisition, and 
dissemination of printed matter. Such printing must be obtained from the 
Government Printing Office (GPO), a contract source designated by GPO or 
a Joint Committee on Printing authorized federal printing plant.
    (3) Printing services not obtained in compliance with this guidance 
will result in the cost of such printing being disallowed.
    (4) The Contractor will include in each of his subcontracts 
hereunder a provision substantially the same as this clause including 
this paragraph (4).

[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at 59 
FR 9108, Feb. 25, 1994]



952.209  Clauses related to contractor's qualifications.



952.209-8  Organizational Conflicts of Interest-Disclosure.

    As prescribed in 48 CFR 909.507-1(e), insert the following 
provision:

Organizational Conflicts of Interest Disclosure-Advisory and Assistance 
                           Services (JUN 1997)

    (a) Organizational conflict of interest means that because of other 
activities or relationships with other persons, a person is unable or 
potentially unable to render impartial assistance or advice to the 
Government, or the person's objectivity in performing the contract work 
is or might be otherwise impaired, or a person has an unfair competitive 
advantage.
    (b) An offeror notified that it is the apparent successful offeror 
shall provide the statement described in paragraph (c) of this 
provision. For purposes of this provision, ``apparent successful 
offeror'' means the proposer selected for final negotiations or, where 
individual contracts are negotiated with all firms in the competitive 
range, it means all such firms.
    (c) The statement must contain the following:
    (1) A statement of any past (within the past twelve months), 
present, or currently planned financial, contractual, organizational, or 
other interests relating to the performance of the statement of work. 
For contractual interests, such statement must include the name, 
address, telephone number of the client or client(s), a description of 
the services rendered to the previous client(s), and the name of a 
responsible officer or employee of the offeror who is knowledgeable 
about the services rendered to each client, if, in the 12 months 
preceding the date of the statement, services were rendered to the 
Government or any other client (including a foreign government or 
person) respecting the same subject matter of the instant solicitation, 
or directly relating to such subject matter. The agency and contract 
number under which the services were rendered must also be included, if 
applicable. For financial interests, the statement must include the 
nature and extent of the interest and any entity or entities involved in 
the financial relationship. For these and any other interests enough 
such information must be provided to allow a meaningful evaluation of 
the potential effect of the interest on the performance of the statement 
of work.
    (2) A statement that no actual or potential conflict of interest or 
unfair competitive advantage exists with respect to the advisory and 
assistance services to be provided in connection with the instant 
contract or that any actual or potential conflict of interest or unfair 
competitive advantage that does or may exist with respect to the 
contract in question has been communicated as part of the statement 
required by (b) of this provision.
    (d) Failure of the offeror to provide the required statement may 
result in the offeror being determined ineligible for award. 
Misrepresentation or failure to report any fact may result in the 
assessment of penalties associated with false statements or such other 
provisions provided for by law or regulation.

                           (End of provision)

[62 FR 40752, July 30, 1997]



952.209-71  [Reserved]



952.209-72   Organizational conflicts of interest.

    As prescribed at 48 CFR 909.507-2, insert the following clause:

[[Page 381]]

             Organizational Conflicts of Interest (JUN 1997)

    (a) Purpose. The purpose of this clause is to ensure that the 
contractor (1) is not biased because of its financial, contractual, 
organizational, or other interests which relate to the work under this 
contract, and (2) does not obtain any unfair competitive advantage over 
other parties by virtue of its performance of this contract.
    (b) Scope. The restrictions described herein shall apply to 
performance or participation by the contractor and any of its affiliates 
or their successors in interest (hereinafter collectively referred to as 
``contractor'') in the activities covered by this clause as a prime 
contractor, subcontractor, cosponsor, joint venturer, consultant, or in 
any similar capacity. For the purpose of this clause, affiliation occurs 
when a business concern is controlled by or has the power to control 
another or when a third party has the power to control both.
    (1) Use of Contractor's Work Product. (i) The contractor shall be 
ineligible to participate in any capacity in Department contracts, 
subcontracts, or proposals therefor (solicited and unsolicited) which 
stem directly from the contractor's performance of work under this 
contract for a period of (Contracting Officer see DEAR 9.507-2 and enter 
specific term) years after the completion of this contract. Furthermore, 
unless so directed in writing by the contracting officer, the Contractor 
shall not perform any advisory and assistance services work under this 
contract on any of its products or services or the products or services 
of another firm if the contractor is or has been substantially involved 
in their development or marketing. Nothing in this subparagraph shall 
preclude the contractor from competing for follow-on contracts for 
advisory and assistance services.
    (ii) If, under this contract, the contractor prepares a complete or 
essentially complete statement of work or specifications to be used in 
competitive acquisitions, the contractor shall be ineligible to perform 
or participate in any capacity in any contractual effort which is based 
on such statement of work or specifications. The contractor shall not 
incorporate its products or services in such statement of work or 
specifications unless so directed in writing by the contracting officer, 
in which case the restriction in this subparagraph shall not apply.
    (iii) Nothing in this paragraph shall preclude the contractor from 
offering or selling its standard and commercial items to the Government.
    (2) Access to and use of information. (i) If the contractor, in the 
performance of this contract, obtains access to information, such as 
Department plans, policies, reports, studies, financial plans, internal 
data protected by the Privacy Act of 1974 (5 U.S.C. 552a), or data which 
has not been released or otherwise made available to the public, the 
contractor agrees that without prior written approval of the contracting 
officer it shall not:
    (A) use such information for any private purpose unless the 
information has been released or otherwise made available to the public;
    (B) compete for work for the Department based on such information 
for a period of six (6) months after either the completion of this 
contract or until such information is released or otherwise made 
available to the public, whichever is first;
    (C) submit an unsolicited proposal to the Government which is based 
on such information until one year after such information is released or 
otherwise made available to the public; and
    (D) release such information unless such information has previously 
been released or otherwise made available to the public by the 
Department.
    (ii) In addition, the contractor agrees that to the extent it 
receives or is given access to proprietary data, data protected by the 
Privacy Act of 1974 (5 U.S.C. 552a), or other confidential or privileged 
technical, business, or financial information under this contract, it 
shall treat such information in accordance with any restrictions imposed 
on such information.
    (iii) The contractor may use technical data it first produces under 
this contract for its private purposes consistent with paragraphs 
(b)(2)(i) (A) and (D) of this clause and the patent, rights in data, and 
security provisions of this contract.
    (c) Disclosure after award. (1) The contractor agrees that, if 
changes, including additions, to the facts disclosed by it prior to 
award of this contract, occur during the performance of this contract, 
it shall make an immediate and full disclosure of such changes in 
writing to the contracting officer. Such disclosure may include a 
description of any action which the contractor has taken or proposes to 
take to avoid, neutralize, or mitigate any resulting conflict of 
interest. The Department may, however, terminate the contract for 
convenience if it deems such termination to be in the best interest of 
the Government.
    (2) In the event that the contractor was aware of facts required to 
be disclosed or the existence of an actual or potential organizational 
conflict of interest and did not disclose such facts or such conflict of 
interest to the contracting officer, DOE may terminate this contract for 
default.
    (d) Remedies. For breach of any of the above restrictions or for 
nondisclosure or misrepresentation of any facts required to be disclosed 
concerning this contract, including the existence of an actual or 
potential organizational conflict of interest at the time of

[[Page 382]]

or after award, the Government may terminate the contract for default, 
disqualify the contractor from subsequent related contractual efforts, 
and pursue such other remedies as may be permitted by law or this 
contract.
    (e) Waiver. Requests for waiver under this clause shall be directed 
in writing to the contracting officer and shall include a full 
description of the requested waiver and the reasons in support thereof. 
If it is determined to be in the best interests of the Government, the 
contracting officer may grant such a waiver in writing.

                             (End of clause)

    Alternate I: In accordance with 909.507-2 and 970.0905, include the 
following alternate in the specified types of contracts.

    (f) Subcontracts. (1) The contractor shall include a clause, 
substantially similar to this clause, including this paragraph (f), in 
subcontracts expected to exceed the simplified acquisition threshold 
determined in accordance with FAR part 13 and involving the performance 
of advisory and assistance services as that term is defined at FAR 
37.201. The terms ``contract,'' ``contractor,'' and ``contracting 
officer'' shall be appropriately modified to preserve the Government's 
rights.
    (2) Prior to the award under this contract of any such subcontracts 
for advisory and assistance services, the contractor shall obtain from 
the proposed subcontractor or consultant the disclosure required by DEAR 
909.507-1, and shall determine in writing whether the interests 
disclosed present an actual or significant potential for an 
organizational conflict of interest. Where an actual or significant 
potential organizational conflict of interest is identified, the 
contractor shall take actions to avoid, neutralize, or mitigate the 
organizational conflict to the satisfaction of the contractor. If the 
conflict cannot be avoided or neutralized, the contractor must obtain 
the approval of the DOE contracting officer prior to entering into the 
subcontract.

                           (End of alternate)

[62 FR 40752, July 30, 1997]



952.211  Clauses related to contract delivery or performance.



952.211-70  Priorities and allocations for energy programs (solicitations).

    As prescribed in 911.604(a), insert the following provision in 
solicitations that will result in the award of a contract in support of 
DOE atomic energy programs.

          Priorities and Allocations (Atomic Energy) (JUN 1996)

    Contracts or purchase orders awarded as a result of this 
solicitation shall be assigned a [beta] [alpha] DO-Rating; [beta] 
[alpha] DX-Rating; and certified for national defense use in accordance 
with the Defense Priorities and Allocations System (DPAS) regulation (15 
CFR part 700) (Contracting officer check appropriate box.).

    Alternate I As prescribed in 911.604(d), insert the following 
provision in solicitations in support of a program or project which may 
be determined to maximize domestic energy supplies:

    Priorities and Allocations (Domestic Energy Supplies) (JUN 1996)

    Contracts or purchase orders awarded as a result of this 
solicitation may be eligible for priorities and allocations support in 
accordance with 10 CFR part 216 and section 101(c) of the Defense 
Production Act of 1950, as amended.

[52 FR 38425, Oct. 16, 1987, as amended at 59 FR 9109, Feb. 25, 1994. 
Redesignated and amended at 61 FR 21977, May 13, 1996; 61 FR 30823, June 
18, 1996]



952.211-71  Priorities and allocations for energy programs (contracts).

    As prescribed in 911.604(b), insert the following clause in 
contracts and purchase orders that are placed in support of authorized 
DOE atomic energy programs pursuant to the Atomic Energy Act of 1954, as 
amended.

          Priorities and Allocations (Atomic Energy) (JUN 1996)

    The Contractor shall follow the provisions of Defense Priorities and 
Allocations System (DPAS) regulation (15 CFR part 700) in obtaining 
controlled materials and other products and materials needed to fill 
this contract.

    Alternate I As prescribed in 911.604(e), insert the following clause 
in contracts if they are placed in support of programs or projects which 
may be determined to maximize domestic energy supplies:

    Priorities and Allocations (Domestic Energy Supplies) (JUN 1996)

    (a) This contract may be eligible for priorities and allocations 
support, as provided for by section 101(c) of the Defense Production Act 
of 1950, as amended by the Energy Policy and Conservation Act (Pub. L. 
94-163, 42 U.S.C. 6201 et seq.) if its purpose is determined to be to 
maximize domestic energy

[[Page 383]]

supplies. Eligibility is dependent on an executive decision on a case-
by-case basis with the decision being jointly made by the Departments of 
Energy and Commerce.
    (b) DOE regulations regarding material allocations and priority 
performance under contracts or orders to maximize domestic energy 
supplies can be found at part 216 of title 10 of the Code of Federal 
Regulations (10 CFR part 216).
    (c) Additional guidance is provided by DOE Publication MA-0192, 
``Priorities and Allocations Support for Energy: Keeping Energy Programs 
on Schedule,'' dated August 1985, as it may from time to time be 
revised. Copies may be obtained by written request to: Department of 
Energy, Office of Scientific and Technical Information (OSTI), Post 
Office Box 62, Oak Ridge, Tennessee 37830.

[52 FR 38426, Oct. 16, 1987, as amended at 59 FR 9109, Feb. 25, 1994. 
Redesignated and amended at 61 FR 21977, May 13, 1996; 61 FR 30823, June 
18, 1996]



952.211-72--952.211-73  [Reserved]



952.215-70  Key Personnel.

    As prescribed in 48 CFR 915.408-70, the contracting officer shall 
insert the following clause:

                        Key Personnel (DEC 2000)

    (a) The personnel listed below or elsewhere in this contract [Insert 
cross-reference, if applicable] are considered essential to the work 
being performed under this contract. Before removing, replacing, or 
diverting any of the listed or specified personnel, the Contractor must: 
(1) Notify the Contracting Officer reasonably in advance; (2) submit 
justification (including proposed substitutions) in sufficient detail to 
permit evaluation of the impact on this contract; and (3) obtain the 
Contracting Officer's written approval. Notwithstanding the foregoing, 
if the Contractor deems immediate removal or suspension of any member of 
its management team is necessary to fulfill its obligation to maintain 
satisfactory standards of employee competency, conduct, and integrity 
under the clause at 48 CFR 970.5203-3, Contractor's Organization, the 
Contractor may remove or suspend such person at once, although the 
Contractor must notify Contracting Officer prior to or concurrently with 
such action.
    (b) The list of personnel may, with the consent of the contracting 
parties, be amended from time to time during the course of the contract 
to add or delete personnel.

[Insert List of Key Personnel unless listed elsewhere in the contract]

                             (End of clause)

[65 FR 81008, Dec. 22, 2000]



952.216  Clauses related to types of contracts.



952.216-7  Allowable cost and payment.

    Alternate I: If the contract is with a nonprofit organization, other 
than an educational institution; or a State or local government, modify 
the clause at FAR 52.216-7 Allowable Cost and Payment by deleting from 
paragraph (a) the phrase ``Subpart 31.2'' and substituting for it 
``Subpart 31.7.''
    Alternate II: When contracting with a commercial organization modify 
paragraph (a) of the clause at FAR 52.216-7 by adding the phrase ``as 
supplemented by Subpart 931.2 of the Department of Energy Acquisition 
Regulations (DEAR),'' after the acronym ``(FAR)''.



952.216-15  Predetermined indirect cost rates.

    Alternate (APR 1994): As prescribed in 916.307(j), modify paragraph 
(c) of the clause at FAR 52.216-15, Predetermined Indirect Cost Rates, 
by deleting the words ``Subpart 31.3'' and substituting for them 
``Subpart 31.6'' and insert the clause in solicitations and contracts 
when a cost-reimbursement research and development contract with a State 
or local government is contemplated and predetermined indirect cost 
rates are to be used.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9109, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997]



952.217-70  Acquisition of real property.

    Insert the following clause when required by 917.7403.

                 Acquisition of Real Property (APR 1984)

    (a) Notwithstanding any other provision of the contract, the prior 
approval of the contracting officer shall be obtained when, in 
performance of this contract, the contractor acquires or proposes to 
acquire use of real property by:
    (1) Purchase, on the Government's behalf or in the contractor's own 
name, with title eventually vesting in the Government.
    (2) Lease, and the Government assumes liability for, or will 
otherwise pay for the obligation under the lease as a reimbursable 
contract cost.
    (3) Acquisition of temporary interest through easement, license or 
permit, and the Government funds the entire cost of the temporary 
interest.

[[Page 384]]

    (b) Justification of and execution of any real property acquisitions 
shall be in accordance and compliance with directions provided by the 
contracting officer.
    (c) The substance of this clause, including this paragraph (c), 
shall be included in any subcontract occasioned by this contract under 
which property described in paragraph (a) of this clause shall be 
acquired.

[49 FR 12042, Mar. 28, 1984, as amended at 67 FR 14872, Mar. 28, 2002]



952.219-70  DOE Mentor-Protege program.

    In accordance with 919.7014 insert the following provision in 
applicable solicitations.

                  DOE Mentor-Protege Program (May 2000)

    The Department of Energy has established a Mentor-Protege Program to 
encourage its prime contractors to assist firms certified under section 
8(a) of the Small Business Act by SBA, other small disadvantaged 
businesses, women-owned small businesses, Historically Black Colleges 
and Universities and Minority Institutions, other minority institutions 
of higher learning and small business concerns owned and controlled by 
service disabled veterans in enhancing their business abilities. If the 
contract resulting from this solicitation is awarded on a cost-plus-
award fee basis, the contractor's performance as a Mentor may be 
evaluated as part of the award fee plan. Mentor and Protege firms will 
develop and submit ``lessons learned'' evaluations to DOE at the 
conclusion of the contract. Any DOE contractor that is interested in 
becoming a Mentor should refer to the applicable regulations at 48 CFR 
919.70 and should contact the Department of Energy's Office of Small and 
Disadvantaged Business Utilization.

[65 FR 21371, Apr. 21, 2000]



952.223  Clauses related to environment, conservation, and occupational 
safety.



952.223-71  Integration of environment, safety, and health into work 
planning and execution.

    As prescribed in 923.7002 the clause set forth at 48 CFR 970.5223-1 
shall be included in all contracts and subcontracts for, and be made 
applicable to, work to be performed at a government-owned or leased 
facility where DOE has elected to assert its statutory authority to 
establish and enforce occupational safety and health standards 
applicable to the work conditions of contractor and subcontractor 
employees, and to the protection of the public health and safety.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9109, Feb. 25, 1994; 65 
FR 81008, Dec. 22, 2000]



952.223-72  Radiation protection and nuclear criticality.

    As prescribed in 923.7002 the clause set forth herein shall be 
included in those contracts or subcontracts for, and be made applicable 
to, work to be performed at a facility where DOE does not elect to 
assert its statutory authority to enforce occupational safety and health 
standards applicable to the working conditions of contractor and 
subcontractor employees, but does need to enforce radiological safety 
and health standards pursuant to provisions of the contract or 
subcontract rather than by reliance upon Nuclear Regulatory Commission 
licensing requirements (including agreements with states under section 
274 of the Atomic Energy Act).

         Radiation Protection and Nuclear Criticality (APR 1984)

    The contractor shall take all reasonable precautions in the 
performance of work under this contract to protect the safety and health 
of employees and of members of the public against the hazards of 
ionizing radiation and radioactive materials and shall comply with all 
applicable radiation protection and nuclear criticality safety standards 
and requirements (including reporting requirements) of DOE. The 
contractor shall submit a management program and implementation plan to 
the contracting officer for review and approval within 30 days after the 
effective date of this contract or modification. In the event that the 
contractor fails to comply with said standards and requirements of DOE, 
the contracting officer may, without prejudice to any other legal or 
contractual rights of DOE, issue an order stopping all or any part of 
the work. Thereafter, a start order for resumption of the work may be 
issued at the discretion of the contracting officer. The contractor 
shall make no claim for an extension of time or for compensation or 
damages by reason of or in connection with such work stoppage.

[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984, as amended at 59 
FR 9109, Feb. 25, 1994]

[[Page 385]]



952.223-73--952.223-74  [Reserved]



952.223-75  Preservation of individual occupational radiation exposure 
records.

    The contracting officer shall insert this clause in contracts 
containing 952.223-71, Integration of environment, safety, and health 
into work planning and execution, or 952.223-72, Radiation protection 
and nuclear criticality.

Preservation of Individual Occupational Radiation Exposure Records (APR 
                                  1984)

    Individual occupational radiation exposure records generated in the 
performance of work under this contract shall be subject to inspection 
by DOE and shall be preserved by the contractor until disposal is 
authorized by DOE or at the option of the contractor delivered to DOE 
upon completion or termination of the contract. If the contractor 
exercises the foregoing option, title to such records shall vest in DOE 
upon delivery.

[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984, as amended at 59 
FR 9109, Feb. 25, 1994; 62 FR 34862, June 27, 1997]



952.223-76  Conditional payment of fee or profit--safeguarding restricted 

data and other classified information and protection of worker safety and 
health.

    As prescribed at 48 CFR (DEAR) 923.7002(f), insert the following 
clause.

 Conditional Payment of Fee or Profit--Safeguarding Restricted Data and 
Other Classified Information and Protection of Worker Safety and Health 
                               (JAN 2004)

    (a) General. (1) The payment of fee or profit (i.e., award fee, 
fixed fee, and incentive fee or profit) under this contract is dependent 
upon the contractor's compliance with the terms and conditions of this 
contract relating to the safeguarding of Restricted Data and other 
classified information (i.e., Formerly Restricted Data and National 
Security Information) and relating to the protection of worker safety 
and health, including compliance with applicable law, regulation, and 
DOE directives. The term ``contractor'' as used in this clause to 
address failure to comply shall mean ``contractor or contractor 
employee.''
    (2) In addition to other remedies available to the Federal 
Government, if the contractor fails to comply with the terms and 
conditions of this contract relating to the safeguarding of Restricted 
Data and other classified information or relating to the protection of 
worker safety and health, the contracting officer may unilaterally 
reduce the amount of fee or profit that is otherwise payable to the 
contractor in accordance with the terms and conditions of this clause.
    (3) Any reduction in the amount of fee or profit earned by the 
contractor will be determined by the severity of the contractor's 
failure to comply with contract terms and conditions relating to the 
safeguarding of Restricted data or other classified information or 
relating to worker safety and health pursuant to the degrees specified 
in paragraphs (c) and (d) of this clause.
    (b) Reduction Amount. (1) If in any period (see 48 CFR 952.223-76 
(b)(2)) it is found that the contractor has failed to comply with 
contract terms and conditions relating to the safeguarding of Restricted 
Data or other classified information or relating to the protection of 
worker safety and health, the contractor's fee or profit of the period 
may be reduced. Such reduction shall not be less than 26 percent nor 
greater than 100 percent of the total fee or profit earned for a first 
degree performance failure, not less than 11 percent nor greater than 25 
percent for a second degree performance failure, and up to 10 percent 
for a third degree performance failure. The contracting officer must 
consider mitigating factors that may warrant a reduction below the 
specified range (see 48 CFR 904.402(c) and 48 CFR 923.7001(b)). The 
mitigating factors include, but are not limited to, the following ((v), 
(vi), (vii), and (viii) apply to WS&H only):
    (i) Degree of control the contractor had over the event or incident.
    (ii) Efforts the contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of: 
Safeguarding Restricted Data and other classified information and 
compliance in related security areas; or of protecting WS&H and 
compliance in related areas.
    (v) Contractor demonstration to the Contracting Officer's 
satisfaction that the principles of industrial WS&H standards are 
routinely practiced (e.g., Voluntary Protection Program Star Status).
    (vi) Event caused by ``Good Samaritan'' act by the contractor (e.g., 
offsite emergency response).
    (vii) Contractor demonstration that a performance measurement system 
is routinely used to improve and maintain WS&H performance (including 
effective resource allocation) and to support DOE corporate decision-
making (e.g., policy, WS&H programs).
    (viii) Contractor demonstration that an Operating Experience and 
Feedback Program

[[Page 386]]

is functioning that demonstrably affects continuous improvement in WS&H 
by use of lessons-learned and best practices inter- and intra-DOE sites.
    (2)(i) Except in the case of performance-based, firm-fixed-price 
contracts (see paragraph (b)(3) of this clause), the contracting 
officer, for purposes of this clause, will at the time of contract 
award, or as soon as practicable thereafter, allocate the total amount 
of fee or profit that is available under this contract to equal periods 
of [insert 6 or 12] months to run sequentially for the entire term of 
the contract (i.e., from the effective date of the contract to the 
expiration date of the contract, including all options). The amount of 
fee or profit to be allocated to each period shall be equal to the 
average monthly fee or profit that is available or otherwise payable 
during the entire term of the contract, multiplied by the number of 
months established above for each period.
    (ii) Under this clause, the total amount of fee or profit that is 
subject to reduction in a period in which a performance failure occurs, 
in combination with any reduction made under any other clause in the 
contract that provides for a reduction to the fee or profit, shall not 
exceed the amount of fee or profit that is earned by the contractor in 
the period established pursuant to paragraph (b)(2)(i) of this clause.
    (3) For performance-based firm-fixed-price contracts, the 
contracting officer will at the time of contract award include negative 
monetary incentives in the contract for contractor violations relating 
to the safeguarding of Restricted Data and other classified information 
and relating to protection of worker safety and health.
    (c) Safeguarding Restricted Data and Other Classified Information. 
Performance failures occur if the contractor does not comply with the 
terms and conditions of this contract relating to the safeguarding of 
Restricted Data and other classified information. The degrees of 
performance failures relating to the contractor's obligations under this 
contract for safeguarding of Restricted Data and other classified 
information are as follows:
    (1) First Degree: Performance failures that have been determined, in 
accordance with applicable law, regulation, or DOE directive, to have 
resulted in, or that can reasonably be expected to result in, 
exceptionally grave damage to the national security. The following are 
examples of performance failures or performance failures of similar 
import that will be considered first degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating a risk of, loss, 
compromise, or unauthorized disclosure of Top Secret Restricted Data or 
other information classified as Top Secret, any classification level of 
information in a Special Access Program (SAP), information identified as 
sensitive compartmented information (SCI), or high risk nuclear weapons-
related data.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data, or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Top Secret Restricted Data or other 
information classified as Top Secret, any classification level of 
information in a SAP, information identified as SCI, or high risk 
nuclear weapons-related data.
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data or other classified information classified as Top 
Secret, any classification level of information in a SAP, information 
identified as SCI, or high risk nuclear weapons-related data.
    (2) Second Degree: Performance failures that have been determined, 
in accordance with applicable law, regulation, or DOE directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
serious damage to the national security. The following are examples of 
performance failures or performance failures of similar import that will 
be considered second degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Secret Restricted Data or other 
information classified as Secret.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data, or other information classified as Secret.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Restricted Data or other classified 
information regardless of classification (except for information covered 
by paragraph (c)(1)(iii) of this clause).
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data or other information classified as Secret.
    (3) Third Degree: Performance failures that have been determined, in 
accordance with applicable law, regulation, or DOE directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
undue risk to the common defense and security. In addition, this 
category includes performance

[[Page 387]]

failures that result from a lack of contractor management and/or 
employee attention to the proper safeguarding of Restricted Data and 
other classified information. These performance failures may be 
indicators of future, more severe performance failures and/or 
conditions, and if identified and corrected early would prevent serious 
incidents. The following are examples of performance failures or 
performance failures of similar import will be considered third degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Restricted Data or other information 
classified as Confidential.
    (ii) Failure to promptly report alleged or suspected violations of 
laws, regulations, or directives pertaining to the safeguarding of 
Restricted Data or other classified information.
    (iii) Failure to identify or timely execute corrective actions to 
mitigate or eliminate identified vulnerabilities and reduce residual 
risk relating to the protection of Restricted Data or other classified 
information in accordance with the contractor's Safeguards and Security 
Plan or other security plan, as applicable.
    (iv) Contractor actions that result in performance failures which 
unto themselves pose minor risk, but when viewed in the aggregate 
indicate degradation in the integrity of the contractor's safeguards and 
security management system relating to the protection of Restricted Data 
and other classified information.
    (d) Protection of Worker Safety and Health. Performance failures 
occur if the contractor does not comply with the contract's WS&H terms 
and conditions, which may be included in the DOE approved contractor 
Integrated Safety Management System (ISMS). The degrees of performance 
failure under which reductions of fee or profit will be determined are:
    (1) First Degree: Performance failures that are most adverse to WS&H 
or could threaten the successful completion of a program or project. For 
contracts including ISMS requirements, failure to develop and obtain 
required DOE approval of WS&H aspects of an ISMS is considered first 
degree. The Government will perform necessary review of the ISMS in a 
timely manner and will not unreasonably withhold approval of the WS&H 
aspects of the contractor's ISMS. The following performance failures or 
performance failures of similar import will be deemed first degree:
    (i) Type A accident (defined in DOE Order 225.1A).
    (ii) Two Second Degree performance failures during an evaluation 
period.
    (2) Second Degree: Performance failures that are significantly 
adverse to WS&H. They include failures to comply with approved WS&H 
aspects of an ISMS that result in an actual injury, exposure, or 
exceedence that occurred or nearly occurred but had minor practical 
long-term health consequences. The following performance failures or 
performance failures of similar import will be considered second degree:
    (i) Type B accident (defined in DOE Order 225.1A).
    (ii) Non-compliance with approved WS&H aspects of an ISMS that 
results in a near miss of a Type A or B accident. A near miss is a 
situation in which an inappropriate action occurs, or a necessary action 
is omitted, but does not result in an adverse effect.
    (iii) Failure to mitigate or notify DOE of an imminent danger 
situation after discovery, where such notification is a requirement of 
the contract.
    (3) Third Degree: Performance failures that reflect a lack of focus 
on improving WS&H. They include failures to comply with approved WS&H 
aspects of an ISMS that result in potential breakdown of the 
contractor's WS&H system. The following performance failures or 
performance failures of similar import will be considered third degree:
    (i) Failure to implement effective corrective actions to address 
deficiencies/non-compliance documented through external (e.g., Federal) 
oversight and/or reported per DOE Order 232.1A requirements, or internal 
oversight of DOE O 440.1A requirements.
    (ii) Multiple similar non-compliances identified by external (e.g., 
Federal) oversight that in aggregate indicate a significant WS&H system 
breakdown.
    (iii) Non-compliances that either have, or may have, significant 
negative impacts to workers that indicate a significant WS&H system 
breakdown.
    (iv) Failure to notify DOE upon discovery of events or conditions 
where notification is required by the terms and conditions of the 
contract.

                             (End of clause)

[68 FR 68778, Dec. 10, 2003]



952.223-77  Conditional payment of fee or profit--protection of worker 
safety and health.

    As prescribed at 48 CFR (DEAR) 923.7002(g), insert the following 
clause.

 Conditional Payment of Fee or Profit--Protection of Worker Safety and 
                            Health (JAN 2004)

    (a) General. (1) The payment of fee or profit (i.e., award fee, 
fixed fee, and incentive fee or profit) under this contract is dependent 
upon the contractor's compliance with the

[[Page 388]]

terms and conditions of this contract relating to the protection of 
worker safety and health (WS&H), including compliance with applicable 
law, regulation, and DOE directives. The term ``contractor'' as used in 
this clause to address failure to comply shall mean ``contractor or 
contractor employee.''
    (2) In addition to other remedies available to the Federal 
Government, if the contractor fails to comply with the terms and 
conditions of this contract relating to the protection of worker safety 
and health, the contracting officer may unilaterally reduce the amount 
of fee or profit that is otherwise payable to the contractor in 
accordance with the terms and conditions of this clause.
    (3) Any reduction in the amount of fee or profit earned by the 
contractor will be determined by the severity of the contractor's 
failure to comply with contract terms and conditions relating to worker 
safety and health pursuant to the degrees specified in paragraph (c) of 
this clause.
    (b) Reduction Amount. (1) If in any period (see 48 CFR 952.223-77 
(b)(2)) it is found that the contractor has failed to comply with 
contract terms and conditions relating to the protection of worker 
safety and health, the contractor's fee or profit of the period may be 
reduced. Such reduction shall not be less than 26% nor greater than 100% 
of the total fee or profit earned for a first degree performance 
failure, not less than 11% nor greater than 25% for a second degree 
performance failure, and up to 10% for a third degree performance 
failure. The contracting officer must consider mitigating factors that 
may warrant a reduction below the specified range (see 48 CFR 
923.7001(b)). The mitigating factors include, but are not limited to, 
the following:
    (i) Degree of control the contractor had over the event or incident.
    (ii) Efforts the contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of protecting 
WS&H and compliance in related areas.
    (v) Contractor demonstration to the Contracting Officer's 
satisfaction that the principles of industrial WS&H standards are 
routinely practiced (e.g., Voluntary Protection Program Star Status).
    (vi) Event caused by ``Good Samaritan'' act by the contractor (e.g., 
offsite emergency response).
    (vii) Contractor demonstration that a performance measurement system 
is routinely used to improve and maintain WS&H performance (including 
effective resource allocation) and to support DOE corporate decision-
making (e.g., policy, WS&H programs).
    (viii) Contractor demonstration that an Operating Experience and 
Feedback Program is functioning that demonstrably affects continuous 
improvement in WS&H by use of lessons-learned and best practices inter- 
and intra-DOE sites.
    (2)(i) Except in the case of performance based firm-fixed-price 
contracts (see paragraph (b)(3) below), the contracting officer, for 
purposes of this clause, will at the time of contract award, or as soon 
as practicable thereafter, allocate the total amount of fee or profit 
that is available under this contract to equal periods of [insert 6 or 
12] months to run sequentially for the entire term of the contract 
(i.e., from the effective date of the contract to the expiration date of 
the contract, including all options). The amount of fee or profit to be 
allocated to each period shall be equal to the average monthly fee or 
profit that is available or otherwise payable during the entire term of 
the contract, multiplied by the number of months established above for 
each period.
    (ii) Under this clause, the total amount of fee or profit that is 
subject to reduction in a period in which a performance failure occurs, 
in combination with any reduction made under any other clause in the 
contract that provides for a reduction to the fee or profit, shall not 
exceed the amount of fee or profit that is earned by the contractor in 
the period established pursuant to paragraph (b)(2)(i) of this clause.
    (3) For performance-based firm-fixed-price contracts, the 
contracting officer will at the time of contract award include negative 
monetary incentives in the contract for contractor violations relating 
to the protection of worker safety and health.
    (c) Protection of Worker Safety and Health. Performance failures 
occur if the contractor does not comply with the contract's WS&H terms 
and conditions, which may be included in the DOE approved contractor 
Integrated Safety Management System (ISMS). The degrees of performance 
failure under which reductions of fee or profit will be determined are:
    (1) First Degree: Performance failures that are most adverse to WS&H 
or could threaten the successful completion of a program or project. For 
contracts including ISMS requirements, failure to develop and obtain 
required DOE approval of WS&H aspects of an ISMS is considered first 
degree. The Government will perform necessary review of the ISMS in a 
timely manner and will not unreasonably withhold approval of the WS&H 
aspects of the contractor's ISMS. The following performance failures or 
performance failures of similar import will be deemed first degree:
    (i) Type A accident (defined in DOE Order 225.1A).
    (ii) Two Second Degree performance failures during an evaluation 
period.

[[Page 389]]

    (2) Second Degree: Performance failures that are significantly 
adverse to WS&H. They include failures to comply with approved WS&H 
aspects of an ISMS that result in an actual injury, exposure, or 
exceedence that occurred or nearly occurred but had minor practical 
long-term health consequences. The following performance failures or 
performance failures of similar import will be considered second degree:
    (i) Type B accident (defined in DOE Order 225.1A).
    (ii) Non-compliance with approved WS&H aspects of an ISMS that 
results in a near miss of a Type A or B accident. A near miss is a 
situation in which an inappropriate action occurs, or a necessary action 
is omitted, but does not result in an adverse effect.
    (iii) Failure to mitigate or notify DOE of an imminent danger 
situation after discovery, where such notification is a requirement of 
the contract.
    (3) Third Degree: Performance failures that reflect a lack of focus 
on improving WS&H. They include failures to comply with approved WS&H 
aspects of an ISMS that result in potential breakdown of the 
contractor's WS&H system. The following performance failures or 
performance failures of similar import will be considered third degree:
    (i) Failure to implement effective corrective actions to address 
deficiencies/non-compliance documented through external (e.g., Federal) 
oversight and/or reported per DOE Order 232.1A requirements, or internal 
oversight of DOE O 440.1A requirements.
    (ii) Multiple similar non-compliances identified by external (e.g., 
Federal) oversight that in aggregate indicate a significant WS&H system 
breakdown.
    (iii) Non-compliances that either have, or may have, significant 
negative impacts to workers that indicate a significant WS&H system 
breakdown.
    (iv) Failure to notify DOE upon discovery of events or conditions 
where notification is required by the terms and conditions of the 
contract.

                             (End of clause)

[69 FR 68780, Dec. 10, 2004]



952.224-70  Paperwork Reduction Act.

    Insert the following clause if it is anticipated that information 
collection from 10 or more persons will be necessary under the contract.

                   Paperwork Reduction Act (APR 1994)

    (a) In the event that it subsequently becomes a contractual 
requirement to collect or record information calling either for answer 
to identical questions from 10 or more persons other than Federal 
employees, or information from Federal employees which is to be used for 
statistical compilations of general public interest, the Paperwork 
Reduction Act will apply to this contract. No plan, questionnaire, 
interview guide, or other similar device for collecting information 
(whether repetitive or single-time) may be used without first obtaining 
clearance from the Office of Management and Budget (OMB).
    (b) The contractor shall request the required OMB clearance from the 
contracting officer before expending any funds or making public contacts 
for the collection of data. The authority to expend funds and to proceed 
with the collection of data shall be in writing by the contracting 
officer. The contractor must plan at least 90 days for OMB clearance. 
Excessive delay caused by the Government which arises out of causes 
beyond the control and without the fault or negligence of the contractor 
will be considered in accordance with the clause entitled ``Excusable 
Delays,'' if such clause is applicable. If not, the period of 
performance may be extended pursuant to this clause if approved by the 
contracting officer.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9109, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997]



952.225-70  Subcontracting for nuclear hot cell services.

    As prescribed in 925.7004, insert the following clause in 
solicitations and contracts.

         Subcontracting for Nuclear Hot Cell Services (MAR 1993)

    (a) Definitions.
    Costs related to the decommissioning of nuclear facilities, as used 
in this clause, means any cost associated with the compliance with 
regulatory requirements governing the decommissioning of nuclear 
facilities licensed by the Nuclear Regulatory Commission. Such costs for 
foreign facilities and for Department of Energy facilities are costs of 
decommissioning associated with the compliance with foreign regulatory 
requirements or the Department's own requirements.
    Costs related to the storage and disposal of nuclear waste, as used 
in this clause, means any costs, whether required by regulation or 
incurred as a matter of prudent business practice, associated with the 
storage or disposal of nuclear waste.
    Foreign company, as used in this clause, means a company which 
offers to perform nuclear hot cell services at a facility which is not 
subject to the laws and regulations of the United States, its agencies, 
and its political subdivisions.

[[Page 390]]

    Nuclear hot cell services, as used in this clause, means services 
related to the examination of, or performance of various operations on, 
nuclear fuel rods, control assemblies, or other components that are 
emitting large quantities of ionizing radiation, after discharge from 
nuclear reactors, which are performed in specialized facilities located 
away from commercial nuclear power plants, generally referred to in the 
industry as ``hot cells.''
    Nuclear waste, as used in this clause, means any radioactive waste 
material subject to regulation by the Nuclear Regulatory Commission or 
the Department of Energy, or in the case of foreign offers, by 
comparable foreign organizations.
    United States company, as used in this clause, means a company which 
offers to perform nuclear hot cell services at a facility subject to the 
laws and regulations of the United States, its agencies, and its 
political subdivisions.
    (b) In selecting a competitive offer for a first-tier subcontract 
acquisition of nuclear hot cell services, the contractor shall (1) 
consider neither costs related to the decommissioning of nuclear waste 
facilities nor costs related to the storage and disposal of nuclear 
waste, or (2) add these costs to offers of foreign companies, if--
    (i) one or more of the offers is submitted by a United States 
company and includes costs related to the decommissioning of nuclear 
facilities and costs related to the storage and disposal of nuclear 
waste because it is subject to such cost; and
    (ii) one or more of the offers is submitted by a foreign company and 
does not include these types of costs. (A foreign company might not be 
subject to such costs or might not have to include these types of cost 
in its offer if the firm is subsidized in decommissioning activity or 
storage and disposal of nuclear waste, or a foreign government is 
performing the activities below the actual cost of the activity.)
    (c) Upon determining that no offer from a foreign firm has a 
reasonable chance of being selected for award, the requirements of this 
clause will not apply.

[58 FR 8911, Feb. 18, 1993; 58 FR 39679, July 26, 1993]



952.226-70  Subcontracting goals under section 3021(a) of the Energy 
Policy Act of 1992.

    As prescribed in 926.7007(a), insert the following provision:

 Subcontracting Goals Under Section 3021(a) of the Energy Policy Act of 
                    1992 (Pub. L. 102-486) (JUN 1996)

    (a) Definition. Energy Policy Act target groups, as used in this 
provision means:
    (1) An institution of higher education that meets the criteria of 34 
CFR 600.4(a) and has a student enrollment that consists of at least 20 
percent:
    (i) Hispanic Americans, i.e., students whose origins are in Mexico, 
Puerto Rico, Cuba, or Central or South America, or any combination 
thereof, or
    (ii) Native Americans, i.e., American Indians, Eskimos, Aleuts, and 
Native Hawaiians, or any combination thereof;
    (2) Institutions of higher learning determined by the Secretary of 
Education to be Historically Black Colleges and Universities pursuant to 
34 CFR 608.2; and
    (3) Small business concerns, as defined under section 3 of the Small 
Business Act (15 U.S.C. 632), that are owned and controlled by 
individuals who are both socially and economically disadvantaged within 
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
or by a woman or women.
    (b) Section 3021 of the Energy Policy Act (Pub. L. 102-486) 
establishes a goal of award of 10 percent of the contract dollar value 
for prime and subcontract Energy Policy Act awards to Energy Policy Act 
target groups.
    (c) The offeror, if other than one of the three groups specified in 
paragraph (a) of this clause, shall submit, as part of its business 
management proposal or, if this solicitation requires the submission of 
a Small, Small Disadvantaged and Women-Owned Subcontracting Plan, then 
as part of that plan, unless otherwise stated in the proposal 
preparation instructions, individual subcontracting goals for each of 
the three Energy Policy Act target groups. Individual goals shall be 
expressed in terms of a percentage of the offeror's proposed contract 
dollar value. In addition, the offeror shall provide a description of 
the nature of the effort to be performed by each of the three groups, 
and, if possible, the identity of the contemplated subcontractor(s).
    (d) Unless otherwise stated, such goals shall be considered in the 
evaluation of the Business Management Proposal as discussed in Section M 
of this solicitation or, if applicable, as part of the evaluation of the 
Small, Small Disadvantaged and Women-Owned Subcontracting Plan.

                           (End of provision)

[60 FR 22301, May 5, 1995, as amended at 61 FR 21977, May 13, 1996; 61 
FR 30823, June 18, 1996]



952.226-71  Utilization of Energy Policy Act target entities.

    As prescribed in 926.7007(b), insert the following clause:

[[Page 391]]

       Utilization of Energy Policy Act Target Entities (JUN 1996)

    (a) Definition.--Energy Policy Act target groups, as used in this 
provision means:
    (1) An institution of higher education that meets the requirements 
of 34 CFR 600.4(a) and has a student enrollment that consists of at 
least 20 percent:
    (i) Hispanic Americans, i.e., students whose origins are in Mexico, 
Puerto Rico, Cuba, or Central or South America, or any combination 
thereof, or
    (ii) Native Americans, i.e., American Indians, Eskimos, Aleuts, and 
Native Hawaiians, or any combination thereof;
    (2) Institutions of higher learning determined to be Historically 
Black Colleges and Universities by the Secretary of Education pursuant 
to 34 CFR 608.2; and
    (3) Small business concerns, as defined under section 3 of the Small 
Business Act (15 U.S.C. 632), that are owned and controlled by 
individuals who are both socially and economically disadvantaged within 
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
or by a woman or women.
    (b) Obligation. In addition to its obligations under the clause of 
this contract entitled Utilization of Small Business, Small 
Disadvantaged and Women-Owned Small Business Concerns, the contractor, 
in performance of this contract, agrees to provide its best efforts to 
competitively award subcontracts to entities from among the Energy 
Policy Act target groups.

                             (End of clause)

[60 FR 22301, May 5, 1995, as amended at 61 FR 21977, May 13, 1996; 61 
FR 30823, June 18, 1996]



952.226-72  Energy Policy Act subcontracting goals and reporting requirements.

    As prescribed in 926.7007(c), insert the following clause:

 Energy Policy Act Subcontracting Goals and Reporting Requirements (JUN 
                                  1996)

    (a) Definition. Energy Policy Act target groups, as used in this 
provision means:
    (1) An institution of higher education that meets the requirements 
of 34 CFR 600.4(a), and has a student enrollment that consists of at 
least 20 percent:
    (i) Hispanic Americans, i.e., students whose origins are in Mexico, 
Puerto Rico, Cuba, or Central or South America, or any combination 
thereof, or
    (ii) Native Americans, i.e., American Indians, Eskimos, Aleuts, and 
Native Hawaiians, or any combination thereof;
    (2) Institutions of higher learning determined to be Historically 
Black Colleges and Universities by the Secretary of Education pursuant 
to 34 CFR 608.2; and
    (3) Small business concerns, as defined under section 3 of the Small 
Business Act (15 U.S.C. 632), that are owned and controlled by 
individuals who are both socially and economically disadvantaged within 
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
or by a woman or women.
    (b) Goals. The contractor, in performance of this contract, agrees 
to provide its best efforts to award subcontracts to the following 
classes of entities:
    (1) Small business concerns controlled by socially and economically 
disadvantaged individuals or by women: * * * percent;
    (2) Historically Black colleges and universities: * * * percent;
    (3) Colleges or universities having a student body in which more 
than 20 percent of the students are Hispanic Americans or Native 
Americans: * * * percent.
    [* * * These goals are stated in a percentage reflecting the 
relationship of estimated award value of subcontracts to the value of 
this contract and appear elsewhere in this contract.]
    (c) Reporting requirements. (1) The contractor agrees to report, on 
an annual Federal Government fiscal year basis, its progress against the 
goals by providing the actual annual dollar value of subcontract 
payments for the preceding 12-month period, and the relationship of 
those payments to the incurred contract costs for the same period. 
Reports submitted pursuant to this clause must be received by the 
contracting officer (or designee) not later than 45 days after the end 
of the reporting period.
    (2) If the contract includes reporting requirements under FAR 
52.219-9, Small, Small Disadvantaged and Women-Owned Subcontracting 
Plan, the contractor's progress against the goals stated in paragraph 
(b) of this clause shall be included as an addendum to Standard Form 
(SF) 294, Subcontracting Report for Individual Contracts, and/or SF 295, 
Summary Subcontract Report, as applicable, for the period that 
corresponds to the end of the Federal Government fiscal year.

                             (End of clause)

[60 FR 22302, May 5, 1995, as amended at 61 FR 21977, May 13, 1996; 61 
FR 30823, June 18, 1996]



952.226-73  Energy Policy Act target group certification.

    As prescribed in 926.7007(d), insert the following provision:

         Energy Policy Act Target Group Certification (SEP 1997)

    (a) Certification. The offeror is:

[[Page 392]]

    (1) ---- An institution of higher education that meets the 
requirements of 34 CFR 600.4(a), and has a student enrollment that 
consists of at least 20 percent:
    (i) Hispanic Americans, i.e., students whose origins are in Mexico, 
Puerto Rico, Cuba, or Central or South America, or any combination 
thereof, or
    (ii) Native Americans, i.e., American Indians, Eskimos, Aleuts, and 
Native Hawaiians, or any combination thereof;
    (2) ---- An institution of higher learning determined to be a 
Historically Black College and University by the Secretary of Education 
pursuant to 34 CFR 608.2; or
    (3) ---- A small business concern, as defined under section 3 of the 
Small Business Act (15 U.S.C. 632), that is owned and controlled by 
individuals who are both socially and economically disadvantaged within 
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
or by a woman or women.
    (b) By submission of an offer, the offeror agrees to provide to the 
Contracting Officer, upon request, evidence satisfactory to the 
contracting officer that the offeror is an entity from the Energy Policy 
Act target group identified.

                           (End of provision)

[60 FR 22302, May 5, 1995; 61 FR 30823, June 18, 1996, as amended at 62 
FR 42074, Aug. 5, 1997]



952.226-74  Displaced employee hiring preference.

    As prescribed in 48 CFR (DEAR) 926.7104, insert the following 
clause.

             Displaced Employee Hiring Preference (JUN 1997)

    (a) Definition.
    Eligible employee means a current or former employee of a contractor 
or subcontractor employed at a Department of Energy Defense Nuclear 
Facility (1) whose position of employment has been, or will be, 
involuntarily terminated (except if terminated for cause), (2) who has 
also met the eligibility criteria contained in the Department of Energy 
guidance for contractor work force restructuring, as may be amended or 
supplemented from time to time, and (3) who is qualified for a 
particular job vacancy with the Department or one of its contractors 
with respect to work under its contract with the Department at the time 
the particular position is available.
    (b) Consistent with Department of Energy guidance for contractor 
work force restructuring, as may be amended or supplemented from time to 
time, the contractor agrees that it will provide a preference in hiring 
to an eligible employee to the extent practicable for work performed 
under this contract.
    (c) The requirements of this clause shall be included in 
subcontracts at any tier (except for subcontracts for commercial items 
pursuant to 41 U.S.C. 403) expected to exceed $500,000.

[62 FR 34862, June 27, 1997]



952.227  Provisions and clauses related to patents, technical data and 
copyrights.



952.227-9  Refund of royalties.

    As prescribed in 927.206-2, insert the following clause:

                     Refund of Royalties (MAR 1995)

    (a) The contract price includes certain amounts for royalties 
payable by the Contractor or subcontractors or both, which amounts have 
been reported to the Contracting Officer.
    (b) The term royalties as used in this clause refers to any costs or 
charges in the nature of royalties, license fees, patent or license 
amortization costs, or the like, for the use of or for rights in patents 
and patent applications in connection with performing this contract or 
any subcontract here-under. The term also includes any costs or charges 
associated with the access to, use of, or other right pertaining to data 
that is represented to be proprietary and is related to the performance 
of this contract or the copying of such data or data that is 
copyrighted.
    (c) The Contractor shall furnish to the Contracting Officer, before 
final payment under this contract, a statement of royalties paid or 
required to be paid in connection with performing this contract and 
subcontracts hereunder together with the reasons.
    (d) The Contractor will be compensated for royalties reported under 
paragraph (c) of this clause, only to the extent that such royalties 
were included in the contract price and are determined by the 
Contracting Officer to be properly chargeable to the Government and 
allocable to the contract. To the extent that any royalties that are 
included in the contract price are not, in fact, paid by the Contractor 
or are determined by the Contracting Officer not to be properly 
chargeable to the government and allocable to the contract, the contract 
price shall be reduced. Repayment or credit to the Government shall be 
made as the Contracting Officer directs. The approval by DOE of any 
individual payments or royalties shall not prevent the Government from 
contesting at any time the enforceability, validity, scope of, or title 
to, any patent or the proprietary nature of data pursuant to which a 
royalty or other payment is to be or has been made.

[[Page 393]]

    (e) If, at any time within 3 years after final payment under this 
contract, the Contractor for any reason is relieved in whole or in part 
from the payment of the royalties included in the final contract price 
as adjusted pursuant to paragraph (d) of this clause, the Contractor 
shall promptly notify the Contracting Officer of that fact and shall 
reimburse the Government in a corresponding amount.
    (f) The substance of this clause, including this paragraph (f), 
shall be included in any subcontract in which the amount of royalties 
reported during negotiation of the subcontract exceeds $250.

                             (End of clause)

[60 FR 11817, Mar. 2, 1995]



952.227-11  Patent rights--retention by the contractor (short form).

    As prescribed in 927.303(a), insert the following clause:

   Patent Rights--Retention by the Contractor (Short Form) (MAR 1995)

    (a) Definitions.
    (1) Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    (2) Made when used in relation to any invention means the conception 
of first actual reduction to practice of such invention.
    (3) Nonprofit organization means a university or other institution 
of higher education or an organization of the type described in section 
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and 
exempt from taxation under section 501(a) of the Internal Revenue Code 
(26 U.S.C. 501(a)) or any nonprofit scientific or educational 
organization qualified under a state nonprofit organization statute.
    (4) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or method; 
or to operate, in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    (5) Small business firm means a small business concern as defined at 
section 2 of Public Law 85-536 (15 U.S.C. 632) and implementing 
regulations of the Administrator of the Small Business Administration. 
For the purpose of this clause, the size standards for small business 
concerns involved in Government procurement and subcontracting at 13 CFR 
121.3-8 and 13 CFR 121.3-12, respectively, will be used.
    (6) Subject invention means any invention of the contractor 
conceived or first actually reduced to practice in the performance of 
work under this contract, provided that in the case of a variety of 
plant, the date of determination (as defined in section 41(d) of the 
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during 
the period of contract performance.
    (7) Agency licensing regulations and agency regulations concerning 
the licensing of Government-owned inventions mean the Department of 
Energy patent licensing regulations at 10 CFR part 781.
    (b) Allocation of principal rights. The Contractor may retain the 
entire right, title, and interest throughout the world to each subject 
invention subject to the provisions of this clause and 35 U.S.C. 203. 
With respect to any subject invention in which the Contractor retains 
title, the Federal Government shall have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the United States the subject invention 
throughout the world.
    (c) Invention disclosure, election of title, and filing of patent 
application by Contractor. (1) The Contractor will disclose each subject 
invention to the Department of Energy (DOE) within 2 months after the 
inventor discloses it in writing to Contractor personnel responsible for 
patent matters. The disclosure to DOE shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s). It shall be sufficiently complete in technical 
detail to convey a clear understanding to the extent known at the time 
of the disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale or public use of 
the invention and whether a manuscript describing the invention has been 
submitted for publication and, if so, whether it has been accepted for 
publication at the time of disclosure. In addition, after disclosure to 
the DOE, the Contractor will promptly notify that agency of the 
acceptance of any manuscript describing the invention for publication or 
of any on sale or public use planned by the Contractor.
    (2) The Contractor will elect in writing whether or not to retain 
title to any such invention by notifying DOE within 2 years of 
disclosure to DOE. However, in any case where publication, on sale or 
public use has initiated the l-year statutory period wherein valid 
patent protection can still be obtained in the United States, the period 
for election of title may be shortened by DOE to a date that is no more 
than 60 days prior to the end of the statutory period.

[[Page 394]]

    (3) The Contractor will file its initial patent application on a 
subject invention to which it elects to retain title within 1 year after 
election of title or, if earlier, prior to the end of any statutory 
period wherein valid patent protection can be obtained in the United 
States after a publication, on sale, or public use. The Contractor will 
file patent applications in additional countries or international patent 
offices within either 10 months of the corresponding initial patent 
application or 6 months from the date permission is granted by the 
Commissioner of Patents and Trademarks to file foreign patent 
applications where such filing has been prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure, election, and 
filing under subparagraphs (c)(l), (2), and (3) of this clause may, at 
the discretion of the agency, be granted.
    (d) Conditions when the Government may obtain title. The Contractor 
will convey to the Federal agency, upon written request, title to any 
subject invention--
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of this 
clause, or elects not to retain title; provided, that DOE may only 
request title within 60 days after learning of the failure of the 
Contractor to disclose or elect within the specified times.
    (2) In those countries in which the Contractor fails to file patent 
applications within the times specified in paragraph (c) of this clause; 
provided, however, that if the Contractor has filed a patent application 
in a country after the times specified in paragraph (c) of this clause, 
but prior to its receipt of the written request of the Federal agency, 
the Contractor shall continue to retain title in that country.
    (3) In any country in which the Contractor decides not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend in reexamination or opposition proceeding on, a patent on a 
subject invention.
    (e) Minimum rights to Contractor and protection of the Contractor 
right to file. (1) The Contractor will retain a nonexclusive royalty-
free license throughout the world in each subject invention to which the 
Government obtains title, except if the Contractor fails to disclose the 
invention within the times specified in paragraph (c) of this clause. 
The Contractor's license extends to its domestic subsidiary and 
affiliates, if any, within the corporate structure of which the 
Contractor is a party and includes the right to grant sublicenses of the 
same scope to the extent the Contractor was legally obligated to do so 
at the time the contract was awarded. The license is transferable only 
with the approval of the Federal agency, except when transferred to the 
successor of that part of the Contractor's business to which the 
invention pertains.
    (2) The Contractor's domestic license may be revoked or modified by 
DOE to the extent necessary to achieve expeditious practical application 
of subject invention pursuant to an application for an exclusive license 
submitted in accordance with applicable provisions at 37 CFR part 404 
and agency licensing regulations. This license will not be revoked in 
that field of use or the geographical areas in which the Contractor has 
achieved practical application and continues to make the benefits of the 
invention reasonably accessible to the public. The license in any 
foreign country may be revoked or modified at the discretion of DOE to 
the extent the Contractor, its licensees, or the domestic subsidiaries 
or affiliates have failed to achieve practical application in that 
foreign country.
    (3) Before revocation or modification of the license, DOE will 
furnish the Contractor a written notice of its intention to revoke or 
modify the license, and the Contractor will be allowed 30 days (or such 
other time as may be authorized by DOE for good cause shown by the 
Contractor) after the notice to show cause why the license should not be 
revoked or modified. The Contractor has the right to appeal, in 
accordance with applicable regulations in 37 CFR part 404 and agency 
regulations concerning the licensing of Government owned inventions, any 
decision concerning the revocation or modification of the license.
    (f) Contractor action to protect the Government's interest. (1) The 
Contractor agrees to execute or to have executed and promptly deliver to 
DOE all instruments necessary to (i) establish or confirm the rights the 
Government has throughout the world in those subject inventions to which 
the Contractor elects to retain title, and (ii) convey title to DOE when 
requested under paragraph (d) of this clause and to enable the 
government to obtain patent protection throughout the world in that 
subject invention.
    (2) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor each subject invention made under contract in order that the 
Contractor can comply with the disclosure provisions of paragraph (c) of 
this clause, and to execute all papers necessary to file patent 
applications on subject inventions and to establish the Government's 
rights in the subject inventions. This disclosure format should require, 
as a minimum, the information required by subparagraph (c)(1) of this 
clause. The Contractor shall instruct

[[Page 395]]

such employees, through employee agreements or other suitable 
educational programs, on the importance of reporting inventions in 
sufficient time to permit the filing of patent applications prior to 
U.S. or foreign statutory bars.
    (3) The Contractor will notify DOE of any decision not to continue 
the prosecution of a patent application, pay maintenance fees, or defend 
in a reexamination or opposition proceeding on a patent, in any country, 
not less than 30 days before the expiration of the response period 
required by the relevant patent office.
    (4) The Contractor agrees to include, within the specification of 
any United States patent application and any patent issuing thereon 
covering a subject invention, the following statement, ``This invention 
was made with Government support under (identify the contract) awarded 
by the United States Department of Energy. The Government has certain 
rights in the invention.''
    (g) Subcontracts. (1) The Contractor will include this clause, 
suitably modified to identify the parties, in all subcontracts, 
regardless of tier, for experimental, developmental, or research work to 
be performed by a small business firm or domestic nonprofit 
organization. The subcontractor will retain all rights provided for the 
Contractor in this clause, and the Contractor will not, as part of the 
consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (2) The contractor shall include in all other subcontracts, 
regardless of tier, for experimental, developmental, demonstration, or 
research work the patent rights clause at 952.227-13.
    (3) In the case of subcontracts, at any tier, DOE, subcontractor, 
and the Contractor agree that the mutual obligations of the parties 
created by this clause constitute a contract between the subcontractor 
and DOE with respect to the matters covered by the clause; provided, 
however, that nothing in this paragraph is intended to confer any 
jurisdiction under the Contract Disputes Act in connection with 
proceedings under paragraph (j) of this clause.
    (h) Reporting on utilization of subject inventions. The Contractor 
agrees to submit, on request, periodic reports no more frequently than 
annually on the utilization of a subject invention or on efforts at 
obtaining such utilization that are being made by the Contractor or its 
licensees or assignees. Such reports shall include information regarding 
the status of development, date of first commercial sale or use, gross 
royalties received, by the Contractor, and such other data and 
information as DOE may reasonably specify. The Contractor also agrees to 
provide additional reports as may be requested by DOE in connection with 
any march-in proceeding undertaken by that agency in accordance with 
paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE 
agrees it will not disclose such information to persons outside the 
Government without permission of the Contractor.
    (i) Preference for United States industry. Notwithstanding any other 
provision of this clause, the Contractor agrees that neither it nor any 
assignee will grant to any person the exclusive right to use or sell any 
subject invention in the United States unless such person agrees that 
any product embodying the subject invention or produced through the use 
of the subject invention will be manufactured substantially in the 
United States. However, in individual cases, the requirement for such an 
agreement may be waived by DOE upon a showing by the Contractor or its 
assignee that reasonable but unsuccessful efforts have been made to 
grant licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the United States or that under 
the circumstances domestic manufacture is not commercially feasible.
    (j) March-in rights. The Contractor agrees that, with respect to any 
subject invention in which it has acquired title, DOE has the right in 
accordance with the procedures in 37 CFR 401.6 and any supplemental 
regulations of the agency to require the Contractor, an assignee or 
exclusive licensee of a subject invention to grant a nonexclusive, 
partially exclusive, or exclusive license in any field of use to a 
responsible applicant or applicants, upon terms that are reasonable 
under the circumstances, and, if the Contractor, assignee, or exclusive 
licensee refuses such a request, DOE has the right to grant such a 
license itself if DOE determines that--
    (1) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived or because 
a licensee of the exclusive right to use or sell any subject invention 
in the United States is in breach of such agreement.
    (k) Special provisions for contracts with nonprofit organizations. 
If the Contractor is a nonprofit organization, it agrees that--
    (1) Rights to a subject invention in the United States may not be 
assigned without the approval of the Federal agency, except

[[Page 396]]

where such assignment is made to an organization which has as one of its 
primary functions the management of inventions; provided, that such 
assignee will be subject to the same provisions as the Contractor;
    (2) The Contractor will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when DOE deems it appropriate) when the subject invention is assigned 
in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the Contractor 
with respect to subject inventions, after payment of expenses (including 
payments to inventors) incidental to the administration of subject 
inventions will be utilized for the support of scientific research or 
education; and
    (4) It will make efforts that are reasonable under the circumstances 
to attract licensees of subject inventions that are small business 
firms, and that it will give a preference to a small business firm when 
licensing a subject invention if the Contractor determines that the 
small business firm has a plan or proposal for marketing the invention 
which, if executed, is equally as likely to bring the invention to 
practical application as any plans or proposals from applicants that are 
not small business firms; provided, that the Contractor is also 
satisfied that the small business firm has the capability and resources 
to carry out its plan or proposal. The decision whether to give a 
preference in any specific case will be at the discretion of the 
contractor. However, the Contractor agrees that the Secretary of 
Commerce may review the Contractor's licensing program and decisions 
regarding small business applicants, and the Contractor will negotiate 
changes to its licensing policies, procedures, or practices with the 
Secretary of Commerce when that Secretary's review discloses that the 
Contractor could take reasonable steps to more effectively implement the 
requirements of this subparagraph (k)(4).
    (l) Communications. (1) The contractor shall direct any 
notification, disclosure, or request to DOE provided for in this clause 
to the DOE patent counsel assisting the DOE contracting activity, with a 
copy of the communication to the Contracting Officer.
    (2) Each exercise of discretion or decision provided for in this 
clause, except subparagraph (k)(4), is reserved for the DOE Patent 
Counsel and is not a claim or dispute and is not subject to the Contract 
Disputes Act of 1978.
    (3) Upon request of the DOE Patent Counsel or the contracting 
officer, the contractor shall provide any or all of the following:
    (i) A copy of the patent application, filing date, serial number and 
title, patent number, and issue date for any subject invention in any 
country in which the contractor has applied for a patent;
    (ii) A report, not more often than annually, summarizing all subject 
inventions which were disclosed to DOE individually during the reporting 
period specified; or
    (iii) A report, prior to closeout of the contract, listing all 
subject inventions or stating that there were none.

                             (End of clause)

[60 FR 11817, Mar. 2, 1995]



952.227-13  Patent rights--acquisition by the Government.

    As prescribed at 927.303(a)(1), insert the following clause:

         Patent Rights--Acquisition by the Government (SEP 1997)

    (a) Definitions.T1
    Invention, as used in this clause, means any invention or discovery 
which is or may be patentable or otherwise protectable under title 35 of 
the United States Code or any novel variety of plant that is or may be 
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    Practical application, as used in this clause, means to manufacture, 
in the case of a composition or product; to practice, in the case of a 
process or method; or to operate, in the case of a machine or system; 
and, in each case, under such conditions as to establish that the 
invention is being utilized and that its benefits are, to the extent 
permitted by law or Government regulations, available to the public on 
reasonable terms.
    Subject invention, as used in this clause, means any invention of 
the Contractor conceived or first actually reduced to practice in the 
course of or under this contract.
    Patent Counsel, as used in this clause, means the Department of 
Energy Patent Counsel assisting the procuring activity.
    DOE patent waiver regulations, as used in this clause, means the 
Department of Energy patent waiver regulations in effect on the date of 
award of this contract. See 10 CFR part 784.
    Agency licensing regulations and applicable agency licensing 
regulations, as used in this clause, mean the Department of Energy 
patent licensing regulations at 10 CFR part 781.
    (b) Allocations of principal rights. (1) Assignment to the 
Government. The Contractor agrees to assign to the Government the entire 
right, title, and interest throughout the world in and to each subject 
invention, except to the extent that rights are retained by the 
Contractor under subparagraph (b)(2) and paragraph (d) of this clause.
    (2) Greater rights determinations. (i) The Contractor, or an 
employee-inventor after consultation with the Contractor, may request 
greater rights than the nonexclusive

[[Page 397]]

license and the foreign patent rights provided in paragraph (d) of this 
clause on identified inventions in accordance with the DOE patent waiver 
regulations. A request for a determination of whether the Contractor or 
the employee-inventor is entitled to acquire such greater rights must be 
submitted to the Patent Counsel with a copy to the Contracting Officer 
at the time of the first disclosure of the invention pursuant to 
subparagraph (e)(2) of this clause, or not later than 8 months 
thereafter, unless a longer period is authorized in writing by the 
Contracting Officer for good cause shown in writing by the Contractor. 
Each determination of greater rights under this contract shall be 
subject to paragraph (c) of this clause, unless otherwise provided in 
the greater rights determination, and to the reservations and conditions 
deemed to be appropriate by the Secretary of Energy or designee.
    (ii) Within two (2) months after the filing of a patent application, 
the Contractor shall provide the filing date, serial number and title, a 
copy of the patent application (including an English-language version if 
filed in a language other than English), and, promptly upon issuance of 
a patent, provide the patent number and issue date for any subject 
invention in any country for which the Contractor has been granted title 
or the right to file and prosecute on behalf of the United States by the 
Department of Energy.
    (iii) Not less than thirty (30) days before the expiration of the 
response period for any action required by the Patent and Trademark 
Office, notify the Patent Counsel of any decision not to continue 
prosecution of the application.
    (iv) Upon request, the Contractor shall furnish the Government an 
irrevocable power to inspect and make copies of the patent application 
file.
    (c) Minimum rights acquired by the Government. (1) With respect to 
each subject invention to which the Department of Energy grants the 
Contractor principal or exclusive rights, the Contractor agrees as 
follows:
    (i) The Contractor hereby grants to the Government a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced each subject invention throughout the world by or on behalf of 
the Government of the United States (including any Government agency).
    (ii) The Contractor agrees that with respect to any subject 
invention in which DOE has granted it title, DOE has the right in 
accordance with the procedures in the DOE patent waiver regulations (10 
CFR part 784) to require the Contractor, an assignee, or exclusive 
licensee of a subject invention to grant a nonexclusive, partially 
exclusive, or exclusive license in any field of use to a responsible 
applicant or applicants, upon terms that are reasonable under the 
circumstances, and if the Contractor, assignee, or exclusive licensee 
refuses such a request, DOE has the right to grant such a license itself 
if it determines that--
    (A) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (B) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (C) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (D) Such action is necessary because the agreement required by 
paragraph (i) of this clause has neither been obtained nor waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.
    (iii) The Contractor agrees to submit on request periodic reports no 
more frequently than annually on the utilization of a subject invention 
or on efforts at obtaining such utilization of a subject invention or on 
efforts at obtaining such utilization that are being made by the 
Contractor or its licensees or assignees. Such reports shall include 
information regarding the status of development, date of first 
commercial sale or use, gross royalties received by the Contractor, and 
such other data and information as DOE may reasonably specify. The 
Contractor also agrees to provide additional reports as may be requested 
by DOE in connection with any march-in proceedings undertaken by that 
agency in accordance with subparagraph (c)(1)(ii) of this clause. To the 
extent data or information supplied under this section is considered by 
the Contractor, its licensee, or assignee to be privileged and 
confidential and is so marked, the Department of Energy agrees that, to 
the extent permitted by law, it will not disclose such information to 
persons outside the Government.
    (iv) The Contractor agrees, when licensing a subject invention, to 
arrange to avoid royalty charges on acquisitions involving Government 
funds, including funds derived through a Military Assistance Program of 
the Government or otherwise derived through the Government, to refund 
any amounts received as royalty charges on a subject invention in 
acquisitions for, or on behalf of, the Government, and to provide for 
such refund in any instrument transferring rights in the invention to 
any party.
    (v) The Contractor agrees to provide for the Government's paid-up 
license pursuant to subparagraph (c)(1)(i) of this clause in any 
instrument transferring rights in a subject invention and to provide for 
the granting of

[[Page 398]]

licenses as required by subparagraph (c)(1)(ii) of this clause, and for 
the reporting of utilization information as required by subparagraph 
(c)(1)(iii) of this clause, whenever the instrument transfers principal 
or exclusive rights in a subject invention.
    (2) Nothing contained in this paragraph (c) shall be deemed to grant 
to the Government any rights with respect to any invention other than a 
subject invention.
    (d) Minimum rights to the Contractor. (1) The Contractor is hereby 
granted a revocable, nonexclusive, royalty-free license in each patent 
application filed in any country on a subject invention and any 
resulting patent in which the Government obtains title, unless the 
Contractor fails to disclose the subject invention within the times 
specified in subparagraph (e)(2) of this clause. The Contractor's 
license extends to its domestic subsidiaries and affiliates, if any, 
within the corporate structure of which the Contractor is a part and 
includes the right to grant sublicenses of the same scope to the extent 
the Contractor was legally obligated to do so at the time the contract 
was awarded. The license is transferable only with the approval of DOE 
except when transferred to the successor of that part of the 
Contractor's business to which the invention pertains.
    (2) The Contractor's domestic license may be revoked or modified by 
DOE to the extent necessary to achieve expeditious practical application 
of the subject invention pursuant to an application for an exclusive 
license submitted in accordance with applicable provisions in 37 CFR 
part 404 and agency licensing regulations. This license will not be 
revoked in that field of use or the geographical areas in which the 
Contractor has achieved practical applications and continues to make the 
benefits of the invention reasonably accessible to the public. The 
license in any foreign country may be revoked or modified at the 
discretion of DOE to the extent the Contractor, its licensees, or its 
domestic subsidiaries or affiliates have failed to achieve practical 
application in that foreign country.
    (3) Before revocation or modification of the license, DOE will 
furnish the Contractor a written notice of its intention to revoke or 
modify the license, and the Contractor will be allowed 30 days (or such 
other time as may be authorized by DOE for good cause shown by the 
Contractor) after the notice to show cause why the license should not be 
revoked or modified. The Contractor has the right to appeal, in 
accordance with applicable agency licensing regulations and 37 CFR part 
404 concerning the licensing of Government-owned inventions, any 
decision concerning the revocation or modification of its license.
    (4) The Contractor may request the right to acquire patent rights to 
a subject invention in any foreign country where the Government has 
elected not to secure such rights, subject to the conditions in 
subparagraphs (d)(4)(i) through (d)(4)(vii) of this clause. Such request 
must be made in writing to the Patent Counsel as part of the disclosure 
required by subparagraph (e)(2) of this clause, with a copy to the DOE 
Contracting Officer. DOE approval, if given, will be based on a 
determination that this would best serve the national interest.
    (i) The recipient of such rights, when specifically requested by 
DOE, and three years after issuance of a foreign patent disclosing the 
subject invention, shall furnish DOE a report stating:
    (A) The commercial use that is being made, or is intended to be 
made, of said invention, and
    (B) The steps taken to bring the invention to the point of practical 
application or to make the invention available for licensing.
    (ii) The Government shall retain at least an irrevocable, 
nonexclusive, paid-up license to make, use, and sell the invention 
throughout the world by or on behalf of the Government (including any 
Government agency) and States and domestic municipal governments, unless 
the Secretary of Energy or designee determines that it would not be in 
the public interest to acquire the license for the States and domestic 
municipal governments.
    (iii) If noted elsewhere in this contract as a condition of the 
grant of an advance waiver of the Government's title to inventions under 
this contract, or, if no advance waiver was granted but a waiver of the 
Government's title to an identified invention is granted pursuant to 
subparagraph (b)(2) of this clause upon a determination by the Secretary 
of Energy that it is in the Government's best interest, this license 
shall include the right of the Government to sublicense foreign 
governments pursuant to any existing or future treaty or agreement with 
such foreign governments.
    (iv) Subject to the rights granted in subparagraphs (d)(1), (2), and 
(3) of this clause, the Secretary of Energy or designee shall have the 
right to terminate the foreign patent rights granted in this 
subparagraph (d)(4) in whole or in part unless the recipient of such 
rights demonstrates to the satisfaction of the Secretary of Energy or 
designee that effective steps necessary to accomplish substantial 
utilization of the invention have been taken or within a reasonable time 
will be taken.
    (v) Subject to the rights granted in subparagraphs (d)(1), (2), and 
(3) of this clause, the Secretary of Energy or designee shall have the 
right, commencing four years after foreign patent rights are accorded 
under this subparagraph (d)(4), to require the granting

[[Page 399]]

of a nonexclusive or partially exclusive license to a responsible 
applicant or applicants, upon terms reasonable under the circumstances, 
and in appropriate circumstances to terminate said foreign patent rights 
in whole or in part, following a hearing upon notice thereof to the 
public, upon a petition by an interested person justifying such hearing:
    (A) If the Secretary of Energy or designee determines, upon review 
of such material as he deems relevant, and after the recipient of such 
rights or other interested person has had the opportunity to provide 
such relevant and material information as the Secretary or designee may 
require, that such foreign patent rights have tended substantially to 
lessen competition or to result in undue market concentration in any 
section of the United States in any line of commerce to which the 
technology relates; or
    (B) Unless the recipient of such rights demonstrates to the 
satisfaction of the Secretary of Energy or designee at such hearing that 
the recipient has taken effective steps, or within a reasonable time 
thereafter is expected to take such steps, necessary to accomplish 
substantial utilization of the invention.
    (vi) If the contractor is to file a foreign patent application on a 
subject invention, the Government agrees, upon written request, to use 
its best efforts to withhold publication of such invention disclosures 
for such period of time as specified by Patent Counsel, but in no event 
shall the Government or its employees be liable for any publication 
thereof.
    (vii) Subject to the license specified in subparagraphs (d) (1), 
(2), and (3) of this clause, the contractor or inventor agrees to convey 
to the Government, upon request, the entire right, title, and interest 
in any foreign country in which the contractor or inventor fails to have 
a patent application filed in a timely manner or decides not to continue 
prosecution or to pay any maintenance fees covering the invention. To 
avoid forfeiture of the patent application or patent, the contractor or 
inventor shall, not less than 60 days before the expiration period for 
any action required by any patent office, notify the Patent Counsel of 
such failure or decision, and deliver to the Patent Counsel, the 
executed instruments necessary for the conveyance specified in this 
paragraph.
    (e) Invention identification, disclosures, and reports. (1) The 
Contractor shall establish and maintain active and effective procedures 
to assure that subject inventions are promptly identified and disclosed 
to Contractor personnel responsible for patent matters within 6 months 
of conception and/or first actual reduction to practice, whichever 
occurs first in the performance of work under this contract. These 
procedures shall include the maintenance of laboratory notebooks or 
equivalent records and other records as are reasonably necessary to 
document the conception and/or the first actual reduction to practice of 
subject inventions, and records that show that the procedures for 
identifying and disclosing the inventions are followed. Upon request, 
the Contractor shall furnish the Contracting Officer a description of 
such procedures for evaluation and for determination as to their 
effectiveness.
    (2) The Contractor shall disclose each subject invention to the DOE 
Patent Counsel with a copy to the Contracting Officer within 2 months 
after the inventor discloses it in writing to Contractor personnel 
responsible for patent matters or, if earlier, within 6 months after the 
Contractor becomes aware that a subject invention has been made, but in 
any event before any on sale, public use, or publication of such 
invention known to the Contractor. The disclosure to DOE shall be in the 
form of a written report and shall identify the contract under which the 
invention was made and the inventor(s). It shall be sufficiently 
complete in technical detail to convey a clear understanding, to the 
extent known at the time of the disclosure, of the nature, purpose, 
operation, and physical, chemical, biological, or electrical 
characteristics of the invention. The disclosure shall also identify any 
publication, on sale, or public use of the invention and whether a 
manuscript describing the invention has been submitted for publication 
and, if so, whether it has been accepted for publication at the time of 
disclosure. In addition, after disclosure to DOE, the Contractor shall 
promptly notify Patent Counsel of the acceptance of any manuscript 
describing the invention for publication or of any on sale or public use 
planned by the Contractor. The report should also include any request 
for a greater rights determination in accordance with subparagraph 
(b)(2) of this clause. When an invention is disclosed to DOE under this 
paragraph, it shall be deemed to have been made in the manner specified 
in Sections (a)(1) and (a)(2) of 42 U.S.C. 5908, unless the Contractor 
contends in writing at the time the invention is disclosed that is was 
not so made.
    (3) The Contractor shall furnish the Contracting Officer the 
following:
    (i) Interim reports every 12 months (or such longer period as may be 
specified by the Contracting Officer) from the date of the contract, 
listing all subject inventions during that period, and including a 
statment that all subject inventions have been disclosed (or that there 
are not such inventions), and that such disclosure has been made in 
accordance with the procedures required by paragraph (e)(1) of this 
clause.
    (ii) A final report, within 3 months after completion of the 
contracted work listing all subject inventions or containing a statement

[[Page 400]]

that there were no such inventions, and listing all subcontracts at any 
tier containing a patent right clause or containing a statement that 
there were no such subcontracts.
    (4) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor each subject invention made under contract in order that the 
Contractor can comply with the disclosure provisions of paragraph (c) of 
this clause, and to execute all papers necessary to file patent 
applications on subject inventions and to establish the Government's 
rights in the subject inventions. This disclosure format should require, 
as a minimum, the information required by subparagraph (e)(2) of this 
clause.
    (5) The Contractor agrees, subject to FAR 27.302(j), that the 
Government may duplicate and disclose subject invention disclosures and 
all other reports and papers furnished or required to be furnished 
pursuant to this clause.
    (f) Examination of records relating to inventions. (1) The 
Contracting Officer or any authorized representative shall, until 3 
years after final payment under this contract, have the right to examine 
any books (including laboratory notebooks), records, and documents of 
the Contractor relating to the conception or first actual reduction to 
practice of inventions in the same field of technology as the work under 
this contract to determine whether--
    (i) Any such inventions are subject inventions;
    (ii) The Contractor has established and maintains the procedures 
required by subparagraphs (e) (1) and (4) of this clause;
    (iii) The Contractor and its inventors have complied with the 
procedures.
    (2) If the Contracting Officer learns of an unreported Contractor 
invention which the Contracting Officer believes may be a subject 
invention, the Contractor may be required to disclose the invention to 
DOE for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be subject 
to appropriate conditions to protect the confidentiality of the 
information involved.
    (g) Withholding of payment (This paragraph does not apply to 
subcontracts).
    (1) Any time before final payment under this contract, the 
Contracting Officer may, in the Government's interest, withhold payment 
until a reserve not exceeding $50,000 or 5 percent of the amount of this 
contract, whichever is less, shall have been set aside if, in the 
Contracting Officer's opinion, the Contractor fails to--
    (i) Convey to the Government, using a DOE-approved form, the title 
and/or rights of the Government in each subject invention as required by 
this clause.
    (ii) Establish, maintain, and follow effective procedures for 
identifying and disclosing subject inventions pursuant to subparagraph 
(e)(1) of this clause;
    (iii) Disclose any subject invention pursuant to subparagraph (e)(2) 
of this clause;
    (iv) Deliver acceptable interim reports pursuant to subparagraph 
(e)(3)(i) of this clause; or
    (v) Provide the information regarding subcontracts pursuant to 
subparagraph (h)(4) of this clause.
    (2) Such reserve or balance shall be withheld until the Contracting 
Officer has determined that the Contractor has rectified whatever 
deficiencies exist and has delivered all reports, disclosures, and other 
information required by this clause.
    (3) Final payment under this contract shall not be made before the 
Contractor delivers to the Contracting Officer all disclosures of 
subject inventions required by subparagraph (e)(2) of this clause, and 
acceptable final report pursuant to subparagraph (e)(3)(ii) of this 
clause, and the Patent Counsel has issued a patent clearance 
certification to the Contracting Officer.
    (4) The Contracting Officer may decrease or increase the sums 
withheld up to the maximum authorized above. No amount shall be withheld 
under this paragraph while the amount specified by this paragraph is 
being withheld under other provisions of the contract. The withholding 
of any amount or the subsequent payment thereof shall not be construed 
as a waiver of any Government rights.
    (h) Subcontracts. (1) The contractor shall include the clause at 48 
CFR 952.227-11 (suitably modified to identify the parties) in all 
subcontracts, regardless of tier, for experimental, developmental, 
demonstration, or research work to be performed by a small business firm 
or domestic nonprofit organization, except where the work of the 
subcontract is subject to an Exceptional Circumstances Determination by 
DOE. In all other subcontracts, regardless of tier, for experimental, 
developmental, demonstration, or research work, the contractor shall 
include this clause (suitably modified to identify the parties). The 
contractor shall not, as part of the consideration for awarding the 
subcontract, obtain rights in the subcontractor's subject inventions.
    (2) In the event of a refusal by a prospective subcontractor to 
accept such a clause the Contractor--
    (i) Shall promptly submit a written notice to the Contracting 
Officer setting forth the subcontractor's reasons for such refusal and 
other pertinent information that may expedite disposition of the matter; 
and

[[Page 401]]

    (ii) Shall not proceed with such subcontract without the written 
authorization of the Contracting Officer.
    (3) In the case of subcontracts at any tier, DOE, the subcontractor, 
and Contractor agree that the mutual obligations of the parties created 
by this clause constitute a contract between the subcontractor and DOE 
with respect to those matters covered by this clause.
    (4) The Contractor shall promptly notify the Contracting Officer in 
writing upon the award of any subcontract at any tier containing a 
patent rights clause by identifying the subcontractor, the applicable 
patent rights clause, the work to be performed under the subcontract, 
and the dates of award and estimated completion. Upon request of the 
Contracting Officer, the Contractor shall furnish a copy of such 
subcontract, and, no more frequently than annually, a listing of the 
subcontracts that have been awarded.
    (5) The contractor shall identify all subject inventions of the 
subcontractor of which it acquires knowledge in the performance of this 
contract and shall notify the Patent Counsel, with a copy to the 
contracting officer, promptly upon identification of the inventions.
    (i) Preference United States industry. Unless provided otherwise, no 
Contractor that receives title to any subject invention and no assignee 
of any such Contractor shall grant to any person the exclusive right to 
use or sell any subject invention in the United States unless such 
person agrees that any products embodying the subject invention will be 
manufactured substantially in the United States. However, in individual 
cases, the requirement may be waived by the Government upon a showing by 
the Contractor or assignee that reasonable but unsuccessful efforts have 
been made to grant licenses on similar terms to potential licensees that 
would be likely to manufacture substantially in the United States or 
that under the circumstances domestic manufacture is not commercially 
feasible.
    (j) Atomic energy. (1) No claim for pecuniary award of compensation 
under the provisions of the Atomic Energy Act of 1954, as amended, shall 
be asserted with respect to any invention or discovery made or conceived 
in the course of or under this contract.
    (2) Except as otherwise authorized in writing by the Contracting 
Officer, the Contractor will obtain patent agreements to effectuate the 
provisions of subparagraph (e)(1) of this clause from all persons who 
perform any part of the work under this contract, except nontechnical 
personnel, such as clerical employees and manual laborers.
    (k) Background Patents. (1) Background Patent means a domestic 
patent covering an invention or discovery which is not a subject 
invention and which is owned or controlled by the Contractor at any time 
through the completion of this contract:
    (i) Which the contractor, but not the Government, has the right to 
license to others without obligation to pay royalties thereon, and
    (ii) Infringement of which cannot reasonably be avoided upon the 
practice of any specific process, method, machine, manufacture, or 
composition of matter (including relatively minor modifications thereof) 
which is a subject of the research, development, or demonstration work 
performed under this contract.
    (2) The Contractor agrees to and does hereby grant to the Government 
a royalty-free, nonexclusive license under any background patent for 
purposes of practicing a subject of this contract by or for the 
Government in research, development, and demonstration work only.
    (3) The Contractor also agrees that upon written application by DOE, 
it will grant to responsible parties, for purposes of practicing a 
subject of this contract, nonexclusive licenses under any background 
patent on terms that are reasonable under the circumstances. If, 
however, the Contractor believes that exclusive rights are necessary to 
achieve expeditious commercial development or utilization, then a 
request may be made to DOE for DOE approval of such licensing by the 
Contractor.
    (4) Notwithstanding subparagraph (k)(3) of this clause, the 
contractor shall not be obligated to license any background patent if 
the Contractor demonstrates to the satisfaction of the Secretary of 
Energy or designee that:
    (i) A competitive alternative to the subject matter covered by said 
background patent is commercially available or readily introducible from 
one or more other sources; or
    (ii) The Contractor or its licensees are supplying the subject 
matter covered by said background patent in sufficient quantity and at 
reasonable prices to satisfy market needs, or have taken effective steps 
or within a reasonable time are expected to take effective steps to so 
supply the subject matter.
    (l) Publication. It is recognized that during the course of the work 
under this contract, the Contractor or its employees may from time to 
time desire to release or publish information regarding scientific or 
technical developments conceived or first actually reduced to practice 
in the course of or under this contract. In order that public disclosure 
of such information will not adversely affect the patent interests of 
DOE or the Contractor, patent approval for release of publication shall 
be secured from Patent Counsel prior to any such release or publication.
    (m) Forfeiture of rights in unreported subject inventions. (1) The 
Contractor shall forfeit and assign to the Government, at the request

[[Page 402]]

of the Secretary of Energy or designee, all rights in any subject 
invention which the Contractor fails to report to Patent Counsel within 
six months after the time the Contractor:
    (i) Files or causes to be filed a United States or foreign patent 
application thereon; or
    (ii) Submits the final report required by subparagraph (e)(2)(ii) of 
this clause, whichever is later.
    (2) However, the Contractor shall not forfeit rights in a subject 
invention if, within the time specified in subparagraph (m)(1) of this 
clause, the Contractor:
    (i) Prepares a written decision based upon a review of the record 
that the invention was neither conceived nor first actually reduced to 
practice in the course of or under the contract and delivers the 
decision to Patent Counsel, with a copy to the Contracting Officer; or
    (ii) Contending that the invention is not a subject invention, the 
Contractor nevertheless discloses the invention and all facts pertinent 
to this contention to the Patent Counsel, with a copy to the Contracting 
Officer; or
    (iii) Establishes that the failure to disclose did not result from 
the Contractor's fault or negligence.
    (3) Pending written assignment of the patent application and patents 
on a subject invention determined by the Secretary of Energy or designee 
to be forfeited (such determination to be a final decision under the 
Disputes clause of this contract), the Contractor shall be deemed to 
hold the invention and the patent applications and patents pertaining 
thereto in trust for the Government. The forfeiture provision of this 
paragraph (m) shall be in addition to and shall not supersede other 
rights and remedies which the Government may have with respect to 
subject inventions.

                             (End of clause)

[60 FR 11819, Mar. 2, 1995, as amended at 62 FR 42075, Aug. 5, 1997; 63 
FR 10507, Mar. 4, 1998; 67 FR 14872, Mar. 28, 2002]



952.227-14  Rights in data-general. (DOE coverage--alternates VI and VII)

    Alternate VI (FEB 1998) As prescribed at 48 CFR 927.404(l) insert 
Alternate VI to require the contractor to license data regarded as 
limited rights data or restricted computer software to the Government 
and third parties at reasonable royalties upon request by the Department 
of Energy.

    (k) Contractor Licensing. Except as may be otherwise specified in 
this contract as data not subject to this paragraph, the contractor 
agrees that upon written application by DOE, it will grant to the 
Government and responsible third parties, for purposes of practicing a 
subject of this contract, a nonexclusive license in any limited rights 
data or restricted computer software on terms and conditions reasonable 
under the circumstances including appropriate provisions for 
confidentiality; provided, however, the contractor shall not be obliged 
to license any such data if the contractor demonstrates to the 
satisfaction of the Secretary of Energy or designee that:
    (1) Such data are not essential to the manufacture or practice of 
hardware designed or fabricated, or processes developed, under this 
contract;
    (2) Such data, in the form of results obtained by their use, have a 
commercially competitive alternate available or readily introducible 
from one or more other sources;
    (3) Such data, in the form of results obtained by their use, are 
being supplied by the contractor or its licensees in sufficient quantity 
and at reasonable prices to satisfy market needs, or the contractor or 
its licensees have taken effective steps or within a reasonable time are 
expected to take effective steps to so supply such data in the form of 
results obtained by their use; or
    (4) Such data, in the form of results obtained by their use, can be 
furnished by another firm skilled in the art of manufacturing items or 
performing processes of the same general type and character necessary to 
achieve the contract results.

                           (End of alternate)

    Alternate VII (FEB 1998) As prescribed in 48 CFR 927.404(m) make the 
change described in Alternate VII to limit the contractor's use of DOE 
restricted data.
    Insert the parenthetical phrase ``(except Restricted Data in 
category C-24, 10 CFR part 725, in which DOE has reserved the right to 
receive reasonable compensation for the use of its inventions and 
discoveries, including related data and technology).'' after the phrase 
``data first produced or specifically used by the Contractor in the 
performance of this contract'' in paragraph (b)(2)(i) of the clause at 
FAR 52.227-14.

                           (End of alternate)

[63 FR 10507, Mar. 4, 1998]

[[Page 403]]



952.227-70--952.227-72  [Reserved]



952.227-74  [Reserved]



952.227-82  Rights to proposal data.

    Pursuant to 927.7002(d), include this clause in any contract which 
the decision to make the award included consideration of a technical 
proposal.

                   Rights to Proposal Data (APR 1994)

    Except for technical data contained on pages ---- of the 
contractor's proposal dated ---- which are asserted by the contractor as 
being proprietary data, it is agreed that, as a condition of the award 
of this contract, and notwithstanding the provisions of any notice 
appearing on the proposal, the Government shall have the right to use, 
duplicate, disclose and have others do so for any purpose whatsoever, 
the technical data contained in the proposal upon which this contract is 
based.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9109, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997]



952.227-84  Notice of right to request patent waiver.

    Include this provision in all appropriate solicitations in 
accordance with 48 CFR 927.409(t).

                Right To Request Patent Waiver (FEB 1998)

    Offerors have the right to request a waiver of all or any part of 
the rights of the United States in inventions conceived or first 
actually reduced to practice in performance of the contract that may be 
awarded as a result of this solicitation, in advance of or within 30 
days after the effective date of contracting. Even where such advance 
waiver is not requested or the request is denied, the contractor will 
have a continuing right under the contract to request a waiver of the 
rights of the United States in identified inventions, i.e., individual 
inventions conceived or first actually reduced to practice in 
performance of the contract. Domestic small businesses and domestic 
nonprofit organizations normally will receive the patent rights clause 
at DEAR 952.227-11 which permits the contractor to retain title to such 
inventions, except under contracts for management or operation of a 
Government-owned research and development facility or under contracts 
involving exceptional circumstances or intelligence activities. 
Therefore, small businesses and nonprofit organizations normally need 
not request a waiver. See the patent rights clause in the draft contract 
in this solicitation. See DOE's patent waiver regulations at 10 CFR part 
784.

                           (End of provision)

[63 FR 10508, Mar. 4, 1998]



952.231-70  Date of incurrence of cost.

    In accordance with 931.205-32, insert the following clause when 
advance understandings have been negotiated regarding costs incurred 
prior to the contract effective date:

                  Date of Incurrence of Cost (APR 1984)

    The Contractor shall be entitled to reimbursement for costs incurred 
in an amount not to exceed $ ---- on or after ---- which, if incurred 
after this contract has been entered into, would have been reimbursable 
under the provisions of this contract.

[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984]



952.231-71  Insurance-litigation and claims.

    As prescribed in 48 CFR 931.205-19, insert the following clause in 
applicable non-management and operating contracts:

              Insurance-Litigation and Claims (APRIL 2002)

    (a) The contractor may, with the prior written authorization of the 
contracting officer, and shall, upon the request of the Government, 
initiate litigation against third parties, including proceedings before 
administrative agencies, in connection with this contract. The 
contractor shall proceed with such litigation in good faith and as 
directed from time to time by the contracting officer.
    (b) The contractor shall give the contracting officer immediate 
notice in writing of any legal proceeding, including any proceeding 
before an administrative agency, filed against the contractor arising 
out of the performance of this contract. Except as otherwise directed by 
the contracting officer, in writing, the contractor shall furnish 
immediately to the contracting officer copies of all pertinent papers 
received by the contractor with respect to such action. The contractor, 
with the prior written authorization of the contracting officer, shall 
proceed with such litigation in good faith and as directed from time to 
time by the contracting officer.
    (c)(1) Except as provided in paragraph (c)(2) of this clause, the 
contractor shall procure and maintain such bonds and insurance as 
required by law or approved in writing by the contracting officer.
    (2) The contractor may, with the approval of the contracting 
officer, maintain a self-insurance program; provided that, with respect

[[Page 404]]

to workers' compensation, the contractor is qualified pursuant to 
statutory authority.
    (3) All bonds and insurance required by this clause shall be in a 
form and amount and for those periods as the contracting officer may 
require or approve and with sureties and insurers approved by the 
contracting officer.
    (d) The contractor agrees to submit for the contracting officer's 
approval, to the extent and in the manner required by the contracting 
officer, any other bonds and insurance that are maintained by the 
contractor in connection with the performance of this contract and for 
which the contractor seeks reimbursement. If an insurance cost (whether 
a premium for commercial insurance or related to self-insurance) 
includes a portion covering costs made unallowable elsewhere in the 
contract, and the share of the cost for coverage for the unallowable 
cost is determinable, the portion of the cost that is otherwise an 
allowable cost under this contract is reimbursable to the extent 
determined by the contracting officer.
    (e) Except as provided in paragraphs (g) and (h) of this clause, or 
specifically disallowed elsewhere in this contract, the contractor shall 
be reimbursed--
    (1) For that portion of the reasonable cost of bonds and insurance 
allocable to this contract required in accordance with contract terms or 
approved under this clause, and
    (2) For liabilities (and reasonable expenses incidental to such 
liabilities, including litigation costs) to third persons not 
compensated by insurance or otherwise without regard to and as an 
exception to the limitation of cost or limitation of funds clause of 
this contract.
    (f) The Government's liability under paragraph (e) of this clause is 
subject to the availability of appropriated funds. Nothing in this 
contract shall be construed as implying that the Congress will, at a 
later date, appropriate funds sufficient to meet deficiencies.
    (g) Notwithstanding any other provision of this contract, the 
contractor shall not be reimbursed for liabilities (and expenses 
incidental to such liabilities, including litigation costs, counsel 
fees, judgment and settlements)--
    (1) Which are otherwise unallowable by law or the provisions of this 
contract; or
    (2) For which the contractor has failed to insure or to maintain 
insurance as required by law, this contract, or by the written direction 
of the contracting officer.
    (h) In addition to the cost reimbursement limitations contained in 
48 CFR part 31, as supplemented in 48 CFR part 931, and notwithstanding 
any other provision of this contract, the contractor's liabilities to 
third persons, including employees but excluding costs incidental to 
workers' compensation actions (and any expenses incidental to such 
liabilities, including litigation costs, counsel fees, judgments and 
settlements), shall not be reimbursed if such liabilities were caused by 
contractor managerial personnel's--
    (1) Willful misconduct,
    (2) Lack of good faith, or
    (3) Failure to exercise prudent business judgment, which means 
failure to act in the same manner as a prudent person in the conduct of 
competitive business; or, in the case of a non-profit educational 
institution, failure to act in the manner that a prudent person would 
under the circumstances prevailing at the time the decision to incur the 
cost is made.
    (i) The burden of proof shall be upon the contractor to establish 
that costs covered by paragraph (h) of this clause are allowable and 
reasonable if, after an initial review of the facts, the contracting 
officer challenges a specific cost or informs the contractor that there 
is reason to believe that the cost results from willful misconduct, lack 
of good faith, or failure to exercise prudent business judgment by 
contractor managerial personnel.
    (j)(1) All litigation costs, including counsel fees, judgments and 
settlements shall be differentiated and accounted for by the contractor 
so as to be separately identifiable. If the contracting officer 
provisionally disallows such costs, then the contractor may not use 
funds advanced by DOE under the contract to finance the litigation.
    (2) Punitive damages are not allowable unless the act or failure to 
act which gave rise to the liability resulted from compliance with 
specific terms and conditions of the contract or written instructions 
from the contracting officer.
    (3) The portion of the cost of insurance obtained by the contractor 
that is allocable to coverage of liabilities referred to in paragraph 
(g)(1) of this clause is not allowable.
    (4) The term ``contractor's managerial personnel'' is defined in the 
Property clause in this contract.
    (k) The contractor may at its own expense and not as an allowable 
cost procure for its own protection insurance to compensate the 
contractor for any unallowable or unreimbursable costs incurred in 
connection with contract performance.
    (l) If any suit or action is filed or any claim is made against the 
contractor, the cost and expense of which may be reimbursable to the 
contractor under this contract, and the risk of which is then uninsured 
or is insured for less than the amount claimed, the contractor shall--
    (1) Immediately notify the contracting officer and promptly furnish 
copies of all pertinent papers received;
    (2) Authorize Department representatives to collaborate with: in-
house or DOE-approved outside counsel in settling or defending the 
claim; or counsel for the insurance

[[Page 405]]

carrier in settling or defending the claim if the amount of the 
liability claimed exceeds the amount of coverage, unless precluded by 
the terms of the insurance contract; and
    (3) Authorize Department representatives to settle the claim or to 
defend or represent the contractor in and/or to take charge of any 
litigation, if required by the Department, if the liability is not 
insured or covered by bond. In any action against more than one 
Department contractor, the Department may require the contractor to be 
represented by common counsel. Counsel for the contractor may, at the 
contractor's own expense, be associated with the Department 
representatives in any such claim or litigation.

                             (End of clause)

[67 FR 14872, Mar. 28, 2002]



952.233-2  Service of protest.

    As prescribed in 48 CFR 933.106(a), add the following to the end of 
the provision at FAR 52.233-2:

    (c) Another copy of a protest filed with the General Accounting 
Office shall be furnished to the following address within the time 
periods described in paragraph (b) of this clause: U.S. Department of 
Energy, Assistant General Counsel for Procurement and Financial 
Assistance (GC-61), 1000 Independence Avenue, S.W., Washington, DC 
20585, Fax: (202) 586-4546.

[61 FR 41711, Aug. 9, 1996, as amended at 67 FR 14872, Mar. 28, 2002]



952.233-4  Notice of protest file availability.

    As prescribed in 933.106(b), insert the following provision:

             Notice of Protest File Availability (SEP 1996)

    (a) If a protest of this procurement is filed with the General 
Accounting Office (GAO) in accordance with 4 CFR part 21, any actual or 
prospective offeror may request the Department of Energy to provide it 
with reasonable access to the protest file pursuant to FAR 
33.104(a)(3)(ii), implementing section 1065 of Public Law 103-355. Such 
request must be in writing and addressed to the contracting officer for 
this procurement.
    (b) Any offeror who submits information or documents to the 
Department for the purpose of competing in this procurement is hereby 
notified that information or documents it submits may be included in the 
protest file that will be available to actual or prospective offerors in 
accordance with the requirements of FAR 33.104(a)(3)(ii). The Department 
will be required to make such documents available unless they are exempt 
from disclosure pursuant to the Freedom of Information Act. Therefore, 
offerors should mark any documents as to which they would assert that an 
exemption applies. (See 10 CFR part 1004.)

[61 FR 41711, Aug. 9, 1996]



952.233-5  Agency protest review.

    As prescribed in 48 CFR 933.106(c), insert the following provision:

                    Agency Protest Review (SEP 1996)

    Protests to the Agency will be decided either at the level of the 
Head of the Contracting Activity or at the Headquarters level. The 
Department of Energy's agency protest procedures, set forth in 933.103, 
elaborate on these options and on the availability of a suspension of a 
procurement that is protested to the agency. The Department encourages 
potential protesters to discuss their concerns with the contracting 
officer prior to filing a protest.

[61 FR 41711, Aug. 9, 1996]



952.235-70  Key personnel.

    In accordance with 935.070, insert the following clause.

                        Key Personnel (APR 1994)

    The personnel specified in an attachment to this contract are 
considered to be essential to the work being performed hereunder. Prior 
to diverting any of the specified individuals to other programs, the 
Contractor shall notify the contracting officer reasonably in advance 
and shall submit justification (including proposed substitutions) in 
sufficient detail to permit evaluation of the impact on the program. No 
diversion shall be made by the contractor without the written consent of 
the contracting officer: Provided, that the contracting officer may 
ratify in writing such diversion and such ratification shall constitute 
the consent of the contracting officer required by this clause. The 
attachment to this contract may be amended from time to time during the 
course of the contract to either add or delete personnel, as 
appropriate.

[49 FR 12042, Mar. 28, 1984, as amended at 56 FR 41965, Aug. 26, 1991; 
59 FR 9109, Feb. 25, 1994; 62 FR 2312, Jan. 16, 1997]



952.236  Construction and architect-engineer contracts.



952.236-71  Inspection in architect-engineer contracts.

    As prescribed at 936.609-3 insert the following clause.

[[Page 406]]

                          Inspection (APR 1994)

    The Government, through any authorized representatives, has the 
right at all reasonable times, to inspect, or otherwise evaluate the 
work performed or being performed hereunder and the premises in which it 
is being performed. If any inspection, or evaluation is made by the 
Government on the premises of the Contractor or a subcontractor, the 
Contractor shall provide and shall require his subcontractors to provide 
all reasonable facilities and assistance for the safety and convenience 
of the Government representatives in the performance of their duties. 
All inspections and evaluations shall be performed in such a manner as 
will not unduly delay the work.

[49 FR 12042, Mar. 28, 1984, as amended at 59 FR 9109, Feb. 25, 1994; 62 
FR 2312, Jan. 16, 1997]



952.236-72  Nonrefundable fee for plans and specifications.

    In accordance with the requirement at 936.202(h) include the 
following in solicitations for construction.

        Nonrefundable Fee for Plans and Specifications (APR 1984)

    A fee of $------ is required for the plans and specifications 
referenced in this solicitation. Send check or money order to --------
--. The fee is not refundable. Plans and specifications need not be 
returned.

[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984, as amended at 59 
FR 9109, Feb. 25, 1994; 67 FR 14872, Mar. 28, 2002]



952.237-70  Collective bargaining agreements--protective services.

    As prescribed in 937.7040, insert the following clause:

    Collective Bargaining Agreements--Protective Services (AUG 1993)

    When negotiating collective bargaining agreements applicable to the 
work force under this contract, the Contractor shall use its best 
efforts to ensure such agreements contain provisions designed to assure 
continuity of services. All such agreements entered into during the 
contract period of performance should provide that grievances and 
disputes involving the interpretation or application of the agreement 
will be settled without resorting to strike, lockout, or other 
interruption of normal operations.
    For this purpose, each collective bargaining agreement should 
provide an effective grievance procedure with arbitration as its final 
step, unless the parties mutually agree upon some other method of 
assuring continuity of operations. As part of such agreements, 
management and labor should agree to cooperate fully with the Federal 
Mediation and Conciliation Service. The contractor shall include the 
substance of this clause in any subcontracts for protective services.

[58 FR 36152, July 6, 1993; 58 FR 43287, Aug. 16, 1993, as amended at 67 
FR 14872, Mar. 28, 2002]



952.242-70  Technical Direction.

    As prescribed in 48 CFR 942.270-2, insert the following clause.

                     Technical Direction (DEC 2000)

    (a) Performance of the work under this contract shall be subject to 
the technical direction of the DOE Contracting Officer's Representative 
(COR). The term ``technical direction'' is defined to include, without 
limitation:
    (1) Providing direction to the contractor that redirects contract 
effort, shift work emphasis between work areas or tasks, require pursuit 
of certain lines of inquiry, fill in details, or otherwise serve to 
accomplish the contractual Statement of Work.
    (2) Providing written information to the contractor that assists in 
interpreting drawings, specifications, or technical portions of the work 
description.
    (3) Reviewing and, where required by the contract, approving, 
technical reports, drawings, specifications, and technical information 
to be delivered by the contractor to the Government.
    (b) The contractor will receive a copy of the written COR 
designation from the contracting officer. It will specify the extent of 
the COR's authority to act on behalf of the contracting officer.
    (c) Technical direction must be within the scope of work stated in 
the contract. The COR does not have the authority to, and may not, issue 
any technical direction that:
    (1) Constitutes an assignment of additional work outside the 
Statement of Work;
    (2) Constitutes a change as defined in the contract clause entitled 
``Changes;''
    (3) In any manner causes an increase or decrease in the total 
estimated contract cost, the fee (if any), or the time required for 
contract performance;
    (4) Changes any of the expressed terms, conditions or specifications 
of the contract; or
    (5) Interferes with the contractor's right to perform the terms and 
conditions of the contract.
    (d) All technical direction shall be issued in writing by the COR.
    (e) The contractor must proceed promptly with the performance of 
technical direction duly issued by the COR in the manner prescribed by 
this clause and within its authority under the provisions of this 
clause. If, in

[[Page 407]]

the opinion of the contractor, any instruction or direction by the COR 
falls within one of the categories defined in (c)(1) through (c)(5) of 
this clause, the contractor must not proceed and must notify the 
Contracting Officer in writing within five (5) working days after 
receipt of any such instruction or direction and must request the 
Contracting Officer to modify the contract accordingly. Upon receiving 
the notification from the contractor, the Contracting Officer must:
    (1) Advise the contractor in writing within thirty (30) days after 
receipt of the contractor's letter that the technical direction is 
within the scope of the contract effort and does not constitute a change 
under the Changes clause of the contract;
    (2) Advise the contractor in writing within a reasonable time that 
the Government will issue a written change order; or
    (3) Advise the contractor in writing within a reasonable time not to 
proceed with the instruction or direction of the COR.
    (f) A failure of the contractor and Contracting Officer either to 
agree that the technical direction is within the scope of the contract 
or to agree upon the contract action to be taken with respect to the 
technical direction will be subject to the provisions of the clause 
entitled ``Disputes.''

                             (End of clause)

[65 FR 81008, Dec. 22, 2000]



952.245  Clauses related to government property.



952.245-2  Government property (fixed-price contracts).

    Modify FAR 52.245-2 by adding ``and the DOE Acquisition Regulation 
Subpart 945.5,'' after the reference to FAR Subpart 45.5 in the first 
sentence of paragraphs (e)(1) and (e)(2) of the clause.



952.245-5  Government property (cost-reimbursement, time-and-materials, or 
labor-hour contracts.)

    Modify FAR 52.245-5 by adding ``and DOE Acquisition Regulation 
Subpart 945.5'' after the reference to FAR Subpart 45.5 in paragraphs 
(e)(1) and (e)(2) of the clause.



952.247-70  Foreign travel.

    As prescribed in 48 CFR 947.7002, insert the following clause:

                        Foreign Travel (DEC 2000)

    Contractor foreign travel shall be conducted pursuant to the 
requirements contained in DOE Order 551.1, Official Foreign Travel, or 
any subsequent version of the order in effect at the time of award.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000]



952.249  Clauses related to termination.



952.250  Clauses related to indemnification of contractors.



952.250-70  Nuclear hazards indemnity agreement.

    Insert the following clause in accordance with section 950.7006.

             Nuclear Hazards Indemnity Agreement (JUN 1996)

    (a) Authority. This clause is incorporated into this contract 
pursuant to the authority contained in subsection 170d. of the Atomic 
Energy Act of 1954, as amended (hereinafter called the Act.)
    (b) Definitions. The definitions set out in the Act shall apply to 
this clause.
    (c) Financial protection. Except as hereafter permitted or required 
in writing by DOE, the contractor will not be required to provide or 
maintain, and will not provide or maintain at Government expense, any 
form of financial protection to cover public liability, as described in 
paragraph (d)(2) below. DOE may, however, at any time require in writing 
that the contractor provide and maintain financial protection of such a 
type and in such amount as DOE shall determine to be appropriate to 
cover such public liability, provided that the costs of such financial 
protection are reimbursed to the contractor by DOE.
    (d)(1) Indemnification. To the extent that the contractor and other 
persons indemnified are not compensated by any financial protection 
permitted or required by DOE, DOE will indemnify the contractor and 
other persons indemnified against (i) claims for public liability as 
described in subparagraph (d)(2) of this clause; and (ii) such legal 
costs of the contractor and other persons indemnified as are approved by 
DOE, provided that DOE's liability, including such legal costs, shall 
not exceed the amount set forth in section 170e.(1)(B) of the Act in the 
aggregate for each nuclear incident or precautionary evacuation 
occurring within the United States or $100 million in the aggregate for 
each nuclear incident occurring outside the United States, irrespective 
of the number of persons indemnified in connection with this contract.
    (2) The public liability referred to in subparagraph (d)(1) of this 
clause is public liability as defined in the Act which (i) arises out of 
or in connection with the activities

[[Page 408]]

under this contract, including transportation; and (ii) arises out of or 
results from a nuclear incident or precautionary evacuation, as those 
terms are defined in the Act.
    (e)(1) Waiver of Defenses. In the event of a nuclear incident, as 
defined in the Act, arising out of nuclear waste activities, as defined 
in the Act, the contractor, on behalf of itself and other persons 
indemnified, agrees to waive any issue or defense as to charitable or 
governmental immunity.
    (2) In the event of an extraordinary nuclear occurrence which:
    (i) Arises out of, results from, or occurs in the course of the 
construction, possession, or operation of a production or utilization 
facility; or
    (ii) Arises out of, results from, or occurs in the course of 
transportation of source material, by-product material, or special 
nuclear material to or from a production or utilization facility; or
    (iii) Arises out of or results from the possession, operation, or 
use by the contractor or a subcontractor of a device utilizing special 
nuclear material or by-product material, during the course of the 
contract activity; or
    (iv) Arises out of, results from, or occurs in the course of nuclear 
waste activities, the contractor, on behalf of itself and other persons 
indemnified, agrees to waive:
    (A) Any issue or defense as to the conduct of the claimant 
(including the conduct of persons through whom the claimant derives its 
cause of action) or fault of persons indemnified, including, but not 
limited to:
    1. Negligence;
    2. Contributory negligence;
    3. Assumption of risk; or
    4. Unforeseeable intervening causes, whether involving the conduct 
of a third person or an act of God;
    (B) Any issue or defense as to charitable or governmental immunity; 
and
    (C) Any issue or defense based on any statute of limitations, if 
suit is instituted within 3 years from the date on which the claimant 
first knew, or reasonably could have known, of his injury or change and 
the cause thereof. The waiver of any such issue or defense shall be 
effective regardless of whether such issue or defense may otherwise be 
deemed jurisdictional or relating to an element in the cause of action. 
The waiver shall be judicially enforceable in accordance with its terms 
by the claimant against the person indemnified.
    (v) The term extraordinary nuclear occurrence means an event which 
DOE has determined to be an extraordinary nuclear occurrence as defined 
in the Act. A determination of whether or not there has been an 
extraordinary nuclear occurrence will be made in accordance with the 
procedures in 10 CFR part 840.
    (vi) For the purposes of that determination, offsite as that term is 
used in 10 CFR part 840 means away from ``the contract location'' which 
phrase means any DOE facility, installation, or site at which 
contractual activity under this contract is being carried on, and any 
contractor-owned or controlled facility, installation, or site at which 
the contractor is engaged in the performance of contractual activity 
under this contract.
    (3) The waivers set forth above:
    (i) Shall be effective regardless of whether such issue or defense 
may otherwise be deemed jurisdictional or relating to an element in the 
cause of action;
    (ii) Shall be judicially enforceable in accordance with its terms by 
the claimant against the person indemnified;
    (iii) Shall not preclude a defense based upon a failure to take 
reasonable steps to mitigate damages;
    (iv) Shall not apply to injury or damage to a claimant or to a 
claimant's property which is intentionally sustained by the claimant or 
which results from a nuclear incident intentionally and wrongfully 
caused by the claimant;
    (v) Shall not apply to injury to a claimant who is employed at the 
site of and in connection with the activity where the extraordinary 
nuclear occurrence takes place, if benefits therefor are either payable 
or required to be provided under any workmen's compensation or 
occupational disease law;
    (vi) Shall not apply to any claim resulting from a nuclear incident 
occurring outside the United States;
    (vii) Shall be effective only with respect to those obligations set 
forth in this clause and in insurance policies, contracts or other proof 
of financial protection; and
    (viii) Shall not apply to, or prejudice the prosecution or defense 
of, any claim or portion of claim which is not within the protection 
afforded under (A) the limit of liability provisions under subsection 
170e. of the Act, and (B) the terms of this agreement and the terms of 
insurance policies, contracts, or other proof of financial protection.
    (f) Notification and litigation of claims. The contractor shall give 
immediate written notice to DOE of any known action or claim filed or 
made against the contractor or other person indemnified for public 
liability as defined in paragraph (d)(2). Except as otherwise directed 
by DOE, the contractor shall furnish promptly to DOE, copies of all 
pertinent papers received by the contractor or filed with respect to 
such actions or claims. DOE shall have the right to, and may collaborate 
with, the contractor and any other person indemnified in the settlement 
or defense of any action or claim and shall have the right to (1) 
require the prior approval of DOE for the payment of any claim that DOE 
may be required to indemnify hereunder; and (2) appear through the 
Attorney General on behalf of the contractor or other person indemnified 
in any action brought upon any claim that DOE may be required to 
indemnify

[[Page 409]]

hereunder, take charge of such action, and settle or defend any such 
action. If the settlement or defense of any such action or claim is 
undertaken by DOE, the contractor or other person indemnified shall 
furnish all reasonable assistance in effecting a settlement or asserting 
a defense.
    (g) Continuity of DOE obligations. The obligations of DOE under this 
clause shall not be affected by any failure on the part of the 
contractor to fulfill its obligation under this contract and shall be 
unaffected by the death, disability, or termination of existence of the 
contractor, or by the completion, termination or expiration of this 
contract.
    (h) Effect of other clauses. The provisions of this clause shall not 
be limited in any way by, and shall be interpreted without reference to, 
any other clause of this contract, including the clause entitled 
Contract Disputes, provided, however, that this clause shall be subject 
to the clauses entitled Covenant Against Contingent Fees, and Accounts, 
records, and inspection, and any provisions that are later added to this 
contract as required by applicable Federal law, including statutes, 
executive orders and regulations, to be included in Nuclear Hazards 
Indemnity Agreements.
    (i) Civil penalties. The contractor and its subcontractors and 
suppliers who are indemnified under the provisions of this clause are 
subject to civil penalties, pursuant to 234A of the Act, for violations 
of applicable DOE nuclear-safety related rules, regulations, or orders.
    (j) Criminal penalties. Any individual director, officer, or 
employee of the contractor or of its subcontractors and suppliers who 
are indemnified under the provisions of this clause are subject to 
criminal penalties, pursuant to 223(c) of the Act, for knowing and 
willful violation of the Atomic Energy Act of 1954, as amended, and 
applicable DOE nuclear safety-related rules, regulations or orders which 
violation results in, or, if undetected, would have resulted in a 
nuclear incident.
    (k) Inclusion in subcontracts. The contractor shall insert this 
clause in any subcontract which may involve the risk of public 
liability, as that term is defined in the Act and further described in 
paragraph (d)(2) above. However, this clause shall not be included in 
subcontracts in which the subcontractor is subject to Nuclear Regulatory 
Commission (NRC) financial protection requirements under section 170b. 
of the Act or NRC agreements of indemnification under section 170c. or 
k. of the Act for the activities under the subcontract.

                             Effective date

    ( ) See note II below for instructions related to this section on 
Effective Date.

                    Relationship to general indemnity

    ( ) See note III below for instructions related to this section on 
Relationship to General Indemnity.

                             (End of clause)

                                 Note I

    Paragraph (i) of the clause will be replaced with ``Reserved'' in 
contracts specifically exempted from civil penalties by section 234 of 
the Act. That subsection provides that the following DOE contractors are 
not subject to the assessment of civil penalties:
    (1) The University of Chicago (and any subcontractors or suppliers 
thereto) for activities associated with Argonne National Laboratory;
    (2) The University of California (and any subcontractors or 
suppliers thereto) for activities associated with Los Alamos National 
Laboratory, Lawrence Livermore National Laboratory, and Lawrence 
Berkeley National Laboratory;
    (3) American Telephone and Telegraph Company and its subsidiaries 
(and any subcontractors or suppliers thereto) for activities associated 
with Sandia National Laboratories;
    (4) Universities Research Association, Inc. (and any subcontractors 
or suppliers thereto) for activities associated with FERMI National 
Laboratory:
    (5) Princeton University (and any subcontractor or suppliers 
thereto) for activities associated with Princeton Plasma Physics 
Laboratory;
    (6) The Associated Universities, Inc. (and any subcontractors or 
suppliers thereto) for activities associated with the Brookhaven 
National Laboratory; and
    (7) Battelle Memorial Institute (and any subcontractors or suppliers 
thereto) for activities associated with Pacific Northwest Laboratory.

