[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2022 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 48
Federal Acquisition Regulations System
________________________
Chapter 1 (Parts 1 to 51)
Revised as of October 1, 2022
Containing a codification of documents of general
applicability and future effect
As of October 1, 2022
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
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Table of Contents
Page
Explanation................................................. v
Title 48:
Chapter 1--Federal Acquisition Regulation 3
Finding Aids:
Table of CFR Titles and Chapters........................ 1117
Alphabetical List of Agencies Appearing in the CFR...... 1137
List of CFR Sections Affected........................... 1147
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 48 CFR 1.000 refers
to title 48, part 1,
section 000.
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[[Page v]]
EXPLANATION
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Each volume of the Code is revised at least once each calendar year
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[[Page vi]]
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[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
October 1, 2022
[[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,
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, 2022.
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, Michele Bugenhagen was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
(This book contains chapter 1, parts 1 to 51)
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Part
chapter 1--Federal Acquisition Regulation................... 1
[[Page 3]]
CHAPTER 1--FEDERAL ACQUISITION REGULATION
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SUBCHAPTER A--GENERAL
Part Page
1 Federal Acquisition Regulations System...... 5
2 Definitions of words and terms.............. 23
3 Improper business practices and personal
conflicts of interest................... 48
4 Administrative and information matters...... 82
SUBCHAPTER B--ACQUISITION PLANNING
5 Publicizing contract actions................ 123
6 Competition requirements.................... 138
7 Acquisition planning........................ 152
8 Required sources of supplies and services... 170
9 Contractor qualifications................... 200
10 Market research............................. 240
11 Describing agency needs..................... 243
12 Acquisition of commercial products and
commercial services..................... 257
SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
13 Simplified acquisition procedures........... 275
14 Sealed bidding.............................. 295
15 Contracting by negotiation.................. 322
16 Types of contracts.......................... 378
17 Special contracting methods................. 413
18 Emergency acquisitions...................... 429
SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
19 Small business programs..................... 435
20-21 [Reserved]
22 Application of labor laws to Government
acquisitions............................ 507
23 Environment, energy and water efficiency,
renewable energy technologies,
occupational safety, and drug-free
workplace............................... 591
[[Page 4]]
24 Protection of privacy and freedom of
information............................. 609
25 Foreign acquisition......................... 612
26 Other socioeconomic programs................ 657
SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
27 Patents, data, and copyrights............... 663
28 Bonds and insurance......................... 691
29 Taxes....................................... 710
30 Cost accounting standards administration.... 717
31 Contract cost principles and procedures..... 732
32 Contract financing.......................... 786
33 Protests, disputes, and appeals............. 853
SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
34 Major system acquisition.................... 868
35 Research and development contracting........ 872
36 Construction and architect-engineer
contracts............................... 882
37 Service contracting......................... 901
38 Federal supply schedule contracting......... 913
39 Acquisition of information technology....... 914
40 [Reserved]
41 Acquisition of utility services............. 920
SUBCHAPTER G--CONTRACT MANAGEMENT
42 Contract administration and audit services.. 930
43 Contract modifications...................... 968
44 Subcontracting policies and procedures...... 972
45 Government property......................... 979
46 Quality assurance........................... 991
47 Transportation.............................. 1010
48 Value engineering........................... 1047
49 Termination of contracts.................... 1054
50 Extraordinary contractual actions and the
safety act.............................. 1097
51 Use of Government sources by contractors.... 1110
[[Page 5]]
SUBCHAPTER A_GENERAL
PART 1_FEDERAL ACQUISITION REGULATIONS SYSTEM--Table of Contents
Sec.
1.000 Scope of part.
Subpart 1.1_Purpose, Authority, Issuance
1.101 Purpose.
1.102 Statement of guiding principles for the Federal Acquisition
System.
1.102-1 Discussion.
1.102-2 Performance standards.
1.102-3 Acquisition team.
1.102-4 Role of the acquisition team.
1.103 Authority.
1.104 Applicability.
1.105 Issuance.
1.105-1 Publication and code arrangement.
1.105-2 Arrangement of regulations.
1.105-3 Copies.
1.106 OMB approval under the Paperwork Reduction Act.
1.107 Certifications.
1.108 FAR conventions.
1.109 Statutory acquisition-related dollar thresholds--adjustment for
inflation.
1.110 Positive law codification.
Subpart 1.2_Administration
1.201 Maintenance of the FAR.
1.201-1 The two councils.
1.201-2 FAR Secretariat.
1.202 Agency compliance with the FAR.
Subpart 1.3_Agency Acquisition Regulations
1.301 Policy.
1.302 Limitations.
1.303 Publication and codification.
1.304 Agency control and compliance procedures.
Subpart 1.4_Deviations from the FAR
1.400 Scope of subpart.
1.401 Definition.
1.402 Policy.
1.403 Individual deviations.
1.404 Class deviations.
1.405 Deviations pertaining to treaties and executive agreements.
Subpart 1.5_Agency and Public Participation
1.501 Solicitation of agency and public views.
1.501-1 Definition.
1.501-2 Opportunity for public comments.
1.501-3 Exceptions.
1.502 Unsolicited proposed revisions.
1.503 Public meetings.
Subpart 1.6_Career Development, Contracting Authority, and
Responsibilities
1.601 General.
1.602 Contracting officers.
1.602-1 Authority.
1.602-2 Responsibilities.
1.602-3 Ratification of unauthorized commitments.
1.603 Selection, appointment, and termination of appointment for
contracting officers.
1.603-1 General.
1.603-2 Selection.
1.603-3 Appointment.
1.603-4 Termination.
1.604 Contracting Officer's Representative (COR).
Subpart 1.7_Determinations and Findings
1.700 Scope of subpart.
1.701 Definition.
1.702 General.
1.703 Class determinations and findings.
1.704 Content.
1.705 Supersession and modification.
1.706 Expiration.
1.707 Signatory authority.
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C.
20113.
Source: 48 FR 42103, Sept. 19, 1983, unless otherwise noted.
1.000 Scope of part.
This part sets forth basic policies and general information about
the Federal Acquisition Regulations System including purpose, authority,
applicability, issuance, arrangement, numbering, dissemination,
implementation, supplementation, maintenance, administration, and
deviation. Subparts 1.2, 1.3, and 1.4 prescribe administrative
procedures for maintaining the FAR System.
Subpart 1.1_Purpose, Authority, Issuance
1.101 Purpose.
The Federal Acquisition Regulations System is established for the
codification and publication of uniform policies and procedures for
acquisition by
[[Page 6]]
all executive agencies. The Federal Acquisition Regulations System
consists of the Federal Acquisition Regulation (FAR), which is the
primary document, and agency acquisition regulations that implement or
supplement the FAR. The FAR System does not include internal agency
guidance of the type described in 1.301(a)(2).
[48 FR 42103, Sept. 19, 1983, as amended at 51 FR 27116, July 29, 1986]
1.102 Statement of guiding principles for the Federal Acquisition
System.
(a) The vision for the Federal Acquisition System is to deliver on a
timely basis the best value product or service to the customer, while
maintaining the public's trust and fulfilling public policy objectives.
Participants in the acquisition process should work together as a team
and should be empowered to make decisions within their area of
responsibility.
(b) The Federal Acquisition System will--
(1) Satisfy the customer in terms of cost, quality, and timeliness
of the delivered product or service by, for example--
(i) Maximizing the use of commercial products and commercial
services;
(ii) Using contractors who have a track record of successful past
performance or who demonstrate a current superior ability to perform;
and
(iii) Promoting competition;
(2) Minimize administrative operating costs;
(3) Conduct business with integrity, fairness, and openness; and
(4) Fulfill public policy objectives.
(c) The Acquisition Team consists of all participants in Government
acquisition including not only representatives of the technical, supply,
and procurement communities but also the customers they serve, and the
contractors who provide the products and services.
(d) The role of each member of the Acquisition Team is to exercise
personal initiative and sound business judgment in providing the best
value product or service to meet the customer's needs. In exercising
initiative, Government members of the Acquisition Team may assume if a
specific strategy, practice, policy or procedure is in the best
interests of the Government and is not addressed in the FAR nor
prohibited by law (statute or case law), Executive order or other
regulation, that the strategy, practice, policy or procedure is a
permissible exercise of authority.
[60 FR 34733, July 3, 1995, as amended at 86 FR 61019, Nov. 4, 2021]
1.102-1 Discussion.
(a) Introduction. The statement of Guiding Principles for the
Federal Acquisition System (System) represents a concise statement
designed to be user-friendly for all participants in Government
acquisition. The following discussion of the principles is provided in
order to illuminate the meaning of the terms and phrases used. The
framework for the System includes the Guiding Principles for the System
and the supporting policies and procedures in the FAR.
(b) Vision. All participants in the System are responsible for
making acquisition decisions that deliver the best value product or
service to the customer. Best value must be viewed from a broad
perspective and is achieved by balancing the many competing interests in
the System. The result is a system which works better and costs less.
[60 FR 34733, July 3, 1995]
1.102-2 Performance standards.
(a) Satisfy the customer in terms of cost, quality, and timeliness
of the delivered product or service. (1) The principal customers for the
product or service provided by the System are the users and line
managers, acting on behalf of the American taxpayer.
(2) The System must be responsive and adaptive to customer needs,
concerns, and feedback. Implementation of acquisition policies and
procedures, as well as consideration of timeliness, quality and cost
throughout the process, must take into account the perspective of the
user of the product or service.
(3) When selecting contractors to provide products or perform
services the Government will use contractors who have a track record of
successful past performance or who demonstrate a current superior
ability to perform.
[[Page 7]]
(4) The Government must not hesitate to communicate with the
commercial sector as early as possible in the acquisition cycle to help
the Government determine the capabilities available in the commercial
marketplace. The Government will maximize its use of commercial products
and commercial services in meeting Government requirements.
(5) It is the policy of the System to promote competition in the
acquisition process.
(6) The System must perform in a timely, high quality, and cost-
effective manner.
(7) All members of the Team are required to employ planning as an
integral part of the overall process of acquiring products or services.
Although advance planning is required, each member of the Team must be
flexible in order to accommodate changing or unforeseen mission needs.
Planning is a tool for the accomplishment of tasks, and application of
its discipline should be commensurate with the size and nature of a
given task.
(b) Minimize administrative operating costs. (1) In order to ensure
that maximum efficiency is obtained, rules, regulations, and policies
should be promulgated only when their benefits clearly exceed the costs
of their development, implementation, administration, and enforcement.
This applies to internal administrative processes, including reviews,
and to rules and procedures applied to the contractor community.
(2) The System must provide uniformity where it contributes to
efficiency or where fairness or predictability is essential. The System
should also, however, encourage innovation, and local adaptation where
uniformity is not essential.
(c) Conduct business with integrity, fairness, and openness. (1) An
essential consideration in every aspect of the System is maintaining the
public's trust. Not only must the System have integrity, but the actions
of each member of the Team must reflect integrity, fairness, and
openness. The foundation of integrity within the System is a competent,
experienced, and well-trained, professional workforce. Accordingly each
member of the Team is responsible and accountable for the wise use of
public resources as well as acting in a manner which maintains the
public's trust. Fairness and openness require open communication among
team members, internal and external customers, and the public.
(2) To achieve efficient operations, the System must shift its focus
from ``risk avoidance'' to one of ``risk management.'' The cost to the
taxpayer of attempting to eliminate all risk is prohibitive. The
Executive Branch will accept and manage the risk associated with
empowering local procurement officials to take independent action based
on their professional judgment.
(3) The Government shall exercise discretion, use sound business
judgment, and comply with applicable laws and regulations in dealing
with contractors and prospective contractors. All contractors and
prospective contractors shall be treated fairly and impartially but need
not be treated the same.
(d) Fulfill public policy objectives. The System must support the
attainment of public policy goals adopted by the Congress and the
President. In attaining these goals, and in its overall operations, the
process shall ensure the efficient use of public resources.
[60 FR 34734, July 3, 1995, as amended at 62 FR 51229, Sept. 30, 1997;
86 FR 61019, Nov. 4, 2021]
1.102-3 Acquisition team.
The purpose of defining the Federal Acquisition Team (Team) in the
Guiding Principles is to ensure that participants in the System are
identified--beginning with the customer and ending with the contractor
of the product or service. By identifying the team members in this
manner, teamwork, unity of purpose, and open communication among the
members of the Team in sharing the vision and achieving the goal of the
System are encouraged. Individual team members will participate in the
acquisition process at the appropriate time.
[60 FR 34734, July 3, 1995]
[[Page 8]]
1.102-4 Role of the acquisition team.
(a) Government members of the Team must be empowered to make
acquisition decisions within their areas of responsibility, including
selection, negotiation, and administration of contracts consistent with
the Guiding Principles. In particular, the contracting officer must have
the authority to the maximum extent practicable and consistent with law,
to determine the application of rules, regulations, and policies, on a
specific contract.
(b) The authority to make decisions and the accountability for the
decision made will be delegated to the lowest level within the System,
consistent with law.
(c) The Team must be prepared to perform the functions and duties
assigned. The Government is committed to provide training, professional
development, and other resources necessary for maintaining and improving
the knowledge, skills, and abilities for all Government participants on
the Team, both with regard to their particular area of responsibility
within the System, and their respective role as a team member. The
contractor community is encouraged to do likewise.
(d) The System will foster cooperative relationships between the
Government and its contractors consistent with its overriding
responsibility to the taxpayers.
(e) The FAR outlines procurement policies and procedures that are
used by members of the Acquisition Team. If a policy or procedure, or a
particular strategy or practice, is in the best interest of the
Government and is not specifically addressed in the FAR, nor prohibited
by law (statute or case law), Executive order or other regulation,
Government members of the Team should not assume it is prohibited.
Rather, absence of direction should be interpreted as permitting the
Team to innovative and use sound business judgment that is otherwise
consistent with law and within the limits of their authority.
Contracting officers should take the lead in encouraging business
process innovations and ensuring that business decisions are sound.
[60 FR 34734, July 3, 1995, as amended at 62 FR 44804, Aug. 22, 1997]
1.103 Authority.
(a) The development of the FAR System is in accordance with the
requirements of 41 U.S.C. chapter 13, Acquisition Councils.
(b) The FAR is prepared, issued, and maintained, and the FAR System
is prescribed, jointly by the Secretary of Defense, the Administrator of
General Services, and the Administrator, National Aeronautics and Space
Administration, under their several statutory authorities.
[48 FR 42103, Sept. 19, 1983, as amended at 51 FR 27116, July 29, 1986.
Redesignated at 60 FR 34733, July 3, 1995, as amended at 65 FR 36014,
June 6, 2000; 79 FR 24194, Apr. 29, 2014]
1.104 Applicability.
The FAR applies to all acquisitions as defined in part 2 of the FAR,
except where expressly excluded.
[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995]
1.105 Issuance.
1.105-1 Publication and code arrangement.
(a) The FAR is published in--
(1) The daily issue of the Federal Register;
(2) Cumulated form in the Code of Federal Regulations (CFR); and
(3) A separate edition available at https://www.acquisition.gov/
browse/index/far.
(b) The FAR is issued as Chapter 1 of Title 48, CFR. Subsequent
chapters are reserved for agency acquisition regulations that implement
or supplement the FAR (see subpart 1.3). The CFR Staff will assign
chapter numbers to requesting agencies.
(c) Each numbered unit or segment (e.g., part, subpart, section,
etc.) of an agency acquisition regulation that is codified in the CFR
shall begin with the chapter number. However, the chapter number
assigned to the FAR will not be included in the numbered units or
segments of the FAR.
[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995;
85 FR 67614, Oct. 23, 2020]
[[Page 9]]
1.105-2 Arrangement of regulations.
(a) General. The FAR is divided into subchapters, parts (each of
which covers a separate aspect of acquisition), subparts, sections, and
subsections.
(b) Numbering. (1) The numbering system permits the discrete
identification of every FAR paragraph. The digits to the left of the
decimal point represent the part number. The numbers to the right of the
decimal point and to the left of the dash, represent, in order, the
subpart (one or two digits), and the section (two digits). The number to
the right of the dash represents the subsection. Subdivisons may be used
at the section and subsection level to identify individual paragraphs.
The following example illustrates the make-up of a FAR number citation
(note that subchapters are not used with citations):
[GRAPHIC] [TIFF OMITTED] TC03AP91.000
(2) Subdivisions below the section or subsection level consist of
parenthetical alpha numerics using the following sequence:
(a)(1)(i)(A)(1)(i).
(c) References and citations. (1) Unless otherwise stated, cross-
references indicate parts, subparts, sections, subsections, paragraphs,
subparagraphs, or subdivisions of this regulation.
(2) This regulation may be referred to as the Federal Acquisition
Regulation or the FAR.
(3) Using the FAR coverage at 9.106-4(d) as a typical illustration,
reference to the--
(i) Part would be ``FAR part 9'' outside the FAR and ``part 9''
within the FAR.
(ii) Subpart would be ``FAR subpart 9.1'' outside the FAR and
``subpart 9.1'' within the FAR.
(iii) Section would be ``FAR 9.106'' outside the FAR and ``9.106''
within the FAR.
(iv) Subsection would be ``FAR 9.106-4'' outside the FAR and
``9.106-4'' within the FAR.
(v) Paragraph would be ``FAR 9.106-4(d)'' outside the FAR and
``9.106-4(d)'' within the FAR.
(4) Citations of authority (e.g., statutes or executive orders) in
the FAR shall follow the Federal Register form guides.
[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995,
as amended at 65 FR 36015, June 6, 2000; 77 FR 44065, July 26, 2012]
1.105-3 Copies.
Copies of the FAR in CFR form may be purchased from the Bookstore of
the Government Publishing Office (GPO), Washington, DC 20402.
[84 FR 19839, May 6, 2019]
1.106 OMB approval under the Paperwork Reduction Act.
The Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35) imposes a
requirement on Federal agencies to obtain approval from the Office of
Management and Budget (OMB) before collecting information from 10 or
more members of the public. The information collection and recordkeeping
requirements contained in this regulation have been approved by the OMB.
The following OMB control numbers apply:
------------------------------------------------------------------------
OMB control
FAR segment No.
------------------------------------------------------------------------
3.103...................................................... 9000-0018
3.11....................................................... 9000-0183
4.7........................................................ 9000-0034
4.9........................................................ 9000-0097
4.14....................................................... 9000-0177
4.17....................................................... 9000-0179
4.21....................................................... 9000-0199
and
9000-0201.
4.102...................................................... 9000-0033
4.605...................................................... 9000-0145
4.607...................................................... 9000-0145
5.405...................................................... 9000-0036
7.2........................................................ 9000-0082
8.5........................................................ 9000-0113
9.1........................................................ 9000-0011
9.2........................................................ 9000-0083
14.201..................................................... 9000-0034
14.202-4................................................... 9000-0040
14.202-5................................................... 9000-0039
14.205..................................................... 9000-0037
14.407..................................................... 9000-0038
14.5....................................................... 9000-0041
15.2....................................................... 9000-0037
15.209..................................................... 9000-0034
15.4....................................................... 9000-0013
15.404-1(f)................................................ 9000-0080
15.407-2................................................... 9000-0078
15.408..................................................... 9000-0115
[[Page 10]]
19.7....................................................... 9000-0192
and
9000-0006,
9000-0007
22.103..................................................... 9000-0065
22.5....................................................... 9000-0175
22.8....................................................... 1250-0003
22.11...................................................... 9000-0066
22.14...................................................... 1250-0005
22.16...................................................... 1245-0004
22.17...................................................... 9000-0188
23.602..................................................... 9000-0107
24.3....................................................... 9000-0182
25.302..................................................... 9000-0184
27.2....................................................... 9000-0096
27.3....................................................... 9000-0095
27.4....................................................... 9000-0090
28.1....................................................... 9000-0045
28.2....................................................... 9000-0045
29.304..................................................... 9000-0059
30.6....................................................... 9000-0129
31.205-46.................................................. 9000-0079
31.205-46(a)(3)............................................ 9000-0088
32.000..................................................... 9000-0138
32.1....................................................... 9000-0070
and
9000-0138
32.2....................................................... 9000-0138
32.4....................................................... 9000-0073
32.5....................................................... 9000-0010
and
9000-0138
32.7....................................................... 9000-0074
32.9....................................................... 9000-0102
32.10...................................................... 9000-0138
33......................................................... 9000-0035
36.213-2................................................... 9000-0037
36.603..................................................... 9000-0157
41.202(c).................................................. 9000-0125
42.7....................................................... 9000-0013
42.12...................................................... 9000-0076
42.13...................................................... 9000-0076
42.15...................................................... 9000-0142
43.205(f).................................................. 9000-0026
44.305..................................................... 9000-0132
45......................................................... 9000-0075
46......................................................... 9000-0077
47......................................................... 9000-0061
47.208..................................................... 9000-0056
48......................................................... 9000-0027
49......................................................... 9000-0028
50......................................................... 9000-0029
51.1....................................................... 9000-0031
51.2....................................................... 9000-0032
52.203-2................................................... 9000-0018
52.203-7................................................... 9000-0091
52.203-13.................................................. 9000-0164
52.203-16.................................................. 9000-0183
52.204-3................................................... 9000-0097
52.204-6................................................... 9000-0145
52.204-7................................................... 9000-0159
52.204-10.................................................. 9000-0177
52.204-12.................................................. 9000-0145
52.204-13.................................................. 9000-0159
52.204-14.................................................. 9000-0179
52.204-15.................................................. 9000-0179
52.204-16.................................................. 9000-0185
52.204-17.................................................. 9000-0185
52.204-18.................................................. 9000-0185
52.204-20.................................................. 9000-0189
52.204-23.................................................. 9000-0197
52.204-24.................................................. 9000-0199
and
9000-0201
52.204-25.................................................. 9000-0199
and
9000-0201
52.204-26.................................................. 9000-0199
and 9000-
0201
52.207-3................................................... 9000-0114
52.207-4................................................... 9000-0082
52.209-1................................................... 9000-0083
52.209-2................................................... 9000-0190
52.209-5................................................... 9000-0094
52.209-6................................................... 9000-0094
52.209-7................................................... 9000-0174
52.209-9................................................... 9000-0174
52.209-10.................................................. 9000-0190
52.209-11.................................................. 9000-0193
52.209-12.................................................. 9000-0193
52.209-13.................................................. 9000-0198
52.211-7................................................... 9000-0153
52.211-8................................................... 9000-0043
52.211-9................................................... 9000-0043
52.212-3................................................... 9000-0136
52.212-3(h)................................................ 9000-0094
52.212-5................................................... 9000-0034
52.214-14.................................................. 9000-0047
52.214-15.................................................. 9000-0044
52.214-16.................................................. 9000-0044
52.214-21.................................................. 9000-0039
52.214-26.................................................. 9000-0034
52.214-28.................................................. 9000-0013
52.215-1(c)(2)(iv)......................................... 9000-0048
52.215-1(d)................................................ 9000-0044
52.215-2................................................... 9000-0034
52.215-6................................................... 9000-0047
52.215-9................................................... 9000-0078
52.215-12.................................................. 9000-0013
52.215-13.................................................. 9000-0013
52.215-14.................................................. 9000-0080
52.215-19.................................................. 9000-0115
52.215-20.................................................. 9000-0013
52.215-21.................................................. 9000-0013
52.215-22.................................................. 9000-0173
52.215-23.................................................. 9000-0173
52.216-2................................................... 9000-0068
52.216-3................................................... 9000-0068
52.216-4................................................... 9000-0068
52.216-5................................................... 9000-0071
52.216-6................................................... 9000-0071
52.216-7................................................... 9000-0069
52.216-10.................................................. 9000-0067
52.216-15.................................................. 9000-0069
52.216-16.................................................. 9000-0067
52.216-17.................................................. 9000-0067
52.219-9................................................... 9000-0192
and 9000-
0006
9000-0007
52.219-10.................................................. 9000-0006
52.219-28.................................................. 9000-0163
52.219-29.................................................. 3245-0374
52.219-30.................................................. 3245-0374
52.222-2................................................... 9000-0065
52.222-4................................................... 1235-0023
52.222-6................................................... 1235-0023
52.222-8................................................... 1235-0008
and
1235-0018
52.222-11.................................................. 9000-0014
52.222-18.................................................. 9000-0155
52.222-21.................................................. 1250-0003
52.222-22.................................................. 1250-0003
52.222-23.................................................. 1250-0003
52.222-25.................................................. 1250-0003
[[Page 11]]
52.222-26.................................................. 1250-0001,
1250-0003
1250-0008
52.222-27.................................................. 1250-0003
52.222-32.................................................. 9000-0154
52.222-35.................................................. 1250-0004
52.222-36.................................................. 1250-0005
52.222-37.................................................. 1250-0004
52.222-38.................................................. 1293-0005
52.222-40.................................................. 1245-0004
52.222-41.................................................. 1235-0018
and
1235-0007
52.222-46.................................................. 9000-0066
52.222-50.................................................. 9000-0188
52.222-54.................................................. 1615-0092
52.222-55.................................................. 1235-0018
52.222-56.................................................. 9000-0188
52.222-62.................................................. 1235-0018an
d 1235-0021
1235-0029
52.223-2................................................... 9000-0180
52.223-4................................................... 9000-0134
52.223-5................................................... 9000-0147
52.223-6(b)(5)............................................. 9000-0101
52.223-7................................................... 9000-0107
52.223-9................................................... 9000-0134
52.223-11.................................................. 9000-0191
52.223-12.................................................. 9000-0191
52.223-22.................................................. 9000-0194
52.224-3................................................... 9000-0182
52.225-2................................................... 9000-0024
52.225-4................................................... 9000-0024
52.225-6................................................... 9000-0024
52.225-8................................................... 9000-0022
52.225-9................................................... 9000-0024
52.225-10.................................................. 9000-0024
52.225-11.................................................. 9000-0024
52.225-12.................................................. 9000-0024
52.225-18.................................................. 9000-0161
52.225-21.................................................. 9000-0024
52.225-23.................................................. 9000-0024
52.225-26.................................................. 9000-0184
52.227-2................................................... 9000-0096
52.227-6................................................... 9000-0096
52.227-9................................................... 9000-0096
52.227-11.................................................. 9000-0095
52.227-13.................................................. 9000-0095
52.227-14.................................................. 9000-0090
52.227-15.................................................. 9000-0090
52.227-16.................................................. 9000-0090
52.227-17.................................................. 9000-0090
52.227-18.................................................. 9000-0090
52.227-19.................................................. 9000-0090
52.227-20.................................................. 9000-0090
52.227-21.................................................. 9000-0090
52.227-22.................................................. 9000-0090
52.227-23.................................................. 9000-0090
52.228-1................................................... 9000-0045
52.228-2................................................... 9000-0045
52.228-12.................................................. 9000-0135
52.228-13.................................................. 9000-0045
52.228-14.................................................. 9000-0045
52.228-15.................................................. 9000-0045
52.228-16.................................................. 9000-0045
52.229-2................................................... 9000-0059
52.229-11.................................................. 1545-2263
52.229-12.................................................. 1545-2263
52.230-6................................................... 9000-0129
52.232-1................................................... 9000-0070
52.232-2................................................... 9000-0070
52.232-3................................................... 9000-0070
52.232-4................................................... 9000-0070
52.232-5................................................... 9000-0102
52.232-6................................................... 9000-0070
52.232-7................................................... 9000-0070
52.232-8................................................... 9000-0070
52.232-9................................................... 9000-0070
52.232-10.................................................. 9000-0070
52.232-11.................................................. 9000-0070
52.232-12.................................................. 9000-0073
52.232-13.................................................. 9000-0010
52.232-14.................................................. 9000-0010
52.232-15.................................................. 9000-0010
52.232-16.................................................. 9000-0010
52.232-20.................................................. 9000-0074
52.232-22.................................................. 9000-0074
52.232-27.................................................. 9000-0102
52.232-29.................................................. 9000-0138
52.232-30.................................................. 9000-0138
52.232-31.................................................. 9000-0138
52.232-32.................................................. 9000-0138
52.232-33.................................................. 9000-0144
52.232-34.................................................. 9000-0144
52.233-1................................................... 9000-0035
52.236-5................................................... 9000-0062
52.236-15.................................................. 9000-0058
52.236-19.................................................. 9000-0064
52.237-10.................................................. 9000-0152
52.241-1................................................... 9000-0126
52.241-3................................................... 9000-0122
52.241-7................................................... 9000-0123
52.241-13.................................................. 9000-0124
52.242-5................................................... 9000-0196
52.242-13.................................................. 9000-0108
52.243-1................................................... 9000-0026
52.243-2................................................... 9000-0026
52.243-3................................................... 9000-0026
52.243-4................................................... 9000-0026
52.243-6................................................... 9000-0026
52.243-7................................................... 9000-0026
52.244-2................................................... 9000-0149
52.244-2(i)................................................ 9000-0132
52.245-1................................................... 9000-0075
52.245-9................................................... 9000-0075
52.246-2................................................... 9000-0077
52.246-3................................................... 9000-0077
52.246-4................................................... 9000-0077
52.246-5................................................... 9000-0077
52.246-6................................................... 9000-0077
52.246-7................................................... 9000-0077
52.246-8................................................... 9000-0077
52.246-12.................................................. 9000-0077
52.246-15.................................................. 9000-0077
52.246-26.................................................. 9000-0187
52.247-2................................................... 9000-0053
52.247-6................................................... 9000-0061
52.247-29.................................................. 9000-0061
52.247-30.................................................. 9000-0061
52.247-31.................................................. 9000-0061
52.247-32.................................................. 9000-0061
52.247-33.................................................. 9000-0061
52.247-34.................................................. 9000-0061
52.247-35.................................................. 9000-0061
52.247-36.................................................. 9000-0061
52.247-37.................................................. 9000-0061
52.247-38.................................................. 9000-0061
52.247-39.................................................. 9000-0061
52.247-40.................................................. 9000-0061
52.247-41.................................................. 9000-0061
52.247-42.................................................. 9000-0061
52.247-43.................................................. 9000-0061
52.247-44.................................................. 9000-0061
52.247-48.................................................. 9000-0061
52.247-51.................................................. 9000-0057
[[Page 12]]
52.247-52.................................................. 9000-0061
52.247-53.................................................. 9000-0055
52.247-57.................................................. 9000-0061
52.247-63.................................................. 9000-0054
52.247-64.................................................. 9000-0061
52.247-68.................................................. 9000-0056
52.248-1................................................... 9000-0027
52.248-2................................................... 9000-0027
52.248-3................................................... 9000-0027
52.249-2................................................... 9000-0028
52.249-3................................................... 9000-0028
52.249-5................................................... 9000-0028
52.249-6................................................... 9000-0028
52.250-1................................................... 9000-0029
52.251-2................................................... 9000-0032
SF 24...................................................... 9000-0045
SF 25...................................................... 9000-0045
SF 25-A.................................................... 9000-0045
SF 28...................................................... 9000-0001
SF 34...................................................... 9000-0045
SF 35...................................................... 9000-0045
SF 273..................................................... 9000-0045
SF 274..................................................... 9000-0045
SF 275..................................................... 9000-0045
SF 294..................................................... 9000-0006
SF 295..................................................... 9000-0007
SF 330..................................................... 9000-0157
SF 1403.................................................... 9000-0011
SF 1404.................................................... 9000-0011
SF 1405.................................................... 9000-0011
SF 1406.................................................... 9000-0011
SF 1407.................................................... 9000-0011
SF 1408.................................................... 9000-0011
SF 1413.................................................... 9000-0014
SF 1416.................................................... 9000-0045
SF 1418.................................................... 9000-0045
SF 1428.................................................... 9000-0075
SF 1429.................................................... 9000-0075
SF 1435.................................................... 9000-0012
SF 1436.................................................... 9000-0012
SF 1437.................................................... 9000-0012
SF 1438.................................................... 9000-0012
SF 1439.................................................... 9000-0012
SF 1440.................................................... 9000-0012
SF 1443.................................................... 9000-0010
SF 1444.................................................... 9000-0089
SF 1445.................................................... 9000-0089
SF 1446.................................................... 9000-0089
DD Form 254................................................ 0706-0567
------------------------------------------------------------------------
[59 FR 67065, Dec. 28, 1994. Redesignated at 60 FR 34733, 34736, July 3,
1995]
Editorial Note: For Federal Register citations affecting section
1.106, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.govinfo.gov.
1.107 Certifications.
In accordance with 41 U.S.C. 1304, a new requirement for a
certification by a contractor or offeror may not be included in this
chapter unless--
(a) The certification requirement is specifically imposed by
statute; or
(b) Written justification for such certification is provided to the
Administrator for Federal Procurement Policy by the Federal Acquisition
Regulatory Council, and the Administrator approves in writing the
inclusion of such certification requirement.
[62 FR 44813, Aug. 22, 1997, as amended at 79 FR 24194, Apr. 29, 2014]
1.108 FAR conventions.
The following conventions provide guidance for interpreting the FAR:
(a) Words and terms. Definitions in Part 2 apply to the entire
regulation unless specifically defined in another part, subpart,
section, provision, or clause. Words or terms defined in a specific
part, subpart, section, provision, or clause have that meaning when used
in that part, subpart, section, provision, or clause. Undefined words
retain their common dictionary meaning.
(b) Delegation of authority. Each authority is delegable unless
specifically stated otherwise (see 1.102-4(b)).
(c) Dollar thresholds. Unless otherwise specified, a specific dollar
threshold for the purpose of applicability is the final anticipated
dollar value of the action, including the dollar value of all options.
If the action establishes a maximum quantity of supplies or services to
be acquired or establishes a ceiling price or establishes the final
price to be based on future events, the final anticipated dollar value
must be the highest final priced alternative to the Government,
including the dollar value of all options.
(d) Application of FAR changes to solicitations and contracts.
Unless otherwise specified--
(1) FAR changes apply to solicitations issued on or after the
effective date of the change;
(2) Contracting officers may, at their discretion, include the FAR
changes in solicitations issued before the effective date, provided
award of the resulting contract(s) occurs on or after the effective
date; and
(3) Contracting officers may, at their discretion, include the
changes in any existing contract with appropriate consideration.
(e) Citations. When the FAR cites a statute, Executive order, Office
of Management and Budget circular, Office of Federal Procurement Policy
policy letter, or relevant portion of the
[[Page 13]]
Code of Federal Regulations, the citation includes all applicable
amendments, unless otherwise stated.
(f) Imperative sentences. When an imperative sentence directs
action, the contracting officer is responsible for the action, unless
another party is expressly cited.
[65 FR 36015, June 6, 2000]
1.109 Statutory acquisition-related dollar thresholds--adjustment
for inflation.
(a) 41 U.S.C. 1908 requires that the FAR Council periodically adjust
all statutory acquisition-related dollar thresholds in the FAR for
inflation, except as provided in paragraph (c) of this section. This
adjustment is calculated every 5 years, starting in October 2005, using
the Consumer Price Index for All Urban Consumers (CPI-U), and supersedes
the applicability of any other provision of law that provides for the
adjustment of such acquisition-related dollar thresholds.
(b) The statute defines an acquisition-related dollar threshold as a
dollar threshold that is specified in law as a factor in defining the
scope of the applicability of a policy, procedure, requirement, or
restriction provided in that law to the procurement of supplies or
services by an executive agency, as determined by the FAR Council.
(c) The statute does not permit escalation of acquisition-related
dollar thresholds established by:
(1) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements
(Construction);
(2) 41 U.S.C. chapter 67, Service Contract Labor Standards; or
(3) The United States Trade Representative pursuant to the authority
of the Trade Agreements Act of 1979 (19 U.S.C. 2511 et seq.).
(d) The statute, as amended by section 821 of the National Defense
Authorization Act for Fiscal Year 2018 (Pub. L. 115-91), requires the
adjustment described in paragraph (a) of this section be applied to
contracts and subcontracts without regard to the date of award of the
contract or subcontract. Therefore, if a threshold is adjusted for
inflation as set forth in paragraph (a) of this section, then the
changed threshold applies throughout the remaining term of the contract,
unless there is a subsequent threshold adjustment.
(e) A matrix showing calculation of the most recent escalation
adjustments of statutory acquisition-related dollar thresholds is
available via the Internet at http://www.regulations.gov (search FAR
case 2019-013, open the docket folder, and go to the supporting
documents file).
[71 FR 57365, Sept. 28, 2006, as amended at 75 FR 53131, Aug. 30, 2010;
79 FR 24194, Apr. 29, 2014; 80 FR 38295, July 2, 2015; 85 FR 27089, May
6, 2020; 85 FR 62487, Oct. 2, 2020]
1.110 Positive law codification.
(a) Public Law 107-217 revised, codified, and enacted as title 40,
United States Code, Public Buildings, Property, and Works, certain
general and permanent laws of the United States.
(b) Public Law 111-350 revised, codified, and enacted as title 41,
United States Code, Public Contracts, certain general and permanent laws
of the United States.
(c) The following table provides cross references between the
historical titles of the acts, and the current reference in title 40 or
title 41.
Table 1 to Paragraph (c)
------------------------------------------------------------------------
Division/chapter/
Historical title of act subchapter Title
------------------------------------------------------------------------
Anti-Kickback Act............. 41 U.S.C. chapter Kickbacks.
87.
Brooks Architect-Engineer Act. 40 U.S.C. chapter Selection of
11. Architects and
Engineers.
Buy American Act.............. 41 U.S.C. chapter Buy American.
83.
Contract Disputes Act of 1978. 41 U.S.C. chapter Contract Disputes.
71.
Contract Work Hours and Safety 40 U.S.C. chapter Contract Work Hours
Standards Act. 37. and Safety
Standards.
Davis-Bacon Act............... 40 U.S.C. chapter Wage Rate
31, Subchapter Requirements
IV. (Construction).
Drug-Free Workplace Act....... 41 U.S.C. chapter Drug-Free Workplace.
81.
Federal Property and 41 U.S.C. Div. C Procurement.
Administrative Services Act of subtitle I
of 1949, Title III. \1\.
[[Page 14]]
Javits-Wagner-O'Day Act....... 41 U.S.C. chapter Committee for
85. Purchase from People
Who Are Blind or
Severely Disabled.
Miller Act.................... 40 U.S.C. chapter Bonds.
31, subchapter
III.
