[Federal Register Volume 62, Number 236 (Tuesday, December 9, 1997)]
[Rules and Regulations]
[Pages 64916-64929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31817]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 6, 8, 12, 13, 16, 19, 32, 41, 43, 49, 52, and 53

[FAC 97-03; FAR Case 94-772; Item IV]
RIN 9000-AH24


Federal Acquisition Regulation; Reorganization of FAR Part 13, 
Simplified Acquisition Procedures

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on a final rule amending 
the Federal Acquisition Regulation (FAR) to reorganize part 13 for 
clarity and to make other changes to facilitate the use of electronic 
commerce in Government contracting. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993. This is not a major rule under 5 
U.S.C. 804.

EFFECTIVE DATE: February 9, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Paul Linfield, Procurement Analyst, at (202) 501-
1757. Please cite FAC 97-03, FAR case 94-772.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule revises FAR part 13 to reorganize its contents in a 
more process-oriented manner and to emphasize the use of electronic 
contracting and the Governmentwide commercial purchase card. FAR part 
52 is amended to permit agency provisions and clauses to be 
incorporated by reference in solicitations and contracts, if the full 
text of the provisions and clauses may be accessed electronically by 
prospective contractors. A new clause is added at FAR 52.213-4 for use 
in simplified acquisitions; the clause is a compilation of the required 
and most commonly used clauses that apply to simplified acquisitions, 
and may be used in lieu of individual clauses prescribed in the FAR.

[[Page 64917]]

    This effort was initiated as a result of public comments received 
during the comment period on FAR case 94-770, published in the Federal 
Register as an interim rule on July 3, 1995 (60 FR 34741). A proposed 
rule was published in the Federal Register on September 13, 1996 (61 FR 
48532).
    Thirteen public comments were received in response to the proposed 
rule. All comments were considered in the development of the final 
rule.

B. Regulatory Flexibility Act

    A Final Regulatory Flexibility Analysis has been performed. A copy 
of the analysis may be obtained from the FAR Secretariat. The analysis 
is summarized as follows:

    This rule amends the Federal Acquisition Regulation (FAR) by 
reorganizing the structure and material of part 13 in a manner that 
would be clear to those individuals that are newly authorized to 
make micro-purchases. The Federal Acquisition Streamlining Act of 
1994 (FASA) (Pub. L. 103-355) authorized individuals other than 
contracting officers to make purchases under $2,500 (micro-
purchases). Also, the rule takes into account the anticipated impact 
on the workload of agency procurement personnel of evaluating the 
many sources that may respond electronically to contract actions 
that are initiated with widespread electronic public notice. Changes 
made by the rule will better enable agencies to capture the benefits 
of using electronic commerce in these situations. There were no 
public comments received in response to the initial regulatory 
flexibility analysis. Changes in FAR part 52 may affect a 
significant number of small entities that participate in Federal 
agency procurements. The provisions and clauses in this FAR part 
generally are not required for micro-purchases. It is estimated that 
40 percent of the contract actions below $25,000 are micro-
purchases. Approximately 50 percent of all contract actions of 
$100,000 or less are annually awarded to small business concerns. 
The rule will impose no new reporting, recordkeeping, or other 
compliance requirements on large or small entities. The changes to 
part 52 may have more impact on small business concerns than large 
business concerns because these changes make it more imperative that 
small business concerns have electronic capability to receive and 
transmit procurement information. This rule authorizes the 
incorporation by reference of any provision or clause used by an 
agency contracting activity, provided that provision or clause was 
accessible electronically to an offeror or prospective contractor. 
The changes in part 52 should also result in a reduction in the 
number of pages that a prospective contractor will have to submit 
with its offer to the Government. An alternative that was considered 
was making solicitation provisions and clauses available to 
prospective contractors at the time they registered with the Central 
Contractor Registration (CCR). In order to conduct electronic 
commerce with any agency of the Federal Government, a potential 
contractor must register with the CCR. However, providing provisions 
and clauses at the time of registration with the CCR does not appear 
to be practical, since the prospective contractor would not have any 
assurance that the provisions and clauses were current at the time 
it wanted to participate in an agency procurement.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 4, 6, 8, 12, 13, 16, 19, 32, 41, 43, 
49, 52, and 53

    Government procurement.

    Dated: December 1, 1997.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR parts 4, 6, 8, 12, 13, 16, 19, 32, 41, 43, 49, 
52, and 53 are amended as set forth below:
    1. The authority citation for 48 CFR parts 4, 6, 8, 12, 13, 6, 19, 
32, 41, 43, 49, 52, and 53 continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 4--ADMINISTRATIVE MATTERS


4.800  [Amended]

    2. Section 4.800 is amended to revise the reference in the 
parenthetical to read ``13.106-3(b)''.

PART 6--COMPETITION REQUIREMENTS


6.001  [Amended]

    3. Section 6.001 is amended in paragraph (a) by revising the 
references ``13.602'' and ``subpart 13.6'' to read ``13.501'' and 
``subpart 13.5'', respectively.

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES


8.404  [Amended]

    4. Section 8.404 is amended in the first sentence of paragraph 
(b)(4) by revising the parenthetical to read ``(see 13.303-2(c)(3))''.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    5. Section 12.102 is amended by revising paragraphs (d)(2) and 
(d)(3) to read as follows:


12.102  Applicability.

* * * * *
    (d) * * *
    (2) Using the Standard Form 44 (see 13.306);
    (3) Using the imprest fund (see 13.305); or
* * * * *


12.203  [Amended]

    6. Section 12.203 is amended in the last sentence of the 
undesignated paragraph by revising the reference ``subpart 13.6'' to 
read ``subpart 13.5''.


12.206, 12.301, and 12.602  [Amended]

    7. In the following sections, remove ``13.106-2'' and insert 
``13.106'': 12.206, 12.301(c)(2), 12.602(a), and 12.602(b).
    8. Part 13 is revised to read as follows:

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

13.000  Scope of part.
13.001  Definitions.
13.002  Purpose.
13.003  Policy.
13.004  Legal effect of quotations.
13.005  Federal Acquisition Streamlining Act of 1994 list of 
inapplicable laws.
13.006  Inapplicable provisions and clauses.

Subpart 13.1--Procedures

13.101  General.
13.102  Source list.
13.103  Use of standing price quotations.
13.104  Promoting competition.
13.105  Synopsis and posting requirements.
13.106  Soliciting competition, evaluation of quotations or offers, 
award and documentation.
13.106-1  Soliciting competition.
13.106-2  Evaluation of quotations or offers.
13.106-3  Award and documentation.

Subpart 13.2--Actions at or Below the Micro-Purchase Threshold

13.201  General.
13.202  Purchase guidelines.

Subpart 13.3--Simplified Acquisition Methods

13.301  Governmentwide commercial purchase card.
13.302  Purchase orders.
13.302-1  General.
13.302-2  Unpriced purchase orders.
13.302-3  Obtaining contractor acceptance and modifying purchase 
orders.
13.302-4  Termination or cancellation of purchase orders.
13.302-5  Clauses.
13.303  Blanket purchase agreements (BPAs).
13.303-1  General.
13.303-2  Establishment of BPAs.
13.303-3  Preparation of BPAs.
13.303-4  Clauses.
13.303-5  Purchases under BPAs.
13.303-6  Review procedures.
13.303-7  Completion of BPAs.
13.303-8  Optional clause.
13.304  [Reserved]
13.305  Imprest funds and third party drafts.

[[Page 64918]]

13.305-1  General.
13.305-2  Agency responsibilities.
13.305-3  Conditions for use.
13.305-4  Procedures.
13.306   SF 44, Purchase Order--Invoice--Voucher.
13.307  Forms.

Subpart 13.4--Fast Payment Procedure

13.401  General.
13.402  Conditions for use.
13.403  Preparation and execution of orders.
13.404  Contract clause.

Subpart 13.5--Test Program for Certain Commercial Items

13.500  General.
13.501  Special documentation requirements.


13.000  Scope of part.

    This part prescribes policies and procedures for the acquisition of 
supplies and services, including construction, research and 
development, and commercial items, the aggregate amount of which does 
not exceed the simplified acquisition threshold (see 2.101). Subpart 
13.5 provides special authority for acquisitions of commercial items 
exceeding the simplified acquisition threshold but not exceeding 
$5,000,000, including options. See part 12 for policies applicable to 
the acquisition of commercial items exceeding the micro-purchase 
threshold. See 36.602-5 for simplified procedures to be used when 
acquiring architect-engineer services.


13.001  Definitions.

    As used in this part--
    Authorized individual means a person who has been granted 
authority, in accordance with agency procedures, to acquire supplies 
and services in accordance with this part.
    Governmentwide commercial purchase card means a purchase card, 
similar in nature to a commercial credit card, issued to authorized 
agency personnel to use to acquire and to pay for supplies and 
services.
    Imprest fund means a cash fund of a fixed amount established by an 
advance of funds, without charge to an appropriation, from an agency 
finance or disbursing officer to a duly appointed cashier, for 
disbursement as needed from time to time in making payment in cash for 
relatively small amounts.
    Purchase order 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.
    Third party draft means an agency bank draft, similar to a check, 
that is used to acquire and to pay for supplies and services. (See 
Treasury Financial Management Manual, Section 3040.70.)


13.002  Purpose.

    The purpose of this part is to prescribe simplified acquisition 
procedures in order to--
    (a) Reduce administrative costs;
    (b) Improve opportunities for small, small disadvantaged, and 
women-owned small business concerns to obtain a fair proportion of 
Government contracts;
    (c) Promote efficiency and economy in contracting; and
    (d) Avoid unnecessary burdens for agencies and contractors.


