[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2006 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          
          
          48


          Chapter 2 (Parts 201 to 299)

                         Revised as of October 1, 2006


          Federal Acquisition Regulations System
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2006
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



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

  Title 48:
          Chapter 2--Defense Acquisition Regulations Systems, 
          Department of Defense                                      3
  Finding Aids:
      Table of CFR Titles and Chapters........................     505
      Alphabetical List of Agencies Appearing in the CFR......     523
      List of CFR Sections Affected...........................     533

[[Page iv]]





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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 48 CFR 201.104 
                       refers to title 48, part 
                       201, section 104.

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

[[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, 2006), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
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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 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
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 
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and Finding Aids. This volume contains the Parallel Table of Statutory 
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    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.

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appearing in the Code of Federal Regulations.

INQUIRIES

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mail, [email protected].

[[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, 2006.

[[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, 2006.

    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, Ruth Green was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of Frances D. 
McDonald, assisted by Kenneth R. Payne.

[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




            (This book contains chapter 2, parts 201 to 299)

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

chapter 2--Defense Acquisition Regulations System, 
  Department of Defense.....................................         201

[[Page 3]]



CHAPTER 2--DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
201             Federal Acquisition Regulations System......           7
202             Definitions of words and terms..............          12
203             Improper business practices and personal 
                    conflicts of interest...................          14
204             Administrative matters......................          16
                   SUBCHAPTER B--ACQUISITION PLANNING
205             Publicizing contract actions................          32
206             Competition requirements....................          33
207             Acquisition planning........................          36
208             Required sources of supplies and services...          39
209             Contractor qualifications...................          45
210             Market research.............................          52
211             Describing agency needs.....................          52
212             Acquisition of commercial items.............          56
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
213             Simplified acquisition procedures...........          61
214             Sealed bidding..............................          64
215             Contracting by negotiation..................          65
216             Types of contracts..........................          84
217             Special contracting methods.................          89
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
219             Small business programs.....................         104
222             Application of labor laws to government 
                    acquisitions............................         116
223             Environment, energy and water efficiency, 
                    renewable energy technologies, 
                    occupational safety, and drug-free 
                    workplace...............................         124
224             Protection of privacy and freedom of 
                    information.............................         129

[[Page 4]]

225             Foreign acquisition.........................         129
226             Other socioeconomic programs................         162
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
227             Patents, data, and copyrights...............         166
228             Bonds and insurance.........................         207
229             Taxes.......................................         209
230             Cost accounting standards administration....         211
231             Contract cost principles and procedures.....         214
232             Contract financing..........................         218
233             Protests, disputes, and appeals.............         230
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
234             Major system acquisition....................         232
235             Research and development contracting........         232
236             Construction and architect-engineer 
                    contracts...............................         235
237             Service contracting.........................         240
239             Acquisition of information technology.......         251
241             Acquisition of utility services.............         255
                    SUBCHAPTER G--CONTRACT MANAGEMENT
242             Contract administration and audit services..         258
243             Contract modifications......................         269
244             Subcontracting policies and procedures......         270
245             Government property.........................         271
246             Quality assurance...........................         293
247             Transportation..............................         299
249             Termination of contracts....................         309
250             Extraordinary contractual actions...........         311
251             Use of government sources by contractors....         313
                     SUBCHAPTER H--CLAUSES AND FORMS
252             Solicitation provisions and contract clauses         315
253             Forms.......................................         466
             SUBCHAPTER I--AGENCY SUPPLEMENTARY REGULATIONS
                Appendix A--Armed Services Board of Contract 
                    Appeals.................................         470


Appendixes B-E [Reserved]

                Appendix F--Material Inspection and 
                    Receiving Report........................         479


Appendix G [Reserved]

                Appendix H--Debarment and Suspension 
                    Procedures..............................         494

[[Page 5]]

                Appendix I--Policy and Procedures for the 
                    DOD Pilot Mentor-Protege Program........         495

  Note: Although the text of Manuals and Supplements to the Defense FAR 
Supplement are not published in the Code of Federal Regulations, they 
were listed for the convenience of the user. All of the Supplements have 
been deleted. The only manuals which remain in effect are: Armed 
Services Pricing Manual (1986) and Armed Services Pricing Manual, Volume 
2, Price Analysis (1987).

[[Page 7]]

                          SUBCHAPTER A_GENERAL

             PART 201_FEDERAL ACQUISITION REGULATIONS SYSTEM

               Subpart 201.1_Purpose, Authority, Issuance

Sec.

Sec. 201.104 Applicability.

Sec. 201.105 Issuance.

Sec. 201.105-3 Copies.

Sec. 201.107 Certifications.

                      Subpart 201.2_Administration


Sec. 201.201 Maintenance of the FAR.

Sec. 201.201-1 The two councils.

Sec. 201.201-70 Maintenance of Procedures, Guidance, and Information.

              Subpart 201.3_Agency Acquisition Regulations


Sec. 201.301 Policy.

Sec. 201.303 Publication and codification.

Sec. 201.304 Agency control and compliance procedures.

                  Subpart 201.4_Deviations From the FAR


Sec. 201.402 Policy.

Sec. 201.403 Individual deviations.

Sec. 201.404 Class deviations.

        Subpart 201.6_Contracting Authority and Responsibilities


Sec. 201.602 Contracting officers.

Sec. 201.602-2 Responsibilities.

Sec. 201.602-70 Contract clause.

Sec. 201.603 Selection, appointment, and termination of appointment.

Sec. 201.603-2 Selection.

Sec. 201.603-3 Appointment.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36284, July 31, 1991, unless otherwise noted.

               Subpart 201.1_Purpose, Authority, Issuance



Sec. 201.104  Applicability.

    The FAR and the Defense Federal Acquisition Regulation Supplement 
(DFARS) also apply to purchases and contracts by DoD contracting 
activities made in support of foreign military sales or North Atlantic 
Treaty Organization cooperative projects without regard to the nature or 
sources of funds obligated, unless otherwise specified in this 
regulation.

[56 FR 36284, July 31, 1991. Redesignated at 64 FR 39430, July 22, 1999]



Sec. 201.105  Issuance.



Sec. 201.105-3  Copies.

    The DFARS and the DFARS Procedures, Guidance, and Information (PGI) 
are available electronically via the World Wide Web at http://
www.acq.osd.mil/dpap/dars/index.htm.

[69 FR 63326, Nov. 1, 2004]



Sec. 201.107  Certifications.

    In accordance with Section 29 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 425), a new requirement for a certification by a 
contractor or offeror may not be included in the DFARS unless--
    (1) The certification requirement is specifically imposed by 
statute; or
    (2) Written justification for such certification is provided to the 
Secretary of Defense by the Under Secretary of Defense (Acquisition, 
Technology, and Logistics), and the Secretary of Defense approves in 
writing the inclusion of such certification requirement.

[63 FR 11528, Mar. 9, 1998, as amended at 65 FR 39704, June 27, 2000]

                      Subpart 201.2_Administration



Sec. 201.201  Maintenance of the FAR.



Sec. 201.201-1  The two councils.

    (c) The composition and operation of the DAR Council is prescribed 
in DoDI 5000.63, Defense Acquisition Regulations (DAR) System.
    (d)(i) Departments and agencies process proposed revisions of FAR or 
DFARS through channels to the Director of the DAR Council. Process the 
proposed revision as a memorandum in the following format, addressed to 
the Director, DAR Council, OUSD(AT&L), 3062 Defense Pentagon, 
Washington, DC 20301-3062; datafax (703) 602-0350:


[[Page 8]]


    I. PROBLEM: Succinctly state the problem created by current FAR and/
or DFARS coverage and describe the factual and/or legal reasons 
necessitating the change to the regulation.
    II. Recommendation: Identify the FAR and/or DFARS citations to be 
revised. Attach as TAB A a copy of the text of the existing coverage, 
conformed to include the proposed additions and deletions. Indicate 
deleted coverage with dashed lines through the current words being 
deleted and insert proposed language in brackets at the appropriate 
locations within the existing coverage. If the proposed deleted portion 
is extensive, it may be outlined by lines forming a box with diagonal 
lines drawn connecting the corners.
    III. Discussion: Include a complete, convincing explanation of why 
the change is necessary and how the recommended revision will solve the 
problem. Address advantages and disadvantages of the proposed revision, 
as well as any cost or administrative impact on Government activities 
and contractors. Identify any potential impact of the change on 
automated systems, e.g., automated financial and procurement systems. 
Provide any other background information that would be helpful in 
explaining the issue.
    IV. Collaterals: Address the need for public comment (FAR 1.301(b) 
and subpart 1.5), the Paperwork Reduction Act, and the Regulatory 
Flexibility Act (FAR 1.301(c)).
    V. Deviations: If a recommended revision of DFARS is a FAR 
deviation, identify the deviation and include under separate TAB a 
justification for the deviation that addresses the requirements of 
201.402(2). The justification should be in the form of a memorandum for 
the Director of Defense Procurement and Acquisition Policy, Office of 
the Under Secretary of Defense (Acquisition, Technology, and Logistics).

    (ii) The public may offer proposed revisions of FAR or DFARS by 
submission of a memorandum, in the format (including all of the 
information) prescribed in paragraph (d)(i) of this subsection, to the 
Director of the DAR Council.

[56 FR 36284, July 31, 1991, as amended at 60 FR 61591, Nov. 30, 1995; 
61 FR 50451, Sept. 26, 1996; 63 FR 11528, Mar. 9, 1998; 65 FR 6552, Feb. 
10, 2000; 68 FR 7439, Feb. 14, 2003]



Sec. 201.201-70  Maintenance of Procedures, Guidance, and Information.

    The DAR Council is also responsible for maintenance of the DFARS 
Procedures, Guidance, and Information (PGI).

[69 FR 63326, Nov. 1, 2004]

              Subpart 201.3_Agency Acquisition Regulations



Sec. 201.301  Policy.

    (a)(1) DoD implementation and supplementation of the FAR is issued 
in the Defense Federal Acquisition Regulation Supplement (DFARS) under 
authorization and subject to the authority, direction, and control of 
the Secretary of Defense. The DFARS contains--
    (i) Requirements of law;
    (ii) DoD-wide policies;
    (iii) Delegations of FAR authorities;
    (iv) Deviations from FAR requirements; and
    (v) Policies/procedures that have a significant effect beyond the 
internal operating procedures of DoD or a significant cost or 
administrative impact on contractors or offerors.
    (2) Relevant procedures, guidance, and information that do not meet 
the criteria in paragraph (a)(1) of this section are issued in the DFARS 
Procedures, Guidance, and Information (PGI).
    (b) When Federal Register publication is required for any policy, 
procedure, clause, or form, the department or agency requesting Under 
Secretary of Defense (Acquisition, Technology, and Logistics) (USD 
(AT&L)) approval for use of the policy, procedure, clause, or form (see 
201.304(1)) must include an analysis of the public comments in the 
request for approval.

[56 FR 36284, July 31, 1991, as amended at 60 FR 61591, Nov. 30, 1995; 
65 FR 6552, Feb. 10, 2000; 69 FR 63326, Nov. 1, 2004]



Sec. 201.303  Publication and codification.

    (a)(i) The DFARS is codified under chapter 2 in title 48, Code of 
Federal Regulations.
    (ii) To the extent possible, all DFARS text (whether implemental or 
supplemental) is numbered as if it were implemental. Supplemental 
numbering is used only when the text cannot be integrated intelligibly 
with its FAR counterpart.
    (A) Implemental numbering is the same as its FAR counterpart, except 
when the text exceeds one paragraph,

[[Page 9]]

the subdivisions are numbered by skipping a unit in the FAR 1.105-
2(b)(2) prescribed numbering sequence. For example, three paragraphs 
implementing FAR 19.501 would be numbered 219.501 (1), (2), and (3) 
rather than (a), (b), and (c). Three paragraphs implementing FAR 
19.501(a) would be numbered 219.501(a) (i), (ii), and (iii) rather than 
(a) (1), (2), and (3). Further subdivision of the paragraphs follows the 
prescribed numbering sequence, e.g., 219.501(1)(i)(A)(1)(i).
    (B) Supplemental numbering is the same as its FAR counterpart, with 
the addition of a number of 70 and up or (S-70) and up. Parts, subparts, 
sections, or subsections are supplemented by the addition of a number of 
70 and up. Lower divisions are supplemented by the addition of a number 
of (S-70) and up. When text exceeds one paragraph, the subdivisions are 
numbered using the FAR 1.105-2(b)(2) prescribed sequence, without 
skipping a unit. For example, DFARS text supplementing FAR 19.501 would 
be numbered 219.501-70. Its subdivisions would be numbered 219.501-70 
(a), (b), and (c).
    (C) Subdivision numbering below the 4th level does not repeat the 
numbering sequence. It uses italicized Arabic numbers and then 
italicized lower case Roman numerals.
    (D) An example of DFARS numbering is in Table 1-1, DFARS Numbering.
    (iii) Department/agency and component supplements must parallel the 
FAR and DFARS numbering, except department/agency supplemental numbering 
uses subsection numbering of 90 and up, instead of 70 and up.

                       Table 1-1--DFARS Numbering
------------------------------------------------------------------------
       FAR             Is implemented as          Is supplemented as
------------------------------------------------------------------------
19                 219                        219.70
19.5               219.5                      219.570
19.501             219.501                    219.501-70
19.501-1           219.501-1                  219.501-1-70
19.501-1(a)        219.501-1(a)               219.501-1(a)(S-70)
19.501-1(a)(1)     219.501-1(a)(1)            219.501-1(a)(1)(S-70)
------------------------------------------------------------------------


[56 FR 36284, July 31, 1991, as amended at 64 FR 51074, Sept. 21, 1999]



Sec. 201.304  Agency control and compliance procedures.

    Departments and agencies and their component organizations may issue 
acquisition regulations as necessary to implement or supplement the FAR 
or DFARS.
    (1)(i) Approval of the USD (AT&L) is required before including in a 
department/agency or component supplement, or any other contracting 
regulation document such as a policy letter or clause book, any policy, 
procedure, clause, or form that--
    (A) Has a significant effect beyond the internal operating 
procedures of the agency; or
    (B) Has a significant cost or administrative impact on contractors 
or offerors.
    (ii) Except as provided in paragraph (2) of this section, the 
USD(AT&L) has delegated authority to the Director of Defense Procurement 
and Acquisition Policy (OUSD(AT&L)DPAP) to approve or disapprove the 
policies, procedures, clauses, and forms subject to paragraph (1)(i) of 
this section.
    (2) In accordance with Section 29 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 425), a new requirement for a 
certification by a contractor or offeror may not be included in a 
department/agency or component procurement regulation unless--
    (i) The certification requirement is specifically imposed by 
statute; or
    (ii) Written justification for such certification is provided to the 
Secretary of Defense by USD(AT&L), and the Secretary of Defense approves 
in writing the inclusion of such certification requirement.
    (3) Contracting activities must obtain the appropriate approval (see 
201.404) for any class deviation (as defined in FAR subpart 1.4) from 
the FAR or DFARS, before its inclusion in a department/agency or 
component supplement or any other contracting regulation document such 
as a policy letter or clause book.
    (4) Each department and agency must develop and, upon approval by 
OUSD(AT&L)DPAP, implement, maintain, and comply with a plan for 
controlling the use of clauses other than those prescribed by FAR or 
DFARS.

[[Page 10]]

    (5) Departments and agencies must submit requests for the Secretary 
of Defense, USD(AT&L), and OUSD(AT&L)DPAP approvals required by this 
section through the Director of the DAR Council.

[56 FR 36284, July 31, 1991, as amended at 60 FR 61591, Nov. 30, 1995; 
63 FR 11528, Mar. 9, 1998; 64 FR 39430, July 22, 1999; 65 FR 6552, Feb. 
10, 2000; 68 FR 7439, Feb. 14, 2003]

                  Subpart 201.4_Deviations From the FAR



Sec. 201.402  Policy.

    (1) The Director of Defense Procurement and Acquisition Policy, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) (OUSD(AT&L)DPAP), is the approval authority within DoD for 
any individual or class deviation from--
    (i) FAR 3.104, Procurement Integrity, or DFARS 203.104, Procurement 
Integrity;
    (ii) FAR Subpart 27.4, Rights in Data and Copyrights, or DFARS 
Subpart 227.4, Rights in Data and Copyrights;
    (iii) FAR part 30, Cost Accounting Standards Administration, or 
DFARS part 230, Cost Accounting Standards Administration;
    (iv) FAR subpart 31.1, Applicability, or DFARS subpart 231.1, 
Applicability (contract cost principles);
    (v) FAR subpart 31.2, Contracts with Commercial Organizations, or 
DFARS subpart 231.2, Contracts with Commercial Organizations; or
    (vi) FAR part 32, Contract Financing (except subparts 32.7 and 32.8 
and the payment clauses prescribed by subpart 32.1), or DFARS part 232, 
Contract Financing (except subparts 232.7 and 232.8).
    (2) Submit requests for deviation approval through department/agency 
channels to the approval authority in paragraph (1) of this section, 
201.403, or 201.404, as appropriate. Submit deviations that require 
OUSD(AT&L)DPAP approval through the Director of the DAR Council. At a 
minimum, each request must--
    (i) Identify the department/agency, and component if applicable, 
requesting the deviation;
    (ii) Identify the FAR or DFARS citation from which a deviation is 
needed, state what is required by that citation, and indicate whether an 
individual or class deviation is requested;
    (iii) Describe the deviation and indicate which of paragraphs (a) 
through (f) of FAR 1.401 best categorizes the deviation;
    (iv) State whether the deviation will have a significant effect 
beyond the internal operating procedures of the agency and/or a 
significant cost or administrative impact on contractors or offerors, 
and give reasons to support the statement;
    (v) State the period of time for which the deviation is required;
    (vi) State whether approval for the same deviation has been received 
previously, and if so, when;
    (vii) State whether the proposed deviation was published (see FAR 
subpart 1.5 for publication requirements) in the Federal Register and 
provide analysis of comments;
    (viii) State whether the request for deviation has been reviewed by 
legal counsel, and if so, state results; and
    (ix) Give detailed rationale for the request. State what problem or 
situation will be avoided, corrected, or improved if request is 
approved.

[56 FR 36284, July 31, 1991, as amended at 60 FR 61591, Nov. 30, 1995; 
61 FR 50451, Sept. 26, 1996; 64 FR 8727, Feb. 23, 1999; 65 FR 6552, Feb. 
10, 2000; 68 FR 7439, Feb. 14, 2003]



Sec. 201.403  Individual deviations.

    (1) Individual deviations, except those described in 201.402(1) and 
paragraph (2) of this section, must be approved in accordance with the 
department/agency plan prescribed by 201.304(4).
    (2) Contracting officers outside the United States may deviate from 
prescribed nonstatutory FAR and DFARS clauses when--
    (i) Contracting for support services, supplies, or construction, 
with the governments of North Atlantic Treaty Organization (NATO) 
countries or other allies (as described in 10 U.S.C. 2341(2)), or with 
United Nations or NATO organizations; and
    (ii) Such governments or organizations will not agree to the 
standard clauses.

[65 FR 6552, Feb. 10, 2000]

[[Page 11]]



Sec. 201.404  Class deviations.

    (b)(i) Except as provided in paragraph (b)(ii) of this section, 
OUSD(AT&L)DPAP is the approval authority within DoD for any class 
deviation.
    (ii) The senior procurement executives for the Army, Navy, and Air 
Force, and the Directors of the Defense Commissary Agency, the Defense 
Contract Management Agency, and the Defense Logistics Agency, may 
approve any class deviation, other than those described in 201.402(1), 
that does not--
    (A) Have a significant effect beyond the internal operating 
procedures of the department or agency;
    (B) Have a significant cost or administrative impact on contractors 
or offerors;
    (C) Diminish any preference given small business concerns by the FAR 
or DFARS; or
    (D) Extend to requirements imposed by statute or by regulations of 
other agencies such as the Small Business Administration and the 
Department of Labor.

[65 FR 6552, Feb. 10, 2000, as amended at 65 FR 52951, Aug. 31, 2000; 68 
FR 7439, Feb. 14, 2003]

        Subpart 201.6_Contracting Authority and Responsibilities



Sec. 201.602  Contracting officers.



Sec. 201.602-2  Responsibilities.

    Contracting officers may designate qualified personnel as their 
authorized representatives to assist in the technical monitoring or 
administration of a contract. Follow the procedures at PGI 201.602-2. A 
contracting officer's representative (COR)--
    (1) Must be a Government employee, unless otherwise authorized in 
agency regulations.
    (2) Must be qualified by training and experience commensurate with 
the responsibilities to be delegated in accordance with department/
agency guidelines.
    (3) May not be delegated responsibility to perform functions at a 
contractor's location that have been delegated under FAR 42.202(a) to a 
contract administration office.
    (4) May not be delegated authority to make any commitments or 
changes that affect price, quality, quantity, delivery, or other terms 
and conditions of the contract.
    (5) Must be designated in writing, and a copy furnished the 
contractor and the contract administration office,--
    (i) Specifying the extent of the COR's authority to act on behalf of 
the contracting officer;
    (ii) Identifying the limitations on the COR's authority;
    (iii) Specifying the period covered by the designation;
    (iv) Stating the authority is not redelegable; and
    (v) Stating that the COR may be personally liable for unauthorized 
acts.
    (6) Must maintain a file for each contract assigned. This file must 
include, as a minimum--
    (i) A copy of the contracting officer's letter of designation and 
other documentation describing the COR's duties and responsibilities; 
and
    (ii) Documentation of actions taken in accordance with the 
delegation of authority.

[56 FR 36284, July 31, 1991, as amended at 70 FR 75411, Dec. 20, 2005]



Sec. 201.602-70  Contract clause.

    Use the clause at 252.201-7000, Contracting Officer's 
Representative, in solicitations and contracts when appointment of a 
contracting officer's representative is anticipated.



Sec. 201.603  Selection, appointment, and termination of appointment.



Sec. 201.603-2  Selection.

    (1) In accordance with 10 U.S.C. 1724, in order to qualify to serve 
as a contracting officer with authority to award or administer contracts 
for amounts above the simplified acquisition threshold, a person must--
    (i) Have completed all contracting courses required for a 
contracting officer to serve in the grade in which the employee or 
member of the armed forces will serve;
    (ii) Have at least 2 years experience in a contracting position;
    (iii) Have--

[[Page 12]]

    (A) Received a baccalaureate degree from an accredited educational 
institution; and
    (B) Completed at least 24 semester credit hours, or equivalent, of 
study from an accredited institution of higher education in any of the 
following disciplines: accounting, business finance, law, contracts, 
purchasing, economics, industrial management, marketing, quantitative 
methods, and organization and management; and
    (iv) Meet such additional requirements, based on the dollar value 
and complexity of the contracts awarded or administered in the position, 
as may be established by the Secretary of Defense.
    (2) The qualification requirements in paragraph (1)(iii) of this 
subsection do not apply to a DoD employee or member of the armed forces 
who--
    (i) On or before September 30, 2000, occupied--
    (A) A contracting officer position with authority to award or 
administer contracts above the simplified acquisition threshold; or
    (B) A position either as an employee in the GS-1102 occupational 
series or a member of the armed forces in an occupational specialty 
similar to the GS-1102 series;
    (ii) Is in a contingency contracting force; or
    (iii) Is an individual appointed to a 3-year developmental position. 
Information on developmental opportunities is contained in DoD Manual 
5000.52-M, Acquisition Career Development Program.
    (3) Waivers to the requirements in paragraph (1) of this subsection 
may be authorized. Information on waivers is contained in DoD Manual 
5000.52-M.

[67 FR 65509, Oct. 25, 2002]



Sec. 201.603-3  Appointment.

    (a) Certificates of Appointment executed under the Armed Services 
Procurement Regulation or the Defense Acquisition Regulation have the 
same effect as if they had been issued under FAR.
    (b) Agency heads may delegate the purchase authority in 213.301 to 
DoD civilian employees and members of the U.S. Armed Forces.

[56 FR 36284, July 31, 1991, as amended at 64 FR 56705, Oct. 21, 1999]

                 PART 202_DEFINITIONS OF WORDS AND TERMS

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

                        Subpart 202.1_Definitions



Sec. 202.101  Definitions.

    Congressional defense committees means--
    (1) The Committee on Armed Services of the Senate;
    (2) The Subcommittee on Defense of the Committee on Appropriations 
of the Senate;
    (3) The Committee on Armed Services of the House of Representatives; 
and
    (4) The Subcommittee on Defense of the Committee on Appropriations 
of the House of Representatives.
    Contract administration office also means a contract management 
office of the Defense Contract Management Agency.
    Contracting activity for DoD also means elements designated by the 
director of a defense agency which has been delegated contracting 
authority through its agency charter. DoD contracting activities are--

                          Department of Defense

Department of Defense Education Activity
TRICARE Management Activity
Acquisition and Procurement Office, Washington Headquarters Services

                                  Army

Contract Support Agency
Office of the Deputy Chief of Staff for Research, Development and 
Acquisition, Headquarters, U.S. Army Materiel Command
Aviation and Missile Command
Industrial Operations Command
Communications-Electronics Command
Tank-Automotive and Armaments Command
Training and Doctrine Command
Forces Command
Health Services Command
Military District of Washington
U.S. Army, Europe

[[Page 13]]

National Guard Bureau
Corps of Engineers
Information Systems Command
Medical Research and Development Command
U.S. Army, Pacific
Military Traffic Management Command
Space and Strategic Defense Command
Eighth U.S. Army
Intelligence and Security Command
U.S. Army, South
Defense Contracting Command-Washington
Directorate of Information Systems for Command, Control, Communications 
and Computers, Office of the Secretary of the Army
U.S. Army Special Operations Command

                                  Navy

Deputy, Acquisition Management, Office of the Assistant Secretary of the 
Navy (Research, Development, and Acquisition)
Naval Air Systems Command
Space and Naval Warfare Systems Command
Naval Facilities Engineering Command
Naval Inventory Control Point
Naval Sea Systems Command
Naval Supply Systems Command
Office of Naval Research
Military Sealift Command
Strategic Systems Programs
Marine Corps Systems Command
Installations and Logistics, Headquarters, U.S. Marine Corps

                                Air Force

Office of the Assistant Secretary of the Air Force (Acquisition)
Office of the Deputy Assistant Secretary (Contracting)
Air Force Materiel Command
Air Force Reserve Command
Air Combat Command
Air Mobility Command
Air Education and Training Command
Pacific Air Forces
United States Air Forces in Europe
Air Force Space Command

                Defense Advanced Research Projects Agency

Office of the Deputy Director, Management

                   Defense Contract Management Agency

Office of the Director, Defense Contract Management Agency

                 Defense Finance and Accounting Service

External Services, Defense Finance and Accounting Service

                   Defense Information Systems Agency

Defense Information Technology Contracting Organization

                       Defense Intelligence Agency

Office of Procurement

                        Defense Logistics Agency

Office of the Deputy Director, Logistics Operations
Defense Supply Centers
Defense Energy Support Center

                   National Imagery and Mapping Agency

Procurement and Contracting Office

                     Defense Threat Reduction Agency

Acquisition Management Office

                        National Security Agency

Headquarters, National Security Agency

                         Missile Defense Agency

Headquarters, Missile Defense Agency

                United States Special Operations Command

Headquarters, United States Special Operations Command

    Contracting officer's representative means an individual designated 
and authorized in writing by the contracting officer to perform specific 
technical or administrative functions.
    Departments and agencies, as used in DFARS, means the military 
departments and the defense agencies. The military departments are the 
Departments of the Army, Navy, and Air Force (the Marine Corps is a part 
of the Department of the Navy). The defense agencies are the Defense 
Advanced Research Projects Agency, the Defense Commissary Agency, the 
Defense Contract Management Agency, the Defense Finance and Accounting 
Service, the Defense Information Systems Agency, the Defense 
Intelligence Agency, the Defense Security Service, the Defense Logistics 
Agency, the National Imagery and Mapping Agency, the Defense Threat 
Reduction Agency, the National Security Agency, the Missile Defense 
Agency, and the United States Special Operations Command.
    Department of Defense (DoD), as used in DFARS, means the Department 
of Defense, the military departments, and the defense agencies.
    Executive agency means for DoD, the Department of Defense, the 
Department of the Army, the Department of the Navy, and the Department 
of the Air Force.

[[Page 14]]

    Head of the agency means, for DoD, the Secretary of Defense, the 
Secretary of the Army, the Secretary of the Navy, and the Secretary of 
the Air Force. Subject to the direction of the Secretary of Defense, the 
Under Secretary of Defense (Acquisition, Technology, and Logistics), and 
the Director of Defense Procurement and Acquisition Policy, the 
directors of the defense agencies have been delegated authority to act 
as head of the agency for their respective agencies (i.e., to perform 
functions under the FAR or DFARS reserved to a head of agency or agency 
head), except for such actions that by terms of statute, or any 
delegation, must be exercised within the Office of the Secretary of 
Defense.
    Procedures, Guidance, and Information (PGI) means a companion 
resource to the DFARS that--
    (1) Contains mandatory internal DoD procedures. The DFARS will 
direct compliance with mandatory procedures using imperative language 
such as ``Follow the procedures at * * *'' or similar directive 
language;
    (2) Contains non-mandatory internal DoD procedures and guidance and 
supplemental information to be used at the discretion of the contracting 
officer. The DFARS will point to non-mandatory procedures, guidance, and 
information using permissive language such as ``The contracting officer 
may use * * *'' or ``Additional information is available at * * *'' or 
other similar language;
    (3) Is numbered similarly to the DFARS, except that each PGI 
numerical designation is preceded by the letters ``PGI''; and
    (4) Is available electronically at http://www.acq.osd.mil/dpap/dars/
index.htm.
    Senior procurement executive means, for DoD--
    Department of Defense (including the defense agencies)--Under 
Secretary of Defense (Acquisition, Technology, and Logistics);
    Department of the Army--Assistant Secretary of the Army 
(Acquisition, Logistics and Technology);
    Department of the Navy--Assistant Secretary of the Navy (Research, 
Development and Acquisition);
    Department of the Air Force--Assistant Secretary of the Air Force 
(Acquisition).
    The directors of the defense agencies have been delegated authority 
to act as senior procurement executive for their respective agencies, 
except for such actions that by terms of statute, or any delegation, 
must be exercised by the Under Secretary of Defense (Acquisition, 
Technology, and Logistics).
    Tiered evaluation of offers, also known as cascading evaluation of 
offers, means a procedure used in negotiated acquisitions, when market 
research is inconclusive for justifying limiting competition to small 
business concerns, whereby the contracting officer--
    (1) Solicits and receives offers from both small and other than 
small business concerns;
    (2) Establishes a tiered or cascading order of precedence for 
evaluating offers that is specified in the solicitation; and
    (3) If no award can be made at the first tier, evaluates offers at 
the next lower tier, until award can be made.

[56 FR 36287, July 31, 1991]

    Editorial Note: For Federal Register citations affecting section 
202.101, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.

 PART 203_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

Sec.

Sec. 203.070 Reporting of violations and suspected violations.

                        Subpart 203.1_Safeguards


Sec. 203.104 Procurement integrity.

Sec. 203.104-5 Disclosure of proprietary and source selection 
          information.

             Subpart 203.5_Other Improper Business Practices


Sec. 203.502-2 Subcontractor kickbacks.

Sec. 203.570 Prohibition on persons convicted of frauds or other 
          defense-contract-related felonies.

Sec. 203.570-1 Scope.

Sec. 203.570-2 Prohibition period.

Sec. 203.570-3 Contract clause.

[[Page 15]]

             Subpart 203.7_Voiding and Rescinding Contracts


Sec. 203.703 Authority.

             Subpart 203.70_Contractor Standards of Conduct


Sec. 203.7000 Policy.

Sec. 203.7001 Procedures.

Sec. 203.7002 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36288, July 31, 1991, unless otherwise noted.



Sec. Sec.  203.070  Reporting of violations and suspected violations.

    Report violations and suspected violations of the following 
requirements in accordance with 209.406-3 or 209.407-3 and DoDD 7050.5, 
Coordination of Remedies for Fraud and Corruption Related to Procurement 
Activities:
    (a) Certificate of Independent Price Determination (FAR 3.103).
    (b) Procurement integrity (FAR 3.104).
    (c) Gratuities clause (FAR 3.203).
    (d) Antitrust laws (FAR 3.303).
    (e) Covenant Against Contingent Fees (FAR 3.405).
    (f) Anti-kickback Act (FAR 3.502).
    (g) Prohibitions on persons convicted of defense-related contract 
felonies (203.570).

[69 FR 74990, Dec. 15, 2004]

                        Subpart 203.1_Safeguards



Sec. 203.104  Procurement integrity.



Sec. 203.104-5  Disclosure of proprietary and source selection 
          information.

    (d)(4) For purposes of FAR 3.104-5(d)(4) only, DoD follows the 
notification procedures in FAR 27.404(h). However, the first sentence in 
FAR 27.404(h) does not apply to DoD.

[56 FR 36288, July 31, 1991, as amended at 62 FR 2612, Jan. 17, 1997]

             Subpart 203.5_Other Improper Business Practices



Sec. 203.502-2  Subcontractor kickbacks.

    (h) The DoD Inspector General has designated Special Agents of the 
following investigative organizations as representatives for conducting 
inspections and audits under the Anti-Kickback Act of 1986:
    (i) U.S. Army Criminal Investigation Command.
    (ii) Naval Criminal Investigative Service.
    (iii) Air Force Office of Special Investigations.
    (iv) Defense Criminal Investigative Service.

[56 FR 36288, July 31, 1991, as amended at 60 FR 29497, June 5, 1995]



Sec. 203.570  Prohibition on persons convicted of frauds or other 
          defense-contract-related felonies.



Sec. 203.570-1  Scope.

    This subpart implements 10 U.S.C. 2408. For information on 10 U.S.C. 
2408, see PGI 203.570-1.

[71 FR 14100, Mar. 21, 2006]



Sec. 203.570-2  Prohibition period.

    DoD has sole responsibility for determining the period of the 
prohibition described in paragraph (b) of the clause at 252.203-7001, 
Prohibition on Persons Convicted of Fraud or Other Defense-Contract-
Related Felonies. The prohibition period--
    (a) Shall not be less than 5 years from the date of conviction 
unless the agency head or a designee grants a waiver in the interest of 
national security. Follow the waiver procedures at PGI 203.570-2(a); and
    (b) May be more than 5 years from the date of conviction if the 
agency head or a designee makes a written determination of the need for 
the longer period. The agency shall provide a copy of the determination 
to the address at PGI 203.570-2(b).

[69 FR 74990, Dec. 15, 2004]



Sec. 203.570-3  Contract clause.

    Use the clause at 252.203-7001, Prohibition on Persons Convicted of 
Fraud or Other Defense-Contract-Related Felonies, in all solicitations 
and contracts exceeding the simplified acquisition threshold, except 
solicitations and contracts for commercial items.

[64 FR 14398, Mar. 25, 1999. Redesignated at 69 FR 74990, Dec. 15, 2004]

[[Page 16]]

             Subpart 203.7_Voiding and Rescinding Contracts



Sec. 203.703  Authority.

    The authority to act for the agency head under this subpart is 
limited to a level no lower than an official who is appointed by and 
with the advice of the Senate, without power of redelegation. For the 
defense agencies, for purposes of this subpart, the agency head designee 
is the Under Secretary of Defense (Acquisition, Technology, and 
Logistics).

[56 FR 36288, July 31, 1991, as amended at 60 FR 61592, Nov. 30, 1995; 
65 FR 39704, June 27, 2000]

             Subpart 203.70_Contractor Standards of Conduct



Sec. 203.7000  Policy.

    Government contractors must conduct themselves with the highest 
degree of integrity and honesty. Contractors should have standards of 
conduct and internal control systems that--
    (1) Are suitable to the size of the company and the extent of their 
involvement in Government contracting,
    (2) Promote such standards,
    (3) Facilitate timely discovery and disclosure of improper conduct 
in connection with Government contracts, and
    (4) Ensure corrective measures are promptly instituted and carried 
out.



Sec. 203.7001  Procedures.

    (a) A contractor's system of management controls should provide 
for--
    (1) A written code of business ethics and conduct and an ethics 
training program for all employees;
    (2) Periodic reviews of company business practices, procedures, 
policies, and internal controls for compliance with standards of conduct 
and the special requirements of Government contracting;
    (3) A mechanism, such as a hotline, by which employees may report 
suspected instances of improper conduct, and instructions that encourage 
employees to make such reports;
    (4) Internal and/or external audits, as appropriate;
    (5) Disciplinary action for improper conduct;
    (6) Timely reporting to appropriate Government officials of any 
suspected or possible violation of law in connection with Government 
contracts or any other irregularities in connection with such contracts; 
and
    (7) Full cooperation with any Government agencies responsible for 
either investigation or corrective actions.
    (b) Contractors who are awarded a DoD contract of $5 million or more 
must display DoD Hotline Posters prepared by the DoD Office of the 
Inspector General unless--
    (1) The contract will be performed in a foreign country; or
    (2) The contractor has established an internal reporting mechanism 
and program, as described in paragraph (a) of this section.



Sec. 203.7002  Contract clause.

    Use the clause at 252.203-7002, Display of DoD Hotline Poster, in 
solicitations and contracts expected to exceed $5 million, except when 
performance will take place in a foreign country.

                     PART 204_ADMINISTRATIVE MATTERS

                    Subpart 204.1_Contract Execution

Sec.

Sec. 204.101 Contracting officer's signature.

                   Subpart 204.2_Contract Distribution


Sec. 204.201 Procedures.

Sec. 204.203 Taxpayer identification information.

    Subpart 204.4_Safeguarding Classified Information Within Industry


Sec. 204.402 General.

Sec. 204.404 Contract clause.

Sec. 204.404-70 Additional contract clauses.

                    Subpart 204.6_Contract Reporting


Sec. 204.670 Contract action reporting requirements.

                      Subpart 204.8_Contract Files


Sec. 204.802 Contract files.

Sec. 204.804 Closeout of contract files.

Sec. 204.804-1 Closeout by the office administering the contract.

[[Page 17]]


Sec. 204.804-2 Closeout of the contracting office files if another 
          office administers the contract.

Sec. 204.805 Disposal of contract files.

        Subpart 204.9_Taxpayer Identification Number Information


Sec. 204.902 General.

             Subpart 204.11_Central Contractor Registration


Sec. 204.1103 Procedures.

Sec. 204.1104 Solicitation provision and contract clauses.

  Subpart 204.70_Uniform Procurement Instrument Identification Numbers


Sec. 204.7000 Scope.

Sec. 204.7001 Policy.

Sec. 204.7002 Procedures.

Sec. 204.7003 Basic PII number.

Sec. 204.7004 Supplementary PII numbers.

Sec. 204.7005 Assignment of order codes.

       Subpart 204.71_Uniform Contract Line Item Numbering System


Sec. 204.7100 Scope.

Sec. 204.7101 Definitions.

Sec. 204.7102 Policy.

Sec. 204.7103 Contract line items.

Sec. 204.7103-1 Criteria for establishing.

Sec. 204.7103-2 Numbering procedures.

Sec. 204.7104 Contract subline items.

Sec. 204.7104-1 Criteria for establishing.

Sec. 204.7104-2 Numbering procedures.

Sec. 204.7105 Contract exhibits and attachments.

Sec. 204.7106 Contract modifications.

Sec. 204.7107 Contract accounting classification reference number 
          (ACRN).

Sec. 204.7108 Payment instructions.

Sec. 204.7109 Contract clause.

                Subpart 204.72_Contractor Identification


Sec. 204.7200 Scope of subpart.

Sec. 204.7201 Definitions.

Sec. 204.7202 General.

Sec. 204.7202-1 CAGE codes.

Sec. 204.7202-2 DUNS numbers.

Sec. 204.7202-3 TINs.

Sec. 204.7203 Responsibilities of contracting officers.

Sec. 204.7204 Maintenance of the CAGE file.

Sec. 204.7205 Novation agreements, mergers and sales of assets.

Sec. 204.7206 Using CAGE codes to identify agents and brokers.

Sec. 204.7207 Solicitation provision.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36289, July 31, 1991, unless otherwise noted.

                    Subpart 204.1_Contract Execution



Sec. 204.101  Contracting officer's signature.

    Follow the procedures at PGI 204.101 for signature of contract 
documents.

[71 FR 9268, Feb. 23, 2006]

                   Subpart 204.2_Contract Distribution



Sec. 204.201  Procedures.

    Follow the procedures at PGI 204.201 for the distribution of 
contracts and modifications.

[70 FR 58982, Oct. 11, 2005]



Sec. 204.203  Taxpayer identification information.

    (b) The procedure at FAR 4.203(b) does not apply to contracts that 
include the clause at FAR 52.204-7, Central Contractor Registration. The 
payment office obtains the taxpayer identification number and the type 
of organization from the Central Contractor Registration database.

[68 FR 64558, Nov. 14, 2003]

    Subpart 204.4_Safeguarding Classified Information Within Industry



Sec. 204.402  General.

    DoD employees or members of the Armed Forces who are assigned to or 
visiting a contractor facility and are engaged in oversight of an 
acquisition program will retain control of their work products, both 
classified and unclassified.

[71 FR 9268, Feb. 23, 2006]



Sec. 204.404  Contract clause.



Sec. 204.404-70  Additional contract clauses.

    (a) Use the clause at 252.204-7000, Disclosure of Information, in 
solicitations and contracts when the contractor will have access to or 
generate unclassified information that may be sensitive and 
inappropriate for release to the public.
    (b) Use the clause at 252.204-7003, Control of Government Personnel 
Work

[[Page 18]]

Product, in all solicitations and contracts.
    (c) Use the clause at 252.204-7005, Oral Attestation of Security 
Responsibilities, in solicitations and contracts that include the clause 
at FAR 52.204-2, Security Requirements.

[57 FR 14992, Apr. 23, 1992, as amended at 64 FR 45197, Aug. 19, 1999]

                    Subpart 204.6_Contract Reporting



Sec. 204.670  Contract action reporting requirements.

    Departments and agencies shall report contracting actions in 
accordance with the requirements at PGI 204.670.

[71 FR 44926, Aug. 8, 2006]

                      Subpart 204.8_Contract Files



Sec. 204.802  Contract files.

    Official contract files shall consist of--
    (1) Only original, authenticated or conformed copies of contractual 
instruments--
    (i) Authenticated copies means copies that are shown to be genuine 
in one of two ways--
    (A) Certification as true copy by signature of an authorized person; 
or
    (B) Official seal.
    (ii) Conformed copies means copies that are complete and accurate, 
including the date signed and the names and titles of the parties who 
signed them.
    (2) Signed or official record copies of correspondence, memoranda, 
and other documents.



Sec. 204.804  Closeout of contract files.

    Normally, the closeout date for contract files is the date in Block 
9d on the DD Form 1594, Contract Completion Statement, or in columns 59-
65 on the PK9. If the contracting office must do a major closeout action 
that will take longer than three months after the date shown in Block 9d 
of the DD Form 1594, or in columns 59-65 of the PK9--
    (1) The closeout date for file purposes will be the date in Block 
10e of the DD Form 1594 or the date of the closeout statement executed 
when the MILSCAP PK9 is received.
    (2) The contracting office shall notify the contract administration 
office of the revised closeout date by either sending a copy of the 
completed DD Form 1594 or by preparing a MILSCAP Format Identifier PKZ, 
Contract Closeout Extension.



Sec. 204.804-1  Closeout by the office administering the contract.

    (1) For contracting offices administering their own contracts, 
locally developed forms or statement of completion may be used instead 
of the DD Form 1594, Contract Completion Statement. Whichever method is 
used, the form shall be retained in the official contract file.
    (2) For contracts valued above the simplified acquisition threshold, 
prepare a DD Form 1597, Contract Closeout Check List, (or agency 
equivalent) to ensure that all required contract actions have been 
satisfactorily accomplished.

[56 FR 36289, July 31, 1991, as amended at 64 FR 2596, Jan. 15, 1999]



Sec. 204.804-2  Closeout of the contracting office files if another 
          office administers the contract.

    (1) When an office, other than the contracting office, administers 
the contract, it shall--
    (i) Provide the contracting office an interim contract completion 
statement when the contract is physically completed and accepted. This 
notice may be in the form of either a DD Form 1594, Contract Completion 
Statement, or a MILSCAP Format Identifier Interim PK9, Contract Physical 
Completion. When the DD Form 1594 is used, the contracting officer--
    (A) Annotates Block 8, Remarks, with--
    (1) ``Notice of Physical Completion;''
    (2) Final acceptance date;
    (3) Signature of a responsible official; and
    (4) Date signed.
    (B) Does not complete Blocks 9 (b), (c), and (d) at this time;
    (ii) Prepare a DD Form 1597, Contract Closeout Check List, if 
necessary, to determine that all the required actions have been done;
    (iii) Initiate DD Form 1593, Contract Administration Completion 
Record, if

[[Page 19]]

necessary to obtain statements from other organizational elements that 
they have completed the actions they are responsible for; and
    (iv) Upon final payment--
    (A) Process the DD Form 1594 with Blocks 1 through 9 completed or 
the MILSCAP Format Identifier PK9 verifying that all contract 
administration office actions have been done; and
    (B) Send the original of the DD Form 1594 or the MILSCAP Format 
Identifier PK9 to the contracting office, and file a copy in the 
official contract file.
    (2) If the administrative contracting officer (ACO) cannot closeout 
a contract within the specified time period (see FAR 4.804-1), the ACO 
must notify the procuring contracting officer (PCO) within 45 days after 
the expiration of the time period of--
    (i) The reasons for the delay; and
    (ii) New target date for closeout. If MILSCAP procedures apply, the 
ACO shall use the MILSCAP Format Identifier PKX, Unclosed Contract 
Status, to provide this notice to the PCO.
    (3) If the contract still is not closed out by the new target date, 
the ACO shall again notify the PCO with the reasons for delay and new 
target date. If MILSCAP procedures apply, continue to use the MILSCAP 
Format Identifier PKX, Unclosed Contract Status, to provide this notice.



Sec. 204.805  Disposal of contract files.

    (1) The sources of the period for which official contract files must 
be retained are General Records Schedule 3 (Procurement, Supply, and 
Grant Records) and General Records Schedule 6 (Accountable Officers' 
Accounts Records). Copies of the General Records Schedule may be 
obtained from the National Archives and Records Administration, 
Washington, DC 20408.
    (2) Deviations from the periods cannot be granted by the Defense 
Acquisition Regulatory Council. Forward requests for deviations to both 
the Government Accountability Office and the National Archives and 
Records Administration.
    (3) Hold completed contract files in the office responsible for 
maintaining them for a period of 12 months after completion. After the 
initial 12 month period, send the records to the local records holding 
or staging area until they are eligible for destruction. If no space is 
available locally, transfer the files to the General Services 
Administration Federal Records Center that services the area.
    (4) Duplicate or working contract files should contain no originals 
of materials that properly belong in the official files. Destroy working 
files as soon as practicable once they are no longer needed.
    (5) Retain pricing review files, containing documents related to 
reviews of the contractor's price proposals, subject to cost or pricing 
data (see FAR 15.403-4), for six years. If it is impossible to determine 
the final payment date in order to measure the six year period, retain 
the files for nine years.

[56 FR 36289, July 31, 1991, as amended at 62 FR 40472, July 29, 1997; 
63 FR 11528, Mar. 9, 1998; 71 FR 53044, Sept. 8, 2006]

        Subpart 204.9_Taxpayer Identification Number Information

    Source: 64 FR 43099, Aug. 9, 1999, unless otherwise noted.



Sec. 204.902  General.

    (b) DoD uses DD Form 350, Individual Contracting Action Report, to 
meet these reporting requirements.

[64 FR 43099, Aug. 9, 1999, as amended at 71 FR 9268, Feb. 23, 2006]

             Subpart 204.11_Central Contractor Registration

    Source: 68 FR 64558, Nov. 14, 2003, unless otherwise noted.



Sec. 204.1103  Procedures.

    (e) On contractual documents transmitted to the payment office, 
provide the Commercial and Government Entity code, instead of the DUNS 
number or DUNS+4 number, in accordance with agency procedures.

[70 FR 57188, Sept. 30, 2005]



Sec. 204.1104  Solicitation provision and contract clauses.

    When using the clause at FAR 52.204-7, Central Contractor 
Registration, use

[[Page 20]]

the clause with 252.204-7004, Alternate A.

  Subpart 204.70_Uniform Procurement Instrument Identification Numbers



Sec. 204.7000  Scope.

    This subpart--
    (a) Prescribes policies and procedures for assigning numbers to all 
solicitations, contracts, and related instruments; and
    (b) Does not apply to solicitations or orders for communication 
service authorizations issued by the Defense Information Technology 
Contracting Organization of the Defense Information Systems Agency in 
accordance with 239.7407-2.

[68 FR 64556, Nov. 14, 2003]



Sec. 204.7001  Policy.

    (a) Use the uniform procurement instrument identification (PII) 
numbering system prescribed by this subpart for the solicitation/
contract instruments described in 204.7003 and 204.7004.
    (b) Retain the basic PII number unchanged for the life of the 
instrument unless the conditions in paragraph (c) of this section exist.
    (c)(1) If continued performance under a contract number is not 
possible or is not in the Government's best interest solely for 
administrative reasons (e.g., when the supplementary PII serial 
numbering system is exhausted or for lengthy major systems contracts 
with multiple options), the contracting officer may assign an additional 
PII number by issuing a separate continued contract to permit continued 
contract performance.
    (2) A continued contract--
    (i) Does not constitute a new procurement;
    (ii) Incorporates all prices, terms, and conditions of the 
predecessor contract effective at the time of issuance of the continued 
contract;
    (iii) Operates as a separate contract independent of the predecessor 
contract once issued; and
    (iv) Shall not evade competition, expand the scope of work, or 
extend the period of performance beyond that of the predecessor 
contract.
    (3) When issuing a continued contract, the contracting officer 
shall--
    (i) Issue an administrative modification to the predecessor contract 
to clearly state that--
    (A) Any future awards provided for under the terms of the 
predecessor contract (e.g., issuance of orders or exercise of options) 
will be accomplished under the continued contract; and
    (B) Supplies and services already acquired under the predecessor 
contract shall remain solely under that contract for purposes of 
Government inspection, acceptance, payment, and closeout; and
    (ii) Follow the procedures at PGI 204.7001(c).

[71 FR 27640, May 12, 2006]



Sec. 204.7002  Procedures.

    (a) In assigning PII numbers--
    (1) Use only the alpha-numeric characters, as prescribed in this 
subpart; and
    (2) Do not use the letter ``I'' or ``O''.
    (b) If department/agency procedures require other identification on 
the solicitation, contract, or other related instrument forms, enter it 
in such a location so as to separate it clearly from the PII number.
    (c) Enter the basic PII number, including Federal supply contract 
numbers and any supplementary numbers, in the spaces provided on the 
solicitation, contract, or related instrument forms. Separate the major 
elements by dashes, e.g., N00023-90-D-0009 (not necessary in electronic 
transmission). If there is no space provided on the form, enter the 
number in the upper right corner of the form and identify what it is 
(e.g., Supplementary Number N00023-90-F-0120).

[56 FR 36289, July 31, 1991, as amended at 65 FR 14398, Mar. 16, 2000; 
68 FR 64556, Nov. 14, 2003]



Sec. 204.7003  Basic PII number.

    (a) Elements of a number. The number consists of 13 alpha-numeric 
characters grouped to convey certain information.
    (1) Positions 1 through 6. The first six positions identify the 
department/agency and office issuing the instrument. Use the DoD 
Activity Address

[[Page 21]]

Code (DoDAAC) assigned to the issuing office. DoDAACs can be found at 
https://day2k1.daas.dla.mil/daasinq/.
    (2) Positions 7 through 8. The seventh and eighth positions are the 
last two digits of the fiscal year in which the PII number was assigned.
    (3) Position 9. Indicate the type of instrument by entering one of 
the following upper case letters in position nine--
    (i) Blanket purchase agreements--A
    (ii) Invitations for bids--B
    (iii) Contracts of all types except indefinite delivery contracts, 
facilities contracts, sales contracts, and contracts placed with or 
through other Government departments or agencies or against contracts 
placed by such departments or agencies outside the DoD--C
    (iv) Indefinite delivery contracts--D
    (v) Facilities contracts--E
    (vi) Contracting actions placed with or through other Government 
departments or agencies or against contracts placed by such departments 
or agencies outside the DoD (including actions with the National 
Industries for the Blind (NIB), the National Industries for the Severely 
Handicapped (NISH), and the Federal Prison Industries (UNICOR))--F
    (vii) Basic ordering agreements--G
    (viii) Agreements, including basic agreements and loan agreements, 
but excluding blanket purchase agreements, basic ordering agreements, 
and leases--H
    (ix) Do not use--I
    (x) Reserved--J
    (xi) Short form research contract--K
    (xii) Lease agreement--L
    (xiii) Purchase orders--manual (assign W when numbering capacity of 
M is exhausted during the fiscal year)--M
    (xiv) Notice of intent to purchase--N
    (xv) Do not use--O
    (xvi) Purchase order--automated (assign V when numbering capacity of 
P is exhausted during a fiscal year)--P
    (xvii) Request for quotation--manual--Q
    (xviii) Request for proposal--R
    (xix) Sales contract--S
    (xx) Request for quotation--automated (assign U when numbering 
capacity of T is exhausted during a fiscal year)--T
    (xxi) See T--U
    (xxii) See P--V
    (xxiii) See M--W
    (xxiv) Reserved for departmental use--X
    (xxv) Imprest fund--Y
    (xxvi) Reserved for departmental use--Z
    (4) Position 10 through 13. Enter the serial number of the 
instrument in these positions. A separate series of serial numbers may 
be used for any type of instrument listed in paragraph (a)(3) of this 
section. Activities shall assign such series of PII numbers 
sequentially. An activity may reserve blocks of numbers or alpha-numeric 
numbers for use by its various components.
    (b) Illustration of PII number. The following illustrates a properly 
configured PII number--

[[Page 22]]

[GRAPHIC] [TIFF OMITTED] TC01FE91.052


[56 FR 36289, July 31, 1991, as amended at 56 FR 67212, Dec. 30, 1991; 
59 FR 27668, May 27, 1994; 60 FR 61592, Nov. 30, 1995; 61 FR 50451, 
Sept. 26, 1996; 62 FR 34121, June 24, 1997; 64 FR 51075, Sept. 21, 1999; 
65 FR 14398, Mar. 16, 2000; 65 FR 39704, June 27, 2000; 68 FR 7439, Feb. 
14, 2003; 68 FR 64557, Nov. 14, 2003; 69 FR 63327, Nov. 1, 2004]



Sec. 204.7004  Supplementary PII numbers.

    (a) Uses of the supplementary number. Use supplementary numbers with 
the basic PII number, to identify--
    (1) Amendments to solicitations;
    (2) Modifications to contracts and agreements, including provisioned 
item orders; and
    (3) Calls or orders under contracts, basic ordering agreements, or 
blanket purchase agreements, issued by the contracting office or by a 
DoD activity other than the contracting office, including DoD orders 
against Federal supply schedules.
    (b) Amendments to solicitations. Number amendments to solicitations 
sequentially using a four position numeric serial number added to the 
basic PII number and beginning with 0001, e.g., N00062-91-R-1234-0001.
    (c) Modifications to contracts and agreements. (1) Number 
modifications to contracts and agreements using a six position alpha-
numeric added to the basic PII number.
    (2) Position 1. Identify the office issuing the modification--
    (i) Contract administration office--A
    (ii) Contracting office--P
    (3) Positions 2 through 3. These are the first two digits in a 
serial number. They may be either alpha or numeric. Use the letters K, 
L, M, N, P, Q, S, T, U, V, W, X, Y, or Z only in the second position and 
only in the following circumstances--
    (i) Use K, L, M, N, P, and Q in the second position only if the 
modification is issued by the Air Force and is a provisioned item order.
    (ii) Use S, and only S, in the second position to identify 
modifications issued to provide initial or amended shipping instructions 
when--
    (A) The contract has either FOB origin or destination delivery 
terms; and
    (B) The price changes.
    (iii) Use T, U, V, W, X, or Y, and only those characters, in the 
second position to identify modifications issued to provide initial or 
amended shipping instructions when--
    (A) The contract has FOB origin delivery terms; and
    (B) The price does not change.
    (iv) Only use Z in the second position to identify a modification 
which definitizes a letter contract.
    (4) Positions 4 through 6. These positions are always numeric. Use a 
separate series of serial numbers for each type of modification listed 
in paragraph (c)(3) of this section. Examples of proper numbering for 
positions 2-6 (the first position will be either ``A'' or ``P'') are as 
follows:

[[Page 23]]



------------------------------------------------------------------------
                                  Provisioned items
                                 order (reserved for       Shipping
      Normal modification          exclusive use by      instructions
                                 the Air Force only)
------------------------------------------------------------------------
00001-99999....................  K0001-K9999          S0001-S9999
  then.........................  KA001-KZ999          SA001-SZ999
A0001-A9999....................  L0001-L9999          T0001-T9999
B0001-B9999....................  LA001-LZ999          TA001-TZ999
  and so on to.................  M0001-M9999          U0001-U9999
H0001-H9999....................  MA001-MZ999          UA001-UZ999
  then.........................  N0001-N9999          V0001-V9999
J0001-J9999....................  NA001-NZ999          VA001-VZ999
  then.........................  P0001-P9999          W0001-W9999
R0001-R9999....................  PA001-PZ999          WA001-WZ999
  then.........................  Q0001-Q9999          X0001-X9999
AA001-HZ999....................  QA001-QZ999          XA001-XZ999
  then.........................  ...................  Y0001-Y9999
JA001-JZ999....................  ...................  YA001-YZ999
RA001-RZ999....................
------------------------------------------------------------------------

    (5) If the contract administration office is changing the contract 
administration or disbursement office for the first time and is using 
computer generated modifications to notify many offices, it uses the six 
position supplementary number ARZ999. If either office has to be changed 
again during the life of the contract, the supplementary number will be 
ARZ998, and on down as needed.
    (6) Each office authorized to issue modifications shall assign the 
supplementary identification numbers in sequence. Do not assign the 
numbers until it has been determined that a modification is to be 
issued.
    (d) Delivery orders under indefinite delivery contracts, orders 
under basic ordering agreements, and calls under blanket purchase 
agreements. (1) Calls or orders issued by the office issuing the 
contract or agreement. Use a four position alpha-numeric call or order 
serial number added to the basic PII number. These shall be identified 
by using serial numbers beginning 0001 through 9999. When the numeric 
identifiers run out, use alpha characters in the third and fourth 
positions. Never use alpha characters in the first and second positions.
    (2) Orders placed against another activity's contract or agreement.
    (i) If the office placing the order or call is different from the 
office identified in the basic PII number, assign a serial number to the 
order or call. The first and second positions contain the call/order 
code assigned to the ordering office in accordance with 204.7005. Do not 
use the letters A or P in the first position. The third and fourth 
positions are a two position serial number assigned by the ordering 
office. The series will begin with 01. When the numbers exceed 99, the 
office will assign a uniform series of identifiers containing alpha and/
or numeric characters, e.g., Basic : N00383-91-D-0001 serial 
: TU01.
    (ii) If an office is placing calls or orders with NIB, NISH, or 
UNICOR, the office shall identify the instrument with a 13 position 
supplementary PII number using an F in the 9th position. Modifications 
to these calls or orders shall be numbered in accordance with paragraph 
(c) of this section, e.g., Order : DLA100-91-F-0001 
modification : A00001.
    (e) Modifications to calls or orders. Use a two position alpha-
numeric suffix, known as a call or order modification indicator, to 
identify a modification to a call or order.
    (1) Modifications to a call or order issued by a purchasing office 
begin with 01, 02, and so on through 99, then B1 through B9, BA through 
BZ, C1 through C9, and so on through ZZ.
    (2) Modifications to a call or order issued by a contract 
administration office begin with 1A, 1B, and so on through 9Z, followed 
by A1, A2, and so on to A9, then AA, AB, and so on through AZ.

[64 FR 43099, Aug. 9, 1999, as amended at 68 FR 64557, Nov. 14, 2003]



Sec. 204.7005  Assignment of order codes.

    (a) The Defense Logistics Agency, Acquisition Policy Branch (J-
3311), Fort Belvoir, VA 22060-6221, is the executive agent for 
maintenance of code assignments for use in the first two positions of an 
order number when an activity places an order against another activity's 
contract or agreement (see 204.7004(d)(2)). The executive agent 
distributes blocks of two-character order codes to department/agency 
monitors for further assignment.
    (b) Contracting activities submit requests for assignment of or 
changes in two-character order codes to their respective monitors in 
accordance with department/agency procedures. Order code monitors--
    (1) Approve requests for additions, deletions, or changes; and

[[Page 24]]

    (2) Provide notification of additions, deletions, or changes to--
    (i) The executive agent; and
    (ii) The executive editor, Defense Acquisition Regulations, 
OUSD(AT&L)DPAP(DAR), 3062 Defense Pentagon, Washington, DC 20301-3062.
    (c) Order code monitors are--

Army: Army Contracting Agency, Attn: SFCA-IT, 5109 Leesburg Pike, Suite 
302, Falls Church, VA 22041-3201
Navy and Marine Corps: Office of the Assistant Secretary of the Navy 
(RD&A), 1000 Navy Pentagon, Room BF992, Washington, DC 20350-1000
Air Force: SAF/AQCX, 1060 Air Force Pentagon, Washington, DC 20330-1060
Defense Logistics Agency: Defense Logistics Agency, Acquisition Policy 
Branch (J-3311), John J. Kingman Road, Fort Belvoir, VA 22060-6221
Other Defense Agencies: Army Contracting Agency, Attn: SFCA-IT 5109 
Leesburg Pike, Suite 302, Falls Church, VA 22041-3201

    (d) Order code assignments can be found at http://www.acq.osd.mil/
dpap/dfars/ordercode.htm.

[68 FR 64557, Nov. 14, 2003, as amended at 69 FR 63327, Nov. 1, 2004]

       Subpart 204.71_Uniform Contract Line Item Numbering System



Sec. 204.7100  Scope.

    This subpart prescribes policies and procedures for assigning 
contract line item numbers.



Sec. 204.7101  Definitions.

    Accounting classification reference number (ACRN) means any 
combination of a two position alpha/numeric code used as a method of 
relating the accounting classification citation to detailed line item 
information contained in the schedule.
    Attachment means any documentation, appended to a contract or 
incorporated by reference, which does not establish a requirement for 
deliverables.
    Definitized item, as used in this subpart, means an item for which a 
firm price has been established in the basic contract or by 
modification.
    Exhibit means a document, referred to in a contract, which is 
attached and establishes requirements for deliverables. The term shall 
not be used to refer to any other kind of attachment to a contract. The 
DD Form 1423, Contract Data Requirements List, is always an exhibit, 
rather than an attachment.
    Nonseverable deliverable, as used in this subpart, means a 
deliverable item that is a single end product or undertaking, entire in 
nature, that cannot be feasibly subdivided into discrete elements or 
phases without losing its identity.
    Undefinitized item, as used in this subpart, means an item for which 
a price has not been established in the basic contract or by 
modification.

[56 FR 36289, July 31, 1991, as amended at 60 FR 34468, July 3, 1995; 70 
FR 58982, Oct. 11, 2005]



Sec. 204.7102  Policy.

    (a) The numbering procedures of this subpart shall apply to all--
    (1) Solicitations;
    (2) Solicitation line and subline item numbers;
    (3) Contracts as defined in FAR Subpart 2.1;
    (4) Contract line and subline item numbers;
    (5) Exhibits;
    (6) Exhibit line and subline items; and
    (7) Any other document expected to become part of the contract.
    (b) The numbering procedures are mandatory for all contracts where 
separate contract line item numbers are assigned, unless--
    (1) The contract is an indefinite-delivery type for petroleum 
products against which posts, camps, and stations issue delivery orders 
for products to be consumed by them; or
    (2) The contract is a communications service authorization issued by 
the Defense Information Systems Agency's Defense Information Technology 
Contracting Organization.

[71 FR 9269, Feb. 23, 2006]



Sec. 204.7103  Contract line items.



Sec. 204.7103-1  Criteria for establishing.

    Contracts shall identify the items or services to be acquired as 
separate contract line items unless it is not feasible to do so.

[[Page 25]]

    (a) Contract line items shall have all four of the following 
characteristics; however, there are exceptions within the 
characteristics, which may make establishing a separate contract line 
item appropriate even though one of the characteristics appears to be 
missing--
    (1) Single unit price. The item shall have a single unit price or a 
single total price, except--
    (i) If the item is not separately priced (NSP) but the price is 
included in the unit price of another contract line item, enter NSP 
instead of the unit price;
    (ii) When there are associated subline items, established for other 
than informational reasons, and those subline items are priced in 
accordance with 204.7104;
    (iii) When the items or services are being acquired on a cost-
reimbursement contract;
    (iv) When the contract is for maintenance and repair services (e.g., 
a labor hour contract) and firm prices have been established for 
elements of the total price of an item but the actual number and 
quantity of the elements are not known until performance. The 
contracting officer may structure these contracts to reflect a firm or 
estimated total amount for each line item;
    (v) When the contract line item is established to refer to an 
exhibit or an attachment (if management needs dictate that a unit price 
be entered, the price shall be set forth in the item description block 
and enclosed in parentheses); or
    (vi) When the contract is an indefinite delivery type contract and 
provides that the price of an item shall be determined at the time a 
delivery order is placed and the price is influenced by such factors as 
the quantity ordered (e.g., 10-99 @ $1.00, 100-249 @ $.98, 250+ @ $.95), 
the destination, the FOB point, or the type of packaging required.
    (2) Separately identifiable. A contract line item must be identified 
separately from any other items or services on the contract.
    (i) Supplies are separately identifiable if they have no more than 
one--
    (A) National stock number (NSN);
    (B) Item description; or
    (C) Manufacturer's part number.
    (ii) Services are separately identifiable if they have no more than 
one--
    (A) Scope of work; or
    (B) Description of services.
    (iii) This requirement does not apply if there are associated 
subline items, established for other than informational reasons, and 
those subline items include the actual detailed identification in 
accordance with 204.7104. Where this exception applies, use a general 
narrative description instead of the contract item description.
    (3) Separate delivery schedule. Each contract line item or service 
shall have its own delivery schedule, period of performance, or 
completion date expressly stated (``as required'' constitutes an 
expressly stated delivery term).
    (i) The fact that there is more than one delivery date, destination, 
performance date, or performance point may be a determining factor in 
the decision as to whether to establish more than one contract line 
item.
    (ii) If a contract line item has more than one destination or 
delivery date, the contracting officer may create individual contract 
line items for the different destinations or delivery dates, or may 
specify the different delivery dates for the units by destination in the 
delivery schedule.
    (4) Single accounting classification citation. (i) Each contract 
line item shall reference a single accounting classification citation 
except as provided in paragraph (a)(4)(ii) of this subsection.
    (ii) The use of multiple accounting classification citations for a 
contract line item is authorized in the following situations:
    (A) A single, nonseverable deliverable to be paid for with R&D or 
other funds properly incrementally obligated over several fiscal years 
in accordance with DoD policy;
    (B) A single, nonseverable deliverable to be paid for with different 
authorizations or appropriations, such as in the acquisition of a 
satellite or the modification of production tooling used to produce 
items being acquired by several activities; or
    (C) A modification to an existing contract line item for a 
nonseverable deliverable that results in the delivery of

[[Page 26]]

a modified item(s) where the item(s) and modification are to be paid for 
with different accounting classification citations.
    (iii) When the use of multiple accounting classification citations 
is authorized for a single contract line item, establish informational 
subline items for each accounting classification citation in accordance 
with 204.7104-1(a).
    (b) All subline items and exhibit line items under one contract line 
item shall be the same contract type as the contract line item.
    (c) For a contract that contains a combination of fixed-price line 
items, time-and-materials/labor-hour line items, and/or cost-
reimbursement line items, identify the contract type for each contract 
line item in Section B, Supplies or Services and Prices/Costs, to 
facilitate appropriate payment.
    (d) Exhibits may be used as an alternative to putting a long list of 
contract line items in the schedule. If exhibits are used, create a 
contract line item citing the exhibit's identifier. See 204.7105(a).
    (e) If the contract involves a test model or a first article which 
must be approved, establish a separate contract line item or subline 
item for each item of supply or service which must be approved. If the 
test model or first article consists of a lot composed of a mixture of 
items, a single line item or subline item may be used for the lot.
    (f) If a supply or service involves ancillary functions, like 
packaging and handling, transportation, payment of state or local taxes, 
or use of reusable containers, and these functions are normally 
performed by the contractor and the contractor is normally entitled to 
reimbursement for performing these functions, do not establish a 
separate contract line item solely to account for these functions. 
However, do identify the functions in the contract schedule. If the 
offeror separately prices these functions, contracting officers may 
establish separate contract line items for the functions; however, the 
separate line items must conform to the requirements of paragraph (a) of 
this subsection.

[56 FR 36289, July 31, 1991, as amended at 60 FR 34468, July 3, 1995; 60 
FR 43191, Aug. 18, 1995; 70 FR 58982, Oct. 11, 2005]



Sec. 204.7103-2  Numbering procedures.

    Follow the procedures at PGI 204.7103-2 for numbering contract line 
items.

[70 FR 58983, Oct. 11, 2005]



Sec. 204.7104  Contract subline items.



Sec. 204.7104-1  Criteria for establishing.

    Contract subline items provide flexibility to further identify 
elements within a contract line item for tracking performance or 
simplifying administration. There are only two kinds of subline items: 
those which are informational in nature and those which consist of more 
than one item that requires separate identification.
    (a) Informational subline items. (1) This type of subline item 
identifies information that relates directly to the contract line item 
and is an integral part of it (e.g., parts of an assembly or parts of a 
kit). These subline items shall not be scheduled separately for 
delivery, identified separately for shipment or performance, or priced 
separately for payment purposes.
    (2) The informational subline item may include quantities, prices, 
or amounts, if necessary to satisfy management requirements. However, 
these elements shall be included within the item description in the 
supplies/services column and enclosed in parentheses to prevent 
confusing them with quantities, prices, or amounts that have contractual 
significance. Do not enter these elements in the quantity and price 
columns.
    (3) Informational subline items shall be used to identify each 
accounting classification citation assigned to a single contract line 
item number when use of multiple citations is authorized (see 204.7103-
1(a)(4)(ii)).
    (b) Separately identified subline items. (1) Subline items will be 
used instead of contract line items to facilitate payment, delivery 
tracking, contract funds accounting, or other management purposes. Such 
subline items shall be used when items bought under one contract line 
item number--
    (i) Are to be paid for from more than one accounting classification. 
A subline item shall be established for the quantity associated with the 
single

[[Page 27]]

accounting classification citation. Establish a line item rather than a 
subline item if it is likely that a subline item may be assigned 
additional accounting classification citations at a later date. Identify 
the funding as described in 204.7104-1(a)(3);
    (ii) Are to be packaged in different sizes, each represented by its 
own NSN;
    (iii) Have collateral costs, such as packaging costs, but those 
costs are not a part of the unit price of the contract line item;
    (iv) Have different delivery dates or destinations or requisitions, 
or a combination of the three; or
    (v) Identify parts of an assembly or kit which--
    (A) Have to be separately identified at the time of shipment or 
performance; and
    (B) Are separately priced.
    (2) Each separately identified contract subline item shall have its 
own--
    (i) Delivery schedule, period of performance, or completion date;
    (ii) Unit price or single total price or amount (not separately 
priced (NSP) is acceptable as an entry for price or amount if the price 
is included in another subline item or a different contract line item). 
This requirement does not apply--
    (A) If the subline item was created to refer to an exhibit or an 
attachment. If management needs dictate that a unit price be entered, 
the price shall be set forth in the item description block of the 
schedule and enclosed in parentheses; or
    (B) In the case of indefinite delivery contracts described at 
204.7103-1(a)(1)(vi).
    (iii) Identification (e.g., NSN, item description, manufacturer's 
part number, scope of work, description of services).
    (3) Unit prices and extended amounts.
    (i) The unit price and total amount for all subline items may be 
entered at the contract line item number level if the unit price for the 
subline items is identical. If there is any variation, the subline item 
unit prices shall be entered at the subline item level only.
    (ii) The unit price and extended amounts may be entered at the 
subline items level.
    (iii) The two methods in paragraphs (b)(3) (i) and (ii) of this 
subsection shall not be combined in a contract line item.
    (iv) When the price for items not separately priced is included in 
the price of another subline item or contract line item, it may be 
necessary to withhold payment on the priced subline item until all the 
related subline items that are not separately priced have been 
delivered. In those cases, use the clause at 252.204-7002, Payment for 
Subline Items Not Separately Priced.

[56 FR 36289, July 31, 1991, as amended at 60 FR 34468, July 3, 1995; 68 
FR 75200, Dec. 30, 2003]



Sec. 204.7104-2  Numbering procedures.

    Follow the procedures at PGI 204.7104-2 for numbering contract 
subline items.

[70 FR 58983, Oct. 11, 2005]



Sec. 204.7105  Contract exhibits and attachments.

    Follow the procedures at PGI 204.7105 for use and numbering of 
contract exhibits and attachments.

[71 FR 9269, Feb. 23, 2006]



Sec. 204.7106  Contract modifications.

    (a) If new items are added, assign new contract line or subline item 
numbers or exhibit line item numbers, in accordance with the procedures 
established at 204.7103, 204.7104, and 204.7105.
    (b) Modifications to existing contract line items or exhibit line 
items. (1) If the modification relates to existing contract line items 
or exhibit line items, the modification shall refer to those item 
numbers.
    (2) If the contracting officer decides to assign new identifications 
to existing contract or exhibit line items, the following rules apply--
    (i) Definitized and undefinitized items. (A) The original line item 
or subline item number may be used if the modification applies to the 
total quantity of the original line item or subline.
    (B) The original line item or subline item number may be used if the 
modification makes only minor changes in the specifications of some of 
the items ordered on the original line item or subline item and the 
resulting changes

[[Page 28]]

in unit price can be averaged to provide a new single unit price for the 
total quantity. If the changes in the specifications make the item 
significantly distinguishable from the original item or the resulting 
changes in unit price cannot be averaged, create a new line item.
    (C) If the modification affects only a partial quantity of an 
existing contract or exhibit line item or subline item and the change 
does not involve either the delivery date or the ship-to/mark-for data, 
the original contract or exhibit line item or subline item number shall 
remain with the unchanged quantity. Assign the changed quantity the next 
available number.
    (ii) Undefinitized items. In addition to the rules in paragraph 
(b)(2)(i), the following additional rules apply to undefinitized items--
    (A) If the modification is undefinitized and increases the quantity 
of an existing definitized item, assign the undefinitized quantity the 
next available number.
    (B) If the modification increases the quantity of an existing 
undefinitized item, the original contract or exhibit line item or 
subline item may be used if the unit price for the new quantity is 
expected to be the same as the price for the original quantity. If the 
unit prices of the two quantities will be different, assign the new 
quantity the next available number.
    (C) If the modification both affects only a partial quantity of the 
existing contract or exhibit line or subline item and definitizes the 
price for the affected portion, the definitized portion shall retain the 
original item number. If there is any undefinitized portion of the item, 
assign it the next available number. However, if the modification 
definitizes the price for the whole quantity of the line item, and price 
impact of the changed work can be apportioned equally over the whole to 
arrive at a new unit price, the quantity with the changes can be added 
into the quantity of the existing item.
    (D) If the modification affects only a partial quantity of an 
existing contract or exhibit line or subline item but does not change 
the delivery schedule or definitize price, the unchanged portion shall 
retain the original contract or exhibit line or subline item number. 
Assign the changed portion the next available number.
    (3) If the modification will decrease the amount obligated--
    (i) There shall be coordination between the administrative and 
procuring contracting offices before issuance of the modification; and
    (ii) The contracting officer shall not issue the modification unless 
sufficient unliquidated obligation exists or the purpose is to recover 
monies owed to the Government.

[56 FR 36289, July 31, 1991, as amended at 70 FR 58983, Oct. 11, 2005]



Sec. 204.7107  Contract accounting classification reference number 
          (ACRN).

    Follow the procedures at PGI 204.7107 for assigning ACRNs.

[70 FR 58983, Oct. 11, 2005]



Sec. 204.7108  Payment instructions.

    Follow the procedures at PGI 204.7108 for inclusion of payment 
instructions in contracts.

[70 FR 58983, Oct. 11, 2005]



Sec. 204.7109  Contract clause.

    Use the clause at 252.204-7006, Billing Instructions, in 
solicitations and contracts if Section G includes--
    (a) Any of the standard payment instructions at PGI 204.7108(d)(1) 
through (6); or
    (b) Other payment instructions, in accordance with PGI 
204.7108(d)(12), that require contractor identification of the contract 
line item(s) on the payment request.

[70 FR 58983, Oct. 11, 2005]

                Subpart 204.72_Contractor Identification



Sec. 204.7200  Scope of subpart.

    This subpart prescribes uniform policies and procedures for 
identification of commercial and Government entities when it is 
necessary to--
    (a) Exchange data with another contracting activity, including 
contract administration activities and contract payment activities, or 
comply with the reporting requirements of subpart 204.6; or

[[Page 29]]

    (b) Identify contractors for the purpose of developing computerized 
acquisition systems or solicitation mailing lists.

[64 FR 43099, Aug. 9, 1999]



Sec. 204.7201  Definitions.

    (a) Commercial and Government Entity (CAGE) code means--
    (1) A code assigned by the Defense Logistics Information Service 
(DLIS) to identify a commercial or Government entity; or
    (2) A code assigned by a member of the North Atlantic Treaty 
Organization (NATO) that DLIS records and maintains in the CAGE master 
file. This type of code is known as an ``NCAGE code.''
    (b) Contractor identification code means a code that the contracting 
office uses to identify an offeror. The three types of contractor 
identification codes are CAGE codes, Data Universal Numbering System 
(DUNS) numbers, and Taxpayer Identification Numbers (TINs).

[64 FR 43099, Aug. 9, 1999]



Sec. 204.7202  General.



Sec. 204.7202-1  CAGE codes.

    (a) DLIS assigns or records and maintains CAGE codes to identify 
commercial and Government entities. DoD 4000.25-5-M, Military Standard 
Contract Administration Procedures (MILSCAP), and Volume 7 of DoD 
4100.39-M, Federal Logistics Information System (FLIS) Procedures 
Manual, prescribe use of CAGE codes.
    (b)(1) If a prospective contractor located in the United States must 
register in the Central Contractor Registration (CCR) database (see FAR 
Subpart 4.11) and does not have a CAGE code, DLIS will assign a CAGE 
code when the prospective contractor submits its request for 
registration in the CCR database. Foreign registrants must obtain a 
North Atlantic Treaty Organization CAGE (NCAGE) code in order to 
register in the CCR database. NCAGE codes may be obtained from the 
Codification Bureau in the foreign registrant's country. Additional 
information on obtaining NCAGE codes is available at http://
www.dlis.dla.mil/Forms/Form--AC135.asp.
    (2) If registration in the CCR database is not required, the 
prospective contractor's CAGE code is not already available in the 
contracting office, and the prospective contractor does not respond to 
the provision at 252.204-7001, Commercial and Government Entity (CAGE) 
Code Reporting, use the following procedures:
    (i) To identify the prospective contractor's CAGE code, use--
    (A) The monthly H-series CD ROM that contains the H-4/H-8 CAGE 
master file issued by DLIS (Their address is: Customer Service, Federal 
Center, 74 Washington Avenue, North, Battle Creek, MI 49017-3084. Their 
telephone number is: toll-free 1-888-352-9333);
    (B) The on-line access to the CAGE file through the Defense 
Logistics Information System;
    (C) The on-line access to the Defense Logistics Agency (DLA) CAGE 
file through the DLA Network or dial-up capability; or
    (D) The Internet to access the CAGE Lookup Server at http://
www.dlis.dla.mil/cage--welcome.asp.
    (ii) If no CAGE code is identified through use of the procedures in 
paragraph (b)(2)(i) of this subsection, ask DLIS to assign a CAGE code. 
Submit a DD Form 2051, Request for Assignment of a Commercial and 
Government Entity (CAGE) Code, (or electronic equivalent) to the address 
in paragraph (b)(2)(i)(A) of this subsection, ATTN: DLIS-SBB. The 
contracting office completes Section A of the DD Form 2051, and the 
contractor completes Section B. The contracting office must verify 
Section B before submitting the form.
    (c) Direct questions on obtaining computer tapes, electronic 
updates, or code assignments to DLIS Customer Service: toll-free (888) 
227-2423 or (888) 352-9333; DSN 932-4725; or commercial (616) 961-4725.

[64 FR 43100, Aug. 9, 1999, as amended at 65 FR 63804, Oct. 25, 2000; 67 
FR 49252, July 30, 2002; 68 FR 15380, Mar. 31, 2003; 68 FR 64558, Nov. 
14, 2003]



Sec. 204.7202-2  DUNS numbers.

    Requirements for use of DUNS numbers are in FAR 4.602(d) and 4.603.

[64 FR 43100, Aug. 9, 1999]

[[Page 30]]



Sec. 204.7202-3  TINs.

    Requirements for use of TINs are in FAR subpart 4.9.

[64 FR 43100, Aug. 9, 1999]



Sec. 204.7203  Responsibilities of contracting officers.

    (a) Assist offerors in obtaining the required CAGE codes.
    (b) Do not deny a potential offeror a solicitation package because 
the offeror does not have a contractor identification code.
    (c) Consider requesting a CAGE code at the time a potential offeror 
is sent a solicitation package or added to the mailing list to ensure 
that a code is assigned in sufficient time to process the DD Form 350, 
Individual Contracting Action Report, without delay.

[64 FR 43100, Aug. 9, 1999]



Sec. 204.7204  Maintenance of the CAGE file.

    (a) DLIS will accept written requests for changes to CAGE files, 
other than name changes, from the following entities:
    (1) The entity identified by the code. The entity must use company 
letterhead to forward the request.
    (2) The contracting office.
    (3) The contract administration office.
    (b) Submit requests for changes to CAGE files on DD Form 2051, or 
electronic equivalent, to--Defense Logistics Information Service, DLIS-
SBB, Federal Center, 74 Washington Avenue, North, Battle Creek, MI 
49017-3084. Telephone Numbers: toll-free (888) 352-9333, DSN 932-4725, 
commercial (616) 961-4725. Facsimile: (616) 961-4388, 4485.
    (c) The contracting officer responsible for execution of a change-
of-name agreement (see FAR subpart 42.12) must submit the agreement to 
DLIS-SBB. If there are no current contracts, each contracting and 
contract administration office receiving notification of changes from 
the commercial entity must forward a copy of the change notice annotated 
with the CAGE code to DLIS-SBB unless the change notice indicates that 
DLIS-SBB already has been notified.
    (d) Additional guidance for maintaining CAGE codes is in Volume 7 of 
DoD 4100.39-M, Federal Logistics Information System (FLIS) Procedures 
Manual.

[64 FR 43100, Aug. 9, 1999; 64 FR 46474, Aug. 25, 1999, as amended at 65 
FR 63804, Oct. 25, 2000]



Sec. 204.7205  Novation agreements, mergers and sales of assets.

    Contracting officers shall process and execute novation agreements 
in accordance with FAR Subpart 42.12, Novation and Change-of-Name 
Agreements. These actions are independent of code and name assignments 
made as a result of the occasion which created the need for the novation 
agreement. The maintenance activity will determine which entity(s) will 
retain the existing code(s) and which entities will be assigned new 
codes. The contracting officer responsible for processing the novation 
agreement shall provide the maintenance activity with the following 
information:
    (a) Name(s), address(es), and code(s) of the contractor(s) 
transferring the original contractual rights and obligations 
(transferor).
    (b) Name(s), address(es), and code(s) (if any) of the entity who is 
the successor in interest (transferee).
    (c) Name(s), address(es), and code(s) (if any) of the entity who is 
retaining or receiving the rights to the technical data.
    (d) Description of the circumstances surrounding the novation 
agreement and especially the relationship of each entity to the other.

[56 FR 36289, July 31, 1991, as amended at 66 FR 49861, Oct. 1, 2001]



Sec. 204.7206  Using CAGE codes to identify agents and brokers.

    Authorized agents and brokers are entities and, as such, may be 
assigned CAGE codes for identification and processing purposes.
    (a) A single CAGE code will be assigned to the agent/broker 
establishment in addition to any codes assigned to the entities 
represented by the agent/broker, i.e., only one code will be assigned to 
a specific agent/broker entity regardless of the number of firms 
represented by that agent/broker.

[[Page 31]]

    (b) Additional codes may be assigned to an agent/broker if they meet 
the criteria for assigning additional codes for entities, e.g., 
different location.
    (c) Codes will not be assigned to an agent/broker in care of the 
entity being represented or in any way infer that the agent/broker is a 
separate establishment bearing the name of the entity represented by the 
agent/broker.

[56 FR 36289, July 31, 1991, as amended at 61 FR 51032, Sept. 30, 1996; 
62 FR 48182, Sept. 15, 1997]



Sec. 204.7207  Solicitation provision.

    Use the provision at 252.204-7001, Commercial and Government Entity 
(CAGE) Code Reporting, in solicitations when--
    (a) The solicitation does not include the clause at FAR 52.204-7, 
Central Contractor Registration; and
    (b) The CAGE codes for the potential offerors are not available to 
the contracting office.

[66 FR 47097, Sept. 11, 2001, as amended at 68 FR 64558, Nov. 14, 2003]

[[Page 32]]

                    SUBCHAPTER B_ACQUISITION PLANNING

                  PART 205_PUBLICIZING CONTRACT ACTIONS

           Subpart 205.2_Synopses of Proposed Contract Actions

Sec.

Sec. 205.203 Publicizing and response time.

Sec. 205.207 Preparation and transmittal of synopses.

                Subpart 205.3_Synopses of Contract Awards


Sec. 205.303 Announcement of contract awards.

                  Subpart 205.4_Release of Information


Sec. 205.470 Contract clause.

                    Subpart 205.5_Paid Advertisements


Sec. 205.502 Authority.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36302, July 31, 1991, unless otherwise noted.

           Subpart 205.2_Synopses of Proposed Contract Actions



Sec. 205.203  Publicizing and response time.

    (b) Allow at least 45 days response time when requested by a 
qualifying or designated country source (as these terms are used in part 
225) and the request is consistent with the Government's requirement.



Sec. 205.207  Preparation and transmittal of synopses.

    (d)(i) For acquisitions being considered for historically black 
college and university and minority institution set-asides under 
226.370--
    (A) Cite the appropriate Numbered Note; and
    (B) Include the notice at PGI 205.207(d)(i).
    (ii) For broad agency announcement notices, see 235.016.

[69 FR 63328, Nov. 1, 2004, as amended at 70 FR 73149, Dec. 9, 2005]

                Subpart 205.3_Synopses of Contract Awards



Sec. 205.303  Announcement of contract awards.

    (a) Public announcement. (i) The threshold for DoD awards is $5 
million. Report all contractual actions, including modifications, that 
have a face value, excluding unexercised options, of more than $5 
million.
    (A) For undefinitized contractual actions, report the not-to-exceed 
(NTE) amount. Later, if the definitized amount exceeds the NTE amount by 
more than $5 million, report only the amount exceeding the NTE.
    (B) For indefinite delivery, time and material, labor hour, and 
similar contracts, report the initial award if the estimated face value, 
excluding unexercised options, is more than $5 million. Do not report 
orders up to the estimated value, but after the estimated value is 
reached, report subsequent modifications and orders that have a face 
value of more than $5 million.
    (C) Do not report the same work twice.
    (ii) Departments and agencies submit the information--
    (A) To the Office of the Assistant Secretary of Defense (Public 
Affairs);
    (B) By the close of business the day before the date of the proposed 
award;
    (C) Using report control symbol DD-LA- (AR) 1279;
    (D) Including, as a minimum, the following--
    (1) Contract data. Contract number, modification number, or delivery 
order number, face value of this action, total cumulative face value of 
the contract, description of what is being bought, contract type, 
whether any of the buy was for foreign military sales (FMS) and 
identification of the FMS customer;
    (2) Competition information. Number of solicitations mailed and 
number of offers received;
    (3) Contractor data. Name, address, and place of performance (if 
significant work is performed at a different location);

[[Page 33]]

    (4) Funding data. Type of appropriation and fiscal year of the 
funds, and whether the contract is multiyear (see FAR Subpart 17.1); and
    (5) Miscellaneous data. Identification of the contracting office, 
the contracting office point of contact, known congressional interest, 
and the information release date.
    (iii) Departments and agencies, in accordance with department/agency 
procedures and concurrent with the public announcement, shall provide 
information similar to that required by paragraph (a)(ii) of this 
section to members of Congress in whose state or district the contractor 
is located and the work is to be performed.

[56 FR 36302, July 31, 1991, as amended at 56 FR 67212, Dec. 30, 1991]

                  Subpart 205.4_Release of Information



Sec. 205.470  Contract clause.

    Use the clause at 252.205-7000, Provision of Information to 
Cooperative Agreement Holders, in solicitations and contracts expected 
to exceed $100,000,000. This clause implements 10 U.S.C. 2416.

[69 FR 63328, Nov. 1, 2004, as amended at 70 FR 8537, Feb. 22, 2005]

                    Subpart 205.5_Paid Advertisements



Sec. 205.502  Authority.

    (a) Newspapers. Heads of contracting activities are delegated 
authority to approve the publication of paid advertisements in 
newspapers.

[69 FR 63328, Nov. 1, 2004]

                    PART 206_COMPETITION REQUIREMENTS

Sec.

Sec. 206.001 Applicability.

   Subpart 206.2_Full and Open Competition After Exclusion of Sources


Sec. 206.202 Establishing or maintaining alternative sources.

Sec. 206.203 Set-asides for small business concerns.

           Subpart 206.3_Other Than Full and Open Competition


Sec. 206.302 Circumstances permitting other than full and open 
          competition.

Sec. 206.302-1 Only one responsible source and no other supplies or 
          services will satisfy agency requirements.

Sec. 206.302-2 Unusual and compelling urgency.

Sec. 206.302-3 Industrial mobilization; or engineering, development, or 
          research capability.

Sec. 206.302-3-70 Solicitation provision.

Sec. 206.302-4 International agreement.

Sec. 206.302-5 Authorized or required by statute.

Sec. 206.302-7 Public interest.

Sec. 206.303 Justifications.

Sec. 206.303-1 Requirements.

Sec. 206.304 Approval of the justification.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36303, July 31, 1991, unless otherwise noted.



Sec. 206.001  Applicability.

    (b) As authorized by 10 U.S.C. 1091, contracts awarded to 
individuals using the procedures at 237.104(b)(ii) are exempt from the 
competitive requirements of FAR part 6.
    (S-70) Also excepted from this part are follow-on production 
contracts for products developed pursuant to the ``other transactions'' 
authority of 10 U.S.C. 2371 for prototype projects when--
    (1) The other transaction agreement includes provisions for a 
follow-on production contract;
    (2) The contracting officer receives sufficient information from the 
agreements officer and the project manager for the prototype other 
transaction agreement, which documents that the conditions set forth in 
10 U.S.C. 2371 note, subsections (f)(2) (A) and (B) (see 32 CFR 3.9(d)), 
have been met; and
    (3) The contracting officer establishes quantities and prices for 
the follow-on production contract that do not exceed the quantities and 
target prices established in the other transaction agreement.

[70 FR 2361, Jan. 13, 2005]

[[Page 34]]

   Subpart 206.2_Full and Open Competition After Exclusion of Sources



Sec. 206.202  Establishing or maintaining alternative sources.

    (a) Agencies may use this authority to totally or partially exclude 
a particular source from a contract action.
    (b) The determination and findings (D&F) and the documentation 
supporting the D&F shall identify the source to be excluded from the 
contract action. Include the information at PGI 206.202(b), as 
applicable, and any other information that may be pertinent, in the 
supporting documentation.

[69 FR 74991, Dec. 15, 2004]



Sec. 206.203  Set-asides for small business concerns.

    (b) Also no separate justification or determination and findings is 
required for contract actions processed as historically black college 
and university and minority institution set-asides (see 226.7003).

[63 FR 41973, Aug. 6, 1998]

           Subpart 206.3_Other Than Full and Open Competition



Sec. 206.302  Circumstances permitting other than full and open 
          competition.



Sec. 206.302-1  Only one responsible source and no other supplies or 
          services will satisfy agency requirements.

    (a) Authority. (2)(i) Section 8059 of Pub. L. 101-511 and similar 
sections in subsequent defense appropriations acts prohibit departments 
and agencies from entering into contracts for studies, analyses, or 
consulting services (see FAR subpart 37.2) on the basis of an 
unsolicited proposal without providing for full and open competition, 
unless--
    (1) The head of the contracting activity, or a designee no lower 
than chief of the contracting office, determines that--
    (i) Following thorough technical evaluation, only one source is 
fully qualified to perform the proposed work;
    (ii) The unsolicited proposal offers significant scientific or 
technological promise, represents the product of original thinking, and 
was submitted in confidence; or
    (iii) The contract benefits the national defense by taking advantage 
of a unique and significant industrial accomplishment or by ensuring 
financial support to a new product or idea;
    (2) A civilian official of the DoD, whose appointment has been 
confirmed by the Senate, determines the award to be in the interest of 
national defense; or
    (3) The contract is related to improvement of equipment that is in 
development or production.
    (b) Application. This authority may be used for acquisitions of test 
articles and associated support services from a designated foreign 
source under the DoD Foreign Comparative Testing Program.

[56 FR 36303, July 31, 1991, as amended at 57 FR 14992, Apr. 23, 1992; 
58 FR 28463, May 13, 1993; 69 FR 74991, Dec. 15, 2004]



Sec. 206.302-2  Unusual and compelling urgency.

    (b) Application. For guidance on circumstances under which use of 
this authority may be appropriate, see PGI 206.302-2(b).

[69 FR 74991, Dec. 15, 2004]



Sec. 206.302-3  Industrial mobilization; or engineering, development, or 
          research capability.



Sec. 206.302-3-70  Solicitation provision.

    Use the provision at 252.206-7000, Domestic Source Restriction, in 
all solicitations that are restricted to domestic sources under the 
authority of FAR 6.302-3.



Sec. 206.302-4  International agreement.

    (c) Limitations. Pursuant to 10 U.S.C. 2304(f)(2)(E), the 
justifications and approvals described in FAR 6.303 and 6.304 are not 
required if the head of the contracting activity prepares a document 
that describes the terms of an agreement or treaty or the written 
directions, such as a Letter of Offer and Acceptance, that have the 
effect of requiring the use of other than competitive procedures for the 
acquisition.

[63 FR 67803, Dec. 9, 1998]

[[Page 35]]



Sec. 206.302-5  Authorized or required by statute.

    (b) Application. Agencies may use this authority to--
    (i) Acquire supplies and services from military exchange stores 
outside the United States for use by the armed forces outside the United 
States in accordance with 10 U.S.C. 2424(a) and subject to the 
limitations of 10 U.S.C. 2424(b). The limitations of 10 U.S.C. 2424(b) 
(1) and (2) do not apply to the purchase of soft drinks that are 
manufactured in the United States. For the purposes of 10 U.S.C. 2424, 
soft drinks manufactured in the United States are brand name carbonated 
sodas, manufactured in the United States, as evidenced by product 
markings.
    (ii) Acquire police, fire protection, airfield operation, or other 
community services from local governments at military installations to 
be closed under the circumstances in 237.7401 (Section 2907 of Fiscal 
Year 1994 Defense Authorization Act (Pub. L. 103-160)).
    (c) Limitations. (i) 10 U.S.C. 2361 precludes use of this exception 
for awards to colleges or universities for the performance of research 
and development, or for the construction of any research or other 
facility, unless--
    (A) The statute authorizing or requiring award specifically--
    (1) States that the statute modifies or supersedes the provisions of 
10 U.S.C. 2361,
    (2) Identifies the particular college or university involved, and
    (3) States that award is being made in contravention of 10 U.S.C. 
2361(a); and
    (B) The Secretary of Defense provides Congress written notice of 
intent to award. The contract cannot be awarded until 180 days have 
elapsed since the date Congress received the notice of intent to award. 
Contracting activities must submit a draft notice of intent with 
supporting documentation through channels to the Director of Defense 
Procurement and Acquisition Policy, Office of the Under Secretary of 
Defense (Acquisition, Technology, and Logistics).
    (ii) The limitation in paragraph (c)(i) of this subsection applies 
only if the statute authorizing or requiring award was enacted after 
September 30, 1989.
    (iii) Subsequent statutes may provide different or additional 
constraints on the award of contracts to specified colleges and 
universities. Contracting officers should consult legal counsel on a 
case-by-case basis.

[56 FR 36303, July 31, 1991, as amended at 57 FR 14992, Apr. 23, 1992; 
58 FR 28463, May 13, 1993; 59 FR 36089, July 15, 1994; 60 FR 29497, June 
5, 1995; 60 FR 40107, Aug. 7, 1995; 65 FR 39704, June 27, 2000; 68 FR 
7439, Feb. 14, 2003]



Sec. 206.302-7  Public interest.

    (c) Limitations. For the defense agencies, the written determination 
to use this authority must be made by the Secretary of Defense.



Sec. 206.303  Justifications.



Sec. 206.303-1  Requirements.

    (d) The Director of Defense Procurement and Acquisition Policy, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics), is the agency point of contact for submission of 
justifications to the Office of the United States Trade Representative.

[56 FR 36303, July 31, 1991, as amended at 60 FR 61592, Nov. 30, 1995; 
68 FR 15618, Mar. 31, 2003; 69 FR 74991, Dec. 15, 2004]



Sec. 206.304  Approval of the justification.

    (a)(4) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics) may delegate this authority to--
    (A) An Assistant Secretary of Defense; or
    (B) For a defense agency, an officer or employee serving in, 
assigned, or detailed to that agency who--
    (1) If a member of the armed forces, is serving in a rank above 
brigadier general or rear admiral (lower half); or
    (2) If a civilian, is serving in a position with a grade under the 
General Schedule (or any other schedule for civilian officers or 
employees) that is comparable to or higher than the grade of major 
general or rear admiral.

[61 FR 10285, Mar. 13, 1995, as amended at 61 FR 50451, Sept. 26, 1996; 
65 FR 39704, June 27, 2000]

[[Page 36]]

                      PART 207_ACQUISITION PLANNING

                     Subpart 207.1_Acquisition Plans

Sec.

Sec. 207.103 Agency-head responsibilities.

Sec. 207.105 Contents of written acquisition plans.

Sec. 207.106 Additional requirements for major systems.

Sec. 207.170 Consolidation of contract requirements.

Sec. 207.170-1 Scope.

Sec. 207.170-2 Definitions.

Sec. 207.170-3 Policy and procedures.

Sec. 207.171 Component breakout.

Sec. 207.171-1 Scope.

Sec. 207.171-2 Definition.

Sec. 207.171-3 Policy.

Sec. 207.171-4 Procedures.

                Subpart 207.4_Equipment Lease or Purchase


Sec. 207.401 Acquisition considerations.

Sec. 207.470 Statutory requirements.

Sec. 207.471 Funding requirements.

             Subpart 207.5_Inherently Governmental Functions


Sec. 207.500 Scope of subpart.

Sec. 207.503 Policy.

     Subpart 207.70_Buy-to-Budget_Additional Quantities of End Items


Sec. 207.7001 Definition.

Sec. 207.7002 Authority to acquire additional quantities of end items.

Sec. 207.7003 Limitation.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36305, July 31, 1991, unless otherwise noted.

                     Subpart 207.1_Acquisition Plans



Sec. 207.103  Agency-head responsibilities.

    (d)(i) Prepare written acquisition plans for--
    (A) Acquisitions for development, as defined in FAR 35.001, when the 
total cost of all contracts for the acquisition program is estimated at 
$10 million or more;
    (B) Acquisitions for production or services when the total cost of 
all contracts for the acquisition program is estimated at $50 million or 
more for all years or $25 million or more for any fiscal year; and
    (C) Any other acquisition considered appropriate by the department 
or agency.
    (ii) Written plans are not required in acquisitions for a final buy 
out or one-time buy. The terms ``final buy out'' and ``one-time buy'' 
refer to a single contract that covers all known present and future 
requirements. This exception does not apply to a multiyear contract or a 
contract with options or phases.
    (e) Prepare written acquisition plans for acquisition programs 
meeting the thresholds of paragraphs (d)(i)(A) and (B) of this section 
on a program basis. Other acquisition plans may be written on either a 
program or an individual contract basis.
    (g) The program manager, or other official responsible for the 
program, has overall responsibility for acquisition planning.
    (h) For procurement of conventional ammunition, as defined in DoDD 
5160.65, Single Manager for Conventional Ammunition (SMCA), the SCMA 
will review the acquisition plan to determine if it is consistent with 
retaining national technology and industrial base capabilities in 
accordance with 10 U.S.C. 2304(c)(3) and Section 806 of Public Law 105-
261. The department or agency--
    (i) Shall submit the acquisition plan to the address in PGI 
207.103(h); and
    (ii) Shall not proceed with the procurement until the SMCA provides 
written concurrence with the acquisition plan. In the case of a non-
concurrence, the SCMA will resolve issues with the Army Office of the 
Executive Director for Conventional Ammunition.

[71 FR 53045, Sept. 8, 2006]



Sec. 207.105  Contents of written acquisition plans.

    In addition to the requirements of FAR 7.105, planners shall follow 
the procedures at PGI 207.105.

[71 FR 53045, Sept. 8, 2006]



Sec. 207.106  Additional requirements for major systems.

    (b)(1)(A) The contracting officer is prohibited by 10 U.S.C. 
2305(d)(4)(A) from requiring offers for development

[[Page 37]]

or production of major systems that would enable the Government to use 
technical data to competitively reprocure identical items or components 
of the system if the item or component were developed exclusively at 
private expense, unless the contracting officer determines that--
    (1) The original supplier of the item or component will be unable to 
satisfy program schedule or delivery requirements;
    (2) Proposals by the original supplier of the item or component to 
meet mobilization requirements are insufficient to meet the agency's 
mobilization needs; or
    (3) The Government is otherwise entitled to unlimited rights in 
technical data.
    (B) If the contracting officer makes a determination, under 
paragraphs (b)(1)(A) (1) and (2) of this section, for a competitive 
solicitation, 10 U.S.C. 2305(d)(4)(B) requires that the evaluation of 
items developed at private expense be based on an analysis of the total 
value, in terms of innovative design, life-cycle costs, and other 
pertinent factors, of incorporating such items in the system.



Sec. 207.170  Consolidation of contract requirements.



Sec. 207.170-1  Scope.

    This section implements 10 U.S.C. 2382.

[69 FR 55987, Sept. 17, 2004]



Sec. 207.170-2  Definitions.

    As used in this section--
    Consolidation of contract requirements means the use of a 
solicitation to obtain offers for a single contract or a multiple award 
contract to satisfy two or more requirements of a department, agency, or 
activity for supplies or services that previously have been provided to, 
or performed for, that department, agency, or activity under two or more 
separate contracts.
    Multiple award contract means-
    (1) Orders placed using a multiple award schedule issued by the 
General Services Administration as described in FAR Subpart 8.4;
    (2) A multiple award task order or delivery order contract issued in 
accordance with FAR Subpart 16.5; or
    (3) Any other indefinite-delivery, indefinite-quantity contract that 
an agency enters into with two or more sources for the same line item 
under the same solicitation.

[71 FR 14106, Mar. 21, 2006]



Sec. 207.170-3  Policy and procedures.

    (a) Agencies shall not consolidate contract requirements with an 
estimated total value exceeding $5,000,000 unless the acquisition 
strategy includes--
    (1) The results of market research;
    (2) Identification of any alternative contracting approaches that 
would involve a lesser degree of consolidation; and
    (3) A determination by the senior procurement executive that the 
consolidation is necessary and justified.
    (i) Market research may indicate that consolidation of contract 
requirements is necessary and justified if the benefits of the 
acquisition strategy substantially exceed the benefits of each of the 
possible alternative contracting approaches. Benefits may include costs 
and, regardless of whether quantifiable in dollar amounts--
    (A) Quality;
    (B) Acquisition cycle;
    (C) Terms and conditions; and
    (D) Any other benefit.
    (ii) Savings in administrative or personnel costs alone do not 
constitute a sufficient justification for a consolidation of contract 
requirements unless the total amount of the cost savings is expected to 
be substantial in relation to the total cost of the procurement.
    (b) Include the determination made in accordance with paragraph 
(a)(3) of this section in the contract file.

[69 FR 55987, Sept. 17, 2004, as amended at 71 FR 14106, Mar. 21, 2006]



Sec. 207.171  Component breakout.



Sec. 207.171-1  Scope.

    (a) This section provides policy for breaking out components of end 
items for future acquisitions so that the Government can purchase the 
components directly from the manufacturer or supplier and furnish them 
to the end item

[[Page 38]]

manufacturer as Government-furnished material.
    (b) This section does not apply to--
    (1) The initial decisions on Government-furnished equipment or 
contractor-furnished equipment that are made at the inception of an 
acquisition program; or
    (2) Breakout of parts for replenishment (see Appendix E).

[71 FR 14102, Mar. 21, 2006]



Sec. 207.171-2  Definition.

    Component, as used in this section, includes subsystems, assemblies, 
subassemblies, and other major elements of an end item; it does not 
include elements of relatively small annual acquisition value.

[71 FR 14102, Mar. 21, 2006]



Sec. 207.171-3  Policy.

    DoD policy is to break out components of weapons systems or other 
major end items under certain circumstances.
    (a) When it is anticipated that a prime contract will be awarded 
without adequate price competition, and the prime contractor is expected 
to acquire any component without adequate price competition, the agency 
shall break out that component if--
    (1) Substantial net cost savings probably will be achieved; and
    (2) Breakout action will not jeopardize the quality, reliability, 
performance, or timely delivery of the end item.
    (b) Even when either or both the prime contract and the component 
will be acquired with adequate price competition, the agency shall 
consider breakout of the component if substantial net cost savings will 
result from--
    (1) Greater quantity acquisitions; or
    (2) Such factors as improved logistics support (through reduction in 
varieties of spare parts) and economies in operations and training 
(through standardization of design).
    (c) Breakout normally is not justified for a component that is not 
expected to exceed $1 million for the current year's requirement.

[71 FR 14102, Mar. 21, 2006]



Sec. 207.171-4  Procedures.

    Agencies shall follow the procedures at PGI 207.171-4 for component 
breakout.

[71 FR 14102, Mar. 21, 2006]

                Subpart 207.4_Equipment Lease or Purchase



Sec. 207.401  Acquisition considerations.

    If the equipment will be leased for more than 60 days, the requiring 
activity must prepare and provide the contracting officer with the 
justification supporting the decision to lease or purchase.



Sec. 207.470  Statutory requirements.

    (a) Limitation on contracts with terms of 18 months or more. As 
required by 10 U.S.C. 2401a, the contracting officer shall not enter 
into any contract for any vessel, aircraft, or vehicle, through a lease, 
charter, or similar agreement with a term of 18 months or more, or 
extend or renew any such contract for a term of 18 months or more, 
unless the head of the contracting activity has--
    (1) Considered all costs of such a contract (including estimated 
termination liability); and
    (2) Determined in writing that the contract is in the best interest 
of the Government.
    (b) Leasing of commercial vehicles and associated equipment. Except 
as provided in paragraph (a) of this section, the contracting officer 
may use leasing in the acquisition of commercial vehicles and associated 
equipment whenever the contracting officer determines that leasing of 
such vehicles is practicable and efficient (10 US.C. 2401a).

[61 FR 16879, Apr. 18, 1996, as amended at 61 FR 50451, Sept. 26, 1996]



Sec. 207.471  Funding requirements.

    (a) Fund leases in accordance with DoD Financial Management 
Regulation (FMR) 7000.14-R, Volume 2A, Chapter 1.
    (b) DoD leases are either capital leases or operating leases. See 
FMR 7000.14-R, Volume 4, Chapter 7, Section 070207.

[[Page 39]]

    (c) Use procurement funds for capital leases, as these are 
essentially installment purchases of property.

[64 FR 31732, June 14, 1999, as amended at 66 FR 55121, Nov. 1, 2001; 71 
FR 53045, Sept. 8, 2006]

             Subpart 207.5_Inherently Governmental Functions

    Source: 70 FR 14573, Mar. 23, 2005, unless otherwise noted.



Sec. 207.500  Scope of subpart.

    This subpart also implements 10 U.S.C. 2383.



Sec. 207.503  Policy.

    (S-70) Contracts for acquisition functions.
    (1) In accordance with 10 U.S.C. 2383, the head of an agency may 
enter into a contract for performance of the acquisition functions 
closely associated with inherently governmental functions that are 
listed at FAR 7.503(d) only if--
    (i) The contracting officer determines that appropriate military or 
civilian DoD personnel--
    (A) Cannot reasonably be made available to perform the functions;
    (B) Will oversee contractor performance of the contract; and
    (C) Will perform all inherently governmental functions associated 
with the functions to be performed under the contract; and
    (ii) The contracting officer ensures that the agency addresses any 
potential organizational conflict of interest of the contractor in the 
performance of the functions under the contract (see FAR Subpart 9.5).
    (2) See related information at PGI 207.503(S-70).

[70 FR 14573, Mar. 23, 2005, as amended at 71 FR 14101, Mar. 21, 2006]

     Subpart 207.70_Buy-to-Budget_Additional Quantities of End Items

    Source: 68 FR 43331, July 22, 2003, unless otherwise noted.



Sec. 207.7001  Definition.

    End item, as used in this subpart, means a production product 
assembled, completed, and ready for issue or deployment.



Sec. 207.7002  Authority to acquire additional quantities of end items.

    10 U.S.C. 2308 authorizes DoD to use funds available for the 
acquisition of an end item to acquire a higher quantity of the end item 
than the quantity specified in a law providing for the funding of that 
acquisition, if the head of an agency determines that--
    (a) The agency has an established requirement for the end item that 
is expected to remain substantially unchanged throughout the period of 
the acquisition;
    (b) It is possible to acquire the higher quantity of the end item 
without additional funding because of production efficiencies or other 
cost reductions;
    (c) The amount of funds used for the acquisition of the higher 
quantity of the end item will not exceed the amount provided under that 
law for the acquisition of the end item; and
    (d) The amount provided under that law for the acquisition of the 
end item is sufficient to ensure that each unit of the end item acquired 
within the higher quantity is fully funded as a complete end item.



Sec. 207.7003  Limitation.

    For noncompetitive acquisitions, the acquisition of additional 
quantities is limited to not more than 10 percent of the quantity 
approved in the justification and approval prepared in accordance with 
FAR part 6 for the acquisition of the end item.

           PART 208_REQUIRED SOURCES OF SUPPLIES AND SERVICES

Sec.

Sec. 208.002 Priorities for use of Government supply sources.

                 Subpart 208.4_Federal Supply Schedules


Sec. 208.404 Use of Federal Supply Schedules.

Sec. 208.405-70 Additional ordering procedures.

Sec. 208.406 Ordering activity responsibilities.

Sec. 208.406-1 Order placement.

 Subpart 208.7_Acquisition from the Blind and Other Severely Handicapped


Sec. 208.705 Procedures.

[[Page 40]]

                 Subpart 208.70_Coordinated Acquisition


Sec. 208.7000 Scope of subpart.

Sec. 208.7001 Definitions.

Sec. 208.7002 Assignment authority.

Sec. 208.7002-1 Acquiring department responsibilities.

Sec. 208.7002-2 Requiring department responsibilities.

Sec. 208.7003 Applicability.

Sec. 208.7003-1 Assignments under integrated materiel management (IMM).

Sec. 208.7003-2 Assignments under coordinated acquisition.

Sec. 208.7004 Procedures.

Sec. 208.7005 Military interdepartmental purchase requests.

Sec. 208.7006 Coordinated acquisition assignments.

     Subpart 208.71_Acquisition for National Aeronautics and Space 
                          Administration (NASA)


Sec. 208.7100 Authorization.

Sec. 208.7101 Policy.

Sec. 208.7102 Procedures.

Subpart 208.72 [Reserved]


Sec. 208.7201 Definitions.

Sec. 208.7202 General.

Sec. 208.7203 Authority.

Sec. 208.7204 Procedures.

         Subpart 208.73_Use of Government-Owned Precious Metals


Sec. 208.7301 Definitions.

Sec. 208.7302 Policy.

Sec. 208.7303 Procedures.

Sec. 208.7304 Refined precious metals.

Sec. 208.7305 Contract clause.

              Subpart 208.74_Enterprise Software Agreements


Sec. 208.7400 Scope of subpart.

Sec. 208.7401 Definitions.

Sec. 208.7402 General.

Sec. 208.7403 Acquisition procedures.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36306, July 31, 1991, unless otherwise noted.



Sec. 208.002  Priorities for use of Government supply sources.

    (a)(1)(v) See Subpart 208.70, Coordinated Acquisition, and Subpart 
208.74, Enterprise Software Agreements.

[71 FR 39004, July 11, 2006]

                 Subpart 208.4_Federal Supply Schedules



Sec. 208.404  Use of Federal Supply Schedules.

    (a)(i) Departments and agencies shall comply with the review, 
approval, and reporting requirements established in accordance with 
subpart 217.78 when placing orders for supplies or services in amounts 
exceeding the simplified acquisition threshold.
    (ii) When a schedule lists both foreign and domestic items that will 
meet the needs of the requiring activity, the ordering office must apply 
the procedures of part 225 and FAR part 25, Foreign Acquisition. When 
purchase of an item of foreign origin is specifically required, the 
requiring activity must furnish the ordering office sufficient 
information to permit the determinations required by part 225 and FAR 
part 25 to be made.

[56 FR 36306, July 31, 1991, as amended at 67 FR 65508, Oct. 25, 2002; 
69 FR 63327, Nov. 1, 2004; 70 FR 29642, May 24, 2005; 71 FR 14103, 
14107, Mar. 21, 2006]



Sec. 208.405-70  Additional ordering procedures.

    (a) This subsection--
    (1) Implements Section 803 of the National Defense Authorization Act 
for Fiscal Year 2002 (Pub. L. 107-107) for the acquisition of services, 
and establishes similar policy for the acquisition of supplies;
    (2) Applies to orders for supplies or services under Federal Supply 
Schedules, including orders under blanket purchase agreements 
established under Federal Supply Schedules; and
    (3) Also applies to orders placed by non-DoD agencies on behalf of 
DoD.
    (b) Each order exceeding $100,000 shall be placed on a competitive 
basis in accordance with paragraph (c) of this subsection, unless this 
requirement is waived on the basis of a justification that is prepared 
and approved in accordance with FAR 8.405-6 and includes a written 
determination that--
    (1) A statute expressly authorizes or requires that the purchase be 
made from a specified source; or
    (2) One of the circumstances described at FAR 16.505(b)(2)(i) 
through

[[Page 41]]

(iii) applies to the order. Follow the procedures at PGI 216.505-70 if 
FAR 16.505(b)(2)(ii) or (iii) is deemed to apply.
    (c) An order exceeding $100,000 is placed on a competitive basis 
only if the contracting officer provides a fair notice of the intent to 
make the purchase, including a description of the supplies to be 
delivered or the services to be performed and the basis upon which the 
contracting officer will make the selection, to--
    (1) As many schedule contractors as practicable, consistent with 
market research appropriate to the circumstances, to reasonably ensure 
that offers will be received from at least three contractors that can 
fulfill the requirements, and the contracting officer--
    (i)(A) Receives offers from at least three contractors that can 
fulfill the requirements; or
    (B) Determines in writing that no additional contractors that can 
fulfill the requirements could be identified despite reasonable efforts 
to do so (documentation should clearly explain efforts made to obtain 
offers from at least three contractors); and
    (ii) Ensures all offers received are fairly considered; or
    (2) All contractors offering the required supplies or services under 
the applicable multiple award schedule, and affords all contractors 
responding to the notice a fair opportunity to submit an offer and have 
that offer fairly considered.
    (d) See PGI 208.405-70 for additional information regarding fair 
notice to contractors and requirements relating to the establishment of 
blanket purchase agreements under Federal Supply Schedules.

[71 FR 14107, Mar. 21, 2006]



Sec. Sec.  208.406  Ordering activity responsibilities.



Sec. Sec.  208.406-1  Order placement.

    Follow the procedures at PGI 208.406-1 when ordering from schedules.

[71 FR 14107, Mar. 21, 2006]

 Subpart 208.7_Acquisition From the Blind and Other Severely Handicapped



Sec. 208.705  Procedures.

    Follow the procedures at PGI 208.705 when placing orders with 
central nonprofit agencies.

[71 FR 39004, July 11, 2006]

                 Subpart 208.70_Coordinated Acquisition



Sec. 208.7000  Scope of subpart.

    This subpart prescribes policy and procedures for acquisition of 
items for which contracting responsibility is assigned to one or more of 
the departments/agencies or the General Services Administration. 
Contracting responsibility is assigned through--
    (a) The Coordinated Acquisition Program (commodity assignments are 
listed in PGI 208.7006); or
    (b) The Integrated Materiel Management Program (assignments are in 
DoD 4140.26-M, Defense Integrated Materiel Management Manual for 
Consumable Items).

[56 FR 36306, July 31, 1991, as amended at 67 FR 77936, Dec. 20, 2002; 
71 FR 39004, July 11, 2006]



Sec. 208.7001  Definitions.

    For purposes of this subpart--
    Acquiring department means the department, agency, or General 
Services Administration which has contracting responsibility under the 
Coordinated Acquisition Program.
    Integrated materiel management means assignment of acquisition 
management responsibility to one department, agency, or the General 
Services Administration for all of DoD's requirements for the assigned 
item. Acquisition management normally includes computing requirements, 
funding, budgeting, storing, issuing, cataloging, standardizing, and 
contracting functions.
    Requiring department means the department or agency which has the 
requirement for an item.

[[Page 42]]



Sec. 208.7002  Assignment authority.

    (a) Under the DoD Coordinated Acquisition Program, contracting 
responsibility for certain commodities is assigned to a single 
department, agency, or the General Services Administration (GSA). 
Commodity assignments are made--
    (1) To the departments and agencies, by the Deputy Under Secretary 
of Defense (Logistics);
    (2) To GSA, through agreement with GSA, by the Deputy Under 
Secretary of Defense (Logistics);
    (3) Outside the contiguous United States, by the Unified Commanders; 
and
    (4) For acquisitions to be made in the contiguous United States for 
commodities not assigned under paragraphs (a)(1), (2), or (3) of this 
section, by agreement of agency heads (10 U.S.C. 2311).
    (i) Agreement may be on either a one-time or a continuing basis. The 
submission of a military interdepartmental purchase request (MIPR) by a 
requiring activity and its acceptance by the contracting activity of 
another department, even though based on an oral communication, 
constitutes a one-time agreement.
    (ii) Consider repetitive delegated acquisition responsibilities for 
coordinated acquisition assignment. If not considered suitable for 
coordinated acquisition assignment, formalize continuing agreements and 
distribute them to all activities concerned.
    (b) Under the Integrated Materiel Management Program, assignments 
are made by the Deputy Under Secretary of Defense (Logistics)--
    (1) To the departments and agencies; and
    (2) To GSA, through agreement with GSA.

[56 FR 36306, July 31, 1991, as amended at 64 FR 51075, Sept. 21, 1999; 
70 FR 35544, June 21, 2005]



Sec. 208.7002-1   Acquiring department responsibilities.

    See PGI 208.7002-1 for the acquiring department's responsibilities.

[71 FR 39004, July 11, 2006]



Sec. 208.7002-2   Requiring department responsibilities.

    See PGI 208.7002-2 for the requiring department's responsibilities.

[71 FR 39004, July 11, 2006]



Sec. 208.7003  Applicability.



Sec. 208.7003-1  Assignments under integrated materiel management (IMM).

    (a) Acquire all items assigned for IMM from the IMM manager except--
    (1) Items purchased under circumstances of unusual and compelling 
urgency as defined in FAR 6.302-2. After such a purchase is made, the 
requiring activity must send one copy of the contract and a statement of 
the emergency to the IMM manager;
    (2) Items for which the IMM manager assigns a supply system code for 
local purchase or otherwise grants authority to purchase locally; or
    (3) When purchase by the requiring activity is in the best interest 
of the Government in terms of the combination of quality, timeliness, 
and cost that best meets the requirement. This exception does not apply 
to items--
    (i) Critical to the safe operation of a weapon system;
    (ii) With special security characteristics; or
    (iii) Which are dangerous (e.g., explosives, munitions).
    (b) Follow the procedures at PGI 208.7003-1(b) when an item assigned 
for IMM is to be acquired by the requiring department in accordance with 
paragraph (a)(3) of this subsection.

[60 FR 61593, Nov. 30, 1995, as amended at 64 FR 51075, Sept. 21, 1999; 
64 FR 61031, Nov. 9, 1999; 71 FR 39004, July 11, 2006]



Sec. 208.7003-2  Assignments under coordinated acquisition.

    Requiring departments must submit to the acquiring department all 
contracting requirements for items assigned for coordinated acquisition, 
except--
    (a) Items obtained through the sources in FAR 8.001(a)(1) (i) 
through (vii);
    (b) Items obtained under 208.7003-1(a);
    (c) Requirements not in excess of the simplified acquisition 
threshold in FAR part 2, when contracting by the

[[Page 43]]

requiring department is in the best interest of the Government;
    (d) In an emergency. When an emergency purchase is made, the 
requiring department must send one copy of the contract and a statement 
of the emergency to the contracting activity of the acquiring 
department;
    (e) Requirements for which the acquiring department's contracting 
activity delegates contracting authority to the requiring department;
    (f) Items in a research and development stage (as described in FAR 
part 35). Under this exception, the military departments may contract 
for research and development requirements, including quantities for 
testing purposes and items undergoing in-service evaluation (not yet in 
actual production, but beyond prototype). Generally, this exception 
applies only when research and development funds are used.
    (g) Items peculiar to nuclear ordnance material where design 
characteristics or test-inspection requirements are controlled by the 
Department of Energy (DoE) or by DoD to ensure reliability of nuclear 
weapons.
    (1) This exception applies to all items designed for and peculiar to 
nuclear ordnance regardless of agency control, or to any item which 
requires test or inspection conducted or controlled by DoE or DoD.
    (2) This exception does not cover items used for both nuclear 
ordnance and other purposes if the items are not subject to the special 
testing procedures.
    (h) Items to be acquired under FAR 6.302-6 (national security 
requires limitation of sources);
    (i) Items to be acquired under FAR 6.302-1 (supplies available only 
from the original source for follow-on contract);
    (j) Items directly related to a major system and which are design 
controlled by and acquired from either the system manufacturer or a 
manufacturer of a major subsystem;
    (k) Items subject to rapid design changes, or to continuous redesign 
or modification during the production and/or operational use phases, 
which require continual contact between industry and the requiring 
department to ensure that the item meets the requirements:
    (1) This exception permits the requiring department to contract for 
items of highly unstable design. For use of this exception, it must be 
clearly impractical, both technically and contractually, to refer the 
acquisition to the acquiring department. Anticipation that contracting 
by negotiation will be appropriate, or that a number of design changes 
may occur during contract performance is not in itself sufficient reason 
for using this exception.
    (2) This exception also applies to items requiring compatibility 
testing, provided such testing requires continual contact between 
industry and the requiring department;
    (l) Containers acquired only with items for which they are designed;
    (m) One-time buy of a noncataloged item.
    (1) This exception permits the requiring departments to contract for 
a nonrecurring requirement for a noncataloged item. This exception could 
cover a part or component for a prototype which may be stock numbered at 
a later date.
    (2) This exception does not permit acquisitions of recurring 
requirements for an item, based solely on the fact that the item is not 
stock numbered, nor may it be used to acquire items which have only 
slightly different characteristics than previously cataloged items.

[56 FR 36306, July 31, 1991, as amended at 60 FR 61593, Nov. 30, 1995; 
64 FR 51075, Sept. 21, 1999]



Sec. 208.7004  Procedures.

    Follow the procedures at PGI 208.7004 for processing coordinated 
acquisition requirements.

[71 FR 39005, July 11, 2006]



Sec. 208.7005  Military interdepartmental purchase requests.

    Follow the procedures at--
    (a) PGI 253.208-1 when using DD Form 448, Military Interdepartmental 
Purchase Request; and
    (b) PGI 253.208-2 when using DD Form 448-2, Acceptance of MIPR.

[71 FR 39005, July 11, 2006]

[[Page 44]]



Sec. 208.7006  Coordinated acquisition assignments.

    See PGI 208.7006 for coordinated acquisition assignments.

[71 FR 39005, July 11, 2006]

     Subpart 208.71_Acquisition for National Aeronautics and Space 
                          Administration (NASA)



Sec. 208.7100  Authorization.

    NASA is authorized by Public Law 85-568 to use the acquisition 
services, personnel, equipment, and facilities of DoD departments and 
agencies with their consent, with or without reimbursement, and on a 
similar basis to cooperate with the departments/agencies in the use of 
acquisition services, equipment, and facilities.



Sec. 208.7101  Policy.

    Departments and agencies shall cooperate fully with NASA in making 
acquisition services, equipment, personnel, and facilities available on 
the basis of mutual agreement.

[71 FR 39005, July 11, 2006]



Sec. 208.7102  Procedures.

    Follow the procedures at PGI 208.7102 when contracting or performing 
services for NASA.

[71 FR 39005, July 11, 2006]

Subpart 208.72 [Reserved]

         Subpart 208.73_Use of Government-Owned Precious Metals



Sec. 208.7301  Definitions.

    As used in this subpart--
    Defense Supply Center, Philadelphia (DSCP) means the Defense 
Logistics Agency field activity located at 700 Robbins Avenue, 
Philadelphia, PA 19111-5096, which is the assigned commodity integrated 
material manager for refined precious metals and is responsible for the 
storage and issue of such material.
    Refined precious metal means recovered silver, gold, platinum, 
palladium, iridium, rhodium, or ruthenium, in bullion, granulation or 
sponge form, which has been purified to at least .999 percentage of 
fineness.

[56 FR 36306, July 31, 1991, as amended at 65 FR 14398, Mar. 16, 2000; 
65 FR 52951, Aug. 31, 2000; 65 FR 58607 Sept. 29, 2000; 71 FR 39005, 
July 11, 2006]



Sec. 208.7302  Policy.

    DoD policy is for maximum participation in the Precious Metals 
Recovery Program. DoD components shall furnish recovered precious metals 
contained in the DSCP inventory to production contractors rather than 
use contractor-furnished precious metals whenever the contracting 
officer determines it to be in the Government's best interest.

[56 FR 36306, July 31, 1991, as amended at 65 FR 52951, Aug. 31, 2000; 
71 FR 39005, July 11, 2006]



Sec. 208.7303  Procedures.

    Follow the procedures at PGI 208.7303 for use of the Precious Metals 
Recovery Program.

[71 FR 39005, July 11, 2006]



Sec. 208.7304  Refined precious metals.

    See PGI 208.7304 for a list of refined precious metals managed by 
DSCP.

[71 FR 39005, July 11, 2006]



Sec. 208.7305  Contract clause.

    (a) Use the clause at 252.208-7000, Intent to Furnish Precious 
Metals as Government-Furnished Material, in all solicitations and 
contracts except--
    (1) When the contracting officer has determined that the required 
precious metals are not available from DSCP;
    (2) When the contracting officer knows that the items being acquired 
do not require precious metals in their manufacture; or
    (3) For acquisitions at or below the simplified acquisition 
threshold.
    (b) To make the determination in paragraph (a)(1) of this section, 
the contracting officer shall consult with the end item inventory 
manager and comply with the procedures in Chapter 11, DoD 4160.21-M, 
Defense Materiel Disposition Manual.

[56 FR 36306, July 31, 1991, as amended at 64 FR 2596, Jan. 15, 1999; 65 
FR 14398, Mar. 16, 2000; 65 FR 52952, Aug. 31, 2000]

[[Page 45]]

              Subpart 208.74_Enterprise Software Agreements

    Source: 67 FR 65511, Oct. 25, 2002, unless otherwise noted.



Sec. 208.7400  Scope of subpart.

    This subpart prescribes policy and procedures for acquisition of 
commercial software and software maintenance, including software and 
software maintenance that is acquired--
    (a) As part of a system or system upgrade, where practicable;
    (b) Under a service contract;
    (c) Under a contract or agreement administered by another agency 
(e.g., under an interagency agreement);
    (d) Under a Federal Supply Schedule contract or blanket purchase 
agreement established in accordance with FAR 8.404(b)(4); or
    (e) By a contractor that is authorized to order From a Government 
supply source pursuant to FAR 51.101.



Sec. 208.7401  Definitions.

    As used in this subpart--
    Enterprise software agreement means an agreement or a contract that 
is used to acquire designated commercial software or related services 
such as software maintenance.
    Enterprise Software Initiative means an initiative led by the DoD 
Chief Information Officer to develop processes for DoD-wide software 
asset management.
    Software maintenance means services normally provided by a software 
company as standard services at established catalog or market prices, 
e.g., the right to receive and use upgraded versions of software, 
updates, and revisions.

[67 FR 65511, Oct. 25, 2002, as amended at 71 FR 39005, July 11, 2006]



Sec. 208.7402  General.

    Departments and agencies shall fulfill requirements for commercial 
software and related services, such as software maintenance, in 
accordance with the DoD Enterprise Software Initiative (ESI) (see Web 
site at http://www.don-imit.navy.mil/esi). ESI promotes the use of 
enterprise software agreements (ESAs) with contractors that allow DoD to 
obtain favorable terms and pricing for commercial software and related 
services. ESI does not dictate the products or services to be acquired.



Sec. 208.7403  Acquisition procedures.

    Follow the procedures at PGI 208.7403 when acquiring commercial 
software and related services.

[71 FR 39005, July 11, 2006]

                   PART 209_CONTRACTOR QUALIFICATIONS

            Subpart 209.1_Responsible Prospective Contractors

Sec.

Sec. 209.101 Definitions.

Sec. 209.104 Standards.

Sec. 209.104-1 General standards.

Sec. 209.104-4 Subcontractor responsibility.

Sec. 209.104-70 Solicitation provisions.

Sec. 209.105-1 Obtaining information.

Sec. 209.105-2 Determinations and documentation.

Sec. 209.106 Preaward surveys.

                Subpart 209.2_Qualifications Requirements


Sec. 209.202 Policy.

Sec. 209.270 Aviation critical safety items.

Sec. 209.270-1 Scope.

Sec. 209.270-2 Definitions.

Sec. 209.270-3 Policy.

Sec. 209.270-4 Procedures.

Subpart 209.3 [Reserved]

         Subpart 209.4_Debarment, Suspension, and Ineligibility


Sec. 209.402 Policy.

Sec. 209.403 Definitions.

Sec. 209.405 Effect of listing.

Sec. 209.405-1 Continuation of current contracts.

Sec. 209.405-2 Restrictions on subcontracting.

Sec. 209.406 Debarment.

Sec. 209.406-1 General.

Sec. 209.406-2 Causes for debarment.

Sec. 209.406-3 Procedures.

Sec. 209.407 Suspension.

Sec. 209.407-3 Procedures.

Sec. 209.409 Solicitation provision and contract clause.

Sec. 209.470 Reserve Officer Training Corps and military recruiting on 
          campus.

Sec. 209.470-1 Definition.

Sec. 209.470-2 Policy.

Sec. 209.470-3 Procedures.

Sec. 209.470-4 Contract clause.

Sec. 209.471 Congressional Medal of Honor.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

[[Page 46]]


    Source: 56 FR 36313, July 31, 1991, unless otherwise noted.

            Subpart 209.1_Responsible Prospective Contractors



Sec. 209.101  Definitions.

    ``Entity controlled by a foreign government,'' ``foreign 
government,'' and ``proscribed information,'' are defined in the 
provision at 252.209-7002, Disclosure of Ownership or Control by a 
Foreign Government.

[59 FR 51132, Oct. 7, 1994]



Sec. 209.104  Standards.



Sec. 209.104-1  General standards.

    (e) For cost-reimbursement or incentive type contracts, or contracts 
which provide for progress payments based on costs or on a percentage or 
stage of completion, the prospective contractor's accounting system and 
related internal controls must provide reasonable assurance that--
    (i) Applicable laws and regulations are complied with;
    (ii) The accounting system and cost data are reliable;
    (iii) Risk of misallocations and mischarges are minimized; and
    (iv) Contract allocations and charges are consistent with invoice 
procedures.
    (g)(i) Ownership or control by the government of a terrorist 
country. (A) Under 10 U.S.C. 2327(b), a contracting officer shall not 
award a contract of $100,000 or more to a firm or to a subsidiary of a 
firm when a foreign government--
    (1) Either directly or indirectly, has a significant interest--
    (i) In the firm; or
    (ii) In the subsidiary or the firm that owns the subsidiary; and
    (2) Has been determined by the Secretary of State under 50 U.S.C. 
App. 2405(j)(1)(A) to be a government of a country that has repeatedly 
provided support for acts of international terrorism.
    (B) The Secretary of Defense may waive the prohibition in paragraph 
(g)(i)(A) of this subsection in accordance with 10 U.S.C. 2327(c). This 
waiver authority may not be delegated.
    (ii) Ownership or control by a foreign government when access to 
proscribed information is required to perform the contract. (A) Under 10 
U.S.C. 2536(a), no DoD contract under a national security program may be 
awarded to an entity controlled by a foreign government if that entity 
requires access to proscribed information to perform the contract.
    (B) Whenever the contracting officer has a question about 
application of the provision at 252.209-7002, the contracting officer 
may seek advice from the Director, Defense Security Programs, Office of 
the Assistant Secretary of Defense for Command, Control, Communications 
and Intelligence.
    (C) In accordance with 10 U.S.C. 2536(b)(1)(A), the Secretary of 
Defense may waive the prohibition in paragraph (g)(ii)(A) of this 
subsection upon determining that the waiver is essential to the national 
security interest of the United States. The Secretary has delegated 
authority to grant this waiver to the Assistant Secretary of Defense 
Command, Control, Communications and Intelligence. Waiver requests, 
prepared by the requiring activity in coordination with the contracting 
officer, shall be processed through the Director of Defense Procurement 
and Acquisition Policy, Office of the Under Secretary of Defense 
(Acquisition, Technology, and Logistics), and shall include a proposed 
national interest determination. The proposed national interest 
determination, prepared by the requiring activity in coordination with 
the contracting officer, shall include:
    (1) Identification of the proposed awardee, with a synopsis of its 
foreign ownership (include solicitation and other reference numbers to 
identify the action);
    (2) General description of the acquisition and performance 
requirements;
    (3) Identification of the national security interests involved and 
the ways award of the contract helps advance those interests;
    (4) The availability of another entity with the capacity, capability 
and technical expertise to satisfy defense acquisition, technology base, 
or industrial base requirements; and
    (5) A description of any alternate means available to satisfy the 
requirement, e.g., use of substitute products or technology or alternate 
approaches to accomplish the program objectives.

[[Page 47]]

    (D) In accordance with 10 U.S.C. 2536(b)(1)(B), the Secretary of 
Defense may, in the case of a contract awarded for environmental 
restoration, remediation, or waste management at a DoD facility, waive 
the prohibition in paragraph (g)(ii)(A) of this subsection upon--
    (1) Determining that--
    (i) The waiver will advance the environmental restoration, 
remediation, or waste management objectives of DoD and will not harm the 
national security interests of the United States; and
    (ii) The entity to which the contract is awarded is controlled by a 
foreign government with which the Secretary is authorized to exchange 
Restricted Data under section 144c. of the Atomic Energy Act of 1954 (42 
U.S.C. 2164(c)); and
    (2) Notifying Congress of the decision to grant the waiver. The 
contract may be awarded only after the end of the 45-day period 
beginning on the date the notification is received by the appropriate 
Congressional committees.

[58 FR 28464, May 13, 1993, as amended at 59 FR 51131, 51132, Oct. 7, 
1994; 60 FR 29497, June 5, 1995; 62 FR 34121, June 24, 1997; 63 FR 
11851, Mar. 11, 1998; 63 FR 14837, Mar. 27, 1998; 65 FR 39704, June 27, 
2000; 67 FR 4208, Jan. 29, 2002; 68 FR 7439, Feb. 14, 2003]



Sec. 209.104-4  Subcontractor responsibility.

    Generally, the Canadian Commercial Corporation's (CCC) proposal of a 
firm as its subcontractor is sufficient basis for an affirmative 
determination of responsibility. However, when the CCC determination of 
responsibility is not consistent with other information available to the 
contracting officer, the contracting officer shall request from CCC and 
any other sources whatever additional information is necessary to make 
the responsibility determination.



Sec. 209.104-70  Solicitation provisions.

    (a) Use the provision at 252.209-7001, Disclosure of Ownership or 
Control by the Government of a Terrorist Country, in all solicitations 
expected to result in contracts of $100,000 or more. Any disclosure that 
the government of a terrorist country has a significant interest in an 
offeror or a subsidiary of an offeror shall be forwarded through the 
head of the agency to the Director of Defense Procurement and 
Acquisition Policy, ATTN: OUSD(AT&L)DPAP/(PAIC), 3060 Defense Pentagon, 
Washington, DC 20101-3060.
    (b) Use the provision at 252.209-7002, Disclosure of Ownership or 
Control by a Foreign Government, in all solicitations, including those 
subject to the procedures in FAR part 13, when access to proscribed 
information is necessary to perform a DoD contract under a national 
security program.

[58 FR 28464, May 13, 1993, as amended at 59 FR 51131, Oct. 7, 1994; 62 
FR 34122, June 24, 1997; 63 FR 11851, Mar. 11, 1998; 63 FR 14837, Mar. 
27, 1998; 65 FR 39704, June 27, 2000; 67 FR 4208, Jan. 29, 2002; 68 FR 
7439, Feb. 14, 2003]



Sec. 209.105-1  Obtaining information.

    For guidance on using the Excluded Parties List System, see PGI 
209.105-1.

[71 FR 14100, Mar. 21, 2006]



Sec. Sec.  209.105-2  Determinations and documentation.

    (a) For guidance on submission of determinations to the appropriate 
debarring and suspending official, see PGI 209.105-2(a).

[69 FR 74990, Dec. 15, 2004]



Sec. 209.106  Preaward surveys.

    When requesting a preawared survey, follow the procedures at PGI 
209.106.

[69 FR 65089, Nov. 10, 2004]

                Subpart 209.2_Qualifications Requirements



Sec. 209.202  Policy.

    (a)(1) Except for aviation critical safety items, obtain approval in 
accordance with PGI 209.202(a)(1) when establishing qualification 
requirements. See 209.270 for approval of qualification requirements for 
aviation critical safety items.

[69 FR 65089, Nov. 10, 2004]



Sec. 209.270  Aviation critical safety items.



Sec. 209.270-1  Scope.

    This section--

[[Page 48]]

    (a) Implements Section 802 of the National Defense Authorization Act 
for Fiscal Year 2004 (Public Law 108-136); and
    (b) Prescribes policy and procedures for qualification requirements 
in the procurement of aviation critical safety items and the 
modification, repair, and overhaul of those items.

[69 FR 55988, Sept. 17, 2004]



Sec. 209.270-2  Definitions.

    As used in this section--
    Aviation critical safety item means a part, an assembly, 
installation equipment, launch equipment, recovery equipment, or support 
equipment for an aircraft or aviation weapon system if the part, 
assembly, or equipment contains a characteristic any failure, 
malfunction, or absence of which could cause--
    (1) A catastrophic or critical failure resulting in the loss of or 
serious damage to the aircraft or weapon system;
    (2) An unacceptable risk of personal injury or loss of life; or
    (3) An uncommanded engine shutdown that jeopardizes safety.
    Design control activity means the systems command of a military 
department that is specifically responsible for ensuring the air 
worthiness of an aviation system or equipment in which an aviation 
critical safety item is to be used.

[69 FR 55988, Sept. 17, 2004]



Sec. 209.270-3  Policy.

    (a) The head of the contracting activity responsible for procuring 
an aviation critical safety item may enter into a contract for the 
procurement, modification, repair, or overhaul of such an item only with 
a source approved by the head of the design control activity.
    (b) The approval authorities specified in this section apply instead 
of those otherwise specified in FAR 9.202(a)(1), 9.202(c), or 9.206-
1(c), for the procurement, modification, repair, and overhaul of 
aviation critical safety items.

[69 FR 55988, Sept. 17, 2004, as amended at 70 FR 57190, Sept. 30, 2005]



Sec. 209.270-4  Procedures.

    (a) The head of the design control activity shall--
    (1) Identify items that meet the criteria for designation as 
aviation critical safety items. See additional information at PGI 
209.270-4;
    (2) Approve qualification requirements in accordance with procedures 
established by the design control activity; and
    (3) Qualify and identify aviation critical safety item suppliers and 
products.
    (b) The contracting officer shall--
    (1) Ensure that the head of the design control activity has 
determined that a prospective contractor or its product meets or can 
meet the established qualification standards before the date specified 
for award of the contract;
    (2) Refer any offers received from an unapproved source to the head 
of the design control activity for approval. The head of the design 
control activity will determine whether the offeror or its product meets 
or can meet the established qualification standards before the date 
specified for award of the contract; and
    (3) Refer any requests for qualification to the design control 
activity.
    (c) See 246.407 (S-70) and 246.504 for quality assurance 
requirements.

[69 FR 55988, Sept. 17, 2004, as amended at 70 FR 57190, Sept. 30, 2005]

Subpart 209.3 [Reserved]

         Subpart 209.4_Debarment, Suspension, and Ineligibility



Sec. 209.402  Policy.

    (d) The uniform suspension and debarment procedures to be followed 
by all debarring and suspending officials are set out in appendix H to 
this chapter.
    (e) The department or agency shall provide a copy of the Debarment 
and Suspension Procedures at DFARS appendix H to this chapter to 
contractors at the time of their suspension or when they are proposed 
for debarment, and upon request to other interested parties.

[59 FR 27668, May 27, 1994]

[[Page 49]]



Sec. 209.403  Definitions.

    Debarring and suspending official. (1) For DoD, the designees are--

Army--Commander, U.S. Army Legal Services Agency
Navy--The General Counsel of the Department of the Navy
Air Force--Deputy General Counsel (Contractor Responsibility)
Defense Advanced Research Projects Agency--The Director
Defense Information Systems Agency--The General Counsel
Defense Logistics Agency--The Special Assistant for Contracting 
Integrity
National Imagery and Mapping Agency--The General Counsel
Defense Threat Reduction Agency--The Director
National Security Agency--The Senior Acquisition Executive
Missile Defense Agency--The General Counsel
Overseas installations--as designated by the agency head

    (2) Overseas debarring and suspending officials--
    (i) Are authorized to debar or suspend contractors located within 
the official's geographic area of responsibility under any delegation of 
authority they receive from their agency head.
    (ii) Debar or suspend in accordance with the procedures in FAR 
subpart 9.4 or under modified procedures approved by the agency head 
based on consideration of the laws or customs of the foreign countries 
concerned.
    (iii) In addition to the bases for debarment in FAR 9.406-2, may 
consider the following additional bases--
    (A) The foreign country concerned determines that a contractor has 
engaged in bid-rigging, price-fixing, or other anti-competitive 
behavior; or
    (B) The foreign country concerned declares the contractor to be 
formally debarred, suspended, or otherwise ineligible to contract with 
that foreign government or its instrumentalities.
    (3) The Defense Logistics Agency Special Assistant for Contracting 
Integrity is the exclusive representative of the Secretary of Defense to 
suspend and debar contractors from the purchase of Federal personal 
property under the Federal Property Management Regulations (41 CFR 101-
45.6) and the Defense Materiel Disposition Manual (DoD 4160.21-M).

[56 FR 36313, July 31, 1991, as amended at 56 FR 67212, Dec. 30, 1991; 
59 FR 27669, May 27, 1994; 60 FR 61593, Nov. 30, 1995; 61 FR 50452, 
Sept. 26, 1996; 63 FR 11528, Mar. 9, 1998; 64 FR 51075, Sept. 21, 1999; 
64 FR 62985, Nov. 18, 1999; 68 FR 7439, Feb. 14, 2003; 70 FR 14573, Mar. 
23, 2005]



Sec. 209.405  Effect of listing.

    (a) Under 10 U.S.C. 2393(b), when a department or agency determines 
that a compelling reason exists for it to conduct business with a 
contractor that is debarred or suspended from procurement programs, it 
must provide written notice of the determination to the General Services 
Administration, Office of Acquisition Policy. Examples of compelling 
Reasons are--
    (i) Only a debarred or suspended contractor can provide the supplies 
or services;
    (ii) Urgency requires contracting with a debarred or suspended 
contractor;
    (iii) The contractor and a department or agency have an agreement 
covering the same events that resulted in the debarment or suspension 
and the agreement includes the department or agency decision not to 
debar or suspend the contractor; or
    (iv) The national defense requires continued business dealings with 
the debarred or suspended contractor.
    (b)(i) The Procurement Cause and Treatment Code ``H'' annotation in 
the GSA List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs identifies contractors that are declared 
ineligible for award of a contract or subcontract because of a violation 
of the Clean Air Act (42 U.S.C. 7606) or the Clean Water Act (33 U.S.C. 
1368).
    (ii) Under the authority of 40 CFR 32.215(b), the agency head may 
grant an exception permitting award to a Code ``H'' ineligible 
contractor if it is in the paramount interest of the United States.
    (A) The agency head may delegate this exception authority to a level 
no lower than a general or flag officer or a member of the Senior 
Executive Service.

[[Page 50]]

    (B) The official granting the exception must provide written notice 
to the Environmental Protection Agency debarring official.

[65 FR 52955, Aug. 31, 2000]



Sec. 209.405-1  Continuation of current contracts.

    (b) Unless the agency head makes a written determination that a 
compelling reason exists to do so, ordering activities shall not--
    (i) Place orders exceeding the guaranteed minimum under indefinite 
quantity contracts: or
    (ii) When the agency is an optional user, place orders against 
Federal Supply Schedule contracts.
    (c) This includes exercise of options.

[60 FR 29497, June 5, 1995, as amended at 60 FR 61593, Nov. 30, 1995]



Sec. 209.405-2  Restrictions on subcontracting.

    (a) The contracting officer shall not consent to any subcontract 
with a firm, or a subsidiary of a firm, that is identified by the 
Secretary of Defense as being owned or controlled by the government of a 
terrorist country unless the agency head states in writing the 
compelling reasons for the subcontract.

[63 FR 14837, Mar. 27, 1998]



Sec. 209.406  Debarment.



Sec. 209.406-1  General.

    (a)(i) When the debarring official decides that debarment is not 
necessary, the official may require the contractor to enter into a 
written agreement which includes--
    (A) A requirement for the contractor to establish, if not already 
established, and to maintain the standards of conduct and internal 
control systems prescribed by subpart 203.70; and
    (B) Other requirements the debarring official considers appropriate.
    (ii) Before the debarring official decides not to suspend or debar 
in the case of an indictment or conviction for a felony, the debarring 
official must determine that the contractor has addressed adequately the 
circumstances that gave rise to the misconduct, and that appropriate 
standards of ethics and integrity are in place and are working.

[57 FR 14992, Apr. 23, 1992]



Sec. 209.406-2  Causes for debarment.

    (a) Any person shall be considered for debarment if criminally 
convicted of intentionally affixing a label bearing a ``Made in 
America'' inscription to any product sold in or shipped to the United 
States or its outlying areas that was not made in the United States or 
its outlying areas (10 U.S.C. 2410f).
    (i) The debarring official will make a determination concerning 
debarment not later than 90 days after determining that a person has 
been so convicted.
    (ii) In cases where the debarring official decides not to debar, the 
debarring official will report that decision to the Director of Defense 
Procurement and Acquisition Policy who will notify Congress within 30 
days after the decision is made.

[58 FR 28464, May 13, 1993, as amended at 68 FR 7439, Feb. 14, 2003; 70 
FR 35544, June 21, 2005]



Sec. Sec.  209.406-3  Procedures.

    Refer all matters appropriate for consideration by an agency 
debarring and suspending official as soon as practicable to the 
appropriate debarring and suspending official identified in 209.403. Any 
person may refer a matter to the debarring and suspending official. 
Follow the procedures at PGI 209.406-3.

[69 FR 74990, Dec. 15, 2004]



Sec. 209.407  Suspension.



Sec. Sec.  209.407-3  Procedures.

    Refer all matters appropriate for consideration by an agency 
debarring and suspending official as soon as practicable to the 
appropriate debarring and suspending official identified in 209.403. Any 
person may refer a matter to the debarring and suspending official. 
Follow the procedures at PGI 209.407-3.

[69 FR 74990, Dec. 15, 2004]

[[Page 51]]



Sec. 209.409  Solicitation provision and contract clause.

    Use the clause at 252.209-7004, Subcontracting with Firms That Are 
Owned or Controlled by the Government of a Terrorist Country, in 
solicitations and contracts with a value of $100,000 or more.

[63 FR 14837, Mar. 27, 1998]



Sec. 209.470  Reserve Officer Training Corps and military recruiting on 
          campus.



Sec. 209.470-1  Definition.

    Institution of higher education, as used in this section, means an 
institution that meets the requirements of 20 U.S.C. 1001 and includes 
all subelements of such an institution.

[65 FR 2056, Jan. 13, 2000]



Sec. 209.470-2  Policy.

    (a) Except as provided in paragraph (b) of this subsection, 10 
U.S.C. 983 prohibits DoD from providing funds by contract or grant to an 
institution of higher education if the Secretary of Defense determines 
that the institution has a policy or practice that prohibits or in 
effect prevents--
    (1) The Secretary of a military department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officer Training 
Corps (ROTC) at that institution;
    (2) A student at that institution from enrolling in a unit of the 
senior ROTC at another institution of higher education;
    (3) The Secretary of a military department or the Secretary of 
Transportation from gaining entry to campuses, or access to students on 
campuses, for purposes of military recruiting; or
    (4) Military recruiters from accessing certain information 
pertaining to students enrolled at that institution.
    (b) The prohibition in paragraph (a) of this subsection does not 
apply to an institution of higher education if the Secretary of Defense 
determines that--
    (1) The institution has ceased the policy or practice described in 
paragraph (a) of this subsection; or
    (2) The institution has a long-standing policy of pacifism based on 
historical religious affiliation.

[65 FR 2056, Jan. 13, 2000]



Sec. 209.470-3  Procedures.

    If the Secretary of Defense determines that an institution of higher 
education is ineligible to receive DoD funds because of a policy or 
practice described in 209.470-2(a)--
    (a) The Secretary of Defense will list the institution on the List 
of Parties Excluded from Federal Procurement and Nonprocurement Programs 
published by General Services Administration (also see FAR 9.404 and 32 
CFR part 216); and
    (b) DoD components--
    (1) Shall not solicit offers from, award contracts to, or consent to 
subcontracts with the institution;
    (2) Shall make no further payments under existing contracts with the 
institution; and
    (3) Shall terminate existing contracts with the institution.

[65 FR 2057, Jan. 13, 2000, as amended at 67 FR 49254, July 30, 2002]



Sec. 209.470-4  Contract clause.

    Use the clause at 252.209-7005, Reserve Officer Training Corps and 
Military Recruiting on Campus, in all solicitations and contracts with 
institutions of higher education.

[65 FR 2057, Jan. 13, 2000]



Sec. 209.471  Congressional Medal of Honor.

    In accordance with Section 8118 of Pub. L. 105-262, do not award a 
contract to, extend a contract with, or approve the award of a 
subcontract to any entity that, within the preceding 15 years, has been 
convicted under 18 U.S.C. 704 of the unlawful manufacture or sale of the 
Congressional Medal of Honor. Any entity so convicted will be listed as 
ineligible on the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs published by the General Services 
Administration.

[64 FR 31733, June 14, 1999]

[[Page 52]]

                        PART 210_MARKET RESEARCH

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.



Sec. 210.001  Policy.

    (a) In addition to the requirements of FAR 10.001(a), agencies 
shall--
    (i) Conduct market research appropriate to the circumstances 
before--
    (A) Soliciting offers for acquisitions that could lead to a 
consolidation of contract requirements as defined in 207.170-2; or
    (B) Issuing a solicitation with tiered evaluation of offers (Section 
816 of Public Law 109-163); and
    (ii) Use the results of market research to determine--
    (A) Whether consolidation of contract requirements is necessary and 
justified in accordance with Sec.  207.170-3; or
    (B) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business or, for a task or delivery order, 
whether there are a sufficient number of qualified small business 
concerns available to justify limiting competition under the terms of 
the contract. If the contracting officer cannot determine whether the 
criteria are met, the contracting officer shall include a written 
explanation in the contract file as to why such a determination could 
not be made (Section 816 of Public Law 109-163).

[71 FR 53043, Sept. 8, 2006]

                    PART 211_DESCRIBING AGENCY NEEDS

Sec.

Sec. 211.002 Policy.

Sec. 211.002-70 Contract clause.

      Subpart 211.1_Selecting and Developing Requirements Documents


Sec. 211.105 Items peculiar to one manufacturer.

Sec. 211.107 Solicitation provision.

       Subpart 211.2_Using and Maintaining Requirements Documents


Sec. 211.201 Identification and availability of specifications.

Sec. 211.204 Solicitation provisions and contract clauses.

Sec. 211.270 [Reserved]

Sec. 211.271 Elimination of use of class I ozone-depleting substances.

Sec. 211.272 Alternate preservation, packaging, and packing.

Sec. 211.273 Substitutions for military or Federal specifications and 
          standards.

Sec. 211.273-1 Definition.

Sec. 211.273-2 Policy.

Sec. 211.273-3 Procedures.

Sec. 211.273-4 Contract clause.

Sec. 211.274 Item identifiation and valuation.

Sec. 211.274-1 General.

Sec. 211.274-2 Policy for unique item identification.

Sec. 211.274-3 Policy for valuation.

Sec. 211.274-4 Contract clause.

Sec. 211.275 Radio frequency identification.

Sec. 211.275-1 Definitions.

Sec. 211.275-2 Policy.

Sec. 211.275-3 Contract clause.

                    Subpart 211.5_Liquidated Damages


Sec. 211.503 Contract clauses.

                Subpart 211.6_Priorities and Allocations


Sec. 211.602 General.

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

    Source: 60 FR 61594, Nov. 30, 1995, unless otherwise noted.



Sec. 211.002  Policy.

    All defense technology and acquisition programs in DoD are subject 
to the policies and procedures in DoDD 5000.1, The Defense Acquisition 
System, and DoDI 5000.2, Operation of the Defense Acquisition System.

[71 FR 27641, May 12, 2006]



Sec. 211.002-70  Contract clause.

    Use the clause at 252.211-7000, Acquisition Streamlining, in all

      Subpart 211.1_Selecting and Developing Requirements Documents



Sec. 211.105  Items peculiar to one manufacturer.

    Follow the publication requirements at PGI 211.105.

[70 FR 23804, May 5, 2005]



Sec. 211.107  Solicitation provision.

    (b) DoD uses the categorical method of reporting. Do not use the 
provision

[[Page 53]]

at FAR 52.211-7, Alternatives to Government-Unique Standards, in DoD 
solicitations.

[65 FR 6553, Feb. 10, 2000]

       Subpart 211.2_Using and Maintaining Requirements Documents



Sec. 211.201  Identification and availability of specifications.

    Follow the procedures at PGI 211.201 for use of specifications, 
standards, and data item descriptions.

[71 FR 27641, May 12, 2006]



Sec. 211.204  Solicitation provisions and contract clauses.

    (c) When contract performance requires use of specifications, 
standards, and data item descriptions that are not listed in the 
Acquisition Streamlining and Standardization Information System 
database, use provisions, as appropriate, substantially the same as 
those at--
    (i) 252.211-7001, Availability of Specifications, Standards, and 
Data Item Descriptions Not Listed in the Acquisition Streamlining and 
Standardization Information System (ASSIST), and Plans, Drawings, and 
Other Pertinent Documents; and
    (ii) 252.211-7002, Availability for Examination of Specifications, 
Standards, Plans, Drawings, Data Item Descriptions, and Other Pertinent 
Documents.

[71 FR 27641, May 12, 2006]



Sec. 211.270  [Reserved]



Sec. 211.271  Elimination of use of class I ozone-depleting substances.

    See subpart 223.8 for restrictions on contracting for ozone-
depleting substances.

[70 FR 73150, Dec. 9, 2005]



Sec. 211.272  Alternate preservation, packaging, and packing.

    Use the provision at 252.211-7004, Alternate Preservation, 
Packaging, and Packing, in solicitations which include military 
preservation, packaging, or packing specifications when it is feasible 
to evaluate and award using commercial or industrial preservation, 
packaging, or packing.



Sec. 211.273  Substitutions for military or Federal specifications and 
          standards.



Sec. 211.273-1  Definition.

    SPI process, as used in this section, is defined in the clause at 
252.211-7005, Substitutions for Military or Federal Specifications and 
Standards.

[62 FR 44224, Aug. 20, 1997]



Sec. 211.273-2  Policy.

    (a) Under the Single Process Initiative (SPI), DoD accepts SPI 
processes in lieu of specific military or Federal specifications or 
standards that specify a management or manufacturing process.
    (b) DoD acceptance of an SPI process follows the decision of a 
Management Council, which includes representatives of the contractor, 
the Defense Contract Management Agency, the Defense Contract Audit 
Agency, and the military departments.
    (c) In procurements of previously developed items, SPI processes 
that previously were accepted by the Management Council shall be 
considered valid replacements for military or Federal specifications or 
standards, absent a specific determination to the contrary.

[62 FR 44224, Aug. 20, 1997, as amended at 64 FR 14399, Mar. 25, 1999; 
65 FR 52952, Aug. 31, 2000; 71 FR 27641, May 12, 2006]



Sec. 211.273-3  Procedures.

    Follow the procedures at PGI 211.273-3 for encouraging the use of 
SPI processes instead of military or Federal specifications and 
standards.

[71 FR 27641, May 12, 2006]



Sec. 211.273-4  Contract clause.

    Use the clause at 252.211-7005, Substitutions for Military or 
Federal Specifications and Standards, in solicitations and contracts 
exceeding the micro-purchase threshold, when procuring previously 
developed items.

[62 FR 44224, Aug. 20, 1997]

[[Page 54]]



Sec. 211.274  Item identification and valuation.



Sec. 211.274-1  General.

    Unique item identification and valuation is a system of marking and 
valuing items delivered to DoD that will enhance logistics, contracting, 
and financial business transactions supporting the United States and 
coalition troops. Through unique item identification policy, which 
capitalizes on leading practices and embraces open standards, DoD can--
    (a) Achieve lower life-cycle cost of item management and improve 
life-cycle property management;
    (b) Improve operational readiness;
    (c) Provide reliable accountability of property and asset visibility 
throughout the life cycle; and
    (d) Reduce the burden on the workforce through increased 
productivity and efficiency.

[70 FR 20836, Apr. 22, 2005]



Sec. 211.274-2  Policy for unique item identification.

    (a) It is DoD policy that DoD unique item identification, or a DoD 
recognized unique identification equivalent, is required for-
    (1) All delivered items for which the Government's unit acquisition 
cost is $5,000 or more;
    (2) Items for which the Government's unit acquisition cost is less 
than $5,000, when identified by the requiring activity as serially 
managed, mission essential, or controlled inventory;
    (3) Items for which the Government's unit acquisition cost is less 
than $5,000, when the requiring activity determines that permanent 
identification is required; and
    (4) Regardless of value--
    (i) Any DoD serially managed subassembly, component, or part 
embedded within a delivered item; and
    (ii) The parent item (as defined in 252.211-7003(a)) that contains 
the embedded subassembly, component, or part.
    (b) Exceptions. The Contractor will not be required to provide DoD 
unique item identification if--
    (1) The items, as determined by the head of the agency, are to be 
used to support a contingency operation or to facilitate defense against 
or recovery from nuclear, biological, chemical, or radiological attack; 
or
    (2) A determination and findings has been executed concluding that 
it is more cost effective for the Government requiring activity to 
assign, mark, and register the unique item identification after delivery 
of an item acquired from a small business concern or a commercial item 
acquired under FAR Part 12 or Part 8.
    (i) The determination and findings shall be executed by--
    (A) The Component Acquisition Executive for an acquisition category 
(ACAT) I program; or
    (B) The head of the contracting activity for all other programs.
    (ii) The DoD Unique Item Identification Program Office must receive 
a copy of the determination and findings required by paragraph (b)(2)(i) 
of this subsection. Send the copy to DPAP, SPEC ASST, 3060 Defense 
Pentagon, 3E1044, Washington, DC 20301-3060; or by facsimile to (703) 
695-7596.

[70 FR 20836, Apr. 22, 2005]



Sec. 211.274-3  Policy for valuation.

    (a) It is DoD policy that contractors shall be required to identify 
the Government's unit acquisition cost (as defined in 252.211-7003(a)) 
for all items delivered, even if none of the criteria for placing a 
unique item identification mark applies.
    (b) The Government's unit acquisition cost is--
    (1) For fixed-price type line, subline, or exhibit line items, the 
unit price identified in the contract at the time of delivery;
    (2) For cost-type or undefinitized line, subline, or exhibit line 
items, the contractor's estimated fully burdened unit cost to the 
Government at the time of delivery; and
    (3) For items delivered under a time-and-materials contract, the 
contractor's estimated fully burdened unit cost to the Government at the 
time of delivery.
    (c) The Government's unit acquisition cost of subassemblies, 
components, and parts embedded in delivered items need not be separately 
identified.

[70 FR 20836, Apr. 22, 2005]

[[Page 55]]



Sec. 211.274-4  Contract clause.

    Use the clause at 252.211-7003, Item Identification and Valuation, 
in solicitations and contracts that require item identification or 
valuation, or both, in accordance with 211.274-2 and 211.274-3.
    (a) Complete paragraph (c)(1)(ii) of the clause with the contract 
line, subline, or exhibit line item number and description of any 
item(s) below $5,000 in unit acquisition cost for which DoD unique item 
identification or a DoD recognized unique identification equivalent is 
required in accordance with 211.274-2(a)(2) or (3).
    (b) Complete paragraph (c)(1)(iii) of the clause with the applicable 
attachment number, when DoD unique item identification or a DoD 
recognized unique identification equivalent is required in accordance 
with 211.274-2(a)(4) for DoD serially managed subassemblies, components, 
or parts embedded within deliverable items.
    (c) Use the clause with its Alternate I if--
    (1) An exception in 211.274-2(b) applies; or
    (2) Items are to be delivered to the Government and none of the 
criteria for placing a unique item identification mark applies.

[70 FR 20836, Apr. 22, 2005]



Sec. 211.275  Radio frequency identification.



Sec. 211.275-1  Definitions.

    Bulk commodities, case, palletized unit load, passive RFID tag, and 
radio frequency identification are defined in the clause at 252.211-
7006, Radio Frequency Identification.

[70 FR 53968, Sept. 13, 2005]



Sec. 211.275-2  Policy.

    Radio frequency identification (RFID), in the form of a passive RFID 
tag, is required for individual cases and palletized unit loads that--
    (a) Contain items in any of the following classes of supply, as 
defined in DoD 4140.1-R, DoD Supply Chain Materiel Management 
Regulation, AP1.1.11, except that bulk commodities are excluded from 
this requirement:
    (1) Subclass of Class I--Packaged operational rations.
    (2) Class II--Clothing, individual equipment, tentage, 
organizational tool kits, hand tools, and administrative and 
housekeeping supplies and equipment.
    (3) Class IIIP--Packaged petroleum, lubricants, oils, preservatives, 
chemicals, and additives.
    (4) Class IV--Construction and barrier materials.
    (5) Class VI--Personal demand items (non-military sales items).
    (6) Subclass of Class VIII--Medical materials (excluding 
pharmaceuticals, biologicals, and reagents).
    (7) Class IX--Repair parts and components including kits, assemblies 
and subassemblies, reparable and consumable items required for 
maintenance support of all equipment, excluding medical-peculiar repair 
parts; and
    (b) Will be shipped to one of the following locations:
    (1) Defense Distribution Depot, Susquehanna, PA: DoDAAC W25G1U or 
SW3124.
    (2) Defense Distribution Depot, San Joaquin, CA: DoDAAC W62G2T or 
SW3224.
    (3) Defense Distribution Depot, Albany, GA: DoDAAC SW3121.
    (4) Defense Distribution Depot, Anniston, AL: DoDAAC W31G1Z or 
SW3120.
    (5) Defense Distribution Depot, Barstow, CA: DoDAAC SW3215.
    (6) Defense Distribution Depot, Cherry Point, NC: DoDAAC SW3113.
    (7) Defense Distribution Depot, Columbus, OH: DoDAAC SW0700.
    (8) Defense Distribution Depot, Corpus Christi, TX: DoDAAC W45H08 or 
SW3222.
    (9) Defense Distribution Depot, Hill, UT: DoDAAC SW3210.
    (10) Defense Distribution Depot, Jacksonville, FL: DoDAAC SW3122.
    (11) Defense Distribution Depot, Oklahoma City, OK: DoDAAC SW3211.
    (12) Defense Distribution Depot, Norfolk, VA: DoDAAC SW3117.
    (13) Defense Distribution Depot, Puget Sound, WA: DoDAAC SW3216.
    (14) Defense Distribution Depot, Red River, TX: DoDAAC W45G19 or 
SW3227.
    (15) Defense Distribution Depot, Richmond, VA: DoDAAC SW0400.
    (16) Defense Distribution Depot, San Diego, CA: DoDAAC SW3218.

[[Page 56]]

    (17) Defense Distribution Depot, Tobyhanna, PA: DoDAAC W25G1W or 
SW3114.
    (18) Defense Distribution Depot, Warner Robins, GA: DoDAAC SW3119.
    (19) Air Mobility Command Terminal, Charleston Air Force Base, 
Charleston, SC: Air Terminal Identifier Code CHS.
    (20) Air Mobility Command Terminal, Naval Air Station, Norfolk, VA: 
Air Terminal Identifier Code NGU.
    (21) Air Mobility Command Terminal, Travis Air Force Base, 
Fairfield, CA: Air Terminal Identifier Code SUU.

[71 FR 29086, May 19, 2006]



Sec. 211.275-3  Contract clause.

    Use the clause at 252.211-7006, Radio Frequency Identification, in 
solicitations and contracts that will require shipment of items meeting 
the criteria at 211.275-2.

[70 FR 53968, Sept. 13, 2005]

                    Subpart 211.5_Liquidated Damages



Sec. 211.503  Contract clauses.

    (b) Use the clause at FAR 52.211-12, Liquidated Damages--
Construction, in all construction contracts exceeding $500,000, except 
cost-plus-fixed-fee contracts or contracts where the contractor cannot 
control the pace of the work. Use of the clause in contracts of $500,000 
or less is optional.

[60 FR 61594, Nov. 30, 1995. Redesignated at 66 FR 49861, Oct. 1, 2001]

                Subpart 211.6_Priorities and Allocations



Sec. 211.602  General.

    DoD implementation of the Defense Priorities and Allocations System 
is in DoDD 4400.1, Defense Production Act Programs.

[64 FR 51075, Sept. 21, 1999]

                PART 212_ACQUISITION OF COMMERCIAL ITEMS

  Subpart 212.2_Special Requirements for the Acquisition of Commercial 
                                  Items

Sec.

Sec. 212.211 Technical data.

Sec. 212.212 Computer software.

   Subpart 212.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items


Sec. 212.301 Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

Sec. 212.302 Tailoring of provisions and clauses for the acquisition of 
          commercial items.

   Subpart 212.5_Applicability of Certain Laws to the Acquisition of 
                            Commercial Items


Sec. 212.503 Applicability of certain laws to Executive agency contracts 
          for the acquisition of commercial items.

Sec. 212.504 Applicability of certain laws to subcontracts for the 
          acquisition of commercial items.

Subpart 212.6_Streamlined Procedures for Evaluation and Solicitation for 
                            Commercial Items


Sec. 212.602 Streamlined evaluation of offers.

  Subpart 212.70_Pilot Program for Transition to Follow-On Contracting 
                After Use of Other Transaction Authority


Sec. 212.7000 Scope.

Sec. 212.7001 Definitions.

Sec. 212.7002 Pilot program.

Sec. 212.7002-1 Contracts under the program.

Sec. 212.7002-2 Subcontracts under the program.

Sec. 212.7003 Technical data and computer software.

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

    Source: 60 FR 61595, Nov. 30, 1995, unless otherwise noted.

  Subpart 212.2_Special Requirements for the Acquisition of Commercial 
                                  Items



Sec. 212.211  Technical data.

    The DoD policy for acquiring technical data for commercial items is 
at 227.7102.



Sec. 212.212  Computer software.

    The DoD policy for acquiring commercial computer software is at 
227.7202.

[69 FR 63330, Nov. 1, 2004]

[[Page 57]]

   Subpart 212.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



Sec. 212.301  Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

    (f)(i) Use one of the following provisions as prescribed in part 
225:
    (A) 252.225-7000, Buy American Act--Balance of Payments Program 
Certificate.
    (B) 252.225-7020, Trade Agreements Certificate.
    (C) 252.225-7035, Buy American Act--Free Trade Agreements--Balance 
of Payments Program Certificate.
    (ii) Use the provision at 252.212-7000, Offeror Representations and 
Certifications--Commercial Items, in all solicitations for commercial 
items exceeding the simplified acquisition threshold. If an exception to 
10 U.S.C. 2410i applies to a solicitation exceeding the simplified 
acquisition threshold (see 225.7603), indicate on an addendum that ``The 
certification in paragraph (b) of the provision at 252.212-7000 does not 
apply to this solicitation.''
    (iii) Use the clause at 252.212-7001, Contract Terms and Conditions 
Required to Implement Statutes or Executive Orders Applicable to Defense 
Acquisitions of Commercial Items, in all solicitations and contracts for 
commercial items, completing paragraphs (a) and (b), as appropriate.
    (iv) Use the provision at 252.209-7001, Disclosure of Ownership or 
Control by the Government of a Terrorist Country, as prescribed in 
209.104-70(a).
    (v) Use the clause at 252.232-7009, Mandatory Payment by 
Governmentwide Commercial Purchase Card, as prescribed in 232.1110.
    (vi) Use the clause at 252.211-7003, Item Identification, as 
prescribed at 211.274-4.
    (vii) Use the clause at 252.225-7040, Contractor Personnel 
Authorized to Accompany U.S. Armed Forces Deployed Outside the United 
States, as prescribed in 225.7402-4.
    (viii) Use the clause at 252.225-7043, Antiterrorism/Force 
Protection Policy for Defense Contractors Outside the United States, in 
solicitations and contracts that include the clause at 252.225-7040.
    (ix) Use the clause at 252.211-7006, Radio Frequency Identification, 
as prescribed in 211.275-3.

[60 FR 61595, Nov. 30, 1995, as amended at 61 FR 50452, Sept. 26, 1996; 
62 FR 34122, June 24, 1997; 63 FR 11528, Mar. 9, 1998; 63 FR 15317, Mar. 
31, 1998; 64 FR 8728, Feb. 23, 1999; 64 FR 43101, Aug. 9, 1999; 65 FR 
46625, July 31, 2000; 66 FR 49861, Oct. 1, 2001; 66 FR 55122, 55123, 
Nov. 1, 2001; 68 FR 7439, Feb. 14, 2003; 68 FR 15618, Mar. 31, 2003; 68 
FR 58633, Oct. 10, 2003; 68 FR 75200, Dec. 30, 2003; 68 FR 64558, Nov. 
14, 2003; 69 FR 1927, Jan. 13, 2004; 70 FR 20836, Apr. 22, 2005; 70 FR 
23801, May 5, 2005; 70 FR 53968, Sept. 13, 2005; 71 FR 9269, Feb. 23, 
2006; 71 FR 34828, June 16, 2006; 71 FR 39006, July 11, 2006]



Sec. 212.302  Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    (c) Tailoring inconsistent with customary commercial practice. The 
head of the contracting activity is the approval authority within the 
DoD for waivers under FAR 12.302(c).

   Subpart 212.5_Applicability of Certain Laws to the Acquisition of 
                            Commercial Items



Sec. 212.503  Applicability of certain laws to Executive agency 
          contracts for the acquisition of commercial items.

    (a) The following laws are not applicable to contracts for the 
acquisition of commercial items:
    (i) Section 806, Public Law 102-190 (10 U.S.C. 2301 (repealed) 
note), Payment Protections for Subcontractors and Suppliers.
    (ii) 10 U.S.C. 2306(b), Prohibition on Contingent Fees.
    (iii) 10 U.S.C. 2324, Allowable Costs Under Defense Contracts.
    (iv) 10 U.S.C. 2384(b), Requirement to Identify Suppliers.
    (v) 10 U.S.C. 2397(a)(1), Reports by Employees or Former Employees 
of Defense Contractors.
    (vi) 10 U.S.C. 2397b(f), Limits on Employment for Former DoD 
Officials.
    (vii) 10 U.S.C. 2397c, Defense Contractor Requirements Concerning 
Former DoD Officials.
    (viii) 10 U.S.C. 2408(a), Prohibition on Persons Convicted of 
Defense Related Felonies.

[[Page 58]]

    (ix) 10 U.S.C. 2410b, Contractor Inventory Accounting System 
Standards (see 252.242-7004).
    (x) 107 Stat 1720 (Section 843(a), Public Law 103-160), Reporting 
Requirement Regarding Dealings with Terrorist Countries.
    (xi) Domestic Content Restrictions in the National Defense 
Appropriations Acts for Fiscal Years 1996 and Subsequent Years, unless 
the restriction specifically applies to commercial items. For the 
restriction that specifically applies to commercial ball or roller 
bearings as end items, see 225.7019-2(b) (Section 8064 of Public Law 
106-259).
    (c) The applicability of the following laws has been modified in 
regard to contracts for the acquisition of commercial items:
    (i) 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct 
Sales to the United States (see FAR 3.503 and 52.203-6).
    (ii) 10 U.S.C. 2306a, Truth in Negotiations Act (see FAR 15.403-
1(b)(3)).

[60 FR 61595, Nov. 30, 1995, as amended at 63 FR 11851, Mar. 11, 1998; 
63 FR 55040, Oct. 14, 1998; 65 FR 77828, Dec. 13, 2000; 67 FR 4208, Jan. 
29, 2002; 69 FR 65089, Nov. 10, 2004]



Sec. 212.504  Applicability of certain laws to subcontracts for the 
          acquisition of commercial items.

    (a) The following laws are not applicable to subcontracts at any 
tier for the acquisition of commercial items or commercial components:
    (i) [Reserved]
    (ii) Section 806, Public Law 102-190 (10 U.S.C. 2301 (repealed) 
note), Payment Protections for Subcontractors and Suppliers.
    (iii) 10 U.S.C. 2306(b) Prohibition on Contingent Fees.
    (iv) 10 U.S.C. 2313(c), Examination of Records of a Contractor.
    (v) 10 U.S.C. 2320, Rights in Technical Data.
    (vi) 10 U.S.C. 2321, Validation of Proprietary Data Restrictions.
    (vii) 10 U.S.C. 2324, Allowable Costs Under Defense Contracts.
    (viii) 10 U.S.C. 2327, Reporting Requirement Regarding Dealings with 
Terrorist Countries.
    (ix) 10 U.S.C. 2384(b), Requirement to Identify Suppliers.
    (x) 10 U.S.C. 2391 note, Notification of Substantial Impact on 
Employment.
    (xi) 10 U.S.C. 2393, Prohibition Against Doing Business with Certain 
Offerors or Contractors.
    (xii) 10 U.S.C. 2397(a)(1), Reports by Employees or Former Employees 
of Defense Contractors.
    (xiii) 10 U.S.C. 2397b(f), Limits on Employment for Former DoD 
Officials.
    (xiv) 10 U.S.C. 2397c, Defense Contractor Requirements Concerning 
Former DoD Officials.
    (xv) 10 U.S.C. 2408(a) Prohibition on Persons Convicted of Defense 
Related Felonies.
    (xvi) 10 U.S.C. 2410b, Contractor Inventory Accounting System 
Standards.
    (xvii) 10 U.S.C. 2501 note, Notification of Proposed Program 
Termination.
    (xviii) 10 U.S.C. 2534, Miscellaneous Limitations on the Procurement 
of Goods Other Than United States Goods.
    (xix)-(xxi) [Reserved]
    (xxii) 10 U.S.C. 2631, Transportation of Supplies by Sea (except as 
provided in the clause at 252.247-7023, Transportation of Supplies by 
Sea).
    (xxiii) Domestic Content Restrictions in the National Defense 
Appropriations Acts for Fiscal Years 1996 and Subsequent Years, unless 
the restriction specifically applies to commercial items. For the 
restriction that specifically applies to commercial ball or roller 
bearings as end items, see 225.7009-2(b) (Section 8064 of Public Law 
106-259).
    (b) Certain requirements of the following laws have been eliminated 
for subcontracts at any tier for the acquisition of commercial items or 
commercial components:
    (i) 10 U.S.C. 2393(d), Subcontractor Reports Under Prohibition 
Against Doing Business with Certain Offerors (see FAR 52.209-6).
    (ii) 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct 
Sales to the United States (see FAR 3.503 and 52.203-6).

[60 FR 61595, Nov. 30, 1995, as amended at 61 FR 58488, Nov. 15, 1996; 
62 FR 5780, Feb. 7, 1997; 65 FR 14401, Mar. 16, 2000; 65 FR 39704, June 
27, 2000; 65 FR 77828, Dec. 13, 2000; 69 FR 63331, Nov. 1, 2004]

[[Page 59]]

Subpart 212.6_Streamlined Procedures for Evaluation and Solicitation for 
                            Commercial Items



Sec. 212.602  Streamlined evaluation of offers.

    (b)(i) For the acquisition of transportation and transportation-
related services, also consider evaluating offers in accordance with the 
criteria at 247.206(1).
    (ii) For the acquisition of transportation in supply contracts that 
will include a significant requirement for transportation of items 
outside the contiguous United States, also evaluate offers in accordance 
with the criterion at 247.301-71.
    (iii) For the direct purchase of ocean transportation services, also 
evaluate offers in accordance with the criterion at 247.572-2(c)(2).

[65 FR 50143, Aug. 17, 2000, as amended at 70 FR 35544, June 21, 2005]

  Subpart 212.70_Pilot Program for Transition to Follow-On Contracting 
                After Use of Other Transaction Authority

    Source: 69 FR 63330, Nov. 1, 2004, unless otherwise noted.



Sec. 212.7000  Scope.

    This subpart establishes the pilot program authorized by Section 847 
of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 
108-136).



Sec. 212.7001  Definitions.

    As used in this subpart--
    Nontraditional defense contractor means a business unit that--
    (1) Has entered into an other transaction agreement with DoD; and
    (2) Has not, for a period of at least 1 year prior to the date of 
the other transaction agreement, entered into or performed on--
    (i) Any contract that is subject to full coverage under the cost 
accounting standards described in FAR Part 30; or
    (ii) Any other contract exceeding $500,000 to carry out prototype 
projects or to perform basic, applied, or advanced research projects for 
a Federal agency that is subject to the FAR.
    Other transaction means a transaction that--
    (1) Is other than a contract, grant, or cooperative agreement;
    (2) Is not subject to the FAR or its supplements; and
    (3) Is entered into in accordance with 32 CFR part 3.



Sec. 212.7002  Pilot program.



Sec. 212.7002-1  Contracts under the program.

    (a) The contracting officer may use FAR part 12 procedures to award 
a contract for an item or process that does not meet the definition of 
``commercial item,'' if the contract--
    (1) Is awarded to a nontraditional defense contractor;
    (2) Is a follow-on contract for the production of an item or process 
begun as a prototype project under an other transaction agreement;
    (3) Does not exceed $50,000,000;
    (4) Is awarded on or before September 30, 2008; and
    (5) Is either--
    (i) A firm-fixed-price contract; or
    (ii) A fixed-price contract with economic price adjustment.
    (b) See 212.7003 for special procedures pertaining to technical data 
and computer software.

[69 FR 63330, Nov. 1, 2004, as amended at 71 FR 18669, Apr. 12, 2006]



Sec. 212.7002-2  Subcontracts under the program.

    (a) A subcontract for an item or process that does not meet the 
definition of ``commercial item'' may be treated as a subcontract for a 
commercial item, if the subcontract--
    (1) Is for the production of an item or process begun as a prototype 
project under an other transaction agreement;
    (2) Does not exceed $50,000,000;
    (3) Is awarded on or before September 30, 2008;
    (4) Is awarded to a nontraditional defense contractor; and
    (5) Is either--
    (i) A firm-fixed-price subcontract; or
    (ii) A fixed-price subcontract with economic price adjustment.

[[Page 60]]

    (b) See 212.7003 for special procedures pertaining to technical data 
and computer software.

[71 FR 18669, Apr. 12, 2006]



Sec. 212.7003  Technical data and computer software.

    For purposes of establishing delivery requirements and license 
rights for technical data under 227.7102 and for computer software under 
227.7202, there shall be a rebuttable presumption that items or 
processes acquired under a contract or subcontract awarded in accordance 
with 212.7002 were developed in part with Federal funds and in part at 
private expense (i.e., mixed funding).
    (a) Delivery requirements. Acquire only the technical data and 
computer software that are necessary to satisfy agency needs. Follow the 
requirements at 227.7103-1 and 227.7103-2 for technical data, and 
227.7203-1 and 227.7203-2 for computer software.
    (b) License rights. Acquire only the license rights in technical 
data and computer software that are necessary to satisfy agency needs.
    (1) For technical data, use the clauses at 252.227-7013, Rights in 
Technical Data--Noncommercial Items, and 252.227-7037, Validation of 
Restrictive Markings on Technical Data.
    (2) For computer software, use the clauses at 252.227-7014, Rights 
in Noncommercial Computer Software and Noncommercial Computer Software 
Documentation, and 252.227-7019, Validation of Asserted Restrictions--
Computer Software.
    (3) Require the contractor to include the clauses prescribed by 
paragraphs (b)(1) and (2) of this section in subcontracts awarded in 
accordance with 212.7002-2.
    (4) When the standard license rights for items or processes 
developed with mixed funding do not provide the minimum rights necessary 
to satisfy agency needs, negotiate for special license rights in 
accordance with 227.7103-5(d) and 227.7203-5(d).

[71 FR 18669, Apr. 12, 2006]

[[Page 61]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 213_SIMPLIFIED ACQUISITION PROCEDURES

                        Subpart 213.1_Procedures

Sec.

Sec. 213.101 General.

Sec. 213.106-1-70 Soliciting competition--tiered evaluation of offers.

     Subpart 213.2_Actions at or Below the Micro-Purchase Threshold


Sec. 213.270 Use of the Governmentwide commercial purchase card.

              Subpart 213.3_Simplified Acquisition Methods


Sec. 213.301 Governmentwide commercial purchase card.

Sec. 213.302 Purchase orders.

Sec. 213.302-3 Obtaining contractor acceptance and modifying purchase 
          orders.

Sec. 213.302-5 Clauses.

Sec. 213.303 Blanket purchase agreements (BPAs).

Sec. 213.303-5 Purchases under BPAs.

Sec. 213.305 Imprest funds and third party drafts.

Sec. 213.305-3 Conditions for use.

Sec. 213.306 SF 44, Purchase Order-Invoice-Voucher.

Sec. 213.307 Forms.

                  Subpart 213.4_Fast Payment Procedure


Sec. 213.402 Conditions for use.

 Subpart 213.70_Simplified Acquisition Procedures Under the 8(a) Program


Sec. 213.7001 Procedures.

Sec. 213.7002 Purchase orders.

    Authority: 48 U.S.C. 421 and 48 CFR Chapter 1.

    Source: 64 FR 2596, Jan. 15, 1999, unless otherwise noted.

                        Subpart 213.1_Procedures



Sec. 213.101  General.

    Structure awards valued above the micro-purchase threshold (e.g., 
contract line items, delivery schedule, and invoice instructions) in a 
manner that will minimize the generation of invoices valued at or below 
the micro-purchase threshold.

[65 FR 46625, July 31, 2000]



Sec. 213.106-1-70  Soliciting competition--tiered evaluation of offers.

    (a) The tiered or cascading order of precedence used for tiered 
evaluation of offers shall be consistent with FAR part 19.
    (b) Consideration shall be given to the tiers of small businesses 
(e.g., 8(a), HUBZone small business, service-disabled veteran-owned 
small business, small business) before evaluating offers from other than 
small business concerns.
    (c) Before issuing a solicitation with a tiered evaluation of 
offers--(1) The contracting officer shall conduct market research, in 
accordance with FAR part 10 and part 210, to determine--
    (i) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business; or
    (ii) For a task or delivery order, whether there are a sufficient 
number of qualified small business concerns available to justify 
limiting competition under the terms of the contract; and
    (2) If the contracting officer cannot determine whether the criteria 
in paragraph (c)(1) of this section are met, the contracting officer 
shall include a written explanation in the contract file as to why such 
a determination could not be made (Section 816 of Public Law 109-163).

[71 FR 53043, Sept. 8, 2006]

     Subpart 213.2_Actions at or Below the Micro-Purchase Threshold



Sec. 213.270  Use of the Governmentwide commercial purchase card.

    Use the Governmentwide commercial purchase card as the method of 
purchase and/or method of payment for purchases valued at or below the 
micro-purchase threshold. This policy

[[Page 62]]

applies to all types of contract actions authorized by the FAR unless--
    (a) The Deputy Secretary of Defense has approved an exception for an 
electronic commerce/electronic data interchange system or operational 
requirement that results in a more cost-effective payment process;
    (b)(1) A general or flag officer or a member of the Senior Executive 
Service (SES) makes a written determination that--
    (i) The source or sources available for the supply or service do not 
accept the purchase card; and
    (ii) The contracting office is seeking a source that accepts the 
purchase card.
    (2) To prevent mission delays, if an activity does not have a 
resident general or flag officer of SES member, delegation of this 
authority to the level of the senior local commander or director is 
permitted; or
    (c) The purchase or payment meets one or more of the following 
criteria:
    (1) The place of performance is entirely outside the United States 
and its outlying areas.
    (2) The purchase is a Standard Form 44 purchase for aviation fuel or 
oil.
    (3) The purchase is an overseas transaction by a contracting officer 
in support of a contingency operation as defined in 10 U.S.C. 101(a)(13) 
or a humanitarian or peacekeeping operation as defined in 10 U.S.C. 
2302(8).
    (4) The purchase is a transaction in support of intelligence or 
other specialized activities addressed by Part 2.7 of Executive Order 
12333.
    (5) The purchase is for training exercises in preparation for 
overseas contingency, humanitarian, or peacekeeping operations.
    (6) The payment is made with an accommodation check.
    (7) The payment is for a transportation bill.
    (8) The purchase is under a Federal Supply Schedule contract that 
does not permit use of the Governmentwide commercial purchase card.
    (9) The purchase is for medical services and--
    (i) It involves a controlled substance or narcotic;
    (ii) It requires the submission of a Health Care Summary Record to 
document the nature of the care purchased;
    (iii) The ultimate price of the medical care is subject to an 
independent determination that changes the price paid based on 
application of a mandatory CHAMPUS Maximum Allowable Charge 
determination that reduces the Government liability below billed 
charges;
    (iv) The Government already has entered into a contract to pay for 
the services without the use of a purchase card;
    (v) The purchaser is a beneficiary seeking medical care; or
    (vi) The senior local commander or director of a hospital or 
laboratory determines that use of the purchase card is not appropriate 
or cost-effective. The Medical Prime Vendor Program and the DoD Medical 
Electronic Catalog Program are two examples where use of the purchase 
card may not be cost-effective.

[65 FR 46626, July 31, 2000, as amended at 70 FR 35544, June 21, 2005]

              Subpart 213.3_Simplified Acquisition Methods



Sec. 213.301  Governmentwide commercial purchase card.

    (1) ``United States,'' as used in this section, means the 50 States 
and the District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, the Commonwealth of the Northern Mariana Islands, Guam, 
American Samoa, Wake Island, Johnston Island, Canton Island, the outer 
Continental Shelf lands, and any other place subject to the jurisdiction 
of the United States (but not including leased bases).
    (2) An individual appointed in accordance with 201.603-3(b) also may 
use the Governmentwide commercial purchase card to make a purchase that 
exceeds the micro-purchase threshold but does not exceed $25,000, if--
    (i) The purchase--
    (A) Is made outside the United States for use outside the United 
States; and
    (B) Is for a commercial item; but
    (C) Is not for work to be performed by employees recruited within 
the United States;

[[Page 63]]

    (D) Is not for supplies or services originating from, or transported 
from or through, sources identified in FAR Subpart 25.7;
    (E) Is not for ball or roller bearings as end items;
    (F) Does not require access to classified or Privacy Act 
information; and
    (G) Does not require transportation of supplies by sea; and
    (ii) The individual making the purchase--
    (A) Is authorized and trained in accordance with agency procedures;
    (B) Complies with the requirements of FAR 8.002 in making the 
purchase; and
    (C) Seeks maximum practicable competition for the purchase in 
accordance with FAR 13.104(b).
    (3) A contracting officer supporting a contingency operation as 
defined in 10 U.S.C. 101(a)(13) or a humanitarian or peacekeeping 
operation as defined in 10 U.S.C. 2302(8) also may use the 
Governmentwide commercial purchase card to make a purchase that exceeds 
the micro-purchase threshold but does not exceed the simplified 
acquisition threshold, if--
    (i) The supplies or services being purchased are immediately 
available;
    (ii) One delivery and one payment will be made; and
    (iii) The requirements of paragraphs (2)(i) and (ii) of this section 
are met.
    (4) Guidance on DoD purchase, travel, and fuel card programs is 
available at http://www.acq.osd.mil/dpap/pcard/pcardguidebook.htm. 
Additional guidance on the fuel card program is available at http://
www.desc.dla.mil.

[64 FR 56705, Oct. 21, 1999; 64 FR 63380, Nov. 19, 1999, as amended at 
66 FR 55123, Nov. 1, 2001; 66 FR 56902, Nov. 13, 2001; 67 FR 38021, May 
31, 2002; 68 FR 56561, Oct. 1, 2003; 70 FR 75411, Dec. 20, 2005]



Sec. 213.302  Purchase orders.



Sec. 213.302-3  Obtaining contractor acceptance and modifying purchase 
          orders.

    (1) Require written acceptance of purchase orders for classified 
acquisitions.
    (2) See PGI 213.302-3 for guidance on the use of unilateral 
modifications.
    (3) A supplemental agreement converts a unilateral purchase order to 
a bilateral agreement. If not previously included in the purchase order, 
incorporate the clause at 252.243-7001, Pricing of Contract 
Modifications, in the Standard Form 30, and obtain the contractor's 
acceptance by signature on the Standard Form 30.

[64 FR 2596, Jan. 15, 1999, as amended at 71 FR 3413, Jan. 23, 2006]



Sec. 213.302-5  Clauses.

    (a) Use the clause at 252.243-7001, Pricing of Contract 
Modifications, in all bilateral purchase orders.
    (d) When using the clause at FAR 52.213-4, delete the reference to 
the clause at FAR 52.225-1, Buy American Act-Supplies. Instead, if the 
Buy American Act applies to the acquisition, use the clause at--
    (i) 252.225-7001, Buy American Act and Balance of Payments Program, 
as prescribed at 225.1101(2); or
    (ii) 252.225-7036, Buy American Act--Free Trade Agreements--Balance 
of Payments Program, as prescribed at 225.1101(10).

[64 FR 24528, May 7, 1999, as amended at 65 FR 19850, Apr. 13, 2000; 65 
FR 39704, June 27, 2000; 68 FR 56561, Oct. 1, 2003; 69 FR 1927, Jan. 13, 
2004]



Sec. 213.303  Blanket purchase agreements (BPAs).



Sec. 213.303-5  Purchases under BPAs.

    (b) Individual purchases for subsistence may be made at any dollar 
value; however, the contracting officer must satisfy the competition 
requirements of FAR Part 6 for any action not using simplified 
acquisition procedures.



Sec. 213.305  Imprest funds and third party drafts.



Sec. 213.305-3  Conditions for use.

    (d)(i) On a very limited basis, installation commanders and 
commanders of other activities with contracting authority may be granted 
authority to establish imprest funds and third party draft 
(accommodation check) accounts. Use of imprest funds and third party 
drafts must comply with--
    (A) DoD 7000.14-R, DoD Financial Management Regulation, Volume 5, 
Disbursing Policy and Procedures; and

[[Page 64]]

    (B) The Treasury Financial Manual, Volume I, Part 4, Chapter 3000.
    (ii) Use of imprest funds requires approval by the Director for 
Financial Commerce, Office of the Deputy Chief Financial Officer, Office 
of the Under Secretary of Defense (Comptroller), except as provided in 
paragraph (d)(iii) of this subsection.
    (iii) Imprest funds are authorized for use without further approval 
for--
    (A) Overseas transactions at or below the micro-purchase threshold 
in support of a contingency operation as defined in 10 U.S.C. 101(a)(13) 
or a humanitarian or peacekeeping operation as defined in 10 U.S.C. 
2302(8); and
    (B) Classified transactions.

[71 FR 3413, Jan. 23, 2006]



Sec. 213.306  SF 44, Purchase Order-Invoice-Voucher.

    (a)(1) The micro-purchase limitation applies to all purchases, 
except that purchases not exceeding the simplified acquisition threshold 
may be made for--
    (A) Aviation fuel and oil;
    (B) Overseas transactions by contracting officers in support of a 
contingency operation as defined in 10 U.S.C. 101(a)(13) or a 
humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(8); 
and
    (C) Transactions in support of intelligence and other specialized 
activities addressed by Part 2.7 of Executive Order 12333.

[64 FR 2596, Jan. 15, 1999, as amended at 71 FR 3413, Jan. 23, 2006]



Sec. 213.307  Forms.

    See PGI 213.307 for procedures on use of forms for purchases made 
using simplified acquisition procedures.

[71 FR 3413, Jan. 23, 2006]

                  Subpart 213.4_Fast Payment Procedure



Sec. 213.402  Conditions for use.

    (a) Individual orders may exceed the simplified acquisition 
threshold for--
    (i) Brand-name commissary resale subsistence; and
    (ii) Medical supplies for direct shipment overseas.

 Subpart 213.70_Simplified Acquisition Procedures Under the 8(a) Program



Sec. 213.7001  Procedures.

    For acquisitions that are otherwise appropriate to be conducted 
using procedures set forth in this part, and also eligible for the 8(a) 
Program, contracting officers may use--
    (a)(1) For sole source purchase orders not exceeding the simplified 
acquisition threshold, the procedures in 219.804-2(2); or
    (2) For other types of acquisitions, the procedures in Subpart 
219.8, excluding the procedures in 219.804-2(2); or
    (b) The procedures for award to the Small Business Administration in 
FAR Subpart 19.8.

[64 FR 2596, Jan. 15, 1999. Redesignated at 71 FR 3413, Jan. 23, 2006]



Sec. 213.7002  Purchase orders.

    The contracting officer need not obtain a contractor's written 
acceptance of a purchase order or modification of a purchase order for 
an acquisition under the 8(a) Program pursuant to 219.804-2(2).

[71 FR 3413, Jan. 23, 2006]

                         PART 214_SEALED BIDDING

                   Subpart 214.2_Solicitation of Bids

Sec.

Sec. 214.202 General rules for solicitation of bids.

Sec. 214.202-5 Descriptive literature.

           Subpart 214.4_Opening of Bids and Award of Contract


Sec. 214.404 Rejection of bids.

Sec. 214.404-1 Cancellation of invitations after opening.

Sec. 214.407 Mistakes in bids.

Sec. 214.407-3 Other mistakes disclosed before award.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36326, July 31, 1991, unless otherwise noted.

[[Page 65]]

                   Subpart 214.2_Solicitation of Bids



Sec. 214.202  General rules for solicitation of bids.



Sec. 214.202-5  Descriptive literature.

    (c) Requirements of invitation for bids. When brand name or equal 
purchase descriptions are used, use of the provision at FAR 52.211-6, 
Brand Name or Equal, satisfies this requirement.

[56 FR 36326, July 31, 1991, as amended at 63 FR 11528, Mar. 9, 1998; 64 
FR 55633, Oct. 14, 1999; 69 FR 65090, Nov. 10, 2004]

           Subpart 214.4_Opening of Bids and Award of Contract



Sec. 214.404  Rejection of bids.



Sec. 214.404-1  Cancellation of invitations after opening.

    The contracting officer shall make the written determinations 
required by FAR 14.404-1 (c) and (e).



Sec. 214.407  Mistakes in bids.



Sec. 214.407-3  Other mistakes disclosed before award.

    (e) Authority for making a determination under FAR 14.407-3(a), (b) 
and (d) is delegated for the defense agencies, without power of 
redelegation, as follows:
    (i) Defense Advanced Research Projects Agency: General Counsel, 
DARPA.
    (ii) Defense Information Systems Agency: General Counsel, DISA.
    (iii) Defense Intelligence Agency: Principal Assistant for 
Acquisition.
    (iv) Defense Logistics Agency:
    (A) General Counsel, DLA; and
    (B) Associate General Counsel, DLA.
    (v) National Imagery and Mapping Agency: General Counsel, NIMA.
    (vi) Defense Threat Reduction Agency: General Counsel, DTRA.
    (vii) National Security Agency: Director of Procurement, NSA.
    (viii) Missile Defense Agency: General Counsel, MDA.
    (ix) Defense Contract Management Agency: General Counsel, DCMA.

[57 FR 42629, Sept. 15, 1992, as amended at 59 FR 27669, May 27, 1994; 
61 FR 50452, Sept. 26, 1996. Redesignated and amended at 62 FR 34122, 
June 24, 1997; 64 FR 51076, Sept. 21, 1999; 68 FR 7439, Feb. 14, 2003; 
69 FR 65090, Nov. 10, 2004]

                   PART 215_CONTRACTING BY NEGOTIATION

  Subpart 215.2_Solicitation and Receipt of Proposals and Information.

Sec.

Sec. 215.203-70 Requests for proposals--tiered evaluation of offers.

                     Subpart 215.3_Source Selection


Sec. 215.303 Responsibilities.

Sec. 215.304 Evaluation factors and significant subfactors.

Sec. 215.305 Proposal evaluation.

                     Subpart 215.4_Contract Pricing


Sec. 215.403 Obtaining cost or pricing data.

Sec. 215.403-1 Prohibition on obtaining cost or pricing data.

Sec. 215.403-5 Instructions for submission of cost or pricing data or 
          information other than cost or pricing data.

Sec. 215.404 Proposal analysis.

Sec. 215.404-1 Proposal analysis techniques.

Sec. 215.404-2 Information to support proposal analysis.

Sec. 215.404-3 Subcontract pricing considerations.

Sec. 215.404-4 Profit.

Sec. 215.404-70 DD Form 1547, Record of Weighted Guidelines Method 
          Application.

Sec. 215.404-71 Weighted guidelines method.

Sec. 215.404-71-1 General.

Sec. 215.404-71-2 Performance risk.

Sec. 215.404-71-3 Contract type risk and working capital adjustment.

Sec. 215.404-71-4 Facilities capital employed.

Sec. 215.404-71-5 Cost efficiency factor.

Sec. 215.404-72 Modified weighted guidelines method for nonprofit 
          organizations other than FFRDCs.

Sec. 215.404-73 Alternate structure approaches.

Sec. 215.404-74 Fee requirements for cost-plus-award-fee contracts.

Sec. 215.404-75 Fee requirements for FFRDCs.

Sec. 215.404-76 Reporting profit and fee statistics.

Sec. 215.406-1 Prenegotiation objectives.

Sec. 215.406-3 Documenting the negotiation.

Sec. 215.407-2 Make-or-buy programs.

Sec. 215.407-3 Forward pricing rate agreements.

Sec. 215.407-4 Should-cost review.

Sec. 215.407-5 Estimating systems.

[[Page 66]]


Sec. 215.407-5-70 Disclosure, maintenance, and review requirements.

Sec. 215.408 Slicitation provisions and contract clauses.

Sec. 215.470 Estimated data prices.

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

    Source: 63 FR 55040, Oct. 14, 1998, unless otherwise noted.

   Subpart 215.2_Solicitation and Receipt of Proposals and Information



Sec. 215.203-70  Requests for proposals--tiered evaluation of offers.

    (a) The tiered or cascading order of precedence used for tiered 
evaluation of offers shall be consistent with FAR part 19.
    (b) Consideration shall be given to the tiers of small businesses 
(e.g., 8(a), HUBZone small business, service-disabled veteran-owned 
small business, small business) before evaluating offers from other than 
small business concerns.
    (c) Before issuing a solicitation with a tiered evaluation of 
offers--
    (1) The contracting officer shall conduct market research, in 
accordance with FAR part 10 and part 210, to determine--
    (i) Whether the criteria in FAR part 19 are met for setting aside 
the acquisition for small business; or
    (ii) For a task or delivery order, whether there are a sufficient 
number of qualified small business concerns available to justify 
limiting competition under the terms of the contract; and
    (2) If the contracting officer cannot determine whether the criteria 
in paragraph (c)(1) of this section are met, the contracting officer 
shall include a written explanation in the contract file as to why such 
a determination could not be made (Section 816 of Public Law 109-163).

[71 FR 53043, Sept. 8, 2006]

                     Subpart 215.3_Source Selection



Sec. 215.303  Responsibilities.

    (b)(2) For high-dollar value and other acquisitions, as prescribed 
by agency procedures, the source selection authority shall approve a 
source selection plan before the solicitation is issued. Follow the 
procedures at PGI 215.303(b)(2) for preparation of the source selection 
plan.

[71 FR 3414, Jan. 23, 2006]



Sec. 215.304  Evaluation factors and significant subfactors.

    (c)(i) In acquisitions that require use of the clause at FAR 52.219-
9, Small Business Subcontracting Plan, other than those based on the 
lowest price technically acceptable source selection process (see FAR 
15.101-2), the extent of participation of small businesses and 
historically black colleges or universities and minority institutions in 
performance of the contract shall be addressed in source selection. The 
contracting officer shall evaluate the extent to which offerors identify 
and commit to small business and historically black college or 
university and minority institution performance of the contract, whether 
as a joint venture, teaming arrangement, or subcontractor.
    (A) See PGI 215.304(c)(i)(A) for examples of evaluation factors.
    (B) Proposals addressing the extent of small business and 
historically black college or university and minority institution 
performance may be separate from subcontracting plans submitted pursuant 
to the clause at FAR 52.219-9 and should be structured to allow for 
consideration of offers from small businesses.
    (C) When an evaluation assesses the extent that small businesses and 
historically black colleges or universities and minority institutions 
are specifically identified in proposals, the small businesses and 
historically black colleges or universities and minority institutions 
considered in the evaluation shall be listed in any subcontracting plan 
submitted pursuant to FAR 52.219-9 to facilitate compliance with 
252.219-7003(g).
    (ii) In accordance with 10 U.S.C. 2436, consider the purchase of 
capital assets (including machine tools) manufactured in the United 
States, in source

[[Page 67]]

selections for all major defense acquisition programs as defined in 10 
U.S.C. 2430.

[71 FR 3414, Jan. 23, 2006, as amended at 71 FR 14109, Mar. 21, 2006]



Sec. 215.305  Proposal evaluation.

    (a)(2) Past performance evaluation. When a past performance 
evaluation is required by FAR 15.304, and the solicitation includes the 
clause at FAR 52.219-8, Utilization of Small Business Concerns, the 
evaluation factors shall include the past performance of offerors in 
complying with requirements of that clause. When a past performance 
evaluation is required by FAR 15.304, and the solicitation includes the 
clause at FAR 52.219-9, Small Business Subcontracting Plan, the 
evaluation factors shall include the past performance of offerors in 
complying with requirements of that clause.

[71 FR 3414, Jan. 23, 2006]

                     Subpart 215.4_Contract Pricing



Sec. 215.403  Obtaining cost or pricing data.



Sec. 215.403-1  Prohibition on obtaining cost or pricing data.

    (c) Standards for exceptions from cost or pricing data 
requirements--(1) Adequate price competition. For acquisitions under 
dual or multiple source programs:
    (A) The determination of adequate price competition must be made on 
a case-by-case basis. Even when adequate price competition exists, in 
certain cases it may be appropriate to obtain additional information to 
assist in price analysis.
    (B) Adequate price competition normally exists when--
    (i) Prices are solicited across a full range of step quantities, 
normally including a 0-100 percent split, from at least two offerors 
that are individually capable of producing the full quantity; and
    (ii) The reasonableness of all prices awarded is clearly established 
on the basis of price analysis (see FAR 15.404-1(b)).
    (4) Waivers. (A) DoD has waived the requirement for submission of 
cost or pricing data for the Canadian Commercial Corporation and its 
subcontractors.
    (B) DoD has waived cost or pricing data requirements for nonprofit 
organizations (including education institutions) on cost-reimbursement-
no-fee contracts. The contracting officer shall require--
    (1) Submission of information other than cost or pricing data to the 
extent necessary to determine reasonableness and cost realism; and
    (2) Cost or pricing data from subcontractors that are not nonprofit 
organizations when the subcontractor's proposal exceeds the cost or 
pricing data threshold at FAR 15.403-4(a)(1).



Sec. 215.403-5  Instructions for submission of cost or pricing data or 
          information other than cost or pricing data.

    (b) When the solicitation requires contractor compliance with the 
Contractors Cost Data Reporting (CCDR) System (Army--AMCP 715-8, Navy--
NAV PUB P-5241, and Air Force--AFMCP 800-15), require the contractor to 
submit DD Form 1921 or 1921-1 with its pricing proposal.



Sec. 215.404  Proposal analysis.



Sec. 215.404-1  Proposal analysis techniques.

    (a) General. For spare parts or support equipment, perform an 
analysis of--
    (i) Those line items where the proposed price exceeds by 25 percent 
or more the lowest price the Government has paid within the most recent 
12-month period based on reasonably available information;
    (ii) Those line items where a comparison of the item description and 
the proposal price indicates a potential for overpricing;
    (iii) Significant high-dollar-value items. If there are no obvious 
high-dollar-value items, include an analysis of a random sample of 
items; and
    (iv) A random sample of the remaining low-dollar value items. Sample 
size may be determined by subjective judgment, e.g., experience with the 
offeror and the reliability of its estimating and accounting systems.
    (d) Cost realism analysis. The contracting officer should determine 
what

[[Page 68]]

information other than cost or pricing data is necessary for the cost 
realism analysis during acquisition planning and development of the 
solicitation. Unless such information is available from sources other 
than the offerors (see FAR 15.402(a)(2)), the contracting officer will 
need to request data from the offerors. The contracting officer--
    (i) Shall request only necessary data; and
    (ii) May not request submission of cost or pricing data.



Sec. 215.404-2  Information to support proposal analysis.

    (a) Field pricing assistance. (i) The contracting officer should 
consider requesting field pricing assistance for--
    (A) Fixed-price proposals exceeding the cost or pricing data 
threshold;
    (B) Cost-type proposals exceeding the cost or pricing data threshold 
from offerors with significant estimating system deficiencies (see 
215.407-5-70(a)(4) and (c)(2)(i)); or
    (C) Cost-type proposals exceeding $10 million from offerors without 
significant estimating system deficiencies.
    (ii) The contracting officer should not request field pricing 
support for proposed contracts or modifications in an amount less than 
that specified in paragraph (a)(i) of this subsection. An exception may 
be made when a reasonable pricing result cannot be established because 
of--
    (A) A lack of knowledge of the particular offeror; or
    (B) Sensitive conditions (e.g., a change in, or unusual problems 
with, an offeror's internal systems).
    (c) Audit assistance for prime contracts or subcontracts. (i) If, in 
the opinion of the contracting officer or auditor, the review of a prime 
contractor's proposal requires further review of subcontractors' cost 
estimates at the subcontractors' plants (after due consideration of 
reviews performed by the prime contractor), the contracting officer 
should inform the administrative contracting officer (ACO) having 
cognizance of the prime contractor before the review is initiated.
    (ii) Notify the appropriate contract administration activities when 
extensive, special, or expedited field pricing assistance will be needed 
to review and evaluate subcontractors' proposals under a major weapon 
system acquisition. If audit reports are received on contracting actions 
that are subsequently cancelled, notify the cognizant auditor in 
writing.



Sec. 215.404-3  Subcontract pricing considerations.

    (a)(i) When obtaining field pricing assistance on a prime 
contractor's proposal, the contracting officer should request audit or 
field pricing assistance to analyze and evaluate the proposal of a 
subcontractor at any tier (notwithstanding availability of data or 
analyses performed by the prime contractor) if the contracting officer 
believes that such assistance is necessary to ensure the reasonableness 
of the total proposed price. Such assistance may be appropriate when, 
for example--
    (A) There is a business relationship between the contractor and the 
subcontractor not conducive to independence and objectivity;
    (B) The contractor is a sole source supplier and the subcontract 
costs represent a substantial part of the contract cost;
    (C) The contractor has been denied access to the subcontractor's 
records;
    (D) The contracting officer determines that, because of factors such 
as the size of the proposed subcontract price, audit or field pricing 
assistance for a subcontract at any tier is critical to a fully detailed 
analysis of the prime contractor's proposal;
    (E) The contractor or higher-tier subcontractor has been cited for 
having significant estimating system deficiencies in the area of 
subcontract pricing, especially the failure to perform adequate cost 
analyses of proposed subcontract costs or to perform subcontract 
analyses prior to negotiation of the prime contract with the Government; 
or
    (F) A lower-tier subcontractor has been cited as having significant 
estimating system deficiencies.
    (ii) It may be appropriate for the contracting officer or the ACO to 
provide assistance to a contractor or subcontractor at any tier, when 
the contractor or higher-tier subcontractor

[[Page 69]]

has been denied access to a subcontractor's records in carrying out the 
responsibilities at FAR 15.404-3 to conduct price or cost analysis to 
determine the reasonableness of proposed subcontract prices. Under these 
circumstances, the contracting officer or the ACO should consider 
whether providing audit or field pricing assistance will serve a valid 
Government interest.
    (iii) When DoD performs the subcontract analysis, DoD shall furnish 
to the prime contractor or higher-tier subcontractor, with the consent 
of the subcontractor reviewed, a summary of the analysis performed in 
determining any unacceptable costs included in the subcontract proposal. 
If the subcontractor withholds consent, DoD shall furnish a range of 
unacceptable costs for each element in such a way as to prevent 
disclosure of subcontractor proprietary data.
    (iv) Price redeterminable or fixed-price incentive contracts may 
include subcontracts placed on the same basis. When the contracting 
officer wants to reprice the prime contract even though the contractor 
has not yet established final prices for the subcontracts, the 
contracting officer may negotiate a firm contract price--
    (A) If cost or pricing data on the subcontracts show the amounts to 
be reasonable and realistic; or
    (B) If cost or pricing data on the subcontracts are too indefinite 
to determine whether the amounts are reasonable and realistic, but--
    (1) Circumstances require prompt negotiation; and
    (2) A statement substantially as follows is included in the 
repricing modification of the prime contract:

    As soon as the Contractor establishes firm prices for each 
subcontract listed below, the Contractor shall submit (in the format and 
with the level of detail specified by the Contracting Officer) to the 
Contracting Officer the subcontractor's cost incurred in performing the 
subcontract and the final subcontract price. The Contractor and 
Contracting Officer shall negotiate an equitable adjustment in the total 
amount paid or to be paid under this contract to reflect the final 
subcontract price.

    (v) If the selection of the subcontractor is based on a trade-off 
among cost or price and other non-cost factors rather than lowest price, 
the analysis supporting subcontractor selection should include a 
discussion of the factors considered in the selection (also see FAR 
15.101 and 15.304 and 215.304). If the contractor's analysis is not 
adequate, return it for correction of deficiencies.
    (vi) The contracting officer shall make every effort to ensure that 
fees negotiated by contractors for cost-plus-fixed-fee subcontracts do 
not exceed the fee limitations in FAR 15.404-4(c)(4).



Sec. 215.404-4  Profit.

    (b) Policy. (1) Departments and agencies must use a structured 
approach for developing a prenegotiation profit or fee objective on any 
negotiated contract action when cost or pricing data is obtained, except 
for cost-plus-award-fee contracts (see 215.404-74) or contracts with 
Federally Funded Research and Development Centers (FFRDCs) (see 215.404-
75). There are three structured approaches--
    (A) The weighted guidelines method;
    (B) The modified weighted guidelines method; and
    (C) An alternate structured approach.
    (c) Contracting officer responsibilities. (1) Also, do not perform a 
profit analysis when assessing cost realism in competitive acquisitions.
    (2) When using a structured approach, the contracting officer--
    (A) Shall use the weighted guidelines method (see 215.404-71), 
except as provided in paragraphs (c)(2)(B) and (c)(2)(C) of this 
subsection.
    (B) Shall use the modified weighted guidelines method (see 215.404-
72) on contract actions with nonprofit organizations other than FFRDCs.
    (C) May use an alternate structured approach (see 215.404-73) when--
    (1) The contract action is--
    (i) At or below the cost or pricing data threshold (see FAR 15.403-
4(a)(1));
    (ii) For architect-engineer or construction work;
    (iii) Primarily for delivery of material from subcontractors; or
    (iv) A termination settlement; or
    (2) The weighted guidelines method does not produce a reasonable 
overall profit objective and the head of the contracting activity 
approves use of the alternate approach in writing.

[[Page 70]]

    (D) Shall use the weighted guidelines method to establish a basic 
profit rate under a formula-type pricing agreement, and may then use the 
basic rate on all actions under the agreement, provided that conditions 
affecting profit do not change.
    (E) Shall document the profit analysis in the contract file.
    (5) Although specific agreement on the applied weights or values for 
individual profit factors shall not be attempted, the contracting 
officer may encourage the contractor to--
    (A) Present the details of its proposed profit amounts in the 
weighted guidelines format or similar structured approached; and
    (B) Use the weighted guidelines method in developing profit 
objectives for negotiated subcontracts.
    (6) The contracting officer must also verify that relevant variables 
have not materially changed (e.g., performance risk, interest rates, 
progress payment rates, distribution of facilities capital).
    (d) Profit-analysis factors--(1) Common factors. The common factors 
are embodied in the DoD structured approaches and need not be further 
considered by the contracting officer.

[63 FR 55040, Oct. 14, 1998, as amended at 63 FR 63799, Nov. 17, 1998; 
65 FR 77829, Dec. 13, 2000; 66 FR 49863, Oct. 1, 2001]



Sec. 215.404-70  DD Form 1547, Record of Weighted Guidelines Method 
          Application.

    (a) The DD Form 1547--
    (1) Provides a vehicle for performing the analysis necessary to 
develop of profit objectives;
    (2) Provides a format for summarizing profit amounts subsequently 
negotiated as part of the contract price; and
    (3) Serves as the principal source documents for reporting profit 
statistics to DoD's management information system.
    (b) The military departments are responsible for establishing 
policies and procedures for feeding the DoD-wide management information 
system on profit and fee statistics (see 215.404-75).
    (c) The contracting officer shall--
    (1) Use and prepare a DD Form 1547 whenever a structured approach to 
profit analysis is required by 215.404-4(b) (see 215.404-71, 215.404-72, 
and 215.404-73 for guidance on using the structured approaches). 
Administrative instructions for completing the form are in 253.215.-70.
    (2) Ensure that the DD Form 1547 is accurately completed. The 
contracting officer is responsible for the correction any errors 
detected by the management system auditing process.



Sec. 215.404-71  Weighted guidelines method.



Sec. 215.404-71-1  General.

    (a) The weighted guidelines method focuses on four profit factors--
    (1) Performance risk;
    (2) Contract type risk;
    (3) Facilities capital employed; and
    (4) Cost efficiency.
    (b) The contracting officer assigns values to each profit factor; 
the value multiplied by the base results in the profit objective for 
that factor. Except for the cost efficiency special factor, each profit 
factor has a normal value and a designated range of values. The normal 
value is representative of average conditions on the prospective 
contract when compared to all goods and services acquired by DoD. The 
designated range provides values based on above normal or below normal 
conditions. In the price negotiation documentation, the contracting 
officer need not explain assignment of the normal value, but should 
address conditions that justify assignment of other than the normal 
value. The cost efficiency special factor has no normal value. The 
contracting officer shall exercise sound business judgment in selecting 
a value when this special factor is used (see 215.404-71-5).

[67 FR 20689, Apr. 26, 2002]



Sec. 215.404-71-2  Performance risk.

    (a) Description. This profit factor addresses the contractor's 
degree of risk in fulfilling the contract requirements. The factor 
consists of two parts:
    (1) Technical--the technical uncertainties of performance.
    (2) Management/cost control--the degree of management effort 
necessary--
    (i) To ensure that contract requirements are met; and
    (ii) To reduce and control costs.

[[Page 71]]

    (b) Determination. The following extract from the DD Form 1547 is 
annotated to describe the process.

----------------------------------------------------------------------------------------------------------------
                                                     Assigned                                         Profit
       Item            Contractor risk factors       weighting    Assigned value  Base (item 20)     objective
----------------------------------------------------------------------------------------------------------------
21................  Technical...................             (1)             (2)             N/A             N/A
22................  Management/Cost Control.....             (1)             (2)             N/A             N/A
23................  Performance Risk (Composite)             N/A             (3)             (4)             (5)
----------------------------------------------------------------------------------------------------------------

    (1) Assign a weight (percentage) to each element according to its 
input to the total performance risk. The total of the two weights equals 
100 percent.
    (2) Select a value for each element from the list in paragraph (c) 
of this subsection using the evaluation criteria in paragraphs (d) and 
(e) of this subsection.
    (3) Compute the composite as shown in the following example:

------------------------------------------------------------------------
                                     Assigned     Assigned     Weighted
                                    weighting      value        value
                                    (percent)    (percent)    (percent)
------------------------------------------------------------------------
Technical........................           60          5.0          3.0
Management/Cost Control..........           40          4.0          1.6
Composite Value..................          100  ...........          4.6
------------------------------------------------------------------------

    (4) Insert the amount from Block 20 of the DD Form 1547. Block 20 is 
total contract costs, excluding facilities capital cost of money.
    (5) Multiply (3) by (4).
    (c) Values: Normal and designated ranges.

------------------------------------------------------------------------
                                         Normal
                                         value       Designated  range
                                       (percent)
------------------------------------------------------------------------
Standard............................            5  3% to 7%
Technology Incentive................            9  7% to 11%
------------------------------------------------------------------------

    (1) Standard. The standard designated range should apply to most 
contracts.
    (2) Technology incentive. For the technical factor only, contracting 
officers may use the technology incentive range for acquisitions that 
include development, production, or application of innovative new 
technologies. The technology incentive range does not apply to efforts 
restricted to studies, analyses, or demonstrations that have a technical 
report as their primary deliverable.
    (d) Evaluation criteria for technical. (1) Review the contract 
requirements and focus on the critical performance elements in the 
statement of work or specifications. Factors to consider include--
    (i) Technology being applied or developed by the contractor;
    (ii) Technical complexity;
    (iii) Program maturity;
    (iv) Performance specifications and tolerances;
    (v) Delivery schedule; and
    (vi) Extent of a warranty or guarantee.
    (2) Above normal conditions. (i) The contracting officer may assign 
a higher than normal value in those cases where there is a substantial 
technical risk. Indicators are--
    (A) Items are being manufactured using specifications with stringent 
tolerance limits;
    (B) The efforts require highly skilled personnel or require the use 
of state-of-the-art machinery;
    (C) The services and analytical efforts are extremely important to 
the Government and must be performed to exacting standards;
    (D) The contractor's independent development and investment has 
reduced the Government's risk or cost;
    (E) The contractor has accepted an accelerated delivery schedule to 
meet DoD requirements; or
    (F) The contractor has assumed additional risk through warranty 
provisions.

[[Page 72]]

    (ii) Extremely complex, vital efforts to overcome difficult 
technical obstacles that require personnel with exceptional abilities, 
experience, and professional credentials may justify a value 
significantly above normal.
    (iii) The following may justify a maximum value--
    (A) Development or initial production of a new item, particularly if 
performance or quality specifications are tight; or
    (B) A high degree of development or production concurrency.
    (3) Below normal conditions. (i) The contracting officer may assign 
a lower than normal value in those cases where the technical risk is 
low. Indicators are--
    (A) Requirements are relatively simple;
    (B) Technology is not complex;
    (C) Efforts do not require highly skilled personnel;
    (D) Efforts are routine;
    (E) Programs are mature; or
    (F) Acquisition is a follow-on effort or a repetitive type 
acquisition.
    (ii) The contracting officer may assign a value significantly below 
normal for--
    (A) Routine services;
    (B) Production of simple items;
    (C) Rote entry or routine integration of Government-furnished 
information; or
    (D) Simple operations with Government-furnished property.
    (4) Technology incentive range. (i) The contracting officer may 
assign values within the technology incentive range when contract 
performance includes the introduction of new, significant technological 
innovation. Use the technology incentive range only for the most 
innovative contract efforts. Innovation may be in the form of--
    (A) Development or application of new technology that fundamentally 
changes the characteristics of an existing product or system and that 
results in increased technical performance, improved reliability, or 
reduced costs; or
    (B) New products or systems that contain significant technological 
advances over the products or systems they are replacing.
    (ii) When selecting a value within the technology incentive range, 
the contracting officer should consider the relative value of the 
proposed innovation to the acquisition as a whole. When the innovation 
represents a minor benefit, the contracting officer should consider 
using values less than the norm. For innovative efforts that will have a 
major positive impact on the product or program, the contracting officer 
may use values above the norm.
    (e) Evaluation criteria for management/cost control. (1) The 
contracting officer should evaluate--
    (i) The contractor's management and internal control systems using 
contracting office information and reviews made by field contract 
administration offices or other DoD field offices;
    (ii) The management involvement expected on the prospective contract 
action;
    (iii) The degree of cost mix as an indication of the types of 
resources applied and value added by the contractor;
    (iv) The contractor's support of Federal socioeconomic programs;
    (v) The expected reliability of the contractor's cost estimates 
(including the contractor's cost estimating system);
    (vi) The adequacy of the contractor's management approach to 
controlling cost and schedule; and
    (vii) Any other factors that affect the contractor's ability to meet 
the cost targets (e.g., foreign currency exchange rates and inflation 
rates).
    (2) Above normal conditions. (i) The contracting officer may assign 
a higher than normal value when there is a high degree of management 
effort. Indicators of this are--
    (A) The contractor's value added is both considerable and reasonably 
difficult;
    (B) The effort involves a high degree of integration or 
coordination;
    (C) The contractor has a good record of past performance;
    (D) The contractor has a substantial record of active participation 
in Federal socioeconomic programs;
    (E) The contractor provides fully documented and reliable cost 
estimates;
    (F) The contractor makes appropriate make-or-buy decisions; or

[[Page 73]]

    (G) The contractor has a proven record of cost tracking and control.
    (ii) The contracting officer may justify a maximum value when the 
effort--
    (A) Requires large scale integration of the most complex nature;
    (B) Involves major international activities with significant 
management coordination (e.g., offsets with foreign vendors); or
    (C) Has critically important milestones.
    (3) Below normal conditions. (i) The contracting officer may assign 
a lower than normal value when the management effort is minimal. 
Indicators of this are--
    (A) The program is mature and many end item deliveries have been 
made;
    (B) The contractor adds minimal value to an item;
    (C) The efforts are routine and require minimal supervision;
    (D) The contractor provides poor quality, untimely proposals;
    (E) The contractor fails to provide an adequate analysis of 
subcontractor costs;
    (F) The contractor does not cooperate in the evaluation and 
negotiation of the proposal;
    (G) The contractor's cost estimating system is marginal;
    (H) The contractor has made minimal effort to initiate cost 
reduction programs;
    (I) The contractor's cost proposal is inadequate;
    (J) The contractor has a record of cost overruns or another 
indication of unreliable cost estimates and lack of cost control; or
    (K) The contractor has a poor record of past performance.
    (ii) The following may justify a value significantly below normal--
    (A) Reviews performed by the field contract administration offices 
disclose unsatisfactory management and internal control systems (e.g., 
quality assurance, property control, safety, security); or
    (B) The effort requires an unusually low degree of management 
involvement.

[67 FR 20689, Apr. 26, 2002, as amended at 67 FR 49254, July 30, 2002]



Sec. 215.404-71-3  Contract type risk and working capital adjustment.

    (a) Description. The contract type risk factor focuses on the degree 
of cost risk accepted by the contractor under varying contract types. 
The working capital adjustment is an adjustment added to the profit 
objective for contract type risk. It only applies to fixed-price 
contracts that provide for progress payments. Though it uses a formula 
approach, it is not intended to be an exact calculation of the cost of 
working capital. Its purpose is to give general recognition to the 
contractor's cost of working capital under varying contract 
circumstances, financing policies, and the economic environment.
    (b) Determination. The following extract from the DD 1547 is 
annotated to explain the process.

----------------------------------------------------------------------------------------------------------------
                  Contractor risk
      Item            factors                             Assigned value      Base (item 20)    Profit objective
----------------------------------------------------------------------------------------------------------------
24.............  CONTRACT type      ..................  (1)                 (2)                (3)
                  risk.
                                    Cost financed       Length factor       Interest rate
25.............  WORKING capital    (5)                 (6)                 (7)                (8)
                  (4).
----------------------------------------------------------------------------------------------------------------

    (1) Select a value from the list of contract types in paragraph (c) 
of this subsection using the evaluation criteria in paragraph (d) of 
this subsection.
    (2) Insert the amount from Block 20, i.e., the total allowable costs 
excluding facilities capital cost of money.
    (3) Multiply (1) by (2).
    (4) Only complete this block when the prospective contract is a 
fixed-price contract containing provisions for progress payments.
    (5) Insert the amount computed per paragraph (e) of this subsection.
    (6) Insert the appropriate figure from paragraph (f) of this 
subsection.
    (7) Use the interest rate established by the Secretary of the 
Treasury (see 230.7101-1(a)). Do not use any other interest rate.

[[Page 74]]

    (8) Multiply (5) by (6) by (7). This is the working capital 
adjustment. It shall not exceed 4 percent of the contract costs in Block 
20.
    (c) Values: Normal and designated ranges.

------------------------------------------------------------------------
                                                Normal      Designated
         Contract type             Notes        value          range
                                              (percent)      (percent)
------------------------------------------------------------------------
Firm-fixed-price, no financing          (1)          5.0         4 to 6.
Firm-fixed-price, with                  (6)          4.0      2.5 to 5.5
 performance-based payments...
Firm-fixed-price, with                  (2)          3.0         2 to 4.
 progress payments............
Fixed-price incentive, no               (1)          3.0         2 to 4.
 financing....................
Fixed-price incentive, with             (6)          2.0     0.5 to 3.5.
 performance-based payments...
Fixed-price with                        (3)  ...........  ..............
 redetermination provision....
Fixed-price incentive, with             (2)          1.0         0 to 2.
 progress payments............
Cost-plus-incentive-free......          (4)          1.0         0 to 2.
Cost-plus-fixed-fee...........          (4)          0.5         0 to 1.
Time-and-materials (including           (5)          0.5         0 to 1.
 overhaul contracts priced on
 time-and-materials basis)....
Labor-hour....................          (5)          0.5         0 to 1.
Firm-fixed-price, level-of-             (5)          0.5         0 to 1.
 effort.......................
------------------------------------------------------------------------

    (1) ``No financing'' means either that the contract does not provide 
progress payments or performance-based payments, or that the contract 
provides them only on a limited basis, such as financing of first 
articles. Do not compute a working capital adjustment.
    (2) When the contract contains provisions for progress payments, 
compute a working capital adjustment (Block 25).
    (3) For the purposes of assigning profit values, treat a fixed-price 
contract with redetermination provisions as if it were a fixed-price 
incentive contract with below normal conditions.
    (4) Cost-plus contracts shall not receive the working capital 
adjustment.
    (5) These types of contracts are considered cost-plus-fixed-fee 
contracts for the purposes of assigning profit values. They shall not 
receive the working capital adjustment in Block 25. However, they may 
receive higher than normal values within the designated range to the 
extent that portions of cost are fixed.
    (6) When the contract contains provisions for performance-based 
payments, do not compute a working capital adjustment.
    (d) Evaluation criteria--(1) General. The contracting officer should 
consider elements that affect contract type risk such as--
    (i) Length of contract;
    (ii) Adequacy of cost data for projections;
    (iii) Economic environment;
    (iv) Nature and extent of subcontracted activity;
    (v) Protection provided to the contractor under contract provisions 
(e.g., economic price adjustment clauses);
    (vi) The ceilings and share lines contained in incentive provisions;
    (vii) Risks associated with contracts for foreign military sales 
(FMS) that are not funded by U.S. appropriations; and
    (viii) When the contract contains provisions for performance-based 
payments--
    (A) The frequency of payments;
    (B) The total amount of payments compared to the maximum allowable 
amount specified at FAR 32.1004(b)(2); and
    (C) The risk of the payment schedule to the contractor.
    (2) Mandatory. The contracting officer shall assess the extent to 
which costs have been incurred prior to the definitization of the 
contract action (also see 217.7404-6(a)). The assessment shall include 
any reduced contractor risk on both the contract before definitization 
and the remaining portion of the contract. When costs have been incurred 
prior to definitization, generally regard the contract type risk to be 
in the low end of the designated range. If a substantial portion of the 
costs have been incurred prior to definitization, the contracting 
officer may assign a value as low as 0 percent, regardless of contract 
type.

[[Page 75]]

    (3) Above normal conditions. The contracting officer may assign a 
higher than normal value when there is substantial contract type risk. 
Indicators of this are--
    (i) Efforts where there is minimal cost history;
    (ii) Long-term contracts without provisions protecting the 
contractor, particularly when there is considerable economic 
uncertainty;
    (iii) Incentive provisions (e.g., cost and performance incentives) 
that place a high degree of risk on the contractor;
    (iv) FMS sales (other than those under DoD cooperative logistics 
support arrangements or those made from U.S. Government inventories or 
stocks) where the contractor can demonstrate that there are substantial 
risks above those normally present in DoD contracts for similar items; 
or
    (v) An aggressive performance-based payment schedule that increases 
risk.
    (4) Below normal conditions. The contracting officer may assign a 
lower than normal value when the contract type risk is low. Indicators 
of this are--
    (i) Very mature product line with extensive cost history;
    (ii) Relative short-term contracts;
    (iii) Contractual provisions that substantially reduce the 
contractor's risk;
    (iv) Incentive provisions that place a low degree of risk on the 
contractor;
    (v) Performance-based payments totaling the maximum allowable 
amount(s) specified at FAR 32.1004(b)(2); or
    (vi) A performance-based payment schedule that is routine with 
minimal risk.
    (e) Costs financed. (1) Costs financed equal total costs multiplied 
by the portion (percent) of costs financed by the contractor.
    (2) Total costs equal Block 20 (i.e., all allowable costs excluding 
facilities capital cost of money), reduced as appropriate when--
    (i) The contractor has little cash investment (e.g., subcontractor 
progress payments liquidated late in period of performance);
    (ii) Some costs are covered by special financing provisions, such as 
advance payments; or
    (iii) The contract is multiyear and there are special funding 
arrangements.
    (3) The portion that the contractor finances is generally the 
portion not covered by progress payments, i.e., 100 percent minus the 
customary progress payment rate (see FAR 32.501). For example, if a 
contractor receives progress payments at 80 percent, the portion that 
the contractor finances is 20 percent. On contracts that provide 
progress payments to small businesses, use the customary progress 
payment rate for large businesses.
    (f) Contract length factor. (1) This is the period of time that the 
contractor has a working capital investment in the contract. It--
    (i) Is based on the time necessary for the contractor to complete 
the substantive portion of the work;
    (ii) Is not necessarily the period of time between contract award 
and final delivery (or final payment), as periods of minimal effort 
should be excluded;
    (iii) Should not include periods of performance contained in option 
provisions; and
    (iv) Should not, for multiyear contracts, include periods of 
performance beyond that required to complete the initial program year's 
requirements.
    (2) The contracting officer--
    (i) Should use the following table to select the contract length 
factor;
    (ii) Should develop a weighted average contract length when the 
contract has multiple deliveries; and
    (iii) May use sampling techniques provided they produce a 
representative result.