Office of Federal Procurement 41 U.S.C. Div. B Office of Federal
Policy Act. of subtitle I Procurement Policy.
\2\.
Procurement Integrity Act..... 41 U.S.C. chapter Restrictions on
21. Obtaining and
Disclosing Certain
Information.
Service Contract Act of 1965.. 41 U.S.C. chapter Service Contract
67. Labor Standards.
Truth in Negotiations Act..... 41 U.S.C. chapter Truthful Cost or
35. Pricing Data.
Walsh-Healey Public Contracts 41 U.S.C. chapter Contracts for
Act. 65. Materials, Supplies,
Articles, and
Equipment Exceeding
$10,000.
------------------------------------------------------------------------
\1\ Except sections 3302, 3501(b), 3509, 3906, 4710, and 4711.
\2\ Except sections 1704 and 2303.
[79 FR 24194, Apr. 29, 2014, as amended at 85 FR 27089, May 6, 2020]
Subpart 1.2_Administration
1.201 Maintenance of the FAR.
1.201-1 The two councils.
(a) Subject to the authorities discussed in 1.103, revisions to the
FAR will be prepared and issued through the coordinated action of two
councils, the Defense Acquisition Regulations Council (DAR Council) and
the Civilian Agency Acquisition Council (CAA Council). Members of these
councils shall--
(1) Represent their agencies on a full-time basis;
(2) Be selected for their superior qualifications in terms of
acquisition experience and demonstrated professional expertise; and
(3) Be funded by their respective agencies.
(b) The chairperson of the CAA Council shall be the representative
of the Administrator of General Services. The other members of this
council shall be one each representative from the--
(1) Departments of Agriculture, Commerce, Education, Energy, Health
and Human Services, Homeland Security, Housing and Urban Development,
Interior, Justice, Labor, State, Transportation, Treasury, and Veterans
Affairs; and
(2) Environmental Protection Agency, National Aeronautics and Space
Administration, Social Security Administration, Small Business
Administration, and U.S. Agency for International Development.
(c) The Director of the DAR Council shall be the representative of
the Secretary of Defense. The operation of the DAR Council will be as
prescribed by the Secretary of Defense. Membership shall include
representatives of the military departments, the Defense Logistics
Agency and the Defense Contract Management Agency.
(d) Responsibility for processing revisions to the FAR is
apportioned by the two councils so that each council has cognizance over
specified parts or subparts.
(e) Each council shall be responsible for--
(1) Agreeing on all revisions with the other council;
(2) Submitting to the FAR Secretariat (see 1.201-2) the information
required under paragraphs 1.501-2(b) and (e) for publication in the
Federal Register of a notice soliciting comments on a proposed revision
to the FAR;
(3) Considering all comments received in response to notice of
proposed revisions;
(4) Arranging for public meetings;
(5) Preparing any final revision in the appropriate FAR format and
language; and
(6) Submitting any final revision to the FAR Secretariat for
publication in the Federal Register.
[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985;
50 FR 26903, June 28, 1985; 51 FR 2649, Jan. 17, 1986; 54 FR 29280, July
11, 1989; 62 FR 64940, Dec. 9, 1997; 63 FR 9069, Feb. 23, 1998; 65 FR
16286, Mar. 27, 2000; 68 FR 69258, Dec. 11, 2003; 77 FR 23370, Apr. 18,
2012; 84 FR 19839, May 6, 2019; 84 FR 38838, Aug. 7, 2019; 85 FR 67614,
Oct. 23, 2020]
[[Page 15]]
1.201-2 FAR Secretariat.
(a) The General Services Administration is responsible for
establishing and operating the FAR Secretariat to publish and distribute
the FAR through the Code of Federal Regulations system (including a
separate online edition with periodic updates).
(b) Additionally, the FAR Secretariat shall provide the two councils
with centralized services for--
(1) Keeping a synopsis of current FAR cases and their status;
(2) Maintaining official files;
(3) Assisting parties interested in reviewing the files on completed
cases; and
(4) Performing miscellaneous administrative tasks pertaining to the
maintenance of the FAR.
[48 FR 42103, Sept. 19, 1983, as amended at 62 FR 40236, July 25, 1997;
85 FR 67614, Oct. 23, 2020]
1.202 Agency compliance with the FAR.
Agency compliance with the FAR (see 1.304) is the responsibility of
the Secretary of Defense (for the military departments and defense
agencies), the Administrator of General Services (for civilian agencies
other than NASA), and the Administrator of NASA (for NASA activities).
Subpart 1.3_Agency Acquisition Regulations
1.301 Policy.
(a)(1) Subject to the authorities in paragraph (c) below and other
statutory authority, an agency head may issue or authorize the issuance
of agency acquisition regulations that implement or supplement the FAR
and incorporate, together with the FAR, agency policies, procedures,
contract clauses, solicitation provisions, and forms that govern the
contracting process or otherwise control the relationship between the
agency, including any of its suborganizations, and contractors or
prospective contractors.
(2) Subject to the authorities in (c) below and other statutory
authority, an agency head may issue or authorize the issuance of
internal agency guidance at any organizational level (e.g., designations
and delegations of authority, assignments of responsibilities, work-flow
procedures, and internal reporting requirements).
(b) Agency heads shall establish procedures to ensure that agency
acquisition regulations are published for comment in the Federal
Register in conformance with the procedures in subpart 1.5 and as
required by 41 U.S.C. 1707, and other applicable statutes, when they
have a significant effect beyond the internal operating procedures of
the agency or have a significant cost or administrative impact on
contractors or offerors. However, publication is not required for
issuances that merely implement or supplement higher level issuances
that have previously undergone the public comment process, unless such
implementation or supplementation results in an additional significant
cost or administrative impact on contractors or offerors or effect
beyond the internal operating procedures of the issuing organization.
Issuances under 1.301(a)(2) need not be publicized for public comment.
(c) When adopting acquisition regulations, agencies shall ensure
that they comply with the Paperwork Reduction Act (44 U.S.C. 3501, et
seq.) as implemented in 5 CFR part 1320 (see 1.105) and the Regulatory
Flexibility Act (5 U.S.C. 601, et seq.). Normally, when a law requires
publication of a proposed regulation, the Regulatory Flexibility Act
applies and agencies must prepare written analyses or certifications as
provided in the law.
(d) Agency acquisition regulations implementing or supplementing the
FAR are, for--
(1) The military departments and defense agencies, issued subject to
the authority of the Secretary of Defense;
(2) NASA activities, issued subject to the authorities of the
Administrator of NASA; and
(3) The civilian agencies other than NASA, issued by the heads of
those agencies subject to the overall authority of the Administrator of
General Services or independent authority the agency may have.
[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985;
54 FR 5054, Jan. 31, 1989; 79 FR 24195, Apr. 29, 2014]
[[Page 16]]
1.302 Limitations.
Agency acquisition regulations shall be limited to--
(a) Those necessary to implement FAR policies and procedures within
the agency; and
(b) Additional policies, procedures, solicitation provisions, or
contract clauses that supplement the FAR to satisfy the specific needs
of the agency.
1.303 Publication and codification.
(a) Agency-wide acquisition regulations shall be published in the
Federal Register as required by law, shall be codified under an assigned
chapter in Title 48, Code of Federal Regulations, and shall parallel the
FAR in format, arrangement, and numbering system (but see 1.104-1(c)).
Coverage in an agency acquisition regulation that implements a specific
part, subpart, section, or subsection of the FAR shall be numbered and
titled to correspond to the appropriate FAR number and title.
Supplementary material for which there is no counterpart in the FAR
shall be codified using chapter, part, subpart, section, or subsection
numbers of 70 and up (e.g., for the Department of Interior, whose
assigned chapter number in Title 48 is 14, part 1470, subpart 1401.70,
section 1401.370, or subsection 1401.301-70.)
(b) Issuances under 1.301(a)(2) need not be published in the Federal
Register.
[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985]
1.304 Agency control and compliance procedures.
(a) Under the authorities of 1.301(d), agencies shall control and
limit issuance of agency acquisition regulations and, in particular,
local agency directives that restrain the flexibilities found in the
FAR, and shall establish formal procedures for the review of these
documents to assure compliance with this part 1.
(b) Agency acquisition regulations shall not--
(1) Unnecessarily repeat, paraphrase, or otherwise restate material
contained in the FAR or higher-level agency acquisition regulations; or
(2) Except as required by law or as provided in subpart 1.4,
conflict or be inconsistent with FAR content.
(c) Agencies shall evaluate all regulatory coverage in agency
acquisition regulations to determine if it could apply to other
agencies. Coverage that is not peculiar to one agency shall be
recommended for inclusion in the FAR.
[48 FR 42103, Sept. 19, 1983, as amended at 61 FR 39190, July 26, 1996;
65 FR 16286, Mar. 27, 2000]
Subpart 1.4_Deviations from the FAR
1.400 Scope of subpart.
This subpart prescribes the policies and procedures for authorizing
deviations from the FAR. Exceptions pertaining to the use of forms
prescribed by the FAR are covered in part 53 rather than in this
subpart.
1.401 Definition.
Deviation means any one or combination of the following:
(a) The issuance or use of a policy, procedure, solicitation
provision (see definition in 2.101), contract clause (see definition in
2.101), method, or practice of conducting acquisition actions of any
kind at any stage of the acquisition process that is inconsistent with
the FAR.
(b) The omission of any solicitation provision or contract clause
when its prescription requires its use.
(c) The use of any solicitation provision or contract clause with
modified or alternate language that is not authorized by the FAR (see
definition of ``modification'' in 52.101(a) and definition of
``alternate'' in 2.101(a)).
(d) The use of a solicitation provision or contract clause
prescribed by the FAR on a substantially as follows or substantially the
same as basis (see definitions in 2.101 and 52.101(a)), if such use is
inconsistent with the intent, principle, or substance of the
prescription or related coverage on the subject matter in the FAR.
(e) The authorization of lesser or greater limitations on the use of
any solicitation provision, contract clause, policy, or procedure
prescribed by the FAR.
[[Page 17]]
(f) The issuance of policies or procedures that govern the
contracting process or otherwise control contracting relationships that
are not incorporated into agency acquisition regulations in accordance
with 1.301(a).
[48 FR 42103, Sept. 19, 1983, as amended at 66 FR 2118, Jan. 10, 2001]
1.402 Policy.
Unless precluded by law, executive order, or regulation, deviations
from the FAR may be granted as specified in this subpart when necessary
to meet the specific needs and requirements of each agency. The
development and testing of new techniques and methods of acquisition
should not be stifled simply because such action would require a FAR
deviation. The fact that deviation authority is required should not, of
itself, deter agencies in their development and testing of new
techniques and acquisition methods. Refer to 31.101 for instructions
concerning deviations pertaining to the subject matter of part 31,
Contract Cost Principles and Procedures. Deviations are not authorized
with respect to 30.201-3 and 30.201-4, or the requirements of the Cost
Accounting Standards Board (CASB) rules and regulations (48 CFR chapter
99). Refer to 30.201-5 for instructions concerning waivers pertaining to
Cost Accounting Standards.
[48 FR 42103, Sept. 19, 1983, as amended at 52 FR 35612, Sept. 22, 1987;
62 FR 64914, Dec. 9, 1997; 85 FR 67614, Oct. 23, 2020]
1.403 Individual deviations.
Individual deviations affect only one contract action, and, unless
1.405(e) is applicable, may be authorized by the agency head. The
contracting officer must document the justification and agency approval
in the contract file.
[67 FR 13053, Mar. 20, 2002]
1.404 Class deviations.
Class deviations affect more than one contract action. When an
agency knows that it will require a class deviation on a permanent
basis, it should propose a FAR revision, if appropriate. Civilian
agencies, other than NASA, must furnish a copy of each approved class
deviation to the FAR Secretariat.
(a) For civilian agencies except NASA, class deviations may be
authorized by agency heads or their designees, unless 1.405(e) is
applicable. Delegation of this authority shall not be made below the
head of a contracting activity. Authorization of class deviations by
agency officials is subject to the following limitations:
(1) An agency official who may authorize a class deviation, before
doing so, shall consult with the chairperson of the Civilian Agency
Acquisition Council (CAA Council), unless that agency official
determines that urgency precludes such consultation.
(2) Recommended revisions to the FAR shall be transmitted to the FAR
Secretariat by agency heads or their designees for authorizing class
deviations.
(b) For DOD, class deviations shall be controlled, processed, and
approved in accordance with the Defense FAR Supplement.
(c) For NASA, class deviations shall be controlled and approved by
the Assistant Administrator for Procurement. Deviations shall be
processed in accordance with agency regulations.
[48 FR 42103, Sept. 19, 1983, as amended at 56 FR 15148, Apr. 15, 1991;
59 FR 11387, Mar. 10, 1994; 61 FR 67411, Dec. 20, 1996; 67 FR 13053,
13068, Mar. 20, 2002]
1.405 Deviations pertaining to treaties and executive agreements.
(a) Executive agreements, as used in this section, means Government-
to-Government agreements, including agreements with international
organizations, to which the United States is a party.
(b) Any deviation from the FAR required to comply with a treaty to
which the United States is a party is authorized, unless the deviation
would be inconsistent with FAR coverage based on a law enacted after the
execution of the treaty.
(c) Any deviation from the FAR required to comply with an executive
agreement is authorized unless the deviation would be inconsistent with
FAR coverage based on law.
(d) For civilian agencies other than NASA, a copy of the text
deviation authorized under paragraph (b) or (c) of this section shall be
transmitted to the
[[Page 18]]
FAR Secretariat through a central agency control point.
(e) For civilian agencies other than NASA, if a deviation required
to comply with a treaty or an executive agreement is not authorized by
paragraph (b) or (c) of this section, then the request for deviation
shall be processed through the FAR Secretariat to the Civilian Agency
Acquisition Council.
[48 FR 42103, Sept. 19, 1983, as amended at 61 FR 67411, Dec. 20, 1996]
Subpart 1.5_Agency and Public Participation
Source: 50 FR 2269, Jan. 15, 1985, unless otherwise noted.
1.501 Solicitation of agency and public views.
1.501-1 Definition.
Significant revisions, as used in this subpart, means revisions that
alter the substantive meaning of any coverage in the FAR System and
which have a significant cost or administrative impact on contractors or
offerors, or a significant effect beyond the internal operating
procedures of the issuing agency. This expression, for example, does not
include editorial, stylistic, or other revisions that have no impact on
the basic meaning of the coverage being revised.
[50 FR 2269, Jan. 15, 1985, as amended at 79 FR 24195, Apr. 29, 2014]
1.501-2 Opportunity for public comments.
(a) Views of agencies and nongovernmental parties or organizations
will be considered in formulating acquisition policies and procedures.
(b) The opportunity to submit written comments on proposed
significant revisions shall be provided by placing a notice in the
Federal Register. Each of these notices shall include--
(1) The text of the revision or, if it is impracticable to publish
the full text, a summary of the proposal;
(2) The address and telephone number of the individual from whom
copies of the revision, in full text, can be requested and to whom
comments thereon should be addressed; and
(3) When 1.501-3(b) is applicable, a statement that the revision is
effective on a temporary basis pending completion of the public comment
period.
(c) A minimum of 30 days and, normally, at least 60 days will be
given for the receipt of comments.
1.501-3 Exceptions.
(a) Comments need not be solicited when the proposed coverage does
not constitute a significant revision.
(b) Advance comments need not be solicited when urgent and
compelling circumstances make solicitation of comments impracticable
prior to the effective date of the coverage, such as when a new statute
must be implemented in a relatively short period of time. In such case,
the coverage shall be issued on a temporary basis and shall provide for
at least a 30 day public comment period.
1.502 Unsolicited proposed revisions.
Consideration shall also be given to unsolicited recommendations for
revisions that have been submitted in writing with sufficient data and
rationale to permit their evaluation.
1.503 Public meetings.
Public meetings may be appropriate when a decision to adopt, amend,
or delete coverage is likely to benefit from significant additional
views and discussion.
Subpart 1.6_Career Development, Contracting Authority, and
Responsibilities
1.601 General.
(a) Unless specifically prohibited by another provision of law,
authority and responsibility to contract for authorized supplies and
services are vested in the agency head. The agency head may establish
contracting activities and delegate broad authority to manage the
agency's contracting functions to heads of such contracting activities.
Contracts may be entered into and signed on behalf of the Government
only by contracting officers. In some agencies, a relatively small
number of high level officials are designated contracting officers
solely by virtue of
[[Page 19]]
their positions. Contracting officers below the level of a head of a
contracting activity shall be selected and appointed under 1.603.
(b) Agency heads may mutually agree to--
(1) Assign contracting functions and responsibilities from one
agency to another; and
(2) Create joint or combined offices to exercise acquisition
functions and responsibilities.
[60 FR 49721, Sept. 26, 1995]
1.602 Contracting officers.
1.602-1 Authority.
(a) Contracting officers have authority to enter into, administer,
or terminate contracts and make related determinations and findings.
Contracting officers may bind the Government only to the extent of the
authority delegated to them. Contracting officers shall receive from the
appointing authority (see 1.603-1) clear instructions in writing
regarding the limits of their authority. Information on the limits of
the contracting officers' authority shall be readily available to the
public and agency personnel.
(b) No contract shall be entered into unless the contracting officer
ensures that all requirements of law, executive orders, regulations, and
all other applicable procedures, including clearances and approvals,
have been met.
1.602-2 Responsibilities.
Contracting officers are responsible for ensuring performance of all
necessary actions for effective contracting, ensuring compliance with
the terms of the contract, and safeguarding the interests of the United
States in its contractual relationships. In order to perform these
responsibilities, contracting officers should be allowed wide latitude
to exercise business judgment. Contracting officers shall--
(a) Ensure that the requirements of 1.602-1(b) have been met, and
that sufficient funds are available for obligation;
(b) Ensure that contractors receive impartial, fair, and equitable
treatment;
(c) Request and consider the advice of specialists in audit, law,
engineering, information security, transportation, and other fields, as
appropriate; and
(d) Designate and authorize, in writing and in accordance with
agency procedures, a contracting officer's representative (COR) on all
contracts and orders other than those that are firm-fixed price, and for
firm-fixed-price contracts and orders as appropriate, unless the
contracting officer retains and executes the COR duties. See 7.104(e). A
COR--
(1) Shall be a Government employee, unless otherwise authorized in
agency regulations;
(2) Shall be certified and maintain certification in accordance with
the current Office of Management and Budget memorandum on the Federal
Acquisition Certification for Contracting Officer Representatives (FAC-
COR) guidance, or for DoD, in accordance with the current applicable DoD
policy guidance;
(3) Shall be qualified by training and experience commensurate with
the responsibilities to be delegated in accordance with agency
procedures;
(4) May not be delegated responsibility to perform functions that
have been delegated under 42.202 to a contract administration office,
but may be assigned some duties at 42.302 by the contracting officer;
(5) Has no authority to make any commitments or changes that affect
price, quality, quantity, delivery, or other terms and conditions of the
contract nor in any way direct the contractor or its subcontractors to
operate in conflict with the contract terms and conditions;
(6) Shall be nominated either by the requiring activity or in
accordance with agency procedures; and
(7) Shall be designated in writing, with copies furnished to 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
[[Page 20]]
(v) Stating that the COR may be personally liable for unauthorized
acts.
[48 FR 42103, Sept. 19, 1983, as amended at 70 FR 57451, Sept. 30, 2005;
76 FR 14545, Mar. 16, 2011; 77 FR 12926, Mar. 2, 2012; 78 FR 37676, June
21, 2013]
1.602-3 Ratification of unauthorized commitments.
(a) Definitions.
Ratification, as used in this subsection, means the act of approving
an unauthorized commitment by an official who has the authority to do
so.
Unauthorized commitment, as used in this subsection, means an
agreement that is not binding solely because the Government
representative who made it lacked the authority to enter into that
agreement on behalf of the Government.
(b) Policy. (1) Agencies should take positive action to preclude, to
the maximum extent possible, the need for ratification actions. Although
procedures are provided in this section for use in those cases where the
ratification of an unauthorized commitment is necessary, these
procedures may not be used in a manner that encourages such commitments
being made by Government personnel.
(2) Subject to the limitations in paragraph (c) of this subsection,
the head of the contracting activity, unless a higher level official is
designated by the agency, may ratify an unauthorized commitment.
(3) The ratification authority in subparagraph (b)(2) of this
subsection may be delegated in accordance with agency procedures, but in
no case shall the authority be delegated below the level of chief of the
contracting office.
(4) Agencies should process unauthorized commitments using the
ratification authority of this subsection instead of referring such
actions to the Government Accountability Office for resolution. (See
1.602-3(d).)
(5) Unauthorized commitments that would involve claims subject to
resolution under 41 U.S.C. chapter 71, Contract Disputes, should be
processed in accordance with subpart 33.2, Disputes and Appeals.
(c) Limitations. The authority in subparagraph (b)(2) of this
subsection may be exercised only when--
(1) Supplies or services have been provided to and accepted by the
Government, or the Government otherwise has obtained or will obtain a
benefit resulting from performance of the unauthorized commitment;
(2) The ratifying official has the authority to enter into a
contractual commitment;
(3) The resulting contract would otherwise have been proper if made
by an appropriate contracting officer;
(4) The contracting officer reviewing the unauthorized commitment
determines the price to be fair and reasonable;
(5) The contracting officer recommends payment and legal counsel
concurs in the recommendation, unless agency procedures expressly do not
require such concurrence;
(6) Funds are available and were available at the time the
unauthorized commitment was made; and
(7) The ratification is in accordance with any other limitations
prescribed under agency procedures.
(d) Nonratifiable commitments. Cases that are not ratifiable under
this subsection may be subject to resolution as recommended by the
Government Accountability Office under its claim procedure (GAO Policy
and Procedures Manual for Guidance of Federal Agencies, Title 4, Chapter
2), or as authorized by FAR Subpart 50.1. Legal advice should be
obtained in these cases.
[53 FR 3689, Feb. 8, 1988, as amended at 60 FR 48225, Sept. 18, 1995; 71
FR 57380, Sept. 28, 2006, 72 FR 63029, Nov. 7, 2007; 79 FR 24195, Apr.
29, 2014]
1.603 Selection, appointment, and termination of appointment
for contracting officers.
1.603-1 General.
41 U.S.C. 1702(b)(3)(G), requires agency heads to establish and
maintain a procurement career management program and a system for the
selection, appointment, and termination of appointment of contracting
officers. Agency heads or their designees may select and appoint
contracting officers and terminate their appointments. These selections
and appointments shall be consistent with Office of Federal Procurement
Policy's (OFPP)
[[Page 21]]
standards for skill-based training in performing contracting and
purchasing duties as published in OFPP Policy Letter No. 05-01,
Developing and Managing the Acquisition Workforce, April 15, 2005.
[59 FR 67015, Dec. 28, 1994, as amended at 73 FR 21800, Apr. 22, 2008;
79 FR 24195, Apr. 29, 2014; 81 FR 67781, Sept. 30, 2016]
1.603-2 Selection.
In selecting contracting officers, the appointing official shall
consider the complexity and dollar value of the acquisitions to be
assigned and the candidate's experience, training, education, business
acumen, judgment, character, and reputation. Examples of selection
criteria include--
(a) Experience in Government contracting and administration,
commercial purchasing, or related fields;
(b) Education or special training in business administration, law,
accounting, engineering, or related fields;
(c) Knowledge of acquisition policies and procedures, including this
and other applicable regulations;
(d) Specialized knowledge in the particular assigned field of
contracting; and
(e) Satisfactory completion of acquisition training courses.
1.603-3 Appointment.
(a) Contracting officers shall be appointed in writing on an SF
1402, Certificate of Appointment, which shall state any limitations on
the scope of authority to be exercised, other than limitations contained
in applicable law or regulation. Appointing officials shall maintain
files containing copies of all appointments that have not been
terminated.
(b) Agency heads are encouraged to delegate micro-purchase authority
to individuals who are employees of an executive agency or members of
the Armed Forces of the United States who will be using the supplies or
services being purchased. Individuals delegated this authority are not
required to be appointed on an SF 1402, but shall be appointed in
writing in accordance with agency procedures.
[61 FR 39190, July 26, 1996]
1.603-4 Termination.
Termination of a contracting officer appointment will be by letter,
unless the Certificate of Appointment contains other provisions for
automatic termination. Terminations may be for reasons such as
reassignment, termination of employment, or unsatisfactory performance.
No termination shall operate retroactively.
1.604 Contracting Officer's Representative (COR).
A contracting officer's representative (COR) assists in the
technical monitoring or administration of a contract (see 1.602-2(d)).
The COR shall maintain a file for each assigned contract. The file must
include, at a minimum--
(a) A copy of the contracting officer's letter of designation and
other documents describing the COR's duties and responsibilities;
(b) A copy of the contract administration functions delegated to a
contract administration office which may not be delegated to the COR
(see 1.602-2(d)(4)); and
(c) Documentation of COR actions taken in accordance with the
delegation of authority.
[76 FR 14545, Mar. 16, 2011]
Subpart 1.7_Determinations and Findings
Source: 50 FR 1726, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985,
unless otherwise noted.
1.700 Scope of subpart.
This subpart prescribes general policies and procedures for the use
of determinations and findings (D&F's). Requirements for specific types
of D&F's can be found with the appropriate subject matter.
1.701 Definition.
Determination and Findings (D&F) means a special form of written
approval by an authorized official that is required by statute or
regulation as a prerequisite to taking certain contract actions. The
determination is a conclusion or decision supported by the findings. The
findings are statements of fact or rationale essential to support the
determination and must cover each
[[Page 22]]
requirement of the statute or regulation.
[50 FR 1726, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985, as amended
at 67 FR 13053, Mar. 20, 2002]
1.702 General.
(a) A D&F shall ordinarily be for an individual contract action.
Unless otherwise prohibited, class D&F's may be executed for classes of
contract action (see 1.703). The approval granted by a D&F is restricted
to the proposed contract action(s) reasonably described in that D&F.
D&F's may provided for a reasonable degree of flexibility. Furthermore,
in their application, reasonable variations in estimated quantities or
prices are permitted, unless the D&F specifies otherwise.
(b) When an option is anticipated, the D&F shall state the
approximate quantity to be awarded initially and the extent of the
increase to be permitted by the option.
1.703 Class determinations and findings.
(a) A class D&F provides authority for a class of contract actions.
A class may consist of contract actions for the same or related supplies
or services or other contract actions that require essentially identical
justification.
(b) The findings in a class D&F shall fully support the proposed
action either for the class as a whole or for each action. A class D&F
shall be for a specified period, with the expiration date stated in the
document.
(c) The contracting officer shall ensure that individual actions
taken pursuant to the authority of a class D&F are within the scope of
the D&F.
[50 FR 1726, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985 , as amended
at 67 FR 13053, Mar. 20, 2002]
1.704 Content.
Each D&F shall set forth enough facts and circumstances to clearly
and convincingly justify the specific determination made. As a minimum,
each D&F shall include, in the prescribed agency format, the following
information:
(a) Identification of the agency and of the contracting activity and
specific identifications of the document as a Determination and
Findings.
(b) Nature and/or description of the action being approved.
(c) Citation of the appropriate statute and/or regulation upon which
the D&F is based.
(d) Findings that detail the particular circumstances, facts, or
reasoning essential to support the determination. Necessary supporting
documentation shall be obtained from appropriate requirements and
technical personnel.
(e) A determination, based on the findings, that the proposed action
is justified under the applicable statute or regulation.
(f) Expiration date of the D&F, if required (see 1.706(b)).
(g) The signature of the official authorized to sign the D&F (see
1.706) and the date signed.
1.705 Supersession and modification.
(a) If a D&F is superseded by another D&F, that action shall not
render invalid any action taken under the original D&F prior to the date
of its supersession.
(b) The contracting officer need not cancel the solicitation if the
D&F, as modified, supports the contract action.
[50 FR 1726, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985, as amended
at 67 FR 13053, Mar. 20, 2002]
1.706 Expiration.
Expiration dates are required for class D&F's and are optional for
individual D&F's. Authority to act under an individual D&F expires when
it is exercised or on an expiration date specified in the document,
whichever occurs first. Authority to act under a class D&F expires on
the expiration date specified in the document. When a solicitation has
been furnished to prospective offerors before the expiration date, the
authority under the D&F will continue until award of the contract(s)
resulting from that solicitation.
1.707 Signatory authority.
When a D&F is required, it shall be signed by the appropriate
official in accordance with agency regulations. Authority to sign or
delegate signature
[[Page 23]]
authority for the various D&F's is as shown in the applicable FAR part.
PART 2_DEFINITIONS OF WORDS AND TERMS--Table of Contents
Sec.
2.000 Scope of part.
Subpart 2.1_Definitions
2.101 Definitions.
Subpart 2.2_Definitions Clause
2.201 Contract clause.
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C.
20113.
Source: 48 FR 42107, Sept. 19, 1983, unless otherwise noted.
2.000 Scope of part.
(a) This part--
(1) Defines words and terms that are frequently used in the FAR;
(2) Provides cross-references to other definitions in the FAR of the
same word or term; and
(3) Provides for the incorporation of these definitions in
solicitations and contracts by reference.
(b) Other parts, subparts, and sections of this regulation (48 CFR
chapter 1) may define other words or terms and those definitions only
apply to the part, subpart, or section where the word or term is
defined.
[66 FR 2118, Jan. 10, 2001, as amended at 78 FR 6191, Jan. 29, 2013]
Subpart 2.1_Definitions
2.101 Definitions.
(a) A word or a term, defined in this section, has the same meaning
throughout this regulation (48 CFR chapter 1), unless--
(1) The context in which the word or term is used clearly requires a
different meaning; or
(2) Another FAR part, subpart, or section provides a different
definition for the particular part or portion of the part.
(b) If a word or term that is defined in this section is defined
differently in another part, subpart, or section of this regulation (48
CFR chapter 1), the definition in--
(1) This section includes a cross-reference to the other
definitions; and
(2) That part, subpart, or section applies to the word or term when
used in that part, subpart, or section.
Acquisition means the acquiring by contract with appropriated funds
of supplies or services (including construction) by and for the use of
the Federal Government through purchase or lease, whether the supplies
or services are already in existence or must be created, developed,
demonstrated, and evaluated. Acquisition begins at the point when agency
needs are established and includes the description of requirements to
satisfy agency needs, solicitation and selection of sources, award of
contracts, contract financing, contract performance, contract
administration, and those technical and management functions directly
related to the process of fulfilling agency needs by contract.
Acquisition planning means the process by which the efforts of all
personnel responsible for an acquisition are coordinated and integrated
through a comprehensive plan for fulfilling the agency need in a timely
manner and at a reasonable cost. It includes developing the overall
strategy for managing the acquisition.
Activity Address Code (AAC) means a distinct six-position code
consisting of a combination of alpha and/or numeric characters assigned
to identify specific agency offices, units, activities, or organizations
by the General Services Administration for civilian agencies and by the
Department of Defense for defense agencies.
Adequate evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.
Advisory and assistance services means those services provided under
contract by nongovernmental sources to support or improve:
organizational policy development; decision-making; management and
administration; program and/or project management and administration; or
R&D activities. It can also mean the furnishing of professional advice
or assistance rendered to improve
[[Page 24]]
the effectiveness of Federal management processes or procedures
(including those of an engineering and technical nature). In rendering
the foregoing services, outputs may take the form of information,
advice, opinions, alternatives, analyses, evaluations, recommendations,
training and the day-to-day aid of support personnel needed for the
successful performance of ongoing Federal operations. All advisory and
assistance services are classified in one of the following definitional
subdivisions:
(1) Management and professional support services, i.e., contractual
services that provide assistance, advice or training for the efficient
and effective management and operation of organizations, activities
(including management and support services for R&D activities), or
systems. These services are normally closely related to the basic
responsibilities and mission of the agency originating the requirement
for the acquisition of services by contract. Included are efforts that
support or contribute to improved organization of program management,
logistics management, project monitoring and reporting, data collection,
budgeting, accounting, performance auditing, and administrative
technical support for conferences and training programs.
(2) Studies, analyses and evaluations, i.e., contracted services
that provide organized, analytical assessments/evaluations in support of
policy development, decision-making, management, or administration.
Included are studies in support of R&D activities. Also included are
acquisitions of models, methodologies, and related software supporting
studies, analyses or evaluations.
(3) Engineering and technical services, i.e., contractual services
used to support the program office during the acquisition cycle by
providing such services as systems engineering and technical direction
(see 9.505-1(b)) to ensure the effective operation and maintenance of a
weapon system or major system as defined in OMB Circular No. A-109 or to
provide direct support of a weapon system that is essential to research,
development, production, operation or maintenance of the system.
Affiliates means associated business concerns or individuals if,
directly or indirectly either one controls or can control the other; or
third party controls or can control both, except as follows:
(1) For use in subpart 9.4, see the definition at 9.403.
(2) For use of affiliates in size determinations, see the definition
of ``small business concern'' in this section.
Agency head or head of the agency means the Secretary, Attorney
General, Administrator, Governor, Chairperson, or other chief official
of an executive agency, unless otherwise indicated, including any deputy
or assistant chief official of an executive agency.
Alternate means a substantive variation of a basic provision or
clause prescribed for use in a defined circumstance. It adds wording to,
deletes wording from, or substitutes specified wording for a portion of
the basic provision or clause. The alternate version of a provision or
clause is the basic provision or clause as changed by the addition,
deletion, or substitution (see 52.105(a)).
Architect-engineer services, as defined in 40 U.S.C. 1102, means--
(1) Professional services of an architectural or engineering nature,
as defined by State law, if applicable, that are required to be
performed or approved by a person licensed, registered, or certified to
provide those services;
(2) Professional services of an architectural or engineering nature
performed by contract that are associated with research, planning,
development, design, construction, alteration, or repair of real
property; and
(3) Those other professional services of an architectural or
engineering nature, or incidental services, that members of the
architectural and engineering professions (and individuals in their
employ) may logically or justifiably perform, including studies,
investigations, surveying and mapping, tests, evaluations,
consultations, comprehensive planning, program management, conceptual
designs, plans and specifications, value engineering, construction phase
services, soils engineering, drawing reviews, preparation
[[Page 25]]
of operating and maintenance manuals, and other related services.
Assignment of claims means the transfer or making over by the
contractor to a bank, trust company, or other financing institution, as
security for a loan to the contractor, of its right to be paid by the
Government for contract performance.
Assisted acquisition means a type of interagency acquisition where a
servicing agency performs acquisition activities on a requesting
agency's behalf, such as awarding and administering a contract, task
order, or delivery order.
Basic research means that research directed toward increasing
knowledge in science. The primary aim of basic research is a fuller
knowledge or understanding of the subject under study, rather than any
practical application of that knowledge.
Best value means the expected outcome of an acquisition that, in the
Government's estimation, provides the greatest overall benefit in
response to the requirement.
Bid sample means a product sample required to be submitted by an
offeror to show characteristics of the offered products that cannot
adequately be described by specifications, purchase descriptions, or the
solicitation (e.g., balance, facility of use, or pattern).
Biobased product means a product determined by the U.S. Department
of Agriculture to be a commercial product or industrial product (other
than food or feed) that is composed, in whole or in significant part, of
biological products, including renewable domestic agricultural materials
and forestry materials.
Broad agency announcement means a general announcement of an
agency's research interest including criteria for selecting proposals
and soliciting the participation of all offerors capable of satisfying
the Government's needs (see 6.102(d)(2)).
Building or work means construction activity as distinguished from
manufacturing, furnishing of materials, or servicing and maintenance
work. The terms include, without limitation, buildings, structures, and
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines, pumping
stations, heavy generators, railways, airports, terminals, docks, piers,
wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals,
dredging, shoring, rehabilitation and reactivation of plants,
scaffolding, drilling, blasting, excavating, clearing, and landscaping.
The manufacture or furnishing of materials, articles, supplies, or
equipment (whether or not a Federal or State agency acquires title to
such materials, articles, supplies, or equipment during the course of
the manufacture or furnishing, or owns the materials from which they are
manufactured or furnished) is not ``building'' or ``work'' within the
meaning of this definition unless conducted in connection with and at
the site of such building or work as is described in the foregoing
sentence, or under the United States Housing Act of 1937 and the Housing
Act of 1949 in the construction or development of the project.
Bundling--
(1) Means a subset of consolidation that combines two or more
requirements for supplies or services, previously provided or performed
under separate smaller contracts (see paragraph (2) of this definition),
into a solicitation for a single contract, a multiple-award contract, or
a task or delivery order that is likely to be unsuitable for award to a
small business concern (even if it is suitable for award to a small
business with a Small Business Teaming Arrangement) due to--
(i) The diversity, size, or specialized nature of the elements of
the performance specified;
(ii) The aggregate dollar value of the anticipated award;
(iii) The geographical dispersion of the contract performance sites;
or
(iv) Any combination of the factors described in paragraphs (1)(i),
(ii), and (iii) of this definition.
(2) ``Separate smaller contract'' as used in this definition, means
a contract that has been performed by one or more small business
concerns or that was suitable for award to one or more small business
concerns.
Business unit means any segment of an organization, or an entire
business
[[Page 26]]
organization that is not divided into segments.
Certified cost or pricing data means ``cost or pricing data'' that
were required to be submitted in accordance with FAR 15.403-4 and
15.403-5 and have been certified, or are required to be certified, in
accordance with 15.406-2. This certification states that, to the best of
the person's knowledge and belief, the cost or pricing data are
accurate, complete, and current as of a date certain before contract
award. Cost or pricing data are required to be certified in certain
procurements (10 U.S.C. 2306a and 41 U.S.C. chapter 35).
Change-of-name agreement means a legal instrument executed by the
contractor and the Government that recognizes the legal change of name
of the contractor without disturbing the original contractual rights and
obligations of the parties.
Change order means a written order, signed by the contracting
officer, directing the contractor to make a change that the Changes
clause authorizes the contracting officer to order without the
contractor's consent.
Chief Acquisition Officer means an executive level acquisition
official responsible for agency performance of acquisition activities
and acquisition programs created pursuant to 41 U.S.C. 1702.