13.003  Policy.

    (a) Agencies shall use simplified acquisition procedures to the 
maximum extent practicable for all purchases of supplies or services 
not exceeding the simplified acquisition threshold (including purchases 
at or below the micro-purchase threshold). This policy does not apply 
if an agency can meet its requirement using--
    (1) Required sources of supply under part 8 (e.g., Federal Prison 
Industries, Committee for Purchase from People Who are Blind or 
Severely Disabled, and Federal Supply Schedule contracts);
    (2) Existing indefinite delivery/indefinite quantity contracts; or
    (3) Other established contracts.
    (b)(1) Each acquisition of supplies or services that has an 
anticipated dollar value exceeding $2,500 and not exceeding $100,000 is 
reserved exclusively for small business concerns and shall be set aside 
(see 19.000 and subpart 19.5). See 19.502-2 for exceptions.
    (2) Each written solicitation under a set-aside shall contain the 
appropriate provisions prescribed by part 19. If the solicitation is 
oral, however, information substantially identical to that in the 
provision shall be given to potential quoters.
    (c) The contracting office shall use simplified acquisition 
procedures for contract actions exceeding $50,000 after December 31, 
1999, only if the office's cognizant agency has certified full FACNET 
capability in accordance with 4.505-2. This limitation does not apply 
to acquisitions of commercial items conducted using subpart 13.5.
    (d) The contracting officer shall not use simplified acquisition 
procedures to acquire supplies and services if the anticipated award 
will exceed the simplified acquisition threshold (or $5,000,000, 
including options, for acquisitions of commercial items using Subpart 
13.5). Do not break down requirements aggregating more than the 
simplified acquisition threshold (or for commercial items, the 
threshold in subpart 13.5) or the micro-purchase threshold into several 
purchases that are less than the applicable threshold merely to--
    (1) Permit use of simplified acquisition procedures; or
    (2) Avoid any requirement that applies to purchases exceeding the 
micro-purchase threshold.
    (e) An agency that has specific statutory authority to acquire 
personal services (see 37.104) may use simplified acquisition 
procedures to acquire those services.
    (f) Agencies shall use the Governmentwide commercial purchase card 
and electronic purchasing techniques to the maximum extent practicable 
in conducting simplified acquisitions.
    (g) For contract actions exceeding the micro-purchase threshold but 
not exceeding the simplified acquisition threshold, agencies shall 
maximize the use of FACNET, when practicable and cost-effective (see 
4.506), to acquire supplies and services (including construction, 
research and development, and architect-engineer). FACNET also may be 
used for contract actions exceeding the simplified acquisition 
threshold. Drawings and lengthy specifications can be provided off-line 
in hard copy or through other appropriate means.
    (h) Authorized individuals shall make purchases in the simplified 
manner that is most suitable, efficient, and economical based on the 
circumstances of each acquisition. For acquisitions not expected to 
exceed--
    (1) The simplified acquisition threshold for other than commercial 
items, use any appropriate combination of the procedures in parts 13, 
14, 15, 35, or 36, including the use of Standard Form 1442, 
Solicitation, Offer, and Award (Construction, Alteration, or Repair), 
for construction contracts (see 36.701(b)); or
    (2) $5 million for commercial items, use any appropriate 
combination of the procedures in parts 12, 13, 14, and 15 (see 
paragraph (d) of this section).
    (i) In addition to other considerations, contracting officers 
shall--
    (1) Promote competition to the maximum extent practicable (see 
13.104);
    (2) Establish deadlines for the submission of responses to 
solicitations that afford suppliers a reasonable opportunity to respond 
(see 5.203);
    (3) Consider all quotations or offers that are timely received. For 
evaluation of quotations or offers conducted

[[Page 64919]]

through FACNET, see 13.106-2(b)(3); and
    (4) Use innovative approaches, to the maximum extent practicable, 
in awarding contracts using simplified acquisition procedures.


13.004  Legal effect of quotations.

    (a) A quotation is not an offer and, consequently, cannot be 
accepted by the Government to form a binding contract. Therefore, 
issuance by the Government of an order in response to a supplier's 
quotation does not establish a contract. The order is an offer by the 
Government to the supplier to buy certain supplies or services upon 
specified terms and conditions. A contract is established when the 
supplier accepts the offer.
    (b) When appropriate, the contracting officer may ask the supplier 
to indicate acceptance of an order by notification to the Government, 
preferably in writing, as defined at 2.101. In other circumstances, the 
supplier may indicate acceptance by furnishing the supplies or services 
ordered or by proceeding with the work to the point where substantial 
performance has occurred.
    (c) If the Government issues an order resulting from a quotation, 
the Government may (by written notice to the supplier, at any time 
before acceptance occurs) withdraw, amend, or cancel its offer. (See 
13.302-4 for procedures on termination or cancellation of purchase 
orders.)


13.005  Federal Acquisition Streamlining Act of 1994 list of 
inapplicable laws.

    (a) The following laws are inapplicable to all contracts and 
subcontracts (if otherwise applicable to subcontracts) at or below the 
simplified acquisition threshold:
    (1) 41 U.S.C. 57(a) and (b) (Anti-Kickback Act of 1986). (Only the 
requirement for the incorporation of the contractor procedures for the 
prevention and detection of violations, and the contractual requirement 
for contractor cooperation in investigations are inapplicable.).
    (2) 40 U.S.C. 270a (Miller Act). (Although the Miller Act does not 
apply to contracts at or below the simplified acquisition threshold, 
alternative forms of payment protection for suppliers of labor and 
material (see 28.102) are still required if the contract exceeds 
$25,000.).
    (3) 40 U.S.C. 327--333 (Contract Work Hours and Safety Standards 
Act--Overtime Compensation).
    (4) 41 U.S.C. 701(a)(1) (Section 5152 of the Drug-Free Workplace 
Act of 1988), except for individuals.
    (5) 42 U.S.C. 6962 (Solid Waste Disposal Act). (Only the 
requirement for providing the estimate of recovered material utilized 
in the performance of the contract is inapplicable.)
    (6) 10 U.S.C. 2306(b) and 41 U.S.C. 254(a) (Contract Clause 
Regarding Contingent Fees).
    (7) 10 U.S.C. 2313 and 41 U.S.C. 254(c) (Authority to Examine Books 
and Records of Contractors).
    (8) 10 U.S.C. 2402 and 41 U.S.C. 253g (Prohibition on Limiting 
Subcontractor Direct Sales to the United States).
    (b) The Federal Acquisition Regulatory (FAR) Council will include 
any law enacted after October 13, 1994, that sets forth policies, 
procedures, requirements, or restrictions for the acquisition of 
property or services, on the list set forth in paragraph (a) of this 
section. The FAR Council may make exceptions when it determines in 
writing that it is in the best interest of the Government that the 
enactment should apply to contracts or subcontracts not greater than 
the simplified acquisition threshold.
    (c) The provisions of paragraph (b) of this section do not apply to 
laws that--
    (1) Provide for criminal or civil penalties; or
    (2) Specifically state that notwithstanding the language of Section 
4101, Public Law 103-355, the enactment will be applicable to contracts 
or subcontracts in amounts not greater than the simplified acquisition 
threshold.
    (d) Any individual may petition the Administrator, Office of 
Federal Procurement Policy (OFPP), to include any applicable provision 
of law not included on the list set forth in paragraph (a) of this 
section unless the FAR Council has already determined in writing that 
the law is applicable. The Administrator, OFPP, will include the law on 
the list in paragraph (a) of this section unless the FAR Council makes 
a determination that it is applicable within 60 days of receiving the 
petition.


13.006  Inapplicable provisions and clauses.

    While certain statutes still apply, pursuant to Public Law 103-355, 
the following provisions and clauses are inapplicable to contracts and 
subcontracts at or below the simplified acquisition threshold:
    (a) 52.203-5, Covenant Against Contingent Fees.
    (b) 52.203-6, Restrictions on Subcontractor Sales to the
    Government.
    (c) 52.203-7, Anti-Kickback Procedures.
    (d) 52.215-2, Audits and Records--Negotiation.
    (e) 52.222-4, Contract Work Hours and Safety Standards Act--
Overtime Compensation.
    (f) 52.223-6, Drug-Free Workplace, except for individuals.
    (g) 52.223-9, Certification and Estimate of Percentage of Recovered 
Material Content for EPA Designated Items.

Subpart 13.1--Procedures


13.101  General.

    (a) In making purchases, contracting officers shall--
    (1) Comply with the policy in 7.202 relating to economic purchase 
quantities, when practicable;
    (2) Satisfy the procedures described in subpart 19.6 with respect 
to Certificates of Competency before rejecting a quotation, oral or 
written, from a small business concern determined to be nonresponsible 
(see subpart 9.1);
    (3) Use United States-owned excess or near-excess foreign currency, 
if appropriate, in making payments under simplified acquisition 
procedures (see subpart 25.3); and
    (4) Provide for the inspection of supplies or services as 
prescribed in 46.404.
    (b) In making purchases, contracting officers should--
    (1) Include related items (such as small hardware items or spare 
parts for vehicles) in one solicitation and make award on an ``all-or-
none'' or ``multiple award'' basis provided suppliers are so advised 
when quotations or offers are requested;
    (2) Incorporate provisions and clauses by reference in 
solicitations and in awards under requests for quotations, provided the 
requirements in 52.102 are satisfied;
    (3) Make maximum effort to obtain trade and prompt payment 
discounts (see 14.408-3). Prompt payment discounts shall not be 
considered in the evaluation of quotations; and
    (4) Use bulk funding to the maximum extent practicable. Bulk 
funding is a system whereby the contracting officer receives 
authorization from a fiscal and accounting officer to obligate funds on 
purchase documents against a specified lump sum of funds reserved for 
the purpose for a specified period of time rather than obtaining 
individual obligational authority on each purchase document. Bulk 
funding is particularly appropriate if numerous purchases using the 
same type of funds are to be made during a given period.