                                  Table
------------------------------------------------------------------------
                                                             Contract
    Period to perform substantive portion (in months)      length factor
------------------------------------------------------------------------
21 or less..............................................             .40
22 to 27................................................             .65
28 to 33................................................             .90
34 to 39................................................            1.15
40 to 45................................................            1.40
46 to 51................................................            1.65
52 to 57................................................            1.90
58 to 63................................................            2.15
64 to 69................................................            2.40
70 to 75................................................            2.65
76 or more..............................................            2.90
------------------------------------------------------------------------

    (3) Example: A prospective contract has a performance period of 40 
months with end items being delivered in the

[[Page 76]]

34th, 36th, 38th, and 40th months of the contract. The average period is 
37 months and the contract length factor is 1.15.

[63 FR 55040, Oct. 14, 1998, as amended at 64 FR 61032, Nov. 9, 1999; 66 
FR 63335, Dec. 6, 2001; 67 FR 20691, Apr. 26, 2002; 67 FR 49255, July 
30, 2002]



Sec. 215.404-71-4  Facilities capital employed.

    (a) Description. This factor focuses on encouraging and rewarding 
capital investment in facilities that benefit DoD. It recognizes both 
the facilities capital that the contractor will employ in contract 
performance and the contractor's commitment to improving productivity.
    (b) Determination. The following extract from the DD Form 1547 has 
been annotated to explain the process.

----------------------------------------------------------------------------------------------------------------
                                  Contractor facilities capital                       Amount          Profit
             Item                           employed              Assigned value     employed        objective
----------------------------------------------------------------------------------------------------------------
26............................  Land............................             N/A             (2)             N/A
27............................  Buildings.......................             N/A             (2)             N/A
28............................  Equipment.......................             (1)             (2)             (3)
----------------------------------------------------------------------------------------------------------------

    (1) Select a value from the list in paragraph (c) of this subsection 
using the evaluation criteria in paragraph (d) of this subsection.
    (2) Use the allocated facilities capital attributable to land, 
buildings, and equipment, as derived in DD Form 1861, Contract 
Facilities Capital Cost of Money (see 230,7001).
    (i) In addition to the net book value of facilities capital 
employed, consider facilities capital that is part of a formal 
investment plan if the contractor submits reasonable evidence that--
    (A) Achievable benefits to DoD will result from the investment; and
    (B) The benefits of the investment are included in the forward 
pricing structure.
    (ii) If the value of intracompany transfers has been included in 
Block 20 at cost (i.e., excluding general and administrative (G&A) 
expenses and profit), add to the contractor's allocated facilities 
capital, the allocated facilities capital attributable to the buildings 
and equipment of those corporate divisions supplying the intracompany 
transfers. Do not make this addition if the value of intracompany 
transfers has been included in Block 20 at price (i.e., including G&A 
expenses and profit).
    (3) Multiply (1) by (2).
    (c) Values: Normal and designated ranges. These are the normal 
values and ranges. They apply to all situations.

------------------------------------------------------------------------
                                         Normal
             Asset type                  value       Designated  range
                                       (percent)
------------------------------------------------------------------------
Land................................            0  N/A
Buildings...........................            0  N/A
Equipment...........................         17.5  10 to 25
------------------------------------------------------------------------

    (d) Evaluation criteria. (1) In evaluating facilities capital 
employed, the contracting officer--
    (i) Should relate the usefulness of the facilities capital to the 
goods or services being acquired under the prospective contract;
    (ii) Should analyze the productivity improvements and other 
anticipated industrial base enhancing benefits resulting from the 
facilities capital investment, including--
    (A) The economic value of the facilities capital, such as physical 
age, undepreciated value, idleness, and expected contribution to future 
defense needs; and
    (B) The contractor's level of investment in defense related 
facilities as compared with the portion of the contractor's total 
business that is derived from DoD; and
    (iii) Should consider any contractual provisions that reduce the 
contractor's risk of investment recovery, such as termination protection 
clauses and capital investment indemnification.
    (2) Above normal conditions. (i) The contracting officer may assign 
a higher than normal value if the facilities capital investment has 
direct, identifiable,

[[Page 77]]

and exceptional benefits. Indicators are--
    (A) New investments in state-of-the-art technology that reduce 
acquisition cost or yield other tangible benefits such as improved 
product quality or accelerated deliveries; or
    (B) Investments in new equipment for research and development 
applications.
    (ii) The contracting officer may assign a value significantly above 
normal when there are direct and measurable benefits in efficiency and 
significantly reduced acquisition costs on the effort being priced. 
Maximum values apply only to those cases where the benefits of the 
facilities capital investment are substantially above normal.
    (3) Below normal conditions. (i) The contracting officer may assign 
a lower than normal value if the facilities capital investment has 
little benefit to DoD. Indicators are--
    (A) Allocations of capital apply predominantly to commercial item 
lines;
    (B) Investments are for such things as furniture and fixtures, home 
or group level administrative offices, corporate aircraft and hangars, 
gymnasiums; or
    (C) Facilities are old or extensively idle.
    (ii) The contracting officer may assign a value significantly below 
normal when a significant portion of defense manufacturing is done in an 
environment characterized by outdated, inefficient, and labor-intensive 
capital equipment.

[63 FR 55040, Oct. 14, 1998, as amended at 67 FR 20691, Apr. 26, 2002; 
67 FR 49255, July 30, 2002]



Sec. 215.404-71-5  Cost efficiency factor.

    (a) This special factor provides an incentive for contractors to 
reduce costs. To the extent that the contractor can demonstrate cost 
reduction efforts that benefit the pending contract, the contracting 
officer may increase the prenegotiation profit objective by an amount 
not to exceed 4 percent of total objective cost (Block 20 of the DD Form 
1547) to recognize these efforts (Block 29).
    (b) To determine if using this factor is appropriate, the 
contracting officer shall consider criteria, such as the following, to 
evaluate the benefit the contractor's cost reduction efforts will have 
on the pending contract:
    (1) The contractor's participation in Single Process Initiative 
improvements;
    (2) Actual cost reductions achieved on prior contracts;
    (3) Reduction or elimination of excess or idle facilities;
    (4) The contractor's cost reduction initiatives (e.g., competition 
advocacy programs, technical insertion programs, obsolete parts control 
programs, spare parts pricing reform, value engineering, outsourcing of 
functions such as information technology). Metrics developed by the 
contractor such as fully loaded labor hours (i.e., cost per labor hour, 
including all direct and indirect costs) or other productivity measures 
may provide the basis for assessing the effectiveness of the 
contractor's cost reduction initiatives over time;
    (5) The contractor's adoption of process improvements to reduce 
costs;
    (6) Subcontractor cost reduction efforts;
    (7) The contractor's effective incorporation of commercial items and 
processes; or
    (8) The contractor's investment in new facilities when such 
investments contribute to better asset utilization or improved 
productivity.
    (c) When selecting the percentage to use for this special factor, 
the contracting officer has maximum flexibility in determining the best 
way to evaluate the benefit the contractor's cost reduction efforts will 
have on the pending contract. However, the contracting officer shall 
consider the impact that quantity differences, learning, changes in 
scope, and economic factors such as inflation and deflation will have on 
cost reduction.

[67 FR 20692, Apr. 26, 2002, as amended at 67 FR 49255, July 30, 2002]



Sec. 215.404-72  Modified weighted guidelines method for nonprofit 
          organizations other than FFRDCs.

    (a) Definition. As used in this subpart, a nonprofit organization is 
a business entity--
    (1) That operates exclusively for charitable, scientific, or 
educational purposes;

[[Page 78]]

    (2) Whose earnings do not benefit any private shareholder or 
individual;
    (3) Whose activities do not involve influencing legislation or 
political campaigning for any candidate for public office; and
    (4) That is exempted from Federal income taxation under section 501 
of the Internal Revenue Code.
    (b) For nonprofit organizations that are entities that have been 
identified by the Secretary of Defense or a Secretary of a Department as 
receiving sustaining support on a cost-plus-fixed-fee basis from a 
particular DoD department or agency, compute a fee objective for covered 
actions using the weighted guidelines method in 215.404-71, with the 
following modifications:
    (1) Modifications to performance risk (Blocks 21-23 of the DD Form 
1547). (i) If the contracting officer assigns a value from the standard 
designated range (see 215.404-71-2(c)), reduce the fee objective by an 
amount equal to 1 percent of the costs in Block 20 of the DD Form 1547. 
Show the net (reduced) amount on the DD Form 1547.
    (ii) Do not assign a value from the technology incentive designated 
range.
    (2) Modifications to contract type risk (Block 24 of the DD Form 
1547). Use a designated range of -1 percent to 0 percent instead of the 
values in 215.404-71-3. There is no normal value.
    (c) For all other nonprofit organizations except FFRDCs, compute a 
fee objective for covered actions using the weighted guidelines method 
in 215.404-71, modified as described in paragraph (b)(1) of this 
subsection.

[63 FR 63799, Nov. 17, 1998, as amended at 65 FR 77831, Dec. 13, 2000; 
67 FR 20692, Apr. 26, 2002; 67 FR 49255, July 30, 2002]



Sec. 215.404-73  Alternate structured approaches.

    (a) The contracting officer may use an alternate structured approach 
under 215.404-4(c).
    (b) The contracting officer may design the structure of the 
alternate, but it shall include--
    (1) Consideration of the three basic components of profit--
performance risk, contract type risk (including working capital), and 
facilities capital employed. However, the contracting officer is not 
required to complete Blocks 21 through 30 of the DD Form 1547.
    (2) Offset for facilities capital cost of money.
    (i) The contracting officer shall reduce the overall prenegotiation 
profit objective by the amount of facilities capital cost of money. The 
profit amount in the negotiation summary of the DD Form 1547 must be net 
of the offset.
    (ii) This adjustment is needed for the following reason: The values 
of the profit factors used in the weighted guidelines method were 
adjusted to recognize the shift in facilities capital cost of money from 
an element of profit to an element of contract cost (see FAR 31.205-10) 
and reductions were made directly to the profit factors for performance 
risk. In order to ensure that this policy is applied to all DoD 
contracts that allow facilities capital cost of money, similar 
adjustments shall be made to contracts that use alternate structured 
approaches.

[63 FR 55040, Oct. 14, 1998, as amended at 67 FR 20692, Apr. 26, 2002]



Sec. 215.404-74  Fee requirements for cost-plus-award-fee contracts.

    In developing a fee objective for cost-plus-award-fee contracts, the 
contracting officer shall--
    (a) Follow the guidance in FAR 16.405-2 and 216.405-2;
    (b) Not use the weighted guidelines method or alternate structured 
approach;
    (c) Apply the offset policy in 215.404-73(b)(2) for facilities 
capital cost of money, i.e., reduce the base fee by the amount of 
facilities capital cost of money; and
    (d) Not complete a DD Form 1547.

[63 FR 55040, Oct. 14, 1998, as amended at 67 FR 20692, Apr. 26, 2002]



Sec. 215.404-75  Fee requirements for FFRDCs.

    For nonprofit organizations that are FFRDCs, the contracting 
officer--
    (a) Should consider whether any fee is appropriate. Considerations 
shall include the FFRDC's--
    (1) Proportion of retained earnings (as established under generally 
accepted accounting methods) that relates to DoD contracted effort;

[[Page 79]]

    (2) Facilities capital acquisition plans;
    (3) Working capital funding as assessed on operating cycle cash 
needs; and
    (4) Provision for funding unreimbursed costs deemed ordinary and 
necessary to the FFRDC.
    (b) Shall, when a fee is considered appropriate, establish the fee 
objective in accordance with FFRDC fee policies in the DoD FFRDC 
Management Plan.
    (c) Shall not use the weighted guidelines method or an alternate 
structured approach.

[63 FR 63800, Nov. 17, 1998]



Sec. 215.404-76  Reporting profit and fee statistics.

    (a) Contracting officers in contracting offices that participate in 
the management information system for profit and fee statistics must 
send completed DD Forms 1547 on actions that exceed the cost or pricing 
data threshold, where the contracting officer used the weighted 
guidelines method, an alternate structured approach, or the modified 
weighted guidelines method, to their designated office within 30 days 
after contract award.
    (b) Participating contracting offices and their designated offices 
are--

------------------------------------------------------------------------
            Contracting office                    Designated office
------------------------------------------------------------------------
                                  ARMY
------------------------------------------------------------------------
All.......................................  Headquarters, Department of
                                             the Army, ATTN: SAAL-PA,
                                             Skyline 6, Suite 302, 5109
                                             Leesburg Pike, Falls
                                             Church, VA 22041-3201.
------------------------------------------------------------------------
                                  NAVY
------------------------------------------------------------------------
All.......................................  Commander, Fleet and
                                             Industrial Supply Center,
                                             Norfolk, Washington
                                             Detachment, Code 402,
                                             Washington Navy Yard,
                                             Washington, DC 20374-5000.
------------------------------------------------------------------------
                                AIR FORCE
------------------------------------------------------------------------
Air Force Materiel Command (all field       Air Force Materiel Command,
 offices).                                   645 CCSG/SCOS, ATTN: J010
                                             Clerk, 2721 Sacramento
                                             Street, Wright-Patterson
                                             Air Force Base, OH 45433-
                                             5006.
------------------------------------------------------------------------

    (c) When the contracting officer delegates negotiation of a contract 
action that exceeds the cost or pricing data threshold to another agency 
(e.g., to an ACO), that agency must ensure that a copy of the DD Form 
1547 is provided to the delegating office for reporting purposes within 
30 days after negotiation of the contract action.
    (d) Contracting offices outside the United States and its outlying 
areas are exempt from reporting.
    (e) Designated offices send a quarterly (non-cumulative) report of 
DD Form 1547 data to--

Washington Headquarters Services, Directorate for Information Operations 
and Reports, (WHS/DIOR), 1215 Jefferson Davis Highway, Suite 1204, 
Arlington, VA 22202-4302

    (f) In preparing and sending the quarterly report, designated 
offices--
    (1) Perform the necessary audits to ensure information accuracy;
    (2) Do not enter classified information;
    (3) Transmit the report via computer magnetic tape using the 
procedures, format, and editing process issued by the Director of 
Defense Procurement; and
    (4) Send the reports not later than the 30th day after the close of 
the quarterly reporting periods.
    (g) These reporting requirements have been assigned Report Control 
Symbol DD-AT&L(Q) 1751.

[63 FR 55040, Oct. 14, 1998. Redesignated at 63 FR 63800, Nov. 17, 1998, 
as amended at 65 FR 52952, Aug. 31, 2000; 65 FR 58607, Sept. 29, 2000; 
66 FR 49863, Oct. 1, 2001; 66 FR 63335, Dec. 6, 2001; 67 FR 4208, Jan. 
29, 2002; 70 FR 35544, June 21, 2005]



Sec. 215.406-1  Prenegotiation objectives.

    (a) Also consider--
    (i) Data resulting from application of work measurement systems in 
developing prenegotiation objectives; and
    (ii) Field pricing assistance personnel participation in planned 
prenegotiation and negotiation activities.
    (b) Prenegotiation objectives, including objectives related to 
disposition of findings and recommendations contained in preaward and 
postward contract audit and other advisory reports, shall be documented 
and reviewed in accordance with Departmental procedures.

[[Page 80]]



Sec. 215.406-3  Documenting the negotiation.

    (a)(7) Include the principal factors related to the disposition of 
findings and recommendation contained in preaward and postaward contract 
audit and other advisory reports.
    (10) The documentation--
    (A) Must address significant deviations from the prenegotiation 
profit objective;
    (B) Should include the DD Form 1547, Record of Weighted Guidelines 
Application (see 215.404-70), if used, with supporting rationale; and
    (C) Must address the rationale for not using the weighted guidelines 
method when its use would otherwise be required by 215.404-70.



Sec. 215.407-2  Make-or-buy programs.

    (e) Program requirements--(1) Items and work included. The minimum 
dollar amount is $1 million.



Sec. 215.407-3  Forward pricing rate agreements.

    (b)(i) Use forward pricing rate agreement (FPRA) rates when such 
rates are available, unless waived on a case-by-case basis by the head 
of the contracting activity.
    (ii) Advise the ACO of each case waived.
    (iii) Contact the ACO for questions on FPRAs or recommended rates.



Sec. 215.407-4  Should-cost review.

    (b) Program should-cost review. (2) DoD contracting activities 
should consider performing a program should-cost review before award of 
a definitive contract for a major system as defined by DoDI 5000.2. See 
DoDI 5000.2 regarding industry participation.
    (c) Overhead should-cost review. (1) Contact the Defense Contract 
Management Agency (DCMA) (http://www.dcmc.hq.dla.mil/) for questions on 
overhead should-cost analysis.
    (2)(A) DCMA or the military department responsible for performing 
contact administration functions (e.g., Navy SUPSHIP) should consider, 
based on risk assessment, performing an overhead should-cost review of a 
contractor business unit (as defined in FAR 2.101) when all of the 
following conditions exist:
    (1) Projected annual sales to DoD exceed $1 billion;
    (2) Projected DoD versus total business exceeds 30 percent;
    (3) Level of sole source DoD contracts is high;
    (4) Significant volume of proposal activity is anticipated;
    (5) Production or development of a major weapon system or program is 
anticipated; and
    (6) Contractor cost control/reduction initiatives appear inadequate.
    (B) The head of the contracting activity may request an overhead 
should-cost review for a business unit that does not meet the criteria 
in paragraph (c)(2)(A) of this subsection.
    (C) Overhead should-cost reviews are labor intensive. These reviews 
generally involve participation by the contracting, contract 
administration, and contract audit elements. The extent of availability 
of military department, contract administration, and contract audit 
resources to support DCMA-led teams should be considered when 
determining whether a review will be conducted. Overhead should-cost 
reviews generally shall not be conducted at a contractor business 
segment more frequently than every 3 years.

[63 FR 55040, Oct. 14, 1998, as amended at 65 FR 52952, Aug. 31, 2000; 
65 FR 58607, Sept. 29, 2000; 67 FR 49252, 49255, July 30, 2002]



Sec. 215.407-5  Estimating systems.



Sec. 215.407-5-70  Disclosure, maintenance, and review requirements.

    (a) Definitions. (1) Acceptable estimating system means an 
estimating system that--
    (i) Is established, maintained, reliable, and consistently applied; 
and
    (ii) Produces verifiable, supportable, and documented cost 
estimates.
    (2) Contractor means a business unit as defined in FAR 2.101.
    (3) Estimating system is as defined in the clause at 252.215-7002, 
Cost Estimating System Requirements.
    (4) Significant estimating system deficiency means a shortcoming in 
the estimating system that is likely to consistently result in proposal 
estimates

[[Page 81]]

for total cost or a major cost element(s) that do not provide an 
acceptable basis for negotiation of fair and reasonable prices.
    (b) Applicability. (1) DoD policy is that all contractors have 
estimating systems that--
    (i) Are acceptable;
    (ii) Consistently produce well-supported proposals that are 
acceptable as a basis for negotiation of fair and reasonable prices;
    (iii) Are consistent with and integrated with the contractor's 
related management systems; and
    (iv) Are subject to applicable financial control systems.
    (2) A large business contractor is subject to estimating system 
disclosure, maintenance, and review requirements if--
    (i) In its preceding fiscal year, the contractor received DoD prime 
contracts or subcontracts totaling $50 million or more for which cost or 
pricing data were required; or
    (ii) In its preceding fiscal year, the contractor received DoD prime 
contracts or subcontracts totaling $10 million or more (but less than 
$50 million) for which cost or pricing data were required and the 
contracting officer, with concurrence or at the request of the ACO, 
determines it to be in the best interest of the Government (e.g., 
significant estimating problems are believed to exist or the 
contractor's sales are predominantly Government).
    (c) Responsibilities. (1) The contracting officer shall--
    (i) Through use of the clause at 252.215-7002, Cost Estimating 
System Requirements, apply the disclosure, maintenance, and review 
requirements to large business contractors meeting the criteria in 
paragraph (b)(2)(i) of this subsection;
    (ii) Consider whether to apply the disclosure, maintenance, and 
review requirements to large business contractors under paragraph 
(b)(2)(ii) of this subsection; and
    (iii) Not apply the disclosure, maintenance, and review requirements 
to other than large business contractors.
    (2) The cognizant ACO, for contractors subject to paragraph (b)(2) 
of this subsection, shall--
    (i) Determine the acceptability of the disclosure and system; and
    (ii) Pursue correction of any deficiencies.
    (3) The cognizant auditor, on behalf of the ACO, serves as team 
leader in conducting estimating system reviews.
    (4) A contractor subject to estimating system disclosure, 
maintenance, and review requirements shall--
    (i) Maintain an acceptable system;
    (ii) Describe its system to the ACO:
    (iii) Provide timely notice of changes in the system; and
    (iv) Correct system deficiencies identified by the ACO.
    (d) Characteristics of an acceptable estimating system--(1) General. 
An acceptable system should provide for the use of appropriate source 
data, utilize sound estimating techniques and good judgment, maintain a 
consistent approach, and adhere to established policies and procedures.
    (2) Evaluation. In evaluating the acceptability of a contractor's 
estimating system, the ACO should consider whether the contractor's 
estimating system, for example--
    (i) Establishes clear responsibility for preparation, review, and 
approval of cost estimates;
    (ii) Provides a written description of the organization and duties 
of the personnel responsible for preparing, reviewing, and approving 
cost estimates;
    (iii) Assures that relevant personnel have sufficient training, 
experience, and guidance to perform estimating tasks in accordance with 
the contractor's established procedures;
    (iv) Identifies the sources of data and the estimating methods and 
rationale used in developing cost estimates;
    (v) Provides for appropriate supervision throughout the estimating 
process;
    (vi) Provides for consistent application of estimating techniques;
    (vii) Provides for detection and timely correction of errors;
    (viii) Protects against cost duplication and omissions;
    (ix) Provides for the use of historical experience, including 
historical vendor pricing information, where appropriate;
    (x) Requires use of appropriate analytical methods;

[[Page 82]]

    (xi) Integrates information available from other management systems, 
where appropriate;
    (xii) Requires management review including verification that the 
company's estimating policies, procedures, and practices comply with 
this regulation;
    (xiii) Provides for internal review of and accountability for the 
acceptability of the estimating system, including the comparison of 
projected results to actual results and an analysis of any differences;
    (xiv) Provides procedures to update cost estimates in a timely 
manner throughout the negotiation process; and
    (xv) Addresses responsibility for review and analysis of the 
reasonableness of subcontract prices.
    (3) Indicators of potentially significant estimating deficiencies. 
The following examples indicate conditions that may produce or lead to 
significant estimating deficiencies--
    (i) Failure to ensure that historical experience is available to and 
utilized by cost estimators, where appropriate;
    (ii) Continuing failure to analyze material costs or failure to 
perform subcontractor cost reviews as required;
    (iii) Consistent absence of analytical support for significant 
proposed cost amounts;
    (iv) Excessive reliance on individual personal judgments where 
historical experience or commonly utilized standards are available;
    (v) Recurring significant defective pricing findings within the same 
cost element(s);
    (vi) Failure to integrate relevant parts of other management systems 
(e.g., production control or cost accounting) with the estimating system 
so that the ability to generate reliable cost estimates is impaired; and
    (vii) Failure to provide established policies, procedures, and 
practices to persons responsible for preparing and supporting estimates.
    (e) Review procedures. Cognizant audit and contract administration 
activities shall--
    (1) Establish and manage regular programs for reviewing selected 
contractors' estimating systems.
    (2) Conduct reviews as a team effort.
    (i) The contract auditor will be the team leader.
    (ii) The team leader will--
    (A) Coordinate with the ACO to ensure that team membership includes 
qualified contract administration technical specialists.
    (B) Advise the ACO and the contractor of significant findings during 
the conduct of the review and during the exit conference.
    (C) Prepare a team report.
    (1) The ACO or a representative should--
    (i) Coordinate the contract administration activity's review;
    (ii) Consolidate findings and recommendations; and
    (iii) When appropriate, prepare a comprehensive written report for 
submission to the auditor.
    (2) The contract auditor will attach the ACO's report to the team 
report.
    (3) Tailor reviews to take full advantage of the day-to-day work 
done by both organizations.
    (4) Conduct a review, every 3 years, of contractors subject to the 
disclosure requirements. The ACO and the auditor may lengthen or shorten 
the 3-year period based on their joint risk assessment of the 
contractor's past experience and current vulnerability.
    (f) Disposition of survey team findings--(1) Reporting of survey 
team findings. The auditor will document the findings and 
recommendations of the survey team in a report to the ACO. If there are 
significant estimating deficiencies, the auditor will recommend 
disapproval of all or portions of the estimating system.
    (2) Initial notification to the contractor. The ACO will provide a 
copy of the team report to the contractor and, unless there are no 
deficiencies mentioned in the report, will ask the contractor to submit 
a written response in 30 days, or a reasonable extension.
    (i) If the contractor agrees with the report, the contractor has 60 
days from the date of initial notification to correct any identified 
deficiencies or submit a corrective action plan showing milestones and 
actions to eliminate the deficiencies.
    (ii) If the contractor disagrees, the contractor should provide 
rationale in its written response.

[[Page 83]]

    (3) Evaluation of contractor's response. The ACO, in consultation 
with the auditor, will evaluate the contractor's response to determine 
whether--
    (i) The estimating system contains deficiencies that need 
correction;
    (ii) The deficiencies are significant estimating deficiencies that 
would result in disapproval of all or a portion of the contractor's 
estimating system; or
    (iii) The contractor's proposed corrective actions are adequate to 
eliminate the deficiency.
    (4) Notification of ACO determination. The ACO will notify the 
contractor and the auditor of the determination and, if appropriate, of 
the Government's intent to disapprove all or selected portions of the 
system. The notice shall--
    (i) List the cost elements covered;
    (ii) Identify any deficiencies requiring correction; and
    (iii) Require the contractor to correct the deficiencies within 45 
days or submit an action plan showing milestones and actions to 
eliminate the deficiencies.
    (5) Notice of disapproval. If the contractor has neither submitted 
an acceptable corrective action plan nor corrected significant 
deficiencies within 45 days, the ACO shall disapprove all or selected 
portions of the contractor's estimating system. The notice of 
disapproval must--
    (i) Identify the cost elements covered;
    (ii) List the deficiencies that prompted the disapproval; and
    (iii) Be sent to the cognizant auditor, and each contracting and 
contract administration officer having substantial business with the 
contractor.
    (6) Monitoring contractor's corrective action. The auditor and the 
ACO will monitor the contractor's progress in correcting deficiencies. 
If the contractor fails to make adequate progress, the ACO shall take 
whatever action is necessary to ensure that the contractor corrects the 
deficiencies. Examples of actions the ACO can take are: bringing the 
issue to the attention of higher level management, reducing or 
suspending progress payments (see FAR 32.503-6), and recommending 
nonaward of potential contracts.
    (7) Withdrawal of estimating system disapproval. The ACO will 
withdraw the disapproval when the ACO determines that the contractor has 
corrected the significant system deficiencies. The ACO will notify the 
contractor, the auditor, and affected contracting and contract 
administration activities of the withdrawal.
    (g) Impact of estimating system deficiencies on specific proposals. 
(1) Field pricing teams will discuss identified estimating system 
deficiencies and their impact in all reports on contractor proposals 
until the deficiencies are resolved.
    (2) The contracting officer responsible for negotiation of a 
proposal generated by an estimating system with an identified deficiency 
shall evaluate whether the deficiency impacts the negotiations. If it 
does not, the contracting officer should proceed with negotiations. If 
it does, the contracting officer should consider other alternatives, 
e.g.--
    (i) Allowing the contractor additional time to correct the 
estimating system deficiency and submit a corrected proposal;
    (ii) Considering another type of contract, e.g., FPIF instead of 
FFP;
    (iii) Using additional cost analysis techniques to determine the 
reasonableness of the cost elements affected by the system's deficiency;
    (iv) Segregating the questionable areas as a cost reimbursable line 
item;
    (v) Reducing the negotiation objective for profit or fee; or
    (vi) Including a contract (reopener) clause that provides for 
adjustment of the contract amount after award.
    (3) The contracting officer who incorporates a reopener clause into 
the contract is responsible for negotiating price adjustments required 
by the clause. Any reopener clause necessitated by an estimating 
deficiency should--
    (i) Clearly identify the amounts and items that are in question at 
the time of negotiation;
    (ii) Indicate a specific time or subsequent event by which the 
contractor will submit a supplemental proposal, including cost or 
pricing data, identifying the cost impact adjustment necessitated by the 
deficient estimating system;

[[Page 84]]

    (iii) Provide for the contracting officer to unilaterally adjust the 
contract price if the contractor fails to submit the supplemental 
proposal; and
    (iv) Provide that failure of the Government and the contractor to 
agree to the price adjustment shall be a dispute under the Disputes 
clause.

[63 FR 55040, Oct. 14, 1998, as amended at 67 FR 49252, July 30, 2002]



Sec. 215.408  Solicitation provisions and contract clauses.

    (1) Use the clause at 252.215-7000, Pricing Adjustments, in 
solicitations and contracts that contain the clause at--
    (i) FAR 52.215-11, Price Reduction for Defective Cost or Pricing 
Data--Modifications;
    (ii) FAR 52.215-12, Subcontractor Cost or Pricing Data; or
    (iii) FAR 52.215-13, Subcontractor Cost or Pricing Data--
Modifications.
    (2) Use the clause at 252.215-7002, Cost Estimating System 
requirements, in all solicitations and contracts to be award on the 
basis of cost or pricing data.



Sec. 215.470  Estimated data prices.

    (a) DoD requires estimates of the prices of data in order to 
evaluate the cost to the Government of data items in terms of their 
management, product, or engineering value.
    (b) When data are required to be delivered under a contract, the 
solicitation will include DD Form 1423, Contract Data Requirements List. 
The form and the provision included in the solicitation request the 
offeror to state what portion of the total price is estimated to be 
attributable to the production or development of the listed data for the 
Government (not to the sale of rights in the data). However, offerors' 
estimated prices may not reflect all such costs; and different offerors 
may reflect these costs in a different manner, for the following 
reasons--
    (1) Differences in business practices in competitive situations;
    (2) Differences in accounting systems among offerors;
    (3) Use of factors or rates on some portions of the data;
    (4) Application of common effort to two or more data items; and
    (5) differences in data preparation methods among offerors.
    (c) Data price estimates should not be used for contract pricing 
purposes without further analysis.
    (d) The contracting officer shall ensure that the contract does not 
include a requirement for data that the contractor has delivered or is 
obligated to deliver to the government under another contract or 
subcontract, and that the successful offeror identifies any such data 
required by the solicitation. However, where duplicate data are desired, 
the contract price shall include the costs of duplication, but not of 
preparation, of such data.

                       PART 216_TYPES OF CONTRACTS

                 Subpart 216.1_Selecting Contract Types

Sec.

Sec. 216.104-70 Research and development.

                   Subpart 216.2_Fixed-Price Contracts


Sec. 216.203 Fixed-price contracts with economic price adjustment.

Sec. 216.203-4 Contract clauses.

Sec. 216.203-4-70 Additional clauses.

               Subpart 216.3_Cost-Reimbursement Contracts


Sec. 216.306 Cost-plus-fixed-fee contracts.

                    Subpart 216.4_Incentive Contracts


Sec. 216.402 Application of predetermined, formula-type incentives.

Sec. 216.402-2 Technical performance incentives.

Sec. 216.403 Fixed-price incentive contracts.

Sec. 216.403-2 Fixed-price incentive (successive targets) contracts.

Sec. 216.405 Cost-reimbursement incentive contracts.

Sec. 216.405-1 Cost-plus-incentive-fee contracts.

Sec. 216.405-2 Cost-plus-award-fee contracts.

Sec. 216.470 Other applications of award fees.

               Subpart 216.5_Indefinite-Delivery Contracts


Sec. 216.501 General.

Sec. 216.501-1 Definitions.

Sec. 216.501-2 General.

Sec. 216.505 Ordering.

Sec. 216.505-70 Orders under multiple award contracts.

Sec. 216.506 Solicitation provisions and contract clauses.

[[Page 85]]

   Subpart 216.6_Time-and-Materials, Labor-Hour, and Letter Contracts


Sec. 216.603 Letter contracts.

Sec. 216.603-3 Limitations.

Sec. 216.603-4 Contract clauses.

                        Subpart 216.7_Agreements


Sec. 216.703 Basic ordering agreements.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36340, July 31, 1991, unless otherwise noted.

                 Subpart 216.1_Selecting Contract Types



Sec. Sec.  216.104-70  Research and development.

    Follow the procedures at PGI 216.104-70 for selecting the 
appropriate research and development contract type.

[71 FR 39007, July 11, 2006]

                   Subpart 216.2_Fixed-Price Contracts



Sec. 216.203  Fixed-price contracts with economic price adjustment.



Sec. Sec.  216.203-4  Contract clauses.

    (1) Generally, use the clauses at FAR 52.216-2, Economic Price 
Adjustment--Standard Supplies, FAR 52.216-3, Economic Price Adjustment--
Semistandard Supplies, and FAR 52.216-4, Economic Price Adjustment--
Labor and Material, only when--
    (i) The total contract price exceeds the simplified acquisition 
threshold; and
    (ii) Delivery or performance will not be completed within 6 months 
after contract award.
    (2) Follow the procedures at PGI 216.203-4 when using an economic 
price adjustment clause based on cost indexes of labor or material.

[71 FR 39007, July 11, 2006]



Sec. 216.203-4-70  Additional clauses.

    (a) Price adjustment for basic steel, aluminum, brass, bronze, or 
copper mill products. (1) The price adjustment clause at 252.216-7000, 
Economic Price Adjustment--Basic Steel, Aluminum, Brass, Bronze, or 
Copper Mill Products, may be used in fixed-price supply contracts for 
basic steel, aluminum, brass, bronze, or copper mill products, such as 
sheets, plates, and bars, when an established catalog or market price 
exists for the particular product being acquired.
    (2) The 10 percent figure in paragraph (d)(1) of the clause shall 
not be exceeded unless approval is obtained at a level above the 
contracting officer.
    (b) Price adjustment for nonstandard steel items. (1) The price 
adjustment clause at 252.216-7001, Economic Price Adjustment--
Nonstandard Steel Items, may be used in fixed-price supply contracts 
when--
    (i) The contractor is a steel producer and actually manufacture the 
standard steel mill item referred to in the ``base steel index'' 
definition of the clause; and
    (ii) The items being acquired are nonstandard steel items made 
wholly or in part of standard steel mill items.
    (2) When this clause is included in invitations for bids, omit Note 
6 of the clause and all references to Note 6.
    (3) Solicitations shall instruct offerors to complete all blanks in 
accordance with the applicable notes.
    (4) When the clause is to provide for adjustment on a basis other 
than ``established price'' (see Note 6 of the clause), that price must 
be verified.
    (5) The ten percent figure in paragraph (e)(4) of the clause shall 
not be exceeded unless approval is obtained at a level above the 
contracting officer.
    (c) Price adjustment for wage rates or material prices controlled by 
a foreign government. (1) The price adjustment clause at 252.216-7003, 
Economic Price Adjustment--Wage Rates or Material Prices Controlled by a 
Foreign Government, may be used in fixed-price supply and service 
contracts when--
    (i) The contract is to be performed wholly or in part in a foreign 
country; and
    (ii) A foreign government controls wage rates or material prices and 
may, during contract performance, impose a mandatory change in wages or 
prices of material.
    (2) Verify the base wage rates and material prices prior to contract 
award

[[Page 86]]

and prior to making any adjustment in the contract price.

[56 FR 36340, July 31, 1991, as amended at 62 FR 34122, June 24, 1997; 
62 FR 40472, July 29, 1997]

               Subpart 216.3_Cost-Reimbursement Contracts



Sec. 216.306  Cost-plus-fixed-fee contracts.

    (c) Limitations. (i) Except as provided in paragraph (c)(ii) of this 
section, annual military construction appropriations acts prohibit the 
use of cost-plus-fixed-fee contracts that--
    (A) Are funded by a military construction appropriations act;
    (B) Are estimated to exceed $25,000; and
    (C) Will be performed within the United States, except Alaska.
    (ii) The prohibition in paragraph (c)(i) of this section does not 
apply to contracts specifically approved in writing, setting forth the 
reasons therefor, in accordance with the following:
    (A) The Secretaries of the military departments are authorized to 
approve such contracts that are for environmental work only, provided 
the environmental work is not classified as construction, as defined by 
10 U.S.C. 2801.
    (B) The Secretary of Defense or designee must approve such contracts 
that are not for environmental work only or are for environmental work 
classified as construction.

[62 FR 1058, Jan. 8, 1997; 62 FR 1817, Jan. 13, 1997; 62 FR 49305, Sept. 
19, 1997; 71 FR 39007, July 11, 2006]

                    Subpart 216.4_Incentive Contracts



Sec. 216.402  Application of predetermined, formula-type incentives.



Sec. 216.402-2  Technical performance incentives.

    See PGI 216.402-2 for guidance on establishing performance 
incentives.

[71 FR 39007, July 11, 2006]



Sec. 216.403  Fixed-price incentive contracts.



Sec. 216.403-2  Fixed-price incentive (successive targets) contracts.

    See PGI 216.403-2 for guidance on the use of fixed-price incentive 
(successive targets) contracts.

[71 FR 39007, July 11, 2006]



Sec. 216.405  Cost-reimbursement incentive contracts.



Sec. 216.405-1  Cost-plus-incentive-fee contracts.

    See PGI 216.405-1 for guidance on the use of cost-plus-incentive-fee 
contracts.

[71 FR 39007, July 11, 2006]



Sec. 216.405-2  Cost-plus-award-fee contracts.

    (b) Application. The cost-plus-award-fee (CPAF) contract may include 
provisional award fee payments. A provisional award fee payment is a 
payment made within an evaluation period prior to a final evaluation for 
that period. The contracting officer may include provisional award fee 
payments in a CPAF contract on a case-by-case basis, provided those 
payments--
    (i) Are made no more frequently than monthly;
    (ii) Are limited to no more than--
    (A) For the initial award fee evaluation period, 50 percent of the 
award fee available for that period; and
    (B) For subsequent award fee evaluation periods, 80 percent of the 
evaluation score for the prior evaluation period times the award fee 
available for the current period, e.g., if the contractor received 90 
percent of the award fee available for the prior evaluation period, 
provisional payments for the current period shall not exceed 72 percent 
(90 percent x 80 percent) of the award fee available for the current 
period;
    (iii) Are superseded by an interim or final award fee evaluation for 
the applicable evaluation period. If provisional payments have exceeded 
the payment determined by the evaluation score for the applicable 
period, the contracting officer shall collect the debt in accordance 
with FAR 32.606; and

[[Page 87]]

    (iv) May be discontinued, or reduced in such amounts deemed 
appropriate by the contracting officer, when the contracting officer 
determines that the contractor will not achieve a level of performance 
commensurate with the provisional payment. The contracting officer shall 
notify the contractor in writing of any discontinuance or reduction in 
provisional award fee payments.
    (c) Limitations.
    (i) The CPAF contract shall not be used--
    (A) To avoid--
    (1) Establishing cost-plus-fixed-fee contracts when the criteria for 
cost-plus-fixed-fee contracts apply; or
    (2) Developing objective targets so a cost-plus-incentive-fee 
contract can be used; or
    (B) For either engineering development or operational system 
development acquisitions that have specifications suitable for 
simultaneous research and development and production, except a CPAF 
contract may be used for individual engineering development or 
operational system development acquisitions ancillary to the development 
of a major weapon system or equipment, where--
    (1) It is more advantageous; and
    (2) The purpose of the acquisition is clearly to determine or solve 
specific problems associated with the major weapon system or equipment.
    (ii) Do not apply the weighted guidelines method to CPAF contracts 
for either the base (fixed) fee or the award fee.
    (iii) The base fee shall not exceed 3 percent of the estimated cost 
of the contract exclusive of the fee.
    (S-70) See PGI 216.405-2 for guidance on the use of CPAF contracts.

[71 FR 39007, July 11, 2006]



Sec. 216.470  Other applications of award fees.

    See PGI 216.470 for guidance on other applications of award fees.

[71 FR 39008, July 11, 2006]

               Subpart 216.5_Indefinite-Delivery Contracts



Sec. 216.501  General.

    (a)(i) For items with a shelf-life of less than 6 months, consider 
the use of indefinite-delivery type contracts with orders to be placed 
either--
    (A) Directly by the users; or
    (B) By central purchasing offices with deliveries direct to users.
    (ii) Whenever an indefinite-delivery contract is issued, the issuing 
office must furnish all ordering offices sufficient information for the 
ordering office to complete its contract reporting responsibilities 
under 204.670-2. This data must be furnished to the ordering activity in 
sufficient time for the activity to prepare its report for the action 
within 3 working days of the order.

[56 FR 36340, July 31, 1991, as amended at 57 FR 42630, Sept. 15, 1992; 
63 FR 11529, Mar. 9, 1998]



Sec. 216.501-1  Definitions.

    Multiple award contract, as used in this subpart, means--
    (1) A multiple award task order contract entered into in accordance 
with FAR 16.504(c); or
    (2) Any other indefinite-delivery, indefinite-quantity contract that 
an agency enters into with two or more sources under the same 
solicitation.

[67 FR 56608, Oct. 25, 2002]



Sec. 216.501-2  General.

    (a) See 217.204(e) for limitations on the period for task order or 
delivery order contracts awarded by DoD pursuant to 10 U.S.C. 2304a.

[69 FR 13478, Mar. 23, 2004]



Sec. 216.505  Ordering.

    (1) Departments and agencies shall comply with the review, approval, 
and reporting requirements established in accordance with Subpart 217.78 
when placing orders under non-DoD contracts in amounts exceeding the 
simplified acquisition threshold.
    (2) Orders placed under indefinite-delivery contracts may be issued 
on DD

[[Page 88]]

Form 1155, Order for Supplies or Services.

[63 FR 11529, Mar. 9, 1998, as amended at 70 FR 29642, May 24, 2005; 71 
FR 14103, Mar. 21, 2006]



Sec. Sec.  216.505-70  Orders under multiple award contracts.

    (a) This subsection--
    (1) Implements Section 803 of the National Defense Authorization Act 
for Fiscal Year 2002 (Pub. L. 107-107) for the acquisition of services, 
and establishes similar policy for the acquisition of supplies;
    (2) Applies to orders for supplies or services exceeding $100,000 
placed under multiple award contracts;
    (3) Also applies to orders placed by non-DoD agencies on behalf of 
DoD; and
    (4) Does not apply to orders for architect-engineer services, which 
shall be placed in accordance with the procedures in FAR Subpart 36.6.
    (b) Each order exceeding $100,000 shall be placed on a competitive 
basis in accordance with paragraph (c) of this subsection, unless this 
requirement is waived on the basis of a justification that is prepared 
and approved in accordance with FAR 8.405-6 and includes a written 
determination that--
    (1) A statute expressly authorizes or requires that the purchase be 
made from a specified source; or
    (2) One of the circumstances described at FAR 16.505(b)(2)(i) 
through (iv) applies to the order. Follow the procedures at PGI 216.505-
70 if FAR 16.505(b)(2)(ii) or (iii) is deemed to apply.
    (c) An order exceeding $100,000 is placed on a competitive basis 
only if the contracting officer--
    (1) Provides a fair notice of the intent to make the purchase, 
including a description of the supplies to be delivered or the services 
to be performed and the basis upon which the contracting officer will 
make the selection, to all contractors offering the required supplies or 
services under the multiple award contract; and
    (2) Affords all contractors responding to the notice a fair 
opportunity to submit an offer and have that offer fairly considered.
    (d) When using the procedures in this subsection--
    (1) The contracting officer should keep contractor submission 
requirements to a minimum;
    (2) The contracting officer may use streamlined procedures, 
including oral presentations;
    (3) The competition requirements in FAR part 6 and the policies in 
FAR Subpart 15.3 do not apply to the ordering process, but the 
contracting officer shall consider price or cost under each order as one 
of the factors in the selection decision; and
    (4) The contracting officer should consider past performance on 
earlier orders under the contract, including quality, timeliness, and 
cost control.

[71 FR 14108, Mar. 21, 2006]



Sec. 216.506  Solicitation provisions and contract clauses.

    (d) If the contract is for the preparation of personal property for 
shipment or storage (see 247.271-4), substitute paragraph (f) at 
252.247-7015, Requirements, for paragraph (f) of the clause at FAR 
52.216-21, Requirements.

[63 FR 11529, Mar. 9, 1998]

   Subpart 216.6_Time-And-Materials, Labor-Hour, and Letter Contracts



Sec. 216.603  Letter contracts.



Sec. 216.603-3  Limitations.

    See subpart 217.74 for additional limitations on the use of letter 
contracts.



Sec. 216.603-4  Contract clauses.

    (b)(2) See 217.7406(a) for additional guidance regarding use of the 
clause at FAR 52.216-24, Limitation of Government Liability.
    (3) Use the clause at 252.217-7027, Contract Definitization, in 
accordance with its prescription at 217.7406(b), instead of the clause 
at FAR 52.216-25, Contract Definitization.

[61 FR 7743, Feb. 29, 1996]

[[Page 89]]

                        Subpart 216.7_Agreements



Sec. 216.703  Basic ordering agreements.

    (c) Limitations. The period during which orders may be placed 
against a basic ordering agreement may not exceed 5 years.
    (d) Orders. Follow the procedures at PGI 216.703(d) for issuing 
orders under basic ordering agreements.

[71 FR 39008, July 11, 2006]

                  PART 217_SPECIAL CONTRACTING METHODS

                   Subpart 217.1_Multiyear Contracting

Sec.

Sec. 217.103 Definitions.

Sec. 217.170 General.

Sec. 217.171 Multiyear contracts for services.

Sec. 217.172 Multiyear contracts for supplies.

Sec. 217.173 Multiyear contracts for weapon systems.

Sec. 217.174 Mulityear contracts that employ economic order quantity 
          procurement.

                          Subpart 217.2_Options


Sec. 217.202 Use of options.

Sec. 217.204 Contracts.

Sec. 217.208 Solicitation provisions and contract clauses.

Sec. 217.208-70 Additional clauses.

      Subpart 217.5_Interagency Acquisitions Under the Economy Act


Sec. 217.500 Scope of subpart.

Sec. 217.504 Ordering procedures.

            Subpart 217.6_Management and Operating Contracts


Sec. 217.600 Scope of subpart.

              Subpart 217.70_Exchange of Personal Property


Sec. 217.7000 Scope of subpart.

Sec. 217.7001 Definitions.

Sec. 217.7002 Policy.

Sec. 217.7003 Purchase request.

Sec. 217.7004 Solicitation and award.

Sec. 217.7005 Solicitation provision.

  Subpart 217.71_Master Agreement for Repair and Alteration of Vessels


Sec. 217.7100 Scope of subpart.

Sec. 217.7101 Definitions.

Sec. 217.7102 General.

Sec. 217.7103 Master agreements and job orders.

Sec. 217.7103-1 Content and format of master agreements.

Sec. 217.7103-2 Period of agreement.

Sec. 217.7103-3 Solicitations for job orders.

Sec. 217.7103-4 Emergency work.

Sec. 217.7103-5 Repair costs not readily ascertainable.

Sec. 217.7103-6 Modification of master agreements.

Sec. 217.7104 Contract clauses.

Subpart 217.72 [Reserved]

           Subpart 217.73_Identification of Sources of Supply


Sec. 217.7300 Scope.

Sec. 217.7301 Policy.

Sec. 217.7302 Procedures.

Sec. 217.7303 Solicitation provision.

              Subpart 217.74_Undefinitized Contract Actions


Sec. 217.7400 Scope.

Sec. 217.7401 Definitions.

Sec. 217.7402 Exceptions.

Sec. 217.7403 Policy.

Sec. 217.7404 Limitations.

Sec. 217.7404-1 Authorization.

Sec. 217.7404-2 Price ceiling.

Sec. 217.7404-3 Definitization schedule.

Sec. 217.7404-4 Limitations on obligations.

Sec. 217.7404-5 Exceptions.

Sec. 217.7404-6 Allowable profit.

Sec. 217.7405 Contract clauses.

            Subpart 217.75_Acquisition of Replenishment Parts


Sec. 217.7500 Scope of subpart.

Sec. 217.7501 Definition.

Sec. 217.7502 General.

Sec. 217.7503 Spares acquisition integrated with production.

Sec. 217.7504 Acquisition of parts when data is not available.

Sec. 217.7505 Limitations on price increases.

Sec. 217.7506 Spare parts breakout program.

         Subpart 217.76_Contracts with Provisioning Requirements


Sec. 217.7601 Provisioning.

                   Subpart 217.77_Over and Above Work


Sec. 217.7701 Procedures.

Sec. 217.7702 Contract clause.

 Subpart 217.78_Contracts or Delivery Orders Issued by a Non-DoD Agency


Sec. 217.7800 Scope of subpart.

Sec. 217.7801 Definitions.

Sec. 217.7802 Policy.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

[[Page 90]]


    Source: 56 FR 36345, July 31, 1991, unless otherwise noted.

                   Subpart 217.1_Mulityear Contracting

    Source: 63 FR 11529, Mar. 9, 1998, unless otherwise noted.



Sec. 217.103  Definitions.

    As used in this subpart--
    Advance procurement means an exception to the full funding policy 
that allows acquisition of long lead time items (advance long lead 
acquisition) or economic order quantities (EOQ) of items (advance EOQ 
acquisition) in a fiscal year in advance of that in which the related 
end item is to be acquired. Advance procurements may include materials, 
parts, components, and effort that must be funded in advance to maintain 
a planned production schedule.
    Military installation means a base, camp, post, station, yard, 
center, or other activity under the jurisdiction of the Secretary of a 
military department or, in the case of an activity in a foreign country, 
under the operational control of the Secretary of a military department 
or the Secretary of Defense (10 U.S.C. 2801(c)(2)).

[68 FR 43332, July 22, 2003]



Sec. 217.170  General.

    (a) Before awarding a multiyear contract, the head of the agency 
must compare the cost of that contract to the cost of an annual 
procurement approach, using a present value analysis. Do not award the 
multiyear contract unless the analysis shows that the multiyear contract 
will result in the lower cost (10 U.S.C. 2306b(l)(7); Section 8008(a) of 
Public Law 105-56 and similar sections in subsequent DoD appropriations 
acts).
    (b) The head of the agency must provide written notice to the 
congressional defense committees at least 10 days before termination of 
any multiyear contract (10 U.S.C. 2306b(l)(6); 10 U.S.C. 2306c(d)(3); 
Section 8008(a) of Public Law 105-56 and similar sections in subsequent 
DoD appropriations acts).
    (c) Every multiyear contract must comply with FAR 17.104(c), unless 
an exception is approved through the budget process in coordination with 
the cognizant comptroller.
    (d)(1) DoD must receive authorization from, or provide notification 
to, Congress before entering into a multiyear contract for certain 
procurements, including those expected to--
    (i) Exceed $500 million (see 217.171(a)(6); 217.172(c); and 
217.172(e)(4));
    (ii) Employ economic order quantity procurement in excess of $20 
million in any one year (see 217.174(a)(1));
    (iii) Employ an unfunded contingent liability in excess of $20 
million (see 217.171(a)(4)(i) and 217.172(d)(1));
    (iv) Involve a contract for advance procurement leading to a 
multiyear contract that employs economic order quantity procurement in 
excess of $20 million in any one year (see 217.174(a)(2)); or
    (v) Include a cancellation ceiling in excess of $100 million (see 
217.171(a)(4)(ii) and 217.172(d)(2)).
    (2) A DoD component must submit a request for authority to enter 
into multiyear contracts described in paragraphs (d)(1)(i) through (iv) 
of this section as part of the component's budget submission for the 
fiscal year in which the multiyear contract will be initiated. DoD will 
include the request, for each candidate it supports, as part of the 
President's Budget for that year and in the Appendix to that budget as 
part of proposed legislative language for the appropriations bill for 
that year (Section 8008(b) of Public Law 105-56).
    (3) If the advisability of using a multiyear contract becomes 
apparent too late to satisfy the requirements in paragraph (d)(2) of 
this section, the request for authority to enter into a multiyear 
contract must be--
    (i) Formally submitted by the President as a budget amendment; or
    (ii) Made by the Secretary of Defense, in writing, to the 
congressional defense committees. (Section 8008(b) of Public Law 105-56)
    (4) Agencies must establish reporting procedures to meet the 
congressional notification requirements of paragraph (d)(1) of this 
section. The head of the

[[Page 91]]

agency must submit a copy of each notice to the Director of Defense 
Procurement and Acquisition Policy, Office of the Under Secretary of 
Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)DPAP), and 
to the Deputy Under Secretary of Defense (Comptroller) (Program/Budget) 
(OUSD (C) (P/B)).

[66 FR 63337, Dec. 6, 2001, as amended at 68 FR 7439, Feb. 14, 2003; 70 
FR 24324, May 9, 2005]



Sec. 217.171  Multiyear contracts for services.

    (a) 10 U.S.C. 2306c. (1) The head of the agency may enter into a 
multiyear contract for a period of not more than 5 years for the 
following types of services (and items of supply relating to such 
services), even though funds are limited by statute to obligation only 
during the fiscal year for which they were appropriated:
    (i) Operation, maintenance, and support of facilities and 
installations.
    (ii) Maintenance or modification of aircraft, ships, vehicles, and 
other highly complex military equipment.
    (iii) Specialized training requiring high quality instructor skills 
(e.g., training for pilots and aircrew members or foreign language 
training).
    (iv) Base services (e.g., ground maintenance, in-plane refueling, 
bus transportation, and refuse collection and disposal).
    (v) Environmental remediation services for--
    (A) An active military installation;
    (B) A military installation being closed or realigned under a base 
closure law as defined in 10 U.S.C. 2667(h)(2); or
    (C) A site formerly used by DoD.
    (2) The head of the agency must be guided by the following 
principles when entering into a multiyear contract for services:
    (i) The portion of the cost of any plant or equipment amortized as a 
cost of contract performance should not exceed the ratio between the 
period of contract performance and the anticipated useful commercial 
life of the plant or equipment. As used in this section, ``useful 
commercial life'' means the commercial utility of the facilities rather 
than the physical life, with due consideration given to such factors as 
the location, specialized nature, and obsolescence of the facilities.
    (ii) Consider the desirability of obtaining an option to extend the 
term of the contract for a reasonable period not to exceed 3 years at 
prices that do not include charges for plant, equipment, or other 
nonrecurring costs already amortized.
    (iii) Consider the desirability of reserving the right to take 
title, under the appropriate circumstances, to the plant or equipment 
upon payment of the unamortized portion of the cost.
    (3) Before entering into a multiyear contract for services, the head 
of the agency must make a written determination that--
    (i) There will be a continuing requirement for the services 
consistent with current plans for the proposed contract period;
    (ii) Furnishing the services will require--
    (A) A substantial initial investment in plant or equipment; or
    (B) The incurrence of substantial contingent liabilities for the 
assembly, training, or transportation of a specialized work force; and
    (iii) Using a multiyear contract will promote the best interests of 
the United States by encouraging effective competition and promoting 
economies in operations.
    (4) The head of the agency must provide written notice to the 
congressional defense committees at least 30 days before award of a 
multiyear contract for services that include--
    (i) An unfunded contingent liability in excess of $20 million 
(Section 8008(a) of Public Law 105-56 and similar sections in subsequent 
DoD appropriations acts); or
    (ii) A cancellation ceiling in excess of $100 million.
    (5) If the budget for a contract that contains a cancellation 
ceiling in excess of $100 million does not include proposed funding for 
the costs of contract cancellation up to the cancellation ceiling 
established in the contract--
    (i) The notification required by paragraph (a)(4) of this section 
shall include--
    (A) The cancellation ceiling amounts planned for each program year 
in the

[[Page 92]]

proposed multiyear contract, together with the reasons for the amounts 
planned;
    (B) The extent to which costs of contract cancellation are not 
included in the budget for the contract; and
    (C) A financial risk assessment of not including budgeting for costs 
of contract cancellation (10 U.S.C. 2306c(d)); and
    (ii) The head of the agency shall provide copies of the notification 
to the Office of Management and Budget at least 14 days before contract 
award in accordance with the procedures at PGI 217.1.
    (6) The head of the agency must not initiate a multiyear contract 
for services exceeding $500 million unless a law specifically provides 
authority for the contract.
    (b) 10 U.S.C. 2829. (1) The head of the agency may enter into 
multiyear contracts for supplies and services required for management, 
maintenance, and operation of military family housing and may pay the 
costs of such contracts for each year from annual appropriations for 
that year.
    (2) The head of the agency may use this authority only if the term 
of the contract does not exceed 4 years.

[66 FR 63337, Dec. 6, 2001, as amended at 68 FR 43333, July 22, 2003; 70 
FR 24324, May 9, 2005]



Sec. 217.172  Multiyear contracts for supplies.

    (a) This section applies to all multiyear contracts for supplies, 
including weapon systems and other multiyear acquisitions specifically 
authorized by law. For additional policies that apply only to multiyear 
contracts for weapon systems, see 217.173.
    (b) The head of the agency may enter into a multiyear contract for 
supplies if, in addition to the conditions listed in FAR 17.105-1(b), 
the use of such a contract will promote the national security of the 
United States (10 U.S.C. 2306b(a)(6)).
    (c) The head of the agency must not enter into or extend a multiyear 
contract that exceeds $500 million (when entered into or when extended) 
until the Secretary of Defense identifies the contract and any extension 
in a report submitted to the congressional defense committees (10 U.S.C. 
2306b(l)(5)).
    (d) The head of the agency must provide written notice to the 
congressional defense committees at least 30 days before award of a 
multiyear contract that includes--
    (1) An unfunded contingent liability in excess of $20 million (10 
U.S.C. 2306b(l)(1)(B)(i)(II); Section 8008(a) of Public Law 105-56 and 
similar sections in subsequent DoD appropriations acts); or
    (2) A cancellation ceiling in excess of $100 million (10 U.S.C. 
2306b(g)).
    (e) The head of the agency shall ensure that the following 
conditions are satisfied before awarding a multiyear contract under the 
authority described in paragraph (b) of this section:
    (1) The multiyear exhibits required by DoD 7000.14-R, Financial 
Management Regulation, are included in the agency's budget estimate 
submission and the President's budget request.
    (2) The Secretary of Defense certifies to Congress that the current 
5-year defense program fully funds the support costs associated with the 
multiyear program (10 U.S.C. 2306b(i)(1)(A)).
    (i) The head of the agency shall submit information supporting this 
certification to USD(C)(P/B) for transmission to Congress through the 
Secretary of Defense.
    (ii) In the case of a contract with a cancellation ceiling in excess 
of $100 million, if the budget for the contract does not include 
proposed funding for the costs of contract cancellation up to the 
cancellation ceiling established in the contract--
    (A) The head of the agency shall, as part of this certification, 
give written notification to the congressional defense committees of--
    (1) The cancellation ceiling amounts planned for each program year 
in the proposed multiyear contract, together with the reasons for the 
amounts planned;
    (2) The extent to which costs of contract cancellation are not 
included in the budget for the contract; and
    (3) A financial risk assessment of not including the budgeting for 
costs of contract cancellation (10 U.S.C. 2306b(g)); and

[[Page 93]]

    (B) The head of the agency shall provide copies of the notification 
to the Office of Management and Budget at least 14 days before contract 
award in accordance with the procedures at PGI 217.1.
    (3) The proposed multiyear contract provides for production at not 
less than minimum economic rates, given the existing tooling and 
facilities (10 U.S.C. 2306b(i)(1)(B)). The head of the agency shall 
submit to USD(C)(P/B) information supporting the agency's determination 
that this requirement has been met.
    (4) If the value of a multiyear contract for a particular system or 
component exceeds $500 million, use of a multiyear contract is 
specifically authorized by--
    (i) An appropriations act (10 U.S.C. 2306b(l)(3)); and
    (ii) A law other than an appropriations act (10 U.S.C. 2306b(i)(3)).
    (5) The contract is for the procurement of a complete and usable end 
item (10 U.S.C. 2306b(i)(4)(A)).
    (6) Funds appropriated for any fiscal year for advance procurement 
are obligated only for the procurement of those long-lead items that are 
necessary in order to meet a planned delivery schedule for complete 
major end items that are programmed under the contract to be acquired 
with funds appropriated for a subsequent fiscal year (including an 
economic order quantity of such long-lead items when authorized by law 
(10 U.S.C. 2306b(i)(4)(b)).
    (7) All other requirements of law are met and there are no other 
statutory restrictions on using a multiyear contract for the specific 
system or component (10 U.S.C. 2306b(i)(2)). One such restriction may be 
the achievement of specified cost savings. If the agency finds, after 
negotiations with the contractor(s), that the specified savings cannot 
be achieved, the head of the agency shall assess the savings that, 
nevertheless, could be achieved by using a multiyear contract. If the 
savings are substantial, the head of the agency may request relief from 
the law's specific savings requirement. The request shall--
    (i) Quantify the savings that can be achieved;
    (ii) Explain any other benefits to the Government of using the 
multiyear contract;
    (iii) Include details regarding the negotiated contract terms and 
conditions; and
    (iv) Be submitted to OUSD (AT&L) DPAP for transmission to Congress 
via the Secretary of Defense and the President.
    (f) The Secretary of Defense may instruct the head of the agency 
proposing a multiyear contract to include in that contract negotiated 
priced options for varying the quantities of end items to be procured 
over the life of the contract (10 U.S.C. 2306b(j)).
    (g) The head of an agency shall not award a multiyear contract using 
fiscal year 2005 appropriated funds unless--
    (1) The Secretary of Defense has submitted to Congress a budget 
request for full funding of units to be procured through the contract;
    (2) Cancellation provisions in the contract do not include 
consideration of recurring manufacturing costs of the contractor 
associated with the production of unfunded units to be delivered under 
the contract; and
    (3) The contract provides that payments to the contractor under the 
contract shall not be made in advance of incurred costs on funded units 
(Section 8008 of Pub. L. 108-287).
    (h) Do not award a multiyear contract using fiscal year 2005 
appropriated funds that provides for a price adjustment based on a 
failure to award a follow-on contract (Section 8008 of Public Law 108-
287).

[66 FR 63338, Dec. 6, 2001, as amended at 68 FR 50475, Aug. 21, 2003; 70 
FR 24324, May 9, 2005]



Sec. 217.173  Multiyear contracts for weapon systems.

    As authorized by 10 U.S.C. 2306b(h) and subject to the conditions in 
217.172(e), the head of the agency may enter into a multiyear contract 
for--
    (a) A weapon system and associated items, services, and logistics 
support for a weapon system; and
    (b) Advance procurement of components, parts, and materials 
necessary to manufacture a weapon system, including advance procurement 
to achieve economic lot purchases or

[[Page 94]]

more efficient production rates (see 217.174 regarding economic order 
quantity procurement).

[70 FR 24325, May 9, 2005]



Sec. 217.174  Multiyear contracts that employ economic order quantity 
          procurement.

    (a) The head of the agency must provide written notice to the 
congressional defense committees at least 30 days before awarding--
    (1) A multiyear contract providing for economic order quantity 
procurement in excess of $20 million in any one year (10 U.S.C. 
2306b(l)(1)(B)(i)(I)); or
    (2) A contract for advance procurement leading to a multiyear 
contract that employs economic order quantity procurement in excess of 
$20 million in any one year (10 U.S.C. 2306b(l)(1)(B)(ii); Section 
8008(a) of Public Law 105-56 and similar sections in subsequent DoD 
appropriations acts).
    (b) Before initiating an advance procurement, the contracting 
officer must verify that it is consistent with DoD policy (e.g., Chapter 
2 of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition 
Programs (MDAPs) and Major Automated Information System (MAIS) 
Acquisition Programs, and the full funding policy in Volume 2A, Chapter 
1, of DoD 7000.14-R, Financial Management Regulation).
    (c) See 217.172(e)(6) for additional provisions regarding 
procurement of economic order quantities of long-lead items.

[66 FR 63338, Dec. 6, 2001, as amended at 68 FR 50475, Aug. 21, 2003; 70 
FR 24325, May 9, 2005]

                          Subpart 217.2_Options



Sec. 217.202  Use of options.

    See PGI 217.202 for guidance on the use of options.

[71 FR 27642, May 12, 2006]



Sec. 217.204  Contracts.

    (e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task 
order or delivery order contract (including a contract for information 
technology) awarded by DoD pursuant to 10 U.S.C. 2304a--
    (A) May be for any period up to 5 years;
    (B) May be subsequently extended for one or more successive periods 
in accordance with an option provided in the contract or a modification 
of the contract; and
    (C) Shall not exceed 10 years unless the head of the agency 
determines in writing that exceptional circumstances require a longer 
ordering period.
    (ii) DoD must submit a report to Congress, annually through fiscal 
year 2009, when an ordering period is extended beyond 10 years in 
accordance with paragraph (e)(i)(C) of this section. Follow the 
procedures at PGI 217.204(e) for reporting requirements.
    (iii) Paragraph (e)(i) of this section does not apply to the 
following:
    (A) Contracts, including task or delivery order contracts, awarded 
under other statutory authority.
    (B) Advisory and assistance service task order contracts (authorized 
by 10 U.S.C. 2304b that are limited by statute to 5 years, with the 
authority to extend an additional 6 months (see FAR 16.505(c)).
    (C) Definite-quantity contracts.
    (D) GSA schedule contracts.
    (E) Multi-agency contracts awarded by agencies other than NASA, DoD, 
or the Coast Guard.
    (iv) Obtain approval from the senior procurement executive before 
issuing an order against a task or delivery order contract subject to 
paragraph (e)(i) of this section, if performance under the order is 
expected to extend more than 1 year beyond the 10-year limit or extended 
limit described in paragraph (e)(i)(C) of this section (see FAR 37.106 
for funding and term of service contracts).

[70 FR 73152, Dec. 9, 2005]



Sec. 217.208  Solicitation provisions and contract clauses.

    Sealed bid solicitations shall not include provisions for 
evaluations of options unless the contracting officer determines that 
there is a reasonable

[[Page 95]]

likelihood that the options will be exercised (10 U.S.C. 2305(a)(5)). 
This limitation also applies to sealed bid solicitations for the 
contracts excluded by FAR 17.200.

[63 FR 11529, Mar. 9, 1998, as amended at 71 FR 27642, May 12, 2006]



Sec. 217.208-70  Additional clauses.

    (a) Use the clause at 252.217-7000, Exercise of Option to Fulfill 
Foreign Military Sales Commitments, when an option may be used for 
foreign military sale requirements.
    (1) Use Alternate I when the foreign military sale country is not 
known at the time of solicitation or award.
    (2) Do not use this clause in contracts for establishment or 
replenishment of DoD inventories or stocks, or acquisitions made under 
DoD cooperative logistics support arrangements.
    (b) When a surge option is needed in support of industrial 
capability production planning, use the clause at 252.217-7001, Surge 
Option, in solicitations and contracts.
    (1) Insert the percentage of increase the option represents in 
paragraph (a) of the clause to ensure adequate quantities are available 
to meet item requirements.
    (2) Change 30 days in paragraphs (b)(2) and (d)(1) to longer 
periods, if appropriate.
    (3) Change the 24-month period in paragraph (c)(3), if appropriate.

[63 FR 11529, Mar. 9, 1998, as amended at 71 FR 27642, May 12, 2006]

      Subpart 217.5_Interagency Acquisitions Under the Economy Act

    Source: 63 FR 11530, Mar. 9, 1998, unless otherwise noted.



Sec. 217.500  Scope of subpart.

    (b) Unless more specific statutory authority exists, the procedures 
in FAR Subpart 17.5, this subpart, and DODI 4000.19 apply to all 
purchases, except micro-purchases, made for DoD by another agency. This 
includes orders under a task or delivery order contract entered into by 
the other agency. (Pub. L. 105-261, Section 814.)

[64 FR 14400, Mar. 25, 1999]



Sec. 217.504  Ordering procedures.

    (a) When the requesting agency is within DoD, a copy of the executed 
D&F shall be furnished to the servicing agency as an attachment to the 
order. When a DoD contracting office is acting as the servicing agency, 
a copy of the executed D&F shall be obtained from the requesting agency 
and placed in the contract file for the Economy Act order.

            Subpart 217.6_Management and Operating Contracts



Sec. 217.600  Scope of subpart.

    FAR subpart 17.6 does not apply to DoD.

              Subpart 217.70_Exchange of Personal Property



Sec. 217.7000  Scope of subpart.

    This subpart prescribes policy and procedures for exchange of 
nonexcess personal property concurrent with an acquisition. Section 
201(c) of the Federal Property and Administrative Services Act of 1949, 
63 Stat. 384, as amended (40 U.S.C. 481(c)) permits exchange of personal 
property and application of the exchange allowance to the acquisition of 
similar property. This subpart does not authorize the sale of nonexcess 
personal property.



Sec. 217.7001  Definitions.

    As used in this subpart--
    (a) Exchange (trade-in) property means property which--
    (1) Is not excess but is eligible for replacement (because of 
obsolescence, unserviceability, or other reason); and
    (2) Is applied as whole or partial payment toward the acquisition of 
similar items (i.e., items designed and constructed for the same 
purpose).
    (b) Property means items that fall within one of the generic 
categories listed in DoD 4140.1-R, DoD Materiel Management Regulation, 
Chapter 6.2,

[[Page 96]]

Exchange or Sale of Nonexcess Personal Property.

[56 FR 36345, July 31, 1991, as amended at 65 FR 39705, June 27, 2000]



Sec. 217.7002  Policy.

    DoD policy is to exchange, rather than replace, eligible nonexcess 
property whenever exchange promotes economical and efficient program 
accomplishment. Exchange policy, authority, and applicability are 
governed by--
    (a) The Federal Property Management Regulations issued by the 
Administrator of the General Services Administration; and
    (b) DoD 4140.1-R, Chapter 6.2.

[56 FR 36345, July 31, 1991, as amended at 65 FR 39705, June 27, 2000]



Sec. 217.7003  Purchase request.

    Ensure that the requiring activity provides all of the following in 
support of the purchase request--
    (a) A certification that the property is eligible for exchange and 
complies with all conditions and limitations of DoD 4140.1-R, Chapter 
6.2.
    (b) A written determination of economic advantage indicating--
    (1) The anticipated economic advantage to the Government from use of 
the exchange authority;
    (2) That exchange allowances shall be applied toward, or in partial 
payment of, the items to be acquired; and
    (3) That, if required, the exchange property has been rendered safe 
or innocuous or has been demilitarized;
    (c) All applicable approvals for the exchange; and
    (d) A description of the property available for exchange (e.g., 
nomenclature, location, serial number, estimated travel value).

[56 FR 36345, July 31, 1991, as amended at 65 FR 39705, June 27, 2000]



Sec. 217.7004  Solicitation and award.

    (a) Solicitations shall include a request for offerors to state 
prices--
    (1) For the new items being acquired without any exchange; and
    (2) For the new items with the exchange (trade-in allowance) for the 
exchange property listed.
    (b) The contracting officer is not obligated to award on an exchange 
basis. If the lowest evaluated offer is an offer for the new items 
without any exchange, the contracting officer may award on that basis 
and forgo the exchange.
    (c) Exchanges may be made only with the successful offeror. When the 
successful offer includes an exchange, award one contract for both the 
acquisition of the new property and the trade-in of the exchange 
property. The only exception is when the items must be acquired against 
a mandatory Federal supply schedule contract, in which case, award a 
separate contract for the exchange.



Sec. 217.7005  Solicitation provision.

    Use the provision at 252.217-7002, Offering Property for Exchange, 
when offering nonexcess personal property for exchange. Allow a minimum 
of 14 calendar days for the inspection period in paragraph (b) of the 
clause if the exchange property is in the contiguous United States. 
Allow at least 21 calendar days outside the contiguous United States.

[70 FR 35544, June 21, 2005]

  Subpart 217.71_Master Agreement for Repair and Alteration of Vessels



Sec. 217.7100  Scope of subpart.

    This subpart contains acquisition policies and procedures for master 
agreements for repair and alteration of vessels.



Sec. 217.7101  Definitions.

    (a) Master agreement for repair and alteration of vessels--
    (1) Is a written instrument of understanding, negotiated between a 
contracting activity and a contractor that--
    (A) Contains contract clauses, terms, and conditions applying to 
future contracts for repairs, alterations, and/or additions to vessels; 
and
    (B) Contemplates separate future contracts that will incorporate by 
reference or attachment the required and applicable clauses agreed upon 
in the master agreement.
    (2) Is not a contract.
    (b) Job order--

[[Page 97]]

    (1) Is a fixed price contract incorporating, by reference or 
attachment, a master agreement for repair and alteration of vessels;
    (2) May include clauses pertaining to subjects not covered by the 
master agreement; but applicable to the job order being awarded; and
    (3) Applies to a specific acquisition and sets forth the scope of 
work, price, delivery date, and other appropriate terms that apply to 
the particular job order.



Sec. 217.7102  General.

    (a) Activities shall enter into master agreements for repair and 
alteration of vessels with all prospective contractors located within 
the United States or its outlying areas, which--
    (1) Request ship repair work; and
    (2) Possess the organization and facilities to perform the work 
satisfactorily. (Issuance of a master agreement does not indicate 
approval of the contractor's facility for any particular acquisition and 
is not an affirmative determination of responsibility under FAR subpart 
9.1 for any particular acquisition.)
    (b) Activities may use master agreements in work with prospective 
contractors located outside the United States and its outlying areas.
    (c) Activities may issue job orders under master agreements to 
effect repairs, alterations, and/or additions to vessels belonging to 
foreign governments.
    (1) Contractors shall treat vessels of a foreign government as if 
they were vessels of the U.S. Government whenever requested to do so by 
the contracting officer.
    (2) Identify the vessel and the foreign government in the 
solicitation and job order.

[56 FR 36345, July 31, 1991, as amended at 70 FR 35544, June 21, 2005]



Sec. 217.7103  Master agreements and job orders.



Sec. 217.7103-1  Content and format of master agreements.

    Follow the procedures at PGI 217.7103-1 for preparation of master 
agreements.

[71 FR 27642, May 12, 2006]



Sec. 217.7103-2  Period of agreement.

    (a) Master agreements remain in effect until canceled by either the 
contractor or the contracting officer.
    (b) Master agreements can be canceled by either the contractor or 
the contracting officer by giving 30 days written notice to the other.
    (c) Cancellation of a master agreement does not affect the rights 
and liabilities under any job order existing at the time of 
cancellation. The contractor must continue to perform all work covered 
by any job order issued before the effective date of cancellation of the 
master agreement.



Sec. 217.7103-3  Solicitations for job orders.

    (a) When a requirement arises within the United States or its 
outlying areas for the type of work covered by the master agreement, 
solicit offers from prospective contractors that--
    (1) Previously executed a master agreement; or
    (2) Have not previously executed a master agreement, but possess the 
necessary qualifications to perform the work and agree to execute a 
master agreement before award of a job order.
    (b) Follow the procedures at PGI 217.7103-3 when preparing 
solicitations for job orders.

[56 FR 36345, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998; 
63 FR 56290, Oct. 21, 1998; 70 FR 35545, June 21, 2005; 71 FR 27642, May 
12, 2006]



Sec. 217.7103-4  Emergency work.

    (a) The contracting officer, without soliciting offers, may issue a 
written job order to a contractor that has previously executed a master 
agreement when--
    (i) Delay in the performance of necessary repair work would endanger 
a vessel, its cargo or stores; or
    (ii) Military necessity requires immediate work on a vessel.
    (b) Follow the procedures at PGI 217.7103-4 when processing this 
type of undefinitized contract action.

[56 FR 36345, July 31, 1991. Redesignated and amended at 71 FR 27643, 
May 12, 2006]

[[Page 98]]



Sec. 217.7103-5  Repair costs not readily ascertainable.

    Follow the procedures at PGI 217.7103-5 if the nature of any repairs 
is such that their extent and probable cost cannot be ascertained 
readily.

[71 FR 27643, May 12, 2006]



Sec. 217.7103-6  Modification of master agreements.

    (a) Review each master agreement at least annually before the 
anniversary of its effective date and revise it as necessary to conform 
to the requirements of the FAR and DFARS. Statutory or other mandatory 
changes may require review and revision earlier than one year.
    (b) A master agreement shall be changed only by modifying the master 
agreement itself. It shall not be changed through a job order.
    (c) A modification to a master agreement shall not affect job orders 
issued before the effective date of the modification.

[63 FR 11529, Mar. 9, 1998. Redesignated at 71 FR 27643, May 12, 2006]



Sec. 217.7104  Contract clauses.

    (a) Use the following clauses in solicitations for, and in, master 
agreements for repair and alteration of vessels:
    (1) 252.217-7003, Changes.
    (2) 252.217-7004, Job Orders and Compensation.
    (3) 252.217-7005, Inspection and Manner of Doing Work.
    (4) 252.217-7006, Title.
    (5) 252.217-7007, Payments.
    (6) 252.217-7008, Bonds.
    (7) 252.217-7009, Default.
    (8) 252.217-7010, Performance.
    (9) 252.217-7011, Access to Vessel.
    (10) 252.217-7012, Liability and Insurance.
    (11) 252.217-7013, Guarantees.
    (12) 252.217-7014, Discharge of Liens.
    (13) 252.217-7015, Safety and Health.
    (14) 252.217-7016, Plant Protection, as applicable.
    (b)(1) Incorporate in solicitations for, and in, job orders, the 
clauses in the master agreement, and any other clauses on subjects not 
covered by the master agreement, but applicable to the job order to be 
awarded.
    (2) Use the clause at 252.217-7016, Plant Protection, in job orders 
where performance is to occur at the contractor's facility.

Subpart 217.72 [Reserved]

           Subpart 217.73_Identification of Sources of Supply



Sec. 217.7300  Scope.

    This subpart implements 10 U.S.C. 2384. It contains policy and 
procedures for requiring contractors to identify the actual manufacturer 
of supplies furnished to DoD.



Sec. 217.7301  Policy.

    Contractors shall identify their sources of supply in contracts for 
supplies. Contractor identification of sources of supply enables 
solicitation, in subsequent acquisitions, of actual manufacturers or 
other suppliers of items. This enhances competition and potentially 
avoids payment of additional costs for no significant added value.



Sec. 217.7302  Procedures.

    (a) Whenever practicable, include a requirement for contractor 
identification of sources of supply in all contracts for the delivery of 
supplies. The identification shall include--
    (1) The item's actual manufacturer or producer, or all the 
contractor's sources for the item;
    (2) The item's national stock number (if there is one);
    (3) The item identification number used by--
    (i) The actual manufacturer or producer of the item; or
    (ii) Each of the contractor's sources for the item; and
    (4) The source of any technical data delivered under the contract.
    (b) The requirement in paragraph (a) of this section does not apply 
to contracts that are--
    (1) For commercial items; or
    (2) Valued at or below the simplified acquisition threshold.

[56 FR 36345, July 31, 1991, as amended at 64 FR 2597, Jan. 15, 1999]

[[Page 99]]



Sec. 217.7303  Solicitation provision.

    (a) Use the provision at 252.217-7026, Identification of Sources of 
Supply, or one substantially the same, in all solicitations for supplies 
when the acquisition is being conducted under other than full and open 
competition, except when--
    (1) Using FAR 6.302-5;
    (2) The contracting officer already has the information required by 
the provision (e.g., the information was obtained under other 
acquisitions);
    (3) The contract is for subsistence, clothing or textiles, fuels, or 
supplies purchased and used outside the United States;
    (4) The contracting officer determines that it would not be 
practicable to require offerors/contractors to provide the information, 
e.g., nonrepetitive local purchases; or
    (5) The contracting officer determines that the exception at 
217.7302(b) applies to all items under the solicitation.
    (b) If appropriate, use the provision at 252.217-7026, 
Identification of Sources of Supply, or one substantially the same, in 
service contracts requiring the delivery of supplies.

              Subpart 217.74_Undefinitized Contract Actions



Sec. 217.7400  Scope.

    This subpart prescribes policies and procedures implementing 10 
U.S.C. 2326.



Sec. 217.7401  Definitions.

    As used in this subpart--
    (a) Contract action means an action which results in a contract.
    (1) It includes contract modifications for additional supplies or 
services.
    (2) It does not include change orders, administrative changes, 
funding modifications, or any other contract modifications that are 
within the scope and under the terms of the contract, e.g., engineering 
change proposals, value engineering change proposals, and over and above 
work requests as described in subpart 217.77.
    (b) Definitization means the agreement on, or determination of, 
contract terms, specifications, and price, which converts the 
undefinitized contract action to a definitive contract.
    (c) Qualifying proposal means a proposal containing sufficient 
information for the DoD to do complete and meaningful analyses and 
audits of the--
    (1) Information in the proposal; and
    (2) Any other information that the contracting officer has 
determined DoD needs to review in connection with the contract.
    (d) Undefinitized contract action means any contract action for 
which the contract terms, specifications, or price are not agreed upon 
before performance is begun under the action. Examples are letter 
contracts, orders under basic ordering agreements, and provisioned item 
orders, for which the price has not been agreed upon before performance 
has begun.



Sec. 217.7402  Exceptions.

    The following undefinitized contract actions (UCAs) are not subject 
to this subpart, but the contracting officer should apply the policy to 
them (and to changes under the Changes clause) to the maximum extent 
practicable--
    (a) UCAs for foreign military sales;
    (b) Purchases at or below the simplified acquisition threshold;
    (c) Special access programs;
    (d) Congressionally mandated long-lead procurement contracts.

[56 FR 36345, July 31, 1991, as amended at 61 FR 7743, Feb. 29, 1996]



Sec. 217.7403  Policy.

    DoD policy is that undefinitized contract actions shall--
    (a) Be used only when--
    (1) The negotiation of a definitive contract action is not possible 
in sufficient time to meet the Government's requirements; and
    (2) The Government's interest demands that the contractor be given a 
binding commitment so that contract performance can begin immediately.
    (b) Be as complete and definite as practicable under the particular 
circumstances.

[[Page 100]]



Sec. 217.7404  Limitations.



Sec. 217.7404-1  Authorization.

    The contracting officer shall obtain approval from the head of the 
contracting activity before--
    (a) Entering into a UCA. The request for approval must fully explain 
the need to begin performance before definitization, including the 
adverse impact on agency requirements resulting from delays in beginning 
performance.
    (b) Including requirements for non-urgent spare parts and support 
equipment in a UCA. The request should show that inclusion of the non-
urgent items is consistent with good business practices and in the best 
interest of the United States.
    (c) Modifying the scope of a UCA when performance has already begun. 
The request should show that the modification is consistent with good 
business practices and in the best interests of the United States.



Sec. 217.7404-2  Price ceiling.

    UCAs shall include a not-to-exceed price.



Sec. 217.7404-3  Definitization schedule.

    (a) UCAs shall contain definitization schedules that provide for 
definitization by the earlier of--
    (1) The date that is 180 days after issuance of the action (this 
date may be extended but may not exceed the date that is 180 days after 
the contractor submits a qualifying proposal); or
    (2) The date on which the amount of funds obligated under the 
contract action is equal to more than 50 percent of the not-to-exceed 
price.
    (b) Submission of a qualifying proposal in accordance with the 
definitization schedule is a material element of the contract. If the 
contractor does not submit a timely qualifying proposal, the contracting 
officer may suspend or reduce progress payments under FAR 32.503-6, or 
take other appropriate action.

[56 FR 36345, July 31, 1991, as amended at 60 FR 29498, June 5, 1995; 63 
FR 67803, Dec. 9, 1998]



Sec. 217.7404-4  Limitations on obligations.

    The Government shall not obligate more than 50 percent of the not-
to-exceed price before definitization. However, if a contractor submits 
a qualifying proposal before 50 percent of the not-to-exceed price has 
been obligated by the Government, then the limitation on obligations 
before definitization may be increased to no more than 75 percent (see 
232.102-70 for coverage on provisional delivery payments).

[60 FR 29498, June 5, 1995]



Sec. 217.7404-5  Exceptions.

    (a) The limitations in 217.7404-2, 217.7404-3, and 217.7404-4 do not 
apply to UCAs for the purchase of initial spares.
    (b) The head of an agency may waive the limitations in 217.7404-2, 
217.7404-3, and 217.7404-4 for UCAs if the head of the agency determines 
that the waiver is necessary to support--
    (1) A contingency operation; or
    (2) A humanitarian or peacekeeping operation.

[60 FR 29498, June 5, 1995, as amended at 63 FR 67804, Dec. 9, 1998; 71 
FR 27643, May 12, 2006]



Sec. 217.7404-6  Allowable profit.

    When the final price of a UCA is negotiated after a substantial 
portion of the required performance has been completed, the head of the 
contracting activity shall ensure the profit allowed reflects--
    (a) Any reduced cost risk to the contractor for costs incurred 
during contract performance before negotiation of the final price; and
    (b) The contractor's reduced cost risk for costs incurred during 
performance of the remainder of the contract.

[56 FR 36345, July 31, 1991, as amended at 71 FR 27643, May 12, 2006]



Sec. 217.7405  Contract clauses.

    (a) Use the clause at FAR 52.216-24, Limitation of Government 
Liability, in all UCAs, solicitations associated with UCAs, basic 
ordering agreements, indefinite delivery contracts, and any other type 
of contract providing for the use of UCAs.

[[Page 101]]

    (b) Use the clause at 252.217-7027, Contract Definitization, in all 
UCAs, solicitations associated with UCAs, basic ordering agreements, 
indefinite delivery contracts, and any other type of contract providing 
for the use of UCAs. Insert the applicable information in paragraphs 
(a), (b), and (d) of the clause. If, at the time of entering into the 
UCA, the contracting officer knows that the definitive contract action 
will meet the criteria of FAR 15.403-1, 15.403-2, or 15.403-3 for not 
requiring submission of cost or pricing data, the words ``and cost or 
pricing data'' may be deleted from paragraph (a) of the clause.

[61 FR 7743, Feb. 29, 1996, as amended at 63 FR 55052, Oct. 14, 1998. 
Redesignated at 71 FR 27643, May 12, 2006]

            Subpart 217.75_Acquisition of Replenishment Parts



Sec. 217.7500  Scope of subpart.

    This subpart provides guidance on additional requirements related to 
acquisition of replenishment parts.

[56 FR 36345, July 31, 1991, as amended at 71 FR 27643, May 12, 2006]



Sec. 217.7501  Definition.

    Replenishment parts, as used in this subpart, means repairable or 
consumable parts acquired after the initial provisioning process.

[71 FR 27643, May 12, 2006]



Sec. 217.7502  General.

    Departments and agencies--
    (a) May acquire replenishment parts concurrently with production of 
the end item.
    (b) Shall provide for full and open competition when fully adequate 
drawings and any other needed data are available with the right to use 
for acquisition purposes (see part 227). However--
    (1) When data is not available for a competitive acquisition, use 
one of the procedures in PGI 217.7504.
    (2) Replenishment parts must be acquired so as to ensure the safe, 
dependable, and effective operation of the equipment. Where this 
assurance is not possible with new sources, competition may be limited 
to the original manufacturer of the equipment or other sources that have 
previously manufactured or furnished the parts as long as the action is 
justified. See 209.270 for requirements applicable to replenishment 
parts for aviation critical safety items.
    (c) Shall follow the limitations on price increases in 217.7505.

[56 FR 36345, July 31, 1991, as amended at 69 FR 55989, Sept. 17, 2004. 
Redesignated and amended at 71 FR 27643, May 12, 2006]



Sec. 217.7503  Spares acquisition integrated with production.

    Follow the procedures at PGI 217.7503 for acquiring spare parts 
concurrently with the end item.

[71 FR 27643, May 12, 2006]



Sec. 217.7504  Acquisition of parts when data is not available.

    Follow the procedures at PGI 217.7504 when acquiring parts for which 
the Government does not have the necessary data.

[71 FR 27643, May 12, 2006]



Sec. 217.7505  Limitations on price increases.

    This section provides implementing guidance for section 1215 of 
Public Law 98-94 (10 U.S.C. 2452 note).
    (a) The contracting officer shall not award, on a sole source basis, 
a contract for any centrally managed replenishment part when the price 
of the part has increased by 25 percent or more over the most recent 12-
month period.
    (1) Before computing the percentage difference between the current 
price and the prior price, adjust for quantity, escalation, and other 
factors necessary to achieve comparability.
    (2) Departments and agencies may specify an alternate percentage or 
percentages for contracts at or below the simplified acquisition 
threshold.
    (b) The contracting officer may award a contract for a part, the 
price of which exceeds the limitation in paragraph (a) of this section, 
if the contracting officer certifies in writing to the head of the 
contracting activity before award that--

[[Page 102]]

    (1) The contracting officer has evaluated the price of the part and 
concluded that the price increase is fair and reasonable; or
    (2) The national security interests of the United States require 
purchase of the part despite the price increase.
    (c) The fact that a particular price has not exceeded the limitation 
in paragraph (a) of this section does not relieve the contracting 
officer of the responsibility for obtaining a fair and reasonable price.
    (d) Contracting officers may include a provision in sole source 
solicitations requiring that the offeror supply with its proposal, price 
and quantity data on any government orders for the replenishment part 
issued within the most recent 12 months.

[56 FR 36345, July 31, 1991, as amended at 64 FR 2598, Jan. 15, 1999. 
Redesignated at 71 FR 27643, May 12, 2006]



Sec. 217.7506  Spare parts breakout program.

    See PGI 217.7506 and DoD 4140.1-R, DoD Supply Chain Materiel 
Management Regulation, Chapter 8, Section C8.3, for spare parts breakout 
requirements.

[71 FR 27643, May 12, 2006]

         Subpart 217.76_Contracts with Provisioning Requirements



Sec. 217.7601  Provisioning.

    (a) Follow the procedures at PGI 217.7601 for contracts with 
provisioning requirements.
    (b) For technical requirements of provisioning, see DoD 4140.1-R, 
DoD Supply Chain Materiel Management Regulation, Chapter 2, Section 
C2.2.

[71 FR 27643, May 12, 2006]

                   Subpart 217.77_Over and Above Work



Sec. 217.7701  Procedures.

    Follow the procedures at PGI 217.7701 when acquiring over and above 
work.

[71 FR 27643, May 12, 2006]



Sec. 217.7702  Contract clause.

    Use the clause at 252.217-7028, Over and Above Work, in 
solicitations and contracts containing requirements for over and above 
work, except as provided for in subpart 217.71.

 Subpart 217.78_Contracts or Delivery Orders Issued by a Non-DoD Agency

    Source: 70 FR 29642, May 24, 2005, unless otherwise noted.



Sec. 217.7800  Scope of subpart.

    This subpart--
    (a) Implements Section 854 of the National Defense Authorization Act 
for Fiscal Year 2005 (Public Law 108-375); and
    (b) Prescribes policy for the acquisition of supplies and services 
through the use of contracts or orders issued by non-DoD agencies.



Sec. 217.7801  Definitions.

    As used in this subpart--
    Assisted acquisition means a contract awarded or a task or delivery 
order placed on behalf of DoD by a non-DoD agency.
    Direct acquisition means a task or delivery order placed by a DoD 
official under a contract awarded by a non-DoD agency.



Sec. 217.7802  Policy.

    Departments and agencies shall establish and maintain procedures for 
reviewing and approving orders placed for supplies and services under 
non-DoD contracts, whether through direct acquisition or assisted 
acquisition, when the amount of the order exceeds the simplified 
acquisition threshold. These procedures shall include--
    (a) Evaluating whether using a non-DoD contract for the acquisition 
is in the best interest of DoD. Factors to be considered include--
    (1) Satisfying customer requirements;
    (2) Schedule;
    (3) Cost effectiveness (taking into account discounts and fees); and
    (4) Contract administration (including oversight);
    (b) Determining that the tasks to be accomplished or supplies to be 
provided are within the scope of the contract to be used;

[[Page 103]]

    (c) Reviewing funding to ensure that it is used in accordance with 
appropriation limitations;
    (d) Providing unique terms, conditions, and requirements to the 
assisting agency for incorporation into the order or contract as 
appropriate to comply with all applicable DoD-unique statutes, 
regulations, directives, and other requirements; and
    (e) Collecting and reporting data on the use of assisted acquisition 
for analysis. Follow the reporting requirements at PGI 217.7802.

[70 FR 29642, May 24, 2005, as amended at 71 FR 14104, Mar. 21, 2006]

[[Page 104]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 219_SMALL BUSINESS PROGRAMS

Sec.

Sec. 219.000 Scope of part.

Sec. 219.001 Definitions.

                         Subpart 219.2_Policies


Sec. 219.201 General policy.

Sec. 219.202 Specific policies.

Sec. 219.202-1 Encouraging small business participation in acquisitions.

Sec. 219.202-5 Data collection and reporting requirements.

    Subpart 219.4_Cooperation With the Small Business Administration


Sec. 219.401 General.

               Subpart 219.5_Set-Asides for Small Business


Sec. 219.502 Setting aside acquisitions.

Sec. 219.502-1 Requirements for setting aside acquisitions.

Sec. 219.502-2 Total set-asides.

Sec. 219.502-3 Partial set-asides.

Sec. 219.505 Rejecting Small Business Administration recommendations.

                Subpart 219.6_Certificates of Competency


Sec. 219.602 Procedures.

Sec. 219.602-1 Referral.

Sec. 219.602-3 Resolving differences between the agency and the Small 
          Business Administration.

         Subpart 219.7_The Small Business Subcontracting Program


Sec. 219.702 Statutory requirements.

Sec. 219.703 Eligibility requirements for participating in the program.

Sec. 219.704 Subcontracting plan requirements.

Sec. 219.705 Responsibilities of the contracting officer under the 
          subcontracting assistance program.

Sec. 219.705-2 Determining the need for a subcontracting plan.

Sec. 219.705-4 Reviewing the subcontracting plan.

Sec. 219.706 Responsibilities of the cognizant administrative 
          contracting officer.

Sec. 219.708 Solicitation provisions and contract clauses.

 Subpart 219.8_Contracting With the Small Business Administration (The 
                              8(a) Program)


Sec. 219.800 General.

Sec. 219.803 Selecting acquisitions for the 8(a) Program.

Sec. 219.804 Evaluation, offering, and acceptance.

Sec. 219.804-1 Agency evaluation.

Sec. 219.804-2 Agency offering.

Sec. 219.804-3 SBA acceptance.

Sec. 219.805 Competitive 8(a).

Sec. 219.805-1 General.

Sec. 219.805-2 Procedures.

Sec. 219.806 Pricing the 8(a) contract.

Sec. 219.808 Contract negotiations.

Sec. 219.808-1 Sole source.

Sec. 219.811 Preparing the contracts.

Sec. 219.811-1 Sole source.

Sec. 219.811-2 Competitive.

Sec. 219.811-3 Contract clauses.

Sec. 219.812 Contract administration.

   Subpart 219.10_Small Business Competitiveness Demonstration Program


Sec. 219.1005 Applicability.

Sec. 219.1007 Procedures.

  Subpart 219.11_Price Evaluation Adjustments for Small Disadvantaged 
                            Business Concerns


Sec. 219.1102 Applicability.

    Subpart 219.12_Small Disadvantaged Business Participation Program


Sec. 219.1203 Incentive subcontracting with small disadvantaged business 
          concerns.

Sec. 219.1204 Solicitation provisions and contract clauses.

   Subpart 219.13_Historically Underutilized Business Zone (HUBZone) 
                                 Program


Sec. 219.1307 Price evaluation preference for HUBZone small business 
          concerns.

Subpart 219.70 [Reserved]

               Subpart 219.71_Pilot Mentor-Protege Program


Sec. 219.7100 Scope.

Sec. 219.7101 Policy.

Sec. 219.7102 General.

Sec. 219.7103 Procedures.

Sec. 219.7103-1 General.

Sec. 219.7103-2 Contracting officer responsibilities.

Sec. 219.7104 Developmental assistance costs eligible for reimbursement 
          or credit.

Sec. 219.7105 Reporting.

[[Page 105]]


Sec. 219.7106 Performance reviews.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36353, July 31, 1991, unless otherwise noted.



Sec. 219.000  Scope of part.

    This part also implements 10 U.S.C. 2323, which sets a goal for DoD 
for each of fiscal years 1987 through 2009 to--
    (1) Award five percent of contract and subcontract dollars to small 
disadvantaged business (SDB) concerns, historically black colleges and 
universities (HBCUs), and minority institutions (MIs) (See part 226 for 
policy/procedures on HBCU/MIs); and
    (2) Maximize the number of such entities in DoD contracting and 
subcontracting.

[56 FR 36353, July 31, 1991, as amended at 59 FR 27670, May 27, 1994; 64 
FR 62987, Nov. 18, 1999; 68 FR 15381, Mar. 31, 2003; 71 FR 39008, July 
11, 2006]



Sec. 219.001  Definitions.

    Small disadvantaged business concern is defined:
    (1) At FAR 52.219-23(a) (i.e., a firm is considered a small 
disadvantaged business (SDB) concern by receiving certification by the 
Small Business Administration and meeting the other listed criteria), 
except as specified in paragraph (2) of this definition.
    (2) At FAR 52.219-23(a) or 52.219-1(b)(2) for the following purposes 
(i.e., a firm is considered an SDB concern by either receiving 
certification by the Small Business Administration and meeting the other 
listed criteria or self-representing its status for general statistical 
purposes):
    (i) A higher customary progress payment rate for SDB concerns (see 
232.501-1(a)(i) and 252.232-7004(c)).
    (ii) A lower threshold for inclusion of customary progress payments 
in contracts with SDB concerns (see 232.502-1).
    (iii) The prompt payment policy for SDB concerns in 232. 903 and 
232.905(2).
    (iv) Reporting contract actions with SDB concerns (``Type of 
Business'' on the DD Form 350, Individual Contracting Action Report (see 
253.204-70(d)(5)(i)(A)) or ``Small Disadvantaged Business (SDB) 
Actions'' on the DD Form 1057, Monthly Contracting Summary of Actions 
$25,000 or Less (see 253.204-71(g)(2)).

[63 FR 64429, Nov. 20, 1999]

                         Subpart 219.2_Policies



Sec. 219.201  General policy.

    (d) For the defense agencies, the director of the Office of Small 
and Disadvantaged Business Utilization must be appointed by, be 
responsible to, and report directly to the director or deputy director 
of the defense agency.
    (8) The responsibility for assigning small business technical 
advisors is delegated to the head of the contracting activity.
    (10) Contracting activity small business specialists perform this 
function by--
    (A) Reviewing and making recommendations for all acquisitions 
(including orders placed against Federal Supply Schedule contracts) over 
$10,000, except those under $100,000 that are totally set aside for 
small business concerns in accordance with FAR 19.502-2. Follow the 
procedures at PGI 219.201(d)(10) regarding such reviews;
    (B) Making the review before issuance of the solicitation or 
contract modification and documenting it on DD Form 2579, Small Business 
Coordination Record; and
    (C) Referring recommendations that have been rejected by the 
contracting officer to the Small Business Administration (SBA) 
procurement center representative. If an SBA procurement center 
representative is not assigned, see FAR 19.402(a).
    (11) Also conduct annual reviews to assess--
    (A) The extent of consolidation of contract requirements that has 
occurred (see 207.170); and
    (B) The impact of those consolidations on the availability of small 
business concerns to participate in procurements as both contractors and 
subcontractors.
    (e) For information on the appointment and functions of small 
business specialists, see PGI 219.201(e).
    (f) The Directors, Office of Small and Disadvantaged Business 
Utilization, of the military departments and defense

[[Page 106]]

agencies are responsible for determining whether use of the price 
evaluation adjustment to achieve a small disadvantaged business goal has 
caused non-SDB firms in a particular North American Industry 
Classification System Industry Subsector to bear an undue burden or 
other inappropriate effect. A copy of each determination shall be 
forwarded to the Office of Small and Disadvantaged Business Utilization, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics), simultaneously with submittal to the Office of Federal 
Procurement Policy.

[56 FR 36353, July 31, 1991, as amended at 63 FR 41973, Aug. 6, 1998; 64 
FR 2598, Jan. 15, 1999; 65 FR 39705, June 27, 2000; 65 FR 50149, Aug. 
17, 2000; 65 FR 63807, Oct. 25, 2000; 69 FR 55987, Sept. 17, 2004; 71 FR 
44927, Aug. 8, 2006]



Sec. 219.202  Specific policies.



Sec. 219.202-1  Encouraging small business participation in 
          acquisitions.

    The DoD will maximize the use of small business concerns as planned 
producers in the Industrial Readiness Planning Program.



Sec. 219.202-5  Data collection and reporting requirements.

    Determine the premium percentage to be entered in Item D4C of the 
Individual Contracting Action Report (DD Form 350), (see 253.204-70), as 
follows:
    (1) For small disadvantaged business or historically black college 
and university/minority institution set-asides, divide the difference 
between the fair market price and the award price by the fair market 
price.
    (2) For price evaluation adjustment awards (see FAR Subpart 19.11), 
divide the difference between the low responsive offer and the award 
price by the low responsive offer.
    (3) For partial small business set-asides with preferential 
consideration for small disadvantaged business concerns, divide the 
difference between the award price on the non-set-aside portion and the 
award price on the set-aside portion by the award price on the non-set-
aside portion.
    (b) Within 60 days after the end of each fiscal year, departments 
and agencies shall submit the report to the Secretary of Defense, who 
will report to the SBA on behalf of all DoD departments and agencies. 
Reports must include--
    (i) Justification for failure to meet goals established by the 
Office of the Secretary of Defense; and
    (ii) Planned actions for increasing participation by such firms in 
future contract awards.

[56 FR 36353, July 31, 1991, as amended at 63 FR 41973, Aug. 6, 1998; 65 
FR 63804, Oct. 25, 2000]

    Subpart 219.4_Cooperation With the Small Business Administration



Sec. 219.401  General.

    (b) The contracting activity small business specialist is the 
primary activity focal point for interface with the SBA.

               Subpart 219.5_Set-Asides for Small Business



Sec. 219.502  Setting aside acquisitions.



Sec. 219.502-1  Requirements for setting aside acquisitions.

    Do not set aside acquisitions for--
    (1) Supplies which were developed and financed, in whole or in part, 
by Canadian sources under the U.S.-Canadian Defense Development Sharing 
Program; or
    (2) Architect-engineer services for military construction or family 
housing projects of $300,000 or more (10 U.S.C. 2855), including 
indefinite delivery and indefinite quantity contracts if the value of 
all anticipated orders is expected to total $300,000 or more.

[58 FR 28465, May 13, 1993, as amended at 69 FR 31909, June 8, 2004]



Sec. 219.502-2  Total set-asides.

    (a) Unless the contracting officer determines that the criteria for 
set-aside cannot be met, set aside for small business concerns 
acquisitions for--
    (i) Construction, including maintenance and repairs, under $2 
million;
    (ii) Dredging under $1 million; and

[[Page 107]]

    (iii) Architect-engineer services for military construction or 
family housing projects of under $300,000.

[58 FR 28465, May 13, 1993, as amended at 69 FR 31909, June 8, 2004]



Sec. 219.502-3  Partial set-asides.

    (c)(1) If the North American Industry Classification System Industry 
Subsector of the acquisition is one in which use of a price evaluation 
adjustment for small disadvantaged business concerns is currently 
authorized (see FAR 19.201(b)), apply the adjustment to the non-set-
aside portion.

[65 FR 50149, Aug. 17, 2000]



Sec. 219.505  Rejecting Small Business Administration recommendations.

    (b) The designee shall be at a level no lower than chief of the 
contracting office.

                Subpart 219.6_Certificates of Competency



Sec. 219.602  Procedures.



Sec. 219.602-1  Referral.

    When making a nonresponsibility determination on a small business 
concern, the contracting officer shall notify the contracting activity's 
small business specialist.

[58 FR 28465, May 13, 1993, as amended at 60 FR 40107, Aug. 7, 1995]



Sec. 219.602-3  Resolving differences between the agency and the Small 
          Business Administration.

    (c)(i) If the contracting officer believes the agency should appeal, 
the contracting officer shall immediately inform the departmental 
director of the Office of Small and Disadvantaged Business Utilization, 
and send the director, through departmental channels--
    (A) A request for appeal, summarizing the issues. The request must 
be sent to arrive within five working days after receipt of the SBA 
Headquarters' written position.
    (B) An appeal file, documenting the contracting activity's position. 
The file must be sent to arrive within five working days after 
transmission of the request.
    (ii) The departmental director will determine whether the agency 
will appeal and will notify the SBA of the agency's intent.

[56 FR 36353, July 31, 1991, as amended at 62 FR 34122, June 24, 1997]

         Subpart 219.7_The Small Business Subcontracting Program



Sec. 219.702  Statutory requirements.

    (a) Section 834 of Public Law 101-189, as amended (15 U.S.C. 637 
note), requires DoD to establish a test program to determine whether 
comprehensive subcontracting plans on a corporate, division, or plant-
wide basis will reduce administrative burdens while enhancing 
subcontracting opportunities for small and small disadvantaged business 
concerns.
    (i) The test program--
    (A) Will be conducted--
    (1) From October 1, 1990, through September 30, 2010;
    (2) In accordance with the DoD test plan, ``Test Program for 
Negotiation of Comprehensive Small Business Subcontracting Plans''; and
    (3) By the military departments and defense agencies through 
specifically designated contracting activities; and
    (B) Permits contractors selected for participation in the test 
program by the designated contracting activities to--
    (1) Negotiate plant, division, or company-wide comprehensive 
subcontracting plans instead of individual contract subcontracting 
plans; and
    (2) Use the comprehensive plans when performing any DoD contract or 
subcontract that requires a subcontracting plan.
    (ii) During the test period, comprehensive subcontracting plans 
will--
    (A) Be negotiated on an annual basis by the designated contracting 
activities;
    (B) Be incorporated by the contractors' cognizant contract 
administration activity into all of the contractors' active DoD 
contracts that require a plan;
    (C) Be accepted for use by contractors participating in the test, 
whether performing at the prime or subcontract level; and

[[Page 108]]

    (D) Not be subject to application of liquidated damages during the 
period of the test program (Section 402, Pub. L. 101-574).

[56 FR 36353, July 31, 1991, as amended at 60 FR 35668, July 10, 1995; 
61 FR 39900, July 31, 1996; 63 FR 14640, Mar. 26, 1998; 64 FR 62987, 
Nov. 18, 1999; 70 FR 14574, Mar. 23, 2005]



Sec. 219.703  Eligibility requirements for participating in the program.

    (a) Qualified nonprofit agencies for the blind and other severely 
disabled, that have been approved by the Committee for Purchase from 
People Who Are Blind or Severely Disabled under the Javits-Wagner-O'Day 
Act (41 U.S.C. 46-48), are eligible to participate in the program as a 
result of 10 U.S.C. 2410d and Section 9077 of Pub. L. 102-396 and 
similar sections in subsequent Defense appropriations acts. Under this 
authority, subcontracts awarded to such entities may be counted toward 
the prime contractor's small business subcontracting goal.
    (2)(A) To be eligible as an SDB subcontractor, a concern must meet 
the definition in 219.001.
    (B) To be eligible as a historically black college or university or 
minority institution subcontractor, such entity must meet the definition 
in the clause at 252.219-7003, Small, Small Disadvantaged and Women-
Owned Small Business Subcontracting Plan (DoD Contracts).
    (b) A contractor may also rely on the written representation as to 
status of--
    (i) A historically black college or university or minority 
institution; or
    (ii) A qualified nonprofit agency for the blind or other severely 
disabled approved by the Committee for Purchase from People Who Are 
Blind or Severely Disabled.

[57 FR 42630, Sept. 15, 1992, as amended at 58 FR 28465, May 13, 1993; 
60 FR 13075, Mar. 10, 1995; 60 FR 41157, Aug. 11, 1995; 60 FR 61596, 
Nov. 30, 1995; 61 FR 50535, Sept. 26, 1996; 63 FR 11530, Mar. 9, 1998; 
63 FR 41974, Aug. 6, 1998; 64 FR 51076, Sept. 21, 1999; 64 FR 62986, 
Nov. 18, 1999]



Sec. 219.704  Subcontracting plan requirements.

    (a)(1) The goal for use of small disadvantaged business concerns 
shall include subcontracts with historically black colleges and 
universities and minority institutions (see subpart 226.70), in addition 
to subcontracts with small disadvantaged business concerns. Subcontracts 
with historically black colleges and universities and minority 
institutions do not have to be included in the small disadvantaged 
business goal in commercial items subcontracting plans.
    (4) In those subcontracting plans which specifically identify small, 
small disadvantaged, and women-owned small businesses, prime contractors 
shall notify the administrative contracting officer of any substitutions 
of firms that are not small, small disadvantaged, or women-owned small 
businesses for the firms listed in the subcontracting plan. 
Notifications shall be in writing and shall occur within a reasonable 
period of time after award of the subcontract. Contractor-specified 
formats shall be acceptable.

[60 FR 61596, Nov. 30, 1995, as amended at 61 FR 18687, Apr. 29, 1996]



Sec. 219.705  Responsibilities of the contracting officer under the 
          subcontracting assistance program.



Sec. 219.705-2  Determining the need for a subcontracting plan.

    (d) See 215.304 for unique DoD requirements.

[59 FR 27670, May 27, 1994, as amended at 64 FR 51076, Sept. 21, 1999]



Sec. 219.705-4  Reviewing the subcontracting plan.

    (d) Challenge any subcontracting plan that does not contain positive 
goals and consider the extent to which an offeror plans to use 
competition restricted to historically black colleges and universities 
or minority institutions. A small disadvantaged business goal of less 
than five percent must be approved one level above the contracting 
officer.

[56 FR 36353, July 31, 1991, as amended at 63 FR 41974, Aug. 6, 1998; 69 
FR 67855, Nov. 22, 2004]

[[Page 109]]



Sec. 219.706  Responsibilities of the cognizant administrative 
          contracting officer.

    (a)(i) The contract administration office also is responsible for 
reviewing, evaluating, and approving master subcontracting plans.
    (ii) The small business specialist supports the administrative 
contracting officer in evaluating a contractor's performance and 
compliance with its subcontracting plan.



Sec. 219.708  Solicitation provisions and contract clauses.

    (b)(1)(A) Use the clause at 252.219-7003, Small, Small Disadvantaged 
and Women-Owned Small Business Subcontracting Plan (DoD Contracts), in 
solicitations and contracts that contain the clause at FAR 52.219-9, 
Small Business Subcontracting Plan.
    (B) In contracts with contractors which have comprehensive 
subcontracting plans approved under the test program described in 
219.702(a), use the clause at 252.219-7004, Small, Small Disadvantaged 
and Women-Owned Small Business Subcontracting Plan (Test Program), 
instead of the clauses at 252.219-7003, Small, Small Disadvantaged and 
Women-Owned Small Business Subcontracting Plan (DoD Contracts), and FAR 
52.219-9, Small Business Subcontracting Plan.
    (2) In contracts with contractors that have comprehensive 
subcontracting plans approved under the test program described in 
219.702(a), do not use the clause at FAR 52.219-16, Liquidated Damages--
Subcontracting Plan.
    (c)(1) Do not use the clause at FAR 52.219-10, Incentive 
Subcontracting Program, in contracts with contractors that have 
comprehensive subcontracting plans approved under the test program 
described in 219.702(a).

[56 FR 36353, July 31, 1991, as amended at 56 FR 67213, Dec. 30, 1991; 
61 FR 39901, July 31, 1996; 63 FR 64429, Nov. 20, 1998; 65 FR 52952, 
Aug. 31, 2000; 67 FR 49252, July 30, 2002]

 Subpart 219.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



Sec. 219.800  General.

    (a) By Partnership Agreement (PA) dated February 1, 2002, between 
the Small Business Administration (SBA) and the Department of Defense 
(DoD), the SBA delegated to the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) its authority under paragraph 8(a)(1)(A) of 
the Small Business Act (15 U.S.C. 637(a)) to enter into 8(a) prime 
contracts, and its authority under 8(a)(1)(B) of the Small Business Act 
to award the performance of those contracts to eligible 8(a) Program 
participants. However, the SBA remains the prime contractor on all 8(a) 
contracts, continues to determine eligibility of concerns for contract 
award, and retains appeal rights under FAR 19.810. The SBA delegates 
only the authority to sign contracts on its behalf. Consistent with the 
provisions of this subpart, this authority is hereby redelegated to DoD 
contracting officers within the United States or its outlying areas, to 
the extent that it is consistent with any dollar or other restrictions 
established in individual warrants. This authority expires on September 
30, 2006.
    (b) Contracts awarded under the PA may be awarded directly to the 
8(a) participant on either a sole source or competitive basis. An SBA 
signature on the contract is not required.
    (c) Notwithstanding the PA, the contracting officer may elect to 
award a contract pursuant to the provisions of FAR Subpart 19.8.

[67 FR 11436, Mar. 14, 2002, as amended at 69 FR 58354, Sept. 30, 2004; 
70 FR 35545, June 21, 2005; 70 FR 57191, Sept. 30, 2005]



Sec. 219.803  Selecting acquisitions for the 8(a) Program.

    (b) Contracting activities should respond to SBA requests for 
contract support within 30 calendar days after receipt.
    (c) Before considering a small business set-aside, review the 
acquisition for offering under the 8(a) Program.

[56 FR 36353, July 31, 1991, as amended at 63 FR 41974, Aug. 6, 1998]

[[Page 110]]



Sec. 219.804  Evaluation, offering, and acceptance.



Sec. 219.804-1  Agency evaluation.

    (f) The 8(a) firms should be offered the opportunity to give a 
technical presentation.

[63 FR 41974, Aug. 6, 1998]



Sec. 219.804-2  Agency offering.

    (1) For requirements processed under the PA cited in 219.800 (but 
see paragraph (2) of this subsection for procedures related to purchase 
orders that do not exceed the simplified acquisition threshold), the 
notification to the SBA shall clearly indicate that the requirement is 
being processed under the PA. All notifications should be submitted in 
writing, using facsimile or electronic mail, when possible, and shall 
specify that--
    (i) Under the PA, an SBA acceptance or rejection of the offering is 
required within 5 working days of receipt of the offering; and
    (ii)(A) For sole source requirements, an SBA acceptance shall 
include a size verification and a determination of the 8(a) firm's 
program eligibility, and, upon acceptance, the contracting officer will 
solicit a proposal, conduct negotiations, and make award directly to the 
8(a) firm; or
    (B) For competitive requirements, upon acceptance, the contracting 
officer will solicit offers, conduct source selection, and, upon receipt 
of an eligibility verification, award a contract directly to the 
selected 8(a) firm.
    (2) Under the PA cited in 219.800, no separate agency offering or 
SBA acceptance is needed for requirements that are issued under purchase 
orders that do not exceed the simplified acquisition threshold. After an 
8(a) contractor has been identified, the contracting officer shall 
establish the prices, terms, and conditions with the 8(a) contractor and 
shall prepare a purchase order consistent with the procedures in Part 
213 and FAR Part 13, including the applicable clauses required by this 
subpart. No later than the day that the purchase order is provided to 
the 8(a) contractor, the contracting officer shall provide to the 
cognizant SBA Business Opportunity Specialist, using facsimile, 
electronic mail, or any other means acceptable to the SBA district 
office--
    (i) A copy of the signed purchase order; and
    (ii) A notice stating that the purchase order is being processed 
under the PA. The notice also shall indicate that the 8(a) contractor 
will be deemed eligible for award and will automatically begin work 
under the purchase order unless, within 2 working days after SBA's 
receipt of the purchase order, the 8(a) contractor and the contracting 
officer are notified that the 8(a) contractor is ineligible for award.
    (3) The notification to SBA shall identify any joint venture 
proposed for performance of the contract. SBA shall approve a joint 
venture before award of an 8(a) contract involving the joint venture.
    (4) For competitive requirements for construction to be performed 
overseas, submit the notification to SBA Headquarters.

[67 FR 11437, Mar. 14, 2002, as amended at 67 FR 49256, July 30, 2002]



Sec. 219.804-3  SBA acceptance.

    For requirements processed under the PA cited in 219.800, SBA's 
acceptance is required within 5 working days (but see 219.804-2(2) for 
purchase orders that do not exceed the simplified acquisition 
threshold).

[63 FR 33587, June 19, 1998, as amended at 67 FR 11436, Mar. 14, 2002]



Sec. 219.805  Competitive 8(a).



Sec. 219.805-1  General.

    (b)(2)(A) For acquisitions that exceed the competitive threshold, 
the SBA also may accept the requirement for a sole source 8(a) award on 
behalf of a small business concern owned by a Native Hawaiian 
Organization (Section 8020 of Pub. L. 109-148).
    (B) Native Hawaiian Organization, as used in this subsection and as 
defined by 15 U.S.C. 637(a)(15) and 13 CFR 124.3, means any community 
service organization serving Native Hawaiians in the State of Hawaii--
    (1) That is a not-for-profit organization chartered by the State of 
Hawaii;
    (2) That is controlled by Native Hawaiians; and

[[Page 111]]

    (3) Whose business activities will principally benefit such Native 
Hawaiians.

[70 FR 43073, July 26, 2005, as amended at 71 FR 34832, June 16, 2006]



Sec. 219.805-2  Procedures.

    (c) For requirements processed under the PA cited in 219.800--
    (i) For sealed bid and negotiated acquisitions, the SBA will 
determine the eligibility of the firms and will advise the contracting 
officer within 2 working days after its receipt of a request for an 
eligibility determination; and
    (ii) For negotiated acquisitions, the contracting officer may submit 
a request for an eligibility determination on all firms in the 
competitive range if discussions are to be conducted, or on all firms 
with a realistic chance of award if no discussions are to be conducted.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11436, Mar. 14, 2002]



Sec. 219.806  Pricing the 8(a) contract.

    For requirements processed under the PA cited in 219.800--
    (1) The contracting officer shall obtain cost or pricing data from 
the 8(a) contractor, if required by FAR subpart 15.4; and
    (2) SBA concurrence in the negotiated price is not required. 
However, except for purchase orders not exceeding the simplified 
acquisition threshold, the contracting officer shall notify the SBA 
prior to withdrawing a requirement from the 8(a) Program due to failure 
to agree on price or other terms and conditions.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002; 
67 FR 49256, July 30, 2002]



Sec. 219.808  Contract negotiations.



Sec. 219.808-1  Sole source.

    For requirements processed under the PA cited in 219.800--
    (1) The agency may negotiate directly with the 8(a) contractor. The 
contracting officer is responsible for initiating negotiations;
    (2) The 8(a) contractor is responsible for negotiating within the 
time established by the contracting officer;
    (3) If the 8(a) contractor does not negotiate within the established 
time and the agency cannot allow additional time, the contracting 
officer may, after notifying the SBA, proceed with the acquisition from 
other sources;
    (4) If requested by the 8(a) contractor, the SBA may participate in 
negotiations; and
    (5) SBA approval of the contract is not required.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002]



Sec. 219.811  Preparing the contracts.



Sec. 219.811-1  Sole source.

    (a) Awards under the PA cited in 219.800 may be made directly to the 
8(a) contractor and, except as provided in paragraph (b) of this 
subsection and in 219.811-3, award documents shall be prepared in 
accordance with procedures established for non-8(a) contracts, using any 
otherwise authorized award forms. The ``Issued by'' block shall identify 
the awarding DoD contracting office. The contractor's name and address 
shall be that of the 8(a) participant.
    (b) Use the following alternative procedures for direct awards made 
under the PA cited in 219.800:
    (i) Cite 10 U.S.C. 2304(c)(5) as the authority for use of other than 
full and open competition;
    (ii) Include the clause at 252.219-7009, which allows for direct 
award to the 8(a) contractor, and identify the cognizant SBA district 
office for the 8(a) contractor;
    (iii) No SBA contract number is required; and
    (iv) Do not require an SBA signature on the award document.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002; 
67 FR 49256, July 30, 2002]



Sec. 219.811-2  Competitive.

    Awards made under the PA cited in 219.800 shall be prepared in 
accordance with 219.811-1.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002; 
67 FR 49256, July 30, 2002]

[[Page 112]]



Sec. 219.811-3  Contract clauses.

    (1) Use the clause at 252.219-7009, Section 8(a) Direct Award, 
instead of the clauses at FAR 52.219-11, Special 8(a) Contract 
Conditions, FAR 52.219-12, Special 8(a) Subcontract Conditions, and FAR 
52.219-17, Section 8(a) Award, in solicitations and contracts processed 
in accordance with the PA cited in 219.800.
    (2) Use the clause at FAR 52.219-18, Notification of Competition 
Limited to Eligible 8(a) Concerns, with 252.219-7010, Alternate A, in 
solicitations and contracts processed in accordance with the PA cited in 
219.800.
    (3) Use the clause at 252.219-7011, Notification to Delay 
Performance, in solicitations and purchase orders issued in accordance 
with 219.804-2(2).

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002]



Sec. 219.812  Contract administration.

    (d) Awards under the PA cited in 219.800 are subject to Section 407 
of Pub. L. 100-656. These contracts include the clause at 252.219-7009, 
Section 8(a) Direct Award, which requires the 8(a) contractor to notify 
the SBA and the contracting officer when ownership of the firm is being 
transferred.

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002]

   Subpart 219.10_Small Business Competitiveness Demonstration Program



Sec. 219.1005  Applicability.

    (a)(i) Architect-engineering services in support of military 
construction projects or military family housing projects are exempt 
from the Small Business Competitiveness Demonstration Program, except 
for the emerging small business (ESB) set-aside requirements. 
Accordingly, these shall--
    (A) Be reviewed for possible award under the 8(a) Program regardless 
of dollar value.
    (B) Not be set aside for small business if the estimated value is 
$300,000 or more (including indefinite delivery-indefinite quantity 
contracts if the value of all anticipated orders exceeds $300,000).
    (C) Be considered for ESB set-aside if the estimated value is both 
less than the emerging small business reserve amount and less than 
$300,000.
    (D) Be considered for small business set-aside if the estimated 
value is less than $300,000, regardless of whether small business set-
asides for other architect-engineer services are prohibited under the 
Small Business Competitiveness Demonstration Program, when an ESB set-
aside is not appropriate.
    (ii) All requirements of the Small Business Competitiveness 
Demonstration Program apply to architect-engineer services in support of 
other than military construction projects or military housing objects, 
which otherwise meet criteria in FAR subpart 19.10.
    (b) The targeted industry categories for DoD are:

------------------------------------------------------------------------
    North American Industry Classification System (NAICS)        NAICS
                         Description                              Code
------------------------------------------------------------------------
(1) Pharmaceutical Preparation Manufacturing.................     325412
(2) Ammunition (except Small Arms) Manufacturing.............     332993
(3) Other Ordnance and Accessories Manufacturing.............     332995
(4) Turbine and Turbine Generator Set Unit Manufacturing.....     333611
(5) Aircraft Engine and Engine Parts Manufacturing (including     336412
 Research and Development)...................................
(6) Guided Missile and Space Vehicle Manufacturing (including     336414
 Research and Development)...................................
(7) Other Guided Missile and Space Vehicle Parts and              336419
 Auxiliary Equipment Manufacturing (including Research and
 Development)................................................
(8) Military Armored Vehicle, Tank and Tank Component             336992
 Manufacturing...............................................
(9) Search and Navigation System and Instrument Manufacturing     334511
(10) (i) Cellular and Other Wireless Telecommunications......     517212
    (ii) Satellite Telecommunications........................     517410
    (iii) Other Telecommunications...........................     517910
------------------------------------------------------------------------


[56 FR 36353, July 31, 1991, as amended at 59 FR 27670, May 27, 1994; 62 
FR 34122, June 24, 1997; 63 FR 41974, Aug. 6, 1998; 65 FR 50149, Aug. 
17, 2000; 66 FR 49861, Oct. 1, 2001; 68 FR 50476, Aug. 21, 2003; 69 FR 
31909, June 8, 2004]

[[Page 113]]



Sec. 219.1007  Procedures.

    (a)(2) When it is not practical to mark the face page of an award 
document, alternative means may be used to identify the contract as an 
award under the Small Business Competitiveness Demonstration Program.
    (b)(1) The Director, Small and Disadvantaged Business Utilization, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) (OUSD(AT&L)), will determine whether reinstatement of small 
business set-asides is necessary to meet the agency goal and will 
recommend reinstatement to the Director of Defense Procurement and 
Acquisition Policy (OUSD(AT&L)). Military departments and defense 
agencies shall not reinstate small business set-asides unless directed 
by the Director of Defense Procurement and Acquisition Policy.
    (d) Reporting requirements are at 204.670-2.

[65 FR 39705, June 27, 2000, as amended at 68 FR 7439, Feb. 14, 2003; 70 
FR 6374, Feb. 7, 2005]

   Subpart 219.11_Price Evaluation Adjustment for Small Disadvantaged 
                            Business Concerns



Sec. 219.1102  Applicability.

    (b) The price evaluation adjustment also shall not be used in 
acquisitions that are for commissary or exchange resale.
    (c) Also, do not use the price evaluation adjustment in acquisitions 
that use tiered evaluation of offers, until a tier is reached that 
considers offers from other than small business concerns.

[63 FR 41974, Aug. 6, 1998, as amended at 71 FR 53043, Sept. 8, 2006]

    Subpart 219.12_Small Disadvantaged Business Participation Program

    Source: 63 FR 64429, Nov. 20, 1998, unless otherwise noted.



Sec. 219.1203  Incentive subcontracting with small disadvantaged 
          business concerns.

    The contracting officer shall encourage increased subcontracting 
opportunities for SDB concerns in negotiated acquisitions by providing 
monetary incentives in the North American Industry Classification System 
Industry Subsectors for which use of an evaluation factor or subfactor 
for participation of SDB concerns is currently authorized (see FAR 
19.201(b)). Incentives for exceeding SDB subcontracting targets shall be 
paid only if an SDB subcontracting target was exceeded as a result of 
actual subcontract awards to SDBs, and not a result of developmental 
assistance credit under the Pilot Mentor-Prot[eacute]g[eacute] Program 
(see Subpart 219.71).

[63 FR 64429, Nov. 20, 1998, as amended at 65 FR 50149, Aug. 17, 2000]



Sec. 219.1204  Solicitation provisions and contract clauses.

    (c) The contracting officer shall, when contracting by negotiation, 
insert in solicitations and contracts containing the clause at FAR 
52.219-25, Small Disadvantaged Business Participation Program-
Disadvantaged Status and Reporting, a clause substantially the same as 
the clause at FAR 52.219-26, Small Disadvantaged Business Participation 
Program-Incentive Subcontracting, when authorized (see FAR 19.1203). The 
contracting officer may include an award fee provision in lieu of the 
incentive; in such cases, however, the contracting officer shall not use 
the clause at FAR 52.219-26. Do not use award fee provisions in 
contracts with contractors that have comprehensive subcontracting plans 
approved under the test program described in 219.702(a).

   Subpart 219.13_Historically Underutilized Business Zone (HUBZone) 
                                 Program



Sec. 219.1307  Price evaluation preference for HUBZone small business 
          concerns.

    (a) Also, do not use the price evaluation preference in acquisitions 
that use tiered evaluation of offers, until a tier

[[Page 114]]

is reached that considers offers from other than small business 
concerns.

[71 FR 53043, Sept. 8, 2006]

Subpart 219.70 [Reserved]

               Subpart 219.71_Pilot Mentor-Protege Program

    Source: 65 FR 6555, Feb. 10, 2000, unless otherwise noted.



Sec. 219.7100  Scope.

    This subpart implements the Pilot Mentor-Prot[eacute]g[eacute] 
Program (hereafter referred to as the ``Program'') established under 
Section 831 of the National Defense Authorization Act for Fiscal Year 
1991 (Public Law 101-510; 10 U.S.C. 2302 note). The purpose of the 
Program is to provide incentives for DoD contractors to assist protege 
firms in enhancing their capabilities and to increase participation of 
such firms in Government and commercial contracts.

[66 FR 47108, Sept. 11, 2001, as amended at 69 FR 74995, Dec. 15, 2004]



Sec. 219.7101  Policy.

    DoD policy and procedures for implementation of the Program are 
contained in Appendix I, Policy and Procedures for the DoD Pilot Mentor-
Protege Program.



Sec. 219.7102  General.

    The Program includes--
    (a) Mentor firms that are prime contractors with at least one active 
subcontracting plan negotiated under FAR Subpart 19.7 or under the DoD 
Comprehensive Subcontracting Test Program.
    (b) Protege firms that are--
    (1)(i) small disadvantaged business concerns as defined at 
219.001(1);
    (ii) Business entities owned and controlled by an Indian tribe;
    (iii) business entities owned and controlled by a Native Hawaiian 
Organization;
    (iv) Qualified organizations employing the severely disabled;
    (v) Women-owned small business concerns;
    (vi) Service-disabled veteran-owned small business concerns; or
    (vii) HUBZone small business concerns;
    (2) Eligible for receipt of Federal contracts; and
    (3) Selected by the mentor firm.
    (c) Mentor-protege agreements that establish a developmental 
assistance program for a protege firm.
    (d) Incentives that DoD may provide to mentor firms, including--
    (1) Reimbursement for developmental assistance costs through--
    (i) A separately priced contract line item on a DoD contract; or
    (ii) A separate contract, upon written determination by the 
cognizant Component Director, Small and Disadvantaged Business 
Utilization (SADBU), that unusual circumstances justify reimbursement 
using a separate contract; or
    (2) Credit toward applicable subcontracting goals, established under 
a subcontracting plan negotiated under FAR Subpart 19.7 or under the DoD 
Comprehensive Subcontracting Test Program, for developmental assistance 
costs that are not reimbursed.

[65 FR 6555, Feb. 10, 2000; 65 FR 30191, May 10, 2000, as amended at 66 
FR 47108, Sept. 11, 2001; 69 FR 74995, Dec. 15, 2004; 70 FR 29645, May 
24, 2005]



Sec. 219.7103  Procedures.



Sec. 219.7103-1  General.

    The procedures for application, acceptance, and participation in the 
Program are in Appendix I, Policy and Procedures for the DoD Pilot 
Mentor-Prot[eacute]g[eacute] Program. The Director, SADBU, of each 
military department or defense agency has the authority to approve 
contractors as mentor firms, approve mentor-prot[eacute]g[eacute] 
agreements, and forward approved mentor-prot[eacute]g[eacute] agreements 
to the contracting officer when funding is available.

[69 FR 74995, Dec. 15, 2004]



Sec. 219.7103-2  Contracting officer responsibilities.

    Contracting officers must--
    (a) Negotiate an advance agreement on the treatment of developmental 
assistance costs for either credit or reimbursement if the mentor firm 
proposes

[[Page 115]]

such an agreement, or delegate authority to negotiate to the 
administrative contracting officer (see FAR 31.109).
    (b) Modify (without consideration) applicable contract(s) to 
incorporate the clause at 252.232-7005, Reimbursement of Subcontractor 
Advance Payments--DoD Pilot Mentor-Protege Program, when a mentor firm 
provides advance payments to a protege firm under the Program and the 
mentor firm requests reimbursement of advance payments.
    (c) Modify (without consideration) applicable contract(s) to 
incorporate other than customary progress payments for protege firms in 
accordance with FAR 32.504(c) if a mentor firm provides such payments to 
a protege firm and the mentor firm requests reimbursement.
    (d) Modify applicable contract(s) to establish a contract line item 
for reimbursement of developmental assistance costs if--
    (1) A DoD program manager or the cognizant Component Director, 
SADBU, has made funds available for that purpose; and
    (2) The contractor has an approved mentor-prot[eacute]g[eacute] 
agreement.
    (e) Negotiate and award a separate contract for reimbursement of 
developmental assistance costs only if--
    (1) Funds are available for that purpose;
    (2) The contractor has an approved mentor-prot[eacute]g[eacute] 
agreement; and
    (3) The cognizant Component Director, SADBU, has made a 
determination in accordance with 219.7102(d)(1)(ii).
    (f) Not authorize reimbursement for costs of assistance furnished to 
a prot[eacute]g[eacute] firm in excess of $1,000,000 in a fiscal year 
unless a written determination from the cognizant Component Director, 
SADBU, is obtained.
    (g) Advise contractors of reporting requirements in Appendix I.
    (h) Provide a copy of the approved Mentor-Protege agreement to the 
Defense Contract Management Agency administrative contracting officer 
responsible for conducting the annual performance review (see appendix 
I, section I-113).

[65 FR 6555, Feb. 10, 2000; 65 FR 30191, May 10, 2000, as amended at 65 
FR 50150, Aug. 17, 2000; 66 FR 47109, Sept. 11, 2001; 69 FR 74995, Dec. 
15, 2004]



Sec. 219.7104  Developmental assistance costs eligible for reimbursement 
          or credit.

    (a) Developmental assistance provided under an approved mentor-
protege agreement is distinct from, and must not duplicate, any effort 
that is the normal and expected product of the award and administration 
of the mentor firm's subcontracts. The mentor firm must accumulate and 
charge costs associated with the latter in accordance with its approved 
accounting practices. Mentor firm costs that are eligible for 
reimbursement are set forth in appendix I.
    (b) Before incurring any costs under the Program, mentor firms must 
establish the accounting treatment of developmental assistance costs 
eligible for reimbursement or credit. Advance agreements are encouraged. 
To be eligible for reimbursement under the Program, the mentor firm must 
incur the costs before October 1, 2013.
    (c) If the mentor firm is suspended or debarred while performing 
under an approved mentor-protege agreement, the mentor firm may not be 
reimbursed or credited for developmental assistance costs incurred more 
than 30 days after the imposition of the suspension or debarment.
    (d) Developmental assistance costs incurred by a mentor firm before 
October 1, 2013, that are eligible for crediting under the Program, may 
be credited toward subcontracting plan goals as set forth in appendix I.

[65 FR 6555, Feb. 10, 2000; 65 FR 30191, May 10, 2000, as amended at 67 
FR 77937, Dec. 20, 2002; 70 FR 29645, May 24, 2005]



Sec. 219.7105  Reporting.

    Mentor and protege firms must report on the progress made under 
mentor-protege agreements as indicated in appendix I, section I-112.

[65 FR 6555, Feb. 10, 2000, as amended at 69 FR 74996, Dec. 15, 2004]

[[Page 116]]



Sec. 219.7106  Performance reviews.

    The Defense Contract Management Agency will conduct annual 
performance reviews of all mentor-protege agreements as indicated in 
appendix I, section I-113. The determinations made in these reviews 
should be a major factor in determinations of amounts of reimbursement, 
if any, that the mentor firm is eligible to receive in the remaining 
years of the Program participation term under the agreement.

[65 FR 50150, Aug. 17, 2000, as amended at 69 FR 74996, Dec. 15, 2004]

      PART 222_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Sec.

Sec. 222.001 Definition.

                   Subpart 222.1_Basic Labor Policies


Sec. 222.101 Labor relations.

Sec. 222.101-1 General.

Sec. 222.101-3 Reporting labor disputes.

Sec. 222.101-3-70 Impact of labor disputes on defense programs.

Sec. 222.101-4 Removal of items from contractors' facilities affected by 
          work stoppages.

Sec. 222.101-70 Acquisition of stevedoring services during labor 
          disputes.

Sec. 222.102 Federal and State labor requirements.

Sec. 222.102-1 Policy.

Sec. 222.103 Overtime.

Sec. 222.103-4 Approvals.

       Subpart 222.3_Contract Work Hours and Safety Standards Act


Sec. 222.302 Liquidated damages and overtime pay.

   Subpart 222.4_Labor Standards for Contracts Involving Construction


Sec. 222.402 Applicability.

Sec. 222.402-70 Installation support contracts.

Sec. 222.403 Statutory and regulatory requirements.

Sec. 222.403-4 Department of Labor regulations.

Sec. 222.404 Davis-Bacon Act wage determinations.

Sec. 222.406 Administration and enforcement.

Sec. 222.406-1 Policy.

Sec. 222.406-6 Payrolls and statements.

Sec. 222.406-8 Investigations.

Sec. 222.406-9 Withholding from or suspension of contract payments.

Sec. 222.406-10 Disposition of disputes concerning construction contract 
          labor standards enforcement.

Sec. 222.406-13 Semiannual enforcement reports.

             Subpart 222.6_Walsh-Healey Public Contracts Act


Sec. 222.604 Exemptions.

Sec. 222.604-2 Regulatory exemptions.

               Subpart 222.8_Equal Employment Opportunity


Sec. 222.806 Inquiries.

Sec. 222.807 Exemptions.

         Subpart 222.10_Service Contract Act of 1965, as Amended


Sec. 222.1003 Applicability.

Sec. 222.1003-1 General.

Sec. 222.1008 Procedures for preparing and submitting Notice (SF 98/
          98a).

Sec. 222.1008-2 Preparation of SF 98a.

Sec. 222.1008-7 Required time of submission of notice.

Sec. 222.1014 Delay of acquisition dates over 60 days.

 Subpart 222.13_Special Disabled Veterans, Veterans of the Vietnam Era, 
                       and Other Eligible Veterans


Sec. 222.1305 Waivers.

Sec. 222.1308 Complaint procedures.

Sec. 222.1310 Solicitation provision and contract clauses.

              Subpart 222.14_Employment of the Handicapped


Sec. 222.1403 Waivers.

Sec. 222.1406 Complaint procedures.

 Subpart 222.70_Restrictions on the Employment of Personnel for Work on 
       Construction and Service Contracts in Noncontiguous States


Sec. 222.7000 Scope of subpart.

Sec. 222.7001 Definition.

Sec. 222.7002 General.

Sec. 222.7003 Waivers.

Sec. 222.7004 Contract clause.

           Subpart 222.71_Right of First Refusal of Employment


Sec. 222.7101 Policy.

Sec. 222.7102 Contract clause.

    Subpart 222.72_Compliance with Labor Laws of Foreign Governments


Sec. 222.7201 Contract clauses.

[[Page 117]]

  Subpart 222.73_Limitations Applicable to Contracts Performed on Guam


Sec. 222.7300 Scope of subpart.

Sec. 222.7301 Prohibition on use of nonimmigrant aliens.

Sec. 222.7302 Exception.

Sec. 222.7303 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36358, July 31, 1991, unless otherwise noted.



Sec. 222.001  Definition.

    Labor advisor, as used in this part, means the departmental or 
agency headquarters labor advisor.

                   Subpart 222.1_Basic Labor Policies



Sec. 222.101  Labor relations.



Sec. 222.101-1  General.

    Follow the procedures at PGI 222.101-1 for referral of labor 
relations matters to the appropriate authorities.

[71 FR 18670, Apr. 12, 2006]



Sec. 222.101-3  Reporting labor disputes.

    Follow the procedures at PGI 222.101-3 for reporting labor disputes.

[71 FR 18670, Apr. 12, 2006]



Sec. 222.101-3-70  Impact of labor disputes on defense programs.

    (a) Each department and agency shall determine the degree of impact 
of potential or actual labor disputes on its own programs and 
requirements. For guidance on determining the degree of impact, see PGI 
222.101-3-70(a).
    (b) Each contracting activity shall obtain and develop data 
reflecting the impact of a labor dispute on its requirements and 
programs. Upon determining that the impact of the labor dispute is 
significant, the head of the contracting activity shall submit a report 
of findings and recommendations to the labor advisor in accordance with 
departmental procedures. This reporting requirement is assigned Report 
Control Symbol DD-AT&L(AR)1153 and must include the information 
specified at PGI 222.101-3-70(b).

[71 FR 18670, Apr. 12, 2006]



Sec. 222.101-4  Removal of items from contractors' facilities affected 
          by work stoppages.

    (a) When a contractor is unable to deliver urgent and critical items 
because of a work stoppage at its facility, the contracting officer, 
before removing any items from the facility, shall--
    (i) Before initiating any action, contact the labor advisor to 
obtain the opinion of the national office of the Federal Mediation and 
Conciliation Service or other mediation agency regarding the effect 
movement of the items would have on labor negotiations. Normally 
removals will not be made if they will adversely affect labor 
negotiations.
    (ii) Upon the recommendation of the labor advisor, provide a written 
request for removal of the material to the cognizant contract 
administration office. Include in the request the information specified 
at PGI 222.101-4(a)(ii).
    (iii) With the assistance of the labor advisor or the commander of 
the contract administration office, attempt to have both the management 
and the labor representatives involved agree to shipment of the material 
by normal means.
    (iv) If agreement for removal of the needed items cannot be reached 
following the procedures in paragraphs (a) (i) through (iii) of this 
subsection, the commander of the contract administration office, after 
obtaining approval from the labor advisor, may seek the concurrence of 
the parties to the dispute to permit movement of the material by 
military vehicles with military personnel. On receipt of such 
concurrences, the commander may proceed to make necessary arrangements 
to move the material.
    (v) If agreement for removal of the needed items cannot be reached 
following any of the procedures in paragraphs (a) (i) through (iv) of 
this subsection, refer the matter to the labor advisor with the 
information required by 222.101-3-70(b). If the labor advisor is 
unsuccessful in obtaining concurrence of the parties for the movement of 
the material and further action to obtain the material is deemed 
necessary, refer the matter to the agency head. Upon review and 
verification that the items are urgently or critically needed and

[[Page 118]]

cannot be moved with the consent of the parties, the agency head, on a 
nondelegable basis, may order removal of the items from the facility.

[56 FR 36358, July 31, 1991, as amended at 71 FR 18670, Apr. 12, 2006]



Sec. 222.101-70  Acquisition of stevedoring services during labor 
          disputes.

    (a) Use the following procedures only in the order listed when a 
labor dispute delays performance of a contract for stevedoring services 
which are urgently needed.
    (1) Attempt to have management and labor voluntarily agree to exempt 
military supplies from the labor dispute by continuing the movement of 
such material.
    (2) Divert vessels to alternate ports able to provide necessary 
stevedoring services.
    (3) Consider contracting with reliable alternative sources of supply 
within the stevedoring industry.
    (4) Utilize civil service stevedores to perform the work performed 
by contract stevedores.
    (5) Utilize military personnel to handle the cargo which was being 
handled by contract stevedores prior to the labor dispute.
    (b) Notify the labor advisor when a deviation from the procedures in 
paragraph (a) of this subsection is required.



Sec. 222.102  Federal and State labor requirements.



Sec. 222.102-1  Policy.

    (1) Direct all inquiries from contractors or contractor employees 
regarding the applicability or interpretation of Occupational Safety and 
Health Act (OSHA) regulations to the Department of Labor.
    (2) Upon request, provide the address of the appropriate field 
office of the Occupational Safety and Health Administration of the 
Department of Labor.
    (3) Do not initiate any application for the suspension or relaxation 
of labor requirements without prior coordination with the labor advisor. 
Any requests for variances or alternative means of compliance with OSHA 
requirements must be approved by the Occupational Safety and Health 
Administration of the Department of Labor.

[71 FR 18670, Apr. 12, 2006]



Sec. 222.103  Overtime.



Sec. 222.103-4  Approvals.

    (a) The department/agency approving official shall--
    (i) Obtain the concurrence of other appropriate approving officials; 
and
    (ii) Seek agreement as to the contracts under which overtime 
premiums will be approved when--
    (A) Two or more contracting offices have current contracts at the 
same contractor facility; and
    (B) The approval of overtime by one contracting office will affect 
the performance or cost of contracts of another office. In the absence 
of evidence to the contrary, a contracting officer may rely on a 
contractor's statement that approval of overtime premium pay for one 
contract will not affect performance or payments under any other 
contract.

       Subpart 222.3_Contract Work Hours and Safety Standards Act



Sec. 222.302  Liquidated damages and overtime pay.

    Upon receipt of notification of Contract Work Hours and Safety 
Standards Act violations, the contracting officer shall--
    (1) Immediately withhold such funds as are available;
    (2) Give the contractor written notification of the withholding and 
a statement of the basis for the liquidated damages assessment. The 
written notification shall also inform the contractor of its 60 days 
right to appeal the assessment, through the contracting officer, to the 
agency official responsible for acting on such appeals; and
    (3) If funds available for withholding are insufficient to cover 
liquidated damages, ask the contractor to pay voluntarily such funds as 
are necessary to cover the total liquidated damage assessment.
    (d)(i) The assessment shall become the final administrative 
determination of contractor liability for liquidated damages when--

[[Page 119]]

    (A) The contractor fails to appeal to the contracting agency within 
60 days from the date of the withholding of funds;
    (B) The department agency, following the contractor's appeals, 
issues a final order which affirms the assessment of liquidated damages 
or waives damages of $500 or less; or
    (C) The Secretary of Labor takes final action on a recommendation of 
the agency head to waive or adjust liquidated damages in excess of $500.
    (ii) Upon final administrative determination of the contractor's 
liability for liquidated damages, the contracting officer shall transmit 
withheld or collected funds determined to be owed the Government as 
liquidated damages to the servicing finance and accounting officer for 
crediting to the appropriate Government Treasury account. The 
contracting officer shall return any excess withheld funds to the 
contractor.

   Subpart 222.4_Labor Standards for Contracts Involving Construction



Sec. 222.402  Applicability.



Sec. 222.402-70  Installation support contracts.

    (a) Apply both the Service Contract Act (SCA) and the Davis-Bacon 
Act (DBA) to installation support contracts if--
    (1) The contract is principally for services but also requires a 
substantial and segregable amount of construction, alteration, 
renovation, painting, or repair work; and
    (2) The aggregate dollar value of such construction work exceeds or 
is expected to exceed $2,000.
    (b) SCA coverage under the contract. Contract installation support 
requirements, such as plant operation and installation services (i.e., 
custodial, snow removal, etc.) are subject to the SCA. Apply SCA clauses 
and minimum wage and fringe benefit requirements to all contract service 
calls or orders for such maintenance and support work.
    (c) DBA coverage under the contract. Contract construction, 
alteration, renovation, painting, and repair requirements (i.e., roof 
shingling, building structural repair, paving repairs, etc.) are subject 
to the DBA. Apply DBA clauses and minimum wage requirements to all 
contract service calls or orders for construction, alteration, 
renovation, painting, or repairs to buildings or other works.
    (d) Repairs versus maintenance. Some contract work may be 
characterized as either DBA painting/repairs or SCA maintenance. For 
example, replacing broken windows, spot painting, or minor patching of a 
wall could be covered by either the DBA or the SCA. In those instances 
where a contract service call or order requires construction trade 
skills (i.e., carpenter, plumber, painter, etc.), but it is unclear 
whether the work required is SCA maintenance or DBA painting/repairs, 
apply the following rules--
    (1) Individual service calls or orders which will require a total of 
32 or more work-hours to perform shall be considered to be repair work 
subject to the DBA.
    (2) Individual service calls or orders which will require less than 
32 work-hours to perform shall be considered to be maintenance subject 
to the SCA.
    (3) Painting work of 200 square feet or more to be performed under 
an individual service call or order shall be considered to be subject to 
the DBA regardless of the total work-hours required.
    (e) The determination of labor standards application shall be made 
at the time the solicitation is prepared in those cases where 
requirements can be identified. Otherwise, the determination shall be 
made at the time the service call or order is placed against the 
contract. The service call or order shall identify the labor standards 
law and contract wage determination which will apply to the work 
required.
    (f) Contracting officers may not avoid application of the DBA by 
splitting individual tasks between orders or contracts.



Sec. 222.403  Statutory and regulatory requirements.



Sec. 222.403-4  Department of Labor regulations.

    Direct all questions regarding Department of Labor regulations to 
the labor advisor.

[[Page 120]]



Sec. 222.404  Davis-Bacon Act wage determinations.

    Not later than April 1 of each year, each department and agency 
shall furnish the Administrator, Wage and Hour Division, with a general 
outline of its proposed construction program for the coming fiscal year. 
The Department of Labor uses this information to determine where general 
wage determination surveys will be conducted.
    (1) Indicate by individual project of $500,000 or more--
    (i) The anticipated type of construction;
    (ii) The estimated dollar value; and
    (iii) The location in which the work is to be performed (city, town, 
village, county, or other civil subdivision of the state).
    (2) The report format is contained in Department of Labor All Agency 
Memo 144, December 27, 1985.
    (3) The report control number is 1671-DOL-AN.



Sec. 222.406  Administration and enforcement.



Sec. 222.406-1  Policy.

    (a) General. The program shall also include--
    (i) Training appropriate contract administration, labor relations, 
inspection, and other labor standards enforcement personnel in their 
responsibilities; and
    (ii) Periodic review of field enforcement activities to ensure 
compliance with applicable regulations and instructions.
    (b) Preconstruction letters and conferences. (1) Promptly after 
award of the contract, the contracting officer shall provide a 
preconstruction letter to the prime contractor. This letter should 
accomplish the following, as appropriate--
    (A) Indicate that the labor standards requirements contained in the 
contract are based on the following statutes and regulations--
    (1) Davis-Bacon Act;
    (2) Contract Work Hours and Safety Standards Act;
    (3) Copeland (Anti-Kickback) Act;
    (4) Parts 3 and 5 of the Secretary of Labor's Regulations (parts 3 
and 5, subtitle A, title 29, CFR); and
    (5) Executive Order 11246 (Equal Employment Opportunity);
    (B) Call attention to the labor standards requirements in the 
contract which relate to--
    (1) Employment of foremen, laborers, mechanics, and others;
    (2) Wages and fringe benefits payments, payrolls, and statements;
    (3) Differentiation between subcontractors and suppliers;
    (4) Additional classifications;
    (5) Benefits to be realized by contractors and subcontractors in 
keeping complete work records;
    (6) Penalties and sanctions for violations of the labor standards 
provisions; and
    (7) The applicable provisions of FAR 22.403; and
    (C) Ensure that the contractor sends a copy of the preconstruction 
letter to each subcontractor.
    (2) Before construction begins, the contracting officer shall confer 
with the prime contractor and any subcontractor designated by the prime 
to emphasize their labor standards obligations under the contract when--
    (A) The prime contractor has not performed previous Government 
contracts;
    (B) The prime contractor experienced difficulty in complying with 
labor standards requirements on previous contracts; or
    (C) It is necessary to determine whether the contractor and its 
subcontractors intend to pay any required fringe benefits in the manner 
specified in the wage determination or to elect a different method of 
payment. If the latter, inform the contractor of the requirements of FAR 
22.406-2.



Sec. 222.406-6  Payrolls and statements.

    (a) Submission. Contractors who do not use Department of Labor Form 
WH 347 or its equivalent must submit a DD Form 879, Statement of 
Compliance, with each payroll report.



Sec. 222.406-8  Investigations.

    (a) Before beginning an investigation, the investigator shall inform 
the contractor of the general scope of the investigation, and that the 
investigation will include examining pertinent records and interviewing 
employees. In

[[Page 121]]

conducting the investigation, follow the procedures at PGI 222.406-8(a).
    (c) Contractor notification.
    (4)(A) Notify the contractor by certified mail of any finding that 
it is liable for liquidated damages under the Contract Work Hours and 
Safety Standards Act (CWHSSA). The notification shall inform the 
contractor that--
    (1) It has 60 days after receipt of the notice to appeal the 
assessment of liquidated damages; and
    (2) The appeal must demonstrate either that the alleged violations 
did not occur at all, occurred inadvertently notwithstanding the 
exercise of due care, or the assessment was computed improperly.
    (B) If an appeal is received, the contracting officer shall process 
the appeal in accordance with department or agency regulations.
    (d) Contracting officer's report. Forward a detailed enforcement 
report or summary report to the agency head in accordance with agency 
procedures. Include in the report, as a minimum, the information 
specified at PGI 222.406-8(d).

[56 FR 36358, July 31, 1991, as amended at 71 FR 18670, Apr. 12, 2006]



Sec. 222.406-9  Withholding from or suspension of contract payments.

    (a) Withholding from contract payments. The contracting officer 
shall contact the labor advisor for assistance when payments due a 
contractor are not available to satisfy that contractor's liability for 
Davis-Bacon or CWHSSA wage underpayments or liquidated damages.
    (c) Disposition of contract payments withheld or suspended.
    (3) Limitation on forwarding or returning funds. When disposition of 
withheld funds remains the final action necessary to close out a 
contract, the Department of Labor has given blanket approval to forward 
withheld funds to the Comptroller General pending completion of an 
investigation or other administrative proceedings.
    (4) Liquidated damages. (A) The agency head may adjust liquidated 
damages of $500 or less when the amount assessed is incorrect or waive 
the assessment when the violations--
    (1) Were nonwillful or inadvertent; and
    (2) Occurred notwithstanding the exercise of due care by the 
contractor, its subcontractor, or their agents.
    (B) The agency head may recommend to the Administrator, Wage and 
Hour Division, that the liquidated damages over $500 be adjusted because 
the amount assessed is incorrect. The agency head may also recommend the 
assessment be waived when the violations--
    (1) Were nonwillful or inadvertent; and
    (2) Occurred notwithstanding the exercise of due care by the 
contractor, the subcontractor, or their agents.



Sec. 222.406-10  Disposition of disputes concerning construction 
          contract labor standards enforcement.

    (d) Forward the contracting officer's findings and the contractor's 
statement through the labor advisor.



Sec. 222.406-13  Semiannual enforcement reports.

    Forward these reports through the head of the contracting activity 
to the labor advisor within 15 days following the end of the reporting 
period. These reports shall not include information from investigations 
conducted by the Department of Labor. These reports shall contain the 
following information, as applicable, for construction work subject to 
the Davis-Bacon Act and the CWHSSA--
    (1) Period covered;
    (2) Number of prime contracts awarded;
    (3) Total dollar amount of prime contracts awarded;
    (4) Number of contractors/subcontractors against whom complaints 
were received;
    (5) Number of investigations conducted;
    (6) Number of contractors/subcontractors found in violation;
    (7) Amount of wage restitution found due under--
    (i) Davis-Bacon Act
    (ii) CWHSSA;
    (8) Number of employees due wage restitution under--
    (i) Davis-Bacon Act
    (ii) CWHSSA;

[[Page 122]]

    (9) Amount of liquidated damages assessed under the CWHSSA--
    (i) Total amount
    (ii) Number of contracts involved;
    (10) Number of employees and amount paid/withheld under--
    (i) Davis-Bacon Act
    (ii) CWHSSA
    (iii) Copeland Act; and
    (11) Preconstruction activities--
    (i) Number of compliance checks performed
    (ii) Preconstruction letters sent.

             Subpart 222.6_Walsh-Healey Public Contracts Act



Sec. 222.604  Exemptions.



Sec. 222.604-2  Regulatory exemptions.

    (b) Submit all applications for such exemptions through contracting 
channels to the labor advisor.

[56 FR 36358, July 31, 1991, as amended at 65 FR 14398, Mar. 16, 2000]

               Subpart 222.8_Equal Employment Opportunity



Sec. 222.806  Inquiries.

    (b) Refer inquiries through the labor advisor.



Sec. 222.807   Exemptions.

    (c) Follow the procedures at PGI 222.807(c) when submitting a 
request for an exemption.

[71 FR 18670, Apr. 12, 2006]

         Subpart 222.10_Service Contract Act of 1965, as Amended



Sec. 222.1003  Applicability.



Sec. 222.1003-1  General.

    For contracts having a substantial amount of construction, 
alteration, renovation, painting, or repair work, see 222.402-70.



Sec. 222.1008  Procedures for preparing and submitting Notice (SF 98/
          98a).



Sec. 222.1008-2  Preparation of SF 98a.

    Follow the procedures at PGI 222.1008-2 regarding use of the Service 
Contract Act Directory of Occupations when preparing the SF 98a.

[71 FR 18670, Apr. 12, 2006]



Sec. 222.1008-7  Required time of submission of notice.

    (d) Submit requests for immediate wage determination responses for 
emergency acquisitions through the labor advisor. If the request is 
justified, the labor advisor will contact Department of Labor 
headquarters officials.



Sec. 222.1014  Delay of acquisition dates over 60 days.

    Follow the procedures at PGI 222.1014 for submission of update 
requests to the Wage and Hour Division.

[71 FR 18670, Apr. 12, 2006]

 Subpart 222.13_Special Disabled Veterans, Veterans of the Vietnam Era, 
                       and Other Eligible Veterans

    Source: 71 FR 18670, Apr. 12, 2006, unless otherwise noted.



Sec. 222.1305  Waivers.

    (c) Follow the procedures at PGI 222.1305(c) for submission of 
waiver requests.



Sec. 222.1308  Complaint procedures.

    The contracting officer shall--
    (1) Forward each complaint received as indicated in FAR 22.1308; and
    (2) Notify the complainant of the referral. The contractor in 
question shall not be advised in any manner or for any reason of the 
complainant's name, the nature of the complaint, or the fact that the 
complaint was received.



Sec. 222.1310  Solicitation provision and contract clauses.

    (a)(1) Use of the clause at FAR 52.222-35, Equal Opportunity for 
Special Disabled Veterans, Veterans of the Vietnam Era, and Other 
Eligible Veterans, with its paragraph (c), Listing Openings, also 
satisfies the requirement of 10 U.S.C. 2410k.

[[Page 123]]

              Subpart 222.14_Employment of the Handicapped



Sec. 222.1403  Waivers.

    (c) The contracting officer shall submit a waiver request through 
contracting channels to the labor advisor. If the request is justified, 
the labor advisor will endorse the request and forward it for action 
to--
    (i) The agency head for waivers under FAR 22.1403(a). For the 
defense agencies, waivers must be approved by the Under Secretary of 
Defense for Acquisition.
    (ii) The Secretary of Defense, without the power of redelegation, 
for waivers under FAR 22.1403(b).



Sec. 222.1406  Complaint procedures.

    The contracting officer shall notify the complainant of such 
referral. The contractor in question shall not be advised in any manner 
or for any reason of the complainant's name, the nature of the 
complaint, or the fact that the complaint was received.

[71 FR 18671, Apr. 12, 2006]

 Subpart 222.70_Restrictions on the Employment of Personnel for Work on 
       Construction and Service Contracts in Noncontiguous States

    Source: 65 FR 14403, Mar. 16, 2000, unless otherwise noted.



Sec. 222.7000  Scope of subpart.

    (a) This subpart implements Section 8071 of the Fiscal Year 2000 
Defense Appropriations Act, Public Law 106-79, and similar sections in 
subsequent Defense Appropriations Acts.
    (b) This subpart applies only--
    (1) To construction and service contracts to be performed in whole 
or in part within a noncontiguous State; and
    (2) When the unemployment rate in the noncontiguous State is in 
excess of the national average rate of unemployment as determined by the 
Secretary of Labor.



Sec. 222.7001  Definition.

    ``Noncontiguous State,'' as used in this subpart, means Alaska, 
Hawaii, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, 
the U.S. Virgin Islands, Baker Island, Howland Island, Jarvis Island, 
Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra 
Atoll, and Wake Island.

[65 FR 50151, Aug. 17, 2000]



Sec. 222.7002  General.

    A contractor awarded a contract subject to this subpart must employ, 
for the purpose of performing that portion of the contract work within 
the noncontiguous State, individuals who are residents of that 
noncontiguous State and who, in the case of any craft or trade, possess 
or would be able to acquire promptly the necessary skills to perform 
this contract.



Sec. 222.7003  Waivers.

    The head of the agency may waive the requirements of 222.7002 on a 
case-by-case basis in the interest of national security.

[65 FR 50151, Aug. 17, 2000]



Sec. 222.7004  Contract clause.

    Use the clause at 252.222-7000, Restrictions on Employment of 
Personnel, in all solicitations and contracts subject to this subpart. 
Insert the name of the appropriate noncontiguous State in paragraph (a) 
of the clause.

           Subpart 222.71_Right of First Refusal of Employment

    Source: 57 FR 52593, Nov. 4, 1992, unless otherwise noted.



Sec. 222.7101  Policy.

    (a) DoD policy is to minimize the adverse impact on civil service 
employees affected by the closure of military installations. One means 
of implementing this policy is to give employees adversely affected by 
closure of a military installation the right of first refusal for jobs 
created by award of contracts arising from the closure effort that the 
employee is qualified to fill.
    (b) Closure efforts include the acquisitions for preparing the 
installation

[[Page 124]]

for closure (such as environmental restoration and utilities 
modification) and maintaining the property after closure (such as 
security and fire prevention services).



Sec. 222.7102  Contract clause.

    Use the clause at 252.222-7001, Right of First Refusal of 
Employment--Closure of Military Installations, in all solicitations and 
contracts arising from the closure of the military installation where 
the contract will be performed.

    Subpart 222.72_Compliance with Labor Laws of Foreign Governments



Sec. 222.7201  Contract clauses.

    (a) Use the clause at 252.222-7002, Compliance with Local Labor Laws 
(Overseas), in solicitations and contracts for services or construction 
to be performed outside the United States and its outlying areas.
    (b) Use the clause at 252.222-7003, Permit from Italian Inspectorate 
of Labor, in solicitations and contracts for porter, janitorial, or 
ordinary facility and equipment maintenance services to be performed in 
Italy.
    (c) Use the clause at 252.222-7004, Compliance with Spanish Social 
Security Laws and Regulations, in solicitations and contracts for 
services or construction to be performed in Spain.

[62 FR 34122, June 24, 1997, as amended at 70 FR 35545, June 21, 2005]

  Subpart 222.73_Limitations Applicable to Contracts Performed on Guam

    Source: 64 FR 52672, Sept. 30, 1999, unless otherwise noted.



Sec. 222.7300  Scope of subpart.

    (a) This subpart implements--
    (1) 10 U.S.C. 2864; and
    (2) Section 390 of the National Defense Authorization Act for Fiscal 
Year 1998 (Public Law 105-85).
    (b) This subpart applies to--
    (1) Contracts for military construction projects on Guam; and
    (2) Contracts for base operations support on Guam that--
    (i) Are awarded as a result of a competition conducted under OMB 
Circular A-76; and
    (ii) Are entered into or modified on or after November 18, 1997.



Sec. 222.7301  Prohibition on use of nonimmigrant aliens.

    (a) Any alien who is issued a visa or otherwise provided 
nonimmigrant status under Section 101(a)(15)(H)(ii) of the Immigration 
and Nationality Act (8 U.S.C. 1101(a)(15)(H)(ii)) is prohibited from 
performing work under a contract for--
    (1) A military construction project on Guam; or
    (2) Base operations support on Guam.
    (b) Lawfully admitted citizens of the freely associated states of 
the Republic of the Marshall Islands, the Federated States of 
Micronesia, or the Republic of Palau are not subject to the prohibition 
in paragraph (a) of this section.



Sec. 222.7302  Exception.

    The prohibition in 222.7301(a)(1) does not apply to a military 
construction project if--
    (a) There is no acceptable offer in response to a solicitation for 
the project;
    (b) The Secretary concerned makes a determination that the 
prohibition is a significant deterrent to obtaining offers on the 
project; and
    (c) Another solicitation is issued for the project.



Sec. 222.7303  Contract clause.

    Use the clause at 252.222-7005, Prohibition on Use of Nonimmigrant 
Aliens-Guam, in solicitations and contracts subject to this subpart, 
except those issued in accordance with 222.7302.

  PART 223_ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
       TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

Subpart 223.3_Hazardous Material Identification and Material Safety Data

Sec.

Sec. 223.302 Policy.

Sec. 223.303 Contract clause.

Sec. 223.370 Safety precautions for ammunition and explosives.

[[Page 125]]


Sec. 223.370-1 Scope.

Sec. 223.370-2 Definition.

Sec. 223.370-3 Policy.

Sec. 223.370-4 Procedures.

Sec. 223.370-5 Contract clauses.

                Subpart 223.4_Use of Recovered Materials


Sec. 223.405 Procedures.

                    Subpart 223.5_Drug-Free Workplace


Sec. 223.570 Drug-free work force.

Sec. 223.570-1 Policy.

Sec. 223.570-2 Contract clause.

                Subpart 223.8_Ozone-Depleting Substances


Sec. 223.803 Policy.

Subpart 223.70 [Reserved]

  Subpart 223.71_Storage and Disposal of Toxic and Hazardous Materials


Sec. 223.7100 Policy.

Sec. 223.7101 Procedures.

Sec. 223.7102 Exceptions.

Sec. 223.7103 Contract clause.

Subpart 223.72_Safeguarding Sensitive Conventional Arms, Ammunition, and 
                               Explosives


Sec. 223.7200 Definition.

Sec. 223.7201 Policy.

Sec. 223.7202 Preaward responsibilities.

Sec. 223.7203 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36365, July 31, 1991, unless otherwise noted.

Subpart 223.3_Hazardous Material Identification and Material Safety Data



Sec. 223.302  Policy.

    (e) The contracting officer shall also provide hazard warning 
labels, that are received from apparent successful offerors, to the 
cognizant safety officer.

[70 FR 73150, Dec. 9, 2005]



Sec. 223.303  Contract clause.

    Use the clause at 252.223-7001, Hazard Warning Labels, in 
solicitations and contracts which require submission of hazardous 
material data sheets (see FAR 23.302(c)).

[56 FR 67215, Dec. 30, 1991]



Sec. 223.370  Safety precautions for ammunition and explosives.



Sec. 223.370-1  Scope.

    (a) This section applies to all acquisitions involving the use of 
ammunition and explosives, including acquisitions for--
    (1) Development;
    (2) Testing;
    (3) Research;
    (4) Manufacturing;
    (5) Handling or loading;
    (6) Assembling;
    (7) Packaging;
    (8) Storage;
    (9) Transportation;
    (10) Renovation;
    (11) Demilitarization;
    (12) Modification;
    (13) Repair;
    (14) Disposal;
    (15) Inspection; or
    (16) Any other use, including acquisitions requiring the use or the 
incorporation of materials listed in paragraph (b) of this subsection 
for initiation, propulsion, or detonation as an integral or component 
part of an explosive, an ammunition, or explosive end item or weapon 
system.
    (b) This section does not apply to acquisitions solely for--
    (1) Inert components containing no explosives, propellants, or 
pyrotechnics;
    (2) Flammable liquids;
    (3) Acids;
    (4) Oxidizers;
    (5) Powdered metals; or
    (6) Other materials having fire or explosive characteristics.



Sec. 223.370-2  Definition.

    Ammunition and explosives, as used in this section, is defined in 
the clause at 252.223-7002, Safety Precautions for Ammunition and 
Explosives.



Sec. 223.370-3  Policy.

    (a) DoD policy is to ensure that its contractors take reasonable 
precautions in handling ammunition and explosives so as to minimize the 
potential for mishaps.

[[Page 126]]

    (b) This policy is implemented by DoD Manual 4145.26-M, DoD 
Contractors' Safety Manual for Ammunition and Explosives, which is 
incorporated into contracts under which ammunition and explosives are 
handled. The manual contains mandatory safety requirements for 
contractors. When work is to be performed on a Government-owned 
installation, the contracting officer may use the ammunition and 
explosives regulation of the DoD component or installation as a 
substitute for, or supplement to, DoD Manual 4145.26-M, as long as the 
contract cites these regulations.

[56 FR 36365, July 31, 1991, as amended at 70 FR 73150, Dec. 9, 2005]



Sec. 223.370-4  Procedures.

    Follow the procedures at PGI 223.370-4.

[70 FR 73151, Dec. 9, 2005]



Sec. 223.370-5  Contract clauses.

    Use the clauses at 252.223-7002, Safety Precautions for Ammunition 
and Explosives, and 252.223-7003, Change in Place of Performance--
Ammunition and Explosives, in all solicitations and contracts for 
acquisition to which this section applies.

                Subpart 223.4_Use of Recovered Materials



Sec. 223.405  Procedures.

    Follow the procedures at PGI 223.405.

[70 FR 73151, Dec. 9, 2005]

                    Subpart 223.5_Drug-Free Workplace

    Source: 57 FR 32737, July 23, 1992, unless otherwise noted.



Sec. 223.570  Drug-free work force.



Sec. 223.570-1  Policy.

    DoD policy is to ensure that its contractors maintain a program for 
achieving a drug-free work force.

[57 FR 32737, July 23, 1992. Redesignated at 70 FR 73151, Dec. 9, 2005]



Sec. 223.570-2  Contract clause.

    (a) Use the clause at 252.223-7004, Drug-Free Work Force, in all 
solicitations and contracts--
    (1) That involve access to classified information; or
    (2) When the contracting officer determines that the clause is 
necessary for reasons of national security or for the purpose of 
protecting the health or safety of those using or affected by the 
product of, or performance of, the contract.
    (b) Do not use the clause in solicitations and contracts--
    (1) For commercial items;
    (2) When performance or partial performance will be outside the 
United States and its outlying areas, unless the contracting officer 
determines such inclusion to be in the best interest of the Government; 
or
    (3) When the value of the acquisition is at or below the simplified 
acquisition threshold.

[57 FR 32737, July 23, 1992, as amended at 64 FR 2598, Jan. 15, 1999; 70 
FR 35545, June 21, 2005. Redesignated at 70 FR 73151, Dec. 9, 2005]

                Subpart 223.8_Ozone-Depleting Substances



Sec. 223.803  Policy.

    (1) Contracts. No DoD contract may include a specification or 
standard that requires the use of a class I ozone-depleting substance or 
that can be met only through the use of such a substance unless the 
inclusion of the specification or standard is specifically authorized at 
a level no lower than a general or flag officer or a member of the 
Senior Executive Service of the requiring activity in accordance with 
Section 326, Public Law 102-484 (10 U.S.C. 2301 (repealed) note). This 
restriction is in addition to any imposed by the Clean Air Act and 
applies after June 1, 1993, to all DoD contracts, regardless of place of 
performance.
    (2) Modifications. (i) Contracts awarded before June 1, 1993, with a 
value in excess of $10 million, that are modified or extended (including 
option exercise) and, as a result of the modification or extension, will 
expire more than one year after the effective date of the

[[Page 127]]

modification or extension, must be evaluated in accordance with agency 
procedures for the elimination of ozone-depleting substances.
    (A) The evaluation must be carried out within 60 days after the 
first modification or extension.
    (B) No further modification or extension may be made to the contract 
until the evaluation is complete.
    (ii) If, as a result of this evaluation, it is determined that an 
economically feasible substitute substance or alternative technology is 
available, the contracting officer shall modify the contract to require 
the use of the substitute substance or alternative technology.
    (iii) If a substitute substance or alternative technology is not 
available, a written determination shall be made to that effect at a 
level no lower than a general or flag officer or a member of the Senior 
Executive Service of the requiring activity.

[70 FR 73151, Dec. 9, 2005]

Subpart 223.70 [Reserved]

  Subpart 223.71_Storage and Disposal of Toxic and Hazardous Materials

    Source: 58 FR 28466, May 13, 1993, unless otherwise noted.



Sec. 223.7100  Policy.

    10 U.S.C. 2692 prohibits storage or disposal of non-DoD-owned toxic 
or hazardous materials on DoD installations, except as provided in 
223.7102. DoD Instruction 4715.6, Environmental Compliance, implements 
10 U.S.C. 2692.

[58 FR 28466, May 13, 1993, as amended at 67 FR 61516, Oct. 1, 2002]



Sec. 223.7101  Procedures.

    (a) If the contracting officer is uncertain as to whether particular 
activities are prohibited or fall under one of the exceptions in 
223.7102, the contracting officer should seek advice from the cognizant 
office of counsel.
    (b) When storage, treatment, or disposal of non-DoD-owned toxic or 
hazardous materials is authorized in accordance with this subpart, the 
contract or authorization should specify the types, conditions, and 
quantities of toxic or hazardous materials that may be temporarily 
stored, treated, or disposed of in connection with the contract or as a 
result of the authorized commercial use of a DoD industrial-type 
facility.

[60 FR 61597, Nov. 30, 1995]



Sec. 223.7102  Exceptions.

    (a) The prohibition of 10 U.S.C. 2692 does not apply to--
    (1) The storage of strategic and critical materials in the National 
Defense Stockpile under an agreement for such storage with the 
Administrator of General Services Administration;
    (2) The temporary storage or disposal of explosives in order to 
protect the public or to assist agencies responsible for Federal law 
enforcement in storing or disposing of explosives when no alternative 
solution is available, if such storage or disposal is made in accordance 
with an agreement between the Secretary of Defense and the head of the 
Federal agency concerned;
    (3) The temporary storage or disposal of explosives in order to 
provide emergency lifesaving assistance to civil authorities;
    (4) The disposal of excess explosives produced under a DoD contract, 
if the head of the military department concerned determines, in each 
case, that an alternative feasible means of disposal is not available to 
the contractor, taking into consideration public safety, available 
resources of the contractor, and national defense production 
requirements;
    (5) The temporary storage of nuclear materials or nonnuclear 
classified materials in accordance with an agreement with the Secretary 
of Energy;
    (6) The storage of materials that constitute military resources 
intended to be used during peacetime civil emergencies in accordance 
with applicable DoD regulations;
    (7) The temporary storage of materials of other Federal agencies in 
order to provide assistance and refuge for commercial carriers of such 
material during a transportation emergency;
    (8) The storage of any material that is not owned by DoD, if the 
Secretary of the military department concerned

[[Page 128]]

determines that the material is required or generated by a private 
person in connection with the authorized and compatible use by that 
person of an industrial-type DoD facility; or
    (9) The treatment and disposal of any non-DoD-owned material if the 
Secretary of the military department concerned--
    (i) Determines that the material is required or generated by a 
private person in connection with the authorized and compatible 
commercial use by that person of an industrial-type facility of that 
military department; and
    (ii) Enters into a contract with that person that--
    (A) Is consistent with the best interest of national defense and 
environmental security; and
    (B) Provides for that person's continued financial and environmental 
responsibility and liability with regard to the material.
    (b) The Secretary of Defense, where DoD Instruction 4715.6 applies, 
may grant exceptions to the prohibition of 10 U.S.C. 2692 when essential 
to protect the health and safety of the public from imminent danger.

[58 FR 28466, May 13, 1993, as amended at 60 FR 13076, Mar. 10, 1995; 60 
FR 61597, Nov. 30, 1995; 67 FR 61516, Oct. 1, 2002]



Sec. 223.7103  Contract clause.

    (a) Use the clause at 252.223-7006, Prohibition on Storage and 
Disposal of Toxic and Hazardous Materials, in all solicitations and 
contracts which require, may require, or permit contractor performance 
on a DoD installation.
    (b) Use the clause at 252.223-7006 with its Alternate I, when the 
Secretary of the military department issues a determination under the 
exception at 223.7102(a)(9).

[60 FR 13076, Mar. 10, 1995]

Subpart 223.72_Safeguarding Sensitive Conventional Arms, Ammunition, and 
                               Explosives

    Source: 61 FR 7743, Feb. 29, 1996, unless otherwise noted.



Sec. 223.7200  Definition.

    ``Arms, ammunition, and explosives (AA&E),'' as used in this 
subpart, means those items within the scope (chapter 1, paragraph B) of 
DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, 
Ammunition, and Explosives.



Sec. 223.7201  Policy.

    (a) The requirements of DoD 5100.76-M, Physical Security of 
Sensitive Conventional Arms, Ammunition, and Explosives, shall be 
applied to contracts when--
    (1) AA&E will be provided to the contractor or subcontractor as 
Government-furnished property; or
    (2) The principal development, production, manufacture, or purchase 
of AA&E is for DoD use.
    (b) The requirements of DoD 5100.76-M need not be applied to 
contracts when--
    (1) The AA&E to be acquired under the contract is a commercial item 
within the meaning of FAR 2.101; or
    (2) The contract will be performed in a Government-owned contractor-
operated ammunition production facility. However, if subcontracts issued 
under such a contract will meet the criteria of paragraph (a) of this 
section, the requirements of DoD 5100.76-M shall apply.



Sec. 223.7202  Preaward responsibilities.

    When an acquisition involves AA&E, technical or requirements 
personnel shall specify in the purchase request--
    (a) That AA&E is involved; and
    (b) Which physical security requirements of DoD 5100.76-M apply.



Sec. 223.7203  Contract clause.

    Use the clause at 252.223-7007, Safeguarding Sensitive Conventional 
Arms, Ammunition, and Explosives, in all solicitations and contracts to 
which DoD 5100.76-M applies, in accordance with the policy at 223.7201. 
Complete paragraph (b) of the clause based on information provided by 
cognizant technical or requirements personnel.

[61 FR 7743, Feb. 29, 1996; 61 FR 18195, Apr. 24, 1996]

[[Page 129]]

        PART 224_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

             Subpart 224.1_Protection of Individual Privacy

Sec.

Sec. 224.103 Procedures.

                Subpart 224.2_Freedom of Information Act


Sec. 224.203 Policy.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36367, July 31, 1991, unless otherwise noted.

             Subpart 224.1_Protection of Individual Privacy



Sec. 224.103  Procedures.

    (b)(2) DoD rules and regulations are contained in DoDD 5400.11, 
Department of Defense Privacy Program, and DoD 5400.11-R, Department of 
Defense Privacy Program.

                Subpart 224.2_Freedom of Information Act



Sec. 224.203  Policy.

    (a) DoD implementation is in DoDD 5400.7, DoD Freedom of Information 
Act Program, and DoD 5400.7-R, DoD Freedom of Information Act Program.

[56 FR 36367, July 31, 1991. Redesignated at 62 FR 34122, June 24, 1997]

                      PART 225_FOREIGN ACQUISITION

Sec.

Sec. 225.001 General.

Sec. 225.003 Definitions.

                 Subpart 225.1_Buy American Act_Supplies


Sec. 225.101 General.

Sec. 225.103 Exceptions.

Sec. 225.104 Nonavailable articles.

Sec. 225.105 Determining reasonableness of cost.

Sec. 225.170 Acquisition from or through other Government agencies.

          Subpart 225.2_Buy American Act_Construction Materials


Sec. 225.202 Exceptions.

Sec. 225.206 Noncompliance.

                     Subpart 225.4_Trade Agreements


Sec. 225.401 Exceptions.

Sec. 225.401-70 End products subject to trade agreements.

Sec. 225.402 General.

Sec. 225.403 World Trade Organization Government Procurement Agreement 
          and Free Trade Agreements.

Sec. 225.408 Procedures.

        Subpart 225.5_Evaluating Foreign Offers_Supply Contracts


Sec. 225.502 Application.

Sec. 225.503 Group offers.

Sec. 225.504 Evaluation examples.

                    Subpart 225.7_Prohibited Sources


Sec. 225.701 Restrictions.

Sec. 225.701-70 Exception.

      Subpart 225.8_Other International Agreements and Coordination


Sec. 225.770 Prohibition on acquisition of United States Munitions List 
          items from Communist Chinese military companies.

Sec. 225.770-1 Definitions.

Sec. 225.770-2 Prohibition.

Sec. 225.770-3 Exceptions.

Sec. 225.770-4 Identifying USML items.

Sec. 225.770-5 Waiver of prohibition.

Sec. 225.802 Procedures.

Sec. 225.802-70 Contracts for performance outside the United States and 
          Canada.

Sec. 225.802-71 End use certificates.

Sec. 225.870 Contracting with Canadian contractors.

Sec. 225.870-1 General.

Sec. 225.870-2 Solicitation of Canadian contractors.

Sec. 225.870-3 Submission of offers.

Sec. 225.870-4 Contracting procedures.

Sec. 225.870-5 Contract administration.

Sec. 225.870-6 Termination procedures.

Sec. 225.870-7 Acceptance of Canadian supplies.

Sec. 225.870-8 Industrial security.

Sec. 225.871 North Atlantic Treaty Organization (NATO) cooperative 
          projects.

Sec. 225.871-1 Scope.

Sec. 225.871-2 Definitions.

Sec. 225.871-3 General.

Sec. 225.871-4 Statutory waivers.

Sec. 225.871-5 Directed subcontracting.

Sec. 225.871-6 Disposal of property.

Sec. 225.871-7 Congressional notification.

Sec. 225.872 Contracting with qualifying country sources.

Sec. 225.872-1 General.

Sec. 225.872-2 Applicability.

Sec. 225.872-3 Solicitation procedures.

Sec. 225.872-4 Individual determinations.

Sec. 225.872-5 Contract administration.

Sec. 225.872-6 Audit.

Sec. 225.872-7 Industrial security for qualifying countries.

[[Page 130]]


Sec. 225.872-8 Subcontracting with qualifying country sources.

Sec. 225.873 Waiver of United Kingdom commercial exploitation levies.

Sec. 225.873-1 Policy.

Sec. 225.873-2 Procedures.

                    Subpart 225.9_Customs and Duties


Sec. 225.901 Policy.

Sec. 225.902 Procedures.

Sec. 225.903 Exempted supplies.

        Subpart 225.10_Additional Foreign Acquisition Regulations


Sec. 225.1070 Clause deviations in overseas contracts.

       Subpart 225.11_Solicitation Provisions and Contract Clauses


Sec. 225.1100 Scope of subpart.

Sec. 225.1101 Acquisition of supplies.

Sec. 225.1103 Other provisions and clauses.

   Subpart 225.70_Authorization Acts, Appropriations Acts, and Other 
              Statutory Restrictions on Foreign Acquisition


Sec. 225.7000 Scope of subpart.

Sec. 225.7001 Definitions.

Sec. 225.7002-1 Restrictions.

Sec. 225.7002-2 Exceptions.

Sec. 225.7002-3 Contract clauses.

Sec. 225.7003 Waiver of restrictions of 10 U.S.C. 2534.

Sec. 225.7004 Restriction on acquisition of foreign buses.

Sec. 225.7004-1 Restriction.

Sec. 225.7004-2 Applicability.

Sec. 225.7004-3 Exceptions.

Sec. 225.7004-4 Waiver.

Sec. 225.7005 Restriction on certain chemical weapons antidote.

Sec. 225.7005-1 Restriction.

Sec. 225.7005-2 Exception.

Sec. 225.7005-3 Waiver.

Sec. 225.7006 Restrictions on air circuit breakers for naval vessels.

Sec. 225.7006-1 Restriction.

Sec. 225.7006-2 Exceptions.

Sec. 225.7006-3 Waiver.

Sec. 225.7006-4 Solicitation provision and contract clause.

Sec. 225.7007 Restrictions on anchor and mooring chain.

Sec. 225.7007-1 Restrictions.

Sec. 225.7007-2 Waiver.

Sec. 225.7007-3 Contract clause.

Sec. 225.7008 [Reserved]

Sec. 225.7009 Restriction on ball and roller bearings.

Sec. 225.7009-1 Scope.

Sec. 225.7009-2 Restriction.

Sec. 225.7009-3 Exception.

Sec. 225.7009-4 Waiver.

Sec. 225.7009-5 Contract clause.

Sec. 225.7010 Restriction on vessel propellers.

Sec. 225.7010-1 Restriction.

Sec. 225.7010-2 Exceptions.

Sec. 225.7010-3 Waiver.

Sec. 225.7010-4 Contract clause.

Sec. 225.7011 Restriction on carbon, alloy, and armor steel plate.

Sec. 225.7011-1 Restriction.

Sec. 225.7011-2 Waiver.

Sec. 225.7011-3 Contract clause.

Sec. 225.7012 Restriction on supercomputers.

Sec. 225.7012-1 Restriction.

Sec. 225.7012-2 Waiver.

Sec. 225.7012-3 Contract clause.

Sec. 225.7013 Restrictions on construction or repair of vessels in 
          foreign shipyards.

Sec. 225.7014 Restriction on overseas military construction.

Sec. 225.7015 Restriction on overseas architect-engineer services.

Sec. 225.7016 Restriction on research and development.

Sec. 225.7017 Restriction on Ballistic Missile Defense research, 
          development, test, and evaluation.

Sec. 225.7017-1 Definitions.

Sec. 225.7017-2 Restriction.

Sec. 225.7017-3 Exceptions.

Sec. 225.7017-4 Solicitation provision.

        Subpart 225.71_Other Restrictions on Foreign Acquisition


Sec. 225.7100 Scope of subpart.

Sec. 225.7101 Definitions.

Sec. 225.7102 Forgings.

Sec. 225.7102-1 Policy.

Sec. 225.7102-2 Exceptions.

Sec. 225.7102-3 Waiver.

Sec. 225.7102-4 Contract clause.

Sec. 225.7103 Polyacrylonitrile (PAN) carbon fiber.

Sec. 225.7103-1 Policy.

Sec. 225.7103-2 Waivers.

Sec. 225.7103-3 Contract clause.

 Subpart 225.72_Reporting Contract Performance Outside the United States


Sec. 225.7201 Policy.

Sec. 225.7202 Exception.

Sec. 225.7203 Contracting officer distribution of reports.

Sec. 225.7204 Solicitation provision and contract clauses.

         Subpart 225.73_Acquisitions for Foreign Military Sales


Sec. 225.7300 Scope of subpart.

Sec. 225.7301 General.

Sec. 225.7302 Guidance.

Sec. 225.7303 Pricing acquisitions for FMS.

Sec. 225.7303-1 Contractor sales to other foreign customers.

[[Page 131]]


Sec. 225.7303-2 Cost of doing business with a foreign government or an 
          international organization.

Sec. 225.7303-3 Government-to-government agreements.

Sec. 225.7303-4 Contingent fees.

Sec. 225.7303-5 Acquisitions wholly paid for from nonrepayable funds.

Sec. 225.7304 FMS customer involvement.

Sec. 225.7305 Limitation of liability.

Sec. 225.7306 Offset arrangements.

Sec. 225.7307 Contract clauses.

      Subpart 225.74_Defense Contractors Outside the United States


Sec. 225.7401 General.

Sec. 225.7402 Contractor personnel authorized to accompany U.S. Armed 
          Forces deployed outside the United States.

Sec. 225.7402-1 Scope.

Sec. 225.7402-2 Definitions.

Sec. 225.7402-3 Government support.

Sec. 225.7402-4 Contract clauses.

Sec. 225.7403 Antiterrorism/force protection.

Sec. 225.7403-1 General.

Sec. 225.7403-2 Contract clause.

               Subpart 225.75_Balance of Payments Program


Sec. 225.7500 Scope of subpart.

Sec. 225.7501 Policy.

Sec. 225.7502 Procedures.

Sec. 225.7503 Contract clauses.

             Subpart 225.76_Secondary Arab Boycott of Israel


Sec. 225.7601 Restriction.

Sec. 225.7602 Procedures.

Sec. 225.7603 Exceptions.

Sec. 225.7604 Waivers.

Sec. 225.7605 Solicitation provision.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36367, July 31, 1991, unless otherwise noted.



Sec. 225.001  General.

    For guidance on evaluating offers of foreign end products, see PGI 
225.001.

[70 FR 73154, Dec. 9, 2005]



Sec. 225.003  Definitions.

    As used in this part--
    (1) Caribbean Basin country end product includes petroleum or any 
product derived from petroleum.
    (2) Defense equipment means any equipment, item of supply, 
component, or end product purchased by DoD.
    (3) Domestic concern means--
    (i) A concern incorporated in the United States (including a 
subsidiary that is incorporated in the United States, even if the parent 
corporation is a foreign concern; or
    (ii) An unincorporated concern having its principal place of 
business in the United States.
    (4) Domestic end product has the meaning given in the clauses at 
252.225-7001, Buy American Act and Balance of Payments Program; and 
252.225-7036, Buy American Act--Free Trade Agreements--Balance of 
Payments Program, instead of the meaning in FAR 25.003.
    (5) Eligible product means, instead of the definition in FAR 
25.003--
    (i) A foreign end product that--
    (A) Is in a category listed in 225.401-70; and
    (B) Is not subject to discriminatory treatment, due to the 
applicability of a trade agreement to a particular acquisition;
    (ii) A foreign construction material that is not subject to 
discriminatory treatment, due to the applicability of a trade agreement 
to a particular acquisition; or
    (iii) A foreign service that is not subject to discriminatory 
treatment, due to the applicability of a trade agreement to a particular 
acquisition.
    (6) Foreign concern means any concern other than a domestic concern.
    (7) Nonqualifying country means a country other than the United 
States or a qualifying country.
    (8) Nonqualifying country component means a component mined, 
produced, or manufactured in a nonqualifying country.
    (9) Qualifying country means a country with a memorandum of 
understanding or international agreement with the United States. 
Qualifying countries are listed in 225.872-1.
    (10) Qualifying country component and qualifying country end product 
are defined in the clauses at 252.225-7001, Buy American Act and Balance 
of Payments Program; and 252.225-7036, Buy American Act--Free Trade 
Agreements--Balance of Payments Program. Qualifying country end product 
is also defined in the clause at 252.225-7021, Trade Agreements.

[[Page 132]]

    (11) Qualifying country offer means an offer of a qualifying country 
end product, including the price of transportation to destination.
    (12) Source, when restricted by words such as foreign, domestic, or 
qualifying country, means the actual manufacturer or producer of the end 
product or component.

[68 FR 15618, Mar. 31, 2003, as amended at 69 FR 1927, Jan. 13, 2004; 70 
FR 73153, Dec. 9, 2005]

                 Subpart 225.1_Buy American Act_Supplies

    Source: 68 FR 15618, Mar. 31, 2003, unless otherwise noted.



Sec. 225.101  General.

    (a) For DoD, the following two-part test determines whether a 
manufactured end product is a domestic end product:
    (i) The end product is manufactured in the United States; and
    (ii) The cost of its U.S. and qualifying country components exceeds 
50 percent of the cost of all its components. This test is applied to 
end products only and not to individual components.
    (c) Additional exceptions that allow the purchase of foreign end 
products are listed at 225.103.



Sec. 225.103  Exceptions.

    (a)(i)(A) Public interest exceptions for certain countries are in 
225.872.
    (B) For procurements covered by the World Trade Organization 
Government Procurement Agreement, the Under Secretary of Defense 
(Acquisition, Technology, and Logistics) has determined that it is 
inconsistent with the public interest to apply the Buy American Act to 
end products that are substantially transformed in the United States.
    (ii)(A) Normally, use the evaluation procedures in Subpart 225.5, 
but consider recommending a public interest exception if the purposes of 
the Buy American Act are not served, or in order to meet a need set 
forth in 10 U.S.C. 2533. For example, a public interest exception may be 
appropriate--
    (1) If accepting the low domestic offer will involve substantial 
foreign expenditures, or accepting the low foreign offer will involve 
substantial domestic expenditures;
    (2) To ensure access to advanced state-of-the-art commercial 
technology; or
    (3) To maintain the same source of supply for spare and replacement 
parts (also see paragraph (b)(iii)(B) of this section)--
    (i) For an end item that qualifies as a domestic end product; or
    (ii) In order not to impair integration of the military and 
commercial industrial base.
    (B) Except as provided in 225.872-4(b), process a determination for 
a public interest exception after consideration of the factors in 10 
U.S.C. 2533--
    (1) At a level above the contracting officer for acquisitions valued 
at or below the simplified acquisition threshold;
    (2) By the head of the contracting activity for acquisitions with a 
value greater than the simplified acquisition threshold but less than 
$1,000,000; or
    (3) By the agency head for acquisitions valued at $1,000,000 or 
more.
    (b)(i) A determination that an article, material, or supply is not 
reasonably available is required when domestic offers are insufficient 
to meet the requirement and award is to be made on other than a 
qualifying country or eligible end product.
    (ii) Except as provided in FAR 25.103(b)(3), the determination shall 
be approved--
    (A) At a level above the contracting officer for acquisitions valued 
at or below the simplified acquisition threshold;
    (B) By the chief of the contracting office for acquisitions with a 
value greater than the simplified acquisition threshold but less than 
$1,000,000; or
    (C) By the head of the contracting activity or immediate deputy for 
acquisitions valued at $1,000,000 or more.
    (iii) A separate determination as to whether an article is 
reasonably available is not required for the following articles. DoD has 
already determined that these articles are not reasonably available from 
domestic sources:

[[Page 133]]

    (A) End products or components listed in 225.104(a).
    (B) Spare or replacement parts that must be acquired from the 
original foreign manufacturer or supplier.
    (C) Foreign drugs acquired by the Defense Supply Center, 
Philadelphia, when the Director, Pharmaceuticals Group, Directorate of 
Medical Materiel, determines that only the requested foreign drug will 
fulfill the requirements.
    (iv) Under coordinated acquisition (see Subpart 208.70), the 
determination is the responsibility of the requiring department when the 
requiring department specifies acquisition of a foreign end product.
    (c) The cost of a domestic end product is unreasonable if it is not 
the low evaluated offer when evaluated under Subpart 225.5.

[68 FR 15618, Mar. 31, 2003, as amended at 70 FR 2362, Jan. 13, 2005]



Sec. 225.104  Nonavailable articles.

    (a) DoD has determined that the following articles also are 
nonavailable in accordance with FAR 25.103(b):
    (i) Aluminum clad steel wire.
    (ii) Sperm oil.



Sec. 225.105  Determining reasonableness of cost.

    (b) Use an evaluation factor of 50 percent instead of the factors 
specified in FAR 25.105(b).



Sec. 225.170  Acquisition from or through other Government agencies.

    Contracting activities must apply the evaluation procedures in 
Subpart 225.5 when using Federal supply schedules.

          Subpart 225.2_Buy American Act_Construction Materials



Sec. 225.202  Exceptions.

    (a)(2) A nonavailability determination is not required for 
construction materials listed in FAR 25.104(a) or in 225.104(a). For 
other materials, a nonavailability determination shall be approved at 
the levels specified in 225.103(b)(ii). Use the estimated value of the 
construction materials to determine the approval level.

[65 FR 19851, Apr. 13, 2000, as amended at 68 FR 15619, Mar. 31, 2003]



Sec. 225.206  Noncompliance.

    (c)(4) Prepare any report of noncompliance in accordance with the 
procedures at 209.406-3 or 209.407-3.

[64 FR 62986, Nov. 18, 1999]

                     Subpart 225.4_Trade Agreements

    Source: 65 FR 19852, Apr. 13, 2000, unless otherwise noted.



Sec. 225.401  Exceptions.

    (a)(2) If a department or agency considers an individual acquisition 
of a product to be indispensable for national security or national 
defense purposes and appropriate for exclusion from the provisions of 
FAR Subpart 25.4, it may submit a request with supporting rationale to 
the Director of Defense Procurement and Acquisition Policy 
(OUSD(AT&L)DPAP). Approval by OUSD(AT&L)DPAP is not required if--
    (A) Purchase from foreign sources is restricted by statute (see 
Subpart 225.70);
    (B) Another exception in FAR 25.401 applies to the acquisition; or
    (C) Competition from foreign sources is restricted under Subpart 
225.71.

[68 FR 15619, Mar. 31, 2003]



Sec. 225.401-70  End products subject to trade agreements.

    Acquisitions of end products in the following Federal supply groups 
(FSG) are covered by trade agreements if the value of the acquisition is 
at or above the applicable trade agreement threshold and no exception 
applies. If an end product is not in one of the listed groups, the trade 
agreements do not apply. The definition of Caribbean Basin country end 
products in FAR 25.003 excludes those end products that are not eligible 
for duty-free treatment under 19 U.S.C. 2703(b). Therefore certain 
watches, watch parts, and luggage from certain Caribbean Basin countries 
are not eligible products. However,

[[Page 134]]

225.003 expands the definition of Caribbean Basin country end products 
to include petroleum and any product derived from petroleum, in 
accordance with Section 8094 of Pub. L. 103-139.

 
              FSG                          Category/Description
 
22                               Railway equipment
23                               Motor vehicles, trailers, and cycles
                                  (except 2350 and buses under 2310)
24                               Tractors
25                               Vehicular equipment components
26                               Tires and tubes
29                               Engine accessories
30                               Mechanical power transmission equipment
32                               Woodworking machinery and equipment
34                               Metalworking machinery
35                               Service and trade equipment
36                               Special industry machinery (except
                                  3690)
37                               Agricultural machinery and equipment
38                               Construction, mining, excavating, and
                                  highway maintenance equipment
39                               Materials handling equipment
40                               Rope, cable, chain and fittings
41                               Refrigeration and air conditioning
                                  equipment
42                               Fire fighting, rescue and safety
                                  equipment
43                               Pumps and compressors
44                               Furnace, steam plant and drying
                                  equipment (except 4470)
45                               Plumbing, heating, and sanitation
                                  equipment
46                               Water purification and sewage treatment
                                  equipment
47                               Piping, tubing, hose, and fitting
48                               Valves
49                               Maintenance and repair shop equipment
                                  (except 4920-4927, 4931-4935, 4960)
53                               Hardware and abrasives
54                               Prefabricated structures and
                                  scaffolding
55                               Lumber, millwork, plywood, and veneer
56                               Construction and building materials
61                               Electric wire, and power and
                                  distribution equipment
62                               Lighting fixtures and lamps
63                               Alarm and signal systems
65                               Medical, dental, and veterinary
                                  equipment and supplies
66                               Instruments and laboratory equipment
                                  (except aircraft clocks under 6645)--
                                  See FAR 25.003 exclusion of certain
                                  watches and watch parts for certain
                                  Caribbean Basin countries
67                               Photographic equipment
68                               Chemicals and chemical products
69                               Training aids and devices
70                               General purpose ADPE, software,
                                  supplies, and support equipment
71                               Furniture
72                               Household and commercial furnishings
                                  and appliances
73                               Food preparation and serving equipment
74                               Office machines, visible record
                                  equipment and ADP equipment
75                               Office supplies and devices
76                               Books, maps, and other publications
77                               Musical instruments, phonographs, and
                                  home type radios
78                               Recreational and athletic equipment
79                               Cleaning equipment and supplies
80                               Brushes, paints, sealers, and adhesives
81                               Containers, packaging and packing
                                  supplies (except 8140)
83                               Pins, needles, and sewing kits (only
                                  part of 8315) and flag staffs,
                                  flagpoles, and flagstaff trucks (only
                                  part of 8345)
84                               Luggage (only 8460)--See FAR 25.003 for
                                  exclusion of luggage for Caribbean
                                  Basin countries
85                               Toiletries
87                               Agricultural supplies
88                               Live animals
89                               Tobacco products (only 8975)
91                               Fuels, oils, and waxes
93                               Nonmetallic fabricated materials
94                               Nonmetallic crude materials
96                               Ores, minerals, and their primary
                                  products
99                               Miscellaneous
 


[65 FR 19852, Apr. 13, 2000, as amended at 68 FR 15619, Mar. 31, 2003; 
69 FR 1927, Jan. 13, 2004; 70 FR 2363, Jan. 13, 2005; 70 FR 73154, Dec. 
9, 2005; 71 FR 9270, Feb. 23, 2006]



Sec. 225.402  General.

    To estimate the value of the acquisition, use the total estimated 
value of end products covered by trade agreements (see 225.401-70).

[70 FR 2363, Jan. 13, 2005]



Sec. 225.403  World Trade Organization Government Procurement Agreement 
          and Free Trade Agreements.

    (c) For acquisitions of supplies covered by the World Trade 
Organization Government Procurement Agreement, acquire only U.S.-made, 
qualifying country, or designated country end products unless--
    (i) The contracting officer determines that offers of U.S.-made, 
qualifying country, or designated country

[[Page 135]]

end products from responsive, responsible offerors are either--
    (A) Not received; or
    (B) Insufficient to fill the Government's requirements. In this 
case, accept all responsive, responsible offers of U.S.-made, qualifying 
country, and eligible products before accepting any other offers; or
    (ii) A national interest waiver under 19 U.S.C. 2512(b)(2) is 
granted on a case-by-case basis. Except as delegated in paragraphs 
(c)(i)(A) and (B) of this section, submit any request for a national 
interest waiver to the Director of Defense Procurement and Acquisition 
Policy in accordance with department or agency procedures. Include 
supporting rationale with the request.
    (A) The head of the contracting activity may approve a national 
interest waiver for a purchase by an overseas purchasing activity, if 
the waiver is supported by a written statement from the requiring 
activity that the products being acquired are critical for the support 
of U.S. forces stationed abroad.
    (B) The Commander or Director, Defense Energy Support Center, may 
approve national interest waivers for purchases of fuel for use by U.S. 
forces overseas.

[68 FR 15619, Mar. 31, 2003, as amended at 70 FR 2363, Jan. 13, 2005]



Sec. 225.408  Procedures.

    (a)(4) The requirements of FAR 25.408(a)(4), on submission of offers 
in U.S. dollars, do not apply to overseas acquisitions or to Defense 
Energy Support Center post, camp, or station overseas requirements.

[70 FR 73154, Dec. 9, 2005]

        Subpart 225.5_Evaluating Foreign Offers_Supply Contracts

    Source: 68 FR 15620, Mar. 31, 2003, unless otherwise noted.



Sec. 225.502  Application.

    (b) Use the following procedures instead of the procedures in FAR 
25.502(b) for acquisitions subject to the World Trade Organization 
Government Procurement Agreement:
    (i) Consider only offers of U.S.-made, qualifying country, or 
designated country end products, except as permitted by 225.403.
    (ii) If price is the determining factor, award on the low offer.
    (c) Use the following procedures instead of those in FAR 25.502(c) 
for acquisitions subject to the Buy American Act or the Balance of 
Payments Program:
    (i)(A) If the acquisition is subject only to the Buy American Act or 
the Balance of Payments Program, then only qualifying country end 
products are exempt from application of the Buy American Act or Balance 
of Payments Program evaluation factor.
    (B) If the acquisition is also subject to a Free Trade Agreement, 
then eligible products of the applicable Free Trade Agreement country 
are also exempt from application of the Buy American Act or Balance of 
Payments Program evaluation factor.
    (ii) If price is the determining factor, use the following 
procedures:
    (A) If the low offer is a domestic offer, award on that offer.
    (B) If there are no domestic offers, award on the low offer (see 
example in 225.504(1)).
    (C) If the low offer is a foreign offer that is exempt from 
application of the Buy American Act or Balance of Payments Program 
evaluation factor, award on that offer. (If the low offer is a 
qualifying country offer from a country listed at 225.872-1(b), execute 
a determination in accordance with 225.872-4.)
    (D) If the low offer is a foreign offer that is not exempt from 
application of the Buy American Act or Balance of Payments Program 
evaluation factor, and there is another foreign offer that is exempt and 
is lower than the lowest domestic offer, award on the low foreign offer 
(see example in 225.504(2)).
    (E) Otherwise, apply the 50 percent evaluation factor to the low 
foreign offer.
    (1) If the price of the low domestic offer is less than the 
evaluated price of the low foreign offer, award on the low domestic 
offer (see example in 225.504(3)).
    (2) If the evaluated price of the low foreign offer remains less 
than the low domestic offer, award on the low foreign offer (see example 
in 225.504(4)).

[[Page 136]]

    (iii) If price is not the determining factor, use the following 
procedures:
    (A) If there are domestic offers, apply the 50 percent Buy American 
Act or Balance of Payments Program evaluation factor to all foreign 
offers unless an exemption applies.
    (B) Evaluate in accordance with the criteria of the solicitation.
    (C) If these procedures will not result in award on a domestic 
offer, reevaluate offers without the 50 percent factor. If this will 
result in award on an offer to which the Buy American Act or Balance of 
Payments Program applies, but evaluation in accordance with paragraph 
(c)(ii) of this section would result in award on a domestic offer, 
proceed with award only after execution of a determination in accordance 
with 225.103(a)(ii)(B), that domestic preference would be inconsistent 
with the public interest.

[68 FR 15620, Mar. 31, 2003, as amended at 69 FR 1928, Jan. 13, 2004; 69 
FR 74992, Dec. 15, 2004; 70 FR 2363, Jan. 13, 2005]



Sec. 225.503  Group offers.

    Evaluate group offers in accordance with FAR 25.503, but apply the 
evaluation procedures of 225.502.



Sec. 225.504  Evaluation examples.

    For examples that illustrate the evaluation procedures in 
225.502(c)(ii), see PGI 225.504.

[70 FR 73154, Dec. 9, 2005]

                    Subpart 225.7_Prohibited Sources



Sec. 225.701  Restrictions.

    See 209.104-1(g) for restrictions on contracting with firms owned or 
controlled by foreign governments.

[70 FR 73154, Dec. 9, 2005]



Sec. 225.701-70  Exception.

    DoD personnel are authorized to make emergency acquisitions in 
direct support of U.S. or allied forces deployed in military 
contingency, humanitarian, or peacekeeping operations in a country or 
region subject to economic sanctions administered by the Department of 
the Treasury, Office of Foreign Assets Control.

[68 FR 7441, Feb. 14, 2003]



Sec. 225.770  Prohibition on acquisition of United States Munitions List 
          items from Communist Chinese military companies.

    This section implements Section 1211 of the National Defense 
Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). See PGI 
225.770 for additional information relating to this statute, the terms 
used in this section, and the United States Munitions List.

[71 FR 53046, Sept. 8, 2006]



Sec. 225.770-1  Definitions.

    As used in this section--
    (a) Communist Chinese military company and United States Munitions 
List are defined in the clause at 252.225-7007, Prohibition on 
Acquisition of United States Munitions List Items from Communist Chinese 
Military Companies.
    (b) Component means an item that is useful only when used in 
conjunction with an end item (22 CFR 121.8).
    (c) Part means any single unassembled element of a major or minor 
component, accessory, or attachment, that is not normally subject to 
disassembly without the destruction or impairment of design use (22 CFR 
121.8).

[71 FR 53046, Sept. 8, 2006]



Sec. 225.770-2  Prohibition.

    Do not acquire supplies or services covered by the United States 
Munitions List (USML) (22 CFR part 121), through a contract or 
subcontract at any tier, from any Communist Chinese military company. 
This prohibition does not apply to components and parts of covered items 
unless the components and parts are themselves covered by the USML.

[71 FR 53046, Sept. 8, 2006]



Sec. 225.770-3  Exceptions.

    The prohibition in 225.770-2 does not apply to supplies or services 
acquired--
    (a) In connection with a visit to the People's Republic of China by 
a vessel or an aircraft of the U.S. armed forces;
    (b) For testing purposes; or
    (c) For the purpose of gathering intelligence.

[71 FR 53046, Sept. 8, 2006]

[[Page 137]]



Sec. 225.770-4  Identifying USML items.

    (a) Before issuance of a solicitation, the requiring activity shall 
notify the contracting officer in writing whether the items to be 
acquired are covered by the USML. The notification shall identify any 
covered item(s) and shall provide the pertinent USML reference(s) from 
22 CFR Part 121.
    (b) The USML includes defense articles and defense services that 
fall into 21 categories. Since not all USML items are themselves 
munitions (e.g., protective personnel equipment, military training 
equipment), the requiring activity should consult the USML before 
concluding that an item is or is not covered by the USML.

[71 FR 53046, Sept. 8, 2006]



Sec. 225.770-5  Waiver of prohibition.

    (a) The prohibition in 225.770-2 may be waived, on a case-by-case 
basis, if an official identified in paragraph (b) of this subsection 
determines that a waiver is necessary for national security purposes.
    (b) The following officials are authorized, without power of 
delegation, to make the determination specified in paragraph (a) of this 
subsection:
    (1) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics).
    (2) The Secretaries of the military departments.
    (3) The Component Acquisition Executive of the Defense Logistics 
Agency.
    (c) The official granting a waiver shall notify the congressional 
defense committees within 30 days after the date of the waiver.

[71 FR 53046, Sept. 8, 2006]

      Subpart 225.8_Other International Agreements and Coordination

    Source: 68 FR 15621, Mar. 31, 2003, unless otherwise noted.



Sec. 225.802  Procedures.

    (b) Information on memoranda of understanding and other 
international agreements is available at PGI 225.802(b).

[70 FR 73154, Dec. 9, 2005]



Sec. 225.802-70  Contracts for performance outside the United States and 
          Canada.

    Follow the procedures at PGI 225.802-70 when placing a contract 
requiring performance outside the United States and Canada. Also see 
Subpart 225.74, Defense Contractors Outside the United States.

[70 FR 23801, May 5, 2005]



Sec. 225.802-71  End use certificates.

    Contracting officers considering the purchase of an item from a 
foreign source may encounter a request for the signing of a certificate 
to indicate that the Armed Forces of the United States is the end user 
of the item, and that the U.S. Government will not transfer the item to 
third parties without authorization from the Government of the country 
selling the item. When encountering this situation, refer to DoD 
Directive 2040.3, End Use Certificates, for guidance.



Sec. 225.870  Contracting with Canadian contractors.



Sec. 225.870-1  General.

    (a) The Canadian Government guarantees to the U.S. Government all 
commitments, obligations, and covenants of the Canadian Commercial 
Corporation under any contract or order issued to the Corporation by any 
contracting office of the U.S. Government. The Canadian Government has 
waived notice of any change or modification that may be made, from time 
to time, in these commitments, obligations, or covenants.
    (b) For production planning purposes, Canada is part of the defense 
industrial base (see 225.870-2(b)).
    (c) The Canadian Commercial Corporation will award and administer 
contracts with contractors located in Canada, except for--
    (1) Negotiated acquisitions for experimental, developmental, or 
research work under projects other than the Defense Development Sharing 
Program;
    (2) Acquisitions of unusual or compelling urgency;
    (3) Acquisitions at or below the simplified acquisition threshold; 
or
    (4) Acquisitions made by DoD activities located in Canada.

[[Page 138]]

    (d) For additional information on production rights, data, and 
information; services provided by Canadian Commercial Corporation; 
audit; and inspection, see PGI 225.870-1(d).

[68 FR 15621, Mar. 31, 2003, as amended at 70 FR 73154, Dec. 9, 2005]



Sec. 225.870-2  Solicitation of Canadian contractors.

    (a) Except for acquisitions described in 225.870-1(c)(1) through 
(4), include Canadian firms on solicitation mailing lists and comparable 
source lists only at the request of the Canadian Commercial Corporation.
    (b) Include Canadian planned producers under the Industrial 
Preparedness Production Planning Program on solicitation mailing lists 
for their planned items (see FAR 14.205-1).
    (c) Send solicitations directly to Canadian firms appearing on the 
appropriate solicitation mailing lists. Send a complete copy of the 
solicitation and a listing of Canadian firms solicited to the Canadian 
Commercial Corporation, 11th Floor, 50 O'Connor Street, Ottawa, Ontario, 
K1A-0S6, Canada.
    (d) If requested, furnish a solicitation to the Canadian Commercial 
Corporation even if no Canadian firm is solicited.
    (e) Handle acquisitions at or below the simplified acquisition 
threshold directly with Canadian firms and not through the Canadian 
Commercial Corporation.



Sec. 225.870-3  Submission of offers.

    (a) As indicated in 225.870-4, the Canadian Commercial Corporation 
is the prime contractor. To indicate acceptance of offers by individual 
Canadian companies, the Canadian Commercial Corporation issues a letter 
supporting the Canadian offer and containing the following information:
    (1) Name of the Canadian offeror.
    (2) Confirmation and endorsement of the offer in the name of the 
Canadian Commercial Corporation.
    (3) A statement that the Corporation shall subcontract 100 percent 
with the offeror.
    (b) When a Canadian offer cannot be processed through the Canadian 
Commercial Corporation in time to meet the date for receipt of offers, 
the Corporation may permit Canadian firms to submit offers directly. 
However, the contracting officer shall receive the Canadian Commercial 
Corporation's endorsement before contract award.
    (c) The Canadian Commercial Corporation will submit all sealed bids 
in terms of U.S. currency. Do not adjust contracts awarded under sealed 
bidding for losses or gains from fluctuation in exchange rates.
    (d) Except for sealed bids, the Canadian Commercial Corporation 
normally will submit offers and quotations in terms of Canadian 
currency. The Corporation may, at the time of submitting an offer, elect 
to quote and receive payment in terms of U.S. currency, in which case 
the contract--
    (1) Shall provide for payment in U.S. currency; and
    (2) Shall not be adjusted for losses or gains from fluctuation in 
exchange rates.



Sec. 225.870-4  Contracting procedures.

    (a) Except for contracts described in 225.870-1(c)(1) through (4), 
award individual contracts covering purchases from suppliers located in 
Canada to the Canadian Commercial Corporation, 11th Floor, 50 O'Connor 
Street, Ottawa, Ontario, Canada, K1A-0S6.
    (b) Direct communication with the Canadian supplier is authorized 
and encouraged in connection with all technical aspects of the contract, 
provided the Corporation's approval is obtained on any matters involving 
changes to the contract.
    (c) Identify in the contract, the type of currency, i.e., U.S. or 
Canadian. Contracts that provide for payment in Canadian currency 
shall--
    (1) Quote the contract price in terms of Canadian dollars and 
identify the amount by the initials ``CN'', e.g., $1,647.23CN; and
    (2) Clearly indicate on the face of the contract the U.S./Canadian 
conversion rate at the time of award and the U.S. dollar equivalent of 
the Canadian dollar contract amount.



Sec. 225.870-5  Contract administration.

    Follow the contract administration procedures at PGI 225.870-5.

[70 FR 73155, Dec. 9, 2005]

[[Page 139]]



Sec. 225.870-6  Termination procedures.

    When contract termination is necessary, follow the procedures at 
249.7000.

[71 FR 27645, May 12, 2006]



Sec. 225.870-7  Acceptance of Canadian supplies.

    For information on the acceptance of Canadian supplies, see PGI 
225.870-7.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.870-8  Industrial security.

    Industrial security for Canada shall be in accordance with the U.S.-
Canada Industrial Security Agreement of March 31, 1952, as amended.



Sec. 225.871  North Atlantic Treaty Organization (NATO) cooperative 
          projects.



Sec. 225.871-1  Scope.

    This section implements 22 U.S.C. 2767 and 10 U.S.C. 2350b.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.871-2  Definitions.

    As used in this section--
    (a) Cooperative project means a jointly managed arrangement--
    (1) Described in a written agreement between the parties;
    (2) Undertaken to further the objectives of standardization, 
rationalization, and interoperability of the armed forces of NATO member 
countries; and
    (3) Providing for--
    (i) One or more of the other participants to share with the United 
States the cost of research and development, testing, evaluation, or 
joint production (including follow-on support) of certain defense 
articles;
    (ii) Concurrent production in the United States and in another 
member country of a defense article jointly developed; or
    (iii) Acquisition by the United States of a defense article or 
defense service from another member country.
    (b) Other participant means a cooperative project participant other 
than the United States.



Sec. 225.871-3  General.

    (a) Cooperative project authority. (1) Departments and agencies, 
that have authority to do so, may enter into cooperative project 
agreements with NATO or with one or more member countries of NATO under 
DoDD 5530.3, International Agreements.
    (2) Under laws and regulations governing the negotiation and 
implementation of cooperative project agreements, departments and 
agencies may enter into contracts, or incur other obligations, on behalf 
of other participants without charge to any appropriation or contract 
authorization.
    (3) Agency heads are authorized to solicit and award contracts to 
implement cooperative projects.
    (b) Contracts implementing cooperative projects shall comply with 
all applicable laws relating to Government acquisition, unless a waiver 
is granted under 225.871-4. A waiver of certain laws and regulations may 
be obtained if the waiver--
    (1) Is required by the terms of a written cooperative project 
agreement;
    (2) Will significantly further NATO standardization, 
rationalization, and interoperability; and
    (3) Is approved by the appropriate DoD official.



Sec. 225.871-4  Statutory waivers.

    (a) For contracts or subcontracts placed outside the United States, 
the Deputy Secretary of Defense may waive any provision of law that 
specifically prescribes--
    (1) Procedures for the formation of contracts;
    (2) Terms and conditions for inclusion in contracts;
    (3) Requirements or preferences for--
    (i) Goods grown, produced, or manufactured in the United States or 
in U.S. Government-owned facilities; or
    (ii) Services to be performed in the United States; or
    (4) Requirements regulating the performance of contracts.
    (b) There is no authority for waiver of--
    (1) Any provision of the Arms Export Control Act (22 U.S.C. 2751);
    (2) Any provision of 10 U.S.C. 2304;
    (3) The cargo preference laws of the United States, including the 
Military Cargo Preference Act of 1904 (10 U.S.C. 2631) and the Cargo 
Preference Act of 1954 (46 U.S.C. 1241(b)); or

[[Page 140]]

    (4) Any of the financial management responsibilities administered by 
the Secretary of the Treasury.
    (c) Forward any request for waiver under a cooperative project to 
the Deputy Secretary of Defense, through the Director of Defense 
Procurement and Acquisition Policy, Office of the Under Secretary of 
Defense (Acquisition, Technology, and Logistics). The waiver request 
shall include a draft Determination and Findings for signature by the 
Deputy Secretary of Defense establishing that the waiver is necessary to 
significantly further NATO standardization, rationalization, and 
interoperability.
    (d) Obtain the approval of the Deputy Secretary of Defense before 
committing to make a waiver in an agreement or a contract.



Sec. 225.871-5  Directed Subcontracting.

    (a) The Director of Defense Procurement and Acquisition Policy may 
authorize the direct placement of subcontracts with particular 
subcontractors. Directed subcontracting is not authorized unless 
specifically addressed in the cooperative project agreement.
    (b) In some instances, it may not be feasible to name specific 
subcontractors at the time the agreement is concluded. However, the 
agreement shall clearly state the general provisions for work sharing at 
the prime and subcontract level. For additional information on 
cooperative project agreements, see PGI 225.871-5.

[68 FR 15621, Mar. 31, 2003, as amended at 70 FR 73155, Dec. 9, 2005]



Sec. 225.871-6  Disposal of property.

    Dispose of property that is jointly acquired by the members of a 
cooperative project under the procedures established in the agreement or 
in a manner consistent with the terms of the agreement, without regard 
to any laws of the United States applicable to the disposal of property 
owned by the United States.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.871-7  Congressional notification.

    (a) Congressional notification is required when DoD makes a 
determination to award a contract or subcontract to a particular entity, 
if the determination was not part of the certification made under 22 
U.S.C. 2767(f) before finalizing the cooperative agreement.
    (1) Departments and agencies shall provide a proposed Congressional 
notice to the Director of Defense Procurement and Acquisition Policy in 
sufficient time to forward to Congress before the time of contract 
award.
    (2) The proposed notice shall include the reason it is necessary to 
use the authority to designate a particular contractor or subcontractor.
    (b) Congressional notification is also required each time a 
statutory waiver under 225.871-4 is incorporated in a contract or a 
contract modification, if such information was not provided in the 
certification to Congress before finalizing the cooperative agreement.



Sec. 225.872  Contracting with qualifying country sources.



Sec. 225.872-1  General.

    (a) As a result of memoranda of understanding and other 
international agreements, DoD has determined it inconsistent with the 
public interest to apply restrictions of the Buy American Act or the 
Balance of Payments Program to the acquisition of qualifying country end 
products from the following qualifying countries:

Australia
Belgium
Canada
Denmark
Egypt
Federal Republic of Germany
France
Greece
Israel
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
Turkey
United Kingdom of Great Britain and Northern Ireland

    (b) Individual acquisitions of qualifying country end products from 
the following qualifying countries may, on a purchase-by-purchase basis 
(see

[[Page 141]]

225.872-4), be exempted from application of the Buy American Act and the 
Balance of Payments Program as inconsistent with the public interest:

Austria
Finland

    (c) The determination in paragraph (a) of this subsection does not 
limit the authority of the Secretary concerned to restrict acquisitions 
to domestic sources or reject an otherwise acceptable offer from a 
qualifying country source when considered necessary for national defense 
reasons.

[68 FR 15621, Mar. 31, 2003, as amended at 69 FR 8116, Feb. 23, 2004]



Sec. 225.872-2  Applicability.

    (a) This section applies to all acquisitions of supplies except 
those restricted by--
    (1) U.S. National Disclosure Policy, DoDD 5230.11, Disclosure of 
Classified Military Information to Foreign Governments and International 
Organizations;
    (2) U.S. defense mobilization base requirements purchased under the 
authority of FAR 6.302-3(a)(2)(i), except for quantities in excess of 
that required to maintain the defense mobilization base. This 
restriction does not apply to Canadian planned producers.
    (i) Review individual solicitations to determine whether this 
restriction applies.
    (ii) Information concerning restricted items may be obtained from 
the Deputy Under Secretary of Defense (Industrial Affairs);
    (3) Other U.S. laws or regulations (e.g., the annual DoD 
appropriations act); and
    (4) U.S. industrial security requirements.
    (b) This section does not apply to construction contracts.



Sec. 225.872-3  Solicitation procedures.

    (a) Include qualifying country sources on solicitation mailing lists 
upon their request (see FAR 14.205).
    (b) Except for items developed under the U.S./Canadian Development 
Sharing Program, use the criteria for soliciting and awarding contracts 
to small business concerns under FAR Part 19 without regard to whether 
there are potential qualifying country sources for the end product. Do 
not consider an offer of a qualifying country end product if the 
solicitation is identified for the exclusive participation of small 
business concerns.
    (c) Send solicitations directly to qualifying country sources. 
Solicit Canadian sources through the Canadian Commercial Corporation in 
accordance with 225.870.
    (d) Use international air mail if solicitation destinations are 
outside the United States and security classification permits such use.
    (e) If unusual technical or security requirements preclude the 
acquisition of otherwise acceptable defense equipment from qualifying 
country sources, review the need for such requirements. Do not impose 
unusual technical or security requirements solely for the purpose of 
precluding the acquisition of defense equipment from qualifying 
countries.
    (f) Do not automatically exclude qualifying country sources from 
submitting offers because their supplies have not been tested and 
evaluated by the department or agency.
    (1) Consider the adequacy of qualifying country service testing on a 
case-by-case basis. Departments or agencies that must limit 
solicitations to sources whose items have been tested and evaluated by 
the department or agency shall consider supplies from qualifying country 
sources that have been tested and accepted by the qualifying country for 
service use.
    (2) The department or agency may perform a confirmatory test, if 
necessary.
    (3) Apply U.S. test and evaluation standards, policies, and 
procedures when the department or agency decides that confirmatory tests 
of qualifying country end products are necessary.
    (4) If it appears that these provisions might adversely delay 
service programs, obtain the concurrence of the Under Secretary of 
Defense (Acquisition, Technology, and Logistics), before excluding the 
qualifying country source from consideration.
    (g) Permit industry representatives from a qualifying country to 
attend symposia, program briefings, prebid conferences (see FAR 14.207 
and

[[Page 142]]

15.201(c)), and similar meetings that address U.S. defense equipment 
needs and requirements. When practical, structure these meetings to 
allow attendance by representatives of qualifying country concerns.



Sec. 225.872-4  Individual determinations.

    If the offer of an end product from a qualifying country source 
listed in 225.872-1(b), as evaluated, is low or otherwise eligible for 
award, prepare a determination and findings exempting the acquisition 
from the Buy American Act and the Balance of Payments Program as 
inconsistent with the public interest, unless another exception such as 
the Trade Agreements Act applies. Follow the procedures at PGI 225.872-
4.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.872-5  Contract administration.

    (a) Arrangements exist with some qualifying countries to provide 
reciprocal contract administration services. Some arrangements are at no 
cost to either government. To determine whether such an arrangement has 
been negotiated and what contract administration functions are covered, 
contact the Deputy Director of Defense Procurement and Acquisition 
Policy (Program Acquisition and International Contracting), ((703) 697-
9351, DSN 227-9351).
    (b) Follow the contract administration procedures at PGI 225.872-
5(b).
    (c) Information on quality assurance delegations to foreign 
governments is in Subpart 246.4, Government Contract Quality Assurance.

[68 FR 15621, Mar. 31, 2003, as amended at 70 FR 73155, Dec. 9, 2005]



Sec. 225.872-6  Audit.

    (a) Memoranda of understanding with some qualifying countries 
contain annexes that provide for reciprocal ``no-cost'' audits of 
contracts and subcontracts (pre- and post-award).
    (b) To determine if such an annex is applicable to a particular 
qualifying country, contact the Deputy Director of Defense Procurement 
and Acquisition Policy (Program Acquisition and International 
Contracting), ((703) 697-9351, DSN 227-9351).
    (c) Handle requests for audits in qualifying countries in accordance 
with 215.404-2(c), but follow the additional procedures at PGI 225.872-
6(c).

[68 FR 15621, Mar. 31, 2003, as amended at 70 FR 73155, Dec. 9, 2005]



Sec. 225.872-7  Industrial security for qualifying countries.

    The required procedures for safeguarding classified defense 
information necessary for the performance of contracts awarded to 
qualifying country sources are in the DoD Industrial Security Regulation 
DoD 5220.22-R (implemented for the Army by AR 380-49; for the Navy by 
SECNAV Instruction 5510.1H; for the Air Force by AFI 31-601; for the 
Defense Information Systems Agency by DCA Instruction 240-110-8; and for 
the National Imagery and Mapping Agency by NIMA Instruction 5220.22).



Sec. 225.872-8  Subcontracting with qualifying country sources.

    In reviewing contractor subcontracting procedures, the contracting 
officer shall ensure that the contract does not preclude qualifying 
country sources from competing for subcontracts, except when restricted 
by national security interest reasons, mobilization base considerations, 
or applicable U.S. laws or regulations (see the clause at 252.225-7002, 
Qualifying Country Sources as Subcontractors).



Sec. 225.873  Waiver of United Kingdom commercial exploitation levies.



Sec. 225.873-1  Policy.

    DoD and the Government of the United Kingdom (U.K.) have agreed to 
waive U.K. commercial exploitation levies and U.S. nonrecurring cost 
recoupment charges on a reciprocal basis. For U.K. levies to be waived, 
the offeror or contractor shall identify the levies and the contracting 
officer shall request a waiver before award of the contract or 
subcontract under which the levies are charged.



Sec. 225.873-2  Procedures.

    When an offeror or a contractor identifies a levy included in an 
offered or

[[Page 143]]

contract price, follow the procedures at PGI 225.873-2.

[70 FR 73155, Dec. 9, 2005]

                    Subpart 225.9_Customs and Duties

    Source: 68 FR 15626, Mar. 31, 2003, unless otherwise noted.



Sec. 225.901  Policy.

    Unless the supplies are entitled to duty-free treatment under a 
special category in the Harmonized Tariff Schedule of the United States 
(e.g., the Caribbean Basin Economic Recovery Act or a Free Trade 
Agreement), or unless the supplies already have entered into the customs 
territory of the United States and the contractor already has paid the 
duty, DoD will issue duty-free entry certificates for--
    (1) Qualifying country supplies (end products and components);
    (2) Eligible products (end products but not components) under 
contracts covered by the World Trade Organization Government Procurement 
Agreement or a Free Trade Agreement; and
    (3) Other foreign supplies for which the contractor estimates that 
duty will exceed $200 per shipment into the customs territory of the 
United States.

[68 FR 15626, Mar. 31, 2003, as amended at 69 FR 1928, Jan. 13, 2004; 70 
FR 2363, Jan. 13, 2005]



Sec. 225.902  Procedures.

    Follow the entry and release procedures at PGI 225.902.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.903  Exempted supplies.

    (b)(i) For an explanation of the term ``supplies,'' see PGI 
225.903(b)(i).
    (ii) The duty-free certificate shall be printed, stamped, or typed 
on the face of, or attached to, Customs Form 7501. A duly designated 
officer or civilian official of the appropriate department or agency 
shall execute the certificate in the format provided at PGI 
225.903(b)(ii).

[70 FR 73155, Dec. 9, 2005]

        Subpart 225.10_Additional Foreign Acquisition Regulations



Sec. 225.1070  Clause deviations in overseas contracts.

    See 201.403(2) for approval authority for clause deviations in 
overseas contracts with governments of North Atlantic Treaty 
Organization (NATO) countries or other allies or with United Nations or 
NATO organizations.

[65 FR 19856, Apr. 13, 2000]

       Subpart 225.11_Solicitation Provisions and Contract Clauses

    Source: 68 FR 16526, Mar. 31, 2003, unless otherwise noted.



Sec. 225.1100  Scope of subpart.

    This subpart prescribes the clauses that implement Subparts 225.1 
through 225.10. The clauses that implement Subparts 225.70 through 
225.75 are prescribed within those subparts.



Sec. 225.1101  Acquisition of supplies.

    (1) Use the provision at 252.225-7000, Buy American Act--Balance of 
Payments Program Certificate, instead of the provision at FAR 52.225-2, 
Buy American Act Certificate. Use the provision in any solicitation that 
includes the clause at 252.225-7001, Buy American Act and Balance of 
Payments Program.
    (2) Use the clause at 252.225-7001, Buy American Act and Balance of 
Payments Program, instead of the clause at FAR 52.225-1, Buy American 
Act--Supplies, in solicitations and contracts unless-
    (i) All line items will be acquired from a particular source or 
sources under the authority of FAR 6.302-3;
    (ii) All line items must be domestic or qualifying country end 
products in accordance with Subpart 225.70. (However, the clause may 
still be required if Subpart 225.70 requires manufacture of the end 
product in the United States or in the United States or Canada, without 
a corresponding requirement for use of domestic components);
    (iii) An exception to the Buy American Act or Balance of Payments 
Program applies; or

[[Page 144]]

    (iv) One or both of the following clauses will apply to all line 
items in the contract:
    (A) 252.225-7021, Trade Agreements.
    (B) 252.225-7036, Buy American Act--Free Trade Agreements--Balance 
of Payments Program.
    (3) Use the clause at 252.225-7002, Qualifying Country Sources as 
Subcontractors, in solicitations and contracts that include one of the 
following clauses:
    (i) 252.225-7001, Buy American Act and Balance of Payments Program.
    (ii) 252.225-7021, Trade Agreements.
    (iii) 252.225-7036, Buy American Act--Free Trade Agreements--Balance 
of Payments Program.
    (4) Use the clause at 252.225-7013, Duty-Free Entry, instead of the 
clause at FAR 52.225-8. Do not use the clause for acquisitions of 
supplies that will not enter the customs territory of the United States.
    (5) Use the provision at 252.225-7020, Trade Agreements Certificate, 
instead of the provision at FAR 52.225-6, Trade Agreements Certificate, 
in solicitations that include the clause at 252.225-7021, Trade 
Agreements.
    (6)(i) Use the clause at 252.225-7021, Trade Agreements, instead of 
the clause at FAR 52.225-5, Trade Agreements, if the Trade Agreements 
Act applies.
    (ii) Do not use the clause if purchase from foreign sources is 
restricted, unless the contracting officer anticipates a waiver of the 
restriction.
    (iii) The acquisition of eligible and noneligible products under the 
same contract may result in the application of trade agreements to only 
some of the items acquired. In such case, indicate in the Schedule those 
items covered by the Trade Agreements clause.
    (7) Use the provision at 252.225-7032, Waiver of United Kingdom 
Levies-Evaluation of Offers, in solicitations if a U.K. firm is expected 
to--
    (i) Submit an offer; or
    (ii) Receive a subcontract exceeding $1 million.
    (8) Use the clause at 252.225-7033, Waiver of United Kingdom Levies, 
in solicitations and contracts if a U.K. firm is expected to--
    (i) Submit an offer; or
    (ii) Receive a subcontract exceeding $1 million.
    (9) Use the provision at 252.225-7035, Buy American Act--Free Trade 
Agreements--Balance of Payments Program Certificate, instead of the 
provision at FAR 52.225-4, Buy American Act--Free Trade Agreements--
Israeli Trade Act Certificate, in solicitations that include the clause 
at 252.225-7036, Buy American Act--Free Trade Agreements--Balance of 
Payments Program. Use the provision with its Alternate I when the clause 
at 252.225-7036 is used with its Alternate I.
    (10)(i) Use the clause at 252.225-7036, Buy American Act--Free Trade 
Agreements--Balance of Payments Program, instead of the clause at FAR 
52.225-3, Buy American Act--Free Trade Agreements--Israeli Trade Act, in 
solicitations and contracts for the items listed at 225.401-70, when the 
estimated value equals or exceeds $25,000, but is less than $193,000, 
and a Free Trade Agreement applies to the acquisition.
    (A) Use the basic clause when the estimated value equals or exceeds 
$64,786.
    (B) Use the clause with its Alternate I when the estimated value 
equals or exceeds $25,000 but is less than $64,786.
    (ii) Do not use the clause if purchase from foreign sources is 
restricted (see 225.401(a)(2)), unless the contracting officer 
anticipates a waiver of the restriction.
    (iii) The acquisition of eligible and noneligible products under the 
same contract may result in the application of a Free Trade Agreement to 
only some of the items acquired. In such case, indicate in the Schedule 
those items covered by the Buy American Act--Free Trade Agreements--
Balance of Payments Program clause.