                              (End of note)

                                 Note II

    Contracts with an effective date after the date of qJune 12, 1996, 
do not require the effective date provision in this clause. Delete the 
title.
    Use the EFFECTIVE DATE title and the following language, for those 
contracts:

``( ) This indemnity agreement shall be applicable with respect to 
          nuclear incidents occurring on or after ----.''
    (1) Those that contained an indemnity pursuant to Public Law 85-840 
prior to August 20, 1988, include the effective date provision above, 
inserting the effective date of the contract modification that replaced 
the Public Law 85-804 indemnity with an interim Price-Anderson based 
indemnity. Pursuant to the Price-Anderson Amendments Act, this

[[Page 410]]

substitution must have taken place by February 20, 1989.
    (2) Those that contained, and continue to contain, either of the 
previous Nuclear Hazards Indemnity clauses, include the effective date 
provision above, inserting ``August 20, 1988.''
    (3) Those with an effective date between August 20, 1988, and the 
date of the Final Rule, that (a) had ``interim coverage'' or (b) did not 
have ``interim coverage'' but have now been determined to be covered 
under the PAAA, include the effective date provision above, inserting 
the contract effective date.

                                Note III

    The following alternate will be added to the above Nuclear Hazards 
Indemnity Agreement clause for all contracts that contain a general 
authority indemnity pursuant to 950.7101. Caution: Be aware that for 
contracts that will have this provision added which do not contain an 
effective date provision, this paragraph shall be marked (1). In the 
event an Effective Date provision has been included, it shall be market 
(m).
``( ) To the extent that the contractor is compensated by any financial 
          protection, or is indemnified pursuant to this clause, or is 
          effectively relieved of pubic liability by an order or orders 
          limiting same, pursuant to 170e of the Act, the provisions of 
          the clause providing general authority indemnity shall not 
          apply.''

                              (End of note)

[56 FR 57828, Nov. 14, 1991, as amended at 58 FR 32307, June 9, 1993; 61 
FR 21977, May 13, 1996; 61 FR 30823, June 18, 1996; 67 FR 14872, Mar. 
28, 2002]



952.250-71--952.250-72  [Reserved]



952.251-70  Contractor employee travel discounts.

    As prescribed in 48 CFR 951.70, insert the following clause.

             Contractor Employee Travel Discounts (DEC 2000)

    (a) The contractor shall take advantage of travel discounts offered 
to Federal contractor employee travelers by AMTRAK, hotels, motels, or 
car rental companies, when use of such discounts would result in lower 
overall trip costs and the discounted services are reasonably available. 
Vendors providing these services may require the contractor employee to 
furnish them a letter of identification signed by the authorized 
contracting officer.
    (b) Contracted airlines. Contractors are not eligible for GSA 
contract city pair fares.
    (c) Discount rail service. AMTRAK voluntarily offers discounts to 
Federal travelers on official business and sometimes extends those 
discounts to Federal contractor employees.
    (d) Hotels/motels. Many lodging providers extend their discount 
rates for Federal employees to Federal contractor employees.
    (e) Car rentals. The Military Traffic Management Command (MTMC) of 
the Department of Defense negotiates rate agreements with car rental 
companies that are available to Federal travelers on official business. 
Some car rental companies extend those discounts to Federal contractor 
employees.
    (f) Obtaining travel discounts.
    (1) To determine which vendors offer discounts to Government 
contractors, the contractor may review commercial publications such as 
the Official Airline guides Official Traveler, Innovata, or National 
Telecommunications. The contractor may also obtain this information from 
GSA contract Travel Management Centers or the Department of Defense's 
Commercial Travel Offices.
    (2) The vendor providing the service may require the Government 
contractor to furnish a letter signed by the contracting officer. The 
following illustrates a standard letter of identification.

                       OFFICIAL AGENCY LETTERHEAD

TO: Participating Vendor
SUBJECT: OFFICIAL TRAVEL OF GOVERNMENT CONTRACTOR

(FULL NAME OF TRAVELER), the bearer of this letter is an employee of 
(COMPANY NAME) which has a contract with this agency under Government 
contract (CONTRACT NUMBER). During the period of the contract (GIVE 
DATES), AND WITH THE APPROVAL OF THE CONTRACT VENDOR, the employee is 
eligible and authorized to use available travel discount rates in 
accordance with Government contracts and/or agreements. Government 
Contract City Pair fares are not available to Contractors.

SIGNATURE, Title and telephone number of Contracting Officer

[65 FR 81009, Dec. 22, 2000]

[[Page 411]]



              SUBCHAPTER I_AGENCY SUPPLEMENTARY REGULATIONS





PART 970_DOE MANAGEMENT AND OPERATING CONTRACTS--Table of Contents




Sec.

   Subpart 970.01_Management and Operating Contract Regulatory System

970.0100 Scope of part.
970.0103 Publication and codification.

  Subpart 970.03_Improper Business Practices and Personal Conflicts of 
                                Interest

970.0309 Whistleblower protection of contractor employees.
970.0309-1 Applicability.
970.0370 Management controls and improvements.
970.0370-1 Policy.
970.0370-2 Contract clause.
970.0371 Conduct of employees of DOE management and operating 
          contractors.
970.0371-1 Scope of section.
970.0371-2 Applicability.
970.0371-3 Definition.
970.0371-4 Gratuities.
970.0371-5 Use of privileged information.
970.0371-6 Incompatibility between regular duties and private interests.
970.0371-7 Outside employment of contractor employees.
970.0371-8 Employee disclosure concerning other employment services.
970.0371-9 Contract clause.

                  Subpart 970.04_Administrative Matters

970.0404 Safeguarding classified information.
970.0404-1 Definitions.
970.0404-2 General.
970.0404-3 Responsibilities of contracting officers.
970.0404-4 Solicitation provision and contract clauses.
970.0407 Contractor records retention.
970.0407-1 Applicability.
970.0407-1-1 Alternate retention schedules.
970.0407-1-2 Access to and ownership of records.
970.0407-1-3 Contract clause.
970.0470 Department of Energy Directives.
970.0470-1 General.
970.0470-2 Contract clause.

        Subpart 970.08_Required Sources of Supplies and Services

970.0801 Excess personal property.
970.0801-1 Policy.
970.0808 Acquisition of printing.
970.0808-1 Scope of section.
970.0808-2 Policy.
970.0808-3 Contract clause.

                Subpart 970.09_Contractor Qualifications

970.0905 Organizational conflicts of interest.
970.0970 Performance guarantees.
970.0970-1 Determination of responsibility.
970.0970-2 Solicitation provision.

                 Subpart 970.11_Describing Agency Needs

970.1100 Policy.
970.1100-1 Performance-based contracting.
970.1100-2 Additional considerations.
970.1103-4 Contract clause.

                Subpart 970.15_Contracting by Negotiation

970.1504 Contract pricing.
970.1504-1 Price analysis
970.1504-1-1 Fees for management and operating contracts.
970.1504-1-2 Fee policy.
970.1504-1-3 Special considerations: Laboratory management and 
          operation.
970.1504-1-4 Types of contracts and fee arrangements.
970.1504-1-5 General considerations and techniques for determining fixed 
          fees.
970.1504-1-6 Calculating fixed fee.
970.1504-1-7 Fee base.
970.1504-1-8 Special equipment purchases.
970.1504-1-9 Special considerations: Cost-plus-award-fee.
970.1504-1-10 Special considerations: Fee limitations.
970.1504-1-11 Documentation.
970.1504-2 Price negotiation.
970.1504-3 Documentation.
970.1504-3-1 Cost or pricing data.
970.1504-4 Special cost or pricing areas.
970.1504-4-1 Make-or-buy plans.
970.1504-4-2 Policy.
970.1504-4-3 Requirements.
970.1504-5 Solicitation provision contract clauses.

               Subpart 970.17_Special Contracting Methods

970.1706 Management and operating contracts.
970.1706-1 Award, renewal, and extension.
970.1706-2 Contract clause.

Subpart 970.19_Small, Small Disadvantaged and Women-Owned Small Business 
                                Concerns

970.1907 Subcontracting with Small Business, Small Disadvantaged 
          Business and Woman-owned Small Business Concerns.

[[Page 412]]

970.1907-1 Subcontracting plan requirements.

              Subpart 970.22_Application of Labor Policies

970.2200 Scope of subpart.
970.2201 Basic labor policies.
970.2201-1 Labor relations.
970.2201-1-1 General.
970.2201-1-2 Policies.
970.2201-1-3 Contract clause.
970.2201-2 Overtime management.
970.2201-2-1 Policy.
970.2201-2-2 Contract clause.
970.2204 Labor standards for contracts involving construction.
970.2204-1 Statutory and regulatory requirements.
970.2204-1-1 Administrative controls and criteria for application of the 
          Davis-Bacon Act in operational or maintenance activities.
970.2208 Equal Employment Opportunity.
970.2210 Service contract act.
970.2270 Unemployment compensation.

Subpart 970.23_Environment, Conservation, Occupational Safety, and Drug 
                             Free Work Place

970.2303 Hazardous materials identification and material safety.
970.2303-1 General.
970.2303-2 Contract clauses.
970.2304 Use of recovered/recycled materials.
970.2304-1 General.
970.2304-2 Contract clause.
970.2305 Workplace substance abuse programs--Management and operating 
          contracts.
970.2305-1 General.
970.2305-2 Applicability.
970.2305-3 Definitions.
970.2305-4 Solicitation provision and contract clause.
970.5223-5 DOE motor vehicle fleet fuel efficiency.
970.2306 Suspension of payments, termination of contract, and debarment 
          and suspension actions.
970.2307 Contracting for Environmentally Preferable and Energy-Efficient 
          Products and Services.
970.2307-1 Motor vehicle fleet operations.
970.2307-2 Contract clause.

               Subpart 970.26_Other Socioeconomic Programs

970.2670 Implementation of Section 3021 of the Energy Policy Act of 
          1992.
970.2670-1 Requirements.
970.2671 Diversity.
970.2671-1 Policy.
970.2671-2 Contract clause.
970.2672 Implementation of Section 3161 of the National Defense 
          Authorization Act for Fiscal Year 1993.
970.2672-1 Policy.
970.2672-2 Requirements.
970.2672-3 Contract clause.
970.2673 Regional partnerships.
970.2673-1 Policy.
970.2673-2 Contract clause.

              Subpart 970.27_Patents, Data, and Copyrights

970.2701 General.
970.2701-1 Applicability.
970.2702 Patent related clauses.
970.2702-1 Authorization and consent.
970.2702-2 Notice and assistance regarding patent and copyright 
          infringement.
970.2702-3 Patent indemnity.
970.2702-4 Royalties.
970.2702-5 Rights to proposal data.
970.2702-6 Notice of right to request patent waiver.
970.2703 Patent rights.
970.2703-1 Purposes of patent rights clauses.
970.2703-2 Patent rights clause provisions for management and operating 
          contractors.
970.2704 Rights in data.
970.2704-1 General.
970.2704-2 Procedures.
970.2704-3 Contract clauses.
970.2770 Technology transfer.
970.2770-1 General.
970.2770-2 Policy.
970.2770-3 Technology transfer and patent rights.
970.2770-4 Contract clause.

                   Subpart 970.28_Bonds and Insurance

970.2803 Insurance.
970.2803-1 Workers' compensation insurance.
970.2803-2 Contract clause.

                          Subpart 970.29_Taxes

970.2902 Federal excise taxes.
970.2902-1 Exemptions from federal excise taxes.
970.2903 State and local taxes.
970.2903-1 Applicability of state and local taxes to the Government.
970.2904 Contract clauses.
970.2904-1 Management and operating contracts.

                Subpart 970.30_Cost Accounting Standards

970.3002 CAS Program Requirements.
970.3002-1 Applicability.

[[Page 413]]

         Subpart 970.31_Contract Cost Principles and Procedures

970.3101-00-70 Scope of subpart.
970.3101-9 Advance agreements.
970.3101-10 Cost certification.
970.3102-3-70 Home office expenses
970.3102-05 Application of cost principles.
970.3102-05-4 Bonding costs.
970.3102-05-6 Compensation for personal services.
970.3102-05-18 Independent research and development and bid and proposal 
          costs.
970.3102-05-19 Insurance and indemnification.
970.3102-05-22 Lobbying and political activity costs.
970.3102-05-28 Other business expenses.
970.3102-05-30 Patent costs and technology transfer costs.
970.3102-05-33 Professional and consultant service costs. (Department 
          coverage-paragraph (g)).
970.3102-05-46 Travel costs.
970.3102-05-47 Costs related to legal and other proceedings.
970.3102-05-70 Preexisting conditions.
970.3170 Contract clause.

                    Subpart 970.32_Contract Financing

970.3200 Policy.
970.3200-1 Reduction or suspension of advance, partial, or progress 
          payments.
970.3200-1-1 Contract clause.
970.3204 Advance payments.
970.3204-1 Applicability.
970.3270 Standard financial management clauses.

                 Subpart 970.34_Major System Acquisition

970.3400 General requirements.
970.3400-1 Mission-oriented solicitation.

           Subpart 970.35_Research and Development Contracting

970.3500 Scope of subpart.
970.3501 Federally funded research and development centers.
970.3501-1 Sponsoring agreements.
970.3501-2 Using an FFRDC.
970.3501-3 Reviewing FFRDC's.
970.3501-4 Contract Clause.

      Subpart 970.36_Construction and Architect-Engineer Contracts.

970.3605 Contract clauses.
970.3605-1 Other contracts.
970.3605-2 Special construction clause for operating contracts.

            Subpart 970.37_Facilities Management Contracting

970.3770 Facilities management.
970.3770-1 Policy.
970.3770-2 Contract clause.

             Subpart 970.41_Acquisition of Utility Services

970.4102 Acquiring utility services.
970.4102-1 Policy.

                 Subpart 970.42_Contract Administration

970.4207-03-02 Certificate of costs.
970.4207-03-70 Contract clause.
970.4207-05-01 Contracting officer determination procedure.

                  Subpart 970.43_Contract Modifications

970.4302 Changes.
970.4302-1 Contract Clause.

      Subpart 970.44_Management and Operating Contractor Purchasing

970.4400 Scope.
970.4401 Responsibilities.
970.4401-1 General.
970.4401-2 Review and approval.
970.4401-3 Advance notification.
970.4402 Contractor purchasing system.
970.4402-1 Policy.
970.4402-2 General requirements.
970.4402-3 Purchasing from contractor-affiliated sources.
970.4402-4 Nuclear material transfers.
970.4403 Contract clause.

                   Subpart 970.45_Government Property

970.4501 General.
970.4501-1 Contract clause.

                 Subpart 970.49_Termination of Contracts

970.4905 Contract termination clause.
970.4905-1 Termination for convenience of the government and default.

            Subpart 970.50_Extraordinary Contractual Actions

970.5004 Residual powers.
970.5004-1 Contract clause.
970.5070 Indemnification.
970.5070-1 Scope and applicability.
970.5070-2 General.
970.5070-3 Contract clauses.

    Subpart 970.52_Solicitation Provisions and Contract Clauses for 
                   Management and Operating Contracts

970.5200 Scope of subpart.
970.5201 Text of provisions and clauses.
970.5203-1 Management controls.
970.5203-2 Performance improvement and collaboration.
970.5203-3 Contractor's organization.

[[Page 414]]

970.5204-1 Counterintelligence.
970.5204-2 Laws, regulations, and DOE directives.
970.5204-3 Access to and ownership of records.
970.5208-1 Printing.
970.5209-1 Requirement for guarantee of performance.
970.5215-1 Total Available Fee: Base fee amount and performance fee 
          amount.
970.5215-2 Make-or-Buy Plan.
970.5215-3 Conditional payment of fee, profit, or incentives.
970.5215-4 Cost reduction.
970.5215-5 Limitation on fee.
970.5222-1 Collective bargaining agreements--management and operating 
          contracts.
970.5222-2 Overtime management.
970.5223-1 Integration of environment, safety, and health into work 
          planning and execution.
970.5223-2 Affirmative procurement program.
970.5223-3 Agreement regarding workplace substance abuse programs at DOE 
          facilities.
970.5223-4 Workplace Substance Abuse Programs at DOE sites.
970.5223-5 xxx
970.5226-1 Diversity plan.
970.5226-2 Workforce restructuring under Section 3161 of the National 
          Defense Authorization Act for Fiscal Year 1993.
970.5226-3 Community commitment.
970.5227-1 Rights in data--facilities.
970.5227-2 Rights in data--technology transfer.
970.5227-3 Technology transfer mission.
970.5227-4 Authorization and consent.
970.5227-5 Notice and assistance regarding patent and copyright 
          infringement.
970.5227-6 Patent indemnity--subcontracts.
970.5227-7 Royalty information.
970.5227-8 Refund of royalties.
970.5227-9 Notice of right to request patent waiver.
970.5227-10 Patent rights--management and operating contracts, nonprofit 
          organization or small business firm contractor.
970.5227-11 Patent rights--management and operating contracts, for-
          profit contractor, non-technology transfer.
970.5227-12 Patent rights--management and operating contracts, for-
          profit contractor, advance class waiver.
970.5228-1 Insurance--Litigation and claims.
970.5229-1 State and local taxes.
970.5231-4 Preexisting conditions.
970.5232-1 Reduction or suspension of advance, partial, or progress 
          payments upon finding of substantial evidence of fraud.
970.5232-2 Payments and advances.
970.5232-3 Accounts, records, and inspection.
970.5232-4 Obligation of funds.
970.5232-5 Liability with respect to cost accounting standards.
970.5232-6 Work for others funding authorization.
970.5232-7 Financial management system.
970.5232-8 Integrated accounting.
970.5235-1 Federally funded research and development center sponsoring 
          agreement.
970.5236-1 Government facility subcontract approval.
970.5237-2 Facilities management.
970.5242-1 Penalties for unallowable costs.
970.5243-1 Changes.
970.5244-1 Contractor purchasing system.
970.5245-1 Property.

    Authority: 42 U.S.C. 2201, 2282a, 2282b, 2282c; 42 U.S.C. 7101 et 
seq.; 41 U.S.C. 418b; 50 U.S.C. 2401 et seq.

    Source: 65 FR 81009, Dec. 22, 2000, unless otherwise noted.



   Subpart 970.01_Management and Operating Contract Regulatory System



970.0100  Scope of part.

    This part provides Departmental policies, procedures, provisions, 
and clauses that implement and supplement the Federal Acquisition 
Regulation (FAR) and other parts of the Department of Energy Acquisition 
Regulation (DEAR) for the award and administration of the Department's 
management and operating contracts, as defined at 48 CFR subpart 17.6. 
The FAR and other parts of the DEAR apply to management and operating 
contracts. See 48 CFR 970.5200 for guidance regarding which provisions 
and clauses (from FAR, DEAR Part 970, or other parts of the DEAR) to 
include in management and operating contracts.



970.0103  Publication and codification.

    (a) Organization of Part 970. (1) To the extent possible, the titles 
and text of the subparts, sections, and subsections of this part are 
numbered to correspond with related material that is contained in the 
FAR.
    (2) The number to the left of the decimal point represents the DEAR 
part number (i.e., 970). The numbers to the right of the decimal point 
and to the left of the dash represent, in order, the DEAR subpart (first 
two digits), and the DEAR section number (second two digits). The 
numbers to the right of the dash represent the DEAR subsection. A

[[Page 415]]

second dash may follow the DEAR subsection number. As applicable, 
numbers to the right of the second dash represent subordinate 
subsections.
    (3) To the extent practicable, the subpart number corresponds with 
the FAR part which contains related coverage, and the section number 
corresponds with the FAR subpart which contains related coverage (e.g., 
the coverage contained in DEAR 970.0309 corresponds with material 
contained in FAR 3.9).
    (4) Where the FAR does not contain related coverage on a particular 
subject, the DEAR section number will be numbered using numbers of 70 
and up (e.g., 970.0370).
    (b) Special Note Regarding Clause Numbering. The section number for 
clauses prescribed in part 970 are numbered to correspond with the 
subpart in which the clause is prescribed (e.g., 970.5203-1 is 
prescribed for use at subpart 970.03).



  Subpart 970.03_Improper Business Practices and Personal Conflicts of 
                                Interest



970.0309  Whistleblower Protection of Contractor Employees.



970.0309-1  Applicability.

    The contracting officer shall refer to 48 CFR subpart 903.9 
regarding the applicability of the DOE Employee Protection Program to 
management and operating contracts.



970.0370  Management Controls and Improvements.



970.0370-1  Policy.

    (a) Management and operating contractors shall develop and maintain 
systems of management and quality control to discourage waste, fraud and 
abuse; and to ensure that components, products, and services that are 
provided to DOE satisfy the contractor's obligations under the contract.
    (b) As a part of the required overall management structure, the 
contractor must maintain management control systems which, in compliance 
with the requirements of the clause at 48 CFR 970.5203-1:
    (1) Are documented and satisfactory to DOE;
    (2) Ensure that all levels of management are accountable for 
effective management systems and internal controls within their areas of 
assigned responsibility;
    (3) Cover both programmatic and administrative functions;
    (4) Provide reasonable assurance that Government resources are 
safeguarded against theft, fraud, waste, and unauthorized use;
    (5) Promote efficient and effective operations;
    (6) Ensure that all obligations and costs incurred are in compliance 
with the intended purposes and the terms and conditions of the contract;
    (7) Properly record, manage, and report all revenues, expenditures, 
transactions and assets;
    (8) Maintain financial, statistical and other reports necessary to 
maintain accurate, reliable, and timely accountability and management 
controls;
    (9) Are periodically reviewed to ensure that the systems provide 
reasonable assurance that the objectives of the system are being 
accomplished and that these controls are working effectively;
    (10) Are in accordance with the Comptroller General's standards for 
internal controls, as set forth in the General Accounting Office Policy 
and Procedures Manual For Guidance To Federal Agencies, (Oct 1984), as 
amended.
    (c) Management and operating contractors shall also develop and 
maintain a baseline program of quality assurance that will implement 
documented performance and quality standards, and management controls 
and assessment techniques to ensure components, services, and products 
meet DOE's, design criteria and other governing and applicable 
specifications.
    (d) DOE expects all its contractors to seek to identify improvements 
in any aspect of performance. Management and operating contracts are 
very large and complex; therefore, the opportunities to identify changes 
in performance that will increase the effectiveness or efficiency of 
contract performance are more prevalent than under other contracts. The 
clause at 48 CFR 970.5203-2 requires DOE management and operating 
contractors to affirmatively seek to identify, evaluate, and institute,

[[Page 416]]

where appropriate, processes that will improve the effectiveness or 
efficiency of any aspect of contract performance. It further requires 
the contractor to communicate any such improvements to DOE, other 
management and operating contractors, and DOE major facilities 
contractors. The contractor is required to participate in efforts by 
those contractors to address common problems or the institution of 
improvements. It allows the contractor to enlist the aid of the DOE 
contracting officer where necessary to institute or communicate the 
improvements. The obligations under the clause in no way affect the 
contractor's obligations under other provisions of the contract to 
notify or acquire the approval of the contracting officer.



970.0370-2  Contract clause.

    (a) The contracting officer shall insert the clause at 970.5203-1, 
Management Controls, in all management and operating contracts.
    (b) The contracting officer shall insert the clause at 970.5203-2, 
Performance Improvement and Collaboration, in all management and 
operating contracts.



970.0371  Conduct of employees of DOE management and operating contractors.



970.0371-1  Scope of section.

    This section establishes the policies for maintaining satisfactory 
standards of conduct on the part of individuals employed by DOE 
management and operating contractors.



970.0371-2  Applicability.

    The policies in this section are applicable to all DOE management 
and operating contractors.



970.0371-3  Definition.

    Employees, as used in this section, are defined to mean individuals 
employed by the contractor, both full and part-time, who are assigned to 
work under a DOE management and operating contract.



970.0371-4  Gratuities.

    Employees of a management and operating contractor shall not, under 
circumstances which might reasonably be interpreted as an attempt to 
influence the recipients in the conduct of their duties, accept any 
gratuity or special favor from individuals or organizations with whom 
the contractor is doing business, or proposing to do business, in 
accomplishing the work under the contract. Reference is made to the 
requirements prescribed in 48 CFR 3.502.



970.0371-5  Use of privileged information.

    Management and operating contractor employees shall not use 
privileged information for personal gain, or make other improper use of 
privileged information which is acquired in connection with their 
employment on contract work. For the purposes of this subsection, the 
term ``privileged information'' includes but is not limited to, 
unpublished information relating to technological and scientific 
developments; medical, personnel, or security records of individuals; 
anticipated materials' requirements or pricing action; possible new 
sites for DOE program operations; internal DOE decisions; policy 
development; and knowledge of selections of contractors or 
subcontractors in advance of official announcement.



970.0371-6  Incompatibility between regular duties and private interests.

    (a) Employees of a management and operating contractor shall not be 
permitted to make or influence any decisions on behalf of the contractor 
which directly or indirectly affect the interest of the Government, if 
the employee's personal concern in the matter may be incompatible with 
the interest of the Government. For example: An employee of a contractor 
will not negotiate, or influence the award of, a subcontract with a 
company in which the individual has an employment relationship or 
significant financial interest; and an employee of a contractor will not 
be assigned the preparation of an evaluation for DOE or for any DOE 
contractor of some technical aspect of the work of another organization 
with which the individual has an employment relationship, or significant 
financial interest, or which is a competitor

[[Page 417]]

of an organization (other than the contractor who is the individual's 
regular employer) in which the individual has an employment relationship 
or significant financial interest.
    (b) The contractor shall be responsible for informing employees that 
they are expected to disclose any incompatibilities between duties 
performed for the contractor and their private interests and to refer 
undecided questions to the contractor.



970.0371-7  Outside employment of contractor employees.

    Employees of a management and operating contractor are entitled to 
the same rights and privileges with respect to outside employment as 
other citizens. Therefore, there is no general prohibition against 
contractor employees having outside employment. However, no employee of 
a contractor performing work on a full or part-time basis under a DOE 
management and operating contract may engage in employment outside 
official hours of duty or while on leave if such employment will:
    (a) In any manner interfere with the proper and effective 
performance of the duties of the position;
    (b) Appear to create a conflict-of-interest situation, or
    (c) Appear to subject DOE or the contractor to public criticism or 
embarrassment.



970.0371-8  Employee disclosure concerning other employment services.

    (a) Management and operating contractors are responsible for 
requiring its employees to file with the contractor, a written 
disclosure statement concerning outside employment services which 
involve the use of information in the area of the employee's employment 
with the contractor. The disclosure shall contain such information 
concerning the outside employment as the contractor may prescribe. As a 
minimum, the employee's disclosure shall:
    (1) Acknowledge that the employee has read and is familiar with:
    (i) The requirements and restrictions prescribed in this section,
    (ii) DOE publication entitled, ``Reporting Results of Scientific and 
Technical Work Funded by DOE'', and
    (iii) The requirements of the contractor's contract with DOE 
relating to patents.
    (2) Include information concerning any rate of remuneration 
significantly in excess of the employee's regular rate of remuneration;
    (3) Identify any actual or potential conflicts with DOE's policies 
regarding conduct of employees of DOE's contractors set forth in this 
section;
    (4) Address any potential impacts that such employment may have on 
the contractor's responsibility to report fully and promptly to DOE all 
significant research and development information; and
    (5) Identify any potential conflicts such employment may have with 
the patent provisions of the contractor's contract with DOE.
    (b) The contractor shall provide a copy of all disclosures to the 
contracting officer.



970.0371-9  Contract clause.

    The contracting officer shall insert the clause at 970.5203-3, 
Contractor's Organization, in all management and operating contracts. 
The approval authority of the Secretary of Energy required in paragraph 
(c) may not be delegated. In paragraph (a) the words ``and managerial 
personnel (see 48 CFR 970.5245-1(j))'' may be inserted after ``(see 48 
CFR 952.215-70)''.



                  Subpart 970.04_Administrative Matters



970.0404  Safeguarding classified information.



970.0404-1  Definitions.

    Access Authorization means an administrative determination that an 
individual is eligible for access to classified information or is 
eligible for access to, or control over, special nuclear material.
    Classified Information means any information or material that is 
owned by or produced for, or is under the control of the United States 
Government, and determined pursuant to provisions of Executive Order 
12356 of April 2, 1982 (3

[[Page 418]]

CFR, 1982 Comp., p. 166), or prior orders, or as authorized under the 
Atomic Energy Act of 1954, as amended, to require protection against 
unauthorized disclosure, and is so designated.
    Counterintelligence means information gathered and activities 
conducted to protect against espionage, other intelligence activities, 
sabotage, or assassinations conducted for or on behalf of foreign 
powers, organizations or persons, or international terrorist activities, 
but not including personnel, physical, document or communication 
security programs.
    Facility Clearance means an administrative determination that a 
facility is eligible to access, produce, use or store classified 
information or special nuclear material.
    Restricted Data means all data concerning design, manufacture, or 
utilization of atomic weapons; the production of special nuclear 
material; or the use of special nuclear material in the production of 
energy; but shall not include data declassified or removed from the 
Restricted Data category pursuant to section 142 of the Atomic Energy 
Act of 1954, as amended, (42 U.S.C. 2162).

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 14878, Mar. 28, 2002]



970.0404-2  General.

    (a) Guidance regarding the National Industrial Security Program as 
implemented by the Department of Energy may be found at 904.4, 
Safeguarding Classified Information Within Industry. Additional 
information concerning contractor ownership when national security or 
atomic energy information is involved may be found at 904.70. 
Information regarding contractor ownership involving national security 
program contracts may be found at 904.71.
    (b) Executive Order 12333, United States Intelligence Activities, 
provides for the organization and control of United States foreign 
intelligence and counterintelligence activities. DOE has established a 
counterintelligence program subject to this Executive Order which is 
described in DOE Order 5670.3 (as amended). All DOE elements, including 
management and operating contractors and other contractors managing DOE-
owned facilities which require access authorizations, should undertake 
the necessary precautions to ensure that DOE and covered Contractor 
personnel, programs and resources are properly protected from foreign 
intelligence threats and activities.
    (c) For DOE management and operating contracts and other contracts 
designated by the Procurement Executive, or designee, the clause 
entitled, ``Conditional Payment of Fee, Profit, and Other Incentives--
Facility Management Contracts,'' implements the requirements of section 
234B of the Atomic Energy Act (see 48 CFR 904.402(c)(1)) for the use of 
a contract clause that provides for an appropriate reduction in the fee 
or amount paid to the contractor under the contract in the event of a 
violation by the contractor or any contractor employee of any rule, 
regulation, or order relating to the safeguarding or security of 
Restricted Data or other classified information. The clause, in part, 
provides for reductions in the amount of fee, profit, or share of cost 
savings that is otherwise earned by the contractor for performance 
failures relating to the safeguarding of Restricted Data and other 
classified information.

[67 FR 14878, Mar. 28, 2002, as amended at 68 FR 68781, Dec. 10, 2003]



970.0404-3  Responsibilities of contracting officers.

    (a) Management and operating contracts which may require the 
processing or storage of Restricted Data or Special Nuclear Material 
require application of the applicable DOE Directives in the safeguards 
and security series.
    (b) The contracting officer shall refer to 48 CFR 904.71 for 
guidance concerning the prohibition on award of a DOE contract under a 
national security program to a company owned by an entity controlled by 
a foreign government when access to proscribed information is required 
to perform the contract.

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 14878, Mar. 28, 2002]

[[Page 419]]



970.0404-4  Solicitation provision and contract clauses.

    (a) The contracting officer shall insert the clause at 970.5204-1, 
Counterintelligence, into all management and operating contracts and 
other contracts for the management of DOE-owned facilities which include 
the security and classification/declassification clauses.
    (b) The contracting officer shall refer to 48 CFR 904.404 and 48 CFR 
904.7103 for the prescription of solicitation provisions and contract 
clauses relating to safeguarding classified information and foreign 
ownership, control, or influence over contractors.



970.0407  Contractor records retention.



970.0407-1  Applicability.



970.0407-1-1  Alternate retention schedules.

    Records produced under the Department's contracts involving 
management and operation responsibilities relative to DOE-owned or -
leased facilities are to be retained and disposed of in accordance with 
the guidance contained in DOE G 1324.5B, Records Management Program and 
DOE Records Schedules (see current version), rather than those set forth 
at 48 CFR subpart 4.7, Contractor Records Retention.



970.0407-1-2  Access to and ownership of records.

    Contracting officers may agree to contractor ownership of certain 
categories of records designated in the instruction contained in 
paragraph (b) of the clause at 48 CFR 970.5204-3, Access to and 
Ownership of Records, provided the Government's rights to inspect, copy, 
and audit these records are not limited. These rights must be retained 
by the Government in order to carry out the Department's statutory 
responsibilities required by the Atomic Energy Act and other statutes 
for oversight of its contractors, including compliance with the 
Department's health, safety and reporting requirements, and protection 
of the public interest.



970.0407-1-3  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5204-
3, Access to and Ownership of Records, in management and operating 
contracts.



970.0470  Department of Energy Directives.



970.0470-1  General.

    (a) The contractor is required to comply with the requirements of 
applicable Federal, State and local laws and regulations, unless relief 
has been granted by the appropriate authority. For informational 
purposes, the contracting officer may append the contract with a list of 
applicable laws or regulations (see 970.5204-2, Laws, Regulations, and 
DOE Directives, paragraph (a)).
    (b) The Department of Energy Directives System is a system of 
instructions, including orders, notices, manuals, guides, and standards, 
for Departmental elements. In certain circumstances, requirements 
contained in these directives may apply to a contractor through 
operation of a contract clause. Program and requirements personnel are 
responsible for identifying requirements in the Directives System which 
are applicable to a contract, and for developing a list of applicable 
requirements and providing it to the contracting officer for inclusion 
in the contract.
    (c) Where directives requirements are established using either the 
Standards/Requirements Identification Process or the Work Smart 
Standards Process, the applicable process should also be used to 
establish the environment, safety, and health portion of the list 
identified in paragraph (b) of this section.
    (d) Environmental, safety, and health (ES&H) requirements 
appropriate for work conducted under a management and operating contract 
may be determined by a DOE approved process to evaluate the work and the 
associated hazards, and identify an appropriately tailored set of 
standards, practices, and controls, such as a tailoring process included 
in a DOE approved Safety Management System implemented under 48 CFR 
970.5223-1, Integration of Environment, Safety, and Health into Work 
Planning and Execution. When such a process is used, the contracting 
officer

[[Page 420]]

shall ensure that the set of tailored requirements, as approved by DOE 
pursuant to the process, is incorporated into the list identified in 
paragraph (b) of this section. These requirements shall supersede, in 
whole or in part, the contractual environmental, safety, and health 
requirements previously made applicable to the contract by List B. If 
the tailored set of requirements identifies an alternative requirement 
which varies from an ES&H requirement of an otherwise applicable law or 
regulation, the contractor must request an exemption or other 
appropriate regulatory relief that may be specified in the governing 
regulation.



970.0470-2  Contract clause.

    The contracting officer shall insert the clause at DEAR 970.5204-2, 
Laws, Regulations, and DOE Directives, in management and operating 
contracts. The contracting officer may modify the clause to indicate the 
location in the contract of List A, List B, or both.



        Subpart 970.08_Required sources of supplies and services



970.0801  Excess personal property.



970.0801-1  Policy.

    The provisions of 48 CFR subpart 8.1 (Federal Acquisition 
Regulation), 41 CFR 101-43 (Federal Property Management Regulation), and 
41 CFR 109-43 (DOE Property Management Regulation) apply to DOE's 
management and operating contracts.



970.0808  Acquisition of printing.



970.0808-1  Scope of section.

    This section prescribes the Department's policy concerning 
duplicating or printing services which may be required in the 
performance of management and operating contracts.



970.0808-2  Policy.

    Management and operating contractors shall provide or secure 
duplication and printing services in accordance with the Government 
Printing and Binding Regulations, Title 44 of the U.S. Code, and 
applicable DOE Directives.



970.0808-3  Contract clause.

    The contracting officer shall insert the clause at 970.5208-1, 
Printing, in all management and operating contracts.



                Subpart 970.09_Contractor qualifications



970.0905  Organizational conflicts of interest.

    Management and operating contracts shall contain an organizational 
conflict of interest clause substantially similar to the clause at 48 
CFR 952.209-72, Organizational Conflicts of Interest, and which is 
appropriate to the statement of work of the individual contract. In 
addition, the contracting officer shall assure that the clause contains 
appropriate restraints on intra-corporate relations between the 
contractor's organization and personnel operating the Department's 
facility and its parent corporate body and affiliates. Such restraints 
shall include personnel access to the facility, technical transfer of 
information from the facility, and the availability from the facility of 
other advantages flowing from performance of the contract. The 
contracting officer is responsible for ensuring that M&O contractors 
adopt policies and procedures in the award of subcontracts that will 
meet the Department's need to safeguard against a biased work product 
and an unfair competitive advantage. To this end, the organizational 
conflicts of interest clause in management and operating contracts shall 
include Alternate I.



970.0970  Performance guarantees.



970.0970-1  Determination of responsibility.

    (a) In the award of a management and operating contract, the 
contracting officer shall determine that the prospective contractor is a 
responsible contractor and is capable of providing all necessary 
financial, personnel, and other resources in performance of the 
contract.
    (b) DOE contracts with entities that have been created solely for 
the purpose of performing a specific management and operating contract. 
Generally, such newly created entities will have very limited financial 
and other

[[Page 421]]

resources. In such instances, when making the determination of 
responsibility required under this section, the contracting officer may 
evaluate the financial resources of other entities only to the extent 
that those entities are legally bound, jointly and severally if more 
than one, by means of a performance guarantee or other equivalent 
enforceable commitment to supply the necessary resources to the 
prospective contractor and to assume all contractual obligations of the 
prospective contractor. A performance guarantee should be the means used 
unless an equivalent degree of commitment can be obtained by an 
alternative means.
    (c) The guaranteeing corporate entity(ies) must be found to have 
sufficient resources in order to satisfy its guarantee.



970.0970-2  Solicitation provision.

    The contracting officer shall insert the provision at 48 CFR 
970.5209-1, Requirement for Guarantee of Performance, in solicitations 
when the awardee will be required to be organized solely for performance 
of the requirement.



                 Subpart 970.11_Describing Agency Needs



970.1100  Policy.



970.1100-1  Performance-based contracting.

    (a) It is the policy of the Department of Energy to use, to the 
maximum extent practicable, performance-based contracting methods in its 
management and operating contracts. Office of Federal Procurement Policy 
Letter 91-2 provides guidance concerning the development and use of 
performance-based contracting concepts and methodologies that may be 
generally applied to management and operating contracts. Performance-
based contracts: Describe performance requirements in terms of results 
rather than methods of accomplishing the work; use measurable (i.e., 
terms of quality, timeliness, quantity) performance standards and 
objectives and quality assurance surveillance plans; provide performance 
incentives (positive or negative) where appropriate; and specify 
procedures for award or incentive fee reduction when work activities are 
not performed or do not meet contract requirements.
    (b) The use of performance-based statements of work, where feasible, 
is the preferred method for establishing work requirements. Such 
statements of work and other documents used to establish work 
requirements (such as work authorization directives) should describe 
performance requirements and expectations in terms of outcome, results, 
or final work products, as opposed to methods, processes, or design.
    (c) Contract performance requirements and expectations should be 
consistent with the Department's strategic planning goals and 
objectives, as made applicable to the site or facility through 
Departmental programmatic and financial planning processes. Measurable 
performance criteria, objective measures, and where appropriate, 
performance incentives, shall be structured to correspond to the 
performance requirements established in the statement of work and other 
documents used to establish work requirements.
    (d) Quality assurance surveillance plans shall be developed to 
facilitate the assessment of contractor performance and ensure the 
appropriateness of any award or incentive fee payment. Such plans shall 
be tailored to the contract performance objectives, criteria, and 
measures, and shall, to the maximum extent practicable, focus on the 
level of performance required by the performance objectives rather than 
the methodology used by the contractor to achieve that level of 
performance.



970.1100-2  Additional considerations.

    (a) While it is not feasible to set forth standard language which 
would apply to every contract situation, language must be designed for 
inclusion in a management and operating contract to describe clearly the 
work being undertaken; the controls, as appropriate, to be exercised by 
DOE over the performance of that work; and the relationship contemplated 
between the parties.
    (b) The language shall also include the following with respect to 
subcontracting performance of the work described pursuant to paragraph 
(a) of this section: ``The contractor shall,

[[Page 422]]

when directed by DOE and may, but only when authorized by DOE, enter 
into subcontracts for the performance of any part of the work under this 
clause.''
    (c) The provisions required in paragraphs (a) and (b) of this 
section shall be set forth in the statement of work of the contract.



970.1103-4  Contract clause.

    Insert the clause at 48 CFR 52.211-5, Material Requirements, in 
solicitations and contracts.



                Subpart 970.15_Contracting by Negotiation



970.1504  Contract pricing.



970.1504-1  Price analysis.



970.1504-1-1  Fees for management and operating contracts.

    This subsection sets forth the Department's policies on fees for 
management and operating contracts and may be applied to other contracts 
as determined by the Procurement Executive, or designee.



970.1504-1-2  Fee policy.

    (a) DOE management and operating contractors may be paid a fee in 
accordance with the requirements of this subsection.
    (b) There are three basic principles underlying the Department's fee 
policy:
    (1) The amount of available fee should reflect the financial risk 
assumed by the contractor.
    (2) It is the policy of the Department, when work elements cannot be 
fixed price, incentive fees (including award fees) tied to objective 
measures should be used to the maximum extent appropriate.
    (3) When work elements cannot be fixed price and award fees are 
employed, they should be tied to either objective or subjective 
measures. Each measure should, to the maximum extent appropriate, be 
directly tied to a specific portion of the fee pool.
    (c) Fee objectives and amounts are to be determined for each 
contract. Standard fees or across-the-board fee agreements will not be 
used or made. Due to the nature of funding management and operating 
contracts, it is anticipated that fee shall be established in accordance 
with the annual funding cycle; however, with the prior approval of the 
Procurement Executive, or designee, a longer period may be used where 
necessary to incentivize performance objectives that span funding cycles 
or to optimize cost reduction efforts.
    (d) Annual fee amounts shall be established in accordance with this 
subsection. Annual amounts shall not exceed maximum amounts derived from 
the appropriate fee schedule (and Classification Factor, if applicable) 
unless approved in advance by the Procurement Executive, or designee. In 
no event shall any fee exceed statutory limits imposed by 41 U.S.C. 
254(b).
    (e)(1) Contracting Officers shall include negative fee incentives in 
contracts when appropriate. A negative fee incentive is one in which the 
contractor will not be paid the full target fee amount when the actual 
performance level falls below the target level established in the 
contract.
    (2) Negative fee incentives may only be used when:
    (i) A target level of performance can be established, which the 
contractor can reasonably be expected to reach;
    (ii) The value of the negative incentive is commensurate with the 
lower level of performance and any additional administrative costs;
    (iii) Factors likely to prevent attainment of the target level of 
performance are clearly within the control of the contractor; and
    (iv) The contract indicates clearly a level below which performance 
is not acceptable.
    (f) Prior to the issuance of a competitive solicitation or the 
initiation of negotiations for an extension of an existing contract, the 
HCA shall coordinate the maximum available fee, as allowed by 48 CFR 
970.1504-1-1, and the fee amount targeted for negotiation, if less, with 
the Procurement Executive, or designee. Solicitations shall identify 
maximum available fee under the contract and may invite offerors to 
propose fee less than the maximum available.

[[Page 423]]

    (g) When a contract subject to this subsection requires a contractor 
to use its own facilities or equipment, or other resources to make its 
own cost investment for contract performance, (e.g., when there is no 
letter-of-credit financing) consideration may be given, subject to 
approval by the Procurement Executive, or designee, to increasing the 
total available fee amount above that otherwise provided by this 
subsection.
    (h) Multiple fee arrangements should be used in accordance with 48 
CFR 970.1504-1-4.
    (i)(1) In addition to other performance requirements specified in 
the contract, DOE management and operating contractors and other 
contractors designated by the Procurement Executive, or designee, are 
subject to performance requirements relating to: environment, safety, 
and health (ES&H), including worker safety and health (WS&H); and 
safeguarding of Restricted Data and other classified information. 
Performance requirements relating to ES&H will be set forth in the 
contract's ES&H terms and conditions, including a DOE approved 
Integrated Safety Management System (ISMS), or similar document. As 
applicable, performance requirements relating to the safeguarding of 
Restricted Data and other classified information will be set forth in 
the clauses of the contract entitled ``Security'' and ``Laws, 
Regulations, and DOE Directives,'' as well as in other terms and 
conditions that prescribe requirements for the safeguarding of 
Restricted Data and other classified information.
    (2) If the contractor does not meet the performance requirements of 
the contract relating to ES&H or to the safeguarding of Restricted Data 
and other classified information, otherwise earned fee, fixed fee, 
profit, or share of cost savings may be unilaterally reduced by the 
contracting officer in accordance with the clause entitled ``Conditional 
Payment of Fee, Profit, and Other Incentives--Facility Management 
Contracts.''
    (3) The clause entitled ``Conditional Payment of Fee, Profit, and 
Other Incentives--Facility Management Contracts,'' provides for 
reductions of earned fee, fixed fee, profit, or share of cost savings 
under the contract depending upon the severity of the contractor's 
performance failure relating to ES&H requirements and, if applicable, 
relating to the safeguarding of Restricted Data and other classified 
information. When reviewing performance failures that would otherwise 
warrant a potential reduction of earned fee, fixed fee, profit, or share 
of cost savings, the contracting officer must consider mitigating 
factors that may warrant a reduction below the applicable range 
specified in the clause. Some of the mitigating factors that must be 
considered are included in the clause.
    (4) The contracting officer must obtain the concurrence of the 
cognizant Program Secretarial Officer
    (i) Prior to effecting any reduction of fee or profit in accordance 
with the terms and conditions of the clause entitled, ``Conditional 
Payment of Fee, Profit, and Other Incentives--Facility Management 
Contracts;'' and
    (ii) For determinations that no reduction of fee or profit is 
warranted for a particular performance failure(s) that would otherwise 
be subject to a reduction.

[65 FR 81009, Dec. 22, 2000, as amended at 68 FR 68781, Dec. 10, 2003]



970.1504-1-3  Special considerations: Laboratory management and operation.

    (a) For the management and operation of a laboratory, the 
contracting officer shall consider whether any fee is appropriate. 
Considerations should include:
    (1) The nature and extent of financial or other liability or risk 
assumed or to be assumed under the contract;
    (2) The proportion of retained earnings (as established under 
generally accepted accounting methods) that are utilized to fund the 
performance of work related to the DOE contracted effort;
    (3) Facilities capital or capital equipment acquisition plans;
    (4) Other funding needs, to include contingency funding, working 
capital funding, and provision for funding unreimbursed costs deemed 
ordinary and necessary;
    (5) The utility of fee as a performance incentive; and

[[Page 424]]

    (6) The need for fee to attract qualified contractors, 
organizations, and institutions.
    (b) In the event fee is considered appropriate, the contracting 
officer shall determine the amount of fee in accordance with this 
subsection.
    (1) Costs incurred in the operation of a laboratory that are 
allowable and allocable under the cost principles (i.e., commercial 
using 48 CFR 31.2, nonprofit using OMB Circular A-122, or university-
affiliated using OMB Circular A-21), regulations (including 48 CFR 
970.31), or statutes applicable to the operating contractor should be 
classified as direct or indirect (overhead or G&A) charges to the 
contract and not included as proposed fee. Exceptions must be approved 
by the Procurement Executive, or designee.
    (2) Except as specified in 48 CFR 970.1504-1-3(c)(3), the maximum 
total amount of fee shall be calculated in accordance with 48 CFR 
970.1504-1-5 or 48 CFR 970.1504-1-9, as appropriate. The total amount of 
fee under any laboratory management and operating contract or other 
designated contract shall not exceed, and may be significantly less 
than, the result of that calculation. In determining the total amount of 
fee, the contracting officer shall consider the evaluation of the 
factors in paragraph (a) of this subsection as well as any benefits the 
laboratory operator will receive due to its tax status.
    (c) In the event fee is considered appropriate, the contracting 
officer shall establish the type of fee arrangement in accordance with 
this subsection.
    (1) The amount of fee may be established as total available fee with 
a base fee portion and a performance fee portion. Base fee, if any, 
shall be an amount in recognition of the risk of financial liability 
assumed by the contractor and shall not exceed the cost risk associated 
with those liabilities or the amount calculated in accordance with 48 
CFR 970.1504-1-5, whichever is less. The total available fee, excepting 
any base fee, shall normally be associated with performance at or above 
the target level of performance as defined by the contract. If 
performance in either of the two general work categories appropriate for 
laboratories (science/technology and support) is rated at less than the 
target level of performance, the total amount of the available fee shall 
be subject to downward adjustment. Such downward adjustment shall be 
subject to the terms of the clause at 48 CFR 970.5215-3, Conditional 
Payment of Fee, Profit, and Other Incentives--Facility Management 
Contracts, if contained in the contract.
    (2) The amount of fee may be established as a fixed fee in 
recognition of the risk of financial liability to be assumed by the 
contractor, with such fixed fee amount not exceeding the cost risk 
associated with the liabilities assumed or the amount of fee calculated 
in accordance with 48 CFR 970.1504-1-5, whichever is less.
    (3) If the fixed fee or total available fee exceeds 75% of the fee 
that would be calculated per 48 CFR 970.1504-1-5 or 48 CFR 970.1504-1-9; 
or if a fee arrangement other than one of those set forth in paragraphs 
(c) (1) or (2) of this subsection is considered appropriate, the 
approval of the Procurement Executive, or designee, shall be obtained 
prior to its use.
    (4) Fee, if any, as well as the type of fee arrangement, will 
normally be established for the life of the contract. It will be 
established at time of award, as part of the extend/compete decision, at 
the time of option exercise, or at such other time as the parties can 
mutually reach agreement, e.g., negotiations. Such agreement shall 
require the approval of the Procurement Executive, or designee.
    (5) Fee established for longer than one year shall be subject to 
adjustment in the event of a significant change (greater than 10% or a lessor amount if appropriate) to the budget or 
work scope.
    (6) Retained earnings (reserves) shall be identified and a plan for 
their use and disposition developed.
    (7) The use of retained earnings as a result of performance of 
laboratory management and operation may be restricted if the operator is 
an educational institution.

[65 FR 81009, Dec. 22, 2000, as amended at 68 FR 68781, Dec. 10, 2003]

[[Page 425]]



970.1504-1-4  Types of contracts and fee arrangements.

    (a) Contract types and fee arrangements suitable for management and 
operating contracts may include cost, cost-plus-fixed-fee, cost-plus-
award-fee, cost-plus-incentive-fee, fixed-price incentive, firm-fixed-
price or any combination thereof (see 48 CFR 16.1). In accordance with 
48 CFR 970.1504-1-2(b)(1), the fee arrangement chosen for each work 
element should reflect the financial risk for project failure that 
contractors are willing to accept. Contracting officials shall structure 
each contract and the elements of the work in such a manner that the 
risk is manageable and, therefore, assumable by the contractor.
    (b) Consistent with the concept of a performance-based management 
contract, those contract types which incentivize performance and cost 
control are preferred over a cost-plus-fixed-fee arrangement. 
Accordingly, a cost-plus-fixed-fee contract in instances other than 
those set forth in 48 CFR 970.1504-1-3(c)(2) may only be used when 
approved in advance by the Procurement Executive, or designee.
    (c) A cost-plus-award-fee contract is generally the appropriate 
contract type for a management and operating contract.
    (1) Where work cannot be adequately defined to the point that a 
fixed price contract is acceptable, the attainment of acquisition 
objectives generally will be enhanced by using a cost-plus-award-fee 
contract or other incentive fee arrangement to effectively motivate the 
contractor to superior performance and to provide the Department with 
flexibility to evaluate actual performance and the conditions under 
which it was achieved.
    (2) The construct of fee for a cost-plus-award-fee management and 
operating contract is that total available fee will equal a base fee 
amount and a performance fee amount. The total available fee amount 
including the performance fee amount the contractor may earn, in whole 
or in part during performance, shall be established annually (or as 
otherwise agreed to by the parties and approved by the Procurement 
Executive, or designee), in an amount sufficient to motivate performance 
excellence.
    (3) However, consistent with concepts of performance-based 
contracting, it is Departmental policy to place fee at risk based on 
performance. Accordingly, a base fee amount will be available only when 
approved in advance by the Procurement Executive, or designee, except as 
permitted in 48 CFR 970.1504-1-3(c)(1). Any base fee amount shall be 
fixed, expressed as a percent of the total available fee at inception of 
the contract, and shall not exceed that percent during the life of the 
contract.
    (4) The performance fee amount may consist of an objective fee 
component and a subjective fee component. Objective performance 
measures, when appropriately applied, provide greater incentives for 
superior performance than do subjective performance measures and should 
be used to the maximum extent appropriate. Subjective measures should be 
used when it is not feasible to devise effective predetermined objective 
measures applicable to cost, technical performance, or schedule for 
particular work elements.
    (d) Consistent with performance-based contracting concepts, 
performance objectives and measures related to performance fee should be 
as clearly defined as possible and, where feasible, expressed in terms 
of desired performance results or outcomes. Specific measures for 
determining performance achievement should be used. The contract should 
identify the amount and allocation of fee to each performance result or 
outcome.
    (e) Because the nature and complexity of the work performed under a 
management and operating contract may be varied, opportunities may exist 
to utilize multiple contract types and fee arrangements. Consistent with 
paragraph (a) of this subsection and 48 CFR 16.1, the contracting 
officer should apply that contract type or fee arrangement most 
appropriate to the work component. However, multiple contract types or 
fee arrangements:
    (1) Must conform to the requirements of 48 CFR part 915 and 48 CFR 
parts 15 and 16, and
    (2) Where appropriate to the type, must be supported by:

[[Page 426]]

    (i) Negotiated costs subject to the requirements of the Truth in 
Negotiations Act,
    (ii) A pre-negotiation memorandum, and
    (iii) A plan describing how each contract type or fee arrangement 
will be administered.
    (f) Cost reduction incentives are addressed in the clause at 48 CFR 
970.5215-4, Cost Reduction. This clause provides for incentives for 
quantifiable cost reductions associated with contractor proposed changes 
to a design, process, or method that has an established cost, technical, 
and schedule baseline, is defined, and is subject to a formal control 
procedure. The clause is to be included in management and operating 
contracts as appropriate. Proposed changes must be: Initiated by the 
contractor, innovative, applied to a specific project or program, and 
not otherwise included in an incentive under the contract. Such cost 
reduction incentives do not constitute fee and are not subject to 
statutory or regulatory fee limitations; however, they are subject to 
all appropriate requirements set forth in this subpart.
    (g) Operations and field offices shall take the lead in developing 
and implementing the most appropriate pricing arrangement or cost 
reduction incentive for the requirements. Pricing arrangements which 
provide incentives for performance and cost control are preferred over 
those that do not. The operations and field offices are to ensure that 
the necessary resources and infrastructure exist within both the 
contractor's and government's organizations to prepare, evaluate, and 
administer the pricing arrangement or cost reduction incentive prior to 
its implementation.



970.1504-1-5  General considerations and techniques for determining fixed fees.

    (a) The Department's fee policy recognizes that fee is remuneration 
to contractors for the entrepreneurial function of organizing and 
managing resources, the use of their resources (including capital 
resources), and, as appropriate, their assumption of the risk that some 
incurred costs (operating and capital) may not be reimbursed.
    (b) Use of a purely cost-based structured approach for determining 
fee objectives and amounts for DOE management and operating contracts is 
inappropriate considering the limited level of contractor cost, capital 
goods, and operating capital outlays for performance of such contracts. 
Instead of being solely cost-based, the desirable approach calls for a 
structure that allows evaluation of the following eight significant 
factors, as outlined in order of importance, and the assignment of 
appropriate fee values (subject to the limitations on fixed fee in 48 
CFR 970.1504-1-6):
    (1) The presence or absence of financial risk, including the type 
and terms of the contract;
    (2) The relative difficulty of work, including specific performance 
objectives, environment, safety and health concerns, and the technical 
and administrative knowledge, and skill necessary for work 
accomplishment and experience;
    (3) Management risk relating to performance, including:
    (i) Composite risk and complexity of principal work tasks required 
to do the job;
    (ii) Labor intensity of the job;
    (iii) Special control problems; and
    (iv) Advance planning, forecasting and other such requirements;
    (4) Degree and amount of contract work required to be performed by 
and with the contractor's own resources, as compared to the nature and 
degree of subcontracting and the relative complexity of subcontracted 
efforts, subcontractor management and integration;
    (5) Size and operation (number of locations, plants, differing 
operations, etc.);
    (6) Influence of alternative investment opportunities available to 
the contractor (i.e., the extent to which undertaking a task for the 
Government displaces a contractor's opportunity to make a profit with 
the same staff and equipment in some other field of activity);
    (7) Benefits which may accrue to the contractor from gaining 
experience and knowledge of how to do something,

[[Page 427]]

from establishing or enhancing a reputation, or from having the 
opportunity to hold or expand a staff whose loyalties are primarily to 
the contractor; and
    (8) Other special considerations, including support of Government 
programs such as those relating to small and minority business 
subcontracting, energy conservation, etc.
    (c) The total fee objective for a particular annual fixed fee 
negotiation is established by evaluating the factors in this subsection, 
assigning fee values to them, and totaling the resulting amounts 
(subject to limitations on total fixed fee in 48 CFR 970.1504-1-6).

[65 FR 81009, Dec. 22, 2000]



970.1504-1-6  Calculating fixed fee.

    (a) In recognition of the complexities of the fee determination 
process, and to assist in promoting a reasonable degree of consistency 
and uniformity in its application, the following fee schedules set forth 
the maximum amounts of fee that contracting activities are allowed to 
award for a particular fixed fee transaction calculated annually.
    (b) Fee schedules representing the maximum allowable annual fixed 
fee available under management and operating contracts have been 
established for the following management and operating contract efforts:
    (1) Production;
    (2) Research and Development; and
    (3) Environmental Management.
    (c) The schedules are:

                                               PRODUCTION EFFORTS
----------------------------------------------------------------------------------------------------------------
                                                                                                       Incr.
                       Fee base (dollars)                          Fee (dollars)   Fee (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            7.66
1,000,000.......................................................         $76,580            7.66            6.78
3,000,000.......................................................         212,236            7.07            6.07
5,000,000.......................................................         333,670            6.67            4.90
10,000,000......................................................         578,726            5.79            4.24
15,000,000......................................................         790,962            5.27            3.71
25,000,000......................................................       1,161,828            4.65            3.35
40,000,000......................................................       1,663,974            4.16            2.92
60,000,000......................................................       2,247,076            3.75            2.57
80,000,000......................................................       2,761,256            3.45            2.34
100,000,000.....................................................       3,229,488            3.23            1.45
150,000,000.....................................................       3,952,622            2.64            1.12
200,000,000.....................................................       4,510,562            2.26            0.61
300,000,000.....................................................       5,117,732            1.71            0.53
400,000,000.....................................................       5,647,228            1.41            0.45
500,000,000.....................................................       6,097,956            1.22  ..............
Over $500 Million...............................................       6,097,956  ..............            0.45
----------------------------------------------------------------------------------------------------------------


                                        RESEARCH AND DEVELOPMENT EFFORTS
----------------------------------------------------------------------------------------------------------------
                                                                                                       Incr.
                       Fee base (dollars)                          Fee (dollars)   Fee (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            8.42
1,000,000.......................................................          84,238            8.42            7.00
3,000,000.......................................................         224,270            7.48            6.84
5,000,000.......................................................         361,020            7.22            6.21
10,000,000......................................................         671,716            6.72            5.71
15,000,000......................................................         957,250            6.38            4.85
25,000,000......................................................       1,441,892            5.77            4.22
40,000,000......................................................       2,075,318            5.19            3.69
60,000,000......................................................       2,813,768            4.69            3.27
80,000,000......................................................       3,467,980            4.33            2.69
100,000,000.....................................................       4,006,228            4.01            1.69
150,000,000.....................................................       4,850,796            3.23            1.14
200,000,000.....................................................       5,420,770            2.71            0.66
300,000,000.....................................................       6,083,734            2.03            0.58
400,000,000.....................................................       6,667,930            1.67            0.50
500,000,000.....................................................       7,172,264            1.43  ..............
Over $500 Million...............................................       7,172,264  ..............            0.50
----------------------------------------------------------------------------------------------------------------


[[Page 428]]


                                        ENVIRONMENTAL MANAGEMENT EFFORTS
----------------------------------------------------------------------------------------------------------------
                                                                                                       Incr.
                       Fee base (dollars)                          Fee (dollars)   Fee (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            7.33
$1,000,000......................................................          73,298            7.33            6.49
3,000,000.......................................................         203,120            6.77            5.95
5,000,000.......................................................         322,118            6.44            5.40
10,000,000......................................................         592,348            5.92            4.83
15,000,000......................................................         833,654            5.56            4.03
25,000,000......................................................       1,236,340            4.95            3.44
40,000,000......................................................       1,752,960            4.38            3.29
60,000,000......................................................       2,411,890            4.02            3.10
80,000,000......................................................       3,032,844            3.79            2.49
100,000,000.....................................................       3,530,679            3.53            1.90
150,000,000.....................................................       4,479,366            2.99            1.48
200,000,000.....................................................       5,219,924            2.61            1.12
300,000,000.....................................................       6,337,250            2.11            0.88
400,000,000.....................................................       7,219,046            1.80            0.75
500,000,000.....................................................       7,972,396            1.59            0.58
750,000,000.....................................................       9,423,463            1.26            0.55
1,000,000,000...................................................      10,786,788            1.08  ..............
Over $1.0 billion...............................................      10,786,788  ..............            0.55
----------------------------------------------------------------------------------------------------------------



970.1504-1-7  Fee Base.

    (a) The fee base is an estimate of necessary allowable costs, with 
some exclusions. It is used in the fee schedules to determine the 
maximum annual fee for a fixed fee contract. That portion of the fee 
base that represents the cost of the Production, Research and 
Development, or Environmental Management work to be performed, shall be 
exclusive of the cost of source and special nuclear materials; estimated 
costs of land, buildings and facilities whether to be leased, purchased 
or constructed; depreciation of Government facilities; and any estimate 
of effort for which a separate fee is to be negotiated.
    (b) Such portion of the fee base, in addition to the adjustments in 
paragraph (a) of this subsection, shall exclude:
    (1) Any part of the estimated cost of capital equipment (other than 
special equipment) which the contractor procures by subcontract or other 
similar costs which is of such magnitude or nature as to distort the 
technical and management effort actually required of the contractor;
    (2) At least 20% of the estimated cost or price of subcontracts and 
other major contractor procurements;
    (3) Up to 100% of the estimated cost or price of subcontracts and 
other major contractor procurements if they are of a magnitude or nature 
as to distort the technical and management effort actually required of 
the contractor;
    (4) Special equipment as defined in 48 CFR 970.1504-1-8;
    (5) Estimated cost of Government-furnished property, services and 
equipment;
    (6) All estimates of costs not directly incurred by or reimbursed to 
the operating contractor;
    (7) Estimates of home office or corporate general and administrative 
expenses that shall be reimbursed through the contract;
    (8) Estimates of any independent research and development cost or 
bid and proposal expenses that may be approved under the contract;
    (9) Any cost of work funded with uncosted balances previously 
included in a fee base of this or any other contract performed by the 
contractor;
    (10) Cost of rework attributable to the contractor; and
    (11) State taxes.
    (c) In calculating the annual fee amounts associated with the 
Production, Research and Development, or Environmental Management work 
to be performed, the fee base is to be allocated to the category 
reflecting the work to be performed and the appropriate fee schedule 
utilized.
    (d) The portion of the fee base associated with the Production, 
Research and Development, or Environmental Management work to be 
performed and the associated schedules in this part are not intended to 
reflect the portion

[[Page 429]]

of the fee base or related compensation for unusual architect-engineer, 
construction services, or special equipment provided by the management 
and operating contractor. Architect-engineer and construction services 
are normally covered by special agreements based on the policies 
applying to architect-engineer or construction contracts. Fees paid for 
such services shall be calculated using the provisions of 48 CFR 91504-
1-5 relating to architect-engineer or construction fees and shall be in 
addition to the operating fees calculated for the Production, Research 
and Development, or Environmental Management work to be performed. 
Special equipment purchases shall be addressed in accordance with the 
provisions of 48 CFR 970.1504-1-8 relating to special equipment.
    (e) No schedule set forth in 48 CFR 915.404-4-71-5 or 48 CFR 
970.1504-1-6 shall be used more than once in the determination of the 
fee amount for an annual period, unless prior approval of the 
Procurement Executive, or designee, is obtained.



970.1504-1-8  Special equipment purchases.

    (a) Special equipment is sometimes procured in conjunction with 
management and operating contracts. When a contractor procures special 
equipment, the DOE negotiating official shall determine separate fees 
for the equipment which shall not exceed the maximum fee allowable as 
established using the schedule in 48 CFR 915.404-4-71-5(h).
    (b) In determining appropriate fees, factors such as complexity of 
equipment, ratio of procurement transactions to volume of equipment to 
be purchased and completeness of services should be considered. Where 
possible, the reasonableness of the fees should be checked by their 
relationship to actual costs of comparable procurement services.
    (c) For purposes of this subsection, special equipment is equipment 
for which the purchase price is of such a magnitude compared to the cost 
of installation as to distort the amount of technical direction and 
management effort required of the contractor. Special equipment is of a 
nature that requires less management attention. When a contractor 
procures special equipment, the DOE negotiating official shall determine 
separate fees for the equipment using the schedule in 48 CFR 915.404-4-
71-5(h). The determination of specific items of equipment in this 
category requires application of judgment and careful study of the 
circumstances involved in each project. This category of equipment would 
generally include:
    (1) Major items of prefabricated process or research equipment; and
    (2) Major items of preassembled equipment such as packaged boilers, 
generators, machine tools, and large electrical equipment. In some 
cases, it would also include special apparatus or devices such as 
reactor vessels and reactor charging machines.



970.1504-1-9  Special considerations: Cost-plus-award-fee.

    (a) When a management and operating contract is to be awarded on a 
cost-plus-award-fee basis, several special considerations are 
appropriate.
    (b) All annual performance incentives identified under these 
contracts are funded from the annual total available fee, which consists 
of a base fee amount (which may be zero) and a performance fee amount 
(which typically will consist of an incentive fee component for 
objective performance requirements, an award fee component for 
subjective performance requirements, or both).
    (c) The annual total available fee for the contract shall equal the 
product of the fee(s) that would have been calculated for an annual 
fixed fee contract and the classification factor(s) most appropriate for 
the facility/task. If more than one fee schedule is applicable to the 
contract, the annual total available fee shall be the sum of the 
available fees derived proportionately from each fee schedule; 
consideration of significant factors applicable to each fee schedule; 
and application of a Classification Factor(s) most appropriate for the 
work.
    (d) Classification Factors applied to each Facility/Task Category 
are:

[[Page 430]]



------------------------------------------------------------------------
                                                          Classification
                 Facility/task category                       factor
------------------------------------------------------------------------
A.......................................................            3.0
B.......................................................            2.5
C.......................................................            2.0
D.......................................................           1.25
------------------------------------------------------------------------

    (e) The contracting officer shall select the Facility/Task Category 
after considering the following:
    (1) Facility/Task Category A. The main focus of effort performed is 
related to:
    (i) The manufacture, assembly, retrieval, disassembly, or disposal 
of nuclear weapons with explosive potential;
    (ii) The physical cleanup, processing, handling, or storage of 
nuclear radioactive or toxic chemicals with consideration given to the 
degree the nature of the work advances state of the art technologies in 
cleanup, processing or storage operations and/or the inherent difficulty 
or risk of the work is significantly demanding when compared to similar 
industrial/DOE settings (i.e., nuclear energy processing, industrial 
environmental cleanup);
    (iii) Construction of facilities such as nuclear reactors, atomic 
particle accelerators, or complex laboratories or industrial units 
especially designed for handling radioactive materials;
    (iv) Research and development directly supporting paragraphs 
(e)(1)(i), (ii), or (iii) of this subsection and not conducted in a 
laboratory, or
    (v) As designated by the Procurement Executive, or designee. 
(Classification factor 3.0)
    (2) Facility/Task Category B. The main focus of effort performed is 
related to:
    (i) The safeguarding and maintenance of nuclear weapons or nuclear 
material;
    (ii) The manufacture or assembly of nuclear components;
    (iii) The physical cleanup, processing, handling, or storage of 
nuclear radioactive or toxic chemicals, or other substances which pose a 
significant threat to the environment or the health and safety of 
workers or the public, if the nature of the work uses state of the art 
technologies or applications in such operations and/or the inherent 
difficulty or risk of the work is more demanding than that found in 
similar industrial/DOE settings (i.e., nuclear energy, chemical or 
petroleum processing, industrial environmental cleanup);
    (iv) The detailed planning necessary for the assembly/disassembly of 
nuclear weapons/components;
    (v) Construction of facilities involving operations requiring a high 
degree of design layout or process control;
    (vi) Research and development directly supporting paragraphs 
(e)(2)(i), (ii), (iii), (iv) or (v) of this subsection and not conducted 
in a laboratory; or
    (vii) As designated by the Procurement Executive, or designee. 
(Classification factor 2.5)
    (3) Facility/Task Category C. The main focus of effort performed is 
related to:
    (i) The physical cleanup, processing, or storage of nuclear 
radioactive or toxic chemicals if the nature of the work uses routine 
technologies in cleanup, processing or storage operations and/or the 
inherent difficulty or risk of the work is similar to that found in 
similar industrial/DOE settings (i.e., nuclear energy, chemical 
processing, industrial environmental cleanup);
    (ii) Plant and facility maintenance;
    (iii) Plant and facility security (other than the safeguarding of 
nuclear weapons and material);
    (iv) Construction of facilities involving operations requiring 
normal processes and operations; general or administrative service 
buildings; or routine infrastructure requirements;
    (v) Research and development directly supporting paragraphs 
(e)(3)(i), (ii), (iii) or (iv) of this subsection and not conducted in a 
laboratory; or
    (vi) As designated by the Procurement Executive, or designee. 
(Classification factor 2.0)
    (4) Facility/Task Category D. The main focus of the effort performed 
is research and development conducted at a laboratory. (Classification 
factor 1.25)
    (f) Where the Procurement Executive, or designee, has approved a 
base fee, the Classification Factors shall be reduced, as approved by 
the Procurement Executive, or designee.
    (g) Any risks which are indemnified by the Government (for example, 
by the Price-Anderson Act) will not be considered as risk to the 
contractor.

[[Page 431]]

    (h) All management and operating contracts awarded on a cost-plus-
award-fee basis shall set forth in the contract, or the Performance 
Evaluation and Measurement Plan(s) required by the contract clause at 48 
CFR 970.5215-1, Total Available Fee: Base Fee Amount and Performance Fee 
Amount, a site specific method of rating the contractor's performance of 
the contract requirements and a method of fee determination tied to the 
method of rating.
    (i) Prior approval of the Procurement Executive, or designee, is 
required for an annual total available fee amount exceeding the 
guidelines in paragraph (c) of this subsection.
    (j) DOE Operations/Field Office Managers must ensure that all 
important areas of contract performance are specified in the contract or 
Performance Evaluation and Measurement Plan(s), even if such areas are 
not assigned specific weights or percentages of available fee.



970.1504-1-10  Special considerations: Fee limitations.

    In situations where the objective performance incentives are of 
unusual difficulty or where the successful completion of the performance 
incentives would provide extraordinary value to the Government, fees in 
excess of those allowed under 48 CFR 970.1504-1-5 and 48 CFR 970.1504-1-
9 may be allowed with the approval of the Procurement Executive, or 
designee. Requests to allow fees in excess of those provided under other 
provisions of this fee policy must be accompanied by a written 
justification with detailed supporting rationale as to how the specific 
circumstances satisfy the two criteria listed in this subsection.



970.1504-1-11  Documentation.

    The contracting officer shall tailor the documentation of the 
determination of fee prenegotiation objective based on 48 CFR 15.406-1, 
Prenegotiation objectives, and the determination of the negotiated fee 
in accordance with 48 CFR 15.406-3, Documenting the negotiation. The 
contracting officer shall include as part of the documentation: the 
rationale for the allocation of cost and the assignment of Facility/Task 
Categories; a discussion of the calculations described in 48 CFR 
970.1504-1-5; and discussion of any other relevant provision of this 
subsection.



970.1504-2  Price negotiation.

    (a) Management and operating contract prices (fee) and DOE 
obligations to support contract performance shall be governed by:
    (1) The level of activity authorized and the amount of funds 
appropriated for DOE approved programs by specific program legislation;
    (2) Congressional budget and reporting limitations;
    (3) The amount of funds apportioned to DOE;
    (4) The amount of obligational authority allotted to program 
officials and Approved Funding Program limitations; and
    (5) The amount of funds actually available to the DOE operating 
activity as determined in accordance with applicable financial 
regulations and directives.
    (b) Funds shall be obligated and made available by contract 
provision or modification after the funds become available for 
obligation for payment to support performance of DOE approved projects, 
tasks, work authorizations, or services.
    (c) Contractor expenditures shall be limited to the overall amount 
of funds available and obligated on the contract. As prescribed at 48 
CFR 970.3270(b), the clause at 48 CFR 970.5232-4, Obligation of Funds, 
is used for this purpose.



970.1504-3  Documentation.



970.1504-3-1  Cost or pricing data.

    (a) The certification requirements of 48 CFR 15.406-2 are not 
applied to DOE cost-reimbursement management and operating contracts.
    (b) The contracting officer shall ensure that management and 
operating contractors and their subcontractors obtain cost or pricing 
data prior to the award of a negotiated subcontract or modification of a 
subcontract in accordance with 48 CFR 15.406-2, and incorporate 
appropriate contract provisions similar to those set forth at 48

[[Page 432]]

CFR 52.215-10 and 48 CFR 52.215-11 that provide for the reduction of a 
negotiated subcontract price by any significant amount that the 
subcontract price was increased because of the submission of defective 
cost or pricing data by a subcontractor at any tier.
    (c) The clauses at 48 CFR 52.215-12 and 48 CFR 52.215-13 shall be 
included in management and operating contracts.



970.1504-4  Special cost or pricing areas.



970.1504-4-1  Make-or-buy plans.



970.1504-4-2  Policy.

    (a) Contracting officers shall require management and operating 
contractors to develop and implement make-or-buy plans that establish a 
preference for providing supplies or services (including construction 
and construction management) on a least-cost basis, subject to program 
specific make-or-buy criteria. The emphasis of this make-or-buy 
structure is to eliminate bias for in-house performance where an 
activity may be performed at less cost or otherwise more efficiently 
through subcontracting.
    (b) A work activity, supply or service is provided at ``least cost'' 
when, after consideration of a variety of appropriate programmatic, 
business, and financial factors, it is concluded that performance by 
either ``in-house'' resources or by contracting out is likely to provide 
the property or service at the lowest overall cost. Programmatic factors 
include, but are not limited to, program specific make-or-buy criteria 
established by the Department of Energy, the impact of a ``make'' or a 
``buy'' decision on mission accomplishment, and anticipated changes to 
the mission of the facility or site. Business factors pertain to such 
elements as market conditions, past experience in obtaining similar 
supplies or services, and overall operational efficiencies that might be 
available through either in-house performance or contracting out. Among 
the financial factors that may be considered to determine a least-cost 
alternative in a make-or-buy analysis are both recurring and one-time 
costs attributable to either retaining or contracting out a particular 
item, financial risk, and the anticipated contract price.
    (c) In developing and implementing its make-or-buy plan, a 
contractor shall be required to assess subcontracting opportunities and 
implement subcontracting decisions in accordance with the following:
    (1) The contractor shall conduct internal productivity improvement 
and cost-reduction programs so that in-house performance options can be 
made more efficient and cost-effective.
    (2) The contractor shall consider subcontracting opportunities with 
the maximum practicable regard for open communications with potentially 
affected employees and their representatives. Similarly, a contractor 
will communicate its plans, activities, cost-benefit analyses, and 
decisions with those stakeholders likely to be affected by such 
decisions, including representatives of the community and local 
businesses.



970.1504-4-3  Requirements.

    (a) Development of program-specific make-or-buy criteria.
    (1) Program specific make-or-buy criteria are those factors that 
reflect specific mission or program objectives (including operational 
efficiency, contractor diversity, environment, safety and health, work 
force displacement and restructuring, and collective bargaining 
agreements) and that, upon their application to a specific work effort, 
would override a decision based on a purely economic rationale. These 
criteria are to be used to assess each work effort identified in a 
facility's or site's make-or-buy plan to determine the appropriateness 
of a contractor's make-or-buy decisions.
    (2) Heads of Contracting Activities shall ensure that program 
specific make-or-buy criteria are developed and provided to the 
contractor for use in its make-or-buy plan administration activities for 
the facility, site, or specific program, as appropriate. Although the 
Head of the Contracting Activity has the responsibility for ensuring 
that the program-specific make-or-buy criteria are developed and 
provided to the contractor, the actual development of

[[Page 433]]

the program specific make or buy criteria should be accomplished by the 
appropriate collaboration of headquarters and field office program, 
technical, and business specialists. Accordingly, these organizations 
and individuals should be relied on for the development of the program 
specific make or buy criteria so that they appropriately reflect program 
considerations applicable to the contractor's make-or-buy decisions.
    (b) Make-or-buy plan property and services. Supplies or services 
estimated to cost less than one (1) percent of the estimated total 
operating cost for a year or $1 million for the same year, whichever is 
less, need not be included in the contractor's make-or-buy plan. 
However, adjustments may be made to these thresholds where programmatic 
or cost considerations would indicate that a particular supply or 
service should be included in the make-or-buy plan.
    (c) Competitive solicitation requirements.
    (1) To the extent practicable, a competitive solicitation for the 
management and operation of a Department of Energy facility or site 
should:
    (i) Identify those programs, projects, work areas, functions or 
services that the Department intends for the successful offeror to 
include in any make-or-buy plan; and
    (ii) Require the submission of a preliminary make-or-buy plan for 
the period of performance of the contract from each offeror as part of 
its proposal submitted in response to the competitive solicitation.
    (2) If the requirement for each offeror to submit a preliminary 
make-or-buy plan as part of its proposal is impractical or otherwise 
incompatible with the acquisition strategy, consideration should be 
given to structuring the evaluation criteria for the competitive 
solicitation in such a manner as to permit the evaluation of an 
offeror's approach to conducting its make-or-buy program within the 
context of the contractual requirements.
    (3) The successful offeror's preliminary make-or-buy plan shall be 
submitted for final approval within 180 days after contract award, 
consistent with the requirements of 48 CFR 970.5215-2(c), Make-or-Buy 
Plan.
    (d) Evaluation of the contractor's make-or-buy plan. In evaluating 
the contractor's make-or-buy plan, the contracting officer shall 
consider the following factors:
    (1) The program specific make-or-buy criteria (such as operational 
efficiency, contractor diversity, environment, safety and health, work 
force displacement and restructuring, and collective bargaining 
agreements) with particular attention to the effect of a ``buy'' 
decision on the contractor's ability to maintain core competencies 
needed to accomplish mission-related programs and projects;
    (2) The impact of a ``make'' or ``buy'' decision on contract cost, 
schedule, and performance and financial risk;
    (3) The potential impact of a ``make'' or ``buy'' decision on known 
future mission or program activities at the facility or site;
    (4) Past experience at the facility or site regarding ``make-or-
buy'' decisions for the same, or similar, supplies or services;
    (5) Consistency with the contractor's approved subcontracting plan, 
as required by the clause entitled ``Small, Small Disadvantaged and 
Women-Owned Small Business Subcontracting Plan'' (48 CFR 52.219-9), and 
implementation of section 3021 of the Energy Policy Act of 1992.
    (6) Local market conditions, including contractor work force 
displacement and the availability of firms that can meet the work 
requirements with regard to quality, quantity, cost, and timeliness;
    (7) Where the construction of new or additional facilities is 
required, that the cost of such facilities is in the Government's best 
interest when compared to subcontracting or privatization alternatives; 
and
    (8) Whether all relevant requirements and costs of performing the 
work by the contractor and through subcontracting are considered and any 
different requirements for the same work are reconciled.
    (e) Approval. The contracting officer shall approve all plans and 
revisions thereto. Once approved, a make-or-buy plan shall remain 
effective for the term of the contract (up to a period of five

[[Page 434]]

years), unless circumstances warrant a change.
    (f) Administration. The contractor's performance against the 
approved make-or-buy plan shall be monitored to ensure that:
    (1) The contractor is complying with the plan;
    (2) Items identified for deferral decisions are addressed in a 
timely manner; and
    (3) The contractor periodically updates the make-or-buy plan based 
on changed circumstances or significant new work.



970.1504-5  Solicitation provision and contract clauses.

    (a) The contracting officer shall insert the clause at 48 CFR 
970.5215-1, Total Available Fee: Base Fee Amount and Performance Fee 
Amount, in management and operating contracts, and other contracts 
determined by the Procurement Executive, or designee, that include cost-
plus-award-fee arrangements.
    (1) The contracting officer shall include the clause with its 
Alternate I when the award fee cycle consists of two or more evaluation 
periods.
    (2) The contracting officer shall include the clause with its 
Alternate II when the award fee cycle consists of one evaluation period.
    (3) The contracting officer shall include the clause with its 
Alternate III when the DOE Operations/Field Office Manager, or designee, 
requires the contractor to submit a self-assessment.
    (4) The contracting officer shall include the clause with its 
Alternate IV when the DOE Operations/Field Office Manager, or designee, 
permits the contractor to submit a self-assessment at the contractor's 
option.
    (b) The contracting officer shall insert the clause at 48 CFR 
970.5215-2, Make-or-Buy Plan, in management and operating contracts. The 
contracting officer may add a sentence at the end of paragraph (d) of 
the clause to identify where in the contract the make-or-buy plan is 
located.
    (c)(1) The contracting officer shall insert the clause at 48 CFR 
970.5215-3, Conditional Payment of Fee, Profit, and Other Incentives--
Facility Management Contracts, in all DOE management and operating 
contracts and other contracts determined by the Procurement Executive, 
or designee.
    (2) The contracting officer shall include the clause with its 
Alternate I in contracts that do not contain the clause at 48 CFR 
952.204-2, Security.
    (3) The contracting officer shall include the clause with its 
Alternate II in contracts that are awarded on a cost-plus-award-fee 
basis. The contracting officer should consider including the clause with 
its Alternate II in contracts that are awarded on a multiple fee basis 
if the cost-plus-award-fee portion of the contract is significant.
    (d) The contracting officer shall insert the clause at 48 CFR 
970.5215-4, Cost Reduction, in management and operating contracts, and 
other contracts determined by the Procurement Executive, or designee, if 
cost savings programs are contemplated.
    (e) The Contracting officer shall insert the provision at 48 CFR 
970.5215-5, Limitation on Fee, in solicitations for management and 
operating contracts, and other contracts determined by the Procurement 
Executive, or designee.

[65 FR 81009, Dec. 22, 2000, as amended at 69 FR 68781, Dec. 10, 2003]



               Subpart 970.17_Special Contracting Methods



970.1706  Management and operating contracts.



970.1706-1  Award, renewal, and extension.

    (a) Contract term. Effective work performance under a management and 
operating contract is facilitated by the use of a relatively long 
contract term of up to ten (10) years. Accordingly, management and 
operating contracts shall provide for a basic contract term not to 
exceed five (5) years and may include an option(s) to extend the term 
for additional periods; provided, that no one option period exceeds five 
(5) years in duration and the total term of the contract, including any 
options exercised, does not exceed ten (10) years. The specific term of 
the base period and of any options periods shall be determined at the 
time of the authorization to compete or extend the contract.

[[Page 435]]

The term ``option'' as used in this subpart means a unilateral right in 
the contract by which the Government can extend the term of the 
contract. Accordingly, except as may be provided for through the 
inclusion of an option(s) in the contract to extend the term, any 
extension to continue the contract with the incumbent contractor beyond 
its term shall only occur when such extension can be justified under one 
of the statutory authorities identified in 48 CFR 6.302 and when 
authorized by the Head of the Agency.
    (b) Exercise of option. As part of the review required by 48 CFR 
17.605(b), the contracting officer shall assess whether competing the 
contract will produce a more advantageous offer than exercising the 
option. The incumbent contractor's past performance under the contract, 
the extent to which performance-based management contract provisions are 
present, or can be negotiated into, the contract, and the impact of a 
change in a contractor on the Department's discharge of its programs are 
considerations that shall be addressed in the contracting officer's 
decision that the exercise of the option is in the Government's best 
interest. The contracting officer's decision shall be approved by the 
Procurement Executive and the cognizant Assistant Secretary(s).
    (c) Conditional Authorization of Non-competitive Extension Made 
Pursuant to Authority Under CICA. Authorization to extend a management 
and operating contract by the Head of the Agency shall be considered 
conditional upon the successful negotiation of the contract to be 
extended in accordance with the Department's negotiation objectives. The 
Head of the Contracting Activity shall advise the Procurement Executive 
no later than 6 months after receipt of the conditional authorization as 
to whether the Department's objectives will be met and, if not, the 
contracting activity's plans for competing the requirement.



970.1706-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 52.217-9, 
Option to Extend the Term of the Contract, in all management and 
operating contracts when the inclusion of an option is appropriate.



Subpart 970.19_Small, Small Disadvantaged and Women-Owned Small Business 
                                Concerns



970.1907  Subcontracting with Small Business, Small Disadvantaged Business 
and Woman-Owned Small Business Concerns.



970.1907-1  Subcontracting plan requirements.

    Pursuant to the clause at 48 CFR 52.219-9, Small Business 
Subcontracting Plan, which is required for all management and operating 
contracts, each management and operating contract shall include a 
subcontracting plan which is effective for the term of the contract. 
Goals for the contract shall be negotiated annually when revised funding 
levels are determined. The plan should include provisions for revising 
the goals or any other sections of the plan. Such revisions shall be in 
writing, approved by the contracting officer, and shall be specifically 
made a material part of the contract.



              Subpart 970.22_Application of Labor Policies



970.2200  Scope of subpart.

    This subpart prescribes Department of Energy labor policies 
pertaining to the award and administration of management and operating 
contracts.



970.2201  Basic labor policies.



970.2201-1  Labor relations.



970.2201-1-1  General.

    Contracting officers shall, in appropriate circumstances, follow the 
guidance in 48 CFR Subpart 22.1, as supplemented in this section, in the 
award and administration of management and operating contracts.



970.2201-1-2  Policies.

    (a) The extent of Government ownership of the nation's energy plant 
and materials, and the overriding concerns of national defense and 
security, impose special conditions on personnel

[[Page 436]]

and labor relations in the energy program. Such special conditions 
include the need for continuity of vital operations at DOE 
installations; retention by DOE of absolute authority on all questions 
of security; and DOE review of labor expenses under management and 
operating contracts as a part of its responsibility for assuring 
judicious expenditure of public funds. It is the intent of DOE that 
personnel and labor policies throughout the energy program reflect the 
best experience of American industry in aiming to achieve the type of 
stable labor-management relations that are essential to the proper 
development of the energy program. The following enunciates the 
principles upon which the DOE policy is based:
    (1) Employment standards. (i) Management and operating contractors 
are expected to bring experienced, proven personnel from their private 
operations to staff key positions on the contract work and to recruit 
other well-qualified personnel as needed. Such personnel should be 
employed and treated during employment without discrimination by reason 
of race, color, religion, sex, or national origin. Contractors shall be 
required to take affirmative action to achieve these objectives.
    (ii) The job qualifications and suitability of prospective employees 
should be established by the contractor prior to employment by careful 
personnel investigations. Such personnel investigations should include, 
as appropriate: A credit check; verification of high school degree/
diploma or degree/diploma granted by an institution of higher learning 
within the last 5 years; contacts with listed personal references; 
contacts with listed employers for the past 3 years (excluding 
employment of less than 60 days duration, part-time employments, and 
craft/union employments); and local law enforcement checks when such 
checks are not prohibited by State or local law or regulation, and when 
the individual resides in the jurisdiction where the contractor is 
located. When a DOE access authorization (security clearance) will be 
required, the aforementioned preemployment checks must be conducted and 
the applicant's job qualifications and suitability must be established 
before a request is made to the DOE to process the applicant for access 
authorization. Evidence must be furnished to the DOE with the 
applicant's security forms that specify: The date each check was 
conducted, the entity contacted that provided information concerning the 
applicant, a synopsis of the information provided as a result of each 
contact, and a statement that all information available has been 
reviewed and favorably adjudicated in accordance with the contractor's 
personnel policies. When an applicant is being hired specifically for a 
position which requires a DOE access authorization, the applicant shall 
not be placed in that position prior to the access authorization being 
granted by the DOE unless an exception has been obtained from the Head 
of the Contracting Activity, or designee. If an applicant is placed in 
that position prior to access authorization being granted by the DOE, 
the applicant may not be afforded access to classified matter or special 
nuclear materials (in categories requiring access authorization) until 
the DOE notifies the employer that access authorization has been 
granted. Management and operating contractors and other contractors 
operating DOE facilities may include the requirements set forth in this 
subsection in subcontracts (appropriately modified to identify the 
parties) wherein subcontract employees will be required to hold DOE 
access authorization in order to perform on-site duties, such as 
protective force operations.
    (iii) Consistent with the policies set forth in this subpart, the 
contractor is responsible for maintaining satisfactory standards for 
employee qualifications, performance, conduct, and business ethics under 
its own personnel policies.
    (2) Security. On all matters of security at its facilities, DOE 
retains absolute authority and neither the regulations and policies 
pertaining to security, nor their administration, are matters for 
collective bargaining between the contractor's management and labor. 
Insofar as DOE security regulations affect the collective bargaining 
process, the security policies and regulations will be made known to 
both parties. To the fullest extent feasible,

[[Page 437]]

DOE will consult with representatives of the contractor's management and 
labor when formulating security regulations and policies that may affect 
the collective bargaining process.
    (3) Wages, salaries, and employee benefits. (i) Wages, salaries, and 
employee benefits shall be administered in a manner designated to adapt 
the normal practices and conditions of industry or institutions of 
higher education to the contract work, and to provide for appropriate 
review by DOE. Area practices, valid patterns, and well-established 
commercial or academic practices of the contractors, as appropriate, 
form the criteria for the establishment and adjustment of compensation 
schedules.
    (ii) The aspects of wages, hours, and working conditions which are 
the substance of collective bargaining in normal organized industries 
will be left to the orderly processes of negotiation and agreement 
between DOE contractor management and employee representatives with 
maximum possible freedom from Government interference.
    (4) Employee relations. The handling of employee relations on 
contract work, including such matters as the conduct and discipline of 
the work force and the handling of employee grievances, is part of the 
normal management responsibility of the contractor.
    (5) Collective bargaining. (i) DOE review of collective bargaining 
practices will be premised on the view that management's trusteeship for 
the operation of the Government facilities includes the duty to adopt 
practices which are fundamental to the friendly adjustment of disputes, 
and which experience has shown, promote orderly collective bargaining 
relationships. Practices inconsistent with this view may be objected to 
if not found to be otherwise clearly warranted.
    (ii) Consistent with the policy of assuring continuity of operation 
of vital facilities, all collective bargaining agreements at DOE-owned 
facilities should provide that grievances and disputes involving the 
interpretation or application of the agreement will be settled without 
resorting to strike, lockout, or other interruption of normal 
operations. For this purpose, each collective bargaining agreement 
entered into during the period of performance of this contract should 
provide an effective grievance procedure with arbitration as its final 
step, unless the parties mutually agree upon some other method of 
assuring continuity of operation for the term of the collective 
bargaining agreement.
    (iii) DOE expects its management and operating contractors and the 
unions representing the contractor's employees to cooperate fully with 
the Federal Mediation and Conciliation Service.
    (6) Personnel training. DOE encourages and supports personnel 
training programs aimed at improving work efficiency or developing 
needed skills which are not otherwise obtainable.
    (7) Working conditions. Accident, fire, health, and occupational 
hazards associated with DOE activities will be held to a practical 
minimum level and controlled in the interest of maintenance of health 
and prevention of accidents. Subject to DOE control, contractors shall 
be required to maintain comprehensive continuous preventive and 
protective programs appropriate to the particular activities throughout 
all operations. Appropriate financial protection in case of occupational 
disability must be provided to employees on DOE projects.
    (b) Title to payroll and associated records under certain contracts 
for the management and operation of DOE facilities, and for necessary 
miscellaneous construction incidental to the function of these 
facilities, shall vest in the Government. Such records are to be 
disposed of in accordance with DOE directions. For such contracts, the 
Solicitor of Labor has granted a tolerance from the Department of Labor 
Regulations to omit from the prescribed labor clauses the requirement 
for the retention of payrolls and associated records for a period of 
three years after completion of the contract. Under this tolerance, the 
records retention requirements for all labor clauses in the contract and 
the Fair Labor Standards Act are satisfied by disposal of such records 
in accordance with applicable DOE directives.

[[Page 438]]



970.2201-1-3  Contract clause.

    In addition to the clause at 48 CFR 52.222-1, Notice to the 
Government of Labor Disputes, the contracting officer shall insert the 
clause at 970.5222-1, Collective Bargaining Agreements--Management and 
Operating Contracts, in all management and operating contracts.



970.2201-2  Overtime management.



970.2201-2-1  Policy.

    Contracting officers shall ensure that management and operating 
contractors manage overtime cost effectively and use overtime only when 
necessary to ensure performance of work under the contract.



970.2201-2-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5222-
2, Overtime Management, in management and operating contracts.



970.2204  Labor standards for contracts involving construction.



970.2204-1  Statutory and regulatory requirements.



970.2204-1-1  Administrative controls and criteria for application of 
the Davis-Bacon Act in operational or maintenance activities.

    (a) Particular work items falling within one or more of the 
following criteria normally will be classified as noncovered by the 
Davis-Bacon Act, hereinafter referred to in this section as the ``Act.''
    (1) Individual work items estimated to cost $2,000 or less. The 
total dollar amount of the management and operating contract is not a 
factor to be considered and bears no relation to individual work items 
classified as construction, alteration and/or repair, including painting 
and decorating. However, no item of work, the cost of which is estimated 
to be in excess of $2,000, shall be artificially divided into portions 
less than $2,000 for the purpose of avoiding the application of the Act.
    (2) Work and services that are a part of operational and maintenance 
activities or which, being very closely and directly involved therewith, 
are more in the nature of operational activities than construction, 
alteration, and/or repair work. This includes work and services which 
would involve a material risk to continuity of operations, to life or 
property, or to DOE operating requirements, if performed by persons 
other than the contractor's regular production and maintenance forces. 
However, any decision that contracts or work items are noncovered for 
these reasons must be made by the Head of the Contracting Activity 
without power of delegation.
    (3) Assembly, modification, setup, installation, replacement, 
removal, rearrangement, connection, testing, adjustment, and calibration 
of machinery and equipment. However, it is noted that these activities 
are covered if they are part of, or would be a logical part of, the 
construction of a facility, or if construction-type work which is not 
``incidental'' to the overall effort is involved.
    (4) Experimental development of equipment, processes, or devices, 
including assembly, fitting, installation, testing, reworking, and 
disassembly. This refers to equipment, processes, and devices which are 
assembled for the purpose of conducting a test or experiment. The design 
may be only conceptual in character, and professional personnel who are 
responsible for the experiment participate in the assembly. Specifically 
excluded from the category of experimental development are buildings and 
building utility services, as distinguished from temporary connections 
thereto. Also specifically excluded from this category is equipment to 
be used for continuous testing (e.g., a machine to be continuously used 
for testing the tensile strength of structural members).
    (5) Experimental work in connection with peaceful uses of nuclear 
energy. This refers to equipment, processes and devices which are 
assembled and/or set in place and interconnected for the purpose of 
conducting a test or experiment. The nature of the test or experiment is 
such that professional personnel who are responsible for the test or 
experiment and/or data to be derived therefrom must, by necessity, 
participate in the assembly and interconnections. Specifically excluded 
from experimental work are buildings, building

[[Page 439]]

utility services, structural changes, drilling, tunneling, excavation, 
and back-filling work which can be performed according to customary 
drawings and specifications, and utility services of modifications to 
utility services, as distinguished from temporary connections thereto. 
Work in this category may be performed in mines or in other locations 
specifically constructed for tests or experiments.
    (6) Emergency work to combat the effects of fire, flood, earthquake, 
equipment failure, accident, or other casualties, and to restart the 
operational activity following the casualty. Work which is not directly 
related to restarting the activity or which involves rebuilding or 
replacement of a structure, structural components, or equipment is 
excluded from this category.
    (7) Decontamination, including washing, scrubbing, and scraping to 
remove contamination; removal of contaminated soil or other material; 
and painting or other resurfacing, provided that such painting or 
resurfacing is an integral part of the decontamination activity and 
performed by the employees of the contractors performing the 
decontamination.
    (8) Burial of contaminated soil waste or contained liquid; however, 
initial preparatory work readying the burial ground for use (e.g., any 
grading or excavating that is a part of initial site preparation, 
fencing, drilling wells for continued monitoring of contamination, 
construction of guard or other office space) is covered. Work performed 
subsequent to burial which involves the placement of concrete or other 
like activity is also covered.
    (b) The classification of a contract as a contract for operational 
or maintenance activities does not necessarily mean that all work and 
activities at the contract location are classifiable as outside coverage 
of the Act since it may be necessary to separate work which should be 
classified as covered. Therefore, the Heads of Contracting Activities 
shall establish and maintain controls for the careful scrutiny of 
proposed work assignments under such contracts to assure that:
    (1) Contractors whose contracts do not contemplate the performance 
of work covered by the Act with the contractor's own forces are neither 
asked nor authorized to perform work within the scope of the Act. If the 
actual work assignments do involve covered work, the contract should be 
modified to include applicable provisions of the Act.
    (2) Where covered work is performed by a contractor whose contract 
contains provisions required by the Act, such work is performed as 
required by law and the contract. After the contractor has been 
informed, as provided in paragraph (b)(3) of this subsection, that 
certain work is covered, the responsibilities of the Head of the 
Contracting Activity to assure compliance is the same as it would be if 
the work were being performed under a separate construction contract.
    (3) Controls provided for above include consideration by the Head of 
the Contracting Activity and the contractor, before work is begun or 
contracted out, of the relation of the Act to the annual programming of 
work; the contractor's work orders; and work contracted out in excess of 
$2,000. The Head of the Contracting Activity may, if consistent with 
DOE's responsibilities as described in this subsection, prescribe from 
time to time classes of work as to which applicability or 
nonapplicability of the Act is clear, for which the Head of the 
Contracting Activity will require no further DOE determination on 
coverage in advance of the work. For all work, controls to be 
established by the Head of the Contracting Activity should provide for 
notification to the contractor before work is begun as to whether such 
work is covered. The Head of the Contracting Activity is responsible for 
submitting to the Wage and Hours Division, Employment Standards 
Administration, Department of Labor, Washington, D.C. 20210, all DOE 
requests for project area or installation wage determinations, or 
individual determinations, or extensions or modification thereto. 
Requests for such determinations shall be made on Standard Form 308, at 
least 30 calendar days before they are required for use in advertising 
for bids or requests for proposals.
    (c) Experimental installations. Within DOE programs, a variety of 
experiments are conducted involving materials, fuels, coolants, and 
processing

[[Page 440]]

equipment. Certain types of situations where tests and experiments have 
presented coverage questions are described as follows:
    (1) Set-ups of device and/or processes. The proving out of 
investigative findings and theories of a scientific and technical nature 
may require the set-up of various devices and/or processes at an early, 
pre-prototype stage of development. These may range from laboratory 
bench size to much larger set-ups. As a rule, these set-ups are made 
within established facilities (normally laboratories), required utility 
connections are made to services provided as a part of the basic 
facilities, and the activity as a whole falls within the functional 
purpose of the facility. Such set-ups are generally not covered. 
However, the erection of structures which are public works is covered if 
construction type work, other than incidental work, is involved. 
Preparatory work for the set-up requiring structural changes or 
modifications of basic utility services, as distinguished from 
connections thereto, is covered. The following are illustrations of 
noncovered set-ups of devices and/or processes:
    (i) Assembly of piping and equipment within existing ``hot cell'' 
facilities for proving out a conceptual design of a chemical processing 
unit;
    (ii) Assembly of equipment, including adaptation and modification 
thereof, in existing ``hot cell'' facilities to prove out a conceptual 
design for remotely controlled machining equipment;
    (iii) Assembly of the first graphite pile in a stadium at Stagg 
Field in Chicago;
    (iv) Assembly of materials and equipment for particular aspects of 
the direct current thermonuclear experiments to explore feasibility and 
to study other ramifications of the concept of high energy injection and 
to collect data thereon.
    (2) Loops. Many experiments are carried on in equipment assemblies, 
called loops, in which liquids or gases are circulated under monitored 
and controlled conditions. For purposes of determining coverage under 
the Act, loops may be classed as loop facilities or as loop set-ups. 
Both of these classes of loops can include in-reactor loops and out-of-
reactor loops. In differentiating between clearly identified loop set-
ups and loop facilities, an area exists in which there have been some 
questions of coverage, such as certain loops at the Material Test 
Reactor and at Engineering Test Reactor and the Idaho National 
Engineering and Environmental Laboratory site. Upon clarification of 
this area, further illustrations will be added. In the meantime, the 
differentiation between loop set-ups and loop facilities must be made on 
a case-by-case basis, taking into account the total criteria set forth 
in this subpart.
    (i) Loop set-ups. The assembly, erection, modification, and 
disassembly of a loop set-up is noncovered. A noncontroversial example 
of a loop set-up is one which is assembled in a laboratory, e.g., Oak 
Ridge National Laboratory, Argonne National Laboratory, or Lawrence 
Livermore National Laboratory, for a particular test and thereafter 
disassembled. However, preparatory work for a loop set-up requiring 
structural changes or modifications of basic utility services as 
distinguished from connections thereto is covered, as are material and 
equipment that are installed for a loop set-up which is a permanent part 
of the facility or which is use for a succession of experimental 
programs.
    (ii) Loop facilities. A loop facility differs from a loop set-up in 
that it is of a more permanent character. It is usually, but not always, 
of greater size. It normally involves the building or modification of a 
structure. Sometimes it is installed as a part of construction of the 
facility. It may be designed for use in a succession of experimental 
programs over a longer period of time. Examples of loop facilities are 
the in-reactor ``K'' loops at Hanford and the large Aircraft Nuclear 
Propulsion loop at the Idaho National Engineering and Environmental 
Laboratory site. The on-site assembly and erection of such loop 
facilities are covered. However, once a loop facility is completed and 
becomes operational, the criteria set forth in this paragraph for 
operational and maintenance activities apply.
    (3) Reactor component experiments. Other experiments are carried on 
by insertion of experimental components within reactor systems without 
the use

[[Page 441]]

of a loop assembly. An example of reactor facilities erected for such 
experimental purposes are the special power excursion test reactors 
(SPETRs) at the National Reactor Test Site which are designed for 
studying reactor behavior and performance characteristics of certain 
reactor components. Such a facility may consist of a reactor vessel, 
pressurizing tank, coolant loops, pumps, heat exchangers, and other 
auxiliary equipment as needed. The facility also may include sufficient 
shielding to permit work on the reactor to proceed following a short 
period of power interruption, and buildings as needed to house the 
reactor and its auxiliary equipment. The erection and on-site assembly 
of such a reactor facility is covered, but the components whose 
characteristics are under study are excluded from coverage. To 
illustrate, one of the SPETRs planned for studies of nuclear reactor 
safety is designed to accommodate various internal fuel and control 
assemblies. The internal structure of the pressure vessel is designed so 
that cores of different shapes and sizes may be placed in the vessel for 
investigation, or the entire internal structure may be easily removed 
and replaced by a structure which will accept a different core design. 
Similarly, the control rod assembly is arranged to provide for 
flexibility in the removal of instrument leads and experimental 
assemblies from within the core.
    (4) Tests or experiments in peaceful uses of nuclear energy. These 
tests or experiments are varied in nature and some are only in a 
planning stage. They consist of one or more nuclear or nonnuclear 
detonations for the purposes of acquiring data. The data can include 
seismic effects, radiation effects, amount of heat generated, amount of 
material moved and so forth. Some of these tests are conducted in 
existing mines, while others are conducted in facilities specifically 
constructed for the tests or experiments. In general, all work which can 
be performed in accordance with customary drawings and specifications, 
as well as other work in connection with preparation of facilities is 
treated as covered work. Such work includes tunneling, drilling, 
excavation and back-filling, erection of buildings or other structures, 
and installation of utilities. The installation of the nonnuclear 
material or nuclear device to be detonated, and the instrumentation and 
connection between such material or device and the instrumentation are 
treated as noncovered work.
    (5) Tests or experiments in military uses of nuclear energy. As in 
970.2204-1-1(c)(4), these tests or experiments can be varied in nature. 
However, under this category it is intended to include only detonation 
of nonnuclear material or nuclear devices. The material or devices can 
be detonated either underground, at ground level, or above the ground. 
These tests or experiments have been conducted in, on, or in connection 
with facilities specifically constructed for such tests or experiments. 
As in tests or experiments in peaceful uses of nuclear energy, all work 
which can be performed in accord with customary drawings and 
specifications, as well as other work in connection with preparation of 
facilities are treated as covered work. Such work includes building 
towers or similar structures, tunneling, drilling, excavation and 
backfilling, erection of buildings or other structures, and installation 
of utilities. The installation of the nonnuclear material or nuclear 
devices and instrumentation are treated as noncovered work.
    (d) Construction site contiguous to an established manufacturing 
facility. As DOE-owned property sometimes encompasses several thousand 
acres of real estate, a number of separate facilities may be located in 
areas contiguous to each other on the same property. These facilities 
may be built over a period of years, and established manufacturing 
activities may be regularly carried on at one site at the same time that 
construction of another facility is underway at another site. On 
occasion, the regular manufacturing activities of the operating 
contractor at the first site may include the manufacture, assembly, and 
reconditioning of components and equipment which in other industries 
would normally be done in established commercial plants. While the 
manufacture of components and equipment in the manufacturing plant is 
noncovered, the installation of any

[[Page 442]]

such manufactured items on a construction job is covered.



970.2208  Equal employment opportunity.

    The equal employment opportunity provisions of 48 CFR subpart 22.8 
and subpart 922.8 of this chapter, including Executive Order 11246 and 
41 CFR part 60, are applicable to DOE management and operating 
contracts.



970.2210  Service Contract Act.

    The Service Contract Act of 1965 is not applicable to contracts for 
the management and operation of DOE facilities, but it is applicable to 
subcontracts under such contracts (see 48 CFR 970.5244-1).



970.2270  Unemployment compensation.

    (a) Each state has its own unemployment compensation system to 
provide payments to workers who become unemployed involuntarily and 
through no fault of their own. Funds are provided for unemployment 
compensation benefits through a payroll tax on employers. Most DOE 
contractors are subject to the unemployment compensation tax laws of the 
states in which they are located. It is the policy to assure, both in 
the negotiation and administration of cost-reimbursement type contracts, 
that economical and practical arrangements are made and practiced with 
respect to unemployment compensation.
    (b) Contract exempt from state laws. (1) Some contractors are exempt 
from state unemployment compensation laws, usually on grounds that they 
are nonprofit organizations or subdivisions of State governments. Most 
states, however, permit such employers to elect unemployment 
compensation coverage on a voluntary basis. Under such circumstances, 
all existing or prospective cost-reimbursement contractors shall be 
encouraged to provide unemployment compensation coverage or equivalent 
substitutes.
    (2) It is also DOE policy that, prior to the award or extension of a 
management and operating contract, exempt contractors or prospective 
contractors shall be required to submit to the contracting officer a 
statement that they will either elect coverage or provide equivalent 
substitutes for unemployment compensation, or in the alternative, submit 
evidence that it is impractical to do so. If any exempt contractor or 
prospective contractor submits that it is impractical to elect coverage 
or to provide an equivalent substitute, appropriate Office of Contract 
and Resource Management, within the Headquarters procurement 
organization, staff shall review that position prior to recommending an 
award or extension of the contract. If there are substantial reasons for 
not electing coverage or for not providing equivalent substitutes, a 
contract may be awarded or extended. Headquarters' staff review and 
recommendation shall be based on such factors as:
    (i) The specific provisions of the unemployment compensation law of 
the State;
    (ii) The extent to which the establishment of special conditions on 
DOE work may have an adverse effect on the contractor's general policies 
and operating costs in its private operations;
    (iii) The numerical relationship between the contractor's private 
work force and its employees performing only work for DOE;
    (iv) The contractor's record with respect to work force stability 
and the general outlook with respect to future work force stability;
    (v) In a replacement contractor situation, whether or not the prior 
contractor had coverage or suitable substitutes; and
    (vi) The particular labor relations implications involved.



Subpart 970.23_Environment, Conservation, Occupational Safety, and Drug 
                             Free Work Place



970.2303  Hazardous materials identification and material safety.



970.2303-1  General.

    (a) The Department of Energy regulates the nuclear safety of its 
major facilities under its own statutory authority derived from the 
Atomic Energy

[[Page 443]]

Act and other legislation. The Department also regulates, under certain 
specific conditions, the use by its contractors of radioactive materials 
and ionizing radiation producing machines.
    (b) The inclusion of environmental, safety and health clauses in DOE 
contracts shall be made by the contracting officer in accordance with 
this subpart and in consultation with appropriate environmental, safety 
and health program management personnel.
    (c)(1) For DOE management and operating contracts and other 
contracts designated by the Procurement Executive, or designee, the 
clause entitled ``Conditional Payment of Fee, Profit, and Other 
Incentives--Facility Management Contracts'' implements the requirements 
of section 234C of the Atomic Energy Act for the use of a contract 
clause that provides for an appropriate reduction in the fee or amount 
paid to the contractor under the contract in the event of a violation by 
the contractor or any contractor employee of any Departmental regulation 
relating to the enforcement of worker safety and health concerns. The 
clause, in part, provides for reductions in the amount of fee, profit, 
or share of cost savings that is otherwise earned by the contractor for 
performance failures relating to worker safety and health violations 
under the Department's regulations.
    (2)(i) Section 234C of the Atomic Energy Act states that DOE shall 
either pursue civil penalties (implemented at 10 CFR part 851) for a 
violation under section 234C of the Atomic Energy Act (42 U.S.C. 2282c) 
or a contract fee reduction, but not both.
    (ii) The contracting officer must coordinate with the Office of 
Price Anderson Enforcement within the Office of the Assistant Secretary 
for Environment, Safety and Health (or with any designated successor 
office) before pursuing contract fee reduction in the event of a 
violation by the contractor or any contractor employee of any 
Departmental regulation relating to the enforcement of worker safety and 
health concerns.

[65 FR 81009, Dec. 22, 2000, as amended at 68 FR 68782, Dec. 10, 2003]



970.2303-2  Contract clauses.

    (a) When work under management and operating contracts and 
subcontracts thereunder is to be performed at a facility where DOE will 
exercise its statutory authority to enforce occupational safety and 
health standards applicable to the working conditions of the contractor 
and subcontractor employees at such facility, the clause at 48 CFR 
970.5223-1, Integration of Environment, Safety and Health into Work 
Planning and Execution, shall be used in such contract or subcontract 
and made applicable to the work if conditions in paragraphs (a)(1) 
through (3) of this section, are satisfied:
    (1) DOE work is segregated from the contractor's or subcontractor's 
other work;
    (2) The operation is of sufficient size to support its own safety 
and health services; and
    (3) The facility is government-owned, or leased by or for the 
account of the government.
    (b) The clause set forth in 952.223-72, Radiation Protection and 
Nuclear Criticality, shall be included in those contracts or 
subcontracts for, and be made applicable to, work to be performed at a 
facility where DOE does not elect to assert its statutory authority to 
enforce occupational safety and health standards applicable to the 
working conditions of contractor and subcontractor employees, but does 
need to enforce radiological safety and health standards pursuant to 
provisions of the contract or subcontract rather than by reliance upon 
Nuclear Regulatory Commission licensing requirements (including 
agreements with States under section 274 of the Atomic Energy Act).



970.2304  Use of recovered/recycled materials.



970.2304-1  General.

    The policy for the acquisition and use of EPA designated items, 
i.e., items with recovered/recycled content, is set forth at 48 CFR 
(FAR) 23.4--Use of Recovered Materials as supplemented by 48 CFR (DEAR) 
923.405(e) and by 48 CFR

[[Page 444]]

(FAR) 23.704, Application to Government-owned or leased facilities, and 
48 CFR (FAR) 23.705, Contract clause.

[68 FR 6359, Feb. 7, 2003]



970.2304-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR (FAR) 
52.223-10, Waste Reduction Program, and the clause at 48 CFR (DEAR) 
970.5223-2, Affirmative Procurement Program, in contracts for the 
management of DOE facilities, including national laboratories. If the 
contractor subcontracts a significant portion of the operation of the 
Government facility which includes the acquisition of items designated 
in EPA's Comprehensive Procurement Guidelines, the subcontract shall 
contain a clause substantially the same as that at 48 CFR (DEAR) 
970.5223-2. The EPA Comprehensive Procurement Guidelines identify 
products which Federal agencies and their contractors are to procure 
with recycled content pursuant to 40 CFR part 247. Examples of such 
subcontracts would be operation of the facility supply function, 
construction or remodeling at the facility, or maintenance of the 
facility motor vehicle fleet. In situations in which the facility 
management contractor can reasonably determine the amount of products 
with recovered/recycled content to be acquired under the subcontract, 
the facility management contractor is not required to flow down the 
reporting requirement of the 970.5223-2 clause. Instead, the facility 
management contractor may include the subcontract quantities in its own 
report and include an agreement in the subcontract that such products 
will be acquired with recovered/recycled content and that the 
subcontractor will advise if it is unable to procure such products with 
recovered/recycled content because the product is not available:
    (a) Competitively within a reasonable time;
    (b) At a reasonable price; or,
    (c) Within the performance requirements.

[68 FR 6359, Feb. 7, 2003]



970.2305  Workplace substance abuse programs--management and operating 
contracts.



970.2305-1  General.

    (a) The Department of Energy (DOE), as part of its overall 
responsibilities to protect the environment, maintain public health and 
safety, and safeguard the national security, has established policies, 
criteria, and procedures for management and operating contractors to 
develop and implement programs that help maintain a workplace free from 
the use of illegal drugs.
    (b) Regulations concerning DOE's management and operating contractor 
workplace substance abuse programs are promulgated at 10 CFR part 707, 
Workplace Substance Abuse Programs at DOE Sites.



970.2305-2  Applicability.

    (a) All management and operating contracts awarded under the 
authority of the Atomic Energy Act of 1954, as amended, are required to 
implement the policies, criteria, and procedures of 10 CFR part 707, 
Workplace Substance Abuse Programs at DOE Sites.
    (b) Except as otherwise provided for in this subpart, management and 
operating contracts subject to the requirements of 10 CFR part 707 and 
this subpart shall not be subject to 48 CFR 23.5, Drug Free Workplace.



970.2305-3  Definitions.

    Terms and words relating to DOE's Workplace Substance Abuse 
Programs, as used in this section, have the same meanings assigned to 
such terms and words in 10 CFR part 707.



970.2305-4  Solicitation provision and contract clause.

    (a) The contracting officer shall insert the provision at 48 CFR 
970.5223-3, Agreement Regarding Workplace Substance Abuse Programs at 
DOE Sites, in solicitations for the management and operation of DOE-
owned or -controlled sites operated under the authority of the Atomic 
Energy Act of 1954, as amended.
    (b) The contracting officer shall insert the clause at 970.5223-4, 
Workplace Substance Abuse Programs at DOE Sites, in contracts for the 
management

[[Page 445]]

and operation of DOE-owned or -controlled sites operated under the 
authority of the Atomic Energy Act of 1954, as amended.



970.2306  Suspension of payments, termination of contract, and debarment 
and suspension actions.

    (a) The contracting officer shall comply with the procedures of 48 
CFR 23.506 regarding the suspension of contract payments, the 
termination of the contract for default, and the debarment and 
suspension of a contractor relative to failure to comply with the clause 
at 48 CFR 970.5223-4, Workplace Substance Abuse Programs at DOE Sites.
    (b) For purposes of 10 CFR part 707, the specific causes for 
suspension of contract payments, termination of the contract for 
default, and debarment and suspension of the contractor are:
    (1) The contractor fails to either comply with the requirements of 
10 CFR part 707 or perform in a manner consistent with its approved 
program;
    (2) The contractor has failed to comply with the terms of the 
provision at 48 CFR 970.5223-3, Agreement Regarding Workplace Substance 
Abuse Programs at DOE Sites;
    (3) Such a number of contractor employees having been convicted of 
violations of criminal drug statutes for violations occurring on the 
DOE-owned or -controlled site, as to indicate that the contractor has 
failed to make a good faith effort to provide a drug free workplace; or,
    (4) The offeror has submitted a false certification in response to 
the provision at 48 CFR 970.5223-3, Agreement Regarding Workplace 
Substance Abuse Programs at DOE Sites.



970.2307  Contracting for Environmentally Preferable and Energy-Efficient 
Products and Services.



970.2307-1  Motor vehicle fleet operations.

    Executive Order 13149 provides that the Federal motor vehicle fleet 
will serve as an example and provide a leadership role in the reduction 
of petroleum consumption through improvements in fleet fuel efficiency 
and the use of alternative fuel vehicles and alternative fuels. Part 2 
of the Order establishes goals for Federal Government fleet efficiency 
and requires the development of strategies to accomplish the goals. 
Section 403 of the Order provides that environmentally preferable motor 
vehicle products, including biobased motor vehicle products, will be 
used in the maintenance of Federal fleet motor vehicles when these 
products are reasonably available and meet vehicle manufacturers' 
recommended performance standards. Environmentally preferable motor 
vehicle products are among the products contained in the Comprehensive 
Procurement Guidelines list of products with recycled content to be 
procured pursuant to the clause at 48 CFR 970.5223-2. Section 505 of 
Executive Order 13149 requires that the goals and requirements of the 
Order be included in all management contracts which include Federal 
motor vehicle fleet operations. Section 506 of Executive Order 13149 
exempts military tactical, law enforcement, and emergency vehicles from 
the requirements of the order.

[68 FR 52131, Sept. 2, 2003]



970.2307-2  Contract clause.