13.102  Source list.

    (a) Each contracting office should maintain a source list (or 
lists, if more

[[Page 64920]]

convenient). New supply sources for the list may be obtained from a 
variety of sources, including the Procurement Automated Source System 
(PASS) of the Small Business Administration and the Central Contractor 
Registration (CCR) Data Base (see 4.503). The list should identify the 
status of each source (when the status is made known to the contracting 
office) in the following categories:
    (1) Small business.
    (2) Small disadvantaged business.
    (3) Women-owned small business.
    (b) The status information may be used as the basis to ensure that 
small business concerns are provided the maximum practicable 
opportunities to respond to solicitations issued using simplified 
acquisition procedures.


13.103  Use of standing price quotations.

    Authorized individuals do not have to obtain individual quotations 
for each purchase. Standing price quotations may be used if--
    (a) The pricing information is current; and
    (b) The Government obtains the benefit of maximum discounts before 
award.


13.104  Promoting competition.

    The contracting officer shall promote competition to the maximum 
extent practicable to obtain supplies and services from the source 
whose offer is the most advantageous to the Government, considering the 
administrative cost of the purchase.
    (a) The contracting officer shall not--
    (1) Solicit quotations based on personal preference; or
    (2) Restrict solicitation to suppliers of well-known and widely 
distributed makes or brands.
    (b) If using simplified acquisition procedures and not using 
FACNET, maximum practicable competition ordinarily can be obtained by 
soliciting quotations or offers from sources within the local trade 
area. Unless the contract action requires synopsis pursuant to 5.101 
and an exception under 5.202 is not applicable, consider solicitation 
of at least three sources to promote competition to the maximum extent 
practicable. Whenever practicable, request quotations or offers from 
two sources not included in the previous solicitation.


13.105  Synopsis and posting requirements.

    (a) The contracting officer shall comply with the public display 
and synopsis requirements of 5.101 and 5.203 unless--
    (1) FACNET is used for an acquisition at or below the simplified 
acquisition threshold; or
    (2) An exception in 5.202 applies.
    (b) When acquiring commercial items, the contracting officer may 
use a combined synopsis/solicitation. In such cases, a separate 
solicitation is not required. The contracting officer must include 
enough information to permit suppliers to develop quotations or offers.


13.106  Soliciting competition, evaluation of quotations or offers, 
award and documentation.


13.106-1  Soliciting competition.

    (a) Considerations. In soliciting competition, the contracting 
officer shall consider the guidance in 13.104 and the following before 
requesting quotations or offers:
    (1)(i) The nature of the article or service to be purchased and 
whether it is highly competitive and readily available in several makes 
or brands, or is relatively noncompetitive.
    (ii) Information obtained in making recent purchases of the same or 
similar item.
    (iii) The urgency of the proposed purchase.
    (iv) The dollar value of the proposed purchase.
    (v) Past experience concerning specific dealers' prices.
    (2) When soliciting quotations or offers, the contracting officer 
shall notify potential quoters or offerors of the basis on which award 
will be made (price alone or price and other factors, e.g., past 
performance and quality). Contracting officers are encouraged to use 
best value. Solicitations are not required to state the relative 
importance assigned to each evaluation factor and subfactor, nor are 
they required to include subfactors.
    (b) Soliciting from a single source. (1) For purchases not 
exceeding the simplified acquisition threshold, contracting officers 
may solicit from one source if the contracting officer determines that 
the circumstances of the contract action deem only one source 
reasonably available (e.g., urgency, exclusive licensing agreements, or 
industrial mobilization).
    (2) For sole source acquisitions of commercial items in excess of 
the simplified acquisition threshold conducted pursuant to subpart 
13.5, the requirements at 13.501(a) apply.
    (c) Soliciting orally. (1) The contracting officer shall solicit 
quotations orally to the maximum extent practicable, if--
    (i) The acquisition does not exceed the simplified acquisition 
threshold;
    (ii) FACNET is not available or the contracting office has a 
written determination that it is not practicable or cost-effective to 
purchase via FACNET (see 4.506); and
    (iii) Notice is not required under 5.101.
    (2) However, an oral solicitation may not be practicable for 
contract actions exceeding $25,000 unless covered by an exception in 
5.202.
    (d) Written solicitations. If obtaining electronic or oral 
quotations is uneconomical or impracticable, the contracting officer 
should issue paper solicitations for contract actions likely to exceed 
$25,000. The contracting officer shall issue a written solicitation for 
construction requirements exceeding $2,000.
    (e) Use of options. Options may be included in solicitations, 
provided the requirements of subpart 17.2 are met and the aggregate 
value of the acquisition and all options does not exceed the dollar 
threshold for use of simplified acquisition procedures.
    (f) Inquiries. An agency should respond to inquiries received 
through any medium (including FACNET) if doing so would not interfere 
with the efficient conduct of the acquisition. For an acquisition 
conducted through FACNET, an agency must respond to telephonic or 
facsimile inquiries only if it is unable to receive inquiries through 
FACNET.


13.106-2  Evaluation of quotations or offers.

    (a) General. (1) The contracting officer shall evaluate quotations 
or offers--
    (i) In an impartial manner; and
    (ii) Inclusive of transportation charges from the shipping point of 
the supplier to the delivery destination.
    (2) Quotations or offers shall be evaluated on the basis 
established in the solicitation.
    (3) All quotations or offers shall be considered (see paragraph (b) 
of this subsection).
    (b) Evaluation procedures. (1) The contracting officer has broad 
discretion in fashioning suitable evaluation procedures. The procedures 
prescribed in parts 14 and 15 are not mandatory. At the contracting 
officer's discretion, one or more, but not necessarily all, of the 
evaluation procedures in part 14 or 15 may be used.
    (2) If using price and other factors, ensure that quotations or 
offers can be evaluated in an efficient and minimally burdensome 
fashion. Formal evaluation plans and establishing a competitive range, 
conducting discussions, and scoring quotations or offers are not 
required. Contracting offices may

[[Page 64921]]

conduct comparative evaluations of offers. Evaluation of other factors, 
such as past performance--
    (i) Does not require the creation or existence of a formal data 
base; and
    (ii) May be based on information such as the contracting officer's 
knowledge of and previous experience with the supply or service being 
acquired, customer surveys, or other reasonable basis.
    (3) For acquisitions conducted using FACNET, the contracting 
officer may--
    (i) After preliminary consideration of all quotations or offers, 
identify from all quotations or offers received one that is suitable to 
the user, such as the lowest priced brand name product, and quickly 
screen all lower priced quotations or offers based on readily 
discernible value indicators, such as past performance, warranty 
conditions, and maintenance availability; or
    (ii) Where an evaluation is based only on price and past 
performance, make an award based on whether the lowest priced of the 
quotations or offers having the highest past performance rating 
possible represents the best value when compared to any lower priced 
quotation or offer.


13.106-3  Award and documentation.

    (a) Basis for award. Before making award, the contracting officer 
shall determine that the proposed price is fair and reasonable.
    (1) Whenever possible, base price reasonableness on competitive 
quotations or offers.
    (2) If only one response is received, include a statement of price 
reasonableness in the contract file. The statement may be based on--
    (i) Market research;
    (ii) Comparison of the proposed price with prices found reasonable 
on previous purchases;
    (iii) Current price lists, catalogs, or advertisements;
    (iv) A comparison with similar items in a related industry;
    (v) Value analysis;
    (vi) The contracting officer's personal knowledge of the item being 
purchased;
    (vii) Comparison to an independent Government estimate; or
    (viii) Any other reasonable basis.
    (3) Occasionally an item can be obtained only from a supplier that 
quotes a minimum order price or quantity that either unreasonably 
exceeds stated quantity requirements or results in an unreasonable 
price for the quantity required. In these instances, the contracting 
officer should inform the requiring activity of all facts regarding the 
quotation or offer and ask it to confirm or alter its requirement. The 
file shall be documented to support the final action taken.
    (b) File documentation and retention. Keep documentation to a 
minimum. Purchasing offices shall retain data supporting purchases 
(paper or electronic) to the minimum extent and duration necessary for 
management review purposes (see subpart 4.8). The following illustrate 
the extent to which quotation or offer information should be recorded:
    (1) Oral solicitations. The contracting office should establish and 
maintain records of oral price quotations in order to reflect clearly 
the propriety of placing the order at the price paid with the supplier 
concerned. In most cases, this will consist merely of showing the names 
of the suppliers contacted and the prices and other terms and 
conditions quoted by each.
    (2) Written solicitations (see 2.101). For acquisitions not 
exceeding the simplified acquisition threshold, limit written records 
of solicitations or offers to notes or abstracts to show prices, 
delivery, references to printed price lists used, the supplier or 
suppliers contacted, and other pertinent data.
    (3) Special situations. Include additional statements--
    (i) Explaining the absence of competition if only one source is 
solicited and the acquisition does not exceed the simplified 
acquisition threshold (does not apply to an acquisition of utility 
services available from only one source); or
    (ii) Supporting the award decision if other than price-related 
factors were considered in selecting the supplier.
    (c) Notification. For acquisitions that do not exceed the 
simplified acquisition threshold and for which automatic notification 
is not provided through FACNET, notification to unsuccessful suppliers 
shall be given only if requested or required by 5.301.
    (d) Request for information. If a supplier requests information on 
an award that was based on factors other than price alone, a brief 
explanation of the basis for the contract award decision shall be 
provided (see 15.503(b)(2)).