[68 FR 15626, Mar. 31, 2003; 68 FR 25088, May 9, 2003, as amended at 69 
FR 1928, Jan. 13, 2004; 71 FR 9271, Feb. 23, 2006]



Sec. 225.1103  Other provisions and clauses.

    (1) Unless the contracting officer knows that the prospective 
contractor is not a domestic concern, use the clause at 252.225-7005, 
Identification of Expenditures in the United States, in solicitations 
and contracts that--
    (i) Exceed the simplified acquisition threshold; and
    (ii) Are for the acquisition of--

[[Page 145]]

    (A) Supplies for use outside the United States;
    (B) Construction to be performed outside the United States; or
    (C) Services to be performed primarily outside the United States.
    (2) Use the clause at 252.225-7041, Correspondence in English, in 
solicitations and contracts when contract performance will be wholly or 
in part in a foreign country.
    (3) Use the provision at 252.225-7042, Authorization to Perform, in 
solicitations when contract performance will be wholly or in part in a 
foreign country.
    (4) Unless an exception in 225.770-3 applies, use the clause at 
252.225-7007, Prohibition on Acquisition of United States Munitions List 
Items from Communist Chinese Military Companies, in solicitations and 
contracts involving the delivery of items covered by the United States 
Munitions List.

[68 FR 16526, Mar. 31, 2003, as amended at 71 FR 39006, July 11, 2006; 
71 FR 53046, Sept. 8, 2006]

   Subpart 225.70_Authorization Acts, Appropriations Acts, and Other 
              Statutory Restrictions on Foreign Acquisition



Sec. 225.7000  Scope of subpart.

    (a) This subpart contains restrictions on the acquisition of foreign 
products and services, imposed by DoD appropriations and authorization 
acts and other statutes. Refer to the acts to verify current 
applicability of the restrictions.
    (b) Nothing in this subpart affects the applicability of the Buy 
American Act or the Balance of Payments Program.

[56 FR 36367, July 31, 1991, as amended at 62 FR 2856, Jan. 17, 1997; 68 
FR 15627, Mar. 31, 2003]



Sec. 225.7001  Definitions.

    As used in this subpart--
    (a) Bearing components is defined in the clause at 252.225-7016, 
Restriction on Acquisition of Ball and Roller Bearings.
    (b) Component is defined in the clauses at 252.225-7012, Preference 
for Certain Domestic Commodities, and 252.225-7016, Restriction on 
Acquisition of Ball and Roller Bearings.
    (c) Hand or measuring tools means those tools listed in Federal 
supply classifications 51 and 52, respectively.
    (d) Specialty metals is defined in the clause at 252.225-7014, 
Preference for Domestic Specialty Metals.

[61 FR 10899, Mar. 18, 1996, as amended at 61 FR 50453, Sept. 26, 1996; 
67 FR 20697, Apr. 26, 2002; 71 FR 14111, Mar. 21, 2006]



Sec. 225.7002-1  Restrictions.

    The following restrictions implement 10 U.S.C. 2533a. Except as 
provided in subsection 225.7002-2, do not acquire--
    (a) Any of the following items, either as end products or 
components, unless the items have been grown, reprocessed, reused, or 
produced in the United States:
    (1) Food.
    (2) Clothing.
    (3) Tents, tarpaulins, or covers.
    (4) Cotton and other natural fiber products.
    (5) Woven silk or woven silk blends.
    (6) Spun silk yarn for cartridge cloth.
    (7) Synthetic fabric or coated synthetic fabric, including all 
textile fibers and yarns that are for use in such fabrics.
    (8) Canvas products.
    (9) Wool (whether in the form of fiber or yarn or contained in 
fabrics, materials, or manufactured articles).
    (10) Any item of individual equipment (Federal Supply Class 8465) 
manufactured from or containing any of the fibers, yarns, fabrics, or 
materials listed in this paragraph (a).
    (b) Specialty metals, including stainless steel flatware, unless the 
metals were melted in steel manufacturing facilities located within the 
United States. (For guidance on dealing with noncompliance with this 
requirement, see PGI 225.7002-1(b).)
    (c) Hand or measuring tools, unless the tools were produced in the 
United States.

[67 FR 20697, Apr. 26, 2002, as amended at 71 FR 39009, July 11, 2006]



Sec. 225.7002-2  Exceptions.

    Acquisitions in the following categories are not subject to the 
restrictions in 225.7002-1:

[[Page 146]]

    (a) Acquisitions at or below the simplified acquisition threshold.
    (b) Acquisitions of any of the items in 225.7002-1(a) or (b), if the 
Secretary concerned determines that items grown, reprocessed, reused, or 
produced in the United States cannot be acquired as and when needed in a 
satisfactory quality and sufficient quantity at U.S. market prices.
    (1) The following officials are authorized, without power of 
redelegation, to make such a domestic nonavailability determination:
    (i) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics).
    (ii) The Secretary of the Army.
    (iii) The Secretary of the Navy.
    (iv) The Secretary of the Air Force.
    (2) The supporting documentation for the determination shall 
include--
    (i) An analysis of alternatives that would not require a domestic 
nonavailability determination; and
    (ii) A written certification by the requiring activity, with 
specificity, why such alternatives are unacceptable.
    (3) Defense agencies shall follow the procedures at PGI 225.7002-
2(b)(3) when submitting a request for a domestic nonavailability 
determination.
    (4) If an official listed in paragraph (b)(1)(ii) through (iv) of 
this subsection makes a domestic nonavailability determination for the 
acquisition of titanium or a product containing titanium, that official 
shall--
    (i) Notify the congressional defense committees at least 10 days 
before the award of a contract that relies on such a determination; and
    (ii) Provide a copy of the notification and the determination to the 
Director, Defense Procurement and Acquisition Policy, as specified in 
PGI 225.7002-2(b)(4).
    (5) See PGI 225.7002-2(b)(5) for related policy memoranda.
    (c) Acquisitions of items listed in FAR 25.104(a), unless the items 
are hand or measuring tools.
    (d) Acquisitions outside the United States in support of combat 
operations.
    (e) Acquisitions of perishable foods by or for activities located 
outside the United States for personnel of those activities.
    (f) Acquisitions of food, specialty metals, or hand or measuring 
tools--
    (1) In support of contingency operations; or
    (2) For which the use of other than competitive procedures has been 
approved on the basis of unusual and compelling urgency in accordance 
with FAR 6.302-2.
    (g) Emergency acquisitions by activities located outside the United 
States for personnel of those activities.
    (h) Acquisitions by vessels in foreign waters.
    (i) Acquisitions of items specifically for commissary resale.
    (j) Acquisitions of end products incidentally incorporating cotton, 
other natural fibers, or wool, for which the estimated value of the 
cotton, other natural fibers, or wool--
    (1) Is not more than 10 percent of the total price of the end 
product; and
    (2) Does not exceed the simplified acquisition threshold.
    (k) Acquisitions of waste and byproducts of cotton or wool fiber for 
use in the production of propellants and explosives.
    (l) Acquisitions of foods manufactured or processed in the United 
States, regardless of where the foods (and any component if applicable) 
were grown or produced. However, in accordance with Section 8118 of the 
DoD Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287), this 
exception does not apply to fish, shellfish, or seafood manufactured or 
processed in the United States or fish, shellfish, or seafood contained 
in foods manufactured or processed in the United States.
    (m) Purchases of specialty metals by subcontractors at any tier for 
programs other than--
    (1) Aircraft;
    (2) Missile and space systems;
    (3) Ships;
    (4) Tank-automotive;
    (5) Weapons; and
    (6) Ammunition.
    (n) Acquisitions of specialty metals and chemical warfare protective 
clothing when the acquisition furthers an agreement with a qualifying 
country (see 225.872).
    (o) Acquisitions of fibers and yarns that are for use in synthetic 
fabric or coated synthetic fabric (but not the

[[Page 147]]

purchase of the synthetic or coated synthetic fabric itself), if--
    (1) The fabric is to be used as a component of an end product that 
is not a textile product. Examples of textile products, made in whole or 
in part of fabric, include--
    (i) Draperies, floor coverings, furnishings, and bedding (Federal 
Supply Group 72, Household and Commercial Furnishings and Appliances);
    (ii) Items made in whole or in part of fabric in Federal Supply 
Group 83, Textile/leather/furs/apparel/findings/tents/flags, or Federal 
Supply Group 84, Clothing, Individual Equipment and Insignia;
    (iii) Upholstered seats (whether for household, office, or other 
use); and
    (iv) Parachutes (Federal Supply Class 1670); or
    (2) The fibers and yarns are para-aramid fibers and yarns 
manufactured in--
    (i) The Netherlands; or
    (ii) Another qualifying country (see 225.872) if the Under Secretary 
of Defense (Acquisition, Technology, and Logistics) makes a 
determination in accordance with Section 807 of Public Law 105-261 
that--
    (A) Procuring articles that contain only para-aramid fibers and 
yarns manufactured from suppliers within the United States would result 
in sole source contracts or subcontracts for the supply of such para-
aramid fibers and yarns;
    (B) Such sole source contracts or subcontracts would not be in the 
best interest of the Government or consistent with the objectives of the 
Competition in Contracting Act (10 U.S.C. 2304); and
    (C) The qualifying country permits U.S. firms that manufacture para-
aramid fibers and yarns to compete with foreign firms for the sale of 
para-aramid fibers and yarns in that country.

[67 FR 20697, Apr. 26, 2002, as amended at 68 FR 7442, Feb. 14, 2003; 69 
FR 26509, May 13, 2004; 69 FR 31910, June 8, 2004; 70 FR 43073, July 26, 
2005; 71 FR 34833, June 16, 2006]



Sec. 225.7002-3  Contract clauses.

    Unless an exception applies--
    (a) Use the clause at 252.225-7012, Preference for Certain Domestic 
Commodities, in solicitations and contracts exceeding the simplified 
acquisition threshold.
    (b)(1) Use the clause at 252.225-7014, Preference for Domestic 
Specialty Metals, in solicitations and contracts exceeding the 
simplified acquisition threshold that require delivery of an article 
containing specialty metals.
    (2) Use the clause with its Alternate I in solicitations and 
contracts exceeding the simplified acquisition threshold requiring 
delivery, for one of the following major programs, of an article 
containing specialty metals:
    (i) Aircraft.
    (ii) Missile and space systems.
    (iii) Ships.
    (iv) Tank-automotive.
    (v) Weapons.
    (vi) Ammunition.
    (c) Use the clause at 252.225-7015, Restriction on Acquisition of 
Hand or Measuring Tools, in solicitations and contracts exceeding the 
simplified acquisition threshold that require delivery of hand or 
measuring tools.

[61 FR 50453, Sept. 26, 1996, as amended at 67 FR 20698, Apr. 26, 2002; 
68 FR 15627, Mar. 31, 2003]



Sec. 225.7003  Waiver of restrictions of 10 U.S.C. 2534.

    (a) The waiver procedures of this section apply only if specifically 
authorized by reference elsewhere in this subpart. The restrictions on 
certain foreign purchases under 10 U.S.C. 2534(a) may be waived as 
follows:
    (1)(i) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics), without power of delegation, may waive a restriction for a 
particular item for a particular foreign country upon determination 
that--
    (A) United States producers of the item would not be jeopardized by 
competition from a foreign country, and that country does not 
discriminate against defense items produced in the United States to a 
greater degree than the United States discriminates against defense 
items produced in that country; or
    (B) Application of the restriction would impede cooperative programs 
entered into between DoD and a foreign country, or would impede the 
reciprocal procurement of defense items under a memorandum of 
understanding

[[Page 148]]

providing for reciprocal procurement of defense items under 225.872, and 
that country does not discriminate against defense items produced in the 
United States to a greater degree than the United States discriminates 
against defense items produced in that country.
    (ii) A notice of the determination to exercise the waiver authority 
shall be published in the Federal Register and submitted to the 
congressional defense committees at least 15 days before the effective 
date of the waiver.
    (iii) The effective period of the waiver shall not exceed 1 year.
    (iv) For contracts entered into prior to the effective date of a 
waiver, provided adequate consideration is received to modify the 
contract, the waiver shall be applied as directed or authorized in the 
waiver to--
    (A) Subcontracts entered into on or after the effective date of the 
waiver; and
    (B) Options for the procurement of items that are exercised after 
the effective date of the waiver, if the option prices are adjusted for 
any reason other than the application of the waiver.
    (2) The head of the contracting activity may waive a restriction on 
a case-by-case basis upon execution of a determination and findings that 
any of the following applies:
    (i) The restriction would cause unreasonable delays.
    (ii) Satisfactory quality items manufactured in the United States or 
Canada are not available.
    (iii) Application of the restriction would result in the existence 
of only one source for the item in the United States or Canada.
    (iv) Application of the restriction is not in the national security 
interests of the United States.
    (v) Application of the restriction would adversely affect a U.S. 
company.
    (3) A restriction is waived when it would cause unreasonable costs. 
The cost of an item of U.S. or Canadian origin is unreasonable if it 
exceeds 150 percent of the offered price, inclusive of duty, of items 
that are not of U.S. or Canadian origin.
    (b) In accordance with the provisions of paragraphs (a)(1)(i) 
through (iii) of this section, the Under Secretary of Defense 
(Acquisition, Technology, and Logistics) has waived the restrictions of 
10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom, 
including air circuit breakers for naval vessels (see 225.7006). This 
waiver applies to--
    (1) Procurements under solicitations issued on or after August 4, 
1998; and
    (2) Subcontracts and options under contracts entered into prior to 
August 4, 1998, under the conditions described in paragraph (a)(1)(iv) 
of this section.

[68 FR 15627, Mar. 31, 2003, as amended at 70 FR 73155, Dec. 9, 2005; 71 
FR 14111, Mar. 21, 2006]



Sec. 225.7004  Restriction on acquisition of foreign buses.



Sec. 225.7004-1  Restriction.

    In accordance with 10 U.S.C. 2534, do not acquire a multipassenger 
motor vehicle (bus) unless it is manufactured in the United States or 
Canada.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7004-2  Applicability.

    Apply this restriction if the buses are purchased, leased, rented, 
or made available under contracts for transportation services.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7004-3  Exceptions.

    This restriction does not apply in any of the following 
circumstances:
    (a) Buses manufactured outside the United States and Canada are 
needed for temporary use because buses manufactured in the United States 
or Canada are not available to satisfy requirements that cannot be 
postponed. Such use may not, however, exceed the lead time required for 
acquisition and delivery of buses manufactured in the United States or 
Canada.
    (b) The requirement for buses is temporary in nature. For example, 
to meet a special, nonrecurring requirement or a sporadic and infrequent 
recurring requirement, buses manufactured outside the United States and 
Canada may be used for temporary periods of time. Such use may not, 
however, exceed the period of time needed to meet the special 
requirement.

[[Page 149]]

    (c) Buses manufactured outside the United States and Canada are 
available at no cost to the U.S. Government.
    (d) The acquisition is for an amount at or below the simplified 
acquisition threshold.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7004-4  Waiver.

    The waiver criteria at 225.7003(a) apply to this restriction.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7005  Restriction on certain chemical weapons antidote.



Sec. 225.7005-1  Restriction.

    In accordance with 10 U.S.C. 2534 and defense industrial 
mobilization requirements, do not acquire chemical weapons antidote 
contained in automatic injectors, or the components for such injectors, 
unless the chemical weapons antidote or component is manufactured in the 
United States or Canada by a company that--
    (a) Is a producer under the industrial preparedness program at the 
time of contract award;
    (b) Has received all required regulatory approvals; and
    (c) Has the plant, equipment, and personnel to perform the contract 
in the United States or Canada at the time of contract award.

[68 FR 15627, Mar. 31, 2003, as amended at 71 FR 39005, July 11, 2006]



Sec. 225.7005-2  Exception.

    This restriction does not apply if the acquisition is for an amount 
at or below the simplified acquisition threshold.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7005-3  Waiver.

    The waiver criteria at 225.7003(a) apply to this restriction.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7006  Restriction on air circuit breakers for naval vessels.



Sec. 225.7006-1  Restriction.

    In accordance with 10 U.S.C. 2534, do not acquire air circuit 
breakers for naval vessels unless they are manufactured in the United 
States or Canada.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7006-2  Exceptions.

    This restriction does not apply if the acquisition is--
    (a) For an amount at or below the simplified acquisition threshold; 
or
    (b) For spare or repair parts needed to support air circuit breakers 
manufactured outside the United States. Support includes the purchase of 
spare air circuit breakers when those from alternate sources are not 
interchangeable.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7006-3  Waiver.

    (a) The waiver criteria at 225.7003(a) apply to this restriction.
    (b) The Under Secretary of Defense (Acquisition, Technology, and 
Logistics) has waived the restriction for air circuit breakers 
manufactured in the United Kingdom. See 225.7003(b) for applicability.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7006-4  Solicitation provision and contract clause.

    (a) Use the provision at 252.225-7037, Evaluation of Offers for Air 
Circuit Breakers, in solicitations requiring air circuit breakers for 
naval vessels unless--
    (1) An exception applies; or
    (2) A waiver has been granted, other than the waiver for the United 
Kingdom, which has been incorporated into the provision.
    (b) Use the clause at 252.225-7038, Restriction on Acquisition of 
Air Circuit Breakers, in solicitations and contracts requiring air 
circuit breakers for naval vessels unless--
    (1) An exception applies; or
    (2) A waiver has been granted, other than the waiver for the United 
Kingdom, which has been incorporated into the clause.

[68 FR 15627, Mar. 31, 2003]

[[Page 150]]



Sec. 225.7007  Restrictions on anchor and mooring chain.



Sec. 225.7007-1  Restrictions.

    (a) In accordance with Section 8041 of the Fiscal Year 1991 DoD 
Appropriations Act (Public Law 101-511) and similar sections in 
subsequent DoD appropriations acts, do not acquire welded shipboard 
anchor and mooring chain, four inches or less in diameter, unless--
    (1) It is manufactured in the United States, including cutting, heat 
treating, quality control, testing, and welding (both forging and shot 
blasting process); and
    (2) The cost of the components manufactured in the United States 
exceeds 50 percent of the total cost of components.
    (b) 10 U.S.C. 2534 also restricts acquisition of welded shipboard 
anchor and mooring chain, four inches or less in diameter, when used as 
a component of a naval vessel. However, the Appropriations Act 
restriction described in paragraph (a) of this subsection takes 
precedence over the restriction of 10 U.S.C. 2534.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7007-2  Waiver.

    (a) The Secretary of the department responsible for acquisition may 
waive the restriction in 225.7007-1(a), on a case-by-case basis, if--
    (1) Sufficient domestic suppliers are not available to meet DoD 
requirements on a timely basis; and
    (2) The acquisition is necessary to acquire capability for national 
security purposes.
    (b) Document the waiver in a written determination and findings 
containing--
    (1) The factors supporting the waiver; and
    (2) A certification that the acquisition must be made in order to 
acquire capability for national security purposes.
    (c) Provide a copy of the determination and findings to the House 
and Senate Committees on Appropriations.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7007-3  Contract clause.

    Unless a waiver has been granted, use the clause at 252.225-7019, 
Restriction on Acquisition of Anchor and Mooring Chain, in solicitations 
and contracts requiring welded shipboard anchor or mooring chain four 
inches or less in diameter.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7008  [Reserved]



Sec. 225.7009  Restriction on ball and roller bearings.



Sec. 225.7009-1  Scope.

    This section implements Section 8065 of the Fiscal Year 2002 DoD 
Appropriations Act (Pub. L. 107-117) and the same restriction in 
subsequent DoD appropriations acts.

[71 FR 14111, Mar. 21, 2006]



Sec. 225.7009-2  Restriction.

    Do not acquire ball and roller bearings or bearing components unless 
the bearings and bearing components are manufactured in the United 
States or Canada.

[71 FR 14111, Mar. 21, 2006]



Sec. 225.7009-3  Exception.

    The restriction in 225.7009-2 does not apply to contracts or 
subcontracts for the acquisition of commercial items, except for 
commercial ball and roller bearings acquired as end items.

[71 FR 14111, Mar. 21, 2006]



Sec. 225.7009-4  Waiver.

    The Secretary of the department responsible for acquisition or, for 
the Defense Logistics Agency, the Component Acquisition Executive, may 
waive the restriction in 225.7009-2, on a case-by-case basis, by 
certifying to the House and Senate Committees on Appropriations that--
    (a) Adequate domestic supplies are not available to meet DoD 
requirements on a timely basis; and
    (b) The acquisition must be made in order to acquire capability for 
national security purposes.

[71 FR 14111, Mar. 21, 2006]

[[Page 151]]



Sec. 225.7009-5  Contract clause.

    Use the clause at 252.225-7016, Restriction on Acquisition of Ball 
and Roller Bearings, in solicitations and contracts, unless--
    (a) The items being acquired are commercial items other than ball or 
roller bearings acquired as end items;
    (b) The items being acquired do not contain ball and roller 
bearings; or
    (c) A waiver has been granted in accordance with 225.7009-4.

[71 FR 14112, Mar. 21, 2006]



Sec. 225.7010  Restriction on vessel propellers.



Sec. 225.7010-1  Restriction.

    In accordance with Section 8064 of the Fiscal Year 2001 DoD 
Appropriations Act (Public Law 106-259), do not use fiscal year 2000 or 
2001 funds to acquire vessel propellers other than those produced by a 
domestic source and of domestic origin, i.e., vessel propellers--
    (a) Manufactured in the United States or Canada; and
    (b) For which all component castings were poured and finished in the 
United States or Canada.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7010-2  Exceptions.

    This restriction does not apply to contracts or subcontracts for 
acquisition of commercial items.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7010-3  Waiver.

    The Secretary of the department responsible for acquisition may 
waive this restriction on a case-by-case basis, by certifying to the 
House and Senate Committees on Appropriations that--
    (a) Adequate domestic supplies are not available to meet DoD 
requirements on a timely basis; and
    (b) The acquisition must be made in order to acquire capability for 
national security purposes.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7010-4  Contract clause.

    Use the clause at 252.225-7023, Restriction on Acquisition of Vessel 
Propellers, in solicitations and contracts that use fiscal year 2000 or 
2001 funds for the acquisition of vessels or vessel propellers, unless--
    (a) An exception applies or a waiver has been granted; or
    (b) The vessels being acquired do not contain vessel propellers.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7011  Restriction on carbon, alloy, and armor steel plate.



Sec. 225.7011-1  Restriction.

    In accordance with Section 8111 of the Fiscal Year 1992 DoD 
Appropriations Act (Public Law 102-172) and similar sections in 
subsequent DoD appropriations acts, do not acquire any of the following 
types of carbon, alloy, or armor steel plate unless it is melted and 
rolled in the United States or Canada:
    (a) Carbon, alloy, or armor steel plate in Federal Supply Class 
9515.
    (b) Carbon, alloy, or armor steel plate described by specifications 
of the American Society for Testing Materials or the American Iron and 
Steel Institute.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7011-2  Waiver.

    The Secretary of the department responsible for acquisition may 
waive this restriction, on a case-by-case basis, by certifying to the 
House and Senate Committees on Appropriations that--
    (a) Adequate U.S. or Canadian supplies are not available to meet DoD 
requirements on a timely basis; and
    (b) The acquisition must be made in order to acquire capability for 
national security purposes.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7011-3  Contract clause.

    Unless a waiver has been granted, use the clause at 252.225-7030, 
Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate, in 
solicitations and contracts that'
    (a) Require the delivery to the Government of carbon, alloy, or 
armor steel plate that will be used in a facility owned by the 
Government or under the control of DoD; or

[[Page 152]]

    (b) Require contractors operating in a Government-owned facility or 
a facility under the control of DoD to purchase carbon, alloy, or armor 
steel plate.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7012  Restriction on supercomputers.



Sec. 225.7012-1  Restriction.

    In accordance with Section 8112 of Public Law 100-202, and similar 
sections in subsequent DoD appropriations acts, do not purchase a 
supercomputer unless it is manufactured in the United States.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7012-2  Waiver.

    The Secretary of Defense may waive this restriction, on a case-by-
case basis, after certifying to the Armed Services and Appropriations 
Committees of Congress that--
    (a) Adequate U.S. supplies are not available to meet requirements on 
a timely basis; and
    (b) The acquisition must be made in order to acquire capability for 
national security purposes.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7012-3  Contract clause.

    Unless a waiver has been granted, use the clause at 252.225-7011, 
Restriction on Acquisition of Supercomputers, in solicitations and 
contracts for the acquisition of supercomputers.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7013  Restrictions on construction or repair of vessels in 
          foreign shipyards.

    In accordance with 10 U.S.C. 7309--
    (a) Do not award a contract to construct in a foreign shipyard--
    (1) A vessel for any of the armed forces; or
    (2) A major component of the hull or superstructure of a vessel for 
any of the armed forces; and
    (b) Do not overhaul, repair, or maintain in a foreign shipyard, a 
naval vessel (or any other vessel under the jurisdiction of the 
Secretary of the Navy) homeported in the United States. This restriction 
does not apply to voyage repairs.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7014  Restriction on overseas military construction.

    For restriction on award of military construction contracts to be 
performed in the United States outlying areas in the Pacific and on 
Kwajalein Atoll, or in countries bordering the Arabian Gulf, see 
236.274(a).

[70 FR 35545, June 21, 2005]



Sec. 225.7015  Restriction on overseas architect-engineer services.

    For restriction on award of architect-engineer contracts to be 
performed in Japan, in any North Atlantic Treaty Organization member 
country, or in countries bordering the Arabian Gulf, see 236.602-70.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7016  Restriction on research and development.

    (a) In accordance with Public Law 92-570, do not use DoD 
appropriations to make an award to any foreign corporation, 
organization, person, or entity, for research and development in 
connection with any weapon system or other military equipment, if there 
is a U.S. corporation, organization, person, or entity--
    (1) Equally competent; and
    (2) Willing to perform at a lower cost.
    (b) This restriction does not affect the requirements of FAR Part 35 
for selection of research and development contractors. However, when a 
U.S. source and a foreign source are equally competent, award to the 
source that will provide the services at the lower cost.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7017  Restriction on Ballistic Missile Defense research, 
          development, test, and evaluation.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7017-1  Definitions.

    Competent, foreign firm, and U.S. firm are defined in the provision 
at 252.225-7018, Notice of Prohibition of Certain Contracts with Foreign 
Entities for the

[[Page 153]]

Conduct of Ballistic Missile Defense Research, Development, Test, and 
Evaluation.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7017-2  Restriction.

    In accordance with Section 222 of the DoD Authorization Act for 
Fiscal Years 1988 and 1989 (Pub. L. 100-180), do not use any funds 
appropriated to or for the use of DoD to enter into or carry out a 
contract with a foreign government or firm, including any contract 
awarded as a result of a broad agency announcement, if the contract 
provides for the conduct of research, development, test, and evaluation 
(RDT&E) in connection with the Ballistic Missile Defense Program.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7017-3  Exceptions.

    This restriction does not apply--
    (a) To contracts awarded to a foreign government or firm if the 
contracting officer determines that--
    (1) The contract will be performed within the United States;
    (2) The contract is exclusively for RDT&E in connection with 
antitactical ballistic missile systems; or
    (3) The foreign government or firm agrees to share a substantial 
portion of the total contract cost. Consider the foreign share as 
substantial if it is equitable with respect to the relative benefits 
that the United States and the foreign parties will derive from the 
contract. For example, if the contract is more beneficial to the foreign 
party, its share of the cost should be correspondingly higher; or
    (b) If the head of the contracting activity certifies in writing, 
before contract award, that a U.S. firm cannot competently perform a 
contract for RDT&E at a price equal to or less than the price at which a 
foreign government or firm would perform the RDT&E. The contracting 
officer or source selection authority, as applicable, shall make a 
determination that will be the basis for the certification.
    (1) The determination shall--
    (i) Describe the contract effort;
    (ii) State the number of proposals solicited and received from both 
U.S. and foreign firms;
    (iii) Identify the proposed awardee and the amount of the contract;
    (iv) State that selection of the contractor was based on the 
evaluation factors contained in the solicitation, or the criteria 
contained in the broad agency announcement; and
    (v) State that a U.S. firm cannot competently perform the effort at 
a price equal to, or less than, the price at which the foreign awardee 
would perform it.
    (2) When either a broad agency announcement or program research and 
development announcement is used, or when the determination is otherwise 
not based on direct competition between foreign and domestic proposals, 
the determination shall not be merely conclusory.
    (i) The determination shall specifically explain its basis, include 
a description of the method used to determine the competency of U.S. 
firms, and describe the cost or price analysis performed.
    (ii) Alternately, the determination may contain--
    (A) A finding, including the basis for such finding, that the 
proposal was submitted solely in response to the terms of a broad agency 
announcement, program research and development announcement, or other 
solicitation document without any technical guidance from the program 
office; and
    (B) A finding, including the basis for such finding, that disclosure 
of the information in the proposal for the purpose of conducting a 
competitive acquisition is prohibited.
    (3) Within 30 days after contract award, forward a copy of the 
certification and supporting documentation to the Missile Defense 
Agency, Attn: MDA/DRI, 7100 Defense Pentagon, Washington, DC 20301-7100.

[68 FR 15627, Mar. 31, 2003]



Sec. 225.7017-4  Solicitation provision.

    Unless foreign participation is otherwise excluded, use the 
provision at 252.225-7018, Notice of Prohibition of Certain Contracts 
With Foreign Entities for the Conduct of Ballistic Missile Defense 
Research, Development, Test,

[[Page 154]]

and Evaluation, in competitively negotiated solicitations for RDT&E in 
connection with the Ballistic Missile Defense Program.

[68 FR 15627, Mar. 31, 2003]

        Subpart 225.71_Other Restrictions on Foreign Acquisition

    Source: 68 FR 15631, Mar. 31, 2003, unless otherwise noted.



Sec. 225.7100  Scope of subpart.

    This subpart contains foreign product restrictions that are based on 
policies designed to protect the defense industrial base.



Sec. 225.7101  Definitions.

    Domestic manufacture is defined in the clause at 252.225-7025, 
Restriction on Acquisition of Forgings.



Sec. 225.7102  Forgings.



Sec. 225.7102-1  Policy.

    When acquiring the following forging items, whether as end items or 
components, acquire items that are of domestic manufacture to the 
maximum extent practicable:

------------------------------------------------------------------------
                   Items                             Categories
------------------------------------------------------------------------
Ship propulsion shafts....................  Excludes service and landing
                                             craft shafts.
Periscope tubes...........................  All.
Ring forgings for bull gears..............  All greater than 120 inches
                                             in diameter.
------------------------------------------------------------------------



Sec. 225.7102-2  Exceptions.

    The policy in 225.7102-1 does not apply to acquisitions--
    (a) Using simplified acquisition procedures, unless the restricted 
item is the end item being purchased;
    (b) Overseas for overseas use; or
    (c) When the quantity acquired exceeds the amount needed to maintain 
the U.S. defense mobilization base (provided the excess quantity is an 
economical purchase quantity). The requirement for domestic manufacture 
does not apply to the quantity above that required to maintain the base, 
in which case, qualifying country sources may compete.



Sec. 225.7102-3  Waiver.

    Upon request from a contractor, the contracting officer may waive 
the requirement for domestic manufacture of the items listed in 
225.7102-1.



Sec. 225.7102-4  Contract clause.

    Use the clause at 252.225-7025, Restriction on Acquisition of 
Forgings, in solicitations and contracts, unless--
    (a) The supplies being acquired do not contain any of the items 
listed in 225.7102-1; or
    (b) An exception in 225.7102-2 applies. If an exception applies to 
only a portion of the acquisition, specify the excepted portion in the 
solicitation and contract.



Sec. 225.7103  Polyacrylonitrile (PAN) carbon fiber.



Sec. 225.7103-1  Policy.

    DoD has imposed restrictions on the acquisition of PAN carbon fiber 
from foreign sources. DoD is phasing out the restrictions over the 
period ending May 31, 2006. Contractors with contracts that contain the 
clause at 252.225-7022 shall use U.S. or Canadian manufacturers or 
producers for all PAN carbon fiber requirements.

[68 FR 15631, Mar. 31, 2003, as amended at 70 FR 6374, Feb. 7, 2005]



Sec. 225.7103-2  Waivers.

    With the approval of the chief of the contracting office, the 
contracting officer may waive, in whole or in part, the requirement of 
the clause at 252.225-7022. For example, a waiver may be justified if a 
qualified U.S. or Canadian source cannot meet scheduling requirements.



Sec. 225.7103-3  Contract clause.

    Use the clause at 252.225-7022, Restriction on Acquisition of 
Polyacrylonitrile (PAN) Carbon Fiber, in solicitations and contracts for 
major systems issued on or before May 31, 2006, if the system is not yet 
in development and demonstration (milestone B as defined in DoDI 
5000.2).

[70 FR 8537, Feb. 22, 2005]

[[Page 155]]

 Subpart 225.72_Reporting Contract Performance Outside the United States

    Source: 70 FR 20839, Apr. 22, 2005, unless otherwise noted.



Sec. 225.7201  Policy.

    (a) 10 U.S.C. 2410g requires offerors and contractors to notify DoD 
of any intention to perform a DoD contract outside the United States and 
Canada when the contract could be performed inside the United States or 
Canada.
    (b) DoD requires contractors to report the volume, type, and nature 
of contract performance outside the United States.



Sec. 225.7202  Exception.

    This subpart does not apply to contracts for commercial items, 
construction, ores, natural gas, utilities, petroleum products and 
crudes, timber (logs), or subsistence.



Sec. 225.7203  Contracting officer distribution of reports.

    Follow the procedures at PGI 225.7203 for distribution of reports 
submitted with offers in accordance with the provision at 252.225-7003, 
Report of Intended Performance Outside the United States and Canada--
Submission with Offer.



Sec. 225.7204  Solicitation provision and contract clauses.

    Except for acquisitions described in 225.7202--
    (a) Use the provision at 252.225-7003, Report of Intended 
Performance Outside the United States and Canada--Submission with Offer, 
in solicitations with a value exceeding $10 million;
    (b) Use the clause at 252.225-7004, Report of Intended Performance 
Outside the United States and Canada--Submission after Award, in 
solicitations and contracts with a value exceeding $10 million; and
    (c) Use the clause at 252.225-7006, Quarterly Reporting of Actual 
Contract Performance Outside the United States, in solicitations and 
contracts with a value exceeding $500,000.

         Subpart 225.73_Acquisitions for Foreign Military Sales



Sec. 225.7300  Scope of subpart.

    (a) This subpart contains policies and procedures for acquisitions 
for foreign military sales (FMS) under the Arms Export Control Act (22 
U.S.C. Chapter 39). Section 22 of the Arms Export Control Act (22 U.S.C. 
2762) authorizes DoD to enter into contracts for resale to foreign 
countries or international organizations.
    (b) This subpart does not apply to--
    (1) FMS made from inventories or stocks;
    (2) Acquisitions for replenishment of inventories or stocks; or
    (3) Acquisitions made under DoD cooperative logistic supply support 
arrangements.

[63 FR 43889, Aug. 17, 1998]



Sec. 225.7301  General.

    (a) The U.S. Government sells defense articles and services to 
foreign governments or international organizations through FMS 
agreements. The agreement is documented in a Letter of Offer and 
Acceptance (LOA) (see DoD 5105.38-M, Security Assistance Management 
Manual).
    (b) Conduct FMS acquisitions under the same acquisition and contract 
management procedures used for other defense acquisitions.
    (c) Follow the additional procedures at PGI 225.7301(c) for 
preparation of solicitations and contracts that include FMS 
requirements.
    (d) See 229.170 for policy on contracts financed under U.S. 
assistance programs that involve payment of foreign country value added 
taxes or customs duties.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.7302  Guidance.

    For guidance on the role of the contracting officer in FMS programs 
that will require an acquisition, see PGI 225.7302.

[70 FR 73155, Dec. 9, 2005]



Sec. 225.7303  Pricing acquisitions for FMS.

    (a) Price FMS contracts using the same principles used in pricing 
other

[[Page 156]]

defense contracts. However, application of the pricing principles in FAR 
parts 15 and 31 to an FMS contract may result in prices that differ from 
other defense contract prices for the same item due to the 
considerations in this section.
    (b) If the foreign government has conducted a competition resulting 
in adequate price competition (see FAR 15.403-1(b)(1)), the contracting 
officer shall not require the submission of cost or pricing data. The 
contracting officer should consult with the foreign government through 
security assistance personnel to determine if adequate price competition 
has occurred.

[64 FR 49683, Sept. 14, 1999, as amended at 68 FR 15632, Mar. 31, 2003]



Sec. 225.7303-1  Contractor sales to other foreign customers.

    If the contractor has made sales of the item required for the 
foreign military sale to foreign customers under comparable conditions, 
including quantity and delivery, price the FMS contract in accordance 
with FAR part 15.



Sec. 225.7303-2  Cost of doing business with a foreign government or an 
          international organization.

    (a) In pricing FMS contracts where non-U.S. Government prices as 
described in 225.7303-1 do not exist, except as provided in 225.7303-5, 
recognize the reasonable and allocable costs of doing business with a 
foreign government or international organization, even though such costs 
might not be recognized in the same amounts in pricing other defense 
contracts. Examples of such costs include, but are not limited to, the 
following:
    (1) Selling expenses (not otherwise limited by FAR Part 31), such 
as--
    (i) Maintaining international sales and service organizations;
    (ii) Sales commissions and fees in accordance with FAR Subpart 3.4;
    (iii) Sales promotions, demonstrations, and related travel for sales 
to foreign governments. Section 126.8 of the International Traffic in 
Arms Regulations (22 CFR 126.8) may require Government approval for 
these costs to be allowable, in which case the appropriate Government 
approval shall be obtained; and
    (iv) Configuration studies and related technical services undertaken 
as a direct selling effort to a foreign country.
    (2) Product support and post-delivery service expenses, such as--
    (i) Operations or maintenance training, training or tactics films, 
manuals, or other related data; and
    (ii) Technical field services provided in a foreign country related 
to accident investigations, weapon system problems, or operations/
tactics enhancement, and related travel to foreign countries.
    (3) Offset costs (also see 225.7306).
    (i) A U.S. defense contractor may recover all costs incurred for 
offset agreements with a foreign government or international 
organization if the LOA is financed wholly with customer cash or 
repayable foreign military finance credits.
    (ii) The U.S. Government assumes no obligation to satisfy or 
administer the offset requirement or to bear any of the associated 
costs.
    (4) Costs that are the subject of advance agreement under the 
appropriate provisions of FAR part 31; or where the advance 
understanding places a limit on the amounts of cost that will be 
recognized as allowable in defense contract pricing, and the agreement 
contemplated that it will apply only to DoD contracts for the U.S. 
Government's own requirement (as distinguished from contracts for FMS).
    (b) Costs not allowable under FAR part 31 are not allowable in 
pricing FMS contracts, except as noted in paragraph (c) of this 
subsection.
    (c) The limitations for major contractors on independent research 
and development and bid and proposal (IR&D/B&P) costs for projects that 
are of potential interest to DoD, in 231.205-18(c)(iii), do not apply to 
FMS contracts, except as provided in 225.7303-5. The allowability of 
IR&D/B&P costs on contracts for FMS not wholly paid for from funds made 
available on a nonrepayable basis is limited to the contract's allocable 
share of the contractor's total IR&D/B&P expenditures. In pricing 
contracts for such FMS--
    (1) Use the best estimate of reasonable costs in forward pricing; 
and

[[Page 157]]

    (2) Use actual expenditures, to the extent that they are reasonable, 
in determining final cost.
    (d) Under paragraph (e)(1)(A) of Section 21 of the Arms Export 
Control Act (22 U.S.C. 2761), the United States must charge for 
administrative services to recover the estimated cost of administration 
of sales made under the Army Export Control Act.

[56 FR 36367, July 31, 1991, as amended at 56 FR 67216, Dec. 30, 1991; 
57 FR 42631, Sept. 15, 1992; 57 FR 53600, Nov. 12, 1992; 59 FR 50511, 
Oct. 4, 1994; 61 FR 7744, Feb. 29, 1996; 61 FR 18987, Apr. 30, 1996; 63 
FR 43889, Aug. 17, 1998; 64 FR 8729, Feb. 23, 1999; 64 FR 49684, Sept. 
14, 1999; 68 FR 15632, Mar. 31, 2003; 70 FR 73155, Dec. 9, 2005]



Sec. 225.7303-3  Government-to-government agreements.

    If a government-to-government agreement between the United States 
and a foreign government for the sale, coproduction, or cooperative 
logistic support of a specifically defined weapon system, major end 
item, or support item, contains language in conflict with the provisions 
of this section, the language of the government-to-government agreement 
prevails.



Sec. 225.7303-4  Contingent fees.

    (a) Except as provided in paragraph (b) of this subsection, 
contingent fees are generally allowable under DoD contracts, provided--
    (1) The fees are paid to a bona fide employee or a bona fide 
established commercial or selling agency maintained by the prospective 
contractor for the purpose of securing business (see FAR Part 31 and FAR 
Subpart 3.4); and
    (2) The contracting officer determines that the fees are fair and 
reasonable.
    (b)(1) Under DoD 5105.38-M, LOAs for requirements for the 
governments of Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan, 
Republic of Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey, 
Thailand, or Venezuela (Air Force) shall provide that all U.S. 
Government contracts resulting from the LOAs prohibit the reimbursement 
of contingent fees as an allowable cost under the contract, unless the 
contractor identifies the payments and the foreign customer approves the 
payments in writing before contract award (see 225.7307(a)).
    (2) For FMS to countries not listed in paragraph (b)(1) of this 
subsection, contingent fees exceeding $50,000 per FMS case are 
unallowable under DoD contracts, unless the contractor identifies the 
payment and the foreign customer approves the payment in writing before 
contract award.

[68 FR 15633, Mar. 31, 2003, as amended at 70 FR 73155, Dec. 9, 2005]



Sec. 225.7303-5  Aquisitions wholly paid for from nonrepayable funds.

    (a) In accordance with 22 U.S.C. 2762(d), price FMS wholly paid for 
from funds made available on a nonrepayable basis on the same costing 
basis with regard to profit, overhead, IR&D/B&P, and other costing 
elements as is applicable to acquisitions of like items purchased by DoD 
for its own use.
    (b) Direct costs associated with meeting a foreign customer's 
additional or unique requirements are allowable under such contracts. 
Indirect burden rates applicable to such direct costs are permitted at 
the same rates applicable to acquisitions of like items purchased by DoD 
for its own use.
    (c) A U.S. defense contractor may not recover costs incurred for 
offset agreements with a foreign government or international 
organization if the LOA is financed with funds made available on a 
nonrepayable basis.

[61 FR 18988, Apr. 30, 1996; 61 FR 49531, Sept. 20, 1996, as amended at 
63 FR 43890, Aug. 17, 1998; 64 FR 49684, Sept. 14, 1999; 68 FR 15633, 
Mar. 31, 2003]



Sec. 225.7304  FMS customer involvement.

    (a) FMS customers may request that a defense article or defense 
service be obtained from a particular contractor. In such cases, FAR 
6.302-4 provides authority to contract without full and open 
competition. The FMS customer may also request that a subcontract be 
placed with a particular firm. The contracting officer shall honor such 
requests from the FMS customer only if the LOA or other written 
direction sufficiently fulfills the requirements of FAR Subpart 6.3.

[[Page 158]]

    (b) FMS customers should be encouraged to participate with U.S. 
Government acquisition personnel in discussions with industry to--
    (1) Develop technical specifications;
    (2) Establish delivery schedules;
    (3) Identify any special warranty provisions or other requirements 
unique to the FMS customer; and
    (4) Review prices of varying alternatives, quantities, and options 
needed to make price-performance tradeoffs.
    (c) Do not disclose to the FMS customer any data, including cost or 
pricing data, that is contractor proprietary unless the contractor 
authorizes its release.
    (d) Except as provided in paragraph (e)(3) of this section, the 
degree of FMS customer participation in contract negotiations is left to 
the discretion of the contracting officer after consultation with the 
contractor. The contracting officer shall provide an explanation to the 
FMS customer if its participation in negotiations will be limited. 
Factors that may limit FMS customer participation include situations 
where--
    (1) The contract includes requirements for more than one FMS 
customer;
    (2) The contract includes unique U.S. requirements; or
    (3) Contractor proprietary data is a subject of negotiations.
    (e) Do not allow representatives of the FMS customer to--
    (1) Direct the exclusion of certain firms from the solicitation 
process (they may suggest the inclusion of certain firms);
    (2) Interfere with a contractor's placement of subcontracts; or
    (3) Observe or participate in negotiations between the U.S. 
Government and the contractor involving cost or pricing data, unless a 
deviation is granted in accordance with Subpart 201.4.
    (f) Do not accept directions from the FMS customer on source 
selection decisions or contract terms (except that, upon timely notice, 
the contracting officer may attempt to obtain any special contract 
provisions, warranties, or other unique requirements requested by the 
FMS customer).
    (g) Do not honor any requests by the FMS customer to reject any bid 
or proposal.
    (h) If an FMS customer requests additional information concerning 
FMS contract prices, the contracting officer shall, after consultation 
with the contractor, provide sufficient information to demonstrate the 
reasonableness of the price and reasonable responses to relevant 
questions concerning contract price. This information--
    (1) May include tailored responses, top-level pricing summaries, 
historical prices, or an explanation of any significant differences 
between the actual contract price and the estimated contract price 
included in the initial LOA; and
    (2) May be provided orally, in writing, or by any other method 
acceptable to the contracting officer.

[67 FR 70325, Nov. 22, 2002]



Sec. 225.7305  Limitation of liability.

    Advise the contractor when the foreign customer will assume the risk 
for loss or damage under the appropriate limitation of liability 
clause(s) (see FAR Subpart 46.8). Consider the costs of necessary 
insurance, if any, obtained by the contractor to cover the risk of loss 
or damage in establishing the FMS contract price.

[56 FR 36367, July 31, 1991, as amended at 68 FR 15633, Mar. 31, 2003]



Sec. 225.7306  Offset arrangements.

    In accordance with the Presidential policy statement of April 16, 
1990, DoD does not encourage, enter into, or commit U.S. firms to FMS 
offset arrangements. The decision whether to engage in offsets, and the 
responsibility for negotiating and implementing offset arrangements, 
resides with the companies involved. (Also see 225.7303-2(a)(3).)

[70 FR 73155, Dec. 9, 2005]



Sec. 225.7307  Contract clauses.

    (a) Use the clause at 252.225-7027, Restriction on Contingent Fees 
for Foreign Military Sales, in solicitations and contracts for FMS. 
Insert in paragraph (b)(1) of the clause the name(s) of any foreign 
country customer(s) listed in 225.7303-4(b).

[[Page 159]]

    (b) Use the clause at 252.225-7028, Exclusionary Policies and 
Practices of Foreign Governments, in solicitations and contracts for the 
purchase of supplies and services for international military education 
training and FMS.

[68 FR 15633, Mar. 31, 2003. Redesignated at 70 FR 73155, Dec. 9, 2005]

      Subpart 225.74_Defense Contractors Outside the United States

    Source: 70 FR 23801, May 5, 2005, unless otherwise noted.



Sec. 225.7401  General.

    (a) If an acquisition requires performance of work in a foreign 
country by U.S. personnel or a third country contractor, follow the 
procedures at PGI 225.7401(a).
    (b) For work performed in Germany, eligibility for logistics support 
or base privileges of contractor employees is governed by U.S.-German 
bilateral agreements. Follow the procedures in Army in Europe Regulation 
715-9, available at http://www.per.hqusareur.army.mil/cpd/docper/
default.htm. Follow the procedures in Army in Europe Regulation 715-9, 
available at http://www.per.hqusareur.army.mil/cpd/docper/
GermanyDefault.aspx.
    (c) For work performed in Japan or Korea, see PGI 225.7401(c) for 
information on bilateral agreements and policy relating to contractor 
employees in Japan or Korea.

[70 FR 23801, May 5, 2005, as amended at 71 FR 39009, July 11, 2006]



Sec. 225.7402  Contractor personnel authorized to accompany U.S. Armed 
          Forces deployed outside the United States.



Sec. 225.7402-1  Scope.

    This section applies to contracts that involve contractor personnel 
authorized to accompany U.S. Armed Forces deployed outside the United 
States in--
    (a) Contingency operations;
    (b) Humanitarian or peacekeeping operations;
    (c) Other military operations; or
    (d) Military exercises designated by the combatant commander.

[71 FR 34828, June 16, 2006]



Sec. 225.7402-2  Definitions.

    Combatant commander, other military operations, and theater of 
operations, as used in this section, have the meaning given in the 
clause at 252.225-7040, Contractor Personnel Authorized to Accompany 
U.S. Armed Forces Deployed Outside the United States.

[71 FR 34828, June 16, 2006]



Sec. 225.7402-3  Government support.

    (a) Government support that may be authorized or required for 
contractor personnel performing in a theater of operations may include, 
but is not limited to, the types of support listed in PGI 225.7402-3(a).
    (b) The agency shall provide logistical or security support only 
when the appropriate agency official, in accordance with agency 
guidance, determines in coordination with the combatant commander that--
    (1) Government provision of such support is needed to ensure 
continuation of essential contractor services; and
    (2) The contractor cannot obtain adequate support from other 
sources.
    (c) The contracting officer shall--
    (1) Ensure that the contract contains valid terms, approved by the 
combatant commander, that specify the responsible party, if a party 
other than the combatant commander is responsible for providing 
protection to the contractor personnel performing in the theater of 
operations as specified in 225.7402-1;
    (2) Specify in the terms of the contract, if medical or dental care 
is authorized beyond the standard specified in paragraph (c)(2)(i) of 
the clause at 252.225-7040, Contractor Personnel Authorized to Accompany 
U.S. Armed Forces Deployed Outside the United States;
    (3) Provide direction to the contractor, if the contractor is 
required to reimburse the Government for medical treatment or 
transportation of contractor personnel to a selected civilian facility 
in accordance with paragraph (c)(2)(ii) of the clause at 252.225-7040; 
and

[[Page 160]]

    (4) Specify in the contract any other Government support to be 
provided, and whether this support is provided on a reimbursable basis, 
citing the authority for the reimbursement.
    (d) Contractor personnel must have a letter of authorization (LOA) 
issued by a contracting officer in order to process through a deployment 
center or to travel to, from, or within the theater of operations. The 
LOA also will identify any additional authorizations, privileges, or 
Government support that the contractor personnel are entitled to under 
the contract. For a sample LOA, see PGI 225.7402-3(d).

[71 FR 34828, June 16, 2006]



Sec. 225.7402-4  Contract clauses.

    (a) Use the clause at 252.225-7040, Contractor Personnel Authorized 
to Accompany U.S. Armed Forces Deployed Outside the United States, in 
solicitations and contracts when contract performance requires that 
contractor personnel accompany U.S. Armed Forces deployed outside the 
United States in--
    (1) Contingency operations;
    (2) Humanitarian or peacekeeping operations;
    (3) Other military operations; or
    (4) Military exercises designated by the combatant commander.
    (b) For additional guidance on clauses to consider when using the 
clause at 252.225-7040, see PGI 225.7402-4(b).

[71 FR 34828, June 16, 2006]



Sec. 225.7403  Antiterrorism/force protection.



Sec. 225.7403-1  General.

    Information and guidance pertaining to DoD antiterrorism/force 
protection policy for contracts that require performance or travel 
outside the United States can be obtained from the offices listed in PGI 
225.7403-1.



Sec. 225.7403-2  Contract clause.

    Use the clause at 252.225-7043, Antiterrorism/Force Protection 
Policy for Defense Contractors Outside the United States, in 
solicitations and contracts that require performance or travel outside 
the United States, except for contracts with--
    (a) Foreign governments;
    (b) Representatives of foreign governments; or
    (c) Foreign corporations wholly owned by foreign governments.

               Subpart 225.75_Balance of Payments Program

    Source: 67 FR 20694, Apr. 26, 2002, unless otherwise noted.



Sec. 225.7500  Scope of subpart.

    This subpart provides policies and procedures implementing the 
Balance of Payments Program. It applies to contracts for the acquisition 
of--
    (a) Supplies for use outside the United States; and
    (b) Construction to be performed outside the United States.



Sec. 225.7501  Policy.

    Acquire only domestic end products for use outside the United 
States, and use only domestic construction material for construction to 
be performed outside the United States, including end products and 
construction material for foreign military sales, unless--
    (a) Before issuing the solicitation--
    (1) The estimated cost of the acquisition or the value of a 
particular construction material is at or below the simplified 
acquisition threshold;
    (2) The end product or particular construction material is--
    (i) Listed in FAR 25.104 or 225.104(a)(iii);
    (ii) A petroleum product;
    (iii) A spare part for foreign-manufactured vehicles, equipment, 
machinery, or systems, provided the acquisition is restricted to the 
original manufacturer or its supplier;
    (iv) An industrial gas; or
    (v) A brand drug specified by the Defense Medical Materiel Board;
    (3) The acquisition is covered by the World Trade Organization 
Government Procurement Agreement;
    (4) The acquisition of foreign end products or construction material 
is required by a treaty or executive agreement between governments;
    (5) The end product is acquired for commissary resale; or
    (6) The contracting officer determines that a requirement can best 
be

[[Page 161]]

filled by a foreign end product or construction material, including 
determinations that--
    (i) A subsistence product is perishable and delivery from the United 
States would significantly impair the quality at the point of 
consumption;
    (ii) An end product or construction material, by its nature or as a 
practical matter, can best be acquired in the geographic area concerned, 
e.g., ice or books; or bulk material, such as sand, gravel, or other 
soil material, stone, concrete masonry units, or fired brick;
    (iii) A particular domestic construction material is not available;
    (iv) The cost of domestic construction material would exceed the 
cost of foreign construction material by more than 50 percent, 
calculated on the basis of--
    (A) A particular construction material; or
    (B) The comparative cost of application of the Balance of Payments 
Program to the total acquisition; or
    (v) Use of a particular domestic construction material is 
impracticable;
    (b) After receipt of offers--
    (1) The evaluated low offer (see Subpart 225.5) is an offer of an 
end product that--
    (i) Is a qualifying country end product;
    (ii) Is an eligible product; or
    (iii) Is a nonqualifying country end product, but application of the 
Balance of Payments Program evaluation factor would not result in award 
on a domestic offer; or
    (2) The construction material is an eligible product; or
    (c) At any time during the acquisition process, the head of the 
agency determines that it is not in the public interest to apply the 
restrictions of the Balance of Payments Program to the end product or 
construction material.

[67 FR 20694, Apr. 26, 2002, as amended at 67 FR 77939, Dec. 20, 2002; 
69 FR 1928, Jan. 13, 2004; 70 FR 2363, Jan. 13, 2005; 70 FR 73155, Dec. 
9, 2005]



Sec. 225.7502  Procedures.

    (a) Solicitation of offers. Identify, in the solicitation, supplies 
and construction material known in advance to be exempt from the Balance 
of Payments Program.
    (b) Evaluation of offers--(1) Supplies. Unless the entire 
acquisition is exempt from the Balance of Payments Program, evaluate 
offers for supplies that are subject to the Balance of Payments Program 
using the evaluation procedures in subpart 225.5. However, treatment of 
duty may differ when delivery is overseas.
    (i) Duty may not be applicable to nonqualifying country offers.
    (ii) The U.S. Government cannot guarantee the exemption of duty for 
components or end products imported into foreign countries.
    (iii) Foreign governments may impose duties. Evaluate offers 
including such duties as offered.
    (2) Construction. Because the contracting officer evaluates the 
estimated cost of foreign and domestic construction material in 
accordance with 225.7501(a)(5)(iv) before issuing the solicitation, no 
special procedures are required for evaluation of construction offers.
    (c) Postaward. For construction contracts, the procedures at FAR 
25.206, for noncompliance under the Buy American Act, also apply to 
noncompliance under the Balance of Payments Program.



Sec. Sec.  225.7503  Contract clauses.

    Unless the entire acquisition is exempt from the Balance of Payments 
Program--
    (a) Use the clause at 252.225-7044, Balance of Payments Program--
Construction Material, in solicitations and contracts for construction 
to be performed outside the United States with a value greater than the 
simplified acquisition threshold but less than $7,407,000.
    (b) Use the clause at 252.225-7045, Balance of Payments Program--
Construction Material Under Trade Agreements, in solicitations and 
contracts for construction to be performed outside the United States 
with a value of $7,407,000 or more. For acquisitions with a value of 
$7,407,000 or more, but less than $8,422,165, use the clause with its 
Alternate I.

[71 FR 9271, Feb. 23, 2006]

[[Page 162]]

             Subpart 225.76_Secondary Arab Boycott of Israel

    Source: 71 FR 39006, July 11, 2006, unless otherwise noted.



Sec. 225.7601  Restriction.

    In accordance with 10 U.S.C. 2410i, do not enter into a contract 
with a foreign entity unless it has certified that it does not comply 
with the secondary Arab boycott of Israel.



Sec. 225.7602  Procedures.

    For contracts awarded to the Canadian Commercial Corporation (CCC), 
the CCC will submit a certification from its proposed subcontractor with 
the other required precontractual information (see 225.870).



Sec. 225.7603  Exceptions.

    This restriction does not apply to--
    (a) Purchases at or below the simplified acquisition threshold;
    (b) Contracts for consumable supplies, provisions, or services for 
the support of United States forces or of allied forces in a foreign 
country; or
    (c) Contracts pertaining to the use of any equipment, technology, 
data, or services for intelligence or classified purposes, or to the 
acquisition or lease thereof, in the interest of national security.



Sec. 225.7604  Waivers.

    The Secretary of Defense may waive this restriction on the basis of 
national security interests. Forward waiver requests to the Director, 
Defense Procurement and Acquisition Policy, ATTN: OUSD(AT&L)DPAP(PAIC), 
3060 Defense Pentagon, Washington, DC 20301-3060.



Sec. 225.7605  Solicitation provision.

    Unless an exception applies or a waiver has been granted in 
accordance with 225.7604, use the provision at 252.225-7031, Secondary 
Arab Boycott of Israel, in all solicitations.

                  PART 226_OTHER SOCIOECONOMIC PROGRAMS

                 Subpart 226.1_Indian Incentive Program

Sec.

Sec. 226.103 Procedures.

Sec. 226.104 Contract clause.

Subpart 226.3_Historically Black Colleges and Universities and Minority 
                              Institutions


Sec. 226.370 Contracting with historically black colleges and 
          universities and minority institutions.

Sec. 226.370-1 General.

Sec. 226.370-2 Definitions.

Sec. 226.370-3 Policy.

Sec. 226.370-4 Set-aside criteria.

Sec. 226.370-5 Set-aside procedures.

Sec. 226.370-6 Eligibility for award.

Sec. 226.370-7 Protesting a representation.

Sec. 226.370-8 Goals and incentives for subcontracting with HBCU/MIs.

Sec. 226.370-9 Solicitation provision and contract clause.

Subpart 226.70 [Reserved]

        Subpart 226.71_Preference for Local and Small Businesses


Sec. 226.7100 Scope of subpart.

Sec. 226.7101 Definition.

Sec. 226.7102 Policy.

Sec. 226.7103 Procedure.

Sec. 226.7104 Other considerations.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36388, July 31, 1991, unless otherwise noted.

                 Subpart 226.1_Indian Incentive Program



Sec. 226.103  Procedures.

    Follow the procedures at PGI 226.103 when submitting a request for 
funding of an Indian incentive.

70 FR 73149, Dec. 9, 2005]



Sec. 226.104  Contract clause.

    Use the clause at 252.226-7001, Utilization of Indian Organizations, 
Indian-Owned Economic Enterprises, and Native Hawaiian Small Business 
Concerns, in solicitations and contracts for supplies or services 
exceeding $500,000 in value.

[68 FR 56562, Oct. 1, 2003, as amended at 69 FR 55991, Sept. 17, 2004]

[[Page 163]]

Subpart 226.3_Historically Black Colleges and Universities and Minority 
                              Institutions

    Source: 70 FR 73149, Dec. 9, 2005, unless otherwise noted.



Sec. 226.370  Contracting with historically black colleges and 
          universities and minority institutions.



Sec. 226.370-1  General.

    This section implements the historically black college and 
university (HBCU) and minority institution (MI) provisions of 10 U.S.C. 
2323.



Sec. 226.370-2  Definitions.

    Definitions of HBCUs and MIs are in the clause at 252.226-7000, 
Notice of Historically Black College or University and Minority 
Institution Set-Aside.



Sec. 226.370-3  Policy.

    DoD will use outreach efforts, technical assistance programs, 
advance payments, HBCU/MI set-asides, and evaluation preferences to meet 
its contract and subcontract goals for use of HBCUs and MIs.



Sec. 226.370-4  Set-aside criteria.

    Set aside acquisitions for exclusive HBCU and MI participation when 
the acquisition is for research, studies, or services of the type 
normally acquired from higher educational institutions and there is a 
reasonable expectation that--
    (a) Offers will be submitted by at least two responsible HBCUs or 
MIs that can comply with the subcontracting limitations in the clause at 
FAR 52.219-14, Limitations on Subcontracting;
    (b) Award will be made at not more than 10 percent above fair market 
price; and
    (c) Scientific or technological talent consistent with the demands 
of the acquisition will be offered.



Sec. 226.370-5  Set-aside procedures.

    (a) As a general rule, use competitive negotiation for HBCU/MI set-
asides.
    (b) When using a broad agency announcement (FAR 35.016) for basic or 
applied research, make partial set-asides for HBCU/MIs as explained in 
235.016.
    (c) Follow the special synopsis instructions in 205.207(d). 
Interested HBCU/MIs must provide evidence of their capability to perform 
the contract, and a positive statement of their eligibility, within 15 
days of publication of the synopsis in order for the acquisition to 
proceed as an HBCU/MI set-aside.
    (d) Cancel the set-aside if the low responsible offer exceeds the 
fair market price (defined in FAR part 19) by more than 10 percent.



Sec. 226.370-6  Eligibility for award.

    (a) To be eligible for award as an HBCU or MI under the preference 
procedures of this subpart, an offeror must--
    (1) Be an HBCU or MI, as defined in the clause at 252.226-7000, 
Notice of Historically Black College or University and Minority 
Institution Set-Aside, at the time of submission of its initial offer 
including price; and
    (2) Provide the contracting officer with evidence of its HBCU or MI 
status upon request.
    (b) The contracting officer shall accept an offeror's HBCU or MI 
status under the provision at FAR 52.226-2, Historically Black College 
or University and Minority Institution Representation, unless--
    (1) Another offeror challenges the status; or
    (2) The contracting officer has reason to question the offeror's 
HBCU/MI status. (A list of HBCU/MIs is published periodically by the 
Department of Education.)



Sec. 226.370-7  Protesting a representation.

    Any offeror or other interested party may challenge an offeror's 
HBCU or MI representation by filing a protest with the contracting 
officer. The protest must contain specific detailed evidence supporting 
the basis for the challenge. Such protests are handled in accordance 
with FAR 33.103 and are decided by the contracting officer.



Sec. 226.370-8  Goals and incentives for subcontracting with HBCU/MIs.

    (a) In reviewing subcontracting plans submitted under the clause at 
FAR

[[Page 164]]

52.219-9, Small Business Subcontracting Plan, the contracting officer 
shall--
    (1) Ensure that the contractor included anticipated awards to HBCU/
MIs in the small disadvantaged business goal; and
    (2) Consider whether subcontracts are contemplated that involve 
research or studies of the type normally performed by higher educational 
institutions.
    (b) The contracting officer may, when contracting by negotiation, 
use in solicitations and contracts a clause similar to the clause at FAR 
52.219-10, Incentive Subcontracting Program, when a subcontracting plan 
is required and inclusion of a monetary incentive is, in the judgment of 
the contracting officer, necessary to increase subcontracting 
opportunities for HBCU/MIs. The clause should include a separate goal 
for HBCU/MIs.



Sec. 226.370-9  Solicitation provision and contract clause.

    (a) Use the clause at 252.226-7000, Notice of Historically Black 
College or University and Minority Institution Set-Aside, in 
solicitations and contracts set aside for HBCU/MIs.
    (b) Use the provision at FAR 52.226-2, Historically Black College or 
University and Minority Institution Representation, in solicitations set 
aside for HBCU/MIs.

Subpart 226.70 [Reserved]

        Subpart 226.71_Preference for Local and Small Businesses

    Source: 59 FR 12192, Mar. 16, 1994, unless otherwise noted.



Sec. 226.7100  Scope of subpart.

    This subpart implements section 2912 of the Fiscal Year 1994 Defense 
Authorization Act (Pub. L. 103-160) and section 817 of the Fiscal Year 
1995 Defense Authorization Act (Pub. L. 103-337).

[60 FR 5870, Jan. 31, 1995]



Sec. 226.7101  Definition.

    Vicinity, as used in this subpart, means the county or counties in 
which the military installation to be closed or realigned is located and 
all adjacent counties, unless otherwise defined by the agency head.

[60 FR 29499, June 5, 1995]



Sec. 226.7102  Policy.

    Businesses located in the vicinity of a military installation that 
is being closed or realigned under a base closure law, including 10 
U.S.C. 2687, and small and small disadvantaged businesses shall be 
provided maximum practicable opportunity to participate in acquisitions 
that support the closure or realignment, including acquisitions for 
environmental restoration and mitigation.



Sec. 226.7103  Procedure.

    In considering acquisitions for award through the section 8(a) 
program (subpart 219.8 and FAR subpart 19.8) or in making set-aside 
decisions under subpart 219.5 and FAR subpart 19.5 for acquisitions in 
support of a base closure or realignment, the contracting officer 
shall--
    (a) Determine whether there is a reasonable expectation that offers 
will be received from responsible business concerns located in the 
vicinity of the military installation that is being closed or realigned.
    (b) If offers can not be expected from business concerns in the 
vicinity, proceed with section 8(a) or set-aside consideration as 
otherwise indicated in part 219 and FAR part 19.
    (c) If offers can be expected from business concerns in the 
vicinity--
    (1) Consider section 8(a) only if at least one eligible 8(a) 
contractor is located in the vicinity.
    (2) Set aside the acquisition for small business only if at least 
one of the expected offers is from a small business located in the 
vicinity.

[60 FR 29499, June 5, 1995, as amended at 63 FR 41974, Aug. 6, 1998; 67 
FR 11438, Mar. 14, 2002]



Sec. 226.7104  Other considerations.

    When planning for contracts for services related to base closure 
activities at a military installation affected by a closure or 
realignment under a base closure law, contracting officers shall 
consider including, as a factor in source selection, the extent to which

[[Page 165]]

offerors specifically identify and commit, in their proposals, to a plan 
to hire residents of the vicinity of the military installation that is 
being closed or realigned.

[60 FR 61598, Nov. 30, 1995]

[[Page 166]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 227_PATENTS, DATA, AND COPYRIGHTS

         Subpart 227.3_Patent Rights Under Government Contracts

Sec.

Sec. 227.303 Contract clauses.

Sec. 227.304 Procedures.

Sec. 227.304-1 General.

Sec. 227.304-4 Subcontracts.

               Subpart 227.4_Rights in Data and Copyrights


Sec. 227.400 Scope of subpart.

    Subpart 227.6_Foreign License and Technical Assistance Agreements


Sec. 227.670 Scope.

Sec. 227.671 General.

Sec. 227.672 Policy.

Sec. 227.673 Foreign license and technical assistance agreements between 
          the Government and domestic concerns.

Sec. 227.674 Supply contracts between the Government and a foreign 
          government or concern.

Sec. 227.675 Foreign license and technical assistance agreements between 
          a domestic concern and a foreign government or concern.

Sec. 227.675-1 International Traffic in Arms Regulations.

Sec. 227.675-2 Review of agreements.

Sec. 227.676 Foreign patent interchange agreements.

      Subpart 227.70_Infringement Claims, Licenses, and Assignments


Sec. 227.7000 Scope.

Sec. 227.7001 Policy.

Sec. 227.7002 Statutes pertaining to administrative claims of 
          infringement.

Sec. 227.7003 Claims for copyright infringement.

Sec. 227.7004 Requirements for filing an administrative claim for patent 
          infringement.

Sec. 227.7005 Indirect notice of patent infringement claims.

Sec. 227.7006 Investigation and administrative disposition of claims.

Sec. 227.7007 Notification and disclosure to claimants.

Sec. 227.7008 Settlement of indemnified claims.

Sec. 227.7009 Patent releases, license agreements, and assignments.

Sec. 227.7009-1 Required clauses.

Sec. 227.7009-2 Clauses to be used when applicable.

Sec. 227.7009-3 Additional clauses--contracts except running royalty 
          contracts.

Sec. 227.7009-4 Additional clauses--contracts providing for payment of a 
          running royalty.

Sec. 227.7010 Assignments.

Sec. 227.7011 Procurement of rights in inventions, patents, and 
          copyrights.

Sec. 227.7012 Contract format.

Sec. 227.7013 Recordation.

                 Subpart 227.71_Rights in Technical Data


Sec. 227.7100 Scope of subpart.

Sec. 227.7101 Definitions.

Sec. 227.7102 Commercial items, components, or processes.

Sec. 227.7102-1 Policy.

Sec. 227.7102-2 Rights in technical data.

Sec. 227.7102-3 Contract clause.

Sec. 227.7103 Noncommercial items or processes.

Sec. 227.7103-1 Policy.

Sec. 227.7103-2 Acquisition of technical data.

Sec. 227.7103-3 Early identification of technical data to be furnished 
          to the Government with restrictions on use, reproduction or 
          disclosure.

Sec. 227.7103-4 License rights.

Sec. 227.7103-5 Government rights.

Sec. 227.7103-6 Contract clauses.

Sec. 227.7103-7 Use and non-disclosure agreement.

Sec. 227.7103-8 Deferred delivery and deferred ordering of technical 
          data.

Sec. 227.7103-9 Copyright.

Sec. 227.7103-10 Contractor identification and marking of technical data 
          to be furnished with restrictive markings.

Sec. 227.7103-11 Contractor procedures and records.

Sec. 227.7103-12 Government right to establish conformity of markings.

Sec. 227.7103-13 Government right to review, verify, challenge and 
          validate asserted restrictions.

Sec. 227.7103-14 Conformity, acceptance, and warranty of technical data.

Sec. 227.7103-15 Subcontractor rights in technical data.

Sec. 227.7103-16 Providing technical data to foreign governments, 
          foreign contractors, or international organizations.

Sec. 227.7103-17 Overseas contracts with foreign sources.

Sec. 227.7104 Contracts under the Small Business Innovation Research 
          (SBIR) Program.

Sec. 227.7105 Contracts for the acquisition of existing works.

Sec. 227.7105-1 General.

Sec. 227.7105-2 Acquisition of existing works without modification.

Sec. 227.7105-3 Acquisition of modified existing works.

Sec. 227.7106 Contracts for special works.

Sec. 227.7107 Contracts for architect-engineer services.

[[Page 167]]


Sec. 227.7107-1 Architectural designs and data clauses for architect-
          engineer or construction contracts.

Sec. 227.7107-2 Contracts for construction supplies and research and 
          development work.

Sec. 227.7107-3 Approval of restricted designs.

Sec. 227.7108 Contractor data repositories.

    Subpart 227.72_Rights in Computer Software and Computer Software 
                              Documentation


Sec. 227.7200 Scope of subpart.

Sec. 227.7201 Definitions.

Sec. 227.7202 Commercial computer software and commercial computer 
          software documentation.

Sec. 227.7202-1 Policy.

Sec. 227.7202-2 [Reserved]

Sec. 227.7202-3 Rights in commercial computer software or commercial 
          computer software documentation.

Sec. 227.7202-4 Contract clause.

Sec. 227.7203 Noncommercial computer software and noncommercial computer 
          software documentation.

Sec. 227.7203-1 Policy.

Sec. 227.7203-2 Acquisition of noncommercial computer software and 
          computer software documentation.

Sec. 227.7203-3 Early identification of computer software or computer 
          software documentation to be furnished to the Government with 
          restrictions on use, reproduction or disclosure.

Sec. 227.7203-4 License rights.

Sec. 227.7203-5 Government rights.

Sec. 227.7203-6 Contract clauses.

Sec. 227.7203-7 [Reserved]

Sec. 227.7203-8 Deferred delivery and deferred ordering of computer 
          software and computer software documentation.

Sec. 227.7203-9 Copyright.

Sec. 227.7203-10 Contractor identification and marking of computer 
          software or computer software documentation to be furnished 
          with restrictive markings.

Sec. 227.7203-11 Contractor procedures and records.

Sec. 227.7203-12 Government right to establish conformity of markings.

Sec. 227.7203-13 Government right to review, verify, challenge and 
          validate asserted restrictions.

Sec. 227.7203-14 Conformity, acceptance, and warranty of computer 
          software and computer software documentation.

Sec. 227.7203-15 Subcontractor rights in computer software or computer 
          software documentation.

Sec. 227.7203-16 Providing computer software or computer software 
          documentation to foreign governments, foreign contractors, or 
          international organizations.

Sec. 227.7203-17 Overseas contracts with foreign sources.

Sec. 227.7204 Contracts under the Small Business Innovative Research 
          Program.

Sec. 227.7205 Contracts for special works.

Sec. 227.7206 Contracts for architect-engineer services.

Sec. 227.7207 Contractor data repositories.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36389, July 31, 1991, unless otherwise noted.

         Subpart 227.3_Patent Rights Under Government Contracts



Sec. 227.303  Contract clauses.

    (a) Pursuant to FAR 27.304-1(e), the contracting officer shall 
insert the clause at 252.227-7039, Patents--Reporting of Subject 
Inventions, in solicitations and contracts containing the clause at FAR 
52.227-11, Patent Rights--Retention by the Contractor (Short Form).



Sec. 227.304  Procedures.



Sec. 227.304-1  General.

    Interim and final invention reports and notification of all 
subcontracts for experimental, developmental, or research work (FAR 
27.304-1(e)(2)(ii)) may be submitted on DD Form 882, Report of 
Inventions and Subcontracts.

[56 FR 36389, July 31, 1991, as amended at 57 FR 53600, Nov. 12, 1992]



Sec. 227.304-4  Subcontracts.

    The contracting officer shall insert the clause at 252.227-7034, 
Patents-Subcontracts, in solicitations and contracts containing the 
clause at FAR 52.227-11, Patent Rights--Retention by the Contractor 
(Short Form).

               Subpart 227.4_Rights in Data and Copyrights



Sec. 227.400  Scope of subpart.

    DoD activities shall use the guidance in subparts 227.71 and 227.72 
instead of the guidance in FAR subpart 27.4.

[60 FR 33471, June 28, 1995]

[[Page 168]]

    Subpart 227.6_Foreign License and Technical Assistance Agreements



Sec. 227.670  Scope.

    This subpart prescribes policy with respect to foreign license and 
technical assistance agreements.



Sec. 227.671  General.

    In furtherance of the Military Assistance Program or for other 
national defense purposes, the Government may undertake to develop or 
encourage the development of foreign additional sources of supply. The 
development of such sources may be accomplished by an agreement, often 
called a foreign licensing agreement or technical assistance agreement, 
wherein a domestic concern, referred to in this subpart as a ``primary 
source,'' agrees to furnish to a foreign concern or government, herein 
referred to as a ``second source;'' foreign patent rights; technical 
assistance in the form of data, know-how, trained personnel of the 
primary source, instruction and guidance of the personnel of the second 
source, jigs, dies, fixtures, or other manufacturing aids, or such other 
assistance, information, rights, or licenses as are needed to enable the 
second source to produce particular supplies or perform particular 
services. Agreements calling for one or more of the foregoing may be 
entered into between the primary source and the Government, a foreign 
government, or a foreign concern. The consideration for providing such 
foreign license and technical assistance may be in the form of a lump 
sum payment, payments for each item manufactured by the second source, 
an agreement to exchange data and patent rights on improvements made to 
the article or service, capital stock transactions, or any combination 
of these. The primary source's bases for computing such consideration 
may include actual costs; charges for the use of patents, data, or know-
how reflecting the primary source's investment in developing and 
engineering and production techniques; and the primary source's 
``price'' for setting up a second source. Such agreements often refer to 
the compensation to be paid as a royalty or license fee whether or not 
patent rights are involved.



Sec. 227.672  Policy.

    It is Government policy not to pay in connection with its contracts, 
and not to allow to be paid in connection with contracts made with funds 
derived through the Military Assistance Program or otherwise through the 
United States Government, charges for use of patents in which it holds a 
royalty-free license or charges for data which it has a right to use and 
disclose to others, or which is in the public domain, or which the 
Government has acquired without restriction upon its use and disclosure 
to others. This policy shall be applied by the Departments in 
negotiating contract prices for foreign license technical assistance 
contracts (227.675) or supply contracts with second sources (227.674); 
and in commenting on such agreements when they are referred to the 
Department of Defense by the Department of State pursuant to section 414 
of the Mutual Security Act of 1954 as amended (22 U.S.C. 1934) and the 
International Traffic in Arms Regulations (see 227.675).



Sec. 227.673  Foreign license and technical assistance agreements 
          between the Government and domestic concerns.

    (a) Contracts between the Government and a primary source to provide 
technical assistance or patent rights to a second source for the 
manufacture of supplies or performance of services shall, to the extent 
practicable, specify the rights in patents and data and any other rights 
to be supplied to the second source. Each contract shall provide, in 
connection with any separate agreement between the primary source and 
the second source for patent rights or technical assistance relating to 
the articles or services involved in the contract, that--
    (1) The primary source and his subcontractors shall not make, on 
account of any purchases by the Government or by others with funds 
derived through the Military Assistance Program or otherwise through the 
Government, any charge to the second source for royalties or 
amortization for patents or inventions in which the Government

[[Page 169]]

holds a royalty-free license; or data which the Government has the right 
to possess, use, and disclose to others; or any technical assistance 
provided to the second source for which the Government has paid under a 
contract between the Government and the primary source; and
    (2) The separate agreement between the primary and second source 
shall include a statement referring to the contract between the 
Government and the primary source, and shall conform to the requirements 
of the International Traffic in Arms Regulations (see 227.675-1).
    (b) The following factors, among others, shall be considered in 
negotiating the price to be paid the primary source under contracts 
within (a) of this section:
    (1) The actual cost of providing data, personnel, manufacturing 
aids, samples, spare parts, and the like;
    (2) The extent to which the Government has contributed to the 
development of the supplies or services, and to the methods of 
manufacture or performance, through past contracts for research and 
development or for manufacture of the supplies or performance of the 
services; and
    (3) The Government's patent rights and rights in data relating to 
the supplies or services and to the methods of manufacture or of 
performance.



Sec. 227.674  Supply contracts between the Government and a foreign 
          government or concern.

    In negotiating contract prices with a second source, including the 
redetermination of contract prices, or in determining the allowability 
of costs under a cost-reimbursement contract with a second source, the 
contracting officer:
    (a) Shall obtain from the second source a detailed statement (see 
FAR 27.204-1(a)(2)) of royalties, license fees, and other compensation 
paid or to be paid to a primary source (or any of his subcontractors) 
for patent rights, rights in data, and other technical assistance 
provided to the second source, including identification and description 
of such patents, data, and technical assistance; and
    (b) Shall not accept or allow charges which in effect are--
    (1) For royalties or amortization for patents or inventions in which 
the Government holds a royalty-free license; or
    (2) For data which the Government has a right to possess, use, and 
disclose to others; or
    (3) For any technical assistance provided to the second source for 
which the Government has paid under a contract between the Government 
and a primary source.



Sec. 227.675  Foreign license and technical assistance agreements 
          between a domestic concern and a foreign government or 
          concern.



Sec. 227.675-1  International Traffic in Arms Regulations.

    Pursuant to section 414 of the Mutual Security Act of 1954, as 
amended (22 U.S.C. 1934), the Department of State controls the 
exportation of data relating to articles designated in the United States 
Munitions List as arms, ammunition, or munitions of war. (The Munitions 
List and pertinent procedures are set forth in the International Traffic 
in Arms Regulations, 22 CFR, et seq.) Before authorizing such 
exportation, the Department of State generally requests comments from 
the Department of Defense. On request of the Office of the Assistant 
Secretary of Defense (International Security Affairs), each Department 
shall submit comments thereon as the basis for a Department of Defense 
reply to the Department of State.



Sec. 227.675-2  Review of agreements.

    (a) In reviewing foreign license and technical assistance agreements 
between primary and second sources, the Department concerned shall, 
insofar as its interests are involved, indicate whether the agreement 
meets the requirements of Sec. Sec.  124.07-124.10 of the International 
Traffic in Arms Regulations or in what respects it is deficient. 
Paragraphs (b) through (g) of this subsection provide general guidance.
    (b) When it is reasonably anticipated that the Government will 
purchase from the second source the supplies or services involved in the 
agreement, or that Military Assistance Program

[[Page 170]]

funds will be provided for the procurement of the supplies or services, 
the following guidance applies.
    (1) If the agreement specifies a reduction in charges thereunder, 
with respect to purchases by or for the Government or by others with 
funds derived through the Military Assistance Program or otherwise 
through the Government, in recognition of the Government's rights in 
patents and data, the Department concerned shall evaluate the amount of 
the reduction to determine whether it is fair and reasonable in the 
circumstances, before indicating its approval.
    (2) If the agreement does not specify any reduction in charges or 
otherwise fails to give recognition to the Government's rights in the 
patents or data involved, approval shall be conditioned upon amendment 
of the agreement to reflect a reduction, evaluated by the Department 
concerned as acceptable to the Government, in any charge thereunder with 
respect to purchases made by or for the Government or by others with 
funds derived through the Military Assistance Program or otherwise 
through the Government, in accordance with Sec.  124.10 of the 
International Traffic in Arms Regulations.
    (3) If the agreement provides that no charge is to be made to the 
second source for data or patent rights to the extent of the 
Government's rights, the Department concerned shall evaluate the 
acceptability of the provision before indicating its approval.
    (4) If time or circumstances do not permit the evaluation called for 
in (b) (1), (2), or (3) of this subsection, the guidance in (c) of this 
subsection shall be followed.
    (c) When it is not reasonably anticipated that the Government will 
purchase from the second source the supplies or services involved in the 
agreement nor that Military Assistance Program funds will be provided 
for the purchase of the supplies or services, then the following 
guidance applies.
    (1) If the agreement provides for charges to the second source for 
data or patent rights, it may suffice to fulfill the requirements of 
Sec.  124.10 insofar as the Department of Defense is concerned if:
    (i) The agreement requires the second source to advise the primary 
source when he has knowledge of any purchase made or to be made from him 
by or for the Government or by others with funds derived through the 
Military Assistance Program or otherwise through the Government;
    (ii) The primary source separately agrees with the Government that 
upon such advice to him from the second source or from the Government or 
otherwise as to any such a purchase or prospective purchase, he will 
negotiate with the Department concerned an appropriate reduction in his 
charges to the second source in recognition of any Government rights in 
patents or data; and
    (iii) The agreement between the primary and second sources further 
provides that in the event of any such purchase and resulting reduction 
in charges, the second source shall pass on this reduction to the 
Government by giving the Government a corresponding reduction in the 
purchase price of the article or service.
    (2) If the agreement provides that no charge is to be made to the 
second source for data or patent rights to the extent to which the 
Government has rights, the Department concerned shall:
    (i) Evaluate the acceptability of the provision before indicating 
its approval; or
    (ii) Explicitly condition its approval on the right to evaluate the 
acceptability of the provision at a later time.
    (d) When there is a technical assistance agreement between the 
primary source and the Government related to the agreement between the 
primary and second sources that is under review, the latter agreement 
shall reflect the arrangements contemplated with respect thereto by the 
Government's technical assistance agreement with the primary source.
    (e) Every agreement shall provide that any license rights 
transferred under the agreement are subject to existing rights of the 
Government.
    (f) In connection with every agreement referred to in (b) of this 
section, a request shall be made to the primary source--

[[Page 171]]

    (1) To identify the patents, data, and other technical assistance to 
be provided to the second source by the primary source or any of his 
subcontractors,
    (2) To identify any such patents and data in which, to the knowledge 
of the primary source, the Government may have rights, and
    (3) To segregate the charges made to the second source for each such 
category or item of patents, data, and other technical assistance.

Reviewing personnel shall verify this information or, where the primary 
source does not furnish it, obtain such information from Governmental 
sources so far as practicable.
    (g) The Department concerned shall make it clear that its approval 
of any agreement does not necessarily recognize the propriety of the 
charges or the amounts thereof, or constitute approval of any of the 
business arrangements in the agreement, unless the Department expressly 
intends by its approval to commit itself to the fairness and 
reasonableness of a particular charge or charges. In any event, a 
disclaimer should be made to charges or business terms not affecting any 
purchase made by or for the Government or by others with funds derived 
through the Military Assistance Program or otherwise through the 
Government.



Sec. 227.676  Foreign patent interchange agreements.

    (a) Patent interchange agreements between the United States and 
foreign governments provide for the use of patent rights, compensation, 
free licenses, and the establishment of committees to review and make 
recommendations on these matters. The agreements also may exempt the 
United States from royalty and other payments. The contracting officer 
shall ensure that royalty payments are consistent with patent 
interchange agreements.
    (b) Assistance with patent rights and royalty payments in the United 
States European Command (USEUCOM) area of responsibility is available 
from HQ USEUCOM, ATTN: ECLA, Unit 30400, Box 1000, APO AE 09128; 
Telephone: DSN 430-8001/7263, Commercial 49-0711-680-8001/7263; Telefax: 
49-0711-680-5732.

[62 FR 34125, June 24, 1997, as amended at 63 FR 11534, Mar. 9, 1998]

      Subpart 227.70_Infringement Claims, Licenses, and Assignments



Sec. 227.7000  Scope.

    This subpart prescribes policy, procedures, and instructions for use 
of clauses with respect to processing licenses, assignments, and 
infringement claims.



Sec. 227.7001  Policy.

    Whenever a claim of infringement of privately owned rights in 
patented inventions or copyrighted works is asserted against any 
Department or Agency of the Department of Defense, all necessary steps 
shall be taken to investigate, and to settle administratively, deny, or 
otherwise dispose of such claim prior to suit against the United States. 
This subpart 227.70 does not apply to licenses or assignments acquired 
by the Department of Defense under the Patent Rights clauses.



Sec. 227.7002  Statutes pertaining to administrative claims of 
          infringement.

    Statutes pertaining to administrative claims of infringement in the 
Department of Defense include the following: the Foreign Assistance Act 
of 1961, 22 U.S.C. 2356 (formerly the Mutual Security Acts of 1951 and 
1954); the Invention Secrecy Act, 35 U.S.C. 181-188; 10 U.S.C. 2386; 28 
U.S.C. 1498; and 35 U.S.C. 286.



Sec. 227.7003  Claims for copyright infringement.

    The procedures set forth herein will be followed, where applicable, 
in copyright infringement claims.



Sec. 227.7004  Requirements for filing an administrative claim for 
          patent infringement.

    (a) A patent infringement claim for compensation, asserted against 
the United States under any of the applicable statutes cited in 
227.7002, must be actually communicated to and received by a Department, 
agency, organization,

[[Page 172]]

office, or field establishment within the Department of Defense. Claims 
must be in writing and should include the following:
    (1) An allegation of infringement;
    (2) A request for compensation, either expressed or implied;
    (3) A citation of the patent or patents alleged to be infringed;
    (4) A sufficient designation of the alleged infringing item or 
process to permit identification, giving the military or commercial 
designation, if known, to the claimant;
    (5) A designation of at least one claim of each patent alleged to be 
infringed; or
    (6) As an alternative to (a) (4) and (5) of this section, a 
declaration that the claimant has made a bona fide attempt to determine 
the item or process which is alleged to infringe, but was unable to do 
so, giving reasons, and stating a reasonable basis for his belief that 
his patent or patents are being infringed.
    (b) In addition to the information listed in (a) of this section, 
the following material and information is generally necessary in the 
course of processing a claim of patent infringement. Claimants are 
encouraged to furnish this information at the time of filing a claim to 
permit the most expeditious processing and settlement of the claim.
    (1) A copy of the asserted patent(s) and identification of all 
claims of the patent alleged to be infringed.
    (2) Identification of all procurements known to claimant which 
involve the alleged infringing item or process, including the identity 
of the vendor or contractor and the Government procuring activity.
    (3) A detailed identification of the accused article or process, 
particularly where the article or process relates to a component or 
subcomponent of the item procured, an element by element comparison of 
the representative claims with the accused article or process. If 
available, this identification should include documentation and drawings 
to illustrate the accused article or process in suitable detail to 
enable verification of the infringement comparison.
    (4) Names and addresses of all past and present licenses under the 
patent(s), and copies of all license agreements and releases involving 
the patent(s).
    (5) A brief description of all litigation in which the patent(s) has 
been or is now involved, and the present status thereof.
    (6) A list of all persons to whom notices of infringement have been 
sent, including all departments and agencies of the Government, and a 
statement of the ultimate disposition of each.
    (7) A description of Government employment or military service, if 
any, by the inventor and/or patent owner.
    (8) A list of all Government contracts under which the inventor, 
patent owner, or anyone in privity with him performed work relating to 
the patented subject matter.
    (9) Evidence of title to the patent(s) alleged to be infringed or 
other right to make the claim.
    (10) A copy of the Patent Office file of each patent if available to 
claimant.
    (11) Pertinent prior art known to claimant, not contained in the 
Patent Office file, particularly publications and foreign art.

In addition in the foregoing, if claimant can provide a statement that 
the investigation may be limited to the specifically identified accused 
articles or processes, or to a specific procurement, it may materially 
expedite determination of the claim.
    (c) Any Department receiving an allegation of patent infringement 
which meets the requirements of this paragraph shall acknowledge the 
same and supply the other Departments which may have an interest therein 
with a copy of such communication and the acknowledgement thereof.
    (1) For the Department of the Army--Chief, Patents, Copyrights, and 
Trademarks Division, U.S. Army Legal Services Agency;
    (2) For the Department of the Navy--The Patent Counsel for Navy, 
Office of Naval Research;
    (3) For the Department of the Air Force--Chief, Patents Division, 
Office of The Judge Advocate General;
    (4) For the Defense Logistics Agency--The Office of Counsel; for the 
National Security Agency, the General Counsel;

[[Page 173]]

    (5) For the Defense Information Systems Agency--the Counsel;
    (6) For the Defense Threat Reduction Agency--The General Counsel; 
and
    (7) For the National Imagery and Mapping Agency--The Counsel.
    (d) If a communication alleging patent infringement is received 
which does not meet the requirements set forth in paragraph (c) of this 
section, the sender shall be advised in writing--
    (1) That his claim for infringement has not been satisfactorily 
presented, and
    (2) Of the elements considered necessary to establish a claim.
    (e) A communication making a proffer of a license in which no 
infringement is alleged shall not be considered as a claim for 
infringement.

[56 FR 36389, July 31, 1991, as amended at 56 FR 67216, Dec. 30, 1991; 
61 FR 50454, Sept. 26, 1996; 62 FR 2613, Jan. 17, 1997; 64 FR 51076, 
Sept. 21, 1999]



Sec. 227.7005  Indirect notice of patent infringement claims.

    (a) A communication by a patent owner to a Department of Defense 
contractor alleging that the contractor has committed acts of 
infringement in performance of a Government contract shall not be 
considered a claim within the meaning of 227.7004 until it meets the 
requirements specified therein.
    (b) Any Department receiving an allegation of patent infringement 
which meets the requirements of 227.7004 shall acknowledge the same and 
supply the other Departments (see 227.7004(c)) which may have an 
interest therein with a copy of such communication and the 
acknowledgement thereof.
    (c) If a communication covering an infringement claim or notice 
which does not meet the requirements of 227.7004(a) is received from a 
contractor, the patent owner shall be advised in writing as covered by 
the instructions of 227.7004(d).



Sec. 227.7006  Investigation and administrative disposition of claims.

    An investigation and administrative determination (denial or 
settlement) of each claim shall be made in accordance with instructions 
and procedures established by each Department, subject to the following:
    (a) When the procurement responsibility for the alleged infringing 
item or process is assigned to a single Department or only one 
Department is the purchaser of the alleged infringing item or process, 
and the funds of that Department only are to be charged in the 
settlement of the claim, that Department shall have the sole 
responsibility for the investigation and administrative determination of 
the claim and for the execution of any agreement in settlement of the 
claim. Where, however, funds of another Department are to be charged, in 
whole or in part, the approval of such Department shall be obtained as 
required by 208.7002. Any agreement in settlement of the claim, approved 
pursuant to 208.7002 shall be executed by each of the Departments 
concerned.
    (b) When two or more Departments are the respective purchasers of 
alleged infringing items or processes and the funds of those Departments 
are to be charged in the settlement of the claim, the investigation and 
administrative determination shall be the responsibility of the 
Department having the predominant financial interest in the claim or of 
the Department or Departments as jointly agreed upon by the Departments 
concerned. The Department responsible for negotiation shall, throughout 
the negotiation, coordinate with the other Departments concerned and 
keep them advised of the status of the negotiation. Any agreement in the 
settlement of the claim shall be executed by each Department concerned.



Sec. 227.7007  Notification and disclosure to claimants.

    When a claim is denied, the Department responsible for the 
administrative determination of the claim shall so notify the claimant 
or his authorized representative and provide the claimant a reasonable 
rationale of the basis for denying the claim. Disclosure of information 
or the rationale referred to above shall be subject to applicable 
statutes, regulations, and directives pertaining to security, access to 
official records, and the rights of others.

[[Page 174]]



Sec. 227.7008  Settlement of indemnified claims.

    Settlement of claims involving payment for past infringement shall 
not be made without the consent of, and equitable contribution by, each 
indemnifying contractor involved, unless such settlement is determined 
to be in the best interests of the Government and is coordinated with 
the Department of Justice with a view to preserving any rights of the 
Government against the contractors involved. If consent of and equitable 
contribution by the contractors are obtained, the settlement need not be 
coordinated with the Department of Justice.



Sec. 227.7009  Patent releases, license agreements, and assignments.

    This section contains clauses for use in patent release and 
settlement agreements, license agreements, and assignments, executed by 
the Government, under which the Government acquires rights. Minor 
modifications of language (e.g., pluralization of ``Secretary'' or 
``Contracting Officer'') in multi-departmental agreements may be made if 
necessary.



Sec. 227.7009-1  Required clauses.

    (a) Covenant Against Contingent Fees. Insert the clause at FAR 
52.203-5.
    (b) Gratuities. Insert the clause at FAR 52.203-3.
    (c) Assignment of Claims. Insert the clause at FAR 52.232-23.
    (d) Disputes. Pursuant to FAR 33.014, insert the clause at FAR 
52.233-1.
    (e) Non-Estoppel. Insert the clause at 252.227-7000.

[56 FR 36389, July 31, 1991, as amended at 61 FR 50454, Sept. 26, 1996]



Sec. 227.7009-2  Clauses to be used when applicable.

    (a) Release of past infringement. The clause at 252.227-7001, 
Release of Past Infringement, is an example which may be modified or 
omitted as appropriate for particular circumstances, but only upon the 
advice of cognizant patent or legal counsel. (See footnotes at end of 
clause.)
    (b) Readjustment of payments. The clause at 252.227-7002, 
Readjustment of Payments, shall be inserted in contracts providing for 
payment of a running royalty.
    (c) Termination. The clause at 252.227-7003, Termination, is an 
example for use in contracts providing for the payment of a running 
royalty. This clause may be modified or omitted as appropriate for 
particular circumstances, but only upon the advice of cognizant patent 
or legal counsel (see 227.7004(c)).



Sec. 227.7009-3  Additional clauses--contracts except running royalty 
          contracts.

    The following clauses are examples for use in patent release and 
settlement agreements, and license agreements not providing for payment 
by the Government of a running royalty.
    (a) License Grant. Insert the clause at 252.227-7004.
    (b) License Term. Insert one of the clauses at 252.227-7005 
Alternate I or Alternate II, as appropriate.



Sec. 227.7009-4  Additional clauses--contracts providing for payment of 
          a running royalty.

    The clauses set forth below are examples which may be used in patent 
release and settlement agreements, and license agreements, when it is 
desired to cover the subject matter thereof and the contract provides 
for payment of a running royalty.
    (a) License grant--running royalty. No Department shall be obligated 
to pay royalties unless the contract is signed on behalf of such 
Department. Accordingly, the License Grant clause at 252.227-7006 should 
be limited to the practice of the invention by or for the signatory 
Department or Departments.
    (b) License term--running royalty. The clause at 252.227-7007 is a 
sample form for expressing the license term.
    (c) Computation of royalties. The clause at 252.227-7008 providing 
for the computation of royalties, may be of varying scope depending upon 
the nature of the royalty bearing article, the volume of procurement, 
and the type of contract pursuant to which the procurement is to be 
accomplished.
    (d) Reporting and payment of royalties. (1) The contract should 
contain a provision specifying the office designated within the specific 
Department involved to make any necessary reports

[[Page 175]]

to the contractor of the extent of use of the licensed subject matter by 
the entire Department, and such office shall be charged with the 
responsibility of obtaining from all procuring offices of that 
Department the information necessary to make the required reports and 
corresponding vouchers necessary to make the required payments. The 
clause at 252.227-7009 is a sample for expressing reporting and payment 
of royalties requirements.
    (2) Where more than one Department or Government Agency is licensed 
and there is a ceiling on the royalties payable in any reporting period, 
the licensing Departments or Agencies shall coordinate with respect to 
the pro rata share of royalties to be paid by each.
    (e) License to other government agencies. When it is intended that a 
license on the same terms and conditions be available to other 
departments and agencies of the Government, the clause at 252.227-7010 
is an example which may be used.



Sec. 227.7010  Assignments.

    (a) The clause at 252.227-7011 is an example which may be used in 
contracts of assignment of patent rights to the Government.
    (b) To facilitate proof of contracts of assignments, the 
acknowledgement of the contractor should be executed before a notary 
public or other officer authorized to administer oaths (35 U.S.C. 261).



Sec. 227.7011  Procurement of rights in inventions, patents, and 
          copyrights.

    Even though no infringement has occurred or been alleged, it is the 
policy of the Department of Defense to procure rights under patents, 
patent applications, and copyrights whenever it is in the Government's 
interest to do so and the desired rights can be obtained at a fair 
price. The required and suggested clauses at 252.227-7004 and 252.227-
7010 shall be required and suggested clauses, respectively, for license 
agreements and assignments made under this paragraph. The instructions 
at 227.7009-3 and 227.7010 concerning the applicability and use of those 
clauses shall be followed insofar as they are pertinent.



Sec. 227.7012  Contract format.

    The format at 252.227-7012 appropriately modified where necessary, 
may be used for contracts of release, license, or assignment.



Sec. 227.7013  Recordation.

    Executive Order No. 9424 of 18 February 1944 requires all executive 
Departments and agencies of the Government to forward through 
appropriate channels to the Commissioner of Patents and Trademarks, for 
recording, all Government interests in patents or applications for 
patents.

                 Subpart 227.71_Rights in Technical Data

    Source: 60 FR 33471, June 28, 1995, unless otherwise noted.



Sec. 227.7100  Scope of subpart.

    This subpart--
    (a) Prescribes policies and procedures for the acquisition of 
technical data and the rights to use, modify, reproduce, release, 
perform, display, or disclose technical data. It implements requirements 
in the following laws and Executive Order:
    (1) 10 U.S.C. 2302(4).
    (2) 10 U.S.C. 2305 (subsection (d)(4)).
    (3) 10 U.S.C. 2320.
    (4) 10 U.S.C. 2321.
    (5) 10 U.S.C. 2325.
    (6) Pub. L. 103-355.
    (7) Executive Order 12591 (Subsection 1(b)(6)).
    (b) Does not apply to computer software or technical data that is 
computer software documentation (see subpart 227.72).



Sec. 227.7101  Definitions.

    (a) As used in this subpart, unless otherwise specifically 
indicated, the terms ``offeror'' and ``contractor'' include an offeror's 
or contractor's subcontractors, suppliers, or potential subcontractors 
or suppliers at any tier.
    (b) Other terms used in this subpart are defined in the clause at 
252.227-7013, Rights in Technical Data--Noncommercial Items.

[56 FR 36389, July 31, 1991, as amended at 60 FR 61598, Nov. 30, 1995]

[[Page 176]]



Sec. 227.7102  Commercial items, components, or processes.

    Section 2320(b)(1) of Title 10 U.S.C. establishes a presumption that 
commercial items are developed at private expense whether or not a 
contractor submits a justification in response to a challenge notice. 
Therefore, do not challenge a contractor's assertion that a commercial 
item, component, or process was developed at private expense unless the 
Government can demonstrate that it contributed to development of the 
item, component or process. Follow the procedures in 227.7103-13 and the 
clause at 252.227-7037, Validation of Restrictive Markings on Technical 
Data, when information provided by the Department of Defense 
demonstrates that an item, component, or process was not developed 
exclusively at private expense. However, when a challenge is warranted, 
a contractor's or subcontractor's failure to respond to the challenge 
notice cannot be the sole basis for issuing a final decision denying the 
validity of an asserted restriction.



Sec. 227.7102-1  Policy.

    (a) DoD shall acquire only the technical data customarily provided 
to the public with a commercial item or process, except technical data 
that--
    (1) Are form, fit, or function data;
    (2) Are required for repair or maintenance of commercial items or 
processes, or for the proper installation, operating, or handling of a 
commercial item, either as a stand alone unit or as a part of a military 
system, when such data are not customarily provided to commercial users 
or the data provided to commercial users is not sufficient for military 
purposes; or
    (3) Describe the modifications made at Government expense to a 
commercial item or process in order to meet the requirements of a 
Government solicitation.
    (b) To encourage offerors and contractors to offer or use commercial 
products to satisfy military requirements, offerors, and contractors 
shall not be required, except for the technical data described in 
paragraph (a) of this subsection, to--
    (1) Furnish technical information related to commercial items or 
processes that is not customarily provided to the public; or
    (2) Relinquish to, or otherwise provide, the Government rights to 
use, modify, reproduce, release, perform, display, or disclose technical 
data pertaining to commercial items or processes except for a transfer 
of rights mutually agreed upon.



Sec. 227.7102-2  Rights in technical data.

    (a) The clause at 252.227-7015, Technical Data--Commercial Items, 
provides the Government specific license rights in technical data 
pertaining to commercial items or processes. DoD may use, modify, 
reproduce, release, perform, display, or disclose data only within the 
Government. The data may not be used to manufacture additional 
quantities of the commercial items and, except for emergency repair or 
overhaul, may not be released or disclosed to, or used by, third parties 
without the contractor's written permission. Those restrictions do not 
apply to the technical data described in 227.7102-1(a).
    (b) If additional rights are needed, contracting activities must 
negotiate with the contractor to determine if there are acceptable terms 
for transferring such rights. The specific additional rights granted to 
the Government shall be enumerated in a license agreement made part of 
the contract.



Sec. 227.7102-3  Contract clause.

    (a) Except as provided in paragraph (b) of this subsection, use the 
clause at 252.227-7015, Technical Data--Commercial Items, in all 
solicitations and contracts when the contractor will be required to 
deliver technical data pertaining to commercial items, components, or 
processes. Do not require the contractor to include this clause in its 
subcontracts.
    (b) Use the clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items, in lieu of the clause at 252.227-7015 if the 
Government will pay any portion of the development costs. Do not require 
the contractor to include this clause in its subcontracts for commercial 
items or commercial components.
    (c) Use the clause at 252.227-7037, Validation of Restrictive 
Markings on

[[Page 177]]

Technical Data, in all solicitations and contracts for commercial items 
that include the clause at 252.227-7015 or the clause at 252.227-7013. 
Do not require the contractor to include this clause in its subcontracts 
for commercial items or commercial components.

[56 FR 36389, July 31, 1991, as amended at 60 FR 61598, Nov. 30, 1995]



Sec. 227.7103  Noncommercial items or processes.



Sec. 227.7103-1  Policy.

    (a) DoD policy is to acquire only the technical data, and the rights 
in that data, necessary to satisfy agency needs.
    (b) Solicitations and contracts shall--
    (1) Specify the technical data to be delivered under a contract and 
delivery schedules for the data;
    (2) Establish or reference procedures for determining the 
acceptability of technical data;
    (3) Establish separate contract line items, to the extent 
practicable, for the technical data to be delivered under a contract and 
require offerors and contractors to price separately each deliverable 
data item; and
    (4) Require offerors to identify, to the extent practicable, 
technical data to be furnished with restrictions on the Government's 
rights and require contractors to identify technical data to be 
delivered with such restrictions prior to delivery.
    (c) Offerors shall not be required, either as a condition of being 
responsive to a solicitation or as a condition for award, to sell or 
otherwise relinquish to the Government any rights in technical data 
related to items, components or processes developed at private expense 
except for the data identified at 227.7103-5(a)(2) and (a)(4) through 
(9).
    (d) Offerors and contractors shall not be prohibited or discouraged 
from furnishing or offering to furnish items, components, or processes 
developed at private expense solely because the Government's rights to 
use, modify, release, reproduce, perform, display, or disclose technical 
data pertaining to those items may be restricted.
    (e) As provided in 10 U.S.C. 2305, solicitations for major systems 
development contracts shall not require offerors to submit proposals 
that would permit the Government to acquire competitively items 
identical to items developed at private expense unless a determination 
is made at a level above the contracting officer that--
    (1) The offeror will not be able to satisfy program schedule or 
delivery requirements; or
    (2) The offeror's proposal to meet mobilization requirements does 
not satisfy mobilization needs.



Sec. 227.7103-2  Acquisition of technical data.

    (a) Contracting officers shall work closely with data managers and 
requirements personnel to assure that data requirements included in 
solicitations are consistent with the policy expressed in 227.7103-1.
    (b)(1) Data managers or other requirements personnel are responsible 
for identifying the Government's minimum needs for technical data. Data 
needs must be established giving consideration to the contractor's 
economic interests in data pertaining to items, components, or processes 
that have been developed at private expense; the Government's costs to 
acquire, maintain, store, retrieve, and protect the data; reprocurement 
needs; repair, maintenance and overhaul philosophies; spare and repair 
part considerations; and whether procurement of the items, components, 
or processes can be accomplished on a form, fit, or function basis. When 
it is anticipated that the Government will obtain unlimited or 
government purpose rights in technical data that will be required for 
competitive spare or repair parts procurements, such data should be 
identified as deliverable data items. Reprocurement needs may not be a 
sufficient reason to acquire detailed manufacturing or process data when 
items or components can be acquired using performance specifications, 
form, fit and function data, or when there are a sufficient number of 
alternate sources which can reasonably be expected to provide such items 
on a performance specification or form, fit, or function basis.

[[Page 178]]

    (2) When reviewing offers received in response to a solicitation or 
other request for data, data managers must balance the original 
assessment of the Government's data needs with data prices contained in 
the offer.
    (c) Contracting officers are responsible for ensuring that, wherever 
practicable, solicitations and contracts--
    (1) Identify the type and quantity of the technical data to be 
delivered under the contract and the format and media in which the data 
will be delivered;
    (2) Establish each deliverable data item as a separate contract line 
item (this requirement may be satisfied by listing each deliverable data 
item on an exhibit to the contract);
    (3) Identify the prices established for each deliverable data item 
under a fixed-price type contract;
    (4) Include delivery schedules and acceptance criteria for each 
deliverable data item; and
    (5) Specifically identify the place of delivery for each deliverable 
item of technical data.



Sec. 227.7103-3  Early identification of technical data to be furnished 
          to the Government with restrictions on use, reproduction or 
          disclosure.

    (a) 10 U.S.C. 2320 requires, to the maximum extent practicable, an 
identification prior to delivery of any technical data to be delivered 
to the Government with restrictions on use.
    (b) Use the provision at 252.227-7017, Identification and Assertion 
of Use, Release, or Disclosure Restrictions, in all solicitations that 
include the clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items. The provision requires offerors to identify any 
technical data for which restrictions, other than copyright, on use, 
release, or disclosure are asserted and to attach the identification and 
assertions to the offer.
    (c) Subsequent to contract award, the clause at 252.277-7013 permits 
a contractor, under certain conditions, to make additional assertions of 
use, release, or disclosure restrictions. The prescription for the use 
of that clause and its alternate is at 227.7103-6 (a) and (b).



Sec. 227.7103-4  License rights.

    (a) Grant of license. The Government obtains rights in technical 
data, including a copyright license, under and irrevocable license 
granted or obtained for the Government by the contractor. The contractor 
or licensor retains all rights in the data not granted to the 
Government. For technical data that pertain to items, components, or 
processes, the scope of the license is generally determined by the 
source of funds used to develop the item, component, or process. When 
the technical data do not pertain to items, components, or processes, 
the scope of the license is determined by the source of funds used to 
create the data.
    (1) Techical data pertaining to items, components, or processes. 
Contractors or licensors may, with some exceptions (see 227.7103-5(a)(2) 
and (a)(4) through (9)), restrict the Government's rights to use, 
modify, release, reproduce, perform, display or disclose technical data 
pertaining to items, components, or processes developed exclusively at 
private expense (limited rights). They may not restrict the Government's 
rights in items, components, or processes developed exclusively at 
Government expense (unlimited rights) without the Government's approval. 
When an item, component, or process is developed with mixed funding, the 
Government may use, modify, release, reproduce, perform, display or 
disclose the data pertaining to such items, components, or processes 
within the Government without restriction but may release or disclose 
the data outside the Government only for government purposes (government 
purpose rights).
    (2) Technical data that do not pertain to items, components, or 
processes. Technical data may be created during the performance of a 
contract for a conceptual design or similar effort that does not require 
the development, manufacture, construction, or production of items, 
components or processes. The Government generally obtains unlimited 
rights in such data when the data were created exclusively with 
Government funds, government purpose rights when the data were created 
with mixed funding, and limited rights when the data were created 
exclusively at private expense.

[[Page 179]]

    (b) Source of funds determination. The determination of the source 
of development funds for technical data pertaining to items, components, 
or processes should be made at any practical sub-item or subcomponent 
level or for any segregable portion of a process. Contractors may assert 
limited rights in a segregable sub-item, sub-component, or portion of a 
process which otherwise qualifies for limited rights under the clause at 
252.227-7013, Rights in Technical Data--Noncommercial Items.



Sec. 227.7103-5  Government rights.

    The standard license rights that a licensor grants to the Government 
are unlimited rights, government purpose rights, or limited rights. 
Those rights are defined in the clause at 252.227-7013, Rights in 
Technical Data--Noncommercial Items. In unusual situations, the 
standards rights may not satisfy the Government's needs or the 
Government may be willing to accept lesser rights in data in return for 
other consideration. In those cases, a special license may be 
negotiated. However, the licensor is not obligated to provide the 
Government greater rights and the contracting officer is not required to 
accept lesser rights than the rights provided in the standard grant of 
license. The situations under which a particular grant of license 
applies are enumerated in paragraphs (a) through (d) of this subsection.
    (a) Unlimited rights. The Government obtains unlimited rights in 
technical data that are--
    (1) Data pertaining to an item, component, or process which has been 
or will be developed exclusively with Government funds;
    (2) Studies, analyses, test data, or similar data produced in the 
performance of a contract when the study, analysis, test, or similar 
work was specified as an element of performance;
    (3) Created exclusively with Government funds in the performance of 
a contract that does not require the development, manufacture, 
construction, or production of items, components, or processes;
    (4) Form, fit, and function data;
    (5) Necessary for installation, operation, maintenance, or training 
purposes (other than detailed manufacturing or process data);
    (6) Corrections or changes to technical data furnished to the 
contractor by the Government;
    (7) Publicly available or have been released or disclosed by the 
contractor or subcontractor without restrictions on further use, release 
or disclosure other than a release or disclosure resulting from the 
sale, transfer, or other assignment of interest in the software to 
another party or the sale or transfer of some or all of a business 
entity or its assets to another party;
    (8) Data in which the Government has obtained unlimited rights under 
another Government contract or as a result of negotiations; or
    (9) Data furnished to the Government, under a Government contract or 
subcontract thereunder, with--
    (i) Government purpose license rights or limited rights and the 
restrictive condition(s) has/have expired; or
    (ii) Government purpose rights and the contractor's exclusive right 
to use such data for commercial purposes has expired.
    (b) Government purpose rights. (1) The Government obtains government 
purpose rights in technical data--
    (i) That pertain to items, components, or processes developed with 
mixed funding except when the Government is entitled to unlimited rights 
as provided in paragraphs (a)(2) and (a)(4) through (9) of this 
subsection; or
    (ii) Created with mixed funding in the performance of a contract 
that does not require the development, manufacture, construction, or 
production of items, components, or processes.
    (2) The period during which government purpose rights are effective 
is negotiable. The clause at 252.227-7013 provides a nominal five-year 
period. Either party may request a different period. Changes to the 
government purpose rights period may be made at any time prior to 
delivery of the technical data without consideration from either party. 
Longer periods should be negotiated when a five-year period does not 
provide sufficient time to apply the data for commercial purposes or 
when necessary to recognize subcontractors' interests in the data.

[[Page 180]]

    (3) The government purpose rights period commences upon execution of 
the contract, subcontract, letter contract (or similar contractual 
instrument), contract modification, or option exercise that required the 
development. Upon expiration of the Government rights period, the 
Government has unlimited rights in the data including the right to 
authorize others to use the data for commercial purposes.
    (4) During the government purpose rights period, the government may 
not use, or authorize other persons to use, technical data marked with 
government purpose rights legends for commercial purposes. The 
Government shall not release or disclose data in which it has government 
purpose rights to any person, or authorize others to do so, unless--
    (i) Prior to release or disclosure, the intended recipient is 
subject to the use and non-disclosure agreement at 227.7103-7; or
    (ii) The intended recipient is a Government contractor receiving 
access to the data for performance of a Government contract that 
contains the clause at 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends.
    (5) When technical data marked with government purpose rights 
legends will be released or disclosed to a Government contractor 
performing a contract that does not include the clause at 252-227-7025, 
the contract may be modified, prior to release or disclosure, to include 
that clause in lieu of requiring the contractor to complete a use and 
non-disclosure agreement.
    (6) Contracting activities shall establish procedures to assure that 
technical data marked with government purpose rights legends are 
released or disclosed, including a release or disclosure through a 
Government solicitation, only to persons subject to the use and non-
disclosure restrictions. Public announcements in the Commerce Business 
Daily or other publications must provide notice of the use and non-
disclosure requirements. Class use and non-disclosure agreements (e.g., 
agreements covering all solicitations received by the XYZ company within 
a reasonable period) are authorized and may be obtained at any time 
prior to release or disclosure of the government purpose rights data. 
Documents transmitting government purpose rights data to persons under 
class agreements shall identify the technical data subject to government 
purpose rights and the class agreement under which such data are 
provided.
    (c) Limited rights. (1) The Government obtains limited rights in 
technical data--
    (i) That pertain to items, components, or processes developed 
exclusively at private expense except when the Government is entitled to 
unlimited rights as provided in paragraphs (a)(2) and (a)(4) through (9) 
of this subsection; or
    (ii) Created exclusively at private expense in the performance of a 
contract that does not require the development, manufacture, 
construction, or production of items, components, or processes.
    (2) Data in which the Government has limited rights may not be used, 
released, or disclosed outside the Government without the permission of 
the contractor asserting the restriction except for a use, release or 
disclosure that is--
    (i) Necessary for emergency repair and overhaul; or
    (ii) To a foreign government, other than detailed manufacturing or 
process data, when use, release, or disclosure is in the interest of the 
United States and is required for evaluation or informational purposes.
    (3) The person asserting limited rights must be notified of the 
Government's intent to release, disclose, or authorize others to use 
such data prior to release or disclosure of the data except notification 
of an intended release, disclosure, or use for emergency repair or 
overhaul which shall be made as soon as practicable.
    (4) When the person asserting limited rights permits the Government 
to release, disclose, or have others use the data subject to 
restrictions on further use, release, or disclosure, or for a release 
under paragraph (c)(2)(i) or (ii) of this subsection, the intended 
recipient

[[Page 181]]

must complete the use and non-disclosure agreement at 227.7103-7 prior 
to release or disclosure of the limited rights data.
    (d) Specifically negotiated license rights. (1) Negotiate specific 
licenses when the parties agree to modify the standard license rights 
granted to the government or when the government wants to obtain rights 
in data in which it does not have rights. When negotiating to obtain, 
relinquish, or increase the Government's rights in technical data, 
consider the acquisition strategy for the item, component, or process, 
including logistics support and other factors which may have relevance 
for a particular procurement. The Government may accept lesser rights 
when it has unlimited or government purpose rights in data but may not 
accept less than limited rights in such data. The negotiated license 
rights must stipulate what rights the Government has to release or 
disclose the data to other persons or to authorize others to use the 
data. Identify all negotiated rights in a license agreement made part of 
the contract.
    (2) When the Government needs additional rights in data acquired 
with government purpose or limited rights, the contracting officer must 
negotiate with the contractor to determine whether there are acceptable 
terms for transferring such rights. Generally, such negotiations should 
be conducted only when there is a need to disclose the data outside the 
Government or if the additional rights are required for competitive 
reprocurement and the anticipated savings expected to be obtained 
through competition are estimated to exceed the acquisition cost of the 
additional rights. Prior to negotiating for additional rights in limited 
rights data, consider alternatives such as--
    (i) Using performance specifications and form, fit, and function 
data to acquire or develop functionally equivalent items, components, or 
processes;
    (ii) Obtaining a contractor's contractual commitment to qualify 
additional sources and maintain adequate competition among the sources; 
or
    (iii) Reverse engineering, or providing items from Government 
inventories to contractors who request the items to facilitate the 
development of equivalent items through reverse engineering.



Sec. 227.7103-6  Contract clauses.

    (a) Use the clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items, in solicitations and contracts when the successful 
offeror(s) will be required to deliver technical data to the Government. 
Do not use the clause when the only deliverable items are computer 
software or computer software documentation (see 227.72), commercial 
items (see 227.7102-3), existing works (see 227.7105), special works 
(see 227.7106), or when contracting under the Small Business Innovation 
Research Program (see 227.7104). Except as provided in 227.7107-2, do 
not use the clause in architect-engineer and construction contracts.
    (b) Use the clause at 252.227-7013 with its Alternate I in research 
contracts when the contracting officer determines, in consultation with 
counsel, that public dissemination by the contractor would be--
    (1) In the interest of the government; and
    (2) Facilitated by the Government relinquishing its right to publish 
the work for sale, or to have others publish the work for sale on behalf 
of the Government.
    (c) Use the clause at 252.227-7025, Limitations on the Use or 
Disclosure of Government Furnished Information Marked with Restrictive 
Legends, in solicitations and contracts when it is anticipated that the 
Government will provide the contractor, for performance of its contract, 
technical data marked with another contractor's restrictive legend(s).
    (d) Use the provision at 252.227-7028, Technical Data or Computer 
Software Previously Delivered to the Government, in solicitations when 
the resulting contract will require the contractor to deliver technical 
data. The provision requires offerors to identify any technical data 
specified in the solicitations as deliverable data items that are the 
same or substantially the same as data items the offeror has delivered 
or is obligated to deliver, either as a contractor or subcontractor, 
under any other federal agency contract.

[[Page 182]]

    (e) Use the following clauses in solicitations and contracts that 
include the clause at 252.227-7013:
    (1) 252.227-7016, Rights in Bid or Proposal Information;
    (2) 252.227-7030, Technical Data--Withholding of Payment; and
    (3) 252.227-7037, Validation of Restrictive Markings on Technical 
Data (paragraph (e) of the clause contains information that must be 
included in a challenge).

[60 FR 33471, June 28, 1995; 60 FR 41157, Aug. 11, 1995; 60 FR 61598, 
Nov. 30, 1995; 62 FR 2613, Jan. 17, 1997; 69 FR 31911, June 8, 2004]



Sec. 227.7103-7  Use and non-disclosure agreement.

    (a) Except as provided in paragraph (b) of this subsection, 
technical data or computer software delivered to the Government with 
restrictions on use, modification, reproduction, release, performance, 
display, or disclosure may not be provided to third parties unless the 
intended recipient completes and signs the use and non-disclosure 
agreement at paragraph (c) of this subsection prior to release, or 
disclosure of the data.
    (1) The specific conditions under which an intended recipient will 
be authorized to use, modify, reproduce, release, perform, display, or 
disclose technical data subject to limited rights or computer software 
subject to restricted rights must be stipulated in an attachment to the 
use and non-disclosure agreement.
    (2) For an intended release, disclosure, or authorized use of 
technical data or computer software subject to special license rights, 
modify paragraph (1)(d) of the use and non-disclosure agreement to enter 
the conditions, consistent with the license requirements, governing the 
recipient's obligations regarding use, modification, reproduction, 
release, performance, display or disclosure of the data or software.
    (b) The requirement for use and non-disclosure agreements does not 
apply to Government contractors which require access to a third party's 
data or software for the performance of a Government contract that 
contains the clause at 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends.
    (c) The prescribed use and non-disclosure agreement is:

                    Use and Non-Disclosure Agreement

    The undersigned, ---------------- (Insert Name) ----------------, an 
authorized representative of the ---------------- (Insert Company Name) 
----------------, (which is hereinafter referred to as the 
``Recipient'') requests the Government to provide the Recipient with 
technical data or computer software (hereinafter referred to as 
``Data'') in which the Government's use, modification, reproduction, 
release, performance, display or disclosure rights are restricted. Those 
Data are identified in an attachment to this Agreement. In consideration 
for receiving such Data, the Recipient agrees to use the Data strictly 
in accordance with this Agreement:
    (1) The Recipient shall--
    (a) Use, modify, reproduce, release, perform, display, or disclose 
Data marked with government purpose rights or SBIR data rights legends 
only for government purposes and shall not do so for any commercial 
purpose. The Recipient shall not release, perform, display, or disclose 
these Data, without the express written permission of the contractor 
whose name appears in the restrictive legend (the ``Contractor''), to 
any person other than its subcontractors or suppliers, or prospective 
subcontractors or suppliers, who require these Data to submit offers 
for, or perform, contracts with the Recipient. The Recipient shall 
require its subcontractors or suppliers, or prospective subcontractors 
or suppliers, to sign a use and non-disclosure agreement prior to 
disclosing or releasing these Data to such persons. Such agreement must 
be consistent with the terms of this agreement.
    (b) Use, modify, reproduce, release, perform, display, or disclose 
technical data marked with limited rights legends only as specified in 
the attachment to this Agreement. Release, performance, display, or 
disclosure to other persons is not authorized unless specified in the 
attachment to this Agreement or expressly permitted in writing by the 
Contractor. The Recipient shall promptly notify the Contractor of the 
execution of this Agreement and identify the Contractor's Data that has 
been or will be provided to the Recipient, the date and place the Data 
were or will be received, and the name and address of the Government 
office that has provided or will provide the Data.
    (c) Use computer software marked with restricted rights legends only 
in performance of Contract Number ---------------- (insert contract 
number(s)) ----------------. The recipient shall not, for example, 
enhance, decompile, disassemble, or reverse engineer

[[Page 183]]

the software; time share, or use a computer program with more than one 
computer at a time. The recipient may not release, perform, display, or 
disclose such software to others unless expressly permitted in writing 
by the licensor whose name appears in the restrictive legend. The 
Recipient shall promptly notify the software licensor of the execution 
of this Agreement and identify the software that has been or will be 
provided to the Recipient, the date and place the software were or will 
be received, and the name and address of the Government office that has 
provided or will provide the software.
    (d) Use, modify, reproduce, release, perform, display, or disclose 
Data marked with special license rights legends (To be completed by the 
contracting officer. See 227.7103-7(a)(2). Omit if none of the Data 
requested is marked with special license rights legends).
    (2) The Recipient agrees to adopt or establish operating procedures 
and physical security measures designed to protect these Data from 
inadvertent release or disclosure to unauthorized third parties.
    (3) The Recipient agrees to accept these Data ``as is'' without any 
Government representation as to suitability for intended use or warranty 
whatsoever. This disclaimer does not affect any obligation the 
Government may have regarding Data specified in a contract for the 
performance of that contract.
    (4) The Recipient may enter into any agreement directly with the 
Contractor with respect to the use, modification, reproduction, release, 
performance, display, or disclosure of these Data.
    (5) The Recipient agrees to indemnify and hold harmless the 
Government, its agents, and employees from every claim or liability, 
including attorneys fees, court costs, and expenses arising out of, or 
in any way related to, the misuse or unauthorized modification, 
reproduction, release, performance, display, or disclosure of Data 
received from the Government with restrictive legends by the Recipient 
or any person to whom the Recipient has released or disclosed the Data.
    (6) The Recipient is executing this Agreement for the benefit of the 
Contractor. The Contractor is a third party beneficiary of this 
Agreement who, in addition to any other rights it may have, is intended 
to have the rights of direct action against the Recipient or any other 
person to whom the Recipient has released or disclosed the Data, to seek 
damages from any breach of this Agreement or to otherwise enforce this 
Agreement.
    (7) The Recipient agrees to destroy these Data, and all copies of 
the Data in its possession, no later than 30 days after the date shown 
in paragraph (8) of this Agreement, to have all persons to whom it 
released the Data do so by that date, and to notify the Contractor that 
the Data have been destroyed.
    (8) This Agreement shall be effective for the period commencing with 
the Recipient's execution of this Agreement and ending upon -------- 
(Insert Date) --------. The obligations imposed by this Agreement shall 
survive the expiration or termination of the Agreement.
Recipient's Business Name_______________________________________________
By______________________________________________________________________
Authorized Representative

________________________________________________________________________
Date

Representative's Typed Name_____________________________________________
and Title_______________________________________________________________

                (End of use and non-disclosure agreement)



Sec. 227.7103-8  Deferred delivery and deferred ordering of technical 
          data.

    (a) Deferred delivery. Use the clause at 252.227-7026, Deferred 
Delivery of Technical Data or Computer Software, when it is in the 
Government's interests to defer the delivery of technical data. The 
clause permits the contracting officer to require the delivery of 
technical data identified as ``deferred delivery'' data at any time 
until two years after acceptance by the Government of all items (other 
than technical data or computer software) under the contract or contract 
termination, whichever is later. The obligation of subcontractors or 
suppliers to deliver such technical data expires two years after the 
date the prime contractor accepts the last item from the subcontractor 
or supplier for use in the performance of the contract. The contract 
must specify which technical data is subject to deferred delivery. The 
contracting officer shall notify the contractor sufficiently in advance 
of the desired delivery date for such data to permit timely delivery.
    (b) Deferred ordering. Use the clause at 252.227-7027, Deferred 
Ordering of Technical Data or Computer Software, when a firm requirement 
for a particular data item(s) has not been established prior to contract 
award but there is a potential need for the data. Under this clause, the 
contracting officer may order any data that has been generated in the 
performance of the contract or any subcontract thereunder at any time 
until three years after acceptance of all items (other

[[Page 184]]

than technical data or computer software) under the contract or contract 
termination, whichever is later. The obligation of subcontractors to 
deliver such data expires three years after the date the contractor 
accepts the last item under the subcontract. When the data are ordered, 
the delivery dates shall be negotiated and the contractor compensated 
only for converting the data into the prescribed form, reproduction 
costs, and delivery costs.



Sec. 227.7103-9  Copyright.

    (a) Copyright license. (1) The clause at 252.227-7013, Rights in 
Technical Data--Noncommercial Items, requires a contractor to grant or 
obtain for the Government license rights which permit the Government to 
reproduce data, distribute copies of the data, publicly perform or 
display the data or, through the right to modify data, prepare 
derivative works. The extent to which the Government, and others acting 
on its behalf, may exercise these rights varies for each of the standard 
data rights licenses obtained under the clause. When non-standard 
license rights in technical data will be negotiated, negotiate the 
extent of the copyright license concurrent with negotiations for the 
data rights license. Do not negotiate a copyright license that provides 
less rights than the standard limited rights license in technical data.
    (2) The clause at 252.227-7013 does not permit a contractor to 
incorporate a third party's copyrighted data into a deliverable data 
item unless the contractor has obtained an appropriate license for the 
Government and, when applicable, others acting on the Government's 
behalf, or has obtained the contracting officer's written approval to do 
so. Grant approval to use third party copyrighted data in which the 
Government will not receive a copyright license only when the 
Government's requirements cannot be satisfied without the third party 
material or when the use of the third party material will result in cost 
savings to the Government which outweigh the lack of a copyright 
license.
    (b) Copyright considerations--acquisition of existing and special 
works. See 227.7105 or 227.7106 for copyright considerations when 
acquiring existing or special works.



Sec. 227.7103-10  Contractor identification and marking of technical 
          data to be furnished with restrictive markings.

    (a) Identification requirements. (1) The solicitation provision at 
252.227-7017, Identification and Assertion of Use, Release, or 
Disclosure Restrictions, requires offerors to identify to the 
contracting officer, prior to contract award, any technical data that 
the offeror asserts should be provided to the Government with 
restrictions on use, modification, reproduction, release or disclosure. 
This requirement does not apply to restrictions based solely on 
copyright. The notification and identification must be submitted as an 
attachment to the offer. If an offeror fails to submit the attachment or 
fails to complete the attachment in accordance with the requirements of 
the solicitation provision, such failure shall constitute a minor 
informality. Provide offerors an opportunity to remedy a minor 
informality in accordance with the procedures at FAR 14.405 or 15.607. 
An offeror's failure to correct the informality within the time 
prescribed by the contracting officer shall render the offer ineligible 
for award.
    (2) The procedures for correcting minor informalities shall not be 
used to obtain information regarding asserted restrictions or an 
offeror's suggested asserted rights category. Questions regarding the 
justification for an asserted restriction or asserted rights category 
must be pursued in accordance with the procedures at 227.7103-13.
    (3) The restrictions asserted by a successful offeror shall be 
attached to its contract unless, in accordance with the procedures at 
227.7103-13, the parties have agreed that an asserted restriction is not 
justified. The contract attachment shall provide the same information 
regarding identification of the technical data, the asserted rights 
category, the basis for the assertion, and the name of the person 
asserting the restrictions as required by paragraph (d) of the 
solicitation provision at 252.227-7017. Subsequent to contract award, 
the clause at 252.227-7013, Rights in Technical Data--Noncommercial

[[Page 185]]

Items, permits the contractor to make additional assertions under 
certain conditions. The additional assertions must be made in accordance 
with the procedures and in the format prescribed by that clause.
    (4) Neither the pre- or post-award assertions made by the 
contractor, nor the fact that certain assertions are identified in the 
attachment to the contract, determine the respective rights of the 
parties. As provided at 227.7103-13, the Government has the right to 
review, verify, challenge and validate restrictive markings.
    (5) Information provided by offerors in response to the solicitation 
provision may be used in the source selection process to evaluate the 
impact on evaluation factors that may be created by restrictions on the 
Government's ability to use or disclose technical data. However, 
offerors shall not be prohibited from offering products for which the 
offeror is entitled to provide the Government limited rights in the 
technical data pertaining to such products and offerors shall not be 
required, either as a condition of being responsive to a solicitation or 
as a condition for award, to sell or otherwise relinquish any greater 
rights in technical data when the offeror is entitled to provide the 
technical data with limited rights.
    (b) Contractor marking requirements. The clause at 252.227-7013, 
Rights in Technical Data--Noncommercial Items--
    (1) Requires a contractor that desires to restrict the Government's 
rights in technical data to place restrictive markings on the data, 
provides instructions for the placement of the restrictive markings, and 
authorizes the use of certain restrictive markings; and
    (2) Requires a contractor to deliver, furnish, or otherwise provide 
to the Government any technical data in which the Government has 
previously obtained rights with the Government's pre-existing rights in 
that data unless the parties have agreed otherwise or restrictions on 
the Government's rights to use, modify, reproduce, release, perform, 
display, or disclose the data have expired. When restrictions are still 
applicable, the contractor is permitted to mark the data with the 
appropriate restrictive legend for which the data qualified.
    (c) Unmarked technical data. (1) Technical data delivered or 
otherwise provided under a contract without restrictive markings shall 
be presumed to have been delivered with unlimited rights and may be 
released or disclosed without restriction. To the extent practicable, if 
a contractor has requested permission (see paragraph (c)(2) of this 
subsection) to correct an inadvertent omission of markings, do not 
release or disclose the technical data pending evaluation of the 
request.
    (2) A contractor may request permission to have appropriate legends 
placed on unmarked technical data at its expense. The request must be 
received by the contracting officer within six months following the 
furnishing or delivery of such data, or any extension of that time 
approved by the contracting officer. The person making the request must:
    (i) Identify the technical data that should have been marked;
    (ii) Demonstrate that the omission of the marking was inadvertent, 
the proposed marking is justified and conforms with the requirements for 
the marking of technical data contained in the clause at 252.227-7013; 
and
    (iii) Acknowledge, in writing, that the Government has no liability 
with respect to any disclosure, reproduction, or use of the technical 
data made prior to the addition of the marking or resulting from the 
omission of the marking.
    (3) Contracting officers should grant permission to mark only if the 
technical data were not distributed outside the Government or were 
distributed outside the Government with restrictions on further use or 
disclosure.



Sec. 227.7103-11  Contractor procedures and records.

    (a) The clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items, requires a contractor, and its subcontractors or 
suppliers that will deliver technical data with other than unlimited 
rights, to establish and follow written procedures to assure that 
restrictive markings are used only when authorized and to maintain

[[Page 186]]

records to justify the validity of asserted restrictions on delivered 
data.
    (b) The clause at 252.227-7037, Validation of Restrictive Markings 
on Technical Data requires contractors and their subcontractors at any 
tier to maintain records sufficient to justify the validity of 
restrictive markings on technical data delivered or to be delivered 
under a Government contract.



Sec. 227.7103-12  Government right to establish conformity of markings.

    (a) Nonconforming markings. (1) Authorized markings are identified 
in the clause at 252.227-7013, Rights in Technical Data--Noncommercial 
Items. All other markings are nonconforming markings. An authorized 
marking that is not in the form, or differs in substance, from the 
marking requirements in the clause at 252.227-7013 is also a 
nonconforming marking.
    (2) The correction of nonconforming markings on technical data is 
not subject to 252.227-7037, Validation of Restrictive Markings on 
Technical Data. To the extent practicable, the contracting officer 
should return technical data bearing nonconforming markings to the 
person who has placed the nonconforming markings on such data to provide 
that person an opportunity to correct or strike the nonconforming 
marking at that person's expense. If that person fails to correct the 
nonconformity and return the corrected data within 60 days following the 
person's receipt of the data, the contracting officer may correct or 
strike the nonconformity at that person's expense. When it is 
impracticable to return technical data for correction, contracting 
officers may unilaterally correct any nonconforming markings at 
Government expense. Prior to correction, the data may be used in 
accordance with the proper restrictive marking.
    (b) Unjustified markings. (1) An unjustified marking is an 
authorized marking that does not depict accurately restrictions 
applicable to the Government's use, modification, reproduction, release, 
performance, display, or disclosure of the marked technical data. For 
example, a limited rights legend placed on technical data pertaining to 
items, components, or processes that were developed under a Government 
contract either exclusively at Government expense or with mixed funding 
(situations under which the Government obtains unlimited or government 
purpose rights) is an unjustified marking.
    (2) Contracting officers have the right to review and challenge the 
validity of unjustified markings. However, at any time during 
performance of a contract and notwithstanding existence of a challenge, 
the contracting officer and the person who has asserted a restrictive 
marking may agree that the restrictive marking is not justified. Upon 
such agreement, the contracting officer may, at his or her election, 
either--
    (i) Strike or correct the unjustified marking at that person's 
expense; or
    (ii) Return the technical data to the person asserting the 
restriction for correction at that person's expense. If the data are 
returned and that person fails to correct or strike the unjustified 
restriction and return the corrected data to the contracting officer 
within 60 days following receipt of the data, the unjustified marking 
shall be corrected or stricken at that person's expense.



Sec. 227.7103-13  Government right to review, verify, challenge and 
          validate asserted restrictions.

    (a) General. An offeror's assertion(s) of restrictions on the 
Government's rights to use, modify, reproduce, release, or disclose 
technical data do not, by themselves, determine the extent of the 
Government's rights in the technical data. Under 10 U.S.C. 2321, the 
Government has the right to challenge asserted restrictions when there 
are reasonable grounds to question the validity of the assertion and 
continued adherence to the assertion would make it impractical to later 
procure competitively the item to which the data pertain.
    (b) Pre-award considerations. The challenge procedures required by 
10 U.S.C. 2321 could significantly delay awards under competitive 
procurements. Therefore, avoid challenging asserted restrictions prior 
to a competitive contract award unless resolution of the assertion is 
essential for successful completion of the procurement.

[[Page 187]]

    (c) Challenge and validation. Contracting officers must have 
reasonable grounds to challenge the current validity of an asserted 
restriction. Before issuing a challenge to an asserted restriction, 
carefully consider all available information pertaining to the 
assertion. All challenges must be made in accordance with the provisions 
of the clause at 252.227-7037, Validation of Restrictive Markings on 
Technical Data.
    (1) Challenge period. Asserted restrictions should be reviewed 
before acceptance of technical data deliverable under the contract. 
Assertions must be challenged within three years after final payment 
under the contract or three years after delivery of the data, whichever 
is later. However, restrictive markings may be challenged at any time if 
the technical data--
    (i) Are publicly available without restrictions;
    (ii) Have been provided to the United States without restriction; or
    (iii) Have been otherwise made available without restriction other 
than a release or disclosure resulting from the sale, transfer, or other 
assignment of interest in the technical data to another party or the 
sale or transfer of some or all of a business entity or its assets to 
another party.
    (2) Pre-challenge requests for information. (i) After consideration 
of the situation described in paragraph (c)(3) of this subsection, 
contracting officers may request the person asserting a restriction to 
furnish a written explanation of the facts and supporting documentation 
for the assertion in sufficient detail to enable the contracting officer 
to ascertain the basis of the restrictive markings. Additional 
supporting documentation may be requested when the explanation provided 
by the person making the assertion does not, in the contracting 
officer's opinion, establish the validity of the assertion.
    (ii) If the person asserting the restriction fails to respond to the 
contracting officer's request for information or additional supporting 
documentation, or if the information submitted or any other available 
information pertaining to the validity of a restrictive marking does not 
justify the asserted restriction, a challenge should be considered.
    (3)Transacting matters directly with subcontracts. The clause at 
252.227-7037 obtains the contractor's agreement that the Government may 
transact matters under the clause directly with a subcontractor, at any 
tier, without creating or implying privity of contract. Contracting 
officers should permit a subcontractor or supplier to transact challenge 
and validation matters directly with the Government when--
    (i) A subcontractor's or supplier's business interests in its 
technical data would be compromised if the data were disclosed to a 
higher tier contractor;
    (ii) There is reason to believe that the contractor will not respond 
in a timely manner to a challenge and an untimely response would 
jeopardize a subcontractor's or suppliers right to assert restrictions; 
or
    (iii) Requested to do so by a subcontractor or supplier.
    (4) Challenge notice. Do not issue a challenge notice unless there 
are reasonable grounds to question the validity of an assertion. 
Assertions may be challenged whether or not supporting documentation was 
requested from the person asserting the restriction. Challenge notices 
must be in writing and issued to the contractor or, after consideration 
of the situations described in paragraph (c)(3) of this subsection, the 
person asserting the restriction. The challenge notice must include the 
information in paragraph (e) of the clause at 252.227-7037.
    (5) Extension of response time. The contracting officer, at his or 
her discretion, may extend the time for response contained in a 
challenge notice, as appropriate, if the contractor submits a timely 
written request showing the need for additional time to prepare a 
response.
    (6) Contracting officer's final decision. Contracting officers must 
issue a final decision for each challenged assertion, whether or not the 
assertion has been justified.
    (i) A contracting officer's final decision that an assertion is not 
justified must be issued a soon as practicable following the failure of 
the person asserting the restriction to respond to

[[Page 188]]

the contracting officer's challenge within 60 days, or any extension to 
that time granted by the contracting officer.
    (ii) A contracting officer who, following a challenge and response 
by the person asserting the restriction, determines that an asserted 
restriction is justified, shall issue a final decision sustaining the 
validity of the asserted restriction. If the asserted restriction was 
made subsequent to submission of the contractor's offer, add the 
asserted restriction to the contract attachment.
    (iii) A contracting officer who determine that the validity of an 
asserted restriction has not been justified shall issue a contracting 
officer's final decision within the time frames prescribed in 252.227-
7037. As provided in paragraph (g) of that clause, the Government is 
obligated to continue to respect the asserted restrictions through final 
disposition of any appeal unless the agency head notifies the person 
asserting the restriction that urgent or compelling circumstances do not 
permit the Government to continue to respect the asserted restriction.
    (7) Multiple challenges to an asserted restriction. When more than 
one contracting officer challenges an asserted restriction, the 
contracting officer who made the earliest challenge is responsible for 
coordinating the Government challenges. That contracting officer shall 
consult with all other contracting officers making challenges, verify 
that all challenges apply to the same asserted restriction and, after 
consulting with the contractor, subcontractor, or supplier asserting the 
restriction, issue a schedule that provides that person a reasonable 
opportunity to respond to each challenge.
    (8) Validation. Only a contracting officer's final decision, or 
actions of an agency board of contract appeals or a court of competent 
jurisdiction, that sustain the validity of an asserted restriction 
constitute validation of the asserted restriction.



Sec. 227.7103-14  Conformity, acceptance, and warranty of technical 
          data.

    (a) Statutory requirements. 10 U.S.C. 2320--
    (1) Provides for the establishment of remedies applicable to 
technical data found to be incomplete, inadequate, or not to satisfy the 
requirements of the contract concerning such data; and
    (2) Authorizes agency heads to withhold payments (or exercise such 
other remedies an agency head considers appropriate) during any period 
if the contractor does not meet the requirements of the contract 
pertaining to the delivery of technical data.
    (b) Conformity and acceptance. (1) Solicitations and contracts 
requiring the delivery of technical data shall specify the requirements 
the data must satisfy to be acceptable. Contracting officers, or their 
authorized representatives, are responsible for determining whether 
technical data tendered for acceptance conform to the contractual 
requirements.
    (2) The clause at 252.227-7030, Technical Data--Withholding of 
Payment, provides for withholding up to 10 percent of the contract price 
pending correction or replacement of the nonconforming technical data or 
negotiation of an equitable reduction in contract price. The amount 
subject to withholding may be expressed as a fixed dollar amount or as a 
percentage of the contract price. In either case, the amount shall be 
determined giving consideration to the relative value and importance of 
the data. For example--
    (i) When the sole purpose of a contract is to produce the data, the 
relative value of that data may be considerably higher than the value of 
data produced under a contract where the production of the data is a 
secondary objective; or
    (ii) When the Government will maintain or repair items, repair and 
maintenance data may have a considerably higher relative value than data 
that merely describe the item or provide performance characteristics.
    (3) Do not accept technical data that do not conform to the 
contractual requirements in all respects. Except for nonconforming 
restrictive markings (see paragraph (b)(4) of this subsection), 
correction or replacement of nonconforming data or an equitable 
reduction in contract price when correction or replacement of the 
nonconforming data is not practicable or is not in the Government's 
interests,

[[Page 189]]

shall be accomplished in accordance with--
    (i) The provisions of a contract clause providing for inspection and 
acceptance of deliverables and remedies for nonconforming deliverables; 
or
    (ii) The procedures at FAR 46.407(c) through (g), if the contract 
does not contain an inspection clause providing remedies for 
nonconforming deliverables.
    (4) Follow the procedures at 227.7103-12(a)(2) if nonconforming 
markings are the sole reason technical data fail to conform to 
contractual requirements. The clause at 252.227-7030 may be used to 
withhold an amount for payment, consistent with the terms of the clause, 
pending correction of the nonconforming markings.
    (c) Warranty. (1) The intended use of the technical data and the 
cost, if any, to obtain the warranty should be considered before 
deciding to obtain a data warranty (see FAR 46.703). The fact that a 
particular item, component, or process is or is not warranted is not a 
consideration in determining whether or not to obtain a warranty for the 
technical data that pertain to the item, component, or process. For 
example, a data warranty should be considered if the Government intends 
to repair or maintain an item and defective repair or maintenance data 
would impair the Government's effective use of the item or result in 
increased costs to the Government.
    (2) As prescribed in 246.710, use the clause at 252.246-7001, 
Warranty of Data, and its alternates, or a substantially similar clause 
when the Government needs a specific warranty of technical data.

[60 FR 33471, June 28, 1995, as amended at 69 FR 31912, June 8, 2004]



Sec. 227.7103-15  Subcontractor rights in technical data.

    (a) 10 U.S.C. 2320 provides subcontractors at all tiers the same 
protection for their rights in data as is provided to prime contractors. 
The clauses at 252.227-7013, Rights in Technical Data--Noncommercial 
Items, and 252.227-7037, Validation of Restrictive Markings on Technical 
Data, implement the statutory requirements.
    (b) 10 U.S.C. 2321 permits a subcontractor to transact directly with 
the Government matters relating to the validation of its asserted 
restrictions on the Government's rights to use or disclose technical 
data. The clause at 252.227-7037 obtains a contractor's agreement that 
the direct transaction of validation or challenge matters with 
subcontractors at any tier does not establish or imply privity of 
contract. When a subcontractor or supplier exercise its right to 
transact validation matters directly with the Government, contracting 
officers shall deal directly with such persons, as provided at 227.7103-
13(c)(3).
    (c) Require prime contractors whose contracts include the following 
clauses to include those clauses, without modification except for 
appropriate identification of the parties, in contracts with 
subcontractors or suppliers, at all tiers, who will be furnishing 
technical data for non-commercial items in response to a Government 
requirement:
    (1) 252.227-7013, Rights in Technical Data--Noncommercial Items;
    (2) 252.227-7025, Limitations on the Use or Disclosure of 
Government-Furnished Information Marked with Restrictive Legends;
    (3) 252.227-7028, Technical Data or Computer Software Previously 
Delivered to the Government; and
    (4) 252.227-7037, Validation of Restrictive Markings on Technical 
Data.
    (d) Do not require contractors to have their subcontractors or 
suppliers at any tier relinquish rights in technical data to the 
contractor, a higher tier subcontractor, or to the Government, as a 
condition for award of any contract, subcontract, purchase order, or 
similar instrument except for the rights obtained by the Government 
under the Rights in Technical Data--Noncommercial Items clause contained 
in the contractor's contract with the Government.

[56 FR 36389, July 31, 1991, as amended at 60 FR 61598, Nov. 30, 1995]

[[Page 190]]



Sec. 227.7103-16  Providing technical data to foreign governments, 
          foreign contractors, or international organizations.

    Technical data may be released or disclosed to foreign governments, 
foreign contractors, or international organizations only if release or 
disclosure is otherwise permitted both by Federal export controls and 
other national security laws or regulations. Subject to such laws and 
regulations, the Department of Defense--
    (a) May release or disclose technical data in which it has obtained 
unlimited rights to such foreign entities or authorize the use of such 
data by those entities; and
    (b) Shall not release or disclose technical data for which 
restrictions on use, release, or disclosure have been asserted to 
foreign entities, or authorize the use of technical data by those 
entities, unless the intended recipient is subject to the same 
provisions as included in the use and non-disclosure agreement at 
227.7103-7 and the requirements of the clause at 252.227-7103, Rights in 
Technical Data--Noncommercial Items, governing use, modification, 
reproduction, release, performance, display, or disclosure of such data 
have been satisfied.



Sec. 227.7103-17  Overseas contracts with foreign sources.

    (a) The clause at 252.227-7032, Rights in Technical Data and 
Computer Software (Foreign), may be used in contracts with foreign 
contractors to be performed overseas, except Canadian purchases (see 
paragraph (c) of this subsection), in lieu of the clause at 252.227-
7013, Rights in Technical Data--Noncommercial Items, when the Government 
requires the unrestricted right to use, modify, reproduce, perform, 
display, release or disclose all technical data to be delivered under 
the contract. Do not use the clause in contracts for existing or special 
works.
    (b) When the Government does not require unlimited rights, the 
clause at 252.227-7032 may be modified to accommodate the needs of a 
specific overseas procurement situation. The Government should obtain 
rights in the technical data that are not less than the rights the 
Government would have obtained under the data rights clause(s) 
prescribed in this part for a comparable procurement performed within 
the United States or its outlying areas.
    (c) Contracts for Canadian purchases shall include the appropriate 
data rights clause prescribed in this part for a comparable procurement 
performed within the United States or its outlying areas.

[56 FR 36389, July 31, 1991, as amended at 70 FR 35545, June 21, 2005]



Sec. 227.7104  Contracts under the Small Business Innovation Research 
          (SBIR) Program.

    (a) Use the clause at 252.227-7018, Rights in Noncommercial 
Technical Data and Computer Software--Small Business Innovation Research 
(SBIR) Program, when technical data or computer software will be 
generated during performance of contracts under the SBIR program.
    (b) Under the clause at 252.227-7018, the Government obtains a 
royalty-free license to use technical data marked with an SBIR data 
rights legend only for government purposes during the period commencing 
with contract award and ending five years after completion of the 
project under which the data were generated. Upon expiration of the 
five-year restrictive license, the Government has unlimited rights in 
the SBIR data. During the license period, the Government may not release 
or disclose SBIR data to any person other than its support services 
contractors except--
    (1) For evaluational purposes;
    (2) As expressly permitted by the contractor; or
    (3) A use, release, or disclosure that is necessary for emergency 
repair or overhaul of items operated by the Government.
    (c) Do not make any release or disclosure permitted by paragraph (b) 
of this section unless, prior to release or disclosure, the intended 
recipient is subject to the use and nondisclosure agreement at 227.7103-
7.
    (d) Use the clause at 252.227-7018 with its Alternate I in research 
contracts when the contracting officer determines, in consultation with 
counsel, that public dissemination by the contractor would be--

[[Page 191]]

    (1) In the interest of the Government; and
    (2) Facilitated by the Government relinquishing its right to publish 
the work for sale, or to have others publish the work for sale on behalf 
of the Government.
    (e) Use the following provision and clauses in SBIR solicitations 
and contracts that include the clause at 252.227-7018:
    (1) 252.227-7016, Rights in Bid or Proposal Information;
    (2) 252.227-7017, Identification and Assertion of Use, Release, or 
Disclosure Restrictions;
    (3) 252.227-7019, Validation of Asserted Restrictions--Computer 
Software;
    (4) 252.227-7030, Technical Data--Withholding of Payment; and
    (5) 252.227-7037, Validation of Restrictive Markings on Technical 
Data (paragraph (e) of the clause contains information that must be 
included in a challenge).
    (f) Use the following clauses and provision in SBIR solicitations 
and contracts in accordance with the guidance at 227.7103-6 (c) and (d):
    (1) 252.227-7025, Limitations on the Use or Disclosure of 
Government-Furnished Information Marked with Restrictive Legends; and
    (2) 252.227-7028, Technical Data or Computer Software Previously 
Delivered to the Government.

[56 FR 36389, July 31, 1991, as amended at 60 FR 61598, Nov. 30, 1995; 
62 FR 2614, Jan. 17, 1997; 69 FR 31912, June 8, 2004]



Sec. 227.7105  Contracts for the acquisition of existing works.



Sec. 227.7105-1  General.

    (a) Existing works include motion pictures, television recordings, 
video recordings, and other audiovisual works in any medium; sound 
recordings in any medium; musical, dramatic, and literary works; 
pantomimes and choreographic works; pictorial, graphic, and sculptural 
works; and works of a similar nature. Usually, these or similar works 
were not first created, developed, generated, originated, prepared, or 
produced under a Government contract. Therefore, the Government must 
obtain a license in the work if it intends to reproduce the work, 
distribute copies of the work, prepare derivative works, or perform or 
display the work publicly. When the Government is not responsible for 
the content of an existing work, it should require the copyright owner 
to indemnify the Government for liabilities that may arise out of the 
content, performance, use, or disclosure of such data.
    (b) Follow the procedures at 227.7106 for works which will be first 
created, developed, generated, originated, prepared, or produced under a 
Government contract and the Government needs to control distribution of 
the work or has a specific need to obtain indemnity for liabilities that 
may arise out of the creation, content, performance, use, or disclosure 
of the work or from libelous or other unlawful material contained in the 
work. Follow the procedures at 227.7103 when the Government does not 
need to control distribution of such works or obtain such indemnities.



Sec. 227.7105-2  Acquisition of existing works without modification.

    (a) Use the clause at 252.227-7021, Rights in Data--Existing Works, 
in lieu of the clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items, in solicitations and contracts exclusively for 
existing works when--
    (1) The existing works will be acquired without modification; and
    (2) The Government requires the right to reproduce, prepare 
derivative works, or publicly perform or display the existing works; or
    (3) The Government has a specific need to obtain indemnity for 
liabilities that may arise out of the content, performance, use, or 
disclosure of such data.
    (b) The clause at 252.227-7021 provides the Government, and others 
acting on its behalf, a paid-up, non-exclusive, irrevocable, world-wide 
license to reproduce, prepare derivative works and publicly perform or 
display the works called for by a contract and to authorize others to do 
so for government purposes.
    (c) A contract clause is not required to acquire existing works such 
as books, magazines and periodicals, in any storage or retrieval medium, 
when the Government will not reproduce the

[[Page 192]]

books, magazines or periodicals, or prepare derivative works.



Sec. 227.7105-3  Acquisition of modified existing works.

    Use the clause at 252.227-7020, Rights in Special Works, in 
solicitations and contracts for modified existing works in lieu of the 
clause at 252.227-7021, Rights in Data--Existing Works.



Sec. 227.7106  Contracts for special works.

    (a) Use the clause at 252.227-7020, Rights in Special Works, in 
solicitations and contracts where the Government has a specific need to 
control the distribution of works first produced, created, or generated 
in the performance of a contract and required to be delivered under that 
contract, including controlling distribution by obtaining an assignment 
of copyright, or a specific need to obtain indemnity for liabilities 
that may arise out of the creation, delivery, use, modification, 
reproduction, release, performance, display, or disclosure of such 
works. Use the clause--
    (1) In lieu of the clause at 252.227-7013, Rights in Technical 
Data--Noncommercial Items, when the Government must own or control 
copyright in all works first produced, created, or generated and 
required to be delivered under a contract; or
    (2) In addition to the clause at 252.227-7013 when the Government 
must own or control copyright in a portion of a work first produced, 
created, or generated and required to be delivered under a contract. The 
specific portion in which the Government must own or control copyright 
must be identified in a special contract requirement.
    (b) Although the Government obtains an assignment of copyright and 
unlimited rights in a special work under the clause at 252.227-7020, the 
contractor retains use and disclosure rights in that work. If the 
Government needs to restrict a contractor's rights to use or disclose a 
special work, it must also negotiate a special license which 
specifically restricts the contractor's use or disclosure rights.
    (c) The clause at 252.227-7020 does not permit a contractor to 
incorporate into a special work any works copyrighted by others unless 
the contractor obtains the contracting officer's permission to do so and 
obtains for the Government a non-exclusive, paid up, world-wide license 
to make and distribute copies of that work, to prepare derivative works, 
to perform or display publicly any portion of the work, and to permit 
others to do so for government purposes. Grant permission only when the 
Government's requirements cannot be satisfied unless the third party 
work is included in the deliverable work.
    (d) Examples of works which may be procured under the Rights in 
Special Works clause include, but are not limited, to audiovisual works, 
computer data bases, computer software documentation, scripts, 
soundtracks, musical compositions, and adaptations; histories of 
departments, agencies, services or units thereof; surveys of Government 
establishments; instructional works or guidance to Government officers 
and employees on the discharge of their official duties; reports, books, 
studies, surveys or similar documents; collections of data containing 
information pertaining to individuals that, if disclosed, would violate 
the right of privacy or publicity of the individuals to whom the 
information relates; or investigative reports.



Sec. 227.7107  Contracts for architect-engineer services.

    This section sets forth policies and procedures, pertaining to data, 
copyrights, and restricted designs unique to the acquisition of 
construction and architect-engineer services.



Sec. 227.7107-1  Architectural designs and data clauses for architect-
          engineer or construction contracts.

    (a) Except as provided in paragraph (b) of this subsection and in 
227.7107-2, use the clause at 252.227-7022, Government Rights 
(Unlimited), in solicitations and contracts for architect-engineer 
services and for construction involving architect-engineer services.
    (b) When the purpose of a contract for architect-engineer services, 
or for construction involving architect-engineer services, is to obtain 
a unique architectural design of a building, a monument, or construction 
of similar nature, which for artistic, aesthetic or other special 
reasons the Government

[[Page 193]]

does not want duplicated, the Government may acquire exclusive control 
of the data pertaining to the design by including the clause at 252.227-
7023, Drawings and Other Data to Become Property of Government, in 
solicitations and contracts.
    (c) The Government shall obtain unlimited rights in shop drawings 
for construction. In solicitations and contracts calling for delivery of 
shop drawings, include the clause at 252.227-7033, Rights in Shop 
Drawings.



Sec. 227.7107-2  Contracts for construction supplies and research and 
          development work.

    Use the provisions and clauses required by 227-7103-6 and 227.7203-6 
when the acquisition is limited to--
    (a) Construction supplies or materials;
    (b) Experimental, developmental, or research work, or test and 
evaluation studies of structures, equipment, processes, or materials for 
use in construction; or
    (c) Both.



Sec. 227.7107-3  Approval of restricted designs.

    The clause at 252.227-7024, Notice and Approval of Restricted 
Designs, may be included in architect-engineer contracts to permit the 
Government to make informed decisions concerning noncompetitive aspects 
of the design.



Sec. 227.7108  Contractor data repositories.

    (a) Contractor data repositories may be established when permitted 
by agency procedures. The contractual instrument establishing the data 
repository must require, as a minimum, the data repository management 
contractor to--
    (1) Establish and maintain adequate procedures for protecting 
technical data delivered to or stored at the repository from 
unauthorized release or disclosure;
    (2) Establish and maintain adequate procedures for controlling the 
release or disclosure of technical data from the repository to third 
parties consistent with the Government's rights in such data;
    (3) When required by the contracting officer, deliver data to the 
Government on paper or in other specified media;
    (4) Be responsible for maintaining the currency of data delivered 
directly by Government contractors or subcontractors to the repository;
    (5) Obtain use and non-disclosure agreements (see 227.7103-7) from 
all persons to whom government purpose rights data is released or 
disclosed; and
    (6) Indemnify the Government from any liability to data owners or 
licensors resulting from, or as a consequence of, a release or 
disclosure of technical data made by the data repository contractor or 
its officers, employees, agents, or representatives.
    (b) If the contractor is or will be the data repository manager, the 
contractor's data management and distribution responsibilities must be 
identified in the contract or the contract must reference the agreement 
between the Government and the contractor that establishes those 
responsibilities.
    (c) If the contractor is not and will not be the data repository 
manager, do not require a contractor or subcontractor to deliver 
technical data marked with limited rights legends to a data repository 
managed by another contractor unless the contractor or subcontractor who 
has asserted limited rights agrees to release the data to the repository 
or has authorized, in writing, the Government to do so.
    (d) Repository procedures may provide for the acceptance, delivery, 
and subsequent distribution of technical data in storage media other 
than paper, including direct electronic exchange of data between two 
computers. The procedures must provide for the identification of any 
portions of the data provided with restrictive legends, when 
appropriate. The acceptance criteria must be consistent with the 
authorized delivery format.

    Subpart 227.72_Rights in Computer Software and Computer Software 
                              Documentation

    Source: 60 FR 33482, June 28, 1995, unless otherwise noted.



Sec. 227.7200  Scope of subpart.

    This subpart--

[[Page 194]]

    (a) Prescribes policies and procedures for the acquisition of 
computer software and computer software documentation, and the rights to 
use, modify, reproduce, release, perform, display, or disclose such 
software or documentation. It implements requirements in the following 
laws and Executive Order:
    (1) 10 U.S.C. 2302(4).
    (2) 10 U.S.C. 2305 (subsection (d)(4)).
    (3) 10 U.S.C. 2320.
    (4) 10 U.S.C. 2321.
    (5) 10 U.S.C. 2325.
    (6) Executive Order 12591 (subsection 1(b)(6)).
    (b) Does not apply to computer software or computer software 
documentation acquired under GSA schedule contracts.



Sec. 227.7201  Definitions.

    (a) As used in this subpart, unless otherwise specifically 
indicated, the terms ``offeror'' and ``contractor'' include an offeror's 
or contractor's subcontractors, suppliers, or potential subcontractors 
or suppliers at any tier.
    (b) Other terms used in this subpart are defined in the clause at 
252.227-7014, Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation.



Sec. 227.7202  Commercial computer software and commercial computer 
          software documentation.



Sec. 227.7202-1  Policy.

    (a) Commercial computer software or commercial computer software 
documentation shall be acquired under the licenses customarily provided 
to the public unless such licenses are inconsistent with Federal 
procurement law or do not otherwise satisfy user needs.
    (b) Commercial computer software and commercial computer software 
documentation shall be obtained competitively, to the maximum extent 
practicable, using firm-fixed-price contracts or firm-fixed-priced 
orders under available pricing schedules.
    (c) Offerors and contractors shall not be required to--
    (1) Furnish technical information related to commercial computer 
software or commercial computer software documentation that is not 
customarily provided to the public except for information documenting 
the specific modifications made at Government expense to such software 
or documentation to meet the requirements of a Government solicitation; 
or
    (2) Relinquish to, or otherwise provide, the Government rights to 
use, modify, reproduce, release, perform, display, or disclose 
commercial computer software or commercial computer software 
documentation except for a transfer of rights mutually agreed upon.



Sec. 227.7202-2  [Reserved]



Sec. 227.7202-3  Rights in commercial computer software or commercial 
          computer software documentation.

    (a) The Government shall have only the rights specified in the 
license under which the commercial computer software or commercial 
computer software documentation was obtained.
    (b) If the Government has a need for rights not conveyed under the 
license customarily provided to the public, the Government must 
negotiate with the contractor to determine if there are acceptable terms 
for transferring such rights. The specific rights granted to the 
Government shall be enumerated in the contract license agreement or an 
addendum thereto.



Sec. 227.7202-4  Contract clause.

    A specific contract clause governing the Government's rights in 
commercial computer software or commercial computer software 
documentation is not prescribed. As required by 227.7202-3, the 
Government's rights to use, modify, reproduce, release, perform, 
display, or disclose computer software or computer software 
documentation shall be identified in a license agreement.



Sec. 227.7203  Noncommercial computer software and noncommercial 
          computer software documentation.



Sec. 227.7203-1  Policy.

    (a) DoD policy is to acquire only the computer software and computer 
software documentation, and the rights in such software or 
documentation, necessary to satisfy agency needs.
    (b) Solicitations and contracts shall--

[[Page 195]]

    (1) Specify the computer software or computer software documentation 
to be delivered under a contract and the delivery schedules for the 
software or documentation;
    (2) Establish or reference procedures for determining the 
acceptability of computer software or computer software documentation;
    (3) Establish separate contract line items, to the extent 
practicable, for the computer software or computer software 
documentation to be delivered under a contract and require offerors and 
contractors to price separately each deliverable data item; and
    (4) Require offerors to identify, to the extent practicable, 
computer software or computer software documentation to be furnished 
with restrictions on the Government's rights and require contractors to 
identify computer software or computer software documentation to be 
delivered with such restrictions prior to delivery.
    (c) Offerors shall not be required, either as a condition of being 
responsive to a solicitation or as a condition for award, to sell or 
otherwise relinquish to the Government any rights in computer software 
developed exclusively at private expense except for the software 
identified at 227.7203-5(a) (3) through (6).
    (d) Offerors and contractors shall not be prohibited or discouraged 
from furnishing or offering to furnish computer software developed 
exclusively at private expense solely because the Government's rights to 
use, modify, release, reproduce, perform, display, or disclose the 
software may be restricted.



Sec. 227.7203-2  Acquisition of noncommercial computer software and 
          computer software documentation.

    (a) Contracting officers shall work closely with data managers and 
requirements personnel to assure that computer software and computer 
software documentation requirements included in solicitations are 
consistent with the policy expressed in 227.7203-1.
    (b)(1) Data managers or other requirements personnel are responsible 
for identifying the Government's minimum needs. In addition to desired 
software performance, compatibility, or other technical considerations, 
needs determinations should consider such factors as multiple site or 
shared use requirements, whether the Government's software maintenance 
philosophy will require the right to modify or have third parties modify 
the software, and any special computer software documentation 
requirements.
    (2) When reviewing offers received in response to a solicitation or 
other request for computer software or computer software documentation, 
data managers must balance the original assessment of the Government's 
needs with prices offered.
    (c) Contracting officers are responsible for ensuring that, wherever 
practicable, solicitations and contracts--
    (1) Identify the types of computer software and the quantity of 
computer programs and computer software documentation to be delivered, 
any requirements for multiple users at one site or multiple site 
licenses, and the format and media in which the software or 
documentation will be delivered;
    (2) Establish each type of computer software or computer software 
documentation to be delivered as a separate contract line item (this 
requirement may be satisfied by an exhibit to the contract);
    (3) Identify the prices established for each separately priced 
deliverable item of computer software or computer software documentation 
under a fixed-price type contract;
    (4) Include delivery schedules and acceptance criteria for each 
deliverable item; and
    (5) Specifically identify the place of delivery for each deliverable 
item.



Sec. 227.7203-3  Early identification of computer software or computer 
          software documentation to be furnished to the Government with 
          restrictions on use, reproduction or disclosure.

    (a) Use the provision at 252.227-7017, Identification and Assertion 
of Use, Release, or Disclosure Restrictions, in all solicitation that 
include the clause at 252.227-7014, Rights in Noncommercial Computer 
Software and Noncommercial Computer Software Documentation. The 
provision requires offerors to identify any computer software or 
computer software documentation for

[[Page 196]]

which restrictions, other than copyright, on use, modification, 
reproduction, release, performance, display, or disclosure are asserted 
and to attach the identification and assertion to the offer.
    (b) Subsequent to contract award, the clause at 252.227-7014 permits 
a contractor, under certain conditions, to make additional assertions of 
restrictions. The prescriptions for the use of that clause and its 
alternates are at 227.7203-6(a).



Sec. 227.7203-4  License rights.

    (a) Grant of license. The Government obtains rights in computer 
software or computer software documentation, including a copyright 
license, under an irrevocable license granted or obtained by the 
contractor which developed the software or documentation or the licensor 
of the software or documentation if the development contractor is not 
the licensor. The contractor or licensor retains all rights in the 
software or documentation not granted to the Government. The scope of a 
computer software license is generally determined by the source of funds 
used to develop the software. Contractors or licensors may, with some 
exceptions, restrict the Government's rights to use, modify, reproduce, 
release, perform, display, or disclose computer software developed 
exclusively or partially at private expense (see 227.7203-5 (b) and 
(c)). They may not, without the Government's agreement (see 227.7203-
5(d)), restrict the Government's rights in computer software developed 
exclusively with Government funds or in computer software documentation 
required to be delivered under a contract.
    (b) Source of funds determination. The determination of the source 
of funds used to develop computer software should be made at the lowest 
practicable segregable portion of the software or documentation (e.g., a 
software sub-routine that performs a specific function). Contractors may 
assert restricted rights in a segregable portion of computer software 
which otherwise qualifies for restricted rights under the clause at 
252.227-7014, Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation.



Sec. 227.7203-5  Government rights.

    The standard license rights in computer software that a licensor 
grants to the Government are unlimited rights, government purpose 
rights, or restricted rights. The standard license in computer software 
documentation conveys unlimited rights. Those rights are defined in the 
clause at 252.227-7014, Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation. In unusual situations, 
the standard rights may not satisfy the Government's needs or the 
Government may be willing to accept lesser rights in return for other 
consideration. In those cases, a special license may be negotiated. 
However, the licensor is not obligated to provide the Government greater 
rights and the contracting officer is not required to accept lesser 
rights than the rights provided in the standard grant of license. The 
situations under which a particular grant of license applies are 
enumerated in paragraphs (a) through (d) of this subsection.
    (a) Unlimited rights. The Government obtains an unlimited rights 
license in--
    (1) Computer software developed exclusively with Government funds;
    (2) Computer software documentation required to be delivered under a 
Government contract;
    (3) Corrections or changes to computer software or computer software 
documentation furnished to the contractor by the Government;
    (4) Computer software or computer software documentation that is 
otherwise publicly available or has been released or disclosed by the 
contractor or subcontractor without restrictions on further use, release 
or disclosure other than a release or disclosure resulting from the 
sale, transfer, or other assignment of interest in the software to 
another party or the sale or transfer of some or all of a business 
entity or it assets to another party;
    (5) Computer software or computer software documentation obtained 
with unlimited rights under another Government contract or as a result 
of negotiations; or
    (6) Computer software or computer software documentation furnished 
to

[[Page 197]]

the Government, under a Government contract or subcontract with--
    (i) Restricted rights in computer software, limited rights in 
technical data, or government purpose license rights and the restrictive 
conditions have expired; or
    (ii) Government purpose rights and the contractor's exclusive right 
to use such software or documentation for commercial purposes has 
expired.
    (b) Government purpose rights. (1) Except as provided in paragraph 
(a) of this subsection, the Government obtains government purpose rights 
in computer software developed with mixed funding.
    (2) The period during which government purpose rights are effective 
is negotiable. The clause at 252.227-7014 provides a nominal five-year 
period. Either party may request a different period. Changes to the 
government purpose rights period may be made at any time prior to 
delivery of the software without consideration from either party. Longer 
periods should be negotiated when a five-year period does not provide 
sufficient time to commercialize the software or, for software developed 
by subcontractors, when necessary to recognize the subcontractors' 
interests in the software.
    (3) The government purpose rights period commences upon execution of 
the contract, subcontract, letter contract (or similar contractual 
instrument), contract modification, or option exercise that required 
development of the computer software. Upon expiration of the government 
purpose rights period, the Government has unlimited rights in the 
software including the right to authorize others to use data for 
commercial purposes.
    (4) During the government purpose rights period, the Government may 
not use, or authorize other persons to use, computer software marked 
with government purpose rights legends for commercial purposes. The 
Government shall not release or disclose, or authorize others to release 
or disclose, computer software in which it has government purpose rights 
to any person unless--
    (i) Prior to release or disclosure, the intended recipient is 
subject to the use and non-disclosure agreement at 227.7103-7; or
    (ii) The intended recipient is a Government contractor receiving 
access to the software for performance of a Government contract that 
contains the clause at 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends.
    (5) When computer software marked with government purpose rights 
legends will be released or disclosed to a Government contractor 
performing a contract that does not include the clause at 252.227-7025, 
the contract may be modified, prior to release or disclosure, to include 
such clause in lieu of requiring the contractor to complete a use and 
non-disclosure agreement.
    (6) Contracting activities shall establish procedures to assure that 
computer software or computer software documentation marked with 
government purpose rights legends are released or disclosed, including a 
release or disclosure through a Government solicitation, only to persons 
subject to the use and non-disclosure restrictions. Public announcements 
in the Commerce Business Daily or other publications must provide notice 
of the use and non-disclosure requirements. Class use and non-disclosure 
agreements (e.g., agreements covering all solicitations received by the 
XYZ company within a reasonable period) are authorized and may be 
obtained at any time prior to release or disclosure of the government 
purpose rights software or documentation. Documents transmitting 
government purpose rights software or documentation to persons under 
class agreements shall identify the specific software or documentation 
subject to government purpose rights and the class agreement under which 
such software or documentation are provided.
    (c) Restricted rights. (1) The Government obtains restricted rights 
in noncommercial computer software required to be delivered or otherwise 
provided to the Government under a contract that were developed 
exclusively at private expense.
    (2) Contractors are not required to provide the Government 
additional rights in computer software delivered

[[Page 198]]

or otherwise provided to the Government with restricted rights. When the 
Government has a need for additional rights, the Government must 
negotiate with the contractor to determine if there are acceptable terms 
for transferring such rights. List or describe all software in which the 
contractor has granted the Government additional rights in a license 
agreement made part of the contract (see paragraph (d) of this 
subsection). The license shall enumerate the specific additional rights 
granted to the Government.
    (d) Specifically negotiated license rights. Negotiate specific 
licenses when the parties agree to modify the standard license rights 
granted to the Government or when the Government wants to obtain rights 
in computer software in which it does not have rights. When negotiating 
to obtain, relinquish, or increase the Government's rights in computer 
software, consider the planned software maintenance philosophy, 
anticipated time or user sharing requirements, and other factors which 
may have relevance for a particular procurement. If negotiating to 
relinquish rights in computer software documentation, consider the 
administrative burden associated with protecting documentation subject 
to restrictions from unauthorized release or disclosure. The negotiated 
license rights must stipulate the rights granted the Government to use, 
modify, reproduce, release, perform, display, or disclose the software 
or documentation and the extent to which the Government may authorize 
others to do so. Identify all negotiated rights in a license agreement 
made part of the contract.
    (e) Rights in derivative computer software or computer software 
documentation. The clause at 252.227-7014 protects the Government's 
rights in computer software, computer software documentation, or 
portions thereof that the contractor subsequently uses to prepare 
derivative software or subsequently embeds or includes in other software 
or documentation. The Government retains the rights it obtained under 
the development contract in the unmodified portions of the derivative 
software or documentation.



Sec. 227.7203-6  Contract clauses.

    (a)(1) Use the clause at 252.227-7014, Rights in Noncommercial 
Computer Software and Noncommercial Computer Software Documentation, in 
solicitations and contracts when the successful offeror(s) will be 
required to deliver computer software or computer software 
documentation. Do not use the clause when the only deliverable items are 
technical data (other than computer software documentation), commercial 
computer software or commercial computer software documentation, 
commercial items (see 227.7102-3), special works (see 227.7205), or 
contracts under the Small Business Innovative Research Program (see 
227.7104), Except as provided in 227.7107-2, do not use the clause in 
architect-engineer and construction contracts.
    (2) Use the clause at 252.227-7014 with its Alternate I in research 
contracts when the contracting officer determines, in consultation with 
counsel, that public dissemination by the contractor would be--
    (i) In the interest of the Government; and
    (ii) Facilitated by the Government relinquishing its right to 
publish the work for sale, or to have others publish the work for sale 
on behalf of the Government.
    (b) Use the clause at 252.227-7016, Rights in Bid or Proposal 
Information, in solicitations and contracts that include the clause at 
252.227-7014.
    (c) Use the clause at 252.227-7019, Validation of Asserted 
Restrictions--Computer Software, in solicitations and contracts that 
include the clause at 252.227-7014. The clause provides procedures for 
the validation of asserted restrictions on the Government's rights to 
use, release, or disclose computer software.
    (d) Use the provision at 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends, in solicitations and contracts when it is anticipated that the 
Government will provide the contractor, for performance of its contract, 
computer software or computer software documentation marked with another 
contractor's restrictive legend(s).

[[Page 199]]

    (e) Use the provision at 252.227-7028, Technical Data or Computer 
Software Previously Delivered to the Government, in solicitations when 
the resulting contract will require the contractor to deliver computer 
software or computer software documentation. The provision requires 
offerors to identify any software or documentation specified in the 
solicitation as deliverable items that are the same or substantially the 
same as software or documentation which the offeror has delivered or is 
obligated to deliver, either as a contractor or subcontractor, under any 
other federal agency contract.
    (f) Use the clause at 252.227-7037, Validation of Restrictive 
Markings on Technical Data, in solicitations and contracts that include 
the clause at 252.227-7014 when the contractor will be required to 
deliver noncommercial computer software documentation (technical data). 
The clause implements statutory requirements under 10 U.S.C. 2321. 
Paragraph (e) of the clause contains information that must be included 
in a formal challenge.



Sec. 227.7203-7  [Reserved]



Sec. 227.7203-8  Deferred delivery and deferred ordering of computer 
          software and computer software documentation.

    (a) Deferred delivery. Use the clause at 252.227-7026, Deferred 
Delivery of Technical Data or Computer Software, when it is in the 
Government's interests to defer the delivery of computer software or 
computer software documentation. The clause permits the contracting 
officer to require the delivery of data identified as ``deferred 
delivery'' data or computer software at any time until two years after 
acceptance by the Government of all items (other than technical data or 
computer software) under the contract or contract termination, whichever 
is later. The obligation of subcontractors or suppliers to deliver such 
data expires two years after the date the prime contractor accepts the 
last item from the subcontractor or supplier for use in the performance 
of the contract. The contract must specify the computer software or 
computer software documentation that is subject to deferred delivery. 
The contracting officer shall notify the contractor sufficiently in 
advance of the desired delivery date for such software or documentation 
to permit timely delivery.
    (b) Deferred ordering. Use the clause at 252.227-7027, Deferred 
Ordering of Technical Data or Computer Software, when a firm requirement 
for software or documentation has not been established prior to contract 
award but there is a potential need for computer software or computer 
software documentation. Under this clause the contracting officer may 
order any computer software or computer software documentation generated 
in the performance of the contract or any subcontract thereunder at any 
time until three years after acceptance of all items (other than 
technical data or computer software) under the contract or contract 
termination, whichever is later. The obligation of subcontractors to 
deliver such technical data or computer software expires three years 
after the date the contractor accepts the last item under the 
subcontract. When the software or documentation are ordered, the 
delivery dates shall be negotiated and the contractor compensated only 
for converting the software or documentation into the prescribed form, 
reproduction costs, and delivery costs.



Sec. 227.7203-9  Copyright.

    (a) Copyright license. (1) The clause at 252.227-7014, Rights in 
Noncommercial Computer Software and Noncommercial Computer Software 
Documentation, requires a contractor to grant, or obtain for the 
Government license rights which permit the Government to reproduce the 
software or documentation, distribute copies, perform or display the 
software or documentation and, through the right to modify data, prepare 
derivative works. The extent to which the Government, and others acting 
on its behalf, may exercise these rights varies for each of the standard 
data rights licenses obtained under the clause. When non-standard 
license rights in computer software or computer software documentation 
will be negotiated, negotiate the extent of the copyright license 
concurrent with negotiations for the data rights license. Do not 
negotiate copyright licenses for computer software that provide less

[[Page 200]]

rights than the standard restricted rights in computer software license. 
For computer software documentation, do not negotiate a copyright 
license that provides less rights than the standard limited rights in 
technical data license.
    (2) The clause at 252.227-7013, Rights in Technical Data--
Noncommercial Items, does not permit a contractor to incorporate a third 
party's copyrighted software into a deliverable software item unless the 
contractor has obtained an appropriate license for the Government and, 
when applicable, others acting on the Government's behalf, or has 
obtained the contracting officer's written approval to do so. Grant 
approval to use third party copyrighted software in which the Government 
will not receive a copyright license only when the Government's 
requirements cannot be satisfied without the third party material or 
when the use of the third party material will result in cost savings to 
the Government which outweigh the lack of a copyright license.
    (b) Copyright considerations--special works. See 227.7205 for 
copyright considerations when acquiring special works.



Sec. 227.7203-10  Contractor identification and marking of computer 
          software or computer software documentation to be furnished 
          with restrictive markings.

    (a) Identification requirements. (1) The solicitation provision at 
252.227-7017, Identification and Assertion of Use, Release, or 
Disclosure Restrictions, requires offerors to identify, prior to 
contract award, any computer software or computer software documentation 
that an offeror asserts should be provided to the Government with 
restrictions on use, modification, reproduction, release, or disclosure. 
This requirement does not apply to restrictions based solely on 
copyright. The notification and identification must be submitted as an 
attachment to the offer. If an offeror fails to submit the attachment or 
fails to complete the attachment in accordance with the requirements of 
the solicitation provision, such failure shall constitute a minor 
informality. Provide offerors an opportunity to remedy a minor 
informality in accordance with the procedures at FAR 14.405 or 
15.306(a). An offeror's failure to correct an informality within the 
time prescribed by the contracting officer shall render the offer 
ineligible for award.
    (2) The procedures for correcting minor informalities shall not be 
used to obtain information regarding asserted restrictions or an 
offeror's suggested asserted rights category. Questions regarding the 
justification for an asserted restriction or asserted rights category 
must be pursued in accordance with the procedures at 227.7203-13.
    (3) The restrictions asserted by a successful offeror shall be 
attached to its contract unless, in accordance with the procedures at 
227.7203-13, the parties have agreed that an asserted restriction is not 
justified. The contract attachment shall provide the same information 
regarding identification of the computer software or computer software 
documentation, the asserted rights category, the basis for the 
assertion, and the name of the person asserting the restrictions as 
required by paragraph (d) of the solicitation provision at 252.227-7017. 
Subsequent to contract award, the clause at 252.227-7014, Rights in 
Noncommercial Computer Software and Noncommercial Computer Software 
Documentation, permits a contractor to make additional assertions under 
certain conditions. The additional assertions must be made in accordance 
with the procedures and in the format prescribed by that clause.
    (4) Neither the pre- or post-award assertions made by the contractor 
nor the fact that certain assertions are identified in the attachment to 
the contract, determine the respective rights of the parties. As 
provided at 227.7203-13, the Government has the right to review, verify, 
challenge and validate restrictive markings.
    (5) Information provided by offerors in response to the solicitation 
provision at 252.227-7017 may be used in the source selection process to 
evaluate the impact on evaluation factors that may be created by 
restrictions on the Government's ability to use or disclose computer 
software or computer software documentation.
    (b) Contractor marking requirements. The clause at 252.227-7014, 
Rights in Noncommercial Computer Software

[[Page 201]]

and Noncommercial Computer Software Documentation--
    (1) Requires a contractor who desires to restrict the Government's 
rights in computer software or computer software documentation to place 
restrictive markings on the software or documentation, provides 
instructions for the placement of the restrictive markings, and 
authorizes the use of certain restrictive markings. When it is 
anticipated that the software will or may be used in combat or 
situations which simulate combat conditions, do not permit contractors 
to insert instructions into computer programs that interfere with or 
delay operation of the software to display a restrictive rights legend 
or other license notice; and
    (2) Requires a contractor to deliver, furnish, or otherwise provide 
to the Government any computer software or computer software 
documentation in which the Government has previously obtained rights 
with the Government's pre-existing rights in that software or 
documentation unless the parties have agreed otherwise or restrictions 
on the Government's rights to use, modify, produce, release, or disclose 
the software or documentation have expired. When restrictions are still 
applicable, the contractor is permitted to mark the software or 
documentation with the appropriate restrictive legend.
    (c) Unmarked computer software or computer software documentation. 
(1) Computer software or computer software documentation delivered or 
otherwise provided under a contract without restrictive markings shall 
be presumed to have been delivered with unlimited rights and may be 
released or disclosed without restriction. To the extent practicable, if 
a contractor has requested permission (see paragraph (c)(2) of this 
subsection) to correct an inadvertent omission of markings, do not 
release or disclose the software or documentation pending evaluation of 
the request.
    (2) A contractor may request permission to have appropriate legends 
placed on unmarked computer software or computer software documentation 
at its expense. The request must be received by the contracting officer 
within six months following the furnishing or delivery of such software 
or documentation, or any extension of that time approved by the 
contracting officer. The person making the request must--
    (i) Identify the software or documentation that should have been 
marked;
    (ii) Demonstrate that the omission of the marking was inadvertent, 
the proposed marking is justified and conforms with the requirements for 
the marking of computer software or computer software documentation 
contained in the clause at 252.227-7014; and
    (iii) Acknowledge, in writing, that the Government has no liability 
with respect to any disclosure, reproduction, or use of the software or 
documentation made prior to the addition of the marking or resulting 
from the omission of the marking.
    (3) Contracting officers should grant permission to mark only if the 
software or documentation were not distributed outside the Government or 
were distributed outside the Government with restrictions on further use 
or disclosure.

[60 FR 33482, June 28, 1995, as amended at 63 FR 55052, Oct. 14, 1998]



Sec. 227.7203-11  Contractor procedures and records.

    (a) The clause at 252.227-7014, Rights in Noncommercial Computer 
Software and Noncommercial Computer Software Documentation, requires a 
contractor, and its subcontractors or suppliers that will deliver 
computer software or computer software documentation with other than 
unlimited rights, to establish and follow written procedures to assure 
that restrictive markings are used only when authorized and to maintain 
records to justify the validity of restrictive markings.
    (b) The clause at 252.227-7019, Validation of Asserted 
Restrictions--Computer Software, requires contractors and their 
subcontractors or suppliers at any tier to maintain records sufficient 
to justify the validity of markings that assert restrictions on the use, 
modification, reproduction, release, performance, display, or disclosure 
of computer software.

[[Page 202]]



Sec. 227.7203-12  Government right to establish conformity of markings.

    (a) Nonconforming markings. (1) Authorized markings are identified 
in the clause at 252.227-7014, Rights in Noncommercial Computer Software 
and Noncommercial Computer Software Documentation. All other markings 
are nonconforming markings. An authorized marking that is not in the 
form, or differs in substance, from the marking requirements in the 
clause at 252.227-7014 is also a nonconforming marking.
    (2) The correction of nonconforming markings on computer software is 
not subject to 252.227-7019, Validation of Asserted Restrictions--
Computer Software, and the correction of nonconforming markings on 
computer software documentation (technical data) is not subject to 
252.227-7037, Validation of Restrictive Markings on Technical Data. To 
the extent practicable, the contracting officer should return computer 
software or computer software documentation bearing nonconforming 
markings to the person who has placed the nonconforming markings on the 
software or documentation to provide that person an opportunity to 
correct or strike the nonconforming markings at that person's expense. 
If that person fails to correct the nonconformity and return the 
corrected software or documentation within 60 days following the 
person's receipt of the software or documentation, the contracting 
officer may correct or strike the nonconformity at the person's expense. 
When it is impracticable to return computer software or computer 
software documentation for correction, contracting officers may 
unilaterally correct any nonconforming markings at Government expense. 
Prior to correction, the software or documentation may be used in 
accordance with the proper restrictive marking.
    (b) Unjustified markings. (1) An unjustified marking is an 
authorized marking that does not depict accurately restrictions 
applicable to the Government's use, modification, reproduction, release, 
or disclosure of the marked computer software or computer software 
documentation. For example, a restricted rights legend placed on 
computer software developed under a Government contract either 
exclusively at Government expense or with mixed funding (situations 
under which the Government obtains unlimited or government purpose 
rights) is an unjustified marking.
    (2) Contracting officers have the right to review and challenge the 
validity of unjustified markings. However, at any time during 
performance of a contract and notwithstanding existence of a challenge, 
the contracting officer and the person who has asserted a restrictive 
marking may agree that the restrictive marking is not justified. Upon 
such agreement, the contracting officer may, at his or her election, 
either--
    (i) Strike or correct the unjustified marking at that person's 
expense; or
    (ii) Return the computer software or computer software documentation 
to the person asserting the restriction for correction at that person's 
expense. If the software or documentation are returned and that person 
fails to correct or strike the unjustified restriction and return the 
corrected software or documentation to the contracting officer within 60 
days following receipt of the software or documentation, the unjustified 
marking shall be corrected or stricken at that person's expense.



Sec. 227.7203-13  Government right to review, verify, challenge and 
          validate asserted restrictions.

    (a) General. An offeror's or contractor's assertion(s) of 
restrictions on the Government's rights to use, modify, reproduce, 
release, or disclose computer software or computer software 
documentation do not, by themselves, determine the extent of the 
Government's rights in such software or documentation. The Government 
may require an offeror or contractor to submit sufficient information to 
permit an evaluation of a particular asserted restriction and may 
challenge asserted restrictions when there are reasonable grounds to 
believe that an assertion is not valid.
    (b) Requests for information. Contracting officers should have a 
reason to suspect that an asserted restriction

[[Page 203]]

might not be correct prior to requesting information. When requesting 
information, provide the offeror or contractor the reason(s) for 
suspecting that an asserted restriction might not be correct. A need for 
additional license rights is not, by itself, a sufficient basis for 
requesting information concerning an asserted restriction. Follow the 
procedures at 227.7203-5(d) when additional license rights are needed 
but there is no basis to suspect that an asserted restriction might not 
be valid.
    (c) Transacting matters directly with subcontractors. The clause at 
252.227-7019, Validation of Asserted Restrictions--Computer Software, 
obtains the contractor's agreement that the Government may transact 
matters under the clause directly with a subcontractor or supplier, at 
any tier, without creating or implying privity of contract. Contracting 
officers should permit a subcontractor or supplier to transact challenge 
and validation matters directly with the Government when--
    (1) A subcontractor's or supplier's business interests in its 
technical data would be compromised if the data were disclosed to a 
higher tier contractor.
    (2) There is reason to believe that the contractor will not respond 
in a timely manner to a challenge and an untimely response would 
jeopardize a subcontractor's or supplier's right to assert restrictions; 
or
    (3) Requested to do so by a subcontractor or supplier.
    (d) Challenging asserted restrictions--(1) Pre-award considerations. 
The challenge procedures in the clause at 252.227-7019 could 
significantly delay competitive procurements. Therefore, avoid 
challenging asserted restrictions prior to a competitive contract award 
unless resolution of the assertion is essential for successful 
completion of the procurement.
    (2) Computer software documentation. Computer software documentation 
is technical data. Challenges to asserted restrictions on the 
Government's rights to use, modify, reproduce, release, perform, 
display, or disclose computer software documentation must be made in 
accordance with the clause at 252.227-7037, Validation of Restrictive 
Markings on Technical Data, and the guidance at 227.7103-13. The 
procedures in the clause at 252.227-7037 implement requirements 
contained in 10 U.S.C. 2321. Resolution of questions regarding the 
validity of asserted restrictions using the process described at 
227.7103-12(b)(2) is strongly encouraged.
    (3) Computer software. (i) Asserted restrictions should be reviewed 
before acceptance of the computer software deliverable under a contract. 
The Government's right to challenge an assertion expires three years 
after final payment under the contract or three years after delivery of 
the software, whichever is later. Those limitations on the Government's 
challenge rights do not apply to software that is publicly available, 
has been furnished to the Government without restrictions, or has been 
otherwise made available without restrictions.
    (ii) Contracting officers must have reasonable grounds to challenge 
the current validity of an asserted restriction. Before challenging an 
asserted restriction, carefully consider all available information 
pertaining to the asserted restrictions. Resolution of questions 
regarding the validity of asserted restrictions using the process 
described at 227.7203-12(b)(2) is strongly encouraged. After 
consideration of the situations described in paragraph (c) of this 
subsection, contracting officers may request the person asserting a 
restriction to furnish a written explanation of the facts and supporting 
documentation for the assertion in sufficient detail to enable the 
contracting officer to determine the validity of the assertion. 
Additional supporting documentation may be requested when the 
explanation provided by that person does not, in the contracting 
officer's opinion, establish the validity of the assertion.
    (iii) Assertions may be challenged whether or not supporting 
documentation was requested. Challenges must be in writing and issued to 
the person asserting the restriction.
    (4) Extension of response time. The contracting officer, at his or 
her discretion, may extend the time for response contained in a 
challenge, as appropriate, if the contractor submits a timely written 
request showing the

[[Page 204]]

need for additional time to prepare a response.
    (e) Validating or denying asserted restrictions. (1) Contracting 
officers must promptly issue a final decision denying or sustaining the 
validity of each challenged assertion unless the parties have agreed on 
the disposition of the assertion. When a final decision denying the 
validity of an asserted restriction is made following a timely response 
to a challenge, the Government is obligated to continue to respect the 
asserted restrictions through final disposition of any appeal unless the 
agency head notifies the person asserting the restriction that urgent or 
compelling circumstances do not permit the Government to continue to 
respect the asserted restriction. See 252.227-7019(g) for restrictions 
applicable following a determination of urgent and compelling 
circumstances.
    (2) Only a contracting officer's final decision, or actions of an 
agency Board of Contract Appeals or a court of competent jurisdiction, 
that sustain the validity of an asserted restriction constitute 
validation of the restriction.
    (f) Multiple challenges to an asserted restriction. When more than 
one contracting officer challenges an asserted restriction, the 
contracting officer who made the earliest challenge is responsible for 
coordinating the Government challenges. That contracting officer shall 
consult with all other contracting officers making challenges, verify 
that all challenges apply to the same asserted restriction and, after 
consulting with the contractor, subcontractor, or supplier asserting the 
restriction, issue a schedule that provides that person a reasonable 
opportunity to respond to each challenge.



Sec. 227.7203-14  Conformity, acceptance, and warranty of computer 
          software and computer software documentation.

    (a) Computer software documentation. Computer software documentation 
is technical data. See 227.7103-14 for appropriate guidance and 
statutory requirements.
    (b) Computer software--(1) Conformity and acceptance. Solicitations 
and contracts requiring the delivery of computer software shall specify 
the requirements the software must satisfy to be acceptable. Contracting 
officers, or their authorized representatives, are responsible for 
determining whether computer software tendered for acceptance conforms 
to the contractual requirements. Except for nonconforming restrictive 
markings (follow the procedures at 227.7203-12(a) if nonconforming 
markings are the sole reason computer software tendered for acceptance 
fails to conform to contractual requirements), do not accept software 
that does not conform in all respects to applicable contractual 
requirements. Correction or replacement of nonconforming software, or an 
equitable reduction in contract price when correction or replacement of 
the nonconforming data is not practicable or is not in the Government's 
interests, shall be accomplished in accordance with--
    (i) The provisions of a contract clause providing for inspection and 
acceptance of deliverables and remedies for nonconforming deliverables; 
or
    (ii) The procedures at FAR 46.407(c) through (g), if the contract 
does not contain an inspection clause providing remedies for 
nonconforming deliverables.
    (2) Warranties--(i) Weapon systems. Computer software that is a 
component of a weapon system or major subsystem should be warranted as 
part of the weapon system warranty. Follow the procedures at 246.770.
    (ii) Non-weapon systems. Approval of the chief of the contracting 
office must be obtained to use a computer software warranty other than a 
weapon system warranty. Consider the factors at FAR 46.703 in deciding 
whether to obtain a computer software warranty. When approval for a 
warranty has been obtained, the clause at 252.246-7001, Warranty of 
Data, and its alternates, may be appropriately modified for use with 
computer software or a procurement specific clause may be developed.



Sec. 227.7203-15  Subcontractor rights in computer software or computer 
          software documentation.

    (a) Subcontractors and suppliers at all tiers should be provided the 
same protection for their rights in computer

[[Page 205]]

software or computer software documentation as are provided to prime 
contractors.
    (b) The clauses at 252.227-7019, Validation of Asserted 
Restrictions--Computer Software, and 252.227-7037, Validation of 
Restrictive Markings on Technical Data, obtain a contractor's agreement 
that the Government's transaction of validation or challenge matters 
directly with subcontractors at any tier does not establish or imply 
privity of contract. When a subcontractor or supplier exercises its 
right to transact validation matters directly with the Government, 
contracting officers shall deal directly with such persons, as provided 
at 227.7203-13(c) for computer software and 227.7103-13(c)(3) for 
computer software documentation (technical data).
    (c) Require prime contractors whose contracts include the following 
clauses to include those clauses, without modification except for 
appropriate identification of the parties, in contracts with 
subcontractors or suppliers who will be furnishing computer software in 
response to a Government requirement (see 227.7103-15(c) for clauses 
required when subcontractors or suppliers will be furnishing computer 
software documentation (technical data)):
    (1) 252.227.7014, Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation;
    (2) 252.227.7019, Validation of Asserted Restrictions--Computer 
Software;
    (3) 252.227.7025, Limitations on the Use or Disclosure of Government 
Furnished Information Marked with Restrictive Legends; and
    (4) 252.227.7028, Technical Data or Computer Software Previously 
Delivered to the Government.
    (d) Do not require contractors to have their subcontractors or 
suppliers at any tier relinquish rights in technical data to the 
contractor, a higher tier subcontractor, or to the Government, as a 
condition for award of any contract, subcontract, purchase order, or 
similar instrument except for the rights obtained by the Government 
under the provisions of the Rights in Noncommercial Computer Software 
and Noncommercial Computer Software Documentation clause contained in 
the contractor's contract with the Government.



Sec. 227.7203-16  Providing computer software or computer software 
          documentation to foreign governments, foreign contractors, or 
          international organizations.

    Computer software or computer software documentation may be released 
or disclosed to foreign governments, foreign contractors, or 
international organizations only if release or disclosure is otherwise 
permitted both by Federal export controls and other national security 
laws or regulations. Subject to such laws and regulations, the 
Department of Defense--
    (a) May release or disclose computer software or computer software 
documentation in which it has obtained unlimited rights to such foreign 
entities or authorize the use of such data by those entities; and
    (b) Shall not release or disclose computer software or computer 
software documentation for which restrictions on use, release, or 
disclosure have been asserted to such foreign entities or authorize the 
use of such data by those entities, unless the intended recipient is 
subject to the same provisions as included in the use and non-disclosure 
agreement at 227.7103-7 and the requirements of the clause at 252.227-
7014, Rights in Noncommercial Computer Software and Noncommercial 
Computer Software Documentation, governing use, modification, 
reproduction, release, performance, display, or disclosure of such data 
have been satisfied.



Sec. 227.7203-17  Overseas contracts with foreign sources.

    (a) The clause at 252.227-7032, Rights in Technical Data and 
Computer Software (Foreign), may be used in contracts with foreign 
contractors to be performed overseas, except Canadian purchases (see 
paragraph (c) of this subsection) in lieu of the clause at 252.227-7014, 
Rights in Noncommercial Computer Software and Noncommercial Computer 
Software Documentation, when the Government requires the unrestricted 
right to use, modify, reproduce, release, perform, display, or

[[Page 206]]

disclose all computer software or computer software documentation to be 
delivered under the contract. Do not use the clause in contracts for 
special works.
    (b) When the Government does not require unlimited rights, the 
clause at 252.227-7032 may be modified to accommodate the needs of a 
specific overseas procurement situation. The Government should obtain 
rights to the computer software or computer software documentation that 
are not less than the rights the Government would have obtained under 
the software rights clause(s) prescribed in this part for a comparable 
procurement performed within the United States or its outlying areas.
    (c) Contracts for Canadian purchases shall include the appropriate 
software rights clause prescribed in this part for a comparable 
procurement performed within the United States or its outlying areas.

[56 FR 36389, July 31, 1991, as amended at 70 FR 35545, June 21, 2005]



Sec. 227.7204  Contracts under the Small Business Innovative Research 
          Program.

    When contracting under the Small Business Innovative Research 
Program, follow the procedures at 227-7104.



Sec. 227.7205  Contracts for special works.

    (a) Use the clause at 252.227-7020, Rights in Special Works, in 
solicitations and contracts where the Government has a specific need to 
control the distribution of computer software or computer software 
documentation first produced, created, or generated in the performance 
of a contract and required to be delivered under that contract, 
including controlling distribution by obtaining an assignment of 
copyright, or a specific need to obtain indemnity for liabilities that 
may arise out of the creation, delivery, use, modification, 
reproduction, release, performance, display, or disclosure of such 
software or documentation. Use the clause--
    (1) In lieu of the clause at 252.227-7014, Rights in Noncommercial 
Computer Software and Noncommercial Computer Software Documentation, 
when the Government must own or control copyright in all computer 
software or computer software documentation first produced, created, or 
generated and required to be delivered under a contract; or
    (2) In addition to the clause at 252.227-7014 when the Government 
must own or control copyright in some of the computer software or 
computer software documentation first produced, created, or generated 
and required to be delivered under a contract. The specific software or 
documentation in which the Government must own or control copyright must 
be identified in a special contract requirement.
    (b) Although the Government obtains an assignment of copyright and 
unlimited rights in the computer software or computer software 
documentation delivered as a special work under the clause at 252.227-
7020, the contractor retains use and disclosure rights in that software 
or documentation. If the Government needs to restrict a contractor's 
rights to use or disclose a special work, it must also negotiate a 
special license which specifically restricts the contractor's use or 
disclosure rights.
    (c) The clause at 252.227-7020 does not permit a contractor to 
incorporate into a special work any work copyrighted by others unless 
the contractor obtains the contracting officer's permission to do so and 
obtains for the Government a non-exclusive, paid up, world-wide license 
to make and distribute copies of that work, to prepare derivative works, 
to perform or display any portion of that work, and to permit others to 
do so for government purposes. Grant permission only when the 
Government's requirements cannot be satisfied unless the third party 
work is included in the deliverable work.
    (d) Examples of other works which may be procured under the clause 
at 252.227-7020 include, but are not limited to, audiovisual works, 
scripts, soundtracks, musical compositions, and adaptations; histories 
of departments, agencies, services or units thereof; surveys of 
Government establishments; instructional works or guidance to Government 
officers and employees on the

[[Page 207]]

discharge of their official duties; reports, books, studies, surveys or 
similar documents; collections of data containing information pertaining 
to individuals that, if disclosed, would violate the right of privacy or 
publicity of the individuals to whom the information relates; or 
investigative reports.



Sec. 227.7206  Contracts for architect-engineer services.

    Follow 227.7107 when contracting for architect-engineer services.



Sec. 227.7207  Contractor data repositories.

    Follow 227.7108 when it is in the Government's interests to have a 
data repository include computer software or to have a separate computer 
software repository. Contractual instruments establishing the repository 
requirements must appropriately reflect the repository manager's 
software responsibilities.

                      PART 228_BONDS AND INSURANCE

                           Subpart 228.1_Bonds

Sec.

Sec. 228.102 Performance and payment bonds for construction contracts.

Sec. 228.102-1 General.

Sec. 228.102-70 Defense Environmental Restoration Program construction 
          contract.

Sec. 228.105 Other types of bonds.

Sec. 228.106 Administration.

Sec. 228.106-7 Withholding contract payments.

Sec. 228.170 Solicitation provision.

                         Subpart 228.3_Insurance


Sec. 228.304 Risk-pooling arrangements.

Sec. 228.305 Overseas workers' compensation and war-hazard insurance.

Sec. 228.307 Insurance under cost-reimbursement contracts.

Sec. 228.307-1 Group insurance plans.

Sec. 228.311 Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.

Sec. 228.311-1 Contract clause.

Sec. 228.370 Additional clauses.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36404, July 31, 1991, unless otherwise noted.

                           Subpart 228.1_Bonds



Sec. 228.102  Performance and payment bonds for construction contracts.



Sec. 228.102-1  General.

    The requirement for performance and payment bonds is waived for 
cost-reimbursement contracts. However, for cost-type contracts with 
fixed-price construction subcontracts over $25,000, require the prime 
contractor to obtain from each of its construction subcontractors 
performance and payment protections in favor of the prime contractor as 
follows:
    (1) For fixed-price construction subcontracts over $25,000, but not 
exceeding $100,000, payment protection sufficient to pay labor and 
material costs, using any of the alternatives listed at FAR 28.102-
1(b)(1).
    (2) For fixed-price construction subcontracts over $100,000--
    (i) A payment bond sufficient to pay labor and material costs; and
    (ii) A performance bond in an equal amount if available at no 
additional cost.

[68 FR 36945, June 20, 2003]



Sec. 228.102-70  Defense Environmental Restoration Program construction 
          contracts.

    For Defense Environmental Restoration Program construction contracts 
entered into pursuant to 10 U.S.C. 2701-
    (a) Any rights of action under the performance bond shall only 
accrue to, and be for the exclusive use of, the obligee named in the 
bond;
    (b) In the event of default, the surety's liability on the 
performance bond is limited to the cost of completion of the contract 
work, less the balance of unexpended funds. Under no circumstances shall 
the liability exceed the penal sum of the bond;
    (c) The surety shall not be liable for indemnification or 
compensation of the obligee for loss or liability arising from personal 
injury or property damage, even if the injury or damage was caused by a 
breach of the bonded contract; and
    (d) Once it has taken action to meet its obligations under the bond, 
the surety is entitled to any indemnification and identical standard of 
liability to

[[Page 208]]

which the contractor was entitled under the contract or applicable laws 
and regulations.

[68 FR 36945, June 20, 2003]



Sec. 228.105  Other types of bonds.

    Fidelity and forgery bonds generally are not required but are 
authorized for use when--
    (1) Necessary for the protection of the Government or the 
contractor; or
    (2) The investigative and claims services of a surety company are 
desired.

[70 FR 8538, Feb. 22, 2005]



Sec. 228.106  Administration.



Sec. 228.106-7  Withholding contract payments.

    (a) Withholding may be appropriate in other than construction 
contracts (see FAR 32.112-1(b)).

[57 FR 42707, Sept. 16, 1992, as amended at 70 FR 8538, Feb. 22, 2005]



Sec. 228.170  Solicitation provision.

    When a requirement for a performance bond or other security is 
included in a solicitation for dismantling, demolition, or removal of 
improvements (see FAR 37.300), use the provision at 252.228-7004, Bonds 
or Other Security. Set a period of time (normally ten days) for return 
of executed bonds.

                         Subpart 228.3_Insurance



Sec. 228.304  Risk-pooling arrangements.

    DoD has established the National Defense Projects Rating Plan, also 
known as the Special Casualty Insurance Rating Plan, as a risk-pooling 
arrangement to minimize the cost to the Government of purchasing the 
liability insurance listed in FAR 28.307-2. Use the plan in accordance 
with the procedures at PGI 228.304 when it provides the necessary 
coverage more advantageously than commercially available coverage.

[69 FR 65091, Nov. 10, 2004]



Sec. 228.305  Overseas workers' compensation and war-hazard insurance.

    (d) When submitting requests for waiver, follow the procedures at 
PGI 228.305(d).

[69 FR 65091, Nov. 10, 2004]



Sec. 228.307  Insurance under cost-reimbursement contracts.



Sec. 228.307-1  Group insurance plans.

    The Defense Department Group Term Insurance Plan is available for 
contractor use under cost-reimbursement type contracts when approved as 
provided in department or agency regulations. A contractor is eligible 
if--
    (a) The number of covered employees is 500 or more; and
    (b) The contractor has all cost-reimbursement contracts; or
    (c) At least 90 percent of the payroll for contractor operations to 
be covered by the Plan is under cost-reimbursement contracts.



Sec. 228.311  Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.



Sec. 228.311-1  Contract clause.

    Use the clause at FAR 52.228-7, Insurance--Liability to Third 
Persons, in solicitations and contracts, other than those for 
construction and those for architect-engineer services, when a cost-
reimbursement contract is contemplated, unless the head of the 
contracting activity waives the requirement for use of the clause.

[56 FR 36404, July 31, 1991. Redesignated at 61 FR 50454, Sept. 26, 
1996]



Sec. 228.370  Additional clauses.

    (a) Use the clause at 252.228-7000, Reimbursement for War-Hazard 
Losses, when--
    (1) The clause at FAR 52.228-4, Worker's Compensation and War-Hazard 
Insurance Overseas, is used; and
    (2) The head of the contracting activity decides not to allow the 
contractor to buy insurance for war-hazard losses.
    (b)(1) Use the clause at 252.228-7001, Ground and Flight Risk, in 
negotiated fixed-price contracts for aircraft production, modification, 
maintenance, repair, or overhaul, unless--
    (i) The aircraft is being acquired for a foreign military sale and 
the foreign government has not agreed to assume the risk; or
    (ii) The cost of insurance for damage, loss, or destruction of 
aircraft does not

[[Page 209]]

exceed $500, and the contracting officer agrees to recognize the 
insurance costs.
    (2) If appropriate, revise the clause at 252.228-7001, Ground and 
Flight Risk, as follows--
    (i) Include a modified definition of ``aircraft'' if the contract 
covers other than conventional types of winged aircraft, i.e., 
helicopters, vertical take-off aircraft, lighter-than-air airships or 
other nonconventional aircraft. The modified definition should describe 
a stage of manufacture comparable to the standard definition.
    (ii) Modify ``in the open'' to include ``hush houses,'' test hangars 
and comparable structures, and other designated areas.
    (iii) Expressly define the ``contractor's premises'' where the 
aircraft will be located during and for contract performance. These 
locations may include contract premises which are owned, leased, or 
premises where the contractor is a permittee or licensee or has a right 
to use, including Government airfields.
    (iv) Revise paragraph (d)(iii) of the clause to provide Government 
assumption of risk for transportation by conveyance on streets or 
highways when transportation is--
    (A) Limited to the vicinity of contractor premises; and
    (B) Incidental to work performed under the contract.
    (c)(1) Use the clause at 252.228-7002, Aircraft Flight Risk, in cost 
reimbursement contracts--
    (i) For the development, production, modification, maintenance, 
repair, or overhaul of aircraft; or
    (ii) Otherwise involving the furnishing of aircraft to the 
contractor by the Government.
    (iii) With the definition of ``aircraft'' modified, if appropriate, 
to include helicopters, vertical take-off aircraft, lighter-than-air 
airships or other nonconventional aircraft.
    (2) Use the clause at 252.228-7002, Aircraft Flight Risk, 
appropriately modified, in fixed price contracts when--
    (i) The clause at 252.228-7001, Ground and Flight Risk, is not used; 
and
    (ii) Contract performance involves the flight of Government 
furnished aircraft.
    (d) The clause at 252.228-7003, Capture and Detention, may be used 
when contractor employees are subject to capture and detention and may 
not be covered by the War Hazards Compensation Act (42 U.S.C. 1701 et 
seq.).
    (e) The clause at 252.228-7005, Accident Reporting and Investigation 
Involving Aircraft, Missiles, and Space Launch Vehicles, may be used in 
solicitations and contracts which involve the manufacture, modification, 
overhaul, or repair of these items.
    (f) Use the clause at 252.228-7006, Compliance with Spanish Laws and 
Insurance, in solicitations and contracts for services or construction 
to be performed in Spain, unless the contractor is a Spanish concern.

[56 FR 36404, July 31, 1991, as amended at 57 FR 42631, Sept. 15, 1992; 
62 FR 34125, June 24, 1997; 63 FR 69006, Dec. 15, 1998]

                             PART 229_TAXES

                          Subpart 229.1_General

Sec.

Sec. 229.101 Resolving tax problems.

Sec. 229.170 Reporting of foreign taxation on U.S. assistance programs.

Sec. 229.170-1 Definition.

Sec. 229.170-2 Policy.

Sec. 229.170-3 Reports.

Sec. 229.170-4 Contract clause.

                     Subpart 229.4_Contract Clauses


Sec. 229.402 Foreign contracts.

Sec. 229.402-1 Foreign fixed-price contracts.

Sec. 229.402-70 Additional clauses.

Subpart 229.70--Special Procedures for Overseas Contracts

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36405, July 31, 1991, unless otherwise noted.

                          Subpart 229.1_General



Sec. 229.101  Resolving tax problems.

    (a) Within DoD, the agency-designated legal counsels are the defense 
agency General Counsels, the General Counsels of the Navy and Air Force, 
and for the Army, the Chief, Contract

[[Page 210]]

Law Division, Office of the Judge Advocate General. For additional 
information on the designated legal counsels, see PGI 229.101(a).
    (b) For information on fuel excise taxes, see PGI 229.101(b).
    (c) For guidance on directing a contractor to litigate the 
applicability of a particular tax, see PGI 229.101(c).
    (d) For information on tax relief agreements between the United 
States and European foreign governments, see PGI 229.101(d).

[70 FR 8538, Feb. 22, 2005, as amended at 71 FR 14100, Mar. 21, 2006]



Sec. 229.170  Reporting of foreign taxation on U.S. assistance programs.



Sec. 229.170-1  Definition.

    Commodities, as used in this section, means any materials, articles, 
supplies, goods, or equipment.

[70 FR 57192, Sept. 30, 2005]



Sec. 229.170-2  Policy.

    (a) By law, bilateral agreements with foreign governments must 
include a provision that commodities acquired under contracts funded by 
U.S. assistance programs shall be exempt from taxation by the foreign 
government. If taxes or customs duties nevertheless are imposed, the 
foreign government must reimburse the amount of such taxes to the U.S. 
Government (Section 579 of Division E of the Consolidated Appropriations 
Act, 2003 (Pub. L. 108-7), as amended by Section 506 of Division D of 
the Consolidated Appropriations Act, 2004 (Pub. L. 108-199), and similar 
sections in subsequent acts).
    (b) This foreign tax exemption--
    (1) Applies to a contract or subcontract for commodities when--
    (i) The funds are appropriated by the annual foreign operations 
appropriations act; and
    (ii) The value of the contract or subcontract is $500 or more;
    (2) Does not apply to the acquisition of services;
    (3) Generally is implemented through letters of offer and 
acceptance, other country-to-country agreements, or Federal interagency 
agreements; and
    (4) Requires reporting of noncompliance for effective 
implementation.

[70 FR 57192, Sept. 30, 2005]



Sec. 229.170-3  Reports.

    The contracting officer shall submit a report to the designated 
Security Assistance Office when a foreign government or entity imposes 
tax or customs duties on commodities acquired under contracts or 
subcontracts meeting the criteria of 229.170-2(b)(1). Follow the 
procedures at PGI 229.170-3 for submission of reports.

[70 FR 57192, Sept. 30, 2005]



Sec. 229.170-4  Contract clause.

    Use the clause at 252.229-7011, Reporting of Foreign Taxes--U.S. 
Assistance Programs, in solicitations and contracts funded with U.S. 
assistance appropriations provided in the annual foreign operations 
appropriations act.

[70 FR 57192, Sept. 30, 2005]

                     Subpart 229.4_Contract Clauses

    Source: 62 FR 34125, June 24, 1997, unless otherwise noted.



Sec. 229.402  Foreign contracts.



Sec. 229.402-1  Foreign fixed-price contracts.

    Use the clause at 252.229-7000, Invoices Exclusive of Taxes or 
Duties, in solicitations and contracts when a fixed-price contract will 
be awarded to a foreign concern.



Sec. 229.402-70  Additional clauses.

    (a) Use the clause at 252.229-7001, Tax Relief, in solicitations and 
contracts when a contract will be awarded to a foreign concern in a 
foreign country. When contract performance will be in Germany, use the 
clause with its Alternate I.
    (b) Use the clause at 252.229-7002, Customs Exemptions (Germany), in 
solicitations and contracts requiring the import of U.S. manufactured 
products into Germany.
    (c) Use the clause at 252.229-7003, Tax Exemptions (Italy), in 
solicitations and contracts when contract performance will be in Italy.

[[Page 211]]

    (d) Use the clause at 252.229-7004, Status of Contractor as a Direct 
Contractor (Spain), in solicitations and contracts requiring the import 
into Spain of supplies for construction, development, maintenance, or 
operation of Spanish-American installations and facilities.
    (e) Use the clause at 252.229-7005, Tax Exemptions (Spain), in 
solicitations and contracts when contract performance will be in Spain.
    (f) Use the clause at 252.229-7006, Value Added Tax Exclusion 
(United Kingdom), in solicitations and contracts when contract 
performance will be in the United Kingdom.
    (g) Use the clause at 252.229-7007, Verification of United States 
Receipt of Goods, in solicitations and contracts when contract 
performance will be in the United Kingdom.
    (h) Use the clause at 252.229-7008, Relief from Import Duty (United 
Kingdom), in solicitations issued and contracts awarded in the United 
Kingdom.
    (i) Use the clause at 252.229-7009, Relief from Customs Duty and 
Value Added Tax on Fuel (Passenger Vehicles) (United Kingdom), in 
solicitations issued and contracts awarded in the United Kingdom for 
fuels (gasoline or diesel) and lubricants used in passenger vehicles 
(excluding taxis).
    (j) Use the clause at 252.229-7010, Relief from Customs Duty on Fuel 
(United Kingdom), in solicitations issued and contracts awarded in the 
United Kingdom that require the use of fuels (gasoline or diesel) and 
lubricants in taxis or vehicles other than passenger vehicles.

        Subpart 229.70_Special Procedures for Overseas Contracts

    Source: 70 FR 6375, Feb. 7, 2005, unless otherwise noted.
    Note: To obtain tax relief for overseas contracts, follow the 
procedures at PGI 229.70.


            PART 230_COST ACCOUNTING STANDARDS ADMINISTRATION

                 Subpart 230.2_CAS Program Requirements

Sec.

Sec. 230.201-5 Waiver.

    Subpart 230.70_Facilities Capital Employed for Facilities in Use


Sec. 230.7000 Contract facilities capital estimates.

Sec. 230.7001 Use of DD Form 1861.

Sec. 230.7001-1 Purpose.

Sec. 230.7001-2 Completion instructions.

Sec. 230.7002 Preaward facilities capital applications.

Sec. 230.7003 Postaward facilities capital applications.

Sec. 230.7003-1 Interim billings based on costs incurred.

Sec. 230.7003-2 Final settlement.

Sec. 230.7004 Administrative procedures.

Sec. 230.7004-1 Forms CASB-CMF.

Sec. 230.7004-2 DD Form 1861.

    Subpart 230.71_Facilities Capital Employed for Facilities Under 
                              Construction


Sec. 230.7100 Definitions.

Sec. 230.7101 Calculations.

Sec. 230.7101-1 Cost of money.

Sec. 230.7101-2 Representative investment.

Sec. 230.7102 Determining imputed cost of money.

Sec. 230.7103 Preaward capital employed application.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36406, July 31, 1991, unless otherwise noted.

                 Subpart 230.2_CAS Program Requirements



Sec. 230.201-5  Waiver.

    (a)(1)(A) The military departments--
    (1) May grant CAS waivers that meet the conditions in FAR 30.201-
5(b); and
    (2) Unless otherwise authorized by the Director of Defense 
Procurement and Acquisition Policy, Office of the Under Secretary of 
Defense (Acquisition, Technology, and Logistics), must submit each CAS 
waiver request to the Director of Defense Procurement and Acquisition 
Policy for review at least 14 days before granting the waiver.
    (B) DoD contracting activities that are not within a military 
department must submit CAS waiver requests that meet the conditions in 
FAR 30.201-5(b) to the Director of Defense Procurement and Acquisition 
Policy for approval at least 30 days before the anticipated contract 
award date.
    (2) The military departments must not delegate CAS waiver authority 
below the individual responsible for

[[Page 212]]

issuing contracting policy for the department.
    (e)(i) by November 15th of each year, the military departments must 
provide a report of all waivers granted under FAR 30.201-5(a) during the 
previous fiscal year to the Director of Defense Procurement and 
Acquisition Policy.
    (ii) The Director of Defense Procurement and Acquisition Policy will 
submit a consolidated DoD report to the CAS Board.

[65 FR 36035, June 6, 2000, as amended at 68 FR 7440, Feb. 14, 2003]

    Subpart 230.70_Facilities Capital Employed for Facilities in Use



Sec. 230.7000  Contract facilities capital estimates.

    (a) The contracting officer will estimate the facilities capital 
cost of money and capital employed using--
    (1) An analysis of the appropriate Forms CASB-CMF and cost of money 
factors; and
    (2) DD Form 1861, Contract Facilities Capital Cost of Money.



Sec. 230.7001  Use of DD Form 1861.



Sec. 230.7001-1  Purpose.

    The DD Form 1861 provides a means of linking the Form CASB-CMF and 
DD Form 1547, Record of Weighted Guidelines Application. It--
    (a) Enables the contracting officer to differentiate profit 
objectives for various types of assets (land, buildings, equipment). The 
procedure is similar to applying overhead rates to appropriate overhead 
allocation bases to determine contract overhead costs.
    (b) Is designed to record and compute the contract facilities 
capital cost of money and capital employed which is carried forward to 
DD Form 1547.



Sec. 230.7001-2  Completion instructions.

    Complete a DD Form 1861 only after evaluating the contractor's cost 
proposal, establishing cost of money factors, and establishing a 
prenegotiation objective on cost. Complete the form as follows:
    (a) List overhead pools and direct-charging service centers (if 
used) in the same structure as they appear on the contractor's cost 
proposal and Form CASB-CMF. The structure and allocation base units-of-
measure must be compatible on all three displays.
    (b) Extract appropriate contract overhead allocation base data, by 
year, from the evaluated cost breakdown or prenegotiation cost objective 
and list against each overhead pool and direct-charging service center.
    (c) Multiply each allocation base by its corresponding cost of money 
factor to get the facilities capital cost of money estimated to be 
incurred each year. The sum of these products represents the estimated 
contract facilities capital cost of money for the year's effort.
    (d) Total contract facilities cost of money is the sum of the yearly 
amounts.
    (e) Since the facilities capital cost of money factors reflect the 
applicable cost of money rate in Column 1 of Form CASB-CMF, divide the 
contract cost of money by that same rate to determine the contract 
facilities capital employed.



Sec. 230.7002  Preaward facilities capital applications.

    To establish cost and price objectives, apply the facilities capital 
cost of money and capital employed, as determined under 230.7000, as 
follows:
    (a) Cost of Money--(1) Cost Objective. Use the imputed facilities 
capital cost of money, with normal, booked costs, to establish a cost 
objective or the target cost when structuring an incentive type 
contract. Do not adjust target costs established at the outset even 
though actual cost of money rates become available during the period of 
contract performance.
    (2) Profit Objective. When measuring the contractor's effort for the 
purpose of establishing a prenegotiation profit objective, restrict the 
cost base to normal, booked costs. Do not include cost of money as part 
of the cost base.
    (b) Facilities Capital Employed. Assess and weight the profit 
objective or risk associated with facilities capital employed in 
accordance with the profit guidelines at 215.404-71-4.

[56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998]

[[Page 213]]



Sec. 230.7003  Postaward facilities capital applications.



Sec. 230.7003-1  Interim billings based on costs incurred.

    (a) The contractor may include contract facilities capital cost of 
money in cost reimbursement and progress payment invoices. To determine 
the amount that qualifies as cost incurred, multiply the incurred 
portions of the overhead pool allocation bases by the latest available 
cost of money factors. These cost of money calculations are interim 
estimates subject to adjustment.
    (b) As actual cost of money factors under CAS 414 and FAR 31.205-10 
are finalized, use the new factors to calculate contract facilities cost 
of money for the next accounting period.



Sec. 230.7003-2  Final settlement.

    (a) Contract facilities capital cost of money for final cost 
determination or repricing is based on each year's final cost of money 
factors determined under CAS 414 and supported by separate Forms CASB-
CMF.
    (b) Separately compute contract facilities cost of money in a manner 
similar to yearly final overhead rates. Also like overhead costs, 
include in the final settlement an adjustment from interim to final 
contract cost of money. Do not, however, adjust estimated or target 
cost.



Sec. 230.7004  Administrative procedures.



Sec. 230.7004-1  Forms CASB-CMF.

    (a) Forms CASB-CMF are normally initiated by the contractor under 
the same circumstances as Forward Pricing Rate Agreements (see FAR 
Subpart 42.17) and evaluated as complementary documents and procedures.
    (b) Separate forms are required for each prospective cost accounting 
period of contract performance.
    (c) The contractor may submit annually or with individual contract 
price proposals, as agreed with the administrative contracting officer 
(ACO).
    (d) The contractor must submit a final form under CAS 414 as soon as 
possible after the end of each accounting period, together with a 
proposal for actual overhead costs and rates.

[56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998]



Sec. 230.7004-2  DD Form 1861.

    (a) The contracting officer may ask the ACO to complete the forms as 
part of field pricing support.
    (b) When the Weighted Guidelines Method is used, completion of the 
DD Form 1861 requires information not included on the Form CASB-CMF, 
i.e., distribution percentages of land, building, and equipment for the 
business unit performing the contract. Choose the most practical method 
for obtaining this information, for example--
    (1) Contract administration offices could obtain the information 
through the process used to establish factors for facilities capital 
cost of money or could establish advance agreements on distribution 
percentages for inclusion in field pricing reports;
    (2) The corporate ACO could obtain distribution percentages; or
    (3) The contracting officer could request the information through a 
solicitation provision.

    Subpart 230.71_Facilities Capital Employed for Facilities Under 
                              Construction



Sec. 230.7100  Definitions.

    (a) Intangible capital asset is an asset that has no physical 
substance, has more than minimal value, and is expected to be held by an 
enterprise for continued use or possession beyond the current accounting 
period for the benefit it yields.
    (b) Tangible capital asset is an asset that has physical substance, 
more than minimal value, and is expected to be held by an enterprise for 
continued use or possession beyond the current accounting period for the 
service it yields.
    (c) Cost of money rate is either--
    (1) The interest rate determined by the Secretary of the Treasury 
under Public Law 92-41 (85 Stat. 97); or
    (2) The time-weighted average of the interest rate for each cost 
accounting period during which the asset is being constructed, 
fabricated, or developed.

[[Page 214]]

    (d) Representative investment is the calculated amount considered 
invested by the contractor during the cost accounting period to 
construct, fabricate, or develop the asset.



Sec. 230.7101  Calculations.



Sec. 230.7101-1  Cost of money.

    (a) The interest rate in 230.7100(c)(1) is established semi-annually 
and is published in the Federal Register during the fourth week of 
December and June.
    (b) To calculate the time-weighted average interest rate--
    (1) Multiply the various rates in effect during the months of 
construction by the number of months each rate was in effect; and
    (2) Divide the sum of the products by the total number of months in 
which the rates were experienced.



Sec. 230.7101-2  Representative investment.

    (a) The calculation of the representative investment requires 
consideration of the rate or expenditure pattern of the costs to 
construct, fabricate, or develop a capital asset.
    (b) If a majority of the costs were incurred toward the beginning, 
middle, or end of the cost accounting period, the contractor shall 
either--
    (1) Determine a representative investment amount for the cost 
accounting period by calculating the average of the month-end balances 
for that cost accounting period; or
    (2) Treat month-end balances as individual representative investment 
amounts.
    (c) If the costs were incurred in a fairly uniform expenditure 
pattern throughout the construction, fabrication, or development period, 
the contractor may--
    (1) Determine a representative investment amount for the cost 
accounting period by averaging the beginning and ending balances of the 
construction, fabrication, or development cost account for the cost 
accounting period; or
    (2) Treat month-end balances as individual representative investment 
amounts.



Sec. 230.7102  Determining imputed cost of money.

    (a) Determine the imputed cost of money for an asset under 
construction, fabrication, or development by applying a cost of money 
rate (see 230.7101-1) to the representative investment amount (see 
230.7101-2).
    (1) When a representative investment amount is determined for a cost 
accounting period in accordance with 230.7101-2(b)(1) or 230.7101-
2(c)(1), the cost of money will be the time-weighted average rate.
    (2) When a monthly representative investment amount is used in 
accordance with 230.7101-2(b)(2) or 230.7101-2(c)(2), the cost of money 
will be the interest rate in effect each month. (Under this method, the 
cost of money is determined monthly and the total for the cost 
accounting period is the sum of the monthly amounts.)
    (b) The imputed cost of money will be capitalized only once in any 
cost accounting period, either at the end of the period or at the end of 
the construction, fabrication, or development period, whichever comes 
first.
    (c) When the construction of an asset takes more than one cost 
accounting period, the cost of money capitalized for the first cost 
accounting period will be included in determining the representative 
investment amount for any future cost accounting periods.



Sec. 230.7103  Preaward capital employed application.

    An offset to the profit objectives as set forth in FAR 15.404-4 is 
not required for CAS 417 cost of money.

[56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998]

            PART 231_CONTRACT COST PRINCIPLES AND PROCEDURES

                       Subpart 231.1_Applicability

Sec.

Sec. 231.100 Scope of subpart.

Sec. 231.100-70 Contract clause.

          Subpart 231.2_Contracts With Commercial Organizations


Sec. 231.205 Selected costs.

Sec. 231.205-6 Compensation for personal services.

[[Page 215]]


Sec. 231.205-18 Independent research and development and bid and 
          proposal costs.

Sec. 231.205-22 Legislative lobbying costs.

Sec. 231.205-70 External restructuring costs.

          Subpart 231.3_Contracts With Educational Institutions


Sec. 231.303 Requirements.

  Subpart 231.6_Contracts With State, Local, and Federally Recognized 
                        Indian Tribal Governments


Sec. 231.603 Requirements.

          Subpart 231.7_Contracts With Nonprofit Organizations


Sec. 231.703 Requirements.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36408, July 31, 1991, unless otherwise noted.

                       Subpart 231.1_Applicability



Sec. 231.100  Scope of subpart.



Sec. 231.100-70  Contract clause.

    Use the clause at 252.231-7000, Supplemental Cost Principles, in all 
solicitations and contracts which are subject to the principles and 
procedures described in FAR subpart 31.1, 31.2, 31.6, or 31.7.

[59 FR 27672, May 27, 1994]

          Subpart 231.2_Contracts With Commercial Organizations



Sec. 231.205  Selected costs.



Sec. 231.205-6  Compensation for personal services.

    (f)(1) In accordance with Section 8122 of Pub. L. 104-61, and 
similar sections in subsequent Defense appropriations acts, costs for 
bonuses or other payments in excess of the normal salary paid by the 
contractor to an employee, that are part of restructuring costs 
associated with a business combination, are unallowable under DoD 
contracts funded by fiscal year 1996 or subsequent appropriations. This 
limitation does not apply to severance payments or early retirement 
incentive payments. (See 231.205-70(b) for the definitions of ``business 
combination'' and ``restructuring costs.'')