    Include the clause at 970.5223-5, DOE Motor Vehicle Fleet Fuel 
Efficiency, in all management contracts providing for Contractor 
management of the motor vehicle fleet.

[68 FR 52131, Sept. 2, 2003]



               Subpart 970.26_Other Socioeconomic Programs



970.2670  Implementation of Section 3021 of the Energy Policy Act of 1992.



970.2670-1  Requirements.

    The goal requirements of section 3021 of the Energy Policy Act of 
1992, and the attendant reporting requirements shall be included in the 
subcontracting plan for the management and operating contract and shall 
apply to the annual dollar obligations specifically provided to the 
contractor for competitively awarded subcontracts that fulfill Energy 
Policy Act requirements.

[[Page 446]]



970.2671  Diversity.



970.2671-1  Policy.

    Department of Energy policy recognizes that full utilization of the 
talents and capabilities of a diverse work force is critical to the 
achievement of its mission. The principal goals of this policy are to 
foster and enhance partnerships with small, small disadvantaged, women-
owned small businesses, and educational institutions; to match 
capabilities with existing opportunities; to track small, small 
disadvantaged, women-owned small business, and educational activity; and 
to develop innovative strategies to increase opportunities.



970.2671-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5226-
1, Diversity Plan, in all management and operating contracts.



970.2672  Implementation of Section 3161 of the National Defense 
Authorization Act for Fiscal Year 1993.



970.2672-1  Policy.

    Consistent with the objectives of section 3161 of the National 
Defense Authorization Act for Fiscal Year 1993, 42 U.S.C. 7274h, in 
instances where the Department of Energy has determined that a change in 
work force at a DOE Defense Nuclear Facility is necessary, DOE 
contractors and subcontractors at DOE Defense Nuclear Facilities shall 
accomplish work force restructuring or displacement so as to mitigate 
social and economic impacts and in a manner consistent with any DOE work 
force restructuring plan in effect for the facility or site. In all 
cases, mitigation shall include the requirement for hiring preferences 
for employees whose positions have been terminated (except for 
termination for cause) as a result of changes to the work force at the 
facility due to restructuring accomplished under the requirements of 
section 3161. Where applicable, contractors may take additional actions 
to mitigate consistent with the Department's Workforce Restructuring 
Plan for the facility or site.



970.2672-2  Requirements.

    The requirements set forth in 48 CFR 926.71, Implementation of 
Section 3161 of the National Defense Authorization Act for Fiscal Year 
1993, for contractors and subcontractors to provide a hiring preference 
for employees under Department of Energy contracts whose employment in 
positions at a Department of Energy Defense Nuclear Facility is 
terminated (except for a termination for cause) applies to management 
and operating contracts.



970.2672-3  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5226-
2, Workforce Restructuring Under Section 3161 of the National Defense 
Authorization Act for Fiscal Year 1993, in contracts for the management 
and operation of Department of Energy Defense Nuclear Facilities and, as 
appropriate, in other contracts that include site management 
responsibilities at a Department of Energy Defense Nuclear Facility.



970.2673  Regional partnerships.



970.2673-1  Policy.

    It is the policy of the DOE to be a constructive partner in the 
geographic region in which DOE conducts its business. The basic elements 
of this policy include:
    (a) Recognizing the diverse interests of the region and its 
stakeholders,
    (b) Engaging regional stakeholders in issues and concerns of mutual 
interest, and
    (c) Recognizing that giving back to the community is a worthwhile 
business practice.



970.2673-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5226-
3, Community Commitment, in all management and operating contracts.



              Subpart 970.27_Patents, Data, and Copyrights



970.2701  General.



970.2701-1  Applicability.

    This subpart applies to negotiation of patent rights, rights in 
technical data

[[Page 447]]

provisions and other related provisions for the Department of Energy 
contracts for the management and operation of DOE's major sites or 
facilities, including the conduct of research and development and 
nuclear weapons production, and contracts which involve major, long-term 
or continuing activities conducted at a DOE site.



970.2702  Patent related clauses.



970.2702-1  Authorization and consent.

    Contracting officers must use the clause at 970.5227-4, 
Authorization and Consent, instead of the clause at 48 CFR 52.227-1.



970.2702-2  Notice and assistance regarding patent and copyright infringement.

    Contracting officers must use the clause at 970.5227-5, Notice and 
Assistance Regarding Patent and Copyright Infringement, instead of the 
clause at 48 CFR 52.227-2.



970.2702-3  Patent indemnity.

    (a) Contracting officers must use the clause at 970.5227-6, Patent 
Indemnity--Subcontracts to assure that subcontracts appropriately 
address patent indemnity.
    (b) Normally, the clause at 48 CFR 52.227-3 would not be appropriate 
for an M&O contract; however, if there is a question, such as when the 
mission of the contractor involves production, the contracting officer 
must consult with local patent counsel and use the clause where 
appropriate.



970.2702-4  Royalties.

    Contracting officers must use the solicitation provision at 
970.5227-7, Royalty Information, and the clause at 970.5227-8, Refund of 
Royalties instead of the provision at 48 CFR 52.227-8 and the clause at 
48 CFR 52.227-9, respectively.



970.2702-5  Rights to proposal data.

    Contracting officers must include the clause at 48 CFR 52.227-23, 
Rights to Proposal Data, in all solicitations and contracts for the 
management and operation of DOE sites and facilities.



970.2702-6  Notice of right to request patent waiver.

    Contracting officers must include the provision at 970.5227-9 in all 
solicitations for contracts for the management and operation of DOE 
sites or facilities.



970.2703  Patent rights.



970.2703-1  Purposes of patent rights clauses.

    (a) DOE sites and facilities are managed and operated on behalf of 
the Department of Energy by a contractor, pursuant to management and 
operating contracts that are generally awarded for a five (5) year term, 
with the possibility for renewal. Special provisions relating to patent 
rights are appropriately incorporated into an M&O contract because of 
the unique circumstances and responsibilities of managing and operating 
a Government-owned facility, as compared to other federally funded 
research and development contracts.
    (b)(1) Technology transfer mission clause. In accordance with Public 
Law 101-189, section 3133(d), DOE may grant technology transfer 
authority to M&O contractors operating a DOE facility. Generally, M&O 
contractors have the right to elect to retain title to inventions made 
under the contract, whether a nonprofit or educational organizations, as 
a result of 35 U.S.C. 200 et seq. (Bayh-Dole Act), or a large business, 
as a result of a class patent waiver issued pursuant to 10 CFR part 784. 
Under such contracts, the M&O contractor assumes responsibilities for 
commercializing retained inventions, in accordance with the Technology 
Transfer Mission clause provided at 970.5227-3. That clause also governs 
such activities as the distribution of royalties earned from inventions 
made under the contract and the transfer of patent rights in inventions 
made under the contract to successor contractors.
    (2) If the M&O contractor is a nonprofit organization or small 
business firm having technology transfer authority, the following 
clauses are inserted into the M&O contract: 970.5227-3 and 970.5227-10.
    (3) If the M&O contract has technology transfer as a mission and is 
to

[[Page 448]]

be performed by a for-profit, large business firm that has been granted 
an advance class waiver, the following clauses are inserted into the M&O 
contract: 970.5227-3 and 970.5227-12. The terms of the clause at 
970.5227-12 are subject to modification to conform to the terms of the 
class waiver.
    (4) If the M&O contract does not have a technology transfer mission 
and is to be performed by a for-profit, large business firm and does not 
have advance class waiver under 10 CFR part 784, the patent rights 
clause at 970.5227-11 is inserted into the M&O contract, and the 
Technology Transfer Mission clause is inapplicable.
    (5) If the contractor is an educational institution, a non-profit 
organization or a small business firm and is conducting privately funded 
technology transfer activities, involving the use of private funds to 
conduct licensing and marketing activities related to inventions made 
under the contract in accordance with the Bayh-Dole Act, DOE may modify 
the patent rights clause (970.5227-10) to address issues such as the 
disposition of royalties earned under the privately funded technology 
transfer program, the transfer of patent rights to a successor 
contractor, allowable cost restrictions concerning privately funded 
technology transfer activities, and the Government's freedom from any 
liability related to licensing under the contractor's privately funded 
technology transfer program.
    (c) Contracting officers must consult with DOE patent counsel 
assisting the contracting activity or the Assistant General Counsel for 
Technology Transfer and Intellectual Property for assistance in 
selecting for use in the solicitation, negotiating, or approving 
appropriate patent rights clauses for a M&O contract. It may be 
appropriate to include more than one patent rights clause in a 
solicitation if the successful contractor could, for instance, be either 
an educational or a large business. If a large business may be selected 
for performance of a contract that will include a technology transfer 
clause, the solicitation must include the clause at 970.5227-12 to 
reflect the waiver that will likely be granted. If the solicitation 
includes more than one patent clause, it must include an explanation of 
the circumstances under which the appropriate clause will be used. The 
final award must contain only one patent rights clause.



970.2703-2  Patent rights clause provisions for management and operating 
contractors.

    (a) Allocation of Principal Rights: Bayh-Dole provisions. If the 
management and operating contractor is an educational institution or 
nonprofit organization, the patent rights clause provided at 970.5227-10 
must be inserted into the M&O contract. Such entities are beneficiaries 
of Bayh-Dole Act, including the paramount right of the contractor to 
elect to retain title to inventions conceived or first actually reduced 
to practice in performance of work under the contract, except in DOE-
exempted areas of technology or in operation of DOE facilities primarily 
dedicated to naval nuclear propulsion or weapons related programs.
    (b) Allocation of Principal Rights: Government title. (1) The patent 
rights clause provided at 970.5227-11 must be incorporated into the M&O 
contract if the contractor is a for-profit, large business firm and the 
contract does not have a technology transfer mission or if, without 
regard to the type of contractor, the contract is for the operation of a 
DOE facility primarily dedicated to naval nuclear propulsion or weapons 
related programs. That clause provides for DOE's statutory obligation to 
take title to inventions conceived or first actually reduced to practice 
in the course of or under an M&O contract, and does not contemplate an 
advance class waiver of Government rights in inventions, or 
participation by the contractor in technology transfer activities.
    (2) While only in rare circumstances does a for-profit large 
business contractor whose contract contains no technology transfer 
mission receive rights in or title to inventions made under the 
contract, the contractor does have the right to request a license or 
foreign patent rights in inventions made under the contract, and may 
petition for a waiver of Government rights in identified inventions. The 
patent rights clause 970.5227-11 does not

[[Page 449]]

include many of the provisions of patent rights clauses 970.5227-10 and 
970.5227-12, related to the filing of patent applications by the 
contractor, the granting of rights in inventions by the contractor to 
third parties (preference for United States industry), and conditions 
allowing the Government to grant licenses to third parties in inventions 
retained by the contractor (march-in rights). Any instrument granting 
rights in inventions made under a contract governed by patent rights 
clause 970.5227-11 must include these additional provisions within its 
terms and conditions.
    (c) Allocation of Principal Rights: Contractor right to elect title 
under an advance class waiver. If the M&O contractor is a for-profit, 
large business firm and the Government has granted an advance class 
waiver of Government rights in inventions made in the course of or under 
the M&O contract, under the authority of the Atomic Energy Act of 1954 
(42 U.S.C. 2182) and the Federal Nonnuclear Energy Act of 1974 (42 
U.S.C. 5908(c)), the patent rights clause provided at 970.5227-12 must 
be inserted into the M&O contract, unless the terms and conditions of 
such an approved waiver alter or replace the patent rights clause 
provisions pursuant to 10 CFR part 784.
    (d) Extensions of time--DOE discretion. The patent rights clauses 
for M&O contracts require the contractor to take certain actions within 
prescribed time periods to comply with the contract and preserve its 
rights in inventions. The M&O contractor may request extensions of time 
in which to take such actions by submitting written justification to 
DOE, and DOE may grant the contractor's requests, on a case-by-case 
basis. If the time period expired due to negligence by the contractor, 
DOE may grant a request for an extension of time upon a showing by the 
contractor that corrective procedures are in place to avoid such 
negligence in the future. If a contractor is requesting an extension of 
time in which to elect to retain title to an invention, DOE may grant 
the request if the extension allows the contractor to conduct further 
experimentation, market research, or other analysis helpful to determine 
contractor interest in electing title to the invention, among other 
considerations. Generally, the extensions of time are for periods of 
between six (6) months to one (1) year.
    (e) Facilities license. These include the rights to make, use, 
transfer, or otherwise dispose of all articles, materials, products, or 
processes embodying inventions or discoveries used or embodied in the 
facility regardless of whether or not conceived or first actually 
reduced to practice under or in the course of such a contract. The 
patent rights clauses, 970.5227-10, 970.5227-11, 970.5227-12, each 
contain a provision granting the Government this facilities license.
    (f) Deletion of classified inventions provision. If DOE determines 
that the research, development, demonstration or production work to be 
performed during the course of a management and operating contract most 
probably will not involve classified subject matter or result in any 
inventions that require security classification, DOE patent counsel may 
advise the contracting officer to delete the patent rights clause 
provision entitled, ``Classified Inventions'' from the M&O contract.
    (g) Alternate 1--Weapons Related Research or Production. If DOE 
grants technology transfer authority to a DOE facility, pursuant to 
Public Law 101-189, section 3133(d), and the DOE owned facility is 
involved in weapons related research and development, or production, 
then Alternate 1 of the patent rights clauses must be inserted into the 
M&O contract. Alternate 1 defines weapons related subject inventions and 
restricts the contractor's rights with respect to such inventions.



970.2704  Rights in data.



970.2704-1  General.

    (a) Rights in data relating to the performance of the contract and 
to all facilities are significant in assuring continuity of the 
management and operation of DOE facilities. It is crucial in assuring 
DOE's continuing ability to perform its statutory missions that DOE 
obtain rights to all data produced or specifically used by its 
management and operating contractors and appropriate subcontractors. In 
order to obtain the necessary rights in technical

[[Page 450]]

data, DOE contracting officers shall assure that management and 
operating contracts contain either the Rights in Data clause at 48 CFR 
970.5227-1, Rights in Data--Facilities, or the clause at 48 CFR 
970.5227-2, Rights in Data--Technology Transfer. Selection of the 
appropriate clause is dependent upon whether technology transfer is a 
mission of the management and operating contract pursuant to the 
National Competitiveness Technology Transfer Act of 1989, Public Law 
101-189, (15 U.S.C. 3711 et seq., as amended). If technology transfer is 
not a mission of the management and operating contract, the clause at 48 
CFR 970.5227-1, Rights in Data--Facilities, shall be used. In those 
instances in which technology transfer is a mission of the contract, the 
clause at 48 CFR 970.5227-2, Rights in Data--Technology Transfer, shall 
be used.
    (b) Employees of the management and operating contractor may not be 
used to assist in the preparation of a proposal or bid for services 
which are similar or related to those being performed under the 
contract, which are to be performed by the contractor or its parent or 
affiliate organization for commercial customers unless the employee has 
been separated from work under the DOE contract for such period as the 
Head of the Contracting Activity or designee shall have directed.



970.2704-2  Procedures.

    (a) The clauses at 48 CFR 970.5227-1, Rights in Data-Facilities, and 
48 CFR 970.5227-2, Rights in Data--Technology Transfer, both provide 
generally for Government ownership and for unlimited rights in the 
Government for all data first produced in the performance of the 
contract and unlimited rights in data specifically used in the 
performance of the contract. Both clauses provide that, subject to 
patent, security, and other provisions of the contract, the contractor 
may use contract data for its private purposes. The contractor, under 
either clause, must treat any data furnished by DOE or acquired from 
other Government agencies or private entities in the performance of 
their contracts in accordance with any restrictive legends contained 
therein.
    (b) Since both clauses secure access to and, if requested, delivery 
of technical data used in the performance of the contract, there is 
generally no need to use the Additional Technical Data Requirements 
clause at 48 CFR 52.227-16 in the management and operating contract.
    (c)(1) Paragraph (d) of the clause at 48 CFR 970.5227-1, Rights in 
Data--Facilities, and paragraph (f) of the clause at 48 CFR 970.5227-2, 
Rights in Data--Technology Transfer, provide for the inclusion in 
subcontracts of the Rights in Technical Data--General clause at 48 CFR 
52.227-14, with Alternate V, and modified in accordance with DEAR 
927.409. Those clauses also provide for the inclusion in appropriate 
subcontracts Alternates II, III, and IV to the clause at 48 CFR 52.227-
14 with DOE's prior approval and the inclusion of the Additional 
Technical Data Requirements clause at 48 CFR 52.227-16 in all 
subcontracts for research, development, or demonstration and all other 
subcontracts having special requirements for the production or delivery 
of data. In subcontracts, including subcontracts for related support 
services, involving the design or operation of any plants or facilities 
or specially designed equipment for such plants or facilities that are 
managed or operated by the contractor under its contract with DOE, the 
management and operating contractor shall use the Rights in Data--
Facilities clause at 48 CFR 970.5227-1.
    (2) Where, however, a subcontract is to be awarded by the management 
and operating contractor in connection with a program, as discussed at 
927.404-70, which provides statutory authority to protect from public 
disclosure, data first produced under contracts awarded pursuant to the 
program, contracting officers shall ensure that the management and 
operating contractor includes in that subcontract the rights in data 
clause provided by DOE Patent Counsel, consistent with any accompanying 
guidance.
    (3) Management and operating contractors and higher-tier 
subcontractors shall not use their power to award subcontracts as 
economic leverage to acquire rights in a subcontractor's limited rights 
data or restricted computer

[[Page 451]]

software for their private use, nor may they acquire rights in a 
subcontractor's limited rights data or restricted computer software 
except through the use of Alternate II or III to the clause at 48 CFR 
52.227-14, respectively, without the prior approval of DOE Patent 
Counsel.
    (d)(1) Paragraphs (e) and (f) of the clause at 48 CFR 970.5227-1, 
Rights in Data--Facilities, and paragraphs (g) and (h) of the clause at 
48 CFR 970.5227-2, Rights in Data--Technology Transfer, provide for the 
contractor's granting a nonexclusive license in any limited rights data 
and restricted computer software specifically used in performance of the 
contract.
    (2) In certain instances the objectives of DOE would be frustrated 
if the Government did not obtain, at the time of contracting, limited 
license rights on behalf of responsible third parties and the 
Government, and to limited rights data or restricted computer software 
or both necessary for the practice of subject inventions or data first 
produced or delivered in the performance of the contract. This situation 
may arise in the performance of management and operating contracts and 
contracts for the management or operation of a DOE facility or site. 
Contracting officers should consult with program officials and Patent 
Counsel. No such rights should be obtained from a small business or non-
profit organization, unless similar rights in background inventions of 
the small business or non-profit organization have been authorized in 
accordance with 35 U.S.C. 202(f). Where such a background license is in 
DOE's interest, a provision that provides substantially as Alternate VI 
at 48 CFR 952.227-14 should be added to the appropriate clause, 48 CFR 
970.5227-1, Rights in Data--Facilities, or 48 CFR 970.5227-2, Rights in 
Data--Technology Transfer.
    (e) The Rights in Data--Technology Transfer clause at 48 CFR 
970.5227-2 differs from the clause at 48 CFR 970.5227-1, Rights in 
Data--Facilities, in the context of its more detailed treatment of 
copyright. In management and operating contracts that have technology 
transfer as a mission, the right to assert copyright in data first 
produced under the contract will be a valuable right, and 
commercialization of such data, including computer software, will assist 
the management and operating contractor in advancing the technology 
transfer mission of the contract. The clause at 48 CFR 970.5227-2, 
Rights in Data--Technology Transfer, provides for DOE approval of DOE's 
taking a limited copyright license for a period of five years, and, in 
certain rare cases, specified longer periods in order to contribute to 
commercialization of the data.
    (f) Contracting officers should consult with Patent Counsel to 
assure that requirements regarding royalties and conflicts of interest 
associated with asserting copyright in data first produced under the 
contract are appropriately addressed in the Technology Transfer Mission 
clause (48 CFR 970.5227-3) of the management and operating contract. 
Where it is not otherwise clear which DOE program funded the development 
of a computer software package, such as where the development was funded 
out of a contractor's overhead account, the DOE program which was the 
primary source of funding for the entire contract is deemed to have 
administrative responsibility. This issue may arise, among others, in 
the decision whether to grant the contractor permission to assert 
copyright. See paragraph (e) of the Rights in Data--Technology Transfer 
clause at 970.5227-2.
    (g) In management and operating contracts involving access to DOE-
owned Category C-24 restricted data, as set forth in 10 CFR part 725, 
DOE has reserved the right to receive reasonable compensation for the 
use of its inventions and discoveries, including its related restricted 
data and technology. Alternate I to each clause shall be used where 
access to Category C-24 restricted data is contemplated in the 
performance of a contract.



970.2704-3  Contract clauses.

    (a) The contracting officer shall insert the clause at 48 CFR 
970.5227-1, Rights in Data--Facilities, in management and operating 
contracts which do not contain the clause at 48 CFR 970.5227-2, Rights 
in Data--Technology Transfer. The contracting officer shall include the 
clause with its Alternate I

[[Page 452]]

in contracts where access to Category C-24 restricted data, as set forth 
in 10 CFR part 725, is to be provided to contractors.
    (b) The contracting officer shall insert the clause at 970.5227-2, 
Rights in Data--Technology Transfer, in management and operating 
contracts which contain the clause at 970.5227-3, Technology Transfer 
Mission. The contracting officer shall include the clause with its 
Alternate I in contracts where access to Category C-24 restricted data, 
as set forth in 10 CFR part 725, is to be provided to contractors.



970.2770  Technology Transfer.



970.2770-1  General.

    This subpart prescribes policies and procedures for implementing the 
National Competitiveness Technology Transfer Act of 1989, Public Law 
101-189, (15 U.S.C. 3711 et seq., as amended). The Act requires that 
technology transfer be established as a mission of each Government-owned 
laboratory operated under contract by a non-Federal entity. The National 
Defense Authorization Act for Fiscal Year 1994 expanded the definition 
of ``laboratory'' to include weapon production facilities that are 
operated for national security purposes and are engaged in the 
production, maintenance, testing, or dismantlement of a nuclear weapon 
or its components.



970.2770-2  Policy.

    All new awards for or extensions of existing DOE laboratory or 
weapon production facility management and operating contracts shall have 
technology transfer, including authorization to award Cooperative 
Research and Development Agreements (CRADAs), as a laboratory or 
facility mission under Section 11(a)(1) of the Stevenson-Wydler 
Technology Innovation Act of 1980, Public Law 96-480 (15 U.S.C. 3701 et 
seq., as amended). A management and operating contractor for a facility 
not deemed to be a laboratory or weapon production facility may be 
authorized on a case-by-case basis to support the DOE technology 
transfer mission including, but not limited to, participating in CRADAs 
awarded by DOE laboratories and weapon production facilities.



970.2770-3  Technology transfer and patent rights.

    The National Competitiveness Technology Transfer Act of 1989 (NCTTA) 
established technology transfer as a mission for Government-owned, 
contractor-operated laboratories, including weapons production 
facilities, and authorizes those laboratories to negotiate and award 
cooperative research and development agreements with public and private 
entities for purposes of conducting research and development and 
transferring technology to the private sector. In implementing the 
NCTTA, DOE has negotiated technology transfer clauses with the 
contractors managing and operating its laboratories. Those technology 
transfer clauses must be read in concert with the patent rights clause 
required by this subpart. Thus, each management and operating contractor 
holds title to subject inventions for the benefit of the laboratory or 
facility being managed and operated by that contractor.



970.2770-4  Contract clause.

    (a) The contracting officer shall insert the clause at 970.5227-3, 
Technology Transfer Mission, in each solicitation for a new or an 
extension of an existing laboratory or weapon production facility 
management and operating contract.
    (b) If the contractor is a nonprofit organization or small business 
eligible under 35 U.S.C. 200 et seq., to receive title to any inventions 
under the contract and proposes to fund at private expense the 
maintaining, licensing, and marketing of the inventions, the contracting 
officer shall use the basic clause with its Alternate I.
    (c) If the facility is operated for national security purposes and 
engaged in the production, maintenance, testing, or dismantlement of a 
nuclear weapon or its components, the contracting officer shall use the 
basic clause with its Alternate II.

[[Page 453]]



                   Subpart 970.28_Bonds and Insurance



970.2803  Insurance.



970.2803-1  Workers' Compensation Insurance.

    (a) Policies and requirements. (1) Workers' compensation insurance 
protects employers against liability imposed by workers' compensation 
laws for injury or death to employees arising out of, or in the course 
of, their employment. This type of insurance is required by state laws 
unless employers have acceptable programs of self-insurance.
    (2) Special requirements. Certain workers' compensation laws contain 
provisions which result in limiting the protection afforded persons 
subject to such laws. The policy with respect to these limitations as 
they affect persons employed by management and operating contractors is 
set forth as follows:
    (i) Elective provisions. Some worker's compensation laws permit an 
employer to elect not to be subject to its provisions. It is DOE policy 
to require these contractors to be subject to workers' compensation laws 
in jurisdictions permitting election.
    (ii) Statutory immunity. Under the provisions of some workers' 
compensation laws, certain types of employers; e.g., nonprofit 
educational institutions, are relieved from liability. If a contractor 
has a statutory option to accept liability, it is DOE policy to require 
the contractor to do so.
    (iii) Limited medical benefits. Some workers' compensation laws 
limit the liability of the employer for medical care to a maximum dollar 
amount or to a specified period of time. In such cases, a contractor's 
workers' compensation insurance policy should contain a standard 
extrastatutory medical coverage endorsement.
    (iv) Limits on occupational disease coverage and employers' 
liability. Some workers' compensation laws do not provide coverage for 
all occupational diseases. In such situations, a contractor's workers' 
compensation insurance policy should contain voluntary coverage for all 
occupational diseases.
    (3) Contractor ``employees' benefit plan''--self-insurers. The 
policies and requirements set forth in paragraph (a)(2) of this section 
apply where management and operating contractors purchase workers' 
compensation insurance. With respect to self-insured contractors, the 
objectives specified in paragraph (a)(2) also shall be met through 
primary or excess workers' compensation and employers' liability 
insurance policy(ies) or an approved combination thereof. ``Employees'' 
benefit plans'' which were established in prior years may be continued 
to contrast termination at existing benefit levels.
    (b) Assignment of responsibilities. (1) Office of Contract and 
Resource Management, within the Headquarters procurement organization, 
other officials, and the Heads of Contracting Activities, consistent 
with their delegations of responsibility, shall assure management and 
operating contracts are consistent with the policies and requirements of 
paragraph (a) of this section.
    (2) In discharging assigned responsibility, the Heads of Contracting 
Activities shall:
    (i) Periodically review workers' compensation insurance programs of 
management and operating contractors in the light of applicable workers' 
compensation statutes to assure conformance with the requirements of 
paragraph (a) of this section.
    (ii) Evaluate the adequacy of coverage of ``self-insured'' workers'' 
compensation programs;
    (iii) Provide arrangements for the administration of any existing 
``employees'' benefit plans until such plans'' are terminated; and
    (iv) Submit to the Office of Contract and Resource Management, 
within the Headquarters procurement organization, all proposals for the 
modification of existing ``employees' benefit plans.''
    (3) The Office of Contract and Resource Management, within the 
Headquarters procurement organization, is responsible for approving 
management and operating contractor ``employees' benefit plans.''



970.2803-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5228-
1, Insurance--Litigation and Claims, in all management and operating 
contracts.

[[Page 454]]

Paragraphs (h)(3) and (j)(2) of that clause apply to a nonprofit 
contractor only to the extent specifically provided in the individual 
contract.



                          Subpart 970.29_Taxes



970.2902  Federal excise taxes.



970.2902-1  Exemptions from Federal excise taxes.

    (a) The exemption respecting taxes on communication services or 
facilities has been held to extend to such services when furnished to 
DOE management and operating contractors who pay for such services or 
facilities from advances made to them by DOE under their contracts.
    (b) Where it is considered that a request for an additional 
exemption in the performance of a management and operating contract 
would be justified, a recommendation that such a request be made should 
be forwarded to the Chief Financial Officer, Headquarters.
    (c) Where tax exemption certificates are required in connection with 
the taxes cited in this section, the Head of the Contracting Activity 
will supply standard Government forms (SF 1094, U.S. Tax Exemption 
Certificate) on request.



970.2903  State and local taxes.



970.2903-1  Applicability of state and local taxes to the government.

    It is DOE policy to secure those immunities or exemptions from state 
and local taxes to which it is entitled under the Federal Constitution 
or state laws. In carrying out this policy, the Heads of Contracting 
Activities shall:
    (a) Take all necessary steps to preclude payment of any taxes for 
which any of the immunities or exemptions cited in this subpart are 
available. Advice of Counsel should be sought as to the availability of 
such immunities or exemptions;
    (b) Acquire directly and furnish to contractors as Government 
furnished property, equipment, material, or services when, in the 
opinion of the Head of the Contracting Activity:
    (1) Such direct acquisition will result in substantial savings to 
the Government, taking into consideration any additional administrative 
costs;
    (2) Such direct acquisition will not have a substantial adverse 
effect on the relationship between DOE and its contractor; and
    (3) Such direct acquisition will not have a substantial adverse 
effect on the DOE program or schedules.



970.2904  Contract clauses.



970.2904-1  Management and operating contracts.

    (a) Pursuant to 48 CFR 29.401-6(b), the clause at 48 CFR 52.229-10, 
State of New Mexico Gross Receipts and Compensating Tax, is applicable 
to management and operating contracts that meet the three conditions 
stated. The contracting officer shall modify paragraph (b) of the clause 
to replace the phrase ``Allowable Cost and Payment clause'' with the 
phrase ``Payments and advances.''
    (b) Contracting officers shall include the clause at 48 CFR 
970.5229-1, State and Local Taxes, in management and operating 
contracts.



                Subpart 970.30_Cost Accounting Standards



970.3002  CAS program requirements.



970.3002-1  Applicability.

    The provisions of 48 CFR part 30 and 48 CFR chapter 99 (FAR 
Appendix) shall be followed for management and operating contracts.



         Subpart 970.31_Contract Cost Principles and Procedures



970.3101-00-70  Scope of subpart.

    (a) The Procurement Executive is responsible for developing and 
revising the policy and procedures for the determination of allowable 
costs reimbursable under a management and operating contract, and for 
coordination with other Headquarters' offices having joint interests.
    (b) The Head of the Contracting Activity is responsible for 
following the policy, principles and standards set forth in this subpart 
in establishing the compensation and reimbursement

[[Page 455]]

provisions of contracts and subcontracts and for submission of 
deviations for Headquarters consideration and approval.



970.3101-9  Advance agreements (DOE coverage-paragraph (i)).

    (i) At any time, in accordance with the contract terms and 
conditions, the contracting officer may pursue an advance agreement in 
connection with any cost item under a contract.



970.3101-10  Cost certification.

    (a) Certain contracts require certification of the costs proposed 
for final payment purposes. Section 48 CFR 970.4207-03-02 states the 
administrative procedures for the certification provisions and the 
related contract clause prescription.
    (b) If unallowable costs are included in final cost settlement 
proposals, penalties may be assessed. Section 48 CFR 970.4207-03-02 
states the administrative procedures for penalty assessment provisions 
and the related clause prescription.



970.3102-3-70  Home office expenses.

    (a) For on-site work, DOE's fee for management and operating 
contracts, determined under the policy of and calculated per the 
procedures in 48 CFR 970.1504-1-3, generally provides adequate 
compensation for home or corporate office general and administrative 
expenses incurred in the general management of the contractor's business 
as a whole.
    (1) DOE recognizes that some Home Office Expenses are incurred for 
the benefit of a management and operating contract. DOE has elected to 
recognize that benefit through fee due to the difficulty of determining 
the dollar value applicable to any management and operating contract. 
The difficulty arises because:
    (i) The general construct of a management and operating contract 
results in minimal Home Office involvement in the contract work, and
    (ii) Conventional Home Office Expense allocation techniques that use 
bases such as total operating costs, labor dollars, hours etc., are not 
appropriate because they inherently assume significant contractor 
investment (in terms of its own resources, such as, labor, material, 
overhead, etc.). Contractor investments are minimal under DOE's 
operating and management contracts. The contracts are totally financed 
by DOE advance payments, and DOE provides government-owned facilities, 
property, and other needed resources.
    (2) From time to time, the fee for a management and operating 
contract may not be adequate compensation for Home Office Expenses 
incurred for the benefit of the contract. An indication that such a case 
exists is the need for significant home office support to deal with 
issues at the site that occur without the fault or negligence of the 
contractor, for example, the need for home office legal support to deal 
with third party, environmental, safety, or health issues.
    (3) In such a case, the contracting officer, after obtaining the 
HCA's approval, may consider a contractor request for additional 
compensation. The contractor may request:
    (i) Fee in addition to its normal fee (but see 48 CFR 970.1504-1-
3(b)(1) if the contract is for the management and operation of a 
laboratory); or
    (ii) Compensation on the basis of actual cost.
    (4) Because the contract's fee provides some compensation for Home 
Office Expenses, the contractor's request for additional compensation 
must always be for an amount less than the Home Office Expenses that are 
incurred for the benefit of the management and operating contract.
    (b) For off-site work, the DOE allows Home Office Expenses under 
architect-engineer, supply and research contracts with commercial 
contractors performing the work in their own facilities. Home Office 
Expenses may, however, be included for reimbursement under such DOE off-
site architect-engineer, supply and research contracts, only to the 
extent that they are determined, after careful examination, to be 
allowable, reasonable, and properly allocable to the work. Work 
performed in a contractor's own facilities under a management and 
operating or construction contract may likewise be allowed to bear the 
properly allocable

[[Page 456]]

portion of allowable Home Office Expenses.



970.3102-05  Application of cost principles.



970.3102-05-4  Bonding costs. (DOE coverage-paragraph (d))

    (d) The allowability of bonding costs shall be determined pursuant 
to 48 CFR 970.5228-1, Insurance-litigation and claims.



970.3102-05-6  Compensation for personal services. (DOE coverage-paragraphs 
(a) and (p))

    (a)(6) In determining the reasonableness of compensation, the 
compensation of each individual contractor employee normally need not be 
subjected to review and approval. Generally, the compensation paid 
individual employees should be left to the judgment of contractors 
subject to the limitations of DOE-approved compensation policies, 
programs, classification systems, and schedules, and amounts of money 
authorized for wage and salary increases for groups of employees. 
However, the contracting officer shall designate a compensation 
threshold appropriate for the particular situation. The contract shall 
specifically provide that contracting officer approval is required for 
compensating an individual contractor employee above the threshold if a 
total of 50 percent or more of such compensation is reimbursed under DOE 
cost-type contracts. For purposes of designating the threshold, total 
compensation includes only the employee's salary and cash bonus or 
incentive compensation.
    (7)(i) Reimbursable costs for compensation for personal services are 
to be set forth in a personnel appendix which is a part of the contract. 
This personnel appendix shall be negotiated using the principles and 
policies of 48 CFR 31.205-6, Compensation, as supplemented by this 
section, 970.3102-05-6, and other pertinent parts of the DEAR. Costs 
that are unallowable under other contract terms shall not be allowable 
as compensation for personnel services.
    (ii) The personnel appendix sets forth in detail personnel costs and 
related expenses allowable under the contract and documents personnel 
policies, practices and plans which have been found acceptable by the 
contracting officer. The contractor will advise DOE of any proposed 
changes in any matters covered by these policies, practices or plans 
which relate to personnel costs. The personnel appendix may be modified 
from time to time in writing by mutual agreement of the contractor and 
DOE without execution of an amendment to the contract. Such 
modifications shall be evidenced by execution of written numbered 
approval letters from the contracting officer or his representative. 
Types of personnel costs and related expenses addressed in the personnel 
appendix, or amendments thereto, are as follows: Salaries and wages; 
bonuses and incentive compensation; overtime, shift differential, 
holiday, and other premium pay for time worked; welfare benefits and 
retirement programs; paid time off, and salaries and wages to employees 
in their capacity as union stewards and committeemen for time spent in 
handling grievances, or serving on labor management (contractor) 
committees provided, however, that the contracting officer's approval is 
required in each instance of total compensation to an individual 
employee above an annual rate as specified in the personnel appendix.
    (p)(1) Notwithstanding the costs cited in this subsection, incurred 
for compensation of a senior executive in excess of the benchmark 
compensation amount determined applicable for the contractor fiscal year 
by the Administrator, Office of Federal Procurement Policy, are 
unallowable. Allowable costs of executive compensation shall be 
determined pursuant to Federal Acquisition Regulation 31.205-6(p).



970.3102-05-18  Independent research and development and bid and proposal 
costs. (DOE coverage-paragraphs (c)).

    (c) Independent Research and Development and Bid and Proposal costs 
are unallowable. However, contracting officer approved Laboratory 
Directed Research and Development costs and those costs incurred in 
support of the Department's various reimbursable programs are allowable.

[[Page 457]]



970.3102-05-19  Insurance and indemnification.

    The supplemental material on the costs of insurance and 
indemnification is found in 48 CFR 970.5228-1, Insurance-Litigation and 
Claims.



970.3102-05-22  Lobbying and political activity costs. (DOE 
coverage-paragraph(b)).

    (b) Costs of the following activities are excepted from 48 CFR 
31.205-22, Lobbying and political activity costs, coverage, provided 
that the resultant costs are reasonable and otherwise fall into the 
following exceptions:
    (1) Providing Members of Congress, their staff members or staff of 
cognizant legislative committees, in response to a request (written or 
oral, prior or contemporaneous) from Members of Congress, their staff 
members or staff of cognizant legislative committees, or as otherwise 
directed by the Contracting Officer, information or expert advice of a 
factual, technical, or scientific nature, with respect to topics 
directly related to the performance of the contract or proposed 
legislation. In providing this information or expert advice, the 
contractor shall indicate to the recipient that it is not presenting the 
views of DOE. Reasonable costs for transportation, lodging or meals 
incurred by contractor employees for the purpose of providing such 
information or expert advice shall also be reimbursable, provided the 
request for such information or expert advice is a prior written request 
signed by a Member of Congress.
    (2) Providing State legislatures or subdivisions thereof, their 
staff members, or staff of cognizant legislative committees, in response 
to a prior written request from a State legislator, or as otherwise 
directed by the Contracting Officer, information or expert advice of a 
factual, technical, or scientific nature, with respect to topics 
directly related to the performance of the contract or proposed 
legislation. In providing this information or expert advice, the 
contractor shall indicate to the recipient that it is not presenting the 
views of DOE. Reasonable costs for transportation, lodging, or meals 
incurred by contractor employees shall be reimbursable.



970.3102-05-28  Other business expenses. (DOE coverage-paragraph (i)).

    (i) Reasonable costs associated with the establishment and 
maintenance of financial institution accounts in connection with the 
work hereunder are allowable, including, but not limited to, service 
charges, the cost of disbursing cash, necessary guards, cashiers, and 
paymasters. If payments to employees are made by check, facilities and 
arrangements for cashing checks may be provided without expense to the 
employees, subject to the approval of the contracting officer.



970.3102-05-30  Patent costs and technology transfer costs.

    (a) For management and operating contracts that do not include the 
clause at 970.5227-3, Technology Transfer Mission, the cost principle at 
48 CFR 31.205-30 applies.
    (b) For management and operating contracts that do include the 
clause at 970.5227-3, Technology Transfer Mission, the following patent 
and technology transfer costs are allowable:
    (1) Costs of preparing invention disclosures, reports, and other 
patent related documents required by the contract;
    (2) Costs of searching the art relating to invention disclosures;
    (3) Costs incurred in connection with the filing and prosecution of 
patent applications for subject inventions, except where those costs are 
incurred as part of a privately funded technology transfer program 
recognized under the contract; and
    (4) Other costs incurred in accordance with the patent rights clause 
and the Technology Transfer Mission clause included in the contract.



970.3102-05-33  Professional and consultant service costs. (Department 
coverage-paragraph (g)).

    (g) Section 931.205-33 is applicable to management and operating 
contracts under this part.

[66 FR 4627, Jan. 18, 2001]



970.3102-05-46  Travel costs.

    (a) Costs for transportation, lodging, meals, and incidental 
expenses.

[[Page 458]]

    (1) Costs incurred by contractor personnel on official company 
business are allowable, subject to the limitations contained in this 
subsection. Costs for transportation may be based on mileage rates, 
actual costs incurred, or on a combination thereof, provided the method 
used results in a reasonable charge. Costs for lodging, meals, and 
incidental expenses may be based on per diem, actual expenses, or a 
combination thereof, provided the method used results in a reasonable 
charge.
    (2) Except as provided in paragraph (a)(3) of this subsection, costs 
incurred for lodging, meals, and incidental expenses (as defined in the 
regulations cited in paragraphs (a)(2)(i) through (iii) of this 
subsection) shall be considered to be reasonable and allowable only to 
the extent that they do not exceed on a daily basis the maximum per diem 
rates in effect at the time of travel as set forth in the--
    (i) Federal Travel Regulation, prescribed by the General Services 
Administration (41 CFR chapters 300 through 304), for travel in the 
conterminous 48 United States, available on a subscription basis from 
the Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, Stock No. 922-002-00000-2;
    (ii) Joint Travel Regulations, DoD Civilian Personnel, Appendix A, 
prescribed by the Department of Defense, for travel in Alaska, Hawaii, 
The Commonwealth of Puerto Rico, and territories and possessions of the 
United States, available on a subscription basis from the Superintendent 
of Documents, U.S. Government Printing Office, Washington, DC 20402, 
Stock No. 908-010-00000-1; or
    (iii) Standardized Regulations (Government Civilians, Foreign 
Areas), section 925, ``Maximum Travel Per Diem Allowances for Foreign 
Areas,'' prescribed by the Department of State, for travel in areas not 
covered in paragraphs (a)(2)(i) and (ii) of this subsection, available 
on a subscription basis from the Superintendent of Documents, U.S. 
Government Printing Office, Washington, DC 20402, Stock No. 744-008-
00000-0.
    (3) In special or unusual situations, actual costs in excess of the 
maximum per diem rates are allowable provided that such amounts do not 
exceed the higher amounts authorized for Federal civilian employees as 
permitted in the regulations referenced in paragraphs (a)(2)(i), (ii), 
or (iii) of this subsection. For such higher amounts to be allowable, 
all of the following conditions must be met:
    (i) One of the conditions warranting approval of the actual expense 
method, as set forth in the regulations referred to in paragraphs 
(a)(2)(i), (ii), or (iii) of this subsection, must exist.
    (ii) A written justification for use of the higher amounts must be 
approved by an officer of the contractor's organization or designee to 
ensure that the authority is properly administered and controlled to 
prevent abuse.
    (iii) If it becomes necessary to exercise the authority to use the 
higher actual expense method repetitively or on a continuing basis in a 
particular area, the contractor must obtain advance approval from the 
contracting officer.
    (iv) Documentation to support actual costs incurred shall be in 
accordance with the contractor's established practices, subject to 
paragraph (a)(7) of this subsection, and provided that a receipt is 
required for each expenditure of $75.00 or more. The approved 
justification required by paragraph (a)(3)(ii) and, if applicable, 
paragraph (a)(3)(iii) of this subsection must be retained.
    (4) Paragraphs (a)(2) and (a)(3) of this subsection do not 
incorporate the regulations cited in paragraphs (a)(2)(i), (ii), and 
(iii) of this subsection in their entirety. Only the maximum per diem 
rates, the definitions of lodging, meals, and incidental expenses, and 
the regulatory coverage dealing with special or unusual situations are 
incorporated in this subsection.
    (5) An advance agreement (see 48 CFR 31.109 and 48 CFR 970.3101-9) 
with respect to compliance with paragraphs (a)(2) and (a)(3) of this 
subsection may be useful and desirable.
    (6)(i) The maximum per diem rates referenced in paragraph (a)(2) of 
this subsection generally would not constitute a reasonable daily 
charge--
    (A) When no lodging costs are incurred; and/or
    (B) On partial travel days (e.g., day of departure and return).

[[Page 459]]

    (ii) Appropriate downward adjustments from the maximum per diem 
rates would normally be required under these circumstances. While these 
adjustments need not be calculated in accordance with the Federal Travel 
Regulation or Joint Travel Regulations, they must result in a reasonable 
charge.
    (7) Costs shall be allowable only if the following information is 
documented:
    (i) Date and place (city, town, or other similar designation) of the 
expenses;
    (ii) Purpose of the trip; and
    (iii) Name of person on trip and that person's title or relationship 
to the contractor.
    (b) Travel costs incurred in the normal course of overall 
administration of the business are allowable and shall be treated as 
indirect costs.
    (c) Travel costs directly attributable to specific contract 
performance are allowable and may be charged to the contract under 48 
CFR 31.202.
    (d) Airfare costs in excess of the lowest customary standard, coach, 
or equivalent airfare offered during normal business hours are 
unallowable except when such accommodations require circuitous routing, 
require travel during unreasonable hours, excessively prolong travel, 
result in increased cost that would offset transportation savings, are 
not reasonably adequate for the physical or medical needs of the 
traveler, or are not reasonably available to meet mission requirements. 
However, in order for airfare costs in excess of the standard airfare to 
be allowable, the applicable condition(s) must be documented and 
justified.
    (e)(1) ``Cost of travel by contractor-owned, -leased, or -chartered 
aircraft,'' as used in this paragraph, includes the cost of lease, 
charter, operation (including personnel), maintenance, depreciation, 
insurance, and other related costs.
    (2) The costs of travel by contractor-owned, -leased, or -chartered 
aircraft are limited to the standard airfare described in paragraph (d) 
of this subsection for the flight destination unless travel by such 
aircraft is specifically required by contract specification, term, or 
condition, or a higher amount is approved by the contracting officer. A 
higher amount may be agreed to when one or more of the circumstances for 
justifying higher than standard airfare listed in paragraph (d) of this 
subsection are applicable, or when an advance agreement under paragraph 
(e)(3) of this subsection has been executed. In all cases, travel by 
contractor-owned, -leased, or -chartered aircraft must be fully 
documented and justified. For each contractor-owned, -leased, or -
chartered aircraft used for any business purpose which is charged or 
allocated, directly or indirectly, to a Government contract, the 
contractor must maintain and make available manifest/logs for all 
flights on such company aircraft. As a minimum, the manifest/log shall 
indicate--
    (i) Date, time, and points of departure;
    (ii) Destination, date, and time of arrival;
    (iii) Name of each passenger and relationship to the contractor;
    (iv) Authorization for trip; and
    (v) Purpose of trip.
    (3) Where an advance agreement is proposed (see 31.109), 
consideration may be given to the following:
    (i) Whether scheduled commercial airlines or other suitable, less 
costly, travel facilities are available at reasonable times, with 
reasonable frequency, and serve the required destinations conveniently;
    (ii) Whether increased flexibility in scheduling results in time 
savings and more effective use of personnel that would outweigh 
additional travel costs.
    (f) Costs of contractor-owned or -leased automobiles, as used in 
this paragraph, include the costs of lease, operation (including 
personnel), maintenance, depreciation, insurance, etc. These costs are 
allowable, if reasonable, to the extent that the automobiles are used 
for company business. That portion of the cost of company-furnished 
automobiles that relates to personal use by employees (including 
transportation to and from work) is compensation for personal services 
and is unallowable as stated in 48 CFR 31.205-6(m)(2).

[[Page 460]]



970.3102-05-47  Costs related to legal and other proceedings. (DOE 
coverage-paragraph (h)).

    (h) Costs Associated with Whistleblower Actions.
    Section 931.205-47(h) of this chapter is applicable to management 
and operating contracts under this part and must be included in the 
contract's cost reimbursement subcontracts.



970.3102-05-70  Preexisting conditions.

    Clause 48 CFR 970.5231-4, Preexisting conditions, provides guidance 
on situations where this category of costs may be allowable.

[65 FR 81009, Dec. 22, 2000. Redesignated at 67 FR 14873, Mar. 28, 2002]



970.3170  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5231-
4, Preexisting Conditions, in all management and operating contracts.
    (a) The contracting officer shall include the clause with its 
Alternate I in contracts with incumbent management and operating 
contractors.
    (b) The contracting officer shall include the clause with its 
Alternate II in contracts with management and operating contractors not 
previously working at that particular site or facility.



                    Subpart 970.32_Contract Financing



970.3200  Policy.

    It is the policy of the DOE to finance management and operating 
contracts through advance payments and the use of special financial 
institution accounts.



970.3200-1  Reduction or suspension of advance, partial, or progress 
payments.

    (a) The procedures prescribed at 48 CFR 32.006 shall be followed 
regarding the reduction or suspension of payments under management and 
operating contracts.
    (b) Agency head responsibilities under 48 CFR 32.006 have been 
delegated to the Senior Procurement Executive.
    (c) The remedy coordination official is responsible for receiving, 
assessing, and making recommendations to the Senior Procurement 
Executive.



970.3200-1-1  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5232-
1, Reduction or suspension of contract payments, in management and 
operating contracts.



970.3204  Advance payments.



970.3204-1  Applicability.

    (a) The Head of the Contracting Activity shall authorize advance 
payments without interest, and approve the findings, determinations and 
the contract terms and conditions concerning advance payments in 
accordance with the procedures set forth in 48 CFR subpart 32.4, Advance 
Payments, as supplemented by 48 CFR subpart 932.4.
    (b) Advance payments shall be made under a payments cleared 
financing arrangement for deposit in a special financial institution 
account or, at the option of the Government, by direct payment or other 
payment mechanism to the contractor.
    (c) Prior to providing any advance payments, the contracting officer 
shall enter into an agreement with the contractor and a financial 
institution regarding a special financial institution account where the 
advanced funds will be deposited by the Government. Such agreement 
shall:
    (1) Provide that DOE shall retain title to the unexpended balance of 
funds in the special financial institution account including 
collections, if any, deposited by the contractor;
    (2) Provide that the title in paragraph (c)(1) of this subsection 
shall be superior to any claim or lien of the financial institution of 
deposit or others; and
    (3) Incorporate all applicable requirements, as determined by the 
Office of Chief Financial Officer.
    (d) Deviations from the requirements cited in paragraph (c) of this 
subsection shall be considered a deviation requiring approval of the 
Head of the Contracting Activity.

[[Page 461]]

    (e) Letter-of-credit arrangements shall be prepared in accordance 
with 48 CFR 32.406, Letters of Credit, and shall be coordinated between 
the procurement and finance organizations.



970.3270  Standard financial management clauses.

    (a) The following DEAR and FAR clauses are standard financial 
management clauses. The contracting officer shall insert them in all 
management and operating contracts:
    (1) 48 CFR 970.5232-2, Payments and Advances.
    (i) The contracting officer shall insert the basic clause with its 
Alternate I if a separate fixed-fee is provided for a separate item of 
work.
    (ii) The contracting officer shall insert the basic clause with its 
Alternate II when total available fee provisions in the basic clause are 
used.
    (iii) The contracting officer shall insert the basic clause with its 
Alternate III in management and operating contracts with integrated 
accounting systems.
    (iv) The contracting officer shall insert the basic clause with its 
Alternate IV in management and operating contracts without integrated 
accounting systems.
    (2) 48 CFR 970.5232-3, Accounts, records, and inspection.
    (i) If the contract includes the clause at 48 CFR 52.215-11, Price 
Reduction for Defective Cost or Pricing Data, the contracting officer 
shall use the clause with its Alternate I.
    (ii) If the contract is a cost-reimbursement contract involving an 
estimated cost exceeding $5 million and expected to run for more than 2 
years, or any other cost-reimbursement contract determined by the Head 
of the Contracting Activity in which the contractor has an established 
internal audit organization, the contracting officer shall insert the 
clause with its Alternate II.
    (3) 48 CFR 970.5232-4, Obligation of funds. The contracting officer 
may use the clause with its Alternate I in contracts which, expressly or 
otherwise, provide a contractual basis for equivalent controls in a 
separate clause.
    (4) 48 CFR 970.5203-1, Management controls.
    (5) 48 CFR 970.5232-5, Liability with respect to Cost Accounting 
Standards.
    (6) 48 CFR 970.5232-6, Work for others funding authorization.
    (7) 48 CFR 52.230-2, Cost Accounting Standards.
    (8) 48 CFR 52.230-6, Administration of Cost Accounting Standards.
    (b) The following DEAR clauses are standard financial management 
clauses. The contracting officer shall insert them in all management and 
operating contracts with integrated accounting systems:
    (1) 48 CFR 970.5232-7, Financial management system.
    (2) 48 CFR 970.5232-8, Integrated accounting.
    (c) Any deviations from the standard financial management clauses 
specified in paragraphs (a) and (b) of this section require the approval 
of the Head of the Contracting Activity and the written concurrence of 
the Department's Chief Financial Officer.



                 Subpart 970.34_Major System Acquisition



970.3400  General requirements.



970.3400-1  Mission-oriented solicitation.

    Contractors shall be required to promptly advise the DOE contracting 
officer of any advance notices of, or solicitations for, requirements 
which would logically involve DOE facilities or resources operated or 
managed by the contractor, which are received from another agency 
pursuant to 48 CFR 34.005. Management and operating contracts shall 
provide that the contractor shall not respond or otherwise propose to 
participate in response to the requirements of such solicitations unless 
the contractor has obtained the prior written approval of the DOE 
manager of the field activity having cognizance over the contract. Such 
approval shall not be given except in compliance with applicable DOE 
directives, and with the concurrence of the cognizant Senior Program 
Official.

[[Page 462]]



970.35  Research and development contracting.



           Subpart 970.35_Research and Development Contracting



970.3500  Scope of subpart.

    This subpart implements 48 CFR 35.017 regarding the establishment, 
use, review, and termination of Federally Funded Research and 
Development Centers (FFRDCs) sponsored by the Department of Energy.



970.3501  Federally funded research and development centers.



970.3501-1  Sponsoring agreements. (a) The contract award document 

constitutes the sponsoring agreement between the Department of 
Energy and the contractor operating an FFRDC.

    (b) The contract statement of work shall define the purpose and 
mission of the FFRDC.
    (c) Other elements of the sponsoring agreement which shall be 
incorporated into the contract include:
    (1) The appropriate termination clause of the contract (as 
prescribed in 48 CFR subpart 49.5).
    (2) The plan for the identification, use, and disposition of 
retained earnings developed pursuant to 48 CFR 970.1504-1-3(c)(6), if 
applicable;
    (3) The clause entitled ``Federally Funded Research and Development 
Center Sponsoring Agreement,'' which, in part, prescribes limitations on 
the FFRDC competing with the private sector, and requirements for the 
FFRDC's acceptance of work from a nonsponsor; and
    (4) Other terms and conditions considered necessary for the 
particular circumstances of the FFRDC (e.g., advance understandings on 
particular cost items).



970.3501-2  Using an FFRDC.

    The contractor may only accept work from a nonsponsor (as defined in 
48 CFR 35.017) in accordance with the requirements of DOE Order 481.1, 
Work for Others (Non-Department of Energy Funded Work).



970.3501-3  Reviewing FFRDC's.

    (a) All Department of Energy sponsored FFRDC's are operated by 
management and operating contractors.
    (b) Coincident with the review required by 48 CFR 17.605(b) and 48 
CFR 970.1702-1(b) regarding the decision to extend or compete a 
management and operating contract, the contracting officer shall, in 
accordance with internal Departmental procedures:
    (1) Conduct the review required by 48 CFR 35.017-4 concerning the 
use and need for the FFRDC; and
    (2) Recommend for Secretarial approval, the continuation or 
termination of the Department's sponsorship of an FFRDC at the time 
authorization is required to extend or compete a management and 
operating contract.



970.3501-4  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5235-
1, Federally Funded Research and Development Center Sponsoring 
Agreement, in all solicitations and contracts for the management and 
operation of an FFRDC sponsored by the Department of Energy.



      Subpart 970.36_Construction and Architect-Engineer Contracts



970.3605  Contract clauses.



970.3605-1  Other contracts.

    The clause in 48 CFR 52.236-8, Other Contracts, shall be used in all 
management and operating contracts.



970.3605-2  Special construction clause for operating contracts.

    The clause in 48 CFR 970.5236-1, Government Facility Subcontract 
Approval, shall be used in management and operating contracts when the 
contractor will not perform covered work with its own forces but may 
procure construction by subcontract.

[[Page 463]]



            Subpart 970.37_Facilities Management Contracting



970.3770  Facilities management.



970.3770-1  Policy.

    Contractors managing DOE facilities shall be required to comply with 
the DOE Directives applicable to facilities management.



970.3770-2  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5237-
2, Facilities Management, in all management and operating contracts.



             Subpart 970.41_Acquisition of Utility Services



970.4102  Acquiring utility services.



970.4102-1  Policy.

    (a) Utility services defined at 48 CFR 41.101 for the furnishing of 
electricity, gas (natural or manufactured), steam, water, and/or 
sewerage to facilities owned or leased by DOE shall be acquired directly 
by DOE and not by a contractor using a subcontractor arrangement, except 
as provided in paragraph (b) of this subsection.
    (b) Where it is determined to be in the best interest of the 
Government, a DOE contracting activity may authorize a management and 
operating contractor for a facility to acquire such utility service for 
the facility, after requesting and receiving concurrence to make such an 
authorization from the Director, Public Utilities Branch, Headquarters. 
Any request for such concurrence should be included in the Utility 
Service Requirements and Options Studies required by DOE directives in 
subseries 4540 (Public Services). Alternatively, it may be made in a 
separate document submitted to the Director of that office early in the 
acquisition cycle. Any request shall set forth why it is in the best 
interest of the DOE to acquire utility service(s) by subcontract, i.e., 
what the benefits are, such as economic advantage.
    (c) The requirements of 48 CFR part 41, this section, and DOE 
directives in subseries 4540 shall be applied to a subcontract level 
acquisition for furnishing utility services to a facility owned or 
leased by DOE.



                 Subpart 970.42_Contract Administration



970.4207-03-02  Certificate of costs.

    (a) The contracting officer shall require that management and 
operating contractors provide a submission, pursuant to 48 CFR 970.5232-
2-(j), for settlement of costs incurred during the period stipulated on 
the submission and a certification that the costs included in the 
submission are allowable. The contracting officer shall assess a penalty 
pursuant to 48 CFR 970.5242-1 if unallowable costs are included in the 
submission. Unallowable costs are either expressly unallowable or 
determined unallowable.
    (1) An expressly unallowable cost is a particular item or type of 
cost which, under the express provisions of an applicable law, 
regulation, or this contract, is specifically named and stated to be 
unallowable.
    (2) A cost determined unallowable is one which, for that contractor,
    (i) Was subject to a contracting officer's final decision and not 
appealed;
    (ii) The Department's Board of Contract Appeals or a court has 
previously ruled as unallowable; or
    (iii) was mutually agreed to be unallowable.
    (b) If, during the review of the submission, the contracting officer 
determines that the submission contains an expressly unallowable cost or 
a cost determined to be unallowable prior to the submission, the 
contracting officer shall assess a penalty.
    (c) If the contracting officer determines that a cost submitted by 
the contractor in its submission for settlement is:
    (1) Expressly unallowable, then the contracting officer shall assess 
a penalty in an amount equal to the disallowed cost allocated to the 
contract plus interest on the paid portion of the disallowed cost. 
Interest shall be computed from the date of overpayment to the date of 
repayment using the interest rate specified by the Secretary of the 
Treasury pursuant to Public Law 92-41 (85 Stat. 97).

[[Page 464]]

    (2) Determined unallowable, then the contracting officer shall 
assess a penalty in an amount equal to two times the amount of the 
disallowed cost allocated to the contract.
    (d) The contracting officer may waive the penalty provisions when:
    (1) The contractor withdraws the submission before the formal 
initiation of an audit of the submission and submits a revised 
submission;
    (2) The amount of the unallowable costs allocated to covered 
contracts is $10,000 or less; or
    (3) The contractor demonstrates to the contracting officer's 
satisfaction that:
    (i) It has established appropriate policies, personnel training, and 
an internal control and review system that provides assurances that 
unallowable costs subject to penalties are precluded from the 
contractor's submission for settlement of costs; and
    (ii) The unallowable costs subject to the penalty were inadvertently 
incorporated into the submission.
    (e) The Head of the Contracting Activity may waive the certification 
when--
    (1) It determines that it would be in the best interest of the 
United States to waive such certification; and
    (2) It states in writing the reasons for that determination and 
makes such determination available to the public.



970.4207-03-70  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5242-
1, Penalties for unallowable costs, in all management and operating 
solicitations and contracts.



970.4207-05-01  Contracting officer determination procedure. (DOE 
coverage-paragraph (b))

    (b)(4) A contracting officer shall not resolve any questioned costs 
until the contracting officer has obtained:
    (i) Adequate documentation with respect to such costs; and
    (ii) The opinion of the Department of Energy's auditor on the 
allowability of such costs.
    (5) The contracting officer shall ensure that the documentation 
supporting the final settlement addresses the amount of the questioned 
costs and the subsequent disposition of such questioned costs.
    (6) The contracting officer shall ensure, to the maximum extent 
practicable, that the Department of Energy's auditor is afforded an 
opportunity to attend any negotiation or meeting with the contractor 
regarding a determination of allowability.



                  Subpart 970.43_Contract Modifications



970.4302  Changes.



970.4302-1  Contract clause.

    The contracting officer shall insert the clause at 48 CFR 970.5243-
1, Changes, in all management and operating contracts.



      Subpart 970.44_Management and Operating Contractor Purchasing



970.4400  Scope.

    This subpart prescribes policies and procedures concerning the 
purchasing systems and activities of management and operating 
contractors.



970.4401  Responsibilities.



970.4401-1  General.

    (a) In the Department of Energy, overall responsibility for the 
oversight of the performance of management and operating contractors, 
including their purchasing activities, rests with the cognizant DOE 
contracting activity and, in particular, the Head of the Contracting 
Activity (HCA). Contracting officers are responsible for the management 
and operating contractors' conformance with this subpart and the 
applicable terms and conditions of their contracts, and for determining 
whether those purchasing activities provide timely and effective support 
to DOE programs.
    (b) In carrying out their overall responsibilities, HCAs shall:
    (1) Require management and operating contractors to maintain written 
descriptions of their individual purchasing systems and methods and 
further require that, upon award or extension of the contract, the 
entire written

[[Page 465]]

description be submitted to the contracting officer for review and 
acceptance;
    (2) Require that any changes to the management and operating 
contractor's written description having any substantive impact upon the 
contractor's purchasing system and methods be submitted to the 
contracting officer for review and acceptance prior to issuance;
    (3) Ensure the review of individual purchasing actions of certain 
types, or above stated dollar levels, by the contracting officer 
pursuant to 48 CFR subpart 44.2 or as set forth in the contractor's 
approved system and methods; and
    (4) Ensure that periodic appraisals of the contractor's management 
of all facets of the purchasing function, including compliance with the 
contractor's approved system and methods, are performed by the 
contracting officer. Such appraisals shall be performed through either 
of the following methodologies:
    (i) Contractor Purchasing System Reviews, conducted in accordance 
with 48 CFR subpart 44.3; or
    (ii) When approved by the contracting officer, contractor 
participation in the conduct of the Balanced Scorecard performance 
measurement and performance management system.
    (c) In performing the reviews required by paragraphs (b)(1) and (2), 
and the appraisals required by paragraph (b)(4) of this subsection, HCAs 
shall assure that contracting officers determine that the contractors' 
written systems and methods are consistent with this subpart and the 
applicable terms and conditions of their contracts.



970.4401-2  Review and approval.

    (a) The Heads of the Contracting Activities shall establish 
thresholds, by subcontract type and dollar level, for the review and 
approval of proposed subcontracting actions by each management and 
operating contractor under their cognizance. Such thresholds may not 
exceed the authority delegated to the Head of the Contracting Activity 
by the Senior Procurement Executive. In establishing these thresholds, 
the Heads of the Contracting Activities should consider such factors as 
the following:
    (1) The nature of work to be performed under the management and 
operating contract;
    (2) The size, experience, ability, reliability, and organization of 
the management and operating contractor's purchasing function;
    (3) The internal controls, procedures, and organizational stature of 
the management and operating contractor's purchasing function; and
    (4) Policies with respect to such reviews and approvals established 
by the Senior Procurement Executive.
    (b) Prior approval shall be required for the subcontracting of any 
work a contractor is obligated to perform under a contract entered into 
under section 41, entitled Production of Special Nuclear Material, of 
the Atomic Energy Act of 1954, as amended.
    (c) The Heads of the Contracting Activities shall take such action 
as may be required to insure compliance with the procedure for 
purchasing from contractor-affiliated sources or the purchase of 
specific items, or classes of items, which by the terms of the contract 
may require DOE approval.
    (d) The Heads of the Contracting Activities may raise or lower the 
review and approval thresholds established pursuant to paragraph (a) of 
this subsection at any time. Such action may be considered upon the 
periodic review of the contractor's purchasing system, but in any case 
those adjusted thresholds may not exceed the approval authority 
delegated to the Head of the Contracting Activity by the Senior 
Procurement Executive.
    (e) DOE approvals of specific proposed purchases pursuant to this 
subpart shall communicate that such approval does not relieve the 
management and operating contractor of any obligation under its prime 
contract with DOE; is given without prejudice to any rights or claims of 
the Government thereunder; creates no obligation on the part of the 
Government to the subcontractor, and is not a predetermination of the 
allowability of costs to be incurred under the subcontract.

[[Page 466]]

    (f) Contracting officers shall assure that management and operating 
contractors establish and maintain subcontract files which contain those 
documents essential to present an accurate and adequate record of all 
purchasing transactions.
    (g) Contracting officers shall assure that management and operating 
contractors document purchases in writing, setting forth the information 
and data used in determining that the purchases are in the best interest 
of the Government. The scope and detail of this documentation shall be 
consistent with the nature, dollar value, and complexity of the 
purchase.
    (h) The Heads of the Contracting Activities shall assure that the 
contracting activity establishes and maintains files of the documents 
associated with the review and approval of subcontract actions subject 
to DOE review and approval. Those files shall include, among other 
necessary documentation, an appraisal of the proposed action by the 
contracting activity and a copy of the approving or disapproving 
document forwarded to the management and operating contractor, including 
a listing of any deficiencies, a listing of any required corrective 
actions, any suggestions, or other relevant comments.



970.4401-3  Advance notification.

    (a) Contracting officers shall assure that the written description 
of the management and operating contractor's purchasing system and 
methods provides for advance notice to the DOE contracting officer of 
the proposed award of the following specified types of subcontracts, 
except as stated in paragraph (b) of this subsection:
    (1) Pursuant to section 304(b) of the Federal Property and 
Administrative Service Act of 1949, as amended (41 U.S.C. 254(b)):
    (i) Cost reimbursement-type subcontracts of any award value; and
    (ii) Fixed price-type subcontracts which exceed the simplified 
acquisition threshold, or 5 percent of the total estimated cost of the 
prime contract.
    (2) Purchases from contractor-affiliated sources over a value 
established by the HCA.
    (b) Pursuant to section 602(d)13 of the Act (40 U.S.C. 474(13)) 
referred to in paragraph (a) of this section, the advance notification 
requirement for the types of purchases listed in paragraphs (a) (1) and 
(2) of this subsection shall not apply to subcontracts relating to 
functions derived from the Atomic Energy Commission.
    (c) The advance notice shall contain, at a minimum, a description of 
work, estimated cost, type of contract or reimbursement provisions, and 
extent of competition, or justification for a noncompetitive purchase 
procurement. The contracting officer may at any time request additional 
information that must be furnished promptly and prior to award of the 
subcontract.



970.4402  Contractor purchasing system.



970.4402-1  Policy.

    (a) DOE contracts for the management and operation of its 
facilities, the design and production of nuclear weapons, energy 
research and development, and the performance of other services. These 
management and operating (M&O) contractors have been selected for their 
technical and managerial expertise and are expected to bring to bear 
these technical and managerial skills to accomplish the significant 
Federal mission(s) described in their contracts with, and work plans 
approved by, DOE.
    (b) Purchasing done by management and operating contractors is one 
area in which the particular skills of the contractors will be brought 
to bear in order to more readily accomplish the contractors' assigned 
missions. The contracting procedures of the contractor's organization, 
therefore, form the basis for the development of a purchasing system and 
methods that will comply with its contract with DOE and this subpart.



970.4402-2  General requirements.

    The following shall apply to the purchasing systems of management 
and operating contractors:
    (a) The objective of a management and operating contractor's 
purchasing system is to deliver to its customers on

[[Page 467]]

a timely basis those best value products and services necessary to 
accomplish the purposes of the Government's contract. To achieve this 
objective, contractors are expected to use their experience, expertise 
and initiative consistent with this subpart.
    (b) The purchasing systems and methods used by management and 
operating contractors shall be well-defined, consistently applied, and 
shall follow purchasing practices appropriate for the requirement and 
dollar value of the purchase. It is anticipated that purchasing 
practices and procedures will vary among contractors and according to 
the type and kinds of purchases to be made.
    (c) Contractor purchases are not Federal procurements, and are not 
directly subject to the Federal Acquisition Regulations in 48 CFR. 
Nonetheless, certain Federal laws, Executive Orders, and regulations may 
affect contractor purchasing, as required by statute, regulation, or 
contract terms and conditions.
    (d) Contractor purchasing systems shall identify and apply the best 
in commercial purchasing practices and procedures (although nothing 
precludes the adoption of Federal procurement practices and procedures) 
to achieve system objectives. Where specific requirements do not 
otherwise apply, the contractor purchasing system shall provide for 
appropriate measures to ensure the:
    (1) Acquisition of quality products and services at fair and 
reasonable prices;
    (2) Use of capable and reliable subcontractors who either:
    (i) Have track records of successful past performance, or
    (ii) Can demonstrate a current superior ability to perform;
    (3) Minimization of acquisition lead-time and administrative costs 
of purchasing;
    (4) Use of effective competitive techniques;
    (5) Reduction of performance risks associated with subcontractors, 
and facilitation of quality relationships which can include techniques 
such as partnering agreements, ombudsmen, and alternative disputes 
procedures;
    (6) Use of self-assessment and benchmarking techniques to support 
continuous improvement in purchasing;
    (7) Maintenance of the highest professional and ethical standards;
    (8) Maintenance of file documentation appropriate to the value of 
the purchase and which is adequate to establish the propriety of the 
transaction and the price paid; and
    (9) Maximization of opportunities for small business, HUBZone small 
business, small disadvantaged business, and woman-owned small business 
concerns to participate in contract performance.



970.4402-3  Purchasing from contractor-affiliated sources.

    (a) A management and operating contractor may purchase from sources 
affiliated with the contractor (any division, subsidiary, or affiliate 
of the contractor or its parent company) in the same manner as from 
other sources, provided:
    (1) The management and operating contractor's purchasing function is 
independent of the proposed contractor-affiliated source;
    (2) The same terms and conditions would apply if the purchase were 
from a third party;
    (3) Award is made in accordance with policies and procedures 
designed to permit effective competition which have been approved by the 
contracting officer. (This requirement for competition shall not 
preclude acquisition of technical services from contractor-affiliated 
entities where those entities have a special expertise, and the basis 
therefor is documented.); and
    (4) The award is legally enforceable where the entities are 
separately incorporated.
    (b) Subcontracts for performance of contract work itself (as 
distinguished from the purchase of supplies and services needed in 
connection with the performance of work) require DOE authorization and 
may involve an adjustment of the contractor's fee, if any. If the 
management and operating contractor seeks authorization to have some 
part of the contract work performed by a contractor-affiliated source, 
and that contractor's performance of that work

[[Page 468]]

was a factor in the negotiated fee, DOE approval would normally require:
    (1) That the contractor-affiliated source perform such work without 
fee or profit, or
    (2) An equitable downward adjustment to the management and operating 
contractor's fee, if any.
    (c) Determination on cost of money allowance as prescribed at 48 CFR 
31.225-10 shall be treated as follows:
    (1) When a purchase from a contractor-affiliated source results from 
competition and is in accord with provisions and conditions of 
paragraphs (a)(1) through (a)(4) of this subsection, the contractor-
affiliated source may include cost of money as an allowable element of 
the costs of its goods or services supplied to the contractor; provided:
    (i) The purchase is based on cost as set forth in 48 CFR 970.3102-3-
21 and
    (ii) The cost of money amount is computed in accordance with 48 CFR 
31.205-10 and related procedures (see 48 CFR 970.30).
    (2) When a purchase from a contractor-affiliated source is made non-
competitively, cost of money shall not be considered an allowable 
element of the cost of the contractor-affiliated source purchase.



970.4402-4  Nuclear material transfers.

    (a) Management and operating contractors, in preparing subcontracts 
or other agreements in which monetary payments or credits depend on the 
quantity and quality of nuclear material, shall be required to assure 
that each such subcontract or agreement contains a:
    (1) Description of the material to be transferred;
    (2) Provision specifying the method by which the quantities are to 
be measured and reported;
    (3) Provision specifying the procedures to be used in resolving any 
differences arising as a result of such measurements;
    (4) Provision for the use of an independent third party as an umpire 
to settle unresolved differences in the analytical samples; and
    (5) Provision specifying in detail which party shall bear the costs 
of resolving a difference and what constitutes such costs.
    (b) The provisions providing for resolution of measurement 
differences must be such that resolution is always accomplished, while 
at the same time minimizing any advantage one party may have over the 
other.



970.4403  Contract clause.

    The contracting officer shall insert the clause at 970.5244-1, 
Contractor Purchasing System, in all management and operating contracts.



                   Subpart 970.45_Government Property



970.4501  General.



970.4501-1  Contract clause.

    (a) The contracting officer shall insert the clause at 970.5245-1, 
Property, in management and operating contracts. Paragraph (f)(1)(i)(c) 
of the clause applies to a non-profit contractor only to the extent 
specifically provided in the individual contract. Specific managerial 
personnel may be listed in paragraph (j), provided their listing is 
consistent with the clause and the DEAR.
    (b) The contracting officer shall insert the basic clause with its 
Alternate I in contracts with nonprofit contractors.



                 Subpart 970.49_Termination of Contracts



970.4905  Contract termination clause.



970.4905-1  Termination for convenience of the government and default.

    (a) The contracting officer shall include the clause at 48 CFR 
52.249-6, Termination (Cost Reimbursement), as modified pursuant to 
paragraph (b) of this subsection, in all cost-reimbursement management 
and operating contracts, regardless of whether the contract is for 
production, or research and development with an educational or nonprofit 
institution.
    (b) The contracting officer shall modify paragraph (i) of the clause 
to insert ``as supplemented in subpart 970.31 of the Department of 
Energy Acquisition

[[Page 469]]

Regulation,'' after the phrase, ``part 31 of the Federal Acquisition 
Regulation.''



            Subpart 970.50_Extraordinary Contractual Actions



970.5004  Residual powers.



970.5004-1  Contract clause.

    When use of the clause at 48 CFR 52.250-1, Indemnification Under 
Public Law 85-804, is appropriate, the contracting officer may 
substitute the words ``Obligation of funds'' for the words ``Limitation 
of Cost or Limitation of Funds.''



970.5070  Indemnification.



970.5070-1  Scope and applicability.

    (a) Section 170d. of the Atomic Energy Act of 1954, as amended, 
requires DOE to enter into agreements of indemnity with contractors 
whose work involves the risk of public liability for the occurrence of a 
nuclear incident or precautionary evacuation.
    (b) Details of such indemnification are discussed at 48 CFR 950.70.



970.5070-2  General.

    DOE contractors with whom statutory nuclear hazards indemnity 
agreements under the authority of section 170d. of the Atomic Energy Act 
of 1954, as amended, are executed will not normally be required or 
permitted to furnish financial protection by purchase of insurance to 
cover public liability for nuclear incidents. However, if authorized by 
the DOE Headquarters office having responsibility for contractor 
casualty insurance programs, DOE contractors may be
    (a) Permitted to furnish financial protection to themselves, or
    (b) Permitted to continue to carry such insurance at cost to the 
Government if they currently maintain insurance for such liability.



970.5070-3  Contract clauses.

    (a) The clause at 48 CFR 952.250-70, Nuclear Hazards Indemnity 
Agreement, shall be included in all management and operating contracts 
involving the risk of public liability for the occurrence of a nuclear 
incident or precautionary evacuation arising out of or in connection 
with the contract work, including such events caused by a product 
delivered to a DOE-owned, facility for use by DOE or its contractors. 
The clause at 48 CFR 952.250-70 also shall be included in any management 
and operating contract for the design of a DOE facility, the 
construction or operation of which may involve the risk of public 
liability for a nuclear incident or a precautionary evacuation.
    (b) The clause at 48 CFR 952.250-70 shall not be included in 
contracts in which the contractor is subject to Nuclear Regulatory 
Commission (NRC) financial protection requirements under section 170b. 
of the Act or NRC agreements of indemnification under section 170 c. or 
k. of the Act for activities to be performed under the contract.



    Subpart 970.52_Solicitation Provisions and Contract Clauses for 
                   Management and Operating Contracts



970.5200  Scope of subpart.

    This subpart prescribes some of the solicitation provisions and 
contract clauses for use in management and operating contracts. The 
provisions and clauses contained in this subpart supplement the 
provisions and clauses prescribed in the FAR and in other parts of the 
DEAR (48 CFR 901 through 48 CFR 952), and, pursuant to the individual 
provision or clause prescription, are to be used in addition to or in 
place of such clauses. Management and operating contracts are hybrid 
contracts, in some cases including aspects of several FAR contract 
types, for example, supplies and construction. For some FAR solicitation 
provisions and contract clauses, this subpart prescribes their use 
despite the hybrid nature of the work required. To assist Departmental 
contracting personnel in determining the applicability of FAR and DEAR 
clauses to management and operating contracts, additional guidance is 
published and made available by the Office of Procurement and Assistance 
Policy, within the Headquarters procurement organization.

[[Page 470]]



970.5201  Text of provisions and clauses.



970.5203-1  Management controls.

    As prescribed in 48 CFR 970.0370-2(a) and 48 CFR 970.3270(a)(4), 
insert the following clause:

                     Management Controls (DEC 2000)

    (a)(1) The contractor shall be responsible for maintaining, as an 
integral part of its organization, effective systems of management 
controls for both administrative and programmatic functions. Management 
controls comprise the plan of organization, methods, and procedures 
adopted by management to reasonably ensure that: the mission and 
functions assigned to the contractor are properly executed; efficient 
and effective operations are promoted; resources are safeguarded against 
waste, loss, mismanagement, unauthorized use, or misappropriation; all 
encumbrances and costs that are incurred under the contract and fees 
that are earned are in compliance with applicable clauses and other 
current terms, conditions, and intended purposes; all collections 
accruing to the contractor in connection with the work under this 
contract, expenditures, and all other transactions and assets are 
properly recorded, managed, and reported; and financial, statistical, 
and other reports necessary to maintain accountability and managerial 
control are accurate, reliable, and timely.
    (2) The systems of controls employed by the contractor shall be 
documented and satisfactory to DOE.
    (3) Such systems shall be an integral part of the contractor's 
management functions, including defining specific roles and 
responsibilities for each level of management, and holding employees 
accountable for the adequacy of the management systems and controls in 
their areas of assigned responsibility.
    (4) The contractor shall, as part of the internal audit program 
required elsewhere in this contract, periodically review the management 
systems and controls employed in programs and administrative areas to 
ensure that they are adequate to provide reasonable assurance that the 
objectives of the systems are being accomplished and that these systems 
and controls are working effectively.
    (b) The contractor shall be responsible for maintaining, as a part 
of its operational responsibilities, a baseline quality assurance 
program that implements documented performance, quality standards, and 
control and assessment techniques.

                             (End of clause)



970.5203-2  Performance improvement and collaboration.

    As prescribed in 48 CFR 970.0370-2(b), insert the following clause:

          Performance Improvement and Collaboration (DEC 2000)

    (a) The contractor agrees that it shall affirmatively identify, 
evaluate, and institute practices, where appropriate, that will improve 
performance in the areas of environmental and health, safety, scientific 
and technical, security, business and administrative, and any other 
areas of performance in the management and operation of the contract. 
This may entail the alteration of existing practices or the institution 
of new procedures to more effectively or efficiently perform any aspect 
of contract performance or reduce overall cost of operation under the 
contract. Such improvements may result from changes in organization, 
simplification of systems while retaining necessary controls, or any 
other approaches consistent with the statement of work and performance 
measures of this contract.
    (b) The contractor agrees to work collaboratively with the 
Department, all other management and operating, DOE major facilities 
management contractors and affiliated contractors which manage or 
operate DOE sites or facilities for the following purposes: (i) to 
exchange information generally, (ii) to evaluate concepts that may be of 
benefit in resolving common issues, in confronting common problems, or 
in reducing costs of operations, and (iii) to otherwise identify and 
implement DOE-complex-wide management improvements discussed in 
paragraph (a). In doing so, it shall also affirmatively provide 
information relating to its management improvements to such contractors, 
including lessons learned, subject to security considerations and the 
protection of data proprietary to third parties.
    (c) The contractor may consult with the contracting officer in those 
instances in which improvements being considered pursuant to paragraph 
(a) involve the cooperation of the DOE. The contractor may request the 
assistance of the contracting officer in the communication of the 
success of improvements to other management and operating contractors in 
accordance with paragraph (b) of this clause.
    (d) The contractor shall notify the contracting officer and seek 
approval where necessary to fulfill its obligations under the contract. 
Compliance with this clause in no way alters the obligations of the 
Contractor under any other provision of this contract.

[[Page 471]]

                             (End of clause)



970.5203-3  Contractor's organization.

    As prescribed in 48 CFR 970.0371-9, insert the following clause:

                  Contractor's Organization (DEC 2000)

    (a) Organization chart. As promptly as possible after the execution 
of this contract, the contractor shall furnish to the contracting 
officer a chart showing the names, duties, and organization of key 
personnel (see 48 CFR 952.215-70) to be employed in connection with the 
work, and shall furnish supplemental information to reflect any changes 
as they occur.
    (b) Supervisory representative of contractor. Unless otherwise 
directed by the contracting officer, a competent full-time resident 
supervisory representative of the contractor satisfactory to the 
contracting officer shall be in charge of the work at the site, and any 
work off-site, at all times.
    (c) Control of employees. The contractor shall be responsible for 
maintaining satisfactory standards of employee competency, conduct, and 
integrity and shall be responsible for taking such disciplinary action 
with respect to its employees as may be necessary. In the event the 
contractor fails to remove any employee from the contract work whom DOE 
deems incompetent, careless, or insubordinate, or whose continued 
employment on the work is deemed by DOE to be inimical to the 
Department's mission, the contracting officer may require, with the 
approval of the Secretary of Energy, the contractor to remove the 
employee from work under the contract. This includes the right to direct 
the contractor to remove its most senior key person from work under the 
contract for serious contract performance deficiencies.
    (d) Standards and procedures. The contractor shall establish such 
standards and procedures as are necessary to implement the requirements 
set forth in 48 CFR 970.0371. Such standards and procedures shall be 
subject to the approval of the contracting officer.

                             (End of clause)



970.5204-1  Counterintelligence.

    (a) As prescribed in 48 CFR 970.0404-4(a), insert the following 
clause in contracts containing the clauses at 48 CFR 952.204-2, 
Security, and 48 CFR 952.204-70, Classification/Declassification:

                     Counterintelligence (DEC 2000)

    (a) The contractor shall take all reasonable precautions in the work 
under this contract to protect DOE programs, facilities, technology, 
personnel, unclassified sensitive information and classified matter from 
foreign intelligence threats and activities conducted for governmental 
or industrial purposes, in accordance with DOE Order 5670.3, 
Counterintelligence Program; Executive Order 12333, U.S. Intelligence 
Activities; and other pertinent national and Departmental 
Counterintelligence requirements.
    (b) The contractor shall appoint a qualified employee(s) to function 
as the Contractor Counterintelligence Officer. The Contractor 
Counterintelligence Officer will be responsible for conducting defensive 
Counterintelligence briefings and debriefings of employees traveling to 
foreign countries or interacting with foreign nationals; providing 
thoroughly documented written reports relative to targeting, suspicious 
activity and other matters of Counterintelligence interest; immediately 
reporting targeting, suspicious activity and other Counterintelligence 
concerns to the DOE Headquarters Counterintelligence Division; and 
providing assistance to other elements of the U.S. Intelligence 
Community as stated in the aforementioned Executive Order, the DOE 
Counterintelligence Order, and other pertinent national and Departmental 
Counterintelligence requirements.

                             (End of clause)



970.5204-2  Laws, regulations, and DOE directives.

    As prescribed in 48 CFR 970.0470-2, insert the following clause:

            Laws, Regulations, and DOE Directives (DEC 2000)

    (a) In performing work under this contract, the contractor shall 
comply with the requirements of applicable Federal, State, and local 
laws and regulations (including DOE regulations), unless relief has been 
granted in writing by the appropriate regulatory agency. A List of 
Applicable Laws and regulations (List A) may be appended to this 
contract for information purposes. Omission of any applicable law or 
regulation from List A does not affect the obligation of the contractor 
to comply with such law or regulation pursuant to this paragraph.
    (b) In performing work under this contract, the contractor shall 
comply with the requirements of those Department of Energy directives, 
or parts thereof, identified in the List of Applicable Directives (List 
B) appended to this contract. Except as otherwise provided for in 
paragraph (d) of this clause, the contracting officer may, from time to 
time and at any time, revise List B by unilateral modification to the 
contract to add, modify, or delete specific requirements. Prior to 
revising List B, the contracting officer shall notify the contractor in 
writing of the Department's intent to revise List B and provide the 
contractor with the opportunity

[[Page 472]]

to assess the effect of the contractor's compliance with the revised 
list on contract cost and funding, technical performance, and schedule; 
and identify any potential inconsistencies between the revised list and 
the other terms and conditions of the contract. Within 30 days after 
receipt of the contracting officer's notice, the contractor shall advise 
the contracting officer in writing of the potential impact of the 
contractor's compliance with the revised list. Based on the information 
provided by the contractor and any other information available, the 
contracting officer shall decide whether to revise List B and so advise 
the contractor not later than 30 days prior to the effective date of the 
revision of List B. The contractor and the contracting officer shall 
identify and, if appropriate, agree to any changes to other contract 
terms and conditions, including cost and schedule, associated with the 
revision of List B pursuant to the clause of this contract entitled, 
``Changes.''
    (c) Environmental, safety, and health (ES&H) requirements 
appropriate for work conducted under this contract may be determined by 
a DOE approved process to evaluate the work and the associated hazards 
and identify an appropriately tailored set of standards, practices, and 
controls, such as a tailoring process included in a DOE approved Safety 
Management System implemented under the clause entitled ``Integration of 
Environment, Safety, and Health into Work Planning and Execution.'' When 
such a process is used, the set of tailored (ES&H) requirements, as 
approved by DOE pursuant to the process, shall be incorporated into List 
B as contract requirements with full force and effect. These 
requirements shall supersede, in whole or in part, the contractual 
environmental, safety, and health requirements previously made 
applicable to the contract by List B. If the tailored set of 
requirements identifies an alternative requirement varying from an ES&H 
requirement of an applicable law or regulation, the contractor shall 
request an exemption or other appropriate regulatory relief specified in 
the regulation.
    (d) Except as otherwise directed by the contracting officer, the 
contractor shall procure all necessary permits or licenses required for 
the performance of work under this contract.
    (e) Regardless of the performer of the work, the contractor is 
responsible for compliance with the requirements of this clause. The 
contractor is responsible for flowing down the requirements of this 
clause to subcontracts at any tier to the extent necessary to ensure the 
contractor's compliance with the requirements.

                             (End of clause)



970.5204-3  Access to and ownership of records.

    As prescribed in 48 CFR 970.0407-1-3, insert the following clause:

              Access to and Ownership of Records (DEC 2000)

    (a) Government-owned records. Except as provided in paragraph (b) of 
this clause, all records acquired or generated by the contractor in its 
performance of this contract shall be the property of the Government and 
shall be delivered to the Government or otherwise disposed of by the 
contractor either as the contracting officer may from time to time 
direct during the progress of the work or, in any event, as the 
contracting officer shall direct upon completion or termination of the 
contract.
    (b) Contractor-owned records. The following records are considered 
the property of the contractor and are not within the scope of paragraph 
(a) of this clause. [The contracting officer shall identify which of the 
following categories of records will be included in the clause.]
    (1) Employment-related records (such as workers' compensation files; 
employee relations records, records on salary and employee benefits; 
drug testing records, labor negotiation records; records on ethics, 
employee concerns, and other employee related investigations conducted 
under an expectation of confidentiality; employee assistance program 
records; and personnel and medical/ health-related records and similar 
files), and non-employee patient medical/health related records, except 
for those records described by the contract as being maintained in 
Privacy Act systems of records.
    (2) Confidential contractor financial information, and 
correspondence between the contractor and other segments of the 
contractor located away from the DOE facility (i.e., the contractor's 
corporate headquarters);
    (3) Records relating to any procurement action by the contractor, 
except for records that under 48 CFR 970.5232-3, Accounts, Records, and 
Inspection, are described as the property of the Government; and
    (4) Legal records, including legal opinions, litigation files, and 
documents covered by the attorney-client and attorney work product 
privileges; and
    (5) The following categories of records maintained pursuant to the 
technology transfer clause of this contract:
    (i) Executed license agreements, including exhibits or appendices 
containing information on royalties, royalty rates, other financial 
information, or commercialization plans, and all related documents, 
notes and correspondence.

[[Page 473]]

    (ii) The contractor's protected Cooperative Research and Development 
Agreement (CRADA) information and appendices to a CRADA that contain 
licensing terms and conditions, or royalty or royalty rate information.
    (iii) Patent, copyright, mask work, and trademark application files 
and related contractor invention disclosures, documents and 
correspondence, where the contractor has elected rights or has 
permission to assert rights and has not relinquished such rights or 
turned such rights over to the Government.
    (c) Contract completion or termination. In the event of completion 
or termination of this contract, copies of any of the contractor-owned 
records identified in paragraph (b) of this clause, upon the request of 
the Government, shall be delivered to DOE or its designees, including 
successor contractors. Upon delivery, title to such records shall vest 
in DOE or its designees, and such records shall be protected in 
accordance with applicable federal laws (including the Privacy Act), as 
appropriate.
    (d) Inspection, copying, and audit of records. All records acquired 
or generated by the contractor under this contract in the possession of 
the contractor, including those described at paragraph (b) of this 
clause, shall be subject to inspection, copying, and audit by the 
Government or its designees at all reasonable times, and the contractor 
shall afford the Government or its designees reasonable facilities for 
such inspection, copying, and audit; provided, however, that upon 
request by the contracting officer, the contractor shall deliver such 
records to a location specified by the contracting officer for 
inspection, copying, and audit. The Government or its designees shall 
use such records in accordance with applicable federal laws (including 
the Privacy Act), as appropriate.
    (e) Applicability. Paragraphs (b), (c), and (d) of this clause apply 
to all records without regard to the date or origination of such 
records.
    (f) Records retention standards. Special records retention 
standards, described at DOE Order 200.1, Information Management Program 
(version in effect on effective date of contract), are applicable for 
the classes of records described therein, whether or not the records are 
owned by the Government or the contractor. In addition, the contractor 
shall retain individual radiation exposure records generated in the 
performance of work under this contract until DOE authorizes disposal. 
The Government may waive application of these record retention 
schedules, if, upon termination or completion of the contract, the 
Government exercises its right under paragraph (c) of this clause to 
obtain copies and delivery of records described in paragraphs (a) and 
(b) of this clause.
    (g) Subcontracts. The contractor shall include the requirements of 
this clause in all subcontracts that are of a cost-reimbursement type if 
any of the following factors is present:
    (1) The value of the subcontract is greater than $2 million (unless 
specifically waived by the contracting officer);
    (2) The contracting officer determines that the subcontract is, or 
involves, a critical task related to the contract; or
    (3) The subcontract includes 48 CFR 970.5223-1, Integration of 
Environment, Safety, and Health into Work Planning and Execution, or 
similar clause.

                             (End of clause)



970.5208-1  Printing.

    As prescribed in 48 CFR 970.0808-3, insert the following clause:

                           Printing (DEC 2000)

    (a) To the extent that duplicating or printing services may be 
required in the performance of this contract, the Contractor shall 
provide or secure such services in accordance with the Government 
Printing and Binding Regulations, Title 44 of the U.S. Code, and DOE 
Directives relative thereto.
    (b) The term ``Printing'' includes the following processes: 
Composition, platemaking, presswork, binding, microform publishing, or 
the end items produced by such processes. Provided, however, that 
performance of a requirement under this contract involving the 
duplication of less than 5,000 copies of a single page, or no more than 
25,000 units in the aggregate of multiple pages, will not be deemed to 
be printing.
    (c) Printing services not obtained in compliance with this guidance 
shall result in the cost of such printing being disallowed.
    (d) The Contractor shall include the substance of this clause in all 
subcontracts hereunder which require printing (as that term is defined 
in Title I of the U.S. Government Printing and Binding Regulations).

                             (End of clause)



970.5209-1  Requirement for guarantee of performance.

    As prescribed in 48 CFR 970.0970-2, the contracting officer shall 
insert the following provision in solicitations for management and 
operating contracts:

           Requirement for Guarantee of Performance (DEC 2000)

    The successful offeror is required by other provisions of this 
solicitation to organize a dedicated corporate entity to carry out the 
work under the contract to be awarded as a

[[Page 474]]

result of this solicitation. The successful offeror will be required, as 
part of the determination of responsibility of the newly organized, 
dedicated corporate entity and as a condition of the award of the 
contract to that entity, to furnish a guarantee of that entity's 
performance. That guarantee of performance must be satisfactory in all 
respects to the Department of Energy.

                             (End of clause)



970.5215-1  Total available fee: Base fee amount and performance fee amount.

    As prescribed in 48 CFR 970.1504-5(a), insert the following clause. 
The clause should be tailored to reflect the contract's actual inclusion 
of base fee amount and performance fee amount.

  Total Available Fee: Base Fee Amount and Performance Fee Amount (DEC 
                                  2000)

    (a) Total available fee. Total available fee, consisting of a base 
fee amount ( which may be zero) and a performance fee amount (consisting 
of an incentive fee component for objective performance requirements, an 
award fee component for subjective performance requirements, or both) 
determined in accordance with the provisions of this clause, is 
available for payment in accordance with the clause of this contract 
entitled, ``Payments and advances.''
    (b) Fee Negotiations. Prior to the beginning of each fiscal year 
under this contract, or other appropriate period as mutually agreed upon 
and, if exceeding one year, approved by the Senior Procurement 
Executive, or designee, the contracting officer and Contractor shall 
enter into negotiation of the requirements for the year or appropriate 
period, including the evaluation areas and individual requirements 
subject to incentives, the total available fee, and the allocation of 
fee. The contracting officer shall modify this contract at the 
conclusion of each negotiation to reflect the negotiated requirements, 
evaluation areas and individual requirements subject to incentives, the 
total available fee, and the allocation of fee. In the event the parties 
fail to agree on the requirements, the evaluation areas and individual 
requirements subject to incentives, the total available fee, or the 
allocation of fee, a unilateral determination will be made by the 
contracting officer. The total available fee amount shall be allocated 
to a twelve month cycle composed of one or more evaluation periods, or 
such longer period as may be mutually agreed to between the parties and 
approved by the Senior Procurement Executive, or designee.
    (c) Determination of Total Available Fee Amount Earned. (1) The 
Government shall, at the conclusion of each specified evaluation period, 
evaluate the contractor's performance of all requirements, including 
performance based incentives completed during the period, and determine 
the total available fee amount earned. At the contracting officer's 
discretion, evaluation of incentivized performance may occur at the 
scheduled completion of specific incentivized requirements.
    (2) The DOE Operations/Field Office Manager, or designee, will be 
(insert title of DOE Operations/Field Office Manager, or designee). The 
contractor agrees that the determination as to the total available fee 
earned is a unilateral determination made by the DOE Operations/Field 
Office Manager, or designee.
    (3) The evaluation of contractor performance shall be in accordance 
with the Performance Evaluation and Measurement Plan(s) described in 
subparagraph (d) of this clause unless otherwise set forth in the 
contract. The Contractor shall be promptly advised in writing of the fee 
determination, and the basis of the fee determination. In the event that 
the contractor's performance is considered to be less than the level of 
performance set forth in the Statement of Work, as amended to include 
the current Work Authorization Directive or similar document, for any 
contract requirement, it will be considered by the DOE Operations/Field 
Office Manager, or designee, who may at his/her discretion adjust the 
fee determination to reflect such performance. Any such adjustment shall 
be in accordance with the clause entitled, ``Conditional Payment of Fee, 
Profit, and Other Incentives--Facility Management Contracts'' if 
contained in the contract.
    (d) Performance Evaluation and Measurement Plan(s). To the extent 
not set forth elsewhere in the contract:
    (1) The Government shall establish a Performance Evaluation and 
Measurement Plan(s) upon which the determination of the total available 
fee amount earned shall be based. The Performance Evaluation and 
Measurement Plan(s) will address all of the requirements of contract 
performance specified in the contract directly or by reference. A copy 
of the Performance Evaluation and Measurement Plan(s) shall be provided 
to the Contractor:
    (i) prior to the start of an evaluation period if the requirements, 
evaluation areas, specific incentives, amount of fee, and allocation of 
fee to such evaluation areas and specific incentives have been mutually 
agreed to by the parties; or
    (ii) not later than thirty days prior to the scheduled start date of 
the evaluation period, if the requirements, evaluation areas, specific 
incentives, amount of fee, and allocation of fee to such evaluation 
areas and specific incentives have been unilaterally established by the 
contracting officer.

[[Page 475]]

    (2) The Performance Evaluation and Measurement Plan(s) will set 
forth the criteria upon which the Contractor will be evaluated relating 
to any technical, schedule, management, and/or cost objectives selected 
for evaluation. Such criteria should be objective, but may also include 
subjective criteria. The Plan(s) shall also set forth the method by 
which the total available fee amount will be allocated and the amount 
earned determined.
    (3) The Performance Evaluation and Measurement Plan(s) may, 
consistent with the contract statement of work, be revised during the 
period of performance. The contracting officer shall notify the 
contractor:
    (i) of such unilateral changes at least ninety calendar days prior 
to the end of the affected evaluation period and at least thirty 
calendar days prior to the effective date of the change;
    (ii) of such bilateral changes at least sixty calendar days prior to 
the end of the affected evaluation period; or
    (iii) if such change, whether unilateral or bilateral, is urgent and 
high priority, at least thirty calendar days prior to the end of the 
evaluation period.
    (e) Schedule for total available fee amount earned determinations. 
The DOE Operations/Field Office Manager, or designee, shall issue the 
final total available fee amount earned determination in accordance 
with: the schedule set forth in the Performance Evaluation and 
Measurement Plan(s); or as otherwise set forth in this contract . 
However, a determination must be made within sixty calendar days after 
the receipt by the contracting officer of the Contractor's self-
assessment, if one is required or permitted by paragraph (f) of this 
clause, or seventy calendar days after the end of the evaluation period, 
whichever is later, or a longer period if the Contractor and contracting 
officer agree. If the contracting officer evaluates the Contractor's 
performance of specific requirements on their completion, the payment of 
any earned fee amount must be made within seventy calendar days (or such 
other time period as mutually agreed to between the contracting officer 
and the Contractor) after such completion. If the determination is 
delayed beyond that date, the Contractor shall be entitled to interest 
on the determined total available fee amount earned at the rate 
established by the Secretary of the Treasury under section 12 of the 
Contract Disputes Act of 1978 (41 U.S.C. 611) that is in effect on the 
payment date. This rate is referred to as the ``Renegotiation Board 
Interest Rate,'' and is published in the Federal Register semiannually 
on or about January 1 and July 1. The interest on any late total 
available fee amount earned determination will accrue daily and be 
compounded in 30-day increments inclusive from the first day after the 
schedule determination date through the actual date the determination is 
issued. That is, interest accrued at the end of any 30-day period will 
be added to the determined amount of fee earned and be subject to 
interest if not paid in the succeeding 30-day period.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(1), 
when the award fee cycle consists of two or more evaluation periods, add 
the following to paragraph (c):

    (4) At the sole discretion of the Government, unearned total 
available fee amounts may be carried over from one evaluation period to 
the next, so long as the periods are within the same award fee cycle.

    Alternate II (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(2), 
when the award fee cycle consists of one evaluation period, add the 
following to paragraph (c):
    (4) Award fee not earned during the evaluation period shall not be 
allocated to future evaluation periods.
    Alternate III (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(3), 
when the DOE Operations/Field Office Manager, or designee, requires the 
contractor to submit a self-assessment, add the following as paragraph 
(f):

    (f) Contractor self-assessment. Following each evaluation period, 
the Contractor shall submit a self-assessment within (Insert Number) 
calendar days after the end of the period. This self-assessment shall 
address both the strengths and weaknesses of the Contractor's 
performance during the evaluation period. Where deficiencies in 
performance are noted, the Contractor shall describe the actions planned 
or taken to correct such deficiencies and avoid their recurrence. The 
DOE Operations/Field Office Manager, or designee, will review the 
Contractor's self-assessment, if submitted, as part of its independent 
evaluation of the contractor's management during the period. A self-
assessment, in and of itself may not be the only basis for the award fee 
determination.

    Alternate IV (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(4), 
when the DOE Operations/Field Office Manager, or designee, permits the 
contractor to submit a self-assessment at the contractor's option, add 
the following text as paragraph (f):

    (f) Contractor self-assessment. Following each evaluation period, 
the Contractor may

[[Page 476]]

submit a self-assessment, provided such assessment is submitted within 
(Insert Number) calendar days after the end of the period. This self-
assessment shall address both the strengths and weaknesses of the 
Contractor's performance during the evaluation period. Where 
deficiencies in performance are noted, the Contractor shall describe the 
actions planned or taken to correct such deficiencies and avoid their 
recurrence. The DOE Operations/Field Office Manager, or designee, will 
review the Contractor's self-assessment, if submitted, as part of its 
independent evaluation of the Contractor's management during the period. 
A self-assessment, in and of itself may not be the only basis for the 
award fee determination.

[65 FR 81009, Dec. 22, 2000, as amended at 68 FR 68782, Dec. 10, 2003]



970.5215-2  Make-or-buy plan.

    As prescribed in 48 CFR 970.1504-5(b), insert the following clause:

                       Make-or-Buy Plan (DEC 2000)

    (a) Definitions.
    Buy item means a work activity, supply, or service to be produced or 
performed by an outside source, including a subcontractor or an 
affiliate, subsidiary, or division of the contractor.
    Make item means a work activity, supply, or service to be produced 
or performed by the contractor using its personnel and other resources 
at the Department of Energy facility or site.
    Make-or-buy plan means a contractor's written program for the 
contract that identifies work efforts or requirements that either are 
``make items'' or ``buy items.''
    (b) Make-or-buy plan. The contractor shall develop and implement a 
make-or-buy plan that establishes a preference for providing supplies 
and services on a least-cost basis, subject to any specific make or buy 
criteria identified in the contract or otherwise provided by the 
contracting officer. In developing and implementing its make-or-buy 
plan, the contractor agrees to assess subcontracting opportunities and 
implement subcontracting decisions in accordance with the following:
    (1) The contractor shall conduct internal productivity improvement 
and cost-reduction programs so that in-house performance options can be 
made more efficient and cost-effective.
    (2) The contractor shall consider subcontracting opportunities with 
the maximum practicable regard for open communications with potentially 
affected employees and their representatives. Similarly, a contractor 
shall communicate its plans, activities, cost-benefit analyses, and 
decisions to those stakeholders, including representatives of the 
community and local businesses, likely to be affected by such actions.
    (c) Submission and approval. For new contract awards, the contractor 
shall submit an initial make-or-buy plan, for approval, within 180 days 
after contract award. If the existing contract is to be extended, the 
contractor shall submit a make-or-buy plan for review and approval at 
least 90 days prior to the commencement of the negotiations for the 
extension. The following documentation shall be prepared and submitted:
    (1) A description of the each work item, and if appropriate, the 
identification of the associated Work Authorization or Work Breakdown 
Structure element;
    (2) The categorization of each work item as ``must make,'' ``must 
buy,'' or ``can make or buy,'' with the reasons for such categorization 
in consideration of the program specific make or buy criteria (including 
least cost considerations). For non-core capabilities categorized as 
``must make,'' a cost/benefit analysis must be performed for each item 
if:
    (i) The contractor is not the least-cost performer, and
    (ii) A program specific make-or-buy criterion does not otherwise 
justify a ``must make'' categorization;
    (3) A decision to either ``make'' or ``buy'' in consideration of the 
program specific make or buy criteria (including least cost 
considerations) for work effort categorized as ``can make or buy'';
    (4) Identification of potential suppliers and subcontractors, if 
known, and their location and size status;
    (5) A recommendation to defer a make or buy decision where 
categorization of an identifiable work effort is impracticable at the 
time of initial development of the plan and a schedule for future re-
evaluation;
    (6) A description of the impact of a change in current practice of 
making or buying on the existing work force; and
    (7) Any additional information appropriate to support and explain 
the plan.
    (d) Conduct of operations. Once a make-or-buy plan is approved, the 
contractor shall perform in accordance with the plan.
    (e) Changes to the make-or-buy plan. The make-or-buy plan 
established in accordance with paragraph (b) of this clause shall remain 
in effect for the term of the contract, unless:
    (1) A lesser period is provided either for the total plan or for 
individual items or work effort;
    (2) The circumstances supporting the make-or-buy decisions change, 
or
    (3) New work is identified.
    At least annually, the contractor shall review its approved make-or-
buy plan to ensure that it reflects current conditions. Changes to the 
approved make-or-buy plan shall be submitted in advance of the effective 
date of the proposed change in sufficient

[[Page 477]]

time to permit evaluation and review. Changes shall be submitted in 
accordance with the instructions provided by the contracting officer. 
Modification of the make-or-buy plan to incorporate proposed changes or 
additions shall be effective upon the contractor's receipt of the 
contracting officer's written approval.

                             (End of clause)



970.5215-3  Conditional payment of fee, profit, and other incentives--
facility management contracts

    As prescribed in 48 CFR 970.1504-5(c)(1), insert the following 
clause:

   Conditional Payment of Fee, Profit, and Other Incentives--Facility 
                     Management Contracts (JAN 2004)

    (a) General. (1) The payment of earned fee, fixed fee, profit, or 
share of cost savings under this contract is dependent upon:
    (i) The contractor's or contractor employees' compliance with the 
terms and conditions of this contract relating to environment, safety 
and health (ES&H), which includes worker safety and health (WS&H), 
including performance under an approved Integrated Safety Management 
System (ISMS); and
    (ii) The contractor's or contractor employees' compliance with the 
terms and conditions of this contract relating to the safeguarding of 
Restricted Data and other classified information.
    (2) The ES&H performance requirements of this contract are set forth 
in its ES&H terms and conditions, including the DOE approved contractor 
ISMS or similar document. Financial incentives for timely mission 
accomplishment or cost effectiveness shall never compromise or impede 
full and effective implementation of the ISMS and full ES&H compliance.
    (3) The performance requirements of this contract relating to the 
safeguarding of Restricted Data and other classified information are set 
forth in the clauses of this contract entitled, ``Security'' and ``Laws, 
Regulations, and DOE Directives,'' as well as in other terms and 
conditions.
    (4) If the contractor does not meet the performance requirements of 
this contract relating to ES&H or to the safeguarding of Restricted Data 
and other classified information during any performance evaluation 
period established under the contract pursuant to the clause of this 
contract entitled, ``Total Available Fee: Base Fee Amount and 
Performance Fee Amount,'' otherwise earned fee, fixed fee, profit or 
share of cost savings may be unilaterally reduced by the contracting 
officer.
    (b) Reduction Amount. (1) The amount of earned fee, fixed fee, 
profit, or share of cost savings that may be unilaterally reduced will 
be determined by the severity of the performance failure pursuant to the 
degrees specified in paragraphs (c) and (d) of this clause.
    (2) If a reduction of earned fee, fixed fee, profit, or share of 
cost savings is warranted, unless mitigating factors apply, such 
reduction shall not be less than 26 percent nor greater than 100 percent 
of the amount of earned fee, fixed fee, profit, or the contractor's 
share of cost savings for a first degree performance failure, not less 
than 11 percent nor greater than 25 percent for a second degree 
performance failure, and up to 10 percent for a third degree performance 
failure.
    (3) In determining the amount of the reduction and the applicability 
of mitigating factors, the contracting officer must consider the 
contractor's overall performance in meeting the ES&H or security 
requirements of the contract. Such consideration must include 
performance against any site specific performance criteria/requirements 
that provide additional definition, guidance for the amount of 
reduction, or guidance for the applicability of mitigating factors. In 
all cases, the contracting officer must consider mitigating factors that 
may warrant a reduction below the applicable range (see 48 CFR 970.1504-
1-2). The mitigating factors include, but are not limited to, the 
following ((v), (vi), (vii) and (viii) apply to ES&H only).
    (i) Degree of control the contractor had over the event or incident.
    (ii) Efforts the contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of: ES&H and 
compliance in related areas; or of safeguarding Restricted Data and 
other classified information and compliance in related areas.
    (v) Contractor demonstration to the contracting officer's 
satisfaction that the principles of industrial ES&H standards are 
routinely practiced (e.g., Voluntary Protection Program, ISO 14000).
    (vi) Event caused by ``Good Samaritan'' act by the contractor (e.g., 
offsite emergency response).
    (vii) Contractor demonstration that a performance measurement system 
is routinely used to improve and maintain ES&H performance (including 
effective resource allocation) and to support DOE corporate decision-
making (e.g., policy, ES&H programs). * * *
    (viii) Contractor demonstration that an Operating Experience and 
Feedback Program is functioning that demonstrably affects continuous 
improvement in ES&H by use of lessons-learned and best practices inter- 
and intra-DOE sites.

[[Page 478]]

    (4)(i) The amount of fee, fixed fee, profit, or share of cost 
savings that is otherwise earned by a contractor during an evaluation 
period may be reduced in accordance with this clause if it is determined 
that a performance failure warranting a reduction under this clause 
occurs within the evaluation period.
    (ii) The amount of reduction under this clause, in combination with 
any reduction made under any other clause in the contract, shall not 
exceed the amount of fee, fixed fee, profit, or the contractor's share 
of cost savings that is otherwise earned during the evaluation period.
    (iii) For the purposes of this clause, earned fee, fixed fee, 
profit, or share of cost savings for the evaluation period shall mean 
the amount determined by the contracting officer or fee determination 
official as otherwise payable based on the contractor's performance 
during the evaluation period. Where the contract provides for financial 
incentives that extend beyond a single evaluation period, this amount 
shall also include: any provisional amounts determined otherwise payable 
in the evaluation period; and, if provisional payments are not provided 
for, the allocable amount of any incentive determined otherwise payable 
at the conclusion of a subsequent evaluation period. The allocable 
amount shall be the total amount of the earned incentive divided by the 
number of evaluation periods over which it was earned.
    (iv) The Government will effect the reduction as soon as practicable 
after the end of the evaluation period in which the performance failure 
occurs. If the Government is not aware of the failure, it will effect 
the reduction as soon as practical after becoming aware. For any portion 
of the reduction requiring an allocation the Government will effect the 
reduction at the end of the evaluation period in which it determines the 
total amount earned under the incentive. If at any time a reduction 
causes the sum of the payments the contractor has received for fee, 
fixed fee, profit, or share of cost savings to exceed the sum of fee, 
fixed fee, profit, or share of cost savings the contractor has earned 
(provisionally or otherwise), the contractor shall immediately return 
the excess to the Government. (What the contractor ``has earned'' 
reflects any reduction made under this or any other clause of the 
contract.)
    (v) At the end of the contract:
    (A) The Government will pay the contractor the amount by which the 
sum of fee, fixed fee, profit, or share of cost savings the contractor 
has earned exceeds the sum of the payments the contractor has received; 
or
    (B) The contractor shall return to the Government the amount by 
which the sum of the payments the contractor has received exceeds the 
sum of fee, fixed fee, profit, or share of cost savings the contractor 
has earned. (What the contractor ``has earned'' reflects any reduction 
made under this or any other clause of the contract.)
    (c) Environment, Safety and Health (ES&H). Performance failures 
occur if the contractor does not comply with the contract's ES&H terms 
and conditions, including the DOE approved contractor ISMS. The degrees 
of performance failure under which reductions of earned or fixed fee, 
profit, or share of cost savings will be determined are:
    (1) First Degree: Performance failures that are most adverse to 
ES&H. Failure to develop and obtain required DOE approval of an ISMS is 
considered first degree. The Government will perform necessary review of 
the ISMS in a timely manner and will not unreasonably withhold approval 
of the contractor's ISMS. The following performance failures or 
performance failures of similar import will be considered first degree.
    (i) Type A accident (defined in DOE Order 225.1A).
    (ii) Two Second Degree performance failures during an evaluation 
period.
    (2) Second Degree: Performance failures that are significantly 
adverse to ES&H. They include failures to comply with an approved ISMS 
that result in an actual injury, exposure, or exceedence that occurred 
or nearly occurred but had minor practical long-term health 
consequences. They also include breakdowns of the Safety Management 
System. The following performance failures or performance failures of 
similar import will be considered second degree:
    (i) Type B accident (defined in DOE Order 225.1A).
    (ii) Non-compliance with an approved ISMS that results in a near 
miss of a Type A or B accident. A near miss is a situation in which an 
inappropriate action occurs, or a necessary action is omitted, but does 
not result in an adverse effect.
    (iii) Failure to mitigate or notify DOE of an imminent danger 
situation after discovery, where such notification is a requirement of 
the contract.
    (3) Third Degree: Performance failures that reflect a lack of focus 
on improving ES&H. They include failures to comply with an approved ISMS 
that result in potential breakdown of the System. The following 
performance failures or performance failures of similar import will be 
considered third degree:
    (i) Failure to implement effective corrective actions to address 
deficiencies/non-compliances documented through: external (e.g., 
Federal) oversight and/or reported per DOE Order 232.1A requirements; or 
internal oversight of DOE Order 440.1A requirements.
    (ii) Multiple similar non-compliances identified by external (e.g., 
Federal) oversight that in aggregate indicate a significant programmatic 
breakdown.
    (iii) Non-compliances that either have, or may have, significant 
negative impacts to

[[Page 479]]

the worker, the public, or the environment or that indicate a 
significant programmatic breakdown.
    (iv) Failure to notify DOE upon discovery of events or conditions 
where notification is required by the terms and conditions of the 
contract.
    (d) Safeguarding Restricted Data and Other Classified Information. 
Performance failures occur if the contractor does not comply with the 
terms and conditions of this contract relating to the safeguarding of 
Restricted Data and other classified information. The degrees of 
performance failure under which reductions of fee, profit, or share of 
cost savings will be determined are as follows:
    (1) First Degree: Performance failures that have been determined, in 
accordance with applicable law, DOE regulation, or directive, to have 
resulted in, or that can reasonably be expected to result in, 
exceptionally grave damage to the national security. The following are 
examples of performance failures or performance failures of similar 
import that will be considered first degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating a risk of, loss, 
compromise, or unauthorized disclosure of Top Secret Restricted Data or 
other information classified as Top Secret, any classification level of 
information in a Special Access Program (SAP), information identified as 
sensitive compartmented information (SCI), or high risk nuclear weapons-
related data.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data, or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Top Secret Restricted Data, or other 
information classified as Top Secret, any classification level of 
information in a SAP, information identified as SCI, or high risk 
nuclear weapons-related data.
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (2) Second Degree: Performance failures that have been determined, 
in accordance with applicable law, DOE regulation, or directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
serious damage to the national security. The following are examples of 
performance failures or performance failures of similar import that will 
be considered second degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Secret Restricted Data or other 
information classified as Secret.
    (ii) Contractor actions that result in a breakdown of the safeguards 
and security management system that can reasonably be expected to result 
in the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data, or other information classified as Secret.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Restricted Data or other classified 
information regardless of classification (except for information covered 
by paragraph (d)(1)(iii) of this clause).
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data or other classified information classified as Secret.
    (3) Third Degree: Performance failures that have been determined, in 
accordance with applicable law, regulation, or DOE directive, to have 
actually resulted in, or that can reasonably be expected to result in, 
undue risk to the common defense and security. In addition, this 
category includes performance failures that result from a lack of 
contractor management and/or employee attention to the proper 
safeguarding of Restricted Data and other classified information. These 
performance failures may be indicators of future, more severe 
performance failures and/or conditions, and if identified and corrected 
early would prevent serious incidents. The following are examples of 
performance failures or performance failures of similar import that will 
be considered third degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, compromise, 
or unauthorized disclosure of Restricted Data or other information 
classified as Confidential.
    (ii) Failure to promptly report alleged or suspected violations of 
laws, regulations, or directives pertaining to the safeguarding of 
Restricted Data or other classified information.
    (iii) Failure to identify or timely execute corrective actions to 
mitigate or eliminate identified vulnerabilities and reduce residual 
risk relating to the protection of Restricted Data or other classified 
information in accordance with the contractor's Safeguards and Security 
Plan or other security plan, as applicable.
    (iv) Contractor actions that result in performance failures which 
unto themselves

[[Page 480]]

pose minor risk, but when viewed in the aggregate indicate degradation 
in the integrity of the contractor's safeguards and security management 
system relating to the protection of Restricted Data and other 
classified information.