Subpart 13.2--Actions at or Below the Micro-Purchase Threshold


13.201  General.

    (a) Agency heads are encouraged to delegate micro-purchase 
authority (see 1.603-3).
    (b) The Governmentwide commercial purchase card shall be the 
preferred method to purchase and to pay for micro-purchases (see 
2.101).
    (c) Purchases at or below the micro-purchase threshold may be 
conducted using any of the methods described in subpart 13.3, provided 
the purchaser is authorized and trained, pursuant to agency procedures, 
to use those methods.
    (d) Micro-purchases do not require provisions or clauses, except as 
provided at 32.1103. This paragraph takes precedence over any other FAR 
requirement to the contrary, but does not prohibit the use of any 
clause.
    (e) The requirements in part 8 apply to purchases at or below the 
micro-purchase threshold.


13.202  Purchase guidelines.

    (a) Solicitation, evaluation of quotations, and award. (1) To the 
extent practicable, micro-purchases shall be distributed equitably 
among qualified suppliers.
    (2) Micro-purchases may be awarded without soliciting competitive 
quotations if the contracting officer or individual appointed in 
accordance with 1.603-3(b) considers the price to be reasonable.
    (3) The administrative cost of verifying the reasonableness of the 
price for purchases may more than offset potential savings from 
detecting instances of overpricing. Therefore, action to verify price 
reasonableness need only be taken if--
    (i) The contracting officer or individual appointed in accordance 
with 1.603-3(b) suspects or has information to indicate that the price 
may not be reasonable (e.g., comparison to the previous price paid or 
personal knowledge of the supply or service); or
    (ii) Purchasing a supply or service for which no comparable pricing 
information is readily available (e.g., a supply or service that is not 
the same as, or is not similar to, other supplies or services that have 
recently been purchased on a competitive basis).
    (b) Documentation. If competitive quotations were solicited and 
award was made to other than the low quoter, documentation to support 
the purchase may be limited to identification of the solicited concerns 
and an explanation for the award decision.

Subpart 13.3--Simplified Acquisition Methods


13.301  Governmentwide commercial purchase card.

    (a) The Governmentwide commercial purchase card is authorized for 
use in making and/or paying for purchases of supplies, services, or 
construction. The Governmentwide commercial purchase card may be used 
by contracting officers and other individuals designated in accordance 
with 1.603-3. The card may

[[Page 64922]]

be used only for purchases that are otherwise authorized by law or 
regulation.
    (b) Agencies using the Governmentwide commercial purchase card 
shall establish procedures for use and control of the card that comply 
with the Treasury Financial Manual for Guidance of Departments and 
Agencies (TFM 4-4500) and that are consistent with the terms and 
conditions of the GSA Federal Supply Service Contract Guide for 
Governmentwide Commercial Purchase Card Service. Agency procedures 
should not limit the use of the Governmentwide commercial purchase card 
to micro-purchases. Agency procedures should encourage use of the card 
in greater dollar amounts by contracting officers to place orders and 
to pay for purchases against contracts established under part 8 
procedures, when authorized; and to place orders and/or make payment 
under other contractual instruments, when agreed to by the contractor.
    (c) The Governmentwide commercial purchase card may be used to--
    (1) Make micro-purchases;
    (2) Place a task or delivery order (if authorized in the basic 
contract, basic ordering agreement, or blanket purchase agreement); or
    (3) Make payments, when the contractor agrees to accept payment by 
the card.


13.302  Purchase orders.


13.302-1  General.

    (a) Except as provided under the unpriced purchase order method 
(see 13.302-2), purchase orders generally are issued on a fixed-price 
basis. See 12.207 for acquisition of commercial items.
    (b) Purchase orders shall--
    (1) Specify the quantity of supplies or scope of services ordered;
    (2) Contain a determinable date by which delivery of the supplies 
or performance of the services is required;
    (3) Provide for inspection as prescribed in part 46. Generally, 
inspection and acceptance should be at destination. Source inspection 
should be specified only if required by part 46. When inspection and 
acceptance will be performed at destination, advance copies of the 
purchase order or equivalent notice shall be furnished to the 
consignee(s) for material receipt purposes. Receiving reports shall be 
accomplished immediately upon receipt and acceptance of supplies;
    (4) Specify f.o.b. destination for supplies to be delivered within 
the United States, except Alaska or Hawaii, unless there are valid 
reasons to the contrary; and
    (5) Include any trade and prompt payment discounts that are 
offered, consistent with the applicable principles at 14.408-3.
    (c) The contracting officer's signature on purchase orders shall be 
in accordance with 4.101 and the definitions at 2.101. Facsimile and 
electronic signature may be used in the production of purchase orders 
by automated methods.
    (d) Limit the distribution of copies of purchase orders and related 
forms to the minimum deemed essential for administration and 
transmission of contractual information.
    (e) In accordance with 31 U.S.C. 3332, electronic funds transfer 
(EFT) may be required for payments. See 32.1103 for instructions for 
use of the appropriate clause in purchase orders. When obtaining verbal 
quotes, the contracting officer shall inform the quoter of the EFT 
clause that will be in any resulting purchase order. Contracting 
officers shall not accept EFT payment data. The contractor shall 
provide all such data directly to the payment office.


13.302-2  Unpriced purchase orders.

    (a) An unpriced purchase order is an order for supplies or 
services, the price of which is not established at the time of issuance 
of the order.
    (b) An unpriced purchase order may be used only when--
    (1) It is impractical to obtain pricing in advance of issuance of 
the purchase order; and
    (2) The purchase is for--
    (i) Repairs to equipment requiring disassembly to determine the 
nature and extent of repairs;
    (ii) Material available from only one source and for which cost 
cannot readily be established; or
    (iii) Supplies or services for which prices are known to be 
competitive, but exact prices are not known (e.g., miscellaneous repair 
parts, maintenance agreements).
    (c) Unpriced purchase orders may be issued on paper or 
electronically. A realistic monetary limitation, either for each line 
item or for the total order, shall be placed on each unpriced purchase 
order. The monetary limitation shall be an obligation subject to 
adjustment when the firm price is established. The contracting office 
shall follow up on each order to ensure timely pricing. The contracting 
officer or the contracting officer's designated representative shall 
review the invoice price and, if reasonable (see 13.106-3(a)), process 
the invoice for payment.


13.302-3  Obtaining contractor acceptance and modifying purchase 
orders.

    (a) When it is desired to consummate a binding contract between the 
parties before the contractor undertakes performance, the contracting 
officer shall require written (see 2.101) acceptance of the purchase 
order by the contractor.
    (b) Each purchase order modification shall identify the order it 
modifies and shall contain an appropriate modification number.
    (c) A contractor's written acceptance of a purchase order 
modification may be required only if--
    (1) Determined by the contracting officer to be necessary to ensure 
the contractor's compliance with the purchase order as revised; or
    (2) Required by agency regulations.


13.302-4  Termination or cancellation of purchase orders.

    (a) If a purchase order that has been accepted in writing by the 
contractor is to be terminated, the contracting officer shall process 
the termination in accordance with--
    (1) 12.403(d) and 52.212-4(l) for commercial items; or
    (2) Part 49 or 52.213-4 for other than commercial items.
    (b) If a purchase order that has not been accepted in writing by 
the contractor is to be canceled, the contracting officer shall notify 
the contractor in writing that the purchase order has been canceled, 
request the contractor's written acceptance of the cancellation, and 
proceed as follows:
    (1) If the contractor accepts the cancellation and does not claim 
that costs were incurred as a result of beginning performance under the 
purchase order, no further action is required (i.e., the purchase order 
shall be considered canceled).
    (2) If the contractor does not accept the cancellation or claims 
that costs were incurred as a result of beginning performance under the 
purchase order, the contracting officer shall process the termination 
action as prescribed in paragraph (a) of this subsection.


13.302-5  Clauses.

    (a) Each purchase order (and each purchase order modification (see 
13.302-3)) shall incorporate all clauses prescribed for the particular 
acquisition.
    (b) The contracting officer shall insert the clause at 52.213-2, 
Invoices, in purchase orders that authorize advance payments (see 31 
U.S.C. 3324(d)(2)) for subscriptions or other charges for newspapers, 
magazines, periodicals, or other publications (i.e., any publication 
printed, microfilmed, photocopied, or

[[Page 64923]]

magnetically or otherwise recorded for auditory or visual usage).
    (c) The contracting officer shall insert the clause at 52.213-3, 
Notice to Supplier, in unpriced purchase orders.
    (d) The contracting officer may use the clause at 52.213-4, Terms 
and Conditions--Simplified Acquisitions (Other Than Commercial Items), 
in simplified acquisitions exceeding the micro-purchase threshold that 
are for other than commercial items (see 12.301). The clause--
    (1) Is a compilation of the most commonly used clauses that apply 
to simplified acquisitions; and
    (2) May be modified to fit the individual acquisition to add other 
needed clauses, or those clauses may be added separately. Modifications 
(i.e., additions, deletions, or substitutions) must not create a void 
or internal contradiction in the clause. For example, do not add an 
inspection and acceptance or termination for convenience requirement 
unless the existing requirement is deleted. Also, do not delete a 
paragraph without providing for an appropriate substitute.


13.303  Blanket purchase agreements (BPAs).


13.303-1  General.