Chief of mission means the principal officer in charge of a
diplomatic mission of the United States or of a United States office
abroad which is designated by the Secretary of State as diplomatic in
nature, including any individual assigned under section 502(c) of the
Foreign Service Act of 1980 (Public Law 96-465) to be temporarily in
charge of such a mission or office.
Claim means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money
in a sum certain, the adjustment or interpretation of contract terms, or
other relief arising under or relating to the contract. However, a
written demand or written assertion by the contractor seeking the
payment of money exceeding $100,000 is not a claim under 41 U.S.C.
chapter 71, Contract Disputes, until certified as required by the
statute. A voucher, invoice, or other routine request for payment that
is not in dispute when submitted is not a claim. The submission may be
converted to a claim, by written notice to the contracting officer as
provided in 33.206(a), if it is disputed either as to liability or
amount or is not acted upon in a reasonable time.
Classified acquisition means an acquisition in which offerors must
have access to classified information to properly submit an offer or
quotation, to understand the performance requirements, or to perform the
contract.
Classified contract means any contract in which the contractor or
its employees must have access to classified information during contract
performance. A contract may be a classified contract even though the
contract document itself is unclassified.
Classified information means any knowledge that can be communicated
or any documentary material, regardless of its physical form or
characteristics, that--
(1)(i) Is owned by, is produced by or for, or is under the control
of the United States Government; or
(ii) Has been classified by the Department of Energy as privately
generated restricted data following the procedures in 10 CFR 1045.21;
and
(2) Must be protected against unauthorized disclosure according to
Executive Order 12958, Classified National Security Information, April
17, 1995, or classified in accordance with the Atomic Energy Act of
1954.
Cognizant Federal agency means the Federal agency that, on behalf of
all Federal agencies, is responsible for establishing final indirect
cost rates and forward pricing rates, if applicable, and administering
cost accounting standards for all contracts in a business unit.
Combatant commander means the commander of a unified or specified
combatant command established in accordance with 10 U.S.C. 161.
Commercial and Government Entity (CAGE) code means--
(1) An identifier assigned to entities located in the United States
or its outlying areas by the Defense Logistics Agency (DLA) Commercial
and Government Entity (CAGE) Branch to identify
[[Page 27]]
a commercial or government entity by unique location; or
(2) An identifier assigned by a member of the North Atlantic Treaty
Organization (NATO) or by the NATO Support and Procurement Agency (NSPA)
to entities located outside the United States and its outlying areas
that the DLA Commercial and Government Entity (CAGE) Branch records and
maintains in the CAGE master file. This type of code is known as a NATO
CAGE (NCAGE) code.
Commercial component means any component that is a commercial
product.
Commercial computer software means any computer software that is a
commercial product or commercial service.
Commercial product means--
(1) A product, other than real property, that is of a type
customarily used by the general public or by nongovernmental entities
for purposes other than governmental purposes, and--
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general
public;
(2) A product that evolved from a product described in paragraph (1)
of this definition through advances in technology or performance and
that is not yet available in the commercial marketplace, but will be
available in the commercial marketplace in time to satisfy the delivery
requirements under a Government solicitation;
(3) A product that would satisfy a criterion expressed in paragraph
(1) or (2) of this definition, except for--
(i) Modifications of a type customarily available in the commercial
marketplace; or
(ii) Minor modifications of a type not customarily available in the
commercial marketplace made to meet Federal Government requirements.
``Minor modifications'' means modifications that do not significantly
alter the nongovernmental function or essential physical characteristics
of an item or component, or change the purpose of a process. Factors to
be considered in determining whether a modification is minor include the
value and size of the modification and the comparative value and size of
the final product. Dollar values and percentages may be used as
guideposts, but are not conclusive evidence that a modification is
minor;
(4) Any combination of products meeting the requirements of
paragraph (1), (2), or (3) of this definition that are of a type
customarily combined and sold in combination to the general public;
(5) A product, or combination of products, referred to in paragraphs
(1) through (4) of this definition, even though the product, or
combination of products, is transferred between or among separate
divisions, subsidiaries, or affiliates of a contractor; or
(6) A nondevelopmental item, if the procuring agency determines the
product was developed exclusively at private expense and sold in
substantial quantities, on a competitive basis, to multiple State and
local governments or to multiple foreign governments.
Commercial service means--
(1) Installation services, maintenance services, repair services,
training services, and other services if--
(i) Such services are procured for support of a commercial product
as defined in this section, regardless of whether such services are
provided by the same source or at the same time as the commercial
product; and
(ii) The source of such services provides similar services
contemporaneously to the general public under terms and conditions
similar to those offered to the Federal Government;
(2) Services of a type offered and sold competitively in substantial
quantities in the commercial marketplace based on established catalog or
market prices for specific tasks performed or specific outcomes to be
achieved and under standard commercial terms and conditions. For
purposes of these services--
(i) Catalog price means a price included in a catalog, price list,
schedule, or other form that is regularly maintained by the manufacturer
or vendor, is either published or otherwise available for inspection by
customers, and states prices at which sales are currently, or were last,
made to a significant number of buyers constituting the general public;
and
(ii) Market prices means current prices that are established in the
course of ordinary trade between buyers and sellers free to bargain and
that
[[Page 28]]
can be substantiated through competition or from sources independent of
the offerors; or
(3) A service referred to in paragraph (1) or (2) of this
definition, even though the service is transferred between or among
separate divisions, subsidiaries, or affiliates of a contractor.
Commercially available off-the-shelf (COTS) item-- (1) Means any
item of supply (including construction material) that is--
(i) A commercial product (as defined in paragraph (1) of the
definition of ``commercial product'' in this section);
(ii) Sold in substantial quantities in the commercial marketplace;
and
(iii) Offered to the Government, under a contract or subcontract at
any tier, without modification, in the same form in which it is sold in
the commercial marketplace; and
(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4),
such as agricultural products and petroleum products.
Common item means material that is common to the applicable
Government contract and the contractor's other work, except that for use
in the clause at 52.246-26, see the definition in paragraph (a) of that
clause.
Component means any item supplied to the Government as part of an
end item or of another component, except that for use in--
(1) Part 25, see the definition in 25.003;
(2) 52.225-1 and 52.225-3, see the definition in 52.225-1(a) and
52.225-3(a);
(3) 52.225-9 and 52.225-11, see the definition in 52.225-9(a) and
52.225-11(a); and
(4) 52.225-21 and 52.225-23, see the definition in 52.225-21(a) and
52.225-23(a).
Computer database or database means a collection of recorded
information in a form capable of, and for the purpose of, being stored
in, processed, and operated on by a computer. The term does not include
computer software.
Computer software--(1) Means--
(i) Computer programs that comprise a series of instructions, rules,
routines, or statements, regardless of the media in which recorded, that
allow or cause a computer to perform a specific operation or series of
operations; and
(ii) Recorded information comprising source code listings, design
details, algorithms, processes, flow charts, formulas, and related
material that would enable the computer program to be produced, created,
or compiled.
(2) Does not include computer databases or computer software
documentation.
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.
Consent to subcontract means the contracting officer's written
consent for the prime contractor to enter into a particular subcontract.
Consolidation or consolidated requirement--
(1) Means a solicitation for a single contract, a multiple-award
contract, a task order, or a delivery order to satisfy--
(i) Two or more requirements of the Federal agency for supplies or
services that have been provided to or performed for the Federal agency
under two or more separate contracts, each of which was lower in cost
than the total cost of the contract for which offers are solicited; or
(ii) Requirements of the Federal agency for construction projects to
be performed at two or more discrete sites.
(2) Separate contract as used in this definition, means a contract
that has been performed by any business, including small and other than
small business concerns.
Construction means construction, alteration, or repair (including
dredging, excavating, and painting) of buildings, structures, or other
real property. For purposes of this definition, the terms ``buildings,
structures, or other real property'' include, but are not limited to,
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines,
cemeteries, pumping stations, railways, airport facilities, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters,
levees, canals, and
[[Page 29]]
channels. Construction does not include the manufacture, production,
furnishing, construction, alteration, repair, processing, or assembling
of vessels, aircraft, or other kinds of personal property (except that
for use in subpart 22.5, see the definition at 22.502).
Contiguous United States (CONUS) means the 48 contiguous States and
the District of Columbia.
Contingency operation (10 U.S.C. 101(a)(13)) means a military
operation that--
(1) Is designated by the Secretary of Defense as an operation in
which members of the armed forces are or may become involved in military
actions, operations, or hostilities against an enemy of the United
States or against an opposing military force; or
(2) Results in the call or order to, or retention on, active duty of
members of the uniformed services under sections 688, 12301(a), 12302,
12304, 12304a, 12305, or 12406 of title 10 of the United States Code,
Chapter 15 of title 10 of the United States Code, or any other provision
of law during a war or during a national emergency declared by the
President or Congress.
Continued portion of the contract means the portion of a contract
that the contractor must continue to perform following a partial
termination.
Contract means a mutually binding legal relationship obligating the
seller to furnish the supplies or services (including construction) and
the buyer to pay for them. It includes all types of commitments that
obligate the Government to an expenditure of appropriated funds and
that, except as otherwise authorized, are in writing. In addition to
bilateral instruments, contracts include (but are not limited to) awards
and notices of awards; job orders or task letters issued under basic
ordering agreements; letter contracts; orders, such as purchase orders,
under which the contract becomes effective by written acceptance or
performance; and bilateral contract modifications. Contracts do not
include grants and cooperative agreements covered by 31 U.S.C. 6301, et
seq. For discussion of various types of contracts, see part 16.
Contract administration office means an office that performs--
(1) Assigned postaward functions related to the administration of
contracts; and
(2) Assigned preaward functions.
Contract clause or clause means a term or condition used in
contracts or in both solicitations and contracts, and applying after
contract award or both before and after award.
Contract modification means any written change in the terms of a
contract (see 43.103).
Contracting means purchasing, renting, leasing, or otherwise
obtaining supplies or services from nonfederal sources. Contracting
includes description (but not determination) of supplies and services
required, selection and solicitation of sources, preparation and award
of contracts, and all phases of contract administration. It does not
include making grants or cooperative agreements.
Contracting activity means an element of an agency designated by the
agency head and delegated broad authority regarding acquisition
functions.
Contracting office means an office that awards or executes a
contract for supplies or services and performs postaward functions not
assigned to a contract administration office (except for use in part 48,
see also 48.001).
Contracting officer means a person with the authority to enter into,
administer, and/or terminate contracts and make related determinations
and findings. The term includes certain authorized representatives of
the contracting officer acting within the limits of their authority as
delegated by the contracting officer. ``Administrative contracting
officer (ACO)'' refers to a contracting officer who is administering
contracts. ``Termination contracting officer (TCO)'' refers to a
contracting officer who is settling terminated contracts. A single
contracting officer may be responsible for duties in any or all of these
areas. Reference in this regulation (48 CFR chapter 1) to administrative
contracting officer or termination contracting officer does not--
(1) Require that a duty be performed at a particular office or
activity; or
(2) Restrict in any way a contracting officer in the performance of
any duty properly assigned.
[[Page 30]]
Contracting officer's representative (COR) means an individual,
including a contracting officer's technical representative (COTR),
designated and authorized in writing by the contracting officer to
perform specific technical or administrative functions.
Conviction means a judgment or conviction of a criminal offense by
any court of competent jurisdiction, whether entered upon a verdict or a
plea, and includes a conviction entered upon a plea of nolo contendere.
For use in subpart 23.5, see the definition at 23.503.
Cost or pricing data (10 U.S.C. 2306a(h)(1) and 41 U.S.C. chapter
35) means all facts that, as of the date of price agreement, or, if
applicable, an earlier date agreed upon between the parties that is as
close as practicable to the date of agreement on price, prudent buyers
and sellers would reasonably expect to affect price negotiations
significantly. Cost or pricing data are factual, not judgmental; and are
verifiable. While they do not indicate the accuracy of the prospective
contractor's judgment about estimated future costs or projections, they
do include the data forming the basis for that judgment. Cost or pricing
data are more than historical accounting data; they are all the facts
that can be reasonably expected to contribute to the soundness of
estimates of future costs and to the validity of determinations of costs
already incurred. They also include, but are not limited to, such
factors as--
(1) Vendor quotations;
(2) Nonrecurring costs;
(3) Information on changes in production methods and in production
or purchasing volume;
(4) Data supporting projections of business prospects and objectives
and related operations costs;
(5) Unit-cost trends such as those associated with labor efficiency;
(6) Make-or-buy decisions;
(7) Estimated resources to attain business goals; and
(8) Information on management decisions that could have a
significant bearing on costs.
Cost realism means that the costs in an offeror's proposal--
(1) Are realistic for the work to be performed;
(2) Reflect a clear understanding of the requirements; and
(3) Are consistent with the various elements of the offeror's
technical proposal.
Cost sharing means an explicit arrangement under which the
contractor bears some of the burden of reasonable, allocable, and
allowable contract cost.
Customs territory of the United States means the 50 States, the
District of Columbia, and Puerto Rico.
Data other than certified cost or pricing data means pricing data,
cost data, and judgmental information necessary for the contracting
officer to determine a fair and reasonable price or to determine cost
realism. Such data may include the identical types of data as certified
cost or pricing data, consistent with Table 15-2 of 15.408, but without
the certification. The data may also include, for example, sales data
and any information reasonably required to explain the offeror's
estimating process, including, but not limited to--
(1) The judgmental factors applied and the mathematical or other
methods used in the estimate, including those used in projecting from
known data; and
(2) The nature and amount of any contingencies included in the
proposed price.
Day means, unless otherwise specified, a calendar day.
Debarment means action taken by a debarring official under 9.406 to
exclude a contractor from Government contracting and Government-approved
subcontracting for a reasonable, specified period; a contractor that is
excluded is ``debarred.''
Delivery order means an order for supplies placed against an
established contract or with Government sources.
Depreciation means a charge to current operations that distributes
the cost of a tangible capital asset, less estimated residual value,
over the estimated useful life of the asset in a systematic and logical
manner. It does not involve a process of valuation. Useful life refers
to the prospective period of economic usefulness in a particular
[[Page 31]]
contractor's operations as distinguished from physical life; it is
evidenced by the actual or estimated retirement and replacement practice
of the contractor.
Descriptive literature means information provided by an offeror,
such as cuts, illustrations, drawings, and brochures, that shows a
product's characteristics or construction of a product or explains its
operation. The term includes only that information needed to evaluate
the acceptability of the product and excludes other information for
operating or maintaining the product.
Design-to-cost means a concept that establishes cost elements as
management goals to achieve the best balance between life-cycle cost,
acceptable performance, and schedule. Under this concept, cost is a
design constraint during the design and development phases and a
management discipline throughout the acquisition and operation of the
system or equipment.
Designated operational area means a geographic area designated by
the combatant commander or subordinate joint force commander for the
conduct or support of specified military operations.
Direct acquisition means a type of interagency acquisition where a
requesting agency places an order directly against a servicing agency's
indefinite-delivery contract. The servicing agency manages the
indefinite-delivery contract but does not participate in the placement
or administration of an order.
Direct cost means any cost that is identified specifically with a
particular final cost objective. Direct costs are not limited to items
that are incorporated in the end product as material or labor. Costs
identified specifically with a contract are direct costs of that
contract. All costs identified specifically with other final cost
objectives of the contractor are direct costs of those cost objectives.
Disaster Response Registry means a voluntary registry of contractors
who are willing to perform debris removal, distribution of supplies,
reconstruction, and other disaster or emergency relief activities
established in accordance with 6 U.S.C. 796, Registry of Disaster
Response Contractors. The Registry contains information on contractors
who are willing to perform disaster or emergency relief activities
within the United States and its outlying areas. The Registry is
accessed via the Internet at https://www.sam.gov, Search Records,
Advanced Search, Disaster Response Registry Search. (See 26.205.)
Drug-free workplace means the site(s) for the performance of work
done by the contractor in connection with a specific contract where
employees of the contractor are prohibited from engaging in the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance.
Earned value management system means a project management tool that
effectively integrates the project scope of work with cost, schedule and
performance elements for optimum project planning and control. The
qualities and operating characteristics of an earned value management
system are described in Electronic Industries Alliance Standard 748
(EIA-748), Earned Value Management Systems. (See OMB Circular A-11, Part
7.)
Economically disadvantaged women-owned small business (EDWOSB)
concern--(see definition of Women-Owned Small Business (WOSB) Program in
this section).
Effective date of termination means the date on which the notice of
termination requires the contractor to stop performance under the
contract. If the contractor receives the termination notice after the
date fixed for termination, then the effective date of termination means
the date the contractor receives the notice.
Electronic commerce means electronic techniques for accomplishing
business transactions including electronic mail or messaging, World Wide
Web technology, electronic bulletin boards, purchase cards, electronic
funds transfer, and electronic data interchange.
Electronic data interchange (EDI) means a technique for
electronically transferring and storing formatted information between
computers utilizing established and published formats and codes, as
authorized by the applicable Federal Information Processing Standards.
[[Page 32]]
Electronic Funds Transfer (EFT) means any transfer of funds, other
than a transaction originated by cash, check, or similar paper
instrument, that is initiated through an electronic terminal, telephone,
computer, or magnetic tape, for the purpose of ordering, instructing, or
authorizing a financial institution to debit or credit an account. The
term includes Automated Clearing House transfers, Fedwire transfers, and
transfers made at automatic teller machines and point-of-sale terminals.
For purposes of compliance with 31 U.S.C. 3332 and implementing
regulations at 31 CFR part 208, the term ``electronic funds transfer''
includes a Governmentwide commercial purchase card transaction.
Electronic Funds Transfer (EFT) indicator means a four-character
suffix to the unique entity identifier. The suffix is assigned at the
discretion of the commercial, nonprofit, or Government entity to
establish additional System for Award Management records for identifying
alternative EFT accounts (see subpart 32.11) for the same entity.
Emergency, as used in 6.208, 13.201, 13.500, 18.001, 18.202, 18.203,
and subpart 26.2, means any occasion or instance for which, in the
determination of the President, Federal assistance is needed to
supplement State and local efforts and capabilities to save lives and to
protect property and public health and safety, or to lessen or avert the
threat of a catastrophe in any part of the United States (42 U.S.C.
5122).
End product means supplies delivered under a line item of a
Government contract, except for use in part 25 and the associated
clauses at 52.225-1, 52.225-3, and 52.225-5, see the definitions in
25.003, 52.225-1(a), 52.225-3(a), and 52.225-5(a).
Energy-efficient product--(1) Means a product that--
(i) Meets Department of Energy and Environmental Protection Agency
criteria for use of the Energy Star trademark label; or
(ii) Is in the upper 25 percent of efficiency for all similar
products as designated by the Department of Energy's Federal Energy
Management Program.
(2) As used in this definition, the term ``product'' does not
include any energy-consuming product or system designed or procured for
combat or combat-related missions (42 U.S.C. 8259b).
Energy-efficient standby power devices means products that use--
(1) External standby power devices, or that contain an internal
standby power function; and
(2) No more than one watt of electricity in their standby power
consuming mode or meet recommended low standby levels as designated by
the Department of Energy Federal Energy Management Program.
Energy-savings performance contract means a contract that requires
the contractor to--
(1) Perform services for the design, acquisition, financing,
installation, testing, operation, and where appropriate, maintenance and
repair, of an identified energy conservation measure or series of
measures at one or more locations;
(2) Incur the costs of implementing the energy savings measures,
including at least the cost (if any) incurred in making energy audits,
acquiring and installing equipment, and training personnel in exchange
for a predetermined share of the value of the energy savings directly
resulting from implementation of such measures during the term of the
contract; and
(3) Guarantee future energy and cost savings to the Government.
Environmentally preferable means products or services that have a
lesser or reduced effect on human health and the environment when
compared with competing products or services that serve the same
purpose. This comparison may consider raw materials acquisition,
production, manufacturing, packaging, distribution, reuse, operation,
maintenance, or disposal of the product or service.
Excess personal property means any personal property under the
control of a Federal agency that the agency head determines is not
required for its needs or for the discharge of its responsibilities.
Executive agency means an executive department, a military
department, or any independent establishment within the meaning of 5
U.S.C. 101, 102, and 104(1), respectively, and any wholly
[[Page 33]]
owned Government corporation within the meaning of 31 U.S.C. 9101.
Facilities capital cost of money means ``cost of money as an element
of the cost of facilities capital'' as used at 48 CFR 9904.414--Cost
Accounting Standard--Cost of Money as an Element of the Cost of
Facilities Capital.
Federal agency means any executive agency or any independent
establishment in the legislative or judicial branch of the Government
(except the Senate, the House of Representatives, the Architect of the
Capitol, and any activities under the Architect's direction).
Federally-controlled facilities means--
(1) Federally-owned buildings or leased space, whether for single or
multi-tenant occupancy, and its grounds and approaches, all or any
portion of which is under the jurisdiction, custody or control of a
department or agency;
(2) Federally-controlled commercial space shared with non-government
tenants. For example, if a department or agency leased the 10th floor of
a commercial building, the Directive applies to the 10th floor only;
(3) Government-owned, contractor-operated facilities, including
laboratories engaged in national defense research and production
activities; and
(4) Facilities under a management and operating contract, such as
for the operation, maintenance, or support of a Government-owned or
Government-controlled research, development, special production, or
testing establishment.
Federally-controlled information system means an information system
(44 U.S.C. 3502(8) used or operated by a Federal agency, or a contractor
or other organization on behalf of the agency (44 U.S.C. 3544(a)(1)(A)).
Federally Funded Research and Development Centers (FFRDC's) means
activities that are sponsored under a broad charter by a Government
agency (or agencies) for the purpose of performing, analyzing,
integrating, supporting, and/or managing basic or applied research and/
or development, and that receive 70 percent or more of their financial
support from the Government; and--
(1) A long-term relationship is contemplated;
(2) Most or all of the facilities are owned or funded by the
Government; and
(3) The FFRDC has access to Government and supplier data, employees,
and facilities beyond that common in a normal contractual relationship.
Final indirect cost rate means the indirect cost rate established
and agreed upon by the Government and the contractor as not subject to
change. It is usually established after the close of the contractor's
fiscal year (unless the parties decide upon a different period) to which
it applies. For cost-reimbursement research and development contracts
with educational institutions, it may be predetermined; that is,
established for a future period on the basis of cost experience with
similar contracts, together with supporting data.
First article means a preproduction model, initial production
sample, test sample, first lot, pilot lot, or pilot models.
First article testing means testing and evaluating the first article
for conformance with specified contract requirements before or in the
initial stage of production.
F.o.b. means free on board. This term is used in conjunction with a
physical point to determine--
(1) The responsibility and basis for payment of freight charges; and
(2) Unless otherwise agreed, the point where title for goods passes
to the buyer or consignee.
F.o.b. destination means free on board at destination; i.e., the
seller or consignor delivers the goods on seller's or consignor's
conveyance at destination. Unless the contract provides otherwise, the
seller or consignor is responsible for the cost of shipping and risk of
loss. For use in the clause at 52.247-34, see the definition at 52.247-
34(a).
F.o.b. origin means free on board at origin; i.e., the seller or
consignor places the goods on the conveyance. Unless the contract
provides otherwise, the buyer or consignee is responsible for the cost
of shipping and risk of loss. For use in the clause at 52.247-29, see
the definition at 52.247-29(a).
F.o.b.. . . (For other types of F.o.b., see 47.303).
[[Page 34]]
Forward pricing rate agreement means a written agreement negotiated
between a contractor and the Government to make certain rates available
during a specified period for use in pricing contracts or modifications.
These rates represent reasonable projections of specific costs that are
not easily estimated for, identified with, or generated by a specific
contract, contract end item, or task. These projections may include
rates for such things as labor, indirect costs, material obsolescence
and usage, spare parts provisioning, and material handling.
Forward pricing rate recommendation means a rate set unilaterally by
the administrative contracting officer for use by the Government in
negotiations or other contract actions when forward pricing rate
agreement negotiations have not been completed or when the contractor
will not agree to a forward pricing rate agreement.
Freight means supplies, goods, and transportable property.
Full and open competition, when used with respect to a contract
action, means that all responsible sources are permitted to compete.
General and administrative (G&A) expense means any management,
financial, and other expense which is incurred by or allocated to a
business unit and which is for the general management and administration
of the business unit as a whole. G&A expense does not include those
management expenses whose beneficial or causal relationship to cost
objectives can be more directly measured by a base other than a cost
input base representing the total activity of a business unit during a
cost accounting period.
Global warming potential means how much a given mass of a chemical
contributes to global warming over a given time period compared to the
same mass of carbon dioxide. Carbon dioxide's global warming potential
is defined as 1.0.
Governmentwide acquisition contract (GWAC) means a task-order or
delivery-order contract for information technology established by one
agency for Governmentwide use that is operated--
(1) By an executive agent designated by the Office of Management and
Budget pursuant to 40 U.S.C. 11302(e); or
(2) Under a delegation of procurement authority issued by the
General Services Administration (GSA) prior to August 7, 1996, under
authority granted GSA by former section 40 U.S.C. 759, repealed by Pub.
L. 104-106. The Economy Act does not apply to orders under a
Governmentwide acquisition contract.
Governmentwide point of entry (GPE) means the single point where
Government business opportunities greater than $25,000, including
synopses of proposed contract actions, solicitations, and associated
information, can be accessed electronically by the public. The GPE is
located at https://www.sam.gov.
Head of the agency (see ``agency head'').
Head of the contracting activity means the official who has overall
responsibility for managing the contracting activity.
High global warming potential hydrofluorocarbons means any
hydrofluorocarbons in a particular end use for which EPA's Significant
New Alternatives Policy (SNAP) program has identified other acceptable
alternatives that have lower global warming potential. The SNAP list of
alternatives is found at 40 CFR part 82, subpart G, with supplemental
tables of alternatives available at http://www.epa.gov/snap/).
Historically black college or university means an institution
determined by the Secretary of Education to meet the requirements of 34
CFR 608.2.
HUBZone means a historically underutilized business zone that is an
area located within one or more qualified census tracts, qualified
nonmetropolitan counties, lands within the external boundaries of an
Indian reservation, qualified base closure areas, or redesignated areas,
as defined in 13 CFR 126.103.
HUBZone contract means a contract awarded to a Small Business
Administration certified ``HUBZone small business concern'' through any
of the following procurement methods:
(1) A sole source award to a HUBZone small business concern.
[[Page 35]]
(2) Set-aside awards based on competition restricted to HUBZone
small business concerns.
(3) Awards to HUBZone small business concerns through full and open
competition after a price evaluation preference in favor of HUBZone
small business concerns.
(4) Awards based on a reserve for HUBZone small business concerns in
a solicitation for a multiple-award contract.
HUBZone small business concern means a small business concern,
certified by the Small Business Administration (SBA), that appears on
the List of Qualified HUBZone Small Business Concerns maintained by the
SBA (13 CFR 126.103).
Humanitarian or peacekeeping operation means a military operation in
support of the provision of humanitarian or foreign disaster assistance
or in support of a peacekeeping operation under chapter VI or VII of the
Charter of the United Nations. The term does not include routine
training, force rotation, or stationing (10 U.S.C. 2302(8) and 41 U.S.C.
153(2)).
Hydrofluorocarbons means compounds that contain only hydrogen,
fluorine, and carbon.
In writing, writing, or written means any worded or numbered
expression that can be read, reproduced, and later communicated, and
includes electronically transmitted and stored information.
Indirect cost means any cost not directly identified with a single
final cost objective, but identified with two or more final cost
objectives or with at least one intermediate cost objective.
Indirect cost rate means the percentage or dollar factor that
expresses the ratio of indirect expense incurred in a given period to
direct labor cost, manufacturing cost, or another appropriate base for
the same period (see also ``final indirect cost rate'').
Ineligible means excluded from Government contracting (and
subcontracting, if appropriate) pursuant to statutory, Executive order,
or regulatory authority other than this regulation (48 CFR chapter 1)
and its implementing and supplementing regulations; for example,
pursuant to--
(1) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements
(Construction), and its related statutes and implementing regulations;
(2) 41 U.S.C. chapter 67, Service Contract Labor Standards;
(3) The Equal Employment Opportunity Acts and Executive orders;
(4) 41 U.S.C. chapter 65, Contracts for Material, Supplies,
Articles, and Equipment Exceeding $10,000;
(5) 41 U.S.C. chapter 83, Buy American; or
(6) The Environmental Protection Acts and Executive orders.
Information and communication technology (ICT) means information
technology and other equipment, systems, technologies, or processes, for
which the principal function is the creation, manipulation, storage,
display, receipt, or transmission of electronic data and information, as
well as any associated content. Examples of ICT include but are not
limited to the following: Computers and peripheral equipment;
information kiosks and transaction machines; telecommunications
equipment; customer premises equipment; multifunction office machines;
software; applications; websites; videos; and electronic documents.
Information security means protecting information and information
systems from unauthorized access, use, disclosure, disruption,
modification, or destruction in order to provide--
(1) Integrity, which means guarding against improper information
modification or destruction, and includes ensuring information
nonrepudiation and authenticity;
(2) Confidentiality, which means preserving authorized restrictions
on access and disclosure, including means for protecting personal
privacy and proprietary information; and
(3) Availability, which means ensuring timely and reliable access
to, and use of, information.
Information technology means any equipment, or interconnected
system(s) or subsystem(s) of equipment, that is used in the automatic
acquisition, storage, analysis, evaluation, manipulation, management,
movement, control, display, switching, interchange, transmission, or
reception of data or information by the agency.
[[Page 36]]
(1) For purposes of this definition, equipment is used by an agency
if the equipment is used by the agency directly or is used by a
contractor under a contract with the agency that requires--
(i) Its use; or
(ii) To a significant extent, its use in the performance of a
service or the furnishing of a product.
(2) The term ``information technology'' includes computers,
ancillary equipment (including imaging peripherals, input, output, and
storage devices necessary for security and surveillance), peripheral
equipment designed to be controlled by the central processing unit of a
computer, software, firmware and similar procedures, services (including
support services), and related resources.
(3) The term ``information technology'' does not include any
equipment that--
(i) Is acquired by a contractor incidental to a contract; or
(ii) Contains imbedded information technology that is used as an
integral part of the product, but the principal function of which is not
the acquisition, storage, analysis, evaluation, manipulation,
management, movement, control, display, switching, interchange,
transmission, or reception of data or information. For example, HVAC
(heating, ventilation, and air conditioning) equipment, such as
thermostats or temperature control devices, and medical equipment where
information technology is integral to its operation, are not information
technology.
Inherently governmental function means, as a matter of policy, a
function that is so intimately related to the public interest as to
mandate performance by Government employees. This definition is a policy
determination, not a legal determination. An inherently governmental
function includes activities that require either the exercise of
discretion in applying Government authority, or the making of value
judgments in making decisions for the Government. Governmental functions
normally fall into two categories: the act of governing, i.e., the
discretionary exercise of Government authority, and monetary
transactions and entitlements.
(1) An inherently governmental function involves, among other
things, the interpretation and execution of the laws of the United
States so as to--
(i) Bind the United States to take or not to take some action by
contract, policy, regulation, authorization, order, or otherwise;
(ii) Determine, protect, and advance United States economic,
political, territorial, property, or other interests by military or
diplomatic action, civil or criminal judicial proceedings, contract
management, or otherwise;
(iii) Significantly affect the life, liberty, or property of private
persons;
(iv) Commission, appoint, direct, or control officers or employees
of the United States; or
(v) Exert ultimate control over the acquisition, use, or disposition
of the property, real or personal, tangible or intangible, of the United
States, including the collection, control, or disbursement of Federal
funds.
(2) Inherently governmental functions do not normally include
gathering information for or providing advice, opinions,
recommendations, or ideas to Government officials. They also do not
include functions that are primarily ministerial and internal in nature,
such as building security, mail operations, operation of cafeterias,
housekeeping, facilities operations and maintenance, warehouse
operations, motor vehicle fleet management operations, or other routine
electrical or mechanical services.
Inspection means examining and testing supplies or services
(including, when appropriate, raw materials, components, and
intermediate assemblies) to determine whether they conform to contract
requirements.
Insurance means a contract that provides that for a stipulated
consideration, one party undertakes to indemnify another against loss,
damage, or liability arising from an unknown or contingent event.
Interagency acquisition means a procedure by which an agency needing
supplies or services (the requesting agency) obtains them from another
agency (the servicing agency), by an assisted
[[Page 37]]
acquisition or a direct acquisition. The term includes--
(1) Acquisitions under the Economy Act (31 U.S.C. 1535); and
(2) Non-Economy Act acquisitions completed under other statutory
authorities (e.g., General Services Administration Federal Supply
Schedules in subpart 8.4 and Governmentwide acquisition contracts
(GWACs)).
Invoice means a contractor's bill or written request for payment
under the contract for supplies delivered or services performed (see
also ``proper invoice'').
Irrevocable letter of credit means a written commitment by a
federally insured financial institution to pay all or part of a stated
amount of money, until the expiration date of the letter, upon the
Government's (the beneficiary) presentation of a written demand for
payment. Neither the financial institution nor the offeror/contractor
can revoke or condition the letter of credit.
Labor surplus area means a geographical area identified by the
Department of Labor in accordance with 20 CFR part 654, subpart A, as an
area of concentrated unemployment or underemployment or an area of labor
surplus.
Labor surplus area concern means a concern that together with its
first-tier subcontractors will perform substantially in labor surplus
areas. Performance is substantially in labor surplus areas if the costs
incurred under the contract on account of manufacturing, production, or
performance of appropriate services in labor surplus areas exceed 50
percent of the contract price.
Latent defect means a defect that exists at the time of acceptance
but cannot be discovered by a reasonable inspection.
Line item means the basic structural element in a procurement
instrument that describes and organizes the required product or service
for pricing, delivery, inspection, acceptance, invoicing, and payment.
The use of the term ``line item'' includes ``subline item,'' as
applicable.
Line item number means either a numeric or alphanumeric format to
identify a line item.
Major disaster, as used in 6.208, 13.201, 13.500, 18.001, 18.202,
18.203, and subpart 26.2, means any natural catastrophe (including any
hurricane, tornado, storm, high water, winddriven water, tidal wave,
tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm,
or drought), or regardless of cause, any fire, flood, or explosion, in
any part of the United States, which, in the determination of the
President, causes damage of sufficient severity and magnitude to warrant
major disaster assistance under the Stafford Act to supplement the
efforts and available resources of States, local governments, and
disaster relief organizations in alleviating the damage, loss, hardship,
or suffering caused thereby (42 U.S.C. 5122).
Major system means that combination of elements that will function
together to produce the capabilities required to fulfill a mission need.
The elements may include hardware, equipment, software, or any
combination thereof, but exclude construction or other improvements to
real property. A system is a major system if--
(1) The Department of Defense is responsible for the system and the
total expenditures for research, development, test, and evaluation for
the system are estimated to be more than $185 million based on Fiscal
Year 2014 constant dollars or the eventual total expenditure for the
acquisition exceeds $835 million based on Fiscal Year 2014 constant
dollars (or any update of these thresholds based on a more recent fiscal
year, as specified in the DoD Instruction 5000.02, ``Operation of the
Defense Acquisition System'');
(2) A civilian agency is responsible for the system and total
expenditures for the system are estimated to exceed $ 2.5 million or the
dollar threshold for a ``major system'' established by the agency
pursuant to Office of Management and Budget Circular A-109, entitled
``Major System Acquisitions,'' whichever is greater; or
(3) The system is designated a ``major system'' by the head of the
agency responsible for the system (10 U.S.C. 2302 and 41 U.S.C. 109.
Make-or-buy program means that part of a contractor's written plan
for a contract identifying those major items
[[Page 38]]
to be produced or work efforts to be performed in the prime contractor's
facilities and those to be subcontracted.
Manufactured end product means any end product in product and
service codes (PSC) 1000-9999, except--
(1) PSC 5510, Lumber and Related Basic Wood Materials;
(2) Product or service group (PSG) 87, Agricultural Supplies;
(3) PSG 88, Live Animals;
(4) PSG 89, Subsistence;
(5) PSC 9410, Crude Grades of Plant Materials;
(6) PSC 9430, Miscellaneous Crude Animal Products, Inedible;
(7) PSC 9440, Miscellaneous Crude Agricultural and Forestry
Products;
(8) PSC 9610, Ores;
(9) PSC 9620, Minerals, Natural and Synthetic; and
(10) PSC 9630, Additive Metal Materials.
Market research means collecting and analyzing information about
capabilities within the market to satisfy agency needs.
Master solicitation means a document containing special clauses and
provisions that have been identified as essential for the acquisition of
a specific type of supply or service that is acquired repetitively.
May denotes the permissive. However, the words ``no person may. .
.'' mean that no person is required, authorized, or permitted to do the
act described.
Micro-purchase means an acquisition of supplies or services using
simplified acquisition procedures, the aggregate amount of which does
not exceed the micro-purchase threshold.
Micro-purchase threshold means $10,000, except it means--
(1) For acquisitions of construction subject to 40 U.S.C. chapter
31, subchapter IV, Wage Rate Requirements (Construction), $2,000;
(2) For acquisitions of services subject to 41 U.S.C. chapter 67,
Service Contract Labor Standards, $2,500;
(3) For acquisitions of supplies or services that, as determined by
the head of the agency, are to be used to support a contingency
operation; to facilitate defense against or recovery from cyber,
nuclear, biological, chemical or radiological attack; to support a
request from the Secretary of State or the Administrator of the United
States Agency for International Development to facilitate provision of
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or
to support response to an emergency or major disaster (42 U.S.C. 5122),
as described in 13.201(g)(1), except for construction subject to 40
U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction)
(41 U.S.C. 1903)--
(i) $20,000 in the case of any contract to be awarded and performed,
or purchase to be made, inside the United States; and
(ii) $35,000 in the case of any contract to be awarded and
performed, or purchase to be made, outside the United States; and
(4) For acquisitions of supplies or services from institutions of
higher education (20 U.S.C. 1001(a)) or related or affiliated nonprofit
entities, or from nonprofit research organizations or independent
research institutes--
(i) $10,000; or
(ii) A higher threshold, as determined appropriate by the head of
the agency and consistent with clean audit findings under 31 U.S.C.
chapter 75, Requirements for Single Audits; an internal institutional
risk assessment; or State law.
