[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Proposed Rules]
[Pages 2341-2424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-215]



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Part III





Department of Veterans Affairs





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48 CFR Chapter 8



VA Acquisition Regulation: Plain Language Rewrite; Proposed Rule

Federal Register / Vol. 71 , No. 9 / Friday, January 13, 2006 / 
Proposed Rules

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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Chapter 8

RIN 2900-AK78


VA Acquisition Regulation: Plain Language Rewrite

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: We propose to revise the Department of Veterans Affairs (VA) 
Acquisition Regulation (VAAR). We have rewritten much of the VAAR to 
conform to plain language principles. We are changing many delegations 
of authority for the purpose of becoming more efficient. We are 
removing non-regulatory material. We are making changes in format, 
arrangement, and numbering to make the VAAR parallel to the Federal 
Acquisition Regulation (FAR) as required by the FAR. We are removing 
provisions that simply restate FAR provisions that are already 
applicable. This document also proposes to set forth or revise 
procedures for providing notice and hearing to resolve issues regarding 
possible violations of the Gratuities clause, establishing qualified 
products lists, suspending or debarring a contractor, for expediting 
payments to small businesses, and for reducing or suspending payments 
upon a finding of contract fraud. We propose to expand the coverage of 
the VAAR clause on Organizational Conflicts of Interest to cover a 
broader range of services that may be subject to organizational 
conflicts of interest. We propose to clarify the scope of certain 
regulations and to allow use of additional VAAR clauses in commercial 
item solicitations and contracts, to remove requirements for setting 
aside construction and architect-engineer solicitations for small 
businesses that are in conflict with current statute, to remove a 
requirement to conduct an audit of section 8(a) price proposals that is 
contrary to current FAR requirements, and to remove a VAAR provision 
that requested data from offerors on veteran-owned small businesses 
that has been replaced by a FAR provision. The rule would provide 
guidance to contracting officers on the types of data that should be 
requested from a contractor when evaluating the contractor's financial 
condition. The rule would require the use of the clause on Assignment 
of Claims in purchase orders, would provide guidance to contracting 
officers on the criteria for revising the payment due dates for 
invoices, and would require the use of Alternate I to the clause on 
Disputes.

DATES: Comments on the proposed rule should be submitted on or before 
March 14, 2006 to be considered in the formulation of the final rule.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to the Director, Regulations Management (00REG1), Department of 
Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 
20420; fax to (202) 273-9026; e-mail to [email protected]; or, 
through http://www.regulations.gov. Comments should indicate that they 
are submitted in response to ``RIN 2900-AK78.'' All comments received 
will be available for public inspection in the Office of Regulation 
Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 
p.m. Monday through Friday (except holidays). Please call (202) 273-
9515 for an appointment.

FOR FURTHER INFORMATION CONTACT: 

------------------------------------------------------------------------
                                                    Telephone No. and e-
           VAAR part                   Name             mail address
------------------------------------------------------------------------
808, 813, 852.................  Cathy Dailey.....  (202) 273-8774;
                                                    [email protected].
803 through 806, 809, 811,      Don Kaliher......  (202) 273-8819;
 817, 819, 822, 825, 828, 829,                      [email protected]
 831 through 833, 836, 837,                         va.gov.
 842, 846, 852, and 873.
801, 802, 807, 812, 814         Barbara Latvanas.  (202) 273-7808;
 through 816, 824, 841, 847,                        [email protected]
 849, 852, 853, 870, and 871.                       l.va.gov.
------------------------------------------------------------------------

    The mailing address for the contact persons is as follows: 
Acquisition Policy Division (049A5A), Office of Acquisition and 
Material Management, Department of Veterans Affairs, 810 Vermont Ave., 
NW, Washington, 20420.

SUPPLEMENTARY INFORMATION: When Federal agencies acquire supplies and 
services using appropriated funds, the purchase is governed by the 
Federal Acquisition Regulation (FAR), set forth at 48 Code of Federal 
Regulations (CFR) chapter 1, parts 1 through 53, and the agency 
regulations that implement and supplement the FAR. These authorities 
are designed to ensure that Government procurements are handled fairly 
and consistently, that the Government receives the best value for its 
money, and that all Government contractors operate under a known set of 
rules.
    The Department of Veterans Affairs (VA) regulations that implement 
and supplement the FAR are named the VA Acquisition Regulation (VAAR) 
and are set forth at 48 CFR chapter 8, parts 801 through 873. The wide 
variety of activities that VA carries out makes it necessary for VA to 
implement and supplement the FAR. The VAAR covers VA special 
acquisition needs. We are proposing a number of changes to the VAAR. We 
have rewritten much of the VAAR to conform to plain language principles 
and plain language changes have been made to most parts of the VAAR. We 
propose to change many delegations of authority for the purpose of 
becoming more efficient. We are removing non-regulatory material. We 
propose to make changes in format, arrangement, and numbering to make 
the VAAR parallel to the Federal Acquisition Regulation (FAR) as 
required by subpart 1.3 of the FAR. We propose to remove provisions 
that simply restate FAR provisions that are already applicable. We are 
also proposing to make other changes discussed below.

Part 801, Department of Veterans Affairs Acquisition Regulations System

    We propose to amend the ``Authority'' cites at the beginning of 
each Department of Veterans Affairs Acquisition Regulation (VAAR) part 
to correspond to current authority.
    We propose to amend the VAAR to use acronyms, such as ``VAAR,'' in 
part 801 and throughout the document for many of the common terms used. 
The new acronyms are referenced in part 802 or, if used only in one 
part or subpart of the VAAR, in that part or subpart.
    We proposed to add new VAAR sections 801.105, Issuance, and 
801.105-2, Arrangement of regulations, to explain how the VAAR is 
structured. The information follows the structure established for the 
Federal Acquisition Regulation (FAR) at 1.105 and 1.105-2.

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The VAAR is intended to supplement the FAR and must follow a similar 
structural arrangement.
    Throughout the document, sections of the VAAR have been renumbered 
and/or renamed to correspond to the FAR with no significant changes to 
the material contained therein. For instance, section 801.301-70, 
Paperwork Reduction Act requirements, has been renumbered and renamed 
as 801.106, OMB approval under the Paperwork Reduction Act, to 
correspond to the FAR.
    We proposed to add designations for the Department's Chief 
Acquisition Officer, Senior Procurement Executive (SPE), and 
Procurement Executive (which is being renamed as the Deputy Senior 
Procurement Executive (DSPE)), at 802.100, Definitions, to new section 
801.304, Agency control and compliance procedures, to delineate 
responsibilities for compliance with FAR requirements.
    We propose to amend VAAR section 801.670-5 by removing previously 
delegated authority for all officials except the Inspector General to 
enter into or issue Letters of Agreement. As a result of this proposed 
change, future acquisitions of the types of services previously 
acquired under this section (e.g., advisory and assistance services, 
peer review of research, acquisition of instructor services and 
training) will be acquired using normal acquisition methods (e.g., 
purchase orders, micro-purchases using the purchase card). The Office 
of Inspector General may continue to issue contracts using a letter 
format due to the sensitive nature of the acquisitions of that office. 
We believe this proposed amendment will simplify the acquisition 
process and consolidate acquisition functions within VA.

Subpart 803.2, Contractor Gratuities to Government Personnel

    We propose to add VAAR section 803.204 to specify the notification 
and hearing procedures we would follow before taking an action to 
terminate a contractor's right to proceed and/or initiate debarment or 
suspension measures, based on violation of the Gratuities clause. The 
proposed procedures are modeled after the proposed VAAR provisions at 
809.406-3, which set out procedures for debarment. We would make these 
changes to comply with FAR 3.204.

Subpart 803.7, Voiding and Rescinding Contracts

    We propose to add VAAR section 803.705 to specify the notification 
and hearing procedures we would follow before taking an action to void 
or rescind a contract based on final conviction for bribery or other 
offenses, as specified in FAR 3.700. The proposed procedures are 
modeled after the proposed VAAR provisions at 809.406-3, which set out 
procedures for debarment. We propose to make these changes to comply 
with FAR 3.705.

Sections 806.401 and 814.103-1

    We propose to remove provisions currently in sections 806.401 and 
814.103-1 requiring VA contracting officers to use sealed bidding 
procedures for any solicitation over the small purchase limitation and 
for any acquisition expected to exceed $1,000 for repairs of property 
under 38 United States Code (U.S.C.) Chapter 37. The FAR requires the 
use of sealed bidding if the acquisition is subject to FAR Part 6 and: 
(1) Time permits the solicitation, submission, and evaluation of sealed 
bids; (2) the award will be made on the basis of price and other price-
related factors; (3) it is not necessary to conduct discussions with 
the responding offerors about their bids; and (4) there is a reasonable 
expectation of receiving more than one sealed bid. We see no reason for 
a special VAAR rule on these matters. By proposing to remove these VAAR 
provisions, VA contracting officers would be governed by the FAR. We 
believe the FAR provisions provide sufficient guidance on when to use 
sealed bidding procedures.

Subpart 807.3, Contractor Versus Government Performance, and 852.207-
70, Report of Employment Under Commercial Activities

    We propose to amend Subpart 807.3 to remove the term 
``employee(s)'' to add in its place ``personnel'' to generally 
correspond with how the term is used in FAR Subpart 7.3 and in Office 
of Management and Budget Circular A-76.

Part 809, Contractor Qualifications

    We propose to add new section 809.204, Responsibilities for 
establishment of a qualification requirement, to provide guidance to 
contracting officers on establishing VA qualified product lists (QPL). 
Contracting officers may develop a QPL either for local use, for use in 
VA's Veterans Integrated Service Networks (VISN), or for some other 
geographical or administrative area. This is consistent with the FAR at 
Subpart 9.2.
    Under current VAAR 809.206(b)(2), a contractor must guarantee that 
he or she will deliver a product to VA if we agree to accept and test 
the product for listing on a QPL. We propose to remove this requirement 
because a guarantee in these circumstances is of no consequence since 
the terms of a contract for a product are negotiated after the listing 
of the product on a QPL. A contractor will sell its product to VA if 
the parties can agree on price and other terms and conditions.
    Under current VAAR 809.206(b)(2), when we are establishing a VA 
QPL, VA gives ``known suppliers'' of an item the chance to submit a 
sample item. However, under FAR 8.404, VA may issue a delivery order 
against a Federal Supply Schedule (FSS) contract without seeking 
further competition from firms who do not hold FSS contracts and may 
seek price reductions from FSS contractors. We propose to revise the 
text currently in 809.206(b)(2) to state that VA may limit ``known 
suppliers'' to those contractors whose products are already covered 
under an FSS contract and to redesignate the provision as 
809.204(c)(2). This proposed change would preclude requiring VA to 
duplicate a full and open competition that has already been conducted 
to establish the FSS schedule. Our proposed action is consistent with 
FAR 8.404.

Subpart 809.4, Debarment, Suspension, and Ineligibility

    Subpart 809.4 supplements provisions of the FAR concerning the 
debarment or suspension of contractors. We propose to amend the 
procedures for debarring or suspending contractors. The proposed 
procedures include the following:
    Under the proposed procedures, when the Debarment and Suspension 
(D&S) Committee finds evidence of a cause for debarment or suspension, 
it would conduct an investigation on whether or not to prepare a Notice 
of Proposal to Debar or Notice of Suspension and make a recommendation 
to the Deputy Senior Procurement Executive (DSPE).
    If the DSPE finds a basis for debarment or suspension, the D&S 
Committee would send the contractor the Notice of Proposal to Debar or 
Notice of Suspension. Pursuant to the FAR, a contractor given a Notice 
of Proposal to Debar or Notice of Suspension is excluded from 
participating in Federal procurement and non-procurement programs.
    The contractor proposed for debarment or suspended may submit 
information in person or in writing at an informal proceeding or 
otherwise. If the contractor's objections to the proposed debarment or 
suspension are based on a genuine dispute over facts material to the 
action, the dispute would be resolved in a separate preceding before a 
member of the VA Board of Contract Appeals (an informal trial type 
hearing

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under the procedures in proposed section 809.470).
    If there is no such dispute or if all disputes have been resolved, 
the debarring or suspending official will make a decision based on all 
available information.
    These proposed procedures are designed to ensure that the 
contractor is provided with an efficient and fair process before a 
decision is made on whether or not to take a debarment action or to 
continue with a suspension action.

Subpart 809.5, Organizational and Consultant Conflicts of Interest

    The VAAR currently requires that the clause at 852.209-70, 
Organizational Conflicts of Interest, be inserted in solicitations for 
consulting services. We propose to require that this clause also be 
used in solicitations for management support services, other 
professional services, contractor performance of, or assistance in, 
conducting technical evaluations; or system engineering and technical 
direction work. These are the types of services that may be subject to 
potential organizational and consultant conflicts of interest issues as 
contemplated by FAR 9.502.

Part 811, Describing Agency Needs

    We propose to relocate material from section 811.204 to a new 
proposed clause at 852.211-75, Product Specifications, without change 
for purposes of clarity.

Part 812, Acquisition of Commercial Items

    We propose to add section 812.102, Applicability, to state that 
contracts for the acquisition of commercial items are subject to the 
policies in other parts of the VAAR. However, proposed section 812.102 
notes that when a policy in another part of the VAAR differs from a 
policy in Part 812, Part 812 shall take precedence for the acquisition 
of commercial items. This proposed section is to make the VAAR 
consistent with the principles of the FAR at 12.102(c).
    We propose to remove the requirement currently at 812.301, 
Solicitation provisions and contract clauses for the acquisition of 
commercial items, which requires a contracting officer to include the 
clause at 852.219-70, Veteran-Owned Small Business, in acquisitions of 
commercial items because this requirement has been superseded by a 
similar FAR requirement at 52.212-3. In addition, we propose to make 
the use of clauses listed in proposed section 812.301, paragraphs (b) 
and (c), optional rather than mandatory in acquisitions of commercial 
items and to add the following clauses to the list of clauses in 
812.301(b) that may be used in solicitations and contracts for the 
acquisition of commercial items:

852.209-70, Organizational Conflicts of Interest.
852.211-73, Brand Name or Equal.
852.211-75, Product Specifications.
852.214-71, Restrictions on Alternate Item(s).
852.214-72, Alternate Item(s).
852.214-73, Alternate Packaging and Packing.
852.214-74, Bid Samples.
852.252-70, Solicitation Provisions or Clauses Incorporated by 
Reference.

    We believe the use of these clauses would not be inconsistent with 
commercial practices. Further, we propose to add the clause at 852.211-
74, Liquidated Damages, to proposed paragraph (c), thereby allowing the 
use of this clause if the contracting officer determines that its use 
is consistent with commercial practices. We believe that there may be 
situations where use of a liquidated damages clause would not be 
inconsistent with commercial practices, such as when failure to deliver 
supplies or perform services on a timely basis would result in 
financial harm to the Government.

Part 819, Small Business Programs

    We propose to add new section 819.202-1 to allow a contracting 
officer to prescribe a period less than the standard 30 days for paying 
a contractor, but not less than 7 days. This proposal is designed to 
assist small businesses in meeting their financial obligations and is 
consistent with the FAR requirement at 32.908(c)(2), which does not 
allow the payment period to be less than 7 days.
    We propose to remove provisions currently in section 819.502-2 that 
require contracting officers to treat certain construction and 
architect-engineering solicitations as though the Small Business 
Administration had initiated a set-aside request. These provisions are 
contrary to the provisions of FAR Subpart 19.10 and underlying 
statutory authority that provide for unrestricted competition for these 
services under the Small Business Competitiveness Demonstration 
Program.
    We propose to remove provisions currently in 819.800(d) that 
require audits to be performed on price proposals under the 8(a) 
program in excess of $500,000. This matter is covered under FAR 15.404-
2, which requires the contracting officer to request an audit only when 
the information available is inadequate to determine fair and 
reasonable price. We think that the FAR provision is adequate to 
protect the Government.
    We propose to remove paragraph (b) at section 819.7003 that 
currently requires the inclusion of the VAAR clause at 852.219-70, 
Veteran-Owned Small Business, in all solicitations because this 
requirement has been superseded by a similar FAR requirement at 52.212-
3.

Part 832, Contract Financing

    We propose to add section 832.006-4 to specify the notification and 
hearing procedures we would follow before taking an action to reduce or 
suspend payment to a contractor under FAR 32.006, Reduction or 
suspension of contract payment upon finding of fraud. We propose to 
make these changes to comply with FAR 32.006-3, which requires agencies 
to establish appropriate procedures to implement the policies and 
procedures of FAR 32.006.
    FAR 32.202-1(d) requires an agency to establish procedures for 
approving the use of unusual contract financing in commercial item 
acquisitions. We propose to establish those agency procedures in 
832.202-1 for approving the use of unusual contract financing because 
we think they are necessary for ensuring that VA's use of unusual 
contract financing or commercial advance payment is in the Government's 
best interest.
    FAR 32.202-4(a)(2) states that, subject to agency regulations, the 
contracting officer may determine that a contractor's financial 
condition constitutes adequate security for Government financing. The 
VAAR does not currently say what information a contracting officer 
should review to assist in making this determination. We propose to add 
section 832.202-4 setting forth the information a contracting officer 
should evaluate and consider in determining whether a contractor's 
financial condition constitutes adequate security. Under this proposal, 
the contracting officer should obtain any of the following: interim 
balance sheets or income statements; a cash flow forecast for the 
contract term; information on contractor financing arrangements 
disclosing available cash, credit arrangements, and financial exposure; 
tax account information; descriptions or explanations of documents 
bearing on the financial vitality of the business; a Dun and Bradstreet 
report on the company; or any other necessary financial information.

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    FAR Subpart 32.9 sets forth policies, procedures, and clauses an 
agency must follow for implementing the ``prompt payment'' provisions 
of 5 CFR 1315. FAR 32.904 sets forth the number of days following 
receipt of goods or services after which Government acceptance is 
deemed to have occurred unless certain exceptions apply. Paragraphs 
(b)(1)(ii), (c)(2), (d)(1), and (d)(2) of FAR 32.904 permit a 
contracting officer to specify a period of more than 7 days for 
accepting goods or services or more than 14 days to process progress 
payments or more than 7 days to process the final payment under a 
construction contract. We propose to add section 832.904 setting forth 
the following factors a contracting officer should consider when making 
a decision whether or not to change the payment period: (1) Recent 
interest payment history; (2) the complexity of the project; (3) 
workload; (4) work site location. We believe these proposed changes 
will assist contracting officers in making determinations that are in 
the best interest of the Government.

Part 833, Protests, Disputes, and Appeals

    The VAAR currently requires the contracting officer to suspend 
contract performance if notified by GAO of a protest within 10 days of 
award. We propose to remove this provision. This provision has been 
superseded by FAR changes at 33.104(c) which state that the contracting 
officer must suspend contract performance or terminate the awarded 
contract within 10 days after award or within 5 days after a debriefing 
date offered to a protester for any debriefing required by FAR 15.505 
or 15.506, whichever is later.
    In general, prior to passage of the Contract Disputes Act of 1978, 
as amended (41 U.S.C. 601-613), the obligation to continue contract 
performance of a contract pending a decision on a claim applied only to 
claims arising under a contract. However, that Act authorizes agencies 
to require a contractor to continue contract performance in accordance 
with the contracting officer's direction pending final decision on a 
claim relating to the contract. The FAR allows use of this authority 
only if authorized by an agency. We propose to add sections 833.213 and 
833.215 to require the use of this authority in all contracts because 
we believe this is in the best interest of the Government.
    In addition, we propose to remove a statement currently at 
833.214(c) that everything discussed at an alternative dispute 
resolution meeting is confidential. This statement is unwarranted since 
the agreement between the parties governs confidentiality and the 
agreement may provide otherwise.

Section 837.270, Special Controls for Letters of Agreement

    We propose to remove this section. This section applies to letters 
of agreement and the section addressing letters of agreement at 
801.670-5 is proposed for deletion. If 801.670-5 is deleted, there 
would be no requirement for this section.

Part 852, Solicitation Provisions and Contract Clauses

    We propose to remove section 852.219-70, Veteran-Owned Small 
Business, because this provision has been superseded by a similar FAR 
provision in FAR 52.212-3.
    We propose to revise clause 852.222-70, Contract Work-Hours and 
Safety Standards Act--Nursing Home Care Contract Supplement, to 
correspond to plain language principles, with no substantive change to 
the intent or meaning of the clause.
    We propose to update Alternates I and II of clause 852.236-89, Buy 
American Act, to correspond to changes made to FAR Part 25. Alternate I 
would apply to construction contracts valued at $7,611,532 or more, 
while Alternate II would apply to construction contracts valued between 
$6,725,000 and $7,611,531.
    We propose to revise section 852.270-1 by deleting the term 
``supervise'' and adding, in its place, ``monitor.'' This is to clarify 
that VA officials do not supervise the work of contractors.
    A number of clauses have been renumbered and/or renamed, as follows 
(if no name appears in the second column, the clause name remains 
unchanged). Only those clauses that have been renumbered or renamed are 
included in this chart. Other clauses may have been changed without 
being renumbered or renamed.

------------------------------------------------------------------------
                                          Proposed  renumbered/ renamed
     Current VAAR clause and title                      as
------------------------------------------------------------------------
852.211-71, Guarantee..................  852.246-70.
852.211-72, Rejected Goods.............  852.246-71, Inspection.
852.211-73, Frozen Processed Foods.....  852.246-72.
852.211-74, Special Notice.............  852.211-71.
852.211-75, Technical Industry           852.211-72.
 Standards.
852.211-76, Noncompliance with           852.246-73.
 Packaging, Packing, and/or Marking.
852.211-77, Brand Name or Equal........  852.211-73.
852.211-78, Liquidated Damages.........  852.211-74.
852.214-71, Alternate Item(s)..........  852.214-71, Restrictions on
                                          Alternate Item(s); 852.214-72,
                                          Alternate Item(s); and 852.214-
                                          73, Alternate Packaging and
                                          Packing.
852.214-73, Bid Samples................  852.214-74.
852.233-70 Protest Content.............  852.233-70, Protest Content/
                                          Alternative Dispute
                                          Resolution.
852.237-71, Indemnification and          852.228-71.
 Insurance.
852.246-1, Special Warranties..........  852.246-74.
852.246-2, Warranty for Construction-    852.246-75.
 Guarantee Period Services.
852.252-1, Provisions or Clauses that    852.252-70, Solicitation
 Require Completion by the Offeror or     Provisions or Clauses
 Prospective Contractor.                  Incorporated by Reference.
852.270-4, Commercial Advertising......  852.203-70.
852.271-71, Inspection.................  852.271-74.
------------------------------------------------------------------------

    The proposed clause content of these clauses remain unchanged with 
the exception of 852.233-70, Protest Content/Alternative Dispute 
Resolution, where paragraph (c) is proposed to be added to encourage 
the use of alternative dispute resolution procedures, as provided in 
FAR 33.103(c), and clauses 852.271-71, Inspection, and 852.271-74, 
Inspection, which are proposed to be combined into one clause for 
simplicity.

[[Page 2346]]

Part 873, Simplified Acquisition Procedures for Health-Care Resources

    No substantive changes have been made to VAAR Part 873.

Executive Order 12866

    The Office of Management and Budget has reviewed this document 
under Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, or tribal governments, or the private sector.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-
3521), proposed collections of information are contained in Part 832 at 
sections 832.006-4 and 832.202-4, as set forth in the SUPPLEMENTARY 
INFORMATION portion of this proposed rule. These are proposed new 
sections that were not previously contained in the VAAR. This notice is 
to obtain an Office of Management and Budget (OMB) control number for 
these sections. As required under section 3507(d) of the Act, VA has 
submitted a copy of this proposed rulemaking action to OMB for its 
review of the collection of information.
    There are two other proposed new sections in this proposed rule 
that could potentially require the collection of information from 
contractors, section 803.204, Treatment of violations, and section 
832.705, Procedures. These sections provide agency procedures for 
taking action against a contractor for violation of the Gratuities 
clause (see proposed 803.204) or action to void or rescind a contract 
for violation of 18 U.S.C. 201-224, all as required by the FAR. VA has 
not taken any action under the two corresponding sections of the FAR in 
the past several years and there is no likelihood that VA will annually 
require the collection of information from 10 or more contractors under 
these provisions in the future. Therefore, these provisions are exempt 
from the PRA and VA is not requesting PRA approval from OMB for these 
provisions.
    OMB assigns control numbers to collections of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    Comments on the collection of information should be submitted to 
the Office of Management and Budget, Attention: Desk Officer for the 
Department of Veterans Affairs, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC 20503, with 
copies to the Director, Regulations Management (00REG1), Department of 
Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420. Comments 
should indicate that they are submitted in response to ``RIN 2900-
AK78.''
    Title and section number: 832.006-4, Procedures.
    Summary of collection of information: FAR 32.006 authorizes 
agencies to reduce or suspend contract payments upon finding of fraud. 
FAR 32.006-3(a) requires agencies to establish appropriate procedures 
to implement the policies and procedures of section 32.006. VA is 
proposing to establish such procedures under section 832.006-4. In 
order to provide contractors due process when there has been a finding 
of fraud and when, as a result, VA is proposing to reduce or suspend 
contract payments, VA must give the contractor notice of that intent 
and allow the contractor to submit information or argument in 
opposition to the proposed action.
    Description of need for information and proposed use of 
information: The information will be used by the VA Senior Procurement 
Executive (the Assistant Secretary for Management) in making a final 
determination whether or not to reduce or suspend payment under the 
contract. Submission of this information is voluntary and the 
collection of the information is intended to give contractors the 
opportunity to rebut a proposed decision to suspend contract payments.
    Description of likely respondents: Entities who have contracts with 
VA where there has been a finding of fraud on the part of the 
contractor.
    Estimated number of respondents: 10.
    Estimated frequency of responses: 1 response for each contract 
under which there has been a finding of fraud.
    Estimated average burden per collection: 5 hours.
    Estimated total annual reporting and recordkeeping burden: 50 
hours.
    Title and section number: 832.202-4, Security for Government 
financing.
    Summary of collection of information: FAR Subpart 32.2 authorizes 
the use of certain types of Government financing on commercial item 
purchases. 41 U.S.C. 255(f) requires the Government to obtain adequate 
security for Government financing. However, FAR 32.202-4(a)(2) provides 
that, subject to agency regulations, the contracting officer may 
determine that an offeror's financial condition is adequate security. 
VA is proposing to issue agency regulations specifying the type of 
information that the contracting officer should gather to assist the 
contracting officer in making a determination whether or not an 
offeror's financial condition constitutes adequate security.
    Description of need for information and proposed use of 
information: The information will be used by the contracting officer to 
assist in making a determination whether or not the offeror's financial 
condition is adequate security to permit Government financing of the 
commercial purchase. Submission of this information is voluntary and 
collection of this information is intended to give contractors an 
opportunity to show that their financial condition is adequate security 
for Government financing.
    Description of likely respondents: Offerors that request or require 
commercial item purchase financing (e.g., commercial interim payments, 
commercial advance payment) on commercial item acquisitions where the 
value of the acquisition exceeds $100,000.
    Estimated number of respondents: 10.
    Estimated frequency of responses: 1 per offer.
    Estimated average burden per collection: 1 hour.
    Estimated total annual reporting and recordkeeping burden: 10 
hours.
    The Department considers comments by the public on proposed 
collections of information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the proposed 
collection of

[[Page 2347]]

information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed regulation.

Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.
    The Secretary certifies that the adoption of this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities as they are defined in the RFA. The primary purpose of 
this document is to update the existing VAAR to correspond to FAR 
requirements and internal VA policy and to conform to plain language 
principles. Many of the changes are internal to VA and do not impact 
the public, do not impose any requirements on the public, and thus do 
not have an economic impact on small entities. The changes that do 
impact the public are of minimal impact.
    The addition of procedures for contractor hearings relative to: (1) 
Violation of the Gratuities clause (section 803.204); (2) voiding or 
rescinding a contract (section 803.705); and (3) reducing or suspending 
payment due to fraud (section 832.006-4) only supplement authorities 
that are already in the FAR and that are rarely used by VA. They do not 
add any new authorities that VA could not have exercised under the FAR 
before issuance of this proposed rule and VA has not taken any action 
under these authorities against small entities over the past several 
years. Few, if any, actions are expected to be taken in the future. 
Thus, there is no impact on a substantial number of small entities.
    The changes to Subpart 809.4 relative to suspension and debarment 
are changes to form and not to substance. The basic procedures remain 
unchanged and there is no change on the impact to small businesses.
    The change to 819.202-1 relative to granting small businesses 
improved payment terms on contracts is not a new authority, but the 
VAAR lacked guidance on how to exercise this authority. Title 5 CFR 
1315.5 already authorizes agencies to pay small businesses as quickly 
as possible. This change may encourage VA contracting officers to use 
this authority more often, but the impact of this provision on small 
business would be both minimal and entirely beneficial. With the advent 
of purchase cards, small businesses that accept the cards already 
receive payment within a matter of a few days following their 
submission of a request for payment to VISA. This proposed rule 
provision would have no impact on small businesses that accept the 
purchase card.
    The proposed rule would remove a current provision in section 
819.502-2 mandating that certain solicitations be treated as though SBA 
initiated a set-aside request. This provision is inconsistent with the 
requirements in FAR subpart 19.10 implementing the Small Business 
Competitiveness Demonstration Program of 1988, Public Law 100-656 
(codified as amended at 15 U.S.C. 644 note). Those authorities require 
that competition for procurement contracts relating to construction and 
A/E services be unrestricted. Because Public Law 100-656 and FAR 
subpart 19.10 already prohibit VA from inferring a set-aside request in 
the circumstances specified in VAAR 819.502-2, the removal of that 
superseded provision will not have any effect on small entities.
    Adoption of the proposed rule changes in sections 803.204, 803.705, 
and 832.006-4 would not impose more than minimal costs on any small 
entities, as VA has not taken action under the corresponding FAR 
provisions over the past several years and we do not expect to take 
many, if any, actions in future years. The positive financial benefit 
to small entities of the proposed change to 819.202-1 is also 
considered to be minimal. The authority to expedite payments already 
exists under the FAR and we expect few additional cases where this 
authority will be used as a result of the proposed addition of these 
provisions to the VAAR. Even where there are additional uses of this 
authority, the financial benefit to small entities of expedited payment 
is expected to be minimal. Therefore, under 5 U.S.C. 605(b), this 
amendment is exempt from the initial and final regulatory flexibility 
analysis requirements of sections 603 and 604.