    (a) A blanket purchase agreement (BPA) is a simplified method of 
filling anticipated repetitive needs for supplies or services by 
establishing ``charge accounts'' with qualified sources of supply (see 
subpart 16.7 for additional coverage of agreements).
    (b) BPAs should be established for use by an organization 
responsible for providing supplies for its own operations or for other 
offices, installations, projects, or functions. Such organizations, for 
example, may be organized supply points, separate independent or 
detached field parties, or one-person posts or activities.
    (c) The use of BPAs does not exempt an agency from the 
responsibility for keeping obligations and expenditures within 
available funds.


13.303-2  Establishment of BPAs.

    (a) The following are circumstances under which contracting 
officers may establish BPAs:
    (1) There is a wide variety of items in a broad class of supplies 
or services that are generally purchased, but the exact items, 
quantities, and delivery requirements are not known in advance and may 
vary considerably.
    (2) There is a need to provide commercial sources of supply for one 
or more offices or projects in a given area that do not have or need 
authority to purchase otherwise.
    (3) The use of this procedure would avoid the writing of numerous 
purchase orders.
    (4) There is no existing requirements contract for the same supply 
or service that the contracting activity is required to use.
    (b) After determining a BPA would be advantageous, contracting 
officers shall--
    (1) Establish the parameters to limit purchases to individual items 
or commodity groups or classes, or permit the supplier to furnish 
unlimited supplies or services; and
    (2) Consider suppliers whose past performance has shown them to be 
dependable, who offer quality supplies or services at consistently 
lower prices, and who have provided numerous purchases at or below the 
simplified acquisition threshold.
    (c) BPAs may be established with--
    (1) More than one supplier for supplies or services of the same 
type to provide maximum practicable competition;
    (2) A single firm from which numerous individual purchases at or 
below the simplified acquisition threshold will likely be made in a 
given period; or
    (3) Federal Supply Schedule contractors, if not inconsistent with 
the terms of the applicable schedule contract.
    (d) BPAs should be prepared without a purchase requisition and only 
after contacting suppliers to make the necessary arrangements for--
    (1) Securing maximum discounts;
    (2) Documenting individual purchase transactions;
    (3) Periodic billings; and
    (4) Incorporating other necessary details.


13.303-3  Preparation of BPAs.

    Prepare BPAs on the forms specified in 13.307. Do not cite 
accounting and appropriation data (see 13.303-5(e)(4)).
    (a) The following terms and conditions are mandatory:
    (1) Description of agreement. A statement that the supplier shall 
furnish supplies or services, described in general terms, if and when 
requested by the contracting officer (or the authorized representative 
of the contracting officer) during a specified period and within a 
stipulated aggregate amount, if any.
    (2) Extent of obligation. A statement that the Government is 
obligated only to the extent of authorized purchases actually made 
under the BPA.
    (3) Purchase limitation. A statement that specifies the dollar 
limitation for each individual purchase under the BPA (see 13.303-
5(b)).
    (4) Individuals authorized to purchase under the BPA. A statement 
that a list of individuals authorized to purchase under the BPA, 
identified either by title of position or by name of individual, 
organizational component, and the dollar limitation per purchase for 
each position title or individual shall be furnished to the supplier by 
the contracting officer.
    (5) Delivery tickets. A requirement that all shipments under the 
agreement, except those for newspapers, magazines, or other 
periodicals, shall be accompanied by delivery tickets or sales slips 
that shall contain the following minimum information:
    (i) Name of supplier.
    (ii) BPA number.
    (iii) Date of purchase.
    (iv) Purchase number.
    (v) Itemized list of supplies or services furnished.
    (vi) Quantity, unit price, and extension of each item, less 
applicable discounts (unit prices and extensions need not be shown when 
incompatible with the use of automated systems, provided that the 
invoice is itemized to show this information).
    (vii) Date of delivery or shipment.
    (6) Invoices. One of the following statements shall be included 
(except that the statement in paragraph (a)(6)(iii) of this subsection 
should not be used if the accumulation of the individual invoices by 
the Government materially increases the administrative costs of this 
purchase method):
    (i) A summary invoice shall be submitted at least monthly or upon 
expiration of this BPA, whichever occurs first, for all deliveries made 
during a billing period, identifying the delivery tickets covered 
therein, stating their total dollar value, and supported by receipt 
copies of the delivery tickets.
    (ii) An itemized invoice shall be submitted at least monthly or 
upon expiration of this BPA, whichever occurs first, for all deliveries 
made during a billing period and for which payment has not been 
received. These invoices need not be supported by copies of delivery 
tickets.
    (iii) When billing procedures provide for an individual invoice for 
each delivery, these invoices shall be accumulated, provided that--
    (A) A consolidated payment will be made for each specified period; 
and
    (B) The period of any discounts will commence on the final date of 
the billing period or on the date of receipt of invoices for all 
deliveries accepted during the billing period, whichever is later.
    (iv) An invoice for subscriptions or other charges for newspapers,

[[Page 64924]]

magazines, or other periodicals shall show the starting and ending 
dates and shall state either that ordered subscriptions have been 
placed in effect or will be placed in effect upon receipt of payment.
    (b) If the fast payment procedure is used, include the requirements 
stated in 13.403.


13.303-4  Clauses.

    (a) The contracting officer shall insert in each BPA the clauses 
prescribed elsewhere in this part that are required for or applicable 
to the particular BPA.
    (b) Unless a clause prescription specifies otherwise (e.g., see 
22.305(a), 22.605(a)(5), or 22.1006), if the prescription includes a 
dollar threshold, the amount to be compared to that threshold is that 
of any particular order under the BPA.


13.303-5  Purchases under BPAs.

    (a) Use a BPA only for purchases that are otherwise authorized by 
law or regulation.
    (b) Individual purchases shall not exceed the simplified 
acquisition threshold. However, agency regulations may establish a 
higher threshold consistent with the following:
    (1) The simplified acquisition threshold and the $5,000,000 
limitation for individual purchases do not apply to BPAs established in 
accordance with 13.303-2(c)(3).
    (2) The limitation for individual purchases for commercial item 
acquisitions conducted under subpart 13.5 is $5,000,000.
    (c) The existence of a BPA does not justify purchasing from only 
one source or avoiding small business set-asides. The requirements of 
13.003(b) and subpart 19.5 also apply to each order.
    (d) If, for a particular purchase greater than the micro-purchase 
threshold, there is an insufficient number of BPAs to ensure maximum 
practicable competition, the contracting officer shall--
    (1) Solicit quotations from other sources (see 13.105) and make the 
purchase as appropriate; and
    (2) Establish additional BPAs to facilitate future purchases if--
    (i) Recurring requirements for the same or similar supplies or 
services seem likely;
    (ii) Qualified sources are willing to accept BPAs; and
    (iii) It is otherwise practical to do so.
    (e) Limit documentation of purchases to essential information and 
forms as follows:
    (1) Purchases generally should be made electronically, or orally 
when it is not considered economical or practical to use electronic 
methods.
    (2) A paper purchase document may be issued if necessary to ensure 
that the supplier and the purchaser agree concerning the transaction.
    (3) Unless a paper document is issued, record essential elements 
(e.g., date, supplier, supplies or services, price, delivery date) on 
the purchase requisition, in an informal memorandum, or on a form 
developed locally for the purpose.
    (4) Cite the pertinent purchase requisitions and the accounting and 
appropriation data.
    (5) When delivery is made or the services are performed, the 
supplier's sales document, delivery document, or invoice may (if it 
reflects the essential elements) be used for the purpose of recording 
receipt and acceptance of the supplies or services. However, if the 
purchase is assigned to another activity for administration, the 
authorized Government representative shall document receipt and 
acceptance of supplies or services by signing and dating the agency 
specified form after verification and after notation of any exceptions.


13.303-6  Review procedures.

    (a) The contracting officer placing orders under a BPA, or the 
designated representative of the contracting officer, shall review a 
sufficient random sample of the BPA files at least annually to ensure 
that authorized procedures are being followed.
    (b) The contracting officer that entered into the BPA shall--
    (1) Ensure that each BPA is reviewed at least annually and, if 
necessary, updated at that time; and
    (2) Maintain awareness of changes in market conditions, sources of 
supply, and other pertinent factors that may warrant making new 
arrangements with different suppliers or modifying existing 
arrangements.
    (c) If an office other than the purchasing office that established 
a BPA is authorized to make purchases under that BPA, the agency that 
has jurisdiction over the office authorized to make the purchases shall 
ensure that the procedures in paragraph (a) of this subsection are 
being followed.


13.303-7  Completion of BPAs.

    An individual BPA is considered complete when the purchases under 
it equal its total dollar limitation, if any, or when its stated time 
period expires.


13.303-8  Optional clause.

    The clause at 52.213-4, Terms and Conditions--Simplified 
Acquisitions (Other Than Commercial Items), may be used in BPAs 
established under this section.


13.304  [Reserved]


13.305  Imprest funds and third party drafts.


13.305-1  General.

    Imprest funds and third party drafts may be used to acquire and to 
pay for supplies or services. Policies and regulations concerning the 
establishment of and accounting for imprest funds and third party 
drafts, including the responsibilities of designated cashiers and 
alternates, are contained in Part IV of the Treasury Financial Manual 
for Guidance of Departments and Agencies, Title 7 of the General 
Accounting Office Policy and Procedures Manual for Guidance of Federal 
Agencies, and the agency implementing regulations. Agencies also shall 
be guided by the Manual of Procedures and Instructions for Cashiers, 
issued by the Financial Management Service, Department of the Treasury.


13.305-2  Agency responsibilities.