Minority Institution means an institution of higher education
meeting the requirements of Section 365(3) of the Higher Education Act
of 1965 (20 U.S.C. 1067k), including a Hispanic-serving institution of
higher education, as defined in Section 502(a) of the Act (20 U.S.C.
1101a).
Multi-agency contract (MAC) means a task-order or delivery-order
contract established by one agency for use by Government agencies to
obtain supplies and services, consistent with the Economy Act (see
17.502-2). Multi-agency contracts include contracts for information
technology established pursuant to 40 U.S.C. 11314(a)(2).
Multiple-award contract means a contract that is--
[[Page 39]]
(1) A Multiple Award Schedule contract issued by GSA (e.g., GSA
Schedule Contract) or agencies granted Multiple Award Schedule contract
authority by GSA (e.g., Department of Veterans Affairs) as described in
FAR part 38;
(2) A multiple-award task-order or delivery-order contract issued in
accordance with FAR subpart 16.5, including Governmentwide acquisition
contracts; or
(3) Any other indefinite-delivery, indefinite-quantity contract
entered into with two or more sources pursuant to the same solicitation.
Must (see ``shall'').
National defense means any activity related to programs for military
or atomic energy production or construction, military assistance to any
foreign nation, stockpiling, or space, except that for use in Subpart
11.6, see the definition in 11.601.
Neutral person means an impartial third party, who serves as a
mediator, fact finder, or arbitrator, or otherwise functions to assist
the parties to resolve the issues in controversy. A neutral person may
be a permanent or temporary officer or employee of the Federal
Government or any other individual who is acceptable to the parties. A
neutral person must have no official, financial, or personal conflict of
interest with respect to the issues in controversy, unless the interest
is fully disclosed in writing to all parties and all parties agree that
the neutral person may serve (5 U.S.C. 583).
Nondevelopmental item means--
(1) Any previously developed item of supply used exclusively for
governmental purposes by a Federal agency, a State or local government,
or a foreign government with which the United States has a mutual
defense cooperation agreement;
(2) Any item described in paragraph (1) of this definition that
requires only minor modification or modifications of a type customarily
available in the commercial marketplace in order to meet the
requirements of the procuring department or agency; or
(3) Any item of supply being produced that does not meet the
requirements of paragraphs (1) or (2) solely because the item is not yet
in use.
Novation agreement means a legal instrument--
(1) Executed by the--
(i) Contractor (transferor);
(ii) Successor in interest (transferee); and
(iii) Government; and
(2) By which, among other things, the transferor guarantees
performance of the contract, the transferee assumes all obligations
under the contract, and the Government recognizes the transfer of the
contract and related assets.
Offer means a response to a solicitation that, if accepted, would
bind the offeror to perform the resultant contract. Responses to
invitations for bids (sealed bidding) are offers called ``bids'' or
``sealed bids''; responses to requests for proposals (negotiation) are
offers called ``proposals''; however, responses to requests for
quotations (simplified acquisition) are ``quotations'', not offers. For
unsolicited proposals, see subpart 15.6.
Offeror means offeror or bidder.
Office of Small and Disadvantaged Business Utilization means the
Office of Small Business Programs when referring to the Department of
Defense.
OMB Uniform Guidance at 2 CFR part 200 is the abbreviated title for
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (2 CFR part 200), which supersedes OMB
Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133, and the
guidance in Circular A-50 on Audit Followup.
Option means a unilateral right in a contract by which, for a
specified time, the Government may elect to purchase additional supplies
or services called for by the contract, or may elect to extend the term
of the contract.
Organizational conflict of interest means that because of other
activities or relationships with other persons, a person is unable or
potentially unable to render impartial assistance or advice to the
Government, or the person's objectivity in performing the contract work
is or might be otherwise impaired, or a person has an unfair competitive
advantage.
Outlying areas means--
(1) Commonwealths. (i) Puerto Rico.
(ii) The Northern Mariana Islands;
(2) Territories. (i) American Samoa.
[[Page 40]]
(ii) Guam.
(iii) U.S. Virgin Islands; and
(3) Minor outlying islands. (i) Baker Island.
(ii) Howland Island.
(iii) Jarvis Island.
(iv) Johnston Atoll.
(v) Kingman Reef.
(vi) Midway Islands.
(vii) Navassa Island.
(viii) Palmyra Atoll.
(ix) Wake Atoll.
Overtime means time worked by a contractor's employee in excess of
the employee's normal workweek.
Overtime premium means the difference between the contractor's
regular rate of pay to an employee for the shift involved and the higher
rate paid for overtime. It does not include shift premium, i.e., the
difference between the contractor's regular rate of pay to an employee
and the higher rate paid for extra-pay-shift work.
Ozone-depleting substance means any substance the Environmental
Protection Agency designates in 40 CFR part 82 as--
(1) Class I, including, but not limited to, chlorofluorocarbons,
halons, carbon tetrachloride, and methyl chloroform; or
(2) Class II, including, but not limited to,
hydrochlorofluorocarbons.
Partial termination means the termination of a part, but not all, of
the work that has not been completed and accepted under a contract.
Past performance means an offeror's or contractor's performance on
active and physically completed contracts (see 4.804-4).
Performance-based acquisition (PBA) means an acquisition structured
around the results to be achieved as opposed to the manner by which the
work is to be performed.
Performance Work Statement (PWS) means a statement of work for
performance-based acquisitions that describes the required results in
clear, specific and objective terms with measurable outcomes.
Personal property means property of any kind or interest in it
except real property, records of the Federal Government, and naval
vessels of the following categories:
(1) Battleships;
(2) Cruisers;
(3) Aircraft carriers;
(4) Destroyers; and
(5) Submarines.
Personal services contract means a contract that, by its express
terms or as administered, makes the contractor personnel appear to be,
in effect, Government employees (see 37.104).
Plant clearance officer means an authorized representative of the
contracting officer, appointed in accordance with agency procedures,
responsible for screening, redistributing, and disposing of contractor
inventory from a contractor's plant or work site. The term
``Contractor's plant'' includes, but is not limited to, Government-owned
contractor-operated plants, Federal installations, and Federal and non-
Federal industrial operations, as may be required under the scope of the
contract.
Pollution prevention means any practice that--
(1)(i) Reduces the amount of any hazardous substance, pollutant, or
contaminant entering any waste stream or otherwise released into the
environment (including fugitive emissions) prior to recycling,
treatment, or disposal; and
(ii) Reduces the hazards to public health and the environment
associated with the release of such substances, pollutants, and
contaminants;
(2) Reduces or eliminates the creation of pollutants through
increased efficiency in the use of raw materials, energy, water, or
other resources; or
(3) Protects natural resources by conservation.
Power of attorney means the authority given one person or
corporation to act for and obligate another, as specified in the
instrument creating the power; in corporate suretyship, an instrument
under seal that appoints an attorney-in-fact to act in behalf of a
surety company in signing bonds (see also ``attorney-in-fact'' at
28.001).
Preaward survey means an evaluation of a prospective contractor's
capability to perform a proposed contract.
Preponderance of the evidence means proof by information that,
compared with that opposing it, leads to the conclusion that the fact at
issue is more probably true than not.
[[Page 41]]
Pricing means the process of establishing a reasonable amount or
amounts to be paid for supplies or services.
Principal means an officer, director, owner, partner, or a person
having primary management or supervisory responsibilities within a
business entity (e.g., general manager; plant manager; head of a
division or business segment; and similar positions).
Procurement (see ``acquisition'').
Procuring activity means a component of an executive agency having a
significant acquisition function and designated as such by the head of
the agency. Unless agency regulations specify otherwise, the term
``procuring activity'' is synonymous with ``contracting activity.''
Products has the same meaning as supplies.
Projected average loss means the estimated long-term average loss
per period for periods of comparable exposure to risk of loss.
Proper invoice means an invoice that meets the minimum standards
specified in 32.905(b).
Purchase order, when issued by the Government, means an offer by the
Government to buy supplies or services, including construction and
research and development, upon specified terms and conditions, using
simplified acquisition procedures.
Qualification requirement means a Government requirement for testing
or other quality assurance demonstration that must be completed before
award of a contract.
Qualified products list (QPL) means a list of products that have
been examined, tested, and have satisfied all applicable qualification
requirements.
Qualifying offeror, as used in 13.106-1 and 15.304, means an offeror
that is determined to be a responsible source, submits a technically
acceptable proposal that conforms to the requirements of the
solicitation, and the contracting officer has no reason to believe would
be likely to offer other than fair and reasonable pricing (10 U.S.C.
2305(a)(3)(D)).
Receiving report means written evidence that indicates Government
acceptance of supplies delivered or services performed (see subpart
46.6). Receiving reports must meet the requirements of 32.905(c).
Recovered material means waste materials and by-products recovered
or diverted from solid waste, but the term does not include those
materials and by-products generated from, and commonly reused within, an
original manufacturing process. For use in subpart 11.3 for paper and
paper products, see the definition at 11.301.
Registered in the System for Award Management (SAM) means that--
(1) The Contractor has entered all mandatory information, including
the unique entity identifier and the Electronic Funds Transfer indicator
(if applicable), the Commercial and Government Entity (CAGE) code, as
well as data required by the Federal Funding Accountability and
Transparency Act of 2006 (see subpart 4.14), into SAM;
(2) The Contractor has completed the Core, Assertions,
Representations and Certifications, and Points of Contact sections of
the registration in SAM;
(3) The Government has validated all mandatory data fields, to
include validation of the Taxpayer Identification Number (TIN) with the
Internal Revenue Service (IRS). The contractor will be required to
provide consent for TIN validation to the Government as a part of the
SAM registration process; and
(4) The Government has marked the record ``Active''.
Renewable energy means energy produced by solar, wind, geothermal,
biomass, landfill gas, ocean (including tidal, wave, current, and
thermal), municipal solid waste, or new hydroelectric generation
capacity achieved from increased efficiency or additions of new capacity
at an existing hydroelectric project (Energy Policy Act of 2005, 42
U.S.C. 15852).
Renewable energy technology means--
(1) Technologies that use renewable energy to provide light, heat,
cooling, or mechanical or electrical energy for use in facilities or
other activities; or
(2) The use of integrated whole-building designs that rely upon
renewable energy resources, including passive solar design.
Requesting agency means the agency that has the requirement for an
interagency acquisition.
[[Page 42]]
Residual value means the proceeds, less removal and disposal costs,
if any, realized upon disposition of a tangible capital asset. It
usually is measured by the net proceeds from the sale or other
disposition of the asset, or its fair value if the asset is traded in on
another asset. The estimated residual value is a current forecast of the
residual value.
Responsible audit agency means the agency that is responsible for
performing all required contract audit services at a business unit.
Responsible prospective contractor means a contractor that meets the
standards in 9.104.
Scrap means personal property that has no value except its basic
metallic, mineral, or organic content.
Segment means one of two or more divisions, product departments,
plants, or other subdivisions of an organization reporting directly to a
home office, usually identified with responsibility for profit and/or
producing a product or service. The term includes--
(1) Government-owned contractor-operated (GOCO) facilities; and
(2) Joint ventures and subsidiaries (domestic and foreign) in which
the organization has--
(i) A majority ownership; or
(ii) Less than a majority ownership, but over which it exercises
control.
Self-insurance means the assumption or retention of the risk of loss
by the contractor, whether voluntarily or involuntarily. Self-insurance
includes the deductible portion of purchased insurance.
Senior procurement executive means the individual appointed pursuant
to 41 U.S.C. 1702(c) who is responsible for management direction of the
acquisition system of the executive agency, including implementation of
the unique acquisition policies, regulations, and standards of the
executive agency.
Service-disabled veteran-owned small business concern--
(1) Means a small business concern--
(i) Not less than 51 percent of which is owned by one or more
service-disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the stock of which is owned by one
or more service-disabled veterans; and
(ii) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of a
service-disabled veteran with permanent and severe disability, the
spouse or permanent caregiver of such veteran.
(2) Service-disabled veteran means a veteran, as defined in 38
U.S.C. 101(2), with a disability that is service-connected, as defined
in 38 U.S.C. 101(16).
Servicing agency means the agency that will conduct an assisted
acquisition on behalf of the requesting agency.
Shall denotes the imperative.
Shipment means freight transported or to be transported.
Shop drawings means drawings submitted by the construction
contractor or a subcontractor at any tier or required under a
construction contract, showing in detail either or both of the
following:
(1) The proposed fabrication and assembly of structural elements.
(2) The installation (i.e., form, fit, and attachment details) of
materials or equipment.
Should means an expected course of action or policy that is to be
followed unless inappropriate for a particular circumstance.
Signature or signed means the discrete, verifiable symbol of an
individual that, when affixed to a writing with the knowledge and
consent of the individual, indicates a present intention to authenticate
the writing. This includes electronic symbols.
Simplified acquisition procedures means the methods prescribed in
part 13 for making purchases of supplies or services.
Simplified acquisition threshold means $250,000, except for--
(1) Acquisitions of supplies or services that, as determined by the
head of the agency, are to be used to support a contingency operation;
to facilitate defense against or recovery from cyber, nuclear,
biological, chemical, or radiological attack; to support a request
[[Page 43]]
from the Secretary of State or the Administrator of the United States
Agency for International Development to facilitate provision of
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or
to support response to an emergency or major disaster (42 U.S.C. 5122),
(41 U.S.C. 1903), the term means--
(i) $800,000 for any contract to be awarded and performed, or
purchase to be made, inside the United States; and
(ii) $1.5 million for any contract to be awarded and performed, or
purchase to be made, outside the United States; and
(2) Acquisitions of supplies or services that, as determined by the
head of the agency, are to be used to support a humanitarian or
peacekeeping operation (10 U.S.C. 2302), the term means $500,000 for any
contract to be awarded and performed, or purchase to be made, outside
the United States.
Single, Governmentwide point of entry, means the one point of entry
to be designated by the Administrator of OFPP that will allow the
private sector to electronically access procurement opportunities
Governmentwide.
Small business concern--
(1) Means a concern, including its affiliates, that is independently
owned and operated, not dominant in the field of operation in which it
is bidding on Government contracts, and qualified as a small business
under the criteria and size standards in 13 CFR part 121 (see 19.102).
Such a concern is ``not dominant in its field of operation'' when it
does not exercise a controlling or major influence on a national basis
in a kind of business activity in which a number of business concerns
are primarily engaged. In determining whether dominance exists,
consideration must be given to all appropriate factors, including volume
of business, number of employees, financial resources, competitive
status or position, ownership or control of materials, processes,
patents, license agreements, facilities, sales territory, and nature of
business activity. (See 15 U.S.C. 632.)
(2) Affiliates, as used in this definition, means business concerns,
one of whom directly or indirectly controls or has the power to control
the others, or a third party or parties control or have the power to
control the others. In determining whether affiliation exists,
consideration is given to all appropriate factors including common
ownership, common management, and contractual relationships. SBA
determines affiliation based on the factors set forth at 13 CFR 121.103.
Small business subcontractor means a concern that does not exceed
the size standard for the North American Industry Classification Systems
code that the prime contractor determines best describes the product or
service being acquired by the subcontract.
Small Business Teaming Arrangement--
(1) Means an arrangement where--
(i) Two or more small business concerns have formed a joint venture;
or
(ii) A small business offeror agrees with one or more other small
business concerns to have them act as its subcontractors under a
specified Government contract. A Small Business Teaming Arrangement
between the offeror and its small business subcontractor(s) exists
through a written agreement between the parties that--
(A) Is specifically referred to as a ``Small Business Teaming
Arrangement''; and
(B) Sets forth the different responsibilities, roles, and
percentages (or other allocations) of work as it relates to the
acquisition;
(2)(i) For civilian agencies, may include two business concerns in a
mentor-prot[eacute]g[eacute] relationship when both the mentor and the
prot[eacute]g[eacute] are small or the prot[eacute]g[eacute] is small
and the concerns have received an exception to affiliation pursuant to
13 CFR 121.103(h)(3)(ii) or (iii).
(ii) For DoD, may include two business concerns in a mentor-
prot[eacute]g[eacute] relationship in the Department of Defense Pilot
Mentor-Prot[eacute]g[eacute] Program (see section 831 of the National
Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10
U.S.C. 2302 note)) when both the mentor and the prot[eacute]g[eacute]
are small. There is no exception to joint venture size affiliation for
offers received from teaming arrangements under the Department of
Defense Pilot Mentor-Prot[eacute]g[eacute] Program; and
(3) See 13 CFR 121.103(b)(9) regarding the exception to affiliation
for offers received from Small Business Teaming
[[Page 44]]
Arrangements in the case of a solicitation of offers for a bundled
contract with a reserve.
Small disadvantaged business concern, consistent with 13 CFR
124.1002, means a small business concern under the size standard
applicable to the acquisition, that
(1) Is at least 51 percent unconditionally and directly owned (as
defined at 13 CFR 124.105) by--
(i) One or more socially disadvantaged (as defined at 13 CFR
124.103) and economically disadvantaged (as defined at 13 CFR 124.104)
individuals who are citizens of the United States; and
(ii) Each individual claiming economic disadvantage has a net worth
not exceeding $750,000 after taking into account the applicable
exclusions set forth at 13 CFR 124.104(c)(2); and
(2) The management and daily business operations of which are
controlled (as defined at 13 CFR 124.106) by individuals who meet the
criteria in paragraphs (1)(i) and (ii) of this definition.
Sole source acquisition means a contract for the purchase of
supplies or services that is entered into or proposed to be entered into
by an agency after soliciting and negotiating with only one source.
Solicitation means any request to submit offers or quotations to the
Government. Solicitations under sealed bid procedures are called
``invitations for bids.'' Solicitations under negotiated procedures are
called ``requests for proposals.'' Solicitations under simplified
acquisition procedures may require submission of either a quotation or
an offer.
Solicitation provision or provision means a term or condition used
only in solicitations and applying only before contract award.
Source selection information means any of the following information
that is prepared for use by an agency for the purpose of evaluating a
bid or proposal to enter into an agency procurement contract, if that
information has not been previously made available to the public or
disclosed publicly:
(1) Bid prices submitted in response to an agency invitation for
bids, or lists of those bid prices before bid opening.
(2) Proposed costs or prices submitted in response to an agency
solicitation, or lists of those proposed costs or prices.
(3) Source selection plans.
(4) Technical evaluation plans.
(5) Technical evaluations of proposals.
(6) Cost or price evaluations of proposals.
(7) Competitive range determinations that identify proposals that
have a reasonable chance of being selected for award of a contract.
(8) Rankings of bids, proposals, or competitors.
(9) Reports and evaluations of source selection panels, boards, or
advisory councils.
(10) Other information marked as ``Source Selection Information--See
FAR 2.101 and 3.104'' based on a case-by-case determination by the head
of the agency or the contracting officer, that its disclosure would
jeopardize the integrity or successful completion of the Federal agency
procurement to which the information relates.
Special competency means a special or unique capability, including
qualitative aspects, developed incidental to the primary functions of
the Federally Funded Research and Development Centers to meet some
special need.
Special test equipment means either single or multipurpose
integrated test units engineered, designed, fabricated, or modified to
accomplish special purpose testing in performing a contract. It consists
of items or assemblies of equipment including foundations and similar
improvements necessary for installing special test equipment, and
standard or general purpose items or components that are interconnected
and interdependent so as to become a new functional entity for special
testing purposes. Special test equipment does not include material,
special tooling, real property, and equipment items used for general
testing purposes or property that with relatively minor expense can be
made suitable for general purpose use.
Special tooling means jigs, dies, fixtures, molds, patterns, taps,
gauges, and all components of these items including foundations and
similar improvements necessary for installing
[[Page 45]]
special tooling, and which are of such a specialized nature that without
substantial modification or alteration their use is limited to the
development or production of particular supplies or parts thereof or to
the performance of particular services. Special tooling does not include
material, special test equipment, real property, equipment, machine
tools, or similar capital items.
State and local taxes means taxes levied by the States, the District
of Columbia, outlying areas of the United States, or their political
subdivisions.
Statement of Objectives (SOO) means a Government-prepared document
incorporated into the solicitation that states the overall performance
objectives. It is used in solicitations when the Government intends to
provide the maximum flexibility to each offeror to propose an innovative
approach.
Subline item means a subset of a line item.
Substantial evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.
Substantially as follows or substantially the same as, when used in
the prescription and introductory text of a provision or clause, means
that authorization is granted to prepare and utilize a variation of that
provision or clause to accommodate requirements that are peculiar to an
individual acquisition; provided that the variation includes the salient
features of the FAR provision or clause, and is not inconsistent with
the intent, principle, and substance of the FAR provision or clause or
related coverage of the subject matter.
Supplemental agreement means a contract modification that is
accomplished by the mutual action of the parties.
Supplies means all property except land or interest in land. It
includes (but is not limited to) public works, buildings, and
facilities; ships, floating equipment, and vessels of every character,
type, and description, together with parts and accessories; aircraft and
aircraft parts, accessories, and equipment; machine tools; and the
alteration or installation of any of the foregoing.
Supporting a diplomatic or consular mission means performing outside
the United States under a contract administered by Federal agency
personnel who are subject to the direction of a Chief of Mission.
Surety means an individual or corporation legally liable for the
debt, default, or failure of a principal to satisfy a contractual
obligation. The types of sureties referred to are as follows:
(1) An individual surety is one person, as distinguished from a
business entity, who is liable for the entire penal amount of the bond.
(2) A corporate surety is licensed under various insurance laws and,
under its charter, has legal power to act as surety for others.
(3) A cosurety is one of two or more sureties that are jointly
liable for the penal sum of the bond. A limit of liability for each
surety may be stated.
Surplus property means excess personal property not required by any
Federal agency as determined by the Administrator of the General
Services Administration (GSA). (See 41 CFR 102-36.40).
Suspension means action taken by a suspending official under 9.407
to disqualify a contractor temporarily from Government contracting and
Government-approved subcontracting; a contractor that is disqualified is
``suspended.''
Sustainable acquisition means acquiring goods and services in order
to create and maintain conditions--
(1) Under which humans and nature can exist in productive harmony;
and
(2) That permit fulfilling the social, economic, and other
requirements of present and future generations.
System for Award Management (SAM) means the primary Government
repository for prospective Federal awardee and Federal awardee
information and the centralized Government system for certain
contracting, grants, and other assistance-related processes. It
includes--
(1) Data collected from prospective Federal awardees required for
the conduct of business with the Government;
(2) Prospective contractor-submitted annual representations and
certifications in accordance with FAR subpart 4.12; and
[[Page 46]]
(3) Identification of those parties excluded from receiving Federal
contracts, certain subcontracts, and certain types of Federal financial
and non-financial assistance and benefits.
Task order means an order for services placed against an established
contract or with Government sources.
Taxpayer Identification Number (TIN) means the number required by
the IRS to be used by the offeror in reporting income tax and other
returns. The TIN may be either a Social Security Number or an Employer
Identification Number.
Technical data means recorded information (regardless of the form or
method of the recording) of a scientific or technical nature (including
computer databases and computer software documentation). This term does
not include computer software or financial, administrative, cost or
pricing, or management data or other information incidental to contract
administration. The term includes recorded information of a scientific
or technical nature that is included in computer databases (see 41
U.S.C. 116).
Terminated portion of the contract means the portion of a contract
that the contractor is not to perform following a partial termination.
For construction contracts that have been completely terminated for
convenience, it means the entire contract, notwithstanding the
completion of, and payment for, individual items of work before
termination.
Termination for convenience means the exercise of the Government's
right to completely or partially terminate performance of work under a
contract when it is in the Government's interest.
Termination for default means the exercise of the Government's right
to completely or partially terminate a contract because of the
contractor's actual or anticipated failure to perform its contractual
obligations.
Termination inventory means any property purchased, supplied,
manufactured, furnished, or otherwise acquired for the performance of a
contract subsequently terminated and properly allocable to the
terminated portion of the contract. It includes Government-furnished
property. It does not include any facilities, material, special test
equipment, or special tooling that are subject to a separate contract or
to a special contract requirement governing their use or disposition.
Unallowable cost means any cost that, under the provisions of any
pertinent law, regulation, or contract, cannot be included in prices,
cost-reimbursements, or settlements under a Government contract to which
it is allocable.
Unique and innovative concept, when used relative to an unsolicited
research proposal, means that--
(1) In the opinion and to the knowledge of the Government evaluator,
the meritorious proposal--
(i) Is the product of original thinking submitted confidentially by
one source;
(ii) Contains new, novel, or changed concepts, approaches, or
methods;
(iii) Was not submitted previously by another; and
(iv) Is not otherwise available within the Federal Government.
(2) In this context, the term does not mean that the source has the
sole capability of performing the research.
Unique entity identifier means a number or other identifier used to
identify a specific commercial, nonprofit, or Government entity. See
www.sam.gov for the designated entity for establishing unique entity
identifiers.
United States, when used in a geographic sense, means the 50 States
and the District of Columbia, except as follows:
(1) For use in subpart 3.10, see the definition at 3.1001.
(2) For use in subpart 22.8, see the definition at 22.801.
(3) For use in subpart 22.10, see the definition at 22.1001.
(4) For use in subpart 22.13, see the definition at 22.1301.
(5) For use in subpart 22.16, see the definition at 22.1601.
(6) For use in subpart 22.17, see the definition at 22.1702.
(7) For use in subpart 22.18, see the definition at 22.1801.
(8) For use in subpart 22.19, see the definition at 22.1901.
(9) For use in part 23, see definition at 23.001.
(10) For use in part 25, see the definition at 25.003.
[[Page 47]]
(11) For use in part 27, see the definition at 27.001.
(12) For use in subpart 47.4, see the definition at 47.401.
Unsolicited proposal means a written proposal for a new or
innovative idea that is submitted to an agency on the initiative of the
offeror for the purpose of obtaining a contract with the Government, and
that is not in response to a request for proposals, Broad Agency
Announcement, Small Business Innovation Research topic, Small Business
Technology Transfer Research topic, Program Research and Development
Announcement, or any other Government-initiated solicitation or program.
Value engineering means an analysis of the functions of a program,
project, system, product, item of equipment, building, facility,
service, or supply of an executive agency, performed by qualified agency
or contractor personnel, directed at improving performance, reliability,
quality, safety, and life-cycle costs (41 U.S.C. 1711). For use in the
clause at 52.248-2, see the definition at 52.248-2(b).
Value engineering change proposal (VECP)- (1) Means a proposal
that--
(i) Requires a change to the instant contract to implement; and
(ii) Results in reducing the overall projected cost to the agency
without impairing essential functions or characteristics, provided, that
it does not involve a change--
(A) In deliverable end item quantities only;
(B) In research and development (R&D) items or R&D test quantities
that are due solely to results of previous testing under the instant
contract; or
(C) To the contract type only.
(2) For use in the clauses at--
(i) 52.248-2, see the definition at 52.248-2(b); and
(ii) 52.248-3, see the definition at 52.248-3(b).
Veteran-owned small business concern means a small business
concern--
(1) Not less than 51 percent of which is owned by one or more
veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any
publicly owned business, not less than 51 percent of the stock of which
is owned by one or more veterans; and
(2) The management and daily business operations of which are
controlled by one or more veterans.
Virgin material means--
(1) Previously unused raw material, including previously unused
copper, aluminum, lead, zinc, iron, other metal or metal ore; or
(2) Any undeveloped resource that is, or with new technology will
become, a source of raw materials.
Voluntary consensus standards means common and repeated use of
rules, conditions, guidelines or characteristics for products, or
related processes and production methods and related management systems.
Voluntary Consensus Standards are developed or adopted by domestic and
international voluntary consensus standard making bodies (e.g.,
International Organization for Standardization (ISO) and ASTM-
International). See OMB Circular A-119.
Warranty means a promise or affirmation given by a contractor to the
Government regarding the nature, usefulness, or condition of the
supplies or performance of services furnished under the contract.
Waste reduction means preventing or decreasing the amount of waste
being generated through waste prevention, recycling, or purchasing
recycled and environmentally preferable products.
Water consumption intensity means water consumption per square foot
of building space.
Women-owned small business concern means--
(1) A small business concern--
(i) That is at least 51 percent owned by one or more women; or, in
the case of any publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and
(ii) Whose management and daily business operations are controlled
by one or more women; or
(2) A small business concern eligible under the Women-Owned Small
Business Program in accordance with 13 CFR part 127 (see subpart 19.15).
Women-Owned Small Business (WOSB) Program. (1) Women-Owned Small
Business (WOSB) Program means a program that authorizes contracting
officers to limit competition, including award on a sole source basis,
to--
[[Page 48]]
(i) Economically disadvantaged women-owned small business (EDWOSB)
concerns eligible under the WOSB Program for Federal contracts assigned
a North American Industry Classification Systems (NAICS) code in an
industry in which the Small Business Administration (SBA) has determined
that WOSB concerns are underrepresented in Federal procurement; and
(ii) WOSB concerns eligible under the WOSB Program for Federal
contracts assigned a NAICS code in an industry in which SBA has
determined that WOSB concerns are substantially underrepresented in
Federal procurement.
(2) Economically disadvantaged women-owned small business (EDWOSB)
concern means a small business concern that is at least 51 percent
directly and unconditionally owned by, and the management and daily
business operations of which are controlled by, one or more women who
are citizens of the United States and who are economically disadvantaged
in accordance with 13 CFR part 127. It automatically qualifies as a
women-owned small business (WOSB) concern eligible under the WOSB
Program.
(3) Women-owned small business (WOSB) concern eligible under the
WOSB Program means a small business concern that is at least 51 percent
directly and unconditionally owned by, and the management and daily
business operations of which are controlled by, one or more women who
are citizens of the United States (13 CFR part 127).
Writing or written (see ``in writing'').
[66 FR 2118, Jan. 10, 2001]
Editorial Note: For Federal Register citations affecting section
2.101, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.govinfo.gov.
Effective Date Note: At 87 FR 58223, 58234, 58240, Sept. 23, 2022,
Sec.2.101 was amended, effective Oct. 28, 2022.
Subpart 2.2_Definitions Clause
2.201 Contract clause.
Insert the clause at 52.202-1, Definitions, in solicitations and
contracts that exceed the simplified acquisition threshold.
[69 FR 34228, June 18, 2004]
PART 3_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST--Table of Contents
Sec.
3.000 Scope of part.
Subpart 3.1_Safeguards
3.101 Standards of conduct.
3.101-1 General.
3.101-2 Solicitation and acceptance of gratuities by Government
personnel.
3.101-3 Agency regulations.
3.102 [Reserved]
3.103 Independent pricing.
3.103-1 Solicitation provision.
3.103-2 Evaluating the certification.
3.103-3 The need for further certifications.
3.104 Procurement integrity.
3.104-1 Definitions.
3.104-2 General.
3.104-3 Statutory and related prohibitions, restrictions, and
requirements.
3.104-4 Disclosure, protection, and marking of contractor bid or
proposal information and source selection information.
3.104-5 Disqualification.
3.104-6 Ethics advisory opinions regarding prohibitions on a former
official's acceptance of compensation from a contractor.
3.104-7 Violations or possible violations.
3.104-8 Criminal and civil penalties, and further administrative
remedies.
3.104-9 Contract clauses.
Subpart 3.2_Contractor Gratuities to Government Personnel
3.201 Applicability.
3.202 Contract clause.
3.203 Reporting suspected violations of the Gratuities clause.
3.204 Treatment of violations.
Subpart 3.3_Reports of Suspected Antitrust Violations
3.301 General.
3.302 Definitions.
3.303 Reporting suspected antitrust violations.
Subpart 3.4_Contingent Fees
3.400 Scope of subpart.
3.401 Definitions.
3.402 Statutory requirements.
3.403 Applicability.
3.404 Contract clause.
[[Page 49]]
3.405 Misrepresentations or violations of the Covenant Against
Contingent Fees.
3.406 Records.
Subpart 3.5_Other Improper Business Practices
3.501 Buying-in.
3.501-1 Definition.
3.501-2 General.
3.502 Subcontractor kickbacks.
3.502-1 Definitions.
3.502-2 Subcontractor kickbacks.
3.502-3 Contract clause.
3.503 Unreasonable restrictions on subcontractor sales.
3.503-1 Policy.
3.503-2 Contract clause.
Subpart 3.6_Contracts With Government Employees or Organizations Owned
or Controlled by Them
3.601 Policy.
3.602 Exceptions.
3.603 Responsibilities of the contracting officer.
Subpart 3.7_Voiding and Rescinding Contracts
3.700 Scope of subpart.
3.701 Purpose.
3.702 Definition.
3.703 Authority.
3.704 Policy.
3.705 Procedures.
Subpart 3.8_Limitation on the Payment of Funds to Influence Federal
Transactions
3.800 Scope of subpart.
3.801 Definitions.
3.802 Statutory prohibition and requirement.
3.803 Exceptions.
3.804 Policy.
3.805 Exemption.
3.806 Processing suspected violations.
3.807 Civil penalties.
3.808 Solicitation provision and contract clause.
Subpart 3.9_Whistleblower Protections for Contractor Employees
3.900 Scope of subpart.
3.901 Definitions.
3.902 [Reserved]
3.903 Policy.
3.904 Procedures for filing complaints.
3.905 Procedures for investigating complaints.
3.906 Remedies.
3.907 Whistleblower Protections Under the American Recovery and
Reinvestment Act of 2009 (the Recovery Act).
3.907-1 Definitions.
3.907-2 Policy.
3.907-3 Procedures for filing complaints.
3.907-4 Procedures for investigating complaints.
3.907-5 Access to investigative file of Inspector General.
3.907-6 Remedies and enforcement authority.
3.907-7 Contract clause.
3.908 Pilot program for enhancement of contractor employee whistleblower
protections
3.908-1 Scope of section.
3.908-2 Definitions.
3.908-3 Policy.
3.908-4 Filing complaints.
3.908-5 Procedures for investigating complaints.
3.908-6 Remedies.
3.908-7 Enforcement of orders.
3.908-8 Classified information.
3.908-9 Contract clause.
3.909 Prohibition on providing funds to an entity that requires certain
internal confidentiality agreements or statements.
3.909-1 Prohibition.
3.909-2 Representation by the offeror.
3.909-3 Solicitation provision and contract clause.
Subpart 3.10_Contractor Code of Business Ethics and Conduct
3.1000 Scope of subpart.
3.1001 Definitions.
3.1002 Policy.
3.1003 Requirements.
3.1004 Contract clauses.
Subpart 3.11_Preventing Personal Conflicts of Interest for Contractor
Employees Performing Acquisition Functions
3.1100 Scope of subpart.
3.1101 Definitions.
3.1102 Policy.
3.1103 Procedures.
3.1104 Mitigation or waiver.
3.1105 Violations.
3.1106 Contract clause.
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C.
20113.
Source: 48 FR 42108, Sept. 19, 1983, unless otherwise noted.
3.000 Scope of part.
This part prescribes policies and procedures for avoiding improper
business practices and personal conflicts of interest and for dealing
with their apparent or actual occurrence.
[[Page 50]]
Subpart 3.1_Safeguards
3.101 Standards of conduct.
3.101-1 General.
Government business shall be conducted in a manner above reproach
and, except as authorized by statute or regulation, with complete
impartiality and with preferential treatment for none. Transactions
relating to the expenditure of public funds require the highest degree
of public trust and an impeccable standard of conduct. The general rule
is to avoid strictly any conflict of interest or even the appearance of
a conflict of interest in Government-contractor relationships. While
many Federal laws and regulations place restrictions on the actions of
Government personnel, their official conduct must, in addition, be such
that they would have no reluctance to make a full public disclosure of
their actions.
3.101-2 Solicitation and acceptance of gratuities by Government personnel.
As a rule, no Government employee may solicit or accept, directly or
indirectly, any gratuity, gift, favor, entertainment, loan, or anything
of monetary value from anyone who (a) has or is seeking to obtain
Government business with the employee's agency, (b) conducts activities
that are regulated by the employee's agency, or (c) has interests that
may be substantially affected by the performance or nonperformance of
the employee's official duties. Certain limited exceptions are
authorized in agency regulations.
3.101-3 Agency regulations.
(a) Agencies are required by Executive Order 11222 of May 8, 1965,
and 5 CFR part 735 to prescribe Standards of Conduct. These agency
standards contain--
(1) Agency-authorized exceptions to 3.101-2; and
(2) Disciplinary measures for persons violating the standards of
conduct.
(b) Requirements for employee financial disclosure and restrictions
on private employment for former Government employees are in Office of
Personnel Management and agency regulations implementing Public Law 95-
521, which amended 18 U.S.C. 207.
3.102 [Reserved]
3.103 Independent pricing.
3.103-1 Solicitation provision.
The contracting officer shall insert the provision at 52.203-2,
Certificate of Independent Price Determination, in solicitations when a
firm-fixed-price contract or fixed-price contract with economic price
adjustment is contemplated, unless--
(a) The acquisition is to be made under the simplified acquisition
procedures in part 13;
(b) [Reserved]
(c) The solicitation is a request for technical proposals under two-
step sealed bidding procedures; or
(d) The solicitation is for utility services for which rates are set
by law or regulation.
[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985;
50 FR 52429, Dec. 23, 1985; 55 FR 25526, June 21, 1990; 60 FR 34744,
July 3, 1995]
3.103-2 Evaluating the certification.
(a) Evaluation guidelines. (1) None of the following, in and of
itself, constitutes disclosure as it is used in paragraph (a)(2) of the
Certificate of Independent Price Determination (hereafter, the
certificate):
(i) The fact that a firm has published price lists, rates, or
tariffs covering items being acquired by the Government.
(ii) The fact that a firm has informed prospective customers of
proposed or pending publication of new or revised price lists for items
being acquired by the Government.
(iii) The fact that a firm has sold the same items to commercial
customers at the same prices being offered to the Government.
(2) For the purpose of paragraph (b)(2) of the certificate, an
individual may use a blanket authorization to act as an agent for the
person(s) responsible for determining the offered prices if--
(i) The proposed contract to which the certificate applies is
clearly within the scope of the authorization; and
[[Page 51]]
(ii) The person giving the authorization is the person within the
offeror's organization who is responsible for determining the prices
being offered at the time the certification is made in the particular
offer.
(3) If an offer is submitted jointly by two or more concerns, the
certification provided by the representative of each concern applies
only to the activities of that concern.