                             (End of clause)

    Alternate I (JAN 2004). As prescribed in 48 CFR 970.1504-5(c)(2), 
replace paragraphs (a), (b)(1), (b)(2), and (b)(3) of the basic clause 
with the following paragraphs (a), (b)(1), (b)(2), and (b)(3) and delete 
paragraph (d).
    (a) General. (1) The payment of earned fee, fixed fee, profit, or 
share of cost savings under this contract is dependent upon the 
contractor's or contractor employees' compliance with the terms and 
conditions of this contract relating to environment, safety and health 
(ES&H), which includes worker safety and health (WS&H), including 
performance under an approved Integrated Safety Management System 
(ISMS).
    (2) The ES&H performance requirements of this contract are set forth 
in its ES&H terms and conditions, including the DOE approved contractor 
ISMS or similar document. Financial incentives for timely mission 
accomplishment or cost effectiveness shall never compromise or impede 
full and effective implementation of the ISMS and full ES&H compliance.
    (3) If the contractor does not meet the performance requirements of 
this contract relating to ES&H during any performance evaluation period 
established under the contract pursuant to the clause of this contract 
entitled, ``Total Available Fee: Base Fee Amount and Performance Fee 
Amount,'' otherwise earned fee, fixed fee, profit or share of cost 
savings may be unilaterally reduced by the contracting officer.
    (b) Reduction Amount. (1) The amount of earned fee, fixed fee, 
profit, or share of cost savings that may be unilaterally reduced will 
be determined by the severity of the performance failure pursuant to the 
degrees specified in paragraph (c) of this clause.
    (2) If a reduction of earned fee, fixed fee, profit, or share of 
cost savings is warranted, unless mitigating factors apply, such 
reduction shall not be less than 26 percent nor greater than 100 percent 
of the amount of earned fee, fixed fee, profit, or the contractor's 
share of cost savings for a first degree performance failure, not less 
than 11 percent nor greater than 25 percent for a second degree 
performance failure, and up to 10 percent for a third degree performance 
failure.
    (3) In determining the amount of the reduction and the applicability 
of mitigating factors, the contracting officer must consider the 
contractor's overall performance in meeting the ES&H requirements of the 
contract. Such consideration must include performance against any site 
specific performance criteria/requirements that provide additional 
definition, guidance for the amount of reduction, or guidance for the 
applicability of mitigating factors. In all cases, the contracting 
officer must consider mitigating factors that may warrant a reduction 
below the applicable range (see 48 CFR 970.1504-1-2). The mitigating 
factors include the following.
    (i) Degree of control the contractor had over the event or incident.
    (ii) Efforts the contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of ES&H and 
compliance in related areas.
    (v) Contractor demonstration to the Contracting Officer's 
satisfaction that the principles of industrial ES&H standards are 
routinely practiced (e.g., Voluntary Protection Program Star Status, or 
ISO 14000 Certification).
    (vi) Event caused by ``Good Samaritan'' act by the contractor (e.g., 
offsite emergency response).
    (vii) Contractor demonstration that a performance measurement system 
is routinely used to improve and maintain ES&H performance (including 
effective resource allocation) and to support DOE corporate decision-
making (e.g., policy, ES&H programs).
    (viii) Contractor demonstration that an Operating Experience and 
Feedback Program is functioning that demonstrably affects continuous 
improvement in ES&H by use of lessons-learned and best practices inter- 
and intra-DOE sites.
    Alternate II (JAN 2004). As prescribed in 48 CFR 970.1504-5(c)(3), 
insert the following as paragraphs (e) and (f) in contracts awarded on a 
cost-plus-award fee, incentive fee or multiple fee basis (if Alternate I 
is also used, redesignate the following as paragraphs (d) and (e)).
    (e) Minimum requirements for specified level of performance. (1) At 
a minimum the contractor must perform the following:
    (i) The requirements with specific incentives which do not require 
the achievement of cost efficiencies in order to be performed at the 
level of performance set forth in the Statement of Work, Work 
Authorization Directive, or similar document unless an otherwise minimum 
level of performance has been established in the specific incentive;
    (ii) All of the performance requirements directly related to 
requirements specifically incentivized which do not require the 
achievement of cost efficiencies in order to be performed at a level of 
performance such that the overall performance of these related 
requirements is at an acceptable level; and

[[Page 481]]

    (iii) All other requirements at a level of performance such that the 
total performance of the contract is not jeopardized.
    (2) The evaluation of the Contractor's achievement of the level of 
performance shall be unilaterally determined by the Government. To the 
extent that the Contractor fails to achieve the minimum performance 
levels specified in the Statement of Work, Work Authorization Directive, 
or similar document, during the performance evaluation period, the DOE 
Operations/Field Office Manager, or designee, may reduce any otherwise 
earned fee, fixed fee, profit, or shared net savings for the performance 
evaluation period. Such reduction shall not result in the total of 
earned fee, fixed fee, profit, or shared net savings being less than 25 
percent of the total available fee amount. Such 25 percent shall include 
base fee, if any.
    (f) Minimum requirements for cost performance. (1) Requirements 
incentivized by other than cost incentives must be performed within 
their specified cost constraint and must not adversely impact the costs 
of performing unrelated activities.
    (2) The performance of requirements with a specific cost incentive 
must not adversely impact the costs of performing unrelated 
requirements.
    (3) The contractor's performance within the stipulated cost 
performance levels for the performance evaluation period shall be 
determined by the Government. To the extent the contractor fails to 
achieve the stipulated cost performance levels, the DOE Operations/Field 
Office Manager, or designee, may reduce in whole or in part any 
otherwise earned fee, fixed fee, profit, or shared net savings for the 
performance evaluation period. Such reduction shall not result in the 
total of earned fee, fixed fee, profit or shared net savings being less 
than 25 percent of the total available fee amount. Such 25 percent shall 
include base fee, if any.

[69 FR 68782, Dec. 10, 2004]



970.5215-4  Cost reduction.

    As prescribed in 48 CFR 970.1504-5(d), insert the following clause:

                        Cost Reduction (DEC 2000)

    (a) General. It is the Department of Energy's (DOE's) intent to have 
its facilities and laboratories operated in an efficient and effective 
manner. To this end, the Contractor shall assess its operations and 
identify areas where cost reductions would bring cost efficiency to 
operations without adversely affecting the level of performance required 
by the contract. The Contractor, to the maximum extent practical, shall 
identify areas where cost reductions may be effected, and develop and 
submit Cost Reduction Proposals (CRPs) to the contracting officer. If 
accepted, the Contractor may share in any shared net savings from 
accepted CRPs in accordance with paragraph (g) of this clause.
    (b) Definitions. Administrative cost is the contractor cost of 
developing and administering the CRP.
    Design, process, or method change is a change to a design, process, 
or method which has established cost, technical and schedule baseline, 
is defined, and is subject to a formal control procedure. Such a change 
must be innovative, initiated by the contractor, and applied to a 
specific project or program.
    Development cost is the Contractor cost of up-front planning, 
engineering, prototyping, and testing of a design, process, or method.
    DOE cost is the Government cost incurred implementing and validating 
the CRP.
    Implementation cost is the Contractor cost of tooling, facilities, 
documentation, etc., required to effect a design, process, or method 
change once it has been tested and approved.
    Net Savings means a reduction in the total amount (to include all 
related costs and fee) of performing the effort where the savings revert 
to DOE control and may be available for deobligation. Such savings may 
result from a specific cost reduction effort which is negotiated on a 
cost-plus-incentive-fee, fixed-price incentive, or firm-fixed-price 
basis, or may result directly from a design, process, or method change. 
They may also be savings resulting from formal or informal direction 
given by DOE or from changes in the mission, work scope, or routine 
reorganization of the Contractor due to changes in the budget.
    Shared Net Savings are those net savings which result from:
    (1) a specific cost reduction effort which is negotiated on a cost-
plus-incentive-fee or fixed-price incentive basis, and is the difference 
between the negotiated target cost of performing an effort as negotiated 
and the actual allowable cost of performing that effort; or
    (2) a design, process, or method change, which occurs in the fiscal 
year in which the change is accepted and the subsequent fiscal year, and 
is the difference between the estimated cost of performing an effort as 
originally planned and the actual allowable cost of performing that same 
effort utilizing a revised plan intended to reduce costs along with any 
Contractor development costs, implementation costs, administrative 
costs, and DOE costs associated with the revised plan. Administrative 
costs and DOE costs are only included at the discretion of the 
contracting officer. Savings resulting from formal or informal direction 
given by the DOE or changes in the mission, work scope, or routine 
reorganization of the Contractor due to changes in the budget are not to 
be considered as shared net savings for purposes of this clause and do 
not qualify for incentive sharing.

[[Page 482]]

    (c) Procedure for submission of CRPs. (1) CRPs for the establishment 
of cost-plus-incentive-fee, fixed-price incentive, or firm-fixed-price 
efforts or for design, process, or methods changes submitted by the 
Contractor shall contain, at a minimum, the following:
    (i) Current Method (Baseline)--A verifiable description of the 
current scope of work, cost, and schedule to be impacted by the 
initiative, and supporting documentation.
    (ii) New Method (New Proposed Baseline)--A verifiable description of 
the new scope of work, cost, and schedule, how the initiative will be 
accomplished, and supporting documentation.
    (iii) Feasibility Assessment--A description and evaluation of the 
proposed initiative and benefits, risks, and impacts of implementation. 
This evaluation shall include an assessment of the difference between 
the current method (baseline) and proposed new method including all 
related costs.
    (2) In addition, CRPs for the establishment of cost-plus-incentive-
fee, fixed-price incentive, or firm-fixed-price efforts shall contain, 
at a minimum, the following:
    (i) The proposed contractual arrangement and the justification for 
its use; and
    (ii) A detailed cost/price estimate and supporting rationale. If the 
approach is proposed on an incentive basis, minimum and maximum cost 
estimates should be included along with any proposed sharing 
arrangements.
    (d) Evaluation and Decision. All CRPs must be submitted to and 
approved by the contracting officer. Included in the information 
provided by the CRP must be a discussion of the extent the proposed cost 
reduction effort may:
    (1) Pose a risk to the health and safety of workers, the community, 
or to the environment;
    (2) Result in a waiver or deviation from DOE requirements, such as 
DOE Orders and joint oversight agreements;
    (3) Require a change in other contractual agreements;
    (4) Result in significant organizational and personnel impacts;
    (5) Create a negative impact on the cost, schedule, or scope of work 
in another area;
    (6) Pose a potential negative impact on the credibility of the 
Contractor or the DOE; and
    (7) Impact successful and timely completion of any of the work in 
the cost, technical, and schedule baseline.
    (e) Acceptance or Rejection of CRPs. Acceptance or rejection of a 
CRP is a unilateral determination made by the contracting officer. The 
contracting officer will notify the Contractor that a CRP has been 
accepted, rejected, or deferred within (Insert Number) days of receipt. 
The only CRPs that will be considered for acceptance are those which the 
Contractor can demonstrate, at a minimum, will:
    (1) Result in net savings (in the sharing period if a design, 
process, or method change);
    (2) Not reappear as costs in subsequent periods; and
    (3) Not result in any impairment of essential functions.
    (f) The failure of the contracting officer to notify the Contractor 
of the acceptance, rejection, or deferral of a CRP within the specified 
time shall not be construed as approval.
    (g) Adjustment to Original Estimated Cost and Fee. If a CRP is 
established on a cost-plus-incentive-fee, fixed-price incentive or firm-
fixed-price basis, the originally estimated cost and fee for the total 
effort shall be adjusted to remove the estimated cost and fee amount 
associated with the CRP effort.
    (h) Sharing Arrangement. If a CRP is accepted, the Contractor may 
share in the shared net savings. For a CRP negotiated on a cost-plus-
incentive-fee or fixed-price incentive basis, with the specific 
incentive arrangement (negotiated target costs, target fees, share 
lines, ceilings, profit, etc.) set forth in the contractual document 
authorizing the effort, the Contractor's share shall be the actual fee 
or profit resulting from such an arrangement. For a CRP negotiated as a 
cost savings incentive resulting from a design, process, or method 
change, the Contractor's share shall be a percentage, not to exceed 25% 
of the shared net savings. The specific percentage and sharing period 
shall be set forth in the contractual document.
    (i) Validation of Shared Net Savings. The contracting officer shall 
validate actual shared net savings. If actual shared net savings cannot 
be validated, the contractor will not be entitled to a share of the net 
shared savings.
    (j) Relationship to Other Incentives. Only those benefits of an 
accepted CRP not rewardable under other clauses of this contract shall 
be rewarded under this clause.
    (k) Subcontracts. The Contractor may include a clause similar to 
this clause in any subcontract. In calculating any estimated shared net 
savings in a CRP under this contract, the Contractor's administration, 
development, and implementation costs shall include any subcontractor's 
allowable costs, and any CRP incentive payments to a subcontractor 
resulting from the acceptance of such CRP. The Contractor may choose any 
arrangement for subcontractor CRP incentive payments, provided that the 
payments not reduce the DOE's share of shared net savings.

[[Page 483]]

                             (End of clause)



970.5215-5  Limitation on fee.

    As prescribed in 48 CFR 970.1504-5(e), the contracting officer shall 
insert the following provision:

                      Limitation on Fee (DEC 2000)

    (a) For the purpose of this solicitation, fee amounts shall not 
exceed the total available fee allowed by the fee policy at 48 CFR 
970.1504-1-1, or as specifically stated elsewhere in the solicitation.
    (b) The Government reserves the unilateral right, in the event an 
offeror's proposal is selected for award, to limit: fixed fee to not 
exceed an amount established pursuant to 48 CFR 970.1504-1-5; and total 
available fee to not exceed an amount established pursuant to 48 CFR 
970.1504-1-9; or fixed fee or total available fee to an amount as 
specifically stated elsewhere in the solicitation.

                             (End of clause)



970.5222-1  Collective Bargaining Agreements Management and Operating 
Contracts.

    As prescribed in 48 CFR 970.2201-1-3, insert the following clause:

  Collective Bargaining Agreements--Management and Operating Contracts 
                               (DEC 2000)

    When negotiating collective bargaining agreements applicable to the 
work force under this contract, the Contractor shall use its best 
efforts to ensure such agreements contain provisions designed to assure 
continuity of services. All such agreements entered into during the 
contract period of performance should provide that grievances and 
disputes involving the interpretation or application of the agreement 
will be settled without resorting to strike, lockout, or other 
interruption of normal operations. For this purpose, each collective 
bargaining agreement should provide an effective grievance procedure 
with arbitration as its final step, unless the parties mutually agree 
upon some other method of assuring continuity of operations. As part of 
such agreements, management and labor should agree to cooperate fully 
with the Federal Mediation and Conciliation Service. The contractor 
shall include the substance of this clause in any subcontracts for 
protective services or other services performed on the DOE-owned site 
which will affect the continuity of operation of the facility.

                             (End of clause)



970.5222-2  Overtime management.

    As prescribed in 48 CFR 970.2201-2-2, insert the following clause:

                     Overtime Management (DEC 2000)

    (a) The contractor shall maintain adequate internal controls to 
ensure that employee overtime is authorized only if cost effective and 
necessary to ensure performance of work under this contract.
    (b) The contractor shall notify the contracting officer when in any 
given year it is likely that overtime usage as a percentage of payroll 
may exceed 4%.
    (c) The contracting officer may require the submission, for 
approval, of a formal annual overtime control plan whenever contractor 
overtime usage as a percentage of payroll has exceeded, or is likely to 
exceed, 4%, or if the contracting officer otherwise deems overtime 
expenditures excessive. The plan shall include, at a minimum:
    (1) An overtime premium fund (maximum dollar amount);
    (2) Specific controls for casual overtime for non-exempt employees;
    (3) Specific parameters for allowability of exempt overtime;
    (4) An evaluation of alternatives to the use of overtime; and
    (5) Submission of a semi-annual report that includes for exempt and 
non-exempt employees:
    (i) Total cost of overtime;
    (ii) Total cost of straight time;
    (iii) Overtime cost as a percentage of straight-time cost;
    (iv) Total overtime hours;
    (v) Total straight-time hours; and
    (vi) Overtime hours as a percentage of straight-time hours.

                             (End of clause)



970.5223-1  Integration of environment, safety, and health into work 
planning and execution.

    As prescribed in 48 CFR 970.2303-2(a), insert the following clause:

 Integration of Environment, Safety, and Health Into Work Planning and 
                          Execution (DEC 2000)

    (a) For the purposes of this clause,
    (1) Safety encompasses environment, safety and health, including 
pollution prevention and waste minimization; and
    (2) Employees include subcontractor employees.
    (b) In performing work under this contract, the contractor shall 
perform work safely, in a manner that ensures adequate protection

[[Page 484]]

for employees, the public, and the environment, and shall be accountable 
for the safe performance of work. The contractor shall exercise a degree 
of care commensurate with the work and the associated hazards. The 
contractor shall ensure that management of environment, safety and 
health (ES&H) functions and activities becomes an integral but visible 
part of the contractor's work planning and execution processes. The 
contractor shall, in the performance of work, ensure that:
    (1) Line management is responsible for the protection of employees, 
the public, and the environment. Line management includes those 
contractor and subcontractor employees managing or supervising employees 
performing work.
    (2) Clear and unambiguous lines of authority and responsibility for 
ensuring (ES&H) are established and maintained at all organizational 
levels.
    (3) Personnel possess the experience, knowledge, skills, and 
abilities that are necessary to discharge their responsibilities.
    (4) Resources are effectively allocated to address ES&H, 
programmatic, and operational considerations. Protecting employees, the 
public, and the environment is a priority whenever activities are 
planned and performed.
    (5) Before work is performed, the associated hazards are evaluated 
and an agreed-upon set of ES&H standards and requirements are 
established which, if properly implemented, provide adequate assurance 
that employees, the public, and the environment are protected from 
adverse consequences.
    (6) Administrative and engineering controls to prevent and mitigate 
hazards are tailored to the work being performed and associated hazards. 
Emphasis should be on designing the work and/or controls to reduce or 
eliminate the hazards and to prevent accidents and unplanned releases 
and exposures.
    (7) The conditions and requirements to be satisfied for operations 
to be initiated and conducted are established and agreed-upon by DOE and 
the contractor. These agreed-upon conditions and requirements are 
requirements of the contract and binding upon the contractor. The extent 
of documentation and level of authority for agreement shall be tailored 
to the complexity and hazards associated with the work and shall be 
established in a Safety Management System.
    (c) The contractor shall manage and perform work in accordance with 
a documented Safety Management System (System) that fulfills all 
conditions in paragraph (b) of this clause at a minimum. Documentation 
of the System shall describe how the contractor will:
    (1) Define the scope of work;
    (2) Identify and analyze hazards associated with the work;
    (3) Develop and implement hazard controls;
    (4) Perform work within controls; and
    (5) Provide feedback on adequacy of controls and continue to improve 
safety management.
    (d) The System shall describe how the contractor will establish, 
document, and implement safety performance objectives, performance 
measures, and commitments in response to DOE program and budget 
execution guidance while maintaining the integrity of the System. The 
System shall also describe how the contractor will measure system 
effectiveness.
    (e) The contractor shall submit to the contracting officer 
documentation of its System for review and approval. Dates for 
submittal, discussions, and revisions to the System will be established 
by the contracting officer. Guidance on the preparation, content, 
review, and approval of the System will be provided by the contracting 
officer. On an annual basis, the contractor shall review and update, for 
DOE approval, its safety performance objectives, performance measures, 
and commitments consistent with and in response to DOE's program and 
budget execution guidance and direction. Resources shall be identified 
and allocated to meet the safety objectives and performance commitments 
as well as maintain the integrity of the entire System. Accordingly, the 
System shall be integrated with the contractor's business processes for 
work planning, budgeting, authorization, execution, and change control.
    (f) The contractor shall comply with, and assist the Department of 
Energy in complying with, ES&H requirements of all applicable laws and 
regulations, and applicable directives identified in the clause of this 
contract entitled ``Laws, Regulations, and DOE Directives.'' The 
contractor shall cooperate with Federal and non-Federal agencies having 
jurisdiction over ES&H matters under this contract.
    (g) The contractor shall promptly evaluate and resolve any 
noncompliance with applicable ES&H requirements and the System. If the 
contractor fails to provide resolution or if, at any time, the 
contractor's acts or failure to act causes substantial harm or an 
imminent danger to the environment or health and safety of employees or 
the public, the contracting officer may issue an order stopping work in 
whole or in part. Any stop work order issued by a contracting officer 
under this clause (or issued by the contractor to a subcontractor in 
accordance with paragraph (i) of this clause) shall be without prejudice 
to any other legal or contractual rights of the Government. In the event 
that the contracting officer issues a stop work order, an order 
authorizing the resumption of the work may be issued at the discretion 
of the contracting officer. The contractor shall not

[[Page 485]]

be entitled to an extension of time or additional fee or damages by 
reason of, or in connection with, any work stoppage ordered in 
accordance with this clause.
    (h) Regardless of the performer of the work, the contractor is 
responsible for compliance with the ES&H requirements applicable to this 
contract. The contractor is responsible for flowing down the ES&H 
requirements applicable to this contract to subcontracts at any tier to 
the extent necessary to ensure the contractor's compliance with the 
requirements.
    (i) The contractor shall include a clause substantially the same as 
this clause in subcontracts involving complex or hazardous work on site 
at a DOE-owned or -leased facility. Such subcontracts shall provide for 
the right to stop work under the conditions described in paragraph (g) 
of this clause. Depending on the complexity and hazards associated with 
the work, the contractor may choose not to require the subcontractor to 
submit a Safety Management System for the contractor's review and 
approval.

                             (End of clause)



970.5223-2  Affirmative procurement program.

    As prescribed in 48 CFR (DEAR) 970.2304-2, insert the following 
clause in contracts for the management and operation of DOE facilities, 
including national laboratories.

               Affirmative Procurement Program--March 2003

    (a) In the performance of this contract, the Contractor shall comply 
with the requirements of Executive Order 13101 and the U.S. Department 
of Energy (DOE) Affirmative Procurement Program Guidance. This guidance 
includes requirements concerning environmentally preferable products and 
services, recycled content products and biobased products. This guidance 
is available on the Internet.
    (b) In complying with the requirements of paragraph (a) of this 
clause, the Contractor shall coordinate its activities with the DOE 
Recycling Coordinator. Reports required by paragraph (c) of this clause 
shall be submitted through the DOE Recycling Coordinator.
    (c) The Contractor shall prepare and submit reports, at the end of 
the Federal fiscal year, on matters related to the acquisition of items 
designated in EPA's Comprehensive Procurement Guidelines that Federal 
agencies and their Contractors are to procure with recovered/recycled 
content.
    (d) If the Contractor subcontracts a significant portion of the 
operation of the Government facility which includes the acquisition of 
items designated in EPA's Comprehensive Procurement Guidelines, the 
subcontract shall contain a clause substantially the same as this 
clause. The EPA Comprehensive Procurement Guidelines identify products 
which Federal agencies and their Contractors are to procure with 
recycled content pursuant to 40 CFR 247. Examples of such a subcontract 
would be operation of the facility supply function, construction or 
remodeling at the facility, or maintenance of the facility motor vehicle 
fleet. In situations in which the facility management contractor can 
reasonably determine the amount of products with recovered/recycled 
content to be acquired under the subcontract, the facility management 
contractor is not required to flow down the reporting requirement of 
this clause. Instead, the facility management contractor may include 
such quantities in its own report and include an agreement in the 
subcontract that such products will be acquired with recovered/recycled 
content and that the subcontractor will advise if it is unable to 
procure such products with recovered/recycled content because the 
product is not available:
    (i) Competitively within a reasonable time;
    (ii) At a reasonable price; or,
    (iii) Within the performance requirements.
    If reports are required of the subcontractor, such reports shall be 
submitted to the facility management contractor. The reports may be 
submitted at the conclusion of the subcontract term provided that the 
subcontract delivery term is not multi-year in nature. If the delivery 
term is multi-year, the subcontractor shall report its accomplishments 
for each Federal fiscal year in a manner and at a time or times 
acceptable to both parties
    (e) When this clause is used in a subcontract, the word 
``Contractor'' will be understood to mean ``subcontractor'' and the term 
``DOE Recycling Coordinator'' will be understood to mean ``Contractor 
Recycling Coordinator.''

[68 FR 6359, Feb. 7, 2003]



970.5223-3  Agreement regarding Workplace Substance Abuse Programs at DOE 
facilities.

    As prescribed in 970.2305-4(a), the contracting officer shall insert 
the following provision:

Agreement Regarding Workplace Substance Abuse Programs at DOE Sites (DEC 
                                  2000)

    (a) Any contract awarded as a result of this solicitation will be 
subject to the policies, criteria, and procedures of 10 CFR part 707, 
Workplace Substance Abuse Programs at DOE Sites.
    (b) By submission of its offer, the officer agrees to provide to the 
contracting officer,

[[Page 486]]

within 30 days after notification of selection for award, or award of a 
contract, whichever occurs first, pursuant to this solicitation, its 
written workplace substance abuse program consistent with the 
requirements of 10 CFR part 707.
    (c) Failure of the offeror to agree to the condition of 
responsibility set forth in paragraph (b) of this provision, renders the 
offeror unqualified and ineligible for award.

                           (End of provision)



970.5223-4  Workplace Substance Abuse Programs at DOE Sites.

    As prescribed in 48 CFR 970.2305-4(b), insert the following clause:

       Workplace Substance Abuse Programs at DOE Sites (DEC 2000)

    (a) Program Implementation. The contractor shall, consistent with 10 
CFR part 707, Workplace Substance Abuse Programs at DOE Sites, 
incorporated herein by reference with full force and effect, develop, 
implement, and maintain a workplace substance abuse program.
    (b) Remedies. In addition to any other remedies available to the 
Government, the contractor's failure to comply with the requirements of 
10 CFR part 707 or to perform in a manner consistent with its approved 
program may render the contractor subject to: the suspension of contract 
payments, or, where applicable, a reduction in award fee; termination 
for default; and suspension or debarment.
    (c) Subcontracts. (1) The contractor agrees to notify the 
contracting officer reasonably in advance of, but not later than 30 days 
prior to, the award of any subcontract the contractor believes may be 
subject to the requirements of 10 CFR part 707.
    (2) The DOE prime contractor shall require all subcontracts subject 
to the provisions of 10 CFR part 707 to agree to develop and implement a 
workplace substance abuse program that complies with the requirements of 
10 CFR part 707, Workplace Substance Abuse Programs at DOE Sites, as a 
condition for award of the subcontract. The DOE prime contractor shall 
review and approve each subcontractor's program, and shall periodically 
monitor each subcontractor's implementation of the program for 
effectiveness and compliance with 10 CFR part 707.
    (3) The contractor agrees to include, and require the inclusion of, 
the requirements of this clause in all subcontracts, at any tier, that 
are subject to the provisions of 10 CFR part 707.

                             (End of clause)



970.5223-5  DOE motor vehicle fleet fuel efficiency.

    As prescribed in 48 CFR 970.2307-2, insert the following clause in 
contracts providing for Contractor management of the motor vehicle 
fleet.

           DOE motor vehicle fleet fuel efficiency (OCT 2003)

    When managing Government-owned vehicles for the Department of 
Energy, the Contractor will conduct operations relating to such vehicles 
in accordance with the goals and requirements of Executive Order 13149, 
Greening the Government Through Federal Fleet and Transportation 
Efficiency, and implementing guidance contained in the document entitled 
U.S. Department of Energy Compliance Strategy for Executive Order 13149 
(April 2001) and future revisions of this compliance strategy that are 
identified in writing by the Contracting Officer. Section 506 of 
Executive Order 13149 exempts military tactical, law enforcement, and 
emergency vehicles from the requirements of the order.

                             (End of clause)



970.5226-1  Diversity plan.

    As prescribed in 48 CFR 970.2671-2, insert the following clause:

                        Diversity Plan (DEC 2000)

    The Contractor shall submit a Diversity Plan to the contracting 
officer for approval within 90 days after the effective date of this 
contract (or contract modification, if appropriate). The contractor 
shall submit an update to its Plan annually or with its annual fee 
proposal. Guidance for preparation of a Diversity Plan is provided in 
Appendix --. The Plan shall include innovative strategies for increasing 
opportunities to fully use the talents and capabilities of a diverse 
work force. The Plan shall address, at a minimum, the Contractor's 
approach for promoting diversity through (1) the Contractor's work 
force, (2) educational outreach, (3) community involvement and outreach, 
(4) subcontracting, (5) economic development (including technology 
transfer), and (6) the prevention of profiling based on race or national 
origin.

                             (End of clause)



970.5226-2  Workforce restructuring under section 3161 of the National 
Defense Authorization Act for fiscal year 1993.

    As prescribed in 48 CFR 970.2672-3, insert the following clause:

[[Page 487]]

   Workforce Restructuring under Section 3161 of the National Defense 
            Authorization Act for Fiscal Year 1993 (DEC 2000)

    (a) Consistent with the objectives of Section 3161 of the National 
Defense Authorization Act for Fiscal Year 1993, 42 U.S.C. 7274h, in 
instances where the Department of Energy has determined that a change in 
workforce at a Department of Energy Defense Nuclear Facility is 
necessary, the contractor agrees to (1) comply with the Department of 
Energy Workforce Restructuring Plan for the facility, if applicable, and 
(2) use its best efforts to accomplish workforce restructuring or 
displacement so as to mitigate social and economic impacts.
    (b) The requirements of this clause shall be included in 
subcontracts at any tier (except subcontracts for commercial items 
pursuant to 41 U.S.C. 403) expected to exceed $500,000.

                             (End of clause)



970.5226-3  Community commitment.

    As prescribed in 48 CFR 970.2673-2, insert the following clause:

                     Community Commitment (DEC 2000)

    It is the policy of the DOE to be a constructive partner in the 
geographic region in which DOE conducts its business. The basic elements 
of this policy include: (1) Recognizing the diverse interests of the 
region and its stakeholders, (2) engaging regional stakeholders in 
issues and concerns of mutual interest, and (3) recognizing that giving 
back to the community is a worthwhile business practice. Accordingly, 
the Contractor agrees that its business operations and performance under 
the Contract will be consistent with the intent of the policy and 
elements set forth above.

                             (End of clause)



970.5227-1  Rights in data-facilities.

    As prescribed in 48 CFR 970.2704-3(a), insert the following clause:

                  Rights in Data--Facilities (DEC 2000)

    (a) Definitions. (1) Computer data bases, as used in this clause, 
means a collection of data in a form capable of, and for the purpose of, 
being stored in, processed, and operated on by a computer. The term does 
not include computer software.
    (2) Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines, or statements, regardless of the media in which recorded, that 
allow or cause a computer to perform a specific operation or series of 
operations and (ii) data comprising source code listings, design 
details, algorithms, processes, flow charts, formulae, and related 
material that would enable the computer program to be produced, created, 
or compiled. The term does not include computer data bases.
    (3) Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The term 
includes technical data and computer software. The term ``data'' does 
not include data incidental to the administration of this contract, such 
as financial, administrative, cost and pricing, or management 
information.
    (4) Limited rights data, as used in this clause, means data, other 
than computer software, developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged. 
The Government's rights to use, duplicate, or disclose limited rights 
data are as set forth in the Limited Rights Notice of subparagraph (e) 
of this clause.
    (5) Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and is confidential or privileged; or 
is published copyrighted computer software, including minor 
modifications of any such computer software. The Government's rights to 
use, duplicate, or disclose restricted computer software are as set 
forth in the Restricted Rights Notice of paragraph (f) of this clause.
    (6) Technical data, as used in this clause, means recorded data, 
regardless of form or characteristic, that are of a scientific or 
technical nature. Technical data does not include computer software, but 
does include manuals and instructional materials and technical data 
formatted as a computer data base.
    (7) Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, including by electronic means, and 
perform publicly and display publicly, in any manner, including by 
electronic means, and for any purpose whatsoever, and to have or permit 
others to do so.
    (b) Allocation of Rights. (1) The Government shall have:
    (i) Ownership of all technical data and computer software first 
produced in the performance of this Contract;
    (ii) Unlimited rights in technical data and computer software 
specifically used in the performance of this Contract, except as 
provided herein regarding copyright, limited rights data, or restricted 
computer software, or except for other data specifically protected by 
statute for a period of time or, where, approved by DOE, appropriate 
instances of the DOE Work for Others Program;

[[Page 488]]

    (iii) The right to inspect technical data and computer software 
first produced or specifically used in the performance of this Contract 
at all reasonable times. The Contractor shall make available all 
necessary facilities to allow DOE personnel to perform such inspection;
    (iv) The right to have all technical data and computer software 
first produced or specifically used in the performance of this Contract 
delivered to the Government or otherwise disposed of by the Contractor, 
either as the contracting officer may from time to time direct during 
the progress of the work or in any event as the contracting officer 
shall direct upon completion or termination of this Contract. The 
Contractor agrees to leave a copy of such data at the facility or plant 
to which such data relate, and to make available for access or to 
deliver to the Government such data upon request by the contracting 
officer. If such data are limited rights data or restricted computer 
software, the rights of the Government in such data shall be governed 
solely by the provisions of paragraph (e) of this clause (``Rights in 
Limited Rights Data'') or paragraph (f) of this clause (``Rights in 
Restricted Computer Software''); and
    (v) The right to remove, cancel, correct, or ignore any markings not 
authorized by the terms of this Contract on any data furnished hereunder 
if, in response to a written inquiry by DOE concerning the propriety of 
the markings, the Contractor fails to respond thereto within 60 days or 
fails to substantiate the propriety of the markings. In either case DOE 
will notify the Contractor of the action taken.
    (2) The Contractor shall have:
    (i) The right to withhold limited rights data and restricted 
computer software unless otherwise provided in accordance with the 
provisions of this clause; and
    (ii) The right to use for its private purposes, subject to patent, 
security or other provisions of this Contract, data it first produces in 
the performance of this Contract, except for data in DOE's Uranium 
Enrichment Technology, including diffusion, centrifuge, and atomic vapor 
laser isotope separation, provided the data requirements of this 
Contract have been met as of the date of the private use of such data.
    (3) The Contractor agrees that for limited rights data or restricted 
computer software or other technical, business or financial data in the 
form of recorded information which it receives from, or is given access 
to by, DOE or a third party, including a DOE Contractor or 
subcontractor, and for technical data or computer software it first 
produces under this Contract which is authorized to be marked by DOE, 
the Contractor shall treat such data in accordance with any restrictive 
legend contained thereon.
    (c) Copyrighted Material. (1) The Contractor shall not, without 
prior written authorization of the Patent Counsel, assert copyright in 
any technical data or computer software first produced in the 
performance of this contract. To the extent such authorization is 
granted, the Government reserves for itself and others acting on its 
behalf, a nonexclusive, paid-up, irrevocable, world-wide license for 
Governmental purposes to publish, distribute, translate, duplicate, 
exhibit, and perform any such data copyrighted by the Contractor.
    (2) The Contractor agrees not to include in the technical data or 
computer software delivered under the contract any material copyrighted 
by the Contractor and not to knowingly include any material copyrighted 
by others without first granting or obtaining at no cost a license 
therein for the benefit of the Government of the same scope as set forth 
in paragraph (c)(1) of this clause. If the Contractor believes that such 
copyrighted material for which the license cannot be obtained must be 
included in the technical data or computer software to be delivered, 
rather than merely incorporated therein by reference, the Contractor 
shall obtain the written authorization of the contracting officer to 
include such material in the technical data or computer software prior 
to its delivery.
    (d) Subcontracting. (1) Unless otherwise directed by the contracting 
officer, the Contractor agrees to use in subcontracts in which technical 
data or computer software is expected to be produced or in subcontracts 
for supplies that contain a requirement for production or delivery of 
data in accordance with the policy and procedures of 48 CFR Subpart 27.4 
as supplemented by 48 CFR 927.401 through 927.409, the clause entitled, 
``Rights in Data-General'' at 48 CFR 52.227-14 modified in accordance 
with 927.409(a) and including Alternate V. Alternates II through IV of 
that clause may be included as appropriate with the prior approval of 
DOE Patent Counsel, and the Contractor shall not acquire rights in a 
subcontractor's limited rights data or restricted computer software, 
except through the use of Alternates II or III, respectively, without 
the prior approval of DOE Patent Counsel. The clause at 48 CFR 52.227-
16, Additional Data Requirements, shall be included in subcontracts in 
accordance with DEAR 927.409(h). The contractor shall use instead the 
Rights in Data-Facilities clause at 48 CFR 970.5227-1 in subcontracts, 
including subcontracts for related support services, involving the 
design or operation of any plants or facilities or specially designed 
equipment for such plants or facilities that are managed or operated 
under its contract with DOE.
    (2) It is the responsibility of the Contractor to obtain from its 
subcontractors technical data and computer software and

[[Page 489]]

rights therein, on behalf of the Government, necessary to fulfill the 
Contractor's obligations to the Government with respect to such data. In 
the event of refusal by a subcontractor to accept a clause affording the 
Government such rights, the Contractor shall:
    (i) Promptly submit written notice to the contracting officer 
setting forth reasons or the subcontractor's refusal and other pertinent 
information which may expedite disposition of the matter, and
    (ii) Not proceed with the subcontract without the written 
authorization of the contracting officer.
    (3) Neither the Contractor nor higher-tier subcontractors shall use 
their power to award subcontracts as economic leverage to acquire rights 
in a subcontractor's limited rights data or restricted computer software 
for their private use.
    (e) Rights in Limited Rights Data. Except as may be otherwise 
specified in this Contract as data which are not subject to this 
paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up license by or for the 
Government, in any limited rights data of the Contractor specifically 
used in the performance of this Contract, provided, however, that to the 
extent that any limited rights data when furnished or delivered is 
specifically identified by the Contractor at the time of initial 
delivery to the Government or a representative of the Government, such 
data shall not be used within or outside the Government except as 
provided in the ``Limited Rights Notice'' set forth. All such limited 
rights data shall be marked with the following ``Limited Rights 
Notice'':

                          Limited Rights Notice

    These data contain ``limited rights data,'' furnished under Contract 
No.---------------- with the United States Department of Energy which 
may be duplicated and used by the Government with the express 
limitations that the ``limited rights data'' may not be disclosed 
outside the Government or be used for purposes of manufacture without 
prior permission of the Contractor, except that further disclosure or 
use may be made solely for the following purposes:
    (a) Use (except for manufacture) by support services contractors 
within the scope of their contracts;
    (b) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (c) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Contract is a part for information or use (except for manufacture) in 
connection with the work performed under their contracts and under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed;
    (d) This ``limited rights data'' may be used by the Government or 
others on its behalf for emergency repair or overhaul work under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed; and
    (e) Release to a foreign government, or instrumentality thereof, as 
the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work by 
such government. This Notice shall be marked on any reproduction of this 
data in whole or in part.

                             (End of notice)

    (f) Rights in Restricted Computer Software. (1) Except as may be 
otherwise specified in this Contract as data which are not subject to 
this paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up, license by or for the 
Government, in any restricted computer software of the Contractor 
specifically used in the performance of this Contract, provided, 
however, that to the extent that any restricted computer software when 
furnished or delivered is specifically identified by the Contractor at 
the time of initial delivery to the Government or a representative of 
the Government, such data shall not be used within or outside the 
Government except as provided in the ``Restricted Rights Notice'' set 
forth below. All such restricted computer software shall be marked with 
the following ``Restricted Rights Notice'':

                   Restricted Rights Notice-Long Form

    (a) This computer software is submitted with restricted rights under 
Department of Energy Contract No. --------------. It may not be used, 
reproduced, or disclosed by the Government except as provided in 
paragraph (b) of this notice.
    (b) This computer software may be:
    (1) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (2) Used, copied for use, in a backup or replacement computer if any 
computer for which it was acquired is inoperative or is replaced;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that only the portions of the derivative software consisting of 
the restricted computer software are to be made subject to the same 
restricted rights; and
    (5) Disclosed to and reproduced for use by contractors under a 
service contract (of the

[[Page 490]]

type defined in 48 CFR 37.101) in accordance with subparagraphs (b)(1) 
through (4) of this Notice, provided the Government makes such 
disclosure or reproduction subject to these restricted rights.
    (c) Notwithstanding the foregoing, if this computer software has 
been published under copyright, it is licensed to the Government, 
without disclosure prohibitions, with the rights set forth in the 
restricted rights notice above.
    (d) This Notice shall be marked on any reproduction of this computer 
software, in whole or in part.

                             (End of notice)

    (2) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used.

                  Restricted Rights Notice--Short Form

    Use, reproduction, or disclosure is subject to restrictions set 
forth in the Long Form Notice of DOE Contract No. -------------- with 
(name of Contractor).

                             (End of notice)

    (3) If the software is embedded, or if it is commercially 
impractical to mark it with human readable text, then the symbol R and 
the clause date (mo/yr), in brackets or a box, a [R-mo/yr], may be used. 
This will be read to mean restricted computer software, subject to the 
rights of the Government as described in the Long Form Notice, in effect 
as of the date indicated next to the symbol. The symbol shall not be 
used to mark human readable material. In the event this Contract 
contains any variation to the rights in the Long Form Notice, then the 
contract number must also be cited.
    (4) If restricted computer software is delivered with the copyright 
notice of 17 U.S.C. 401, the software will be presumed to be published 
copyrighted computer software licensed to the Government without 
disclosure prohibitions and with unlimited rights, unless the Contractor 
includes the following statement with such copyright notice 
``Unpublished-rights reserved under the Copyright Laws of the United 
States.''
    (g) Relationship to patents. Nothing contained in this clause 
creates or is intended to imply a license to the Government in any 
patent or is intended to be construed as affecting the scope of any 
licenses or other rights otherwise granted to the Government under any 
patent.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.2704-3(a), where 
access to Category C-24 restricted data is contemplated in the 
performance of a contract the contracting officer shall insert the 
phrase ``and except Restricted Data in category C-24, 10 CFR part 725, 
in which DOE has reserved the right to receive reasonable compensation 
for the use of its inventions and discoveries, including related data 
and technology'' after ``laser isotope separation'' and before the comma 
in paragraph (b)(2)(ii) of the clause at 48 CFR 970.5227-1, Rights in 
Data--Facilities, as appropriate.

                             (End of clause)



970.5227-2  Rights in data-technology transfer.

    As prescribed in 48 CFR 970.2704-3(b), insert the following clause:

             Rights in Data--Technology Transfer (DEC 2000)

    (a) Definitions. (1) Computer data bases, as used in this clause, 
means a collection of data in a form capable of, and for the purpose of, 
being stored in, processed, and operated on by a computer. The term does 
not include computer software.
    (2) Computer software, as used in this clause, means (i) computer 
programs which are data comprising a series of instructions, rules, 
routines, or statements, regardless of the media in which recorded, that 
allow or cause a computer to perform a specific operation or series of 
operations and (ii) data comprising source code listings, design 
details, algorithms, processes, flow charts, formulae, and related 
material that would enable the computer program to be produced, created, 
or compiled. The term does not include computer data bases.
    (3) Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The term 
includes technical data and computer software. The term ``data'' does 
not include data incidental to the administration of this contract, such 
as financial, administrative, cost and pricing, or management 
information.
    (4) Limited rights data, as used in this clause, means data, other 
than computer software, developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged. 
The Government's rights to use, duplicate, or disclose limited rights 
data are as set forth in the Limited Rights Notice of paragraph (g) of 
this clause.
    (5) Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade

[[Page 491]]

secret; is commercial or financial and is confidential or privileged; or 
is published copyrighted computer software, including minor 
modifications of any such computer software. The Government's rights to 
use, duplicate, or disclose restricted computer software are as set 
forth in the Restricted Rights Notice of subparagraph (h) of this 
clause.
    (6) Technical data, as used in this clause, means recorded data, 
regardless of form or characteristic, that are of a scientific or 
technical nature. Technical data does not include computer software, but 
does include manuals and instructional materials and technical data 
formatted as a computer data base.
    (7) Unlimited rights, as used in this clause, means the rights of 
the Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, including by electronic means, and 
perform publicly and display publicly, in any manner, including by 
electronic means, and for any purpose whatsoever, and to have or permit 
others to do so.
    (b) Allocation of Rights. (1) The Government shall have:
    (i) Ownership of all technical data and computer software first 
produced in the performance of this Contract;
    (ii) Unlimited rights in technical data and computer software 
specifically used in the performance of this Contract, except as 
provided herein regarding copyright, limited rights data, or restricted 
computer software, and except for data subject to the withholding 
provisions for protected Cooperative Research and Development Agreement 
(CRADA) information in accordance with Technology Transfer actions under 
this Contract, or other data specifically protected by statute for a 
period of time or, where, approved by DOE, appropriate instances of the 
DOE Work for Others Program;
    (iii) The right to inspect technical data and computer software 
first produced or specifically used in the performance of this Contract 
at all reasonable times. The Contractor shall make available all 
necessary facilities to allow DOE personnel to perform such inspection;
    (iv) The right to have all technical data and computer software 
first produced or specifically used in the performance of this Contract 
delivered to the Government or otherwise disposed of by the Contractor, 
either as the contracting officer may from time to time direct during 
the progress of the work or in any event as the contracting officer 
shall direct upon completion or termination of this Contract. The 
Contractor agrees to leave a copy of such data at the facility or plant 
to which such data relate, and to make available for access or to 
deliver to the Government such data upon request by the contracting 
officer. If such data are limited rights data or restricted computer 
software. the rights of the Government in such data shall be governed 
solely by the provisions of paragraph (g) of this clause (``Rights in 
Limited Rights Data'') or paragraph (h) of this clause (``Rights in 
Restricted Computer Software''); and (v) The right to remove, cancel, 
correct, or ignore any markings not authorized by the terms of this 
Contract on any data furnished hereunder if, in response to a written 
inquiry by DOE concerning the propriety of the markings, the Contractor 
fails to respond thereto within 60 days or fails to substantiate the 
propriety of the markings. In either case DOE will notify the Contractor 
of the action taken.
    (2) The Contractor shall have:
    (i) The right to withhold limited rights data and restricted 
computer software unless otherwise provided in provisions of this 
clause;
    (ii) The right to use for its private purposes, subject to patent, 
security or other provisions of this Contract, data it first produces in 
the performance of this Contract, except for data in DOE's Uranium 
Enrichment Technology, including diffusion, centrifuge, and atomic vapor 
laser isotope separation, provided the data requirements of this 
Contract have been met as of the date of the private use of such data; 
and
    (iii) The right to assert copyright subsisting in scientific and 
technical articles as provided in paragraph (d) of this clause and the 
right to request permission to assert copyright subsisting in works 
other than scientific and technical articles as provided in paragraph 
(e) of this clause.
    (3) The Contractor agrees that for limited rights data or restricted 
computer software or other technical business or financial data in the 
form of recorded information which it receives from, or is given access 
to by DOE or a third party, including a DOE contractor or subcontractor, 
and for technical data or computer software it first produces under this 
Contract which is authorized to be marked by DOE, the Contractor shall 
treat such data in accordance with any restrictive legend contained 
thereon.
    (c) Copyright (General). (1) The Contractor agrees not to mark, 
register, or otherwise assert copyright in any data in a published or 
unpublished work, other than as set forth in paragraphs (d) and (e) of 
this clause.
    (2) Except for material to which the Contractor has obtained the 
right to assert copyright in accordance with either paragraph (d) or (e) 
of this clause, the Contractor agrees not to include in the data 
delivered under this Contract any material copyrighted by the Contractor 
and not to knowingly include any material copyrighted by others without 
first granting or obtaining at no cost a license therein for the benefit 
of the Government of the same scope as set forth in paragraph (d) of 
this clause. If the Contractor believes that such copyrighted

[[Page 492]]

material for which the license cannot be obtained must be included in 
the data to be delivered, rather than merely incorporated therein by 
reference, the Contractor shall obtain the written authorization of the 
contracting officer to include such material in the data prior to its 
delivery.
    (d) Copyrighted works (scientific and technical articles). (1) The 
Contractor shall have the right to assert, without prior approval of the 
contracting officer, copyright subsisting in scientific and technical 
articles composed under this contract or based on or containing data 
first produced in the performance of this Contract, and published in 
academic, technical or professional journals, symposia, proceedings, or 
similar works. When assertion of copyright is made, the Contractor shall 
affix the applicable copyright notice of 17 U.S.C. 401 or 402 and 
acknowledgment of Government sponsorship (including contract number) on 
the data when such data are delivered to the Government as well as when 
the data are published or deposited for registration as a published work 
in the U.S. Copyright Office. The Contractor grants to the Government, 
and others acting on its behalf, a nonexclusive, paid-up, irrevocable, 
world-wide license in such copyrighted data to reproduce, prepare 
derivative works, distribute copies to the public, and perform publicly 
and display publicly, by or on behalf of the Government.
    (2) The contractor shall mark each scientific or technical article 
first produced or composed under this Contract and submitted for journal 
publication or similar means of dissemination with a notice, similar in 
all material respects to the following, on the front reflecting the 
Government's non-exclusive, paid-up, irrevocable, world-wide license in 
the copyright.
    Notice: This manuscript has been authored by [insert the name of the 
Contractor] under Contract No. [insert the contract number] with the 
U.S. Department of Energy. The United States Government retains and the 
publisher, by accepting the article for publication, acknowledges that 
the United States Government retains a non-exclusive, paid-up, 
irrevocable, world-wide license to publish or reproduce the published 
form of this manuscript, or allow others to do so, for United States 
Government purposes.

                             (End of notice)

    (3) The title to the copyright of the original of unclassified 
graduate theses and the original of related unclassified scientific 
papers shall vest in the author thereof, subject to the right of DOE to 
retain duplicates of such documents and to use such documents for any 
purpose whatsoever without any claim on the part of the author or the 
contractor for additional compensation.
    (e) Copyrighted works (other than scientific and technical articles 
and data produced under a CRADA). The Contractor may obtain permission 
to assert copyright subsisting in technical data and computer software 
first produced by the Contractor in performance of this Contract, where 
the Contractor can show that commercialization would be enhanced by such 
copyright protection, subject to the following:
    (1) Contractor Request to Assert Copyright.
    (i) For data other than scientific and technical articles and data 
produced under a CRADA, the Contractor shall submit in writing to Patent 
Counsel its request to assert copyright in data first produced in the 
performance of this Contract pursuant to this clause. The right of the 
Contractor to copyright data first produced under a CRADA is as 
described in the individual CRADA. Each request by the Contractor must 
include:
    (A) The identity of the data (including any computer program) for 
which the Contractor requests permission to assert copyright, as well as 
an abstract which is descriptive of the data and is suitable for 
dissemination purposes, (B) The program under which it was funded, (C) 
Whether, to the best knowledge of the Contractor, the data is subject to 
an international treaty or agreement, (D) Whether the data is subject to 
export control, (E) A statement that the Contractor plans to 
commercialize the data in compliance with the clause of this contract 
entitled, ``Technology Transfer Mission,'' within five (5) years after 
obtaining permission to assert copyright or, on a case-by-case basis, a 
specified longer period where the Contractor can demonstrate that the 
ability to commercialize effectively is dependent upon such longer 
period, and (F) For data other than computer software, a statement 
explaining why the assertion of copyright is necessary to enhance 
commercialization and is consistent with DOE's dissemination 
responsibilities.
    (ii) For data that is developed using other funding sources in 
addition to DOE funding, the permission to assert copyright in 
accordance with this clause must also be obtained by the Contractor from 
all other funding sources prior to the Contractor's request to Patent 
Counsel. The request shall include the Contractor's certification or 
other documentation acceptable to Patent Counsel demonstrating such 
permission has been obtained.
    (iii) Permission for the Contractor to assert copyright in excepted 
categories of data as determined by DOE will be expressly withheld. Such 
excepted categories include data whose release (A) would be detrimental 
to national security, i.e., involve classified information or data or 
sensitive information under Section 148 of the Atomic Energy Act of 
1954, as amended, or are subject to export control for nonproliferation 
and other nuclear-related national security purposes, (B)

[[Page 493]]

would not enhance the appropriate transfer or dissemination and 
commercialization of such data, (C) would have a negative impact on U.S. 
industrial competitiveness, (D) would prevent DOE from meeting its 
obligations under treaties and international agreements, or (E) would be 
detrimental to one or more of DOE's programs. Additional excepted 
categories may be added by the Assistant General Counsel for Technology 
Transfer and Intellectual Property. Where data are determined to be 
under export control restriction, the Contractor may obtain permission 
to assert copyright subject to the provisions of this clause for 
purposes of limited commercialization in a manner that complies with 
export control statutes and applicable regulations. In addition, 
notwithstanding any other provision of this Contract, all data developed 
with Naval Reactors' funding and those data that are classified fall 
within excepted categories. The rights of the Contractor in data are 
subject to the disposition of data rights in the treaties and 
international agreements identified under this Contract as well as those 
additional treaties and international agreements which DOE may from time 
to time identify by unilateral amendment to the Contract; such amendment 
listing added treaties and international agreements is effective only 
for data which is developed after the date such treaty or international 
agreement is added to this Contract. Also, the Contractor will not be 
permitted to assert copyright in data in the form of various technical 
reports generated by the Contractor under the Contract without first 
obtaining the advanced written permission of the contracting officer.
    (2) DOE Review and Response to Contractor's Request. The Patent 
Counsel shall use its best efforts to respond in writing within 90 days 
of receipt of a complete request by the Contractor to assert copyright 
in technical data and computer software pursuant to this clause. Such 
response shall either give or withhold DOE's permission for the 
Contractor to assert copyright or advise the Contractor that DOE needs 
additional time to respond, and the reasons therefor.
    (3) Permission for Contractor to Assert Copyright.
    (i) For computer software, the Contractor shall furnish to the DOE 
designated, centralized software distribution and control point, the 
Energy Science and Technology Software Center, at the time permission to 
assert copyright is given under paragraph (e)(2) of this clause: (A) An 
abstract describing the software suitable for publication, (B) the 
source code for each software program, and (C) the object code and at 
least the minimum support documentation needed by a technically 
competent user to understand and use the software. The Patent Counsel, 
for good cause shown by the Contractor, may allow the minimum support 
documentation to be delivered within 60 days after permission to assert 
copyright is given or at such time the minimum support documentation 
becomes available. The Contractor acknowledges that the DOE designated 
software distribution and control point may provide a technical 
description of the software in an announcement identifying its 
availability from the copyright holder.
    (ii) Unless otherwise directed by the contracting officer, for data 
other than computer software to which the Contractor has received 
permission to assert copyright under paragraph (e)(2) of this clause 
above, the Contractor shall within sixty (60) days of obtaining such 
permission furnish to DOE's Office of Scientific and Technical 
Information (OSTI) a copy of such data as well as an abstract of the 
data suitable for dissemination purposes. The Contractor acknowledges 
that OSTI may provide an abstract of the data in an announcement to DOE, 
its contractors and to the public identifying its availability from the 
copyright holder.
    (iii) For a five year period or such other specified period as 
specifically approved by Patent Counsel beginning on the date the 
Contractor is given permission to assert copyright in data, the 
Contractor grants to the Government, and others acting on its behalf, a 
paid-up, nonexclusive, irrevocable worldwide license in such copyrighted 
data to reproduce, prepare derivative works and perform publicly and 
display publicly, by or on behalf of the Government. Upon request, the 
initial period may be extended after DOE approval. The DOE approval will 
be based on the standard that the work is still commercially available 
and the market demand is being met.
    (iv) After the period approved by Patent Counsel for application of 
the limited Government license described in paragraph (e)(3)(iii) of 
this clause, or if, prior to the end of such period(s), the Contractor 
abandons commercialization activities pertaining to the data to which 
the Contractor has been given permission to assert copyright, the 
Contractor grants to the Government, and others acting on its behalf, a 
paid-up, nonexclusive, irrevocable worldwide license in such copyrighted 
data to reproduce, distribute copies to the public, prepare derivative 
works, perform publicly and display publicly, and to permit others to do 
so.
    (v) Whenever the Contractor asserts copyright in data pursuant to 
this paragraph (e), the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402 on the copyrighted data and also an 
acknowledgment of the Government sponsorship and license rights of 
paragraphs (e)(3) (iii) and (iv) of this clause. Such action shall be 
taken when the data are delivered to the Government, published, licensed 
or deposited for registration as a published work in the U.S.

[[Page 494]]

Copyright Office. The acknowledgment of Government sponsorship and 
license rights shall be as follows: Notice: These data were produced by 
(insert name of Contractor) under Contract No. -------------- with the 
Department of Energy. For (period approved by DOE Patent Counsel) from 
(date permission to assert copyright was obtained), the Government is 
granted for itself and others acting on its behalf a nonexclusive, paid-
up, irrevocable worldwide license in this data to reproduce, prepare 
derivative works, and perform publicly and display publicly, by or on 
behalf of the Government. There is provision for the possible extension 
of the term of this license. Subsequent to that period or any extension 
granted, the Government is granted for itself and others acting on its 
behalf a nonexclusive, paid-up, irrevocable worldwide license in this 
data to reproduce, prepare derivative works, distribute copies to the 
public, perform publicly and display publicly, and to permit others to 
do so. The specific term of the license can be identified by inquiry 
made to Contractor or DOE. Neither the United States nor the United 
States Department of Energy, nor any of their employees, makes any 
warranty, express or implied, or assumes any legal liability or 
responsibility for the accuracy, completeness, or usefulness of any data 
, apparatus, product, or process disclosed, or represents that its use 
would not infringe privately owned rights.

                             (End of notice)

    (vi) With respect to any data to which the Contractor has received 
permission to assert copyright, the DOE has the right, during the five 
(5) year or specified longer period approved by Patent Counsel as 
provided for in paragraph (e) of this clause, to request the Contractor 
to grant a nonexclusive, partially exclusive or exclusive license in any 
field of use to a responsible applicant(s) upon terms that are 
reasonable under the circumstances, and if the Contractor refuses such 
request, to grant such license itself, if the DOE determines that the 
Contractor has not made a satisfactory demonstration that either it or 
its licensee(s) is actively pursuing commercialization of the data as 
set forth in subparagraph (e)(1)(A) of this clause. Before licensing 
under this subparagraph (vi), DOE shall furnish the Contractor a written 
request for the Contractor to grant the stated license, and the 
Contractor shall be allowed thirty (30) days (or such longer period as 
may be authorized by the contracting officer for good cause shown in 
writing by the Contractor) after such notice to show cause why the 
license should not be granted. The Contractor shall have the right to 
appeal the decision of the DOE to grant the stated license to the 
Invention Licensing Appeal Board as set forth in 10 CFR 781.65--
''Appeals.''
    (vii) No costs shall be allowable for maintenance of copyrighted 
data, primarily for the benefit of the Contractor and/or a licensee 
which exceeds DOE Program needs, except as expressly provided in writing 
by the contracting officer. The Contractor may use its net royalty 
income to effect such maintenance costs.
    (viii) At any time the Contractor abandons commercialization 
activities for data for which the Contractor has received permission to 
assert copyright in accordance with this clause, it shall advise OSTI 
and Patent Counsel and upon request assign the copyright to the 
Government so that the Government can distribute the data to the public.
    (4) The following notice may be placed on computer software prior to 
any publication and prior to the Contractor's obtaining permission from 
the Department of Energy to assert copyright in the computer software 
pursuant to paragraph (c)(3) of this section.
    Notice: This computer software was prepared by [insert the 
Contractor's name and the individual author], hereinafter the 
Contractor, under Contract [insert the Contract Number] with the 
Department of Energy (DOE). All rights in the computer software are 
reserved by DOE on behalf of the United States Government and the 
Contractor as provided in the Contract. You are authorized to use this 
computer software for Governmental purposes but it is not to be released 
or distributed to the public. NEITHER THE GOVERNMENT NOR THE CONTRACTOR 
MAKES ANY WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY LIABILITY FOR THE 
USE OF THIS SOFTWARE. This notice including this sentence must appear on 
any copies of this computer software.

                             (End of notice)

    (5) a similar notice can be used for data, other than computer 
software, upon approval of DOE Patent Counsel.
    (f) Subcontracting. (1) Unless otherwise directed by the contracting 
officer, the Contractor agrees to use in subcontracts in which technical 
data or computer software is expected to be produced or in subcontracts 
for supplies that contain a requirement for production or delivery of 
data in accordance with the policy and procedures of 48 CFR Subpart 27.4 
as supplemented by 48 CFR 927.401 through 927.409, the clause entitled, 
``Rights in Data-General'' at 48 CFR 52.227-14 modified in accordance 
with 927.409(a) and including Alternate V. Alternates II through IV of 
that clause may be included as appropriate with the prior approval of 
DOE Patent Counsel, and the Contractor shall not acquire rights in a 
subcontractor's limited rights data or restricted computer software, 
except through the use of Alternates II or III, respectively, without 
the prior approval of DOE Patent Counsel. The clause at 48 CFR 52.227-
16, Additional Data Requirements,

[[Page 495]]

shall be included in subcontracts in accordance with 48 CFR 927.409(h). 
The Contractor shall use instead the Rights in Data-Facilities clause at 
48 CFR 970.5227-1 in subcontracts, including subcontracts for related 
support services, involving the design or operation of any plants or 
facilities or specially designed equipment for such plants or facilities 
that are managed or operated under its contract with DOE.
    (2) It is the responsibility of the Contractor to obtain from its 
subcontractors technical data and computer software and rights therein, 
on behalf of the Government, necessary to fulfill the Contractor's 
obligations to the Government with respect to such data. In the event of 
refusal by a subcontractor to accept a clause affording the Government 
such rights, the Contractor shall:
    (i) Promptly submit written notice to the contracting officer 
setting forth reasons or the subcontractor's refusal and other pertinent 
information which may expedite disposition of the matter, and
    (ii) Not proceed with the subcontract without the written 
authorization of the contracting officer.
    (3) Neither the Contractor nor higher-tier subcontractors shall use 
their power to award subcontracts as economic leverage to acquire rights 
in a subcontractor's limited rights data and restricted computer 
software for their private use.
    (g) Rights in Limited Rights Data. Except as may be otherwise 
specified in this Contract as data which are not subject to this 
paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable nonexclusive, paid-up license by or for the 
Government, in any limited rights data of the Contractor specifically 
used in the performance of this Contract, provided, however, that to the 
extent that any limited rights data when furnished or delivered is 
specifically identified by the Contractor at the time of initial 
delivery to the Government or a representative of the Government, such 
data shall not be used within or outside the Government except as 
provided in the ``Limited Rights Notice'' set forth below. All such 
limited rights data shall be marked with the following ``Limited Rights 
Notice:''

                          Limited Rights Notice

    These data contain ``limited rights data,'' furnished under Contract 
No.------------ with the United States Department of Energy which may be 
duplicated and used by the Government with the express limitations that 
the ``limited rights data'' may not be disclosed outside the Government 
or be used for purposes of manufacture without prior permission of the 
Contractor, except that further disclosure or use may be made solely for 
the following purposes:
    (a) Use (except for manufacture) by support services contractors 
within the scope of their contracts;
    (b) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (c) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Contract is a part for information or use (except for manufacture) in 
connection with the work performed under their contracts and under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed;
    (d) This ``limited rights data'' may be used by the Government or 
others on its behalf for emergency repair or overhaul work under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed; and
    (e) Release to a foreign government, or instrumentality thereof, as 
the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work by 
such government.
    This Notice shall be marked on any reproduction of this data in 
whole or in part.

                             (End of notice)

    (h) Rights in Restricted Computer Software. (1) Except as may be 
otherwise specified in this Contract as data which are not subject to 
this paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up, license by or for the 
Government, in any restricted computer software of the Contractor 
specifically used in the performance of this Contract; provided, 
however, that to the extent that any restricted computer software when 
furnished or delivered is specifically identified by the Contractor at 
the time of initial delivery to the Government or a representative of 
the Government, such data shall not be used within or outside the 
Government except as provided in the ``Restricted Rights Notice'' set 
forth below. All such restricted computer software shall be marked with 
the following ``Restricted Rights Notice:''

                   Restricted Rights Notice--Long Form

    (a) This computer software is submitted with restricted rights under 
Department of Energy Contract No. ------. It may not be used, 
reproduced, or disclosed by the Government except as provided in 
paragraph (b) of this notice.
    (b) This computer software may be:
    (1) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;

[[Page 496]]

    (2) Used, copied for use, in a backup or replacement computer if any 
computer for which it was acquired is inoperative or is replaced;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that only the portions of the derivative software consisting of 
the restricted computer software are to be made subject to the same 
restricted rights; and
    (5) Disclosed to and reproduced for use by contractors under a 
service contract (of the type defined in 48 CFR 37.101) in accordance 
with subparagraphs (b)(1) through (4) of this Notice, provided the 
Government makes such disclosure or reproduction subject to these 
restricted rights.
    (c) Notwithstanding the foregoing, if this computer software has 
been published under copyright, it is licensed to the Government, 
without disclosure prohibitions, with the rights set forth in the 
restricted rights notice above.
    (d) This Notice shall be marked on any reproduction of this computer 
software, in whole or in part.

                             (End of notice)

    (2) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used in lieu thereof:

                  Restricted Rights Notice--Short Form

    Use, reproduction, or disclosure is subject to restrictions set 
forth in the Long Form Notice of DOE Contract No. ------ with (name of 
Contractor).

                             (End of notice)

    (3) If the software is embedded, or if it is commercially 
impractical to mark it with human readable text, then the symbol R and 
the clause date (mo/yr) in brackets or a box, a [R-mo/yr], may be used. 
This will be read to mean restricted computer software, subject to the 
rights of the Government as described in the Long Form Notice, in effect 
as of the date indicated next to the symbol. The symbol shall not be 
used to mark human readable material. In the event this Contract 
contains any variation to the rights in the Long Form Notice, then the 
contract number must also be cited.
    (4) If restricted computer software is delivered with the copyright 
notice of 17 U.S.C. 401, the software will be presumed to be published 
copyrighted computer software licensed to the Government without 
disclosure prohibitions and with unlimited rights, unless the Contractor 
includes the following statement with such copyright notice 
``Unpublished-rights reserved under the Copyright Laws of the United 
States.''
    (i) Relationship to patents. Nothing contained in this clause 
creates or is intended to imply a license to the Government in any 
patent or is intended to be construed as affecting the scope of any 
licenses or other rights otherwise granted to the Government under any 
patent.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.2704-3(b), where 
access to Category C-24 restricted data is contemplated in the 
performance of a contract the contracting officer shall insert the 
phrase ``and except Restricted Data in category C-24, 10 CFR part 725, 
in which DOE has reserved the right to receive reasonable compensation 
for the use of its inventions and discoveries, including related data 
and technology'' after ``laser isotope separation'' and before the comma 
in paragraph (b)(2)(ii) of the clause at 48 CFR 970.5227-2, Rights in 
Data--Technology Transfer, as appropriate.

                             (End of clause)



970.5227-3  Technology transfer mission.

    As prescribed in 48 CFR 970.2770-4(a), insert the following clause:

                 Technology Transfer Mission (AUG 2002)

    This clause has as its purpose implementation of the National 
Competitiveness Technology Transfer Act of 1989 (Sections 3131, 3132, 
3133, and 3157 of Pub. L. 101-189 and as amended by Pub. L. 103-160, 
Sections 3134 and 3160). The Contractor shall conduct technology 
transfer activities with a purpose of providing benefit from Federal 
research to U.S. industrial competitiveness.
    (a) Authority. (1) In order to ensure the full use of the results of 
research and development efforts of, and the capabilities of, the 
Laboratory, technology transfer, including Cooperative Research and 
Development Agreements (CRADAs), is established as a mission of the 
Laboratory consistent with the policy, principles and purposes of 
Sections 11(a)(1) and 12(g) of the Stevenson-Wydler Technology 
Innovation Act of 1980, as amended (15 U.S.C. 3710a); Section 3132(b) of 
Pub. L. 101-189, Sections 3134 and 3160 of Pub. L. 103-160, and of 
Chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.); Section 152 of 
the Atomic Energy Act of 1954, as amended (42 U.S.C. 2182); Section 9 of 
the Federal Nonnuclear Energy Research and Development Act of 1974 (42 
U.S.C. 5908); and Executive Order 12591 of April 10, 1987.

[[Page 497]]

    (2) In pursuing the technology transfer mission, the Contractor is 
authorized to conduct activities including but not limited to: 
identifying and protecting Intellectual Property made, created or 
acquired at or by the Laboratory; negotiating licensing agreements and 
assignments for Intellectual Property made, created or acquired at or by 
the Laboratory that the Contractor controls or owns; bailments; 
negotiating all aspects of and entering into CRADAs; providing technical 
consulting and personnel exchanges; conducting science education 
activities and reimbursable Work for Others (WFO); providing information 
exchanges; and making available laboratory or weapon production user 
facilities. It is fully expected that the Contractor shall use all of 
the mechanisms available to it to accomplish this technology transfer 
mission, including, but not limited to, CRADAs, user facilities, WFO, 
science education activities, consulting, personnel, assignments, and 
licensing in accordance with this clause.
    (b) Definitions. (1) Contractor's Laboratory Director means the 
individual who has supervision over all or substantially all of the 
Contractor's operations at the Laboratory.
    (2) Intellectual Property means patents, trademarks, copyrights, 
mask works, protected CRADA information, and other forms of comparable 
property rights protected by Federal Law and other foreign counterparts.
    (3) Cooperative Research and Development Agreement (CRADA) means any 
agreement entered into between the Contractor as operator of the 
Laboratory, and one or more parties including at least one non-Federal 
party under which the Government, through its laboratory, provides 
personnel, services, facilities, equipment, intellectual property, or 
other resources with or without reimbursement (but not funds to non-
Federal parties) and the non-Federal parties provide funds, personnel, 
services, facilities, equipment, intellectual property, or other 
resources toward the conduct of specified research or development 
efforts which are consistent with the missions of the Laboratory; except 
that such term does not include a procurement contract, grant, or 
cooperative agreement as those terms are used in sections 6303, 6304, 
and 6305 of Title 31 of the United States Code.
    (4) Joint Work Statement (JWS) means a proposal for a CRADA prepared 
by the Contractor, signed by the Contractor's Laboratory Director or 
designee which describes the following:
    (i) Purpose;
    (ii) Scope of Work which delineates the rights and responsibilities 
of the Government, the Contractor and Third Parties, one of which must 
be a non-Federal party;
    (iii) Schedule for the work; and
    (iv) Cost and resource contributions of the parties associated with 
the work and the schedule.
    (5) Assignment means any agreement by which the Contractor transfers 
ownership of Laboratory Intellectual Property, subject to the 
Government's retained rights.
    (6) Laboratory Biological Materials means biological materials 
capable of replication or reproduction, such as plasmids, 
deoxyribonucleic acid molecules, ribonucleic acid molecules, living 
organisms of any sort and their progeny, including viruses, prokaryote 
and eukaryote cell lines, transgenic plants and animals, and any 
derivatives or modifications thereof or products produced through their 
use or associated biological products, made under this contract by 
Laboratory employees or through the use of Laboratory research 
facilities.
    (7) Laboratory Tangible Research Product means tangible material 
results of research which
    (i) are provided to permit replication, reproduction, evaluation or 
confirmation of the research effort, or to evaluate its potential 
commercial utility;
    (ii) are not materials generally commercially available; and
    (iii) were made under this contract by Laboratory employees or 
through the use of Laboratory research facilities.
    (8) Bailment means any agreement in which the Contractor permits the 
commercial or non-commercial transfer of custody, access or use of 
Laboratory Biological Materials or Laboratory Tangible Research Product 
for a specified purpose of technology transfer or research and 
development, including without limitation evaluation, and without 
transferring ownership to the bailee.
    (c) Allowable Costs. (1) The Contractor shall establish and carry 
out its technology transfer efforts through appropriate organizational 
elements consistent with the requirements for an Office of Research and 
Technology Applications (ORTA) pursuant to paragraphs (b) and (c) of 
Section 11 of the Stevenson-Wydler Technology Innovation Act of 1980, as 
amended (15 U.S.C. 3710). The costs associated with the conduct of 
technology transfer through the ORTA including activities associated 
with obtaining, maintaining, licensing, and assigning Intellectual 
Property rights, increasing the potential for the transfer of 
technology, and the widespread notice of technology transfer 
opportunities, shall be deemed allowable provided that such costs meet 
the other requirements of the allowable costs provisions of this 
Contract. In addition to any separately designated funds, these costs in 
any fiscal year shall not exceed an amount equal to 0.5 percent of the 
operating funds included in the Federal research and development budget

[[Page 498]]

(including Work For Others) of the Laboratory for that fiscal year 
without written approval of the contracting officer.
    (2) The Contractor's participation in litigation to enforce or 
defend Intellectual Property claims incurred in its technology transfer 
efforts shall be as provided in the clause entitled ``Insurance--
Litigation and Claims'' of this contract.
    (d) Conflicts of Interest--Technology Transfer. The Contractor shall 
have implementing procedures that seek to avoid employee and 
organizational conflicts of interest, or the appearance of conflicts of 
interest, in the conduct of its technology transfer activities. These 
procedures shall apply to other persons participating in Laboratory 
research or related technology transfer activities. Such implementing 
procedures shall be provided to the contracting officer for review and 
approval within sixty (60) days after execution of this contract. The 
contracting officer shall have thirty (30) days thereafter to approve or 
require specific changes to such procedures. Such implementing 
procedures shall include procedures to:
    (1) Inform employees of and require conformance with standards of 
conduct and integrity in connection with the CRADA activity in 
accordance with the provisions of paragraph (n)(5) of this clause;
    (2) Review and approve employee activities so as to avoid conflicts 
of interest arising from commercial utilization activities relating to 
Contractor-developed Intellectual Property;
    (3) Conduct work performed using royalties so as to avoid 
interference with or adverse effects on ongoing DOE projects and 
programs;
    (4) Conduct activities relating to commercial utilization of 
Contractor-developed Intellectual Property so as to avoid interference 
with or adverse effects on user facility or WFO activities of the 
Contractor;
    (5) Conduct DOE-funded projects and programs so as to avoid the 
appearance of conflicts of interest or actual conflicts of interest with 
non-Government funded work;
    (6) Notify the contracting officer with respect to any new work to 
be performed or proposed to be performed under the Contract for DOE or 
other Federal agencies where the new work or proposal involves 
Intellectual Property in which the Contractor has obtained or intends to 
request or elect title;
    (7) Except as provided elsewhere in this Contract, obtain the 
approval of the contracting officer for any licensing of or assignment 
of title to Intellectual Property rights by the Contractor to any 
business or corporate affiliate of the Contractor;
    (8) Obtain the approval of the contracting officer prior to any 
assignment, exclusive licensing, or option for exclusive licensing, of 
Intellectual Property to any individual who has been a Laboratory 
employee within the previous two years or to the company in which the 
individual is a principal; and
    (9) Notify non-Federal sponsors of WFO activities, or non-Federal 
users of user facilities, of any relevant Intellectual Property interest 
of the Contractor prior to execution of WFOs or user agreements.
    (10) Notify DOE prior to evaluating a proposal by a third party or 
DOE, when the subject matter of the proposal involves an elected or 
waived subject invention under this contract or one in which the 
Contractor intends to elect to retain title under this contract.
    (e) Fairness of Opportunity. In conducting its technology transfer 
activities, the Contractor shall prepare procedures and take all 
reasonable measures to ensure widespread notice of availability of 
technologies suited for transfer and opportunities for exclusive 
licensing and joint research arrangements. The requirement to widely 
disseminate the availability of technology transfer opportunities does 
not apply to a specific application originated outside of the Laboratory 
and by entities other than the Contractor.
    (f) U.S. Industrial Competitiveness. (1) In the interest of 
enhancing U.S. Industrial Competitiveness, the Contractor shall, in its 
licensing and assignments of Intellectual Property, give preference in 
such a manner as to enhance the accrual of economic and technological 
benefits to the U.S. domestic economy. The Contractor shall consider the 
following factors in all of its licensing and assignment decisions 
involving Laboratory intellectual property where the Laboratory obtains 
rights during the course of the Contractor's operation of the Laboratory 
under this contract:
    (i) whether any resulting design and development will be performed 
in the United States and whether resulting products, embodying parts, 
including components thereof, will be substantially manufactured in the 
United States; or
    (ii) (A) whether the proposed licensee or assignee has a business 
unit located in the United States and whether significant economic and 
technical benefits will flow to the United States as a result of the 
license or assignment agreement; and
    (B) in licensing any entity subject to the control of a foreign 
company or government, whether such foreign government permits United 
States agencies, organizations or other persons to enter into 
cooperative research and development agreements and licensing 
agreements, and has policies to protect United States Intellectual 
Property rights.
    (2) If the Contractor determines that neither of the conditions in 
paragraphs (f)(1)(i) or (ii) of this clause are likely to be fulfilled, 
the Contractor, prior to entering into such an agreement, must obtain 
the approval of

[[Page 499]]

the contracting officer. The contracting officer shall act on any such 
requests for approval within thirty (30) days.
    (3) The Contractor agrees to be bound by the provisions of 35 U.S.C. 
204 (Preference for United States industry).
    (g) Indemnity--Product Liability. In entering into written 
technology transfer agreements, including but not limited to, research 
and development agreements, licenses, assignments and CRADAs, the 
Contractor agrees to include in such agreements a requirement that the 
U.S. Government and the Contractor, except for any negligent acts or 
omissions of the Contractor, be indemnified for all damages, costs, and 
expenses, including attorneys' fees, arising from personal injury or 
property damage occurring as a result of the making, using or selling of 
a product, process or service by or on behalf of the Participant, its 
assignees or licensees which was derived from the work performed under 
the agreement. The Contractor shall identify and obtain the approval of 
the contracting officer for any proposed exceptions to this requirement 
such as where State or local law expressly prohibit the Participant from 
providing indemnification or where the research results will be placed 
in the public domain.
    (h) Disposition of Income. (1) Royalties or other income earned or 
retained by the Contractor as a result of performance of authorized 
technology transfer activities herein shall be used by the Contractor 
for scientific research, development, technology transfer, and education 
at the Laboratory, consistent with the research and development mission 
and objectives of the Laboratory and subject to Section 12(b)(5) of the 
Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 
U.S.C. 3710a(b)(5)) and Chapter 38 of the Patent Laws (35 U.S.C. 200 et 
seq.) as amended through the effective date of this contract award or 
modification. If the net amounts of such royalties and income received 
from patent licensing after payment of patenting costs, licensing costs, 
payments to inventors and other expenses incidental to the 
administration of Subject Inventions during any fiscal year exceed 5 
percent of the Laboratory's budget for that fiscal year, 75 percent of 
such excess amounts shall be paid to the Treasury of the United States, 
and the remaining amount of such excess shall be used by the Contractor 
for the purposes as described above in this paragraph. Any inventions 
arising out of such scientific research and development activities shall 
be deemed to be Subject Inventions under the Contract.
    (2) The Contractor shall include as a part of its annual Laboratory 
Institutional Plan or other such annual document a plan setting out 
those uses to which royalties and other income received as a result of 
performance of authorized technology transfer activities herein will be 
applied at the Laboratory, and at the end of the year, provide a 
separate accounting for how the funds were actually used. Under no 
circumstances shall these royalties and income be used for an illegal 
augmentation of funds furnished by the U.S. Government.
    (3) The Contractor shall establish subject to the approval of the 
contracting officer a policy for making awards or sharing of royalties 
with Contractor employees, other coinventors and coauthors, including 
Federal employee coinventors when deemed appropriate by the contracting 
officer.
    (i) Transfer to Successor Contractor. In the event of termination or 
upon the expiration of this Contract, any unexpended balance of income 
received for use at the Laboratory shall be transferred, at the 
contracting officer's request, to a successor contractor, or in the 
absence of a successor contractor, to such other entity as designated by 
the contracting officer. The Contractor shall transfer title, as one 
package, to the extent the Contractor retains title, in all patents and 
patent applications, licenses, accounts containing royalty revenues from 
such license agreements, including equity positions in third party 
entities, and other Intellectual Property rights which arose at the 
Laboratory, to the successor contractor or to the Government as directed 
by the contracting officer.
    (j) Technology Transfer Affecting the National Security. (1) The 
Contractor shall notify and obtain the approval of the contracting 
officer, prior to entering into any technology transfer arrangement, 
when such technology or any part of such technology is classified or 
sensitive under Section 148 of the Atomic Energy Act (42 U.S.C. 2168). 
Such notification shall include sufficient information to enable DOE to 
determine the extent that commercialization of such technology would 
enhance or diminish security interests of the United States, or diminish 
communications within DOE's nuclear weapon production complex. DOE shall 
use its best efforts to complete its determination within sixty (60) 
days of the Contractor's notification, and provision of any supporting 
information, and DOE shall promptly notify the Contractor as to whether 
the technology is transferable.
    (2) The Contractor shall include in all of its technology transfer 
agreements with third parties, including, but not limited to, CRADAs, 
licensing agreements and assignments, notice to such third parties that 
the export of goods and/or Technical Data from the United States may 
require some form of export control license or other authority from the 
U.S. Government and that failure to obtain such export control license 
may result in criminal liability under U.S. laws.

[[Page 500]]

    (3) For other than fundamental research as defined in National 
Security Decision Directive 189, the Contractor is responsible to 
conduct internal export control reviews and assure that technology is 
transferred in accordance with applicable law.
    (k) Records. The Contractor shall maintain records of its technology 
transfer activities in a manner and to the extent satisfactory to the 
DOE and specifically including, but not limited to, the licensing 
agreements, assignments and the records required to implement the 
requirements of paragraphs (e), (f), and (h) of this clause and shall 
provide reports to the contracting officer to enable DOE to maintain the 
reporting requirements of Section 12(c)(6) of the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended (15 U.S.C. 3710a(c)(6)). 
Such reports shall be made annually in a format to be agreed upon 
between the Contractor and DOE and in such a format which will serve to 
adequately inform DOE of the Contractor's technology transfer activities 
while protecting any data not subject to disclosure under the Rights in 
Technical Data clause and paragraph (n) of this clause. Such records 
shall be made available in accordance with the clauses of this Contract 
pertaining to inspection, audit and examination of records.
    (l) Reports to Congress. To facilitate DOE's reporting to Congress, 
the Contractor is required to submit annually to DOE a technology 
transfer plan for conducting its technology transfer function for the 
upcoming year, including plans for securing Intellectual Property rights 
in Laboratory innovations with commercial promise and plans for managing 
such innovations so as to benefit the competitiveness of United States 
industry. This plan shall be provided to the contracting officer on or 
before October 1st of each year.
    (m) Oversight and Appraisal. The Contractor is responsible for 
developing and implementing effective internal controls for all 
technology transfer activities consistent with the audit and record 
requirements of this Contract. Laboratory Contractor performance in 
implementing the technology transfer mission and the effectiveness of 
the Contractor's procedures will be evaluated by the contracting officer 
as part of the annual appraisal process, with input from the cognizant 
Secretarial Officer or program office.
    (n) Technology Transfer Through Cooperative Research and Development 
Agreements. Upon approval of the contracting officer and as provided in 
a DOE approved Joint Work Statement (JWS), the Laboratory Director, or 
designee, may enter into CRADAs on behalf of the DOE subject to the 
requirements set forth in this paragraph.
    (1) Review and Approval of CRADAs. (i) Except as otherwise directed 
in writing by the contracting officer, each JWS shall be submitted to 
the contracting officer for approval. The Contractor's Laboratory 
Director or designee shall provide a program mission impact statement 
and shall include an impact statement regarding related Intellectual 
Property rights known by the Contractor to be owned by the Government to 
assist the contracting officer in the approval determination.
    (ii) The Contractor shall also include (specific to the proposed 
CRADA), a statement of compliance with the Fairness of Opportunity 
requirements of paragraph (e) of this clause.
    (iii) Within thirty (30) days after submission of a JWS or proposed 
CRADA, the contracting officer shall approve, disapprove or request 
modification to the JWS or CRADA. The contracting officer shall provide 
a written explanation to the Contractor's Laboratory Director or 
designee of any disapproval or requirement for modification of a JWS or 
proposed CRADA.
    (iv) Except as otherwise directed in writing by the contracting 
officer, the Contractor shall not enter into, or begin work under, a 
CRADA until approval of the CRADA has been granted by the contracting 
officer. The Contractor may submit its proposed CRADA to the contracting 
officer at the time of submitting its proposed JWS or any time 
thereafter.
    (2) Selection of Participants. The Contractor's Laboratory Director 
or designee in deciding what CRADA to enter into shall:
    (i) Give special consideration to small business firms, and 
consortia involving small business firms;
    (ii) Give preference to business units located in the United States 
which agree that products or processes embodying Intellectual Property 
will be substantially manufactured or practiced in the United States 
and, in the case of any industrial organization or other person subject 
to the control of a foreign company or government, take into 
consideration whether or not such foreign government permits United 
States agencies, organizations, or other persons to enter into 
cooperative research and development agreements and licensing 
agreements;
    (iii) Provide Fairness of Opportunity in accordance with the 
requirements of paragraph (e) of this clause; and
    (iv) Give consideration to the Conflicts of Interest requirements of 
paragraph (d) of this clause.
    (3) Withholding of Data. (i) Data that is first produced as a result 
of research and development activities conducted under a CRADA and that 
would be a trade secret or commercial or financial data that would be 
privileged or confidential, if such data had been obtained from a non-
Federal third party, may be protected from disclosure under the Freedom 
of Information Act as provided in the Stevenson-Wydler Technology 
Innovation Act of 1980, as amended (15 U.S.C. 3710a(c)(7)) for a period 
as agreed

[[Page 501]]

in the CRADA of up to five (5)years from the time the data is first 
produced. The DOE shall cooperate with the Contractor in protecting such 
data.
    (ii) Unless otherwise expressly approved by the contracting officer 
in advance for a specific CRADA, the Contractor agrees, at the request 
of the contracting officer, to transmit such data to other DOE 
facilities for use by DOE or its Contractors by or on behalf of the 
Government. When data protected pursuant to paragraph (n)(3)(i) of this 
clause is so transferred, the Contractor shall clearly mark the data 
with a legend setting out the restrictions against private use and 
further dissemination, along with the expiration date of such 
restrictions.
    (iii) In addition to its authority to license Intellectual Property, 
the Contractor may enter into licensing agreements with third parties 
for data developed by the Contractor under a CRADA subject to other 
provisions of this Contract. However, the Contractor shall neither use 
the protection against dissemination nor the licensing of data as an 
alternative to the submittal of invention disclosures which include data 
protected pursuant to paragraph (n)(3)(i) of this clause.
    (4) Work For Others and User Facility Programs. (i) WFO and User 
Facility Agreements (UFAs) are not CRADAs and will be available for use 
by the Contractor in addition to CRADAs for achieving utilization of 
employee expertise and unique facilities for maximizing technology 
transfer. The Contractor agrees form prospective CRADA participants, 
which are intending to substantially pay full cost recovery for the 
effort under a proposed CRADA, of the availability of alternative forms 
of agreements, i.e., WFO and UFA, and of the Class Patent Waiver 
provisions associated therewith.
    (ii) Where the Contractor believes that the transfer of technology 
to the U.S. domestic economy will benefit from, or other equity 
considerations dictate, an arrangement other than the Class Waiver of 
patent rights to the sponsor in WFO and UFAs, a request may be made to 
the contracting officer for an exception to the Class Waivers.
    (iii) Rights to inventions made under agreements other than funding 
agreements with third parties shall be governed by the appropriate 
provisions incorporated, with DOE approval, in such agreements, and the 
provisions in such agreements take precedence over any disposition of 
rights contained in this Contract. Disposition of rights under any such 
agreement shall be in accordance with any DOE class waiver (including 
Work for Others and User Class Waivers) or individually negotiated 
waiver which applies to the agreement.
    (5) Conflicts of Interest. (i) Except as provided in paragraph 
(n)(5)(iii) of this clause, the Contractor shall assure that no employee 
of the Contractor shall have a substantial role (including an advisory 
role) in the preparation, negotiation, or approval of a CRADA, if, to 
such employee's knowledge:
    (A) Such employee, or the spouse, child, parent, sibling, or partner 
of such employee, or an organization (other than the Contractor) in 
which such employee serves as an officer, director, trustee, partner, or 
employee--
    (1) holds financial interest in any entity, other than the 
Contractor, that has a substantial interest in the preparation, 
negotiation, or approval of the CRADA;
    (2) receives a gift or gratuity from any entity, other than the 
Contractor, that has a substantial interest in the preparation, 
negotiation, or approval of the CRADA; or
    (B) A financial interest in any entity, other than the Contractor, 
that has a substantial interest in the preparation, negotiation, or 
approval of the CRADA, is held by any person or organization with whom 
such employee is negotiating or has any arrangement concerning 
prospective employment.
    (ii) The Contractor shall require that each employee of the 
Contractor who has a substantial role (including an advisory role) in 
the preparation, negotiation, or approval of a CRADA certify through the 
Contractor to the contracting officer that the circumstances described 
in paragraph (n)(5)(i) of this clause do not apply to that employee.
    (iii) The requirements of paragraphs (n)(5)(i) and (n)(5)(ii) of 
this clause shall not apply in a case where the contracting officer is 
advised by the Contractor in advance of the participation of an employee 
described in those paragraphs in the preparation, negotiation or 
approval of a CRADA of the nature of and extent of any financial 
interest described in paragraph (n)(5)(i) of this clause, and the 
contracting officer determines that such financial interest is not so 
substantial as to be considered likely to affect the integrity of the 
Contractor employee's participation in the process of preparing, 
negotiating, or approving the CRADA.
    (o) Technology Transfer in Other Cost-Sharing Agreements. In 
conducting research and development activities in cost-shared agreements 
not covered by paragraph (n) of this clause, the Contractor, with prior 
written permission of the contracting officer, may provide for the 
withholding of data produced thereunder in accordance with the 
applicable provisions of paragraph (n)(3) of this clause.

                             (End of clause)

    Alternate I (AUG 2002). As prescribed in 48 CFR 970.2770-4(b), add 
the following definition under paragraph (b) and the following new 
paragraph (p):

    (b)(8) Privately funded technology transfer means the prosecuting, 
maintaining, licensing, and marketing of inventions which are

[[Page 502]]

not owned by the Government (and not related to CRADAs) when such 
activities are conducted entirely without the use of Government funds.
    (p) Technology Partnership Ombudsman.
    (1) The Contractor agrees to establish a position to be known as 
``Technology Partnership Ombudsman,'' to help resolve complaints from 
outside organizations regarding the policies and actions of the 
contractor with respect to technology partnerships (including CRADAs), 
patents owned by the contractor for inventions made at the laboratory, 
and technology licensing.
    (2) The Ombudsman shall be a senior official of the Contactor's 
laborratory staff, who is not involved in day-to-day technology 
partnerships, patents or technology licensing, or, if appointed from 
outside the laboratory or facility, shall function as such senior 
official.
    (3) The duties of the Technology Partnership Ombudsman shall 
include:
    (i) Serving as the focal point for assisting the public and industry 
in resolving complaints and disputes with the laboratory or facility 
regarding technology partnerships, patents, and technology licensing;
    (ii) Promoting the use of collaborative alternative dispute 
resolution techniques such as mediation to facilitate the speedy and low 
cost resolution of complaints and disputes, when appropriate; and
    (iii) Submitting a quarterly report, in a format provided by DOE, to 
the Secretary of Energy, the Administrator for Nuclear Security, the 
Director of the DOE Office of Dispute Resolution, and the Contracting 
Officer concerning the number and nature of complaints and disputes 
raised, along with the Ombudsman's assessment of their resolution, 
consistent with the protection of confidential and sensitive 
information.
    (q) Nothing in paragraphs (c) Allowable Costs, (e) Fairness of 
Opportunity, (f) U.S. Industrial Competitiveness, (g) Indemnity--Product 
Liability, (h) Disposition of Income, and (i) Transfer to Successor 
Contractor of this clause are intended to apply to the contractor's 
privately funded technology transfer activities if such privately funded 
activities are addressed elsewhere in the contract.

    Alternate II (DEC 2000). As prescribed in 48 CFR 970.2770-4(c), the 
contracting officer shall substitute the phrase ``weapon production 
facility'' wherever the word ``laboratory'' appears in the clause.

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48570, July 25, 2002]



970.5227-4  Authorization and consent.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-1:

                  Authorization and Consent (AUG 2002)

    (a) The Government authorizes and consents to all use and 
manufacture of any invention described in and covered by a United States 
patent in the performance of this contract or any subcontract at any 
tier.
    (b) If the Contractor is sued for copyright infringement or 
anticipates the filing of such a lawsuit, the Contractor may request 
authorization and consent to copy a copyrighted work from the 
contracting officer. Programmatic necessity is a major consideration for 
DOE in determining whether to grant such request.
    (c)(1) The Contractor agrees to include, and require inclusion of, 
the Authorization and Consent clause at 52.227-1, without Alternate 1, 
but suitably modified to identify the parties, in all subcontracts 
expected to exceed $100,000 at any tier for supplies or services, 
including construction, architect-engineer services, and materials, 
supplies, models, samples, and design or testing services.
    (2) The Contractor agrees to include, and require inclusion of, 
paragraph (a) of this Authorization and Consent clause, suitably 
modified to identify the parties, in all subcontracts at any tier for 
research and development activities expected to exceed $100,000.
    (3) Omission of an authorization and consent clause from any 
subcontract, including those valued less than $100,000 does not affect 
this authorization and consent.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48570, July 25, 2002]



970.5227-5  Notice and assistance regarding patent and copyright infringement.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-2:

 Notice and Assistance Regarding Patent and Copyright Infringement (DEC 
                                  2000)

    (a) The Contractor shall report to the Contracting Officer promptly 
and in reasonable written detail, each notice or claim of patent or 
copyright infringement based on the performance of this contract of 
which the Contractor has knowledge.
    (b) If any person files a claim or suit against the Government on 
account of any alleged patent or copyright infringement

[[Page 503]]

arising out of the performance of this contract or out of the use of any 
supplies furnished or work or services performed hereunder, the 
Contractor shall furnish to the Government, when requested by the 
Contracting Officer, all evidence and information in possession of the 
Contractor pertaining to such suit or claim. Except where the Contractor 
has agreed to indemnify the Government, the Contractor shall furnish 
such evidence and information at the expense of the Government.
    (c) The Contractor agrees to include, and require inclusion of, this 
clause suitably modified to identify the parties, in all subcontracts at 
any tier expected to exceed $100,000.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48570, July 25, 2002]



970.5227-6  Patent indemnity--subcontracts.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-3:

                Patent Indemnity--Subcontracts (DEC 2000)

    Except as otherwise authorized by the Contracting Officer, the 
Contractor shall obtain indemnification of the Government and its 
officers, agents, and employees against liability, including costs, for 
infringement of any United States patent (except a patent issued upon an 
application that is now or may hereafter be withheld from issue pursuant 
to a secrecy order by the Government) from Contractor's subcontractors 
for any contract work subcontracted in accordance with FAR 48 CFR 
52.227-3.

                             (End of clause)



970.5227-7  Royalty information.

    Insert the following provision in solicitations in accordance with 
970.2702-4:

                     Royalty Information (DEC 2000)

    (a) Cost or charges for royalties. If the response to this 
solicitation contains costs or charges for royalties totaling more than 
$250, the following information shall be included in the response 
relating to each separate item of royalty or license fee:
    (1) Name and address of licensor;
    (2) Date of license agreement;
    (3) Patent numbers, patent application serial numbers, or other 
basis on which the royalty is payable;
    (4) Brief description, including any part or model numbers of each 
contract item or component on which the royalty is payable;
    (5) Percentage or dollar rate of royalty per unit;
    (6) Unit price of contract item;
    (7) Number of units; and
    (8) Total dollar amount of royalties.
    (b) Copies of current licenses. In addition, if specifically 
requested by the Contracting Officer before execution of the contract, 
the offeror shall furnish a copy of the current license agreement and an 
identification of applicable claims of specific patents or other basis 
upon which the royalty may be payable.

                           (End of provision)



970.5227-8  Refund of royalties.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-4:

                     Refund of Royalties (AUG 2002)

    (a) During performance of this Contract, if any royalties are 
proposed to be charged to the Government as costs under this Contract, 
the Contractor agrees to submit for approval of the Contracting Officer, 
prior to the execution of any license, the following information 
relating to each separate item of royalty:
    (1) Name and address of licensor;
    (2) Patent numbers, patent application serial numbers, or other 
basis on which the royalty is payable;
    (3) Brief description, including any part or model numbers of each 
contract item or component on which the royalty is payable;
    (4) Percentage or dollar rate of royalty per unit;
    (5) Unit price of contract item;
    (6) Number of units;
    (7) Total dollar amount of royalties; and
    (8) A copy of the proposed license agreement.
    (b) If specifically requested by the Contracting Officer, the 
Contractor shall furnish a copy of any license agreement entered into 
prior to the effective date of this clause and an identification of 
applicable claims of specific patents or other basis upon which 
royalties are payable.
    (c) The term ``royalties'' as used in this clause refers to any 
costs or charges in the nature of royalties, license fees, patent or 
license amortization costs, or the like, for the use of or for rights in 
patents and patent applications that are used in the performance of this 
contract or any subcontract hereunder.
    (d) The Contractor shall furnish to the Contracting Officer, 
annually upon request, a statement of royalties paid or required to

[[Page 504]]

be paid in connection with performing this Contract and subcontracts 
hereunder.
    (e) For royalty payments under licenses entered into after the 
effective date of this Contract, costs incurred for royalties proposed 
under this paragraph shall be allowable only to the extent that such 
royalties are approved by the Contracting Officer.If the Contracting 
Officer determines that existing or proposed royalty payments are 
inappropriate, any payments subsequent to such determination shall be 
allowable only to the extent approved by the Contracting Officer.
    (f) Regardless of prior DOE approval of any individual payments or 
royalties, DOE may contest at any time the enforceability, validity, 
scope of, or title to a patent for which the Contractor makes a royalty 
or other payment.
    (g) If at any time within 3 years after final payment under this 
contract, the Contractor for any reason is relieved in whole or in part 
from the payment of any royalties to which this clause applies, the 
Contractor shall promptly notify the Contracting Officer of that fact 
and shall promptly reimburse the Government for any refunds received or 
royalties paid after having received notice of such relief.
    (h) The Contractor agrees to include, and require inclusion of, this 
clause, including this paragraph (h), suitably modified to identify the 
parties in any subcontract at any tier in which the amount of royalties 
reported during negotiation of the subcontract exceeds $250.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48570, July 25, 2002]



970.5227-9  Notice of right to request patent waiver.

    Insert the following provision in solicitations in accordance with 
970.2704-6:

           Notice of Right To Request Patent Waiver (DEC 2000)

    Offerors have the right to request a waiver of all or any part of 
the rights of the United States in inventions conceived or first 
actually reduced to practice in performance of the contract, in advance 
of or within 30 days after the effective date of contracting. If such 
advance waiver is not requested or the request is denied, the Contractor 
has a continuing right under the contract to request a waiver of the 
rights of the Government in identified inventions, i.e., individual 
inventions conceived or first actually reduced to practice in 
performance of the contract. Contractors that are domestic small 
businesses and domestic nonprofit organizations may not need a waiver 
and will have included in their contracts a patent clause reflecting 
their right to elect title to subject inventions pursuant to the Bayh-
Dole Act (35 U.S.C. 200 et seq.).

                           (End of provision)



970.5227-10  Patent rights--management and operating contracts, nonprofit 
organization or small business firm contractor.

    As prescribed in 970.2703-1(b)(2), insert the following clause:

Patent Rights-Management and Operating Contracts, Nonprofit Organization 
              or Small Business Firm Contractor (DEC 2000)

    (a) Definitions.
    (1) DOE licensing regulations means the Department of Energy patent 
licensing regulations at 10 CFR Part 781.
    (2) Exceptional circumstance subject invention means any subject 
invention in a technical field or related to a task determined by the 
Department of Energy to be subject to an exceptional circumstance under 
35 U.S.C. 202(a)(ii) and in accordance with 37 CFR 401.3(e).
    (3) Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under Title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
    (4) Made when used in relation to any invention means the conception 
or first actual reduction to practice of such invention.
    (5) Nonprofit organization means a university or other institution 
of higher education or an organization of the type described in section 
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and 
exempt from taxation under section 501(a) of the Internal Revenue Code 
(26 U.S.C. 501(a)) or any nonprofit scientific or educational 
organization qualified under a state nonprofit organization statute.
    (6) Patent Counsel means the Department of Energy (DOE) Patent 
Counsel assisting the DOE contracting activity.
    (7) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or method; 
or to operate, in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    (8) Small business firm means a small business concern as defined at 
section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing

[[Page 505]]

regulations of the Administrator of the Small Business Administration. 
For the purpose of this clause, the size standards for small business 
concerns involved in Government procurement and subcontracting at 13 CFR 
121.3-8 and 13 CFR 121.3-12, respectively, are used.
    (9) Subject Invention means any invention of the contractor 
conceived or first actually reduced to practice in the performance of 
work under this contract, provided that in the case of a variety of 
plant, the date of determination (as defined in section 41(d) of the 
Plant Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur during 
the period of contract performance.
    (b) Allocation of Principal Rights.
    (1) Retention of title by the Contractor. Except for exceptional 
circumstance subject inventions, the contractor may retain the entire 
right, title, and interest throughout the world to each subject 
invention subject to the provisions of this clause and 35 U.S.C. 203. 
With respect to any subject invention in which the Contractor retains 
title, the Federal government shall have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the United States the subject invention 
throughout the world.
    (2) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor in a determination of 
exceptional circumstances or granted to a contractor through a 
determination of greater rights in accordance with subparagraph (b)(4) 
of this clause, the Contractor does not have a right to retain title to 
any exceptional circumstance subject inventions and agrees to assign to 
the Government the entire right, title, and interest, throughout the 
world, in and to any exceptional circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions:
    (A) uranium enrichment technology;
    (B) storage and disposal of civilian high-level nuclear waste and 
spent fuel technology; and
    (C) national security technologies classified or sensitive under 
Section 148 of the Atomic Energy Act (42 U.S.C. 2168).
    (ii) Inventions made under any agreement, contract or subcontract 
related to the following are exceptional circumstance subject 
inventions:
    (A) DOE Steel Initiative and Metals Initiative;
    (B) U.S. Advanced Battery Consortium; and
    (C) any funding agreement which is funded in part by the Electric 
Power Research Institute (EPRI) or the Gas Research Institute (GRI).
    (iii) DOE reserves the right to unilaterally amend this contract to 
modify, by deletion or insertion, technical fields, tasks, or other 
classifications for the purpose of determining DOE exceptional 
circumstance subject inventions.
    (3) Treaties and international agreements. Any rights acquired by 
the Contractor in subject inventions are subject to any disposition of 
right, title, or interest in or to subject inventions provided for in 
treaties or international agreements identified at Appendix [Insert 
Reference] to this contract. DOE reserves the right to unilaterally 
amend this contract to identify specific treaties or international 
agreements entered into or to be entered into by the Government after 
the effective date of this contract and to effectuate those license or 
other rights which are necessary for the Government to meet its 
obligations to foreign governments, their nationals and international 
organizations under such treaties or international agreements with 
respect to subject inventions made after the date of the amendment.
    (4) Contractor request for greater rights in exceptional 
circumstance subject inventions. The Contractor may request rights 
greater than allowed by the exceptional circumstance determination in an 
exceptional circumstance subject invention by submitting such a request 
in writing to Patent Counsel at the time the exceptional circumstance 
subject invention is disclosed to DOE or within eight (8) months after 
conception or first actual reduction to practice of the exceptional 
circumstance subject invention, whichever occurs first, unless a longer 
period is authorized in writing by the Patent Counsel for good cause 
shown in writing by the Contractor. DOE may, in its discretion, grant or 
refuse to grant such a request by the Contractor.
    (5) Contractor employee-inventor rights. If the Contractor does not 
elect to retain title to a subject invention or does not request greater 
rights in an exceptional circumstance subject invention, a Contractor 
employee-inventor, after consultation with the Contractor and with 
written authorization from the Contractor in accordance with 10 CFR 
784.9(b)(4), may request greater rights, including title, in the subject 
invention or the exceptional circumstance invention from DOE, and DOE 
may, in its discretion, grant or refuse to grant such a request by the 
Contractor employee-inventor.
    (6) Government assignment of rights in Government employees' subject 
inventions. If a Government employee is a joint inventor of a subject 
invention or of an exceptional circumstance subject invention to which 
the Contractor has rights, the Government may assign or refuse to assign 
to the Contractor any rights in the subject invention or exceptional 
circumstance subject invention acquired by the Government from the 
Government employee, in accordance with 48 CFR

[[Page 506]]

27.304-1(d). The rights assigned to the Contractor are subject to any 
provision of this clause that is applicable to subject inventions in 
which the Contractor retains title, including reservation by the 
Government of a nonexclusive, nontransferable, irrevocable, paid-up 
license, except that the Contractor shall file its initial patent 
application claiming the subject invention or exceptional circumstance 
invention within one (1) year after the assignment of such rights. The 
Contractor shall share royalties collected for the manufacture, use or 
sale of the subject invention with the Government employee.
    (c) Subject Invention Disclosure, Election of Title and Filing of 
Patent Application by Contractor.
    (1) Subject invention disclosure. The contractor will disclose each 
subject invention to the Patent Counsel within two months after the 
inventor discloses it in writing to contractor personnel responsible for 
patent matters. The disclosure to the agency shall be in the form of a 
written report and shall identify the contract under which the invention 
was made and the inventor(s) and all sources of funding by B&R code for 
the invention. It shall be sufficiently complete in technical detail to 
convey a clear understanding to the extent known at the time of the 
disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale or public use of 
the invention and whether a manuscript describing the invention has been 
submitted for publication and, if so, whether it has been accepted for 
publication at the time of disclosure. The disclosure shall include a 
written statement as to whether the invention falls within an 
exceptional circumstance field. DOE will make a determination and advise 
the Contractor within 30 days of receipt of an invention disclosure as 
to whether the invention is an exceptional circumstance subject 
invention. In addition, after disclosure to the Patent Counsel, the 
Contractor will promptly notify the agency of the acceptance of any 
manuscript describing the invention for publication or of any on sale or 
public use planned by the contractor. The Contractor shall obtain 
approval from Patent Counsel prior to any release or publication of 
information concerning any nonelectable subject invention such as an 
exceptional circumstance subject invention or any subject invention 
related to a treaty or international agreement.
    (2) Election by the Contractor. Except as provided in paragraph 
(b)(2) of this clause, the Contractor will elect in writing whether or 
not to retain title to any such invention by notifying the Federal 
agency within two years of disclosure to the Federal agency. However, in 
any case where publication, on sale or public use has initiated the one 
year statutory period wherein valid patent protection can still be 
obtained in the United States, the period for election of title may be 
shortened by the agency to a date that is no more than 60 days prior to 
the end of the statutory period.
    (3) Filing of patent applications by the Contractor. The Contractor 
will file its initial patent application on a subject invention to which 
it elects to retain title within one year after election of title or, if 
earlier, or prior to the end of any 1-year statutory period wherein 
valid patent protection can be obtained in the United States after a 
publication, on sale, or public use. The Contractor will file patent 
applications in additional countries or international patent offices 
within either ten months of the corresponding initial patent application 
or six months from the date permission is granted by the Commissioner of 
Patents and Trademarks to file foreign patent applications where such 
filing has been prohibited by a Secrecy Order.
    (4) Contractor's request for an extension of time. Requests for an 
extension of the time for disclosure, election, and filing under 
subparagraphs (c)(1), (2) and (3) may, at the discretion of Patent 
Counsel, be granted.
    (5) Publication Approval. During the course of the work under this 
contract, the Contractor or its employees may desire to release or 
publish information regarding scientific or technical developments 
conceived or first actually reduced to practice in the course of or 
under this contract. In order that public disclosure of such information 
will not adversely affect the patent interest of DOE or the Contractor, 
approval for release or publication shall be secured from the Contractor 
personnel responsible for patent matters prior to any such release or 
publication. Where DOE's approval of publication is requested, DOE's 
response to such requests for approval shall normally be provided within 
90 days except in circumstances in which a domestic patent application 
must be filed in order to protect foreign rights. In the case involving 
foreign patent rights, DOE shall be granted an additional 180 days with 
which to respond to the request for approval, unless extended by mutual 
agreement.
    (d) Conditions When the Government May Obtain Title.
    The Contractor will convey to the DOE, upon written request, title 
to any subject invention--
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of this 
clause, or elects not to retain title; provided, that DOE may only 
request title within sixty (60) days after learning of the failure of 
the Contractor to disclose or to elect within the specified times.

[[Page 507]]

    (2) In those countries in which the Contractor fails to file a 
patent application within the times specified in subparagraph (c) of 
this clause; provided, however, that if the Contractor has filed a 
patent application in a country after the times specified in 
subparagraph (c) above, but prior to its receipt of the written request 
of the DOE, the Contractor shall continue to retain title in that 
country.
    (3) In any country in which the Contractor decides not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend in a reexamination or opposition proceeding on, a patent on a 
subject invention.
    (4) If the Contractor requests that DOE acquire title or rights from 
the Contractor in a subject invention to which the Contractor had 
initially retained title or rights, or in an exceptional circumstance 
subject invention to which the Contractor was granted greater rights, 
DOE may acquire such title or rights from the Contractor, or DOE may 
decide against acquiring such title or rights from the Contractor, at 
DOE's sole discretion.
    (e) Minimum Rights of the Contractor and Protection of the 
Contractor's Right to File.
    (1) Request for a Contractor license. The Contractor may request the 
right to reserve a revocable, nonexclusive, royalty-free license 
throughout the world in each subject invention to which the Government 
obtains title, except if the Contractor fails to disclose the invention 
within the times specified in paragraph (c) of this clause. DOE may 
grant or refuse to grant such a request by the Contractor. When DOE 
approves such reservation, the Contractor's license will normally extend 
to its domestic subsidiaries and affiliates, if any, within the 
corporate structure of which the Contractor is a party and includes the 
right to grant sublicenses of the same scope to the extent the 
Contractor was legally obligated to do so at the time the contract was 
awarded. The license is transferable only with the approval of DOE, 
except when transferred to the successor of that part of the 
contractor's business to which the invention pertains.
    (2) Revocation or modification of a Contractor license. The 
Contractor's domestic license may be revoked or modified by DOE to the 
extent necessary to achieve expeditious practical application of the 
subject invention pursuant to an application for an exclusive license 
submitted in accordance with applicable provisions at 37 CFR Part 404 
and DOE licensing regulations at 10 CFR Part 781. This license will not 
be revoked in the field of use or the geographical areas in which the 
Contractor has achieved practical application and continues to make the 
benefits of the subject invention reasonably accessible to the public. 
The license in any foreign country may be revoked or modified at the 
discretion of DOE to the extent the Contractor, its licensees, or the 
domestic subsidiaries or affiliates have failed to achieve practical 
application of the subject invention in that foreign country.
    (3) Notice of revocation of modification of a Contractor license. 
Before revocation or modification of the license, DOE will furnish the 
Contractor a written notice of its intention to revoke or modify the 
license, and the Contractor will be allowed thirty days (or such other 
time as may be authorized by DOE for good cause shown by the Contractor) 
after the notice to show cause why the license should not be revoked or 
modified. The Contractor has the right to appeal, in accordance with 
applicable regulations in 37 CFR part 404 and DOE licensing regulations 
at 10 CFR part 781 concerning the licensing of Government owned 
inventions, any decision concerning the revocation or modification of 
the license.
    (f) Contractor Action to Protect the Government's Interest.
    (1) Execution of delivery of title or license instruments. The 
Contractor agrees to execute or to have executed, and promptly deliver 
to the Patent Counsel all instruments necessary to accomplish the 
following actions:
    (i) establish or confirm the rights the Government has throughout 
the world in those subject inventions to which the Contractor elects to 
retain title, and
    (ii) convey title to DOE when requested under subparagraphs (b) or 
paragraph (d) of this clause and to enable the Government to obtain 
patent protection throughout the world in that subject invention.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical and 
nontechnical employees, to disclose promptly in writing to Contractor 
personnel identified as responsible for the administration of patent 
matters and in a format suggested by the Contractor, each subject 
invention made under this contract in order that the Contractor can 
comply with the disclosure provisions of paragraph (c) of this clause, 
and to execute all papers necessary to file patent applications on 
subject inventions and to establish the Government's rights in the 
subject inventions. This disclosure format should require, as a minimum, 
the information required by subparagraph (c)(1) of this clause. The 
Contractor shall instruct such employees, through employee agreements or 
other suitable educational programs, on the importance of reporting 
inventions in sufficient time to permit the filing of patent 
applications prior to U.S. or foreign statutory bars.
    (3) Notification of discontinuation of patent protection. The 
contractor will notify the Patent Counsel of any decision not to 
continue the prosecution of a patent application, pay maintenance fees, 
or defend in a reexamination or opposition proceeding on a

[[Page 508]]

patent, in any country, not less than thirty days before the expiration 
of the response period required by the relevant patent office.
    (4) Notification of Government rights. The contractor agrees to 
include, within the specification of any United States patent 
applications and any patent issuing thereon covering a subject 
invention, the following statement, ``This invention was made with 
government support under (identify the contract) awarded by (identify 
the Federal agency). The government has certain rights in the 
invention.''
    (5) Invention Identification Procedures. The Contractor shall 
establish and maintain active and effective procedures to ensure that 
subject inventions are promptly identified and timely disclosed and 
shall submit a written description of such procedures to the Contracting 
Officer so that the Contracting Officer may evaluate and determine their 
effectiveness.
    (6) Invention Filing Documentation. If the Contractor files a 
domestic or foreign patent application claiming a subject invention, the 
Contractor shall promptly submit to Patent Counsel, upon request, the 
following information and documents:
    (i) the filing date, serial number, title, and a copy of the patent 
application (including an English-language version if filed in a 
language other than English);
    (ii) an executed and approved instrument fully confirmatory of all 
Government rights in the subject invention; and
    (iii) the patent number, issue date, and a copy of any issued patent 
claiming the subject invention.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or disclosure 
by the Government is subject to the confidentiality provision at 35 
U.S.C. 205 and 37 CFR Part 40.
    (g) Subcontracts.
    (1) Subcontractor subject inventions. The Contractor shall not 
obtain rights in the subcontractor's subject inventions as part of the 
consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization or 
small business firm subcontractors. Unless otherwise authorized or 
directed by the Contracting Officer, the Contractor shall include the 
patent rights clause at 48 CFR 952.227-11, suitably modified to identify 
the parties, in all subcontracts, at any tier, for experimental, 
developmental, demonstration or research work to be performed by a small 
business firm or domestic nonprofit organization, except subcontracts 
which are subject to exceptional circumstances in accordance with 35 
U.S.C. 202 and subparagraph (b)(2) of this clause. The subcontractor 
retains all rights provided for the contractor in the patent rights 
clause at 48 CFR 952.227-11.
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties, in any contract for 
experimental, developmental, demonstration or research work. For 
subcontracts subject to exceptional circumstances, the contractor must 
consult with DOE patent counsel with respect to the appropriate patent 
clause.
    (4) DOE and subcontractor contract. With respect to subcontracts at 
any tier, DOE, the subcontractor, and the Contractor agree that the 
mutual obligations of the parties created by this clause constitute a 
contract between the subcontractor and DOE with respect to the matters 
covered by the clause; provided, however, that nothing in this paragraph 
is intended to confer any jurisdiction under the Contract Disputes Act 
in connection with proceedings under paragraph (j) of this clause.
    (5) Subcontractor refusal to accept terms of patent clause. If a 
prospective subcontractor refuses to accept the terms of a patent rights 
clause, the Contractor shall promptly submit a written notice to the 
Contracting Officer stating the subcontractor's reasons for such a 
refusal, including any relevant information for expediting disposition 
of the matter, and the Contractor shall not proceed with the subcontract 
without the written authorization of the Contracting Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing and 
identify the subcontractor, the applicable patent rights clause, the 
work to be performed under the subcontract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention.
    (h) Reporting on Utilization of Subject Inventions. The Contractor 
agrees to submit to DOE on request, periodic reports, no more frequently 
than annually, on the utilization of a subject invention or on efforts 
at obtaining such utilization that are being made by the Contractor or 
its licensees or assignees. Such reports shall include information 
regarding the status of development, date of first commercial sale or 
use, gross royalties received by the Contractor, and such other

[[Page 509]]

data and information as DOE may reasonably specify. The Contractor also 
agrees to provide additional reports as may be requested by DOE in 
connection with any march-in proceeding undertaken by DOE in accordance 
with paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), 
DOE agrees it will not disclose such information to persons outside the 
Government without permission of the Contractor.
    (i) Preference for United States Industry. Notwithstanding any other 
provision of this clause, the Contractor agrees that neither it nor any 
assignee will grant to any person the exclusive right to use or sell any 
subject invention in the United States unless such person agrees that 
any product embodying the subject invention or produced through the use 
of the subject invention will be manufactured substantially in the 
United States. However, in individual cases, the requirement for such an 
agreement may be waived by DOE upon a showing by the Contractor or its 
assignee that reasonable but unsuccessful efforts have been made to 
grant licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the United States or that under 
the circumstances domestic manufacture is not commercially feasible.
    (j) March-in Rights. The Contractor agrees that, with respect to any 
subject invention in which it has acquired title, DOE has the right in 
accordance with the procedures in 37 CFR 401.6 and any DOE supplemental 
regulations to require the Contractor, an assignee or exclusive licensee 
of a subject invention to grant a nonexclusive, partially exclusive, or 
exclusive license in any field of use to a responsible applicant or 
applicants, upon terms that are reasonable under the circumstances, and, 
if the Contractor, assignee or exclusive licensee refuses such a 
request, DOE has the right to grant such a license itself if DOE 
determines that--
    (1) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived, or because 
a licensee of the exclusive right to use or sell any subject invention 
in the United States is in breach of such agreement.
    (k) Special Provisions for Contracts With Nonprofit Organizations. 
If the Contractor is a nonprofit organization, it agrees that--
    (1) DOE approval of assignment of rights. Rights to a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE, except where such assignment is made to an 
organization which has as one of its primary functions the management of 
inventions; provided, that such assignee will be subject to the same 
provisions of this clause as the Contractor.
    (2) Small business firm licensees. It will make efforts that are 
reasonable under the circumstances to attract licensees of subject 
inventions that are small business firms, and that it will give a 
preference to a small business firm when licensing a subject invention 
if the Contractor determines that the small business firm has a plan or 
proposal for marketing the invention which, if executed, is equally as 
likely to bring the invention to practical application as any plans or 
proposals from applicants that are not small business firms; provided, 
that the Contractor is also satisfied that the small business firm has 
the capability and resources to carry out its plan or proposal. The 
decision whether to give a preference in any specific case will be at 
the discretion of the Contractor. However, the Contractor agrees that 
the Secretary of Commerce may review the Contractor's licensing program 
and decisions regarding small business firm applicants, and the 
Contractor will negotiate changes to its licensing policies, procedures, 
or practices with the Secretary of Commerce when that Secretary's review 
discloses that the Contractor could take reasonable steps to more 
effectively implement the requirements of this subparagraph (k)(2).
    (3) Contractor licensing of subject inventions. To the extent that 
it provides the most effective technology transfer, licensing of subject 
inventions shall be administered by Contractor employees on location at 
the facility.
    (l) Communications. The Contractor shall direct any notification, 
disclosure or request provided for in this clause to the Patent Counsel 
assisting the DOE contracting activity.
    (m) Reports.
    (1) Interim reports. Upon DOE's request, the Contractor shall submit 
to DOE, no more frequently than annually, a list of subject inventions 
disclosed to DOE during a specified period, or a statement that no 
subject inventions were made during the specified period; and a list of 
subcontracts containing a patent clause and awarded by the Contractor 
during a specified period, or a statement that no such subcontracts were 
awarded during the specified period.
    (2) Final reports. Upon DOE's request, the Contractor shall submit 
to DOE, prior to

[[Page 510]]

closeout of the contract, a list of all subject inventions disclosed 
during the performance period of the contract, or a statement that no 
subject inventions were made during the contract performance period; and 
a list of all subcontracts containing a patent clause and awarded by the 
Contractor during the contract performance period, or a statement that 
no such subcontracts were awarded during the contract performance 
period.
    (n) Examination of Records Relating to Subject Inventions. (1) 
Contractor compliance. Until the expiration of three (3) years after 
final payment under this contract, the Contracting Officer or any 
authorized representative may examine any books (including laboratory 
notebooks), records, documents, and other supporting data of the 
Contractor, which the Contracting Officer or authorized representative 
deems reasonably pertinent to the discovery or identification of subject 
inventions, including exceptional circumstance subject inventions, or to 
determine Contractor compliance with any requirement of this clause.
    (2) Unreported inventions. If the Contracting Officer is aware of an 
invention that is not disclosed by the Contractor to DOE, and the 
Contracting Officer believes the unreported invention may be a subject 
invention, including exceptional circumstance subject inventions, DOE 
may require the Contractor to submit to DOE a disclosure of the 
invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this paragraph 
is subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file for 
any patent application claiming the subject invention.
    (o) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first actually 
reduced to practice in the course of or under this contract, the 
Contractor agrees to and does hereby grant to the Government an 
irrevocable, nonexclusive, paid-up license in and to any inventions or 
discoveries regardless of when conceived or actually reduced to practice 
or acquired by the Contractor at any time through completion of this 
contract and which are incorporated or embodied in the construction of 
the facility or which are utilized in the operation of the facility or 
which cover articles, materials, or product manufactured at the facility 
(1) to practice or have practiced by or for the Government at the 
facility, and (2) to transfer such license with the transfer of that 
facility. Notwithstanding the acceptance or exercise by the Government 
of these rights, the Government may contest at any time the 
enforceability, validity or scope of, or title to, any rights or patents 
herein licensed.
    (p) Atomic Energy.
    (1) Pecuniary awards. No claim for pecuniary award of compensation 
under the provisions of the Atomic Energy Act of 1954, as amended, may 
be asserted with respect to any invention or discovery made or conceived 
in the course of or under this contract.
    (2) Patent agreements. Except as otherwise authorized in writing by 
the Contracting Officer, the Contractor shall obtain patent agreements 
to effectuate the provisions of subparagraph (p)(1) of this clause from 
all persons who perform any part of the work under this contract, except 
nontechnical personnel, such as clerical employees and manual laborers.
    (q) Classified Inventions. (1) Approval for filing a foreign patent 
application. The Contractor shall not file or cause to be filed an 
application or registration for a patent disclosing a subject invention 
related to classified subject matter in any country other than the 
United States without first obtaining the written approval of the 
Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance with 
this clause the Contractor files a patent application in the United 
States disclosing a subject invention that is classified for reasons of 
security, the Contractor shall observe all applicable security 
regulations covering the transmission of classified subject matter. If 
the Contractor transmits a patent application disclosing a classified 
subject invention to the United States Patent and Trademark Office 
(USPTO), the Contractor shall submit a separate letter to the USPTO 
identifying the contract or contracts by agency and agreement number 
that require security classification markings to be placed on the patent 
application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees to 
include the substance of this clause in subcontracts at any tier that 
cover or are likely to cover subject matter classified for reasons of 
security.
    (r) Patent Functions. Upon the written request of the Contracting 
Officer or Patent Counsel, the Contractor agrees to make reasonable 
efforts to support DOE in accomplishing patent-related functions for 
work arising out of the contract, including, but not limited to, the 
prosecution of patent applications, and the determination of questions 
of novelty, patentability, and inventorship.
    (s) Educational Awards Subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) which

[[Page 511]]

is subject to treaties or international agreements as set forth in 
paragraph (b)(3) of this clause or agreements other than funding 
agreements. The Contracting Officer may disapprove of any such 
placement.
    (t) Annual Appraisal by Patent Counsel. Patent Counsel may conduct 
an annual appraisal to evaluate the Contractor's effectiveness in 
identifying and protecting subject inventions in accordance with DOE 
policy.