    Each agency using imprest funds and third party drafts shall--
    (a) Periodically review and determine whether there is a continuing 
need for each fund or third party draft account established, and that 
amounts of those funds or accounts are not in excess of actual needs;
    (b) Take prompt action to have imprest funds or third party draft 
accounts adjusted to a level commensurate with demonstrated needs 
whenever circumstances warrant such action; and
    (c) Develop and issue appropriate implementing regulations. These 
regulations shall include (but are not limited to) procedures 
covering--
    (1) Designation of personnel authorized to make purchases using 
imprest funds or third party drafts; and
    (2) Documentation of purchases using imprest funds or third party 
drafts, including documentation of--
    (i) Receipt and acceptance of supplies and services by the 
Government;
    (ii) Receipt of cash or third party draft payments by the 
suppliers; and
    (iii) Cash advances and reimbursements.


13.305-3  Conditions for use.

    Imprest funds or third party drafts may be used for purchases 
when--
    (a) The imprest fund transaction does not exceed $500 or such other 
limits as have been approved by the agency head;
    (b) The third party draft transaction does not exceed $2,500, 
unless authorized at a higher level in accordance with Treasury 
restrictions;

[[Page 64925]]

    (c) The use of imprest funds or third party drafts is considered to 
be advantageous to the Government; and
    (d) The use of imprest funds or third party drafts for the 
transaction otherwise complies with any additional conditions 
established by agencies and with the policies and regulations 
referenced in 13.305-1.


13.305-4  Procedures.

    (a) Each purchase using imprest funds or third party drafts shall 
be based upon an authorized purchase requisition, contracting officer 
verification statement, or other agency approved method of ensuring 
that adequate funds are available for the purchase.
    (b) Normally, purchases should be placed orally and without 
soliciting competition if prices are considered reasonable.
    (c) Since there is, for all practical purposes, simultaneous 
placement of the order and delivery of the items, clauses are not 
required for purchases using imprest funds or third party drafts.
    (d) Forms prescribed at 13.307(e) may be used if a written order is 
considered necessary (e.g., if required by the supplier for discount, 
tax exemption, or other reasons). If a purchase order is used, endorse 
it ``Payment to be made from Imprest Fund'' (or ``Payment to be made 
from Third Party Draft,'' as appropriate).
    (e) The individual authorized to make purchases using imprest funds 
or third party drafts shall--
    (1) Furnish to the imprest fund or third party draft cashier a copy 
of the document required under paragraph (a) of this subsection 
annotated to reflect--
    (i) That an imprest fund or third party draft purchase has been 
made;
    (ii) The unit prices and extensions; and
    (iii) The supplier's name and address; and
    (2) Require the supplier to include with delivery of the supplies 
an invoice, packing slip, or other sales instrument giving--
    (i) The supplier's name and address;
    (ii) List and quantity of items supplied;
    (iii) Unit prices and extensions; and
    (iv) Cash discount, if any.


13.306  SF 44, Purchase Order--Invoice--Voucher.

    The SF 44, Purchase Order--Invoice--Voucher, is a multipurpose 
pocket-size purchase order form designed primarily for on-the-spot, 
over-the-counter purchases of supplies and nonpersonal services while 
away from the purchasing office or at isolated activities. It also can 
be used as a receiving report, invoice, and public voucher.
    (a) This form may be used if all of the following conditions are 
satisfied:
    (1) The amount of the purchase is at or below the micro-purchase 
threshold, except for purchases made under unusual and compelling 
urgency or in support of contingency operations. Agencies may establish 
higher dollar limitations for specific activities or items;
    (2) The supplies or services are immediately available;
    (3) One delivery and one payment will be made; and
    (4) Its use is determined to be more economical and efficient than 
use of other simplified acquisition procedures.
    (b) General procedural instructions governing the form's use are 
printed on the form and on the inside front cover of each book of 
forms.
    (c) Since there is, for all practical purposes, simultaneous 
placement of the order and delivery of the items, clauses are not 
required for purchases using this form.
    (d) Agencies shall provide adequate safeguards regarding the 
control of forms and accounting for purchases.


13.307  Forms.

    (a) Commercial items. For use of the SF 1449, Solicitation/
Contract/Order for Commercial Items, see 12.204.
    (b) Other than commercial items.
    (1) Except when quotations are solicited via FACNET, other 
electronic means, or orally, the SF 1449; SF 18, Request for 
Quotations; or an agency form/automated format may be used. Each agency 
request for quotations form/automated format should conform with the SF 
18 or SF 1449 to the maximum extent practicable.
    (2) Both SF 1449 and OF 347, Order for Supplies or Services, are 
multipurpose forms used for negotiated purchases of supplies or 
services, delivery or task orders, inspection and receiving reports, 
and invoices. An agency form/automated format also may be used.
    (c) Forms used for both commercial and other than commercial items.
     (1) OF 336, Continuation Sheet, or an agency form/automated format 
may be used when additional space is needed.
    (2) OF 348, Order for Supplies or Services Schedule--Continuation, 
or an agency form/automated format may be used for negotiated purchases 
when additional space is needed. Agencies may print on these forms the 
clauses considered to be generally suitable for purchases.
    (3) SF 30, Amendment of Solicitation/Modification of Contract, or a 
purchase order form may be used to modify a purchase order, unless an 
agency form/automated format is prescribed in agency regulations.
    (d) SF 44, Purchase Order--Invoice--Voucher, is a multipurpose 
pocket-size purchase order form that may be used as outlined in 13.306.
    (e) SF 1165, Receipt for Cash--Subvoucher, or an agency purchase 
order form may be used for purchases using imprest funds or third party 
drafts.

Subpart 13.4--Fast Payment Procedure


13.401  General.

    (a) The fast payment procedure allows payment under limited 
conditions to a contractor prior to the Government's verification that 
supplies have been received and accepted. The procedure provides for 
payment for supplies based on the contractor's submission of an invoice 
that constitutes a certification that the contractor--
    (1) Has delivered the supplies to a post office, common carrier, or 
point of first receipt by the Government; and
    (2) Shall replace, repair, or correct supplies not received at 
destination, damaged in transit, or not conforming to purchase 
agreements.
    (b) The contracting officer shall be primarily responsible for 
collecting debts resulting from failure of contractors to properly 
replace, repair, or correct supplies lost, damaged, or not conforming 
to purchase requirements (see 32.605(b) and 32.606).


13.402  Conditions for use.

    If the conditions in paragraphs (a) through (f) of this section are 
present, the fast payment procedure may be used, provided that use of 
the procedure is consistent with the other conditions of the purchase. 
The conditions for use of the fast payment procedure are as follows:
    (a) Individual purchasing instruments do not exceed $25,000, except 
that executive agencies may permit higher dollar limitations for 
specified activities or items on a case-by-case basis.
    (b) Deliveries of supplies are to occur at locations where there is 
both a geographical separation and a lack of adequate communications 
facilities between Government receiving and disbursing activities that 
will make it impractical to make timely payment based on evidence of 
Government acceptance.
    (c) Title to the supplies passes to the Government--
    (1) Upon delivery to a post office or common carrier for mailing or 
shipment to destination; or

[[Page 64926]]

    (2) Upon receipt by the Government if the shipment is by means 
other than Postal Service or common carrier.
    (d) The supplier agrees to replace, repair, or correct supplies not 
received at destination, damaged in transit, or not conforming to 
purchase requirements.
    (e) The purchasing instrument is a firm-fixed-price contract, a 
purchase order, or a delivery order for supplies.
    (f) A system is in place to ensure--
    (1) Documentation of evidence of contractor performance under fast 
payment purchases;
    (2) Timely feedback to the contracting officer in case of 
contractor deficiencies; and
    (3) Identification of suppliers that have a current history of 
abusing the fast payment procedure (also see subpart 9.1).


13.403  Preparation and execution of orders.

    Priced or unpriced contracts, purchase orders, or BPAs using the 
fast payment procedure shall include the following:
    (a) A requirement that the supplies be shipped transportation or 
postage prepaid.
    (b) A requirement that invoices be submitted directly to the 
finance or other office designated in the order, or in the case of 
unpriced purchase orders, to the contracting officer (see 13.302-2(c)).
    (c) The following statement on the consignee's copy:

Consignee's Notification to Purchasing Activity of Nonreceipt, Damage, 
or Nonconformance

The consignee shall notify the purchasing office promptly after the 
specified date of delivery of supplies not received, damaged in 
transit, or not conforming to specifications of the purchase order. 
Unless extenuating circumstances exist, the notification should be made 
not later than 60 days after the specified date of delivery.


13.404  Contract clause.

    The contracting officer shall insert the clause at 52.213-1, Fast 
Payment Procedure, in solicitations and contracts when the conditions 
in 13.402 are applicable and it is intended that the fast payment 
procedure be used in the contract (in the case of BPAs, the contracting 
officer may elect to insert the clause either in the BPA or in orders 
under the BPA).

Subpart 13.5--Test Program for Certain Commercial Items


13.500  General.

    (a) This subpart authorizes, as a test program, use of simplified 
procedures for the acquisition of supplies and services in amounts 
greater than the simplified acquisition threshold but not exceeding 
$5,000,000, including options, if the contracting officer reasonably 
expects, based on the nature of the supplies or services sought, and on 
market research, that offers will include only commercial items.
Under this test program, contracting officers may use any simplified 
acquisition procedure in this part, subject to any specific dollar 
limitation applicable to the particular procedure. The purpose of this 
test program is to vest contracting officers with additional procedural 
discretion and flexibility, so that commercial item acquisitions in 
this dollar range may be solicited, offered, evaluated, and awarded in 
a simplified manner that maximizes efficiency and economy and minimizes 
burden and administrative costs for both the Government and industry 
(10 U.S.C. 2304(g) and 2305 and 41 U.S.C. 253(g) and 253a and 253b).
    (b) For the period of this test, contracting activities shall 
employ the simplified procedures authorized by the test to the maximum 
extent practicable.
    (c) When acquiring commercial items using the procedures in this 
part, the requirements of part 12 apply subject to the order of 
precedence provided at 12.102(c). This includes use of the provisions 
and clauses in subpart 12.3.
    (d) The authority to issue solicitations under this subpart shall 
expire on January 1, 2000. Contracts may be awarded after the 
expiration of this authority for solicitations issued before the 
expiration of the authority.