List of Subjects

48 CFR Parts 801, 809, 811, 836, and 852

    Government procurement, Recordkeeping and reporting requirements.

48 CFR Parts 802, 804, 805, 806, 807, 808, 812, 813, 814, 815, 816, 
817, 824, 832, 837, 846, 849, 853, and 873

    Government procurement.

48 CFR Part 803

    Antitrust, Conflicts of interest, Government procurement.

48 CFR Part 819

    Administrative practice and procedure, Government procurement, 
Recordkeeping and reporting requirements, Small business, Veterans.

48 CFR Part 822

    Government procurement, Labor.

48 CFR Part 825

    Foreign currencies, Foreign trade, Government procurement.

48 CFR Part 828

    Government procurement, Insurance, Surety bonds.

48 CFR Part 829

    Government procurement, Taxes.

48 CFR Parts 831 and 842

    Accounting, Government procurement.

48 CFR Part 833

    Administrative practice and procedure, Government procurement.

48 CFR Part 841

    Government procurement, Utilities.

48 CFR Part 847

    Government procurement, Transportation.

48 CFR Part 870

    Asbestos, Frozen foods, Government procurement, Telecommunications.

48 CFR Part 871

    Government procurement, Loan programs-social programs, Loan 
programs-veterans, Recordkeeping and reporting requirements, Vocational 
rehabilitation.

    Approved: May 10, 2005.
R. James Nicholson,
Secretary of Veterans Affairs.

    Editorial Note: This document was received at the Office of the 
Federal Register on December 21, 2005.


[[Page 2348]]


    For the reasons set out in the preamble, 48 CFR Chapter 8 is 
proposed to be revised to read as follows:

CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS

SUBCHAPTER A--GENERAL

Part
801 Department of Veterans Affairs Acquisition Regulations Systems.
802 Definitions of words and terms.
803 Improper business practices and personal conflicts of interest.
804 Administrative matters.

SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING

805 Publicizing contract actions.
806 Competition requirements.
807 Acquisition planning.
808 Required sources of supplies and services.
809 Contractor qualifications.
811 Describing agency needs.
812 Acquisition of commercial items.

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

813 Simplified acquisition procedures.
814 Sealed bidding.
815 Contracting by negotiation.
816 Types of contracts.
817 Special contracting methods.

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

819 Small business programs.
822 Application of labor laws to Government acquisitions.
823 Environment, energy and water efficiency, renewable energy 
technologies, occupational safety, and drug-free workplace.
824 Protection of privacy and freedom of information.
825 Foreign acquisition.
826 Other socioeconomic programs.

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

828 Bonds and insurance.
829 Taxes.
830 Cost accounting standards administration.
831 Contract cost principles and procedures.
832 Contract financing.
833 Protests, disputes, and appeals.

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

836 Construction and architect-engineer contracts.
837 Service contracting.
839 Acquisition of information technology.
841 Acquisition of utility services.

SUBCHAPTER G--CONTRACT MANAGEMENT

842 Contract administration and audit services.
843 Contract modifications.
844 Subcontracting policies and procedures.
846 Quality assurance.
847 Transportation.
849 Termination of contracts.

SUBCHAPTER H--CLAUSES AND FORMS

852 Solicitation provisions and contract clauses.
853 Forms.

SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS

870 Special procurement controls.
871 Loan guaranty and vocational rehabilitation and employment 
programs.
872 [Reserved].
873 Simplified acquisition procedures for health-care resources.

Subchapter A--General

PART 801--DEPARTMENT OF VETERANS AFFAIRS ACQUISITION REGULATIONS 
SYSTEM

Sec.
801.000 Scope of part.
Subpart 801.1--Purpose, Authority, Issuance
801.101 Purpose.
801.103 Authority.
801.104 Applicability.
801.104-70 Exclusions.
801.105 Issuance.
801.105-2 Arrangement of regulations.
801.106 OMB approval under the Paperwork Reduction Act.
Subpart 801.2-- Administration
801.201 Maintenance of the FAR.
801.201-1 The two councils.
Subpart 801.3--Department Acquisition Regulations
801.304 Department control and compliance procedures.
Subpart 801.4--Deviations From the FAR or VAAR
801.403 Individual deviations.
801.404 Class deviations.
Subpart 801.6--Career Development, Contracting Authority, and 
Responsibilities
801.601 General.
801.602 Contracting officers.
801.602-3 Ratification of unauthorized commitments.
801.602-70 General review requirements.
801.602-71 Basic review requirements.
801.602-72 Exceptions and additional review requirements.
801.602-73 Review requirements for scarce medical specialist 
contracts and contracts for health-care resources.
801.602-74 Review requirements for an interagency agreement.
801.602-75 Review requirements--OGC.
801.602-76 Business clearance review.
801.602-77 Processing solicitations and contract documents for legal 
or technical review--general.
801.602-78 Processing solicitations and contract documents for legal 
or technical review--Veterans Health Administration field 
facilities, Central Office (except Office of Facilities Management), 
the National Acquisition Center, and the Denver Distribution Center.
801.602-79 Processing solicitations and contract documents for legal 
or technical review--Veterans Benefits Administration.
801.602-80 Processing solicitations and contract documents for legal 
or technical review--Office of Facilities Management.
801.602-81 Documents required for business clearance reviews.
801.602-82 Documents to submit for legal or technical review--
general.
801.602-83 Documents to submit for legal or technical review--
contract modifications.
801.602-84 Documents to submit for business clearance reviews.
801.602-85 Results of OGC's review.
801.603 Selection, appointment, and termination of appointment.
801.603-1 General.
801.603-70 Representatives of contracting officers.
801.603-71 Representatives of contracting officers; receipt of 
equipment, supplies, and nonpersonal services.
801.670 Special and limited delegation.
801.670-1 Issuing bills of lading.
801.670-3 Medical, dental, and ancillary service.
801.670-4 National Cemetery Administration.
801.670-5 Letters of agreement.
801.680 Contracting authority of the Inspector General.
801.690 VA's COCP.
801.690-1 Definitions.
801.690-2 General.
801.690-3 Responsibility under the COCP.
801.690-4 Selection.
801.690-5 Requirements for contracting authority.
801.690-6 Appointment.
801.690-7 Termination.
801.690-8 Interim appointment provisions.
801.690-9 Distribution of Certificates of Appointment.
801.695 VA's Appointment of HCAs program.
801.695-1 Policy.
801.695-2 Procedures for appointment of HCAs.
801.695-3 Authority of the HCA.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.


801.000  Scope of part.

    This part sets out general Department of Veterans Affairs (VA) 
Acquisition Regulation (VAAR) policies, including information regarding 
the maintenance and administration of the VAAR, acquisition policies 
and practices, and procedures for deviation from the VAAR and the 
Federal Acquisition Regulation (FAR).

Subpart 801.1--Purpose, Authority, Issuance


801.101  Purpose.

    (a) VA established the VAAR to codify and publish uniform policies 
and

[[Page 2349]]

procedures for VA's acquisition of supplies and services, including 
construction.
    (b) The VAAR implements and supplements the FAR.


801.103  Authority.

    The Secretary issues the VAAR under the authority of 40 U.S.C. 
121(c), Title 48 of the Code of Federal Regulations (CFR) 1.301 through 
1.304, and other authorities as cited.


801.104  Applicability.

    (a) Unless otherwise specified in this chapter or excepted by 
statute (i.e., expenditures of the VA Canteen Service) or other VA 
regulations, the FAR and VAAR apply to all VA acquisitions (including 
construction) made with appropriated funds. Supply Fund monies (38 
U.S.C. 8121) and General Post Funds (38 U.S.C. 8302) are appropriated 
funds.
    (b) Use the VAAR and the FAR together. The FAR applies to VA 
acquisitions except as provided in the VAAR.


801.104-70  Exclusions.

    The FAR and VAAR do not apply to purchases and contracts that use 
General Post Funds if using the FAR and the VAAR would infringe upon a 
donor's right to specify the exact item to be purchased and/or the 
source of supply (38 U.S.C. 8303).


801.105  Issuance.


801.105-2  Arrangement of regulations.

    (a) General. The VAAR 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 VAAR 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. Subdivisions may be 
used at the section and subsection level to identify individual 
paragraphs.
    (2) Subdivisions below the section or subsection level consist of 
parenthetical alphanumerics 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 chapter.
    (2) This chapter may be referred to as the Department of Veterans 
Affairs Acquisition Regulation or the VAAR.
    (3) Using the VAAR coverage at 809.106-4(c) as a typical 
illustration, reference to the--
    (i) Part would be ``VAAR Part 809'' outside the VAAR and ``Part 
809'' within the VAAR.
    (ii) Subpart would be ``VAAR Subpart 809.1'' outside the VAAR and 
``Subpart 809.1'' within the VAAR.
    (iii) Section would be ``VAAR 809.106'' outside the VAAR and 
``809.106'' within the VAAR.
    (iv) Subsection would be ``VAAR 809.106-4'' outside the VAAR and 
``809.106-4'' within the VAAR.
    (v) Paragraph would be ``VAAR 809.106-4(c)'' outside the VAAR and 
``809.106-4(c)'' within the VAAR
    (4) Citations of authority (e.g., statutes or Executive orders) in 
the VAAR shall follow the Federal Register form guides.


801.106  OMB approval under the Paperwork Reduction Act.

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521), the Office of Management and Budget (OMB) has approved the 
reporting and recordkeeping provisions that are included in the VAAR 
and has given VA the following approval numbers:

------------------------------------------------------------------------
                                                             Current OMB
   48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
809.106-1..................................................    2900-0418
809.504(d).................................................    2900-0418
813........................................................    2900-0393
832.006-4..................................................    2900-xxxx
832.202-4..................................................    2900-xxxx
836.606-71.................................................    2900-0208
852.207-70.................................................    2900-0590
852.209-70.................................................    2900-0418
852.211-70.................................................    2900-0587
852.211-71.................................................    2900-0588
852.211-72.................................................    2900-0586
852.211-73.................................................    2900-0585
852.214-70.................................................    2900-0593
852.228-71.................................................    2900-0590
852.236-72.................................................    2900-0422
852.236-79.................................................    2900-0208
852.236-80 (Alt. I)........................................    2900-0422
852.236-82 through 852.236-84..............................    2900-0422
852.236-88.................................................    2900-0422
852.236-89.................................................    2900-0622
852.236-91.................................................    2900-0623
852.237-7..................................................    2900-0590
852.270-3..................................................    2900-0589
------------------------------------------------------------------------

Subpart 801.2--Administration


801.201  Maintenance of the FAR.


801.201-1  The two councils.

    Revisions to the FAR are prepared and issued through the 
coordinated action of two councils, the Defense Acquisition Regulations 
Council and the Civilian Agency Acquisition Council. A designee of the 
Office of Management will represent VA on the Civilian Agency 
Acquisition Council.

Subpart 801.3--Department Acquisition Regulations


801.304  Department control and compliance procedures.

    The Assistant Secretary for Management is designated as the 
Department's Chief Acquisition Officer and Senior Procurement Executive 
(SPE). The Deputy Assistant Secretary for Acquisition and Materiel 
Management is designated as the Department's Deputy Senior Procurement 
Executive (DSPE). The DSPE is responsible for review of the VAAR and 
amendments to the VAAR for compliance with FAR 1.304.

Subpart 801.4--Deviations From the FAR or VAAR


801.403  Individual deviations.

    (a) Authority to authorize individual deviations from the FAR and 
VAAR is delegated to the SPE and is further delegated to the DSPE.
    (b) When a contracting officer considers it necessary to deviate 
from the policies in the FAR or VAAR, the contracting officer must 
submit a request to the DSPE for authority to deviate.
    (c) The request to deviate must clearly state the circumstances 
warranting the deviation and the nature of the deviation. The head of 
the contracting activity (HCA) must sign the request.
    (d) The DSPE may authorize individual deviations from the FAR and 
VAAR when an individual deviation is in the best interest of the 
Government. When the DSPE authorizes a deviation, the contracting 
officer must file the authorization in the purchase order or contract 
file.


801.404  Class deviations.

    Authority to authorize class deviations from the FAR and VAAR is 
delegated to the SPE and is further delegated to the DSPE. The DSPE may 
authorize class deviations from the FAR and VAAR when a class deviation 
is in the best interest of the Government. The DSPE must comply with 
the provisions of FAR 1.404 through the SPE.

[[Page 2350]]

Subpart 801.6--Career Development, Contracting Authority, and 
Responsibilities


801.601  General.

    (a) A designating official may appoint a contracting officer under 
FAR 1.603 and VA's Contracting Officer Certification Program (COCP).
    (b) The HCA may delegate micro-purchase authority to VA employees 
under the VA's purchase card program.
    (c) An individual may not commit the Government for purchases of 
supplies, equipment, or services unless the individual has received 
delegated contracting authority. Individuals making such commitments or 
acting beyond the scope of their authority may be held financially 
liable.


801.602  Contracting officers.

    (a) Except as otherwise provided by statute, VA regulations, the 
VAAR, or the FAR, the authority vested in the Secretary to do the 
following is delegated to the SPE and is further delegated from the SPE 
to the DSPE:
    (1) Execute, award, and administer contracts, purchase orders, and 
other agreements (including interagency agreements) for the expenditure 
of funds for construction and the acquisition of personal property and 
services (including architect-engineer services).
    (2) Issue bills of lading.
    (3) Sell personal property.
    (4) Enter into leases, sales agreements, and other transactions.
    (5) Prescribe and publish acquisition policies and procedures.
    (6) Establish clear lines of contracting authority.
    (7) Manage and enhance career development of the procurement work 
force.
    (8) Examine, in coordination with the Office of Federal Procurement 
Policy, the procurement system to determine specific areas where VA 
should establish and apply Government-wide performance standards, and 
to participate in developing Government-wide procurement policies, 
regulations, and standards.
    (9) Oversee the competition advocate program.
    (b) The DSPE may further delegate authority to execute, award, and 
administer contracts, purchase orders, and other agreements to other VA 
officials, such as HCAs and contracting officers, in accordance with 
the COCP.


801.602-3  Ratification of unauthorized commitments.

    (a) This section applies to unauthorized commitments, including any 
commitment made by a contracting officer that exceeds that contracting 
officer's contracting authority and unauthorized commitments made by 
individuals who lack contracting authority.
    (b) A contracting officer must not ratify unauthorized commitments 
made by other VA personnel or by another contracting officer who lacks 
authority without prior approval as specified in paragraphs (b)(1) 
through (b)(3) of this section. The specified approval authorities may 
not be re-delegated.
    (1) At field facilities, for supplies, services (except leases of 
real property), and construction, the approving authority for 
unauthorized commitments made by staff assigned to a field facility is 
the Director of the field facility concerned.
    (2) For VA Central Office (VACO) organizations, for supplies, 
services (except leases of real property), and construction, the 
approving authorities for unauthorized commitments made by staff 
assigned to the Administrations are the respective chief financial 
officers of the Administrations concerned. The approving authority for 
unauthorized commitments made by staff assigned to any other 
organization within VACO is the Deputy Assistant Secretary for 
Acquisition and Materiel Management.
    (3) For unauthorized commitments for leasehold interest in real 
property, the approving authority is:
    (i) The Chief Facilities Management Officer, Office of Facilities 
Management, for unauthorized commitments for 1-5,000 square feet of 
space or for 1-100 parking spaces costing less than $50,000 per annum.
    (ii) The Under Secretary for Health for unauthorized commitments 
for 5,001-20,000 square feet of space or for more than 100 parking 
spaces costing less than $100,000 per annum.
    (iii) The Deputy Secretary for 20,001 square feet of space and 
above or for more than 100 parking spaces costing more than $100,000 
per annum.
    (c) The process for contracting officer requests for ratification 
will be as follows:
    (1) The individual who made the unauthorized commitment will 
furnish the contracting officer with all records and documents 
concerning the commitment and a complete written statement of facts 
that includes the following:
    (i) Why the procurement office was not used.
    (ii) Why the proposed contractor was selected.
    (iii) Other sources that were considered.
    (iv) A description of work to be performed or products to be 
furnished.
    (v) The estimated or agreed contract price.
    (vi) A citation of the appropriation available.
    (vii) A statement of whether the contractor has commenced 
performance.
    (viii) The name of the individual responsible for the unauthorized 
commitment.
    (2) The contracting officer will review the file and forward it to 
the approving authority specified in paragraph (b) of this section with 
any comments or information that the approving authority should 
consider in evaluating the request for ratification. If the approving 
authority determines that a legal review would be desirable, the 
approving authority will coordinate the request for ratification with 
the Office of the General Counsel (OGC) or the Regional Counsel, as 
appropriate.
    (3) If the approving authority authorizes the ratification, the 
approving authority will return the file to the contracting officer for 
issuance of a purchase order or contract, as appropriate.
    (d) If an otherwise proper contract award exceeds the limits of the 
contracting officer's delegated authority, the ratifying contracting 
officer must comply with the above requirements and the approving 
authority must inform the HCA. The HCA will take action to preclude 
future instances of such awards.


801.602-70  General review requirements.

    (a) Contracting officers shall ensure that any document listed 
under 801.602-71 through 801.602-76 that is submitted for technical or 
legal review is submitted through or by an official at least one level 
above the contracting officer.
    (b) Before opening a bid, awarding a contract, or signing a 
contract-related document as specified in 801.602-71 through 801.602-
76, the contracting officer shall ensure that the appropriate VA 
official, including appropriate staff of the Acquisition Resources 
Service regional or central office, has reviewed and concurred with the 
document.
    (c) Before signing a contract for a Veterans Benefits 
Administration field facility for any guidance center or vocational 
rehabilitation service with an anticipated expenditure of $100,000 or 
more, the contracting officer shall ensure that the Director, 
Vocational Rehabilitation and Employment Service, has reviewed and 
approved the solicitation or proposed contract.
    (d) When the following items are for the management, sale, or lease 
of properties acquired by VA after liquidation of a guaranteed, direct,

[[Page 2351]]

acquired, or vendee loan, the review requirements specified in 801.602-
71 through 801.602-76 do not apply:
    (1) Agreements.
    (2) Licenses.
    (3) Easements.
    (4) Deeds.
    (e) If there is insufficient time for the legal review required in 
801.602-75(a)(3), the contracting officer (except contracting officers 
in the Office of Facilities Management) must at least obtain verbal 
concurrence from Acquisition Resources Service staff before issuing a 
change order where:
    (1) The change order (unilateral agreement) has an anticipated 
value of $100,000 or more; or
    (2) The change order is for a time extension of 60 days or more.
    (f) Unless otherwise stated, all dollar values in 801.602-71 
through 801.602-76 are expressed in total dollars involved in the 
acquisition action.
    (1) The contracting officer may not consider the positive and 
negative status of the figures in determining the total dollar values 
involved.
    (2) An acquisition of $550,000 with a trade-in credit of $70,000 
would be valued at $620,000 for legal or technical review purposes 
rather than the net amount of $480,000. An Energy Savings Performance 
Contract requiring payment from savings of $10,000,000 to the 
contractor over the life of the contract would be valued at 
$10,000,000, despite the fact that there is no immediate cost to VA and 
no payment if there are no savings.
    (g) The DSPE may require technical review of any contract-related 
materials, regardless of dollar value.
    (h) Except as set forth in 801.602-73 and 801.602-75, at its 
discretion, the Office of Acquisition and Materiel Management may 
request OGC review.
    (i) The requirements of this section or sections 801.602-71 through 
801.602-76 do not apply to contracts awarded by or on behalf of the VA 
Office of Inspector General.
    (j) Contracting officers and purchase cardholders must ensure 
compliance with separate guidance on information technology (IT) 
tracking and approval prior to processing requests for acquisitions of 
IT and telecommunications software, equipment, and/or services, 
regardless of dollar value.


801.602-71  Basic review requirements.

    Contracting officers must obtain technical review from Acquisition 
Resources Service staff of the documents set forth in column one of 
Table 801.602-71 that have anticipated award values equal to or greater 
than the value in column two.

                            Table 801.602-71
------------------------------------------------------------------------
             Document                 Anticipated contract award value
------------------------------------------------------------------------
(a) Supply or service               $500,000 or more.
 solicitations or quotations
 (except as provided in 801.602-72
 through 801.602-75) (includes
 indefinite quantity, option year,
 and multi-year solicitations or
 quotations where the contracting
 officer reasonably expects
 expenditures of $500,000 or more,
 inclusive of options).
(b) Supply or service               $750,000 or more.
 solicitations or quotations where
 a consolidated acquisition
 activity is performing
 acquisitions for three or more
 physically separated VA medical
 centers (excluding outpatient
 clinics).
(c) Fixed price, sealed bid         $1 million or more.
 construction solicitations, other
 than 8(a) construction
 solicitations.
(d) 8(a) construction               $500,000 or more.
 solicitations and task orders.
(e) Request for Proposal            $500,000 or more.
 (negotiated) construction
 solicitations and task orders.
(f) Proposed task/delivery orders   $500,000 or more.
 and blanket purchase agreements
 (includes orders under Federal
 Supply Schedule contracts).
(g) Proposed cost-reimbursement,    $100,000 or more.
 incentive, time-and-materials,
 and labor-hour contracts (see
 816.102(b).
(h) Utility service agreements....  $50,000 or more.
(i) Solicitations for advisory and  $100,000 or more.
 assistance services (see 837.2).
(j) Proposed letter contracts and   $25,000.
 ensuing formal contracts.
------------------------------------------------------------------------

801.602-72  Exceptions and additional review requirements.

    (a) In addition to the general review requirements in 801.602-71, 
contracting officers must obtain technical reviews from Acquisition 
Resources Service staff of any proposed agreement that is unique, 
novel, or unusual.
    (b) Contracting officers must obtain technical reviews from 
Acquisition Resources Service staff of the following documents relating 
to contracts requiring bonds (see FAR 28.102-1 and 28.203 through 
28.203-5):
    (1) An irrevocable letter of credit.
    (2) A tripartite escrow agreement.
    (3) An individual surety bond.
    (c) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of each proposed novation and 
change-of-name agreement (see FAR Subpart 42.12).
    (d) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of any solicitation or proposed 
contract containing an economic price adjustment clause based on a cost 
index of material or labor (e.g., the urban consumer price index (CPI-
U) (see FAR 16.203-4(d)) or where one of the economic price adjustment 
clauses specified in FAR 16.203-4 are used.
    (e) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of any proposed multi-year contract 
where the cancellation ceiling exceeds 20 percent of the contract 
amount, regardless of the dollar value of the proposed contract (see 
817.105-1(b)).
    (f) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of any proposed solicitation where 
the contract term total of the basic and option periods will exceed 5 
years, regardless of the dollar value of the proposed acquisition (see 
817.204).
    (g) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of a proposed membership agreement 
in a group purchasing organization.
    (h) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of proposed termination settlements 
or determinations of amounts due the contractor under a terminated 
contract that involve the expenditure of $100,000 or more of Government 
funds. Acquisition Resources Service staff shall obtain legal review. 
(See 849.111-70).
    (i) Contracting officers must obtain technical review from 
Acquisition Resources Service staff of each consignment agreement with 
an anticipated expenditure of $250,000 or more per year (except for a 
consignment agreement established under, and provided for in, a Federal 
Supply Schedule contract).

[[Page 2352]]

    (j) Contracting officers, including purchase cardholders, must 
obtain technical and legal review of all proposed contracts for 
conferences where VA's commitment, expenditure, and liability 
(combined) exceed $25,000. This dollar figure is based on the 
combination of all direct costs to VA under the contract (e.g., 
conference rooms, audio-visual charges, refreshments, catering, etc.) 
and all potential liability (e.g., room guarantee liability, 
cancellation costs). Even if there is no direct cost to VA, if the 
proposed contract includes a guarantee on room usage or a cancellation 
fee that could potentially exceed $25,000, the proposed contract 
requires legal and technical review. Signing a contract committing VA 
to hold a conference at a particular hotel is a procurement, and 
procurement laws and regulations must be followed.


801.602-73  Review requirements for scarce medical specialist contracts 
and contracts for health-care resources.

    For contracts to be awarded under the authority of either 38 U.S.C. 
7409 or 38 U.S.C. 8153, contracting officers must obtain technical and 
legal reviews from the Medical Sharing Office, OGC, and Acquisition 
Resources Service staff of the following documents:
    (a) Each competitive solicitation, quotation, proposed contract, or 
agreement with an anticipated contract award value of $1,500,000 or 
more, inclusive of options.
    (b) Each noncompetitive solicitation, quotation, proposed contract, 
or agreement with an anticipated contract award value of $500,000 or 
more, inclusive of options.


801.602-74  Review requirements for an interagency agreement.

    Contracting officers or other staff must obtain technical review 
from Acquisitions, Operations, and Analysis Service staff of the 
following documents:
    (a) Each proposed VA Central Office interagency agreement with 
another Federal agency to be awarded under authority of the Economy 
Act, regardless of dollar value. For the VA Central Office, only the 
DSPE or designee may sign an interagency agreement.
    (b) Each proposed VA field facility interagency agreement with 
another Federal agency awarded under authority of the Economy Act, 
involving an anticipated expenditure of $250,000 or more. A VA field 
facility contracting officer or a contracting officer at the VA 
National Acquisition Center or the Denver Distribution Center may sign 
an interagency agreement if the dollar threshold is within the 
contracting officer's warrant limit.


801.602-75  Review requirements--OGC.

    (a) Contracting officers must obtain legal review or concurrence 
from OGC for the following categories of proposed contractual actions.
    (1) Each contract termination, final decision, cure letter, or 
``show cause'' notice proposed under any contract where the total value 
of the contract is $100,000 or more. A contracting officer may not sign 
or release a document subject to this provision until OGC has 
concurred.
    (2) Each dispute or claim from a contractor involving a potential 
total dollar value of $100,000 or more. A contracting officer may not 
sign or release a document subject to this provision until OGC has 
concurred.
    (3) Each proposed contract modification, including any proposed 
modification to a supply or service contract, where the total value of 
the modification is $100,000 or more (e.g., a modification for a 
$60,000 increase and a $50,000 decrease equals $110,000).
    (4) Each proposed contract modification granting a time extension 
of more than 60 days. The Director, Acquisition Resources Service, may 
waive the pre-approval requirement under this paragraph for an 
individual facility when the Director determines that the facility has 
obtained appropriate ``consideration'' for past time extensions and the 
extensions were otherwise appropriately granted.
    (5) Each proposed modification increasing the value of a letter 
contract, regardless of dollar value.
    (6) Each proposed contract modification for which the contractor 
takes exception to the accord and satisfaction language specified by 
VA. The contracting officer may not execute any proposed contract 
modification under this requirement until the contracting officer 
receives OGC's concurrence in the proposed language.
    (7) An assignment of claims (see FAR Subpart 32.8).
    (8) Each change or revision to a FAR or VAAR provision or clause or 
an internal VA-approved clause (e.g., architect/engineer ``SP'' 
clauses) not specifically authorized by the regulations.
    (9) Each change or revision to a prescribed VA contract form.
    (10) A proposed utility construction or connection contract with an 
anticipated contract award value of $50,000 or more.
    (11) Each proposed novation and change-of-name agreement (see 
842.1203).
    (b) For an action specified in paragraph (a)(1) or (2) of this 
section, OGC may comment or concur in writing or by telephone.
    (c) When a Central Office contracting activity requests legal 
assistance, the contracting officer will brief OGC on the facts and 
points of issue to facilitate prompt resolution.
    (d) For each solicitation or contract awarded and administered by a 
Central Office contracting activity, that contracting activity will ask 
OGC to participate in conferences where legal problems or modifications 
to contract provisions may be considered and in meetings attended by 
legal representatives of private parties or other Government agencies. 
The contracting activity will request assigned procurement counsel 
participation in drafting correspondence involving significant 
controversial or sensitive contractual matters.
    (e) OGC will prepare any response to the Government Accountability 
Office (GAO) on GAO bid protests. (See 833.104).


801.602-76  Business clearance review.

    (a) A business clearance review is a technical review of all 
solicitation and contract award or modification documents immediately 
prior to contract award or modification over the specified dollar 
threshold.
    (b) All VA contracting officers must obtain a business clearance 
review prior to award of any contract, task or delivery order, or 
blanket purchase agreement or execution of any contract modification 
with a value of $5 million or more, or prior to award of any lease with 
a value of $300,000 or more per year.
    (c) The dollar threshold in this paragraph is based on the total 
dollar value of all awards expected under a single solicitation, not 
the value of each individual award under a solicitation. For example, a 
solicitation for home oxygen for a VISN might result in multiple 
awards, each of which has a value of less than $5 million. If the total 
of all awards under that solicitation will exceed $5 million, the 
contracting officer must obtain a business clearance review of the 
entire package, including all proposed individual awards.


801.602-77  Processing solicitations and contract documents for legal 
or technical review--general.

    (a) Under 801.602-70 through 801.602-76, before taking contract 
action, a contracting officer must ensure

[[Page 2353]]

that any required legal or technical review or concurrence is complete. 
Contracting officers shall not award or sign contracts, task or 
delivery orders, blanket purchase agreements, or contract modifications 
prior to receipt of the final legal and technical review. Should the 
contracting officer disagree with the advice provided, the contracting 
officer shall document in the contract file the reasons therefore and 
provide a copy of that document to the reviewing Office of Acquisition 
and Materiel Management office. The contracting officer must fully 
implement any accepted review comments as follows:
    (1) Before opening the bid or proposal for a competitively awarded 
contract.
    (2) Before executing contract documents for a contract modification 
or noncompetitive contract award.
    (b) The contracting officer must advise potential bidders or 
offerors of changes made to the solicitation by issuing an amendment. 
The contracting officer must give bidders and offerors sufficient time 
for evaluation before the bid or proposal opens.