                             (End of clause)

    Alternate 1 Weapons Related Subject Inventions. As prescribed at 
970.2703-2(g), insert the following as subparagraphs (a)(10) and (b)(7), 
respectively:

    (a) Definitions. (10) Weapons Related Subject Invention means any 
subject invention conceived or first actually reduced to practice in the 
course of or under work funded by or through defense programs , 
including Department of Defense and intelligence reimbursable work, or 
the Naval Nuclear Propulsion Program of the Department of Energy or the 
National Nuclear Security Administration.
    (b) Allocation of Principal Rights. (7) Weapons related subject 
inventions. Except to the extent that DOE is solely satisfied that the 
Contractor meets certain procedural requirements and DOE grants rights 
to the Contractor in weapons related subject inventions, the Contractor 
does not have the right to retain title to any weapons related subject 
inventions.

                           (End of alternate)

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48571, July 25, 2002]



970.5227-11  Patent rights--management and operating contracts, for-profit 
contractor, non-technology transfer.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2703-1(b)(4):

     Patent Rights--Management and Operating Contracts, for-Profit 
             Contractor, Non-Technology Transfer (DEC 2000)

    (a) Definitions. (1) DOE licensing regulations means the Department 
of Energy patent licensing regulations at 10 CFR Part 781.
    (2) DOE patent waiver regulations means the Department of Energy 
patent waiver regulations at 10 CFR Part 784.
    (3) Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    (4) Made when used in relation to any invention means the conception 
or first actual reduction to practice of such invention.
    (5) Patent Counsel means DOE Patent Counsel assisting the 
contracting activity.
    (6) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or method; 
or to operate, in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    (7) Subject Invention means any invention of the contractor 
conceived or first actually reduced to practice in the course of or 
under this contract, provided that in the case of a variety of plant, 
the date of determination (as defined in section 41(d) of the Plant 
Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur during the 
period of contract performance.
    (b) Allocation of Principal Rights. (1) Assignment to the 
Government. Except to the extent that rights are retained by the 
Contractor by a determination of greater rights in accordance with 
subparagraph (b)(2) of this clause or by a request for foreign patent 
rights in accordance with subparagraph (d)(2) of this clause, the 
Contractor agrees to assign to the Government the entire right, title, 
and interest throughout the world in and to each subject invention.
    (2) Greater rights determinations. The Contractor, or an Contractor 
employee-inventor after consultation with the Contractor and with the 
written authorization of the Contractor in accordance with DOE patent 
waiver regulations, may request greater rights, including title, in an 
identified subject invention than the nonexclusive license and the 
foreign patent rights provided for in paragraph (d) of this clause, in 
accordance with the DOE patent waiver regulations. Such a request shall 
be submitted in writing to Patent Counsel with a copy to the Contracting 
Officer at the time the subject invention is first disclosed to DOE in 
accordance with subparagraph (c)(2) of this clause, or not later than 
eight (8) months after such disclosure, unless a longer period is 
authorized in writing by the Contracting Officer for good cause shown in 
writing by the Contractor. DOE may grant or refuse to grant such a 
request by the Contractor or Contractor employee-inventor. Unless 
otherwise provided in the greater rights determination, any rights in a 
subject invention obtained by the Contractor pursuant to a determination 
of greater rights are subject to a nonexclusive, nontransferable, 
irrevocable, paid-up license to the Government to practice or have 
practiced the subject invention throughout

[[Page 512]]

the world by or on behalf of the Government of the United States 
(including any Government agency), and to any reservations and 
conditions deemed appropriate by the Secretary of Energy or designee.
    (c) Subject Invention Disclosures. (1) Contractor procedures for 
reporting subject inventions to Contractor personnel. Subject inventions 
shall be reported to Contractor personnel responsible for patent matters 
within six (6) months of conception and/or first actual reduction to 
practice, whichever occurs first in the performance of work under this 
contract. Accordingly, the Contractor shall establish and maintain 
effective procedures for ensuring such prompt identification and timely 
disclosure of subject inventions to Contractor personnel responsible for 
patent matters, and the procedures shall include the maintenance of 
laboratory notebooks, or equivalent records, and other records that are 
reasonably necessary to document the conception and/or the first actual 
reduction to practice of subject inventions, and the maintenance of 
records demonstrating compliance with such procedures. The Contractor 
shall submit a written description of such procedures to the Contracting 
Officer, upon request, for evaluation of the effectiveness of such 
procedures by the Contracting Officer.
    (2) Subject invention disclosure. The Contractor shall disclose each 
subject invention to Patent Counsel with a copy to the Contracting 
Officer within two (2) months after the subject invention is reported to 
Contractor personnel responsible for patent matters, in accordance with 
subparagraph (c)(1) of this clause, or, if earlier, within six (6) 
months after the Contractor has knowledge of the subject invention, but 
in any event before any on sale, public use, or publication of the 
subject invention. The disclosure to DOE shall be in the form of a 
written report and shall include:
    (i) the contract number under which the subject invention was made;
    (ii) the inventor(s) of the subject invention;
    (iii) a description of the subject invention in sufficient technical 
detail to convey a clear understanding of the nature, purpose and 
operation of the subject invention, and of the physical, chemical, 
biological or electrical characteristics of the subject invention, to 
the extent known by the Contractor at the time of the disclosure;
    (iv) the date and identification of any publication, on sale or 
public use of the invention;
    (v) the date and identification of any submissions for publication 
of any manuscripts describing the invention, and a statement of whether 
the manuscript is accepted for publication, to the extent known by the 
Contractor at the time of the disclosure;
    (vi) a statement indicating whether the subject invention concerns 
exceptional circumstances pursuant to 35 U.S.C. 202(ii), related to 
national security, or subject to a treaty or an international agreement, 
to the extent known or believed by Contractor at the time of the 
disclosure;
    (vii) all sources of funding by Budget and Resources (B&R) code; and
    (viii) the identification of any agreement relating to the subject 
invention, including Cooperative Research and Development Agreements and 
Work-for-Others agreements. Unless the Contractor contends otherwise in 
writing at the time the invention is disclosed, inventions disclosed to 
DOE under this paragraph are deemed made in the manner specified in 
Sections (a)(1) and (a)(2) of 42 U.S.C. 5908.
    (3) Publication after disclosure. After disclosure of the subject 
invention to the DOE, the Contractor shall promptly notify Patent 
Counsel of the acceptance for publication of any manuscript describing 
the subject invention or of any expected or on sale or public use of the 
subject invention, known by the Contractor.
    (4) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical and 
nontechnical employees, to disclose promptly in writing to Contractor 
personnel identified as responsible for the administration of patent 
matters and in a format suggested by the Contractor, each subject 
invention made under this contract, and to execute all papers necessary 
to file patent applications claiming subject inventions or to establish 
the Government's rights in the subject inventions. This disclosure 
format shall at a minimum include the information required by 
subparagraph (c)(2) of this clause. The Contractor shall instruct such 
employees, through employee agreements or other suitable educational 
programs, on the importance of reporting inventions in sufficient time 
to permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (5) Contractor procedures for reporting subject inventions to DOE. 
The Contractor agrees to establish and maintain effective procedures for 
ensuring the prompt identification and timely disclosure of subject 
inventions to DOE. The Contractor shall submit a written description of 
such procedures to the Contracting Officer, upon request, for evaluation 
of the effectiveness of such procedures by the Contracting Officer.
    (6) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or disclosure 
by the Government is subject to 35 U.S.C. 205 and 37 CFR 401.13.

[[Page 513]]

    (d) Minimum Rights of the Contractor. (1) Contractor License. (i) 
Request for a Contractor license. Except for subject inventions that the 
Contractor fails to disclose within the time periods specified at 
subparagraph (c)(2) of this clause, the Contractor may request a 
revocable, nonexclusive, royalty-free license in each patent application 
filed in any country claiming a subject invention and any resulting 
patent in which the Government obtains title, and DOE may grant or 
refuse to grant such a request by the Contractor. If DOE grants the 
Contractor's request for a license, the Contractor's license extends to 
its domestic subsidiaries and affiliates, if any, within the corporate 
structure of which the Contractor is a party and includes the right to 
grant sublicenses of the same scope to the extent the Contractor was 
legally obligated to do so at the time the contract was awarded.
    (ii) Transfer of a Contractor license. DOE shall approve any 
transfer of the Contractor's license in a subject invention, and DOE may 
determine the Contractor's license is non-transferrable, on a case-by-
case basis.
    (iii) Revocation or modification of a Contractor license. DOE may 
revoke or modify the Contractor's domestic license to the extent 
necessary to achieve expeditious practical application of the subject 
invention pursuant to an application for an exclusive license submitted 
in accordance with applicable provisions in 37 CFR Part 404 and DOE 
licensing regulations. DOE may not revoke the Contractor's domestic 
license in that field of use or the geographical areas in which the 
Contractor, its licensee, or its domestic subsidiaries or affiliates 
achieved practical applications and continues to make the benefits of 
the invention reasonably accessible to the public. DOE may revoke or 
modify the Contractor's license in any foreign country to the extent the 
Contractor, its licensees, or its domestic subsidiaries or affiliates 
failed to achieve practical application in that foreign country.
    (iv) Notice of revocation or modification of a Contractor license. 
Before revocation or modification of the license, DOE shall furnish the 
Contractor a written notice of its intention to revoke or modify the 
license, and the Contractor shall be allowed thirty (30) days from the 
date of the notice (or such other time as may be authorized by DOE for 
good cause shown by the Contractor) to show cause why the license should 
not be revoked or modified. The Contractor has the right to appeal any 
decision concerning the revocation or modification of its license, in 
accordance with applicable regulations in 37 CFR Part 404 and DOE 
licensing regulations.
    (2) Contractor's right to request foreign patent rights. If the 
Government has title to a subject invention and the Government decides 
against securing patent rights in a foreign country for the subject 
invention, the Contractor may request such foreign patent rights from 
DOE, and DOE may grant the Contractor's request, subject to a 
nonexclusive, nontransferable, irrevocable, paid-up license to the 
Government to practice or have practiced the subject invention in the 
foreign country, and any reservations and conditions deemed appropriate 
by the Secretary of Energy or designee. Such a request shall be 
submitted in writing to the Patent Counsel as part of the disclosure 
required by subparagraph (c)(2) of this clause, with a copy to the DOE 
Contracting Officer, unless a longer period is authorized in writing by 
the Contracting Officer for good cause shown in writing by the 
Contractor. DOE may grant or refuse to grant such a request, and may 
consider whether granting the Contractor's request best serves the 
interests of the United States.
    (e) Examination of Records Relating to Inventions. (1) Contractor 
compliance. Until the expiration of three (3) years after final payment 
under this contract, the Contracting Officer or any authorized 
representative may examine any books (including laboratory notebooks), 
records, and documents and other supporting data of the Contractor, 
which the Contracting Officer or authorized representative deems 
reasonably pertinent to the discovery or identification of subject 
inventions, or to determine Contractor (and inventor) compliance with 
the requirements of this clause, including proper identification and 
disclosure of subject inventions, and establishment and maintenance of 
invention disclosure procedures.
    (2) Unreported inventions. If the Contracting Officer is aware of an 
invention that is not disclosed by the Contractor to DOE, and the 
Contracting Officer believes the unreported invention may be a subject 
invention, DOE may require the Contractor to submit to DOE a disclosure 
of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this paragraph 
is subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (f) Subcontracts. (1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization or 
small business firm subcontractors. Unless otherwise authorized or 
directed by the Contracting Officer, the Contractor shall include the 
patent rights clause at 48 CFR 952.227-11, suitably modified to identify 
the parties in all subcontracts, at any tier, for experimental, 
developmental, demonstration or research work to be performed by a small 
business firm or domestic nonprofit organization, except subcontracts

[[Page 514]]

which are subject to exceptional circumstances in accordance with 35 
U.S.C. 202(a)(ii).
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (f)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties, in any contract for 
experimental, developmental, demonstration or research work.
    (4) DOE and subcontractor contract. With respect to subcontracts at 
any tier, DOE, the subcontractor, and the Contractor agree that the 
mutual obligations of the parties created by this clause constitute a 
contract between the subcontractor and DOE with respect to those matters 
covered by this clause.
    (5) Subcontractor refusal to accept terms of patent rights clause. 
If a prospective subcontractor refuses to accept the terms of a patent 
rights clause, the Contractor shall promptly submit a written notice to 
the Contracting Officer stating the subcontractor's reasons for such a 
refusal, including any relevant information for expediting disposition 
of the matter, and the Contractor shall not proceed with the subcontract 
without the written authorization of the Contracting Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing and 
identify the subcontractor, the applicable patent rights clause, the 
work to be performed under the subcontract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention, with 
a copy of the notification and identification to the Contracting 
Officer.
    (g) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act of 
1954, as amended, may be asserted with respect to any invention or 
discovery made or conceived in the course of or under this contract.
    (2) Patent Agreements. Except as otherwise authorized in writing by 
the Contracting Officer, the Contractor shall obtain patent agreements 
to effectuate the provisions of subparagraph (g)(1) of this clause from 
all persons who perform any part of the work under this contract, except 
nontechnical personnel, such as clerical employees and manual laborers.
    (h) Publication. The Contractor shall receive approval from Patent 
Counsel prior to releasing or publishing information regarding 
scientific or technical developments conceived or first actually reduced 
to practice in the course of or under this contract, to ensure such 
release or publication does not adversely affect the patent interests of 
DOE or the Contractor.
    (i) Communications. The Contractor shall direct any notification, 
disclosure, or request provided for in this clause to the Patent Counsel 
assisting the DOE contracting activity, with a copy of the communication 
to the Contracting Officer.
    (j) Reports. (1) Interim reports. Upon DOE's request, the Contractor 
shall submit to DOE, no more frequently than annually, a list of subject 
inventions disclosed to DOE during a specified period, or a statement 
that no subject inventions were made during the specified period; and/or 
a list of subcontracts containing a patent clause and awarded by the 
Contractor during a specified period, or a statement that no such 
subcontracts were awarded during the specified period. The interim 
report shall state whether the Contractor's invention disclosures were 
submitted to DOE in accordance with the requirements of subparagraphs 
(c)(1) and (c)(5) of this clause.
    (2) Final reports. Upon DOE's request, the Contractor shall submit 
to DOE, prior to closeout of the contract or within three (3) months of 
the date of completion of the contracted work, a list of all subject 
inventions disclosed during the performance period of the contract, or a 
statement that no subject inventions were made during the contract 
performance period; and/or a list of all subcontracts containing a 
patent clause and awarded by the Contractor during the contract 
performance period, or a statement that no such subcontracts were 
awarded during the contract performance period.
    (k) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first actually 
reduced to practice in the course of or under this contract, the 
Contractor agrees to and does hereby grant to the Government an 
irrevocable, nonexclusive, paid-up license in and to any inventions or 
discoveries regardless of when conceived or actually reduced to practice 
or acquired by the contractor at any time through completion of this 
contract and which are incorporated or embodied in the construction of 
the facility or which are utilized in the operation of the facility or 
which cover articles, materials, or products manufactured at the 
facility (1) to practice or have practiced by or for the Government at 
the facility, and (2) to transfer such license with the transfer of that 
facility. Notwithstanding the acceptance or exercise by

[[Page 515]]

the Government of these rights, the Government may contest at any time 
the enforceability, validity or scope of, or title to, any rights or 
patents herein licensed.
    (l) Classified Inventions. (1) Approval for filing a foreign patent 
application. The Contractor shall not file or cause to be filed an 
application or registration for a patent disclosing a subject invention 
related to classified subject matter in any country other than the 
United States without first obtaining the written approval of the 
Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance with 
this clause the Contractor files a patent application in the United 
States disclosing a subject invention that is classified for reasons of 
security, the Contractor shall observe all applicable security 
regulations covering the transmission of classified subject matter. If 
the Contractor transmits a patent application disclosing a classified 
subject invention to the United States Patent and Trademark Office 
(USPTO), the Contractor shall submit a separate letter to the USPTO 
identifying the contract or contracts by agency and agreement number 
that require security classification markings to be placed on the patent 
application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees to 
include the substance of this clause in subcontracts at any tier that 
cover or are likely to cover subject matter classified for reasons of 
security.
    (m) Patent Functions. Upon the written request of the Contracting 
Officer or Patent Counsel, the Contractor agrees to make reasonable 
efforts to support DOE in accomplishing patent-related functions for 
work arising out of the contract, including, but not limited to, the 
prosecution of patent applications, and the determination of questions 
of novelty, patentability, and inventorship.
    (n) Annual Appraisal by Patent Counsel. Patent Counsel may conduct 
an annual appraisal to evaluate the Contractor's effectiveness in 
identifying and protecting subject inventions in accordance with DOE 
policy.

                             (End of clause)



970.5227-12  Patent rights--management and operating contracts, for-profit 
contractor, advance class waiver.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2703-1(b)(3):

     Patent Rights--Management and Operating Contracts, For-Profit 
               Contractor, Advance Class Waiver (DEC 2000)

    (a) Definitions. (1) DOE licensing regulations means the Department 
of Energy patent licensing regulations at 10 CFR Part 781.
    (2) DOE patent waiver regulations means the Department of Energy 
patent waiver regulations at 10 CFR Part 784.
    (3) Exceptional Circumstance Subject Invention means any subject 
invention in a technical field or related to a task determined by the 
Department of Energy to be subject to an exceptional circumstance under 
35 U.S.C. 202(a)(ii), and in accordance with 37 CFR 401.3(e).
    (4) Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    (5) Made when used in relation to any invention means the conception 
or first actual reduction to practice of such invention.
    (6) Patent Counsel means DOE Patent Counsel assisting the 
contracting activity.
    (7) Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or method; 
or to operate, in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    (8) Subject Invention means any invention of the contractor 
conceived or first actually reduced to practice in the course of or 
under this contract, provided that in the case of a variety of plant, 
the date of determination (as defined in section 41(d) of the Plant 
Variety Protection Act, 7 U.S.C. 2401(d)) shall also occur during the 
period of contract performance.
    (b) Allocation of Principal Rights. (1) Assignment to the 
Government. Except to the extent that rights are retained by the 
Contractor by the granting of an advance class waiver pursuant to 
subparagraph (b)(2) of this clause or a determination of greater rights 
pursuant to subparagraph (b)(7) of this clause, the Contractor agrees to 
assign to the Government the entire right, title, and interest 
throughout the world in and to each subject invention.
    (2) Advance class waiver of Government rights to the Contractor. DOE 
may grant to the Contractor an advance class waiver of Government rights 
in any or all subject inventions, at the time of execution of the 
contract, such that the Contractor may elect to retain

[[Page 516]]

the entire right, title and interest throughout the world to such waived 
subject inventions, in accordance with the terms and conditions of the 
advance class waiver. Unless otherwise provided by the terms of the 
advance class waiver, any rights in a subject invention retained by the 
Contractor under an advance class waiver are subject to 35 U.S.C. 203 
and the provisions of this clause, including the Government license 
provided for in subparagraph (b)(3) of this clause, and any reservations 
and conditions deemed appropriate by the Secretary of Energy or 
designee.
    (3) Government license. With respect to any subject invention to 
which the Contractor retains title, either under an advance class waiver 
pursuant to subparagraph (b)(2) or a determination of greater rights 
pursuant to subparagraph (b)(7) of this clause, the Government has a 
nonexclusive, nontransferable, irrevocable, paid-up license to practice 
or have practiced for or on behalf of the United States the subject 
invention throughout the world.
    (4) Foreign patent rights. If the Government has title to a subject 
invention and the Government decides against securing patent rights in a 
foreign country for the subject invention, the Contractor may request 
such foreign patent rights from DOE, and DOE may grant the Contractor's 
request, subject to 35 U.S.C. 203 and the provisions of this clause, 
including the Government license provided for in subparagraph (b)(3) of 
this clause, and any reservations and conditions deemed appropriate by 
the Secretary of Energy or designee.
    (5) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor by a determination of 
greater rights in accordance with subparagraph (b)(7) of this clause, 
the Contractor does not have the right to retain title to any 
exceptional circumstance subject inventions and agrees to assign to the 
Government the entire right, title, and interest, throughout the world, 
in and to any exceptional circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions:
    (A) uranium enrichment technology;
    (B) storage and disposal of civilian high-level nuclear waste and 
spent fuel technology; and
    (C) national security technologies classified or sensitive under 
Section 148 of the Atomic Energy Act (42 U.S.C. 2168).
    (ii) Inventions made under any agreement, contract or subcontract 
related to the following initiatives or programs are exceptional 
circumstance subject inventions:
    (A) DOE Steel Initiative and Metals Initiative;
    (B) U.S. Advanced Battery Consortium; and
    (C) any funding agreement which is funded in part by the Electric 
Power Research Institute (EPRI) or the Gas Research Institute (GRI).
    (iii) DOE reserves the right to unilaterally amend this contract to 
modify, by deletion or insertion, technical fields, programs, 
initiatives, and/or other classifications for the purpose of defining 
DOE exceptional circumstance subject inventions.
    (6) Treaties and international agreements. Any rights acquired by 
the Contractor in subject inventions are subject to any disposition of 
right, title, or interest in or to subject inventions provided for in 
treaties or international agreements identified at Appendix [Insert 
Reference], to this contract. DOE reserves the right to unilaterally 
amend this contract to identify specific treaties or international 
agreements entered into or to be entered into by the Government after 
the effective date of this contract and to effectuate those license or 
other rights which are necessary for the Government to meet its 
obligations to foreign governments, their nationals and international 
organizations under such treaties or international agreements with 
respect to subject inventions made after the date of the amendment.
    (7) Contractor request for greater rights. The Contractor may 
request greater rights in an identified subject invention, including an 
exceptional circumstance subject invention, to which the Contractor does 
not have the right to elect to retain title, in accordance with the DOE 
patent waiver regulations, by submitting such a request in writing to 
Patent Counsel with a copy to the Contracting Officer at the time the 
subject invention is first disclosed to DOE pursuant to subparagraph 
(c)(1) of this clause, or not later than eight (8) months after such 
disclosure, unless a longer period is authorized in writing by the 
Contracting Officer for good cause shown in writing by the Contractor. 
DOE may grant or refuse to grant such a request by the Contractor. 
Unless otherwise provided in the greater rights determination, any 
rights in a subject invention obtained by the Contractor under a 
determination of greater rights is subject to 35 U.S.C. 203 and the 
provisions of this clause, including the Government license provided for 
in subparagraph (b)(3) of this clause, and to any reservations and 
conditions deemed appropriate by the Secretary of Energy or designee.
    (8) Contractor employee-inventor rights. If the Contractor does not 
elect to retain title to a subject invention or does not request greater 
rights in a subject invention, including an exceptional circumstance 
subject invention, to which the Contractor does not have the right to 
elect to retain title, a Contractor employee-inventor, after 
consultation with the Contractor and with written authorization from the 
Contractor in accordance with 10 CFR 784.9(b)(4), may request

[[Page 517]]

greater rights, including title, in the subject invention or the 
exceptional circumstance invention from DOE, and DOE may grant or refuse 
to grant such a request by the Contractor employee-inventor.
    (9) Government assignment of rights in Government employees' subject 
inventions. If a DOE employee is a joint inventor of a subject invention 
to which the Contractor has rights, DOE may assign or refuse to assign 
any rights in the subject invention acquired by the Government from the 
DOE employee to the Contractor, consistent with 48 CFR 27.304-1(d). 
Unless otherwise provided in the assignment, the rights assigned to the 
Contractor are subject to the Government license provided for in 
subparagraph (b)(3) of this clause, and to any provision of this clause 
applicable to subject inventions in which rights are retained by the 
Contractor, and to any reservations and conditions deemed appropriate by 
the Secretary of Energy or designee. The Contractor shall share 
royalties collected for the manufacture, use or sale of the subject 
invention with the DOE employee.
    (c) Subject Invention Disclosure, Election of Title, and Filing of 
Patent Application by Contractor. (1) Subject invention disclosure. The 
Contractor shall disclose each subject invention to Patent Counsel with 
a copy to the Contracting Officer within two (2) months after an 
inventor discloses it in writing to Contractor personnel responsible for 
patent matters or, if earlier, within six (6) months after the 
Contractor has knowledge of the subject invention, but in any event 
before any on sale, public use, or publication of the subject invention. 
The disclosure to DOE shall be in the form of a written report and shall 
include:
    (i) the contract number under which the subject invention was made;
    (ii) the inventor(s) of the subject invention;
    (iii) a description of the subject invention in sufficient technical 
detail to convey a clear understanding of the nature, purpose and 
operation of the subject invention, and of the physical, chemical, 
biological or electrical characteristics of the subject invention, to 
the extent known by the Contractor at the time of the disclosure;
    (iv) the date and identification of any publication, on sale or 
public use of the invention;
    (v) the date and identification of any submissions for publication 
of any manuscripts describing the invention, and a statement of whether 
the manuscript is accepted for publication, to the extent known by the 
Contractor at the time of the disclosure;
    (vi) a statement indicating whether the subject invention is an 
exceptional circumstance subject invention, related to national 
security, or subject to a treaty or an international agreement, to the 
extent known or believed by Contractor at the time of the disclosure;
    (vii) all sources of funding by Budget and Resources (B&R) code; and
    (viii) the identification of any agreement relating to the subject 
invention, including Cooperative Research and Development Agreements and 
Work-for-Others agreements.
    Unless the Contractor contends otherwise in writing at the time the 
invention is disclosed, inventions disclosed to DOE under this paragraph 
are deemed made in the manner specified in Sections (a)(1) and (a)(2) of 
42 U.S.C. 5908.
    (2) Publication after disclosure. After disclosure of the subject 
invention to the DOE, the Contractor shall promptly notify Patent 
Counsel of the acceptance for publication of any manuscript describing 
the subject invention or of any expected or on sale or public use of the 
subject invention, known by the Contractor. The Contractor shall obtain 
approval from Patent Counsel prior to any release or publication of 
information concerning an exceptional circumstance subject invention or 
any subject invention related to a treaty or international agreement.
    (3) Election by the Contractor under an advance class waiver. If the 
Contractor has the right to elect to retain title to subject inventions 
under an advance class waiver granted in accordance with subparagraph 
(b)(2) of this clause, and unless otherwise provided for by the terms of 
the advance class waiver, the Contractor shall elect in writing whether 
or not to retain title to any subject invention by notifying DOE within 
two (2) years of the date of the disclosure of the subject invention to 
DOE, in accordance with subparagraph (c)(1) of this clause. The 
notification shall identify the advance class waiver, state the 
countries, including the United States, in which rights are retained, 
and certify that the subject invention is not an exceptional 
circumstance subject invention or subject to a treaty or international 
agreement. If a publication, on sale or public use of the subject 
invention has initiated the 1-year statutory period under 35 U.S.C. 
102(b), the period for election may be shortened by DOE to a date that 
is no more than sixty (60) days prior to the end of the 1-year statutory 
period.
    (4) Filing of patent applications by the Contractor under an advance 
class waiver. If the Contractor has the right to retain title to a 
subject invention in accordance with an advance class waiver pursuant to 
subparagraph (b)(2) of this clause or a determination of greater rights 
pursuant to paragraph (b)(7) of this clause, and unless otherwise 
provided for by the terms of the advance class waiver or greater rights 
determination, the Contractor shall file an initial patent application 
claiming the subject invention to which it retains title either within 
one (1) year

[[Page 518]]

after the Contractor's election to retain or grant of title to the 
subject invention or prior to the end of any 1-year statutory period 
under 35 U.S.C. 102(b), whichever occurs first. Any patent applications 
filed by the Contractor in foreign countries or international patent 
offices shall be filed within either ten (10) months of the 
corresponding initial patent application or, if such filing has been 
prohibited by a Secrecy Order, within six (6) months from the date 
permission is granted by the Commissioner of Patents and Trademarks to 
file foreign patent applications.
    (5) Submission of patent information and documents. If the 
Contractor files a domestic or foreign patent application claiming a 
subject invention, the Contractor shall promptly submit to Patent 
Counsel the following information and documents:
    (i) The filing date, serial number, title, and a copy of the patent 
application (including an English-language version if filed in a 
language other than English);
    (ii) An executed and approved instrument fully confirmatory of all 
Government rights in the subject invention; and
    (iii) The patent number, issue date, and a copy of any issued patent 
claiming the subject invention.
    (6) Contractor's request for an extension of time. Requests for an 
extension of the time to disclose a subject invention, to elect to 
retain title to a subject invention, or to file a patent application 
under subparagraphs (c)(1), (3), and (4) of this clause may be granted 
at the discretion of Patent Counsel or DOE.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or disclosure 
by the Government is subject to 35 U.S.C. 205 and 37 CFR Part 40.
    (d) Conditions When the Government May Obtain Title Notwithstanding 
an Advance Class Waiver. (1) Return of title to a subject invention. If 
the Contractor requests that DOE acquire title or rights from the 
Contractor in a subject invention, including an exceptional circumstance 
subject invention, to which the Contractor retained title or rights 
under subparagraph (b)(2) or subparagraph (b)(7) of this clause, DOE may 
acquire such title or rights from the Contractor, or DOE may decide 
against acquiring such title or rights from the Contractor, at DOE's 
sole discretion.
    (2) Failure to disclose or elect to retain title. Title vests in DOE 
and DOE may request, in writing, a formal assignment of title to a 
subject invention from the Contractor, and the Contractor shall convey 
title to the subject invention to DOE, if the Contractor elects not to 
retain title to the subject invention under an advance class waiver, or 
the Contractor fails to disclose or fails to elect to retain title to 
the subject invention within the times specified in subparagraphs (c)(1) 
and (c)(3) of this clause.
    (3) Failure to file domestic or foreign patent applications. In 
those countries in which the Contractor fails to file a patent 
application within the times specified in subparagraph (c)(4) of this 
clause, DOE may request, in writing, title to the subject invention from 
the Contractor, and the Contractor shall convey title to the subject 
invention to DOE; provided, however, that if the Contractor has filed a 
patent application in any country after the times specified in 
subparagraph (c)(4) of this clause, but prior to its receipt of DOE's 
written request for title, the Contractor continues to retain title in 
that country.
    (4) Discontinuation of patent protection by the Contractor. If the 
Contractor decides to discontinue the prosecution of a patent 
application, the payment of maintenance fees, or the defense of a 
subject invention in a reexamination or opposition proceeding, in any 
country, DOE may request, in writing, title to the subject invention 
from the Contractor, and the Contractor shall convey title to the 
subject invention to DOE.
    (5) Termination of advance class waiver. DOE may request, in 
writing, title to any subject inventions from the Contractor, and the 
Contractor shall convey title to the subject inventions to DOE, if the 
advance class waiver granted under subparagraph (b)(2) of this clause is 
terminated under paragraph (u) of this clause.
    (e) Minimum Rights of the Contractor. (1) Request for a Contractor 
license. Except for subject inventions that the Contractor fails to 
disclose within the time periods specified at subparagraph (c)(1) of 
this clause, the Contractor may request a revocable, nonexclusive, 
royalty-free license in each patent application filed in any country 
claiming a subject invention and any resulting patent in which the 
Government obtains title, and DOE may grant or refuse to grant such a 
request by the Contractor. If DOE grants the Contractor's request for a 
license, the Contractor's license extends to its domestic subsidiaries 
and affiliates, if any, within the corporate structure of which the 
Contractor is a party and includes the right to grant sublicenses of the 
same scope to the extent the Contractor was legally obligated to do so 
at the time the contract was awarded.
    (2) Transfer of a Contractor license. DOE shall approve any transfer 
of the Contractor's license in a subject invention, and DOE may 
determine that the Contractor's license is non-transferrable, on a case-
by-case basis.

[[Page 519]]

    (3) Revocation or modification of a Contractor license. DOE may 
revoke or modify the Contractor's domestic license to the extent 
necessary to achieve expeditious practical application of the subject 
invention pursuant to an application for an exclusive license submitted 
in accordance with applicable provisions in 37 CFR Part 404 and DOE 
licensing regulations. DOE may not revoke the Contractor's domestic 
license in that field of use or the geographical areas in which the 
Contractor, its licensees or its domestic subsidiaries or affiliates 
have achieved practical applications and continues to make the benefits 
of the invention reasonably accessible to the public. DOE may revoke or 
modify the Contractor's license in any foreign country to the extent the 
Contractor, its licensees, or its domestic subsidiaries or affiliates 
failed to achieve practical application in that foreign country.
    (4) Notice of revocation or modification of a Contractor license. 
Before revocation or modification of the license, DOE shall furnish the 
Contractor a written notice of its intention to revoke or modify the 
license, and the Contractor shall be allowed thirty (30) days from the 
date of the notice (or such other time as may be authorized by DOE for 
good cause shown by the Contractor) to show cause why the license should 
not be revoked or modified. The Contractor has the right to appeal any 
decision concerning the revocation or modification of its license, in 
accordance with applicable regulations in 37 CFR Part 404 and DOE 
licensing regulations.
    (f) Contractor Action to Protect the Government's Interest. (1) 
Execution and delivery of title or license instruments. The Contractor 
agrees to execute or have executed, and to deliver promptly to DOE all 
instruments necessary to accomplish the following actions:
    (i) establish or confirm the Government's rights throughout the 
world in subject inventions to which the Contractor elects to retain 
title;
    (ii) convey title in a subject invention to DOE pursuant to 
subparagraph (b)(5) and paragraph (d) of this clause; or
    (iii) enable the Government to obtain patent protection throughout 
the world in a subject invention to which the Government has title.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical and 
nontechnical employees, to disclose promptly in writing to Contractor 
personnel identified as responsible for the administration of patent 
matters and in a format suggested by the Contractor, each subject 
invention made under this contract, and to execute all papers necessary 
to file patent applications claiming subject inventions or to establish 
the Government's rights in the subject inventions. This disclosure 
format shall at a minimum include the information required by 
subparagraph (c)(1) of this clause. The Contractor shall instruct such 
employees, through employee agreements or other suitable educational 
programs, on the importance of reporting inventions in sufficient time 
to permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (3) Contractor procedures for reporting subject inventions to DOE. 
The Contractor agrees to establish and maintain effective procedures for 
ensuring the prompt identification and timely disclosure of subject 
inventions to DOE. The Contractor shall submit a written description of 
such procedures to the Contracting Officer, upon request, for evaluation 
and approval of the effectiveness of such procedures by the Contracting 
Officer.
    (4) Notification of discontinuation of patent protection. With 
respect to any subject invention for which the Contractor has 
responsibility for patent prosecution, the Contractor shall notify 
Patent Counsel of any decision to discontinue the prosecution of a 
patent application, payment of maintenance fees, or defense of a subject 
invention in a reexamination or opposition proceeding, in any country, 
not less than thirty (30) days before the expiration of the response 
period for any action required by the corresponding patent office.
    (5) Notification of Government rights. With respect to any subject 
invention to which the Contractor has title, the Contractor agrees to 
include, within the specification of any United States patent 
application and within any patent issuing thereon claiming a subject 
invention, the following statement, ``This invention was made with 
Government support under (identify the contract) awarded by the United 
States Department of Energy. The Government has certain rights in the 
invention.''
    (6) Avoidance of Royalty Charges. If the Contractor licenses a 
subject invention, the Contractor agrees to avoid royalty charges on 
acquisitions involving Government funds, including funds derived through 
a Military Assistance Program of the Government or otherwise derived 
through the Government, to refund any amounts received as royalty 
charges on a subject invention in acquisitions for, or on behalf of, the 
Government, and to provide for such refund in any instrument 
transferring rights in the subject invention to any party.
    (7) DOE approval of assignment of rights. Rights in a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE.
    (8) Small business firm licensees. The Contractor shall make efforts 
that are reasonable under the circumstances to attract licensees of 
subject inventions that are small business firms, and may give a 
preference to a small business firm when licensing a subject invention 
if the Contractor determines

[[Page 520]]

that the small business firm has a plan or proposal for marketing the 
invention which, if executed, is equally as likely to bring the 
invention to practical application as any plans or proposals from 
applicants that are not small business firms; provided, the Contractor 
is also satisfied that the small business firm has the capability and 
resources to carry out its plan or proposal. The decision as to whether 
to give a preference in any specific case is at the discretion of the 
Contractor.
    (9) Contractor licensing of subject inventions. To the extent that 
it provides the most effective technology transfer, licensing of subject 
inventions shall be administered by Contractor employees on location at 
the facility.
    (g) Subcontracts. (1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization or 
small business firm subcontractors. Unless otherwise authorized or 
directed by the Contracting Officer, the Contractor shall include the 
patent rights clause at 48 CFR 952.227-11, suitably modified to identify 
the parties, in all subcontracts, at any tier, for experimental, 
developmental, demonstration or research work to be performed by a small 
business firm or domestic nonprofit organization, except subcontracts 
which are subject to exceptional circumstances in accordance with 35 
U.S.C. 202 and subparagraph (b)(5) of this clause.
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations or small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties and any applicable exceptional 
circumstance, in any contract for experimental, developmental, 
demonstration or research work.
    (4) DOE and subcontractor contract. With respect to subcontracts at 
any tier, DOE, the subcontractor and Contractor agree that the mutual 
obligations of the parties created by this clause constitute a contract 
between the subcontractor and DOE with respect to those matters covered 
by this clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act in 
connection with proceedings under paragraph (j) of this clause.
    (5) Subcontractor refusal to accept terms of patent rights clause. 
If a prospective subcontractor refuses to accept the terms of a patent 
rights clause, the Contractor shall promptly submit a written notice to 
the Contracting Officer stating the subcontractor's reasons for such 
refusal and including relevant information for expediting disposition of 
the matter; and the Contractor shall not proceed with the subcontract 
without the written authorization of the Contracting Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing and 
identify the subcontractor, the applicable patent rights clause, the 
work to be performed under the subcontract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention, with 
a copy of the notification and identification to the Contracting 
Officer.
    (h) Reporting on Utilization of Subject Inventions. Upon request by 
DOE, the Contractor agrees to submit periodic reports, no more 
frequently than annually, describing the utilization of a subject 
invention or efforts made by the Contractor or its licensees or 
assignees to obtain utilization of the subject invention. The reports 
shall include information regarding the status of development, date of 
first commercial sale or use, gross royalties received by the 
Contractor, and other data and information reasonably specified by DOE. 
Upon request by DOE, the Contractor also agrees to provide reports in 
connection with any march-in proceedings undertaken by DOE, in 
accordance with paragraph (j) of this clause. If any data or information 
reported by the Contractor in accordance with this provision is 
considered privileged and confidential by the Contractor, its licensee, 
or assignee and the Contractor properly marks the data or information 
privileged or confidential, DOE agrees not to disclose such information 
to persons outside the Government, to the extent permitted by law.
    (i) Preference for United States Industry. Notwithstanding any other 
provision of this clause the Contractor agrees that with respect to any 
subject invention in which it retains title, neither it nor any assignee 
may grant to any person the exclusive right to use or sell any subject 
invention in the United States unless such person agrees that any 
products embodying the subject invention or produced through the use of 
the subject invention will be manufactured substantially in the United 
States. However, in individual cases, DOE may waive the requirement for 
such an agreement upon a showing by the Contractor or its assignee that 
reasonable but unsuccessful efforts have been made to grant licenses on 
similar terms to potential licensees that would be likely to

[[Page 521]]

manufacture substantially in the United States or that under the 
circumstances domestic manufacture is not commercially feasible.
    (j) March-In Rights. With respect to any subject invention to which 
the Contractor has elected to retain or is granted title, DOE may, in 
accordance with the procedures in the DOE patent waiver regulations, 
require the Contractor, an assignee or exclusive licensee of a subject 
invention to grant a nonexclusive, partially exclusive or exclusive 
license in any field of use to a responsible applicant or applicants, 
upon terms that are reasonable under the circumstances. If the 
Contractor, assignee or exclusive licensee refuses such a request, DOE 
has the right to grant such a license itself if DOE determines that--
    (1) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
that are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by government regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement to substantially 
manufacture in the United States and required by paragraph (i) of this 
clause has neither been obtained nor waived or because a licensee of the 
exclusive right to use or sell any subject invention in the United 
States is in breach of such agreement.
    (k) Communications. The Contractor shall direct any notification, 
disclosure, or request provided for in this clause to the Patent Counsel 
identified in the contract.
    (l) Reports. (1) Interim reports. Upon DOE's request, the Contractor 
shall submit to DOE, no more frequently than annually, a list of subject 
inventions disclosed to DOE during a specified period, or a statement 
that no subject inventions were made during the specified period; and/or 
a list of subcontracts containing a patent clause and awarded by the 
Contractor during a specified period, or a statement that no such 
subcontracts were awarded during the specified period. The interim 
report shall state whether the Contractor's invention disclosures were 
submitted to DOE in accordance with the requirements of subparagraphs 
(f)(3) and (f)(4) of this clause.
    (2) Final reports. Upon DOE's request, the Contractor shall submit 
to DOE, prior to closeout of the contract or within three (3) months of 
the date of completion of the contracted work, a list of all subject 
inventions disclosed during the performance period of the contract, or a 
statement that no subject inventions were made during the contract 
performance period; and/or a list of all subcontracts containing a 
patent clause and awarded by the Contractor during the contract 
performance period, or a statement that no such subcontracts were 
awarded during the contract performance period.
    (m) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first actually 
reduced to practice in the course of or under this contract, the 
Contractor agrees to and does hereby grant to the Government an 
irrevocable, nonexclusive, paid-up license in and to any inventions or 
discoveries regardless of when conceived or actually reduced to practice 
or acquired by the contractor at any time through completion of this 
contract and which are incorporated or embodied in the construction of 
the facility or which are utilized in the operation of the facility or 
which cover articles, materials, or products manufactured at the 
facility (1) to practice or have practiced by or for the Government at 
the facility, and (2) to transfer such license with the transfer of that 
facility. Notwithstanding the acceptance or exercise by the Government 
of these rights, the Government may contest at any time the 
enforceability, validity or scope of, or title to, any rights or patents 
herein licensed.
    (n) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act of 
1954, as amended, may be asserted with respect to any invention or 
discovery made or conceived in the course of or under this contract.
    (2) Patent Agreements. Except as otherwise authorized in writing by 
the Contracting Officer, the Contractor shall obtain patent agreements 
to effectuate the provisions of subparagraph (o)(1) of this clause from 
all persons who perform any part of the work under this contract, except 
nontechnical personnel, such as clerical employees and manual laborers.
    (o) Classified Inventions. (1) Approval for filing a foreign patent 
application. The Contractor shall not file or cause to be filed an 
application or registration for a patent disclosing a subject invention 
related to classified subject matter in any country other than the 
United States without first obtaining the written approval of the 
Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance with 
this clause the Contractor files a patent application in the United 
States disclosing a subject invention that is classified for reasons of 
security, the Contractor shall observe all applicable security 
regulations covering the transmission of classified subject matter. If 
the Contractor transmits a patent application disclosing a

[[Page 522]]

classified subject invention to the United States Patent and Trademark 
Office (USPTO), the Contractor shall submit a separate letter to the 
USPTO identifying the contract or contracts by agency and agreement 
number that require security classification markings to be placed on the 
patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees to 
include the substance of this clause in subcontracts at any tier that 
cover or are likely to cover subject matter classified for reasons of 
security.
    (p) Examination of Records Relating to Inventions. (1) Contractor 
compliance. Until the expiration of three (3) years after final payment 
under this contract, the Contracting Officer or any authorized 
representative may examine any books (including laboratory notebooks), 
records, and documents and other supporting data of the Contractor, 
which the Contracting Officer or authorized representative deems 
reasonably pertinent to the discovery or identification of subject 
inventions, including exceptional circumstance subject inventions, or to 
determine Contractor (and inventor) compliance with the requirements of 
this clause, including proper identification and disclosure of subject 
inventions, and establishment and maintenance of invention disclosure 
procedures.
    (2) Unreported inventions. If the Contracting Officer is aware of an 
invention that is not disclosed by the Contractor to DOE, and the 
Contracting Officer believes the unreported invention may be a subject 
invention, DOE may require the Contractor to submit to DOE a disclosure 
of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this paragraph 
is subject to appropriate conditions to protect the confidentiality of 
the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file for 
any patent application claiming the subject invention.
    (q) Patent Functions. Upon the written request of the Contracting 
Officer or Patent Counsel, the Contractor agrees to make reasonable 
efforts to support DOE in accomplishing patent-related functions for 
work arising out of the contract, including, but not limited to, the 
prosecution of patent applications, and the determination of questions 
of novelty, patentability, and inventorship.
    (r) Educational Awards Subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) any person who is 
subject to treaties or international agreements as set forth in 
paragraph (b)(6) of this clause or to agreements other than funding 
agreements. The Contracting Officer may disapprove of any such 
placement.
    (s) Annual Appraisal by Patent Counsel. Patent Counsel may conduct 
an annual appraisal to evaluate the Contractor's effectiveness in 
identifying and protecting subject inventions in accordance with DOE 
policy.
    (t) Publication. The Contractor shall receive approval from Patent 
Counsel prior to releasing or publishing information regarding 
scientific or technical developments conceived or first actually reduced 
to practice in the course of or under this contract, to ensure such 
release or publication does not adversely affect the patent rights of 
DOE or the Contractor.
    (u) Termination of Contractor's Advance Class Waiver. If a request 
by the Contractor for an advance class waiver pursuant to subparagraph 
(b)(2) of this clause or a determination of greater rights pursuant to 
paragraph (c) of this clause contains false material statements or fails 
to disclose material facts, and DOE relies on the false statements or 
omissions in granting the Contractor's request, the waiver or grant of 
any Government rights (in whole or in part) to the subject invention(s) 
may be terminated at the discretion of the Secretary of Energy or 
designee. Prior to termination, DOE shall provide the Contractor with 
written notification of the termination, including a statement of facts 
in support of the termination, and the Contractor shall be allowed 
thirty (30) days, or a longer period authorized by the Secretary of 
Energy or designee for good cause shown in writing by the Contractor, to 
show cause for not terminating the waiver or grant. Any termination of 
an advance class waiver or a determination of greater rights is subject 
to the Contractor's license as provided for in paragraph (f) of this 
clause.

                             (End of clause)

    Alternate 1 Weapons Related Subject Inventions. As prescribed at 
970.2703-2(g), insert the following as subparagraphs (a)(9)and (b)(10), 
respectively:

    (a) Definitions. (9) Weapons Related Subject Invention means any 
subject invention conceived or first actually reduced to practice in the 
course of or under work funded by or through defense programs, including 
Department of Defense and intelligence reimbursable work, or the Naval 
Nuclear Propulsion Program of the Department of Energy or the National 
Nuclear Security Administration.
    (b) Allocation of Principal Rights. (10) Weapons related subject 
inventions. Except to the

[[Page 523]]

extent that DOE is solely satisfied that the Contractor meets certain 
procedural requirements and DOE grants rights to the Contractor in 
weapons related subject inventions, the Contractor does not have a right 
to retain title to any weapons related subject inventions.

                           (End of alternate)

[65 FR 81009, Dec. 22, 2000, as amended at 67 FR 48571, July 25, 2002]



970.5228-1  Insurance--litigation and claims.

    As prescribed in 48 CFR 970.2803-2, insert the following clause:

               Insurance--Litigation and Claims (DEC 2000)

    (a) The contractor may, with the prior written authorization of the 
contracting officer, and shall, upon the request of the Government, 
initiate litigation against third parties, including proceedings before 
administrative agencies, in connection with this contract. The 
contractor shall proceed with such litigation in good faith and as 
directed from time to time by the contracting officer.
    (b) The contractor shall give the contracting officer immediate 
notice in writing of any legal proceeding, including any proceeding 
before an administrative agency, filed against the contractor arising 
out of the performance of this contract. Except as otherwise directed by 
the contracting officer, in writing, the contractor shall furnish 
immediately to the contracting officer copies of all pertinent papers 
received by the contractor with respect to such action. The contractor, 
with the prior written authorization of the contracting officer, shall 
proceed with such litigation in good faith and as directed from time to 
time by the contracting officer.
    (c)(1) Except as provided in paragraph (c)(2) of this clause, the 
contractor shall procure and maintain such bonds and insurance as 
required by law or approved in writing by the contracting officer.
    (2) The contractor may, with the approval of the contracting 
officer, maintain a self-insurance program; provided that, with respect 
to workers' compensation, the contractor is qualified pursuant to 
statutory authority.
    (3) All bonds and insurance required by this clause shall be in a 
form and amount and for those periods as the contracting officer may 
require or approve and with sureties and insurers approved by the 
contracting officer.
    (d) The contractor agrees to submit for the contracting officer's 
approval, to the extent and in the manner required by the contracting 
officer, any other bonds and insurance that are maintained by the 
contractor in connection with the performance of this contract and for 
which the contractor seeks reimbursement. If an insurance cost (whether 
a premium for commercial insurance or related to self-insurance) 
includes a portion covering costs made unallowable elsewhere in the 
contract, and the share of the cost for coverage for the unallowable 
cost is determinable, the portion of the cost that is otherwise an 
allowable cost under this contract is reimbursable to the extent 
determined by the contracting officer.
    (e) Except as provided in subparagraphs (g) and (h) of this clause, 
or specifically disallowed elsewhere in this contract, the contractor 
shall be reimbursed--
    (1) For that portion of the reasonable cost of bonds and insurance 
allocable to this contract required in accordance with contract terms or 
approved under this clause, and
    (2) For liabilities (and reasonable expenses incidental to such 
liabilities, including litigation costs) to third persons not 
compensated by insurance or otherwise without regard to and as an 
exception to the clause of this contract entitled, ``Obligation of 
Funds.''
    (f) The Government's liability under paragraph (e) of this clause is 
subject to the availability of appropriated funds. Nothing in this 
contract shall be construed as implying that the Congress will, at a 
later date, appropriate funds sufficient to meet deficiencies.
    (g) Notwithstanding any other provision of this contract, the 
contractor shall not be reimbursed for liabilities (and expenses 
incidental to such liabilities, including litigation costs, counsel 
fees, judgment and settlements)--
    (1) Which are otherwise unallowable by law or the provisions of this 
contract; or
    (2) For which the contractor has failed to insure or to maintain 
insurance as required by law, this contract, or by the written direction 
of the contracting officer.
    (h) In addition to the cost reimbursement limitations contained in 
48 CFR part 31, as supplemented by 48 CFR 970.31, and notwithstanding 
any other provision of this contract, the contractor's liabilities to 
third persons, including employees but excluding costs incidental to 
worker's compensation actions, (and any expenses incidental to such 
liabilities, including litigation costs, counsel fees, judgments and 
settlements) shall not be reimbursed if such liabilities were caused by 
contractor managerial personnel's--
    (1) Willful misconduct,
    (2) Lack of good faith, or
    (3) Failure to exercise prudent business judgment, which means 
failure to act in the same manner as a prudent person in the conduct of 
competitive business; or, in the case

[[Page 524]]

of a non-profit educational institution, failure to act in the manner 
that a prudent person would under the circumstances prevailing at the 
time the decision to incur the cost is made.
    (i) The burden of proof shall be upon the contractor to establish 
that costs covered by paragraph (h) of this clause are allowable and 
reasonable if, after an initial review of the facts, the contracting 
officer challenges a specific cost or informs the contractor that there 
is reason to believe that the cost results from willful misconduct, lack 
of good faith, or failure to exercise prudent business judgment by 
contractor managerial personnel.
    (j)(1) All litigation costs, including counsel fees, judgments and 
settlements shall be differentiated and accounted for by the contractor 
so as to be separately identifiable. If the contracting officer 
provisionally disallows such costs, then the contractor may not use 
funds advanced by DOE under the contract to finance the litigation.
    (2) Punitive damages are not allowable unless the act or failure to 
act which gave rise to the liability resulted from compliance with 
specific terms and conditions of the contract or written instructions 
from the contracting officer.
    (3) The portion of the cost of insurance obtained by the contractor 
that is allocable to coverage of liabilities referred to in paragraph 
(g)(1) of this clause is not allowable.
    (4) The term ``contractor's managerial personnel'' is defined in 
clause paragraph (j) of 48 CFR 970.5245-1.
    (k) The contractor may at its own expense and not as an allowable 
cost procure for its own protection insurance to compensate the 
contractor for any unallowable or unreimbursable costs incurred in 
connection with contract performance.
    (l) If any suit or action is filed or any claim is made against the 
contractor, the cost and expense of which may be reimbursable to the 
contractor under this contract, and the risk of which is then uninsured 
or is insured for less than the amount claimed, the contractor shall--
    (1) Immediately notify the contracting officer and promptly furnish 
copies of all pertinent papers received;
    (2) Authorize Department representatives to collaborate with: in-
house or DOE-approved outside counsel in settling or defending the 
claim; or counsel for the insurance carrier in settling or defending the 
claim if the amount of the liability claimed exceeds the amount of 
coverage, unless precluded by the terms of the insurance contract; and
    (3) Authorize Department representatives to settle the claim or to 
defend or represent the contractor in and/or to take charge of any 
litigation, if required by the Department, if the liability is not 
insured or covered by bond. In any action against more than one 
Department contractor, the Department may require the contractor to be 
represented by common counsel. Counsel for the contractor may, at the 
contractor's own expense, be associated with the Department 
representatives in any such claim or litigation.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000, as amended at 66 FR 4627, Jan. 18, 2001; 67 
FR 14873, Mar. 28, 2002]



970.5229-1  State and local taxes.

    As prescribed in 48 CFR 970.2904-1(b), insert the following clause 
in management and operating contracts. The requirement for the notice 
prescribed in paragraph (a) of the clause may be broadened to include 
all State and local taxes which may be claimed as allowable costs when 
considered to be appropriate.

                    State and Local Taxes (DEC 2000)

    (a) The contractor agrees to notify the contracting officer of any 
State or local tax, fee, or charge levied or purported to be levied on 
or collected from the contractor with respect to the contract work, any 
transaction thereunder, or property in the custody or control of the 
contractor and constituting an allowable item of cost if due and 
payable, but which the contractor has reason to believe, or the 
contracting officer has advised the contractor, is or may be 
inapplicable or invalid; and the contractor further agrees to refrain 
from paying any such tax, fee, or charge unless authorized in writing by 
the contracting officer. Any State or local tax, fee, or charge paid 
with the approval of the contracting officer or on the basis of advice 
from the contracting officer that such tax, fee, or charge is applicable 
and valid, and which would otherwise be an allowable item of cost, shall 
not be disallowed as an item of cost by reason of any subsequent ruling 
or determination that such tax, fee, or charge was in fact inapplicable 
or invalid.
    (b) The contractor agrees to take such action as may be required or 
approved by the contracting officer to cause any State or local tax, 
fee, or charge which would be an allowable cost to be paid under 
protest; and to take such action as may be required or approved by the 
contracting officer to seek recovery of any payments made, including 
assignment to the Government or its designee of all rights to an 
abatement or refund thereof, and granting permission for the Government 
to join with the contractor in any proceedings for the recovery thereof 
or to sue for recovery in the name of the contractor. If the contracting 
officer directs the contractor

[[Page 525]]

to institute litigation to enjoin the collection of or to recover 
payment of any such tax, fee, or charge referred to above, or if a claim 
or suit is filed against the contractor for a tax, fee, or charge it has 
refrained from paying in accordance with this clause, the procedures and 
requirements of the clause entitled ``Insurance-Litigation and Claims'' 
shall apply and the costs and expenses incurred by the contractor shall 
be allowable items of costs, as provided in this contract, together with 
the amount of any judgment rendered against the contractor.
    (c) The Government shall hold the contractor harmless from penalties 
and interest incurred through compliance with this clause. All 
recoveries or credits in respect of the foregoing taxes, fees, and 
charges (including interest) shall inure to and be for the sole benefit 
of the Government.

                             (End of clause)



970.5231-4  Preexisting conditions.

    As prescribed in 48 CFR 970.3170, insert the following clause:

                    Preexisting Conditions (DEC 2000)

    (a) The Department of Energy agrees to reimburse the contractor, and 
the contractor shall not be held responsible, for any liability 
(including without limitation, a claim involving strict or absolute 
liability and any civil fine or penalty), expense, or remediation cost, 
but limited to those of a civil nature, which may be incurred by, 
imposed on, or asserted against the contractor arising out of any 
condition, act, or failure to act which occurred before the contractor 
assumed responsibility on [Insert date contract began]. To the extent 
the acts or omissions of the contractor cause or add to any liability, 
expense or remediation cost resulting from conditions in existence prior 
to [Insert date contract began], the contractor shall be responsible in 
accordance with the terms and conditions of this contract.
    (b) The obligations of the Department of Energy under this clause 
are subject to the availability of appropriated funds.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.3170 (a), in 
contracts with incumbent management and operating contractors, 
substitute the following for paragraph (a) of the basic clause:

    (a) Any liability, obligation, loss, damage, claim (including 
without limitation, a claim involving strict or absolute liability), 
action, suit, civil fine or penalty, cost, expense or disbursement, 
which may be incurred or imposed, or asserted by any party and arising 
out of any condition, act or failure to act which occurred before 
[Insert date this clause was included in contract], in conjunction with 
the management and operation of [Insert name of facility], shall be 
deemed incurred under Contract No. [Insert number of prior contract].

    Alternate II (DEC 2000). As prescribed in 48 CFR 970.3170 (b), add 
the following paragraph (c) to the basic clause in contracts with 
management and operating contractors not previously working at that 
particular site or facility:

    (c) The contractor has the duty to inspect the facilities and sites 
and timely identify to the contracting officer those conditions which it 
believes could give rise to a liability, obligation, loss, damage, 
penalty, fine, claim, action, suit, cost, expense, or disbursement or 
areas of actual or potential noncompliance with the terms and conditions 
of this contract or applicable law or regulation. The contractor has the 
responsibility to take corrective action, as directed by the contracting 
officer and as required elsewhere in this contract.

                             (End of clause)



970.5232-1  Reduction or suspension of advance, partial, or progress 
payments upon finding of substantial evidence of fraud.

    As prescribed in 48 CFR 970.3200-1-1, insert the following clause:

 Reduction or Suspension of Advance, Partial, or Progress Payments (DEC 
                                  2000)

    (a) The contracting officer may reduce or suspend further advance, 
partial, or progress payments to the contractor upon a written 
determination by the Senior Procurement Executive that substantial 
evidence exists that the contractor's request for advance, partial, or 
progress payment is based on fraud.
    (b) The contractor shall be afforded a reasonable opportunity to 
respond in writing.

                             (End of clause)



970.5232-2  Payments and advances.

    As prescribed in 48 CFR 970.3270(a)(1), insert the following clause:

                    Payments and Advances (DEC 2000)

    (a) Installments of fixed-fee. The fixed-fee payable under this 
contract shall become due and payable in periodic installments in 
accordance with a schedule determined by the contracting officer. Fixed-
fee payments shall be made by direct payment or withdrawn from funds 
advanced or available under this contract, as determined by the 
contracting

[[Page 526]]

officer. The contracting officer may offset against any such fee payment 
the amounts owed to the Government by the contractor, including any 
amounts owed for disallowed costs under this contract. No fixed-fee 
payment may be withdrawn against the payments cleared financing 
arrangement without prior written approval of the contracting officer.
    (b) Payments on Account of Allowable Costs. The contracting officer 
and the contractor shall agree as to the extent to which payment for 
allowable costs or payments for other items specifically approved in 
writing by the contracting officer (for example, negotiated fixed 
amounts) shall be made from advances of Government funds. When pension 
contributions are paid by the contractor to the retirement fund less 
frequently than quarterly, accrued costs therefor shall be excluded from 
costs for payment purposes until such costs are paid. If pension 
contribution are paid on a quarterly or more frequent basis, accrual 
therefor may be included in costs for payment purposes, provided that 
they are paid to the fund within 30 days after the close of the period 
covered. If payments are not made to the fund within such 30-day period, 
pension contribution costs shall be excluded from cost for payment 
purposes until payment has been made.
    (c) Special financial institution account--use. All advances of 
Government funds shall be withdrawn pursuant to a payments cleared 
financing arrangement prescribed by DOE in favor of the financial 
institution or, at the option of the Government, shall be made by direct 
payment or other payment mechanism to the contractor, and shall be 
deposited only in the special financial institution account referred to 
in the Special Financial Institution Account Agreement, which is 
incorporated into this contract as Appendix--. No part of the funds in 
the special financial institution account shall be commingled with any 
funds of the contractor or used for a purpose other than that of making 
payments for costs allowable and, if applicable, fees earned under this 
contract, negotiated fixed amounts, or payments for other items 
specifically approved in writing by the contracting officer. If the 
contracting officer determines that the balance of such special 
financial institution account exceeds the contractor's current needs, 
the contractor shall promptly make such disposition of the excess as the 
contracting officer may direct.
    (d) Title to funds advanced. Title to the unexpended balance of any 
funds advanced and of any special financial institution account 
established pursuant to this clause shall remain in the Government and 
be superior to any claim or lien of the financial institution of deposit 
or others. It is understood that an advance to the contractor hereunder 
is not a loan to the contractor, and will not require the payment of 
interest by the contractor, and that the contractor acquires no right, 
title or interest in or to such advance other than the right to make 
expenditures therefrom, as provided in this clause.
    (e) Financial settlement. The Government shall promptly pay to the 
contractor the unpaid balance of allowable costs (or other items 
specifically approved in writing by the contracting officer) and fee 
upon termination of the work, expiration of the term of the contract, or 
completion of the work and its acceptance by the Government after:
    (1) Compliance by the contractor with DOE's patent clearance 
requirements, and
    (2) The furnishing by the contractor of:
    (i) An assignment of the contractor's rights to any refunds, 
rebates, allowances, accounts receivable, collections accruing to the 
contractor in connection with the work under this contract, or other 
credits applicable to allowable costs under the contract;
    (ii) A closing financial statement;
    (iii) The accounting for Government-owned property required by the 
clause entitled ``Property''; and
    (iv) A release discharging the Government, its officers, agents, and 
employees from all liabilities, obligations, and claims arising out of 
or under this contract subject only to the following exceptions:
    (A) Specified claims in stated amounts or in estimated amounts where 
the amounts are not susceptible to exact statement by the contractor;
    (B) Claims, together with reasonable expenses incidental thereto, 
based upon liabilities of the contractor to third parties arising out of 
the performance of this contract; provided that such claims are not 
known to the contractor on the date of the execution of the release; and 
provided further that the contractor gives notice of such claims in 
writing to the contracting officer promptly, but not more than one (1) 
year after the contractor's right of action first accrues. In addition, 
the contractor shall provide prompt notice to the contracting officer of 
all potential claims under this clause, whether in litigation or not 
(see also Contract Clause----, DEAR 970.5228-1, ``Insurance--Litigation 
and Claims'');
    (C) Claims for reimbursement of costs (other than expenses of the 
contractor by reason of any indemnification of the Government against 
patent liability), including reasonable expenses incidental thereto, 
incurred by the contractor under the provisions of this contract 
relating to patents; and
    (D) Claims recognizable under the clause entitled, Nuclear Hazards 
Indemnity Agreement.
    (3) In arriving at the amount due the contractor under this clause, 
there shall be deducted,
    (i) Any claim which the Government may have against the contractor 
in connection with this contract, and

[[Page 527]]

    (ii) Deductions due under the terms of this contract, and not 
otherwise recovered by or credited to the Government. The unliquidated 
balance of the special financial institution account may be applied to 
the amount due and any balance shall be returned to the Government 
forthwith.
    (f) Claims. Claims for credit against funds advanced for payment 
shall be accompanied by such supporting documents and justification as 
the contracting officer shall prescribe.
    (g) Discounts. The contractor shall take and afford the Government 
the advantage of all known and available cash and trade discounts, 
rebates, allowances, credits, salvage, and commissions unless the 
contracting officer finds that action is not in the best interest of the 
Government.
    (h) Collections. All collections accruing to the contractor in 
connection with the work under this contract, except for the 
contractor's fee and royalties or other income accruing to the 
contractor from technology transfer activities in accordance with this 
contract, shall be Government property and shall be processed and 
accounted for in accordance with applicable requirements imposed by the 
contracting officer pursuant to the Laws, regulations, and DOE 
directives clause of this contract and, to the extent consistent with 
those requirements, shall be deposited in the special financial 
institution account or otherwise made available for payment of allowable 
costs under this contract, unless otherwise directed by the contracting 
officer.
    (i) Direct payment of charges. The Government reserves the right, 
upon ten days written notice from the contracting officer to the 
contractor, to pay directly to the persons concerned, all amounts due 
which otherwise would be allowable under this contract. Any payment so 
made shall discharge the Government of all liability to the contractor 
therefor.
    (j) Determining allowable costs. The contracting officer shall 
determine allowable costs in accordance with the Federal Acquisition 
Regulation subpart 31.2 and the Department of Energy Acquisition 
Regulation subpart 48 CFR 970.31 in effect on the date of this contract 
and other provisions of this contract.

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(i), 
if a separate fixed-fee is provided for a separate item of work, 
paragraph (a) of the basic clause should be modified to permit payment 
of the entire fixed-fee upon completion of that item.
    Alternate II (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(ii), 
when total available fee provisions are used, replace paragraph (a) of 
the basic clause with the following paragraph (a):

    (a) Payment of Total available fee: Base Fee and Performance Fee. 
The base fee amount, if any, is payable in equal monthly installments. 
Total available fee amount earned is payable following the Government's 
Determination of Total Available Fee Amount Earned in accordance with 
the clause of this contract entitled ``Total Available Fee: Base Fee 
Amount and Performance Fee Amount.'' Base fee amount and total available 
fee amount earned payments shall be made by direct payment or withdrawn 
from funds advanced or available under this contract, as determined by 
the contracting officer. The contracting officer may offset against any 
such fee payment the amounts owed to the Government by the contractor, 
including any amounts owed for disallowed costs under this contract. No 
base fee amount or total available fee amount earned payment may be 
withdrawn against the payments cleared financing arrangement without the 
prior written approval of the contracting officer.

    Alternate III (DEC 2000). As prescribed in 48 CFR 
970.3270(a)(1)(iii), the following paragraph (k) shall be included in 
management and operating contracts with integrated accounting systems:

    (k) Review and approval of costs incurred. The contractor shall 
prepare and submit annually as of September 30, a ``Statement of Costs 
Incurred and Claimed'' (Cost Statement) for the total of net 
expenditures accrued (i.e., net costs incurred) for the period covered 
by the Cost Statement. The contractor shall certify the Cost Statement 
subject to the penalty provisions for unallowable costs as stated in 
sections 306(b) and (i) of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 256), as amended. DOE, after audit and 
appropriate adjustment, will approve such Cost Statement. This approval 
by DOE will constitute an acknowledgment by DOE that the net costs 
incurred are allowable under the contract and that they have been 
recorded in the accounts maintained by the contractor in accordance with 
DOE accounting policies, but will not relieve the contractor of 
responsibility for DOE's assets in its care, for appropriate subsequent 
adjustments, or for errors later becoming known to DOE.

    Alternate IV (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(iv), 
the following paragraph (k) shall be included in management and 
operating contracts without integrated accounting systems:


[[Page 528]]


    (k) Certification and penalties. The contractor shall prepare and 
submit a ``Statement of Costs Incurred and Claimed'' (Cost Statement) 
for the total of net expenditures incurred for the period covered by the 
Cost Statement. It is anticipated that this will be an annual submission 
unless otherwise agreed to by the contracting officer. The contractor 
shall certify the Cost Statement subject to the penalty provisions for 
unallowable costs as stated in sections 306(b) and (i) of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 256), as 
amended.



970.5232-3  Accounts, records, and inspection.

    As prescribed in 48 CFR 970.3270(a)(2), insert the following clause:

              Accounts, Records, and Inspection (DEC 2000)

    (a) Accounts. The contractor shall maintain a separate and distinct 
set of accounts, records, documents, and other evidence showing and 
supporting: all allowable costs incurred; collections accruing to the 
contractor in connection with the work under this contract, other 
applicable credits, negotiated fixed amounts, and fee accruals under 
this contract; and the receipt, use, and disposition of all Government 
property coming into the possession of the contractor under this 
contract. The system of accounts employed by the contractor shall be 
satisfactory to DOE and in accordance with generally accepted accounting 
principles consistently applied.
    (b) Inspection and audit of accounts and records. All books of 
account and records relating to this contract shall be subject to 
inspection and audit by DOE or its designees in accordance with the 
provisions of Clause ----, Access to and ownership of records, at all 
reasonable times, before and during the period of retention provided for 
in paragraph (d) of this clause, and the contractor shall afford DOE 
proper facilities for such inspection and audit.
    (c) Audit of subcontractors' records. The contractor also agrees, 
with respect to any subcontracts (including fixed-price or unit-price 
subcontracts or purchase orders) where, under the terms of the 
subcontract, costs incurred are a factor in determining the amount 
payable to the subcontractor of any tier, to either conduct an audit of 
the subcontractor's costs or arrange for such an audit to be performed 
by the cognizant government audit agency through the contracting 
officer.
    (d) Disposition of records. Except as agreed upon by the Government 
and the contractor, all financial and cost reports, books of account and 
supporting documents, system files, data bases, and other data 
evidencing costs allowable, collections accruing to the contractor in 
connection with the work under this contract, other applicable credits, 
and fee accruals under this contract, shall be the property of the 
Government, and shall be delivered to the Government or otherwise 
disposed of by the contractor either as the contracting officer may from 
time to time direct during the progress of the work or, in any event, as 
the contracting officer shall direct upon completion or termination of 
this contract and final audit of accounts hereunder. Except as otherwise 
provided in this contract, including provisions of Clause----, Access to 
and ownership of records, all other records in the possession of the 
contractor relating to this contract shall be preserved by the 
contractor for a period of three years after final payment under this 
contract or otherwise disposed of in such manner as may be agreed upon 
by the Government and the contractor.
    (e) Reports. The contractor shall furnish such progress reports and 
schedules, financial and cost reports, and other reports concerning the 
work under this contract as the contracting officer may from time to 
time require.
    (f) Inspections. The DOE shall have the right to inspect the work 
and activities of the contractor under this contract at such time and in 
such manner as it shall deem appropriate.
    (g) Subcontracts. The contractor further agrees to require the 
inclusion of provisions similar to those in paragraphs (a) through (g) 
and paragraph (h) of this clause in all subcontracts (including fixed-
price or unit-price subcontracts or purchase orders) of any tier entered 
into hereunder where, under the terms of the subcontract, costs incurred 
are a factor in determining the amount payable to the subcontractor.
    (h) Comptroller General. (1) The Comptroller General of the United 
States, or an authorized representative, shall have access to and the 
right to examine any of the contractor's directly pertinent records 
involving transactions related to this contract or a subcontract 
hereunder.
    (2) This paragraph may not be construed to require the contractor or 
subcontractor to create or maintain any record that the contractor or 
subcontractor does not maintain in the ordinary course of business or 
pursuant to a provision of law.
    (3) Nothing in this contract shall be deemed to preclude an audit by 
the General Accounting Office of any transaction under this contract.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(2)(i), 
if the contract includes the clause at 48 CFR 52.215-11, Price Reduction 
for Defective

[[Page 529]]

Cost or Pricing Data, the basic clause shall be modified as follows:
    (a) Paragraph (a) of the basic clause shall be modified by adding 
the words ``or anticipated to be incurred'' after the words ``allowable 
costs incurred.''
    (b) Paragraph (g) of the basic clause shall be modified by adding 
the following:
    The contractor further agrees to include an ``Audit'' clause, the 
substance of which is the ``Audit'' clause set forth at 48 CFR 52.215-2, 
in each subcontract which does not include provisions similar to those 
in paragraph (a) through paragraph (g) and paragraph (h) of this clause, 
but which contains a ``defective cost or pricing data'' clause.
    Alternate II (DEC 2000). As prescribed in 48 CFR 970.3270(a)(2)(ii), 
in cost-reimbursement contracts involving an estimated cost exceeding $5 
million and expected to run for more than 2 years, and any other cost-
reimbursement contract determined by the Head of the Contracting 
Activity in which the contractor has an established internal audit 
organization, add the following paragraph (i) to the basic clause:

    (i) Internal audit. The contractor agrees to conduct an internal 
audit and examination satisfactory to DOE of the records, operations, 
expenses, and the transactions with respect to costs claimed to be 
allowable under this contract annually and at such other times as may be 
mutually agreed upon. The results of such audit, including the working 
papers, shall be submitted or made available to the contracting officer. 
The contractor shall include this paragraph (i) in all cost-
reimbursement subcontracts with an estimated cost exceeding $5 million 
and expected to run for more than 2 years, and any other cost-
reimbursement subcontract determined by the Head of the Contracting 
Activity.



970.5232-4  Obligation of funds.

    As prescribed in 48 CFR 970.3270(a)(3), insert the following clause:

                     Obligation of Funds (DEC 2000)

    (a) Obligation of funds. The amount presently obligated by the 
Government with respect to this contract is ---- dollars ($----). Such 
amount may be increased unilaterally by DOE by written notice to the 
contractor and may be increased or decreased by written agreement of the 
parties (whether or not by formal modification of this contract). 
Estimated collections from others for work and services to be performed 
under this contract are not included in the amount presently obligated. 
Such collections, to the extent actually received by the contractor, 
shall be processed and accounted for in accordance with applicable 
requirements imposed by the contracting officer pursuant to the Laws, 
regulations, and DOE directives clause of this contract. Nothing in this 
paragraph is to be construed as authorizing the contractor to exceed 
limitations stated in financial plans established by DOE and furnished 
to the contractor from time to time under this contract.
    (b) Limitation on payment by the Government. Except as otherwise 
provided in this contract and except for costs which may be incurred by 
the contractor pursuant to the Termination clause of this contract or 
costs of claims allowable under the contract occurring after completion 
or termination and not released by the contractor at the time of 
financial settlement of the contract in accordance with the clause 
entitled ``Payments and Advances,'' payment by the Government under this 
contract on account of allowable costs shall not, in the aggregate, 
exceed the amount obligated with respect to this contract, less the 
contractor's fee and any negotiated fixed amount. Unless expressly 
negated in this contract, payment on account of those costs excepted in 
the preceding sentence which are in excess of the amount obligated with 
respect to this contract shall be subject to the availability of:
    (1) collections accruing to the contractor in connection with the 
work under this contract and processed and accounted for in accordance 
with applicable requirements imposed by the contracting officer pursuant 
to the Laws, regulations, and DOE directives clause of this contract, 
and
    (2) other funds which DOE may legally use for such purpose, provided 
DOE will use its best efforts to obtain the appropriation of funds for 
this purpose if not otherwise available.
    (c) Notices--Contractor excused from further performance. The 
contractor shall notify DOE in writing whenever the unexpended balance 
of available funds (including collections available under paragraph (a) 
of this clause), plus the contractor's best estimate of collections to 
be received and available during the ---- day period hereinafter 
specified, is in the contractor's best judgment sufficient to continue 
contract operations at the programmed rate for only ---- days and to 
cover the contractor's unpaid fee and any negotiated fixed amounts, and 
outstanding encumbrances and liabilities on account of costs allowable 
under the contract at the end of such period. Whenever the unexpended 
balance of available funds (including collections available under 
paragraph (a) of this clause), less the amount of the contractor's fee 
then earned but not paid and any negotiated fixed amounts, is in the 
contractor's

[[Page 530]]

best judgment sufficient only to liquidate outstanding encumbrances and 
liabilities on account of costs allowable under this contract, the 
contractor shall immediately notify DOE and shall make no further 
encumbrances or expenditures (except to liquidate existing encumbrances 
and liabilities), and, unless the parties otherwise agree, the 
contractor shall be excused from further performance (except such 
performance as may become necessary in connection with termination by 
the Government) and the performance of all work hereunder will be deemed 
to have been terminated for the convenience of the Government in 
accordance with the provisions of the Termination clause of this 
contract.
    (d) Financial plans; cost and encumbrance limitations. In addition 
to the limitations provided for elsewhere in this contract, DOE may, 
through financial plans, such as Approved Funding Programs, or other 
directives issued to the contractor, establish controls on the costs to 
be incurred and encumbrances to be made in the performance of the 
contract work. Such plans and directives may be amended or supplemented 
from time to time by DOE. The contractor agrees
    (1) to comply with the specific limitations (ceilings) on costs and 
encumbrances set forth in such plans and directives,
    (2) to comply with other requirements of such plans and directives, 
and
    (3) to notify DOE promptly, in writing, whenever it has reason to 
believe that any limitation on costs and encumbrances will be exceeded 
or substantially underrun.
    (e) Government's right to terminate not affected. The giving of any 
notice under this clause shall not be construed to waive or impair any 
right of the Government to terminate the contract under the provisions 
of the Termination clause of this contract.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(3)(i), 
paragraph (d) of the clause may be omitted in contracts which, expressly 
or otherwise, provide a contractual basis for equivalent controls in a 
separate clause.



970.5232-5  Liability with respect to cost accounting standards.

    As prescribed in 48 CFR 970.3270(a)(5), insert the following clause:

     Liability With Respect to Cost Accounting Standards (DEC 2000)

    (a) The contractor is not liable to the Government for increased 
costs or interest resulting from its failure to comply with the clauses 
of this contract entitled, ``Cost Accounting Standards,'' and 
``Administration of Cost Accounting Standards,'' if its failure to 
comply with the clauses is caused by the contractor's compliance with 
published DOE financial management policies and procedures or other 
requirements established by the Department's Chief Financial Officer or 
Procurement Executive.
    (b) The contractor is not liable to the Government for increased 
costs or interest resulting from its subcontractors' failure to comply 
with the clauses at FAR 52.230-2, ``Cost Accounting Standards,'' and FAR 
52.230-6, ``Administration of Cost Accounting Standards,'' if the 
contractor includes in each covered subcontract a clause making the 
subcontractor liable to the Government for increased costs or interest 
resulting from the subcontractor's failure to comply with the clauses; 
and the contractor seeks the subcontract price adjustment and cooperates 
with the Government in the Government's attempts to recover from the 
subcontractor.



970.5232-6  Work for others funding authorization.

    As prescribed in 48 CFR 970.3270(a)(6), insert the following clause:

            Work for Others Funding Authorization (DEC 2000)

    Any uncollectible receivables resulting from the contractor 
utilizing contractor corporate funding for reimbursable work shall be 
the responsibility of the contractor, and the United States Government 
shall have no liability to the contractor for the contractor's 
uncollected receivables. The contractor is permitted to provide advance 
payment utilizing contractor corporate funds for reimbursable work to be 
performed by the contractor for a non-Federal entity in instances where 
advance payment from that entity is required under the Laws, 
regulations, and DOE directives clause of this contract and such advance 
cannot be obtained. The contractor is also permitted to provide advance 
payment utilizing contractor corporate funds to continue reimbursable 
work to be performed by the contractor for a Federal entity when the 
term or the funds on a Federal interagency agreement required under the 
Laws, regulations, and DOE directives clause of this contract have 
elapsed. The contractor's utilization of contractor corporate funds does 
not relieve the contractor of its responsibility to comply with all 
requirements for Work for Others applicable to this contract.



970.5232-7  Financial management system.

    As prescribed in 48 CFR 970.3270(b)(1), insert the following clause:

[[Page 531]]

                 Financial Management System (DEC 2000)

    The contractor shall maintain and administer a financial management 
system that is suitable to provide proper accounting in accordance with 
DOE requirements for assets, liabilities, collections accruing to the 
contractor in connection with the work under this contract, 
expenditures, costs, and encumbrances; permits the preparation of 
accounts and accurate, reliable financial and statistical reports; and 
assures that accountability for the assets can be maintained. The 
contractor shall submit to DOE for written approval an annual plan for 
new financial management systems and/or subsystems and major 
enhancements and/or upgrades to the currently existing financial systems 
and/or subsystems. The contractor shall notify DOE thirty (30) days in 
advance of any planned implementation of any substantial deviation from 
this plan and, as requested by the contracting officer, shall submit any 
such deviation to DOE for written approval before implementation.



970.5232-8  Integrated accounting.

    As prescribed in 48 CFR 970.3270(b)(2), insert the following clause:

                    Integrated Accounting (DEC 2000)

    Integrated accounting procedures are required for use under this 
contract. The contractor's financial management system shall include an 
integrated accounting system that is linked to DOE's accounts through 
the use of reciprocal accounts and that has electronic capability to 
transmit monthly and year-end self-balancing trial balances to the 
Department's Primary Accounting System for reporting financial activity 
under this contract in accordance with requirements imposed by the 
contracting officer pursuant to the Laws, regulations, and DOE 
directives clause of this contract.



970.5235-1  Federally funded research and development center sponsoring 
agreement.

    As prescribed in 48 CFR 970.3501-4, the contracting officer shall 
insert the following clause:

 Federally Funded Research and Development Center Sponsoring Agreement 
                               (DEC 2000)

    (a) Pursuant to 48 CFR 35.017-1, this contract constitutes the 
sponsoring agreement between the Department of Energy and the 
contractor, which establishes the relationship for the operation of a 
Department of Energy sponsored Federally Funded Research and Development 
Center (FFRDC).
    (b) In the operation of this FFRDC, the contractor may be provided 
access beyond that which is common to the normal contractual 
relationship, to Government and supplier data, including sensitive and 
proprietary data, and to Government employees and facilities needed to 
discharge its responsibilities efficiently and effectively. Because of 
this special relationship, it is essential that the FFRDC be operated in 
the public interest with objectivity and independence, be free from 
organizational conflicts of interest, and have full disclosure of its 
affairs to the Department of Energy.
    (c) Unless otherwise provided by the contract, the contractor may 
accept work from a nonsponsor (as defined in 48 CFR 35.017) in 
accordance with the requirements and limitations of DOE Order 481.1, 
Work for Others (Non-Department of Energy Funded Work) (see current 
version).
    (d) As an FFRDC, the contractor shall not use its privileged 
information or access to government facilities to compete with the 
private sector. Specific guidance on restricted activities is contained 
in DOE Order 481.1.

                             (End of clause)



970.5236-1  Government facility subcontract approval.

    As prescribed in 48 CFR 970.3605-2, insert the following clause:

           Government Facility Subcontract Approval (DEC 2000)

    Upon request of the contracting officer and acceptance thereof by 
the contractor, the contractor shall procure, by subcontract, the 
construction of new facilities or the alteration or repair of 
Government-owned facilities at the plant. Any subcontract entered into 
under this paragraph shall be subject to the written approval of the 
contracting officer and shall contain the provisions relative to labor 
and wages required by law to be included in contracts for the 
construction, alteration, and/or repair, including painting and 
decorating, of a public building or public work.

                             (End of clause)



970.5237-2  Facilities management.

    As prescribed in 48 CFR 970.3770-2, insert the following clause:

                    Facilities Management (DEC 2000)

    Copies of DOE Directives referenced herein are available from the 
contracting officer.
    (a) Site development planning. The Government shall provide to the 
contractor site development guidance for the facilities and lands for 
which the contractor is responsible

[[Page 532]]

under the terms and conditions of this contract. Based upon this 
guidance, the contractor shall prepare, and maintain through annual 
updates, a Long-Range Site Development Plan (Plan) to reflect those 
actions necessary to keep the development of these facilities current 
with the needs of the Government and allow the contractor to 
successfully accomplish the work required under this contract. In 
developing this Plan, the contractor shall follow the procedural 
guidance set forth in the applicable DOE Directives in the Life Cycle 
Facility Operations Series listed elsewhere in this contract. The 
contractor shall use the Plan to manage and control the development of 
facilities and lands. All plans and revisions shall be approved by the 
Government.
    (b) General design criteria. The general design criteria which shall 
be utilized by the contractor in managing the site for which it is 
responsible under this contract are those specified in the applicable 
DOE Directives in the 6430, Design Criteria, series listed elsewhere in 
this contract. The contractor shall comply with these mandatory, 
minimally acceptable requirements for all facility designs with regard 
to any building acquisition, new facility, facility addition or 
alteration or facility lease undertaken as part of the site development 
activities of paragraph (a) of this clause. This includes on-site 
constructed buildings, pre-engineered buildings, plan-fabricated modular 
buildings, and temporary facilities. For existing facilities, original 
design criteria apply to the structure in general; however, additions or 
modifications shall comply with this directive and the associated latest 
editions of the references therein. An exception may be granted for off-
site office space being leased by the contractor on a temporary basis.
    (c) Energy management. The contractor shall manage the facilities 
for which it is responsible under the terms and conditions of this 
contract in an energy efficient manner in accordance with the applicable 
DOE Directives in the Life Cycle Facility Operations Series listed 
elsewhere in this contract. The contractor shall develop a 10-year 
energy management plan for each site with annual reviews and revisions. 
The contractor shall submit an annual report on progress toward 
achieving the goals of the 10-year plan for each individual site, and an 
energy conservation analysis report for each new building or building 
addition project. Any acquisition of utility services by the contractor 
shall be conducted in accordance with 48 CFR 970.41.
    (d) Subcontract Requirements. To the extent the contractor 
subcontracts performance of any of the responsibilities discussed in 
this clause, the subcontract shall contain the requirements of this 
clause relative to the subcontracted responsibilities.

                             (End of clause)



970.5242-1  Penalties for unallowable costs.

    As prescribed in 48 CFR 970.4207-03-70, insert the following clause:

               Penalties for Unallowable Costs (DEC 2000)

    (a) Contractors which include unallowable cost in a submission for 
settlement for cost incurred, may be subject to penalties.
    (b) If, during the review of a submission for settlement of cost 
incurred, the contracting officer determines that the submission 
contains an expressly unallowable cost or a cost determined to be 
unallowable prior to the submission, the contracting officer shall 
assess a penalty.
    (c) Unallowable costs are either expressly unallowable or determined 
unallowable.
    (1) An expressly unallowable cost is a particular item or type of 
cost which, under the express provisions of an applicable law, 
regulation, or this contract, is specifically named and stated to be 
unallowable.
    (2) A cost determined unallowable is one which, for that contractor,
    (i) was subject to a contracting officer's final decision and not 
appealed;
    (ii) the Department's Board of Contract Appeals or a court has 
previously ruled as unallowable; or
    (iii) was mutually agreed to be unallowable.
    (d) If the contracting officer determines that a cost submitted by 
the contractor in its submission for settlement of cost incurred is:
    (1) expressly unallowable, then the contracting officer shall assess 
a penalty in an amount equal to the disallowed cost allocated to this 
contract plus interest on the paid portion of the disallowed cost. 
Interest shall be computed from the date of overpayment to the date of 
repayment using the interest rate specified by the Secretary of the 
Treasury pursuant to Pub. L. 92-41 (85 Stat. 97); or
    (2) determined unallowable, then the contracting officer shall 
assess a penalty in an amount equal to two times the amount of the 
disallowed cost allocated to this contract.
    (e) The contracting officer may waive the penalty provisions when
    (1) the contractor withdraws the submission before the formal 
initiation of an audit of the submission and submits a revised 
submission;
    (2) the amount of the unallowable costs allocated to covered 
contracts is $10,000 or less; or
    (3) the contractor demonstrates to the contracting officer's 
satisfaction that:

[[Page 533]]

    (i) it has established appropriate policies, personnel training, and 
an internal control and review system that provides assurances that 
unallowable costs subject to penalties are precluded from the 
contractor's submission for settlement of costs; and
    (ii) the unallowable costs subject to the penalty were inadvertently 
incorporated into the submission.

                             (End of clause)



970.5243-1  Changes.

    As prescribed in 48 CFR 970.4302-1, the contracting officer shall 
insert the following clause in all management and operating contracts:

                           Changes (DEC 2000)

    (a) Changes and adjustment of fee. The contracting officer may at 
any time and without notice to the sureties, if any, issue written 
directions within the general scope of this contract requiring 
additional work or directing the omission of, or variation in, work 
covered by this contract. If any such direction results in a material 
change in the amount or character of the work described in the 
``Statement of Work,'' an equitable adjustment of the fee, if any, shall 
be made in accordance with the agreement of the parties and the contract 
shall be modified in writing accordingly. Any claim by the contractor 
for an adjustment under this clause must be asserted in writing within 
30 days from the date of receipt by the contractor of the notification 
of change; provided, however, that the contracting officer, if it is 
determined that the facts justify such action, may receive and act upon 
any such claim asserted at any time prior to final payment under this 
contract. A failure to agree on an equitable adjustment under this 
clause shall be deemed to be a dispute within the meaning of the clause 
entitled ``Disputes.''
    (b) Work to continue. Nothing contained in this clause shall excuse 
the contractor from proceeding with the prosecution of the work in 
accordance with the requirements of any direction hereunder.

                             (End of clause)



970.5244-1  Contractor purchasing system.

    As prescribed in 48 CFR 970.4402-5, insert the following clause:

                 Contractor Purchasing System (DEC 2000)

    (a) General. The contractor shall develop, implement, and maintain 
formal policies, practices, and procedures to be used in the award of 
subcontracts consistent with this clause and 48 CFR 970.44. The 
contractor's purchasing system and methods shall be fully documented, 
consistently applied, and acceptable to DOE in accordance with 48 CFR 
970.4401-1. The contractor shall maintain file documentation which is 
appropriate to the value of the purchase and is adequate to establish 
the propriety of the transaction and the price paid. The contractor's 
purchasing performance will be evaluated against such performance 
criteria and measures as may be set forth elsewhere in this contract. 
DOE reserves the right at any time to require that the contractor submit 
for approval any or all purchases under this contract. The contractor 
shall not purchase any item or service the purchase of which is 
expressly prohibited by the written direction of DOE and shall use such 
special and directed sources as may be expressly required by the DOE 
contracting officer. DOE will conduct periodic appraisals of the 
contractor's management of all facets of the purchasing function, 
including the contractor's compliance with its approved system and 
methods. Such appraisals will be performed through the conduct of 
Contractor Purchasing System Reviews in accordance with 48 CFR subpart 
44.3, or, when approved by the contracting officer, through the 
contractor's participation in the conduct of the Balanced Scorecard 
performance measurement and performance management system. The 
contractor's approved purchasing system and methods shall include the 
requirements set forth in paragraphs (b) through (y) of this clause.
    (b) Acquisition of utility services. Utility services shall be 
acquired in accordance with the requirements of 48 CFR 970.41.
    (c) Acquisition of Real Property. Real property shall be acquired in 
accordance with 48 CFR Subpart 917.74.
    (d) Advance Notice of Proposed Subcontract Awards. Advance notice 
shall be provided in accordance with 48 CFR 970.4401-3.
    (e) Audit of Subcontractors. (1) The contractor shall provide for:
    (i) periodic post-award audit of cost-reimbursement subcontractors 
at all tiers, and
    (ii) audits, where necessary, to provide a valid basis for pre-award 
or cost or price analysis.
    (2) Responsibility for determining the costs allowable under each 
cost-reimbursement subcontract remains with the contractor or next 
higher-tier subcontractor. The contractor shall provide, in appropriate 
cases, for the timely involvement of the contractor and the DOE 
contracting officer in resolution of subcontract cost allowability.
    (3) Where audits of subcontractors at any tier are required, 
arrangements may be made to have the cognizant Federal agency perform 
the audit of the subcontract. These arrangements shall be made 
administratively between DOE and the other agency involved and shall 
provide for the cognizant agency to audit in an appropriate manner in 
light of

[[Page 534]]

the magnitude and nature of the subcontract. In no case, however, shall 
these arrangements preclude determination by the DOE contracting officer 
of the allowability or unallowability of subcontractor costs claimed for 
reimbursement by the contractor.
    (4) Allowable costs for cost reimbursable subcontracts are to be 
determined in accordance with the cost principles of 48 CFR Part 31, 
appropriate for the type of organization to which the subcontract is to 
be awarded, as supplemented by 48 CFR Part 931. Allowable costs in the 
purchase or transfer from contractor-affiliated sources shall be 
determined in accordance with 48 CFR 970.4402-3 and 48 CFR 970.3102-3-
21(b).
    (f) Bonds and Insurance. (1) The contractor shall require 
performance bonds in penal amounts as set forth in 48 CFR 28.102-2(a) 
for all fixed priced and unit-priced construction subcontracts in excess 
of $100,000. The contractor shall consider the use of performance bonds 
in fixed price nonconstruction subcontracts, where appropriate.
    (2) For fixed-price, unit-priced and cost reimbursement construction 
subcontracts in excess of $100,000 a payment bond shall be obtained on 
Standard Form 25A modified to name the contractor as well as the United 
States of America as obligees. The penal amounts shall be determined in 
accordance with 48 CFR 28.102-2(b).
    (3) For fixed-price, unit-priced and cost-reimbursement construction 
subcontracts, greater than $25,000, but not greater than $100,000, the 
contractor shall select two or more of the payment protections at 48 CFR 
28.102-1(b), giving particular consideration to the inclusion of an 
irrevocable letter of credit as one of the selected alternatives.
    (4) A subcontractor may have more than one acceptable surety in both 
construction and other subcontracts, provided that in no case will the 
liability of any one surety exceed the maximum penal sum for which it is 
qualified for any one obligation. For subcontracts other than 
construction, a co-surety (two or more sureties together) may reinsure 
amounts in excess of their individual capacity, with each surety having 
the required underwriting capacity that appears on the list of 
acceptable corporate sureties.
    (g) Buy American. The contractor shall comply with the provisions of 
the Buy American Act as reflected in 48 CFR 52.225-3 and 48 CFR 52.225-
5. The contractor shall forward determinations of nonavailability of 
individual items to the DOE contracting officer for approval. Items in 
excess of $100,000 require the prior concurrence of the Head of 
Contracting Activity. If, however, the contractor has an approved 
purchasing system, the Head of the Contracting Activity may authorize 
the contractor to make determinations of nonavailability for individual 
items valued at $100,000 or less.
    (h) Construction and Architect-Engineer Subcontracts. (1) 
Independent Estimates. A detailed, independent estimate of costs shall 
be prepared for all construction work to be subcontracted.
    (2) Specifications. Specifications for construction shall be 
prepared in accordance with the DOE publication entitled ``General 
Design Criteria Manual.''
    (3) Prevention of Conflict of Interest. (i) The contractor shall not 
award a subcontract for construction to the architect-engineer firm or 
an affiliate that prepared the design. This prohibition does not 
preclude the award of a ``turnkey'' subcontract so long as the 
subcontractor assumes all liability for defects in design and 
construction and consequential damages.
    (ii) The contractor shall not award both a cost-reimbursement 
subcontract and a fixed-price subcontract for construction or architect-
engineer services or any combination thereof to the same firm where 
those subcontracts will be performed at the same site.
    (iii) The contractor shall not employ the construction subcontractor 
or an affiliate to inspect the firm's work. The contractor shall assure 
that the working relationships of the construction subcontractor and the 
subcontractor inspecting its work and the authority of the inspector are 
clearly defined.
    (i) Contractor-Affiliated Sources. Equipment, materials, supplies, 
or services from a contractor-affiliated source shall be purchased or 
transferred in accordance with 48 CFR 970.4402-3.
    (j) Contractor-Subcontractor Relationship. The obligations of the 
contractor under paragraph (a) of this clause, including the development 
of the purchasing system and methods, and purchases made pursuant 
thereto, shall not relieve the contractor of any obligation under this 
contract (including, among other things, the obligation to properly 
supervise, administer, and coordinate the work of subcontractors). 
Subcontracts shall be in the name of the contractor, and shall not bind 
or purport to bind the Government.
    (k) Government Property. Identification, inspection, maintenance, 
protection, and disposition of Government property shall conform with 
the policies and principles of 48 CFR Part 45, 48 CFR 945, the Federal 
Property Management Regulations 41 CFR Chapter 101, the DOE Property 
Management Regulations 41 CFR Chapter 109, and their contracts.
    (l) Indemnification. Except for Price-Anderson Nuclear Hazards 
Indemnity, no subcontractor may be indemnified except with the prior 
approval of the Senior Procurement Executive.
    (m) Leasing of Motor Vehicles. Contractors shall comply with 48 CFR 
8.11 and 48 CFR 908.11.

[[Page 535]]

    (n) Make-or-Buy Plans. Acquisition of property and services shall be 
obtained on a least-cost basis, consistent with the requirements of the 
``Make-or-Buy Plan'' clause of this contract and the contractor's 
approved make-or-buy plan.
    (o) Management, Acquisition and Use of Information Resources. 
Requirements for automatic data processing resources and 
telecommunications facilities, services, and equipment, shall be 
reviewed and approved in accordance with applicable DOE Orders and 
regulations regarding information resources.
    (p) Priorities, Allocations and Allotments. Priorities, allocations 
and allotments shall be extended to appropriate subcontracts in 
accordance with the clause or clauses of this contract dealing with 
priorities and allocations.
    (q) Purchase of Special Items. Purchase of the following items shall 
be in accordance with the following provisions of 48 CFR 908.71 and the 
Federal Property Management Regulations, 41 CFR Chapter 101:
    (1) Motor vehicles--48 CFR 908.7101
    (2) Aircraft--48 CFR 908.7102
    (3) Security Cabinets--48 CFR 908.7106
    (4) Alcohol--48 CFR 908.7107
    (5) Helium--48 CFR 908.7108
    (6) Fuels and packaged petroleum products--48 CFR 908.7109
    (7) Coal--48 CFR 908.7110
    (8) Arms and Ammunition--48 CFR 908.7111
    (9) Heavy Water--48 CFR 908.7121(a)
    (10) Precious Metals--48 CFR 908.7121(b)
    (11) Lithium--48 CFR 908.7121(c)
    (12) Products and services of the blind and severely handicapped--41 
CFR 101-26.701
    (13) Products made in Federal penal and correctional institutions--
41 CFR 101-26.702
    (r) Purchase vs. Lease Determinations. Contractors shall determine 
whether required equipment and property should be purchased or leased, 
and establish appropriate thresholds for application of lease vs. 
purchase determinations. Such determinations shall be made:
    (1) at time of original acquisition;
    (2) when lease renewals are being considered; and
    (3) at other times as circumstances warrant.
    (s) Quality Assurance. Contractors shall provide no less protection 
for the Government in its subcontracts than is provided in the prime 
contract.
    (t) Setoff of Assigned Subcontractor Proceeds. Where a subcontractor 
has been permitted to assign payments to a financial institution, the 
assignment shall treat any right of setoff in accordance with 48 CFR 
932.803.
    (u) Strategic and Critical Materials. The contractor may use 
strategic and critical materials in the National Defense Stockpile.
    (v) Termination. When subcontracts are terminated as a result of the 
termination of all or a portion of this contract, the contractor shall 
settle with subcontractors in conformity with the policies and 
principles relating to settlement of prime contracts in 48 CFR Subparts 
49.1, 49.2 and 49.3. When subcontracts are terminated for reasons other 
than termination of this contract, the contractor shall settle such 
subcontracts in general conformity with the policies and principles in 
48 CFR Subparts 49.1, 49.2, 49.3 and 49.4. Each such termination shall 
be documented and consistent with the terms of this contract. 
Terminations which require approval by the Government shall be supported 
by accounting data and other information as may be directed by the 
contracting officer.
    (w) Unclassified Controlled Nuclear Information. Subcontracts 
involving unclassified uncontrolled nuclear information shall be treated 
in accordance with 10 CFR part 1017.
    (x) Subcontract Flowdown Requirements. In addition to terms and 
conditions that are included in the prime contract which direct 
application of such terms and conditions in appropriate subcontracts, 
the contractor shall include the following clauses in subcontracts, as 
applicable:
    (1) Davis-Bacon clauses prescribed in 48 CFR 22.407.
    (2) Foreign Travel clause prescribed in 48 CFR 952.247-70.
    (3) Counterintelligence clause prescribed in 48 CFR 970.0404-4(a).
    (4) Service Contract Act clauses prescribed in 48 CFR 22.1006.
    (5) State and local taxes clause prescribed in 48 CFR 970.2904-1.
    (6) Cost or pricing data clauses prescribed in 48 CFR 970.1504-3-
1(b).
    (y) Legal Services. Contractor purchases of litigation and other 
legal services are subject to the requirements in 10 CFR part 719 and 
the requirements of this clause.

                             (End of clause)

[65 FR 81009, Dec. 22, 2000, as amended at 66 FR 4627, Jan. 18, 2001]



970.5245-1  Property.

    As prescribed in 48 CFR 970.4501-1(a), insert the following clause:

                           Property (DEC 2000)

    (a) Furnishing of Government property. The Government reserves the 
right to furnish any property or services required for the performance 
of the work under this contract.
    (b) Title to property. Except as otherwise provided by the 
contracting officer, title to all materials, equipment, supplies, and 
tangible personal property of every kind and description purchased by 
the contractor, for the cost of which the contractor is entitled to be 
reimbursed as a direct item of cost under this contract, shall pass 
directly from

[[Page 536]]

the vendor to the Government. The Government reserves the right to 
inspect, and to accept or reject, any item of such property. The 
contractor shall make such disposition of rejected items as the 
contracting officer shall direct. Title to other property, the cost of 
which is reimbursable to the contractor under this contract, shall pass 
to and vest in the Government upon (1) issuance for use of such property 
in the performance of this contract, or (2) commencement of processing 
or use of such property in the performance of this contract, or (3) 
reimbursement of the cost thereof by the Government, whichever first 
occurs. Property furnished by the Government and property purchased or 
furnished by the contractor, title to which vests in the Government, 
under this paragraph are hereinafter referred to as Government property. 
Title to Government property shall not be affected by the incorporation 
of the property into or the attachment of it to any property not owned 
by the Government, nor shall such Government property or any part 
thereof, be or become a fixture or lose its identity as personality by 
reason of affixation to any realty.
    (c) Identification. To the extent directed by the contracting 
officer, the contractor shall identify Government property coming into 
the contractor's possession or custody, by marking and segregating in 
such a way, satisfactory to the contracting officer, as shall indicate 
its ownership by the Government.
    (d) Disposition. The contractor shall make such disposition of 
Government property which has come into the possession or custody of the 
contractor under this contract as the contracting officer may direct 
during the progress of the work or upon completion or termination of 
this contract. The contractor may, upon such terms and conditions as the 
contracting officer may approve, sell, or exchange such property, or 
acquire such property at a price agreed upon by the contracting officer 
and the contractor as the fair value thereof. The amount received by the 
contractor as the result of any disposition, or the agreed fair value of 
any such property acquired by the contractor, shall be applied in 
reduction of costs allowable under this contract or shall be otherwise 
credited to account to the Government, as the contracting officer may 
direct. Upon completion of the work or the termination of this contract, 
the contractor shall render an accounting, as prescribed by the 
contracting officer, of all government property which had come into the 
possession or custody of the contractor under this contract.
    (e) Protection of government property--management of high-risk 
property and classified materials. (1) The contractor shall take all 
reasonable precautions, and such other actions as may be directed by the 
contracting officer, or in the absence of such direction, in accordance 
with sound business practice, to safeguard and protect government 
property in the contractor's possession or custody.
    (2) In addition, the contractor shall ensure that adequate 
safeguards are in place, and adhered to, for the handling, control and 
disposition of high-risk property and classified materials throughout 
the life cycle of the property and materials consistent with the 
policies, practices and procedures for property management contained in 
the Federal Property Management regulations (41 CFR chapter 101), the 
Department of Energy Property Management regulations (41 CFR chapter 
109), and other applicable regulations.
    (3) High-risk property is property, the loss, destruction, damage 
to, or the unintended or premature transfer of which could pose risks to 
the public, the environment, or the national security interests of the 
United States. High-risk property includes proliferation sensitive, 
nuclear related dual use, export controlled, chemically or radioactively 
contaminated, hazardous, and specially designed and prepared property, 
including property on the militarily critical technologies list.
    (f) Risk of loss of Government property. (1)(i) The contractor shall 
not be liable for the loss or destruction of, or damage to, Government 
property unless such loss, destruction, or damage was caused by any of 
the following:
    (A) Willful misconduct or lack of good faith on the part of the 
contractor's managerial personnel;
    (B) Failure of the contractor's managerial personnel to take all 
reasonable steps to comply with any appropriate written direction of the 
contracting officer to safeguard such property under paragraph (e) of 
this clause; or
    (C) Failure of contractor managerial personnel to establish, 
administer, or properly maintain an approved property management system 
in accordance with paragraph (i)(1) of this clause.
    (ii) If, after an initial review of the facts, the contracting 
officer informs the contractor that there is reason to believe that the 
loss, destruction of, or damage to the government property results from 
conduct falling within one of the categories set forth above, the burden 
of proof shall be upon the contractor to show that the contractor should 
not be required to compensate the government for the loss, destruction, 
or damage.
    (2) In the event that the contractor is determined liable for the 
loss, destruction or damage to Government property in accordance with 
(f)(1) of this clause, the contractor's compensation to the Government 
shall be determined as follows:
    (i) For damaged property, the compensation shall be the cost of 
repairing such damaged property, plus any costs incurred for

[[Page 537]]

temporary replacement of the damaged property. However, the value of 
repair costs shall not exceed the fair market value of the damaged 
property. If a fair market value of the property does not exist, the 
contracting officer shall determine the value of such property, 
consistent with all relevant facts and circumstances.
    (ii) For destroyed or lost property, the compensation shall be the 
fair market value of such property at the time of such loss or 
destruction, plus any costs incurred for temporary replacement and costs 
associated with the disposition of destroyed property. If a fair market 
value of the property does not exist, the contracting officer shall 
determine the value of such property, consistent with all relevant facts 
and circumstances.
    (3) The portion of the cost of insurance obtained by the contractor 
that is allocable to coverage of risks of loss referred to in paragraph 
(f)(1) of this clause is not allowable.
    (g) Steps to be taken in event of loss. In the event of any damage, 
destruction, or loss to Government property in the possession or custody 
of the contractor with a value above the threshold set out in the 
contractor's approved property management system, the contractor:
    (1) Shall immediately inform the contracting officer of the occasion 
and extent thereof,
    (2) Shall take all reasonable steps to protect the property 
remaining, and
    (3) Shall repair or replace the damaged, destroyed, or lost property 
in accordance with the written direction of the contracting officer. The 
contractor shall take no action prejudicial to the right of the 
Government to recover therefore, and shall furnish to the Government, on 
request, all reasonable assistance in obtaining recovery.
    (h) Government property for Government use only. Government property 
shall be used only for the performance of this contract.
    (i) Property Management. (1) Property Management System. (i) The 
contractor shall establish, administer, and properly maintain an 
approved property management system of accounting for and control, 
utilization, maintenance, repair, protection, preservation, and 
disposition of Government property in its possession under the contract. 
The contractor's property management system shall be submitted to the 
contracting officer for approval and shall be maintained and 
administered in accordance with sound business practice, applicable 
Federal Property Management regulations and Department of Energy 
Property Management regulations, and such directives or instructions 
which the contracting officer may from time to time prescribe.
    (ii) In order for a property management system to be approved, it 
must provide for:
    (A) Comprehensive coverage of property from the requirement 
identification, through its life cycle, to final disposition;
    (B) Employee personal responsibility and accountability for 
Government-owned property;
    (C) Full integration with the contractor's other administrative and 
financial systems; and
    (D) A method for continuously improving property management 
practices through the identification of best practices established by 
``best in class'' performers.
    (iii) Approval of the contractor's property management system shall 
be contingent upon the completion of the baseline inventory as provided 
in subparagraph (i)(2) of this clause.
    (2) Property Inventory. (i) Unless otherwise directed by the 
contracting officer, the contractor shall within six months after 
execution of the contract provide a baseline inventory covering all 
items of Government property.
    (ii) If the contractor is succeeding another contractor in the 
performance of this contract, the contractor shall conduct a joint 
reconciliation of the property inventory with the predecessor 
contractor. The contractor agrees to participate in a joint 
reconciliation of the property inventory at the completion of this 
contract. This information will be used to provide a baseline for the 
succeeding contract as well as information for closeout of the 
predecessor contract.
    (j) The term ``contractor's managerial personnel'' as used in this 
clause means the contractor's directors, officers and any of its 
managers, superintendents, or other equivalent representatives who have 
supervision or direction of:
    (1) All or substantially all of the contractor's business; or
    (2) All or substantially all of the contractor's operations at any 
one facility or separate location to which this contract is being 
performed; or
    (3) A separate and complete major industrial operation in connection 
with the performance of this contract; or
    (4) A separate and complete major construction, alteration, or 
repair operation in connection with performance of this contract; or
    (5) A separate and discrete major task or operation in connection 
with the performance of this contract.
    (k) The contractor shall include this clause in all cost 
reimbursable subcontracts.

                             (End of clause)

    Alternate I (DEC 2000). As prescribed in 48 CFR 970.4501-1(b), when 
the award is to a nonprofit contractor, replace paragraph (j) of the 
basic clause with the following paragraph (j):


[[Page 538]]


    (j) The term ``contractor's managerial personnel'' as used in this 
clause means the contractor's directors, officers and any of its 
managers, superintendents, or other equivalent representatives who have 
supervision or direction of all or substantially all of:
    (1) The contractor's business; or
    (2) The contractor's operations at any one facility or separate 
location at which this contract is being performed; or
    (3) The contractor's Government property system and/or a Major 
System Acquisition or Major Project as defined in DOE Order 4700.1 
(Version in effect on effective date of contract).

[[Page 539]]



                 CHAPTER 10--DEPARTMENT OF THE TREASURY




                          (Parts 1000 to 1099)

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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
1001            Department of the Treasury Acquisition 
                    Regulation (DTAR) System................         541
1002            Definitions of Words and Terms..............         542
1003            Improper Business Practices and Personal 
                    Conflicts of Interest...................         542
1004            Administrative Matters......................         542
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
1005            Publicizing Contract Actions................         543
1011            Describing Agency Needs.....................         543
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
1019            Small Business Programs.....................         545
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
1028            Bonds and Insurance.........................         549
1033            Protests, Disputes, and Appeals.............         549
                     SUBCHAPTER H--CLAUSES AND FORMS
1052            Solicitation Provisions and Contract Clauses         551

[[Page 541]]



                          Subchapter A_GENERAL





PART 1001_DEPARTMENT OF THE TREASURY ACQUISITION REGULATORY (DTAR) SYSTEM
--Table of Contents




               Subpart 1001.1_Purpose, Authority, Issuance

Sec.
1001.101 Purpose.
1001.104 Applicability.
1001.105 Issuance.
1001.105-1 Publication and code arrangement.
1001.105-2 Arrangement of regulations.
1001.105-3 Copies.
1001.106 OMB Approval under the Paperwork Reduction Act.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



               Subpart 1001.1_Purpose, Authority, Issuance



1001.101  Purpose.

    This subpart establishes Chapter 10, the Department of the Treasury 
Acquisition Regulation (DTAR), within Title 48 of the Federal 
Acquisition Regulation (FAR) System. The DTAR contains policies and 
procedures that supplement FAR coverage and directly affect the 
contractual relationship between the Department of the Treasury and its 
business partners (e.g., prospective offerors/bidders and contractors). 
When FAR coverage is adequate, there will be no corresponding DTAR 
coverage.



1001.104  Applicability

    The FAR and DTAR apply to all acquisitions of supplies and services, 
which obligate appropriated funds. For acquisitions made from non-
appropriated funds, the Senior Procurement Executive will determine the 
rules and procedures that will apply. The DTAR does not apply to the 
acquisitions of the U.S. Mint.



1001.105  Issuance.



1001.105-1  Publication and code arrangement.

    The DTAR and its subsequent changes will be published in the Federal 
Register and codified in the Code of Federal Regulations (CFR). The DTAR 
will be issued as 48 CFR Chapter 10.



1001.105-2  Arrangement of regulations.

    (a) References and citations. The DTAR is divided into the same 
parts, subparts, sections, subsections, and paragraphs as the FAR except 
that 10 or 100 will precede the DTAR citation so that there are four 
numbers to the left of the first decimal. Reference to DTAR material 
must be made in a manner similar to that prescribed by FAR 1.105-2(c).



1001.105-3  Copies.

    Copies of the DTAR in Federal Register or CFR form may be purchased 
from the Superintendent of Documents, Government Printing Office (GPO), 
Washington, DC 20402.



1001.106  OMB Approval under the Paperwork Reduction Act.

    OMB has assigned the following control numbers that must appear on 
the upper right-hand corner of the face page of each solicitation, 
contract, modification and order: OMB Control No. 1505-0081 (Offeror 
submissions), OMB Control No. 1505-0080 (Contractor submissions), and 
OMB Control No. 1505-0107 (Protests). OMB regulations and OMB's approval 
and assignment of control numbers are conditioned upon Treasury bureaus 
not requiring more than three copies (including the original) of any 
document of information. OMB has granted a waiver to permit the 
Department to require up to eight copies of proposal packages, including 
proprietary data, for solicitations, provided that contractors who 
submit only an original and two copies will not be placed at a 
disadvantage.

[[Page 542]]



PART 1002_DEFINITIONS OF WORDS AND TERMS--Table of Contents




                       Subpart 1002.1_Definitions.

Sec.
1002.101 Definitions.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



                       Subpart 1002.1_Definitions.