13.501  Special documentation requirements.

    (a) Sole source acquisitions. (1) Acquisitions conducted under 
simplified acquisition procedures are exempt from the requirements in 
part 6. However, contracting officers shall--
    (i) Conduct sole source acquisitions, as defined in 6.003, under 
this subpart only if the need to do so is justified in writing and 
approved at the levels specified in paragraphs (a)(2)(i) and (a)(2)(ii) 
of this section; and
    (ii) Prepare sole source justifications using the format at 6.303-
2, modified to reflect an acquisition under the authority of the test 
program for commercial items (section 4202 of the Clinger-Cohen Act of 
1996).
    (2) Justifications and approvals are required under this subpart 
only for sole source acquisitions.
    (i) For a proposed contract exceeding $100,000, but not exceeding 
$500,000, the contracting officer's certification that the 
justification is accurate and complete to the best of the contracting 
officer's knowledge and belief will serve as approval, unless a higher 
approval level is established in accordance with agency procedures.
    (ii) For a proposed contract exceeding $500,000, the approval shall 
be by the competition advocate for the procuring activity, designated 
pursuant to 6.501; or an official described in 6.304(a)(3) or (a)(4). 
This authority is not delegable.
    (b) Contract file documentation. The contract file shall include--
    (1) A brief written description of the procedures used in awarding 
the contract, including the fact that the test procedures in FAR 
subpart 13.5 were used;
    (2) The number of offers received;
    (3) An explanation, tailored to the size and complexity of the 
acquisition, of the basis for the contract award decision; and
    (4) Any justification approved under paragraph (a) of this section.

PART 16--TYPES OF CONTRACTS


16.701  [Amended]

    9. Section 16.701 is amended in the parenthetical by revising 
``subpart 13.2'' to read ``13.303''.


16.703  [Amended]

    10. Section 16.703 is amended in paragraph (c)(1)(vi) by revising 
the citation ``13.303'' to read ``13.403''.

PART 19--SMALL BUSINESS PROGRAMS


19.1006  [Amended]

    11. Section 19.1006 is amended in paragraph (c)(1)(i) by removing 
``13.105 or''.

PART 32--CONTRACT FINANCING


32.1103  [Amended]

    12. Section 32.1103 is amended in paragraph (a)(1) by revising the 
reference ``13.103(e)'' to read ``13.003(f)'' and in paragraph (b)(2) 
by revising ``13.103(e)'' to read ``13.301''.

PART 41--ACQUISITION OF UTILITY SERVICES


41.202  [Amended]

    13. Section 41.202 is amended in paragraph (c)(1) by revising the 
reference ``subpart 13.5'' to read ``13.302''.

PART 43--CONTRACT MODIFICATIONS


43.301  [Amended]

    14. Section 43.301 is amended in paragraph (a)(2)(iii) by revising 
the reference ``13.503'' to read ``13.302-3''.

[[Page 64927]]

PART 49--TERMINATION OF CONTRACTS


49.002  [Amended]

    15. Section 49.002 is amended in paragraph (a) by revising the 
reference ``13.504(b)'' to read ``13.302-4''.
    16. Section 49.501 is amended by adding the following text as the 
second sentence:


49.501  General.

    * * * This subpart does not apply to contracts that use the clause 
at 52.213-4, Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items). * * *
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.101  [Amended]

    17. Section 52.101 is amended in paragraph (e)(2)(i) by removing 
the semicolon after the word ``authorized'' and replacing it with 
``(see 52.102);''.
    18. Section 52.102 is revised to read as follows:


52.102  Incorporating provisions and clauses.

    (a) Provisions and clauses should be incorporated by reference to 
the maximum practical extent, rather than being incorporated in full 
text, even if they--
    (1) Are used with one or more alternates or on an optional basis;
    (2) Are prescribed on a ``substantially as follows'' or 
``substantially the same as'' basis, provided they are used verbatim;
    (3) Require modification or the insertion by the Government of 
fill-in material (see 52.104); or
    (4) Require completion by the offeror or prospective contractor. 
This instruction also applies to provisions completed as annual 
representations and certifications.
    (b) Except for provisions and clauses prescribed in 52.107, any 
provision or clause that can be accessed electronically by the offeror 
or prospective contractor may be incorporated by reference in 
solicitations and/or contracts. However, the contracting officer, upon 
request, shall provide the full text of any provision or clause 
incorporated by reference.
    (c) Agency approved provisions and clauses prescribed in agency 
acquisition regulations, and provisions and clauses not authorized by 
subpart 52.3 to be incorporated by reference, need not be incorporated 
in full text, provided the contracting officer includes in the 
solicitation and contract a statement that--
    (1) Identifies all provisions and clauses that require completion 
by the offeror or prospective contractor;
    (2) Specifies that the provisions and clauses must be completed by 
the offeror or prospective contractor and must be submitted with the 
quotation or offer; and
    (3) Identifies to the offeror or prospective contractor at least 
one electronic address where the full text may be accessed.
    (d) An agency may develop a group listing of provisions and clauses 
that apply to a specific category of contracts. An agency group listing 
may be incorporated by reference in solicitations and/or contracts in 
lieu of citing the provisions and clauses individually, provided the 
group listing is made available electronically to offerors and 
prospective contractors.
    (e) A provision or clause that is not available electronically to 
offerors and prospective contractors shall be incorporated in 
solicitations and/or contracts in full text if it is--
    (1) A FAR provision or clause that otherwise is not authorized to 
be incorporated by reference (see subpart 52.3); or
    (2) A provision or clause prescribed for use in an agency 
acquisition regulation.
    (f) Provisions or clauses may not be incorporated by reference by 
being listed in the--
    (1) Provision at 52.252-3, Alterations in Solicitations; or
    (2) Clause at 52.252-4, Alterations in Contract.


52.102-1 and 52.102-2  [Removed]

    19. Sections 52.102-1 and 52.102-2 are removed.
    20. Section 52.213-1 is revised to read as follows:


52.213-1  Fast Payment Procedure.

    As prescribed in 13.404, insert the following clause:

Fast Payment Procedure (Feb 1998)

    (a) General. The Government will pay invoices based on the 
Contractor's delivery to a post office or common carrier (or, if 
shipped by other means, to the point of first receipt by the 
Government).
    (b) Responsibility for supplies. (1) Title to the supplies 
passes to the Government upon delivery to--
    (i) A post office or common carrier for shipment to the specific 
destination; or
    (ii) The point of first receipt by the Government, if shipment 
is by means other than Postal Service or common carrier.
    (2) Notwithstanding any other provision of the contract, order, 
or blanket purchase agreement, the Contractor shall--
    (i) Assume all responsibility and risk of loss for supplies not 
received at destination, damaged in transit, or not conforming to 
purchase requirements; and
    (ii) Replace, repair, or correct those supplies promptly at the 
Contractor's expense, if instructed to do so by the Contracting 
Officer within 180 days from the date title to the supplies vests in 
the Government.
    (c) Preparation of invoice. (1) Upon delivery to a post office 
or common carrier (or, if shipped by other means, the point of first 
receipt by the Government), the Contractor shall--
    (i) Prepare an invoice as provided in this contract, order, or 
blanket purchase agreement; and
    (ii) Display prominently on the invoice ``FAST PAY.''
    (2) If the purchase price excludes the cost of transportation, 
the Contractor shall enter the prepaid shipping cost on the invoice 
as a separate item. The Contractor shall not include the cost of 
parcel post insurance. If transportation charges are stated 
separately on the invoice, the Contractor shall retain related paid 
freight bills or other transportation billings paid separately for a 
period of 3 years and shall furnish the bills to the Government upon 
request.
    (3) If this contract, order, or blanket purchase agreement 
requires the preparation of a receiving report, the Contractor shall 
prepare the receiving report on the prescribed form or, 
alternatively, shall include the following information on the 
invoice, in addition to that required in paragraph (c)(1) of this 
clause:
    (i) A statement in prominent letters ``NO RECEIVING REPORT 
PREPARED.''
    (ii) Shipment number.
    (iii) Mode of shipment.
    (iv) At line item level--
    (A) National stock number and/or manufacturer's part number;
    (B) Unit of measure;
    (C) Ship-To Point;
    (D) Mark-For Point, if in the contract; and
    (E) FEDSTRIP/MILSTRIP document number, if in the contract.
    (4) If this contract, order, or blanket purchase agreement does 
not require preparation of a receiving report on a prescribed form, 
the Contractor shall include on the invoice the following 
information at the line item level, in addition to that required in 
paragraph (c)(1) of this clause:
    (i) Ship-To Point.
    (ii) Mark-For Point.
    (iii) FEDSTRIP/MILSTRIP document number, if in the contract.
    (5) Where a receiving report is not required, the Contractor 
shall include a copy of the invoice in each shipment.
    (d) Certification of invoice. The Contractor certifies by 
submitting an invoice to the Government that the supplies being 
billed to the Government have been shipped or delivered in 
accordance with shipping instructions issued by the ordering 
officer, in the quantities shown on the invoice, and that the 
supplies are in the quantity and of the quality designated by the 
contract, order, or blanket purchase agreement.

[[Page 64928]]

    (e) Fast pay container identification. The Contractor shall mark 
all outer shipping containers ``FAST PAY.''