801.602-78  Processing solicitations and contract documents for legal 
or technical review--Veterans Health Administration field facilities, 
Central Office (except Offices of Facilities Management), the National 
Acquisition Center, and the Denver Distribution Center.

    (a) If legal or technical review is required, the documents listed 
in Table 801.602-78 must be forwarded for review and approval as shown 
therein.

                            Table 801.602-78
------------------------------------------------------------------------
            Documents              Person forwarding      Forward to
------------------------------------------------------------------------
(1) Proposed solicitations,       Contracting         Appropriate
 quotations, contract-related      officer.            Acquisition
 documents, and agreements                             Resources central
 specified in Table 801.602.71                         or regional
 and in 801.602-72.                                    office.
(2) Scarce medical specialist     Contracting         Medical Sharing
 and health-care resource          officer.            and Purchase
 solicitations, quotations, and                        Office.
 proposed contracts (i.e.,
 contracts to be awarded under
 the authority of 38 U.S.C. 7409
 or 8153) specified in 801.602-
 73.
(3) Interagency agreements        Approving           DSPE.
 specified in 801.602-74.          official,
                                   contracting
                                   officer.
(4) Proposed contract             Contracting         OGC.
 modifications, proposed           officer.
 contract modifications for
 which the contractor takes
 exception to the accord and
 satisfaction language VA
 specifies, assignment of
 claims, changes to clauses, and
 proposed utility connection
 agreements specified in 801.602-
 75(a)(3) through (a)(7) and in
 801.602-75(a)(9) and (a)(10).
(5) Proposed contract             Contracting         Regional Office of
 terminations, final decisions,    officer.            the General
 cure letters, show cause                              Counsel.
 notices, disputes, and claims
 specified in 801.602-75(a)(1)
 and (a)(2).
------------------------------------------------------------------------

    (b) The director of the Acquisition Resources Service office 
conducting the technical review has authority to determine whether to 
forward documents for legal review.
    (c) When the contractor takes exception to the accord and 
satisfaction language VA specifies in a proposed contract modification, 
the contracting officer must not sign the modification until OGC 
concurs with the language proposed by the contractor.
    (d) The contracting officer either must fax or send via overnight 
mail all of the relevant documents on proposed contract terminations, 
final decisions, cure letters, show cause notices, disputes, and claims 
specified in 801.602-75(a)(1) and (a)(2). OGC will provide concurrence 
or comments either in writing or by telephone. The contracting officer 
must not sign or release a document to the contractor until OGC 
concurs.
    (e) For any VA contract form subject to legal review under 801.602-
75(a)(8), the contracting officer must process the change or revision 
in accordance with VA Manual MP-1, Part II, Chapter 4 and any 
supplements to it (http://www.va.gov/publ/direc/benefits/mp1p2ch4.htm).


801.602-79  Processing solicitations and contract documents for legal 
or technical review--Veterans Benefits Administration.

    (a) A Veterans Benefits Administration contracting officer must 
ensure that proposed solicitations, quotations, contract-related 
documents, and agreements listed in Table 801.602-71 are reviewed by 
the Office of Resource Management prior to document execution. The 
Office of Resource Management must request legal review of all these 
documents.
    (b) A Veterans Benefits Administration contracting officer must 
ensure that proposed solicitations or agreements for guidance center 
and vocational rehabilitation services are reviewed by the Director, 
Vocational Rehabilitation and Employment Service, if there is an 
anticipated expenditure of $100,000 or more.


801.602-80  Processing solicitations and contract documents for legal 
or technical review--Office of Facilities Management.

    An Office of Facilities Management contracting officer must submit 
items specified in 801.602-71, 801.602-72 and 801.602-75 directly to 
OGC for review.


801.602-81  Documents required for business clearance reviews.

    When a bid or offer, proposed contract modification, or proposed 
lease requires a business clearance review under 801.602-76, the 
contracting officer must forward the required documents (see 801.602-
84) and the following information to the appropriate Acquisition 
Resources Service central or regional office (Office of Facilities 
Management contracting officers shall forward the documents to the 
Office of the General Counsel (025)):
    (a) The date on which award is anticipated.
    (b) Results or efforts made to determine whether the contractor is 
responsible under FAR Subpart 9.4.

[[Page 2354]]

    (c) A determination of price reasonableness.
    (d) An explanation (e.g., the source selection decision as 
specified in FAR 15.308) if the contracting officer proposes an award 
to a contractor other than the low responsible bidder or offeror.


801.602-82  Documents to submit for legal or technical review--general.

    Table 801.602-82 specifies the documents that must be submitted 
when a legal or technical review is required.

                            Table 801.602-82
------------------------------------------------------------------------
  Action or document subject to review         Documents to submit
------------------------------------------------------------------------
(a) Proposed construction contract.....  One copy of each solicitation
                                          document, excluding drawings.
                                          Submit not later than the date
                                          on which the contracting
                                          officer furnishes the
                                          documents to prospective
                                          bidders.
(b) Proposed solicitation contract for   One copy of the solicitation or
 scarce medical specialist services or    proposed or contract and
 health-care resources.                   documents required under VA
                                          Manual M-1, Part 1, Chapter
                                          34.
(c) All other proposed solicitations,    One copy of each document to be
 contracts, and agreements.               used in the contract
                                          solicitation or award, and any
                                          other document that supports
                                          the proposed procurement
                                          action. Submit not later than
                                          the date on which the
                                          contracting officer furnishes
                                          the documents to prospective
                                          bidders.
------------------------------------------------------------------------

801.602-83  Documents to submit for legal or technical review--contract 
modifications.

    (a) The documents specified in this section related to proposed 
contract modifications must be submitted to Acquisition Resources 
Service for review under one or more of the following conditions:
    (1) When the total modification value is $100,000 or more.
    (2) When the modification is for a time extension of 60 days or 
more.
    (3) Where the contractor takes exception to VA's accord and 
satisfaction language.
    (b) The contracting officer must submit the following documents for 
review:
    (1) A draft of the proposed modification prepared on SF 30, 
Amendment of Solicitation/Modification of Contract, specifying the 
exact language proposed and describing any change in work, time, or 
cost.
    (2) A statement describing the need for the changed work with any 
back-up documentation, including a copy of the general statement of 
work in the original contract and any existing contract language that 
will be modified.
    (3) A statement addressing whether the proposed modification is 
within the original scope of the contract and specifically addressing 
the facts considered in reaching the conclusion.
    (4) A statement analyzing what necessitated the modification (e.g., 
a design error, technical changes, or medical center requirements).
    (5) The contracting officer's technical representative's (COTR) 
technical evaluation of the proposed change.
    (6) A memorandum from the appropriate office indicating that funds 
are available or a statement concerning the actions that must be taken 
to secure the required funds.
    (7) The names and telephone numbers of the contracting officer and 
COTR.
    (8) Costing information including the following:
    (i) The contractor's cost proposal in the format required by the 
contract.
    (ii) The COTR's independent cost evaluation.
    (iii) The architect/engineer's independent cost evaluation, if 
applicable and available.
    (iv) The contracting officer's Price Negotiation Memorandum under 
FAR 15.406-3.
    (v) Any other relevant costing information, such as independent 
market research, that VA used or will use as negotiation criteria.
    (c) For a proposed modification to an architect/engineer contract, 
the contracting officer must submit for review each document specified 
in paragraph (b) of this section and the following additional 
documents.
    (1) A listing of the fees awarded in the original contract and 
previous modifications.
    (2) For a working drawing contract, a statement regarding the 
actual or estimated cost of the original construction and any estimated 
change to the overall project cost as a result of the proposed 
modification.
    (d) For a modification to a construction contract or, where 
applicable, to an architect/engineer contract, the contracting officer 
must submit for review a copy of the COTR's mark-up of any drawing that 
delineates the proposed changed work, including a copy of any pertinent 
technical specifications. When there is a proposed modification 
involving numerous changes to drawings and specifications for a VA 
Central Office project, the drawings and specifications must be 
available for review in the Office of the Project Director in VA 
Central Office.


801.602-84  Documents to submit for business clearance reviews.

    A contracting officer must submit to Acquisition Resources Service 
(Office of Facilities Management contracting officers shall forward the 
documents to the Office of the General Counsel (025)) for review copies 
of the following documents when a business clearance review is required 
in accordance with 801.602-76:
    (a) The request for contract action, including a justification of 
need (i.e., the using service purchase request).
    (b) The solicitation.
    (c) The abstract of the subject bid or offer.
    (d) Any applicable Price Negotiation Memorandum.
    (e) A statement of the contracting officer's rationale for award.
    (f) Any applicable justification and approval under FAR 6.303 and 
6.304.
    (g) Documents relevant to determining whether the contractor is 
responsible, including:
    (1) Verification that the vendor is not suspended, debarred, or on 
the Department of Health and Human Services Exclusionary List;
    (2) Verification that the vendor has filed any required VETS 100 
report (not required if the acquisition is for a commercial item); and
    (3) For acquisitions exceeding $10 million, the Equal Employment 
Opportunity Clearance.
    (h) Any applicable approved subcontracting plan.
    (i) Documents relevant to price reasonableness.


801.602-85  Results of OGC's review.

    (a) When its review is complete, OGC will advise the appropriate 
Central Office activity or contracting officer that the proposal was 
approved as submitted or provide them with recommended

[[Page 2355]]

changes. If the Central Office activity is notified, the Central Office 
activity will forward the information to the contracting officer.
    (b) When changes are recommended by OGC, if the contracting officer 
concurs, the contracting officer must take immediate action to amend 
the document. If the contracting officer does not concur, the 
contracting officer must discuss the recommended changes with the 
attorney involved and document in the contract file the reasons why the 
contracting officer is not following OGC's recommendations.
    (c) OGC will complete its review as expeditiously as possible, with 
due regard for procurement actions that require an unusually short 
period for completing the procurement.


801.603  Selection, appointment, and termination of appointment.


801.603-1  General.

    VAAR 801.690 through 801.690-9 and 801.670 establish the policy and 
procedures for selecting, appointing, and terminating a contracting 
officer.


801.603-70  Representatives of contracting officers.

    (a) In carrying out the responsibilities of FAR 1.602-2, the 
contracting officer may designate another Government employee or 
another contractor as COTR to perform the functions in this section and 
801.603-71.
    (1) Except as indicated in 801.603-71, a designation under this 
section must be written, must define the scope and limitation of the 
representative's authority, and must be addressed to the COTR with a 
copy forwarded to the contractor.
    (2) The COTR may not re-delegate authority received under this 
paragraph.
    (3) The contracting officer may not authorize a representative to 
make any commitment or change that will affect the price, quantity, 
quality, or delivery terms of a contract.
    (4) A contracting officer acting within his or her warranted 
contracting authority must authorize any change to a contract.
    (b) A contracting officer may authorize his or her technical 
representative to do the following:
    (1) Furnish technical guidance and advice or generally supervise 
the work performed under the contract.
    (2) Take any action authorized in the contract, such as issuing a 
delivery order, rejecting an unsatisfactory item, ordering a 
replacement of an unsatisfactory item (materials or services) or 
declaring a contractor in default on specific delivery orders.
    (i) Except for a contract for blood, the contracting officer may 
delegate this authority only to other Government contracting officers 
under centralized indefinite delivery type contracts and the contract 
will so state.
    (ii) A centralized contract for blood must state that a contracting 
officer at an ordering office may designate representatives and 
alternate representatives to place a delivery order subject to the same 
restrictions in paragraph (b)(3) of this section.
    (3) Place an oral or other informal delivery order for items such 
as, but not limited to, bread, milk, and blood against a local 
indefinite delivery type contract for which there is a blanket purchase 
arrangement and for which funds have been obligated.
    (c) In the administration of research and development contracts, 
any representative appointed under this section must be acceptable to 
the contracting officer and the administration head or staff office 
director concerned.
    (d) When the contracting officer intends to designate a 
representative under this section for a particular solicitation or 
contract, the contracting officer must include the clause in 852.270-1, 
Representatives of Contracting Officers, in the solicitation and 
contract.


801.603-71  Representatives of contracting officers; receipt of 
equipment, supplies, and nonpersonal services.

    (a) Without prior notification to the contractor or vendor, the 
contracting officer may designate other competent personnel to 
represent him or her to receive and inspect supplies, equipment and 
services at a VA facility. The COTR may perform duties such as, but not 
limited to, the following:
    (1) Inspect and certify compliance with the quality and quantity 
requirements of the purchase order or contract.
    (2) Inspect supplies and equipment for condition and quantity and 
accept supplies, equipment, and services, based on quality inspection 
made by another authorized representative.
    (b) The Director, Library Services, VA Central Office, and the 
Chief, Library Service, at a field facility may act as representatives 
of the contracting officer to receive, inspect and accept library 
books, newspapers, and periodicals. Purchase documents will specify 
that delivery will be made directly to the library.


801.670  Special and limited delegation.

    The authority vested in the Secretary to execute, award, and 
administer a contract, purchase order, or other agreement for the 
expenditure of funds to acquire the specific services set forth in 
801.670 through 801.670-4 is delegated to the SPE. The SPE further 
delegates this authority to the DSPE and to employees appointed or 
designated to the positions specified in these sections.


801.670-1  Issuing bills of lading.

    The authority to issue bills of lading previously contained in this 
section is rescinded. Except for individual small package shipments 
(e.g., United Parcel Service, Federal Express, or United States Postal 
Service small package shipments), no VA employee may issue a bill of 
lading or otherwise procure transportation services for goods unless 
the employee has been delegated authority to do so as a warranted 
contracting officer under the VA Contracting Officer Certification 
Program (ref. 801.690). All transportation services for goods, other 
than for small package shipments, require a bill of lading. Except for 
individual small package shipments, individuals with only micro-
purchase authority may not issue bills of lading or otherwise procure 
transportation services. The dollar value of the bill of lading issued 
or transportation services acquired must not exceed the delegated 
authority of the contracting officer. Candidates for appointment as 
transportation contracting officers whose delegated authority will be 
limited to the acquisition of transportation services for goods only 
shall comply with the Education, Experience, and Core Training 
requirements, if any, in Part 102-117 of title 41 Code of Federal 
Regulations, the Federal Management Regulation, rather than the 
requirements in 801.690.


801.670-3  Medical, dental, and ancillary service.

    (a) When medical, dental, and ancillary services under $10,000 per 
authorization are not available from an existing contract or agreement, 
the following VA officials at VA medical facilities may authorize these 
services:
    (1) The Chief of Staff and the physician assigned the 
responsibility for the ambulatory care function.
    (2) Chief, Medical Administration Service.
    (3) Person designated by the facility director to perform medical 
administration functions.
    (b) Forms specified in Part 853 shall be used for ordering services 
under this paragraph from existing contracts.
    (c) The officials named in paragraph (a) of this section may 
designate one or more of their subordinates to exercise

[[Page 2356]]

the authority in paragraph (a) of this section.
    (d) A designation under this section must be in writing and 
specifically set forth the scope and limitations of the designee's 
authority.


801.670-4  National Cemetery Administration.

    The Directors of Logistics Management Service, the Centralized 
Contracting Division, and the Construction Support Division are 
authorized to procure supplies, equipment and non-personal services 
(including construction) for National Cemetery Administration (NCA) 
field facilities and other NCA offices when there is an emergency 
during which the servicing supply organization cannot be used.


801.670-5  Letters of agreement.

    (a) Letters of agreement shall not be used. The authority 
previously contained in this section is rescinded.
    (b) The VA Office of Inspector General may issue contracts for 
commercial items, including services, using a letter format (see FAR 
12.204(a)), provided billing information and required clauses are 
included in the contract. If the dollar value of the acquisition will 
exceed the simplified acquisition threshold, this is a deviation from 
the requirement to use Standard Form 1449 at FAR 12.204(a).


801.680  Contracting authority of the Inspector General.

    (a) Under section 6(a) of Public Law 95-452 (October 12, 1978), the 
Inspector General may do the following:
    (1) Contract or arrange for audits, studies, analyses, and other 
services with public agencies and with private persons.
    (2) Make payments necessary to carry out the provisions of the Act, 
to the extent and in amounts provided in advance by appropriations 
acts.
    (b) In exercising the special authority provided in paragraph (a) 
of this section, the Inspector General may ask the servicing head of 
the contracting activity for assistance in developing appropriate 
contract or agreement documents.
    (c) The FAR applies to contracts made under paragraph (a) of this 
section. Such contracts also are subject to provisions of the VAAR that 
implement and supplement the FAR on matters other than those stemming 
from or related to delegations of the Secretary's contracting 
authority. (For example, management controls and approvals specified in 
Subpart 837.2 will not apply to contract actions under the contract 
authority of the Inspector General.)


801.690  VA's COCP.

    The provisions of 801.690 through 801.690-9 establish the policy 
and procedures for the VA-wide Contracting Officer Certification 
Program (COCP).


801.690-1  Definitions.

    Accredited college or university means a college or university that 
has been accredited by an accrediting agency recognized by the U.S. 
Department of Education (see http://www.ed.gov/admins/finaid/accred/index.html) or accredited by a foreign government.
    ACEP means the Acquisition Continuing Education Program, a program 
to provide VA's acquisition workforce with classroom knowledge to 
further develop their acquisition skills. The program supports VA 
personnel in the GS 1102 contracting series, other contracting officers 
(regardless of General Schedule series), contracting officers' 
technical representatives, and contracting officers' representatives to 
ensure that they meet the continuing education requirements mandated by 
OFPP Policy Letter No. 05-01, Developing and Managing the Acquisition 
Workforce, dated April 15, 2005 (see http://www.whitehouse.gov/omb/procurement/policy_letter_05-01.html) and other official guidance.
    Acquisition Workforce means those VA employees who are classified 
as: GS 1102 contract specialists; GS 1105 purchasing agents; 
contracting officers warranted above the micro-purchase threshold; 
program and project managers and other significant acquisition-related 
positions as otherwise identified by the VA Chief Acquisition Officer; 
contracting officers' technical representatives; and contracting 
officers' representatives. The acquisition workforce also includes a 
limited number of employees that perform significant acquisition-
related responsibilities, (e.g., employees in the GS 345, GS 801, GS 
1101, GS 1106, GS 1170, GS 2001, GS 2003, and GS 2005 job series and 
select program officials).
    Appointment means the delegation of authority to any VA employee to 
enter into, administer, or terminate contracts and to make related 
determinations and findings.
    ATCD means the Acquisition Training and Career Development 
Division.
    Certificate of Appointment as Contracting Officer is a signed 
certificate on Standard Form 1402 used for the written appointment of 
contracting officers that states the scope, limitation, and term of the 
contracting officer's authority.
    CLP means continuous learning points, as provided in OFPP Policy 
Letter 05-01. One CLP is generally equivalent to one hour of classroom 
training.
    COCB means the Contracting Officers Certification Board, a group of 
VA officials, listed at 801.690-3(b), who evaluate and recommend to the 
DSPE individuals for delegation of contracting authority as Level II or 
Level III (Senior Limited or Unlimited) contracting officers.
    COCP means the Contracting Officers Certification Program, VA's 
program established for the selection, appointment, and termination of 
appointment of contracting officers.
    COQS means the Contracting Officer Qualification Statement, a 
document completed by a candidate for a position as contracting officer 
that accompanies the request for contracting authority. The certified 
statement includes information on experience, education, training, and 
pertinent contracting authority information. The COQS is accompanied by 
supporting documentation such as training certificates, copies of prior 
and current warrants, college transcripts, and other relevant 
information.
    Federal Acquisition Certification (see OFPP Policy Letter 05-01, 
paragraph 8) means a certification program developed by the Federal 
Acquisition Institute and OFPP that generally reflects a Government-
wide standard for education, training, and experience leading to the 
fulfillment of core competencies in acquisition-related disciplines.
    Selection means the appointment of an employee as a contracting 
officer. The selection process shall consider the complexity and dollar 
value of the assigned work, the candidate's experience, training, 
education, business acumen, judgment, character, reputation, and 
knowledge of acquisition policies, rules and regulations.
    Skills Currency means the level of knowledge and abilities that a 
GS 1102 contract specialist or a contracting officer attains as the 
result of participating in a minimum of 80 CLPs of continuing education 
or training every two years. The training is intended to ensure that 
the employee maintains current acquisition knowledge and skills, as 
mandated by OFPP Policy Letter No. 05-01 and other official guidance.
    Termination means the revocation or rescission of an appointment as 
contracting officer.


801.690-2  General.

    (a) The VA COCP applies to all programs of VA except for the

[[Page 2357]]

appointment of contracting officers under the Inspector General Act 
(Public Law 95-452) and for contracting officers designated in 801.670 
through 801.670-5. The COCP also applies to VA officials granted 
authority to enter into sales agreements (see separate guidance under 
VA's Directives Management System)
    (b) A Certificate of Appointment is not required for a contracting 
officer designated in 801.670 who exercises special and limited 
delegations of authority.
    (c) The COCP is based on the following levels and types of 
authority:
    (1) Level I. Authority for expenditures at or below the simplified 
acquisition threshold (see FAR 2.101) for open market contracts, 
blanket purchase agreements, basic ordering agreements, and delivery/
task orders against established contracts (except Federal Supply 
Schedule (FSS) contracts), within the specified geographical limits of 
the contracting officer's warrant. For FSS contracts, Level I authority 
includes authority for expenditures up to the maximum order threshold 
of the FSS contract, within the specified geographical limits of the 
contracting officer's warrant. This level was formally titled ``Basic'' 
and any current Basic Level warrant need not be reissued solely to 
change the title.
    (2) Level II. Authority for expenditures at or below $5,000,000 or 
as stated on Standard Form 1402 for open market contracts, blanket 
purchase agreements, basic ordering agreements, and delivery/task 
orders against established contracts, within the specified geographic 
limits of the contracting officer's warrant. This level was formally 
titled ``Intermediate'' and any current Intermediate Level warrant need 
not be reissued solely to change the title.
    (3) Level III (Senior Limited). Authority for expenditures at or 
below the dollar threshold and within the geographical limits specified 
on the contracting officer's warrant, Standard Form 1402. This level 
was formally titled ``Senior Limited'' and any current Senior Limited 
Level warrant need not be reissued solely to change the title.
    (4) Level III (Senior Unlimited). Authority granted to VA's 
contracting officers in contracting activities (e.g., the VA National 
Acquisition Center, Hines, IL, and Acquisition Operations Service, VA 
Central Office, Washington, DC) that are charged with meeting 
Department-wide acquisition needs of VA and its customers. The 
authority is for expenditures at any dollar level without geographical 
restriction. This level was formally titled ``Senior Unlimited'' and 
any current Senior Unlimited Level warrant need not be reissued solely 
to change the title.
    (5) Multi-VISN. Authority at the Level II and Level III (Senior 
Limited) Levels, granted by the DSPE, that permits procurement 
consolidations among Veterans Health Administration VISNs, Veterans 
Benefits Administration Area Offices, and other Government agencies 
that exist outside the contracting officer's normally assigned 
geographical area of appointed authority. Multi-VISN authority is 
generally granted for procurement-specific requirements or to groups or 
consortiums established for regional contracting initiatives.
    (d) Micro-purchase Level. Micro-purchase Level authority, not to 
exceed the micro-purchase threshold (currently $2,500 ($2,000 for 
construction), see FAR 2.101) is separately addressed under VA's 
purchase card program. Under that program, the HCA may delegate 
authority to a VA employee as a purchase cardholder through the 
issuance of VA Form 0242.


801.690-3  Responsibilities under the COCP.

    (a) DSPE. The DSPE is responsible for the following:
    (1) Administering and overseeing the COCP;
    (2) Appointing and terminating Level II and Level III (Senior 
Limited and Unlimited) contracting officers;
    (3) Establishing and developing additional agency-specific training 
and determining the levels of contracting authority needed under the 
COCP; and
    (4) Developing and implementing policy, procedures, and guidance 
for VA's acquisition program.
    (b) The Chief, Acquisition Program Management Division. The Chief, 
Acquisition Program Management Division, serves as the Executive 
Secretary to the COCB and is responsible for the following:
    (1) Coordinating requests for contracting authority with the COCB;
    (2) Proceeding accordingly with appropriate action to carry out the 
decisions of the DSPE and the COCB;
    (3) Maintaining individual records on the appointment and 
termination of appointment of contracting officers. Records on 
contracting officers include HCA certifications and qualification 
statements, Certificates of Appointment, and other supporting 
documentation used to grant authority; and
    (4) Ensuring appropriate and timely disposition of records through 
Office of Acquisition and Materiel Management's Records Control 
Officer.
    (c) The COCB. (1) The Director, Acquisition Resources Service, will 
chair the COCB.
    (2) COCB membership consists of:
    (i) The Chief, Acquisition Program Management Division; and
    (ii) The Director, ATCD.
    (d) HCAs. HCAs are responsible for the following:
    (1) Implementing and maintaining an effective and efficient program 
for the procurement of personal property and nonpersonal services 
required by the activity to which the HCA is assigned.
    (2) Establishing adequate controls to ensure compliance with 
applicable laws and regulations;
    (3) Appointing or terminating the appointment of contracting 
officers at the Micro-purchase and Level I Levels within their assigned 
activity;
    (4) Establishing procedures and maintaining records for the 
appointment and termination of appointment of Level I contracting 
officers and purchase cardholders at the Micro-purchase Level. Records 
maintained on contracting officers shall include the contracting 
authority, certification and qualification statements;
    (5) Recommending to the DSPE the appointment or termination of 
appointment of contracting officers at the Level II and Level III 
(Senior Limited or Unlimited) Levels of authority, certifying the 
candidate's qualifications, and justifying the organizational need;
    (6) Ensuring that all GS 1102 contract specialists and other 
contracting officers meet the minimum core training and continuing 
education requirements; and
    (7) Certifying that the assigned acquisition workforce meets the 
minimum training, education, and skills currency requirements 
prescribed by OFPP and the DSPE.
    (e) VA Acquisition Workforce. All employees identified as members 
of VA's acquisition workforce (see 801.690-1) are responsible for 
maintaining records that include certificates of acquisition training, 
continuing education, college transcripts, work experience, and other 
supporting documentation needed to substantiate successful completion 
of all warrant requirements. These employees shall enroll in VA's 
Center for Acquisition and Materiel Management Education Online (CAMEO) 
and in the Acquisition Career Management Information System (ACMIS), 
the data systems that serve as the repositories of required information 
on VA's acquisition workforce.


801.690-4  Selection.

    (a) The HCA may appoint Level I contracting officers or submit 
written requests to the DSPE for appointment of Level II or Level III 
(Senior Limited or

[[Page 2358]]

Unlimited) contracting officers. A VA official one level above the HCA 
may submit a written request to the DSPE for the appointment of a HCA 
as a contracting officer.
    (b) Appointment can only be requested in those circumstances where 
it can be demonstrated that a valid organizational need exists. In 
making this assessment and justification, the HCA will consider the 
complexity of the work, volume of actions, organizational structure, 
and human resource management actions and forecasts, such as rates of 
retirement, reassignment, and retention.
    (c) The request shall consist of the following:
    (1) Justification for requesting contracting authority to be 
granted;
    (2) Certification that the candidate's experience and training meet 
the established minimum qualifications for the requested contracting 
authority;
    (3) Certification that the candidate has a satisfactory-or-above 
performance rating;
    (4) Certification that the candidate maintains high standards of 
conduct and avoids apparent or actual conflicts of interest, and
    (5) Certification that the candidate has appropriate working 
knowledge of the FAR, VAAR, and other applicable laws, regulations, 
policies and procedures.
    (d) The accompanied COQS shall include the following information:
    (1) Candidate's name, position title, series, grade, and location;
    (2) Candidate's relevant acquisition or business-related experience 
that reflects the required number of years of progressive work 
assignments leading to broader technical abilities;
    (3) Education background, including number of acquisition or 
business-related college credits;
    (4) List of core training requirements or equivalent courses that 
have been successfully completed;
    (5) List of continuing education requirements successfully 
completed within the last two years;
    (6) List of current and prior warrant authorities, limitations, and 
information on termination and cause for termination;
    (7) List of other acquisition related activities or memberships;
    (8) Certification that the statement is accurate and complete to 
the best of the candidate's knowledge; and
    (9) Attached copies of acquisition or business-related training 
certificates, course certificates, and diplomas, transcripts, or 
degrees from accredited colleges or universities.


801.690-5  Requirements for contracting authority.

    (a) Effective January 1, 2007, no individual, regardless of job 
series, may be issued a new contracting officer warrant above the 
micro-purchase threshold unless the individual meets the requirements 
for Federal Acquisition Certification (Certification) for the 
applicable warrant level as specified in OFPP Policy Letter 05-01 and 
other official guidance. A new contracting officer warrant is defined 
in OFPP Policy Letter 05-01 as a warrant issued for the first time at a 
department or agency. Certification will not be required for current 
warranted contracting officers at their current warrant level to retain 
their current warrant, but will be required before a higher level 
warrant can be issued. Certification includes minimum requirements for 
education, training, and experience. A candidate for a warrant must 
have at least a satisfactory-or-above performance rating during the 
most recent performance period.
    (b) Until January 1, 2007, the minimum requirements for qualifying 
as a contracting officer specified in Tables 801.690-5(b)(1) and 
801.690-5(b)(2) shall apply.