[57 FR 53600, Nov. 12, 1992, as amended at 58 FR 28469, May 13, 1993; 60 
FR 2331, Jan. 9, 1995; 60 FR 61598, Nov. 30, 1995; 61 FR 7077, Feb. 26, 
1996; 61 FR 36306, July 10, 1996; 61 FR 50454, Sept. 26, 1996; 61 FR 
58490, Nov. 15, 1996; 61 FR 65479, Dec. 13, 1996; 62 FR 63036, Nov. 26, 
1997; 63 FR 14641, Mar. 26, 1998]



Sec. 231.205-18  Independent research and development and bid and 
          proposal costs.

    (a) Definitions. As used in this subsection--
    (i) Covered contract means a DoD prime contract for an amount 
exceeding the simplified acquisition threshold, except for a fixed-price 
contract without cost incentives. The term also includes a subcontract 
for an amount exceeding the simplified acquisition threshold, except for 
a fixed-price subcontract without cost incentives under such a prime 
contract.
    (ii) Covered segment means a product division of the contractor that 
allocated more than $1,100,000 in independent research and development 
and bid and proposal (IR&D/B&P) costs to covered contracts during the 
preceding fiscal year. In the case of a contractor that has no product 
divisions, the term means that contractor as a whole. A product division 
of the contractor that allocated less than $1,100,000 in IR&D/B&P costs 
to covered contracts during the preceding fiscal year is not subject to 
the limitations in paragraph (c) of this subsection.
    (iii) Major contractor means any contractor whose covered segments 
allocated a total of more than $11,000,000 in IR&D/B&P costs to covered 
contracts during the preceding fiscal year. For purposes of calculating 
the dollar threshold amounts to determine whether a contractor meets the 
definition of ``major contractor,'' do not include contractor segments 
allocating less than $1,100,000 of IR&D/B&P costs to covered contracts 
during the preceding fiscal year.
    (c) Allowability.
    (i) Departments/agencies shall not supplement this regulation in any 
way that limits IR&D/B&P cost allowability.

[[Page 216]]

    (ii) See 225.7303-2(c) for allowability provisions affecting foreign 
military sale contracts.
    (iii) For major contractors, the following limitations apply:
    (A) The amount of IR&D/B&P costs allowable under DoD contracts shall 
not exceed the lesser of--
    (1) Such contracts' allocable share of total incurred IR&D/B&O 
costs; or
    (2) The amount of incurred IR&D/B&P costs for projects having 
potential interest to DoD.
    (B) Allowable IR&D/B&P costs are limited to those for projects that 
are of potential interest to DoD, including activities intended to 
accomplish any of the following:
    (1) Enable superior performance of future U.S. weapon systems and 
components.
    (2) Reduce acquisition costs and life-cycle costs of military 
systems.
    (3) Strengthen the defense industrial and technology base of the 
United States.
    (4) Enhance the industrial competitiveness of the United States.
    (5) Promote the development of technologies identified as critical 
under 10 U.S.C. 2522.
    (6) Increase the development and promotion of efficient and 
effective applications of dual-use technologies.
    (7) Provide efficient and effective technologies for achieving such 
environmental benefits as: Improved environmental data gathering, 
environmental cleanup and restoration, pollution reduction in 
manufacturing, environmental conservation, and environmentally safe 
management of facilities.
    (iv) For major contractors, the cognizant administrative contracting 
officer (ACO) or corporate ACO shall--
    (A) Determine whether IR&D/B&P projects are of potential interest to 
DoD; and
    (B) Provide the results of the determination to the contractor.
    (v) The cognizant contract administration office shall furnish 
contractors with guidance on financial information needed to support 
IR&D/B&P costs and on technical information needed from major 
contractors to support the potential interest to DoD determination (also 
see 242.771-3).

[64 FR 8729, Feb. 23, 1999]



Sec. 231.205-22  Legislative lobbying costs.

    (a) Costs associated with preparing any material, report, list, or 
analysis on the actual or projected economic or employment impact in a 
particular State or congressional district of an acquisition program for 
which all research, development, testing, and evaluation has not been 
completed also are unallowable (10 U.S.C. 2249).

[69 FR 63332, Nov. 1, 2004]



Sec. 231.205-70  External restructuring costs.

    (a) Scope. This subsection--
    (1) Prescribes policies and procedures for allowing contractor 
external restructuring costs when savings would result for DoD; and
    (2) Implements 10 U.S.C. 2325.
    (b) Definitions. As used in this subsection:
    (1) Business combination means a transaction whereby assets or 
operations of two or more companies not previously under common 
ownership or control are combined, whether by merger, acquisition, or 
sale/purchase of assets.
    (2) External restructuring activities means restructuring activities 
occurring after a business combination that affect the operations of 
companies not previously under common ownership or control. They do not 
include restructuring activities occurring after a business combination 
that affect the operations of only one of the companies not previously 
under common ownership or control, or, when there has been no business 
combination, restructuring activities undertaken within one company. 
External restructuring activities are a direct outgrowth of a business 
combination. They normally will be initiated within 3 years of the 
business combination.
    (3) Restructuring activities means nonroutine, nonrecurring, or 
extraordinary activities to combine facilities, operations, or 
workforce, in order to eliminate redundant capabilities, improve future 
operations, and reduce overall costs. Restructuring activities do not

[[Page 217]]

include routine or ongoing repositionings and redeployments of a 
contractor's productive facilities or workforce (e.g., normal plant 
rearrangement or employee relocation), nor do they include other routine 
or ordinary activities charged as indirect costs that would otherwise 
have been incurred (e.g., planning and analysis, contract administration 
and oversight, or recurring financial and administrative support).
    (4) Restructuring costs means the costs, including both direct and 
indirect, of restructuring activities. Restructuring costs that may be 
allowed include, but are not limited to, severance pay for employees, 
early retirement incentive payments for employees, employee retraining 
costs, relocation expense for retained employees, and relocation and 
rearrangement of plant and equipment. For purposes of this definition, 
if restructuring costs associated with external restructuring activities 
allocated to DoD contracts are less than $2.5 million, the costs shall 
not be subject to the audit, review, and determination requirements of 
paragraph (c)(4) of this subsection; instead, the normal rules for 
determining cost allowability in accordance with FAR part 31 shall 
apply.
    (5) Restructuring savings means cost reductions, including both 
direct and indirect cost reductions, that result from restructuring 
activities. Reassignments of cost to future periods are not 
restructuring savings.
    (c) Limitations on cost allowability. Restructuring costs associated 
with external restructuring activities shall not be allowed unless--
    (1) Such costs are allowable in accordance with FAR part 31 and 
DFARS part 231;
    (2) An audit of projected restructuring costs and restructuring 
savings is performed;
    (3) The cognizant administrative contracting officer (ACO) reviews 
the audit report and the projected costs and projected savings, and 
negotiates an advance agreement in accordance with paragraph (d) of this 
subsection; and
    (4)(i) The official designated in paragraph (c)(4)(ii) of this 
subsection determines in writing that the audited projected savings, on 
a present value basis, for DoD resulting from the restructuring will 
exceed either--
    (A) The costs allowed by a factor of at least two to one; or
    (B) The costs allowed, and the business combination will result in 
the preservation of a critical capability that might otherwise be lost 
to DoD.
    (ii)(A) If the amount of restructuring costs is expected to exceed 
$25 million over a 5-year period, the designated official is the Under 
Secretary of Defense (Acquisition, Technology, and Logistics) or the 
Principal Deputy. This authority may not be delegated below the level of 
an Assistant Secretary of Defense.
    (B) For all other cases, the designated official is the Director of 
the Defense Contract Management Agency. The Director may not delegate 
this authority.
    (d) Procedures and ACO responsibilities. As soon as it is known that 
the contractor will incur restructuring costs for external restructuring 
activities, the cognizant ACO shall follow the procedures at PGI 
231.205-70(d).
    (e) Information needed to obtain a determination. (1) The novation 
agreement (if one is required).
    (2) The contractor's restructuring proposal.
    (3) The proposed advance agreement.
    (4) The audit report.
    (5) Any other pertinent information.
    (6) The cognizant ACO's recommendation for a determination. This 
recommendation must clearly indicate one of the following, consistent 
with paragraph (c)(4)(i) of this subsection:
    (i) The audited projected savings for DoD will exceed the costs 
allowed by a factor of at least two to one on a present value basis.
    (ii) The business combination will result in the preservation of a 
critical capability that might otherwise be lost to DoD, and the audited 
projected savings for DoD will exceed the costs allowed on a present 
value basis.
    (f) Contracting officer responsibilities. (1) The contracting 
officer, in consultation with the cognizant ACO, should consider 
including a repricing clause in noncompetitive fixed-price contracts 
that are negotiated during the period between--

[[Page 218]]

    (i) The time a business combination is announced; and
    (ii) The time the contractor's forward pricing rates are adjusted to 
reflect the impact of restructuring.
    (2) The decision to use a repricing clause will depend upon the 
particular circumstances involved, including--
    (i) When the restructuring will take place;
    (ii) When restructuring savings will begin to be realized;
    (iii) The contract performance period;
    (iv) Whether the contracting parties are able to make a reasonable 
estimate of the impact of restructuring on the contract; and
    (v) The size of the potential dollar impact of restructuring on the 
contract.
    (3) If the contracting officer decides to use a repricing clause, 
the clause must provide for a downward-only price adjustment to ensure 
that DoD receives its appropriate share of restructuring net savings.

[63 FR 7309, Feb. 13, 1998; 63 FR 12862, Mar. 16, 1998, as amended at 64 
FR 18828, Apr. 16, 1999; 65 FR 39705, June 27, 2000; 68 FR 7440, Feb. 
14, 2003; 69 FR 63332, Nov. 1, 2004; 70 FR 43075, July 26, 2005]

          Subpart 231.3_Contracts With Educational Institutions



Sec. 231.303  Requirements.

    (1) Pursuant to section 841 of the National Defense Authorization 
Act for Fiscal Year 1994 (Pub. L. 103-160), no limitation may be placed 
on the reimbursement of otherwise allowable indirect costs incurred by 
an institution of higher education under a DoD contract awarded on or 
after November 30, 1993, unless that same limitation is applied 
uniformly to all other organizations performing similar work under DoD 
contracts. The 26 percent limitation imposed on administrative indirect 
costs by OMB Circular No. A-21 shall not be applied to DoD contracts 
awarded on or after November 30, 1993, to institutions of higher 
education because the same limitation is not applied to other 
organizations performing similar work.
    (2) The cognizant administrative contracting officer may waive the 
prohibition in 231.303(1) if the governing body of the institution of 
higher education requests the waiver to simplify the institution's 
overall management of DoD cost reimbursements under DoD contracts.
    (3) Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are 
unallowable.

[59 FR 26144, May 19, 1994, as amended at 60 FR 2331, Jan. 9, 1995; 61 
FR 36306, July 10, 1996; 62 FR 47155, Sept. 8, 1997; 63 FR 14641, Mar. 
26, 1998]

  Subpart 231.6_Contracts With State, Local, and Federally Recognized 
                        Indian Tribal Governments



Sec. 231.603  Requirements.

    Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are 
unallowable.

[61 FR 36306, July 10, 1996, as amended at 62 FR 47155, Sept. 8, 1997; 
63 FR 14641, Mar. 26, 1998]

          Subpart 231.7_Contracts With Nonprofit Organizations



Sec. 231.703  Requirements.

    Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are 
unallowable.

[61 FR 36306, July 10, 1996, as amended at 62 FR 47155, Sept. 8, 1997; 
63 FR 14641, Mar. 26, 1998]

                       PART 232_CONTRACT FINANCING

Sec.

Sec. 232.001 Definitions.

Sec. 232.006 Reduction or suspension of contract payments upon finding 
          of fraud.

Sec. 232.006-5 Reporting.

Sec. 232.007 Contract financing payments.

Sec. 232.070 Responsibilities.

Sec. 232.071 [Reserved]

Sec. 232.072 Financial responsibility of contractors.

Sec. 232.072-1 Required financial reviews.

Sec. 232.072-2 Appropriate information.

Sec. 232.072-3 Cash flow forecasts.

          Subpart 232.1_Non-Commercial Item Purchase Financing


Sec. 232.102 Description of contract financing methods.

Sec. 232.102-70 Provisional delivery payments.

Sec. 232.111 Contract clauses for non-commercial purchases.

[[Page 219]]

            Subpart 232.2_Commercial Item Purchase Financing


Sec. 232.202-4 Security for Government financing.

Sec. 232.206 Solicitation provisions and contract clauses.

          Subpart 232.3_Loan Guarantees for Defense Production


Sec. 232.302 Authority.

         Subpart 232.4_Advance Payments for Non-Commercial Items


Sec. 232.404 Exclusions.

Sec. 232.409 Contracting officer action.

Sec. 232.409-1 Recommendation for approval.

Sec. 232.410 Findings, determination, and authorization.

Sec. 232.412 Contract clause.

Sec. 232.412-70 Additional clauses.

Sec. 232.470 Advance payment pool.

             Subpart 232.5_Progress Payments Based on Costs


Sec. 232.501 General.

Sec. 232.501-1 Customary progress payment rates.

Sec. 232.501-2 Unusual progress payments.

Sec. 232.501-3 Contract price.

Sec. 232.502 Preaward matters.

Sec. 232.502-1 Use of customary progress payments.

Sec. 232.502-4 Contract clauses.

Sec. 232.502-4-70 Additional clauses.

Sec. 232.503 Postaward matters.

Sec. 232.503-6 Suspension or reduction of payments.

Sec. 232.503-15 Application of Government title terms.

                      Subpart 232.6_Contract Debts


Sec. 232.605 Responsibilities and cooperation among Government 
          officials.

Sec. 232.606 Debt determination and collection.

Sec. 232.610 Demand for payment of contract debt.

Sec. 232.616 Compromise actions.

Sec. 232.617 Contract clause.

Sec. 232.670 Transfer of responsibility for debt collection.

Sec. 232.671 Bankruptcy reporting.

                     Subpart 232.7_Contract Funding


Sec. 232.702 Policy.

Sec. 232.703 Contract funding requirements.

Sec. 232.703-1 General.

Sec. 232.703-3 Contracts crossing fiscal years.

Sec. 232.703-70 Military construction appropriations act restriction.

Sec. 232.704 Limitation of cost or funds.

Sec. 232.704-70 Incrementally funded fixed-price contracts.

Sec. 232.705 Contract clauses.

Sec. 232.705-70 Clause for limitation of Government's obligation.

                   Subpart 232.8_Assignment of Claims


Sec. 232.803 Policies.

Sec. 232.805 Procedure.

Sec. 232.806 Contract clause.

                      Subpart 232.9_Prompt Payment


Sec. 232.903 Responsibilities.

Sec. 232.904 Determining payment due dates.

Sec. 232.906 Making payments.

                Subpart 232.10_Performance-Based Payments


Sec. 232.1001 Policy.

Sec. 232.1004 Procedure.

                Subpart 232.11_Electronic Funds Transfer


Sec. 232.1110 Solicitation provision and contract clauses.

 Subpart 232.70_Electronic Submission and Processing of Payment Requests


Sec. 232.7000 Scope of subpart.

Sec. 232.7001 Definitions.

Sec. 232.7002 Policy.

Sec. 232.7003 Procedures.

Sec. 232.7004 Contract clause.

               Subpart 232.71_Levies on Contract Payments


Sec. 232.7100 Scope of subpart.

Sec. 232.7101 Policy and procedures.

Sec. 232.7102 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36409, July 31, 1991, unless otherwise noted.



Sec. 232.001  Definitions.

    Incremental funding means the partial funding of a contract or an 
exercised option, with additional funds anticipated to be provided at a 
later time.

[71 FR 18673, Apr. 12, 2006]



Sec. 232.006  Reduction or suspension of contract payments upon finding 
          of fraud.



Sec. 232.006-5  Reporting.

    Departments and agencies in accordance with department/agency 
procedures, shall prepare and submit to the Under Secretary of Defense 
(Acquisition, Technology, and Logistics),

[[Page 220]]

through the Director of Defense Procurement and Acquisition Policy, 
annual reports (Report Control Symbol DD-AT&L(A) 1891) containing the 
information required by FAR 32.006-5.

[63 FR 11535, Mar. 9, 1998, as amended at 65 FR 39705, June 27, 2000; 68 
FR 7440, Feb. 14, 2003]



Sec. 232.007  Contract financing payments.

    (a) DoD policy is to make contract financing payments as quickly as 
possible. Generally, the contracting officer shall insert the standard 
due dates of 7 days for progress payments, and 14 days for performance-
based payments and interim payments on cost-type contracts, in the 
appropriate paragraphs of the respective payment clauses. For interim 
payments on cost-reimbursement contracts for services, see 
232.906(a)(i).
    (b) The contracting officer should coordinate contract financing 
payment terms with offices that will be involved in the payment process 
to ensure that specified terms can be met. Where justified, the 
contracting officer may insert a due date greater than, but not less 
than, the standard. In determining payment terms, consider--
    (i) Geographical separation;
    (ii) Workload;
    (iii) Contractor ability to submit a proper request; and
    (iv) Other factors that could affect timing of payment.

[70 FR 75412, Dec. 20, 2005]



Sec. 232.070  Responsibilities.

    (a) The Director of Defense Procurement and Acquisition Policy, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) (OUSD(AT&L)DPAP) is responsible for ensuring uniform 
administration of DoD contract financing, including DoD contract 
financing policies and important related procedures. Agency discretion 
under FAR part 32 is at the DoD level and is not delegated to the 
departments and agencies. Proposals by the departments and agencies, to 
exercise agency discretion, shall be submitted to OUSD(AT&L)DPAP.
    (b) Departments and agencies are responsible for their day-to-day 
contract financing operations. Refer specific cases involving financing 
policy or important procedural issues to OUSD(AT&L)DPAP for 
consideration through the department/agency Contract Finance Committee 
members (also see Subpart 204.1 for deviation request and approval 
procedures).
    (c) See PGI 232.070(c) for information on department/agency contract 
financing offices.

[63 FR 11535, Mar. 9, 1998, as amended at 65 FR 39705, June 27, 2000; 68 
FR 7440, Feb. 14, 2003; 70 FR 75412, Dec. 20, 2005]



Sec. 232.071  [Reserved]



Sec. 232.072  Financial responsibility of contractors.

    Use the policies and procedures in this section in determining the 
financial capability of current or prospective contractors.

[63 FR 11535, Mar. 9, 1998]



Sec. 232.072-1  Required financial reviews.

    The contracting officer shall perform a financial review when the 
contracting officer does not otherwise have sufficient information to 
make a positive determination of financial responsibility. In addition, 
the contracting officer shall consider performing a financial review--
    (a) Prior to award of a contract, when--
    (1) The contractor is on a list requiring preaward clearance or 
other special clearance before award;
    (2) The contractor is listed on the Consolidated List of Contractors 
Indebted to the Government (Hold-Up List), or is otherwise known to be 
indebted to the Government;
    (3) The contractor may receive Government assets such as contract 
financing payments or Government property;
    (4) The contractor is experiencing performance difficulties on other 
work; or
    (5) The contractor is a new company or a new supplier of the item.
    (b) At periodic intervals after award of a contract, when--
    (1) Any of the conditions in paragraphs (a)(2) through (a)(5) of 
this subsection are applicable; or
    (2) There is any other reason to question the contractor's ability 
to finance

[[Page 221]]

performance and completion of the contract.

[63 FR 11535, Mar. 9, 1998]



Sec. 232.072-2  Appropriate information.

    (a) The contracting officer shall obtain the type and depth of 
financial and other information that is required to establish a 
contractor's financial capability or disclose a contractor's financial 
condition. While the contracting officer should not request information 
that is not necessary for protection for the Government's interests, the 
contracting officer must insist upon obtaining the information that is 
necessary. The unwillingness or inability of a contractor to present 
reasonably requested information in a timely manner, especially 
information that a prudent business person would be expected to have and 
to use in the professional management of a business, may be a material 
fact in the determination of the contractor's responsibility and 
prospects for contract completion.
    (b) The contracting officer shall obtain the following information 
to the extent required to protect the Government's interest. In 
addition, if the contracting officer concludes that information not 
listed in paragraphs (b)(1) through (b)(10) of this subsection is 
required to comply with 232.072-1, that information should be requested. 
The information must be for the person(s) who are legally liable for 
contract performance. If the contractor is not a corporation, the 
contracting officer shall obtain the required information for each 
individual/joint venturer/partner:
    (1) Balance sheet and income statement--
    (i) For the current fiscal year (interim);
    (ii) For the most recent fiscal year and, preferably, for the 2 
preceding fiscal years. These should be certified by an independent 
public accountant or by an appropriate officer of the firm; and
    (iii) Forecasted for each fiscal year for the remainder of the 
period of contract performance.
    (2) Summary history of the contractor and its principal managers, 
disclosing any previous insolvencies--corporate or personal, and 
describing its products or services.
    (3) Statement of all affiliations disclosing--
    (i) Material financial interests of the contractor;
    (ii) Material financial interests in the contractor;
    (iii) Material affiliations of owners, officers, directors, major 
stockholders; and
    (iv) The major stockholders if the contractor is not a widely-
traded, publicly-held corporation.
    (4) Statement of all forms of compensation to each officer, manager, 
partner, joint venturer, or proprietor, as appropriate--
    (i) Planned for the current year;
    (ii) Paid during the past 2 years; and
    (iii) Deferred to future periods.
    (5) Business base and forecast that--
    (i) Shows, by significant markets, existing contracts and 
outstanding offers, including those under negotiation; and
    (ii) Is reconcilable to indirect cost rate projections.
    (6) Cash forecast for the duration of the contract (see 232.072-3).
    (7) Financing arrangement information that discloses--
    (i) Availability of cash to finance contract performance;
    (ii) Contractor's exposure to financial crisis from creditor's 
demands;
    (iii) Degree to which credit security provisions could conflict with 
Government title terms under contract financing;
    (iv) Clearly stated confirmations of credit with no unacceptable 
qualifications;
    (v) Unambiguous written agreement by a creditor if credit 
arrangements include deferred trade payments or creditor subordinations/
repayment suspensions.
    (8) Statement of all state, local, and Federal tax accounts, 
including special mandatory contributions, e.g., environmental 
superfund.
    (9) Description and explanation of the financial effect of issues 
such as--
    (i) Leases, deferred purchase arrangements, or patent or royalty 
arrangements;
    (ii) Insurance, when relevant to the contract;

[[Page 222]]

    (iii) Contemplated capital expenditures, changes in equity, or 
contractor debt load;
    (iv) Pending claims either by or against the contractor;
    (v) Contingent liabilities such as guarantees, litigation, 
environmental, or product liabilities;
    (vi) Validity of accounts receivable and actual value of inventory, 
as assets; and
    (vii) Status and aging of accounts payable.
    (10) Significant ratios such as--
    (i) Inventory to annual sales;
    (ii) Inventory to current assets;
    (iii) Liquid assets to current assets;
    (iv) Liquid assets to current liabilities;
    (v) Current assets to current liabilities; and
    (vi) Net worth to net debt.

[63 FR 11535, Mar. 9, 1998]



Sec. 232.072-3  Cash flow forecasts.

    (a) A contractor must be able to sustain a sufficient cash flow to 
perform the contract. When there is doubt regarding the sufficiency of a 
contractor's cash flow, the contracting officer should require the 
contractor to submit a cash flow forecast covering the duration of the 
contract.
    (b) A contractor's inability of refusal to prepare and provide cash 
flow forecasts or to reconcile actual cash flow with previous forecasts 
is a strong indicator of serious managerial deficiencies or potential 
contract cost or performance problems.
    (c) Single or one-time cash flow forecasts are of limited 
forecasting power. As such, they should be limited to preaward survey 
situations. Reliability of cash flow forecasts can be established only 
by comparing a series of previous actual cash flows with the 
corresponding forecasts and examining the causes of any differences.
    (d) Cash flow forecasts must--
    (1) Show the origin and use of all material amounts of cash within 
the entire business unit responsible for contract performance, period by 
period, for the length of the contract (or until the risk of a cash 
crisis ends); and
    (2) Provide an audit trail to the data and assumptions used to 
prepare it.
    (e) Cash flow forecasts can be no more reliable than the assumptions 
on which they are based. Most important of these assumptions are--
    (1) Estimated amounts and timing of purchases and payments for 
materials, parts, components, subassemblies, and services;
    (2) Estimated amounts and timing of payments of purchase or 
production of capital assets, test facilities, and tooling;
    (3) Amounts and timing of fixed cash charges such as debt 
installments, interest, rentals, taxes, and indirect costs;
    (4) Estimated amounts and timing of payments for projected labor, 
both direct and indirect;
    (5) Reasonableness of projected manufacturing and production 
schedules;
    (6) Estimated amounts and timing of billings to customers (including 
progress payments), and customer payments;
    (7) Estimated amounts and timing of cash receipts from lenders or 
other credit sources, and liquidation of loans; and
    (8) Estimated amount and timing of cash receipt from other sources.
    (f) The contracting officer should review the assumptions underlying 
the cash flow forecasts. In determining whether the assumptions are 
reasonable and realistic, the contracting officer should consult with--
    (1) The contractor;
    (2) Government personnel in the areas of finance, engineering, 
production, cost, and price analysis; or
    (3) Prospective supply, subcontract, and loan or credit sources.

[63 FR 11536, Mar. 9, 1998]

          Subpart 232.1_Non-Commercial Item Purchase Financing

    Source: 63 FR 11536, Mar. 9, 1998, unless otherwise noted.



Sec. 232.102  Description of contract financing methods.

    (e)(2) Progress payments based on percentage or stage of completion 
are authorized only for contracts for construction (as defined in FAR 
36.102),

[[Page 223]]

shipbuilding, and ship conversion, alteration, or repair. However, 
percentage or state of completion methods of measuring contractor 
performance may be used for performance-based payments in accordance 
with FAR Subpart 32.10.



Sec. 232.102-70  Provisional delivery payments.

    (a) The contracting officer may establish provisional delivery 
payments to pay contractors for the costs of supplies and services 
delivered to and accepted by the Government under the following contract 
actions if undefinitized:
    (1) Letter contracts contemplating a fixed-price contract.
    (2) Orders under basic ordering agreements.
    (3) Spares provisioning documents annexed to contracts.
    (4) Unpriced equitable adjustments on fixed-price contracts.
    (5) Orders under indefinite-delivery contracts.
    (b) Provisional delivery payments shall be--
    (1) Used sparingly;
    (2) Priced conservatively; and
    (3) Reduced by liquidating previous progress payments in accordance 
with the Progress Payments clause.
    (c) Provisional delivery payments shall not--
    (1) Include profit;
    (2) Exceed funds obligated for the undefinitized contract action; or
    (3) Influence the definitized contract price.



Sec. 232.111  Contract clauses for non-commercial purchases.

    (b) Use the clause at FAR 52.232-7, Payments under Time-and-
Materials and Labor-Hour Contracts, with 252.232-7006, Alternate A, in 
solicitations and contracts when a time-and-materials or labor-hour 
contract is contemplated.
    (i) Alternate A permits the administrative contracting officer (ACO) 
to withhold 5 percent of the amounts due until a reserve is set aside in 
an amount the ACO considers to be necessary, but not to exceed $50,000, 
to protect the Government's interests.
    (ii) Normally, there should be no need to withhold payment for a 
contractor with a record of timely submittal of the release discharging 
the Government from all liabilities, obligations, and claims.
    (iii) If the ACO determines that it is necessary to withhold payment 
to protect the Government's interests, the ACO shall unilaterally issue 
a modification requiring the contractor to withhold 5 percent of amounts 
due, up to a maximum of $50,000. The ACO shall ensure that the 
modification specifies the percentage and total amount of the withhold.

[68 FR 69632, Dec. 15, 2003]

            Subpart 232.2_Commercial Item Purchase Financing

    Source: 63 FR 11537, Mar. 9, 1998, unless otherwise noted.



Sec. 232.202-4  Security for Government financing.

    (a)(2) When determining whether an offeror's financial condition is 
adequate security, see 232.072-2 and 232.072-3 for guidance. It should 
be noted that an offeror's financial condition may be sufficient to make 
the contractor responsible for award purposes, but may not be adequate 
security for commercial contract financing.



Sec. 232.206  Solicitation provisions and contract clauses.

    (f) Prompt payment for commercial purchase payments. The contracting 
officer shall incorporate the following standard prompt payment terms 
for commercial item contract financing:
    (i) Commercial advance payments: The contractor entitlement date 
specified in the contract, or 30 days after receipt by the designated 
billing office of a proper request for payment, whichever is later.
    (ii) Commercial interim payments: The contractor entitlement date 
specified in the contract, or 14 days after receipt by the designated 
billing office of a proper request for payment, whichever is later. The 
prompt payment standards for commercial delivery payments shall be the 
same as specified in FAR

[[Page 224]]

Subpart 32.9 for invoice payments for the item delivered.
    (g) Installment payment financing for commercial items. Installment 
payment financing shall not be used for DoD contracts, unless market 
research has established that this form of contract financing is both 
appropriate and customary in the commercial marketplace. When 
installment payment financing is used, the contracting officer shall use 
the ceiling percentage of contract price that is customary in the 
particular marketplace (not to exceed the maximum rate established in 
FAR 52.232-30).

[63 FR 11537, Mar. 9, 1998, as amended at 70 FR 75413, Dec. 20, 2005]

          Subpart 232.3_Loan Guarantees for Defense Production



Sec. 232.302  Authority.

    (a) The use of guaranteed loans as a contract financing mechanism 
requires the availability of certain congressional authority. The DoD 
has not requested such authority in recent years, and none is now 
available.

         Subpart 232.4_Advance Payments for Non-Commercial Items



Sec. 232.404  Exclusions.

    (a)(9) The requirements of FAR subpart 32.4 do not apply to 
advertisements in high school and college publications for military 
recruitment efforts under 10 U.S.C. 503 when the contract cost does not 
exceed $2,500.

[56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005]



Sec. 232.409  Contracting officer action.



Sec. 232.409-1  Recommendation for approval.

    Follow the procedures at PGI 232.409-1 for preparation of the 
documents required by FAR 32.409-1(e) and (f).

[70 FR 75413, Dec. 20, 2005]



Sec. 232.410  Findings, determination, and authorization.

    If an advance payment procedure is used without a special bank 
account, follow the procedures at PGI 232.410.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.412  Contract clause.



Sec. 232.412-70  Additional clauses.

    (a) Use the clause at 252.232-7000, Advance Payment Pool, in any 
contract that will be subject to the terms of an advance payment pool 
agreement with a nonprofit organization or educational institution. 
Normally, use the clause in all cost reimbursement type contracts with 
the organization or institution.
    (b) Use the clause at 252.232-7001, Disposition of Payments, in 
contracts when payments under the contract are to be made by a 
disbursing office not designated in the advance payment pool agreement.
    (c) Use the clause at 252.232-7005, Reimbursement of Subcontractor 
Advance Payments-DoD Pilot Mentor-Protege Program, when advance payments 
will be provided by the contractor to a subcontractor pursuant to an 
approved mentor-protege agreement (See subpart 219.71).

[56 FR 36409, July 31, 1991, as amended at 56 FR 67217, Dec. 30, 1991]



Sec. 232.470  Advance payment pool.

    (a) An advance payment pool agreement--
    (1) Is a means of financing the performance of more than one 
contract held by a single contractor;
    (2) Is especially convenient for the financing of cost-type 
contracts with nonprofit educational or research institutions for 
experimental or research and development work when several contracts 
require financing by advance payments. When appropriate, pooled advance 
payments may also be used to finance other types of contracts held by a 
single contractor; and
    (3) May be established--
    (i) Without regard to the number of appropriations involved;
    (ii) To finance contracts for one or more department(s) or 
contracting activity(ies); or

[[Page 225]]

    (iii) In addition to any other advance payment pool agreement at a 
single contractor location when it is more convenient or otherwise 
preferable to have more than one agreement.

             Subpart 232.5_Progress Payments Based on Costs



Sec. 232.501  General.



Sec. 232.501-1  Customary progress payment rates.

    (a) The customary progress payment rates for DoD contracts, 
including contracts that contain foreign military sales (FMS) 
requirements, are 80 percent for large business concerns, 90 percent for 
small business concerns, and 95 percent for small disadvantaged business 
concerns.

[66 FR 49865, Oct. 1, 2001]



Sec. 232.501-2  Unusual progress payments.

    Follow the procedures at PGI 232.501-2 for approval of unusual 
progress payments.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.501-3  Contract price.

    (b) The contracting officer may approve progress payments when the 
contract price exceeds the funds obligated under the contract, provided 
the contract limits the Government's liability to the lesser of--
    (i) The applicable rate (i.e., the lower of the progress payment 
rate, the liquidation rate, or the loss-ratio adjusted rate); or
    (ii) 100 percent of the funds obligated.

[56 FR 36409, July 31, 1991, as amended at 65 FR 39722, June 27, 2000; 
70 FR 75413, Dec. 20, 2005]



Sec. 232.502  Preaward matters.



Sec. 232.502-1  Use of customary progress payments.

    (b)(1) If the contractor is a small disadvantaged business, progress 
payments may be provided when the contract will involve $50,000 or more.



Sec. 232.502-4-70  Additional clauses.

    (a) Use the clause at 252.232-7002, Progress Payments for Foreign 
Military Sales Acquisitions, in solicitations and contracts that--
    (i) Contain FMS requirements; and
    (ii) Provide for progress payments.
    (b) Use the clause at 252.232-7004, DoD Progress Payment Rates, 
instead of Alternate I of the clause at FAR 52.232-16, if the contractor 
is a small business or small disadvantaged business concern.

[56 FR 36409, July 31, 1991, as amended at 56 FR 67217, Dec. 30, 1991; 
64 FR 8731, Feb. 23, 1999; 65 FR 39722, June 27, 2000; 66 FR 49865, Oct. 
1, 2001]



Sec. 232.503  Postaward matters.



Sec. 232.503-6  Suspension or reduction of payments.

    (b) Contractor noncompliance. See also 242.7503.
    (g) Loss contracts. Use the following loss ratio adjustment 
procedures for making adjustments required by FAR 32.503-6(f) and (g)--
    (i) Except as provided in paragraph (g)(ii) of this subsection, the 
contracting officer must prepare a supplementary analysis of the 
contractor's request for progress payments and calculate the loss ratio 
adjustment using the procedures in FAR 32.503-6(g).
    (ii) The contracting officer may request the contractor to prepare 
the supplementary analysis as an attachment to the progress payment 
request when the contracting officer determines that the contractor's 
methods of estimating the ``Costs to Complete'' are reliable, accurate, 
and not susceptible to improper influences.
    (iii) To maintain an audit trail and permit verification of 
calculations, do not make the loss ratio adjustments by altering or 
replacing data on the contractor's original request for progress payment 
(SF 1443, Contractor's Request for Progress Payment, or computer 
generated equivalent).

[56 FR 36409, July 31, 1991, as amended at 60 FR 29499, June 5, 1995; 65 
FR 39722, June 27, 2000]



Sec. 232.503-15  Application of Government title terms.

    (d) An administrative contracting officer (ACO) determination that 
the contractor's material management and accounting system conforms to 
the

[[Page 226]]

standard at 252.242-7004(e)(7) constitutes the contracting officer 
approval requirement of FAR 32.503-15(d). Prior to granting blanket 
approval of cost transfers between contracts, the ACO should determine 
that--
    (i) The contractor retains records of the transfer activity that 
took place in the prior month;
    (ii) The contractor prepares, at least monthly, a summary of the 
transfer activity that took place in the prior month; and
    (iii) The summary report includes as a minimum, the total number and 
dollar value of transfers.

[56 FR 36409, July 31, 1991, as amended at 57 FR 42632, Sept. 15, 1992; 
70 FR 75413, Dec. 20, 2005]

                      Subpart 232.6_Contract Debts



Sec. 232.605  Responsibilities and cooperation among Government 
          officials.

    (b) Disbursing officers are those officials designated to make 
payments under a contract or to receive payments of amounts due under a 
contract. The disbursing officer is responsible for determining the 
amount and collecting contract debts whenever overpayments or erroneous 
payments have been made. The disbursing officer also has primary 
responsibility when the amounts due and dates for payment are contained 
in the contract, and a copy of the contract has been furnished to the 
disbursing officer with notice to collect as amounts become due.

[56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005]



Sec. 232.606  Debt determination and collection.

    When transferring a case to the contract financing office, follow 
the procedures at PGI 232.606.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.610  Demand for payment of contract debt.

    When issuing a demand for payment of a contract debt, follow the 
procedures at PGI 232.610.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.616  Compromise actions.

    Only the department/agency contract financing offices (see 
232.070(c)) are authorized to compromise debts covered by this subpart.

[56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005]



Sec. 232.617  Contract clause.

    (a) The Director of Defense Procurement and Acquisition Policy, 
Office of the Under Secretary of Defense (Acquisition, Technology, and 
Logistics), may exempt the contracts in FAR 32.617(a)(2) through (5) and 
other contracts, in exceptional circumstances, from the administrative 
interest charges required by this subpart.
    (7) Other exceptions are--
    (A) Contracts for instructions of military or ROTC personnel at 
civilian schools, colleges, and universities;
    (B) Basic agreements with telephone companies for communications 
services and facilities, and purchases under such agreements; and
    (C) Transportation contracts with common carriers for common carrier 
services.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.670  Transfer of responsibility for debt collection.

    Follow the procedures at PGI 232.670 for transferring responsibility 
for debt collection.

[70 FR 75413, Dec. 20, 2005]



Sec. 232.671  Bankruptcy reporting.

    Follow the procedures at PGI 232.671 for bankruptcy reporting.

[70 FR 75413, Dec. 20, 2005]

                     Subpart 232.7_Contract Funding

    Source: 58 FR 46092, Sept. 1, 1993, unless otherwise noted.



Sec. 232.702  Policy.

    Fixed-price contracts shall be fully funded except as permitted by 
232.703-1.

[[Page 227]]



Sec. 232.703  Contract funding requirements.



Sec. 232.703-1  General.

    (1) A fixed-price contract may be incrementally funded only if--
    (i) The contract (excluding any options) or any exercised option--
    (A) Is for severable services;
    (B) Does not exceed one year in length; and
    (C) Is incrementally funded using funds available (unexpired) as of 
the date the funds are obligated; or
    (ii) The contract uses funds available from multiple (two or more) 
fiscal years and--
    (A) The contract is funded with research and development 
appropriations; or
    (B) Congress has otherwise authorized incremental funding.
    (2) An incrementally funded fixed-price contract shall be fully 
funded as soon as funds are available.

[71 FR 18673, Apr. 12, 2006]



Sec. 232.703-3  Contracts crossing fiscal years.

    (b) The contracting officer may enter into a contract, exercise an 
option, or place an order under a contract for severable services for a 
period that begins in one fiscal year and ends in the next fiscal year 
if the period of the contract awarded, option exercised, or order placed 
does not exceed 1 year (10 U.S.C. 2410a).

[64 FR 28110, May 25, 1999]



Sec. 232.703-70  Military construction appropriations act restriction.

    Annual military construction appropriations acts restrict the use of 
funds appropriated by the acts for payments under cost-plus-fixed-fee 
contracts (see 216.306(c)).

[61 FR 7744, Feb. 29, 1996]



Sec. 232.704  Limitation of cost or funds.



Sec. 232.704-70  Incrementally funded fixed-price contracts.

    (a) Upon receipt of the contractor's notice under paragraph (c) of 
the clause at 252.232-7007, Limitation of Government's Obligation, the 
contracting officer shall promptly provide written notice to the 
contractor that the Government is--
    (1) Allotting additional funds for continued performance and 
increasing the Government's limitation of obligation in a specified 
amount;
    (2) Terminating the contract; or
    (3) Considering whether to allot additional funds; and
    (i) The contractor is entitled by the contract terms to stop work 
when the Government's limitation of obligation is reached; and
    (ii) Any costs expended beyond the Government's limitation of 
obligation are at the contractor's risk.
    (b) Upon learning that the contract will receive no further funds, 
the contracting officer shall promptly give the contractor written 
notice of the Government's decision and terminate for the convenience of 
the Government.
    (c) The contracting officer shall ensure that, in accordance with 
paragraph (b) of the clause at 252.232-7007, Limitation of Government's 
Obligation, sufficient funds are allotted to the contract to cover the 
total amount payable to the contractor in the event of termination for 
the convenience of the Government.



Sec. 232.705  Contract clauses.



Sec. 232.705-70  Clause for limitation of Government's obligation.

    Use the clause at 252.232-7007, Limitation of Government's 
Obligation, in solicitations and resultant incrementally funded fixed-
price contracts. The contracting officer may revise the contractor's 
notification period, in paragraph (c) of the clause, from ``ninety'' to 
``thirty'' or ``sixty'' days, as appropriate.

                   Subpart 232.8_Assignment of Claims



Sec. 232.803  Policies.

    (b) Only contracts for personal services may prohibit the assignment 
of claims.
    (d) Pursuant to Section 3737(e) of the Revised Statutes (41 U.S.C. 
15), and in accordance with Presidential delegation dated October 3, 
1995, Secretary of Defense delegation dated February 5, 1996, and Under 
Secretary of Defense

[[Page 228]]

(Acquisition, Technology, and Logistics) delegation dated February 23, 
1996, the Director of Defense Procurement determined on May 10, 1996, 
that a need exists for DoD to agree not to reduce or set off any money 
due or to become due under the contract when the proceeds under the 
contract have been assigned in accordance with the Assignment of Claims 
provision of the contract. This determination was published in the 
Federal Register on June 11, 1996, as required by law. Nevertheless, if 
departments/agencies decide it is in the Government's interests, or if 
the contracting officer makes a determination in accordance with FAR 
32.803(d) concerning a significantly indebted offeror, they may exclude 
the no-setoff commitment.

[56 FR 36409, July 31, 1991, as amended at 61 FR 50454, Sept. 26, 1996; 
65 FR 39706, June 27, 2000]



Sec. 232.805  Procedure.

    (b) The assignee shall forward--
    (i) To the administrative contracting officer (ACO), a true copy of 
the instrument of assignment and an original and three copies of the 
notice of assignment. The ACO shall acknowledge receipt by signing and 
dating all copies of the notice of assignment and shall--
    (A) File the true copy of the instrument of assignment and the 
original of the notice in the contract file;
    (B) Forward two copies of the notice to the disbursing officer of 
the payment office cited in the contract;
    (C) Return a copy of the notice to the assignee; and
    (D) Advise the contracting officer of the assignment.
    (ii) To the surety or sureties, if any, a true copy of the 
instrument of assignment and an original and three copies of the notice 
of assignment. The surety shall return three acknowledged copies of the 
notice to the assignee, who shall forward two copies to the disbursing 
officer designated in the contract.
    (iii) To the disbursing officer of the payment office cited in the 
contract, a true copy of the instrument of assignment and an original 
and one copy of the notice of assignment. The disbursing officer shall 
acknowledge and return to the assignee the copy of the notice and shall 
file the true copy of the instrument and original notice.



Sec. 232.806  Contract clause.

    (a)(1) Use the clause at 252.232-7008, Assignment of Claims 
(Overseas), instead of the clause at FAR 52.232-23, Assignment of 
Claims, in solicitations and contracts when contract performance will be 
in a foreign country.
    (2) Use Alternate I with the clause at FAR 52.232-23, Assignment of 
Claims, unless otherwise authorized under 232.803(d).

[62 FR 34126, June 24, 1997]

                      Subpart 232.9_Prompt Payment



Sec. 232.903  Responsibilities.

    DoD policy is to assist small disadvantaged business concerns by 
paying them as quickly as possible after invoices are received and 
before normal payment due dates established in the contract (see 
232.906(a)).

[70 FR 75413, Dec. 20, 2005]



Sec. 232.904  Determining payment due dates.

    (d) In most cases, Government acceptance or approval can occur 
within the 7-day constructive acceptance period specified in the FAR 
Prompt Payment clauses. Government payment of construction progress 
payments can, in most cases, be made within the 14-day period allowed by 
the Prompt Payment for Construction Contracts clause. While the 
contracting officer may specify a longer period because the period 
specified in the contract is not reasonable or practical, such change 
should be coordinated with the Government offices responsible for 
acceptance or approval and for payment. Reasons for specifying a longer 
period include but are not limited to: the nature of the work or 
supplies or services, inspection or testing requirements, shipping and 
acceptance terms, and resources available at the acceptance activity. A 
constructive acceptance period of less than the cited 7 or 14 days is 
not authorized.

[70 FR 75413, Dec. 20, 2005]

[[Page 229]]



Sec. 232.906  Making payments.

    (a)(i) Generally, the contracting officer shall insert the standard 
due date of 14 days for interim payments on cost-reimbursement contracts 
for services in the clause at FAR 52.232-25, Prompt Payment, when using 
the clause with its Alternate I.
    (ii) The restrictions of FAR 32.906 prohibiting early payment do not 
apply to invoice payments made to small disadvantaged business concerns. 
However, contractors shall not be entitled to interest penalties if the 
Government fails to make early payment.

[70 FR 75413, Dec. 20, 2005]

                Subpart 232.10_Performance-Based Payments

    Source: 63 FR 11537, Mar. 9, 1998, unless otherwise noted.



Sec. 232.1001  Policy.

    (d) The contracting officer shall use the following standard prompt 
payment terms for performance-based payments: The contractor entitlement 
date, if any, specified in the contract, or 14 days after receipt by the 
designated billing office of a proper request for payment, whichever is 
later.



Sec. 232.1004  Procedure.

    (c) Instructions for multiple appropriations. If the contract 
contains foreign military sales requirements, the contracting officer 
shall provide instructions for distribution of the contract financing 
payments to each country's account.

                Subpart 232.11_Electronic Funds Transfer

    Source: 65 FR 46626, July 31, 2000, unless otherwise noted.



Sec. 232.1110  Solicitation provision and contract clauses.

    Use the clause at 252.232-7009, Mandatory Payment by Governmentwide 
Commercial Purchase Card, in solicitations, contracts, and agreements 
when--
    (1) Placement of orders or calls valued at or below the 
micropurchase threshold is anticipated; and
    (2) Payment by Governmentwide commercial purchase card is required 
for orders or calls valued at or below the micropurchase threshold under 
the contract or agreement.

 Subpart 232.70_Electronic Submission and Processing of Payment Requests

    Source: 68 FR 8455, Feb. 21, 2003, unless otherwise noted.



Sec. 232.7000  Scope of subpart.

    This subpart prescribes policies and procedures for submitting and 
processing payment requests in electronic form to comply with 10 U.S.C. 
2227.



Sec. 232.7001  Definitions.

    Electronic form and payment request, as used in this subpart, are 
defined in the clause at 252.232-7003, Electronic Submission of Payment 
Requests.



Sec. 232.7002  Policy.

    (a) Contractors shall submit payment requests in electronic form, 
except for--
    (1) Purchases paid for with a Governmentwide commercial purchase 
card;
    (2) Awards made to foreign vendors for work performed outside the 
United States;
    (3) Classified contracts or purchases (see FAR 4.401) when 
electronic submission and processing of payment requests could 
compromise the safeguarding of classified information or national 
security;
    (4) Contracts awarded by deployed contracting officers in the course 
of military operations, including, but not limited to, contingency 
operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or 
peacekeeping operations as defined in 10 U.S.C. 2302(7), or contracts 
awarded by contracting officers in the conduct of emergency operations, 
such as responses to natural disasters or national or civil emergencies;
    (5) Purchases to support unusual or compelling needs of the type 
described in FAR 6.302-2; and
    (6) Cases where--

[[Page 230]]

    (i) The contractor is unable to submit, or DOD is unable to receive, 
a payment request in electronic form; and
    (ii) The contracting officer, the payment office, the contract 
administration office, and the contractor mutually agree to an 
alternative method.
    (b) DoD officials receiving payment requests in electronic form 
shall process the payment requests in electronic form. Any supporting 
documentation necessary for payment, such as receiving reports, 
contracts, contract modifications, and required certifications, also 
shall be processed in electronic form. Scanned documents are acceptable 
forms for processing supporting documentation.

[68 FR 8455, Feb. 21, 2003, as amended at 68 FR 69630, Dec. 15, 2003]



Sec. 232.7003  Procedures.

    (a) The accepted electronic forms for transmission are--
    (1) Wide Area WorkFlow-Receipt and Acceptance (see Web site--https:/
/wawf.eb.mil);
    (2) Web Invoicing System (see Web site--https://ecweb.dfas.mil); and
    (3) American National Standards Institute (ANSI) X.12 electronic 
data interchange (EDI) formats (see Web site--http://www.X12.org for 
information on EDI formats; see Web site--http://www.dod.mil/dfas/ for 
EDI implementation guides).
    (b) If the payment office and the contract administration office 
concur, the contracting officer may authorize a contractor to submit a 
payment request using an electronic form other than those listed in 
paragraph (a) of this section.

[62 FR 1059, Jan. 8, 1997, as amended at 69 FR 1926, Jan. 13, 2004; 71 
FR 27644, May 12, 2006]



Sec. 232.7004  Contract clause.

    Except as provided in 232.7002(a), use the clause at 252.232-7003, 
Electronic Submission of Payment Requests, in solicitations and 
contracts.

               Subpart 232.71_Levies on Contract Payments

    Source: 70 FR 52032, Sept. 1, 2005, unless otherwise noted.



Sec. 232.7100  Scope of subpart.

    This subpart prescribes policies and procedures concerning the 
effect of levies pursuant to 26 U.S.C. 6331(h) on contract payments. The 
Internal Revenue Service (IRS) is authorized to levy up to 100 percent 
of all payments made under a DoD contract, up to the amount of the tax 
debt.



Sec. 232.7101  Policy and procedures.

    (a) The contracting officer shall require the contractor to--
    (1) Promptly notify the contracting officer when a levy that will 
jeopardize contract performance is imposed on a DoD contract; and
    (2) Advise the contracting officer whether the inability to perform 
may adversely affect national security.
    (b) The contracting officer shall promptly notify the Director, 
Defense Procurement and Acquisition Policy (DPAP), when the contractor's 
inability to perform will adversely affect national security or will 
result in significant additional costs to the Government. Follow the 
procedures at PGI 232.7101(b) for reviewing the contractor's rationale 
and submitting the required notification.
    (c) The Director, DPAP, will promptly review the contractor's 
rationale and will notify the IRS, the contracting officer, and/or the 
payment office in accordance with the procedures at PGI 232.7101(c). The 
contracting officer shall then notify the contractor in accordance with 
paragraph (c) of the clause at 252.232-7010.



Sec. 232.7102  Contract clause.

    Use the clause at 252.232-7010, Levies on Contract Payments, in all 
solicitations and contracts.

                PART 233_PROTESTS, DISPUTES, AND APPEALS

                   Subpart 233.2_Disputes and Appeals

Sec.

Sec. 233.204 Policy.

Sec. 233.204-70 Limitations on payment.

Sec. 233.210 Contracting officer's authority.

Sec. 233.215 Contract clause.

Sec. 233.215-70 Additional contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

[[Page 231]]


    Source: 56 FR 36416, July 31, 1991, unless otherwise noted.

                   Subpart 233.2_Disputes and Appeals



Sec. 233.204  Policy.

    When it would be helpful in reviewing the current claim, the 
contracting officer should get information on claims previously filed by 
the contractor with other contracting officers.



Sec. 233.204-70  Limitations on payment.

    See 10 U.S.C. 2410(b) for limitations on Congressionally directed 
payment of a claim under the Contract Disputes Act of 1978, a request 
for equitable adjustment to contract terms, or a request for relied 
under Pub. L. 85-804.

[63 FR 11537, Mar. 9, 1998]



Sec. 233.210  Contracting officer's authority.

    DFARS 243.105(a) limits contracting officer authority.



Sec. 233.215  Contract clause.

    Use Alternate I of the clause at FAR 52.233-1, Disputes, when--
    (1) The acquisition is for--
    (i) Aircraft
    (ii) Spacecraft and launch vehicles
    (iii) Naval vessels
    (iv) Missile systems
    (v) Tracked combat vehicles
    (vi) Related electronic systems;
    (2) The contracting officer determines that continued performance 
is--
    (i) Vital to the national security, or
    (ii) Vital to the public health and welfare; or
    (3) The head of the contracting activity determines that continued 
performance is necessary pending resolution of any claim that might 
arise under or be related to the contract.

[56 FR 36416, July 31, 1991. Redesignated at 62 FR 34126, June 24, 1997]



Sec. 233.215-70  Additional contract clause.

    Use the clause at 252.233-7001, Choice of Law (Overseas), in 
solicitations and contracts when contract performance will be outside 
the United States and its outlying areas, unless otherwise provided for 
in a government-to-government agreement.

[70 FR 35545, June 21, 2005]

[[Page 232]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

                    PART 234_MAJOR SYSTEM ACQUISITION

Sec.

Sec. 234.003 Responsibilities.

Sec. 234.005 General requirements.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.



Sec. 234.003  Responsibilities.

    DoDD 5000.1, The Defense Acquisition System, and DoDI 5000.2, 
Operation of the Defense Acquisition System, contain the DoD 
implementation of OMB Circular A-109 and OMB Circular A-11.

[70 FR 14575, Mar. 23, 2005]



Sec. 234.005  General requirements.

    See 242.1106(a) for information on the use of earned value 
management systems and the use of cost/schedule status reports.

[70 FR 14575, Mar. 23, 2005]

              PART 235_RESEARCH AND DEVELOPMENT CONTRACTING

Sec.

Sec. 235.001 Definitions.

Sec. 235.006 Contracting methods and contract type.

Sec. 235.006-70 Manufacturing Technology Program.

Sec. 235.010 Scientific and technical reports.

Sec. 235.015-70 Special use allowances for research facilities acquired 
          by educational institutions.

Sec. 235.016 Broad agency announcement.

Sec. 235.017 Federally Funded Research and Development Centers.

Sec. 235.017-1 Sponsoring agreements.

Sec. 235.070 Indemnification against unusually hazardous risks.

Sec. 235.070-1 Indemnification under research and development contracts.

Sec. 235.070-2 Indemnification under contracts involving both research 
          and development and other work.

Sec. 235.070-3 Contract clauses.

Sec. 235.071 Additional contract clauses.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36416, July 31, 1991, unless otherwise noted.



Sec. 235.001  Definitions.

    ``Research and development'' means those efforts described by the 
Research, Development, Test, and Evaluation (RDT&E) budget activity 
definitions found in the DoD Financial Management Regulation (DoD 
7000.14-R), Volume 2B, Chapter 5.

[65 FR 32040, May 22, 2000]



Sec. 235.006  Contracting methods and contract type.

    (b)(i) Do not award a fixed-price type contract for a development 
program effort unless--
    (A) The level of program risk permits realistic pricing;
    (B) The use of a fixed-price type contract permits an equitable and 
sensible allocation of program risk between the Government and the 
contractor; and
    (C) A written determination that the criteria of paragraphs 
(b)(i)(A) and (B) of this section have been met is executed--
    (1) By the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) (USD(AT&L)) for--
    (i) Research and development for non-major systems, if the contract 
is over $25 million;
    (ii) The lead ship of a class; or
    (iii) The development of a major system (as defined in FAR 2.101) or 
subsystem thereof, if the contract is over $25 million; or
    (2) By the contracting officer for any development not covered by 
paragraph (b)(i)(C)(1) of this section.
    (ii) Obtain USD (AT&L) approval of the Government's prenegotiation 
position before negotiations begin, and obtain USD (AT&L) approval of 
the negotiated agreement with the contractor before the agreement is 
executed, for any action that is--
    (A) An increase of more than $250 million in the price or ceiling 
price of a fixed-price type development contract, or a fixed-price type 
contract for the lead ship of a class;
    (B) A reduction in the amount of work under a fixed-price type 
development contract or a fixed-price type contract for the lead ship of 
a class,

[[Page 233]]

when the value of the work deleted is $100 million or more; or
    (C) A repricing of fixed-price type production options to a 
development contract, or a contract for the lead ship of a class, that 
increases the price or ceiling price by more than $250 million for 
equivalent quantities.
    (iii) Notify the USD (AT&L) of an intent not to exercise a fixed-
price production option on a development contract for a major weapon 
system reasonably in advance of the expiration of the option exercise 
period.

[64 FR 18830, Apr. 16, 1999; 64 FR 48459, Sept. 3, 1999, as amended at 
65 FR 39706, June 27, 2000]



Sec. 235.006-70  Manufacturing Technology Program.

    In accordance with 10 U.S.C. 2521(d), for acquisitions under the 
Manufacturing Technology Program--
    (a) Award all contracts using competitive procedures; and
    (b) Include in all solicitations an evaluation factor that addresses 
the extent to which offerors propose to share in the cost of the project 
(see FAR 15.304).

[65 FR 2058, Jan. 13, 2000, as amended at 69 FR 65092, Nov. 10, 2004]



Sec. 235.010  Scientific and technical reports.

    (b) For DoD, the Defense Technical Information Center is responsible 
for collecting all scientific and technical reports. For access to these 
reports, follow the procedures at PGI 235.010(b).

[69 FR 65092, Nov. 10, 2004]



Sec. 235.015-70  Special use allowances for research facilities acquired 
          by educational institutions.

    (a) Definitions. As used in this subsection--
    (1) Research facility means--
    (i) Real property, other than land; and
    (ii) Includes structures, alterations, and improvements, acquired 
for the purpose of conducting scientific research under contracts with 
departments and agencies of the DoD.
    (2) Special use allowance means a negotiated direct or indirect 
allowance--
    (i) For construction or acquisition of buildings, structures, and 
real property, other than land; and
    (ii) Where the allowance is computed at an annual rate exceeding the 
rate which normally would be allowed under FAR subpart 31.3.
    (b) Policy. (1) Educational institutions are to furnish the 
facilities necessary to perform Defense contracts. FAR 31.3 governs how 
much the Government will reimburse the institution for the research 
programs. However, in extraordinary situations, the Government may give 
special use allowances to an educational institution when the 
institution is unable to provide the capital for new laboratories or 
expanded facilities needed for Defense contracts.
    (2) Decisions to provide a special use allowance must be made on a 
case-by-case basis, using the criteria in paragraph (c) of this 
subsection.
    (c) Authorization for special use allowance. The head of a 
contracting activity may approve special use allowances only when all of 
the following conditions are met--
    (1) The research facility is essential to the performance of DoD 
contracts;
    (2) Existing facilities, either Government or nongovernment, cannot 
meet program requirements practically or effectively;
    (3) The proposed agreement for special use allowances is a sound 
business arrangement;
    (4) The Government's furnishing of Government-owned facilities is 
undesirable or impractical; and
    (5) The proposed use of the research facility is to conduct 
essential Government research which requires the new or expanded 
facilities.
    (d) Application of the special use allowance. (1) In negotiating a 
special use allowance--
    (i) Compare the needs of DoD and of the institution for the research 
facility to determine the amount of the special use allowance;
    (ii) Consider rental costs for similar space in the area where the 
research facility is or will be located to establish the annual special 
use allowance;
    (iii) Do not include or allow--
    (A) The costs of land; or
    (B) Interest charges on capital;

[[Page 234]]

    (iv) Do not include maintenance, utilities, or other operational 
costs;
    (v) The period of allowance generally will be--
    (A) At least ten years; or
    (B) A shorter period if the total amount to be allowed is less than 
the construction or acquisition cost for the research facility;
    (vi) Generally, provide for allocation of the special use allowance 
equitably among the Government contracts using the research facility;
    (vii) Special use allowances apply only in the years in which the 
Government has contracts in effect with the institution. However, if in 
any given year there is a reduced level of Government research effort 
which results in the special use allowance being excessive compared to 
the Government research funding, a separate special use allowance may be 
negotiated for that year;
    (viii) Special use allowances may be adjusted for the period before 
construction is complete if the facility is partially occupied and used 
for Government research during that period.
    (2) A special use allowance may be based on either total or partial 
cost of construction or acquisition of the research facility.
    (i) When based on total cost neither the normal use allowance nor 
depreciation will apply--
    (A) During the special use allowance period; and
    (B) After the educational institution has recovered the total 
construction or acquisition cost from the Government or other users.
    (ii) When based on partial cost, normal use allowance and 
depreciation--
    (A) Apply to the balance of costs during the special use allowance 
period to the extent negotiated in the special use allowance agreement; 
and
    (B) Do not apply after the special use allowance period, except for 
normal use allowance applied to the balance.
    (3) During the special use allowance period, the research facility--
    (i) Shall be available for Government research use on a priority 
basis over nongovernment use; and
    (ii) Cannot be put to any significant use other than that which 
justified the special use allowance, unless the head of the contracting 
activity, who approved the special use allowance, consents.
    (4) The Government will pay only an allocable share of the special 
use allowance when the institution makes any substantial use of the 
research facility for parties other than the Government during the 
period when the special use allowance is in effect.
    (5) In no event shall the institution be paid more than the 
acquisition costs.

[56 FR 36416, July 31, 1991, as amended at 60 FR 29500, June 5, 1995]



Sec. 235.016  Broad agency announcement.

    To help achieve the goals of Section 1207 of Public Law 99-661 (see 
part 226), contracting officers shall--
    (1) Whenever practicable, reserve discrete or severable areas of 
research interest contained in broad agency announcements for exclusive 
competition among historically black colleges and universities and 
minority institutions;
    (2) Indicate such reservation--
    (i) In the broad agency announcement; and
    (ii) In the announcement synopsis (see 205.207(d)).

[56 FR 36416, July 31, 1991, as amended at 69 FR 63328, Nov. 1, 2004]



Sec. 235.017  Federally Funded Research and Development Centers.

    (a) Policy.
    (2) No DoD fiscal year 1992 or later funds may be obligated or 
expended to finance activities of a DoD Federally Funded Research and 
Development Center (FFRDC) if a member of its board of directors or 
trustees simultaneously serves on the board of directors or trustees of 
a profit-making company under contract to DoD, unless the FFRDC has a 
DoD-approved conflict of interest policy for its members (section 8107 
of Pub. L. 102-172 and similar sections in subsequent Defense 
appropriations acts).

[58 FR 28471, May 13, 1993]



Sec. 235.017-1  Sponsoring agreements.

    (c)(4) DoD-sponsoring FFRDCs that function primarily as research 
laboratories (C3I Laboratory operated by the Institute for Defense 
Analysis, Lincoln

[[Page 235]]

Laboratory operated by Massachusetts Institute of Technology, and 
Software Engineering Institute operated by Carnegie Mellon) may respond 
to solicitations and announcements for programs which promote research, 
development, demonstration, or transfer of technology (Section 217, 
Public Law 103-337).

[60 FR 61598, Nov. 30, 1995, as amended at 69 FR 65092, Nov. 10, 2004]



Sec. 235.070  Indemnification against unusually hazardous risks.



Sec. 235.070-1  Indemnification under research and development 
          contracts.

    (a) Under 10 U.S.C. 2354, and if authorized by the Secretary 
concerned, contracts for research and/or development may provide for 
indemnification of the contractor or subcontractors for--
    (1) Claims by third persons (including employees) for death, bodily 
injury, or loss of or damage to property; and
    (2) Loss of or damage to the contractor's property to the extent 
that the liability, loss, or damage--
    (i) Results from a risk that the contract defines as ``unusually 
hazardous;''
    (ii) Arises from the direct performance of the contract; and
    (iii) Is not compensated by insurance or other means.
    (b) Clearly define the specific unusually hazardous risks to be 
indemnified. Submit this definition for approval with the request for 
authorization to grant indemnification. Include the approved definition 
in the contract.

[56 FR 36416, July 31, 1991, as amended at 64 FR 51076, Sept. 21, 1999]



Sec. 235.070-2  Indemnification under contracts involving both research 
          and development and other work.

    These contracts may provide for indemnification under the authority 
of both 10 U.S.C. 2354 and Public Law 85-804. Public Law 85-804 will 
apply only to work to which 10 U.S.C. 2354 does not apply. Actions under 
Public Law 85-804 must also comply with FAR subpart 50.4.



Sec. 235.070-3  Contract clauses.

    When the contractor is to be indemnified in accordance with 235.070-
1, use either--
    (a) The clause at 252.235-7000, Indemnification Under 10 U.S.C. 
2354--Fixed Price; or
    (b) The clause at 252.235-7001, Indemnification Under 10 U.S.C. 
2354--Cost-Reimbursement, as appropriate.



Sec. 235.071  Additional contract clauses.

    (a) Use the clause at 252.235-7002, Animal Welfare, or one 
substantially the same, in solicitations and contracts awarded in the 
United States or its outlying areas involving research on live 
vertebrate animals.
    (b) Use the clause at 252.235-7003, Frequency Authorization, in 
solicitations and contracts for developing, producing, constructing, 
testing, or operating a device requiring a frequency authorization.
    (c) Use the clause at 252.235-7010, Acknowledgement of Support and 
Disclaimer, in solicitations and contracts for research and development.
    (d) Use the clause at 252.235-7011, Final Scientific or Technical 
Report, in solicitations and contracts for research and development.

[56 FR 36416, July 31, 1991, as amended at 60 FR 29500, June 5, 1995; 70 
FR 35545, June 21, 2005]

         PART 236_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

                          Subpart 236.1_General

Sec.

Sec. 236.102 Definitions.

      Subpart 236.2_Special Aspects of Contracting for Construction


Sec. 236.201 Evaluation of contractor performance.

Sec. 236.203 Government estimate of construction costs.

Sec. 236.204 Disclosure of the magnitude of construction projects.

Sec. 236.206 Liquidated damages.

Sec. 236.213 Special procedures for sealed bidding in construction 
          contracting.

Sec. 236.270 Expediting construction contracts.

Sec. 236.271 Cost-plus-fixed-fee contracts.

Sec. 236.272 Prequalification of sources.

Sec. 236.273 Construction in foreign countries.

[[Page 236]]

                     Subpart 236.5_Contract Clauses


Sec. 236.570 Additional provisions and clauses.

                Subpart 236.6_Architect-Engineer Services


Sec. 236.601 Policy.

Sec. 236.602 Selection of firms for architect-engineer contracts.

Sec. 236.602-1 Selection criteria.

Sec. 236.602-70 Restriction on award of overseas architect-engineer 
          contracts to foreign firms.

Sec. 236.604 Performance evaluation.

Sec. 236.606 Negotiations.

Sec. 236.606-70 Statutory fee limitation.

Sec. 236.609 Contract clauses.

Sec. 236.609-70 Additional provision and clause.

     Subpart 236.7_Standard and Optional Forms for Contracting for 
Construction, Architect-Engineer Services, and Dismantling, Demolition, 
                       or Removal of Improvements


Sec. 236.701 Standard and optional forms for use in contracting for 
          construction or dismantling, demolition, or removal of 
          improvements.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36421, July 31, 1991, unless otherwise noted.

                          Subpart 236.1_General



Sec. 236.102  Definitions.

    (1) A-E means architect-engineer.
    (2) Construction activity means an activity at any organizational 
level of the DoD that--
    (i) Is responsible for the architectural, engineering, and other 
related technical aspects of the planning, design, and construction of 
facilities; and
    (ii) Receives its technical guidance from the Army Office of the 
Chief of Engineers, Naval Facilities Engineering Command, or Air Force 
Directorate of Civil Engineering.
    (3) Marshallese firm is defined in the provision at 252.236-7012, 
Military Construction on Kwajalein Atoll--Evaluation Preference.
    (4) United States firm is defined in the provisions at 252.236-7010, 
Overseas Military Construction-Preference for United States Firms, and 
252.236-7011, Overseas Architect-Engineer Services-Restriction to United 
States firms.

[56 FR 36421, July 31, 1991, as amended at 62 FR 2857, Jan. 17, 1997; 63 
FR 11538, Mar. 9, 1998; 71 FR 9272, Feb. 23, 2006]

      Subpart 236.2_Special Aspects of Contracting for Construction



Sec. 236.201  Evaluation of contractor performance.

    (a) Preparation of performance evaluation reports. Use DD Form 2626, 
Performance Evaluation (Construction), instead of SF 1420.
    (c) Follow the procedures at PGI 236.201(c) for distribution and use 
of performance reports.

[56 FR 36421, July 31, 1991, as amended at 61 FR 7749, Feb. 29, 1996; 66 
FR 49861, Oct. 1, 2001; 71 FR 9272, Feb. 23, 2006]



Sec. 236.203   Government estimate of construction costs.

    Follow the procedures at PGI 236.203 for handling the Government 
estimate of construction costs.

[71 FR 9273, Feb. 23, 2006]



Sec. 236.204  Disclosure of the magnitude of construction projects.

    Additional price ranges are--
    (i) Between $10,000,000 and $25,000,000;
    (ii) Between $25,000,000 and $100,000,000;
    (iii) Between $100,000,000 and $250,000,000;
    (iv) Between $250,000,000 and $500,000,000; and
    (v) Over $500,000,000.

[61 FR 7749, Feb. 29, 1996]



Sec. 236.206  Liquidated damages.

    See 211.503 for instructions on use of liquidated damages.

[56 FR 36421, July 31, 1991, as amended at 66 FR 49861, Oct. 1, 2001]



Sec. 236.213  Special procedures for sealed bidding in construction 
          contracting.

    If it appears that sufficient funds may not be available for all the 
desired construction features, consider using a bid schedule with 
additive or deductive items in accordance with PGI 236.213.

[71 FR 9273, Feb. 23, 2006]

[[Page 237]]



Sec. 236.270  Expediting construction contracts.

    (a) 10 U.S.C. 2858 requires agency head approval to expedite the 
completion date of a contract funded by a Military Construction 
Appropriations Act, if additional costs are involved. This approval 
authority may not be redelegated. The approval authority must--
    (1) Certify that the additional expenditures are necessary to 
protect the National interest; and
    (2) Establish a reasonable completion date for the project.
    (b) The contracting officer may approve an expedited completion date 
if no additional costs are involved.



Sec. 236.271  Cost-plus-fixed-fee contracts.

    Annual military construction appropriations acts restrict the use of 
cost-plus-fixed-fee contracts (see 216.306(c)).

[61 FR 7749, Feb. 29, 1996]



Sec. 236.272  Prequalification of sources.

    (a) Prequalification procedures may be used when necessary to ensure 
timely and efficient performance of critical construction projects. 
Prequalification--
    (1) Results in a list of sources determined to be qualified to 
perform a specific construction contract; and
    (2) Limits offerors to those with proven competence to perform in 
the required manner.
    (b) The head of the contracting activity must--
    (1) Authorize the use of prequalification by determining, in 
writing, that a construction project is of an urgency or complexity that 
requires prequalification; and
    (2) Approve the prequalification procedures.
    (c) For small businesses, the prequalification procedures must 
require the qualifying authority to--
    (1) Request a preliminary recommendation from the appropriate Small 
Business Administration regional office, if the qualifying authority 
believes a small business is not responsible;
    (2) Permit the small business to submit a bid or proposal if the 
preliminary recommendation is that the small business is responsible; 
and
    (3) Follow the procedures in FAR 19.6, if the small business is in 
line for award and is found nonresponsible.



Sec. 236.273  Construction in foreign countries.

    (a) In accordance with Section 112 of Pub. L. 105-45 and similar 
sections in subsequent military construction appropriations acts, 
military construction contracts funded with military construction 
appropriations, that are estimated to exceed $1,000,000 and are to be 
performed in the United States outlying area in the Pacific and on 
Kwajalein Atoll, or in countries bordering the Arabian Gulf, shall be 
awarded only to United States firms, unless--
    (1) The lowest responsive and responsible offer of a United States 
firm exceeds the lowest responsive and responsible offer of a foreign 
firm by more than 20 percent; or
    (2) The contract is for military construction on Kwajalein Atoll and 
the lowest responsive and responsible offer is submitted by a 
Marshallese firm.
    (b) See PGI 236.273(b) for guidance on technical working agreements 
with foreign governments.

[56 FR 36421, July 31, 1991, as amended at 62 FR 2856, Jan. 17, 1997; 62 
FR 34127, June 24, 1997; 63 FR 11538, Mar. 9, 1998; 66 FR 49861, Oct. 1, 
2001; 70 FR 35545, June 21, 2005. Redesignated and amended at 71 FR 
9273, Feb. 23, 2006]

                     Subpart 236.5_Contract Clauses



Sec. 236.570  Additional provisions and clauses.

    (a) Use the following clauses in all fixed-price construction 
solicitations and contracts--
    (1) 252.236-7000, Modification Proposals-Price Breakdown; and
    (2) 252.236-7001, Contract Drawings and Specifications.
    (b) Use the following provisions and clauses in fixed-price 
construction contracts and solicitations as applicable--
    (1) 252.236-7002, Obstruction of Navigable Waterways, when the 
contract will involve work near or on navigable waterways.

[[Page 238]]

    (2) When the head of the contracting activity has approved use of a 
separate bid item for mobilization and preparatory work, use either--
    (i) 252.236-7003, Payment for Mobilization and Preparatory Work. Use 
this clause for major construction contracts that require--
    (A) Major or special items of plant and equipment; or
    (B) Large stockpiles of material which are in excess of the type, 
kind, and quantity which would be normal for a contractor qualified to 
undertake the work; or
    (ii) 252.236-7004, Payment for Mobilization and Demobilization. Use 
this clause for contracts involving major mobilization expense, or plant 
equipment and material (other than the situations covered in paragraph 
(b)(2)(i) of this section) made necessary by the location or nature of 
the work.
    (A) Generally, allocate 60 percent of the lump sum price in 
paragraph (a) of the clause to the cost of mobilization.
    (B) Vary this percentage to reflect the circumstances of the 
particular contract, but in no event should mobilization exceed 80 
percent of the payment item.
    (3) 252.236-7005, Airfield Safety Precautions, when construction 
will be performed on or near airfields.
    (4) 252.236-7006, Cost Limitation, if the solicitation's bid 
schedule contains one or more items subject to statutory cost 
limitations, and if a waiver has not been granted (FAR 36.205).
    (5) 252.236-7007, Additive or Deductive Items, if the procedures in 
236.213-70 are being used.
    (6) 252.236-7008, Contract Prices--Bidding Schedule, if the contract 
will contain only unit prices for some items.
    (c) Use the following provisions in solicitations for military 
construction contracts that are funded with military construction 
appropriations and are estimated to exceed $1,000,000:
    (1) 252.236-7010, Overseas Military Construction--Preference for 
United States Firms, when contract performance will be in a United 
States outlying area in the Pacific or in a country bordering the 
Arabian Gulf.
    (2) 252.236-7012, Military Construction on Kwajalein Atoll--
Evaluation Preference, when contract performance will be on Kwajalein 
Atoll.
    (d) Also see 246.710(4) for an additional clause applicable to 
construction contracts to be performed in Germany.

[56 FR 36421, July 31, 1991, as amended at 57 FR 42632, Sept. 15, 1992; 
62 FR 2856, Jan. 17, 1997; 62 FR 34127, June 24, 1997; 63 FR 11538, Mar. 
9, 1998; 65 FR 63804, Oct. 25, 2000; 68 FR 7440, Feb. 14, 2003; 70 FR 
35545, June 21, 2005]

                Subpart 236.6_Architect-Engineer Services



Sec. 236.601  Policy.

    (1) 10 U.S.C. 2807(b) requires notice to Congress 21 days before the 
initial obligation of funds if a contract is for--
    (i) A-E services or construction design for military construction, 
military family housing, or restoration or replacement of damaged or 
destroyed facilities; and
    (ii) An estimated total contract price of $500,000 or more.
    (2) During the 21 day period, synopsis of the proposed contract 
action and administrative actions leading to the award may be started.

[56 FR 36421, July 31, 1991, as amended at 63 FR 69008, Dec. 15, 1998]



Sec. 236.602  Selection of firms for architect-engineer contracts.



Sec. 236.602-1  Selection criteria.

    (a) Establish the evaluation criteria before making the public 
announcement required by FAR 5.205(d) and include the criteria and their 
relative order of importance in the announcement. Follow the procedures 
at PGI 236.602-1(a).

[69 FR 75000, Dec. 15, 2004, as amended at 71 FR 53044, Sept. 8, 2006]



Sec. 236.602-70  Restriction on award of overseas architect-engineer 
          contracts to foreign firms.

    In accordance with Section 111 of Public Law 104-32 and similar 
sections in subsequent military construction appropriations acts, A-E 
contracts funded by military construction appropriations that are 
estimated to exceed $500,000 and are to be performed in Japan, in any 
North Atlantic Treaty

[[Page 239]]

Organization member country, or in countries bordering the Arabian Gulf, 
shall be awarded only to United States firms or to joint ventures of 
United States and host nation firms.

[62 FR 2858, Jan. 17, 1997]



Sec. 236.604  Performance evaluation.

    (a) Preparation of performance reports. Use DD Form 2631, 
Performance Evaluation (Architect-Engineer), instead of SF 1421.
    (2) Prepare a separate performance evaluation after actual 
construction of the project. Ordinarily, the evaluating official should 
be the person most familiar with the A-E's performance.
    (c) Distribution and use of performance reports.
    (i) Forward each performance report to the central data base 
identified in 236.201(c) after completing the review. The procedures in 
236.201 also apply to A-E contracts.
    (ii) File and use the DD Form 2631, Performance Evaluation 
(Architect-Engineer), in a manner similar to the SF 330, Architect-
Engineer Qualifications, Part II.

[56 FR 36421, July 31, 1991, as amended at 61 FR 7749, Feb. 29, 1996; 64 
FR 51076, Sept. 21, 1999; 69 FR 75000, Dec. 15, 2004]



Sec. 236.606  Negotiations.



Sec. 236.606-70  Statutory fee limitation.

    (a) 10 U.S.C. 4540, 7212, and 9540 limit the contract price (or fee) 
for A-E services for the preparation of designs, plans, drawings, and 
specifications to six percent of the project's estimated construction 
cost.
    (b) The six percent limit also applies to contract modifications, 
including modifications involving--
    (1) Work not initially included in the contract. Apply the six 
percent limit to the revised total estimated construction cost.
    (2) Redesign. Apply the six percent limit as follows--
    (i) Add the estimated construction cost of the redesign features to 
the original estimated construction cost;
    (ii) Add the contract cost for the original design to the contract 
cost for redesign; and
    (iii) Divide the total contract design cost by the total estimated 
construction cost. The resulting percentage may not exceed the six 
percent statutory limitation.
    (c) The six percent limit applies only to that portion of the 
contract (or modification) price attributable to the preparation of 
designs, plans, drawings, and specifications. If a contract or 
modification also includes other services, the part of the price 
attributable to the other services is not subject to the six percent 
limit.



Sec. 236.609  Contract clauses.



Sec. 236.609-70  Additional provision and clause.

    (a)(1) Use the clause at 252.236-7009, Option for Supervision and 
Inspection Services, in solicitations and contracts for A-E services 
when--
    (i) The contract will be fixed price; and
    (ii) Supervision and inspection services by the A-E may be required 
during construction.
    (2) Include the scope of such services in appendix A of the 
contract.
    (b) Use the provision at 252.236-7011, Overseas Architect-Engineer 
Services--Restriction to United States Firms, in solicitations for A-E 
contracts that are--
    (1) Funded with military construction appropriations;
    (2) Estimated to exceed $500,000; and
    (3) To be performed in Japan, in any North Atlantic Treaty 
Organization member country, or in countries bordering the Arabian Gulf.

[56 FR 36421, July 31, 1991, as amended at 62 FR 2858, Jan. 17, 1997; 63 
FR 11539, Mar. 9, 1998]

[[Page 240]]

     Subpart 236.7_Standard and Optional Forms for Contracting for 
Construction, Architect-Engineer Services, and Dismantling, Demolition, 
                       or Removal of Improvements



Sec. 236.701  Standard and optional forms for use in contracting for 
          construction or dismantling, demolition, or removal of 
          improvements.

    (c) Do not use Optional Form 347, Order for Supplies or Services 
(see 213.307).

[56 FR 36421, July 31, 1991, as amended at 65 FR 63804, Oct. 25, 2000]

                      PART 237_SERVICE CONTRACTING

                 Subpart 237.1_Service Contracts_General

Sec.

Sec. 237.101 Definitions.

Sec. 237.102-70 Prohibition on contracting for firefighting or security-
          guard functions.

Sec. 237.104 Personal services contracts.

Sec. 237.106 Funding and term of service contracts.

Sec. 237.109 Services of quasi-military armed forces.

Sec. 237.170 Approval of contracts and task orders for services.

Sec. 237.170-1 Scope.

Sec. 237.170-2 Approval requirements.

Sec. 237.171 Training for contractor personnel interacting with 
          detainees.

Sec. 237.171-1 Scope.

Sec. 237.171-2 Definition.

Sec. 237.171-3 Policy.

Sec. 237.171-4 Contract clause.

             Subpart 237.2_Advisory and Assistance Services


Sec. 237.270 Acquisition of audit services.

                    Subpart 237.70_Mortuary Services


Sec. 237.7000 Scope.

Sec. 237.7001 Method of acquisition.

Sec. 237.7002 Area of performance and distribution of contracts.

Sec. 237.7003 Solicitation provisions and contract clauses.

            Subpart 237.71_Laundry and Dry Cleaning Services


Sec. 237.7100 Scope.

Sec. 237.7101 Solicitation provisions and contract clauses.

              Subpart 237.72_Educational Service Agreements


Sec. 237.7200 Scope.

Sec. 237.7201 Educational service agreement.

Sec. 237.7202 Limitations.

Sec. 237.7203 Duration.

Sec. 237.7204 Format and clauses for educational service agreements.

    Subpart 237.73_Services of Students at Research and Development 
                              Laboratories


Sec. 237.7300 Scope.

Sec. 237.7301 Definitions.

Sec. 237.7302 General.

Sec. 237.7303 Contract clauses.

          Subpart 237.74_Services at Installations Being Closed


Sec. 237.7400 Scope.

Sec. 237.7401 Policy.

Sec. 237.7402 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36424, July 31, 1991, unless otherwise noted.

                 Subpart 237.1_Service Contracts_General



Sec. 237.101  Definitions.

    Increased performance of security-guard functions, as used in this 
subpart, means--
    (1) In the case of an installation or facility where no security-
guard functions were performed as of September 10, 2001, the entire 
scope or extent of the performance of security-guard functions at the 
installation or facility after such date; and
    (2) In the case of an installation or facility where security-guard 
functions were performed within a lesser scope of requirements or to a 
lesser extent as of September 10, 2001, than after such date, the 
increment of the performance of security-guard functions at the 
installation or facility that exceeds such lesser scope of requirements 
or extent of performance.

[68 FR 7443, Feb. 14, 2003]



Sec. 237.102-70  Prohibition on contracting for firefighting or 
          security-guard functions.

    (a) Under 10 U.S.C. 2465, the DoD is prohibited for entering into 
contracts for the performance of firefighting or

[[Page 241]]

security-guard functions at any military installation or facility 
unless--
    (1) The contract is to be carried out at a location outside the 
United States and its outlying areas at which members of the armed 
forces would have to be used for the performance of firefighting or 
security-guard functions at the expense of unit readiness;
    (2) The contract will be carried out on a Government-owned but 
privately operated installation;
    (3) The contract (or renewal of a contract) is for the performance 
of a function under contract on September 24, 1983; or
    (4) The contract--
    (i) Is for the performance of firefighting functions;
    (ii) Is for a period of 1 year or less; and
    (iii) Covers only the performance of firefighting functions that, in 
the absence of the contract, would have to be performed by members of 
the armed forces who are not readily available to perform such functions 
by reason of a deployment.
    (b) Under Section 2907 of Public Law 103-160, this prohibition does 
not apply to services at installations being closed (see subpart 
237.74).
    (c) Under Section 1010 of Public Law 107-56, this prohibition does 
not apply to any contract that'
    (1) Is entered into during the period of time that United States 
armed forces are engaged in Operation Enduring Freedom or during the 
period 180 days thereafter;
    (2) Is for the performance of security functions at any military 
installation or facility in the United States;
    (3) Is awarded to a proximately located local or State government, 
or a combination of such governments, whether or not any such government 
is obligated to provide such services to the general public without 
compensation; and
    (4) Prescribes standards for the training and other qualifications 
of local government law enforcement personnel who perform security 
functions under the contract in accordance with criteria established by 
the Secretary of the department concerned.
    (d) Under section 332 of Pub. L. 107-314, this prohibition does not 
apply to any contract that is entered into for any increased performance 
of security-guard functions at a military installation or facility 
undertaken in response to the terrorist attacks on the United States on 
September 11, 2001, if--
    (1) Without the contract, members of the Armed Forces are or would 
be used to perform the increased security-guard functions;
    (2) The agency has determined that--
    (i) Recruiting and training standards for the personnel who are to 
perform the security-guard functions are comparable to the recruiting 
and training standards for DoD personnel who perform the same security-
guard functions;
    (ii) Contractor personnel performing such functions will be 
effectively supervised, reviewed, and evaluated; and
    (iii) Performance of such functions will not result in a reduction 
in the security of the installation or facility; and
    (3) Contract performance will not extend beyond September 30, 2007.

[60 FR 61599, Nov. 30, 1995, as amended at 67 FR 11439, Mar. 14, 2002; 
68 FR 7443, Feb. 14, 2003; 69 FR 35533, June 25, 2004; 70 FR 14577, Mar. 
23, 2005; 70 FR 35545, June 21, 2005; 71 FR 34834, June 16, 2006]



Sec. 237.104  Personal services contracts.

    (b)(i) Authorization to acquire the personal services of experts and 
consultants is included in 10 U.S.C. 129b. Personal service contracts 
for expert and consultant services must also be authorized by a 
determination and findings (D&F) in accordance with department/agency 
regulations.
    (A) Generally, the D&F should authorize one contract at a time; 
however, an authorizing official may issue a blanket D&F for classes of 
contracts.
    (B) Prepare each D&F in accordance with FAR 1.7 and include a 
determination that--
    (1) The duties are of a temporary or intermittent nature;
    (2) Acquisition of the services is advantageous to the national 
defense;
    (3) DoD personnel with necessary skills are not available;
    (4) Excepted appointment cannot be obtained;
    (5) A nonpersonal services contract is not practicable;

[[Page 242]]

    (6) Statutory authority, 5 U.S.C. 3109 and other legislation, apply; 
and
    (7) Any other determination required by statues has been made.
    (ii) Personal services contracts for health care are authorized by 
10 U.S.C. 1091.
    (A) This authority may be used to acquire--
    (1) Direct health care services provided in medical treatment 
facilities;
    (2) Health care services at locations outside of medical treatment 
facilities (such as the provision of medical screening examinations at 
military entrance processing stations); and
    (3) Services of clinical counselors, family advocacy program staff, 
and victim's services representatives to members of the Armed Forces and 
covered beneficiaries who require such services, provided in medical 
treatment facilities or elsewhere. Persons with whom a personal services 
contract may be entered into under this authority include clinical 
social workers, psychologists, psychiatrists, and other comparable 
professionals who have advanced degrees in counseling or related 
academic disciplines and who meet all requirements for State licensure 
and board certification requirements, if any, within their fields of 
specialization.
    (B) Sources for personal services contracts with individuals under 
the authority of 10 U.S.C. 1091 shall be selected through the procedures 
in this section. These procedures do not apply to contracts awarded to 
business entities other than individuals. Selections made using the 
procedures in this section are exempt by statute from FAR part 6 
competition requirements (see 206.001(b)).
    (C) Approval requirements for--
    (1) Direct health care personal services contracts (see paragraphs 
(b)(ii)(A)(1) and (2) of this section) and a pay cap are in DoDI 6025.5, 
Personal Services Contracts for Health Care Providers.
    (i) A request to enter into a personal services contract for direct 
health care services must be approved by the commander of the medical/
dental treatment facility where the services will be performed.
    (ii) A request to enter into a personal services contract for a 
location outside of a medical treatment facility must be approved by the 
chief of the medical facility who is responsible for the area in which 
the services will be performed.
    (2) Services of clinical counselors, family advocacy program staff, 
and victim's services representatives (see paragraph (b)(ii)(A)(3) of 
this section), shall be in accordance with agency procedures.
    (D) The contracting officer must ensure that the requiring activity 
provides a copy of the approval with the purchase request.
    (E) The contracting officer must provide adequate advance notice of 
contracting opportunities to individuals residing in the area of the 
facility. The notice must include the qualification criteria against 
which individuals responding will be evaluated. The contracting officer 
shall solicit applicants through at least one local publication which 
serves the area of the facility. Acquisitions under this section for 
personal service contracts are exempt from the posting and synopsis 
requirements of FAR part 5.
    (F) The contracting officer shall provide the qualifications of 
individuals responding to the notice to the commander of the facility 
for evaluation and ranking in accordance with agency procedures. 
Individuals must be considered solely on the basis of the professional 
qualifications established for the particular personal services being 
acquired and the Government's estimate of reasonable rates, fees, or 
other costs. The commander of the facility shall provide the contracting 
officer with rationale for the ranking of individuals, consistent with 
the required qualifications.
    (G) Upon receipt from the facility of the ranked listing of 
applicants, the contracting officer shall either--
    (1) Enter into negotiations with the highest ranked applicant. If a 
mutually satisfactory contract cannot be negotiated, the contracting 
officer shall terminate negotiations with the highest ranked applicant 
and enter into negotiations with the next highest.
    (2) Enter into negotiations with all qualified applicants and select 
on the

[[Page 243]]

basis of qualifications and rates, fees, or other costs.
    (H) In the event only one individual responds to an advertised 
requirement, the contracting officer is authorized to negotiate the 
contract award. In this case, the individual must still meet the minimum 
qualifications of the requirement and the contracting officer must be 
able to make a determination that the price is fair and reasonable.
    (I) If a fair and reasonable price cannot be obtained from a 
qualified individual, the requirement should be canceled and acquired 
using procedures other than those set forth in this section.
    (iii) (A) In accordance with 10 U.S.C. 129b(d), an agency may enter 
into a personal services contract if--
    (1) The personal services--
    (i) Are to be provided by individuals outside the United States, 
regardless of their nationality;
    (ii) Directly support the mission of a defense intelligence 
component or counter-intelligence organization of DoD; or
    (iii) Directly support the mission of the special operations command 
of DoD; and
    (2) The head of the contracting activity provides written approval 
for the proposed contract. The approval shall include a determination 
that addresses the following:
    (i) The services to be procured are urgent or unique;
    (ii) It would not be practical to obtain such services by other 
means; and
    (iii) For acquisition of services in accordance with paragraph 
(b)(iii)(A)(1)(i) of this section, the services to be acquired are 
necessary and appropriate for supporting DoD activities and programs 
outside the United States.
    (B) The contracting officer shall ensure that the applicable 
requirements of paragraph (b)(iii)(A)(2) of this section have been 
satisfied and shall include the approval documentation in the contract 
file.
    (iv) The requirements of 5 U.S.C. 3109, Employment of Experts and 
Consultants; Temporary or Intermittent, do not apply to contracts 
entered into in accordance with paragraph (b)(iii) of this section.
    (f)(i) Payment to each expert or consultant for personal services 
under 5 U.S.C. 3109 shall not exceed the highest rate fixed by the 
Classification Act Schedules for grade GS-15 (see 5 CFR 304.105(a)).
    (ii) The contract may provide for the same per diem and travel 
expenses authorized for a Government employee, including actual 
transportation and per diem in lieu of subsistence for travel between 
home or place of business and official duty station.
    (iii) Coordinate with the civilian personnel office on benefits, 
taxes, personnel ceilings, and maintenance of records.

[56 FR 36424, July 31, 1991, as amended at 60 FR 2888, Jan. 12, 1995; 60 
FR 61599, Nov. 30, 1995; 63 FR 11539, Mar. 9, 1998; 67 FR 61516, Oct. 1, 
2002; 69 FR 55992, Sept. 17, 2004]



Sec. 237.106  Funding and term of service contracts.

    (1) Personal service contracts for expert or consultant services 
shall not exceed 1 year. The nature of the duties must be--
    (i) Temporary (not more than 1 year); or
    (ii) Intermittent (not cumulatively more than 130 days in 1 year).
    (2) The contracting officer may enter into a contract, exercise an 
option, or place an order under a contract for severable services for a 
period that begins in one fiscal year and ends in the next fiscal year 
if the period of the contract awarded, option exercised, or order placed 
does not exceed 1 year (10 U.S.C. 2410a).

[64 FR 28110, May 25, 1999]



Sec. 237.109  Services of quasi-military armed forces.

    See 237.102-70b for prohibition on contracting for firefighting or 
security-guard functions.

[60 FR 61599, Nov. 30, 1995]



Sec. 237.170  Approval of contracts and task orders for services.



Sec. 237.170-1  Scope.

    This section--
    (a) Implements 10 U.S.C. 2330; and
    (b) Applies to services acquired for DoD, regardless of whether the 
services are acquired through--

[[Page 244]]

    (1) A DoD contract or task order; or
    (2) A contract or task order awarded by an agency other than DoD.

[68 FR 56564, Oct. 1, 2003]



Sec. 237.170-2  Approval requirements.

    (a) Acquisition of services through a contract or task order that is 
not performance based. (1) For acquisitions at or below $50,000,000, 
obtain the approval of the official designated by the department or 
agency.
    (2) For acquisitions exceeding $50,000,000, obtain the approval of 
the senior procurement executive.
    (b) Acquisition of services through use of a contract or task order 
issued by a non-DoD agency. Comply with the review, approval, and 
reporting requirements established in accordance with Subpart 217.78 
when acquiring services through use of a contract or task order issued 
by a non-DoD agency.

[70 FR 29643, May 24, 2005, as amended at 71 FR 14104, Mar. 21, 2006]



Sec. 237.171  Training for contractor personnel interacting with 
          detainees.



Sec. 237.171-1  Scope.

    This section prescribes policies to prevent the abuse of detainees, 
as required by Section 1092 of the National Defense Authorization Act 
for Fiscal Year 2005 (Pub. L. 108-375).

[70 FR 52033, Sept. 1, 2005]



Sec. 237.171-2  Definition.

    Combatant commander, detainee, and personnel interacting with 
detainees, as used in this section, are defined in the clause at 
252.237-7019, Training for Contractor Personnel Interacting with 
Detainees.

[71 FR 53048, Sept. 8, 2006]



Sec. 237.171-3  Policy.

    (a) Each DoD contract in which contractor personnel, in the course 
of their duties, interact with detainees shall include a requirement 
that such contractor personnel--
    (1) Receive Government-provided training regarding the international 
obligations and laws of the United States applicable to the detention of 
personnel, including the Geneva Conventions; and
    (2) Provide a copy of the training receipt document to the 
contractor.
    (b) The combatant commander responsible for the area where the 
detention or interrogation facility is located will arrange for the 
training and a training receipt document to be provided to contractor 
personnel. For information on combatant commander geographic areas of 
responsibility and point of contact information for each command, see 
PGI 237.171-3(b).

[71 FR 53048, Sept. 8, 2006]



Sec. 237.171-4  Contract clause.

    Use the clause at 252.237-7019, Training for Contractor Personnel 
Interacting with Detainees, in solicitations and contracts for the 
acquisition of services if--
    (a) The clause at 252.225-7040, Contractor Personnel Supporting a 
Force Deployed Outside the United States, is included in the 
solicitation or contract; or
    (b) The services will be performed at a facility holding detainees, 
and contractor personnel in the course of their duties may be expected 
to interact with the detainees.

[70 FR 52033, Sept. 1, 2005]

             Subpart 237.2_Advisory and Assistance Services



Sec. 237.270  Acquisition of audit services.

    (a) General policy. (1) Do not contract for audit services unless--
    (i) The cognizant DoD audit organization determines that expertise 
required to perform the audit is not available within the DoD audit 
organization; or
    (ii) Temporary audit assistance is required to meet audit reporting 
requirements mandated by law or DoD regulation.
    (2) See PGI 237.270 for a list of DoD publications that govern the 
conduct of audits.
    (b) Contract period. Except in unusual circumstances, award 
contracts for recurring audit services for a 1-year period with at least 
2 option years.
    (c) Approvals. Do not issue a solicitation for audit services unless 
the requiring activity provides evidence that

[[Page 245]]

the cognizant DoD audit organization has approved the statement of work. 
The requiring agency shall obtain the same evidence of approval for 
subsequent material changes to the statement of work.
    (d) Solicitation provisions and contract clauses. (1) Use the 
provision at 252.237-7000, Notice of Special Standards of 
Responsibility, in solicitations for audit services.
    (2) Use the clause at 252.237-7001, Compliance with Audit Standards, 
in solicitations and contracts for audit services.

[70 FR 57193, Sept. 30, 2005]

                    Subpart 237.70_Mortuary Services

    Source: 71 FR 3416, Jan. 23, 2006, unless otherwise noted.



Sec. 237.7000  Scope.

    This subpart--
    (a) Applies to contracts for mortuary services (the care of remains) 
for military personnel within the United States; and
    (b) May be used as guidance in areas outside the United States for 
mortuary services for deceased military and civilian personnel.



Sec. 237.7001  Method of acquisition.

    (a) Requirements type contract. By agreement among the military 
activities, one activity in each geographical area will contract for the 
estimated requirements for the care of remains for all military 
activities in the area. Use a requirements type contract (see FAR 
16.503) when the estimated annual requirements for the activities in the 
area are ten or more.
    (b) Purchase order. Where no contract exists, use DD Form 1155, 
Order for Supplies or Services, to obtain mortuary services.



Sec. 237.7002  Area of performance and distribution of contracts.

    Follow the procedures at PGI 237.7002 for--
    (a) Defining the geographical area to be covered by the contract; 
and
    (b) Distributing copies of the contract.



Sec. 237.7003  Solicitation provisions and contract clauses.

    (a) Use the provision at 252.237-7002, Award to Single Offeror, in 
all sealed bid solicitations for mortuary services. Use the basic 
provision with its Alternate I in all negotiated solicitations for 
mortuary services.
    (b) Use the following clauses in all mortuary service solicitations 
and contracts, except do not use the clauses at 252.237-7004, Area of 
Performance, in solicitations or contracts that include port of entry 
requirements:
    (1) 252.237-7003, Requirements, (insert activities authorized to 
place orders in paragraph (e) of the clause).
    (2) 252.237-7004, Area of Performance.
    (3) 252.237-7005, Performance and Delivery.
    (4) 252.237-7006, Subcontracting.
    (5) 252.237-7007, Termination for Default.
    (6) 252.237-7008, Group Interment.
    (7) 252.237-7009, Permits.
    (8) 252.237-7011, Preparation History.
    (c) Use the clause at FAR 52.245-4, Government-Furnished Property 
(Short Form), in solicitations and contracts that include port of entry 
requirements.

            Subpart 237.71_Laundry and Dry Cleaning Services



Sec. 237.7100  Scope.

    This subpart--
    (a) Applies to contracts for laundry and dry cleaning services 
within the United States; and
    (b) May be used as guidance in areas outside the United States.

[71 FR 3416, Jan. 23, 2006]



Sec. 237.7101  Solicitation provisions and contract clauses.

    (a) Use the provision at 252.237-7012, Instruction to Offerors 
(Count-of-Articles), in solicitations for laundry and dry cleaning 
services to be provided on a count-of-articles basis.
    (b) Use the provision at 252.237-7013, Instruction to Offerors (Bulk 
Weight), in solicitations for laundry services to be provided on a bulk 
weight basis.
    (c) Use the clause at 252.237-7014, Loss or Damage (Count-of-
Articles), in solicitations and contracts for laundry

[[Page 246]]

and dry cleaning services to be provided on a count-of-articles basis.
    (d) Use the clause at 252.237-7015, Loss or Damage (Weight of 
Articles), in solicitations and contracts for laundry and dry cleaning 
services to be provided on a bulk weight basis.
    (1) Insert a reasonable per pound price in paragraph (b) of the 
clause, based on the average per pound value. When the contract requires 
laundry services on a bag type basis, insert reasonable per pound prices 
by bag type.
    (2) Insert an appropriate percentage in paragraph (e) of the clause, 
not to exceed eight percent.
    (e) Use the clause at 252.237-7016, Delivery Tickets, in all 
solicitations and contracts for laundry and dry cleaning services.
    (1) Use the clause with its Alternate I when services are for bag 
type laundry to be provided on a bulk weight basis.
    (2) Use the clause with its Alternate II when services are unsorted 
laundry to be provided on a bulk weight basis.
    (f) Use the clause at 252.237-7017, Individual Laundry, in 
solicitations and contracts for laundry and dry cleaning services to be 
provided to individual personnel.
    (1) Insert the number of pieces of outer garments in paragraphs (d) 
(1) and (2) of the clause.
    (2) The number of pieces and composition of a bundle in paragraphs 
(d) (1) and (2) of the clause may be modified to meet local conditions.
    (g) Use the clause at 252.237-7018, Special Definitions of 
Government Property, in all solicitations and contracts for laundry and 
dry cleaning services.

[56 FR 36424, July 31, 1991, as amended at 62 FR 34127, June 24, 1997. 
Redesignated at 71 FR 3416, Jan. 23, 2006]

              Subpart 237.72_Educational Service Agreements



Sec. 237.7200  Scope.

    (a) This subpart prescribes acquisition procedures for educational 
services from schools, colleges, universities, or other educational 
institutions. This subpart does not include tuition assistance 
agreements, i.e., payment by the Government of partial tuition under the 
off-duty educational program.
    (b) As used in the subpart--
    (1) ``Facilities'' do not include the institution's dining rooms or 
dormitories; and
    (2) ``Fees'' does not include charges for meals or lodging.



Sec. 237.7201  Educational service agreement.

    (a) An educational service agreement is not a contract, but is an 
ordering agreement under which the Government may order educational 
services.
    (b) Educational service agreements provide for ordering educational 
services when--
    (1) The Government pays normal tuition and fees for educational 
services provided to a student by the institution under its normal 
schedule of tuition and fees applicable to all students generally; and
    (2) Enrollment is at the institution under the institution's normal 
rules and in courses and curricula which the institution offers to all 
students meeting admission requirements.



Sec. 237.7202  Limitations.

    (a) Make no agreement under this subpart which will result in 
payment of Government funds for tuition or other expenses for training 
in any legal profession, except in connection with the detailing of 
commissioned officers to law schools under 10 U.S.C. 2004.
    (b) Educational service agreements are not used to provide special 
courses or special fees for Government students.



Sec. 237.7203  Duration.

    (a) Educational service agreements are for an indefinite duration 
and remain in effect until terminated.
    (b) The issuing activity must establish procedures to review each 
educational service agreement at least once each year. Review dates 
should consider the institution's academic calendar and occur at least 
30 days before the beginning of a term. The purpose of the review is to 
incorporate changes to reflect requirements of any statute, Executive 
Order, FAR, or DFARS.

[[Page 247]]

    (c) If the contracting officer and the institution do not agree on 
required changes, terminate the agreement.



Sec. 237.7204  Format and clauses for educational service agreements.

    Educational service agreements under this subpart shall be in the 
following format. Add to the schedule any other provisions necessary to 
describe the requirements, if they are consistent with the following 
provisions and the policy of acquiring educational services in the form 
of standard course offerings at the prevailing rates of the institution.

                      Educational Service Agreement

                       Agreement No. ------------

    1. This agreement entered into on the -------- day of ---------- 
19----, is between the Government, represented by the Contracting 
Officer, and the Contractor, (name of institution), an educational 
institution located in -------- (city), -------- (state).
    2. This agreement is for educational services to be provided by the 
Contractor to Government personnel at the Contractor's institution. The 
Contractor shall provide instruction with standard offerings of courses 
available to the public.
    3. The Government shall pay for services under the Contractor's 
normal schedule of tuition and fees applicable to the public and in 
effect at the time the services are performed.
    4. The Government will review this agreement annually before the 
anniversary of its effective date for the purpose of incorporating 
changes required by statutes, executive orders, the Federal Acquisition 
Regulation, or the Defense Federal Acquisition Regulation Supplement. 
Changes required to be made by modification to this agreement or by 
issuance of a superseding agreement. If mutual agreement on the changes 
cannot be reached, the Government will terminate this agreement.
    5. The parties may amend this agreement only by mutual consent.
    6. This agreement shall start on the date in paragraph 1 and shall 
continue until terminated.
    7. The estimated annual cost of this agreement is $----------. This 
estimate is for administrative purposes only and does not impose any 
obligation on the Government to request any services or make any 
payment.
    8. Advance payments are authorized by 10 U.S.C. 2396(a)(3).
    9. Submit invoices to: ------------ (name and address of activity).

                           Schedule Provisions

    1. Ordering procedures and services to be provided. (a) The 
Contractor shall promptly deliver to the Contracting Officer one copy of 
each catalog applicable to this agreement, and one copy of any 
subsequent revision.
    (b) The Government will request educational services under this 
agreement by a (insert type of request, such as, delivery order, 
official Government order, or other written communication). The (insert 
type of request, such as, delivery order, official Government order, or 
other written communication) will contain the number of this agreement 
and will designate as students at the Contractor's institution one or 
more Government-selected persons who have already been accepted for 
admission under the Contractor's usual admission standards.
    (c) All students under this agreement shall register in the same 
manner, be subject to the same academic regulations, and have the same 
privileges, including the use of all facilities and equipment as any 
other students enrolled in the institution.
    (d) Upon enrolling each student under this agreement, the Contractor 
shall, where the resident or nonresident status involves a difference in 
tuition or fees--
    (i) Determine the resident or nonresident status of the student;
    (ii) Notify the student and the Contracting Officer of the 
determination. If there is an appeal of the determination;
    (iii) If there is an appeal of the determination, process the appeal 
under the Contractor's standard procedures;
    (iv) Notify the student and Contracting Officer of the result; and
    (v) Make the determination a part of the student's permanent record.
    (e) The Contractor shall not furnish any instruction or other 
services to any student under this agreement before the effective date 
of a request for services in the form specified in paragraph (b) of this 
schedule.
    2. Change in curriculum. The Contracting Officer may vary the 
curriculum for any student enrolled under this agreement but shall not 
require or make any change in any course without the Contractor's 
consent.
    3. Payment. (a) The Government shall pay the Contractor the normal 
tuition and fees which the Contractor charges any students pursuing the 
same or similar curricula, except for any tuition and fees which this 
agreement excludes. The Contractor may change any tuition and fees, 
provided--
    (1) The Contractor publishes the revisions in a catalog or otherwise 
publicly announces the revisions;
    (2) Applies the revisions uniformly to all students studying the 
same or similar curricula;
    (3) Provides the Contracting Officer notice of changes before their 
effective date.

[[Page 248]]

    (b) The Contractor shall not establish any tuition or fees which 
apply solely to students under this agreement.
    (c) If the Contractor regularly charges higher tuition and fees for 
nonresident students, the Contractor may charge the Government the 
normal nonresident tuition and fees for students under this agreement 
who are nonresidents. The Government shall not claim resident tuition 
and fees for any student solely on the basis of the student residing in 
the State as a consequence of enrollment under this agreement.
    (d) The Contractor shall charge the Government only the tuition and 
fees which relate directly to enrollment as a student. Tuition and fees 
may include--
    (i) Penalty fees for late registration or change of course caused by 
the Government;
    (ii) Mandatory health fees and health insurance charges; and
    (iii) Any flat rate charge applicable to all students registered for 
research that appears in the Contractor's publicly announced fee 
schedule.
    (e) The Contractor shall not charge the Government for--
    (i) Permit charges, such as vehicle registration or parking fees, 
unless specifically authorized in the request for service; and
    (ii) Any equipment, refundable deposits, or any items or services 
(such as computer time) related to student research.
    (f) Normally, the Contractor shall not directly charge individual 
students for application fees or any other fee chargeable to this 
agreement. However, if the Contractor's standard procedures require 
payment of any fee before the student is enrolled under this agreement, 
the Contractor may charge the student. When the Contractor receives 
payment from the Government, the Contractor shall fully reimburse the 
student.
    (g) For each term the Contractor enrolls students under this 
agreement, the Contractor shall submit -------- copies of an invoice 
listing charges for each student separately. The Contractor shall submit 
invoices within -------- days after the start of the term and shall 
include--
    (i) Agreement number and inclusive dates of the term;
    (ii) Name of each student;
    (iii) A list showing each course for each student if the school 
charges by credit hour;
    (iv) The resident or nonresident status of each student (if 
applicable to the Contractor's school); and
    (v) A breakdown of charges for each student, including credit hours, 
tuition, application fee, and other fees. Provide a total for each 
student and a grand total for all students listed on the invoice.
    (h) If unforeseen events require additional charges that are 
otherwise payable under the Contractor's normal tuition and fee 
schedule, the Contractor may submit a supplemental invoice or make the 
adjustment on the next regular invoice under this agreement. The 
Contractor shall clearly identify and explain the supplemental invoice 
or the adjustment.
    (i) The Contractor shall apply any credits resulting from withdrawal 
of students, or from any other cause under its standard procedures, to 
subsequent invoices submitted under this agreement. Credits should 
appear on the first invoice submitted after the action resulting in the 
credits. If no subsequent invoice is submitted, the Contractor shall 
deliver to the Contracting Officer a check drawn to the order of the 
office designated for contract administration. The Contractor shall 
identify the reason for the credit and the applicable term dates in all 
cases.
    4. Withdrawal of students. (a) The Government may, at its option and 
at any time, withdraw financial support for any student by issuing 
official orders. The Government will furnish -------- copies of the 
orders to the Contractor within a reasonable time after publication.
    (b) The Contractor may request withdrawal by the Government of any 
student for academic or disciplinary reasons.
    (c) If withdrawal occurs before the end of a term, the Government 
will pay any tuition and fees due for the current term. The Contractor 
shall credit the Government with any charges eligible for refund under 
the Contractor's standard procedures for any students in effect on the 
date of withdrawal.
    (d) Withdrawal of students by the Government will not be the basis 
for any special charge or claim by the Contractor other than charges 
under the Contractor's standard procedures.
    5. Transcripts. Within a reasonable time after withdrawal of a 
student for any reason, or after graduation, the Contractor shall send 
to the Contracting Officer (or to an address supplied by the Contracting 
Officer) one copy of an official transcript showing all work by the 
student at the institution until such withdrawal or graduation.
    6. Student teaching. The Government does not anticipate the 
Contractor awarding fellowships and assistantships to students attending 
school under this agreement. However, for graduate students, should both 
the student and the Contractor decide it to be in the student's best 
interests to assist in the institution's teaching program, the 
Contractor may provide nominal compensation for part-time service. Base 
the compensation on the Contractor's practices and procedures for other 
students of similar accomplishment in that department or field. The 
Contractor shall apply the compensation as a credit against any invoices 
presented for payment for any period in which the student performed the 
part-time teaching service.

[[Page 249]]

    7. Termination of agreement. (a) Either party may terminate this 
agreement by giving 30 days advance written notice of the effective date 
of termination. In the event of termination, the Government shall have 
the right, at its option, to continue to receive educational services 
for those students already enrolled in the contractor's institution 
under this agreement until such time that the students complete their 
courses or curricula or the Government withdraws them from the 
Contractor's institution. The terms and conditions of this agreement in 
effect on the effective date of the termination shall continue to apply 
to such students remaining in the Contractor's institution.
    (b) Withdrawal of students under Schedule provision 4 shall not be 
considered a termination within the meaning of this provision 7.
    (c) Termination by either party shall not be the basis for any 
special charge or claim by the Contractor, other than as provided by the 
Contractor's standard procedures.

                           General Provisions

    Use the following clauses in educational service agreements:
    1. FAR 52.202-1, Definitions, and add the following paragraphs (h) 
through (m).
    (h) ``Term'' means the period of time into which the Contractor 
divides the academic year for purposes of instruction. This includes 
``semester,'' ``trimester,'' ``quarter,'' or any similar word the 
Contractor may use.
    (i) ``Course'' means a series of lectures or instructions, and 
laboratory periods, relating to one specific representation of subject 
matter, such as Elementary College Algebra, German 401, or Surveying. 
Normally, a student completes a course in one term and receives a 
certain number of semester hours credit (or equivalent) upon successful 
completion.
    (j) ``Curriculum'' means a series of courses having a unified 
purpose and belonging primarily to one major academic field. It will 
usually include certain required courses and elective courses within 
established criteria. Examples include Business Administration, Civil 
Engineering, Fine and Applied Arts, and Physics. A curriculum normally 
covers more than one term and leads to a degree or diploma upon 
successful completion.
    (k) ``Catalog'' means any medium by which the Contractor publicly 
announces terms and conditions for enrollment in the Contractor's 
institution, including tuition and fees to be charged. This includes 
``bulletin,'' ``announcement,'' or any other similar word the Contractor 
may use.
    (l) ``Tuition'' means the amount of money charged by an educational 
institution for instruction, not including fees.
    (m) ``Fees'' means those applicable charges directly related to 
enrollment in the Contractor's institution. Unless specifically allowed 
in the request for services, fees shall not include--
    (1) Any permit charge, such as parking and vehicle registration; or
    (2) Charges for services of a personal nature, such as food, 
housing, and laundry.
    2. FAR 52.203-3, Gratuities.
    3. FAR 52.203-5, Covenant Against Contingent Fees.
    4. FAR 52.204-1, Approval of Contract, if required by department/
agency procedures.
    5. FAR 52.215-2, Audit and Records--Negotiation.
    6. FAR 52.215-8, Order of Precedence--Uniform Contract Format.
    7. Conflicts Between Agreement and Catalog. Insert the following 
clause:

                 Conflicts Between Agreement and Catalog

    If there is any inconsistency between this agreement and any catalog 
or other document incorporated in this agreement by reference or any of 
the Contractor's rules and regulations, the provisions of this agreement 
shall govern.
    8. FAR 52.222-3, Convict Labor.
    9. Under FAR 22.802, FAR 22.807, and FAR 22.810, use the appropriate 
clause from FAR 52.222-26, Equal Opportunity.
    10. FAR 52.233-1, Disputes.
    11. Assignment of Claims. Insert the following clause:

                          Assignment of Claims

    No claim under this agreement shall be assigned.
    12. FAR 52.252-4, Alterations in Contract, if required by 
department/agency procedures.

                             Signature Page

Agreement No.___________________________________________________________
Date____________________________________________________________________

The United States of America
By:_____________________________________________________________________
 (Contracting Officer)
Activity________________________________________________________________
Location________________________________________________________________
 (Name of Contractor)
By:_____________________________________________________________________
(Title)_________________________________________________________________

[56 FR 36424, July 31, 1991, as amended at 60 FR 61599, Nov. 30, 1995; 
63 FR 55052, Oct. 14, 1998; 64 FR 49684, Sept. 14, 1999; 64 FR 53447, 
Oct. 1, 1999]

[[Page 250]]

    Subpart 237.73_Services of Students at Research and Development 
                              Laboratories



Sec. 237.7300  Scope.

    This subpart prescribes procedures for acquisition of temporary or 
intermittent services of students at institutions of higher learning for 
the purpose of providing technical support at Defense research and 
development laboratories (10 U.S.C. 2360).



Sec. 237.7301  Definitions.

    As used in this subpart--
    (a) Institution of higher learning means any public or private post-
secondary school, junior college, college, university, or other degree 
granting educational institution that--
    (1) Is located in the United States or its outlying areas;
    (2) Has an accredited education program approved by an appropriate 
accrediting body; and
    (3) Offers a program of study at any level beyond high school.
    (b) Nonprofit organization means any organization described by 
section 501(c)(3) of title 26 of the U.S.C. which is exempt from 
taxation under section 501(a) of title 26.
    (c) Student means an individual enrolled (or accepted for 
enrollment) at an institution of higher learning before the term of the 
student technical support contract. The individual shall remain in good 
standing in a curriculum designed to lead to the granting of a 
recognized degree, during the term of the contract.
    (d) Technical support means any scientific or engineering work in 
support of the mission of the DoD laboratory involved. It does not 
include administrative or clerical services.

[56 FR 36424, July 31, 1991, as amended at 70 FR 35545, June 21, 2005]



Sec. 237.7302  General.

    Generally, agencies will acquire services of students at 
institutions of higher learning by contract between a nonprofit 
organization employing the student and the Government. When it is in the 
best interest of the Government, contracts may be made directly with 
students. These services are not subject to the requirements of FAR part 
19, FAR 13.003(b)(1), or DFARS part 219. Award authority for these 
contracts is 10 U.S.C. 2304(a)(1) and 10 U.S.C. 2360.

[56 FR 36424, July 31, 1991, as amended at 60 FR 29500, June 5, 1995; 64 
FR 2598, Jan. 15, 1999]



Sec. 237.7303  Contract clauses.

    Contracts made directly with students are nonpersonal service 
contracts but shall include the clauses at FAR 52.232-3, Payments Under 
Personal Services Contracts, and FAR 52.249-12, Termination (Personal 
Services).

          Subpart 237.74_Services at Installations Being Closed

    Source: 59 FR 36089, July 15, 1994, unless otherwise noted.



Sec. 237.7400  Scope.

    This subpart prescribes procedures for contracting, through use of 
other than full and open competition, with local governments for police, 
fire protection, airfield operation, or other community services at 
military installations to be closed under the Defense Authorization 
Amendments and Base Closure and Realignment Act (Pub. L. 100-526), as 
amended, and the Defense Base Closure and Realignment Act of 1990 (Pub. 
L. 101-510), as amended.

[59 FR 36089, July 15, 1994, as amended at 60 FR 29500, June 5, 1995]



Sec. 237.7401  Policy.

    The authority in 206.302-5(b)(ii) to contract with local 
governments--
    (a) May be exercised without regard to the provisions of 10 U.S.C. 
Chapter 146, Contracting for Performance of Civilian Commercial or 
Industrial Type Functions;
    (b) May not be exercised earlier than 180 days before the date the 
installation is scheduled to be closed;
    (c) Requires a determination by the head of the contracting activity 
that the services being acquired under contract with the local 
government are in the best interests of the Department of Defense.
    (d) Includes the requirement of subpart 222.71, Right of First 
Refusal of Employment, unless it conflicts with

[[Page 251]]

the local government's civil service selection procedures.

[59 FR 36089, July 15, 1994, as amended at 60 FR 29500, June 5, 1995]



Sec. 237.7402  Contract clause.

    Use the clause at 252.237-7022, Services at Installations Being 
Closed, in solicitations and contracts based upon the authority of this 
subpart.

[59 FR 36089, July 15, 1994, as amended at 60 FR 29500, June 5, 1995]

             PART 239_ACQUISITION OF INFORMATION TECHNOLOGY

                          Subpart 239.1_General

Sec.

Sec. 239.101 Policy.

        Subpart 239.70_Exchange or Sale of Information Technology


Sec. 239.7001 Policy.

        Subpart 239.71_Security and Privacy for Computer Systems


Sec. 239.7100 Scope of subpart.

Sec. 239.7101 Definition.

Sec. 239.7102 Policy and responsibilities.

Sec. 239.7102-1 General.

Sec. 239.7102-2 Compromising emanations--TEMPEST or other standard.

Sec. 239.7103 Contract clause.

                        Subpart 239.72_Standards


Sec. 239.7201 Solicitation requirements.

Subpart 239.73 [Reserved]

               Subpart 239.74_Telecommunications Services


Sec. 239.7400 Scope.

Sec. 239.7401 Definitions.

Sec. 239.7402 Policy.

Sec. 239.7403-239.7404 [Reserved]

Sec. 239.7405 Delegated authority for telecommunications resources.

Sec. 239.7406 Cost or pricing data and information other than cost or 
          pricing data.

Sec. 239.7407 Type of contract.

Sec. 239.7408 Special construction.

Sec. 239.7408-1 General.

Sec. 239.7408-2 Applicability of construction labor standards for 
          special construction.

Sec. 239.7409 Special assembly.

Sec. 239.7410 Cancellation and termination.

Sec. 239.7411 Contract clauses.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36429, July 31, 1991, unless otherwise noted.

                          Subpart 239.1_General



Sec. 239.101  Policy.

    See Subpart 208.74 when acquiring commercial software or software 
maintenance.

[67 FR 65512, Oct. 25, 2002]

        Subpart 239.70_Exchange or Sale of Information Technology



Sec. 239.7001  Policy.

    Agencies shall follow the procedures in DoD 4140.1-R, DoD Supply 
Chain Materiel Management Regulation, Chapter 9, Section C9.5, when 
considering the exchange or sale of Government-owned information 
technology.

[71 FR 39010, July 11, 2006]

        Subpart 239.71_Security and Privacy for Computer Systems

    Source: 69 FR 35534, June 25, 2004, unless otherwise noted.



Sec. 239.7100  Scope of subpart.

    This subpart includes information assurance and Privacy Act 
considerations. Information assurance requirements are in addition to 
provisions concerning protection of privacy of individuals (see FAR 
Subpart 24.1).



Sec. 239.7101  Definition.

    Information assurance, as used in this subpart, means measures that 
protect and defend information, that is entered, processed, transmitted, 
stored, retrieved, displayed, or destroyed, and information systems, by 
ensuring their availability, integrity, authentication, confidentiality, 
and non-repudiation. This includes providing for the restoration of 
information systems by incorporating protection, detection, and reaction 
capabilities.



Sec. 239.7102  Policy and responsibilities.



Sec. 239.7102-1  General.

    (a) Agencies shall ensure that information assurance is provided for 
information technology in accordance with

[[Page 252]]

current policies, procedures, and statutes, to include--
    (1) The National Security Act;
    (2) The Clinger-Cohen Act;
    (3) National Security Telecommunications and Information Systems 
Security Policy No. 11;
    (4) Federal Information Processing Standards;
    (5) DoD Directive 8500.1, Information Assurance; and
    (6) DoD Instruction 8500.2, Information Assurance Implementation.
    (b) For all acquisitions, the requiring activity is responsible for 
providing to the contracting officer--
    (1) Statements of work, specifications, or statements of objectives 
that meet information assurance requirements as specified in paragraph 
(a) of this subsection;
    (2) Inspection and acceptance contract requirements; and
    (3) A determination as to whether the information technology 
requires protection against compromising emanations.



Sec. 239.7102-2  Compromising emanations--TEMPEST or other standard.

    For acquisitions requiring information assurance against 
compromising emanations, the requiring activity is responsible for 
providing to the contracting officer--
    (a) The required protections, i.e., an established National TEMPEST 
standard (e.g., NACSEM 5100, NACSIM 5100A) or a standard used by other 
authority;
    (b) The required identification markings to include markings for 
TEMPEST or other standard, certified equipment (especially if to be 
reused);
    (c) Inspection and acceptance requirements addressing the validation 
of compliance with TEMPEST or other standards; and
    (d) A date through which the accreditation is considered current for 
purposes of the proposed contract.



Sec. 239.7103  Contract clause.

    Use the clause at 252.239-7000, Protection Against Compromising 
Emanations, in solicitations and contracts involving information 
technology that requires protection against compromising emanations.

                        Subpart 239.72_Standards



Sec. 239.7201  Solicitation requirements.

    Contracting officers shall ensure that all applicable Federal 
Information Processing Standards are incorporated into solicitations.

[71 FR 39011, July 11, 2006]

Subpart 239.73 [Reserved]

               Subpart 239.74_Telecommunications Services



Sec. 239.7400  Scope.

    This subpart prescribes policy and procedures for acquisition of 
telecommunications services and maintenance of telecommunications 
security. Telecommunications services meet the definition of information 
technology.

[62 FR 1060, Jan. 8, 1997, as amended at 71 FR 39011, July 11, 2006]



Sec. 239.7401  Definitions.

    As used in this subpart--
    (a) Common carrier means any entity engaged in the business of 
providing telecommunications services which are regulated by the Federal 
Communications Commission or other governmental body.
    (b) Foreign carrier means any person, partnership, association, 
joint-stock company, trust, governmental body, or corporation not 
subject to regulation by a U.S. governmental regulatory body and not 
doing business as a citizen of the United States, providing 
telecommunications services outside the territorial limits of the United 
States.
    (c) Governmental regulatory body means the Federal Communications 
Commission, any statewide regulatory body, or any body with less than 
statewide jurisdiction when operating under the State authority. The 
following are not ``governmental regulatory bodies''--
    (1) Regulatory bodies whose decisions are not subject to judicial 
appeal; and
    (2) Regulatory bodies which regulate a company owned by the same 
entity which creates the regulatory body.

[[Page 253]]

    (d) Noncommon carrier means any entity other than a common carrier 
offering telecommunications facilities, services, or equipment for 
lease.
    (e) Securing, sensitive information, and telecommunications systems 
have the meaning given in the clause at 252.239-7016, Telecommunications 
Security Equipment, Devices, Techniques, and Services.
    (f) Telecommunications means the transmission, emission, or 
reception of signals, signs, writing, images, sounds, or intelligence of 
any nature, by wire, cable, satellite, fiber optics, laser, radio, or 
any other electronic, electric, electromagnetic, or acoustically coupled 
means.
    (g) Telecommunications services means the services acquired, whether 
by lease or contract, to meet the Government's telecommunications needs. 
The term includes the telecommunications facilities and equipment 
necessary to provide such services.

[56 FR 36429, July 31, 1991, as amended at 70 FR 67918, Nov. 9, 2005]



Sec. 239.7402  Policy.

    (a) Acquisition. DoD policy is to acquire telecommunications 
services from common and noncommon telecommunications carriers--
    (1) On a competitive basis, except when acquisition using other than 
full and open competition is justified;
    (2) Recognizing the regulations, practices, and decisions of the 
Federal Communications Commission (FCC) and other governmental 
regulatory bodies on rates, cost principles, and accounting practices; 
and
    (3) Making provision in telecommunications services contracts for 
adoption of--
    (i) FCC approved practices; or
    (ii) The generally accepted practices of the industry on those 
issues concerning common carrier services where--
    (A) The governmental regulatory body has not expressed itself;
    (B) The governmental regulatory body has declined jurisdiction; or
    (C) There is no governmental regulatory body to decide.
    (b) Security. (1) The contracting officer shall ensure, in 
accordance with agency procedures, that purchase requests identify--
    (i) The nature and extent of information requiring security during 
telecommunications;
    (ii) The requirement for the contractor to secure telecommunications 
systems;
    (iii) The telecommunications security equipment, devices, 
techniques, or services with which the contractor's telecommunications 
security equipment, devices, techniques, or services must be 
interoperable; and
    (iv) The approved telecommunications security equipment, devices, 
techniques, or services, such as found in the National Security Agency's 
Information Systems Security Products and Services Catalogue.
    (2) Contractors and subcontractors shall provide all 
telecommunications security techniques or services required for 
performance of Government contracts.
    (3) Except as provided in paragraph (b)(4) of this subsection, 
contractors and subcontractors shall normally provide all required 
telecommunications security equipment or devices as plant equipment in 
accordance with FAR part 45. In some cases, such as for communications 
security (COMSEC) equipment designated as controlled cryptographic item 
(CCI), contractors or subcontractors must also meet ownership 
eligibility conditions.
    (4) When the contractor or subcontractor does not meet ownership 
eligibility conditions, the head of the agency may authorize provision 
of the necessary facilities as Government-furnished property or 
acquisition as contractor-acquired property, as long as conditions of 
FAR 45.303 are met.
    (c) Foreign carriers. For information on contracting with foreign 
carriers, see PGI 239.7402(c).

[56 FR 36429, July 31, 1991, as amended at 56 FR 67220, Dec. 30, 1991; 
62 FR 1060, Jan. 8, 1997; 71 FR 39011, July 11, 2006]



Sec. 239.7403-239.7404  [Reserved]



Sec. 239.7405  Delegated authority for telecommunications resources.

    The contracting officer may enter into a telecommunications service 
contract on a month-to-month basis or for

[[Page 254]]

any longer period or series of periods, not to exceed a total of 10 
years. See PGI 239.7405 for documents relating to this contracting 
authority, which the General Services Administration has delegated to 
DoD.

[70 FR 67918, Nov. 9, 2005]



Sec. 239.7406  Cost or pricing data and information other than cost or 
          pricing data.

    (a) Common carriers are not required to submit cost or pricing data 
before award of contracts for tariffed services. Rates or preliminary 
estimates quoted by a common carrier for tariffed telecommunications 
services are considered to be prices set by regulation within the 
provisions of 10 U.S.C. 2306a. This is true even if the tariff is set 
after execution of the contract.
    (b) Rates or preliminary estimates quoted by a common carrier for 
nontariffed telecommunications services or by a noncommon carrier for 
any telecommunications service are not considered prices set by law or 
regulation.
    (c) Contracting officers shall obtain sufficient information to 
determine that the prices are reasonable in accordance with FAR 15.403-3 
or 15.403-4. See PGI 239.7406 for examples of instances where additional 
information may be necessary to determine price reasonableness.

[62 FR 40473, July 29, 1997, as amended at 63 FR 11539, Mar. 9, 1998; 70 
FR 67919, Nov. 9, 2005; 71 FR 39011, July 11, 2006]



Sec. 239.7407  Type of contract.

    When acquiring telecommunications services, the contracting officer 
may use a basic agreement (see FAR 16.702) in conjunction with 
communication service authorizations. When using this method, follow the 
procedures at PGI 239.7407.

[71 FR 27646, May 12, 2006]



Sec. 239.7408  Special construction.



Sec. 239.7408-1  General.

    (a) Special construction normally involves a common carrier giving a 
special service or facility related to the performance of the basic 
telecommunications service requirements.
    This may include--
    (1) Moving or relocating equipment;
    (2) Providing temporary facilities;
    (3) Expediting provision of facilities; or
    (4) Providing specially constructed channel facilities to meet 
Government requirements.
    (b) Use this subpart instead of FAR part 36 for acquisition of 
``special construction.''
    (c) Special construction costs may be--
    (1) A contingent liability for using telecommunications services for 
a shorter time than the minimum to reimburse the contractor for 
unamortized nonrecoverable costs. These costs are usually expressed in 
terms of a termination liability, as provided in the contract or by 
tariff;
    (2) A onetime special construction charge;
    (3) Recurring charges for constructed facilities;
    (4) A minimum service charge;
    (5) An expediting charge; or
    (6) A move or relocation charge.
    (d) When a common carrier submits a proposal or quotation which has 
special construction requirements, the contracting officer shall require 
a detailed special construction proposal. Analyze all special 
construction proposals to--
    (1) Determine the adequacy of the proposed construction;
    (2) Disclose excessive or duplicative construction; and
    (3) When different forms of charge are possible, provide for the 
form of charge most advantageous to the Government.
    (e) When possible, analyze and approve special construction charges 
before receiving the service. Impose a ceiling on the special 
construction costs before authorizing the contractor to proceed, if 
prior approval is not possible. The contracting officer must approve 
special construction charges before final payment.

[56 FR 36429, July 31, 1991, as amended at 71 FR 39011, July 11, 2006]



Sec. 239.7408-2  Applicability of construction labor standards for 
          special construction.

    (a) The construction labor standards in FAR Subpart 22.4 ordinarily 
do not apply to special construction. However,

[[Page 255]]

if the special construction includes construction, alteration, or repair 
(as defined in FAR 22.401) of a public building or public work, the 
construction labor standards may apply. Determine applicability under 
FAR 22.402.
    (b) Each CSA or other type contract which is subject to construction 
labor standards under FAR 22.402 shall cite that fact.

[56 FR 36429, July 31, 1991, as amended at 71 FR 39011, July 11, 2006]



Sec. 239.7409  Special assembly.

    (a) Special assembly is the designing, manufacturing, arranging, 
assembling, or wiring of equipment to provide telecommunications 
services that cannot be provided with general use equipment.
    (b) Special assembly rates and charges shall be based on estimated 
costs. The contracting officer should negotiate special assembly rates 
and charges before starting service. When it is not possible to 
negotiate in advance, use provisional rates and charges subject to 
adjustment, until final rates and charges are negotiated. The CSAs 
authorizing the special assembly shall be modified to reflect negotiated 
final rates and charges.

[56 FR 36429, July 31, 1991, as amended at 71 FR 39011, July 11, 2006]



Sec. 239.7410  Cancellation and termination.

    (a)(1) Cancellation is stopping a requirement after placing of an 
order but before service starts.
    (2) Termination is stopping a requirement after placing an order and 
after service starts.
    (b) Determine cancellation or termination charges under the 
provisions of the applicable tariff or agreement/contract.



Sec. 239.7411  Contract clauses.

    (a) In addition to other appropriate FAR and DFARS clauses, use the 
following clauses in solicitations, contracts, and basic agreements for 
telecommunications services. Modify the clauses only if necessary to 
meet the requirements of a governmental regulatory agency--
    (1) 252.239-7002, Access;
    (2) 252.239-7004, Orders for Facilities and Services;
    (3) 252.239-7005, Rates, Charges, and Services;
    (4) 252.239-7006, Tariff Information;
    (5) 252.239-7007, Cancellation or Termination of Orders;
    (6) 252.239-7008, Reuse Arrangements.
    (b) Use the following clauses in solicitations, contracts, and basic 
agreements for telecommunications services when the acquisition includes 
or may include special construction. Modify the clauses only if 
necessary to meet the requirements of a governmental regulatory agency--
    (1) 252.239-7011, Special Construction and Equipment Charges; and
    (2) 252.239-7012, Title to Telecommunication Facilities and 
Equipment.
    (c) Use the following clauses in basic agreements for 
telecommunications services--
    (1) 252.239-7013, Obligation of the Government;
    (2) 252.239-7014, Term of Agreement, and insert the effective date 
of the agreement in paragraph (a) of the clause; and
    (3) 252.239-7015, Continuation of Communication Service 
Authorizations, as appropriate, and insert in paragraph (a) of the 
clause, the name of the contracting office and the basic agreement or 
contract number which is being superseded.
    (d) Use the clause at 252.239-7016, Telecommunications Security 
Equipment, Devices, Techniques, and Services, in solicitations and 
contracts when performance of a contract requires secure 
telecommunications.

[56 FR 36429, July 31, 1991, as amended at 57 FR 42632, Sept. 15, 1992; 
62 FR 40473, July 29, 1997; 70 FR 67919, Nov. 9, 2005; 71 FR 39011, July 
11, 2006]

                PART 241_ACQUISITION OF UTILITY SERVICES

                          Subpart 241.1_General

Sec.

Sec. 241.101 Definitions.

Sec. 241.102 Applicability.

Sec. 241.103 Statutory and delegated authority.

[[Page 256]]

                Subpart 241.2_Acquiring Utility Services


Sec. 241.201 Policy.

Sec. 241.202 Procedures.

Sec. 241.205 Separate contracts.

        Subpart 241.5_Solicitation Provision and Contract Clauses


Sec. 241.501 Solicitation provision and contract clauses.

Sec. 241.501-70 Additional clauses.

    Authority: 48 U.S.C. 421 and 48 CFR Chapter 1.

    Source: 63 FR 11539, Mar. 9, 1998, unless otherwise noted.

                          Subpart 241.1_General



Sec. 241.101  Definitions.

    As used in this part--
    Independent regulatory body means the Federal Energy Regulatory 
Commission, a state-wide agency, or an agency with less than state-wide 
jurisdiction when operating pursuant to state authority. The body has 
the power to fix, establish, or control the rates and services of 
utility suppliers.
    Nonindependent regulatory body means a body that regulates a utility 
supplier which is owned or operated by the same entity that created the 
regulatory body, e.g., a municipal utility.
    Regulated utility supplier means a utility supplier regulated by an 
independent regulatory body.
    Service power procurement officer means for the--
    (1) Army, the Chief of Engineers;
    (2) Navy, the Commander, Naval Facilities Engineering Command;
    (3) Air Force, the head of a contracting activity; and
    (4) Defense Logistics Agency, the head of a contracting activity.

[63 FR 11539, Mar. 9, 1998, as amended at 71 FR 3417, Jan. 23, 2006]



Sec. 241.102  Applicability.

    (a) This part applies to purchase of utility services from 
nonregulated and regulated utility suppliers. It includes the 
acquisition of liquefied petroleum gas as a utility service when 
purchased from regulated utility suppliers.
    (b)(7) This part does not apply to third party financed projects. 
However, it may be used for any purchased utility services directly 
resulting from such projects, including those authorized by--
    (A) 10 U.S.C. 2394 for energy, fuels, and energy production 
facilities for periods not to exceed 30 years;
    (B) 10 U.S.C. 2394a for renewable energy for periods not to exceed 
25 years;
    (C) 10 U.S.C. 2689 for geothermal resources that result in energy 
production facilities;
    (D) 10 U.S.C. 2809 for potable and waste water treatment plants for 
periods not to exceed 32 years; and
    (E) 10 U.S.C. 2812 for lease/purchase of energy production 
facilities for periods not to exceed 32 years.



Sec. 241.103  Statutory and delegated authority.

    (1) The contracting officer may enter into a utility service 
contract related to the conveyance of a utility system for a period not 
to exceed 50 years (10 U.S.C. 2688(c)(3)).
    (2) See PGI 241.103 for statutory authorities and maximum contract 
periods for utility and energy contracts.

[71 FR 3417, Jan. 23, 2006]

                Subpart 241.2_Acquiring Utility Services



Sec. 241.201  Policy.

    (1) DoD, as a matter of comity, generally complies with the current 
regulations, practices, and decisions of independent regulatory bodies. 
This policy does not extend to nonindependent regulatory bodies.
    (2) Purchases of utility services outside the United States may 
use--
    (i) Formats and technical provisions consistent with local practice; 
and
    (ii) Dual language forms and contracts.
    (3) Rates established by an independent regulatory body--
    (i) Are considered ``prices set by law or regulation'';
    (ii) Are sufficient to set prices without obtaining cost or pricing 
data (see FAR Subpart 15.4); and
    (iii) Are a valid basis on which prices can be determined fair and 
reasonable.
    (4) Compliance with the regulations, practices, and decisions of 
independent

[[Page 257]]

regulatory bodies as a matter of comity is not a substitute for the 
procedures at FAR 41.202(a).

[71 FR 3418, Jan. 23, 2006]



Sec. 241.202  Procedures.

    (1) Connection and service charges. The Government may pay a 
connection charge when required to cover the cost of the necessary 
connecting facilities. A connection charge based on the estimated labor 
cost of installing and removing the facility shall not include salvage 
cost. A lump-sum connection charge shall be no more than the agreed cost 
of the connecting facilities less net salvage. The order of precedence 
for contractual treatment of connection and service charges is--
    (i) No connection charge.
    (ii) Termination liability. Use when an obligation is necessary to 
secure the required services. The obligation must be not more than the 
agreed connection charge, less any net salvage material costs. Use of a 
termination liability instead of a connection charge requires the 
approval of the service power procurement officer or designee.
    (iii) Connection charge, refundable. Use a refundable connection 
charge when the supplier refuses to provide the facilities based on lack 
of capital or published rules which prohibit providing up-front funding. 
The contract should provide for refund of the connection charge within 
five years unless a longer period or omission of the refund requirement 
is authorized by the service power procurement officer or designee.
    (iv) Connection and service charges, nonrefundable. The Government 
may pay certain nonrefundable, nonrecurring charges including service 
initiation charges, a contribution in aid of construction, membership 
fees, and charges required by the supplier's rules and regulations to be 
paid by the customer. If possible, consider sharing with other than 
Government users the use of (and costs for) facilities when large 
nonrefundable charges are required.
    (2) Construction and labor requirements. Follow the procedures at 
PGI 241.202(2) for construction and labor requirements associated with 
connection and service charges.

[71 FR 3417, Jan. 23, 2006]



Sec. 241.205  Separate contracts.

    Follow the procedures at PGI 241.205 when acquiring utility services 
by separate contract.

[71 FR 3417, Jan. 23, 2006]

        Subpart 241.5_Solicitation Provision and Contract Clauses



Sec. 241.501  Solicitation provision and contract clauses.

    (d)(1) Use a clause substantially the same as the clause at FAR 
52.241-7, Change in Rates or Terms and Conditions of Service for 
Regulated Services, when the utility services to be provided are subject 
to an independent regulatory body.
    (2) Use a clause substantially the same as the clause at FAR 52.241-
8, Change in Rates or Terms and Conditions of Service for Unregulated 
Services, when the utility services to be provided are not subject to a 
regulatory body or are subject to a nonindependent regulatory body.

[71 FR 3418, Jan. 23, 2006]



Sec. 241.501-70  Additional clauses.

    (a) If the Government must execute a superseding contract and 
capital credits, connection charge credits, or termination liability 
exist, use the clause at 252.241-7000, Superseding Contract.
    (b) Use the clause at 252.241-70001, Government Access, when the 
clause at FAR 52.241-5, Contractor's Facilities, is used.

[[Page 258]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

           PART 242_CONTRACT ADMINISTRATION AND AUDIT SERVICES

Sec.

Sec. 242.002 Interagency agreements.

             Subpart 242.2_Contract Administration Services


Sec. 242.200-70 Scope of subpart.

Sec. 242.202 Assignment of contract administration.

         Subpart 242.3_Contract Administration Office Functions


Sec. 242.301 General.

Sec. 242.302 Contract administration functions.

                   Subpart 242.5_Postaward Orientation


Sec. 242.503 Postaward conferences.

Sec. 242.503-2 Post-award conference procedure.

       Subpart 242.6_Corporate Administrative Contracting Officer


Sec. 242.602 Assignment and location.

                    Subpart 242.7_Indirect Cost Rates


Sec. 242.705 Final indirect cost rates.

Sec. 242.705-1 Contracting officer determination procedure.

Sec. 242.705-2 Auditor determination procedure.

Sec. 242.771 Independent research and development and bid and proposal 
          costs.

Sec. 242.771-1 Scope.

Sec. 242.771-2 Policy.

Sec. 242.771-3 Responsibilities.

                   Subpart 242.8_Disallowance of Costs


Sec. 242.803 Disallowing costs after incurrence.

          Subpart 242.11_Production Surveillance and Reporting


Sec. 242.1104 Surveillance requirements.

Sec. 242.1105 Assignment of criticality designator.

Sec. 242.1106 Reporting requirements.

Sec. 242.1107 Contract clause.

Sec. 242.1107-70 Solicitation provision and contract clause.

          Subpart 242.12_Novation and Change-of-Name Agreements


Sec. 242.1203 Processing agreements.

Sec. 242.1204 Agreement to recognize a successor in interest (novation 
          agreement).

          Subpart 242.14_Traffic and Transportation Management


Sec. 242.1402 Volume movements within the contiguous United States.

Sec. 242.1404 Shipments by parcel post or other classes of mail.

Sec. 242.1404-1 Parcel post eligible shipments.

Sec. 242.1404-2 Contract clauses.

Sec. 242.1404-2-70 Additional clause.

Sec. 242.1405 Discrepancies incident to shipment of supplies.

Sec. 242.1470 Demurrage and detention charges.

Subpart 242.70 [Reserved]

                    Subpart 242.71_Voluntary Refunds


Sec. 242.7100 General.

   Subpart 242.72_Contractor Material Management and Accounting System


Sec. 242.7200 Scope of subpart.

Sec. 242.7201 Definitions.

Sec. 242.7202 Policy.

Sec. 242.7203 Review procedures.

Sec. 242.7204 Contract clause.

           Subpart 242.73_Contractor Insurance/Pension Review


Sec. 242.7301 General.

Sec. 242.7302 Requirements.

Sec. 242.7303 Responsibilities.

    Subpart 242.74_Technical Representation at Contractor Facilities


Sec. 242.7400 General.

Sec. 242.7401 Procedures.

    Subpart 242.75_Contractor Accounting Systems and Related Controls


Sec. 242.7501 Policy.

Sec. 242.7502 Procedures.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36437, July 31, 1991, unless otherwise noted.



Sec. 242.002  Interagency agreements.

    (b)(i) DoD requires reimbursement, at a rate set by the Under 
Secretary of Defense (Comptroller/Chief Financial Officer), from non-DoD 
organizations, except for--

[[Page 259]]

    (A) Quality assurance, contract administration, and audit services 
provided under a no-charge reciprocal agreement;
    (B) Services performed under subcontracts awarded by the Small 
Business Administration under FAR subpart 19.8; and
    (C) Quality assurance and pricing services performed for the Supply 
and Services Canada.
    (ii) Departments and agencies may request an exception from the 
reimbursement policy in paragraph (b)(i) of this section from the Under 
Secretary of Defense (Comptroller/Chief Financial Officer). A request 
must show that an exception is in the best interest of the Government.
    (iii) Departments and agencies must pay for services performed by 
non-DoD activities, foreign governments, or international organizations, 
unless otherwise provided by reciprocal agreements.
    (S-70)(i) Foreign governments and international organizations may 
request contract administration services on their direct purchases from 
U.S. producers. Direct purchase is the purchase of defense supplies in 
the United States through commercial channels for use by the foreign 
government or international organization.
    (ii) Supply and Services Canada (SSC) is permitted to submit its 
requests for contract administration services directly to the cognizant 
contract administration office.
    (iii) Other foreign governments (including Canadian government 
organizations other than SSC) and international organizations send their 
requests for contract administration services to the DoD Central Control 
Point (CCP) at the Headquarters, Defense Contract Management Agency, 
International and Federal Business Team. Contract administration offices 
provide services only upon request from the CCP. The CCP shall follow 
the procedures at PGI 242.002(S-70)(iii).

[64 FR 61029, Nov. 9, 1999, as amended at 65 FR 52952, Aug. 31, 2000; 65 
FR 63804, Oct. 25, 2000; 70 FR 67920, Nov. 9, 2005]

             Subpart 242.2_Contract Administration Services

    Source: 64 FR 61029, Nov. 9, 1999, unless otherwise noted.



Sec. 242.200-70  Scope of subpart.

    This subpart does not address the contract administration role of a 
contracting officer's representative (see 201.602).



Sec. 242.202  Assignment of contract administration.

    (a)(i) DoD activities shall not retain any contract for 
administration that requires performance of any contract administration 
function at or near contractor facilities, except contracts for--
    (A) The National Security Agency;
    (B) Research and development with universities;
    (C) Flight training;
    (D) Management and professional support services;
    (E) Mapping, charting, and geodesy services;
    (F) Base, post, camp, and station purchases;
    (G) Operation or maintenance of, or installation of equipment at, 
radar or communication network sites;
    (H) Communications services;
    (I) Installation, operation, and maintenance of space-track sensors 
and relays;
    (J) Dependents Medicare program contracts;
    (K) Stevedoring contracts;
    (L) Construction and maintenance of military and civil public works, 
including harbors, docks, port facilities, military housing, development 
of recreational facilities, water resources, flood control, and public 
utilities;
    (M) Architect-engineer services;
    (N) Airlift and sealift services (Air Mobility Command and Military 
Sealift Command may perform contract administration services at 
contractor locations involved solely in performance of airlift or 
sealift contracts);
    (O) Subsistence supplies;
    (P) Ballistic missile sites (contract administration offices may 
perform supporting administration of these contracts at missile 
activation sites during the installation, test, and

[[Page 260]]

checkout of the missiles and associated equipment);
    (Q) Operation and maintenance of, or installation of equipment at, 
military test ranges, facilities, and installations; and
    (R) The Defense Energy Support Center, Defense Logistics Agency.
    (ii) Contract administration functions for base, post, camp, and 
station contracts on a military installation are normally the 
responsibility of the installation or tenant commander. However, the 
Defense Contract Management Agency (DCMA) shall, upon request of the 
military department, and subject to prior agreement, perform contract 
administration services on a military installation.
    (iii) DCMA shall provide preaward survey assistance for post, camp, 
and station work performed on a military installation. The contracting 
office and the DCMA preaward survey monitor should jointly determine the 
scope of the survey and individual responsibilities.
    (iv) To avoid duplication, contracting offices shall not locate 
their personnel at contractor facilities, except--
    (A) In support of contracts retained for administration in 
accordance with paragraph (a)(i) of this section; or
    (B) As permitted under subpart 242.74.
    (e)(1)(A) In special circumstances, a contract administration office 
may request support from a component not listed in the Federal Directory 
of Contract Administration Services Components (available via the 
Internet at http://home.dcma.mil/casbook/casbook.htm). An example is a 
situation where the contractor's work site is on a military base and a 
base organization is asked to provide support. Before formally sending 
the request, coordinate with the office concerned to ensure that 
resources are available for, and capable of, providing the support.
    (B) When requesting support on a subcontract that includes foreign 
contract military sale (FMS) requirements, the contract administration 
office shall--
    (1) Mark ``FMS Requirement'' on the face of the documents; and
    (2) For each FMS case involved, provide the FMS case identifier, 
associated item quantities, DoD prime contract number, and prime 
contract line/subline item number.

[64 FR 61029, Nov. 9, 1999, as amended at 65 FR 52953, Aug. 31, 2000; 66 
FR 49861, Oct. 1, 2001; 66 FR 63335, Dec. 6, 2001; 70 FR 52034, Sept. 1, 
2005; 70 FR 67920, Nov. 9, 2005]

         Subpart 242.3_Contract Administration Office Functions



Sec. 242.301  General.

    Contract administration services performed outside the U.S. should 
be performed in accordance with FAR 42.301 unless there are no policies 
and procedures covering a given situation. In this case, coordinate 
proposed actions with the appropriate U.S. country teams or commanders 
of unified and specified commands.



Sec. 242.302  Contract administration functions.

    (a)(4) Also, review and evaluate--
    (A) Contractor estimating systems (see FAR 15.407-5); and
    (B) Contractor material management and accounting systems under 
subpart 242.72.
    (7) See 242.7502 for ACO responsibilities with regard to receipt of 
an audit report identifying significant accounting system or related 
internal control deficiencies.
    (9) For additional contract administration functions related to 
IR&D/B&P projects performed by major contractors, see 242.771-3(a).
    (12) Also perform all payment administration in accordance with any 
applicable payment clauses.
    (13)(A) Do not delegate the responsibility to make payments to the 
Defense Contract Management Agency (DCMA).
    (B) Follow the procedures at PGI 242.302(a)(13)(B) for designation 
of payment offices.
    (39) See 223.370 for contract administration responsibilities on 
contracts for ammunition and explosives.
    (67) Also support program offices and buying activities in 
precontractual efforts leading to a solicitation or award.
    (S-70) Serve as the single point of contact for all Single Process 
Initiative (SPI) Management Council activities. The ACO shall negotiate 
and execute facilitywide class modifications

[[Page 261]]

and agreements for SPI processes, when authorized by the affected 
components.
    (S-71) DCMA has responsibility for reviewing earned value management 
system (EVMS) plans and for verifying initial and continuing contractor 
compliance with DoD EVMS criteria. The contracting officer shall not 
retain this function.
    (b)(S-70) Issue, negotiate, and execute orders under basic ordering 
agreements for overhaul, maintenance, and repair.

[71 FR 44928, Aug. 8, 2006]

                   Subpart 242.5_Postaward Orientation



Sec. 242.503  Postaward conferences.



Sec. 242.503-2  Post-award conference procedure.

    DD Form 1484, Post-Award Conference Record, may be used in 
conducting the conference and in preparing the conference report.

[70 FR 67920, Nov. 9, 2005]

       Subpart 242.6_Corporate Administrative Contracting Officer



Sec. 242.602  Assignment and location.

    (c)(2) If the agencies cannot agree, refer the matter to the 
Director of Defense Procurement and Acquisition Policy.

[56 FR 36437, July 31, 1991, as amended at 68 FR 7440, Feb. 14, 2003]

                    Subpart 242.7_Indirect Cost Rates



Sec. 242.705  Final indirect cost rates.



Sec. 242.705-1  Contracting officer determination procedure.

    (a) Applicability and responsibility. (1) The corporate 
administrative contracting officer and individual administrative 
contracting officers shall jointly decide how to conduct negotiations. 
Follow the procedures at PGI 242.705-1(a)(1) when negotiations are 
conducted on a coordinated basis.

[70 FR 67920, Nov. 9, 2005]



Sec. 242.705-2  Auditor determination procedure.

    (b) Procedures.
    (2)(iii) When agreement cannot be reached with the contractor, the 
auditor will issue a DCAA Form 1, Notice of Contract Costs Suspended 
and/or Disapproved, in addition to the advisory report to the 
administrative contracting officer.

[56 FR 36437, July 31, 1991, as amended at 60 FR 61599, Nov. 30, 1995; 
64 FR 61030, Nov. 9, 1999; 70 FR 67920, Nov. 9, 2005]



Sec. 242.771  Independent research and development and bid and proposal 
          costs.



Sec. 242.771-1  Scope.

    This section implements 10 U.S.C. 2372, Independent research and 
development and bid and proposal costs: Payments to contractors.

[64 FR 8730, Feb. 23, 1999]



Sec. 242.771-2  Policy.

    Defense contractors are encouraged to engage in independent research 
and development and bid and proposal (IR&D/B&P) activities of potential 
interest to DoD, including activities cited in 231.205-18(c)(iii)(B).

[64 FR 8730, Feb. 23, 1999]



Sec. 242.771-3  Responsibilities.

    (a) The cognizant administrative contracting officer (ACO) or 
corporate ACO shall--
    (1) Determine cost allowability of IR&D/B&P costs as set forth in 
231.205-18 and FAR 31.205-18.
    (2) Determine whether IR&D/B&P projects performed by major 
contractors (see 231.205-18(a)) are of potential interest to DoD; and
    (3) Notify the contractor promptly of any IR&D/B&P activities that 
are not of potential interest to DoD.
    (b) The Defense Contract Management Agency or the military 
department responsible for performing contract administration functions 
is responsible for providing the Defense Contract Audit Agency (DCAA) 
with IR&D/B&P statistical information, as necessary, to assist DCAA in 
the annual report required by paragraph (c) of this subsection.

[[Page 262]]

    (c) DCAA is responsible for submitting an annual report to the 
Director of Defense Procurement and Acquisition Policy, Office of the 
Under Secretary of Defense (Acquisition, Technology, and Logistics (OUSD 
(AT&L))) setting forth required statistical information relating to the 
DoD-wide IR&D/B&P program.
    (d) The Director, Defense Research and Engineering 
(OUSD(AT&L)DDR&E), is responsible for establishing a regular method for 
communication--
    (1) From DoD to contractors, of timely and comprehensive information 
regarding planned or expected DoD future needs; and
    (2) From contractors to DoD, of brief technical descriptions of 
contractor IR&D projects.

[64 FR 8730, Feb. 23, 1999, as amended at 65 FR 39706, June 27, 2000; 65 
FR 52953, Aug. 31, 2000; 68 FR 7440, Feb. 14, 2003]

                   Subpart 242.8_Disallowance of Costs



Sec. 242.803  Disallowing costs after incurrence.

    (a) Contracting officer receipt of vouchers. Contracting officer 
receipt of vouchers is applicable only for cost-reimbursement contracts 
with the Canadian Commercial Corporation. See 225.870-5(b) for invoice 
procedures.
    (b) Auditor receipt of voucher.
    (i) The contract auditor is the authorized representative of the 
contracting officer for--
    (A) Receiving vouchers from contractors;
    (B) Approving interim vouchers for provisional payment (this 
includes approving the fee portion of vouchers in accordance with the 
contract schedule and administrative contracting officer instructions) 
and sending them to the disbursing office;
    (C) Authorizing direct submission of interim vouchers for 
provisional payment to the disbursing office for contractors with 
approved billing systems;
    (D) Reviewing completion/final vouchers and sending them to the 
administrative contracting officer; and
    (E) Issuing DCAA Forms 1, Notice of Contract Costs Suspended and/or 
Disapproved, to deduct costs where allowability is questionable.
    (ii) The administrative contracting officer--
    (A) Approves all completion/final vouchers and sends them to the 
disbursing officer; and
    (B) May issue or direct the issuance of DCAA Form 1 on any cost when 
there is reason to believe it should be suspended or disallowed.

[61 FR 25409, May 21, 1996, as amended at 61 FR 25409, May 21, 1996; 61 
FR 50454, Sept. 26, 1996]

          Subpart 242.11_Production Surveillance and Reporting



Sec. 242.1104  Surveillance requirements.

    (a) The cognizant contract administration office (CAO)--
    (i) Shall perform production surveillance on all contractors that 
have Criticality Designator A or B contracts;
    (ii) Shall not perform production surveillance on contractors that 
have only Criticality Designator C contracts, unless specifically 
requested by the contracting officer; and
    (iii) When production surveillance is required, shall--
    (A) Conduct a periodic risk assessment of the contractor to 
determine the degree of production surveillance needed for all contracts 
awarded to that contractor. The risk assessment shall consider 
information provided by the contractor and the contracting officer;
    (B) Develop a production surveillance plan based on the risk level 
determined during a risk assessment;
    (C) Modify the production surveillance plan to incorporate any 
special surveillance requirements for individual contracts, including 
any requirements identified by the contracting officer; and
    (D) Monitor contract progress and identify potential contract 
delinquencies in accordance with the production surveillance plan. 
Contracts with Criticality Designator C are exempt from this requirement 
unless specifically requested by the contracting officer.

[69 FR 31912, June 8, 2004]

[[Page 263]]



Sec. 242.1105  Assignment of criticality designator.

    (1) Contracting officers shall--
    (i) Assign criticality designator A to items with a priority 01, 02, 
03, or 06 (if emergency supply of clothing) under DoD 4140.1-R, DoD 
Materiel Management Regulation; and
    (ii) Ordinarily assign criticality designator C to unilateral 
purchase orders.
    (2) Only the contracting officer shall change the assigned 
designator.

[56 FR 36437, July 31, 1991, as amended at 67 FR 61516, Oct. 1, 2002]



Sec. 242.1106  Reporting requirements.

    (a) See DoDI 5000.2, Operation of the Defense Acquisition System, 
for reporting requirements for defense technology projects and 
acquisition programs. Table E3.T2. of DoDI 5000.2 specifies the earned 
value management system (EVMS) thresholds. When an offeror proposes an 
EVMS plan, follow the review procedures at PGI 242.1106(a). The Defense 
Acquisition Guidebook provides additional guidance on earned value 
management and identifies when cost/schedule status reports are 
applicable.
    (b)(i) Within four working days after receipt of the contractor's 
report, the CAO must provide the report and any required comments to the 
contracting officer and, unless otherwise specified in the contract, the 
inventory control manager.
    (ii) If the contractor's report indicates that the contract is on 
schedule and the CAO agrees, the CAO does not need to add further 
comments. In all other cases, the CAO must add comments and recommend a 
course of action.

[65 FR 39723, June 27, 2000, as amended at 70 FR 14575, Mar. 23, 2005]



Sec. 242.1107  Contract clause.

    (b) When using the clause at FAR 52.242-2, include the following 
instructions in the contract schedule--
    (i) Frequency and timing of reporting (normally 5 working days after 
each reporting period);
    (ii) Contract line items, exhibits, or exhibit line items requiring 
reports;
    (iii) Offices (with addressees/codes) where reports should be sent 
(always include the contracting office and contract administration 
office); and
    (iv) The following requirements for report content--
    (A) The problem, actual or potential, and its cause;
    (B) Items and quantities affected;
    (C) When the delinquency started or will start;
    (D) Actions taken to overcome the delinquency;
    (E) Estimated recovery date; and/or
    (F) Proposed schedule revision.



Sec. 242.1107-70  Solicitation provisions and contract clauses.

    (a) When the Government requires contractor compliance with DoD 
earned value management system criteria--
    (1) Use the provision at 252.242-7001, Notice of Earned Value 
Management System, in solicitations; and
    (2) Use the clause at 252.242-7002, Earned Value Management System, 
in solicitations and contracts.
    (b) Use the clause at 252.242-7005, Cost/Schedule Status Report, in 
solicitations and contracts that require cost/schedule status reports 
(i.e., when the Contract Data Requirements List includes DI-MGMT-81467).
    (c) Use the provision at 252.242-7006, Cost/Schedule Status Report 
Plans, in solicitations that require cost/schedule status reports.

[70 FR 14575, Mar. 23, 2005]

          Subpart 242.12_Novation and Change-of-Name Agreements



Sec. 242.1203  Processing agreements.

    The responsible contracting officer shall process and execute 
novation and change-of-name agreements in accordance with the procedures 
at PGI 242.1203.

[70 FR 67920, Nov. 9, 2005]



Sec. 242.1204  Agreement to recognize a successor in interest (novation 
          agreement).

    (i) When a novation agreement is required and the transferee intends 
to incur restructuring costs as defined at

[[Page 264]]

213.205-70, the cognizant contracting officer shall include the 
following provision as paragraph (b)(7) of the novation agreement 
instead of the paragraph (b)(7) provided in the sample format at FAR 
42.1204(i):

    ``(7)(i) Except as set forth in subparagraph (7)(ii) below, the 
Transferor and the Transferee agree that the Government is not obligated 
to pay or reimburse either of them for, or otherwise give effect to, any 
costs, taxes, or other expenses, or any related increases, directly or 
indirectly arising out of or resulting from the transfer or this 
Agreement, other than those that the Government in the absence of this 
transfer or Agreement would have been obligated to pay or reimburse 
under the terms of the contracts.
    (ii) The Government recognizes that restructuring by the Transferee 
incidental to the acquisition/merger may be in the best interests of the 
Government. Restructuring costs that are allowable under Part 31 of the 
Federal Acquisition Regulation (FAR) or Part 231 of the Defense Federal 
Acquisition Regulation Supplement (DFARS) may be reimbursed under 
flexibily-priced novated contracts, provided the Transferee demonstrates 
that the restructuring will reduce overall costs to the Department of 
Defense (DoD) (and to the National Aeronautics and Space Administration 
(NASA), where there is a mix of DoD and NASA contracts), and the 
requirements included in DFARS 231.205-70 are met. Restructuring costs 
shall not be allowed on novated contracts unless there is an audit of 
the restructuring proposal; a determination by the contracting officer 
of overall reduced costs to DoD/NASA; and an Advance Agreement setting 
forth a cumulative cost ceiling for restructuring projects and the 
period to which such costs shall be assigned.''

[60 FR 1749, Jan. 5, 1995, as amended at 61 FR 16882, Apr. 18, 1996; 65 
FR 63805, Oct. 25, 2000]

          Subpart 242.14_Traffic and Transportation Management



Sec. 242.1402  Volume movements within the contiguous United States.

    (a)(2) In reporting planned and actual volume movements--
    (A) The contracting officer--
    (1) Provides production schedules and planned destinations to the 
servicing transportation office as soon as the information is available 
to permit the transportation office to determine if volume movements 
will occur. If a volume movement appears likely, the transportation 
office reports a planned volume movement in accordance with DoD 4500.9-
R, Defense Transportation Regulation, Part II, Chapter 201.
    (2) Sends a copy of the volume movement report to the contract 
administration office.
    (B) The contract administration office submits a volume movement 
report when--
    (1) Significant changes are made to the movement requirements; or
    (2) The contracting office did not submit a report.
    (C) Include the destination country, freight forwarder, and, if 
known, port of embarkation on volume movement reports for foreign 
military sale shipments.

[56 FR 36437, July 31, 1991, as amended at 65 FR 50143, Aug. 17, 2000]



Sec. 242.1403  Shipping documents covering f.o.b. origin shipments.

    (a)(i) Procedures for the contractor to obtain Government bills of 
lading are in the clause at 252.242-7003, Application for U.S. 
Government Shipping Documentation/Instructions.
    (ii) The term ``commercial bills of lading'' includes the use of any 
commercial form or procedure.

[56 FR 36437, July 31, 1991, as amended at 65 FR 50144, Aug. 17, 2000]



Sec. 242.1404  Shipments by parcel post or other classes of mail.



Sec. 242.1404-1  Parcel post eligible shipments.

    (b)(1) See DoD 4525.8-M, DoD Official Mail Manual.

[56 FR 67220, Dec. 30, 1991]



Sec. 242.1404-2  Contract clauses.

    When using FAR 52.213-1, Fast Payment Procedures, do not use FAR 
clauses 52.242-10, F.o.b. Origin--Government Bills of Lading or Prepaid 
Postage, or 52.242-11, F.o.b. Origin--Government Bills of Lading or 
Indicia Mail.



Sec. 242.1404-2-70  Additional clause.

    Use the clause at 252.242-7003, Application for U.S. Government 
Shipping Documentation/Instructions, when using the clause at FAR 
52.242-10, F.o.b. Origin--Government Bills of

[[Page 265]]

Lading or Prepaid Postage, or FAR 52.242-11, F.o.b. Origin--Government 
Bills of Lading or Indicia Mail.

[62 FR 34127, June 24, 1997]



Sec. 242.1405  Discrepancies incident to shipment of supplies.

    (a) See also DoD 4500.9-R, Defense Transportation Regulation, Part 
II, Chapter 210, for discrepancy procedures.

[65 FR 50144, Aug. 17, 2000]



Sec. 242.1470  Demurrage and detention charges.

    (a) Carrier demurrage rules usually allow for a ``free time'' for 
loading or unloading cars or for any other purpose, and impose charges 
for cars held beyond this period. If a contractor detains railroad cars 
beyond the ``free time,'' the contractor has to pay the carrier's 
published tariff charges for demurrage.
    (b) Detention results when a shipper or consignee holds motor 
carrier equipment beyond a reasonable period for loading, unloading, 
forwarding directions, or any other reason. Detention rules and charges 
are not uniform; they are published in individual carrier or agency 
tenders.

[56 FR 36437, July 31, 1991, as amended at 65 FR 50144, Aug. 17, 2000]

Subpart 242.70 [Reserved]

                    Subpart 242.71_Voluntary Refunds



Sec. 242.7100  General.

    A voluntary refund is a payment or credit (adjustment under one or 
more contracts or subcontracts) to the Government from a contractor or 
subcontractor that is not required by any contractual or other legal 
obligation. Follow the procedures at PGI 242.7100 for voluntary refunds.

[70 FR 67920, Nov. 9, 2005]

   Subpart 242.72_Contractor Material Management and Accounting System

    Source: 65 FR 77833, Dec. 13, 2000, unless otherwise noted.



Sec. 242.7200  Scope of subpart.

    (a) This subpart provides policies, procedures, and standards for 
use in the evaluation of a contractor's material management and 
accounting system (MMAS).
    (b) The policies, procedures, and standards in this subpart--
    (1) Apply only when the contractor has contracts exceeding the 
simplified acquisition threshold that are not for the acquisition of 
commercial items and are either--
    (i) Cost-reimbursement contracts; or
    (ii) Fixed-price contracts with progress payments made on the basis 
of costs incurred by the contractor as work progresses under the 
contract; and
    (2) Do not apply to small businesses, educational institutions, or 
nonprofit organizations.



Sec. 242.7201  Definitions.

    Material management and accounting system and valid time-phased 
requirements are defined in the clause at 252.242-7004, Material 
Management and Accounting System.



Sec. 242.7202  Policy.

    DoD policy is for its contractors to have an MMAS that conforms to 
the standards in paragraph (e) of the clause at 252.242-7004, so that 
the system--
    (a) Reasonably forecasts material requirements;
    (b) Ensures the costs of purchased and fabricated material charged 
or allocated to a contract are based on valid time-phased requirements; 
and
    (c) Maintains a consistent, equitable, and unbiased logic for 
costing of material transactions.



Sec. 242.7203  Review procedures.

    (a) Criteria for conducting reviews. Conduct an MMAS review when--
    (1) A contractor has $40 million of qualifying sales to the 
Government

[[Page 266]]

during the contractor's preceding fiscal year; and
    (2) The administrative contracting officer (ACO), with advice from 
the auditor, determines an MMAS review is needed based on a risk 
assessment of the contractor's past experience and current 
vulnerability.
    (b) Qualifying sales. Qualifying sales are sales for which cost or 
pricing data were required under 10 U.S.C. 2306a, as implemented in FAR 
15.403, or that are contracts priced on other than a firm-fixed-price or 
fixed-price with economic price adjustment basis. Sales include prime 
contracts, subcontracts, and modifications to such contracts and 
subcontracts.
    (c) System evaluation. Cognizant contract administration and audit 
activities must jointly establish and manage programs for evaluating the 
MMAS systems of contractors and must annually establish a schedule of 
contractors to be reviewed. In addition, they must--
    (1) Conduct reviews as a team effort.
    (i) the ACO--
    (A) Appoints a team leader; and
    (B) Ensures that the team includes appropriate functional 
specialists (e.g., industrial specialist, engineer, property 
administrator, auditor).
    (ii) The team leader--
    (A) Advises the ACO and the contractor of findings during the review 
and at the exit conference; and
    (B) Makes every effort to resolve differences regarding questions of 
fact during the review.
    (iii) The contract auditor--
    (A) Participates as a member of the MMAS team or serves as the team 
leader (see paragraph (c)(1)(i) of this section); and
    (B) Issues an audit report for incorporation into the MMAS report 
based on an analysis of the contractor's books, accounting records, and 
other related data.
    (2) Tailor reviews to take full advantage of the day-to-day work 
done by both organizations.
    (3) Prepare the MMAS report.
    (d) Disposition of evaluation team findings. The team leader must 
document the evaluation team findings and recommendations in the MMAS 
report to the ACO. If there are any significant MMAS deficiencies, the 
report must provide an estimate of the adverse impact on the Government 
resulting from those deficiencies.
    (1) Initial notification to the contractor. The ACO must provide a 
copy of the report to the contractor immediately upon receipt from the 
team leader.
    (i) The ACO must notify the contractor in a timely manner if there 
are no deficiencies.
    (ii) If there are any deficiencies, the ACO must request the 
contractor to provide a written response within 30 days (or such other 
date as may be mutually agreed to by the ACO and the contractor) from 
the date of initial notification.
    (iii) If the contractor agrees with the report, the contractor has 
60 days (or such other date as may be mutually agreed to by the ACO and 
the contractor) to correct any identified deficiencies or submit a 
corrective action plan showing milestones and actions to eliminate the 
deficiencies.
    (iv) If the contractor disagrees with the report, the contractor 
must provide rationale in the written response.
    (2) Evaluation of the contractor's response. The ACO, in 
consultation with the auditor, evaluates the contractor's response and 
determines whether--
    (i) The MMAS contains any deficiencies and, if so, any corrective 
action is needed;
    (ii) The deficiencies are significant enough to result in the 
reduction of progress payments or disallowance of costs on vouchers; and
    (iii) Proposed corrective actions (if the contractor submitted them) 
are adequate to correct the deficiencies.
    (3) Notification of ACO determination. (i) The ACO must notify the 
contractor in writing (copy to auditor and functional specialists) of--
    (A) Any deficiencies and the necessary corrective action;
    (B) Acceptability of the contractor's corrective action plan (if one 
was submitted) or the need for a corrective action plan; and
    (C) Any decision to reduce progress payments or disallow costs on 
vouchers.
    (ii) The Government does not approve or disapprove the contractor's 
MMAS.

[[Page 267]]

ACO notifications should avoid any such implications.
    (iii) From the time the ACO determines that there are any 
significant MMAS deficiencies until the time the deficiencies are 
corrected, all field pricing reports for that contractor must contain a 
recommendation relating to proposed adjustments necessary to protect the 
Government's interests.
    (iv) The ACO should consider the effect of any significant MMAS 
deficiencies in reviews of the contractor's estimating system (see 
215.407-5).
    (4) Reductions or disallowances. (i) When the ACO determines the 
MMAS deficiencies have a material impact on Government contract costs, 
the ACO must reduce progress payments by an appropriate percentage based 
on affected costs (in accordance with FAR 32.503-6) and/or disallow 
costs on vouchers (in accordance with FAR 42.803). The reductions or 
disallowances must remain in effect until the ACO determines that--
    (A) The deficiencies are corrected; or
    (B) The amount of the impact is immaterial.
    (ii) The maximum payment adjustment is the adverse material impact 
to the Government as specified in the MMAS report. The ACO should use 
the maximum adjustment when the contractor did not submit a corrective 
action plan with its response, or when the plan is unacceptable. In 
other cases, the ACO should consider the quality of the contractor's 
corrective action plan in determining the appropriate percentage.
    (iii) As the contractor implements its accepted corrective action 
plan, the ACO should reinstate a portion of withheld amounts 
commensurate with the contractor's progress in making corrections. 
However, the ACO must not fully reinstate withheld amounts until the 
contractor corrects the deficiencies, or until the impact of the 
deficiencies become immaterial.
    (5) Monitoring contractor's corrective action. The ACO and the 
auditor must monitor the contractor's progress in correcting 
deficiencies. When the ACO determines the deficiencies have been 
corrected, the ACO must notify the contractor in writing. If the 
contractor fails to make adequate progress, the ACO must take further 
action. The ACO may--
    (i) Elevate the issue to higher level management;
    (ii) Further reduce progress payments and/or disallow costs on 
vouchers;
    (iii) Notify the contractor of the inadequacy of the contractor's 
cost estimating system and/or cost accounting system; and
    (iv) Issue cautions to contracting activities regarding the award of 
future contracts.



Sec. 242.7204  Contract clause.

    Use the clause at 252.242-7004, Material Management and Accounting 
System, in all solicitations and contracts exceeding the simplified 
acquisition threshold that are not for the acquisition of commercial 
items and--
    (a) Are not awarded to small businesses, educational institutions, 
or nonprofit organizations; and
    (b) Are either--
    (1) Cost-reimbursement contracts; or
    (2) Fixed-price contracts with progress payments made on the basis 
of costs incurred by the contractor as work progresses under the 
contract.

           Subpart 242.73_Contractor Insurance/Pension Review



Sec. 242.7301  General.

    (a) The administrative contracting officer (ACO) is responsible for 
determining the allowability of insurance/pension costs in Government 
contracts and for determining the need for a Contractor/Insurance 
Pension Review (CIPR). Defense Contract Management Agency (DCMA) 
insurance/pension specialists and Defense Contract Audit Agency (DCAA) 
auditors assist ACOs in making these determinations, conduct CIPRs when 
needed, and perform other routine audits as authorized under FAR 42.705 
and 52.215-2. A CIPR is a DCMA/DCAA joint review that--
    (1) Provides an in-depth evaluation of a contractor's--
    (i) Insurance programs;
    (ii) Pension plans;
    (iii) Other deferred compensation plans; and
    (iv) Related policies, procedures, practices, and costs; or

[[Page 268]]

    (2) Concentrates on specific areas of the contractor's insurance 
programs, pension plans, or other deferred compensation plans.
    (b) DCMA is the DoD Executive Agency for the performance of all 
CIPRs.
    (c) DCAA is the DoD agency designated for the performance of 
contract audit responsibilities related to Cost Accounting Standards 
administration as described in FAR Subparts 30.2 and 30.6 as they relate 
to a contractor's insurance programs, pension plans, and other deferred 
compensation plans.

[71 FR 9273, Feb. 23, 2006]



Sec. 242.7302  Requirements.

    Follow the procedures at PGI 242.7302 to determine if a CIPR is 
needed.

[71 FR 9273, Feb. 23, 2006]



Sec. 242.7303  Responsibilities.

    Follow the procedures at PGI 242.7303 when conducting a CIPR.

[71 FR 9273, Feb. 23, 2006]

    Subpart 242.74_Technical Representation at Contractor Facilities



Sec. 242.7400  General.

    (a) Program managers may conclude that they need technical 
representation in contractor facilities to perform non-contract 
administration service (CAS) technical duties and to provide liaison, 
guidance, and assistance on systems and programs. In these cases, the 
program manager may assign technical representatives under the 
procedures in 242.7401.
    (b) A technical representative is a representative of a DoD program, 
project, or system office performing non-CAS technical duties at or near 
a contractor facility. A technical representative is not--
    (1) A representative of a contract administration or contract audit 
component; or
    (2) A contracting officer's representative (see 201.602).

[70 FR 67921, Nov. 9, 2005]



Sec. 242.7401  Procedures.

    When the program, project, or system manager determines that a 
technical representative is required, follow the procedures at PGI 
242.7401.

[70 FR 67921, Nov. 9, 2005]

    Subpart 242.75_Contractor Accounting Systems and Related Controls



Sec. 242.7501  Policy.

    Contractors receiving cost-reimbursement or incentive type 
contracts, or contracts which provide for progress payments based on 
costs or on a percentage or stage of completion, shall maintain an 
accounting system and related internal controls throughout contract 
performance which provide reasonable assurance that--
    (a) Applicable laws and regulations are complied with;
    (b) The accounting system and cost data are reliable;
    (c) Risk of misallocations and mischarges are minimized; and
    (d) Contract allocations and charges are consistent with invoice 
procedures.

[60 FR 29500, June 5, 1995. Redesignated at 70 FR 67921, Nov. 7, 2005]



Sec. 242.7502  Procedures.

    (a) Upon receipt of an audit report identifying significant 
accounting system or related internal control deficiencies, the ACO 
will--
    (1) Provide a copy of the report to the contractor and allow 30 
days, or a reasonable extension, for the contractor to respond;
    (2) If the contractor agrees with the report, the contractor has 60 
days from the date of initial notification to correct any identified 
deficiencies or submit a corrective action plan showing milestones and 
actions to eliminate the deficiencies.
    (3) If the contractor disagrees, the contractor should provide 
rationale in its written response.
    (4) The ACO will consider whether it is appropriate to suspend a 
percentage of progress payments or reimbursement of costs proportionate 
to the estimated cost risk to the Government,

[[Page 269]]

considering audit reports or other relevant input, until the contractor 
submits a corrective action plan acceptable to the ACO and corrects the 
deficiencies. (See FAR 32.503-6 (a) and (b) and FAR 42.302(a)(7)).

[60 FR 29500, June 5, 1995. Redesignated at 70 FR 67921, Nov. 7, 2005]

                     PART 243_CONTRACT MODIFICATIONS

                          Subpart 243.1_General

Sec.

Sec. 243.107-70 Notification of substantial impact on employment.

Sec. 243.170 Identification of foreign military sale (FMS) requirements.

Sec. 243.171 Obligation or deobligation of funds.

                       Subpart 243.2_Change Orders


Sec. 243.204 Administration.

Sec. 243.204-70 Certification of requests for equitable adjustment.

Sec. 243.205 Contract clauses.

Sec. 243.205-70 Pricing of contract modifications.

Sec. 243.205-71 Requests for equitable adjustment.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36446, July 31, 1991, unless otherwise noted.

                          Subpart 243.1_General



Sec. 243.107-70  Notification of substantial impact on employment.

    The Secretary of Defense is required to notify the Secretary of 
Labor if a modification of a major defense contract or subcontract will 
have a substantial impact on employment. The clause prescribed at 
249.7003(c) requires that the contractor notify its employees, its 
subcontractors, and State and local officials when a contract 
modification will have a substantial impact on employment.

[56 FR 67220, Dec. 30, 1991, as amended at 70 FR 67922, Nov. 9, 2005]



Sec. 243.170  Identification of foreign military sale (FMS) 
          requirements.

    Follow the procedures at PGI 243.170 for identifying contract 
modifications that add FMS requirements.

[70 FR 67922, Nov. 9, 2005]



Sec. 243.171  Obligation or deobligation of funds.

    Follow the procedures at PGI 243.171 when obligating or deobligating 
funds.

[70 FR 67922, Nov. 9, 2005]

                       Subpart 243.2_Change Orders



Sec. 243.204  Administration.

    Follow the procedures at PGI 243.204 for review and definitization 
of change orders.

[70 FR 67922, Nov. 9, 2005]



Sec. 243.204-70  Certification of requests for equitable adjustment.

    (a) A request for equitable adjustment to contract terms that 
exceeds the simplified acquisition threshold may not be paid unless the 
contract certifies the request in accordance with the clause at 252.243-
7002.
    (b) To determine if the dollar threshold for requiring certification 
is met, add together the absolute value of each cost increase and each 
cost decrease. See PGI 243.204-70(b) for an example.
    (c) The certification required by 10 U.S.C. 2410(a), as implemented 
in the clause at 252.243-7002, is different from the certification 
required by the Contract Disputes Act of 1978 (41 U.S.C. 605(c)). If the 
contractor has certified a request for equitable adjustment in 
accordance with 10 U.S.C. 2410(a), and desires to convert the request to 
a claim under the Contract Disputes Act, the contractor shall certify 
the claim in accordance with FAR Subpart 33.2.

[62 FR 37147, July 11, 1997, as amended at 63 FR 11541, Mar. 9, 1998; 70 
FR 67922, Nov. 9, 2005]



Sec. 243.205  Contract clauses.



Sec. 243.205-70  Pricing of contract modifications.

    Use the clause at 252.243-7001, Pricing of Contract Modifications, 
in solicitations and contracts when anticipating and using a fixed price 
type contract.

[56 FR 36446, July 31, 1991. Redesignated at 66 FR 49865, Oct. 1, 2001]

[[Page 270]]



Sec. 243.205-71  Requests for equitable adjustment.

    Use the clause at 252.243-7002, Requests for Equitable Adjustment, 
in solicitations and contracts estimated to exceed the simplified 
acquisition threshold.

[63 FR 17124, Apr. 8, 1998. Redesignated at 66 FR 49865, Oct. 1, 2001]

             PART 244_SUBCONTRACTING POLICIES AND PROCEDURES

                  Subpart 244.2_Consent to Subcontracts

Sec.

Sec. 244.202 Contracting officer's evaluation.

Sec. 244.202-2 Considerations.

          Subpart 244.3_Contractors' Purchasing Systems Reviews


Sec. 244.301 Objective.

Sec. 244.303 Extent of review.

Sec. 244.304 Surveillance.

Sec. 244.305 Granting, withholding, or withdrawing approval.

Sec. 244.305-70 Granting, withholding, or withdrawing approval.

     Subpart 244.4_Subcontracts for Commercial Items and Commercial 
                               Components


Sec. 244.402 Policy requirements.

Sec. 244.403 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36447, July 31, 1991, unless otherwise noted.

                  Subpart 244.2_Consent to Subcontracts



Sec. 244.202  Contracting officer's evaluation.



Sec. 244.202-2  Considerations.

    (a) Where other than lowest price is the basis for subcontractor 
selection, has the contractor adequately substantiated the selection as 
offering the greatest value to the Government?

[60 FR 29501, June 5, 1995]

          Subpart 244.3_Contractors' Purchasing Systems Reviews



Sec. 244.301  Objective.

    The administrative contracting officer (ACO) is solely responsible 
for initiating reviews of the contractor's purchasing systems, but other 
organizations may request that the ACO initiate such reviews.

[70 FR 67922, Nov. 9, 2005]



Sec. 244.303  Extent of review.

    Also review the adequacy of rationale documenting commercial item 
determinations to ensure compliance with the definition of ``commercial 
item'' in FAR 2.101.

[67 FR 38023, May 31, 2002]



Sec. 244.304  Surveillance.

    (b) The ACO, or the purchasing system analyst (PSA) with the 
concurrence of the ACO, may initiate a special review of specific 
weaknesses in the contractor's purchasing system. See PGI 244.304(b) for 
examples of weaknesses.

[70 FR 67922, Nov. 9, 2005]



Sec. 244.305  Granting, withholding, or withdrawing approval.



Sec. 244.305-70  Granting, withholding, or withdrawing approval.

    Use this subsection instead of FAR 44.305-2(c) and 44.305-3(b).
    (a) At the completion of the in-plant portion of the review, the ACO 
shall hold an exit conference with the contractor. At the conference, 
the ACO should--
    (1) Present the review team's recommendations, signed by the ACO;
    (2) Request the contractor submit its plan for correcting 
deficiencies or making improvements within 15 days; and
    (3) Not comment on the pending or planned decision to grant or 
withhold approval of the contractor's purchasing system.
    (b) The PSA should submit the complete report to the ACO, or any 
department or agency established review board, within ten days after 
receipt of the contractor's response under paragraph (a)(2) of this 
subsection.
    (c) The ACO should completely review the report and consider the 
contractor's response before making a decision on granting, withholding, 
or withdrawing purchasing system approval. The ACO shall notify the 
contractor of the decision within ten days

[[Page 271]]

after receipt of the report with a copy of the decision to the PSA and 
the contracting office, when requested.
    (d) When a contractor advises that it has corrected deficiencies 
that led the ACO to withhold or withdraw the purchasing system approval, 
the ACO--
    (1) Shall request the PSA to verify that the contractor has--
    (i) Corrected the deficiencies; and
    (ii) Implemented any other ACO recommendations.
    (2) Should ask for a review of purchasing policies and procedures 
issued since the last review.

     Subpart 244.4_Subcontracts for Commercial Items and Commercial 
                               Components



Sec. 244.402  Policy requirements.

    (a) Contractors shall determine whether a particular subcontract 
item meets the definition of a commercial item. This requirement does 
not affect the contracting officer's responsibilities or determinations 
made under FAR 15.403-1(c)(3). Contractors are expected to exercise 
reasonable business judgment in making such determinations, consistent 
with the guidelines for conducting market research in FAR part 10.

[67 FR 38023, May 31, 2002]



Sec. 244.403  Contract clause.

    Use the clause at 252.244-7000, Subcontracts for Commercial Items 
and Commercial Components (DoD contracts), in solicitations and 
contracts for supplies or services other than commercial items, that 
contain any of the following clauses: 252.225-7014 Preference for 
Domestic Specialty Metals, Alternate I, 252.247-7023 Transportation of 
Supplies by Sea, and 252.247-7024 Notification of Transportation of 
Supplies by Sea.

[65 FR 14401, Mar. 16, 2000]

                      PART 245_GOVERNMENT PROPERTY

                          Subpart 245.1_General

Sec.

Sec. 245.104 Review and correction of contractor's property control 
          systems.

       Subpart 245.3_Providing Government Property to Contractors


Sec. 245.301 Definitions.

Sec. 245.302 Providing facilities.

Sec. 245.302-1 Policy.

Sec. 245.302-2 Facilities contracts.

Sec. 245.302-7 Optional property-related clauses for facilities 
          contracts.

Sec. 245.303 Providing material.

Sec. 245.303-2 Procedures.

Sec. 245.307 Providing special test equipment.

Sec. 245.307-2 Acquiring special test equipment.

Sec. 245.310 Providing agency-peculiar property.

Sec. 245.310-70 Contract clause.

           Subpart 245.4_Use and Rental of Government Property


Sec. 245.401 Policy.

Sec. 245.403 Rental--Use and charges clause.

Sec. 245.405 Contracts with foreign governments or international 
          organizations.

Sec. 245.407 Non-Government use of plant equipment.

  Subpart 245.5_Management of Government Property in the Possession of 
                               Contractors


Sec. 245.505 Records and reports of Government property.

Sec. 245.505-3 Records of material.

Sec. 245.505-5 Records of plant equipment.

Sec. 245.505-6 Special reports of plant equipment.

Sec. 245.505-14 Reports of Government property.

  Subpart 245.6_Reporting, Redistribution, and Disposal of Contractor 
                                Inventory


Sec. 245.601 Definitions.

Sec. 245.603 Disposal methods.

Sec. 245.603-70 Contractor performance of plant clearance duties.

Sec. 245.603-71 Disposal of contractor inventory for NATO cooperative 
          projects.

Sec. 245.604 Restrictions on purchase or retention of contractor 
          inventory.

Sec. 245.606 Inventory schedules.

Sec. 245.606-3 Acceptance.

Sec. 245.606-5 Instructions for preparing and submitting schedules of 
          contractor inventory.

Sec. 245.606-70 Instructions for completing DD Form 1342, DoD Property 
          Record.

Sec. 245.607 Scrap.

Sec. 245.607-1 General.

Sec. 245.607-2 Recovering precious metals.

Sec. 245.607-70 Scrap warranty.

Sec. 245.608 Screening of contractor inventory.

Sec. 245.608-1 General.

Sec. 245.608-2 Standard screening.

Sec. 245.608-5 Special items screening.

Sec. 245.608-7 Reimbursement of cost for transfer of contractor 
          inventory.

[[Page 272]]


Sec. 245.608-70 Contractor inventory redistribution system (CIRS).

Sec. 245.608-71 Screening industrial plant equipment.

Sec. 245.608-72 Screening excess automatic data processing equipment 
          (ADPE).

Sec. 245.609 Donations.

Sec. 245.610 Sale of surplus contractor inventory.

Sec. 245.610-1 Responsibility.

Sec. 245.610-3 Proceeds of sale.

Sec. 245.610-4 Contractor inventory in foreign countries.

Sec. 245.612 Removal and storage.

Sec. 245.612-3 Special storage at the Government's expense.

Sec. 245.613 Property disposal determinations.

    Subpart 245.70_Appointment of Property Administrators and Plant 
                           Clearance Officers


Sec. 245.7001 Selection, appointment, and termination.

Sec. 245.7002 Duties and responsibilities of plant clearance officers.

                  Subpart 245.71_Plant Clearance Forms


Sec. 245.7101 Forms.

Sec. 245.7101-1 Standard Form 97, Certificate of Release of a Motor 
          Vehicle (Agency Record Copy).

Sec. 245.7101-2 DD Form 1149, Requisition and Invoice Shipping Document.

Sec. 245.7101-3 DD Form 1348-1, DoD Single Line Item Release/Receipt 
          Document.

Sec. 245.7101-4 DD Form 1640, Request for Plant Clearance.

                   Subpart 245.72_Special Instructions


Sec. 245.7201 Performing inventory verification and determination of 
          allocability.

Sec. 245.7202 Establishing a plant clearance case.

Sec. 245.7203 Assigning plant clearance case numbers.

Sec. 245.7204 Preparing inventory disposal report.

Sec. 245.7205 Reporting excess and surplus contractor inventory.

Sec. 245.7206 Transmitting DD Form 1342, DoD Property Record.

           Subpart 245.73_Sale of Surplus Contractor Inventory


Sec. 245.7301 Policy.

Sec. 245.7302 Competitive sales.

Sec. 245.7302-1 Property descriptions.

Sec. 245.7302-2 Lotting.

Sec. 245.7302-3 Alternate bids.

Sec. 245.7302-4 Basis for sale.

Sec. 245.7302-5 Mailing lists.

Sec. 245.7303 Formal bid procedures.

Sec. 245.7304 Informal bid procedures.

Sec. 245.7305 Sale approval and award.

Sec. 245.7306 Sales services.

Sec. 245.7307 Non-competitive sales.

Sec. 245.7307-1 General.

Sec. 245.7307-2 Justification.

Sec. 245.7308 Antitrust notification.

Sec. 245.7309 Mandatory terms and conditions--formal invitations.

Sec. 245.7309-1 Inspection.

Sec. 245.7309-2 Condition and location of property.

Sec. 245.7309-3 Consideration of bids.

Sec. 245.7309-4 Payment.

Sec. 245.7309-5 Title.

Sec. 245.7309-6 Delivery and removal of property.

Sec. 245.7309-7 Default.

Sec. 245.7309-8 Variations in quantity or weight.

Sec. 245.7309-9 Weighing.

Sec. 245.7309-10 Risk of loss.

Sec. 245.7309-11 Liability.

Sec. 245.7309-12 Oral statements.

Sec. 245.7309-13 Eligibility of bidders.

Sec. 245.7309-14 Claims liability.

Sec. 245.7310 Special term and conditions.

Sec. 245.7310-1 Demilitarization.

Sec. 245.7310-2 Performance bond.

Sec. 245.7310-3 Liability and insurance.

Sec. 245.7310-4 Dangerous property.

Sec. 245.7310-5 Controlled substances.

Sec. 245.7310-6 Radioactive material.

Sec. 245.7310-7 Scrap warranty.

Sec. 245.7310-8 Antitrust clearance.

Sec. 245.7311 Optional conditions.

Sec. 245.7311-1 Sales and use tax liability.

Sec. 245.7311-2 Safety, security, and fire regulations.

Sec. 245.7311-3 Bid deposits.

Sec. 245.7311-4 Other special conditions.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36448, July 31, 1991, unless otherwise noted.

                          Subpart 245.1_General



Sec. 245.104  Review and correction of contractor's property control 
          systems.

    (a) The property administrator shall perform property administration 
in accordance with DoD 4161.2-M, Manual for the Performance of Contract 
Property Administration.

[56 FR 36448, July 31, 1991, as amended at 56 FR 67220, Dec. 30, 1991]

       Subpart 245.3_Providing Government Property to Contractors



Sec. 245.301  Definitions.

    Agency-peculiar property, as used in DoD, means military property 
and includes end items and integral components of military weapons 
systems, along with the related peculiar support

[[Page 273]]

equipment which is not readily available as a commercial item.
    Facilities project means a Government project to provide, modernize 
or replace facilities for use by a contractor in performing a Government 
contract or subcontract.
    Industrial plant equipment (IPE) means plant equipment in Federal 
stock group 34 with an acquisition cost of $15,000 or more used for 
cutting, abrading, grinding, shaping, forming, joining, heating, 
treating, or otherwise altering the physical properties of materials, 
components or end items entailed in manufacturing, maintenance, supply, 
processing, assembly, or research and development operations. IPE is 
further identified in AR 700-43/NAVSUP PUB 5009/AFM 78-9/DLAM 4215.1, 
Management of Defense-Owned Industrial Plant Equipment.
    Mapping, charting, and geodesy (MC&G) property is defined in the 
clause at 252.245-7000, Government Furnished Mapping, Charting and 
Geodesy Property.
    Other plant equipment (OPE) means plant equipment regardless of 
dollar value, used in or in conjunction with the manufacture of 
components or end items relative to maintenance, supply, processing, 
assembly or research and development operations. OPE excludes equipment 
categorized as IPE.
    Provide means either to furnish, as in Government-furnished 
property, or to acquire, as in contractor-acquired property.



Sec. 245.302  Providing facilities.



Sec. 245.302-1  Policy.

    (a)(4)(A) Comply with DoD Directive 4275.5, Acquisition and 
Management of Industrial Resources, in processing a request for 
facilities. Submit requests for approval of facilities projects--
    (1) To the Secretaries of the Military Departments and the directors 
of defense agencies for Government-owned facilities projects if the 
project--
    (i) Is a research and development-funded effort not exceeding $3 
million per fiscal year; or
    (ii) Is funded from procurement appropriations, approved on a 
location basis, and does not exceed $5 million for all property efforts 
during one fiscal year; or
    (iii) Is in support of a major system or subsystem (including 
ammunition-related projects) and the total investment will not exceed 
$25 million during the projected acquisition or maintenance effort.
    (2) To the Office of the Deputy Under Secretary of Defense 
(Industrial Affairs and Installations) for projects exceeding the 
limitations in paragraph (a)(4)(A)(1) of this subsection.
    (B) The contracting officer shall coordinate the Determination and 
Finding with the program or project manager.
    (C) Departments and agencies must submit reports of facilities 
projects to the House and Senate Armed Services Committees--
    (1) At least 30 days before starting facilities projects involving 
real property (10 U.S.C. 2662); and
    (2) In advance of starting construction for a facilities project 
regardless of cost. Use DD Form 1391, FY ----, Military Construction 
Project Data, to notify congressional committees of projects that are 
not included in the annual budget.
    (b)(1)(A) Industrial plant equipment. Before acquiring industrial 
plant equipment--
    (1) Submit a DD Form 1419, DoD Industrial Plant Equipment 
Requisition, to the Defense Supply Center, Richmond (DSCR), Attn: DSCR-
JH, 8000 Jefferson Davis Highway, Richmond, Va 23297-5100, in accordance 
with AR 700-43/NAVSUP PUB 5009/AFM 78-9/DLAM 4215.1, Management of 
Defense-Owned Industrial Plant Equipment, to determine whether existing, 
reallocable Government-owned facilities can be used.
    (2) Do not acquire any item listed on the DD Form 1419 until a 
certificate of nonavailability is received from DSCR.
    (B) Automatic data processing equipment. The administrative 
contracting officer submits contractor requests to acquire automatic 
data processing equipment to the Defense Information Systems Agency, 
Chief Information Officer, Defense Automation Resources Management 
Program Division, Attn: D03D, 701 South Courthouse Road, Arlington, VA 
22204-2199, in accordance

[[Page 274]]

with the Defense Automation Resources Management Manual.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34127, June 24, 1997; 
64 FR 51076, Sept. 21, 1999; 66 FR 49861, Oct. 1, 2001]



Sec. 245.302-2  Facilities contracts.

    Terminate facilities contracts when Government production and 
research property is no longer required for the performance of 
Government contracts or subcontracts, unless termination is not in the 
best interest of the Government. The contractor is not allowed to extend 
the time for use of property provided under the facilities contract 
without Government authorization.



Sec. 245.302-7  Optional property-related clauses for facilities 
          contracts.

    Use the clause at 252.225-7030, Restriction on Acquisition of 
Carbon, Alloy, and Armor Steel Plate, as prescribed in 225.7017-4.

[57 FR 14995, Apr. 23, 1992]



Sec. 245.303  Providing material.



Sec. 245.303-2  Procedures.

    When a contractor will be responsible for preparing requisitioning 
documentation, include in the contract the requirement to prepare the 
documentation in accordance with DoD 4000.25-1-M, Military Standard 
Requisitioning and Issue Procedures (MILSTRIP). Copies are available 
from the address cited at 251.102(e)2.b(2).



Sec. 245.307  Providing special test equipment.



Sec. 245.307-2  Acquiring special test equipment.

    (b) Notice and approval. (1) The review requires a written 
evaluation from the appropriate technical specialist.



Sec. 245.310  Providing agency-peculiar property.

    (c) All Government-furnished mapping, charting, and geodesy (MC&G) 
property is under the control of the Director, National Imagery and 
Mapping Agency (NIMA).
    (i) MC&G property shall not be duplicated, copied, or otherwise 
reproduced for purposes other than those necessary for contract 
performance.
    (ii) Upon completion of contract performance, the contracting 
officer shall--
    (A) Contact the Director, NIMA(PP), 8613 Lee Highway, Fairfax, VA 
22031-2137, for disposition instructions;
    (B) Direct the contractor to destroy or return all Government-
furnished MC&G property not consumed during contract performance; and
    (C) Specify the destination and means of shipment for material to be 
returned to the Government.

[56 FR 36448, July 31, 1991, as amended at 59 FR 27674, May 27, 1994; 64 
FR 51076, Sept. 21, 1999]



Sec. 245.310-70  Contract clause.

    Use the clause at 252.245-7000, Government-Furnished Mapping, 
Charting, and Geodesy Property, in solicitations and contracts when 
mapping, charting, and geodesy property is to be furnished.

[57 FR 42632, Sept. 15, 1992]

           Subpart 245.4_Use and Rental of Government Property



Sec. 245.401  Policy.

    Government use includes use on contracts for foreign military sales. 
Use on contracts for foreign military sales shall be on a rent-free 
basis.



Sec. 245.403  Rental--Use and charges clause.

    (1) The DoD normally recovers a fair share of nonrecurring costs of 
special tooling and special test equipment by including these costs in 
its calculation of the nonrecurring cost recoupment charge when major 
defense equipment is sold by foreign military sales or direct commercial 
sales to foreign governments or international organizations. Major 
defense equipment is defined in DODD 2140.2, Recoupment of Nonrecurring 
Costs on Sales of U.S. Items, as any item of significant military 
equipment on the United States Munitions List having a nonrecurring 
RDT&E cost of more than $50 million or a total production cost of more 
than $200 million.
    (2) When these cost thresholds are not met, the contracting officer 
shall assess rental charges for use of special

[[Page 275]]

tooling and special test equipment pursuant to the Use and Charges 
clause when administratively practicable.

[56 FR 36448, July 31, 1991, as amended at 67 FR 61517, Oct. 1, 2002]



Sec. 245.405  Contracts with foreign governments or international 
          organizations.

    (1) Approval. A contractor may use Government production and 
research property on work for foreign governments and international 
organizations only when approved in writing by the contracting officer 
having cognizance of the property. The contracting officer shall grant 
approval only if--
    (i) The use will not interfere with foreseeable requirements of the 
United States;
    (ii) The work is undertaken as a DoD foreign military sale; or
    (iii) For a direct commercial sale, the foreign country or 
international organization would be authorized to contract with the 
department concerned under the Arms Export Control Act.
    (2) Use charges. (i) The Use and Charges clause is applicable on 
direct commercial sales to foreign governments or international 
organizations.
    (ii) When a particular foreign government or international 
organization has funded the acquisition of specific production and 
research property, do not assess the foreign government or international 
organization rental charges or nonrecurring recoupments for the use of 
such property.
    (3) Waivers. (i) Rental charges for use of U.S. production and 
research property on commercial sales transactions to the Government of 
Canada are waived for all commercial contracts. This waiver is based on 
an understanding wherein the Government of Canada has agreed to waive 
its rental charges.
    (ii) Requests for waivers or reduction of charges for the use of 
Government facilities on work for foreign governments or international 
organizations shall be submitted to the contracting officer who shall 
refer the matter through contracting channels. In response to these 
requests, approvals may be granted only by the Director, Defense 
Security Cooperation Agency for particular sales that are consistent 
with paragraph (1)(iii) of this section.

[56 FR 36448, July 31, 1991, as amended at 64 FR 51077, Sept. 21, 1999]



Sec. 245.407  Non-Government use of plant equipment.

    (a)(i) Non-Government use of industrial plant equipment (IPE) 
exceeding 25 percent requires prior approval of the--
    (A) Assistant Secretary of the Army (AL&T);
    (B) Assistant Secretary of the Navy (RD&A);
    (C) Assistant Secretary of the Air Force (Acquisition); or
    (D) Director, Defense Logistics Agency.
    (ii) The authority in paragraph (a)(i) of this section may be 
delegated to the head of a contracting activity. Any redelegation 
requires the approval of the Office of the Deputy Under Secretary of 
Defense (Industrial Affairs and Installations).
    (iii) To determine percentage--
    (A) Compute the percentage of non-Government use on time available 
for use. Use contractor's normal work schedule as represented by the 
scheduled production shift hours.
    (B) Use a base time period which is neither less than three months 
nor more than one year.
    (C) Use may be averaged at a single plant for all items costing less 
than $25,000.
    (iv) Contractors should submit requests for non-Government use of 
IPE to the contract administration office at least six weeks before the 
projected use. The requests shall include:
    (A) Total number and acquisition cost of IPE items; and
    (B) For each unit of IPE with an acquisition cost of $25,000 or 
more, an itemized list including nomenclature, plant equipment code, 
year of manufacture and acquisition cost.
    (v) Approving officials shall retain for periodic review, 
documentation of the circumstances justifying non-Government use of IPE.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34127, June 24, 1997; 
68 FR 23088, Apr. 30, 2003]

[[Page 276]]

  Subpart 245.5_Management of Government Property in the Possession of 
                               Contractors



Sec. 245.505  Records and reports of Government property.



Sec. 245.505-3  Records of material.

    If adequate controls are in place to meet the requirements of the 
clause at 252.242-7004, Material Management and Accounting System, the 
contractor's material control system may physically commingle 
inventories that may include materials for which costs are charged or 
allocated to fixed-price, cost-reimbursement, and commercial contracts. 
Government-furnished material (GFM) may not be physically commingled 
with other material, nor may GFM be used on contractor's commercial 
work.



Sec. 245.505-5  Records of plant equipment.

    (a) The contractor may use DD Form 1342, DoD Property Record, as a 
source document for setting up prescribed records.



Sec. 245.505-6  Special reports of plant equipment.

    The contractor shall prepare a DD Form 1342 in accordance with 
instructions contained in AR 700-43/NAVSUP PUB 5009/AFM 78-9/DLAM 
4215.1, Management of Defense-Owned Industrial Plant Equipment (IPE)--
    (1) Upon receipt and acceptance of each item of IPE including items 
which, though part of a manufacturing system, would otherwise qualify as 
IPE;
    (2) Whenever major changes occur in the data initially submitted to 
Defense Supply Center Richmond (DSCR) (as specified by DLAM 4215.1);
    (3) When IPE, including general purpose components of special test 
equipment which otherwise qualify as IPE, is no longer required for the 
purpose authorized or provided; or
    (4) When disposal is completed.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34127, June 24, 1997]



Sec. 245.505-14  Reports of Government property.

    (a) Use the clause at 252.245-7001, Reports of Government Property, 
in all solicitations and contracts containing one of the following 
clauses--
    (1) FAR Section 52.245-2, Government Property (Fixed-Price 
Contracts);
    (2) FAR Section 52.245-5, Government Property (Cost Reimbursement, 
Time-and-Material, or Labor-Hour Contracts;
    (3) FAR Section 52.245-7, Government Property (Consolidated 
Facilities);
    (4) FAR Section 52.245-10, Government Property (Facilities 
Acquisition); or
    (5) FAR Section 52.245-11, Government Property (Facilities Use).

[59 FR 27674, May 27, 1994]

  Subpart 245.6_Reporting, Redistribution, and Disposal of Contractor 
                                Inventory



Sec. 245.601  Definitions.

    (1) Controlled substances means--
    (i) Narcotic, depressant, stimulant, or hallucinogenic drug or 
substance;
    (ii) Any other drug or substance controlled under Title II of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970; or
    (iii) A drug or substance required to be controlled by international 
treaty, convention or protocol.
    (2) Demilitarization means the act of destroying the offensive or 
defensive characteristics of equipment or material to prevent its 
further military or lethal use.
    (3) Production scrap means material left over from the normal 
production process that has only remelting or reprocessing value, e.g., 
textile and metal clippings, borings, and faulty castings and forgings.
    (4) Serviceable or usable property means property that has a 
potential for use or sale value ``as is'' or with minor repairs or 
alterations; only property in Federal Condition Codes A1, A2, A4, A5, 
B1, B2, B4, B5, F7, or F8.



Sec. 245.603  Disposal methods.



Sec. 245.603-70  Contractor performance of plant clearance duties.

    (a) Authorization. (1) Contract administration offices (CAOs) may, 
with head of the contracting activity approval and contractor 
concurrence, authorize selected contractors to perform certain plant 
clearance functions if the volume

[[Page 277]]

of plant clearance warrants performance by the contractor.
    (2) The written authorization shall, as a minimum--
    (i) Designate the contractor as an ``accredited contractor'';
    (ii) Identify the plant clearance actions to be performed;
    (iii) State that the Government may cancel part of or all of the 
authorization to perform plant clearance actions; and
    (iv) Provide for plant clearance officer participation when 
required.
    (b) Government oversight and assistance. (1) The contract 
administration office will ensure regular evaluation of the contractor's 
performance of the plant clearance function and any corrective action 
required.
    (2) The plant clearance officer shall--
    (i) Evaluate the adequacy and ensure compliance with contractor 
procedures;
    (ii) Ensure discrepancies are promptly resolved;
    (iii) Advise the contractor of screening and inventory schedule 
requirements;
    (iv) Respond to contractor requests to withdraw Government-furnished 
property from inventory schedules;
    (v) Evaluate physical, quantitative, and technical allocability of 
contractor inventory prior to disposal using Standard Form 1423, 
Inventory Verification Survey, as a guide;
    (vi) Direct contractor to delay disposition of nonallocable 
inventory pending a contracting officer decision;
    (vii) With the contractor's assistance, establish criteria for 
review and approval of selected contractor disposal decisions;
    (viii) Complete first endorsement section of DD Form 1640, Request 
for Plant Clearance, on referrals from plant clearance officers at prime 
contract administration offices for the disposal of subcontractor 
inventory; forward inventory schedules to the contractor for processing; 
and forward completed case file to the referring activity; and
    (ix) Work with the contractor, screeners, and buyers to ensure that 
the Government receives maximum reutilization and disposal proceeds.
    (c) Accredited contractor plant clearance duties. The accredited 
contractor shall--
    (1) Ensure inventory schedule acceptability. Use DD Form 1637, 
Notice of Acceptance of Inventory, if desired;
    (2) Suspend disposition of property when assets are determined 
nonallocable (FAR 45.606-3);
    (3) Withdraw property from inventory schedules and notify the 
affected screening activities. Obtain plant clearance officer approval 
for withdrawal of Government furnished property from inventory schedules 
(FAR 45.606-4);
    (4) Determine method of disposal under established priorities and 
document disposal decisions and actions;
    (5) Assign the automatic release date and the surplus release date;
    (6) Initiate prescribed screening and effect resulting transfers and 
donations;
    (7) Account for disposal of all contractor inventory and application 
of proceeds and submit to the plant clearance officer a Standard Form 
1424, Inventory Disposal Report, or equivalent;
    (8) Maintain the donable file and release property to eligible 
donees (FAR 45.609);
    (9) Prepare, approve, sign, and maintain official plant clearance 
files and required forms (245.7101);
    (10) Not conduct noncompetitive sales of surplus contractor 
inventory; and
    (11) Notify the plant clearance officer in advance when bidding on 
property.

[56 FR 36448, July 31, 1991, as amended at 56 FR 67220, Dec. 30, 1991]



Sec. 245.603-71  Disposal of contractor inventory for NATO cooperative 
          projects.

    (a) North Atlantic Treaty Organization (NATO) cooperative project 
agreements may include disposal provisions of jointly acquired property 
without regard to any applicable disposal laws of the United States.
    (b) Disposal of such property may include a transfer of the U.S. 
interest in the property to one of the other governments participating 
in the agreement, or the sale of the property.
    (c) Payment for the transfer or sale of any U.S. interest shall be 
made in

[[Page 278]]

accordance with the terms of the project agreement.



Sec. 245.604  Restrictions on purchase or retention of contractor 
          inventory.

    (1) Contractors authorized to sell inventory may not knowingly sell 
the inventory to any person or that person's agent, employee, or 
household member if that person--
    (i) Is a civilian employee of the DoD or the U.S. Coast Guard; or
    (ii) Is a member of the armed forces of the United States, including 
the Coast Guard; and
    (iii) Has any functional or supervisory responsibilities for or 
within the Defense Reutilization and Marketing Program, or for the 
disposal of contractor inventory.
    (2)(i) A contractor's authority to approve a subcontractor's sale, 
purchase, or retention at less than cost, and the subcontractor's 
authority to sell, purchase, or retain at less than cost if approved by 
a higher-tier contractor, does not include authority to approve--
    (A) A sale by a subcontractor to the next-higher tier contractor or 
to an affiliate of such contractor or of the subcontractor; or
    (B) A sale, purchase, or retention at less than cost, by a 
subcontractor affiliated with the next higher-tier contractor.
    (ii) The written approval of the plant clearance officer is required 
for each excluded sale, purchase, or retention at less than cost.
    (3) Demilitarization. The contractor shall demilitarize contractor 
inventory possessing offensive or defense characteristics, and not 
required within the DoD, in accordance with Defense Demilitarization 
Manual, DoD 4160.21-M-1. In unusual cases the plant clearance officer 
may authorize the purchaser to perform the demilitarization; however, 
the purchaser shall not be granted such authorization if the inventory 
is dangerous.
    (4) Classified inventory. Classified contractor inventory shall be 
disposed of in accordance with applicable security regulations or as 
directed by the contracting officer.
    (5) Dangerous inventory. Contractor inventory dangerous to public 
health or safety shall not be donated or otherwise disposed of unless 
rendered innocuous or until adequate safeguards have been provided.



Sec. 245.606  Inventory schedules.



Sec. 245.606-3  Acceptance.

    (a) If the schedules are acceptable, the plant clearance officer 
shall, within 15 days, complete and send the contractor a DD Form 1637, 
Notice of Acceptance of Inventory.
    (b) To assist in verifying inventory allocability, the plant 
clearance officer shall follow the instructions in 245.7201.



Sec. 245.606-5  Instructions for preparing and submitting schedules of 
          contractor inventory.

    (d) General instructions for completing forms.
    (4) The contractor shall use the following codes together with the 
disposal codes 1 through 9, X, and S (e.g., A1, F7, SS) to indicate the 
condition of the property--
    A--New, used, repaired, or reconditioned property; serviceable and 
issuable to all customers without limitations or restrictions; includes 
material with remaining shelf life of more than six months.
    B--New, used, repaired, or reconditioned property; serviceable and 
issuable or for its intended purpose but restricted from issue to 
specific units, activities, or geographical areas because of its limited 
usefulness or short service-life expectancy; includes material and 
remaining shelf life of three to six months.
    F--Economically reparable property which requires repair, overhaul 
or reconditioning; includes reparable items which are radioactively 
contaminated.
    H--Property which has been determined to be unserviceable and does 
not meet repair criteria.
    S--Property that has no value except for its basic material content.
    (e) Instructions for completing specific forms.
    (4) Inventory Schedule D (Special Tooling and Special Test 
Equipment) (SF 1432).
    (ii) Description. For termination inventory included in a settlement 
proposal, include cost of inventory acquired for performance of the 
entire

[[Page 279]]

contract in column F1 and cost of inventory acquired solely for the 
terminated portion of the contract in column F2. Cost of inventory 
acquired for the entire contract must be prorated between the terminated 
and nonterminated portions.



Sec. 245.606-70  Instructions for completing DD Form 1342, DoD Property 
          Record.

    (a) The contractor shall list excess industrial plant equipment 
(IPE) on DD Form 1342, DoD Property Record, and submit it to the 
Government property administrator for review and transmittal to the 
plant clearance officer. For numerically controlled IPE, the contractor 
shall prepare and submit DD Form 1342, section VI, (page 2), Numerically 
Controlled Machine Data.
    (b) Upon receipt of the DD Form 1342, the plant clearance officer 
will--
    (1) Designate the 75th day from the date of receipt as the automatic 
release date (ARD) and the 90th day as the screening completion date 
(SCD); and
    (2) Enter the ARD in Block 24 of the DD Form 1342.



Sec. 245.607  Scrap.



Sec. 245.607-1  General.

    (a)(i) The contractor may request a pre-inventory scrap 
determination, made by the plant clearance officer after an on-site 
survey, if inventory is considered without value except for scrap. If 
approved, the contractor may make a single descriptive entry on an 
inventory schedule, generally describing the property and indicating its 
approximate total cost. The plant clearance officer will establish a 
plant clearance case and perform limited screening.
    (ii) If the contractor has an approved scrap procedure, routine 
disposal of production scrap and spoilage is authorized, and a plant 
clearance case is unnecessary. The contractor may similarly dispose of 
worn, broken, mutilated, or otherwise rejected parts from overhaul and 
repair contracts with the approval of the plant clearance officer.
    (iii) In addition to segregating scrap to maximize proceeds, the 
contractor may also consolidate sales of Government and contractor scrap 
if approved by the plant clearance officer. When a consolidated sale is 
approved, the plant clearance officer shall waive the scrap warranty 
required at 245.607-70.
    (iv) When a contractor's approved scrap procedure does not require 
physical segregation of Government and contractor scrap, the plant 
clearance officer shall ensure the proceeds of scrap sale are equitably 
distributed.



Sec. 245.607-2  Recovering precious metals.

    (b) Precious metals are silver, gold, platinum, palladium, rhodium, 
iridium, osmium, and ruthenium.
    (i) At the beginning of every fiscal year, the Defense Reutilization 
and Marketing Service (DRMS) will provide each contract administration 
office with disposition instructions for certain categories of precious 
metals-bearing property, including scrap and usable items containing 
recoverable quantities of these metals. The disposition instructions--
    (A) Will remain in effect for the entire fiscal year, unless 
modified by DRMS; and
    (B) Will contain a fund citation to be used when disposition 
requires shipment of precious metals-bearing property for recovery.
    (ii) Plant clearance officers shall obtain disposition instructions 
for precious metals-bearing property not covered by the annual 
disposition instructions from the Defense Reutilization and Marketing 
Service, Attn: DRMS-OC, 74 N. Washington Avenue, Battle Creek, MI 49017-
3092.

[59 FR 27674, May 27, 1994]



Sec. 245.607-70  Scrap warranty.

    (a) If the contractor sells its inventory as scrap to anyone, 
including a holding contractor, the contractor shall include in the 
sales contract a signed copy of DD Form 1639, Scrap Warranty.
    (b) The contracting officer may release the contractor from the 
terms of the scrap warranty in return for consideration paid to the 
Government. The consideration will represent the difference between--
    (1) The sale price of the scrap; and

[[Page 280]]

    (2) A fair and reasonable price for the material if it had been sold 
for purposes other than scrap.
    (c) The contractor shall pay the consideration to the Government and 
the Government may execute the release even though the contract 
containing the warranty was not made directly with the Government.
    (d) If the scrap is resold to a second buyer, the first buyer shall 
obtain a scrap warranty from the second buyer. Upon receipt of the 
second buyer's scrap warranty, the Government will release the first 
buyer from liability under the original warranty.



Sec. 245.608  Screening of contractor inventory.



Sec. 245.608-1  General.

    (a) The plant clearance officer shall arrange for inspection of 
property at the contractor's plant if requested by a prospective 
transferee, in such a manner as to avoid interruption of the 
contractor's operations.



Sec. 245.608-2  Standard screening.

    (b)(1) For the first 30 days, property screening will be limited to 
the contracting agency and the requiring agency, when they are not the 
same. The requiring agency shall have priority for retention of listed 
items.



Sec. 245.608-5  Special items screening.

    (a) Special test equipment with standard components. (1) The 
contractor shall report any excess special test equipment (STE) using SF 
1432, Inventory Schedule D (Special Tooling and Special Test Equipment). 
The contractor shall list and describe on the inventory schedule all 
general-purpose components which, if economically severable from the 
STE, would otherwise be classified as industrial plant equipment (IPE), 
other plant equipment (OPE), or automatic data processing equipment 
(ADPE).
    (2) The plant clearance officer will perform the initial screening 
of the composite STE unit.
    (A) If the contracting department/agency and the requiring 
department/agency decline the STE or the standard components or do not 
approve their transfer to another contract; then,
    (B) The plant clearance officer will screen the STE and any 
severable components with the--
    (1) General Services Administration--STE unit, less any standard 
components, and nonreportable standard components;
    (2) Defense Supply Center Richmond--IPE components;
    (3) Contractor Inventory Redistribution System--OPE components; and
    (4) Defense Information Systems Agency, Chief Information Officer, 
Defense Automation Resources Management Program Division--ADPE 
components.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34128, June 24, 1997]



Sec. 245.608-7  Reimbursement of cost for transfer of contractor 
          inventory.

    The Defense Logistics Agency will pay for the movement of industrial 
plant equipment under the direction and control of the Defense 
Industrial Plant Equipment Center.



Sec. 245.608-70  Contractor inventory redistribution system (CIRS).

    (a) Screen serviceable and usable contractor inventory through CIRS 
when it--
    (1) Is listed on SF 1428, Inventory Schedule B, or SF 1434, 
Inventory Schedule E; and
    (2) Has a national stock number, and line item acquisition value in 
excess of $50; or
    (3) Has a line item acquisition value in excess of $1,000 ($500 for 
furniture) but no national stock number.
    (b) Using Standard Form 120, Report of Excess Personal Property, the 
plant clearance officer will send two copies of SF 1428 or SF 1434 (or 
authorized substitutes) to the Defense Reutilization and Marketing 
Service (DRMS). DRMS will notify the plant clearance officer of items 
processed, not accepted, or available for local area screening.
    (c) Property subject to CIRS processing will be screened within DoD 
for 30 days. On the 31st day, unless otherwise specified on SF Form 120, 
appropriate items not requisitioned by DoD will be reported to the 
General Services Administration (GSA) for standard Federal agency and 
donation screening.

[[Page 281]]

Examples of items which are not reportable to GSA include usable 
hazardous cleaners and solvents.
    (d) For requisitioned items, DRMS will issue shipping instructions 
to the plant clearance officer. During the first 45 days of the 
screening period, the plant clearance officer forwards any requisitions 
received to DRMS. After 45 days, the plant clearance officer forwards 
the requisition directly to GSA.
    (e) The contractor sends one copy of the shipping document to DRMS 
when shipment has been made.
    (f) Unless directed by the contracting officer, motor vehicles 
excess to Army and Navy contracts shall not be screened through CIRS.

[56 FR 36448, July 31, 1991, as amended at 60 FR 29501, June 5, 1995]



Sec. 245.608-71  Screening industrial plant equipment.

    (a) Reporting. Within 15 days of receipt, the plant clearance 
officer will forward two copies of the DD Form 1342, DoD Property 
Record, to the Defense Supply Center Richmond (DSCR), ATTN: JH, 8000 
Jefferson Davis Highway, Richmond, VA 23297-5100, for all IPE not 
condition coded ``X'' or ``S.'' Process IPE condition coded ``X'' or 
``S'' in accordance with department or agency procedures.
    (b) Screening--(1) First 30 days. DSCR will--
    (i) Screen excess IPE against all DoD requirements with priority 
given to requirements of the owning department/agency through the 30th 
day.
    (ii) For items selected, issue shipping instructions containing 
accounting, funding, transportation, routing recommendations, and 
preservation instructions.
    (2) 31st through 75th day. (i) DSCR will report excess IPE to GSA on 
31st day.
    (ii) GSA will--
    (A) Approve department/agency requests on first come-first served 
basis;
    (B) Approve and forward transfer orders to the contract 
administration office; and
    (C) Forward copies of approved transfer orders to DSCR.
    (3) 76th through 90th day. GSA will--
    (i) Provide for screening for donation;
    (ii) Receive, approve and forward donation applications to the 
contract administration office; and
    (iii) Send copies of approved applications to DSCR.
    (4) After 90th day. If DoD requirement is identified, and item is 
available, ship item against the requirement unless compelling reasons 
exist for not shipping item.
    (c) The plant clearance officer shall ensure that a copy of the 
shipping document is submitted to DSCR when IPE is transferred use-to-
use or use-to-storage within DoD.
    (d) When GSA sells IPE that is excess to ownership but not to DoD 
requirements, report the sale to DSCR in accordance with department/
agency procedures.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34128, June 24, 1997]



Sec. 245.608-72  Screening excess automatic data processing equipment 
          (ADPE).

    Report ADPE that is Government-owned or leased by the contractor 
(with Government purchase option or other interests, including use 
rights) to the Defense Information Systems Agency, Defense Automation 
Resources Management Program Division (DARMP). DARMP does all required 
screening, including General Services Administration screening, for 
ADPE. (See the Defense Automation Resources Management Manual.)

[62 FR 34128, June 24, 1997]



Sec. 245.609  Donations.

    Agencies may donate, with GSA approval and without expense to the 
United States, certain material not needed by DoD to certain 
organizations such as veterans' organizations, soldiers' monument 
associations, State museums, and incorporated educational, not for 
profit museums. For further guidance, see DoD 4160 .21-M, Defense 
Materiel Disposition Manual.

[56 FR 36448, July 31, 1991, as amended at 67 FR 61517, Oct. 1, 2002]

[[Page 282]]



Sec. 245.610  Sale of surplus contractor inventory.



Sec. 245.610-1  Responsibility.

    (a) See Subpart 245.73 for sales of contractor inventory under the 
control of DoD.



Sec. 245.610-3  Proceeds of sale.

    (1) Unless otherwise provided in the contract, the proceeds of any 
sale, purchase, or retention shall be--
    (i) Credited to the Government as part of the settlement agreement;
    (ii) Credited to the price or cost of the contract;
    (iii) Applied as otherwise directed by the contracting officer; or
    (iv) Forwarded to the plant clearance officer. The plant clearance 
officer--
    (A) Within two days after receipt will send the proceeds and a DD 
Form 1131, Cash Collection Voucher, to the designated disbursing 
officer. Identify on the DD Form 1131 the contractor name and contract 
number; or
    (B) For contractors with an approved scrap procedure, will ensure 
the proceeds are appropriately applied to an overhead account. The plant 
clearance officer may assign a representative who, with the assistance 
of the contract auditor, shall periodically validate that proceeds from 
sales of production generated scrap are collected and applied to the 
appropriate account.
    (2) Except as prescribed in paragraph (1)(iv)(B) of this subsection, 
the plant clearance officer will not close the plant clearance case 
until verification is received that the credit has, in fact, been 
properly applied.



Sec. 245.610-4  Contractor inventory in foreign countries.

    (1) Normally, DRMS disposal activities shall be used to dispose of 
surplus contractor inventory located outside the United States or 
Canada. However, if authorized by the contracting officer, a contractor 
may sell or make other disposition of inventory in foreign countries.
    (2) Sale or other disposition of foreign inventory by the 
contractor, including sale to foreign governments, requires that--
    (i) The sales contract or other document transferring title include 
the following certificate:

    The Purchaser certifies that the property covered by this contract 
will be used in (name of country). In the event of resale or export by 
the Purchaser of any of the property acquired at a price in excess of 
$1,000 United States dollars or equivalent in other currency at the 
official exchange rate, the Purchaser agrees to obtain the approval of 
(name and address of Contracting Officer); and

    (ii) The contracting officer approve sales contracts, resales, or 
exports. Approval is permitted only if--
    (A) The proposed purchaser's name is not on the list of Parties 
Excluded from Procurement Programs; and
    (B) The sales contract or other document forbids exports by 
purchasers and subpurchasers to communist areas (FAR 25.702) or other 
prohibited destinations.



Sec. 245.612  Removal and storage.



Sec. 245.612-3  Special storage at the Government's expense.

    (a) Before authorizing storage, the contracting officer shall ensure 
funds are available to pay for the storage and related tasks. In 
addition, the contracting officer shall ensure an annual review of the 
need for continued storage at Government expense.
    (b) All storage contracts or agreements shall be fully funded and 
separately priced and shall include all allocable costs.



Sec. 245.613  Property disposal determinations.

    The plant clearance officer shall--
    (1) Record the reason for disposing of the property--
    (i) As scrap and salvage;
    (ii) By abandonment or destruction; and
    (iii) By noncompetitive sale;
    (2) Use DD Form 1641, Disposal Determination/Approval, to record 
disposal determinations; and
    (3) File the completed form in the plant clearance case file.

[[Page 283]]

    Subpart 245.70_Appointment of Property Administrators and Plant 
                           Clearance Officers



Sec. 245.7001  Selection, appointment, and termination.

    (a) The head of a contracting activity for the Defense Logistics 
Agency, or the head of the contract administration office for other 
departments and agencies shall select, appoint, or terminate (in 
writing) property administrators and plant clearance officers.
    (b) In selecting qualified property administrators and plant 
clearance officers, the appointment authority shall consider experience, 
training, education, business acumen, judgment, character, and ethics.



Sec. 245.7002  Duties and responsibilities of plant clearance officers.

    The plant clearance officer shall--
    (a) Instruct the contractor on the preparation of inventory 
schedules;
    (b) Make pre-inventory scrap determinations;
    (c) Determine the acceptability of inventory schedules and DD Forms 
1342, DoD Property Record;
    (d) Prepare and maintain plant clearance cases and disposal 
documents;
    (e) Initiate screening and provide technical support to screeners in 
the selection of assets;
    (f) Conduct or arrange for verification of the following--
    (1) Quantity, condition, description, and special processing 
requirements of property listed on inventory schedules;
    (2) Technical and quantitative allocability of property;
    (g) Ensure the timely shipment or release by the contractor of 
property selected for transfer and donation;
    (h) Determine the appropriate method of disposal for items not 
selected for Federal agency use or donation and ensure final plant 
clearance is accomplished;
    (i) Evaluate and monitor the contractor's surplus property sales 
program;
    (j) For individual surplus property sales--
    (1) Approve method of sale;
    (2) Ensure the sales offerings meet prescribed requirements;
    (3) Witness bid openings;
    (4) Evaluate bids;
    (5) Approve sale awards;
    (6) Secure anti-trust clearances, as required;
    (7) Recommend the reasonableness of selling expenses; and
    (8) Ensure that sales proceeds are collected and property credited;
    (k) Monitor ongoing plant clearance actions to ensure delays are 
minimized and, when necessary, work with the contractor and property 
administrator to implement improvements;
    (l) Evaluate the adequacy of the contractor's property disposal 
procedures;
    (m) Support the property administrator during the compliance 
analysis of the disposition portion of the contractor's property control 
procedures;
    (n) Report all disposal deficiencies to the property administrator;
    (o) Account for all contractor inventory reported for disposal by 
the contractor and prepare prescribed plant clearance reports; and
    (p) Advise and assist the contractor, contracting officer, inventory 
manager, Federal agencies, and eligible donees in actions related to the 
proper and timely disposal of contractor inventory.

[57 FR 42632, Sept. 15, 1992]

                  Subpart 245.71_Plant Clearance Forms



Sec. 245.7101  Forms.

    Use the forms listed below in performance of plant clearance 
actions.



Sec. 245.7101-1  Standard Form 97, Certificate of Release of a Motor 
          Vehicle (Agency Record Copy).

    Use for transfers, donations, and sales of motor vehicles. The 
contracting officer shall execute the SF 97 and furnish it to the 
purchaser.



Sec. 245.7101-2  DD Form 1149, Requisition and Invoice Shipping 
          Document.

    Use for transfer and donation of contractor inventory. Donations of 
industrial plant equipment may be shipped via DD Form 1149. This form 
may also be used to consolidate contractor inventory redistribution 
system-directed shipments going to the same destination.

[[Page 284]]



Sec. 245.7101-3  DD Form 1348-1, DoD Single Line Item Release/Receipt 
          Document.

    Use for shipments of excess industrial plant equipment and 
contractor inventory redistribution system (CIRS) inventory.



Sec. 245.7101-4  DD Form 1640, Request for Plant Clearance.

    Use to request plant clearance assistance or transfer plant 
clearance.

                   Subpart 245.72_Special Instructions



Sec. 245.7201  Performing inventory verification and determination of 
          allocability.

    Use the following guidance for verifying inventory schedules--
    (a) Allocability. (1) Review contract requirements, delivery 
schedules, bills of material, and other pertinent material. Determine 
whether schedules include material which--
    (i) Is more than required or reasonably expected to be required for 
completion of the contract; or
    (ii) Might be usable on the current contract, or diverted to other 
commercial work or Government use.
    (2) Review the contractor's--
    (i) Recent purchases of similar material;
    (ii) Plans for current and scheduled production;
    (iii) Stock record entries; and
    (iv) Bills of material for similar items.
    (b) Quantity. Ensure available inventory is in accordance with 
quantities listed on the inventory schedules. While a complete physical 
count of each item is not required, perform sufficient checks to ensure 
accurate quantities.
    (c) Condition. Ensure the inventory condition matches that shown on 
the inventory schedules.



Sec. 245.7202  Establishing a plant clearance case.

    (a) Upon receipt of an acceptable inventory schedule or a DD Form 
1342, DoD Property Record, the plant clearance officer shall establish a 
plant clearance case file. The case folder will--
    (1) Identify the case number (see 245.7203);
    (2) Indicate the contractor's name and contract number;
    (3) Note the word ``Termination'' if applicable; and
    (4) Consolidate all inventory schedules applicable to one contract 
at the same location, if possible.
    (b) As a minimum, include in the plant clearance case file--
    (1) Inventory schedules or DD Form 1342, DoD Property Record, 
annotated to show all disposal actions;
    (2) Copies of documents forwarding inventory schedules to the 
appropriate screening activity;
    (3) Shipping or other instructions and correspondence directing 
disposition of contractor inventory;
    (4) Shipping documents transferring inventory;
    (5) Inventory verification survey or other documents showing 
completion of allocability review;
    (6) Forms authorizing donation or sale;
    (7) Document showing disposition of proceeds from plant clearance 
actions; and
    (8) Any other documents pertinent to disposal actions, including 
review board cases, antitrust clearances, and inventory disposal 
reports.



Sec. 245.7203  Assigning plant clearance case numbers.

    (a) Use a three-part, 11-character number constructed as follows:
    (1) Part 1: DoD Activity Address Number (6-character alphanumeric 
code) assigned to the contract administering activity.
    (2) Part 2: Locally assigned 4-character consecutive alphanumeric 
code, beginning each calendar year with 001 continuing as necessary 
through ZZZ. The fourth digit is the last number of the calendar year.
    (3) Part 3: The 11th character is a single letter identifying the 
department/agency:

C--Army
Q--Navy
E--Air Force
L--Marine Corps
U--Defense Logistics Agency
N--Defense Nuclear Agency
M--National Imagery and Mapping Agency
S--NASA

[[Page 285]]

D--Other DoD Activities
O--Non-DoD Activities

    (b) Record the plant clearance number on DD Form 1635, Plant 
Clearance Case Register, or mechanized equivalent.