(End of clause)


52.213-2  [Amended]

    21. Section 52.213-2 is amended in the introductory text by 
revising the reference ``13.506(b)'' to read ``13.302-5(b)''.


52.213-3  [Amended]

    22. Section 52.213-3 is amended in the introductory text by 
revising the reference ``13.506(c)'' to read ``13.302-5(c)''.
    23. Section 52.213-4 is added to read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

    As prescribed in 13.302-5(d), insert the following clause:

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (Feb 1998)

    (a) The Contractor shall comply with the following Federal 
Acquisition Regulation (FAR) clauses that are incorporated by 
reference:
    (1) The clauses listed below implement provisions of law or 
Executive order:
    (i) 52.222-3, Convict Labor (Aug 1996) (E.O. 11755).
    (ii) 52.233-3, Protest After Award (Aug 1996) (31 U.S.C. 3553).
    (2) Listed below are additional clauses that apply:
    (i) 52.225-11, Restrictions on Certain Foreign Purchases (Oct 
1996).
    (ii) 52.232-1, Payments (Apr 1984).
    (iii) 52.232-8, Discounts for Prompt Payment (May 1997).
    (iv) 52.232-11, Extras (Apr 1984).
    (v) 52.232-25, Prompt Payment (Jun 1997).
    (vi) 52.232-33, Mandatory Information for Electronic Funds 
Transfer Payment (Aug 1996).
    (vii) 52.233-1, Disputes (Oct 1995).
    (viii) 52.244-6, Subcontracts for Commercial Items and 
Commercial Components (Oct 1995).
    (ix) 52.253-1, Computer Generated Forms (Jan 1991).
    (b) The Contractor shall comply with the following FAR clauses, 
incorporated by reference, unless the circumstances do not apply:
    (1) The clauses listed below implement provisions of law or 
Executive order:
    (i) 52.222-20, Walsh-Healey Public Contracts Act (DEC 1996) (41 
U.S.C. 35-45) (Applies to supply contracts over $10,000 in the 
United States).
    (ii) 52.222-26, Equal Opportunity (APR 1984) (E.O. 11246) 
(Applies to contracts over $10,000).
    (iii) 52.222-35, Affirmative Action for Special Disabled and 
Vietnam Era Veterans (APR 1984) (38 U.S.C. 4212) (Applies to 
contracts over $10,000).
    (iv) 52.222-36, Affirmative Action for Handicapped Workers (APR 
1984) (29 U.S.C. 793) (Applies to contracts over $2,500).
    (v) 52.222-37, Employment Reports on Special Disabled Veterans 
and Veterans of the Vietnam Era (JAN 1988) (38 U.S.C. 4212) (Applies 
to contracts over $10,000).
    (vi) 52.222-41, Service Contract Act of 1965, As Amended (MAY 
1989) (41 U.S.C. 351, et seq.) (Applies to service contracts over 
$2,500).
    (vii) 52.223-5, Pollution Prevention and Right-to-Know 
Information (MAR 1997) (E.O. 12856) (Applies to services performed 
on Federal facilities).
    (viii) 52.225-3, Buy American Act--Supplies (JAN 1994) (41 
U.S.C. 10) (Applies to supplies, and to services involving the 
furnishing of supplies, if the contract was--
    (A) Under $25,000; or
    (B) Set aside for small business concerns, regardless of dollar 
value).
    (2) Listed below are additional clauses that may apply:
    (i) 52.209-6, Protecting the Government's Interest When 
Subcontracting with Contractors Debarred, Suspended, or Proposed for 
Debarment (JULY 1995) (Applies to contracts over $25,000).
    (ii) 52.211-17, Delivery of Excess Quantities (SEPT 1989) 
(Applies to fixed-price supplies).
    (iii) 52.247-29, F.o.b. Origin (JUN 1988) (Applies to supplies 
if delivery is f.o.b. origin).
    (iv) 52.247-34, F.o.b. Destination (NOV 1991) (Applies to 
supplies if delivery is f.o.b. destination).
    (c) FAR 52.252-2, Clauses Incorporated by Reference (FEB 1998). 
This contract incorporates one or more clauses by reference, with 
the same force and effect as if they were given in full text. Upon 
request, the Contracting Officer will make their full text 
available. Also, the full text of a clause may be accessed 
electronically at this/these address(es):

----------------------------------------------------------------------
----------------------------------------------------------------------

[Insert one or more Internet addresses]

    (d) Inspection/Acceptance. The Contractor shall tender for 
acceptance only those items that conform to the requirements of this 
contract. The Government reserves the right to inspect or test any 
supplies or services that have been tendered for acceptance. The 
Government may require repair or replacement of nonconforming 
supplies or reperformance of nonconforming services at no increase 
in contract price. The Government must exercise its postacceptance 
rights--
    (1) Within a reasonable period of time after the defect was 
discovered or should have been discovered; and
    (2) Before any substantial change occurs in the condition of the 
item, unless the change is due to the defect in the item.
    (e) Excusable delays. The Contractor shall be liable for default 
unless nonperformance is caused by an occurrence beyond the 
reasonable control of the Contractor and without its fault or 
negligence, such as acts of God or the public enemy, acts of the 
Government in either its sovereign or contractual capacity, fires, 
floods, epidemics, quarantine restrictions, strikes, unusually 
severe weather, and delays of common carriers. The Contractor shall 
notify the Contracting Officer in writing as soon as it is 
reasonably possible after the commencement of any excusable delay, 
setting forth the full particulars in connection therewith, shall 
remedy such occurrence with all reasonable dispatch, and shall 
promptly give written notice to the Contracting Officer of the 
cessation of such occurrence.
    (f) Termination for the Government's convenience. The Government 
reserves the right to terminate this contract, or any part hereof, 
for its sole convenience. In the event of such termination, the 
Contractor shall immediately stop all work hereunder and shall 
immediately cause any and all of its suppliers and subcontractors to 
cease work. Subject to the terms of this contract, the Contractor 
shall be paid a percentage of the contract price reflecting the 
percentage of the work performed prior to the notice of termination, 
plus reasonable charges that the Contractor can demonstrate to the 
satisfaction of the Government, using its standard record keeping 
system, have resulted from the termination. The Contractor shall not 
be required to comply with the cost accounting standards or contract 
cost principles for this purpose. This paragraph does not give the 
Government any right to audit the Contractor's records. The 
Contractor shall not be paid for any work performed or costs 
incurred that reasonably could have been avoided.
    (g) Termination for cause. The Government may terminate this 
contract, or any part hereof, for cause in the event of any default 
by the Contractor, or if the Contractor fails to comply with any 
contract terms and conditions, or fails to provide the Government, 
upon request, with adequate assurances of future performance. In the 
event of termination for cause, the Government shall not be liable 
to the Contractor for any amount for supplies or services not 
accepted, and the Contractor shall be liable to the Government for 
any and all rights and remedies provided by law. If it is determined 
that the Government improperly terminated this contract for default, 
such termination shall be deemed a termination for convenience.
    (h) Warranty. The Contractor warrants and implies that the items 
delivered hereunder are merchantable and fit for use for the 
particular purpose described in this contract.

(End of clause)

    24. Sections 52.252-1 and 52.252-2 are revised to read as follows:


52.252-1  Solicitation Provisions Incorporated by Reference.

    As prescribed in 52.107(a), insert the following provision:
    Solicitation Provisions Incorporated by Reference (Feb 1998)
    This solicitation incorporates one or more solicitation 
provisions by reference, with the same force and effect as if they 
were given in full text. Upon request, the Contracting Officer will 
make their full text available. The offeror is cautioned that the 
listed provisions may include blocks that must be completed by the 
offeror and submitted with its quotation or offer. In lieu of 
submitting

[[Page 64929]]

the full text of those provisions, the offeror may identify the 
provision by paragraph identifier and provide the appropriate 
information with its quotation or offer. Also, the full text of a 
solicitation provision may be accessed electronically at this/these 
address(es):

----------------------------------------------------------------------

----------------------------------------------------------------------

[Insert one or more Internet addresses]

(End of provision)


52.252-2  Clauses Incorporated by Reference.

    As prescribed in 52.107(b), insert the following clause:

Clauses Incorporated by Reference (Feb 1998)

    This contract incorporates one or more clauses by reference, 
with the same force and effect as if they were given in full text. 
Upon request, the Contracting Officer will make their full text 
available. Also, the full text of a clause may be accessed 
electronically at this/these address(es):
----------------------------------------------------------------------

----------------------------------------------------------------------

[Insert one or more Internet addresses]

(End of clause)

PART 53--FORMS


53.213 and 53.243  [Amended]

    25. Amend the internal references throughout 53.213 and 53.243 as 
indicated in the following table:

----------------------------------------------------------------------------------------------------------------
            Location                                      Remove                                  Insert        
----------------------------------------------------------------------------------------------------------------
53.213(a)......................  13.107 both times it appears...........................  13.307(b)             
53.213(b)......................  13.503(b)..............................................  13.307(c)(3)          
3.213(c).......................  13.505(b)..............................................  13.306                
53.213(d)......................  13.404(e)..............................................  13.307(e)             
53.213(e)......................  13.107(c)..............................................  13.307(c)(1)          
53.213(f)(1)...................  13.505.................................................  13.307                
53.213(f)(2)...................  13.202.................................................  13.303-2              
53.213(f)(2)...................  13.204(e)..............................................  13.303-5              
53.243 undesignated paragraph..  13.503(b)..............................................  13.302-3              
----------------------------------------------------------------------------------------------------------------

[FR Doc. 97-31817 Filed 12-8-97; 8:45 am]
BILLING CODE 6820-EP-P