1002.101  Definitions.

    Bureau Chief Procurement Officer (BCPO) means the senior acquisition 
person at each bureau's headquarters. Within the Internal Revenue 
Service, this may be the Director, Procurement or the Deputy Director, 
Procurement.
    Legal counsel means the Treasury or bureau office providing legal 
services to the contracting activity.
    Senior Procurement Executive (SPE) for the Department of the 
Treasury is the Director, Office of the Procurement Executive.



PART 1003_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




    Subpart 1003.9_Whistleblower Protections for Contractor Employees

Sec.
1003.901 Definitions.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



    Subpart 1003.9_Whistleblower Protections for Contractor Employees



1003.901  Definitions.

    Authorized official of an agency means Treasury's SPE.



PART 1004_ADMINISTRATIVE MATTERS--Table of Contents




   Subpart 1004.4_Safeguarding Classified Information Within Industry

Sec.
1004.470 Investigative Requirement for Contractors.
1004.470--1 General.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



   Subpart 1004.4_Safeguarding Classified Information Within Industry



1004.470  Investigative Requirements for Contractors.



1004.470--1  General.

    Contract employees not requiring access to classified information 
must meet the investigative requirements of Chapter II, Section 2 of TD 
P 71-10, Department of the Treasury--Security Manual.

[[Page 543]]



            Subchapter B_COMPETITION AND ACQUISITION PLANNING





PART 1005_PUBLICIZING CONTRACT ACTIONS--Table of Contents




          Subpart 1005.2_Synopses of Proposed Contract Actions

Sec.
1005.202 Exceptions.

    Authority: 41 U.S.C. 418(b) (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



          Subpart 1005.2_Synopses of Proposed Contract Actions



1005.202  Exceptions.

    (b)(1) The Office of Federal Procurement Policy and the Small 
Business Administration have extended the Pilot Program on Acquisition 
of Services from Small Businesses. It allows for a waiver of the 
synopsis requirement for services from competitive small businesses 
between $25,000 and $100,000. Contracting officers may waive the 
synopsis requirement after determining the following:
    (1) Acquisitions covered by the waiver are for services (excluding 
those exempted from set-asides under the Small Business Competitiveness 
Demonstration Program) in amounts over $25,000, but not exceeding the 
simplified acquisition threshold ($100,000), of which supply items are 
expected to constitute less than 20 percent of the value of the 
contract;
    (ii) The covered acquisitions will be set-aside for small 
businesses;
    (iii) Quotes or offers for covered acquisitions will be solicited 
and obtained from a minimum of five small business concerns;
    (iv) The Procurement Marketing and Access Network (PRO-Net) will be 
used to identify and solicit bids from a minimum of five small 
businesses; and
    (v) If practicable, two sources not included in the previous 
solicitation for the same services will be solicited.



PART 1011_DESCRIBING AGENCY NEEDS--Table of Contents




     Subpart 1011.1_Selecting and Developing Requirements Documents

Sec.
1011.103 Market acceptance.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



     Subpart 1011.1_Selecting and Developing Requirements Documents



1011.103  Market Acceptance.

    (a) BCPOs can act on behalf of the head of the agency in this 
subpart only. BCPOs, under appropriate circumstances, require offerors 
to make the required demonstrations.

[[Page 545]]



                   Subchapter D_SOCIOECONOMIC PROGRAMS





PART 1019_SMALL BUSINESS PROGRAMS--Table of Contents




                         Subpart 1019.2_Policies

Sec.
1019.202 Specific policies.
1019.202--70 The Treasury Mentor-Prot[eacute]g[eacute] Program
1019.202--70-3 Non-affiliation.
1019.202--70-4 General policy.
1019.202--70-5 Incentives for prime contractor participation.
1019.202--70-7 Mentor firms.
1019.202--70-8 Prot[eacute]g[eacute] firms.
1019.202--70-9 Selection of Prot[eacute]g[eacute] firms.
1019.202--70-10 Application process for mentor firms to participate in 
          the program.
1019.202--70-11 OSBD review and approval process of agreement.
1019.202--70-12 Agreement contents.
1019.202--70-13 Developmental assistance.
1019.202--70-14 Obligation.
1019.202--70-16 Solicitation provisions and contract clauses.

        Subpart 1019.7_The Small Business Subcontracting Program

1019.708 Contract clauses.
1019.708-70 Solicitation provisions and contract clauses.

 Subpart 1019.8_Contracting With the Small Business Adminstration (The 
                              8(a) Program)

1019.811 Preparing the contracts.
1019.811-3 Contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



                         Subpart 1019.2_Policies



1019.202  Specific policies.



1019.202-70  The Treasury Mentor-Prot[eacute]g[eacute] Program.



1019.202-70-3  Non-affiliation.

    For purposes of the Small Business Act, a prot[eacute]g[eacute] firm 
may not be considered an affiliate of a mentor firm solely on the basis 
that the prot[eacute]g[eacute] firm is receiving developmental 
assistance referred to in DTAR 1019.202-70-13 from such mentor firm 
under the Program.



1019.202-70-4  General policy.

    (a) Eligible prime contractors, not included on the ``List of 
Parties Excluded from Federal Procurement and Nonprocurement Programs'', 
that are approved as mentors will enter into agreements with eligible 
prot[eacute]g[eacute]s. Mentors provide appropriate developmental 
assistance to enhance the capabilities of prot[eacute]g[eacute]s to 
perform as contractors or subcontractors.
    (b) A firm's status as a prot[eacute]g[eacute] under a Treasury 
contract must not have an effect on the firm's eligibility to seek other 
contracts or subcontracts.



1019.202-70-5  Incentives for prime contractor participation.

    (a) Under the Small Business Act, 15 U.S.C. 637(d)(4)(E), Treasury 
is authorized to provide appropriate incentives to encourage 
subcontracting opportunities consistent with the efficient and 
economical performance of the contract. Proposed mentor-
prot[eacute]g[eacute] efforts will be considered during the evaluation 
of such negotiated, competitive offers. Contracting officers must 
provide, as an incentive, a bonus score, not to exceed 5% of the 
relative importance assigned to the technical/management factors.
    (b) A mentor's performance will be evaluated against the criteria 
described in DTAR 1052.219-75.
    (c) Before awarding a contract that requires a subcontracting plan, 
the existence of a mentor-prot[eacute]g[eacute] arrangement, and 
performance (if any) under an existing arrangement, must be considered 
by the contracting officer in:
    (1) Evaluating the quality of a proposed subcontracting plan under 
FAR 19.705-4; and
    (2) Evaluating the contractor compliance with the subcontracting 
plans submitted in previous contracts as a factor in determining 
contractor responsibility under FAR 19.705-5(a)(1).
    (d) Mentor-prot[eacute]g[eacute] arrangements may provide the 
government with greater assurance that a prot[eacute]g[eacute] 
subcontractor will be able to perform under the contract.

[[Page 546]]

    (e) The Office of Small Business Development (OSBD) Mentoring Award 
is a non-monetary award that will be presented (annually or as often a 
appropriate) to the mentoring firm providing the most effective 
developmental support of a prot[eacute]g[eacute]. The Mentor-
Prot[eacute]g[eacute] Program Manager will recommend an award winner to 
the Director, Office of Small Business Development.



1019.219-70-7  Mentor firms.

    A mentor firm may be either a large or small business, eligible for 
award of a Government contract that can provide developmental assistance 
to enhance the capabilities of prot[eacute]g[eacute]s to perform as 
subcontractors. Mentors will be encouraged to enter into arrangements 
with prot[eacute]g[eacute]s in addition to firms with whom they have 
established business relationships.



1019.202-70-8  Prot[eacute]g[eacute] firms.

    (a) For selection as a prot[eacute]g[eacute], a firm must be:
    (1) A small business, women-owned small business, small 
disadvantaged business, small business owned and controlled by service 
disabled veterans, or qualified HUBZone small business:
    (2) ``Small'' in the NAICS for the services or supplies to be 
provided by the prot[eacute]g[eacute] under its subcontract to the 
mentor; and
    (3) Eligible for receipt of Government contracts.
    (b) Except for small disadvantaged business, or qualified HUBZone 
small business firms, a prot[eacute]g[eacute] firm may self-certify to a 
mentor firm that it meets the requirements set forth if paragraph (a) of 
this section. Mentors may rely in good faith on written representations 
by potential prot[eacute]g[eacute] that they meet the specified 
eligibility requirements. The small disadvantaged business and HUBZone 
status eligibility and documentation requirements are determined 
according to FAR 19.304 and FAR 19.1303, respectively.
    (c) Prot[eacute]g[eacute]s may not have multiple mentors unless 
approved, in writing, by the Director, Office of Small Business 
Development (OSBD). Prot[eacute]g[eacute]s participating in other agency 
mentor-prot[eacute]g[eacute] programs in addition to the Treasury 
Program should maintain a system for preparing separate reports of 
mentoring activity for each agency's program.



1019.202-70-9  Selection of prot[eacute]g[eacute] firms.

    (a) Mentor firms will be solely responsible for selecting 
prot[eacute]g[eacute] firms. The mentor is encouraged to identify and 
select the types of prot[eacute]g[eacute] firms listed in 1019.202-70-7. 
Mentor firms may have multiple prot[eacute]g[eacute]s.
    (b) The selection of prot[eacute]g[eacute] firms by mentor firms may 
not be protested. Any protest regarding the size or eligibility status 
of an entity selected by a mentor to be a prot[eacute]g[eacute] must be 
referred solely to Treasury's OSBD for resolution. Treasury, at its 
discretion, may seek an advisory opinion from the Small Business 
Administration (SBA).



1019.202-70-10  Application process for mentor firms to participate in 
the program.

    (a) Firm interested in becoming a mentor firm may apply in writing 
to Treasury's OSBD. The application will be evaluated based upon the 
description of the nature and extent of technical and managerial support 
proposed as well as the extent of other developmental assistance in the 
form of equity investment, loans, joint-venture support, and traditional 
subcontracting support.
    (b) A proposed mentor will submit the information listed in DTAR 
1019.202-70-12 for inclusion in a mentor-prot[eacute]g[eacute] 
agreement.



1019.202-70-11  OSBD review and approval process of agreement.

    (a) OSBD will review the information specified in DTAR 1019.202-70-
12. The OSBD review will be completed no later than 30 calendar days 
after receipt.
    (b) Upon completion of the review, the mentor may implement the 
developmental assistance program.
    (c) An approved agreement will be incorporated into the mentor 
firm's contract(s) with Treasury.
    (d) If the OSBD disapprove the agreement, the mentor may provide 
additional information for reconsideration. Upon finding deficiencies 
that the OSBD considers correctable, the OSBD will notify the mentor and 
provide a

[[Page 547]]

list of defects. Any additional information or corrections requested 
will be provided within 30 calendar days. The review of any supplemental 
material will be completed within 30 days after receipt by the OSBD. 
When submission of additional data is required during a proposal 
evaluation for a new contract award, shorter timeframes for submission, 
review and re-evaluation for approval may be authorized by the OSBD.
    (e) The agreement defines the relationship between the mentor and 
protege firms only. The agreement itself does not create any privity of 
contract between the mentor or protege and Treasury.



1019.202-70-12  Agreement contents.

    The contents of the agreement will contain:
    (a) Names and addresses of mentor and protege firms and a point of 
contact within both firms who will oversee the agreement;
    (b) Procedures for the mentor firm to notify the protege firm, OSBD 
and the contracting officer, in writing, at least 30 days in advance of 
the mentor firm's intent to voluntarily withdraw from the program;
    (c) 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. The mentor must 
notify the OSBD and the contracting officer immediately upon receipt of 
such notice from the protege;
    (d) Each proposed mentor-protege relationship must include 
information on the mentor's ability to provide developmental assistance 
to the protege and how that assistance will potentially increase 
contracting and subcontracting opportunities for the protege firm;
    (e) A description of the type of developmental Program that will be 
provided by the mentor firm to the protege firm, to include a 
description of the potential subcontract work, and a schedule for 
providing assistance and criteria for evaluation of the proteges 
developmental success;
    (f) A listing of the types and dollar amounts of subcontracts that 
may be awarded to the protege form;
    (g) Program participation term;
    (h) Termination procedures;
    (i) Plan for accomplishing work should the agreement be terminated; 
and,
    (j) Other terms and conditions, as appropriate.



1019.202-70-13  Developmental assistance.

    The forms of developmental assistance a mentor can provide to a 
protege include:
    (a) Management guidance relating to financial management, 
organizational management, overall business management/planning, 
business development, and technical assistance;
    (b) Loans;
    (c) Rent-free use of facilities and/or equipment;
    (d) Property;
    (e) Temporary assignment of personnel to protege for purpose of 
training; and,
    (f) Any other types of mutually beneficial assistance.



1019.202-70-14  Obligation.

    (a) Mentor or protege firms, may voluntarily withdraw from the 
Mentor-Protege Program. However, such withdrawal will not impact the 
program mission and contract requirements under the prime contract.
    (b) At the conclusion of each year in the Mentor-Protege Program, 
the prime contractor and protege must formally brief the Department of 
the Treasury team regarding program accomplishments as pertains to the 
approved agreement. Individual briefings may be conducted, at the 
request of either party. Treasury will evaluate these reports by 
considering the following:
    (1) Specific actions taken by the mentor, during the evaluation 
period, to increase the participation of protege as suppliers to the 
Federal government and to commercial entities;
    (2) Specific actions taken by the mentor, during the evaluation 
period, to develop the technical and corporate administrative expertise 
of a protege as defined in the agreement;
    (3) To what extent the protege has met the developmental objectives 
in the agreement; and,
    (4) To what extent the mentor firm's participation in the Mentor-
Protege

[[Page 548]]

Program resulted in the protege receiving contract(s) and subcontract(s) 
from private firms and agencies other than the Department of the 
Treasury.
    (c) Mentor and protege firms must submit an evaluation to the OSBD 
at the conclusion of the mutually agreed upon program period, the 
conclusion of the contract, or the voluntary withdrawal by either party 
from the Mentor-Protege Program, whichever comes first.



1019.202-70-16  Solicitation provisions and contract clauses.

    (a) Insert the provision at DTAR 1052.219-73, Department of the 
Treasury Mentor-Protege Program, in all unrestricted solicitations 
exceeding $500,000 ($1,000,000 for construction) that offer 
subcontracting possibilities.
    (b) Insert the clause at DTAR 1052.219-75, Mentor Requirements and 
Evaluation, in contracts where the prime contractor is participant in 
the Treasury Mentor-Protege Program.



        Subpart 1019.7_The Small Business Subcontracting Program



1019.708  Contract clauses.



1019.708-70  Solicitation provisions and contract clauses.

    (a) Insert the clause at DTAR 1052.219-70, SF 294 and SF 295 
Reporting, in all solicitations and contracts requiring a subcontracting 
plan.
    (b) Insert the provision at DTAR 1052.219-71, Subcontracting Plan, 
in all solicitations requiring a subcontracting plan.



 Subpart 1019.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



1019.811  Preparing the contracts.



1019.811-3  Contract clauses.

    (d)(3) Insert theclause at DTAR 1052.219-18, Notification of 
Competition Limited to Eligible 8(a) Concerns--Alternate III 
(Deviation), for paragraph (c) of FAR 52.219-18, Notification of 
Completion Limited to Eligible 8(a) Concerns, in all solicitations and 
contracts that exceed $100,000 and are processed under DTAR 1019.8.
    (f) Insert the clause at DTAR 1052.219-72, Section 8(a) Direct 
Award, in solicitations and contracts that exceed $100,000 and are 
processed under DTAR 1019.8 for paragraph (c) of FAR 52.219-11, Special 
8(a) Subcontract Conditions; FAR 52.219-12, Special 8(a) Subcontract 
Conditions; and FAR 52.219-17, Section 8(a) Award.

[[Page 549]]



              Subchapter E_GENERAL CONTRACTING REQUIREMENTS





PART 1028_BONDS AND INSURANCE--Table of Contents




                          Subpart 1028.1_Bonds

Sec.
1028.106 Administration.
1028.106-6 Furnishing information.

                        Subpart 1028.3_Insurance

1028.307- Insurance under cost-reimbursement contracts.
1028.307-1 Group insurance plans.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



                          Subpart 1028.1_Bonds



1028.106  Administration.



1028.106-6  Furnishing information.

    (b) COs must furnish certified copies and determine reasonable and 
appropriate costs, after consultation with legal counsel.



                        Subpart 1028.3_Insurance



1028.307  Insurance under cost-reimbursement contracts.



1028.307-1  Group insurance plans.

    Plans must be submitted to the CO, who must obtain the advice of 
legal counsel.



PART 1033_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                   Subpart 1033.2_Disputes and Appeals

Sec.
1033.201 Definitions.
1033.210 Contracting officer's authority.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



                   Subpart 1033.2_Disputes and Appeals



1033.201  Definitions.

    Agency Board of Contract Appeals means the General Services 
Administration Board of Contract Appeals (GSBCA). The GSBCA is the 
authorized representative of the Secretary of the Treasury in hearing, 
considering, and determining all appeals of decisions of CO's filed by 
contractors pursuant to FAR subpart 33.2. Appeals must be governed by 
the Rules of the GSBCA (48 CFR chapter 61, part 6101).



1033.210  Contracting officer's authority.

    It is Treasury's policy to encourage the use of Alternate Disputes 
Resolution (ADR) procedures. A decision to use ADR procedures requires 
review and approval by legal counsel.

[[Page 551]]



                     Subchapter H_CLAUSES AND FORMS





PART 1052_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 1052.2_Texts of Provisions and Clauses

Sec.
1052.210-70 Contracting Officer's Technical Representative (COTR) 
          Designation and Authority.
1052.219-18 Notification of Competition Limited to Eligible 8(a) 
          Concerns--Alternate III (Deviation).
1052.219-70 SF 294 and SF 295 Reporting.
1052.219-71 Subcontracting Plan.
1052.219-72 Section 8(a) Direct Awards.
1052.219-73 Department of the Treasury Mentor-Prot[eacute]g[eacute] 
          Program.
1052.219-74 [Reserved]
1053.219-75 Mentor Requirements and Evaluation.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 39855, July 3, 2003, unless otherwise noted.



             Subpart 1052.2_Texts of Provisions and Clauses



1052.201-70  Contracting Officer's Technical Representative (COTR) 
Designation and Authority.

    Per DTAR 1001.670-3, insert the following clause:

 Contracting Officer's Technical Representative (COTR) Designation and 
                          Authority (MAR 2002)

    (a) The contracting officer's technical
 representative is______________________________________________________
[insert name, address and telephone number].
    (b) Performance of work under this contract is subject to the 
technical direction of the COTR identified above, or a representative 
designated in writing. The term ``technical direction'' includes, 
without limitation, direction to the contractor that directs or 
redirects the labor effort, shifts the work between work areas or 
locations, and/or fills in details and otherwise serves to ensure that 
tasks outlined in the work statement are accomplished satisfactorily.
    (c) Technical direction must be within the scope of the contract 
specification(s)/work statement. The COTR does not have authority to 
issue technical direction that:
    (1) Constitutes a change of assignment or additional work outside 
the contract specification(s)/work statement;
    (2) Constitutes a change as defined in the clause entitled 
``Changes'';
    (3) In any manner causes an increase or decrease in the contract 
price, or the time required for contract performance;
    (4) Changes any of the terms, conditions, or specification(s)/work 
statement of the contract;
    (5) Interferes with the contractor's right to perform under the 
terms and conditions of the contract; or,
    (6) Directs, supervises or otherwise controls the actions of the 
contractor's employees.
    (d) Technical direction may be oral or in writing. The COTR must 
confirm oral direction in writing within five workdays, with a copy to 
the contracting officer.
    (e) The contractor must proceed promptly with performance resulting 
from the technical direction issued by the COTR. In the opinion of the 
contractor, if any direction of the COTR or the designated 
representative falls within the limitations of (c) above, the contractor 
must immediately notify the contracting officer no later than the 
beginning of the next Government work day.
    (f) Failure of the contractor and the contracting officer to agree 
that technical direction is within the scope of the contract will be 
subject to the terms of the clause entitled ``Disputes.''

                             (End of clause)



1052.219-18  Notification of Competition Limited to Eligible 8(a) 
Concerns--Alternate III (Deviation).

    In accordance with DTAR 1019.811-3(d)(3), substitute the following 
for paragraph (c) in 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.



1052.219-70  SF 294 and SF 295 Reporting.

    Per DTAR 1019.708-70(a), insert the following clause:

                 SF 294 and SF 295 Reporting (MAR 2002)

    In accordance with the clause entitled ``Small, Small Disadvantaged 
and Women-Owned Small Business Subcontracting Plan'' in Section I and 
the contract schedule, SF

[[Page 552]]

294 and SF 295 reports must be submitted to the following personnel:

[[Page 553]]



----------------------------------------------------------------------------------------------------------------
                  Addressee                             Submit SF 294                     Submit SF 295
----------------------------------------------------------------------------------------------------------------
Contracting Officer (Address shown on front   Original........................  Original.
 of contract).
Small Business Specialist [Insert Bureau      Copy............................  Copy.
 name and address].
Department of the Treasury Office of Small    N/A.............................  Copy.
 Business Development (MMD) 1500
 Pennsylvania Avenue, NW c/o 1310 G St., NW,
 Suite 400W Washington, DC 20220.
----------------------------------------------------------------------------------------------------------------


[[Page 554]]

                             (End of clause)



1052.219-71  Subcontracting Plan.

    As prescribed in DTAR 1019.708-70(b), insert the following 
provision:

                     Subcontracting Plan (MAR 2002)

    As part of its initial proposal, each large business offeror must 
submit a contracting plan, as prescribed in FAR 52.219-9. Use of the 
subcontracting plan outlined containe in Section J of this solicitation 
is optional; however, plans must contain all elements included in the 
outline.

                           (End of provision)



1052.219-72  Section 8(a) Direct Awards.

    As prescribed in DTAR 1019.811-3(f), insert the following clause:

                  Section 8(A) Direct Awards (MAR 2002)

    (a) This purchase order or contract is issued as a direct award 
between the contracting activity and the 8(a) contractor pursuant to the 
Memorandum of Understanding between the Small Business Administration 
(SBA) and the Department of the Treasury. SBA retains responsibility for 
8(a) certification, 8(a) eligibility determinations and related issues, 
and provides counseling and assistance to the 8(a) contractor under the 
8(a) program. The cognizant SBA district office is: [To be completed by 
the contracting officer at the time of award]
    (b) The contracting officer is responsible for administering the 
purchase order or contact and taking any action on behalf of the 
Government under the terms and conditions of the purchase order or 
contract. However, the contracting officer shall give advance notice to 
the SBA before it issues a final notice terminating performance, either 
in whole or in part, under the purchase order or contract. The 
contracting officer shall also coordinate with SBA prior to processing 
any novation agreement. The contracting officer may assign contract 
administration functions to a contract administration office.
    (c) The contractor agrees:
    (1) To notify the contracting officer, simultaneously with its 
notification to SBA (as required by SBA's 8(a) regulations), when the 
owner(s) upon whom 8(a) eligibility is based, plan to relinquish 
ownership or control of the concern. Consistent with 15 U.S.C. 
637(a)21), transfer of ownership or control must result in termination 
of the contract for convenience, unless SBA waives the requirement for 
termination prior to the actual relinquishing of control; and
    (2) To adhere to the requirements of FAR 52.219-14, Limitations on 
Subcontracting.

                             (End of clause)



1052.219-73  Department of the Treasury Mentor-Prot[eacute]g[eacute] Program.

    As described in DTAR 1019.202-70, insert the following provision:

  Department Of The Treasury Mentor-Prot[Eacute]G[Eacute] Program (JAN 
                                  2000)

    (a) Large and small businesses are encouraged to participate in the 
Department of the Treasury Mentor-Prot[eacute]g[eacute] Program. Mentor 
firms provide small business prot[eacute]g[eacute] with developmental 
assistance to enhance their capabilities and ability to obtain federal 
contracts.
    Mentor firms are large prime contractors or eligible small 
businesses capable of providing developmental assistance. 
Prot[eacute]g[eacute] firms are small businesses as defined in 13 CFR 
parts 121, 124, and 126.
    Developmental assistance is technical, managerial, financial, and 
other mutually beneficial assistance to aid prot[eacute]g[eacute]s. 
Contractors interested in participating in the Program are encouraged to 
contact the Department of the Treasury OSBD or the Bureau of the OSBD 
for further information.

                           (End of provision)



1052.219-74  [Reserved]



1052.219-75  Mentor Requirements and Evaluation.

    As prescribed in DTAR 1019.202-70, insert the following clause:

              Mentor Requirements and Evaluation (JAN 2000)

    (a) Mentor and prot[eacute]g[eacute] firms shall submit an 
evaluation to the Department of the Treasury's OSBD at the conclusion of 
the mutally agreed upon Program period, or the voluntary withdrawal by 
either party from the Program, whichever occurs first. At the conclusion 
of each year in the Mentor-Prot[eacute]g[eacute] Program, the prime 
contractor and prot[eacute]g[eacute] will formally brief the Department 
of the Treasury Mentor-Prot[eacute]g[eacute] Program Manager regarding 
program accomplishments under their mentor-prot[eacute]g[eacute] 
agreements.
    (b) A mentor or prot[eacute]g[eacute] must notify the OSBD and the 
contracting officer, in writing, at least 30 calendar days in advance of 
the effective date of the firm's withdrawal from the Program. A mentor 
firm must notify the OSBD and the contracting officer upon receipt of a 
prot[eacute]g[eacute]'s notice of withdrawal from the Program.

                             (End of clause)

[[Page 555]]



                CHAPTER 12--DEPARTMENT OF TRANSPORTATION




                          (Parts 1200 to 1299)

  --------------------------------------------------------------------
Part                                                                Page
1201            Federal Acquisition Regulation System.......         557
1202            Definitions of words and terms..............         561
1203            Improper business practices and personal 
                    conflicts of interest...................         562
1204            Administrative matters......................         564
1205            Publicizing contract actions................         565
1206            Competition requirements....................         565
1207            Acquisition planning........................         566
1209            Contractor qualifications...................         566
1210            Market research [Reserved]
1211            Describing agency needs.....................         567
1212            Acquisition of commercial items [Reserved]
1213            Small purchase and other simplified purchase 
                    procedures..............................         568
1214            Sealed bidding..............................         569
1215            Contracting by negotiation..................         570
1216            Types of contracts..........................         571
1217            Special contracting methods.................         572
1219            Small business programs.....................         573
1220            Labor surplus area contracting..............         574
1222            Application of labor laws to Government 
                    acquisitions............................         574
1223            Environment, conservation, occupational 
                    safety, and drug-free workplace.........         575
1224            Protection of privacy and freedom of 
                    information.............................         576
1225            [Reserved]
1227            Patents, data, and copyrights...............         577
1228            Bonds and insurance.........................         577
1231            Contract cost principles and procedures.....         579
1232            Contract financing..........................         579
1233            Protests, disputes, and appeals.............         581
1234            Major system acquisition....................         581
1235            Research and development contracting........         582

[[Page 556]]

1236            Construction and architect-engineer 
                    contracts...............................         582
1237            Service contracting.........................         582
1242            Contract administration.....................         585
1245            Government property.........................         586
1246            Quality assurance...........................         587
1247            Transportation..............................         590
1252            Solicitation provisions and contract clauses         591
1253            Forms.......................................         615

[[Page 557]]



PART 1201_FEDERAL ACQUISITION REGULATION SYSTEM--Table of Contents




               Subpart 1201.1_Purpose, Authority, Issuance

Sec.
1201.101 Purpose.
1201.104 Applicability.
1201.105 Issuance.
1201.105-1 Publication and code arrangement.
1201.105-2 Arrangement of regulations.
1201.105-3 Copies.
1201.106 OMB approval under the Paperwork Reduction Act.

                      Subpart 1201.2_Administration

1201.201 Maintenance of the FAR.
1201.201-1 The two councils.

              Subpart 1201.3_Agency Acquisition Regulations

1201.301 Policy.
1201.301-70 Amendment of (TAR) 48 CFR chapter 12.
1201.301-71 Effective date.
1201.301-72 TAC or TN numbering.
1201.304 Agency control and compliance procedures.

            Subpart 1201.470_Deviations From the FAR and TAR

1201.403 Individual deviations.
1201.404 Class deviations.

      Subpart 1201.6_Career Development, Contracting Authority and 
                            Responsibilities

1201.602-3 Ratification of unauthorized commitments.
1201.603-1 General.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40270, Aug. 8, 1994, unless otherwise noted.



               Subpart 1201.1_Purpose, Authority, Issuance



1201.101  Purpose.

    The Department of Transportation Acquisition Regulation (TAR) 
establishes uniform acquisition policies and procedures, which implement 
and supplement the Federal Acquisition Regulation (FAR).



1201.104  Applicability.

    (a) Statute, the FAR, and (TAR) 48 CFR chapter 12 apply to all 
acquisitions within the Department unless otherwise excluded by statute, 
the FAR or (TAR) 48 CFR chapter 12.
    (b) The following order of precedence applies to resolve any 
acquisition regulation or procedural inconsistency found within (TAR) 48 
CFR chapter 12 or the Transportation Acquisition Manual (TAM):
    (1) Statute;
    (2) FAR or other applicable regulation;
    (3) TAR;
    (4) DOT Orders; and
    (5) TAM.
    (c) The Maritime Administration may depart from the requirements of 
the FAR and (TAR) 48 CFR chapter 12 as authorized by 40 U.S.C. 474(16), 
but shall adhere to those regulations to the maximum extent practicable. 
Exceptions from the requirements of the FAR and/or TAR shall be 
documented according to Maritime Administration procedures or in each 
contract file, as appropriate.

[59 FR 40270, Aug. 8, 1994. Redesignated at 61 FR 50249, Sept. 25, 1996]



1201.105  Issuance.



1201.105-1  Publication and code arrangement.

    (a) The TAR is published in: (1) The Federal Register; (2) cumulated 
form in the CFR; and (3) separate loose-leaf form.
    (b) The TAR is issued as chapter 12 of Title 48 of the CFR.

[59 FR 40270, Aug. 8, 1994. Redesignated at 61 FR 50249, Sept. 25, 1996]



1201.105-2  Arrangement of regulations.

    (a) General. The TAR, which encompasses both Departmentwide and 
operating administration-unique guidance (see (TAR) 48 CFR 1201.3), 
conforms with the arrangement and numbering system prescribed by (FAR) 
48 CFR 1.104. Guidance which is unique to an operating administration 
contains the operating administration acronym directly preceding the 
cite/page number.

[[Page 558]]

The following acronyms apply when regulatory coverage is written:

FAA--Federal Aviation Administration
FHWA--Federal Highway Administration
FRA--Federal Railroad Administration
FTA--Federal Transit Administration
MARAD--Maritime Administration
NHTSA--National Highway Traffic Safety Administration
RSPA--Research and Special Programs Administration
SLSDC--Saint Lawrence Seaway Development Corporation
TASC--Transportation Administrative Service Center
USCG--United States Coast Guard

    (b) Numbering--(1) Departmentwide guidance.
    (i) The numbering illustrations at (FAR) 48 CFR 1.105-2 apply to the 
TAR.
    (ii) Coverage within (TAR) 48 CFR chapter 12 is identified by the 
prefix ``12'' followed by the complete FAR cite which may be down to the 
subparagraph level (e.g., (TAR) 48 CFR 1201.201-1).
    (iii) Coverage in this chapter 12 that supplements the FAR will use 
part, subpart, section and subsection numbers ending in ``70'' through 
``89''. A series of numbers beginning with ``70'' is used for provisions 
and clauses (e.g., (TAR) 48 CFR 1201.301-70).
    (iv) Coverage in (TAR) 48 CFR chapter 12, other than that identified 
with a ``70'' or higher number, that implements the FAR uses the 
identical number sequence and caption of the FAR segment being 
implemented which may be down to the subparagraph level. Subparagraph 
numbers/letters may not be shown as sequential, but may be shown by the 
specific paragraph/subparagraph implemented from the FAR (e.g., (TAR) 48 
CFR 1201.201-1 contains subparagraphs (b) and (d) because only these 
subparagraphs, correlating to FAR, are being supplemented by (TAR) 48 
CFR chapter 12).
    (2) Operating administration-unique guidance. Supplementary material 
for which there is no counterpart in the FAR or TAR shall be identified 
using chapter, part, subpart, section, or subsection numbers of ``90'' 
and up (e.g., the U.S. Coast Guard's acronym is ``USCG''; a USCG-unique 
clause pertaining to ``Inspection and/or Acceptance'' would be 
designated ``USCG 1252.246-90'').
    (c) References and citations. (TAR) 48 CFR chapter 12 may be 
referred to as the Department of Transportation Acquisition Regulation 
or the TAR. Cross references to the FAR in (TAR) 48 CFR chapter 12 will 
be cited by ``FAR'' followed by the FAR numbered cite, and cross 
reference to the TAM in (TAR) 48 CFR chapter 12 will be cited by ``TAM'' 
followed by the TAM numbered cite. References to specific cites within 
(TAR) 48 CFR chapter 12 will be by the numbered cite only.

[59 FR 40270, Aug. 8, 1994. Redesignated at 61 FR 50249, Sept. 25, 1996, 
as amended at 62 FR 67750, Dec. 30, 1997]



1201.105-3  Copies.

    (a) Copies of the TAR in Federal Register, loose-leaf, and CFR form 
may be purchased from the Superintendent of Documents, Government 
Printing Office, Washington, DC, 20402.
    (b) The (TAR) 48 CFR chapter 12 and Transportation Acquisition 
Circulars (TACs) are available on the internet. See part 1202, appendix 
A, for the internet address.

[59 FR 40270, Aug. 8, 1994. Redesignated at 61 FR 50248, Sept. 25, 1996, 
as amended at 62 FR 67750, Dec. 30, 1997]



1201.106  OMB Approval under the Paperwork Reduction Act.

    (a) Data collection by regulation. The information collection and 
recordkeeping requirements contained in (TAR) 48 CFR chapter 12 have 
been approved by the Office of Management and Budget (OMB). The OMB 
Control Number for the collection of the information under 48 CFR 
chapter 12 is 2105-0517 which expires on May 31, 2000.
    (b) Data collection under proposed contracts. Under the regulations 
implementing the requirements of the Paperwork Reduction Act (5 CFR part 
1320), OMB must approve, prior to obligation of funds, proposed 
contracts which require the collection of information from ten or more 
non-Federal persons or entities. Solicitations containing this type of 
information collection may be released prior to OMB approval provided:
    (1) A statement is included in the solicitation to the effect that 
contract

[[Page 559]]

award will not be made until OMB approval of the information collection 
requirements of the proposed contract has been obtained; and
    (2) Enough time is permitted to allow receipt of OMB approval prior 
to contract award.

[59 FR 40270, Aug. 8, 1994. Redesignated at 61 FR 50248, Sept. 25, 1996, 
as amended at 62 FR 67750, Dec. 30, 1997]



                      Subpart 1201.2_Administration



1201.201  Maintenance of the FAR.



1201.201-1  The two councils.

    (b) The SPE is responsible for providing a DOT representative to the 
Civilian Agency Acquisition Council.

[59 FR 40270, Aug. 8, 1994, as amended at 64 FR 2436, Jan. 14, 1999]



              Subpart 1201.3_Agency Acquisition Regulations



1201.301  Policy.

    (a)(1) Acquisition regulations--(i) Departmentwide acquisition 
regulations. The authority of the agency head under (FAR) 48 CFR 
1.301(a)(1) is delegated to the Assistant Secretary for Administration.
    (ii) Operating administration acquisition regulations. Operating 
administration acquisition regulations, and any changes thereto, shall 
be reviewed and approved by the SPE for insertion into the TAR as a TAR 
supplemental regulation before the SPE submits the proposed coverage for 
publication in the Federal Register in accordance with (FAR) 48 CFR 
1.501. Operating administration regulations may be more restrictive or 
require higher approval levels than those permitted by (TAR) 48 CFR 
chapter 12 unless specified otherwise.
    (2) Acquisition procedures. The authority of the agency head under 
(FAR) 48 CFR 1.301(a)(2) to issue or authorize the issuance of internal 
agency guidance at any organizational level has been delegated to the 
SPE.
    (i) Departmentwide acquisition procedures. DOT internal operating 
procedures are contained in the Transportation Acquisition Manual (TAM).
    (ii) OA acquisition procedures. Procedures necessary to implement or 
supplement the FAR, TAR, or TAM may be issued by the HCA, who may 
delegate this authority to any organizational level deemed appropriate. 
OA procedures may be more restrictive or require higher approval levels 
than those permitted by the TAM unless specified otherwise.
    (b) The authority of the agency head under (FAR) 48 CFR 1.301(b) to 
establish procedures to ensure that agency acquisition regulations are 
published for comment in the Federal Register in conformance with the 
procedures in FAR Subpart 1.5 is delegated to the Assistant General 
Counsel for Regulation and Enforcement (C-50).

[59 FR 40270, Aug. 8, 1994, as amended at 64 FR 2436, Jan. 14, 1999]



1201.301-70  Amendment of (TAR) 48 CFR chapter 12.

    (a) Changes to the regulation may be the result of recommendations 
from internal DOT personnel, other Government agencies, or the public. 
These changes are to be submitted in the following format to the Office 
of Acquisition and Grant Management, 400 7th Street, S.W., Washington, 
DC 20590:
    (1) Problem: Succinctly state the problems created by current TAR 
language and describe the factual and/or legal reasons necessitating 
regulatory change.
    (2) Recommendation: Identify the recommended change by using the 
current language and lining through the words being deleted and 
inserting proposed language in brackets. If the change is extensive, 
deleted language may be displayed by forming a box with diagonal lines 
connecting the corners.
    (3) Discussion: Explain why the change is necessary and how the 
change will solve the problem. Address any cost or administrative impact 
on Government activities, offerors, and contractors. Provide any other 
helpful information and documents such as statutes, legal decisions, 
regulations, reports, etc.
    (4) Point of contact: Provide a point of contact for answering 
questions regarding the recommendation.
    (b) The TAR will be maintained by the SPE through the TAR/TAM change

[[Page 560]]

process (i.e., representatives from DOT operating administrations 
specifically designated to formulate Departmental acquisition policies 
and procedures).
    (1) Transportation Acquisition Circular (TAC). TACs containing 
loose-leaf replacement pages which revise parts, subparts, or paragraphs 
(also see (TAR) 48 CFR 1201.301-72 below) will be used to amend (TAR) 48 
CFR chapter 12. Each replacement page will bear at the top the TAC 
number and date. A vertical bar next to the coverage indicates that a 
change has been made.
    (2) TAR Notice (TN). (i) TNs shall be issued when interim guidance 
is necessary and as often as may be necessary, under any of the 
following circumstances:
    (A) To promulgate, as rapidly as possible, selected material in a 
general or narrative manner, in advance of a TAC issuance;
    (B) To disseminate other acquisition related information; or
    (C) To issue guidance which is expected to be effective for a period 
of 1 year or less.
    (ii) Each TN will terminate upon its specified expiration date.

[59 FR 40270, Aug. 8, 1994, as amended at 62 FR 26419, May 14, 1997]



1201.301-71  Effective date.

    Unless otherwise stated, the following applies--
    (a) Statements in TACs or TNs to the effect that the material 
therein is ``effective upon receipt,'' ``upon a specified date,'' or 
that changes set forth in the document are ``to be used upon receipt,'' 
mean that any new or revised provisions, clauses, procedures, or forms 
must be included in solicitations, contracts or modifications issued 
thereafter; and
    (b) Unless expressly directed by statute or regulation, if 
solicitations are already in process or negotiations complete when the 
TAC or TN is received, the new information (e.g., forms and clauses) 
need not be included if it is determined by the chief of the contracting 
office that its inclusion would not be in the best interest of the 
Government.



1201.301-72  TAC or TN numbering.

    TACs and TNs will be numbered consecutively on a fiscal year basis 
beginning with number ``01'' prefixed by the last two digits of the 
fiscal year (e.g., TNs 94-01 and 94-02 indicate the first two TNs issued 
in fiscal year 1994).



1201.304  Agency control and compliance procedures.

    (a) DOT shall control the proliferation of acquisition regulations 
and any revisions thereto (except as noted in paragraph (b) of this 
section) by using an internal TAR change process that involves input 
from many DOT elements including operating administration 
representatives on the Procurement Management Council. The operating 
administration member shall represent their operating administration's 
viewpoint along with Departmentwide considerations in reaching a 
decision on TAR changes.
    (b) Operating administration-unique regulations will not be 
processed through the TAR Council System, but shall be reviewed by 
operating administration legal counsel and submitted to M-60 for review 
and approval. (See (TAR) 48 CFR 1252.101 for additional instructions 
pertaining to provisions and clauses.)

[59 FR 40270, Aug. 8, 1994, as amended at 62 FR 26420, May 14, 1997]



            Subpart 1201.470_Deviations From the FAR and TAR



1201.403  Individual deviations.

    The authority of the agency head under (FAR) 48 CFR 1.403 and (TAR) 
48 CFR chapter 12 is delegated to the Head of the Contracting Activity 
or designee no lower than Senior Executive Service (SES)/Flag Officer 
level. However, see Transportation Acquisition Manual (TAM) 1201.403. 
The TAM is available through the Government Printing Office.

[61 FR 50249, Sept. 25, 1996]

[[Page 561]]



1201.404  Class deviations.

    Class deviations from the FAR and (TAR) 48 CFR chapter 12 may be 
granted in writing by the Senior Procurement Executive unless (FAR) 48 
CFR 1.405(e) is applicable.



      Subpart 1201.6_Career Development, Contracting Authority and 
                            Responsibilities



1201.602-3  Ratification of unauthorized commitments.

    (b) Policy. It is the policy of DOT that all procurements are to be 
made only by Government officials having authority to make such 
acquisitions. Procurements made by other than authorized personnel are 
contrary to Departmental policy and may be considered matters of serious 
misconduct on the part of the employee making an unauthorized 
commitment. Consideration will be given to initiating disciplinary 
action against an employee who makes an unauthorized commitment.



1201.603-1  General.

    Each DOT operating administration is responsible for appointing its 
contracting officers.



PART 1202_DEFINITIONS OF WORDS AND TERMS--Table of Contents




                       Subpart 1202.1_Definitions

Sec.
1202.1 Definitions.

                     Subpart 1202.70_Internet Links

1202.7000 General.

Appendix A to Part 1202--List of Internet Addresses for TAR Documents

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



                       Subpart 1202.1_Definitions



1202.1  Definitions.

    (a) Agency, Federal agency, or Executive agency means the Department 
of Transportation.
    (b) Chief Information Officer (CIO) means the Director of the Office 
of the CIO (S-80).
    (c) Chief of the contracting office (COCO) means the individual(s) 
responsible for managing the contracting office(s) within an operating 
administration.
    (d) Contracting activity includes all the contracting offices within 
an operating administration and is the same as the term ``procuring 
activity.''
    (e) Contracting officer means an individual authorized by virtue of 
his/her position or by appointment to perform the functions assigned by 
the Federal Acquisition Regulation and the Transportation Acquisition 
Regulation.
    (f) Department of Transportation (DOT) means all of the operating 
administrations included within the Department of Transportation.
    (g) Head of the agency or agency head means the Deputy Secretary 
except for acquisition actions that, by the terms of a statute or 
delegation, must be done specifically by the Secretary of 
Transportation.
    (h) Head of the contracting activity (HCA) means the individual 
responsible for managing the contracting offices within an operating 
administration who is a member of the Senior Executive Service or a flag 
officer and is the same as the term ``head of the procuring activity.''
    (i) Head of the operating administration (HOA) means the individual 
appointed by the President to manage the operating administration. (For 
acquisition related matters, the Director, Transportation Administrative 
Service Center (TASC) is the HOA for TASC.)
    (j) Operating administration (OA) means the following components of 
DOT:
    (1) Federal Aviation Administration (FAA). (FAA is exempt from the 
TAR (48 CFR chapter 12) and TAM in accordance with the ``Department of 
Transportation and Related Appropriations Act for FY 1996'');
    (2) Federal Highway Administration (FHWA);
    (3) Federal Railroad Administration (FRA);
    (4) Federal Transit Administration (FTA);
    (5) Maritime Administration (MARAD);
    (6) National Highway Traffic Safety Administration (NHTSA);
    (7) Transportation Administrative Service Center (TASC);

[[Page 562]]

    (8) Research and Special Programs Administration (RSPA);
    (9) Saint Lawrence Seaway Development Corporation (SLSDC); and
    (10) United States Coast Guard (USCG).
    (k) Senior Procurement Executive (SPE) means the Director of the 
Office of Acquisition and Grant Management (M-60).

[59 FR 40272, Aug. 8, 1994, as amended at 61 FR 50249, Sept. 25, 1996; 
62 FR 26420, May 14, 1997; 62 FR 67750, Dec. 30, 1997]



                     Subpart 1202.70_Internet Links



1202.7000  General.

    Throughout the (TAR) 48 CFR chapter 12, referenced documents which 
can be found on the internet will cite the applicable internet address. 
These addresses are located in Appendix A of this part.

[62 FR 67750, Dec. 30, 1997]

  Appendix A to Part 1202--List of Internet Addresses for TAR Documents

----------------------------------------------------------------------------------------------------------------
           TAR part                             Document name                           Internet address
----------------------------------------------------------------------------------------------------------------
1201.........................  TAR...........................................  http://www.dot.gov/ost/m60/tamtar/
                                                                                part1201.htm
                               TAC...........................................  http://www.dot.gov/ost/m60/tamtar/
                                                                                part1201.htm
1205.........................  DOT Procurement Forecast......................  http://osdbuweb.dot.gov/
                                                                                consolic.htm
1234.........................  Major Acquisition Policies and Procedures.....  http://www.dot.gov/ost/m60/tamtar/
                                                                                chap1234.htm
----------------------------------------------------------------------------------------------------------------


[62 FR 67750, Dec. 30, 1997]



PART 1203_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 1203.1_Safeguards

Sec.
1203.101-3 Agency regulations.
1203.104-11 Criminal and civil penalties, and further administrative 
          remedies.

      Subpart 1203.2_Contractor Gratuities to Government Personnel

1203.203 Reporting suspected violations of the Gratuities clause.
1203.204 Treatment of violations.

        Subpart 1203.3_Reports of Suspected Antitrust Violations

1203.301 General.

                     Subpart 1203.4_Contingent Fees

1203.405 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

            Subpart 1203.5_Other Improper Business Practices

1203.502 Subcontractor kickbacks.
1203.502-2 General.

 Subpart 1203.8_Limitation on the Payment of Funds to Influence Federal 
                              Transactions

1203.806 Processing suspected violations.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40273, Aug. 8, 1994, unless otherwise noted.



                        Subpart 1203.1_Safeguards



1203.101-3  Agency regulations.

    (b) 5 CFR part 2635, Standards of Ethical Conduct for Employees of 
the Executive Branch, supersedes the DOT regulation at 49 CFR part 99.



1203.104-11  Criminal and civil penalties, and further administrative remedies.

    (a) The COCO is the reviewing official for processing violations.
    (1) When the contracting officer receives information of a violation 
or possible violation, and concludes that the reported violation or 
possible violation of the statutory prohibitions has no impact on the 
pending procurement, the contracting officer shall forward the 
information required by (FAR) 48 CFR 3.104-11(a)(1) to the COCO for 
concurrence with the contracting officer's

[[Page 563]]

conclusion. If the COCO concurs with the conclusion, the contracting 
officer shall proceed with the award, and the COCO shall submit the 
information and conclusion to the HCA.
    (2) When the COCO does not concur with the conclusion of the 
contracting officer, the COCO shall advise the contracting officer to 
withhold award, and the COCO shall promptly forward the information and 
documentation to the HCA.
    (3) When the contracting officer determines that the information 
concerning a violation or possible violation will impact the pending 
procurement, the contracting officer shall promptly forward the 
information and documentation to the HCA.
    (b) The HCA shall review the information transmitted in accordance 
with subparagraph (a)(1) through (a)(3) of this section and take 
appropriate action, as required by (FAR) 48 CFR 3.104-11(b).
    (c) If the HCA believes that a violation has occurred and the 
information should be disclosed to a criminal investigative agency (e.g, 
the Department of Justice) or that there may be a possible violation, 
and an investigation should be conducted, the HCA shall obtain guidance 
from legal counsel and the OIG prior to taking any action. If the HCA, 
pursuant to (FAR) 48 CFR 3.104-11(f), determines that award is justified 
by urgent and compelling circumstances, or is otherwise in the interests 
of the Government, a memorandum of the facts and circumstances shall be 
signed by the HCA and placed in the contract file.



      Subpart 1203.2_Contractor Gratuities to Government Personnel



1203.203  Reporting suspected violations of the Gratuities clause.

    (a) Suspected violations of the Gratuities clause shall be reported 
to the contracting officer responsible for the acquisition (or the COCO 
if the contracting officer is suspected of the violation). The 
contracting officer (or COCO) shall obtain from the person reporting the 
violation, and any witnesses to the violation, the following 
information:
    (1) The date, time, and place of the suspected violation;
    (2) The name and title (if known) of the individual(s) involved in 
the violation; and
    (3) The details of the violation (e.g., the gratuity offered or 
intended) to obtain a contract or favorable treatment under a contract.
    (b) The person reporting the violation and witnesses (if any) should 
be requested to sign and date the information certifying that the 
information furnished is true and correct.
    (c) The COCO shall report suspected violations to the Office of the 
Inspector General (OIG) (J-1), 400 7th Street, S.W., Washington, DC, 
20590, with a copy to General Counsel (C-1) and the OA's Chief Counsel.



1203.204  Treatment of violations.

    (a) The authority of the agency head established in (FAR) 48 CFR 
3.204(a), to determine whether a gratuities clause violation has 
occurred, has been delegated to the HCA. If the decision maker pursuant 
to this delegation has been personally and substantially involved in the 
procurement, the advice of Government legal counsel should be sought to 
determine whether an alternate decision maker should be designated.
    (b) The COCO shall ensure that the hearing procedures required by 
FAR 3.204 are afforded to the contractor. Government legal counsel 
should be consulted regarding the appropriateness of the hearing 
procedures that are established.
    (c) If the alleged gratuities violation occurs during the ``conduct 
of an agency procurement'' as defined by (FAR) 48 CFR 3.104-4(c)(1), the 
COCO shall consult with Government legal counsel regarding the approach 
for appropriate processing of either the Procurement Integrity Act 
violation and/or the Gratuities violation.

[[Page 564]]



        Subpart 1203.3_Reports of Suspected Antitrust Violations



1203.301  General.

    (b) The same procedures contained in (TAR) 48 CFR 1203.203 shall 
also be followed for suspected antitrust violations, except suspected 
antitrust violations shall be reported through legal counsel in 
accordance with (FAR) 48 CFR 3.303.



                     Subpart 1203.4_Contingent Fees



1203.405  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    (a) The same procedures contained in (TAR) 48 CFR 1203.203 shall 
also be followed for misrepresentation or violations of the covenant 
against contingent fees.

[59 FR 40273, Aug. 8, 1994. Redesignated at 62 FR 26420, May 14, 1997]



            Subpart 1203.5_Other Improper Business Practices



1203.502  Subcontractor kickbacks.



1203.502-2  General.

    (g) The same procedures contained in (TAR) 48 CFR 1203.203 shall 
also be followed for subcontractor kickbacks.



 Subpart 1203.8_Limitation on the Payment of Funds to Influence Federal 
                              Transactions



1203.806  Processing suspected violations.

    Contracting officers shall report, in accordance with OA procedures, 
suspected violations of the requirements of 31 U.S.C. 1352 to the 
Assistant Inspector General for Investigations (JI-1), 400 Seventh 
Street, S.W., Washington, DC, 20590.



PART 1204_ADMINISTRATIVE MATTERS--Table of Contents




                    Subpart 1204.1_Contract Execution

Sec.
1204.103 Contract clause.

                      Subpart 1204.8_Contract Files

1204.804 Closeout of contract files.
1204.804-1 Closeout by the office administering the contract.
1204.804-5 Detailed procedures for closing out contract files.
1204.804-570 Supporting closeout documents.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40274, Aug. 8, 1994, unless otherwise noted.



                    Subpart 1204.1_Contract Execution



1204.103  Contract clause.

    The contracting officer shall insert the clause at (FAR) 48 CFR 
52.204-1, Approval of Contract, filled in as appropriate, in 
solicitations when approval to award the resulting contract must be 
obtained from an official at a level above the contracting officer.



                      Subpart 1204.8_Contract Files



1204.804  Closeout of contract files.



1204.804-1  Closeout by the office administering the contract.

    (b) If the contracting officer determines appropriate, the quick 
closeout procedures under (FAR) 48 CFR 42.708 may be used for the 
settlement of indirect costs under contracts when the estimated amount 
(excluding any fixed fee) of the contract is $3 million or less.



1204.804-5  Detailed procedures for closing out contract files.



1204.804-570  Supporting closeout documents.

    (a) When applicable (see parenthetical examples in this paragraph) 
and prior to contract closure, the contracting officer shall obtain the 
listed DOT and Department of Defense (DOD) forms from the contractor to 
facilitate contract closeout.
    (1) Form DOT F 4220.4, Contractor's Release (e.g., see (FAR) 48 CFR 
52.216-7);
    (2) Form DOT F 4220.45, Contractor's Assignment of Refunds, Rebates, 
Credits and Other Amounts (e.g., see (FAR) 48 CFR 52.216-7);
    (3) Form DOT F 4220.46, Cumulative Claim and Reconciliation 
Statement

[[Page 565]]

(e.g., see (FAR) 48 CFR 4.804-5(a)(13); and
    (4) DD Form 882, Report of Inventions and Subcontracts (e.g., see 
(FAR) 48 CFR 52.227-14).
    (b) The forms (See (TAR) 48 CFR part 1253) are used primarily for 
the closeout of cost-reimbursement, time-and-materials, and labor-hour 
contracts. However, the forms may also be used for closeout of other 
contract types or when necessary to protect the Government's interest.



PART 1205_PUBLICIZING CONTRACT ACTIONS--Table of Contents




               Subpart 1205.1_Dissemination of Information

Sec.
1205.101 Methods of disseminating information.

                  Subpart 1205.4_Release of Information

1205.402 General public.

   Subpart 1205.90_Publicizing Contract Actions for Personal Services 
                               Contracting

1205.9000 Applicability. (USCG)

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



               Subpart 1205.1_Dissemination of Information



1205.101  Methods of disseminating information.

    (a)(2)(iii) Contracting officers shall post solicitations expected 
to exceed $25,000, if required in OA procedures.
    (b) DOT publishes a Procurement Forecast of planned procurements 
each fiscal year, which is available from the DOT Office of Small and 
Disadvantaged Business Utilization (S-40), 400 Seventh Street, S.W., 
Washington, DC, 20590.

[59 FR 40274, Aug. 8, 1994, as amended at 61 FR 50249, Sept. 25, 1996]



                  Subpart 1205.4_Release of Information



1205.402  General public.

    It is DOT policy to furnish to the general public, upon request, the 
following information on proposed contracts and contract awards:
    (a) Prior to the opening of sealed bids or the closing date for 
receipt of proposals, the names of firms invited to submit sealed bids 
or proposals;
    (b) Prior to the opening of sealed bids or the closing date for 
receipt of proposals, the names of firms which attended pre-proposal or 
pre-bid conferences, when held;
    (c) After the opening of sealed bids, names of firms which submitted 
bids; and
    (d) After contract award, the names of firms which submitted 
proposals.

Requests for other specific information shall be processed in accordance 
with the DOT Freedom of Information Act rules and regulations ((TAR) 48 
CFR 1224.202).

[59 FR 40274, Aug. 8, 1994]



   Subpart 1205.90_Publicizing Contract Actions for Personal Services 
                               Contracting



1205.9000  Applicability. (USCG)

    Contracts awarded by the U.S. Coast Guard using the procedures in 
(TAR) 48 CFR 1237.104-91 are expressly authorized under Section 1091 of 
Title 10 U.S.C. as amended by Pub. L. 104-106, DOD Authorization Act, 
Section 733 for the Coast Guard and are exempt from the requirements of 
(FAR) 48 CFR part 5.

[64 FR 2436, Jan. 14, 1999]



PART 1206_COMPETITION REQUIREMENTS--Table of Contents




                  Subpart 1206.5_Competition Advocates

Sec.
1206.501 Requirement.

     Subpart 1206.90_Competition Requirements for Personal Services 
                               Contracting

1206.9000 Applicability. (USCG)

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



                  Subpart 1206.5_Competition Advocates



1206.501  Requirement.

    The DOT Senior Competition Advocate (SCA) is located in the Office 
of

[[Page 566]]

the Assistant Secretary for Administration. Correspondence may be sent 
directly to M-60.

[59 FR 40274, Aug. 8, 1994]



     Subpart 1206.90_Competition Requirements for Personal Services 
                               Contracting



1206.9000  Applicability. (USCG)

    Contracts awarded by the U.S. Coast Guard using the procedures in 
(TAR) 48 CFR 1237.104-91 are expressly authorized under section 1091 of 
Title 10 U.S.C. as amended by Pub. L. 104-106, DOD Authorization Act, 
section 733 for the Coast Guard and are exempt from the competition 
requirements of (FAR) 48 CFR part 6.

[64 FR 2436, Jan. 14, 1999]



PART 1207_ACQUISITION PLANNING--Table of Contents




         Subpart 1207.3_Contractor Versus Government Performance

Sec.
1207.302 General.
1207.307 Appeals.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



         Subpart 1207.3_Contractor Versus Government Performance



1207.302  General.

    Procedures for DOT's implementation of OMB Circular A-76, 
Performance of Commercial Activities, and (FAR) 48 CFR 7.3 are found in 
DOT Order 4400.2 series, Performance of Commercial Activities.

[59 FR 40275, Aug. 8, 1994]



1207.307  Appeals.

    DOT appeal procedures for informal administrative review of initial 
cost-comparison results are contained in DOT Order 4400.2 series.

[59 FR 40275, Aug. 8, 1994]



PART 1209_CONTRACTOR QUALIFICATIONS--Table of Contents




         Subpart 1209.4_Debarment, Suspension, and Ineligibility

Sec.
1209.408-70 Denial of funds.

           Subpart 1209.5_Organizational Conflicts of Interest

1209.507 Solicitation provisions.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40275, Aug. 8, 1994, unless otherwise noted.



         Subpart 1209.4_Debarment, Suspension, and Ineligibility



1209.408-70  Denial of funds.

    (a) In accordance with Section 558 of the National Defense 
Authorization Act for Fiscal Year 1995 (Pub. L. 103-337) and Section 206 
of the Coast Guard Authorization Act of 1996 (Pub. L. 104-324), no funds 
available under appropriations acts for any fiscal year for DOT may 
(with respect to recruiting) be provided by contract to any institution 
of higher education that has a policy or practice, regardless of when 
implemented, that either prohibits or in effect prevents the Secretary 
of Defense from obtaining for military recruiting purposes:
    (1) Entry to campuses or access to students on campuses; or
    (2) Access to directory information on students.
    (b) Directory information means the student's name, address, 
telephone listing, date and place of birth, level of education, academic 
major, degrees received, and the most recent educational institution in 
which the student was enrolled.
    (c) Students referred to in paragraph (a)(1) of this section are 
individuals who are 17 years of age or older and are enrolled at a 
covered school.
    (d) Covered school means an institution of higher education, or a 
subelement of an institution of higher education.

[62 FR 67751, Dec. 30, 1997]

[[Page 567]]



           Subpart 1209.5_Organizational Conflicts of Interest



1209.507  Solicitation provisions.

    The contracting officer may insert the provision at (TAR) 48 CFR 
1252.209-70, ``Disclosure of Conflicts of Interest'' in all 
solicitations for negotiated acquisitions, when simplified acquisitions 
procedures in (FAR) 48 CFR Part 13, are not used and when the 
contracting officer believes the conditions enumerated in (FAR) 48 CFR 
9.507-2 warrant inclusion.

[61 FR 50249, Sept. 25, 1996]

                  PART 1210_MARKET RESEARCH [RESERVED]



PART 1211_DESCRIBING AGENCY NEEDS--Table of Contents




Sec.

     Subpart 1211.1_Selecting and Developing Requirements Documents

1211.104 Items peculiar to one manufacturer.
1211.104-70 Offer evaluation and award, brand name or equal 
          descriptions.

       Subpart 1211.2_Using and Maintaining Requirements Documents

1211.204-70 Solicitation provisions and contract clauses.
1211.204-90 Solicitation provision and contract clause (USCG).

                Subpart 1211.6_Priorities and Allocations

1211.602 General.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 61 FR 50249, Sept. 25, 1996, unless otherwise noted.



     Subpart 1211.1_Selecting and Developing Requirements Documents

    Source: 62 FR 26420, May 14, 1997, unless otherwise noted.



1211.104  Items peculiar to one manufacturer.



1211.104-70  Offer evaluation and award, brand name or equal descriptions.

    (a) An offer may not be rejected for failure of the offered product 
to equal a characteristic of a brand name product if it was not 
specified in the brand name or equal description. However, if it is 
clearly established that the unspecified characteristic is essential to 
the intended end use, the solicitation may be defective and need to be 
amended or the requirement resolicited.
    (b) The contracting officer shall insert in the solicitation an 
entry substantially as follows for completion by the offeror in the item 
listing after each item or component part of an end item to which a 
brand name or equal purchase description applies:

Offering on:

________________________________________________________________________
Manufacturer's Name:

________________________________________________________________________
Brand:

________________________________________________________________________
No:

________________________________________________________________________

    (c) Except when bid samples are requested for brand name or equal 
procurements, the following note shall be inserted in the item listing 
after each brand name or equal item (or component part), or at the 
bottom of each page, listing several such items, or in a manner that may 
otherwise direct the offeror's attention to this note:

    Offerors offering other than brand name items identified herein 
should furnish with their offers adequate information to ensure that a 
determination can be made as to the equality of the product(s) offered 
(see the provision at (TAR) 48 CFR 1252.211-70, Brand Name or Equal).



       Subpart 1211.2_Using and Maintaining Requirements Documents



1211.204-70  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the provision at (TAR) 48 
CFR

[[Page 568]]

1252.211-70, Brand Name or Equal, in solicitations using a brand name or 
equal purchase description whenever practicable.
    (b) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.211.71, Index for Specifications, when an index or table of 
contents may be furnished with the specification.

[62 FR 26420, May 14, 1997]



1211.204-90  Solicitation provision and contract clause. (USCG)

    (a) The contracting officer shall insert the USCG clause at (TAR) 48 
CFR 1252.211-90, Bar Coding Requirement, (also see (TAR) 48 CFR 
1213.507-90(a)) when the bar coding of supplies is necessary.
    (b) See (TAR) 48 CFR 1213.507-90 for a provision which is required 
when the USCG clause at (TAR) 48 CFR 1252.211-90, Bar Coding 
Requirement, is used with simplified acquisition procedures.

[64 FR 2437, Jan. 14, 1999]



                Subpart 1211.6_Priorities and Allocations



1211.602  General.

    (c) The USCG is the only DOT OA delegated authority under the 
Defense Priorities and Allocations System (DPAS) regulation (15 CFR 700) 
to assign priority ratings on contracts and orders placed with 
contractors to acquire products, materials, and services in support of 
USCG certified national defense related programs.

          PART 1212_ACQUISITION OF COMMERCIAL ITEMS [RESERVED]



PART 1213_SMALL PURCHASE AND OTHER SIMPLIFIED PURCHASE PROCEDURES
--Table of Contents




                         Subpart 1213.1_General

Sec.
1213.106 Soliciting competition, evaluation of quotations or offers, 
          award and documentation.
1213.106-190 Soliciting competition. (USCG)

              Subpart 1213.3_Simplified Acquisition Methods

1213.302 Purchase orders.
1213.302-590 Clauses. (USCG)

                     Subpart 1213.5_Purchase Orders

1213.507-90 Clauses. (USCG)

 Subpart 1213.71_Department of Transportation Procedures for Acquiring 
                            Training Services

1213.7100 Applicability.
1213.7101 Solicitation provision and contract clause.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



                        Subpart 1213.1_Procedures

    Source: 64 FR 2437, Jan. 14, 1999, unless otherwise noted.



1213.106  Soliciting competition, evaluation of quotations or offers, 
award and documentation.



1213.106-190  Soliciting competition. (USCG)

    The contracting officer shall insert the USCG provision at (TAR) 48 
CFR 1252.213-90, Evaluation Factor for Coast Guard Performance of Bar 
Coding Requirement, in requests for quotations when the USCG clause at 
(TAR) 48 CFR 1252.211-90, Bar Coding Requirement, is used with 
simplified acquisition procedures.



              Subpart 1213.3_Simplified Acquisition Methods

    Source: 64 FR 2437, Jan. 14, 1999, unless otherwise noted.



1213.302  Purchase orders.



1213.302-590  Clauses. (USCG)

    The contracting officer shall insert the USCG clause at (TAR) 48 CFR 
1252.211-90, Bar Coding Requirement, in requests for quotations and 
purchase orders issued by the Inventory Control Points when bar coding 
of supplies is necessary.



                     Subpart 1213.5_Purchase Orders



1213.507-90  Clauses. (USCG)

    The contracting officer shall insert the USCG clause at (TAR) 48 CFR 
1252.211-90, Bar Coding Requirement, in

[[Page 569]]

requests for quotations and purchase orders issued by the Inventory 
Control Points when bar coding of supplies is necessary.

[59 FR 40276, Aug. 8, 1994, as amended at 61 FR 50249, Sept. 25, 1996]



 Subpart 1213.71_Department of Transportation Procedures for Acquiring 
                            Training Services

    Source: 61 FR 391, Jan. 5, 1996, unless otherwise noted.



1213.7100  Applicability.

    (a) DOT policy at (TAR) 48 CFR 1237.7000 also applies to the 
Standard Form (SF) 182, Request, Authorization, Agreement and 
Certification of Training, which may be used to acquire training 
services; however, the policy does not apply to training services 
acquired by the Government purchase/credit card. The Government 
purchase/credit card can only be used to acquire training services 
valued at $2,500 or less.
    (b) As reflected in (TAR) 48 CFR 1237.7002, this policy does not 
apply to training attended by DOT employees which is scheduled and 
conducted by Government sources of supply, educational institutions, or 
private entities where DOT does not control or sponsor the training. 
Examples of when the policy does and does not apply include:
    (1) When SF 182s are issued for three DOT employees to attend a one 
week course at a university or other private entity, the policy does not 
apply. DOT does not control this course because the university or 
private entity has a contract in place with the training provider and 
DOT is placing an order under an existing contract; and
    (2) When DOT awards a contract to a university or other private 
entity to provide training for DOT and/or other Government personnel, 
the policy applies. DOT controls this course; therefore, no soliciting 
or advertising of private, non-Government training while conducting the 
contracted-for training is permitted.



1213.7101  Solicitation provision and contract clause.

    (a) Contracting officers shall insert the provision at (TAR) 48 CFR 
1252.237-71, Certification of Data, in all solicitations and requests 
for quotations, and the clause at (TAR) 48 CFR 1252.237-72, Prohibition 
on Advertising, in solicitations, requests for quotations, and all 
contracts (e.g., purchase orders, SF 182s) for training services when 
the content and/or presentation of the training is controlled by DOT.
    (b) Contracting officers shall incorporate the successful offeror's 
certified data into any resultant contract(s). Certified data may be 
incorporated by reference, if the contracting officer determines it 
contains sufficient descriptive information (i.e., dated material such 
as resumes, company and/or personnel qualifications) to reliably 
describe the certified data submitted.



PART 1214_SEALED BIDDING--Table of Contents




                   Subpart 1214.2_Solicitation of Bids

Sec.
1214.205 Solicitation mailing lists.
1214.205-1 Establishment of lists.

                    Subpart 1214.3_Submission of Bids

1214.302 Bid submission.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40276, Aug. 8, 1994, unless otherwise noted.



                   Subpart 1214.2_Solicitation of Bids



1214.205  Solicitation mailing lists.



1214.205-1  Establishment of lists.

    (b) The issuance of a solicitation within a reasonable time (i.e., 
normally 45 days) after receipt of a SF 129, Solicitation Mailing List 
Application, constitutes the notification required under (FAR) 48 CFR 
14.205-1. If a solicitation is not anticipated for release within a 
reasonable time after receipt of the SF 129 or if an applicant does not 
meet the criteria for placement on the

[[Page 570]]

list, the contracting officer shall provide a written notification of 
acceptance or non-acceptance to the applicant within 45 days of 
application receipt.
    (d) Requests for supplemental information shall normally be attached 
to the SF 129 and forwarded to potential suppliers for completion.



                    Subpart 1214.3_Submission of Bids



1214.302  Bid submission.

    (b) Contracting officers may permit telegraphic bids to be 
communicated by means of a telephone call from the telegraph office to 
the designated office provided that procedures and controls have been 
established by the COCO for receiving and safeguarding these incoming 
bids.



PART 1215_CONTRACTING BY NEGOTIATION--Table of Contents




  Subpart 1215.2_Solicitation and Receipt of Proposals and Information

Sec.
1215.204 Contract format.
1215.204-3 Contract clauses.
1215.207-70 Handling proposals and information.

                     Subpart 1215.4_Contract Pricing

1215.404 Proposal analysis.
1215.404-470 Payment of profit or fee.

                  Subpart 1215.6_Unsolicited Proposals

1215.602 Policy.
1215.603 General.
1215.604 Agency points of contact.
1215.606 Agency procedures.
1215.606-2 Evaluation.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418 (b); 48 CFR 3.1.

    Source: 64 FR 2437, Jan. 14, 1999, unless otherwise noted.



  Subpart 1215.2_Solicitation and Receipt of Proposals and Information



1215.204  Contract format.



1215.204-3  Contract clauses.

    The contracting officer shall insert clause (TAR) 48 CFR 1252.215-
70, Key Personnel and/or Facilities, in solicitations and contracts when 
the selection for award is substantially based on the offeror's 
possession of special capabilities regarding personnel and/or 
facilities.



1215.207-70  Handling proposals and information.

    (a) Offerors' proposals and information received in response to a 
request for information shall be marked as required by TAM 1203.104-5, 
as applicable.
    (b) Proposals may be released outside the Government if it is 
necessary to receive the most competent technical and/or management 
evaluation available.



                     Subpart 1215.4_Contract Pricing



1215.404  Proposal analysis.



1215.404-470  Payment of profit or fee.

    The contracting officer shall not pay profit or fee on undefinitized 
contracts or undefinitized contract modifications. Any profit or fee 
earned shall be paid after the contract or modification is definitized.



                  Subpart 1215.6_Unsolicited Proposals



1215.602  Policy.

    It is the policy of the Department of Transportation (DOT) to 
encourage the submission of new and innovative ideas which will support 
DOT's mission. Through the various Operating Administrations (OA), DOT 
is responsible for transportation safety improvements and endorsement, 
international transportation agreements and the continuity of 
transportation services in the public interest.



1215.603  General.

    DOT will accept for review and consideration, unsolicited proposals 
from any entity. However, DOT will not pay any costs associated with the 
preparation of these proposals. Proposals which do not meet the 
definition and applicable content and marking requirements of (FAR) 48 
CFR 15.6 will not be considered under any circumstances and will be 
returned to the submitter.

[[Page 571]]



1215.604  Agency points of contact.

    (a) The DOT does not have a centralized location to receive 
unsolicited proposals. The effort submitted in the proposal determines 
which DOT OA should receive and evaluate the proposal.
    (b) Proposers should submit proposals to the cognizant OA 
contracting office for appropriate handling. Specific information 
concerning each DOT OA and the type of commodities which they normally 
procure are available on the worldwide web at http://www.dot.gov. 
Proposers are urged to contact these contracting/procurement offices 
prior to submitting a proposal to ensure that the proposal is being 
submitted to the appropriate contracting office for action. This action 
will serve to reduce paperwork and time for the Government and the 
proposer.



1215.606  Agency procedures.

    (a) The OA contracting office is designated as the point of contact 
for receipt of unsolicited proposals. Persons within DOT (e.g., 
technical personnel) who receive unsolicited proposals shall forward the 
document to their cognizant contracting office.
    (b) Within ten working days after receipt of an unsolicited 
proposal, the contracting office shall review the proposal and determine 
whether the proposal meets the content and marking requirements of (FAR) 
48 CFR 15.6. If the proposal does not meet these requirements, it shall 
be returned to the submitter giving the reasons for noncompliance.



1215.606-2  Evaluation.

    (a) If the proposal is in compliance, the contracting office shall 
acknowledge receipt of the proposal to the proposer and give the date 
the proposal evaluation is expected to be completed. The proposal shall 
be marked as required by (FAR) 48 CFR 15.609 and forwarded to the 
appropriate technical office for evaluation. The evaluating office shall 
be given reasonable time to complete the evaluation. However, in no 
event should an evaluation take more than sixty calendar days after 
receipt of the proposal except under extenuating circumstances. 
Contracting offices shall establish a system to ensure that this 
timeframe is met. If the date can not be met, the proposer shall be 
advised accordingly and be given a revised evaluation completion date.
    (b) The evaluating office shall neither reproduce nor disseminate 
the proposal to other offices without the consent of the contracting 
office from which the proposal was received for evaluation. If 
additional information from the proposer is required by the evaluating 
office, the evaluator shall convey this request to the contracting 
office in lieu of the proposer. The evaluator shall not communicate 
directly with the originator of the proposal.
    (c) If the evaluator recommends acceptance of the proposal, the 
cognizant contracting officer shall ensure compliance with all of the 
requirements of (FAR) 48 CFR 15.607.



PART 1216_TYPES OF CONTRACTS--Table of Contents




                  Subpart 1216.2_Fixed-Price Contracts

Sec.
1216.203 Fixed-price contracts with economic price adjustment.
1216.203-4 Contract clauses.
1216.203-470 Solicitation provision.

                   Subpart 1216.4_Incentive Contracts

1216.406 Contract clauses.

              Subpart 1216.5_Indefinite-Delivery Contracts

1216.505 Ordering.

   Subpart 1216.6_Time-and-Materials, Labor-Hour, and Letter Contracts

1216.603 Letter contracts.
1216.603-4 Contract clauses.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40277, Aug. 8, 1994, unless otherwise noted.



                  Subpart 1216.2_Fixed-Price Contracts



1216.203  Fixed-price contracts with economic price adjustment.



1216.203-4  Contract clauses.



1216.203-470  Solicitation provision.

    The contracting officer shall insert the provision at (TAR) 48 CFR 
1252.216-

[[Page 572]]

70, Evaluation of Offers Subject to an Economic Price Adjustment Clause, 
in solicitations containing an economic price adjustment clause.



                   Subpart 1216.4_Incentive Contracts



1216.406  Contract clauses.

    (e)(1)(i) The contracting officer shall insert the clause at (TAR) 
48 CFR 1252.216-71, Determination of Award Fee, in all cost-plus-award-
fee solicitations and contracts.
    (ii) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.216-72, Performance Evaluation Plan, in all cost-plus-award-fee 
solicitations and contracts.
    (iii) The contracting officer shall insert the clause at (TAR) 48 
CFR 1252.216-73, Distribution of Award Fee, in all cost-plus-award-fee 
solicitations and contracts.

[59 FR 40277, Aug. 8, 1994. Redesignated and amended at 62 FR 67751, 
Dec. 30, 1997]



              Subpart 1216.5_Indefinite-Delivery Contracts



1216.505  Ordering.

    (b)(4) Unless otherwise provided in OA procedures, the OA 
Competition Advocate is designated as the OA Task and Delivery Order 
Ombudsman.
    (i) If any corrective action is needed after reviewing complaints 
from contractors on task and delivery order contracts, the OA Ombudsman 
shall provide a written determination of such action to the contracting 
officer.
    (ii) Issues that cannot be resolved within the OA, are to be 
forwarded to the DOT Task and Delivery Order Ombudsman for review and 
resolution.

[61 FR 50249, Sept. 25, 1996]



   Subpart 1216.6_Time-and-Materials, Labor-Hour, and Letter Contracts



1216.603  Letter contracts.



1216.603-4  Contract clause.

    The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.216-74, Settlement of Letter Contract, in all definitized letter 
contracts.



PART 1217_SPECIAL CONTRACTING METHODS--Table of Contents




 Subpart 1217.70_Fixed Price Contracts for Vessel Repair, Alteration or 
                               Conversion

Sec.
1217.7000 Clauses.

          Subpart 1217.71_Energy Savings Performance Contracts

1217.7100 Policy.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40277, Aug. 8, 1994, unless otherwise noted.



 Subpart 1217.70_Fixed Price Contracts for Vessel Repair, Alteration or 
                               Conversion



1217.7000  Clauses.

    The following clauses are to be used in specific solicitations and 
contracts:
    (a) The clauses set forth in (TAR) 48 CFR 1252.217-71 through (TAR) 
48 CFR 1252.217-74 and (TAR) 48 CFR 1252.217-76 through (TAR) 48 CFR 
1252.217-80 shall be included and clause (TAR) 48 CFR 1252.217-75 may be 
included in sealed bid fixed-price solicitations and contracts for 
vessel repair, alteration, or conversion which are to be performed 
within the United States, its possessions, or Puerto Rico.
    (b) Unless inappropriate, the clauses set forth in (TAR) 48 CFR 
1252.217-71 through (TAR) 48 CFR 1252.217-74 and (TAR) 48 CFR 1252.217-
76 through (TAR) 48 CFR 1252.217-80 should be included and (TAR) 48 CFR 
1252.217-75 may be included in negotiated solicitations and contracts to 
be performed outside the United States.
    (c) The clause at (TAR) 48 CFR 1252.217-81, Guarantee, shall be used 
where general guarantee provisions are deemed desirable by the 
contracting officer.
    (1) When inspection and acceptance tests will afford full protection 
to the Government in ascertaining conformance to specifications and the 
absence

[[Page 573]]

of defects and deficiencies, no guarantee clause for that purpose shall 
be included in the contract.
    (2) The customary guarantee period, to be inserted in the first 
sentence of the clause at (TAR) 48 CFR 1252.217-81, Guarantee, is 60 
days. However, in certain instances, the contracting officer may desire 
to include a clause in a contract for a guarantee period of more than 60 
days. In such instances:
    (i) Where, after full inquiry, it has been determined that such 
longer guarantee period will not involve increased costs, a longer 
guarantee period may be substituted by the contracting officer for the 
usual 60 days; or
    (ii) Where the full inquiry discloses that such longer guarantee 
period will involve, or is reasonably expected to involve, increased 
costs, such facts and the reasons for the need for such longer period 
shall be set forth in letter form to the COCO, requesting approval for 
use of guarantee period in excess of 60 days. Upon approval, the longer 
period may be inserted by the contracting officer in the first sentence 
of the clause at (TAR) 48 CFR 1252.217-81, Guarantee.



          Subpart 1217.71_Energy Savings Performance Contracts



1217.7100  Policy.

    Federal agencies may enter into multi-year contracts for a period of 
up to 25 years under Title VIII of the National Energy Conservation 
Policy Act, 42 U.S.C. 8287, as amended. Energy savings performance 
arrangements are appropriate where a contractor makes improvements and/
or operating changes to Federally-owned buildings and facilities to 
improve energy efficiency, at no cost to the Federal Government in 
exchange for a share of energy savings directly resulting from the 
changes. Proposed actions under this section shall be coordinated with 
M-60.



PART 1219_SMALL BUSINESS PROGRAMS--Table of Contents




                         Subpart 1219.2_Policies

Sec.
1219.201 General policy.

 Subpart 1219.7_Subcontracting With Small Business, Small Disadvantaged 
            Business and Women-Owned Small Business Concerns

1219.708 Solicitation provisions and contract clauses.
1219.708-70 DOT solicitation and contract clause.

  Subpart 1219.10_Small Business Competitiveness Demonstration Program

1219.1005 Applicability.
1219.1006 Procedures.

Appendix A to Subpart 1219.10

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40278, Aug. 8, 1994, unless otherwise noted.



                         Subpart 1219.2_Policies



1219.201  General policy.

    (c) The Director, Office of Small and Disadvantaged Business 
Utilization (S-40), is responsible for the implementation and execution 
of the small and small disadvantaged business programs required by 
sections 8 and 15 of the Small Business Act.

[59 FR 40278, Aug. 8, 1994, as amended at 61 FR 50249, Sept. 25, 1996]



 Subpart 1219.7_Subcontracting With Small Business, Small Disadvantaged 
            Business and Women-Owned Small Business Concerns



1219.708  Solicitation provisions and contract clauses.



1219.708-70  DOT solicitation and contract clause.

    The contracting officer shall insert the clause at 1252.219-70, 
Small Business and Small Disadvantaged Business Subcontracting 
Reporting, in solicitations and contracts containing the clause at (FAR) 
48 CFR 52.219-9.

[[Page 574]]



  Subpart 1219.10_Small Business Competitiveness Demonstration Program



1219.1005  Applicability.

    (b) Targeted industry categories. DOT's targeted industry categories 
are shown in appendix A.



1219.1006  Procedures.

    (c) Emerging small business set-aside. The Office of Federal 
Procurement Policy published a notice in the Federal Register, dated 
September 13, 1991, that increased the emerging small business reserve 
amount for Architect-Engineer (A-E) services from $25,000 to $50,000. 
Therefore, A-E services below $50,000 are reserved for emerging small 
businesses, if the conditions of (FAR) 48 CFR 19.1006(c)(1) are met.

               Appendix A to Subpart 1219.10 of Part 1219

------------------------------------------------------------------------
                                              FPDS product and service
     Targeted industry categories \1\                   code
------------------------------------------------------------------------
(1) Engineering Development...............  AT94
(2) Systems Engineering Services (Only)...  R414
(3) Radio/TV Communication Equipment        5820
 (except airborne).
(4) Maintenance, Repair, and Rebuilding of  J028/J010
 engines, turbines, components and weapons
 equipment.
(5) ADP Central Processing Units:
  Analog..................................  7020
  Digital.................................  7021
  Hybrid..................................  7022
(6) ADP Support Equipment.................  7035
(7) ADP Components........................  7050
(8) ADP Development Services and ADP        D302/D305
 Teleprocessing and Timesharing Services.
(9) Gas Turbines and Jet Engines,           2840
 Aircraft; and Components.
(10) Radar Equipment (except airborne) and  5840/AT31
 Navigation and Navigational Aids (basic
 research).
------------------------------------------------------------------------
\1\ The industry categories were derived from Federal Procurement Data
  System Product and Service Codes Manual.


[59 FR 40278, Aug. 8, 1994. Redesignated and amended at 61 FR 50250, 
Sept. 25, 1996]



PART 1220_LABOR SURPLUS AREA CONTRACTING--Table of Contents




                       Subpart 1220.90_Local Hire

Sec.
1220.9000 Policy. (USCG)
1220.9001 Solicitation provision and contract clause. (USCG)

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



                       Subpart 1220.90_Local Hire



1220.9000  Policy. (USCG)

    Pub. L. 101-225, Coast Guard Authorization Act of 1989, Section 206, 
added Section 666 to Title 14 of the United States Code, which requires 
the U.S. Coast Guard to include a provision for local hire in each 
contract for construction or services to be performed in whole or in 
part in a State that has an unemployment rate in excess of the national 
average rate of unemployment (as determined by the Secretary of Labor). 
The Secretary of Transportation may waive this requirement in the 
interest of national security or economic efficiency.

[59 FR 40278, Aug. 8, 1994]



1220.9001  Solicitation provision and contract clause. (USCG)

    The contracting officer shall insert the USCG clause at (TAR) 48 CFR 
1252.220-90, Local Hire Provision, in all solicitations and contracts as 
required by (TAR) 48 CFR 1220.9000.

[59 FR 40278, Aug. 8, 1994]



PART 1222_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
--Table of Contents




                   Subpart 1222.1_Basic Labor Policies

Sec.
1222.101 Labor relations.
1222.101-70 Admittance of union representatives to DOT installations.
1222.101-71 Contract clauses.

   Subpart 1222.4_Labor Standards for Contracts Involving Construction

1222.406 Administration and enforcement.
1222.406-9 Withholding from or suspension of contract payments.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40279, Aug. 8, 1994, unless otherwise noted.

[[Page 575]]



                   Subpart 1222.1_Basic Labor Policies



1222.101  Labor relations.



1222.101-70  Admittance of union representatives to DOT installations.

    (a) It is the policy of DOT to admit labor union representatives of 
contractor employees to DOT installations to visit work sites and 
transact labor union business with contractors, their employees, or 
union stewards pursuant to existing union collective bargaining 
agreements. Their presence shall not interfere with the contractor's 
work progress under a DOT contract nor violate the safety or security 
regulations that may be applicable to persons visiting the installation. 
The union representatives will not be permitted to conduct meetings, 
collect union dues, or make speeches concerning union matters while 
visiting a work site.
    (b) Whenever a union representative is denied entry to a work site, 
the person denying entry shall make a written report to the DOT labor 
coordinator (i.e., Director, Office of Economics (P-35), Office of the 
Secretary) or OA labor advisor, if any, within two working days after 
the request for entry is denied. The report shall include the reason(s) 
for the denial, the name of the representative denied entry, the union 
affiliation and number, and the name and title of the person that denied 
the entry.



1222.101-71  Contract clauses.

    (a) The contracting officer, may, when applicable, insert the clause 
at (TAR) 48 CFR 1252.222-70, Strikes or Picketing Affecting Timely 
Completion of the Contract Work, in solicitations and contracts.
    (b) The contracting officer may, when applicable, insert the clause 
at (TAR) 48 CFR 1252.222-71, Strikes or Picketing Affecting Access to a 
DOT Facility, in solicitations and contracts.



   Subpart 1222.4_Labor Standards for Contracts Involving Construction



1222.406  Administration and enforcement.



1222.406-9  Withholding from or suspension of contract payments.

    (c) Disposition of contract payments withheld or suspended. (1) 
Forwarding wage underpayments to the Comptroller General. The 
contracting officer shall ensure that a completed Form DOT F 4220.7, 
Employee Claim for Wage Restitution, is obtained from each employee 
claiming restitution under the contract. The Comptroller General (Claims 
Division) must receive this form with a completed SF 1093, Schedule of 
Withholding Under the Davis-Bacon Act and/or the Contract Work Hours and 
Safety Standards Act, before payment can be made to the employee.



PART 1223_ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-FREE 
WORKPLACE--Table of Contents




  Subpart 1223.3_Hazardous Material Identification and Material Safety 
                                  Data

Sec.
1223.303 Contract clause.

     Subpart 1223.70_Safety Requirements for Selected DOT Contracts

1223.7000 Contract clauses.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



  Subpart 1223.3_Hazardous Material Identification and Material Safety 
                                  Data



1223.303  Contract clause.

    The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.223-70, Removal or Disposal of Hazardous Substances--Applicable 
Licenses and Permits, in solicitations and contracts involving the 
removal or disposal of hazardous waste material.

[59 FR 40279, Aug. 8, 1994]

[[Page 576]]



     Subpart 1223.70_Safety Requirements for Selected DOT Contracts



1223.7000  Contract clauses.

    (a) Where all or part of a contract will be performed on Government-
owned or leased property, the contracting officer shall insert the 
clause at (TAR) 48 CFR 1252.223-71, Accident and Fire Reporting.
    (b) For all solicitations and contracts under which human test 
subjects will be utilized, the contracting officer shall insert the 
clause at (TAR) 48 CFR 1252.223-72, Protection of Human Subjects. Copies 
of NHTSA Orders 700-1, 700-3 and 700-4 may be obtained in writing from 
NHTSA, Office of Administrative Operations, Distribution Services, NAD-
51, 400 Seventh Street SW., Washington, DC 20590.

[59 FR 40279, Aug. 8, 1994]



PART 1224_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION
--Table of Contents




             Subpart 1224.1_Protection of Individual Privacy

Sec.
1224.102-70 Applicability.
1224.103 Procedures.

                Subpart 1224.2_Freedom of Information Act

1224.203 Policy.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40279, Aug. 8, 1994, unless otherwise noted.



             Subpart 1224.1_Protection of Individual Privacy



1224.102-70  Applicability.

    (a) Illustrations of systems of records to which the Privacy Act 
applies and which shall not be released irrespective of whether the 
Government or a contractor acting on behalf of the Government is 
maintaining the records include the following:
    (1) Personnel, payroll and background records personal to any 
officer or employee of DOT, or other person, including his or her 
residential address;
    (2) Medical histories and medical records concerning individuals, 
including applicants for licenses; and
    (3) Any other detailed record containing information identifiable 
with a particular person.
    (b) Illustrations of systems of records to which the Privacy Act 
does not apply include:
    (1) Records that are maintained by a contractor on individuals 
employed by the contractor in the process of providing goods and 
services to the Federal government; and
    (2) The records generated, when contracting with an educational 
institution, on contract students pursuant to their attendance (e.g., 
admission forms, grade reports), provided that they are similar to those 
maintained under contracts with educational institutions to provide 
training, generated on students working under the contract relative to 
their attendance (e.g., admission forms, grade reports), similar to 
those maintained on other students and are commingled with records of 
other students.



1224.103  Procedures.

    DOT's rules and regulations implementing the Privacy Act of 1974 are 
located at 49 CFR part 10.

[61 FR 50250, Sept. 25, 1996]



                Subpart 1224.2_Freedom of Information Act



1224.203  Policy.

    DOT rules and regulations implementing the Freedom of Information 
Act (FOIA) and the names and addresses of the OA FOIA offices are 
located in 49 CFR part 7. Specific contract award information shall be 
requested from the FOIA office of the OA making the contract award.

[59 FR 40279, Aug. 8, 1994. Redesignated at 62 FR 67751, Dec. 30, 1997]

                          PART 1225 [RESERVED]

[[Page 577]]



PART 1227_PATENTS, DATA, AND COPYRIGHTS--Table of Contents




Sec.

         Subpart 1227.3_Patent Rights Under Government Contracts

1227.305 Administration of patent rights clauses.
1227.305-4 Conveyance of invention rights acquired by the Government.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



         Subpart 1227.3_Patent Rights Under Government Contracts



1227.305  Administration of patent rights clauses.



1227.305-4  Conveyance of invention rights acquired by the Government.

    The contracting officer shall ensure that solicitations and 
contracts which include a patent rights clause include a means for the 
contractor to report inventions made in the course of contract 
performance and at contract completion. This requirement may be 
fulfilled by requiring the contractor to submit a DD Form 882, Report of 
Inventions and Subcontracts.

[59 FR 40281, Aug. 8, 1994]



PART 1228_BONDS AND INSURANCE--Table of Contents




                          Subpart 1228.1_Bonds

Sec.
1228.106 Administration.
1228.106-1 Bonds and bond-related forms.
1228.106-6 Furnishing of information.
1228.106-70 Execution and administration of bonds.
1228-106-490 Contract clause. (USCG)

                        Subpart 1228.3_Insurance

1228.306 Insurance under fixed-price contracts.
1228.306-70 Contracts for lease of aircraft.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40281, Aug. 8, 1994, unless otherwise noted.



                          Subpart 1228.1_Bonds



1228.106  Administration.



1228.106-1  Bonds and bond-related forms.

    (c) SF 25, Performance Bond, prescribed at (FAR) 48 CFR 28.106-1(c), 
must provide coverage for taxes imposed by the United States which are 
collected, deducted, or withheld from wages paid by the contractor. 
Forms other than the SF 25 (e.g., a commercial form) shall not be used 
by contractors when a performance bond is required.



1228.106-6  Furnishing of information.

    (b) The contracting officer shall, upon request, furnish the name 
and address of the prime contractor's surety or sureties to employees, 
suppliers, and subcontractors having a contractual or employment 
relationship with prime contractors, subcontractors or suppliers. When 
furnishing surety information, the inquirer may also be informed that:
    (1) Persons believing that they have legal remedies under the Miller 
Act are cautioned to consult their own legal advisor regarding the 
proper steps to take to obtain remedies.
    (2) On construction contracts exceeding $2,000, if the contracting 
officer is informed (through routine compliance checking, a complaint, 
or a request for information) that a laborer, mechanic, apprentice, 
trainee, watchman, or guard employed by the contractor or subcontractor 
at any tier may have been paid wages less than those required by the 
applicable labor standards provisions of the contract, the contracting 
officer shall promptly initiate an investigation in accordance with 
(FAR) 48 CFR subpart 22.4, irrespective of the employee's rights under 
the Miller Act. When an employee's request for information is involved, 
the contracting officer shall inform the inquirer that such 
investigation will be made. Such investigation is required pursuant to 
the provisions of the Davis-Bacon Act, Contract Work Hours and Safety 
Standards Act, and Copeland (Anti-Kickback) Act for assuring proper 
payment to such employees.

[[Page 578]]

    (c) When furnishing a copy of a payment bond and contract in 
accordance with (FAR) 48 CFR 28.106-6(c), the requirement for a copy of 
the contract may be satisfied by furnishing a machine-duplicate copy of 
the contractor's first pages which show the contract number and date, 
the contractor's name and signature, the contracting officer's 
signature, and the description of the contract work. The contracting 
officer furnishing the copies shall place the statement ``Certified to 
be a true and correct copy'' followed by his/her signature, title and 
name of the OA. The fee for furnishing the requested certified copies 
shall be determined in accordance with the DOT Freedom of Information 
Act regulation, 49 CFR part 7, ((TAR) 48 CFR 1224.202).



1228.106-70  Execution and administration of bonds.

    (a) The surety shall be notified, as soon as feasible, of the 
contractor's failure to perform in accordance with the terms of the 
contract.
    (b) When a partnership is a principal on a bond, the names of all 
the members of the firm shall be listed in the bond following the name 
of the firm, and the phrase ``a partnership composed of.'' If a 
principal is a corporation, the state of incorporation must also appear 
on the bond.
    (c) Performance or payment bond other than an annual bond shall not 
antedate the contract to which it pertains.
    (d) Bonds shall be filed with the original contract to which they 
apply, or all bonds shall be separately maintained and reviewed 
quarterly for validity. If separately maintained, each contract file 
shall cross-reference the applicable bonds.



1228.106-490  Contract clause. (USCG)

    The contracting officer shall insert the USCG clause at (TAR) 48 CFR 
1252.228-90, Notification of Miller Act Payment Bond Protection, in 
solicitations and contracts, and shall require its first-tier 
subcontractors to insert the clause in all of their subcontracts, when 
payment bonds are required.



                        Subpart 1228.3_Insurance



1228.306  Insurance under fixed-price contracts.



1228.306-70  Contracts for lease of aircraft.

    (a) The contracting officer shall insert the clauses at (TAR) 48 CFR 
1252.228-70 through 1252.228-72, unless otherwise indicated by the 
specific instructions for their use, in any contract for the lease of 
aircraft (including aircraft used in out-service flight training).
    (b) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.228-70, Loss of or Damage to Leased Aircraft, in any contract for 
the lease of aircraft, except in the following circumstances:
    (1) When the hourly rental rate does not exceed $250 and the total 
rental cost for any single transaction is not in excess of $2,500;
    (2) When the cost of hull insurance does not exceed 10 percent of 
the contract rate; or
    (3) When the lessor's insurer does not grant a credit for uninsured 
hours, thereby preventing the lessor from granting the same to the 
Government.
    (c) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.228-71, Fair Market Value of Aircraft, when fair market value of 
the aircraft can be determined.
    (d) Section 504 of the Federal Aviation Act of 1958, as amended, 
provides that no lessor of an aircraft under a bona fide lease of 30 
days or more shall be liable by reason of his interest as lessor or 
title-holder of the aircraft for any injury to or death of persons, or 
damage to or loss of property, unless such aircraft is in the actual 
possession or control of such person at the time of such injury, death, 
damage or loss. On short-term or intermittent-use leases, however, the 
owner may be liable for damage caused by operation of the aircraft. It 
is usual for the aircraft owner to retain insurance covering this 
liability during the term of such lease. Such insurance can, often for 
little or no increase in premium, be made to cover the Government's 
exposure to liability as well. In order to take advantage of

[[Page 579]]

this coverage, the Risks and Indemnities clause at (TAR) 48 CFR 
1252.228-72 prescribed in paragraph (d)(1) of this section shall be 
used.
    (1) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.228-72, Risk and Indemnities, in any contract for out-service 
flight training or for the lease of aircraft when the Government will 
have exclusive use of the aircraft for a period of less than thirty 
days.
    (2) Any contract for out-service flight training shall include a 
clause in the contract schedule stating substantially that the 
contractor's personnel shall at all times during the course of the 
training be in command of the aircraft, and that at no time shall other 
personnel be permitted to take command of the aircraft.



PART 1231_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




         Subpart 1231.2_Contracts With Commercial Organizations

Sec.
1231.205 Selected costs.
1231.205-32 Precontract costs.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



         Subpart 1231.2_Contracts With Commercial Organizations



1231.205  Selected costs.



1231.205-32  Precontract costs.

    (a) The decision to incur precontract costs is that of the 
contractor. No DOT employee can authorize, demand, or require a 
contractor to incur precontract costs. The contracting officer may 
advise the prospective contractor that any costs incurred before 
contract award are at the contractor's sole risk and that if 
negotiations fail to result in a binding contract, payment of these 
costs may not be made by the Government.
    (b) When the contracting officer determines that incurring 
precontract costs was necessary to meet the proposed contract delivery 
schedule of a cost-reimbursement contract, the clause at (TAR) 48 CFR 
1252.231-70, Date of Incurrence of Costs, may be inserted in the 
resultant contract.

[59 FR 40282, Aug. 8, 1994]



PART 1232_CONTRACT FINANCING--Table of Contents




                    Subpart 1232.70_Contract Payments

Sec.
1232.7002 Invoice and voucher review and approval.

Appendix A to Subpart 1232.70--Instructions for Completing the SF 1034
Appendix B to Subpart 1232.70--Instructions for Completing the SF 1035

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40282, Aug. 8, 1994, unless otherwise noted.



                    Subpart 1232.70_Contract Payments



1232.7002  Invoice and voucher review and approval.

    (a) Under fixed-price contracts, the contracting officer shall 
require the contractor to submit an invoice or voucher in order to 
receive payment under the contract. The invoice or voucher may be on a 
form or company letterhead as long as it meets the requirements of the 
Prompt Payment Act as implemented by OMB Circular A-125--Prompt Payment, 
(FAR) 48 CFR subpart 32.9, and the contract.
    (b) Under other than fixed-price contracts, the contracting office 
shall require the contractor to submit the SF 1034, Public Voucher for 
Purchases and Services Other Than Personal, and the SF 1035, Public 
Voucher for Purchases and Services Other Than Personal (Continuation 
Sheet), to request payments. The forms must be completed as required by 
Appendix A, Instructions for Completing the SF 1034, and Appendix B, 
Instructions for Completing the SF 1035.

[[Page 580]]

 Appendix A to Subpart 1232.70--Instructions for Completing the SF 1034

    The SF 1034, Public Voucher for Purchases and Services Other Than 
Personal, shall be completed in accordance with the below instructions. 
The lettered items correspond to the entries on the form.

------------------------------------------------------------------------
    Caption on the SF 1034          Data to be Inserted in the Block
------------------------------------------------------------------------
1. U.S. Department, Bureau,    Name and address of the contracting
 or establishment and           office which issued the contract.
 location.
2. Date voucher prepared.....  Date voucher submitted to the designated
                                billing office cited under the contract
                                or order.
3. Contract no. and date.....  Contract No. and, when applicable, the
                                Order No. and date as shown on the award
                                document.
4. Requisition no. and date..  Leave blank or fill-in in accordance with
                                the instructions in the contract.
5. Voucher no................  Start with ``1'' and number
                                consecutively. A separate series of
                                consecutive numbers must be used
                                beginning with ``1'' for each contract
                                number or order number (when
                                applicable). Note: Insert the word
                                ``FINAL'' if this is the last voucher.
6. Schedule No.; paid by;      Leave all these blocks blank.
 date invoice received;
 discount terms; payee's
 account no.; shipped from/
 to; weight; government B/L.
7. Payee's name and address..  Name and address of contractor as it
                                appears on the contract. If the contract
                                is assigned to a bank, also show
                                ``CONTRACT ASSIGNED'' below the name and
                                address of the contractor.
8. Number and date of order..  Leave blank. (See 3 above.)
9. Date of delivery or         The period for which the incurred costs
 service.                       are being claimed (e.g., month and year;
                                beginning and ending date of services,
                                etc.).
10. Articles or services.....  Insert the following: ``For detail, see
                                the total amount of the claim
                                transferred from the attached SF 1035,
                                page X of X.'' One space below this
                                line, insert the following: ``COST
                                REIMBURSABLE-PROVISIONAL PAYMENT.''
11. Quantity; unit price;      Leave blank.
 (cost; per).
12. Amount...................  Insert the total amount claimed from the
                                last page of the SF 1035.
Payee must NOT use the space   Do NOT write or type below this line.
 below..
------------------------------------------------------------------------

 Appendix B to Subpart 1232.70--Instructions for Completing the SF 1035

    The SF 1035, Public Voucher for Purchases and Services Other Than 
Personal (Continuation Sheet), shall be completed in accordance with the 
below instructions.
    1. Use the same basic instructions for the SF 1035 as used for the 
SF 1034. Ensure that the contract and, if applicable, order number, are 
shown on information required by the contract, contracting officer, or 
cognizant audit agency; however, if more than one sheet of SF 1035 is 
used, each sheet shall be in numerical sequence.
    2. The following items are generally entered below the line with 
Number and Date of Order; Date of Delivery or Service; Articles or 
Services; Quantity; Unit Price; and Amount (but do not necessarily tie 
to these captions).
    3. Description of data to be inserted as it applies to the contract 
or order number.
    a. Show, as applicable, the target or estimated costs, target or 
fixed-fee, and total contract value, as adjusted by any modifications to 
the contract or order. The FAR permits the contracting officer to 
withhold a percentage of fixed fee until a reserve is set aside in an 
amount that is considered necessary to protect the Government's 
interest.
    b. Show the following costs and supporting data (as applicable) to 
the contract or order:
    (1) Direct Labor. List each labor category, rate per labor hour, 
hours worked, and extended total labor dollars per labor category.
    (2) Premium Pay/Overtime. List each labor category, rate per labor 
hour, hours worked, and the extended total labor dollars per labor 
category. Note: Advance written authorization must be received from the 
contracting officer to work overtime or to pay premium rates; therefore, 
identify the contracting officer's written authorization to the 
contractor.
    (3) Fringe Benefits. If fringe benefits are included in the overhead 
pool, no entry is required. If the contract allows for a separate fringe 
benefit pool, cite the formula (rate and base) in effect during the time 
the costs were incurred. If the contract allows for billing fringe 
benefits as a direct expense, show the actual fringe benefit costs.
    (4) Materials, Supplies, Equipment. Show those items normally 
treated as direct costs. Expendable items need not be itemized and may 
be grouped into major classifications such as office supplies. However, 
items valued at $5,000 or more must be itemized. See (FAR) 48 CFR part 
45, Government Property, for reporting of property.
    (5) Travel. List the name and title of traveller, place of travel, 
and travel dates. If the

[[Page 581]]

travel claim is based on the actual costs expended, show the amount for 
the mode of travel (i.e., airline, private auto, taxi, etc.), lodging, 
meals, and other incidental expenses separately, on a daily basis. These 
actual costs must be supported with receipts to substantiate the costs 
paid. Travel costs for consultants must be shown separately and also 
supported.
    (6) Other Direct Costs. Itemize those costs that cannot be placed in 
categories (1) through (5) above. Categorize these costs to the extent 
possible.
    (7) Total Direct Costs. Cite the sum of categories (1) through (6) 
above.
    (8) Overhead. Cite the rate, base, and extended amount.
    (9) G&A Expense. Cite the rate, base, and extended amount.
    (10) Total Costs. Cite the sum of categories (7) through (9) above.
    (11) Fee. Cite the rate, base, and extended amount.
    (12) Total Cost and Fee Claimed. Enter this amount on the SF 1034.

                           Completion Voucher

    The completion (final) voucher is the last voucher to be submitted 
for incurred, allocable, and allowable costs expended to perform the 
contract or order. This voucher should include all contract reserves, 
allowable cost withholdings, balance of fixed fee, etc. However, the 
amount of the completion voucher when added to the total amount 
previously paid cannot exceed the total amount of the contract.



PART 1233_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                   Subpart 1233.2_Disputes and Appeals

Sec.
1233.211 Contracting officer's decision.
1233.214 Alternative dispute resolution.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



                   Subpart 1233.2_Disputes and Appeals



1233.211  Contracting officer's decision.

    For DOT contracts, the Board of Contract Appeals (BCA) referenced at 
(FAR) 48 CFR 33.211 is the Department of Transportation Board of 
Contract Appeals (S-20), 400 7th Street, S.W., Washington, DC, 20590. 
The DOTBCA Rules of Procedure are contained in 48 CFR chapter 63, part 
6301.

[59 FR 40283, Aug. 8, 1994]



1233.214  Alternative dispute resolution.

    (c) The Administrative Dispute Resolution Act (ADRA), Pub. L. 101-
552, authorizes and encourages agencies to use mediation, conciliation, 
arbitration, and other techniques for the prompt and informal resolution 
of disputes, and for other purposes. The DOTBCA Alternate Dispute 
Resolution (ADR) procedures are contained in 48 CFR chapter 63, section 
6302.30, ADR Methods (Rule 30), and will be distributed to the parties, 
if ADR procedures are used. These procedures may be obtained from the 
DOTBCA upon request. ADR procedures may be used when:
    (1) There is mutual consent by the parties to participate in the ADR 
process (with consent being obtained either before or after an issue in 
controversy has arisen);
    (2) Prior to the submission of a claim; and
    (3) In resolution of a formal claim.
    (d) DOT's Dispute Resolution Specialist in accordance with the ADRA 
is located in the DOT Office of the General Counsel, C-1. The Dispute 
Resolution Specialist performs the functions set forth in the 
Administrative Disputes Resolution Act for DOT operating administrations 
on a non-reimbursable basis. The Dispute Resolution Specialist may 
conduct any of the alternative means of dispute resolution set forth in 
Title 5, U.S.C. Section 581(3), including settlement negotiations under 
the auspices of a settlement judge, conciliation, facilitation, 
mediation, fact finding, mini-trials, and arbitration, or any 
combination of these methods.

[59 FR 40283, Aug. 8, 1994, as amended at 61 FR 50250, Sept. 25, 1996]



PART 1234_MAJOR SYSTEM ACQUISITION--Table of Contents




    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



1234.003  Responsibilities.

    DOT's internal procedures for implementing OMB Circular A-109, Major 
System Acquisitions, is contained in Chapter 1234, Appendix A, of the 
Transportation Acquisition Manual (which is

[[Page 582]]

stocked at the Government Printing Office).

[59 FR 40283, Aug. 8, 1994]



PART 1235_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents




    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.



1235.003  Policy.

    (b) Cost sharing. DOT cost sharing policies shall be in accordance 
with (FAR) 48 CFR 16.303, (FAR) 48 CFR 42.707(a), and OA procedures.

[59 FR 40284, Aug. 8, 1994]



PART 1236_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




    Subpart 1236.3_Special Aspects of Sealed Bidding in Construction 
                               Contracting

Sec.
1236.305 Preconstruction conference.

                     Subpart 1236.5_Contract Clauses

1236.570 Special precautions for work at operating airports.

               Subpart 1236.6_Architect-Engineer Services

1236.602 Selection of firms for architect-engineer contracts.
1236.602-1 Selection criteria.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40284, Aug. 8, 1994, unless otherwise noted.



    Subpart 1236.3_Special Aspects of Sealed Bidding in Construction 
                               Contracting



1236.305  Preconstruction conference.

    When the contracting officer considers such action warranted, he/she 
shall arrange a preconstruction conference with the contractor and such 
subcontractors as the contractor may designate to assure that there is a 
clear understanding of the contract requirements (including labor 
standards provisions) and the rights and obligations of the parties.



                     Subpart 1236.5_Contract Clauses



1236.570  Special precautions for work at operating airports.

    Where any acquisition will require work at an operating airport, 
insert the clause at (TAR) 48 CFR 1252.236-70, Special Precautions for 
Work at Operating Airports, in solicitations and contracts.



               Subpart 1236.6_Architect-Engineer Services



1236.602  Selection of firms for architect-engineer contracts.



1236.602-1  Selection criteria.

    (b) If a design competition is to be used, written approval by the 
COCO shall be obtained prior to soliciting proposals.

[59 FR 40284, Aug. 8, 1994, as amended at 62 FR 67751, Dec. 30, 1997]



PART 1237_SERVICE CONTRACTING--Table of Contents




                Subpart 1237.1_Service Contracts_General

Sec.
1237.104 Personal services contracts. (USCG)
1237.104-90 Delegation of authority. (USCG)
1237.104-91 Personal services contracts with individuals under the 
          authority of 10 U.S.C. 1091 (USCG).
1237.110 Solicitation provisions and contract clauses.

 Subpart 1237.70_Department of Transportation Procedures for Acquiring 
                            Training Services

1237.7000 Policy.
1237.7001 Certification of data.
1237.7002 Applicability.
1237.7003 Solicitation provision and contract clause.

                    Subpart 1237.90_Mortuary Services

1237.9000 Solicitation provisions and contract clauses. (USCG)

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

[[Page 583]]



                Subpart 1237.1_Service Contracts_General



1237.104  Personal services contracts. (USCG)



1237.104-90  Delegation of authority. (USCG)

    (a) Section 733(a) of Pub. L. 104-106, the DOD Authorization Act of 
1996, amended Title 10 of the United States Code to include a new 
provision which authorizes the Secretary, with respect to the Coast 
Guard, to enter into personal services contracts at medical treatment 
facilities (10 U.S.C. 1091).
    (b) The authority of the Secretary of Transportation under Pub. L. 
104-106 to award personal services contracts for medical services at 
facilities for the Coast Guard is delegated to the HCA with the 
authority to redelegate to contracting officers under procedures 
established by the HCA, who will address applicable statutory 
limitations under section 1091A of Title 10 U.S.C.

[64 FR 2438, Jan. 14, 1999]



1237.104-91  Personal services contracts with individuals under the 
authority of 10 U.S.C. 1091. (USCG)

    (a) Personal services contracts for health care services are 
authorized by 10 U.S.C. 1091 for the Coast Guard. Sources for contracts 
for health care services under the authority of 10 U.S.C. 1091 shall be 
selected through procedures established 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 (TAR) 48 CFR part 1206 competition 
requirements (see (TAR) 48 CFR part 1206.9000 (USCG)) and from (FAR) 48 
CFR part 6 competition requirements.
    (b) The contracting officer must provide adequate advance notice of 
contracting opportunities to individuals residing in the area of the 
facility. The notice should include the qualification criteria against 
which individuals responding shall be evaluated. Contracting officers 
shall solicit offerors through the most effective means of seeking 
competition, such as a local publication which serves the area of the 
facility. Acquisitions for health care services using personal services 
contracts are exempt from posting and synopsis requirements of (FAR) 48 
CFR part 5.
    (c) The contracting officer shall provide the qualifications of 
individuals responding to the notice to the representative(s) 
responsible for evaluation and ranking in accordance with the evaluation 
procedures. Individuals must be considered solely on the professional 
qualifications established for the particular health care services being 
acquired and the Government's estimate of reasonable rates, fees, or 
costs. The representative(s) responsible for the evaluation and ranking 
shall provide the contracting officer with rationale for the ranking of 
the individuals consistent with the required qualifications.
    (d) Upon receipt of the ranked listing of offerors, the contracting 
officer shall either:
    (1) Enter into negotiations with the highest ranked offeror. If a 
mutually satisfactory contract cannot be negotiated, the contracting 
officer shall terminate negotiations with the highest ranked offeror and 
enter into negotiations with the next highest, or;
    (2) Enter into negotiations with all qualified offerors and select 
on the basis of qualifications and rates, fees, or other costs.
    (e) 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.
    (f) 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.
    (g) The total amount paid to an individual in any year for health 
care services under a personal services contract shall not exceed the 
paycap in COMDTINST M4200.19 (series), Coast Guard Acquisition 
Procedures.
    (h) The contract may provide for the same per diem and travel 
expenses authorized for a Government employee,

[[Page 584]]

including actual transportation and per diem in lieu of subsistence for 
travel between home or place of business and official duty station and 
only for travel outside the local area in support of the statement of 
work.
    (i) Coordinate benefits, taxes and maintenance of records with the 
appropriate office(s).
    (j) The contracting officer shall insure that contract funds are 
sufficient to cover all contingency items that may be cited in the 
statement of work for health care services.

[64 FR 2438, Jan. 14, 1999]



1237.110  Solicitation provisions and contract clauses.

    Contracting officers shall insert the clause at (TAR) 48 CFR 
1252.237-70, Qualifications of Employees, in all solicitations and 
contracts for services which require contract performance at a 
Government facility.

[59 FR 40284, Aug. 8, 1994]



 Subpart 1237.70_Department of Transportation Procedures for Acquiring 
                            Training Services

    Source: 61 FR 392, Jan. 5, 1996, unless otherwise noted.



1237.7000  Policy.

    When training services are provided under contract to DOT, it is the 
policy of DOT that all prospective contractors:
    (a) Certify that the data provided concerning company 
qualifications, background statements, etc., is current, accurate, and 
complete; and
    (b) Agree to not solicit or advertise private, non-Government 
training while conducting a training course.



1237.7001  Certification of data.

    Towards fulfilling DOT's policy at (TAR) 48 CFR 1237.7000(a), 
contracting officers shall request information from prospective 
contractors for certification purposes. The type of information 
requested is dependent upon the criticality of the service and/or any 
unique or essential qualification requirements.



1237.7002  Applicability.

    The policy at (TAR) 48 CFR 1237.7000 applies to all DOT contracts as 
defined in FAR 2.101 for training services when DOT controls the content 
and/or presentation of the course. This policy does not apply to courses 
attended by DOT employees which are offered and sponsored by Government 
sources of supply, educational institutions, or private entities where 
DOT does not control the course content or presentation. (See (TAR) 48 
CFR 1213.7100 for examples.)



1237.7003  Solicitation provision and contract clause.

    (a) The contracting officer shall insert the provision at (TAR) 48 
CFR 1252.237-71, Certification of Data, in solicitations and the clause 
at (TAR) 48 CFR 1252.237-72, Prohibition on Advertising, in 
solicitations and contracts for training services when the content and/
or presentation of the course is controlled by DOT.
    (b) Contracting officers shall incorporate the successful offeror's 
certified data into any resultant contract(s). Certified data may be 
incorporated by reference, if the contracting officer determines it 
contains sufficient descriptive information (i.e., dated material such 
as resumes, company and/or personnel qualifications) to reliably 
describe the certified data submitted.



                    Subpart 1237.90_Mortuary Services



1237.9000  Solicitation provisions and contract clauses. (USCG)

    (a) The contracting officer shall insert the following clauses in 
solicitations and contracts for mortuary services. However, USCG clauses 
(TAR) 48 CFR 1252.237-91 and 1252.237-97 shall not be inserted in 
solicitations and contracts that include port of entry requirements:
    (1) (TAR) 48 CFR 1252.237-90, Requirements;
    (2) (TAR) 48 CFR 1252.237-91, Area of Performance;
    (3) (TAR) 48 CFR 1252.237-92, Performance and Delivery;
    (4) (TAR) 48 CFR 1252.237-93, Subcontracting;

[[Page 585]]

    (5) (TAR) 48 CFR 1252.237-94, Termination for Default;
    (6) (TAR) 48 CFR 1252.237-95, Group Interment;
    (7) (TAR) 48 CFR 1252.237-96, Permits;
    (8) (TAR) 48 CFR 1252.237-97, Facility Requirements; and
    (9) (TAR) 48 CFR 1252.237-98, Preparation History.
    (b) The contracting officer shall insert USCG provision (TAR) 48 CFR 
1252.237-99, Award to Single Offeror, in all sealed bid solicitations 
for mortuary services. Use the basic provision with Alternate I in 
negotiated solicitations for mortuary services.
    (c) The contracting officer shall insert (FAR) 48 CFR 52.245-4, 
Government-Furnished Property (Short Form) in solicitations and 
contracts that include port of entry requirements.

[64 FR 2438, Jan. 14, 1999]



PART 1242_CONTRACT ADMINISTRATION--Table of Contents




          Subpart 1242.2_Assignment of Contract Administration

Sec.
1242.203 Retention of contract administration.
1242.203-70 Contract clauses.
1242.205 Designation of the paying office.

         Subpart 1242.3_Contract Administration Office Functions

1242.302 Contract administration functions.

     Subpart 1242.70_Contracting Officer's Technical Representative

1242.7000 Contract clause.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40285, Aug. 8, 1994, unless otherwise noted.



          Subpart 1242.2_Assignment of Contract Administration



1242.203  Retention of contract administration.

    (a) Contracting offices may obtain contract administration 
assistance from the Defense Logistics Agency (DLA), Defense Contract 
Management Command, Alexandria, VA, when the contracting officer 
determines that such action is to be in the best interest of DOT.



1242.203-70  Contract clauses.

    (a) The contracting officer may use the clause at (TAR) 48 CFR 
1252.242-70, Dissemination of Information--Educational Institutions, in 
lieu of the clause at (TAR) 48 CFR 1252.242-72, Dissemination of 
Contract Information, in DOT research contracts with educational 
institutions, except contracts that require the release or coordination 
of information.
    (b) The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.242-71, Contractor Testimony, in all solicitations and contracts 
issued by NHTSA. Other OAs may use the clause as deemed appropriate.
    (c) The contracting officer may insert the clause at (TAR) 48 CFR 
1252.242-72, Dissemination of Contract Information, in all DOT contracts 
except contracts that require the release or coordination of 
information.



1242.205  Designation of the paying office.

    (a) The assignment of contract administration to a DLA Contract 
Administration Office (CAO) by the contracting officer does not affect 
the designation of the paying office unless a transfer of DOT funds to 
the agency of the CAO is effected, and the funds are converted to the 
agency's account for payment purposes.
    (b) When the contracting officer proposes to delegate the contract 
payment function to another agency (e.g., DLA), the contracting officer 
shall discuss the transfer of funds procedures with the OA cognizant 
payment office.