                          Table 801.690-5(b)(1)
------------------------------------------------------------------------
                                      For level I        For level II
------------------------------------------------------------------------
(i) Experience..................  6 months of         2 years of
                                   progressive work    progressive work
                                   assignments and     assignments
                                   orientation         within the last 4
                                   within the last 3   years in an
                                   years in an         acquisition-
                                   acquisition-        related field
                                   related field.      leading to
                                                       broader technical
                                                       abilities.
(ii) Education..................  High School         For Grades GS-12
                                   Diploma or          and below, a
                                   General             Bachelor's Degree
                                   Educational         or 24 business's
                                   Development (GED).  related college
                                                       credits from an
                                                       accredited
                                                       college or
                                                       university; or
                                                      For GS 13 and
                                                       above, a
                                                       Bachelor's Degree
                                                       that is
                                                       supplemented by
                                                       or includes 24
                                                       business-related
                                                       college credits
                                                       from an
                                                       accredited
                                                       college or
                                                       university.
(iii) Skills Currency (Minimum    80 CLPs...........  80 CLPs.
 number of CLPs every 2 years).
(iv) Performance................  Satisfactory-or-    Satisfactory-or-
                                   above.              above.
(v) Core Training, as follows     For Level III       For Level III
 (or approved equivalent           (Senior Limited).   (Senior
 courses):                                             Unlimited)
Basic Acquisition Course or       X.................  X.
 Simplified Acquisition
 Procedures Course.
Acquisition Planning I (2 week    ..................  X.
 course).
Contract Formation I............  ..................  X.
Contract Administration I.......  ..................  X.
Negotiation Techniques..........  ..................  X.
Cost Analysis...................  ..................  X.
Price Analysis..................  ..................  X.
Acquisition Planning II.........  ..................  X.
Contract Formation II...........  ..................  X.
Contract Administration II......  ..................  X.
------------------------------------------------------------------------


[[Page 2359]]


                          Table 801.690-5(b)(2)
------------------------------------------------------------------------
                                                         For level III
                                     For level III    (senior unlimited)
                                   (senior limited)        (national
                                                           programs)
------------------------------------------------------------------------
(i) Experience..................  3 years of          6 years of
                                   progressive work    progressive work
                                   assignments in an   assignments in
                                   acquisition-        acquisition, 3
                                   related field       years of which
                                   leading to          were in an
                                   broader technical   acquisition-
                                   abilities within    related field
                                   the last 5 years.   leading to
                                                       broader technical
                                                       ability within
                                                       the last 5 years.
(ii) Education..................  Bachelor's Degree   Bachelor's Degree
                                   that is             that is
                                   supplemented by     supplemented by
                                   or includes 24      or includes 24
                                   business-related    business-related
                                   college credits     college credits
                                   from an             from an
                                   accredited          accredited
                                   college or          college or
                                   university.         university.
(iii) Skills Currency (Minimum    80 CLPS...........  80 CLPs.
 number of CLPs every 2 years).
(iv) Performance................  Satisfactory-or-    Satisfactory-or-
                                   above.              above.
(v) Core Training, as follows
 (or approved equivalent
 courses):
All courses required of a Level   X.................  X.
 II contracting officer as
 specified in Table 801.690-
 5(b)(1).
Intermediate Contract Pricing (2  X.................  X.
 week course).
Government Contract Law (2 week   X.................  X.
 course).
------------------------------------------------------------------------

    (c) Effective January 1, 2007, before an individual can be issued a 
Level I warrant for acquisitions above the micro-purchase threshold, an 
individual will be required to meet the Certification requirements in 
OFPP policy guidance. The minimum education and training requirements 
for a Level I warrant are expected to include a baccalaureate degree or 
24 semester hours of business-related college credits and approximately 
240 CLPs (six weeks) of acquisition-related classroom training.
    (d) Multi-VISN. The HCA shall obtain written concurrence from other 
affected VISNs or Area Offices when requesting Multi-VISN contracting 
authority.
    (e) Core Training. (1) Contracting officers and non-warranted 
contract specialists shall complete the required coursework and on-the-
job training needed to possess the established competencies listed in 
OFPP's Federal Acquisition Institute Contract Specialist Training 
Blueprints (http://www.fai.gov/prodev/contract.htm).
    (2) The Chief, ATCD, oversees the ATP and the 11 core training 
courses listed in Tables 801.690-5(b)(1) and 801.690-5(b)(2).
    (3) Training course equivalency will be determined and approved by 
Chief, ATCD. Candidates should contact the Chief, ATCD, for an 
equivalency determination and must furnish any information or evidence 
necessary to support the request. Appeals of decisions may be made to 
the VA Chief Acquisition Officer and the decisions of the Chief 
Acquisition Officer shall be final.
    (f) Skills Currency. (1) Contracting officers and non-warranted 
contract specialists who have completed the core training requirements 
shall obtain a minimum of 80 CLPs of continuing education or training 
every two fiscal years to stay abreast of current acquisition knowledge 
and skills as mandated by OFPP. The HCA (for Level I contracting 
officers) and the Chief, ATCD (for Level II and Level III contracting 
officers), shall make written determinations each October 1st on 
whether or not the required CLPs, as specified in OFPP guidance, were 
completed during the two prior fiscal years. The HCA shall assign CLP 
values to training taken by Level I contracting officers for training 
that does not have pre-assigned CLP or continuing education unit (CEU) 
values assigned to the training by the provider. The Chief, ATCD, shall 
assign CLP values to training taken by Level II and Level III 
contracting officers for training that does not have pre-assigned CLP 
or continuing education unit (CEU) values assigned to the training by 
the provider. Values shall be assigned based on guidance provided by 
OFPP and the combined efforts of the Federal Acquisition Institute and 
the Defense Acquisition University. Disputes regarding the CLP or CEU 
values assigned to training shall be resolved by the Associate Deputy 
Assistant Secretary for Acquisitions.
    (2) The Chief, ATCD, is responsible for the management of the ACEP, 
the program that assists contracting officers and contract specialists 
to meet the training requirements.
    (3) An expiring warrant will not be re-issued if the contracting 
officer has not met the continuing education or training requirement.
    (g) Education. (1) The 24 business-related college credits shall be 
in any combination of the following fields of study at an accredited 
college or university: Accounting, business, finance, law, contracts, 
purchasing, economics, industrial management, marketing, quantitative 
methods, or organization and management.
    (2) The Chief, ATCD, will make the final determination whether a 
course is accepted as business-related for the purpose of granting 
contracting authority.
    (3) American Council on Education (ACE) credits are not considered 
as college credits until they are converted and included on a 
transcript from an accredited college or university.
    (h) Grandfather Provision for the Education Requirement. (1) VA 
contracting officers, regardless of grade level, who currently hold 
Level I, Level II, or Level III (Senior Limited or Unlimited) warrants 
are considered as having met the Experience, Education, and Core 
Training requirements in Tables 801.690-5(b)(1) and 801.690-5(b)(2) for 
that warrant level. This includes transfers or laterals to other VA 
contracting activities with similar geographical restrictions. 
Contracting officers who are promoted up to a GS-12 can maintain their 
current warrant level authority.
    (2) This Grandfather provision does not cover new VA employees, 
current VA employees who are not warranted, or former VA employees who 
held contracting authority at their previous Federal Government 
agencies or VA positions. VA contracting officers who are promoted to 
GS 13-and-above will no longer be covered by this Grandfather provision 
and, therefore, must meet the current Experience, Education, and Core 
Training requirements for the specific warrant authority that they 
currently hold or to which they wish to be appointed.

[[Page 2360]]

Contracting officers requesting a higher level warrant (e.g., from 
Level I to Level II or from Level III (Senior Limited) to Level III 
(Senior Unlimited)) must also meet the current Experience, Education, 
and Core Training requirement for the specific warrant authority 
requested.
    (3) This Grandfather provision for retaining a contracting 
officer's current warrant authority is voided if the contracting 
officer does not fully meet the minimum Skills Currency requirement 
prior to warrant expiration or when the warrant authority is suspended 
or revoked. The contracting officer will then need to meet all of the 
current warrant prerequisites before a new warrant can be issued or 
before the suspended or revoked warrant can be reinstated.
    (i) The training requirements for contracting officers whose 
delegated authority is limited to the acquisition of transportation 
services, as provided in Part 102-117 of title 41 Code of Federal 
Regulations, the Federal Management Regulation, shall be as specified 
therein.
    (ii) [Reserved]


801.690-6  Appointment.

    (a) Only the DSPE (for Level II and Level III (Senior Limited or 
Unlimited)) and the respective HCA (for Level I) may sign the 
Certificate of Appointment as Contracting Officer. HCAs are authorized 
to grant Micro-purchase Level and Level I contracting authority up to 
the thresholds specified for these authorities at 801.690-2(c). The HCA 
may recommend a candidate to the DSPE for appointment as a Level II or 
Level III contracting officer. Only the DSPE may grant Level II, Level 
III (Senior Limited or Unlimited), and Multi-VISN authority.
    (b) All Certificates of Appointment as Contracting Officers and 
other written documents must clearly state any limitations or 
restrictions on the authority.
    (c) The Privacy Act of 1974 applies to the information collected 
during contracting officer selection and appointment.


801.690-7  Termination.

    (a) The DSPE (for all Levels) or HCA (for Micro-purchase Level and 
Level I) may revoke or rescind the appointment of a contracting officer 
at any time. HCAs may submit a recommendation to revoke or rescind the 
appointment of a contracting officer's Level II or Level III (Senior 
Limited or Unlimited) warrant to the DSPE. Revocation may be based on 
the following circumstances:
    (1) There is no longer a need for the appointment;
    (2) There has been a personnel action such as a resignation, 
retirement, transfer;
    (3) Unsatisfactory performance;
    (4) Alleged official misconduct pending criminal or administrative 
investigations;
    (5) Failure to meet training or skills currency requirements;
    (6) A contracting officer taking an action that exceeds his or her 
authority;
    (7) Blatant disregard for adhering to acquisition regulations, 
policies and procedures; or
    (8) Situations similar to those in paragraphs (a)(1) through (7) of 
this section that may require remedial action.
    (b) The HCA should discuss a termination of contracting authority 
for cause with the servicing Human Resource Management Office to 
determine the impact, if any, on the contracting officer's continued 
employment.
    (c) All changes in the status (e.g., departure; name, position, or 
grade change) of a micro-purchase cardholder or Level I warrant holder 
shall be reported in writing by the individual's supervisor to the HCA 
within five workdays of occurrence. All changes in the status of a 
Level II or Level III (Senior Limited or Unlimited) warrant holder 
shall be reported in writing by the HCA to the DSPE within five 
workdays of occurrence. Level II or Level III (Senior Limited or 
Unlimited) warrants that are terminated, rescinded or superseded should 
be returned to the Director, Acquisition Resources Service (049A5), 
citing the exact reason for the termination, rescission, or 
supersession.


801.690-8  Interim appointment provisions.

    (a) To ensure availability of procurement support, an interim 
appointment may be granted for a limited period of time when a 
candidate does not fully meet the minimum qualifications for 
Experience, Education, or successful completion of all acquisition Core 
Training requirements in Tables 801.690-5(b)(1) or 801.690-5(b)(2), if 
applicable, or as provided in OFPP guidance. All interim appointments 
made after January 1, 2007, for individuals who do not meet the minimum 
Experience, Education, or Core Training requirements for Levels I 
through III shall be signed by the SPE, without power to redelegate, as 
provided in OFPP guidance.
    (1) In a request for an interim appointment, the HCA must include 
the information required by 801.690-4 on the candidate's training, 
experience, performance, and education, and a justification for the 
interim appointment.
    (2) The HCA must ensure that the candidate with interim appointment 
meets the minimum Experience, Education, and Core Training requirements 
within the time specified on the warrant.
    (3) A contracting officer with interim appointment should 
successfully complete all remaining required courses or equivalent 
courses within the time specified on the warrant.
    (b) At the HCA's written request, a permanent warrant may be issued 
during the interim appointment period when the contracting officer has 
satisfactorily met the requirements. The appropriate documentation 
(copies of course certificates) must be submitted with the HCA's 
request.
    (c) An interim appointment may be appropriate for instances such as 
organizational changes or sudden, extreme, and unexpected increases in 
workload complexity and/or volume.
    (d) Interim appointments will not be granted under the following 
circumstances:
    (1) To a candidate who is warranted but does not meet the Education 
or Core Training requirements for higher level (e.g., from Level I to 
Level II) contracting authority (unless waived by the SPE);
    (2) To a candidate who does not have a current record of 
satisfactory-or-above performance; or
    (3) To a contracting officer whose authority has expired and who 
has not met the continuing education requirement during the two 
preceding years.
    (e) Generally, an interim appointment may not exceed one year.


801.690-9  Distribution of Certificates of Appointment.

    (a) The DSPE or HCA will issue an original Certificate of 
Appointment as Contracting Officer to the appointed candidate, who must 
display the Certificate at his or her duty station.
    (b) The HCA shall file a copy of the warrant in the delegation of 
authority file.
    (c) The contracting officer must furnish a copy to the respective 
fiscal activity.
    (d) Each Certificate will be serially numbered, reflecting the 
facility number, the year of issuance (e.g., facility number--year of 
issuance (2 digits)--sequential number, 560-04-10), and have an 
effective and expiration date.

[[Page 2361]]

801.695  VA's Appointment of HCAs Program.


801.695-1  Policy.

    (a) VA's policy is to have a minimum number of HCAs. Generally, 
there will be one HCA per VISN, other major VA organizational element, 
or major acquisition organization. The authority vested in the 
Secretary to select, appoint, and terminate HCAs is delegated to the 
SPE and is further delegated from the SPE to the DSPE.
    (b) Under the FAR at 1.601(a) and 2.101, an HCA is a senior level 
position. The official who occupies this position should have the 
education, training, and experience necessary to make the decisions 
required of an HCA.
    (c) Except as provided in the FAR, an HCA may delegate his or her 
authority to other individuals within the HCA's acquisition activity. 
Such delegations must be in writing and must set forth the specific 
limitations on the designee's authority. The delegation may include 
authority to appoint a contracting officer at the Micro-purchase or the 
Level I Levels (see 801.690-2).


801.695-2  Procedures for appointment of HCAs.

    An HCA must be appointed in writing by the DSPE and in accordance 
with internal VA policy. The written delegation must state any 
limitation on the HCA's authority, other than a limitation contained in 
an applicable law or regulation.


801.695-3  Authority of the HCA.

    (a) The HCA has overall responsibility for managing the procurement 
program assigned to the activity.
    (b) The HCA's level of contracting authority, if any, shall be 
specified in the HCA's appointment letter.
    (c) The HCA has the authority to appoint and terminate contracting 
officers with authority to conduct procurements of up to and including 
simplified acquisition threshold or the maximum order threshold or 
limitation for orders placed against Federal Supply Schedule contracts, 
and to terminate such appointments (Micro-purchase and Level I Levels).

PART 802--DEFINITIONS OF WORDS AND TERMS

Subpart 802.1--Definitions
Sec.
802.101 Definitions.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 802.1--Definitions


802.101  Definitions.

    A/E means architect/engineer.
    Chief Acquisition Officer means the Assistant Secretary for 
Management.
    COTR means Contracting Officer's Technical Representative or 
Contracting Officer's Representative.
    D & S Committee means the VA Debarment and Suspension Committee, a 
committee consisting of the Director, Acquisition Resources Service 
(chair), and representatives of the Office of Management, Office of 
Inspector General, and the program office to which the particular 
debarment or suspension case relates. A representative from OGC will 
serve as legal counsel to the D & S Committee.
    Debarring official means the DSPE, who is also the Deputy Assistant 
Secretary for Acquisition and Materiel Management. Authority to impose 
debarment is delegated to the SPE and is further delegated to the DSPE.
    DSPE means the Deputy Senior Procurement Executive, who is also the 
Deputy Assistant Secretary for Acquisition and Materiel Management. The 
DSPE must be career member of the Senior Executive Service.
    FAR means the Federal Acquisition Regulation.
    GAO means the Government Accountability Office.
    HCA means the Head of the Contracting Activity, an individual 
appointed in writing by the DSPE under VA's Appointment of HCAs Program 
(see 801.695).
    OGC means the Office of the General Counsel.
    SPE means the Senior Procurement Executive who is also the 
Assistant Secretary for Management. The SPE is responsible for the 
management direction of the VA acquisition system. The SPE may further 
delegate authority to the DSPE.
    Suspending official means the DSPE. Authority to impose suspension 
is delegated to the SPE and is further delegated to the DSPE.
    VA means the Department of Veterans Affairs.
    VAAR means the Department of Veterans Affairs Acquisition 
Regulation.
    VISN means Veterans Integrated Service Network, an integrated 
network of VA facilities that are focused on pooling and aligning 
resources to best meet local needs in the most cost-effective manner 
and provide greater access to care.

PART 803--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

Subpart 803.1--Safeguards
Sec.
803.101 Standards of conduct.
803.101-3 Department regulations.
803.104 Procurement integrity.
803.104-7 Violations or possible violations.
Subpart 803.2--Contractor Gratuities to Government Personnel
803.203 Reporting suspected violations of the Gratuities clause.
803.204 Treatment of violations.
Subpart 803.3--Reports of Suspected Antitrust Violations
803.303 Reporting suspected antitrust violations.
Subpart 803.4--Contingent Fees
803.405 Misrepresentations or violations of the Covenant Against 
Contingent Fees.
Subpart 803.5--Other Improper Business Practices
803.502 Subcontractor kickbacks.
803.570 Commercial advertising.
803.570-1 Policy.
803.570-2 Contract clause.
Subpart 803.6--Contracts with Government Employees or Organizations 
Owned or Controlled by Them
803.602 Exceptions.
Subpart 803.7--Voiding and Rescinding Contracts
803.703 Authority.
803.705 Procedures.
Subpart 803.8--Limitation on the Payment of Funds to Influence Federal 
Transactions
803.804 Policy.
803.806 Processing suspected violations.
Subpart 803.70--Contractor Responsibility to Avoid Improper Business 
Practices
803.7000 Display of the VA Hotline poster.
803.7001 Contract clause.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 803.1--Safeguards


803.101  Standards of conduct.


803.101-3  Department regulations.

    (a) Part O of 38 Code of Federal Regulations (CFR) states the 
standards of conduct for all VA employees, including contracting 
officials.
    (b) Subpart B of 38 CFR Part O states the employee financial 
disclosure requirements.


803.104  Procurement integrity.


803.104-7  Violations or possible violations.

    (a) Contracting officers must forward the information required by 
FAR 3.104-7(a)(1) to the HCA. In consultation with

[[Page 2362]]

OGC, the HCA may make the determination and concurrence specified in 
FAR 3.104-7(a)(1).
    (b) Upon receipt of information describing a violation or possible 
violation of subsections 27(a), (b), (c), or (d) of the Office of 
Federal Procurement Policy Act of 1974 (see FAR 3.104-3), the HCA will 
take action in accordance with FAR 3.104-7(b). The HCA must also report 
violations or possible violations to the VA Office of Inspector 
General.
    (c) The authority to make the determinations specified in FAR 
3.104-7(b)(5) and 3.104-7(d)(2)(ii)(B) is delegated to the SPE and is 
further delegated to the DSPE.
    (d) As provided in FAR 3.104-7(f), the HCA may authorize a 
contracting officer to award a contract after notifying the DSPE of the 
circumstances warranting such an award.

Subpart 803.2--Contractor Gratuities to Government Personnel


803.203  Reporting suspected violations of the Gratuities clause.

    (a) Any VA employee must report a suspected violation of the 
Gratuities clause to the contracting officer or a higher level VA 
official.
    (b) The report must identify the contractor and the personnel 
involved, provide a summary of the pertinent evidence and circumstances 
that indicate a violation, and include any other available supporting 
documentation.
    (c) The contracting officer or higher level official must 
supplement the file with appropriate information and promptly forward 
the report to the DSPE, with copies to the VA Office of the Inspector 
General and the Assistant Secretary for Management.


803.204  Treatment of violations.

    In providing the notice and hearing required by FAR 3.204, the SPE 
may make the determinations required by FAR 3.204. This authority is 
further delegated to the DSPE. The DSPE shall use the following 
procedures to determine whether or not a violation of the Gratuities 
clause has occurred:
    (a) Upon receipt of an allegation or evidence of a violation of the 
Gratuities clause, the DSPE shall refer the matter to the D & S 
Committee to conduct a fact-finding. Upon completion of the fact-
finding, the D & S Committee shall present the facts and 
recommendations for further action to the DSPE.
    (b) If the DSPE finds a basis for further action, the D & S 
Committee shall prepare a notice under FAR 3.204 for signature of the 
DSPE. If suspension or debarment is also being considered, the D & S 
Committee shall also follow the procedures contained in 809.4. The 
signed notice will be sent to the last known address of the contractor, 
the contractor's counsel, or agent for service of process, by certified 
mail, return receipt requested, or any other method the provides signed 
evidence of receipt. In the case of a business, the D & S Committee may 
send the notice to any partner, principal, officer, director, owner or 
co-owner, or joint venture.
    (c) If VA does not receive a reply from the contractor within 45 
calendar days of sending the notice, the D & S Committee will prepare a 
recommendation and refer the case to the DSPE for a decision on whether 
or not to take further action under FAR 3.204.
    (d) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice, the D & S Committee must consider the 
information in the reply before the D & S Committee makes its 
recommendation to the DSPE.
    (e) The D & S Committee, upon the request of the contractor, must, 
as soon as practicable, allow the contractor an opportunity to appear 
before the D & S Committee, in person or through a representative, to 
present information or argument. The contractor may supplement the oral 
presentation with written information and argument. The proceeding will 
be conducted in an informal manner and without requirement for a 
transcript. The D & S Committee shall prepare a report of the 
presentation for submission to the DSPE and must consider the 
information presented when making its recommendation to the DSPE.
    (f) If the D & S Committee finds that the contractor's submission 
in opposition to further action under FAR 3.204 raises a genuine 
dispute over facts material to the action, then the D & S Committee 
shall submit to the DSPE the information establishing the dispute of 
material facts. If the DSPE agrees that there is a genuine dispute of 
material facts, the DSPE shall refer the dispute to the VA Board of 
Contract Appeals for resolution under 809.470. The DSPE may reject the 
findings of the fact-finding official only if the findings are clearly 
erroneous or arbitrary and capricious.
    (g) If there are no disputes over material facts or if all disputes 
over material facts have been resolved under 809.470, the DSPE will 
make a decision on the basis of all information available, including 
findings of facts and oral or written arguments presented or submitted 
to the D & S Committee by the contractor. The DSPE should consider any 
mitigating factors, such as those listed at FAR 9.406-1 and 809.406-1, 
prior to making a final decision.

Subpart 803.3--Reports of Suspected Antitrust Violations


803.303  Reporting suspected antitrust violations.

    (a) Any VA employee who suspects or has evidence of possible 
antitrust violations must report the suspected violations, in 
accordance with FAR 3.303, to the VA Office of Inspector General and to 
the Assistant Secretary for Management for review and submission to 
OGC.
    (b) Either the General Counsel or the Inspector General will 
determine whether to submit the case to the U.S. Attorney General.

Subpart 803.4--Contingent Fees


803.405  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    (a) A VA employee who suspects or has evidence of an attempted or 
actual exercise of improper influence, misrepresentation of a 
contingent fee arrangement, or any other violation of the Covenant 
Against Contingent Fees must report the matter to the contracting 
officer or to the VA Office of Inspector General.
    (b) In addition to the requirement in paragraph (a) of this 
section, a contracting officer must report a suspected or actual 
misrepresentation or violation to the DSPE.
    (c) Before taking any administrative action under FAR 3.405, a 
contracting officer must consult with his or her Regional Counsel. A 
contracting officer in the Central Office must consult with OGC.
    (d) Contracting officers shall route any referrals of suspected 
fraudulent or criminal matters to the Department of Justice under FAR 
3.405(b)(4) through OGC or the VA Office of Inspector General, with a 
copy to the Assistant Secretary for Management. The General Counsel or 
the Inspector General will determine whether to forward the referral to 
the Department of Justice.

Subpart 803.5--Other Improper Business Practices


803.502  Subcontractor kickbacks.

    A VA employee who suspects a violation of the Anti-kickback Act 
must report the suspected violation to OGC for review.

[[Page 2363]]

803.570  Commercial advertising.


803.570-1  Policy.

    It is VA policy that contractors will not advertise the award of 
contracts or refer to VA contracts in contractors' commercial 
advertising in such a manner as to state or imply that VA endorses a 
product, project, or commercial line of endeavor. The intent of this 
policy is to preclude the appearance of bias toward any product or 
service.


803.570-2  Contract clause.

    The contracting officer must insert the clause at 852.203-70, 
Commercial advertising, in solicitations and contracts expected to 
equal or exceed the micro-purchase threshold.

Subpart 803.6--Contracts with Government Employees or Organizations 
Owned or Controlled by Them


803.602  Exceptions.

    The authority to authorize an exception to the policy in FAR 3.601 
is delegated to the SPE and is further delegated to the DSPE.

Subpart 803.7--Voiding and Rescinding Contracts


803.703  Authority.

    The authority to make determinations under FAR Subpart 3.7, Voiding 
and Rescinding Contracts, is delegated to the SPE and is further 
delegated to the DSPE.


803.705  Procedures.

    In making a determination to void or rescind a contract, the DSPE 
must follow the procedures of FAR 3.705 and the following:
    (a) Upon receipt of an allegation or evidence of situations meeting 
the provisions of FAR 3.700, the DSPE shall refer the matter to the D & 
S Committee to conduct a finding of facts. Upon completion of the fact-
finding, the D & S Committee shall present the facts and 
recommendations for further action to the DSPE.
    (b) If the DSPE finds a basis for further action, the D & S 
Committee shall prepare a notice under FAR 3.705 for signature of the 
DSPE. If suspension or debarment is being considered, the D & S 
Committee shall also follow the procedures of 809.4. The signed notice 
will be sent to the last known address of the contractor, the 
contractor's counsel, or registered agent, by certified mail, return 
receipt requested. In the case of a business, the D & S Committee may 
send the notice to any partner, principal, officer, director, owner or 
co-owner, or joint venture.
    (c) If VA does not receive a reply from the contractor within 30 
calendar days of receipt of the notice by the addressee, the D & S 
Committee will prepare a recommendation and refer the case to the DSPE 
for a decision on whether or not to take further action under FAR 
3.705.
    (d) If VA receives a reply from the contractor within 30 calendar 
days of receipt of the notice, the D & S Committee must consider the 
information in the reply before the D & S Committee makes its 
recommendation to the DSPE.
    (e) The D & S Committee, upon the request of the contractor, must, 
as soon as practicable, allow the contractor an opportunity to appear 
before the D & S Committee, in person or through a representative, to 
present information or argument. The contractor may supplement the oral 
presentation with written information and argument. The proceeding will 
be conducted in an informal manner and without requirement for a 
transcript. The D & S Committee shall prepare a report of the 
presentation for submission to the DSPE.
    (f) If the D & S Committee finds that the contractor's submission 
in opposition to further action under FAR 3.705 raises a genuine 
dispute over facts material to the action, then the D & S Committee 
shall submit to the DSPE the information establishing the dispute of 
material facts. If the DSPE agrees that there is a genuine dispute of 
material facts, the DSPE shall refer the dispute to the VA Board of 
Contract Appeals for resolution under 809.470. The DSPE may reject the 
findings of the fact-finding official only if the findings are clearly 
erroneous or arbitrary and capricious.
    (g) If there are no disputes over material facts or if all disputes 
over material facts have been resolved under 809.470, the DSPE will 
make a decision on the basis of all information available, including 
findings of facts and oral or written arguments presented or submitted 
to the D & S Committee by the contractor.

Subpart 803.8--Limitation on the Payment of Funds To Influence 
Federal Transactions


803.804  Policy.

    A contracting officer must forward a copy of all contractor 
disclosures furnished under the clause at FAR 52.203-12, Limitations on 
Payments to Influence Certain Federal Transactions, to the Director, 
Acquisition Resources Service, for subsequent submission by the 
Secretary to Congress.


803.806  Processing suspected violations.

    A VA employee must report suspected violations of 31 U.S.C. 1352, 
Limitation on Use of Appropriated Funds to Influence Certain Federal 
Contracting and Financial Transactions, to the Assistant Secretary for 
Management and the VA Office of Inspector General.

Subpart 803.70--Contractor Responsibility To Avoid Improper 
Business Practices


803.7000  Display of the VA Hotline poster.

    (a) Under the circumstances described in paragraph (b) of this 
section, a contractor must display prominently a VA Hotline poster 
prepared by the VA Office of Inspector General in a common work area 
within a business segment performing work under a VA contract.
    (b) A contractor must comply with paragraph (a) of this section 
when all of the following apply:
    (1) The contractor is awarded a VA contract for $500,000 or more 
for supplies or services, or $3 million or more for construction.
    (2) The contractor has not established an internal reporting 
mechanism and program, such as a hotline, by which employees may report 
suspected instances of improper conduct, and instructions that 
encourage employees to make such reports.


803.7001  Contract clause.

    The contracting officer must insert the clause at 852.203-71, 
Display of Department of Veterans Affairs Hotline Poster, in 
solicitations and contracts expected to equal or exceed the dollar 
thresholds established in 803.7000.

PART 804--ADMINISTRATIVE MATTERS

Subpart 804.1--Contract Execution
Sec.
804.101 Contracting officer's signature.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 804.1--Contract Execution


804.101  Contracting officer's signature.

    (a) If a contracting officer's name and title has been typed, 
stamped, or printed on the contract, and that contracting officer is 
not available to sign the contract, another contracting officer, as 
specified in 801.602, may sign the contract.
    (b) The contracting officer who signs the contract must have 
contracting authority to cover the contract to be

[[Page 2364]]

signed and must annotate his or her name and title below his or her 
signature.

Subchapter B--Competition and Acquisition Planning

PART 805--PUBLICIZING CONTRACT ACTIONS

Subpart 805.2--Synopses of Proposed Contract Actions
Sec.
805.202 Exceptions.
805.205 Special situations.
805.207 Preparation and transmittal of synopses.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 805.2--Synopses of Proposed Contract Actions


805.202  Exceptions.

    In accordance with FAR 5.202, the contract actions in 806.302-5 do 
not require synopsizing.