[56 FR 36448, July 31, 1991, as amended at 64 FR 51077, Sept. 21, 1999]



Sec. 245.7204  Preparing inventory disposal report.

    (a) Prepare Standard Form 1424, Inventory Disposal Report, for each 
completed plant clearance case. For terminated contracts, prepare a 
consolidated Inventory Disposal Report for each termination docket.
    (b) Distribute the report to the contracting officer and to any 
other activities having an interest in the inventory disposal.
    (c) Items on the form are self-explanatory except:
    (1) Item 12--Insert net change due to shortages, overages, errors, 
pricing, or withdrawals, etc. Explain in item 16, Remarks.
    (2) Item 14--Insert amount contractor is retaining or purchasing at 
full acquisition cost (see FAR 45.605-1).
    (3) Item 15--Insert acquisition cost and net credit (full credit 
less approved handling, transportation, and restocking charges for items 
returned to supplier).
    (4) Item 16--Insert the acquisition cost for all transfers 
accomplished. For lines 16A and 16B, insert subtotals as indicated.
    (5) Item 18--Insert acquisition cost and gross proceeds. When 
approved sale costs are reimbursed from proceeds, show net proceeds in 
Item 26, Remarks.
    (6) Items 20 and 21--Use to identify and report transactions not 
otherwise identified, such as assets shipped to a Government precious 
metals reclamation activity, etc. Further explanation may be provided in 
Item 26, Remarks, if necessary.
    (7) Item 25--Totals dispositions must equal amounts on line 13 and 
must reflect all disposal actions within the case.
    (8) Item 26--Show the specific disposition of proceeds reported in 
Items 14, 15, and 18. Also indicate amounts deleted for specific 
contractor claims, or applied as a credit to the claim. Explain any 
entry requiring explanation.



Sec. 245.7205  Reporting excess and surplus contractor inventory.

    (a) Contract administration offices with plant clearance 
responsibilities will--
    (1) Use DD Form 1638, Report of Excess and Surplus Contractor 
Inventory, or mechanized equivalent, to report the disposition of 
contractor inventory. Do not include disposition actions transferred to 
other offices. Unless headquarters of the administering activity directs 
otherwise, complete only the column total for each line of this report.
    (2) Prepare quarterly reports for periods ending March 31, June 30, 
September 30, and December 31. Activities preparing manual reports will 
submit duplicate reports to the headquarters of the administering 
activity within ten working days after the close of the report period. 
(Report Control Symbol DD(I&L)(Q)1430).
    (b) Items on the report are self-explanatory except:
    (1) Line 1--Insert totals from line 7 of the preceding report.
    (2) Line 2--Insert net changes due to shortages, overages, errors, 
or withdrawals (other than purchases or retention at cost).
    (3) Line 3--Insert total excess inventory reported by contractors 
during the report period.
    (4) Line 5--Insert total plant clearance cases completed during the 
report period. Do not report cases as completed until all property is 
disposed. Acquisition cost must equal line 19.
    (5) Line 8--Insert amount retained or withdrawn at full cost.
    (6) Line 9--Insert acquisition cost in the ``Acquisition Cost'' 
column and insert acquisition cost less handling, transportation, or 
restocking charges, in the ``Proceeds'' column.
    (7) Line 10--Insert acquisition cost of all transfers completed 
during the report period. On lines 10A through 10H, insert subtotals 
representing transfers to the agency indicated. Exclude amounts on lines 
10A through 10H when computing line 19 totals.
    (8) Line 12--Insert the acquisition cost and gross proceeds. When 
sale

[[Page 286]]

costs are reimbursed from proceeds, show net proceeds in remarks.
    (9) Lines 14 and 15--Used to identify and report other transactions.
    (10) Line 18--Insert Section II totals. Line 18 acquisition cost 
must equal acquisition cost on line 5.



Sec. 245.7206  Transmitting DD Form 1342, DoD Property Record.

    As a minimum, the plant clearance officer will provide the following 
information in a letter forwarding DD Forms 1342 to DSCR--
    (a) Number of DD Forms 1342 included;
    (b) Automatic release date;
    (c) Screening complete date;
    (d) Contractor's name and address;
    (e) Contract number;
    (f) Contracting activity that awarded the contract under which the 
contractor acquired the equipment;
    (g) Location of the industrial plant equipment;
    (h) Total acquisition cost;
    (i) A statement advising that the automatic release date will not be 
extended;
    (j) A note stating that--
    (1) Request for transfer or shipment must include appropriate fund 
citations for packing, crating, and handling charges; and
    (2) Government bills of lading (GBLs) should be furnished or, if 
shipment will be accomplished by other than GBL, DSCR must cite 
transportation funds; and
    (k) The plant clearance officer's signature block.

[56 FR 36448, July 31, 1991, as amended at 62 FR 34128, June 24, 1997]

           Subpart 245.73_Sale of Surplus Contractor Inventory



Sec. 245.7301  Policy.

    (a) Screening must be completed before any surplus contractor 
inventory sale.
    (b) Except as provided in 245.7307, sales of surplus contractor 
inventory shall be competitive.
    (c) The commander of the contract administration office must approve 
the use of auctions, spot bids, or retail sales.

[56 FR 36448, July 31, 1991, as amended at 63 FR 31938, June 11, 1998]



Sec. 245.7302  Competitive sales.



Sec. 245.7302-1  Property descriptions.

    (a) Describe the property as ``used'' or ``unused.'' Indicate if 
unused property is still in the manufacturer's original containers. 
Qualifying statements such as ``well-preserved'' or ``repairs required'' 
are authorized. Do not use condition codes or the terms ``new'' or 
``salvage.''
    (b) Property descriptions must be accurate and adequate for 
identification by prospective bidders. Use commercial terminology and 
original manufacturer and brand name, if applicable.



Sec. 245.7302-2  Lotting.

    (a) Consider combining property into lots when the quantities, 
value, or nature of the property makes it uneconomical to sell 
separately.
    (b) When lotting is appropriate and economically practical--
    (1) Size the lots to encourage bidding by small businesses or 
individuals;
    (2) Lot unused items by make or manufacturer, except when quantities 
or dollar values are small;
    (3) Lot commercially similar items when practicable;
    (4) Lot used and unused items separately unless quantities, value, 
or nature of property makes it uneconomical to sell separately;
    (5) Size lots large enough to ensure the selling costs are not 
disproportionate to the anticipated proceeds.



Sec. 245.7302-3  Alternate bids.

    Offerors may be solicited to bid for groups or for the entire 
offering by use of the following:

    Item ---------- (Alternate Bid)
    This item consists of all property listed and described in Items --
------ to --------, inclusive. Award under this item will be made only 
if the highest acceptable bid on this item is equal to, or greater than, 
the total of the highest acceptable bids on Items -------- to --------, 
inclusive.

[[Page 287]]



Sec. 245.7302-4  Basis for sale.

    (a) Unit price basis--requires the offeror to state the bid price in 
terms of the quantity or weight generally applied in commercial sales of 
similar items.
    (b) Lot price basis--requires the offeror to submit a bid for the 
entire lot. Use the lot price basis of sale only when property cannot be 
sold by unit measure or the potential sales return is small.



Sec. 245.7302-5  Mailing lists.

    (a) The plant clearance officer will ensure the contractor solicits 
a sufficient number of bidders to obtain adequate competition.
    (b) When large quantities of property, special commodities, or 
unusual geographic locations are involved, the plant clearance officer 
is encouraged to obtain additional listings from: Defense Reutilization 
and Marketing Service, Attn: DRMS-OCR, 74 North Washington Avenue, 
Battle Creek, MI 49017-3092.



Sec. 245.7303  Formal bid procedures.

    (a) The contractor will use formal invitations for bid unless the 
plant clearance officer approves use of informal bid procedures.
    (b) The contractor shall solicit bids at least 15 calendar days 
before bid opening to allow adequate opportunity to inspect property and 
prepare bids.
    (c) For large sales, the contractor may use summary lists of items 
offered as bid sheets with detailed descriptions attached.
    (d) In addition to mailing or delivering notice of the proposed sale 
to prospective bidders, the contractor may, when the results are 
expected to justify the additional expense--
    (1) Display a notice of the proposed sale in appropriate public 
places.
    (2) Publish a sales notice in appropriate trade journals or 
magazines and local newspapers.
    (e) When the acquisition cost of the property to be sold at one 
time, in one place, is $250,000 or more, the contractor shall send a 
notice of the proposed sale to: U.S. Department of Commerce, Commerce 
Business Daily, Sales Section, P.O. Box 5999, Chicago, IL 60680.
    (1) The contractor shall send the CBD notice at least 20 days before 
bid opening, or date of sale.
    (2) CBD notices shall be--
    (i) Double spaced and in synopsis form suitable for printing;
    (ii) Transmitted by fastest mail available; and
    (iii) Contain the following information in the order listed:
    (A) Name and address of contractor issuing the invitation for bids;
    (B) Name or title, address, and telephone number of the official 
from whom copies of the sales offering and other information can be 
obtained;
    (C) Description of the property to be sold including, when desired, 
the total estimated acquisition cost;
    (D) The number of the invitation or sale;
    (E) The date of the sale or bid opening;
    (F) The type of sale, i.e., sealed bid, spot bid, auction; and
    (G) The location of the property.
    (f) The plant clearance officer or representative will witness the 
bid opening. Within two working days after bid opening, the contractor 
will submit to the plant clearance officer two copies of an abstract of 
all bids, signed by the witnessing Government representative.



Sec. 245.7304  Informal bid procedures.

    (a) Upon approval of the plant clearance officer, the contractor may 
issue informal invitations to bid (orally, telephonically, or by other 
informal media), provided--
    (1) Maximum practical competition is maintained;
    (2) Sources solicited are recorded; and
    (3) Informal bids are confirmed in writing.
    (b) Bids by the contractor or its employees shall be submitted to 
the plant clearance officer prior to soliciting bids from other 
prospective bidders.



Sec. 245.7305  Sale approval and award.

    The plant clearance officer will--
    (1) Evaluate bids to establish that the sale price is fair and 
reasonable, taking into consideration--
    (i) Knowledge or tests of the market;
    (ii) Current published prices for the property;

[[Page 288]]

    (iii) The nature, condition, quantity, and location of the property; 
and
    (iv) Information from the Defense Reutilization and Marketing 
Service.
    (2) Approve award to the responsible bidder whose bid is most 
advantageous to the Government, price and other factors considered. 
Award shall not be approved to any bidder who is not eligible to enter 
into a contract with the DoD due to inclusion on the list of Parties 
Excluded from Procurement Programs. If a compelling reason exists to 
award to a bidder on the excluded list, the plant clearance officer 
shall request approval from the headquarters of the administering 
activity.
    (3) Notify the contractor within five working days of the bidder to 
whom an award shall be made. The contractor shall make the award, 
collect the proceeds of the sale, and release the property to the 
purchaser. The contractor shall provide the plant clearance officer with 
evidence of delivery reflecting actual quantities released to the 
purchaser.



Sec. 245.7306  Sales services.

    When sale services are needed, the plant clearance officer will 
document the reasons in the case file and make arrangements directly 
with the Defense Reutilization and Marketing Service (DRMS) or General 
Services Administration (GSA). The arrangements will include a 
requirement to return all proceeds to the plant clearance officer for 
crediting in compliance with FAR 45.610-3.



Sec. 245.7307  Non-competitive sales.



Sec. 245.7307-1  General.

    (a) Non-competitive sales include purchases or retention at less 
than cost by the contractor.
    (b) Non-competitive sales may be made when--
    (1) The contracting department/agency or the plant clearance officer 
determines that this method is essential to expeditious plant clearance;
    (2) The sale is otherwise justified on the basis of circumstances 
listed in 245.7307-2;
    (3) The Government's interests are adequately protected; and
    (4) FAR subpart 1.7 requirements are met.
    (c) Non-competitive sales shall be at fair and reasonable prices not 
less than those reasonably expected under competitive sale.



Sec. 245.7307-2  Justification.

    (a) Conditions justifying non-competitive sales are--
    (1) Scientific equipment allocated to terminated research and 
development contracts with educational institutions;
    (2) No acceptable bids received under an advertised competitive 
sale;
    (3) Property value so small that anticipated proceeds would not 
warrant formal competitive sale;
    (4) Sale to States, territories, possessions, political subdivisions 
thereof, or tax-supported agencies therein, and the estimated fair 
market value of the property and other satisfactory terms of disposal 
are obtained;
    (5) Specialized nature of the property would not create bidder 
interest;
    (6) Removal of the property would reduce its value or result in 
disproportionate handling expenses; or
    (7) Such action is essential to the Government's interests.
    (b) The contracting department/agency will provide the contract 
administration office the sales justification and any special sales 
provisions when the department/agency decides to sell production 
equipment to the contractor by non-competitive sale.



Sec. 245.7308  Antitrust notification.

    (a) When contractor inventory with an estimated fair market value of 
$3 million or more or any patents, processes, techniques, or inventions, 
regardless of cost, are sold or otherwise disposed of to private 
interests notify the Attorney General and the General Services 
Administration (GSA) of the proposed terms and conditions of disposal. 
Submit the following information to the Department of Justice and the 
GSA through the contract administration agency channels. Report Control 
Symbol DD-ACQ(AR) 1492 applies.
    (1) Location and description of property (specify tonnage if scrap);

[[Page 289]]

    (2) Proposed sale price (explain if the proposed purchaser was not 
highest bidder);
    (3) Acquisition cost of property;
    (4) Manner of sale, indicating whether by--
    (i) Sealed bid (specify number of bidders solicited and bids 
received);
    (ii) Auction or spot bid (state how sale was advertised); or
    (iii) Negotiation (explain why property was not sold competitively);
    (5) Proposed purchaser's name, address, and trade name (if any) 
under which proposed purchaser is doing business;
    (6) If a corporation, provide state and date of incorporation, and 
name and address of--
    (i) Each holder of 25 percent or more of the corporate stock;
    (ii) Each subsidiary; and
    (iii) Each company under common control with proposed purchaser;
    (7) If a partnership, provide--
    (i) Name and address of each partner; and
    (ii) Other business connections of each partner;
    (8) Nature of proposed purchaser's business (indicate whether its 
scope is local, statewide, regional, or national);
    (9) Estimated dollar volume of sales of proposed purchaser (as of 
latest calendar or fiscal year);
    (10) Estimated net worth of proposed purchaser; and
    (11) Intended use of property.
    (b) Do not dispose of property until the Attorney General determines 
whether the proposed disposal action would tend to create or maintain a 
situation inconsistent with the antitrust laws.
    (c) If the Attorney General advises that the proposed disposition is 
inconsistent with the antitrust laws, do not continue with the proposed 
disposition.
    (d) Under non-competitive sales, the prospective purchaser shall be 
informed that final consummation of the sale is subject to determination 
by the Attorney General.
    (e) Under competitive or non-competitive sales, the purchaser is 
required to provide the information required in paragraph (a) of this 
subsection.

[56 FR 36448, July 31, 1991, as amended at 57 FR 42633, Sept. 15, 1992; 
57 FR 53601, Nov. 12, 1992]



Sec. 245.7309  Mandatory terms and conditions--formal invitations.

    Sale by formal invitation shall include, as a minimum, the terms and 
conditions in this section.



Sec. 245.7309-1  Inspection.

    The Bidder is invited to inspect the property prior to submitting a 
bid. Property will be available for inspection at the places and times 
specified in the Invitation. Failure to inspect property does not 
constitute grounds for the withdrawal of a bid after opening.



Sec. 245.7309-2  Condition and location of property.

    (a) Unless otherwise specifically provided in the Invitation, all 
property is offered for sale ``as is'' and ``where is.'' If the 
Invitation provides that the Contractor will load, then ``where is'' 
means f.o.b. conveyance at the point specified in the Invitation.
    (b) The description is based on the best available information. 
However, the Contractor makes no warranty, express or implied, as to 
quantity, kind, character, quality, weight, size, or description of the 
property or its fitness for any use or purpose.
    (c) Except as provided in Conditions 245.7306-8, Variations in 
Quantity or Weight, and 245.7306-10, Risk of Loss, no request for 
adjustment in price or for rescission of the sale will be considered. 
This is not a sale by sample.



Sec. 245.7309-3  Consideration of bids.

    (a) Bidder agrees that this bid is firm and irrevocable within the 
acceptance period specified in the Invitation (or, if not specified, not 
less than ten or more than 60 days).
    (b) The right is reserved to reject any or all bids, to waive any 
technical defects in bids, and, unless otherwise specified in the 
offering or by the Bidder, to accept any one item or group of items in 
the bid. Unless the invitation provides otherwise, bids--
    (1) May be on any or all items;

[[Page 290]]

    (2) Must be submitted on the unit basis specified for that item;
    (3) Must cover the total number of units designated for that item; 
and
    (4) Unit prices govern.



Sec. 245.7309-4  Payment.

    (a) Purchaser agrees to pay the full purchase price for awarded 
property at the prices quoted in the bid. Unless an adjustment is 
required pursuant to Condition 245.7306-8, Variations in Quantity or 
Weight, payment must be made within the time specified for removal and 
prior to delivery of any of the property. In the event that any 
adjustment is made, payment must be made immediately after such 
adjustment.
    (b) The full purchase price, or balance if a bid deposit was 
required, shall be paid to the Contractor in cash or by certified check, 
cashier's check, traveler's check, bank draft, or postal or express 
money order. The Contractor is not required to extend credit to any 
purchaser.
    (c) The Contractor reserves the right to apply any bid deposits made 
under this Invitation by a bidder against any amounts due under a 
contract awarded by the Contractor under this Invitation. If the total 
sum due to the contractor is less than the amount deposited with the 
bid, the difference shall be promptly refunded. Deposits accompanying 
bids which are not accepted shall be promptly returned.



Sec. 245.7309-5  Title.

    (a) Unless otherwise specified in the Invitation, title to property 
sold under this Invitation shall vest in the Purchaser when full payment 
is made. If the Invitation provides for loading by the Contractor, title 
shall not vest until payment and loading are completed.
    (b) A Standard Form 97, Certificate of Release of a Motor Vehicle, 
(or a State certificate of title) shall be furnished for motor vehicles 
and motor-propelled or motor-drawn equipment requiring licensing.



Sec. 245.7309-6  Delivery and removal of property.

    (a) Unless otherwise specified in the Invitation, the Purchaser 
shall be entitled to obtain the property upon vesting of title in the 
Purchaser. Delivery shall be made at the designated location, and 
removal will be at the Purchaser's expense within the time frame 
specified in the Invitation or any additional time allowed by the 
Contractor.
    (b) The Purchaser shall reimburse the Contractor for any damage to 
the Contractor's property caused by Purchaser's removal operations. If 
additional time is required to remove the property, the Contractor, 
without limiting any other rights, may require the Purchaser to pay 
reasonable storage charges.



Sec. 245.7309-7  Default.

    If the successful Bidder fails to make full payment, remove property 
by the specified date, or comply with any other terms and conditions of 
sale, the Contractor reserves the right to sell or otherwise dispose of 
any or all such property and to charge losses and incidental expenses to 
the defaulting Bidder. Bid deposits received (if required in the 
Invitation) shall be applied against such losses and expenses.



Sec. 245.7309-8  Variations in quantity or weight.

    When property is sold on a ``unit price'' basis, the Contractor 
reserves the right to vary by up to 15 percent the quantity or weight 
listed in the Invitation and the Purchaser agrees to accept delivery of 
any quantity or weight within these limits. The purchase price shall be 
adjusted in accordance with the unit price and on the basis of the 
quantity or weight delivered.



Sec. 245.7309-9  Weighing.

    (a) When weighing is necessary to determine the exact purchase 
price, the Purchaser shall arrange for and pay all weighing expenses. 
When removal is by truck, weighing shall be subject to supervision and 
accomplished on--
    (1) Contractor scales;
    (2) Certified scales; or
    (3) Other scales acceptable to both parties.
    (b) When removal is by rail, weighing shall be on railroad scales or 
by other means acceptable to the railroad for

[[Page 291]]

freight purposes. The Purchaser shall pay switching charges.



Sec. 245.7309-10  Risk of loss.

    The Contractor is responsible for reasonable care and protection of 
the property until the date specified for removal. All risk of loss, 
damage, or destruction from any cause whatsoever shall be borne by the 
Purchaser after passage of title.



Sec. 245.7309-11  Liability.

    Contractor and Government liability, when liability has been 
established, shall not exceed the refund of any portion of the purchase 
price already received by the Contractor.



Sec. 245.7309-12  Oral statements.

    Any oral statement by the Contractor changing or supplementing the 
contract or any condition thereof is unauthorized.



Sec. 245.7309-13  Eligibility of bidders.

    The Bidder shall certify that the Bidder is not--
    (a) A civilian employee of the Department of Defense or the United 
States Coast Guard whose duties include any functional or supervisory 
responsibility for disposal of contractor inventory;
    (b) A member of the United States Armed Forces, including the Coast 
Guard, whose duties include any functional or supervisory responsibility 
for disposal of contractor inventory;
    (c) An agent, employee or immediate member of the household of 
personnel in paragraphs (a) and (b).



Sec. 245.7309-14  Claims liability.

    The Purchaser or Bidder agrees to save the Contractor and Government 
harmless from any and all claims, demands, actions, debts, liabilities, 
judgments, costs, and attorney's fees arising out of, claimed on account 
of, or in any manner predicated upon loss of or damage to property of, 
and injuries to or the death of any and all persons whatsoever, in any 
manner caused or contributed to by the Purchaser or Bidder, their 
agents, servants or employees, while in, upon, or about the sale site on 
which the property sold or offered for sale is located, or while going 
to or departing from such areas; and to save the Contractor and 
Government harmless from and on account of damages of any kind which the 
Contractor may suffer as the result of the acts of any of the 
Purchaser's agents, servants, or employees while in or about the said 
sites.



Sec. 245.7310  Special term and conditions.

    When necessary, include the special conditions of this section in 
formal invitations.



Sec. 245.7310-1  Demilitarization.

    When demilitarization of property is required, whether on or off 
contractor or Government premises, the invitation must include the 
following clause:

    (a) Demilitarization.
    Item(s) -------- require demilitarization by the Purchaser in the 
manner and to the degree set forth below:
    (1) For property located in the United States insert item number(s) 
and specific demilitarization requirements for item(s) shown in 
Attachment 1, Part 2 of Defense, Demilitarization Manual;
    (2) For property located outside the United States, insert item 
number(s) and specific demilitarization requirements for item(s) shown 
in Attachment 1, Part 3 of DoD 4160.21-M-1, Defense Demilitarization 
Manual.
    (b) Demilitarization on Government Premises. Property requiring 
demilitarization shall not be removed, and title shall not pass to the 
Purchaser, until demilitarization has been completed and approved by an 
authorized Contractor and Government representative. Demilitarization 
will be accomplished as specified in the contract. Component parts vital 
to the military or lethal purpose of the property shall be rendered 
unusable. The Purchaser agrees to assume all cost incident to the 
demilitarization and to restore the working area to its present 
condition after removing the demilitarized property.
    (c) Demilitarization on Non-Government Premises. Property requiring 
demilitarization shall be demilitarized by the Purchaser under 
supervision of qualified Department of Defense personnel. Title shall 
not pass to the Purchaser until demilitarization has been completed by 
the Purchaser and approved by an authorized Contractor and Government 
representative. Demilitarization will be accomplished as specified in 
the contract. Component parts vital to the military or lethal purpose of 
the property shall be rendered unusable. The Purchaser agrees to assume 
all costs incident to the demilitarization.

[[Page 292]]

    (d) Failure to Demilitarize. If the Purchaser fails to demilitarize 
the property as specified in the contract, the Contractor may, upon 
giving ten days written notice from date of mailing to the Purchaser--
    (1) Repossess, demilitarize, and return the property to the 
Purchaser. The Purchaser hereby agrees to pay to the Contractor, prior 
to the return of the property, all costs incurred by the Contractor in 
repossessing, demilitarizing, and returning the property to the 
Purchaser.
    (2) Repossess, demilitarize, and resell the property, and charge the 
defaulting Purchaser will all excess costs incurred by the Contractor. 
The Contractor shall deduct these costs from the purchase price and 
refund the balance of the purchase price, if any, to the Purchaser. In 
the event the excess costs exceed the purchase price, the defaulting 
Purchaser hereby agrees to pay these excess costs to the Contractor.
    (3) Repossess and resell the property under similar terms and 
conditions. In the event this option is exercised, the Contractor shall 
charge the defaulting Purchaser with all excess costs incurred by the 
Contractor. The Contractor shall deduct these excess costs from the 
original purchase price and refund the balance of the purchase price, if 
any, to the defaulting Purchaser. Should the excess costs to the 
Contractor exceed the purchase price, the defaulting Purchaser hereby 
agrees to pay these excess costs to the Contractor.



Sec. 245.7310-2  Performance bond.

    Performance bonds are required when work, other than loading, is to 
be performed by the purchaser and a bond is considered necessary to 
ensure performance. Generally, performance bonds shall be 100 percent of 
the estimated cost of the work to be performed. If a 100 percent 
performance bond would be disadvantageous to the Contractor or to the 
Government, the amount may be reduced to not less than 50 percent of the 
estimated cost of the work. Include the following condition when 
performance bonds are required:

                            Performance Bond

    Within ten days after notice of award, the Purchaser shall furnish a 
performance bond in the sum of $-------- to cover the Purchaser's 
obligations. Such bond shall remain in full force and effect during the 
term of the contract and any extensions as may be agreed upon. The 
Purchaser shall not be permitted to begin performance until the bond has 
been received.



Sec. 245.7310-3  Liability and insurance.

    When the work to be performed by the purchaser warrants, use the 
following:

                         Liability and Insurance

    The Purchaser shall at the Purchaser's own expense purchase and 
maintain during the term of the contract insurance as follows:
    (a) Standard workers' compensation and employer's liability 
insurance required under State and Federal statutes. However, the 
Contractor may waive this requirement upon receipt of satisfactory 
evidence that the Purchaser is qualified as a self-insurer under 
applicable provisions of law.
    (b) Bodily injury liability insurance in an amount not less than 
$300,000 for any one occurrence; and
    (c) Property damage liability insurance.



Sec. 245.7310-4  Dangerous property.

    The following warning shall be included when it cannot be certified 
that the property is completely harmless:

                           Dangerous Property

    Purchasers are warned that the property purchased may contain items 
of an explosive, toxic, or inflammable nature, notwithstanding 
reasonable care exercised by the Contractor to render the property 
harmless. The Contractor and the Government assume no liability for 
damage to the property of the Purchaser, or for personal injuries or 
disabilities to the Purchaser or the Purchaser's employees, or to any 
other person, arising from or incident to the purchase of the property, 
or its use or disposition by the Purchaser. The Purchaser shall save the 
Contractor and the Government harmless from any and all such claims.



Sec. 245.7310-5  Controlled substances.

    The sale of controlled substances, e.g., narcotics, stimulants, 
depressants, or hallucinogenic drugs, shall be subject to the following 
special conditions:
    (a) Controlled Substances. Bids will be rejected unless the Bidder 
submits the following certification with its bid:

    The undersigned represents and warrants that it is registered under 
The Comprehensive Drug Abuse Prevention and Control Act of 1970, and is 
authorized under the law and by the Attorney General, U.S. Department of 
Justice (Bureau of Narcotics and Dangerous Drugs) to buy controlled 
substances as a medical practitioner, dealer or manufacturer of 
controlled substances.


[[Page 293]]


    (b) Narcotic Drugs and Chemicals. Bids will be rejected unless the 
Bidder submits the following certification with its bid:

    The undersigned represents and warrants that it is registered under 
Federal narcotics laws and is authorized by law and by the Bureau of 
Narcotics, United States Treasury Department, as a manufacturer of 
narcotics.



Sec. 245.7310-6  Radioactive material.

    The following shall be used whenever the property offered for sale 
is capable of emitting ionized radiation:

                          Radioactive Material

    Purchasers are warned that the property may be capable of emitting 
ionized radiation. The Contractor and the Government assume no liability 
for damage to the property of the Purchaser, or for personal injuries or 
disabilities to the Purchaser or the Purchaser's employees, or to any 
other person arising from or incident to the purchase of the property or 
its use or disposition by the Purchaser. The Purchaser shall hold the 
Contractor and the Government harmless from all such claims. The 
Purchase should warn possessors or users of the property that it may be 
capable of emitting ionized radiation.



Sec. 245.7310-7  Scrap warranty.

    The following condition shall be used whenever property, other than 
production scrap, is offered for sale as scrap:

                             Scrap Warranty

    The Purchaser represents and warrants that the property will be used 
only as scrap, and will not be resold until--
    (a) Scrapping has been accomplished; or
    (b) The Purchaser obtains an identical warranty from any subsequent 
purchaser.



Sec. 245.7310-8  Antitrust clearance.

    When property with an acquisition cost of $3 million or more is to 
be sold, include the following in the invitation:

                                Antitrust

    When the property offered for sale has an acquisition cost of $3 
million or more, or consists of patents, processes, techniques, or 
inventions, irrespective of cost, the successful Bidder shall be 
required to furnish additional information and shall allow up to 60 days 
for acceptance of its bid. Award shall be made only upon advice from the 
Department of Justice that the proposed sale would not create or 
maintain a situation inconsistent with the antitrust laws.



Sec. 245.7311  Optional conditions.

    The following special conditions of sale may be added at the option 
of the contractor:



Sec. 245.7311-1  Sales and use tax liability.

    For purchases of property subject to a state sales or use tax, a 
special condition of sale may stipulate that the Purchaser shall pay and 
the Contractor shall collect the amount of the tax, which shall be 
itemized separately on the billing document.



Sec. 245.7311-2  Safety, security, and fire regulations.



Sec. 245.7311-3  Bid deposits.



Sec. 245.7311-4  Other special conditions.

    Other special conditions considered necessary by the Contractor are 
subject to the prior approval of the plant clearance officer. Approval 
will normally be granted provided the prescribed conditions of sale are 
not altered or affected and the interest of the Government is not 
adversely affected.

                       PART 246_QUALITY ASSURANCE

                          Subpart 246.1_General

Sec.

Sec. 246.102 Policy.

Sec. 246.103 Contracting office responsibilities.

               Subpart 246.2_Contract Quality Requirements


Sec. 246.202 Types of contract quality requirements.

Sec. 246.202-4 Higher-level contract quality requirements.

                     Subpart 246.3_Contract Clauses


Sec. 246.370 Material inspection and receiving report.

           Subpart 246.4_Government Contract Quality Assurance


Sec. 246.402 Government contract quality assurance at source.

Sec. 246.404 Government contract quality assurance for acquisitions at 
          or below the simplified acquisition threshold.

Sec. 246.406 Foreign governments.

Sec. 246.407 Nonconforming supplies or services.

Sec. 246.408 Single-agency assignments of Government contract quality 
          assurance.

Sec. 246.408-70 Subsistence.

[[Page 294]]


Sec. 246.408-71 Aircraft.

Sec. 246.470 Government contract quality assurance actions.

Sec. 246.470-1 Assessment of additional costs.

Sec. 246.470-2 Quality evaluation data.

Sec. 246.471 Authorizing shipment of supplies.

Sec. 246.472 Inspection stamping.

                        Subpart 246.5_Acceptance


Sec. 246.504 Certificate of conformance.

         Subpart 246.6_Material Inspection and Receiving Reports


Sec. 246.601 General.

                        Subpart 246.7_Warranties


Sec. 246.701 Definitions.

Sec. 246.704 Authority for use of warranties.

Sec. 246.705 Limitations.

Sec. 246.706 Warranty terms and conditions.

Sec. 246.708 Warranties of data.

Sec. 246.710 Contract clauses.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36460, July 31, 1991, unless otherwise noted.

                          Subpart 246.1_General



Sec. 246.102  Policy.

    Departments and agencies shall also--
    (1) Develop and manage a systematic, cost-effective Government 
contract quality assurance program to ensure that contract performance 
conforms to specified requirements. Apply Government quality assurance 
to all contracts for services and products designed, developed, 
purchased, produced, stored, distributed, operated, maintained, or 
disposed of by contractors.
    (2) Conduct quality audits to ensure the quality of products and 
services meet contractual requirements.
    (3) Base the type and extent of Government contract quality 
assurance actions on the particular acquisition.
    (4) Provide contractors the maximum flexibility in establishing 
efficient and effective quality programs to meet contractual 
requirements. Contractor quality programs may be modeled on military, 
commercial, national, or international quality standards.

[56 FR 36460, July 31, 1991, as amended at 60 FR 33145, June 27, 1995; 
71 FR 27646, May 12, 2006]



Sec. 246.103  Contracting office responsibilities.

    (1) The contracting office must coordinate with the quality 
assurance activity before changing any quality requirement.
    (2) The activity responsible for technical requirements may prepare 
instructions covering the type and extent of Government inspections for 
acquisitions that are complex, have critical applications, or have 
unusual requirements. Follow the procedures at PGI 246.103(2) for 
preparation of instructions.

[71 FR 27647, May 12, 2006]

               Subpart 246.2_Contract Quality Requirements



Sec. 246.202  Types of contract quality requirements.



Sec. 246.202-4  Higher-level contract quality requirements.

    (1) Higher-level contract quality requirements are used in addition 
to a standard inspection requirement.
    (2) Higher-level contract quality requirements, including 
nongovernment quality system standards adopted to meet DoD needs, are 
listed in the DoD Index of Specifications and Standards.

[60 FR 33145, June 27, 1995. Redesignated and amended at 60 FR 61599, 
Nov. 30, 1995]

                     Subpart 246.3_Contract Clauses



Sec. 246.370  Material inspection and receiving report.

    (a) Use the clause at 252.246-7000, Material Inspection and 
Receiving Report, in solicitations and contracts when there will be 
separate and distinct deliverables, even if the deliverables are not 
separately priced.
    (b) When contract administration is retained by the contracting 
office, the clause at 252.246-7000, Material Inspection and Receiving 
Report, is not required for--
    (1) Contracts awarded using simplified acquisition procedures;
    (2) Negotiated subsistence contracts;
    (3) Contracts for fresh milk and related fresh dairy products;
    (4) Contracts for which the deliverable is a scientific or technical 
report;

[[Page 295]]

    (5) Research and development contracts not requiring the delivery of 
separately priced end items;
    (6) Base, post, camp, or station contracts;
    (7) Contracts in overseas areas when the preparation and 
distribution of the DD Form 250, Material Inspection and Receiving 
Report, by the contractor would not be practicable. In these cases, 
arrange for the contractor to provide the information necessary for the 
contracting office to prepare the DD Form 250;
    (8) Contracts for services when hardware is not acquired as an item 
in the contract; and
    (9) Indefinite delivery type contracts placed by central contracting 
offices which authorize only base, post, camp, or station activities to 
issue orders.

[56 FR 36460, July 31, 1991, as amended at 64 FR 2598, Jan. 15, 1999]

           Subpart 246.4_Government Contract Quality Assurance



Sec. 246.402  Government contract quality assurance at source.

    Do not require Government contract quality assurance at source for 
contracts or delivery orders valued below $250,000, unless--
    (1) Mandated by DoD regulation;
    (2) Required by a memorandum of agreement between the acquiring 
department or agency and the contract administration agency; or
    (3) The contracting officer determines that--
    (i) Contract technical requirements are significant (e.g., the 
technical requirements include drawings, test procedures, or performance 
requirements);
    (ii) The product being acquired--
    (A) Has critical characteristics;
    (B) Has specific features identified that make Government contract 
quality assurance at source necessary; or
    (C) Has specific acquisition concerns identified that make 
Government contract quality assurance at source necessary; and
    (iii) The contract is being awarded to--
    (A) A manufacturer or producer; or
    (B) A non-manufacturer or non-producer and specific Government 
verifications have been identified as necessary and feasible to perform.

[70 FR 8543, Feb. 22, 2005]



Sec. 246.404  Government contract quality assurance for acquisitions at 
          or below the simplified acquisition threshold.

    Do not require Government contract quality assurance at source for 
contracts or delivery orders valued at or below the simplified 
acquisition threshold unless the criteria at 246.402 have been met.

[70 FR 8543, Feb. 22, 2005]



Sec. 246.406  Foreign governments.

    (1) Quality assurance among North Atlantic Treaty Organization 
(NATO) countries. (i) NATO Standardization Agreement (STANAG) 4107, 
Mutual Acceptance of Government Quality Assurance and Usage of the 
Allied Quality Assurance Publications--
    (A) Contains the processes, procedures, terms, and conditions under 
which one NATO member nation will perform quality assurance for another 
NATO member nation or NATO organization;
    (B) Standardizes the development, updating, and application of the 
Allied Quality Assurance Publications; and
    (C) Has been ratified by the United States and other nations in NATO 
with certain reservations identified in STANAG 4107.
    (ii) Departments and agencies shall follow STANAG 4107 when--
    (A) Asking a NATO member nation to perform quality assurance; or
    (B) Performing quality assurance when requested by a NATO member 
nation or NATO organization.
    (2) International military sales (non-NATO). Departments and 
agencies shall--
    (i) Perform quality assurance services on international military 
sales contracts or in accordance with existing agreements;
    (ii) Inform host or U.S. Government personnel and contractors on the 
use of quality assurance publications; and
    (iii) Delegate quality assurance to the host government when 
satisfactory services are available.

[[Page 296]]

    (3) Reciprocal quality assurance agreements. A Memorandum of 
Understanding (MOU) with a foreign country may contain an annex that 
provides for the reciprocal performance of quality assurance services. 
MOUs should be checked to determine whether such an annex exists for the 
country where a defense contract will be performed. (See subpart 225.8 
for more information about MOUs.)

[56 FR 36460, July 31, 1991, as amended at 63 FR 43890, Aug. 17, 1998; 
63 FR 47439, Sept. 8, 1998; 71 FR 27647, May 12, 2006]



Sec. 246.407  Nonconforming supplies or services.

    (f) If nonconforming material or services are discovered after 
acceptance, the defect appears to be the fault of the contractor, any 
warranty has expired, and there are no other contractual remedies, the 
contracting officer--
    (i) Shall notify the contractor in writing of the nonconforming 
material or service;
    (ii) Shall request that the contractor repair or replace the 
material, or perform the service, at no cost to the Government; and
    (iii) May accept consideration if offered. For guidance on 
solicitation of a refund, see subpart 242.71.
    (S-70) The head of the design control activity is the approval 
authority for acceptance of any nonconforming aviation critical safety 
items or nonconforming modification, repair, or overhaul of such items 
(see 209.270). Authority for acceptance of minor nonconformances in 
aviation critical safety items may be delegated as determined 
appropriate by the design control activity. See additional information 
at PGI 246.407.

[56 FR 36460, July 31, 1991, as amended at 67 FR 4208, Jan. 29, 2002; 69 
FR 55989, Sept. 17, 2004; 70 FR 57190, Sept. 30, 2005]



Sec. 246.408  Single-agency assignments of Government contract quality 
          assurance.



Sec. 246.408-70  Subsistence.

    (a) The Surgeons General of the military departments are responsible 
for--
    (1) Acceptance criteria;
    (2) Technical requirements; and
    (3) Inspection procedures needed to assure wholesomeness of foods.
    (b) The contracting office may designate any Federal activity, 
capable of assuring wholesomeness and quality in food, to perform 
quality assurance for subsistence contract items. The designation may--
    (1) Include medical service personnel of the military departments; 
and
    (2) Be on a reimbursable basis.



Sec. 246.408-71  Aircraft.

    (a) The Federal Aviation Administration (FAA) has certain 
responsibilities and prerogatives in connection with some commercial 
aircraft and of aircraft equipment and accessories (Pub. L. 85-726 (72 
Stat 776, 49 U.S.C. 1423)). This includes the issuance of various 
certificates applicable to design, manufacture, and airworthiness.
    (b) FAA evaluations are not a substitute for normal DoD evaluations 
of the contractor's quality assurance measures. Actual records of FAA 
evaluations may be of use to the contract administration office (CAO) 
and should be used to their maximum advantage.
    (c) The CAO shall ensure that the contractor possesses any required 
FAA certificates prior to acceptance.

[56 FR 36460, July 31, 1991, as amended at 71 FR 27647, May 12, 2006]



Sec. 246.470  Government contract quality assurance actions.



Sec. 246.470-1  Assessment of additional costs.

    (a) Under the clause at FAR 52.246-2, Inspection of Supplies--Fixed-
Price, after considering the factors in paragraph (c) of this 
subsection, the quality assurance representative (QAR) may believe that 
the assessment of additional costs is warranted. If so, the 
representative shall recommend that the contracting officer take the 
necessary action and provide a recommendation as to the amount of 
additional costs. Costs are based on the applicable Federal agency, 
foreign military sale, or public rate in effect at the time of the 
delay, reinspection, or retest.
    (b) If the contracting officer agrees with the QAR, the contracting 
officer shall--

[[Page 297]]

    (1) Notify the contractor, in writing, of the determination to 
exercise the Government's right under the clause at FAR 52.246-2, 
Inspection of Supplies--Fixed-Price; and
    (2) Demand payment of the costs in accordance with the collection 
procedures contained in FAR Subpart 32.6.
    (c) In making a determination to assess additional costs, the 
contracting officer shall consider--
    (1) The frequency of delays, reinspection, or retest under both 
current and prior contracts;
    (2) The cause of such delay, reinspection, or retest; and
    (3) The expense of recovering the additional costs.

[71 FR 27647, May 12, 2006]



Sec. 246.470-2  Quality evaluation data.

    The contract administration office shall establish a system for the 
collection, evaluation, and use of the types of quality evaluation data 
specified in PGI 246.470-2.

[71 FR 27647, May 12, 2006]



Sec. 246.471  Authorizing shipment of supplies.

    (a) General. (1) Ordinarily, a representative of the contract 
administration office signs or stamps the shipping papers that accompany 
Government source-inspected supplies to release them for shipment. This 
is done for both prime and subcontracts.
    (2) An alternative procedure (see paragraph (b) of this section) 
permits the contractor to assume the responsibility for releasing the 
supplies for shipment.
    (3) The alternative procedure may include prime contractor release 
of supplies inspected at a subcontractor's facility.
    (4) The use of the alternative procedure releases DoD manpower to 
perform technical functions by eliminating routine signing or stamping 
of the papers accompanying each shipment.
    (b) Alternative Procedures--Contract Release for Shipment. (1) The 
contract administration office may authorize, in writing, the contractor 
to release supplies for shipment when--
    (i) The stamping or signing of the shipping papers by a 
representative of the contract administration office interferes with the 
operation of the Government contract quality assurance program or takes 
too much of the Government representative's time;
    (ii) There is sufficient continuity of production to permit the 
Government to establish a systematic and continuing evaluation of the 
contractor's control of quality; and
    (iii) The contractor has a record of satisfactory quality, including 
that pertaining to preparation for shipment.
    (2) The contract administration office shall withdraw, in writing, 
the authorization when there is an indication that the conditions in 
paragraph (b)(1) of this subsection no longer exist.
    (3) When the alternative procedure is used, require the contractor 
to--
    (i) Type or stamp, and sign, the following statement on the required 
copy or copies of the shipping paper(s), or on an attachment--

    The supplies in this shipment--
    1. Have been subjected to and have passed all examinations and tests 
required by the contract;
    2. Were shipped in accordance with authorized shipping instructions;
    3. Conform to the quality, identity, and condition called for by the 
contract; and
    4. Are of the quantity shown on this document.
    This shipment was--
    1. Released in accordance with section 246.471 of the Defense FAR 
Supplement; and
    2. Authorized by (name and title of the authorized representative of 
the contract administration office) in a letter dated (date of 
authorizing letter). (Signature and title of contractor's designated 
official.)

    (ii) Release and process, in accordance with established 
instructions, the DD Form 250, Material Inspection and Receiving Report, 
or other authorized receiving report.



Sec. 246.472  Inspection stamping.

    (a) DoD quality inspection approval marking designs (stamps) may be 
used for both prime contracts and subcontracts. Follow the procedures at 
PGI 246.472(a) for use of DoD inspection stamps.
    (b) Policies and procedures regarding the use of National 
Aeronautics and Space Administration (NASA) quality

[[Page 298]]

status stamps are contained in NASA publications. When requested by NASA 
centers, the DoD inspector shall use NASA quality status stamps in 
accordance with current NASA requirements.

[71 FR 27647, May 12, 2006]

                        Subpart 246.5_Acceptance



Sec. 246.504  Certificate of conformance.

    Before authorizing a certificate of conformance for aviation 
critical safety items, obtain the concurrence of the head of the design 
control activity (see 209.270).

[69 FR 55989, Sept. 17, 2004]

         Subpart 246.6_Material Inspection and Receiving Reports



Sec. 246.601  General.

    See Appendix F, Material Inspection and Receiving Report, for 
procedures and instructions for the use, preparation, and distribution 
of--
    (1) The Material Inspection and Receiving Report (DD Form 250 
series); and
    (2) Supplier's commercial shipping/packing lists used to evidence 
Government contract quality assurance.

[71 FR 27647, May 12, 2006]

                        Subpart 246.7_Warranties



Sec. 246.701  Definitions.

    Acceptance, as defined in FAR 46.701 and as used in this subpart and 
in the warranty clauses at FAR 52.246-17, Warranty of Supplies of a 
Noncomplex Nature; FAR 52.246-18, Warranty of Supplies of a Complex 
Nature; FAR 52.246-19, Warranty of Systems and Equipment Under 
Performance Specifications or Design Criteria; and FAR 52.246-20, 
Warranty of Services, includes the execution of an official document 
(e.g., DD Form 250, Material Inspection and Receiving Report) by an 
authorized representative of the Government.
    Defect, as used in this subpart, means any condition or 
characteristic in any supply or service furnished by the contractor 
under the contract that is not in compliance with the requirements of 
the contract.



Sec. 246.704  Authority for use of warranties.

    (1) The chief of the contracting office must approve use of a 
warranty, except in acquisitions for--
    (i) Commercial items (see FAR 46.709);
    (ii) Technical data, unless the warranty provides for extended 
liability (see 246.708);
    (iii) Supplies and services in fixed-price type contracts containing 
quality assurance provisions that reference higher-level contract 
quality requirements (see 246.202-4); or
    (iv) Supplies and services in construction contracts when using the 
warranties that are contained in Federal, military, or construction 
guide specifications.
    (2) The chief of the contracting office shall approve the use of a 
warranty only when the benefits are expected to outweigh the cost.

[71 FR 27647, May 12, 2006]



Sec. 246.705  Limitations.

    (a) In addition to the exceptions provided in FAR 46.705(a), 
warranties in the clause at 252.246-7001, Warranty of Data, may be used 
in cost-reimbursement contracts.

[71 FR 27647, May 12, 2006]



Sec. 246.706  Warranty terms and conditions.

    (b)(5) Markings. For non-commercial items, use MIL-STD-129, Marking 
for Shipments and Storage, and MIL-STD-130, Identification Marking of 
U.S. Military Property, when marking warranty items.

[71 FR 27647, May 12, 2006]



Sec. 246.708  Warranties of data.

    Obtain warranties on technical data when practicable and cost 
effective. Consider the factors in FAR 46.703 in deciding whether to 
obtain warranties of technical data. Consider the following in deciding 
whether to use extended liability provisions--
    (1) The likelihood that correction or replacement of the 
nonconforming data, or a price adjustment, will not give adequate 
protection to the Government; and

[[Page 299]]

    (2) The effectiveness of the additional remedy as a deterrent 
against furnishing nonconforming data.



Sec. 246.710  Contract clauses.

    (1) Use a clause substantially the same as the clause at 252.246-
7001, Warranty of Data, in solicitations and contracts that include the 
clause at 252.227-7013, Rights in Technical Data and Computer Software, 
when there is a need for greater protection or period of liability than 
provided by the inspection and warranty clauses prescribed in FAR Part 
46.
    (2) Use the clause at 252.246-7001, Warranty of Data, with its 
Alternate I when extended liability is desired and a fixed price 
incentive contract is contemplated.
    (3) Use the clause at 252.246-7001, Warranty of Data, with its 
Alternate II when extended liability is desired and a firm fixed price 
contract is contemplated.
    (4) Use the clause at 252.246-7002, Warranty of Construction 
(Germany), instead of the clause at FAR 52.246-21, Warranty of 
Construction, in solicitations and contracts for construction when a 
fixed-price contract will be awarded and contract performance will be in 
Germany.

[56 FR 36460, July 31, 1991, as amended at 62 FR 34128, June 24, 1997; 
64 FR 51077, Sept. 21, 1999; 71 FR 27647, May 12, 2006]

                         PART 247_TRANSPORTATION

Sec.

Sec. 247.001 Definitions.

                          Subpart 247.1_General


Sec. 247.104 Government rate tenders under section 10721 of the 
          Interstate Commerce Act.

Sec. 247.104-5 Citation of Government rate tenders.

Sec. 247.105 Transportation assistance.

Subpart 247.2_Contracts for Transportation or for Transportation-Related 
                                Services


Sec. 247.200 Scope of subpart.

Sec. 247.206 Preparation of solicitations and contracts.

Sec. 247.270 Stevedoring contracts.

Sec. 247.270-1 Scope of section.

Sec. 247.270-2 Definitions.

Sec. 247.270-3 Technical provisions.

Sec. 247.270-4 Evaluation of bids and proposals.

Sec. 247.270-5 Award of contract.

Sec. 247.270-6 Contract clauses.

Sec. 247.271 Contracts for the preparation of personal property for 
          shipment or storage.

Sec. 247.271-1 Scope of section.

Sec. 247.271-2 Policy.

Sec. 247.271-3 Procedures.

Sec. 247.271-4 Solicitation provisions, schedule formats, and contract 
          clauses.

            Subpart 247.3_Transportation in Supply Contracts


Sec. 247.301 General.

Sec. 247.301-70 Definition.

Sec. 247.301-71 Evaluation factor or subfactor.

Sec. 247.305 Solicitation provisions, contract clauses, and 
          transportation factors.

Sec. 247.305-10 Packing, marking, and consignment instructions.

Sec. 247.305-70 Returnable containers other than cylinders.

Sec. 247.370 Use of Standard Form 30 for consignment instructions.

Sec. 247.371 DD Form 1384, Transportation Control and Movement Document.

Sec. 247.372 DD Form 1653, Transportation Data for Solicitations.

Sec. 247.373 DD Form 1654, Evaluation of Transportation Cost Factors.

         Subpart 247.5_Ocean Transportation by U.S.-Flag Vessels


Sec. 247.570 Scope.

Sec. 247.571 Policy.

Sec. 247.572 Procedures.

Sec. 247.572-1 Ocean transportation incidental to a contract for 
          supplies, services, or construction.

Sec. 247.572-2 Direct purchase of ocean transportation services.

Sec. 247.573 Solicitation provision and contract clauses.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36466, July 31, 1991, unless otherwise noted.



Sec. 247.001  Definitions.

    For definitions of ``Civil Reserve Air Fleet'' and ``Voluntary 
Intermodal Sealift Agreement,'' see Joint Pub. 1-02, DoD Dictionary of 
Military and Associated Terms.

[65 FR 50144, Aug. 17, 2000]

[[Page 300]]

                          Subpart 247.1_General



Sec. 247.104  Government rate tenders under section 10721 of the 
          Interstate Commerce Act.



Sec. 247.104-5  Citation of Government rate tenders.

    (a) See DoD 4500.9-R, Defense Transportation Regulation, Part II, 
Chapter 206, for instructions on converting commercial bills of lading 
to Government bills of lading within CONUS.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.105  Transportation assistance.

    (b)(i) Transportation assistance includes all transportation 
factors, such as--
    (A) Rates and prices (for evaluation of bids or routing purposes);
    (B) Other transportation costs;
    (C) Transit agreements;
    (D) Time in transit;
    (E) Port handling charges; and
    (F) Port capabilities.
    (ii) Within CONUS, the Military Traffic Management Command (MTMC) is 
responsible for the performance of traffic management functions. These 
functions include the direction, control, and supervision of all 
functions incident to the acquisition and use of commercial freight and 
passenger transportation services.
    (iii) For assistance with international shipments--
    (A) Originating in CONUS, request assistance from the appropriate 
military activity; i.e., the Air Mobility Command (AMC), Military 
Sealift Command (MSC), MTMC, or the military service sponsoring the 
cargo;
    (B) For all modes of transportation originating overseas, request 
assistance from the overseas Theater Commander assigned responsibility 
for common-user, military-operated land transportation;
    (C) Of bulk petroleum via ocean tanker, request assistance, rates, 
or other costs from the MSC;
    (D) Of supplies between points outside CONUS, including Alaska and 
Hawaii, request assistance, rates, or other costs from the military 
service sponsoring the cargo. Direct the requests to:


Sec. Army: Deputy Chief of Staff for Logistics, ATTN: DALO-TSP, 
          Washington, DC 20310-0500

Sec. Navy: Naval Supply Systems Command, Code 4D, 5450 Carlisle Pike, PO 
          Box 2050, Mechanicsburg, PA 17055-0791

Sec. Air Force: Applicable Overseas Air Force Command:
    HQ PACAF/LGT, 25 East Street, Suite I-305, Hickam AFB, HI 96853-5427
    HQ USAFE/LGT, Unit 305, Box 105, APO AE 09094-0105
    HQ AFSPACECOM/LGT, 150 Vandenberg Street, Suite 1105, Peterson AFB, 
CO 80914-4540

Sec. Marine Corps: HQ, U.S. Marine Corps, Traffic Management Branch 
          (LFT1), 2 Navy Annex, Washington, DC 20380-1775

[56 FR 36466, July 31, 1991, as amended at 59 FR 27674, May 27, 1994; 65 
FR 50144, Aug. 17, 2000]

Subpart 247.2_Contracts for Transportation or for Transportation-Related 
                                Services



Sec. 247.200  Scope of subpart.

    This subpart does not apply to the operation of vessels owned by, or 
bareboat chartered by, the Government.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.206  Preparation of solicitations and contracts.

    (1) Consistent with FAR 15.304 and 215.304, consider using the 
following as evaluation factors or subfactors:
    (i) Record of claims involving loss or damage;
    (ii) Provider availability; and
    (iii) Commitment of transportation assets to readiness support 
(e.g., Civil Reserve Air Fleet and Voluntary Intermodal Sealift 
Agreement).
    (2) To the maximum extent practicable, structure contracts and 
agreements to allow for their use by DoD contractors.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.270  Stevedoring contracts.



Sec. 247.270-1  Scope of section.

    This section contains procedures unique to stevedoring. Other 
portions of the FAR and DFARS dealing with

[[Page 301]]

service contracting also apply to stevedoring contracts.

[56 FR 36466, July 31, 1991, as amended at 65 FR 50144, Aug. 17, 2000]



Sec. 247.270-2  Definitions.

    Commodity rate is--
    (1) The price quoted for handling a ton (weight or measurement) of a 
specified commodity; and
    (2) Computed by dividing the hourly stevedoring gang cost by the 
estimated number of tons of the specified commodity that can be handled 
in 1 hour.
    Gang cost is--
    (1) The total hourly wages paid to the workers in the gang, in 
accordance with the collective bargaining agreement between the maritime 
industry and the unions at a specific port; and
    (2) Payments for workmen's compensation, social security taxes, 
unemployment insurance, taxes, liability and property damage insurance, 
general and administrative expenses, and profit.
    Stevedoring is the--
    (1) Loading of cargo from an agreed point of rest on a pier or 
lighter and its storage aboard a vessel; or
    (2) Breaking out and discharging of cargo from any space in the 
vessel to an agreed point of rest dockside or in a lighter.

[56 FR 36466, July 31, 1991, as amended at 65 FR 50144, Aug. 17, 2000]



Sec. 247.270-3  Technical provisions.

    (a) Because conditions vary at different ports, and sometimes within 
the same port, it is not practical to develop standard technical 
provisions covering all phases of stevedoring operations.
    (b) When including rail car, truck, or intermodal equipment loading 
and unloading, or other dock and terminal work under a stevedoring 
contract, include these requirements as separate items of work.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.270-4  Evaluation of bids and proposals.

    As a minimum, require that offers include--
    (a) Tonnage or commodity rates that apply to the bulk of the cargo 
worked under normal conditions;
    (b) Labor-hour rates that apply to services not covered by commodity 
rates, or to work performed under hardship conditions; and
    (c) Rates for equipment rental.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.270-5  Award of contract.

    Make the award to the offeror submitting the offer most advantageous 
to the Government, considering cost or price and other factors specified 
in the solicitation. Evaluation will include, but is not limited to--
    (a) Total estimated cost of tonnage to be moved at commodity rates;
    (b) Estimated cost at labor-hour rates; and
    (c) Cost of equipment rental.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.270-6  Contract clauses.

    Use the following clauses in solicitations and contracts for 
stevedoring services as indicated:
    (a) 252.247-7000, Hardship Conditions, in all solicitations and 
contracts.
    (b) 252.247-7001, Price Adjustment, when using sealed bidding.
    (c) 252.247-7002, Revision of Prices, when using negotiation.
    (d) 252.247-7004, Indefinite Quantities--Fixed Charges, when the 
contract is an indefinite-quantity type and will provide for the payment 
of fixed charges.
    (e) 252.247-7005, Indefinite Quantities--No Fixed Charges, when the 
contract is an indefinite-quantity type and will not provide for the 
payment of fixed charges.
    (f) 252.247-7006, Removal of Contractor's Employees, in all 
solicitations and contracts.
    (g) 252.247-7007, Liability and Insurance, in all solicitations and 
contracts.

[65 FR 50144, Aug. 17, 2000]



Sec. 247.271  Contracts for the preparation of personal property for 
          shipment or storage.



Sec. 247.271-1  Scope of section.

    This section contains procedures unique to the preparation of 
personal property for shipment or storage, and for the performance of 
intra-area or intra-city movement. Other portions of

[[Page 302]]

the FAR and DFARS dealing with service contracting also apply to these 
services.

[56 FR 36466, July 31, 1991, as amended at 65 FR 50145, Aug. 17, 2000]



Sec. 247.271-2  Policy.

    (a) Annual contracts. Normally--
    (1) Use requirements contracts to acquire services for the--
    (i) Preparation of personal property for shipment or storage; and
    (ii) Performance of intra-area movement.
    (2) Award contracts on a calendar year basis.
    (3) Provide for option years.
    (4) Award contracts, or exercise option years, before November 1 of 
each year, if possible.
    (b) Areas of performance. Define clearly in the solicitation each 
area of performance.
    (1) Establish one or more areas; however, hold the number to a 
minimum consistent with local conditions.
    (2) Each schedule may provide for the same or different areas of 
performance. Determine the areas as follows--
    (i) Use political boundaries, streets, or any other features as 
lines of demarcation. Consider such matters as--
    (A) Total volume;
    (B) Size of overall area; and
    (C) The need to service isolated areas of high population density.
    (ii) Specifically identify frequently used terminals, and consider 
them as being included in each area of performance described in the 
solicitation.
    (c) Maximum requirements-minimum capability. The contracting officer 
must--
    (1) Establish realistic quantities on the Estimated Quantities 
Report in DoD 4500.9-R, Defense Transportation Regulation, Part IV;
    (2) Ensure that the Government's minimum acceptable daily 
capability--
    (i) Will at least equal the maximum authorized individual weight 
allowance as prescribed by the Joint Federal Travel Regulations; and
    (ii) Will encourage maximum participation of small business concerns 
as offerors.

[56 FR 36466, July 31, 1991, as amended at 65 FR 50145, Aug. 17, 2000]



Sec. 247.271-3  Procedures.

    (a) CONUS military activities assigned multi-service personal 
property areas of responsibility. (1) When two or more military 
installations or activities have personal property responsibilities in a 
given area, one activity must contract for the estimated requirements of 
all activities in the area. The installation commanders concerned must 
designate the activity by mutual agreement.
    (2) The Commander, Military Traffic Management Command (MTMC), must 
designate the contracting activity when local commanders are unable to 
reach agreement.
    (b) Additional services and excess requirements. (1) Excess 
requirements are those services that exceed contractor capabilities 
available under contracts. Use simplified acquisition procedures to 
satisfy excess requirements.
    (2) Additional services are those not specified in the bid items.
    (i) Additional services may include--
    (A) Hoisting or lowering of articles;
    (B) Waiting time;
    (C) Special packaging; and
    (D) Stuffing or unstuffing of sea van containers.
    (ii) Consider contracting for local moves that do not require 
drayage by using hourly rate or constructive weight methods. The rate 
will include those services necessary for completion of the movement, 
including--
    (A) Packing and unpacking;
    (B) Movement;
    (C) Inventorying; and
    (D) Removal of debris.
    (iii) Each personal property shipping activity must determine if 
local requirements exist for any additional services.
    (iv) The contracting officer may obtain additional services by--
    (A) Including them as items within the contract; provided, they are 
not used in the evaluation of bids (see 252.247-7008, Evaluation of 
Bids); or
    (B) Using simplified acquisition procedures.
    (v) Either predetermine prices for additional services with the 
contractor, or negotiate them on a case-by-case basis.
    (vi) The contracting officer must authorize the contractor to 
perform any

[[Page 303]]

additional services, other than attempted pick up or delivery, 
regardless of the contracting method.
    (vii) To the maximum extent possible, identify additional services 
required that are incidental to an order before placing the order; or, 
when applicable, during the premove survey.
    (c) Contract distribution. In addition to the distribution 
requirements of FAR subpart 4.2, furnish one copy of each contract as 
follows:
    (1) CONUS personal property shipping activities must send the copy 
to the Commander, Military Traffic Management Command, Attn: MTPP-CI, 
Room 408, 5611 Columbia Pike, Falls Church, VA 22041-5050.
    (2) In the European and Pacific areas, personal property shipping 
activities must send the copy to either the Property Directorate, MTMC 
Europe, or the MTMC Field Office-Pacific.
    (3) Other overseas personal property shipping activities must send 
the copy to the Commander, Military Traffic Management Command, Attn: 
MTPP-Q, 5611 Columbia Pike, Falls Church, VA 22041-5050.

[56 FR 36466, July 31, 1991, as amended at 64 FR 2598, Jan. 15, 1999; 65 
FR 50145, Aug. 17, 2000]



Sec. 247.271-4  Solicitation provisions, schedule formats, and contract 
          clauses.

    When acquiring services for the preparation of personal property for 
movement or storage, and for performance of intra-city or intra-area 
movement, use the following provisions, clauses, and schedules. Revise 
solicitation provisions and schedules, as appropriate, if using 
negotiation rather than sealed bidding. Overseas commands, except those 
in Alaska and Hawaii, may modify these clauses to conform to local 
practices, laws, and regulations.
    (a) The provision at 252.247-7008, Evaluation of Bids. When adding 
``additional services'' items to any schedule, use the basic clause with 
Alternate I.
    (b) The provision at 252.247-7009, Award.
    (c) In solicitations and resulting contracts, the schedules 
contained in DoD 4500.9-R, Defense Transportation Regulation, Part IV, 
as provided by the installation personal property shipping office.
    (1) When there is no requirement for an item or subitem in a 
schedule, indicate that item or subitem number, in its proper numerical 
sequence, and add the statement ``No Requirement.''
    (2) Within Schedules I (Outbound) and II (Inbound), item numbers are 
reserved to permit inclusion of additional items as required by local 
conditions.
    (3) Overseas activities, except those in Alaska and Hawaii, may 
modify the schedules when necessary to conform with local trade 
practices, laws, and regulations.
    (4) All generic terminology, schedule, and item numbers in proper 
sequence must follow those contained in the basic format.
    (5) When it is in the Government's best interest to have both 
outbound and inbound services within a given area of performance 
furnished by the same contractor, modify the schedule format to combine 
both services in a single schedule. However, items must follow the same 
sequential order as in the basic format.
    (6) Process any modification of schedule format, other than those 
authorized in paragraphs (c)(1) through (5) of this subsection, as a 
request for deviation to the Commander, MTMC.
    (d) The clause at 252.247-7010, Scope of Contract.
    (e) The clause at 252.247-7011, Period of Contract. When the period 
of performance is less than a calendar year, modify the clause to 
indicate the beginning and ending dates. However, the contract period 
must not end later than December 31 of the year in which the contract is 
awarded.
    (f) In addition to designating each ordering activity, as required 
by the clause at FAR 52.216-18, Ordering, identify by name or position 
title the individuals authorized to place orders for each activity. When 
provisions are made for placing oral orders in accordance with FAR 
16.505(a)(4), document the oral orders in accordance with department or 
agency instructions.
    (g) The clause at 252.247-7012, Ordering Limitation.
    (h) The clause at 252.247-7013, Contract Areas of Performance.

[[Page 304]]

    (i) The clause at 252.247-7014, Demurrage.
    (j) When using the clause at FAR 52.216-21, Requirements, see 
216.506(d), which prescribes an alternate to the clause.
    (k) The clause at 252.247-7016, Contractor Liability for Loss and 
Damage.
    (l) The clause at 252.247-7017, Erroneous Shipments.
    (m) The clause at 252.247-7018, Subcontracting.
    (n) The clause at 252.247-7019, Drayage.
    (o) The clause at 252.247-7020, Additional Services.
    (p) The clauses at FAR 52.247-8, Estimated Weight or Quantities Not 
Guaranteed, and FAR 52.247-13, Accessorial Services--Moving Contracts.

[56 FR 36466, July 31, 1991, as amended at 65 FR 50145, Aug. 17, 2000]

            Subpart 247.3_Transportation in Supply Contracts



Sec. 247.301  General.



Sec. 247.301-70  Definition.

    ``Integrated logistics managers'' or ``third-party logistics 
providers'' means providers of multiple logistics services. Some 
examples of logistics services are the management of transportation, 
demand forecasting, information management, inventory maintenance, 
warehousing, and distribution.

[65 FR 50145, Aug. 17, 2000]



Sec. 247.301-71  Evaluation factor or subfactor.

    For contracts that will include a significant requirement for 
transportation of items outside CONUS, include an evaluation factor or 
subfactor that favors suppliers, third-party logistics providers, and 
integrated logistics managers that commit to using carriers that 
participate in one of the readiness programs (e.g., Civil Reserve Air 
Force Fleet and Voluntary Intermodal Sealift Agreement).

[65 FR 50145, Aug. 17, 2000]



Sec. 247.305  Solicitation provisions, contract clauses, and 
          transportation factors.



Sec. 247.305-10  Packing, marking, and consignment instructions.

    (b) Consignment instructions must include, as a minimum--
    (i) The clear text and coded MILSTRIP data as follows:
    (A) Consignee code and clear text identification of consignee and 
destination as published in--
    (1) DoD 4000.25-6-M, Department of Defense Activity Address 
Directory (DODAAD);
    (2) DoD 4000.25-8-M, Military Assistance Program Address Directory 
(MAPAD) System; or
    (3) Transportation Control and Movement Document. Reporting 
procedures and instructions must comply with DoD 4500.9-R, Defense 
Transportation Regulation.
    (B) Project code, when applicable.
    (C) Transportation priority.
    (D) Required delivery date.
    (ii) Non-MILSTRIP shipments must include data similar to that 
described in paragraphs (b)(i)(A) through (D) of this subsection.
    (iii) In amended shipping instructions include, in addition to the 
data requirements of paragraphs (b)(i)(A) through (D) of this 
subsection, the following, when appropriate:
    (A) Name of the activity originally designated, from which the 
stated quantities are to be deducted.
    (B) Any other features of the amended instructions not contained in 
the basic contract.
    (iv) When assigning contract administration responsibility in 
accordance with FAR 42.202, include in instructions the--
    (A) Modification serial number; and
    (B) If a new line item is created by the issuance of shipping 
instructions--
    (1) New line item number; and
    (2) Existing line item number, if affected.
    (v) For petroleum, oil, and lubricant products, instructions for 
diversions need not include the modification serial number and new line 
item number, when the instructions are--
    (A) For diversions overseas to new destinations;

[[Page 305]]

    (B) Issued by an office other than that issuing the contract or 
delivery order; and
    (C) Issued by telephone or electronic media.

[65 FR 50145, Aug. 17, 2000, as amended at 67 FR 61517, Oct. 1, 2002]



Sec. 247.305-70  Returnable containers other than cylinders.

    Use the clause at 252.247-7021, Returnable Containers Other Than 
Cylinders, in solicitations and contracts for supplies involving 
contractor-furnished returnable reels, spools, drums, carboys, liquid 
petroleum gas containers, or other returnable containers if the 
contractor is to retain title to the containers.

[60 FR 29501, June 5, 1995]



Sec. 247.370  Use of Standard Form 30 for consignment instructions.

    When complete consignment instructions are not known initially, use 
the Standard Form (SF) 30, Amendment of Solicitation/Modification of 
Contract, to issue or amend consignment instructions, and when 
necessary, to confirm consignment instructions issued by telephone or 
electronic media.
    (a) When using the SF 30 to confirm delivery instructions--
    (1) Stamp or mark ``CONFIRMATION'' in block letters on the form, and 
specify in detail those instructions being confirmed.
    (2) Do not change the instructions being confirmed.
    (b) Process the confirming SF 30 as follows--
    (1) For contracts assigned for any contract administration function 
listed in FAR subpart 42.3 to any office listed in the Federal Directory 
of Contract Administration Services Components, within five working 
days;
    (2) For diversions of petroleum, oil, and lubricant products 
overseas to new destinations, within 30 days of instructions being 
confirmed; and
    (3) For other contracts--
    (i) Telephone--within 5 working days; and
    (ii) Electronic media--consolidate on a monthly basis.

[56 FR 36466, July 31, 1991, as amended at 64 FR 61030, Nov. 9, 1999; 65 
FR 50146, Aug. 17, 2000]



Sec. 247.371  DD Form 1384, Transportation Control and Movement 
          Document.

    Reporting procedures and instructions for this form will be in 
compliance with DoD 4500.9-R, Defense Transportation Regulation.

[56 FR 36466, July 31, 1991, as amended at 67 FR 61517, Oct. 1, 2002]



Sec. 247.372  DD Form 1653, Transportation Data for Solicitations.

    (a) The transportation specialist prepares the DD Form 1653 at the 
request of the contracting officer. The completed form will contain 
recommendations concerning f.o.b. terms best suited for a particular 
acquisition, and other suggested transportation provisions for inclusion 
in the solicitation.
    (b) When appropriate, the DD Form 1653 will also include information 
on combined port handling and transportation charges for inclusion in 
the solicitation in connection with export shipments.



Sec. 247.373  DD Form 1654, Evaluation of Transportation Cost Factors.

    Contracting personnel may use the DD Form 1654 to furnish 
information to the transportation office for development of cost factors 
for use by the contracting officer in the evaluation of f.o.b. origin 
offers.

         Subpart 247.5_Ocean Transportation by U.S.-Flag Vessels



Sec. 247.570  Scope.

    This subpart--
    (a) Implements the Cargo Preference Act of 1904 (``the 1904 Act''), 
10 U.S.C. 2631, which applies to the ocean transportation of cargo owned 
by, or destined for use by, DoD;
    (b) Does not specifically implement the Cargo Preference Act of 1954 
(``the 1954 Act''), 46 U.S.C. 1241(b). The 1954 Act is applicable to 
DoD, but DFARS coverage is not required because compliance with the 1904 
Act historically

[[Page 306]]

has resulted in DoD exceeding the 1954 Act's requirements; and
    (c) Does not apply to ocean transportation of the following 
products, in which case FAR subpart 47.5 applies:
    (1) Products obtained for contributions to foreign assistance 
programs.
    (2) Products owned by agencies other than DoD, unless the products 
are clearly identifiable for eventual use by DoD.

[65 FR 50146, Aug. 17, 2000]



Sec. 247.571  Policy.

    (a) DoD contractors must transport supplies, as defined in the 
clause at 252.247-7023, Transportation of Supplies by Sea, exclusively 
on U.S.-flag vessels unless--
    (1) Those vessels are not available, and the procedures at 247.572-
1(c)(1) or 247.572-2(d)(1) are followed;
    (2) The proposed charges to the Government are higher than charges 
to private persons for the transportation of like goods, and the 
procedures at 247.572-1(c)(2) or 247.572-2(d)(2) are followed; or
    (3) The Secretary of the Navy or the Secretary of the Army 
determines that the proposed freight charges are excessive or 
unreasonable in accordance with 247.572-1(c)(3) or 247.572-2(d)(3).
    (b) Contracts must provide for the use of Government-owned vessels 
when security classifications prohibit the use of other than Government-
owned vessels.
    (c)(1) Any vessel used under a time charter contract for the 
transportation of supplies under this section shall have any reflagging 
or repair work, as defined in the clause at 252.247-7025, Reflagging or 
Repair Work, performed in the United States or its outlying areas, if 
the reflagging or repair work is performed--
    (i) On a vessel for which the contractor submitted an offer in 
response to the solicitation for the contract; and
    (ii) Prior to the acceptance of the vessel by the Government.
    (2) The Secretary of Defense may waive this requirement if the 
Secretary determines that such waiver is critical to the national 
security of the United States.

[65 FR 50146, Aug. 17, 2000, as amended at 70 FR 35545, June 21, 2005]



Sec. 247.572-1  Ocean transportation incidental to a contract for 
          supplies, services, or construction.

    (a) This subsection applies when ocean transportation is not the 
principal purpose of the contract, and the cargo to be transported is 
owned by DoD or is clearly identifiable for eventual use by DoD.
    (b) The contracting officer must obtain assistance from the 
congnizant transportation activity (see 247.105) in developing--
    (1) The Government estimate for transportation costs, irrespective 
of whether freight will be paid directly by the Government; and
    (2) Shipping instructions and delivery terms for inclusion in 
solicitations and contracts that may involve transportation of supplies 
by sea.
    (c) If the contractor notifies the contracting officer that the 
contractor or a subcontractor considers that--
    (1) No U.S.-flag vessels are available, the contracting officer must 
request confirmation of the nonavailability from--
    (i) The Commander, Military Sealift Command (MSC), through the 
Contracts and Business Management Directorate, MSC; or
    (ii) The Commander, Military Traffic Management Command (MTMC), 
through the Principal Assistant Responsible for Contracting, MTMC.
    (2) The proposed freight charges to the Government, the contractor, 
or any subcontractor are higher than charges for transportation of like 
goods to private persons, the contracting officer may approve a request 
for an exception to the requirement to ship on U.S.-flag vessels for a 
particular shipment.
    (i) Prior to granting an exception, the contracting officer must 
request advice, oral or written, from the Commander, MSC, or the 
Commander, MTMC.
    (ii) In advising the contracting officer whether to grant the 
exception, the Commander, MSC, or the Commander,

[[Page 307]]

MTMC, must consider, as appropriate, evidence from--
    (A) Published tariffs;
    (B) Industry publications;
    (C) The Maritime Administration; and
    (D) Any other available sources.
    (3) The freight charges proposed by U.S.-flag carriers are excessive 
or otherwise unreasonable--
    (i) The contracting officer must prepare a report in determination 
and finding format, and must--
    (A) Take into consideration that the 1904 Act is, in part, a subsidy 
of the U.S.-flag commercial shipping industry that recognizes that lower 
prices may be available from foreign-flag carriers. Therefore, a lower 
price for use of a foreign-flag vessel is not a sufficient basis, on its 
own, to determine that the freight rate proposed by the U.S.-flag 
carrier is excessive or otherwise unreasonable. However, such a price 
differential may indicate a need for further review;
    (B) Consider, accordingly, not only excessive profits to the carrier 
(to include vessel owner or operator), if ascertainable, but also 
excessive costs to the Government (i.e., costs beyond the economic 
penalty normally incurred by excluding foreign competition) resulting 
from the use of U.S.-flag vessels in extraordinarily inefficient 
circumstances; and
    (C) Include an analysis of whether the cost is excessive, taking 
into account factors such as--
    (1) The differential between the freight charges proposed by the 
U.S.-flag carrier and an estimate of what foreign-flag carriers would 
charge based upon a price analysis;
    (2) A comparison of U.S.-flag rates charged on comparable routes;
    (3) Efficiency of operation regardless of rate differential (e.g., 
suitability of the vessel for the required transportation in terms of 
cargo requirements or vessel capacity, and the commercial reasonableness 
of vessel positioning required); and
    (4) Any other relevant economic and financial considerations.
    (ii) The contracting officer must forward the report to--
    (A) The Commander, MSC, through the Contracts and Business 
Management Directorate, MSC; or
    (B) The Commander, MTMC, through the Principal Assistant Responsible 
for Contracting, MTMC.
    (iii) If in agreement with the contracting officer, the Commander, 
MSC, or the Commander, MTMC, will forward the report to the Secretary of 
the Navy or the Secretary of the Army, respectively, for a determination 
as to whether the proposed freight charges are excessive or otherwise 
unreasonable.

[65 FR 50146, Aug. 17, 2000, as amended at 67 FR 38021, May 31, 2002]



Sec. 247.572-2  Direct purchase of ocean transportation services.

    (a) This subsection applies when ocean transportation is the 
principal purpose of the contract, including--
    (1) Time charters;
    (2) Voyage charters;
    (3) Contracts for charter vessel services;
    (4) Dedicated contractor contracts for charter vessel services;
    (5) Ocean bills of lading; and
    (6) Subcontracts under Government contracts or agreements for ocean 
transportation services.
    (b) Coordinate these acquisitions, as appropriate, with the U.S. 
Transportation Command, the DoD single manager for commercial 
transportation and related services, other than Service-unique or 
theater-assigned transportation assets, in accordance with DoD 5158.4, 
United States Transportation Command.
    (c) All solicitations within the scope of this subsection must 
provide--
    (1) A preference for U.S.-flag vessels in accordance with the 1904 
Act; and
    (2) An evaluation factor or subfactor for offeror participation in 
the Voluntary Intermodal Sealift Agreement.
    (d) Do not award a contract of the type described in paragraph (a) 
of this subsection for a foreign-flag vessel unless--
    (1) The Commander, MSC, or the Commander, MTMC, determines that no 
U.S.-flag vessels are available.
    (i) The Commander, MSC, and the Commander, MTMC, are authorized to 
make any determinations as to the

[[Page 308]]

availability of U.S.-flag vessels to ensure the proper use of Government 
and private U.S. vessels.
    (ii) The contracting officer must request such determinations--
    (A) For voyage and time charters, through the Contracts and Business 
Management Directorate, MSC; and
    (B) For ocean and intermodal transportation of DoD and DoD-sponsored 
cargoes, as applicable under contracts awarded by MTMC, including 
contracts for shipment of military household goods, through the Chiefs 
of the MTMC Ocean Cargo Clearance Authority.
    (iii) In the absence of regularly scheduled U.S.-flag service to 
fulfill stated DoD requirements under MTMC solicitations or rate 
requests, the Commander, MTMC, may grant, on a case-by-case basis, an 
on-going nonavailability determination for foreign-flag service approval 
with pre-determined review date(s);
    (2) The contracting officer determines that the U.S.-flag carrier 
has proposed to the Government freight charges that are higher than 
charges to private persons for transportation of like goods, and obtains 
the approval of the Commander, MSC, or the Commander, MTMC; or
    (3) The Secretary of the Navy or the Secretary of the Army 
determines that the proposed freight charges for U.S.-flag vessels are 
excessive or otherwise unreasonable.
    (i) After considering the factors in 247.572-1(d)(3)(i)(A) and (B), 
if the contracting officer concludes that the freight charges proposed 
by U.S.-flag carriers may be excessive or otherwise unreasonable, the 
contracting officer must prepare a report in determination and finding 
format that includes, as appropriate--
    (A) An analysis of the carrier's costs in accordance with FAR 
Subpart 15.4, or profit in accordance with 215.404-4. The costs or 
profit should not be so high as to make it unreasonable to apply the 
preference for U.S.-flag vessels;
    (B) A description of efforts taken pursuant to FAR 15.405, to 
negotiate a reasonable price. For the purpose of FAR 15.405(d), this 
report is the referral to a level above the contracting officer; and
    (C) An analysis of whether the costs are excessive (i.e., costs 
beyond the economic penalty normally incurred by excluding foreign 
competition), taking into consideration factors such as those listed at 
247.572-1(d)(3)(i)(C).
    (ii) The contracting officer must forward the report to--
    (A) The commander, MSC, through the Contracts and Business 
Management Directorate, MSC; or
    (B) The Commander, MTMC, through the Principal Assistant Responsible 
for Contracting, MTMC.
    (iii) If an agreement with the contracting officer, the Commander, 
MSC, or the Commander, MTMC, will forward the report to the Secretary of 
the Navy or the Secretary of the Army, respectively, for a determination 
as to whether the proposed freight charges are excessive or otherwise 
unreasonable.

[65 FR 50147, Aug. 17, 2000]



Sec. 247.573  Solicitation provision and contract clauses.

    (a) Use the provision at 252.247-7022, Representation of Extent of 
Transportation by Sea, in all solicitations except--
    (1) Those for direct purchase of ocean transportation services; or
    (2) Those with an anticipated value at or below the simplified 
acquisition threshold.
    (b)(1) Use the clause at 252.247-7023, Transportation of Supplies by 
Sea, in all solicitations and resultant contracts, except those for 
direct purchase of ocean transportation services.
    (2) Use the clause with its Alternate I in other than construction 
contracts, if any of the supplies to be transported are commercial items 
that are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations.
    (3) Use the clause with its Alternate II in other than construction 
contracts, if any of the supplies to be transported are commercial items 
that are commissary or exchange cargoes transported outside of the 
Defense Transportation System in accordance with 10 U.S.C. 2643.
    (4) Use the clause with its Alternate III in solicitations and 
contracts with

[[Page 309]]

an anticipated value at or below the simplified acquisition threshold.
    (c) Use the clause at 252.247-7024, Notification of Transportation 
of Supplies by Sea, in all contracts for which the offeror made a 
negative response to the inquiry in the provision at 252.247-7022, 
Representation of Extent of Transportation by Sea.
    (d) Use the clause at 252.247-7025, Reflagging or Repair Work, in 
all time charter solicitations and contracts for the use of a vessel for 
the transportation of supplies, unless a waiver has been granted in 
accordance with 247.571(c).

[56 FR 36466, July 31, 1991, as amended at 59 FR 10580, Mar. 7, 1994; 60 
FR 29501, June 5, 1995; 64 FR 2598, Jan. 15, 1999; 65 FR 14401. Mar. 16, 
2000; 67 FR 38021, May 31, 2002]

                    PART 249_TERMINATION OF CONTRACTS

                    Subpart 249.1_General Principles

Sec.

Sec. 249.105 Duties of termination contracting officer after issuance of 
          notice of termination.

Sec. 249.105-1 Termination status reports.

Sec. 249.105-2 Release of excess funds.

Sec. 249.109 Settlement agreements.

Sec. 249.109-7 Settlement by determination.

Sec. 249.110 Settlement negotiation memorandum.

               Subpart 249.5_Contract Termination Clauses


Sec. 249.501 General.

Sec. 249.501-70 Special termination costs.

             Subpart 249.70_Special Termination Requirements


Sec. 249.7000 Terminated contracts with Canadian Commercial Corporation.

Sec. 249.7001 Congressional notification on significant contract 
          terminations.

Sec. 249.7002 [Reserved]

Sec. 249.7003 Notification of anticipated contract terminations or 
          reductions.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36471, July 31, 1991, unless otherwise noted.

                    Subpart 249.1_General Principles



Sec. 249.105  Duties of termination contracting officer after issuance 
          of notice of termination.



Sec. 249.105-1  Termination status reports.

    Follow the procedures at PGI 249.105-1 for reporting status of 
termination actions.

[71 FR 27645, May 12, 2006]



Sec. 249.105-2  Release of excess funds.

    See PGI 249.105-2 for guidance on recommending the release of excess 
funds.

[71 FR 27645, May 12, 2006]



Sec. 249.109  Settlement agreements.



Sec. 249.109-7  Settlement by determination.

    Follow the procedures at PGI 249.109-7 for settlement of a 
convenience termination by determination.

[71 FR 27645, May 12, 2006]



Sec. 249.110  Settlement negotiation memorandum.

    Follow the procedures at PGI 249.110 for preparation of a settlement 
negotiation memorandum.

[71 FR 27645, May 12, 2006]

               Subpart 249.5_Contract Termination Clauses



Sec. 249.501  General.



Sec. 249.501-70  Special termination costs.

    (a) The clause at 252.249-7000, Special Termination Costs, may be 
used in an incrementally funded contract when its use is approved by the 
agency head.
    (b) The clause is authorized when--
    (1) The contract term is 2 years or more;
    (2) The contract is estimated to require--
    (i) Total RDT&E financing in excess of $25 million; or
    (ii) Total production investment in excess of $100 million; and
    (3) Adequate funds are available to cover the contingent reserve 
liability for special termination costs.
    (c) The contractor and the contracting officer must agree upon an

[[Page 310]]

amount that represents their best estimate of the total special 
termination costs to which the contractor would be entitled in the event 
of termination of the contract. Insert this amount in paragraph (c) of 
the clause.
    (d)(1) Consider substituting an alternate paragraph (c) for 
paragraph (c) of the basic clause when--
    (i) The contract covers an unusually long performance period; or
    (ii) The contractor's cost risk associated with contingent special 
termination costs is expected to fluctuate extensively over the period 
of the contract.
    (2) The alternate paragraph (c) should provide for periodic 
negotiation and adjustment of the amount reserved for special 
termination costs. Occasions for periodic adjustment may include--
    (i) The Government's incremental assignment of funds to the 
contract;
    (ii) The time when certain performance milestones are accomplished 
by the contractor; or
    (iii) Other specific time periods agreed upon by the contracting 
officer and the contractor.

             Subpart 249.70_Special Termination Requirements



Sec. 249.7000  Terminated contracts with Canadian Commercial 
          Corporation.

    (a) Terminate contracts with the Canadian Commercial Corporation in 
accordance with--
    (1) The Letter of Agreement (LOA) between the Department of Defence 
Production (Canada) and the U.S. DoD, ``Canadian Agreement'' (for a copy 
of the LOA or for questions on its currency, contact the Office of the 
Director of Defense Procurement and Acquisition Policy (Program 
Acquisition and International Contracting), (703) 697-9351, DSN 227-
9351);
    (2) Policies in the Canadian Agreement and part 249; and
    (3) The Canadian Supply Manual, Chapter 11, Section 11.146, 
available at http://www.pwgsc.gc.ca/acquisitions/text/sm/sm-e.html.
    (b) Contracting officers shall ensure that the Canadian Commercial 
Corporation submits termination settlement proposals in the format 
prescribed in FAR 49.602 and that they contain the amount of settlements 
with subcontractors. The termination contracting officer (TCO) shall 
prepare an appropriate settlement agreement. (See FAR 49.603.) The 
letter transmitting a settlement proposal must certify--
    (1) That disposition of inventory has been completed; and
    (2) That the Contract Claims Resolution Board of the Public Works 
and Government Services Canada has approved settlements with Canadian 
subcontractors when the Procedures Manual on Termination of Contracts 
requires such approval.
    (c)(1) The Canadian Commercial Corporation will--
    (i) Settle all Canadian subcontractor termination claims under the 
Canadian Agreement; and
    (ii) Submit schedules listing serviceable and usable contractor 
inventory for screening to the TCO (see FAR 45.6).
    (2) After screening, the TCO must provide guidance to the Canadian 
Commercial Corporation for disposition of the contractor inventory.
    (3) Settlement of Canadian subcontractor claims are not subject to 
the approval and ratification of the TCO. However, when the proposed 
negotiated settlement exceeds the total contract price of the prime 
contract, the TCO shall obtain from the U.S. contracting officer prior 
to final settlement--
    (i) Ratification of the proposed settlement; and
    (ii) A contract modification increasing the contract price and 
obligating the additional funds.
    (d) The Canadian Commercial Corporation should send all termination 
settlement proposals submitted by U.S. subcontractors and suppliers to 
the TCO of the cognizant contract administration office of the Defense 
Contract Management Agency for settlement. The TCO will inform the 
Canadian Commercial Corporation of the amount of the net settlement of 
U.S. subcontractors and suppliers so that this amount can be included in 
the Canadian Commercial Corporation termination proposal. The Canadian 
Commercial Corporation is responsible for

[[Page 311]]

execution of the settlement agreement with these subcontractors.
    (e) The Canadian Commercial Corporation will continue administering 
contracts that the U.S. contracting officer terminates.
    (f) The Canadian Commercial Corporation will settle all Canadian 
subcontracts in accordance with the policies, practices, and procedures 
of the Canadian Government.
    (g) The U.S. agency administering the contract with the Canadian 
Commercial Corporation shall provide any services required by the 
Canadian Commercial Corporation, including disposal of inventory, for 
settlement of any subcontracts placed in the United States. Settlement 
of such U.S. subcontracts will be in accordance with this regulation.

[56 FR 36471, July 31, 1991, as amended at 65 FR 39706, June 27, 2000; 
68 FR 7440, Feb. 14, 2003; 71 FR 27645, May 12, 2006]



Sec. 249.7001  Congressional notification on significant contract 
          terminations.

    Congressional notification is required for any termination involving 
a reduction in employment of 100 or more contractor employees. Proposed 
terminations must be cleared through department/agency liaison offices 
before release of the termination notice, or any information on the 
proposed termination, to the contractor. Follow the procedures at PGI 
249.7001 for congressional notification and release of information.

[71 FR 27645, May 12, 2006]



Sec. 249.7002  [Reserved]



Sec. 249.7003  Notification of anticipated contract terminations or 
          reductions.

    (a) Section 1372 of the National Defense Authorization Act for 
Fiscal Year 1994 (Pub. L. 103-160) and Section 824 of the National 
Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201) are 
intended to help establish benefit eligibility under the Job Training 
Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD 
contractors and subcontractors adversely affected by termination or 
substantial reductions in major defense programs.
    (b) Departments and agencies are responsible for establishing 
procedures to:
    (1) Identify which contracts (if any) under major defense programs 
will be terminated or substantially reduced as a result of the funding 
levels provided in an appropriations act.
    (2) Within 60 days of the enactment of such an act, provide notice 
of the anticipated termination of or substantial reduction in the 
funding of affected contracts--
    (i) Directly to the Secretary of Labor; and
    (ii) Through the contracting officer to each prime contractor.
    (c) Use the clause at 252.249-7002, Notification of Anticipated 
Contract Termination or Reduction, in all contracts under a major 
defense program.

[61 FR 64637, Dec. 6, 1996; 61 FR 66077, Dec. 16, 1996; 62 FR 49304, 
Sept. 19, 1997]

               PART 250_EXTRAORDINARY CONTRACTUAL ACTIONS

Sec.

Sec. 250.001 Definitions.

                          Subpart 250.1_General


Sec. 250.102-70 Limitations on payment.

Sec. 250.105 Records.

  Subpart 250.2_Delegation of and Limitations on Exercise of Authority


Sec. 250.201 Delegation of authority.

Sec. 250.201-70 Delegations.

Sec. 250.202 Contract adjustment boards.

                   Subpart 250.3_Contract Adjustments


Sec. 250.303-1 Contractor requests.

Sec. 250.305 Processing cases.

Sec. 250.306 Disposition.

                      Subpart 250.4_Residual Powers


Sec. 250.403 Special procedures for unusually hazardous or nuclear 
          risks.

Sec. 250.403-70 Indemnification under contracts involving both research 
          and development and other work.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36475, July 31, 1991, unless otherwise noted.



Sec. 250.001  Definitions.

    As used in this part,

[[Page 312]]

    Secretarial level means--
    (1) An official at or above the level of an Assistant Secretary (or 
Deputy) of Defense or of the Army, Navy, or Air Force; and
    (2) A contract adjustment board established by the Secretary 
concerned.

                          Subpart 250.1_General



Sec. 250.102-70  Limitations on payment.

    See 10 U.S.C. 2410(b) for limitations on Congressionally directed 
payment of a request for equitable adjustment to contract terms or a 
request for relief under Pub. L. 85-804.

[63 FR 11541, Mar. 9, 1998, as amended at 68 FR 15380, Mar. 31, 2003]



Sec. 250.105  Records.

    Follow the procedures at PGI 250.105 for preparation of records.

[70 FR 67923, Nov. 9, 2005]

  Subpart 250.2_Delegation of and Limitations on Exercise of Authority



Sec. 250.201  Delegation of authority.

    (b) Authority under FAR subpart 50.4 to approve actions obligating 
$50,000 or less may not be delegated below the level of the head of the 
contracting activity.
    (d) In accordance with the acquisition authority of the Under 
Secretary of Defense (Acquisition, Technology, and Logistics (USD 
(AT&L)) under 10 U.S.C. 133, in addition to the Secretary of Defense and 
the Secretaries of the military departments, the USD (AT&L) may exercise 
authority to indemnify against unusually hazardous or nuclear risks.

[65 FR 77836, Dec. 13, 2000]



Sec. 250.201-70  Delegations.

    (a) Military Departments. The Departments of the Army, Navy, and Air 
Force will specify delegations and levels of authority for actions under 
the Act and the Executive Order in departmental supplements or agency 
acquisition guidance.
    (b) Defense Agencies. Subject to the restrictions on delegations of 
authority in 250.201(b) and FAR 50.201, the directors of the defense 
agencies may exercise and redelegate the authority contained in the Act 
and the Executive Order. The agency supplements or agency acquisition 
guidance shall specify the delegations and levels of authority.
    (1) Requests to obligate the Government in excess of $50,000 must be 
submitted to the USD (AT&L) for approval.
    (2) Requests for indemnification against unusually hazardous or 
nuclear risks must be submitted to the USD(AT&L) for approval before 
using the indemnification clause at FAR 52.250-1, Indemnification Under 
Public Law 85-804.
    (c) Approvals. The Secretary of the military department or the 
agency director must approve any delegations in writing.

[56 FR 36475, July 31, 1991, as amended at 56 FR 67221, Dec. 30, 1991; 
60 FR 61600, Nov. 30, 1995; 65 FR 39706, June 27, 2000; 65 FR 77836, 
Dec. 13, 2000; 70 FR 67923, Nov. 9, 2005]



Sec. 250.202  Contract adjustment boards.

    The Departments of the Army, Navy, and Air Force each have a 
contract adjustment board. The board consists of a Chair and not less 
than two nor more than six other members, one of whom may be designated 
the Vice-Chair. A majority constitutes a quorum for any purpose and the 
concurring vote of a majority of the total board membership constitutes 
an action of the board. Alternates may be appointed to act in the 
absence of any member.

                   Subpart 250.3_Contract Adjustments

    Source: 70 FR 67923, Nov. 9, 2005, unless otherwise noted.



Sec. 250.303-1  Contractor requests.

    Requests should be filed with the procuring contracting officer 
(PCO). However, if filing with the PCO is impractical, requests may be 
filed with an authorized representative, an administrative contracting 
officer, or the Office of General Counsel of the applicable department 
or agency, for forwarding to the cognizant PCO.

[[Page 313]]



Sec. 250.305  Processing cases.

    (1) At the time the request is filed, the activity shall prepare the 
record described at PGI 250.105(1)(i) and forward it to the appropriate 
official within 30 days after the close of the month in which the record 
is prepared.
    (2) The officer or official responsible for the case shall forward 
to the contract adjustment board, through departmental channels, the 
documentation described at PGI 250.305.
    (3) Contract adjustment boards will render decisions as 
expeditiously as practicable. The Chair shall sign a memorandum of 
decision disposing of the case. The decision shall be dated and shall 
contain the information required by FAR 50.306. The memorandum of 
decision shall not contain any information classified ``Confidential'' 
or higher. The board's decision will be sent to the appropriate official 
for implementation.



Sec. 250.306  Disposition.

    For requests denied or approved below the Secretarial level, follow 
the disposition procedures at PGI 250.306.

                      Subpart 250.4_Residual Powers



Sec. 250.403  Special procedures for unusually hazardous or nuclear 
          risks.



Sec. 250.403-70  Indemnification under contracts involving both research 
          and development and other work.

    When indemnification is to be provided on contracts requiring both 
research and development work and other work, the contracting officer 
shall insert an appropriate clause using the authority of both 10 U.S.C. 
2354 and Public Law 85-804.
    (a) The use of Public Law 85-804 is limited to work which cannot be 
indemnified under 10 U.S.C. 2354 and is subject to compliance with FAR 
subpart 50.4.
    (b) Indemnification under 10 U.S.C. 2354 is covered by 235.070.

            PART 251_USE OF GOVERNMENT SOURCES BY CONTRACTORS

        Subpart 251.1_Contractor Use of Government Supply Sources

Sec.

Sec. 251.102 Authorization to use Government supply sources.

Sec. 251.107 Contract clause.

  Subpart 251.2_Contractor Use of Interagency Fleet Management System 
                             (IFMS) Vehicles


Sec. 251.202 Authorization.

Sec. 251.205 Contract clause.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36479, July 31, 1991, unless otherwise noted.

        Subpart 251.1_Contractor Use of Government Supply Sources



Sec. 251.102  Authorization to use Government supply sources.

    (e) When authorizing contractor use of Government supply sources, 
follow the procedures at PGI 251.102.
    (3)(ii) The contracting officer may also authorize the contractor to 
use the DD Form 1155 when requisitioning from the Department of Veterans 
Affairs.
    (f) The authorizing agency is also responsible for promptly 
considering requests of the DoD supply source for authority to refuse to 
honor requisitions from a contractor that is indebted to DoD and has 
failed to pay proper invoices in a timely manner.

[69 FR 67858, Nov. 22, 2004]



Sec. 251.107  Contract clause.

    Use the clause at 252.251-7000, Ordering From Government Supply 
Sources, in solicitations and contracts which include the clause at FAR 
52.251-1, Government Supply Sources.

  Subpart 251.2_Contractor Use of Interagency Fleet Management System 
                             (IFMS) Vehicles



Sec. 251.202  Authorization.

    (a)(2)(A) See FAR 28.307-2(c) for policy on contractor insurance.

[[Page 314]]

    (B) See FAR 28.308 for policy on self-insurance.
    (C) See FAR 31.205-19 for allowability of insurance costs.
    (5) Paragraph (d) of the clause at 252.251-7001 satisfies the 
requirement of FAR 51.202(a)(5) for a written statement.



Sec. 251.205  Contract clause.

    Use the clause at 252.251-7001, Use of Interagency Fleet Management 
System (IFMS)Vehicles and Related Services, in solicitations and 
contracts which include the clause at FAR 52.251-2, Interagency Fleet 
Management System (IFMS) Vehicles and Related Services.

[[Page 315]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 252_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

       Subpart 252.1_Instructions for Using Provisions and Clauses

Sec.

Sec. 252.101 Using part 252.

              Subpart 252.2_Text of Provisions and Clauses


Sec. 252.201-7000 Contracting officer's representative.

Sec. 252.203-7000 [Reserved]

Sec. 252.203-7001 Prohibition on persons convicted of fraud or other 
          defense-contract-related felonies.

Sec. 252.203-7002 Display of DoD hotline poster.

Sec. 252.204-7000 Disclosure of Information.

Sec. 252.204-7001 Commercial and Government Entity (CAGE) code 
          reporting.

Sec. 252.204-7002 Payment for subline items not separately priced.

Sec. 252.204-7003 Control of government personnel work product.

Sec. 252.204-7004 Alternate A.

Sec. 252.204-7005 Oral attestation of security responsibilities.

Sec. 252.204-7006 Billing instructions.

Sec. 252.205-7000 Provision of information to cooperative agreement 
          holders.

Sec. 252.206-7000 Domestic source restriction.

Sec. 252.208-7000 Intent to furnish precious metals as Government-
          furnished material.

Sec. 252.209-7000 [Reserved]

Sec. 252.209-7001 Disclosure of ownership or control by the government 
          of a terrorist country.

Sec. 252.209-7002 Disclosure of ownership or control by a foreign 
          government.

Sec. 252.209-7003 [Reserved]

Sec. 252.209-7004 Subcontracting with firms that are owned or controlled 
          by the government of a terrorist country.

Sec. 252.209-7005 Reserve Officer Training Corps and military recruiting 
          on campus.

Sec. 252.211-7000 Acquisition streamlining.

Sec. 252.211-7001 Availability of Specifications, Standards, and Data 
          Item Descriptions Not Listed in the Acquisition Streamlining 

          and Standardization Information System (ASSIST), and Plans, 
          Drawings, and Other Pertinent Documents.

Sec. 252.211-7002 Availability for examination of specifications, 
          standards, plans, drawings, data item descriptions, and other 
          pertinent documents.

Sec. 252.211-7003 Item identification and valuation.

Sec. 252.211-7004 Alternate preservation, packaging, and packing.

Sec. 252.211-7005 Substitutions for military or Federal specifications 
          and standards.

Sec. 252.211-7006 Radio Frequency Identification.

Sec. 252.212-7000 Offeror representations and certifications--Commercial 
          items.

Sec. 252.212-7001 Contract terms and conditions required to implement 
          statutes or Executive Orders applicable to Defense 
          acquisitions of commercial items.

Sec. 252.215-7000 Pricing adjustments.

Sec. 252.215-7001 [Reserved]

Sec. 252.215-7002 Cost estimating system requirements.

Sec. 252.216-7000 Economic price adjustment--basic steel, aluminum, 
          brass, bronze, or copper mill products.

Sec. 252.216-7001 Economic price adjustment--nonstandard steel items.

Sec. 252.216-7002 [Reserved]

Sec. 252.216-7003 Economic price adjustment--wage rates or material 
          prices controlled by a foreign government.

Sec. 252.217-7000 Exercise of option to fulfill foreign military sales 
          commitments.

Sec. 252.217-7001 Surge option.

Sec. 252.217-7002 Offering property for exchange.

Sec. 252.217-7003 Changes.

Sec. 252.217-7004 Job orders and compensation.

Sec. 252.217-7005 Inspection and manner of doing work.

Sec. 252.217-7006 Title.

Sec. 252.217-7007 Payments.

Sec. 252.217-7008 Bonds.

Sec. 252.217-7009 Default.

Sec. 252.217-7010 Performance.

Sec. 252.217-7011 Access to vessel.

Sec. 252.217-7012 Liability and insurance.

Sec. 252.217-7013 Guarantees.

Sec. 252.217-7014 Discharge of liens.

Sec. 252.217-7015 Safety and health.

Sec. 252.217-7016 Plant protection.

Sec. 252.217-7017--252.217-7025 [Reserved]

Sec. 252.217-7026 Identification of sources of supply.

Sec. 252.217-7027 Contract definitization.

Sec. 252.217-7028 Over and above work.

Sec. 252.219-7000--252.219-7002 [Reserved]

Sec. 252.219-7003 Small, small disadvantaged and women-owned small 
          business subcontracting plan (DoD contracts).

Sec. 252.219-7004 Small, small disadvantaged and women-owned small 
          business subcontracting plan (test program).

Sec. 252.219-7005--252.219-7008 [Reserved]

Sec. 252.219-7009 Section 8(a) direct award.

Sec. 252.219-7010 Alternate A.

Sec. 252.219-7011 Notification to delay performance.

Sec. 252.222-7000 Restrictions on employment of personnel.

[[Page 316]]


Sec. 252.222-7001 Right of first refusal of employment--Closure of 
          military installations.

Sec. 252.222-7002 Compliance with local labor laws (overseas).

Sec. 252.222-7003 Permit from Italian Inspectorate of Labor.

Sec. 252.222-7004 Compliance with Spanish social security laws and 
          regulations.

Sec. 252.222-7005 Prohibition on use of nonimmigrant aliens--Guam.

Sec. 252.223-7000 [Reserved]

Sec. 252.223-7001 Hazard warning labels.

Sec. 252.223-7002 Safety precautions for ammunition and explosives.

Sec. 252.223-7003 Change in place of performance--ammunition and 
          explosives.

Sec. 252.223-7004 Drug-free work force.

Sec. 252.223-7005 [Reserved]

Sec. 252.223-7006 Prohibition on storage and disposal of toxic and 
          hazardous materials.

Sec. 252.223-7007 Safeguarding sensitive conventional arms, ammunition, 
          and explosives.

Sec. 252.225-7000 Buy American Act--Balance of Payments Program 
          Certificate.

Sec. 252.225-7001 Buy American Act and Balance of Payments Program.

Sec. 252.225-7002 Qualifying country sources as subcontractors.

Sec. 252.225-7003 Report of intended performance outside the United 
          States and Canada--Submission with offer.

Sec. 252.225-7004 Reporting of intended performance outside the United 
          States and Canada--Submission after award.

Sec. 252.225-7005 Identification of expenditures in the United States.

Sec. 252.225-7006 Quarterly reporting of actual contract performance 
          outside the United States.

Sec. 252.225-7007 Prohibition on Acquisition of United States Munitions 
          List Items from Communist Chinese Military Companies.

Sec. 252.225-7008--252.225-7010 [Reserved]

Sec. 252.225-7011 Restriction on acquisition of supercomputers.

Sec. 252.225-7012 Preference for certain domestic commodities.

Sec. 252.225-7013 Duty-free entry.

Sec. 252.225-7014 Preference for domestic specialty metals.

Sec. 252.225-7015 Restriction on acquisition of hand or measuring tools.

Sec. 252.225-7016 Restriction on acquisition of ball and roller 
          bearings.

Sec. 252.225-7017 [Reserved]

Sec. 252.225-7018 Notice of prohibition of certain contracts with 
          foreign entities for the conduct of Ballistic Missile Defense 
          Research, Development, Test, and Evaluation.

Sec. 252.225-7019 Restriction on acquisition of anchor and mooring 
          chain.

Sec. 252.225-7020 Trade agreements certificate.

Sec. 252.225-7021 Trade agreements.

Sec. 252.225-7022 Restriction on acquisition of polyacrylonitrile (PAN) 
          carbon fiber.

Sec. 252.225-7023 Restriction on acquisition of vessel propellers.

Sec. 252.225-7024 [Reserved]

Sec. 252.225-7025 Restriction on acquisition of forgings.

Sec. 252.225-7026 [Reserved]

Sec. 252.225-7027 Restriction on contingent fees for foreign military 
          sales.

Sec. 252.225-7028 Exclusionary policies and practices of foreign 
          governments.

Sec. 252.225-7029 [Reserved]

Sec. 252.225-7030 Restriction on acquisition of carbon, alloy, and armor 
          steel plate.

Sec. 252.225-7031 Secondary Arab boycott of Israel.

Sec. 252.225-7032 Waiver of United Kingdom levies--Evaluation of offers.

Sec. 252.225-7033 Waiver of United Kingdom Levies.

Sec. 252.225-7034 [Reserved]

Sec. 252.225-7035 Buy American Act--Free Trade Agreements--Balance of 
          Payments Program Certificate.

Sec. 252.225-7036 Buy American Act--Free Trade Agreements--Balance of 
          Payments Program.

Sec. 252.225-7037 Evaluation of offers for air circuit breakers.

Sec. 252.225-7038 Restriction on acquisition of air circuit breakers.

Sec. 252.225-7039 [Reserved]

Sec. 252.225-7040 Contractor personnel authorized to accompany U.S. 
          Armed Forces deployed outside the United States.

Sec. 252.225-7041 Correspondence in English.

Sec. 252.225-7042 Authorization to perform.

Sec. 252.225-7043 Antiterrorism/force protection policy for defense 
          contractors outside the United States.

Sec. 252.225-7044 Balance of Payments Program--Construction Material.

Sec. 252.225-7045 Balance of Payments Program--Construction Material 
          Under Trade Agreements.

Sec. 252.226-7000 Notice of historically black college or university and 
          minority institution set-aside.

Sec. 252.226-7001 Utilization of Indian organizations, Indian-owned 
          economic enterprises, and native Hawaiian small business 
          concerns.

Sec. 252.227-7000 Non-estoppel.

Sec. 252.227-7001 Release of past infringement.

Sec. 252.227-7002 Readjustment of payments.

Sec. 252.227-7003 Termination.

Sec. 252.227-7004 License grant.

Sec. 252.227-7005 License term.

Sec. 252.227-7006 License grant--running royalty.

Sec. 252.227-7007 License term--running royalty.

Sec. 252.227-7008 Computation of royalties.

Sec. 252.227-7009 Reporting and payment of royalties.

Sec. 252.227-7010 License to other Government agencies.

Sec. 252.227-7011 Assignments.

Sec. 252.227-7012 Patent license and release contract.

[[Page 317]]


Sec. 252.227-7013 Rights in technical data--Noncommercial items.

Sec. 252.227-7014 Rights in noncommercial computer software and 
          noncommercial computer software documentation.

Sec. 252.227-7015 Technical data--Commercial items.

Sec. 252.227-7016 Rights in bid or proposal information.

Sec. 252.227-7017 Identification and assertion of use, release, or 
          disclosure restrictions.

Sec. 252.227-7018 Rights in noncommercial technical data and computer 
          software--Small Business Innovation Research (SBIR) Program.

Sec. 252.227-7019 Validation of asserted restrictions--Computer 
          software.

Sec. 252.227-7020 Rights in special works.

Sec. 252.227-7021 Rights in data--existing works.

Sec. 252.227-7022 Government rights (unlimited).

Sec. 252.227-7023 Drawings and other data to become property of 
          Government.

Sec. 252.227-7024 Notice and approval of restricted designs.

Sec. 252.227-7025 Limitations on the use or disclosure of government-
          furnished information marked with restrictive legends.

Sec. 252.227-7026 Deferred delivery of technical data or computer 
          software.

Sec. 252.227-7027 Deferred ordering of technical data or computer 
          software.

Sec. 252.227-7028 Technical data or computer software previously 
          delivered to the government.

Sec. 252.227-7029 [Reserved]

Sec. 252.227-7030 Technical data--withholding of payment.

Sec. 252.227-7031 [Reserved]

Sec. 252.227-7032 Rights in technical data and computer software 
          (foreign).

Sec. 252.227-7033 Rights in shop drawings.

Sec. 252.227-7034 Patents--subcontracts.

Sec. 252.227-7035 [Reserved]

Sec. 252.227-7036 [Reserved]

Sec. 252.227-7037 Validation of restrictive markings on technical data.

Sec. 252.227-7038 [Reserved]

Sec. 252.227-7039 Patents--reporting of subject inventions.

Sec. 252.228-7000 Reimbursement for war-hazard losses.

Sec. 252.228-7001 Ground and flight risk.

Sec. 252.228-7002 Aircraft flight risk.

Sec. 252.228-7003 Capture and detention.

Sec. 252.228-7004 Bonds or other security.

Sec. 252.228-7005 Accident reporting and investigation involving 
          aircraft, missiles, and space launch vehicles.

Sec. 252.228-7006 Compliance with Spanish laws and insurance.

Sec. 252.229-7000 Invoices exclusive of taxes or duties.

Sec. 252.229-7001 Tax relief.

Sec. 252.229-7002 Customs exemptions (Germany).

Sec. 252.229-7003 Tax exemptions (Italy).

Sec. 252.229-7004 Status of contractors as a direct contractor (Spain).

Sec. 252.229-7005 Tax exemptions (Spain).

Sec. 252.229-7006 Value added tax exclusion (United Kingdom).

Sec. 252.229-7007 Verification of United States receipt of goods.

Sec. 252.229-7008 Relief from import duty (United Kingdom).

Sec. 252.229-7009 Relief from customs duty and value added tax on fuel 
          (passenger vehicles) (United Kingdom).

Sec. 252.229-7010 Relief from customs duty on fuel (United Kingdom).

Sec. 252.229-7011 Reporting of Foreign Taxes--U.S. Assistance Programs.

Sec. 252.231-7000 Supplemental cost principles.

Sec. 252.232-7000 Advance payment pool.

Sec. 252.232-7001 Disposition of payments.

Sec. 252.232-7002 Progress payments for foreign military sales 
          acquisitions.

Sec. 252.232-7003 Electronic submission of payment requests.

Sec. 252.232-7004 DoD progress payment rates.

Sec. 252.232-7005 Reimbursement of subcontractor advance payments--DoD 
          pilot mentor-protege program.

Sec. 252.232-7006 Alternate A.

Sec. 252.232-7007 Limitation of Government's obligation.

Sec. 252.232-7008 Assignment of claims (overseas).

Sec. 252.232-7009 Mandatory payment by Governmentwide commercial 
          purchase card.

Sec. 252.232-7010 Levies on contract payments.

Sec. 252.233-7000 [Reserved]

Sec. 252.233-7001 Choice of law (overseas).

Sec. 252.235-7000 Indemnification under 10 U.S.C. 2354--fixed price.

Sec. 252.235-7001 Indemnification under 10 U.S.C. 2354--cost 
          reimbursement.

Sec. 252.235-7002 Animal welfare.

Sec. 252.235-7003 Frequency authorization.

Sec. 252.235-7004--252.235-7009 [Reserved]

Sec. 252.235-7010 Acknowledgement of support and disclaimer.

Sec. 252.235-7011 Final scientific or technical report.

Sec. 252.236-7000 Modification proposals--price breakdown.

Sec. 252.236-7001 Contract drawings and specifications.

Sec. 252.236-7002 Obstruction of navigable waterways.

Sec. 252.236-7003 Payment for mobilization and preparatory work.

Sec. 252.236-7004 Payment for mobilization and demobilization.

Sec. 252.236-7005 Airfield safety precautions.

Sec. 252.236-7006 Cost limitation.

Sec. 252.236-7007 Additive or deductive items.

Sec. 252.236-7008 Contract prices--bidding schedules.

Sec. 252.236-7009 Option for supervision and inspection services.

Sec. 252.236-7010 Overseas military construction--Preference for United 
          States firms.

[[Page 318]]


Sec. 252.236-7011 Overseas architect-engineer services--Restriction to 
          United States firms.

Sec. 252.236-7012 Military construction on Kwajalein Atoll--evaluation 
          preference.

Sec. 252.237-7000 Notice of special standards of responsibility.

Sec. 252.237-7001 Compliance with audit standards.

Sec. 252.237-7002 Award to single offeror.

Sec. 252.237-7003 Requirements.

Sec. 252.237-7004 Area of performance.

Sec. 252.237-7005 Performance and delivery.

Sec. 252.237-7006 Subcontracting.

Sec. 252.237-7007 Termination for default.

Sec. 252.237-7008 Group interment.

Sec. 252.237-7009 Permits.

Sec. 252.237-7010 [Reserved]

Sec. 252.237-7011 Preparation history.

Sec. 252.237-7012 Instruction to offerors (count-of-articles).

Sec. 252.237-7013 Instruction to offerors (bulk weight).

Sec. 252.237-7014 Loss or damage (count-of-articles).

Sec. 252.237-7015 Loss or damage (weight of articles).

Sec. 252.237-7016 Delivery tickets.

Sec. 252.237-7017 Individual laundry.

Sec. 252.237-7018 Special definitions of Government property.

Sec. 252.237-7019 Training for contractor personnel interacting with 
          detainees.

Sec. 252.237-7020--252.237-7021 [Reserved]

Sec. 252.237-7022 Services at installations being closed.

Sec. 252.239-7000 Protection against compromising emanations.

Sec. 252.239-7001 [Reserved]

Sec. 252.239-7002 Access.

Sec. 252.239-7003 [Reserved]

Sec. 252.239-7004 Orders for facilities and services.

Sec. 252.239-7005 Rates, charges, and services.

Sec. 252.239-7006 Tariff information.

Sec. 252.239-7007 Cancellation or termination of orders.

Sec. 252.239-7008 Reuse arrangements.

Sec. 252.239-7009--252.239-7010 [Reserved]

Sec. 252.239-7011 Special construction and equipment charges.

Sec. 252.239-7012 Title to telecommunication facilities and equipment.

Sec. 252.239-7013 Obligation of the Government.

Sec. 252.239-7014 Term of agreement.

Sec. 252.239-7015 Continuation of communication service authorizations.

Sec. 252.239-7016 Telecommunications security equipment, devices, 
          techniques, and services.

Sec. 252.241-7000 Superseding contract.

Sec. 252.241-7001 Government access.

Sec. 252.242-7000 [Reserved]

Sec. 252.242-7001 Notice of Earned Value Management System.

Sec. 252.242-7002 Earned Value Management System.

Sec. 252.242-7003 Application for U.S. Government shipping 
          documentation/instructions.

Sec. 252.242-7004 Material management and accounting system.

Sec. 252.242-7005 Cost/Schedule Status Report.

Sec. 252.242-7006 Cost/Schedule Status Report Plans.

Sec. 252.243-7000 [Reserved]

Sec. 252.243-7001 Pricing of contract modifications.

Sec. 252.243-7002 Requests for equitable adjustment.

Sec. 252.244-7000 Subcontracts for commercial items and commercial 
          components (DoD contracts).

Sec. 252.245-7000 Government-furnished mapping, charting, and geodesy 
          property.

Sec. 252.245-7001 Reports of Government property.

Sec. 252.246-7000 Material inspection and receiving report.

Sec. 252.246-7001 Warranty of data.

Sec. 252.246-7002 Warranty of construction (Germany).

Sec. 252.247-7000 Hardship conditions.

Sec. 252.247-7001 Price adjustment.

Sec. 252.247-7002 Revision of prices.

Sec. 252.247-7003 [Reserved]

Sec. 252.247-7004 Indefinite quantities--fixed charges.

Sec. 252.247-7005 Indefinite quantities--no fixed charges.

Sec. 252.247-7006 Removal of contractor's employees.

Sec. 252.247-7007 Liability and insurance.

Sec. 252.247-7008 Evaluation of bids.

Sec. 252.247-7009 Award.

Sec. 252.247-7010 Scope of contract.

Sec. 252.247-7011 Period of contract.

Sec. 252.247-7012 Ordering limitation.

Sec. 252.247-7013 Contract areas of performance.

Sec. 252.247-7014 Demurrage.

Sec. 252.247-7015 Requirements.

Sec. 252.247-7016 Contractor liability for loss or damage.

Sec. 252.247-7017 Erroneous shipments.

Sec. 252.247-7018 Subcontracting.

Sec. 252.247-7019 Drayage.

Sec. 252.247-7020 Additional services.

Sec. 252.247-7021 Returnable containers other than cylinders.

Sec. 252.247-7022 Representation of extent of transportation by sea.

Sec. 252.247-7023 Transportation of supplies by sea.

Sec. 252.247-7024 Notification of transportation of supplies by sea.

Sec. 252.247-7025 Reflagging or repair work.

Sec. 252.249-7000 Special termination costs.

Sec. 252.249-7001 [Reserved]

Sec. 252.249-7002 Notification of anticipated contract termination or 
          reduction.

Sec. 252.251-7000 Ordering from Government supply sources.

[[Page 319]]


Sec. 252.251-7001 Use of Interagency Fleet Management System (IFMS) 
          vehicles and related services.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36479, July 31, 1991, unless otherwise noted.

       Subpart 252.1_Instructions for Using Provisions and Clauses



Sec. 252.101  Using part 252.

    (b) Numbering.
    (2) Provisions or clauses that supplement the FAR.
    (ii)(B) DFARS provisions or clauses use a four digit sequential 
number in the 7000 series, e.g., -7000, -7001, -7002. Department or 
agency supplemental provisions or clauses use four digit sequential 
numbers in the 9000 series.

              Subpart 252.2_Text of Provisions And Clauses



Sec. 252.201-7000  Contracting officer's representative.

    As prescribed in 201.602-70, use the following clause:

             Contracting Officer's Representative (DEC 1991)

    (a) Definition. Contracting officer's representative means an 
individual designated in accordance with subsection 201.602-2 of the 
Defense Federal Acquisition Regulation Supplement and authorized in 
writing by the contracting officer to perform specific technical or 
administrative functions.
    (b) If the Contracting Officer designates a contracting officer's 
representative (COR), the Contractor will receive a copy of the written 
designation. It will specify the extent of the COR's authority to act on 
behalf of the contracting officer. The COR is not authorized to make any 
commitments or changes that will affect price, quality, quantity, 
delivery, or any other term or condition of the contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 57 FR 42633, Sept. 15, 1992]



Sec. 252.203-7000  [Reserved]



Sec. 252.203-7001  Prohibition on persons convicted of fraud or other 
          defense-contract-related felonies.

    As prescribed in 203.570-3, use the following clause:

  Prohibition on Persons Convicted of Fraud or Other Defense-Contract-
                       Related Felonies (DEC 2004)

    (a) Definitions. As used in this clause--
    (1) Arising out of a contract with the DoD means any act in 
connection with--
    (i) Attempting to obtain;
    (ii) Obtaining; or
    (iii) Performing a contract or first-tier subcontract of any agency, 
department, or component of the Department of Defense (DoD).
    (2) Conviction of fraud or any other felony means any conviction for 
fraud or a felony in violation of state or Federal criminal statutes, 
whether entered on a verdict or plea, including a plea of nolo 
contendere, for which sentence has been imposed.
    (3) Date of conviction means the date judgment was entered against 
the individual.
    (b) Any individual who is convicted after September 29, 1988, of 
fraud or any other felony arising out of a contract with the DoD is 
prohibited from serving--
    (1) In a management or supervisory capacity on this contract;
    (2) On the board of directors of the Contractor;
    (3) As a consultant, agent, or representative for the Contractor; or
    (4) In any other capacity with the authority to influence, advise, 
or control the decisions of the Contractor with regard to this contract.
    (c) Unless waived, the prohibition in paragraph (b) of this clause 
applies for not less than 5 years from the date of conviction.
    (d) 10 U.S.C. 2408 provides that the Contractor shall be subject to 
a criminal penalty of not more than $500,000 if convicted of knowingly--
    (1) Employing a person under a prohibition specified in paragraph 
(b) of this clause; or
    (2) Allowing such a person to serve on the board of directors of the 
contractor or first-tier subcontractor.
    (e) In addition to the criminal penalties contained in 10 U.S.C. 
2408, the Government may consider other available remedies, such as--
    (1) Suspension or debarment;
    (2) Cancellation of the contract at no cost to the Government; or
    (3) Termination of the contract for default.
    (f) The Contractor may submit written requests for waiver of the 
prohibition in paragraph (b) of this clause to the Contracting Officer. 
Requests shall clearly identify--

[[Page 320]]

    (1) The person involved;
    (2) The nature of the conviction and resultant sentence or 
punishment imposed;
    (3) The reasons for the requested waiver; and
    (4) An explanation of why a waiver is in the interest of national 
security.
    (g) The Contractor agrees to include the substance of this clause, 
appropriately modified to reflect the identity and relationship of the 
parties, in all first-tier subcontracts exceeding the simplified 
acquisition threshold in part 2 of the Federal Acquisition Regulation, 
except those for commercial items or components.
    (h) Pursuant to 10 U.S.C. 2408(c), defense contractors and 
subcontractors may obtain information as to whether a particular person 
has been convicted of fraud or any other felony arising out of a 
contract with the DoD by contacting The Office of Justice Programs, The 
Denial of Federal Benefits Office, U.S. Department of Justice, telephone 
(301) 809-4904.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 58 FR 28471, May 13, 1993; 59 
FR 27675, May 27, 1994; 60 FR 61600, Nov. 30, 1995; 62 FR 34128, June 
24, 1997; 64 FR 14398, Mar. 25, 1999; 69 FR 74990, Dec. 15, 2004]



Sec. 252.203-7002  Display of DoD hotline poster.

    As prescribed in 203.7002, use the following clause:

                Display of DOD Hotline Poster (DEC 1991)

    (a) The Contractor shall display prominently in common work areas 
within business segments performing work under Department of Defense 
(DoD) contracts, DoD Hotline Posters prepared by the DoD Office of the 
Inspector General.
    (b) DoD Hotline Posters may be obtained from the DoD Inspector 
General, Attn: Defense Hotline, 400 Army Navy Drive, Washington, DC 
22202-2884.
    (c) The Contractor need not comply with paragraph (a) of this clause 
if it has established a mechanism, such as a hotline, by which employees 
may report suspected instances of improper conduct, and instructions 
that encourage employees to make such reports.

                             (End of clause)



Sec. 252.204-7000  Disclosure of information.

    As prescribed in 204.404-70(a), use the following clause:

                  Disclosure of Information (DEC 1991)

    (a) The Contractor shall not release to anyone outside the 
Contractor's organization any unclassified information, regardless of 
medium (e.g., film, tape, document), pertaining to any part of this 
contract or any program related to this contract, unless--
    (1) The Contracting Officer has given prior written approval; or
    (2) The information is otherwise in the public domain before the 
date of release.
    (b) Requests for approval shall identify the specific information to 
be released, the medium to be used, and the purpose for the release. The 
Contractor shall submit its request to the Contracting Officer at least 
45 days before the proposed date for release.
    (c) The Contractor agrees to include a similar requirement in each 
subcontract under this contract. Subcontractors shall submit requests 
for authorization to release through the prime contractor to the 
Contracting Officer.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 57 FR 14996, Apr. 23, 1992]



Sec. 252.204-7001  Commercial and Government Entity (CAGE) code 
          reporting.

    As prescribed in 204.7207, use the following provision:

    Commercial and Government Entity (CAGE) Code Reporting (AUG 1999)

    (a) The offeror is requested to enter its CAGE code on its offer in 
the block with its name and address. The CAGE code entered must be for 
that name and address. Enter ``CAGE'' before the number.
    (b) If the offeror does not have a CAGE code, it may ask the 
Contracting Officer to request one from the Defense Logistics 
Information Service (DLIS). The Contracting Officer will--
    (1) Ask the Contractor to complete section B of a DD Form 2051, 
Request for Assignment of a Commercial and Government Entity (CAGE) 
Code;
    (2) Complete section A and forward the form to DLIS; and
    (3) Notify the Contractor of its assigned CAGE code.
    (c) Do not delay submission of the offer pending receipt of a CAGE 
code.

                           (End of provision)

[64 FR 43101, Aug. 9, 1999, as amended at 66 FR 47097, Sept. 11, 2001]

[[Page 321]]



Sec. 252.204-7002  Payment for subline items not separately priced.

    As prescribed in 204.7104-1(b)(3)(iv), use the following clause:

       Payment for Subline Items not Separately Priced (DEC 1991)

    (a) If the schedule in this contract contains any contract subline 
items or exhibit subline items identified as not separately priced 
(NSP), it means that the unit price for that subline item is included in 
the unit price of another, related line or subline item.
    (b) The Contractor shall not invoice the Government for any portion 
of a contract line item or exhibit line item which contains an NSP 
until--
    (1) The Contractor has delivered the total quantity of all related 
contract subline items or exhibit subline items; and
    (2) The Government has accepted them.
    (c) This clause does not apply to technical data.

                             (End of clause)



Sec. 252.204-7003  Control of government personnel work product.

    As prescribed in 204.404-70(b), use the following clause:

         Control of Government Personnel Work Product (APR 1992)

    The Contractor's procedures for protecting against unauthorized 
disclosure of information shall not require Department of Defense 
employees or members of the Armed Forces to relinquish control of their 
work products, whether classified or not, to the contractor.

                             (End of clause)

[57 FR 14996, Apr. 23, 1992]



Sec. 252.204-7004  Alternate A.

                         Alternate A (NOV 2003)

    As prescribed in 204.1104, substitute the following paragraph (a) 
for paragraph (a) of the clause at FAR 52.204-7:
    (a) Definitions. As used in this clause--
    ``Central Contractor Registration (CCR) database'' means the primary 
Government repository for contractor information required for the 
conduct of business with the Government.
    ``Commercial and Government Entity (CAGE) code'' means--
    (1) A code assigned by the Defense Logistics Information Service 
(DLIS) to identify a commercial or Government entity; or
    (2) A code assigned by a member of the North Atlantic Treaty 
Organization that DLIS records and maintains in the CAGE master file. 
This type of code is known as an ``NCAGE code.''
    ``Data Universal Numbering System (DUNS) number'' means the 9-digit 
number assigned by Dun and Bradstreet, Inc. (D&B) to identify unique 
business entities.
    ``Data Universal Numbering System +4 (DUNS+4) number'' means the 
DUNS number assigned by D&B plus a 4-character suffix that may be 
assigned by a business concern. (D&B has no affiliation with this 4-
character suffix.) This 4-character suffix may be assigned at the 
discretion of the business concern to establish additional CCR records 
for identifying alternative Electronic Funds Transfer (EFT) accounts 
(see Subpart 32.11 of the Federal Acquisition Regulation) for the same 
parent concern.
    ``Registered in the CCR database'' means that--
    (1) The Contractor has entered all mandatory information, including 
the DUNS number or the DUNS+4 number, into the CCR database;
    (2) The Contractor's CAGE code is in the CCR database; and
    (3) The Government has validated all mandatory data fields and has 
marked the records ``Active.''

[68 FR 64558, Nov. 14, 2003]



Sec. 252.204-7005  Oral attestation of security responsibilities.

    As prescribed in 204.404-70(c), use the following clause:

        Oral Attestation of Security Responsibilities (NOV 2001)

    (a) Contractor employees cleared for access to Top Secret (TS), 
Special Access Program (SAP), or Sensitive Compartmented Information 
(SCI) shall attest orally that they will conform to the conditions and 
responsibilities imposed by law or regulation on those granted access. 
Reading aloud the first paragraph of Standard Form 312, Classified 
Information Nondisclosure Agreement, in the presence of a person 
designated by the Contractor for this purpose, and a witness, will 
satisfy this requirement. Contractor employees currently cleared for 
access to TS, SAP, or SCI may attest orally to their security 
responsibilities when being briefed into a new program or during their 
annual refresher briefing. There is no requirement to retain a separate 
record of the oral attestation.
    (b) If an employee refuses to attest orally to security 
responsibilities, the Contractor shall deny the employee access to 
classified information and shall submit a report to the Contractor's 
security activity.

[[Page 322]]

                             (End of clause)

[64 FR 45197, Aug. 19, 1999, as amended at 66 FR 55121, Nov. 1, 2001]



Sec. 252.204-7006  Billing Instructions.

    As prescribed in 204.7109, use the following clause:

                     Billing Instructions (OCT 2005)

    When submitting a request for payment, the Contractor shall--
    (a) Identify the contract line item(s) on the payment request that 
reasonably reflect contract work performance; and
    (b) Separately identify a payment amount for each contract line item 
included in the payment request.

                             (End of clause)

[70 FR 58983, Oct. 11, 2005]



Sec. 252.205-7000  Provision of information to cooperative agreement 
          holders.

    As prescribed in 205.470, use the following clause:

  Provision of Information to Cooperative Agreement Holders (DEC 1991)

    (a) Definition.
    Cooperative agreement holder means a State or local government; a 
private, nonprofit organization; a tribal organization (as defined in 
section 4(c) of the Indian Self-Determination and Education Assistance 
Act (Pub. L. 93-268; 25 U.S.C. 450(c))); or an economic enterprise (as 
defined in section 3(e) of the Indian Financing Act of 1974 (Pub. L. 93-
362; 25 U.S.C. 1452(e))) whether such economic enterprise is organized 
for profit or nonprofit purposes; which has an agreement with the 
Defense Logistics Agency to furnish procurement technical assistance to 
business entities.
    (b) The Contractor shall provide cooperative agreement holders, upon 
their request, with a list of those appropriate employees or offices 
responsible for entering into subcontracts under defense contracts. The 
list shall include the business address, telephone number, and area of 
responsibility of each employee or office.
    (c) The Contractor need not provide the listing to a particular 
cooperative agreement holder more frequently than once a year.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 69 FR 63328, Nov. 1, 2004]



Sec. 252.206-7000  Domestic source restriction.

    As prescribed at 206.302-3-70, use the following provision:

                 Domestic Source Restriction (DEC 1991)

    This solicitation is restricted to domestic sources under the 
authority of 10 U.S.C. 2304(c)(3). Foreign sources, except Canadian 
sources, are not eligible for award.

                           (End of provision)



Sec. 252.208-7000  Intent to furnish precious metals as Government-
          furnished material.

    As prescribed in 208.7305(a), use the following clause:

Intent To Furnish Precious Metals as Government-Furnished Material (DEC 
                                  1991)

    (a) The Government intends to furnish precious metals required in 
the manufacture of items to be delivered under the contract if the 
Contracting Officer determines it to be in the Government's best 
interest. The use of Government-furnished silver is mandatory when the 
quantity required is one hundred troy ounces or more. The precious 
metal(s) will be furnished pursuant to the Government Furnished Property 
clause of the contract.
    (b) The Offeror shall cite the type (silver, gold, platinum, 
palladium, iridium, rhodium, and ruthenium) and quantity in whole troy 
ounces of precious metals required in the performance of this contract 
(including precious metals required for any first article or production 
sample), and shall specify the national stock number (NSN) and 
nomenclature, if known, of the deliverable item requiring precious 
metals.

------------------------------------------------------------------------
                                                       Deliverable item
        Precious metal*               Quantity             (NSN and
                                                      nomenclature)!!rs
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 *If platinum or palladium, specify whether sponge or granules are
  required.

    (c) Offerors shall submit two prices for each deliverable item which 
contains precious metals--one based on the Government furnishing 
precious metals, and one based on the Contractor furnishing precious 
metals. Award will be made on the basis which is in the best interest of 
the Government.
    (d) The Contractor agrees to insert this clause, including this 
paragraph (d), in solicitations for subcontracts and purchase orders 
issued in performance of this contract, unless the Contractor knows that 
the item being purchased contains no precious metals.

[[Page 323]]

                             (End of clause)



Sec. 252.209-7000  [Reserved]



Sec. 252.209-7001  Disclosure of ownership or control by the government 
          of a terrorist country.

    As prescribed in 209.104-70(a), use the following provision:

  Disclosure of Ownership or Control by the Government of a Terrorist 
                           Country (SEP 2004)

    (a) Definitions. As used in this provision--
    (1) Government of a terrorist country includes the state and the 
government of a terrorist country, as well as any political subdivision, 
agency, or instrumentality thereof.
    (2) Terrorist country means a country determined by the Secretary of 
State, under section 6(j)(1)(A) of the Export Administration Act of 1979 
(50 U.S.C. App. 2405(j)(i)(A)), to be a country the government of which 
has repeatedly provided support for acts of international terrorism. As 
of the date of this provision, terrorist countries subject to this 
provision include: Cuba, Iran, Libya, North Korea, Sudan, and Syria.
    (3) Significant interest means--
    (i) Ownership of or beneficial interest in 5 percent or more of the 
firm's or subsidiary's securities. Beneficial interest includes holding 
5 percent or more of any class of the firm's securities in ``nominee 
shares,'' ``street names,'' or some other method of holding securities 
that does not disclose the beneficial owner;
    (ii) Holding a management position in the firm, such as a director 
or officer;
    (iii) Ability to control or influence the election, appointment, or 
tenure of directors or officers in the firm;
    (iv) Ownership of 10 percent or more of the assets of a firm such as 
equipment, buildings, real estate, or other tangible assets of the firm; 
or
    (v) Holding 50 percent or more of the indebtedness of a firm.
    (b) Prohibition on award. In accordance with 10 U.S.C. 2327, no 
contract may be awarded to a firm or a subsidiary of a firm if the 
government of a terrorist country has a significant interest in the firm 
or subsidiary or, in the case of a subsidiary, the firm that owns the 
subsidiary, unless a waiver is granted by the Secretary of Defense.
    (c) Disclosure. If the government of a terrorist country has a 
significant interest in the Offeror or a subsidiary of the Offeror, the 
Offeror shall disclose such interest in an attachment to its offer. If 
the Offeror is a subsidiary, it shall also disclose any significant 
interest the government of a terrorist country has in any firm that owns 
or controls the subsidiary. The disclosure shall include--
    (1) Identification of each government holding a significant 
interest; and
    (2) A description of the significant interest held by each 
government.

                           (End of provision)

[59 FR 51131, Oct. 7, 1994, as amended at 63 FR 14837, Mar. 27, 1998; 69 
FR 55993, Sept. 17, 2004]



Sec. 252.209-7002  Disclosure of ownership or control by a foreign 
          government.

    As prescribed in 209.104-70(b), use the following provision:

  Disclosure of Ownership or Control by a Foreign Government (JUN 2005)

    (a) Definitions. As used in this provision--
    (1) Effectively owned or controlled means that a foreign government 
or any entity controlled by a foreign government has the power, either 
directly or indirectly, whether exercised or exercisable, to control the 
election, appointment, or tenure of the Offeror's officers or a majority 
of the Offeror's board of directors by any means, e.g., ownership, 
contract, or operation of law (or equivalent power for unincorporated 
organizations).
    (2) Entity controlled by a foreign government--
    (i) Means--
    (A) Any domestic or foreign organization or corporation that is 
effectively owned or controlled by a foreign government; or
    (B) Any individual acting on behalf of a foreign government.
    (ii) Does not include an organization or corporation that is owned, 
but is not controlled, either directly or indirectly, by a foreign 
government if the ownership of that organization or corporation by that 
foreign government was effective before October 23, 1992.
    (3) Foreign government includes the state and the government of any 
country (other than the United States and its outlying areas) as well as 
any political subdivision, agency, or instrumentality thereof.
    (4) Proscribed information means--
    (i) Top Secret information;
    (ii) Communications Security (COMSEC) information, except classified 
keys used to operate secure telephone units (STU IIIs);
    (iii) Restricted Data as defined in the U.S. Atomic Energy Act of 
1954, as amended;
    (iv) Special Access Program (SAP) information; or
    (v) Sensitive Compartmented Information (SCI).
    (b) Prohibition on award. No contract under a national security 
program may be awarded to an entity controlled by a foreign government 
if that entity requires access to proscribed information to perform the 
contract, unless the Secretary of Defense or a designee has waived 
application of 10 U.S.C. 2536(a).

[[Page 324]]

    (c) Disclosure. The Offeror shall disclose any interest a foreign 
government has in the Offeror when that interest constitutes control by 
a foreign government as defined in this provision. If the Offeror is a 
subsidiary, it shall also disclose any reportable interest a foreign 
government has in any entity that owns or controls the subsidiary, 
including reportable interest concerning the Offeror's immediate parent, 
intermediate parents, and the ultimate parent. Use separate paper as 
needed, and provide the information in the following format: Offeror's 
Point of Contact for Questions about Disclosure (Name and Phone Number 
with Country Code, City Code and Area Code, as applicable)

 
 
 
Name and Address of Offeror...............
Name and Address of Entity Controlled by a  Description of Interest,
 Foreign Government.                         Ownership Percentage, and
                                             Identification of Foreign
                                             Government
 

                           (End of provision)

[58 FR 28471, May 13, 1993, as amended at 59 FR 51133, Oct. 7, 1994; 70 
FR 35546, June 21, 2005]



Sec. 252.209-7003  [Reserved]



Sec. 252.209-7004  Subcontracting with firms that are owned or 
          controlled by the government of a terrorist country.

    As prescribed in 209.409, use the following clause:

Subcontracting with Firms that are Owned or Controlled by the Government 
                    of a Terrorist County (MAR 1998)

    (a) Unless the Government determines that there is a compelling 
reason to do so, the Contractor shall not enter into any subcontract in 
excess of $25,000 with a firm, or a subsidiary of a firm, that is 
identified, on the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs, as being ineligible for the award of Defense 
contracts or subcontracts because it is owned or controlled by the 
government of a terrorist country.
    (b) A corporate officer or a designee of the Contractor shall notify 
the Contracting Officer, in writing, before entering into a subcontract 
with a party that is identified, on the List of Parties Excluded from 
Federal Procurement and Nonprocurement Programs, as being ineligible for 
the award of Defense contracts or subcontracts because it is owned or 
controlled by the government of a terrorist country. The notice must 
include the name of the proposed subcontractor and the compelling 
reason(s) for doing business with the subcontractor notwithstanding its 
inclusion on the List of Parties Excluded From Federal Procurement and 
Nonprocurement Programs.

                             (End of clause)

[63 FR 14837, Mar. 27, 1998]



Sec. 252.209-7005  Reserve Officer Training Corps and military 
          recruiting on campus.

    As prescribed in 209.470-4, use the following clause:

 Reserve Officer Training Corps and Military Recruiting on Campus (JAN 
                                  2000)

    (a) Definition. ``Institution of higher education,'' as used in this 
clause, means an institution that meets the requirements of 20 U.S.C. 
1001 and includes all subelements of such an institution.
    (b) Limitation on contract award. Except as provided in paragraph 
(c) of this clause, an institution of higher education is ineligible for 
contract award if the Secretary of Defense determines that the 
institution has a policy or practice (regardless of when implemented) 
that prohibits or in effect prevents--
    (1) The Secretary of a military department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officer Training 
Corps (ROTC) (in accordance with 10 U.S.C. 654 and other applicable 
Federal laws) at that institution;
    (2) A student at that institution from enrolling in a unit of the 
Senior ROTC at another institution of higher education;
    (3) The Secretary of a military department or the Secretary of 
Transportation from gaining entry to campuses, or access to students 
(who are 17 years of age or older) on campuses, for purposes of military 
recruiting; or
    Military recruiters from accessing, for purposes of military 
recruiting, the following information pertaining to students (who are 17 
years of age or older) enrolled at that institution:
    (i) Name.
    (ii) Address.
    (iii) Telephone number.
    (iv) Date and place of birth.
    (v) Educational level.
    (vi) Academic major.
    (vii) Degrees received.
    (viii) Most recent educational institution enrollment.
    (c) Exception. The limitation in paragraph (b) of this clause does 
not apply to an institution of higher education if the Secretary of 
Defense determines that--

[[Page 325]]

    (1) The institution has ceased the policy or practice described in 
paragraph (b) of this clause; or
    (2) The institution has a long-standing policy of pacifism based on 
historical religious affiliation.
    (d) Agreement. The Contractor represents that it does not now have, 
and agrees that during performance of this contract it will not adopt, 
any policy or practice described in paragraph (b) of this clause, unless 
the Secretary of Defense has granted an exception in accordance with 
paragraph (c)(2) of this clause.
    (e) Notwithstanding any other clause of this contract, if the 
Secretary of Defense determines that the Contractor misrepresented its 
policies and practices at the time of contract award or has violated the 
agreement in paragraph (d) of this clause--
    (1) The Contractor will be ineligible for further payments under 
this and other contracts with the Department of Defense; and
    (2) The Government will terminate this contract for default for the 
Contractor's material failure to comply with the terms and conditions of 
award.

                             (End of clause)

[65 FR 2057, Jan. 13, 2000]



Sec. 252.211-7000  Acquisition streamlining.

    As prescribed in 211.002-70, use the following clause:

                   Acquisition Streamlining (DEC 1991)

    (a) The Government's acquisition streamlining objectives are to--
    (1) Acquire systems that meet stated performance requirements;
    (2) Avoid over-specification; and
    (3) Ensure that cost effective requirements are included in future 
acquisitions.
    (b) The Contractor shall--
    (1) Prepare and submit acquisition streamlining recommendations in 
accordance with the statement of work of this contract; and
    (2) Format and submit the recommendations as prescribed by data 
requirements on the contract data requirements list of this contract.
    (c) The Government has the right to accept, modify, or reject the 
Contractor's recommendations.
    (d) The Contractor shall insert this clause, including this 
paragraph (d), in all subcontracts over $1 million, awarded in the 
performance of this contract.

                             (End of clause)

[56 FR 36479, July 31, 1991. Redesignated and amended at 60 FR 61600, 
Nov. 30, 1995]



Sec. 252.211-7001  Availability of Specifications, Standards, and Data 
          Item Descriptions Not Listed in the Acquisition Streamlining 

          and Standardization Information System (ASSIST), and Plans, 
          Drawings, and Other Pertinent Documents. Availability of 

          specifications and standards Not listed in DODISS, data item 
          descriptions Not listed in DoD 5010.12-L, and plans, drawings, 

          and other pertinent documents.

    As prescribed in 211.204(c), use the following provision:

 Availability of Specifications, Standards, and Data Item Descriptions 
     Not Listed in the Acquisition Streamlining and Standardization 
 Information System (ASSIST), and Plans, Drawings, and Other Pertinent 
                          Documents (MAY 2006)

    Offerors may obtain the specifications, standards, plans, drawings, 
data item descriptions, and other pertinent documents cited in this 
solicitation by submitting a request to:

(Activity)______________________________________________________________
(Complete Address)______________________________________________________

    Include the number of the solicitation and the title and number of 
the specification, standard, plan, drawing, or other pertinent document.

                           (End of provision)

[56 FR 36479, July 31, 1991. Redesignated and amended at 60 FR 61600, 
Nov. 30, 1995; 71 FR 27641, May 12, 2006]



Sec. 252.211-7002  Availability for examination of specifications, 
          standards, plans, drawings, data item descriptions, and other 
          pertinent documents.

    As prescribed in 211.204(c), use the following provision:

   Availability for Examination of Specifications, Standards, Plans, 
  Drawings, Data Item Descriptions, and Other Pertinent Documents (DEC 
                                  1991)

    The specifications, standards, plans, drawings, data item 
descriptions, and other pertinent documents cited in this solicitation 
are not available for distribution but may be examined at the following 
location:

________________________________________________________________________
(Insert complete address)

                           (End of provision)

[56 FR 36479, July 31, 1991. Redesignated and amended at 60 FR 61600, 
Nov. 30, 1995]

[[Page 326]]



Sec. 252.211-7003  Item identification and valuation.

    As prescribed in 211.274-4, use the following clause:

              Item Identification and Valuation (JUN 2005)

    (a) Definitions. As used in this clause'
    Automatic identification device means a device, such as a reader or 
interrogator, used to retrieve data encoded on machine-readable media.
    Concatenated unique item identifier means--
    (1) For items that are serialized within the enterprise identifier, 
the linking together of the unique identifier data elements in order of 
the issuing agency code, enterprise identifier, and unique serial number 
within the enterprise identifier; or
    (2) For items that are serialized within the original part, lot, or 
batch number, the linking together of the unique identifier data 
elements in order of the issuing agency code; enterprise identifier; 
original part, lot, or batch number; and serial number within the 
original part, lot, or batch number.
    Data qualifier means a specified character (or string of characters) 
that immediately precedes a data field that defines the general category 
or intended use of the data that follows.
    DoD recognized unique identification equivalent means a unique 
identification method that is in commercial use and has been recognized 
by DoD. All DoD recognized unique identification equivalents are listed 
at http://www.acq.osd.mil/dpap/UID/equivalents.html.
    DoD unique item identification means a system of marking items 
delivered to DoD with unique item identifiers that have machine-readable 
data elements to distinguish an item from all other like and unlike 
items. For items that are serialized within the enterprise identifier, 
the unique item identifier shall include the data elements of the 
enterprise identifier and a unique serial number. For items that are 
serialized within the part, lot, or batch number within the enterprise 
identifier, the unique item identifier shall include the data elements 
of the enterprise identifier; the original part, lot, or batch number; 
and the serial number.
    Enterprise means the entity (e.g., a manufacturer or vendor) 
responsible for assigning unique item identifiers to items.
    Enterprise identifier means a code that is uniquely assigned to an 
enterprise by an issuing agency.
    Government's unit acquisition cost means--
    (1) For fixed-price type line, subline, or exhibit line items, the 
unit price identified in the contract at the time of delivery;
    (2) For cost-type or undefinitized line, subline, or exhibit line 
items, the Contractor's estimated fully burdened unit cost to the 
Government at the time of delivery; and
    (3) For items produced under a time-and-materials contract, the 
Contractor's estimated fully burdened unit cost to the Government at the 
time of delivery.
    Issuing agency means an organization responsible for assigning a 
non-repeatable identifier to an enterprise (i.e., Dun & Bradstreet's 
Data Universal Numbering System (DUNS) Number, Uniform Code Council 
(UCC)/EAN International (EAN) Company Prefix, or Defense Logistics 
Information System (DLIS) Commercial and Government Entity (CAGE) Code).
    Issuing agency code means a code that designates the registration 
(or controlling) authority for the enterprise identifier.
    Item means a single hardware article or a single unit formed by a 
grouping of subassemblies, components, or constituent parts.
    Lot or batch number means an identifying number assigned by the 
enterprise to a designated group of items, usually referred to as either 
a lot or a batch, all of which were manufactured under identical 
conditions.
    Machine-readable means an automatic identification technology media, 
such as bar codes, contact memory buttons, radio frequency 
identification, or optical memory cards.
    Original part number means a combination of numbers or letters 
assigned by the enterprise at item creation to a class of items with the 
same form, fit, function, and interface.
    Parent item means the item assembly, intermediate component, or 
subassembly that has an embedded item with a unique item identifier or 
DoD recognized unique identification equivalent.
    Serial number within the enterprise identifier means a combination 
of numbers, letters, or symbols assigned by the enterprise to an item 
that provides for the differentiation of that item from any other like 
and unlike item and is never used again within the enterprise.
    Serial number within the part, lot, or batch number means a 
combination of numbers or letters assigned by the enterprise to an item 
that provides for the differentiation of that item from any other like 
item within a part, lot, or batch number assignment.
    Serialization within the enterprise identifier means each item 
produced is assigned a serial number that is unique among all the 
tangible items produced by the enterprise and is never used again. The 
enterprise is responsible for ensuring unique serialization within the 
enterprise identifier.
    Serialization within the part, lot, or batch number means each item 
of a particular part, lot, or batch number is assigned a unique serial 
number within that part, lot, or batch number assignment. The enterprise 
is responsible for ensuring unique serialization

[[Page 327]]

within the part, lot, or batch number within the enterprise identifier.
    Unique item identifier means a set of data elements marked on items 
that is globally unique and unambiguous.
    Unique item identifier type means a designator to indicate which 
method of uniquely identifying a part has been used. The current list of 
accepted unique item identifier types is maintained at http://
www.acq.osd.mil/dpap/UID/uid--types.html.
    (b) The Contractor shall deliver all items under a contract line, 
subline, or exhibit line item.
    (c) DoD unique item identification or DoD recognized unique 
identification equivalents. (1) The Contractor shall provide DoD unique 
item identification, or a DoD recognized unique identification 
equivalent, for--
    (i) All delivered items for which the Government's unit acquisition 
cost is $5,000 or more; and
    (ii) The following items for which the Government's unit acquisition 
cost is less than $5,000:

 
Contract line, subline, or  exhibit line
                item No.                          Item description:
 
 
-----------------------------------------   ----------------------------
 
-----------------------------------------   ----------------------------
 
-----------------------------------------   ----------------------------
 

    (iii) Subassemblies, components, and parts embedded within delivered 
items as specified in Attachment Number ------.
    (2) The concatenated unique item identifier and the component data 
elements of the DoD unique item identification or DoD recognized unique 
identification equivalent shall not change over the life of the item.
    (3) Data syntax and semantics of DoD unique item identification and 
DoD recognized unique identification equivalents. The Contractor shall 
ensure that--
    (i) The encoded data elements (except issuing agency code) of the 
unique item identifier are marked on the item using one of the following 
three types of data qualifiers, as determined by the Contractor:
    (A) Data Identifiers (DIs) (Format 06) in accordance with ISO/IEC 
International Standard 15418, Information Technology `` EAN/UCC 
Application Identifiers and ANSI MH 10 Data Identifiers and ANSI MH 10 
Data Identifiers and Maintenance.
    (B) Application Identifiers (AIs) (Format 05), in accordance with 
ISO/IEC International Standard 15418, Information Technology `` EAN/UCC 
Application Identifiers and ANSI MH 10 Data Identifiers and ANSI MH 10 
Data Identifiers and Maintenance.
    (C) Text Element Identifiers (TEIs), in accordance with the DoD 
collaborative solution ``DD'' format for use until the solution is 
approved by ISO/IEC JTC1 SC 31. The ``DD'' format is described in 
Appendix D of the DoD Guide to Uniquely Identifying Items, available at 
http://www.acq.osd.mil/dpap/UID/guides.htm; and
    (ii) The encoded data elements of the unique item identifier conform 
to ISO/IEC International Standard 15434, Information Technology--Syntax 
for High Capacity Automatic Data Capture Media.
    (4) DoD unique item identification and DoD recognized unique 
identification equivalents. (i) The Contractor shall--
    (A) Determine whether to serialize within the enterprise identifier 
or serialize within the part, lot, or batch number; and
    (B) Place the data elements of the unique item identifier 
(enterprise identifier; serial number; and for serialization within the 
part, lot, or batch number only; original part, lot, or batch number) on 
items requiring marking by paragraph (c)(1) of this clause, based on the 
criteria provided in the version of MIL-STD-130, Identification Marking 
of U.S. Military Property, cited in the contract Schedule.
    (ii) The issuing agency code--
    (A) Shall not be placed on the item; and
    (B) Shall be derived from the data qualifier for the enterprise 
identifier.
    (d) For each item that requires unique item identification under 
paragraph (c)(1)(i) or (ii) of this clause, in addition to the 
information provided as part of the Material Inspection and Receiving 
Report specified elsewhere in this contract, the Contractor shall report 
at the time of delivery, either as part of, or associated with, the 
Material Inspection and Receiving Report, the following information:
    (1) Concatenated unique item identifier; or DoD recognized unique 
identification equivalent.
    (2) Unique item identifier type.
    (3) Issuing agency code (if concatenated unique item identifier is 
used).
    (4) Enterprise identifier (if concatenated unique item identifier is 
used).
    (5) Original part number.
    (6) Lot or batch number.
    (7) Current part number (if not the same as the original part 
number).
    (8) Current part number effective date.
    (9) Serial number.
    (10) Government's unit acquisition cost.
    (e) For embedded DoD serially managed subassemblies, components, and 
parts that require unique item identification under paragraph 
(c)(1)(iii) of this clause, the Contractor shall report at the time of 
delivery, either as part of, or associated with the Material Inspection 
and Receiving Report specified elsewhere in this contract, the following 
information:

[[Page 328]]

    (1) Concatenated unique item identifier or DoD recognized unique 
identification equivalent of the parent item delivered under a contract 
line, subline, or exhibit line item that contains the embedded 
subassembly, component, or part.
    (2) Concatenated unique item identifier or DoD recognized unique 
identification equivalent of the embedded subassembly, component, or 
part.
    (3) Unique item identifier type.**
    (4) Issuing agency code (if concatenated unique item identifier is 
used).**
    (5) Enterprise identifier (if concatenated unique item identifier is 
used).**
    (6) Original part number.**
    (7) Lot or batch number.**
    (8) Current part number (if not the same as the original part 
number.**
    (9) Current part number effective date.**
    (10) Serial number.**
    (11) Unit of measure.
    (12) Description.
    ** Once per item.
    (f) The Contractor shall submit the information required by 
paragraphs (d) and (e) of this clause in accordance with the data 
submission procedures at http://www.acq.osd.mil/dpap/UID/
DataSubmission.htm.
    (g) Subcontracts. If paragraph (c)(1) of this clause applies, the 
Contractor shall include this clause, including this paragraph (g), in 
all subcontracts issued under this contract.

                             (End of clause)

                         Alternate I (APR 2005)

    As prescribed in 211.274-4(c) delete paragraphs (c), (d), (e), (f), 
and (g) of the basic clause, and add the following paragraphs (c) and 
(d) to the basic clause.
    (c) For each item delivered under a contract line, subline, or 
exhibit line item under paragraph (b) of this clause, in addition to the 
information provided as part of the Material Inspection and Receiving 
Report specified elsewhere in this contract, the Contractor shall report 
the Government's unit acquisition cost.
    (d) The Contractor shall submit the information required by 
paragraph (c) of this clause in accordance with the data submission 
procedures at http://www.acq.osd.mil/dpap/UID/DataSubmission.htm.

[70 FR 20836, Apr. 22, 2005, as amended at 70 FR 35549, June 21, 2005]



Sec. 252.211-7004  Alternate preservation, packaging, and packing.

    As prescribed in 211.272, use the following provision:

        Alternate Preservation, Packaging, and Packing (DEC 1991)

    (a) The Offeror may submit two unit prices for each item--one based 
on use of the military preservation, packaging, or packing requirements 
of the solicitation; and an alternate based on use of commercial or 
industrial preservation, packaging, or packing of equal or better 
protection than the military.
    (b) If the Offeror submits two unit prices, the following 
information, as a minimum, shall be submitted with the offer to allow 
evaluation of the alternate--
    (1) The per unit/item cost of commercial or industrial preservation, 
packaging, and packing;
    (2) The per unit/item cost of military preservation, packaging, and 
packing;
    (3) The description of commercial or industrial preservation, 
packaging, and packing procedures, including material specifications, 
when applicable, to include--
    (i) Method of preservation;
    (ii) Quantity per unit package;
    (iii) Cleaning/drying treatment;
    (iv) Preservation treatment;
    (v) Wrapping materials;
    (vi) Cushioning/dunnage material;
    (vii) Thickness of cushioning;
    (viii) Unit container;
    (ix) Unit package gross weight and dimensions;
    (x) Packing; and
    (xi) Packing gross weight and dimensions; and
    (4) Item characteristics, to include--
    (i) Material and finish;
    (ii) Net weight;
    (iii) Net dimensions; and
    (iv) Fragility.
    (c) If the Contracting Officer does not evaluate or accept the 
Offeror's proposed alternate commercial or industrial preservation, 
packaging, or packing, the Offeror agrees to preserve, package, or pack 
in accordance with the specified military requirements.

                           (End of provision)

[56 FR 36479, July 31, 1991. Redesignated and amended at 60 FR 61600, 
Nov. 30, 1995]



Sec. 252.211-7005  Substitutions for military or Federal specifications 
          and standards.

    As prescribed in 211.273-4, use the following clause:

Substitutions For Military or Federal Specifications and Standards (NOV 
                                  2005)

    (a) Definition. ``SPI process,'' as used in this clause, means a 
management or manufacturing process that has been accepted previously by 
the Department of Defense under

[[Page 329]]

the Single Process Initiative (SPI) for use in lieu of a specific 
military or Federal specification or standard at specific facilities. 
Under SPI, these processes are reviewed and accepted by a Management 
Council, which includes representatives of the Contractor, the Defense 
Contract Management Agency, the Defense Contract Audit Agency, and the 
military departments.
    (b) Offerors are encouraged to propose SPI processes in lieu of 
military or Federal specifications and standards cited in the 
solicitation. A listing of SPI processes accepted at specific facilities 
is available via the Internet at http://guidebook.dcma.mil/20/
guidebook--process.htm (paragraph 4.2).
    (c) An offeror proposing to use an SPI process in lieu of military 
or Federal specifications or standards cited in the solicitation shall--
    (1) Identify the specific military or Federal specification or 
standard for which the SPI process has been accepted;
    (2) Identify each facility at which the offeror proposes to use the 
specific SPI process in lieu of military or Federal specifications or 
standards cited in the solicitation;
    (3) Identify the contract line items, subline items, components, or 
elements affected by the SPI process; and
    (4) If the proposed SPI process has been accepted at the facility at 
which it is proposed for use, but is not yet listed at the Internet site 
specified in paragraph (b) of this clause, submit documentation of 
Department of Defense acceptance of the SPI process.
    (d) Absent a determination that an SPI process is not acceptable for 
this procurement, the Contractor shall use the following SPI processes 
in lieu of military or Federal specifications or standards:

(Offeror insert information for each SPI process)

SPI Process:____________________________________________________________

Facility:_______________________________________________________________

Military or Federal Specification or Standard:__________________________

Affected Contract Line Item Number, Subline Item Number, Component, or 
Element:________________________________________________________________

    (e) If a prospective offeror wishes to obtain, prior to the time 
specified for receipt of offers, verification that an SPI process is an 
acceptable replacement for military or Federal specifications or 
standards required by the solicitation, the prospective offeror--
    (1) May submit the information required by paragraph (d) of this 
clause to the Contracting Officer prior to submission of an offer; but
    (2) Must submit the information to the Contracting Officer at least 
10 working days prior to the date specified for receipt of offers.

                             (End of clause)

[64 FR 14399, Mar. 25, 1999; 64 FR 28875, May 27, 1999, as amended at 65 
FR 52953, Aug. 31, 2000; 66 FR 49861, Oct. 1, 2001; 68 FR 7440, Feb. 14, 
2003; 70 FR 67924, Nov. 9, 2005]



Sec. 252.211-7006  Radio Frequency Identification.

    As prescribed in 211.275-3, use the following clause:

                Radio Frequency Identification (MAY 2006)

    (a) Definitions. As used in this clause--
    Advance shipment notice means an electronic notification used to 
list the contents of a shipment of goods as well as additional 
information relating to the shipment, such as order information, product 
description, physical characteristics, type of packaging, marking, 
carrier information, and configuration of goods within the 
transportation equipment.
    Bulk commodities means the following commodities, when shipped in 
rail tank cars, tanker trucks, trailers, other bulk wheeled conveyances, 
or pipelines:
    (1) Sand.
    (2) Gravel.
    (3) Bulk liquids (water, chemicals, or petroleum products).
    (4) Ready-mix concrete or similar construction materials.
    (5) Coal or combustibles such as firewood.
    (6) Agricultural products such as seeds, grains, or animal feed.
    Case means either a MIL-STD-129 defined exterior container within a 
palletized unit load or a MIL-STD-129 defined individual shipping 
container.
    Electronic Product Code\TM\ (EPC) means an identification scheme for 
universally identifying physical objects via RFID tags and other means. 
The standardized EPC data consists of an EPC (or EPC identifier) that 
uniquely identifies an individual object, as well as an optional filter 
value when judged to be necessary to enable effective and efficient 
reading of the EPC tags. In addition to this standardized data, certain 
classes of EPC tags will allow user-defined data. The EPC tag data 
standards will define the length and position of this data, without 
defining its content.
    EPCglobal\TM\ means a joint venture between EAN International and 
the Uniform Code Council to establish and support the EPC network as the 
global standard for immediate, automatic, and accurate identification of 
any item in the supply chain of any company, in any industry, anywhere 
in the world.
    Exterior container means a MIL-STD-129 defined container, bundle, or 
assembly that is sufficient by reason of material, design, and

[[Page 330]]

construction to protect unit packs and intermediate containers and their 
contents during shipment and storage. It can be a unit pack or a 
container with a combination of unit packs or intermediate containers. 
An exterior container may or may not be used as a shipping container.
    Palletized unit load means a MIL-STD-129 defined quantity of items, 
packed or unpacked, arranged on a pallet in a specified manner and 
secured, strapped, or fastened on the pallet so that the whole 
palletized load is handled as a single unit. A palletized or skidded 
load is not considered to be a shipping container. A loaded 463L System 
pallet is not considered to be a palletized unit load. Refer to the 
Defense Transportation Regulation, DoD 4500.9-R, Part II, Chapter 203, 
for marking of 463L System pallets.
    Passive RFID tag means a tag that reflects energy from the reader/
interrogator or that receives and temporarily stores a small amount of 
energy from the reader/interrogator signal in order to generate the tag 
response.
    (1) Until September 30, 2006, the acceptable tags are--
    (i) EPC Class 0 passive RFID tags that meet the EPCglobal Class 0 
specification; and
    (ii) EPC Class 1 passive RFID tags that meet the EPCglobal Class 1 
specification. This includes both the Generation 1 and Generation 2 
Class 1 specifications.
    (2) Beginning October 1, 2006, the only acceptable tags are EPC 
Class 1 passive RFID tags that meet the EPCglobal Class 1 Generation 2 
specification. Class 0 and Class 1 Generation 1 tags will no longer be 
accepted after September 30, 2006.
    Radio Frequency Identification (RFID) means an automatic 
identification and data capture technology comprising one or more 
reader/interrogators and one or more radio frequency transponders in 
which data transfer is achieved by means of suitably modulated inductive 
or radiating electromagnetic carriers.
    Shipping container means a MIL-STD-129 defined exterior container 
that meets carrier regulations and is of sufficient strength, by reason 
of material, design, and construction, to be shipped safely without 
further packing (e.g., wooden boxes or crates, fiber and metal drums, 
and corrugated and solid fiberboard boxes).
    (b)(1) Except as provided in paragraph (b)(2) of this clause, the 
Contractor shall affix passive RFID tags, at the case and palletized 
unit load packaging levels, for shipments of items that--
    (i) Are in any of the following classes of supply, as defined in DoD 
4140.1-R, DoD Supply Chain Materiel Management Regulation, AP1.1.11:
    (A) Subclass of Class I--Packaged operational rations.
    (B) Class II--Clothing, individual equipment, tentage, 
organizational tool kits, hand tools, and administrative and 
housekeeping supplies and equipment.
    (C) Class IIIP--Packaged petroleum, lubricants, oils, preservatives, 
chemicals, and additives.
    (D) Class IV--Construction and barrier materials.
    (E) Class VI--Personal demand items (non-military sales items).
    (F) Subclass of Class VIII--Medical materials (excluding 
pharmaceuticals, biologicals, and reagents).
    (G) Class IX--Repair parts and components including kits, assemblies 
and subassemblies, reparable and consumable items required for 
maintenance support of all equipment, excluding medical-peculiar repair 
parts; and
    (ii) Are being shipped to any of the following locations:
    (A) Defense Distribution Depot, Susquehanna, PA: DoDAAC W25G1U or 
SW3124.
    (B) Defense Distribution Depot, San Joaquin, CA: DoDAAC W62G2T or 
SW3224.
    (C) Defense Distribution Depot, Albany, GA: DoDAAC SW3121.
    (D) Defense Distribution Depot, Anniston, AL: DoDAAC W31G1Z or 
SW3120.
    (E) Defense Distribution Depot, Barstow, CA: DoDAAC SW3215.
    (F) Defense Distribution Depot, Cherry Point, NC: DoDAAC SW3113.
    (G) Defense Distribution Depot, Columbus, OH: DoDAAC SW0700.
    (H) Defense Distribution Depot, Corpus Christi, TX: DoDAAC W45H08 or 
SW3222.
    (I) Defense Distribution Depot, Hill, UT: DoDAAC SW3210.
    (J) Defense Distribution Depot, Jacksonville, FL: DoDAAC SW3122.
    (K) Defense Distribution Depot, Oklahoma City, OK: DoDAAC SW3211.
    (L) Defense Distribution Depot, Norfolk, VA: DoDAAC SW3117.
    (M) Defense Distribution Depot, Puget Sound, WA: DoDAAC SW3216.
    (N) Defense Distribution Depot, Red River, TX: DoDAAC W45G19 or 
SW3227.
    (O) Defense Distribution Depot, Richmond, VA: DoDAAC SW0400.
    (P) Defense Distribution Depot, San Diego, CA: DoDAAC SW3218.
    (Q) Defense Distribution Depot, Tobyhanna, PA: DoDAAC W25G1W or 
SW3114.
    (R) Defense Distribution Depot, Warner Robins, GA: DoDAAC SW3119.
    (S) Air Mobility Command Terminal, Charleston Air Force Base, 
Charleston, SC: Air Terminal Identifier Code CHS.
    (T) Air Mobility Command Terminal, Naval Air Station, Norfolk, VA: 
Air Terminal Identifier Code NGU.

[[Page 331]]

    (U) Air Mobility Command Terminal, Travis Air Force Base, Fairfield, 
CA: Air Terminal Identifier Code SUU.
    (2) Bulk commodities are excluded from the requirements of paragraph 
(b)(1) of this clause.
    (c) The Contractor shall ensure that--
    (1) The data encoded on each passive RFID tag are unique (i.e., the 
binary number is never repeated on any and all contracts) and conforms 
to the requirements in paragraph (d) of this clause;
    (2) Each passive tag is readable; and
    (3) The passive tag is affixed at the appropriate location on the 
specific level of packaging, in accordance with MIL-STD-129 (Section 
4.9.2) tag placement specifications.
    (d) Data syntax and standards. The Contractor shall encode an 
approved RFID tag using the instructions provided in the most recent 
EPCTM Tag Data Standards document, available at http://
www.epcglobalinc.org/standards--technology/specifications.html.
    (1) If the Contractor is an EPCglobalTM subscriber and 
possesses a unique EPCTM company prefix, the Contractor may 
use any of the identity types and encoding instructions described in the 
most recent EPCTM Tag Data Standards document to encode tags.
    (2) If the Contractor chooses to employ the DoD Identity Type, the 
Contractor shall use its previously assigned Commercial and Government 
Entity (CAGE) Code and shall encode the tags in accordance with the tag 
identity type details located at http://www.acq.osd.mil/log/rfid/tag--
data.htm. If the Contractor uses a third party packaging house to encode 
its tags, the CAGE code of the third party packaging house is 
acceptable.
    (3) Regardless of the selected encoding scheme, the Contractor is 
responsible for ensuring that each tag contains a globally unique 
identifier.
    (e) Receiving report. The Contractor shall electronically submit 
advance shipment notice(s) with the RFID tag identification (specified 
in paragraph (d) of this clause) in advance of the shipment in 
accordance with the procedures at http://www.acq.osd.mil/log/rfid/
advance--shipment--ntc.htm.

                             (End of Clause)

[70 FR 53968, Sept. 13, 2005, as amended at 71 FR 29086, May 19, 2006]



Sec. 252.212-7000  Offeror representations and certifications--
          Commercial items.

    As prescribed in 212.301(f)(ii), use the following provision:

 Offeror Representations and Certifications--Commercial Items (JUN 2005)

    (a) Definitions. As used in this clause--
    (1) Foreign person means any person other than a United States 
person as defined in Section 16(2) of the Export Administration Act of 
1979 (50 U.S.C. App. Sec. 2415).
    (2) United States means the 50 States, the District of Columbia, 
outlying areas, and the outer Continental Shelf as defined in 43 U.S.C. 
1331.
    (3) United States person is defined in Section 16(2) of the Export 
Administration Act of 1979 and means any United States resident or 
national (other than an individual resident outside the United States 
and employed by other than a United States person), any domestic concern 
(including any permanent domestic establishment of any foreign concern), 
and any foreign subsidiary or affiliate (including any permanent foreign 
establishment) of any domestic concern which is controlled in fact by 
such domestic concern, as determined under regulations of the President.
    (b) Certification. By submitting this offer, the Offeror, if a 
foreign person, company or entity, certifies that it--
    (1) Does not comply with the Secondary Arab Boycott of Israel; and
    (2) Is not taking or knowingly agreeing to take any action, with 
respect to the Secondary Boycott of Israel by Arab countries, which 50 
U.S.C. App. Sec. 2407(a) prohibits a United States person from taking.
    (c) Representation of Extent of Transportation by Sea. (This 
representation does not apply to solicitations for the direct purchase 
of ocean transportation services).
    (1) The Offeror shall indicate by checking the appropriate blank in 
paragraph (c)(2) of this provision whether transportation of supplies by 
sea is anticipated under the resultant contract. The term ``supplies'' 
is defined in the Transportation of Supplies by Sea clause of this 
solicitation.
    (2) Representation. The Offeror represents that it--
    ------ Does anticipate that supplies will be transported by sea in 
the performance of any contract or subcontract resulting from this 
solicitation.
    ------ Does not anticipate that supplies will be transported by sea 
in the performance of any contract or subcontract resulting from this 
solicitation.
    (3) Any contract resulting from this solicitation will include the 
Transportation of Supplies by Sea clause. If the Offeror represents that 
it will not use ocean transportation, the resulting contract will also 
include the Defense Federal Acquisition Regulation Supplement clause at 
252.247-7024, Notification of Transportation of Supplies by Sea.

[[Page 332]]

                           (End of provision)

[60 FR 61600, Nov. 30, 1995, as amended at 61 FR 50455, Sept. 26, 1996; 
70 FR 35546, June 21, 2005]



Sec. 252.212-7001  Contract terms and conditions required to implement 
          statutes or Executive orders applicable to Defense 
          acquisitions of commercial items.

    As prescribed in 212.301(f)(iii), use the following clause:

    Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders Applicable to Defense Acquisitions of Commercial Items 
                               (SEP 2006)

    (a) The Contractor agrees to comply with the following Federal 
Acquisition Regulation (FAR) clause which, if checked, is included in 
this contract by reference to implement a provision of law applicable to 
acquisitions of commercial items or components.
    ----52.203-3, Gratuities (APR 1984) (10 U.S.C. 2207).
    (b) The Contractor agrees to comply with any clause that is checked 
on the following list of Defense FAR Supplement clauses which, if 
checked, is included in this contract by reference to implement 
provisions of law or Executive orders applicable to acquisitions of 
commercial items or components.
    (1) ----252.205-7000, Provision of Information to Cooperative 
Agreement Holders (DEC 1991) (10 U.S.C. 2416).
    (2) ----252.219-7003, Small, Small Disadvantaged and Women-Owned 
Small Business Subcontracting Plan (DoD Contracts) (APR 1996) (15 U.S.C. 
637).
    (3) ----252.219-7004, Small, Small Disadvantaged and Women-Owned 
Small Business Subcontracting Plan (Test Program) (JUN 1997) (15 U.S.C. 
637 note).
    (4) ----252.225-7001, Buy American Act and Balance of Payments 
Program (JUN 2005) (41 U.S.C. 10a-10d, E.O. 10582).
    (5) ----252.225-7012, Preference for Certain Domestic Commodities 
(JUN 2004) (10 U.S.C. 2533a).
    (6) ----252.225-7014, Preference for Domestic Specialty Metals (JUN 
2005) (10 U.S.C. 2533a).
    (7) ----252.225-7015, Restriction on Acquisition of Hand or 
Measuring Tools (JUN 2005) (10 U.S.C. 2533a).
    (8) ----252.225-7016, Restriction on Acquisition of Ball and Roller 
Bearings (MAR 2006) (Section 8065 of Public Law 107-117 and the same 
restriction in subsequent DoD appropriations acts).
    (9) ----252.225-7021, Trade Agreements (JUN 2006) (19 U.S.C. 2501-
2518 and 19 U.S.C. 3301 note).
    (10) ----252.225-7027, Restriction on Contingent Fees for Foreign 
Military Sales (APR 2003) (22 U.S.C. 2779).
    (11) ----252.225-7028, Exclusionary Policies and Practices of 
Foreign Governments (APR 2003) (22 U.S.C. 2755).
    (12)(i) ----252.225-7036, Buy American Act--Free Trade Agreements--
Balance of Payments Program (JUN 2006) (41 U.S.C. 10a-10d and 19 U.S.C. 
3301 note).
    (ii) Alternate I (JAN 2005) of 252.225-7036.
    (13) ----252.225-7038, Restriction on Acquisition of Air Circuit 
Breakers (JUN 2005) (10 U.S.C. 2534(a)(3)).
    (14) ----252.226-7001, Utilization of Indian Organizations, Indian-
Owned Economic Enterprises, and Native Hawaiian Small Business Concerns 
(SEP 2004) (Section 8021 of Pub. L. 107-248 and similar sections in 
subsequent DoD appropriations acts).
    (15) ----252.227-7015, Technical Data--Commercial Items (NOV 1995) 
(10 U.S.C. 2320).
    (16) ----252.227-7037, Validation of Restrictive Markings on 
Technical Data (SEP 1999) (10 U.S.C. 2321).
    (17) ----252.232-7003, Electronic Submission of Payment Requests 
(MAY 2006) (10 U.S.C. 2227).
    (18) ----252.237-7019, Training for Contractor Personnel Interacting 
with Detainees (SEP 2006) (Section 1092 of Public Law 108-375).
    (19) ----252.243-7002, Requests for Equitable Adjustment (MAR 1998) 
(10 U.S.C. 2410).
    (20)(i) ----252.247-7023, Transportation of Supplies by Sea (MAY 
2002) (10 U.S.C. 2631).
    (ii) ----Alternate I (MAR 2000) of 252.247-7023.
    (iii) ----Alternate II (MAR 2000) of 252.247-7023.
    (iv) ----Alternate III (MAY 2002) of 252.247-7023.
    (21) ----252.247-7024, Notification of Transportation of Supplies by 
Sea (MAR 2000) (10 U.S.C. 2631).
    (c) In addition to the clauses listed in paragraph (e) of the 
Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items clause of this contract (FAR 52.212-
5), the Contractor shall include the terms of the following clauses, if 
applicable, in subcontracts for commercial items or commercial 
components, awarded at any tier under this contract:
    (1) 252.225-7014, Preference for Domestic Specialty Metals, 
Alternate I (APR 2003) (10 U.S.C. 2533a).
    (2) 252.237-7019, Training for Contractor Personnel Interacting with 
Detainees (SEP 2006) (Section 1092 of Public Law 108-375).
    (3) 252.247-7023, Transportation of Supplies by Sea (MAY 2002) (10 
U.S.C. 2631).
    (4) 252.247-7024, Notification of Transportation of Supplies by Sea 
(MAR 2000) (10 U.S.C. 2631).


[[Page 333]]



                             (End of clause)

[71 FR 39009, July 11, 2006, as amended at 71 FR 53049, Sept. 8, 2006]



Sec. 252.215-7000  Pricing adjustments.

    As prescribed in 215.408(1), use the following clause:

                     Pricing Adjustments (DEC 1991)

    The term ``pricing adjustment,'' as used in paragraph (a) of the 
clauses entitled ``Price Reduction for Defective Cost or Pricing Data--
Modifications,'' ``Subcontractor Cost or Pricing Data,'' and 
``Subcontractor Cost or Pricing Data--Modifications,'' means the 
aggregate increases and/or decreases in cost plus applicable profits.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 40473, July 29, 1997; 
63 FR 55052, Oct. 14, 1998]



Sec. 252.215-7001  [Reserved]



Sec. 252.215-7002  Cost estimating system requirements.

    As prescribed in 215.408(2), use the following clause:

             Cost Estimating System Requirements (OCT 1998)

    (a) Definition.
    Estimating system means the Contractor's policies, procedures, and 
practices for generating estimates of costs and other data included in 
proposals submitted to customers in the expectation of receiving 
contract awards. Estimating system includes the Contractor's--
    (1) Organizational structure;
    (2) Established lines of authority, duties, and responsibilities;
    (3) Internal controls and managerial reviews;
    (4) Flow of work, coordination, and communication; and
    (5) Estimating methods, techniques, accumulation of historical 
costs, and other analyses used to generate cost estimates.
    (b) General. (1) The Contractor shall establish, maintain, and 
comply with an estimating system that is consistently applied and 
produces reliable, verifiable, supportable, and documented cost 
estimates that are an acceptable basis for negotiation of fair and 
reasonable prices.
    (2) The system should be--
    (i) Consistent and integrated with the Contractor's related 
management systems; and
    (ii) Subject to applicable financial control systems.
    (c) Applicability. Paragraphs (d) and (e) of this clause apply if 
the Contractor is a large business and either--
    (1) In its fiscal year preceding award of this contract, received 
Department of Defense (DoD) prime contracts or subcontracts, totaling 
$50 million or more for which cost or pricing data were required; or
    (2) In its fiscal year preceding award of this contract--
    (i) Received DoD prime contracts or subcontracts totaling $10 
million or more (but less than $50 million) for which cost or pricing 
data were required; and
    (ii) Was notified in writing by the Contracting Officer that 
paragraphs (d) and (e) of this clause apply.
    (d) System requirements. (1) The Contractor shall disclose its 
estimating system to the Administrative Contracting Officer (ACO) in 
writing. If the Contractor wishes the Government to protect the 
information as privileged or confidential, the Contractor must mark the 
documents with the appropriate legends before submission.
    (2) An estimating system disclosure is acceptable when the 
Contractor has provided the ACO with documentation that--
    (i) Accurately describes those policies, procedures, and practices 
that the Contractor currently uses in preparing cost proposals; and
    (ii) Provides sufficient detail for the Government to reasonably 
make an informed judgment regarding the acceptability of the 
Contractor's estimating practices.
    (3) The Contractor shall--
    (i) Comply with its disclosed estimating system; and
    (ii) Disclose significant changes to the cost estimating system to 
the ACO on a timely basis.
    (e) Estimating system deficiencies. (1) The Contractor shall respond 
to a written report from the Government that identifies deficiencies in 
the Contractor's estimating system as follows:
    (i) If the Contractor agrees with the report findings and 
recommendations, the Contractor shall--
    (A) Within 30 days, state its agreement in writing; and
    (B) Within 60 days, correct the deficiencies or submit a corrective 
action plan showing proposed milestones and actions leading to 
elimination of the deficiencies.
    (ii) If the Contractor disagrees with the report, the Contractor 
shall, within 30 days, state its rationale for disagreeing.
    (2) The ACO will evaluate the Contractor's response and notify the 
Contractor of the determination concerning remaining deficiencies and/or 
the adequacy of any proposed or completed corrective action.

[[Page 334]]

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 40473, July 29, 1997; 
63 FR 55052, Oct. 14, 1998]



Sec. 252.216-7000  Economic price adjustment--basic steel, aluminum, 
          brass, bronze, or copper mill products.

    As prescribed in 216.203-4-70(a), use the following clause:

  Economic Price Adjustment--Basic Steel, Aluminum, Brass, Bronze, or 
                     Copper Mill Products (JUL 1997)

    (a) Definitions. As used in this clause--
    Established price means a price which is an established catalog or 
market price for a commercial item sold in substantial quantities to the 
general public.
    Unit price excludes any part of the price which reflects 
requirements for preservation, packaging, and packing beyond standard 
commercial practice.
    (b) The Contractor warrants that the unit price stated for (Identify 
the item) is not in excess of the Contractor's established price in 
effect on the date set for opening of bids (or the contract date if this 
is a negotiated contract) for like quantities of the same item. This 
price is the net price after applying any applicable standard trade 
discounts offered by the Contractor from its catalog, list, or schedule 
price.
    (c) The Contractor shall promptly notify the Contracting Officer of 
the amount and effective date of each decrease in any established price.
    (1) Each corresponding contract unit price shall be decreased by the 
same percentage that the established price is decreased.
    (2) This decrease shall apply to items delivered on or after the 
effective date of the decrease in the Contractor's established price.
    (3) This contract shall be modified accordingly.
    (d) If the Contractor's established price is increased after the 
date set for opening of bids (or the contract date if this is a 
negotiated contract), upon the Contractor's written request to the 
Contracting Officer, the corresponding contract unit price shall be 
increased by the same percentage that the established price is 
increased, and this contract shall be modified accordingly, provided--
    (1) The aggregate of the increases in any contract unit price under 
this contract shall not exceed 10 percent of the original contract unit 
price;
    (2) The increased contract unit price shall be effective on the 
effective date of the increase in the applicable established price if 
the Contractor's written request is received by the Contracting Officer 
within ten days of the change. If it is not, the effective date of the 
increased unit price shall be the date of receipt of the request by the 
Contracting Officer; and
    (3) The increased contract unit price shall not apply to quantities 
scheduled for delivery before the effective date of the increased 
contract unit price unless the Contractor's failure to deliver before 
that date results from causes beyond the control and without the fault 
or negligence of the Contractor, within the meaning of the Default 
clause of this contract.
    (4) The Contracting Officer shall not execute a modification 
incorporating an increase in a contract unit price under this clause 
until the increase is verified.
    (e) Within 30 days after receipt of the Contractor's written 
request, the Contracting Officer may cancel, without liability to either 
party, any portion of the contract affected by the requested increase 
and not delivered at the time of such cancellation, except as follows--
    (1) The Contractor may, after that time, deliver any items that were 
completed or in the process of manufacture at the time of receipt of the 
cancellation notice, provided the Contractor notifies the Contracting 
Officer of such items within 10 days after the Contractor receives the 
cancellation notice.
    (2) The Government shall pay for those items at the contract unit 
price increased to the extent provided by paragraph (d) of this clause.
    (3) Any standard steel supply item shall be deemed to be in the 
process of manufacture when the steel for that item is in the state of 
processing after the beginning of the furnace melt.
    (f) Pending any cancellation of this contract under paragraph (e) of 
this clause, or if there is no cancellation, the Contractor shall 
continue deliveries according to the delivery schedule of the contract. 
The Contractor shall be paid for those deliveries at the contract unit 
price increased to the extent provided by paragraph (d) of this clause.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2614, Jan. 17, 1997; 62 
FR 40473, July 29, 1997]



Sec. 252.216-7001  Economic price adjustment--nonstandard steel items.

    As prescribed in 216.203-4-70(b), use the following clause:

      Economic Price Adjustment--Nonstandard Steel Items (JUL 1997)

    (a) Definitions. As used in this clause--
    Base labor index means the average of the labor indices for the 
three months which consist of the month of bid opening (or offer

[[Page 335]]

submission) and the months immediately preceding and following that 
month.
    Base steel index means the Contractor's established price (see note 
6) including all applicable extras of $-------- per ---------- (see note 
1) for ---------- (see note 2) on the date set for bid opening (or the 
date of submission of the offer).
    Current labor index means the average of the labor indices for the 
month in which delivery of supplies is required to be made and the month 
preceding.
    Current steel index means the Contractor's established price (see 
note 6) for that item, including all applicable extras in effect ------
-- days (see note 3) prior to the first day of the month in which 
delivery is required.
    Established price is--
    (1) A price which is an established catalog or market price of a 
commercial item sold in substantial quantities to the general public; 
and
    (2) The net price after applying any applicable standard trade 
discounts offered by the Contractor from its catalog, list, or schedule 
price. (But see Note 6.)
    Labor index means the average straight time hourly earnings of the 
Contractor's employees in the -------- shop of the Contractor's --------
-- plant (see note 4) for any particular month.
    Month means calendar month. However, if the Contractor's accounting 
period does not coincide with the calendar month, then that accounting 
period shall be used in lieu of month.
    (b) Each contract unit price shall be subject to revision, under the 
terms of this clause, to reflect changes in the cost of labor and steel. 
For purpose of this price revision, the proportion of the contract unit 
price attributable to costs of labor not otherwise included in the price 
of the steel item identified under the base steel index definition in 
paragraph (a) shall be ------ percent, and the proportion of the 
contract unit price attributable to the cost of steel shall be ------ 
percent. (See note 5.)
    (c)(1) Unless otherwise specified in this contract, the labor index 
shall be computed by dividing the total straight time earnings of the 
Contractor's employees in the shop identified in paragraph (a) for any 
given month by the total number of straight time hours worked by those 
employees in that month.
    (2) Any revision in a contract unit price to reflect changes in the 
cost of labor shall be computed solely by reference to the ``base labor 
index'' and the ``current labor index.''
    (d) Any revision in a contract unit price to reflect changes in the 
cost of steel shall be computed solely by reference to the ``base steel 
index'' and the ``current steel index.''
    (e)(1) Each contract unit price shall be revised for each month in 
which delivery of supplies is required to be made.
    (2) The revised contract unit price shall apply to the deliveries of 
those quantities required to be made in that month regardless of when 
actual delivery is made.
    (3) Each revised contract unit price shall be computed by adding--
    (i) The adjusted cost of labor (obtained by multiplying ------ 
percent of the contract unit price by a fraction, of which the numerator 
shall be the current labor index and the denominator shall be the base 
labor index);
    (ii) The adjusted cost of steel (obtained by multiplying ------ 
percent of the contract unit price by a fraction, of which the numerator 
shall be the current steel index and the denominator shall be the base 
steel index); and
    (iii) The amount equal to ------ percent of the original contract 
unit price (representing that portion of the unit price which relates 
neither to the cost of labor nor the cost of steel, and which is 
therefore not subject to revision (see note 5)).
    (4) The aggregate of the increases in any contract unit price under 
this contract shall not exceed ten percent of the original contract unit 
price.
    (5) Computations shall be made to the nearest one-hundredth of one 
cent.
    (f)(1) Pending any revisions of the contract unit prices, the 
Contractor shall be paid the contract unit price for deliveries made.
    (2) Within 30 days after final delivery (or such other period as may 
be authorized by the Contracting Officer), the Contractor shall furnish 
a statement identifying the correctness of--
    (i) The average straight time hourly earnings of the Contractor's 
employees in the shop identified in paragraph (a) that are relevant to 
the computations of the base labor index and the current labor index; 
and
    (ii) The Contractor's established prices (see note 6), including all 
applicable extras for like quantities of the item that are relevant to 
the computation of the base steel index and the current steel index.
    (3) Upon request of the Contracting Officer, the Contractor shall 
make available all records used in the computation of the labor indices.
    (4) Upon receipt of the statement, the Contracting Officer will 
compute the revised contract unit prices and modify the contract 
accordingly. No modification to this contract will be made pursuant to 
this clause until the Contracting Officer has verified the revised 
established price (see note 6).
    (g)(1) In the event any item of this contract is subject to a total 
or partial termination for convenience, the month in which the 
Contractor receives notice of the termination, if prior to the month in 
which delivery is required, shall be considered the

[[Page 336]]

month in which delivery of the terminated item is required for the 
purposes of determining the current labor and steel indices under 
paragraphs (c) and (d).
    (2) For any item which is not terminated for convenience, the month 
in which delivery is required under the contract shall continue to apply 
for determining those indices with respect to the quantity of the non-
terminated item.
    (3) If this contract is terminated for default, any price revision 
shall be limited to the quantity of the item which has been delivered by 
the Contractor and accepted by the Government prior to receipt by the 
Contractor of the notice of termination.
    (h) If the Contractor's failure to make delivery of any required 
quantity arises out of causes beyond the control and without the fault 
or negligence of the Contractor, within the meaning of the clause of 
this contract entitled ``Default,'' the quantity not delivered shall be 
delivered as promptly as possible after the cessation of the cause of 
the failure, and the delivery schedule set forth in this contract shall 
be amended accordingly.
    Notes:
    1 Offeror insert the unit price and unit measure of the standard 
steel mill item to be used in the manufacture of the contract item.
    2 Offeror identify the standard steel mill item to be used in the 
manufacture of the contract item.
    3 Offeror insert best estimate of the number of days required for 
processing the standard steel mill item in the shop identified under the 
labor index definition.
    4 Offeror identify the shop and plant in which the standard steel 
mill item identified under the base steel index definition will be 
finally fabricated or processed into the contract item.
    5 Offeror insert the same percentage figures for the corresponding 
blanks in paragraphs (b), (e)(3)(i), and (e)(3)(ii). In paragraph 
(e)(3)(iii), insert the percentage representing the difference between 
the sum of the percentages inserted in paragraph (b) and 100 percent.
    6 In negotiated acquisitions of nonstandard steel items, when there 
is no established price or when it is not desirable to use this price, 
this paragraph may refer to another appropriate price basis, e.g., an 
established interplant price.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2614, Jan. 17, 1997; 62 
FR 40473, July 29, 1997]



Sec. 252.216-7002  [Reserved]



Sec. 252.216-7003  Economic price adjustment--wage rates or material 
          prices controlled by a foreign government.

    As prescribed in 216.203-4-70(c), use the following clause:

Economic Price Adjustment--Wage Rates or Material Prices Controlled by a 
                      Foreign Government (JUN 1997)

    (a) The Contractor represents that the prices set forth in this 
contract--
    (1) Are based on the wage rate(s) or material price(s) established 
and controlled by the Government of--------(Offeror insert name of host 
country); and
    (2) Do not include contingency allowances to pay for possible 
increases in wage rates or material prices.
    (b) If wage rates or material prices are revised by the government 
named in paragraph (a) of this clause, the Contracting Officer shall 
make an equitable adjustment in the contract price and shall modify the 
contract to the extent that the Contractor's actual costs of performing 
this contract are increased or decreased, as a direct result of the 
revision, subject to the following:
    (1) For increases in established wage rates or material prices, the 
increase in contract unit price(s) shall be effective on the same date 
that the government named in paragraph (a) of this clause increased the 
applicable wage rate(s) or material price(s), but only if the 
Contracting Officer receives the Contractor's written request for 
contract adjustment within 10 days of the change. If the Contractor's 
request is received later, the effective date shall be the date that the 
Contracting Officer received the Contractor's request.
    (2) For decreases in established wage rates or material prices, the 
decrease in contract unit price(s) shall be effective on the same date 
that the government named in paragraph (a) of this clause decreased the 
applicable wage rate(s) or material price(s). The decrease in contract 
unit price(s) shall apply to all items delivered on and after the 
effective date of the government's rate or price decrease.
    (c) No modification changing the contract unit price(s) shall be 
executed until the Contracting Officer has verified the applicable 
change in the rates or prices set by the government named in paragraph 
(a) of this clause. The Contractor shall make available its books and 
records that support a requested change in contract price.
    (d) Failure to agree to any adjustment shall be a dispute under the 
Disputes clause of this contract.

[[Page 337]]

                             (End of clause)

[62 FR 34128, June 24, 1997]



Sec. 252.217-7000  Exercise of option to fulfill foreign military sales 
          commitments.

    As prescribed in 217.208-70(a), use the following clause:

 Exercise of Option To Fulfill Foreign Military Sales Commitments (DEC 
                                  1991)

    (a) The Government may exercise the option(s) of this contract to 
fulfill foreign military sales commitments.
    (b) The foreign military sales commitments are for:
________________________________________________________________________
(Insert name of country, or To Be Determined)
________________________________________________________________________
(Insert applicable CLIN)

                             (End of clause)

    Alternate I (DEC 1991). As prescribed in 217.208-70(a)(1), 
substitute the following paragraph (b) for paragraph (b) of the basic 
clause:

    (b) On the date the option is exercised, the Government shall 
identify the foreign country for the purpose of negotiating any 
equitable adjustment attributable to foreign military sales. Failure to 
agree on an equitable adjustment shall be treated as a dispute under the 
Disputes clause of this contract.



Sec. 252.217-7001  Surge option.

    As prescribed in 217.208-70(b), use the following clause:

                         Surge Option (AUG 1992)

    (a) General. The Government has the option to--
    (1) Increase the quantity of supplies or services called for under 
this contract by no more than ------ percent; and/or
    (2) Accelerate the rate of delivery called for under this contract, 
at a price or cost established before contract award or to be 
established by negotiation as provided in this clause.
    (b) Schedule. (1) When the Production Surge Plan (DI-MGMT-80969) is 
included in the contract, the option delivery schedule shall be the 
production rate provided with the Plan. If the Plan was negotiated 
before contract award, then the negotiated schedule shall be used.
    (2) If there is no Production Surge Plan in the contract, the 
Contractor shall, within 30 days from the date of award, furnish the 
Contracting Officer a delivery schedule showing the maximum sustainable 
rate of delivery for items in this contract. This delivery schedule 
shall provide acceleration by month up to the maximum sustainable rate 
of delivery achievable within the Contractor's existing facilities, 
equipment, and subcontracting structure.
    (3) The Contractor shall not revise the option delivery schedule 
without approval from the Contracting Officer.
    (c) Exercise of option. (1) The Contracting Officer may exercise 
this option at any time before acceptance by the Government of the final 
scheduled delivery.
    (2) The Contracting Officer will provide a preliminary oral or 
written notice to the Contractor stating the quantities to be added or 
accelerated under the terms of this clause, followed by a contract 
modification incorporating the transmitted information and instructions. 
The notice and modification will establish a not-to-exceed price equal 
to the highest contract unit price or cost of the added or accelerated 
items as of the date of the notice.
    (3) The Contractor will not be required to deliver at a rate greater 
than the maximum sustainable delivery rate under paragraph (b)(2) of 
this clause, nor will the exercise of this option extend delivery more 
than 24 months beyond the scheduled final delivery.
    (d) Price negotiation. (1) Unless the option cost or price was 
previously agreed upon, the Contractor shall, within 30 days from the 
date of option exercise, submit to the Contracting Officer a cost or 
price proposal (including a cost breakdown) for the added or accelerated 
items.
    (2) Failure to agree on a cost or price in negotiations resulting 
from the exercise of this option shall constitute a dispute concerning a 
question of fact within the meaning of the Disputes clause of this 
contract. However, nothing in this clause shall excuse the Contractor 
from proceeding with the performance of the contract, as modified, while 
any resulting claim is being settled.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 57 FR 42633, Sept. 15, 1992]



Sec. 252.217-7002  Offering property for exchange.

    As prescribed in 217.7005, use the following provision:

                Offering Property for Exchange (DEC 1991)

    (a) The property described in item number --------, is being offered 
in accordance with the exchange provisions of section 201(c) of the 
Federal Property and Administrative Services Act of 1949, 63 Stat. 384 
(40 U.S.C. 481(c)).

[[Page 338]]

    (b) The property is located at (insert address). Offerors may 
inspect the property during the period (insert beginning and ending 
dates and insert hours during day).

                           (End of provision)



Sec. 252.217-7003  Changes.

    As prescribed in 217.7104(a), use the following clause:

                           Changes (DEC 1991)

    (a) The Contracting Officer may, at any time and without notice to 
the sureties, by written change order, make changes within the general 
scope of any job order issued under the Master Agreement in--
    (1) Drawings, designs, plans, and specifications;
    (2) Work itemized;
    (3) Place of performance of the work;
    (4) Time of commencement or completion of the work; and
    (5) Any other requirement of the job order.
    (b) If a change causes an increase or decrease in the cost of, or 
time required for, performance of the job order, whether or not changed 
by the order, the Contracting Officer shall make an equitable adjustment 
in the price or date of completion, or both, and shall modify the job 
order in writing.
    (1) Within ten days after the Contractor receives notification of 
the change, the Contractor shall submit to the Contracting Officer a 
request for price adjustment, together with a written estimate of the 
increased cost.
    (2) The Contracting Officer may grant an extension of this period if 
the Contractor requests it within the ten day period.
    (3) If the circumstances justify it, the Contracting Officer may 
accept and grant a request for equitable adjustment at any later time 
prior to final payment under the job order, except that the Contractor 
may not receive profit on a payment under a late request.
    (c) If the Contractor includes in its claim the cost of property 
made obsolete or excess as a result of a change, the Contracting Officer 
shall have the right to prescribe the manner of disposition of that 
property.
    (d) Failure to agree to any adjustment shall be a dispute within the 
meaning of the Disputes clause.
    (e) Nothing in this clause shall excuse the Contractor from 
proceeding with the job order as changed.

                             (End of clause)



Sec. 252.217-7004  Job orders and compensation.

    As prescribed in 217.7104(a), use the following clause:

                 Job Orders and Compensation (MAY 2006)

    (a) The Contracting Officer shall solicit bids or proposals and make 
award of job orders. The issuance of a job order signed by the 
Contracting Officer constitutes award. The job order shall incorporate 
the terms and conditions of the Master Agreement.
    (b) Whenever the Contracting Officer determines that a vessel, its 
cargo or stores, would be endangered by delay, or whenever the 
Contracting Officer determines that military necessity requires that 
immediate work on a vessel is necessary, the Contracting Officer may 
issue a written order to perform that work and the Contractor hereby 
agrees to comply with that order and to perform work on such vessel 
within its capabilities.
    (1) As soon as practicable after the issuance of the order, the 
Contracting Officer and the Contractor shall negotiate a price for the 
work and the Contracting Officer shall issue a job order covering the 
work.
    (2) The Contractor shall, upon request, furnish the Contracting 
Officer with a breakdown of costs incurred by the Contractor and an 
estimate of costs expected to be incurred in the performance of the 
work. The Contractor shall maintain, and make available for inspection 
by the Contracting Officer or the Contracting Officer's representative, 
records supporting the cost of performing the work.
    (3) Failure of the parties to agree upon the price of the work shall 
constitute a dispute within the meaning of the Disputes clause of the 
Master Agreement. In the meantime, the Contractor shall diligently 
proceed to perform the work ordered.
    (c)(1) If the nature of any repairs is such that their extent and 
probable cost cannot be ascertained readily, the Contracting Officer may 
issue a job order (on a sealed bid or negotiated basis) to determine the 
nature and extent of required repairs.
    (2) Upon determination by the Contracting Officer of what work is 
necessary, the Contractor, if requested by the Contracting Officer, 
shall negotiate prices for performance of that work. The prices agreed 
upon shall be set forth in a modification of the job order.
    (3) Failure of the parties to agree upon the price shall constitute 
a dispute under the Disputes clause. In the meantime, the Contractor 
shall diligently proceed to perform the work ordered.

                             (End of clause)

[56 FR 36479, July 13, 1991, as amended at 71 FR 27643, May 12, 2006]

[[Page 339]]



Sec. 252.217-7005  Inspection and manner of doing work.

    As prescribed in 217.7104(a), use the following clause:

             Inspection and Manner of Doing Work (JAN 1997)

    (a) The Contractor shall perform work in accordance with the job 
order, any drawings and specifications made a part of the job order, and 
any change or modification issued under the Changes clause of the Master 
Agreement.
    (b)(1) Except as provided in paragraph (b) (2) of this clause, and 
unless otherwise specifically provided in the job order, all operational 
practices of the Contractor and all workmanship, material, equipment, 
and articles used in the performance of work under the Master Agreement 
shall be in accordance with the best commercial marine practices and the 
rules and requirements of the American Bureau of Shipping, the U.S. 
Coast Guard, and the Institute of Electrical and Electronic Engineers, 
in effect at the time of Contractor's submission of bid (or acceptance 
of the job order, if negotiated).
    (2) When Navy specifications are specified in the job order, the 
Contractor shall follow Navy standards of material and workmanship. The 
solicitation shall prescribe the Navy standard whenever applicable.
    (c) The Government may inspect and test all material and workmanship 
at any time 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 job order, in 
addition to its rights under the Guarantees clause of the Master 
Agreement, the Government may reject the defective or nonconforming 
material or workmanship and require the Contractor to correct or replace 
it at the Contractor's expense.
    (2) If the Contractor fails to proceed promptly with the replacement 
or correction of the material or workmanship, the Government may replace 
or correct the defective or nonconforming material or workmanship and 
charge the Contractor the excess costs incurred.
    (3) As specified in the job order, the Contractor shall provide and 
maintain an inspection system acceptable to the Government.
    (4) The Contractor shall maintain complete records of all inspection 
work and shall make them available to the Government during performance 
of the job order and for 90 days after the completion of all work 
required.
    (d) The Contractor shall not permit any welder to work on a vessel 
unless the welder is, at the time of the work, qualified to the 
standards established by the U.S. Coast Guard, American Bureau of 
Shipping, or Department of the Navy for the type of welding being 
performed. Qualifications of a welder shall be as specified in the job 
order.
    (e) The Contractor shall--
    (1) Exercise reasonable care to protect the vessel from fire;
    (2) Maintain a reasonable system of inspection over activities 
taking place in the vicinity of the vessel's magazines, fuel oil tanks, 
or storerooms containing flammable materials;
    (3) Maintain a reasonable number of hose lines ready for immediate 
use on the vessel at all times while the vessel is berthed alongside the 
Contractor's pier or in dry dock or on a marine railway;
    (4) Unless otherwise provided in a job order, provide sufficient 
security patrols to reasonably maintain a fire watch for protection of 
the vessel when it is in the Contractor's custody;
    (5) To the extent necessary, clean, wash, and steam out or otherwise 
make safe, all tanks under alteration or repair;
    (6) Furnish the Contracting Officer or designated representative 
with a copy of the ``gas-free'' or ``safe-for-hotwork'' certificate, 
provided by a Marine Chemist or Coast Guard authorized person in 
accordance with Occupational Safety and Health Administration 
regulations (29 CFR 1915.14) before any hot work is done on a tank;
    (7) Treat the contents of any tank as Government property in 
accordance with the Government Property (Fixed-Price Contracts) clause; 
and
    (8) Dispose of the contents of any tank only at the direction, or 
with the concurrence, of the Contracting Officer.
    (f) Except as otherwise provided in the job order, when the vessel 
is in the custody of the Contractor or in dry dock or on a marine 
railway and the temperature is expected to go as low as 35 [deg]F, the 
Contractor shall take all necessary steps to--
    (1) Keep all hose pipe lines, fixtures, traps, tanks, and other 
receptacles on the vessel from freezing; and
    (2) Protect the stern tube and propeller hubs from frost damage.
    (g) The Contractor shall, whenever practicable--
    (1) Perform the required work in a manner that will not interfere 
with the berthing and messing of Government personnel attached to the 
vessel; and
    (2) Provide Government personnel attached to the vessel access to 
the vessel at all times.
    (h) Government personnel attached to the vessel shall not interfere 
with the Contractor's work or workers.
    (i)(1) The Government does not guarantee the correctness of the 
dimensions, sizes, and shapes set forth in any job order, sketches, 
drawings, plans, or specifications prepared or furnished by the 
Government, unless the job

[[Page 340]]

order requires that the Contractor perform the work prior to any 
opportunity to inspect.
    (2) Except as stated in paragraph (i)(1) of this clause, and other 
than those parts furnished by the Government, the Contractor shall be 
responsible for the correctness of the dimensions, sizes, and shapes of 
parts furnished under this agreement.
    (j) The Contractor shall at all times keep the site of the work on 
the vessel free from accumulation of waste material or rubbish caused by 
its employees or the work. At the completion of the work, unless the job 
order specifies otherwise, the Contractor shall remove all rubbish from 
the site of the work and leave the immediate vicinity of the work area 
``broom clean.''

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2614, Jan. 17, 1997]



Sec. 252.217-7006  Title.

    As prescribed in 217.7104(a), use the following clause:

                            Title (DEC 1991)

    (a) Unless otherwise provided, title to all materials and equipment 
to be incorporated in a vessel in the performance of a job order shall 
vest in the Government upon delivery at the location specified for the 
performance of the work.
    (b) Upon completion of the job order, or with the approval of the 
Contracting Officer during performance of the job order, all Contractor-
furnished materials and equipment not incorporated in, or placed on, any 
vessel, shall become the property of the Contractor, unless the 
Government has reimbursed the Contractor for the cost of the materials 
and equipment.
    (c) The vessel, its equipment, movable stores, cargo, or other 
ship's materials shall not be considered Government-furnished property.

                             (End of clause)



Sec. 252.217-7007  Payments.

    As prescribed in 217.7104(a), use the following clause:

                           Payments (DEC 1991)

    (a) Progress payments, as used in this clause, means payments made 
before completion of work in progress under a job order.
    (b) Upon submission by the Contractor of invoices in the form and 
number of copies directed by the Contracting Officer, and as approved by 
the Contracting Officer, the Government will make progress payments as 
work progresses under the job order.
    (1) Generally, the Contractor may submit invoices on a semi-monthly 
basis, unless expenditures justify a more frequent submission.
    (2) The Government need not make progress payments for invoices 
aggregating less than $5,000.
    (3) The Contracting Officer shall approve progress payments based on 
the value, computed on the price of the job order, of labor and 
materials incorporated in the work, materials suitably stored at the 
site of the work, and preparatory work completed, less the aggregate of 
any previous payments.
    (4) Upon request, the Contractor will furnish the Contracting 
Officer any reports concerning expenditures on the work to date that the 
Contracting Officer may require.
    (c) The Government will retain until final completion and acceptance 
of all work covered by the job order, an amount estimated or approved by 
the Contracting Officer under paragraph (b) of this clause. The amount 
retained will be in accordance with the rate authorized by Congress for 
Naval vessel repair contracts at the time of job order award.
    (d) The Contracting Officer may direct that progress payments be 
based on the price of the job order as adjusted as a result of change 
orders under the Changes clause of the Master Agreement. If the 
Contracting Officer does not so direct--
    (1) Payments of any increases shall be made from time to time after 
the amount of the increase is determined under the Changes clause of the 
Master Agreement; and
    (2) Reductions resulting from decreases shall be made for the 
purposes of subsequent progress payments as soon as the amounts are 
determined under the Changes clause of the Master Agreement.
    (e) Upon completion of the work under a job order and final 
inspection and acceptance, and upon submission of invoices in such form 
and with such copies as the Contracting Officer may prescribe, the 
Contractor shall be paid for the price of the job order, as adjusted 
pursuant to the Changes clause of the Master Agreement, less any 
performance reserves deemed necessary by the Contracting Officer, and 
less the amount of any previous payments.
    (f) All materials, equipment, or any other property or work in 
process covered by the progress payments made by the Government, upon 
the making of those progress payments, shall become the sole property of 
the Government, and are subject to the provisions of the Title clause of 
the Master Agreement.

[[Page 341]]

                             (End of clause)



Sec. 252.217-7008  Bonds.

    As prescribed in 217.7104(a), use the following clause:

                            Bonds (DEC 1991)

    (a) If the solicitation requires an offeror to submit a bid bond, 
the Offeror may furnish, instead, an annual bid bond (or evidence 
thereof) or an annual performance and payment bond (or evidence 
thereof).
    (b) If the solicitation does not require a bid bond, the Offeror 
shall not include in the price any contingency to cover the premium of 
such a bond.
    (c) Even if the solicitation does not require bonds, the Contracting 
Officer may nevertheless require a performance and payment bond, in 
form, amount, and with a surety acceptable to the Contracting Officer. 
Where performance and payment bond is required, the offer price shall be 
increased upon the award of the job order in an amount not to exceed the 
premium of a corporate surety bond.
    (d) If any surety upon any bond furnished in connection with a job 
order under this agreement fails to submit requested reports as to its 
financial condition or otherwise becomes unacceptable to the Government, 
the Contracting Officer may require the Contractor to furnish whatever 
additional security the Contracting Officer determines necessary to 
protect the interests of the Government and of persons supplying labor 
or materials in the performance of the work contemplated under the 
Master Agreement.

                             (End of clause)



Sec. 252.217-7009  Default.

    As prescribed in 217.7104(a), use the following clause:

                           Default (DEC 1991)

    (a) The Government may, subject to the provisions of paragraph (b) 
of this clause, by written notice of default to the Contractor, 
terminate the whole or any part of a job order if the Contractor fails 
to--
    (1) Make delivery of the supplies or to perform the services within 
the time specified in a job order or any extension;
    (2) Make progress, so as to endanger performance of the job order; 
or
    (3) Perform any of the other provisions of this agreement or a job 
order.
    (b) Except for defaults of subcontractors, the Contractor shall not 
be liable for any excess costs if failure to perform the job order 
arises from causes beyond the control and without the fault or 
negligence of the Contractor. Examples of such causes include acts of 
God or of the public enemy, acts of the Government in either its 
sovereign or contractual capacity, fires, floods, epidemics, quarantine 
restrictions, strikes, freight embargoes, and unusually severe weather.
    (c) If the Contractor's failure to perform is caused by the default 
of a subcontractor, and if such default arises out of causes beyond the 
control of both the Contractor and subcontractor, and without the fault 
or negligence of either, the Contractor shall not be liable for any 
excess costs for failure to perform, unless the supplies or services to 
be furnished by the subcontractor were obtainable from other sources in 
sufficient time to permit the Contractor to perform the job order within 
the time specified.
    (d) If the Government terminates the job order in whole or in part 
as provided in paragraph (a) of this clause--
    (1) The Government may, upon such terms and in such manner as the 
Contracting Officer may deem appropriate, arrange for the completion of 
the work so terminated, at such plant or plants, including that of the 
Contractor, as may be designated by the Contracting Officer.
    (i) The Contractor shall continue the performance of the job order 
to the extent not terminated under the provisions of this clause.
    (ii) If the work is to be completed at the plant, the Government may 
use all tools, machinery, facilities, and equipment of the Contractor 
determined by the Contracting Office to be necessary for that purpose.
    (iii) If the cost to the Government of the work procured or 
completed (after adjusting such cost to exclude the effect of changes in 
the plans and specifications made subsequent to the date of termination) 
exceeds the price fixed for work under the job order (after adjusting 
such price on account of changes in the plans and specifications made 
before the date of termination), the Contractor, or the Contractor's 
surety, if any, shall be liable for such excess.
    (2) The Government, in addition to any other rights provided in this 
clause, may require the Contractor to transfer title and delivery to the 
Government, in the manner and to the extent directed by the Contracting 
Officer, any completed supplies and such partially completed supplies 
and materials, parts, tools, dies, jigs, fixtures, plans, drawings, 
information and contract rights (hereinafter called ``manufacturing 
materials'') as the Contractor has specifically produced or specifically 
acquired for the performance of the terminated part of the job order.
    (i) The Contractor shall, upon direction of the Contracting Officer, 
protect and preserve property in possession of the Contractor in which 
the Government has an interest.
    (ii) The Government shall pay to the Contractor the job order price 
for completed items of work delivered to and accepted by

[[Page 342]]

the Government, and the amount agreed upon by the Contractor and the 
Contracting Officer for manufacturing materials delivered to and 
accepted by the Government, and for the protection and preservation of 
property. Failure to agree shall be a dispute concerning a question of 
fact within the meaning of the Disputes clause.
    (e) If, after notice of termination of the job order, it is 
determined that the Contractor was not in default, or that the default 
was excusable, the rights and obligations of the parties shall be the 
same as if the notice of termination had been issued for the convenience 
of the Government.
    (f) If the Contractor fails to complete the performance of a job 
order within the time specified, or any extension, the actual damage to 
the Government for the delay will be difficult or impossible to 
determine.
    (1) In lieu of actual damage, the Contractor shall pay to the 
Government as fixed, agreed, and liquidated damages for each calendar 
day of delay the amount, if any, set forth in the job order (prorated to 
the nearest hour for fractional days).
    (2) If the Government terminates the job order, the Contractor shall 
be liable, in addition to the excess costs provided in paragraph (d) of 
this clause, for liquidated damages accruing until such time as the 
Government may reasonably obtain completion of the work.
    (3) The Contractor shall not be charged with liquidated damages when 
the delay arises out of causes beyond the control and without the fault 
or negligence of the Contractor. Subject to the provisions of the 
Disputes clause of the Master Agreement, the Contracting Officer shall 
ascertain the facts and the extent of the delay and shall extend the 
time for performance when in the judgment of the Contracting Officer, 
the findings of fact justify an extension.
    (g) The rights and remedies of the Government provided in this 
clause shall not be exclusive and are in addition to any other rights 
and remedies provided by law under this agreement.

                             (End of clause)



Sec. 252.217-7010  Performance.

    As prescribed in 217.7104(a), use the following clause:

                         Performance (DEC 1991)

    (a) Upon the award of a job order, the Contractor shall promptly 
start the work specified and shall diligently prosecute the work to 
completion. The Contractor shall not start work until the job order has 
been awarded except in the case of emergency work ordered by the 
Contracting Officer under the Job Orders and Compensation clause of the 
Master Agreement.
    (b) The Government shall deliver the vessel described in the job 
order at the time and location specified in the job order. Upon 
completion of the work, the Government shall accept delivery of the 
vessel at the time and location specified in the job order.
    (c) The Contractor shall, without charge and without specific 
requirement in a job order,--
    (1) Make available at the plant to personnel of the vessel while in 
dry dock or on a marine railway, sanitary lavatory and similar 
facilities acceptable to the Contracting Officer;
    (2) Supply and maintain suitable brows and gangways from the pier, 
dry dock, or marine railway to the vessel;
    (3) Treat salvage, scrap or other ship's material of the Government 
resulting from performance of the work as items of Government-furnished 
property, in accordance with the Government Property (Fixed Price 
Contracts) clause;
    (4) Perform, or pay the cost of, any repair, reconditioning or 
replacement made necessary as the result of the use by the Contractor of 
any of the vessel's machinery, equipment or fittings, including, but not 
limited to, winches, pumps, rigging, or pipe lines; and
    (5) Furnish suitable offices, office equipment and telephones at or 
near the site of the work for the Government's use.
    (d) The job order will state whether dock and sea trials are 
required to determine whether or not the Contractor has satisfactorily 
performed the work.
    (1) If dock and sea trials are required, the vessel shall be under 
the control of the vessel's commander and crew.
    (2) The Contractor shall not conduct dock and sea trials not 
specified in the job order without advance approval of the Contracting 
Officer. Dock and sea trials not specified in the job order shall be at 
the Contractor's expense and risk.
    (3) The Contractor shall provide and install all fittings and 
appliances necessary for dock and sea trials. The Contractor shall be 
responsible for care, installation, and removal of instruments and 
apparatus furnished by the Government for use in the trials.

                             (End of clause)



Sec. 252.217-7011  Access to vessel.

    As prescribed at 217.7104(a), use the following clause:

                       Access to Vessel (DEC 1991)

    (a) Upon the request of the Contracting Officer, the Contractor 
shall grant admission to the Contractor's facilities and access to 
vessel, on a non-interference basis, as necessary to perform their 
respective responsibilities, to a reasonable number of:

[[Page 343]]

    (1) Government and other Government contractor employees (in 
addition to those Government employees attached to the vessel); and
    (2) Representatives of offerors on other contemplated Government 
work.
    (b) All personnel granted access shall comply with Contractor rules 
governing personnel at its shipyard.

                             (End of clause)



Sec. 252.217-7012  Liability and insurance.

    As prescribed in 217.7104(a), use the following clause:

                   Liability and Insurance (AUG 2003)

    (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 subcontracts; or
    (C) Workmanship, materials, or equipment which do not conform to the 
requirements of the contract, whether or not the defect is latent or 
whether or not the nonconformance is the result of negligence.
    (ii) Loss, damage, liability, or expense caused by, resulting from, 
or incurred as a consequence of any delay or disruption, willful 
misconduct or lack of good faith by the Contractor or any of its 
representatives that have supervision or direction of--
    (A) All or substantially all of the Contractor's business; or
    (B) All or substantially all of the Contractor's operation at any 
one plant.
    (4) As to any risk that is assumed by the Government, the Government 
shall be subrogated to any claim, demand or cause of action against 
third parties that exists in favor of the Contractor. If required by the 
Contracting Officer, the Contractor shall execute a formal assignment or 
transfer of the claim, demand, or cause of action.
    (5) No party other than the Contractor shall have any right to 
proceed directly against the Government or join the Government as a co-
defendant in any action.
    (6) Notwithstanding the foregoing, the Contractor shall bear the 
first $50,000 of loss or damage from each occurrence or incident, the 
risk of which the Government would have assumed under the provisions of 
this paragraph (b).
    (c) 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 shall be 
as determined by other provisions of this agreement and by law. The 
indemnity does apply to death occurring after 90 days where the injury 
was received during the period covered by the indemnity.
    (d) 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.

[[Page 344]]

    (e) The Contractor shall not make any allowance in the job order 
price for the inclusion of any premium expense or charge for any reserve 
made on account of self-insurance for coverage against any risk assumed 
by the Government under this clause.
    (f) The Contractor shall give the Contracting Officer written notice 
as soon as practicable after the occurrence of a loss or damage for 
which the Government has assumed the risk.
    (1) The notice shall contain full details of the loss or damage.
    (2) If a claim or suit is later filed against the Contractor as a 
result of the event, the Contractor shall immediately deliver to the 
Government every demand, notice, summons, or other process received by 
the Contractor or its employees or representatives.
    (3) The Contractor shall cooperate with the Government and, upon 
request, shall assist in effecting settlements, securing and giving 
evidence, obtaining the attendance of witnesses, and in the conduct of 
suits. The Government shall reimburse the Contractor for 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 payment, assume any obligation, or incur any expense other than 
what would be imperative for the protection of the vessel(s) at the time 
of the event.
    (g) In the event or loss of or damage to any vessel(s), material, or 
equipment which may result in a claim against the Government under the 
insurance provisions of this contract, the Contractor shall promptly 
notify the Contracting Officer of the loss or damage. The Contracting 
Officer may, without prejudice to any other right of the Government, 
either--
    (1) Order the Contractor to proceed with replacement or repair, in 
which event the Contractor shall effect the replacement or repair;
    (i) The Contractor shall submit to the Contracting Officer a request 
for reimbursement of the cost of the replacement or repair together with 
whatever supporting documentation the Contracting Officer may reasonably 
require, and shall identify the request as being submitted under the 
Insurance clause of the agreement.
    (ii) If the Government determines that the risk of the loss or 
damage is within the scope of the risks assumed by the Government under 
this clause, the Government will reimburse the Contractor for the 
reasonable, allowable cost of the replacement or repair, plus a 
reasonable profit (if the work or replacement or repair was performed by 
the Contractor) less the deductible amount specified in paragraph (b) of 
this clause.
    (iii) Payments by the Government to the Contractor under this clause 
are outside the scope of and shall not affect the pricing structure of 
the contract, and are additional to the compensation otherwise payable 
to the Contractor under this contract; or
    (2) In the event the Contracting Officer decides that the loss or 
damage shall not be replaced or repaired, the Contracting Officer 
shall--
    (i) Modify the contract appropriately, consistent with the reduced 
requirements reflected by the unreplaced or unrepaired loss or damage; 
or
    (ii) Terminate the repair of any part or all of the vessel(s) under 
the Termination for Convenience of the Government clause of this 
agreement.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 68 FR 50478, Aug. 21, 2003]



Sec. 252.217-7013  Guarantees.

    As prescribed in 217.7104(a), use the following clause:

                          Guarantees (DEC 1991)

    (a) In the event any work performed or materials furnished by the 
contractor under the Master Agreement prove defective or deficient 
within 90 days from the date of redelivery of the vessel(s), the 
Contractor, as directed by the Contracting Officer and at its own 
expense, shall correct and repair the deficiency to the satisfaction of 
the Contracting Officer.
    (b) If the Contractor or any subcontractor has a guarantee for work 
performed or materials furnished that exceeds the 90 day period, the 
Government shall be entitled to rely upon the longer guarantee until its 
expiration.
    (c) With respect to any individual work item identified as 
incomplete at the time of redelivery of the vessel(s), the guarantee 
period shall run from the date the item is completed.
    (d) If practicable, the Government shall give the Contractor an 
opportunity to correct the deficiency.
    (1) If the Contracting Officer determines it is not practicable or 
is otherwise not advisable to return the vessel(s) to the Contractor, or 
the Contractor fails to proceed with the repairs promptly, the 
Contracting Officer may direct that the repairs be performed elsewhere, 
at the Contractor's expense.
    (2) If correction and repairs are performed by other than the 
Contractor, the Contracting Officer may discharge the Contractor's 
liability by making an equitable deduction in the price of the job 
order.
    (e) The Contractor's liability shall extend for an additional 90 day 
guarantee period on

[[Page 345]]

those defects or deficiencies that the Contractor corrected.
    (f) At the option of the Contracting Officer, defects and 
deficiencies may be left uncorrected. In that event, the Contractor and 
Contracting Officer shall negotiate an equitable reduction in the job 
price. Failure to agree upon an equitable reduction shall constitute a 
dispute under the Disputes clause of this agreement.

                             (End of clause)



Sec. 252.217-7014  Discharge of liens.

    As prescribed in 217.7104(a), use the following clause:

                      Discharge of Liens (DEC 1991)

    (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 
material furnished under any job order under this agreement.
    (b) If any 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)



Sec. 252.217-7015  Safety and health.

    As prescribed in 217.7104(a), use the following clause:

                      Safety and Health (DEC 1991)

    Nothing contained in the Master Agreement or any job order shall 
relieve the Contractor of any obligations it may have to comply with--
    (a) The Occupational Safety and Health Act of 1970 (29 U.S.C. 651, 
et seq.);
    (b) The Safety and Health Regulations for Ship Repairing (29 CFR 
part 1915); or
    (c) Any other applicable Federal, State, and local laws, codes, 
ordinances, and regulations.

                             (End of clause)



Sec. 252.217-7016  Plant protection.

    As prescribed in 217.7104(a), use the following clause:

                       Plant Protection (DEC 1991)

    (a) The Contractor shall provide, for the plant and work in process, 
reasonable safeguards against all hazards, including unauthorized entry, 
malicious mischief, theft, vandalism, and fire.
    (b) The Contractor shall also provide whatever additional safeguards 
are necessary to protect the plant and work in process from espionage, 
sabotage, and enemy action.
    (1) The Government shall reimburse the Contractor for that portion 
of the costs of the additional safeguards that is allocable to the 
contract in the same manner as if the Contracting Officer had issued a 
change order for the additional safeguards.
    (2) The costs reimbursed shall not include any overhead allowance, 
unless the overhead is incident to the construction or installation of 
necessary security devices or equipment.
    (c) Upon payment by the Government of the cost of any device or 
equipment required or approved under paragraph (b) of this clause, title 
shall vest in the Government.
    (1) The Contractor shall comply with the instructions of the 
Contracting Officer concerning its identification and disposition.
    (2) No such device or equipment shall become a fixture as a result 
of its being affixed to realty not owned by the Government.

                             (End of clause)



Sec. 252.217-7017--252.217-7025  [Reserved]



Sec. 252.217-7026  Identification of sources of supply.

    As prescribed in 217.7303, use the following provision:

             Identification of Sources of Supply (NOV 1995)

    (a) The Government is required under 10 U.S.C. 2384 to obtain 
certain information on the actual manufacturer or sources of supplies it 
acquires.
    (b) The apparently successful Offeror agrees to complete and submit 
the following table before award:

                                                                          Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Source of supply
           Line items             National stock No.  Commercial item (Y ------------------------------------------------------------     Actual mfg?
                                                             or N)              Company             Address            Part No.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1)                               (2)...............  (3)...............  (4)...............  (4)...............  (5)...............  (6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
------..........................  ------............  ------............  ------............  ------............  ------............  ------
(1) List each deliverable item of supply and item of technical data.
(2) If there is no national stock number, list ``none.''

[[Page 346]]

 
(3) Use ``Y'' if the item is a commercial item; otherwise use ``N.'' If ``Y'' is listed, the Offeror need not complete the remaining columns in the
  table.
(4) For items of supply, list all sources. For technical data, list the source.
(5) For items of supply, list each source's part number for the item.
(6) Use ``Y'' if the source of supply is the actual manufacturer; ``N'' if it is not; and ``U'' if unknown.

                           (End of provision)

[56 FR 36479, July 31, 1991, as amended at 59 FR 27675, May 27, 1994; 60 
FR 61601, Nov. 30, 1995]



Sec. 252.217-7027  Contract definitization.

    As prescribed in 217.7405(b), use the following clause:

                   Contract Definitization (OCT 1998)

    (a) A ------(insert specific type of contract action) is 
contemplated. The Contractor agrees to begin promptly negotiating with 
the Contracting Officer the terms of a definitive contract that will 
include (1) all clauses required by the Federal Acquisition Regulation 
(FAR) on the date of execution of the underfinitized contract action, 
(2) all clauses required by law on the date of execution of the 
definitive contract action, and (3) any other mutually agreeable 
clauses, terms, and conditions. The Contractor agrees to submit a ------
(insert type of proposal; e.g., fixed-price or cost-and-fee) proposal 
and cost or pricing data supporting its proposal.
    (b) The schedule for definitizing this contract is as follows 
(insert target date for definitization of the contract action and dates 
for submission of proposal, beginning of negotiations, and, if 
appropriate, submission of the make-or-buy and subcontracting plans and 
cost or pricing data).

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

    (c) If agreement on a definitive contract action to supersede this 
undefinitized contract action is not reached by the target date in 
paragraph (b) of this clause, or within any extension of it granted by 
the Contracting Officer, the Contracting Officer may, with the approval 
of the head of the contracting activity, determine a reasonable price or 
fee in accordance with subpart 15.4 and part 31 of the FAR, subject to 
Contractor appeal as provided in the Disputes clause. In any event, the 
Contractor shall proceed with completion of the contract, subject only 
to the Limitation of Government Liability clause.
    (1) After the Contracting Officer's determination of price or fee, 
the contract shall be governed by--
    (i) All clauses required by the FAR on the date of execution of this 
underfinitized contract action for either fixed-price or cost-
reimbursement contracts, as determined by the Contracting Officer under 
this paragraph (c);
    (ii) All clauses required by law as of the date of the Contracting 
Officer's determination; and
    (iii) Any other clauses, terms, and conditions mutually agreed upon.
    (2) To the extent consistent with paragraph (c)(1) of this clause, 
all clauses, terms, and conditions included in this undefinitized 
contract action shall continue in effect, except those that by their 
nature apply only to an undefinitized contract action.
    (d) The definitive contract resulting from this undefinitized 
contract action will include a negotiated -------------------- (insert 
``cost/price ceiling'' or ``firm-fixed price'') in no event to exceed --
------------------ (insert the not-to-exceed amount).

                             (End of clause)

[61 FR 7750, Feb. 29, 1996; 61 FR 18195, Apr. 24, 1996, as amended at 63 
FR 55052, Oct. 14, 1998; 71 FR 27643, May 12, 2006]



Sec. 252.217-7028  Over and above work.

    As prescribed in 217.7702, use a clause substantially as follows:

                     Over and Above Work (DEC 1991)

    (a) Definitions. As used in this clause--
    (1) Over and above work means work discovered during the course of 
performing overhaul, maintenance, and repair efforts that is--
    (i) Within the general scope of the contract;
    (ii) Not covered by the line item(s) for the basic work under the 
contract; and
    (iii) Necessary in order to satisfactorily complete the contract.
    (2) Work request means a document prepared by the Contractor which 
describes over and above work being proposed.
    (b) The Contractor and Administrative Contracting Officer shall 
mutually agree to procedures for Government administration and 
Contractor performance of over and above work requests. If the parties 
cannot agree upon the procedures, the Administrative Contracting Officer 
has the unilateral right to direct the over and above work procedures to 
be followed. These procedures shall, as a minimum, cover--
    (1) The format, content, and submission of work requests by the 
Contractor. Work requests shall contain data on the type of discrepancy 
disclosed, the specific location of

[[Page 347]]

the discrepancy, and the estimated labor hours and material required to 
correct the discrepancy. Data shall be sufficient to satisfy contract 
requirements and obtain the authorization of the Contracting Officer to 
perform the proposed work;
    (2) Government review, verification, and authorization of the work; 
and
    (3) Proposal pricing, submission, negotiation, and definitization.
    (c) Upon discovery of the need for over and above work, the 
Contractor shall prepare and furnish to the Government a work request in 
accordance with the agreed-to procedures.
    (d) The Government shall--
    (1) Promptly review the work request;
    (2) Verify that the proposed work is required and not covered under 
the basic contract line item(s);
    (3) Verify that the proposed corrective action is appropriate; and
    (4) Authorize over and above work as necessary.
    (e) The Contractor shall promptly submit to the Contracting Officer, 
a proposal for the over and above work. The Government and Contractor 
will then negotiate a settlement for the over and above work. Contract 
modifications will be executed to definitize all over and above work.
    (f) Failure to agree on the price of over and above work shall be a 
dispute within the meaning of the Disputes clause of this contract.

                             (End of clause)



Sec. 252.219-7000--252.219-7002  [Reserved]



Sec. 252.219-7003  Small, small disadvantaged and women-owned small 
          business subcontracting plan (DoD contracts).