         Subpart 1242.3_Contract Administration Office Functions



1242.302  Contract administration functions.

    (a)(13) The CAO, or the contracting officer's designee under fixed 
price contracts, shall review and approve the contractor's invoice for 
payment. The CAO shall review and approve contractors' vouchers under 
cost-reimbursement contracts, and this function cannot be delegated to a 
COTR. All payments to contractors will be made by

[[Page 586]]

the payment office designated in the contract to make payments.



     Subpart 1242.70_Contracting Officer's Technical Representative



1242.7000  Contract clause.

    The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.242-73, Contracting Officer's Technical Representative, in 
solicitations and contracts when it is intended that a representative 
will be assigned to the contract to perform functions of a technical 
nature.



PART 1245_GOVERNMENT PROPERTY--Table of Contents




 Subpart 1245.5_Management of Government Property in the Possession of 
                               Contractors

Sec.
1245.505 Records and reports of Government property.
1245.505-14 Reports of Government property.
1245.505-70 Solicitation provisions and contract clauses.
1245.508-2 Reporting results of inventories.
1245.508-3 Quantitative and monetary control.
1245.511 Audit of property control system.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40285, Aug. 8, 1994, unless otherwise noted.



 Subpart 1245.5_Management of Government Property in the Possession of 
                               Contractors



1245.505  Records and reports of Government property.



1245.505-14  Reports of Government property.

    When Government property is furnished to or acquired by the 
contractor to perform the contract, the contract shall require the 
contractor to submit annual reports (see (FAR) 48 CFR 45.505-14) to the 
contracting officer not later than September 15 of each year. The 
contractor's report shall be submitted on Form DOT F 4220.43, Contractor 
Report of Government Property.



1245.505-70  Solicitation provisions and contract clauses.

    Contracting officers shall insert the clause at (TAR) 48 CFR 
1252.245-70 in solicitations and contracts when the contract will 
require Government provided or contractor acquired property.



1245.508-2  Reporting results of inventories.

    The inventory report shall also include the following:
    (a) Name and title of the individual(s) that performed the physical 
inventory;
    (b) An itemized, categorized listing of all property capitalized:
    (1) Land and rights therein;
    (2) Other real property;
    (3) Plant equipment;
    (4) Special test equipment; and
    (5) Special tooling;
    (c) An itemized listing of the property lost, damaged, destroyed, or 
stolen, the circumstances surrounding each incident, and the resolution 
of the incident; and
    (d) Any discrepancies between the physical inventory and the 
contractor's record of Government property.



1245.508-3  Quantitative and monetary control.

    Contracting officers shall require the contractor to provide the 
quantity and unit cost of each item of Government property reported 
under (TAR) 48 CFR 1245.508-2(b) and (c).



1245.511  Audit of property control system.

    (a) The property administrator (or other Government official 
authorized by the contracting officer) shall audit the contractor's 
property control system whenever there are indications that the 
contractor's property control system may be deficient. Examples of 
deficiencies are:
    (1) Failure of the contractor to acknowledge receipt of GFP;
    (2) Failure of the contractor to submit the annual property reports 
required by (TAR) 48 CFR 1245.505-14;
    (3) Failure of the contractor to reconcile its physical inventory 
with its property control record; or
    (4) Failure of the contractor to submit a Government property 
listing

[[Page 587]]

when requested by the property administrator.
    (b) When it is determined that the contractor's property control 
system is deficient, the property administrator, in coordination with 
the contracting officer, shall discuss the deficiencies with the 
contractor. If the contractor does not take action to correct the 
deficiencies, the contracting officer shall provide the contractor with 
a written notice of the deficiencies and the date all deficiencies must 
be corrected.



PART 1246_QUALITY ASSURANCE--Table of Contents




                        Subpart 1246.7_Warranties

Sec.
1246.701 Definitions.
1246.701-70 Additional definitions.
1246.701-90 Additional USCG definitions. (USCG)
1246.703 Criteria for use of warranties.
1246.705 Limitations.
1246.706 Warranty terms and conditions.
1246.790 Use of warranties in major systems acquisitions by the USCG. 
          (USCG)
1246.790-1 Policy. (USCG)
1246.790-2 Tailoring warranty terms and conditions. (USCG)
1246.790-3 Warranties on Government-furnished property. (USCG)
1246.791 Cost benefit analysis. (USCG)
1246.792 Waiver and notification procedures. (USCG)

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40286, Aug. 8, 1994, unless otherwise noted.



                        Subpart 1246.7_Warranties



1246.701  Definitions.



1246.701-70  Additional definitions.

    At no additional cost to the Government means at no increase in 
price for firm-fixed-price contracts, at no increase in target or 
ceiling price for fixed price incentive contracts (see (FAR) 48 CFR 
46.707), or at no increase in estimated cost or fee for cost-
reimbursement contracts.
    Defect means any condition or characteristic in any supplies or 
services furnished by the contractor under the contract that is not in 
compliance with the requirements of the contract.
    Design and manufacturing requirements means structural and 
engineering plans and manufacturing particulars, including precise 
measurements, tolerances, materials and finished product tests for the 
major system being produced.
    Major system means a system or major subsystem used directly by DOT 
to carry out its mission(s), as defined by TAM Chapter 1234, Major 
Acquisition Policies and Procedures (for dollar threshold applicable to 
U.S. Coast Guard, See Coast Guard guidance at (TAR) 48 CFR 1246.701-90). 
The term does not include:
    (a) Related support equipment, such as ground-handling equipment, 
training devices and accessories thereto, unless a cost effective 
warranty for the system would require inclusion of such items; or
    (b) Commercial items sold in substantial quantities to the general 
public as described in (FAR) 48 CFR 15.804-1..
    Performance requirements means the operating capabilities, 
maintenance, and reliability characteristics of a system that are 
determined to be necessary for it to fulfill the requirement for which 
the system is designed.

[59 FR 40286, Aug. 8, 1994, as amended at 62 FR 26420, May 14, 1997]



1246.701-90  Additional USCG definitions. (USCG)

    For the USCG, in accordance with Public Law 99-190, the dollar 
threshold as it pertains to the inclusion of a warranty in major systems 
acquisitions is $10 million.



1246.703  Criteria for use of warranties.

    (a) Major systems. The use of warranties in the procurement of major 
systems by the USCG is mandatory, unless waived (see USCG guidance at 
(TAR) 48 CFR 1246.792). Other OAs may use the procedures in USCG 
guidance in this part as a guideline for major systems acquisitions.
    (b) Other systems. (1) Acquisition of warranties in the procurement 
of supplies that do not meet the definition of a major system (e.g., 
spare, repair, or replenishment parts) is governed by (FAR) 48 CFR 
46.703.
    (2) Contracting officers should negotiate a warranty that meets or 
exceeds

[[Page 588]]

the requirements of (TAR) 48 CFR 1246.706 when it is advantageous.



1246.705  Limitations.

    (a) The following restrictions are applicable to DOT contracts:
    (1) The USCG is the only DOT OA which is required to include a 
warranty in cost reimbursement contracts for the production of major 
systems acquisitions.
    (2) Any warranty on major system acquisitions shall not apply in the 
case of any system or component thereof which has been furnished by the 
Government to a contractor except as indicated in the USCG guidance at 
(TAR) 48 CFR 1246.790-3.
    (3) Any warranty obtained shall specifically exclude coverage of 
damage in time of war or national emergency.

[59 FR 40286, Aug. 8, 1994, as amended at 62 FR 67752, Dec. 30, 1997]



1246.706  Warranty terms and conditions.

    (a) The contracting officer, in developing the warranty terms and 
conditions, shall consider the following, and, where appropriate and 
cost beneficial, shall:
    (1) Identify the affected line item(s) and the applicable 
specification(s);
    (2) Require that the line item's design and manufacture will conform 
to: (i) an identified revision of a top-level drawing; and/or (ii) an 
identified specification or revision thereof;
    (3) Require that the system conform to the specified Government 
performance requirements;
    (4) Require that all systems and components delivered under the 
contract will be free from defects in materials and workmanship;
    (5) State that in the event of failure due to nonconformance with 
specification and/or defects in material and workmanship, the contractor 
will bear the cost of all work necessary to achieve the specified 
performance requirements, including repair and/or replacement of all 
parts;
    (6) Require the timely replacement/repair of warranted items and 
specify lead times for replacement/repair where possible;
    (7) Identify the specific paragraphs containing Government 
performance requirements which must be met;
    (8) Ensure that any performance requirements identified as goals or 
objectives in excess of specification requirements are excluded from the 
warranty provision;
    (9) Define what constitutes the start of the warranty period (e.g., 
delivery, acceptance, in-service date), the ending of the warranty 
(e.g., passing a test or demonstration, or operation without failure for 
a specified time period), and circumstances requiring an extension of 
warranty duration (e.g., extending the warranty period as a result of 
mass defect correction during warranty period);
    (10) Identify what transportation costs will be paid by the 
contractor in conjunction with warranty coverage;
    (11) Identify any conditions which will not be covered by the 
warranty, other than the exclusion of combat damage; and
    (12) Identify any limitation on the total dollar amount of the 
contractor's warranty exposure, or agreement to share costs after a 
certain dollar threshold to avoid unnecessary warranty returns.
    (b) Any contract that contains a warranty clause must contain 
warranty implementation procedures, including warranty notification 
content and procedures, and identify the individuals responsible for 
implementation of warranty provisions. The contract may also permit the 
contractor's participation in investigation of system failures, 
providing that the contractor is reimbursed at established rates for 
fault isolation work, and that the Government receive credit for any 
payments where equipment failure is covered by warranty provisions.



1246.790  Use of warranties in major systems acquisitions by the USCG. (USCG)

    This subpart sets forth the policy for the USCG to use in obtaining 
warranties from contractors when contracting for the acquisition of a 
major system.

[[Page 589]]



1246.790-1  Policy. (USCG)

    The USCG shall include a warranty in all contracts for major systems 
acquisitions. When drafting warranty provisions/clauses for major 
systems acquisitions, the contracting officer shall ensure that the 
items listed at (TAR) 48 CFR 1246.706 have been considered. The warranty 
shall also meet the following requirements:
    (a) For systems or components which are commercially available, such 
warranty as is normally provided by the manufacturer or supplier shall 
be obtained in accordance with (FAR) 48 CFR 46.703(d) and (FAR) 48 CFR 
46.710(b)(2).
    (b) For systems or components provided in accordance with either 
design and manufacturing or performance requirements as specified in the 
contract or any modification to that contract, a warranty of compliance 
with the stated requirements shall be obtained.
    (c) The warranty provided under paragraph (b) of this section shall 
provide that in the event the major system or any component thereof 
fails to meet the terms of the warranty provided, the contracting 
officer may:
    (1) Require the contractor to promptly take such corrective action 
as the contracting officer determines to be necessary at no additional 
cost to the Government, including repairing or replacing all parts 
necessary to achieve the requirements set forth in the contract;
    (2) Require the contractor to pay costs reasonably incurred by the 
United States in taking necessary corrective action; or
    (3) Equitably reduce the contract price.
    (d) Any warranty shall specifically exclude coverage of combat 
damage.



1246.790-2  Tailoring warranty terms and conditions. (USCG)

    (a) As the objectives and circumstances vary considerably among 
major systems acquisition programs, contracting officers shall 
appropriately tailor the warranty on a case-by-case basis, including 
remedies, exclusions, limitations and durations, provided the tailoring 
is consistent with the specific requirements of this subpart and (FAR) 
48 CFR 46.706.
    (b) Contracting officers of major systems acquisitions may exclude 
from the terms of the warranty certain defects for specified supplies 
(exclusions) and may limit the contractor's liability under the terms of 
the warranty (limitations), as appropriate, if necessary to derive a 
cost-effective warranty in light of the technical risk, contractor 
financial risk, or other program uncertainties.
    (c) Contracting officers are encouraged to structure a broader and 
more comprehensive warranty where such is advantageous. Likewise, the 
contracting officer may narrow the scope of a warranty when appropriate 
(e.g., where it would be inequitable to require a warranty of all 
performance requirements because a contractor had not designed the 
system).
    (d) Contracting officers shall not include in a warranty clause any 
terms that require the contractor to incur liability for loss, damage, 
or injury to third parties.



1246.790-3  Warranties on Government-furnished property. (USCG)

    A contractor for a major systems acquisition shall not be required 
to provide the warranties specified in (TAR) 48 CFR 1246.790-1 on any 
property furnished to that contractor by the Government except for:
    (a) Defects in installation; and
    (b) Installation or modification in such a manner that invalidates a 
warranty provided by the manufacturer of the property.



1246.791  Cost benefit analysis. (USCG)

    Warranties shall be obtained for a major systems acquisition only 
when it is cost beneficial in accordance with TAM (Copies of the 
Transportation Acquisition Manual may be obtained from the Government 
Printing Office) 1246.703. If a specific warranty is considered not to 
be cost beneficial by the contracting officer, a waiver request shall be 
initiated in accordance with USCG guidance at 48 CFR 1246.792.



1246.792  Waiver and notification procedures. (USCG)

    (a) The Secretary of Transportation, without delegation, may waive 
the requirement for a warranty for USCG

[[Page 590]]

major system acquisitions when the waiver is in the interest of national 
defense or if the warranty obtained would not be cost beneficial. A 
waiver may be granted provided that the Committees on Appropriations of 
the Senate and the House of Representatives, the Committee on Commerce, 
Science and Transportation of the Senate, and the Committee on Merchant 
Marine and Fisheries of the House of Representatives are notified, in 
writing, of the Secretary's intention to waive the warranty requirements 
and the reasons supporting such a determination prior to granting the 
waiver. The request for Secretarial waiver shall include, at a minimum:
    (1) A brief description of the major system and its stage of 
production (e.g., the number of units delivered and anticipated to be 
delivered during the life of the program);
    (2) The specific waiver requested, the duration of the waiver if it 
is to involve more than one contract, and the rationale for the waiver; 
and
    (3) All documentation supporting the request for waiver, such as a 
cost-benefit analysis.
    (b) The waiver request shall be forwarded to the Secretary, via the 
Office of Acquisition and Grant Management (M-60). The USCG shall 
maintain a written record of each waiver granted and the Congressional 
notification and report made, together with supporting documentation.



PART 1247_TRANSPORTATION--Table of Contents




                         Subpart 1247.1_General

Sec.
1247.104-370 Contract clause.

            Subpart 1247.3_Transportation in Supply Contracts

1247.305 Solicitation provisions, contract clauses, and transportation 
          factors.
1247.305-70 Solicitation provisions.
1247.305-71 Contract clause.

        Subpart 1247.5_Ocean Transportation by U.S.-Flag Vessels

1247.506 Procedures.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40287, Aug. 8, 1994, unless otherwise noted.



                         Subpart 1247.1_General



1247.104-370  Contract clause.

    The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.247-70, Acceptable Service at Reduced Rates, to implement the 
requirements of (FAR) 48 CFR 47.104-3.

[59 FR 40287, Aug. 8, 1994, as amended at 61 FR 50250, Sept. 25, 1996]



            Subpart 1247.3_Transportation in Supply Contracts



1247.305  Solicitation provisions, contract clauses, and transportation 
factors.



1247.305-70  Solicitation provisions.

    The contracting officer shall insert the following provisions in 
solicitations, as applicable:
    (a) (TAR) 48 CFR 1252.247-71, F.o.b. Origin Information, with 
Alternates I or II, as applicable, shall be inserted in accordance with 
(FAR) 48 CFR 47.305-3(b);
    (b) (TAR) 48 CFR 1252.247-72, F.o.b. Origin Only, shall be inserted 
in accordance with (FAR) 48 CFR 47.305-3(e);
    (c) (TAR) 48 CFR 1252.247-73, F.o.b. Destination Only, shall be 
inserted in accordance with (FAR) 48 CFR 47.305-4(b);
    (d) (TAR) 48 CFR 1252.247-74, Shipments to Ports and Air Terminals, 
with Alternates I, II, and III, shall be inserted in accordance with 
(FAR) 48 CFR 47.305-6(a)(1) through (a)(4);
    (e) (TAR) 48 CFR 1252.247-75, F.o.b. Designated Air Carrier's 
Terminal, Point of Exportation, implements the requirements of (FAR) 48 
CFR 47.305-6(a)(5); and
    (f) (TAR) 48 CFR 1252.247-76, Nomination of Additional Ports, 
implements the requirements of (FAR) 48 CFR 47.305-6(d).

[59 FR 40287, Aug. 8, 1994, as amended at 61 FR 50250, Sept. 25, 1996]



1247.305-71  Contract clause.

    The contracting officer shall insert the clause at (TAR) 48 CFR 
1252.247-77, Supply Movement in the Defense

[[Page 591]]

Transportation System, in contracts to implement the requirements of 
(FAR) 48 CFR 47.305-6(f)(1).

[59 FR 40287, Aug. 8, 1994, as amended at 61 FR 50250, Sept. 25, 1996]



        Subpart 1247.5_Ocean Transportation by U.S.-Flag Vessels



1247.506  Procedures.

    (d) Reports concerning cargo preference shipments/ocean shipments 
(see (FAR) 48 CFR 47.506(d)) shall, as a minimum, contain the 
information and follow the procedures within subparagraph (c) of (FAR) 
48 CFR 52.247-64, Preference for Privately Owned U.S.-Flag Commercial 
Vessels.



PART 1252_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




      Subpart 1252.1_Instructions for Using Provisions and Clauses

Sec.
1252.101 Using part 1252.

             Subpart 1252.2_Texts of Provisions and Clauses

1252.209-70 Disclosure of conflicts of interest.
1252.210-90 Bar coding requirement. (USCG)
1252.211-70 Brand name or equal.
1252.211-71 Index for specifications.
1252.211-90 Bar coding requirement. (USCG)
1252.213-90 Evaluation factor for Coast Guard performance of bar coding 
          requirement. (USCG)
1252.215-70 Key personnel and/or facilities.
1252.216-70 Evaluation of offers subject to an economic price adjustment 
          clause.
1252.216-71 Determination of award fee.
1252.216-72 Performance evaluation plan.
1252.216-73 Distribution of award fee.
1252.216-74 Settlement of letter contract.
1252.217-71 Delivery and shifting of vessel.
1252.217-72 Performance.
1252.217-73 Inspection and manner of doing work.
1252.217-74 Subcontracts.
1252.217-75 Lay days.
1252.217-76 Liability and insurance.
1252.217-77 Title.
1252.217-78 Discharge of liens.
1252.217-79 Delays.
1252.217-80 Department of Labor safety and health regulations for ship 
          repairing.
1252.217-81 Guarantee.
1252.219-70 Small business and small disadvantaged business 
          subcontracting reporting.
1252-220-90 Local hire. (USCG)
1252.222-70 Strikes or picketing affecting timely completion of the 
          contract work.
1252.222-71 Strikes or picketing affecting access to a DOT facility.
1252.223-70 Removal or disposal of hazardous substances--applicable 
          licenses and permits.
1252.223-71 Accident and fire reporting.
1252.223-72 Protection of human subjects.
1252.228-70 Loss of or damage to leased aircraft.
1252.228-71 Fair market value of aircraft.
1252.228-72 Risk and indemnities.
1252.228-90 Notification of Miller Act payment bond protection. (USCG)
1252.231-70 Date of incurrence of costs.
1252.236-70 Special precautions for work at operating airports.
1252.237-70 Qualifications of employees.
1252.237-71 Certification of data.
1252.237-72 Prohibition on advertising.
1252.237-90 Requirements. (USCG)
1252.237-91 Area of performance. (USCG)
1252.237-92 Performance and delivery. (USCG)
1252.237-93 Subcontracting. (USCG)
1252.237-94 Termination for default. (USCG)
1252.237-95 Group interment. (USCG)
1252.237-96 Permits. (USCG)
1252.237-97 Facility requirements. (USCG)
1252.237-98 Preparation history. (USCG)
1252.237-99 Award to single offeror. (USCG)
1252.242-70 Dissemination of information--educational institutions.
1252.242-71 Contractor testimony.
1252.242-72 Dissemination of contract information.
1252.242-73 Contracting officer's technical representative.
1252.245-70 Government property reports.
1252.247-70 Acceptable service at reduced rates.
1252.247-71 F.o.b. origin information.
1252.247-72 F.o.b. origin only.
1252.247-73 F.o.b. destination only.
1252.247-74 Shipments to ports and air terminals.
1252.247-75 F.o.b. designated air carrier's terminal, point of 
          exportation.
1252.247-76 Nomination of additional ports.
1252.247-77 Supply movement in the Defense Transportation System.

Appendix to Part 1252

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40288, Aug. 8, 1994, unless otherwise noted.

[[Page 592]]



      Subpart 1252.1_Instructions for Using Provisions and Clauses



1252.101  Using part 1252.

    (b) Numbering--(2)(i) Provisions or clauses that supplement the FAR. 
(A) Agency-prescribed provisions and clauses permitted by TAR and used 
on a standard basis (i.e., normally used in two or more solicitations or 
contracts regardless of contract type) shall be prescribed and contained 
in the TAR. OAs desiring to use a provision or a clause on a standard 
basis shall submit a request containing a copy of the clause(s), 
justification for its use, and evidence of legal counsel review to M-60 
in accordance with (TAR) 48 CFR 1201.304 for possible inclusion in the 
TAR.
    (B) Provisions and clauses used on a one-time basis (i.e., non-
standard provisions and clauses) may be approved by the contracting 
officer, unless a higher level is designated by the OA. This authority 
is permitted subject to:
    (1) evidence of legal counsel review in the contract file;
    (2) inserting these clauses in the appropriate sections of the 
uniform contract format; and
    (3) ensuring the provisions and clauses do not deviate from the 
requirements of the FAR and TAR.



             Subpart 1252.2_Texts of Provisions and Clauses



1252.209-70  Disclosure of conflicts of interest.

    As prescribed in 1209.507, insert the following provision:

             Disclosure of Conflicts of Interest (OCT 1994)

    It is the Department of Transportation's (DOT) policy to award 
contracts to only those offerors whose objectivity is not impaired 
because of any related past, present, or planned interest, financial or 
otherwise, in organizations regulated by DOT or in organizations whose 
interests may be substantially affected by Departmental activities. 
Based on this policy:
    (a) The offeror shall provide a statement in its proposal which 
describes in a concise manner all past, present or planned 
organizational, financial, contractual or other interest(s) with an 
organization regulated by DOT, or with an organization whose interests 
may be substantially affected by Depart-mental activities, and which is 
related to the work under this solicitation. The interest(s) described 
shall include those of the proposer, its affiliates, proposed 
consultants, proposed subcontractors and key personnel of any of the 
entities. Past interest shall be limited to within one year of the date 
of the offeror's technical proposal. Key personnel shall include any 
person owning more than 20% interest in the offeror, and the offeror's 
corporate officers, its senior managers and any employee who is 
responsible for making a decision or taking an action on this contract 
where the decision or action can have an economic or other impact on the 
interests of a regulated or affected organization.
    (b) The offeror shall describe in detail why it believes, in light 
of the interest(s) identified in paragraph (a) of this section, that 
performance of the proposed contract can be accomplished in an impartial 
and objective manner.
    (c) In the absence of any relevant interest identified in paragraph 
(a) of this section, the offeror shall submit in its proposal a 
statement certifying that to its best knowledge and belief no 
affiliation exists relevant to possible conflicts of interest. The 
offeror must obtain the same information from potential subcontractors 
prior to award of a subcontract.
    (d) The Contracting Officer will review the statement submitted and 
may require additional relevant information from the offeror. All such 
information, and any other relevant information known to DOT, will be 
used to determine whether an award to the offeror may create a conflict 
of interest. If any such conflict of interest is found to exist, the 
Contracting Officer may (1) disqualify the offeror, or (2) determine 
that it is otherwise in the best interest of the United States to 
contract with the offeror and include appropriate provisions to mitigate 
or avoid such conflict in the contract awarded.
    (e) The refusal to provide the disclosure or representation, or any 
additional information required, may result in disqualification of the 
offeror for award. If nondisclosure or misrepresentation is discovered 
after award, the resulting contract may be terminated. If after award 
the Contractor discovers a conflict of interest with respect to the 
contract awarded as a result of this solicitation, which could not 
reasonably have been know prior to award, an immediate and full 
disclosure shall be made in writing to the Contracting Officer. The 
disclosure shall include a full description of the conflict, a 
description of the action the contractor has taken, or proposes to take, 
to avoid or mitigate such conflict. The Contracting Officer may, 
however, terminate the contract for convenience if he or she deems that 
termination is in the best interest of the Government.

[[Page 593]]

                           (End of provision)



1252.210-90  Bar coding requirement. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1210.011-90 and 
1213.507-90, insert the following clause:

                   Bar Coding Requirements (OCT 1994)

    Item markings shall include bar coding in accordance with MIL-STD-
1189 as follows:
    (a) The stock number shall be bar coded with no prefixes, dashes, 
spaces, or suffixes encoded. The contract number, the delivery order, or 
call order number, when used, shall be bar coded with no spaces or 
dashes encoded.
    (b) Prefixes and suffixes to the stock number may be included in the 
OCR-A in-the-clear markings, but not in the bar code.
    (c) Preferred Bar Code Density (characters per inch as defined in 
MIL-STD-1189) is ``standard,'' but densities from ``standard'' to 
``low'' are acceptable.
    (d) OCR-A characters do not have to be machine readable.
    (e) Bar coding shall be machine readable.
    (f) Unless otherwise specified herein, minimum bar code height shall 
be 0.25 inch (6.4 mm) or 15 percent of the bar code length, whichever is 
greater.
    (g) The preferred position of the OCR-A characters is beneath the 
bar codes, but the OCR-A characters may be over the bar codes.
    (h) On outer containers contractors shall either:
    (1) Encode the stock numbers and contract number in one line of bar 
code with the stock number appearing first; or
    (2) Encode the item stock number and contract number on two labels, 
with the top label containing the stock number and the lower label 
containing the contract number.
    (i) On unit and intermediate containers, the item stock number in 
bar code with OCR-A below may be on the same label as the other data 
(identification markings) required by MIL-STD-129H. However, the bar 
code stock number shall appear on the top line with OCR-A characters on 
the second line; the OCR-A characters may include the stock number 
prefix and suffix, or alternatively, the complete stock number including 
any prefix and suffix, shall be repeated as part of the identification 
markings.
    (j) Exclusions from bar code markings are:
    (1) Multi-packs/consolidation containers (containers with two or 
more different stock numbers within).
    (2) Reusable shipping containers used for multiple/ different stock 
number applications.
    (3) Items consigned to a prime contractor's plant for installation 
in production.

                             (End of clause)



1252.211-70  Brand name or equal.

    As prescribed in (TAR) 48 CFR 1210.011, insert the following 
provision:

                     Brand Name or Equal (OCT 1994)

    (As used in this provision, the term ``brand name'' includes 
identification of products by make and model.)
    (a) If items called for by this solicitation have been identified in 
the schedule by a ``brand name or equal'' description, such 
identification is intended to be descriptive, but not restrictive, and 
is intended to indicate the quality and characteristics of products that 
will be satisfactory. Offers offering ``equal'' products (including 
products of the brand name manufacturer other than the one described by 
brand name) will be considered for award if such products are clearly 
identified in the offers and are determined by the Government to meet 
fully the salient characteristic requirements listed in the 
solicitation.
    (b) Unless the offeror clearly indicates in its offer that it is 
offering an ``equal'' product, its offer shall be considered as offering 
the brand name product referenced in the solicitation.
    (c) If the offeror proposed to furnish an ``equal'' product, the 
brand name, if any, of the product to be furnished shall be inserted in 
the space provided in the solicitation, or such product shall be 
otherwise clearly identified in the offer. The evaluation of offers and 
the determination as to equality of the product offered shall be the 
responsibility of the Government and will be based on information 
furnished by the offeror or identified in its offer as well as other 
information reasonably available to the contracting office. CAUTION TO 
OFFERORS: The contracting office is not responsible for locating or 
securing any information which is not identified in the offer and 
reasonably available to the contracting office. Accordingly, to insure 
that sufficient information is available, the offeror must furnish as a 
part of its offer all descriptive material (such as cuts, illustrations, 
drawings, or other information) necessary for the contracting office to: 
(1) determine whether the product offered meets the salient 
characteristic requirements of the solicitation; and (2) establish 
exactly what the offeror proposes to furnish and what the Government 
would be binding itself to acquire by making an award. The information 
furnished may include specific reference to information previously 
furnished or to information otherwise available to the contracting 
office.
    (d) If the offeror proposes to modify a product so as to make it 
conform to the requirements of the solicitation, it shall: (1) include

[[Page 594]]

in its offer a clear description of such proposed modifications; and (2) 
clearly mark any descriptive material to show the proposed 
modifications.
    (e) Modifications to make a product conform to a brand name product 
referenced in the solicitation and proposed after the time for receipt 
of offers, will not be considered.

                           (End of provision)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.211-71  Index for specifications.

    As prescribed in (TAR) 48 CFR 1210.011, insert the following clause:

                   Index for Specifications (OCT 1994)

    If an index or table of contents is furnished in connection with 
specifications, it is understood that such index or table of contents is 
for convenience only. Its accuracy and completeness is not guaranteed, 
and it is not to be considered as part of the specification. In case of 
discrepancy between the index or table of contents and the 
specifications, the specifications shall govern.

                             (End of clause)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 1996]

    Editorial Note: At 64 FR 2439, Jan. 14, 1999, section 1252.211-71, 
first paragraph, was amended by removing the citation``A(TAR) 48 CFR 
1211.204'' and adding in its place the citation ``A(TAR) 48 CFR 
1211.204-70''. This citation did not exist in the 1998 Code of Federal 
Regulations and could not be incorporated.



1252.211-90  Bar coding requirement. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1211.204-90 and 
1213.302-590, insert the following clause:

                   Bar Coding Requirements (OCT 1996)

    Item markings shall include bar coding in accordance with MIL-STD-
1189 as clarified below:
    (a) The stock number shall be bar coded with no prefixes, dashes, 
spaces, or suffixes encoded. The contract number, the delivery order, or 
call order number, when used, shall be bar coded with no spaces or 
dashes encoded.
    (b) Prefixes and suffixes to the stock number may be included in the 
OCR-A in-the-clear markings, but not in the bar code.
    (c) Preferred Bar Code Density (characters per inch as defined in 
MIL-STD-1189) is ``standard,'' but densities from ``standard'' to 
``low'' are acceptable.
    (d) OCR-A characters do not have to be machine readable.
    (e) Bar coding shall be machine readable.
    (f) Unless otherwise specified herein, minimum bar code height shall 
be 0.25 inch (6.4 mm) or 15 percent of the bar code length, whichever is 
greater.
    (g) The preferred position of the OCR-A characters is below the bar 
codes, but the OCR-A characters may be above the bar codes.
    (h) On outer containers contractors shall either:
    (1) Encode the stock numbers and contract number in one line of bar 
code with the stock number appearing first; or
    (2) Encode the item stock number and contract number on two labels, 
with the top label containing the stock number and the lower label 
containing the contract number.
    (i) On unit and intermediate containers, the item stock number in 
bar code with OCR-A below may be on the same label as the other data 
(identification markings) required by MIL-STD-129H. However, the bar 
code stock number shall appear on the top line with OCR-A characters on 
the second line; the OCR-A characters may include the stock number 
prefix and suffix, or alternatively, the complete stock number including 
any prefix and suffix, shall be repeated as part of the identification 
markings.
    (j) Exclusions from bar code markings are:
    (1) Multi-packs/consolidation containers (containers with two or 
more different stock numbers within).
    (2) Reusable shipping containers used for multiple/different stock 
number applications.
    (3) Items consigned to a prime contractor's plant for installation 
in production.

                             (End of clause)

[64 FR 2439, Jan. 14, 1999]



1252.213-90  Evaluation factor for Coast Guard performance of bar coding 
requirement. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1213.106-190, insert 
the following provision:

Evaluation Factor for Coast Guard Performance of Bar Coding Requirement 
                               (OCT 1994)

    If a small business cannot provide the bar coding requirement, as 
indicated elsewhere in the schedule, the contracting officer will apply 
the following formula to the quoted amounts:
    (a) Unit price quoted by small business $------

[[Page 595]]

    (b) Add unit cost to the USCG to provide bar coding $------
    (c) Adjusted unit price (add lines a. and b.) $------
    The line (c) amount will become the amount the contracting officer 
considered when determining the lowest quoted amount.

                           (End of provision)

[64 FR 2439, Jan. 14, 1999]



1252.215-70  Key personnel and/or facilities.

    As prescribed in (TAR) 48 CFR 1215.106, insert the following clause:

               Key Personnel and/or Facilities (OCT 1994)

    (a) The personnel and/or facilities as specified in paragraph (c) 
are considered essential to the work being performed hereunder and may, 
with the consent of the contracting parties, be changed from time to 
time during the course of the contract by adding or deleting personnel 
and/or facilities, as appropriate.
    (b) Prior to removing, replacing, or diverting any of the specified 
individuals or facilities, the Contractor shall notify, in writing, and 
receive consent from, the Contracting Officer reasonably in advance of 
the action and shall submit justification (including proposed 
substitutions) in sufficient detail to permit evaluation of the impact 
on this contract.
    (c) No diversion shall be made by the Contractor without the written 
consent of the Contracting Officer. The Contracting Officer may ratify, 
in writing, the change and such ratification shall constitute the 
consent of the Contracting Officer required by this clause.
    The Key Personnel and/or Facilities under this Contract:
(Specify key personnel and/or facilities)

                             (End of clause)

[59 FR 40228, Aug. 8, 1994]

    Editorial Note: At 64 FR 2439, Jan. 14, 1999, section 1252.215-70, 
first paragraph, was amended by removing the citation ``A(TAR) 48 CFR 
1215.106'' and adding in its place the citation ``A(TAR) 48 CFR 
1215.204-3''. This citation did not exist in the 1998 Code of Federal 
Regulations and could not be incorporated.



1252.216-70  Evaluation of offers subject to an economic price adjustment 
clause.

    As prescribed in (TAR) 48 CFR 1216.203-470, insert the following 
provision:

Evaluation of Offers Subject to an Economic Price Adjustment Clause (OCT 
                                  1994)

    Offers shall be evaluated without an amount for an economic price 
adjustment being added. Offers will be rejected which: (1) Increase the 
ceiling stipulated; (2) limit the downward adjustment; or (3) delete the 
economic price adjustment clause. If the offer stipulates a ceiling 
lower than that included in the solicitation, the lower ceiling will be 
incorporated into any resulting contract.

                           (End of provision)



1252.216-71  Determination of award fee.

    As prescribed in (TAR) 48 CFR 1216.405(a), insert the following 
clause:

                  Determination of Award Fee (OCT 1994)

    (a) The Government shall, at the conclusion of each specified 
evaluation period(s), evaluate the contractor's performance for a 
determination of award fee earned. The contractor agrees that the 
determination as to the amount of the award fee earned will be made by 
the Government Fee Determination Official (FDO) and such determination 
is binding on both parties and shall not be subject to appeal under the 
``Disputes'' clause or to any board or court.
    (b) It is agreed that the evaluation of contractor performance shall 
be in accordance with a Performance Evaluation Plan and that the 
contractor shall be promptly advised in writing of the determination and 
reasons why the award fee was or was not earned. It is further agreed 
that the contractor may submit a self-evaluation of performance of each 
period under consideration. While it is recognized that the basis for 
the determination of the fee shall be the evaluation by the Government, 
any self-evaluation which is received within ------ (insert number) days 
after the end of the period being evaluated may be given such 
consideration, if any, as the FDO shall find appropriate.
    (c) The FDO may specify in any fee determination that fee not earned 
during the period evaluated may be accumulated and be available for 
allocation to one or more subsequent periods. In that event, the 
distribution of award fee shall be adjusted to reflect such allocations.

                             (End of clause)

[59 FR 40228, Aug. 8, 1994]

    Editorial Note: At 64 FR 2439, Jan. 14, 1999, section 1252.216-71, 
first paragraph, was amended by removing the citation ``A(TAR) 48 CFR 
1216.405(a)'' and adding in its place the

[[Page 596]]

citation ``A(TAR) 48 CFR 1216.406''. This citation did not exist in the 
1998 Code of Federal Regulations and could not be incorporated.



1252.216-72  Performance evaluation plan.

    As prescribed in (TAR) 48 CFR 1216.405(b), insert the following 
clause:

                 Performance Evaluation Plan (OCT 1994)

    (a) A Performance Evaluation Plan shall be unilaterally established 
by the Government based on the criteria stated in the contract and used 
for the determination of award fee. This plan shall include the criteria 
used to evaluate each area and the percentage of award fee (if any) 
available for each area. A copy of the plan shall be provided to the 
contractor ------ (insert number) calendar days prior to the start of 
the first evaluation period.
    (b) The criteria contained within the Performance Evaluation Plan 
may relate to: (1) Technical (including schedule) requirements if 
appropriate; (2) Management; and (3) Cost.
    (c) The Performance Evaluation Plan may, consistent with the 
contract, be revised unilaterally by the Government at any time during 
the period of performance. Notification of such changes shall be 
provided to the contractor ------ (insert number) calendar days prior to 
the start of the evaluation period to which the change will apply.

                             (End of clause)

[59 FR 40228, Aug. 8, 1994]

    Editorial Note: At 64 FR 2439, Jan. 14, 1999, section 1252.216-72, 
first paragraph, was amended by removing the citation ``A(TAR) 48 CFR 
1216.405(b)'' and adding in its place the citation ``A(TAR) 48 CFR 
1216.406''. This citation did not exist in the 1998 Code of Federal 
Regulations and could not be incorporated.



1252.216-73  Distribution of award fee.

    As prescribed in (TAR) 48 CFR 1216.405(c), insert the following 
clause:

                  Distribution of Award Fee (OCT 1994)

    (a) The total amount of award fee available under this contract is 
assigned according to the following evaluation periods and amounts:
    Evaluation Period:
    Available Award Fee:
    (insert appropriate information)
    (b) Payment of the base fee and award fee shall be made, provided 
that after payment of 85 percent of the base fee and potential award 
fee, the Government may withhold further payment of the base fee and 
award fee until a reserve is set aside in an amount that the Government 
considers necessary to protect its interest. This reserve shall not 
exceed 15 percent of the total base fee and potential award fee or 
$100,000, whichever is less.
    (c) In the event of contract termination, either in whole or in 
part, the amount of award fee available shall represent a prorata 
distribution associated with evaluation period activities or events as 
determined by the Government.
    (d) The Government will promptly make payment of any award fee upon 
the submission by the contractor to the contracting officer's authorized 
representative, of a public voucher or invoice in the amount of the 
total fee earned for the period evaluated. Payment may be made without 
using a contract modification.

                             (End of clause)

[59 FR 40228, Aug. 8, 1994]

    Editorial Note: At 64 FR 2439, Jan. 14, 1999, section 1252.216-73, 
first paragraph, was amended by removing the citation ``A(TAR) 48 CFR 
1216.405(c)'' and adding in its place the citation ``A(TAR) 48 CFR 
1216.406''. This citation did not exist in the 1998 Code of Federal 
Regulations and could not be incorporated.



1252.216-74  Settlement of letter contract.

    As prescribed in (TAR) 48 CFR 1216.603-4, insert the following 
clause:

                Settlement of Letter Contract (OCT 1994)

    (a) This contract constitutes the definitive contract contemplated 
by issuance of letter contract ------ (insert number) dated---- (insert 
effective date). It supersedes the letter contract and its modification 
number(s) ------ (insert number(s)) and, to the extent of any 
inconsistencies, governs. (b) The cost(s) and fee(s), or price(s), 
established in this definitive contract represents full and complete 
settlement of letter contract ---- (insert number and modification 
number(s) ------ (insert number(s)). Payment of the agreed upon fee or 
profit withheld pending definitization of the letter contract, may 
commence immediately at the rate and times stated within this contract.

                             (End of clause)



1252.217-71  Delivery and shifting of vessel.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

               Delivery and Shifting of Vessel (OCT 1994)

    The Government shall deliver the vessel to the Contractor at his 
place of business. Upon completion of the work, the Government

[[Page 597]]

shall accept delivery of the vessel at the Contractor's place of 
business. The Contractor shall provide, at no additional charge, upon 24 
hours' advance notice, a tug or tugs and docking pilot, acceptable to 
the Contracting Officer, to assist in handling the vessel between (to 
and from) the Contractor's plant and the nearest point in a waterway 
regularly navigated by vessels of equal or greater draft and length. 
While the vessel is in the hands of the Contractor, any necessary 
towage, cartage, or other transportation between ship and shop or 
elsewhere, which may be incident to the work herein specified, shall be 
furnished by the Contractor without additional charge to the Government.

                             (End of clause)



1252.217-72  Performance.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                         Performance (OCT 1994)

    (a) Upon the award of the contract, the Contractor shall promptly 
start the work specified and shall diligently prosecute the work to 
completion. The Contractor shall not start work until the contract has 
been awarded except in the case of emergency work ordered by the 
Contracting Officer in writing.
    (b) The Government shall deliver the vessel described in the 
contract at the time and location specified in the contract. Upon 
completion of the work, the Government shall accept delivery of the 
vessel at the time and location specified in the contract.
    (c) The Contractor shall without charge,--
    (1) Make available to personnel of the vessel while in dry dock or 
on a marine railway, sanitary lavatory and similar facilities at the 
plant 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 contract 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 contract without advance approval of the Contracting 
Officer. Dock and sea trials not specified in the contract 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.

                             (End of clause)



1252.217-73  Inspection and manner of doing work.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

             Inspection and Manner of Doing Work (OCT 1994)

    (a) The Contractor shall perform work in accordance with the 
contract, any drawings and specifications made a part of the job order, 
and any change or modification issued under the Changes clause.
    (b)(1) Except as provided in paragraph (b)(2) of this clause, and 
unless otherwise specifically provided in the contract, all operational 
practices of the Contractor and all workmanship, material, equipment, 
and articles used in the performance of work under this contract 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 offer.
    (2) When Navy specifications are specified in the contract, 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 during the Contractor's performance of the work.
    (1) If, prior to delivery, the Government finds any material or 
workmanship is defective or not in accordance with the contract, in 
addition to its rights under the Guarantee clause, 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

[[Page 598]]

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 contract, 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 contract 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 
contract.
    (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 the contract, 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 a ``gas-free'' or ``safe-for-
hotwork'' certificate 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 contract, 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 Fahrenheit, 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 contract, sketches, 
drawings, plans, or specifications prepared or furnished by the 
Government, unless the contract 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, and 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 
contract 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.''

                             (End of clause)



1252.217-74  Subcontracts.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                         Subcontracts (OCT 1994)

    (a) Nothing contained in the contract shall be construed as creating 
any contractual relationship between any subcontractor and the 
Government. The divisions or sections of the specifications are not 
intended to control the Contractor in dividing the work among 
subcontractors or to limit the work performed by any trade.
    (b) The Contractor shall be responsible to the Government for acts 
and omissions of its own employees, and of subcontractors and their 
employees. The Contractor shall also be responsible for the coordination 
of the work of the trades, subcontractors, and material men.
    (c) The Contractor shall, without additional expense to the 
Government, employ specialty subcontractors where required by the 
specifications.
    (d) The Government or its representatives will not undertake to 
settle any differences between the Contractor and its subcontractors, or 
between subcontractors.

[[Page 599]]

                             (End of clause)



1252.217-75  Lay days.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                           Lay Days (OCT 1994)

    (a) Lay day time will be paid by the Government at the Contractor's 
stipulated bid price for this item of the contract when the vessel 
remains on the dry dock or marine railway as a result of any change that 
involves work in addition to that required under the basic contract.
    (b) No lay day time shall be paid until all items of the basic 
contract for which a price was established by the Contractor and for 
which docking of the vessel was required have been satisfactorily 
completed and accepted.
    (c) Days of hauling out and floating, whatever the hour, shall not 
be paid as lay day time, and days when no work is performed by the 
Contractor shall not be paid as lay day time.
    (d) Payment of lay day time shall constitute complete compensation 
for all costs, direct and indirect, to reimburse the Contractor for use 
of dry dock or marine railway.

                             (End of clause)



1252.217-76  Liability and insurance.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                   Liability and Insurance (OCT 1994)

    (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) Loss or damage to the vessel, materials, or equipment. (1) 
Unless otherwise directed or approved in writing by the Contracting 
Officer, the Contractor shall not carry insurance against any form of 
loss or damage to the vessel(s) or to the materials or equipment to 
which the Government has title or which have been furnished by the 
Government for installation by the Contractor. The Government assumes 
the risks of loss of and damage to that property.
    (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 subcontractors; 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 
codefendant 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 provision of 
this paragraph (b).
    (c) Indemnification. The Contractor indemnifies the Government and 
the vessel and its owners against all claims, demands, or causes of 
action to which the Government, the vessel or its owner(s) might be 
subject as a result of damage or injury (including death) to the 
property or person of anyone other than the Government or its employees, 
or the vessel or its owner, arising in whole or in part from the 
negligence or other wrongful act of the Contractor, or its agents or 
employees, or any subcontractor, or its agents or employees.
    (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

[[Page 600]]

shall be as determined by other provisions of this contract 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) Insurance. (1) The Contractor shall, at its own expense, obtain 
and maintain the following insurance--
    (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 contract 
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 expenses 
incurred in this effort, other than the cost of maintaining the 
Contractor's usual organization.
    (4) The Contractor shall not, except at its own expense, voluntarily 
make any payments, 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 of 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 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 this contract.
    (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) Decide that the loss or damage shall not be replaced or repaired 
and in that event, 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 
contract.

                             (End of clause)



1252.217-77  Title.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                            Title (OCT 1994)

    (a) Unless otherwise provided, title to all materials and equipment 
to be incorporated in a vessel in the performance of this contract shall 
vest in the Government upon delivery at the location specified for the 
performance of the work.
    (b) Upon completion of the contract, or with the approval of the 
Contracting Officer during performance of the contract, 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 equipments.
    (c) The vessel, its equipment, movable stores, cargo, or other 
ship's materials shall not be considered Government-furnished property.

[[Page 601]]

                             (End of clause)



1252.217-78  Discharge of liens.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                      Discharge of Liens (OCT 1994)

    (a) The Contractor shall immediately discharge or cause to be 
discharged, any lien or right in rem of any kind, other than in favor of 
the Government, that exists or arises in connection with work done or 
materials furnished under this contract.
    (b) If any such lien or right in rem is not immediately discharged, 
the Government, at the expense of the Contractor, may discharge, or 
cause to be discharged, the lien or right.

                             (End of clause)



1252.217-79  Delays.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

                            Delays (OCT 1994)

    When during the performance of this contract the Contractor is 
required to delay work on a vessel temporarily, due to orders or actions 
of the Government respecting stoppage of work to permit shifting the 
vessel, stoppage of hot work to permit bunkering, stoppage of work due 
to embarking or debarking passengers and loading or discharging cargo, 
and the Contractor is not given sufficient advance notice or is 
otherwise unable to avoid incurring additional costs on account thereof, 
an equitable adjustment shall be made in the price of the contract 
pursuant to the ``Changes'' clause.

                             (End of clause)



1252.217-80  Department of Labor safety and health regulations for ship 
repairing.

    As prescribed at 1217.7000 (a) and (b), insert the following clause:

 Department of Labor Safety and Health Regulations for Ship Repair (OCT 
                                  1994)

    Nothing contained in this contract 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, 
et seq.);
    (b) The Safety and Health Regulations for Ship Repairing (29 CAR 
part 1915); or
    (c) Any other applicable Federal, State, and local laws, codes, 
ordinances, and regulations.

                             (End of clause)



1252.217-81  Guarantee.

    As prescribed at 1217.7000(c), insert the following clause:

                          Guarantee (OCT 1994)

    (a) In the event any work performed or materials furnished by the 
contractor prove defective or deficient within 60 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 60 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 contract.
    (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 
contract price. Failure to agree upon an equitable reduction shall 
constitute a dispute under the Disputes clause of this contract.

                             (End of clause)

[59 FR 40288, Aug. 8, 1994, as amended at 60 FR 55802, Nov. 3, 1995]



1252.219-70  Small business and small disadvantaged business subcontracting 
reporting.

    As prescribed in (TAR) 48 CFR 1219.708-70, insert the following 
clause:

[[Page 602]]

Small Business and Small Disadvantaged Business Subcontracting Reporting 
                               (OCT 1994)

    (a) The Contractor shall submit the Summary Subcontract Report 
(Standard Form 295 (SF-295)) to the Department of Transportation, Office 
of the Secretary, Office of Small and Disadvantaged Business Utilization 
(S-42), 400 7th St., SW, Washington, DC, 20590.
    (b) The Contractor shall include this clause in all subcontracts 
that include the clause at (FAR) 48 CFR 52.219-9.

                             (End of clause)

[59 FR 40288, Aug 8, 1994, as amended at 62 FR 26420, May 14, 1997]



1252.220-90  Local hire. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1220.9001, insert the 
following clause:

                          Local Hire (OCT 1994)

    The Contractor shall employ, for the purpose of performing this 
contract in whole or in part in a State that has an unemployment rate in 
excess of the national average rate of unemployment (as defined by the 
Secretary of Labor), individuals who are local residents and who, in the 
case of any craft or trade, possess or would be able to acquire promptly 
the necessary skills. Local Resident means a resident or an individual 
who commutes daily to that State.

                             (End of clause)

[64 FR 2439, Jan. 14, 1999]



1252.222-70  Strikes or picketing affecting timely completion of the 
contract work.

    As prescribed in (TAR) 48 CFR 1222.101-71(a), insert the following 
clause:

 Strikes or Picketing Affecting Timely Completion of the Contract Work 
                               (OCT 1994)

    Notwithstanding any other provision hereof, the Contractor is 
responsible for delays arising out of labor disputes, including but not 
limited to strikes, if such strikes are reasonably avoidable. A delay 
caused by a strike or by picketing which constitutes an unfair labor 
practice is not excusable unless the Contractor takes all reasonable and 
appropriate action to end such a strike or picketing, such as the filing 
of a charge with the National Labor Relations Board, the use of other 
available Government procedures, and the use of private boards or 
organizations for the settlement of disputes.

                             (End of clause)



1252.222-71  Strikes or picketing affecting access to a DOT facility.

    As prescribed in (TAR) 48 CFR 1222.101-71(b), insert the following 
clause:

   Strikes or Picketing Affecting Access to a DOT Facility (OCT 1994)

    If the Contracting Officer notifies the Contractor in writing that a 
strike or picketing: (a) is directed at the Contractor or subcontractor 
or any employee of either; and (b) impedes or threatens to impede access 
by any person to a DOT facility where the site of the work is located, 
the Contractor shall take all appropriate action to end such strike or 
picketing, including, if necessary, the filing of a charge of unfair 
labor practice with the National Labor Relations Board or the use of 
other available judicial or administrative remedies.

                             (End of clause)



1252.223-70  Removal or disposal of hazardous substances--applicable 
licenses and permits.

    As prescribed in (TAR) 48 CFR 1223.303, insert the following clause:

  Removal or Disposal of Hazardous Substances--Applicable Licenses and 
                           Permits (DEC 1997)

    The Contractor must have all licenses and permits required by 
Federal, state, and local laws to perform hazardous substance(s) removal 
or disposal services. If the Contractor does not currently possess these 
documents, it must obtain all requisite licenses and permits within -- 
days after date of award. The Contractor shall provide evidence of said 
documents to the Contracting Officer or designated Government 
representative prior to commencement of work under the contract.

                             (End of clause)

[62 FR 67752, Dec. 30, 1997]



1252.223-71  Accident and fire reporting.

    As prescribed in (TAR) 48 CFR 1223.7000(a), insert the following 
clause:

                 Accident and Fire Reporting (OCT 1994)

    (a) The Contractor shall report to the Contracting Officer any 
accident or fire occurring at the site of the work which causes:

[[Page 603]]

    (1) A fatality or as much as one lost workday on the part of any 
employee of the Contractor or subcontractor at any tier;
    (2) Damage of $1,000 or more to Federal property, either real or 
personal;
    (3) Damage of $1,000 or more to Contractor or subcontractor owned or 
leased motor vehicles or mobile equipment; or
    (4) Damage for which a contract time extension may be requested.
    (b) Accident and fire reports required by paragraph (a) of this 
section shall be accomplished by the following means:
    (1) Accidents or fires resulting in a death, hospitalization of five 
or more persons, or destruction of Federal property (either real or 
personal), the total value of which is estimated at $100,000 or more, 
shall be reported immediately by telephone to the Contracting Officer or 
his/her authorized representative and shall be confirmed by telegram or 
facsimile transmission within 24 hours to the Contracting Officer. Such 
telegram or facsimile transmission shall state all known facts as to 
extent of injury and damage and as to cause of the accident or fire.
    (2) Other accident and fire reports required by paragraph (a) of 
this section may be reported by the Contractor using a state, private 
insurance carrier, or Contractor accident report form which provides for 
the statement of:
    (i) The extent of injury; and
    (ii) The damage and cause of the accident or fire.
    Such report shall be mailed or otherwise delivered to the 
Contracting Officer within 48 hours of the occurrence of the accident or 
fire.
    (c) The Contractor shall assure compliance by subcontractors at all 
tiers with the requirements of this clause.

                             (End of clause)



1252.223-72  Protection of human subjects.

    As prescribed in (TAR) 48 CFR 1223.7000(b), insert the following 
clause:

                 Protection of Human Subjects (OCT 1994)

    The Contractor shall comply with the National Highway Traffic Safety 
Administration (NHTSA) principles and procedures (in accordance with 
NHTSA Order 700-1, 700-3, and 700-4) for the protection of human 
subjects participating in activities supported directly or indirectly by 
contracts from DOT. A copy of the applicable NHTSA orders shall be 
provided to offerors and/or contractors upon request. In fulfillment of 
its assurance:
    (a) A committee competent to review projects and activities that 
involve human subjects shall be established and maintained by the 
Contractor.
    (b) The committee shall be assigned responsibility to determine for 
each activity planned and conducted that:
    (1) The rights and welfare of subjects are adequately protected;
    (2) The risks to subjects are outweighed by potential benefits; and
    (3) The informed consent of subjects shall be obtained by methods 
that are adequate and appropriate.
    (c) Committee reviews are to be conducted with objectivity and in a 
manner to ensure the exercise of independent judgment of the members. 
Members shall be excluded from review of projects or activities in which 
they have an active role or a conflict of interests.
    (d) Continuing constructive communication between the committee and 
the project directors must be maintained as a means of safeguarding the 
rights and welfare of subjects.
    (e) Facilities and professional attention required for subjects who 
may suffer physical, psychological, or other injury as a result of 
participating in an activity shall be provided.
    (f) The committee shall maintain records of committee review of 
applications and active projects, of documentation of informed consent, 
and of other documentation that may pertain to the selection, 
participation, and protection of subjects. Detailed records shall be 
maintained of circumstances of any review that adversely affects the 
rights or welfare of the individual subjects. Such materials shall be 
made available to DOT upon request.
    (g) The retention period of such records and materials shall be as 
specified at (FAR) 48 CFR 4.703.
    (h) Periodic reviews shall be conducted by the Contractor to assure, 
through appropriate administrative overview, that the practices and 
procedures designed for the protection of the rights and welfare of 
subjects are being effectively applied.

    (Note: If the Contractor has a Department of Health and Human 
Services approved Institutional Review Board (IRB) which can 
appropriately review this contract in accordance with the technical 
requirements and NHTSA Orders 700-1, 700-3, and 700-4, that IRB will be 
considered acceptable for the purposes of this contract.

                             (End of clause)



1252.228-70  Loss of or damage to leased aircraft.

    As prescribed in (TAR) 48 CFR 1228.306-70 (a) and (b), insert the 
following clause:

[[Page 604]]

             Loss of or Damage to Leased Aircraft (DEC 1997)

    (a) The Government assumes all risk of loss of, or damage (except 
normal wear and tear) to, the leased aircraft during the term of this 
lease while the aircraft is in the possession of the Government.
    (b) In the event of damage to the aircraft, the Government, at its 
option, shall make the necessary repairs with its own facilities or by 
contract, or pay the Contractor the reasonable cost of repair of the 
aircraft.
    (c) In the event the aircraft is lost or damaged beyond repair, the 
Government shall pay the Contractor a sum equal to the fair market value 
of the aircraft at the time of such loss or damage, which value may be 
specifically agreed to in clause 1252.228-71, ``Fair Market Value of 
Aircraft,'' less the salvage value of the aircraft. However, the 
Government may retain the damaged aircraft or dispose of it as it 
wishes. In that event, the Contractor will be paid the fair market value 
of the aircraft as stated in the clause.
    (d) The Contractor agrees that the contract price does not include 
any cost attributable to hull insurance or to any reserve fund it has 
established to protect its interest in the aircraft. If, in the event of 
loss or damage to the leased aircraft, the Contractor receives 
compensation for such loss or damage in any form from any source, the 
amount of such compensation shall be:
    (1) Credited to the Government in determining the amount of the 
Government's liability; or
    (2) For an increment of value of the aircraft beyond the value for 
which the Government is responsible.
    (e) In the event of loss of or damage to the aircraft, the 
Government shall be subrogated to all rights of recovery by the 
Contractor against third parties for such loss or damage and the 
Contractor shall promptly assign such rights in writing to the 
Government.

                             (End of clause)

[62 FR 67752, Dec. 30, 1997]



1252.228-71  Fair market value of aircraft.

    As prescribed in (TAR) 48 CFR 1228.306-70 (a) and (c), insert the 
following clause:

                Fair Market Value of Aircraft (OCT 1994)

    For purposes of the clause entitled ``Loss of or Damage to Leased 
Aircraft,'' it is agreed that the fair market value of the aircraft to 
be used in the performance of this contract shall be the lesser of the 
two values set out in paragraphs (a) and (b):
    (a) $------------; or
    (b) If the contractor has insured the same aircraft against loss or 
destruction in connection with other operations, the amount of such 
insurance coverage on the date of the loss or damage for which the 
Government may be responsible under this contract.

                             (End of clause)



1252.228-72  Risk and indemnities.

    As prescribed in (TAR) 48 CFR 1228.306-70(a) and (d), insert the 
following clause:

                     Risk and Indemnities (DEC 1997)

    The Contractor hereby agrees to indemnify and hold harmless the 
Government, its officers and employees from and against all claims, 
demands, damages, liabilities, losses, suits and judgments (including 
all costs and expenses incident thereto) which may be suffered by, 
accrue against, be charged to or recoverable from the Government, its 
officers and employees by reason of injury to or death of any person 
other than officers, agents, or employees of the Government or by reason 
of damage to property of others of whatsoever kind (other than the 
property of the Government, its officers, agents or employees) arising 
out of the operation of the aircraft. In the event the Contractor holds 
or obtains insurance in support of this covenant, evidence of insurance 
shall be delivered to the Contracting Officer.

                             (End of clause)

[62 FR 67752, Dec. 30, 1997]



1252.228-90  Notification of Miller Act payment bond protection. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1228.106-490, insert 
the following clause:

      Notification of Miller Act Payment Bond Protection (OCT 1994)

    This notice clause shall be inserted by first tier subcontractors in 
all their subcontracts and shall contain the surety which has provided 
the payment bond under the prime contract.
    (a) The prime contract is subject to the Miller Act (40 U.S.C. 270), 
under which the prime contractor has obtained a payment bond. This 
payment bond may provide certain unpaid employees, suppliers, and 
subcontractors a right to sue the bonding surety under the Miller Act 
for amounts owned for work performed and materials delivery under the 
prime contract.
    (b) Persons believing that they have legal remedies under the Miller 
Act should consult their legal advisor regarding the proper steps to 
take to obtain these remedies. This notice

[[Page 605]]

clause does not provide any party any rights against the Federal 
Government, or create any relationship, contractual or otherwise, 
between the Federal Government and any private party.
    (c) The surety which has provided the payment bond under the prime 
contract is:
________________________________________________________________________
(Name)

________________________________________________________________________
(Street Address)

________________________________________________________________________
(City, State, Zip Code)

________________________________________________________________________
(Contact & Tel. No.)

                             (End of clause)

[64 FR 2439, Jan. 14, 1999]



1252.231-70  Date of incurrence of costs.

    As prescribed in (TAR) 48 CFR 1231.205-32, insert the following 
clause:

                 Date of Incurrence of Costs (OCT 1994)

    The Contractor shall be entitled to reimbursement for costs incurred 
on or after ------ in an amount not to exceed $---- that, if incurred 
after this contract had been entered into, would have been reimbursable 
under this contract.

                             (End of clause)



1252.236-70  Special precautions for work at operating airports.

    As prescribed in (TAR) 48 CFR 1236.570, insert the following clause:

      Special Precautions for Work at Operating Airports (OCT 1994)

    (a) When work is to be performed at an operating airport, the 
Contractor must arrange its work schedule so as not to interfere with 
flight operations. Such operations will take precedence over 
construction convenience. Any operations of the Contractor which would 
otherwise interfere with or endanger the operations of aircraft shall be 
performed only at times and in the manner directed by the Contracting 
Officer. The Government will make every effort to reduce the disruption 
of the Contractor's operation.
    (b) Unless otherwise specified by local regulations, all areas in 
which construction operations are underway shall be marked by yellow 
flags during daylight hours and by red lights at other times. The red 
lights along the edge of the construction areas within the existing 
aprons shall be the electric type of not less than 100 watts intensity 
placed and supported as required. All other construction markings on 
roads and adjacent parking lots may be either electric or battery type 
lights. These lights and flags shall be placed so as to outline the 
construction areas and the distance between any two flags or lights 
shall not be greater than 25 feet. The Contractor shall provide adequate 
watch to maintain the lights in working condition at all times other 
than daylight hours. The hour of beginning and the hour of ending of 
daylight will be determined by the Contracting Officer.
    (c) All equipment and material in the construction areas or when 
moved outside the construction area shall be marked with airport safety 
flags during the day and when directed by the Contracting Officer, with 
red obstruction lights at nights. All equipment operating on the apron, 
taxiway, runway, and intermediate areas after darkness hours shall have 
clearance lights in conformance with instructions from the Contracting 
Officer. No construction equipment shall operate within 50 feet of 
aircraft undergoing fuel operations. Open flames are not allowed on the 
ramp except at times authorized by the Contracting Officer.
    (d) Trucks and other motorized equipment entering the airport or 
construction area shall do so only over routes determined by the 
Contracting Officer. Use of runways, aprons, taxiways, or parking areas 
as truck or equipment routes will not be permitted unless specifically 
authorized for such use. Flag personnel shall be furnished by the 
Contractor at points on apron and taxiway for safe guidance of its 
equipment over these areas to assure right of way to aircraft. Areas and 
routes used during the contract must be returned to their original 
condition by the Contractor. The maximum speed allowed at the airport 
shall be established by airport management. Vehicles shall be operated 
so as to be under safe control at all times, weather and traffic 
conditions considered. Vehicles must be equipped with head and tail 
lights during the hours of darkness.

                             (End of clause)



1252.237-70  Qualifications of employees.

    As prescribed in (TAR) 48 CFR 1237.110, insert the following clause:

                 Qualifications of Employees (OCT 1994)

    The Contracting Officer may require dismissal from work of those 
employees which he/she deems incompetent, careless, insubordinate, 
unsuitable or otherwise objectionable, or whose continued employment he/
she deems contrary to the public interest or inconsistent with the best 
interest of national security. The Contractor shall fill out, and cause 
each of its employees on the contract work to fill out, for submission 
to the Government, such forms as may be necessary for

[[Page 606]]

security or other reasons. Upon request of the Contracting Officer, the 
Contractor's employees shall be fingerprinted. Each employee of the 
Contractor shall be a citizen of the United States of America, or an 
alien who has been lawfully admitted for permanent residence as 
evidenced by Alien Registration Receipt Card Form I-151, or who presents 
other evidence from the Immigration and Naturalization Service that 
employment will not affect his/her immigration status.



1252.237-71  Certification of data.

    As prescribed in (TAR) 48 CFR 1213.7101 and 1237.7003, insert the 
following provisions:

                    Certification of Data (JAN 1996)

    (a) The offeror represents and certifies that to the best of its 
knowledge and belief, the information and/or data (e.g., company 
profile, qualifications, background statements, brochures) submitted 
with its offer is current, accurate, and complete as of the date of its 
offer.
    (b) The offeror understands that any inaccurate data provided to the 
Department of Transportation may subject the offeror, its 
subcontractors, its employees, or its representatives to: (1) 
prosecution for false statements pursuant to 18 U.S.C. 1001 and/or; (2) 
enforcement action for false claims or statements pursuant to the 
Program Fraud Civil Remedies Act of 1986, 31 U.S.C. 3801-2812 and 49 CFR 
part 31 and/or; (3) termination for default under any contract resulting 
from its offer and/or; (4) debarment or suspension.
    (c) The offeror agrees to obtain a similar certification from its 
subcontractors.

Signature:______________________________________________________________

Date:___________________________________________________________________

Typed Name and Title:___________________________________________________

Company Name:___________________________________________________________

    This certification concerns a matter within the jurisdiction of an 
agency of the United States and the making of a false, fictitious, or 
fraudulent certification may render the maker subject to prosecution 
under Title 18, United States Code, Section 1001.

                           (End of provision)

[61 FR 392, Jan. 5, 1996]



1252.237-72  Prohibition on advertising.

    As prescribed in (TAR) 48 CFR 1213.7002 and 1237.7003, insert the 
following clause:

                  Prohibition on Advertising (JAN 1996)

    The contractor or its representatives (including training 
instructors) shall not advertise or solicit business from attendees for 
private, non-Government training during contracted-for training 
sessions. This prohibition extends to unsolicited oral comments, 
distribution or sales of written materials, and/or sales of promotional 
videos or audio tapes.
    The contractor agrees to insert this clause in its subcontracts.

                             (End of clause)

[61 FR 392, Jan. 5, 1996]



1252.237-90  Requirements. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                         Requirements (OCT 1994)

    (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--

________________________________________________________________________
________________________________________________________________________

                             (End of clause)

[64 FR 2439, Jan. 14, 1999]



1252.237-91  Area of performance. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

[[Page 607]]

                     Area of Performance (OCT 1994)

    (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 elsewhere. If the Contracting 
Officer requires the Contractor to transport the remains into the area 
of performance, 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 point where located to the boundary of the 
area of performance.
    (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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-92  Performance and delivery. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                   Performance and Delivery (OCT 1994)

    (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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-93  Subcontracting. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                        Subcontracting (OCT 1994)

    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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-94  Termination for default. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                   Termination for Default (OCT 1994)

    (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 Transportation 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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]

[[Page 608]]



1252.237-95  Group interment. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                       Group Interment (OCT 1994)

    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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-96  Permits. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                           Permits (OCT 1994)

    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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-97  Facility requirements. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                    Facility Requirements (OCT 1994)

    (a) The Contractor's building shall have complete facilities for 
maintaining the highest standards for 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 obtain the necessary 
items (e.g. catafalques, structures, trucks, equipment) for religious 
services.
    (d) The Contractor's funeral home, furnishings, grounds, and 
surrounding area shall present a clean and well-kept appearance.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-98  Preparation history. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following clause:

                     Preparation History (OCT 1994)

    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.

                             (End of clause)

[64 FR 2440, Jan. 14, 1999]



1252.237-99  Award to single offeror. (USCG)

    As prescribed in USCG guidance at (TAR) 48 CFR 1237.9000, insert the 
following provision:

                   Award to Single Offeror (OCT 1994)

    (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.

                           (End of provision)

    Alternate I (OCT 1994) If mortuary services are procured by 
negotiations, 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.

[64 FR 2440, Jan. 14, 1999]



1252.242-70  Dissemination of information--educational institutions.

    As prescribed in (TAR) 48 CFR 1242.203-70(a), insert the following 
clause:

    Dissemination of Information--Educational Institutions (OCT 1994)

    (a) The Department of Transportation (DOT) desires widespread 
dissemination of the results of funded transportation research. The 
Contractor, therefore, may publish (subject to the provisions of the 
``Data Rights'' and ``Patent Rights'' clauses of the contract) research 
results in professional

[[Page 609]]

journals, books, trade publications, or other appropriate media (a 
thesis or collection of theses should not be used to distribute results 
because dissemination will not be sufficiently widespread). All costs of 
publication pursuant to this clause shall be borne by the Contractor and 
shall not be charged to the Government under this or any other Federal 
contract.
    (b) Any copy of material published under this clause must contain 
acknowledgment of DOT's sponsorship of the research effort and a 
disclaimer stating that the published material represents the position 
of the author(s) and not necessarily that of DOT. Articles for 
publication or papers to be presented to professional societies do not 
require the authorization of the Contracting Officer prior to release. 
However, two copies of each article shall be transmitted to the 
Contracting Officer at least two weeks prior to release or publication.
    (c) Press releases concerning the results or conclusions from the 
research under this contract shall not be made or otherwise distributed 
to the public without prior written approval of the Contracting Officer.
    (d) Publication under the terms of this clause does not release the 
Contractor from the obligation of preparing and submitting to the 
Contracting Officer a final report containing the findings and results 
of research, as set forth in the schedule of the contract.

                             (End of clause)



1252.242-71  Contractor testimony.

    As prescribed in (TAR) 48 CFR 1242.203-70(b), insert the following 
clause:

                     Contractor Testimony (OCT 1994)

    All requests for the testimony of the Contractor or its employees, 
and any intention to testify as an expert witness relating to: (a) any 
work required by, and/or performed under, this contract; or (b) any 
information provided by any party to assist the Contractor in the 
performance of this contract, shall be immediately reported to the 
Contracting Officer. Neither the Contractor nor its employees shall 
testify on a matter related to work performed or information provided 
under this contract, either voluntarily or pursuant to a request, in any 
judicial or administrative proceeding unless approved by the Contracting 
Officer or required by a judge in a final court order.

                             (End of clause)



1252.242-72  Dissemination of contract information.

    As prescribed in (TAR) 48 CFR 1242.203-70(c), insert the following 
clause:

            Dissemination of Contract Information (OCT 1994)

    The Contractor shall not publish, permit to be published, or 
distribute for public consumption, any information, oral or written, 
concerning the results or conclusions made pursuant to the performance 
of this contract, without the prior written consent of the Contracting 
Officer. Two copies of any material proposed to be published or 
distributed shall be submitted to the Contracting Officer.

                             (End of clause)



1252.242-73  Contracting officer's technical representative.

    As prescribed in (TAR) 48 CFR 1242.7000, insert the following 
clause:

        Contracting Officer's Technical Representative (OCT 1994)

    (a) The Contracting Officer may designate Government personnel to 
act as the Contracting Officer's Technical Representative (COTR) to 
perform functions under the contract such as review and/or inspection 
and acceptance of supplies, services, including construction, and other 
functions of a technical nature. The Contracting Officer will provide a 
written notice of such designation to the Contractor within five working 
days after contract award or for construction, not less than five 
working days prior to giving the contractor the notice to proceed. The 
designation letter will set forth the authorities and limitations of the 
COTR under the contract.
    (b) The Contracting Officer cannot authorize the COTR or any other 
representative to sign documents (i.e., contracts, contract 
modifications, etc.) that require the signature of the Contracting 
Officer.

                             (End of clause)



1252.245-70  Government property reports.

    As prescribed in (TAR) 48 CFR 1245.505-70, insert the following 
clause:

                 Government Property Reports (OCT 1994)

    (a) The Contractor shall prepare an annual report of Government 
property in its possession and the possession of its subcontractors.

[[Page 610]]

    (b) The report shall be submitted to the Contracting Officer not 
later than September 15 of each calendar year on Form DOT F 4220.43, 
Contractor Report of Government Property.

                             (End of clause)



1252.247-70  Acceptable service at reduced rates.

    As prescribed in (TAR) 48 CFR 1247.104-370, insert the following 
clause:

             Acceptable Service at Reduced Rates (OCT 1994)

    The Contractor is to use carriers that offer acceptable service at 
reduced rates, if available, to transport supplies under this contract.

                             (End of clause)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-71  F.o.b. origin information.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

                  F.O.B. Origin Information (OCT 1994)

    The offeror shall furnish information with the offer:
    (a) Location of the offeror's actual shipping point(s) (street 
address, city, state, and zip code) from which supplies will be 
delivered to the Government;
    (b) Whether the offered shipping point has a private railroad 
siding, and the name of the rail carrier serving it;
    (c) When the offered shipping point does not have a private siding, 
the names and addresses of the nearest public rail siding and of the 
carrier serving it; and
    (d) The quantity of supplies to be shipped from each shipping point.

                           (End of provision)

    Alternate I (OCT 1994) If delivery is ``f.o.b. origin, contractor's 
facility,'' and the designated facility is not covered by the line-haul 
transportation rate, add the following paragraph to the basic provision:

    (e) The charges required to deliver the shipment to the point where 
the line-haul rate is applicable.

    Alternate II (OCT 1994) When delivery is ``f.o.b. origin, freight 
allowed,'' add the following paragraph to the basic provision:

    (e) The basis on which transportation charges will be allowed, 
including the origin and destination from and to which transportation 
charges will be allowed.

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-72  F.o.b. origin only.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

                      F.O.B. Origin Only (OCT 1994)

    Offers are invited on the basis of f.o.b. origin only. Offers 
submitted on any other basis will be rejected as nonresponsive.

                           (End of provision)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-73  F.o.b. destination only.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

                   F.O.B. Destination Only (OCT 1994)

    Offers are invited on the basis of f.o.b. destination only. Offers 
submitted on any other basis will be rejected as nonresponsive.

                           (End of provision)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-74  Shipments to ports and air terminals.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

             Shipments to Ports and Air Terminals (OCT 1994)

    The Offeror shall furnish the following information with the offer:
    (a) A delivery schedule in number of units and/or long or short 
tons;
    (b) Maximum quantities available per shipment; and
    (c) Other data appropriate to shipment by air carrier.

                           (End of provision)

    Alternate I (OCT 1994) When the delivery term is ``ex dock, pier or 
warehouse, port of importation'' or ``c.& f. destination,'' substitute 
the following paragraph (c) for the paragraph (c) of the basic 
provision:


[[Page 611]]


    (c) The number of containers or units that can be loaded in a car, 
truck, or other conveyance of the size normally used (specify type and 
size) for the commodity.

    Alternate II (OCT 1994) When the delivery term is ``f.a.s. vessel, 
port of shipment,'' ``f.o.b. vessel, port of shipment,'' or ``f.o.b. 
inland carrier, point of exportation,'' substitute the following 
paragraphs (c), (d) and (e) for the paragraph (c) of the basic 
provision:

    (c) The quantity that can be made available for loading to vessel 
per running day of 24 hours (if acquisition involves a commodity to be 
shipped in bulk);
    (d) The minimum leadtime required to make supplies available for 
loading to vessel; and
    (e) The port and pier or other designation and, when applicable, the 
maximum draft of vessel (in feet) that can be accommodated.

    Alternate III (OCT 1994) When the delivery term is ``c.i.f. 
destination,'' substitute the following paragraphs (c) and (d) for the 
paragraph (c) of the basic provision:

    (c) The number of containers or units that can be loaded in a car, 
truck, or other conveyance of the size normally used (specify type and 
size) for the commodity; and
    (d) The amount and type of marine insurance coverage; e.g., whether 
the coverage is ``With Average'' or ``Free of Particular Average'' and 
whether it covers any special risks or excludes any of the usual risks 
associated with the specific commodity involved.

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-75  F.o.b. designated air carrier's terminal, point of exportation.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

  F.O.B. Designated Air Carrier's Terminal, Point of Exportation (OCT 
                                  1994)

    The Offeror shall furnish the following information with the offer:
    (a) A delivery schedule in number of units, type of package, and 
individual weight and dimensions of each package;
    (b) Minimum leadtime required to make supplies available for loading 
into aircraft;
    (c) Name of airport and location to which shipment will be 
delivered; and
    (d) Other data appropriate to shipment by air carrier.

                           (End of provision)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-76  Nomination of additional ports.

    As prescribed in (TAR) 48 CFR 1247.305-70, insert the following 
provision:

                Nomination of Additional Ports (OCT 1994)

    (a) Offerors may nominate additional ports (including ports in 
Alaska and Hawaii) more favorably located to their shipping points; and
    (b) These ports will be considered in the evaluation of offers if 
they possess all requisite capabilities of the listed ports in relation 
to the supplies being acquired.

                           (End of provision)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]



1252.247-77  Supply movement in the Defense Transportation System.

    As prescribed in (TAR) 48 CFR 1247.305-71, insert the following 
clause:

     Supply Movement in the Defense Transportation System (OCT 1994)

    (a) The Contractor shall dispatch a Transportation Control Movement 
Document (TCMD) to the appropriate DOD air or water clearance authority 
in accordance with MILSTAMP procedures for all shipments consigned to 
DOD air or water terminal transshipment points; and
    (b) An Export Release must be obtained for supplies to be 
transshipped via a water port of loading to overseas destination, except 
for shipments for which an Export Release is not required, generally 
shipments of less than 10,000 pounds, (see paragraph 202024 of the 
Military Traffic Management Regulation, AR 55-355, NAVSUP 4600.70, MCO 
4600.14A, AFM 75-2, DLAR 4500.3).

                             (End of clause)

[59 FR 40288, Aug. 8, 1994. Redesignated at 61 FR 50250, Sept. 25, 
1996.]

[[Page 612]]

                          Appendix to Part 1252
[GRAPHIC] [TIFF OMITTED] TR14JA99.000


[[Page 613]]


[GRAPHIC] [TIFF OMITTED] TR14JA99.001


[[Page 614]]


[GRAPHIC] [TIFF OMITTED] TR14JA99.002


[[Page 615]]


[GRAPHIC] [TIFF OMITTED] TR14JA99.003


[64 FR 2442, Jan. 14, 1999]



PART 1253_FORMS--Table of Contents




                  Subpart 1253.2_Prescription of Forms

Sec.
1253.204 Administrative matters.
1253.222 Application of labor laws to Government acquisitions.
1253.227-70 Conveyance of invention rights acquired by the Government.
1253.245-70 Report of Government property.

[[Page 616]]

                  Subpart 1253.3_Illustration of Forms

1253.303 Agency forms.

Appendix to Subpart 1253.3
Contractor's Release.
Employee Claim for Wage Restitution.
Contractor Report of Government Property.
Contractor's Assignment of Refunds, Rebates, Credits, and Other Amounts.
Cumulative Claim and Reconciliation Statement.
Report of Inventions and Subcontracts.

    Authority: 5 U.S.C. 301; 41 U.S.C. 418(b); 48 CFR 3.1.

    Source: 59 FR 40299, Aug. 8, 1994, unless otherwise noted.



                  Subpart 1253.2_Prescription of Forms



1253.204  Administrative matters.

    The following forms are prescribed for use in the closeout of 
applicable contracts, as specified in (TAR) 48 CFR 1204.804-570:
    (a) Form DOT F 4220.4, Contractor's Release. (See (TAR) 48 CFR 
1204.804-570.) Form DOT F 4220.4 is authorized for local reproduction 
and a copy is furnished for this purpose in Part 1253 of the loose-leaf 
edition of the (TAR) 48 CFR chapter 12.
    (b) Form DOT F 4220.45, Contractor's Assignment of Refunds, Rebates, 
Credits, and Other Amounts. (See (TAR) 48 CFR 1204.804-570.) Form DOT F 
4220.45 is authorized for local reproduction and a copy is furnished for 
this purpose in Part 1253 of the loose-leaf edition of the (TAR) 48 CFR 
chapter 12.
    (c) Form DOT F 4220.46, Cumulative Claim and Reconciliation 
Statement. (See (TAR) 48 CFR 1204.804-570.) Form DOT F 4220.46 is 
authorized for local reproduction and a copy is furnished for this 
purpose in Part 1253 of the loose-leaf edition of the (TAR) 48 CFR 
chapter 12.
    (d) DD Form 882, Report of Inventions and Subcontracts. (See (TAR) 
48 CFR 1204.804-570.) DD Form 882 is authorized for local reproduction 
and a copy is furnished for this purpose in Part 1253 of the loose-leaf 
edition of the (TAR) 48 CFR chapter 12.



1253.222  Application of labor laws to Government acquisitions.

    The following form is prescribed for use in connection with the 
application of labor laws, as specified in (TAR) 48 CFR 1222.406-9:
    Form DOT F 4220.7, Employee Claim for Wage Restitution. (See (TAR) 
48 CFR 1222.406-9(c)(1).) Form DOT F 4220.7 is authorized for local 
reproduction and a copy is furnished for this purpose in Part 1253 of 
the loose-leaf edition of the (TAR) 48 CFR chapter 12.



1253.227-70  Conveyance of invention rights acquired by the Government.

    The following form is prescribed for including a means for 
contractors to report inventions made in the course of contract 
performance, as specified in 1227.305-4:
    DD Form 882, Report of Inventions and Subcontracts. (See (TAR) 48 
CFR 1227.305-4.) DD Form 882 is authorized for local reproduction and a 
copy is furnished for this purpose in Part 1253 of the loose-leaf 
edition of the (TAR) 48 CFR chapter 12.



1253.245-70  Report of Government property.

    The following form is prescribed for use by contractors to report 
Government property, as specified in (TAR) 48 CFR 1245.505-14:
    Form DOT F 4220.43, Contractor Report of Government Property. (See 
(TAR) 48 CFR 1245.505-14.) Form DOT F 4220.43 is authorized for local 
reproduction and a copy is furnished for this purpose in Part 1253 of 
the loose-leaf edition of the (TAR) 48 CFR chapter 12.



                  Subpart 1253.3_Illustration of Forms



1253.303  Agency forms.

    This subpart contains illustrations of DOT and other agency forms 
specified by the TAR for use in DOT acquisitions.

[[Page 617]]

                       Appendix to Subpart 1253.3
[GRAPHIC] [TIFF OMITTED] TR14MY97.007


[[Page 618]]


[GRAPHIC] [TIFF OMITTED] TC02MR91.003


[[Page 619]]


[GRAPHIC] [TIFF OMITTED] TR14MY97.008


[[Page 620]]


[GRAPHIC] [TIFF OMITTED] TR14MY97.009


[[Page 621]]


[GRAPHIC] [TIFF OMITTED] TR14MY97.010


[[Page 622]]


[GRAPHIC] [TIFF OMITTED] TC02MR91.009


[[Page 623]]


[GRAPHIC] [TIFF OMITTED] TC02MR91.010


[59 FR 40299, Aug. 8, 1994, as amended at 60 FR 55802, Nov. 3, 1995; 61 
FR 393, Jan. 5, 1996; 61 FR 50251, Sept. 25, 1996; 62 FR 26421, May 14, 
1997; 62 FR 67752, Dec. 30, 1997; 64 FR 2445, Jan. 14, 1999]

[[Page 625]]



                   CHAPTER 13--DEPARTMENT OF COMMERCE




                          (Parts 1300 to 1399)

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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
1301            General.....................................         627
1302            [Reserved]
1303            Improper business practices and personal 
                    conflicts of interest...................         628
1304            [Reserved]

           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
1305-1308        [Reserved]
1309            Contractor qualifications...................         630
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
1313            Small purchase and other simplified purchase 
                    procedures..............................         632
1314             [Reserved]
1315            Contracting by negotiation..................         632
1316            Types of contracts..........................         634
1317            Special contracting methods.................         634
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
1319            Small business and small disadvantaged 
                    business concerns.......................         636
1322-1325       [Reserved]

             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
1331            [Reserved]
1332            Contract financing..........................         637
1333            Protests, disputes, and appeals.............         637
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
1334            [Reserved]
1336            Construction and architect-engineer 
                    contracts...............................         642

[[Page 626]]

1337            [Reserved]

                    SUBCHAPTER G--CONTRACT MANAGEMENT
1342            Contract administration.....................         643
1345            [Reserved]
1349            Termination of contracts....................         643
                     SUBCHAPTER H--CLAUSES AND FORMS
1352            Solicitation provisions and contract clauses         645
1353            Forms.......................................         657

[[Page 627]]



                          SUBCHAPTER A_GENERAL





PART 1301_GENERAL--Table of Contents




               Subpart 1301.1_Purpose, Authority, Issuance

Sec.
1301.100 Scope of subpart.
1301.101 Purpose.
1301.102 Authority.
1301.103 Applicability.
1301.104 Issuance.
1301.104-1 Publication and code arrangement.
1301.104-2 Arrangement of regulations.
1301.104-3 Copies.

Subparts 1301.2-1301.5 [Reserved]

        Subpart 1301.6_Contracting Authority and Responsibilities

1301.603-70 Ratification of unauthorized contract awards.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486 (c)), as delegated by the Secretary of 
Commerce in Department Organization Order 10-5 and Department 
Administrative Order 208-2.

    Source: 49 FR 12956, Mar. 30, 1984, unless otherwise noted.



               Subpart 1301.1_Purpose, Authority, Issuance



1301.100  Scope of subpart.

    This subpart states the relationship of the Commerce Acquisition 
Regulation (CAR) to the Federal Acquisition Regulation (FAR). This 
subpart also explains the purpose, authority and issuance of the CAR.



1301.101  Purpose.

    (a) Chapter 13 of Title 48 of the Code of Federal Regulations shall 
be known as the Commerce Acquisition Regulation (CAR).
    (b) The purpose of the CAR is to implement and supplement the FAR 
within the Department of Commerce. Since the CAR is intended to 
supplement and implement the FAR without paraphrasing or duplicating FAR 
language, the CAR should be read in relation to the FAR.

[49 FR 12956, Mar. 30, 1984, as amended at 51 FR 15329, Apr. 23, 1986]



1301.102  Authority.

    The CAR is prescribed by the Department Procurement Executive 
pursuant to a delegation initiating from the Secretary of Commerce in 
accordance with the Federal Property and Administrative Services Act of 
1949, as amended, and other applicable law and regulation.



1301.103  Applicability.

    The FAR and CAR apply to all acquisitions within the Department of 
Commerce.



1301.104  Issuance.



1301.104-1  Publication and code arrangement.

    (a) The CAR is published in (1) daily issues of the Federal 
Register, (2) cumulative form in the Code of Federal Regulations (CFR), 
and (3) a separate loose-leaf edition.
    (b) The CAR is issued as chapter 13 of title 48 of the CFR.



1301.104-2  Arrangement of regulations.

    (a) General. The CAR is divided into the same parts, subparts, 
sections, subsections and paragraphs as the FAR. When FAR coverage is 
adequate by itself, there will be no corresponding CAR coverage.
    (b) Numbering. Where the CAR implements the FAR, the CAR part, 
subpart, section or further subdivision will be numbered the same as the 
corresponding FAR part, subpart, section, or further subdivision except 
that the CAR implementation will be preceded by a 13 or 130 so that 
there are four numbers to the left of the first decimal. Where the CAR 
supplements the FAR, supplementing material will be assigned the number 
70 and above. The placement of the sequence of 70 numbers in relation to 
the decimal point will depend on what division of the FAR is 
supplemented.

[[Page 628]]

    (c) References and citations. (2) This regulation may be referred to 
as the Commerce Acquisition Regulation (CAR).
    (3) References to FAR materials will include FAR and the identifying 
number, for example, FAR 1.402. Reference to CAR materials will consist 
of the identifying number, for example 1301.402.



1301.104-3  Copies.

    (a) Copies of the CAR in Federal Register or CFR form may be 
purchased from the Superintendent of Documents, Government Printing 
Office (GPO), Washington, DC 20402. Requests should reference the CAR as 
chapter 13 of title 48 of the Code of Federal Regulations.
    (b) Loose-leaf copies of the CAR are distributed within the 
Department by the Procurement Executive.

[49 FR 12956, Mar. 30, 1984, as amended at 51 FR 15329, Apr. 23, 1986]

Subparts 1301.2-1301.5 [Reserved]



        Subpart 1301.6_Contracting Authority and Responsibilities



1301.603-70  Ratification of unauthorized contract awards.

    (a) The Department is not bound by any formal or informal type of 
agreement or contractual commitment which is made by persons who are not 
delegated contracting authority. When these unauthorized acts are 
discovered they shall be immediately reported to the Head of the 
Contracting Activity concerned. The Head of the Contracting Activity 
shall:
    (1) Immediately inform any person who is performing work as a result 
of an unauthorized commitment that the work is being performed at that 
person's risk;
    (2) Decide whether ratification of the unauthorized act is proper, 
and take appropriate action.

[49 FR 12956, Mar. 30, 1984, as amended at 60 FR 47309, Sept. 12, 1995]

                          PART 1302 [RESERVED]



PART 1303_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 1303.1_Safeguards

Sec.
1303.101-3 Agency regulations.

      Subpart 1303.2_Contractor Gratuities to Government Personnel

1303.203 Reporting procedures.

    Subpart 1303.3_Reports of Identical Bids and Suspected Antitrust 
                               Violations

1303.302-70 Reporting requirements.

                     Subpart 1303.4_Contingent Fees

1303.409 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

            Subpart 1303.5_Other Improper Business Practices

1303.502 Subcontractor kickbacks.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12959, Mar. 30, 1984, unless otherwise noted.



                        Subpart 1303.1_Safeguards



1303.101-3  Agency regulations.

    The agency rules implementing Executive Order 11222 are contained in 
the Department Administrative Order on Employee Responsibilities and 
Conduct (DAO 202-735).



      Subpart 1303.2_Contractor Gratuities to Government Personnel



1303.203  Reporting procedures.

    Suspected violations of the Gratuities clause shall be reported to 
the head of the contracting office in writing detailing the 
circumstances. The head of the contracting office will evaluate the 
report and if the allegations appear to support a violation the matter 
will be referred to the Office of Inspector General in accordance with 
the Department Administrative Order

[[Page 629]]

on Inspector General Investigations (DAO 207-10).



    Subpart 1303.3_Reports of Identical Bids and Suspected Antitrust 
                               Violations



1303.302-70  Reporting requirements.

    (a) Executive Order 12430 revoked the requirement of Executive Order 
10936 to submit a report to the Attorney General on identical bids.
    (b) Suspected anti-competitive practices and antitrust law 
violations as described in FAR 3.301 and FAR 3.303 shall be reported to 
the general counsel through the Head of the Contracting Activity. A copy 
of the report shall be sent to the Procurement Executive concurrently 
with the submission to the general counsel.



                     Subpart 1303.4_Contingent Fees



1303.409  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    Suspected violations of the Covenant Against Contingent Fees shall 
be reported to the Office of Inspector General in accordance with the 
Department Administrative Order on Inspector General Investigations (DAO 
207-10).



            Subpart 1303.5_Other Improper Business Practices



1303.502  Subcontractor kickbacks.

    Suspected violations of the Anti-Kickback Act shall be reported to 
the Office of Inspector General in accordance with the Department 
Administrative Order on Inspector General Investigations (DAO 207-10).

                          PART 1304 [RESERVED]

[[Page 630]]



            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING



                       PARTS 1305-1308 [RESERVED]



PART 1309_CONTRACTOR QUALIFICATIONS--Table of Contents




           Subpart 1309.1_Responsible Prospective Contractors

Sec.
1309.106 Preaward surveys.
1309.106-70 Preaward surveys for ship construction, ship alteration, and 
          ship repair.

         Subpart 1309.4_Debarment, Suspension and Ineligibility

1309.470-4 Procedures on debarment.
1309.470-7 Procedures on suspension.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12960, Mar. 30, 1984, unless otherwise noted.



           Subpart 1309.1_Responsible Prospective Contractors



1309.106  Preaward surveys.

[51 FR 15330, Apr. 23, 1986]



1309.106-70  Preaward surveys for ship construction, ship alteration, and 
ship repair.

    (a) General. The contracting officer shall request a preaward survey 
of a prospective contractor for contracts involving ship construction, 
ship alteration, or ship repair, where the cost or price of the contract 
is anticipated to be in excess of $100,000, and the information on hand 
is not sufficient to make a determination regarding responsibility. The 
contracting officer may request a preaward survey of a prospective 
contractor for contracts involving ship construction, ship alteration, 
or ship repair, where the cost or price of the contract is anticipated 
to be $100,000 or less, if the circumstances justify the cost of the 
survey.
    (b) Extent of preaward survey. The contracting officer shall 
determine the manner and extent of the preaward survey based upon the 
specific requirements of the contract. At a minimum, the contracting 
officer shall request a preaward survey for contracts involving ship 
construction, ship alteration, and ship repair where the contracting 
officer cannot affirmatively determine that the prospective contractor's 
facility is adequate for the work to be performed. For the purpose of 
this section, the prospective contractor's facility includes the land, 
buildings, shop spaces, dock facilities, drydock or marine railways, and 
plant security and safety.
    (c) Examples of specific concern. The contracting officer shall 
coordinate efforts with technical and requirements personnel to identify 
areas of specific concern for the preaward survey. The following 
examples illustrate areas which may be of specific concern to the 
preaward survey team, depending on the nature of the work to be 
performed:
    (1) Acceptable facilities and equipment for special production 
techniques (e.g., unique welding procedures, special test fixtures, or 
production equipment);
    (2) Adequate size and lift capacity for the drydock or marine 
railway;
    (3) Well maintained drydock and lifting equipment and acceptable 
preventative maintenance of these items;
    (4) Acceptable dock master and crew who are experienced in operating 
the equipment and lifting a vessel of comparable size and weight;
    (5) Adequate drydock or pier utilities to support the vessel, 
including electrical power, steam, potable water, fire fighting 
capability, sewage disposal, and telephone service;
    (6) Responsible subcontractors;
    (7) Contractor's demonstrated ability to monitor and coordinate 
subcontractor performance;
    (8) Contractor's demonstrated ability to conduct dock and sea 
trials;
    (9) Contractor's demonstrated ability to protect the vessel and yard 
and vessel personnel, including safety and security programs or 
individual plans;

[[Page 631]]

    (10) Adequate secure storage facilities for Government property; and
    (11) The depth of water in the navigable waterway and the pier where 
the vessel will be berthed.
    (d) Preaward survey team. The contracting officer may use any of the 
following individuals to form the preaward survey team:
    (1) A cost or price analyst or cognizant audit agency for review of 
the contractor's financial and accounting systems;
    (2) Technical or requirements personnel from the cognizant marine 
center or office of marine operations, for technical, production, or 
quality assurance evaluations; and
    (3) Representatives of the contracting officer for management and 
administrative evaluations.
    (e) On-site survey. If it is necessary to conduct a survey at the 
proposed site where the work is to be performed, the contracting officer 
shall coordinate the visit with the prospective contractor or 
subcontractor.
    (f) Reports. The surveying team shall comply with the applicable 
reporting requirements of FAR 9.106-4. When using the short-form 
preaward survey report prescribed in FAR 9.106-4(d), the surveying team 
shall provide information on the following at a minimum:
    (1) The depth of water in the navigable waterway and the pier where 
the vessel will be berthed;
    (2) The condition of the drydock or marine railway where the work is 
to be performed;
    (3) Availability of adequate utilities and services for the vessel;
    (4) Evidence of prospective contractor or subcontractor financial 
problems or poor past performance.
    (g) Contracting officer determination. Upon completion of the 
preaward survey, the contracting officer shall determine whether the 
prospective contractor and subcontractors are responsible.

[51 FR 15330, Apr. 23, 1986]



         Subpart 1309.4_Debarment, Suspension and Ineligibility



1309.470-4  Procedures on debarment.

    Decision making process. Upon receipt of a debarment recommendation, 
the Procurement Executive shall review all available evidence and shall 
promptly determine whether or not to proceed with debarment. The 
Procurement Executive may refer the matter to the Office of Inspector 
General for further investigation. After completion of any additional 
review or investigations, the Procurement Executive shall make a written 
determination. A copy of this determination shall be promptly sent to 
the initiating contracting office. (See FAR 9.406-3(b).)

[60 FR 47309, Sept. 12, 1995]



1309.470-7  Procedures on suspension.

    Decision making process. Procedures for the decision making process 
of suspensions are the same as those contained in 1309.470-4 except that 
an initial decision for suspension results in immediate suspension. (See 
FAR 9.407-3(b).)

[60 FR 47309, Sept. 12, 1995]

[[Page 632]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 1313_SMALL PURCHASE AND OTHER SIMPLIFIED PURCHASE PROCEDURES
--Table of Contents




    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.



                         Subpart 1313.1_General



1313.106-70  Technical evaluation and written or oral discussion procedure 
for negotiated small purchases.

    (a) Technical evaluation. A technical evaluation may be requested 
for negotiated small purchases, at the discretion of the contracting 
officer. The manner and extent of the technical evaluation shall be 
determined by the contracting officer, except that the technical 
evaluation shall not be as formal or as extensive as required for 
procurements above the small purchase dollar threshold.
    (b) Written or oral discussions. Written or oral discussions may be 
conducted with all qualified sources which submit quotations for 
negotiated small purchases. The contracting officer shall determine the 
manner, extent, and need for written or oral discussions, except that 
discussions shall not be as formal or as extensive as required for 
procurements above the small purchase dollar threshold.

[49 FR 12961, Mar. 30, 1984]

                          PART 1314 [RESERVED]



PART 1315_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 1315.4_Solicitation and Receipt of Proposals and Quotations

Sec.
1315.413-2 Alternate II.

                  Subpart 1315.5_Unsolicited Proposals

1315.504 Advance guidance.
1315.506 Agency procedures.

Subpart 1315.6 [Reserved]

                    Subpart 1315.8_Price Negotiation

1315.805-70 Audit as an aid in proposal analysis.

                          Subpart 1315.9_Profit

1315.902 Policy.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12961, Mar. 30, 1984, unless otherwise noted.



   Subpart 1315.4_Solicitation and Receipt of Proposals and Quotations



1315.413-2  Alternate II.

    The procedures described in FAR 15.413-2 may be used if approved by 
the Head of the Contracting Activity or designee.



                  Subpart 1315.5_Unsolicited Proposals



1315.504  Advance guidance.

    (a) When it appears that a person or firm is interested in making a 
proposal, that person or firm should be referred to the head of the 
contracting office concerned who will provide instructions for 
submission of an unsolicited proposal.
    (b) Heads of contracting offices shall provide instructions for 
submission of unsolicited proposals to each person or firm which 
expresses an interest in submitting an unsolicited proposal.

[49 FR 12961, Mar. 30, 1984, as amended at 60 FR 47309, Sept. 12, 1995]

[[Page 633]]



1315.506  Agency procedures.

    (a) Promptly after receipt of an unsolicited proposal which conforms 
to this regulation, the head of the contracting office shall forward a 
copy of the proposal along with instructions for technical evaluation of 
unsolicited proposals to the appropriate program office for technical 
evaluation. If more than one Department activity has an interest in a 
proposal, copies of the proposal shall be circulated to each interested 
office.
    (b) Program offices receiving unsolicited proposals for evaluation 
shall conduct the evaluation in accordance with this subpart 1315.5, FAR 
Subpart 15.5, and any additional guidance provided by the Office of 
Procurement and Federal Assistance.
    (c) Program offices shall complete the recommendation and 
evaluations and submit them along with all copies of the unsolicited 
proposal, and a written justification for a noncompetitive procurement 
action if appropriate, to the head of the appropriate contracting office 
within 60 days of receipt of a proposal for evaluation.
    (d) No part of an unsolicited proposal shall be duplicated or 
circulated outside of the evaluation office. Each unsolicited proposal 
shall be closely safeguarded to prevent disclosure of any restricted 
data. Only heads of contracting offices or their designees may duplicate 
unsolicited proposals and then only to facilitate evaluation by more 
than one technical evaluation office.

[49 FR 12961, Mar. 30, 1984, as amended at 60 FR 47309, Sept. 12, 1995]

Subpart 1315.6 [Reserved]



                    Subpart 1315.8_Price Negotiation



1315.805-70  Audit as an aid in proposal analysis.

    (a) Preaward audits should not be routinely requested for actions 
below the dollar threshold specified in FAR 15.805-5. Before requesting 
audits below the dollar threshold, the contracting office should 
consider using price or cost analysis techniques, recent audit reports, 
price negotiation memoranda, and other relevant information regarding 
the offer to establish the reasonableness of price. However, audits 
should be considered for proposals below the specified dollar thresholds 
in the following circumstances:
    (1) The contracting officer has reason to doubt the adequacy of the 
contractor's accounting policies or cost systems;
    (2) The contractor has substantially changed its methods or levels 
of operation;
    (3) Previous unfavorable experience indicates that the contractor's 
estimating, accounting, or purchasing methods may be unreliable; or
    (4) The proposal concerns a new product for which cost experience is 
lacking.

[49 FR 12961, Mar. 30, 1984, as amended at 60 FR 47309, Sept. 12, 1995]



                          Subpart 1315.9_Profit



1315.902  Policy.

    (a) Except as provided in (b) and (c) of this section, a structured 
approach for determining profit or fee prenegotiation objectives shall 
be used in the negotiation of all contracts, subcontracts, and contract 
modifications above $100,000 where adequate price competition does not 
exist. A structured approach for determining profit or fee 
prenegotiation objectives may be used at lower dollar thresholds.
    (b) Regardless of whether price competition exists, the structured 
approach for determining profit or fee prenegotiation objectives is not 
required for negotiation of contracts, subcontracts, and contract 
modifications for the following:
    (1) Architect--engineering contracts;
    (2) Management contracts for operation or maintenance of Government 
facilities;
    (3) Construction contracts;
    (4) Contracts primarily requiring delivery of material supplied by 
subcontractors;
    (5) Termination settlements;
    (6) Cost-plus-award-fee contracts; and
    (7) Unusual pricing situations where the structured approach has 
been determined to be unsuitable. This exception must be justified in 
writing and signed by the head of the contracting office.

[[Page 634]]

    (c) In many circumstances, an examination of cost and profits is not 
required. Where adequate price competition exists and in other 
situations where cost analysis is not required (e.g., established 
catalog or market prices of commercial items sold in substantial 
quantities to the general public or prices set by law or regulation), 
contracts may be awarded without regard to the amount of profit 
involved.
    (d) Additional internal instruction on the use of the structured 
approach can be found in Procurement Letters or policy manuals issued by 
the Office of Procurement and Federal Assistance.



PART 1316_TYPES OF CONTRACTS--Table of Contents




Subpart 1316.3 [Reserved]

                   Subpart 1316.4_Incentive Contracts

Sec.
1316.404-2 Cost-plus-award-fee contracts.

Subpart 1316.6 [Reserved]

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12962, Mar. 30, 1984, unless otherwise noted.

Subpart 1316.3 [Reserved]



                   Subpart 1316.4_Incentive Contracts



1316.404-2  Cost-plus-award-fee contracts.

    (d) Fee determination plans. The award fee determination plan shall 
include both technical performance (including scheduling as appropriate) 
and business management consideration tailored to the needs of the 
particular situation. The goals and evaluation criteria should be 
results-oriented. The award fee should concentrate on the end product of 
the contract. However, equal employment opportunity, small business 
programs, and functional management areas, such as safety and security, 
cannot be disregarded and may be appropriately part of the criteria upon 
which to base the award fee. Specific goals or objectives should be 
established in relation to each performance evaluation criterion against 
which contractor performance is measured.

Subpart 1316.6 [Reserved]



PART 1317_SPECIAL CONTRACTING METHODS--Table of Contents




Subparts 1317.4-1317.5 [Reserved]

 Subpart 1317.70_Contracts for Ship Construction, Ship Alteration, and 
                               Ship Repair

Sec.
1317.7001 Solicitation provisions and contract clauses.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

Subparts 1317.4-1317.5 [Reserved]



 Subpart 1317.70_Contracts for Ship Construction, Ship Alteration, and 
                               Ship Repair



1317.7001  Solicitation provisions and contract clauses.

    (a)(1) The contracting officer shall insert the following clauses in 
sealed bid fixed-price solicitations and contracts for ship 
construction, ship alteration, and ship repair.
    (i) Inspection and Manner of Doing Work, 1352.217-90.
    (ii) Delivery of the Vessel to the Contractor, 1352.217-91.
    (iii) Performance, 1352.217-92.
    (iv) Delays, 1352.217-93.
    (v) Minimization of Delay Due to Government Furnished Property, 
1352.217-94.
    (vi) Additional Provisions Relating to Government Property, 
1352.217-95.
    (vii) Liability and Insurance, 1352.217-96.
    (viii) Title, 1352.217-97.
    (ix) Discharge of Liens, 1352.217-98.
    (x) Department of Labor Occupational Safety and Health Standards for 
Ship Repairing, 1352.217-99.
    (xi) Regulations Governing Asbestos Work, 1352.217-100.

[[Page 635]]

    (xii) Complete and Final Equitable Adjustments, 1352.217-101.
    (xiii) Government Review, Comment, Acceptance, and Approval, 
1352.217-102.
    (xiv) Access to the Vessel, 1352.217-103.
    (xv) Documentation of Requests for Equitable Adjustment, 1352.217-
104.
    (xvi) Change Proposals, 1352.217-105.
    (xvii) Lay Days, 1352.217-106.
    (xviii) Changes--Ship Repair, 1352.217-107.
    (xix) Default--Ship Repair, 1352.217-108.
    (2) Unless inappropriate due to contract type, the contracting 
officer shall insert the clauses listed above in negotiated 
solicitations and contracts for ship construction, ship alteration, and 
ship repair.
    (b) The contracting officer shall insert a clause substantially the 
same as the clause at 1352.217-109, Insurance Requirements, in 
solicitations and contracts for ship construction, ship alteration, and 
ship repair, unless the contracting officer determines that the 
contract, or job order, requires work on parts of a vessel only and the 
work is to be performed at a plant other than the site of the vessel.
    (c) The contracting officer shall insert the clause at 1352.217-110, 
Guarantees, unless the contracting officer determines that its use would 
be inappropriate under the circumstances.
    (d) The contracting officer shall insert the clause at 1352.217-111, 
Temporary Services, in solicitations and contracts for ship 
construction, ship alteration, and ship repair, unless the contracting 
officer determines that its use would be inappropriate under the 
circumstances.
    (e) The contracting officer shall insert the provision at 1352.217-
112, Self-Insurance Information, in solicitations and contracts for ship 
construction, ship alteration, and ship repair, when the contracting 
officer determines that it is appropriate to allow offerors the 
opportunity to self-insure for any or all of the risks set forth in the 
applicable insurance clauses of the contract.

[52 FR 3807, Feb. 6, 1987]

[[Page 636]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 1319_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




                         Subpart 1319.2_Policies

Sec.
1319.202-2 Locating small business sources.

Subpart 1319.7--Subcontracting With Small Business and Small Disadvantaged 
Business Concerns [Reserved]

    Subpart 1319.70_Contracting Opportunities for Women-Owned Small 
                               Businesses

1319.7002 Source identification and solicitation.
1319.7003 Subcontracting opportunities.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.



                         Subpart 1319.2_Policies



1319.202-2  Locating small business sources.

    (b) The contracting officer shall send a copy of the requisition 
form for all procurement actions expected to exceed $500,000 ($1,000,000 
for construction) to the Office of Small and Disadvantaged Business 
Utilization, as promptly after receipt as possible. The Office of Small 
and Disadvantaged Business Utilization shall review the procurement 
actions and recommend action to the contracting officer. Orders under 
GSA schedule contracts, orders under Department or Government-wide 
indefinite delivery contracts, or actions within the scope of the 
changes, value engineering, or similar contract clauses are exempt from 
the requirements of this subsection.

[50 FR 19364, May 8, 1985, and 51 FR 1377, Jan. 13, 1986]

Subpart 1319.7--Subcontracting With Small Business and Small Disadvantaged 
Business Concerns [Reserved]



    Subpart 1319.70_Contracting Opportunities for Women-Owned Small 
                               Businesses

    Source: 51 FR 15331, Apr. 23, 1986, unless otherwise noted.



1319.7002  Source identification and solicitation.

    (a) The contracting officer shall include women-owned small 
businesses on the mailing list for each solicitation which is expected 
to result in an award in excess of the small purchase dollar threshold 
whenever there are women-owned small businesses known to be potential 
suppliers.

[51 FR 15331, Apr. 23, 1986, as amended at 60 FR 47310, Sept. 12, 1995]



1319.7003  Subcontracting opportunities.

    (a) Contracting officers shall provide assistance to prime 
contractors to identify potential women-owned small businesses. Such 
assistance is intended to aid prime contractors in placing a fair 
proportion of subcontracts with women-owned small businesses.
    (b) The contracting officer shall insert the clause at 1352.219-1, 
Women-Owned Small Business Sources, in solicitations and contracts where 
the clause prescribed by FAR 19.708(b) is required (see FAR 52.219-9).

                       PARTS 1322-1325 [RESERVED]

[[Page 637]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS



                          PART 1331 [RESERVED]



PART 1332_CONTRACT FINANCING--Table of Contents




                         Subpart 1332.1_General

Sec.
1332.102 Description of contract financing methods.

Subpart 1332.4 [Reserved]

Subpart 1332.6 [Reserved]

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12963, Mar. 30, 1984, unless otherwise noted.



                         Subpart 1332.1_General



1332.102  Description of contract financing methods.

    (e)(2) Progress payments based on a percentage or stage of 
completion are authorized for use as a payment method under Department 
contracts and subcontracts for construction, alteration, repair, ship 
construction, ship alteration, and ship repair. For all other contracts, 
progress payments shall be based on costs except when the head of the 
contracting office determines that progress payments based on costs 
cannot be practically employed. In those cases, progress payments based 
on a percentage or stage of completion may be authorized when the head 
of the contracting office also determines that adequate safeguards are 
provided for the administration of those payments.

Subpart 1332.4 [Reserved]

Subpart 1332.6 [Reserved]



PART 1333_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                         Subpart 1333.1_Protests

Sec.
1333.101 Definitions.
1333.102 General.
1333.103 Protests to the agency.
1333.104 Protests to GAO.
1333.105 Protests to GSBCA.
1333.106 Solicitation provision and contract clause.

                   Subpart 1333.2_Disputes and Appeals

1333.213 Obligation to continue performance.

          Subpart 1333.70_Department Board of Contract Appeals

1333.70-1 Department Board of Contract Appeals.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 51 FR 15331, Apr. 23, 1986, unless otherwise noted.



                         Subpart 1333.1_Protests



1333.101  Definitions.

    Agency protest, as used in this subpart, is one that may be filed 
with either the Contracting Officer or the Protest Decision Authority 
but not both.
    Assistant General Counsel (AGC), as used in this subpart, means the 
Assistant General Counsel of the Department of Commerce for Finance and 
Litigation.
    Protest Decision Authority, as used in this subpart, is the agency 
official above the level of the Contracting Officer who has been 
designated by the Procurement Executive to handle and issue the formal 
agency decision resolving the protest.

[64 FR 16652, Apr. 6, 1999]

[[Page 638]]



1333.102  General.

    (a) Protests must be received within ten work days after the basis 
for protest is known or should have been known unless good cause is 
shown to extend the time limit. However, protests based upon alleged 
improprieties in any type of solicitation which are apparent prior to 
bid opening or the closing time for receipt of initial proposals shall 
be filed prior to bid opening or the closing time for receipt of initial 
proposals. Unless the time limit for receiving the protest is extended 
for good cause, a protest to the contracting activity which is received 
after the time limit will not be considered. When a timely protest is 
filed only with the contracting activity, the contracting officer shall 
take prompt action toward resolution after consulting with the AGC, and 
notify the protestor in writing of the action taken.
    (b) When a protest is filed only with the contracting activity 
before award, an award shall not be made until the matter is resolved, 
unless the head of the contracting office makes the determination 
prescribed in FAR 33.103(f).
    (c) When a protest is filed only with the contracting activity after 
award, the Contracting Officer need not notify the contractor, if the 
protest can be promptly resolved. If it appears likely that a protest 
will be filed with the General Accounting Office (GAO), or other 
administrative forum, the Contracting Officer should promptly notify the 
contractor in writing and consider suspending contract performance.

[64 FR 16652, Apr. 6, 1999]



1333.103  Protests to the agency.

    (a) When a protester decides to file a protest at the agency level 
with the Protest Decision Authority, the guidelines set forth in these 
established agency level protest procedures above the Contracting 
Officer apply. These procedures are in addition to the existing protest 
procedures contained in the FAR Part 33.102 and 1333.102 of this 
subpart.
    (1) For purposes of this subpart, a day is a calendar day. In 
computing a period of time for the purpose of these procedures, the day 
from which the period begins to run is not counted. When the last day of 
the period is a Saturday, Sunday, or Federal holiday, the period extends 
to the next day that is not a Saturday, Sunday, or Federal holiday. 
Similarly, when the Washington, DC offices of the Department of Commerce 
are closed for all or part of the last day, the period extends to the 
next day on which the Department is open.
    (2) Protesters using these procedures may protest to the Protest 
Decision Authority who will make the final decision for the Department. 
Protests shall be addressed to: (Name, title of the person and address 
to be inserted by the Contracting Officer in the solicitation). The 
outside of the envelope or beginning of the FAX transmission must be 
marked ``Agency-level Protest''. The protester shall also provide a copy 
of the protest within 1 day to the responsible Contracting Officer and a 
copy to: Contract Law Division, Office of the Assistant General Counsel 
for Finance and Litigation, Department of Commerce, Room H5882, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230, (FAX Number 
202-482-5858).
    (3) While a protest is pending at the agency level with the Protest 
Decision Authority, the protester agrees not to protest to the GAO or 
any other external fora. If the protester has already filed with the GAO 
or other external fora, the procedures described here may not be used.
    (i) Protests based upon alleged improprieties in a solicitation 
which are apparent prior to bid opening or time set for receipt of 
proposals shall be filed prior to bid opening or the time set for 
receipt of proposals. If the contract has been awarded, protests must be 
filed within 10 days after contract award or 5 days after the date the 
protester was given the opportunity to be debriefed, whichever date is 
later. In cases other than those covered in the preceding two sentences, 
protests shall be filed not later than 14 days after the basis of the 
protest is known or should have been known, whichever is earlier.
    (ii) To be filed on a given day, protests must be received by 4:30 
PM current local time. Any protests received after that time will be 
considered to be

[[Page 639]]

filed on the next day. Incomplete submissions will not be considered 
filed until all information is provided.
    (iii) To be complete, protests must contain the following 
information:
    (A) The protester's name, address, telephone number, and fax number.
    (B) The solicitation or contract number, name of contracting office 
and the Contracting Officer.
    (C) A detailed statement of all factual and legal grounds for 
protests, and an explanation of how the protester was prejudiced.
    (D) Copies of relevant documents supporting protester's statement.
    (E) A request for ruling by the agency.
    (F) Statement as to form of relief requested.
    (G) All information establishing that the protester is an interested 
party for the purpose of filing a protest.
    (H) All information establishing the timeliness of the protest.
    (iv) All protests must be signed by an authorized representative of 
the protestor.
    (b) Within 14 days after the protest is filed, the Contracting 
Officer will prepare an administrative report that responds to the 
issues raised by the protester and addresses any other issues, which, 
even if not raised by the protester, that may have been identified by 
agency officials as being relevant to the fairness of the procurement 
process. The Contracting Officer shall forward this administrative 
report to the Contract Law Division, Office of the Assistant General 
Counsel for Finance and Litigation.
    (1) For good cause shown, the Protest Decision Authority may grant 
an extension of time for filing the administrative report and for 
issuing the written decision. When an extension is granted, the Protest 
Decision Authority will notify the protester and all interested parties 
within 1 day of the decision to grant the extension.
    (2) Unless an extension is granted, the Protest Decision Authority 
will issue a decision within 35 days of the protest. The protest 
decision authority's final decision will be binding on the Department of 
Commerce and not subject to further appeals.
    (3) The Protest Decision Authority shall send a written ruling and a 
summary of the reasons supporting the ruling to the protester, by 
``Certified Mail, Return Receipt Requested,'' and shall forward 
information copies to the applicable contracting office and the 
Procurement Executive, Office of Acquisition Management.
    (c) Effect of protest on award and performance.
    (1) When a protest is filed prior to award, a contract may not be 
awarded unless authorized by the Head of the Contracting Activity (HCA) 
based on a written finding that:
    (i) The supplies or services are urgently required.
    (ii) Delivery or performance would be unduly delayed by failure to 
make the award promptly.
    (iii) A prompt award will be in the best interest of the Government.
    (2) When a protest is filed within 10 days after contract award, or 
5 days after a debriefing date was offered to the protester under a 
timely debriefing request in accordance with FAR 15.1004, whichever is 
later, the Contracting Officer shall immediately suspend performance 
pending the resolution of the protest within the agency, including any 
review by an independent higher official, unless continued performance 
is justified. The HCA may authorize continued contract performance, 
notwithstanding the protest, based on a written finding that:
    (i) Contract performance would be in the best interest of the United 
States; or
    (ii) Urgent and compelling circumstances that significantly affect 
the interests of the United States will not permit waiting for a 
decision.
    (d) The Protest Decision Authority may grant one or more of the 
following remedies:
    (1) Terminate the contract.
    (2) Re-compete the requirement.
    (3) Issue a new solicitation.
    (4) Refrain from exercising options under the contract.
    (5) Award a contract consistent with statutes and regulations.
    (6) Amend the solicitation provisions which gave rise to the protest 
and continue with the procurement.

[[Page 640]]

    (7) Such other remedies as the decision-maker may determine are 
necessary to correct a defect.