(b) Rejection of offers suspected of being collusive. (1) If the
offeror deleted or modified paragraph (a)(1) or (3) or paragraph (b) of
the certificate, the contracting officer shall reject the offeror's bid
or proposal.
(2) If the offeror deleted or modified paragraph (a)(2) of the
certificate, the offeror must have furnished with its offer a signed
statement of the circumstances of the disclosure of prices contained in
the bid or proposal. The chief of the contracting office shall review
the altered certificate and the statement and shall determine, in
writing, whether the disclosure was made for the purpose or had the
effect of restricting competition. If the determination is positive, the
bid or proposal shall be rejected; if it is negative, the bid or
proposal shall be considered for award.
(3) Whenever an offer is rejected under paragraph (b)(1) or (2) of
this section, or the certificate is suspected of being false, the
contracting officer shall report the situation to the Attorney General
in accordance with 3.303.
(4) The determination made under paragraph (2) of this section shall
not prevent or inhibit the prosecution of any criminal or civil actions
involving the occurrences or transactions to which the certificate
relates.
[48 FR 42108, Sept. 19, 1983, as amended at 55 FR 25526, June 21, 1990;
84 FR 19839, May 6, 2019]
3.103-3 The need for further certifications.
A contractor that properly executed the certificate before award
does not have to submit a separate certificate with each proposal to
perform a work order or similar ordering instrument issued pursuant to
the terms of the contract, where the Government's requirements cannot be
met from another source.
3.104 Procurement integrity.
3.104-1 Definitions.
As used in this section--
Agency ethics official means the designated agency ethics official
described in 5 CFR 2638.201 or other designated person, including--
(1) Deputy ethics officials described in 5 CFR 2638.204, to whom
authority under 3.104-6 has been delegated by the designated agency
ethics official; and
(2) Alternate designated agency ethics officials described in 5 CFR
2638.202(b).
Compensation means wages, salaries, honoraria, commissions,
professional fees, and any other form of compensation, provided directly
or indirectly for services rendered. Compensation is indirectly provided
if it is paid to an entity other than the individual, specifically in
exchange for services provided by the individual.
Contractor bid or proposal information means any of the following
information submitted to a Federal agency as part of or in connection
with a bid or proposal to enter into a Federal agency procurement
contract, if that information has not been previously made available to
the public or disclosed publicly:
(1) Cost or pricing data (as defined by 10 U.S.C. 2306a(h)(1)) with
respect to procurements subject to that section, and 41 U.S.C.
3501(a)(1), with respect to procurements subject to that section.
(2) Indirect costs and direct labor rates.
(3) Proprietary information about manufacturing processes,
operations, or techniques marked by the contractor in accordance with
applicable law or regulation.
(4) Information marked by the contractor as ``contractor bid or
proposal information'' in accordance with applicable law or regulation.
(5) Information marked in accordance with 52.215-1(e).
Decision to award a subcontract or modification of subcontract means
a decision to designate award to a particular source.
[[Page 52]]
Federal agency procurement means the acquisition (by using
competitive procedures and awarding a contract) of goods or services
(including construction) from non-Federal sources by a Federal agency
using appropriated funds. For broad agency announcements and small
business innovation research programs, each proposal received by an
agency constitutes a separate procurement for purposes of 41 U.S.C.
chapter 21.
In excess of $10,000,000 means--
(1) The value, or estimated value, at the time of award, of the
contract, including all options;
(2) The total estimated value at the time of award of all orders
under an indefinite-delivery, indefinite-quantity, or requirements
contract;
(3) Any multiple award schedule contract, unless the contracting
officer documents a lower estimate;
(4) The value of a delivery order, task order, or an order under a
Basic Ordering Agreement;
(5) The amount paid or to be paid in settlement of a claim; or
(6) The estimated monetary value of negotiated overhead or other
rates when applied to the Government portion of the applicable
allocation base.
Official means--
(1) An officer, as defined in 5 U.S.C. 2104;
(2) An employee, as defined in 5 U.S.C. 2105;
(3) A member of the uniformed services, as defined in 5 U.S.C.
2101(3); or
(4) A special Government employee, as defined in 18 U.S.C. 202.
Participating personally and substantially in a Federal agency
procurement means--
(1) Active and significant involvement of an official in any of the
following activities directly related to that procurement:
(i) Drafting, reviewing, or approving the specification or statement
of work for the procurement.
(ii) Preparing or developing the solicitation.
(iii) Evaluating bids or proposals, or selecting a source.
(iv) Negotiating price or terms and conditions of the contract.
(v) Reviewing and approving the award of the contract.
(2) Participating personally means participating directly, and
includes the direct and active supervision of a subordinate's
participation in the matter.
(3) Participating substantially means that the official's
involvement is of significance to the matter. Substantial participation
requires more than official responsibility, knowledge, perfunctory
involvement, or involvement on an administrative or peripheral issue.
Participation may be substantial even though it is not determinative of
the outcome of a particular matter. A finding of substantiality should
be based not only on the effort devoted to a matter, but on the
importance of the effort. While a series of peripheral involvements may
be insubstantial, the single act of approving or participating in a
critical step may be substantial. However, the review of procurement
documents solely to determine compliance with regulatory,
administrative, or budgetary procedures, does not constitute substantial
participation in a procurement.
(4) Generally, an official will not be considered to have
participated personally and substantially in a procurement solely by
participating in the following activities:
(i) Agency-level boards, panels, or other advisory committees that
review program milestones or evaluate and make recommendations regarding
alternative technologies or approaches for satisfying broad agency-level
missions or objectives.
(ii) The performance of general, technical, engineering, or
scientific effort having broad application not directly associated with
a particular procurement, notwithstanding that such general, technical,
engineering, or scientific effort subsequently may be incorporated into
a particular procurement.
(iii) Clerical functions supporting the conduct of a particular
procurement.
(iv) For procurements to be conducted under the procedures of OMB
Circular A-76, participation in management studies, preparation of in-
house cost estimates, preparation of ``most efficient organization''
analyses, and furnishing of data or technical support
[[Page 53]]
to be used by others in the development of performance standards,
statements of work, or specifications.
Source selection evaluation board means any board, team, council, or
other group that evaluates bids or proposals.
[67 FR 13059, Mar. 20, 2002, as amended at 75 FR 77745, Dec. 13, 2010;
79 FR 24196, Apr. 29, 2014; 86 FR 61019, Nov. 4, 2021]
3.104-2 General.
(a) This section implements 41 U.S.C. chapter 21, Restrictions on
Obtaining and Disclosing Certain Information. Agency supplementation of
3.104, including specific definitions to identify individuals who occupy
positions specified in 3.104-3(d)(1)(ii), and any clauses required by
3.104 must be approved by the senior procurement executive of the
agency, unless a law establishes a higher level of approval for that
agency.
(b) Agency officials are reminded that there are other statutes and
regulations that deal with the same or related prohibited conduct, for
example--
(1) The offer or acceptance of a bribe or gratuity is prohibited by
18 U.S.C. 201 and 10 U.S.C. 2207. The acceptance of a gift, under
certain circumstances, is prohibited by 5 U.S.C. 7353 and 5 CFR part
2635;
(2) Contacts with an offeror during the conduct of an acquisition
may constitute ``seeking employment,''(see subpart F of 5 CFR part 2636
and 3.104-3(c)(2)). Government officers and employees (employees) are
prohibited by 18 U.S.C. 208 and 5 CFR part 2635 from participating
personally and substantially in any particular matter that would affect
the financial interests of any person with whom the employee is seeking
employment. An employee who engages in negotiations or is otherwise
seeking employment with an offeror or who has an arrangement concerning
future employment with an offeror must comply with the applicable
disqualification requirements of 5 CFR 2635.604 and 2635.606. The
statutory prohibition in 18 U.S.C. 208 also may require an employee's
disqualification from participation in the acquisition even if the
employee's duties may not be considered ``participating personally and
substantially,'' as this term is defined in 3.104-1;
(3) Post-employment restrictions are covered by 18 U.S.C. 207 and 5
CFR parts 2637 and 2641, that prohibit certain activities by former
Government employees, including representation of a contractor before
the Government in relation to any contract or other particular matter
involving specific parties on which the former employee participated
personally and substantially while employed by the Government.
Additional restrictions apply to certain senior Government employees and
for particular matters under an employee's official responsibility;
(4) Parts 14 and 15 place restrictions on the release of information
related to procurements and other contractor information that must be
protected under 18 U.S.C. 1905;
(5) Release of information both before and after award (see 3.104-4)
may be prohibited by the Privacy Act (5 U.S.C. 552a), the Trade Secrets
Act (18 U.S.C. 1905), and other laws; and
(6) Using nonpublic information to further an employee's private
interest or that of another and engaging in a financial transaction
using nonpublic information are prohibited by 5 CFR 2635.703.
[67 FR 13059, Mar. 20, 2002, as amended at 79 FR 24196, Apr. 29, 2014]
3.104-3 Statutory and related prohibitions, restrictions,
and requirements.
(a) Prohibition on disclosing procurement information (41 U.S.C.
2102). (1) A person described in paragraph (a)(2) of this subsection
must not, other than as provided by law, knowingly disclose contractor
bid or proposal information or source selection information before the
award of a Federal agency procurement contract to which the information
relates. (See 3.104-4(a).)
(2) Paragraph (a)(1) of this subsection applies to any person who--
(i) Is a present or former official of the United States, or a
person who is acting or has acted for or on behalf of, or who is
advising or has advised the United States with respect to, a Federal
agency procurement; and
[[Page 54]]
(ii) By virtue of that office, employment, or relationship, has or
had access to contractor bid or proposal information or source selection
information.
(b) Prohibition on obtaining procurement information (41 U.S.C.
2102). A person must not, other than as provided by law, knowingly
obtain contractor bid or proposal information or source selection
information before the award of a Federal agency procurement contract to
which the information relates.
(c) Actions required when an agency official contacts or is
contacted by an offeror regarding non-Federal employment (41 U.S.C.
2103) (1) If an agency official, participating personally and
substantially in a Federal agency procurement for a contract in excess
of the simplified acquisition threshold, contacts or is contacted by a
person who is an offeror in that Federal agency procurement regarding
possible non-Federal employment for that official, the official must--
(i) Promptly report the contact in writing to the official's
supervisor and to the agency ethics official; and
(ii) Either reject the possibility of non-Federal employment or
disqualify himself or herself from further personal and substantial
participation in that Federal agency procurement (see 3.104-5) until
such time as the agency authorizes the official to resume participation
in that procurement, in accordance with the requirements of 18 U.S.C.
208 and applicable agency regulations, because--
(A) The person is no longer an offeror in that Federal agency
procurement; or
(B) All discussions with the offeror regarding possible non-Federal
employment have terminated without an agreement or arrangement for
employment.
(2) A contact is any of the actions included as ``seeking
employment'' in 5 CFR 2635.603(b). In addition, unsolicited
communications from offerors regarding possible employment are
considered contacts.
(3) Agencies must retain reports of employment contacts for 2 years
from the date the report was submitted.
(4) Conduct that complies with 41 U.S.C. 2103 may be prohibited by
other criminal statutes and the Standards of Ethical Conduct for
Employees of the Executive Branch. See 3.104-2(b)(2).
(d) Prohibition on former official's acceptance of compensation from
a contractor (41 U.S.C. 2104). (1) A former official of a Federal agency
may not accept compensation from a contractor that has been awarded a
competitive or sole source contract, as an employee, officer, director,
or consultant of the contractor within a period of 1 year after such
former official--
(i) Served, at the time of selection of the contractor or the award
of a contract to that contractor, as the procuring contracting officer,
the source selection authority, a member of a source selection
evaluation board, or the chief of a financial or technical evaluation
team in a procurement in which that contractor was selected for award of
a contract in excess of $10,000,000;
(ii) Served as the program manager, deputy program manager, or
administrative contracting officer for a contract in excess of
$10,000,000 awarded to that contractor; or
(iii) Personally made for the Federal agency a decision to--
(A) Award a contract, subcontract, modification of a contract or
subcontract, or a task order or delivery order in excess of $10,000,000
to that contractor;
(B) Establish overhead or other rates applicable to a contract or
contracts for that contractor that are valued in excess of $10,000,000;
(C) Approve issuance of a contract payment or payments in excess of
$10,000,000 to that contractor; or
(D) Pay or settle a claim in excess of $10,000,000 with that
contractor.
(2) The 1-year prohibition begins on the date--
(i) Of contract award for positions described in paragraph (d)(1)(i)
of this subsection, or the date of contractor selection if the official
was not serving in the position on the date of award;
(ii) The official last served in one of the positions described in
paragraph (d)(1)(ii) of this subsection; or
(iii) The official made one of the decisions described in paragraph
(d)(1)(iii) of this subsection.
[[Page 55]]
(3) Nothing in paragraph (d)(1) of this subsection may be construed
to prohibit a former official of a Federal agency from accepting
compensation from any division or affiliate of a contractor that does
not produce the same or similar products or services as the entity of
the contractor that is responsible for the contract referred to in
paragraph (d)(1) of this subsection.
[67 FR 13059, Mar. 20, 2002, as amended at 79 FR 24196, Apr. 29, 2014;
84 FR 19840, May 6, 2019]
3.104-4 Disclosure, protection, and marking of contractor bid or
proposal information and source selection information.
(a) Except as specifically provided for in this subsection, no
person or other entity may disclose contractor bid or proposal
information or source selection information to any person other than a
person authorized, in accordance with applicable agency regulations or
procedures, by the agency head or the contracting officer to receive
such information.
(b) Contractor bid or proposal information and source selection
information must be protected from unauthorized disclosure in accordance
with 14.401, 15.207, applicable law, and agency regulations.
(c) Individuals unsure if particular information is source selection
information, as defined in 2.101, should consult with agency officials
as necessary. Individuals responsible for preparing material that may be
source selection information as described at paragraph (10) of the
``source selection information'' definition in 2.101 must mark the cover
page and each page that the individual believes contains source
selection information with the legend ``Source Selection Information--
See FAR 2.101 and 3.104.'' Although the information in paragraphs (1)
through (9) of the definition in 2.101 is considered to be source
selection information whether or not marked, all reasonable efforts must
be made to mark such material with the same legend.
(d) Except as provided in paragraph (d)(3) of this subsection, the
contracting officer must notify the contractor in writing if the
contracting officer believes that proprietary information, contractor
bid or proposal information, or information marked in accordance with
52.215-1(e) has been inappropriately marked. The contractor that has
affixed the marking must be given an opportunity to justify the marking.
(1) If the contractor agrees that the marking is not justified, or
does not respond within the time specified in the notice, the
contracting officer may remove the marking and release the information.
(2) If, after reviewing the contractor's justification, the
contracting officer determines that the marking is not justified, the
contracting officer must notify the contractor in writing before
releasing the information.
(3) For technical data marked as proprietary by a contractor, the
contracting officer must follow the procedures in 27.404-5.
(e) This section does not restrict or prohibit--
(1) A contractor from disclosing its own bid or proposal information
or the recipient from receiving that information;
(2) The disclosure or receipt of information, not otherwise
protected, relating to a Federal agency procurement after it has been
canceled by the Federal agency, before contract award, unless the
Federal agency plans to resume the procurement;
(3) Individual meetings between a Federal agency official and an
offeror or potential offeror for, or a recipient of, a contract or
subcontract under a Federal agency procurement, provided that
unauthorized disclosure or receipt of contractor bid or proposal
information or source selection information does not occur; or
(4) The Government's use of technical data in a manner consistent
with the Government's rights in the data.
(f) This section does not authorize--
(1) The withholding of any information pursuant to a proper request
from the Congress, any committee or subcommittee thereof, a Federal
agency, the Comptroller General, or an Inspector General of a Federal
agency, except as otherwise authorized by law or regulation. Any release
containing contractor bid or proposal information or source selection
information must
[[Page 56]]
clearly identify the information as contractor bid or proposal
information or source selection information related to the conduct of a
Federal agency procurement and notify the recipient that the disclosure
of the information is restricted by 41 U.S.C. chapter 21;
(2) The withholding of information from, or restricting its receipt
by, the Comptroller General in the course of a protest against the award
or proposed award of a Federal agency procurement contract;
(3) The release of information after award of a contract or
cancellation of a procurement if such information is contractor bid or
proposal information or source selection information that pertains to
another procurement; or
(4) The disclosure, solicitation, or receipt of bid or proposal
information or source selection information after award if disclosure,
solicitation, or receipt is prohibited by law. (See 3.104-2(b)(5) and
subpart 24.2.)
[67 FR 13059, Mar. 20, 2002, as amended at 72 FR 63049, Nov. 7, 2007; 79
FR 24196, Apr. 29, 2014]
3.104-5 Disqualification.
(a) Contacts through agents or other intermediaries. Employment
contacts between the employee and the offeror, that are conducted
through agents, or other intermediaries, may require disqualification
under 3.104-3(c)(1). These contacts may also require disqualification
under other statutes and regulations. (See 3.104-2(b)(2).)
(b) Disqualification notice. In addition to submitting the contact
report required by 3.104-3(c)(1), an agency official who must disqualify
himself or herself pursuant to 3.104-3(c)(1)(ii) must promptly submit
written notice of disqualification from further participation in the
procurement to the contracting officer, the source selection authority
if other than the contracting officer, and the agency official's
immediate supervisor. As a minimum, the notice must--
(1) Identify the procurement;
(2) Describe the nature of the agency official's participation in
the procurement and specify the approximate dates or time period of
participation; and
(3) Identify the offeror and describe its interest in the
procurement.
(c) Resumption of participation in a procurement. (1) The official
must remain disqualified until such time as the agency, at its sole and
exclusive discretion, authorizes the official to resume participation in
the procurement in accordance with 3.104-3(c)(1)(ii).
(2) After the conditions of 3.104-3(c)(1)(ii)(A) or (B) have been
met, the head of the contracting activity (HCA), after consultation with
the agency ethics official, may authorize the disqualified official to
resume participation in the procurement, or may determine that an
additional disqualification period is necessary to protect the integrity
of the procurement process. In determining the disqualification period,
the HCA must consider any factors that create an appearance that the
disqualified official acted without complete impartiality in the
procurement. The HCA's reinstatement decision should be in writing.
(3) Government officer or employee must also comply with the
provisions of 18 U.S.C. 208 and 5 CFR part 2635 regarding any resumed
participation in a procurement matter. Government officer or employee
may not be reinstated to participate in a procurement matter affecting
the financial interest of someone with whom the individual is seeking
employment, unless the individual receives--
(i) A waiver pursuant to 18 U.S.C. 208(b)(1) or (b)(3); or
(ii) An authorization in accordance with the requirements of subpart
F of 5 CFR part 2635.
[67 FR 13059, Mar. 20, 2002]
3.104-6 Ethics advisory opinions regarding prohibitions on a
former official's acceptance of compensation from a contractor.
(a) An official or former official of a Federal agency who does not
know whether he or she is or would be precluded by 41 U.S.C. 2104 (see
3.104-3(d)) from accepting compensation from a particular contractor may
request advice from the appropriate agency ethics official before
accepting such compensation.
[[Page 57]]
(b) The request for an advisory opinion must be in writing, include
all relevant information reasonably available to the official or former
official, and be dated and signed. The request must include information
about the--
(1) Procurement(s), or decision(s) on matters under 3.104-
3(d)(1)(iii), involving the particular contractor, in which the
individual was or is involved, including contract or solicitation
numbers, dates of solicitation or award, a description of the supplies
or services procured or to be procured, and contract amount;
(2) Individual's participation in the procurement or decision,
including the dates or time periods of that participation, and the
nature of the individual's duties, responsibilities, or actions; and
(3) Contractor, including a description of the products or services
produced by the division or affiliate of the contractor from whom the
individual proposes to accept compensation.
(c) Within 30 days after receipt of a request containing complete
information, or as soon thereafter as practicable, the agency ethics
official should issue an opinion on whether the proposed conduct would
violate 41 U.S.C. 2104.
(d)(1) If complete information is not included in the request, the
agency ethics official may ask the requester to provide more information
or request information from other persons, including the source
selection authority, the contracting officer, or the requester's
immediate supervisor.
(2) In issuing an opinion, the agency ethics official may rely upon
the accuracy of information furnished by the requester or other agency
sources, unless he or she has reason to believe that the information is
fraudulent, misleading, or otherwise incorrect.
(3) If the requester is advised in a written opinion by the agency
ethics official that the requester may accept compensation from a
particular contractor, and accepts such compensation in good faith
reliance on that advisory opinion, then neither the requester nor the
contractor will be found to have knowingly violated 41 U.S.C. 2104. If
the requester or the contractor has actual knowledge or reason to
believe that the opinion is based upon fraudulent, misleading, or
otherwise incorrect information, their reliance upon the opinion will
not be deemed to be in good faith.
[67 FR 13059, Mar. 20, 2002, as amended at 79 FR 24196, Apr. 29, 2014]
3.104-7 Violations or possible violations.
(a) A contracting officer who receives or obtains information of a
violation or possible violation of 41 U.S.C. 2102, 2103, or 2104 (see
3.104-3) must determine if the reported violation or possible violation
has any impact on the pending award or selection of the contractor.
(1) If the contracting officer concludes that there is no impact on
the procurement, the contracting officer must forward the information
concerning the violation or possible violation and documentation
supporting a determination that there is no impact on the procurement to
an individual designated in accordance with agency procedures.
(i) If that individual concurs, the contracting officer may proceed
with the procurement.
(ii) If that individual does not concur, the individual must
promptly forward the information and documentation to the HCA and advise
the contracting officer to withhold award.
(2) If the contracting officer concludes that the violation or
possible violation impacts the procurement, the contracting officer must
promptly forward the information to the HCA.
(b) The HCA must review all information available and, in accordance
with agency procedures, take appropriate action, such as--
(1) Advise the contracting officer to continue with the procurement;
(2) Begin an investigation;
(3) Refer the information disclosed to appropriate criminal
investigative agencies;
(4) Conclude that a violation occurred; or
(5) Recommend that the agency head determine that the contractor, or
someone acting for the contractor, has engaged in conduct constituting
an offense punishable under 41 U.S.C. 2105, for the purpose of voiding
or rescinding the contract.
[[Page 58]]
(c) Before concluding that an offeror, contractor, or person has
violated 41 U.S.C. chapter 21, the HCA may consider that the interests
of the Government are best served by requesting information from
appropriate parties regarding the violation or possible violation.
(d) If the HCA concludes that 41 U.S.C. chapter 21 has been
violated, the HCA may direct the contracting officer to--
(1) If a contract has not been awarded--
(i) Cancel the procurement;
(ii) Disqualify an offeror; or
(iii) Take any other appropriate actions in the interests of the
Government.
(2) If a contract has been awarded--
(i) Effect appropriate contractual remedies, including profit
recapture under the clause at 52.203-10, Price or Fee Adjustment for
Illegal or Improper Activity, or, if the contract has been rescinded
under paragraph (d)(2)(ii) of this subsection, recovery of the amount
expended under the contract;
(ii) Void or rescind the contract with respect to which--
(A) The contractor or someone acting for the contractor has been
convicted for an offense where the conduct constitutes a violation of 41
U.S.C. 2102 for the purpose of either--
(1) Exchanging the information covered by the subsections for
anything of value; or
(2) Obtaining or giving anyone a competitive advantage in the award
of a Federal agency procurement contract; or
(B) The agency head has determined, based upon a preponderance of
the evidence, that the contractor or someone acting for the contractor
has engaged in conduct constituting an offense punishable under 41
U.S.C. 2105(a); or
(iii) Take any other appropriate actions in the best interests of
the Government.
(3) Refer the matter to the agency suspending or debarring official.
(e) The HCA should recommend or direct an administrative or
contractual remedy commensurate with the severity and effect of the
violation.
(f) If the HCA determines that urgent and compelling circumstances
justify an award, or award is otherwise in the interests of the
Government, the HCA, in accordance with agency procedures, may authorize
the contracting officer to award the contract or execute the contract
modification after notifying the agency head.
(g) The HCA may delegate his or her authority under this subsection
to an individual at least one organizational level above the contracting
officer and of General Officer, Flag, Senior Executive Service, or
equivalent rank.
[67 FR 13059, Mar. 20, 2002, as amended at 79 FR 24196, Apr. 29, 2014]
3.104-8 Criminal and civil penalties, and further administrative remedies.
Criminal and civil penalties, and administrative remedies, may apply
to conduct that violates 41 U.S.C. chapter 21 (see 3.104-3). See
33.102(f) for special rules regarding bid protests. See 3.104-7 for
administrative remedies relating to contracts.
(a) An official who knowingly fails to comply with the requirements
of 3.104-3 is subject to the penalties and administrative action set
forth in 41 U.S.C. 2105.
(b) An offeror who engages in employment discussion with an official
subject to the restrictions of 3.104-3, knowing that the official has
not complied with 3.104-3(c)(1), is subject to the criminal, civil, or
administrative penalties set forth in 41 U.S.C. 2105.
(c) An official who refuses to terminate employment discussions (see
3.104-5) may be subject to agency administrative actions under 5 CFR
2635.604(d) if the official's disqualification from participation in a
particular procurement interferes substantially with the individual's
ability to perform assigned duties.
[67 FR 13059, Mar. 20, 2002, as amended at 79 FR 24196, Apr. 29, 2014]
3.104-9 Contract clauses.
In solicitations and contracts that exceed the simplified
acquisition threshold, other than those for commercial products or
commercial services, insert the clauses at--
(a) 52.203-8, Cancellation, Rescission, and Recovery of Funds for
Illegal or Improper Activity; and
[[Page 59]]
(b) 52.203-10, Price or Fee Adjustment for Illegal or Improper
Activity.
[67 FR 13059, Mar. 20, 2002, as amended at 86 FR 61019, Nov. 4, 2021]
Subpart 3.2_Contractor Gratuities to Government Personnel
3.201 Applicability.
This subpart applies to all executive agencies, except that coverage
concerning exemplary damages applies only to the Department of Defense
(10 U.S.C. 2207).
3.202 Contract clause.
The contracting officer shall insert the clause at 52.203-3,
Gratuities, in solicitations and contracts with a value exceeding the
simplified acquisition threshold, except those for personal services and
those between military departments or defense agencies and foreign
governments that do not obligate any funds appropriated to the
Department of Defense.
[61 FR 39200, July 26, 1996]
3.203 Reporting suspected violations of the Gratuities clause.
Agency personnel shall report suspected violations of the Gratuities
clause to the contracting officer or other designated official in
accordance with agency procedures. The agency reporting procedures shall
be published as an implementation of this section 3.203 and shall
clearly specify--
(a) What to report and how to report it; and
(b) The channels through which reports must pass, including the
function and authority of each official designated to review them.
3.204 Treatment of violations.
(a) Before taking any action against a contractor, the agency head
or a designee shall determine, after notice and hearing under agency
procedures, whether the contractor, its agent, or another
representative, under a contract containing the Gratuities clause--
(1) Offered or gave a gratuity (e.g., an entertainment or gift) to
an officer, official, or employee of the Government; and
(2) Intended by the gratuity to obtain a contract or favorable
treatment under a contract (intent generally must be inferred).
(b) Agency procedures shall afford the contractor an opportunity to
appear with counsel, submit documentary evidence, present witnesses, and
confront any person the agency presents. The procedures should be as
informal as practicable, consistent with principles of fundamental
fairness.
(c) When the agency head or designee determines that a violation has
occurred, the Government may--
(1) Terminate the contractor's right to proceed;
(2) Initiate debarment or suspension measures as set forth in
subpart 9.4; and
(3) Assess exemplary damages, if the contract uses money
appropriated to the Department of Defense.
Subpart 3.3_Reports of Suspected Antitrust Violations
3.301 General.
(a) Practices that eliminate competition or restrain trade usually
lead to excessive prices and may warrant criminal, civil, or
administrative action against the participants. Examples of
anticompetitive practices are collusive bidding, follow-the-leader
pricing, rotated low bids, collusive price estimating systems, and
sharing of the business.
(b) Contracting personnel are an important potential source of
investigative leads for antitrust enforcement and should therefore be
sensitive to indications of unlawful behavior by offerors and
contractors. Agency personnel shall report, in accordance with agency
regulations, evidence of suspected antitrust violations in acquisitions
for possible referral to--
(1) The Attorney General under 3.303; and
(2) The agency office responsible for contractor debarment and
suspension under subpart 9.4.
[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985;
50 FR 52429, Dec. 23, 1985; 84 FR 19840, May 6, 2019]
[[Page 60]]
3.302 Definitions.
As used in this subpart--
Identical bids means bids for the same line item that are determined
to be identical as to unit price or total line item amount, with or
without the application of evaluation factors (e.g., discount or
transportation cost).
[49 FR 12974, Mar. 30, 1984, as amended at 66 FR 2127, Jan. 10, 2001; 67
FR 13055, Mar. 20, 2002; 82 FR 4711, Jan. 13, 2017]
3.303 Reporting suspected antitrust violations.
(a) Agencies are required by 41 U.S.C. 3707 and 10 U.S.C. 2305(b)(9)
to report to the Attorney General any bids or proposals that evidence a
violation of the antitrust laws. These reports are in addition to those
required by subpart 9.4.
(b) The antitrust laws are intended to ensure that markets operate
competitively. Any agreement or mutual understanding among competing
firms that restrains the natural operation of market forces is suspect.
Paragraph (c) of this section identifies behavior patterns that are
often associated with antitrust violations. Activities meeting the
descriptions in paragraph (c) are not necessarily improper, but they are
sufficiently questionable to warrant notifying the appropriate
authorities, in accordance with agency procedures.
(c) Practices or events that may evidence violations of the
antitrust laws include--
(1) The existence of an industry price list or price agreement to
which contractors refer in formulating their offers;
(2) A sudden change from competitive bidding to identical bidding;
(3) Simultaneous price increases or follow-the-leader pricing;
(4) Rotation of bids or proposals, so that each competitor takes a
turn in sequence as low bidder, or so that certain competitors bid low
only on some sizes of contracts and high on other sizes;
(5) Division of the market, so that certain competitors bid low only
for contracts awarded by certain agencies, or for contracts in certain
geographical areas, or on certain products, and bid high on all other
jobs;
(6) Establishment by competitors of a collusive price estimating
system;
(7) The filing of a joint bid by two or more competitors when at
least one of the competitors has sufficient technical capability and
productive capacity for contract performance;
(8) Any incidents suggesting direct collusion among competitors,
such as the appearance of identical calculation or spelling errors in
two or more competitive offers or the submission by one firm of offers
for other firms; and
(9) Assertions by the employees, former employees, or competitors of
offerors, that an agreement to restrain trade exists.
(d) Identical bids shall be reported under this section if the
agency has some reason to believe that the bids resulted from collusion.
(e) For offers from foreign contractors for contracts to be
performed outside the United States and its outlying areas, contracting
officers may refer suspected collusive offers to the authorities of the
foreign government concerned for appropriate action.
(f) Agency reports shall be addressed to the Attorney General, U.S.
Department of Justice, Washington, DC 20530, Attention: Assistant
Attorney General, Antitrust Division, and shall include--
(1) A brief statement describing the suspected practice and the
reason for the suspicion; and
(2) The name, address, and telephone number of an individual in the
agency who can be contacted for further information.
(g) Questions concerning this reporting requirement may be
communicated by telephone directly to the Office of the Assistant
Attorney General, Antitrust Division.
[48 FR 42108, Sept. 19, 1983, as amended at 49 FR 12974, Mar. 30, 1984;
50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 55 FR 25526, June
21, 1990; 65 FR 36030, June 6, 2000; 68 FR 28080, May 22, 2003; 79 FR
24196, Apr. 29, 2014; 84 FR 19840, May 6, 2019]
Subpart 3.4_Contingent Fees
3.400 Scope of subpart.
This subpart prescribes policies and procedures that restrict
contingent fee
[[Page 61]]
arrangements for soliciting or obtaining Government contracts to those
permitted by 10 U.S.C. 2306(b) and 41 U.S.C. 3901.
[48 FR 42108, Sept. 19, 1983, as amended at 79 FR 24196, Apr. 29, 2014]
3.401 Definitions.
As used in this subpart--
Bona fide agency, means an established commercial or selling agency,
maintained by a contractor for the purpose of securing business, that
neither exerts nor proposes to exert improper influence to solicit or
obtain Government contracts nor holds itself out as being able to obtain
any Government contract or contracts through improper influence.
Bona fide employee, means a person, employed by a contractor and
subject to the contractor's supervision and control as to time, place,
and manner of performance, who neither exerts nor proposes to exert
improper influence to solicit or obtain Government contracts nor holds
out as being able to obtain any Government contract or contracts through
improper influence.
Contingent fee, means any commission, percentage, brokerage, or
other fee that is contingent upon the success that a person or concern
has in securing a Government contract.
Improper influence, means any influence that induces or tends to
induce a Government employee or officer to give consideration or to act
regarding a Government contract on any basis other than the merits of
the matter.
[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]
3.402 Statutory requirements.
Contractors' arrangements to pay contingent fees for soliciting or
obtaining Government contracts have long been considered contrary to
public policy because such arrangements may lead to attempted or actual
exercise of improper influence. In 10 U.S.C. 2306(b) and 41 U.S.C. 3901,
Congress affirmed this public policy but permitted certain exceptions.
These statutes--
(a) Require in every negotiated contract a warranty by the
contractor against contingent fees;
(b) Permit, as an exception to the warranty, contingent fee
arrangements between contractors and bona fide employees or bona fide
agencies; and
(c) Provide that, for breach or violation of the warranty by the
contractor, the Government may annul the contract without liability or
deduct from the contract price or consideration, or otherwise recover,
the full amount of the contingent fee.
[48 FR 42108, Sept. 19, 1983, as amended at 79 FR 24196, Apr. 29, 2014]
3.403 Applicability.
This subpart applies to all contracts. Statutory requirements for
negotiated contracts are, as a matter of policy, extended to sealed bid
contracts.
[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985;
50 FR 52429, Dec. 23, 1985]
3.404 Contract clause.
The contracting officer shall insert the clause at 52.203-5,
Covenant Against Contingent Fees, in all solicitations and contracts
exceeding the simplified acquisition threshold, other than those for
commercial products or commercial services (see parts 2 and 12).
[61 FR 39188, July 26, 1996, as amended at 86 FR 61020, Nov. 4, 2021]
3.405 Misrepresentations or violations of the Covenant Against Contingent Fees.
(a) Government personnel who suspect or have evidence of attempted
or actual exercise of improper influence, misrepresentation of a
contingent fee arrangement, or other violation of the Covenant Against
Contingent Fees shall report the matter promptly to the contracting
officer or appropriate higher authority in accordance with agency
procedures.
(b) When there is specific evidence or other reasonable basis to
suspect one or more of the violations in paragraph (a) of this section,
the chief of the contracting office shall review the facts and, if
appropriate, take or direct one or more of the following, or other,
actions:
(1) If before award, reject the bid or proposal.
[[Page 62]]
(2) If after award, enforce the Government's right to annul the
contract or to recover the fee.
(3) Initiate suspension or debarment action under subpart 9.4.
(4) Refer suspected fraudulent or criminal matters to the Department
of Justice, as prescribed in agency regulations.
[48 FR 42108, Sept. 19, 1983. Redesignated at 61 FR 39188, July 26,
1996; 84 FR 19840, May 6, 2019]
3.406 Records.
For enforcement purposes, agencies shall preserve any specific
evidence of one or more of the violations in 3.405(a), together with all
other pertinent data, including a record of actions taken. Contracting
offices shall not retire or destroy these records until it is certain
that they are no longer needed for enforcement purposes. If the original
record is maintained in a central file, a copy must be retained in the
contract file.
[48 FR 42108, Sept. 19, 1983. Redesignated and amended at 61 FR 39188,
July 26, 1996]
Subpart 3.5_Other Improper Business Practices
3.501 Buying-in.
3.501-1 Definition.
Buying-in as used in this section, means submitting an offer below
anticipated costs, expecting to--
(1) Increase the contract amount after award (e.g., through
unnecessary or excessively priced change orders); or
(2) Receive follow-on contracts at artificially high prices to
recover losses incurred on the buy-in contract.
[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]
3.501-2 General.
(a) Buying-in may decrease competition or result in poor contract
performance. The contracting officer must take appropriate action to
ensure buying-in losses are not recovered by the contractor through the
pricing of--
(1) Change orders; or
(2) Follow-on contracts subject to cost analysis.
(b) The Government should minimize the opportunity for buying-in by
seeking a price commitment covering as much of the entire program
concerned as is practical by using--
(1) Multiyear contracting, with a requirement in the solicitation
that a price be submitted only for the total multiyear quantity; or
(2) Priced options for additional quantities that, together with the
firm contract quantity, equal the program requirements (see subpart
17.2).
(c) Other safeguards are available to the contracting officer to
preclude recovery of buying-in losses (e.g., amortization of
nonrecurring costs (see 15.408, Table 15-2, paragraph A., column (2)
under ``Formats for Submission of Line Item Summaries'') and treatment
of unreasonable price quotations (see 15.405).
[48 FR 42108, Sept. 19, 1983, as amended at 62 FR 51270, Sept. 30, 1997;
84 FR 19840, May 6, 2019]
3.502 Subcontractor kickbacks.
3.502-1 Definitions.
As used in this section--
Kickback, means any money, fee, commission, credit, gift, gratuity,
thing of value, or compensation of any kind which is provided to any
prime contractor, prime contractor employee, subcontractor, or
subcontractor employee for the purpose of improperly obtaining or
rewarding favorable treatment in connection with a prime contract or in
connection with a subcontract relating to a prime contract.
Person, means a corporation, partnership, business association of
any kind, trust, joint-stock company, or individual.
Prime contract, means a contract or contractual action entered into
by the United States for the purpose of obtaining supplies, materials,
equipment, or services of any kind.
Prime Contractor, means a person who has entered into a prime
contract with the United States.
Prime Contractor employee, as used in this section, means any
officer, partner, employee, or agent of a prime contractor.
[[Page 63]]
Subcontract, means a contract or contractural action entered into by
a prime contractor or subcontractor for the purpose of obtaining
supplies, materials, equipment, or services of any kind under a prime
contract.