805.205  Special situations.

    (a) A contracting officer may procure paid advertising in a daily 
newspaper circulated in the local area to publicize a proposed 
procurement of A/E services not expected to exceed $10,000. See FAR 
5.101(b)(4)(i) and 5.502(a).
    (b) A contracting officer may procure paid advertising in a daily 
newspaper circulated in the local area or in professional journals to 
publicize a proposed procurement of professional services (e.g., scarce 
medical specialist services, health-care resources, advisory and 
assistance services). See FAR 5.101(b)(4)(i) and 5.502(a).


805.207  Preparation and transmittal of synopses.

    (a) When an A/E evaluation board is ready to advertise for A/E 
services, the board must establish the geographic area within which it 
will consider A/E firms (including joint ventures).
    (b) The geographic area must be large enough to assure selection of 
three to five firms highly qualified for the particular project 
involved, but not so large as to make the evaluation process unduly 
burdensome.

PART 806--COMPETITION REQUIREMENTS

Subpart 806.3--Other Than Full and Open Competition
Sec.
806.302 Circumstances permitting other than full and open 
competition.
806.302-5 Authorized or required by statute.
806.302-7 Public interest.
806.304 Approval of the justification.
Subpart 806.5--Competition Advocates
806.501 Requirement.
806.570 Planning requirements.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 806.3--Other Than Full and Open Competition


806.302  Circumstances permitting other than full and open competition.


806.302-5  Authorized or required by statute.

    (a) Full and open competition need not be provided for when 
awarding:
    (1) Scarce Medical Specialist contracts negotiated under the 
authority of 38 U.S.C. 7409, but only when such contracts are with 
institutions affiliated with VA under 38 U.S.C. 7302. (38 U.S.C. 7409)
    (2) Contracts for health-care resources negotiated under the 
authority of 38 U.S.C. 8153, but only when such contracts are with 
institutions affiliated with VA under 38 U.S.C. 7302, including medical 
practice groups and other approved entities associated with affiliated 
institutions (entities will be approved if determined legally to be 
associated with affiliated institutions), or with blood banks, organ 
banks, or research centers. The justification and approval requirements 
of FAR 6.303 and 806.304 do not apply to such contracts or agreements. 
(38 U.S.C. 8153)
    (3) Contracts for health-care resources, negotiated under the 
authority of 38 U.S.C. 8153, that are not acquired under the authority 
of paragraph (a)(2) of this section, but only when the procurement is 
conducted in accordance with Part 873. The justification and approval 
requirements of FAR 6.303 and 806.304 shall apply to such contracts and 
agreements conducted on a sole-source basis. (38 U.S.C. 8153)
    (b) Various sections of title 38 U.S.C. authorize the Secretary to 
enter into certain contracts and certain types of contracts without 
regard to any other provisions of law. When the contracting officer 
enters into a contract without providing full and open competition for 
any of the following items or services, the contracting officer must 
cite 41 U.S.C. 253(c)(5) and the following authorities:
    (1) For, contracts for orthopedic and prosthetic appliances and 
related services including research, cite 38 U.S.C. 8123. (38 U.S.C. 
8123)
    (2) For contracts to purchase or sell merchandise, equipment, 
fixtures, supplies and services for the operation of the Veterans 
Canteen Service, cite 38 U.S.C. 7802. (38 U.S.C. 7802)
    (3) For contracts or leases for the operation of parking facilities 
established under authority of 38 U.S.C. 8109(b), provided that the 
establishment, operation, and maintenance of such facilities have been 
authorized by the Secretary or designee, cite 38 U.S.C. 8109(f). (38 
U.S.C. 8109)
    (4) For contracts for laundry and other common services, such as 
the purchase of steam, negotiated with non-profit, tax-exempt, 
educational, medical, or community institutions, when specifically 
approved by the Secretary or designee and when such services are not 
reasonably available from private commercial sources, cite 38 U.S.C. 
8122(c). (38 U.S.C. 8122)
    (5) For contracts or agreements with public or private agencies for 
services of translators, cite 38 U.S.C. 513. (38 U.S.C. 513)
    (6) For contracts for nursing home care, cite 38 U.S.C. 1720. (38 
U.S.C. 1720)
    (c) Except for an acquisition under paragraph (a)(2) of this 
section, the contracting officer must provide a justification under FAR 
6.303 and obtain an approval under 806.304 for each acquisition 
described in this section.


806.302-7  Public interest.

    (a) When the contracting officer uses 41 U.S.C. 253(c)(7) to 
support a contract award using other than full and open competition, 
the contracting officer must prepare a Determination and Finding (D&F) 
under FAR 1.7 and a justification under FAR 6.303. The D&F must be 
signed by the Secretary.
    (b) The contracting officer must submit the D&F and justification 
through the HCA to the Agency Competition Advocate for signature by the 
Secretary. The submission must include the date the contracting officer 
expects to award the contract.
    (c) VA must notify Congress 30 days before the expected award date. 
The Agency Competition Advocate is responsible for preparing this 
notice. The contracting officer may not award the contract until 
notified by the Agency Competition Advocate.


806.304  Approval of the justification.

    (a) For a justification other than a class justification specified 
in FAR 6.304(c), Table 806.304-1 provides the authorities who may 
approve a justification:

[[Page 2365]]



                             Table 806.304.1
------------------------------------------------------------------------
                                                           Alternate
    Proposed contract amount           Approving           approving
                                       authority           authority
------------------------------------------------------------------------
(1) Not exceeding $500,000......  The contracting     Not applicable.
                                   officer, as
                                   provided in FAR
                                   6.304(a)(1).
(2) Over $500,000 but not         Contracting         The Agency
 exceeding $10 million.            Activity            Competition
                                   Competition         Advocate (see
                                   Advocate (see       806.501(a)).
                                   806.501(b) and
                                   (c)) unless that
                                   Advocate is the
                                   contracting
                                   officer.
(3) Over $10 million but not      Agency Competition  Not applicable.
 exceeding $50 million.            Advocate.
(4) Over $50 million............  Senior Procurement  Not applicable.
                                   Executive (see
                                   802.100).
------------------------------------------------------------------------

    (b) For class justifications specified in FAR 6.304(c), the 
contracting officer must obtain the approval of the Agency Competition 
Advocate for all proposed justifications with an estimated value of up 
to $50 million. The contracting officer must obtain the approval of the 
SPE for all proposed justifications with an estimated value of more 
than $50 million.

Subpart 806.5--Competition Advocates


806.501  Requirement.

    (a) The Associate Deputy Assistant Secretary for Acquisitions is 
the Agency Competition Advocate. The Agency Competition Advocate may 
further delegate authority to other VA officials in VA Administrations 
and staff offices.
    (b) The Executive Director and Chief Operating Officer, National 
Acquisition Center, is the Contracting Activity Competition Advocate 
for the Center.
    (c) Each HCA (see Subpart 802.1) will serve as the Contracting 
Activity Competition Advocate in all other cases.
    (d) The authority in paragraphs (b) and (c) of this section is not 
delegable.


806.570  Planning requirements.

    (a) Each Contracting Activity Competition Advocate must do the 
following:
    (1) Develop a Competition Plan.
    (2) Incorporate the Plan in the internal operating procedures of 
the facility or organization in which the contracting activity is 
located.
    (3) Obtain the endorsement and support of top level management.
    (4) Ensure that the services and offices that the contracting 
activity supports understand the plan.
    (b) At a minimum, the Competition Plan must include the following:
    (1) Approval requirements for other than full and open competition 
specified in FAR 6.304.
    (2) A description of the synopsis requirements in FAR Subpart 5.2 
to ensure that responsible staff fully understand the advance 
procurement planning that is required.
    (3) A description of how to integrate the Competition Plan into 
advance procurement planning.
    (4) A listing of obstacles to competition and a proposal for 
overcoming them.
    (5) A method for increasing cost competition for contracts and 
competition on other significant factors.

PART 807--ACQUISITION PLANNING

Subpart 807.1--Acquisition Plans
Sec.
807.103 Agency-head responsibilities.
Subpart 807.3--Contractor Versus Government Performance
807.300 Scope of subpart.
807.304-77 Right of first refusal.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 807.1--Acquisition Plans


807.103  Agency-head responsibilities.

    The authority to prescribe procedures in FAR 7.103 is delegated to 
the SPE and is further delegated to the DSPE.

Subpart 807.3--Contractor Versus Government Performance


807.300  Scope of subpart.

    This subpart prescribes the use of VAAR clause at 852.207-70, 
Report of Employment Under Commercial Activities, when contracting for 
commercial services under Office of Management and Budget (OMB) 
Circular A-76 or VA's cost comparison process. The cost comparison 
process is used by VA to determine whether to use commercial or 
Government resources to provide commercial services.


807.304-77  Right of first refusal.

    (a) In addition to the Right of First Refusal of Employment clause 
specified in FAR 52.207-3, the contracting officer must include the 
clause ``Report of Employment Under Commercial Activities'' at 852.207-
70 in all cost comparison solicitations where VA personnel may be 
displaced. This clause is primarily intended to verify that the 
contractor is meeting its obligation to provide Federal workers who are 
adversely affected by the contract award and who are qualified for the 
jobs the first opportunity for employment openings created by the 
contract.
    (b) The Report of Employment Under Commercial Activities clause is 
also prescribed to avoid inappropriate severance payment. To implement 
the clause, the contracting officer (or COTR) must first obtain a list 
of Federal personnel who will be adversely affected as a result of the 
anticipated contract from the servicing Human Resources Service office. 
The list should be requested as soon as a preliminary determination is 
made to contract out a function subject to OMB Circular A-76. 
(Contracting officers may designate a COTR to coordinate the 
information and reporting requirements.)

PART 808--REQUIRED SOURCES OF SUPPLIES AND SERVICES

Sec.
808.002 Priorities for use of Government supply sources.
Subpart 808.4--Federal Supply Schedules
808.402 General.
Subpart 808.8--Acquisition of Printing and Related Supplies
808.802 Policy.

    Authority: 40 U.S.C. 121(c) and (d); and 48 CFR 1.301-1.304.


808.002  Priorities for use of Government supply sources.

    (a) Supplies. (1) As used in FAR 8.002(a)(1)(i), the term ``agency 
inventories'' includes Supply Fund Stock and VA Excess.
    (2) A national committed use contract awarded by the VA National 
Acquisition Center has a priority between wholesale supply sources (FAR 
8.002(a)(1)(v)) and mandatory Federal Supply Schedules (FAR 
8.002(a)(1)(vi)).
    (3) Federal Supply Schedule contracts awarded by the VA National 
Acquisition Center in Federal Supply Classification (FSC) Groups 65 and 
66 shall be mandatory for use by VA and shall have the same order of 
priority as mandatory Federal Supply Schedules

[[Page 2366]]

(FAR 8.002(a)(1)(vi)). VA contracting officers must place orders 
against Federal Supply Schedules contracts awarded by the VA National 
Acquisition Center in FSC Groups 65 and 66 in the following descending 
order of priority:
    (i) Nationally awarded Blanket Purchase Agreements (BPAs), issued 
by the VA National Acquisition Center against Federal Supply Schedules.
    (ii) Multi-VISN, single-VISN, or locally awarded BPAs, issued by 
VISN, regional, or local VA contracting officers against Federal Supply 
Schedules.
    (iii) Federal Supply Schedules without BPAs.
    (4) Indefinite delivery indefinite quantity (IDIQ) contracts, 
awarded by VISN, regional, or local facility VA contracting officers, 
for supplies not covered by national committed use contracts or Federal 
Supply Schedule contracts shall have an order of priority between 
optional use Federal Supply Schedules (FAR 8.002(1)(a)(vii)) and 
commercial sources (including educational and nonprofit institutions) 
(FAR 8.002(1)(a)(viii)). VA contracting officers must place delivery 
orders against IDIQ contracts, awarded by VISN, regional, or a local 
facility contracting officers, for supplies not covered by national 
committed use contracts or Federal Supply Schedule contracts in the 
following descending order of priority:
    (i) VISN or regionally awarded contracts.
    (ii) Locally awarded contracts.
    (5) Open market purchases (purchases not falling within any of the 
higher priorities in paragraphs (a)(2) through (4) of this section) 
have the same priority as commercial sources (including educational and 
nonprofit institutions) (FAR 8.002(1)(a)(viii)).
    (b) Unusual or compelling urgency. The contracting officer may use 
a source lower in priority than as specified in paragraph (a) when the 
need for supplies or services is of an unusual or compelling urgency 
(see FAR 6.302-2). The Contracting Officer must include a justification 
for each deviation in the procurement file.
    (c) Eligible Beneficiaries. (1) A contracting 0fficer may authorize 
an acquisition from the Veterans Canteen Service or a commercial source 
when a VA healthcare official (e.g., social worker, physician) 
determines that personal selection of shoes, clothing, and incidentals 
will result in a therapeutic benefit to an eligible beneficiary.
    (2) The contracting officer must cite Federal Prison Industries, 
Inc., clearance No. 1206 in the purchase document for any purchase from 
a commercial source of dress shoes similar to Federal Prison 
Industries, Inc., Style No. 86-A.

Subpart 808.4--Federal Supply Schedules


808.402  General.

    The Executive Director and Chief Operating Officer, VA National 
Acquisition Center, advertises, negotiates, awards, administers, and 
issues the Federal Supply Schedules for Federal Supply Classification 
Groups 65 and 89 and for cost-per-test services under Group 66.

Subpart 808.8--Acquisition of Printing and Related Supplies


808.802  Policy.

    The Director, Publications Staff, Office of Acquisition and 
Materiel Management, VA Central Office, is the Central Printing 
Authority for VA (see FAR 8.802(b)).

PART 809--CONTRACTOR QUALIFICATIONS

Subpart 809.1--Responsible Prospective Contractors
Sec.
809.104 Standards.
809.104-2 Special standards.
809.106 Preaward surveys.
809.106-1 Conditions for preaward surveys.
Subpart 809.2--Qualifications Requirements
809.201 Definitions.
809.202 Policy.
809.204 Responsibilities for establishment of a qualification 
requirement.
809.206 Acquisitions subject to qualification requirements.
809.206-1 General.
809.270 Qualified products for convenience/labor-saving foods.
Subpart 809.4--Debarment, Suspension, and Ineligibility
809.400 Scope of subpart.
809.402 Policy.
809.404 Excluded Parties List System.
809.405 Effect of listing.
809.405-1 Continuation of current contracts.
809.405-2 Restrictions on subcontracting.
809.406 Debarment.
809.406-1 General.
809.406.3 Procedures.
809.406-4 Period of debarment.
809.407 Suspension.
809.407-1 General.
809.407-3 Procedures.
809.470 Fact-finding procedures.
Subpart 809.5--Organizational and Consultant Conflicts of Interest
809.503 Waiver.
809.504 Contracting officer responsibilities.
809.507 Solicitation provisions and contract clause.
809.507-1 Solicitation provisions.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 809.1--Responsible Prospective Contractors


809.104  Standards.


809.104-2  Special standards.

    (a) For a pre-award survey prescribed by 809.106-1, a contracting 
officer must develop special standards of sanitation applicable to the 
acquisition of subsistence and services prescribed by 809.106-1(a).
    (b) An appropriate specialist will assist the contracting officer 
in developing the special standards under paragraph (a) of this 
section.


809.106  Pre-award surveys.


809.106-1  Conditions for pre-award surveys.

    (a) Except as provided in paragraphs (b) through (e) of this 
section, a committee under the direction of the contracting officer and 
composed of representatives of the medical service or using service 
chiefs or designees appointed by the facility or VISN director will 
conduct a pre-award on-site evaluation of the plant, personnel, 
equipment and processes of the prospective contractor for contracts 
covering the products and services of the following:
    (1) Bakeries.
    (2) Dairies.
    (3) Ice cream plants.
    (4) Laundry and dry cleaning activities.
    (b) Before any inspection, the contracting officer will determine 
whether another VA facility or another Federal agency has recently 
inspected and approved the plant.
    (1) The contracting officer will accept an approved inspection 
report of another VA facility.
    (2) If another Federal agency made a plant inspection not more than 
6 months before the proposed VA contract period, the contracting 
officer may accept an approved inspection report of that other Federal 
agency as satisfactory evidence that the facilities of the bidder meet 
the bid requirements.
    (c) VA will not conduct a pre-award on-site evaluation of a dairy 
plant when VA receives an acceptable bid from a supplier of dairy 
products designated as No.1 in the Federal Specifications if the 
following conditions are met:
    (1) The supplier has received a pasteurized milk rating of 90 
percent or more for the type of product being supplied, on the basis of 
the U.S. Public Health Service milk ordinance and code.

[[Page 2367]]

    (2) The rating is current (not over 2 years old) and has been 
determined by a certified State milk sanitation rating officer in the 
State of origin or by the Public Health Service. The contractor must 
maintain the rating of 90 percent or more during the period of the 
contract.
    (3) The solicitation specifications must include the requirements 
in paragraphs (c)(1) and (2) of this section.
    (d) A dairy plant that does not meet paragraph (c) of this section 
may offer only dairy products designated as No. 2 in the Federal 
Specifications. VA will make an award to such a firm only after it 
completes a pre-award on-site evaluation conducted under paragraph (a) 
of this section.
    (e) Before it makes an open market purchase of fresh bakery 
products (such as pies, cakes, and cookies), VA will inspect and 
evaluate the plant where these products are produced or prepared under 
paragraph (a) of this section. VA will make an on-site evaluation at 
least annually and record the results on VA Form 10-2079, Inspection 
Report of Bakery.

Subpart 809.2--Qualifications Requirements


809.201  Definitions.

    For the purposes of this subpart:
    VA QPL means a VA Qualified Products List, a list of products 
qualified by the VA under VA specifications, or purchase descriptions, 
or commercial item descriptions.
    VISN QPL means a VISN Qualified Products List, a list of products 
qualified by a VISN under VA specifications, or purchase descriptions, 
or commercial item descriptions.


809.202  Policy.

    The HCA may sign a justification required by FAR 9.202(a)(1).


809.204  Responsibilities for establishment of a qualification 
requirement.

    (a) Under FAR Subpart 9.2, VA may create VA QPLs for use on 
individual solicitations or on multiple solicitations issued by one or 
more VA facilities.
    (b) An HCA or designee must support the creation of a VA QPL using 
one or more of the following justifications:
    (1) The time required for testing the product after award would 
unduly delay product delivery.
    (2) The cost of repetitive product testing would be excessive.
    (3) Testing the product would require purchasing an expensive or 
complicated apparatus not commonly available.
    (4) It is in the Government's interest to be assured before 
contract award that the product is satisfactory for its intended use.
    (5) Determining acceptability would require providing product 
performance data to supplement technical requirements in the 
specification.
    (6) Conducting a test would result in substantial or repetitive 
rejections.
    (7) VA cannot economically develop clear, professional 
specifications for the product performance, balance, design, or 
construction, and professional judgment is required to determine 
whether the product is acceptable under VA requirements.
    (c) If VA plans to establish a VA QPL for any given product, the 
contracting officer may limit known suppliers to suppliers whose 
products are covered by a Federal Supply Schedule contract, as provided 
at FAR Subpart 8.4.
    (d) VA will pay the costs to inspect and test a product sample 
submitted under this section.
    (1) The product supplier must pay for the sample and its 
transportation to the place of inspecting and testing.
    (2) After inspection and testing, VA will return any product sample 
to the supplier ``as is'' unless:
    (i) The inspection or test destroys the sample; or
    (ii) The supplier authorizes VA to retain or dispose of the sample.
    (e) Once VA accepts a product for the VA QPL, VA may review the 
product for compliance with the applicable specification at any time.
    (1) Where there is a variance between a VA specification that was 
the basis for the VA QPL and the product furnished by the supplier, the 
supplier must furnish an item that conforms to the VA specification.
    (2) If the supplier fails to or is unable to provide a product that 
conforms to the applicable VA specification, the product will be 
removed from the VA QPL.
    (f) VA's acceptance of a product for listing on the VA QPL does 
not:
    (1) Guarantee that VA will accept the product in any future 
purchase; or
    (2) Constitute a waiver of the specifications as to acceptance, 
inspection, testing, or other provisions of any future contract 
involving the product.


809.206  Acquisitions subject to qualification requirements.


809.206-1  General.

    The HCA may determine that an emergency exists, as provided in FAR 
9.206-1(b).


809.270  Qualified products for convenience/labor-saving foods.

    (a) Each VISN Nutrition and Food Service representative is 
authorized to establish a common VISN QPL for convenience and labor-
saving foods for use at medical facilities within the representative's 
VISN.
    (1) The VISN Nutrition and Food Service representative must notify 
the Director, Nutrition and Food Service, VA Central Office, of the 
establishment or amendment of any VISN QPL.
    (2) To avoid unnecessary duplication within a VISN, for medical 
facilities using an applicable VISN QPL under paragraph (b) of this 
section, the VISN Nutrition and Food Service representative must 
coordinate and consolidate test results and recommendations.
    (b) Each medical facility may:
    (1) Use its VISN QPL; and
    (2) Test food of its choice, provided that the facility submits 
test results to the VISN Nutrition and Food Service representative.
    (c) The VISN representative must provide a copy of each approved 
VISN QPL to the following:
    (1) Each contracting office in the VISN.
    (2) The Director, Nutrition and Food Service, VA Central office.
    (3) Upon request, the Office of Acquisition and Materiel 
Management, VA Central Office.

Subpart 809.4--Debarment, Suspension, and Ineligibility


809.400  Scope of subpart.

    This subpart supplements provisions of the FAR concerning 
procedures and related actions for the debarment and suspension of 
contractors.


809.402  Policy.

    (a) When VA receives information that another agency is pursuing a 
debarment or suspension identical to a VA action against the same 
contractor, the Debarment and Suspension (D & S) Committee will 
coordinate prospective action with the appropriate official of the 
other agency to establish a lead agency.
    (b) The D&S Committee will provide the designated lead agency with 
any information relevant to the action for consideration in the 
decision-making process.
    (c) The D&S Committee will maintain close coordination with the 
appropriate official through the completion a final debarment or 
suspension decision.


809.404  Excluded Parties List System.

    Acquisition Resources Service, Office of Acquisition and Materiel 
Management, is responsible for the actions described in FAR 9.404(c).

[[Page 2368]]

809.405  Effect of listing.

    The authority under FAR 9.405(a), 9.405(d)(2), and 9.405(d)(3) to 
determine whether to solicit from, evaluate bids or proposals from, or 
award contracts to contractors whose names appear on the Excluded 
Parties List System is delegated to the SPE and is further delegated to 
the DSPE.


809.405-1  Continuation of current contracts.

    Authority to make the determinations under FAR 9.405-1 is delegated 
to the SPE and is further delegated to the DSPE.


809.405-2  Restrictions on subcontracting.

    When a subcontract is subject to Government consent, authority to 
make the written determination required under FAR 9.405-2 consenting to 
a contractor's use of a subcontractor who is debarred, suspended, or 
proposed for debarment is delegated to the SPE and is further delegated 
to the DSPE.


809.406  Debarment.


809.406-1  General.

    (a) As provided in FAR 9.406-1(c), authority to determine whether 
to continue business dealings between VA and a contractor debarred or 
proposed for debarment is delegated to the SPE and is further delegated 
to the DSPE.
    (b) For the purposes of FAR 9.406-1, the DSPE is the debarring 
official under the Federal Management Regulation at 41 CFR 102-117.295.
    (c) Additional factors that a debarring official should consider 
before arriving at a debarment decision include the following:
    (1) Whether the contractor had a mechanism, such as a hotline, by 
which employees could have reported suspected instances of improper 
conduct, and instructions in place that encouraged employees to make 
such reports.
    (2) Whether the contractor conducted periodic reviews of company 
business practices, procedures, policies, and internal controls for 
compliance with standards of conduct and the special requirements of 
Government contracting.
    (3) Whether the contractor conducted internal and external audits 
as appropriate.
    (4) Whether the contractor timely reported to appropriate 
Government officials any suspected or possible violations of law in 
connection with Government contracts or any other irregularities in 
connection with such contracts.


809.406-3  Procedures.

    (a) Any individual may submit a recommendation to debar a 
contractor to the DSPE. The recommendation to debar must be supported 
with evidence of a cause for debarment listed in FAR 9.406-2. When the 
DSPE receives a recommendation for debarment, he or she will refer the 
matter to the D & S Committee. If the reporting individual is a VA 
employee and the recommendation to debar is based on possible criminal 
or fraudulent activities, the VA employee must report the circumstances 
to the VA Office of Inspector General before making a recommendation to 
the DSPE.
    (b) When the D & S Committee finds evidence of a cause for 
debarment, as listed in FAR 9.406-2, with or without a recommendation, 
it will conduct a fact-finding and present facts to the debarring 
official.
    (c) If the debarring official finds a basis for proposing a 
contractor for debarment, the D & S Committee will prepare a notice of 
proposed debarment under FAR 9.406-3(c) for the signature of the 
debarring official. The signed notice of proposed debarment will be 
sent to the last known address of the contractor, the contractor's 
counsel, or agent for service of process, by certified mail, return 
receipt requested. In the case of a business, the D & S Committee may 
send the notice of proposed debarment to any partner, principal, 
officer, director, owner or co-owner, or joint venture. The D & S 
Committee concurrently must post notice of proposed debarment to the 
General Services Administration Excluded Parties List System pending a 
debarment decision.
    (d) If VA does not receive a reply from the contractor within 45 
calendar days of sending the notice of proposed debarment, the D & S 
Committee will prepare a recommendation and refer the case to the 
debarring official for a decision on whether or not to debar based on 
the information available.
    (e) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice of proposed debarment, the D & S Committee 
must consider the information in the reply before the D & S Committee 
makes its recommendation to the debarring official.
    (f) The D & S Committee, upon the request of the contractor 
proposed for debarment, must, as soon as practicable, allow the 
contractor an opportunity to appear before the D & S Committee to 
present information or argument in person or through a representative. 
The contractor may supplement the oral presentation with written 
information and argument. The proceeding will be conducted in an 
informal manner and without requirement for a transcript. The D & S 
Committee shall prepare a report of the proceeding for the debarring 
official.
    (g) If the D & S Committee finds that the contractor's submission 
in opposition to the debarment raises a genuine dispute over facts 
material to the proposed debarment and the debarment action is not 
based on a conviction or civil judgment, then the D & S Committee shall 
submit to the debarring official the information establishing the 
dispute of material facts. If the debarring official agrees that there 
is a genuine dispute of material facts, the debarring official shall 
refer the dispute to the VA Board of Contract Appeals for resolution 
pursuant to 809.470.
    (h) If there are no disputes over material facts, the debarment 
action is based on a conviction or civil judgment, or all disputes over 
material facts have been resolved pursuant to 809.470, the debarring 
official will make a decision on the basis of all information 
available, including findings of facts and oral or written arguments 
presented or submitted to the D & S Committee by the contractor. The D 
& S Committee must update the status of the action on the General 
Services Administration Excluded Parties List System.


809.406-4  Period of debarment.

    (a) Except in an unusual circumstance, the period of debarment will 
not exceed three years. The debarring official will base the period of 
debarment on the circumstances surrounding the cause for debarment.
    (b) The DSPE may remove a debarment, amend its scope, or reduce the 
period of debarment based on a D & S Committee recommendation if:
    (1) VA has debarred the contractor;
    (2) The action is indicated after the DSPE reviews documentary 
evidence submitted by or on behalf of the contractor setting forth the 
appropriate grounds for granting relief. Appropriate grounds include 
newly discovered material evidence, reversal of a conviction, bona fide 
change of ownership or management, elimination of the cause for which 
debarment was imposed, or any other appropriate grounds.


809.407  Suspension.


809.407-1  General.

    (a) As provided in FAR 9.407-1(d), authority to determine whether 
to continue business dealings between VA and a suspended contractor is 
delegated

[[Page 2369]]

to the SPE and is further delegated to the DSPE.
    (b) For the purposes of FAR 9.407-1, the DSPE is the suspending 
official under the Federal Management Regulation at 41 CFR 102-117.295.


809.407-3  Procedures.

    (a) Any individual may submit a recommendation to suspend a 
contractor to the DSPE. The recommendation to suspend must be supported 
with evidence of a cause for suspension listed in FAR 9.407-2. When the 
DSPE receives a recommendation for suspension, he or she will refer the 
matter to the D&S Committee. If the reporting individual is a VA 
employee and the recommendation to suspend is based on possible 
criminal or fraudulent activities, the VA employee must report the 
circumstances to the VA Office of Inspector General before making a 
recommendation to the DSPE.
    (b) When the D&S Committee finds evidence of a cause for 
suspension, as listed in FAR 9.407-2, with or without a recommendation, 
it will conduct a fact-finding and present facts and recommendations to 
the suspending official.
    (c) If the suspending official finds a basis for suspending a 
contractor, the D&S Committee will prepare a notice of suspension under 
FAR 9.407-3(c) for the signature of the suspending official. The signed 
notice of suspension will be sent to the last know address of the 
contractor, the contractor's counsel, or agent for service of process, 
by certified mail, return receipt requested. In the case of a business, 
the D&S Committee may send the notice of suspension to any partner, 
principal, officer, director, owner or co-owner, or joint venture. The 
D&S Committee concurrently must post notice of suspension to the 
General Services Administration Excluded Parties List System pending 
completion of investigation and any ensuing legal proceedings.
    (d) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice of suspension, the D&S Committee must 
consider the information in the reply before the Committee makes 
further recommendations to the suspending official. The D&S Committee, 
upon the request of a suspended contractor, must, as soon as 
practicable, allow the contractor an opportunity to appear before the 
D&S Committee to present information or argument in person or through a 
representative. The contractor may supplement the oral presentation 
with written information and argument. The proceeding will be conducted 
in an informal manner and without requirement for a transcript. The D&S 
Committee shall prepare a report of the proceeding for the suspending 
official.
    (e) In actions not based on an indictment, if the D&S Committee 
finds that the contractor's submission in opposition to the suspension 
raises a genuine dispute over facts material to the suspension, the D&S 
Committee shall submit to the suspending official the information 
establishing the dispute of material facts. However, the D&S Committee 
must first coordinate any further proceeding regarding the facts in 
dispute with the Department of Justice or with a State prosecuting 
authority in a case involving a State jurisdiction. VA will take no 
further action to determine disputed material facts pursuant to this 
section or 809.470 if the Department of Justice or a State prosecuting 
authority advises VA that additional proceedings to make such a 
determination would prejudice Federal or State legal proceedings.
    (f) If the suspending official agrees that there is a genuine 
dispute of material facts, the suspending official shall refer the 
dispute to the VA Board of Contract Appeals for resolution pursuant to 
809.470.