    As prescribed in 219.708(b)(1)(A), use the following clause:

Small, Small Disadvantaged and Women-Owned Small Business Subcontracting 
                     Plan (DoD Contracts) (APR 1996)

    This clause supplements the Federal Acquisition Regulation 52.219-9, 
Small, Small Disadvantaged and Women-Owned Small Business Subcontracting 
Plan, clause of this contract.
    (a) Definitions. Historically black colleges and universities, as 
used in this clause, means institutions determined by the Secretary of 
Education to meet the requirements of 34 CFR 608.2. The term also means 
any nonprofit research institution that was an integral part of such a 
college or university before November 14, 1986.
    Minority institutions, as used in this clause, means institutions 
meeting the requirements of section 1046(3) of the Higher Education Act 
of 1965 (20 U.S.C. 1135d-5(3)). The term also includes Hispanic-serving 
institutions as defined in section 316(b)(1) of such Act (20 U.S.C. 
1059c (b)(1)).
    (b) Except for company or division-wide commercial items 
subcontracting plans, the term small disadvantaged business, when used 
in the FAR 52.219-9 clause, includes historically black colleges and 
universities and minority institutions, in addition to small 
disadvantaged business concerns.
    (c) Work under the contract or its subcontracts shall be credited 
toward meeting the small disadvantaged business concern goal required by 
paragraph (d) of the FAR 52.219-9 clause when:
    (1) It is performed on Indian lands or in joint venture with an 
Indian tribe or a tribally-owned corporation, and
    (2) It meets the requirements of 10 U.S.C. 2323a.
    (d) Subcontracts awarded to workshops approved by the Committee for 
Purchase from People Who Are Blind or Severely Disabled (41 U.S.C. 46-
48), may be counted toward the Contractor's small business 
subcontracting goal.
    (e) A mentor firm, under the Pilot Mentor-Protege Program 
established under Section 831 of Pub. L. 101-510, as amended, may count 
toward its small disadvantaged business goal, subcontracts awarded--
    (1) Protege firms which are qualified organizations employing the 
severely handicapped; and
    (2) Former protege firms that meet the criteria in Section 831(g)(4) 
of Pub. L. 101-510.
    (f) The master plan approval referred to in paragraph (f) of the FAR 
52.219-9 clause is approval by the Contractor's cognizant contract 
administration activity.
    (g) In those subcontracting plans which specifically identify small, 
small disadvantaged, and women-owned small businesses, the Contractor 
shall notify the Administrative Contracting Officer of any substitutions 
of firms that are not small, small disadvantaged, or women-owned small 
businesses for the firms listed in the subcontracting plan. 
Notifications shall be in writing and shall occur within a reasonable 
period of time after award of the subcontract. Contractor-specified 
formats shall be acceptable.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 59 FR 22131, Apr. 29, 1994; 
59 FR 27675, May 27, 1994; 60 FR 61601, Nov. 30, 1995; 61 FR 18688, Apr. 
29, 1996]



Sec. 252.219-7004  Small, small disadvantaged and women-owned small 
          business subcontracting plan (test program).

    As prescribed in 219.708(b)(1)(B), use the following clause:

[[Page 348]]

Small, Small Disadvantaged and Women-Owned Small Business Subcontracting 
                     Plan (Test Program) (JUN 1997)

    (a) Definition. Subcontract, as used in this clause, means any 
agreement (other than one involving an employer-employee relationship) 
entered into by a Federal Government prime Contractor or subcontractor 
calling for supplies or services required for performance of the 
contract or subcontract.
    (b) The Offeror's comprehensive small business subcontracting plan 
and its successors, which are authorized by and approved under the test 
program of Section 834 of Pub. L. 101-189, as amended, shall be included 
in and made a part of the resultant contract. Upon expulsion from the 
test program or expiration of the test program, the Contractor shall 
negotiate an individual subcontracting plan for all future contracts 
that meet the requirements of Section 211 of Pub. L. 95-507.
    (c) The Contractor shall submit Standard Form (SF) 295, Summary 
Subcontract Report, in accordance with the instructions on the form, 
except--
    (1) One copy of the SF 295 and attachments shall be submitted to 
Director, Small and Disadvantaged Business Utilization, Office of the 
Deputy Under Secretary of Defense (International and Commercial 
Programs), 3061 Defense Pentagon, Room 2A338, Washington, DC 20301-3061; 
and
    (2) Item 14, Remarks, shall be completed to include semi-annual 
cumulative--
    (i) Small business, small disadvantaged business, and women-owned 
small business goals; and
    (ii) Small business and small disadvantaged business goals, actual 
accomplishments, and percentages for each of the two designated industry 
categories.
    (d) The failure of the Contractor or subcontractor to comply in good 
faith with (1) the clause of this contract entitled ``Utilization of 
Small, Small Disadvantaged and Women-Owned Small Business Concerns,'' or 
(2) an approved plan required by this clause, shall be a material breach 
of the contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 35668, July 10, 1995; 
61 FR 39901, July 31, 1996; 62 FR 34129, June 24, 1997]



Sec. 252.219-7005--252.219-7008  [Reserved]



Sec. 252.219-7009  Section 8(a) direct award.

    As prescribed in 219.811-3(1), use the following clause:

                  Section 8(a) Direct Award (MAR 2002)

    (a) This contract is issued as a direct award between the 
contracting office and the 8(a) Contractor pursuant to the Partnership 
Agreement dated February 1, 2002, between the Small Business 
Administration (SBA) and the Department of Defense. Accordingly, the 
SBA, even if not identified in Section A of this contract, is the prime 
contractor and retains responsibility for 8(a) certification, for 8(a) 
eligibility determinations and related issues, and for providing 
counseling and assistance to the 8(a) Contractor under the 8(a) Program. 
The cognizant SBA district office is:

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

[To be completed by the Contracting Officer at the time of award]

    (b) The contracting office is responsible for administering the 
contract and for taking any action on behalf of the Government under the 
terms and conditions of the contract; provided that the contracting 
office shall give advance notice to the SBA before it issues a final 
notice terminating performance, either in whole or in part, under the 
contract. The contracting office also shall coordinate with the SBA 
prior to processing any novation agreement. The contracting office may 
assign contract administration functions to a contract administration 
office.
    (c) The 8(a) Contractor agrees that--
    (1) It will notify the Contracting Officer, simultaneous with its 
notification to the SBA (as required by SBA's 8(a) regulations at 13 CFR 
124.308), when the owner or owners upon whom 8(a) eligibility is based 
plan to relinquish ownership or control of the concern. Consistent with 
Section 407 of Pub. L. 100-656, transfer of ownership or control shall 
result in termination of the contract for convenience, unless the SBA 
waives the requirement for termination prior to the actual relinquishing 
of ownership and control; and
    (2) It will not subcontract the performance of any of the 
requirements of this contract without the prior written approval of the 
SBA and the Contracting Officer.

                             (End of clause)

[63 FR 33588, June 19, 1998, as amended at 67 FR 11437, Mar. 14, 2002]



Sec. 252.219-7010  Alternate A.

                         Alternate A (JUN 1998)

    As prescribed in 219.811-3(2), substitute the following paragraph 
(c) for paragraph (c) of the clause at FAR 52.219-18:

[[Page 349]]

    (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.

[63 FR 33588, June 19, 1998]



Sec. 252.219-7011  Notification to delay performance.

    As prescribed in 219.811-3 (3), use the following clause:

              Notification To Delay Performance (JUN 1998)

    The Contractor shall not begin performance under this purchase order 
until 2 working days have passed from the date of its receipt. Unless 
the Contractor receives notification from the Small Business 
Administration that it is ineligible for this 8(a) award, or otherwise 
receives instructions from the Contracting Officer, performance under 
this purchase order may begin on the third working day following receipt 
of the purchase order. If a determination of ineligibility is issued 
within the 2-day period, the purchase order shall be considered 
canceled.

                             (End of clause)

[63 FR 33588, June 19, 1998]



Sec. 252.222-7000  Restrictions on employment of personnel.

    As prescribed in 222.7004, use the following clause:

           Restrictions on Employment of Personnel (MAR 2000)

    (a) The Contractor shall employ, for the purpose of performing that 
portion of the contract work in --------, individuals who are residents 
thereof and who, in the case of any craft or trade, possess or would be 
able to acquire promptly the necessary skills to perform the contract.
    (b) The Contractor shall insert the substance of this clause, 
including this paragraph (b), in each subcontract awarded under this 
contract.

                             (End of clause)

[65 FR 14403, Mar. 16, 2000]



Sec. 252.222-7001  Right of first refusal of employment--Closure of 
          military installations.

    As prescribed in 222.7102, use the following clause:

Right of First Refusal of Employment--Closure of Military Installations 
                               (APR 1992)

    (a) The Contractor shall give Government employees, who have been or 
will be adversely affected by the closure of the military installation 
where this contract will be performed, the right of first refusal for 
employment openings under the contract. This right applies to positions 
for which the employee is qualified, if consistent with post-Government 
employment conflict of interest standards.
    (b) Government personnel seeking preference under this clause shall 
provide the Contractor with evidence from the Government personnel 
office.

                             (End of clause)

[57 FR 52594, Nov. 4, 1992, as amended at 58 FR 28472, May 13, 1993]



Sec. 252.222-7002  Compliance with local labor laws (overseas).

    As prescribed in 222.7201(a), use the following clause:

         Compliance with Local Labor Laws (Overseas) (JUNE 1997)

    (a) The Contractor shall comply with all--
    (1) Local laws, regulations, and labor union agreements governing 
work hours; and
    (2) Labor regulations including collective bargaining agreements, 
workers' compensation, working conditions, fringe benefits, and labor 
standards or labor contract matters.
    (b) The Contractor indemnifies and holds harmless the United States 
Government from all claims arising out of the requirements of this 
clause. This indemnity includes the Contractor's obligation to handle 
and settle, without cost to the United States Government, any claims or 
litigation concerning allegations that the Contractor or the United 
States Government, or both, have not fully complied with local labor 
laws or regulations relating to the performance of work required by this 
contract.
    (c) Notwithstanding paragraph (b) of this clause, consistent with 
paragraphs 31.205-15(a) and 31.205-47(d) of the Federal Acquisition 
Regulation, the Contractor will be reimbursed for the costs of all 
fines, penalties, and reasonable litigation expenses incurred as a 
result of compliance with specific contract terms and conditions or 
written instructions from the Contracting officer.

                             (End of clause)

[62 FR 34129, June 24, 1997]

[[Page 350]]



Sec. 252.222-7003  Permit from Italian Inspectorate of Labor.

    As prescribed in 222.7201(b), use the following clause:

          Permit from Italian Inspectorate of Labor (JUN 1997)

    Prior to the date set for commencement of work and services under 
this contract, the Contractor shall obtain the prescribed permit from 
the Inspectorate of Labor having jurisdiction over the work site, in 
accordance with Article 5g of Italian Law Number 1369, dated October 23, 
1960. The Contractor shall ensure that a copy of the permit is available 
at all reasonable times for inspection by the Contracting Officer or an 
authorized representative. Failure to obtain such permit may result in 
termination of the contract for the convenience of the United States 
Government, at no cost to the United States Government.

                             (End of clause)

[62 FR 34129, June 24, 1997]



Sec. 252.222-7004  Compliance with Spanish social security laws and 
          regulations.

    As prescribed in 222.7201(c), use the following clause:

 Compliance with Spanish Social Security Laws and Regulations (JUN 1997)

    (a) The Contractor shall comply with all Spanish Government social 
security laws and regulations. Within 30 calendar days after the start 
of contract performance, the Contractor shall ensure that copies of the 
documents identified in paragraph (a)(1) through (a)(5) of this clause 
are available at all reasonable times for inspection by the Contracting 
Officer or an authorized representative. The Contractor shall retain the 
records in accordance with the Audit and Records clause of this 
contract.
    (1) TC1--Certificate of Social Security Payments;
    (2) TC2--List of Employees;
    (3) TC2/1--Certificate of Social Security Payments for Trainees;
    (4) Nominal (pay statements) signed by both the employee and the 
Contractor; and
    (5) Informa de Situacion de Empressa (Report of the Condition of the 
Enterprise) from the Ministerio de Trabajo y S.S., Tesoreria General de 
la Seguridad Social (annotated with the pertinent contract number(s) 
next to the employee's name).
    (b) All TC1's, TC2's, and TC2/1's shall contain a representation 
that they have been paid by either the Social Security Administration 
office or the Contractor's bank or savings institution. Failure by the 
Contractor to comply with the requirements of this clause may result in 
termination of the contract under the clause of the contract entitled 
``Default.''

                             (End of clause)

[62 FR 34129, June 24, 1997]



Sec. 252.222-7005  Prohibition on use of nonimmigrant aliens--Guam.

    As prescribed in 222.7303, use the following clause:

       Prohibition on Use of Nonimmigrant Aliens--Guam (SEP 1999)

    The work required by this contract shall not be performed by any 
alien who is issued a visa or otherwise provided nonimmigrant status 
under Section 101(a)(15)(H)(ii) of the Immigration and Nationality Act 
(8 U.S.C. 1101(a)(15)(H)(ii)). This prohibition does not apply to the 
performance of work by lawfully admitted citizens of the freely 
associated states of the Republic of the Marshall Islands, the Federated 
States of Micronesia, or the Republic of Palau.

                             (End of clause)

[64 FR 52673, Sept. 30, 1999]



Sec. 252.223-7000  [Reserved]



Sec. 252.223-7001  Hazard warning labels.

    As prescribed in 223.303, use the following clause:

                    Hazard Warning Labels (DEC 1991)

    (a) ``Hazardous material,'' as used in this clause, is defined in 
the Hazardous Material Identification and Material Safety Data clause of 
this contract.
    (b) The Contractor shall label the item package (unit container) of 
any hazardous material to be delivered under this contract in accordance 
with the Hazard Communication Standard (29 CFR 1910.1200 et seq). The 
Standard requires that the hazard warning label conform to the 
requirements of the standard unless the material is otherwise subject to 
the labelling requirements of one of the following statutes:
    (1) Federal Insecticide, Fungicide and Rodenticide Act;
    (2) Federal Food, Drug and Cosmetics Act;
    (3) Consumer Product Safety Act;
    (4) Federal Hazardous Substances Act; or
    (5) Federal Alcohol Administration Act.
    (c) The Offeror shall list which hazardous material listed in the 
Hazardous Material Identification and Material Safety Data clause of 
this contract will be labelled in accordance with one of the Acts in 
paragraphs (b) (1) through (5) of this clause instead of

[[Page 351]]

the Hazard Communication Standard. Any hazardous material not listed 
will be interpreted to mean that a label is required in accordance with 
the Hazard Communication Standard.

------------------------------------------------------------------------
   Material (if none, insert ``none.'')                  Act
------------------------------------------------------------------------
--------                                    --------
--------                                    --------
------------------------------------------------------------------------

    (d) The apparently successful Offeror agrees to submit, before 
award, a copy of the hazard warning label for all hazardous materials 
not listed in paragraph (c) of this clause. The Offeror shall submit the 
label with the Material Safety Data Sheet being furnished under the 
Hazardous Material Identification and Material Safety Data clause of 
this contract.
    (e) The Contractor shall also comply with MIL-STD-129, Marking for 
Shipment and Storage (including revisions adopted during the term of 
this contract).

                             (End of clause)



Sec. 252.223-7002  Safety precautions for ammunition and explosives.

    As prescribed in 223.370-5, use the following clause:

       Safety Precautions for Ammunition and Explosives (MAY 1994)

    (a) Definition. Ammunition and explosives, as used in this clause--
    (1) Means liquid and solid propellants and explosives, pyrotechnics, 
incendiaries and smokes in the following forms:
    (i) Bulk,
    (ii) Ammunition;
    (iii) Rockets;
    (iv) Missiles;
    (v) Warheads;
    (vi) Devices; and
    (vii) Components of (i) through (vi), except for wholly inert items.
    (2) This definition does not include the following, unless the 
Contractor is using or incorporating these materials for initiation, 
propulsion, or detonation as an integral or component part of an 
explosive, an ammunition or explosive end item, or of a weapon system--
    (i) Inert components containing no explosives, propellants, or 
pyrotechnics;
    (ii) Flammable liquids;
    (iii) Acids;
    (iv) Oxidizers;
    (v) Powdered metals; or
    (vi) Other materials having fire or explosive characteristics.
    (b) Safety requirements. (1) The Contractor shall comply with the 
requirements of the DoD Contractors' Safety Manual for Ammunition and 
Explosives, DoD 4145.26-M, hereafter referred to as ``the manual,'' in 
effect on the date of the solicitation for this contract. The Contractor 
shall also comply with any other additional requirements included in the 
schedule of this contract.
    (2) The Contractor shall allow the Government access to the 
Contractor's facilities, personnel, and safety program documentation. 
The Contractor shall allow authorized Government representatives to 
evaluate safety programs, implementation, and facilities.
    (c) Noncompliance with the manual. (1) If the Contracting Officer 
notifies the Contractor of any noncompliance with the manual or schedule 
provisions, the Contractor shall take immediate steps to correct the 
noncompliance. The Contractor is not entitled to reimbursement of costs 
incurred to correct noncompliances unless such reimbursement is 
specified elsewhere in the contract.
    (2) The Contractor has 30 days from the date of notification by the 
Contracting Officer to correct the noncompliance and inform the 
Contracting Officer of the actions taken. The Contracting Officer may 
direct a different time period for the correction of noncompliances.
    (3) If the Contractor refuses or fails to correct noncompliances 
within the time period specified by the Contracting Officer, the 
Government has the right to direct the Contractor to cease performance 
on all or part of this contract. The Contractor shall not resume 
performance until the Contracting Officer is satisfied that the 
corrective action was effective and the Contracting Officer so informs 
the Contractor.
    (4) The Contracting Officer may remove Government personnel at any 
time the Contractor is in noncompliance with any safety requirement of 
this clause.
    (5) If the direction to cease work or the removal of Government 
personnel results in increased costs to the Contractor, the Contractor 
shall not be entitled to an adjustment in the contract price or a change 
in the delivery or performance schedule unless the Contracting Officer 
later determines that the Contractor had in fact complied with the 
manual or schedule provisions. If the Contractor is entitled to an 
equitable adjustment, it shall be made in accordance with the Changes 
clause of this contract.
    (d) Mishaps. If a mishap involving ammunition or explosives occurs, 
the Contractor shall--
    (1) Notify the Contracting Officer immediately;
    (2) Conduct an investigation in accordance with other provisions of 
this contract or as required by the Contracting Officer; and
    (3) Submit a written report to the Contracting Officer.
    (e) Contractor responsibility for safety. (1) Nothing in this 
clause, nor any Government action or failure to act in surveillance of 
this

[[Page 352]]

contract, shall relieve the Contractor of its responsibility for the 
safety of--
    (i) The Contractor's personnel and property;
    (ii) The Government's personnel and property; or
    (iii) The general public.
    (2) Nothing in this clause shall relieve the Contractor of its 
responsibility for complying with applicable Federal, State, and local 
laws, ordinances, codes, and regulations (including those requiring the 
obtaining of licenses and permits) in connection with the performance of 
this contract.
    (f) Contractor responsibility for contract performance. (1) Neither 
the number or frequency of inspections performed by the Government, nor 
the degree of surveillance exercised by the Government, relieve the 
Contractor of its responsibility for contract performance.
    (2) If the Government acts or fails to act in surveillance or 
enforcement of the safety requirements of this contract, this does not 
impose or add to any liability of the Government.
    (g) Subcontractors. (1) The Contractor shall insert this clause, 
including this paragraph (g), in every subcontract that involves 
ammunition or explosives.
    (i) The clause shall include a provision allowing authorized 
Government safety representatives to evaluate subcontractor safety 
programs, implementation, and facilities as the Government determines 
necessary.
    (ii) Note: The Government Contracting Officer or authorized 
representative shall notify the prime Contractor of all findings 
concerning subcontractor safety and compliance with the manual. The 
Contracting Officer or authorized representative may furnish copies to 
the subcontractor. The Contractor in turn shall communicate directly 
with the subcontractor, substituting its name for references to ``the 
Government''. The Contractor and higher tier subcontractors shall also 
include provisions to allow direction to cease performance of the 
subcontract if a serious uncorrected or recurring safety deficiency 
potentially causes an imminent hazard to DoD personnel, property, or 
contract performance.
    (2) The Contractor agrees to ensure that the subcontractor complies 
with all contract safety requirements. The Contractor will determine the 
best method for verifying the adequacy of the subcontractor's 
compliance.
    (3) The Contractor shall ensure that the subcontractor understands 
and agrees to the Government's right to access to the subcontractor's 
facilities, personnel, and safety program documentation to perform 
safety surveys. The Government performs these safety surveys of 
subcontractor facilities solely to prevent the occurrence of any mishap 
which would endanger the safety of DoD personnel or otherwise adversely 
impact upon the Government's contractual interests.
    (4) The Contractor shall notify the Contracting Officer or 
authorized representative before issuing any subcontract when it 
involves ammunition or explosives. If the proposed subcontract 
represents a change in the place of performance, the Contractor shall 
request approval for such change in accordance with the clause of this 
contract entitled ``Change in Place of Performance--Ammunition and 
Explosives''.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 59 FR 27675, May 27, 1994]



Sec. 252.223-7003  Change in place of performance--ammunition and 
          explosives.

    As prescribed in 223.370-5, use the following clause:

  Change in Place of Performance--Ammunition and Explosives (DEC 1991)

    (a) The Offeror shall identify, in the ``Place of Performance'' 
provision of this solicitation, the place of performance of all 
ammunition and explosives work covered by the Safety Precautions for 
Ammunition and Explosives clause of this solicitation. Failure to 
furnish this information with the offer may result in rejection of the 
offer.
    (b) The Offeror agrees not to change the place of performance of any 
portion of the offer covered by the Safety Precautions for Ammunition 
and Explosives clause contained in this solicitation after the date set 
for receipt of offers without the written approval of the Contracting 
Officer. The Contracting Officer shall grant approval only if there is 
enough time for the Government to perform the necessary safety reviews 
on the new proposed place of performance.
    (c) If a contract results from this offer, the Contractor agrees not 
to change any place of performance previously cited without the advance 
written approval of the Contracting Officer.

                             (End of clause)



Sec. 252.223-7004  Drug-free work force.

    As prescribed in 223.570-2, use the following clause:

                     Drug-Free Work Force (SEP 1988)

    (a) Definitions. (1) Employee in a sensitive position, as used in 
this clause, means an employee who has been granted access to classified 
information; or employees in other positions that the Contractor 
determines involve

[[Page 353]]

national security, health or safety, or functions other than the 
foregoing requiring a high degree of trust and confidence.
    (2) Illegal drugs, as used in this clause, means controlled 
substances included in Schedules I and II, as defined by section 802(6) 
of title 21 of the United States Code, the possession of which is 
unlawful under chapter 13 of that title. The term ``illegal drugs'' does 
not mean the use of a controlled substance pursuant to a valid 
prescription or other uses authorized by law.
    (b) The Contractor agrees to institute and maintain a program for 
achieving the objective of a drug-free work force. While this clause 
defines criteria for such a program, contractors are encouraged to 
implement alternative approaches comparable to the criteria in paragraph 
(c) that are designed to achieve the objectives of this clause.
    (c) Contractor programs shall include the following, or appropriate 
alternatives:
    (1) Employee assistance programs emphasizing high level direction, 
education, counseling, rehabilitation, and coordination with available 
community resources;
    (2) Supervisory training to assist in identifying and addressing 
illegal drug use by Contractor employees;
    (3) Provision for self-referrals as well as supervisory referrals to 
treatment with maximum respect for individual confidentiality consistent 
with safety and security issues;
    (4) Provision for identifying illegal drug users, including testing 
on a controlled and carefully monitored basis. Employee drug testing 
programs shall be established taking account of the following:
    (i) The Contractor shall establish a program that provides for 
testing for the use of illegal drugs by employees in sensitive 
positions. The extent of and criteria for such testing shall be 
determined by the Contractor based on considerations that include the 
nature of the work being performed under the contract, the employee's 
duties, the efficient use of Contractor resources, and the risks to 
health, safety, or national security that could result from the failure 
of an employee adequately to discharge his or her position.
    (ii) In addition, the Contractor may establish a program for 
employee drug testing--
    (A) When there is a reasonable suspicion that an employee uses 
illegal drugs; or
    (B) When an employee has been involved in an accident or unsafe 
practice;
    (C) As part of or as a follow-up to counseling or rehabilitation for 
illegal drug use;
    (D) As part of a voluntary employee drug testing program.
    (iii) The Contractor may establish a program to test applicants for 
employment for illegal drug use.
    (iv) For the purpose of administering this clause, testing for 
illegal drugs may be limited to those substances for which testing is 
prescribed by section 2.1 of subpart B of the ``Mandatory Guidelines for 
Federal Workplace Drug Testing Programs'' (53 FR 11980 (April 11 1988)), 
issued by the Department of Health and Human Services.
    (d) Contractors shall adopt appropriate personnel procedures to deal 
with employees who are found to be using drugs illegally. Contractors 
shall not allow any employee to remain on duty or perform in a sensitive 
position who is found to use illegal drugs until such times as the 
Contractor, in accordance with procedures established by the Contractor, 
determines that the employee may perform in such a position.
    (e) The provisions of this clause pertaining to drug testing program 
shall not apply to the extent they are inconsistent with state or local 
law, or with an existing collective bargaining agreement; provided that 
with respect to the latter, the Contractor agrees that those issues that 
are in conflict will be a subject of negotiation at the next collective 
bargaining session.

                             (End of clause)

[57 FR 32737, July 23, 1992, as amended at 70 FR 73151, Dec. 9, 2005]



Sec. 252.223-7005  [Reserved]



Sec. 252.223-7006  Prohibition on storage and disposal of toxic and 
          hazardous materials.

    As prescribed in 223.7103(a), use the following clause:

  Prohibition on Storage and Disposal of Toxic and Hazardous Materials 
                               (APR 1993)

    (a) Definitions.
    As used in this clause--
    (1) Storage means a non-transitory, semi-permanent or permanent 
holding, placement, or leaving of material. It does not include a 
temporary accumulation of a limited quantity of a material used in or a 
waste generated or resulting from authorized activities, such as 
servicing, maintenance, or repair of Department of Defense (DoD) items, 
equipment, or facilities.
    (2) Toxic or hazardous materials means:
    (i) Materials referred to in section 101(14) of the Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 
(42 U.S.C. 9601(14)) and materials designated under section 102 of 
CERCLA (42 U.S.C. 9602) (40 CFR part 302);
    (ii) Materials that are of an explosive, flammable, or pyrotechnic 
nature; or
    (iii) Materials otherwise identified by the Secretary of Defense as 
specified in DoD regulations.
    (b) In accordance with 10 U.S.C. 2692, the Contractor is prohibited 
from storing or disposing of non-DoD-owned toxic or hazardous

[[Page 354]]

materials on a DoD installation, except to the extent authorized by a 
statutory exception to 10 U.S.C. 2692 or as authorized by the Secretary 
of Defense or his designee.

    Alternate I (NOV 1995). As prescribed in 223.7103(b), add the 
following paragraphs (c) and (d) to the basic clause:

    (c) With respect to treatment or disposal authorized pursuant to 10 
U.S.C. 2692(b)(9), and notwithstanding any other provision of the 
contract, the Contractor assumes all financial and environmental 
responsibility and liability resulting from any treatment or disposal of 
non-DoD-owned toxic or hazardous materials on a military installation. 
The Contractor shall indemnify, defend, and hold the Government harmless 
for all costs, liability, or penalties resulting from the Contractor's 
treatment or disposal of non-DoD-owned toxic or hazardous materials on a 
military installation.
    (d) The Contractor shall include this clause, including this 
paragraph (d), in each subcontract which requires, may require, or 
permits a subcontractor to treat or dispose of non-DoD-owned toxic or 
hazardous materials as defined in this clause.

[58 FR 28472, May 13, 1993, as amended at 60 FR 13076, Mar. 10, 1995; 60 
FR 61601, Nov. 30, 1995]



Sec. 252.223-7007  Safeguarding sensitive conventional arms, ammunition, 
          and explosives.

    As prescribed in 223.7203, use the following clause:

  Safeguarding Sensitive Conventional Arms, Ammunition, and Explosives 
                               (SEP 1999)

    (a) Definition. ``Arms, ammunition, and explosives (AA&E),'' as used 
in this clause, means those items within the scope (chapter 1, paragraph 
B) of DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, 
Ammunition, and Explosives.
    (b) The requirements of DoD 5100.76-M apply to the following items 
of AA&E being developed, produced, manufactured, or purchased for the 
Government, or provided to the Contractor as Government-furnished 
property under this contract:

------------------------------------------------------------------------
                                                  National
                 Nomenclature                      stock     Sensitivity
                                                   number      category
------------------------------------------------------------------------
 
 
------------------------------------------------------------------------

    (c) The Contractor shall comply with the requirements of DoD 
5100.76-M, as specified in the statement of work. The edition of DoD 
5100.76-M in effect on the date of issuance of the solicitation for this 
contract shall apply.
    (d) The Contractor shall allow representatives of the Defense 
Security Service (DSS), and representatives of other appropriate offices 
of the Government, access at all reasonable times into its facilities 
and those of its subcontractors, for the purpose of performing surveys, 
inspections, and investigations necessary to review compliance with the 
physical security standards applicable to this contract.
    (e) The Contractor shall notify the cognizant DSS field office of 
any subcontract involving AA&E within 10 days after award of the 
subcontract.
    (f) The Contractor shall ensure that the requirements of this clause 
are included in all subcontracts, at every tier--
    (1) For the development, production, manufacture, or purchase of 
AA&E or
    (2) When AA&E will be provided to the subcontractor as Government-
furnished property.
    (g) Nothing in this clause shall relieve the Contractor of its 
responsibility for complying with applicable Federal, state, and local 
laws, ordinances, codes, and regulations (including requirements for 
obtaining licenses and permits) in connection with the performance of 
this contract.

                             (End of clause)

[61 FR 7750, Feb. 29, 1996, as amended at 64 FR 51077, Sept. 21, 1999]



Sec. 252.225-7000  Buy American Act--Balance of Payments Program 
          Certificate.

    As prescribed in 225.1101(1), use the following provision:

  Buy American Act--Balance of Payments Program Certificate (JUN 2005)

    (a) Definitions. Domestic end product, foreign end product, 
qualifying country, qualifying country end product, and United States 
have the meanings given in the Buy American Act and Balance of Payments 
Program clause of this solicitation.
    (b) Evaluation. The Government--
    (1) Will evaluate offers in accordance with the policies and 
procedures of Part 225 of the Defense Federal Acquisition Regulation 
Supplement; and
    (2) Will evaluate offers of qualifying country end products without 
regard to the restrictions of the Buy American Act or the Balance of 
Payments Program.
    (c) Certifications and identification of country of origin. (1) For 
all line items subject to the Buy American Act and Balance of Payments 
Program clause of this solicitation, the offeror certifies that--
    (i) Each end product, except those listed in paragraph (c)(2) or (3) 
of this provision, is a domestic end product; and

[[Page 355]]

    (ii) Components of unknown origin are considered to have been mined, 
produced, or manufactured outside the United States or a qualifying 
country.
    (2) The offeror certifies that the following end products are 
qualifying country end products:

________________________________________________________________________
(Line Item Number)

________________________________________________________________________
(Country of Origin)

    (3) The following end products are other foreign end products:

________________________________________________________________________
(Line Item Number)
________________________________________________________________________
(Country of Origin) (If known)

                           (End of provision)

[68 FR 15634, Mar. 31, 2003; 68 FR 25088, May 9, 2003, as amended at 70 
FR 35546, June 21, 2005]



Sec. 252.225-7001  Buy American Act and Balance of Payments Program.

    As prescribed in 225.1101(2), use the following clause:

       Buy American Act and Balance of Payments Program (JUN 2005)

    (a) Definitions. As used in this clause--
    (1) Component means an article, material, or supply incorporated 
directly into an end product.
    (2) Domestic end product means--
    (i) An unmanufactured end product that has been mined or produced in 
the United States; or
    (ii) An end product manufactured in the United States if the cost of 
its qualifying country components and its components that are mined, 
produced, or manufactured in the United States exceeds 50 percent of the 
cost of all its components. The cost of components includes 
transportation costs to the place of incorporation into the end product 
and U.S. duty (whether or not a duty-free entry certificate is issued). 
Scrap generated, collected, and prepared for processing in the United 
States is considered domestic. A component is considered to have been 
mined, produced, or manufactured in the United States (regardless of its 
source in fact) if the end product in which it is incorporated is 
manufactured in the United States and the component is of a class or 
kind for which the Government has determined that--
    (A) Sufficient and reasonably available commercial quantities of a 
satisfactory quality are not mined, produced, or manufactured in the 
United States; or
    (B) It is inconsistent with the public interest to apply the 
restrictions of the Buy American Act.
    (3) End product means those articles, materials, and supplies to be 
acquired under this contract for public use.
    (4) Foreign end product means an end product other than a domestic 
end product.
    (5) Qualifying country means any country set forth in subsection 
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
    (6) Qualifying country component means a component mined, produced, 
or manufactured in a qualifying country.
    (7) Qualifying country end product means--
    (i) An unmanufactured end product mined or produced in a qualifying 
country; or
    (ii) An end product manufactured in a qualifying country if the cost 
of the following types of components exceeds 50 percent of the cost of 
all its components:
    (A) Components mined, produced, or manufactured in a qualifying 
country.
    (B) Components mined, produced, or manufactured in the United 
States.
    (C) Components of foreign origin of a class or kind for which the 
Government has determined that sufficient and reasonably available 
commercial quantities of a satisfactory quality are not mined, produced, 
or manufactured in the United States.
    (8) United States means the 50 States, the District of Columbia, and 
outlying areas.
    (b) This clause implements the Buy American Act (41 U.S.C. Section 
10a-d). Unless otherwise specified, this clause applies to all line 
items in the contract.
    (c) The Contractor shall deliver only domestic end products unless, 
in its offer, it specified delivery of other end products in the Buy 
American Act--Balance of Payments Program Certificate provision of the 
solicitation. If the Contractor certified in its offer that it will 
deliver a qualifying country end product, the Contractor shall deliver a 
qualifying country end product or, at the Contractor's option, a 
domestic end product.
    (d) The contract price does not include duty for end products or 
components for which the Contractor will claim duty-free entry.

                             (End of clause)

[68 FR 15634, Mar. 31, 2003, as amended at 70 FR 35546, June 21, 2005]



Sec. 252.225-7002  Qualifying country sources as subcontractors.

    As prescribed in 225.1101(3), use the following clause:

         Qualifying Country Sources as Subcontractors (APR 2003)

    (a) Definition. Qualifying country, as used in this clause, means 
any country set forth in subsection 225.872-1 of the Defense Federal 
Acquisition Regulation (FAR) Supplement.

[[Page 356]]

    (b) Subject to the restrictions in section 225.872 of the Defense 
FAR Supplement, the Contractor shall not preclude qualifying country 
sources or U.S. sources from competing for subcontracts under this 
contract.

                             (End of clause)

[68 FR 15634, Mar. 31, 2003]



Sec. 252.225-7003  Report of intended performance outside the United 
          States and Canada--Submission with offer.

    As prescribed in 225.7204(a), use the following provision:

  Report of Intended Performance Outside the United States and Canada--
                    Submission With Offer (JUN 2005)

    (a) Definition. United States, as used in this provision, means the 
50 States, the District of Columbia, and outlying areas.
    (b) The offeror shall submit, with its offer, a report of intended 
performance outside the United States and Canada if--
    (1) The offer exceeds $10 million in value; and
    (2) The offeror is aware that the offeror or a first-tier 
subcontractor intends to perform any part of the contract outside the 
United States and Canada that--
    (i) Exceeds $500,000 in value; and
    (ii) Could be performed inside the United States or Canada.
    (c) Information to be reported includes that for--
    (1) Subcontracts;
    (2) Purchases; and
    (3) Intracompany transfers when transfers originate in a foreign 
location.
    (d) The offeror shall submit the report using--
    (1) DD Form 2139, Report of Contract Performance Outside the United 
States; or
    (2) A computer-generated report that contains all information 
required by DD Form 2139.
    (e) The offeror may obtain a copy of DD Form 2139 from the 
Contracting Officer or via the Internet at http://www.dtic.mil/whs/
directives/infomgt/forms/formsprogram.htm.

                           (End of provision)

[70 FR 20839, Apr. 22, 2005, as amended at 70 FR 35546, June 21, 2005]



Sec. 252.225-7004  Report of Intended Performance Outside the United 
          States and Canada--Submission after Award.

    As prescribed in 225.7204(b), use the following clause:

  Report of Intended Performance Outside the United States and Canada--
                    Submission After Award (JUN 2005)

    (a) Definition. United States, as used in this clause, means the 50 
States, the District of Columbia, and outlying areas.
    (b) Reporting requirement. The Contractor shall submit a report in 
accordance with this clause, if the Contractor or a first-tier 
subcontractor will perform any part of this contract outside the United 
States and Canada that--
    (1) Exceeds $500,000 in value; and
    (2) Could be performed inside the United States or Canada.
    (c) Submission of reports. The Contractor--
    (1) Shall submit a report as soon as practical after the information 
is known;
    (2) To the maximum extent practicable, shall submit a report 
regarding a first-tier subcontractor at least 30 days before award of 
the subcontract;
    (3) Need not resubmit information submitted with its offer, unless 
the information changes;
    (4) Shall submit all reports to the Contracting Officer; and
    (5) Shall submit a copy of each report to: Deputy Director of 
Defense Procurement and Acquisition Policy (Program Acquisition and 
International Contracting), OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-
3060.
    (d) Report format. The Contractor--
    (1) Shall submit reports using--
    (i) DD Form 2139, Report of Contract Performance Outside the United 
States; or
    (ii) A computer-generated report that contains all information 
required by DD Form 2139; and
    (2) May obtain copies of DD Form 2139 from the Contracting Officer 
or via the Internet at http://www.dtic.mil/whs/directives/infomgt/forms/
formsprogram.htm.

                             (End of clause)

[70 FR 20839, Apr. 22, 2005, as amended at 70 FR 35546, June 21, 2005]



Sec. 252.225-7005  Identification of expenditures in the United States.

    As prescribed in 225.1103(1), use the following clause:

     Identification of Expenditures in the United States (JUN 2005)

    (a) Definition. United States, as used in this clause, means the 50 
States, the District of Columbia, and outlying areas.
    (b) This clause applies only if the Contractor is--

[[Page 357]]

    (1) A concern incorporated in the United States (including a 
subsidiary that is incorporated in the United States, even if the parent 
corporation is not incorporated in the United States); or
    (2) An unincorporated concern having its principal place of business 
in the United States.
    (c) On each invoice, voucher, or other request for payment under 
this contract, the Contractor shall identify that part of the requested 
payment that represents estimated expenditures in the United States. The 
identification--
    (1) May be expressed either as dollar amounts or as percentages of 
the total amount of the request for payment;
    (2) Should be based on reasonable estimates; and
    (3) Shall state the full amount of the payment requested, subdivided 
into the following categories:
    (i) U.S. products--expenditures for material and equipment 
manufactured or produced in the United States, including end products, 
components, or construction material, but excluding transportation;
    (ii) U.S. services--expenditures for services performed in the 
United States, including all charges for overhead, other indirect costs, 
and profit under construction or service contracts;
    (iii) Transportation on U.S. carriers--expenditures for 
transportation furnished by U.S. flag, ocean, surface, and air carriers; 
and
    (iv) Expenditures not identified under paragraphs (c)(3)(i) through 
(iii) of this clause.
    (d) Nothing in this clause requires the establishment or maintenance 
of detailed accounting records or gives the U.S. Government any right to 
audit the Contractor's books or records.

                             (End of clause)

[67 FR 20695, Apr. 26, 2002, as amended at 70 FR 35546, June 21, 2005]



Sec. 252.225-7006  Quarterly reporting of actual contract performance 
          outside the United States.

    As prescribed in 225.7204(c), use the following clause:

 Quarterly Reporting of Actual Contract Performance Outside the United 
                            States (JUN 2005)

    (a) Definition. United States, as used in this clause, means the 50 
States, the District of Columbia, and outlying areas.
    (b) Reporting requirement. Except as provided in paragraph (c) of 
this clause, within 10 days after the end of each quarter of the 
Government's fiscal year, the Contractor shall report any subcontract, 
purchase, or intracompany transfer that--
    (1) Will be or has been performed outside the United States;
    (2) Exceeds the simplified acquisition threshold in Part 2 of the 
Federal Acquisition Regulation; and
    (3) Has not been identified in a report for a previous quarter.
    (c) Exception. Reporting under this clause is not required if--
    (1) A foreign place of performance is the principal place of 
performance of the contract; and
    (2) The Contractor specified the foreign place of performance in its 
offer.
    (d) Submission of reports. The Contractor shall submit the reports 
required by this clause to: Deputy Director of Defense Procurement and 
Acquisition Policy (Program Acquisition and International Contracting), 
OUSD(AT&L)DPAP(PAIC), Washington, DC 20301-3060.
    (e) Report format. The Contractor--
    (1) Shall submit reports using--
    (i) DD Form 2139, Report of Contract Performance Outside the United 
States; or
    (ii) A computer-generated report that contains all information 
required by DD Form 2139; and
    (2) May obtain copies of DD Form 2139 from the Contracting Officer 
or via the Internet at http://www.dtic.mil/whs/directives/infomgt/forms/
formsprogram.htm.
    (f) Subcontracts. The Contractor--
    (1) Shall include the substance of this clause in all first-tier 
subcontracts exceeding $500,000, except those for commercial items, 
construction, ores, natural gases, utilities, petroleum products and 
crudes, timber (logs), or subsistence;
    (2) Shall provide the number of this contract to its subcontractors 
required to submit reports under this clause; and
    (3) Shall require the subcontractor, with respect to performance of 
its subcontract, to comply with the requirements directed to the 
Contractor in paragraphs (b) through (e) of this clause.

                             (End of clause)

[70 FR 20840, Apr. 22, 2005, as amended at 70 FR 35546, June 21, 2005]



Sec. 252.225-7007  Prohibition on Acquisition of United States Munitions 
          List Items from Communist Chinese Military Companies.

    As prescribed in 225.1103(4), use the following clause:

[[Page 358]]

 Prohibition On Acquisition of United States Munitions List Items From 
             Communist Chinese Military Companies (SEP 2006)

    (a) Definitions. As used in this clause--
    Communist Chinese military company means any entity that is--
    (1) A part of the commercial or defense industrial base of the 
People's Republic of China; or
    (2) Owned or controlled by, or affiliated with, an element of the 
Government or armed forces of the People's Republic of China.
    United States Munitions List means the munitions list of the 
International Traffic in Arms Regulation in 22 CFR Part 121.
    (b) Any supplies or services covered by the United States Munitions 
List that are delivered under this contract may not be acquired, 
directly or indirectly, from a Communist Chinese military company.
    (c) The Contractor shall insert the substance of this clause, 
including this paragraph (c), in all subcontracts for items covered by 
the United States Munitions List.

                             (End of clause)

[71 FR 53046, Sept. 8, 2006]



Sec. 252.225-7008--252.225-7010  [Reserved]



Sec. 252.225-7011  Restriction on acquisition of supercomputers.

    As prescribed in 225.7012-3, use the following clause:

         Restriction on Acquisition of Supercomputers (JUN 2005)

    Supercomputers delivered under this contract shall be manufactured 
in the United States or its outlying areas.

                             (End of clause)

[70 FR 35547, June 21, 2005]



Sec. 252.225-7012  Preference for certain domestic commodities.

    As prescribed in 225.7002-3(a), use the following clause:

         Preference for Certain Domestic Commodities (JUN 2004)

    (a) Definitions. As used in this clause--
    (1) Component means any item supplied to the Government as part of 
an end product or of another component.
    (2) End product means supplies delivered under a line item of this 
contract.
    (3) United States means the 50 States, the District of Columbia, and 
outlying areas.
    (4) U.S.-flag vessel means a vessel of the United States or 
belonging to the United States, including any vessel registered or 
having national status under the laws of the United States.
    (b) The Contractor shall deliver under this contract only such of 
the following items, either as end products or components, that have 
been grown, reprocessed, reused, or produced in the United States:
    (1) Food.
    (2) Clothing.
    (3) Tents, tarpaulins, or covers.
    (4) Cotton and other natural fiber products.
    (5) Woven silk or woven silk blends.
    (6) Spun silk yarn for cartridge cloth.
    (7) Synthetic fabric, and coated synthetic fabric, including all 
textile fibers and yarns that are for use in such fabrics.
    (8) Canvas products.
    (9) Wool (whether in the form of fiber or yarn or contained in 
fabrics, materials, or manufactured articles).
    (10) Any item of individual equipment (Federal Supply Class 8465) 
manufactured from or containing fibers, yarns, fabrics, or materials 
listed in this paragraph (b).
    (c) This clause does not apply--
    (1) To items listed in section 25.104(a) of the Federal Acquisition 
Regulation (FAR), or other items for which the Government has determined 
that a satisfactory quality and sufficient quantity cannot be acquired 
as and when needed at U.S. market prices;
    (2) To end products incidentally incorporating cotton, other natural 
fibers, or wool, for which the estimated value of the cotton, other 
natural fibers, or wool--
    (i) Is not more than 10 percent of the total price of the end 
product; and
    (ii) Does not exceed the simplified acquisition threshold in FAR 
part 2;
    (3) To waste and byproducts of cotton or wool fiber for use in the 
production of propellants and explosives;
    (4) To foods, other than fish, shellfish, or seafood, that have been 
manufactured or processed in the United States, regardless of where the 
foods (and any component if applicable) were grown or produced. Fish, 
shellfish, or seafood manufactured or processed in the United States and 
fish, shellfish, or seafood contained in foods manufactured or processed 
in the United States shall be provided in accordance with paragraph (d) 
of this clause;
    (5) To chemical warfare protective clothing produced in the 
countries listed in subsection 225.872-1 of the Defense FAR Supplement; 
or
    (6) To fibers and yarns that are for use in synthetic fabric or 
coated synthetic fabric (but does apply to the synthetic or coated 
synthetic fabric itself), if--

[[Page 359]]

    (i) The fabric is to be used as a component of an end product that 
is not a textile product. Examples of textile products, made in whole or 
in part of fabric, include--
    (A) Draperies, floor coverings, furnishings, and bedding (Federal 
Supply Group 72, Household and Commercial Furnishings and Appliances);
    (B) Items made in whole or in part of fabric in Federal Supply Group 
83, Textile/leather/furs/apparel/findings/ tents/flags, or Federal 
Supply Group 84, Clothing, Individual Equipment and Insignia;
    (C) Upholstered seats (whether for household, office, or other use); 
and
    (D) Parachutes (Federal Supply Class 1670); or
    (ii) The fibers and yarns are para-aramid fibers and yarns 
manufactured in the Netherlands.
    (d)(1) Fish, shellfish, and seafood delivered under this contract, 
or contained in foods delivered under this contract--
    (i) Shall be taken from the sea by U.S.-flag vessels; or
    (ii) If not taken from the sea, shall be obtained from fishing 
within the United States; and
    (2) Any processing or manufacturing of the fish, shellfish, or 
seafood shall be performed on a U.S.-flag vessel or in the United 
States.

                             (End of clause)

[67 FR 20698, Apr. 26, 2002, as amended at 68 FR 7442, Feb. 14, 2003; 69 
FR 26509, May 13, 2004; 69 FR 31910, June 8, 2004]



Sec. 252.225-7013  Duty-free entry.

    As prescribed in 225.1101(4), use the following clause:

                       Duty-Free Entry (JUN 2006)

    (a) Definitions. As used in this clause--
    (1) Customs territory of the United States means the 50 States, the 
District of Columbia, and Puerto Rico.
    (2) Eligible product means--
    (i) Designated country end product as defined in the Trade 
Agreements clause of this contract;
    (ii) Free Trade Agreement country end product, other than a Moroccan 
end product, as defined in the Buy American Act-Free Trade Agreements-
Balance of Payments Program clause of this contract; or
    (iii) Canadian end product as defined in Alternate I of the Buy 
American Act-Free Trade Agreements-Balance of Payments Program clause of 
this contract.
    (3) Qualifying country and qualifying country end product have the 
meanings given in the Trade Agreements clause, the Buy American Act and 
Balance of Payments Program clause, or the Buy American Act--Free Trade 
Agreements--Balance of Payments Program clause of this contract.
    (b) Except as provided in paragraph (i) of this clause, or unless 
supplies were imported into the customs territory of the United States 
before the date of this contract or the applicable subcontract, the 
price of this contract shall not include any amount for duty on--
    (1) End items that are eligible products or qualifying country end 
products;
    (2) Components (including, without limitation, raw materials and 
intermediate assemblies) produced or made in qualifying countries, that 
are to be incorporated in U.S.-made end products to be delivered under 
this contract; or
    (3) Other supplies for which the Contractor estimates that duty will 
exceed $200 per shipment into the customs territory of the United 
States.
    (c) The Contractor shall--
    (1) Claim duty-free entry only for supplies that the Contractor 
intends to deliver to the Government under this contract, either as end 
items or components of end items; and
    (2) Pay duty on supplies, or any portion thereof, that are diverted 
to nongovernmental use, other than--
    (i) Scrap or salvage; or
    (ii) Competitive sale made, directed, or authorized by the 
Contracting Officer.
    (d) Except as the Contractor may otherwise agree, the Government 
will execute duty-free entry certificates and will afford such 
assistance as appropriate to obtain the duty-free entry of supplies--
    (1) For which no duty is included in the contract price in 
accordance with paragraph (b) of this clause; and
    (2) For which shipping documents bear the notation specified in 
paragraph (e) of this clause.
    (e) For foreign supplies for which the Government will issue duty-
free entry certificates in accordance with this clause, shipping 
documents submitted to Customs shall--
    (1) Consign the shipments to the appropriate--
    (i) Military department in care of the Contractor, including the 
Contractor's delivery address; or
    (ii) Military installation; and
    (2) Include the following information:
    (i) Prime contract number and, if applicable, delivery order number.
    (ii) Number of the subcontract for foreign supplies, if applicable.
    (iii) Identification of the carrier.
    (iv) (A) For direct shipments to a U.S. military installation, the 
notation: ``UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free 
Entry to be claimed pursuant to Section XXII, Chapter 98, Subchapter 
VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the

[[Page 360]]

United States. Upon arrival of shipment at the appropriate port of 
entry, District Director of Customs, please release shipment under 19 
CFR part 142 and notify Commander, Defense Contract Management Agency 
(DCMA) New York, ATTN: Customs Team, DCMAE-GNTF, 207 New York Avenue, 
Staten Island, New York, 10305-5013, for execution of Customs Form 7501, 
7501A, or 7506 and any required duty-free entry certificates.''
    (B) If the shipment will be consigned to other than a military 
installation, e.g., a domestic contractor's plant, the shipping document 
notation shall be altered to include the name and address of the 
contractor, agent, or broker who will notify Commander, DCMA New York, 
for execution of the duty-free entry certificate. (If the shipment will 
be consigned to a contractor's plant and no duty-free entry certificate 
is required due to a trade agreement, the Contractor shall claim duty-
free entry under the applicable trade agreement and shall comply with 
the U.S. Customs Service requirements. No notification to Commander, 
DCMA New York, is required.)
    (v) Gross weight in pounds (if freight is based on space tonnage, 
state cubic feet in addition to gross shipping weight).
    (vi) Estimated value in U.S. dollars.
    (vii) Activity address number of the contract administration office 
administering the prime contract, e.g., for DCMA Dayton, S3605A.
    (f) Preparation of customs forms. (1)(i) Except for shipments 
consigned to a military installation, the Contractor shall--
    (A) Prepare any customs forms required for the entry of foreign 
supplies into the customs territory of the United States in connection 
with this contract; and
    (B) Submit the completed customs forms to the District Director of 
Customs, with a copy to DCMA NY for execution of any required duty-free 
entry certificates.
    (ii) Shipments consigned directly to a military installation will be 
released in accordance with sections 10.101 and 10.102 of the U.S. 
Customs regulations.
    (2) For shipments containing both supplies that are to be accorded 
duty-free entry and supplies that are not, the Contractor shall identify 
on the customs forms those items that are eligible for duty-free entry.
    (g) The Contractor shall--
    (1) Prepare (if the Contractor is a foreign supplier), or shall 
instruct the foreign supplier to prepare, a sufficient number of copies 
of the bill of lading (or other shipping document) so that at least two 
of the copies accompanying the shipment will be available for use by the 
District Director of Customs at the port of entry;
    (2) Consign the shipment as specified in paragraph (e) of this 
clause; and
    (3) Mark on the exterior of all packages--
    (i) ``UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE''; and
    (ii) The activity address number of the contract administration 
office administering the prime contract.
    (h) The Contractor shall notify the Administrative Contracting 
Officer (ACO) in writing of any purchase of eligible products or 
qualifying country supplies to be accorded duty-free entry, that are to 
be imported into the customs territory of the United States for delivery 
to the Government or for incorporation in end items to be delivered to 
the Government. The Contractor shall furnish the notice to the ACO 
immediately upon award to the supplier and shall include in the notice--
    (1) The Contractor's name, address, and Commercial and Government 
Entity (CAGE) code;
    (2) Prime contract number and, if applicable, delivery order number;
    (3) Total dollar value of the prime contract or delivery order;
    (4) Date of the last scheduled delivery under the prime contract or 
delivery order;
    (5) Foreign supplier's name and address;
    (6) Number of the subcontract for foreign supplies;
    (7) Total dollar value of the subcontract for foreign supplies;
    (8) Date of the last scheduled delivery under the subcontract for 
foreign supplies;
    (9) List of items purchased;
    (10) An agreement that the Contractor will pay duty on supplies, or 
any portion thereof, that are diverted to nongovernmental use other 
than--
    (i) Scrap or salvage; or
    (ii) Competitive sale made, directed, or authorized by the 
Contracting Officer;
    (11) Country of origin; and
    (12) Scheduled delivery date(s).
    (i) This clause does not apply to purchases of eligible products or 
qualifying country supplies in connection with this contract if--
    (1) The supplies are identical in nature to supplies purchased by 
the Contractor or any subcontractor in connection with its commercial 
business; and
    (2) It is not economical or feasible to account for such supplies so 
as to ensure that the amount of the supplies for which duty-free entry 
is claimed does not exceed the amount purchased in connection with this 
contract.
    (j) The Contractor shall--
    (1) Insert the substance of this clause, including this paragraph 
(j), in all subcontracts for--
    (i) Qualifying country components; or
    (ii) Nonqualifying country components for which the Contractor 
estimates that duty will exceed $200 per unit;
    (2) Require subcontractors to include the number of this contract on 
all shipping documents submitted to Customs for supplies for

[[Page 361]]

which duty-free entry is claimed pursuant to this clause; and
    (3) Include in applicable subcontracts--
    (i) The name and address of the ACO for this contract;
    (ii) The name, address, and activity address number of the contract 
administration office specified in this contract; and
    (iii) The information required by paragraphs (h)(1), (2), and (3) of 
this clause.

                             (End of clause)

[68 FR 15635, Mar. 31, 2003, as amended at 69 FR 1928, Jan. 13, 2004; 70 
FR 2363, Jan. 13, 2005; 70 FR 35547, June 21, 2005; 71 FR 34835, June 
16, 2006]



Sec. 252.225-7014  Preference for domestic specialty metals.

    As prescribed in 225.7002-3(b)(1), use the following clause:

           Preference for Domestic Specialty Metals (JUN 2005)

    (a) Definitions. As used in this clause--
    (1) Qualifying country means any country listed in subsection 
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
    (2) Specialty metals means--
    (i) Steel--
    (A) With a maximum alloy content exceeding one or more of the 
following limits: manganese, 1.65 percent; silicon, 0.60 percent; or 
copper, 0.60 percent; or
    (B) Containing more than 0.25 percent of any of the following 
elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, 
titanium, tungsten, or vanadium;
    (ii) Metal alloys consisting of nickel, iron-nickel, and cobalt base 
alloys containing a total of other alloying metals (except iron) in 
excess of 10 percent;
    (iii) Titanium and titanium alloys; or
    (iv) Zirconium and zirconium base alloys.
    (b) Any specialty metals incorporated in articles delivered under 
this contract shall be melted in the United States or its outlying 
areas.
    (c) This clause does not apply to specialty metals--
    (1) Melted in a qualifying country or incorporated in an article 
manufactured in a qualifying country; or
    (2) Purchased by a subcontractor at any tier.

                             (End of clause)

                         Alternate I (APR 2003)

    As prescribed in 225.7002-3(b)(2), substitute the following 
paragraph (c) for paragraph (c) of the basic clause, and add the 
following paragraph (d) to the basic clause:

    (c) This clause does not apply to specialty metals melted in a 
qualifying country or incorporated in an article manufactured in a 
qualifying country.
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in all subcontracts for items containing 
specialty metals.

[68 FR 15636, Mar. 31, 2003, as amended at 70 FR 35547, June 21, 2005]



Sec. 252.225-7015  Restriction on acquisition of hand or measuring 
          tools.

    As prescribed in 225.7002-3(c), use the following clause:

    Restriction on Acquisition of Hand or Measuring Tools (JUN 2005)

    Hand or measuring tools delivered under this contract shall be 
produced in the United States or its outlying areas.

                             (End of clause)

[70 FR 35547, June 21, 2005]



Sec. 252.225-7016  Restriction on Acquisition of Ball and Roller 
          Bearings.

    As prescribed in 225.7009-5, use the following clause:

    Restriction on Acquisition of Ball and Roller Bearings (MAR 2006)

    (a) Definitions. As used in this clause'
    (1) Bearing components means the bearing element, retainer, inner 
race, or outer race.
    (2) Component, other than bearing components, means any item 
supplied to the Government as part of an end product or of another 
component.
    (3) End product means supplies delivered under a line item of this 
contract.
    (b) Except as provided in paragraph (c) of this clause, all ball and 
roller bearings and ball and roller bearing components delivered under 
this contract, either as end items or components of end items, shall be 
wholly manufactured in the United States, its outlying areas, or Canada. 
Unless otherwise specified in this contract, raw materials, such as 
preformed bar, tube, or rod stock and lubricants, need not be mined or 
produced in the United States, its outlying areas, or Canada.
    (c) The restriction in paragraph (b) of this clause does not apply 
to ball or roller bearings that are acquired as--
    (1) Commercial components of a noncommercial end product; or
    (2) Commercial or noncommercial components of a commercial component 
of a noncommercial end product.
    (d) The restriction in paragraph (b) of this clause may be waived 
upon request from the

[[Page 362]]

Contractor in accordance with subsection 225.7009-4 of the Defense 
Federal Acquisition Regulation Supplement.
    (e) The Contractor shall insert the substance of this clause, 
including this paragraph (e), in all subcontracts, except those for--
    (1) Commercial items; or
    (2) Items that do not contain ball or roller bearings.

                             (End of clause)

[71 FR 14112, Mar. 21, 2006]



Sec. 252.225-7017  [Reserved]



Sec. 252.225-7018  Notice of prohibition of certain contracts with 
          foreign entities for the conduct of ballistic missile defense 
          research, development, test, and evaluation.

    As prescribed in 225.7017-4, use the following provision:

Notice of Prohibition of Certain Contracts With Foreign Entities for the 
 Conduct of Ballistic Missile Defense Research, Development, Test, and 
                          Evaluation (JUN 2005)

    (a) Definitions. (1) Competent means the ability of an offeror to 
satisfy the requirements of the solicitation. This determination is 
based on a comprehensive assessment of each offeror's proposal including 
consideration of the specific areas of evaluation criteria in the 
relative order of importance described in the solicitation.
    (2) Foreign firm means a business entity owned or controlled by one 
or more foreign nationals or a business entity in which more than 50 
percent of the stock is owned or controlled by one or more foreign 
nationals.
    (3) U.S. firm means a business entity other than a foreign firm.
    (b) Except as provided in paragraph (c) of this provision, the 
Department of Defense will not enter into or carry out any contract, 
including any contract awarded as a result of a broad agency 
announcement, with a foreign government or firm if the contract provides 
for the conduct of research, development, test, or evaluation in 
connection with the Ballistic Missile Defense Program. However, foreign 
governments and firms are encouraged to submit offers, since this 
provision is not intended to restrict access to unique foreign expertise 
if the contract will require a level of competency unavailable in the 
United States or its outlying areas.
    (c) This prohibition does not apply to a foreign government or firm 
if--
    (1) The contract will be performed within the United States or its 
outlying areas;
    (2) The contract is exclusively for research, development, test, or 
evaluation in connection with antitactical ballistic missile systems;
    (3) The foreign government or firm agrees to share a substantial 
portion of the total contract cost. The foreign share is considered 
substantial if it is equitable with respect to the relative benefits 
that the United States and the foreign parties will derive from the 
contract. For example, if the contract is more beneficial to the foreign 
party, its share of the costs should be correspondingly higher; or
    (4) The U.S. Government determines that a U.S. firm cannot 
competently perform the contract at a price equal to or less than the 
price at which a foreign government or firm can perform the contract.
    (d) The offeror (----) is (----) is not a U.S. firm.

                           (End of provision)

[68 FR 15637, Mar. 31, 2003, as amended at 70 FR 35547, June 21, 2005]



Sec. 252.225-7019  Restriction on acquisition of anchor and mooring 
          chain.

    As prescribed in 225.7007-3, use the following clause:

    Restriction on Acquisition of Anchor and Mooring Chain (JUN 2005)

    (a) Welded shipboard anchor and mooring chain, four inches or less 
in diameter, delivered under this contract--
    (1) Shall be manufactured in the United States or its outlying 
areas, including cutting, heat treating, quality control, testing, and 
welding (both forging and shot blasting process); and
    (2) The cost of the components manufactured in the United States or 
its outlying areas shall exceed 50 percent of the total cost of 
components.
    (b) The Contractor may request a waiver of this restriction if 
adequate domestic supplies meeting the requirements in paragraph (a) of 
this clause are not available to meet the contract delivery schedule.
    (c) The Contractor shall insert the substance of this clause, 
including this paragraph (c), in all subcontracts for items containing 
welded shipboard anchor and mooring chain, four inches or less in 
diameter.

                             (End of clause)

[68 FR 15637, Mar. 31, 2003, as amended at 70 FR 35547, June 21, 2005]



Sec. 252.225-7020  Trade Agreements Certificate.

    As prescribed in 225.1101(5), use the following provision:

[[Page 363]]

                 Trade Agreements Certificate (JAN 2005)

    (a) Definitions. Designated country end product, nondesignated 
country end product, qualifying country end product, and U.S.-made end 
product have the meanings given in the Trade Agreements clause of this 
solicitation.
    (b) Evaluation. The Government--
    (1) Will evaluate offers in accordance with the policies and 
procedures of part 225 of the Defense Federal Acquisition Regulation 
Supplement; and
    (2) Will consider only offers of end products that are U.S.-made, 
qualifying country, or designated country end products unless--
    (i) There are no offers of such end products;
    (ii) The offers of such end products are insufficient to fulfill the 
Government's requirements; or
    (iii) A national interest waiver has been granted.
    (c) Certification and identification of country of origin. (1) For 
all line items subject to the Trade Agreements clause of this 
solicitation, the offeror certifies that each end product to be 
delivered under this contract, except those listed in paragraph (c)(2) 
of this provision, is a U.S.-made, qualifying country, or designated 
country end product.
    (2) The following supplies are other nondesignated country end 
products:

(Line Item Number) (Country of Origin)

                           (End of provision)

[70 FR 2363, Jan. 13, 2005]



Sec. 252.225-7021  Trade agreements.

    As prescribed in 225.1101(6), use the following clause:

                       Trade Agreements (JUN 2006)

    (a) Definitions. As used in this clause--
    (1) Caribbean Basin country end product--
    (i) Means an article that--
    (A) Is wholly the growth, product, or manufacture of a Caribbean 
Basin country; or
    (B) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in a Caribbean Basin country into a new and 
different article of commerce with a name, character, or use distinct 
from that of the article or articles from which it was transformed. The 
term refers to a product offered for purchase under a supply contract, 
but for purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply, 
provided that the value of those incidental services does not exceed the 
value of the product itself; and
    (ii) Excludes products, other than petroleum and any product derived 
from petroleum, that are not granted duty-free treatment under the 
Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)). These 
exclusions presently consist of--
    (A) Textiles, apparel articles, footwear, handbags, luggage, flat 
goods, work gloves, leather wearing apparel, and handloomed, handmade, 
or folklore articles that are not granted duty-free status in the 
Harmonized Tariff Schedule of the United States (HTSUS);
    (B) Tuna, prepared or preserved in any manner in airtight 
containers; and
    (C) Watches and watch parts (including cases, bracelets, and straps) 
of whatever type, including, but not limited to, mechanical, quartz 
digital, or quartz analog, if such watches or watch parts contain any 
material that is the product of any country to which the HTSUS column 2 
rates of duty (HTSUS General Note 3(b)) apply.
    (2) Component means an article, material, or supply incorporated 
directly into an end product.
    (3) Designated country means--
    (i) A World Trade Organization Government Procurement Agreement (WTO 
GPA) country (Aruba, Austria, Belgium, Canada, Cyprus, Czech Republic, 
Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, 
Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, 
Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, 
Poland, Portugal, Singapore, Slovak Republic, Slovenia, Spain, Sweden, 
Switzerland, or the United Kingdom);
    (ii) A Free Trade Agreement country (Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
    (iii) A least developed country (Afghanistan, Angola, Bangladesh, 
Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central 
African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, 
East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, 
Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Madagascar, Malawi, 
Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao 
Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, 
Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia); or
    (iv) A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, 
Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, 
Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Jamaica, 
Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. 
Vincent and the Grenadines, or Trinidad and Tobago).
    (4) Designated country end product means a WTO GPA country end 
product, a Free Trade Agreement country end product, a least developed 
country end product, or a Caribbean Basin country end product.

[[Page 364]]

    (5) End product means those articles, materials, and supplies to be 
acquired under this contract for public use.
    (6) Free Trade Agreement country end product means an article that--
    (i) Is wholly the growth, product, or manufacture of a Free Trade 
Agreement country; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in a Free Trade Agreement country into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was 
transformed. The term refers to a product offered for purchase under a 
supply contract, but for purposes of calculating the value of the end 
product includes services (except transportation services) incidental to 
its supply, provided that the value of those incidental services does 
not exceed the value of the product itself.
    (7) Least developed country end product means an article that--
    (i) Is wholly the growth, product, or manufacture of a least 
developed country; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in a least developed country into a new and 
different article of commerce with a name, character, or use distinct 
from that of the article or articles from which it was transformed. The 
term refers to a product offered for purchase under a supply contract, 
but for purposes of calculating the value of the end product includes 
services (except transportation services) incidental to its supply, 
provided that the value of those incidental services does not exceed the 
value of the product itself.
    (8) Nondesignated country end product means any end product that is 
not a U.S.-made end product or a designated country end product.
    (9) Qualifying country means any country set forth in subsection 
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
    (10) Qualifying country end product means--
    (i) An unmanufactured end product mined or produced in a qualifying 
country; or
    (ii) An end product manufactured in a qualifying country if the cost 
of the following types of components exceeds 50 percent of the cost of 
all its components:
    (A) Components mined, produced, or manufactured in a qualifying 
country.
    (B) Components mined, produced, or manufactured in the United 
States.
    (C) Components of foreign origin of a class or kind for which the 
Government has determined that sufficient and reasonably available 
commercial quantities of a satisfactory quality are not mined, produced, 
or manufactured in the United States.
    (11) United States means the 50 States, the District of Columbia, 
and outlying areas.
    (12) U.S.-made end product means an article that--
    (i) Is mined, produced, or manufactured in the United States; or
    (ii) Is substantially transformed in the United States into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was 
transformed.
    (b) Unless otherwise specified, this clause applies to all items in 
the Schedule.
    (c) The Contractor shall deliver under this contract only U.S.-made, 
qualifying country, or designated country end products unless--
    (1) In its offer, the Contractor specified delivery of other 
nondesignated country end products in the Trade Agreements Certificate 
provision of the solicitation; and
    (2)(i) Offers of U.S.-made end products or qualifying, designated, 
Caribbean Basin, or Free Trade Agreement country end products from 
responsive, responsible offerors are either not received or are 
insufficient to fill the Government's requirements; or
    (ii) A national interest waiver has been granted.
    (d) The contract price does not include duty for end products or 
components for which the Contractor will claim duty-free entry.
    (e) The HTSUS is available on the Internet at http://
www.customs.ustreas.gov/impoexpo/impoexpo.htm. The following sections of 
the HTSUS provide information regarding duty-free status of articles 
specified in paragraph (a)(2)(ii)(A) of this clause:
    (1) General Note 3(c), Products Eligible for Special Tariff 
Treatment.
    (2) General Note 17, Products of Countries Designated as Beneficiary 
Countries Under the United States-Caribbean Basin Trade Partnership Act 
of 2000.
    (3) Section XXII, Chapter 98, Subchapter II, Articles Exported and 
Returned, Advanced or Improved Abroad, U.S. Note 7(b).
    (4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for 
Special Tariff Benefits Under the United States-Caribbean Basin Trade 
Partnership Act.

                             (End of clause)

[68 FR 15637, Mar. 31, 2003, as amended at 68 FR 50477, Aug. 21, 2003; 
69 FR 1928, Jan. 13, 2004; 69 FR 35535, June 25, 2004; 69 FR 74992, Dec. 
15, 2004; 70 FR 2364, Jan. 13, 2005; 70 FR 35547, June 21, 2005; 70 FR 
73153, Dec. 9, 2005; 71 FR 9271, Feb. 23, 2006; 71 FR 34835, June 16, 
2006]

[[Page 365]]



Sec. 252.225-7022  Restriction on acquisition of polyacrylonitrile (PAN) 
          carbon fiber.

    As prescribed in 225.7103-3, use the following clause:

Restriction on Acquisition of Polyacrylonitrile (PAN) Carbon Fiber (JUN 
                                  2005)

    (a) This clause applies if the end product furnished under this 
contract contains polyacrylonitrile carbon fibers (alternatively 
referred to as PAN-based carbon fibers or PAN-based graphite fibers).
    (b) PAN carbon fibers contained in the end product shall be 
manufactured in the United States, its outlying areas, or Canada using 
PAN precursor produced in the United States, its outlying areas, or 
Canada.
    (c) The Contracting Officer may waive the requirement in paragraph 
(b) of this clause in whole or in part. The Contractor may request a 
waiver from the Contracting Officer by identifying the circumstances and 
including a plan to qualify U.S. or Canadian sources expeditiously.

                             (End of clause)

[62 FR 34131, June 24, 1997, as amended at 68 FR 15639, Mar. 31, 2003; 
70 FR 35547, June 21, 2005]



Sec. 252.225-7023  Restriction on acquisition of vessel propellers.

    As prescribed in 225.7010-4, use the following clause:

       Restriction on Acquisition of Vessel Propellers (SEP 2006)

    (a) Except as provided in paragraph (b) of this clause, the 
Contractor shall deliver under this contract, whether as end items or 
components of end items, vessel propellers--
    (1) Manufactured in the United States, its outlying areas, or 
Canada; and
    (2) For which all component castings were poured and finished in the 
United States, its outlying areas, or Canada.
    (b) The restriction in paragraph (a) of this clause--
    (1) Does not apply to vessel propellers that are commercial items; 
and
    (2) For other than commercial items, may be waived upon request from 
the Contractor in accordance with subsection 225.7010-3 of the Defense 
Federal Acquisition Regulation Supplement.

                             (End of clause)

[65 FR 77829, Dec. 13, 2000, as amended at 68 FR 15639, Mar. 31, 2003; 
70 FR 35548, June 21, 2005; 71 FR 53044, Sept. 8, 2006]



Sec. 252.225-7024  [Reserved]



Sec. 252.225-7025  Restriction on acquisition of forgings.

    As prescribed in 225.7102-4, use the following clause:

            Restriction on Acquisition of Forgings (JUL 2006)

    (a) Definitions. As used in this clause--
    (1) Domestic manufacture means--
    (i) Manufactured in the United States or its outlying areas; or
    (ii) Manufactured in Canada, if the Canadian firm normally produces 
similar items or is currently producing the item in support of DoD 
contracts (as a contractor or a subcontractor).
    (2) Forging items means--

------------------------------------------------------------------------
                   Items                             Categories
------------------------------------------------------------------------
Ship propulsion shafts....................  Excludes service and landing
                                             craft shafts.
Periscope tubes...........................  All.
Ring forgings for bull gears..............  All greater than 120 inches
                                             in diameter.
------------------------------------------------------------------------

    (b) End items and their components delivered under this contract 
shall contain forging items that are of domestic manufacture only.
    (c) The restriction in paragraph (b) of this clause may be waived 
upon request from the Contractor in accordance with subsection 225.7102-
3 of the Defense Federal Acquisition Regulation Supplement.
    (d) The Contractor shall retain records showing compliance with the 
restriction in paragraph (b) of this clause until 3 years after final 
payment and shall make the records available upon request of the 
Contracting Officer.
    (e) The Contractor shall insert the substance of this clause, 
including this paragraph (e), in subcontracts for forging items or for 
other items that contain forging items.

                             (End of clause)

[68 FR 15639, Mar. 31, 2003, as amended at 70 FR 35548, June 21, 2005; 
71 FR 39005, July 11, 2006]



Sec. 252.225-7026  [Reserved]



Sec. 252.225-7027  Restriction on contingent fees for foreign military 
          sales.

    As prescribed in 225.7307(a), use the following clause.

  Restriction on Contingent Fees for Foreign Military Sales (APR 2003)

    (a) Except as provided in paragraph (b) of this clause, contingent 
fees, as defined in the

[[Page 366]]

Covenant Against Contingent Fees clause of this contract, are generally 
an allowable cost, provided the fees are paid to--
    (1) A bona fide employee of the Contractor; or
    (2) A bona fide established commercial or selling agency maintained 
by the Contractor for the purpose of securing business.
    (b) For foreign military sales, unless the contingent fees have been 
identified and payment approved in writing by the foreign customer 
before contract award, the following contingent fees are unallowable 
under this contract:
    (1) For sales to the Government(s) of ----------------------------, 
contingent fees in any amount.
    (2) For sales to Governments not listed in paragraph (b)(1) of this 
clause, contingent fees exceeding $50,000 per foreign military sale 
case.

                             (End of clause)

[68 FR 15639, Mar. 31, 2003, as amended at 70 FR 73156, Dec. 9, 2005]



Sec. 252.225-7028  Exclusionary policies and practices of foreign 
          governments.

    As prescribed in 225.7307(b), use the following clause:

  Exclusionary Policies and Practices of Foreign Governments (APR 2003)

    The Contractor and its subcontractors shall not take into account 
the exclusionary policies or practices of any foreign government in 
employing or assigning personnel, if--
    (a) The personnel will perform functions required by this contract, 
either in the United States or abroad; and
    (b) The exclusionary policies or practices of the foreign government 
are based on race, religion, national origin, or sex.

                             (End of clause)

[68 FR 15639, Mar. 31, 2003, as amended at 70 FR 73156, Dec. 9, 2005]



Sec. 252.225-7029  [Reserved]



Sec. 252.225-7030  Restriction on acquisition of carbon, alloy, and 
          armor steel plate.

    As prescribed in 225.7011-3, use the following clause:

Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate (APR 
                                  2003)

    Carbon, alloy, and armor steel plate shall be melted and rolled in 
the United States or Canada if the carbon, alloy, or armor steel plate--
    (a) Is in Federal Supply Class 9515 or is described by 
specifications of the American Society for Testing Materials or the 
American Iron and Steel Institute; and
    (b) Will be delivered to the Government or will be purchased by the 
Contractor as a raw material for use in a Government-owned facility or a 
facility under the control of the Department of Defense.

                             (End of clause)

[68 FR 15639, Mar. 31, 2003]



Sec. 252.225-7031  Secondary Arab boycott of Israel.

    As prescribed in 225.7605, use the following provision:

               Secondary Arab Boycott of Israel (JUN 2005)

    (a) Definitions. As used in this provision--
    (1) Foreign person means any person (including any individual, 
partnership, corporation, or other form of association) other than a 
United States person.
    (2) United States means the 50 States, the District of Columbia, 
outlying areas, and the outer Continental Shelf as defined in 43 U.S.C. 
1331.
    (3) United States person is defined in 50 U.S.C. App. 2415(2) and 
means--
    (i) Any United States resident or national (other than an individual 
resident outside the United States who is employed by other than a 
United States person);
    (ii) Any domestic concern (including any permanent domestic 
establishment of any foreign concern); and
    (iii) Any foreign subsidiary or affiliate (including any permanent 
foreign establishment) of any domestic concern that is controlled in 
fact by such domestic concern.
    (b) Certification. If the offeror is a foreign person, the offeror 
certifies, by submission of an offer, that it--
    (1) Does not comply with the Secondary Arab Boycott of Israel; and
    (2) Is not taking or knowingly agreeing to take any action, with 
respect to the Secondary Boycott of Israel by Arab countries, which 50 
U.S.C. App. 2407(a) prohibits a United States person from taking.

                           (End of provision)

[68 FR 15639, Mar. 31, 2003, as amended at 70 FR 35548, June 21, 2005; 
71 FR 39006, July 11, 2006]

[[Page 367]]



Sec. 252.225-7032  Waiver of United Kingdom Levies--Evaluation of 
          offers.

    As prescribed in 225.1101(7), use the following provision:

    Waiver of United Kingdom Levies--Evaluation of Offers (APR 2003)

    (a) Offered prices for contracts or subcontracts with United Kingdom 
(U.K.) firms may contain commercial exploitation levies assessed by the 
Government of the U.K. The offeror shall identify to the Contracting 
Officer all levies included in the offered price by describing--
    (1) The name of the U.K. firm;
    (2) The item to which the levy applies and the item quantity; and
    (3) The amount of levy plus any associated indirect costs and profit 
or fee.
    (b) In the event of difficulty in identifying levies included in a 
price from a prospective subcontractor, the offeror may seek advice 
through the Director of Procurement, United Kingdom Defence Procurement 
Office, British Embassy, 3100 Massachusetts Avenue NW., Washington, DC 
20006.
    (c) The U.S. Government may attempt to obtain a waiver of levies 
pursuant to the U.S./U.K. reciprocal waiver agreement of July 1987.
    (1) If the U.K. waives levies before award of a contract, the 
Contracting Officer will evaluate the offer without the levy.
    (2) If levies are identified but not waived before award of a 
contract, the Contracting Officer will evaluate the offer inclusive of 
the levies.
    (3) If the U.K. grants a waiver of levies after award of a contract, 
the U.S. Government reserves the right to reduce the contract price by 
the amount of the levy waived plus associated indirect costs and profit 
or fee.

                           (End of provision)

[68 FR 15639, Mar. 31, 2003]



Sec. 252.225-7033  Waiver of United Kingdom levies.

    As prescribed in 225.1101(8), use the following clause:

               Waiver of United Kingdom Levies (APR 2003)

    (a) The U.S. Government may attempt to obtain a waiver of any 
commercial exploitation levies included in the price of this contract, 
pursuant to the U.S./United Kingdom (U.K.) reciprocal waiver agreement 
of July 1987. If the U.K. grants a waiver of levies included in the 
price of this contract, the U.S. Government reserves the right to reduce 
the contract price by the amount of the levy waived plus associated 
indirect costs and profit or fee.
    (b) If the Contractor contemplates award of a subcontract exceeding 
$1 million to a U.K. firm, the Contractor shall provide the following 
information to the Contracting Officer before award of the subcontract:
    (1) Name of the U.K. firm.
    (2) Prime contract number.
    (3) Description of item to which the levy applies.
    (4) Quantity being acquired.
    (5) Amount of levy plus any associated indirect costs and profit or 
fee.
    (c) In the event of difficulty in identifying levies included in a 
price from a prospective subcontractor, the Contractor may seek advice 
through the Director of Procurement, United Kingdom Defence Procurement 
Office, British Embassy, 3100 Massachusetts Avenue NW., Washington, DC 
20006.
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in any subcontract for supplies where a 
lower-tier subcontract exceeding $1 million with a U.K. firm is 
anticipated.

                             (End of clause)

[68 FR 15639, Mar. 31, 2003]



Sec. 252.225-7034  [Reserved]



Sec. 252.225-7035  Buy American Act--Free Trade Agreements--Balance of 
          Payments Program Certificate.

    As prescribed in 225.1101(9), use the following provision:

  Buy American Act--Free Trade Agreements--Balance of Payments Program 
                         Certificate (JUN 2006)

    (a) Definitions. Domestic end product, Free Trade Agreement country, 
Free Trade Agreement country end product, foreign end product, Moroccan 
end product, qualifying country end product, and United States have the 
meanings given in the Buy American Act-Free Trade Agreements-Balance of 
Payments Program clause of this solicitation.
    (b) Evaluation. The Government--
    (1) Will evaluate offers in accordance with the policies and 
procedures of part 225 of the Defense Federal Acquisition Regulation 
Supplement; and
    (2) For line items subject to Free Trade Agreements, will evaluate 
offers of qualifying country end products or Free Trade Agreement 
country end products other than Moroccan end products without regard to 
the restrictions of the Buy American Act or the Balance of Payments 
Program.
    (c) Certifications and identification of country of origin. (1) For 
all line items subject to

[[Page 368]]

the Buy American Act--Free Trade Agreements--Balance of Payments Program 
clause of this solicitation, the offeror certifies that--
    (i) Each end product, except the end products listed in paragraph 
(c)(2) of this provision, is a domestic end product; and
    (ii) Components of unknown origin are considered to have been mined, 
produced, or manufactured outside the United States or a qualifying 
country.
    (2) The offeror shall identify all end products that are not 
domestic end products.
    (i) The offeror certifies that the following supplies are qualifying 
country (except Australian or Canadian) end products:

(Line Item Number) (Country of Origin)

    (ii) The offeror certifies that the following supplies are Free 
Trade Agreement country end products other than Moroccan end products:

(Line Item Number) (Country of Origin)

    (iii) The following supplies are other foreign end products, 
including end products manufactured in the United States that do not 
qualify as domestic end products.

(Line Item Number) (Country of Origin (If known))

                           (End of provision)

    Alternate I (JUN 2006)
    As prescribed in 225.1101(9), substitute the phrase ``Canadian end 
product'' for the phrases ``Free Trade Agreement country'', ``Free Trade 
Agreement country end product'', and ``Moroccan end product'' in 
paragraph (a) of the basic provision; and substitute the phrase 
``Canadian end products'' for the phrase ``Free Trade Agreement country 
end products other than Moroccan end products'' in paragraphs (b)(2) and 
(c)(2)(ii) of the basic provision.

[70 FR 2364, Jan. 13, 2005, as amended at 71 FR 34835, June 16, 2006]



Sec. 252.225-7036  Buy American Act--Free Trade Agreements--Balance of 
          Payments Program.

    As prescribed in 225.1101(10)(i), use the following clause:

  Buy American Act--Free Trade Agreements--Balance of Payments Program 
                               (JUN 2006)

    (a) Definitions. As used in this clause--
    (1) Component means an article, material, or supply incorporated 
directly into an end product.
    (2) Domestic end product means--
    (i) An unmanufactured end product that has been mined or produced in 
the United States; or
    (ii) An end product manufactured in the United States if the cost of 
its qualifying country components and its components that are mined, 
produced, or manufactured in the United States exceeds 50 percent of the 
cost of all its components. The cost of components includes 
transportation costs to the place of incorporation into the end product 
and U.S. duty (whether or not a duty-free entry certificate is issued). 
Scrap generated, collected, and prepared for processing in the United 
States is considered domestic. A component is considered to have been 
mined, produced, or manufactured in the United States (regardless of its 
source in fact) if the end product in which it is incorporated is 
manufactured in the United States and the component is of a class or 
kind for which the Government has determined that--
    (A) Sufficient and reasonably available commercial quantities of a 
satisfactory quality are not mined, produced, or manufactured in the 
United States; or
    (B) It is inconsistent with the public interest to apply the 
restrictions of the Buy American Act.
    (3) End product means those articles, materials, and supplies to be 
acquired under this contract for public use.
    (4) Foreign end product means an end product other than a domestic 
end product.
    (5) Free Trade Agreement country means Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore;
    (6) Free Trade Agreement country end product means an article that--
    (i) Is wholly the growth, product, or manufacture of a Free Trade 
Agreement country; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in a Free Trade Agreement country into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was 
transformed. The term refers to a product offered for purchase under a 
supply contract, but for purposes of calculating the value of the end 
product includes services (except transportation services) incidental to 
its supply, provided that the value of those incidental services does 
not exceed the value of the product itself.
    (7) Moroccan end product means an article that--
    (i) Is wholly the growth, product, or manufacture of Morocco; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in Morocco into a new and different article of 
commerce with a

[[Page 369]]

name, character, or use distinct from that of the article or articles 
from which it was transformed. The term refers to a product offered for 
purchase under a supply contract, but for purposes of calculating the 
value of the end product includes services (except transportation 
services) incidental to its supply, provided that the value of those 
incidental services does not exceed the value of the product itself.
    (8) Qualifying country means any country set forth in subsection 
225.872-1 of the Defense Federal Acquisition Regulation Supplement.
    (9) Qualifying country component means a component mined, produced, 
or manufactured in a qualifying country.
    (10) Qualifying country end product means--
    (i) An unmanufactured end product mined or produced in a qualifying 
country; or
    (ii) An end product manufactured in a qualifying country if the cost 
of the following types of components exceeds 50 percent of the cost of 
all its components:
    (A) Components mined, produced, or manufactured in a qualifying 
country.
    (B) Components mined, produced, or manufactured in the United 
States.
    (C) Components of foreign origin of a class or kind for which the 
Government has determined that sufficient and reasonably available 
commercial quantities of a satisfactory quality are not mined, produced, 
or manufactured in the United States.
    (11) United States means the 50 States, the District of Columbia, 
and outlying areas.
    (b) Unless otherwise specified, this clause applies to all items in 
the Schedule.
    (c) The Contractor shall deliver under this contract only domestic 
end products unless, in its offer, it specified delivery of qualifying 
country end products, Free Trade Agreement country end products other 
than Moroccan end products, or other foreign end products in the Buy 
American Act-Free Trade Agreements-Balance of Payments Program 
Certificate provision of the solicitation. If the Contractor certified 
in its offer that it will deliver a qualifying country end product or a 
Free Trade Agreement country end product other than a Moroccan end 
product, the Contractor shall deliver a qualifying country end product, 
a Free Trade Agreement country end product other than a Moroccan end 
product, or, at the Contractor's option, a domestic end product.
    (d) The contract price does not include duty for end products or 
components for which the Contractor will claim duty-free entry.

                             (End of clause)

                         Alternate I (JAN 2005)

    As prescribed in 225.1101(10)(i)(B), substitute the following 
paragraphs (a)(4) and (c) for paragraphs (a)(4) and (c) of the basic 
clause:

    (a)(4) Canadian end product means an article that--
    (i) Is wholly the growth, product, or manufacture of Canada; or
    (ii) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, has been 
substantially transformed in Canada into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was transformed. The term refers to a 
product offered for purchase under a supply contract, but for purposes 
of calculating the value of the end product includes services (except 
transportation services) incidental to its supply, provided that the 
value of those incidental services does not exceed the value of the 
product itself.
    (c) The Contractor shall deliver under this contract only domestic 
end products unless, in its offer, it specified delivery of qualifying 
country, Canadian, or other foreign end products in the Buy American 
Act--Free Trade Agreements--Balance of Payments Program Certificate 
provision of the solicitation. If the Contractor certified in its offer 
that it will deliver a qualifying country end product or a Canadian end 
product, the Contractor shall deliver a qualifying country end product, 
a Canadian end product, or, at the Contractor's option, a domestic end 
product.

[68 FR 15640, Mar. 31, 2003, as amended at 69 FR 1929, Jan. 13, 2004; 69 
FR 74992, Dec. 15, 2004; 70 FR 2365, Jan. 13, 2005; 70 FR 35548, June 
21, 2005; 71 FR 34835, June 16, 2006]



Sec. 252.225-7037  Evaluation of Offers for Air Circuit Breakers.

    As prescribed in 225.7006-4(a), use the following provision:

        Evaluation of Offers for Air Circuit Breakers (JUN 2005)

    (a) The offeror shall specify, in its offer, any intent to furnish 
air circuit breakers that are not manufactured in the United States or 
its outlying areas, Canada, or the United Kingdom.
    (b) The Contracting Officer will evaluate offers by adding a factor 
of 50 percent to the offered price of air circuit breakers that are not 
manufactured in the United States or its outlying areas, Canada, or the 
United Kingdom.

                           (End of provision)

[70 FR 35548, June 21, 2005]

[[Page 370]]



Sec. 252.225-7038  Restriction on Acquisition of Air Circuit Breakers.

    As prescribed in 225.7006-4(b), use the following clause:

      Restriction on Acquisition of Air Circuit Breakers (JUN 2005)

    Unless otherwise specified in its offer, the Contractor shall 
deliver under this contract air circuit breakers manufactured in the 
United States or its outlying areas, Canada, or the United Kingdom.

                             (End of clause)

[70 FR 35548, June 21, 2005]



Sec. 252.225-7039  [Reserved]



Sec. 252.225-7040  Contractor personnel authorized to accompany U.S. 
          Armed Forces deployed outside the United States.

    As prescribed in 225.7402-4(a), use the following clause:

Contractor Personnel Authorized To Accompany U.S. Armed Forces Deployed 
                  Outside The United States (JUN 2006)

    (a) Definitions. As used in this clause--
    Combatant Commander means the commander of a unified or specified 
combatant command established in accordance with 10 U.S.C. 161.
    Other military operations means a range of military force responses 
that can be projected to accomplish assigned tasks. Such operations may 
include one or a combination of the following: Civic action, 
humanitarian assistance, civil affairs, and other military activities to 
develop positive relationships with other countries; confidence building 
and other measures to reduce military tensions; military presence; 
activities to convey messages to adversaries; military deceptions and 
psychological operations; quarantines, blockades, and harassment 
operations; raids; intervention operations; armed conflict involving 
air, land, maritime, and strategic warfare operations; support for law 
enforcement authorities to counter international criminal activities 
(terrorism, narcotics trafficking, slavery, and piracy); support for law 
enforcement authorities to suppress domestic rebellion; and support for 
insurgency, counterinsurgency, and civil war in foreign countries.
    Theater of operations means an area defined by the combatant 
commander for the conduct or support of specified operations.
    (b) General.
    (1) This clause applies when Contractor personnel are authorized to 
accompany U.S. Armed Forces deployed outside the United States in--
    (i) Contingency operations;
    (ii) Humanitarian or peacekeeping operations;
    (iii) Other military operations; or
    (iv) Military exercises designated by the Combatant Commander.
    (2) Contract performance in support of U.S. Armed Forces deployed 
outside the United States may require work in dangerous or austere 
conditions. The Contractor accepts the risks associated with required 
contract performance in such operations.
    (3) Contractor personnel are civilians accompanying the U.S. Armed 
Forces.
    (i) Except as provided in paragraph (b)(3)(ii) of this clause, 
Contractor personnel are not authorized to use deadly force against 
enemy armed forces other than in self-defense.
    (ii) Private security Contractor personnel are authorized to use 
deadly force only when necessary to execute their security mission to 
protect assets/persons, consistent with the mission statement contained 
in their contract.
    (iii) Civilians who accompany the U.S. Armed Forces lose their law 
of war protection from direct attack if and for such time as they take a 
direct part in hostilities.
    (4) Service performed by Contractor personnel subject to this clause 
is not active duty or service under 38 U.S.C. 106 note.
    (c) Support. (1)(i) The Combatant Commander will develop a security 
plan for protection of Contractor personnel in locations where there is 
not sufficient or legitimate civil authority, when the Combatant 
Commander decides it is in the interests of the Government to provide 
security because--
    (A) The Contractor cannot obtain effective security services;
    (B) Effective security services are unavailable at a reasonable 
cost; or
    (C) Threat conditions necessitate security through military means.
    (ii) The Contracting Officer shall include in the contract the level 
of protection to be provided to Contractor personnel.
    (iii) In appropriate cases, the Combatant Commander may provide 
security through military means, commensurate with the level of security 
provided DoD civilians.
    (2)(i) Generally, all Contractor personnel authorized to accompany 
the U.S. Armed Forces in the theater of operations may be provided 
resuscitative care, stabilization, hospitalization at level III military 
treatment facilities, and assistance with patient movement in 
emergencies where loss of life, limb, or eyesight could occur. 
Hospitalization will be limited to stabilization and short-term medical 
treatment with an emphasis on return to duty or placement in the patient 
movement system.

[[Page 371]]

    (ii) When the Government provides medical treatment or 
transportation of Contractor personnel to a selected civilian facility, 
the Contractor shall ensure that the Government is reimbursed for any 
costs associated with such treatment or transportation.
    (iii) Medical or dental care beyond this standard is not authorized 
unless specified elsewhere in this contract.
    (3) Unless specified elsewhere in this contract, the Contractor is 
responsible for all other support required for its personnel engaged in 
the theater of operations under this contract.
    (4) Contractor personnel must have a letter of authorization issued 
by the Contracting Officer in order to process through a deployment 
center or to travel to, from, or within the theater of operations. The 
letter of authorization also will identify any additional 
authorizations, privileges, or Government support that Contractor 
personnel are entitled to under this contract.
    (d) Compliance with laws and regulations. The Contractor shall 
comply with, and shall ensure that its personnel authorized to accompany 
U.S. Armed Forces deployed outside the United States as specified in 
paragraph (b)(1) of this clause are familiar with and comply with, all 
applicable--
    (1) United States, host country, and third country national laws;
    (2) Treaties and international agreements;
    (3) United States regulations, directives, instructions, policies, 
and procedures; and
    (4) Orders, directives, and instructions issued by the Combatant 
Commander, including those relating to force protection, security, 
health, safety, or relations and interaction with local nationals.
    (e) Pre-deployment requirements. (1) The Contractor shall ensure 
that the following requirements are met prior to deploying personnel in 
support of U.S. Armed Forces. Specific requirements for each category 
may be specified in the statement of work or elsewhere in the contract.
    (i) All required security and background checks are complete and 
acceptable.
    (ii) All deploying personnel meet the minimum medical screening 
requirements and have received all required immunizations as specified 
in the contract. The Government will provide, at no cost to the 
Contractor, any theater-specific immunizations and/or medications not 
available to the general public.
    (iii) Deploying personnel have all necessary passports, visas, and 
other documents required to enter and exit a theater of operations and 
have a Geneva Conventions identification card, or other appropriate DoD 
identity credential, from the deployment center. Any Common Access Card 
issued to deploying personnel shall contain the access permissions 
allowed by the letter of authorization issued in accordance with 
paragraph (c)(4) of this clause.
    (iv) Special area, country, and theater clearance is obtained for 
personnel. Clearance requirements are in DoD Directive 4500.54, Official 
Temporary Duty Abroad, and DoD 4500.54-G, DoD Foreign Clearance Guide. 
Contractor personnel are considered non-DoD personnel traveling under 
DoD sponsorship.
    (v) All personnel have received personal security training. At a 
minimum, the training shall--
    (A) Cover safety and security issues facing employees overseas;
    (B) Identify safety and security contingency planning activities; 
and
    (C) Identify ways to utilize safety and security personnel and other 
resources appropriately.
    (vi) All personnel have received isolated personnel training, if 
specified in the contract.
    (2) The Contractor shall notify all personnel who are not a host 
country national, or who are not ordinarily resident in the host 
country, that--
    (i) Such employees, and dependents residing with such employees, who 
engage in conduct outside the United States that would constitute an 
offense punishable by imprisonment for more than one year if the conduct 
had been engaged in within the special maritime and territorial 
jurisdiction of the United States, may potentially be subject to the 
criminal jurisdiction of the United States in accordance with the 
Military Extraterritorial Jurisdiction Act of 2000 (18 U.S.C. 3621, et 
seq.);
    (ii) Pursuant to the War Crimes Act (18 U.S.C. 2441), Federal 
criminal jurisdiction also extends to conduct that is determined to 
constitute a violation of the law of war when committed by a civilian 
national of the United States;
    (iii) Other laws may provide for prosecution of U.S. nationals who 
commit offenses on the premises of U.S. diplomatic, consular, military 
or other U.S. Government missions outside the United States (18 U.S.C. 
7(9)); and
    (iv) When there is a formal declaration of war by Congress, 
Contractor personnel authorized to accompany U.S. Armed Forces may be 
subject to prosecution under the Uniform Code of Military Justice.
    (f) Processing and departure points. Deployed Contractor personnel 
shall--
    (1) Process through the deployment center designated in the 
contract, or as otherwise directed by the Contracting Officer, prior to 
deploying. The deployment center will conduct deployment processing to 
ensure visibility and accountability of Contractor personnel and to 
ensure that all deployment requirements are met, including the 
requirements specified in paragraph (e)(1) of this clause;

[[Page 372]]

    (2) Use the point of departure and transportation mode directed by 
the Contracting Officer; and
    (3) Process through a Joint Reception Center (JRC) upon arrival at 
the deployed location. The JRC will validate personnel accountability, 
ensure that specific theater of operations entrance requirements are 
met, and brief Contractor personnel on theater-specific policies and 
procedures.
    (g) Personnel data list.
    (1) In accordance with DoD Instruction 3020.41, Contractor Personnel 
Authorized to Accompany the U.S. Armed Forces, the Contractor shall 
establish and maintain with the designated Government official a current 
list of all Contractor personnel that deploy with or otherwise provide 
support in the theater of operations to U.S. Armed Forces as specified 
in paragraph (b)(1) of this clause. The list shall include each 
individual's general location in the theater of operations. The 
Contracting Officer will inform the Contractor of the Government 
official designated to receive this data and the appropriate automated 
system(s) to use for this effort.
    (2) The Contractor shall ensure that all employees on the list have 
a current DD Form 93, Record of Emergency Data Card, on file with both 
the Contractor and the designated Government official.
    (h) Contractor personnel. (1) The Contracting Officer may direct the 
Contractor, at its own expense, to remove and replace any Contractor 
personnel who jeopardize or interfere with mission accomplishment or who 
fail to comply with or violate applicable requirements of this clause. 
Such action may be taken at the Government's discretion without 
prejudice to its rights under any other provision of this contract, 
including the Termination for Default clause.
    (2) The Contractor shall have a plan on file showing how the 
Contractor would replace employees who are unavailable for deployment or 
who need to be replaced during deployment. The Contractor shall keep 
this plan current and shall provide a copy to the Contracting Officer 
upon request. The plan shall--
    (i) Identify all personnel who are subject to military mobilization;
    (ii) Detail how the position would be filled if the individual were 
mobilized; and
    (iii) Identify all personnel who occupy a position that the 
Contracting Officer has designated as mission essential.
    (i) Military clothing and protective equipment.
    (1) Contractor personnel are prohibited from wearing military 
clothing unless specifically authorized in writing by the Combatant 
Commander. If authorized to wear military clothing, Contractor personnel 
must--
    (i) Wear distinctive patches, arm bands, nametags, or headgear, in 
order to be distinguishable from military personnel, consistent with 
force protection measures; and
    (ii) Carry the written authorization with them at all times.
    (2) Contractor personnel may wear military-unique organizational 
clothing and individual equipment (OCIE) required for safety and 
security, such as ballistic, nuclear, biological, or chemical protective 
equipment.
    (3) The deployment center, or the Combatant Commander, shall issue 
OCIE and shall provide training, if necessary, to ensure the safety and 
security of Contractor personnel.
    (4) The Contractor shall ensure that all issued OCIE is returned to 
the point of issue, unless otherwise directed by the Contracting 
Officer.
    (j) Weapons. (1) If the Contractor requests that its personnel 
performing in the theater of operations be authorized to carry weapons, 
the request shall be made through the Contracting Officer to the 
Combatant Commander, in accordance with DoD Instruction 3020.41, 
paragraph 6.3.4.1 or, if the contract is for security services, 
paragraph 6.3.5.3. The Combatant Commander will determine whether to 
authorize in-theater Contractor personnel to carry weapons and what 
weapons and ammunition will be allowed.
    (2) If the Contracting Officer, subject to the approval of the 
Combatant Commander, authorizes the carrying of weapons--
    (i) The Contracting Officer may authorize the Contractor to issue 
Contractor-owned weapons and ammunition to specified employees; or
    (ii) The [Contracting Officer to specify the appropriate individual, 
e.g., Contracting Officer's Representative, Regional Security Officer] 
may issue Government-furnished weapons and ammunition to the Contractor 
for issuance to specified Contractor employees.
    (3) The Contractor shall ensure that its personnel who are 
authorized to carry weapons--
    (i) Are adequately trained to carry and use them--
    (A) Safely;
    (B) With full understanding of, and adherence to, the rules of the 
use of force issued by the Combatant Commander; and
    (C) In compliance with applicable agency policies, agreements, 
rules, regulations, and other applicable law;
    (ii) Are not barred from possession of a firearm by 18 U.S.C. 922; 
and
    (iii) Adhere to all guidance and orders issued by the Combatant 
Commander regarding possession, use, safety, and accountability of 
weapons and ammunition.
    (4) Whether or not weapons are Government-furnished, all liability 
for the use of any weapon by Contractor personnel rests solely with the 
Contractor and the Contractor employee using such weapon.

[[Page 373]]

    (5) Upon redeployment or revocation by the Combatant Commander of 
the Contractor's authorization to issue firearms, the Contractor shall 
ensure that all Government-issued weapons and unexpended ammunition are 
returned as directed by the Contracting Officer.
    (k) Vehicle or equipment licenses. Contractor personnel shall 
possess the required licenses to operate all vehicles or equipment 
necessary to perform the contract in the theater of operations.
    (l) Purchase of scarce goods and services. If the Combatant 
Commander has established an organization for the theater of operations 
whose function is to determine that certain items are scarce goods or 
services, the Contractor shall coordinate with that organization local 
purchases of goods and services designated as scarce, in accordance with 
instructions provided by the Contracting Officer.
    (m) Evacuation. (1) If the Combatant Commander orders a mandatory 
evacuation of some or all personnel, the Government will provide 
assistance, to the extent available, to United States and third country 
national Contractor personnel.
    (2) In the event of a non-mandatory evacuation order, unless 
authorized in writing by the Contracting Officer, the Contractor shall 
maintain personnel on location sufficient to meet obligations under this 
contract.
    (n) Next of kin notification and personnel recovery. (1) The 
Contractor shall be responsible for notification of the employee-
designated next of kin in the event an employee dies, requires 
evacuation due to an injury, or is isolated, missing, detained, 
captured, or abducted.
    (2) In the case of isolated, missing, detained, captured, or 
abducted Contractor personnel, the Government will assist in personnel 
recovery actions in accordance with DoD Directive 2310.2, Personnel 
Recovery.
    (o) Mortuary affairs. Mortuary affairs for Contractor personnel who 
die while accompanying the U.S. Armed Forces will be handled in 
accordance with DoD Directive 1300.22, Mortuary Affairs Policy.
    (p) Changes. In addition to the changes otherwise authorized by the 
Changes clause of this contract, the Contracting Officer may, at any 
time, by written order identified as a change order, make changes in the 
place of performance or Government-furnished facilities, equipment, 
material, services, or site. Any change order issued in accordance with 
this paragraph (p) shall be subject to the provisions of the Changes 
clause of this contract.
    (q) Subcontracts. The Contractor shall incorporate the substance of 
this clause, including this paragraph (q), in all subcontracts when 
subcontractor personnel are authorized to accompany U.S. Armed Forces 
deployed outside the United States in--
    (1) Contingency operations;
    (2) Humanitarian or peacekeeping operations;
    (3) Other military operations; or
    (4) Military exercises designated by the Combatant Commander.

                             (End of clause)

[71 FR 34828, June 16, 2006]



Sec. 252.225-7041  Correspondence in English.

    As prescribed in 225.1103(2), use the following clause:

                  Correspondence in English (JUNE 1997)

    The Contractor shall ensure that all contract correspondence that is 
addressed to the United States Government is submitted in English or 
with an English translation.

                             (End of clause)

[62 FR 34132, June 24, 1997, as amended at 65 FR 19858, Apr. 13, 2000; 
68 FR 15641, Mar. 31, 2003; 71 FR 39006, July 11, 2006]



Sec. 252.225-7042  Authorization to perform.

    As prescribed in 225.1103(3), use the following provision:

                   Authorization to Perform (APR 2003)

    The offeror represents that it has been duly authorized to operate 
and to do business in the country or countries in which the contract is 
to be performed.

                           (End of provision)

[68 FR 15641, Mar. 31, 2003, as amended at 71 FR 39006, July 11, 2006]



Sec. 252.225-7043  Antiterrorism/force protection policy for defense 
          contractors outside the United States.

    As prescribed in 225.7403-2, use the following clause:

 Antiterrorism/Force Protection Policy for Defense Contractors Outside 
                      the United States (MAR 2006)

    (a) Definition. United States, as used in this clause, means, the 50 
States, the District of Columbia, and outlying areas.
    (b) Except as provided in paragraph (c) of this clause, the 
Contractor and its subcontractors, if performing or traveling outside 
the United States under this contract, shall--

[[Page 374]]

    (1) Affiliate with the Overseas Security Advisory Council, if the 
Contractor or subcontractor is a U.S. entity;
    (2) Ensure that Contractor and subcontractor personnel who are U.S. 
nationals and are in-country on a non-transitory basis, register with 
the U.S. Embassy, and that Contractor and subcontractor personnel who 
are third country nationals comply with any security related 
requirements of the Embassy of their nationality;
    (3) Provide, to Contractor and subcontractor personnel, 
antiterrorism/force protection awareness information commensurate with 
that which the Department of Defense (DoD) provides to its military and 
civilian personnel and their families, to the extent such information 
can be made available prior to travel outside the United States; and
    (4) Obtain and comply with the most current antiterrorism/force 
protection guidance for Contractor and subcontractor personnel.
    (c) The requirements of this clause do not apply to any 
subcontractor that is--
    (1) A foreign government;
    (2) A representative of a foreign government; or
    (3) A foreign corporation wholly owned by a foreign government.
    (d) Information and guidance pertaining to DoD antiterrorism/force 
protection can be obtained from [Contracting Officer to insert 
applicable information cited in PGI 225.7403-1].

                             (End of clause)

[63 FR 31937, June 11, 1998, as amended at 70 FR 23803, May 5, 2005; 70 
FR 35548, June 21, 2005; 71 FR 14100, Mar. 21, 2006]



Sec. 252.225-7044  Balance of Payments Program--Construction Material.

    As prescribed in 225.7503(a), use the following clause:

      Balance of Payments Program--Construction Material (JUN 2005)

    (a) Definitions. As used in this clause'
    Component means any article, material, or supply incorporated 
directly into construction material.
    Construction material means an article, material, or supply brought 
to the construction site by the Contractor or a subcontractor for 
incorporation into the building or work. The term also includes an item 
brought to the site preassembled from articles, materials, or supplies. 
However, emergency life safety systems, such as emergency lighting, fire 
alarm, and audio evacuation systems, that are discrete systems 
incorporated into a public building or work and that are produced as 
complete systems, are evaluated as a single and distinct construction 
material regardless of when or how the individual parts or components of 
those systems are delivered to the construction site. Materials 
purchased directly by the Government are supplies, not construction 
material.
    Cost of components means--
    (1) For components purchased by the Contractor, the acquisition 
cost, including transportation costs to the place of incorporation into 
the end product (whether or not such costs are paid to a domestic firm), 
and any applicable duty (whether or not a duty-free entry certificate is 
issued); or
    (2) For components manufactured by the Contractor, all costs 
associated with the manufacture of the component, including 
transportation costs as described in paragraph (1) of this definition, 
plus allocable overhead costs, but excluding profit. Cost of components 
does not include any costs associated with the manufacture of the 
construction material.
    Domestic construction material means--
    (1) An unmanufactured construction material mined or produced in the 
United States; or
    (2) A construction material manufactured in the United States, if 
the cost of its components mined, produced, or manufactured in the 
United States exceeds 50 percent of the cost of all its components. 
Components of foreign origin of the same class or kind for which 
nonavailability determinations have been made are treated as domestic.
    United States means the 50 States, the District of Columbia, and 
outlying areas.
    (b) Domestic preference. This clause implements the Balance of 
Payments Program by providing a preference for domestic construction 
material. The Contractor shall use only domestic construction material 
in performing this contract, except for--
    (1) Construction material valued at or below the simplified 
acquisition threshold in part 2 of the Federal Acquisition Regulation; 
or
    (2) The construction material or components listed by the Government 
as follows:

[Contracting Officer to list applicable excepted materials or indicate 
``none'']

                             (End of clause)

[67 FR 20695, Apr. 26, 2002, as amended at 70 FR 2365, Jan. 13, 2005; 70 
FR 35548, June 21, 2005]



Sec. 252.225-7045  Balance of Payments Program--Construction Material 
          Under Trade Agreements.

    As prescribed in 225.7503(b), use the following clause:

[[Page 375]]

     Balance of Payments Program--Consturction Material Under Trade 
                          Agreements (JUN 2006)

    (a) Definitions. As used in this clause--
    Caribbean Basin country construction material means a construction 
material that---
    (1) Is wholly the growth, product, or manufacture of a Caribbean 
Basin country; or
    (2) In the case of a construction material that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a Caribbean Basin country into a new and different 
construction material distinct from the materials from which it was 
transformed.
    Component means any article, material, or supply incorporated 
directly into construction material.
    Construction material means an article, material, or supply brought 
to the construction site by the Contractor or a subcontractor for 
incorporation into the building or work. The term also includes an item 
brought to the site preassembled from articles, materials, or supplies. 
However, emergency life safety systems, such as emergency lighting, fire 
alarm, and audio evacuation systems, that are discrete systems 
incorporated into a public building or work and that are produced as 
complete systems, are evaluated as a single and distinct construction 
material regardless of when or how the individual parts or components of 
those systems are delivered to the construction site. Materials 
purchased directly by the Government are supplies, not construction 
material.
    Cost of components means--
    (1) For components purchased by the Contractor, the acquisition 
cost, including transportation costs to the place of incorporation into 
the end product (whether or not such costs are paid to a domestic firm), 
and any applicable duty (whether or not a duty-free entry certificate is 
issued); or
    (2) For components manufactured by the Contractor, all costs 
associated with the manufacture of the component, including 
transportation costs as described in paragraph (1) of this definition, 
plus allocable overhead costs, but excluding profit. Cost of components 
does not include any costs associated with the manufacture of the 
construction material.
    Designated country means--
    (1) A World Trade Organization Government Procurement Agreement (WTO 
GPA) country (Aruba, Austria, Belgium, Canada, Cyprus, Czech Republic, 
Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, 
Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, 
Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, 
Poland, Portugal, Singapore, Slovak Republic, Slovenia, Spain, Sweden, 
Switzerland, or the United Kingdom);
    (2) A Free Trade Agreement country (Australia, Canada, Chile, El 
Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
    (3) A least developed country (Afghanistan, Angola, Bangladesh, 
Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central 
African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, 
East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, 
Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Madagascar, Malawi, 
Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao 
Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, 
Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia); or
    (4) A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, 
Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, 
Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Jamaica, 
Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. 
Vincent and the Grenadines, or Trinidad and Tobago).
    Designated country construction material means a construction 
material that is a WTO GPA country construction material, a Free Trade 
Agreement country construction material, a least developed country 
construction material, or a Caribbean Basin country construction 
material.
    Domestic construction material means--
    (1) An unmanufactured construction material mined or produced in the 
United States; or
    (2) A construction material manufactured in the United States, if 
the cost of its components mined, produced, or manufactured in the 
United States exceeds 50 percent of the cost of all its components. 
Components of foreign origin of the same class or kind for which 
nonavailability determinations have been made are treated as domestic.
    Free Trade Agreement country construction material means a 
construction material that--
    (1) Is wholly the growth, product, or manufacture of a Free Trade 
Agreement country; or
    (2) In the case of a construction material that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a Free Trade Agreement country into a new and different 
construction material distinct from the material from which it was 
transformed.
    Least developed country construction material means a construction 
material that--
    (1) Is wholly the growth, product, or manufacture of a least 
developed country; or
    (2) In the case of a construction material that consists in whole or 
in part of materials from another country has been substantially 
transformed in a least developed country

[[Page 376]]

into a new and different construction material distinct from the 
materials from which it was transformed.
    United States means the 50 States, the District of Columbia, and 
outlying areas.
    WTO GPA country construction material means a construction material 
that--
    (1) Is wholly the growth, product, or manufacture of a WTO GPA 
country; or
    (2) In the case of a construction material that consists in whole or 
in part of materials from another country, has been substantially 
transformed in a WTO GPA country into a new and different construction 
material distinct from the materials from which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In addition, 
the Contracting Officer has determined that the WTO GPA and Free Trade 
Agreements apply to this acquisition. Therefore, the Balance of Payments 
Program restrictions are waived for designated country construction 
materials.
    (c) The Contractor shall use only domestic or designated country 
construction material in performing this contract, except for--
    (1) Construction material valued at or below the simplified 
acquisition threshold in part 2 of the Federal Acquisition Regulation; 
or
    (2) The construction material or components listed by the Government 
as follows:
    [Contracting Officer to list applicable excepted materials or 
indicate ``none'']

                             (End of clause)

                         Alternate I (JUN 2006)

    As prescribed in 225.7503(b), add the following definition of 
``Mexican construction material'' to paragraph (a) of the basic clause, 
and substitute the following paragraphs (b) and (c) for paragraphs (b) 
and (c) of the basic clause:
    Mexican construction material means a construction material that--
    (1) Is wholly the growth, product, or manufacture of Mexico; or
    (2) In the case of a construction material that consists in whole or 
in part of materials from another country, has been substantially 
transformed in Mexico into a new and different construction material 
distinct from the materials from which it was transformed.
    (b) This clause implements the Balance of Payments Program by 
providing a preference for domestic construction material. In addition, 
the Contracting Officer has determined that the WTO GPA and all Free 
Trade Agreements except NAFTA apply to this acquisition. Therefore, the 
Balance of Payments Program restrictions are waived for designated 
country construction material other than Mexican construction material.
    (c) The Contractor shall use only domestic or designated country 
construction material other than Mexican construction material in 
performing this contract, except for--(1) Construction material valued 
at or below the simplified acquisition threshold in Part 2 of the 
Federal Acquisition Regulation; or
    (2) The construction material or components listed by the Government 
as follows:

[Contracting Officer to list applicable excepted materials or indicate 
``none''].

[70 FR 2365, Jan. 13, 2005, as amended at 70 FR 35548, June 21, 2005; 70 
FR 73153, Dec. 9, 2005; 71 FR 9271, Feb. 23, 2006; 71 FR 34836, June 16, 
2006]



Sec. 252.226-7000  Notice of historically black college or university 
          and minority institution set-aside.

    As prescribed in 226.370--9(a), use the following clause:

    Notice of Historically Black College or University and Minority 
                    Institution Set-Aside (APR 1994)

    (a) Definitions. Historically black colleges and universities, as 
used in this clause, means institutions determined by the Secretary of 
Education to meet the requirements of 34 CFR 608.2. The term also means 
any nonprofit research institution that was an integral part of such a 
college or university before November 14, 1986.
    Minority institutions, as used in this clause, means institutions 
meeting the requirements of section 1046(3) of the Higher Education Act 
of 1965 (20 U.S.C. 1135d-5(3)). The term also includes Hispanic-serving 
institutions as defined in section 316(b)(1) of such Act (20 U.S.C. 
1059c(b)(1)).
    (b) General. (1) Offers are solicited only from historically black 
colleges or universities and minority institutions.
    (2) Any award resulting from this solicitation will be made only to 
an offeror which is a historically black college or university or a 
minority institution at the time of submission of its initial offer 
including price.
    (c) Agreements. The offeror will--
    (1) Perform at least 50 percent of the cost of contract performance 
incurred for personnel with its own employees; and
    (2) Upon request by the Contracting Officer, provide evidence prior 
to award that the Secretary of Education has determined the offeror to 
be a historically black college or university or minority institution.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 59 FR 22131, Apr. 29, 1994; 
70 FR 73150, Dec. 9, 2005]

[[Page 377]]



Sec. 252.226-7001  Utilization of Indian organizations, Indian-owned 
          economic enterprises, and native Hawaiian small business 
          concerns.

    As prescribed in 226.104, use the following clause:

Utilization of Indian Organizations, Indian-Owned Economic Enterprises, 
         and Native Hawaiian Small Business Concerns (SEP 2004)

    (a) Definitions. As used in this clause--
    Indian means--
    (1) Any person who is a member of any Indian tribe, band, group, 
pueblo, or community that is recognized by the Federal Government as 
eligible for services from the Bureau of Indian Affairs (BIA) in 
accordance with 25 U.S.C. 1452(c); and
    (2) Any ``Native'' as defined in the Alaska Native Claims Settlement 
Act (43 U.S.C. 1601 et seq.).
    Indian organization means the governing body of any Indian tribe or 
entity established or recognized by the governing body of an Indian 
tribe for the purposes of 25 U.S.C. chapter 17.
    Indian-owned economic enterprise means any Indian-owned (as 
determined by the Secretary of the Interior) commercial, industrial, or 
business activity established or organized for the purpose of profit, 
provided that Indian ownership constitutes not less than 51 percent of 
the enterprise.
    Indian tribe means any Indian tribe, band, group, pueblo, or 
community, including native villages and native groups (including 
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined 
in the Alaska Native Claims Settlement Act, that is recognized by the 
Federal Government as eligible for services from BIA in accordance with 
25 U.S.C. 1452(c).
    Interested party means a contractor or an actual or prospective 
offeror whose direct economic interest would be affected by the award of 
a subcontract or by the failure to award a subcontract.
    Native Hawaiian small business concern means an entity that is--
    (1) A small business concern as defined in section 3 of the Small 
Business Act (15 U.S.C. 632) and relevant implementing regulations; and
    (2) Owned and controlled by a Native Hawaiian as defined in 25 
U.S.C. 4221(9).
    (b) The Contractor shall use its best efforts to give Indian 
organizations, Indian-owned economic enterprises, and Native Hawaiian 
small business concerns the maximum practicable opportunity to 
participate in the subcontracts it awards, to the fullest extent 
consistent with efficient performance of the contract.
    (c) The Contracting Officer and the Contractor, acting in good 
faith, may rely on the representation of an Indian organization, Indian-
owned economic enterprise, or Native Hawaiian small business concern as 
to its eligibility, unless an interested party challenges its status or 
the Contracting Officer has independent reason to question that status.
    (d) In the event of a challenge to the representation of a 
subcontractor, the Contracting Officer will refer the matter to--
    (1) For matters relating to Indian organizations or Indian-owned 
economic enterprises: U.S. Department of the Interior, Bureau of Indian 
Affairs, Attn: Chief, Division of Contracting and Grants Administration, 
1849 C Street NW, MS-2626-MIB, Washington, DC 20240-4000. The BIA will 
determine the eligibility and will notify the Contracting Officer.
    (2) For matters relating to Native Hawaiian small business concerns: 
Department of Hawaiian Home Lands, PO Box 1879, Honolulu, HI 96805. The 
Department of Hawaiian Home Lands will determine the eligibility and 
will notify the Contracting Officer.
    (e) No incentive payment will be made--
    (1) While a challenge is pending; or
    (2) If a subcontractor is determined to be an ineligible 
participant.
    (f)(1) The Contractor, on its own behalf or on behalf of a 
subcontractor at any tier, may request an incentive payment in 
accordance with this clause.
    (2) The incentive amount that may be requested is 5 percent of the 
estimated cost, target cost, or fixed price included in the subcontract 
at the time of award to the Indian organization, Indian-owned economic 
enterprise, or Native Hawaiian small business concern.
    (3) In the case of a subcontract for commercial items, the 
Contractor may receive an incentive payment only if the subcontracted 
items are produced or manufactured in whole or in part by an Indian 
organization, Indian-owned economic enterprise, or Native Hawaiian small 
business concern.
    (4) The Contractor has the burden of proving the amount claimed and 
shall assert its request for an incentive payment prior to completion of 
contract performance.
    (5) The Contracting Officer, subject to the terms and conditions of 
the contract and the availability of funds, will authorize an incentive 
payment of 5 percent of the estimated cost, target cost, or fixed price 
included in the subcontract awarded to the Indian organization, Indian-
owned economic enterprise, or Native Hawaiian small business concern.
    (6) If the Contractor requests and receives an incentive payment on 
behalf of a subcontractor, the Contractor is obligated to pay the 
subcontractor the incentive amount.

[[Page 378]]

    (g) The Contractor shall insert the substance of this clause, 
including this paragraph (g), in all subcontracts exceeding $500,000.

[68 FR 56562, Oct. 1, 2003, as amended at 69 FR 55991, Sept. 17, 2004]



Sec. 252.227-7000  Non-estoppel.

    As prescribed at 227.7009-1, insert the following clause in patent 
releases, license agreements, and assignments:

                         Non-Estoppel (OCT 1966)

    The Government reserves the right at any time to contest the 
enforceability, validity, scope of, or the title to any patent or patent 
application herein licensed without waiving or forfeiting any right 
under this contract.

                             (End of clause)



Sec. 252.227-7001  Release of past infringement.

    As prescribed at 227.7009-2(a), insert the following clause in 
patent releases, license agreements, and assignments:

                 Release of Past Infringement (AUG 1984)

    The Contractor hereby releases each and every claim and demand which 
he now has or may hereafter have against the Government for the 
manufacture or use by or for the Government prior to the effective date 
of this contract, of any inventions covered by (i) any of the patents 
and applications for patent identified in this contract, and (ii) any 
other patent or application for patent owned or hereafter acquired by 
him, insofar as and only to the extent that such other patent or patent 
application covers the manufacture, use, or disposition of (description 
of subject matter).*
---------------------------------------------------------------------------

    *Bracketed portions of the clause may be omitted when not 
appropriate or not encompassed by the release as negotiated.
---------------------------------------------------------------------------

                             (End of clause)



Sec. 252.227-7002  Readjustment of payments.

    As prescribed at 227.7009-2(b), insert the following clause in 
patent releases, license agreements, and assignments:

                   Readjustment of Payments (OCT 1966)

    (a) If any license, under substantially the same patents and 
authorizing substantially the same acts which are authorized under this 
contract, has been or shall hereafter be granted within the United 
States, on royalty terms which are more favorable to the licensee than 
those contained herein, the Government shall be entitled to the benefit 
of such more favorable terms with respect to all royalties accruing 
under this contract after the date such more favorable terms become 
effective, and the Contractor shall promptly notify the Secretary in 
writing of the granting of such more favorable terms.
    (b) In the event any claim of any patent hereby licensed is 
construed or held invalid by decision of a court of competent 
jurisdiction, the requirement to pay royalties under this contract 
insofar as its arises solely by reason of such claim, and any other 
claim not materially different therefrom, shall be interpreted in 
conformity with the court's decision as to the scope of validity of such 
claims; Provided, however, that in the event such decision is modified 
or reversed on appeal, the requirement to pay royalties under this 
contract shall be interpreted in conformity with the final decision 
rendered on such appeal.

                             (End of clause)



Sec. 252.227-7003  Termination.

    As prescribed at 227.7009-2(c), insert the following clause in 
patent releases, license agreements, and assignments:

                         Termination (AUG 1984)

    Notwithstanding any other provision of this contract, the Government 
shall have the right to terminate the within license, in whole or in 
part, by giving the Contractor not less than thirty (30) days notice in 
writing of the date such termination is to be effective; provided, 
however, that such termination shall not affect the obligation of the 
Government to pay royalties which have accrued prior to the effective 
date of such termination.

                             (End of clause)



Sec. 252.227-7004  License grant.

    As prescribed at 227.7009-3(a), insert the following clause in 
patent releases, license agreements, and assignments:

                        License Grant (AUG 1984)

    (a) The Contractor hereby grants to the Government an irrevocable, 
nonexclusive, nontransferable, and paid up license under the following 
patents, applications for patent, and any patents granted on such 
applications, and under any patents which may issue as the result of any 
reissue, division or continuation thereof, to practice by or cause to be 
practiced for the Government throughout the world, any and all of the 
inventions thereunder, in the manufacture and use of any article or 
material, in the use of any method or process, and in the disposition of

[[Page 379]]

any article or material in accordance with law:
U.S. Patent No._________________________________________________________
Date____________________________________________________________________
Application Serial No.__________________________________________________
Filing Date_____________________________________________________________

together with corresponding foreign patents and foreign applications for 
patents, insofar as the Contractor has the right to grant licenses 
thereunder without incurring an obligation to pay royalties or other 
compensation to others solely on account of such grant.
    (b) No rights are granted or implied by the agreement under any 
other patents other than as provided above or by operation of law.
    (c) Nothing contained herein shall limit any rights which the 
Government may have obtained by virtue of prior contracts or by 
operation of law or otherwise.

                             (End of clause)



Sec. 252.227-7005  License term.

    As prescribed at 227.7009-3(b), insert one of the following clauses 
in patent releases, license agreements, and assignments:

                         License Term (OCT 2001)

    Alternate I (AUG 1984). The license hereby granted shall remain in 
full force and effect for the full term of each of the patents referred 
to in the ``License Grant'' clause of this contract and any and all 
patents hereafter issued on applications for patent referred to in such 
``License Grant'' clause.
    Alternate II (OCT 2001). The license hereby granted shall terminate 
on the -------- day of -------- ,--------; Provided, however, that said 
termination shall be without prejudice to the completion of any contract 
entered into by the Government prior to said date of termination or to 
the use or disposition thereafter of any articles or materials 
manufactured by or for the Government under this license.

[56 FR 36479, July 31, 1991, as amended at 66 FR 49861, Oct. 1, 2001]



Sec. 252.227-7006  License grant--running royalty.

    As prescribed at 227.7009-4(a), insert the following clause in 
patent releases, license agreements, and assignments:

                License Grant--Running Royalty (AUG 1984)

    (a) The Contractor hereby grants to the Government, as represented 
by the Secretary of ----------, an irrevocable, nonexclusive, 
nontransferable license under the following patents, applications for 
patent, and any patents granted on such applications, and under any 
patents which may issue as the result of any reissue, division, or 
continuation thereunder to practice by or cause to be practiced for the 
Department of --------, throughout the world, any and all of the 
inventions thereunder in the manufacture and use of any article or 
material, in the use of any method or process, and in the disposition of 
any article or material in accordance with law:
U.S. Patent No._________________________________________________________
Date____________________________________________________________________
Application Serial No.__________________________________________________
Filing Date_____________________________________________________________

together with corresponding foreign patents and foreign applications for 
patent, insofar as the Contractor has the right to grant licenses 
thereunder without incurring an obligation to pay royalties or other 
compensation to others solely on account of such grant.
    (b) No rights are granted or implied by the agreement under any 
other patents other than as provided above or by operation of law.
    (c) Nothing contained herein shall limit any rights which the 
Government may have obtained by virtue of prior contracts or by 
operation of law or otherwise.

                             (End of clause)



Sec. 252.227-7007  License term--running royalty.

    As prescribed at 227.7009-4(b), insert the following clause in 
patent releases, license agreements, and assignments:

                License Term--Running Royalty (AUG 1984)

    The license hereby granted shall remain in full force and effect for 
the full term of each of the patents referred to in the ``License 
Grant'' clause of this contract and any and all patents hereafter issued 
on applications for patent referred to above unless sooner terminated as 
elsewhere herein provided.

                             (End of clause)



Sec. 252.227-7008  Computation of royalties.

    As prescribed at 227.7009-4(c), insert the following clause in 
patent releases, license agreements, and assignments:

                   Computation of Royalties (AUG 1984)

    Subject to the conditions hereinafter stated, royalties shall accrue 
to the Contractor under this agreement on all articles or materials 
embodying, or manufactured by the use of, any or all inventions claimed 
under any unexpired United States patent licensed herein, upon 
acceptance thereof by the Department of ------------, at the rate of --
------ percent of the net selling price of

[[Page 380]]

such articles or materials (amount) per (name of item) * whether 
manufactured by the Government or procured under a fixed price contract, 
and at the rate of (amount) per (name of item) acquired or manufactured 
by a Contractor performing under a cost-reimbursement contract. With 
respect to such articles or materials made by the Department of --------
----, ``net selling price,'' as used in this paragraph, means the actual 
cost of direct labor and materials without allowance for overhead and 
supervision.
---------------------------------------------------------------------------

    * Use bracketed matter as appropriate.
---------------------------------------------------------------------------

                             (End of clause)



Sec. 252.227-7009  Reporting and payment of royalties.

    As prescribed at 227.7009-4(d), insert the following clause in 
patent releases, license agreements, and assignments:

              Reporting and Payment of Royalties (AUG 1984)

    (a) The (procuring office) shall, on or before the sixtieth (60th) 
day next following the end of each yearly* period ending ------------ 
during which royalties have accrued under this license, deliver to the 
Contractor, subject to military security regulations, a report in 
writing furnishing necessary information relative to royalties which 
have accrued under this contract.
---------------------------------------------------------------------------

    * The frequency, date, and length of reporting periods should be 
selected as appropriate to the particular circumstances of the contract.
---------------------------------------------------------------------------

    (b) Royalties which have accrued under this contract during the 
yearly* period ending ------------ shall be paid to the Contractor (if 
appropriations therefor are available or become available) within sixty 
(60) days next following the receipt of a voucher from the Contractor 
submitted in accordance with the report referred to in (a) of this 
clause; Provided, that the Government shall not be obligated to pay, in 
respect of any such yearly period, on account of the combined royalties 
accruing under this contract directly and under any separate licenses 
granted pursuant to the ``License to Other Government Agencies'' clause 
(if any) of this contract, an amount greater than ------------ dollars 
($------------), and if such combined royalties exceed the said maximum 
yearly obligation, each department or agency shall pay a pro rata share 
of the said maximum yearly obligation as determined by the proportion 
its accrued royalties bear to the combined total of accrued royalties.

                             (End of clause)



Sec. 252.227-7010  License to other Government agencies.

    As prescribed at 227.7009-4(e), insert the following clause in 
patent releases, license agreements, and assignments:

             License to Other Government Agencies (AUG 1984)

    The Contractor hereby agrees to grant a separate license under the 
patents, applications for patents, and improvements referred to in the 
``License Grant'' clause of this contract, on the same terms and 
conditions as appear in this license contract, to any other department 
or agency of the Government at any time on receipt of a written request 
for such a license from such department or agency; Provided, however, 
that as to royalties which accrue under such separate licenses, reports 
and payments shall be made directly to the Contractor by each such other 
department or agency pursuant to the terms of such separate licenses. 
The Contractor shall notify the Licensee hereunder promptly upon receipt 
of any request for license hereunder.

                             (End of clause)



Sec. 252.227-7011  Assignments.

    As prescribed at 227.7010, insert the following clause in 
assignments.

                          Assignment (AUG 1984)

    The Contractor hereby conveys to the Government, as represented by 
the Secretary of ------------, the entire right, title, and interest in 
and to the following patents (and applications for patent), in and to 
the inventions thereof, and in and to all claims and demands whatsoever 
for infringement thereof heretofore accrued, the same to be held and 
enjoyed by the Government through its duly appointed representatives to 
the full end of the term of said patents (and to the full end of the 
terms of all patents which may be granted upon said applications for 
patent, or upon any division, continuation-in-part or continuation 
thereof):

U.S. Patent No._________________________________________________________
Date____________________________________________________________________
Name of Inventor________________________________________________________
U.S. Application Serial No._____________________________________________
Filing Date_____________________________________________________________
Name of Inventor________________________________________________________

together with corresponding foreign patents and applications for patent 
insofar as the Contractor has the right to assign the same.

[[Page 381]]

                             (End of clause)



Sec. 252.227-7012  Patent license and release contract.

    As prescribed at 227.7012, insert the following clause in patent 
releases, license agreements, and assignments:
________________________________________________________________________
(Contract No.)

             Patent License and Release Contract (SEP 1999)

    This CONTRACT is effective as of the ---- day of [month, year], 
between the UNITED STATES OF AMERICA (hereinafter called the 
Government), and ---------- (hereinafter called the Contractor), (a 
corporation organized and existing under the laws of the State of ------
----), (a partnership consisting of ----------), (an individual trading 
as ----------), of the City of ----------, in the State of ----------.
    Whereas, the Contractor warrants that it has the right to grant the 
within license and release, and the Government desires to procure the 
same, and
    Whereas, this contract is authorized by law, including 10 U.S.C. 
2386.
    Now Therefore, in consideration of the grant, release and agreements 
hereinafter recited, the parties have agreed as follows:
    Article 1. License Grant.*
    (Insert the clause at 252.227-7004 for a paid up license, or the 
clause at 252.227-7006 for a license on a running royalty basis.)
    Article 2. License Term.*
    (Insert the appropriate alternative clause at 252.227-7005 for a 
paid up license, or the clause at 252.227-7007 for a license on a 
running royalty basis.)
    Article 3. Release of Past Infringement.
    (Insert the clause at 252.227-7001.)
    Article 4. Non-Estoppel.
    (Insert the clause at 252.227-7000.)
    Article 5. Payment.
    The Contractor shall be paid the sum of ------ Dollars ($------) in 
full compensation for the rights herein granted and agreed to be 
granted. (For a license on a running royalty basis, insert the clause at 
252.227-7006 in accordance with the instructions therein, and also the 
clause as specified at 252.227-7002 and 252.227-7009 and 252.227-7010.)
    Article 6. Covenant Against Contingent Fees.
    (Insert the clause at FAR 52.203-5.)
    Article 7. Assignment of Claims.
    (Insert the clause at FAR 52.232-23.)
    Article 8. Gratuities.
    (Insert the clause at FAR 52.203-3.)
    Article 9. Disputes.
    (Insert the clause at FAR 52.233-1.)
    Article 10. Successors and Assignees.
    This Agreement shall be binding upon the Contractor, its 
successors** and assignees, but nothing contained in this Article shall 
authorize an assignment of any claim against the Government otherwise 
than as permitted by law.
    In Witness Whereof, the parties hereto have executed this contract.

THE UNITED STATES OF AMERICA
By______________________________________________________________________
Date____________________________________________________________________
(Signature and Title of
Contractor Representative)______________________________________________
By______________________________________________________________________
Date____________________________________________________________________

    *If only a release is procured, delete this article; if an 
assignment is procured, use the clause at 252.227-7011.
    **When the Contractor is an individual, change ``successors'' to 
``heirs''; if a partnership, modify appropriately.

                             (End of clause)

[64 FR 49685, Sept. 14, 1999]



Sec. 252.227-7013  Rights in technical data--Noncommercial items.

    As prescribed in 227.7103-6(a), use the following clause:

        Rights in Technical Data--Noncommercial Items (NOV 1995)

    (a) Definitions. As used in this clause:
    (1) Computer data base means a collection of data recorded in a form 
capable of being processed by a computer. The term does not include 
computer software.
    (2) Computer program means a set of instructions, rules, or routines 
recorded in a form that is capable of causing a computer to perform a 
specific operation or series of operations.
    (3) Computer software means computer programs, source code, source 
code listings, object code listings, design details, algorithms, 
processes, flow charts, formulae and related material that would enable 
the software to be reproduced, recreated, or recompiled. Computer 
software does not include computer data bases or computer software 
documentation.
    (4) Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and other 
similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for using 
the software.
    (5) Detailed manufacturing or process data means technical data that 
describe the steps, sequences, and conditions of manufacturing, 
processing or assembly used by the manufacturer to produce an item or 
component or to perform a process.
    (6) Developed means that an item, component, or process exists and 
is workable. Thus,

[[Page 382]]

the item or component must have been constructed or the process 
practiced. Workability is generally established when the item, 
component, or process has been analyzed or tested sufficiently to 
demonstrate to reasonable people skilled in the applicable art that 
there is a high probability that it will operate as intended. Whether, 
how much, and what type of analysis or testing is required to establish 
workability depends on the nature of the item, component, or process, 
and the state of the art. To be considered ``developed,'' the item, 
component, or process need not be at the stage where it could be offered 
for sale or sold on the commercial market, nor must the item, component, 
or process be actually reduced to practice within the meaning of Title 
35 of the United States Code.
    (7) Developed exclusively at private expense means development was 
accomplished entirely with costs charged to indirect cost pools, costs 
not allocated to a government contract, or any combination thereof.
    (i) Private expense determinations should be made at the lowest 
practicable level.
    (ii) Under fixed-price contracts, when total costs are greater than 
the firm-fixed-price or ceiling price of the contract, the additional 
development costs necessary to complete development shall not be 
considered when determining whether development was at government, 
private, or mixed expense.
    (8) Developed exclusively with government funds means development 
was not accomplished exclusively or partially at private expense.
    (9) Developed with mixed funding means development was accomplished 
partially with costs charged to indirect cost pools and/or costs not 
allocated to a government contract, and partially with costs charged 
directly to a government contract.
    (10) Form, fit, and function data means technical data that 
describes the required overall physical, functional, and performance 
characteristics (along with the qualification requirements, if 
applicable) of an item, component, or process to the extent necessary to 
permit identification of physically and functionally interchangeable 
items.
    (11) Government purpose means any activity in which the United 
States Government is a party, including cooperative agreements with 
international or multi-national defense organizations, or sales or 
transfers by the United States Government to foreign governments or 
international organizations. Government purposes include competitive 
procurement, but do not include the rights to use, modify, reproduce, 
release, perform, display, or disclose technical data for commercial 
purposes or authorize others to do so.
    (12) Government purpose rights means the rights to--
    (i) Use, modify, reproduce, release, perform, display, or disclose 
technical data within the Government without restriction; and
    (ii) Release or disclose technical data outside the Government and 
authorize persons to whom release or disclosure has been made to use, 
modify, reproduce, release, perform, display, or disclose that data for 
United States government purposes.
    (13) Limited rights means the rights to use, modify, reproduce, 
release, perform, display, or disclose technical data, in whole or in 
part, within the Government. The Government may not, without the written 
permission of the party asserting limited rights, release or disclose 
the technical data outside the Government, use the technical data for 
manufacture, or authorize the technical data to be used by another 
party, except that the Government may reproduce, release or disclose 
such data or authorize the use or reproduction of the data by persons 
outside the Government if reproduction, release, disclosure, or use is--
    (i) Necessary for emergency repair and overhaul; or
    (ii) A release or disclosure of technical data (other than detailed 
manufacturing or process data) to, or use of such data by, a foreign 
government that is in the interest of the Government and is required for 
evaluational or informational purposes;
    (iii) Subject to a prohibition on the further reproduction, release, 
disclosure, or use of the technical data; and
    (iv) The contractor or subcontractor asserting the restriction is 
notified of such reproduction, release, disclosure, or use.
    (14) Technical data means recorded information, regardless of the 
form or method of the recording, of a scientific or technical nature 
(including computer software documentation). The term does not include 
computer software or data incidental to contract administration, such as 
financial and/or management information.
    (15) Unlimited rights means rights to use, modify, reproduce, 
perform, display, release, or disclose technical data in whole or in 
part, in any manner, and for any purpose whatsoever, and to have or 
authorize others to do so.
    (b) Rights in technical data. The Contractor grants or shall obtain 
for the Government the following royalty free, world-wide, nonexclusive, 
irrevocable license rights in technical data other than computer 
software documentation (see the Rights in Noncommercial Computer 
Software and Noncommercial Computer Software Documentation clause of 
this contract for rights in computer software documentation):
    (1) Unlimited rights. The Government shall have unlimited rights in 
technical data that are--
    (i) Data pertaining to an item, component, or process which has been 
or will be developed exclusively with Government funds;

[[Page 383]]

    (ii) Studies, analyses, test data, or similar data produced for this 
contract, when the study, analysis, test, or similar work was specified 
as an element of performance;
    (iii) Created exclusively with Government funds in the performance 
of a contract that does not require the development, manufacture, 
construction, or production of items, components, or processes;
    (iv) Form, fit, and function data;
    (v) Necessary for installation, operation, maintenance, or training 
purposes (other than detailed manufacturing or process data);
    (vi) Corrections or changes to technical data furnished to the 
Contractor by the Government;
    (vii) Otherwise publicly available or have been released or 
disclosed by the Contractor or subcontractor without restrictions on 
further use, release or disclosure, other than a release or disclosure 
resulting from the sale, transfer, or other assignment of interest in 
the technical data to another party or the sale or transfer of some or 
all of a business entity or its assets to another party;
    (viii) Data in which the Government has obtained unlimited rights 
under another Government contract or as a result of negotiations; or
    (ix) Data furnished to the Government, under this or any other 
Government contract or subcontract thereunder, with--
    (A) Government purpose license rights or limited rights and the 
restrictive condition(s) has/have expired; or
    (B) Government purpose rights and the Contractor's exclusive right 
to use such data for commercial purposes has expired.
    (2) Government purpose rights. (i) The Government shall have 
government purpose rights for a five-year period, or such other period 
as may be negotiated, in technical data--
    (A) That pertain to items, components, or processes developed with 
mixed funding except when the Government is entitled to unlimited rights 
in such data as provided in paragraphs (b)(ii) and (b)(iv) through 
(b)(ix) of this clause; or
    (B) Created with mixed funding in the performance of a contract that 
does not require the development, manufacture, construction, or 
production of items, components, or processes.
    (ii) The five-year period, or such other period as may have been 
negotiated, shall commence upon execution of the contract, subcontract, 
letter contract (or similar contractual instrument), contract 
modification, or option exercise that required development of the items, 
components, or processes or creation of the data described in paragraph 
(b)(2)(i)(B) of this clause. Upon expiration of the five-year or other 
negotiated period, the Government shall have unlimited rights in the 
technical data.
    (iii) The Government shall not release or disclose technical data in 
which it has government purpose rights unless--
    (A) Prior to release or disclosure, the intended recipient is 
subject to the non-disclosure agreement at 227.7103-7 of the Defense 
Federal Acquisition Regulation Supplement (DFARS); or
    (B) The recipient is a Government contractor receiving access to the 
data for performance of a Government contract that contains the clause 
at DFARS 252.227-7025, Limitations on the Use or Disclosure of 
Government-Furnished Information Marked with Restrictive Legends.
    (iv) The Contractor has the exclusive right, including the right to 
license others, to use technical data in which the Government has 
obtained government purpose rights under this contract for any 
commercial purpose during the time period specified in the government 
purpose rights legend prescribed in paragraph (f)(2) of this clause.
    (3) Limited rights. (i) Except as provided in paragraphs (b)(1)(ii) 
and (b)(1)(iv) through (b)(1)(ix) of this clause, the Government shall 
have limited rights in technical data--
    (A) Pertaining to items, components, or processes developed 
exclusively at private expense and marked with the limited rights legend 
prescribed in paragraph (f) of this clause; or
    (B) Created exclusively at private expense in the performance of a 
contract that does not require the development, manufacture, 
construction, or production of items, components, or processes.
    (ii) The Government shall require a recipient of limited rights data 
for emergency repair or overhaul to destroy the data and all copies in 
its possession promptly following completion of the emergency repair/
overhaul and to notify the Contractor that the data have been destroyed.
    (iii) The Contractor, its subcontractors, and suppliers are not 
required to provide the Government additional rights to use, modify, 
reproduce, release, perform, display, or disclose technical data 
furnished to the Government with limited rights. However, if the 
Government desires to obtain additional rights in technical data in 
which it has limited rights, the Contractor agrees to promptly enter 
into negotiations with the Contracting Officer to determine whether 
there are acceptable terms for transferring such rights. All technical 
data in which the Contractor has granted the Government additional 
rights shall be listed or described in a license agreement made part of 
the contract. The license shall enumerate the additional rights granted 
the Government in such data.
    (4) Specifically negotiated license rights. The standard license 
rights granted to the Government under paragraphs (b)(1) through

[[Page 384]]

(b)(3) of this clause, including the period during which the Government 
shall have government purpose rights in technical data, may be modified 
by mutual agreement to provide such rights as the parties consider 
appropriate but shall not provide the Government lesser rights than are 
enumerated in paragraph (a)(13) of this clause. Any rights so negotiated 
shall be identified in a license agreement made part of this contract.
    (5) Prior government rights. Technical data that will be delivered, 
furnished, or otherwise provided to the Government under this contract, 
in which the Government has previously obtained rights shall be 
delivered, furnished, or provided with the pre-existing rights, unless--
    (i) The parties have agreed otherwise; or
    (ii) Any restrictions on the Government's rights to use, modify, 
reproduce, release, perform, display, or disclose the data have expired 
or no longer apply.
    (6) Release from liability. The Contractor agrees to release the 
Government from liability for any release or disclosure of technical 
data made in accordance with paragraph (a)(13) or (b)(2)(iii) of this 
clause, in accordance with the terms of a license negotiated under 
paragraph (b)(4) of this clause, or by others to whom the recipient has 
released or disclosed the data and to seek relief solely from the party 
who has improperly used, modified, reproduced, released, performed, 
displayed, or disclosed Contractor data marked with restrictive legends.
    (c) Contractor rights in technical data. All rights not granted to 
the Government are retained by the Contractor.
    (d) Third party copyrighted data. The Contractor shall not, without 
the written approval of the Contracting Officer, incorporate any 
copyrighted data in the technical data to be delivered under this 
contract unless the Contractor is the copyright owner or has obtained 
for the Government the license rights necessary to perfect a license or 
licenses in the deliverable data of the appropriate scope set forth in 
paragraph (b) of this clause, and has affixed a statement of the license 
or licenses obtained on behalf of the Government and other persons to 
the data transmittal document.
    (e) Identification and delivery of data to be furnished with 
restrictions on use, release, or disclosure. (1) This paragraph does not 
apply to restrictions based solely on copyright.
    (2) Except as provided in paragraph (e)(3) of this clause, technical 
data that the Contractor asserts should be furnished to the Government 
with restrictions on use, release, or disclosure are identified in an 
attachment to this contract (the Attachment). The Contractor shall not 
deliver any data with restrictive markings unless the data are listed on 
the Attachment.
    (3) In addition to the assertions made in the Attachment, other 
assertions may be identified after award when based on new information 
or inadvertent omissions unless the inadvertent omissions would have 
materially affected the source selection decision. Such identification 
and assertion shall be submitted to the Contracting Officer as soon as 
practicable prior to the scheduled date for delivery of the data, in the 
following format, and signed by an official authorized to contractually 
obligate the Contractor: Identification and Assertion of Restrictions on 
the Government's Use, Release, or Disclosure of Technical Data.
    The Contractor asserts for itself, or the persons identified below, 
that the Government's rights to use, release, or disclose the following 
technical data should be restricted--

------------------------------------------------------------------------
                                                               Name of
     Technical data to be                       Asserted       person
 furnished with restrictions     Basis for       rights       asserting
             \1\               assertion \2\  category \3\  restrictions
                                                                 \4\
------------------------------------------------------------------------
(LIST).......................  (LIST).......  (LIST)......  (LIST)
------------------------------------------------------------------------
\1\ If the assertion is applicable to items, components or processes
  developed at private expense, identify both the data and each such
  item, component, or process.
\2\ Generally, the development of an item, component, or process at
  private expense, either exclusively or partially, is the only basis
  for asserting restrictions on the Government's rights to use, release,
  or disclose technical data pertaining to such items, components, or
  processes. Indicate whether development was exclusively or partially
  at private expense. If development was not at private expense, enter
  the specific reason for asserting that the Government's rights should
  be restricted.
\3\ Enter asserted rights category (e.g., government purpose license
  rights from a prior contract, rights in SBIR data generated under
  another contract, limited or government purpose rights under this or a
  prior contract, or specifically negotiated licenses).
\4\ Corporation, individual, or other person, as appropriate.


Date____________________________________________________________________

Printed Name and Title__________________________________________________

________________________________________________________________________

Signature_______________________________________________________________

                  (End of identification and assertion)

    (4) When requested by the Contracting Officer, the Contractor shall 
provide sufficient information to enable the Contracting Officer to 
evaluate the Contractor's assertions. The Contracting Officer reserves 
the right to add the Contractor's assertions to the Attachment and 
validate any listed assertion, at a later date, in accordance with the 
procedures of the Validation of Restrictive Markings on Technical Data 
clause of this contract.
    (f) Marking requirements. The Contractor, and its subcontractors or 
suppliers, may only assert restrictions on the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose technical 
data to be delivered under this contract by marking the deliverable data 
subject to restriction.

[[Page 385]]

Except as provided in paragraph (f)(5) of this clause, only the 
following legends are authorized under this contract: the government 
purpose rights legend at paragraph (f)(2) of this clause; the limited 
rights legend at paragraph (f)(3) of this clause; or the special license 
rights legend at paragraph (f)(4) of this clause; and/or a notice of 
copyright as prescribed under 17 U.S.C. 401 or 402.
    (1) General marking instructions. The Contractor, or its 
subcontractors or suppliers, shall conspicuously and legibly mark the 
appropriate legend on all technical data that qualify for such markings. 
The authorized legends shall be placed on the transmittal document or 
storage container and, for printed material, each page of the printed 
material containing technical data for which restrictions are asserted. 
When only portions of a page of printed material are subject to the 
asserted restrictions, such portions shall be identified by circling, 
underscoring, with a note, or other appropriate identifier. Technical 
data transmitted directly from one computer or computer terminal to 
another shall contain a notice of asserted restrictions. Reproductions 
of technical data or any portions thereof subject to asserted 
restrictions shall also reproduce the asserted restrictions.
    (2) Government purpose rights markings. Data delivered or otherwise 
furnished to the Government purpose rights shall be marked as follows:

                        Government Purpose Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________

________________________________________________________________________

Expiration Date_________________________________________________________
    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose these technical data are restricted by paragraph 
(b)(2) of the Rights in Technical Data--Noncommercial Items clause 
contained in the above identified contract. No restrictions apply after 
the expiration date shown above. Any reproduction of technical data or 
portions thereof marked with this legend must also reproduce the 
markings.

                             (End of legend)

    (3) Limited rights markings. Data delivered or otherwise furnished 
to the Government with limited rights shall be marked with the following 
legend:

                             Limited Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________

________________________________________________________________________
    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose these technical data are restricted by paragraph 
(b)(3) of the Rights in Technical Data--Noncommercial Items clause 
contained in the above identified contract. Any reproduction of 
technical data or portions thereof marked with this legend must also 
reproduce the markings. Any person, other than the Government, who has 
been provided access to such data must promptly notify the above named 
Contractor.

                             (End of legend)

    (4) Special license rights markings. (i) Data in which the 
Government's rights stem from a specifically negotiated license shall be 
marked with the following legend:

                         Special License Rights

    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose these data are restricted by Contract No. --------
-------- (Insert contract number) ----------------, License No. --------
-------- (Insert license identifier) ----------------. Any reproduction 
of technical data or portions thereof marked with this legend must also 
reproduce the markings.

                             (End of legend)

    (ii) For purposes of this clause, special licenses do not include 
government purpose license rights acquired under a prior contract (see 
paragraph (b)(5) of this clause).
    (5) Pre-existing data markings. If the terms of a prior contract or 
license permitted the Contractor to restrict the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose technical 
data deliverable under this contract, and those restrictions are still 
applicable, the Contractor may mark such data with the appropriate 
restrictive legend for which the data qualified under the prior contract 
or license. The marking procedures in paragraph (f)(1) of this clause 
shall be followed.
    (g) Contractor procedures and records. Throughout performance of 
this contract, the Contractor and its subcontractors or suppliers that 
will deliver technical data with other than unlimited rights, shall--
    (1) Have, maintain, and follow written procedures sufficient to 
assure that restrictive markings are used only when authorized by the 
terms of this clause; and
    (2) Maintain records sufficient to justify the validity of any 
restrictive markings on technical data delivered under this contract.
    (h) Removal of unjustified and nonconforming markings--(1) 
Unjustified technical data markings. The rights and obligations of the 
parties regarding the validation of restrictive markings on technical 
data furnished or to

[[Page 386]]

be furnished under this contract are contained in the Validation of 
Restrictive Markings on Technical Data clause of this contract. 
Notwithstanding any provision of this contract concerning inspection and 
acceptance, the Government may ignore or, at the Contractor's expense, 
correct or strike a marking if, in accordance with the procedures in the 
Validation of Restrictive Markings on Technical Data clause of this 
contract, a restrictive marking is determined to be unjustified.
    (2) Nonconforming technical data markings. A nonconforming marking 
is a marking placed on technical data delivered or otherwise furnished 
to the Government under this contract that is not in the format 
authorized by this contract. Correction of nonconforming markings is not 
subject to the Validation of Restrictive Markings on Technical Data 
clause of this contract. If the Contracting Officer notifies the 
Contractor of a nonconforming marking and the Contractor fails to remove 
or correct such marking within sixty (60) days, the Government may 
ignore or, at the Contractor's expense, remove or correct any 
nonconforming marking.
    (i) Relation to patents. Nothing contained in this clause shall 
imply a license to the Government under any patent or be construed as 
affecting the scope of any license or other right otherwise granted to 
the Government under any patent.
    (j) Limitation on charges for rights in technical data. (1) The 
Contractor shall not charge to this contract any cost, including, but 
not limited to, license fees, royalties, or similar charges, for rights 
in technical data to be delivered under this contract when--
    (i) The Government has acquired, by any means, the same or greater 
rights in the data; or
    (ii) The data are available to the public without restrictions.
    (2) The limitation in paragraph (j)(1) of this clause--
    (i) Includes costs charged by a subcontractor or supplier, at any 
tier, or costs incurred by the Contractor to acquire rights in 
subcontractor or supplier technical data, if the subcontractor or 
supplier has been paid for such rights under any other Government 
contract or under a license conveying the rights to the Government; and
    (ii) Does not include the reasonable costs of reproducing, handling, 
or mailing the documents or other media in which the technical data will 
be delivered.
    (k) Applicability to subcontractors or suppliers. (1) The Contractor 
shall ensure that the rights afforded its subcontractors and suppliers 
under 10 U.S.C. 2320, 10 U.S.C. 2321, and the identification, assertion, 
and delivery processes of paragraph (e) of this clause are recognized 
and protected.
    (2) Whenever any technical data for noncommercial items is to be 
obtained from a subcontractor or supplier for delivery to the Government 
under this contract, the Contractor shall use this same clause in the 
subcontract or other contractual instrument, and require its 
subcontractors or suppliers to do so, without alteration, except to 
identify the parties. No other clause shall be used to enlarge or 
diminish the Government's, the Contractor's, or a higher-tier 
subcontractor's or supplier's rights in a subcontractor's or supplier's 
technical data.
    (3) Technical data required to be delivered by a subcontractor or 
supplier shall normally be delivered to the next higher-tier contractor, 
subcontractor, or supplier. However, when there is a requirement in the 
prime contract for data which may be submitted with other than unlimited 
rights by a subcontractor or supplier, then said subcontractor or 
supplier may fulfill its requirement by submitting such data directly to 
the Government, rather than through a higher-tier contractor, 
subcontractor, or supplier.
    (4) The Contractor and higher-tier subcontractors or suppliers shall 
not use their power to award contracts as economic leverage to obtain 
rights in technical data from their subcontractors or suppliers.
    (5) In no event shall the Contractor use its obligation to recognize 
and protect subcontractor or supplier rights in technical data as an 
excuse for failing to satisfy its contractual obligations to the 
Government.

                             (End of clause)

    Alternate I (JUN 1995). As prescribed in 227.7103-6(b), add the 
following paragraph (l) to the basic clause:

    (l) Publication for sale. (1) This paragraph only applies to 
technical data in which the Government has obtained unlimited rights or 
a license to make an unrestricted release of technical data.
    (2) The Government shall not publish a deliverable technical data 
item or items identified in this contract as being subject to paragraph 
(l) of this clause or authorize others to publish such data on its 
behalf if, prior to publication for sale by the Government and within 
twenty-four (24) months following the date specified in this contract 
for delivery of such data or the removal of any national security or 
export control restrictions, whichever is later, the Contractor 
publishes that item or items for sale and promptly notifies the 
Contracting Officer of such publication(s). Any such publication shall 
include a notice identifying the number of this contract and the 
Government's rights in the published data.
    (3) This limitation on the Government's right to publish for sale 
shall continue as

[[Page 387]]

long as the data are reasonably available to the public for purchase.

[60 FR 33490, June 28, 1995, as amended at 60 FR 61602, Nov. 30, 1995]



Sec. 252.227-7014  Rights in noncommercial computer software and 
          noncommercial computer software documentation.

    As prescribed in 227.7203-6(a)(1), use the following clause.

  Rights in Noncommercial Computer Software and Noncommercial Computer 
                    Software Documentation (JUN 1995)

    (a) Definitions. As used in this clause:
    (1) Commercial computer software means software developed or 
regularly used for nongovernmental purposes which--
    (i) Has been sold, leased, or licensed to the public;
    (ii) Has been offered for sale, lease, or license to the public;
    (iii) Has not been offered, sold, leased, or licensed to the public 
but will be available for commercial sale, lease, or license in time to 
satisfy the delivery requirements of this contract; or
    (iv) Satisfies a criterion expressed in paragraph (a)(1) (i), (ii), 
or (iii) of this clause and would require only minor modification to 
meet the requirements of this contract.
    (2) Computer database means a collection of recorded data in a form 
capable of being processed by a computer. The term does not include 
computer software.
    (3) Computer program means a set of instructions, rules, or 
routines, recorded in a form that is capable of causing a computer to 
perform a specific operation or series of operations.
    (4) Computer software means computer programs, source code, source 
code listings, object code listings, design details, algorithms, 
processes, flow charts, formulae, and related material that would enable 
the software to be reproduced, recreated, or recompiled. Computer 
software does not include computer databases or computer software 
documentation.
    (5) Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and other 
similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for using 
the software.
    (6) Developed means that--
    (i) A computer program has been successfully operated in a computer 
and tested to the extent sufficient to demonstrate to reasonable persons 
skilled in the art that the program can reasonably be expected to 
perform its intended purpose;
    (ii) Computer software, other than computer programs, has been 
tested or analyzed to the extent sufficient to demonstrate to reasonable 
persons skilled in the art that the software can reasonably be expected 
to perform its intended purpose; or
    (iii) Computer software documentation required to be delivered under 
a contract has been written, in any medium, in sufficient detail to 
comply with requirements under that contract.
    (7) Developed exclusively at private expense means development was 
accomplished entirely with costs charged to indirect cost pools, costs 
not allocated to a government contract, or any combination thereof.
    (i) Private expense determinations should be made at the lowest 
practicable level.
    (ii) Under fixed-price contracts, when total costs are greater than 
the firm-fixed-price or ceiling price of the contract, the additional 
development costs necessary to complete development shall not be 
considered when determining whether development was at government, 
private, or mixed expense.
    (8) Developed exclusively with government funds means development 
was not accomplished exclusively or partially at private expense.
    (9) Developed with mixed funding means development was accomplished 
partially with costs charged to indirect cost pools and/or costs not 
allocated to a government contract, and partially with costs charged 
directly to a government contract.
    (10) Government purpose means any activity in which the United 
States Government is a party, including cooperative agreements with 
international or multi-national defense organizations or sales or 
transfers by the United States Government to foreign governments or 
international organizations. Government purposes include competitive 
procurement, but do not include the rights to use, modify, reproduce, 
release, perform, display, or disclose computer software or computer 
software documentation for commercial purposes or authorize others to do 
so.
    (11) Government purpose rights means the rights to--
    (i) Use, modify, reproduce, release, perform, display, or disclose 
computer software or computer software documentation within the 
Government without restriction; and
    (ii) Release or disclose computer software or computer software 
documentation outside the Government and authorize persons to whom 
release or disclosure has been made to use, modify, reproduce, release, 
perform, display, or disclose the software or documentation for United 
States government purposes.
    (12) Minor modification means a modification that does not 
significantly alter the nongovernmental function or purpose of the 
software or is of the type customarily provided in the commercial 
marketplace.
    (13) Noncommercial computer software means software that does not 
qualify as commercial

[[Page 388]]

computer software under paragraph (a)(1) of this clause.
    (14) Restricted rights apply only to noncommercial computer software 
and mean the Government's rights to--
    (i) Use a computer program with one computer at one time. The 
program may not be accessed by more than one terminal or central 
processing unit or time shared unless otherwise permitted by this 
contract;
    (ii) Transfer a computer program to another Government agency 
without the further permission of the Contractor if the transferor 
destroys all copies of the program and related computer software 
documentation in its possession and notifies the licensor of the 
transfer. Transferred programs remain subject to the provisions of this 
clause;
    (iii) Make the minimum number of copies of the computer software 
required for safekeeping (archive), backup, or modification purposes;
    (iv) Modify computer software provided that the Government may--
    (A) Use the modified software only as provided in paragraphs (a)(14) 
(i) and (iii) of this clause; and
    (B) Not release or disclose the modified software except as provided 
in paragraphs (a)(14) (ii), (v) and (vi) of this clause;
    (v) Permit contractors or subcontractors performing service 
contracts (see 37.101 of the Federal Acquisition Regulation) in support 
of this or a related contract to use computer software to diagnose and 
correct deficiencies in a computer program, to modify computer software 
to enable a computer program to be combined with, adapted to, or merged 
with other computer programs or when necessary to respond to urgent 
tactical situations, provided that--
    (A) The Government notifies the party which has granted restricted 
rights that a release or disclosure to particular contractors or 
subcontractors was made;
    (B) Such contractors or subcontractors are subject to the use and 
non-disclosure agreement at 227.7103-7 of the Defense Federal 
Acquisition Regulation Supplement (DFARS) or are Government contractors 
receiving access to the software for performance of a Government 
contract that contains the clause at DFARS 252.227-7025, Limitations on 
the Use or Disclosure of Government-Furnished Information Marked with 
Restrictive Legends;
    (C) The Government shall not permit the recipient to decompile, 
disassemble, or reverse engineer the software, or use software 
decompiled, disassembled, or reverse engineered by the Government 
pursuant to paragraph (a)(14)(iv) of this clause, for any other purpose; 
and
    (D) Such use is subject to the limitation in paragraph (a)(14)(i) of 
this clause; and
    (vi) Permit contractors or subcontractors performing emergency 
repairs or overhaul of items or components of items procured under this 
or a related contract to use the computer software when necessary to 
perform the repairs or overhaul, or to modify the computer software to 
reflect the repairs or overhaul made, provided that--
    (A) The intended recipient is subject to the use and non-disclosure 
agreement at DFARS 227.7103-7 or is a Government contractor receiving 
access to the software for performance of a Government contract that 
contains the clause at DFARS 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends; and
    (B) The Government shall not permit the recipient to decompile, 
disassemble, or reverse engineer the software, or use software 
decompiled, disassembled, or reverse engineered by the Government 
pursuant to paragraph (a)(14)(iv) of this clause, for any other purpose.
    (15) Unlimited rights means rights to use, modify, reproduce, 
release, perform, display, or disclose computer software or computer 
software documentation in whole or in part, in any manner and for any 
purpose whatsoever, and to have or authorize others to do so.
    (b) Rights in computer software or computer software documentation. 
The Contractor grants or shall obtain for the Government the following 
royalty free, world-wide, nonexclusive, irrevocable license rights in 
noncommercial computer software or computer software documentation. All 
rights not granted to the Government are retained by the Contractor.
    (1) Unlimited rights. The Government shall have unlimited rights 
in--
    (i) Computer software developed exclusively with Government funds;
    (ii) Computer software documentation required to be delivered under 
this contract;
    (iii) Corrections or changes to computer software or computer 
software documentation furnished to the Contractor by the Government;
    (iv) Computer software or computer software documentation that is 
otherwise publicly available or has been released or disclosed by the 
Contractor or subcontractor without restriction on further use, release 
or disclosure, other than a release or disclosure resulting from the 
sale, transfer, or other assignment of interest in the software to 
another party or the sale or transfer of some or all of a business 
entity or its assets to another party;
    (v) Computer software or computer software documentation obtained 
with unlimited rights under another Government contract or as a result 
of negotiations; or

[[Page 389]]

    (vi) Computer software or computer software documentation furnished 
to the Government, under this or any other Government contract or 
subcontract thereunder with--
    (A) Restricted rights in computer software, limited rights in 
technical data, or government purpose license rights and the restrictive 
conditions have expired; or
    (B) Government purpose rights and the Contractor's exclusive right 
to use such software or documentation for commercial purposes has 
expired.
    (2) Government purpose rights. (i) Except as provided in paragraph 
(b)(1) of this clause, the Government shall have government purpose 
rights in computer software development with mixed funding.
    (ii) Government purpose rights shall remain in effect for a period 
of five years unless a different period has been negotiated. Upon 
expiration of the five-year or other negotiated period, the Government 
shall have unlimited rights in the computer software or computer 
software documentation. The government purpose rights period shall 
commence upon execution of the contract, subcontract, letter contract 
(or similar contractual instrument), contract modification, or option 
exercise that required development of the computer software.
    (iii) The Government shall not release or disclose computer software 
in which it has government purpose rights to any other person unless--
    (A) Prior to release or disclosure, the intended recipient is 
subject to the use and non-disclosure agreement at DFARS 227.7103-7; or
    (B) The recipient is a Government contractor receiving access to the 
software or documentation for performance of a Government contract that 
contains the clause at DFARS 252.227-7025, Limitations on the Use or 
Disclosure of Government Furnished Information Marked with Restrictive 
Legends.
    (3) Restricted rights. (i) The Government shall have restricted 
rights in noncommercial computer software required to be delivered or 
otherwise provided to the Government under this contract that were 
developed exclusively at private expense.
    (ii) The Contractor, its subcontractors, or suppliers are not 
required to provide the Government additional rights in noncommercial 
computer software delivered or otherwise provided to the Government with 
restricted rights. However, if the Government desires to obtain 
additional rights in such software, the Contractor agrees to promptly 
enter into negotiations with the Contracting Officer to determine 
whether there are acceptable terms for transferring such rights. All 
noncommercial computer software in which the Contractor has granted the 
Government additional rights shall be listed or described in a license 
agreement made part of the contract (see paragraph (b)(4) of this 
clause). The license shall enumerate the additional rights granted the 
Government.
    (4) Specifically negotiated license rights. (i) The standard license 
rights granted to the Government under paragraphs (b)(1) through (b)(3) 
of this clause, including the period during which the Government shall 
have government purpose rights in computer software, may be modified by 
mutual agreement to provide such rights as the parties consider 
appropriate but shall not provide the Government lesser rights in 
computer software than are enumerated in paragraph (a)(14) of this 
clause or lesser rights in computer software documentation than are 
enumerated in paragraph (a)(13) of the Rights in Technical Data--
Noncommercial Items clause of this contract.
    (ii) Any rights so negotiated shall be identified in a license 
agreement made part of this contract.
    (5) Prior government rights. Computer software or computer software 
documentation that will be delivered, furnished, or otherwise provided 
to the Government under this contract, in which the Government has 
previously obtained rights shall be delivered, furnished, or provided 
with the pre-existing rights, unless--
    (i) The parties have agreed otherwise; or
    (ii) Any restrictions on the Government's rights to use, modify, 
reproduce, release, perform, display, or disclose the data have expired 
or no longer apply.
    (6) Release from liability. The Contractor agrees to release the 
Government from liability for any release or disclosure of computer 
software made in accordance with paragraph (a)(14) or (b)(2)(iii) of 
this clause, in accordance with the terms of a license negotiated under 
paragraph (b)(4) of this clause, or by others to whom the recipient has 
released or disclosed the software, and to seek relief solely from the 
party who has improperly used, modified, reproduced, released, 
performed, displayed, or disclosed Contractor software marked with 
restrictive legends.
    (c) Rights in derivative computer software or computer software 
documentation. The Government shall retain its rights in the unchanged 
portions of any computer software or computer software documentation 
delivered under this contract that the Contractor uses to prepare, or 
includes in, derivative computer software or computer software 
documentation.
    (d) Third party copyrighted computer software or computer software 
documentation. The Contractor shall not, without the written approval of 
the Contracting Officer, incorporate any copyrighted computer software 
or computer software documentation in the software or documentation to 
be delivered under this contract unless the Contractor is

[[Page 390]]

the copyright owner or has obtained for the Government the license 
rights necessary to perfect a license or licenses in the deliverable 
software or documentation of the appropriate scope set forth in 
paragraph (b) of this clause, and prior to delivery of such--
    (1) Computer software, has provided a statement of the license 
rights obtained in a form acceptable to the Contracting Officer; or
    (2) Computer software documentation, has affixed to the transmittal 
document a statement of the license rights obtained.
    (e) Identification and delivery of computer software and computer 
software documentation to be furnished with restrictions on use, 
release, or disclosure. (1) This paragraph does not apply to 
restrictions based solely on copyright.
    (2) Except as provided in paragraph (e)(3) of this clause, computer 
software that the Contractor asserts should be furnished to the 
Government with restrictions on use, release, or disclosure is 
identified in an attachment to this contract (the Attachment). The 
Contractor shall not deliver any software with restrictive markings 
unless the software is listed on the Attachment.
    (3) In addition to the assertions made in the Attachment, other 
assertions may be identified after award when based on new information 
or inadvertent omissions unless the inadvertent omissions would have 
materially affected the source selection decision. Such identification 
and assertion shall be submitted to the Contracting Officer as soon as 
practicable prior to the scheduled data for delivery of the software, in 
the following format, and signed by an official authorized to 
contractually obligate the Contractor: Identification and Assertion of 
Restrictions on the Government's Use, Release, or Disclosure of Computer 
Software.
    The Contractor asserts for itself, or the persons identified below, 
that the Government's rights to use, release, or disclose the following 
computer software should be restricted:

----------------------------------------------------------------------------------------------------------------
  Computer Software to be Furnished                                Asserted Rights      Name of Person Asserting
         With Restrictions*            Basis for Assertion**         Category***            Restrictions****
----------------------------------------------------------------------------------------------------------------
(LIST)                                (LIST)                   (LIST)                   (LIST)
----------------------------------------------------------------------------------------------------------------
*Generally, development at private expense, either exclusively or partially, is the only basis for asserting
  restrictions on the Government's rights to use, release, or disclose computer software.
**Indicate whether development was exclusively or partially at private expense. If development was not at
  private expense, enter the specific reason for asserting that the Government's rights should be restricted.
***Enter asserted rights category (e.g., restricted or government purpose rights in computer software,
  government purpose license rights from a prior contract, rights in SBIR software generated under another
  contract, or specifically negotiated licenses).
****Corporation, individual, or other person, as appropriate.


Date____________________________________________________________________

Printed Name and Title__________________________________________________

________________________________________________________________________

Signature_______________________________________________________________

                  (End of identification and assertion)

    (4) When requested by the Contracting Officer, the Contractor shall 
provide sufficient information to enable the Contracting Officer to 
evaluate the Contractor's assertions. The Contracting Officer reserves 
the right to add the Contractor's assertions to the Attachment and 
validate any listed assertion, at a later date, in accordance with the 
procedures of the Validation of Asserted Restrictions--Computer Software 
clause of this contract.
    (f) Marking requirements. The Contractor, and its subcontractors or 
suppliers, may only assert restrictions on the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose computer 
software by marking the deliverable software or documentation subject to 
restriction. Except as provided in paragraph (f)(5) of this clause, only 
the following legends are authorized under this contract; the government 
purpose rights legend at paragraph (f)(2) of this clause; the restricted 
rights legend at paragraph (f)(3) of this clause; or the special license 
rights legend at paragraph (f)(4) of this clause; and/or a notice of 
copyright as prescribed under 17 U.S.C. 401 or 402.
    (1) General marking instructions. The Contractor, or its 
subcontractors or suppliers, shall conspicuously and legibly mark the 
appropriate legend on all computer software that qualify for such 
markings. The authorized legends shall be placed on the transmitted 
document or software storage container and each page, or portions 
thereof, of printed material containing computer software for which 
restrictions are asserted. Computer software transmitted directly from 
one computer or computer terminal to another shall contain a notice of 
asserted restrictions. However, instructions that interfere with or 
delay the operation of computer software in order to display a 
restrictive rights legend or other license statement at any time prior 
to or during use of the computer software, or otherwise cause such 
interference or delay, shall not be inserted in software that will or 
might be used in combat or situations that simulate combat conditions, 
unless the Contracting Officer's written permission to deliver such 
software has been obtained prior to delivery. Reproductions of computer 
software or any portions thereof subject to asserted restrictions, shall 
also reproduce the asserted restrictions.
    (2) Government purpose rights markings. Computer software delivered 
or otherwise

[[Page 391]]

furnished to the Government with government purpose rights shall be 
marked as follows:

                        Government Purpose Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________

________________________________________________________________________

Expiration Date_________________________________________________________
    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose this software are restricted by paragraph (b)(2) of 
the Rights in Noncommercial Computer Software and Noncommercial Computer 
Software Documentation clause contained in the above identified 
contract. No restrictions apply after the expiration date shown above. 
Any reproduction of the software or portions thereof marked with this 
legend must also reproduce the markings.

                             (End of legend)

    (3) Restricted rights markings. Software delivered or otherwise 
furnished to the Government with restricted rights shall be marked with 
the following legend:

                            Restricted Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________
________________________________________________________________________
    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose this software are restricted by paragraph (b)(3) of 
the Rights in Noncommercial Computer Software and Noncommercial Computer 
Software Documentation clause contained in the above identified 
contract. Any reproduction of computer software or portions thereof 
marked with this legend must also reproduce the markings. Any person, 
other than the Government, who has been provided access to such software 
must promptly notify the above named Contractor.

                             (End of legend)

    (4) Special license rights markings. (i) Computer software or 
computer documentation in which the Government's rights stem from a 
specifically negotiated license shall be marked with the following 
legend:

                         Special License Rights

    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose this software are restricted by Contract No. ------
--(Insert contract number)--------, License No.--------(Insert license 
identifier)--------. Any reproduction of computer software, computer 
software documentation, or portions thereof marked with this legend must 
also reproduce the markings.

                             (End of legend)

    (ii) For purposes of this clause, special licenses do not include 
government purpose license rights acquired under a prior contract (see 
paragraph (b)(5) of this clause).
    (5) Pre-existing markings. If the terms of a prior contract or 
license permitted the Contractor to restrict the Government's rights to 
use, modify, release, perform, display, or disclose computer software or 
computer software documentation and those restrictions are still 
applicable, the Contractor may mark such software or documentation with 
the appropriate restrictive legend for which the software qualified 
under the prior contract or license. The marking procedures in paragraph 
(f)(1) of this clause shall be followed.
    (g) Contractor procedures and records. Throughout performance of 
this contract, the Contractor and its subcontractors or suppliers that 
will deliver computer software or computer software documentation with 
other than unlimited rights, shall--
    (1) Have, maintain, and follow written procedures sufficient to 
assure that restrictive markings are used only when authorized by the 
terms of this clause; and
    (2) Maintain records sufficient to justify the validity of any 
restrictive markings on computer software or computer software 
documentation delivered under this contract.
    (h) Removal of unjustified and nonconforming markings--(1) 
Unjustified computer software or computer software documentation 
markings. The rights and obligations of the parties regarding the 
validation of restrictive markings on computer software or computer 
software documentation furnished or to be furnished under this contract 
are contained in the Validation of Asserted Restrictions--Computer 
Software and the Validation of Restrictive Markings on Technical Data 
clauses of this contract, respectively. Notwithstanding any provision of 
this contract concerning inspection and acceptance, the Government may 
ignore or, at the Contractor's expense, correct or strike a marking if, 
in accordance with the procedures of those clauses, a restrictive 
marking is determined to be unjustified.
    (2) Nonconforming computer software or computer software 
documentation markings. A nonconforming marking is a marking placed on 
computer software or computer software documentation delivered or 
otherwise furnished to the Government under this contract that is not in 
the format authorized by this contract. Correction of nonconforming 
markings is not subject to the Validation of

[[Page 392]]

Asserted Restrictions--Computer Software or the Validation of 
Restrictive Markings on Technical Data clause of this contract. If the 
Contracting Officer notifies the Contractor of a nonconforming marking 
or markings and the Contractor fails to remove or correct such markings 
within sixty (60) days, the Government may ignore or, at the 
Contractor's expense, remove or correct any nonconforming markings.
    (i) Relation to patents. Nothing contained in this clause shall 
imply a license to the Government under any patent or be construed as 
affecting the scope of any license or other right otherwise granted to 
the Government under any patent.
    (j) Limitation on charges for rights in computer software or 
computer software documentation. (1) The Contractor shall not charge to 
this contract any cost, including but not limited to license fees, 
royalties, or similar charges, for rights in computer software or 
computer software documentation to be delivered under this contract 
when--
    (i) The Government has acquired, by any means, the same or greater 
rights in the software or documentation; or
    (ii) The software or documentation are available to the public 
without restrictions.
    (2) The limitation in paragraph (j)(1) of this clause--
    (i) Includes costs charged by a subcontractor or supplier, at any 
tier, or costs incurred by the Contractor to acquire rights in 
subcontractor or supplier computer software or computer software 
documentation, if the subcontractor or supplier has been paid for such 
rights under any other Government contract or under a license conveying 
the rights to the Government; and
    (ii) Does not include the reasonable costs of reproducing, handling, 
or mailing the documents or other media in which the software or 
documentation will be delivered.
    (k) Applicability to subcontractors or suppliers. (1) Whenever any 
noncommercial computer software or computer software documentation is to 
be obtained from a subcontractor or supplier for delivery to the 
Government under this contract, the Contractor shall use this same 
clause in its subcontracts or other contractual instruments, and require 
its subcontractors or suppliers to do so, without alteration, except to 
identify the parties. No other clause shall be used to enlarge or 
diminish the Government's, the Contractor's, or a higher tier 
subcontractor's or supplier's rights in a subcontractor's or supplier's 
computer software or computer software documentation.
    (2) The Contractor and higher tier subcontractors or suppliers shall 
not use their power to award contracts as economic leverage to obtain 
rights in computer software or computer software documentation from 
their subcontractors or suppliers.
    (3) The Contractor shall ensure that subcontractor or supplier 
rights are recognized and protected in the identification, assertion, 
and delivery processes required by paragraph (e) of this clause.
    (4) In no event shall the Contractor use its obligation to recognize 
and protect subcontractor or supplier rights in computer software or 
computer software documentation as an excuse for failing to satisfy its 
contractual obligation to the Government.

                             (End of clause)

    Alternate I (JUN 1995). As prescribed in 227.7203-6(a)(2), add the 
following paragraph (l) to the basic clause:

    (l) Publication for sale. (1) This paragraph only applies to 
computer software or computer software documentation in which the 
Government has obtained unlimited rights or a license to make an 
unrestricted release of the software or documentation.
    (2) The Government shall not publish a deliverable item or items of 
computer software or computer software documentation identified in this 
contract as being subject to paragraph (l) of this clause or authorize 
others to publish such software or documentation on its behalf if, prior 
to publication for sale by the Government and within twenty-four (24) 
months following the date specified in this contract for delivery of 
such software or documentation, or the removal of any national security 
or export control restrictions, whichever is later, the Contractor 
publishes that item or items for sale and promptly notifies the 
Contracting Officer of such publication(s). Any such publication shall 
include a notice identifying the number of this contract and the 
Government's rights in the published software or documentation.
    (3) This limitation on the Government's rights to publish for sale 
shall continue as long as the software or documentation are reasonably 
available to the public for purchase.

[60 FR 33493, June 28, 1995]



Sec. 252.227-7015  Technical data--Commercial items.

    As prescribed in 227.7102-3, use the following clause:

               Technical Data--Commercial Items (NOV 1995)

    (a) Definitions. As used in this clause:
    (1) Commercial item does not include commercial computer software.
    (2) Form, fit, and function data means technical data that describes 
the required overall physical, functional, and performance 
characteristics (along with the qualification requirements, if 
applicable) of an item, component, or process to the extent necessary to

[[Page 393]]

permit identification of physically and functionally interchangeable 
items.
    (3) The term item includes components or processes.
    (4) Technical data means recorded information, regardless of the 
form or method of recording, of a scientific or technical nature 
(including computer software documentation). The term does not include 
computer software or data incidental to contract administration, such as 
financial and/or management information.
    (b) License. (1) The Government shall have the unrestricted right to 
use, modify, reproduce, release, perform, display, or disclose technical 
data, and to permit others to do so, that--
    (i) Have been provided to the Government or others without 
restrictions on use, modification, reproduction, release, or further 
disclosure other than a release or disclosure resulting from the sale, 
transfer, or other assignment of interest in the technical data to 
another party or the sale or transfer of some or all of a business 
entity or its assets to another party;
    (ii) Are form, fit, and function data;
    (iii) Are a correction or change to technical data furnished to the 
Contractor by the Government;
    (iv) Are necessary for operation, maintenance, installation, or 
training (other than detailed manufacturing or process data); or
    (v) Have been provided to the Government under a prior contract or 
licensing agreement through which the Government has acquired the rights 
to use, modify, reproduce, release, perform, display, or disclose the 
data without restrictions.
    (2) Except as provided in paragraph (b)(1) of this clause, the 
Government may use, modify, reproduce, release, perform, display, or 
disclose technical data within the Government only. The Government shall 
not--
    (i) Use the technical data to manufacture additional quantities of 
the commercial items; or
    (ii) Release, perform, display, disclose, or authorize use of the 
technical data outside the Government without the Contractor's written 
permission unless a release, disclosure or permitted use is necessary 
for emergency repair or overhaul of the commercial items furnished under 
this contract.
    (c) Additional license rights. The Contractor, its subcontractors, 
and suppliers are not required to provide the Government additional 
rights to use, modify, reproduce, release, perform, display, or disclose 
technical data. However, if the Government desires to obtain additional 
rights in technical data, the Contractor agrees to promptly enter into 
negotiations with the Contracting Officer to determine whether there are 
acceptable terms for transferring such rights. All technical data in 
which the Contractor has granted the Government additional rights shall 
be listed or described in a special license agreement made part of this 
contract. The license shall enumerate the additional rights granted the 
Government in such data.
    (d) Release from liability. The Contractor agrees that the 
Government, and other persons to whom the Government may have released 
or disclosed technical data delivered or otherwise furnished under this 
contract, shall have no liability for any release or disclosure of 
technical data that are not marked to indicate that such data are 
licensed data subject to use, modification, reproduction, release, 
performance, display, or disclosure restrictions.

                             (End of clause)

[60 FR 33497, June 28, 1995, as amended at 60 FR 61602, Nov. 30, 1995]



Sec. 252.227-7016  Rights in bid or proposal information.

    As prescribed in 227.7103-6(e)(1), 227.7104(e)(1), or 227.7203-6(b), 
use the following clause:

            Rights in Bid or Proposal Information (JUN 1995)

    (a) Definitions. (1) For contracts that require the delivery of 
technical data, the terms ``technical data'' and ``computer software'' 
are defined in the Rights in Technical Data--Noncommercial Item clause 
of this contract or, if this is a contract awarded under the Small 
Business Innovative Research Program, the Rights in Noncommercial 
Technical Data and Computer Software--Small Business Innovative Research 
(SBIR) Program clause of this contract.
    (2) For contracts that do not require the delivery of technical 
data, the term ``computer software'' is defined in the Rights in 
Noncommercial Computer and Noncommercial Computer Software Documentation 
clause of this contract or, if this is a contract awarded under the 
Small Business Innovative Research Program, the Rights in Noncommercial 
Technical Data and Computer Software--Small Business Innovative Research 
(SBIR) Program clause of this contract.
    (b) Government rights to contract award. By submission of its offer, 
the Offeror agrees that the Government--
    (1) May reproduce the bid or proposal, or any portions thereof, to 
the extent necessary to evaluate the offer.
    (2) Except as provided in paragraph (d) of this clause, shall use 
information contained in the bid or proposal only for evaluational 
purposes and shall not disclose, directly or indirectly, such 
information to any person including potential evaluators, unless that 
person has been authorized by the head of

[[Page 394]]

the agency, his or her designee, or the Contracting Officer to receive 
such information.
    (c) Government rights subsequent to contract award. The Contractor 
agrees--
    (1) Except as provided in paragraphs (c)((2), (d), and (e) of this 
clause, the Government shall have the rights to use, modify, reproduce, 
release, perform, display, or disclose information contained in the 
Contractor's bid or proposal within the Government. The Government shall 
not release, perform, display, or disclose such information outside the 
Government without the Contractor's written permission.
    (2) The Government's right to use, modify, reproduce, release, 
perform, display, or disclose information that is technical data or 
computer software required to be delivered under this contract are 
determined by the Rights in Technical Data--Noncommercial Items, Rights 
in Noncommercial Computer Software and Noncommercial Computer Software 
Documentation, or Rights in Noncommercial Technical Data and Computer 
Software--Small Business Innovative Research (SBIR) Program clause(s) of 
this contract.
    (d) Government-furnished information. The Government's rights with 
respect to technical data or computer software contained in the 
Contractor's bid or proposal that were provided to the Contractor by the 
Government are subject only to restrictions on use, modification, 
reproduction, release, performance, display, or disclosure, if any, 
imposed by the developer or licensor of such data or software.
    (e) Information available without restrictions. The Government's 
rights to use, modify, reproduce, release, perform, display, or, 
disclose information contained in a bid or proposal, including technical 
data or computer software, and to permit others to do so, shall not be 
restricted in any manner if such information has been released or 
disclosed to the Government or to other persons without restrictions 
other than a release or disclosure resulting from the sale, transfer, or 
other assignment of interest in the information to another party or the 
sale or transfer of some or all of a business entity or its assets to 
another party.
    (f) Flowdown. Contractor shall include this clause in all 
subcontracts or similar contractual instruments and require its 
subcontractors or suppliers to do so without alteration, except to 
identify the parties.

                             (End of clause)

[60 FR 33498, June 28, 1995]



Sec. 252.227-7017  Identification and assertion of use, release, or 
          disclosure restrictions.

    As prescribed in 227.7103-3(b), 227.7104(e)(2), or 227.7203-3(a), 
use the following provision:

Identification and Assertion of Use, Release, or Disclosure Restrictions 
                               (JUN 1995)

    (a) The terms used in this provision are defined in following clause 
or clauses contained in this solicitation--
    (1) If a successful offeror will be required to deliver technical 
data, the Rights in Technical Data--Noncommercial Items clause, or, if 
this solicitation contemplates a contract under the Small Business 
Innovative Research Program, the Rights in Noncommercial Technical Data 
and Computer Software--Small Business Innovative Research (SBIR) Program 
clause.
    (2) If a successful offeror will not be required to deliver 
technical data, the Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation clause, or, if this 
solicitation contemplates a contract under the Small Business Innovative 
Research Program, the Rights in Noncommercial Technical Data and 
Computer Software--Small Business Innovative Research (SBIR) Program 
clause.
    (b) The identification and assertion requirements in this provision 
apply only to technical data, including computer software documents, or 
computer software to be delivered with other than unlimited rights. For 
contracts to be awarded under the Small Business Innovative Research 
Program, the notification requirements do not apply to technical data or 
computer software that will be generated under the resulting contract. 
Notification and identification is not required for restrictions based 
solely on copyright.
    (c) Offers submitted in response to this solicitation shall 
identify, to the extent known at the time an offer is submitted to the 
Government, the technical data or computer software that the Offeror, 
its subcontractors or suppliers, or potential subcontractors or 
suppliers, assert should be furnished to the Government with 
restrictions on use, release, or disclosure.
    (d) The Offeror's assertions, including the assertions of its 
subcontractors or suppliers or potential subcontractors or suppliers 
shall be submitted as an attachment to its offer in the following 
format, dated and signed by an official authorized to contractually 
obligate the Offeror:

[[Page 395]]

 Identification and Assertion of Restrictions on the Government's Use, 
      Release, or Disclosure of Technical Data or Computer Software

    The Offeror asserts for itself, or the persons identified below, 
that the Government's rights to use, release, or disclose the following 
technical data or computer software should be restricted:

--------------------------------------------------------------------------------------------------------------------------------------------------------
   Technical Data or Computer Software to be Furnished With                                                                   Name of Person Asserting
                         Restrictions*                              Basis for Assertion**      Asserted Rights Category***        Restrictions****
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          (LIST)*****                                      (LIST)                        (LIST)                        (LIST)
--------------------------------------------------------------------------------------------------------------------------------------------------------
*For technical data (other than computer software documentation) pertaining to items, components, or processes developed at private expense, identify
  both the deliverable technical data and each such items, component, or process. For computer software or computer software documentation identify the
  software or documentation.
**Generally, development at private expense, either exclusively or partially, is the only basis for asserting restrictions. For technical data, other
  than computer software documentation, development refers to development of the item, component, or process to which the data pertain. The Government's
  rights in computer software documentation generally may not be restricted. For computer software, development refers to the software. Indicate whether
  development was accomplished exclusively or partially at private expense. If development was not accomplished at private expense, or for computer
  software documentation, enter the specific basis for asserting restrictions.
***Enter asserted rights category (e.g., government purpose license rights from a prior contract, rights in SBIR data generated under another contract,
  limited, restricted, or government purpose rights under this or a prior contract, or specially negotiated licenses).
****Corporation, individual, or other person, as appropriate.
*****Enter ``none'' when all data or software will be submitted without restrictions.

Date____________________________________________________________________

Printed Name and Title__________________________________________________

________________________________________________________________________

Signature_______________________________________________________________

                  (End of identification and assertion)

    (e) An offeror's failure to submit, complete, or sign the 
notification and identification required by paragraph (d) of this 
provision with its offer may render the offer ineligible for award.
    (f) If the Offeror is awarded a contract, the assertions identified 
in paragraph (d) of this provision shall be listed in an attachment to 
that contract. Upon request by the Contracting Officer, the Offeror 
shall provide sufficient information to enable the Contracting Officer 
to evaluate any listed assertion.

                           (End of provision)

[60 FR 33498, June 28, 1994]



Sec. 252.227-7018  Rights in noncommercial technical data and computer 
          software--Small Business Innovation Research (SBIR) Program.

    As prescribed in 227.7104(a), use the following clause:

  Rights in Noncommercial Technical Data and Computer Software--Small 
         Business Innovation Research (SBIR) Program (JUN 1995)

    (a) Definitions. As used in this clause:
    (1) Commercial computer software means software developed or 
regularly used for nongovernmental purposes which--
    (i) Has been sold, leased, or licensed to the public;
    (ii) Has been offered for sale, lease, or license to the public;
    (iii) Has not been offered, sold, leased, or licensed to the public 
but will be available for commercial sale, lease, or license in time to 
satisfy the delivery requirements of this contract; or
    (iv) Satisfies a criterion expressed in paragraph (a)(1)(i), (ii), 
or (iii) of this clause and would require only minor modification to 
meet the requirements of this contract.
    (2) Computer database means a collection of recorded data in a form 
capable of being processed by a computer. The term does not include 
computer software.
    (3) Computer program means a set of instructions, rules, or 
routines, recorded in a form that is capable of causing a computer to 
perform a specific operation or series of operations.
    (4) Computer software means computer programs, source code, source 
code listings, object code listings, design details, algorithms, 
processes, flow charts, formulae, and related material that would enable 
the software to be reproduced, re-created, or recompiled. Computer 
software does not include computer databases or computer software 
documentation.
    (5) Computer software documentation means owner's manuals, user's 
manuals, installation instructions, operating instructions, and other 
similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for using 
the software.
    (6) Detailed manufacturing or process data means technical data that 
describe the steps, sequences, and conditions of manufacturing,

[[Page 396]]

processing or assembly used by the manufacturer to produce an item or 
component or to perform a process.
    (7) Developed means--
    (i) (Applicable to technical data other than computer software 
documentation.) An item, component, or process, exists and is workable. 
Thus, the item or component must have been constructed or the process 
practiced. Workability is generally established when the item, 
component, or process has been analyzed or tested sufficiently to 
demonstrate to reasonable people skilled in the applicable art that 
there is a high probability that it will operate as intended. Whether, 
how much, and what type of analysis or testing is required to establish 
workability depends on the nature of the item, component, or process, 
and the state of the art. To be considered ``developed,'' the item, 
component, or process need not be at the stage where it could be offered 
for sale or sold on the commercial market, nor must the item, component 
or process be actually reduced to practice within the meaning of Title 
35 of the United States Code;
    (ii) A computer program has been successfully operated in a computer 
and tested to the extent sufficient to demonstrate to reasonable persons 
skilled in the art that the program can reasonably be expected to 
perform its intended purpose;
    (iii) Computer software, other than computer programs, has been 
tested or analyzed to the extent sufficient to demonstrate to reasonable 
persons skilled in the art that the software can reasonably be expected 
to perform its intended purpose; or
    (iv) Computer software documentation required to be delivered under 
a contract has been written, in any medium, in sufficient detail to 
comply with requirements under that contract.
    (8) Developed exclusively at private expense means development was 
accomplished entirely with costs charged to indirect cost pools, costs 
not allocated to a government contract, or any combination thereof.
    (i) Private expense determinations should be made at the lowest 
practicable level.
    (ii) Under fixed-price contracts, when total costs are greater than 
the firm-fixed-price or ceiling price of the contract, the additional 
development costs necessary to complete development shall not be 
considered when determining whether development was at government, 
private, or mixed expense.
    (9) Developed exclusively with government funds means development 
was not accomplished exclusively or partially at private expense.
    (10) Developed with mixed funding means development was accomplished 
partially with costs charged to indirect cost pools and/or costs not 
allocated to a government contract, and partially with costs charged 
directly to a government contract.
    (11) Form, fit, and function data means technical data that describe 
the required overall physical, functional, and performance 
characteristics (along with the qualification requirements, if 
applicable) of an item, component, or process to the extent necessary to 
permit identification of physically and functionally interchangeable 
items.
    (12) Generated means technical data or computer software first 
created in the performance of this contract.
    (13) Government purpose means any activity in which the United 
States Government is a party, including cooperative agreements with 
international or multi-national defense organizations or sales or 
transfers by the United States Government to foreign governments or 
international organizations. Government purposes include competitive 
procurement, but do not include the rights to use, modify, reproduce, 
release, perform, display, or disclose technical data or computer 
software for commercial purposes or authorize others to do so.
    (14) Limited rights means the rights to use, modify, reproduce, 
release, perform, display, or disclose technical data, in whole or in 
part, within the Government. The Government may not, without the written 
permission of the party asserting limited rights, release or disclose 
the technical data outside the Government, use the technical data for 
manufacture, or permit the technical data to be used by another party, 
except that the Government may reproduce, release or disclose such data 
or permit the use or reproduction of the data by persons outside the 
Government if reproduction, release, disclosure, or use is--
    (i) Necessary for emergency repair and overhaul; or
    (ii) A release or disclosure of technical data (other than detailed 
manufacturing or process data) to, or use of such data by, a foreign 
government that is in the interest of the Government and is required for 
evaluational or informational purposes;
    (iii) Subject to a prohibition on the further reproduction, release 
disclosure, or use of the technical data; and
    (iv) The Contractor or subcontractor asserting the restriction is 
notified of such reproduction, release, disclosure, or use.
    (15) Minor modification means a modification that does not 
significantly alter the nongovernmental function or purpose of computer 
software or is of the type customarily provided in the commercial 
marketplace.
    (16) Noncommercial computer software means software that does not 
qualify as commercial computer software under paragraph (a)(1) of this 
clause.
    (17) Restricted rights apply only to noncommercial computer software 
and mean the Government's rights to--

[[Page 397]]

    (i) Use a computer program with one computer at one time. The 
program may not be accessed by more than one terminal or central 
processing unit or time shared unless otherwise permitted by this 
contract;
    (ii) Transfer a computer program to another Government agency 
without the further permission of the Contractor if the transferor 
destroys all copies of the program and related computer software 
documentation in its possession and notifies the licensor of the 
transfer. Transferred programs remain subject to the provisions of this 
clause;
    (iii) Make the minimum number of copies of the computer software 
required for safekeeping (archive), backup, or modification purposes;
    (iv) Modify computer software provided that the Government may--
    (A) Use the modified software only as provided in paragraphs (a)(17) 
(i) and (iii) of this clause; and
    (B) Not release or disclose the modified software except as provided 
in paragraphs (a)(17) (ii), (v) and (vi) of this clause;
    (v) Permit contractors or subcontractors performing service 
contracts (see 37.101 of the Federal Acquisition Regulation) in support 
of this or a related contract to use computer software to diagnose and 
correct deficiencies in a computer program, to modify computer software 
to enable a computer program to be combined with, adapted to, or merged 
with other computer programs or when necessary to respond to urgent 
tactical situations, provided that--
    (A) The Government notifies the party which has granted restricted 
rights that a release or disclosure to particular contractors or 
subcontractors was made;
    (B) Such contractors or subcontractors are subject to the non-
disclosure agreement at 227.7103-7 of the Defense Federal Acquisition 
Regulation Supplement (DFARS or are Government contractors receiving 
access to the software for performance of a Government contract that 
contains the clause at DFARS 252.227-7025, Limitations on the Use or 
Disclosure of Government-Furnished Information Marked with Restrictive 
Legends;
    (C) The Government shall not permit the recipient to decompile 
disassemble, or reverse engineer the software, or use software 
decompiled, disassembled, or reverse engineered by the Government 
pursuant to paragraph (a)(17)(iv) of this clause, for any other purpose; 
and
    (D) Such use is subject to the limitation in paragraph (a)(17)(i) of 
this clause; and
    (vi) Permit contractors or subcontractors performing emergency 
repairs or overhaul of items or components of items, procured under this 
or a related contract to use the computer software when necessary to 
perform the repairs or overhaul, or to modify the computer software to 
reflect the repairs or overhaul made, provided that--
    (A) The intended recipient is subject to the non-disclosure 
agreement at DFARS 227.7103-7 or is a Government contractor receiving 
access to the software for performance of a Government contract that 
contains the clause at DFARS 252.227-7025, Limitations on the Use or 
Disclosure of Government Furnished Information Marked with Restrictive 
Legends; and
    (B) The Government shall not permit the recipient to decompile, 
disassemble, or reverse engineer the software, or use software 
decompiled, disassembled, or reverse engineered by the Government 
pursuant to paragraph (a)(17)(iv) of this clause, for any other purpose.
    (18) SBIR data rights means a royalty-free license for the 
Government, including its support service contractors, to use, modify, 
reproduce, release, perform, display, or disclose technical data or 
computer software generated and delivered under this contract for any 
United States Government purpose.
    (19) Technical data means recorded information, regardless of the 
form or method of the recording, of a scientific or technical nature 
(including computer software documentation). The term does not include 
computer software or data incidental to contract administration, such as 
financial and/or management information.
    (20) Unlimited rights means rights to use, modify, reproduce, 
release, perform, display, or disclose, technical data or computer 
software in whole or in part, in any manner and for any purpose 
whatsoever, and to have or authorize others to do so.
    (b) Rights in technical data and computer software. The Contractor 
grants or shall obtain for the Government the following royalty-free, 
world-wide, nonexclusive, irrevocable license rights in technical data 
or noncommercial computer software. All rights not granted to the 
Government are retained by the Contractor.
    (1) Unlimited rights. The Government shall have unlimited rights in 
technical data, including computer software documentation, or computer 
software generated under this contract that are--
    (i) Form, fit, and function data;
    (ii) Necessary for installation, operation, maintenance, or training 
purposes (other than detailed manufacturing or process data);
    (iii) Corrections or changes to Government-furnished technical data 
or computer software;
    (iv) Otherwise publicly available or have been released or disclosed 
by the Contractor or a subcontractor without restrictions on further 
use, release or disclosure other than a release or disclosure resulting 
from the sale, transfer, or other assignment of interest in the 
technical data or computer software to another party or the sale or 
transfer

[[Page 398]]

of some or all of a business entity or its assets to another party;
    (v) Data or software in which the Government has acquired previously 
unlimited rights under another Government contract or through a specific 
license; and
    (vi) SBIR data upon expiration of the SBIR data rights period.
    (2) Limited rights. The Government shall have limited rights in 
technical data, that were not generated under this contract, pertain to 
items, components or processes developed exclusively at private expense, 
and are marked, in accordance with the marking instructions in paragraph 
(f)(1) of this clause, with the legend prescribed in paragraph (f)(2) of 
this clause.
    (3) Restricted rights in computer software. The Government shall 
have restricted rights in noncommercial computer software required to be 
delivered or otherwise furnished to the Government under this contract 
that were developed exclusively at private expense and were not 
generated under this contract.
    (4) SBIR data rights. (i) Except for technical data, including 
computer software documentation, or computer software in which the 
Government has unlimited rights under paragraph (b)(1) of this clause, 
the Government shall have SBIR data rights in all technical data or 
computer software generated under this contract during the period 
commencing with contract award and ending upon the date five years after 
completion of the project from which such data were generated.
    (ii) The Government may not release or disclose SBIR data to any 
person, other than its support services contractors, except--
    (A) As expressly permitted by the Contractor;
    (B) For evaluation purposes; or
    (C) A release, disclosure, or use that is necessary for emergency 
repair or overhaul of items operated by the Government.
    (iii) A release or disclosure of SBIR data to the Government's 
support services contractors, or a release or disclosure under paragraph 
(b)(4)(ii)(B) or (C) of this clause, may be made only if, prior to 
release or disclosure, the intended recipient is subject to the use and 
non-disclosure agreement at DFARS 227.7103-7 or is a Government 
contractor receiving access to the technical data or software for 
performance of a Government contract that contains the clause at DFARS 
252.227-7025, Limitations on the Use of Disclosure of Government-
Furnished Information Marked with Restrictive Legends.
    (5) Specifically negotiated license rights. The standard license 
rights granted to the Government under paragraphs (b)(1) through (b)(4) 
of this clause may be modified by mutual agreement to provide such 
rights as the parties consider appropriate but shall not provide the 
Government lesser rights in technical data, including computer software 
documentation, than are enumerated in paragraph (a)(14) of this clause 
or lesser rights in computer software than are enumerated in paragraph 
(a)(17) of this clause. Any rights so negotiated shall be identified in 
a license agreement made part of this contract.
    (6) Prior government rights. Technical data, including computer 
software documentation, or computer software that will be delivered, 
furnished, or otherwise provided to the Government under this contract, 
in which the Government has previously obtained rights shall be 
delivered, furnished, or provided with the pre-existing rights, unless--
    (i) The parties have agreed otherwise; or
    (ii) Any restrictions on the Government's rights to use, modify, 
release, perform, display, or disclose the technical data or computer 
software have expired or no longer apply.
    (7) Release from liability. The Contractor agrees to release the 
Government from liability for any release or disclosure of technical 
data, computer software, or computer software documentation made in 
accordance with paragraph (a)(14), (a)(17), or (b)(4) of this clause, or 
in accordance with the terms of a license negotiated under paragraph 
(b)(5) of this clause, or by others to whom the recipient has released 
or disclosed the data, software, or documentation and to seek relief 
solely from the party who has improperly used, modified, reproduced, 
released, performed, displayed, or disclosed Contractor data or software 
marked with restrictive legends.
    (c) Rights in derivative computer software or computer software 
documentation. The Government shall retain its rights in the unchanged 
portions of any computer software or computer software documentation 
delivered under this contract that the Contractor uses to prepare, or 
includes in, derivative software or documentation.
    (d) Third party copyrighted technical data and computer software. 
The Contractor shall not, without the written approval of the 
Contracting Officer, incorporate any copyrighted technical data, 
including computer software documentation, or computer software in the 
data or software to be delivered under this contract unless the 
Contractor is the copyright owner or has obtained for the Government the 
license rights necessary to perfect a license or licenses in the 
deliverable data or software of the appropriate scope set forth in 
paragraph (b) of this clause and, prior to delivery of such--
    (1) Technical data, has affixed to the transmittal document a 
statement of the license rights obtained; or
    (2) Computer software, has provided a statement of the license 
rights obtained in a form acceptable to the Contracting Officer.

[[Page 399]]

    (e) Identification and delivery of technical data or computer 
software to be furnished with restrictions on use, release, or 
disclosure. (1) This paragraph does not apply to technical data or 
computer software that were or will be generated under this contract or 
to restrictions based solely on copyright.
    (2) Except as provided in paragraph (e)(3) of this clause, technical 
data or computer software that the Contractor asserts should be 
furnished to the Government with restrictions on use, release, or 
disclosure is identified in an attachment to this contract (the 
Attachment). The Contractor shall not deliver any technical data or 
computer software with restrictive markings unless the technical data or 
computer software are listed on the Attachment.
    (3) In addition to the assertions made in the Attachment, other 
assertions may be identified after award when based on new information 
or inadvertent omissions unless the inadvertent omissions would have 
materially affected the source selection decision. Such identification 
and assertion shall be submitted to the Contracting Officer as soon as 
practicable prior to the scheduled date for delivery of the technical 
data or computer software, in the following format, and signed by an 
official authorized to contractually obligate the Contractor:

 Identification and Assertion of Restrictions on the Government's Use, 
      Release, or Disclosure of Technical Data or Computer Software

    The Contractor asserts for itself, or the persons identified below, 
that the Government's rights to use, release, or disclose the following 
technical data or computer software should be restricted:

------------------------------------------------------------------------
                                                               Name of
  Technical data or computer                    Asserted       person
software to be furnished with    Basis for       rights       asserting
       restrictions \1\        assertion \2\  category \3\  restrictions
                                                                 \4\
------------------------------------------------------------------------
(LIST).......................  (LIST).......  (LIST)......  (LIST)
------------------------------------------------------------------------
\1\ If the assertion is applicable to items, components, or processes
  developed at private expense, identify both the technical data and
  each such item, component, or process.
\2\ Generally, development at private expense, either exclusively or
  partially, is the only basis for asserting restrictions on the
  Government's rights to use, release, or disclose technical data or
  computer software. Indicate whether development was exclusively or
  partially at private expense. If development was not at private
  expense, enter the specific reason for asserting that the Government's
  rights should be restricted.
\3\ Enter asserted rights category (e.g., limited rights, restricted
  rights, government purpose rights, or government purpose license
  rights from a prior contract, SBIR data rights under another contract,
  or specifically negotiated licenses).
\4\ Corporation, individual, or other person, as appropriate.

Date____________________________________________________________________

Printed Name and Title__________________________________________________

Signature_______________________________________________________________

                  (End of identification and assertion)

    (4) When requested by the Contracting Officer, the Contractor shall 
provide sufficient information to enable the Contracting Officer to 
evaluate the Contractor's assertions. The Contracting Officer reserves 
the right to add the Contractor's assertions to the Attachment and 
validate any listed assertions, at a later date, in accordance with the 
procedures of the Validation of Asserted Restrictions--Computer Software 
and/or Validation of Restrictive Markings on Technical Data clauses of 
this contract.
    (f) Marking requirements. The Contractor, and its subcontractors or 
suppliers, may only assert restrictions on the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose technical 
data or computer software to be delivered under this contract by marking 
the deliverable data or software subject to restriction. Except as 
provided in paragraph (f)(6) of this clause, only the following markings 
are authorized under this contract: the limited rights legend at 
paragraph (f)(2) of this clause; the restricted rights legend at 
paragraph (f)(3) of this clause, the SBIR data rights legend at 
paragraph (f)(4) of this clause, or the special license rights legend at 
paragraphs (f)(5) of this clause; and/or a notice of copyright as 
prescribed under 17 U.S.C. 401 or 402.
    (1) General marking instructions. The Contractor, or its 
subcontractors or suppliers, shall conspicuously and legibly mark the 
appropriate legend to all technical data and computer software that 
qualify for such markings. The authorized legends shall be placed on the 
transmittal document or storage container and, for printed material, 
each page of the printed material containing technical data or computer 
software for which restrictions are asserted. When only portions of a 
page of printed material are subject to the asserted restrictions, such 
portions shall be identified by circling, underscoring, with a note, or 
other appropriate identifier. Technical data or computer software 
transmitted directly from one computer or computer terminal to another 
shall contain a notice of asserted restrictions. However, instructions 
that interfere with or delay the operation of computer software in order 
to display a restrictive rights legend or other license statement at any 
time prior to or during use of the computer software, or otherwise cause 
such interference or delay, shall not be inserted in software that will 
or might be used in combat or situations that simulate combat 
conditions, unless the Contracting Officer's written permission to 
deliver such software has been obtained prior to delivery. Reproductions 
of technical data, computer software, or any portions thereof subject to 
asserted restrictions shall also reproduce the asserted restrictions.

[[Page 400]]

    (2) Limited rights markings. Technical data not generated under this 
contract that pertain to items, components, or processes developed 
exclusively at private expense and delivered or otherwise furnished with 
limited rights shall be marked with the following legend:

                             Limited Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________

________________________________________________________________________

The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose these technical data are restricted by paragraph 
(b)(2) of the Rights in Noncommercial Technical Data and Computer 
Software--Small Business Innovative Research (SBIR) Program clause 
contained in the above identified contract. Any reproduction of 
technical data or portions thereof marked with this legend must also 
reproduce the markings. Any person, other than the Government, who has 
been provided access to such data must promptly notify the above named 
Contractor.

                             (End of legend)

    (3) Restricted rights markings. Computer software delivered or 
otherwise furnished to the Government with restricted rights shall be 
marked with the following legend:

                            Restricted Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Contractor Address______________________________________________________

________________________________________________________________________

The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose this software are restricted by paragraph (b)(3) of 
the Rights in Noncommercial Technical Data and Computer Software--Small 
Business Innovative Research (SBIR) Program clause contained in the 
above identified contract. Any reproduction of computer software or 
portions thereof marked with this legend must also reproduce the 
markings. Any person, other than the Government, who has been provided 
access to such data must promptly notify the above named Contractor.

                             (End of legend)

    (4) SBIR data rights markings: Except for technical data or computer 
software in which the Government has acquired unlimited rights under 
paragraph (b)(1) of this clause, or negotiated special license rights as 
provided in paragraph (b)(5) of this clause, technical data or computer 
software generated under this contract shall be marked with the 
following legend. The Contractor shall enter the expiration date for the 
SBIR data rights period on the legend:

                            SBIR Data Rights

Contract No.____________________________________________________________

Contractor Name_________________________________________________________

Address_________________________________________________________________

________________________________________________________________________

Expiration of SBIR Data Rights Period___________________________________

The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose technical data or computer software marked with 
this legend are restricted during the period shown as provided in 
paragraph (b)(4) of the Rights in Noncommercial Technical Data and 
Computer Software--Small Business Innovative Research (SBIR) Program 
clause contained in the above identified contract. No restrictions apply 
after the expiration date shown above. Any reproduction of technical 
data, computer software, or portions thereof marked with this legend 
must also reproduce the markings.

                             (End of legend)

    (5) Special license rights markings. (i) Technical data or computer 
software in which the Government's rights stem from a specifically 
negotiated license shall be marked with the following legend:

                         Special License Rights

    The Government's rights to use, modify, reproduce, release, perform, 
display, or disclose this technical data or computer software are 
restricted by Contract No. ---------------- (Insert contract number) --
--------------, License No. ---------------- (Insert license identifier) 
----------------. Any reproduction of technical data, computer software, 
or portions thereof marked with this legend must also reproduce the 
markings.

                             (End of legend)

    (ii) For purposes of this clause, special licenses do not include 
government purpose license rights acquired under a prior contract (see 
paragraph (b)(6) of this clause).
    (6) Pre-existing data markings. If the terms of a prior contract or 
license permitted the Contractor to restrict the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose technical 
data or computer software, and those restrictions are still applicable, 
the Contractor may mark such data or software with the appropriate 
restrictive legend for which the data or software qualified under the 
prior contract or license. The marking procedures in paragraph (f)(1) of 
this clause shall be followed.

[[Page 401]]

    (g) Contractor procedures and records. Throughout performance of 
this contract, the Contractor, and its subcontractors or suppliers that 
will deliver technical data or computer software with other than 
unlimited rights, shall--
    (1) Have, maintain, and follow written procedures sufficient to 
assure that restrictive markings are used only when authorized by the 
terms of this clause; and
    (2) Maintain records sufficient to justify the validity of any 
restrictive markings on technical data or computer software delivered 
under this contract.
    (h) Removal of unjustified and nonconforming markings--(1) 
Unjustified markings. The rights and obligations of the parties 
regarding the validation of restrictive markings on technical data or 
computer software furnished or to be furnished under this contract are 
contained in the Validation of Restrictive Markings on Technical Data 
and the Validation of Asserted Restrictions--Computer Software clauses 
of this contract, respectively. Notwithstanding any provision of this 
contract concerning inspection and acceptance, the Government may ignore 
or, at the Contractor's expense, correct or strike a marking if, in 
accordance with the applicable procedures of those clauses, a 
restrictive marking is determined to be unjustified.
    (2) Nonconforming markings. A nonconforming marking is a marking 
placed on technical data or computer software delivered or otherwise 
furnished to the Government under this contract that is not in the 
format authorized by this contract. Correction of nonconforming markings 
is not subject to the Validation of Restrictive Markings on Technical 
Data or the Validation of Asserted Restrictions--Computer Software 
clause of this contract. If the Contracting Officer notifies the 
Contractor of a nonconforming marking or markings and the Contractor 
fails to remove or correct such markings within sixty (6)) days, the 
Government may ignore or, at the Contractor's expense, remove or correct 
any nonconforming markings.
    (i) Relation to patents. Nothing contained in this clause shall 
imply a license to the Government under any patent or be construed as 
affecting the scope of any license or other right otherwise granted to 
the Government under any patent.
    (j) Limitation on charges for rights in technical data or computer 
software. (1) The Contractor shall not charge to this contract any cost, 
including but not limited to, license fees, royalties, or similar 
charges, for rights in technical data or computer software to be 
delivered under this contract when--
    (i) The Government has acquired, by any means, the same or greater 
rights in the data or software; or
    (ii) The data are available to the public without restrictions.
    (2) The limitation in paragraph (j)(1) of this clause--
    (i) Includes costs charged by a subcontractor or supplier, at any 
tier, or costs incurred by the Contractor to acquire rights in 
subcontractor of supplier technical data or computer software, if the 
subcontractor or supplier has been paid for such rights under any other 
Government contract or under a license conveying the rights to the 
Government; and
    (ii) Does not include the reasonable costs of reproducing, handling, 
or mailing the documents or other media in which the technical data or 
computer software will be delivered.
    (k) Applicability to subcontractors or suppliers. (1) the Contractor 
shall assure that the rights afforded its subcontractors and suppliers 
under 10 U.S.C. 2320, 10 U.S.C. 2321, and the identification, assertion, 
and delivery processes required by paragraph (e) of this clause are 
recognized and protected.
    (2) Whenever any noncommercial technical data or computer software 
is to be obtained from a subcontractor or supplier for delivery to the 
Government under this contract, the Contractor shall use this same 
clause in the subcontract or other contractual instrument, and require 
its subcontractors or suppliers to do so, without alteration, except to 
identify the parties. The Contractor shall use the Technical Data--
Commercial Items clause of this contract to obtain technical data 
pertaining to commercial items, components, or processes. No other 
clause shall be used to enlarge or diminish the Government's, the 
Contractor's, or a higher tier subcontractor's or supplier's rights in a 
subcontractor's or supplier's technical data or computer software.
    (3) Technical data required to be delivered by a subcontractor or 
supplier shall normally be delivered to the next higher tier contractor, 
subcontractor, or supplier. However, when there is a requirement in the 
prime contract for technical data which may be submitted with other than 
unlimited rights by a subcontractor or supplier, then said subcontractor 
or supplier may fulfill its requirement by submitting such technical 
data directly to the Government, rather than through a higher tier 
contractor, subcontractor, or supplier.
    (4) The Contractor and higher tier subcontractors or suppliers shall 
not use their power to award contracts as economic leverage to obtain 
rights in technical data or computer software from their subcontractors 
or suppliers.
    (5) In no event shall the Contractor use its obligation to recognize 
and protect subcontractor or supplier rights in technical data or 
computer software as an excuse for failing to satisfy its contractual 
obligation to the Government.

[[Page 402]]

                             (End of clause)

    Alternate I (JUN 1995). As prescribed in 227.7104(d), add the 
following paragraph (l) to the basic clause:

    (l) Publication for sale. (1) This paragraph applies only to 
technical data or computer software delivered to the Government with 
SBIR data rights.
    (2) Upon expiration of the SBIR data rights period, the Government 
will not exercise its right to publish or authorize others to publish an 
item of technical data or computer software identified in this contract 
as being subject to paragraph (l) of this clause if the Contractor, 
prior to the expiration of the SBIR data rights period, or within two 
years following delivery of the data or software item, or within twenty-
four months following the removal of any national security or export 
control restrictions, whichever is later, publishes such data or 
software item(s) and promptly notifies the Contracting Officer of such 
publication(s). Any such publication(s) shall include a notice 
identifying the number of this contract and the Government's rights in 
the published data.
    (3) This limitation on the Government's right to publish for sale 
shall continue as long as the technical data or computer software are 
reasonably available to the public for purchase.

[60 FR 33499, June 28, 1995, as amended at 60 FR 61602, Nov. 30, 1995]



Sec. 252.227-7019  Validation of asserted restrictions--Computer 
          software.

    As prescribed in 227.7104(e)(3) or 227.7203-6(c), use the following 
clause:

    Validation of Asserted Restrictions--Computer Software (JUN 1995)

    (a) Definitions. (1) As used in this clause, unless otherwise 
specifically indicated, the term ``Contractor'' means the Contractor and 
its subcontractors or suppliers.
    (2) Other terms used in this clause are defined in the Rights in 
Noncommercial Computer Software and Noncommercial Computer Software 
Documentation clause of this contract.
    (b) Justification. The Contractor shall maintain records sufficient 
to justify the validity of any markings that assert restrictions on the 
Government's rights to use, modify, reproduce, perform, display, 
release, or disclose computer software delivered or required to be 
delivered under this contract and shall be prepared to furnish to the 
Contracting Officer a written justification for such restrictive 
markings in response to a request for information under paragraph (d) or 
a challenge under paragraph (f) of this clause.
    (c) Direct contact with subcontractors or suppliers. The Contractor 
agrees that the Contracting Officer may transact matters under this 
clause directly with subcontractors or suppliers at any tier who assert 
restrictions on the Government's right to use, modify, reproduce, 
release, perform, display, or disclose computer software. Neither this 
clause, nor any action taken by the Government under this clause, 
creates or implies privity of contract between the Government and the 
Contractor's subcontractors or suppliers.
    (d) Requests for information. (1) The Contracting Officer may 
request the Contractor to provide sufficient information to enable the 
Contracting Officer to evaluate the Contractor's asserted restrictions. 
Such information shall be based upon the records required by this clause 
or other information reasonably available to the Contractor.
    (2) Based upon the information provided, if the--
    (i) Contractor agrees that an asserted restriction is not valid, the 
Contracting Officer may--
    (A) Strike or correct the unjustified marking at the Contractor's 
expense; or
    (B) Return the computer software to the Contractor for correction at 
the Contractor's expense. If the Contractor fails to correct or strike 
the unjustified restrictions and return the corrected software to the 
Contracting Officer within sixty (60) days following receipt of the 
software, the Contracting Officer may correct the strike the markings at 
the Contractor's expense.
    (ii) Contracting Officer concludes that the asserted restriction is 
appropriate for this contract, the Contracting Officer shall so notify 
the Contractor in writing.
    (3) The Contractor's failure to provide a timely response to a 
Contracting Officer's request for information or failure to provide 
sufficient information to enable the Contracting Officer to evaluate an 
asserted restriction shall constitute reasonable grounds for questioning 
the validity of an asserted restriction.
    (e) Government right to challenge and validate asserted 
restrictions. (1) The Government, when there are reasonable grounds to 
do so, has the right to review and challenge the validity of any 
restrictions asserted by the Contractor on the Government's rights to 
use, modify, reproduce, release, perform, display, or disclose computer 
software delivered, to be delivered under this contract, or otherwise 
provided to the Government in the performance of this contract. Except 
for software that is publicly available, has been furnished to the 
Government without restrictions, or has been otherwise made available 
without restrictions, the Government may exercise this right only within 
three

[[Page 403]]

years after the date(s) the software is delivered or otherwise furnished 
to the Government, or three years following final payment under this 
contract, whichever is later.
    (2) The absence of a challenge to an asserted restriction shall not 
constitute validation under this clause. Only a Contracting Officer's 
final decision or actions of an agency Board of Contract Appeals or a 
court of competent jurisdiction that sustain the validity of an asserted 
restriction constitute validation of the restriction.
    (f) Challenge procedures. (1) A challenge must be in writing and 
shall--
    (i) State the specific grounds for challenging the asserted 
restriction;
    (ii) Require the Contractor to respond within sixty (60) days;
    (iii) Require the Contractor to provide justification for the 
assertion based upon records kept in accordance with paragraph (b) of 
this clause and such other documentation that are reasonably available 
to the Contractor, in sufficient detail to enable the Contracting 
Officer to determine the validity of the asserted restrictions; and
    (iv) State that a Contracting Officer's final decision, during the 
three-year period preceding this challenge, or action of a court of 
competent jurisdiction or Board of Contract Appeals that sustained the 
validity of an identical assertion made by the Contractor (or a 
licensee) shall serve as justification for the asserted restriction.
    (2) The Contracting Officer shall extend the time for response if 
the Contractor submits a written request showing the need for additional 
time to prepare a response.
    (3) The Contracting Officer may request additional supporting 
documentation if, in the Contracting Officer's opinion, the Contractor's 
explanation does not provide sufficient evidence to justify the validity 
of the asserted restrictions. The Contractor agrees to promptly respond 
to the Contracting Officer's request for additional supporting 
documentation.
    (4) Notwithstanding challenge by the Contracting Officer, the 
parties may agree on the disposition of an asserted restriction at any 
time prior to a Contracting Officer's final decision or, if the 
Contractor has appealed that decision, filed suit, or provided notice of 
an intent to file suit, at any time prior to a decision by a court of 
competent jurisdiction or Board of Contract Appeals.
    (5) If the Contractor fails to respond to the Contracting Officer's 
request for information or additional information under paragraph (f)(1) 
of this clause, the Contracting Officer shall issue a final decision, in 
accordance with the Disputes clause of this contract, pertaining to the 
validity of the asserted restriction.
    (6) If the Contracting Officer, after reviewing the written 
explanation furnished pursuant to paragraph (f)(1) of this clause, or 
any other available information pertaining to the validity of an 
asserted restriction, determines that the asserted restriction has--
    (i) Not been justified, the Contracting Officer shall issue promptly 
a final decision, in accordance with the Disputes clause of this 
contract, denying the validity of the asserted restriction; or
    (ii) Been justified, the Contracting Officer shall issue promptly a 
final decision, in accordance with the Disputes clause of this contract, 
validating the asserted restriction.
    (7) A Contractor receiving challenges to the same asserted 
restriction(s) from more than one Contracting Officer shall notify each 
Contracting Officer of the other challenges. The notice shall also state 
which Contracting Officer initiated the first in time unanswered 
challenge. The Contracting Officer who initiated the first in time 
unanswered challenge, after consultation with the other Contracting 
Officers who have challenged the restrictions and the Contractor, shall 
formulate and distribute a schedule that provides the contractor a 
reasonable opportunity for responding to each challenge.
    (g) Contractor appeal--Government obligation. (1) The Government 
agrees that, notwithstanding a Contracting Officer's final decision 
denying the validity of an asserted restriction and except as provided 
in paragraph (g)(3) of this clause, it will honor the asserted 
restriction--
    (i) For a period of ninety (90) days from the date of the 
Contracting Officer's final decision to allow the Contractor to appeal 
to the appropriate Board of Contract Appeals or to file suit in an 
appropriate court;
    (ii) For a period of one year from the date of the Contracting 
Officer's final decision if, within the first ninety (90) days following 
the Contracting Officer's final decision, the Contractor has provided 
notice of an intent to file suit in an appropriate court; or
    (iii) Until final disposition by the appropriate Board of Contract 
Appeals or court of competent jurisdiction, if the Contractor has: (A) 
appealed to the Board of Contract Appeals or filed suit an appropriate 
court within ninety (90) days; or (B) submitted, within ninety (90) 
days, a notice of intent to file suit in an appropriate court and filed 
suit within one year.
    (2) The Contractor agrees that the Government may strike, correct, 
or ignore the restrictive markings if the Contractor fails to--
    (i) Appeal to a Board of Contract Appeals within ninety (90) days 
from the date of the Contracting Officer's final decision;
    (ii) File suit in an appropriate court within ninety (90) days from 
such date; or
    (iii) File suit within one year after the date of the Contracting 
Officer's final decision if the Contractor had provided notice of

[[Page 404]]

intent to file suit within ninety (90) days following the date of the 
Contracting Officer's final decision.
    (3) The agency head, on a nondelegable basis, may determine that 
urgent or compelling circumstances do not permit awaiting the filing of 
suit in an appropriate court, or the rendering of a decision by a court 
of competent jurisdiction or Board of Contract Appeals. In that event, 
the agency head shall notify the Contractor of the urgent or compelling 
circumstances. Notwithstanding paragraph (g)(1) of this clause, the 
Contractor agrees that the agency may use, modify, reproduce, release, 
perform, display, or disclose computer software marked with (i) 
government purpose legends for any purpose, and authorize others to do 
so; or (ii) restricted or special license rights for government purposes 
only. The Government agrees not to release or disclose such software 
unless, prior to release or disclosure, the intended recipient is 
subject to the use and non-disclosure agreement at 227.7103-7 of the 
Defense Federal Acquisition Regulation Supplement (DFARS), or is a 
Government contractor receiving access to the software for performance 
of a Government contract that contains the clause at DFARS 252.227-7025, 
Limitations on the Use or Disclosure of Government-Furnished Information 
Marked with Restrictive Legends. The agency head's determination may be 
made at any time after the date of the Contracting Officer's final 
decision and shall not affect the Contractor's right to damages against 
the United States, or other relief provided by law, if its asserted 
restrictions are ultimately upheld.
    (h) Final disposition of appeal or suit. If the Contractor appeals 
or files suit and if, upon final disposition of the appeal or suit, the 
Contracting Officer's decision is:
    (1) Sustained--
    (i) Any restrictive marking on such computer software shall be 
struck or corrected at the contractor's expense or ignored; and
    (ii) If the asserted restriction is found not to be substantially 
justified, the Contractor shall be liable to the Government for payment 
of the cost to the Government of reviewing the asserted restriction and 
the fees and other expenses (as defined in 28 U.S.C. 2412(d)(2)(A)) 
incurred by the Government in challenging the restriction, unless 
special circumstances would make such payment unjust.
    (2) Not sustained--
    (i) The Government shall be bound by the asserted restriction; and
    (ii) If the challenge by the Government is found not to have been 
made in good faith, the Government shall be liable to the Contractor for 
payment of fees and other expenses (as defined in 28 U.S.C. 
2412(d)(2)(A)) incurred by the Contractor in defending the restriction.
    (i) Flowdown. The Contractor shall insert this clause in all 
contracts, purchase orders, and other similar instruments with its 
subcontractors or suppliers, at any tier, who will be furnishing 
computer software to the Government in the performance of this contract. 
The clause may not be altered other than to identify the appropriate 
parties.

                             (End of clause)

[60 FR 33503, June 28, 1995]



Sec. 252.227-7020  Rights in special works.

    As prescribed in 227.7105-3, 227.7106(a) or 227.7205(a), use the 
following clause:

                   Rights in Special Works (JUN 1995)

    (a) Applicability. This clause applies to works first created, 
generated, or produced and required to be delivered under this contract.
    (b) Definitions. As used in this clause:
    (1) ``Computer data base'' means a collection of data recorded in a 
form capable of being processed by a computer. The term does not include 
computer software.
    (2) ``Computer program'' means a set of instructions, rules, or 
routines recorded in a form that is capable of causing a computer to 
perform a specific operation or series of operations.
    (3) ``Computer software'' means computer programs, source code, 
source code listings, object code listings, design details, algorithms, 
processes, flow charts, formulae and related material that would enable 
the software to be reproduced, recreated, or recompiled. Computer 
software does not include computer data bases or computer software 
documentation.
    (4) ``Computer software documentation'' means owner's manuals, 
user's manuals, installation instructions, operating instructions, and 
other similar items, regardless of storage medium, that explain the 
capabilities of the computer software or provide instructions for using 
the software.
    (5) ``Unlimited rights'' means the rights to use, modify, reproduce, 
perform, display, release, or disclose a work in whole or in part, in 
any manner, and for any purpose whatsoever, and to have or authorize 
others to do so.
    (6) The term ``works'' includes computer data bases, computer 
software, or computer software documentation; literary, musical, 
choreographic, or dramatic compositions; pantomimes; pictorial, graphic, 
or sculptural compositions; motion pictures and other audiovisual 
compositions; sound recordings in any medium; or, items of similar 
nature.
    (c) License rights. (1) The Government shall have unlimited rights 
in works first produced, created, or generated and required to be 
delivered under this contract.

[[Page 405]]

    (2) When a work is first produced, created, or generated under this 
contract, and such work is required to be delivered under this contract, 
the Contractor shall assign copyright in those works to the Government. 
The Contractor, unless directed to the contrary by the Contracting 
Officer, shall place the following notice on such works: 
``(copyright) (Year date of delivery) United States 
Government, as represented by the Secretary of (department). All rights 
reserved.''
    For phonorecords, the ``(copyright)'' markings shall be 
replaced by a ``P''.
    (3) The Contractor grants to the Government a royalty-free, world-
wide, nonexclusive, irrevocable license to reproduce, prepare derivative 
works from, distribute, perform, or display, and to have or authorize 
others to do so, the Contractor's copyrighted works not first produced, 
created, or generated under this contract that have been incorporated 
into the works deliverable under this contract.
    (d) Third party copyrighted data. The Contractor shall not 
incorporate, without the written approval of the Contracting Officer, 
any copyrighted works in the works to be delivered under this contract 
unless the Contractor is the copyright owner or has obtained for the 
Government the license rights necessary to perfect a license of the 
scope identified in paragraph (c)(3) of this clause and, prior to 
delivery of such works--
    (1) Has affixed to the transmittal document a statement of the 
license rights obtained; or
    (2) For computer software, has provided a statement of the license 
rights obtained in a form acceptable to the Contracting Officer.
    (e) Indemnification. The Contractor shall indemnify and save and 
hold harmless the Government, and its officers, agents and employees 
acting for the Government, against any liability, including costs and 
expenses, (1) for violation of proprietary rights, copyrights, or rights 
of privacy or publicity, arising out of the creation, delivery, use, 
modification, reproduction, release, performance, display, or disclosure 
of any works furnished under this contract, or (2) based upon any 
libelous or other unlawful matter contained in such works.
    (f) Government-furnished information. Paragraphs (d) and (e) of this 
clause are not applicable to information furnished to the Contractor by 
the Government and incorporated in the works delivered under this 
contract.

                             (End of clause)

[60 FR 33504, June 28, 1995]



Sec. 252.227-7021  Rights in data--existing works.

    As prescribed at 227.7105-2(a), use the following clause:

                Rights in Data--Existing Works (MAR 1979)

    (a) The term works as used herein includes literary, musical, and 
dramatic works; pantomimes and choreographic works; pictorial, graphic 
and sculptural works; motion pictures and other audiovisual works; sound 
recordings; and works of a similar nature. The term does not include 
financial reports, cost analyses, and other information incidental to 
contract administration.
    (b) Except as otherwise provided in this contract, the Contractor 
hereby grants to the Government a nonexclusive, paid-up license 
throughout the world (1) to distribute, perform publicly, and display 
publicly the works called for under this contract and (2) to authorize 
others to do so for Government purposes.
    (c) The Contractor shall indemnify and save and hold harmless the 
Government, and its officers, agents, and employees acting for the 
Government, against any liability, including costs and expenses, (1) for 
violation of proprietary rights, copyrights, or rights of privacy or 
publicity arising out of the creation, delivery, or use, of any works 
furnished under this contract, or (2) based upon any libelous or other 
unlawful matter contained in same works.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33504, June 28, 1994]



Sec. 252.227-7022  Government rights (unlimited).

    As prescribed at 227.7107-1(a), use the following clause:

                Government Rights (Unlimited) (MAR 1979)

    The Government shall have unlimited rights, in all drawings, 
designs, specifications, notes and other works developed in the 
performance of this contract, including the right to use same on any 
other Government design or construction without additional compensation 
to the Contractor. The Contractor hereby grants to the Government a 
paid-up license throughout the world to all such works to which he may 
assert or establish any claim under design patent or copyright laws. The 
Contractor for a period of three (3) years after completion of the 
project agrees to furnish the original or copies of all such works on 
the request of the Contracting Officer.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33504, June 28, 1994]

[[Page 406]]



Sec. 252.227-7023  Drawings and other data to become property of 
          Government.