Subcontractor--(1) Means any person, other than the prime
contractor, who offers to furnish or furnishes any supplies, materials,
equipment, or services of any kind under a prime contract or a
subcontract entered into in connection with such prime contract; and
(2) Includes any person who offers to furnish or furnishes general
supplies to the prime contractor or a higher tier subcontractor.
[52 FR 6121, Feb. 27, 1987, as amended at 53 FR 34226, Sept. 2, 1988; 66
FR 2127, Jan. 10, 2001; 79 FR 24196, Apr. 29, 2014; 84 FR 19840, May 6,
2019]
3.502-2 Subcontractor kickbacks.
The Anti-Kickback Act of 1986 (now codified at 41 U.S.C. chapter 87,
Kickbacks,) was passed to deter subcontractors from making payments and
contractors from accepting payments for the purpose of improperly
obtaining or rewarding favorable treatment in connection with a prime
contract or a subcontract relating to a prime contract. The Kickbacks
statute--
(a) Prohibits any person from--
(1) Providing, attempting to provide, or offering to provide any
kickback;
(2) Soliciting, accepting, or attempting to accept any kickbacks; or
(3) Including, directly or indirectly, the amount of any kickback in
the contract price charged by a subcontractor to a prime contractor or a
higher tier subcontractor or in the contract price charged by a prime
contractor to the United States.
(b) Imposes criminal penalties on any person who knowingly and
willfully engages in the prohibited conduct addressed in paragraph (a)
of this section.
(c) Provides for the recovery of civil penalties by the United
States from any person who knowingly engages in such prohibited conduct
and from any person whose employee, subcontractor, or subcontractor
employee provides, accepts, or charges a kickback.
(d) Provides that--
(1) The contracting officer may offset the amount of a kickback
against monies owed by the United States to the prime contractor under
the prime contract to which such kickback relates;
(2) The contracting officer may direct a prime contractor to
withhold from any sums owed to a subcontractor under a subcontract of
the prime contract the amount of any kickback which was or may be offset
against the prime contractor under paragraph (d)(1) of this section; and
(3) An offset under paragraph (d)(1) or a direction under paragraph
(d)(2) of this section is a claim by the Government for the purposes of
41 U.S.C. chapter 71, Contract Disputes.
(e) Authorizes contracting officers to order that sums withheld
under paragraph (d)(2) of this section be paid to the contracting
agency, or if the sum has already been offset against the prime
contractor, that it be retained by the prime contractor.
(f) Requires the prime contractor to notify the contracting officer
when the withholding under paragraph (d)(2) of this section has been
accomplished unless the amount withheld has been paid to the Government.
(g) Requires a prime contractor or subcontractor to report in
writing to the inspector general of the contracting agency, the head of
the contracting agency if the agency does not have an inspector general,
or the Attorney General any possible violation of the Kickbacks statute
when the prime contractor or subcontractor has reasonable grounds to
believe such violation may have occurred.
(h) Provides that, for the purpose of ascertaining whether there has
been a violation of the Kickbacks statute with respect to any prime
contract, the Government Accountability Office and the inspector general
of the contracting agency, or a representative of such contracting
agency designated by the head of such agency if the agency does not have
an inspector general, shall have access to and may inspect the
facilities and audit the books and records, including any electronic
data or records, of any prime contractor or subcontractor under a prime
contract awarded by such agency.
(i) Requires each contracting agency to include in each prime
contract, other than for commercial products or
[[Page 64]]
commercial services, exceeding $150,000, a requirement that the prime
contractor shall--
(1) Have in place and follow reasonable procedures designed to
prevent and detect violations of the Kickbacks statute in its own
operations and direct business relationships (e.g., company ethics rules
prohibiting kickbacks by employees, agents, or subcontractors; education
programs for new employees and subcontractors, explaining policies about
kickbacks, related company procedures and the consequences of detection;
procurement procedures to minimize the opportunity for kickbacks; audit
procedures designed to detect kickbacks; periodic surveys of
subcontractors to elicit information about kickbacks; procedures to
report kickbacks to law enforcement officials; annual declarations by
employees of gifts or gratuities received from subcontractors; annual
employee declarations that they have violated no company ethics rules;
personnel practices that document unethical or illegal behavior and make
such information available to prospective employers); and
(2) Cooperate fully with any Federal agency investigating a possible
violation of the Kickbacks statute.
(j) Notwithstanding paragraph (i) of this section, a prime
contractor shall cooperate fully with any Federal Government agency
investigating a violation of 41 U.S.C. 8702 (see 41 U.S.C. 8703(b)).
[52 FR 6121, Feb. 27, 1987; 52 FR 9989, Mar. 27, 1987, as amended at 53
FR 34226, Sept. 2, 1988; 60 FR 48235, Sept. 18, 1995; 61 FR 39191, July
26, 1996; 62 FR 235, Jan. 2, 1997; 71 FR 57380, Sept. 28, 2006; 75 FR
53131, Aug. 30, 2010; 79 FR 24196, Apr. 29, 2014; 84 FR 19840, May 6,
2019; 86 FR 61020, Nov. 4, 2021]
3.502-3 Contract clause.
The contracting officer shall insert the clause at 52.203-7, Anti-
Kickback Procedures, in solicitations and contracts exceeding $150,000,
other than those for commercial products or commercial services (see
part 12).
[60 FR 48235, Sept. 18, 1995, as amended at 61 FR 39190, July 26, 1996;
85 FR 40067, July 2, 2020; 86 FR 61020, Nov. 4, 2021]
3.503 Unreasonable restrictions on subcontractor sales.
3.503-1 Policy.
10 U.S.C. 2402 and 41 U.S.C. 4704 require that subcontractors not be
unreasonably precluded from making direct sales to the Government of any
supplies or services made or furnished under a contract. However, this
does not preclude contractors from asserting rights that are otherwise
authorized by law or regulation.
[50 FR 35475, Aug. 30, 1985, and 51 FR 27116, July 29, 1986; 79 FR
24196, Apr. 29, 2014]
3.503-2 Contract clause.
The contracting officer shall insert the clause at 52.203-6,
Restrictions on Subcontractor Sales to the Government, in solicitations
and contracts exceeding the simplified acquisition threshold. For the
acquisition of commercial products or commercial services, the
contracting officer shall use the clause with its Alternate I.
[74 FR 11832, Mar. 19, 2009, as amended at 86 FR 61020, Nov. 4, 2021]
Subpart 3.6_Contracts With Government Employees or Organizations Owned
or Controlled by Them
3.601 Policy.
(a) Except as specified in 3.602, a contracting officer shall not
knowingly award a contract to a Government employee or to a business
concern or other organization owned or substantially owned or controlled
by one or more Government employees. This policy is intended to avoid
any conflict of interest that might arise between the employees'
interests and their Government duties, and to avoid the appearance of
favoritism or preferential treatment by the Government toward its
employees.
(b) For purposes of this subpart, special Government employees (as
defined in 18 U.S.C. 202) performing services as experts, advisors, or
consultants, or as members of advisory committees, are not considered
Government employees unless--
[[Page 65]]
(1) The contract arises directly out of the individual's activity as
a special Government employee;
(2) In the individual's capacity as a special Government employee,
the individual is in a position to influence the award of the contract;
or
(3) Another conflict of interest is determined to exist.
[55 FR 34864, Aug. 24, 1990]
3.602 Exceptions.
The agency head, or a designee not below the level of the head of
the contracting activity, may authorize an exception to the policy in
3.601 only if there is a most compelling reason to do so, such as when
the Government's needs cannot reasonably be otherwise met.
3.603 Responsibilities of the contracting officer.
(a) Before awarding a contract, the contracting officer shall obtain
an authorization under 3.602 if--
(1) The contracting officer knows, or has reason to believe, that a
prospective contractor is one to which award is otherwise prohibited
under 3.601; and
(2) There is a most compelling reason to make an award to that
prospective contractor.
(b) The contracting officer shall comply with the requirements and
guidance in subpart 9.5 before awarding a contract to an organization
owned or substantially owned or controlled by Government employees.
Subpart 3.7_Voiding and Rescinding Contracts
Source: 51 FR 27116, July 29, 1986, unless otherwise noted.
3.700 Scope of subpart.
(a) This subpart prescribes Governmentwide policies and procedures
for exercising discretionary authority to declare void and rescind
contracts in relation to which--
(1) There has been a final conviction for bribery, conflict of
interest, disclosure or receipt of contractor bid or proposal
information or source selection information in exchange for a thing of
value or to give anyone a competitive advantage in the award of a
Federal agency procurement contract, or similar misconduct; or
(2) There has been an agency head determination that contractor bid
or proposal information or source selection information has been
disclosed or received in exchange for a thing of value, or for the
purpose of obtaining or giving anyone a competitive advantage in the
award of a Federal agency procurement contract.
(b) This subpart does not prescribe policies or procedures for, or
govern the exercise of, any other remedy available to the Government
with respect to such contracts, including but not limited to, the common
law right of avoidance, rescission, or cancellation.
[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997]
3.701 Purpose.
This subpart provides--
(a) An administrative remedy with respect to contracts in relation
to which there has been--
(1) A final conviction for bribery, conflict of interest, disclosure
or receipt of contractor bid or proposal information or source selection
information in exchange for a thing of value or to give anyone a
competitive advantage in the award of a Federal agency procurement
contract, or similar misconduct; or
(2) An agency head determination that contractor bid or proposal
information or source selection information has been disclosed or
received in exchange for a thing of value, or for the purpose of
obtaining or giving anyone a competitive advantage in the award of a
Federal agency procurement contract; and
(b) A means to deter similar misconduct in the future by those who
are involved in the award, performance, and administration of Government
contracts.
[62 FR 232, Jan. 2, 1997]
3.702 Definition.
Final conviction means a conviction, whether entered on a verdict or
plea, including a plea of nolo contendere, for which sentence has been
imposed.
[[Page 66]]
3.703 Authority.
(a) Section 1(e) of Pub. L. 87-849, 18 U.S.C. 218 (the Act),
empowers the President or the heads of executive agencies acting under
regulations prescribed by the President, to declare void and rescind
contracts and other transactions enumerated in the Act, in relation to
which there has been a final conviction for bribery, conflict of
interest, or any other violation of Chapter 11 of Title 18 of the United
States Code (18 U.S.C. 201-224). Executive Order 12448, November 4,
1983, delegates the President's authority under the Act to the heads of
the executive agencies and military departments.
(b) 41 U.S.C. 2105(c) requires a Federal agency, upon receiving
information that a contractor or a person has violated 41 U.S.C. 2102,
to consider rescission of a contract with respect to which--
(1) The contractor or someone acting for the contractor has been
convicted for an offense punishable under 41 U.S.C. 2105(a); or
(2) The head of the agency, or designee, has determined, based upon
a preponderance of the evidence, that the contractor or someone acting
for the contractor has engaged in conduct constituting such an offense.
[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997; 79
FR 24197, Apr. 29, 2014]
3.704 Policy.
(a) In cases in which there is a final conviction for any violation
of 18 U.S.C. 201-224 involving or relating to contracts awarded by an
agency, the agency head or designee shall consider the facts available
and, if appropriate, may declare void and rescind contracts, and recover
the amounts expended and property transferred by the agency in
accordance with the policies and procedures of this subpart.
(b) Since a final conviction under 18 U.S.C. 201-224 relating to a
contract also may justify the conclusion that the party involved is not
presently responsible, the agency should consider initiating debarment
proceedings in accordance with subpart 9.4, Debarment, Suspension, and
Ineligibility, if debarment has not been initiated or is not in effect
at the time the final conviction is entered.
(c) If there is a final conviction for an offense punishable under
41 U.S.C. 2105, or if the head of the agency, or designee, has
determined, based upon a preponderance of the evidence, that the
contractor or someone acting for the contractor has engaged in conduct
constituting such an offense, then the head of the contracting activity
shall consider, in addition to any other penalty prescribed by law or
regulation--
(1) Declaring void and rescinding contracts, as appropriate, and
recovering the amounts expended under the contracts by using the
procedures at 3.705 (see 3.104-7); and
(2) Recommending the initiation of suspension or debarment
proceedings in accordance with subpart 9.4.
[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997; 67
FR 13063, Mar. 20, 2002; 79 FR 24197, Apr. 29, 2014]
3.705 Procedures.
(a) Reporting. The facts concerning any final conviction for any
violation of 18 U.S.C. 201-224 involving or relating to agency contracts
shall be reported promptly to the agency head or designee for that
official's consideration. The agency head or designee shall promptly
notify the Civil Division, Department of Justice, that an action is
being considered under this subpart.
(b) Decision. Following an assessment of the facts, the agency head
or designee may declare void and rescind contracts with respect to which
a final conviction has been entered, and recover the amounts expended
and the property transferred by the agency under the terms of the
contracts involved.
(c) Decision-making process. Agency procedures governing the voiding
and rescinding decision-making process shall be as informal as is
practicable, consistent with the principles of fundamental fairness. As
a minimum, however, agencies shall provide the following:
(1) A notice of the proposed action to declare void and rescind the
contract shall be made in writing and sent by certified mail, return
receipt requested.
[[Page 67]]
(2) A thirty calendar day period after receipt of the notice, for
the contractor to submit pertinent information before any final decision
is made.
(3) Upon request made within the period for submission of pertinent
information, an opportunity shall be afforded for a hearing at which
witnesses may be presented, and any witness the agency presents may be
confronted. However, no inquiry shall be made regarding the validity of
a conviction.
(4) If the agency head or designee decides to declare void and
rescind the contracts involved, that official shall issue a written
decision which--
(i) States that determination;
(ii) Reflects consideration of the fair value of any tangible
benefits received and retained by the agency; and
(iii) States the amount due, and the property to be returned, to the
agency.
(d) Notice of proposed action. The notice of the proposed action, as
a minimum shall--
(1) Advise that consideration is being given to declaring void and
rescinding contracts awarded by the agency, and recovering the amounts
expended and property transferred therefor, under the provisions of 18
U.S.C. 218;
(2) Specifically identify the contracts affected by the action;
(3) Specifically identify the offense or final conviction on which
the action is based;
(4) State the amounts expended and property transferred under each
of the contracts involved, and the money and the property demanded to be
returned;
(5) Identify any tangible benefits received and retained by the
agency under the contract, and the value of those benefits, as
calculated by the agency;
(6) Advise that pertinent information may be submitted within 30
calendar days after receipt of the notice, and that, if requested within
that time, a hearing shall be held at which witnesses may be presented
and any witness the agency presents may be confronted; and
(7) Advise that action shall be taken only after the agency head or
designee issues a final written decision on the proposed action.
(e) Final agency decision. The final agency decision shall be based
on the information available to the agency head or designee, including
any pertinent information submitted or, if a hearing was held, presented
at the hearing. If the agency decision declares void and rescinds the
contract, the final decision shall specify the amounts due and property
to be returned to the agency, and reflect consideration of the fair
value of any tangible benefits received and retained by the agency.
Notice of the decision shall be sent promptly by certified mail, return
receipt requested. Rescission of contracts under the authority of the
Act and demand for recovery of the amounts expended and property
transferred therefor, is not a claim within the meaning of 41 U.S.C.
chapter 71, Contract Disputes, or part 33. Therefore, the procedures
required by the statute and the FAR for the issuance of a final
contracting officer decision are not applicable to final agency
decisions under this subpart, and shall not be followed.
[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997; 79
FR 24197, Apr. 29, 2014]
Subpart 3.8_Limitations on the Payment of Funds to Influence Federal
Transactions
Source: 55 FR 3190, Jan. 30, 1990, unless otherwise noted.
3.800 Scope of subpart.
This subpart prescribes policies and procedures implementing 31
U.S.C. 1352, ``Limitation on use of appropriated funds to influence
certain Federal contracting and financial transactions.''
[72 FR 46329, Aug. 17, 2007]
3.801 Definitions.
As used in this subpart--
Agency means executive agency as defined in 2.101.
Covered Federal action means any of the following actions:
(1) Awarding any Federal contract.
(2) Making any Federal grant.
(3) Making any Federal loan.
(4) Entering into any cooperative agreement.
(5) Extending, continuing, renewing, amending, or modifying any
Federal
[[Page 68]]
contract, grant, loan, or cooperative agreement.
Indian tribe and tribal organization have the meaning provided in
section 4 of the Indian Self-Determination and Education Assistance Act
(25 U.S.C. 450b) and include Alaskan Natives.
Influencing or attempting to influence means making, with the intent
to influence, any communication to or appearance before an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with any
covered Federal action.
Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
Officer or employee of an agency includes the following individuals
who are employed by an agency:
(1) An individual who is appointed to a position in the Government
under Title 5, United States Code, including a position under a
temporary appointment.
(2) A member of the uniformed services, as defined in subsection
101(3), Title 37, United States Code.
(3) A special Government employee, as defined in section 202, Title
18, United States Code.
(4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, Title 5, United States
Code, appendix 2.
Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term excludes an Indian tribe, tribal organization, or any
other Indian organization eligible to receive Federal contracts, grants,
cooperative agreements, or loans from an agency, but only with respect
to expenditures by such tribe or organization that are made for purposes
specified in paragraph 3.802(a) and are permitted by other Federal law.
Reasonable compensation means, with respect to a regularly employed
officer or employee of any person, compensation that is consistent with
the normal compensation for such officer or employee for work that is
not furnished to, not funded by, or not furnished in cooperation with
the Federal Government.
Reasonable payment means, with respect to professional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
Recipient includes the contractor and all subcontractors. This term
excludes an Indian tribe, tribal organization, or any other Indian
organization eligible to receive Federal contracts, grants, cooperative
agreements, or loans from an agency, but only with respect to
expenditures by such tribe or organization that are made for purposes
specified in paragraph 3.802(a) and are permitted by other Federal law.
Regularly employed means, with respect to an officer or employee of
a person requesting or receiving a Federal contract, an officer or
employee who is employed by such person for at least 130 working days
within 1 year immediately preceding the date of the submission that
initiates agency consideration of such person for receipt of such
contract. An officer or employee who is employed by such person for less
than 130 working days within 1 year immediately preceding the date of
the submission that initiates agency consideration of such person shall
be considered to be regularly employed as soon as he or she is employed
by such person for 130 working days.
State means a State of the United States, the District of Columbia,
an outlying area of the United States, an agency or instrumentality of a
State, and multi-State, regional, or interstate entity having
governmental duties and powers.
[72 FR 46329, Aug. 17, 2007]
3.802 Statutory prohibition and requirement.
(a) 31 U.S.C. 1352 prohibits a recipient of a Federal contract,
grant, loan, or
[[Page 69]]
cooperative agreement from using appropriated funds to pay any person
for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with any covered Federal
actions.
(1) For purposes of this subpart the term ``appropriated funds''
does not include profit or fee from a covered Federal action.
(2) To the extent a person can demonstrate that the person has
sufficient monies, other than Federal appropriated funds, the Government
shall assume that these other monies were spent for any influencing
activities that would be unallowable if paid for with Federal
appropriated funds.
(b) 31 U.S.C. 1352 also requires offerors to furnish a declaration
consisting of both a certification and a disclosure, with periodic
updates of the disclosure after contract award. These requirements are
contained in the provision at 52.203-11, Certification and Disclosure
Regarding Payments to Influence Certain Federal Transactions, and the
clause at 52.203-12, Limitation on Payments to Influence Certain Federal
Transactions.
[72 FR 46329, Aug. 17, 2007]
3.803 Exceptions.
(a) The prohibition of paragraph 3.802(a) does not apply under the
following conditions:
(1) Agency and legislative liaison by own employees. (i) Payment of
reasonable compensation made to an officer or employee of a person
requesting or receiving a covered Federal action if the payment is for
agency and legislative liaison activities not directly related to a
covered Federal action. For purposes of this paragraph, providing any
information specifically requested by an agency or Congress is permitted
at any time.
(ii) Participating with an agency in discussions that are not
related to a specific solicitation for any covered Federal action, but
that concern--
(A) The qualities and characteristics (including individual
demonstrations) of the person's products or services, conditions or
terms of sale, and service capabilities; or
(B) The application or adaptation of the person's products or
services for an agency's use.
(iii) Providing prior to formal solicitation of any covered Federal
action any information not specifically requested but necessary for an
agency to make an informed decision about initiation of a covered
Federal action.
(iv) Participating in technical discussions regarding the
preparation of an unsolicited proposal prior to its official submission.
(v) Making capability presentations prior to formal solicitation of
any covered Federal action when seeking an award from an agency pursuant
to the provisions of the Small Business Act, as amended by Pub. L. 95-
507, and subsequent amendments.
(2) Professional and technical services. (i) Payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a covered Federal action, if payment is for professional or
technical services rendered directly in the preparation, submission, or
negotiation of any bid, proposal, or application for that Federal action
or for meeting requirements imposed by or pursuant to law as a condition
for receiving that Federal action;
(ii) Any reasonable payment to a person, other than an officer or
employee of a person requesting or receiving a covered Federal action,
if the payment is for professional or technical services rendered
directly in the preparation, submission, or negotiation of any bid,
proposal, or application for that Federal action, or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal action. Persons other than officers or employees of a
person requesting or receiving a covered Federal action include
consultants and trade associations.
(iii) As used in paragraph (a)(2) of this section ``professional and
technical services'' are limited to advice and analysis directly
applying any professional or technical discipline. For example, drafting
of a legal document accompanying a bid or proposal by a lawyer is
allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
[[Page 70]]
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional or a
technical person are not allowable under this section unless they
provide advice and analysis directly applying their professional or
technical expertise and unless the advice or analysis is rendered
directly and solely in the preparation, submission or negotiation of a
covered Federal action. Thus, for example, communications with the
intent to influence made by a lawyer that do not provide legal advice or
analysis directly and solely related to the legal aspects of his or her
client's proposal, but generally advocate one proposal over another, are
not allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
(iv) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation and any other requirements in the actual award documents.
(b) Only those communications and services expressly authorized by
paragraph (a) of this section are permitted.
(c) The disclosure requirements of paragraph 3.802(b) do not apply
with respect to payments of reasonable compensation made to regularly
employed officers or employees of a person.
[72 FR 46329, Aug. 17, 2007]
3.804 Policy.
The contracting officer shall obtain certifications and disclosures
as required by the provision at 52.203-11, Certification and Disclosure
Regarding Payments to Influence Certain Federal Transactions, prior to
the award of any contract exceeding $150,000.
[72 FR 46330, Aug. 17, 2007, as amended at 75 FR 53131, Aug. 30, 2010]
3.805 Exemption.
The Secretary of Defense may exempt, on a case-by-case basis, a
covered Federal action from the prohibitions of this subpart whenever
the Secretary determines, in writing, that such an exemption is in the
national interest. The Secretary shall transmit a copy of the exemption
to Congress immediately after making the determination.
[72 FR 46330, Aug. 17, 2007]
3.806 Processing suspected violations.
The contracting officer shall report suspected violations of the
requirements of 31 U.S.C. 1352 in accordance with agency procedures.
[72 FR 46330, Aug. 17, 2007]
3.807 Civil penalties.
Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 3803
(except subsection (c)), 3804-3808, and 3812, insofar as the provisions
therein are not inconsistent with the requirements of this subpart.
[55 FR 3190, Jan. 30, 1990, as amended at 67 FR 6120, Feb. 8, 2002]
3.808 Solicitation provision and contract clause.
(a) Insert the provision at 52.203-11, Certification and Disclosure
Regarding Payments to Influence Certain Federal Transactions, in
solicitations expected to exceed $150,000.
(b) Insert the clause at 52.203-12, Limitation on Payments to
Influence Certain Federal Transactions, in solicitations and contracts
expected to exceed $150,000.
[72 FR 46330, Aug. 17, 2007, as amended at 75 FR 53132, Aug. 30, 2010]
Subpart 3.9_Whistleblower Protections for Contractor Employees
Source: 60 FR 37776, July 21, 1995, unless otherwise noted.
[[Page 71]]
3.900 Scope of subpart.
This subpart implements various statutory whistleblower programs.
This subpart does not implement 10 U.S.C. 2409, which is applicable only
to DoD, NASA, and the Coast Guard.
(a) 41 U.S.C. 4705 (in effect before July 1, 2013 and on or after
January 2, 2017). Sections 3.901 through 3.906 of this subpart implement
41 U.S.C. 4705, applicable to civilian agencies other than NASA and the
Coast Guard, except as provided in paragraph (c) of this section. These
sections are not in effect for the duration of the pilot program
described in paragraph (b) of this section.
(b) 41 U.S.C. 4712 (in effect on July 1, 2013 through January 1,
2017). Section 3.908 of this subpart implements the pilot program,
applicable to civilian agencies other than NASA and the Coast Guard,
except as provided in paragraph (c) of this section.
(c) Section 743 of Division E, Title VII, of the Consolidated and
Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and its
successor provisions in subsequent appropriations acts (and as extended
in continuing resolutions), implemented in 3.909, applicable to all
agencies.
(d) Contracts funded by the American Recovery and Reinvestment Act.
Section 3.907 of this subpart implements section 1553 of the American
Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), and applies to
all contracts funded in whole or in part by that Act.
[78 FR 60171, Sept. 30, 2013, as amended at 82 FR 4721, Jan. 13, 2017]
3.901 Definitions.
As used in this subpart--
Authorized official of an agency means an officer or employee
responsible for contracting, program management, audit, inspection,
investigation, or enforcement of any law or regulation relating to
Government procurement or the subject matter of the contract.
Authorized official of the Department of Justice means any person
responsible for the investigation, enforcement, or prosecution of any
law or regulation.
Inspector General means an Inspector General appointed under the
Inspector General Act of 1978, as amended. In the Department of Defense
that is the DoD Inspector General. In the case of an executive agency
that does not have an Inspector General, the duties shall be performed
by an official designated by the head of the executive agency.
Internal confidentiality agreement or statement means a
confidentiality agreement or any other written statement that the
contractor requires any of its employees or subcontractors to sign
regarding nondisclosure of contractor information, except that it does
not include confidentiality agreements arising out of civil litigation
or confidentiality agreements that contractor employees or
subcontractors sign at the behest of a Federal agency.
Subcontract means any contract as defined in subpart 2.1 entered
into by a subcontractor to furnish supplies or services for performance
of a prime contract or a subcontract. It includes but is not limited to
purchase orders, and changes and modifications to purchase orders.
Subcontractor means any supplier, distributor, vendor, or firm
(including a consultant) that furnishes supplies or services to or for a
prime contractor or another subcontractor.
[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001;
82 FR 4721, Jan. 13, 2017; 84 FR 19840, May 6, 2019]
3.902 [Reserved]
3.903 Policy.
Government contractors shall not discharge, demote or otherwise
discriminate against an employee as a reprisal for disclosing
information to a Member of Congress, or an authorized official of an
agency or of the Department of Justice, relating to a substantial
violation of law related to a contract (including the competition for or
negotiation of a contract).
3.904 Procedures for filing complaints.
(a) Any employee of a contractor who believes that he or she has
been discharged, demoted, or otherwise discriminated against contrary to
the policy in 3.903 may file a complaint with the Inspector General of
the agency that awarded the contract.
(b) The complaint shall be signed and shall contain--
[[Page 72]]
(1) The name of the contractor;
(2) The contract number, if known; if not, a description reasonably
sufficient to identify the contract(s) involved;
(3) The substantial violation of law giving rise to the disclosure;
(4) The nature of the disclosure giving rise to the discriminatory
act; and
(5) The specific nature and date of the reprisal.
3.905 Procedures for investigating complaints.
(a) Upon receipt of a complaint, the Inspector General shall conduct
an initial inquiry. If the Inspector General determines that the
complaint is frivolous or for other reasons does not merit further
investigation, the Inspector General shall advise the complainant that
no further action on the complaint will be taken.
(b) If the Inspector General determines that the complaint merits
further investigation, the Inspector General shall notify the
complainant, contractor, and head of the contracting activity. The
Inspector General shall conduct an investigation and provide a written
report of findings to the head of the agency or designee.
(c) Upon completion of the investigation, the head of the agency or
designee shall ensure that the Inspector General provides the report of
findings to--
(1) The complainant and any person acting on the complainant's
behalf;
(2) The contractor alleged to have committed the violation; and
(3) The head of the contracting activity.
(d) The complainant and contractor shall be afforded the opportunity
to submit a written response to the report of findings within 30 days to
the head of the agency or designee. Extensions of time to file a written
response may be granted by the head of the agency or designee.
(e) At any time, the head of the agency or designee may request
additional investigative work be done on the complaint.
3.906 Remedies.
(a) If the head of the agency or designee determines that a
contractor has subjected one of its employees to a reprisal for
providing information to a Member of Congress, or an authorized official
of an agency or of the Department of Justice, the head of the agency or
designee may take one or more of the following actions:
(1) Order the contractor to take affirmative action to abate the
reprisal.
(2) Order the contractor to reinstate the person to the position
that the person held before the reprisal, together with the compensation
(including back pay), employment benefits, and other terms and
conditions of employment that would apply to the person in that position
if the reprisal had not been taken.
(3) Order the contractor to pay the complainant an amount equal to
the aggregate amount of all costs and expenses (including attorneys'
fees and expert witnesses' fees) that were reasonably incurred by the
complainant for, or in connection with, bringing the complaint regarding
the reprisal.
(b) Whenever a contractor fails to comply with an order, the head of
the agency or designee shall request the Department of Justice to file
an action for enforcement of such order in the United States district
court for a district in which the reprisal was found to have occurred.
In any action brought under this section, the court may grant
appropriate relief, including injunctive relief and compensatory and
exemplary damages.
(c) Any person adversely affected or aggrieved by an order issued
under this section may obtain review of the order's conformance with the
law, and this subpart, in the United States Court of Appeals for a
circuit in which the reprisal is alleged in the order to have occurred.
No petition seeking such review may be filed more than 60 days after
issuance of the order by the head of the agency or designee. Review
shall conform to Chapter 7 of Title 5, United States Code.
3.907 Whistleblower Protections Under the American Recovery
and Reinvestment Act of 2009 (the Recovery Act).
3.907-1 Definitions.
As used in this section--
[[Page 73]]
Board means the Recovery Accountability and Transparency Board
established by Section 1521 of the Recovery Act.
Covered funds means any contract payment, grant payment, or other
payment received by a contractor if--
(1) The Federal Government provides any portion of the money or
property that is provided, requested, or demanded; and
(2) At least some of the funds are appropriated or otherwise made
available by the Recovery Act.
Covered information means information that the employee reasonably
believes is evidence of gross mismanagement of the contract or
subcontract related to covered funds, gross waste of covered funds, a
substantial and specific danger to public health or safety related to
the implementation or use of covered funds, an abuse of authority
related to the implementation or use of covered funds, or a violation of
law, rule, or regulation related to an agency contract (including the
competition for or negotiation of a contract) awarded or issued relating
to covered funds.
Inspector General means an Inspector General appointed under the
Inspector General Act of 1978. In the Department of Defense that is the
DoD Inspector General. In the case of an executive agency that does not
have an Inspector General, the duties shall be performed by an official
designated by the head of the executive agency.
Non-Federal employer, as used in this section, means any employer
that receives Recovery Act funds, including a contractor, subcontractor,
or other recipient of funds pursuant to a contract or other agreement
awarded and administered in accordance with the Federal Acquisition
Regulation.
[74 FR 14634, Mar. 31, 2009, as amended at 75 FR 34259, June 16, 2010]
3.907-2 Policy.
Non-Federal employers are prohibited from discharging, demoting, or
otherwise discriminating against an employee as a reprisal for
disclosing covered information to any of the following entities or their
representatives:
(1) The Board.
(2) An Inspector General.
(3) The Comptroller General.
(4) A member of Congress.
(5) A State or Federal regulatory or law enforcement agency.
(6) A person with supervisory authority over the employee or such
other person working for the employer who has the authority to
investigate, discover, or terminate misconduct.
(7) A court or grand jury.
(8) The head of a Federal agency.
[74 FR 14634, Mar. 31, 2009]
3.907-3 Procedures for filing complaints.
(a) An employee who believes that he or she has been subjected to
reprisal prohibited by the Recovery Act, Section 1553 as set forth in
3.907-2, may submit a complaint regarding the reprisal to the Inspector
General of the agency that awarded the contract.
(b) The complaint shall be signed and shall contain--
(1) The name of the contractor;
(2) The contract number, if known; if not, a description reasonably
sufficient to identify the contract(s) involved;
(3) The covered information giving rise to the disclosure;
(4) The nature of the disclosure giving rise to the discriminatory
act; and
(5) The specific nature and date of the reprisal.
(c) A contracting officer who receives a complaint of reprisal of
the type described in 3.907-2 shall forward it to the Office of
Inspector General and to other designated officials in accordance with
agency procedures (e.g., agency legal counsel).
[74 FR 14634, Mar. 31, 2009, as amended at 75 FR 34259, June 16, 2010]
3.907-4 Procedures for investigating complaints.
Investigation of complaints will be in accordance with section 1553
of the Recovery Act.
[74 FR 14634, Mar. 31, 2009]
3.907-5 Access to investigative file of Inspector General.
(a) The employee alleging reprisal under this section shall have
access to the investigation file of the Inspector
[[Page 74]]
General, in accordance with the Privacy Act, 5 U.S.C. 552a. The
investigation of the Inspector General shall be deemed closed for the
purposes of disclosure under such section when an employee files an
appeal to the agency head or a court of competent jurisdiction.
(b) In the event the employee alleging reprisal brings a civil
action under section 1553(c)(3) of the Recovery Act, the employee
alleging the reprisal and the non-Federal employer shall have access to
the investigative file of the Inspector General in accordance with the
Privacy Act.
(c) The Inspector General may exclude from disclosures made under
3.907-5(a) or (b)--
(1) Information protected from disclosure by a provision of law; and
(2) Any additional information the Inspector General determines
disclosure of which would impede a continuing investigation, provided
that such information is disclosed once such disclosure would no longer
impede such investigation, unless the Inspector General determines that
the disclosure of law enforcement techniques, procedures, or information
could reasonably be expected to risk circumvention of the law or
disclose the identity of a confidential source.
(d) An Inspector General investigating an alleged reprisal under
this section may not respond to any inquiry or disclose any information
from or about any person alleging such reprisal, except in accordance
with 5 U.S.C. 552a or as required by any other applicable Federal law.
[74 FR 14634, Mar. 31, 2009]
3.907-6 Remedies and enforcement authority.
(a) Burden of Proof. (1) Disclosure as contributing factor in
reprisal.
(i) An employee alleging a reprisal under this section shall be
deemed to have affirmatively established the occurrence of the reprisal
if the employee demonstrates that a disclosure described in section
3.907-2 was a contributing factor in the reprisal.
(ii) A disclosure may be demonstrated as a contributing factor in a
reprisal for purposes of this paragraph by circumstantial evidence,
including--
(A) Evidence that the official undertaking the reprisal knew of the
disclosure; or
(B) Evidence that the reprisal occurred within a period of time
after the disclosure such that a reasonable person could conclude that
the disclosure was a contributing factor in the reprisal.
(2) Opportunity for rebuttal. The head of an agency may not find the
occurrence of a reprisal with respect to a reprisal that is
affirmatively established under section 3.907-6(a)(1) if the non-Federal
employer demonstrates by clear and convincing evidence that the non-
Federal employer would have taken the action constituting the reprisal
in the absence of the disclosure.
(b) No later than 30 days after receiving an Inspector General
report in accordance with section 1553 of the Recovery Act, the head of
the agency concerned shall determine whether there is sufficient basis
to conclude that the non-Federal employer has subjected the complainant
to a reprisal prohibited by subsection 3.907-2 and shall either issue an
order denying relief in whole or in part or shall take one or more of
the following actions:
(1) Order the employer to take affirmative action to abate the
reprisal.
(2) Order the employer to reinstate the person to the position that
the person held before the reprisal, together with the compensation
(including back pay), compensatory damages, employment benefits, and
other terms and conditions of employment that would apply to the person
in that position if the reprisal had not been taken.
(3) Order the employer to pay the complainant an amount equal to the
aggregate amount of all costs and expenses (including attorneys' fees
and expert witnesses' fees) that were reasonably incurred by the
complainant for, or in connection with, bringing the complaint regarding
the reprisal.
(c)(1) The complainant shall be deemed to have exhausted all
administrative remedies with respect to the complaint, and the
complainant may bring a de novo action at law or equity
[[Page 75]]
against the employer to seek compensatory damages and other relief
available under this section in the appropriate district court of United
States, which shall have jurisdiction over such an action without regard
to the amount in controversy if
(i) The head of an agency--
(A) Issues an order denying relief in whole or in part under
paragraph (a) of this section;
(B) Has not issued an order within 210 days after the submission of
a complaint in accordance with section 1553 of the Recovery Act, or in
the case of an extension of time in accordance with section 1553 of the
Recovery Act, within 30 days after the expiration of the extension of
time; or
(C) Decides in accordance with section 1553 of the Recovery Act not
to investigate or to discontinue an investigation; and
(ii) There is no showing that such delay or decision is due to the
bad faith of the complainant.
(2) Such an action shall, at the request of either party to the
action, be tried by the court with a jury.
(d) Whenever an employer fails to comply with an order issued under
this section, the head of the agency shall request the Department of
Justice to file an action for enforcement of such order in the United
States district court for a district in which the reprisal was found to
have occurred. In any action brought under this section, the court may
grant appropriate relief, including injunctive relief, compensatory and
exemplary damages, and attorneys fees and costs.
(e) Any person adversely affected or aggrieved by an order issued
under paragraph (b) of this subsection may obtain review of the order's
conformance with the law, and this section, in the United States Court
of Appeals for a circuit in which the reprisal is alleged in the order
to have occurred. No petition seeking such review may be filed more than
60 days after issuance of the order by the head of the agency.
[74 FR 14634, Mar. 31, 2009]
3.907-7 Contract clause.
Use the clause at 52.203-15, Whistleblower Protections Under the
American Recovery and Reinvestment Act of 2009 in all solicitations and
contracts funded in whole or in part with Recovery Act funds.
[74 FR 14634, Mar. 31, 2009]
3.908 Pilot program for enhancement of contractor employee
whistleblower protections.
[78 FR 60171, Sept. 30, 2013]
3.908-1 Scope of section.
(a) This section implements 41 U.S.C. 4712.