809.470  Fact-finding procedures.

    The provisions of this section constitute the procedures to be used 
to resolve genuine disputes of fact pursuant to 809.406-3 and 809.407-3 
of this chapter. The Chair of the VA Board of Contract Appeals shall 
appoint a member of the Board to conduct the fact-finding. OGC shall 
represent VA at any fact-finding hearing and may present witnesses for 
VA and question any witnesses presented by the contractor. The hearings 
shall be conducted in Washington, DC, unless the appointed member of 
the VA Board of Contract Appeals determines otherwise. The proceedings 
before the fact-finder will be limited to a finding of the facts in 
dispute, as determined by the debarring or suspending official. The 
fact-finder will establish the date for the fact-finding hearing, 
normally to be held within 45 working days of the submission of the 
dispute to the Board.
    (a) The Government's representative and the contractor will have an 
opportunity to present evidence relevant to the facts at issue. The 
contractor may appear in person or through a representative at the 
fact-finding hearing. The contractor may submit documentary evidence, 
present witnesses, and confront any person the agency presents.
    (b) Witnesses may testify in person. Witnesses will be reminded of 
the official nature of the proceedings and that any false testimony 
given is subject to criminal prosecution. Witnesses are subject to 
cross-examination. Hearsay evidence may be presented and will be given 
appropriate weight by the fact-finder.
    (c) The proceedings shall be transcribed and a copy of the 
transcript shall be made available at cost to the contractor upon 
request, unless the contractor and the fact-finder, by mutual 
agreement, waive the requirement for a transcript.
    (d) The fact-finder shall determine the disputed fact(s) by a 
preponderance of the evidence. As required by FAR 9.406-3(d)(2)(i) and 
9.407-3(d)(2)(i), written findings of fact shall be prepared by the 
fact-finder. A copy of the findings of fact shall be provided to the 
debarring or suspending official, the Government's representative, and 
the contractor.

Subpart 809.5--Organizational and Consultant Conflicts of Interest


809.503  Waiver.

    The HCA is delegated authority to waive any general rule or 
procedure of FAR Subpart 9.5. As provided at FAR 9.503, this authority 
may not be redelegated.


809.504  Contracting officer responsibilities.

    (a) A contracting officer must determine whether awarding a 
contract will result in an actual or potential conflict of interest for 
the contractor.
    (1) The contracting officer will make a conflict of interest 
determination after reviewing information submitted by offerors, 
evaluating information gathered under FAR 9.506, and exercising his or 
her own judgment.
    (2) In evaluating possible organization conflicts of interest, the 
contracting officer may obtain the advice of legal counsel and the 
assistance of technical specialists.
    (b) If the contracting officer determines that there is no way to 
avoid or mitigate an organizational conflict of interest arising from a 
contract award, the contracting officer may disqualify the offeror from 
award under FAR 9.504(e).
    (c) Even if awarding a contract will result in an organizational 
conflict of interest, the contracting officer may request a waiver from 
his or her HCA if awarding the contract is in the best interests of the 
Government.
    (1) Before granting a waiver request under this paragraph, the HCA 
must obtain the concurrence of OGC.
    (2) If the HCA grants a waiver request, the contracting officer may 
set contract

[[Page 2370]]

terms and conditions to reduce any organizational conflict of interest 
to the greatest extent possible.
    (d) In any solicitation for the services addressed at FAR 9.502, 
the contracting officer must require that each offeror submits a 
statement with its offer disclosing all facts relevant to an existing 
or potential organizational conflict of interest involving the 
contractor or any subcontractor during the life of the contract (see 
809.507-1(b) and 852.209-70).


809.507  Solicitation provisions and contract clause.


809.507-1  Solicitation provisions.

    (a) While conflicts of interest may not presently exist, award of 
certain types of contracts may create potential future organizational 
conflicts of interest (see FAR 9.508 for examples). If a solicitation 
may create a potential future organizational conflict of interest, the 
contracting officer must insert a provision in the solicitation 
imposing an appropriate restraint on the contractor's eligibility for 
award of contracts in the future. Under FAR 9.507-1, the restraint must 
be appropriate to the nature of the conflict and may exclude the 
contractor from award of one or more contracts in the future.
    (b) The clause at 852.209-70, Organizational Conflicts of Interest, 
must be included in any solicitation for the services addressed in FAR 
9.502.

PART 811--DESCRIBING AGENCY NEEDS

Sec.
811.001 Definitions.
Subpart 811.1--Selecting and Developing Requirements Documents
811.103 Market acceptance.
811.103-70 Technical industry standards.
811.104 Use of brand name or equal purchase descriptions.
811.104-70 Brand name or equal purchase descriptions.
811.104-71 Purchase description clauses.
811.104-72 Brand name or equal component parts.
811.104-73 Bid samples.
811.104-74 Bid evaluation and award.
811.104-75 Procedure for negotiated procurements.
811.105 Items peculiar to one manufacturer.
811.107 Contract clauses.
Subpart 811.2--Using and Maintaining Requirements Documents
811.202 Maintenance of standardization documents.
811.204 Contract clause.
Subpart 811.4--Delivery or Performance Schedules
811.404 Contract clause.
Subpart 811.5--Liquidated Damages
811.501 Policy.
811.503 Contract clause.
Subpart 811.6--Priorities and Allocations
811.602 General.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.


811.001  Definitions.

    For the purposes of this part:
    Brand name product means a commercial product described by brand 
name and make or model number or other appropriate nomenclature by 
which the product is offered for sale to the public by the particular 
manufacturer, producer or distributor.
    Salient characteristics means those particular characteristics that 
specifically describe the essential physical and functional features of 
the material or service required. They are features that are identified 
in the specifications as a mandatory requirement that a proposed 
``equal'' product or material must possess for the bid to be considered 
responsive.

Subpart 811.1--Selecting and Developing Requirements Documents


811.103  Market acceptance.


811.103-70  Technical industry standards.

    Where items are required to conform to technical industry 
standards, such as those adopted by: Underwriters Laboratories, Inc.; 
Factory Mutual Laboratories; American Gas Association; American Society 
of Mechanical Engineers; National Electrical Manufacturers Association; 
American Society of Heating, Refrigerating and Air-Conditioning 
Engineers; or similar organizations, where such standards are generally 
recognized and accepted in the industry involved, the invitation for 
bids, request for proposals or request for quotations will so state. In 
no instance, where there is a multiple choice of laboratories, shall 
the invitation for bid, request for proposal, or request for quotation 
indicate that the label or certificate of only one such laboratory is 
acceptable. The contracting officer shall include the provision at 
852.211-72, Technical Industry Standards, in solicitations requiring 
conformance to technical industry standards unless comparable 
provisions are contained in the item specification.


811.104  Use of brand name or equal purchase descriptions.


811.104-70  Brand name or equal purchase descriptions.

    (a) The specification writer may use purchase descriptions that 
contain references to one or more brand name products only in 
accordance with 811.104-71 through 811.104-75.
    (b) Purchase descriptions that contain references to one or more 
brand name products must be followed by the words ``or equal,'' except 
when the acquisition of a specific brand name is fully justified under 
FAR Subpart 6.3 and 806.3. If more than one brand name is acceptable, 
the contracting officer should list the known acceptable brand name 
products in the solicitation.
    (c) Where a ``brand name or equal'' purchase description is used, 
the contracting officer must give bidders an opportunity to offer 
products other than those specifically referenced by brand name. 
Following bid opening or receipt of offers, the contracting officer 
must determine if non ``brand name'' substitute products fully meet the 
salient characteristics listed in the solicitation.
    (d) When using a ``brand name or equal'' purchase description, the 
specification writer must set forth those salient physical, functional, 
or other characteristics of the referenced products that are essential 
to the minimum needs of the Government. For example, when 
interchangeability of parts is required, the specification writer must 
specify this requirement. The purchase description must contain the 
following information to the extent available:
    (1) Complete common generic identification of the item required.
    (2) Applicable model, make, or catalog number for each brand name 
product referenced and identity of the commercial catalog in which it 
appears.
    (3) Name of manufacturer, producer, or distributor of each brand 
name product referenced (and address if not well known).
    (4) Any other information necessary to describe the item required.
    (e) When necessary to adequately describe the item required, the 
contracting officer may use an applicable commercial catalog 
description or pertinent extract if the description is identified in 
the solicitation as being that of the particular named manufacturer, 
producer, or distributor. The contracting officer must insure that a 
copy of any catalog referenced (except a parts catalog) is available on 
request for review by bidders at the purchasing office.
    (f) Except as noted in paragraph (d) of this section, the 
specification writer must not include in a purchase description either 
minimum or maximum restrictive dimensions, weights, materials, or other 
salient characteristics that are unique to a

[[Page 2371]]

brand name product or that would tend to eliminate competition or other 
products that are only marginally outside the restrictions. However, 
the specification writer may include in a purchase description 
restrictive dimensions, weights, materials, or other salient 
characteristic if:
    (1) The user determines in writing that the restrictions are 
essential to the Government's requirements;
    (2) The specification writer includes the brand name of the product 
in the purchase description; and,
    (3) The contracting officer makes all other determinations required 
by 811.105.
    (g) The contracting officer must include in the contract file, as 
appropriate, written justifications for using the ``brand name or 
equal'' description, the contracting officer's determinations, and 
bidder submissions.


811.104-71  Purchase description clauses.

    (a) When a solicitation uses ``brand name or equal'' purchase 
descriptions, the contracting officer must include in the solicitation 
the clause at 852.211-73, Brand Name or Equal, and the provision set 
forth at FAR 52.214-21, Descriptive Literature. The contracting officer 
must review the requirements at FAR 14.202-5 when using the descriptive 
literature provision.
    (b) When a ``brand name or equal'' purchase description is included 
in an invitation for bids, the contracting officer must insert the 
following after each item so described in the solicitation, for 
completion by the bidder:

Bidding on:

 Manufacturer name-----------------------------------------------------

 Brand-----------------------------------------------------------------

 No.-------------------------------------------------------------------


811.104-72  Limited application of brand name or equal.

    If the contracting officer determines that the clause at 852.211-
73, Brand Name or Equal, applies to only certain line items of a 
solicitation, the requirements of 811.104-71(b) apply to those line 
items and the contracting officer must include a statement in the 
solicitation as follows:

    The clause entitled ``Brand Name or Equal'' applies only to the 
following line items: [List the line items to which the clause 
applies]


811.104-73  Bid samples.

    (a) When a solicitation contains ``brand name or equal'' purchase 
descriptions, the contracting officer must not require a bidder who 
offers brand name products, including component parts, referenced in 
the descriptions to furnish bid samples of the referenced brand name 
products.
    (b) A solicitation may require the submission of bid samples in the 
case of a bidder offering ``or equal'' products. If bid samples are 
required, the contracting officer must include in the solicitation the 
provision set forth at FAR 52.214-20, Bid Samples.
    (c) A bidder must furnish all descriptive literature in accordance 
with and for the purpose set forth in the ``Brand Name or Equal'' 
clause, 852.211-73(c)(1) and (c)(2), even though bid samples may not be 
required.


811.104-74  Bid evaluation and award.

    (a) A bid offering products that differ from brand name products 
referenced in a ``brand name or equal'' purchase description must be 
considered for award if the contracting officer determines in 
accordance with the terms of the clause at 852.211-73, Brand Name or 
Equal, that the offered products are clearly identified in the bid and 
are equal in all material respects to the products specified.
    (b) In award documents, the contracting officer must include, or 
incorporate by reference, an identification of the specific products 
that the contractor is to furnish. The identification must include any 
brand name and make or model number, descriptive material, and any 
modifications of brand name products specified in the bid. This 
requirement also applies when the descriptions of the end items contain 
``brand name or equal'' purchase descriptions of component parts or of 
accessories related to the end item, and the clause at 852.211-73, 
Brand Name or Equal, was applied to the component parts or accessories 
(see 811.104-72).


811.104-75  Procedure for negotiated procurements.

    (a) The specification writer and contracting officer must use the 
policies and procedures prescribed in 811.104-70 through 811.104-74 as 
a guide in developing adequate purchase descriptions for negotiated 
procurements.
    (b) The contracting officer may adapt the clause at 852.211-73, 
Brand Name or Equal, for use in negotiated procurements. When use of 
the clause is not practical (as may be the case in unusual and 
compelling urgency purchases), the contracting officer must inform 
suppliers that proposals offering products different from the products 
referenced by brand name will be considered if the contracting officer 
determines that the offered products are equal in all material respects 
to the products referenced. The contracting officer must place 
decisions under this paragraph in writing for the contract file, as 
appropriate.


811.105  Items peculiar to one manufacturer.

    (a) Except as provided in paragraph (b) of this section, the 
specification writer must write specifications in accordance with FAR 
11.002.
    (b)(1) When the specification writer determines that a particular 
physical or functional characteristic of only one product will meet the 
minimum requirements of VA (see FAR 11.105) or that a ``brand name or 
equal'' purchase description must be used (see FAR 11.104), the 
specification writer must identify the item(s) for the contracting 
officer and do one of the following:
    (i) Provide a full written justification of the reason the 
particular characteristic is essential to the Government's 
requirements.
    (ii) Explain why the ``brand name or equal'' purchase description 
is necessary.
    (2) The contracting officer makes the final determination whether 
restrictive specifications or ``brand name or equal'' purchase 
descriptions will be included in the solicitation.


811.107  Contract clauses.

    (a) Insert the clause at 852.211-70, Service Data Manuals, 
paragraph (a), in solicitations and requests for proposals for 
technical medical and other technical equipment and devices issued by a 
field facility unless the facility Chief, Engineering Service, 
indicates that the service data manuals are not needed. The purpose of 
the clause is to require the manufacturer to provide VA a manual or 
groups of manuals that will allow for the in-house repair of the 
equipment purchased.
    (b) Insert the clause at 852.211-70, Service Data Manuals, 
paragraph (b), in solicitations and requests for proposals for 
mechanical equipment (other than technical medical and other technical 
equipment and devices) issued by a field station.

Subpart 811.2--Using and Maintaining Requirements Documents


811.202  Maintenance of standardization documents.

    (a) Military and departmental specifications. Contracting officers 
may, when it is advantageous to VA, use these specifications when 
procuring supplies and equipment costing less than the simplified 
acquisition threshold. When purchasing items of perishable subsistence, 
contracting officers may take into account only

[[Page 2372]]

those exemptions set forth in paragraphs (b)(2) and (b)(3) of this 
section.
    (b) Nutrition and Food Service specifications. (1) VA has adopted 
for use in the procurement of packinghouse products the purchase 
descriptions and specifications set forth in the Institutional Meat 
Purchase Specifications (IMPS) and the IMPS General Requirements, which 
have been developed by the U.S. Department of Agriculture. Purchase 
descriptions and specifications for dairy products, poultry, eggs, 
fresh and frozen fruits and vegetables, as well as certain packinghouse 
products selected from the IMPS especially for VA use, are contained in 
Part IV of the Federal Supply Catalog, Stock List, FSC Group 89, 
Subsistence, Publication No. C8900-SL.
    (2) The military specifications for meat and meat products 
contained in Part IV of the Federal Supply Catalog, Stock List, FSC 
Group 89, Subsistence, must be used by VA only when purchasing such 
items of subsistence from the Defense Logistics Agency (DLA). Military 
specifications for poultry, eggs, and egg products contained in Part IV 
of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
may be used when purchasing either from DLA or from local dealers.
    (3) Except as authorized in Part 846, a contracting officer must 
not deviate from the specifications contained in Part IV of the Federal 
Supply Catalog, Stock List, FSC Group 89, Subsistence, and the IMPS 
without prior approval from the DSPE.
    (4) Items of meat, cured pork and poultry purchased under the 
Subsistence Prime Vendor national contract or other local procurement 
sources should be purchased via Commercial Item Descriptions (CID) that 
require all products meet USDA Grading standards and/or the IMPS as 
applicable.
    (c) Department of Veterans Affairs specifications. (1) The 
Director, Publications Staff, is responsible for developing, 
publishing, and distributing VA specifications covering printing and 
binding.
    (2) VA specifications, as they are revised, are placed in stock in 
the VA Forms and Publications Depot. The contracting officer may 
requisition facility requirements for these specifications from that 
source.
    (d) Government paper specification standards. (1) Invitations for 
bids, requests for proposals, purchase orders, or other procurement 
instruments covering the purchase of paper stocks to be used in 
duplicating or printing, or which specify the paper stocks to be used 
in buying printing, binding, or duplicating, must require that the 
paper stocks be in accordance with the Government Paper Specification 
Standards issued by the Congressional Joint Committee on Printing.
    (2) All binding or rebinding of books, magazines, pamphlets, 
newspapers, slip cases, and boxes must be procured in accordance with 
Government Printing Office (GPO) specifications and must be procured 
from the servicing GPO Regional Printing Procurement Office or, when 
appropriate, from commercial sources.
    (3) There are three types of binding/rebinding: Class A (hard 
cover); Perfect (glued); and Lumbinding (sewn). The most suitable type 
of binding must be procured to satisfy the requirements, based upon the 
intended use of the bound material.


811.204  Contract clause.

    Insert the clause at 852.211-75, Product Specifications, when 
product specifications are cited in an invitation for bids or a request 
for proposals.

Subpart 811.4--Delivery or Performance Schedules


811.404  Contract clause.

    When delivery is required by or on a particular date for f.o.b. 
destination contracts, the contracting officer must add a statement 
following the Time of Delivery clause in FAR 52.211-8 that the delivery 
date specified is the date by which the shipment is to be delivered, 
not the shipping date. In f.o.b. origin contracts, the contracting 
officer must add a statement following this clause that the date 
specified is the date shipment is to be accepted by the carrier.

Subpart 811.5--Liquidated Damages


811.501  Policy.

    The contracting officer must not routinely include a liquidated 
damages provision in supply or construction contracts, regardless of 
dollar amount. The decision to include liquidated damages provisions 
must conform to the criteria in FAR 11.501. In making this decision, 
the contracting officer must consider whether the necessity for timely 
delivery or performance as required in the contract schedule is so 
critical that a probable increase in contract price is justified. The 
contracting officer must not use a liquidated damages provision for any 
of the following reasons:
    (a) As insurance against selection of a non-responsible bidder.
    (b) As a substitute for efficient contract administration.
    (c) As a penalty for failure to perform on time.


811.503  Contract clause.

    When the contracting officer determines that the Liquidated Damages 
clause prescribed in FAR 52.211-11 or 52.211-12 must be used and where 
partial performance by the contractor may be to the advantage of the 
Government, the contracting officer must include the clause in 852.211-
74, Liquidated Damages, in the contract.

Subpart 811.6--Priorities and Allocations


811.602  General.

    (a) Priorities and allocations of critical materials are controlled 
by the Department of Commerce. Essentially, priorities and allocations 
of critical materials are restricted to projects having a direct 
connection with supporting current defense needs. VA is not authorized 
to assign a priority rating to its purchase orders or contracts 
involving the acquisition or use of critical materials.
    (b) When it has been technically established that it is not 
feasible to use a substitute material, the Department of Commerce has 
agreed to assist the VA in obtaining critical materials for maintenance 
and repair projects. The Department of Commerce will also, when 
possible, render assistance in connection with the purchase of new 
items, which may be in short supply because of their use in connection 
with the defense effort.
    (c) A contracting officer having problems acquiring critical 
materials must ascertain all the facts necessary to enable the 
Department of Commerce to render assistance to VA in acquiring these 
materials. The contracting officer must submit a request for assistance 
to the DSPE containing the following information:
    (1) A description of the maintenance and repair project or the new 
item.
    (2) The critical material and the amount required.
    (3) The contractor's sources of supply, including any addresses. If 
the source is other than the manufacturer or producer, also list the 
name and address of the manufacturer or producer.
    (4) The VA contract or purchase order number.
    (5) The contractor's purchase order number, if known, and the 
delivery time requirement as stated in the solicitation or offer.
    (6) The additional time the contractor claims is necessary to 
deliver the

[[Page 2373]]

materials if priority assistance is not provided.
    (7) The nature and extent of the emergency that will be generated 
at the station, such as any of the following:
    (i) Damage to the physical plant.
    (ii) Impairment of the patient care program.
    (iii) Creation of safety hazards.
    (iv) Any other pertinent condition that could result because of 
failure to secure assistance in obtaining the critical materials.
    (8) If applicable, a statement that the item required is for use in 
a construction contract that was authorized by the Chief Facilities 
Management Officer, Office of Facilities Management, to be awarded and 
administered by the facility contracting officer.

PART 812--ACQUISITION OF COMMERCIAL ITEMS

Subpart 812.1--Acquisition of Commercial Items--General
Sec.
812.102 Applicability.
Subpart 812.3--Solicitation Provisions and Contract Clauses for the 
Acquisition of Commercial Items
812.301 Solicitation provisions and contract clauses for the 
acquisition of commercial items.
812.302 Tailoring of provisions and clauses for the acquisition of 
commercial items.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 812.1--Acquisition of Commercial Items--General


812.102  Applicability.

    (a) This part shall be used for the acquisition of supplies and 
services that meet the definition of commercial items at FAR 2.101.
    (b) Contracting officers shall use the policies in this part in 
conjunction with the policies and procedures for the solicitation, 
evaluation, and award prescribed in Parts 813, Simplified Acquisition 
Procedures, 814, Sealed Bidding, and 815, Contracting by Negotiation, 
as appropriate for the particular acquisition.
    (c) Contracts for the acquisition of commercial items are subject 
to the policies of other parts of this chapter. When a policy in 
another part of this chapter differs from a policy in this part, this 
Part 812 applies to the acquisition of commercial items.

Subpart 812.3--Solicitation Provisions and Contract Clauses for the 
Acquisition of Commercial Items


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

    (a) Regardless of provisions in other parts of the VAAR, 
contracting officers must use only those provisions and clauses in this 
part when acquiring commercial items.
    (b) Contracting officers may use the provisions and clauses in the 
following VAAR sections, as appropriate, in requests for quotations, 
solicitations, and contracts:
    (1) 852.203-70, Commercial advertising.
    (2) 852.203-71, Display of Department of Veterans Affairs hotline 
poster.
    (3) 852.207-70, Report of employment under commercial activities.
    (4) 852.209-70, Organizational conflicts of interest.
    (5) 852.211-71, Special notice.
    (6) 852.211-72, Technical industry standards.
    (7) 852.211-73, Brand name or equal.
    (8) 852.211-75, Product specifications.
    (9) 852.214-70, Caution to bidders--bid envelopes.
    (10) 852.214-71, Restrictions on alternate item(s).
    (11) 852.214-72, Alternate item(s).
    (12) 852.214-73, Alternate packaging and packing.
    (13) 852.214-74, Bid samples.
    (14) 852.216-70, Estimated quantities.
    (15) 852.228-71, Indemnification and insurance.
    (16) 852.229-70, Sales and use taxes.
    (17) 852.233-70, Protest Content/Alternative Disputes Resolution.
    (18) 852.233-71, Alternate Protest Procedure.
    (19) 852.237-7, Indemnification and Medical Liability Insurance.
    (20) 852.237-70, Contractor responsibilities.
    (21) 852.246-70, Guarantee.
    (22) 852.246-71, Inspection.
    (23) 852.246-72, Frozen processed foods.
    (24) 852.252-70, Solicitation provisions or clauses incorporated by 
reference.
    (25) 852.270-1, Representatives of contracting officers.
    (26) 852.270-2, Bread and bakery products--quantities.
    (27) 852.270-3, Purchase of shellfish.
    (28) 852.271-72, Time spent by counselee in counseling process.
    (29) 852.271-73, Use and publication of counseling results.
    (30) 852.271-74, Inspection.
    (31) 852.271-75, Extension of contract period.
    (c) When appropriate, the contracting officer may use the clauses 
in the following VAAR sections in requests for quotations, 
solicitations, and contracts for the acquisition of commercial items if 
the contracting officer determines that the use is consistent with 
customary commercial practices:
    (1) 852.211-70, Service data manuals.
    (2) 852.211-74, Liquidated damages.
    (d) All requests for quotations, solicitations, and contracts for 
commercial item services to be provided to beneficiaries must include 
by reference the clause at 852.271-70, Nondiscrimination in Services 
Provided to Beneficiaries.
    (e) Micro-purchases that use the procedures of this part in 
conjunction with Part 813 do not require clauses unless the contracting 
officer determines that the use of clauses serves the Government's best 
interest.
    (f) When soliciting for commercial services or the use of medical 
equipment or space under the authority of part 873 and 38 U.S.C. 8151-
8153, the provisions and clauses in the following VAAR sections may be 
used in accordance with the prescriptions contained therein or 
elsewhere in the VAAR:
    (1) 852.273-70, Late offers.
    (2) 852.273-71, Alternative negotiation techniques.
    (3) 852.273-72, Alternative evaluation.
    (4) 852.273-73, Evaluation--health-care resources.
    (5) 852.273-74, Award without exchanges.


(38 U.S.C. 8151-8153)


812.302  Tailoring of provisions and clauses for the acquisition of 
commercial items.

    (a) Contracting officers may tailor solicitations to be 
inconsistent with customary commercial practice if they prepare and 
obtain approval of a waiver under paragraph (c) of this section.
    (b) The contracting officer must prepare the waiver in accordance 
with FAR 12.302(c). The waiver is subject to the tailoring prohibitions 
in FAR 12.302(b)(1) through 12.302(b)(6).
    (c) The contracting officer must obtain approval for waivers from 
the following:
    (1) The Chief, Acquisition Assistance Division, for individual 
contracts.
    (2) The Chief, Acquisition Program Management Division, for a class 
of contracts.
    (d) Contracting officers must submit waiver requests no later than 
the solicitation issue date.
    (e) Contracting officers must retain approved requests in the 
contract file.

[[Page 2374]]

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

PART 813--SIMPLIFIED ACQUISITION PROCEDURES

Subpart 813.1--Procedures
Sec.
813.106 Soliciting competition, evaluation of quotations or offers, 
award and documentation.
813.106-3 Award and documentation.
813.106-70 Oral purchase orders.
Subpart 813.3--Simplified Acquisition Methods
813.302 Purchase orders.
813.302-5 Clauses.
813.307 Forms.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 813.1--Procedures


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


813.106-3  Award and documentation.

    The contracting officer may record a quotation on an Abstract of 
Offers (SF 1409 or 1419), the purchase request if space permits, or 
other supplemental sheet or form, such as VA Form 10-2237b, Request for 
Dietetic Supplies.


813.106-70  Oral purchase orders.

    When advantageous to VA, the contracting officer may use an oral 
purchase order for transactions not in excess of $2,500. This 
limitation does not apply to delivery orders against existing 
contracts, e.g., delivery orders against Federal Supply Schedule 
contracts. The contracting officer must assign a purchase order number 
to the transaction. A copy of any electronically generated purchase 
order may be used as a property voucher and receiving report to 
document receipt.

Subpart 813.3--Simplified Acquisition Methods


813.302  Purchase orders.


813.302.5  Clauses.

    When using the VA Form 90-2138 or 90-2138-ADP for maintenance 
contracts involving services performed on Government property that have 
the potential for property damage and liability claims, the contracting 
officer must insert in the purchase order the Contractor's 
Responsibilities clause found at 852.237-70. Applicable maintenance 
contracts include, but are not limited to, window washing, pest 
control, and elevator maintenance.


813.307  Forms.

    (a) The following forms provide a purchase or delivery order, 
vendor's invoice, and receiving report:
    (1) VA Form 90-2138, Order for Supplies or Services.
    (2) VA Form 90-2139, Order for Supplies or Services (Continuation).
    (3) VA Form 90-2138-ADP, Purchase Order for Supplies or Services.
    (4) VA Form 2139-ADP, Order for Supplies and Services 
(Continuation).
    (b) The contracting officer may use the forms specified in 
paragraphs (a)(1) through (a)(4) of this section instead of OF 347, 
Order for Supplies or Services, OF 348, Order for Supplies or Services 
Schedule--Continuation, and SF 1449, Solicitation/Contract/Order for 
Commercial Items.
    (c) The contracting officer or other properly delegated official 
(see 801.670-3) may use the following order forms when ordering the 
indicated medical, dental, and ancillary services totaling up to 
$10,000 per authorization when such services are not available under 
existing contracts:
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record Authorization and Invoice for 
Outpatient Service.
    (d) In authorizing patient travel as set forth in VA manual MP-1, 
Part II, Chapter 3, the contracting officer or other properly delegated 
official (see 801.670-3) may use VA Form 10-2511, Authority and Invoice 
for Travel by Ambulance or Other Hired Vehicle, as provided by that 
manual.
    (e) The contracting officer must use SF 182, Request, 
Authorization, Agreement, and Certification of Training, for 
procurement of training.
    (f) The contracting officer must use VA Form 10-2421, Prosthetics 
Authorization for Items or Services, for indicated services not in 
excess of $300.