    As prescribed at 227.7107-1(b), use the following clause:

   Drawings and Other Data to Become Property of Government (MAR 1979)

    All designs, drawings, specifications, notes and other works 
developed in the performance of this contract shall become the sole 
property of the Government and may be used on any other design or 
construction without additional compensation to the Contractor. The 
Government shall be considered the ``person for whom the work was 
prepared'' for the purpose of authorship in any copyrightable work under 
17 U.S.C. 201(b). With respect thereto, the Contractor agrees not to 
assert or authorize others to assert any rights nor establish any claim 
under the design patent or copyright laws. The Contractor for a period 
of three (3) years after completion of the project agrees to furnish all 
retained works on the request of the Contracting Officer. Unless 
otherwise provided in this contract, the Contractor shall have the right 
to retain copies of all works beyond such period.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]



Sec. 252.227-7024  Notice and approval of restricted designs.

    As prescribed at 227.7107-3, use the following clause:

          Notice and Approval of Restricted Designs (APR 1984)

    In the performance of this contract, the Contractor shall, to the 
extent practicable, make maximum use of structures, machines, products, 
materials, construction methods, and equipment that are readily 
available through Government or competitive commercial channels, or 
through standard or proven production techniques, methods, and 
processes. Unless approved by the Contracting Officer, the Contractor 
shall not produce a design or specification that requires in this 
construction work the use of structures, products, materials, 
construction equipment, or processes that are known by the Contractor to 
be available only from a sole source. The Contractor shall promptly 
report any such design or specification to the Contracting Officer and 
give the reason why it is considered necessary to so restrict the design 
or specification.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]



Sec. 252.227-7025  Limitations on the use or disclosure of government-
          furnished information marked with restrictive legends.

    As prescribed in 227.7103-6(c), 227.7104(f)(1), or 227.7203-6(d), 
use the following clause:

Limitations on the Use or Disclosure of Government-Furnished Information 
               Marked With Restrictive Legends (JUN 1995)

    (a)(1) For contracts requiring the delivery of technical data, the 
terms ``limited rights'' and ``Government purpose rights'' are defined 
in the Rights in Technical Data--Noncommercial Items clause of this 
contract.
    (2) For contracts that do not require the delivery of technical 
data, the terms ``government purpose rights'' and ``restricted rights'' 
are defined in the Rights in Noncommercial Computer Software and 
Noncommercial Computer Software Documentation clause of this contract.
    (3) For Small Business Innovative Research program contracts, the 
terms ``limited rights'' and ``restricted rights'' are defined in the 
Rights in Noncommercial Technical Data and Computer Software--Small 
Business Innovative Research (SBIR) Program clause of this contract.
    (b) Technical data or computer software provided to the Contractor 
as Government furnished information (GFI) under this contract may be 
subject to restrictions on use, modification, reproduction, release, 
performance, display, or further disclosure.
    (1) GFI marked with limited or restricted rights legends. The 
Contractor shall use, modify, reproduce, perform, or display technical 
data received from the Government with limited rights legends or 
computer software received with restricted rights legends only in the 
performance of this contract. The Contractor shall not, without the 
express written permission of the party whose name appears in the 
legend, release or disclose such data or software to any person.
    (2) GFI marked with government purpose rights legends. The 
Contractor shall use technical data or computer software received from 
the Government with government purpose rights legends for government 
purposes only. The Contractor shall not, without the express written 
permission of the party whose name appears in the restrictive legend, 
use, modify, reproduce, release, perform, or display such data or 
software for any commercial purpose or disclose such data or software to 
a person other than its

[[Page 407]]

subcontractors, suppliers, or prospective subcontractors or suppliers, 
who require the data or software to submit offers for, or perform, 
contracts under this contract. Prior to disclosing the data or software, 
the Contractor shall require the persons to whom disclosure will be made 
to complete and sign the non-disclosure agreement at 227.7103-7 of the 
Defense Federal Acquisition Regulation Supplement (DFARS).
    (3) GFI marked with specially negotiated license rights legends. The 
Contractor shall use, modify, reproduce, release, perform, or display 
technical data or computer software received from the Government with 
specially negotiated license legends only as permitted in the license. 
Such data or software may not be released or disclosed to other persons 
unless permitted by the license and, prior to release or disclosure, the 
intended recipient has completed the non-disclosure agreement at DFARS 
227.7103-7. The Contractor shall modify paragraph (1)(c) of the non-
disclosure agreement to reflect the recipient's obligations regarding 
use, modification, reproduction, release, performance, display, and 
disclosure of the data or software.
    (c) Indemnification and creation of third party beneficiary rights. 
The Contractor agrees--
    (1) To indemnify and hold harmless the Government, its agents, and 
employees from every claim or liability, including attorneys fees, court 
costs, and expenses, arising out of, or in any way related to, the 
misuse or unauthorized modification, reproduction, release, performance, 
display, or disclosure of technical data or computer software received 
from the Government with restrictive legends by the Contractor or any 
person to whom the Contractor has released or disclosed such data or 
software; and
    (2) That the party whose name appears on the restrictive legend, in 
addition to any other rights it may have, is a third party beneficiary 
who has the right of direct action against the Contractor, or any person 
to whom the Contractor has released or disclosed such data or software, 
for the unauthorized duplication, release, or disclosure of technical 
data or computer software subject to restrictive legends.

                             (End of clause)

[60 FR 33505, June 28, 1995]



Sec. 252.227-7026  Deferred delivery of technical data or computer 
          software.

    As prescribed at 227.7103-8(a), use the following clause:

   Deferred Delivery of Technical Data or Computer Software (APR 1988)

    The Government shall have the right to require, at any time during 
the performance of this contract, within two (2) years after either 
acceptance of all items (other than data or computer software) to be 
delivered under this contract or termination of this contract, whichever 
is later, delivery of any technical data or computer software item 
identified in this contract as ``deferred delivery'' data or computer 
software. The obligation to furnish such technical data required to be 
prepared by a subcontractor and pertaining to an item obtained from him 
shall expire two (2) years after the date Contractor accepts the last 
delivery of that item from that subcontractor for use in performing this 
contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]



Sec. 252.227-7027  Deferred ordering of technical data or computer 
          software.

    As prescribed at 227.7103-8(b), use the following clause:

   Deferred Ordering of Technical Data or Computer Software (APR 1988)

    In addition to technical data or computer software specified 
elsewhere in this contract to be delivered hereunder, the Government 
may, at any time during the performance of this contract or within a 
period of three (3) years after acceptance of all items (other than 
technical data or computer software) to be delivered under this contract 
or the termination of this contract, order any technical data or 
computer software generated in the performance of this contract or any 
subcontract hereunder. When the technical data or computer software is 
ordered, the Contractor shall be compensated for converting the data or 
computer software into the prescribed form, for reproduction and 
delivery. The obligation to deliver the technical data of a 
subcontractor and pertaining to an item obtained from him shall expire 
three (3) years after the date the Contractor accepts the last delivery 
of that item from that subcontractor under this contract. The 
Government's rights to use said data or computer software shall be 
pursuant to the ``Rights in Technical Data and Computer Software'' 
clause of this contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]

[[Page 408]]



Sec. 252.227-7028  Technical data or computer software previously 
          delivered to the government.

    As prescribed in 227.7103-6(d), 227.7104(f)(2), or 227.7203-6(e), 
use the following provision:

    Technical Data or Computer Software Previously Delivered to the 
                          Government (JUN 1995)

    The Offeror shall attach to its offer an identification of all 
documents or other media incorporating technical data or computer 
software it intends to deliver under this contract with other than 
unlimited rights that are identical or substantially similar to 
documents or other media that the Offeror has produced for, delivered 
to, or is obligated to deliver to the Government under any contract or 
subcontract. The attachment shall identify--
    (a) The contract number under which the data or software were 
produced;
    (b) The contract number under which, and the name and address of the 
organization to whom, the data or software were most recently delivered 
or will be delivered; and
    (c) Any limitations on the Government's rights to use or disclose 
the data or software, including, when applicable, identification of the 
earliest date the limitations expire.

                           (End of provision)

[60 FR 33505, June 28, 1995]



Sec. 252.227-7029  [Reserved]



Sec. 252.227-7030  Technical data--withholding of payment.

    As prescribed at 227.7103-6(e)(2) or 227.7104(e)(4), use the 
following clause:

            Technical Data--Withholding of Payment (MAR 2000)

    (a) If technical data specified to be delivered under this contract, 
is not delivered within the time specified by this contract or is 
deficient upon delivery (including having restrictive markings not 
identified in the list described in the clause at 252.227-7013(e)(2) or 
252.227-7018(e)(2) of this contract), the Contracting Officer may until 
such data is accepted by the Government, withhold payment to the 
Contractor of ten percent (10%) of the total contract price or amount 
unless a lesser withholding is specified in the contract. Payments shall 
not be withheld nor any other action taken pursuant to this paragraph 
when the Contractor's failure to make timely delivery or to deliver such 
data without deficiencies arises out of causes beyond the control and 
without the fault or negligence of the Contractor.
    (b) The withholding of any amount or subsequent payment to the 
Contractor shall not be construed as a waiver of any rights accruing to 
the Government under this contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995; 
62 FR 34132, June 24, 1997; 65 FR 14398, Mar. 16, 2000]



Sec. 252.227-7031  [Reserved]



Sec. 252.227-7032  Rights in technical data and computer software 
          (foreign).

    As prescribed in 227.7103-17, use the following clause:

   Rights in Technical Data and Computer Software (Foreign) (JUN 1975)

    The United States Government may duplicate, use, and disclose in any 
manner for any purposes whatsoever, including delivery to other 
governments for the furtherance of mutual defense of the United States 
Government and other governments, all technical data including reports, 
drawings and blueprints, and all computer software, specified to be 
delivered by the Contractor to the United States Government under this 
contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]



Sec. 252.227-7033  Rights in shop drawings.

    As prescribed in 227.7107-(1)(c), use the following clause:

                   Rights in Shop Drawings (APR 1966)

    (a) Shop drawings for construction means drawings, submitted to the 
Government by the Construction Contractor, subcontractor or any lower-
tier subcontractor pursuant to a construction contract, showing in 
detail (i) the proposed fabrication and assembly of structural elements 
and (ii) the installation (i.e., form, fit, and attachment details) of 
materials or equipment. The Government may duplicate, use, and disclose 
in any manner and for any purpose shop drawings delivered under this 
contract.
    (b) This clause, including this paragraph (b), shall be included in 
all subcontracts hereunder at any tier.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 33505, June 28, 1995]

[[Page 409]]



Sec. 252.227-7034  Patents--subcontracts.

    As prescribed at 227.304-4, insert the following clause:

                    Patents--Subcontracts (APR 1984)

    The Contractor will include the clause at FAR 52.227-12, Patent 
Rights--Retention by the Contractor (Long Form), suitably modified to 
identify the parties, in all subcontracts, regardless of tier, for 
experimental, developmental, or research work to be performed by other 
than a small business firm or nonprofit organization.

                             (End of clause)



Sec. 252.227-7035--252.227-7036  [Reserved]



Sec. 252.227-7037  Validation of restrictive markings on technical data.

    As prescribed in 227.7102-3(c), 227.7103-6(e)(3), 227.7104(e)(5), or 
227.7203-6(f), use the following clause:

     Validation of Restrictive Markings on Technical Data (SEP 1999)

    (a) Definitions. The terms used in this clause are defined in the 
Rights in Technical Data--Noncommercial Items clause of this contract.
    (b) Contracts for commercial items--presumption of development at 
private expense. Under a contract for a commercial item, component, or 
process, the Department of Defense shall presume that a Contractor's 
asserted use or release restrictions are justified on the basis that the 
item, component, or process was developed exclusively at private 
expense. The Department shall not challenge such assertions unless 
information the Department provides demonstrates that the item, 
component, or process was not developed exclusively at private expense.
    (c) Justification. The Contractor or subcontractor at any tier is 
responsible for maintaining records sufficient to justify the validity 
of its markings that impose restrictions on the Government and others to 
use, duplicate, or disclose technical data delivered or required to be 
delivered under the contract or subcontract. Except under contracts for 
commercial items, the Contractor or subcontractor shall be prepared to 
furnish to the Contracting Officer a written justification for such 
restrictive markings in response to a challenge under paragraph (e) of 
this clause.
    (d) Prechallenge request for information. (1) The Contracting 
Officer may request the Contractor or subcontractor to furnish a written 
explanation for any restriction asserted by the Contractor or 
subcontractor on the right of the United States or others to use 
technical data. If, upon review of the explanation submitted, the 
Contracting Officer remains unable to ascertain the basis of the 
restrictive marking, the Contracting Officer may further request the 
Contractor or subcontractor to furnish additional information in the 
records of, or otherwise in the possession of or reasonably available 
to, the Contractor or subcontractor to justify the validity of any 
restrictive marking on technical data delivered or to be delivered under 
the contract or subcontract (e.g., a statement of facts accompanied with 
supporting documentation). The Contractor or subcontractor shall submit 
such written data as requested by the Contracting Officer within the 
time required or such longer period as may be mutually agreed.
    (2) If the Contracting Officer, after reviewing the written data 
furnished pursuant to paragraph (d)(1) of this clause, or any other 
available information pertaining to the validity of a restrictive 
marking, determines that reasonable grounds exist to question the 
current validity of the marking and that continued adherence to the 
marking would make impracticable the subsequent competitive acquisition 
of the item, component, or process to which the technical data relates, 
the Contracting Officer shall follow the procedures in paragraph (e) of 
this clause.
    (3) If the Contractor or subcontractor fails to respond to the 
Contracting Officer's request for information under paragraph (d)(1) of 
this clause, and the Contracting Officer determines that continued 
adherence to the marking would make impracticable the subsequent 
competitive acquisition of the item, component, or process to which the 
technical data relates, the Contracting Officer may challenge the 
validity of the marking as described in paragraph (e) of this clause.
    (e) Challenge. (1) Notwithstanding any provision of this contract 
concerning inspection and acceptance, if the Contracting Officer 
determines that a challenge to the restrictive marking is warranted, the 
Contracting Officer shall send a written challenge notice to the 
Contractor or subcontractor asserting the restrictive markings. Such 
challenge shall--
    (i) State the specific grounds for challenging the asserted 
restriction;
    (ii) Require a response within sixty (60) days justifying and 
providing sufficient evidence as to the current validity of the asserted 
restriction;
    (iii) State that a DoD Contracting Officer's final decision, issued 
pursuant to paragraph (g) of this clause, sustaining the validity of a 
restrictive marking identical to the asserted restriction, within the 
three-year period preceding the challenge, shall serve as justification 
for the asserted restriction if the validated restriction was asserted 
by the same Contractor or subcontractor (or any licensee of such 
Contractor or subcontractor) to which such notice is being provided; and

[[Page 410]]

    (iv) State that failure to respond to the challenge notice may 
result in issuance of a final decision pursuant to paragraph (f) of this 
clause.
    (2) The Contracting Officer shall extend the time for response as 
appropriate if the Contractor or subcontractor submits a written request 
showing the need for additional time to prepare a response.
    (3) The Contractor's or subcontractor's written response shall be 
considered a claim within the meaning of the Contract Disputes Act of 
1978 (41 U.S.C. 601, et seq.), and shall be certified in the form 
prescribed at 33.207 of the Federal Acquisition Regulation, regardless 
of dollar amount.
    (4) A Contractor or subcontractor receiving challenges to the same 
restrictive markings from more than one Contracting Officer shall notify 
each Contracting Officer of the existence of more than one challenge. 
The notice shall also state which Contracting Officer initiated the 
first in time unanswered challenge. The Contracting Officer initiating 
the first in time unanswered challenge after consultation with the 
Contractor or subcontractor and the other Contracting Officers, shall 
formulate and distribute a schedule for responding to each of the 
challenge notices to all interested parties. The schedule shall afford 
the Contractor or subcontractor an opportunity to respond to each 
challenge notice. All parties will be bound by this schedule.
    (f) Final decision when Contractor or subcontractor fails to 
respond. Upon a failure of a Contractor or subcontractor to submit any 
response to the challenge notice, other than a failure to respond under 
a contract for commercial items, the Contracting Officer will issue a 
final decision to the Contractor or subcontractor in accordance with the 
Disputes clause of this contract pertaining to the validity of the 
asserted restriction. This final decision shall be issued as soon as 
possible after the expiration of the time period of paragraph (e)(1)(ii) 
or (e)(2) of this clause. Following issuance of the final decision, the 
Contracting Officer will comply with the procedures in paragraphs (g)(2) 
(ii) through (iv) of this clause.
    (g) Final decision when Contractor or subcontractor responds. (1) if 
the Contracting Officer determines that the Contractor or subcontractor 
has justified the validity of the restrictive marking, the Contracting 
Officer shall issue a final decision to the Contractor or subcontractor 
sustaining the validity of the restrictive marking, and stating that the 
Government will continue to be bound by the restrictive marking. This 
final decision shall be issued within sixty (60) days after receipt of 
the Contractor's or subcontractor's response to the challenge notice, or 
within such longer period that the Contracting Officer has notified the 
Contractor or subcontractor that the Government will require. The 
notification of a longer period for issuance of a final decision will be 
made within sixty (60) days after receipt of the response to the 
challenge notice.
    (2)(i) If the Contracting Officer determines that the validity of 
the restrictive marking is not justified, the Contracting Officer shall 
issue a final decision to the Contractor or subcontractor in accordance 
with the Disputes clause of this contract. Notwithstanding paragraph (e) 
of the Disputes clause, the final decision shall be issued within sixty 
(60) days after receipt of the Contractor's or subcontractor's response 
to the challenge notice, or within such longer period that the 
Contracting Officer has notified the Contractor or subcontractor of the 
longer period that the Government will require. The notification of a 
longer period for issuance of a final decision will be made within sixty 
(60) days after receipt of the response to the challenge notice.
    (ii) The Government agrees that it will continue to be bound by the 
restrictive marking of a period of ninety (90) days from the issuance of 
the Contracting Officer's final decision under paragraph (g)(2)(i) of 
this clause. The Contractor or subcontractor agrees that, if it intends 
to file suit in the United States Claims Court it will provide a notice 
of intent to file suit to the Contracting Officer within ninety (90) 
days from the issuance of the Contracting Officer's final decision under 
paragraph (g)(2)(i) of this clause. If the Contractor or subcontractor 
fails to appeal, file suit, or provide a notice of intent to file suit 
to the Contracting Officer within the ninety (90)-day period, the 
Government may cancel or ignore the restrictive markings, and the 
failure of the Contractor or subcontractor to take the required action 
constitutes agreement with such Government action.
    (iii) The Government agrees that it will continue to be bound by the 
restrictive marking where a notice of intent to file suit in the United 
States Claims Court is provided to the Contracting Officer within ninety 
(90) days from the issuance of the final decision under paragraph 
(g)(2)(i) of this clause. The Government will no longer be bound, and 
the Contractor or subcontractor agrees that the Government may strike or 
ignore the restrictive markings, if the Contractor or subcontractor 
fails to file its suit within one (1) year after issuance of the final 
decision. Notwithstanding the foregoing, where the head of an agency 
determines, on a nondelegable basis, that urgent or compelling 
circumstances will not permit waiting for the filing of a suit in the 
United States Claims Court, the Contractor or subcontractor agrees that 
the agency may, following notice to the Contractor or subcontractor, 
authorize release or disclosure of the technical data. Such agency 
determination may be made at any time after issuance of

[[Page 411]]

the final decision and will not affect the Contractor's or 
subcontractor's right to damages against the United States where its 
restrictive markings are ultimately upheld or to pursue other relief, if 
any, as may be provided by law.
    (iv) The Government agrees that it will be bound by the restrictive 
marking where an appeal or suit is filed pursuant to the Contract 
Disputes Act until final disposition by an agency Board of Contract 
Appeals or the United States Claims Court. Notwithstanding the 
foregoing, where the head of an agency determines, on a nondelegable 
basis, following notice to the Contractor that urgent or compelling 
circumstances will not permit awaiting the decision by such Board of 
Contract Appeals or the United States Claims Court, the Contractor or 
subcontractor agrees that the agency may authorize release or disclosure 
of the technical data. Such agency determination may be made at any time 
after issuance of the final decision and will not affect the 
Contractor's or subcontractor's right to damages against the United 
States where its restrictive markings are ultimately upheld or to pursue 
other relief, if any, as may be provided by law.
    (h) Final disposition of appeal or suit. (1) If the Contractor or 
subcontractor appeals or files suit and if, upon final disposition of 
the appeal or suit, the Contracting Officer's decision is sustained--
    (i) The restrictive marking on the technical data shall be 
cancelled, corrected or ignored; and
    (ii) If the restrictive marking is found not to be substantially 
justified, the Contractor or subcontractor, as appropriate, shall be 
liable to the Government for payment of the cost to the Government of 
reviewing the restrictive marking and the fees and other expenses (as 
defined in 28 U.S.C. 2412(d)(2)(A)) incurred by the Government in 
challenging the marking, unless special circumstances would make such 
payment unjust.
    (2) If the Contractor or subcontractor appeals or files suit and if, 
upon final disposition of the appeal or suit, the Contracting Officer's 
decision is not sustained--
    (i) The Government shall continue to be bound by the restrictive 
marking; and
    (ii) The Government shall be liable to the Contractor or 
subcontractor for payment of fees and other expenses (as defined in 28 
U.S.C. 2412(d)(2)(A)) incurred by the Contractor or subcontractor in 
defending the marking, if the challenge by the Government is found not 
to have been made in good faith.
    (i) Duration of right to challenge. The Government may review the 
validity of any restriction on technical data, delivered or to be 
delivered under a contract, asserted by the Contractor or subcontractor. 
During the period within three (3) years of final payment on a contract 
or within three (3) years of delivery of the technical data to the 
Government, whichever is later, the Contracting Officer may review and 
make a written determination to challenge the restriction. The 
Government may, however, challenge a restriction on the release, 
disclosure or use of technical data at any time if such technical data--
    (1) Is publicly available;
    (2) Has been furnished to the United States without restriction; or
    (3) Has been otherwise made available without restriction. Only the 
Contracting Officer's final decision resolving a formal challenge by 
sustaining the validity of a restrictive marking constitutes 
``validation'' as addressed in 10 U.S.C. 2321.
    (j) Decision not to challenge. A decision by the Government, or a 
determination by the Contracting Officer, to not challenge the 
restrictive marking or asserted restriction shall not constitute 
``validation.''
    (k) Privity of contract. The Contractor or subcontractor agrees that 
the Contracting Officer may transact matters under this clause directly 
with subcontractors at any tier that assert restrictive markings. 
However, this clause neither creates nor implies privity of contract 
between the Government and subcontractors.
    (l) Flowdown. The Contractor or subcontractor agrees to insert this 
clause in contractual instruments with its subcontractors or suppliers 
at any tier requiring the delivery of technical data, except contractual 
instruments for commercial items or commercial components.

                             (End of clause)

[60 FR 33505, June 28, 1995, as amended at 60 FR 61602, Nov. 30, 1995; 
64 FR 51077, Sept. 21, 1999; 69 FR 31912, June 8, 2004]



Sec. 252.227-7038  [Reserved]



Sec. 252.227-7039  Patents--reporting of subject inventions.

    As prescribed at 227.303(a), insert the following clause:

           Patents--Reporting of Subject Inventions (APR 1990)

    The Contractor shall furnish the Contracting Officer the following:
    (a) Interim reports every twelve (12) months (or such longer period 
as may be specified by the Contracting Officer) from the date of the 
contract, listing subject inventions during that period and stating that 
all subject inventions have been disclosed or that there are no such 
inventions.
    (b) A final report, within three (3) months after completion of the 
contracted work, listing all subject inventions or stating that there 
were no such inventions.

[[Page 412]]

    (c) Upon request, the filing date, serial number and title, a copy 
of the patent application and patent number, and issue data for any 
subject invention for which the Contractor has retained title.
    (d) Upon request, the Contractor shall furnish the Government an 
irrevocable power to inspect and make copies of the patent application 
file.

                             (End of clause)



Sec. 252.228-7000  Reimbursement for war-hazard losses.

    As prescribed in 228.370(a), use the following clause:

             Reimbursement for War-Hazard Losses (DEC 1991)

    (a) Costs for providing employee war-hazard benefits in accordance 
with paragraph (b) of the Workers' Compensation and War-Hazard Insurance 
clause of this contract are allowable if the Contractor--
    (1) Submits proof of loss files to support payment or denial of each 
claim;
    (2) Subject to Contracting Officer approval, makes lump sum final 
settlement of any open claims and obtains necessary release documents 
within one year of the expiration or termination of this contract, 
unless otherwise extended by the Contracting Officer; and
    (3) Provides the Contracting Officer at the time of final settlement 
of this contract--
    (i) An investigation report and evaluation of any potential claim; 
and
    (ii) An estimate of the dollar amount involved should the potential 
claim mature.
    (b) The cost of insurance for liabilities reimbursable under this 
clause is not allowable.
    (c) The Contracting Officer may require the Contractor to assign to 
the Government all right, title, and interest to any refund, rebate, or 
recapture arising out of any claim settlements.
    (d) The Contractor agrees to--
    (1) Investigate and promptly notify the Contracting Officer in 
writing of any occurrence which may give rise to a claim or potential 
claim, including the estimated amount of the claim;
    (2) Give the Contracting Officer immediate written notice of any 
suit or action filed which may result in a payment under this clause; 
and
    (3) Provide assistance to the Government in connection with any 
third party suit or claim relating to this clause which the Government 
elects to prosecute or defend in its own behalf.

                             (End of clause)



Sec. 252.228-7001  Ground and flight risk.

    As prescribed in 228.370(b), use the following clause:

                    Ground and Flight Risk (SEP 1996)

    (a) Definitions. As used in this clause--
    (1) Aircraft, unless otherwise provided in the Schedule, means--
    (i) Aircraft to be delivered to the Government under this contract 
(either before or after Government acceptance), including complete 
aircraft and aircraft in the process of being manufactured, 
disassembled, or reassembled; provided that an engine, portion of a wing 
or a wing is attached to a fuselage of the aircraft; and
    (ii) Aircraft, whether in a state of disassembly or reassembly, 
furnished by the Government to the Contractor under this contract, 
including all property installed, in the process of installation, or 
temporarily removed; provided that the aircraft and property are not 
covered by a separate bailment agreement.
    (2) Contractor's premises means those premises designated in the 
Schedule or in writing by the Contracting Officer, and any other place 
the aircraft is moved for safeguarding.
    (3) Flight means any flight demonstration, flight test, taxi test, 
or other flight made in the performance of this contract, or for the 
purpose of safeguarding the aircraft, or previously approved in writing 
by the Contracting Officer.
    (i) For land based aircraft, flight begins with the taxi roll from a 
flight line on the Contractor's premises and continues until the 
aircraft has completed the taxi roll in returning to a flight line on 
the Contractor's premises;
    (ii) For seaplanes, flight begins with the launching from a ramp on 
the Contractor's premises and continues until the aircraft has completed 
its landing run and is beached at a ramp on the Contractor's premises;
    (iii) For helicopters, flight begins upon engagement of the rotors 
for the purpose of take-off from the Contractor's premises and continues 
until the aircraft has returned to the ground on the Contractor's 
premises and the rotors are disengaged; and
    (iv) For vertical take-off aircraft, flight begins upon 
disengagement from any launching platform or device on the Contractor's 
premises and continues until the aircraft has been engaged to any 
launching platform or device on the Contractor's premises;
    (v) All aircraft off the Contractor's premises shall be considered 
to be in flight when on the ground or water for reasonable periods of 
time following emergency landings, landings made in performance of this 
contract, or landings approved in writing by the Contracting Officer.

[[Page 413]]

    (4) Flight crew member means the pilot, the co-pilot, and, unless 
otherwise provided in the Schedule, the flight engineer, navigator, and 
bombardier-navigator when assigned to their respective crew positions 
for the purpose of conducting any flight on behalf of the Contractor. If 
required, a defense systems operator may also be assigned as a flight 
crew member.
    (5) In the open means located wholly outside of buildings on the 
Contractor's premises or other places described in the Schedule as being 
in the open. Government furnished aircraft shall be considered to be 
located in the open at all times while in the Contractor's possession, 
care, custody, or control.
    (6) Operation means operations and tests of the aircraft and its 
installed equipment, accessories, and power plants, while the aircraft 
is in the open or in motion. The term does not apply to aircraft on any 
production line or in flight.
    (b) Except as may be specifically provided in the Schedule as an 
exception to this clause, the Government assumes the risk of damage to, 
or loss or destruction of aircraft in the open, during operation, and in 
flight. The Contractor shall not be liable to the Government for such 
damage, loss, or destruction.
    (c) The Government's assumption of risk for aircraft in the open 
shall continue unless the Contracting Officer finds that the aircraft is 
in the open under unreasonable conditions, and the Contractor fails to 
take prompt corrective action.
    (1) The Contracting Officer, when finding aircraft in the open under 
unreasonable conditions, shall notify the Contractor in writing of the 
unreasonable conditions and require the Contractor to make corrections 
within a reasonable time.
    (2) Upon receipt of the notice, the Contractor shall promptly 
correct the cited conditions, regardless of whether there is agreement 
that the conditions are unreasonable. If the Contracting Officer later 
determines that the cited conditions were not unreasonable, an equitable 
adjustment shall be made in the contract price for any additional costs 
incurred in correcting the conditions. Any dispute as to the 
unreasonableness of the conditions or the equitable adjustment shall be 
considered a dispute under the Disputes clause of this contract.
    (3) If the Contracting Officer finds that the Contractor failed to 
act promptly to correct the cited conditions or failed to correct the 
conditions within a reasonable time, the Contracting Officer may 
terminate the Government's assumption of risk for any aircraft in the 
open under the cited conditions. The termination will be effective at 
12:01 am on the fifteenth day following the day the written notice is 
received by the Contractor. If the Contracting Officer later determines 
that the Contractor acted promptly to correct the cited conditions or 
that the time taken by the Contractor was not unreasonable, an equitable 
adjustment shall be made in the contract price for any additional costs 
incurred as a result of termination of the Government's assumption of 
risk. Any dispute as to the timeliness of the Contractor's action or the 
equitable adjustment shall be considered a dispute under the Disputes 
clause of this contract.
    (4) If the Government terminates its assumption of risk, the risk of 
loss for Government-furnished property shall be determined in accordance 
with the Government Property clause of this contract.
    (5) The Contractor shall promptly notify the Contracting Officer 
when unreasonable conditions have been corrected. If the Government 
elects to again assume the risk of loss and relieve the Contractor of 
liabilities, the Contracting Officer will notify the Contractor. The 
Contractor shall be entitled to an equitable adjustment in the contract 
price for any insurance costs extending from the end of the third 
working day after the Contractor notice of correction until the 
Contractor is notified that the Government will assume the risk of loss. 
If the Government does not again assume the risk of loss and conditions 
have been corrected, the Contractor shall be entitled to an equitable 
adjustment for insurance costs, if any, extending after the third 
working day.
    (d) The Government's assumption of risk shall not extend to damage, 
loss, or destruction of aircraft which--
    (1) Results from failure of the Contractor, due to willful 
misconduct or lack of good faith of any of the Contractor's managerial 
personnel, to maintain and administer a program for the protection and 
preservation of aircraft in the open and during operation in accordance 
with sound industrial practice. The term Contractor's managerial 
personnel means the Contractor's directors, officers, and any of the 
Contractor's managers, superintendents, or other equivalent 
representatives who supervise or direct all or substantially all of the 
Contractor's business; or all or substantially all of the Contractor's 
operations at any one plant or separate location at which this contract 
is performed; or a separate and complete major industrial operation in 
connection with the performance of this contract;
    (2) Is sustained during flight if the flight crew members have not 
been approved in writing by the Government Flight Representative, who 
has been authorized in accordance with the combined regulation entitled 
``Contractor's Flight and Ground Operations'' (Air Force Regulation 55-
22, Army Regulation 95-20, NAVAIR Instruction 3710.1C, and Defense 
Logistics Agency Manual 8210.1);
    (3) Occurs in the course of transportation by rail, or by conveyance 
on public streets,

[[Page 414]]

highways, or waterways, except for Government-furnished property;
    (4) Is covered by insurance;
    (5) Consists of wear and tear; deterioration (including rust and 
corrosion); freezing; or mechanical, structural, or electrical breakdown 
or failure, unless these are the result of other loss, damage or 
destruction covered by this clause. (This exclusion does not apply to 
Government-furnished property if damage consists of reasonable wear and 
tear or deterioration, or results from inherent vice in the property.); 
or
    (6) Is sustained while the aircraft is being worked on and is a 
direct result of the work unless such damage, loss, or destruction would 
be covered by insurance which would have been maintained by the 
Contractor, but for the Government's assumption of risk.
    (e) With the exception of damage, loss, or destruction in flight, 
the Contractor assumes the risk and shall be responsible for the first 
$25,000 of loss or damage to aircraft in the open or during operation 
resulting from each separate event, except for reasonable wear and tear 
and to the extent the loss or damage is caused by negligence of 
Government personnel. If the Government elects to require that the 
aircraft be replaced or restored by the Contractor to its condition 
immediately prior to the damage, the equitable adjustment in the price 
authorized by paragraph (i) of this clause shall not include the dollar 
amount of the risk assumed by the Contractor. In the event the 
Government does not elect repair or replacement, the Contractor agrees 
to credit the contract price or pay the Government $25,000 (or the 
amount of the loss, if less) as directed by the Contracting Officer.
    (f) A subcontractor shall not be relieved from liability for damage, 
loss, or destruction of aircraft while in its possession or control, 
except to the extent that the subcontract, with the written approval of 
the Contracting Officer, provides for relief from each liability. In the 
absence of approval, the subcontract shall contain provisions requiring 
the return of aircraft in as good condition as when received, except for 
reasonable wear and tear or for the utilization of the property in 
accordance with the provisions of this contract. Where a subcontractor 
has not been relieved from liability, and damage, loss, or destruction 
occurs, the Contractor shall enforce liability against the subcontractor 
for the benefit of the Government.
    (g) The Contractor warrants that the contract price does not and 
will not include, except as may be authorized in this clause, any charge 
or contingency reserve for insurance covering damage, loss, or 
destruction of aircraft while in the open, during operation, or in 
flight when the risk has been assumed by the Government, even if the 
assumption may be terminated for aircraft in the open.
    (h) In the event of damage, loss, or destruction of aircraft in the 
open, during operation, or in flight, the Contractor shall take all 
reasonable steps to protect the aircraft from further damage, to 
separate damaged and undamaged aircraft, to put all aircraft in the best 
possible order and further, except in cases covered by paragraph (e) of 
this clause, the Contractor shall furnish to the Contracting Officer a 
statement of--
    (1) The damaged, lost, or destroyed aircraft;
    (2) The time and origin of the damage, loss, or destruction;
    (3) All known interests in commingled property of which aircraft are 
a part; and
    (4) The insurance, if any, covering the interest in commingled 
property.
    Except in cases covered by paragraph (e) of this clause, the 
Contracting Officer will make an equitable adjustment in the contract 
price for expenditures made by the Contractor in performing the 
obligations under this paragraph.
    (i) If prior to delivery and acceptance by the Government, aircraft 
is damaged, lost, or destroyed and the Government assumed the risk, the 
Government shall either--
    (1) Require that the aircraft be replaced or restored by the 
Contractor to the condition immediately prior to the damage, in which 
event the Contracting Officer will make an equitable adjustment in the 
contract price and the time for contract performance; or
    (2) Terminate this contract with respect to the aircraft, in which 
event the Contractor shall be paid the contract price for the aircraft 
(or, if applicable, any work to be performed on the aircraft) less any 
amount the Contracting Officer determines--
    (i) It would have cost the Contractor to complete the aircraft (or 
any work to be performed on the aircraft) together with anticipated 
profit on uncompleted work; and
    (ii) Would be the value of the damaged aircraft or any salvage 
retained by the Contractor.
    The Contracting Officer shall prescribe the manner of disposition of 
the damaged, lost, or destroyed aircraft, or any parts of the aircraft. 
If any additional costs of such disposition are incurred by the 
Contractor, a further equitable adjustment will be made in the amount 
due the Contractor. Failure of the parties to agree upon termination 
costs or an equitable adjustment with respect to any aircraft shall be 
considered a dispute under the Disputes clause.
    (j) In the event the Contractor is reimbursed or compensated by a 
third person for damage, loss, or destruction of aircraft and has also 
been compensated by the Government, the Contractor shall equitably 
reimburse the Government. The Contractor shall do nothing to prejudice 
the Government's right to recover against third parties for

[[Page 415]]

damage, loss, or destruction. Upon the request of the Contracting 
Officer or authorized representative, the Contractor shall at Government 
expense furnish to the Government all reasonable assistance and 
cooperation (including the prosecution of suit and the execution of 
instruments of assignment of subrogation) in obtaining recovery.
    (k) The Contractor agrees to be bound by the operating procedures 
contained in the combined regulation entitled ``Contractor's Flight and 
Ground Operations'' in effect on the date of contract award.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 56 FR 67221, Dec. 30, 1991; 
61 FR 50456, Sept. 26, 1996]



Sec. 252.228-7002  Aircraft flight risk.

    As prescribed in 228.370(c), use the following clause:

                     Aircraft Flight Risk (SEP 1996)

    (a) Definitions. As used in this clause--
    (1) Aircraft, unless otherwise provided in the Schedule, means--
    (i) Aircraft furnished by the Contractor under this contract (either 
before or after Government acceptance); or
    (ii) Aircraft furnished by the Government to the Contractor, 
including all Government property placed on, installed or attached to 
the aircraft; provided that the aircraft and property are not covered by 
a separate bailment agreement.
    (2) Flight means any flight demonstration, flight test, taxi test, 
or other flight made in the performance of this contract, or for the 
purpose of safeguarding the aircraft, or previously approved in writing 
by the Contracting Officer.
    (i) For land-based aircraft, flight begins with the taxi roll from a 
flight line and continues until the aircraft has completed the taxi roll 
to a flight line.
    (ii) For seaplanes, flight begins with the launching from a ramp and 
continues until the aircraft has completed its landing run and is 
beached at a ramp.
    (iii) For helicopters, flight begins upon engagement of the rotors 
for the purpose of take-off and continues until the aircraft has 
returned to the ground and rotors are disengaged.
    (iv) For vertical take-off aircraft, flight begins upon 
disengagement from any launching platform or device and continues until 
the aircraft has been reengaged to any launching platform or device.
    (3) Flight crew members means the pilot, co-pilot, and unless 
otherwise provided in the Schedule, the flight engineer, navigator, 
bombardier-navigator, and defense systems operator as required, when 
assigned to their respective crew positions to conduct any flight on 
behalf of the Contractor.
    (b) This clause takes precedence over any other provision of this 
contract (particularly paragraph (g) of the Government Property (Cost-
Reimbursement, Time-and-Materials, or Labor-Hour Contracts) clause and 
paragraph (c) of the Insurance--Liability to Third Persons clause).
    (c) Unless the flight crew members previously have been approved in 
writing by the Government Flight Representative, who has been authorized 
in accordance with the combined regulation entitled ``Contractor's 
Flight and Ground Operations'' (Air Force Regulation 55-22, Army 
Regulation 95-20, NAVAIR Instruction 3710.1C, and Defense Logistics 
Agency Manual 8210.1), the Contractor shall not be--
    (1) Relieved of liability for damage, loss, or destruction of 
aircraft sustained during flight; or
    (2) Reimbursed for liabilities to third persons for loss or damage 
to property or for death or bodily injury caused by aircraft during 
flight.
    (d)(1) The loss, damage, or destruction of aircraft during flight in 
an amount exceeding $100,000 or 20 percent of the estimated cost of this 
contract, whichever is less, is subject to an equitable adjustment when 
the Contractor is not liable under--
    (i) The Government Property (Cost-Reimbursement, Time-and-Materials, 
or Labor-Hour Contracts) clause, and
    (ii) Paragraph (c) of this clause.
    (2) The equitable adjustment under this contract for the resulting 
repair, restoration, or replacement of aircraft shall be made--
    (i) In the estimated cost, the delivery schedule, or both; and
    (ii) In the amount of any fee to be paid to the Contractor.
    (3) In determining the amount of equitable adjustment in the fee, 
the Contracting Officer will consider any fault of the Contractor, its 
employees, or any subcontractor that materially contributed to the 
damage, loss, or destruction.
    (4) Failure to agree on any adjustment shall be a dispute concerning 
a question of fact within the meaning of the Disputes clause of this 
contract.
    (e) The Contractor agrees to be bound by the operating procedures 
contained in the combined regulation entitled ``Contractor's Flight and 
Found Operations'' in effect on the date of contract award.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 61 FR 50456, Sept. 26, 1996]

[[Page 416]]



Sec. 252.228-7003  Capture and detention.

    As prescribed in 228.370(d), use the following clause:

                    Capture and Detention (Dec. 1991)

    (a) As used in this clause--

    (1) Captured person means any employee of the Contractor who is--
    (i) Assigned to duty outside the United States for the performance 
of this contract; and
    (ii) Found to be missing from his or her place of employment under 
circumstances that make it appear probable that the absence is due to 
the action of the force of any power not allied with the United States 
in a common military effort; or
    (iii) Known to have been taken prisoner, hostage, or otherwise 
detained by the force of such power, whether or not actually engaged in 
employment at the time of capture; provided, that at the time of capture 
or detention, the person was either--
    (A) Engaged in activity directly arising out of and in the course of 
employment under this contract; or
    (B) Captured in an area where required to be only in order to 
perform this contract.
    (2) A period of detention begins with the day of capture and 
continues until the captured person is returned to the place of 
employment, the United States, or is able to be returned to the 
jurisdiction of the United States, or until the person's death is 
established or legally presumed to have occurred by evidence 
satisfactory to the Contracting Officer, whichever occurs first.
    (3) United States comprises geographically the 50 states and the 
District of Columbia.
    (4) War Hazards Compensation Act refers to the statute compiled in 
chapter 12 of title 42, U.S. Code (sections 1701-1717), as amended.
    (b) If pursuant to an agreement entered into prior to capture, the 
Contractor is obligated to pay and has paid detention benefits to a 
captured person, or the person's dependents, the Government will 
reimburse the Contractor up to an amount equal to the lesser of--
    (1) Total wage or salary being paid at the time of capture due from 
the Contractor to the captured person for the period of detention; or
    (2) That amount which would have been payable if the detention had 
occurred under circumstances covered by the War Hazards Compensation 
Act.
    (c) The period of detention shall not be considered as time spent in 
contract performance, and the Government shall not be obligated to make 
payment for that time except as provided in this clause.
    (d) The obligation of the Government shall apply to the entire 
period of detention, except that it is subject to the availability of 
funds from which payment can be made. The rights and obligations of the 
parties under this clause shall survive prior expiration, completion, or 
termination of this contract.
    (e) The Contractor shall not be reimbursed under this clause for 
payments made if the employees were entitled to compensation for capture 
and detention under the War Hazards Compensation Act, as amended.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 57 FR 42633, Sept. 15, 1992]



Sec. 252.228-7004  Bonds or other security.

    As prescribed in 228.170, use the following provision:

                   Bonds or Other Security (Dec. 1991)

    (a) Offerors shall furnish a bid guarantee in the amount of $------
-- with their bids. The offeror receiving notice of award shall 
furnish--
    (1) A performance bond in the penal amount of $--------; and
    (2) Payment in full of any sum due the Government.
    (b) The Contractor shall furnish the performance bond to the 
Contracting Officer within ---- days after receipt of the notice of 
award. The Contracting Officer will not issue the notice to proceed 
until receipt of an acceptable performance bond and payment of any sum 
due the Government.
    (c) Bonds supported by sureties whose names appear on the list 
contained in Treasury Department Circular 570 are acceptable. 
Performance bonds from individual sureties are acceptable if each person 
acting as a surety provides a SF 28, Affidavit of Individual Surety, and 
a pledge of assets acceptable to the Contracting Officer.

                           (End of provision)



Sec. 252.228-7005  Accident reporting and investigation involving 
          aircraft, missiles, and space launch vehicles.

    As prescribed in 228.370(e), use the following clause:

 Accident Reporting and Investigation Involving Aircraft, Missiles, and 
                    Space Launch Vehicles (Dec. 1991)

    (a) The Contractor shall report promptly to the Administrative 
Contracting Officer all pertinent facts relating to each accident 
involving an aircraft, missile, or space launch vehicle being 
manufactured, modified, repaired, or overhauled in connection with this 
contract.
    (b) If the Government conducts an investigation of the accident, the 
Contractor will

[[Page 417]]

cooperate and assist the Government's personnel until the investigation 
is complete.
    (c) The Contractor will include a clause in subcontracts under this 
contract to require subcontractor cooperation and assistance in accident 
investigations.

                             (End of clause)



Sec. 252.228-7006  Compliance with Spanish laws and insurance.

    As prescribed at 228.370(f), use the following clause:

          Compliance with Spanish Laws and Insurance (DEC 1998)

    (a) The requirements of this clause apply only if the Contractor is 
not a Spanish concern.
    (b) The Contractor shall, without additional expense to the United 
States Government, comply with all applicable Spanish Government laws 
pertaining to sanitation, traffic, security, employment of labor, and 
all other laws relevant to the performance of this contract. The 
Contractor shall hold the United States Government harmless and free 
from any liability resulting from the Contractor's failure to comply 
with such laws.
    (c) The contractor shall, at its own expense, provide and maintain 
during the entire performance of this contract, all workmen's 
compensation, employees' liability, bodily injury insurance, and other 
required insurance adequate to cover the risk assumed by the Contractor. 
The Contractor shall indemnify and hold harmless the United States 
Government from liability resulting from all claims for damages as a 
result of death or injury to personnel or damage to real or personal 
property related to the performance of this contract.
    (d) The Contractor agrees to represent in writing to the Contracting 
Officer, prior to commencement of work and not later than 15 days after 
the date of the Notice to Proceed, that the Contractor has obtained the 
required types of insurance in the following minimum amounts. The 
representation also shall state that the Contractor will promptly notify 
the Contracting Officer of any notice of cancellation of insurance or 
material change in insurance coverage that could affect the United 
States Government's interests.

------------------------------------------------------------------------
                                                  Coverage
        Type of insurance            Coverage       per        Property
                                    per person    accident      damage
------------------------------------------------------------------------
Comprehensive General Liability..     $300,000   $1,000,000     $100,000
------------------------------------------------------------------------

    (e) The Contractor shall provide the Contracting Officer with a 
similar representation for all subcontracts with non-Spanish concerns 
that will perform work in Spain under this contract.
    (f) Insurance policies required herein shall be purchased from 
Spanish insurance companies or other insurance companies legally 
authorized to conduct business in Spain. Such policies shall conform to 
Spanish laws and regulations and shall--
    (1) Contain provisions requiring submission to Spanish law and 
jurisdiction of any problem that may arise with regard to the 
interpretation or application of the clauses and conditions of the 
insurance policy;
    (2) Contain a provision authorizing the insurance company, as 
subrogee of the insured entity, to assume and attend to directly, with 
respect to any person damaged, the legal consequences arising from the 
occurrence of such damages;
    (3) Contain a provision worded as follows: ``The insurance company 
waives any right of subrogation against the United States of America 
that may arise by reason of any payment under this policy.'';
    (4) Not contain any deductible amount or similar limitation; and
    (5) Not contain any provisions requiring submission to any type of 
arbitration.

                             (End of clause)

[62 FR 34132, June 24, 1997, as amended at 63 FR 69006, Dec. 15, 1998]



Sec. 252.229-7000  Invoices exclusive of taxes or duties.

    As prescribed in 229.402-1, use the following clause:

            Invoices Exclusive of Taxes or Duties (JUNE 1997)

    Invoices submitted in accordance with the terms and conditions of 
this contract shall be exclusive of all taxes or duties for which relief 
is available.

                             (End of clause)

[62 FR 34132, June 24, 1997]



Sec. 252.229-7001  Tax relief.

    As prescribed in 229.402-70(a), use the following clause:

                         Tax Relief (JUNE 1997)

    (a) Prices set forth in this contract are exclusive of all taxes and 
duties from which the United States Government is exempt by virtue of 
tax agreements between the United States Government and the Contractor's 
government. The following taxes or duties have been excluded from the 
contract price:

[[Page 418]]

    NAME OF TAX: (Offeror Insert) RATE (PERCENTAGE): (Offeror Insert)

    (b) The Contractor's invoice shall list separately the gross price, 
amount of tax deducted, and net price charged.
    (c) When items manufactured to United States Government 
specifications are being acquired, the Contractor shall identify the 
materials or components intended to be imported in order to ensure that 
relief from import duties is obtained. If the Contractor intends to use 
imported products from inventories on hand, the price of which includes 
a factor for import duties, the Contractor shall ensure the United 
States Government's exemption from these taxes. The Contractor may 
obtain a refund of the import duties from its government or request the 
duty-free import of an amount of supplies or components corresponding to 
that used from inventory for this contract.

                             (End of clause)

                         Alternate I (JUN 1997)

    As prescribed in 229.402-70(a), add the following paragraph (d) to 
the basic clause:

    (d) Tax relief will be claimed in Germany pursuant to the provisions 
of the Agreement Between the United States of America and Germany 
Concerning Tax Relief to be Accorded by Germany to United States 
Expenditures in the Interest of Common Defense. The Contractor shall use 
Abwicklungsschein fuer abgabenbeguenstigte Lieferungen/Leistungen nach 
dem Offshore Steuerabkommen (Performance Certificate for Tax-Free 
Deliveries/Performance according to the Offshore Tax Relief Agreement) 
or other documentary evidence acceptable to the German tax authorities. 
All purchases made and paid for on a tax-free basis during a 30-day 
period may be accumulated, totaled, and reported as tax-free.

[62 FR 34132, June 24, 1997]



Sec. 252.229-7002  Customs exemptions (Germany).

    As prescribed in 229.402-70(b), use the following clause:

                Customs Exemptions (Germany) (JUNE 1997)

    Imported products required for the direct benefit of the United 
States Forces are authorized to be acquired duty-free by the Contractor 
in accordance with the provisions of the Agreement Between the United 
States of America and Germany Concerning Tax Relief to be Accorded by 
Germany to United States Expenditures in the Interest of Common Defense.

                             (End of clause)

[62 FR 34133, June 24, 1997]



Sec. 252.229-7003  Tax Exemptions (Italy).

    As prescribed in 229.402-70(c), use the following clause:

                    Tax Exemptions (Italy) (JAN 2002)

    (a) The Contractor represents that the contract price, including the 
prices in subcontracts awarded under this contract, does not include 
taxes from which the United States Government is exempt.
    (b) The United States Government is exempt from payment of Imposta 
Valore Aggiunto (IVA) tax in accordance with Article 72 of the IVA 
implementing decree on all supplies and services sold to United States 
Military Commands in Italy.
    (1) The Contractor shall include the following information on 
invoices submitted to the United States Government:
    (i) The contract number.
    (ii) The IVA tax exemption claimed pursuant to Article 72 of Decree 
Law 633, dated October 26, 1972.
    (iii) The following fiscal code(s): [Contracting Officer must insert 
the applicable fiscal code(s) for military activities within Italy: 
80028250241 for Army, 80156020630 for Navy, or 91000190933 for Air 
Force].
    (2)(i) Upon receipt of the invoice, the paying office will include 
the following certification on one copy of the invoice:
    ``I certify that this invoice is true and correct and reflects 
expenditures made in Italy for the Common Defense by the United States 
Government pursuant to international agreements. The amount to be paid 
does not include the IVA tax, because this transaction is not subject to 
the tax in accordance with Article 72 of Decree Law 633, dated October 
26, 1972.'' An authorized United States Government official will sign 
the copy of the invoice containing this certification.
    (ii) The paying office will return the certified copy together with 
payment to the Contractor. The payment will not include the amount of 
the IVA tax.
    (iii) The Contractor shall retain the certified copy to substantiate 
non-payment of the IVA tax.
    (3) The Contractor may address questions regarding the IVA tax to 
the Ministry of Finance, IVA Office, Rome (06) 520741.
    (c) In addition to the IVA tax, purchases by the United States 
Forces in Italy are exempt from the following taxes:
    (1) Imposta di Fabbricazione (Production Tax for Petroleum 
Products).
    (2) Imposta di Consumo (Consumption Tax for Electrical Power).
    (3) Dazi Doganali (Customs Duties).

[[Page 419]]

    (4) Tassa di Sbarco e d'Imbarco sulle Merci Transportate per Via 
Aerea e per Via Maritima (Port Fees).
    (5) Tassa de Circolazione sui Veicoli (Vehicle Circulation Tax).
    (6) Imposta di Registro (Registration Tax).
    (7) Imposta di Bollo (Stamp Tax).

                             (End of clause)

[67 FR 4210, Jan. 29, 2002]



Sec. 252.229-7004  Status of contractors as a direct contractor (Spain).

    As prescribed in 229.402-70(d), use the following clause:

    Status of Contractor as a Director Contractor (Spain) (June 1997)

    (a) ``Direct Contractor,'' as used in this clause, means an 
individual, company, or entity with whom an agency of the United States 
Department of Defense has executed a written agreement that allows duty-
free import of equipment, materials, and supplies into Spain for the 
construction, development, maintenance, and operation of Spanish-
American installations and facilities.
    (b) The Contractor is hereby designated as a Direct Contractor under 
the provisions of Complementary Agreement 5, articles 11, 14, 15, 17, 
and 18 of the Agreement on Friendship, Defense and Cooperation between 
the United States Government and the Kingdom of Spain, dated July 2, 
1982. The Agreement relates to contacts to be performed in whole or part 
in Spain, the provisions of which are hereby incorporated into and made 
a part of this contract by reference.
    (c) The Contractor shall apply to the appropriate Spanish 
authorities for approval of status as a Direct Contractor in order to 
complete duty-free import of non-Spanish equipment, materials, and 
supplies represented as necessary for contract performance by the 
Contracting Officer. Orders for equipment, materials, and supplies 
placed prior to official notification of such approval shall be at the 
Contractor's own risk. The Contractor must submit its documentation in 
sufficient time to permit processing by the appropriate United States 
and Spanish Government agencies prior to the arrival of the equipment, 
material, or supplies in Spain. Seasonal variations in processing times 
are common, and the Contractor should program its projects accordingly. 
Any delay or expense arising directly or indirectly from this process 
shall not excuse untimely performance (except as expressly allowed in 
other provisions of this contract), constitute a direct or constructive 
change, or otherwise provide a basis for additional compensation or 
adjustment of any kind.
    (d) To ensure that all duty-free imports are properly accounted for, 
exported, or disposed of, in accordance with Spanish law, the Contractor 
shall obtain a written bank letter of guaranty payable to the Treasurer 
of the United States, or such other authority as may be designated by 
the Contracting Officer, in the amount set forth in paragraph (g) of 
this clause, prior to effecting any duty-free imports for the 
performance of this contract.
    (e) If the Contractor fails to obtain the required guaranty, the 
Contractor agrees that the Contracting Officer may withhold a portion of 
the contract payments in order to establish a fund in the amount set 
forth in paragraph (g) of this clause. The fund shall be used for the 
payment of import taxes in the event that the Contractor fails to 
properly account for, export, or dispose of equipment, materials, or 
supplies imported on a duty-free basis.
    (f) The amount of the bank letter of guaranty or size of the fund 
required under paragraph (d) or (e) of this clause normally shall be 5 
percent of the contract value. However, if the Contractor demonstrates 
to the Contracting Officer's satisfaction that the amount retained by 
the United States Government or guaranteed by the bank is excessive, the 
amount shall be reduced to an amount commensurate with contingent import 
tax and duty-free liability. This bank guaranty or fund shall not be 
released to the Contractor until the Spanish General Directorate of 
Customs verifies the accounting, export, or disposition of the 
equipment, material, or supplies imported on a duty-free basis.
    (g) The amount required under paragraph (d), (e), or (f) of this 
clause is (Contracting Officer insert amount at time of contract award).
    (h) The Contractor agrees to insert the provisions of this clause, 
including this paragraph (h), in all subcontracts.

                             (End of clause)

[62 FR 34133, June 24, 1997, as amended at 63 FR 11548, Mar. 9, 1998]



Sec. 252.229-7005  Tax exemptions (Spain).

    As prescribed in 229.402-70(e), use the following clause:

                   Tax Exemptions (Spain) (June 1997)

    (a) The Contractor represents that the contract prices, including 
subcontract prices, do not include the taxes identified herein, or any 
other taxes from which the United States Government is exempt.
    (b) In accordance with tax relief agreements between the United 
States Government and the Spanish Government, and because the incumbent 
contract arises from the activities of the United States Forces in 
Spain, the contract will be exempt from the

[[Page 420]]

following excise, luxury, and transaction taxes:
    (1) Derechos de Aduana (Customs Duties).
    (2) Impuesto de Compensacion a la Importacion (Compensation Tax on 
Imports).
    (3) Transmissiones Patrionomiales (Property Transfer Tax).
    (4) Impuesto Sobre el Lujo (Luxury Tax).
    (5) Actos Juridocos Documentados (Legal Official Transactions).
    (6) Impuesto Sobre el Trafico de Empresas (Business Trade Tax).
    (7) Impuestos Especiales de Fabricacion (Special Products Tax).
    (8) Impuesto Sobre el Petroleo y Derivados (Tax on Petroleum and its 
By-Products).
    (9) Impuesto Sobre el Uso de Telefona (Telephone Tax).
    (10) Impuesto General Sobre la Renta de Sociedades y demas Entidades 
Juridicas (General Corporation Income Tax).
    (11) Impuesto Industrial (Industrial Tax).
    (12) Impuesto de Rentas Sobre el Capital (Capital Gains Tax).
    (13) Plus Vailia (Increase on Real Property).
    (14) Contribucion Territorial Urbana (Metropolitan Real Estate Tax).
    (15) Contribucion Territorial Rustica y Pecuaria (Farmland Real 
Estate Tax).
    (16) Impuestos de la Diputacion (County Service Charges).
    (17) Impuestos Municipal y Tasas Parafiscales (Municipal Tax and 
Charges).

                             (End of clause)

[62 FR 34133, June 24, 1997]



Sec. 252.229-7006  Value added tax exclusion (United Kingdom).

    As prescribed in 229.402-70(f), use the following clause:

         Value Added Tax Exclusion (United Kingdom) (JUNE 1997)

    The supplies or services identified in this contract are to be 
delivered at a price exclusive of value added tax under arrangements 
between the appropriate United States authorities and Her Majesty's 
Customs and Excise (Reference Priv 46/7). By executing this contract, 
the Contracting Officer certifies that these supplies or services are 
being purchased for United States Government official purposes only.

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.229-7007  Verification of United States receipt of goods.

    As prescribed in 229.402-70(g), use the following clause:

       Verification of United States Receipt of Goods (JUNE 1997)

    The Contractor shall insert the following statement on all Material 
Inspection and Receiving Reports (DD Form 250 series) for Contracting 
Officer approval: ``I certify that the items listed on this invoice have 
been received by the United States.''

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.229-7008  Relief from import duty (United Kingdom).

    As prescribed in 229.402-70(h), use the following clause:

          Relief from Import Duty (United Kingdom) (JUNE 1997)

    Any import dutiable articles, components, or raw materials supplied 
to the United States Government under this contract shall be exclusive 
of any United Kingdom import duties. Any imported items supplied for 
which import duty already has been paid will be supplied at a price 
exclusive of the amount of import duty paid. The Contractor is advised 
to contact Her Majesty's (HM) Customs and Excise to obtain a refund upon 
completion of the contract (Reference HM Customs and Excise Notice No. 
431, February 1973, entitled ``Relief from Customs Duty and/or Value 
Added Tax on United States Government Expenditures in the United 
Kingdom'').

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.229-7009  Relief from customs duty and value added tax on fuel 
          (passenger vehicles) (United Kingdom).

    As prescribed in 229.402-70(i), use the following clause:

    Relief from Customs Duty and Value Added Tax on Fuel (Passenger 
                 Vehicles) (United Kingdom) (JUNE 1997)

    (a) Pursuant to an agreement between the United States Government 
and Her Majesty's (HM) Customs and Excise, fuels and lubricants used by 
passenger vehicles (except taxis) in the performance of this contract 
will be exempt from customs duty and value added tax. Therefore, the 
procedures outlined in HM Customs and Excise Notice No. 431B, August 
1982, and any amendment thereto, shall be used to obtain relief from 
both customs duty and value added tax for fuel used under the contract. 
These procedures shall apply to both loaded and unloaded miles. The unit 
prices shall be based on the

[[Page 421]]

recoupment by the Contractor of customs duty in accordance with the 
following allowances:
    (1) Vehicles (except taxis) with a seating capacity of less than 29, 
one gallon for every 27 miles.
    (2) Vehicles with a seating capacity of 29-53, one gallon for every 
13 miles.
    (3) Vehicles with a seating capacity of 54 or more, one gallon for 
every 10 miles.
    (b) In the event the mileage of any route is increased or decreased 
within 10 percent, resulting in no change in route price, the customs 
duty shall be reclaimed from HM Customs and Excise on actual mileage 
performed.

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.229-7010  Relief from customs duty on fuel (United Kingdom).

    As prescribed in 229.402-70(j), use the following clause:

      Relief from Customs Duty on Fuel (United Kingdom) (JUNE 1997)

    (a) Pursuant to an agreement between the United States Government 
and Her Majesty's (HM) Customs and Excise, it is possible to obtain 
relief from customs duty on fuels and lubricants used in support of 
certain contracts. If vehicle fuels and lubricants are used in support 
of this contract, the Contractor shall seek relief from customs duty in 
accordance with HM Customs Notice No. 431, February 1973, entitled 
``Relief from Customs Duty and/or Value Added Tax on United States 
Government Expenditures in the United Kingdom.'' Application should be 
sent to the Contractor's local Customs and Excise Office.
    (b) Specific information should be included in the request for tax 
relief, such as the number of vehicles involved, types of vehicles, 
rating of vehicles, fuel consumption, estimated mileage per contract 
period, and any other information that will assist HM Customs and Excise 
in determining the amount of relief to be granted.
    (c) Within 30 days after the award of this contract, the Contractor 
shall provide the Contracting Officer with evidence that an attempt to 
obtain such relief has been initiated. In the event the Contractor does 
not attempt to obtain relief within the time specified, the Contracting 
Officer may deduct from the contract price the amount of relief that 
would have been allowed if HM Customs and Excise had favorably 
considered the request for relief.
    (d) The amount of any rebate granted by HM Customs and Excise shall 
be paid in full to the United States Government. Checks shall be made 
payable to the Treasurer of the United States and forwarded to the 
Administrative Contracting Officer.

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.229-7011  Reporting of Foreign Taxes--U.S. Assistance Programs.

    As prescribed in 229.170-4, use the following clause:

     Reporting of Foreign Taxes--U.S. Assistance Programs (SEP 2005)

    (a) Definition. Commodities, as used in this clause, means any 
materials, articles, supplies, goods, or equipment.
    (b) Commodities acquired under this contract shall be exempt from 
all value added taxes and customs duties imposed by the recipient 
country. This exemption is in addition to any other tax exemption 
provided through separate agreements or other means.
    (c) The Contractor shall inform the foreign government of the tax 
exemption, as documented in the Letter of Offer and Acceptance, country-
to-country agreement, or interagency agreement.
    (d) If the foreign government or entity nevertheless imposes taxes, 
the Contractor shall promptly notify the Contracting Officer and shall 
provide documentation showing that the foreign government was apprised 
of the tax exemption in accordance with paragraph (c) of this clause.
    (e) The Contractor shall insert the substance of this clause, 
including this paragraph (e), in all subcontracts for commodities that 
exceed $500.

                             (End of clause)

[70 FR 57192, Sept. 30, 2005]



Sec. 252.231-7000  Supplemental cost principles.

    As prescribed in 231.100-70, use the following clause:

                 Supplemental Cost Principles (DEC 1991)

    When the allowability of costs under this contract is determined in 
accordance with part 31 of the Federal Acquisition Regulation (FAR), 
allowability shall also be determined in accordance with part 231 of the 
Defense FAR Supplement, in effect on the date of this contract.

[[Page 422]]

                             (End of clause)



Sec. 252.232-7000  Advance payment pool.

    As prescribed in 232.412-70(a), use the following clause:

                    Advance Payment Pool (Dec. 1991)

    (a) Notwithstanding any other provision of this contract, advance 
payments will be made for contract performance in accordance with the 
Determinations, Findings, and Authorization for Advance payment dated --
------------.
    (b) Payments made in accordance with this clause shall be governed 
by the terms and conditions of the Advance Payment Pool Agreement 
between the United States of America and (insert the name of the 
contractor). The Agreement is incorporated in the contract by reference.

                             (End of clause)



Sec. 252.232-7001  Disposition of payments.

    As prescribed in 232.412-70(b), use the following clause:

                   Disposition of Payments (DEC 1991)

    Payment will be by a dual payee Treasury check made payable to the 
contractor or the (insert the name of the disbursing office in the 
advance payment pool agreement), and will be forwarded to that 
disbursing office for appropriate disposition.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 57 FR 42633, Sept. 15, 1992]



Sec. 252.232-7002  Progress payments for foreign military sales 
          acquisitions.

    As prescribed in 232.502-4-70(a), use the following clause:

  Progress Payments for Foreign Military Sales Acquisitions (DEC 1991)

    If this contract includes foreign military sales (FMS) requirements, 
the Contractor shall--
    (a) Submit a separate progress payment request for each progress 
payment rate; and
    (b) Submit a supporting schedule showing--
    (1) The amount of each request distributed to each country's 
requirements; and
    (2) Total price per contract line item applicable to each separate 
progress payment rate.
    (c) Identify in each progress payment request the contract 
requirements to which it applies (i.e., FMS or U.S.);
    (d) Calculate each request on the basis of the prices, costs 
(including costs to complete), subcontractor progress payments, and 
progress payment liquidations of the contract requirements to which it 
applies; and
    (e) Distribute costs among contract line items and countries in a 
manner acceptable to the Administrative Contracting Officer.

                             (End of clause)



Sec. 252.232-7003  Electronic submission of payment requests.

    As prescribed in 232.7004, use the following clause:

          Electronic Submission of Payment Requests (MAY 2006)

    (a) Definitions. As used in this clause--
    (1) Contract financing payment and invoice payment have the meanings 
given in section 32.001 of the Federal Acquisition Regulation.
    (2) Electronic form means any automated system that transmits 
information electronically from the initiating system to all affected 
systems. Facsimile, e-mail, and scanned documents are not acceptable 
electronic forms for submission of payment requests. However, scanned 
documents are acceptable when they are part of a submission of a payment 
request made using one of the electronic forms provided for in paragraph 
(b) of this clause.
    (3) Payment request means any request for contract financing payment 
or invoice payment submitted by the Contractor under this contract.
    (b) Except as provided in paragraph (c) of this clause, the 
Contractor shall submit payment requests using one of the following 
electronic forms:
    (1) Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA). Information 
regarding WAWF-RA is available on the Internet at https://wawf.eb.mil.
    (2) Web Invoicing System (WInS). Information regarding WInS is 
available on the Internet at https://ecweb.dfas.mil.
    (3) American National Standards Institute (ANSI) X.12 electronic 
data interchange (EDI) formats.
    (i) Information regarding EDI formats is available on the Internet 
at http://www.X12.org.
    (ii) EDI implementation guides are available on the Internet at 
http://www.dod.mil/dfas/.
    (4) Another electronic form authorized by the Contracting Officer.
    (c) If the Contractor is unable to submit a payment request in 
electronic form, or DoD is unable to receive a payment request in 
electronic form, the Contractor shall submit the payment request using a 
method mutually agreed to by the Contractor, the Contracting Officer, 
the contract administration office, and the payment office.

[[Page 423]]

    (d) In addition to the requirements of this clause, the Contractor 
shall meet the requirements of the appropriate payment clauses in this 
contract when submitting payments requests.

                             (End of clause)

[68 FR 8455, Feb. 21, 2003, as amended at 68 FR 15380, Mar. 31, 2003; 68 
FR 69630, Dec. 15, 2003; 69 FR 1926, Jan. 13, 2004; 71 FR 27644, May 12, 
2006]



Sec. 252.232-7004  DoD progress payment rates.

    As prescribed in 232.502-4-70(b), use the following clause:

                  DOD Progress Payment Rates (OCT 2001)

    (a) If the contractor is a small business concern, the Progress 
Payments clause of this contract is modified to change each mention of 
the progress payment rate and liquidation rate (excepting paragraph (k), 
Limitations on Undefinitized Contract Actions) to 90 percent.
    (b) If the contractor is a small disadvantaged business concern, the 
Progress Payments clause of this contract is modified to change each 
mention of the progress payment rate and liquidation rate (excepting 
paragraph (k), Limitations on Undefinitized Contract Actions) to 95 
percent.

                             (End of clause)

[66 FR 49865, Oct. 1, 2001]



Sec. 252.232-7005  Reimbursement of subcontractor advance payments--DoD 
          pilot mentor-protege program.

    As prescribed in 232.412-70(c), use the following clause:

   Reimbursement of Subcontractor Advance Payments--DoD Pilot Mentor-
                       Protege Program (SEP 2001)

    (a) The Government will reimburse the Contractor for any advance 
payments made by the Contractor, as a mentor firm, to a protege firm, 
pursuant to an approved mentor-protege agreement, provided--
    (1) The Contractor's subcontract with the protege firm includes a 
provision substantially the same as FAR 52.232-12, Advance Payments;
    (2) The Contractor has administered the advance payments in 
accordance with the policies of FAR subpart 32.4; and
    (3) The Contractor agrees that any financial loss resulting from the 
failure or inability of the protege firm to repay any unliquidated 
advance payments is the sole financial responsibility of the Contractor.
    (b) For a fixed price type contract, advance payments made to a 
protege firm shall be paid and administered as if there were 100 percent 
progress payments. The Contractor shall include as a separate attachment 
with each Standard Form (SF) 1443, Contractor's Request for Progress 
Payment, a request for reimbursement of advance payments made to a 
protege firm. The attachment shall provide a separate calculation of 
lines 14a through 14e of SF 1443 for each protege, reflecting the status 
of advance payments made to that protege.
    (c) For cost reimbursable, contracts, reimbursement of advance 
payments shall be made via public voucher. The Contractor shall show the 
amounts of advance payments made to each protege on the public voucher, 
in the form and detail directed by the cognizant contracting officer or 
contract auditor.

                             (End of clause)

[56 FR 67221, Dec. 30, 1991, as amended at 57 FR 53602, Nov. 12, 1992; 
66 FR 47109, Sept. 11, 2001]



Sec. 252.232-7006  Alternate A.

                         Alternate A (DEC 2003)

    As prescribed in 232.111(b), substitute the following paragraph 
(a)(2) for paragraph (a)(2) of the clause at FAR 52.232-7:
    (a)(2) The Administrative Contracting Officer (ACO) may unilaterally 
issue a contract modification requiring the Contractor to withhold 
amounts from its billings until a reserve is set aside in an amount that 
the ACO considers necessary to protect the Government's interests. The 
ACO may withhold 5 percent of the amounts due under this paragraph (a), 
but the total amount withheld shall not exceed $50,000. The amounts 
withheld shall be retained until the Contractor executes and delivers 
the release required by paragraph (f) of this clause.

[68 FR 69632, Dec. 15, 2003]



Sec. 252.232-7007  Limitation of Government's obligation.

    As prescribed in 232.705-70, use the following clause:

            Limitation of Government's Obligation (MAY 2006)

    (a) Contract line item(s) ------* through ------* are incrementally 
funded. For these item(s), the sum of $------* of the total price is 
presently available for payment and allotted to this contract. An 
allotment schedule is set forth in paragraph (j) of this clause.
    (b) For item(s) identified in paragraph (a) of this clause, the 
Contractor agrees to perform up to the point at which the total

[[Page 424]]

amount payable by the Government, including reimbursement in the event 
of termination of those item(s) for the Government's convenience, 
approximates the total amount currently allotted to the contract. The 
Contractor is not authorized to continue work on those item(s) beyond 
that point. The Government will not be obligated in any event to 
reimburse the Contractor in excess of the amount allotted to the 
contract for those item(s) regardless of anything to the contrary in the 
clause entitled ``Termination for Convenience of the Government.'' As 
used in this clause, the total amount payable by the Government in the 
event of termination of applicable contract line item(s) for convenience 
includes costs, profit, and estimated termination settlement costs for 
those items(s).
    (c) Notwithstanding the dates specified in the allotment schedule in 
paragraph (j) of this clause, the Contractor will notify the Contracting 
Officer in writing at least ninety days prior to the date when, in the 
Contractor's best judgment, the work will reach the point at which the 
total amount payable by the Government, including any cost for 
termination for convenience, will approximate 85 percent of the total 
amount then allotted to the contract for performance of the applicable 
item(s). The notification will state (1) the estimated date when that 
point will be reached and (2) an estimate of additional funding, if any, 
needed to continue performance of applicable line items up to the next 
scheduled date for allotment of funds identified in paragraph (j) of 
this clause, or to a mutually agreed upon substitute date. The 
notification will also advise the Contracting Officer of the estimated 
amount of additional funds that will be required for the timely 
performance of the item(s) funded pursuant to this clause, for a 
subsequent period as may be specified in the allotment schedule in 
paragraph (j) of this clause, or otherwise agreed to by the parties. If 
after such notification additional funds are not allotted by the date 
identified in the Contractor's notification, or by an agreed substitute 
date, the Contracting Officer will terminate any item(s) for which 
additional funds have not been allotted, pursuant to the clause of this 
contract entitled ``Termination for Convenience of the Government.''
    (d) When additional funds are allotted for continued performance of 
the contract line item(s) identified in paragraph (a) of this clause, 
the parties will agree as to the period of contract performance which 
will be covered by the funds. The provisions of paragraph (b) through 
(d) of this clause will apply in like manner to the additional allotted 
funds and agreed substitute date, and the contract will be modified 
accordingly.
    (e) If, solely by reason of failure of the Government to allot 
additional funds, by the dates indicated below, in amounts sufficient 
for timely performance of the contract line item(s) identified in 
paragraph (a) of this clause, the Contractor incurs additional costs or 
is delayed in the performance of the work under this contract and if 
additional funds are allotted, an equitable adjustment will be made in 
the price or prices (including appropriate target, billing, and ceiling 
prices where applicable) of the item(s), or in the time of delivery, or 
both. Failure to agree to any such equitable adjustment hereunder will 
be a dispute concerning a question of fact within the meaning of the 
clause entitled ``Disputes.''
    (f) The Government may at any time prior to termination allot 
additional funds for the performance of the contract line item(s) 
identified in paragraph (a) of this clause.
    (g) The termination provisions of this clause do not limit the 
rights of the Government under the clause entitled ``Default.'' The 
provisions of this clause are limited to the work and allotment of funds 
for the contract line item(s) set forth in paragraph (a) of this clause. 
This clause no longer applies once the contract is fully funded except 
with regard to the rights or obligations of the parties concerning 
equitable adjustments negotiated under paragraphs (d) or (e) of this 
clause.
    (h) Nothing in this clause affects the right of the Government to 
terminate this contract pursuant to the clause of this contract entitled 
``Termination for Convenience of the Government.''
    (i) Nothing in this clause shall be construed as authorization of 
voluntary services whose acceptance is otherwise prohibited under 31 
U.S.C. 1342.
    (j) The parties contemplate that the Government will allot funds to 
this contract in accordance with the following schedule:
    On execution of contract $----
    (month) (day), (year) $----
    (month) (day), (year) $----
    (month) (day), (year) $----

                             (End of clause)

    Alternate I (MAY 2006). If only one line item will be incrementally 
funded, substitute the following paragraph (a) for paragraph (a) of the 
basic clause.

    (a) Contract line item ------ is incrementally funded. The sum of 
$------* is presently available for payment and allotted to this 
contract. An allotment schedule is contained in paragraph (j) of this 
clause.

    *To be inserted after negotiation.

[58 FR 46093, Sept. 1, 1993, as amended at 71 FR 18673, Apr. 12, 2006; 
71 FR 27644, May 12, 2006]

[[Page 425]]



Sec. 252.232-7008  Assignment of claims (overseas).

    As prescribed in 232.806(a)(1), use the following clause:

               Assignment of Claims (Overseas) (JUNE 1997)

    (a) No claims for monies due, or to become due, shall be assigned by 
the Contractor unless--
    (1) Approved in writing by the Contracting Officer;
    (2) Made in accordance with the laws and regulations of the United 
States of America; and
    (3) Permitted by the laws and regulations of the Contractor's 
country.
    (b) In no event shall copies of this contract of any plans, 
specifications, or other similar documents relating to work under this 
contract, if marked ``Top Secret,'' ``Secret,'' or ``Confidential'' be 
furnished to any assignee of any claim arising under this contract or to 
any other person not entitled to receive such documents. However, a copy 
of any part or all of this contract so marked may be furnished, or any 
information contained herein may be disclosed, to such assignee upon the 
Contracting Officer's prior written authorization.
    (c) Any assignment under this contract shall cover all amounts 
payable under this contract and not already paid, and shall not be made 
to more than one party, except that any such assignment may be made to 
one party as agent or trustee for two or more parties participating in 
such financing. On each invoice or voucher submitted for payment under 
this contract to which any assignment applies, and for which direct 
payment thereof is to be made to an assignee, the Contractor shall--
    (1) Identify the assignee by name and complete address; and
    (2) Acknowledge the validity of the assignment and the right of the 
named assignee to receive payment in the amount invoiced or vouchered.

                             (End of clause)

[62 FR 34134, June 24, 1997]



Sec. 252.232-7009  Mandatory payment by Governmentwide commercial 
          purchase card.

    As prescribed in 232.1110, use the following clause:

 Mandatory Payment by Governmentwide Commercial Purchase Card (JUL 2000)

    The Contractor agrees to accept the Governmentwide commercial 
purchase card as the method of payment for orders or calls valued at or 
below $2,500 under this contract or agreement.

                             (End of clause)

[65 FR 46626, July 31, 2000]



Sec. 252.232-7010  Levies on Contract Payments.

    As prescribed in 232.7102, use the following clause:

                 Levies on Contract Payments (SEPT 2005)

    (a) 26 U.S.C. 6331(h) authorizes the Internal Revenue Service (IRS) 
to continuously levy up to 100 percent of contract payments, up to the 
amount of tax debt.
    (b) When a levy is imposed on a payment under this contract and the 
levy will jeopardize contract performance, the Contractor shall promptly 
notify the Procuring Contracting Officer and provide--
    (1) The total dollar amount of the levy;
    (2) A statement that the levy will jeopardize contract performance, 
including rationale and adequate supporting documentation; and
    (3) Advice as to whether the inability to perform may adversely 
affect national security, including rationale and adequate supporting 
documentation.
    (c) DoD shall promptly review the Contractor's assessment and 
provide a notification to the Contractor including--
    (1) A statement as to whether DoD agrees that the levy jeopardizes 
contract performance; and
    (2) If the levy jeopardizes contract performance and the lack of 
performance will adversely affect national security, the total amount of 
the monies collected that should be returned to the Contractor; or
    (3) If the levy jeopardizes contract performance but will not impact 
national security, a recommendation that the Contractor promptly notify 
the IRS to attempt to resolve the tax situation.
    (d) Any DoD determination under this clause is not subject to appeal 
under the Contract Disputes Act.

                             (End of clause)

[70 FR 52032, Sept. 1, 2005]



Sec. 252.233-7000  [Reserved]



Sec. 252.233-7001  Choice of law (overseas).

    As prescribed in 233.215-70, use the following clause:

                  Choice of Law (Overseas) (JUNE 1997)

    This contract shall be construed and interpreted in accordance with 
the substantive laws of the United States of America. By the

[[Page 426]]

execution of this contract, the Contractor expressly agrees to waive any 
rights to invoke the jurisdiction of local national courts where this 
contract is performed and agrees to accept the exclusive jurisdiction of 
the United States Armed Services Board of Contract Appeals and the 
United States Court of Federal Claims for hearing and determination of 
any and all disputes that may arise under the Disputes clause of this 
contract.

                             (End of clause)

[62 FR 34135, June 24, 1997]



Sec. 252.235-7000  Indemnification under 10 U.S.C. 2354--fixed price.

    As prescribed in 235.070-3, use the following clause:

      Indemnification Under 10 U.S.C. 2354--Fixed Price (DEC 1991)

    (a) This clause provides for indemnification under 10 U.S.C. 2354 if 
the Contractor meets all the terms and conditions of this clause.
    (b) Claims, losses, and damages covered--
    (1) Claims by third persons for death, bodily injury, sickness, or 
disease, or the loss, damage, or lost use of property. Claims include 
those for reasonable expenses of litigation or settlement. The term 
third persons includes employees of the contractor;
    (2) The loss, damage, and lost use of the Contractor's property, but 
excluding lost profit; and
    (3) Loss, damage, or lost use of the Government's property.
    (c) The claim, loss, or damage--
    (1) Must arise from the direct performance of this contract;
    (2) Must not be compensated by insurance or other means, or be 
within deductible amounts of the Contractor's insurance;
    (3) Must result from an unusually hazardous risk as specifically 
defined in the contract;
    (4) Must not result from willful misconduct or lack of good faith on 
the part of any of the Contractor's directors or officers, managers, 
superintendents, or other equivalent representatives who have 
supervision or direction of--
    (i) All or substantially all of the Contractor's business;
    (ii) All or substantially all of the Contractor's operations at any 
one plant or separate location where this contract is being performed; 
or
    (iii) A separate and complete major industrial operation connected 
with the performance of this contract;
    (5) Must not be a liability assumed under any contract or agreement 
(except for subcontracts covered by paragraph (h) of this clause), 
unless the Contracting Officer (or in contracts with the Department of 
the Navy, the Department) specifically approved the assumption of 
liability; and
    (6) Must be certified as just and reasonable by the Secretary of the 
department or designated representative.
    (d) The Contractor shall buy and maintain, to the extent available, 
insurance against unusually hazardous risks in the form, amount, 
period(s) of time, at the rate(s), and with such insurers, as the 
Contracting Officer (or, for Navy contracts, the Department) may from 
time to time require and approve. If the cost of this insurance is 
higher than the cost of the insurance the Contractor had as of the date 
of the contract, the Government shall reimburse the Contractor for the 
difference in cost, as long as it is properly allocable to this contract 
and is not included in the contract price. The Government shall not be 
liable for claims, loss, or damage if insurance was available and is 
either required or approved under this paragraph.
    (e) A reduction of the insurance coverage maintained by the 
Contractor on the date of the execution of this contract shall not 
increase the Government's liability under this clause unless the 
Contracting Officer consents, and the contract price is equitably 
adjusted, if appropriate, to reflect the Contractor's consideration for 
the Government's assumption of increased liability.
    (f) Notice. The Contractor shall--
    (1) Promptly notify the Contracting Officer of any occurrence, 
action, or claim that might trigger the Government's liability under 
this clause;
    (2) Furnish the proof or evidence of any claim, loss, or damage in 
the form and manner that the Government requires; and
    (3) Immediately provide copies of all pertinent papers that the 
Contractor receives or has received.
    (g) The Government may direct, participate in, and supervise the 
settlement or defense of the claim or action. The Contractor shall 
comply with the Government's directions and execute any authorizations 
required.
    (h) Flowdown. The Government shall indemnify the Contractor if the 
Contractor has an obligation to indemnify a subcontractor under any 
subcontract at any tier under this contract for the unusually hazardous 
risk identified in this contract only if--
    (1) The Contracting Officer gave prior written approval for the 
Contractor to provide in a subcontract for the Contractor to indemnify 
the subcontractor for unusually hazardous risks defined in this 
contract;
    (2) The Contracting Officer approved those indemnification 
provisions;
    (3) The subcontract indemnification provisions entitle the 
Contractor, or the Government, or both, to direct, participate in, and 
supervise the settlement or defense of relevant actions and claims; and

[[Page 427]]

    (4) The subcontract provides the same rights and duties, the same 
provisions for notice, furnishing of papers and the like, between the 
Contractor and the subcontractor, as exist between the Government and 
the Contractor under this clause.
    (i) The Government may discharge its obligations under paragraph (h) 
of this clause by making payments directly to subcontractors or to 
persons to whom the subcontractors may be liable.
    (j) The rights and obligations of the parties under this clause 
shall survive the termination, expiration, or completion of this 
contract.

                             (End of clause)



Sec. 252.235-7001  Indemnification under 10 U.S.C. 2354--cost 
          reimbursement.

    As prescribed in 235.070-3, use the following clause:

   Indemnification Under 10 U.S.C. 2354--Cost Reimbursement (DEC 1991)

    (a) This clause provides for indemnification under 10 U.S.C. 2354 if 
the Contractor meets all the terms and conditions of this clause.
    (b) Claims, losses, and damages covered--
    (1) Claims by third persons for death, bodily injury, sickness, or 
disease, or the loss, damage, or lost use of property. Claims include 
those for reasonable expenses of litigation or settlement. The term 
``third persons'' includes employees of the Contractor;
    (2) The loss, damage, and lost use of the Contractor's property, but 
excluding lost profit; and
    (3) Loss, damage, or lost use of the Government's property.
    (c) The claim, loss, or damage--
    (1) Must arise from the direct performance of this contract;
    (2) Must not be compensated by insurance or other means, or be 
within deductible amounts of the Contractor's insurance;
    (3) Must result from an unusually hazardous risk as specifically 
defined in the contract;
    (4) Must not result from willful misconduct or lack of good faith on 
the part of any of the Contractor's directors or officers, managers, 
superintendents, or other equivalent representatives who have 
supervision or direction of--
    (i) All or substantially all of the Contractor's business;
    (ii) All or substantially all of the Contractor's operations at any 
one plant or separate location where this contract is being performed; 
or
    (iii) A separate and complete major industrial operation connected 
with the performance of this contract;
    (5) Must not be a liability assumed under any contract or agreement 
(except for subcontracts covered by paragraph (i) of this clause), 
unless the Contracting Officer (or in contracts with the Department of 
the Navy, the Department) specifically approved the assumption of 
liability; and
    (6) Must be certified as just and reasonable by the Secretary of the 
department or designated representative.
    (d) A reduction of the insurance coverage maintained by the 
Contractor on the date of the execution of this contract shall not 
increase the Government's liability under this clause unless the 
Contracting Officer consents, and the contract price is equitably 
adjusted, if appropriate, to reflect the Contractor's consideration for 
the Government's assumption of increased liability.
    (e) Notice. The Insurance--Liability to Third Persons clause of this 
contract applies also to claims under this clause. In addition, the 
Contractor shall--
    (1) Promptly notify the Contracting Officer of any occurrence, 
action, or claim that might trigger the Government's liability under 
this clause;
    (2) Furnish the proof or evidence of any claim, loss, or damage in 
the form and manner that the Government requires; and
    (3) Immediately provide copies of all pertinent papers that the 
contractor receives or has received.
    (f) The Government may direct, participate in, and supervise the 
settlement or defense of the claim or action. The Contractor shall 
comply with the Government's directions, and execute any authorizations 
required.
    (g) The Limitation of Cost clause of this contract does not apply to 
the Government's obligations under this clause. The obligations under 
this clause are excepted from the release required by the Allowable 
Cost, Fee, and Payment clause of this contract.
    (h) Under this clause, a claim, loss, or damage arises from the 
direct performance of this contract if the cause of the claim, loss, or 
damage occurred during the period of performance of this contract or as 
a result of the performance of this contract.
    (i) Flowdown. The Government shall indemnify the Contractor if the 
Contractor has an obligation to indemnify a subcontractor under any 
subcontract at any tier under this contract for the unusually hazardous 
risk identified in this contract only if--
    (1) The Contracting Officer gave prior written approval for the 
Contractor to provide in a subcontract for the Contractor to indemnify 
the subcontractor for unusually hazardous risks defined in this 
contract;
    (2) The Contracting Officer approved those indemnification 
provisions;
    (3) The subcontract indemnification provisions entitle the 
Contractor, or the Government, or both, to direct, participate in, and

[[Page 428]]

supervise the settlement or defense of relevant actions and claims; and
    (4) The subcontract provides the same rights and duties, the same 
provisions for notice, furnishing of paper and the like, between the 
Contractor and the subcontractor, as exist between the Government and 
the Contractor under this clause.
    (j) The Government may discharge its obligations under paragraph (i) 
of this clause by making payments directly to subcontractors or to 
persons to whom the subcontractors may be liable.
    (k) The rights and obligations of the parties under this clause 
shall survive the termination, expiration, or completion of this 
contract.

                             (End of clause)



Sec. 252.235-7002  Animal welfare.

    As prescribed in 235.071(a), use the following clause:

                        Animal Welfare (DEC 1991)

    (a) The Contractor shall register its research facility with the 
Secretary of Agriculture in accordance with 7 U.S.C. 2316 and 9 CFR 
subpart C, and Sec.  2.30, and furnish evidence of such registration to 
the Contracting Officer before beginning work under this contract.
    (b) The Contractor shall acquire animals only from dealers licensed 
by the Secretary of Agriculture under 7 U.S.C. 2133 and 9 CFR subpart A, 
Sec. Sec.  2.1 through 2.11, or from sources that are exempt from 
licensing under those sections.
    (c) The Contractor agrees that the care and use of animals will 
conform with the pertinent laws of the United States and regulations of 
the Department of Agriculture (see 7 U.S.C. 2131 et seq. and 9 CFR 
subchapter A, parts 1 through 4).
    (d) The Contracting Officer may immediately suspend, in whole or in 
part, work and further payments under this contract for failure to 
comply with the requirements of paragraphs (a) through (c) of this 
clause.
    (1) The suspension will stay in effect until the Contractor complies 
with the requirements.
    (2) Failure to complete corrective action within the time specified 
by the Contracting Officer may result in termination of this contract 
and removal of the Contractor's name from the list of contractors with 
approved Public Health Service Welfare Assurances.
    (e) The Contractor may request registration of its facility and a 
current listing of licensed dealers from the Regional Office of the 
Animal and Plant Health Inspection Service (APHIS), United States 
Department of Agriculture (USDA), for the region in which its research 
facility is located. The location of the appropriate APHIS regional 
office, as well as information concerning this program may be obtained 
by contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS, 
Federal Center Building, Hyattsville, MD 20782.
    (f) The Contractor shall include this clause, including this 
paragraph (f), in all subcontracts involving research of live vertebrate 
animals.

                             (End of clause)



Sec. 252.235-7003  Frequency authorization.

    As prescribed in 235.071(b), use the following clause:

                   Frequency Authorization (DEC 1991)

    (a) The Contractor shall obtain authorization for radio frequencies 
required in support of this contract.
    (b) For any experimental, developmental, or operational equipment 
for which the appropriate frequency allocation has not been made, the 
Contractor shall provide the technical operating characteristics of the 
proposed electromagnetic radiating device to the Contracting Officer 
during the initial planning, experimental, or developmental phase of 
contract performance.
    (c) The Contracting Officer shall furnish the procedures for 
obtaining radio frequency authorization.
    (d) The Contractor shall include this clause, including this 
paragraph (d), in all subcontracts requiring the development, 
production, construction, testing, or operation of a device for which a 
radio frequency authorization is required.

                             (End of clause)

    Alternate I (DEC 1991). Substitute the following paragraph (c) for 
paragraph (c) of the basic clause if agency procedures authorize use of 
DD Form 1494, Application for Frequency Authorization:

    (c) The Contractor shall use DD Form 1494, Application for Frequency 
Authorization, to obtain radio frequency authorization.



Sec. 252.235-7004--252.235-7009  [Reserved]



Sec. 252.235-7010  Acknowledgment of support and disclaimer.

    As prescribed in 235.071(c), use the following clause:

           Acknowledgment of Support and Disclaimer (MAY 1995)

    (a) The Contractor shall include an acknowledgment of the 
Government's support in the publication of any material based on

[[Page 429]]

or developed under this contract, stated in the following terms: This 
material is based upon work supported by the (name of contracting 
agency(ies)) under Contract No. (Contracting agency(ies) contract 
number(s)).
    (b) All material, except scientific articles or papers published in 
scientific journals, must, in addition to any notices or disclaimers by 
the Contractor, also contain the following disclaimer: Any opinions, 
findings and conclusions or recommendations expressed in this material 
are those of the author(s) and do not necessarily reflect the views of 
the (name of contracting agency(ies)).

                             (End of clause)

[60 FR 29503, June 5, 1995]



Sec. 252.235-7011  Final scientific or technical report.

    As prescribed in 235.071(d), use the following clause:

             Final Scientific or Tecnical Report (NOV 2004)

    The Contractor shall--
    (a) Submit two copies of the approved scientific or technical report 
delivered under this contract to the Defense Technical Information 
Center, Attn: DTIC-O, 8725 John J. Kingman Road, Fort Belvoir, VA 22060-
6218;
    (b) Include a completed Standard Form 298, Report Documentation 
Page, with each copy of the report; and
    (c) For submission of reports in other than paper copy, contact the 
Defense Technical Information Center or follow the instructions at 
http://www.dtic.mil.

                             (End of clause)

[69 FR 65092, Nov. 10, 2004]



Sec. 252.236-7000  Modification proposals--price breakdown.

    As prescribed in 236.570(a), use the following clause:

           Modification Proposals--Price Breakdown (DEC 1991)

    (a) The Contractor shall furnish a price breakdown, itemized as 
required and within the time specified by the Contracting Officer, with 
any proposal for a contract modification.
    (b) The price breakdown--
    (1) Must include sufficient detail to permit an analysis of profit, 
and of all costs for--
    (i) Material;
    (ii) Labor;
    (iii) Equipment;
    (iv) Subcontracts; and
    (v) Overhead; and
    (2) Must cover all work involved in the modification, whether the 
work was deleted, added, or changed.
    (c) The Contractor shall provide similar price breakdowns to support 
any amounts claimed for subcontracts.
    (d) The Contractor's proposal shall include a justification for any 
time extension proposed.

                             (End of clause)



Sec. 252.236-7001  Contract drawings and specifications.

    As prescribed in 236.570(a), use the following clause:

             Contract Drawings and Specifications (AUG 2000)

    (a) The Government will provide to the Contractor, without charge, 
one set of contract drawings and specifications, except publications 
incorporated into the technical provisions by reference, in electronic 
or paper media as chosen by the Contracting Officer.
    (b) The Contractor shall--
    (1) Check all drawings furnished immediately upon receipt;
    (2) Compare all drawings and verify the figures before laying out 
the work;
    (3) Promptly notify the Contracting Officer of any discrepancies;
    (4) Be responsible for any errors that might have been avoided by 
complying with this paragraph (b); and
    (5) Reproduce and print contract drawings and specifications as 
needed.
    (c) In general--
    (1) Large-scale drawings shall govern small-scale drawings; and
    (2) The Contractor shall follow figures marked on drawings in 
preference to scale measurements.
    (d) Omissions from the drawings or specifications or the 
misdescription of details of work that are manifestly necessary to carry 
out the intent of the drawings and specifications, or that are 
customarily performed, shall not relieve the Contractor from performing 
such omitted or misdescribed details of the work. The Contractor shall 
perform such details as if fully and correctly set forth and described 
in the drawings and specifications.
    (e) The work shall conform to the specifications and the contract 
drawings identified on the following index of drawings:

Title File Drawing No.

                             (End of clause)

[65 FR 50152, Aug. 17, 2000]

[[Page 430]]



Sec. 252.236-7002  Obstruction of navigable waterways.

    As prescribed in 236.570(b)(1), use the following clause:

              Obstruction of Navigable Waterways (DEC 1991)

    (a) The Contractor shall--
    (1) Promptly recover and remove any material, plant, machinery, or 
appliance which the contractor loses, dumps, throws overboard, sinks, or 
misplaces, and which, in the opinion of the Contracting Officer, may be 
dangerous to or obstruct navigation;
    (2) Give immediate notice, with description and locations of any 
such obstructions, to the Contracting Officer; and
    (3) When required by the Contracting Officer, mark or buoy such 
obstructions until the same are removed.
    (b) The Contracting Officer may--
    (1) Remove the obstructions by contract or otherwise should the 
Contractor refuse, neglect, or delay compliance with paragraph (a) of 
this clause; and
    (2) Deduct the cost of removal from any monies due or to become due 
to the Contractor; or
    (3) Recover the cost of removal under the Contractor's bond.
    (c) The Contractor's liability for the removal of a vessel wrecked 
or sunk without fault or negligence is limited to that provided in 
sections 15, 19, and 20 of the River and Harbor Act of March 3, 1899 (33 
U.S.C. 410 et seq.).

                             (End of clause)



Sec. 252.236-7003  Payment for mobilization and preparatory work.

    As prescribed in 236.570(b)(2), use the following clause:

        Payment for Mobilization and Preparatory Work (JAN 1997)

    (a) The Government will make payment to the Contractor under the 
procedures in this clause for mobilization and preparatory work under 
item no. ----------.
    (b) Payments will be made for actual payments by the Contractor on 
work preparatory to commencing actual work on the construction items for 
which payment is provided under the terms of this contract, as follows--
    (1) For construction plant and equipment exceeding $25,000 in value 
per unit (as appraised by the Contracting Officer at the work site) 
acquired for the execution of the work;
    (2) Transportation of all plant and equipment to the site;
    (3) Material purchased for the prosecution of the contract, but not 
to be incorporated in the work;
    (4) Construction of access roads or railroads, camps, trailer 
courts, mess halls, dormitories or living quarters, field headquarters 
facilities, and construction yards;
    (5) Personal services; and
    (6) Hire of plant.
    (c) Requests for payment must include--
    (1) An account of the Contractor's actual expenditures;
    (2) Supporting documentation, including receipted bills or copies of 
payrolls and freight bills; and
    (3) The Contractor's documentation--
    (i) Showing that it has acquired the construction plant, equipment, 
and material free from all encumbrances;
    (ii) Agreeing that the construction plant, equipment, and material 
will not be removed from the site without the written permission of the 
Contracting Officer; and
    (iii) Agreeing that structures and facilities prepared or erected 
for the prosecution of the contract work will be maintained and not 
dismantled prior to the completion and acceptance of the entire work, 
without the written permission of the Contracting Officer.
    (d) Upon receiving a request for payment, the Government will make 
payment, less any prescribed retained percentage, if--
    (1) The Contracting Officer finds the--
    (i) Construction plant, material, equipment, and the mobilization 
and preparatory work performed are suitable and necessary to the 
efficient prosecution of the contract; and
    (ii) Preparatory work has been done with proper economy and 
efficiency.
    (2) Payments for construction plant, equipment, material, and 
structures and facilities prepared or erected for prosecution of the 
contract work do not exceed--
    (i) The Contractor's cost for the work performed less the estimated 
value upon completion of the contract; and
    (ii) 100 percent of the cost to the contractor of any items having 
no appreciable salvage value; and
    (iii) 75 percent of the cost to the contractor of items which do 
have an appreciable salvage value.
    (e) (1) Payments will continue to be made for item no. --------, and 
all payments will be deducted from the contract price for this item, 
until the total deductions reduce this item to zero, after which no 
further payments will be made under this item.
    (2) If the total of payments so made does not reduce this item to 
zero, the balance will be paid to the Contractor in the final payment 
under the contract.
    (3) The retained percentage will be paid in accordance with the 
Payments to Contractor clause of this contract.

[[Page 431]]

    (f) The Contracting Officer shall determine the value and 
suitability of the construction plant, equipment, materials, structures 
and facilities. The Contracting Officer's determinations are not subject 
to appeal.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2614, Jan. 17, 1997]



Sec. 252.236-7004  Payment for mobilization and demobilization.

    As prescribed in 236.570(b)(2), use the following clause:

         Payment for Mobilization and Demobilization (DEC 1991)

    (a) The Government will pay all costs for the mobilization and 
demobilization of all of the Contractor's plant and equipment at the 
contract lump sum price for this item.
    (1) -------- percent of the lump sum price upon completion of the 
contractor's mobilization at the work site.
    (2) The remaining -------- percent upon completion of 
demobilization.
    (b) The Contracting Officer may require the Contractor to furnish 
cost data to justify this portion of the bid if the Contracting Officer 
believes that the percentages in paragraphs (a) (1) and (2) of this 
clause do not bear a reasonable relation to the cost of the work in this 
contract.
    (1) Failure to justify such price to the satisfaction of the 
Contracting Officer will result in payment, as determined by the 
Contracting Officer, of--
    (i) Actual mobilization costs at completion of mobilization;
    (ii) Actual demobilization costs at completion of demobilization; 
and
    (iii) The remainder of this item in the final payment under this 
contract.
    (2) The Contracting Officer's determination of the actual costs in 
paragraph (b)(1) of this clause is not subject to appeal.

                             (End of clause)



Sec. 252.236-7005  Airfield safety precautions.

    As prescribed in 236.570(b)(3), use the following clause. At some 
airfields, the width of the primary surface is 1,500 feet (750 feet on 
each side of the runway centerline). In such instances, substitute the 
proper width in the clause.

                 Airfield Safety Precautions (DEC 1991)

    (a) Definitions. As used in this clause--
    (1) Landing areas means--
    (i) The primary surfaces, comprising the surface of the runway, 
runway shoulders, and lateral safety zones. The length of each primary 
surface is the same as the runway length. The width of each primary 
surface is 2,000 feet (1,000 feet on each side of the runway 
centerline);
    (ii) The clear zone beyond the ends of each runway, i.e., the 
extension of the primary surface for a distance of 1,000 feet beyond 
each end of each runway;
    (iii) All taxiways, plus the lateral clearance zones along each side 
for the length of the taxiways (the outer edge of each lateral clearance 
zone is laterally 250 feet from the far or opposite edge of the taxiway, 
e.g., a 75-foot-wide taxiway would have a combined width of taxiway and 
lateral clearance zones of 425 feet); and
    (iv) All aircraft parking aprons, plus the area 125 feet in width 
extending beyond each edge all around the aprons.
    (2) Safety precaution areas means those portions of approach-
departure clearance zones and transitional zones where placement of 
objects incident to contract performance might result in vertical 
projections at or above the approach-departure clearance, or the 
transitional surface.
    (i) The approach-departure clearance surface is an extension of the 
primary surface and the clear zone at each end of each runway, for a 
distance of 50,000 feet, first along an inclined (glide angle) and then 
along a horizontal plane, both flaring symmetrically about the runway 
centerline extended.
    (A) The inclined plane (glide angle) begins in the clear zone 200 
feet past the end of the runway (and primary surface) at the same 
elevation as the end of the runway. It continues upward at a slope of 
50:1 (1 foot vertically for each 50 feet horizontally) to an elevation 
of 500 feet above the established airfield elevation. At that point the 
plane becomes horizontal, continuing at that same uniform elevation to a 
point 50,000 feet longitudinally from the beginning of the inclined 
plane (glide angle) and ending there.
    (B) The width of the surface at the beginning of the inclined plane 
(glide angle) is the same as the width of the clear zone. It then flares 
uniformly, reaching the maximum width of 16,000 feet at the end.
    (ii) The approach-departure clearance zone is the ground area under 
the approach-departure clearance surface.
    (iii) The transitional surface is a sideways extension of all 
primary surfaces, clear zones, and approach-departure clearance surfaces 
along inclined planes.
    (A) The inclined plane in each case begins at the edge of the 
surface.
    (B) The slope of the incline plane is 7:1 (1 foot vertically for 
each 7 feet horizontally). It continues to the point of intersection 
with the--
    (1) Inner horizontal surface (which is the horizontal plane 150 feet 
above the established airfield elevation); or

[[Page 432]]

    (2) Outer horizontal surface (which is the horizontal plane 500 feet 
above the established airfield elevation), whichever is applicable.
    (iv) The ``transitional zone'' is the ground area under the 
transitional surface. (It adjoins the primary surface, clear zone, and 
approach-departure clearance zone.)
    (b) General. (1) The Contractor shall comply with the requirements 
of this clause while--
    (i) Operating all ground equipment (mobile or stationary);
    (ii) Placing all materials; and
    (iii) Performing all work, upon and around all airfields.
    (2) The requirements of this clause are in addition to any other 
safety requirements of this contract.
    (c) The Contractor shall--
    (1) Report to the Contracting Officer before initiating any work;
    (2) Notify the Contracting Officer of proposed changes to locations 
and operations;
    (3) Not permit either its equipment or personnel to use any runway 
for purposes other than aircraft operation without permission of the 
Contracting Officer, unless the runway is--
    (i) Closed by order of the Contracting Officer; and
    (ii) Marked as provided in paragraph (d)(2) of this clause;
    (4) Keep all paved surfaces, such as runways, taxiways, and 
hardstands, clean at all times and, specifically, free from small stones 
which might damage aircraft propellers or jet aircraft;
    (5) Operate mobile equipment according to the safety provisions of 
this clause, while actually performing work on the airfield. At all 
other times, the Contractor shall remove all mobile equipment to 
locations--
    (i) Approved by the Contracting Officer;
    (ii) At a distance of at least 750 feet from the runway centerline, 
plus any additional distance; and
    (iii) Necessary to ensure compliance with the other provisions of 
this clause; and
    (6) Not open a trench unless material is on hand and ready for 
placing in the trench. As soon as practicable after material has been 
placed and work approved, the Contractor shall backfill and compact 
trenches as required by the contract. Meanwhile, all hazardous 
conditions shall be marked and lighted in accordance with the other 
provisions of this clause.
    (d) Landing areas. The Contractor shall--
    (1) Place nothing upon the landing areas without the authorization 
of the Contracting Officer;
    (2) Outline those landing areas hazardous to aircraft, using (unless 
otherwise authorized by the Contracting Officer) red flags by day, and 
electric, battery-operated low-intensity red flasher lights by night;
    (3) Obtain, at an airfield where flying is controlled, additional 
permission from the control tower operator every time before entering 
any landing area, unless the landing area is marked as hazardous in 
accordance with paragraph (d)(2) of this clause;
    (4) Identify all vehicles it operates in landing areas by means of a 
flag on a staff attached to, and flying above, the vehicle. The flag 
shall be three feet square, and consist of a checkered pattern of 
international orange and white squares of 1 foot on each side (except 
that the flag may vary up to ten percent from each of these dimensions);
    (5) Mark all other equipment and materials in the landing areas, 
using the same marking devices as in paragraph (d)(2) of this clause; 
and
    (6) Perform work so as to leave that portion of the landing area 
which is available to aircraft free from hazards, holes, piles of 
material, and projecting shoulders that might damage an airplane tire.
    (e) Safety precaution areas. The Contractor shall--
    (1) Place nothing upon the safety precaution areas without 
authorization of the Contracting Officer;
    (2) Mark all equipment and materials in safety precaution areas, 
using (unless otherwise authorized by the Contracting Officer) red flags 
by day, and electric, battery-operated, low-intensity red flasher lights 
by night; and
    (3) Provide all objects placed in safety precaution areas with a red 
light or red lantern at night, if the objects project above the 
approach-departure clearance surface or above the transitional surface.

                             (End of clause)



Sec. 252.236-7006  Cost limitation.

    As prescribed in 236.570(b)(4), use the following provision:

                       Cost Limitation (JAN 1997)

    (a) Certain items in this solicitation are subject to statutory cost 
limitations. The limitations are stated in the Schedule.
    (b) An offer which does not state separate prices for the items 
identified in the Schedule as subject to a cost limitation may be 
considered nonresponsive.
    (c) Prices stated in offers for items subject to cost limitations 
shall include an appropriate apportionment of all costs, direct and 
indirect, overhead, and profit.
    (d) Offers may be rejected which--
    (1) Are materially unbalanced for the purpose of bringing items 
within cost limitations; or
    (2) Exceed the cost limitations, unless the limitations have been 
waived by the Government prior to award.

[[Page 433]]

                           (End of provision)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2615, Jan. 17, 1997]



Sec. 252.236-7007  Additive or deductive items.

    As prescribed in 236.570(b)(5), use the following provision:

                 Additive or Deductive Items (DEC 1991)

    (a) The low offeror and the items to be awarded shall be determined 
as follows--
    (1) Prior to the opening of bids, the Government will determine the 
amount of funds available for the project.
    (2) The low offeror shall be the Offeror that--
    (i) Is otherwise eligible for award; and
    (ii) Offers the lowest aggregate amount for the first or base bid 
item, plus or minus (in the order stated in the list of priorities in 
the bid schedule) those additive or deductive items that provide the 
most features within the funds determined available.
    (3) The Contracting Officer shall evaluate all bids on the basis of 
the same additive or deductive items.
    (i) If adding another item from the bid schedule list of priorities 
would make the award exceed the available funds for all offerors, the 
Contracting Officer will skip that item and go to the next item from the 
bid schedule of priorities; and
    (ii) Add that next item if an award may be made that includes that 
item and is within the available funds.
    (b) The Contracting Officer will use the list of priorities in the 
bid schedule only to determine the low offeror. After determining the 
low offeror, an award may be made on any combination of items if--
    (1) It is in the best interest of the Government;
    (2) Funds are available at the time of award; and
    (3) The low offeror's price for the combination to be awarded is 
less than the price offered by any other responsive, responsible 
offeror.
    (c) Example. The amount available is $100,000. Offeror A's base bid 
and four additives (in the order stated in the list of priorities in the 
bid Schedule) are $85,000, $10,000, $8,000, $6,000, and $4,000. Offeror 
B's base bid and four additives are $80,000, $16,000, $9,000, $7,000, 
and $4,000. Offeror A is the low offeror. The aggregate amount of 
offeror A's bid for purposes of award would be $99,000, which includes a 
base bid plus the first and fourth additives. The second and third 
additives were skipped because each of them would cause the aggregate 
bid to exceed $100,000.

                           (End of provision)



Sec. 252.236-7008  Contract prices--bidding schedules.

    As prescribed in 236.570(b)(6), use the following provision:

              Contract Prices--Bidding Schedules (DEC 1991)

    (a) The Government's payment for the items listed in the Bidding 
Schedule shall constitute full compensation to the Contractor for--
    (1) Furnishing all plant, labor, equipment, appliances, and 
materials; and
    (2) Performing all operations required to complete the work in 
conformity with the drawings and specifications.
    (b) The Contractor shall include in the prices for the items listed 
in the Bidding Schedule all costs for work in the specifications, 
whether or not specifically listed in the Bidding Schedule.

                           (End of provision)



Sec. 252.236-7009  Option for supervision and inspection services.

    As prescribed in 236.609-70, use the following clause:

        Option for Supervision and Inspection Services (DEC 1991)

    (a) The Government may--
    (1) At its option, direct the Contractor to perform any part or all 
of the supervision and inspection services for the construction contract 
as provided under appendix A of this contract; and
    (2) Exercise its option, by written order, at any time prior to six 
months after satisfactory completion and acceptance of the work under 
this contract.
    (b) Upon receipt of the Contracting Officer's written order, the 
Contractor shall proceed with the supervision and inspection services.

                             (End of clause)



Sec. 252.236-7010  Overseas military construction--Preference for United 
          States firms.

    As prescribed in 236.570(c)(1), use the following provision:

Overseas Military Construction--Preference for United States Firms (JAN 
                                  1997)

    (a) Definition. ``United States firm,'' as used in this provision, 
means a firm incorporated in the United States that complies with the 
following:

[[Page 434]]

    (1) The corporate headquarters are in the United States;
    (2) The firm has filed corporate and employment tax returns in the 
United States for a minimum of 2 years (if required), has filed State 
and Federal income tax returns (if required) for 2 years, and has paid 
any taxes due as a result of these filings; and
    (3) The firm employs United States citizens in key management 
positions.
    (b) Evaluation. Offers from firms that do not qualify as United 
States firms will be evaluated by adding 20 percent to the offer.
    (c) Status. The offeror ------ is, ------ is not a United States 
firm.

                           (End of provision)

[62 FR 2857, Jan. 17, 1997, as amended at 63 FR 11549, Mar. 9, 1998]



Sec. 252.236-7011  Overseas architect-engineer services--Restriction to 
          United States firms.

    As prescribed in 236.609-70(b), use the following provision:

Overseas Architect-Engineer Services--Restriction to United States Firms 
                               (JAN 1997)

    (a) Definition. United States firm, as used in this provision, means 
a firm incorporated in the United States that complies with the 
following:
    (1) The corporate headquarters are in the United States;
    (2) The firm has filed corporate and employment tax returns in the 
United States for a minimum of 12 years (if required), has filed State 
and Federal income tax returns (if required) for 2 years, and has paid 
any taxes due as a result of these filings; and
    (3) The firm employs United States citizens in key management 
positions.
    (b) Restriction. Military construction appropriations acts restrict 
award of a contract, resulting from this solicitation, to a United 
States firm or a joint venture of United States and host nation firms.
    (c) Status. The offeror confirms, by submission of its offer, that 
it is a United States firm or a joint venture of United States and host 
nation firms.

                           (End of provision)

[62 FR 2858, Jan. 17, 1997]



Sec. 252.236-7012  Military construction on Kwajalein Atoll--evaluation 
          preference.

    As prescribed in 236.570(c)(2), use the following provision:

  Military Construction on Kwajalein Atoll--Evaluation Preference (MAR 
                                  1998)

    (a) Definitions. As used in this provision--
    (1) Marshallese firm means a local firm incorporated in the Marshall 
Islands, or otherwise legally organized under the laws of the Marshall 
Islands, that--
    (i) Is more than 50 percent owned by citizens of the Marshall 
Islands; or
    (ii) Complies with the following:
    (A) The firm has done business in the Marshall Islands on a 
continuing basis for not less than 3 years prior to the date of issuance 
of this solicitation;
    (B) Substantially all of the firm's directors of local operations, 
senior staff, and operating personnel are resident in the Marshall 
Islands or are U.S. citizens; and
    (C) Most of the operating equipment and physical plant are in the 
Marshall Islands.
    (2) United States firm means a firm incorporated in the United 
States that complies with the following:
    (i) The corporate headquarters are in the United States;
    (ii) The firm has filed corporate and employment tax returns in the 
United States for a minimum of 2 years (if required), has filed State 
and Federal income tax returns (if required) for 2 years, and has paid 
any taxes due as a result of these filings; and
    (iii) The firm employs United States citizens in key management 
positions.
    (b) Evaluation. Offers from firms that do not qualify as United 
States firms or Marshallese firms will be evaluated by adding 20 percent 
to the offer, unless application of the factor would not result in award 
to a United States firm.
    (c) Status. The offeror is -------- a United States firm; -------- a 
Marshallese firm; -------- Other.

                           (End of provision)

[63 FR 11549, Mar. 9, 1998]



Sec. 252.237-7000  Notice of special standards of responsibility.

    As prescribed in 237.270(d)(1), use the following provision:

        Notice of Special Standards of Responsibility (DEC 1991)

    (a) To be determined responsible, the Offeror must meet the general 
standards of responsibility set forth at FAR 9.104-1 and the following 
criteria, as described in Chapter 3, General Standards, of ``Government 
Auditing Standards.''
    (1) Qualifications;
    (2) Independence; and
    (3) Quality Control.
    (b) ``Government Auditing Standards'' is issued by the Comptroller 
General of the

[[Page 435]]

United States and is available for sale from the: Superintendent of 
Documents, U.S. Government Printing Office. Washington, DC 20401, Stock 
number 020-000-00243-3.
    (c) The apparently successful Offeror, before award, shall give the 
Contracting Officer evidence that it is licensed by the cognizant 
licensing authority in the state or other political jurisdiction where 
the Offeror operates its professional practice.

                           (End of provision)

[56 FR 36479, July 31, 1991, as amended at 66 FR 49861, Oct. 1, 2001]



Sec. 252.237-7001  Compliance with audit standards.

    As prescribed in 237.270(d)(2), use the following clause:

               Compliance With Audit Standards (MAY 2000)

    The Contractor, in performance of all audit services under this 
contract, shall comply with ``Government Auditing Standards'' issued by 
the Comptroller General of the United States.

                             (End of clause)

[65 FR 32041, May 22, 2000]



Sec. 252.237-7002  Award to single offeror.

    As prescribed in 237.7003(a), use the following provision:

                   Award to Single Offeror (DEC 1991)

    (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 (DEC 1991)

    As prescribed in 237.7003(a), substitute the following paragraph (d) 
for paragraph (d) of the basic provision:

    (d) Award will be made to that responsive, responsible offeror whose 
total aggregate offer is in the best interest of the Government.

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7003  Requirements.

    As prescribed in 237.7003(b), use the following clause:

                         Requirements (DEC 1991)

    (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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7004  Area of performance.

    As prescribed in 237.7003(b), use the following clause:

                     Area of Performance (DEC 1991)

    (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

[[Page 436]]

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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7005  Performance and delivery.

    As prescribed in 237.7003(b), use the following clause:

                   Performance and Delivery (DEC 1991)

    (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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7006  Subcontracting.

    As prescribed in 237.7003(b), use the following clause:

                        Subcontracting (DEC 1991)

    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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7007  Termination for default.

    As prescribed in 237.7003(b), use the following clause:

                   Termination for Default (DEC 1991)

    (a) This clause supplements and is in addition to the Default clause 
of this contract.
    (b) The Contracting Officer may terminate this contract for default 
by written notice without the ten day notice required by paragraph 
(a)(2) of the Default clause if--
    (1) The Contractor, through circumstances reasonably within its 
control or that of its employees, performs any act under or in 
connection with this contract, or fails in the performance of any 
service under this contract and the act or failures may reasonably be 
considered to reflect discredit upon the Department of Defense in 
fulfilling its responsibility for proper care of remains;
    (2) The Contractor, or its employees, solicits relatives or friends 
of the deceased to purchase supplies or services not under this 
contract. (The Contractor may furnish supplies or arrange for services 
not under this contract, only if representatives of the deceased 
voluntarily request, select, and pay for them.);
    (3) The services or any part of the services are performed by anyone 
other than the Contractor or the Contractor's employees without the 
written authorization of the Contracting Officer;
    (4) The Contractor refuses to perform the services required for any 
particular remains; or
    (5) The Contractor mentions or otherwise uses this contract in its 
advertising in any way.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7008  Group interment.

    As prescribed in 237.7003(b), use the following clause:

                       Group Interment (DEC 1991)

    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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]

[[Page 437]]



Sec. 252.237-7009  Permits.

    As prescribed in 237.7003(b), use the following clause:

                           Permits (DEC 1991)

    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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7010  [Reserved]



Sec. 252.237-7011  Preparation history.

    As prescribed in 237.7003(b), use the following clause:

                     Preparation History (DEC 1991)

    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)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7012  Instruction to offerors (count-of-articles).

    As prescribed in 237.7101(a), use the following provision:

         Instruction to Offerors (Count-of-Articles) (DEC 1991)

    (a) The Offeror shall include unit prices for each item in a lot. 
Unit prices shall include all costs to the Government of providing the 
services, including pickup and delivery charges.
    (b) Failure to offer on any item in a lot shall be cause for 
rejection of the offer on that lot. The Contracting Officer will 
evaluate offers based on the estimated quantities in the solicitation.
    (c) Award generally will be made to a single offeror for all lots. 
However, the Contracting Officer may award by individual lot when it is 
more advantageous to the Government.
    (d) Prospective offerors may inspect the types of articles to be 
serviced. Contact the Contracting Officer to make inspection 
arrangements.

                           (End of provision)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7013  Instruction to offerors (bulk weight).

    As prescribed in 237.7101(b), use the following provision:

            Instruction to Offerors (Bulk Weight) (DEC 1991)

    (a) Offers shall be submitted on a unit price per pound of serviced 
laundry. Unit prices shall include all costs to the Government of 
providing the service, including pickup and delivery charges.
    (b) The Contracting Officer will evaluate bids based on the 
estimated pounds of serviced laundry stated in the solicitation.
    (c) Award generally will be made to a single offeror for all lots. 
However, the Contracting Officer may award by individual lot when it is 
more advantageous to the Government.
    (d) Prospective offerors may inspect the types of articles to be 
serviced. Contact the Contracting Officer to make inspection 
arrangements.

                           (End of provision)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7014  Loss or damage (count-of-articles).

    As prescribed in 237.7101(c), use the following clause:

              Loss or Damage (Count-of-Articles) (DEC 1991)

    (a) The count-of-articles will be--
    (1) The count of the Contracting Officer; or
    (2) The count agreed upon as a result of a joint count by the 
Contractor and the Contracting Officer at the time of delivery to the 
Contractor.
    (b) The Contractor shall--
    (1) Be liable for return of the number and kind of articles 
furnished for service under this contract; and
    (2) Shall indemnify the Government for any loss or damage to such 
articles.
    (c) The Contractor shall pay to the Government the value of any lost 
or damaged property using Federal supply schedule price lists. If the 
property is not on these price lists, the Contracting Officer shall 
determine a fair and reasonable price.
    (d) The Contracting Officer will allow credit for any depreciation 
in the value of the property at the time of loss or damage. The 
Contracting Officer and the Contractor shall

[[Page 438]]

mutually determine the amount of the allowable credit.
    (e) Failure to agree upon the value of the property or on the amount 
of credit due will be treated as a dispute under the Disputes clause of 
this contract.
    (f) In case of damage to any property that the Contracting Officer 
and the Contractor agree can be satisfactorily repaired, the Contractor 
may repair the property at its expense in a manner satisfactory to the 
Contracting Officer, rather than make payment under paragraph (c) of 
this clause.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7015  Loss or damage (weight of articles).

    As prescribed in 237.7101(d), use the following clause:

             Loss or Damage (Weight of Articles) (DEC 1991)

    (a) The Contractor shall--
    (1) Be liable for return of the articles furnished for service under 
this contract; and
    (2) Indemnify the Government for any articles delivered to the 
Contractor for servicing under this contract that are lost or damaged, 
and in the opinion of the Contracting Officer, cannot be repaired 
satisfactorily.
    (b) The Contractor shall pay to the Government -------- per pound 
for lost or damaged articles. The Contractor shall pay the Government 
only for losses which exceed the maximum weight loss in paragraph (e) of 
this clause.
    (c) Failure to agree on the amount of credit due will be treated as 
a dispute under the Disputes clause of this contract.
    (d) In the case of damage to any articles that the Contracting 
Officer and the Contractor agree can be satisfactorily repaired, the 
Contractor shall repair the articles at its expense in a manner 
satisfactory to the Contracting Officer.
    (e) The maximum weight loss allowable in servicing the laundry is --
------ percent of the weight recorded on delivery tickets when the 
laundry is picked up. Any weight loss in excess of this amount shall be 
subject to the loss provisions of this clause.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7016  Delivery tickets.

    As prescribed in 237.7101(e), use the following clause:

                       Delivery Tickets (DEC 1991)

    (a) The Contractor shall complete delivery tickets in the number of 
copies required and in the form approved by the Contracting Officer, 
when it receives the articles to be serviced.
    (b) The Contractor shall include one copy of each delivery ticket 
with its invoice for payment.

                             (End of clause)

    Alternate I (DEC 1991). As prescribed in 237.7101(e)(1), add the 
following paragraphs (c), (d), and (e) to the basic clause:

    (c) Before the Contractor picks up articles for service under this 
contract, the Contracting Officer will ensure that--
    (1) Each bag contains only articles within a single bag type as 
specified in the schedule; and
    (2) Each bag is weighed and the weight and bag type are identified 
on the bag.
    (d) The Contractor shall, at time of pickup--
    (1) Verify the weight and bag type and record them on the delivery 
ticket; and
    (2) Provide the Contracting Officer, or representative, a copy of 
the delivery ticket.
    (e) At the time of delivery, the Contractor shall record the weight 
and bag type of serviced laundry on the delivery ticket. The Contracting 
Officer will ensure that this weight and bag type are verified at time 
of delivery.

    Alternate II (DEC 1991). As prescribed in 237.7101(e)(2), add the 
following paragraphs (c), (d), and (e) to the basic clause--

    (c) Before the Contractor picks up articles for service under this 
contract, the Contracting Officer will ensure that each bag is weighed 
and that the weight is identified on the bag.
    (d) The Contractor, at time of pickup, shall verify and record the 
weight on the delivery ticket and shall provide the Contracting Officer, 
or representative, a copy of the delivery ticket.
    (e) At the time of delivery, the Contractor shall record the weight 
of serviced laundry on the delivery ticket. The Contracting Officer will 
ensure that this weight is verified at time of delivery.

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7017  Individual laundry.

    As prescribed in 237.7101(f), use the following clause:

[[Page 439]]

                      Individual Laundry (DEC 1991)

    (a) The Contractor shall provide laundry service under this contract 
on both a unit bundle and on a piece-rate bundle basis for individual 
personnel.
    (b) The total number of pieces listed in the ``Estimated Quantity'' 
column in the schedule is the estimated amount of individual laundry for 
this contract. The estimate is for information only and is not a 
representation of the amount of individual laundry to be ordered. 
Individuals may elect whether or not to use the laundry services.
    (c) Charges for individual laundry will be on a per unit bundle or a 
piece-rate basis. The Contractor shall provide individual laundry bundle 
delivery tickets for use by the individuals in designating whether the 
laundry is a unit bundle or a piece-rate bundle. An individual laundry 
bundle will be accompanied by a delivery ticket listing the contents of 
the bundle.
    (d) The maximum number of pieces to be allowed per bundle is as 
specified in the schedule and as follows--
    (1) Bundle consisting of 26 pieces, including laundry bag. This 
bundle will contain approximately -------- pieces of outer garments 
which shall be starched and pressed. Outer garments include, but are not 
limited to, shirts, trousers, jackets, dresses, and coats.
    (2) Bundle consisting of 13 pieces, including laundry bag. This 
bundle will contain approximately -------- pieces of outer garments 
which shall be starched and pressed. Outer garments include, but are not 
limited to, shirts, trousers, jackets, dresses, and coats.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7018  Special definitions of Government property.

    As prescribed in 237.7101(g), use the following clause:

          Special Definitions of Government Property (DEC 1991)

    Articles delivered to the Contractor to be laundered or dry-cleaned, 
including any articles which are actually owned by individual Government 
personnel, are Government-owned property, not Government-furnished 
property. Government-owned property does not fall under the requirements 
of any Government-furnished property clause of this contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 71 FR 3416, Jan. 23, 2006]



Sec. 252.237-7019  Training for Contractor Personnel Interacting with 
          Detainees.

    As prescribed in 237.171-4, use the following clause:

Training for Contractor Personnel Interacting With Detainees (SEPT 2006)

    (a) Definitions. As used in this clause--
    Combatant Commander means the commander of a unified or specified 
combatant command established in accordance with 10 U.S.C. 161.
    Detainee means a person in the custody or under the physical control 
of the Department of Defense on behalf of the United States Government 
as a result of armed conflict or other military operation by United 
States armed forces.
    Personnel interacting with detainees means personnel who, in the 
course of their duties, are expected to interact with detainees.
    (b) Training requirement. This clause implements Section 1092 of the 
National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-
375).
    (1) The Combatant Commander responsible for the area where a 
detention or interrogation facility is located will arrange for training 
to be provided to contractor personnel interacting with detainees. The 
training will address the international obligations and laws of the 
United States applicable to the detention of personnel, including the 
Geneva Conventions. The Combatant Commander will arrange for a training 
receipt document to be provided to personnel who have completed the 
training.
    (2)(i) The Contractor shall arrange for its personnel interacting 
with detainees to--
    (A) Receive the training specified in paragraph (b)(1) of this 
clause--
    (1) Prior to interacting with detainees, or as soon as possible if, 
for compelling reasons, the Contracting Officer authorizes interaction 
with detainees prior to receipt of such training; and
    (2) Annually thereafter; and
    (B) Provide a copy of the training receipt document specified in 
paragraph (b)(1) of this clause to the Contractor for retention.
    (ii) To make these arrangements, the following points of contact 
apply:
    [Contracting Officer to insert applicable point of contact 
information cited in PGI 237.171-3(b).]
    (3) The Contractor shall retain a copy of the training receipt 
document(s) provided in accordance with paragraphs (b)(1) and (2) of 
this clause until the contract is closed, or 3

[[Page 440]]

years after all work required by the contract has been completed and 
accepted by the Government, whichever is sooner.
    (c) Subcontracts. The Contractor shall include the substance of this 
clause, including this paragraph (c), in all subcontracts that may 
require subcontractor personnel to interact with detainees in the course 
of their duties.

                             (End of clause)

[70 FR 52034, Sept. 1, 2005, as amended at 71 FR 53049, Sept. 8, 2006]



Sec. 252.237-7020--252.237-7021  [Reserved]



Sec. 252.237-7022  Services at installations being closed.

    As prescribed in 237.7402, use the following clause:

            Services at Installations Being Closed (MAY 1995)

    Professional employees shall be used by the local government to 
provide services under this contract to the extent that professionals 
are available in the area under the jurisdiction of such government.

                             (End of clause)

[59 FR 36090, July 15, 1994, as amended at 60 FR 29503, June 5, 1995]



Sec. 252.239-7000  Protection against compromising emanations.

    As prescribed in 239.7103, use the following clause:

          Protection Against Compromising Emanations (JUN 2004)

    (a) The Contractor shall provide or use only information technology, 
as specified by the Government, that has been accredited to meet the 
appropriate information assurance requirements of--
    (1) The National Security Agency National TEMPEST Standards (NACSEM 
No. 5100 or NACSEM No. 5100A, Compromising Emanations Laboratory Test 
Standard, Electromagnetics (U)); or
    (2) Other standards specified by this contract, including the date 
through which the required accreditation is current or valid for the 
contract.
    (b) Upon request of the Contracting Officer, the Contractor shall 
provide documentation supporting the accreditation.
    (c) The Government may, as part of its inspection and acceptance, 
conduct additional tests to ensure that information technology delivered 
under this contract satisfies the information assurance standards 
specified. The Government may conduct additional tests--
    (1) At the installation site or contractor's facility; and
    (2) Notwithstanding the existence of valid accreditations of 
information technology prior to the award of this contract.
    (d) Unless otherwise provided in this contract under the Warranty of 
Supplies or Warranty of Systems and Equipment clause, the Contractor 
shall correct or replace accepted information technology found to be 
deficient within 1 year after proper installations.
    (1) The correction or replacement shall be at no cost to the 
Government.
    (2) Should a modification to the delivered information technology be 
made by the Contractor, the 1-year period applies to the modification 
upon its proper installation.
    (3) This paragraph (d) applies regardless of f.o.b. point or the 
point of acceptance of the deficient information technology.

                             (End of clause)

[69 FR 35535, June 25, 2004]



Sec. 252.239-7001  [Reserved]



Sec. 252.239-7002  Access.

    As prescribed in 239.7411(a), use the following clause:

                            Access (DEC 1991)

    (a) Subject to military security regulations, the Government shall 
permit the Contractor access at all reasonable times to Contractor 
furnished facilities. However, if the Government is unable to permit 
access, the Government at its own risk and expense shall maintain these 
facilities and the Contractor shall not be responsible for the service 
involving any of these facilities during the period of nonaccess, unless 
the service failure results from the Contractor's fault or negligence.
    (b) During periods when the Government does not permit Contractor 
access, the Government will reimburse the Contractor at mutually 
acceptable rates for the loss of or damage to the equipment due to the 
fault or negligence of the Government. Failure to agree shall be a 
dispute concerning a question of fact within the meaning of the Disputes 
clause of this contract.

                             (End of clause)



Sec. 252.239-7003  [Reserved]



Sec. 252.239-7004  Orders for facilities and services.

    As prescribed in 239.7411(a), use the following clause:

[[Page 441]]

              Orders for Facilities and Services (NOV 2005)

    The Contractor shall acknowledge a communication service 
authorization or other type order for supplies and facilities by--
    (a) Commencing performance; or
    (b) Written acceptance by a duly authorized representative.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 70 FR 67919, Nov. 9, 2005]



Sec. 252.239-7005  Rates, charges, and services.

    As prescribed in 239.7411(a), use the following clause:

                 Rates, Charges, and Services (NOV 2005)

    (a) Definition--Governmental regulatory body means the Federal 
Communications Commission, any statewide regulatory body, or any body 
with less than statewide jurisdiction when operating under the state 
authority. Regulatory bodies whose decisions are not subject to judicial 
appeal and regulatory bodies which regulate a company owned by the same 
entity which creates the regulatory body are not ``governmental 
regulatory bodies.''
    (b) The Contractor shall furnish the services and facilities under 
this agreement/contract in accordance with--
    (1) All applicable tariffs, rates, charges, rules, regulations, or 
requirements;
    (i) Lawfully established by a governmental regulatory body; and
    (ii) Applicable to service and facilities furnished or offered by 
the Contractor to the general public or the Contractor's subscribers;
    (2) Rates, terms, and conditions of service and facilities furnished 
or offered by the Contractor to the general public or the Contractor's 
subscribers; or
    (3) Rates, terms, and conditions of service as may be agreed upon, 
subject, when appropriate, to jurisdiction of a governmental regulatory 
body.
    (c) The Government shall not prepay for services.
    (d) For nontariffed services, the Contractor shall charge the 
Government at the lowest rate and under the most favorable terms and 
conditions for similar service and facilities offered to any other 
customer.
    (e) Recurring charges for services and facilities shall, in each 
case, start with the satisfactory beginning of service or provision of 
facilities or equipment and are payable monthly in arrears.
    (f) Subject to the Cancellation or Termination of Orders clause, of 
this agreement/contract, the Government may stop the use of any service 
or facilities furnished under this agreement/contract at any time. The 
Government shall pay the contractor all charges for services and 
facilities adjusted to the effective date of discontinuance.
    (g) Expediting charges are costs necessary to get services earlier 
than normal. Examples are overtime pay or special shipment. When 
authorized, expediting charges shall be the additional costs incurred by 
the Contractor and the subcontractor. The Government shall pay 
expediting charges only when--
    (1) They are provided for in the tariff established by a 
governmental regulatory body; or
    (2) They are authorized in a communication service authorization or 
other contractual document.
    (h) When services normally provided are technically unacceptable and 
the development, fabrication, or manufacture of special equipment is 
required, the Government may--
    (1) Provide the equipment; or
    (2) Direct the Contractor to acquire the equipment or facilities. If 
the Contractor acquires the equipment or facilities, the acquisition 
shall be competitive, if practicable.
    (i) If at any time the Government defers or changes its orders for 
any of the services but does not cancel or terminate them, the amount 
paid or payable to the Contractor for the services deferred or modified 
shall be equitably adjusted under applicable tariffs filed by the 
Contractor with the regulatory commission in effect at the time of 
deferral or change. If no tariffs are in effect, the Government and the 
Contractor shall equitably adjust the rates by mutual agreement. Failure 
to agree on any adjustment shall be a dispute concerning a question of 
fact within the meaning of the Disputes clause of this contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 70 FR 67919, Nov. 9, 2005]



Sec. 252.239-7006  Tariff information.

    As prescribed in 239.7411(a), use the following clause:

                      Tariff Information (JUL 1997)

    (a) The Contractor shall provide to the Contracting Officer--
    (1) Upon request, a copy of the Contractor's current existing 
tariffs (including changes);
    (2) Before filing, any application to a Federal, State, or any other 
regulatory agency for new or changes to, rates, charges, services, or 
regulations relating to any tariff or

[[Page 442]]

any of the facilities or services to be furnished solely or primarily to 
the Government; and
    (3) Upon request, a copy of all information, material, and data 
developed or prepared in support of or in connection with an application 
under paragraph (a)(2) of this clause.
    (b) The Contractor shall notify the Contracting Officer of any 
application that anyone other than the Contractor files with a 
governmental regulatory body which affects or will affect the rate or 
conditions of services under this agreement/contract. These requirements 
also apply to applications pending on the effective date of this 
agreement/contract.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 40473, July 29, 1997]



Sec. 252.239-7007  Cancellation or termination of orders.

    As prescribed in 239.7411(a), use the following clause:

            Cancellation or Termination of Orders (NOV 2005)

    (a) If the Government cancels any of the services ordered under this 
agreement/contract, before the services are made available to the 
Government, or terminates any of these services after they are made 
available to the Government, the Government shall reimburse the 
Contractor for the actual nonrecoverable costs the Contractor has 
reasonably incurred in providing facilities and equipment for which the 
Contractor has no foreseeable reuse.
    (b) The amount of the Government's liability upon cancellation or 
termination of any of the services ordered under this agreement/contract 
will be determined under applicable tariffs governing cancellation and 
termination charges which--
    (1) Are filed by the Contractor with a governmental regulatory body, 
as defined in the Rates, Charges, and Services clause of this agreement/
contract;
    (2) Are in effect on the date of termination; and
    (3) Provide specific cancellation or termination charges for the 
facilities and equipment involved or show how to determine the charges.
    (c) The amount of the Government's liability upon cancellation or 
termination of any of the services ordered under this agreement/
contract, which are not subject to a governmental regulatory body, will 
be determined under a mutually agreed schedule in the communication 
services authorization (CSA) or other contractual document.
    (d) If no applicable tariffs are in effect on the date of 
cancellation or termination or set forth in the applicable CSA or other 
contractual document, the Government's liability will be determined 
under the following settlement procedures--
    (1) The Contractor agrees to provide the Contracting Officer, in 
such reasonable detail as the Contracting Officer may require, inventory 
schedules covering all items of property or facilities in the 
Contractor's possession, the cost of which is included in the Basic 
Cancellation or Termination Liability for which the Contractor has no 
foreseeable reuse.
    (2) The Contractor shall use its best efforts to sell property or 
facilities when the Contractor has no foreseeable reuse or when the 
Government has not exercised its option to take title under the title to 
Telecommunications Facilities and Equipment clause of this agreement/
contract. The Contractor shall apply any proceeds of the sale to reduce 
any payments by the Government to the Contractor under a cancellation or 
termination settlement.
    (3) The Contractor shall record actual nonrecoverable costs under 
established accounting procedures prescribed by the cognizant 
governmental regulatory authority or, if no such procedures have been 
prescribed, under generally accepted accounting procedures applicable to 
the provision of telecommunication services for public use.
    (4) The actual nonrecoverable costs are the installed costs of the 
facilities and equipment, less cost of reusable materials, and less net 
salvage value. Installed costs shall include the actual cost of 
equipment and materials specifically provided or used, plus the actual 
cost of installing (including engineering, labor, supervision, 
transportation, rights-of-way, and any other items which are chargeable 
to the capital accounts of the Contractor) less any costs the Government 
may have directly reimbursed the Contractor under the Special 
Construction and Equipment Charges clause of this agreement/contract. 
Deduct from the Contractor's installed cost, the net salvage value 
(salvage value less cost of removal). In determining net salvage value, 
give consideration to foreseeable reuse of the facilities and equipment 
by the Contractor. Make allowance for the cost of dismantling, removal, 
reconditioning, and disposal of the facilities and equipment when 
necessary either to the sale of facilities or their reuse by the 
Contractor in another location.
    (5) The Basic Cancellation Liability is defined as the actual 
nonrecoverable cost which the Government shall reimburse the Contractor 
at the time services are cancelled. The Basic Termination Liability is 
defined as the nonrecoverable cost amortized in equal monthly increments 
throughout the liability period. Upon termination of services, the 
Government shall reimburse the Contractor for the nonrecoverable cost 
less

[[Page 443]]

such costs amortized to the date services are terminated. Establish the 
liability period as mutually agreed to but not to exceed ten years.
    (6) When the Basic Cancellation or Termination Liability established 
by the CSA or other contractual document is based on estimated costs, 
the Contractor agrees to settle on the basis of actual cost at the time 
of termination or cancellation.
    (7) The Contractor agrees that, if after settlement but within the 
termination liability period of the services, should the Contractor make 
reuse of equipment or facilities which were treated as nonreusable or 
nonsalvagable in the settlement, the Contractor shall reimburse the 
Government for the value of the equipment or facilities.
    (8) The Contractor agrees to exclude--
    (i) Any costs which are not included in determining cancellation and 
termination charges under the Contractor's standard practices or 
procedures; and
    (ii) Charges not ordinarily made by the Contractor for similar 
facilities or equipment, furnished under similar circumstances.
    (e) The Government may, under such terms and conditions as it may 
prescribe, make partial payments and payments on account against costs 
incurred by the Contractor in connection with the canceled or terminated 
portion of this agreement/contract. The Government may make these 
payments if in the opinion of the Contracting Officer the total of the 
payments is within the amount the Contractor is entitled. If the total 
of the payments is in excess of the amount finally agreed or determined 
to be due under this clause, the Contractor shall pay the excess to the 
Government upon demand.
    (f) Failure to agree shall be a dispute concerning a question of 
fact within the meaning of the Disputes clause.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2615, Jan. 17, 1997; 70 
FR 67919, Nov. 9, 2005]



Sec. 252.239-7008  Reuse arrangements.

    As prescribed in 239.7411(a), use the following clause:

                      Reuse Arrangements (DEC 1991)

    (a) When feasible, the Contractor shall reuse canceled or terminated 
facilities or equipment to minimize the charges to the Government.
    (b) If at any time the Government requires that telecommunications 
facilities or equipment be relocated within the Contractor's service 
area, the Government shall have the option of paying the costs of 
relocating the facilities or equipment in lieu of paying any termination 
or cancellation charge under the Cancellation or Termination of Orders-
Common Carriers clause of this agreement/contract. The Basic Termination 
Liability applicable to the facilities or equipment in their former 
location shall continue to apply to the facilities and equipment in 
their new location. Monthly rental charges shall continue to be paid 
during the period.
    (c) When there is another requirement or foreseeable reuse in place 
of canceled or terminated facilities or equipment, no charge shall apply 
and the Basic Cancellation or Termination Liability shall be 
appropriately reduced. When feasible, the Contractor shall promptly 
reuse discontinued channels or facilities, including equipment for which 
the Government is obligated to pay a minimum service charge.

                             (End of clause)



Sec. 252.239-7009--252.239-7010  [Reserved]



Sec. 252.239-7011  Special construction and equipment charges.

    As prescribed in 239.7411(b), use the following clause:

          Special Construction and Equipment Charges (DEC 1991)

    (a) The Government will not directly reimburse the Contractor for 
the cost of constructing any facilities or providing any equipment, 
unless the Contracting Officer authorizes direct reimbursement.
    (b) If the Contractor stops using facilities or equipment which the 
Government has, in whole or part, directly reimbursed, the Contractor 
shall allow the Government credit for the value of the facilities or 
equipment attributable to the Government's contribution. Determine the 
value of the facilities and equipment on the basis of their foreseeable 
reuse by the Contractor at the time their use is discontinued or on the 
basis of the net salvage value, whichever is greater. The Contractor 
shall promptly pay the Government the amount of any credit.
    (c) The amount of the direct special construction charge shall not 
exceed--
    (1) The actual costs to the Contractor; and
    (2) An amount properly allocable to the services to be provided to 
the Government.
    (d) The amount of the direct special construction charge shall not 
include costs incurred by the Contractor which are covered by--
    (1) A cancellation or termination liability; or
    (2) The Contractor's recurring or other nonrecurring charges.
    (e) The Contractor represents that--
    (1) Recurring charges for the services, facilities, and equipment do 
not include in the

[[Page 444]]

rate base any costs that have been reimbursed by the Government to the 
Contractor; and
    (2) Depreciation charges are based only on the cost of facilities 
and equipment paid by the Contractor and not reimbursed by the 
Government.
    (f) If it becomes necessary for the Contractor to incur costs to 
replace any facilities or equipment, the Government shall assume those 
costs or reimburse the Contractor for replacement costs at mutually 
acceptable rates under the following circumstances--
    (1) The Government paid direct special construction charges; or
    (2) The Government reimbursed the Contractor for those facilities or 
equipment as a part of the recurring charges; and
    (3) The need for replacement was due to circumstances beyond the 
control and without the fault of the Contractor.
    (g) Before incurring any costs under paragraph (f) of this clause, 
the Government shall have the right to terminate the service under the 
Cancellation or Termination of Orders clause of this contract.

                             (End of clause)



Sec. 252.239-7012  Title to telecommunication facilities and equipment.

    As prescribed in 239.7411(b), use the following clause:

     Title to Telecommunication Facilities and Equipment (DEC 1991)

    (a) Title to all Contractor furnished facilities and equipment used 
under this agreement/contract shall remain with the Contractor even if 
the Government paid the costs of constructing the facilities or 
equipment. A mutually accepted communications service authorization may 
provide for exceptions.
    (b) The Contractor shall operate and maintain all telecommunication 
facilities and equipment used under this agreement/contract whether the 
Government or the Contractor has title.

                             (End of clause)



Sec. 252.239-7013  Obligation of the Government.

    As prescribed in 239.7411(c), use the following clause:

                 Obligation of the Government (JUL 2006)

    (a) This basic agreement is not a contract. The Government incurs no 
monetary liability under this agreement.
    (b) The Government incurs liability only upon issuance of a 
communication service authorization, which is the contract and 
incorporates the terms of this agreement.

                             (End of clause)

[71 FR 39011, July 11, 2006]



Sec. 252.239-7014  Term of agreement.

    As prescribed in 239.7411(c), use the following clause:

                      Term of Agreement (DEC 1991)

    (a) This agreement shall continue in force from year to year, unless 
terminated by either party by 60 days written notice.
    (b) Termination of this agreement does not cancel any communication 
service authorizations previously issued.

                             (End of clause)



Sec. 252.239-7015  Continuation of communication service authorizations.

    As prescribed in 239.7411(c), use the following clause:

     Continuation of Communication Service Authorizations (JUL 2006)

    (a) All communication service authorizations issued by------
incorporating Basic Agreement Number ------, dated ------, are modified 
to incorporate this basic agreement.
    (b) Communication service authorizations currently in effect which 
were issued by the activity in paragraph (a) of this clause 
incorporating other agreements with the Contractor may also be modified 
to incorporate this agreement.
    (c) This basic agreement is not a contract.

                             (End of clause)

[71 FR 39011, July 11, 2006]



Sec. 252.239-7016  Telecommunications security equipment, devices, 
          techniques, and services.

    As prescribed in 239.7411(d), use the following clause:

Telecommunications Security Equipment, Devices, Techniques, and Services 
                               (DEC 1991)

    (a) Definitions. As used in this clause--
    (1) Securing means the application of Government-approved 
telecommunications security equipment, devices, techniques, or services 
to contractor telecommunications systems.
    (2) Sensitive information means any information the loss, misuse, or 
modification of

[[Page 445]]

which, or unauthorized access to, could adversely affect the national 
interest or the conduct of Federal programs, or the privacy to which 
individuals are entitled under 5 U.S.C. 552a (the Privacy Act), but 
which has not been specifically authorized under criteria established by 
an Executive Order or Act of Congress to be kept secret in the interest 
of national defense or foreign policy.
    (3) Telecommunications systems means voice, record, and data 
communications, including management information systems and local data 
networks that connect to external transmission media, when employed by 
Government agencies, contractors, and subcontractors to transmit--
    (i) Classified or sensitive information;
    (ii) Matters involving intelligence activities, cryptologic 
activities related to national security, the command and control of 
military forces, or equipment that is an integral part of a weapon or 
weapons system; or
    (iii) Matters critical to the direct fulfillment of military or 
intelligence missions.
    (b) This solicitation/contract identifies classified or sensitive 
information that requires securing during telecommunications and 
requires the Contractor to secure telecommunications systems. The 
Contractor agrees to secure information and systems at the following 
location: (Identify the location.)
    (c) To provide the security, the Contractor shall use Government-
approved telecommunications equipment, devices, techniques, or services. 
A list of the approved equipment, etc. may be obtained from (identify 
where list can be obtained). Equipment, devices, techniques, or services 
used by the Contractor must be compatible or interoperable with (list 
and identify the location of any telecommunications security equipment, 
device, technique, or service currently being used by the technical or 
requirements organization or other offices with which the Contractor 
must communicate).
    (d) Except as may be provided elsewhere in this contract, the 
Contractor shall furnish all telecommunications security equipment, 
devices, techniques, or services necessary to perform this contract. The 
Contractor must meet ownership eligibility conditions for communications 
security equipment designated as controlled cryptographic items.
    (e) The Contractor agrees to include this clause, including this 
paragraph (e), in all subcontracts which require securing 
telecommunications.

                             (End of clause)



Sec. 252.241-7000  Superseding contract.

    As prescribed in 241.501-70(a), use the following clause:

                     Superseding Contract (DEC 1991)

    This contract supersedes contract No. ------, dated ---- which 
provided similar services. Any capital credits accrued to the 
Government, any remaining credits due to the Government under the 
connection charge, or any termination liability are transferred to this 
contract, as follows:

                             Capital Credits

    (List years and accrued credits by year and separate delivery 
points.)

                  Outstanding Connection Charge Credits

    (List by month and year the amount credited and show the remaining 
amount of outstanding credits due the Government.)

                      Termination Liability Charges

    (List by month and year the amount of monthly facility cost 
recovered and show the remaining amount of facility cost to be 
recovered.)

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 63 FR 11549, Mar. 9, 1998]



Sec. 252.241-7001  Government access.

    As prescribed in 241.501-70(b), use the following clause:

                      Government Access (DEC 1991)

    Authorized representatives of the Government may have access to the 
Contractor's on-base facilities upon reasonable notice or in case of 
emergency.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 63 FR 11549, Mar. 9, 1998]



Sec. 252.242-7000  [Reserved]



Sec. 252.242-7001  Notice of Earned Value Management System.

    As prescribed in 242.1107-70(a)(1), use the following provision:

           Notice of Earned Value Management System (MAR 2005)

    (a) The offeror shall provide documentation that the cognizant 
Administrative Contracting Officer has recognized that the proposed 
earned value management system (EVMS) complies with the EVMS criteria of 
DoDI 5000.2, Operation of the Defense Acquisition System, or that the 
proposed cost/schedule control system has been accepted by the 
Department of Defense.

[[Page 446]]

    (b) If the offeror proposes to use a system that does not meet the 
requirements of paragraph (a) of this provision, the offeror shall 
submit a comprehensive plan for compliance with the EVMS criteria.
    (1) The plan shall--
    (i) Describe the EVMS the offeror intends to use in performance of 
the contract;
    (ii) Distinguish between the offeror's existing management system 
and modifications proposed to meet the criteria;
    (iii) Describe the management system and its application in terms of 
the 32 EVMS criteria;
    (iv) Describe the proposed procedure for administration of the 
criteria as applied to subcontractors; and
    (v) Provide documentation describing the process and results of any 
third-party or self-evaluation of the system's compliance with EVMS 
criteria.
    (2) The offeror shall provide information and assistance as required 
by the Contracting Officer to support review of the plan.
    (3) The Government will review the offeror's plan for EVMS before 
contract award.
    (c) Offerors shall identify the major subcontractors, or major 
subcontracted effort if major subcontractors have not been selected, 
planned for application of the criteria. The prime contractor and the 
Government shall agree to subcontractors selected for application of the 
EVMS criteria.

                           (End of provision)

[70 FR 14575, Mar. 23, 2005]



Sec. 252.242-7002  Earned Value Management System.

    As prescribed in 242.1107-70(a)(2), use the following clause:

                Earned Value Management System (MAR 2005)

    (a) In the performance of this contract, the Contractor shall use an 
earned value management system (EVMS) that has been recognized by the 
cognizant Administrative Contracting Officer (ACO) as complying with the 
criteria provided in DoDI 5000.2, Operation of the Defense Acquisition 
System.
    (b) If, at the time of award, the Contractor's EVMS has not been 
recognized by the cognizant ACO as complying with EVMS criteria (or the 
Contractor does not have an existing cost/schedule control system that 
has been accepted by the Department of Defense), the Contractor shall 
apply the system to the contract and shall be prepared to demonstrate to 
the ACO that the EVMS complies with the EVMS criteria referenced in 
paragraph (a) of this clause.
    (c) The Government may require integrated baseline reviews. Such 
reviews shall be scheduled as early as practicable and should be 
conducted within 180 calendar days after (1) contract award, (2) the 
exercise of significant contract options, or (3) the incorporation of 
major modifications. The objective of the integrated baseline review is 
for the Government and the Contractor to jointly assess areas, such as 
the Contractor's planning, to ensure complete coverage of the statement 
of work, logical scheduling of the work activities, adequate resourcing, 
and identification of inherent risks.
    (d) Unless a waiver is granted by the ACO, Contractor-proposed EVMS 
changes require approval of the ACO prior to implementation. The ACO 
shall advise the Contractor of the acceptability of such changes within 
30 calendar days after receipt of the notice of proposed changes from 
the Contractor. If the advance approval requirements are waived by the 
ACO, the Contractor shall disclose EVMS changes to the ACO at least 14 
calendar days prior to the effective date of implementation.
    (e) The Contractor agrees to provide access to all pertinent records 
and data requested by the ACO or duly authorized representative. Access 
is to permit Government surveillance to ensure that the EVMS complies, 
and continues to comply, with the criteria referenced in paragraph (a) 
of this clause.
    (f) The Contractor shall require the following subcontractors to 
comply with the requirements of this clause:

    (Contracting Officer to insert names of subcontractors selected for 
application of EVMS criteria in accordance with 252.242-7001(c).)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

                             (End of clause)

[70 FR 14575, Mar. 23, 2005]



Sec. 252.242-7003  Application for U.S. Government shipping 
          documentation/instructions.

    As prescribed in 242.1404-2-70, use the following clause:

Application for U.S. Government Shipping Documentation/Instructions (DEC 
                                  1991)

    The Contractor shall request Government bills of lading by 
submitting a DD Form 1659, Application for U.S. Government Shipping 
Documentation/Instructions, to the--
    (a) Transportation Officer, if named in the contract schedule; or
    (b) Contract administration office.

[[Page 447]]

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 34135, June 24, 1997]



Sec. 252.242-7004  Material management and accounting system.

    As prescribed in 242.7204, use the following caluse:

          Material Management and Accounting System (NOV 2005)

    (a) Definitions. As used in this clause--
    (1) Material management and accounting system (MMAS) means the 
Contractor's system or systems for planning, controlling, and accounting 
for the acquisition, use, issuing, and disposition of material. Material 
management and accounting systems may be manual or automated. They may 
be stand-alone systems or they may be integrated with planning, 
engineering, estimating, purchasing, inventory, accounting, or other 
systems.
    (2) Valid time-phased requirements means material that is--
    (i) Needed to fulfill the production plan, including reasonable 
quantities for scrap, shrinkage, yield, etc.; and
    (ii) Charged/billed to contracts or other cost objectives in a 
manner consistent with the need to fulfill the production plan.
    (3) ``Contractor'' means a business unit as defined in section 
31.001 of the Federal Acquisition Regulation (FAR).
    (b) General. The Contractor shall--
    (1) Maintain an MMAS that--
    (i) Reasonably forecasts material requirements;
    (ii) Ensures that costs of purchased and fabricated material charged 
or allocated to a contract are based on valid time-phased requirements; 
and
    (iii) Maintains a consistent, equitable, and unbiased logic for 
costing of material transactions; and
    (2) Assess its MMAS and take reasonable action to comply with the 
MMAS standards in paragraph (e) of this clause.
    (c) Disclosure and maintenance requirements. The Contractor shall--
    (1) Have policies, procedures, and operating instructions that 
adequately described its MMAS;
    (2) Provide to the Administrative Contracting Officer (ACO), upon 
request, the results of the internal reviews that it has conducted to 
ensure compliance with established MMAS policies, procedures, and 
operating instructions; and
    (3) Disclose significant changes in its MMAS to the ACO at least 30 
days prior to implementation.
    (d) Deficiencies. (1) If the Contractor receives a report from the 
ACO that identifies any deficiencies in its MMAS, the Contractor shall 
respond as follows:
    (i) If the Contractor agrees with the report findings and 
recommendations, the Contractor shall--
    (A) Within 30 days (or such other date as may be mutually agreed to 
by the ACO and the Contractor), state its agreement in writing; and
    (B) Within 60 days (or such other date as may be mutually agreed to 
by the ACO and the Contractor), correct the deficiencies or submit a 
corrective action plan showing milestones and actions to eliminate the 
deficiencies.
    (ii) If the Contractor disagrees with the report findings and 
recommendations, the Contractor shall, within 30 days (or such other 
date as may be mutually agreed to by the ACO and the Contractor), state 
its rationale for each area of disagreement.
    (2) The ACO will evaluate the Contractor's response and will notify 
the Contractor in writing of the--
    (i) Determination concerning any remaining deficiencies;
    (ii) Adequacy of any proposed or completed corrective action plan; 
and
    (iii) Need for any new or revised corrective action plan.
    (3) When the ACO determines the MMAS deficiencies have a material 
impact on Government contract costs, the ACO must reduce progress 
payments by an appropriate percentage based on affected costs (in 
accordance with FAR 32.503-6) and/or disallow costs on vouchers (in 
accordance with FAR 42.803) until the ACO determines that--
    (i) The deficiencies are corrected; or
    (ii) The amount of the impact is immaterial.
    (4) If the contractor fails to make adequate progress, the ACO must 
take further action. The ACO may--
    (i) Elevate the issue to higher level management;
    (ii) Further reduce progress payments and/or disallow costs on 
vouchers;
    (iii) Notify the contractor of the inadequacy of the contractor's 
cost estimating system and/or cost accounting system; and
    (iv) Issue cautions to contracting activities regarding the award of 
future contracts.
    (e) MMAS standards. The MMAS shall have adequate internal controls 
to ensure system and data integrity, and shall--
    (1) Have an adequate system description including policies, 
procedures, and operating instructions that comply with the FAR and 
Defense FAR Supplement;
    (2) Ensure that costs of purchased and fabricated material charged 
or allocated to a contract are based on valid time-phased requirements 
as impacted by minimum/economic order quantity restrictions.
    (i) A 98 percent bill of material accuracy and a 95 percent master 
production schedule

[[Page 448]]

accuracy are desirable as a goal in order to ensure that requirements 
are both valid and appropriately time-phased.
    (ii) If systems have accuracy levels below these, the Contractor 
shall provide adequate evidence that--
    (A) There is no material harm to the Government due to lower 
accuracy levels; and
    (B) The cost to meet the accuracy goals is excessive in relation to 
the impact on the Government;
    (3) Provide a mechanism to identify, report, and resolve system 
control weaknesses and manual override. Systems should identify 
operational exceptions such as excess/residual inventory as soon as 
known;
    (4) Provide audit trails and maintain records (manual and those in 
machine readable form) necessary to evaluate system logic and to verify 
through transaction testing that the system is operating as desired;
    (5) Establish and maintain adequate levels of record accuracy, and 
include reconciliation of recorded inventory quantities to physical 
inventory by part number on a periodic basis. A 95 percent accuracy 
level is desirable. If systems have an accuracy level below 95 percent, 
the Contractor shall provide adequate evidence that--
    (i) There is no material harm to the Government due to lower 
accuracy levels; and
    (ii) The cost to meet the accuracy goal is excessive in relation to 
the impact on the Government;
    (6) Provide detailed descriptions of circumstances that will result 
in manual or system generated transfers of parts;
    (7) Maintain a consistent, equitable, and unbiased logic for costing 
of material transactions as follows:
    (i) The Contractor shall maintain and disclose written policies 
describing the transfer methodology and the loan/pay-back technique.
    (ii) The costing methodology may be standard or actual cost, or any 
of the inventory costing methods in 48 CFR 9904.411-50(b). The 
Contractor shall maintain consistency across all contract and customer 
types, and from accounting period to accounting period for initial 
charging and transfer charging.
    (iii) The system should transfer parts and associated costs within 
the same billing period. In the few instances where this may not be 
appropriate, the Contractor may accomplish the material transaction 
using a loan/pay-back technique. The ``loan/pay-back technique'' means 
that the physical part is moved temporarily from the contract, but the 
cost of the part remains on the contract. The procedures for the loan/
pay-back technique must be approved by the ACO. When the technique is 
used, the Contractor shall have controls to ensure--
    (A) Parts are paid back expeditiously;
    (B) Procedures and controls are in place to correct any overbilling 
that might occur;
    (C) Monthly, at a minimum, identification of the borrowing contract 
and the date the part was borrowed; and
    (D) The cost of the replacement part is charged to the borrowing 
contract;
    (8) Where allocations from common inventory accounts are used, have 
controls (in addition to those in paragraphs (e)(2) and (7) of this 
clause) to ensure that--
    (i) Reallocations and any credit due are processed no less 
frequently than the routine billing cycle;
    (ii) Inventories retained for requirements that are not under 
contract are not allocated to contracts; and
    (iii) Algorithms are maintained based on valid and current data;
    (9) Regardless of the provisions of FAR 45.505-3(f)(1)(ii), have 
adequate controls to ensure that physically commingled inventories that 
may include material for which costs are charged or allocated to fixed-
price, cost-reimbursement, and commercial contracts do not compromise 
requirements of any of the standards in paragraphs (e)(1) through (8) of 
this clause. Government-furnished material shall not be--
    (i) Physically commingled with other material; or
    (ii) Used on commercial work; and
    (10) Be subjected to periodic internal reviews to ensure compliance 
with established policies and procedures.

                             (End of clause)

[65 FR 77834, Dec. 13, 2000, as amended at 70 FR 67921, Nov. 9, 2005]



Sec. 252.242-7005  Cost/Schedule Status Report.

    As prescribed in 242.1107-70(b), use the following clause:

                 Cost/Schedule Status Report (MAR 2005)

    (a) The Contractor shall use management procedures in the 
performance of this contract that provide for--
    (1) Planning and control of costs;
    (2) Measurement of performance (value for completed tasks); and
    (3) Generation of timely and reliable information for the cost/
schedule status report (C/SSR).
    (b) As a minimum, these procedures must provide for--
    (1) Establishing the time-phased budgeted cost of work scheduled 
(including work authorization, budgeting, and scheduling), the budgeted 
cost for work performed, the actual

[[Page 449]]

cost of work performed, the budget at completion, the estimate at 
completion, and provisions for subcontractor performance measurement and 
reporting;
    (2) Applying all direct and indirect costs and provisions for use 
and control of management reserve and undistributed budget;
    (3) Incorporating changes to the contract budget base for both 
Government directed changes and internal replanning;
    (4) Establishing constraints to preclude subjective adjustment of 
data to ensure that performance measurement remains realistic. The total 
allocated budget may exceed the contract budget base only after 
consultation with the Contracting Officer. For cost-reimbursement 
contracts, the contract budget base shall exclude changes for cost 
growth increase, other than for authorized changes to the contract 
scope; and
    (5) Establishing the capability to accurately identify and explain 
significant cost and schedule variances, both on a cumulative basis and 
projected at completion basis.
    (c) The Contractor may use a cost/schedule control system that has 
been recognized by the cognizant Administrative Contracting Officer 
(ACO) as complying with the earned value management system criteria 
provided in DoDI 5000.2, Operation of the Defense Acquisition System.
    (d) The Government may require integrated baseline reviews. Such 
reviews shall be scheduled as early as practicable and should be 
conducted within 180 calendar days after (1) contract award, (2) the 
exercise of significant contract options, or (3) the incorporation of 
major modifications. The objective of the integrated baseline review is 
for the Government and the Contractor to jointly assess areas, such as 
the Contractor's planning, to ensure complete coverage of the statement 
of work, logical scheduling of the work activities, adequate resourcing, 
and identification of inherent risks.
    (e) The Contractor shall provide access to all pertinent records, 
company procedures, and data requested by the ACO, or authorized 
representative, to--
    (1) Show proper implementation of the procedures generating the cost 
and schedule information being used to satisfy the C/SSR contractual 
data requirements to the Government; and
    (2) Ensure continuing application of the accepted company procedures 
in satisfying the C/SSR data item.
    (f) The Contractor shall submit any substantive changes to the 
procedures and their impact to the ACO for review.
    (g) The Contractor shall require a subcontractor to furnish C/SSR in 
each case where the subcontract is other than firm-fixed-price, is 12 
months or more in duration, and has critical or significant tasks 
related to the prime contract. Critical or significant tasks shall be 
defined by mutual agreement between the Government and Contractor. Each 
subcontractor's reported cost and schedule information shall be 
incorporated into the Contractor's C/SSR.

                             (End of clause)

[62 FR 9992, Mar. 5, 1997, as amended at 62 FR 34135, June 24, 1997; 63 
FR 11549, Mar. 9, 1998; 70 FR 14576, Mar. 23, 2005]



Sec. 252.242-7006  Cost/Schedule Status Report Plans.

    As prescribed in 242.1107-70(c), use the following provision:

              Cost/Schedule Status Report Plans (MAR 2005)

    (a) The offeror shall submit a written summary of the management 
procedures it will establish, maintain, and use in the performance of 
any resultant contract to comply with the requirements of the clause at 
252.242-7005, Cost/Schedule Status Report.
    (b) If the offeror proposes to use a cost/schedule control system 
that has been recognized by the cognizant Administrative Contracting 
Officer as complying with the earned value management system criteria of 
DoDI 5000.2, Operation of the Defense Acquisition System, the offeror 
may submit a copy of the documentation of such recognition instead of 
the written summary required by paragraph (a) of this provision.

                           (End of provision)

[62 FR 9992, Mar. 5, 1997, as amended at 62 FR 34135, June 24, 1997; 70 
FR 14576, Mar. 23, 2005]



Sec. 252.243-7000  [Reserved]



Sec. 252.243-7001  Pricing of contract modifications.

    As prescribed in 243.205-70, use the following clause:

              Pricing of Contract Modifications (DEC 1991)

    When costs are a factor in any price adjustment under this contract, 
the contract cost principles and procedures in FAR part 31 and DFARS 
part 231, in effect on the date of this contract, apply.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 66 FR 49865, Oct. 1, 2001]

[[Page 450]]



Sec. 252.243-7002  Requests for equitable adjustment.

    As prescribed in 243.205-71, use the following clause:

              Requests for Equitable Adjustment (MAR 1998)

    (a) The amount of any request for equitable adjustment to contract 
terms shall accurately reflect the contract adjustment for which the 
Contractor believes the Government is liable. The request shall include 
only costs for performing the change, and shall not include any costs 
that already have been reimbursed or that have been separately claimed. 
All indirect costs included in the request shall be properly allocable 
to the change in accordance with applicable acquisition regulations.
    (b) In accordance with 10 U.S.C. 2410(a), any request for equitable 
adjustment to contract terms that exceeds the simplified acquisition 
threshold shall bear, at the time of submission, the following 
certificate executed by an individual authorized to certify the request 
on behalf of the Contractor:
    I certify that the request is made in good faith, and that the 
supporting data are accurate and complete to the best of my knowledge 
and belief.

________________________________________________________________________
(Official's Name)
________________________________________________________________________
(Title)

    (c) The certification in paragraph (b) of this clause requires full 
disclosure of all relevant facts, including--
    (1) Cost or pricing data if required in accordance with subsection 
15.403-4 of the Federal Acquisition Regulation (FAR); and
    (2) Information other than cost or pricing data, in accordance with 
subsection 15.403-3 of the FAR, including actual cost data and data to 
support any estimated costs, even if cost or pricing data are not 
required.
    (d) The certification requirement in paragraph (b) of this clause 
does not apply to--
    (1) Requests for routine contract payments; for example, requests 
for payment for accepted supplies and services, routine vouchers under a 
cost-reimbursement type contract, or progress payment invoices; or
    (2) Final adjustment under an incentive provision of the contract.

                             (End of clause)

[63 FR 11549, Mar. 9, 1998, as amended at 66 FR 49865, Oct. 1, 2001]



Sec. 252.244-7000  Subcontracts for commercial items and commercial 
          components (DoD contracts).

    As prescribed in 244.403, use the following clause:

    Subcontracts for Commercial Items and Commercial Components (DOD 
                          Contracts) (NOV 2005)

    In addition to the clauses listed in paragraph (c) of the 
Subcontracts for Commercial Items clause of this contract (Federal 
Acquisition Regulation 52.244-6), the Contractor shall include the terms 
of the following clauses, if applicable, in subcontracts for commercial 
items or commercial components, awarded at any tier under this contract:
    252.225-7014 Preference for Domestic Specialty Metals, Alternate I 
(10 U.S.C. 2241 note).
    252.247-7023 Transportation of Supplies by Sea (10 U.S.C. 2631).
    252.247-7024 Notification of Transportation of Supplies by Sea (10 
U.S.C. 2631).

                             (End of clause)

[65 FR 14401, Mar. 16, 2000, as amended at 70 FR 67923, Nov. 9, 2005]



Sec. 252.245-7000  Government-furnished mapping, charting, and geodesy 
          property.

    As prescribed in 245.310-70, use the following clause:

 Government-Furnished Mapping, Charting, and Geodesy Property (DEC 1991)

    (a) Definition--Mapping, charting, and geodesy (MC&G) property means 
geodetic, geomagnetic, gravimetric, aeronautical, topographic, 
hydrographic, cultural, and toponymic data presented in the form of 
topographic, planimetric, relief, or thematic maps and graphics; 
nautical and aeronautical charts and publications; and in simulated, 
photographic, digital, or computerized formats.
    (b) The Contractor shall not duplicate, copy, or otherwise reproduce 
MC&G property for purposes other than those necessary for performance of 
the contract.
    (c) At the completion of performance of the contract, the 
Contractor, as directed by the Contracting Officer, shall either destroy 
or return to the Government all Government-furnished MC&G property not 
consumed in the performance of this contract.

[[Page 451]]

                             (End of clause)



Sec. 252.245-7001  Reports of Government property.

    As prescribed in 245.505-14(a), use the following clause:

                Reports of Government Property (MAY 1994)

    (a) The Contractor shall provide an annual report--
    (1) For all DoD property for which the Contractor is accountable 
under the contract;
    (2) Prepared in accordance with the requirements of DD Form 1662, 
DoD Property in the Custody of Contractors, or approved substitute, 
including instructions on the reverse side of the form;
    (3) In duplicate, to the cognizant Government property 
administrator, no later than October 31.
    (b) The Contractor is responsible for reporting all Government 
property accountable to this contract, including that at subcontractor 
and alternate locations.

                             (End of clause)

[59 FR 27677, May 27, 1994]



Sec. 252.246-7000  Material inspection and receiving report.

    As prescribed in 246.370, use the following clause:

           Material Inspection and Receiving Report (MAR 2003)

    (a) At the time of each delivery of supplies or services under this 
contract, the Contractor shall prepare and furnish to the Government a 
material inspection and receiving report in the manner and to the extent 
required by Appendix F, Material Inspection and Receiving Report, of the 
Defense FAR Supplement.
    (b) Contractor submission of the material inspection and receiving 
information required by Appendix F of the Defense FAR Supplement by 
using the Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) electronic 
form (see paragraph (b)(1) of the clause at 252.232-7003) fulfills the 
requirement for a material inspection and receiving report (DD Form 
250).

                             (End of clause)

[68 FR 8455, Feb. 21, 2003]



Sec. 252.246-7001  Warranty of data.

    As prescribed in 246.710 (1), use the following clause:

                       Warranty of Data (DEC 1991)

    (a) Definition--Technical data has the same meaning as given in the 
clause in this contract entitled, Rights in Technical Data and Computer 
Software.
    (b) Warranty. Notwithstanding inspection and acceptance by the 
Government of technical data furnished under this contract, and 
notwithstanding any provision of this contract concerning the 
conclusiveness of acceptance, the Contractor warrants that all technical 
data delivered under this contract will at the time of delivery conform 
with the specifications and all other requirements of this contract. The 
warranty period shall extend for three years after completion of the 
delivery of the line item of data (as identified in DD Form 1423, 
Contract Data Requirements List) of which the data forms a part; or any 
longer period specified in the contract.
    (c) Contractor notification. The Contractor agrees to notify the 
Contracting Officer in writing immediately of any breach of the above 
warranty which the Contractor discovers within the warranty period.
    (d) Remedies. The following remedies shall apply to all breaches of 
the warranty, whether the Contractor notifies the Contracting Officer in 
accordance with paragraph (c) of this clause or if the Government 
notifies the Contractor of the breach in writing within the warranty 
period:
    (1) Within a reasonable time after such notification, the 
Contracting Officer may--
    (i) By written notice, direct the Contractor to correct or replace 
at the Contractor's expense the nonconforming technical data promptly; 
or
    (ii) If the Contracting Officer determines that the Government no 
longer has a requirement for correction or replacement of the data, or 
that the data can be more reasonably corrected by the Government, inform 
the Contractor by written notice that the Government elects a price or 
fee adjustment instead of correction or replacement.
    (2) If the Contractor refuses or fails to comply with a direction 
under paragraph (d) (1)(i) of this clause, the Contracting Officer may, 
within a reasonable time of the refusal or failure--
    (i) By contract or otherwise, correct or replace the nonconforming 
technical data and charge the cost to the Contractor; or
    (ii) Elect a price or fee adjustment instead of correction or 
replacement.
    (3) The remedies in this clause represent the only way to enforce 
the Government's rights under this clause.
    (e) The provisions of this clause apply anew to that portion of any 
corrected or replaced technical data furnished to the Government under 
paragraph (d)(1)(i) of this clause.

[[Page 452]]

                             (End of clause)

    Alternate I (DEC 1991). As prescribed in 246.710(2), substitute the 
following for paragraph (d)(3) of the basic clause:

    (3) In addition to the remedies under paragraphs (d)(1) and (2) of 
this clause, the Contractor shall be liable to the Government for all 
damages to the Government as a result of the breach of warranty.
    (i) The additional liability under paragraph (d)(3) of this clause 
shall not exceed 75 percent of the target profit.
    (ii) If the breach of the warranty is with respect to the data 
supplied by an equipment subcontractor, the limit of the Contractor's 
liability shall be--
    (A) Ten percent of the total subcontract price in a firm fixed price 
subcontract;
    (B) Seventy-five percent of the total subcontract fee in a cost-
plus-fixed-fee or cost-plus-award-fee subcontract; or
    (C) Seventy-five percent of the total subcontract target profit or 
fee in a fixed-price or cost-plus-incentive-type contract.
    (iii) Damages due the Government under the provisions of this 
warranty are not an allowable cost.
    (iv) The additional liability in paragraph (d)(3) of this clause 
shall not apply--
    (A) With respect to the requirements for product drawings and 
associated lists, special inspection equipment (SIE) drawings and 
associated lists, special tooling drawings and associated lists, SIE 
operating instructions, SIE descriptive documentation, and SIE 
calibration procedures under MIL-T-31000, General Specification for 
Technical Data Packages, Amendment 1, or MIL-T-47500, General 
Specification for Technical Data Packages, Supp 1, or drawings and 
associated lists under level 2 or level 3 of MIL-D-1000A, Engineering 
and Associated Data Drawings, or DoD-D-1000B, Engineering and Associated 
Lists Drawings (Inactive for New Design) Amendment 4, Notice 1; or 
drawings and associated lists under category E or I of MIL-D-1000, 
Engineering and Associated Lists Drawings, provided that the data 
furnished by the Contractor was current, accurate at time of submission, 
and did not involve a significant omission of data necessary to comply 
with the requirements; or
    (B) To defects the Contractor discovers and gives written notice to 
the Government before the Government discovers the error.

    Alternate II (DEC 1991). As prescribed at 246.710(3), substitute the 
following paragraph for paragraph (d)(3) of the basic clause:

    (3) In addition to the remedies under paragraphs (d)(1) and (2) of 
this clause, the Contractor shall be liable to the Government for all 
damages to the Government as a result of the breach of the warranty.
    (i) The additional liability under paragraph (d)(3) of this clause 
shall not exceed ten percent of the total contract price.
    (ii) If the breach of the warranty is with respect to the data 
supplied by an equipment subcontractor, the limit of the Contractor's 
liability shall be--
    (A) Ten percent of the total subcontract price in a firm fixed-price 
subcontract;
    (B) Seventy-five percent of the total subcontract fee in a cost-
plus-fixed-fee or cost-plus-award-fee subcontract; or
    (C) Seventy-five percent of the total subcontract target profit or 
fee in a fixed-price or cost-plus-incentive-type contract.
    (iii) The additional liability specified in paragraph (d)(3) of this 
clause shall not apply--
    (A) With respect to the requirements for product drawings and 
associated lists, special inspection equipment (SIE) drawings and 
associated lists, special tooling drawings and associated lists, SIE 
operating instructions, SIE descriptive documentation, and SIE 
calibration procedures under MIL-T-31000, General Specification for 
Technical Data Packages, Amendment 1, or MIL-T-47500, General 
Specification for Technical Data Packages, Supp 1, or drawings and 
associated lists under level 2 or level 3 of MIL-D-1000A, Engineering 
and Associated Data Drawings, or DoD-D-1000B, Engineering and Associated 
Lists Drawings (Inactive for New Design) Amendment 4, Notice 1; or 
drawings and associated lists under category E or I of MIL-D-1000, 
Engineering and Associated Lists Drawings, provided that the data 
furnished by the Contractor was current, accurate at time of submission, 
and did not involve a significant omission of data necessary to comply 
with the requirements; or
    (B) To defects the Contractor discovers and gives written notice to 
the Government before the Government discovers the error.



Sec. 252.246-7002  Warranty of construction (Germany).

    As prescribed in 246.710(4), use the following clause:

             Warranty of Construction (Germany) (JUNE 1997)

    (a) In addition to any other representations in this contract, the 
Contractor warrants, except as provided in paragraph (j) of this clause, 
that the work performed under this contract conforms to the contract 
requirements and is free of any defect of equipment, material, or design 
furnished or workmanship performed by the Contractor or any 
subcontractor or supplier at any tier.
    (b) This warranty shall continue for the period(s) specified in 
Section 13, VOB, Part B,

[[Page 453]]

commencing from the date of final acceptance of the work under this 
contract. If the Government takes possession of any part of the work 
before final acceptance, this warranty shall continue for the period(s) 
specified in Section 13, VOB, Part B, from the date the Government takes 
possession.
    (c) The Contractor shall remedy, at the Contractor's expense, any 
failure to conform or any defect. In addition, the Contractor shall 
remedy, at the Contractor's expense, any damage to Government-owned or -
controlled real or personal property when that damage is the result of--
    (1) The Contractor's failure to conform to contract requirements; or
    (2) Any defect of equipment, material, or design furnished or 
workmanship performed.
    (d) The Contractor shall restore any work damaged in fulfilling the 
terms and conditions of this clause.
    (e) The Contracting Officer shall notify the Contractor, in writing, 
within a reasonable period of time after the discovery of any failure, 
defect, or damage.
    (f) If the Contractor fails to remedy any failure, defect, or damage 
within a reasonable period of time after receipt of notice, the 
Government shall have the right to replace, repair, or otherwise remedy 
the failure, defect, or damage at the Contractor's expense.
    (g) With respect to all warranties, express or implied, from 
subcontractors, manufacturers, or suppliers for work performed and 
materials furnished under this contract, the Contractor shall--
    (1) Obtain all warranties that would be given in normal commercial 
practice;
    (2) Require all warranties to be executed in writing, for the 
benefit of the Government, if directed by the Contracting Officer; and
    (3) Enforce all warranties for the benefit of the Government as 
directed by the Contracting Officer.
    (h) In the event the Contractor's warranty under paragraph (b) of 
this clause has expired, the Government may bring suit at its expense to 
enforce a subcontractor's, manufacturer's, or supplier's warranty.
    (i) Unless a defect is caused by the Contractor's negligence, or the 
negligence of a subcontractor or supplier at any tier, the Contractor 
shall not be liable for the repair of any defects of material or design 
furnished by the Government or for the repair of any damage resulting 
from any defeat in Government-furnished material or design.
    (j) This warranty shall not limit the Government's right under the 
Inspection clause of this contract, with respect to latent defects, 
gross mistakes, or fraud.

                             (End of clause)

[62 FR 34135, June 24, 1997; 62 FR 49306, Sept. 19, 1997]



Sec. 252.247-7000  Hardship conditions.

    As prescribed in 247.270-6(a), use the following clause:

                     Hardship Conditions (AUG 2000)

    (a) If the Contractor finds unusual ship, dock, or cargo conditions 
associated with loading or unloading a particular cargo, that will work 
a hardship on the Contractor if loaded or unloaded at the basic 
commodity rates, the Contractor shall--
    (1) Notify the Contracting Officer before performing the work, if 
feasible, but no later than the vessel sailing time; and
    (2) Submit any associated request for price adjustment to the 
Contracting Officer within 10 working days of the vessel sailing time.
    (b) Unusual conditions include, but are not limited to, 
inaccessibility of place of stowage to the ship's cargo gear, side port 
operations, and small quantities of cargo in any one hatch.
    (c) The Contracting Officer will investigate the conditions promptly 
after receiving the notice. If the Contracting Officer finds that the 
conditions are unusual and do materially affect the cost of loading or 
unloading, the Contracting Officer will authorize payment at the 
applicable man-hour rates set forth in the schedule of rates of this 
contract.

                             (End of clause)

[65 FR 50147, Aug. 17, 2000]



Sec. 252.247-7001  Price adjustment.

    As prescribed in 247.270-6(b), use the following clause:

                       Price Adjustment (JAN 1997)

    (a) The Contractor warrants that the prices set forth in this 
contract--
    (1) Are based upon the wage rates, allowances, and conditions set 
forth in the collective bargaining agreements between the Contractor and 
its employees, in effect as of (insert date), and which are generally 
applicable to the ports where work under this contract is performed;
    (2) Apply to operations by the Contractor on non-Government work as 
well as under this contract; and
    (3) Do not include any allowance for cost increases that may--
    (i) Become effective under the terms of the collective bargaining 
agreements after the date in paragraph (a)(1) of this clause; or
    (ii) Result from modification of the collective bargaining 
agreements after the date in paragraph (a)(1).
    (b) The Contractor shall notify the Contracting Officer within 60 
days of receipt of notice of any changes (increase or decrease)

[[Page 454]]

in the wage rates, allowances, fringe benefits, and conditions that 
apply to its direct labor employees, if the changes--
    (1) Are pursuant to the provisions of the collective bargaining 
agreements; or
    (2) Are a result of effective modifications to the agreements; and
    (3) Would change the Contractor's costs to perform this contract.
    (c) The Contractor shall include in its notification--
    (1) A proposal for an adjustment in the contract commodity, 
activity, or work-hour prices; and
    (2) Data, in such form as the Contracting Officer may require, 
explaining the--
    (i) Causes;
    (ii) Effective date; and
    (iii) Amount of the increase or decrease in the Contractor's 
proposal for the adjustment.
    (d) Promptly upon receipt of any notice and data described in 
paragraph (c), the Contractor and the Contracting Officer shall 
negotiate an adjustment in the existing contract commodity, activity, or 
man-hour prices. However, no upward adjustment of the existing 
commodity, activity, or work-hour prices will be allowed in excess of --
------ percent per year, except as provided in the Changes clause of 
this contract.
    (1) Changes in the contract prices shall reflect, in addition to the 
direct and variable indirect labor costs, the associated changes in the 
costs for social security, unemployment compensation, taxes, and 
workman's compensation insurance.
    (2) There will be no adjustment to increase the dollar amount 
allowances of the Contractor's profit.
    (3) The agreed upon adjustment, its effective date, and the revised 
commodity, activity, or work-hour prices for services set forth in the 
schedule of rates, shall be incorporated in the contract by supplemental 
agreement.
    (e) There will be no adjustment for any changes in the quantities of 
labor that the Contractor contemplated for each specific commodity, 
except as may result from modifications of the collective bargaining 
agreements. For the purpose of administering this clause, the Contractor 
shall submit to the Contracting Officer, within five days after award, 
the accounting data and computations the Contractor used to determine 
its estimated efficiency rate in the performance of this contract, to 
include the Contractor's computation of the costs apportioned for each 
rate set forth in the schedule of rates.
    (f) Failure of the parties to agree to an adjustment under this 
clause will be deemed to be a dispute concerning a question of fact 
within the meaning of the Disputes clause of this contract. The 
Contractor shall continue performance pending agreement on, or 
determination of, any such adjustment and its effective date.
    (g) The Contractor shall include with the final invoice submitted 
under this contract a statement that the Contractor has not experienced 
a decrease in rates of pay for labor, or that the Contractor has given 
notice of all such decreases in compliance with paragraph (b) of this 
clause.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 62 FR 2615, Jan. 17, 1997; 65 
FR 50147, Aug. 17, 2000]



Sec. 252.247-7002  Revision of prices.

    As prescribed in 247.270-6(c), use the following clause:

                      Revision of Prices (DEC 1991)

    (a) Definition. Wage adjustment, as used in this clause, means a 
change in the wages, salaries, or other terms or conditions of 
employment which--
    (1) Substantially affects the cost of performing this contract;
    (2) Is generally applicable to the port where work under this 
contract is performed; and
    (3) Applies to operations by the Contractor on non-Government work 
as well as to work under this contract.
    (b) General. The prices fixed in this contract are based on wages 
and working conditions established by collective bargaining agreements, 
and on other conditions in effect on the date of this contract. The 
Contracting Officer and the Contractor may agree to increase or decrease 
such prices in accordance with this clause.
    (c) Demand for negotiation. (1) At any time, subject to the 
limitations specified in this clause, either the Contracting Officer or 
the Contractor may deliver to the other a written demand that the 
parties negotiate to revise the prices under this contract.
    (2) No such demand shall be made before 90 days after the date of 
this contract, and thereafter neither party shall make a demand having 
an effective date within 90 days of the effective date of any prior 
demand. However, this limitation does not apply to a wage adjustment 
during the 90 day period.
    (3) Each demand shall specify a date (the same as or subsequent to 
the date of the delivery of the demand) as to when the revised prices 
shall be effective. This date is the effective date of the price 
revision.
    (i) If the Contractor makes a demand under this clause, the demand 
shall briefly state the basis of the demand and include the statements 
and data referred to in paragraph (d) of this clause.
    (ii) If the demand is made by the Contracting Officer, the 
Contractor shall furnish

[[Page 455]]

the statements and data within 30 days of the delivery of the demand.
    (d) Submission of data. At the times specified in paragraphs 
(c)(3)(i) and (ii) of this clause, the Contractor shall submit--
    (1) A new estimate and breakdown of the unit cost and the proposed 
prices for the services the Contractor will perform under this contract 
after the effective date of the price revision, itemized to be 
consistent with the original negotiations of the contract;
    (2) An explanation of the difference between the original (or last 
preceding) estimate and the new estimate;
    (3) Such relevant operating data, cost records, overhead absorption 
reports, and accounting statements as may be of assistance in 
determining the accuracy and reliability of the new estimate;
    (4) A statement of the actual costs of performance under this 
contract to the extent that they are available at the time of the 
negotiation of the revision of prices under this clause; and
    (5) Any other relevant data usually furnished in the case of 
negotiations of prices under a new contract. The Government may examine 
and audit the Contractor's accounts, records, and books as the 
Contracting Officer considers necessary.
    (e) Negotiations. (1) Upon the filing of the statements and data 
required by paragraph (d) of this clause, the Contractor and the 
Contracting Officer shall negotiate promptly in good faith to agree upon 
prices for services the Contractor will perform on and after the 
effective date of the price revision.
    (2) If the prices in this contract were established by competitive 
negotiation, they shall not be revised upward unless justified by 
changes in conditions occurring after the contract was awarded.
    (3) The agreement reached after each negotiation will be 
incorporated into the contract by supplemental agreement.
    (f) Disagreements. If, within 30 days after the date on which 
statements and data are required pursuant to paragraph (c) of this 
clause, the Contracting Officer and the Contractor fail to agree to 
revised prices, the failure to agree shall be resolved in accordance 
with the Disputes clause of this contract. The prices fixed by the 
Contracting Officer will remain in effect for the balance of the 
contract, and the Contractor shall continue performance.
    (g) Retroactive changes in wages or working conditions. (1) In the 
event of a retroactive wage adjustment, the Contractor or the 
Contracting Officer may request an equitable adjustment in the prices in 
this contract.
    (2) The Contractor shall request a price adjustment within 30 days 
of any retroactive wage adjustment. The Contractor shall support its 
request with--
    (i) An estimate of the changes in cost resulting from the 
retroactive wage adjustment;
    (ii) Complete information upon which the estimate is based; and
    (iii) A certified copy of the collective bargaining agreement, 
arbitration award, or other document evidencing the retroactive wage 
adjustment.
    (3) Subject to the limitation in paragraph (g)(2) of this clause as 
to the time of making a request, completion or termination of this 
contract shall not affect the Contractor's right under paragraph (g) of 
this clause.
    (4) In case of disagreement concerning any question of fact, 
including whether any adjustment should be made, or the amount of such 
adjustment, the disagreement will be resolved in accordance with the 
Disputes clause of this contract.
    (5) The Contractor shall notify the Contracting Officer in writing 
of any request by or on behalf of the employees of the Contractor which 
may result in a retroactive wage adjustment. The notice shall be given 
within 20 days after the request, or if the request occurs before 
contract execution, at the time of execution.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 65 FR 50147, Aug. 17, 2000]



Sec. 252.247-7003  [Reserved]



Sec. 252.247-7004  Indefinite quantities--fixed charges.

    As prescribed in 247.270-6(d), use the following clause:

             Indefinite Quantities--Fixed Charges (DEC 1991)

    The amount of work and services the Contractor may be ordered to 
furnish shall be the amount the Contracting Officer may order from time 
to time. In any event, the Government is obligated to compensate the 
Contractor the monthly lump sum specified in the Schedule entitled Fixed 
Charges, for each month or portion of a month the contract remains in 
effect.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 65 FR 50147, Aug. 17, 2000]



Sec. 252.247-7005  Indefinite quantities--no fixed charges.

    As prescribed in 247.270-6(e), use the following clause:

[[Page 456]]

           Indefinite Quantities--No Fixed Charges (DEC 1991)

    The amount of work and services the Contractor may be ordered to 
furnish shall be the amount the Contracting Officer may order from time 
to time. In any event, the Government shall order, during the term of 
this contract, work or services having an aggregate value of not less 
than $100.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 65 FR 50148, Aug. 17, 2000]



Sec. 252.247-7006  Removal of contractor's employees.

    As prescribed in 247.270-6(f), use the following clause:

              Removal of Contractor's Employees (DEC 1991)

    The Contractor agrees to use only experienced, responsible, and 
capable people to perform the work. The Contracting Officer may require 
that the Contractor remove from the job, employees who endanger persons 
or property, or whose continued employment under this contract is 
inconsistent with the interest of military security.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 65 FR 50148, Aug. 17, 2000]



Sec. 252.247-7007  Liability and insurance.

    As prescribed in 247.270-6(g), use the following clause:

                   Liability and Insurance (DEC 1991)

    (a) The Contractor shall be--
    (1) Liable to the Government for loss or damage to property, real 
and personal, owned by the Government or for which the Government is 
liable;
    (2) Responsible for, and hold the Government harmless from, loss of 
or damage to property not included in paragraph (a)(1); and
    (3) Responsible for, and hold the Government harmless from, bodily 
injury and death of persons, resulting either in whole or in part from 
the negligence or fault of the Contractor, its officers, agents, or 
employees in the performance of work under this contract.
    (b) For the purpose of this clause, all cargo loaded or unloaded 
under this contract is agreed to be property owned by the Government or 
property for which the Government is liable.
    (1) The amount of the loss or damage as determined by the 
Contracting Officer will be withheld from payments otherwise due the 
Contractor.
    (2) Determination of liability and responsibility by the Contracting 
Officer will constitute questions of fact within the meaning of the 
Disputes clause of this contract.
    (c) The general liability and responsibility of the Contractor under 
this clause are subject only to the following specific limitations. The 
Contractor is not responsible to the Government for, and does not agree 
to hold the Government harmless from, loss or damage to property or 
bodily injury to or death of persons if--
    (1) The unseaworthiness of the vessel, or failure or defect of the 
gear or equipment furnished by the Government, contributed jointly with 
the fault or negligence of the Contractor in causing such damage, 
injury, or death; and
    (i) The Contractor, his officers, agents, and employees, by the 
exercise of due diligence, could not have discovered such 
unseaworthiness or defect of gear or equipment; or
    (ii) Through the exercise of due diligence could not otherwise have 
avoided such damage, injury, or death.
    (2) The damage, injury, or death resulted solely from an act or 
omission of the Government or its employees, or resulted solely from 
proper compliance by officers, agents, or employees of the Contractor 
with specific directions of the Contracting Officer.
    (d) The Contractor shall at its own expense acquire and maintain 
insurance during the term of this contract, as follows--
    (1) Standard workmen's compensation and employer's liability 
insurance and longshoremen's and harbor workers' compensation insurance, 
or such of these as may be proper under applicable state or Federal 
statutes.
    (i) The Contractor may, with the prior approval of the Contracting 
Officer, be a self-insurer against the risk of this paragraph (d)(1).
    (ii) This approval will be given upon receipt of satisfactory 
evidence that the Contractor has qualified as a self-insurer under 
applicable provision of law.
    (2) Bodily injury liability insurance in an amount of not less than 
$300,000 on account of any one occurrence.
    (3) Property damage liability insurance (which shall include any and 
all property, whether or not in the care, custody, or control of the 
Contractor) in an amount of not less than $300,000 for any one 
occurrence.
    (e) Each policy shall provide, by appropriate endorsement or 
otherwise, that cancellation or material change in the policy shall not 
be effective until after a 30 day written notice is furnished the 
Contracting Officer.
    (f) The Contractor shall furnish the Contracting Officer with 
satisfactory evidence of

[[Page 457]]

the insurance required in paragraph (d) before performance of any work 
under this contract.
    (g) The Contractor shall, at its own cost and expense, defend any 
suits, demands, claims, or actions, in which the United States might be 
named as a co-defendant of the Contractor, resulting from the 
Contractor's performance of work under this contract. This requirement 
is without regard to whether such suit, demand, claim, or action was the 
result of the Contractor's negligence. The Government shall have the 
right to appear in such suit, participate in defense, and take such 
actions as may be necessary to protect the interest of the United 
States.
    (h) It is expressly agreed that the provisions in paragraphs (d) 
through (g) of this clause shall not in any manner limit the liability 
or extend the liability of the Contractor as provided in paragraphs (a) 
through (c) of this clause.
    (i) The Contractor shall--
    (1) Equitably reimburse the Government if the Contractor is 
indemnified, reimbursed, or relieved of any loss or damage to Government 
property;
    (2) Do nothing to prevent the Government's right to recover against 
third parties for any such loss or damage; and
    (3) Furnish the Government, upon the request of the Contracting 
Officer, at the Government's expense, all reasonable assistance and 
cooperation in obtaining recovery, including the prosecution of suit and 
the execution of instruments of assignment in favor of the Government.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 65 FR 50148, Aug. 17, 2000]



Sec. 252.247-7008  Evaluation of bids.

    As prescribed in 247.271-4(a), use the following provision:

                      Evaluation of Bids (DEC 1991)

    (a) The Government will evaluate bids on the basis of total 
aggregate price of all items within an area of performance under a given 
schedule.
    (1) An offeror must bid on all items within a specified area of 
performance for a given schedule. Failure to do so shall be cause for 
rejection of the bid for that area of performance of that Schedule. If 
there is to be no charge for an item, an entry such as ``No Charge,'' or 
the letters ``N/C'' or ``0,'' must be made in the unit price column of 
the Schedule.
    (2) Any bid which stipulates minimum charges or graduated prices for 
any or all items shall be rejected for that area of performance within 
the Schedule.
    (b) In addition to other factors, the Contracting Officer will 
evaluate bids on the basis of advantages or disadvantages to the 
Government that might result from making more than one award (multiple 
awards).
    (1) In making this evaluation, the Contracting Officer will assume 
that the administrative cost to the Government for issuing and 
administering each contract awarded under this solicitation would be 
$500.
    (2) Individual awards will be for the items and combinations of 
items which result in the lowest aggregate cost to the Government, 
including the administrative costs in paragraph (b)(1).
    (c) When drayage is necessary for the accomplishment of any item in 
the bid schedule, the Offeror shall include in the unit price any costs 
for bridge or ferry tolls, road use charges or similar expenses.
    (d) Unless otherwise provided in this solicitation, the Offeror 
shall state prices in amounts per hundred pounds on gross or net 
weights, whichever is applicable. All charges shall be subject to, and 
payable on, the basis of 100 pounds minimum weight for unaccompanied 
baggage and a 500 pound minimum weight for household goods, net or gross 
weight, whichever is applicable.

                           (End of provision)

    Alternate I (DEC 1991). As prescribed in 247.271-4(a), add the 
following paragraph (e) to the basic clause:

    (e) Notwithstanding paragraph (a), when ``additional services'' are 
added to any schedule, such ``additional services'' items will not be 
considered in the evaluation of bids.



Sec. 252.247-7009  Award.

    As prescribed in 247.271-4(b), use the following provision:

                            Award (DEC 1991)

    (a) The Government shall make award by area to the qualified low 
bidder under each of the specified schedules to the extent of the 
bidder's stated guaranteed daily capability as provided in this 
solicitation and the Estimated Quantities Schedule.
    (b) The Government reserves the right to make an award of two or 
more areas to a single bidder if such award will result in an overall 
lower estimated cost to the Government.
    (c) The Government also reserves the right to award additional 
contracts, as a result of this solicitation, to the extent necessary to 
meet its estimated maximum daily requirements.

[[Page 458]]

                           (End of provision)



Sec. 252.247-7010  Scope of contract.

    As prescribed in 247.271-4(d), use the following clause:

                      Scope of Contract (DEC 1991)

    (a) The Contractor shall furnish services and materials for the 
preparation of personal property (including servicing of appliances) for 
movement or storage, drayage and related services. Unless otherwise 
indicated in the Schedule, the Contractor shall--
    (1) Furnish all materials except Government-owned containers 
(Federal Specification PPP-B-580), all equipment, plant and labor; and
    (2) Perform all work in accomplishing containerization of personal 
property for overseas or domestic movement or storage, including--
    (i) Stenciling;
    (ii) Cooperage;
    (iii) Drayage of personal property in connection with other 
services;
    (iv) Decontainerization of inbound shipments of personal property; 
and
    (v) The handling of shipments into and out of the Contractor's 
facility.
    (b) Excluded from the scope of this contract is the furnishing of 
like services or materials which are provided incident to complete 
movement of personal property when purchased by the Through Government 
Bill of Lading or other method/mode of shipment or property to be moved 
under the Do-It-Yourself moving program or otherwise moved by the owner.

                             (End of clause)



Sec. 252.247-7011  Period of contract.

    As prescribed in 247.271-4(e), use the following clause:

                      Period of Contract (OCT 2001)

    (a) This contract begins January 1, ----, and ends December 31, ----
, both dates inclusive. Any work ordered before, and not completed by 
the expiration date shall be governed by the terms of this contract.
    (b) The Government will not place new orders under this contract 
that require that performance commence more than 15 days after the 
expiration date.
    (c) The Government may place orders required for the completion of 
services (for shipments in the Contractor's possession) for 180 days 
past the expiration date.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 66 FR 49861, Oct. 1, 2001]



Sec. 252.247-7012  Ordering limitation.

    As prescribed in 247.271-4(g), use the following clause:

                     Ordering Limitation (DEC 1991)

    (a) The Government will place orders for items of supplies or 
services with the contractor awarded the initial contract to the extent 
of the contractor's guaranteed maximum daily capability. However, the 
contractor may accept an additional quantity in excess of its capability 
to accommodate a single order.
    (b) Orders for additional requirements will be placed in a like 
manner with the next higher contractor to the extent of its guaranteed 
maximum daily capability. The Government will repeat this procedure 
until its total daily requirement is fulfilled.
    (c) In the event the procedure in paragraphs (a) and (b) does not 
fulfill the Government's total daily requirement, the Government may 
offer additional orders under the contract to contractors without regard 
to their guaranteed maximum daily capability.

                             (End of clause)



Sec. 252.247-7013  Contract areas of performance.

    As prescribed in 247.271-4(h), use the following clause and complete 
paragraph (b) by defining each area of performance as required (see 
247.271-2(b)):

                Contract Areas of Performance (DEC 1991)

    (a) The Government will consider all areas of performance described 
in paragraph (b) as including the Contractor's facility, regardless of 
geographical location.
    (b) The Contractor shall perform services within the following 
defined areas of performance, which include terminals identified 
therein: --------.

                             (End of clause)



Sec. 252.247-7014  Demurrage.

    As prescribed in 247.271-4(i), use the following clause:

                          Demurrage (DEC 1991)

    The Contractor shall be liable for all demurrage, detention, or 
other charges as a result of its failure to load or unload trucks, 
freight cars, freight terminals, vessel piers, or warehouses within the 
free time allowed under applicable rules and tariffs.

[[Page 459]]

                             (End of clause)



Sec. 252.247-7015  Requirements.

    As prescribed in 216.506(d), substitute the following paragraph (f) 
for paragraph (f) of the basic clause at FAR 52.216-21.

                         Alternate I (DEC 1991)

    (f) Orders issued during the effective period of this contract and 
not completed within that time shall be completed by the Contractor 
within the time specified in the order. The rights and obligations of 
the Contractor and the Government for those orders shall be governed by 
the terms of this contract to the same extent as if completed during the 
effective period.

[56 FR 36479, July 31, 1991, as amended at 65 FR 63805, Oct. 25, 2000]



Sec. 252.247-7016  Contractor liability for loss or damage.

    As prescribed in 247.271-4(k), use the following clause:

           Contractor Liability for Loss or Damage (DEC 1991)

    (a) Definitions. As used in this clause--
    Article means any shipping piece or package and its contents.
    Schedule means the level of service for which specific types of 
traffic apply as described in DoD 4500.34-R, Personal Property Traffic 
Management Regulation.
    (b) For shipments picked up under Schedule I, Outbound Services, or 
delivered under Schedule II, Inbound Services--
    (1) If notified within one year after delivery that the owner has 
discovered loss or damage to the owner's property, the Contractor agrees 
to indemnify the Government for loss or damage to the property which 
arises from any cause while it is in the Contractor's possession. The 
Contractor's liability is--
    (i) Non-negligent damage. For any cause, other than the Contractor's 
negligence, indemnification shall be at a rate not to exceed sixty cents 
per pound per article.
    (ii) Negligent damage. When loss or damage is caused by the 
negligence of the Contractor, the liability is for the full cost of 
satisfactory repair or for the current replacement value of the article.
    (2) The Contractor shall make prompt payment to the owner of the 
property for any loss or damage for which the Contractor is liable.
    (3) In the absence of evidence or supporting documentation which 
places liability on a carrier or another contractor, the destination 
contractor shall be presumed to be liable for the loss or damage, if 
timely notified.
    (c) For shipments picked up or delivered under Schedule III, Intra-
City and Intra-Area--
    (1) If notified of loss or damage within 75 days following delivery, 
the Contractor agrees to indemnify the Government for loss or damage to 
the owner's property.
    (2) The Contractor's liability shall be for the full cost of 
satisfactory repair, or for the current replacement value of the article 
less depreciation, up to a maximum liability of $1.25 per pound times 
the net weight of the shipment.
    (3) The Contractor has full salvage rights to damaged items which 
are not repairable and for which the Government has received 
compensation at replacement value.

                             (End of clause)



Sec. 252.247-7017  Erroneous shipments.

    As prescribed in 247.271-4(l), use the following clause:

                     Erroneous Shipments (DEC 1991)

    (a) The Contractor shall--
    (1) Forward to the rightful owner, articles of personal property 
inadvertently packed with goods of other than the rightful owner.
    (2) Ensure that all shipments are stenciled correctly. When a 
shipment is sent to an incorrect address due to incorrect stenciling by 
the Contractor, the Contractor shall forward it to its rightful owner.
    (3) Deliver to the designated air or surface terminal all pieces of 
a shipment, in one lot, at the same time. The Contractor shall forward 
to the owner any pieces of one lot not included in delivery, and 
remaining at its facility after departure of the original shipment.
    (b) Forwarding under paragraph (a) shall be--
    (1) With the least possible delay;
    (2) By a mode of transportation selected by the Contracting Officer; 
and
    (3) At the Contractor's expense.

                             (End of clause)



Sec. 252.247-7018  Subcontracting.

    As prescribed in 247.271-4(m), use the following clause:

                        Subcontracting (DEC 1991)

    The Contractor shall not subcontract without the prior written 
approval of the Contracting Officer. The facilities of any approved 
subcontractor shall meet the minimum standards required by this 
contract.

[[Page 460]]

                             (End of clause)



Sec. 252.247-7019  Drayage.

    As prescribed in 247.271-4(n), use the following clause:

                           Drayage (DEC 1991)

    (a) Drayage included for Schedule I, Outbound, applies in those 
instances when a shipment requires drayage to an air, water, or other 
terminal for onward movement after completion of shipment preparation by 
the Contractor. Drayage not included is when it is being moved from a 
residence or other pickup point to the Contractor's warehouse for onward 
movement by another freight company, carrier, etc.
    (b) Drayage included for Schedule II, Inbound, applies in those 
instances when shipment is delivered, as ordered, from a destination 
Contractor's facility or other destination point to the final delivery 
point. Drayage not included is when shipment or partial removal of items 
from shipment is performed and prepared for member's pickup at 
destination delivery point.
    (c) The Contractor will reposition empty Government containers--
    (1) Within the area of performance;
    (2) As directed by the Contracting Officer; and
    (3) At no additional cost to the Government.

                             (End of clause)



Sec. 252.247-7020  Additional services.

    As prescribed in 247.271-4(o), use the following clause:

                     Additional Services (AUG 2000)

    The Contractor shall provide additional services not included in the 
Schedule, but required for satisfactory completion of the services 
ordered under this contract, at a rate comparable to the rate for like 
services as contained in tenders on file with the Military Traffic 
Management Command in effect at time of order.

                             (End of clause)

[65 FR 50148, Aug. 17, 2000]



Sec. 252.247-7021  Returnable containers other than cylinders.

    As prescribed in 247.305-70, use the following clause:

          Returnable Containers Other Than Cylinders (MAY 1995)

    (a) Returnable container, as used in this clause, includes reels, 
spools, drums, carboys, liquid petroleum gas containers, and other 
returnable containers when the Contractor retains title to the 
container.
    (b) Returnable containers shall remain the Contractor's property but 
shall be loaned without charge to the Government for a period of ------
(insert number of days) calendar days after delivery to the f.o.b. point 
specified in the contract. Beginning with the first day after the loan 
period expires, to and including the day the containers are delivered to 
the Contractor (if the original delivery was f.o.b. origin) or are 
delivered or are made available for delivery to the Contractor's 
designated carrier (if the original delivery was f.o.b. destination), 
the Government shall pay the Contractor a rental of $------ (insert 
dollar amount for rental) per container per day, computed separately for 
containers for each type, size, and capacity, and for each point of 
delivery named in the contract. No rental shall accrue to the Contractor 
in excess of the replacement value per container specified in paragraph 
(c) of this clause.
    (c) For each container lost or damaged beyond repair while in the 
Government's possession, the Government shall pay to the Contractor the 
replacement value as follows, less the allocable rental paid for that 
container:

________________________________________________________________________
(Insert the container types, sizes, capacities, and associated 
replacement values.)

    These containers shall become Government property.
    (d) If any lost container is located within ------ (insert number of 
days) calendar days after payment by the Government, it may be returned 
to the Contractor by the Government, and the Contractor shall pay to the 
Government the replacement value, less rental computed in accordance 
with paragraph (b) of this clause, beginning at the expiration of the 
loan period specified in paragraph (b) of this clause, and continuing to 
the date on which the container was delivered to the Contractor.

                             (End of clause)

[60 FR 29503, June 5, 1995]



Sec. 252.247-7022  Representation of extent of transportation by sea.

    As prescribed in 247.573(a), use the following provision:

      Representation of Extent of Transportation By Sea (AUG 1992)

    (a) The Offeror shall indicate by checking the appropriate blank in 
paragraph (b) of this provision whether transportation of supplies by 
sea is anticipated under the resultant contract. The term supplies is 
defined in the Transportation of Supplies by Sea clause of this 
solicitation.

[[Page 461]]

    (b) Representation. The Offeror represents that it--


Sec. -------- Does anticipate that supplies will be transported by sea 
          in the performance of any contract or subcontract resulting 
          from this solicitation.

Sec. -------- Does not anticipate that supplies will be transported by 
          sea in the performance of any contract or subcontract 
          resulting from this solicitation.
    (c) Any contract resulting from this solicitation will include the 
Transportation of Supplies by Sea clause. If the Offeror represents that 
it will not use ocean transportation, the resulting contract will also 
include the Defense FAR Supplement clause at 252.247-7024, Notification 
of Transportation of Supplies by Sea.

                           (End of provision)

[56 FR 67222, Dec. 30, 1991, as amended at 57 FR 42633, Sept. 15, 1992]



Sec. 252.247-7023  Transportation of supplies by sea.

    As prescribed in 247.573(b)(1), use the following clause:

              Transportation of Supplies by Sea (MAY 2002)

    (a) Definitions. As used in this clause--
    (1) Components means articles, materials, and supplies incorporated 
directly into end products at any level of manufacture, fabrication, or 
assembly by the Contractor or any subcontractor.
    (2) Department of Defense (DoD) means the Army, Navy, Air Force, 
Marine Corps, and defense agencies.
    (3) Foreign flag vessel means any vessel that is not a U.S.-flag 
vessel.
    (4) Ocean transportation means any transportation aboard a ship, 
vessel, boat, barge, or ferry through international waters.
    (5) Subcontractor means a supplier, materialman, distributor, or 
vendor at any level below the prime contractor whose contractual 
obligation to perform results from, or is conditioned upon, award of the 
prime contract and who is performing any part of the work or other 
requirement of the prime contract.
    (6) Supplies means all property, except land and interests in land, 
that is clearly identifiable for eventual use by or owned by the DoD at 
the time of transportation by sea. (i) An item is clearly identifiable 
for eventual use by the DoD if, for example, the contract documentation 
contains a reference to a DoD contract number or a military destination.
    (ii) Supplies includes (but is not limited to) public works; 
buildings and facilities; ships; floating equipment and vessels of every 
character, type, and description, with parts, subassemblies, 
accessories, and equipment; machine tools; material; equipment; stores 
of all kinds; end items; construction materials; and components of the 
foregoing.
    (7) U.S.-flag vessel means a vessel of the United States or 
belonging to the United States, including any vessel registered or 
having national status under the laws of the United States.
    (b)(1) The Contractor shall use U.S.-flag vessels when transporting 
any supplies by sea under this contract.
    (2) A subcontractor transporting supplies by sea under this contract 
shall use U.S.-flag vessels if--
    (i) This contract is a construction contract; or
    (ii) The supplies being transported are--
    (A) Noncommercial items; or
    (B) Commercial items that--
    (1) The Contractor is reselling or distributing to the Government 
without adding value (generally, the Contractor does not add value to 
items that it contracts for f.o.b. destination shipment);
    (2) Are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations; or
    (3) Are commissary or exchange cargoes transported outside of the 
Defense Transportation System in accordance with 10 U.S.C. 2643.
    (c) The Contractor and its subcontractors may request that the 
Contracting Officer authorize shipment in foreign-flag vessels, or 
designate available U.S.-flag vessels, if the Contractor or a 
subcontractor believes that--
    (1) U.S.-flag vessels are not available for timely shipment;
    (2) The freight charges are inordinately excessive or unreasonable; 
or
    (3) Freight charges are higher than charges to private persons for 
transportation of like goods.
    (d) The Contractor must submit any request for use of other than 
U.S.-flag vessels in writing to the Contracting Officer at least 45 days 
prior to the sailing date necessary to meet its delivery schedules. The 
Contracting Officer will process requests submitted after such date(s) 
as expeditiously as possible, but the Contracting Officer's failure to 
grant approvals to meet the shipper's sailing date will not of itself 
constitute a compensable delay under this or any other clause of this 
contract. Requests shall contain at a minimum--
    (1) Type, weight, and cube of cargo;
    (2) Required shipping date;
    (3) Special handling and discharge requirements;
    (4) Loading and discharge points;
    (5) Name of shipper and consignee;
    (6) Prime contract number; and

[[Page 462]]

    (7) A documented description of efforts made to secure U.S.-flag 
vessels, including points of contact (with names and telephone numbers) 
with at least two U.S.-flag carriers contacted. Copies of telephone 
notes, telegraphic and facsimile message or letters will be sufficient 
for this purpose.
    (e) The Contractor shall, within 30 days after each shipment covered 
by this clause, provide the Contracting Officer and the Maritime 
Administration, Office of Cargo Preference, U.S. Department of 
Transportation, 400 Seventh Street SW., Washington, DC 20590, one copy 
of the rated on board vessel operating carrier's ocean bill of lading, 
which shall contain the following information:
    (1) Prime contract number;
    (2) Name of vessel;
    (3) Vessel flag of registry;
    (4) Date of loading;
    (5) Port of loading;
    (6) Port of final discharge;
    (7) Description of commodity;
    (8) Gross weight in pounds and cubic feet if available;
    (9) Total ocean freight in U.S. dollars; and
    (10) Name of the steamship company.
    (f) The Contractor shall provide with its final invoice under this 
contract a representation that to the best of its knowledge and belief--
    (1) No ocean transportation was used in the performance of this 
contract;
    (2) Ocean transportation was used and only U.S.-flag vessels were 
used for all ocean shipments under the contract;
    (3) Ocean transportation was used, and the Contractor had the 
written consent of the Contracting Officer for all non-U.S.-flag ocean 
transportation; or
    (4) Ocean transportation was used and some or all of the shipments 
were made on non-U.S.-flag vessels without the written consent of the 
Contracting Officer. The Contractor shall describe these shipments in 
the following format:

----------------------------------------------------------------------------------------------------------------
                                           Item Description       Contract Line Items            Quantity
----------------------------------------------------------------------------------------------------------------
Total................................
----------------------------------------------------------------------------------------------------------------

    (g) If the final invoice does not include the required 
representation, the Government will reject and return it to the 
Contractor as an improper invoice for the purposes of the Prompt Payment 
clause of this contract. In the event there has been unauthorized use of 
non-U.S.-flag vessels in the performance of this contract, the 
Contracting Officer is entitled to equitably adjust the contract, based 
on the unauthorized use.
    (h) In the award of subcontracts for the types of supplies described 
in paragraph (b)(2) of this clause, the Contractor shall flow down the 
requirements of this clause as follows:
    (1) The Contractor shall insert the substance of this clause, 
including this paragraph (h), in subcontracts that exceed the simplified 
acquisition threshold in part 2 of the Federal Acquisition Regulation.
    (2) The Contractor shall insert the substance of paragraphs (a) 
through (e) of this clause, and this paragraph (h), in subcontracts that 
are at or below the simplified acquisition threshold in part 2 of the 
Federal Acquisition Regulation.

                             (End of clause)

    Alternate I (MAR 2000). As prescribed in 247.573(b)(2), substitute 
the following paragraph (b) for paragraph (b) of the basic clause:

    (b)(1) The Contractor shall use U.S.-flag vessels when transporting 
any supplies by sea under this contract.
    (2) A subcontractor transporting supplies by sea under this contract 
shall use U.S.-flag vessels if the supplies being transported are--
    (i) Noncommercial items; or
    (ii) Commercial items that--
    (A) The Contractor is reselling or distributing to the Government 
without adding value (generally, the Contractor does not add value to 
items that it subcontracts for f.o.b. destination shipment);
    (B) Are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations (Note: This contract requires shipment of 
commercial items in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations); or
    (C) Are commissary or exchange cargoes transported outside of the 
Defense Transportation System in accordance with 10 U.S.C. 2643.

    Alternate II (MAR 2000). As prescribed in 247.573(b)(3), substitute 
the following paragraph (b) for paragraph (b) of the basic clause:

    (b)(1) The Contractor shall use U.S.-flag vessels when transporting 
any supplies by sea under this contract.
    (2) A subcontractor transporting supplies by sea under this contract 
shall use U.S.-flag vessels if the supplies being transported are--
    (i) Noncommercial items; or
    (ii) Commercial items that--
    (A) The Contractor is reselling or distributing to the Government 
without adding value (generally, the Contractor does not add value to 
items that it subcontracts for f.o.b. destination shipment),
    (B) Are shipped in direct support of U.S. military contingency 
operations, exercises,

[[Page 463]]

or forces deployed in humanitarian or peacekeeping operations; or
    (C) Are commissary or exchange cargoes transported outside of the 
Defense Transportation System in accordance with 10 U.S.C. 2643 (Note: 
This contract requires transportation of commissary or exchange cargoes 
outside of the Defense Transportation System in accordance with 10 
U.S.C. 2643).

                        Alternate III (MAY 2002)

    As prescribed in 247.573(b)(4), substitute the following paragraph 
(f) for paragraphs (f), (g), and (h) of the basic clause:

    (f) The Contractor shall insert the substance of this clause, 
including this paragraph (f), in subcontracts that are for a type of 
supplies described in paragraph (b)(2) of this clause.

[56 FR 36479, July 31, 1991, as amended at 60 FR 61602, Nov. 30, 1995; 
65 FR 14401, Mar. 16, 2000; 67 FR 38022, May 31, 2002]



Sec. 252.247-7024  Notification of transportation of supplies by sea.

    As prescribed in 247.573(c), use the following clause:

      Notification of Transportation of Supplies by Sea (MAR 2000)

    (a) The Contractor has indicated by the response to the solicitation 
provision, Representation of Extent of Transportation by Sea, that it 
did not anticipate transporting by sea any supplies. If, however, after 
the award of this contract, the Contractor learns that supplies, as 
defined in the Transportation of Supplies by Sea clause of this 
contract, will be transported by sea, the Contractor--
    (1) Shall notify the Contracting Officer of that fact; and
    (2) Hereby agrees to comply with all the terms and conditions of the 
Transportation of Supplies by Sea clause of this contract.
    (b) The Contractor shall include this clause; including this 
paragraph (b), revised as necessary to reflect the relationship of the 
contracting parties--
    (1) In all subcontracts under this contract, if this contract is a 
construction contract; or
    (2) If this contract is not a construction contract, in all 
subcontracts under this contract that are for--
    (i) Noncommercial items; or
    (ii) Commercial items that--
    (A) The Contractor is reselling or distributing to the Government 
without adding value (generally, the Contractor does not add value to 
items that it subcontracts for f.o.b. destination shipment);
    (B) Are shipped in direct support of U.S. military contingency 
operations, exercises, or forces deployed in humanitarian or 
peacekeeping operations; or
    (C) Are commissary or exchange cargoes transported outside of the 
Defense Transportation System in accordance with 10 U.S.C. 2643.

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 61603, Nov. 30, 1995; 
65 FR 14402, Mar. 16, 2000]



Sec. 252.247-7025  Reflagging or repair work.

    As prescribed in 247.573(d), use the following clause:

                  Reflagging or Repair Work (JUN 2005)

    (a) Definition.
    Reflagging or repair work, as used in this clause, means work 
performed on a vessel--
    (1) To enable the vessel to meet applicable standards to become a 
vessel of the United States; or
    (2) To convert the vessel to a more useful military configuration.
    (b) Requirement. Unless the Secretary of Defense waives this 
requirement, reflagging or repair work shall be performed in the United 
States or its outlying areas, if the reflagging or repair work is 
performed--
    (1) On a vessel for which the Contractor submitted an offer in 
response to the solicitation for this contract; and
    (2) Prior to acceptance of the vessel by the Government.

                             (End of clause)

[60 FR 29503, June 5, 1995, as amended at 70 FR 35548, June 21, 2005]



Sec. 252.249-7000  Special termination costs.

    As prescribed in 249.501-70, use the following clause:

                  Special Termination Costs (DEC 1991)

    (a) Definition. Special termination costs, as used in this clause, 
means only costs in the following categories as defined in part 31 of 
the Federal Acquisition Regulation (FAR)--
    (1) Severance pay, as provided in FAR 31.205-6(g);
    (2) Reasonable costs continuing after termination, as provided in 
FAR 31.205-42(b);
    (3) Settlement of expenses, as provided in FAR 31.205-42(g);
    (4) Costs of return of field service personnel from sites, as 
provided in FAR 31.205-35 and FAR 31.205-46(c); and
    (5) Costs in paragraphs (a) (1), (2), (3), and (4) of this clause to 
which subcontractors may be entitled in the event of termination.

[[Page 464]]

    (b) Notwithstanding the Limitation of Cost/Limitation of Funds 
clause of this contract, the Contractor shall not include in its 
estimate of costs incurred or to be incurred, any amount for special 
termination costs to which the Contractor may be entitled in the event 
this contract is terminated for the convenience of the Government.
    (c) The Contractor agrees to perform this contract in such a manner 
that the Contractor's claim for special termination costs will not 
exceed $--------. The Government shall have no obligation to pay the 
Contractor any amount for the special termination costs in excess of 
this amount.
    (d) In the event of termination for the convenience of the 
Government, this clause shall not be construed as affecting the 
allowability of special termination costs in any manner other than 
limiting the maximum amount of the costs payable by the Government.
    (e) This clause shall remain in full force and effect until this 
contract is fully funded.

                             (End of clause)



Sec. 252.249-7001  [Reserved]



Sec. 252.249-7002  Notification of anticipated contract termination or 
          reduction.

    As prescribed in 249.7003(c), use the following clause:

 Notification of Anticipated Contract Termination or Reduction(DEC 1996)

    (a) Definitions. Major defense program means a program that is 
carried out to produce or acquire a major system (as defined in 10 
U.S.C. 2302(5)) (see also DoD 5000.2-R, Mandatory Procedures for Major 
Defense Acquisition Programs (MDAPs) and Major Automated Information 
System (MAIS) Acquisition Programs).
    Substantial reduction means a reduction of 25 percent or more in the 
total dollar value of funds obligated by the contract.
    (b) Section 1372 of the National Defense Authorization Act for 
Fiscal Year 1994 (Pub. L. 103-160) and Section 824 of the National 
Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201) are 
intended to help establish benefit eligibility under the Job Training 
Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD 
contractors and subcontractors adversely affected by contract 
terminations or substantial reductions under major defense programs.
    (c) Notice to employees and state and local officials. Within 2 
weeks after the Contracting Officer notifies the Contractor that 
contract funding will be terminated or substantially reduced, the 
Contractor shall provide notice of such anticipated termination or 
reduction to--
    (1) Each employee representative of the Contractor's employees whose 
work is directly related to the defense contract; or
    (2) If there is no such representative, each such employee;
    (3) The State dislocated worker unit or office described in section 
311(b)(2) of the Job Training Partnership Act (29 U.S.C. 1661(b)(2)); 
and
    (4) The chief elected official of the unit of general local 
government within which the adverse effect may occur.
    (d) Notice to subcontractors. Not later than 60 days after the 
Contractor receives the Contracting Officer's notice of the anticipated 
termination or reduction, the Contractor shall--
    (1) Provide notice of the anticipated termination or reduction to 
each first-tier subcontractor with a subcontract of $500,000 or more; 
and
    (2) Require that each such subcontractor--
    (i) Provide notice to each of its subcontractors with a subcontract 
of $100,000 or more; and
    (ii) Impose a similar notice and flowdown requirement to 
subcontractors with subcontracts of $100,000 or more.
    (e) The notice provided an employee under paragraph (c) of this 
clause shall have the same effect as a notice of termination to the 
employee for the purposes of determining whether such employee is 
eligible for training, adjustment assistance, and employment services 
under section 325 or 325A of the Job Training Partnership Act (29 U.S.C. 
1662d, 1662d-1). If the Contractor has specified that the anticipated 
contract termination or reduction is not likely to result in plant 
closure or mass layoff, as defined in 29 U.S.C. 2101, the employee shall 
be eligible only for services under section 314(b) and paragraphs (1) 
through (14), (16), and (18) of section 314(c) of the Job Training 
Partnership Act (29 U.S.C. 1661c(b) and paragraphs (1) through (14), 
(16), and (18) of section 1661c(c)).

                             (End of clause)

[61 FR 64637, Dec. 6, 1996]



Sec. 252.251-7000  Ordering from Government supply sources.

    As prescribed in 251.107, use the following clause:

           Ordering From Government Supply Sources (NOV 2004)

    (a) When placing orders under Federal Supply Schedules, Personal 
Property Rehabilitation Price Schedules, or Enterprise Software 
Agreements, the Contractor shall follow the terms of the applicable 
schedule or agreement and authorization. Include in each order:

[[Page 465]]

    (1) A copy of the authorization (unless a copy was previously 
furnished to the Federal Supply Schedule, Personal Property 
Rehabilitation Price Schedule, or Enterprise Software Agreement 
contractor).
    (2) The following statement: Any price reductions negotiated as part 
of an Enterprise Software Agreement issued under a Federal Supply 
Schedule contract shall control. In the event of any other 
inconsistencies between an Enterprise Software Agreement, established as 
a Federal Supply Schedule blanket purchase agreement, and the Federal 
Supply Schedule contract, the latter shall govern.
    (3) The completed address(es) to which the Contractor's mail, 
freight, and billing documents are to be directed.
    (b) When placing orders under nonmandatory schedule contracts and 
requirements contracts, issued by the General Services Administration 
(GSA) Office of Information Resources Management, for automated data 
processing equipment, software and maintenance, communications equipment 
and supplies, and teleprocessing services, the Contractor shall follow 
the terms of the applicable contract and the procedures in paragraph (a) 
of this clause.
    (c) When placing orders for Government stock, the Contractor shall--
    (1) Comply with the requirements of the Contracting Officer's 
authorization, using FEDSTRIP or MILSTRIP procedures, as appropriate;
    (2) Use only the GSA Form 1948-A, Retail Services Shopping Plate, 
when ordering from GSA Self-Service Stores;
    (3) Order only those items required in the performance of Government 
contracts; and
    (4) Pay invoices from Government supply sources promptly. For 
purchases made from DoD supply sources, this means within 30 days of the 
date of a proper invoice. The Contractor shall annotate each invoice 
with the date of receipt. For purposes of computing interest for late 
Contractor payments, the Government's invoice is deemed to be a demand 
for payment in accordance with the Interest clause of this contract. The 
Contractor's failure to pay may also result in the DoD supply source 
refusing to honor the requisition (see DFARS 251.102(f)) or in the 
Contracting Officer terminating the Contractor's authorization to use 
DoD supply sources. In the event the Contracting Officer decides to 
terminate the authorization due to the Contractor's failure to pay in a 
timely manner, the Contracting Officer shall provide the Contractor with 
prompt written notice of the intent to terminate the authorization and 
the basis for such action. The Contractor shall have 10 days after 
receipt of the Government's notice in which to provide additional 
information as to why the authorization should not be terminated. The 
termination shall not provide the Contractor with an excusable delay for 
failure to perform or complete the contract in accordance with the terms 
of the contract, and the Contractor shall be solely responsible for any 
increased costs.
    (d) Only the Contractor may request authorization for subcontractor 
use of Government supply sources. The Contracting Officer will not grant 
authorizations for subcontractor use without approval of the Contractor.
    (e) Government invoices shall be submitted to the Contractor's 
billing address, and Contractor payments shall be sent to the Government 
remittance address specified below:

Contractor's Billing Address (include point of contact and telephone 
number):

Government Remittance Address (include point of contact and telephone 
number):

                             (End of clause)

[56 FR 36479, July 31, 1991, as amended at 60 FR 29503, June 5, 1995; 67 
FR 65512, Oct. 25, 2002; 69 FR 67858, Nov. 22, 2004]



Sec. 252.251-7001  Use of Interagency Fleet Management System (IFMS) 
          vehicles and related services.

    As prescribed in 251.205, use the following clause:

 Use of Interagency Fleet Management System (IFMS) Vehicles and Related 
                           Services (DEC 1991)

    (a) The Contractor, if authorized use of IFMS vehicles, shall submit 
requests for five or fewer vehicles and related services in writing to 
the appropriate General Services Administration (GSA) Regional Customer 
Service Bureau, Attention: Motor Equipment Activity. Submit requests for 
more than five vehicles to GSA headquarters: General Services 
Administration, FTM, Washington, DC 20406. Include the following in each 
request:
    (1) Two copies of the agency authorization to obtain vehicles and 
related services from GSA.
    (2) The number of vehicles and related services required and the 
period of use.
    (3) A list of the Contractor's employees authorized to request 
vehicles and related services.
    (4) A list of the makes, models, and serial numbers of Contractor-
owned or leased equipment authorized to be serviced.
    (5) Billing instructions and address.
    (b) The Contractor should make requests for any unusual quantities 
of vehicles as far in advance as possible.
    (c) The Contractor shall establish and enforce suitable penalties 
for employees who use or authorize the use of Government vehicles for 
other than performance of Government contracts.

[[Page 466]]

    (d) The Contractor shall assume, without the right of reimbursement 
from the Government, the cost or expense of any use of IFMS vehicles and 
services not related to the performance of the contract.
    (e) Only the Contractor may request authorization for subcontractor 
use of IFMS vehicles. The Contracting Officer will not grant 
authorization for subcontractor use without approval of the Contractor.

                             (End of clause)

                             PART 253_FORMS

                   Subpart 253.2_Prescription of Forms

Sec.

Sec. 253.204 Administrative matters.

Sec. 253.204-70 DD Form 350, Individual Contracting Action Report.

Sec. 253.208 Required sources of supplies and services.

Sec. 253.208-1 DD Form 448, Military Interdepartmental Purchase Request.

Sec. 253.208-2 DD Form 448-2, Acceptance of MIPR.

Sec. 253.209 Contractor qualifications.

Sec. 253.209-1 Responsible prospective contractors.

Sec. 253.213 Simplified acquisition procedures (SF's 18, 30, 44, 1165, 
          1449, and OF's 336, 347, and 348).

Sec. 253.213-70 Completion of DD Form 1155, Order for Supplies or 
          Services.

Sec. 253.215 Contracting by negotiation.

Sec. 253.215-70 DD Form 1547, Record of Weighted Guidelines Application.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

    Source: 56 FR 36554, July 31, 1991, unless otherwise noted.

                   Subpart 253.2_Prescription of Forms



Sec. 253.204  Administrative matters.



Sec. 253.204-70  DD Form 350, Individual Contracting Action Report.

    Follow the instructions at PGI 253.204-70 for completion of DD Form 
350.

[71 FR 44926, Aug. 8, 2006]



Sec. 253.208  Required sources of supplies and services.



Sec. 253.208-1  DD Form 448, Military Interdepartmental Purchase 
          Request.

    Follow the procedures at PGI 253.208-1 for use of DD Form 448.

[71 FR 39005, July 11, 2006]



Sec. 253.208-2  DD Form 448-2, Acceptance of MIPR.

    Follow the procedures at PGI 253.208-2 for use of DD Form 448-2.

[71 FR 39005, July 11, 2006]



Sec. 253.209  Contractor qualifications.



Sec. 253.209-1  Responsible prospective contractors.