(b) This section does not apply to--
(1) DoD, NASA, and the Coast Guard; or
(2) Any element of the intelligence community, as defined in section
3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4)). This
section does not apply to any disclosure made by an employee of a
contractor or subcontractor of an element of the intelligence community
if such disclosure--
(i) Relates to an activity of an element of the intelligence
community; or
(ii) Was discovered during contract or subcontract services provided
to an element of the intelligence community.
[78 FR 60171, Sept. 30, 2013]
3.908-2 Definitions.
As used in this section--
Abuse of authority means an arbitrary and capricious exercise of
authority that is inconsistent with the mission of the executive agency
concerned or the successful performance of a contract of such agency.
Inspector General means an Inspector General appointed under the
Inspector General Act of 1978 and any Inspector General that receives
funding from, or has oversight over contracts awarded for, or on behalf
of, the executive agency concerned.
[78 FR 60171, Sept. 30, 2013]
3.908-3 Policy.
(a) Contractors and subcontractors are prohibited from discharging,
demoting, or otherwise discriminating against an employee as a reprisal
for disclosing, to any of the entities listed
[[Page 76]]
at paragraph (b) of this subsection, information that the employee
reasonably believes is evidence of gross mismanagement of a Federal
contract, a gross waste of Federal funds, an abuse of authority relating
to a Federal contract, a substantial and specific danger to public
health or safety, or a violation of law, rule, or regulation related to
a Federal contract (including the competition for or negotiation of a
contract). A reprisal is prohibited even if it is undertaken at the
request of an executive branch official, unless the request takes the
form of a non-discretionary directive and is within the authority of the
executive branch official making the request.
(b) Entities to whom disclosure may be made. (1) A Member of
Congress or a representative of a committee of Congress.
(2) An Inspector General.
(3) The Government Accountability Office.
(4) A Federal employee responsible for contract oversight or
management at the relevant agency.
(5) An authorized official of the Department of Justice or other law
enforcement agency.
(6) A court or grand jury.
(7) A management official or other employee of the contractor or
subcontractor who has the responsibility to investigate, discover, or
address misconduct.
(c) An employee who initiates or provides evidence of contractor or
subcontractor misconduct in any judicial or administrative proceeding
relating to waste, fraud, or abuse on a Federal contract shall be deemed
to have made a disclosure.
[78 FR 60171, Sept. 30, 2013]
3.908-4 Filing complaints.
A contractor or subcontractor employee who believes that he or she
has been discharged, demoted, or otherwise discriminated against
contrary to the policy in 3.908-3 of this section may submit a complaint
with the Inspector General of the agency concerned. Procedures for
submitting fraud, waste, abuse, and whistleblower complaints are
generally accessible on agency Office of Inspector General Hotline or
Whistleblower Internet sites. A complaint by the employee may not be
brought under 41 U.S.C. 4712 more than three years after the date on
which the alleged reprisal took place.
[78 FR 60171, Sept. 30, 2013]
3.908-5 Procedures for investigating complaints.
(a) Investigation of complaints will be in accordance with 41 U.S.C.
4712(b).
(b) Upon completion of the investigation, the head of the agency or
designee shall ensure that the Inspector General provides the report of
findings to--
(1) The complainant and any person acting on the complainant's
behalf;
(2) The contractor alleged to have committed the violation; and
(3) The head of the contracting activity.
(c) The complainant and contractor shall be afforded the opportunity
to submit a written response to the report of findings within 30 days to
the head of the agency or designee. Extensions of time to file a written
response may be granted by the head of the agency or designee.
(d) At any time, the head of the agency or designee may request
additional investigative work be done on the complaint.
[80 FR 75913, Dec. 4, 2015]
3.908-6 Remedies.
(a) Agency response to Inspector General report. Not later than 30
days after receiving an Inspector General report in accordance with 41
U.S.C. 4712, the head of the agency shall--
(1) Determine whether sufficient basis exists to conclude that the
contractor or subcontractor has subjected the employee who submitted the
complaint to a reprisal as prohibited by 3.908-3; and
(2) Issue an order denying relief or take one or more of the
following actions:
(i) Order the contractor to take affirmative action to abate the
reprisal.
(ii) Order the contractor or subcontractor to reinstate the
complainant-employee to the position that the person held before the
reprisal, together with compensatory damages (including back pay),
employment benefits, and
[[Page 77]]
other terms and conditions of employment that would apply to the person
in that position if the reprisal had not been taken.
(iii) Order the contractor or subcontractor to pay the complainant-
employee an amount equal to the aggregate amount of all costs and
expenses (including attorneys' fees and expert witnesses' fees) that
were reasonably incurred by the complainant for, or in connection with,
bringing the complaint regarding the reprisal, as determined by the head
of the agency.
(b) Complainant's right to go to court. If the head of the agency
issues an order denying relief or has not issued an order within 210
days after the submission of the complaint or within 30 days after the
expiration of an extension of time granted in accordance with 41 U.S.C.
4712(b)(2)(B) for the submission of the Inspector General's report on
the investigative findings of the complaint to the head of the agency,
the contractor or subcontractor, and the complainant, and there is no
showing that such delay is due to the bad faith of the complainant--
(1) The complainant shall be deemed to have exhausted all
administrative remedies with respect to the complaint; and
(2) The complainant may bring a de novo action at law or equity
against the contractor or subcontractor to seek compensatory damages and
other relief available under 41 U.S.C. 4712 in the appropriate district
court of the United States, which shall have jurisdiction over such an
action without regard to the amount in controversy. Such an action
shall, at the request of either party to the action, be tried by the
court with a jury. An action under this authority may not be brought
more than two years after the date on which remedies are deemed to have
been exhausted.
(c) Admissibility in evidence. An Inspector General determination
and an agency head order denying relief under this section shall be
admissible in evidence in any de novo action at law or equity brought
pursuant to 41 U.S.C. 4712.
(d) No waiver. The rights and remedies provided for in 41 U.S.C.
4712 may not be waived by any agreement, policy, form, or condition of
employment.
[78 FR 60171, Sept. 30, 2013]
3.908-7 Enforcement of orders.
(a) Whenever a contractor or subcontractor fails to comply with an
order issued under 3.908-6(a)(2) of this section, the head of the agency
concerned shall file an action for enforcement of the order in the U.S.
district court for a district in which the reprisal was found to have
occurred. In any action brought pursuant to this authority, the court
may grant appropriate relief, including injunctive relief, compensatory
and exemplary damages, and attorney fees and costs. The complainant-
employee upon whose behalf an order was issued may also file such an
action or join in an action filed by the head of the agency.
(b) Any person adversely affected or aggrieved by an order issued
under 3.908-6(a)(2) may obtain review of the order's conformance with 41
U.S.C. 4712 and its implementing regulations, in the U.S. court of
appeals for a circuit in which the reprisal is alleged in the order to
have occurred. No petition seeking such review may be filed more than 60
days after issuance of the order by the head of the agency. Filing such
an appeal shall not act to stay the enforcement of the order of the head
of an agency, unless a stay is specifically entered by the court.
[78 FR 60171, Sept. 30, 2013, as amended at 80 FR 75913, Dec. 4, 2015]
3.908-8 Classified information.
41 U.S.C. 4712 does not provide any right to disclose classified
information not otherwise provided by law.
[78 FR 60171, Sept. 30, 2013]
3.908-9 Contract clause.
The contracting officer shall insert the clause at 52.203-17,
Contractor Employee Whistleblower Rights and Requirement to Inform
Employees of Whistleblower Rights, in all solicitations and contracts
that exceed the simplified acquisition threshold.
[78 FR 60171, Sept. 30, 2013]
[[Page 78]]
3.909 Prohibition on providing funds to an entity that requires
certain internal confidentiality agreements or statements.
3.909-1 Prohibition.
(a) The Government is prohibited from using fiscal year 2015 and
subsequent fiscal year funds for a contract with an entity that requires
employees or subcontractors of such entity seeking to report waste,
fraud, or abuse to sign internal confidentiality agreements or
statements prohibiting or otherwise restricting such employees or
subcontractors from lawfully reporting such waste, fraud, or abuse to a
designated investigative or law enforcement representative of a Federal
department or agency authorized to receive such information. See section
743 of Division E, Title VII, of the Consolidated and Further Continuing
Appropriations Act, 2015 (Pub. L. 113-235) and its successor provisions
in subsequent appropriations acts (and as extended in continuing
resolutions.)
(b) The prohibition in paragraph (a) of this section does not
contravene requirements applicable to Standard Form 312 (Classified
Information Nondisclosure Agreement), Form 4414 (Sensitive Compartmented
Information Nondisclosure Agreement), or any other form issued by a
Federal department or agency governing the nondisclosure of classified
information.
[82 FR 4721, Jan. 13, 2017]
3.909-2 Representation by the offeror.
(a) In order to be eligible for contract award, an offeror must
represent that it will not require its employees or subcontractors to
sign internal confidentiality agreements or statements prohibiting or
otherwise restricting such employees or subcontractors from lawfully
reporting waste, fraud, or abuse related to the performance of a
Government contract to a designated investigative or law enforcement
representative of a Federal department or agency authorized to receive
such information (e.g., agency Office of the Inspector General). Any
offeror that does not so represent is ineligible for award of a
contract.
(b) The contracting officer may rely on an offeror's representation
unless the contracting officer has reason to question the
representation.
[82 FR 4721, Jan. 13, 2017]
3.909-3 Solicitation provision and contract clause.
When using funding subject to the prohibitions in 3.909-1(a), the
contracting officer shall--
(a)(1) Include the provision at 52.203-18, Prohibition on
Contracting with Entities that Require Certain Internal Confidentiality
Agreements or Statements--Representation, in all solicitations, except
as provided in paragraph (a)(2) of this section; and
(2) Do not insert the provision in solicitations for a personal
services contract with an individual if the services are to be performed
entirely by the individual, rather than by an employee of the contractor
or a subcontractor.
(b)(1) Include the clause at 52.203-19, Prohibition on Requiring
Certain Internal Confidentiality Agreements or Statements, in all
solicitations and resultant contracts, other than personal services
contracts with individuals.
(2) Modify existing contracts, other than personal services
contracts with individuals, to include the clause before obligating FY
2015 or subsequent FY funds that are subject to the same prohibition on
internal confidentiality agreements or statements.
[82 FR 4721, Jan. 13, 2017]
Subpart 3.10_Contractor Code of Business Ethics and Conduct
Source: 72 FR 65881, Nov. 23, 2007, unless otherwise noted.
3.1000 Scope of subpart.
This subpart--
(a) Implements 41 U.S.C. 3509, Notification of Violations of Federal
Criminal Law or Overpayments; and
(b) Prescribes policies and procedures for the establishment of
contractor codes of business ethics and conduct, and display of agency
Office of Inspector General (OIG) fraud hotline posters.
[79 FR 24197, Apr. 29, 2014]
3.1001 Definitions.
As used in this subpart--
[[Page 79]]
Subcontract means any contract entered into by a subcontractor to
furnish supplies or services for performance of a prime contract or a
subcontract.
Subcontractor means any supplier, distributor, vendor, or firm that
furnished supplies or services to or for a prime contractor or another
subcontractor.
United States means the 50 States, the District of Columbia, and
outlying areas.
[73 FR 67090, Nov. 12, 2008]
3.1002 Policy.
(a) Government contractors must conduct themselves with the highest
degree of integrity and honesty.
(b) Contractors should have a written code of business ethics and
conduct. To promote compliance with such code of business ethics and
conduct, contractors should have an employee business ethics and
compliance training program and an internal control system that--
(1) Are suitable to the size of the company and extent of its
involvement in Government contracting;
(2) Facilitate timely discovery and disclosure of improper conduct
in connection with Government contracts; and
(3) Ensure corrective measures are promptly instituted and carried
out.
3.1003 Requirements.
(a) Contractor requirements. (1) Although the policy at 3.1002
applies as guidance to all Government contractors, the contractual
requirements set forth in the clauses at 52.203-13, Contractor Code of
Business Ethics and Conduct, and 52.203-14, Display of Hotline
Poster(s), are mandatory if the contracts meet the conditions specified
in the clause prescriptions at 3.1004.
(2) Whether or not the clause at 52.203-13 is applicable, a
contractor may be suspended and/or debarred for knowing failure by a
principal to timely disclose to the Government, in connection with the
award, performance, or closeout of a Government contract performed by
the contractor or a subcontract awarded thereunder, credible evidence of
a violation of Federal criminal law involving fraud, conflict of
interest, bribery, or gratuity violations found in Title 18 of the
United States Code or a violation of the civil False Claims Act. Knowing
failure to timely disclose credible evidence of any of the above
violations remains a cause for suspension and/or debarment until 3 years
after final payment on a contract (see 9.406-2(b)(1)(vi) and 9.407-
2(a)(8)).
(3) The Payment clauses at FAR 52.212-4(i)(5), 52.232-25(d), 52.232-
26(c), and 52.232-27(l) require that, if the contractor becomes aware
that the Government has overpaid on a contract financing or invoice
payment, the contractor shall remit the overpayment amount to the
Government. A contractor may be suspended and/or debarred for knowing
failure by a principal to timely disclose credible evidence of a
significant overpayment, other than overpayments resulting from contract
financing payments as defined in 32.001 (see 9.406-2(b)(1)(vi) and
9.407-2(a)(8)).
(b) Notification of possible contractor violation. If the
contracting officer is notified of possible contractor violation of
Federal criminal law involving fraud, conflict of interest, bribery, or
gratuity violations found in Title 18 U.S.C.; or a violation of the
civil False Claims Act, the contracting officer shall--
(1) Coordinate the matter with the agency Office of the Inspector
General; or
(2) Take action in accordance with agency procedures.
(c) Fraud Hotline Poster. (1) Agency OIGs are responsible for
determining the need for, and content of, their respective agency OIG
fraud hotline poster(s).
(2) When requested by the Department of Homeland Security, agencies
shall ensure that contracts funded with disaster assistance funds
require display of any fraud hotline poster applicable to the specific
contract. As established by the agency OIG, such posters may be
displayed in lieu of, or in addition to, the agency's standard poster.
[72 FR 65881, Nov. 23, 2007, as amended at 73 FR 67090, Nov. 12, 2008]
[[Page 80]]
3.1004 Contract clauses.
(a) Insert the clause at FAR 52.203-13, Contractor Code of Business
Ethics and Conduct, in solicitations and contracts if the value of the
contract is expected to exceed $6 million and the performance period is
120 days or more.
(b)(1) Unless the contract is for the acquisition of a commercial
product or commercial service or will be performed entirely outside the
United States, insert the clause at 52.203-14, Display of Hotline
Poster(s), if--
(i) The contract exceeds $6 million or a lesser amount established
by the agency; and
(ii)(A) The agency has a fraud hotline poster; or
(B) The contract is funded with disaster assistance funds.
(2) In paragraph (b)(3) of the clause, the contracting officer
shall--
(i) Identify the applicable posters; and
(ii) Insert the website link(s) or other contact information for
obtaining the agency and/or Department of Homeland Security poster.
(3) In paragraph (d) of the clause, if the agency has established
policies and procedures for display of the OIG fraud hotline poster at a
lesser amount, the contracting officer shall replace ``$6 million'' with
the lesser amount that the agency has established.
[72 FR 65881, Nov. 23, 2007, as amended at 73 FR 67090, Nov. 12, 2008;
80 FR 38296, July 2, 2015; 85 FR 62487, Oct. 2, 2020; 86 FR 61020, Nov.
4, 2021]
Subpart 3.11_Preventing Personal Conflicts of Interest for Contractor
Employees Performing Acquisition Functions
Source: 76 FR 68024, Nov. 2, 2011, unless otherwise noted.
3.1100 Scope of subpart.
This subpart implements policy on personal conflicts of interest by
employees of Government contractors as required by 41 U.S.C. 2303.
[79 FR 24197, Apr. 29, 2014]
3.1101 Definitions.
As used in this subpart--
Acquisition function closely associated with inherently governmental
functions means supporting or providing advice or recommendations with
regard to the following activities of a Federal agency:
(1) Planning acquisitions.
(2) Determining what supplies or services are to be acquired by the
Government, including developing statements of work.
(3) Developing or approving any contractual documents, to include
documents defining requirements, incentive plans, and evaluation
criteria.
(4) Evaluating contract proposals.
(5) Awarding Government contracts.
(6) Administering contracts (including ordering changes or giving
technical direction in contract performance or contract quantities,
evaluating contractor performance, and accepting or rejecting contractor
products or services).
(7) Terminating contracts.
(8) Determining whether contract costs are reasonable, allocable,
and allowable.
Covered employee means an individual who performs an acquisition
function closely associated with inherently governmental functions and
is--
(1) An employee of the contractor; or
(2) A subcontractor that is a self-employed individual treated as a
covered employee of the contractor because there is no employer to whom
such an individual could submit the required disclosures.
Personal conflict of interest means a situation in which a covered
employee has a financial interest, personal activity, or relationship
that could impair the employee's ability to act impartially and in the
best interest of the Government when performing under the contract. (A
de minimis interest that would not ``impair the employee's ability to
act impartially and in the best interest of the Government'' is not
covered under this definition.)
(1) Among the sources of personal conflicts of interest are--
(i) Financial interests of the covered employee, of close family
members, or of other members of the covered employee's household;
[[Page 81]]
(ii) Other employment or financial relationships (including seeking
or negotiating for prospective employment or business); and
(iii) Gifts, including travel.
(2) For example, financial interests referred to in paragraph (1) of
this definition may arise from--
(i) Compensation, including wages, salaries, commissions,
professional fees, or fees for business referrals;
(ii) Consulting relationships (including commercial and professional
consulting and service arrangements, scientific and technical advisory
board memberships, or serving as an expert witness in litigation);
(iii) Services provided in exchange for honorariums or travel
expense reimbursements;
(iv) Research funding or other forms of research support;
(v) Investment in the form of stock or bond ownership or partnership
interest (excluding diversified mutual fund investments);
(vi) Real estate investments;
(vii) Patents, copyrights, and other intellectual property
interests; or
(viii) Business ownership and investment interests.
3.1102 Policy.
The Government's policy is to require contractors to--
(a) Identify and prevent personal conflicts of interest of their
covered employees; and
(b) Prohibit covered employees who have access to non-public
information by reason of performance on a Government contract from using
such information for personal gain.
3.1103 Procedures.
(a) By use of the contract clause at 52.203-16, as prescribed at
3.1106, the contracting officer shall require each contractor whose
employees perform acquisition functions closely associated with
inherently Government functions to--
(1) Have procedures in place to screen covered employees for
potential personal conflicts of interest by--
(i) Obtaining and maintaining from each covered employee, when the
employee is initially assigned to the task under the contract, a
disclosure of interests that might be affected by the task to which the
employee has been assigned, as follows:
(A) Financial interests of the covered employee, of close family
members, or of other members of the covered employee's household.
(B) Other employment or financial relationships of the covered
employee (including seeking or negotiating for prospective employment or
business).
(C) Gifts, including travel; and
(ii) Requiring each covered employee to update the disclosure
statement whenever the employee's personal or financial circumstances
change in such a way that a new personal conflict of interest might
occur because of the task the covered employee is performing.
(2) For each covered employee--
(i) Prevent personal conflicts of interest, including not assigning
or allowing a covered employee to perform any task under the contract
for which the Contractor has identified a personal conflict of interest
for the employee that the Contractor or employee cannot satisfactorily
prevent or mitigate in consultation with the contracting agency;
(ii) Prohibit use of non-public information accessed through
performance of a Government contract for personal gain; and
(iii) Obtain a signed non-disclosure agreement to prohibit
disclosure of non-public information accessed through performance of a
Government contract.
(3) Inform covered employees of their obligation--
(i) To disclose and prevent personal conflicts of interest;
(ii) Not to use non-public information accessed through performance
of a Government contract for personal gain; and
(iii) To avoid even the appearance of personal conflicts of
interest;
(4) Maintain effective oversight to verify compliance with personal
conflict-of-interest safeguards;
(5) Take appropriate disciplinary action in the case of covered
employees who fail to comply with policies established pursuant to this
section; and
(6) Report to the contracting officer any personal conflict-of-
interest violation by a covered employee as soon as
[[Page 82]]
identified. This report shall include a description of the violation and
the proposed actions to be taken by the contractor in response to the
violation, with follow-up reports of corrective actions taken, as
necessary.
(b) If a contractor reports a personal conflict-of-interest
violation by a covered employee to the contracting officer in accordance
with paragraph (b)(6) of the clause at 52.203-16, Preventing Personal
Conflicts of Interest, the contracting officer shall--
(1) Review the actions taken by the contractor;
(2) Determine whether any action taken by the contractor has
resolved the violation satisfactorily; and
(3) If the contracting officer determines that the contractor has
not resolved the violation satisfactorily, take any appropriate action
in consultation with agency legal counsel.
3.1104 Mitigation or waiver.
(a) In exceptional circumstances, if the contractor cannot
satisfactorily prevent a personal conflict of interest as required by
paragraph (b)(2)(i) of the clause at 52.203-16, Preventing Personal
Conflicts of Interest, the contractor may submit a request, through the
contracting officer, for the head of the contracting activity to--
(1) Agree to a plan to mitigate the personal conflict of interest;
or
(2) Waive the requirement to prevent personal conflicts of interest.
(b) If the head of the contracting activity determines in writing
that such action is in the best interest of the Government, the head of
the contracting activity may impose conditions that provide mitigation
of a personal conflict of interest or grant a waiver.
(c) This authority shall not be redelegated.
3.1105 Violations.
If the contracting officer suspects violation by the contractor of a
requirement of paragraph (b), (c)(3), or (d) of the clause at 52.203-16,
Preventing Personal Conflicts of Interest, the contracting officer shall
contact the agency legal counsel for advice and/or recommendations on a
course of action.
3.1106 Contract clause.
(a) Insert the clause at 52.203-16, Preventing Personal Conflicts of
Interest, in solicitations and contracts that--
(1) Exceed the simplified acquisition threshold; and
(2) Include a requirement for services by contractor employee(s)
that involve performance of acquisition functions closely associated
with inherently governmental functions for, or on behalf of, a Federal
agency or department.
(b) If only a portion of a contract is for the performance of
acquisition functions closely associated with inherently governmental
functions, then the contracting officer shall still insert the clause,
but shall limit applicability of the clause to that portion of the
contract that is for the performance of such services.
(c) Do not insert the clause in solicitations or contracts with a
self-employed individual if the acquisition functions closely associated
with inherently governmental functions are to be performed entirely by
the self-employed individual, rather than an employee of the contractor.
PART 4_ADMINISTRATIVE AND INFORMATION MATTERS--Table of Contents
Sec.
4.000 Scope of part.
4.001 Definitions.
Subpart 4.1_Contract Execution
4.101 Contracting officer's signature.
4.102 Contractor's signature.
4.103 Contract clause.
Subpart 4.2_Contract Distribution
4.201 Procedures.
4.202 Agency distribution requirements.
4.203 Taxpayer identification information.
Subpart 4.3_Paper Documents
4.300 Scope of subpart.
4.301 Definition.
4.302 Policy.
4.303 Contract clause.
Subpart 4.4_Safeguarding Classified Information Within Industry
4.401 [Reserved]
4.402 General.
4.403 Responsibilities of contracting officers.
[[Page 83]]
4.404 Contract clause.
Subpart 4.5_Electronic Commerce in Contracting
4.500 Scope of subpart.
4.501 [Reserved]
4.502 Policy.
Subpart 4.6_Contract Reporting
4.600 Scope of subpart.
4.601 Definitions.
4.602 General.
4.603 Policy.
4.604 Responsibilities.
4.605 Procedures.
4.606 Reporting Data.
4.607 Solicitation provisions and contract clause.
Subpart 4.7_Contractor Records Retention
4.700 Scope of subpart.
4.701 Purpose.
4.702 Applicability.
4.703 Policy.
4.704 Calculation of retention periods.
4.705 Specific retention periods.
4.705-1 Financial and cost accounting records.
4.705-2 Pay administration records.
4.705-3 Acquisition and supply records.
4.706 [Reserved]
Subpart 4.8_Government Contract Files
4.800 Scope of subpart.
4.801 General.
4.802 Contract files.
4.803 Contents of contract files.
4.804 Closeout of contract files.
4.804-1 Closeout by the office administering the contract.
4.804-2 Closeout of the contracting office files if another office
administers the contract.
4.804-3 Closeout of paying office contract files.
4.804-4 Physically completed contracts.
4.804-5 Procedures for closing out contract files.
4.805 Storage, handling, and contract files.
Subpart 4.9_Taxpayer Identification Number Information
4.900 Scope of subpart.
4.901 Definition.
4.902 General.
4.903 Reporting contract information to the IRS.
4.904 Reporting payment information to the IRS.
4.905 Solicitation provision.
Subpart 4.10_Uniform Use of Line Items
4.1000 Scope.
4.1001 Policy.
4.1002 Applicability.
4.1003 Establishing line items.
4.1004 Establishing subline items.
4.1005 Data elements for line items and subline items.
4.1005-1 Required data elements.
4.1005-2 Exceptions.
4.1006 Modifications.
4.1007 Solicitation alternative line item proposal.
4.1008 Solicitation provision.
Subpart 4.11_System for Award Management
4.1100 Scope.
4.1101 Definitions.
4.1102 Policy.
4.1103 Procedures.
4.1104 Disaster Response Registry.
4.1105 Solicitation provision and contract clauses.
Subpart 4.12_Representations and Certifications
4.1200 Scope.
4.1201 Policy.
4.1202 Solicitation provision and contract clause.
Subpart 4.13_Personal Identity Verification
4.1300 Scope of subpart.
4.1301 Policy.
4.1302 Acquisition of approved products and services for personal
identity verification.
4.1303 Contract clause.
Subpart 4.14_Reporting Executive Compensation and First-Tier Subcontract
Awards
4.1400 Scope of subpart.
4.1401 Applicability.
4.1402 Procedures.
4.1403 Contract clause.
Subpart 4.15 [Reserved]
Subpart 4.16_Unique Procurement Instrument Identifiers
4.1600 Scope of subpart.
4.1601 Policy.
4.1602 Identifying the PIID and supplementary PIID.
4.1603 Procedures.
Subpart 4.17_Service Contracts Inventory
4.1700 Scope of subpart.
4.1701 Definitions.
[[Page 84]]
4.1702 Applicability.
4.1703 Reporting requirements.
4.1704 Contracting officer responsibilities.
4.1705 Contract clauses.
Subpart 4.18_Commercial and Government Entity Code
4.1800 Scope of subpart.
4.1801 Definitions.
4.1802 Policy.
4.1803 Verifying CAGE codes prior to award.
4.1804 Solicitation provisions and contract clause.
Subpart 4.19_Basic Safeguarding of Covered Contractor Information
Systems
4.1901 Definitions.
4.1902 Applicability.
4.1903 Contract clause.
Subpart 4.20_Prohibition on Contracting for Hardware, Software, and
Services Developed or Provided by Kaspersky Lab
4.2001 Definitions.
4.2002 Prohibition.
4.2003 Notification.
4.2004 Contract clause.
Subpart 4.21_Prohibition on Contracting for Certain Telecommunications
and Video Surveillance Services or Equipment
4.2100 Scope of subpart.
4.2101 Definitions.
4.2102 Prohibition.
4.2103 Procedures.
4.2104 Waivers.
4.2105 Solicitation provisions and contract clause.
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C.
20113.
Source: 48 FR 42113, Sept. 19, 1983, unless otherwise noted.
4.000 Scope of part.
This part prescribes policies and procedures relating to the
administrative aspects of contract execution, contractor-submitted paper
documents, distribution, reporting, retention, and files.
[60 FR 28493, May 31, 1995]
4.001 Definitions.
As used in this part--
Procurement Instrument Identifier (PIID) means the Government-unique
identifier for each solicitation, contract, agreement, or order. For
example, an agency may use as its PIID for procurement actions, such as
delivery and task orders or basic ordering agreements, the order or
agreement number in conjunction with the contract number (see 4.1602).
Supplementary procurement instrument identifier means the non-unique
identifier for a procurement action that is used in conjunction with the
Government-unique identifier. For example, an agency may use as its PIID
for an amended solicitation, the Government-unique identifier for a
solicitation number (e.g., N0002309R0009) in conjunction with a non-
unique amendment number (e.g., 0001). The non-unique amendment number
represents the supplementary PIID.
[76 FR 39235, July 5, 2011]
Subpart 4.1_Contract Execution
4.101 Contracting officer's signature.
Only contracting officers shall sign contracts on behalf of the
United States. The contracting officer's name and official title shall
be typed, stamped, or printed on the contract. The contracting officer
normally signs the contract after it has been signed by the contractor.
The contracting officer shall ensure that the signer(s) have authority
to bind the contractor (see specific requirements in 4.102 of this
subpart).
[60 FR 34736, July 3, 1995]
4.102 Contractor's signature.
(a) Individuals. A contract with an individual shall be signed by
that individual. A contract with an individual doing business as a firm
shall be signed by that individual, and the signature shall be followed
by the individual's typed, stamped, or printed name and the words ``, an
individual doing business as ______________________'' [insert name of
firm].
(b) Partnerships. A contract with a partnership shall be signed in
the partnership name. Before signing for the Government, the contracting
officer shall obtain a list of all partners and ensure that the
individual(s) signing for the partnership have authority to bind the
partnership.
[[Page 85]]
(c) Corporations. A contract with a corporation shall be signed in
the corporate name, followed by the word ``by'' and the signature and
title of the person authorized to sign. The contracting officer shall
ensure that the person signing for the corporation has authority to bind
the corporation.
(d) Joint venturers. A contract with joint venturers may involve any
combination of individuals, partnerships, or corporations. The contract
shall be signed by each participant in the joint venture in the manner
prescribed in paragraphs (a) through (c) of this section for each type
of participant. When a corporation is participating, the contracting
officer shall verify that the corporation is authorized to participate
in the joint venture.
(e) Agents. When an agent is to sign the contract, other than as
stated in paragraphs (a) through (d) of this section, the agent's
authorization to bind the principal must be established by evidence
satisfactory to the contracting officer.
[48 FR 42113, Sept. 19, 1983, as amended at 62 FR 235, Jan. 2, 1997; 84
FR 19840, May 6, 2019]
4.103 Contract clause.
The contracting officer shall insert the clause at 52.204-1,
Approval of Contract, in solicitations and contracts if required by
agency procedures.
[49 FR 26741, June 29, 1984]
Subpart 4.2_Contract Distribution
4.201 Procedures.
Contracting officers shall distribute copies of contracts or
modifications within 10 working days after execution by all parties. As
a minimum, the contracting officer shall--
(a) Distribute simultaneously one signed copy or reproduction of the
signed contract to the contractor and the paying office;
(b) When a contract is assigned to another office for contract
administration (see subpart 42.2), provide to that office--
(1) One copy or reproduction of the signed contract and of each
modification; and
(2) A copy of the contract distribution list, showing those offices
that should receive copies of modifications, and any changes to the list
as they occur;
(c) Distribute one copy to each accounting and finance office
(funding office) whose funds are cited in the contract;
(d) When the contract is not assigned for administration but
contains a Cost Accounting Standards clause, provide one copy of the
contract to the cognizant administrative contracting officer and mark
the copy ``FOR COST ACCOUNTING STANDARDS ADMINISTRATION ONLY'' (see
30.601(b));
(e) Provide one copy of each contract or modification that requires
audit service to the appropriate field audit office listed in the
``Directory of Federal Contract Audit Offices'' (see 42.103); and
(f) Provide copies of contracts and modifications to those
organizations required to perform contract administration support
functions (e.g., when manufacturing is performed at multiple sites, the
contract administration office cognizant of each location).
[48 FR 42113, Sept. 19, 1983, as amended at 60 FR 34736, July 3, 1995;
84 FR 19840, May 6, 2019]
4.202 Agency distribution requirements.
Agencies shall limit additional distribution requirements to the
minimum necessary for proper performance of essential functions. When
contracts are assigned for administration to a contract administration
office located in an agency different from that of the contracting
office (see part 42), the two agencies shall agree on any necessary
distribution in addition to that prescribed in 4.201.
[48 FR 42113, Sept. 19, 1983, as amended at 84 FR 19840, May 6, 2019]
4.203 Taxpayer identification information.
(a) If the contractor has furnished a Taxpayer Identification Number
(TIN) when completing the solicitation provision at 52.204-3, Taxpayer
Identification, or paragraph (l) of the solicitation provision at
52.212-3, Offeror Representations and Certifications-- Commercial
Products and Commercial Services, the contracting officer shall,
[[Page 86]]
unless otherwise provided in agency procedures, attach a copy of the
completed solicitation provision as the last page of the copy of the
contract sent to the payment office.
(b) If the TIN or type of organization is derived from a source
other than the provision at 52.204-3 or 52.212-3(l), the contracting
officer shall annotate the last page of the contract or order forwarded
to the payment office to state the contractor's TIN and type of
organization, unless this information is otherwise provided to the
payment office in accordance with agency procedures.
(c) If the contractor provides its TIN or type of organization to
the contracting officer after award, the contracting officer shall
forward the information to the payment office within 7 days of its
receipt.
(d) Federal Supply Schedule contracts. Each contracting officer that
places an order under a Federal Supply Schedule contract (see Subpart
8.4) shall provide the TIN and type of organization information to the
payment office in accordance with paragraph (b) of this section.
(e) Basic ordering agreements and indefinite-delivery contracts
(other than Federal Supply Schedule contracts). (1) Each contracting
officer that issues a basic ordering agreement or indefinite-delivery
contract (other than a Federal Supply Schedule contract) shall provide
to contracting officers placing orders under the agreement or contract
(if the contractor is not required to provide this information to the
System for Award Management)--
(i) A copy of the agreement or contract with a copy of the completed
solicitation provision at 52.204-3 or 52.212-3(l) as the last page of
the agreement or contract; or
(ii) The contractor's TIN and type of organization information.
(2) Each contracting officer that places an order under a basic
ordering agreement or indefinite-delivery contract (other than a Federal
Supply Schedule contract) shall provide the TIN and type of organization
information to the payment office in accordance with paragraph (a) or
(b) of this section.
[63 FR 58588, Oct. 30, 1998, as amended at 68 FR 56672, Oct. 1, 2003; 73
FR 33638, June 12, 2008; 78 FR 37677, June 21, 2013; 86 FR 61020, Nov.
4, 2021]
Subpart 4.3_Paper Documents
4.300 Scope of subpart.
This subpart provides policies and procedures on contractor-
submitted paper documents.
[60 FR 28493, May 31, 1995]
4.301 Definition.
Printed or copied double-sided, as used in this subpart, means
printing or reproducing a document so that information is on both sides
of a sheet of paper.
[65 FR 36017, June 6, 2000]
4.302 Policy.
(a) Section 3(a) of E.O. 13423, Strengthening Federal Environmental,
Energy, and Transportation Management, directs agencies to implement
waste prevention. In addition, section 2(e) of E.O. 13514, Federal
Leadership in Environmental, Energy, and Economic Performance, directs
agencies to eliminate waste. Electronic commerce methods (see 4.502) and
double-sided printing and copying are best practices for waste
prevention.
(b) When electronic commerce methods (see 4.502) are not used,
agencies shall require contractors to submit paper documents to the
Government relating to an acquisition printed or copied double-sided on
at least 30 percent postconsumer fiber paper whenever practicable. If
the contractor cannot print or copy double-sided, it shall print or copy
single-sided on at least 30 percent postconsumer fiber paper.
[76 FR 31397, May 31, 2011]
4.303 Contract clause.
Insert the clause at 52.204-4, Printed or Copied Double-Sided on
Recycled Paper, in solicitations and contracts that exceed the
simplified acquisition threshold.
[65 FR 36017, June 6, 2000]
[[Page 87]]
Subpart 4.4_Safeguarding Classified Information Within Industry
4.401 [Reserved]
4.402 General.
(a) Executive Order 12829, January 6, 1993 (58 FR 3479, January 8,
1993), entitled ``National Industrial Security Program'' (NISP),
establishes a program to safeguard Federal Government classified
information that is released to contractors, licensees, and grantees of
the United States Government. Executive Order 12829 amends Executive
Order 10865, February 20, 1960 (25 FR 1583, February 25, 1960), entitled
``Safeguarding Classified Information Within Industry,'' as amended by
Executive Order 10909, January 17, 1961 (26 FR 508, January 20, 1961).
(b) The National Industrial Security Program Operating Manual
(NISPOM) incorporates the requirements of these Executive orders. The
Secretary of Defense, in consultation with all affected agencies and
with the concurrence of the Secretary of Energy, the Chairman of the
Nuclear Regulatory Commission, the Director of National Intelligence,
and the Secretary of Homeland Security is responsible for issuance and
maintenance of this Manual. The following publications implement the
program:
(1) National Industrial Security Program Operating Manual (NISPOM)
(32 CFR part 117).
(2) DoD Manual 5220.22, Volume 2, National Industrial Security
Program: Industrial Security Procedures for Government Activities.
(c) Procedures for the protection of information relating to foreign
classified contracts awarded to U.S. industry, and instructions for the
protection of U.S. information relating to classified contracts awarded
to foreign firms, are prescribed in 32 CFR 117.19.
(d) Nondefense agencies that have industrial security services
agreements with DoD, and DoD components, shall use the DD Form 254,
Contract Security Classification Specification, to provide security
classification guidance to U.S. contractors, and subcontractors as
applicable, requiring access to information classified as
``Confidential'', ``Secret'', or ``Top Secret''.
(1) Provided that the data submittal is unclassified, the DD Form
254 shall be completed electronically in the NISP Contract
Classification System (NCCS), which is accessible https://www.dcsa.mil/
is/nccs/. Nondefense agencies with an existing DD Form 254 information
system may use that system.
(2)(i) A contractor, or subcontractor (if applicable), requiring
access to classified information under a contract shall be identified
with a Commercial and Government Entity (CAGE) code on the DD Form 254
(see subpart 4.18 for information on obtaining and validating CAGE
codes).
(ii) Each location of contractor or subcontractor performance listed
on the DD Form 254 is required to reflect a corresponding unique CAGE
code for each listed location unless the work is being performed at a
Government facility, in which case the agency location code shall be
used. Each subcontractor location requiring access to classified
information must be listed on the DD Form 254.