[64 FR 16653, Apr. 6, 1999]



1333.104  Protests to GAO.

    (a)(1) General. A protestor shall furnish a copy of its complete 
protest to the contracting officer designated in the solicitation and a 
copy of its complete protest to the Contract Law Division of the Office 
of the Assistant General Counsel for Finance and Litigation, no later 
than one day after the protest is filed with the GAO. The envelope 
containing the complete protest shall be clearly marked ``GAO Protest''.
    (2) The GAO report shall be assembled and organized by the 
contracting office in accordance with rule 4(d) of the GSBCA Rules of 
Procedure (48 CFR part 6101) except where rule 4(d) may conflict with 
GAO procedures.
    (b) Protests before award. When the contracting activity has 
received notice of a protest filed directly with GAO, a contract may not 
be awarded prior to a GAO decision on the protest, unless the Head of 
the Contracting Activity makes the written finding prescribed in FAR 
33.104 (b)(1) after consulting with the AGC. The head of the contracting 
office shall notify the AGC when the written finding has been executed 
so that the AGC can notify GAO. The contracting activity is not 
authorized to award the affected contract until the AGC has notified GAO 
of the written finding.
    (c) Protests after award. When the contracting activity receives 
notice of a protest filed directly with GAO within 10 calendar days 
after contract award, the contracting officer shall immediately suspend 
performance pending a GAO decision on the protest or terminate the 
awarded contract, unless the Head of the Contracting Activity makes the 
written finding prescribed in FAR 33.104 (c)(2) after consulting with 
the AGC. The head of the contracting office shall notify the AGC when 
the written finding has been executed so that the AGC can notify GAO. 
The contracting activity is not authorized to continue contract 
performance until the AGC has notified GAO of the written finding.

[51 FR 15331, Apr. 23, 1986, as amended at 60 FR 47310, Sept. 12, 1995]



1333.105  Protests to GSBCA.

    (a)(1) A protestor shall furnish a copy of its complete protest to 
the contracting officer designated in the solicitation and a copy of its 
complete protest to the Contract Law Division of the Office of the 
Assistant General Counsel for Finance and Litigation, on the same day 
the protest is filed with the GSBCA. The envelope containing the 
complete protest shall be clearly marked ``GSBCA Protest''.

[51 FR 15331, Apr. 23, 1986, as amended at 60 FR 47310, Sept. 12, 1995]



1333.106  Solicitation provision and contract clause.

    (a) The contracting officer shall insert the provision at 1352.233-
2, Service of Protest (JAN 1985) (Deviation FAR 52.233-2), in lieu of 
the provision at FAR 52.233-2 in solicitations for other than small 
purchases.



                   Subpart 1333.2_Disputes and Appeals



1333.213  Obligation to continue performance.

    (a) The contracting officer may use Alternate I to the clause at FAR 
52.233-1, Disputes, only after the Head of the Contracting Activity has 
determined in writing that--
    (1) Continued performance is necessary pending resolution of any 
claim arising under or relating to the contract because of unusual 
circumstances which make continued performance essential to the public 
health or welfare;
    (2) Financing is or will be available for the continued performance; 
and
    (3) The Government's interest is or will be properly secured.



          Subpart 1333.70_Department Board of Contract Appeals



1333.70-1  Department Board of Contract Appeals.

    The General Services Administration (GSA) Board of Contract Appeals

[[Page 641]]

serves as the Board of Contract Appeals for the Department.

[49 FR 12964, Mar. 30, 1984]

[[Page 642]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING



                          PART 1334 [RESERVED]



PART 1336_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




     Subpart 1336.2_Special Aspects of Contracting for Construction

Sec.
1336.209 Construction contracts with architect-engineer firms.

               Subpart 1336.6_Architect-Engineer Services

1336.602-5 Short selection processes for contracts not to exceed 
          $10,000.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12964, Mar. 30, 1984, unless otherwise noted.



     Subpart 1336.2_Special Aspects of Contracting for Construction



1336.209  Construction contracts with architect-engineer firms.

    The head of the contracting office is delegated the authority to 
approve the exceptional circumstance of awarding a contract for 
construction of a project to the firm that designed the project. Any 
approval of this type of award must be justified in writing and signed 
by the head of the contracting office.



               Subpart 1336.6_Architect-Engineer Services



1336.602-5  Short selection processes for contracts not to exceed $10,000.

    Both short selection processes prescribed in FAR 36.602-5 may be 
used for contracts not to exceed $10,000. However, in either case the 
contracting officer shall review the report, approve it and commence 
negotiations or return it for appropriate revision.

                          PART 1337 [RESERVED]

[[Page 643]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 1342_CONTRACT ADMINISTRATION--Table of Contents




    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.



  Subpart 1342.1_Interagency Contract Administration and Audit Services



1342.102-70  Post award audit reviews.

    (a) Generally, the final invoice shall not be approved until a 
close-out audit has been performed and all outstanding issues have been 
negotiated or resolved on the following types of contracts of $100,000 
and above:
    (1) Cost-reimbursement type contracts;
    (2) The cost-reimbursement portion of fixed-price contracts;
    (3) Letter contracts which provide for reimbursement of costs;
    (4) Time and materials contracts; and
    (5) Labor-hour contracts.
    (b) Even though the $100,000 postaward audit threshold generally 
applies, an audit may be requested regardless of the dollar amount when 
the contracting officer determines that an audit is justified under one 
of the following circumstances:
    (1) There is some evidence of fraud or waste;
    (2) The contractor's performance under the contract has been 
questionable;
    (3) The contractor had a high incidence of unallowable costs under a 
previous contract;
    (4) The contract is with a newly established firm, or a firm which 
has just begun dealing with the Government.

[49 FR 12965, Mar. 30, 1984; as amended at 60 FR 47310, Sept. 12, 1995]

                          PART 1345 [RESERVED]



PART 1349_TERMINATION OF CONTRACTS--Table of Contents




Sec.
1349.001 Definitions.

                 Subpart 1349.4_Termination for Default

1349.402-7 Other damages.

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Sec'y of Commerce in 
Dept. Org. Order 10-5 and Dept. Adm. Order 208-2.



1349.001  Definitions.

    (a) Administrative costs, as used in this part, means those costs 
other than excess costs, incurred by the Government as a result of the 
contractor's default. Administrative costs include but are not limited 
to:
    (1) Salaries and fringe benefits paid to Government employees who 
are assigned to a work activity (e.g., reprocurement activities) as a 
result of the default;
    (2) Preaward survey expenses incurred in qualifying reprocurement 
contractors; and
    (3) Costs incurred in printing and distributing the reprocurement 
solicitation.
    (b) Excess costs, as used in this part, means any costs, other than 
administrative costs, incurred by the Government in reprocuring similar 
supplies or services or performing similar services as a result of the 
contractor's default.

[51 FR 15332, Apr. 23, 1986]



                 Subpart 1349.4_Termination for Default



1349.402-7  Other damages.

    (a) The contracting officer may recover administrative costs under 
the default clause when it is in the best interest of the Government. A 
contracting officer's decision to recover administrative costs must 
balance the expected cost to the Government of documenting and 
supporting the assessment with the expected recovery amount.

[[Page 644]]

    (b) Documents used to support an assessment of administrative costs 
must clearly demonstrate that the added costs incurred by the Government 
were a direct result of the default.
    (1) To support administrative labor costs, the contracting officer 
should keep a record of:
    (i) Name, position, and organization of each employee performing 
work activities as a consequence of the default;
    (ii) Dates of work and time spent by each employee on the 
repurchase;
    (iii) Specific tasks performed (e.g., solicitation preparation, 
clerical);
    (iv) Hourly rates of pay (straight time or overtime); and
    (v) Applicable fringe benefits.
    (2) Travel vouchers, invoices, printing requisitions, and other 
appropriate evidence of expenditures may be used to support other 
administrative costs (e.g., travel, per diem, printing and distribution 
of the repurchase contract).
    (c) If assessment of administrative costs is considered appropriate 
after review by the AGC, the contracting officer shall make a written 
demand on the contractor for administrative costs. The written demand 
shall describe the basis for the assessment and the cost computations. 
The same demand letter may be used to assess administrative costs and 
any excess costs. If the contractor fails to make payment after 
receiving a contracting officer's final decision, the contracting 
officer shall follow the procedures in subpart 1332.6 and FAR Subpart 
32.6 to collect the amount owed the Government.
    (d) The recovery of excess or administrative costs does not preclude 
the Government from exercising other rights or remedies which it may 
have by law or under the terminated contract.

[51 FR 15332, Apr. 23, 1986]

[[Page 645]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 1352_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




                         Subpart 1352.0_General

Sec.
1352.000 Scope of part.
1352.001 General policy.

      Subpart 1352.1_Instructions for Using Provisions and Clauses

1352.100 Incorporation by reference.

             Subpart 1352.2_Texts of Provisions and Clauses

1352.217-90 Inspection and manner of doing work.
1352.217-91 Delivery of vessel to the contractor.
1352.217-92 Performance.
1352.217-93 Delays.
1352.217-94 Minimization of delay due to Government furnished property.
1352.217-95 Additional provisions relating to Government property.
1352.217-96 Liability and insurance.
1352.217-97 Title.
1352.217-98 Discharge of liens.
1352.217-99 Department of Labor occupational safety and health standards 
          for ship repairing.
1352.217-100 Regulations governing asbestos work.
1352.217-101 Complete and final equitable adjustments.
1352.217-102 Government review, comment, acceptance, and approval.
1352.217-103 Access to the vessel(s).
1352.217-104 Documentation of requests for equitable adjustment.
1352.217-105 Change proposals.
1352.217-106 Lay days.
1352.217-107 Changes--ship repair.
1325.217-108 Default--ship repair.
1352.217-109 Insurance requirements.
1352.217-110 Guarantees.
1352.217-111 Temporary services.
1352.217-112 Self-insurance information.
1352.233-2 Service of protest.

    Authority: 41 U.S.C. 418b.

    Source: 49 FR 12965, Mar. 30, 1984, unless otherwise noted.



                         Subpart 1352.0_General



1352.000  Scope of part.

    This part implements and supplements FAR Part 52 by prescribing 
specific modifications, alterations, and deviations to FAR solicitation 
provisions and contract clauses for Department-wide use.



1352.001  General policy.

    The Department's policy is to use the FAR and CAR prescribed 
solicitation provisions and contract clauses unless specific authority 
for deviations has been obtained. (See 1301.4 for authority to deviate.) 
The use of uniform solicitation provisions and contract clauses should: 
provide a less burdensome way for potential contractors to respond to 
the Government's request for information concerning the evaluation of 
bids and proposals; expedite solicitation and contract preparation; and 
facilitate contract negotiation, administration and review. Each 
solicitation which incorporates contract clauses or solicitation 
provisions which deviate from those prescribed by the FAR and the CAR 
must be submitted to the Office of Procurement and Federal Assistance 
for prior review. The Office of Procurement and Federal Assistance will 
coordinate requests for approval of these solicitations by the Office of 
Management and Budget, in accordance with the Paperwork Reduction Act of 
1980 and 5 CFR part 1320.



      Subpart 1352.1_Instructions for Using Provisions and Clauses



1352.100  Incorporation by reference.

    Contracting officers within the Department shall incorporate 
solicitation provisions and contract clauses by reference in 
solicitations and contracts to the maximum extent provided by applicable 
law and regulation. Incorporation by reference is the listing only by 
title, regulatory citation, and date of the provision or clause rather 
than the full text. The full text of the referenced solicitation 
provision or contract clause is contained in the Code of Federal

[[Page 646]]

Regulations (CFR); chapter 1 of title 48 for FAR provisions and clauses; 
and chapter 13 of title 48 for CAR provisions and clauses.



             Subpart 1352.2_Texts of Provisions and Clauses

    Source: 52 FR 3808, Feb. 6, 1987, unless otherwise noted.



1352.217-90  Inspection and manner of doing work.

    As prescribed in 1317.7001(a), insert the following clause:

    Inspection and Manner of Doing Work (CAR 1352.217-90) (JAN 1987)

    (a) All work and material shall be subject to the approval of the 
Contracting Officer or his duly authorized representative. Work shall be 
performed in accordance with the plans and specifications of this 
contract as modified by any contract modification.
    (b) Unless otherwise specifically provided for in the contract, all 
operational practices of the Contractor and all workmanship and 
material, equipment and articles used in the performance of work shall 
be in accordance with American Bureau of Shipping Rules for Building and 
Classing Steel Vessels, U.S. Coast Guard Marine Engineering Regulations 
and Material Specifications (Subchapter F 46 CFR), U.S. Coast Guard 
Electrical Engineering Regulations (Subchapter J 46 CFR) (APR 1982), and 
U.S.P.H.S., Handbook on Sanitation in Vessel Construction, in effect at 
the time of the Contractor's submission of bid (or acceptance of the 
contract, if negotiated), and the best commercial maritime practices, 
except where military specifications are specified, in which case such 
standards of material and workmanship shall be followed.
    (c) All material and workmanship shall be subject to inspection and 
test at all times during the Contractor's performance of the work to 
determine their quality and suitability for the purpose intended and 
compliance with the contract. In case any material or workmanship 
furnished by the Contractor is found to be defective prior to redelivery 
of the vessel, or not in accordanoe with the requirements of the 
contract, the Government shall have the right prior to redelivery of the 
vessel to reject such material or workmanship, and to require its 
correction or replacement by the Contractor at the Contractor's cost and 
expense. This Government right is in addition to its rights under any 
Guarantee clause in this contract. If the Contractor fails to proceed 
promptly with the replacement or correction of such material or 
workmanship, as required by the Contracting Officer, the Government may, 
by contract or otherwise, replace or correct such material or 
workmanship and charge to the Contractor the excess cost to the 
Government. The Contractor shall provide and maintain an inspection 
system acceptable to the Government covering the work specified in the 
contract. Records of all inspection work by the Contractor shall be kept 
complete and available to the Government during the performance of the 
contract and for a period of 2 years after delivery of the vessel to the 
Government.
    (d) No welding, including tack welding and brazing, shall be 
permitted in connection with repairs, completions, alterations, or 
addition to hulls, machinery or components of vessels unless the welder 
is at the time, qualified to the standards established by the United 
States Coast Guard, the American Bureau of Shipping, or the Department 
of the Navy. The welder's qualifications shall be appropriate for the 
particular service application, filler material type, position of 
welding, and welding process involved in the work being undertaken. A 
welder may be required to requalify if the Contracting Officer believes 
there is a reasonable doubt concerning the welder's ability. Welder's 
qualifications for this purpose shall be outlined in ``Marine 
Engineering Regulations'' of the United States Coast Guard. When a 
welding process other than manual shielded arc is proposed or required, 
the contractor or fabricator shall submit procedure qualification tests 
for approval prior to production welding. Procedure qualification tests 
shall be conducted in accordance with the requirements of the ``Marine 
Engineering Regulations'' of the United States Coast Guard.
    (e) The Contractor shall exercise reasonable care to protect the 
vessel from fire, and the Contractor shall maintain a reasonable system 
of inspection over the activities of welders, burners, riveters, 
painters, plumbers and similar workers, particularly where such 
activities are undertaken in the vicinity of the vessel's magazine, fuel 
oil tanks, or storerooms containing flammable material. A reasonable 
number of hose lines shall be maintained by the Contractor ready for 
immediate use on the vessel at all times while the vessel is berthed 
alongside the Contractor's pier or in drydock or on a marine railway. 
All tanks or bilge areas under alteration or repair shall be cleaned, 
washed, and steamed out or otherwise made safe by the Contractor if and 
to the extent necessary as required by good marine practice or by 
current OSHA Regulations. The Contracting Officer's Technical 
Representative (COTR) shall be furnished with a ``gas free'' or ``safe 
for hot work'' or ``safe for men'' certificate before any hot work or 
entry is done. Unless otherwise provided in this contract, the 
Contractor shall at all times maintain a reasonable fire watch about the 
vessel, including a

[[Page 647]]

fire watch on the vessel while work is being performed thereon.
    (f) The Contractor shall place proper safeguards and/or effect such 
safety precautions as necessary, including suitable and sufficient 
lighting, for the prevention of accidents or injury to persons or 
property during the prosecution of work under this contract and/or from 
time of receipt of the vessel until acceptance by the Government of the 
work performed.
    (g) Except as otherwise provided in this contract, when the vessel 
is in the custody of the contractor or in drydock or on a marine railway 
and the temperature becomes as low as 35 degrees Fahrenheit, the 
Contractor shall keep all pipelines, fixtures, traps, tanks, and other 
receptacles on the vessel drained to avoid damage from freezing, or if 
this is not practicable, the vessel shall be kept heated to prevent such 
damage. The vessel's stern tube and propeller hubs shall be protected 
from frost damage by applied heat through the use of a salamander or 
other proper means, as approved by the COTR.
    (h) Whenever practicable, the work shall be performed in a manner 
which does not interfere with the berthing and messing of personnel 
attached to the vessel. The Contractor shall ensure that assigned 
personnel have access to the vessel at all times. It is understood that 
such personnel will not interfere with the work or the Contractor's 
workers.
    (i) The Government does not guarantee the correctness of the 
dimensions, sizes, and shapes given in any sketches, drawings, plans or 
specifications prepared or furnished by the Government. The Contractor 
shall be responsible for the correctness of the shape, sizes and 
dimensions of parts to be furnished hereunder, other than those 
furnished by the Government.
    (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 
Contractor employees or the work, and at the completion of the work 
shall remove all rubbish from and about the site of the work and shall 
leave the work and its immediate vicinity ``broom clean'' unless more 
exactly specified in this contract.
    (k) While in drydock or on a marine railway, the Contractor shall be 
responsible for the closing before the end of working hours, of all 
valves and openings upon which work is being done by its workers when 
such closing is practicable. The Contractor shall keep the COTR 
cognizant of the closure status of all valves and openings upon which 
the Contractor's workers have been working.
    (l) Without additional expense to the Government, the Contractor 
shall employ specialty subcontractors where required by the 
specifications or when necessary for satisfactory performance of the 
work.
    (m) When requested by the COTR, the Contractor shall notify the COTR 
in advance:
    (i) Prior to starting inspections or tests; and
    (ii) When supplies will be ready for Government inspection.
    (n) When advance notification is requested, the authorized COTR 
shall specify the period and method of notification.

                             (End of clause)



1352.217-91  Delivery of vessel to the contractor.

    As prescribed in 1317.7001(a), insert the following clause:

    Delivery of Vessel to the Contractor (CAR 1352.217-91) (JAN 1987)

    (a) The Government shall deliver the vessel to the Contractor at the 
location specified in the contract.
    (b) If the Contractor's plant is specified, it shall be understood 
to mean the fairway of the plant. The Contractor shall provide necessary 
tugs and pilot services to move the vessel from the fairway to the pier 
or dock and, upon completion of all work, from the pier or dock to the 
fairway of the plant.
    (c) While the vessel is in the possession of the Contractor, any 
necessary movement of the vessel incidental to the work specified in the 
contract shall be furnished by the Contractor without additional charge 
to the Government.

                             (End of clause)



1352.217-92  Performance.

    As prescribed in 1317.7001(a), insert the following clause:

                 Performance (CAR 1352.217-92)(JAN 1987)

    (a) Upon the issuance of the contract, the Contractor shall promptly 
commence the work specified in any plans and specifications made a part 
of the contract, and shall diligently prosecute the work to completion. 
The Contractor shall not commence work until the contract has been 
issued.
    (b) The Government shall deliver the vessel described in the 
contract at such time and location as may be specified in the contract. 
Upon completion of the work, the Government shall accept delivery of the 
vessel at such time and location as may be specified in the contract.
    (c) Without additional charge to the Government, and without 
specific requirement in the contract, the Contractor shall:
    (1) Make available at the plant to personnel of the vessel while in 
drydock or on a marine railway, toilet and similar facilities acceptable 
to the Contracting Officer as adequate in number and sanitary standards;

[[Page 648]]

    (2) Supply and maintain, in such condition as the Contracting 
Officer may reasonably require, suitable brows and gangways from the 
pier, drydock 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 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, riggings, or pipe lines; and
    (5) Furnish suitable offices, office equipment and telephones at or 
near the site of the work as the Contracting Officer reasonably requires 
for himself and his staff.
    (d) Except as otherwise provided in the contract, the Contractor 
shall furnish all necessary material, labor, services, equipment, 
supplies, power, accessories, facilities, and other things and services 
necessary for accomplishing the work, subject to Government rights under 
the Government Property clause.
    (e) The Contractor shall conduct dock and sea trials of the vessel 
as required by the contract. Unless otherwise expressly provided in the 
contract, during the conduct of these trials the vessel shall be under 
the control of the vessel's commander and crew with representatives of 
the Contractor and the Government on board to determine whether or not 
the work done by the Contractor has been satisfactorily performed. Dock 
and sea trials not speoified which the Contractor requires for his own 
benefit shall not be undertaken by the Contractor without prior notice 
to and approval of the Contracting Officer; any such dock or sea trial 
shall be conducted at the risk and expense of the Contractor. The 
Contractor shall provide and install all fittings and appliances which 
may be necessary for the dock and sea trials, to enable the 
representatives of the Government to determine whether the requirements 
of the contract plans and specifications have been met. The Contractor 
shall also be responsible for the care, installation and removal of any 
instruments and apparatus furnished by the Government for such trials.

                             (End of clause)



1352.217-93  Delays.

    As prescribed in 1317.7001(a), insert the following clause:

                   Delays (CAR 1352.217-93) (JAN 1987)

    When during the performance of this contract the Contractor is 
required to delay the work on a vessel temporarily, due to orders or 
actions of the Government respecting stoppage of work to permit shifting 
the vessel, stoppage of hot work to permit bunkering, fueling, stoppage 
of work due to embarking or debarking passengers and loading or 
discharging cargo, and the Contractor is not given sufficient advance 
notice or is otherwise unable to avoid incurring additional costs on 
account thereof, an equitable adjustment may be made in the contract 
price pursuant to the Changes clause.

                             (End of clause)



1352.217-94  Minimization of delay due to Government furnished property.

    As prescribed in 1317.7001(a), insert the following clause:

    Minimization of Delay Due to Government Furnished Property (CAR 
                         1352.217-94) (JAN 1987)

    (a) In order to assure timely delivery of the vessel under this 
contract, it is imperative that delay in delivery of such vessel 
resulting from late, damaged, or unsuitable Government furnished 
property be held to an absolute minimum. In order to achieve 
minimization of delay it is agreed that:
    (1) Subject to adjustment as provided in paragraph (b) of this 
clause, the Government shall deliver each item of Government furnished 
property to the Contractor on or before the date specified in the 
contract or, if later, in sufficient time for the contractor to deliver 
the vessel in accordance with the delivery schedule specified elsewhere.
    (2) The Government may forego furnishing any item of Government 
property to the Contractor. In that event, the Contractor shall prepare 
the vessel in terms of piping, wiring, structure, foundation, 
ventilation, and any other preinstallation requirements of the item, so 
that the work on the vessel may continue without delay and disruption 
resulting from the absence of the item. If the Government does not 
furnish an item designated as Government furnished property, the parties 
may be entitled to an equitable adjustment in the contract price, in 
accordance with the Changes clause for eliminating the requirement to 
install the Government property item. But, notwithstanding any other 
clause of this contract, an adjustment shall not be made in the delivery 
schedule of any vessel if the Government chooses not to furnish the item 
on or before the delivery date of the item. If the Government 
subsequently desires the Contractor to install the item prior to 
delivery of the vessel, a contract modification shall be executed which 
takes into account any increase in cost or performance time resulting 
from the installation.
    (b) If the delivery date for the vessel is extended for any reason, 
the latest date for

[[Page 649]]

which the Government must deliver items of Government property shall be 
deemed to be extended by an equal number of days unless (i) the 
Contracting Officer agrees in writing that earlier delivery of the items 
is required, in which case some or all of the Government property shall 
be extended as agreed rather than on a day-for-day basis, or (ii) a 
Government property item was the exclusive cause for the extension of 
the delivery date of the vessel in which case the latest date by which 
the Government must deliver the item shall not be deemed to be extended 
unless the parties agree otherwise.
    (c) The delivery or performance dates for the supplies or services 
to be furnished by the Contractor under this contract are based upon the 
expectation that Government furnished property suitable for use (except 
for such property furnished ``as is'') will be delivered to the 
Contractor at the time stated in the specification or, if not so stated, 
in sufficient time to enable the Contractor to meet such delivery or 
performance dates. If the Government furnished property is not delivered 
to the Contractor by such time and the Contractor makes a timely written 
request, the Contracting Officer shall determine if an equitable 
adjustment is appropriate. If determined appropriate, the Contracting 
Officer shall equitably adjust the delivery or performance date, the 
specifications, the price, or any other contractual provision affected 
by any such delay, in accordance with the Changes clause.
    (d) The Government Property and Minimization of Delay Due to 
Government Furnished Property clauses contain exclusive remedies. The 
Government shall not be liable to suit for breach of contract by reason 
of any delay in delivery of Government furnished property or delivery of 
such property in a condition not suitable for its intended use.

                             (End of clause)



1352.217-95  Additional provisions relating to Government property.

    As prescribed in 1317.7001(a), insert the following clause:

Additional Provisions Relating to Government Property (CAR 1352.217-95) 
                               (JAN 1987)

    (a) Notwithstanding any requirements to the contrary for the 
furnishing of material by the Government which may appear in plans, 
drawings, or other data, the Government shall furnish only the material 
specifically listed in the specifications as Government furnished 
property. Any material required for the performance of the contract 
which does not appear in the specifications as Government furnished 
shall be furnished by the Contractor.
    (b) The Contracting Officer may increase the amount of material to 
be furnished by the Government and the contract shall be equitably 
adjusted in accordance with the Government Property clause.
    (c) Unless otherwise specifically directed by the Contracting 
Officer, nonreusable crates and other nonreusable packaging in which 
Government material is delivered to the Contractor shall become the 
property of the Contractor upon removal of the packaged or crated 
material.
    (d) Any packaging in preparation for delivery or for other disposal 
of Government property by the Contractor at the direction or 
authorization of the Contracting Officer pursuant to paragraph (i) of 
the Government Property clause shall be provided for by change order and 
an appropriate adjustment shall be made in the contract price in 
accordance with the Changes clause.
    (e) The vessel, its equipment, movable stores, cargo and other 
ship's material are not designated Government furnished property under 
the Government Property clause.

                             (End of clause)



1352.217-96  Liability and insurance.

    As prescribed in 1317.7001(a), insert the following clause:

          Liability and Insurance (CAR 1352.217-96) (JAN 1987)

    (a) The Contractor shall exercise reasonable care and use 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 thereof 
upon which work is done.
    (b) The Contractor shall be responsible for and make good at its own 
cost and expense any and all loss of or damage of whatsoever nature to 
the vessel (or part thereof), its equipment, movable stores and cargo, 
and Government owned material and equipment for the repair, completion, 
alteration of or addition to the vessel in the possession of the 
Contractor, whether at the plant or elsewhere, arising or growing out of 
the performance of the work, except where the Contractor can 
affirmatively show that such loss or damage was due to causes beyond the 
Contractor's control, was proximately caused by the fault or negligence 
of agents or employees of the Government, or which loss or damage the 
Contractor by exercise of reasonable care was unable to prevent. 
However, the Contractor shall not be responsible for any such loss or 
damage discovered after redelivery of the vessel unless (i) the loss or 
damage is discovered within 90 days after redelivery of the vessel and 
(ii) loss or damage is affirmatively shown to be the result of the fault 
or negligence of the Contractor. To induce the Contractor to perform the 
work for

[[Page 650]]

the compensation provided, it is specifically agreed that the 
Contractor's aggregate liability on account of loss of or damage to the 
vessel (or part thereof), its equipment, movable stores and cargo and 
Government owned materials and equipment shall in no event exceed the 
sum of $300,000. As to the Contractor, the Government assumes the risk 
of loss or damage to the Government-owned vessel (or part thereof), its 
equipment, movable stores and cargo and said Government-owned materials 
and equipment in excess of $300,000. This assumption of risk includes 
but is not limited to loss or damage from negligence of whatsoever 
degree of the Contractor's servants, employees, agents or subcontractors 
but specifically excludes loss or damage from willful misconduct or lack 
of good faith on the part of the Contractor's directors, officers and 
any of its managers, superintendents or other equivalent representatives 
who have supervision or direction of (i) all or substantially all of the 
Contractor's business, or (ii) all or substantially all of the 
Contractor's operation at any one plant. However, as to such risk 
assumed and borne by the Government, the Government shall be subrogated 
to any claim, demand or cause of action against third persons which 
exists in favor of the Contractor, and the contractor shall, if 
required, execute a formal assignment or transfer of claims, demands or 
causes of action. Nothing contained in this paragraph shall create or 
give rise to any right, privilege or power in any person except the 
Contractor, nor shall any person (except the Contractor) be or become 
entitled thereby to proceed directly against the Government, or join the 
Government as a co-defendent in any action against the Contractor 
brought to determine the Contractor's liability, or for any other 
purpose.
    (c) The Contractor indemnifies and holds harmless the Government, 
its agencies and instrumentalities, and the vessel against all suits, 
actions, claims, costs or demands (including without limitation, suits, 
actions, claims, costs or demands resulting from death, personal injury 
and property damage) to which the Government, its agencies and 
instrumentalities, or the vessel may be subject or put by reason of 
damage or injury (including death) to the property or person of any one 
other than the Government, its agencies, instrumentalities and 
personnel, or the vessel arising or resulting in whole or in part from 
the fault, negligence, wrongful act or wrongful omission of the 
Contractor, or any subcontractor, its or their servants, agents or 
employees; provided that the Contractor's obligation to indemnify under 
this paragraph (c) shall not exceed the sum of $300,000 on account of 
any one accident or occurrence in respect of any one vessel. Such 
indemnity shall include, without limitation, suits, actions, claims, 
costs or demands of any kind whatsoever, 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. 
With respect to any such suits, actions, claims, costs or demands 
resulting from death, personal injury or property damage occurring after 
the expiration of such period, the rights and liabilities of the 
Government and the Contractor shall be as determined by other provisions 
of this contract and by law; provided that such indemnity shall apply to 
death occurring after such period which results from any personal injury 
received during the period covered by the Contractor's indemnity as 
provided herein.
    (d) The Contractor shall, at its own expense, procure, and 
thereafter maintain such casualty, accident and liability insurance, in 
such forms and amounts as may be approved by the Contracting Officer, 
insuring the performance of its obligations under paragraph (c) of this 
clause. In addition, the Contractor shall at its own expense procure and 
thereafter maintain such ship repairer's legal liability insurance as 
may be necessary to insure the Contractor against its liability as ship 
repairer in the amount of $300,000, or the value of the vessel as 
determined by the Contracting Officer, whichever is the lesser, with 
respect to each vessel on which work is performed. The Contractor shall 
cause the Government to be named as an additional insured under any and 
all liability insurance policies. However, at the discretion of the 
Contracting Officer, such insurance need not be procured whenever the 
job order requires work on parts of a vessel only and the work is to be 
performed at a plant other than the site of the vessel. Further, the 
Contractor shall procure and maintain in force Workmen's Compensation 
Insurance (or its equivalent) covering its employees engaged in the work 
and shall insure the procurement and maintenance of such insurance by 
all subcontractors engaged in the work. The Contractor shall provide 
evidence of insurance as required by the Government.
    (e) The Contractor shall receive no allowance in the contract price 
for 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) As soon as practicable after the occurrence of any loss or 
damage the risk of which the Government has assumed, written notice of 
the damage shall be given by the Contractor to the Contracting Officer. 
The notice shall contain full particulars of the loss or damage. If 
claim is made or suit is brought thereafter against the Contractor as 
the result or because of such event, the Contractor shall immediately 
deliver to the Government every demand, notice, summons or other process 
received by it or its representatives. The Contractor shall cooperate

[[Page 651]]

with the Government and, upon the Government's request, shall assist in 
effecting settlements, securing and giving evidence; obtaining the 
attendance of witnesses and in the conduct of suits. The Government 
shall pay to the Contractor the expense, other than the cost of 
maintaining the Contractor's usual organization, incurred in this 
assistance. Except at its own cost, the Contractor shall not voluntarily 
make any payment, assume any obligation or incur any expense not 
imperative for the protection of the vessel or vessels at the time of 
the event.

                             (End of clause)



1352.217-97  Title.

    As prescribed in 1317.7001(a), insert the following clause:

                   Title (CAR 1352.217-97) (JAN 1987)

    Unless title to materials and equipment acquired or produced for, or 
allocated to, the performance of this contract shall have vested 
previously in the Government by virtue of other provisions of this 
contract, title to all materials and equipment to be incorporated in any 
vessel or part thereof, or to be placed upon any vessel or part hereof 
in accordance with the requirements of the contract, shall vest in the 
Government upon delivery thereof at the plant or such other location as 
may be specified in the contract for the performance of the work. 
However, the Contractor is fully responsible for all such Contractor 
furnished materials and equipment or the restoration of any damaged 
work. It is expressly understood and agreed that the Contractor shall 
assume without limitation the risk of loss for any such materials and 
equipment until such time as all work is completed and accepted by the 
Government and the vessel is redelivered to the Government. Upon 
completion of the contract, or with the approval of the Contracting 
Officer at any time during the performance of the contract, all such 
Contractor furnished materials and equipment not incorporated in any 
vessel or part thereof, or not placed upon any vessel or part thereof, 
in accordance with the requirements of the contract, shall become the 
property of the Contractor, except those materials and equipment the 
cost of which has been reimbursed by the Government to the Contractor.

                             (End of clause)



1352.217-98  Discharge of liens.

    As prescribed in 1317.7001(a), insert the following clause:

             Discharge of Liens (CAR 1352.217-98) (JAN 1987)

    The Contractor shall immediately discharge or cause to be discharged 
any lien or right in rem of any kind, other than in favor of the 
Government, which at any time exists or arises in connection with work 
done or materials furnished under any contract hereunder with respect to 
the machinery, fittings, equipment or materials for any of the vessels. 
If any such lien or right in rem is not immediately discharged, the 
Government may discharge or cause to be discharged such lien or right at 
the expense of the Contractor.

                             (End of clause)



1352.217-99  Department of Labor occupational safety and health standards 
for ship repairing.

    As prescribed in 1317.7001(a), insert the following clause:

 Department of Labor Occupational Safety and Health Standards for Ship 
                 Repairing (CAR 1352.217-99) (JAN 1987)

    Attention of the Contractor is directed to the Occupational Safety 
and Health Act of 1970 (29 U.S.C. 651-678), and to the Occupational 
Safety and Health Standards for Shipyard Employment (29 CFR 1915), 
promulgated under Pub. L. 85-742, amending Section 41 of the 
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 941), and 
adopted by the Department of Labor as occupational safety or health 
standards under Section 6(a) of the Occupation Safety and Health Act of 
1970 (29 CFR 1910.13). These regulations apply to all ship repair and 
related work, as defined in the regulations, performed under this 
contract on the navigable waters of the United States, including any dry 
dock or marine railway. Nothing contained in this contract shall be 
construed as relieving the Contractor from any obligations which it may 
have for compliance with the aforesaid regulations.

                             (End of clause)



1352.217-100  Regulations governing asbestos work.

    As prescribed in 1317.7001(a), insert the following clause:

    Regulations Governing Asbestos Work (CAR 1352.217-100) (JAN 1987)

    If asbestos is encountered, the Contractor shall follow the 
regulations contained in 29 CFR 1910.1001 (OSHA, Chapter XVII).

[[Page 652]]

                             (End of clause)



1352.217-101  Complete and final equitable adjustments.

    As prescribed in 1317.7001(a), insert the following clause:

 Complete and Final Equitable Adjustments (CAR 1352.217-101) (JAN 1987)

    Whenever the Contractor submits any claim for an equitable 
adjustment attributable to any fact or circumstance regarded as a change 
order whether formal or ``constructive,'' under the Changes clause or 
any other clause of this contract, such claim shall include all 
adjustments (including but not limited to adjustments arising out of 
delays or disruptions or both caused by such change order) to which the 
Contractor is entitled under this contract. The foregoing requirement 
shall not preclude the Contractor from revising or resubmitting the 
claim prior to agreement upon the equitable adjustment for the change 
order. However, unless otherwise expressly agreed in the aforesaid 
supplemental agreement, the Contractor shall waive any right under the 
Changes clause or any other clause of this contract to further equitable 
adjustments attributable to such facts or circumstances giving rise to 
the claim upon the execution of the supplemental agreement setting forth 
the equitable adjustment. In any event, such right shall be deemed to be 
waived.

                             (End of clause)



1352.217-102  Government review, comment, acceptance, and approval.

    As prescribed in 1317.7001(a), insert the following clause:

 Government Review, Comment, Acceptance and Approval (CAR 1352.217-102) 
                               (JAN 1987)

    (a) Documentation, including drawings and other engineering products 
and reports, required by the contract to be submitted for review, 
comment, acceptance or approval will be acted upon by the Government 
within 30 calendar days after receipt by the Government, unless another 
period of time is specified.
    (b) Review, comment, acceptance or approval by the Government as 
required under this contract and applicable specifications shall not 
relieve the Contractor of its obligation to comply with the 
specifications and with all other requirements of the contract, nor 
shall it impose upon the Government any liability it would not have had 
in the absence of such review, comment and acceptance or approval.

                             (End of clause)



1352.217-103  Access to the vessel(s).

    As prescribed in 1317.7001(a), insert the following clause:

          Access to the Vessel(s) (CAR 1352.217-103) (JAN 1987)

    (a) As authorized by the Contracting Officer, a reasonable number of 
officers, employees and associates of the Government, or other prime 
Contractors with the Government and their subcontractors shall have 
admission to the plant and access to the vessel(s) at all reasonable 
times to perform and fulfill their respective obligations to the 
Government on a noninterference basis. The Contractor shall make 
reasonable arrangements to provide access for these personnel to office 
space, work areas, storage or shop areas, and other facilities and 
services, reasonable and necessary to performance of their respective 
duties. All such personnel shall comply with Contractor rules and 
regulations governing personnel at its shipyard, including those 
regarding safety and security.
    (b) The Contractor further agrees to allow a reasonable number of 
officers, employees, and associates of offerors on other contemplated 
work, the same privileges of admission to the Contractor's plant and 
access to the vessel(s) on a noninterference basis subject to Contractor 
rules and regulations governing personnel in its shipyard, including 
those regarding safety and security.

                             (End of clause)



1352.217-104  Documentation of requests for equitable adjustment.

    As prescribed in 1317.7001(a), insert the following clause:

 Documentation of Requests for Equitable Adjustment (CAR 1352.217-104) 
                               (JAN 1987)

    (a) For the purpose of this clause, the term ``change'' includes not 
only a change made pursuant to a written order designated as a ``change 
order'' but also any act or omission to act on the part of the 
Government where a request is made for equitable adjustment.
    (b) Whenever the Contractor requests or proposes an equitable 
adjustment to the contract price of not more than $100,000, for a change 
or an act or omission on the part of the Government, the request shall 
include a breakdown of the price adjustment in such form and supported 
by such reasonable detail as the Contracting Officer may request. As a 
minimum, the Contractor shall provide a breakdown of direct labor hours, 
labor dollars, overhead, material, subcontracts, contingencies and 
profit for each change and a

[[Page 653]]

justification for any extension of delivery date.
    (c) Whenever the Contractor requests or proposes an equitable 
adjustment of $100,000 gross (aggregate increases and/or decreases) or 
more to the price of the contract for a change made pursuant to a 
written order designated as a ``change order'' or whenever the 
Contractor requests an equitable adjustment in any amount for any other 
act or omission to act on the part of the Government, the proposal 
supporting such request shall contain the following information for each 
individual item or element of the request:
    (1) A description of (i) the unperformed work required by the 
contract before the change which has been deleted by the change and (ii) 
the work deleted by the change that already has been completed in whole 
or in part. The description shall include a list of components, 
equipment, and other identifiable property involved. Also, the status of 
manufacture, procurement, or installation of such property shall be 
indicated. A separate description shall be furnished for design and 
production work. Items of raw material, purchased parts, components, and 
other identifiable hardware which are made excess by the change, and 
which are not to be retained by the Contractor, are to be listed for 
later disposition;
    (2) A description of the work necessary to undo work already 
completed which has been deleted by the change;
    (3) A description of the work substituted or added by the change 
that was not required by the terms of the contract before the change. A 
list of components and equipment (not bulk material or items) involved, 
should be included. A separate description shall be furnished for design 
work and production work;
    (4) A description of any interference or inefficiency encountered in 
performing the change;
    (5) A description of disruption attributable solely to the change, 
which shall include the following information:
    (i) A specific description of each element of disruption which 
states how the work has been, or will be, disrupted;
    (ii) The calendar time period when disruption occurred, or will 
occur;
    (iii) The area(s) aboard ship where disruption occurred, or will 
occur;
    (iv) The trade(s) disrupted, with a breakdown of man-hours for each 
trade;
    (v) The scheduling of trades before, during, and after the period of 
disruption;
    (vi) A description of measures taken to lessen the disruptive effect 
of the change.
    (6) The delay in delivery attributable solely to the change;
    (7) A description of other work attributed to the change;
    (8) A narrative statement of the direct causal relationship between 
any alleged Government act or omission and the claimed result, cross-
referenced to the detailed information required above.
    (9) A statement setting forth a comparative enumeration of the 
amounts ``budgeted'' for the cost elements, including the materials 
cost, labor hours, and indirect costs pertinent to the change estimated 
by the Contractor in preparing his initial and ultimate proposal(s) for 
this contract, and the amounts claimed to have been incurred, or 
projected to be incurred, corresponding to each such ``budgeted cost'' 
element.
    (d) In addition to the information required by paragraph (b), each 
proposal submitted in support of a claim for equitable adjustment in the 
amount of $100,000 or more under any provision of this contract shall 
contain a duly executed Standard Form 1411 (Contract Pricing Proposal) 
for each individual claim item. The submitted Standard Form 1411 shall 
fully comply with Section 15.804-6 of the Federal Acquisition Regulation 
and any instructions on the reverse side of the form.
    (e) In addition to the information required by paragraph (c), each 
proposal submitted in support of a claim for equitable adjustment under 
any provision of this contract shall contain a duly executed SF-1411 
(Contracting Pricing Proposal) for each individual claim item. The 
submitted SF-1411 shall fully comply with Section 15.804-6 of the 
Federal Acquisition Regulation and any instructions on the reverse side 
of the form.
    (f) Individual claims for equitable adjustment may not encompass all 
of the factors listed in (c) above. Accordingly, the Contractor is 
required to set forth in his proposal information only with respect to 
those factors which are encompassed in the individual claim for 
equitable adjustment. In any event, the information furnished hereunder 
shall be in sufficient detail to permit the Contracting Officer to 
correlate the claimed increased costs or delay in delivery set forth in 
the SF-1411 (Contracting Pricing Proposal) with the information 
submitted pursuant to paragraph (c).

                             (End of clause)



1352.217-105  Change proposals.

    As prescribed in 1317.7001(a), insert the following clause:

             Change Proposals (CAR 1352.217-105) (JAN 1987)

    (a)(1) In addition to issuing changes under the Changes clause, the 
Contracting Officer may propose changes within the general scope of this 
contract, as set forth below. Within 10 days from the date of receipt of 
any such proposed change, or within such further time as the Contracting 
Officer may

[[Page 654]]

allow, the Contractor shall submit a scope of work, plans and sketches 
for the proposed change, and his estimate of: (i) the cost, (ii) the 
effect on the delivery date of the vessel, and (iii) the status of work 
on the ship affected by the proposed change. The proposed scope of work 
and estimate of the cost shall be in such form and supported by such 
reasonably detailed information as the Contracting Officer may require.
    (2) The Contractor's estimate shall be a firm offer for 30 days from 
receipt thereof by the cognizant Contracting Officer, unless extended by 
mutual consent. Within the time limit, the Contractor agrees to either 
(i) enter into a supplemental agreement covering the estimate as 
submitted or (ii) begin good faith negotiations at the request of the 
Contracting Officer, leading to the execution of a bilateral 
supplemental agreement, if the estimate as submitted is not satisfactory 
to the Contracting Officer. In either case, the supplemental agreement 
shall include an equitable adjustment for the preparatory work set forth 
above.
    (b) Pending execution of a bilateral agreement or the direction of 
the Contracting Officer pursuant to the Changes clause, the Contractor 
shall proceed diligently with contract performance without regard to the 
effect of any such proposed change.
    (c) Concurrently with the submission of any Change Proposal under 
this contract in which the proposed aggregate cost is $100,000 or 
greater, the Contractor shall submit to the Contracting Officer a 
completed Standard Form 1411. At the time of agreement upon the price of 
the Change Proposal, the Contractor shall submit a signed Certificate of 
Current Cost or Pricing Data.

                             (End of clause)



1352.217-106  Lay days.

    As prescribed in 1317.7001(a), insert the following clause:

                 Lay Days (CAR 1352.217-106) (JAN 1987)

    (a) Lay day time will be paid for by the Government at the 
Contractor's stipulated bid price for this item of the contract when the 
vessel remains on the dry dock or marine railways as a result of any 
Government change that involves work in addition to that required under 
the basic contract.
    (b) No amount for lay day time shall be paid until all accepted 
items of the basic contract for which a price was established by the 
Contractor and for which docking of the vessel was required have been 
satisfactorily completed.
    (c) Days of hauling out and floating, whatever the hour, shall not 
be paid as lay day time, and days when no work is performed by the 
Contractor shall not be paid as lay day time.
    (d) Payment of lay day time shall constitute complete compensation 
for all costs except for the direct cost of performing the changed work.

                             (End of clause)



1352.217-107  Changes--ship repair.

    As prescribed in 1317.7001(a), insert the following clause:

           Changes--Ship Repair (CAR 1352.217-107) (JAN 1987)

    (a) The Contracting Officer may at any time, by written order, and 
without notice to the sureties, if any, make changes within the general 
scope of this contract, in any one or more of the following:
    (1) Drawings, designs, or specifications, when the supplies to be 
furnished are to be specially manufactured for the Government in 
accordance with the drawings, designs, or specifications;
    (2) Method of shipment or packing;
    (3) Place of performance of the work;
    (4) Time of commencement or completion of the work; and
    (5) Other requirements within the general scope of the contract.
    (b) If any such change causes an increase or decrease in the cost 
of, or the time requried for, performance of any part of the work under 
this contract, whether changed or not changed by the order, the 
Contracting Officer shall make an equitable adjustment in the contract 
price, the delivery schedule, or both, and shall modify the contract.
    (c) The Contractor must submit any proposal for adjustment 
(hereafter referred to as proposal) under this clause within 10 days 
from the date of receipt of the written order. However, if the 
Contracting Officer decides that the facts justify it, the Contracting 
Officer may receive and act upon a proposal submitted before final 
payment of the contract.
    (d) If the Contractor's proposal includes the cost of property made 
obsolete or excess by the change, the Contracting Officer shall have the 
right to prescribe the manner of the disposition of the property.
    (e) Failure to agree to any adjustment shall be a dispute under the 
Disputes clause. However, nothing in this clause shall excuse the 
Contractor from proceeding with the contract as changed.

                             (End of clause)



1352.217-108  Default--ship repair.

    As prescribed in 1317.7001(a), insert the following clause:

[[Page 655]]

           Default--Ship Repair (CAR 1352.217-108) (JAN 1987)

    (a) The Government may, subject to paragraphs (c) and (d) of this 
clause, by written notice of default to the Contractor, terminate this 
contract in whole or in part if the Contractor fails to--
    (1) Deliver the supplies or to perform the services within the time 
specified in this contract or any extension;
    (2) Make progress, so as to endanger performance of this contract; 
or
    (3) Perform any of the other provisions of this contract.
    (b) If the Government terminates this contract in whole or in part, 
it may arrange for completion of the work in the manner the Contracting 
Officer considers appropriate. The Contracting Officer may designate any 
plant or plants for completion of the work, including the Contractor's 
plant or plants. If the work is to be completed at the Contractor's 
plant, the Government may use all tools, machinery, facilities and 
equipment of the Contractor which the Contracting Officer determines to 
be necessary. The Contractor will be liable to the Government for any 
excess costs, other than those costs attributable to changes in the 
plans or specifications made after the termination date. However, the 
Contractor shall continue the work not terminated.
    (c) Except for defaults of subcontractors at any tier, the 
Contractor shall not be liable for any excess costs if the failure to 
perform the contract arises from causes beyond the control and without 
the fault or negligence of the Contractor. Examples of such causes 
include (1) acts of God or of the public enemy, (2) acts of the 
Government in either its sovereign or contractual capacity, (3) fires, 
(4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) 
freight embargoes, and (9) unusually severe weather. In each instance 
the failure to perform must be beyond the control and without the fault 
or negligence of the Contractor.
    (d) If the failure to perform is caused by the default of a 
subcontractor at any tier, and if the cause of the default is 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 subcontracted supplies 
or services were obtainable from other sources in sufficient time for 
the Contractor to meet the required delivery schedule.
    (e) If this contract is terminated for default, the Government may 
require the Contractor to transfer title and deliver to the Government, 
as directed by the Contracting Officer, any (1) completed supplies, and 
(2) partially completed supplies and materials, parts, tools, dies, 
jigs, fixtures, plans, drawings, information, and contract rights 
(collectively referred to as ``manufacturing materials'' in this clause) 
that the Contractor has specifically produced or acquired for the 
terminated portion of this contract. Upon direction of the Contracting 
Officer, the Contractor shall also protect and preserve property in its 
possession in which the Government has an interest.
    (f) The Government shall pay contract price for completed supplies 
delivered and accepted. The Contractor and Contracting Officer shall 
agree on the amount of payment for manufacturing materials delivered and 
accepted and for the protection and preservation of the property. 
Failure to agree will be a dispute under the Disputes clause. The 
Government may withhold from these amounts any sum the Contracting 
Officer determines to be necessary to protect the Government against 
loss because of outstanding liens or claims of former lien holders.
    (g) If, after termination, 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 termination had 
been issued for the convenience of the Government.
    (h) The rights and remedies of the Government in this clause are in 
addition to any other rights and remedies provided by law or under this 
contract.

                             (End of clause)



1352.217-109  Insurance requirements.

    As prescribed in 1317.7001(b), insert the following clause:

          Insurance Requirements (CAR 1352.217-109) (JAN 1987)

    (a) The Contractor shall procure and thereafter maintain the 
following insurance:
    (1) Ship repairer's legal liability insurance to insure the risks 
described in paragraph (b) of the Liability and Insurance clause. This 
insurance shall be for $300,000.
    (2) Comprehensive general liability insurance and automobile 
insurance to insure the risks described in paragraph (c) of the 
Liability and Insurance clause. This insurance shall be for $300,000 on 
account of any one accident or occurrence with respect to each vessel, 
boat, and/or barge upon which work is performed. The Contractor shall 
cause the Government to be named as an additional insured under any and 
all liability insurance policies.
    (3) Full coverage in accordance with the State Workmen's 
Compensation law; and
    (4) Full coverage in accordance with the United States 
Longshoremen's and Harbor Worker's Act.
    (b) As evidence that it has obtained the insurance specified in (a) 
above, the Contractor shall furnish the Contracting Officer with a 
certificate or certificates executed by

[[Page 656]]

an agent of the insurer authorized to execute such certificates. Such 
certificates shall be furnished prior to commencement of the work. Each 
certificate shall state that (name of insurer) has insured (name of 
Contractor) awarded contract number ---------- for repair/alteration of 
(name of vessel) in accordance with the Liability and Insurance clause 
and the Insurance Requirements clause contained herein. Each certificate 
shall set forth that each policy of insurance represented thereby will 
expire on (date) and that each such policy contains the following 
clause:
    ``It is agreed that in the event of cancellation, or any material 
change in the policy adversely affecting the interest of the Government 
in this insurance 30 days prior written notice will be given to the 
Contracting Officer.''

                             (End of clause)



1352.217-110  Guarantees.

    As prescribed in 1317.7001(c), insert the following clause:

                Guarantees (CAR 1352.217-110) (JAN 1987)

    In case any work done or materials furnished by the Contractor under 
this contract on or for any vessel or the equipment thereof shall, 
within 90 days from the date of redelivery of the vessel by the 
Contractor, prove defective or deficient, such defects or deficiencies 
shall, as required by the Government in writing, be corrected and 
repaired by the Contractor or at Contractor expense to the satisfaction 
of the Contracting Officer. However, the Government shall be entitled to 
rely upon any guarantee secured by the Contractor or any subcontractor 
covering work done on materials furnished which exceeds the 90-day 
period until the expiration. Also, with respect to any individual work 
item identified and listed as incomplete at the redelivery of the 
vessel, the guarantee period shall run from the date of completion of 
such item. If and when practicable, the Government shall afford the 
Contractor an opportunity to effect such corrections and repairs itself. 
But, when it is impracticable or undesirable to return it to the 
Contractor, or the Contractor fails to proceed promptly with any such 
repairs as directed by the Contracting Officer, the corrections and 
repairs shall be made at Contractor expense at other Government 
designated locations. Where corrections and repairs are to be made by 
other than the Contractor, due to non-return of the vessel to the 
Contractor, the Contractor's liability may be discharged by an equitable 
deduction in the price of the contract. The Contractor's liability shall 
only extend for an additional 90-day guarantee period on those defects 
or deficiencies which it corrected and in no event to those for which 
payment was made. However, this clause does not limit the responsibility 
or relieve the liability of the Contractor under the Liability and 
Insurance clause. At the Contracting Officer's option, defects and 
deficiencies may be left in their uncorrected condition. In that event, 
the Contractor and the Contracting Officer shall agree on an equitable 
deduction from the contract price. If the Contractor and the Contracting 
Officer fail to agree upon an equitable deduction from the contract 
price, the dispute shall be determined in accordance with the Disputes 
clause.

                             (End of clause)



1352.217-111  Temporary services.

    As prescribed in 1317.7001(d), insert the following clause:

            Temporary Services (CAR 1352.217-111) (JAN 1987)

    (a) Temporary services are services incidental to the performance of 
work which are required in the schedule or specifications to be provided 
by the contractor. Temporary services may include the furnishing of 
water, electricity, telephone service, toilet facilities, garbage 
removal, office space, parking places, or similar facilities as 
specified in the schedule or specifications.
    (b) If performance time is extended due to Government caused delay 
or causes beyond the control of both the contractor and subcontractor, 
and without the fault or negligence of either, the contractor shall have 
the right to request an equitable adjustment for providing temporary 
services in excess of the number of estimated days contained in the 
schedule. Any such equitable adjustment shall not exceed the amount 
obtained by multiplying the number of excess days by the contractor's 
unit price contained in the schedule for this item.

                             (End of clause)



1352.217-112  Self-insurance information.

    As prescribed in 1317.7001(e), insert the following provision:

        Self-Insurance Information (CAR 1352.217-112) (JAN 1987)

    An offeror who proposes to self-insure for any or all of the risks 
set forth in the Liability and Insurance clause and the Insurance 
Requirements clause shall submit satisfactory evidence to permit the 
Contracting Officer to determine that the offeror's assets are 
sufficient for the risks set forth in such clauses. The offeror shall 
submit with its offer 2 certified copies of documents listing

[[Page 657]]

its assets and liabilities and other information deemed necessary by the 
offeror or required by the Contracting Officer. For approval of self-
insurance under the State Workmen's Compensation Law and the United 
States Longshoremen's and Harbor Workers' Act, evidence of 
qualifications as a self-insurer under the applicable compensation 
statute must be furnished to the Contracting Officer.

                           (End of provision)



1352.233-2  Service of protest.

    As prescribed in 1333.106, insert the following provision:

         Service of Protest (JAN 1985) (Deviation FAR 52.233-2)

    Protests, as defined in 33.101 of the Federal Acquisition 
Regulation, shall be served on the Contracting Officer and the Contract 
Law Division of the Office of the Assistant General Counsel for Finance 
and Litigation by obtaining written and dated acknowledgement of receipt 
from the Contracting Officer or the head of the contracting office or 
designee and from the Contract Law Division of the Office of the 
Assistant General Counsel for Finance and Litigation located at the U.S. 
Department of Commerce, Herbert C. Hoover Building, Room H5882, 14th St. 
between Pennsylvania and Constitution Avenues, NW., Washington, DC 
20230.

    [Insert the address of the contracting officer or refer to the 
number of the block on the Standard Form 33 or 1442, etc., where the 
address of the contracting offfice is located.]

                           (End of provision)

[51 FR 15333, Apr. 23, 1986]



PART 1353_FORMS--Table of Contents




Sec.
1353.000 Scope of part.

                         Subpart 1353.1_General

1353.103 Exceptions.

                  Subpart 1353.2_Prescription of Forms

1353.200 Scope of subpart.
1353.204 Administrative matters.
1353.204-2 Contract reporting (CD 409).
1353.213 Small purchase and other simplified purchase procedures (CD 
          404).
1353.232 Contract financing.
1353.232-2 (CD 45).

    Authority: Federal Property and Administrative Services Act of 1949, 
as amended (40 U.S.C. 486(c)), as delegated by the Secretary of Commerce 
in Department Organization Order 10-5 and Department Administrative 
Order 208-2.

    Source: 49 FR 12965, Mar. 30, 1984, unless otherwise noted.



1353.000  Scope of part.

    This part supplements FAR Part 53 by prescribing specific exceptions 
to FAR prescribed forms for Department-wide use.



                         Subpart 1353.1_General



1353.103  Exceptions.

    The Department's policy is to use the FAR and CAR prescribed forms 
unless prior specific authority for exceptions or alterations has been 
obtained. Requests for exceptions to FAR or CAR forms shall be submitted 
to the Office of Procurement and Federal Assistance in the form 
prescribed by FAR 53.103 (See 1301.4 for authority to deviate).



                  Subpart 1353.2_Prescription of Forms



1353.200  Scope of subpart.

    This subpart prescribes forms for Department-wide use which are 
exceptions to FAR prescribed forms. This subpart is arranged by subject 
matter, in the same order and keyed to the parts of the FAR or CAR in 
which the form use requirements are addressed.



1353.204  Administrative matters.



1353.204-2  Contract reporting (CD 409).

    (a) CD 409 (11/84) Report of Individual Procurement (over $10,000). 
CD 409 is prescribed for Department-wide use in reporting individual 
contract actions above $10,000, in lieu of SF 279.

[50 FR 19364, May 8, 1985, and 51 FR 1377, Jan. 13, 1986]



1353.213  Small purchase and other simplified purchase procedures (CD 404).

    (e) CD 404 (1/84) Supply, Equipment of Service Order. In lieu of OFs 
347 and 348, CD 404 is prescribed for Department-wide use as follows:
    (1) To accomplish small purchases
    (2) To issue orders under basic ordering agreements

[[Page 658]]

    (3) To issue orders for paid advertisements
    (4) To issue orders for construction or dismantling, demolition, or 
removal of improvements.

[50 FR 19365, May 8, 1985, and 51 FR 1377, Jan. 13, 1986]



1353.232  Contract financing.

    A Department approved procurement request form certifies the 
availability of adequate funds for contract actions (See FAR 32.702). 
The Department's procurement request form also transmits technical and 
other specifications of the request, administrative approvals and 
clearances, and information for processing payments.

[50 FR 19365, May 8, 1985, and 51 FR 1377, Jan. 13, 1986]



1353.232-2  (CD 45).

    CD 45 (3/76) Requisitioning Form. CD 45 is prescribed for 
Department-wide use in requesting action from the servicing contract 
office. This form is the vehicle for administrative approvals, 
clearances, and certification of the availability of adequate funds as 
specified in FAR 32.702.

[[Page 659]]



                 CHAPTER 14--DEPARTMENT OF THE INTERIOR




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
1401            Department of the Interior Acquisition 
                    Regulation System.......................         661
1403            Improper business practices and personal 
                    conflicts of interest...................         661
              SUBCHAPTER B--ACQUISITION PLANNING [RESERVED]
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
1415            Contracting by negotiation..................         663
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
1426            Other socio-economic programs...............         664
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
1428            Bonds and insurance.........................         666
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
1437            Utilization of woody biomass................         667
              SUBCHAPTER G--CONTRACT MANAGEMENT [RESERVED]
                     SUBCHAPTER H--CLAUSES AND FORMS
1452            Solicitation provisions and contract clauses         669
1453-1499       [Reserved]

[[Page 661]]



                          SUBCHAPTER A_GENERAL





PART 1401_DEPARTMENT OF THE INTERIOR ACQUISITION REGULATION SYSTEM
--Table of Contents




               Subpart 1401.1_Purpose, Authority, Issuance

Sec.
1401.106 OMB approval under the Paperwork Reduction Act.

              Subpart 1401.3_Agency Acquisition Regulations

1401.303 Publication and codification.

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 U.S.C. 
301.

    Source: 49 FR 14252, Apr. 10, 1984, unless otherwise noted.



               Subpart 1401.1_Purpose, Authority, Issuance



1401.106  OMB approval under the Paperwork Reduction Act.

    The information collection and recordkeeping requirements have been 
approved by the Office of Management and Budget (OMB) as required by the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The following 
OMB control numbers apply:

------------------------------------------------------------------------
                     DIAR segment                        OMB control No.
------------------------------------------------------------------------
1452.226-70...........................................         1084-0019
------------------------------------------------------------------------


[62 FR 18054, Apr. 14, 1997, as amended at 62 FR 52266, Oct. 7, 1997]



              Subpart 1401.3_Agency Acquisition Regulations



1401.303  Publication and codification.

    (a)(1) Implementing and supplementing regulations issued under the 
DAIR System are codified under chapter 14 in title 48, Code of Federal 
Regulations and shall parallel the FAR in format, arrangement, and 
numbering system.
    (2)(i) Departmentwide regulations are assigned parts 1401 through 
1499 under 48 CFR, chapter 14.
    (ii) Where material in the FAR requires no implementation, there 
will be no corresponding number in the DIAR. Thus, there are gaps in the 
DIAR sequence of numbers where the FAR, as written, is deemed adequate. 
Supplementary material shall be numbered as specified in FAR 1.303.
    (3)(i) Bureauwide regulations are authorized for codification in 
appendices to chapter 14 as assigned by the Director, PAM.
    (ii) Regulations implementing the FAR or DIAR are numbered using 
parts 1401 through 1479. Supplementary material is numbered using parts 
1480 through 1499. Numbers for implementing or supplementing regulations 
by bureaus/offices are preceded by a prefix to the number 14 (indicating 
chapter 14--DIAR) for the organization indicated by lettered appendices 
as follows:
    (A) Bureau of Indian Affaris--BIA
    (B) Bureau of Reclamation--WBR
    (C) Interior Service Center--ISC
    (D) Bureau of Land Management--LLM
    (E) U.S. Geological Survey--WGS
    (F) Office of Surface Mining Reclamation and Enforcement--LSM
    (G) U.S. Minerals Management Service--LMS
    (H) National Park Service--FNP
    (I) U.S. Fish and Wildlife Service--FWS
    (e.g., FAR 1.3 then DIAR 1401.3 [Department level] then in appendix 
A, BIA 1401.3 [Bureau level])
    (b) [Reserved]

[62 FR 18054, Apr. 14, 1997]



PART 1403_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




            Subpart 1403.5_Other Improper Business Practices

Sec.
1403.570 Restrictions on contractor advertising.
1403.570-1 Policy.
1403.570-3 Contract clause.

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 U.S.C. 
301.

    Source: 61 FR 5519, Feb. 13, 1996, unless otherwise noted.

[[Page 662]]



            Subpart 1403.5_Other Improper Business Practices



1403.570  Restrictions on contractor advertising.



1403.570-1  Policy.

    Award of a contract does not signify endorsement of the supplies or 
services purchased, nor does it signify agreement with any views 
espoused by officials of the awards. It is vital to the integrity of the 
procurement system to avoid even the appearance of an improper 
preference toward a particular vendor. Therefore, contractors shall not 
be permitted to publicize, or otherwise circulate, promotional materials 
which state or imply Governmental endorsement of a product, service or 
position which the contractor represents.



1403.570-3  Contract clause.

    CO's shall include the clause at 48 CFR 1452.203-70, Restriction on 
Endorsements, in all solicitations, contracts and agreements which are 
not executed in accordance with SAT procedures.



              SUBCHAPTER B_ACQUISITION PLANNING [RESERVED]



[[Page 663]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 1415_CONTRACTING BY NEGOTIATION--Table of Contents




           Subpart 1415.1_General Requirements for Negotiation

Sec.
1415.106 Contract clauses.
1415.106-70 Examination of records by the Department of the Interior 
          clause.

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 U.S.C. 
301.

    Source: 49 FR 14259, Apr. 10, 1984, unless otherwise noted.



           Subpart 1415.1_General Requirements for Negotiation



1415.106  Contract clauses.



1415.106-70  Examination of records by the Department of the Interior 
clause.

    The contracting officer shall insert the clause at 1452.215-70, 
Examination of Records by the Department of the Interior, in all 
contracts requiring the clause a FAR 52.215-1, Examination of Records by 
the Comptroller General, as prescribed in FAR 15.106-1(b).

[[Page 664]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 1426_OTHER SOCIO-ECONOMIC PROGRAMS--Table of Contents




                    Subpart 1426.70_Indian Preference

Sec.
1426.7000 Scope of subpart.
1426.7001 Definitions.
1426.7002 Statutory requirements.
1426.7003 Applicability and contract clause.
1426.7004 Compliance enforcement.
1426.7005 Tribal preference requirements.

    Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c) and 5 U.S.C. 
301); Pub. L. 93-638, 88 Stat. 2205 (25 U.S.C. 450e(b)).

    Source: 60 FR 53279, Oct. 13, 1995, unless otherwise noted.



                    Subpart 1426.70_Indian Preference



1426.7000  Scope of subpart.

    This subpart prescribes policies and procedures for implementation 
of section 7(b) of the Indian Self-Determination and Education 
Assistance Act (Public Law 93-638, 88 Stat. 2205, 25 U.S.C. 450e(b)).



1426.7001  Definitions.

    For purposes of this subpart the following definitions shall apply:
    Indian means a person who is a member of an Indian Tribe. If the 
contractor has reason to doubt that a person seeking employment 
preference is an Indian, the contractor shall grant the preference but 
shall require the individual within thirty (30) days to provide evidence 
from the Tribe concerned that the person is a member of the Tribe.
    Indian organization means that governing body of any Indian Tribe or 
entity established or recognized by such governing body in accordance 
with the Indian Financing Act of 1974 (Pub. L. 93-262, 88 Stat. 77; 25 
U.S.C. 1451).
    Indian-owned economic enterprise means any Indian-owned commercial, 
industrial, or business activity established or organized for the 
purpose of profit provided that such Indian ownership shall constitute 
not less than 51 percent of the enterprise.
    Indian reservation includes Indian reservations, public domain 
Indian allotments, former Indian reservations in Oklahoma, and land held 
by incorporated Native groups, regional corporations, and village 
corporations under the provisions of the Alaska Native Claims Settlement 
Act, (Pub. L. 92-203, 85 Stat. 688; 43 U.S.C. 1601 et seq.).
    Indian Tribe means an Indian Tribe, band, nation, or other 
recognized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (Pub. L. 92-203, 85 Stat. 688; 
43 U.S.C. 1601), which is recognized as eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians.
    On or near an Indian reservation means on a reservation or the 
distance within that area surrounding an Indian reservation(s) that a 
persons seeking employment could reasonably be expected to commute to 
and from in the course of a work day.



1426.7002  Statutory requirements.

    Section 7(b) of the Indian Self-Determination and Education 
Assistance Act requires that any contract or subcontract entered into 
pursuant to that Act, the Act of April 16, 1934 (48 Stat. 596; 25 U.S.C. 
452), as amended, (the Johnson-O'Malley Act), or any other Act 
authorizing contracts with Indian organizations or for the benefit of 
Indians shall require that, to the greatest extent feasible:
    (a) Preferences and opportunities for training and employment in 
connection with the administration of such contracts shall be given to 
Indians, and
    (b) Preference in the award of subcontracts in connection with the 
administration of such contracts shall be given to Indian organizations 
and to Indian-owned economic enterprises as defined in section 3 of the 
Indian Financing Act of 1974 (Sec. 3, Pub. L. 93-262; 88 Stat. 77; 25 
U.S.C. 1452).

[[Page 665]]



1426.7003  Applicability and contract clause.

    (a) The Contracting Officer (CO) shall insert the clause at 
1452.226-70, Indian Preference--Department of the Interior, in 
solicitations issued and contracts awarded by
    (1) The Bureau of Indian Affairs,
    (2) A contracting activity other than the Bureau of Indian Affairs 
when the contract is entered into pursuant to an act specifically 
authorizing contracts with Indian organizations and
    (3) A contracting activity other than the Bureau of Indian Affairs 
where the work to be performed is specifically for the benefit of 
Indians and is in addition to any incidental benefits which might 
otherwise accrue to the general public.
    (b) The CO shall insert the clause at 1452.226-71, Indian Preference 
Program--Department of the Interior, in all solicitations issued and 
contracts awarded by a contracting activity which may exceed $50,000, 
which contain the clause required by paragraph (a) of this section and 
where it is determined by the CO, prior to solicitation, that the work 
under the contract will be performed in whole or in part on or near an 
Indian reservation(s). The Indian Preference Program clause may also be 
included in solicitations issued and contracts awarded by a contracting 
activity which may not exceed $50,000, but which contain the clause 
required by paragraph (a) of this section and which, in the opinion of 
the CO, offer substantial opportunities for Indian employment, training 
or subcontracting.



1426.7004  Compliance enforcement.

    (a) The CO is responsible for conducting periodic reviews of the 
contractor to ensure compliance with the requirements of the clauses 
prescribed in 1426.7003. These reviews may be conducted with the 
assistance of the Indian Tribe(s) concerned.
    (b) Complaints of noncompliance with the requirements of the clauses 
prescribed under 1426.7003 which are received in writing by the 
contracting activity shall be promptly investigated by the CO and a 
written disposition of the complaint shall be prepared.



1426.7005  Tribal preference requirements.

    (a) Where the work under a contract is to be performed on an Indian 
reservation, the CO may supplement the clause at 1452.226-71, Indian 
Preference Program--Department of the Interior, by adding specific 
Indian preference requirements of the Tribe on whose reservation the 
work is to be performed. The supplemental requirements shall be jointly 
developed for the contract by the CO and the Tribe. Supplemental 
preference requirements must represent a further implementation of the 
requirements of section 7(b) of Public Law 93-638 and must be approved 
by the SOL for legal sufficiency before being added to a solicitation 
and resultant contract. Any supplemental preference requirements to be 
added to the clause at 1452.226-71 shall be included in the solicitation 
and clearly identified in order to ensure uniform understanding of the 
additional requirements by all prospective bidders or offerors.
    (b) Nothing in this subpart shall be interpreted to preclude Tribes 
from independently developing and enforcing their own tribal preference 
requirements. Such independently developed tribal preference 
requirements shall not, except as provided in paragraph (a) of this 
section, become a requirement in contracts covered under this subpart 
1426.70 and must not hinder the Government's right to award contracts 
and to administer their provisions.

[[Page 666]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 1428_BONDS AND INSURANCE--Table of Contents




                        Subpart 1428.3_Insurance

Sec.
1428.301 Policy.
1428.306 Insurance under fixed-price contracts.
1428.306-70 Insurance for aircraft services contracts.
1428.311 Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.
1428.311-2 Contract clause.

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c) and 5 U.S.C. 
301.

    Source: 60 FR 53280, Oct. 13, 1995, unless otherwise noted.



                        Subpart 1428.3_Insurance



1428.301  Policy.

    It is the policy of DOI to insure its own risks only when such 
action is in the best interest of the Government. Circumstances where 
contractors are required to carry insurance are listed under FAR 28.301 
and 28.306. In these circumstances, the CO shall insert the clause at 
1452.228-70, Liability Insurance--Department of the Interior, in 
solicitations and contracts.



1428.306  Insurance under fixed-price contracts.



1428.306-70  Insurance for aircraft services contracts.

    (a) Policy. The CO shall insert minimum insurance requirements in 
aircraft services contracts in order to protect the Government and its 
contractors.
    (b) Applicability. The clauses prescribed by paragraph (c) of this 
section are applicable to all fixed-price contracts involving use of 
aircraft with either a contractor-furnished or a Government-furnished 
pilot except for one-time charters when Government exposure is minimal 
and time limitations are present.
    (c) Clauses. The following clauses shall be used as prescribed:
    (1) The CO shall insert the clause at 1452.228-71, Aircraft and 
General Public Liability Insurance--Department of the Interior, in 
solicitations and contracts when a fixed-price contract for operation of 
aircraft where the Government is using a contractor-furnished pilot is 
contemplated.
    (2) The CO shall insert the clause at 1452.228-72, Liability for 
Loss or Damage--Department of the Interior, in solicitations and 
contracts when a fixed-price contract for use of aircraft where the 
Government does not have a property interest and is using a Government-
furnished pilot is contemplated.
    (3) The CO shall insert the clause at 1452.228-73, Liability for 
Loss or Damage--Department of the Interior (Property Interest), in 
solicitations and contracts when a fixed-price contract for use of 
aircraft where the Government has a property interest in the aircraft 
and is using a Government-furnished pilot (e.g., a lease with purchase 
option) is contemplated.



1428.311  Solicitation provision and contract clause on liability insurance 
under cost-reimbursement contracts.



1428.311-2  Contract clause.

    The CO shall modify the clause at FAR 52.228-7, Insurance--Liability 
to Third Persons, in accordance with 1452.228-7, and insert in 
solicitations and contracts as prescribed in FAR 28.311-2.

[[Page 667]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 1437_UTILIZATION OF WOODY BIOMASS--Table of Contents




Sec.
1437.100 General.
1437.101 When can woody biomass be removed?
1437.102 When is the biomass clause required?
1437.103 Format of woody biomass utilization clause.
1437.104 Definitions.

    Authority: 30 U.S.C. 601-604, 611, as amended; 16 U.S.C. 668dd; 16 
U.S.C. 1; 25 U.S.C. 3101 et seq.; 43 U.S.C. 1701 et seq.

    Source: 69 FR 52609, Aug. 27, 2004, unless otherwise noted.



1437.100  General.

    This part establishes consistent and efficient procedures to allow 
contractors the option to remove woody biomass by-products from 
Department of the Interior land management activities where ecologically 
appropriate. If the woody biomass has fair market value and payment is 
required, or as required by regulation, Bureau policy or the Mineral 
Materials Disposal Act of 1947 (30 U.S.C. 601 et. seq), a separate 
timber/vegetative sales contract must be executed.



1437.101  When can woody biomass be removed?

    (a) The Department of the Interior allows and encourages contractors 
to remove and use woody biomass from project areas when:
    (1) The biomass is generated during land management service contract 
activity; and
    (2) Removal is ecologically appropriate.
    (b) A contractor removing biomass under this part shall:
    (1) Do so only within legal limits applicable to the contractor, 
including National Environmental Policy Act (NEPA) compliance; and
    (2) If required, comply with the terms, conditions and special 
provisions of the applicable timber/vegetative sales notice.



1437.102  When is the biomass utilization clause required?

    This section applies to any solicitation or contract that is 
expected to generate woody biomass that meets the requirements of Sec. 
1437.101 unless biomass removal is already required in the service 
contract. The agency contracting officer will:
    (a) Insert in the solicitation or contract the clause in Sec. 
1437.103;
    (b) Specify any limitations on types of woody biomass that may not 
be removed; and
    (c) Specify any areas from which woody biomass must not be removed.



1437.103  Format of woody biomass utilization clause.

    The contracting officer must insert a clause reading substantially 
as follows in each solicitation and contract that meets the criteria in 
Sec. 1437.101(a):

                      Utilization of Woody Biomass

    1. The contractor may remove and utilize woody biomass, if:
    (a) Project work is progressing as scheduled; and
    (b) Removal is completed before contract expiration.
    2. To execute this option, the contractor must submit a written 
request to the Government.
    3. Following receipt of the written request, and if appropriate, the 
Government and the contractor will negotiate and execute a separate 
timber/vegetative sales contract. Payment under this sales contract must 
be at a price equal to or greater than the appraised value before the 
removal of any woody biomass. The contractor must make any appropriate 
payment specified in this timber/vegetative sales contract.
    4. If required by law, regulation or Bureau policy, the Government 
will prepare a timber/vegetative sales notice and/or prospectus, 
including volume estimates, appraised value and any appropriate special 
provisions.
    5. The contractor must treat any woody biomass not removed in 
accordance with the specifications in the service contract.
    6. The sales contract and service contract are severable; default or 
termination under either contract does not remove the contractor from 
payment or performance obligations under the other contract.

[[Page 668]]



1437.104  Definitions.

    Ecologically appropriate means those situations where the Deciding 
Officer and/or Contracting Officer determine it is not necessary to 
retain specific woody material and/or reserve specific areas from woody 
biomass removal to meet ecological objectives. For example, it may be 
necessary to retain snags or small woody debris to meet wildlife habitat 
objectives, or to create specific prescribed burning conditions to 
stimulate native plant development; therefore it would not be 
appropriate to allow removal of the specified woody biomass.
    Timber/vegetative sales contract and/or notice means the agency-
specific authorized contract instrument for the sale, barter, exchange, 
billing or other compensation for the payment, removal, and/or 
transportation of woody biomass material.
    Woody biomass means the trees and woody plants, including limbs, 
tops, needles, leaves, and other woody parts, grown in a forest, 
woodland, or rangeland environment, that are the by-products of 
management, restoration and/or hazardous fuel reduction treatment.
    Woody biomass utilization or use means the harvest, sale, offer, 
trade, and/or utilization of woody biomass to produce the full range of 
wood products, including timber, engineered lumber, paper and pulp, 
furniture and value-added commodities, and bio-energy and/or bio-based 
products such as plastics, ethanol and diesel.



               SUBCHAPTER G_CONTRACT MANAGEMENT [RESERVED]



[[Page 669]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 1452_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




Sec.
1452.000 Scope of part.

             Subpart 1452.2_Texts of Provisions and Clauses

1452.200 Scope of subpart.
1452.203-70 Restriction on endorsements.
1452.215-70 Examination of records by the Department of the Interior.
1452.215-71 Use and disclosure of proposal information.
1452.226-70 Indian preference.
1452.226-71 Indian preference program.
1452.228-7 Insurance--liability to third persons.
1452.228-70 Liability insurance.
1452.228-71 Aircraft and general public liability.
1452.228-72 Liability for loss or damage.
1452.228-73 Liability for loss or damage (property interest).

    Authority: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c), and 5 U.S.C. 
301.

    Source: 49 FR 14267, Apr. 10, 1984, unless otherwise noted.



1452.000  Scope of part.

    This part prescribes Department of the Interior provisions and 
clauses for use in acquisition.



             Subpart 1452.2_Texts of Provisions and Clauses



1452.200  Scope of subpart.

    This subpart sets forth the texts of all DIAR provisions and 
clauses. Consistent with the numbering scheme prescribed in FAR 52.101 
and the approach used in Far Subpart 52.2, this subpart is arranged by 
subject matter, in the same order as, and keyed to, the parts of the 
DIAR in which provisions and clause requirements are addressed.



1452.203-70  Restriction on endorsements.

    As prescribed in 48 CFR 1403.570-3, insert the following clause in 
all solicitations, contracts and agreements which are expected to exceed 
the simplified acquisition threshold.

   Restriction on Endorsements--Department of the Interior (NOV 1995)

    The contractor shall not refer to contracts awarded by the 
Department of the Interior in commercial advertising, as defined in FAR 
31.205-1, in a manner which states or implies that the product or 
service provided is approved or endorsed by the Government, or is 
considered by the Government to be superior to other products or 
services. This restriction is intended to avoid the appearance of 
preference by the Government toward any product or service. The 
contractor may request a determination as to the propriety of 
promotional material from the CO.

                             (End of clause)

[61 FR 5520, Feb. 13, 1995]



1452.215-70  Examination of records by the Department of the Interior.

    As prescribed in 1415.106-1, insert the following clause in all 
contracts containing the clause at FAR 52.215-1, Examination of Records 
by the Comptroller General (see FAR 15.106-1(b)):

   Examination of Records by the Department of the Interior (APR 1984)

    For purposes of the Examination of Records by the Comptroller 
General (APR 1984) clause of this contract (FAR 52.214-1), the Secretary 
of the Interior, the Inspector General, and their duty authorized 
representative(s) from the Department of the Interior shall have the 
same access and examination rights as the Comptroller General of the 
United States.

                             (End of clause)



1452.215-71  Use and disclosure of proposal information.

    As prescribed in 1415.413-70, insert the following provision in 
requests for proposals and requests for quotations instead of the 
provision at FAR 52.215-12:

 Use and Disclosure of Proposal Information--Department of the Interior 
                               (APR 1984)

    (a) Definitions. For the purposes of this provision and the Freedom 
of Information Act (5 U.S.C. 552), the following terms shall have the 
meaning set forth below:
    (1) Trade Secret means an unpatented, secret, commercially valuable 
plan, appliance, formula, or process, which is used for making, 
preparing, compounding, treating or

[[Page 670]]

processing articles or materials, which are trade commodities.
    (2) Confidential commercial or financial information means any 
business information (other than trade secrets) which is exempt from the 
mandatory disclosure requirement of the Freedom of Information Act, 5 
U.S.C. 552. Exemptions from mandatory disclosure which may be applicable 
to business information contained in proposals include exemption (4), 
which covers ``commercial and financial information obtained from a 
person and privileged or confidential,'' and exemption (9), which covers 
``geological and geophysical information, including maps, concerning 
wells.''
    (b) If the offeror, or its subcontactor(s), believes that the 
proposal contains trade secrets or confidential commercial or financial 
information exempt from disclosure under the Freedom of Information Act, 
(5 U.S.C. 552), the cover page of each copy of the proposal shall be 
marked with the following legend:
    ``The information specifically identified on pages ---- of this 
proposal constitutes trade secrets or confidential commercial and 
financial information which the offeror believes to be exempt from 
disclosure under the Freedom of Information Act. The offeror requests 
that this information not be disclosed to the public, except as may be 
required by law. The offeror also requests that this information not be 
used in whole or part by the Government for any purpose other than to 
evaluate the proposal, except that if a contract is awarded to the 
offeror as a result of or in connection with the submission of the 
proposal, the Government shall have the right to use the information to 
the extent provided in the contract.''
    (c) The offeror shall also specifically identify trade secret 
information and confidential commerical and financial information on the 
pages of the proposal on which it appears and shall mark each such page 
with the following legend:
    ``This page contains trade secrets or confidential commercial and 
financial information which the offeror believes to be exempt from 
disclosure under the Freedom of Information Act and which is subject to 
the legend contained on the cover page of this proposal.''
    (d) Information in a proposal identified by an offeror as trade 
secret information or confidential commercial and financial information 
shall be used by the Government only for the purpose of evaluating the 
proposal, except that: (i) If a contract is awarded to the offeror as a 
result of or in connection with submission of the proposal, the 
Government shall have the right to use the information as provided in 
the contract, and (ii) if the same information is obtained from another 
source without restriction it may be used without restriction.
    (e) If a request under the Freedom of Information Act seeks access 
to information in a proposal identified as trade secret information or 
confidential commercial and financial information, full consideration 
will be given to the offeror's view that the information constitutes 
trade secrets or confidential commercial or financial information. The 
offeror will also be promptly notified of the request and given an 
opportunity to provide additional evidence and argument in support of 
its position, unless administratively unfeasible to do so. If it is 
determined that information claimed by the offeror to be trade secret 
information or confidential commercial or financial information is not 
exempt from disclosure under the Freedom of Information Act, the offeror 
will be notified of this determination prior to disclosure of the 
information.
    (f) The Government assumes no liability for the disclosure or use of 
information contained in a proposal if not marked in accordance with 
paragraphs (b) and (c) of this provision. If a request under the Freedom 
of Information Act is made for information in a proposal not marked in 
accordance with paragraphs (b) and (c) of this provision, the offeror 
concerned shall be promptly notified of the request and given an 
opportunity to provide its position to the Government. However, failure 
of an offeror to mark information contained in a proposal as trade 
secret information or confidential commercial or financial information 
will be treated by the Government as evidence that the information is 
not exempt from disclosure under the Freedom of Information Act, absent 
a showing that the failure to mark was due to unusual or extenuating 
circumstances, such as a showing that the offeror had intended to mark, 
but that markings were omitted from the offeror's proposal due to 
clerical error.

                           (End of provision)



1452.226-70  Indian preference.

    As prescribed in 1404.7003(a), insert the following clause in 
solicitations issued and contracts awarded (a) by the Bureau of Indian 
Affairs except those pursuant to Title I and to Indian Tribes and Indian 
Organizations under Title II of Pub. L. 93-638 (25 U.S.C. 450 et seq. 
and 25 U.S.C. 455 et seq., respectively); (b) a contracting activity 
other than the Bureau of Indian Affairs when the contract is entered 
into pursuant to an act specifically authorizing contracts with Indian 
organizations, and (c) a contracting activity other than the Bureau of 
Indian Affairs when the work to be performed is specifically for the 
benefit of Indians and is in addition

[[Page 671]]

to any incidental benefits which might otherwise accrue to the general 
public.

        Indian Preference--Department of the Interior (APR 1984)

    (a) The Contractor agrees to give preferences to Indians who can 
perform the work required regardless of age (subject to existing laws 
and regulations), sex, religion, or tribal affiliation for training and 
employment opportunities under this contract and, to the extent feasible 
consistent with the efficient performance of this contract, training and 
employment preferences and opportunities shall be provided to Indians 
regardless of age (subject to existing laws and regulations), sex, 
religion, or tribal affiliation who are not fully qualified to perform 
under this contract. The Contractor also agrees to give preference to 
Indian organizations and Indian-owned economic enterprises in the 
awarding of any subcontracts consistent with the efficient performance 
of this contract. The Contractor shall maintain such records as are 
necessary to indicate compliance with this paragraph.
    (b) In connection with the Indian employment preference requirements 
of this clause, the Contractor shall also provide opportunities for 
training incident to such employment. Such training shall include on-
the-job, classroom, or apprenticeship training which is designed to 
increase the vocational effectiveness of an Indian employee.
    (c) If the Contractor is unable to fill its training and employment 
needs after giving full consideration to Indians as required by this 
clause, those needs may be satisfied by selection of persons other than 
Indians in accordance with the clause of this contract entitled ``Equal 
Opportunity''.
    (d) If no Indian organizations or Indian-owned economic enterprises 
are available for awarding of subcontracts in connection with the work 
performed under this contract, the Contractor agrees to comply with the 
provisions of this contract involving utilization of small business 
concerns, small business concerns owned and controlled by socially and 
economically disadvantaged individuals, or labor surplus are concerns.
    (e) As used in this clause:
    (1) Indian means a person who is a member of an Indian Tribe. If the 
Contractor has reason to doubt that a person seeking employment 
preference is an Indian, the Contractor shall grant the preference but 
shall require the individual within thirty (30) days to provide evidence 
from the Tribe concerned that the person is a member of that Tribe.
    (2) Indian Tribe means an Indian Tribe, band, nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (85 Stat. 668; 43 U.S.C. 1601) 
which is recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    (3) Indian organization means the governing body of any Indian Tribe 
or entity established or recognized by such governing body in accordance 
with the Indian Financing Act of 1974 (88 Stat. 77; 25 U.S.C. 1451); and
    (4) Indian-owned economic enterprise means any Indian-owned 
commercial, industrial, or business activity established or organized 
for the purpose of profit provided that such Indian ownership shall 
constitute not less than 51 percent of the enterprise.
    (f) The Contractor agrees to include the provisions of the clause 
including this paragraph (f) in each subcontract awarded under this 
contract.
    (g) In the event of noncompliance with this clause, the Contractor's 
right to proceed may be terminated in whole or in part by the 
Contracting Officer and the work completed in a manner determined by the 
Contracting Officer to be in the best interests of the Government.

                             (End of clause)

[49 FR 14267, Apr. 10, 1984. Redesignated at 60 FR 53280, Oct. 13, 1995]



1452.226-71  Indian preference program.

    As prescribed in 1404.7003(b), insert the following clause in all 
solicitations and contracts, awarded by the contacting activity which 
may exceed $50,000, and which contain the clause at 1452.204-71, and 
where it is determined by the Contracting Officer, prior to 
solicitation, that the work under the contract will be performed in 
whole or in part on or near an Indian reservation(s). The clause may 
also be included in solicitations issued and contracts awarded by a 
contracting activity which may not exceed $50,000 but which contain the 
clause at 1452.204-71 and which, in the opinion of the contracting 
officer, offer substantial opportunities for Indian employment, 
training, and subcontracting.

    Indian Preference Program--Department of the Interior (APR 1984)

    (a) In addition to the requirements of the clause of this contract 
entitled ``Indian Preference--Department of the Interior'', the 
Contractor agrees to establish and conduct an Indian preference program 
which will expand the opportunities for Indian organizations and Indian-
owned economic enterprises

[[Page 672]]

to receive a preference in the awarding of subcontracts and which will 
expand opportunities for Indians to receive preference for training and 
employment in connection with the work to be performed under this 
contract. In this connection, the contractor shall:
    (1) Designate a liaison officer who will: (i) Maintain liaison with 
the Government and Tribe(s) on Indian preference matters; (ii) supervise 
compliance with the provisions of this clause; and (iii) administer the 
Contractor's Indian preference program.
    (2) Advise its recruitment sources in writing and include a 
statement in all advertisements for employment that Indian applicants 
will be given preference in employment and training incident to such 
employment.
    (3) Not less than twenty (20) calendar days prior to commencement of 
work under this contract, post a written notice in the Tribal office of 
any reservations on which or near where the work under this contract is 
to be performed, which sets forth the Contractor's employment needs and 
related training opportunities. The notice shall include the approximate 
number and types of employees needed, the approximate dates of 
employment; the experience or special skills required for employment, if 
any; training opportunities available; and all other pertinent 
information necessary to advise prospective employees of any other 
employment requirements. The Contractor shall also request the Tribe(s) 
on or near whose reservation(s) the work is to be performed to provide 
assistance to the Contractor in filling its employment needs and 
training opportunties. The Contracting Officer will advise the 
Contractor of the name, location, and phone number of the Tribal 
officials to contract in regard to the posting of notices and requests 
for Tribal assistance.
    (4) Establish and conduct a subcontracting program which gives 
preference to Indian organizations and Indian-owned economic enterprises 
as subcontractors and suppliers under this contract. Consistent with the 
efficient performance of this contract, the Contractor shall give public 
notice of existing subcontracting opportunities by soliciting bids or 
proposals only from Indian organizations or Indian-owned economic 
enterprises. The Contractor shall request assistance and information on 
Indian firms qualified as suppliers or subcontractors from the Tribe(s) 
on or near whose reservation(s) the work under the contract is to be 
performed. The Contracting Officer will advise the Contractor of the 
name, location, and phone number of the Tribal officials to be contacted 
in regard to the request for assistance and information. Public notices 
and solicitations for existing subcontracting opportunities shall 
provide an equitable opportunity for Indian firms to submit bids or 
proposals by including: (i) A clear description of the supplies or 
services required including quantities, specifications, and delivery 
schedules which facilitate the participation of Indian firms; (ii) a 
statement indicating the perference will be given to Indian 
organizations and Indian-owned economic enterprises in accordance with 
section 7(b) of Pub. L. 93-638; (88 Stat. 2205; 25 U.S.C. 450e(b)); 
(iii) definitions for the terms Indian organization and Indian-owned 
economic enterprise as prescribed under the ``Indian Preference--
Department of the Interior'' clause of this contract; (iv) a 
representation to be completed by the bidder or offeror that it is an 
Indian organization or Indian-owned economic enterprise; and (v) a 
closing date for receipt of bids or proposals which provides sufficient 
time for preparation and submission of a bid or proposal. If after 
soliciting bids from Indian organizations and Indian owned economic 
enterprises, no responsive bid is received, the Contractor shall comply 
with the requirements of paragraph (d) of the ``Indian Preference--
Department of the Interior'' clause of this contract. If one or more 
responsive bids are received, award shall be made to the low responsible 
bidder if the bid price is determined to be reasonable. If the low 
responsive bid is determined to be unreasonable as to price, the 
Contractor shall attempt to negotiate a reasonable price and award a 
subcontract. If a reasonable price cannot be agreed upon, the Contractor 
shall comply with the requirements of paragraph (d) of the ``Indian 
Preference--Department of the Interior'' clause of the contract.
    (5) Maintain written records under this contract which indicate: (i) 
The names and addresses of all Indians seeking employment for each 
employment position available under this contract; (ii) the number of 
types of positions filled by (A) Indians and (B) non-Indians, and the 
name, address and position of each Indian employed under this contract; 
(iii) for those positions where there are both Indian and non-Indian 
applicants, and a non-Indian is selected for employment, the reason(s) 
why the Indian applicant was not selected; (iv) actions taken to give 
preference to Indian organizations and Indian-owned economic enterprises 
for subcontracting opportunities which exist under this contract; (v) 
reasons why preference was not given to Indian firms as subcontractors 
or suppliers for each requirement where it was determined by the 
Contractor that such preference would not be consistent with the 
efficient performance of the contract, and (vi) the names and addresses 
of all Indian organizations and Indian-owned economic enterprises (A) 
contacted, and (B) receiving subcontract awards under this contract.
    (6) The Contractor shall submit to the Contracting Officer for 
approval a semiannual report which summarizes the Contractor's Indian 
preference program and indicates (i) the number and types of available 
positions

[[Page 673]]

filled and dollar amounts of all subcontracts awarded to (a) Indian 
organizations and Indian-owned economic enterprises and (b) all other 
firms.
    (7) Records maintained pursuant to this clause will be kept 
available for review by the Government until expiration of one (1) year 
after final payment under this contract, or for such longer period as 
may be required by any other clause of this contract or by applicable 
law or regulation.
    (b) For purposes of this clause, the following definitions of terms 
shall apply:
    (1) The terms Indian, Indian Tribe, Indian Organization, and Indian-
owned economic enterprise are defined in the clause of this contract 
entitled ``Indian Preference.''
    (2) Indian reservation includes Indian reservations, public domain 
Indian allotments, former Indian reservations in Oklahoma, and land held 
by incorporated Native groups, regional corporations, and village 
corporations under the provisions of the Alaska Native Claims Settlement 
Act (85 Stat. 688; 43 U.S.C. 1601 et seq.).
    (3) On or near an Indian Reservation means on a reservation or 
reservations or within that area surrounding an Indian reservation(s) 
where a person seeking employment could reasonably be expected to 
commute to and from in the course of a workday.
    (c) Nothing in the requirements of this clause shall be interpreted 
to preclude Indian Tribes from independently developing and enforcing 
their own Indian preference requirements. Such requirements must not 
hinder the Government's right to award contracts and to administer their 
provisions.
    (d) The Contractor agrees to include the provisions of this clause 
including this paragraph (d) in each subcontract awarded under this 
contract and to notify the Contracting Officer of such subcontracts.
    (e) In the event of noncompliance with this clause, the Contractor's 
right to proceed may be terminated in whole or in part by the 
Contracting Officer and the work completed in a manner determined by the 
Contracting Officer to be in the best interest of the Government.

                             (End of clause)

[49 FR 14267, Apr. 10, 1984. Redesignated at 60 FR 53280, Oct. 13, 1995]



1452.228-7  Insurance--liability to third persons.

    (a) As prescribed in 1428.311-2, the clause at FAR 52.228-7, 
Insurance-- Liability to Third Persons, shall be modified before 
insertion into solicitations and contracts by--
    (1) Changing the title of the clause to read ``Insurance--Liability 
to Third Persons (APR 1984) (Deviations)''; and
    (2) Changing the first sentence in subparagraph (c)(2) of the clause 
to read ``For certain liabilities (and expenses incidental to such 
liabilities) to third persons not compensated by insurance or otherwise 
but subject to the `Limitation of Cost' or `Limitation of Funds' clause 
of this contract.''
    (b) As prescribed in FAR 52.103(a) and 52.107(f), the clause at FAR 
52.252-6, Authorized Deviations in Clauses, shall be inserted into 
solicitations and contracts containing the clause in paragraph (a) of 
this section.



1452.228-70  Liability insurance.

    As prescribed in 1428.301, insert the following clause in all 
contracts where circumstances warrant the carrying of insurance by the 
contractor (see FAR 28.301 and 28.306):

       Liability Insurance--Department of the Interior (JUL 1995)

    (a) The contractor shall procure and maintain during the term of 
this contract and any extension thereof liability insurance in form 
satisfactory to the Contracting Officer by an insurance company which is 
acceptable to the Contracting Officer. The named insured parties under 
the policy shall be the Contractor and the United States of America. The 
amounts of the insurance shall be not less than as follows:

    $-------- each person.*
    $-------- each occurrence.*
    $-------- property damage.*

    (b) Each policy shall have a certificate evidencing the insurance 
coverage. The insurance company shall provide an endorsement to notify 
the Contracting Officer 30 days prior to the effective date of 
cancellation or termination of the policy or certificate; or 
modification of the policy or certificate which may adversely affect the 
interest of the Government in such insurance. The certificate shall 
identify the contract number, the name and address of the Contracting 
Officer, as well as the insured, the policy number and a brief 
description of contract services to be performed. The contractor shall 
furnish the Contracting Officer with a copy of an acceptable insurance 
certificate prior to beginning the work.
    * These amounts to be set by the Contracting Officer.

                             (End of clause)

[60 FR 53280, Oct. 13, 1995]

[[Page 674]]



1452.228-71  Aircraft and general public liability.

    As prescribed in 1428.306-70(c)(1), insert the following clause in 
all fixed-price contracts for operation of aircraft with contractor-
furnished pilot:

   Aircraft and General Public Liability Insurance--Department of the 
                              Interior ( )

    (a) The contractor, at the contractor's expense, agrees to maintain, 
during the continuance of this contract, aircraft liability and general 
public liability insurance with limits of liability for (1) bodily 
injury to or death of aircraft passengers of not less than $75,000 for 
any one passenger and a limit for each occurance in any one aircraft of 
at least an amount equal to the sum produced by multiplying $75,000 by 
75 percent of the total number of passenger seats installed in the 
aircraft, (2) bodily injury or death of persons (excluding passengers) 
of not less than $75,000 for any one person in any one occurrence and 
$300,000 for each occurrence, and (3) property damage of not less than 
$100,000 for each occurrence, or (4) a single limit of liability for 
each occurrence equal to or greater than the combined required minimums 
set forth in (1) through (3) above.
    (b) The contractor agrees to maintain workers' compensation and 
other legally required insurance with respect to the contractor's own 
employees and agents.

                             (End of clause)

[54 FR 10989, Mar. 16, 1989]



1452.228-72  Liability for loss or damage.

    As prescribed in 1428.306-70(c)(2), insert the following clause in 
all fixed-price contracts involving the use of aircraft with Government-
furnished pilot where the Government does not have a property interest 
in the aircraft:

   Liability for Loss or Damage--Department of the Interior (APR 1984)

    (a) The Contractor shall indemnify and hold the Government harmless 
from any and all loss or damage to the aircraft furnished under this 
contract except as provided in paragraph (d) of this clause. For the 
purpose of fulfilling its obligation under this clause, the Contractor 
shall procure and maintain during the term of this contract, and any 
extension thereof, hull insurance acceptable to the Contracting Officer. 
The Contractor's insurance coverage shall apply to pilots furnished by 
the Government who operate the aircraft. The contractor may request a 
list of Government pilots by name and qualification who are potential 
pilots.
    (b) Prior to the commencement of work hereunder, the Contractor 
shall furnish to the Contracting Officer a copy of the insurance policy 
or policies or a certificate of insurance issued by the underwriter(s) 
showing that the coverage required by this clause has been obtained.
    (c) Each policy or certificate evidencing the insurance shall 
contain an endorsement which provides that the insurance company will 
notify the Contracting Officer 30 days prior to the effective date of 
any cancellation or termination of any policy or certificate or any 
modification of a policy or certificate which adversely affects the 
interests of the Government in such insurance. The notice shall be sent 
by registered mail and shall identify this contract, the name and 
address of the contracting office, the policy, and the insured.
    (d) If the aircraft is damaged or destroyed while in the custody and 
control of the Government, the Government will reimburse the Contractor 
for the deductible stipulated in the insurance coverage (if any) as 
follows:
    (1) In-Motion Accidents--Up to 5% of the current insured value of 
the aircraft stated in the policy, or $10,000.00, whichever is less.
    (2) Not In-Motion Accidents--Up to $250.00 per accident. Such 
reimbursement shall not be made, however, for loss or damage to the 
aircraft resulting from: (1) Normal wear and tear, (2) negligence or 
fault in maintenance of the aircraft by the Contractor, or (3) a defect 
in construction of the aircraft or a component thereof.
    (e) If damage to the aircraft is established to be the fault of the 
Government, rental payments to the Contractor during the repair period 
will be made as set forth elsewhere in this contract. The Government 
may, at its option, make necessary repairs or return the aircraft to the 
Contractor for repair. In the event the aircraft is lost, destroyed, or 
damaged so extensively as to be beyond repair, no rental payment will be 
made to the Contractor thereafter.
    (f) Any failure to agree as to the responsibility of the Government 
or the Contractor under this clause shall, after a final finding and 
determination by the Contracting Officer, be considered a dispute within 
the meaning of the ``Disputes'' clause of this contract.

                             (End of clause)



1452.228-73  Liability for loss or damage (property interest).

    As prescribed in 1428.306-70(c)(3), insert the following clause in 
all fixed-price contracts involving the use of aircraft with Government-
furnished pilot where the Government has a property

[[Page 675]]

interest in the aircraft (e.g., lease with purchase option):

   Liability for Loss or Damage--Department of the Interior (APR 1984)

    (a) The Government assumes all risk and liability for damage to or 
loss of the aircraft for the term of this contract, while the aircraft 
is in the Government's possession, except for: (1) Normal wear and tear 
to the aircraft, or (2) loss which occurs as a result of negligence or 
fault in maintenance of the aircraft by the contractor, or (3) loss 
resulting from a latent defect in the construction of the aircraft or a 
component thereof.
    (b) In the event of damage to the aircraft, the Government may, at 
its option, make the necessary repairs with its own facilities, or by 
contract, or pay the Contractor the reasonable cost of repair of the 
aircraft. If damage to the aircraft is established to be the fault of 
the Government, rental payments to the Contractor during the repair 
period will be made as set forth elsewhere in this contract.
    (c) In the event the aircraft is lost, destroyed, or damaged so 
extensively as to be beyond repair, no rental payment will be made to 
the Contractor thereafter, but the Government will pay to the Contractor 
a sum equal to the fair market value of the aircraft just prior to such 
loss, destruction, or extensive damage less the salvage value of the 
aircraft.
    (d) The Contractor certifies that the contract price does not 
include any cost attributable to insurance or to any reserve fund it has 
established to protect its interests in or use of the aircraft, 
regardless of whether or not the insurance coverage applies for the 
period during which the Government has possession of the aircraft. If, 
in the event of loss or damage to the aircraft, the Contractor receives 
compensation for such loss or damage, in any form, from any source, the 
amount of such compensation shall be credited to the Government in 
determining the amount of the Government's liability under this clause; 
except that this shall not apply to proceeds of insurance received 
solely as an advance of insurance pending determination of Government 
liability, or for an increment of value of the aircraft beyond the value 
for which the Government is responsible.
    (e) In the event of loss or damage, the Government shall be 
subrogated to all rights of recovery by the Contractor against third 
parties for such loss or damage and such rights shall be immediately 
assigned to the Government. Except as the Contracting Officer may permit 
in writing, the Contractor shall neither release nor discharge any third 
party from liability for such loss or damage nor otherwise compromise or 
adversely affect the Government's subrogation or other rights hereunder. 
The Contractor shall cooperate with the Government in any suit or action 
undertaken by the Government against any such third party.
    (f) Any failure to agree as to the responsibility of the Government 
or the Contractor under this clause shall, after a final finding and 
determination by the Contracting Officer, be considered a dispute within 
the meaning of the ``Disputes'' clause of this contract.

                             (End of clause)

[49 FR 14267, Apr. 10, 1984, as amended at 60 FR 53280, Oct. 13, 1995]

                       PARTS 1453-1499 [RESERVED]

[[Page 677]]



                              FINDING AIDS




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

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 679]]



                    Table of CFR Titles and Chapters




                     (Revised as of October 1, 2004)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  [Reserved]
        II  Office of Management and Budget Circulars and Guidance 
                [Reserved]
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements [Reserved]


                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)

[[Page 680]]

        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
        LV  National Endowment for the Arts (Part 6501)
       LVI  National Endowment for the Humanities (Part 6601)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
     LXVII  Institute of Museum and Library Services (Part 7701)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)

[[Page 681]]

     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                      Title 6--Homeland Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)

[[Page 682]]

      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)

[[Page 683]]

       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)

[[Page 684]]

       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

[[Page 685]]

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)

[[Page 686]]

        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]

[[Page 687]]

       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

[[Page 688]]

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)

[[Page 689]]

        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)

[[Page 690]]

        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

[[Page 691]]

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)

[[Page 692]]

       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-70)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare

[[Page 693]]

        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)

[[Page 694]]

       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)

[[Page 695]]

        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Bureau of Transportation Statistics, Department of 
                Transportation (Parts 1400--1499)
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)

[[Page 696]]

         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 697]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of October 1, 2004)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 698]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII

[[Page 699]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II

[[Page 700]]

  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5

[[Page 701]]

  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V; 42, I
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V; 42, I
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General

[[Page 702]]

  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A

[[Page 703]]

  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
   Commission
[[Page 704]]

Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35
Panama Canal Regulations                          35, I
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV

[[Page 705]]

Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 707]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1973-1985, and 1986-2000,'' published in eight separate 
volumes.

                                  2001

48 CFR
                                                                   66 FR
                                                                    Page
Chapter 9
931 Policy statement...............................................19717
931.205-19 Added....................................................4627
    Regulation at 66 FR 4627 eff. date delayed......................8746
931.205-33 Added....................................................4627
    Regulation at 66 FR 4627 eff. date delayed......................8746
970 Policy statement...............................................19717
970.3102-05-33 Added................................................4627
    Regulation at 66 FR 4627 eff. date delayed......................8746
970.5228-1 Amended..................................................4627
    Regulation at 66 FR 4627 eff. date delayed......................8746
970.5244-1 Amended..................................................4627
    Regulation at 66 FR 4627 eff. date delayed......................8746

                                  2002

48 CFR
                                                                   67 FR
                                                                    Page
Chapter 8
801.103-70 Redesignated as 801.104-70..............................49257
801.104-70 Redesignated from 801.103-70............................49257
801.301-70 (b) introductory text added; (b)(1) revised; (c)(1) 
        table amended (OMB numbers)................................49258
816.213-70 Redesignated from 836.371; (b) and (d) amended..........49259
825.901 (Subpart 825.9) Redesignated as Subpart 825.10.............49258
825.901 Redesignated as 825.1001...................................49258
825.1001 (Subpart) Redesignated from Subpart 825.9; heading 
        revised....................................................49258
825.1001 Redesignated from 825.901; heading revised................49258
825.1102 (Subpart 825.11) Added....................................49258
832.111 (Subpart 832.1) Added......................................49258
836.3 (Subpart) Removed............................................49259
836.202 (b) and (c) amended........................................49258
836.203 Added......................................................49258
836.208 Removed....................................................49258
836.209 Revised....................................................49258
836.211 Removed....................................................49258
836.213-4 Added....................................................49259
836.371 Redesignated as 836.213-70.................................49259
836.500 Redesignated from 852.236-70; (a) amended; heading revised
                                                                   49260
836.501 Added......................................................49259
836.521 Added......................................................49259
836.570 Added......................................................49259
836.571 Added......................................................49259
836.572 Added......................................................49259
836.573 Added......................................................49259
836.574 Added......................................................49259
836.575 Added......................................................49259
836.576 Added......................................................49259
836.577 Added......................................................49259
836.578 Added......................................................49259
836.579 Added......................................................49259
836.602-1 (c) amended..............................................49259
836.602-2 (a) and (b) amended; (c) added...........................49259
836.602-4 Amended..................................................49260
836.602-5 Revised..................................................49260

[[Page 708]]

836.603 Added......................................................49260
836.606 Added......................................................49260
836.606-73 (a)(3)(iii) amended.....................................49260
846.302-70 Amended.................................................49260
846.312 Added......................................................49260
846.710--846.710-71 (Subpart 846.7) Added..........................49260
852.236-70 Redesignated as 836.500.................................49260
852.236-71 Introductory text revised; clause amended...............49260
852.236-72 Introductory text revised; clause amended...............49260
852.236-74 Introductory text revised; clause amended...............49261
852.236-75 Redesignated as 852.246-2...............................49261
852.236-76 Introductory text added.................................49261
852.236-77 Introductory text added; clause amended.................49261
852.236-78 Introductory text added; clause amended.................49261
852.236-79 Introductory text added.................................49261
852.236-80 Introductory text added; clause amended.................49261
852.236-81 Heading and introductory text removed; clause amended 
                                                                   49261
852.236-82 Introductory text revised; clause amended...............49261
852.236-83 Introductory text revised; clause amended...............49262
852.236-84 Introductory text revised...............................49262
852.236-85 Introductory text added.................................49262
852.236-86 Revised.................................................49262
852.236-88 Heading and introductory text revised; clause amended 
                                                                   49262
852.236-89 Revised.................................................49263
852.236-91 Introductory text added; clause amended.................49263
852.246-1 Added....................................................49263
852.246-2 Redesignated from 852.236-75 and revised.................49261
Chapter 9
902 Authority citation revised.....................................14870
904.70 Amended; interim............................................14876
902.200 Revised....................................................14870
904 Authority citation revised..............................14870, 14875
904.401 Revised; interim...........................................14875
904.402 Revised; interim...........................................14876
904.404 Amended....................................................14871
    (d)(1) and (2) heading revised; (d)(3) amended; (d)(5) added; 
interim............................................................14876
904.702 (b) amended................................................14871
904.7000 Revised; interim..........................................14876
904.7002 Amended; interim..........................................14876
904.7003 (a) and (b) revised; interim..............................14876
904.7005 Removed; interim..........................................14876
904.7100 Amended; interim..........................................14876
904.7102 (b) amended...............................................14871
    Revised; interim...............................................14876
904.7103 (a) amended; (b) revised; interim.........................14877
909 Authority citation revised.....................................14870
909.403 Revised....................................................14871
913 Revised........................................................14871
914 Authority citation revised.....................................14870
914.406 Redesignated as 914.407....................................14871
914.406-3 Redesignated as 914.407-3................................14871
914.406-4 Redesignated as 914.407-4 and amended....................14871
914.407 Redesignated from 914.406..................................14871
914.407-3 Redesignated from 914.406-3; new (e) amended.............14871
914.407-4 Redesignated from 914.406-4 and amended..................14871
915 Authority citation revised.....................................14870
915.606 Amended....................................................14871
916 Authority citation revised.....................................14870
916.606 (Subpart 916.6) Added......................................14871
917 Authority citation revised.....................................14870
917.602 (c) amended................................................14871
925 Authority citation revised.....................................14870
925.901 (c) amended................................................14871
927 Regulation at 65 FR 68934 confirmed............................48569
927.303 Regulation at 65 FR 68935 confirmed........................48569
931 Authority citation revised.....................................14870
931.205-19 (b) revised.............................................14871
933 Authority citation revised.....................................14870
933.103 (i)(2), (j) and (k) amended................................14871
950 Authority citation revised.....................................14870
950.104 Removed....................................................14871
952 Authority citation revised..............................14870, 14875
952.202-1 Revised..................................................14871
952.204-2 Clause amended; (j) revised; interim.....................14877
952.204-73 Revised; interim........................................14877
952.204-74 Removed; interim........................................14878

[[Page 709]]

952.208-7 Introductory text amended................................14872
952.217-70 Introductory text amended...............................14872
952.227-13 Introductory text amended...............................14872
952.231-71 Added...................................................14872
952.233-2 Introductory text amended................................14872
952.236-70 Removed.................................................14873
952.236-72 Introductory text amended...............................14872
952.249-70 Removed.................................................14873
952.250-72 Note II amended.........................................14872
970.0404-1 Amended; interim........................................14878
970.0404-2 Revised; interim........................................14878
970.0404-3 (a) removed; (b) and (c) redesignated as (a) and (b)....14878
970.2701 Regulation at 65 FR 68935 confirmed.......................48569
970.2702 Regulation at 65 FR 68935 confirmed.......................48569
970.2702-1 Regulation at 65 FR 68935 confirmed.....................48569
970.2702-2 Regulation at 65 FR 68935 confirmed.....................48569
970.2702-3 Regulation at 65 FR 68935 confirmed.....................48569
970.2702-4 Regulation at 65 FR 68935 confirmed.....................48569
970.2702-5 Regulation at 65 FR 68935 confirmed.....................48569
970.2702-6 Regulation at 65 FR 68935 confirmed.....................48569
970.2703 Regulation at 65 FR 68935 confirmed.......................48569
970.2704 Regulation at 65 FR 68935 confirmed.......................48569
970.3102-05-53 Redesignated as 970.3102-05-70......................14873
970.3102-05-70 Redesignated from 970.3102-05-53....................14873
970.5204-71 Regulation at 65 FR 68936 confirmed....................48569
970.5204-72 Regulation at 65 FR 68936 confirmed....................48569
970.5204-94 Regulation at 65 FR 68936 confirmed....................48569
970.5204-95 Regulation at 65 FR 68936 confirmed....................48569
970.5204-96 Regulation at 65 FR 68936 confirmed....................48569
970.5204-97 Regulation at 65 FR 68936 confirmed....................48569
970.5204-98 Regulation at 65 FR 68936 confirmed....................48569
970.5204-100 Regulation at 65 FR 68936 confirmed...................48569
970.5204-101 Regulation at 65 FR 68936 confirmed...................48569
970.5204-102 Regulation at 65 FR 68936 confirmed...................48569
970.5204-103 Regulation at 65 FR 68936 confirmed...................48569
970.5227-3 Clause and Alternate I amended..........................48570
970.5227-4 Clause revised..........................................48570
970.5227-5 Clause amended..........................................48570
970.5227-8 Clause revised..........................................48570
970.5227-10 Clause amended.........................................48571
970.5227-12 Clause amended.........................................48571
970.5228-1 (e)(2), (h) introductory text and (j)(4) revised........14873
Chapter 15
1509 Authority citation revised....................................66344
1509.170-3 (a) and (c) revised; (d) added..........................66344
1509.170-4 (f) amended.............................................66344
1509.170-5 (b) revised.............................................66344
1509.170-8 (b) revised.............................................66344
1509.209-76 Undesignated text, (a)(2), (b)(2) and (4) revised......66344
1552 Authority citation revised....................................66344
1552.209-76 Introductory text, (a)(2), (b)(2) and (4) revised......66344

                                  2003

48 CFR
                                                                   68 FR
                                                                    Page
Chapter 8
801.301-70 (c) table amended (OMB numbers)..........................3467
801.602-70 (a)(4)(vi) and (vii) revised.............................3468
801.602-71 (b)(2) revised...........................................3468
801.602-72 (b) revised..............................................3468
806.302-5 (b) revised; (c) redesignated as (d); new (c) added.......3468
812.301 (c) revised; (g) added......................................3468
837.403 Amended.....................................................3469
852.207-70 Introductory text revised................................3469
852.273-70 Added....................................................3469
852.273-71 Added....................................................3469
852.273-72 Added....................................................3469
852.273-73 Added....................................................3469
852.273-74 Added....................................................3469
873 Added...........................................................3469

[[Page 710]]

Chapter 9
904 Regulation at 67 FR 14875 confirmed...............................56
    Authority citation revised.....................................68776
904.401 Regulation at 67 FR 14875 confirmed...........................56
904.402 Regulation at 67 FR 14876 confirmed...........................56
    (c) added; interim.............................................68776
904.404 Regulation at 67 FR 14876 confirmed...........................56
    (d)(6) added; interim..........................................68777
904.70 Regulation at 67 FR 14876 confirmed............................56
904.7000 Regulation at 67 FR 14876 confirmed..........................56
904.7002 Regulation at 67 FR 14876 confirmed..........................56
904.7003 Regulation at 67 FR 14876 confirmed..........................56
904.7005 Regulation at 67 FR 14876 confirmed..........................56
904.7100 Regulation at 67 FR 14876 confirmed..........................56
904.7102 Regulation at 67 FR 14876 confirmed..........................56
904.7103 Regulation at 67 FR 14877 confirmed..........................56
923 Authority citation revised......................................6358
923.703 (Subpart 923.7) Added; eff. 10-1-03........................52131
923.405 Added.......................................................6358
923.471 Removed.....................................................6358
923.7002 Redesignated as 923.7003; new 923.7002 added; interim.....68777
923.7003 Redesignated from 923.7002; (f) and (g) added; interim....68777
936 Authority citation revised......................................6358
936.602-70 (a)(8) added.............................................6358
952 Regulation at 67 FR 14875 confirmed...............................56
    Authority citation revised.....................................68776
952.204-2 Regulation at 67 FR 14877 confirmed.........................56
952.204-73 Regulation at 67 FR 14877 confirmed........................56
952.204-74 Regulation at 67 FR 14878 confirmed........................56
952.204-76 Added; interim..........................................68777
952.223-77 Added; interim..........................................68780
970 Authority citation revised.....................................68781
970.0404-1 Regulation at 67 FR 14878 confirmed........................56
970.0404-2 Regulation at 67 FR 14878 confirmed........................56
    970.0404-2 (c) added; interim..................................68781
970.0404-3 Regulation at 67 FR 14878 confirmed........................56
970.1504-1-2 (i) added; interim....................................68781
970.1504-1-3 (c)(1) amended; interim...............................68781
970.1504-5 Heading and (c) revised; interim........................68781
970.2303--970.2306 (Subpart 970.23) Heading revised.................6359
970.2303-1 (c) added; interim......................................68782
970.2304-1 Revised..................................................6359
970.2304-2 Revised..................................................6359
970.2307 Added; eff. 10-1-03.......................................52131
970.2307-1 Added; eff. 10-1-03.....................................52131
970.2307-2 Added; eff. 10-1-03.....................................52131
970.5215-1 (c)(3) amended; interim.................................68782
970.5215-3 Revised; interim........................................68782
970.5223-2 Revised..................................................6359
970.5223-5 Added; eff. 10-1-03.....................................52132
Chapter 10
Chapter 10 Revised.................................................39855
1005.202 Regulation at 68 FR 39865 correctly designated............42815

                                  2004

  (Regulations published from January 1, 2004, through October 1, 2004)

48 CFR
                                                                   69 FR
                                                                    Page
Chapter 14
1437 Added; interim................................................52609


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