PART 814--SEALED BIDDING

Subpart 814.1--Use of Sealed Bidding
Sec.
814.104 Types of contracts.
814.104-70 Fixed-price contracts with escalation.
Subpart 814.2--Solicitation of Bids
814.201 Preparation of invitations for bids.
814.201-6 Solicitation provisions.
814.203 Methods of soliciting bids.
814.203-1 Transmittal to prospective bidders.
814.204 Records of invitations for bids and records of bids.
814.208 Amendment of invitation for bids.
Subpart 814.3--Submission of Bids
814.301 Responsiveness of bids.
814.302 Bid submission.
814.304 Submission, modification, and withdrawal of bids.
Subpart 814.4--Opening of Bids and Award of Contract
814.401 Receipt and safeguarding of bids.
814.402 Opening of bids.
814.403 Recording of bids.
814.404 Rejection of bids.
814.404-1 Cancellation of invitations after opening.
814.404-2 Rejection of individual bids.
814.404-70 Questions involving the responsiveness of a bid.
814.407 Mistakes in bids.
814.407-3 Other mistakes disclosed before award.
814.407-4 Mistakes after award.
814.408 Award.
814.408-70 Award when only one bid is received.
814.408-71 Recommendation for award (construction).
814.409 Information to bidders.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.
Subpart 814.1--Use of Sealed Bidding
814.104 Types of contracts.
814.104-70 Fixed-price contracts with escalation.

    When fixed price contracts with escalation are authorized under 
816.102(a), a contracting officer must comply with FAR 16.203-1 through 
16.203-4.

Subpart 814.2--Solicitation of Bids


814.201  Preparation of invitations for bids.

    (a) An invitation for bids for supplies, equipment, and services 
must be serially numbered at the time of issue. Numbers assigned 
locally must consist of the facility or VA National Acquisition Center 
division number, the serial number of the invitation, and the fiscal 
year in which the VA facility issues the invitation, e.g., 533-24-05 
for the 24th invitation issued by VA facility 533 in Fiscal Year 2005. 
A series beginning with the number 1 must be started each fiscal year. 
Numbers assigned from a national register may be sequential, without 
regard to year, and use whatever numbering system assigned by the 
national system.
    (1) An invitation for bid for supplies, equipment, and services, 
that is numbered locally, must be numbered in the series of the year in 
which it is issued if it is issued, accepted, and becomes a contract in 
the same fiscal year but, because of procurement lead time, will not be 
performed until the next fiscal year.
    (2) An invitation for bid, that is numbered locally, must be 
numbered in the next fiscal year series if it is issued

[[Page 2375]]

in one fiscal year but the contract will become effective and will be 
performed only in the next fiscal year.
    (b) An invitation for a construction contract must bear the 
applicable invitation for bid number and the project number, if 
assigned.
    (c) An invitation for bid containing a summary bid request must 
include the following statement:

    `The award will be made on either an individual item basis or 
summary bid basis, whichever results in the lowest cost to the 
Government. Therefore, to assure proper evaluation of all bids, a 
bidder quoting a summary bid price must also quote a price on each 
individual item included in the summary bid price.'

    (d) When a contracting officer determines that it will be to the 
Government's advantage to make an award by group or groups of items, 
the contracting officer must include a provision for the award by group 
or groups of items in the invitation for bids. This may apply when the 
items in the group or groups are readily available from sources to be 
solicited; and one of the following apply:
    (1) It is desirable to award a minimum number of contracts.
    (2) Furniture or fixtures are required for a single project and 
uniformity of design is desirable.
    (3) The articles required will be assembled and used as a unit.
    (e) A solicitation for a construction contract must contain a 
statement on the order of priority in which VA will award any 
alternative bid items, based on the relative importance of the items, 
VA's cost estimate, and the amount of funds available, when the 
following apply:
    (1) VA intends to make a single aggregate award for all items in 
the solicitation within certain fiscal limitations.
    (2) The solicitation asks for prices on an item and alternate item 
basis.
    (f) A bid item schedule in a solicitation issued in compliance with 
paragraph (e) of this section should be structured substantially as 
follows:

    A single award will be made on Item No. 1, but in the event the 
offer exceeds the funds available, a single award will be made on 
Item No. 2 or Item No. 3, in that order, based on available funding. 
Offerors should quote a price on each item listed.
    Item No. 1--Furnish all labor, material, equipment, etc., to 
paint Buildings No. 1, 2, and 3: $--------.
    Alternate items in order of priority:
    Item No. 2--Furnish all labor, material, equipment, etc., to 
paint Buildings No. 1 and 2: $--------.
    Item No. 3--Furnish all labor, material, equipment, etc., to 
paint Building No. 1: $--------.

814.201-6  Solicitation provisions.

    (a) The contracting officer must prominently place the provision 
entitled ``Caution to Bidders--Bid Envelopes,'' as set forth in 
852.214-70, in all invitations for bids where bid submissions are by 
other than electronic means.
    (b) In an invitation for bid for supplies, equipment, or services 
(other than construction), the contracting officer must define the 
extent to which VA will authorize and consider alternate bids. VA will 
consider for acceptance an alternate specified on construction projects 
only as a part of the basic item.
    (1) When VA will consider an alternate item only if no bids or 
insufficient bids are received on an item desired, the contracting 
officer must include the provision set forth in 852.214-71, 
Restrictions on Alternate Item(s), in the invitation.
    (2) When VA will consider an alternate item on an equal basis with 
the item specified, the contracting officer must include the provision 
set forth in 852.214-72, Alternate Item(s), in the invitation.
    (3) In addition to the provision referenced in paragraph (b)(1) or 
(2) of this section, the contracting officer must include the provision 
set forth in 852.214-73, Alternate Packaging and Packing, in the 
invitation when bids will be allowed on different packaging, unit 
designation, etc.
    (c) When the contracting officer determines that samples are 
necessary to the proper awarding of a contract, the contracting officer 
must include the provision set forth in 852.214-74, Bid Samples, in the 
solicitation, along with the provision in FAR 52.214-20, Bid Samples.


814.203  Methods of soliciting bids.


814.203-1  Transmittal to prospective bidders.

    The contracting officer should include either a bid envelope or OF 
17, Sealed Bid Label, with each invitation for bids furnished by mail 
or hand delivered to prospective bidders.


814.204  Records of invitations for bids and records of bids.

    (a) The issuing office must establish and maintain a single 
register on a fiscal year basis for all solicitations. For each 
invitation to bid or request for proposal, the register must include 
the following:
    (1) Bid or proposal number.
    (2) Date of issue.
    (3) Date of opening.
    (4) Commodity or service involved.
    (5) Disposition (i.e., contract number or purchase order number or, 
when applicable, no award).
    (b) Maintenance of the contract file prescribed by Part 804 and 
retention of canceled Invitation for Bid files will fulfill the 
requirements set forth in FAR 14.204(b).


814.208  Amendment of invitation for bids.

    The contracting officer must send amendments to holders of drawings 
and specifications by certified mail, return receipt requested, or any 
other method that provides evidence of receipt. The contracting officer 
may send amendments by telegram, facsimile, or other method of rapid 
delivery that provides evidence of receipt, if time does not permit 
mailing.

Subpart 814.3--Submission of Bids


Sec.  814.301  Responsiveness of bids.

    Where a contracting officer cannot administratively determine, in 
accordance with FAR 14.301, the timeliness of the submission of a bid, 
modification, or withdrawal, the contracting officer must submit the 
matter through the DSPE to the Comptroller General for a decision. The 
submission must include copies of all pertinent papers.


814.302  Bid submission.

    A bid hand-carried by the bidder or his agent will be considered 
late unless delivered to the addressee designated in the bid invitation 
before the time set for opening.


814.304  Submission, modification, and withdrawal of bids.

    (a) A notification to late bidders must specify the final date by 
which VA must receive evidence. This date must be within the time 
allowed by the apparent low bidder for acceptance of the low bidder's 
bid.
    (b) All bids received by mail or delivered in person by the bidder 
(or telegram where authorized) must be time and date stamped 
immediately upon receipt at the VA facility mail room and in the office 
of the addressee designated in the invitation.

Subpart 814.4--Opening of Bids and Award of Contract


814.401  Receipt and safeguarding of bids.

    The contracting officer is designated as the official to open bids 
for identification, as provided in FAR 14.401.


814.402  Opening of bids.

    (a) The contracting officer must serve as, or designate, a bid 
opening officer, and must also designate a recorder.

[[Page 2376]]

    (b) If a bid bond is required, the bid opening officer must read 
aloud the form and amount of bid security and the name of the surety. 
The recorder must record this information.


814.403  Recording of bids.

    (a) The recorder must transcribe the information required for bid 
evaluation on the appropriate Abstract of Offers form (SF 1409 or OF 
1419). The evaluation data may be recorded on supplemental sheets or 
forms such as VA Form 10-2237b, Request for Dietetic Supplies, provided 
that any supplemental sheets or forms are covered by one of the forms 
authorized for recording bid or price data.
    (b) The bid opening officer must comply with the instructions in 
FAR 14.403 and certify on the abstract the date and hour at which the 
bids were opened. Where erasures, strikeovers, or changes in price are 
noted at the time of bid opening, a statement to that effect must also 
be included on, or attached to, the abstract or record of bids.


814.404  Rejection of bids.


814.404-1  Cancellation of invitations after opening.

    (a) For each invitation to bid that VA cancels or for which it 
receives no bid, the contracting officer must do the following:
    (1) File a copy of the invitation for bids, as provided for in FAR 
14.404-1, together with the abstract showing to whom such bids were 
sent, in a separate folder identified by the invitation number.
    (2) Annotate the abstract to show why an award was not made.
    (3) Retain the folders for the current and two succeeding fiscal 
years.
    (b) The HCA may approve cancellation of invitations for bid after 
opening and may approve completion of the acquisition after 
cancellation, as provided in FAR 14.404-1(e). The contracting officer 
must submit a Determination and Finding to the HCA for approval and 
signature.


814.404-2  Rejection of individual bids.

    (a) When a contracting officer finds a bid that is being considered 
for an award is incomplete, e.g., all pages of the invitation have not 
been returned by the bidder, the contracting officer will take 
whichever of the following actions that is appropriate:
    (1) Make a determination that the bid as submitted is in such a 
form that acceptance would create a valid and binding contract, 
requiring the contractor to perform in accordance with all of the 
material terms and conditions of the invitation. The determination may 
be based on the fact that the bid as submitted includes evidence that 
the offeror intends to be bound by all the material terms and 
conditions of the invitation.
    (2) Make a determination that the bid as submitted is in such form 
that acceptance would not create a valid and binding contract.
    (b) When VA receives a single bid in response to a solicitation, 
the contracting officer must not reject the offer simply because it 
specifies a bid acceptance time that is shorter than that contained in 
the solicitation, unless a compelling reason exists for rejecting such 
a bid. Insufficient time to properly evaluate an offer is a compelling 
reason for rejection; however, the contracting officer must first 
request the offeror to extend the acceptance date of the bid to allow 
for proper evaluation.
    (c) In those cases where VA receives more than one bid, the 
contracting officer must reject as nonresponsive an individual bid that 
is not in compliance with the Government's bid acceptance time, since 
consideration of such an offer would unfairly disadvantage other 
bidders.


814.404-70  Questions involving the responsiveness of a bid.

    If a contracting officer cannot resolve a question involving the 
responsiveness of a bid, the contracting officer may submit the 
question to the Comptroller General through the DSPE.


814.407  Mistakes in bids.


814.407-3  Other mistakes disclosed before award.

    (a) In accordance with FAR 14.407-3(e), the authority of the 
Secretary to make the administrative determinations set forth in FAR 
14.407-3(a), (b), (c), and (d) is delegated to the SPE and is further 
delegated, without power of redelegation, to the DSPE. This delegation 
in no way impairs the delegations contained in Unpublished Decision of 
the Comptroller General B-122003 dated November 22, 1954.
    (b) When a bidder alleges a mistake in his or her bid before award, 
after complying with the provisions of FAR 14.407-3, the contracting 
officer must submit the complete file to the DSPE for an administrative 
determination. Based upon the evidence submitted, the DSPE shall 
determine the action the contracting officer is to take. The 
contracting officer may make no award until the DSPE makes a 
determination.


814.407-4  Mistakes after award.

    (a) When a contracting officer corrects a mistake in bid under FAR 
14.407-4(a), the contracting officer must forward a copy of the 
contract amendment or supplemental agreement and a copy of the 
contracting officer's determination, to the DSPE.
    (b) For mistakes in a bid alleged after award, the contracting 
officer's proposed determination, prepared in accordance with FAR 
14.407-4, must be forwarded to OGC through the DSPE, Acquisition 
Resources Service, for legal coordination. The DSPE shall transmit the 
results of this coordination to the contracting officer, who will make 
the final determination on the alleged mistake in bid after award.
    (c) The DSPE, Acquisition Resources Service, must maintain the 
agency records of mistakes in bids after award required by FAR 14.407-
4.


814.408  Award.


814.408-70  Award when only one bid is received.

    (a) When VA receives only one bid in response to an invitation for 
bids, the contracting officer may consider and accept the bid if all of 
the following apply:
    (1) The specifications used in the invitation were not restrictive.
    (2) VA solicited adequate competition.
    (3) The price is reasonable.
    (4) The bid is otherwise in accordance with the invitation for 
bids.
    (b) The contracting officer must make the determination in writing, 
and include it the contract file.


814.408-71  Recommendation for award (construction).

    (a) For Central Office contracts, the Chief Facilities Management 
Officer, Office of Facilities Management, must analyze all bids 
received and submit a memorandum to the Secretary recommending award or 
other disposition of the project. A copy of each of the following must 
accompany the memorandum:
    (1) The invitation.
    (2) Each bid received.
    (3) The abstract.
    (4) Any other pertinent data.
    (b) For facility-level contracts, the Chief, Engineering Service, 
must analyze all bids received and submit a memorandum recommending 
award or other disposition of the project to the contracting officer. 
The contracting officer alone must make the final decision to accept or 
reject the lowest responsive bid and the determination as to the 
responsibility of a prospective contractor.


814.409  Information to bidders.

    (a) An employee of VA may not disclose information as to probable

[[Page 2377]]

acceptance or rejection of any offer to any bidder or other person 
outside of VA.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
information about performance under a contract or an accepted bid is 
not public information and will be released to persons outside of VA 
only upon the authority of the immediate supervisor of the contracting 
officer.
    (c) Except as provided in paragraph (d) of this section, the 
contracting officer may furnish information on performance under a 
contract to those having a legitimate interest, such as banks, other 
financial companies and Government departments and agencies.
    (d) When litigation is involved, all information must be furnished 
through OGC.

PART 815--CONTRACTING BY NEGOTIATION

Subpart 815.3--Source Selection
Sec.
815.303 Responsibilities.
Subpart 815.4--Contract Pricing
815.404 Proposal analysis.
815.404-1 Proposal analysis techniques.
815.404-2 Information to support proposal analysis.
Subpart 815.6--Unsolicited Proposals
815.604 Department points of contact.
815.606 Department procedures.
815.606-1 Receipt and initial review.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 815.3--Source Selection


815.303  Responsibilities.

    The authority of the Secretary to appoint an individual other than 
the contracting officer to service as the source selection authority 
for a particular acquisition or group of acquisitions is delegated to 
the SPE and is further delegated to the DSPE. If an HCA wishes to 
designate an individual other than the delegated contracting officer as 
the source selection authority for a particular acquisition or group of 
acquisitions, the HCA shall prepare a request and justification and 
shall submit the request through channels to the DSPE for approval.

Subpart 815.4--Contract Pricing


815.404  Proposal analysis.


815.404-1  Proposal analysis techniques.

    (a) Contracting officers are responsible for the technical and 
administrative sufficiency of the contracts they enter into. 
Contracting officers must ensure that contracts undergo all applicable 
legal and technical reviews. (See 801.602-70.)
    (b) Contracting officers determine the level of technical analyses 
necessary for initial and revised pricing of all negotiated prime 
contracts, including subcontract pricing under them, and contract 
modifications. Contracting officers must request technical analyses of 
the proposals from the appropriate technical personnel. The technical 
analyses must address, as a minimum, the items set forth in FAR 15.404-
1(e)(2).
    (c) The contracting officer must document the results of such 
analyses in the contract file and make the results available to the 
auditor performing the pre-award audit.


815.404-2  Information to support proposal analysis.

    In evaluating start-up and other non-recurring costs, the 
contracting officer must determine the extent to which these costs are 
included in the proposed price and the intent to absorb or recover the 
costs in any future noncompetitive procurement or other pricing action. 
The contracting officer must ensure, with the assistance of the 
Assistant Inspector General for Policy, Planning, and Resources, as 
required or considered necessary, that VA will not pay the costs twice. 
For example, the cost of equipment that the Government pays for through 
a setup or connection agreement must not be included in depreciation 
cost of a subsequently negotiated agreement.

Subpart 815.6--Unsolicited Proposals


815.604  Department points of contact.

    A VA employee who receives an unsolicited proposal or inquiries 
from a potential offeror of an unsolicited proposal must refer the 
proposals or inquiries to the following:
    (a) Facility level unsolicited proposals must be referred to the 
HCA for the field facility.
    (b) Proposals to the VA National Acquisition Center must be 
referred to the Executive Director and Chief Operating Officer, VA 
National Acquisition Center.
    (c) Proposals to VA Central Office must be referred to the DSPE.


815.606  Department procedures.

    (a) The VA contact point will do the following:
    (1) Determine the nature of the potential proposal and which 
technical/professional disciplines within VA to consult to determine 
the need for the proposal and the likelihood that a formal proposal 
would earn favorable review.
    (2) In consultation with such technical/professional offices, the 
VA contact point will furnish the potential offeror the information 
specified in FAR 15.604 and any other information that might be of 
assistance to the potential offeror.
    (b) The contact point will maintain a record of advance guidance 
provided and the disposition/recommendation regarding the potential 
offer.
    (c) The contact point will review the unsolicited proposal and 
ensure that it is complete as prescribed in FAR 15.605. If required 
information is not submitted, the contact point will:
    (1) Determine if FAR 15.604 requires advance guidance;
    (2) Determine whether a comprehensive evaluation prescribed by FAR 
15.606-2 is appropriate and, if so, request that the offeror provide 
the necessary information; and,
    (3) Establish an estimated due date for completion of the review 
process.


815.606-1  Receipt and initial review.

    (a) When the VA contact point determines a proposal warrants a 
comprehensive evaluation (i.e., the proposal complies with the 
requirements in FAR 15.606-1(a) and is related to VA's mission), the 
contact point must contact the offeror to ensure that all data that 
should be restricted in accordance with FAR 15.609 has been identified.
    (b) The contact point must maintain a log of all unsolicited 
proposals to be evaluated. The log must indicate the following:
    (1) The date the proposal was received.
    (2) The date that the unsolicited proposal was determined to 
warrant a comprehensive evaluation.
    (3) A description of the proposal.
    (4) The offices requested to evaluate the proposal and the date the 
offices are requested to return their evaluations.
    (5) The date the reviewing offices finalize their respective 
evaluations.
    (6) The final disposition of the proposal.
    (c) The contact point must advise each office assigned 
responsibility for reviewing an unsolicited proposal of the need to 
evaluate the proposal against the criteria set forth in FAR 
15.607(a)(1) through (4). If the reviewers determine that the proposal 
fails to meet any of the criteria, the contact point must be advised. 
The contact point must return the proposal to the offeror, citing the 
reasons therefore.
    (d) The contact point must obtain approval of the DSPE before 
negotiation on proposals processed at field offices. The contact point 
must provide the

[[Page 2378]]

DSPE all necessary documentation supporting the noncompetitive 
negotiation, including any justification and approval required by FAR 
Subpart 6.3 and results of any synopsis required by FAR Subpart 5.2. 
The DSPE will consult the appropriate VA Central Office program 
official(s) and return the final decision to the contact point.
    (e) The contact point will number each copy of the unsolicited 
proposal. A reviewing office must obtain approval of the contact point 
before duplicating an unsolicited proposal and must number copies as 
specified by the contact point. All copies must be returned to the 
contact point when the review is complete.

PART 816--TYPES OF CONTRACTS

Subpart 816.1--Selecting Contract Types
Sec.
816.102 Policies.
Subpart 816.5--Indefinite-Delivery Contracts
816.504 Indefinite-quantity contracts.
816.505 Ordering.
Subpart 816.70--Unauthorized Agreements
816.7001 Letters of availability.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 816.1--Selecting Contract Types


816.102  Policies.

    (a) Contracting officers must obtain technical review of 
solicitations that include a clause that provides for economic price 
adjustment specified in FAR 16.203-4 or any locally developed clause 
(see FAR 16.203-4(d)(2) and 801.602-72(d)). The request for approval 
must include a clearly stated need for the clause.
    (b) The contracting officer must obtain the approval of the 
Director, Acquisition Resources Service (049A5), VA Central Office, 
before issuing a solicitation or awarding a contract that includes 
time-and-material or labor-hour pricing provisions if the ceiling price 
or estimated value of the acquisition exceeds $100,000. See 801.602-71 
for technical review requirements. Excluded from this requirement are 
time-and-material or labor-hour solicitations or proposed contracts 
covering emergencies, such as repair of a broken water, sewer, or 
communication line, repair of storm damage, etc. (i.e., where FAR 
6.302-2 applies).
    (c) Except as provided in FAR 32.703-3, a contract that involves a 
direct obligation of appropriations and lasts for more than one year 
from the beginning of the contract period must provide that:
    (1) The contract applies to the period stated in the contract, 
subject to availability of funds; and
    (2) The contractor will not perform any service under the contract 
after September 30 of each fiscal year (or beyond the period of the 
basic contract or any authorized option if the contract crosses fiscal 
years as provided in FAR 32.703-3(b)) unless the contractor obtains 
specific authorization from the contracting officer.
    (d) A/E contracts, construction contracts, or professional engineer 
contracts, financed by ``no year'' appropriations, are not subject to 
the requirements of paragraph (c) of this section.

Subpart 816.5--Indefinite-Delivery Contracts


816.504  Indefinite-quantity contracts.

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, when the contracting officer cannot determine definite 
quantities to be acquired under a solicitation and intends to issue a 
solicitation for estimated quantities, the contracting officer shall 
insert the clause at 852.216-70, Estimated Quantities.
    (b) The contracting officer shall insert the Alternate I clause at 
852.216-70 in solicitations for bulk coal.
    (c) The contracting officer shall insert the Alternate II clause at 
852.216-70 in solicitations for estimated quantities of orthopedic, 
prosthetic, and optical supplies.
    (d) The contracting officer shall insert the Alternate III clause 
at 852.216-70 in solicitations for monuments and headstones.


816.505  Ordering

    The task order contract and delivery order ombudsman for VA is the 
Associate Deputy Assistant Secretary for Acquisitions (see FAR 
16.505(b)(5)). Contracting officers may obtain the name, telephone 
number, facsimile number, and e-mail address of the current Associate 
Deputy Assistant Secretary for Acquisitions by contacting: The Office 
of Acquisitions (049A), VA Central Office, 810 Vermont Ave., NW., 
Washington, DC 20420.

Subpart 816.70--Unauthorized Agreements


816.7001  Letters of availability.

    (a) Description. A letter of availability (sometimes 
inappropriately called a letter of intent) is a letter to a supplier 
that primarily seeks to reserve a place on the supplier's production or 
delivery schedule for long lead-time items. A letter of availability 
usually indicates products or services being considered for 
procurement. A supplier should not construe a letter of availability as 
a commitment. Prospective contractors sometimes solicit letters of 
availability or the letters may originate from Government personnel. A 
letter of availability differs from a letter contract, which is 
specifically authorized in FAR 16.603.
    (b) Policy. (1) For the following reasons, contracting officers may 
not use letters of availability unless the DSPE specifically authorizes 
them to do so:
    (i) Letters of availability often cause potential contractors to 
initiate costly preparations in anticipation of contract award.
    (ii) Procurements announced in such letters do not always 
materialize. The result may be costly to the Government, the 
prospective contractor, or both. If the author of the letter of 
availability is an authorized contracting officer of VA, the Government 
may be bound by the action, even though the action is contrary to sound 
procurement practices and/or fiscal regulations. If the author of the 
letter of availability lacks procurement authority, the prospective 
contractor may incur substantial expenditures that may not be recovered 
from the Government. In this instance, the prospective contractor may 
seek to hold the unauthorized author personally liable.
    (iii) The issuance of a letter of availability may violate the 
``Anti-Deficiency Act'' (31 U.S.C. 1341).
    (2) Contractors need access to procurement information as soon as 
possible to make timely preparations. Therefore, procurement personnel 
should act as efficiently and expeditiously as possible on all 
procurement actions.

PART 817--SPECIAL CONTRACTING METHODS

Subpart 817.1--Multi-year Contracting
Sec.
817.105 Policy.
817.105-1 Uses.
Subpart 817.2--Options
817.202 Use of options.
817.204 Contracts.
Subpart 817.4--Leader Company Contracting
817.402 Limitations.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

[[Page 2379]]

Subpart 817.1--Multi-year Contracting


817.105  Policy.


817.105-1  Uses.

    (a) Under 38 U.S.C. 114, VA contracting officers may enter into 
multi-year contracts for supplies and services not to exceed 5 years 
(unless otherwise authorized by statute), provided the Secretary or 
designee makes the following determinations:
    (1) Appropriations are available for obligation to pay for the 
total payments for the fiscal year in which the contract is awarded 
plus the estimated amount of any cancellation charges.
    (2) The contract serves the best interest of the Government by:
    (i) Reducing cost;
    (ii) Achieving contract administration and other efficiencies;
    (iii) Increasing quality contract performance; and
    (iv) Encouraging effective competition.
    (3) That, during the contract period:
    (i) Demand for the supplies or services will continue;
    (ii) Substantial changes in demand for supplies and services in 
terms of quantity or rate of delivery are unlikely; and
    (iii) Specifications for the supplies or services will remain 
reasonably stable.
    (4) The risk of the contractor's inability to perform under the 
terms and conditions of the contract is low.
    (5) A multi-year contract will not inhibit competition from small 
businesses.
    (6) For a pharmaceutical item for which a patent has expired less 
than 4 years before the solicitation issue date, that there is no 
substantial likelihood that increased competition among potential 
contractors would occur during the term of the contract as the result 
of the availability of generic equivalents increasing during the term 
of the contract.
    (b) The Secretary has delegated authority to make the 
determinations specified in 817.105-1(a) as follows:
    (1) HCAs may make the above determinations and approve contracts 
that do not require legal/technical reviews under 801.602-70 and that 
do not contain a first year cancellation ceiling exceeding 20 percent 
of the contract value over the full multi-year term.
    (2) Authority to make the above determinations and to approval all 
other proposed multi-year contracts is delegated to the SPE and is 
further delegated to the DSPE. For approval purposes, the HCA will 
justify and document the use of a multi-year contract against each of 
the criteria specified in paragraphs (a)(1) through (a)(6) of this 
section and forward to the DSPE for approval. The justification must 
explain the cancellation ceiling and the method used to calculate that 
ceiling. The justification also must explain the advantages of multi-
year contracts over other alternative methods, e.g., option year 
contracts.
    (c) The contracting officer must develop the cancellation ceilings 
in accordance with FAR 17.106-1. (38 U.S.C. 114)

Subpart 817.2--Options


817.202  Use of options.

    All solicitations developed under Office of Management and Budget 
Circular A-76 (Revised) cost comparisons will provide for four one-year 
renewal options as prescribed in FAR Subpart 17.2. The contracting 
officer must forward requests to use less or more than the prescribed 
contract period for Circular A-76 (Revised) cost comparisons to the 
DSPE for approval.


817.204  Contracts.

    (a) The contracting officer must obtain the approval of the DSPE 
before awarding a contract that includes options exceeding the 5-year 
limitation specified in FAR 17.204(e). This requirement does not apply 
to contracts to be awarded by or on behalf of the VA Office of 
Inspector General. The request for approval must include the following:
    (1) Supporting documentation, rationale, and justifications for the 
use of options (see FAR 17.205) and for exceeding the 5-year 
limitation.
    (2) Documentation that the contracting officer has considered and 
addressed the limitations specified in FAR 17.202(b) and (c).
    (b) Solicitations that require technical review in accordance with 
801.602-71 through 801.602-73 shall be submitted for review 
concurrently as provided therein.

Subpart 817.4--Leader Company Contracting


817.402  Limitations.

    (a) Except as provided in paragraph (b) of this section, the 
Government shall not initiate or execute leader company contracts.
    (b) The DSPE may designate a contracting officer to enter into a 
leader company contract for the benefit of VA and the Government. The 
DSPE must designate a contracting officer by name for a specific 
contract. The named contracting officer will submit the proposed 
contract, with a determination and finding, for legal review in 
accordance with 801.602-71.

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

PART 819--SMALL BUSINESS PROGRAMS

Subpart 819.2--Policies
Sec.
819.201 General policy.
801.202 Specific policies.
819.202-1 Encouraging small business participation in acquisitions.
819.202-5 Data collection and reporting requirements.
819.202-70 HCA responsibilities.
819.202-71 Additional contracting officer responsibilities.
819.202-72 Order of precedence.
Subpart 819.5--Set-Asides for Small Business
819.502 Setting aside acquisitions.
819.502-2 Total small business set-asides.
819.502-3 Partial set-asides.
Subpart 819.6--Certificates of Competency and Determinations of 
Responsibility
819.602 Procedures.
819.602-3 Resolving differences between VA and the Small Business 
Administration.
Subpart 819.8--Contracting With the Small Business Administration (The 
8(a) Program)
819.800 General.
Subpart 819.70--Veteran-Owned and Operated Small Businesses


Sec.  819.7001  Policy.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 819.2--Policies


819.201  General policy.

    The Director, Office of Small and Disadvantaged Business 
Utilization, is designated as the official responsible for making the 
determination required by FAR 19.201(f).