(iii) Contractor and subcontractor performance locations listed on
the DD Form 254 are not required to be separately registered in the
System for Award Management (SAM) solely for the purposes of a DD Form
254 (see subpart 4.11 for information on registering in SAM).
(e) Part 27, Patents, Data, and Copyrights, contains policy and
procedures for safeguarding classified information in patent
applications and patents.
[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996;
73 FR 21781, Apr. 22, 2008; 84 FR 19840, May 6, 2019; 85 FR 40063, July
2, 2020; 86 FR 13794, Mar. 10, 2021; 87 FR 24844, Apr. 26, 2022; 87 FR
25572, May 2, 2022; 87 FR 49502, Aug. 10, 2022]
4.403 Responsibilities of contracting officers.
(a) Presolicitation phase. Contracting officers shall review all
proposed solicitations to determine whether access to classified
information may be required by offerors, or by a contractor during
contract performance.
[[Page 88]]
(1) If access to classified information of another agency may be
required, the contracting officer shall--
(i) Determine if the agency is covered by the NISP; and
(ii) Follow that agency's procedures for determining the security
clearances of firms to be solicited.
(2) If the classified information required is from the contracting
officer's agency, the contracting officer shall follow agency
procedures.
(b) Solicitation phase. Contracting officers shall--
(1) Ensure that the classified acquisition is conducted as required
by the NISP or agency procedures, as appropriate; and
(2) Include--
(i) An appropriate Security Requirements clause in the solicitation
(see 4.404); and
(ii) As appropriate, in solicitations and contracts when the
contract may require access to classified information, a requirement for
security safeguards in addition to those provided in the clause (52.204-
2, Security Requirements).
(c) Award phase. Contracting officers shall inform contractors and
subcontractors of the security classifications and requirements assigned
to the various documents, materials, tasks, subcontracts, and components
of the classified contract as identified in the requirement
documentation as follows:
(1) Nondefense agencies that have industrial security services
agreements with DoD, and DoD components, shall use the Contract Security
Classification Specification, DD Form 254. The contracting officer, or
authorized agency representative, is the approving official for the DD
Form 254 associated with the prime contract and shall ensure the DD Form
254 is properly prepared, distributed by and coordinated with
requirements and security personnel in accordance with agency
procedures, see 4.402(d)(1).
(2) Contracting officers in agencies not covered by the NISP shall
follow agency procedures.
[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996;
73 FR 21781, Apr. 22, 2008; 84 FR 19840, May 6, 2019; 85 FR 40063, July
2, 2020]
4.404 Contract clause.
(a) The contracting officer shall insert the clause at 52.204-2,
Security Requirements, in solicitations and contracts when the contract
may require access to classified information, unless the conditions
specified in paragraph (d) of this section apply.
(b) If a cost contract (see 16.302) for research and development
with an educational institution is contemplated, the contracting officer
shall use the clause with its Alternate I.
(c) If a construction or architect-engineer contract where employee
identification is required for security reasons is contemplated, the
contracting officer shall use the clause with its Alternate II.
(d) If the contracting agency is not covered by the NISP and has
prescribed a clause and alternates that are substantially the same as
those at 52.204-2, the contracting officer shall use the agency-
prescribed clause as required by agency procedures.
[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996;
84 FR 19840, May 6, 2019]
Subpart 4.5_Electronic Commerce in Contracting
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C.
2473(c).
Source: 63 FR 58592, Oct. 30, 1998, unless otherwise noted.
4.500 Scope of subpart.
This subpart provides policy and procedures for the establishment
and use of electronic commerce in Federal acquisition as required by 41
U.S.C. 2301.
[79 FR 24197, Apr. 29, 2014]
4.501 [Reserved]
4.502 Policy.
(a) The Federal Government shall use electronic commerce whenever
practicable or cost-effective. The use of terms commonly associated with
paper transactions (e.g., ``copy,'' ``document,'' ``page,'' ``printed,''
``sealed envelope,'' and ``stamped'') shall not be interpreted to
restrict the use of electronic commerce. Contracting officers
[[Page 89]]
may supplement electronic transactions by using other media to meet the
requirements of any contract action governed by the FAR (e.g., transmit
hard copy of drawings).
(b) Agencies may exercise broad discretion in selecting the hardware
and software that will be used in conducting electronic commerce.
However, as required by 41 U.S.C. 2301, the head of each agency, after
consulting with the Administrator of OFPP, shall ensure that systems,
technologies, procedures, and processes used by the agency to conduct
electronic commerce--
(1) Are implemented uniformly throughout the agency, to the maximum
extent practicable;
(2) Are implemented only after considering the full or partial use
of existing infrastructures;
(3) Facilitate access to Government acquisition opportunities by
small business concerns, small disadvantaged business concerns, women-
owned, veteran-owned, HUBZone, and service-disabled veteran-owned small
business concerns;
(4) Include a single means of providing widespread public notice of
acquisition opportunities through the Governmentwide point of entry and
a means of responding to notices or solicitations electronically; and
(5) Comply with nationally and internationally recognized standards
that broaden interoperability and ease the electronic interchange of
information, such as standards established by the National Institute of
Standards and Technology.
(c) Before using electronic commerce, the agency head shall ensure
that the agency systems are capable of ensuring authentication and
confidentiality commensurate with the risk and magnitude of the harm
from loss, misuse, or unauthorized access to or modification of the
information.
(d) Agencies may accept electronic signatures and records in
connection with Government contracts.
[63 FR 58592, Oct. 30, 1998, as amended at 66 FR 27409, May 16, 2001; 68
FR 28094, May 22, 2003; 70 FR 14954, Mar. 23, 2005; 72 FR 63076, Nov. 7,
2007; 79 FR 24197, Apr. 29, 2014]
Subpart 4.6_Contract Reporting
Source: 73 FR 21776, Apr. 22, 2008, unless otherwise noted.
4.600 Scope of subpart.
This subpart prescribes uniform reporting requirements for the
Federal Procurement Data System (FPDS).
4.601 Definitions.
As used in this subpart--
Contract action means any oral or written action that results in the
purchase, rent, or lease of supplies or equipment, services, or
construction using appropriated dollars over the micro-purchase
threshold, or modifications to these actions regardless of dollar value.
Contract action does not include grants, cooperative agreements, other
transactions, real property leases, requisitions from Federal stock,
training authorizations, or other non-FAR based transactions.
Contract action report (CAR) means contract action data required to
be entered into the Federal Procurement Data System (FPDS).
Definitive contract means any contract that must be reported to FPDS
other than an indefinite delivery vehicle. This definition is only for
FPDS, and is not intended to apply to Part 16.
Entitlement program means a Federal program that guarantees a
certain level of benefits to persons or other entities who meet
requirements set by law, such as Social Security, farm price supports,
or unemployment benefits.
Generic entity identifier means a number or other identifier
assigned to a category of vendors and not specific to any individual or
entity.
Indefinite delivery vehicle (IDV) means an indefinite delivery
contract or agreement that has one or more of the following clauses:
(1) 52.216-18, Ordering.
(2) 52.216-19, Order Limitations.
(3) 52.216-20, Definite Quantity.
(4) 52.216-21, Requirements.
(5) 52.216-22, Indefinite Quantity.
(6) Any other clause allowing ordering.
[73 FR 21776, Apr. 22, 2008, as amended at 74 FR 2713, Jan. 15, 2009; 75
FR 77735, Dec. 13, 2010; 81 FR 67738, Sept. 30, 2016]
[[Page 90]]
4.602 General.
(a) The FPDS provides a comprehensive web-based tool for agencies to
report contract actions. The resulting data provides--
(1) A basis for recurring and special reports to the President, the
Congress, the Government Accountability Office, Federal executive
agencies, and the general public;
(2) A means of measuring and assessing the effect of Federal
contracting on the Nation's economy and the extent to which small,
veteran-owned small, service-disabled veteran-owned small, HUBZone
small, small disadvantaged, women-owned small business concerns, and
AbilityOne nonprofit agencies operating under 41 U.S.C. chapter 85,
Committee for Purchase from People Who Are Blind or Severely Disabled,
are sharing in Federal contracts;
(3) A means of measuring and assessing the effect of Federal
contracting for promoting sustainable technologies, materials, products,
and high-performance sustainable buildings. This is accomplished by
collecting and reporting agency data on sustainable acquisition,
including types of products purchased, the purchase costs, and the
exceptions used for other than sustainable acquisition; and
(4) A means of measuring and assessing the effect of other policy
and management initiatives (e.g., performance based acquisitions and
competition).
(b) FPDS does not provide reports for certain acquisition
information used in the award of a contract action (e.g., subcontracting
data, funding data, or accounting data).
(c) The FPDS Web site, https://www.fpds.gov, provides instructions
for submitting data. It also provides--
(1) A complete list of departments, agencies, and other entities
that submit data to the FPDS;
(2) Technical and end-user guidance;
(3) A computer-based tutorial; and
(4) Information concerning reports not generated in FPDS.
[73 FR 21776, Apr. 22, 2008, as amended at 73 FR 53994, Sept. 17, 2008;
76 FR 31397, May 31, 2011; 79 FR 24197, Apr. 29, 2014]
4.603 Policy.
(a) In accordance with the Federal Funding Accountability and
Transparency Act of 2006 (Pub. L. 109-282), all unclassified Federal
award data must be publicly accessible.
(b) Executive agencies shall use FPDS to maintain publicly available
information about all unclassified contract actions exceeding the micro-
purchase threshold, and any modifications to those actions that change
previously reported contract action report data, regardless of dollar
value.
(c) Agencies awarding assisted acquisitions or direct acquisitions
must report these actions and identify the Program/Funding Agency and
Office Codes from the applicable agency codes maintained by each agency
at FPDS. These codes represent the agency and office that has provided
the predominant amount of funding for the contract action. For assisted
acquisitions, the requesting agency will receive socioeconomic credit
for meeting agency small business goals, where applicable. Requesting
agencies shall provide the appropriate agency/bureau component code as
part of the written interagency agreement between the requesting and
servicing agencies (see 17.502-1(a)(1)).
(d) Agencies awarding contract actions with a mix of appropriated
and non-appropriated funding shall only report the full appropriated
portion of the contract action in FPDS.
[77 FR 69721, Nov. 20, 2012, as amended at 84 FR 19838, May 6, 2019]
4.604 Responsibilities.
(a) The Senior Procurement Executive in coordination with the head
of the contracting activity is responsible for developing and monitoring
a process to ensure timely and accurate reporting of contractual actions
to FPDS.
(b)(1) The responsibility for the completion and accuracy of the
individual contract action report (CAR) resides with the contracting
officer who awarded the contract action. CARs in a draft or error status
in FPDS are not considered complete.
(2) The CAR must be confirmed for accuracy by the contracting
officer prior to release of the contract award. The CAR must then be
completed in FPDS within three business days after contract award.
[[Page 91]]
(3) For any action awarded in accordance with 6.302-2 or pursuant to
any of the authorities listed at subpart 18.2, the CAR must be completed
in FPDS within 30 days after contract award.
(4) When the contracting office receives written notification that a
contractor has changed its size status in accordance with the clause at
52.219-28, Post-Award Small Business Program Rerepresentation, the
contracting officer shall update the size status in FPDS within 30 days
after receipt of contractor's notification of rerepresentation.
(5) If after award of a contract, the contracting officer receives
written notification of SBA's final decision on a protest concerning a
size determination, the contracting officer shall update FPDS to reflect
the final decision.
(c) The chief acquisition officer of each agency required to report
its contract actions must submit to the General Services Administration
(GSA), in accordance with FPDS guidance, within 120 days after the end
of each fiscal year, an annual certification of whether, and to what
degree, agency CAR data for the preceding fiscal year is complete and
accurate.
[73 FR 21776, Apr. 22, 2008, as amended at 76 FR 68044, Nov. 2, 2011; 77
FR 69717, Nov. 20, 2012; 79 FR 43582, July 25, 2014; 84 FR 19840, May 6,
2019]
4.605 Procedures.
(a) Procurement Instrument Identifier (PIID). Agencies shall have in
place a process that ensures that each PIID reported to FPDS is unique
Governmentwide, for all solicitations, contracts, blanket purchase
agreements, basic agreements, basic ordering agreements, or orders in
accordance with 4.1601 to 4.1603, and will remain so for at least 20
years from the date of contract award. Other pertinent PIID instructions
for FPDS reporting can be found at https://www.fpds.gov.
(b) Unique entity identifier. The contracting officer shall identify
and report a unique entity identifier for the successful offeror on a
contract action. The unique entity identifier shall correspond to the
successful offeror's name and address as stated in the offer and
resultant contract, and as registered in the System for Award Management
in accordance with the provision at 52.204-7, System for Award
Management. The contracting officer shall ask the offeror to provide its
unique entity identifier by using either the provision at 52.204-6,
Unique Entity Identifier, the provision at 52.204-7, System for Award
Management, or the provision at 52.212-1, Instructions to Offerors--
Commercial Products and Commercial Services. (For a discussion of the
Commercial and Government Entity (CAGE) Code, which is a different
identifier, see subpart 4.18.)
(c) Generic entity identifier.(1) The use of a generic entity
identifier should be limited, and only used in the situations described
in paragraph (c)(2) of this section. Use of a generic entity identifier
does not supersede the requirements of provisions 52.204-6, Unique
Entity Identifier or 52.204-7, System for Award Management (if present
in the solicitation) for the contractor to have a unique entity
identifier assigned.
(2) Authorized generic entity identifiers, maintained by the
Integrated Award Environment (IAE) program office (http://www.gsa.gov/
portal/content/105036), may be used to report contracts in lieu of the
contractor's actual unique entity identifier only for--
(i) Contract actions valued at or below $30,000 that are awarded to
a contractor that is--
(A) A student;
(B) A dependent of either a veteran, foreign service officer, or
military member assigned outside the United States and its outlying
areas (as defined in 2.101); or
(C) Located outside the United States and its outlying areas for
work to be performed outside the United States and its outlying areas
and the contractor does not otherwise have a unique entity identifier;
(ii) Contracts valued above $30,000 awarded to individuals located
outside the United States and its outlying areas for work to be
performed outside the United States and its outlying areas; or
(iii) Contracts when specific public identification of the
contracted party could endanger the mission, contractor, or recipients
of the acquired
[[Page 92]]
goods or services. The contracting officer must include a written
determination in the contract file of a decision applicable to authority
under this paragraph (c)(2)(iii).
(d) American Recovery and Reinvestment Act actions. The contracting
officer, when entering data in FPDS, shall use the instructions at
https://www.fpds.gov to identify any action funded in whole or in part
by the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5).
(e) Office codes. Agencies shall by March 31, 2016--
(1) Use the Activity Address Code (AAC), as defined in 2.101,
assigned to the issuing contracting office as the contracting office
code, and
(2) Use the AAC assigned to the program/funding office providing the
predominance of funding for the contract action as the program/funding
office code.
[73 FR 21776, Apr. 22, 2008, as amended at 74 FR 14638, Mar. 31, 2009;
76 FR 39235, July 5, 2011; 77 FR 69717, Nov. 20, 2012; 78 FR 37677, June
21, 2013; 79 FR 43590, July 25, 2014; 79 FR 31190, May 30, 2014; 79 FR
61740, Oct. 14, 2014; 79 FR 63562, Oct. 24, 2014; 80 FR 53439, Sept. 3,
2015; 80 FR 38296, July 2, 2015; 83 FR 48695, Sept. 26, 2018; 81 FR
67738, Sept. 30, 2016; 86 FR 61020, Nov. 4, 2021]
4.606 Reporting Data.
(a) Actions required to be reported to FPDS. (1) As a minimum,
agencies must report the following contract actions over the micro-
purchase threshold, regardless of solicitation process used, and
agencies must report any modification to these contract actions that
change previously reported contract action data, regardless of dollar
value:
(i) Definitive contracts, including purchase orders and imprest fund
buys over the micro-purchase threshold awarded by a contracting officer.
(ii) Indefinite delivery vehicle (identified as an ``IDV'' in FPDS).
Examples of IDVs include the following:
(A) Task and Delivery Order Contracts (see Subpart 16.5),
including--
(1) Government-wide acquisition contracts.
(2) Multi-agency contracts.
(B) GSA Federal supply schedules.
(C) Blanket Purchase Agreements (see 13.303).
(D) Basic Ordering Agreements (see 16.703).
(E) Any other agreement or contract against which individual orders
or purchases may be placed.
(iii) All calls and orders awarded under the indefinite delivery
vehicles identified in paragraph (a)(1)(ii) of this section.
(2) The GSA Office of Charge Card Management will provide the
Government purchase card data, at a minimum annually, and GSA will
incorporate that data into FPDS for reports.
(3) Agencies may use the FPDS Express Reporting capability for
consolidated multiple action reports for a vendor when it would be
overly burdensome to report each action individually. When used, Express
Reporting should be done at least monthly.
(b) Reporting other actions. Agencies may submit actions other than
those listed at paragraph (a)(1) of this section only if they are able
to be segregated from FAR-based actions and this is approved in writing
by the FPDS Program Office. Prior to the commencement of reporting,
agencies must contact the FPDS Program Office if they desire to submit
any of the following types of activity:
(1) Transactions at or below the micro-purchase threshold, except as
provided in paragraph (a)(2) of this section.
(2) Any non-appropriated fund (NAF) or NAF portion of a contract
action using a mix of appropriated and nonappropriated funding.
(3) Lease and supplemental lease agreements for real property.
(4) Grants and entitlement actions.
(c) Actions not reported. The following types of contract actions
are not to be reported to FPDS:
(1) Imprest fund transactions below the micro-purchase threshold,
including those made via the Government purchase card (unless specific
agency procedures prescribe reporting these actions).
(2) Orders from GSA stock and the GSA Global Supply Program.
(3) Purchases made at GSA or AbilityOne service stores, as these
items stocked for resale have already been reported by GSA.
[[Page 93]]
(4) Purchases made using non-appropriated fund activity cards,
chaplain fund cards, individual Government personnel training orders,
and Defense Printing orders.
(5) Actions that, pursuant to other authority, will not be entered
in FPDS (e.g., reporting of the information would compromise national
security).
(6) Contract actions in which the required data would constitute
classified information.
(7) Resale activity (i.e., commissary or exchange activity).
(8) Revenue generating arrangements (i.e., concessions).
(9) Training expenditures not issued as orders or contracts.
(10) Interagency agreements other than inter-agency acquisitions
required to be reported at 4.606(a)(1).
(11) Letters of obligation used in the A-76 process.
(d) Agencies not subject to the FAR. Agencies not subject to the FAR
may be required by other authority (e.g., statute, OMB, or internal
agency policy) to report certain information to FPDS. Those agencies not
subject to the FAR must first receive approval from the FPDS Program
Office prior to reporting to FPDS.
[73 FR 21776, Apr. 22, 2008, as amended at 73 FR 53994, Sept. 17, 2008;
75 FR 34264, June 16, 2010; 75 FR 82567, Dec. 30, 2010; 77 FR 69717,
Nov. 20, 2012]
4.607 Solicitation provisions and contract clause.
(a) Insert the provision at 52.204-5, Women-Owned Business (Other
Than Small Business), in all solicitations that--
(1) Are not set aside for small business concerns;
(2) Exceed the simplified acquisition threshold; and
(3) Are for contracts that will be performed in the United States or
its outlying areas.
(b) Insert the provision at 52.204-6, Unique Entity Identifier, in
solicitations that do not contain the provision at 52.204-7, System for
Award Management, or meet a condition at 4.605(c)(2).
(c) Insert the clause at 52.204-12, Unique Entity Identifier
Maintenance, in solicitations and resulting contracts that contain the
provision at 52.204-6, Unique Entity Identifier.
[73 FR 21776, Apr. 22, 2008, as amended at 77 FR 69717, Nov. 20, 2012;
78 FR 37677, June 21, 2013; 81 FR 67738, Sept. 30, 2016; 84 FR 19841,
May 6, 2019]
Subpart 4.7_Contractor Records Retention
4.700 Scope of subpart.
This subpart provides policies and procedures for retention of
records by contractors to meet the records review requirements of the
Government. In this subpart, the terms ``contracts'' and ``contractors''
include ``subcontracts'' and ``subcontractors.''
4.701 Purpose.
The purpose of this subpart is to generally describe records
retention requirements and to allow reductions in the retention period
for specific classes of records under prescribed circumstances.
4.702 Applicability.
(a) This subpart applies to records generated under contracts that
contain one of the following clauses:
(1) Audit and Records--Sealed Bidding (52.214-26).
(2) Audit and Records--Negotiation (52.215-2).
(b) This subpart is not mandatory on Department of Energy contracts
for which the Comptroller General allows alternative records retention
periods. Apart from this exception, this subpart applies to record
retention periods under contracts that are subject to Chapter 137, Title
10, U.S.C., or 40 U.S.C. 101, et seq.
[48 FR 42113, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985;
50 FR 52429, Dec. 23, 1985; 60 FR 42650, Aug. 16, 1995; 60 FR 48211,
Sept. 18, 1995; 62 FR 258, Jan. 2, 1997; 70 FR 57454, Sept. 30, 2005]
4.703 Policy.
(a) Except as stated in 4.703(b), contractors shall make available
records, which includes books, documents, accounting procedures and
practices, and other data, regardless of type and regardless of whether
such items are in written form, in the form of computer
[[Page 94]]
data, or in any other form, and other supporting evidence to satisfy
contract negotiation, administration, and audit requirements of the
contracting agencies and the Comptroller General for--
(1) 3 years after final payment; or
(2) For certain records, the period specified in 4.705 through
4.705-3, whichever of these periods expires first.
(b) Contractors shall make available the foregoing records and
supporting evidence for a longer period of time than is required in
4.703(a) if--
(1) A retention period longer than that cited in 4.703(a) is
specified in any contract clause; or
(2) The contractor, for its own purposes, retains the foregoing
records and supporting evidence for a longer period. Under this
circumstance, the retention period shall be the period of the
contractor's retention or 3 years after final payment, whichever period
expires first.
(3) The contractor does not meet the original due date for
submission of final indirect cost rate proposals specified in paragraph
(d)(2) of the clause at 52.216-7, Allowable Cost and Payment. Under
these circumstances, the retention periods in 4.705 shall be
automatically extended one day for each day the proposal is not
submitted after the original due date.
(c) Nothing in this section shall be construed to preclude a
contractor from duplicating or storing original records in electronic
form unless they contain significant information not shown on the record
copy. Original records need not be maintained or produced in an audit if
the contractor or subcontractor provides photographic or electronic
images of the original records and meets the following requirements:
(1) The contractor or subcontractor has established procedures to
ensure that the imaging process preserves accurate images of the
original records, including signatures and other written or graphic
images, and that the imaging process is reliable and secure so as to
maintain the integrity of the records.
(2) The contractor or subcontractor maintains an effective indexing
system to permit timely and convenient access to the imaged records.
(3) The contractor or subcontractor retains the original records for
a minimum of one year after imaging to permit periodic validation of the
imaging systems.
(d) If the information described in paragraph (a) of this section is
maintained on a computer, contractors shall retain the computer data on
a reliable medium for the time periods prescribed. Contractors may
transfer computer data in machine readable form from one reliable
computer medium to another. Contractors' computer data retention and
transfer procedures shall maintain the integrity, reliability, and
security of the original computer data. Contractors shall also retain an
audit trail describing the data transfer. For the record retention time
periods prescribed, contractors shall not destroy, discard, delete, or
write over such computer data.
[48 FR 42113, Sept. 19, 1983, as amended at 51 FR 2649, Jan. 17, 1986;
53 FR 43388, Oct. 26, 1988; 54 FR 48982, Nov. 28, 1989; 59 FR 67015,
Dec. 28, 1994; 60 FR 42650, Aug. 16, 1995; 62 FR 64915, Dec. 9, 1997; 72
FR 27383, May 15, 2007; 84 FR 19841, May 6, 2019]
4.704 Calculation of retention periods.
(a) The retention periods in 4.705 are calculated from the end of
the contractor's fiscal year in which an entry is made charging or
allocating a cost to a Government contract or subcontract. If a specific
record contains a series of entries, the retention period is calculated
from the end of the contractor's fiscal year in which the final entry is
made. The contractor should cut off the records in annual blocks and
retain them for block disposal under the prescribed retention periods.
(b) When records generated during a prior contract are relied upon
by a contractor for certified cost or pricing data in negotiating a
succeeding contract, the prescribed periods shall run from the date of
the succeeding contract.
(c) If two or more of the record categories described in 4.705 are
interfiled and screening for disposal is not practical, the contractor
shall retain the
[[Page 95]]
entire record series for the longest period prescribed for any category
of records.
[48 FR 42113, Sept. 19, 1983, as amended at 75 FR 53142, Aug. 30, 2010]
4.705 Specific retention periods.
The contractor shall retain the records identified in 4.705-1
through 4.705-3 for the periods designated, provided retention is
required under 4.702. Records are identified in this subpart in terms of
their purpose or use and not by specific name or form number. Although
the descriptive identifications may not conform to normal contractor
usage or filing practices, these identifications apply to all contractor
records that come within the description.
4.705-1 Financial and cost accounting records.
(a) Accounts receivable invoices, adjustments to the accounts,
invoice registers, carrier freight bills, shipping orders, and other
documents which detail the material or services billed on the related
invoices: Retain 4 years.
(b) Material, work order, or service order files, consisting of
purchase requisitions or purchase orders for material or services, or
orders for transfer of material or supplies: Retain 4 years.
(c) Cash advance recapitulations, prepared as posting entries to
accounts receivable ledgers for amounts of expense vouchers prepared for
employees' travel and related expenses: Retain 4 years.
(d) Paid, canceled, and voided checks, other than those issued for
the payment of salary and wages: Retain 4 years.
(e) Accounts payable records to support disbursements of funds for
materials, equipment, supplies, and services, containing originals or
copies of the following and related documents: remittance advices and
statements, vendors' invoices, invoice audits and distribution slips,
receiving and inspection reports or comparable certifications of receipt
and inspection of material or services, and debit and credit memoranda:
Retain 4 years.
(f) Labor cost distribution cards or equivalent documents: Retain 2
years.
(g) Petty cash records showing description of expenditures, to whom
paid, name of person authorizing payment, and date, including copies of
vouchers and other supporting documents: Retain 2 years.
4.705-2 Pay administration records.
(a) Payroll sheets, registers, or their equivalent, of salaries and
wages paid to individual employees for each payroll period; change
slips; and tax withholding statements: Retain 4 years.
(b) Clock cards or other time and attendance cards: Retain 2 years.
(c) Paid checks, receipts for wages paid in cash, or other evidence
of payments for services rendered by employees: Retain 2 years.
[48 FR 42113, Sept. 19, 1983, as amended at 65 FR 36022, June 6, 2000;
67 FR 70517, Nov. 22, 2002]
4.705-3 Acquisition and supply records.
(a) Store requisitions for materials, supplies, equipment, and
services: Retain 2 years.
(b) Work orders for maintenance and other services: Retain 4 years.
(c) Equipment records, consisting of equipment usage and status
reports and equipment repair orders: Retain 4 years.
(d) Expendable property records, reflecting accountability for the
receipt and use of material in the performance of a contract: Retain 4
years.
(e) Receiving and inspection report records, consisting of reports
reflecting receipt and inspection of supplies, equipment, and materials:
Retain 4 years.
(f) Purchase order files for supplies, equipment, material, or
services used in the performance of a contract; supporting documentation
and backup files including, but not limited to, invoices, and memoranda;
e.g., memoranda of negotiations showing the principal elements of
subcontract price negotiations (see 52.244-2): Retain 4 years.
(g) Production records of quality control, reliability, and
inspection: Retain 4 years.
(h) Property records (see FAR 45.101 and 52.245-1): Retain 4 years.
[48 FR 42113, Sept. 19, 1983, as amended at 63 FR 34060, June 22,
1998;75 FR 38679, July 2, 2010]
[[Page 96]]
4.706 [Reserved]
Subpart 4.8_Government Contract Files
4.800 Scope of subpart.
This subpart prescribes requirements for establishing, maintaining,
and disposing of contract files.
[65 FR 36022, June 6, 2000]
4.801 General.
(a) The head of each office performing contracting, contract
administration, or paying functions shall establish files containing the
records of all contractual actions.
(b) The documentation in the files (see 4.803) shall be sufficient
to constitute a complete history of the transaction for the purpose of--
(1) Providing a complete background as a basis for informed
decisions at each step in the acquisition process;
(2) Supporting actions taken;
(3) Providing information for reviews and investigations; and
(4) Furnishing essential facts in the event of litigation or
congressional inquiries.
(c) The files to be established include--
(1) A file for cancelled solicitations;
(2) A file for each contract; and
(3) A file such as a contractor general file, containing documents
relating, for example, to--
(i) No specific contract;
(ii) More than one contract; or
(iii) The contractor in a general way (e.g., contractor's management
systems, past performance, or capabilities).
[48 FR 42113, Sept. 19, 1983, as amended at 84 FR 19841, May 6, 2019]
4.802 Contract files.
(a) A contract file should generally consist of--
(1) The contracting office contract file, that documents the basis
for the acquisition and the award, the assignment of contract
administration (including payment responsibilities), and any subsequent
actions taken by the contracting office;
(2) The contract administration office contract file, that documents
actions reflecting the basis for and the performance of contract
administration responsibilities; and
(3) The paying office contract file, that documents actions
prerequisite to, substantiating, and reflecting contract payments.
(b) Normally, each file should be kept separately; however, if
appropriate, any or all of the files may be combined; e.g., if all
functions or any combination of the functions are performed by the same
office.
(c) Files must be maintained at organizational levels that ensure--
(1) Effective documentation of contract actions;
(2) Ready accessibility to principal users;
(3) Minimal establishment of duplicate and working files;
(4) The safeguarding of classified documents; and
(5) Conformance with agency regulations for file location and
maintenance.
(d) If the contract files or file segments are decentralized (e.g.,
by type or function) to various organizational elements or to other
outside offices, responsibility for their maintenance must be assigned.
A central control and, if needed, a locator system should be established
to ensure the ability to locate promptly any contract files.
(e) Contents of contract files that are contractor bid or proposal
information or source selection information as defined in 2.101 must be
protected from disclosure to unauthorized persons (see 3.104-4).
(f) Agencies may retain contract files in any medium (paper,
electronic, microfilm, etc.) or any combination of media, as long as the
requirements of this subpart are satisfied.
[48 FR 42113, Sept. 19, 1983, as amended at 54 FR 20496, May 11, 1989;
55 FR 36794, Sept. 6, 1990; 59 FR 67016, Dec. 28, 1994; 62 FR 232, Jan.
2, 1997; 67 FR 13063, Mar. 20, 2002]
4.803 Contents of contract files.
The following are examples of the records normally contained, if
applicable, in contract files:
(a) Contracting office contract file. (1) Purchase request,
acquisition planning information, and other presolicitation documents.
[[Page 97]]
(2) Justifications and approvals, determinations and findings, and
associated documents.
(3) Evidence of availability of funds.
(4) Synopsis of proposed acquisition as required by part 5 or a
reference to the synopsis.
(5) The list of sources solicited, and a list of any firms or
persons whose requests for copies of the solicitation were denied,
together with the reasons for denial.
(6) Set-aside decision (see 19.506) including the type and extent of
market research conducted.
(7) Government estimate of contract price.
(8) A copy of the solicitation and all amendments thereto.
(9) Security requirements and evidence of required clearances.
(10) A copy of each offer or quotation, the related abstract, and
records of determinations concerning late offers or quotations.
Unsuccessful offers or quotations may be maintained separately, if
cross-referenced to the contract file. The only portions of the
unsuccessful offer or quotation that need be retained are--
(i) Completed solicitation sections A, B, and K;
(ii) Technical and management proposals;
(iii) Cost/price proposals; and
(iv) Any other pages of the solicitation that the offeror or quoter
has altered or annotated.
(11) Contractor's representations and certifications (see
4.1201(c)).
(12) Preaward survey reports or reference to previous preaward
survey reports relied upon.
(13) Source selection documentation.
(14) Contracting officer's determination of the contractor's
responsibility.
(15) Small Business Administration Certificate of Competency.
(16) Records of contractor's compliance with labor policies
including equal employment opportunity policies.
(17) Data and information related to the contracting officer's
determination of a fair and reasonable price. This may include--
(i) Certified cost or pricing data;
(ii) Data other than certified cost or pricing data;
(iii) Justification for waiver from the requirement to submit
certified cost or pricing data; or
(iv) Certificates of Current Cost or Pricing Data.
(18) Packaging and transportation data.
(19) Cost or price analysis.
(20) Audit reports or reasons for waiver.
(21) Record of negotiation.
(22) Justification for type of contract.
(23) Authority for deviations from this regulation, statutory
requirements, or other restrictions.
(24) Required approvals of award and evidence of legal review.
(25) Notice of award.
(26) The original of--
(i) The signed contract or award;
(ii) All contract modifications; and
(iii) Documents supporting modifications executed by the contracting
office.
(27) Synopsis of award or reference thereto.
(28) Notice to unsuccessful quoters or offerors and record of any
debriefing.
(29) Acquisition management reports (see subpart 4.6).
(30) Bid, performance, payment, or other bond documents, or a
reference thereto, and notices to sureties.
(31) Report of postaward conference.
(32) Notice to proceed, stop orders, and any overtime premium
approvals granted at the time of award.
(33) Documents requesting and authorizing modification in the normal
assignment of contract administration functions and responsibility.
(34) Approvals or disapprovals of requests for waivers or deviations
from contract requirements.
(35) Rejected engineering change proposals.
(36) Royalty, invention, and copyright reports (including invention
disclosures) or reference thereto.
(37) Contract completion documents.
(38) Documentation regarding termination actions for which the
contracting office is responsible.
(39) Cross-references to pertinent documents that are filed
elsewhere.
(40) Any additional documents on which action was taken or that
reflect
[[Page 98]]
actions by the contracting office pertinent to the contract.
(41) A current chronological list identifying the awarding and
successor contracting officers, with inclusive dates of responsibility.
(42) When limiting competition, or awarding on a sole source basis,
to economically disadvantaged women-owned small business (EDWOSB)
concerns or women-owned small business (WOSB) concerns eligible under
the WOSB Program in accordance with subpart 19.15, include
documentation--
(i) Of the type and extent of market research; and
(ii) That the NAICS code assigned to the acquisition is for an
industry that SBA has designated as--
(A) Underrepresented for EDWOSB concerns; or
(B) Substantially underrepresented for WOSB concerns.
(b) Contract administration office contract file. (1) Copy of the
contract and all modifications, together with official record copies of
supporting documents executed by the contract administration office.
(2) Any document modifying the normal assignment of contract
administration functions and responsibility.
(3) Security requirements.
(4) Certified cost or pricing data, Certificates of Current Cost or
Pricing Data, or data other than certified cost or pricing data; cost or
price analysis; and other documentation supporting contractual actions
executed by the contract administration office.
(5) Preaward survey information.
(6) Purchasing system information.
(7) Consent to subcontract or purchase.
(8) Performance and payment bonds and surety information.
(9) Postaward conference records.
(10) Orders issued under the contract.
(11) Notice to proceed and stop orders.
(12) Insurance policies or certificates of insurance or references
to them.
(13) Documents supporting advance or progress payments.
(14) Progressing, expediting, and production surveillance records.
(15) Quality assurance records.
(16) Property administration records.
(17) Documentation regarding termination actions for which the
contract administration office is responsible.
(18) Cross reference to other pertinent documents that are filed
elsewhere.
(19) Any additional documents on which action was taken or that
reflect actions by the contract administration office pertinent to the
contract.
(20) Contract completion documents.
(c) Paying office contract file. (1) Copy of the contract and any
modifications.
(2) Bills, invoices, vouchers, and supporting documents.
(3) Record of payments or receipts.
(4) Other pertinent documents.
[48 FR 42113, Sept. 19, 1983]
Editorial Note: For Federal Register citations affecting section
4.803, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.govinfo.gov.
4.804 Closeout of contract files.
4.804-1 Closeout by the office administering the contract.
(a) Except as provided in paragraph (c) of this section, time
standards for closing out contract files are as follows:
(1) Files for contracts using simplified acquisition procedures
should be considered closed when the contracting officer receives
evidence of receipt of property and final payment, unless otherwise
specified by agency regulations.
(2) Files for firm-fixed-price contracts, other than those using
simplified acquisition procedures, should be closed within 6 months
after the date on which the contracting officer receives evidence of
physical completion.
(3) Files for contracts requiring settlement of indirect cost rates
should be closed within 36 months of the month in which the contracting
officer receives evidence of physical completion.
(4) Files for all other contracts should be closed within 20 months
of the month in which the contracting officer receives evidence of
physical completion.
(b) When closing out the contract files at 4.804-1(a)(2), (3), and
(4), the
[[Page 99]]
contracting officer shall use the closeout procedures at 4.804-5.
However, these closeout actions may be modified to reflect the extent of
administration that has been performed. Quick closeout procedures (see
42.708) should be used, when appropriate, to reduce administrative costs
and to enable deobligation of excess funds.
(c) A contract file shall not be closed if--
(1) The contract is in litigation or under appeal; or
(2) In the case of a termination, all termination actions have not
been completed.
[48 FR 42113, Sept. 19, 1983, as amended at 54 FR 34752, Aug. 21, 1989;
60 FR 34746, July 3, 1995; 84 FR 19841, May 6, 2019]
4.804-2 Closeout of the contracting office files if another office
administers the contract.
(a) Contract files for contracts using simplified acquisition
procedures should be considered closed when the contracting officer
receives evidence of receipt of property and final payment, unless
otherwise specified by agency regulation.
(b) All other contract files shall be closed as soon as practicable
after the contracting officer receives a contract completion statement
from the contract administration office. The contracting officer shall
ensure that all contractual actions required have been completed and
shall prepare a statement to that effect. This statement is authority to
close the contract file and shall be made a part of the official
contract file.
[48 FR 42113, Sept. 19, 1983, as amended at 60 FR 34746, July 3, 1995]
4.804-3 Closeout of paying office contract files.
The paying office shall close the contract file upon issuance of the
final payment voucher.