    (a) SF 1403, Preaward Survey of Prospective Contractor (General). 
(i) The factors in Section III, Block 19, generally mean--
    (A) Technical capability. An assessment of the prospective 
contractor's key management personnel to determine if they have the 
basic technical knowledge, experience, and understanding of the 
requirements necessary to produce the required product or provide the 
required service.
    (B) Production capability. An evaluation of the prospective 
contractor's ability to plan, control, and integrate manpower, 
facilities, and other resources necessary for successful contract 
completion. This includes--
    (1) An assessment of the prospective contractor's possession of, or 
the ability to acquire, the necessary facilities, material, equipment, 
and labor; and
    (2) A determination that the prospective contractor's system 
provides for timely placement of orders and for vendor follow-up and 
control.
    (C) Quality assurance capability. An assessment of the prospective 
contractor's capability to meet the quality assurance requirements of 
the proposed contract. It may involve an evaluation of the prospective 
contractor's quality assurance system, personnel, facilities, and 
equipment.
    (D) Financial capability. A determination that the prospective 
contractor has or can get adequate financial resources to obtain needed 
facilities, equipment, materials, etc.

[[Page 467]]

    (E) Accounting system and related internal controls. An assessment 
by the auditor of the adequacy of the prospective contractor's 
accounting system and related internal controls as defined in 242.7501, 
Definition. Normally, a contracting officer will request an accounting 
system review when soliciting and awarding cost-reimbursement or 
incentive type contracts, or contracts which provide for progress 
payments based on costs or on a percentage or stage of completion.
    (ii) The factors in section III, Block 20, generally mean--
    (A) Government property control. An assessment of the prospective 
contractor's capability to manage and control Government property.
    (B) Transportation. An assessment of the prospective contractor's 
capability to follow the laws and regulations applicable to the movement 
of Government material, or overweight, oversized, hazardous cargo, etc.
    (C) Packaging. An assessment of the prospective contractor's ability 
to meet all contractual packaging requirements including preservation, 
unit pack, packing, marking, and unitizing for shipment.
    (D) Security clearance. A determination that the prospective 
contractor's facility security clearance is adequate and current. (When 
checked, the surveying activity will refer this factor to the Defense 
Security Service (DSS)).
    (E) Plant safety. An assessment of the prospective contractor's 
ability to meet the safety requirements in the solicitation.
    (F) Environmental/energy consideration. An evaluation of the 
prospective contractor's ability to meet specific environmental and 
energy requirements in the solicitation.
    (G) Flight operations and flight safety. An evaluation of the 
prospective contractor's ability to meet flight operation and flight 
safety requirements on solicitations involving the overhaul and repair 
of aircraft.
    (H) Other. If the contracting officer wants an assessment of other 
than major factors A-E and other factors A-G, check this factor. Explain 
the desired information in the Remarks sections.

[56 FR 36554, July 31, 1991, as amended at 60 FR 29504, June 5, 1995; 64 
FR 51077, Sept. 21, 1999]



Sec. 253.213  Simplified acquisition procedures (SF's 18, 30, 44, 1165, 
          1449, and OF's 336, 347, and 348).

    (f) DoD uses the DD Form 1155, Order for Supplies or Services, 
instead of OF 347; and OF 336, Continuation Sheet, instead of OF 348. 
Follow the procedures at PGI 253.213(f) for use of forms.

[71 FR 3413, Jan. 23, 2006]



Sec. 253.213-70  Completion of DD Form 1155, Order for Supplies or 
          Services.

    Follow the procedures at PGI 253.213-70 for completion of DD Form 
1155.

[71 FR 3413, Jan. 23, 2006]



Sec. 253.215  Contracting by negotiation.



Sec. 253.215-70  DD Form 1547, Record of Weighted Guidelines 
          Application.

    (a) Use the DD Form 1547 as prescribed in 215.404-70.
    (b) General instructions. (1) Report amounts as they relate to the 
price of the contract action without regard to funding status (e.g., 
amounts obligated).
    (2) Express all dollar values to the nearest whole value (e.g., 
$200,008.55=$200,009).
    (3) Express all percentages to the nearest hundredth or thousandth 
as appropriate (e.g., interest rate--8.25% or 8.257%).
    (4) If the contracting office is exempt from reporting to the DoD 
management information system on profit and fee statistics (see 215.404-
76), do not complete Block 1, 4, 5, 6, 7, 8, 9, 10, 11, or 12.
    (5) Report an option amount for additional quantities as a separate 
contract action when exercised.
    (6) Even though fixed-price type contract actions are negotiated on 
the basis of total price, prepare the negotiation summary portion of the 
DD Form 1547 showing the contracting officer's best estimates of cost 
and profit.
    (7) For indefinite-delivery type contracts, prepare a consolidated 
DD Form 1547 for annual requirements expected

[[Page 468]]

to exceed the cost or pricing data threshold.
    (8) Prepare a consolidated DD Form 1547, if possible, when multiple 
profit rates apply to a single negotiation.
    (c) Specific instructions for completion of DD Form 1547--(1) Block 
1--report no. Enter the four-digit local control number followed by a 
dash and the last two digits of the fiscal year (e.g., 0004-90 for 4th 
action in fiscal year 1990). Each field contracting office participating 
in profit reporting shall establish a control system for consecutively 
numbering completed DD Forms 1547. Always start with 0001 at the 
beginning of each fiscal year and always use four digits. This number 
will identify the specific DD Form 1547 in DoD's management information 
system and will be used for follow-up actions.
    (2) Block 2--basic procurement instrument identification no. Enter 
the identifying contract number assigned per 204.70 (Block B1A of the DD 
350).
    (3) Block 3--SPIIN. Enter the supplemental procurement instrument 
identification number for supplemental agreements or other 
modifications, assigned per 204.70, (Block B2 of the DD 350).
    (4) Block 4--date of action--(i) Year. Enter the last two digits of 
the year the action was negotiated (e.g., 90 for 1990).
    (ii) Month. Enter the two digit number for the month the action was 
negotiated (e.g., 09 for September).
    (5) Block 5--contracting office code. Enter the code assigned the 
contracting office per DoD Procurement Coding Manual, Volume III, (Block 
A3 of the DD 350).
    (6) Block 6--name of contractor. Enter the contractor's name 
(including division name), (Block B5D of the DD 350).
    (7) Block 7--DUNS number. Enter the contractor establishment code 
number, (Block B5A of the DD 350).
    (8) Block 8--federal supply code. Enter the code used in Block B12A 
of the DD 350.
    (9) Block 9--DOD claimant program. Enter the code used in Block B12B 
of the DD 350.
    (10) Block 10--contract type code. Enter the appropriate code--

------------------------------------------------------------------------
                  Description                             Code
------------------------------------------------------------------------
FPR (all types)...............................  A
FPI (all types)...............................  L
FFP...........................................  J
FP(E).........................................  K
CPFF..........................................  U
CPIF (all types)..............................  V
------------------------------------------------------------------------

    (11) Block 11--type effort. Enter the appropriate code--

------------------------------------------------------------------------
                           Description                             Code
------------------------------------------------------------------------
Manufacturing...................................................       1
Research and Development........................................       2
Services........................................................       3
------------------------------------------------------------------------

    (12) Block 12--use code. Enter the appropriate code for use of the 
weighted guidelines method--

------------------------------------------------------------------------
                           Description                              Code
------------------------------------------------------------------------
Standard weighted guidelines method (215.404-71-2(c)(1)).........      2
Alternate structured approach (215.404-73).......................      4
Modified weighted guidelines approach (215.404-72)...............      5
Technology incentive (215.404-71-2(c)(2))........................      6
------------------------------------------------------------------------

    (13) Blocks 13 through 20--cost category objective. Enter the 
prenegotiation objectives. Include contractor independent research and 
development/bid and proposal in the general and administrative expenses 
in Block 19.
    (14) Blocks 21 through 29--weighted guidelines profit factors. Enter 
the amounts determined in 215.404-71 or 215.404-72. This section is not 
required to be completed when using an alternate structured approach 
(215.404-73).
    (15) Block 30--total profit objective. Enter the total of Blocks 23, 
24, 25, 27, 28, and 29. This section is not required to be completed 
when using an alternate structured approach (215.404-73).
    (16) Blocks 31 through 35--negotiation summary. Complete as 
indicated on the form. For fixed-price type contracts negotiated on a 
total price basis, enter the contracting officer's best estimates of 
cost and profit. When using an alternate structured approach, see 
215.404-73(b)(2) for offsets.
    (17) Blocks 36 through 39--contracting officer approval. The 
contracting officer shall sign the form. Include a complete (with area 
code) commercial telephone number to facilitate any follow-up actions.
    (18) Blocks 96 through 99--optional use. Complete in accordance with 
department/agency procedures, if any.


[[Page 469]]


    Note: Department of Defense Acquisition Forms are not published in 
the Federal Register or the Code of Federal Regulations. For the 
convenience of the user, the list set forth below includes section 
numbers, form numbers, and titles.


Sec. 253.303-250 Material Inspection and Receiving Report.

Sec. 253.303-250c Material Inspection and Receiving Report-Continuation 
          Sheet.

Sec. 253.303-250-1 Tanker/Barge Material Inspection and Receiving 
          Report.

Sec. 253.303-350 Individual Contracting Action Report.

Sec. 253.303-416 Purchase Request for Coal, Coke or Briquettes.

Sec. 253.303-428 Communication Service Authorization.

Sec. 253.303-448 Military Interdepartmental Purchase Request.

Sec. 253.303-448-2 Acceptance of MIPR.

Sec. 253.303-879 Statement of Compliance.

Sec. 253.303-882 Report of Inventions and Subcontracts.

Sec. 253.303-1057 Monthly Summary of Contracting Actions.

Sec. 253.303-1114 Instructions for Use of Contract Termination 
          Settlement and Inventory Schedule Forms.

Sec. 253.303-1131 Cash Collection Voucher.

Sec. 253.303-1149 Requisition and Invoice/Shipping Document.

Sec. 253.303-1155 Order for Supplies or Services.

Sec. 253.303-1155c-1 Order for Supplies or Services (Commissary 
          Continuation Sheet).

Sec. 253.303-1342 Property Record.

Sec. 253.303-1348 Single Line Item Requisition System Document (Manual).

Sec. 253.303-1348m Single Line Item Requisition System Document 
          (Mechanical).

Sec. 253.303-1348-1A Issue Release/Receipt Document.

Sec. 253.303-1348-2 Issue Release/Receipt Document with Address Label.

Sec. 253.303-1384 Transportation Control and Movement Document.

Sec. 253.303-1391 FY ------ Military Construction Project Data.

Sec. 253.303-1391c FY ------ Military Construction Project Data 
          (continuation).

Sec. 253.303-1419 Industrial Plant Equipment Requisition.

Sec. 253.303-1423 Contract Data Requirements List.

Sec. 253.303-1423-1 Contract Data Requirements List (1 Data Item).

Sec. 253.303-1423-2 Contract Data Requirements List (2 Data Items).

Sec. 253.303-1484 Post-Award Conference Record.

Sec. 253.303-1547 Record of Weighted Guidelines Application.

Sec. 253.303-1568 Labor Standards Investigation Summary Sheet.

Sec. 253.303-1592 Contract Cross Reference Data.

Sec. 253.303-1593 Contract Administration Completion Record.

Sec. 253.303-1594 Contract Completion Statement.

Sec. 253.303-1597 Contract Closeout Check-List.

Sec. 253.303-1598 Contract Termination Status Report.

Sec. 253.303-1635 Plant Clearance Case Register.

Sec. 253.303-1637 Notice of Acceptance of Inventory Schedules.

Sec. 253.303-1638 Report of Disposition of Contractor Inventory.

Sec. 253.303-1639 Scrap Warranty.

Sec. 253.303-1640 Request for Plant Clearance.

Sec. 253.303-1641 Disposal Determination Approval.

Sec. 253.303-1653 Transportation Data for Solicitations.

Sec. 253.303-1654 Evaluation of Transportation Cost Factors.

Sec. 253.303-1659 Application for U.S. Government Shipping 
          Documentation/Instructions.

Sec. 253.303-1662 Property in the Custody of Contractors.

Sec. 253.303-1664 Data Item Description.

Sec. 253.303-1707 Information to Offerors or Quoters.

Sec. 253.303-1861 Contract Facilities Capital Cost of Money.

Sec. 253.303-1921 Cost Data Summary Report.

Sec. 253.303-1921-1 Functional Cost-Hour Report.

Sec. 253.303-2025 Packaging Change Recommendation/Approval.

Sec. 253.303-2051 Request for Assignment of a Commercial and Government 
          Entity (CAGE) Code.

Sec. 253.303-2051-1 Request for Information/Verification of Commercial 
          and Government Entity (CAGE) Code.

Sec. 253.303-2139 Report of Contract Performance Outside the United 
          States.

Sec. 253.303-2579 Small Business Coordination Record.

Sec. 253.303-2626 Performance Evaluation (Construction).

Sec. 253.303-2631 Performance Evaluation (Architect-Engineer).

[56 FR 36554, July 31, 1991]

    Editorial Note: For Federal Register citations affecting section 
253.215-70, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.

[[Page 470]]

              SUBCHAPTER I_AGENCY SUPPLEMENTARY REGULATIONS

    Appendix A to Chapter 2--Armed Services Board of Contract Appeals

Pt.
Part 1--Charter
Part 2--Rules

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

                Armed Services Board of Contract Appeals

Approved 1 May 1962.
Revised 1 May 1969.
Revised 1 September 1973.
Revised 1 July 1979.

                             Part 1--Charter

    1. There is created the Armed Services Board of Contract Appeals 
which is hereby designated as the authorized representative of the 
Secretary of Defense, the Secretary of the Army, the Secretary of the 
Navy and the Secretary of the Air Force, in hearing, considering and 
determining appeals by contractors from decisions of contracting 
officers or their authorized representatives or other authorities on 
disputed questions. These appeals may be taken (a) pursuant to the 
Contract Disputes Act of 1978 (41 U.S.C. Sec. 601, et seq.), (b) 
pursuant to the provisions of contracts requiring the decision by the 
Secretary of Defense or by a Secretary of a Military Department or their 
duly authorized representative or board, or (c) pursuant to the 
provisions of any directive whereby the Secretary of Defense or the 
Secretary of a Military Department has granted a right of appeal not 
contained in the contract on any matter consistent with the contract 
appeals procedure. The Board may determine contract disputes for other 
departments and agencies by agreement. The Board shall operate under 
general policies established or approved by the Under Secretary of 
Defense (Research and Engineering).
    2. Membership of the Board shall consist of attorneys at law who 
have been qualified in the manner prescribed by the Contract Disputes 
Act of 1978. Members of the Board are hereby designated Administrative 
Judges. There shall be appointed from members of the Board a chairman 
and two or more vice-chairmen. Appointment of the chairman and vice-
chairmen and other members of the Board shall be made by the Under 
Secretary of Defense (Research and Engineering) and the Assistant 
Secretaries of the Military Departments responsible for procurement. The 
chairman and vice-chairmen shall serve in that capacity for a two-year 
term unless sooner removed or reappointed for an additional term or 
terms. The Under Secretary will also designate the order in which the 
vice-chairmen will act for the chairman in his absence. In the absence 
of a vice-chairman, the chairman or acting chairman may designate a 
member of the Board to serve as a temporary vice-chairman.
    3. It shall be the duty and obligation of the members of the Armed 
Services Board of Contract Appeals to decide appeals on the record of 
the appeal to the best of their knowledge and ability in accordance with 
applicable contract provisions and in accordance with law and regulation 
pertinent thereto.
    4. The chairman of the Board shall be responsible for establishing 
appropriate divisions of the Board to provide for the most effective and 
expeditous handling of appeals. He shall be reponsible for assigning 
appeals to the divisions for decision without regard to the military 
department or other procuring agency which entered into the contract. A 
division may consist of one or more members of the Board. The chairman 
shall designate one member of each division as the division head. The 
division heads and the chairman and vice-chairmen shall constitute the 
senior deciding group of the Board. A majority of the members of a 
division or of the senior deciding group shall constitute a quorum for 
the transaction of the business of each, respectively. Decisions of the 
Board shall be by majority vote of the members of a division 
participating and the chairman and a vice-chairman, unless the chairman 
refers the appeal for decision by the senior deciding group. The 
decision of the Board in cases so referred to the senior deciding group 
shall be by majority vote of the participating members of that group. 
The chairman may refer an appeal of unusual difficulty, significant 
precedential importance, or serious dispute within the normal decision 
process for decision by the senior deciding group. An appeal involving 
$50,000 or less may be decided by a single member or fewer members of 
the Board than hereinbefore provided for cases of unlimited dollar 
amount, under accelerated or expedited procedures as provided in the 
Rules of the Board and the Contract Disputes Act of 1978.
    5. The Board shall have all powers necessary and incident to the 
proper performance of its duties. Subject to the approval of the Under 
Secretary of Defense (Research and Engineering) and the Assistant 
Secretaries of the Military Departments responsible for procurement, the 
Board shall adopt its own methods of procedure, and rules and 
regulations for its conduct and for the preparation and presentation of 
appeals and issuance of opinions. The Military Departments and other 
procuring agencies shall

[[Page 471]]

provide legal personnel to prepare and present the contentions of the 
departments or agencies in relation to appeals filed with the Board. It 
shall not be necessary for the Board, unless it otherwise desires, to 
communicate with more than one trial attorney in each of the departments 
or agencies concerning the preparation and presentation of appeals and 
the obtaining of all records deemed by the Board to be pertinent 
thereto.
    6. Any member of the Board or any examiner, designated by the 
chairman, shall be authorized to hold hearings, examine witnesses, and 
receive evidence and argument for consideration and determination of the 
appeal by the designated division. A member of the Board shall have 
authority to administer oaths and issue subpoenas as specified in 
section 11 of the Contract Disputes Act of 1978. The chairman may 
request orders of the court in cases of contumacy or refusal to obey a 
subpoena in the manner prescribed in that section.
    7. The chairman shall be responsible for the internal organization 
of the Board and for its administration. He shall provide within 
approved ceilings for the staffing of the Board with non-member 
personnel, including hearing examiners, as may be required for the 
performance of the functions of the Board. The chairman shall appoint a 
recorder of the Board. Such personnel shall be responsible to and shall 
function under the direction, supervision and control of the chairman.
    8. The Board will be serviced by the Department of the Army for 
administrative support for its operations as required. Administrative 
support will include budgeting, funding, fiscal control, manpower 
control and utilization, personnel administration, security 
administration, supplies, and other administrative services. The 
Departments of the Army, Navy, Air Force and the Office of the Secretary 
of Defense will participate in financing the Board's operations on an 
equal basis and to the extent determined by the Assistant Secretary of 
Defense (Comptroller). The cost of processing appeals for departments 
and agencies other than those in the Department of Defense will be 
reimbursed.
    9. The chairman of the Board will furnish the Secretary of Defense 
and to the Secretaries of the Military Departments by October 31 of each 
year a report containing an account of the Board's transactions and 
proceedings for the preceding fiscal year. Within 30 days following the 
close of a calendar quarter, the chairman shall forward a report of the 
Board's proceedings for the quarter to the Under Secretary of Defense 
(Research and Engineering), the Assistant Secretaries of the Military 
Departments responsible for procurement, and to the Director of the 
Defense Logistics Agency. Such reports shall disclose the number of 
appeals received, cases heard, opinions rendered, current reserve of 
pending matters, and such other information as may be required.
    10. The Board shall have a seal bearing the following inscription: 
``Armed Services Board of Contract Appeals.'' This seal shall be affixed 
to all authentications of copies of records and to such other 
instruments as the Board may determine.
    11. This revised charter is effective April 21, 1980.

    Approved:

W. Graham Claytor, Jr.
Deputy Secretary of Defense
Clifford L. Alexander, Jr.
Secretary of the Army
E. Hidalgo
Secretary of the Navy
Hans M. Mark
Secretary of the Air Force

                              Part 2--Rules

Approved 15 July 1963.
Revised 1 May 1969.
Revised 1 September 1973.
Revised 30 June 1980.

                                 Preface

                 I. Jurisdiction for Considering Appeals

    The Armed Services Board of Contract Appeals (referred to herein as 
the Board) shall consider and determine appeals from decisions of 
contracting officers pursuant to the Contract Disputes Act of 1978 Pub. 
L. 95-563, 41 U.S.C. 601-613) relating to contracts made by (i) the 
Departments of Defense, Army, Navy and Air Force or (ii) any other 
executive agency when such agency or the Administrator for Federal 
Procurement Policy has designated the Board to decide the appeal.

               II. Location and Organization of the Board

    (a) The Board's address is Skyline Six, 5109 Leesburg Pike, 7th 
Floor, Falls Church, VA 22041-3217, telephone (703) 681-8500 
(receptionist), (703) 681-8502 (recorder).
    (b) The Board consists of a chairman, two or more vice chairmen, and 
other members, all of whom are attorneys at law duly licensed by a 
state, commonwealth, territory, or the District of Columbia. Board 
members are designated Administrative Judges.
    (c) There are a number of divisions of the Armed Services Board of 
Contract Appeals, established by the Chairman of the Board in such 
manner as to provide for the most effective and expeditious handling of 
appeals. The Chairman and a Vice Chairman of the Board act as members of 
each division. Appeals are assigned to the divisions for decision 
without regard to the military department or other procuring agency 
which entered into the contract involved. Hearing may be held by a 
designated member (Administrative Judge), or by a duly authorized 
examiner. Except for

[[Page 472]]

appeals processed under the expedited or accelerated procedure, the 
decision of a majority of a division constitutes the decision of the 
Board, unless the chairman refers the appeal to the Board's Senior 
Deciding Group (consisting of the chairman, vice chairmen and all 
division heads), in which event a decision of a majority of that group 
constitutes the decision of the Board. Appeals referred to the Senior 
Deciding Group are those of unusual difficulty, significant precedential 
importance, or serious dispute within the normal division decision 
process. For decisions of appeals processed under the expedited or 
accelerated procedure, see rules 12.2(c) and 12.3(b).

                         Preliminary Procedures

    1. Appeals, How Taken. (a) Notice of an appeal shall be in writing 
and mailed or otherwise furnished to the Board within 90 days from the 
date of receipt of a contracting officer's decision. A copy thereof 
shall be furnished to the contracting officer from whose decision the 
appeal is taken.
    (b) Where the contractor has submitted a claim of $50,000 or less to 
the contracting officer and has requested a written decision within 60 
days from receipt of the request, and the contracting officer has not 
done so, the contractor may file a notice of appeal as provided in 
subparagraph (a) above, citing the failure of the contracting officer to 
issue a decision.
    (c) Where the contractor has submitted a properly certified claim 
over $50,000 to the contracting officer or has requested a decision by 
the contracting officer which presently involves no monetary amount 
pursuant to the Disputes clause, and the contracting officer has failed 
to issue a decision within a reasonable time, taking into account such 
factors as the size and complexity of the claim, the contractor may file 
a notice of appeal as provided in subparagraph (a) above, citing the 
failure of the contracting officer to issue a decision.
    (d) Upon docketing of appeals filed pursuant to (b) or (c) hereof, 
the Board may, at its option, stay further proceedings pending issuance 
of a final decision by the contracting officer within such period of 
time as is determined by the Board.
    (e) In lieu of filing a notice of appeal under (b) or (c) hereof, 
the contractor may request the Board to direct the contracting officer 
to issue a decision in a specified period of time, as determined by the 
Board, in the event of undue delay on the part of the contracting 
officer.
    2. Notice of Appeal, Contents of. A notice of appeal should indicate 
that an appeal is being taken and should identify the contract (by 
number), the department and/or agency involved in the dispute, the 
decision from which the appeal is taken, and the amount in dispute, if 
known. The notice of appeal should be signed personally by the appellant 
(the contractor taking the appeal), or by the appellant's duly 
authorized representative or attorney. The complaint referred to in rule 
6 may be filed with the notice of appeal, or the appellant may designate 
the notice of appeal as a complaint, if it otherwise fulfills the 
requirements of a complaint.
    3. Docketing of Appeals. When a notice of appeal in any form has 
been received by the Board, it shall be docketed promptly. Notice in 
writing shall be given to the appellant with a copy of these rules, and 
to the contracting officer.
    4. Preparation, Content, Organization, Forwarding, and Status of 
Appeal File--(a) Duties of Contracting Officer--Within 30 days of 
receipt of an appeal, or notice that an appeal has been filed, the 
contracting officer shall assemble and transmit to the Board an appeal 
file consisting of all documents pertinent to the appeal, including:
    (1) The decision from which the appeal is taken;
    (2) The contract, including pertinent specifications, amendments, 
plans and drawings;
    (3) All correspondence between the parties relevant to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued;
    (4) Transcripts of any testimony taken during the course of 
proceedings, and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal with the 
Board; and
    (5) Any additional information considered relevant to the appeal.
    Within the same time above specified the contracting officer shall 
furnish the appellant a copy of each document he transmits to the Board, 
except those in subparagraph (a)(2) above. As to the latter, a list 
furnished appellant indicating specific contractual documents 
transmitted will suffice.
    (b) Duties of the Appellant--Within 30 days after receipt of a copy 
of the appeal file assembled by the contracting officer, the appellant 
shall transmit to the Board any documents not contained therein which he 
considers relevant to the appeal, and furnish two copies of such 
documents to the government trial attorney.
    (c) Organization of Appeal File--Documents in the appeal file may be 
originals or legible facsimiles or authenticated copies, and shall be 
arranged in chronological order where practicable, numbered 
sequentially, tabbed, and indexed to identify the contents of the file.
    (d) Lengthy Documents--Upon request by either party, the Board may 
waive the requirement to furnish to the other party copies of bulky, 
lengthy, or out-of-size documents in the appeal file when inclusion 
would be burdensome. At the time a party files with the Board a document 
as to which such a waiver has been granted he shall notify the other

[[Page 473]]

party that the document or a copy is available for inspection at the 
offices of the Board or of the party filing same.
    (e) Status of Documents in Appeal File--Documents contained in the 
appeal file are considered, without further action by the parties, as 
part of the record upon which the Board will render its decision. 
However, a party may object, for reasons stated, to consideration of a 
particular document or documents reasonably in advance of hearing or, if 
there is no hearing, of settling the record. If such objection is made, 
the Board shall remove the document or documents from the appeal file 
and permit the party offering the document to move its admission as 
evidence in accordance with rules 13 and 20.
    (f) Notwithstanding the foregoing, the filing of the rule 4 (a) and 
(b) documents may be dispensed with by the Board either upon request of 
the appellant in his notice of appeal or thereafter upon stipulation of 
the parties.
    5. Motions. (a) Any motion addressed to the jurisdiction of the 
Board shall be promptly filed. Hearing on the motion shall be afforded 
on application of either party. However, the Board may defer its 
decision on the motion pending hearing on both the merits and the 
motion. The Board shall have the right at any time and on its own 
initiative to raise the issue of its jurisdiction to proceed with a 
particular case, and shall do so by an appropriate order, affording the 
parties an opportunity to be heard thereon.
    (b) The Board may entertain and rule upon other appropriate motions.
    6. Pleadings--(a) Appellant--Within 30 days after receipt of notice 
of docketing of the appeal, the appellant shall file with the Board an 
original and two copies of a complaint setting forth simple, concise and 
direct statements of each of its claims. Appellant shall also set forth 
the basis, with appropriate reference to contract provisions, of each 
claim and the dollar amount claimed, to the extent known. This pleading 
shall fulfill the generally recognized requirements of a complaint, 
although no particular form is required. Upon receipt of the complaint, 
the Board shall serve a copy of it upon the Government. Should the 
complaint not be received within 30 days, appellant's claim and appeal 
may, if in the opinion of the Board the issues before the Board are 
sufficiently defined, be deemed to set forth its complaint and the 
Government shall be so notified.
    (b) Government--Within 30 days from receipt of the complaint, or the 
aforesaid notice from the Board, the Government shall prepare and file 
with the Board an original and two copies of an answer thereto. The 
answer shall set forth simple, concise and direct statements of 
Government's defenses to each claim asserted by appellant, including any 
affirmative defenses available. Upon receipt of the answer, the Board 
shall serve a copy upon appellant. Should the answer not be received 
within 30 days, the Board may, in its discretion, enter a general denial 
on behalf of the Government, and the appellant shall be so notified.
    (c) A party who intends to raise an issue concerning the law of a 
foreign country shall give notice in his pleadings or other reasonable 
written notice. The Board, in determining foreign law, may consider any 
relevant material or source, including testimony, whether or not 
submitted by a party or admissible under Rules 11, 13 or 20. The 
determination of foreign law shall be treated as a ruling on a question 
of law.
    7. Amendments of Pleadings or Record. The Board upon its own 
initiative or upon application by a party may order a party to make a 
more definite statement of the complaint or answer, or to reply to an 
answer. The Board may, in its discretion, and within the proper scope of 
the appeal, permit either party to amend its pleading upon conditions 
fair to both parties. When issues within the proper scope of the appeal, 
but not raised by the pleadings, are tried by express or implied consent 
of the parties, or by permission of the Board, they shall be treated in 
all respects as if they had been raised therein. In such instances, 
motions to amend the pleadings to conform to the proof may be entered, 
but are not required. If evidence is objected to at a hearing on the 
ground that it is not within the issues raised by the pleadings, it may 
be admitted within the proper scope of the appeal, provided, however, 
that the objecting party may be granted a continuance if necessary to 
enable it to meet such evidence.
    8. Hearing Election. After filing of the Government's answer or 
notice from the Board that it has entered a general denial on behalf of 
the Government, each party shall advise whether it desires a hearing as 
prescribed in Rules 17 through 25, or whether it elects to submit its 
case on the record without a hearing, as prescribed in Rule 11.
    9. Prehearing Briefs. Based on an examination of the pleadings, and 
its determination of whether the arguments and authorities addressed to 
the issues are adequately set forth therein, the Board may, in its 
discretion, require the parties to submit prehearing briefs in any case 
in which a hearing has been elected pursuant to Rule 8. If the Board 
does not require prehearing briefs either party may, in its discretion 
and upon appropriate and sufficient notice to the other party, furnish a 
prehearing brief to the Board. In any case where a prehearing brief is 
submitted, it shall be furnished so as to be received by the Board at 
least 15 days prior to the date set for hearing, and a copy shall 
simultaneously be furnished to the other party as previously arranged.

[[Page 474]]

    10. Prehearing or Presubmission Conference. (a) Whether the case is 
to be submitted pursuant to Rule 11, or heard pursuant to Rules 17 
through 25, the Board may upon its own initiative, or upon the 
application of either party, arrange a telephone conference or call upon 
the parties to appear before an administrative judge or examiner of the 
Board for a conference to consider:
    (1) Simplification, clarification, or severing of the issues;
    (2) The possibility of obtaining stipulations, admissions, 
agreements and rulings on admissibility of docments, understandings on 
matters already of record, or similar agreements that will avoid 
unnecessary proof;
    (3) Agreements and rulings to facilitate discovery;
    (4) Limitation of the number of expert witnesses, or avoidance of 
similar cumulative evidence;
    (5) The possibility of agreement disposing of any or all of the 
issues in dispute; and
    (6) Such other matters as may aid in the disposition of the appeal.
    (b) The administrative judge or examiner of the Board shall make 
such rulings and orders as may be appropriate to aid in the disposition 
of the appeal. The results of pretrial conferences, including any 
rulings and orders, shall be reduced to writing by the administrative 
judge or examiner and this writing shall thereater constitute a part of 
the record.
    11. Submission Without a Hearing. Either party may elect to waive a 
hearing and to submit its case upon the record before the Board, as 
settled pursuant to Rule 13. Submission of a case without hearing does 
not relieve the parties from the necessity of proving the facts 
supporting their allegations or defenses. Affidavits, depositions, 
admissions, answers to interrogatories, and stipulations may be employed 
to supplement other documentary evidence in the Board record. The Board 
may permit such submissions to be supplemented by oral argument 
(transcribed if requested), and by briefs arranged in accordance with 
Rule 23.
    12. Optional SMALL CLAIMS (EXPEDITED) and ACCELERATED Procedures. 
These procedures are available solely at the election of the appellant.
    12.1 Elections to Utilize SMALL CLAIMS (EXPEDITED) and ACCELERATED 
Procedures. (a) In appeals where the amount in dispute is $10,000 or 
less, the appellant may elect to have the appeal processed under a SMALL 
CLAIMS (EXPEDITED) procedure requiring decision of the appeal, whenever 
possible, within 120 days after the Board receives written notice of the 
appellant's election to utilize this procedure. The details of this 
procedure appear in section 12.2 of this Rule. An appellant may elect 
the ACCELERATED procedure rather than the SMALL CLAIMS (EXPEDITED) 
procedure for any appeal eligible for the SMALL CLAIMS (EXPEDITED) 
procedure.
    (b) In appeals where the amount in dispute is $50,000 or less, the 
appellant may elect to have the appeal processed under an ACCELERATED 
procedure requiring decision of the appeal, whenever possible, within 
180 days after the Board receives written notice of the appellant's 
election to utilize this procedure. The details of this procedure appear 
in section 12.3 of this Rule.
    (c) The appellant's election of either the SMALL CLAIMS (EXPEDITED) 
procedure or the ACCELERATED procedure may be made by written notice 
within 60 days after receipt of notice of docketing, unless such period 
is extended by the Board for good cause. The election may not be 
withdrawn except with permission of the Board and for good cause.
    12.2 The Small Claims (Expedited) Procedure. (a) In cases proceeding 
under the SMALL CLAIMS (EXPEDITED) procedure, the following time periods 
shall apply:
    (1) Within 10 days from the Government's first receipt from either 
the appellant or the Board of a copy of the appellant's notice of 
election of the SMALL CLAIMS (EXPEDITED) procedure, the Government shall 
send the Board a copy of the contract, the contracting officer's final 
decision, and the appellant's claim letter or letters, if any; remaining 
documents required under Rule 4 shall be submitted in accordance with 
times specified in that rule unless the Board otherwise directs.
    (2) Within 15 days after the Board has acknowledged receipt of 
appellant's notice of election, the assigned administrative judge shall 
take the following actions, if feasible, in an informal meeting or a 
telephone conference with both parties: (i) Identify and simplify the 
issues; (ii) establish a simplified procedure appropriate to the 
particular appeal involved; (iii) determine whether either party wants a 
hearing, and if so, fix a time and place therefor; (iv) require the 
Government to furnish all the additional documents relevant to the 
appeal; and (v) establish an expedited schedule for resolution of the 
appeal.
    (b) Pleadings, discovery, and other prehearing activity will be 
allowed only as consistent with the requirement to conduct the hearing 
on the date scheduled, or if no hearing is scheduled, to close the 
record on a date that will allow decisions within the 120-day limit. The 
Board, in its discretion, may impose shortened time periods for any 
actions prescribed or allowed under these rules, as necessary to enable 
the Board to decide the appeal within the 120-day limit, allowing 
whatever time, up to 30 days, that the Board considers necessary for the 
preparation of the decision after closing the record and the filing of 
briefs, if any.

[[Page 475]]

    (c) Written decision by the Board in cases processed under the SMALL 
CLAIMS (EXPEDITED) procedure will be short and contain only summary 
findings of fact and conclusions. Decisions will be rendered for the 
Board by a single administrative judge. If there has been a hearing, the 
administrative judge presiding at the hearing may, in the judge's 
discretion, at the conclusion of the hearing and after entertaining such 
oral arguments as deemed appropriate, render on the record oral summary 
findings of fact, conclusions, and a decision of the appeal. Whenever 
such an oral decision is rendered, the Board will subsequently furnish 
the parties a typed copy of such oral decision for record and payment 
purposes and to establish the starting date for the period for filing a 
motion for reconsideration under rule 29.
    (d) A decision against the Government or the contractor shall have 
no value as precedent, and in the absence of fraud shall be final and 
conclusive and may not be appealed or set aside.
    12.3 The Accelerated Procedure. (a) In cases proceeding under the 
Accelerated procedure, the parties are encouraged, to the extent 
possible consistent with adequate presentation of their factual and 
legal positions, to waive pleadings, discovery, and briefs. The Board, 
in its discretion, may shorten time periods prescribed or allowed 
elsewhere in these rules, including rule 4, as necessary to enable the 
Board to decide the appeal within 180 days after the Board has received 
the appellant's notice of election of the ACCELERATED procedure, and may 
reserve 30 days for preparation of the decision.
    (b) Written decision by the Board in cases processed under the 
ACCELERATED procedure will normally be short and contain only summary 
findings of fact and conclusions. Decisions will be rendered for the 
Board by a single administrative judge with the concurrence of a vice 
chairman, or by a majority among these two and the chairman in case of 
disagreement. Alternatively, in cases where the amount in dispute is 
$10,000 or less as to which the ACCELERATED procedure has been elected 
and in which there has been a hearing, the single administrative judge 
presiding at the hearing may, with the concurrence of both parties, at 
the conclusion of the hearing and after entertaining such oral arguments 
as deemed appropriate, render on the record oral summary findings of 
fact, conclusions, and a decision of the appeal. Whenever such an oral 
decision is rendered, the Board will subsequently furnish the parties a 
typed copy of such oral decision for record and payment purposes, and to 
establish the starting date for the period of filing a motion for 
reconsideration under Rule 29.
    12.4 Motions for Reconsideration in Rule 12 Cases. Motions for 
Reconsideration of cases decided under either the SMALL CLAIMS 
(EXPEDITED) procedure or the ACCELERATED procedure need not be decided 
within the original 120-day or 180-day limit, but all such motions shall 
be processed and decided rapidly so as to fulfill the intent of this 
Rule.
    13. Settling the Record. (a) The record upon which the Board's 
decision will be rendered consists of the documents furnished under 
Rules 4 and 12, to the extent admitted in evidence, and the following 
items, if any: pleadings, prehearing conference memoranda or orders, 
prehearing briefs, depositions or interrogatories received in evidence, 
admissions, stipulations, transcripts of conferences and hearings, 
hearing exhibits, post-hearing briefs, and documents which the Board has 
specifically designated be made a part of the record. The record will, 
at all reasonable times, be available for inspection by the parties at 
the office of the Board.
    (b) Except as the Board may otherwise order in its discretion, no 
proof shall be received in evidence after completion of an oral hearing 
or, in cases submitted on the record, after notification by the Board 
that the case is ready for decision.
    (c) The weight to be attached to any evidence of record will rest 
within the sound discretion of the Board. The Board may in any case 
require either party, with appropriate notice to the other party, to 
submit additional evidence on any matter relevant to the appeal.
    14. Discovery--Depositions--(a) General Policy and Protective 
Orders--The parties are encouraged to engage in voluntary discovery 
procedures. In connection with any deposition or other discovery 
procedure, the Board may make any order required to protect a party or 
person from annoyance, embarrassment, or undue burden or expense. Those 
orders may include limitations on the scope, method, time and place for 
discovery, and provisions for protecting the secrecy of confidential 
information or documents.
    (b) When Depositions Permitted--After an appeal has been docketed 
and complaint filed, the parties may mutually agree to, or the Board 
may, upon application of either party, order the taking of testimony of 
any person by deposition upon oral examination or written 
interrogatories before any officer authorized to administer oaths at the 
place of examination, for use as evidence or for purpose of discovery. 
The application for order shall specify whether the purpose of the 
deposition is discovery or for use as evidence.
    (c) Orders on Depositions--The time, place, and manner of taking 
depositions shall be as mutually agreed by the parties, or failing such 
agreement, governed by order of the Board.
    (d) Use as Evidence--No testimony taken by depositions shall be 
considered as part of the evidence in the hearing of an appeal until

[[Page 476]]

such testimony is offered and received in evidence at such hearing. It 
will not ordinarily be received in evidence if the deponent is present 
and can testify at the hearing. In such instances, however, the 
deposition may be used to contradict or impeach the testimony of the 
deponent given at the hearing. In cases submitted on the record, the 
Board may, in its discretion, receive depositions to supplement the 
record.
    (e) Expenses--Each party shall bear its own expenses associated with 
the taking of any deposition.
    (f) Subpoenas--Where appropriate, a party may request the issuance 
of a subpoena under the provisions of Rule 21.
    15. Interrogatories to Parties, Admission of Facts, and Production 
and Inspection of Documents. After an appeal has been docketed and 
complaint filed with the Board, a party may serve on the other party: 
(a) Written interrogatories to be answered separately in writing, signed 
under oath and answered or objected to within 45 days after service; (b) 
a request for the admission of specified facts and/or the authenticity 
of any documents, to be answered or objected to within 45 days after 
service; the factual statements and the authenticity of the documents to 
be deemed admitted upon failure of a party to respond to the request; 
and (c) a request for the production, inspection and copying of any 
documents or objects not privileged, which reasonably may lead to the 
discovery of admissible evidence, to be answered or objected to within 
45 days after service. The Board may allow a shorter or longer time. Any 
discovery engaged in under this Rule shall be subject to the provisions 
of Rule 14(a) with respect to general policy and protective orders, and 
of Rule 35 with respect to sanctions.
    16. Service of Papers Other Than Subpoenas. Papers shall be served 
personally or by mail, addressed to the party upon whom service is to be 
made. Copies of complaints, answers and briefs shall be filed directly 
with the Board. The party filing any other paper with the Board shall 
send a copy thereof to the opposing party, noting on the paper filed 
with the Board that a copy has been so furnished. Subpoenas shall be 
served as provided in Rule 21.

                                Hearings

    17. Where and When Held. Hearings will be held at such places 
determined by the Board to best serve the interests of the parties and 
the Board. Hearings will be scheduled at the discretion of the Board 
with due consideration to the regular order of appeals, Rule 12 
requirements, and other pertinent factors. On request or motion by 
either party and for good cause, the Board may, in its discretion, 
adjust the date of a hearing.
    18. Notice of Hearings. The parties shall be given at least 15 days 
notice of the time and place set for hearings. In scheduling hearings, 
the Board will consider the desires of the parties and the requirement 
for just and inexpensive determination of appeals without unnecessary 
delay. Notices of hearings shall be promptly acknowledged by the 
parties.
    19. Unexcused Absence of a Party. The unexcused absence of a party 
at the time and place set for hearing will not be occasion for delay. In 
the event of such absence, the hearing will proceed and the case will be 
regarded as submitted by the absent party as provided in Rule 11.
    20. Hearings: Nature, Examination of Witnesses--(a) Nature of 
Hearings--Hearings shall be as informal as may be reasonable and 
appropriate under the circumstances. Appellant and the Government may 
offer such evidence as they deem appropriate and as would be admissible 
under the Federal Rules of Evidence or in the sound discretion of the 
presiding administrative judge or examiner. Stipulations of fact agreed 
upon by the parties may be regarded and used as evidence at the hearing. 
The parties may stipulate the testimony that would be given by a witness 
if the witness were present. The Board may require evidence in addition 
to that offered by the parties.
    (b) Examination of Witnesses--Witnesses before the Board will be 
examined orally under oath or affirmation, unless the presiding 
administrative judge or examiner shall otherwise order. If the testimony 
of a witness is not given under oath, the Board may advise the witness 
that his statements may be subject to the provisions of title 18, United 
States Code, sections 287 and 1001, and any other provision of law 
imposing penalties for knowingly making false representations in 
connection with claims against the United States or in any matter within 
the jurisdiction of any department or agency thereof.
    21. Subpoenas--(a) General--Upon written request of either party 
filed with the recorder, or on his own initiative, the administrative 
judge to whom a case is assigned or who is otherwise designated by the 
chairman may issue a subpoena requiring:
    (i) Testimony at a deposition--the deposing of a witness in the city 
or county where he resides or is employed or transacts his business in 
person, or at another location convenient for him that is specifically 
determined by the Board;
    (ii) Testimony at a hearing--the attendance of a witness for the 
purpose of taking testimony at a hearing; and
    (iii) Production of books and papers--in addition to (i) or (ii), 
the production by the witness at the deposition or hearing of books and 
papers designated in the subpoena.
    (b) Voluntary Cooperation--Each party is expected (i) to cooperate 
and make available witnesses and evidence under its control as requested 
by the other party, without

[[Page 477]]

issuance of a subpoena, and (ii) to secure voluntary attendance of 
desired third-party witnesses and production of desired third-party 
books, papers, documents, or tangible things whenever possible.
    (c) Requests for Subpoenas--(1) A request for subpoena shall 
normally be filed at least:
    (i) 15 days before a scheduled deposition where the attendance of a 
witness at a deposition is sought; or
    (ii) 30 days before a scheduled hearing where the attendance of a 
witness at a hearing is sought.
    In its discretion the Board may honor requests for subpoenas not 
made within these time limitations.
    (2) A request for a subpoena shall state the reasonable scope and 
general relevance to the case of the testimony and of any books and 
papers sought.
    (d) Requests to Quash or Modify--Upon written request by the person 
subpoenaed or by a party, made within 10 days after service but in any 
event not later than the time specified in the subpoena for compliance, 
the Board may (i) quash or modify the subpoena if it is unreasonable and 
oppressive or for other good cause shown, or (ii) require the person in 
whose behalf the subpoena was issued to advance the reasonable cost of 
producing subpoenaed books and papers. Where circumstances require, the 
Board may act upon such a request at any time after a copy has been 
served upon the opposing party.
    (e) Form; Issuance--(1) Every subpoena shall state the name of the 
Board and the title of the appeal, and shall command each person to whom 
it is directed to attend and give testimony, and if appropriate, to 
produce specified books and papers at a time and place therein 
specified. In issuing a subpoena to a requesting party, the 
administrative judge shall sign the subpoena and may, in his discretion, 
enter the name of the witness and otherwise leave it blank. The party to 
whom the subpoena is issued shall complete the subpoena before service.
    (2) Where the witness is located in a foreign country, a letter 
rogatory or subpoena may be issued and served under the circumstances 
and in the manner provided in 28 U.S.C. 1781-1784.
    (f) Service--(1) The party requesting issuance of a subpoena shall 
arrange for service.
    (2) A subpoena requiring the attendance of a witness at a deposition 
or hearing may be served at any place. A subpoena may be served by a 
United States marshal or deputy marshal, or by any other person who is 
not a party and not less than 18 years of age. Service of a subpoena 
upon a person named therein shall be made by personally delivering a 
copy to that person and tendering the fees for one day's attendance and 
the mileage provided by 28 U.S.C. 1821 or other applicable law; however, 
where the subpoena is issued on behalf of the Government, money payments 
need not be tendered in advance of attendance.
    (3) The party at whose instance a subpoena is issued shall be 
responsible for the payment of fees and mileage of the witness and of 
the officer who serves the subpoena. The failure to make payment of such 
charges on demand may be deemed by the Board as a sufficient ground for 
striking the testimony of the witness and the books or papers the 
witness has produced.
    (g) Contumacy or Refusal to Obey a Subpoena--In case of contumacy or 
refusal to obey a subpoena by a person who resides, is found, or 
transacts business within the jurisdiction of a United States District 
Court, the Board will apply to the Court through the Attorney General of 
the United States for an order requiring the person to appear before the 
Board or a member thereof to give testimony or produce evidence or both. 
Any failure of any such person to obey the order of the Court may be 
punished by the Court as a contempt thereof.
    22. Copies of Papers. When books, records, papers, or documents have 
been received in evidence, a true copy thereof or of such part thereof 
as may be material or relevant may be substituted therefor, during the 
hearing or at the conclusion thereof.
    23. Post-Hearing Briefs. Post-hearing briefs may be submitted upon 
such terms as may be directed by the presiding administrative judge or 
examiner at the conclusion of the hearing.
    24. Transcript of Proceedings. Testimony and argument at hearings 
shall be reported verbatim, unless the Board otherwise orders. Waiver of 
transcript may be especially suitable for hearings under Rule 12.2. 
Transcripts of the proceedings shall be supplied to the parties at such 
rates as may be established by contract between the Board and the 
reporter, provided that ordinary copy of transcript shall be supplied to 
the appellant at an amount no greater than the cost of duplication.
    25. Withdrawal of Exhibits. After a decision has become final the 
Board may, upon request and after notice to the other party, in its 
discretion permit the withdrawal of original exhibits, or any part 
thereof, by the party entitled thereto. The substitition of true copies 
of exhibits or any part thereof may be required by the Board in its 
discretion as a condition of granting permission for such withdrawal.

                             Representation

    26. The Appellant. An individual appellant may appear before the 
Board in person, a corporation by one of its officers; and a partnership 
or joint venture by one of its members; or any of these by an attorney 
at law duly licensed in any state, commonwealth, territory, the District 
of Columbia, or in a

[[Page 478]]

foreign country. An attorney representing an appellant shall file a 
written notice of appearance with the Board.
    27. The Government. Government counsel may, in accordance with their 
authority, represent the interest of the Government before the Board. 
They shall file notices of appearance with the Board, and notice thereof 
will be given appellant or appellant's attorney in the form specified by 
the Board from time to time.

                                Decisions

    28. Decisions. (a) Decisions of the Board will be made in writing 
and authenticated copies of the decision will be forwarded 
simultaneously to both parties. The rules of the Board and all final 
orders and decisions (except those required for good cause to be held 
confidential and not cited as precedents) shall be open for public 
inspection at the offices of the Board. Decisions of the Board will be 
made solely upon the record, as described in Rule 13.
    (b) Any monetary award to a contractor by the Board shall be 
promptly paid in accordance with the procedures provided by section 1302 
of the Act of July 27, 1956 (70 Stat. 694, as amended; 31 U.S.C. 724a). 
To assure prompt payment the Recorder will forward a waiver form to each 
party with the decision. If the parties do not contemplate an appeal or 
motion for reconsideration, they will execute waivers which so state, 
and return them to the Recorder. The Recorder will forward the waivers 
and a certified copy of the award decision to the General Accounting 
Office for certification for payment.

                       Motion for Reconsideration

    29. Motion for Reconsideration. A motion for reconsideration may be 
filed by either party. It shall set forth specifically the grounds 
relied upon to sustain the motion. The motion shall be filed within 30 
days from the date of the receipt of a copy of the decision of the Board 
by the party filing the motion.

              Suspensions, Dismissals and Defaults: Remands

    30. Suspensions; Dismissal Without Prejudice. The Board may suspend 
the proceedings by agreement of counsel for settlement discussions, or 
for good cause shown. In certain cases, appeals docketed before the 
Board are required to be placed in a suspense status and the Board is 
unable to proceed with disposition thereof for reasons not within the 
control of the Board. Where the suspension has continued, or may 
continue, for an inordinate length of time, the Board may, in its 
discretion, dismiss such appeals from its docket without prejudice to 
their restoration when the cause of suspension has been removed. Unless 
either party or the Board acts within three years to reinstate any 
appeal dismissed without prejudice, the dismissal shall be deemed with 
prejudice.
    31. Dismissal or Default for Failure to Prosecute or Defend. 
Whenever a record discloses the failure of either party to file 
documents required by these rules, respond to notices or correspondence 
from the Board, comply with orders of the Board, or otherwise indicates 
an intention not to continue the prosecution or defense of an appeal, 
the Board may, in the case of a default by the appellant, issue an order 
to show cause why the appeal should not be dismissed or, in the case of 
a default by the Government, issue an order to show cause why the Board 
should not act thereon pursuant to Rule 35. If good cause is not shown, 
the Board may take appropriate action.
    32. Remand from Court. Whenever any court remands a case to the 
Board for further proceedings, each of the parties shall, within 20 days 
of such remand, submit a report to the Board recommending procedures to 
be followed so as to comply with the court's order. The Board shall 
consider the reports and enter special orders governing the handling of 
the remanded case. To the extent the court's directive and time 
limitations permit, such orders shall conform to these rules.

                    Time, Computation and Extensions

    33. Time, Computation and Extensions. (a) Where possible, procedural 
actions should be taken in less time than the maximum time allowed. 
Where appropriate and justified, however, extensions of time will be 
granted. All requests for extensions of time shall be in writing.
    (b) In computing any period of time, the day of the event from which 
the designated period of time begins to run shall not be included, but 
the last day of the period shall be included unless it is a Saturday, 
Sunday, or a legal holiday, in which event the period shall run to the 
end of the next business day.

                         Ex Parte Communications

    34. Ex parte Communications. No member of the Board or the Board's 
staff shall entertain, nor shall any person directly or indirectly 
involved in an appeal, submit to the Board or the Board's staff, off the 
record, any evidence, explanation, analysis, or advice, whether written 
or oral, regarding any matter at issue in an appeal. This provision does 
not apply to consultation among Board members or to ex parte 
communications concerning the Board's administrative functions or 
procedures.

                                Sanctions

    35. Sanctions. If any party fails or refuses to obey an order issued 
by the Board, the Board may then make such order as it considers

[[Page 479]]

necessary to the just and expeditious conduct of the appeal.

                    Effective Date and Applicability

    36. Effective Date. These rules shall apply (i) mandatorily, to all 
appeals relating to contracts entered into on or after 1 March 1979, and 
(ii) at the contractor's election, to appeals relating to earlier 
contracts, with respect to claims pending before the contracting officer 
on 1 March 1979 or initiated thereafter.
    Pursuant to the Charter of the Armed Services Board of Contract 
Appeals, the attached rules are hereby approved for use and application 
to appeals to the Armed Services Board of Contract Appeals under the 
Contract Disputes Act of 1978.

(signed) William J. Perry (30 JUN 1980),
Under Secretary of Defense for Research and Engineering.
(signed) Percy A. Pierre,
Assistant Secretary of the Army (Research, Development and Acquisition).
(signed) J.A. Doyle,
Assistant Secretary of the Navy (Manpower, Reserve Affairs and 
Logistics).
(signed) Eugene H. Kopf,
(Acting) Assistant Secretary of the Air Force (Research, Development and 
Logistics).

[56 FR 36572, July 31, 1991, as amended at 58 FR 37868, July 14, 1993; 
65 FR 39707, June 27, 2000]

                 Appendixes B-E to Chapter 2 [Reserved]

    Appendix F to Chapter 2--Material Inspection and Receiving Report

Sec.
Part 1--Introduction
    F-101 General.
    F-102 Applicability.
    F-103 Use.
    F-104 Application.
Part 2--Contract Quality Assurance (CQA) on Shipments Between 
          Contractors
    F-201 Instructions.
Part 3--Preparation of the DD Form 250 and DD Form 250c
    F-301 Preparation instructions.
    F-302 Mode/method of shipment codes.
    F-303 Consolidated shipments.
    F-304 Multiple consignee instructions.
    F-305 Correction instructions.
    F-306 Invoice instructions.
    F-307 Packing list instructions.
    F-308 Receiving instructions.
Part 4--Distribution of DD Form 250 and DD Form 250c
    F-401 Distribution.
Part 5--Preparation of the DD Form 250-1 (Loading Report)
    F-501 Instructions.
Part 6--Preparation of the DD Form 250-1 (Discharge Report)
    F-601 Instructions.
Part 7--Distribution of the DD Form 250-1
    F-701 Distribution.
    F-702 Corrected DD Form 250-1.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

                           Part 1_Introduction

F-101 General.
    This appendix contains procedures and instructions for the use, 
preparation, and distribution of the material inspection and receiving 
report (MIRR) (DD Form 250 series) and commercial shipping/packing lists 
used to document Government contract quality assurance.
F-102 Applicability.
    (a) The provisions of this appendix apply to supplies or services 
acquired by DoD when the clause at 252.246-7000, Material Inspection and 
Receiving Report, is included in the contract. If the contract contains 
the clause at FAR 52.213-1, Fast Payment Procedure, the contractor may 
elect not to prepare a DD Form 250.
    (b) When DoD provides quality assurance or acceptance services for 
non-DoD activities, prepare a MIRR using the instructions in this 
appendix, unless otherwise specified in the contract.
F-103 Use.
    (a) The DD Form 250 is a multipurpose report used--(1) To provide 
evidence of Government contract quality assurance at origin or 
destination;
    (2) To provide evidence of acceptance at origin or destination;
    (3) For packing lists;
    (4) For receiving;
    (5) For shipping;
    (6) As a contractor invoice; and
    (7) As commercial invoice support.
    (b) Do not use the DD Form 250 for shipments--(1) By subcontractors, 
unless the subcontractor is shipping directly to the Government; or
    (2) Of contract inventory.
    (c) The contractor prepares the MIRR, except for entries that an 
authorized Government representative is required to complete.
    (d) Use the DD Form 250-1--(1) For bulk movements of petroleum 
products by tanker or barge to cover--
    (i) Origin or destination acceptance of cargo; or
    (ii) Shipment or receipt of Government owned products.
    (2) To send quality data to the point of acceptance in the case of 
origin inspection on FOB destination deliveries or preinspection at 
product source. Annotate the forms with

[[Page 480]]

the words ``INSPECTED FOR QUALITY ONLY.''
F-104 Application.
    (a) DD Form 250. (1) Use the DD Form 250 for delivery of contract 
line, subline, exhibit line, or exhibit subline items. Do not use the DD 
Form 250 for those exhibit line or exhibit subline items on a DD Form 
1423, Contract Data Requirements List, that indicate no DD Form 250 is 
required.
    (2) If the shipped to, marked for, shipped from, mode of shipment, 
contract quality assurance and acceptance data are the same for more 
than one shipment made on the same day under the same contract, 
contractors may prepare one MIRR to cover all such shipments.
    (3) If the volume of the shipment precludes the use of a single car, 
truck, or other vehicle, prepare a separate MIRR for the contents of 
each vehicle.
    (4) When a shipment is consigned to an Air Force activity and the 
shipment includes items of more than one federal supply class (FSC) or 
material management code (MMC), prepare a separate DD Form 250 for items 
of each of the FSCs or MMCs in the shipment. However, the cognizant 
Government representative may authorize a single DD Form 250, listing 
each of the FSCs or MMCs included in the shipment on a separate 
continuation sheet. The MMC appears as a suffix to the national stock 
number applicable to the item.
    (5) Consolidation of Petroleum Shipments on a Single MIRR--(i) 
Contiguous United States. Contractors may consolidate multiple car or 
truck load shipments of petroleum made on the same day, to the same 
destination, against the same contract line item, on one MIRR. To permit 
verification of motor deliveries, assign each load a load number which 
can be identified to the shipment number in Block 2 of the DD Form 250. 
Include a shipping document (commercial or government) with each 
individual load showing as a minimum--
    (A) The shipper;
    (B) Shipping point;
    (C) Consignee;
    (D) Contract and line item number;
    (E) Product identification;
    (F) Gross gallons (bulk only);
    (G) Loading temperature (bulk only);
    (H) American Petroleum Institute gravity (bulk only);
    (I) Identification of carrier's equipment;
    (J) Serial number of all seals applied; and
    (K) Signature of supplier's representative.
    When acceptance is at destination, the receiving activity retains 
the shipping document(s) to verify the entries on the consignee copy of 
the DD Form 250 forwarded by the contractor (reference F-401, Table 1) 
before signing Block 21b.
    (ii) Overseas. The same criteria as for contiguous United States 
applies, except the consolidation period may be extended, if acceptable 
to the receiving activity, shipping activity, Government finance office, 
and the authorized Government representative having cognizance at the 
contractor's facility. In addition, the contractor may include more than 
one contract line item in each DD Form 250 if the shipped to, marked 
for, shipped from, mode of shipment, contract quality assurance, and 
acceptance data are the same for all line items.
    (6) Consolidation of Coal Shipments on a Single MIRR. Contractors 
may consolidate multiple railcar or truck shipments of coal made on the 
same day, to the same destination, against the same contract line items, 
on one MIRR. To permit verification of truck deliveries, assign each 
load a load number which can be identified to the shipment number in 
Block 2 of the DD Form 250 and the analytical test report. Include a 
commercial shipping document with each individual truck load showing as 
a minimum--
    (i) The shipper;
    (ii) The name or names;
    (iii) Location and shipping point of the mine or mines from which 
the coal originates;
    (iv) The contract number;
    (v) The exact size of the coal shipped; and
    (vi) A certified weighmaster's certification of weight for the 
truckload.
    Include a waybill with each rail shipment showing the identical 
information. To permit verification of rail deliveries, identify each 
railcar number comprising the shipment to the shipment number in Block 2 
of the DD Form 250 and the analytical test report. When acceptance is at 
destination, the receiving activity must retain the shipping document(s) 
to verify the entries on the consignee copy of the DD Form 250.
    (b) DD Form 250-1. (1) Use a separate form for each tanker or barge 
cargo loaded.
    (2) The contractor may report more than one barge in the same tow on 
a single form if on the same contract and consigned to the same 
destination.
    (3) When liftings involve more than one contract, prepare separate 
forms to cover the portion of cargo loaded on each contract.
    (4) Prepare a separate form for each product or grade of product 
loaded.
    (5) Use a separate document for each tanker or barge cargo and each 
grade of product discharged.
    (6) For discharge, the contractor may report more than one barge in 
the same tow on a single form if from the same loading source.

[[Page 481]]

Part 2_Contract Quality Assurance (CQA) on Shipments Between Contractors

F-201 Instructions.
    (a) Use the supplier's commercial shipping document/packing list to 
enter performance of required CQA actions at subcontract level. Make the 
following entries on the supplier's commercial shipping document/packing 
list:
    Required CQA of listed items has been performed.
________________________________________________________________________
(Signature of Authorized Govt. Rep. or DoD Stamp)
________________________________________________________________________
(Date)
________________________________________________________________________
(Typed Name and Office)
    (b) Distribution for Government purposes shall be--
    (1) One copy with shipment;
    (2) One copy for the Government representative at consignee (via 
mail); and
    (3) One copy for the Government representative at consignor.

         Part 3_Preparation of the DD Form 250 and DD Form 250c

F-301 Preparation instructions.
    (a) General. (1) Dates must use nine spaces consisting of the four 
digits of the year, three-position alphabetic month abbreviation, and 
two digits for the day. For example, 2000AUG07, 2000SEP24.
    (2) Addresses must consist of the name, street address/P.O. box, 
city, state, and ZIP code.
    (3) Enter to the right of and on the same line as the word ``Code'' 
in Blocks 9 through 12 and in Block 14--
    (i) The Commercial and Government Entity Handbook (H4/H8) code;
    (ii) The DoD activity address code (DoDAAC) as it appears in the DoD 
Activity Address Directory (DoDAAD), DoD 4000.25-6-M; or
    (iii) The Military Assistance Program Address Directory (MAPAD) 
code.
    (4) Enter the DoDAAC, CAGE (H4/H8), or MAPAD code in Block 13.
    (5) The data entered in the blocks at the top of the DD Form 250c 
must be identical to the comparable entries in Blocks 1, 2, 3, and 6 of 
the DD Form 250.
    (6) Enter overflow data from the DD Form 250 in Block 16 or in the 
body of the DD Form 250c with an appropriate cross-reference. Do not 
number or distribute additional DD Form 250c sheets, solely for 
continuation of Block 23 data as part of the MIRR.
    (7) Do not include classified information in the MIRR. MIRRs must 
not be classified.
    (b) Completion instructions. (1) Block 1--Procurement Instrument 
Identification (Contract) No.
    (i) Enter the 13-position alpha-numeric basic Procurement Instrument 
Identification Number (PIIN) of the contract. When applicable, enter the 
four-position alpha-numeric call/order serial number that is 
supplementary to the 13-position basic PIIN. This number is also 
referred to as the Supplementary Procurement Instrument Identification 
Number (SPIIN). Use SPIINs for (also see Subpart 204.70)--
    (A) Delivery orders under indefinite-delivery type contracts;
    (B) Orders under basic ordering agreements; and
    (C) Calls under blanket purchase agreements.
    (ii) Except as indicated in paragraph (b)(1)(iii) of this section, 
do not enter supplementary numbers used in conjunction with basic PIINs 
to identify--
    (A) Modifications of contracts and agreements;
    (B) Modifications to calls or orders; or
    (C) Document numbers representing contracts written between 
contractors.
    (iii) When shipping instructions are furnished and shipment is made 
before receipt of the confirming contract modification (SF 30, Amendment 
of Solicitation/Modification of Contract), enter the contract 
modification six-digit number or the two-digit call or order number 
immediately following the PIIN or call/order four-digit SPIIN.
    (iv) For DoD delivery orders on non-DoD contracts, enter the non-DoD 
contract number immediately below the PII number.

----------------------------------------------------------------------------------------------------------------
  1. PROCUREMENT INSTRUMENT IDENTIFICATION (CONTRACT) NO.
              SP0400-00-F-1684  GS-000S-61917                                     ORDER NO.
----------------------------------------------------------------------------------------------------------------
 

    (v) When a contract number other than PII number is used, enter that 
contract number.
    (2) Block 2--Shipment No.
    (i) The shipment number has a three-position alpha character prefix 
and a four-position numeric or alpha-numeric serial number.
    (A) The prime contractor shall control and assign the shipment 
number prefix. The shipment number shall consist of three alphabetic 
characters for each ``Shipped From''

[[Page 482]]

address (Block 11). The shipment number prefix shall be different for 
each ``Shipped From'' address and shall remain constant throughout the 
life of the contract. The prime contractor may assign separate prefixes 
when shipments are made from different locations within a facility 
identified by one ``Shipped From'' address.
    (B) Number the first shipment 0001 for shipments made under the 
contract or contract and order number shown in Block 1 from each 
``Shipped From'' address, or shipping location within the ``Shipped 
From'' address. Consecutively number all subsequent shipments with the 
identical shipment number prefix.
    (1) Use alpha-numeric serial numbers when more than 9,999 numbers 
are required. Serially assign alpha-numeric numbers with the alpha in 
the first position (the letters I and O shall not be used) followed by 
the three-position numeric serial number. Use the following alpha-
numeric sequence:

A000 through A999 (10,000 through 10,999)
B000 through B999 (11,000 through 11,999)
Z000 through Z999 (34,000 through 34,999)

    (2) When this series is completely used, start over with 0001.
    (ii) Reassign the shipment number of the initial shipment where a 
``Replacement Shipment'' is involved (see paragraph (b)(16)(iv)(F) of 
this section).
    (iii) The prime contractor shall control deliveries and on the final 
shipment of the contract shall end the shipment number with a ``Z.'' 
Where the final shipment is from other than the prime contractor's 
plant, the prime contractor may elect either to--
    (A) Direct the subcontractor making the final shipment to end that 
shipment number with a ``Z''; or
    (B) Upon determination that all subcontractors have completed their 
shipments, to correct the DD Form 250 (see F-305) covering the final 
shipment made from the prime contractor's plant by addition of a ``Z'' 
to that shipment number.
    (iv) Contractors follow the procedures in F-306 to use commercial 
invoices.
    (3) Block 3--Date Shipped. Enter the date the shipment is released 
to the carrier or the date the services are completed. If the shipment 
will be released after the date of CQA and/or acceptance, enter the 
estimated date of release. When the date is estimated, enter an ``E'' 
after the date. Do not delay distribution of the MIRR for entry of the 
actual shipping date. Reissuance of the MIRR is not required to show the 
actual shipping date (see F-303).
    (4) Block 4--B/L TCN. When applicable, enter--
    (i) The commercial or Government bill of lading number after ``B/
L;''
    (ii) The transportation control number after ``TCN'' (when a TCN is 
assigned for each line item on the DD Form 250 under Block 16 
instructions, insert ``See Block 16''); and
    (iii) The initial (line haul) mode of shipment code in the lower 
right corner of the block (see F-302).
    (5) Block 5--Discount Terms. (i) The contractor may enter the 
discount in terms of percentages on all copies of the MIRR.
    (ii) Use the procedures in F-306 when the MIRR is used as an 
invoice.
    (6) Block 6--Invoice No./date. (i) The contractor may enter the 
invoice number and actual or estimated date of invoice submission on all 
copies of the MIRR. When the date is estimated, enter an ``E'' after the 
date. Do not correct MIRRs other than invoice copies to reflect the 
actual date of invoice submission.
    (ii) Use the procedures in F-306 when the MIRR is used as an 
invoice.
    (7) Block 7--Page/of.
    Consecutively number the pages of the MIRR. On each page enter the 
total number of pages of the MIRR.
    (8) Block 8--Acceptance point.
    Enter an ``S'' for Origin or ``D'' for destination.
    (9) Block 9--Prime contractor/code.
    Enter the code and address.
    (10) Block 10--Administered by/code.
    Enter the code and address of the contract administration office 
(CAO) cited in the contract.
    (11) Block 11--Shipped from/code/FOB.
    (i) Enter the code and address of the ``Shipped From'' location. If 
identical to Block 9, enter ``See Block 9.''
    (ii) For performance of services line items which do not require 
delivery of items upon completion of services, enter the code and 
address of the location at which the services were performed. If the DD 
Form 250 covers performance at multiple locations, or if identical to 
Block 9, enter ``See Block 9.''
    (iii) Enter on the same line and to the right of ``FOB'' an ``S'' 
for Origin or ``D'' for Destination as specified in the contract. Enter 
an alphabetic ``O'' if the ``FOB'' point cited in the contract is other 
than origin or destination.
    (iv) For destination or origin acceptance shipments involving 
discount terms, enter ``DISCOUNT EXPEDITE'' in at least one-half inch 
outline-type style letters across Blocks 11 and 12. Do not obliterate 
other information in these blocks.
    (12) Block 12--Payment will be made by/code. Enter the code and 
address of the payment office cited in the contract.
    (13) Block 13--Shipped to/code. Enter the code and address from the 
contract or shipping instructions.
    (14) Block 14--Marked for/code. Enter the code and address from the 
contract or shipping instructions. When three-character project codes 
are provided in the contract or

[[Page 483]]

shipping instructions, enter the code in the body of the block, prefixed 
by ``Proj''; do not enter in the code block.
    (15) Block 15--Item No. Enter the item number used in the contract.
    (i) Use item numbers under the Uniform Contract Line Item Numbering 
System (see 204.71).
    (ii) Position the item numbers as follows--
    (A) For item numbers with four or less digits, enter the number 
immediately to the left of the vertical dashed line and prefix them with 
zeros, to achieve four digits.
    (B) For item numbers with six digits, with alpha digits in the final 
two positions, enter the last two digits to the right of the vertical 
dashed line.
    (C) For item numbers with six digits, with numbers in the final two 
positions, enter the first four digits immediately to the left of the 
vertical dashed line. Do not use the last two digits.
    (iii) Line item numbers not in accordance with the Uniform Contract 
Line Item Numbering System may be entered without regard to positioning.
    (16) Block 16--Stock/part No./description. (i) Use single or double 
spacing between line items when there are less than four line items. Use 
double spacing when there are four or more line items. Enter the 
following for each line item:
    (A) The national stock number (NSN) or noncatalog number. Where 
applicable, include a prefix or suffix. If a number is not provided, or 
it is necessary to supplement the number, include other identification 
such as the manufacturer's name or federal supply code (as published in 
Cataloging Handbook H4-1), and the part number. Show additional part 
numbers in parentheses or slashes. Show the descriptive noun of the item 
nomenclature and if provided, the Government assigned management/
material control code. The contractor may use the following technique in 
the case of equal kind supply items. The first entry shall be the 
description without regard to kind. For example, ``Shoe-Low Quarter-
Black,'' ``Resistor,'' ``Vacuum Tube,'' etc. Below this description, 
enter the contract line item number in Block 15 and Stock/Part number 
followed by the size or type in Block 16.
    (B) On the next printing line, if required by the contract for 
control purposes, enter: the make, model, serial number, lot, batch, 
hazard indicator, or similar description.
    (C) On the next printing lines enter--
    (1) The MIPR number prefixed by ``MIPR'' or the MILSTRIP requisition 
number(s) when provided in the contract; or
    (2) Shipping instructions followed on the same line (when more than 
one requisition is entered) by the unit for payment and the quantity 
shipped against each requisition.

Example:
    V04696-185-750XY19059A--EA 5
    N0018801776038XY3211BA--EA 200
    AT650803050051AAT6391J--EA 1000

    (D) When a TCN is assigned for each line item, enter on the next 
line the transportation control number prefixed by ``TCN.''
    (ii) For service line items, enter the word ``SERVICE'' followed by 
as short a description as is possible in no more than 20 additional 
characters. Some examples of service line items are maintenance, repair, 
alteration, rehabilitation, engineering, research, development, 
training, and testing. Do not complete Blocks 4, 13, and 14 when there 
is no shipment of material.
    (iii) For all contracts administered by the Defense Contract 
Management Agency, with the exception of fast pay procedures, enter and 
complete the following:

Gross Shipping Wt. ------------
State weight in pounds only.

    (iv) Starting with the next line, enter the following as appropriate 
(entries may be extended through Block 20). When entries apply to more 
than one line item in the MIRR, enter them only once after the last line 
item entry. Reference applicable line item numbers.
    (A) Enter in capital letters any special handling instructions/
limits for material environmental control, such as temperature, 
humidity, aging, freezing, shock, etc.
    (B) When a shipment is chargeable to Navy appropriation 17X4911, 
enter the appropriation, bureau control number (BCN), and authorization 
accounting activity (AAA) number (e.g., 17X4911-14003-104).
    (C) When the Navy transaction type code (TC), ``2T'' or ``7T'' is 
included in the appropriation data, enter ``TC 2T'' or ``TC 7T.''
    (D) When an NSN is required by but not cited in a contract and has 
not been furnished by the Government, the contractor may make shipment 
without the NSN at the direction of the contracting officer. Enter the 
authority for such shipment.
    (E) When Government furnished property (GFP) is included with or 
incorporated into the line item, enter the letters ``GFP.''
    (F) When shipment consists of replacements for supplies previously 
furnished, enter in capital letters ``REPLACEMENT SHIPMENT.'' (See F-
301, Block 17, for replacement indicators).
    (G) On shipments of Government furnished aeronautical equipment 
(GFAE) under Air Force contracts, enter the assignment AERNO control 
number, e.g., ``AERNO 60-6354.''
    (H) For items shipped with missing components, enter and complete 
the following:
    ``Item(s) shipped short of the following component(s): NSN or 
comparable identification ------------, Quantity ------------, Estimated 
Value ------------, Authority ------------''

[[Page 484]]

    (I) When shipment is made of components which were short on a prior 
shipment, enter and complete the following:
    ``These components were listed as shortages on shipment number ----
--------, date shipped ------------''
    (J) When shipments involve drums, cylinders, reels, containers, 
skids, etc., designated as returnable under contract provisions, enter 
and complete the following:
    ``Return to ------------, Quantity ------------, Item ------------, 
Ownership (Government/contractor).''
    (K) Enter the total number of shipping containers, the type of 
containers, and the container number(s) assigned for the shipment.
    (L) On foreign military sales (FMS) shipments, enter the special 
markings, and FMS case identifier from the contract. Also enter the 
gross weight.
    (M) When test/evaluation results are a condition of acceptance and 
are not available prior to shipment, the following note shall be entered 
if the shipment is approved by the contracting officer:

    ``Note: Acceptance and payment are contingent upon receipt of 
approved test/evaluation results.''

    The contracting officer will advise--
    (1) The consignee of the results (approval/disapproval); and
    (2) The contractor to withhold invoicing pending attachment of the 
approved test/evaluation results.
    (N) The copy of the DD Form 250 required to support payment for 
destination acceptance (top copy of those with shipment) or ARP origin 
acceptance shall be identified as follows: enter ``PAYMENT COPY'' in 
approximately one-half inch outline type style letters with ``FORWARD TO 
BLOCK 12 ADDRESS'' in approximately one-quarter inch letters immediately 
below. Do not obliterate any other entries.
    (O) For clothing and textile contracts containing a bailment clause, 
enter the words ``GFP UNIT VALUE.''
    (P) When the initial unit incorporating an approved value 
engineering change proposal (VECP) is shipped, enter the following 
statement:
    This is the initial unit delivered which incorporates VECP No. ----
--------, Contract Modification No. ------------, dated ------------
    (17) Block 17--Quantity shipped/received. (i) Enter the quantity 
shipped, using the unit of measure in the contract for payment. When a 
second unit of measure is used for purposes other than payment, enter 
the appropriate quantity directly below in parentheses.
    (ii) On the final shipment of a line item of a contract containing a 
clause permitting a variation of quantity and an underrun condition 
exists, the prime contractor shall enter a ``Z'' below the last digit of 
the quantity. Where the final shipment is from other than the prime 
contractor's plant and an underrun condition exists, the prime 
contractor may elect either to--
    (A) Direct the subcontractor making the final shipment to enter a 
``Z'' below the quantity; or
    (B) Upon determination that all subcontractors have completed their 
shipments, correct the DD Form 250 (see F-305) covering the final 
shipment of the line item from the prime contractor's plant by addition 
of a ``Z'' below the quantity. Do not use the ``Z'' on deliveries which 
equal or exceed the contract line item quantity.
    (iii) For replacement shipments, enter ``A'' below the last digit of 
the quantity, to designate first replacement, ``B'' for second 
replacement, etc. Do not use the final shipment indicator ``Z'' on 
underrun deliveries when a final line item shipment is replaced.

                              17. Quantity
                               Ship/rec'd
                                  1000
                                  (10)
                                    Z
 

    (iv) If the quantity received is the same quantity shipped and all 
items are in apparent good condition, enter by a check mark. If 
different, enter actual quantity received in apparent good condition 
below quantity shipped and circle. The receiving activity will annotate 
the DD Form 250 stating the reason for the difference.
    (18) Block 18--Unit. Enter the abbreviation of the unit measure as 
indicated in the contract for payment. Where a second unit of measure is 
indicated in the contract for purposes other than payment or used for 
shipping purposes, enter the second unit of measure directly below in 
parentheses. Authorized abbreviations are listed in MIL-STD-129, Marking 
for Shipping and Storage. For example, LB for pound, SH for sheet.

                                18. Unit
                                   LB
                                  (SH)
 

    (19) Block 19--Unit price. The contractor may, at its option, enter 
unit prices on all MIRR copies, except as a minimum:
    (i) The contractor shall enter unit prices on all MIRR copies for 
each item of property fabricated or acquired for the Government and 
delivered to a contractor as Government furnished property (GFP). Get 
the unit price from Section B of the contract. If the unit price is not 
available, use an estimate. The estimated price should be the 
contractor's estimate of what the items will cost the Government. When 
the price is estimated, enter an ``E'' after the unit price.
    (ii) Use the procedures in F-306 when the MIRR is used as an 
invoice.

[[Page 485]]

    (iii) For clothing and textile contracts containing a bailment 
clause, enter the cited Government furnished property unit value 
opposite ``GFP UNIT VALUE'' entry in Block 16.
    (iv) Price all copies of DD Forms 250 for FMS shipments with actual 
prices, if available. If actual prices are not available, use estimated 
prices. When the price is estimated, enter an ``E'' after the price.
    (20) Block 20--Amount. Enter the extended amount when the unit price 
is entered in Block 19.
    (21) Block 21--Contract quality assurance (CQA). (i) The words 
``conform to contract'' contained in the printed statements in Blocks 
21a and 21b relate to quality and to the quantity of the items on the 
report. Do not modify the statements. Enter notes taking exception in 
Block 16 or on attached supporting documents with an appropriate block 
cross-reference.
    (ii) When a shipment is authorized under alternative release 
procedure, attach or include the appropriate contractor signed 
certificate on the top copy of the DD Form 250 copies distributed to the 
payment office or attach or include the appropriate contractor 
certificate on the contract administration office copy when contract 
administration (Block 10 of the DD Form 250) is performed by the Defense 
Contract Management Agency (DCMA).
    (iii) When contract terms provide for use of Certificate of 
Conformance and shipment is made under these terms, the contractor shall 
enter ``Certificate of Conformance'' in Block 21a on the next line 
following the CQA and acceptance statements. Attach or include the 
appropriate contractor signed certificate on the top copy of the DD Form 
250 copies distributed to the payment office or attach or include the 
appropriate certificate on the contract administration office copy when 
contract administration (Block 10 of the DD Form 250) is performed by 
DCMA. In addition, attach a copy of the signed certificate to, or enter 
on, copies of the MIRR sent with shipment.
    (iv) Origin. (A) The authorized Government representative must--
    (1) Place an ``X'' in the appropriate CQA and/or acceptance box(es) 
to show origin CQA and/or acceptance. When the contract requires CQA at 
destination in addition to origin CQA, enter an asterisk at the end of 
the statement and an explanatory note in Block 16;
    (2) Sign and date;
    (3) Enter the typed, stamped, or printed name, title, mailing 
address, and commercial telephone number.
    (B) When alternative release procedures apply--
    (1) The contractor or subcontractor shall complete the entries 
required under paragraph (A) and enter in capital letters ``ALTERNATIVE 
RELEASE PROCEDURE'' on the next line following the printed CQA/
acceptance statement.
    (2) When acceptance is at origin and contract administration is 
performed by an office other than DCMA, the contractor shall furnish the 
four payment office copies of the MIRR to the authorized Government 
representative for dating and signing of one copy and forwarding of all 
copies to the payment office.
    (3) When acceptance is at origin and contract administration is 
performed by DCMA, furnish the contract administration office copy of 
the MIRR to the authorized Government representative for dating and 
signing and forwarding to the contract administration office (see F-401, 
Table 1).
    (C) When fast pay procedures apply, the contractor or subcontractor 
shall enter in capital letters ``FAST PAY'' on the next line following 
the printed CQA/acceptance statement. When CQA is required, the 
authorized Government representative shall execute the block as required 
by paragraph (A).
    (D) When Certificate of Conformance procedures apply, inspection or 
inspection and acceptance are at source, and the contractor's 
Certificate of Conformance is required, the contractor shall make 
entries required by paragraph (iv)(A).
    (1) For contracts administered by an office other than DCMA, furnish 
the four payment office copies of the MIRR to the authorized Government 
representative for dating and signing of one copy, and forwarding of all 
copies to the payment office.
    (2) For contracts administered by DCMA, furnish the contract 
administration office copy of the MIRR to the authorized Government 
representative for dating and signing and forwarding to the contract 
administration office (see F-401, Table 1).
    (3) When acceptance is at destination, no entry shall be made other 
than ``CERTIFICATE OF CONFORMANCE.''
    (v) Destination. (A) When acceptance at origin is indicated in Block 
21a, make no entries in Block 21b.
    (B) When CQA and acceptance or acceptance is at destination, the 
authorized Government representative must--
    (1) Place an ``X'' in the appropriate box(es);
    (2) Sign and date; and
    (3) Enter typed, stamped, or printed name, title, mailing address, 
and commercial telephone number.
    (C) When ``ALTERNATIVE RELEASE PROCEDURE'' is entered in Block 21a 
and acceptance is at destination, the authorized Government 
representative must complete the entries required by paragraph 
(b)(21)(v)(B) of this section.
    (D) Forward the executed payment copy or MILSCAP format identifier 
PKN or PKP to the payment office cited in Block 12 within 4 work days (5 
days when MILSCAP Format is

[[Page 486]]

used) after delivery and acceptance of the shipment by the receiving 
activity. Forward one executed copy of the final DD Form 250 to the 
contract administration office cited in Block 10 for implementing 
contract closeout procedures.
    (E) When ``FAST PAY'' is entered in Block 21a, make no entries in 
this block.
    (22) Block 22--Receiver's Use. The authorized representative of the 
receiving activity (Government or contractor) must use this block to 
show receipt, quantity, and condition. The authorized representative 
must--
    (i) Enter the date the supplies arrived. For example, when off-
loading or in-checking occurs subsequent to the day of arrival of the 
carrier at the installation, the date of the carrier's arrival is the 
date received for purposes of this block;
    (ii) Sign; and
    (iii) Enter typed, stamped, or printed name, title, mailing address, 
and commercial telephone number.
    (23) Block 23--Contractor use only. Self explanatory.
F-302 Mode/method of shipment codes.

------------------------------------------------------------------------
              Code                             Description
------------------------------------------------------------------------
               A                 Motor, truckload.
               B                 Motor, less than truckload.
               C                 Van (unpacked, uncrated personal or
                                  Government property).
               D                 Driveaway, truckaway, towaway.
               E                 Bus.
               F                 Air Mobility Command (Channel and
                                  Special Assignment Airlift Mission).
               G                 Surface parcel post.
               H                 Air parcel post.
               I                 Government trucks, for shipment outside
                                  local delivery area.
               J                 Air, small package carrier.
               K                 Rail, carload.\1\
               L                 Rail, less than carload.\1\
               M                 Surface, freight forwarder.
               N                 LOGAIR.
               O                 Organic military air (including
                                  aircraft of foreign governments).
               P                 Through Government Bill of Lading
                                  (TGBL).
               Q                 Commercial air freight (includes
                                  regular and expedited service provided
                                  by major airlines; charters and air
                                  taxis).
               R                 European Distribution System or Pacific
                                  Distribution System.
               S                 Scheduled Truck Service (STS) (applies
                                  to contract carriage, guaranteed
                                  traffic routings and/or scheduled
                                  service).
               T                 Air freight forwarder.
               U                 QUICKTRANS.
               V                 SEAVAN.
               W                 Water, river, lake, coastal
                                  (commercial).
               X                 Bearer, walk-thru (customer pickup of
                                  material).
               Y                 Military Intratheater Airlift Service.
               Z                 Military Sealift Command (MSC)
                                  (controlled contract or arranged
                                  space).
               2                 Government watercraft, barge, lighter.
               3                 Roll-on Roll-off (RORO) service.
               4                 Armed Forces Courier Service (ARFCOS).
               5                 Surface, small package carrier.
               6                 Military official mail (MOM).
               7                 Express mail.
               8                 Pipeline.
               9                 Local delivery by Government or
                                  commercial truck (includes on base
                                  transfers; deliveries between air,
                                  water, or motor terminals; and
                                  adjacent activities). Local delivery
                                  areas are identified in commercial
                                  carriers' tariffs which are filed and
                                  approved by regulatory authorities.
------------------------------------------------------------------------
\1\ Includes trailer/container-on-flat-car (excluding SEAVAN).

F-303 Consolidated shipments.
    When individual shipments are held at the contractor's plant for 
authorized transportation consolidation to a single bill of lading, the 
contractor may prepare the DD Forms 250 at the time of CQA or acceptance 
prior to the time of actual shipment (see Block 3).
F-304 Multiple consignee instructions.
    The contractor may prepare one MIRR when the identical line item(s) 
of a contract are to be shipped to more than one consignee, with the 
same or varying quantities, and the shipment requires origin acceptance. 
Prepare the MIRR using the procedures in this appendix with the 
following changes--
    (a) Blocks 2, 4, 13, and, if applicable, 14--Enter ``See Attached 
Distribution List.''
    (b) Block 15--The contractor may group item numbers for identical 
stock/part number and description.
    (c) Block 17--Enter the ``total'' quantity shipped by line item or, 
if applicable, grouped identical line items.
    (d) Use the DD Form 250c to list each individual ``Shipped To'' and 
``Marked For'' with--
    (1) Code(s) and complete shipping address and a sequential shipment 
number for each;
    (2) Line item number(s);
    (3) Quantity;
    (4) MIPR number(s), preceded by ``MIPR,'' or the MILSTRIP 
requisition number, and quantity for each when provided in the contract 
or shipping instructions; and
    (5) If applicable, bill of lading number, TCN, and mode of shipment 
code.
    (e) The contractor may omit those distribution list pages of the DD 
Form 250c that are not applicable to the consignee. Provide a complete 
MIRR for all other distribution.
F-305 Correction instructions.
    Make a new revised MIRR or correct the original when, because of 
errors or omissions, it is necessary to correct the MIRR after 
distribution has been made. Use data identical to that of the original 
MIRR. Do not correct MIRRs for Blocks 19 and 20 entries. Make the 
corrections as follows--
    (a) Circle the error and place the corrected information in the same 
block; if space is limited, enter the corrected information in Block 16 
referencing the error page and

[[Page 487]]

block. Enter omissions in Block 16 referencing omission page and block. 
For example--

                             2. SHIPMENT NO.
                                (AAA0001)
                              See Block 16
 


                              17. QUANTITY
                               SHIP/REC'D
                                   19
                                  (17)
 


                     16. STOCK/PART NO. DESCRIPTION
                              CORRECTIONS:
Refer Block 2: Change shipment No. AAA001 to AAA0010 on all pages of the
 MIRR.
Refer Blocks 15, 16, 17, and 18, page 2: Delete in entirety Line Item
 No. 0006. This item was not shipped.
 

    (b) When corrections have been made to entries for line items (Block 
15) or quantity (Block 17) enter the words ``CORRECTIONS HAVE BEEN 
VERIFIED'' on page 1. The authorized Government representative will date 
and sign immediately below the statement. This verification statement 
and signature are not required for other corrections.
    (c) Clearly mark the pages of the MIRR requiring correction with the 
words ``CORRECTED COPY.'' Avoid obliterating any other entries. Where 
corrections are made only on continuation sheets, also mark page number 
1 with the words ``CORRECTED COPY.''
    (d) Page 1 and only those continuation pages marked ``CORRECTED 
COPY'' shall be distributed to the initial distribution. A complete MIRR 
with corrections shall be distributed to new addressee(s) created by 
error corrections.
F-306 Invoice instructions.
    (a) Contractors shall submit payment requests in electronic form, 
unless an exception in 232.7002 applies. Contractor submission of the 
material inspection and receiving information required by this appendix 
by using the Wide Area WorkFlow-Receipt and Acceptance electronic form 
(see paragraph (b)(1) of the clause at 252.232-7003) fulfills the 
requirement for an MIRR.
    (b) If the contracting officer authorizes the contractor to submit 
an invoice in paper form, the Government encourages, but does not 
require, the contractor to use the MIRR as an invoice, in lieu of a 
commercial form. If commercial forms are used, identify the related MIRR 
shipment number(s) on the form. If using the MIRR as an invoice, prepare 
the MIRR and forward the required number of copies to the payment office 
as follows:
    (1) Complete Blocks 5, 6, 19, and 20. Block 6 shall contain the 
invoice number and date. Column 20 shall be totaled.
    (2) Mark in letters approximately one inch high, first copy: 
``ORIGINAL INVOICE, for all invoice submissions; and three copies: 
``INVOICE COPY,'' when the payment office requires four copies. 
Questions regarding the appropriate number of copies (i.e., one or four) 
should be directed to the applicable payment office.
    (3) Forward the appropriate number of copies to the payment office 
(Block 12 address), except when acceptance is at destination and a Navy 
finance office will make payment, forward to destination.
    (4) Be sure to separate the copies of the MIRR used as an invoice 
from the copies of the MIRR used as a receiving report.
F-307 Packing list instructions.
    Contractors may use copies of the MIRR as a packing list. The 
packing list copies are in addition to the copies of the MIRR required 
for standard distribution (see F-401). Mark them ``PACKING LIST.''
F-308 Receiving instructions.
    When the MIRR is used for receiving purposes, local directives shall 
prescribe procedures. If CQA and acceptance or acceptance of supplies is 
required upon arrival at destination, see F-301(b)(21)(v) for 
instructions.

           Part 4_Distribution of DD Form 250 and DD Form 250c

F-401 Distribution.
    (a) The contractor is responsible for distributing the DD Form 250, 
including mailing and payment of postage.
    (b) Contractors shall distribute MIRRs using the instructions in 
Tables 1 and 2.
    (c) Contractors shall distribute MIRRs on non-DoD contracts using 
this appendix as amended by the contract.
    (d) Contractors shall make distribution promptly, but no later than 
the close of business of the work day following--
    (1) Signing of the DD Form 250 (Block 21a) by the authorized 
Government representative; or
    (2) Shipment when authorized under terms of alternative release, 
certificate of conformance, or fast pay procedures; or
    (3) Shipment when CQA and acceptance are to be performed at 
destination.
    (e) Do not send the consignee copies (via mail) on overseas 
shipments to port of embarkation (POE). Send them to consignee at APO/
FPO address.
    (f) Copies of the MIRR forwarded to a location for more than one 
recipient shall clearly identify each recipient.

                Material Inspection and Receiving Report

                     Table 1--Standard Distribution

With Shipment*.........................................................2
Consignee (via mail)...................................................1
    (For Navy procurement, include unit price)

[[Page 488]]

    (For foreign military sales, consignee copies are not required)
Contract Administration Office.........................................1
    (Forward direct to address in Block 10 except when addressee is a 
Defense Contract Management Agency (DCMA) office and a certificate of 
conformance or the alternate release procedures (see F-301, Block 21) is 
involved, and acceptance is at origin; then, forward through the 
authorized Government representative.)
Purchasing Office......................................................1
Payment Office**.......................................................2
(Forward direct to address in Block 12 except--
    (i) When address in Block 10 is a DCMA office and payment office in 
Block 12 is the Defense Finance and Accounting Service, Columbus Center, 
do not make distribution to the Block 12 addressee;
    (ii) When address in Block 12 is the Defense Finance and Accounting 
Service, Columbus Center/Albuquerque Office (DFAS-CO/ALQ), Kirtland AFB, 
NM, attach only one copy to the required number of copies of the 
contractor's invoice;
    (iii) When acceptance is at destination and a Navy finance office 
will make payment, forward to destination; and
    (iv) When a certificate of conformance or the alternative release 
procedures (see F-301, Block 21) are involved and acceptance is at 
origin, forward the copies through the authorized Government 
representative.
ADP Point for CAO (applicable to Air Force only).......................1
    (When DFAS-CO/ALQ is the payment office in Block 12, send one copy 
to DFAS-CO/ALQ immediately after signature. If submission of delivery 
data is made electronically, distribution of this hard copy need not be 
made to DFAS-CO/ALQ.)
CAO of Contractor Receiving GFP........................................1
    (For items fabricated or acquired for the Government and shipped to 
a contractor as Government furnished property, send one copy directly to 
the CAO cognizant of the receiving contractor, ATTN: Property 
Administrator (see DoD 4105.59-H).)
    *Attached as follows:

 
             Type of shipment                         Location
 
Carload or truckload......................  Affix to the shipment where
                                             it will be readily visible
                                             and available upon receipt.
Less than carload or truckload............  Affix to container number
                                             one or container bearing
                                             lowest number.
Mail, including parcel post...............  Attach to outside or include
                                             in the package. Include a
                                             copy in each additional
                                             package of multi-package
                                             shipments.
Pipeline, tank car, or railroad cars for    Forward with consignee
 coal movements.                             copies.
 
** Payment by Defense Finance and Accounting Service, Columbus Center
  will be based on the source acceptance copies of DD Forms 250
  forwarded to the contract administration office.

                Material Inspection And Receiving Report

                                          Table 2--Special Distribution
----------------------------------------------------------------------------------------------------------------
               As required                            Address                         Number of copies
----------------------------------------------------------------------------------------------------------------
Each: Navy Status Control Activity,       Address specified in contract..  1 Each
 Army, Air Force, DLA Inventory Control                                    addressee.
 Manager.
Quality Assurance Representative........  Address specified by the         1
                                           assigned quality assurance
                                           representative.
Transportation Office issuing GBL         CAO address unless otherwise     1
 (attach to GBL memorandum copy).          specified in the contract.
Purchasing Office other than office       Address specified in the         1
 issuing contract.                         contract.
Foreign Military Sales Representative...  Address specified in the         8
                                           contract.
Military Assistance Advisory Group        U.S. Military Advisory Group,    1
 (Grant Aid shipments).                    Military Attache, Mission, or
                                           other designated agency
                                           address as specified in the
                                           contract.
Army Foreign Military Sales.............  Commander, U.S. Army Security    1
                                           Assistance Command, ATTN:
                                           AMSAC-OL, 54 ``M'' Avenue,
                                           Suite 1, New Cumberland, PA
                                           17070-5096.
Air Force: On shipments of new            HQ Air Force Materiel Command,   1
 production of aircraft and missiles,      LGX-AVDO, Area A, Building
 class 1410 missiles, 1510 aircraft        262, Room N142, 4375 Chidlaw
 (fixed wing, all types), 1520 aircraft    Road, Wright-Patterson AFB, OH
 (rotary wing), 1540 gliders, 1550         45433-5006.
 target drones.
When above items are delivered to         DCMA...........................  1
 aircraft modification centers.
Foreign Military Sales/Military           National Defence Headquarters,   1
 Assistance Program (Grant Aid)            Ottawa, Ontario, Canada, K1A
 shipments to Canada.                      OK4, ATTN: DPSUPS3.
Other than Canada.......................  Address in the contract........  1

[[Page 489]]

 
When consignee is an Air National Guard   Consignee address (Block 13),    3
 Activity.                                 ATTN: Property Officer.
Navy: Navy Foreign Military Sales.......  Naval Inventory Control Point,   2
                                           Deputy Commander for
                                           International Programs (NAVICP
                                           Code P761), 700 Robbins
                                           Avenue, Philadelphia, PA 19111-
                                           5095.
When typed code (TC) 2T or 7T is shown    Naval Inventory Control Point    2
 in Block 16, or when shipment is          (Code 0142) for aviation type
 consigned to another contractor's plant   material, 700 Robbins Avenue,
 for a Government representative or when   Philadelphia, PA 19111-5098,
 Block 16 indicates shipment includes      and
 GFP.
                                          Naval Inventory Control Point    2
                                           (Code 0143) for all other
                                           material, 5450 Carlisle Pike,
                                           PO Box 2020, Mechanicsburg, PA
                                           17055-0788.
Bulk Petroleum Shipments................  Cognizant Defense Fuel Region    1
                                           (see Table 4).
----------------------------------------------------------------------------------------------------------------

        Part 5_Preparation of the DD Form 250	1 (Loading Report)

F-501 Instructions.
    Prepare the DD Form 250-1 using the following instructions when 
applied to a tanker or barge cargo lifting. If space is limited, use 
abbreviations. The block numbers correspond to those on the form.
    (a) Block 1--Tanker/Barge. Line out ``TANKER'' or ``BARGE'' as 
appropriate and place an ``X'' to indicate loading report.
    (b) Block 2--Inspection Office. Enter the name and location of the 
Government office conducting the inspection.
    (c) Block 3--Report No. Number each form consecutively, starting 
with number 1, to correspond to the number of shipments made against the 
contract. If shipment is made from more than one location against the 
same contract, use this numbering system at each location.
    (d) Block 4--Agency Placing Order on shipper, city, State and/or 
local address (loading). Enter the applicable Government activity.
    (e) Block 5--Department. Enter military department owning product 
being shipped.
    (f) Block 6--Prime contract or P.O. No. Enter the contract or 
purchase order number.
    (g) Block 7--Name of prime contractor, city, State and/or local 
address (loading). Enter the name and address of the contractor as shown 
in the contract.
    (h) Block 8--Storage contract. Enter storage contract number if 
applicable.
    (i) Block 9--Terminal or refinery shipped from, city, State and/or 
local address. Enter the name and location of the contractor facility 
from which shipment is made. Also enter delivery point in this space as 
either ``FOB Origin'' or ``FOB Destination.''
    (j) Block 10--Order No. on supplier. Enter number of the delivery 
order, purchase order, subcontract or suborder placed on the supplier.
    (k) Block 11--Shipped to: (receiving activity, city, State and/or 
local address. Enter the name and geographical address of the consignee 
as shown on the shipping order.
    (l) Block 12--B/L Number. If applicable, enter the initials and 
number of the bill of lading. If a commercial bill of lading is later 
authorized to be converted to a Government bill of lading, show ``Com. 
B/L to GB/L.''
    (m) Block 13--Reqn. or request No. Enter number and date from the 
shipping instructions.
    (n) Block 14--Cargo No. Enter the cargo number furnished by the 
ordering office.
    (o) Block 15--Vessel. Enter the name of tanker or barge.
    (p) Block 16--Draft arrival. Enter the vessel's draft on arrival.
    (q) Block 17--Draft sailing. Enter the vessel's draft on completion 
of loading.
    (r) Block 18--Previous two cargoes. Enter the type of product 
constituting previous two cargoes.
    (s) Block 19--Prior inspection. Leave blank.
    (t) Block 20--Condition of shore pipeline. Enter condition of line 
(full or empty) before and after loading.
    (u) Block 21--Appropriation (loading). Enter the appropriation 
number shown on the contract, purchase order or distribution plan. If 
the shipment is made from departmentally owned stock, show ``Army, Navy, 
or Air Force (as appropriate) owned stock.''
    (v) Block 22--Contract item No. Enter the contract item number 
applicable to the shipment.
    (w) Block 23--Product. Enter the product nomenclature and grade as 
shown in the contract or specification, the stock or class number, and 
the NATO symbol.
    (x) Block 24--Specifications. Enter the specification and amendment 
number shown in the contract.
    (y) Block 25--Statement of quantity. Enter in the ``LOADED'' column, 
the net barrels,

[[Page 490]]

net gallons, and long tons for the cargo loaded. NOTE: If more than \1/
2\ of 1 percent difference exists between the ship and shore quantity 
figures, the contractor shall immediately investigate to determine the 
cause of the difference. If necessary, prepare corrected documents; 
otherwise, put a statement in Block 28 as to the probable or actual 
cause of the difference.
    (z) Block 26--Statement of quality. (1) Under the heading ``TESTS'' 
list all inspection acceptance tests of the specification and any other 
quality requirements of the contract.
    (2) Under the heading ``SPECIFICATION LIMITS'' list the limits or 
requirements as stated in the specification or contract directly 
opposite each entry in the ``TESTS'' column. List waivers to technical 
requirements.
    (3) Under the heading ``TEST RESULTS'' list the test results 
applicable to the storage tank or tanks from which the cargo was lifted. 
If more than one storage tank is involved, list the tests applicable to 
each tank in separate columns headed by the tank number, the date the 
product in the tank was approved, and the quantity loaded from the tank. 
Each column shall also list such product characteristics as amount and 
type of corrosion inhibitor, etc.
    (aa) Block 27--Time statement. Line out ``DISCHARGE'' and 
``DISCHARGING.'' Complete all applicable entries of the time statement 
using local time. Take these dates and times from either the vessel or 
shore facility log. The Government representative shall ensure that the 
logs are in agreement on those entries used. If the vessel and shore 
facility logs are not in agreement, the Government representative will 
explain the reasons in Block 28--REMARKS. Do not enter the date and time 
the vessel left berth on documents placed aboard the vessel. The date 
and time shall appear on all other copies. Express all dates in sequence 
of day, month, and year with the month spelled out or abbreviated (e.g., 
10 Sept. 67). The term FINISHED BALLAST DISCHARGE is meant to include 
all times needed to complete deballasting and mopping/drying of ship's 
tanks. The inspection of ship's tanks for loading is normally performed 
immediately upon completion of drying tanks.
    (bb) Block 28--Remarks. Use this space for reporting--(1) All 
delays, their cause and responsible party (vessel, shore facility, 
Government representative, or other).
    (2) Details of loading abnormalities such as product losses due to 
overflow, leaks, delivery of product from low level in shore tanks, etc.
    (3) In the case of multiple consignees, enter each consignee, the 
amount consigned to each, and if applicable, the storage contract 
numbers appearing on the delivery order.
    (4) When product title is vested in the U.S. Government, insert in 
capital letters ``U.S. GOVERNMENT OWNED CARGO.'' If title to the product 
remains with the contractor and inspection is performed at source with 
acceptance at destination, insert in capital letters ``CONTRACTOR OWNED 
CARGO.''
    (5) Seal numbers and location of seals. If space is not adequate, 
place this information on the ullage report or an attached supplemental 
sheet.
    (cc) Block 29--Company or receiving terminal. Line out ``OR 
RECEIVING TERMINAL'' and get the signature of the supplier's 
representative.
    (dd) Block 30--Certification by government representative. Line out 
``DISCHARGED.'' The Government representative shall date and sign the 
form to certify inspection and acceptance, as applicable, by the 
Government. The name of the individual signing this certification, as 
well as the names applied in Blocks 29 and 31, shall be typed or hand 
lettered. The signature in Block 30 must agree with the typed or 
lettered name to be acceptable to the paying office.
    (ee) Block 31--Certification by master or agent. Obtain the 
signature of the master of the vessel or its agent.

       Part 6_Preparation of the DD form 250	1 (Discharge Report)

F-601 Instructions.
    Prepare the DD Form 250-1 using the following instructions when 
applied to a tanker or barge discharge. If space is limited, use 
abbreviations. The block numbers correspond to those on the form.
    (a) Block 1--Tanker/barge. Line out ``TANKER'' or ``BARGE'' as 
applicable and place an ``X'' to enter discharge report.
    (b) Block 2--Inspection office. Enter Government activity performing 
inspection on the cargo received.
    (c) Block 3--Report No. Leave blank.
    (d) Block 4--Agency placing order on shipper, city, state and/or 
local address (loading). Enter Government agency shown on loading 
report.
    (e) Block 5--Department. Enter Department owning product being 
received.
    (f) Block 6--Prime contract or P.O. No. Enter the contract or 
purchase order number shown on the loading report.
    (g) Block 7--Name of prime contractor, city, state and/or local 
address (loading). Enter the name and location of contractor who loaded 
the cargo.
    (h) Block 8--Storage contract. Enter the number of the contract 
under which material is placed in commercial storage where applicable.
    (i) Block 9--Terminal or refinery shipped from, city, state and/or 
local address. Enter source of cargo.

[[Page 491]]

    (j) Block 10--Order no. on supplier. Make same entry appearing on 
loading report.
    (k) Block 11--Shipped to: (receiving activity, city, state and/or 
local address). Enter receiving activity's name and location.
    (l) Block 12--B/L Number. Enter as appears on loading report.
    (m) Block 13--Reqn. or Request No. Leave blank.
    (n) Block 14--Cargo No. Enter cargo number shown on loading report.
    (o) Block 15--Vessel. Enter name of tanker or barge discharging 
cargo.
    (p) Block 16--Draft arrival. Enter draft of vessel upon arrival at 
dock.
    (q) Block 17--Draft sailing. Enter draft of vessel after 
discharging.
    (r) Block 18--Previous two cargoes. Leave blank.
    (s) Block 19--Prior inspection. Enter the name and location of the 
Government office which inspected the cargo loading.
    (t) Block 20--Condition of shore pipeline. Enter condition of line 
(full or empty) before and after discharging.
    (u) Block 21--Appropriation (loading). Leave blank.
    (v) Block 22--Contract item no. Enter the item number shown on the 
loading report.
    (w) Block 23--Product. Enter information appearing in Block 23 of 
the loading report.
    (x) Block 24--Specifications. Enter information appearing in Block 
24 of the loading report.
    (y) Block 25--Statement of quantity. Enter applicable data in proper 
columns.
    (1) Take ``LOADED'' figures from the loading report.
    (2) Determine quantities discharged from shore tank gauges at 
destination.
    (3) If a grade of product is discharged at more than one point, 
calculate the loss or gain for that product by the final discharge 
point. Report amounts previously discharged on discharge reports 
prepared by the previous discharge points. Transmit volume figures by 
routine message to the final discharge point in advance of mailed 
documents to expedite the loss or gain calculation and provide proration 
data when more than one department is involved.
    (4) The loss or gain percentage shall be entered in the ``PERCENT'' 
column followed by ``LOSS'' or ``GAIN,'' as applicable.
    (5) On destination acceptance shipments, accomplish the 
``DISCHARGED'' column only, unless instructed to the contrary.
    (z) Block 26--Statement of quality. (1) Under the heading ``TESTS'' 
enter the verification tests performed on the cargo preparatory to 
discharge.
    (2) Under ``SPECIFICATION LIMITS'' enter the limits, including 
authorized departures (if any) appearing on the loading report, for the 
tests performed.
    (3) Enter the results of tests performed under the heading ``TEST 
RESULTS.''
    (aa) Block 27--Time statement. Line out ``LOAD'' and ``LOADING.'' 
Complete all applicable entries of the time statement using local time. 
Take the dates and times from either the vessel or shore facility log. 
The Government representative shall ensure that these logs are in 
agreement with entries used. If the vessel and shore facility logs are 
not in agreement, the Government representative will explain the 
reason(s) in Block 28--REMARKS. Do not enter the date and time the 
vessel left berth on documents placed aboard the vessel. The date and 
time shall appear on all other copies. Express all dates in sequence of 
day, month, and year with the month spelled out or abbreviated (e.g., 10 
Sept. 67).
    (bb) Block 28--Remarks. Use this space for reporting important facts 
such as--
    (1) Delays, their cause, and responsible party (vessel, shore 
facility, Government representative, or others).
    (2) Abnormal individual losses contributing to the total loss. Enter 
the cause of such losses as well as actual or estimated volumes 
involved. Such losses shall include, but not be restricted to, product 
remaining aboard (enter tanks in which contained), spillages, line 
breaks, etc. Note where gravity group change of receiving tank contents 
results in a fictitious loss or gain. Note irregularities observed on 
comparing vessel ullages obtained at loading point with those at the 
discharge point if they indicate an abnormal transportation loss or 
contamination.
    (cc) Block 29--Company or receiving terminal. Line out ``COMPANY 
OR.'' Secure the signature of a representative of the receiving 
terminal.
    (dd) Block 30--Certification by government representative. Line out 
``LOADED.'' The Government representative shall date and sign the form 
to certify inspection and acceptance, as applicable, by the Government. 
The name of the individual signing the certification as well as the 
names applied in Blocks 29 and 31, shall be typed or hand lettered on 
the master or all copies of the form. The signature in Block 30 must 
agree with the typed or lettered name to be acceptable to the paying 
office.
    (ee) Block 31--Certification by master or agent. Obtain the 
signature of the master of the vessel or the vessel's agent.

                Part 7_Distribution of the DD Form 250	1

F-701 Distribution.
    (a) The Government representative shall distribute the completed DD 
Form 250-1 using Table 3 of this appendix as amended by the provisions 
of the contract or shipping order.
    (b) The contractor shall furnish the Government representative 
sufficient copies of

[[Page 492]]

the completed form to permit the required distribution.
    (c) Distribution of the form shall be made as soon as possible, but 
not later than 24 hours following completion of the form. (See Table 3 
on following pages)
F-702 Corrected DD Form 250-1.
    When errors are made in entries on the form which would affect 
payment or accountability, make corrected copies. Circle the corrected 
entries on all copies and mark the form ``CORRECTED COPY.'' Enter the 
statement, ``Corrections Have Been Verified,'' in Block 26 with the 
authorized Government representative's dated signature directly below. 
Make distribution of the certified corrected copy to all recipients of 
the original distribution.

                                                     Table 3
----------------------------------------------------------------------------------------------------------------
                                                                         Number of copies
                                                 ---------------------------------------------------------------
                                 Recipient of DD   Loading (Prepared by shipper       Discharge (Prepared by
       Type of shipment            Form 250-1      or Government representative)        receiving activity)
                                                 ---------------------------------------------------------------
                                                      Tanker           Barge          Tanker           Barge
----------------------------------------------------------------------------------------------------------------
All (On overseas shipments,     Each Consignee    2.............  1.............  As Required...  As Required
 provide for a minimum of 4      (by mail CONUS
 consignees. Place 1 copy,       only).
 attached to ullage report, in
 each of 4 envelopes. Mark the
 envelopes, ``Consignee--First
 Destination,'' ``Consignee--
 Second Destination,'' etc.
 Deliver via the vessel).
                                With Shipment...  1.............  1.............  As Required...  As Required
                                Master of Vessel  1.............  1.............  1.............  1
                                Tanker or Barge   2.............  2.............  2.............  2
                                 Agent.
                                Contractor......  As Required...  As Required...  As Required...  As Required
                                Cognizant         1.............  1.............  1.............  1
                                 Inspection
                                 Office.
                                Government        1.............  1.............  1.............  1
                                 Representative
                                 responsible for
                                 quality at each
                                 destination.
                                Government        1.............  1.............  1*............  1*
                                 Representative
                                 at Cargo
                                 Loading Point.
On all USNS tankers and all     Military Sealift  2.............  2.............  2.............  2
 MSC chartered tankers and MSC   Command, Code
 chartered barges.               N322,
                                 Washington, DC
                                 20396-5100.
See the contract or shipping    Payment Office:   2.............  2.............  2.............  2
 order for finance               If this is DFAS-
 documentation and any           CO, send copies
 supplemental requirements for   to: Defense
 Government-owned product        Energy Support
 shipments and receipts.         Center, ATTN:
                                 DESC-FII, 8725
                                 John J. Kingman
                                 Road, Fort
                                 Belvoir, VA
                                 22060-6221 (do
                                 not send copies
                                 to DFAS-CO).
For shipments and receipts of   Defense Energy    1.............  1.............  1.............  1
 DESC financed cargoes for       Support Center,
 which DFAS-CO is not the        ATTN: DESC-FII,
 paying office.                  8725 John J.
                                 Kingman Road,
                                 Fort Belvoir,
                                 VA 22060-6221.

[[Page 493]]

 
For shipments on all USNS       Defense Energy    1.............  1.............  1**...........  1
 tankers, MSC chartered          Support Center,
 tankers and barges, and FOB     ATTN: DESC-BID,
 destination tankers with copy   8725 John J.
 of ullage report.               Kingman Road,
                                 Fort Belvoir,
                                 VA 22060-6221.
On Army ILP shipments.........  U.S. Army         2.............  2.............  2.............  2
                                 International
                                 Logistics
                                 Center, New
                                 Cumberland Army
                                 Depot, New
                                 Cumberland, PA
                                 17070-5001.
NAVY--On all shipments to Navy  Defense Energy    2.............  1.............  2.............  1
 Operated Terminals.             Support Center,
                                 ATTN: DESC-FII,
                                 8725 John J.
                                 Kingman Road,
                                 Fort Belvoir,
                                 VA 22060-6221.
On all shipments to AF Bases..  Directorate of    1.............  1.............  1.............  1
                                 Energy
                                 Management, SA
                                 ALC(SFT), Kelly
                                 AFB, TX 78241-
                                 5000.
On all CONUS loadings.........  DESC Region(s)    1.............  1.............  1.............  1
                                 cognizant of
                                 shipping point.
On all shipments to CONUS       DESC Region(s)    1.............  1.............  0.............  0
 Destinations.                   cognizant of
                                 shipping and
                                 receiving
                                 point.****.
For all discharges of cargoes   Defense Energy    ..............  ..............  1***..........  1***
 originating at Defense Energy   Support Center,
 Support Points and              ATTN: DESC-BID,
 discharging at activities not   8725 John J.
 Defense Energy Support Points.  Kingman Road,
                                 Fort Belvoir,
                                 VA 22060-6221.
----------------------------------------------------------------------------------------------------------------
* With copy of ullage report.
** Dry tank certificate to accompany DD Form 250-1 and ullage report.
*** Copies of the DD Form 250-1, forwarded by bases, will include the following in Block 11: Shipped to:
  Supplementary Address, if applicable; Signed Code; and Fund Code.
**** See Table 4.


       Table 4--Fuel Region Locations and Areas of Responsibility
a. DFR Northeast.............  Defense Fuel Region Northeast, Building
                                2404, McGuire AFB, NJ 08641-5000.
    Area of Responsibility...  Connecticut, Delaware, District of
                                Columbia, Maine, Maryland,
                                Massachusetts, New Hampshire, New
                                Jersey, New York, Pennsylvania, Rhode
                                Island, Vermont, Virginia, West
                                Virginia.
b. DFR Central...............  Defense Fuel Region Central, 8900 S.
                                Broadway, Building 2, St. Louis, MO
                                63125-1513.
    Area of Responsibility...  Colorado, Illinois, Indiana, Iowa,
                                Kansas, Kentucky, Michigan, Minnesota,
                                Missouri, Nebraska, North Dakota, Ohio,
                                South Dakota, Wisconsin, and Wyoming.
c. DFR South.................  Defense Fuel Region South, Federal Office
                                Building, 2320 La Branch, Room 1213,
                                Houston, TX 77004-1091.
    Area of Responsibility...  Alabama, Arizona, Arkansas, Caribbean
                                Area, Florida, Georgia, Louisiana,
                                Mexico, Mississippi, New Mexico, North
                                Carolina, Oklahoma, Puerto Rico, South
                                Carolina, Tennessee, Texas, West Indies,
                                Central America, and South America.
d. DFR West..................  Defense Fuel Region West, 3171 N. Gaffney
                                Street, San Pedro, CA 90731-1099.
    Area of Responsibility...  California, Idaho, Montana, Nevada,
                                Oregon, Utah, and Washington.
e. DFR Alaska................  Defense Fuel Region Alaska, Elmendorf
                                AFB, Alaska 99506-5000.

[[Page 494]]

 
    Area of Responsibility...  Alaska and Aleutians.
f. DFR Europe................  Defense Fuel Region Europe, Building
                                2304, APO New York 09128-4105.
    Area of Responsibility...  Continental Europe, United Kingdom,
                                Mediterranean Area, Turkey, and Africa
                                (less Djibouti, Egypt, Ethiopia, Kenya,
                                Somalia).
g. DFR Mideast...............  Defense Fuels Region, Middle East, P.O.
                                Box 386, Awali, Bahrain, APO New York
                                09526-2830.
    Area of Responsibility...  Afghanistan, Bahrain, Djibouti, Egypt,
                                Ethiopia, Iran, Iraq, Jordan, Kenya,
                                Kuwait, Oman, Pakistan, Qatar, Saudi
                                Arabia, Somalia, Sudan, United Arab
                                Emirates, and Yemen.
h. DFR Pacific...............  Defense Fuel Region, Pacific, Camp H. M.
                                Smith, Honolulu, HI 96861-5000.
    Area of Responsibility...  Australia, Burma, East Indies, Hawaii,
                                Indian Ocean, Japan, Korea, Malaya,
                                Marianas, New Zealand, Philippines,
                                Ryukyu Islands, South Pacific Islands,
                                Sri Lanka, Taiwan, and Thailand.
 


[56 FR 36610, July 31, 1991, as amended at 57 FR 53602, Nov. 12, 1992; 
58 FR 37868, July 14, 1993; 59 FR 27678, May 27, 1994; 60 FR 61615, Nov. 
30, 1995; 65 FR 14398, Mar. 16, 2000; 65 FR 52953, 52954, Aug. 31, 2000; 
65 FR 63803, 63804, 63805, Oct. 25, 2000; 65 FR 69376, Nov. 16, 2000; 66 
FR 49861, Oct. 1, 2001; 70 FR 35549, June 21, 2005; 70 FR 58983, Oct. 
11, 2005]

                   Appendix G to Chapter 2 [Reserved]

      Appendix H to Chapter 2--Debarment and Suspension Procedures

Sec.
H-100 Scope.
H-101 Notification.
H-102 Nature of proceeding.
H-103 Presentation of matters in opposition.
H-104 Fact-finding.
H-105 Timing requirements.
H-106 Subsequent to fact-finding.

    Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
H-100 Scope.
    This appendix provides uniform debarment and suspension procedures 
to be followed by all debarring and suspending officials.
H-101 Notification.
    Contractors will be notified of the proposed debarment or suspension 
in accordance with FAR 9.406-3 or 9.407-3. A copy of the record which 
formed the basis for the decision by the debarring and suspending 
official will be made available to the contractor. If there is a reason 
to withhold from the contractor any portion of the record, the 
contractor will be informed of what is withheld and the reasons for such 
withholding.
H-102 Nature of proceeding.
    There are two distinct proceedings which may be involved in the 
suspension or debarment process. The first is the presentation of 
matters in opposition to the suspension or proposed debarment by the 
contractor.
    The second is fact-finding which occurs only in cases in which the 
contractor's presentation of matters in opposition raises a genuine 
dispute over one or more material facts. In a suspension action based 
upon an indictment or in a proposed debarment action based upon a 
conviction or civil judgment, there will be no fact-filling proceeding 
concerning the matters alleged in the indictment, or the facts 
underlying the convictions or civil judgment. However, to the extent 
that the proposed action stems from the contractor's affiliation with an 
individual or firm indicted or convicted, or the subject of a civil 
judgment, fact-finding is permitted if a genuine dispute of fact is 
raised as to the question of affiliation as defined in FAR 9.403.
H-103 Presentation of matters in opposition.
    (a) In accordance with FAR 9.406-3(c) and 9.407-3(c), matters in 
opposition may be presented in person, in writing, or through a 
representative. Matters in opposition may be presented through any 
combination of the foregoing methods, but if a contractor desires to 
present matters in person or through a representative, any written 
material should be delivered at least 5 working days in advance of the 
presentation. Usually, all matters in opposition are presented in a 
single proceeding. A contractor who becomes aware of a pending 
indictment or allegations of wrongdoing that the contractor believes may 
lead to suspension or debarment action may contact the debarring and 
suspending official or designee to provide information as to the 
contractor's present responsibility.
    (b) An in-person presentation is an informal meeting, nonadversarial 
in nature. The debarring and suspending official and/or other agency 
representatives may ask questions of the contractor or its 
representative making the presentation. The contractor may select the 
individuals who will attend the meeting on the contractor's behalf; 
individual respondents or principals of a business firm respondent may 
attend and speak for themselves.
    (c) In accordance with FAR 9.406-3(c) and 9.407-3(c), the contractor 
may submit matters in opposition within 30 days from receipt of the 
notice of suspension or proposed debarment.

[[Page 495]]

    (d) The opportunity to present matters in opposition to debarment 
includes the opportunity to present matters concerning the duration of 
the debarment.
H-104 Fact-finding.
    (a) The debarring and suspending official will determine whether the 
contractor's presentation has raised a genuine dispute of material 
fact(s). If the debarring and suspending official has decided against 
debarment or continued suspension, or the provisions of FAR 9.4 preclude 
fact-finding, no fact-finding will be conducted. If the debarring and 
suspending official has determined a genuine dispute of material fact(s) 
exists, a designated fact-finder will conduct the fact-finding 
proceeding. The proceeding before the fact-finder will be limited to a 
finding of the facts in dispute as determined by the debarring and 
suspending official.
    (b) The designated fact-finder will establish the date for a fact-
finding proceeding, normally to be held within 45 working days of the 
contractor's presentation of matters in opposition. An official record 
will be made of the fact-finding proceeding.
    (c) The Government's representative and the contractor will have an 
opportunity to present evidence relevant to the facts at issues. The 
contractor may appear in person or through a representative in the fact-
finding proceeding.
    (d) Neither the Federal Rules of Evidence nor the Federal Rules of 
Civil Procedure govern fact-finding. Hearsay evidence may be presented 
and will be given appropriate weight by the fact-finder.
    (e) Witnesses may testify in person. Witnesses will be reminded of 
the official nature of the proceeding and that any false testimony given 
is subject to criminal prosecution. Witnesses are subject to cross-
examination.
H-105 Timing requirements.
    All timing requirements set forth in these procedures may be 
extended by the debarring and suspending official for good cause.
H-106 Subsequent to fact-finding.
    (a) Written findings of fact will be prepared by the fact-finder as 
mandated by FAR 9.406-3(d)(2)(i) and 9.407-3(d)(2)(i).
    (b) The fact-finder will determine the disputed fact(s) by a 
preponderance of the evidence. A copy of the findings of fact will be 
provided to the debarring and suspending official, the Government's 
representative, and the contractor.
    (c) The debarring and suspending official will determine whether to 
continue the suspension or to debar the contractor based upon the entire 
administrative record, including the findings of fact.
    (d) Prompt written notice of the debarring and suspending official's 
decision will be sent to the contractor and any affiliates involved, in 
compliance with FAR 9.406-3(e) and 9.407-3(d)(4).

[59 FR 27700, May 27, 1994]

Appendix I to Chapter 2--Policy and Procedures for the DOD Pilot Mentor-
                             Protege Program

I-100 Purpose.
    (a) This Appendix I to 48 CFR Chapter 2 implements the Pilot Mentor-
Prot[eacute]g[eacute] Program (hereafter referred to as the ``Program'') 
established under Section 831 of Public Law 101-510, the National 
Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2302 note). 
The purpose of the Program is to--
    (1) Provide incentives to major DoD contractors, performing under at 
least one active approved subcontracting plan negotiated with DoD or 
another Federal agency, to assist prot[eacute]g[eacute] firms in 
enhancing their capabilities to satisfy DoD and other contract and 
subcontract requirements;
    (2) Increase the overall participation of prot[eacute]g[eacute] 
firms as subcontractors and suppliers under DoD contracts, other Federal 
agency contracts, and commercial contracts; and
    (3) Foster the establishment of long-term business relationships 
between prot[eacute]g[eacute] firms and such contractors.
    (b) Under the Program, eligible companies approved as mentor firms 
will enter into mentor-prot[eacute]g[eacute] agreements with eligible 
prot[eacute]g[eacute] firms to provide appropriate developmental 
assistance to enhance the capabilities of the prot[eacute]g[eacute] 
firms to perform as subcontractors and suppliers. DoD may provide the 
mentor firm with either cost reimbursement or credit against applicable 
subcontracting goals established under contracts with DoD or other 
Federal agencies.
    (c) DoD will measure the overall success of the Program by the 
extent to which the Program results in--
    (1) An increase in the dollar value of contract and subcontract 
awards to prot[eacute]g[eacute] firms (under DoD contracts, contracts 
awarded by other Federal agencies, and commercial contracts) from the 
date of their entry into the Program until 2 years after the conclusion 
of the agreement;
    (2) An increase in the number and dollar value of subcontracts 
awarded to a prot[eacute]g[eacute] firm (or former prot[eacute]g[eacute] 
firm) by its mentor firm (or former mentor firm);
    (3) An increase in the employment level of prot[eacute]g[eacute] 
firms from the date of entry into the Program until 2 years after the 
completion of the agreement.
    (d) This policy sets forth the procedures for participation in the 
Program applicable to companies that are interested in receiving--

[[Page 496]]

    (1) Reimbursement through a separate contract line item in a DoD 
contract or a separate contract with DoD; or
    (2) Credit toward applicable subcontracting goals for costs incurred 
under the Program.
I-101 Definitions.
I-101.1 Historically Black college or university.
    An institution determined by the Secretary of Education to meet the 
requirements of 34 CFR 608.2. The term also means any nonprofit research 
institution that was an integral part of such a college or university 
before November 14, 1986.
I-101.2 Minority institution of higher education.
    An institution of higher education with a student body that reflects 
the composition specified in section 312(b)(3), (4), and (5) of the 
Higher Education Act of 1965 (20 U.S.C. 1058(b)(3), (4), and (5)).
I-101.3 Eligible entity employing the severely disabled.
    A business entity operated on a for-profit or nonprofit basis that--
    (a) Uses rehabilitative engineering to provide employment 
opportunities for severely disabled individuals and integrates severely 
disabled individuals into its workforce;
    (b) Employs severely disabled individuals at a rate that averages 
not less than 20 percent of its total workforce;
    (c) Employs each severely disabled individual in its workforce 
generally on the basis of 40 hours per week; and
    (d) Pays not less than the minimum wage prescribed pursuant to 
section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those 
employees who are severely disabled individuals.
I-101.4 Severely disabled individual.
    An individual who has a physical or mental disability which 
constitutes a substantial handicap to employment and which, in 
accordance with criteria prescribed by the Committee for the Purchase 
from the Blind and Other Severely Handicapped established by the first 
section of the Act of June 25, 1938 (41 U.S.C. 46; popularly known as 
the ``Javits-Wagner-O'Day Act'') is of such a nature that the individual 
is otherwise prevented from engaging in normal competitive employment.
I-101.5 Small disadvantaged business (SDB).
    A small business concern that is--
    (a) An SDB concern as defined at 219.001, paragraph (1) of the 
definition of ``small disadvantaged business concern'';
    (b) A business entity owned and controlled by an Indian tribe as 
defined in Section 8(a)(13) of the Small Business Act (15 U.S.C. 
637(a)(13)); or
    (c) A business entity owned and controlled by a Native Hawaiian 
Organization as defined in Section 8(a)(15) of the Small Business Act.
I-101.6 Women-owned small business.
    A small business concern owned and controlled by women as defined in 
Section 8(d)(3)(D) of the Small Business Act (15 U.S.C. 637(d)(3)(D)).
I-101.7 HUBZone small business.
    A qualified HUBZone small business concern as determined by the 
Small Business Administration in accordance with 13 CFR part 126.
I-101.8 Service-disabled veteran-owned small business.
    A small business concern owned and controlled by service-disabled 
veterans as defined in Section 8(d)(3) of the Small Business Act (15 
U.S.C. 637(d)(3)).
I-102 Participant eligibility.
    (a) To be eligible to participate as a mentor, an entity must be--
    (1) An entity other than small business, unless a waiver to the 
small business exception has been obtained from the Director, Small and 
Disadvantaged Business Utilization (SADBU), OUSD (AT&L), that is a prime 
contractor to DoD with an active subcontracting plan; or
    (2) A graduated 8(a) firm that provides documentation of its ability 
to serve as a mentor; and
    (3) Approved to participate as a mentor in accordance with I-105.
    (b) To be eligible to participate as a prote[eacute]g[eacute], an 
entity must be--
    (1) An SDB, a women-owned small business, a HUBZone small business, 
a service-disabled veteran-owned small business, or an eligible entity 
employing the severely disabled;
    (2) Eligible for the award of Federal contracts; and
    (3) A small business according to the Small Business Administration 
(SBA) size standard for the North American Industry Classification 
System (NAICS) code that represents the contemplated supplies or 
services to be provided by the prot[eacute]g[eacute] firm to the mentor 
firm if the firm is representing itself as a qualifying entity under the 
definition at I-101.5(a) or I-101.6.
    (c) Mentor firms may rely in good faith on a written representation 
that the entity meets the requirements of paragraph (a) of this section, 
except for a prot[eacute]g[eacute]'s status as a small disadvantaged 
business concern (see FAR 19.703(b)).

[[Page 497]]

    (d) If at any time the SBA (or DoD in the case of entities employing 
the severely disabled) determines that a prot[eacute]g[eacute] is 
ineligible, assistance that the mentor firm furnishes to the 
prot[eacute]g[eacute] after the date of the determination may not be 
considered assistance furnished under the Program.
    (e) A company may not be approved for participation in the Program 
as a mentor firm if, at the time of requesting participation in the 
Program, it is currently debarred or suspended from contracting with the 
Federal Government pursuant to FAR Subpart 9.4.
    (f) If the mentor firm is suspended or debarred while performing 
under an approved mentor-prot[eacute]g[eacute] agreement, the mentor 
firm--
    (1) May continue to provide assistance to its prot[eacute]g[eacute] 
firms pursuant to approved mentor-prot[eacute]g[eacute] agreements 
entered into prior to the imposition of such suspension or debarment;
    (2) May not be reimbursed or take credit for any costs of providing 
developmental assistance to its prot[eacute]g[eacute] firm, incurred 
more than 30 days after the imposition of such suspension or debarment; 
and
    (3) Must promptly give notice of its suspension or debarment to its 
prot[eacute]g[eacute] firm and the cognizant Component Director, SADBU.
I-103 Program duration.
    (a) New mentor-protege agreements may be submitted and approved 
through September 30, 2010.
    (b) Mentors incurring costs prior to September 30, 2013, pursuant to 
an approved mentor-protege agreement may be eligible for--
    (1) Credit toward the attainment of its applicable subcontracting 
goals for unreimbursed costs incurred in providing developmental 
assistance to its prot[eacute]g[eacute] firm(s);
    (2) Reimbursement pursuant to the execution of a separately priced 
contract line item added to a DoD contract; or
    (3) Reimbursement pursuant to entering into a separate DoD contract 
upon determination by the cognizant Component Director, SADBU, that 
unusual circumstances justify using a separate contract.
I-104 Selection of prot[eacute]g[eacute] firms.
    (a) Mentor firms will be solely responsible for selecting protege 
firms. Mentor firms are encouraged to identify and select concerns that 
are defined as emerging SDB, women-owned small business, HUBZone small 
business, service-disabled veteran-owned small business, or an eligible 
entity employing the severely disabled.
    (b) The selection of prot[eacute]g[eacute] firms by mentor firms may 
not be protested, except as in paragraph (c) of this section.
    (c) In the event of a protest regarding the size or disadvantaged 
status of an entity selected to be a prot[eacute]g[eacute] firm as 
defined in I-101.5, the mentor firm must refer the protest to the SBA to 
resolve in accordance with 13 CFR part 121 (with respect to size) or 13 
CFR part 124 (with respect to disadvantaged status).
    (d) For purposes of the Small Business Act, no determination of 
affiliation or control (either direct or indirect) may be found between 
a prot[eacute]g[eacute] firm and its mentor firm on the basis that the 
mentor firm has agreed to furnish (or has furnished) to its 
prot[eacute]g[eacute] firm, pursuant to a mentor-prot[eacute]g[eacute] 
agreement, any form of developmental assistance described in I-107(f).
    (e) A prot[eacute]g[eacute] firm may have only one active DoD 
mentor-prot[eacute]g[eacute] agreement.
I-105 Mentor approval process.
    (a) An entity seeking to participate as a mentor must apply to the 
cognizant Component Director, SADBU, to establish its initial 
eligibility as a mentor. This application may accompany its initial 
mentor-prot[eacute]g[eacute] agreement.
    (b) The application must provide the following information:
    (1) A statement that the company is currently performing under at 
least one active approved subcontracting plan negotiated with DoD or 
another Federal agency pursuant to FAR 19.702, and that the company is 
currently eligible for the award of Federal contracts or a statement 
that the entity is a graduated 8(a) firm.
    (2) A summary of the company's historical and recent activities and 
accomplishments under its small and disadvantaged business utilization 
program.
    (3) The total dollar amount of DoD contracts and subcontracts that 
the company received during the 2 preceding fiscal years. (Show prime 
contracts and subcontracts separately per year.)
    (4) The total dollar amount of all other Federal agency contracts 
and subcontracts that the company received during the 2 preceding fiscal 
years. (Show prime contracts and subcontracts separately per year.)
    (5) The total dollar amount of subcontracts that the company awarded 
under DoD contracts during the 2 preceding fiscal years.
    (6) The total dollar amount of subcontracts that the company awarded 
under all other Federal agency contracts during the 2 preceding fiscal 
years.
    (7) The total dollar amount and percentage of subcontracts that the 
company awarded to all SDB, women-owned small business, HUBZone small 
business, and service-disabled veteran-owned small business firms under 
DoD contracts and other Federal agency contracts during the 2 preceding 
fiscal years. (Show DoD subcontract awards separately.) If the company 
presently is required to submit a Standard Form (SF) 295, Summary 
Subcontract Report, the request must

[[Page 498]]

include copies of the final reports for the 2 preceding fiscal years.
    (8) Information on the company's ability to provide developmental 
assistance to eligible prot[eacute]g[eacute]s.
    (c) A template of the mentor application is available at: http://
www.acq.osd.mil/sadbu/mentor--protege.
    (d) Companies that apply for participation and are not approved will 
be provided the reasons and an opportunity to submit additional 
information for reconsideration.
I-106 Development of mentor-prot[eacute]g[eacute] agreements.
    (a) Prospective mentors and their prot[eacute]g[eacute]s may choose 
to execute letters of intent prior to negotiation of mentor-
prot[eacute]g[eacute] agreements.
    (b) The agreements should be structured after completion of a 
preliminary assessment of the developmental needs of the 
prot[eacute]g[eacute] firm and mutual agreement regarding the 
developmental assistance to be provided to address those needs and 
enhance the prot[eacute]g[eacute]'s ability to perform successfully 
under contracts or subcontracts.
    (c) A mentor firm may not require a prot[eacute]g[eacute] firm to 
enter into a mentor-prot[eacute]g[eacute] agreement as a condition for 
award of a contract by the mentor firm, including a subcontract under a 
DoD contract awarded to the mentor firm.
    (d) The mentor-prot[eacute]g[eacute] agreement may provide for the 
mentor firm to furnish any or all of the following types of 
developmental assistance:
    (1) Assistance by mentor firm personnel in--
    (i) General business management, including organizational 
management, financial management, and personnel management, marketing, 
business development, and overall business planning;
    (ii) Engineering and technical matters such as production inventory 
control and quality assurance; and
    (iii) Any other assistance designed to develop the capabilities of 
the prot[eacute]g[eacute] firm under the developmental program.
    (2) Award of subcontracts under DoD contracts or other contracts on 
a noncompetitive basis.
    (3) Payment of progress payments for the performance of subcontracts 
by a prot[eacute]g[eacute] firm in amounts as provided for in the 
subcontract; but in no event may any such progress payment exceed 100 
percent of the costs incurred by the prot[eacute]g[eacute] firm for the 
performance of the subcontract. Provision of progress payments by a 
mentor firm to a prot[eacute]g[eacute] firm at a rate other than the 
customary rate for the firm must be implemented in accordance with FAR 
32.504(c).
    (4) Advance payments under such subcontracts. The mentor firm must 
administer advance payments in accordance with FAR Subpart 32.4.
    (5) Loans.
    (6) Investment(s) in the prot[eacute]g[eacute] firm in exchange for 
an ownership interest in the prot[eacute]g[eacute] firm, not to exceed 
10 percent of the total ownership interest. Investments may include, but 
are not limited to, cash, stock, and contributions in kind.
    (7) Assistance that the mentor firm obtains for the 
prot[eacute]g[eacute] firm from one or more of the following:
    (i) Small Business Development Centers established pursuant to 
Section 21 of the Small Business Act (15 U.S.C. 648).
    (ii) Entities providing procurement technical assistance pursuant to 
10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).
    (iii) Historically Black colleges and universities.
    (iv) Minority institutions of higher education.
    (e) Pursuant to FAR 31.109, approved mentor firms seeking either 
reimbursement or credit are strongly encouraged to enter into an advance 
agreement with the contracting officer responsible for determining final 
indirect cost rates under FAR 42.705. The purpose of the advance 
agreement is to establish the accounting treatment of the costs of the 
developmental assistance pursuant to the mentor-prot[eacute]g[eacute] 
agreement prior to the incurring of any costs by the mentor firm. An 
advance agreement is an attempt by both the Government and the mentor 
firm to avoid possible subsequent dispute based on questions related to 
reasonableness, allocability, or allowability of the costs of 
developmental assistance under the Program. Absent an advance agreement, 
mentor firms are advised to establish the accounting treatment of such 
costs and to address the need for any changes to their cost accounting 
practices that may result from the implementation of a mentor-
prot[eacute]g[eacute] agreement, prior to incurring any costs, and 
irrespective of whether costs will be reimbursed or credited.
    (f) Developmental assistance provided under an approved mentor-
prot[eacute]g[eacute] agreement is distinct from, and must not 
duplicate, any effort that is the normal and expected product of the 
award and administration of the mentor firm's subcontracts. Costs 
associated with the latter must be accumulated and charged in accordance 
with the contractor's approved accounting practices; they are not 
considered developmental assistance costs eligible for either credit or 
reimbursement under the Program.
I-107 Elements of a mentor-prot[eacute]g[eacute] agreement.
    Each mentor-prot[eacute]g[eacute] agreement will contain the 
following elements:

[[Page 499]]

    (a) The name, address, e-mail address, and telephone number of the 
mentor and prot[eacute]g[eacute] points of contact;
    (b) The NAICS code(s) that represent the contemplated supplies or 
services to be provided by the protege firm to the mentor firm and a 
statement that, at the time the agreement is submitted for approval, the 
protege firm, if an SDB, a women-owned small business, a HUBZone small 
business, or a service-disabled veteran-owned small business concern, 
does not exceed the size standard for the appropriate NAICS code;
    (c) A statement that the prot[eacute]g[eacute] firm is eligible to 
participate in accordance with I-102(b);
    (d) A statement that the mentor is eligible to participate in 
accordance with I-102;
    (e) A preliminary assessment of the developmental needs of the 
prot[eacute]g[eacute] firm;
    (f) A developmental program for the prot[eacute]g[eacute] firm 
specifying the type of assistance the mentor will provide to the 
prot[eacute]g[eacute] and how that assistance will--
    (1) Increase the prot[eacute]g[eacute]'s ability to participate in 
DoD, Federal, and/or commercial contracts and subcontracts; and
    (2) Increase small business subcontracting opportunities in industry 
categories where eligible prot[eacute]g[eacute]s or other small business 
firms are not dominant in the company's vendor base;
    (g) Factors to assess the prot[eacute]g[eacute] firm's developmental 
progress under the Program, including specific milestones for providing 
each element of the identified assistance;
    (h) An estimate of the dollar value and type of subcontracts that 
the mentor firm will award to the prot[eacute]g[eacute] firm, and the 
period of time over which the subcontracts will be awarded;
    (i) A statement from the prot[eacute]g[eacute] firm indicating its 
commitment to comply with the requirements for reporting and for review 
of the agreement during the duration of the agreement and for 2 years 
thereafter;
    (j) A program participation term for the agreement that does not 
exceed 3 years. Requests for an extension of the agreement for a period 
not to exceed an additional 2 years are subject to the approval of the 
cognizant Component Director, SADBU. The justification must detail the 
unusual circumstances that warrant a term in excess of 3 years;
    (k) Procedures for the mentor firm to notify the 
prot[eacute]g[eacute] firm in writing at least 30 days in advance of the 
mentor firm's intent to voluntarily withdraw its participation in the 
Program. A mentor firm may voluntarily terminate its mentor-
prot[eacute]g[eacute] agreement(s) only if it no longer wants to be a 
participant in the Program as a mentor firm. Otherwise, a mentor firm 
must terminate a mentor-prot[eacute]g[eacute] agreement for cause;
    (l) Procedures for the mentor firm to terminate the mentor-
prot[eacute]g[eacute] agreement for cause which provide that--
    (1) The mentor firm must furnish the prot[eacute]g[eacute] firm a 
written notice of the proposed termination, stating the specific reasons 
for such action, at least 30 days in advance of the effective date of 
such proposed termination;
    (2) The prot[eacute]g[eacute] firm must have 30 days to respond to 
such notice of proposed termination, and may rebut any findings believed 
to be erroneous and offer a remedial program;
    (3) Upon prompt consideration of the prot[eacute]g[eacute] firm's 
response, the mentor firm must either withdraw the notice of proposed 
termination and continue the prot[eacute]g[eacute] firm's participation, 
or issue the notice of termination; and
    (4) The decision of the mentor firm regarding termination for cause, 
conforming with the requirements of this section, will be final and is 
not reviewable by DoD;
    (m) Procedures for a prot[eacute]g[eacute] firm to notify the mentor 
firm in writing at least 30 days in advance of the prot[eacute]g[eacute] 
firm's intent to voluntarily terminate the mentor-prot[eacute]g[eacute] 
agreement;
    (n) Additional terms and conditions as may be agreed upon by both 
parties; and
    (o) Signatures and dates for both parties to the mentor-
prot[eacute]g[eacute] agreement.
I-108 Submission and approval of mentor-prot[eacute]g[eacute] 
agreements.
    (a) Upon solicitation or as determined by the cognizant DoD 
component, mentors will submit--
    (1) A mentor application pursuant to I-105, if the mentor has not 
been previously approved to participate;
    (2) A signed mentor-prot[eacute]g[eacute] agreement pursuant to I-
107;
    (3) A statement as to whether the mentor is seeking credit or 
reimbursement of costs incurred;
    (4) The estimated cost of the technical assistance to be provided, 
broken out per year;
    (5) A justification if program participation term is greater than 3 
years (Term of agreements may not exceed 5 years); and
    (6) For reimbursable agreements, a specific justification for 
developmental costs in excess of $1,000,000 per year.
    (b) When seeking reimbursement of costs, cognizant DoD components 
may require additional information.
    (c) The mentor-prot[eacute]g[eacute] agreement must be approved by 
the cognizant Component Director, SADBU, prior to incurring costs 
eligible for credit.
    (d) The cognizant DoD component will execute a contract modification 
or a separate contract, if justified pursuant to I-103(b)(3), prior to 
the mentor's incurring costs eligible for reimbursement.
    (e) Credit agreements that are not associated with an existing DoD 
program and/or component will be submitted for approval to

[[Page 500]]

Director, SADBU, Defense Contract Management Agency (DCMA), via the 
mentor's cognizant administrative contracting officer.
    (f) A prospective mentor that has identified Program funds to be 
made available from a DoD program manager must provide the information 
in paragraph (a) of this section through the program manager to the 
cognizant Component Director, SADBU, with a letter signed by the program 
manager indicating the amount of funding that has been identified for 
the developmental assistance program.
I-109 Reimbursable agreements.
    The following program provisions apply to all reimbursable mentor-
prot[eacute]g[eacute] agreements:
    (a) Assistance provided in the form of progress payments to a 
prot[eacute]g[eacute] firm in excess of the customary progress payment 
rate for the firm will be reimbursed only if implemented in accordance 
with FAR 32.504(c).
    (b) Assistance provided in the form of advance payments will be 
reimbursed only if the payments have been provided to a 
prot[eacute]g[eacute] firm under subcontract terms and conditions 
similar to those in the clause at FAR 52.232-12, Advance Payments. 
Reimbursement of any advance payments will be made pursuant to the 
inclusion of the clause at DFARS 252.232-7005, Reimbursement of 
Subcontractor Advance Payments--DoD Pilot Mentor-Prot[eacute]g[eacute] 
Program, in appropriate contracts. In requesting reimbursement, the 
mentor firm agrees that the risk of any financial loss due to the 
failure or inability of a prot[eacute]g[eacute] firm to repay any 
unliquidated advance payments will be the sole responsibility of the 
mentor firm.
    (c) The primary forms of developmental assistance authorized for 
reimbursement under the Program are identified in I-106(d). On a case-
by-case basis, Component Directors, SADBU, at their discretion, may 
approve additional incidental expenses for reimbursement, provided these 
expenses do not exceed 10 percent of the total estimated cost of the 
agreement.
    (d) The total amount reimbursed to a mentor firm for costs of 
assistance furnished to a prot[eacute]g[eacute] firm in a fiscal year 
may not exceed $1,000,000 unless the cognizant Component Director, 
SADBU, determines in writing that unusual circumstances justify 
reimbursement at a higher amount. Request for authority to reimburse in 
excess of $1,000,000 must detail the unusual circumstances and must be 
endorsed and submitted by the program manager to the cognizant Component 
Director, SADBU.
    (e) Developmental assistance costs that are incurred pursuant to an 
approved reimbursable mentor-prot[eacute]g[eacute] agreement, and have 
been charged to, but not reimbursed through, a separate contract, or 
through a separately priced contract line item added to a DoD contract, 
will not be otherwise reimbursed, as either a direct or indirect cost, 
under any other DoD contract, irrespective of whether the costs have 
been recognized for credit against applicable subcontracting goals.
I-110 Credit agreements.
I-110.1 Program provisions applicable to credit agreements.
    (a) Developmental assistance costs incurred by a mentor firm for 
providing assistance to a prot[eacute]g[eacute] firm pursuant to an 
approved credit mentor-prot[eacute]g[eacute] agreement may be credited 
as if the costs were incurred under a subcontract award to that 
prot[eacute]g[eacute], for the purpose of determining the performance of 
the mentor firm in attaining an applicable subcontracting goal 
established under any contract containing a subcontracting plan pursuant 
to the clause at FAR 52.219-9, Small Business Subcontracting Plan, or 
the provisions of the DoD Comprehensive Subcontracting Plan Test 
Program. Unreimbursed developmental assistance costs incurred for a 
prot[eacute]g[eacute] firm that is an eligible entity employing the 
severely disabled may be credited toward the mentor firm's small 
disadvantaged business subcontracting goal, even if the 
prot[eacute]g[eacute] firm is not a small disadvantaged business 
concern.
    (b) Costs that have been reimbursed through inclusion in indirect 
expense pools may also be credited as subcontract awards for determining 
the performance of the mentor firm in attaining an applicable 
subcontracting goal established under any contract containing a 
subcontracting plan. However, costs that have not been reimbursed 
because they are not reasonable, allocable, or allowable will not be 
recognized for crediting purposes.
    (c) Other costs that are not eligible for reimbursement pursuant to 
I-106(d) may be recognized for credit only if requested, identified, and 
incorporated in an approved mentor-prot[eacute]g[eacute] agreement.
    (d) The amount of credit a mentor firm may receive for any such 
unreimbursed developmental assistance costs must be equal to--
    (1) Four times the total amount of such costs attributable to 
assistance provided by small business development centers, historically 
Black colleges and universities, minority institutions, and procurement 
technical assistance centers.
    (2) Three times the total amount of such costs attributable to 
assistance furnished by the mentor's employees.
    (3) Two times the total amount of other such costs incurred by the 
mentor in carrying out the developmental assistance program.

[[Page 501]]

I-110.2 Credit adjustments.
    (a) Adjustments may be made to the amount of credit claimed if the 
Director, SADBU, OUSD(AT&L), determines that--
    (1) A mentor firm's performance in the attainment of its 
subcontracting goals through actual subcontract awards declined from the 
prior fiscal year without justifiable cause; and
    (2) Imposition of such a limitation on credit appears to be 
warranted to prevent abuse of this incentive for the mentor firm's 
participation in the Program.
    (b) The mentor firm must be afforded the opportunity to explain the 
decline in small business subcontract awards before imposition of any 
such limitation on credit. In making the final decision to impose a 
limitation on credit, the Director, SADBU, OUSD(AT&L), must consider--
    (1) The mentor firm's overall small business participation rates (in 
terms of percentages of subcontract awards and dollars awarded) as 
compared to the participation rates existing during the 2 fiscal years 
prior to the firm's admission to the Program;
    (2) The mentor firm's aggregate prime contract awards during the 
prior 2 fiscal years and the total amount of subcontract awards under 
such contracts; and
    (3) Such other information the mentor firm may wish to submit.
    (c) The decision of the Director, SADBU, OUSD(AT&L), regarding the 
imposition of a limitation on credit will be final.
I-111 Agreement terminations.
    (a) Mentors and/or prot[eacute]g[eacute]s must send a copy of any 
termination notices to the cognizant Component Director, SADBU, that 
approved the agreement, and the DCMA administrative contracting officer 
responsible for conducting the annual review pursuant to I-113.
    (b) For reimbursable agreements, mentors must also send copies of 
any termination to the program manager and to the contracting officer.
    (c) Termination of a mentor-prot[eacute]g[eacute] agreement will not 
impair the obligations of the mentor firm to perform pursuant to its 
contractual obligations under Government contracts and subcontracts.
    (d) Termination of all or part of the mentor-prot[eacute]g[eacute] 
agreement will not impair the obligations of the prot[eacute]g[eacute] 
firm to perform pursuant to its contractual obligations under any 
contract awarded to the prot[eacute]g[eacute] firm by the mentor firm.
    (e) Mentors and prot[eacute]g[eacute]s will follow provisions of the 
mentor-prot[eacute]g[eacute] agreement developed in compliance with I-
107(k) through (m).
I-112 Reporting requirements.
I-112.1 Reporting requirements applicable to SF294/SF295 reports.
    (a) Amounts credited toward applicable subcontracting goal(s) for 
unreimbursed costs under the Program must be separately identified on 
the appropriate SF294/SF295 reports from the amounts credited toward the 
goal(s) resulting from the award of actual subcontracts to 
prot[eacute]g[eacute] firms. The combination of the two must equal the 
mentor firm's overall accomplishment toward the applicable goal(s).
    (b) A mentor firm may receive credit toward the attainment of an SDB 
subcontracting goal for each subcontract awarded by the mentor firm to 
an entity that qualifies as a prot[eacute]g[eacute] firm pursuant to I-
101.3 or I-101.5.
    (c) For purposes of calculating any incentives to be paid to a 
mentor firm for exceeding an SDB subcontracting goal pursuant to the 
clause at FAR 52.219-26, Small Disadvantaged Business Participation 
Program--Incentive Subcontracting, incentives will be paid only if an 
SDB subcontracting goal has been exceeded as a result of actual 
subcontract awards to SDBs (i.e., excluding credit).
I-112.2 Program specific reporting requirements.
    (a) Mentors must report on the progress made under active mentor-
prot[eacute]g[eacute] agreements semiannually for the periods ending 
March 31st and September 30th throughout the Program participation term 
of the agreement. The September 30th report must address the entire 
fiscal year.
    (b) Reports are due 30 days after the close of each reporting 
period.
    (c) Each report must include the following data on performance under 
the mentor-prot[eacute]g[eacute] agreement:
    (1) Dollars obligated (for reimbursable agreements).
    (2) Expenditures.
    (3) Dollars credited, if any, toward applicable subcontracting goals 
as a result of developmental assistance provided to the 
prot[eacute]g[eacute] and a copy of the SF294 and/or SF295 for each 
contract where developmental assistance was credited.
    (4) The number and dollar value of subcontracts awarded to the 
prot[eacute]g[eacute] firm.
    (5) Description of developmental assistance provided, including 
milestones achieved.
    (6) Impact of the agreement in terms of capabilities enhanced, 
certifications received, and/or technology transferred.
    (d) A recommended reporting format and guidance for its submission 
are available at: http://www.acq.osd.mil/sadbu/mentor--protege.
    (e) The prot[eacute]g[eacute] must provide data, annually by October 
31st, on the progress made during the prior fiscal year by the 
prot[eacute]g[eacute] in

[[Page 502]]

employment, revenues, and participation in DoD contracts during--
    (1) Each fiscal year of the Program participation term; and
    (2) Each of the 2 fiscal years following the expiration of the 
Program participation term.
    (f) The prot[eacute]g[eacute] report required by paragraph (e) of 
this section may be provided as part of the mentor report for the period 
ending September 30th required by paragraph (a) of this section.
    (g) Progress reports must be submitted--
    (1) For credit agreements, to the cognizant Component Director, 
SADBU, that approved the agreement, and the mentor's cognizant DCMA 
administrative contracting officer; and
    (2) For reimbursable agreements, to the cognizant Component 
Director, SADBU, the contracting officer, the DCMA administrative 
contracting officer, and the program manager.
I-113 Performance reviews.
    (a) DCMA will conduct annual performance reviews of the progress and 
accomplishments realized under approved mentor-prot[eacute]g[eacute] 
agreements. These reviews must verify data provided on the semiannual 
reports and must provide information as to--
    (1) Whether all costs reimbursed to the mentor firm under the 
agreement were reasonably incurred to furnish assistance to the 
prot[eacute]g[eacute] in accordance with the mentor-
prot[eacute]g[eacute] agreement and applicable regulations and 
procedures; and
    (2) Whether the mentor and prot[eacute]g[eacute] accurately reported 
progress made by the prot[eacute]g[eacute] in employment, revenues, and 
participation in DoD contracts during the Program participation term and 
for 2 fiscal years following the expiration of the Program participation 
term.
    (b) A checklist for annual performance reviews is available at 
http://www.acq.osd.mil/sadbu/mentor--protege.

[69 FR 74996, Dec. 15, 2004, as amended at 70 FR 29645, May 24, 2005]


[[Page 503]]



                              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 505]]



                    Table of CFR Titles and Chapters




                     (Revised as of October 1, 2006)

                      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  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100-199)
        II  Office of Management and Budget Circulars and Guidance 
                (200-299)
            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  Government Accountability 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 506]]

        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)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)

[[Page 507]]

    LXXVII  Office of Management and Budget (Part 8701)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Part 
                9701)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Part 9901)

                      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)

[[Page 508]]

     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)
      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 Policy and New Uses, 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)

[[Page 509]]

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      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)

[[Page 510]]

                    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)
       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)

[[Page 511]]

             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)

          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)

[[Page 512]]

                      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)
        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)

[[Page 513]]

        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       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)

[[Page 514]]

        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   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)

[[Page 515]]

                      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)
        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)

[[Page 516]]

    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)
        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 [Reserved]

             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)

[[Page 517]]

       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             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)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        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)

[[Page 518]]

       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)
       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 303-1--303-99)
       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)

[[Page 519]]

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        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)

[[Page 520]]

        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       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  Defense Acquisition Regulations System, 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  [Reserved]
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)

[[Page 521]]

        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        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  Pipeline and Hazardous Materials Safety 
                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  Research and Innovative Technology Administration, 
                Department of Transportation - [Reserved]
       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)

[[Page 522]]

        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)
         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 523]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of October 1, 2006)

                                                  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 524]]

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
Copyright Royalty Board                           37, III
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 525]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, II
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  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 526]]

  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 Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102

[[Page 527]]

  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 Accountability Office                  4, I
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
  Defense Acquisition Regulations System          48, 2
  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
[[Page 528]]

Inspector General
  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

[[Page 529]]

  Secretary of Labor, Office of                   29, Subtitle A
  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
  Copyright Royalty Board                         37, III
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

[[Page 530]]

Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
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
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
Pipeline and Hazardous Materials Safety           49, I
     Administration
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 Innovative Technology                49, XI
     Administration
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

[[Page 531]]

Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
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
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  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 533]]



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 8 separate volumes.

                                  2001

48 CFR
                                                                   66 FR
                                                                    Page
Chapter 2
202.101 Amended.............................................49860, 63335
204.603 Revised....................................................47096
204.670-1 (b) introductory text and (c)(3) amended.................47096
204.670-2 (a)(1), (b)(1), (c)(3) and (7)(i) revised; (a)(3), (4) 
        and (b)(3) added...........................................47096
204.670-3 (a)(2) amended...........................................47097
204.670-5 (a) amended..............................................47097
204.670-6 (a), (b) introductory text, (1)(i), (c)(1), (2) and (3) 
        amended....................................................47097
204.7205 (a) and (b) amended.......................................49861
204.7207 Added.....................................................47097
204.7303 (a)(2) amended............................................55121
207.103 (c), (d), (f) and (h) redesignated as (d), (e), (g) and 
        (i); new (d)(i) introductory text revised; new (d)(ii) and 
        (e) amended; new (h) added.................................47107
207.471 (b) amended................................................55121
211.503 Redesignated from 211.504..................................49861
211.504 Redesignated as 211.503....................................49861
212.1 Added; interim...............................................63336
212.301 (f)(iii) amended...........................................49861
    (f)(iii) amended; (f)(v) and (vi) redesignated as (f)(vi) and 
(vii); new (f)(v) added............................................55122
212.503 Regulation at 65 FR 77828 confirmed........................49862
212.504 Regulation at 65 FR 77828 confirmed........................49862
213.301 (3) added..................................................55123
    Heading and (3) corrected......................................56902
215.404-4 (c)(2)(C)(1)(i)..........................................49863
215.404-71-3 (e)(3) amended........................................63335
215.404-76 (a) and (c) revised.....................................49863
    (b) table revised..............................................63335
217.170 Revised....................................................63337
217.171 Revised....................................................63337
217.172 Revised....................................................63337
217.174 Revised....................................................63338
219.800 Amended....................................................49863
219.1005 (a)(3)(A), (a)(3)(A)(1) through (4), and (a)(3)(b) 
        redesignated as (a)(i), (a)(i)(A) through (D), and 
        (a)(ii); new (a)(ii) amended...............................49861
219.7100 Revised; interim..........................................47108
219.7102 (b) revised; (d)(2) amended...............................47108
219.7103-2 (c) amended.............................................47109
223.404 Removed....................................................49864
223.405 Added......................................................49864
225.212-7001 Regulation at 65 FR 77828 confirmed...................49862
225.225-7016 Regulation at 65 FR 77828 confirmed...................49862
225.225-7023 Regulation at 65 FR 77828 confirmed...................49862
225.7019-1 Regulation at 65 FR 77828 confirmed.....................49862
225.7019-2 Regulation at 65 FR 77828 confirmed.....................49862
225.7019-4 Regulation at 65 FR 77828 confirmed.....................49862
225.7020--225.7020-4 Regulation at 65 FR 77828 confirmed...........49862
226.104 Introductory text revised; interim.........................47111
    Technical correction...........................................50504
232.501-1 Revised..................................................49865
232.504-4-70 (b) revised...........................................49865

[[Page 534]]

236.201 (c)(1)(A)(1) and (c)(1)(B) revised.........................49861
236.206 Amended....................................................49861
236.274 (a) amended................................................49861
237.6 Added; interim...............................................63336
237.210 Section heading, introductory text revised.................49861
242.202 (e)(1)(A) amended...................................49861, 63335
242.302 (a)(13)(B)(1) amended...............................49861, 63335
243.204-71 Added...................................................49865
243.205-70 Removed.................................................49865
    Redesignated from 243.205-71...................................49865
243.205-71 Redesignated as 243.205-70; redesignated from 243.205-
        72.........................................................49865
243.205-72 Redesignated as 243.205-71..............................49865
245.302-1 (a)(4)(C)(2) amended.....................................49861
248 Removed........................................................49865
252.204-7001 Introductory text amended.............................47097
252.204-7004 Clause amended........................................55121
252.204-7005 Clause amended........................................55121
252.211-7005 Introductory text, (b) amended........................49861
252.212-7001 Regulation at 65 FR 77828 confirmed...................49862
    Revised........................................................55122
252.225-7007 (a)(4) amended........................................47112
    Amended; interim...............................................47113
    Clause corrected...............................................50504
252.225-7021 (a)(4) amended........................................47112
    Amended; authority citation revised; interim...................47113
    Clause corrected...............................................50504
252.226-7001 Added; interim........................................47111
    Clause corrected...............................................50504
252.227-7005 Amended...............................................49861
252.232-7004 Revised...............................................49865
252.232-7005 Amended...............................................47109
252.237-7000 Introductory text amended.............................49861
252.239-7000 Introductory text amended.............................49861
252.243-7000 Removed...............................................49865
252.243-7001 Amended...............................................49865
252.243-7002 Amended...............................................49865
252.247-7011 Introductory text, (a) amended........................49861
    Technical correction...........................................51515
253 Technical correction...........................................51515
253.204-70 Revised.................................................47097
    (b)(12)(vii) introductory text correctly revised...............48622
    Corrected......................................................50504
    (e)(4) amended.................................................55121
253.204-71 (a)(3) introductory text and (e)(2)(i)(A)(4) amended; 
        (c)(1) and (3) revised; (g)(1)(iii)(C) added...............47107
253.215-70 (b)(7) revised..........................................49863
Chapter 2 Appendix F amended.......................................49861
Chapter 2 Appendix G amended................................49861, 55121
Chapter 2 Appendix I amended; interim.......................47109, 47110

                                  2002

48 CFR
                                                                   67 FR
                                                                    Page
Chapter 2
201.603-2 Revised..................................................65509
202.101 Amended.....................................................4207
204.670-1 (b) introductory text amended; (c)(5) redesignated as 
        (c)(6); new (c)(5) added...................................46113
204.670-2 (a)(2)(ii) amended; (a)(2)(iii) redesignated as 
        (a)(2)(iv); new (a)(2)(iii) added..........................46113
204.670-3 (a)(2) amended...........................................46113
204.670-6 (b)(1)(iii), (iv) and (c)(3) amended; (c)(1) revised.....46113
204.7202-1 (a) amended.............................................49252
206.302-2 (b)(iv) amended..........................................61516
207.103 (h) introductory text, (i)(A), (B), (C), (ii) introductory 
        text and (B) amended.......................................61516
207.105 Introductory text and (b)(19)(C) amended...................61516
208 Meetings.......................................................65721
208.001 (a)(1)(v) revised..........................................65511
    Redesignated as 208.002........................................77936
208.002 Redesignated as 208.003; new 208.002 redesignated from 
        208.001....................................................77936
208.003 Redesignated from 208.002; new (f) and (g) redesignated as 
        (d) and (e)................................................77936
208.404--208.405-2 (Subpart 208.4) Heading revised.................65508
208.404 (b) added..................................................65508
208.404-70 Added...................................................65508
208.602 Added; interim.............................................20688
208.606 Revised; interim...........................................20688
208.7000 (b) amended...............................................77936
208.7400--208.7403 (Subpart 208.74) Added..........................65511
209.104-1 (g)(iii) removed..........................................4208
209.104-70 (c) removed..............................................4208

[[Page 535]]

209.470-3 (b)(1), (2) and (3) amended..............................49254
210 Added; interim.................................................20688
212.102 Revised....................................................65514
212.503 (a)(xii) removed............................................4208
213.005 Removed.....................................................4208
213.301 (2)(i)(E) amended; (2)(i)(G) added.........................38021
215.404-71-1 Revised...............................................20689
215.404-71-2 Revised...............................................20689
    (b) introductory text table amended............................49254
215.404-71-3 (b) table amended (b)(2) and (e)(2) introductory text 
        revised....................................................20691
    (b) introductory text table, (c)(2) and (5) amended............49255
215.404-71-4 (a) and (b)(2)(ii) amended; (c) and (d) revised.......20691
    (b) introductory text table revised............................49255
215.404-71-5 Added.................................................20692
    (a) amended....................................................49255
215.404-72 (b)(1)(i) amended; (b)(1)(ii) removed; (b)(1)(iii) 
        redesignated as (b)(1)(ii).................................20692
    (b)(1) and (2) headings amended................................49255
215.404-73 (b)(2)(i) amended.......................................20692
215.404-74 (c) revised.............................................20692
215.404-76 (b) table amended........................................4208
215.407-4 (b)(2) and (c)(2)(A) introductory text amended...........49252
    (c)(1) amended.................................................49255
215.407-5-70 (a)(2) amended........................................49252
216 Meetings.......................................................65721
216.501-1 Added....................................................65508
216.505-70 Added...................................................65508
217.207 Removed.....................................................4208
217.7600 Amended...................................................61516
219.708 (b)(1)(A) and (B) amended..................................49252
219.800 (a) amended.................................................4208
    Revised; interim...............................................11436
219.804-2 Revised; interim.........................................11436
    (1) introductory text, (ii)(A), (2) introductory text, (ii) 
and (3) amended....................................................49256
219.804-3 Amended; interim.........................................11436
219.805-2 Amended; interim.........................................11436
219.806 Introductory text, (1) and (2) amended; interim............11437
    (1) and (2) amended............................................49256
219.808-1 Introductory text, (1) and (2) amended...................11437
219.811-1 Introductory text, (a) and (b) introductory text 
        amended; interim...........................................11437
    (a) amended....................................................49256
219.811-2 Amended; interim.........................................11437
    Amended........................................................49256
219.811-3 (1) and (2) amended; interim.............................11437
219.812 (d) amended; interim.......................................11437
219.7100 Regulation at 66 FR 47108 confirmed.......................11435
219.7102 Regulation at 66 FR 47108 confirmed.......................11435
219.7103-2 Regulation at 66 FR 47109 confirmed.....................11435
219.7104 (b) and (d) amended.......................................77937
222.1304 Removed....................................................4208
223.7100 Amended...................................................61516
223.7102 (b) amended...............................................61516
225.001 (3)(ii) removed; (3)(iii) redesignated as (3)(ii); new 
        (3)(ii) amended............................................77938
225.003 (3) revised................................................20694
    (4) and (12) amended...........................................77938
225.103 (b)(iii)(C) amended........................................49252
    (a)(1) redesignated as (a)(i); new (a)(i)(B) revised...........77938
225.302--225.304 (Subpart 225.3) Removed...........................20694
225.402 Revised....................................................77938
225.502 Revised....................................................77938
225.504 (4) removed................................................77938
225.872-1 Amended...................................................4209
225.1101 (13)(i)(A) and (B) amended................................20693
    (1), (2) introductory text, (12) introductory text and (13) 
introductory text amended..........................................20694
    (3)(ii), (5) and (6) removed; (3)(iii), (iv) and (7) through 
(14) redesignated as (3)(ii), (iii) and (5) through (12); (2)(i), 
new (9) and new (12) amended.......................................77938
225.1103 (1) revised...............................................20694
225.7001 (c) removed; (b) redesignated as (c); new (b) added.......20697
225.7002-1 Revised; interim........................................20697
225.7002-2 Revised; interim........................................20697
225.7002-3 Introductory text, (a) and (b) revised; interim.........20698
225.7020-4 Introductory text revised...............................11437
225.7304 Revised...................................................70325
225.7500--225.7503 (Subpart 225.75) Added..........................20694
225.7501 (b)(1)(iii) revised.......................................77939

[[Page 536]]

225.7503 (a) and (b) amended.......................................49256
226.104 Regulation at 66 FR 47111 confirmed........................38022
    Revised........................................................65514
226.7103 (c) revised...............................................11438
235.7003-2 Revised.................................................20699
237.102-70 (c) added; interim......................................11439
    Regulation at 67 FR 11438 confirmed............................55730
237.104 (c)(2)(C)(1) amended.......................................61516
239.1 (Subpart 239.1) Added........................................65512
242.1105 (1)(i) amended............................................61516
242.1203 (b)(2)(A) amended..........................................4208
244.303 Added......................................................38023
244.402 Added......................................................38023
245.403 (1) amended................................................61517
245.609 Amended....................................................61517
246.407 (1) and (2) removed.........................................4208
247.305-10 (b)(1)(A)(3) amended....................................61517
247.371 Amended....................................................61517
247.572-1 (c) removed; (d) redesignated as new (c).................38021
247.573 (b)(1) revised; (b)(4) added...............................38021
251.102 (f) revised; Table 51-1 amended............................65512
    (e) introductory text amended..................................70325
252 Technical correction...........................................46123
252.209-7003 Removed................................................4209
252.212-7001 Clause amended; interim...............................20698
    Clause amended............................38021, 49252, 70325, 77939
252.219-7009 Clause amended; interim...............................11437
252.225-7005 Revised...............................................20695
252.225-7006 Removed...............................................77939
252.225-7007 Regulation at 66 FR 47113 confirmed....................4210
    Clause amended.................................................65514
    Removed........................................................77939
252.225-7008 Introductory text amended.............................77939
252.225-7009 Introductory text amended.............................77939
252.225-7010 Introductory text amended.............................77939
252.225-7012 Revised; interim......................................20698
252.225-7020 Introductory text amended.............................77939
252.225-7021 Regulation at 66 FR 47113 confirmed....................4210
    Clause amended.................................................65514
    Introductory text amended......................................77939
252.225-7035 Introductory text amended.............................77939
252.225-7036 Introductory text amended.............................77939
252.225-7037 Introductory text amended.............................77939
252.225-7044 Added.................................................20695
252.225-7045 Added.................................................20695
252.226-7001 Regulation at 66 FR 47111 confirmed...................38022
252.229-7003 Revised................................................4210
252.232-7005 Regulation at 66 FR 47109 confirmed...................11435
252.247-7023 Clause amended........................................38022
252.251-7000 Clause amended........................................65512
253.204-70 Revised.................................................46113
    (a)(3)(i) corrected............................................49256
253.215-70 (c)(12) and (15) revised................................49255
Chapter 2 Appendix G amended....4208, 49252, 49253, 61517, 70325, 70329, 
                                                                   77936
    Appendix I amended.............................................77937
    Regulation at 66 FR 47109 confirmed............................11435

                                  2003

48 CFR
                                                                   68 FR
                                                                    Page
Chapter 2
201.201-1 (d)(i)V amended...........................................7439
201.304 (1)(ii), (4) and (5) amended................................7439
201.402 (1) introductory text and (2) introductory text amended.....7439
201.404 (b)(i) amended..............................................7439
202 Meetings.......................................................60861
202.101 Amended................................7439, 15380, 23088, 56561
    Amended; interim........................................58632, 75200
204 Meetings.......................................................60861
204.203 Revised; interim...........................................64558
204.603 Removed; interim...........................................64558
204.904 (2) introductory text and (ii) revised; interim............64558
204.905 Removed; interim...........................................64558
204.1103--204.1104 (Subpart 204.11) Added; interim.................64558
204.7000 Revised...................................................64556
204.7002 (c) amended...............................................64556
204.7003 (a)(1)(i)(j) amended.......................................7439
    (a)(1) revised.................................................64557
204.7004 (d)(2)(i) amended.........................................64557
204.7005 Added.....................................................64557
204.7104-1 (a)(3) revised; interim..........................58632, 75200

[[Page 537]]

204.7104-2 (e)(10) and (11) added; interim.........................58632
    (e)(10) and (11) removed; interim..............................75200
204.7202-1 (b)(2)(i)(D) revised....................................15380
    (b)(1) revised; interim........................................64558
204.7207 (a) revised; interim......................................64558
204.7300--204.7304 (Subpart 204.73) Removed; interim...............64558
206.302-5 (c)(i)(B) amended.........................................7439
206.303-1 (d) added................................................15618
207.103 (h)(i)(A) revised..........................................15380
207.7001--207.7003 (Subpart 207.70) Added; interim.................43331
208.601-70 Added...................................................64560
208.602 Regulation at 67 FR 20688 confirmed........................64560
    Revised........................................................64561
208.606 Revised....................................................36944
    Regulation at 67 FR 20688 confirmed............................64560
    Revised........................................................64561
208.670 Added......................................................64561
208.671 Added......................................................64561
208.7203 (c) revised...............................................15618
209.104-1 (g)(ii)(C) amended........................................7439
209.104-70 (a) amended..............................................7439
209.403 Amended.....................................................7439
209.406-2 (a)(ii) amended...........................................7439
210 Regulation at 67 FR 20688 confirmed............................64560
211 Meetings.......................................................60861
211.274 Added; interim.............................................58633
    Revised; interim...............................................75200
211.274-1 Added; interim...........................................58633
    Revised; interim...............................................75200
211.274-2 Added; interim...........................................58633
    Revised; interim...............................................75200
211.274-3 Added; interim...........................................58633
    Revised; interim...............................................75200
212 Meetings.......................................................60861
212.301 (f)(i)(B) removed; (f)(i)(C) and (D) redesignated as 
        (f)(i)(B) and (C)...........................................7439
    (f)(vi) removed; (f)(vii) redesignated as (f)(vi)..............15618
    (f)(vii) added; interim........................................58633
    (b)(2) and (f)(iv) removed; (f)(v) and (vi) redesignated as 
(f)(iv) and (v); interim...........................................64558
    (f)(vii) redesignated as (f)(vi); interim......................75200
213.106-3 Removed; interim.........................................64558
213.301 (2)(ii)(B) amended.........................................56561
213.302-5 (d) introductory text and (ii) amended...................56561
214.407-3 (e)(vii) revised..........................................7439
    (e)(vii) correctly designated as (e)(viii)......................9580
216.405-2 (b)(3) added.............................................64568
217.103 Revised; interim...........................................43332
217.170 (d)(4) amended..............................................7439
217.171 (a)(1)(v) added; interim...................................43333
217.172 (a) revised; (b) and (d)(1) amended........................50475
217.173 (b)(5)(iv) amended..........................................7439
    Heading and (b) introductory text revised; (b)(5) redesignated 
as new (b)(7); new (b)(5) and (6) added............................50475
217.174 (a)(1) and (2) revised; (c) added..........................50475
219.000 Introductory text amended..................................15381
219.502-70 Added...................................................64561
219.508 Added......................................................64561
219.1005 (b) table amended.........................................50476
219.1007 (b)(1) amended.............................................7439
225.000 Revised....................................................15618
225.001 Revised....................................................15618
225.003 Revised....................................................15618
225.101--225.171 (Subpart 225.1) Revised...........................15619
225.202 (a)(2) amended.............................................15619
225.401 Revised....................................................15619
225.401-70 Introductory text amended...............................15619
225.403 Revised....................................................15619
225.502--225.504 (Subpart 225.5) Revised...........................15620
225.670--225.670-4 (Subpart 225.6) Added...........................15620
225.701 Amended....................................................15621
225.701-70 Added....................................................7441
225.770 Removed....................................................15621
225.770-1 Removed..................................................15621
225.770-2 Removed..................................................15621
225.770-3 Removed..................................................15621
225.770-4 Removed..................................................15621
225.770-5 Removed..................................................15621
225.771 Removed....................................................15621
225.771-1 Removed..................................................15621
225.771-2 Removed..................................................15621
225.771-3 Removed..................................................15621
225.771-4 Removed..................................................15621
225.771-5 Removed..................................................15621
225.802--225.873-2 (Subpart 225.8) Revised.........................15621
225.901--225.903 (Subpart 225.9) Revised...........................15626
225.1100--225.1103 (Subpart 225.11) Revised........................15626

[[Page 538]]

225.1101 Corrected.................................................25088
225.7000 (a) and (b) amended.......................................15627
225.7002-2 (j) revised; interim.....................................7442
225.7002-3 (c) revised.............................................15627
225.7003 Removed; new 225.7003 added...............................15627
225.7004 Removed; new 225.7004 added...............................15627
225.7004-1 Added...................................................15627
225.7004-2 Added...................................................15627
225.7004-3 Added...................................................15627
225.7004-4 Added...................................................15627
225.7005 Removed; new 225.7005 added...............................15627
225.7005-1 Added...................................................15627
225.7005-2 Added...................................................15627
225.7005-3 Added...................................................15627
225.7006 Removed; new 225.7006 added...............................15627
225.7006-1 Added...................................................15627
225.7006-2 Added...................................................15627
225.7006-3 Added...................................................15627
225.7006-4 Added...................................................15627
225.7007 Removed; new 225.7003 added...............................15627
225.7007-1 Removed; new 225.7007-1 added...........................15627
225.7007-2 Removed; new 225.7007-2 added...........................15627
225.7007-3 Removed; new 225.7007-3 added...........................15627
225.7007-4 Removed.................................................15627
225.7008 Removed; new 225.7008 added...............................15627
225.7008-1 Added...................................................15627
225.7008-2 Added...................................................15627
225.7008-3 Added...................................................15627
225.7008-4 Added...................................................15627
225.7009 Removed; new 225.7009 added...............................15627
225.7009-1 Added...................................................15627
225.7009-2 Added...................................................15627
225.7009-3 Added...................................................15627
225.7009-4 Added...................................................15627
225.7010 Removed; new 225.7010 added...............................15627
225.7010-1 Removed; new 225.7010-1 added...........................15627
225.7010-2 Removed; new 225.7010-2 added...........................15627
225.7010-3 Removed; new 225.7010-3 added...........................15627
225.7010-4 Added...................................................15627
225.7011 Removed; new 225.7011 added...............................15627
225.7011-1 Removed; new 225.7011-1 added...........................15627
225.7011-2 Removed; new 225.7011-2 added...........................15627
225.7011-3 Removed; new 225.7011-3 added...........................15627
225.7011-4 Removed.................................................15627
225.7011-5 Removed.................................................15627
225.7012 Removed; new 225.7012 added...............................15627
225.7012-1 Removed; new 225.7012-1 added...........................15627
225.7012-2 Removed; new 225.7012-2 added...........................15627
225.7012-3 Removed; new 225.7012-3 added...........................15627
225.7013 Removed; new 225.7013 added...............................15627
225.7014 Removed; new 225.7014 added...............................15627
225.7015 Removed; new 225.7015 added...............................15627
225.7015-1 Removed.................................................15627
225.7015-2 Removed.................................................15627
225.7015-3 Removed.................................................15627
225.7016 Removed; new 225.7016 added...............................15627
225.7016-1 Removed.................................................15627
225.7016-2 Removed.................................................15627
225.7016-3 Removed.................................................15627
225.7016-4 Removed.................................................15627
225.7017 Removed; new 225.7017 added...............................15627
225.7017-1 Removed; new 225.7017-1 added...........................15627
225.7017-2 Removed; new 225.7017-2 added...........................15627
225.7017-3 Removed; new 225.7017-3 added...........................15627
225.7017-4 Removed; new 225.7017-4 added...........................15627
225.7018 Removed...................................................15627
225.7018-1 Removed.................................................15627
225.7018-2 Removed.................................................15627
225.7018-3 Removed.................................................15627
225.7019 Removed...................................................15627
225.7019-1 Removed.................................................15627
225.7019-2 Removed.................................................15627
225.7019-3 Removed.................................................15627
225.7019-4 Removed.................................................15627
225.7020 Removed...................................................15627
225.7020-1 Removed.................................................15627
225.7020-2 Removed.................................................15627
225.7020-3 Removed.................................................15627
225.7020-4 Removed.................................................15627
225.7021 Removed...................................................15627
225.7021-1 Removed.................................................15627
225.7021-2 Removed.................................................15627

[[Page 539]]

225.7021-3 Removed.................................................15627
225.7022 Removed...................................................15627
225.7022-1 Removed.................................................15627
225.7022-2 Removed.................................................15627
225.7022-3 Removed.................................................15627
225.7022-4 Removed.................................................15627
225.7023 Removed...................................................15627
225.7023-1 Removed.................................................15627
225.7023-2 Removed.................................................15627
225.7023-3 Removed.................................................15627
225.7100 Revised...................................................15631
225.7101 Revised...................................................15631
225.7102 Revised...................................................15631
225.7102-1 Revised.................................................15631
225.7102-2 Revised.................................................15631
225.7102-3 Revised.................................................15631
225.7102-4 Revised.................................................15631
225.7103 Revised...................................................15631
225.7103-1 Revised.................................................15631
225.7103-2 Revised.................................................15631
225.7103-3 Revised.................................................15631
225.7200 Revised...................................................15632
225.7202 Revised...................................................15632
225.7203 Revised...................................................15632
225.7301 (b), (c) and (d) revised..................................15632
225.7302 Introductory text and (a)(4) revised; (a)(1) amended......15632
225.7303 (a) and (b) amended.......................................15632
225.7303-2 (a) introductory text, (2)(ii) and (c)(1) amended; 
        (a)(1) and (c) introductory text revised...................15632
225.7303-4 Revised.................................................15633
225.7303-5 (a) and (b) revised.....................................15633
225.7305 Amended...................................................15633
225.7308 Revised...................................................15633
225.7401 (d) revised...............................................15633
226.103 Revised; interim...........................................56562
226.104 Revised; interim...........................................56562
226.7000 (a) and (b) amended.......................................15381
228.102-1 Revised..................................................36945
228.102-70 Added...................................................36945
230.201-5 (a)(1)(A)(2), (B), (e)(i) and (ii) amended................7440
231.205-70 (d)(9) and (10) amended..................................7440
232.7000--232.7004 (Subpart 232.70) Added; interim..................8455
232.006-5 Amended...................................................7440
232.070 (a) amended.................................................7440
232.071 (a)(1), (b)(1), and (3) amended.............................7440
232.111 Added......................................................69632
232.501-2 (a) amended...............................................7440
232.617 (a) amended.................................................7440
232.7002 (a)(6)(ii) and (b) revised................................69630
236.570 (b)(5) amended..............................................7440
237.101 Added; interim..............................................7443
    Regulation at 68 FR 7443 confirmed.............................50477
237.102-70 (d) added; interim.......................................7443
237.170 Heading added; interim.....................................56564
237.1701-1 Added; interim..........................................56564
237.1701-2 Added; interim..........................................56564
237.1701-3 Added; interim..........................................56564
239.7302 (b)(2)(i) amended; (b)(2)(ii) revised......................7440
    (b)(2)(ii) amended.............................................15380
242.302 (a)(19) removed............................................15633
242.602 (c)(2) amended..............................................7440
242.771-3 (c) amended...............................................7440
242.1203 (b)(2)(A) amended..........................................7440
243 Meetings.......................................................60861
243.171 Introductory text, (a), (b) and (c) redesignated as (a), 
        (1), (2) and (3); new (b) added; interim...................58633
    Regulation at 68 FR 58633 withdrawn............................75200
245.407 (a)(i)(A) amended..........................................23088
249.7000 (a)(1) amended.............................................7440
249.7001 (b)(11) revised............................................7440
250.102-70 Amended.................................................15380
250.303 (3) amended; (12) revised...................................7440
252 Meetings.......................................................60861
252.204-7004 Revised; interim......................................64558
252.211-7003 Added; interim........................................58633
    Revised; interim...............................................75200
252.211-7005 clause amended.........................................7440
252.212-7001 Clause amended; interim...................7442, 8455, 56562
    Clause amended............................15633, 33026, 56561, 69630
    Clause amended; interim........................................56562
252.217-7012 Clause amended........................................50478
252.219-7005 Added.................................................64561
252.219-7006 Added.................................................64561
252.225-7000 Revised...............................................15634
    (c)(2) corrected...............................................25088
252.225-7001 Revised...............................................15634
252.225-7002 Revised...............................................15634
252.225-7003 Revised...............................................15634
252.225-7004 Added.................................................15634
252.225-7008 Removed...............................................15635
252.225-7009 Removed...............................................15635
252.225-7010 Removed...............................................15635
252.225-7011 Revised...............................................15635
252.225-7012 (c)(3) amended; interim................................7442

[[Page 540]]

252.225-7013 Added.................................................15635
252.225-7014 Revised...............................................15636
252.225-7015 Revised...............................................15636
252.225-7016 Revised...............................................15636
252.225-7017 Removed...............................................15637
252.225-7018 Revised...............................................15637
252.225-7019 Revised...............................................15637
252.225-7020 Revised...............................................15637
252.225-7021 Revised...............................................15637
    Clause amended.................................................50477
252.225-7022 Clause amended........................................15639
252.225-7023 Introductory text amended.............................15639
252.225-7024 Removed...............................................15639
252.225-7025 Revised...............................................15639
252.225-7026 Removed...............................................15639
252.225-7027 Revised...............................................15639
252.225-7028 Revised...............................................15639
252.225-7029 Removed...............................................15639
252.225-7030 Revised...............................................15639
252.225-7031 Revised...............................................15639
252.225-7032 Revised...............................................15639
252.225-7033 Revised...............................................15639
252.225-7035 Revised...............................................15640
252.225-7036 Revised...............................................15640
252.225-7037 Revised...............................................15640
252.225-7038 Revised...............................................15640
252.225-7039 Revised...............................................15640
252.225-7041 Introductory text amended.............................15641
252.225-7042 Revised...............................................15641
252.226-7001 Revised; interim......................................56562
252.232-7003 Added; interim.........................................8455
    (a)(2) amended.................................................15380
    Clause amended.................................................69630
252.232-7006 Added.................................................69632
252.246-7000 Revised; interim.......................................8455
253.204-70 (b)(12)(iii)(B) and (c)(4)(iii)(B)(5) amended............7441
    (b)(2) and (b)(12)(iii) revised................................36946
253.204-71 (e)(2)(i)(A)(4) amended..................................7441
Chapter 2 Appendix G amended...................7441, 15380, 23088, 23089
    Appendix G removed.............................................64557

                                  2004

48 CFR
                                                                   69 FR
                                                                    Page
Chapter 2
201.105-3 Revised..................................................63326
201.201-70 Added...................................................63326
201.301 (a) revised................................................63326
202 Technical correction.............................................128
202.101 Amended.......................................1926, 58353, 63327
203.070 Added......................................................74990
203.103 Removed....................................................74990
203.103-2 Removed..................................................74990
203.104-10 Removed.................................................74990
203.203 (Subpart 203.2) Removed....................................74990
203.301 (Subpart 203.3) Removed....................................74990
203.405 (Subpart 203.4) Removed....................................74990
203.502 Removed....................................................74990
203.502-2 Heading revised..........................................74990
203.570-1 Revised..................................................74990
203.570-2 Revised..................................................74990
203.570-3 Removed; new 203.570-3 redesignated from 203.570-5.......74990
203.570-4 Removed..................................................74990
203.570-5 Redesignated as 203.570-3................................74990
204 Technical correction.............................................128
204.7003 (a)(1) amended............................................63327
204.7005 (d) revised...............................................63327
205.207 Revised....................................................63328
205.470 Revised....................................................63328
205.470-1 Removed..................................................63328
205.470-2 Removed..................................................63328
206.001 (S-70) added...............................................31908
    Revised........................................................74991
206.202 Revised....................................................74991
206.302-1 (b)(4) removed...........................................74991
206.302-2 Revised..................................................74991
206.303-1 (b) and (c) removed......................................74991
206.303-2 Removed..................................................74991
207.105 (b)(13)(ii) amended........................................55986
207.170 Added; interim.............................................55987
207.170-1 Added; interim...........................................55987
207.170-2 Added; interim...........................................55987
207.170-3 Added; interim...........................................55987
207.7001--207.7003 (Subpart 207.70) Regulation at 68 FR 43331 
        confirmed..................................................13478
208.404 (S-70) added...............................................63327
208.601-70--208.671 (Subpart 208.6) Removed........................63329
209.103 Removed....................................................65089
209.103-70 Removed.................................................65089
209.105-2 Revised..................................................74990
209.106 Revised....................................................65089
209.106-1 Removed..................................................65089
209.106-2 Removed..................................................65089
209.202 Revised....................................................65089
209.270 Added; interim.............................................55988
209.270-1 Added; interim...........................................55988
209.270-2 Added; interim...........................................55988
209.270-3 Added; interim...........................................55988
209.270-4 Added; interim...........................................55988
209.303--209.308 (Subpart 209.3) Removed...........................65089

[[Page 541]]

209.406-3 Revised..................................................74990
209.407-3 Revised..................................................74990
210 Removed........................................................63329
211 Technical correction.............................................128
211.201 (d) introductory text amended..............................67855
212 Technical correction.............................................128
212.102 (Subpart 212.1) Removed....................................35532
212.212 Added; interim.............................................63330
212.301 (f)(i)(C) revised; interim..................................1927
212.303 Removed....................................................65089
212.503 (c)(ii) amended............................................65089
212.504 (a)(xxiii) and (xxiv) removed; (a)(xxv) redesignated as 
        (a)(xxiii); new (a)(xxiii) amended.........................63331
212.7000--212.7003 (Subpart 212.70) Added; interim.................63330
213.302-5 (d)(ii) revised; interim..................................1927
214.201-1 Removed..................................................65090
214.202-5 (d) redesignated as (c)..................................65090
214.407-3 (e)(ix) added; (h) removed...............................65090
214.503--214.503-1 (Subpart 214.5) Removed.........................65090
216.501-2 Added; interim...........................................13478
217.103 Regulation at 68 FR 43332 confirmed........................26508
217.171 Regulation at 68 FR 43333 confirmed........................28608
217.172 Regulation at 68 FR 50475 confirmed........................13479
217.173 Regulation at 68 FR 50475 confirmed........................13479
217.174 Regulation at 68 FR 50475 confirmed........................13479
217.204 Added; interim.............................................13478
    Revised; interim...............................................74994
217.401 (Subpart 217.4) Removed....................................67855
217.7501 (b)(2) amended; interim...................................55989
219 Technical correction...........................................59648
219.201 (d)(11) added; interim.....................................55987
219.502-1 Regulation at 69 FR 31909 confirmed......................67856
219.502-1 (2) amended..............................................31909
    Regulation at 69 FR 31909 confirmed............................67856
219.502-2 (a)(iii) amended.........................................31909
    Regulation at 69 FR 31909 confirmed............................67856
219.502-70 Removed.................................................63329
219.508 Removed....................................................63329
219.705-4 (d) amended..............................................67855
219.800 (a) amended................................................58354
219.1005 (a)(i)(B), (C) and (D) amended............................31909
    Regulation at 69 FR 31909 confirmed............................67856
219.7100 Amended...................................................74995
219.7102 (a) and (d) revised.......................................74995
219.7103-1 Revised.................................................74995
219.7103-2 (d), (e) and (f) revised; (h) amended...................74995
219.7105 Amended...................................................74996
219.7106 Amended...................................................74996
224.102 Removed....................................................67856
225.003 (4), (5) and (10) revised; interim..........................1927
225.401-70 Heading and introductory text revised; interim...........1927
225.502 (c)(i)(B) revised; interim..................................1928
    (c)(i)(B) amended..............................................74992
225.870-5 (a) amended..............................................58353
225.872-1 (a) and (b) amended.......................................8116
225.901 Introductory text and (2) amended; interim..................1928
225.1101 (2)(iv)(B), (3)(iii), (9) and (10) revised; interim........1928
225.7002-2 (f) through (i) and (j) through (m) redesignated as (g) 
        through (j) and (l) through (o); new (f) and (k) added; 
        interim....................................................26509
    (l) revised....................................................31910
    Regulation at 69 FR 26509 confirmed............................55989
225.7501 (b)(1)(ii) and (2) revised; interim........................1928
225.7503 (a) and (b) amended; interim...............................1928
226.104 Amended....................................................55991
226.7003-2 (c) revised.............................................63328
227.7103-6 (e)(2) amended; (e)(3) removed; (e)(4) redesignated as 
        new (e)(3); interim........................................31911
    Regulation at 69 FR 31911 confirmed............................67857
227.7103-14 (a)(1) removed; (a)(2) and (3) redesignated as new 
        (a)(1) and (2); interim....................................31912
    Regulation at 69 FR 31912 confirmed............................67857
227.7104 (e)(4) amended; (e)(5) removed; (e)(6) redesignated as 
        new (e)(5); interim........................................31912

[[Page 542]]

    Regulation at 69 FR 31912 confirmed............................67857
228.304 Revised....................................................65091
228.305 Revised....................................................65091
231.205-10 Removed.................................................63332
231.205-22 Revised.................................................63332
231.205-70 (a), (c) and (d) revised................................63332
232.7003 (a)(1) amended.............................................1926
235.006-70 Introductory text amended...............................65092
235.007 Removed....................................................65092
235.010 Revised....................................................65092
235.015 Removed....................................................65092
235.016 (2)(ii) amended............................................63328
235.017-1 (c)(4) amended...........................................65092
235.7000--235.7003--4 (Subpart 235.70) Removed.....................67858
236.602-1 Revised..................................................75000
236.602-2 Removed..................................................75000
236.602-4 Removed..................................................75000
236.604 (c)(ii) revised............................................75000
237.102-70 (a)(2) and (3) amended; (a)(4) added....................35533
    Regulation at 69 FR 35533 confirmed............................75001
237.104 (b)(i) introductory text and (ii)(A)(1) amended; 
        (b)(ii)(A)(2) redesignated as (b)(ii)(A)(3); new 
        (b)(ii)(A)(2), (iii) and (iv) added; (b)(ii)(C) revised; 
        interim....................................................55992
237.601 (Subpart 237.6) Removed....................................35532
239.7100--239.7103 (Subpart 239.71) Revised........................35534
242.1104 Revised...................................................31912
243 Technical correction.............................................128
246.407 (f)(iii)(S-70) added; interim).............................55989
246.504 (Subpart 246.5) Added; interim.............................55989
251.102 Revised....................................................67858
251.105 Removed....................................................67858
252 Technical correction.............................................128
252.203-7001 Introductory text revised; clause amended.............74990
252.205-7000 Introductory text amended.............................63328
252.209-7000 Removed...............................................65089
252.209-7001 Clause amended........................................55993
252.212-7001 Clause amended; interim.........................1928, 26509
    Clause amended...................................26509, 31910, 55991
    (b) amended....................................................35535
    Regulation at 69 FR 26509 confirmed............................55989
252.212-7001 Clause amended........................................74992
252.219-7005 Removed...............................................63329
252.219-7006 Removed...............................................63329
252.225-7012 Clause amended; interim...............................26509
    Regulation at 69 FR 26509 confirmed............................55989
252.225-7013 Clause amended; interim................................1928
252.225-7016 Clause amended........................................26509
252.225-7020 Clause amended; interim................................1928
252.225-7021 Clause amended; interim................................1928
    Clause date and (a)(4) revised.................................35535
    Clause amended.................................................74992
252.225-7035 Heading and Alternate I revised; clause amended; 
        interim.....................................................1929
252.225-7036 Heading revised; clause amended; interim...............1929
    Clause amended.................................................74992
252.225-7045 Clause amended; Alternate I revised; interim...........1929
    Clause date revised; (a) amended...............................35536
    Clause amended.................................................74992
252.226-7001 Clause amended........................................55991
252.227-7036 Removed; interim......................................31912
    Regulation at 69 FR 31912 confirmed............................67857
252.227-7037 Introductory text amended; interim....................31912
    Regulation at 69 FR 31912 confirmed............................67857
252.232-7003 Clause amended.........................................1926
252.235-7011 Revised...............................................65092
252.239-7000 Revised...............................................35535
252.251-7000 Clause amended........................................67858
252.719-7006 Removed...............................................63329
200--299 (Ch. 2) Appendix I revised................................74996

                                  2005

48 CFR
                                                                   70 FR
                                                                    Page
Chapter 2
200--299 (Ch. 2) Heading revised...................................75411
201.602-2 Introductory text revised................................75411
202.101 Regulation at 68 FR 75200 confirmed........................20836
204.201 Revised....................................................58982

[[Page 543]]

204.202 Removed....................................................58982
204.203 Regulation at 68 FR 64558 confirmed........................57188
204.603 Regulation at 68 FR 64558 confirmed........................57188
204.904 (1)(v) revised.............................................35544
Regulation at 68 FR 64558 confirmed................................57188
204.905 Regulation at 68 FR 64558 confirmed........................57188
204.1103--204.1104 (Subpart 204.11) Regulation at 68 FR 64558 
        confirmed..................................................57188
204.1103 Revised...................................................57188
204.7101 Amended...................................................58982
204.7103-1 (b), (c) and (d) redesignated as (d), (e) and (f); new 
        (b) and (c) added..........................................58982
204.7103-2 Revised.................................................58983
204.7104-1 Regulation at 68 FR 75200 confirmed.....................20836
204.7104-2 Regulation at 68 FR 75200 confirmed.....................20836
    Revised........................................................58983
204.7106 (b)(3) added..............................................58983
204.7107 Revised...................................................58983
204.7108 Added.....................................................58983
204.7109 Added.....................................................58983
204.7202-1 Regulation at 68 FR 64558 confirmed.....................57188
204.7207 Regulation at 68 FR 64558 confirmed.......................57188
204.7300--204.7304 (Subpart 204.73) Regulation at 68 FR 64558 
        confirmed..................................................57188
205.470 Amended; interim............................................8537
    Regulation at 70 FR 8537 confirmed.............................54651
206.001 Correctly revised...........................................2361
207.105 (b)(19)(E) added...........................................23801
    (b)(4) added; interim..........................................29642
205.207 (d)(i) introductory text amended...........................73149
207.500--207.503 (Subpart 207.5) Added; interim....................14573
208.404 (a) redesignated as (a)(ii); (a)(i) added; interim.........29642
208.7002 (a)(3) and (4) introductory text revised..................35544
209.270 Regulation at 69 FR 55988 confirmed........................57190
209.270-1 Regulation at 69 FR 55988 confirmed......................57190
209.270-2 Regulation at 69 FR 55988 confirmed......................57190
209.270-3 Regulation at 69 FR 55988 confirmed; (a) revised.........57190
209.270-4 Regulation at 69 FR 55988 confirmed; introductory text 
        removed; (a) revised.......................................57190
209.403 Amended....................................................14573
209.406-2 (a) introductory text revised............................35544
211.105 Added......................................................23804
211.271 Revised....................................................73150
211.274-1 Regulation at 68 FR 75200 confirmed; revised.............20836
211.274-2 Regulation at 68 FR 75200 confirmed; revised.............20836
211.274-3 Regulation at 68 FR 75200 confirmed; revised.............20836
211.274-4 Added....................................................20836
211.275 Added; eff. 11-14-05.......................................53968
211.275-1 Added; eff. 11-14-05.....................................53968
211.275-2 Added; eff. 11-14-05.....................................53968
211.275-3 Added; eff. 11-14-05.....................................53968
212.301 Regulation at 68 FR 75200 confirmed; (f)(vi) amended.......20836
    (f)(vii) and (viii) added......................................23801
    (3) introductory text, (i), (ii) and (iii) removed; (f)(ix) 
added; eff. 11-14-05...............................................53968
    Regulation at 68 FR 64558 confirmed............................57188
212.602 (b)(ii) revised............................................35544
213.106-3 Regulation at 68 FR 64558 confirmed......................57188
213.270 (c)(1) revised.............................................35544
213.301 (4) added..................................................75411
213.307 (b)(i)(B)(2) amended.......................................35544
215.204-2 Removed..................................................58983
215.304 (c)(iii) added; interim....................................29644
215.404-76 (d) revised.............................................35544
216.470 Introductory text amended; (1) through (5) redesignated as 
        (a) through (e); new (a) revised; interim..................29644
216.501-2 Regulation at 69 FR 13478 confirmed......................73152
216.505 Existing text designated as (2); (1) added; interim........29642
217.170 (d)(1)(i) revised..........................................24324
    Regulation at 70 FR 24324 confirmed............................54652
217.171 (a)(5) redesignated as (a)(6); new (a)(5) added............24324
    Regulation at 70 FR 24324 confirmed............................54652
217.172 (a) amended; (e) redesignated as (f); new (e), (g) and (h) 
        added......................................................24324

[[Page 544]]

    Regulation at 70 FR 24324 confirmed............................54652
217.173 Revised....................................................24325
    Regulation at 70 FR 24325 confirmed............................54652
217.174 (c) amended................................................24325
    Regulation at 70 FR 24325 confirmed............................54652
217.204 Revised....................................................73152
217.7005 Revised...................................................35544
217.7102 (a) introductory text and (b) revised; (a)(2) amended.....35544
217.7103-3 (a) introductory text revised...........................35545
217.7501 Regulation at 69 FR 55989 confirmed.......................57190
217.7800--217.7802 (Subpart 217.78) Added; interim.................29642
219.702--219.708 (Subpart 219.7) Heading revised...................14574
219.702 (a) introductory text and (i)(A)(1) amended................14574
219.800 (a) amended.........................................35545, 57191
219.805-1 Added....................................................43073
219.1007 (a)(2) added...............................................6374
219.7102 (b)(1)(iv) amended; (b)(1)(vi) and (vii) added; interim 
                                                                   29645
219.7104 (b) and (d) amended; interim..............................29645
222.7201 (a) revised...............................................35545
223 Heading revised................................................73150
223.300 Removed....................................................73150
223.302 Revised....................................................73150
223.370-3 (a) revised..............................................73150
223.370-4 Revised..................................................73151
223.405 Revised....................................................73151
223.570-1 Removed; new 223.570-1 redesignated from 223.570-2.......73151
223.570-2 Redesignated as 223.570-1; new 223.570-2 redesignated 
        from 223.570-4.............................................73151
223.570-3 Removed..................................................73151
223.570-4 (b)(2) revised...........................................35545
    Redesignated as 223.570-2......................................73151
223.803 Revised....................................................73151
225.000 Removed....................................................73154
225.001 Revised....................................................73154
225.003 (5)(i)(B) amended; (5)(ii) redesignated as (5)(iii); new 
        (5)(ii) added..............................................73153
225.103 (a)(i)(B) revised; interim..................................2362
    Regulation at 70 FR 2362 confirmed.............................73153
225.171 Removed....................................................73154
225.401-70 Amended; interim.........................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
    Heading revised; introductory text amended.....................73154
225.402 Revised; interim............................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
225.403 Heading, (c) introductory text and (i) introductory text 
        revised; interim............................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
225.408 Revised....................................................73154
225.502 (b) introductory text and (i) revised; (c)(ii)(C) amended; 
        interim.....................................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
225.504 Revised....................................................73154
225.701 Revised....................................................73154
225.802 Revised....................................................73154
225.802-70 Revised.................................................23801
225.870-1 (d) revised; (e) removed.................................73154
225.870-5 Revised..................................................73155
225.870-7 Revised..................................................73155
225.871 Revised....................................................73155
225.871-1 Revised..................................................73155
225.871-5 (b) revised; (c) removed.................................73155
225.871-6 Revised..................................................73155
225.872-4 Revised..................................................73155
225.872-5 (b) and (c) revised; (d) removed.........................73155
225.872-6 (c) revised..............................................73155
225.873-2 Revised..................................................73155
225.901 (2) revised; interim........................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
225.902 Revised....................................................73155
225.903 Revised....................................................73155
225.7002-2 (b)(1) through (5) added................................43073
225.7003 (a) introductory text revised.............................73155
225.7008 Removed...................................................52031
225.7008-1 Removed.................................................52031
225.7008-3 Removed.................................................52031
225.7008-4 Removed.................................................52031
225.7009-3 (c) introductory text revised...........................57191
225.7014 Revised...................................................35545
225.7103-1 Amended..................................................6374
225.7103-3 Revised..................................................6374
    Corrected.......................................................8537

[[Page 545]]

225.7201--225.7204 (Subpart 225.72) Revised........................20839
225.7301 (e) added; interim........................................57192
    Revised........................................................73155
225.7302 Revised...................................................73155
225.7303-2 (a)(3) introductory text revised........................73155
225.7303-4 (b)(1) amended..........................................73155
225.7306 Removed; new 225.7306 redesignated from 225.7307 and 
        revised....................................................73155
225.7307 Redesignated as 225.7306; new 225.7307 redesignated from 
        225.7308...................................................73155
225.7308 Redesignated as 225.7307..................................73155
225.7401--225.7403-2 (Subpart 225.74) Revised......................23801
225.7501 (a)(3), (4) and (5) redesignated as (a)(4), (5) and (6); 
        new (a)(3) added; (b) revised; interim......................2363
    Regulation at 70 FR 2363 confirmed.............................73153
    (a)(2)(iii) revised............................................73155
226.103 Revised....................................................73149
226.370--226.370-9 (Subpart 226.3) Added...........................73149
226.7000--226.7008 (Subpart 226.70) Removed........................73150
226.7200 (Subpart 226.72) Removed..................................73150
227.7103-17 (b) and (c) amended....................................35545
227.7203-17 (b) and (c) amended....................................35545
228.105 Revised.....................................................8538
228.106-7 (a) amended...............................................8538
229.101 (Subpart 229.1) Revised.....................................8538
229.170 Added; interim.............................................57192
229.170-1 Added; interim...........................................57192
229.170-2 Added; interim...........................................57192
229.170-3 Added; interim...........................................57192
229.170-4 Added; interim...........................................57192
229.7000--229.7002-4 (Subpart 229.70) Revised.......................6375
231.205-70 (b)(4) amended; (c), (e) heading and (6) revised; 
        interim....................................................43075
232.007 Added......................................................75412
232.070 (a) and (c) revised........................................75412
232.071 Removed....................................................75413
232.108 Removed....................................................75413
232.206 (d) removed................................................75413
232.207 Removed....................................................75413
232.404--232.470 (Subpart 232.4) Heading revised...................75413
232.404 (a)(9) amended.............................................75413
232.409-1 Revised..................................................75413
232.410 Revised....................................................75413
232.501-2 Revised..................................................75413
232.501-3 (b) introductory text revised............................75413
232.503-15 (d) introductory text amended...........................75413
232.605 (b) amended................................................75413
232.606 Revised....................................................75413
232.610 Revised....................................................75413
232.616 Amended....................................................75413
232.617 Revised....................................................75413
232.670 Revised....................................................75413
232.671 Revised....................................................75413
232.903 Revised....................................................75413
232.904 Added......................................................75413
232.905 Removed....................................................75413
232.906 Revised....................................................75413
232.1007 Removed...................................................75414
232.1108 Removed...................................................75414
232.7100--232.7102 (Subpart 232.71) Added; interim.................52032
233.215-70 Revised.................................................35545
234.001 Removed....................................................14575
234.003 Revised....................................................14575
234.005 Revised....................................................14575
234.005-70 Removed.................................................14575
234.005-71 Removed.................................................14575
235.071 (a) revised................................................35545
236.274 (a) introductory text amended..............................35545
236.570 (c)(1) amended.............................................35545
237.102-70 (d)(3) revised..........................................14577
    (a)(1) revised.................................................35545
237.104 Regulation at 69 FR 55992 confirmed........................19004
237.170-2 Revised; interim.........................................29643
237.170-3 Removed; interim.........................................29643
237.171 Added; interim.............................................52033
237.171-1 Added; interim...........................................52033
237.171-2 Added; interim...........................................52033
237.171-3 Added; interim...........................................52033
237.171-4 Added; interim...........................................52033
237.201 Removed....................................................57193
237.203 Removed....................................................57193
237.270 Revised....................................................57193
237.271 Removed....................................................57194
237.272 Removed....................................................57194
237.7301 (a)(1) revised............................................35545
239.7300--239.7303 (Subpart 239.73) Removed........................67918
239.7401 (e) amended...............................................67918
239.7405 Revised...................................................67918
239.7406 (c)(6) amended............................................67919

[[Page 546]]

239.7411 (a)(2) removed; (a)(3) through (7) redesignated as (a)(2) 
        through (6); new (a)(2), (3) and (5) amended...............67919
242.002 (S-70)(iii) revised........................................67920
242.202 (a)(i)(P) and (Q) amended; (a)(i)(R) added.................52034
    (a)(i)(D) revised..............................................67920
242.402 (Subpart 242.4) Removed....................................67920
242.503-2 Revised..................................................67920
242.503-3 Removed..................................................67920
242.570 Removed....................................................67920
242.704 Removed....................................................67920
242.705-1 Revised..................................................67920
242.705-2 (b)(2)(iii) amended......................................67920
242.705-3 Removed..................................................67920
242.801 Removed....................................................67920
242.1106 (a) revised...............................................14575
242.1107-70 Revised................................................14575
242.1202 Removed...................................................67920
242.1203 Revised...................................................67920
242.1402 Heading revised...........................................35545
242.1503 (Subpart 242.15) Removed..................................67920
242.7100 Revised...................................................67920
242.7101 Removed...................................................67921
242.7102 Removed...................................................67921
242.7400 Revised...................................................67921
242.7401 Revised...................................................67921
242.7500 Removed...................................................67921
242.7501 Removed; new 242.7501 redesignated from 242.7502..........67921
242.7502 Redesignated as 242.7501; new 242.7502 redesignated from 
        242.7503...................................................67921
242.7503 Redesignated as 242.7502..................................67921
243.102 Removed....................................................67922
243.105 Removed....................................................67922
243.107 Removed....................................................67922
243.107-70 Amended.................................................67922
243.170 Revised....................................................67922
243.171 Regulation at 68 FR 75200 confirmed........................20836
    Revised........................................................67922
243.204 Revised....................................................67922
243.204-70 (b) revised.............................................67922
243.204-71 Removed.................................................67922
244.301 Revised....................................................67922
244.304 Revised....................................................67922
246.402 Added.......................................................8543
246.404 Added.......................................................8543
246.407 Regulation at 69 FR 55989 confirmed; amended...............57190
246.504 Regulation at 69 FR 55989 confirmed........................57190
247.571 (a)(1), (2) and (3) amended; (c)(1) introductory text 
        revised....................................................35545
250.105 Revised....................................................67923
250.201-70 (a) revised; (b) introductory text amended..............67923
250.303-1--250.306 (Subpart 250.3) Revised.........................67923
252.204-7004 Regulation at 68 FR 64558 confirmed...................57188
252.204-7006 Added.................................................58983
252.209-7002 Clause amended........................................35546
252.211-7003 Regulation at 68 FR 75200 confirmed; revised..........20836
    Clause amended.................................................35549
252.211-7005 Clause amended........................................67924
252.211-7006 Added; eff. 11-14-05..................................53968
252.212-7000 Clause amended........................................35546
252.212-7001 Clause amended; interim.........................2363, 52034
    Clause amended.................................................35546
    Clause corrected...............................................53716
    Regulation at 70 FR 2363 confirmed; Clause amended.............73153
252.223-7004 Introductory text amended.............................73151
252.225-7000 Clause amended........................................35546
252.225-7001 Clause amended........................................35546
252.225-7003 Revised...............................................20839
    Clause amended.................................................35546
252.225-7004 Revised...............................................20839
    Clause amended.................................................35546
252.225-7005 Clause amended........................................35546
252.225-7006 Added.................................................20840
    Clause amended.................................................35546
252.225-7011 Revised...............................................35547
252.225-7013 Clause amended; interim................................2363
    Clause amended.................................................35547
    Regulation at 70 FR 2363 confirmed.............................73153
252.225-7014 Clause amended........................................35547
252.225-7015 Revised...............................................35547
252.225-7016 Clause amended........................................35547
252.225-7018 Clause amended........................................35547
252.225-7019 Clause amended........................................35547
252.225-7020 Revised; interim.......................................2363
    Regulation at 70 FR 2363 confirmed.............................73153
252.225-7021 Clause amended; interim................................2364
    Clause amended..........................................35547, 53153
    Regulation at 70 FR 2363 confirmed.............................73153
252.225-7022 Clause amended........................................35547
252.225-7023 Clause amended........................................35548

[[Page 547]]

252.225-7025 Clause amended........................................35548
252.225-7027 Introductory text amended.............................73156
252.225-7028 Introductory text amended.............................73156
252.225-7031 Clause amended........................................35548
252.225-7035 Revised; interim.......................................2364
    7035 Regulation at 70 FR 2363 confirmed........................73153
252.225-7036 Clause and Alternate I amended; interim................2365
    Clause amended.................................................35548
    Regulation at 70 FR 2363 confirmed.............................73153
252.225-7037 Revised...............................................35548
252.225-7038 Revised...............................................35548
252.225-7039 Removed...............................................52031
252.225-7040 Added.................................................23802
252.225-7043 Introductory text amended.............................23803
    Clause amended.................................................35548
252.225-7044 Clause amended; interim................................2365
    Clause amended.................................................35548
    Regulation at 70 FR 2363 confirmed.............................73153
252.225-7045 Revised; interim.......................................2365
    Clause amended.................................................35548
    Regulation at 70 FR 2363 confirmed; Clause amended; 
Alternative I revised..............................................73153
252.226-7000 Introductory text amended.............................73150
252.229-7011 Added; interim........................................57192
252.232-7010 Added; interim........................................52032
252.234-7000 Removed...............................................14575
252.234-7001 Removed...............................................14575
252.237-7019 Added; interim........................................52034
252.239-7003 Removed...............................................67919
252.239-7004 Heading and clause amended............................67919
252.239-7005 Heading and clause amended............................67919
252.239-7007 Heading and clause amended............................67919
252.242-7000 Removed...............................................67921
252.242-7001 Added.................................................14575
252.242-7002 Added.................................................14575
252.242-7004 Clause amended........................................67921
252.242-7005 Introductory text revised; clause amended.............14576
252.242-7006 Introductory text revised; clause amended.............14576
252.244-7000 Clause amended........................................67923
252.247-7025 Clause amended........................................35548
253.213-70 (a)(2) revised..........................................35548
200--299 Appendix I amended; interim...............................29645
    Appendix F amended......................................35549, 58983

                                  2006

  (Regulations published from January 1, 2006, through October 1, 2006)

48 CFR
                                                                   71 FR
                                                                    Page
Chapter 2
202.101 Amended; interim...........................................53043
203.570-1 Revised..................................................14100
204.101 Revised.....................................................9268
204.402 Revised.....................................................9268
204.670 (Subpart 204.6) Revised....................................44926
204.805 (2) amended................................................53044
204.902 (b) amended.................................................9268
204.904 Removed.....................................................9268
204.7001 Revised...................................................27640
204.7102 Revised....................................................9269
204.7105 Revised....................................................9269
207.102 Removed....................................................53045
207.103 Revised....................................................53045
207.104 Removed....................................................53045
207.105 (b)(19)(F) added...........................................14100
    Regulation at 70 FR 29642 confirmed............................14103
    Revised........................................................53045
207.170 Regulation at 69 FR 55987 confirmed........................14106
207.170-1 Regulation at 69 FR 55987 confirmed......................14106
207.170-2 Regulation at 69 FR 55987 confirmed; revised.............14106
207.170-3 Regulation at 69 FR 55987 confirmed; (a) introductory 
        text and (3)(i) introductory text revised..................14106
207.171 Added......................................................14102
207.171-1 Added....................................................14102
207.171-2 Added....................................................14102
207.171-3 Added....................................................14102
207.171-4 Added....................................................14102
207.471 (b) and (c) revised........................................53045
207.500--207.503 (Subpart 207.5) Regulation at 70 FR 14573 
        confirmed..................................................14101
207.503 (S-70)(l)(i)(B) amended....................................14101
208.002 Revised....................................................39004
208.003 Removed....................................................39004
208.404 Regulation at 70 FR 29642 confirmed; heading and (a)(i) 
        revised....................................................14103
    (b) and (S-70) removed.........................................14107
208.404-1 Removed..................................................14107

[[Page 548]]

208.404-2 Removed..................................................14107
208.404-70 Removed.................................................14107
208.405 Removed....................................................14107
208.405-2 Removed..................................................14107
208.405-70 Added...................................................14107
208.406 Added......................................................14107
208.406-1 Added....................................................14107
208.505-70 Revised.................................................14108
208.705 Revised....................................................39004
208.7000 (a) amended...............................................39004
208.7002-1 Revised.................................................39004
208.7002-2 Revised.................................................39004
208.7003-1 (a) introductory text and (b) revised...................39004
208.7004 Revised...................................................39005
208.7004-1 Removed.................................................39005
208.7004-2 Removed.................................................39005
208.7004-3 Removed.................................................39005
208.7004-4 Removed.................................................39005
208.7004-5 Removed.................................................39005
208.7004-6 Removed.................................................39005
208.7004-7 Removed.................................................39005
208.7004-8 Removed.................................................39005
208.7004-9 Removed.................................................39005
208.7004-10 Removed................................................39005
208.7005 Revised...................................................39005
208.7006 Revised...................................................39005
208.7101 Revised...................................................39005
208.7102 Revised...................................................39005
208.7103 Removed...................................................39005
208.7104 Removed...................................................39005
208.7105 Removed...................................................39005
208.7201--208.7204 (Subpart 208.72) Removed........................39005
208.7301 Amended...................................................39005
208.7302 Amended...................................................39005
208.7303 Revised...................................................39005
208.7304 Revised...................................................39005
208.7401 Amended...................................................39005
208.7403 Revised...................................................39005
209.105-1 Added....................................................14100
210 Added..........................................................14106
210.001 Revised; interim...........................................53043
211.002 Revised....................................................27641
211.201 Revised....................................................27641
211.204 Revised....................................................27641
211.273-2 (c) amended..............................................27641
211.273-3 Revised..................................................27641
211.275-2 Revised; interim.........................................29086
212.301 (f)(ii) amended......................................9269, 39006
    (f)(vii) revised; interim......................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
212.7002-1 (b) revised.............................................18669
212.7002-2 Revised.................................................18669
212.7003 Revised...................................................18669
213.106-1-70 Added; interim........................................53043
213.302-3 (2) revised...............................................3413
213.305-1 Removed...................................................3413
213.305-3 Revised...................................................3413
213.306 (a)(1)(B) amended...........................................3413
213.307 Revised.....................................................3413
213.7001 Removed; new 213.7001 redesignated from 213.7002...........3413
213.7002 Redesignated as new 213.7001; new 213.7002 redesignated 
        from 213.7003 and revised...................................3413
213.7003 Redesignated as new 213.7002...............................3413
213.7003-1 Removed..................................................3413
213.7003-2 Removed..................................................3413
215.000 Removed.....................................................3414
215.203-70 (Subpart 215.2) Added; interim..........................53043
215.204-1--215.204-2 (Subpart 215.2) Removed........................3414
215.303 Revised.....................................................3414
215.304 Revised.....................................................3414
    Regulation at 70 FR 29644 confirmed; (c)(ii) revised...........14109
215.305 Revised.....................................................3414
216.104 Removed....................................................39007
216.104-70 Revised.................................................39007
216.203-4 Revised..................................................39007
216.306 (c)(ii) revised............................................39007
216.402-2 Revised..................................................39007
216.403 Revised....................................................39007
216.403-2 Revised..................................................39007
216.404 Removed....................................................39007
216.405-1 Revised..................................................39007
216.405-2 Revised..................................................39007
216.470 Regulation at 70 FR 29644 confirmed; (a)(1) revised........14109
    Revised........................................................39008
216.505 Regulation at 70 FR 29642 confirmed; (1) revised...........14103
216.505-70 Revised.................................................14108
216.703 Revised....................................................39008
217.202 Revised....................................................27642
217.208 Amended....................................................27642
217.208-70 (b) introductory text and (1) revised...................27642
217.503 Removed....................................................27642
217.7103 Revised...................................................27642
217.7103-1 Revised.................................................27642
217.7103-3 (b) revised; (c) through (f) removed....................27642
217.7103-4 Removed; redesignated from 217.7103-5; (b) revised; (c) 
        removed....................................................27643

[[Page 549]]

217.7103-5 Redesignated as 217.7103-4; redesignated from 217.7103-
        6; revised.................................................27643
217.7103-6 Redesignated as 217.7103-5; redesignated from 217.7103-
        7..........................................................27643
217.7103-7 Redesignated as 217.7103-6..............................27643
217.7200--217.7203 (Subpart 217.72) Removed........................27643
217.7404-5 (b)(1) and (2) revised..................................27643
217.7404-6 Introductory text amended...............................27643
217.7405 Removed; redesignated from 217.7406.......................27643
217.7406 Redesignated as 217.7405..................................27643
217.7500 Amended...................................................27643
217.7501 Redesignated as 217.7502; new 217.7501 added..............27643
217.7502 Redesignated as 217.7503; redesignated from 217.7501; 
        (b)(1) and (c) amended.....................................27643
217.7503 Redesignated as 217.7504; redesignated from 217.7502; 
        revised....................................................27643
217.7504 Redesignated as 217.7505; redesignated from 217.7503; 
        revised....................................................27643
217.7506 Added.....................................................27643
217.7600 Removed...................................................27643
217.7601 Revised...................................................27643
217.7602 Removed...................................................27643
217.7602-1 Removed.................................................27643
217.7602-2 Removed.................................................27643
217.7603 Removed...................................................27643
217.7603-1 Removed.................................................27643
217.7603-2 Removed.................................................27643
217.7603-3 Removed.................................................27643
217.7700 Removed...................................................27643
217.7701 Revised...................................................27643
217.7800--217.7802 (Subpart 217.78) Regulation at 70 FR 29642 
        confirmed..................................................14103
217.7802 (e) revised...............................................14104
219.000 Introductory text amended..................................39008
219.201 Regulation at 69 FR 55987 confirmed........................14106
    (a) removed; (d)(10) and (e) revised...........................44927
219.805-1 Regulation at 70 FR 43073 confirmed; (b)(2)(A) revised 
                                                                   34832
219.1102 (c) added; interim........................................53043
219.1307 (Subpart 219.13) Added; interim...........................53043
219.7102 Regulation at 70 FR 29645 confirmed........................3415
219.7104 Regulation at 70 FR 29645 confirmed........................3415
222.101-1 Revised..................................................18670
222.101-3 Revised..................................................18670
    Heading revised................................................27644
222.101-3-70 Revised...............................................18670
222.101-4 (a)(ii) revised..........................................18670
222.102-1 Revised..................................................18670
222.404-2 Removed..................................................18670
222.404-3 Removed..................................................18670
222.404-11 Removed.................................................18670
222.406-8 (a), (c) heading and (d) revised.........................18670
222.407 Removed....................................................18670
222.804 Removed....................................................18670
222.804-2 Removed..................................................18670
222.805 Removed....................................................18670
222.807 Revised....................................................18670
222.1003-7 Removed.................................................18670
222.1008-2 Revised.................................................18670
222.1014 Revised...................................................18670
222.1305--222.1310 (Subpart 222.13) Revised........................18670
222.1406 Revised...................................................18671
222.7100 Removed...................................................18671
222.7200 Removed...................................................18671
225.401-70 Table amended; interim...................................9270
225.670--225.670-4 (Subpart 225.6) Removed.........................39006
225.770 Added; interim.............................................53046
225.770-1 Added; interim...........................................53046
225.770-2 Added; interim...........................................53046
225.770-3 Added; interim...........................................53046
225.770-4 Added; interim...........................................53046
225.770-5 Added; interim...........................................53046
225.870-6 Revised..................................................27645
225.1101 (10)(i) revised; interim...................................9271
225.1103 (2) removed; (3) and (4) redesignated as (2) and (3)......39006
    (4) added; interim.............................................53046
225.7001 (a) and (b) revised.......................................14111
225.7002-1 (b) amended.............................................39009
225.7002-2 (e) and (l) revised; interim............................34833
225.7003 (b) introductory text revised.............................14111
225.7005-1 Introductory text amended...............................39005
225.7009 Revised...................................................14111
225.7009-1 Revised.................................................14111
225.7009-2 Revised.................................................14111

[[Page 550]]

225.7009-3 Revised.................................................14111
225.7009-4 Revised.................................................14111
225.7009-5 Added...................................................14112
225.7301 Regulation at 70 FR 57192 confirmed.......................18671
225.7401 (b) amended...............................................39009
225.7402 Revised; interim..........................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
225.7402-1 Revised; interim........................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
225.7402-2 Revised; interim........................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
225.7402-3 Revised; interim........................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
225.7402-4 Revised; interim........................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
225.7503 Revised; interim...........................................9271
225.7601--225.7605 (Subpart 225.76) Added..........................39006
229.101 (a) revised; (b) added.....................................14100
229.170 Regulation at 70 FR 57192 confirmed........................18671
229.170-1 Regulation at 70 FR 57192 confirmed......................18671
229.170-2 Regulation at 70 FR 57192 confirmed......................18671
229.170-3 Regulation at 70 FR 57192 confirmed......................18671
229.170-4 Regulation at 70 FR 57192 confirmed......................18671
231.205-70 Regulation at 70 FR 43075 confirmed......................9272
232.001 Added......................................................18673
232.702--232.705.70 (Subpart 232-7) Regulation at 58 FR 46092 
        confirmed..................................................18673
232.703-1 Revised..................................................18673
232.7003 (a)(3) amended............................................27644
236.102 (4) removed; (5) redesignated as (4)........................9272
236.201 (c) revised.................................................9272
236.203 Revised.....................................................9273
236.213 Revised.....................................................9273
236.213-70 Removed..................................................9273
236.273 Removed; new 236.273 redesignated from 236.274; (b) 
        revised.....................................................9273
236.274 Redesignated as 236.273.....................................9273
236.602-1 (a) amended..............................................53044
237.102-70 (d)(3) revised; interim.................................34834
237.170 Regulation at 68 FR 56564 confirmed........................14103
237.170-1 Regulation at 68 FR 56564 confirmed......................14103
237.170-2 Regulations at 68 FR 56564 and 70 FR 29643 confirmed.....14103
237.170-2 (b) revised..............................................14104
237.170-3 Regulations at 68 FR 56564 and 70 FR 29643 confirmed.....14103
237.171 Regulation at 70 FR 52033 confirmed........................53048
237.171-1 Regulation at 70 FR 52033 confirmed......................53048
237.171-2 Regulation at 70 FR 52033 confirmed; revised.............53048
237.171-3 Regulation at 70 FR 52033 confirmed; revised.............53048
237.171-4 Regulation at 70 FR 52033 confirmed......................53048
237.7000--237.7003 (Subpart 237.70) Revised.........................3416
237.7100 Revised....................................................3416
237.7101 Removed; new 237.7101 redesignated from 237.7102...........3416
237.7102 Redesignated as 237.7101...................................3416
239.7001 (Subpart 239.70) Revised..................................39010
239.7200 Removed...................................................39011
239.7201 Added.....................................................39011
239.7202 Removed...................................................39011
239.7400 Amended...................................................39011
239.7402 (a) revised; (c) added....................................39011
239.7403 Removed...................................................39011
239.7404 Removed...................................................39011
239.7406 (c) revised...............................................39011
239.7407 Added.....................................................27646
239.7407-1 Removed.................................................27646
239.7407-2 Removed.................................................27646
239.7408-1 (e) amended.............................................39011
239.7408-2 (a) revised.............................................39011
239.7409 (b) amended...............................................39011
239.7411 (d) revised...............................................39011
239.7500--239.7501 (Subpart 239.75) Removed........................39011
241.101 Amended.....................................................3417
241.103 Revised.....................................................3417
241.201 Revised.....................................................3418
241.202 Revised.....................................................3417
241.203 Removed.....................................................3417
241.205 Revised.....................................................3417
241.270 Removed.....................................................3417
241.501 Added.......................................................3418
242.302 Revised....................................................44928

[[Page 551]]

242.7300 Removed....................................................9273
242.7301 Revised....................................................9273
242.7302 Revised....................................................9273
242.7303 Revised....................................................9273
246.101 Removed....................................................27646
246.102 (1) revised................................................27646
246.103 Revised....................................................27647
246.104 Removed....................................................27647
246.203 Removed....................................................27647
246.406 (2) revised................................................27647
246.408-71 (c) revised.............................................27647
246.408-72 Removed.................................................27647
246.470-1 Revised..................................................27647
246.470-2 Revised..................................................27647
246.470-3 Removed..................................................27647
246.470-4 Removed..................................................27647
246.470-5 Removed..................................................27647
246.472 Revised....................................................27647
246.601 Added......................................................27647
246.670 Removed....................................................27647
246.671 Removed....................................................27647
246.702 Removed....................................................27647
246.703 Removed....................................................27647
246.704 Revised....................................................27647
246.705 Revised....................................................27647
246.706 Revised....................................................27647
246.710 (1) revised................................................27647
249.105-1 Revised..................................................27645
249.105-2 Revised..................................................27645
249.106 Removed....................................................27645
249.108 Removed....................................................27645
249.108-4 Removed..................................................27645
249.109-7 Revised..................................................27645
249.110 Revised....................................................27645
249.7000 (a)(3) revised; (e), (f) and (g) added....................27645
249.7001 Revised...................................................27645
252.211-7001 Heading revised; clause amended.......................27641
252.211-7006 Clause amended........................................29086
252.212-7001 Clause amended; interim.........................9271, 34835
    Clause amended...................................14112, 27644, 53049
    Revised........................................................39009
    Regulation at 70 FR 52034 confirmed............................53048
252.217-7004 Clause amended........................................27643
252.217-7017 Removed...............................................27643
252.217-7018 Removed...............................................27643
252.217-7019 Removed...............................................27643
252.217-7020 Removed...............................................27643
252.217-7021 Removed...............................................27643
252.217-7022 Removed...............................................27643
252.217-7023 Removed...............................................27643
252.217-7024 Removed...............................................27643
252.217-7025 Removed...............................................27643
252.217-7027 Introductory text amended.............................27643
252.225-7007 Added; interim........................................53046
252.225-7013 Clause amended; interim...............................34835
252.225-7016 Revised...............................................14112
252.225-7021 Clause amended; interim.........................9271, 34835
252.225-7023 Clause amended........................................53044
252.225-7025 Clause amended........................................39005
252.225-7031 Introductory text amended.............................39006
252.225-7035 Clause amended; interim...............................34835
252.225-7036 Clause amended; interim...............................34835
252.225-7040 Revised; interim......................................34828
    Regulation at 71 FR 34828 comment period extended..............46409
252.225-7041 Introductory text amended.............................39006
252.225-7042 Introductory text amended.............................39006
252.225-7043 Clause amended........................................14100
252.225-7045 Clause amended; Alternate I revised; interim...........9271
    Clause amended; interim........................................34836
252.229-7011 Regulation at 70 FR 57192 confirmed...................18671
252.232-7003 Clause amended........................................27644
252.232-7007 Regulation at 58 FR 46093 confirmed; Clause amended 
                                                                   18673
    Clause and Alternate I amended.................................27644
252.237-7002 Introductory text and Alternate I amended..............3416
252.237-7003 Introductory text amended..............................3416
252.237-7004 Introductory text amended..............................3416
252.237-7005 Introductory text amended..............................3416
252.237-7006 Introductory text amended..............................3416
252.237-7007 Introductory text amended..............................3416
252.237-7008 Introductory text amended..............................3416
252.237-7009 Introductory text amended..............................3416
252.237-7010 Removed................................................3416
252.237-7011 Introductory text amended..............................3416
252.237-7012 Introductory text amended..............................3416

[[Page 552]]

252.237-7013 Introductory text amended..............................3416
252.237-7014 Introductory text amended..............................3416
252.237-7015 Introductory text amended..............................3416
252.237-7016 Introductory text and Alternates I and II amended......3416
252.237-7017 Introductory text amended..............................3416
252.237-7018 Introductory text amended..............................3416
252.237-7019 Regulation at 70 FR 52034 confirmed...................53048
    Clause amended.................................................53049
252.239-7013 Revised...............................................39006
252.239-7015 Revised...............................................39006
253.204-70 Revised.................................................44926
253.204-71 Removed.................................................44926
253.208-1 Revised..................................................39005
253.208-2 Revised..................................................39005
253.213 Revised.....................................................3413
253.213-70 Revised..................................................3413
200--299 (Ch. 2) Appendix I, regulation at 70 FR 29645 confirmed 
                                                                    3415
    Appendix D removed.............................................14102
    Appendix E removed.............................................27643
    Appendix B removed.............................................39005


                                  [all]