801.202  Specific policies.


819.202-1  Encouraging small business participation in acquisitions.

    Contracting officers may negotiate payment terms of less than 30 
calendar days to encourage small business participation. A period of 
less than 7 days may not be prescribed (see FAR 32.908(c)(2)). The 
contracting officer and the local fiscal officer must be in agreement 
on the negotiated payment terms before awarding the contract.


819.202-5  Data collection and reporting requirements.

    (a) Administration heads, staff office directors, and HCAs must, in 
addition to the responsibilities designated in FAR

[[Page 2380]]

19.202-5, cooperate with the Office of Small and Disadvantaged Business 
Utilization in formulating specific small business program goals and 
providing other data necessary for goal assessment.
    (b) Office of Facilities Management and Office of Acquisition and 
Materiel Management contracting offices must report achievement of 
subcontracting goals on a semiannual basis. The Office of Small and 
Disadvantaged Business Utilization must receive the reports not later 
than April 30 for the period ending March 31, and November 1 for the 
period ending September 30.


819.202-70  HCA responsibilities.

    A HCA must perform the following functions in support of the small 
business program. These functions cannot be delegated without written 
approval of the Director, Office of Small and Disadvantaged Business 
Utilization:
    (a) Develop, on an annual basis, a plan of operation to increase 
the share of contracts and purchase orders awarded to the small 
business programs prescribed in FAR Part 19. This plan must also 
include veteran-owned and service-disabled veteran-owned concerns.
    (b) Promote goals for the small business programs set forth in FAR 
Part 19. This must also include veteran-owned and service-disabled 
veteran-owned concerns.
    (c) Review the types and classes of items and services to be 
purchased to determine the applicability of individual small business 
set-asides.
    (d) Review class set-asides, established in accordance with 
criteria in FAR 19.503, at least annually to determine whether items or 
services procured under a unilateral or joint set-aside should be 
modified or withdrawn.
    (e) Maintain updated lists of acquisitions reserved for small 
business on a class basis.
    (f) If the acquisition activity is assigned to a Small Business 
Administration Procurement Center Representative, assure that the 
representative is provided logistical support, cooperation, and access 
to all reasonably obtainable contract information directly pertinent to 
the Small Business Administration Procurement Center Representative's 
official duties.
    (g) Encourage technical personnel and end-users to participate in 
discussions with small businesses, veteran owned, and service-disabled 
veteran-owned concerns.
    (h) Attend conferences and meetings publicizing small business 
programs. This responsibility may be delegated without the written 
approval of the Director, Office of Small and Disadvantaged Business 
Utilization.


819.202-71  Additional contracting officer responsibilities.

    In addition to the duties designated in FAR 19.202 through 19.202-
6, contracting officers must perform the following functions in support 
of the small business program:
    (a) Make maximum use of small business source lists.
    (b) Assure that small business firms are identified on solicitation 
mailing lists and bid abstracts.
    (c) Assure that specifications are not unduly restrictive, thereby 
enabling small business participation to the maximum extent possible.
    (d) Assist and counsel small business firms with individual 
problems.
    (e) Provide for counseling non-responsive or non-responsible small 
business bidders to help qualify them for future awards.
    (f) Submit informational copies of all small business protests and 
appeals to the Director, Office of Small and Disadvantaged Business 
Utilization, at the same time they are submitted to the Small Business 
Administration.

Subpart 819.5--Set-Asides For Small Business


819.502  Setting aside acquisitions.


819.502-2  Total small business set-asides.

    (a) When a total small business set-aside is made, one of the 
following statements, as applicable, will be included in the 
solicitation for bids:

    (1) Notice of total small business set-aside, page --------, 
applies to all items in this solicitation.
    (2) Notice of total small business set-aside, page --------, 
applies to items -------- through -------- in this solicitation.

    (b) Contracting officers must ensure that appropriate product or 
service classification and the related size standard are included in 
each solicitation.


819.502-3  Partial set-asides.

    When, in accordance with the provisions of FAR 19.502-3, it is 
determined that a particular procurement will be partially set aside 
for exclusive small business participation or small business 
participation, the solicitation for bids will have appropriate product 
or service classification, appropriate size standard and whichever of 
the following statement shall be placed on the face page:

    Notice of partial set-aside, page --------, applies to item ----
---- through item -------- in this solicitation.

Subpart 819.6--Certificates of Competency and Determinations of 
Responsibility


819.602  Procedures.


819.602-3  Resolving differences between VA and the Small Business 
Administration.

    The Director, OSDBU, is the VA liaison with the Small Business 
Administration. Information copies of correspondence sent to the Small 
Business Administration seeking a certificate of competency 
determination must be concurrently provided to the Director, OSDBU. 
Before appealing a certificate of competency, the Head of the 
Contracting Activity must seek concurrence from the Director, OSDBU.

Subpart 819.8--Contracting With the Small Business Administration 
(The 8(a) Program)


819.800  General.

    (a) No contract will be entered into with SBA under section 8(a) of 
the Small Business Act (15 U.S.C. 637(a)) unless a certification is 
made by the Administrator of that agency, or designee, that SBA is 
competent to perform the contract.
    (b) When it is determined that the requirements of VA are 
appropriate for inclusion in this program, the contracting officer will 
make this fact known to proper officials of the SBA regional office 
servicing his/her area. However, when projects funded from minor 
construction appropriation (between $400,000 and $2 million) are 
proposed for 8(a) acquisition, the Director, Office of Small and 
Disadvantaged Business Utilization (OSDBU) (00SB), shall be contacted 
by telephone or notified in writing in order to afford the OSDBU an 
opportunity to identify possible 8(a) sources prior to apprising SBA 
officials. If the certification required by paragraph (a) of this 
section is received, the VA contracting officer will secure from SBA 
the name(s) and location(s) of their subcontractor(s) and the unit 
price(s) to be paid. Should these prices be within a range acceptable 
to VA, the contracting officer will notify SBA of acceptance.
    (c) The contract will be made between VA and SBA and will be 
administered by VA.

[[Page 2381]]

Subpart 819.70--Veteran-Owned and Operated Small Businesses


819.7001  Policy.

    (a) The Small Business Act directs the Small Business 
Administration to give ``special consideration'' to veterans of the 
Armed Forces in all Small Business Administration programs. It is the 
policy of VA to encourage participation by all veteran-owned and 
operated small businesses in VA acquisitions.
    (b) All VA facilities having procurement requirements for which 
veteran-owned small businesses are known sources must take affirmative 
action to solicit these firms and assist them in participating in VA 
acquisition opportunities.

PART 822--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Subpart 822.3--Contract Work Hours and Safety Standards Act
Sec.
822.304 Variations, tolerances, and exemptions.
822.305 Contract clause.
Subpart 822.4--Labor Standards for Contracts Involving Construction
822.406 Administration and enforcement.
822.406-11 Contract terminations.

    Authority: 29 CFR 5.15(d); 40 U.S.C. 121(c); 48 CFR 1.301-1.304.

Subpart 822.3--Contract Work Hours and Safety Standards Act


822.304  Variations, tolerances, and exemptions.

    When issuing a contract for nursing home care, a contracting 
officer may exempt a contractor from certain requirements of the 
Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708) 
regarding the payment of overtime (see 29 CFR 5.15(d)(2) and 852.222-
70).


822.305  Contract clause.

    The contracting officer must insert the clause at 852.222-70, 
Contract Work Hours and Safety Standards Act--Nursing Home Care 
Contract Supplement, in solicitations and contracts for nursing home 
care when the FAR clause at 52.222-4, Contract Work Hours and Safety 
Standards Act--Overtime Compensation, is included.

Subpart 822.4--Labor Standards for Contracts Involving Construction


822.406  Administration and enforcement.


822.406-11  Contract terminations.

    (a) Contracting officers must submit any proposed termination of a 
contract based on violations of the labor standard provisions of the 
contract to OGC for review and comment prior to taking final action. 
The submittal must include a detailed explanation of the facts and 
circumstances involved. Contracting officers, except those in the 
Office of Facilities Management, shall forward the submittal to OGC 
through the DSPE. Contracting officers in the Office of Facilities 
Management shall forward the submittal to OGC through the Chief 
Facilities Management Officer, Office of Facilities Management.
    (b) If the contract is to be terminated, the DSPE or the Chief 
Facilities Management Officer, Office of Facilities Management, must 
submit the reports required by 29 CFR 5.7(d) over the signature of the 
SPE.

PART 824--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

Subpart 824.1--Protection of Individual Privacy
Sec.
824.102 General.
Subpart 824.2--Freedom of Information Act
824.203 Policy.

    Authority: 38 CFR 1.550-1.559 and 1.575-1.584; 40 U.S.C. 121(c), 
and 48 CFR 1.301-1.304.

Subpart 824.1--Protection of Individual Privacy


824.102  General.

    VA rules implementing the Privacy Act of 1974 are in 38 CFR 1.575 
through 1.584.

Subpart 824.2--Freedom of Information Act


824.203  Policy.

    VA rules implementing the Freedom of Information Act are in 38 CFR 
1.550 through 1.559.

PART 825--FOREIGN ACQUISITION

Subpart 825.1--Buy American Act--Supplies
Sec.
825.103 Exceptions.
825.104 Nonavailable articles.
Subpart 825.2--Buy American Act--Construction Materials
825.202 Exceptions.
825.205 Postaward determinations.
Subpart 825.6--Trade Sanctions
825.602 Exceptions.
Subpart 825.8--Other International Agreements and Coordination
825.870 Technical assistance.
Subpart 825.9--Customs and Duties
825.902 Procedures.
825.902-70 Technical assistance.
Subpart 825.10--Additional Foreign Acquisition Regulations
825.1001 Waiver of right to examination of records.
Subpart 825.11--Solicitation Provisions and Contract Clauses
825.1102 Acquisition of construction.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 825.1--Buy American Act--Supplies


825.103  Exceptions.

    (a) Public Interest. When a contracting officer believes that a 
determination that domestic preference would be inconsistent with the 
public interest is necessary under FAR 25.103(a), the contracting 
officer must submit the request for determination to the DSPE for 
submission to the SPE, who will forward the request to the Secretary 
for approval. The request for determination must contain all the facts 
and other pertinent information upon which a determination may be made.
    (b) Non-availability. (1) For each determination of non-
availability made in accordance with FAR 25.103(b)(2)(i), the HCA must 
do the following:
    (i) Factually support the determination and include the supporting 
facts in the contract file.
    (ii) Forward a copy of the determination, along with supporting 
documentation, to the DSPE.
    (2) If the contracting officer believes that the non-availability 
of an article is likely to affect future acquisitions, the contracting 
officer should include a recommendation that a copy of the 
determination and supporting documentation be forwarded to the Civilian 
Agency Acquisition Council (CAAC) for possible addition to the list of 
non-available articles in FAR 25.104. The DSPE will decide whether to 
submit the material to the CAAC.


825.104  Nonavailable articles.

    The following items are added to the list of nonavailable articles 
contained in FAR 25.104:

Glass, Lead
Glass, Wire
Insulin, human

Subpart 825.2--Buy American Act--Construction Materials


825.202  Exceptions.

    (a) When a determination is required under FAR 25.202(a)(1), the 
contracting officer must submit the request for determination to the 
DSPE for submission to the SPE, who will

[[Page 2382]]

forward the request to the Secretary. The submission must contain all 
the facts and other pertinent information necessary for the Secretary 
to make a determination.
    (b) For each determination of non-availability that the HCA makes 
in accordance with FAR 25.202(a)(2), the HCA must do the following:
    (1) Factually support the determination in writing and include the 
determination in the contract file.
    (2) Forward a copy of the determination, along with supporting 
documentation, to the Chief Facilities Management Officer, Office of 
Facilities Management, through the DSPE.
    (3) If the contracting officer believes that the non-availability 
of an article is likely to affect future acquisitions, include a 
recommendation that a copy of the determination and supporting 
documentation be forwarded to the Civilian Agency Acquisition Council 
(CAAC) for possible addition to the list of non-available articles in 
FAR 25.104. The DSPE will decide whether to submit the material to the 
CAAC.


825.205  Postaward determinations.

    A post-award determination that an exception to the Buy American 
Act applies, as provided in FAR 25.205(c), will be made in accordance 
with FAR 25.202 and 825.202.

Subpart 825.6--Trade Sanctions


825.602  Exceptions.

    When the contracting officer determines it to be in the best 
interest of the Government, the contracting officer may request an 
exception to the requirements of FAR 25.601 from the Secretary through 
the DSPE and the SPE. Each such request must be fully justified, 
containing all pertinent facts, as provided in FAR 25.602(b). The SPE 
is responsible for notifying the U.S. Trade Representative of approved 
requests, as required by FAR 25.602(b)(2).

Subpart 825.8--Other International Agreements and Coordination


825.870  Technical assistance.

    Contracting officers may obtain technical information or guidance 
on international agreements and treaties for procurements outside the 
United States by contacting the Executive Director and Chief Operating 
Officer, VA National Acquisition Center.

Subpart 825.9--Customs and Duties


825.902  Procedures.


825.902-70  Technical assistance.

    Should the regulations contained in FAR Subpart 25.9 be inadequate 
to meet the particular needs of the contracting officer in clearing 
items through customs and/or obtaining Duty Free Entry of goods, the 
contracting officer should contact the nearest United States Customs 
and Boarder Protection office for technical assistance. The location of 
the nearest office can be found at the U.S. Customs and Boarder 
Protection Web site at http://www.customs.gov/xp/cgov/toolbox/contacts/cmcs/.

Subpart 825.10--Additional Foreign Acquisition Regulations


825.1001  Waiver of right to examination of records.

    (a) The contracting officer must prepare proposed determinations 
and findings to use either of the following:
    (1) Alternate I of the FAR clause at 52.212-5, Contract Terms and 
Conditions Required to Implement Statutes or Executive Orders--
Commercial Items.
    (2) Alternate III of the FAR clause at 52.215-2, Audit and 
Records--Negotiation.
    (b) The contracting officer must submit the determinations and 
findings to the DSPE for submission to the SPE, who will forward the 
request to the Secretary for the signature, as provided in FAR 
25.1001(a)(2)(iii). The submission must include all appropriate 
documentation.
    (c) The Secretary, upon concurring with the contracting officer's 
proposed determination and findings, will, if required by FAR 
25.1001(a)(2)(iii), forward the document to the Comptroller General for 
concurrence.
    (d) The completed determination and findings will be made part of 
the contract file.

Subpart 825.11--Solicitation Provisions and Contract Clauses


825.1102  Acquisition of construction.

    The Buy American Act (41 U.S.C. 10a-d), except as modified by 
various trade agreements (see FAR Part 25), requires that only domestic 
construction material be used in the performance of contracts for 
construction. For solicitations and contracts for construction that 
contain the FAR clauses related to the Buy American Act, the 
contracting officer must insert the applicable VAAR clause, with or 
without an alternate, as shown in Table 825.1102:

                             Table 825.1102
------------------------------------------------------------------------
               FAR clause                     VAAR clause to be used
------------------------------------------------------------------------
FAR 52.225-9, Buy American Act--         852.236-89, Buy American Act.
 Construction Materials.
FAR clause 52.225-11, without its        852.236-89, Buy American Act,
 Alternate I (see FAR 25.1102(c)).        with its Alternate I.
FAR clause 52.225-11, Buy American Act-- 852.236-89, Buy American Act,
 Construction Materials under Trade       with its Alternate II.
 Agreements, with its Alternate I (see
 FAR 25.1102(c)(3)).
------------------------------------------------------------------------

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

PART 828--BONDS AND INSURANCE

Subpart 828.1--Bonds and Other Financial Protections
Sec.
828.101 Bid guarantees.
828.101-2 Solicitation provision or contract clause.
828.101-70 Safekeeping and return of bid guarantee.
828.106 Administration.
828.106-6 Furnishing information.
828.106-70 Bond premium adjustment.
Subpart 828.2--Sureties and Other Security for Bonds
828.203 Acceptability of individual sureties.
828.203-7 Exclusion of individual sureties.
Subpart 828.3--Insurance
828.306 Insurance under fixed-price contracts.
Subpart 828.71--Indemnification of Contractors, Medical Research or 
Development Contracts
828.7100 Scope of subpart.
828.7101 Approval for indemnification.
828.7102 Extent of indemnification.
828.7103 Financial protection.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

[[Page 2383]]

Subpart 828.1--Bonds and Other Financial Protections


828.101  Bid guarantees.


828.101-2  Solicitation provision or contract clause.

    When a bid bond is required for supplies or services, the phrase 
``any cost of acquiring the work'' in paragraph (e) of the Bid 
Guarantee clause in FAR 52.228-1 may be modified to refer to the cost 
of ``supplies,'' ``services,'' etc.


828.101-70  Safekeeping and return of bid guarantee.

    (a) The contracting officer must retain, in a safe, certified 
checks or other negotiable security provided as bid security for the 
three lowest acceptable bids. After the contract and contract bonds 
have been signed and approved, the contracting officer must return the 
certified checks or other negotiable securities either:
    (1) In person to the bidder who provides a proper receipt; or
    (2) By any method that will provide evidence that the bidder 
received the security.
    (b) The contracting officer should promptly return certified checks 
or other negotiable security furnished in support of bids, other than 
those determined to be the three lowest acceptable bids, to the 
respective bidders either:
    (1) In person to the bidder who provides a proper receipt; or
    (2) By any method that will provide evidence that the bidder 
received the security.
    (c) The contracting officer will not return commercial bid bonds 
unless specifically requested to do so by the bidders. If any of the 
three low bidders request the return of a commercial bid bond, the 
contracting officer will not return those bid bonds until the contract 
and contract bonds have been executed by the successful bidder and 
approved by the contracting officer or all bids have been rejected.


828.106  Administration.


828.106-6  Furnishing information.

    The contracting officer for the applicable contract will furnish 
copies of payment bonds to a requestor under the provisions of FAR 
28.106-6(c).


828.106-70  Bond premium adjustment.

    When performance and payment bonds or payment protection are 
required, the contract must contain the clause in 852.228-70, Bond 
Premium Adjustment.

Subpart 828.2--Sureties and Other Security for Bonds


828.203  Acceptability of individual sureties.


828.203-7  Exclusion of individual sureties.

    The DSPE may make the determinations referenced in FAR 28.203-7:
    (a) To exclude individuals from acting as surety on bonds; and
    (b) To accept bonds from individuals named on the Excluded Parties 
List System.

Subpart 828.3--Insurance


828.306  Insurance under fixed-price contracts.

    (a) Term contracts, or contracts of a continuing nature, for 
ambulance, automobile and aircraft service, must contain the provision 
in 852.228-71, Indemnification and Insurance.
    (b) Paragraph (a) of this section does not apply to emergency or 
sporadic ambulance service authorized by VA Manual MP-1, Part II, 
Chapter 3, or other emergency or sporadic vehicle or aircraft services 
if both of the following conditions exist:
    (1) The service is not used solely for the purpose of avoiding 
entering into a continuing contract.
    (2) The services will be obtained from firms known to carry 
insurance coverage in accordance with State or local requirements.

Subpart 828.71--Indemnification of Contractors, Medical Research or 
Development Contracts


828.7100  Scope of subpart.

    (a) This subpart sets forth the policies and procedures concerning 
indemnification of contractors performing contracts covering medical 
research or development that involve risks of an unusually hazardous 
nature, as authorized by 38 U.S.C. 7317.
    (b) The authority to indemnify the contractor under this subpart 
does not create any rights to third parties that would not otherwise 
exist by law.
    (c) As used in this subpart, the term ``contractor'' includes 
subcontractors of any tier under a contract containing an 
indemnification provision under 38 U.S.C. 7317. (38 U.S.C. 7317)


828.7101  Approval for indemnification.

    (a) The Secretary of Veterans Affairs will make the approval 
determinations for the indemnification of contractors.
    (b) Contracting officers must submit requests for approval, 
together with all available information, to the DSPE for submission to 
the SPE, who will forward the request to the Secretary for approval. 
(38 U.S.C. 7317)


828.7102  Extent of indemnification.

    (a) A contract for medical research or development authorized by 38 
U.S.C. 7303, may provide that the Government will indemnify the 
contractor against losses or liability specified in paragraphs (b) and 
(c) of this section if all of the following apply:
    (1) The contract work involves a risk of an unusually hazardous 
nature.
    (2) The losses or liability arise out of the direct performance of 
the contract.
    (3) The losses or liability are not covered by the financial 
protection required under 828.7103.
    (b) The Government may indemnify a contractor for liability 
(including reasonable expenses of litigation or settlement) to third 
persons for death, bodily injury, or loss of or damage to property from 
a risk that the contract defines as unusually hazardous. The 
indemnification will not cover liability under State or Federal 
worker's injury compensation laws to employees of the contractor who 
are both:
    (1) Employed at the site of the contract work; and
    (2) Working on the contract for which indemnification is granted.
    (c) The Government may indemnify the contractor for loss of or 
damage to property of the contractor from a risk that the contract 
defines as unusually hazardous.
    (d) A contract that provides for indemnification in accordance with 
this subpart must also require that:
    (1) The contractor must notify the contracting officer of any claim 
or suit against the contractor for death, bodily injury, or loss of or 
damage to property; and
    (2) The Government may choose to control or assist in the defense 
of any suit or claim for which indemnification is provided in the 
contract. (38 U.S.C. 7317)


828.7103  Financial protection.

    (a) A contractor must have and maintain an amount of financial 
protection to cover liability to third persons and loss of or damage to 
the contractor's property that meets one of the following:
    (1) The maximum amount of insurance available from private sources.
    (2) A lesser amount that the Secretary establishes after taking 
into consideration the cost and terms of private insurance.
    (b) Financial protection may include private insurance, private 
contractual indemnities, self-insurance, other proof

[[Page 2384]]

of financial responsibility, or a combination that provides the maximum 
amount required. If a contractor elects to self-insure, the contractor 
must provide the contracting officer, before award, proof of financial 
responsibility up to the maximum amount required. (38 U.S.C. 7317)

PART 829--TAXES

Sec.
829.000 Scope of part.
Subpart 829.2--Federal Excise Taxes
829.202 General exemptions.
829.202-70 Tax exemptions for alcohol products.
Subpart 829.3--State and Local Taxes
829.302 Application of State and local taxes to the Government.
829.302-70 Purchases made from patients' funds.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.


829.000  Scope of part.

    This part states the policies and procedures for the following:
    (a) Exemptions of alcohol products purchased for use by the VA 
medical care program from Federal excise taxes.
    (b) Specified refund procedures for State and local taxes.

Subpart 829.2--Federal Excise Taxes


829.202  General exemptions.


829.202-70  Tax exemptions for alcohol products.

    (a) General. (1) VA is permitted to procure spirits to be used for 
non-beverage purposes free of tax under the Alcohol and Tobacco Tax and 
Trade Bureau (TTB) regulations (see 27 CFR 19.538 and 19.539, 20.241 
through 20.246, 22.161 and 22.162, 22.171 through 22.176, 24.293, and 
25.181 through 25.185). The use of tax-free alcohol, whiskey, beer, 
wine, and denatured spirits for non-beverage purposes shall include, 
but is not limited to, medicinal and scientific purposes.
    (2) The Executive Director and Chief Operating Officer, National 
Acquisition Center, and the Head of the Contracting Activity may sign 
application permits on Department of Treasury-TTB Form 5150.33, Spirits 
for Use of The United States. This authority may not be delegated.
    (b) Whiskey, alcohol, and denatured alcohol. (1) The contracting 
officer may obtain application forms for tax-free purchases from the 
TTB Distribution Center, P.O. Box 5950, Springfield, VA 22150-5950. The 
completed forms must be submitted to the Associate Director (Compliance 
Operations), Alcohol and Tobacco Tax and Trade Bureau, Washington, DC 
20226.
    (2) Permits previously issued on Alcohol, Tobacco, and Firearms 
(ATF) Form 1444, Tax-Free Spirits for Use of United States, remain 
valid until surrendered or canceled. A copy of the current ATF Form 
1444 or TTB Form 5150.33 must be made available to the supplier with 
the initial order. The permit number only needs to be referenced on any 
future orders with the same supplier.
    (3) Contracting officers may make purchases of excise tax-free 
whiskey and alcohol only from qualified distillery plants or bonded 
dealers. The accountable officer must ensure that accurate records of 
all receipts, usage, and destruction of tax-free distilled spirits are 
maintained at each medical center and must conduct a semi-annual 
physical inventory of the tax-free alcohol in the possession of the 
medical center (see 27 CFR 22.161 and 22.162).
    (c) Wine. No tax exemption form or ATF/TTB permit is required for 
the tax-free procurement of wine from bonded wine premises. The 
purchase order must show the kind, quantity, and alcohol content of the 
wine and must state the purpose for which wine is to be used (see 27 
CFR 24.293). An extra copy of a properly executed purchase order may be 
furnished to the bonded wine premises from which wine is purchased to 
facilitate record keeping.
    (d) Beer. The contracting officer may procure tax-free beer only 
from licensed breweries and only when such product is prescribed for 
patients' therapeutic use.
    (1) The contracting officer must submit an application for a TTB 
permit to purchase tax-free beer in letter form to the Director of the 
nearest TTB Regional Office or to the Director, Alcohol and Tobacco Tax 
and Trade Bureau, Washington, DC 20226. The following information must 
be included:
    (i) Name and address of facility.
    (ii) Specific purpose for which the beer will be used.
    (iii) Quantity proposed to buy each month, year, etc.
    (iv) Name and address of brewery.
    (v) Copy of document authorizing the head of the contracting 
activity to sign the request (i.e., paragraph (a)(2) of this section).
    (2) The contracting officer must obtain a separate permit for each 
brewery from which beer is to be purchased.

Subpart 829.3--State and Local Taxes


829.302  Application of State and local taxes to the Government.

    (a) If a vendor refuses to sell at a price exclusive of the State 
and local tax, the contracting officer must use Standard Form (SF) 
1094, U.S. Tax Exemption Certificate, as a basis for billing taxing 
authorities for a refund of taxes paid.
    (b) A contracting officer may not furnish an SF 1094 to a vendor or 
use SF 1094 to claim reimbursement from the taxing authority when the 
total amount of State and local tax on any one purchase is $10 or less.


829.302-70  Purchases made from patients' funds.

    The contracting officer shall insert the clause at 852.229-70, 
Sales or Use Taxes, in solicitations and contracts when items are to be 
purchased solely from the personal funds of patients.

PART 831--CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 831.70--Contract Cost Principles and Procedures
Sec.
831.7000 Scope of subpart.
831.7001 Allowable costs under cost reimbursement vocational 
rehabilitation and education contracts or agreements.
831.7001-1 Tuition.
831.7001-2 Special services or courses.
831.7001-3 Books, supplies, and equipment required to be personally 
owned.
831.7001-4 Medical services and hospital care.
831.7001-6 Consumable instructional supplies.
831.7001-7 Reimbursement for other supplies and services.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 831.70--Contract Cost Principles and Procedures


831.7000  Scope of subpart.

    This subpart contains general cost principles and procedures for 
the determination and allowance of costs in connection with the 
negotiation and administration of cost reimbursement type contracts for 
providing vocational rehabilitation, education, and training to 
eligible veterans under 38 U.S.C. Chapter 31, (referred to as a 
``Chapter 31 program'').


831.7001  Allowable costs under cost reimbursement vocational 
rehabilitation and education contracts or agreements.


831.7001-1  Tuition.

    (a) Except as provided in this section, when the contractor has a 
customary cost of tuition, the charge to VA may not exceed that charged 
to similarly circumstanced nonveteran students. If the contractor has 
more than one standard charge for the same service, the charge to VA 
must be the lowest price that is offered or published for the entire 
course, semester, quarter, or term.

[[Page 2385]]

    (b) VA will not normally pay tuition or incidental fees to 
institutions or establishments furnishing apprentice or other on-the-
job training. VA may elect to pay charges or expenses that fall into 
either of the following categories:
    (1) Charges customarily made by a nonprofit workshop or similar 
establishment for providing work adjustment training to similarly 
circumstanced nonveterans even if the trainee receives an incentive 
wage as part of the training.
    (2) Training expenses incurred by an employer who provides on-the-
job training following rehabilitation to the point of employability 
when VA determines that the additional training is necessary.
    (c) When Federal funds pay the total cost of instruction or grants 
from the Federal Government pay a portion of the cost, (e.g. Smith-
Hughes or other laws, excluding Federal Land Grant Funds), that subsidy 
will be taken into consideration in determining the charge to VA. The 
term ``Federal Land Grant Funds'' refers to those funds received under 
the Morrill-Nelson Act (Morrill Acts of 1862 and 1890 and the Nelson 
amendment of 1907) and section 22 of the Bankhead-Jones Act of 1935.
    (d) A veteran who is participating in a Chapter 31 program and 
receives an award of a fellowship, scholarship, grant-in-aid, 
assistantship, or similar award will have that award treated according 
to the following requirements:
    (1) If the award limits its use to payment of tuition, fees, or any 
charge that VA normally pays as part of a Chapter 31 program, VA will 
pay the portion of the charges remaining after applying the award.
    (2) In all other cases, VA will pay the full amount of the tuition, 
fees, or other charges.
    (e) If a State or other Government authority waives a veteran's 
tuition and fees, VA will reduce its payment of those charges by the 
amount of the waiver.
    (f) VA will pay enrollment fees for registration if both of the 
following conditions exist:
    (1) The institution or training establishment usually makes this 
charge.
    (2) The charge is not more than other students or trainees pay.


831.7001-2  Special services or courses.

    Special services or courses are those services or courses that VA 
requests that are over and above those the institution customarily 
provides for similarly circumstanced nonveterans and that the 
contracting officer considers to be necessary for the rehabilitation of 
the trainee. VA will negotiate the costs of special services or courses 
before paying them.


831.7001-3  Books, supplies, and equipment required to be personally 
owned.

    (a) Reimbursement for supplies (including books, equipment, or 
other supplies) will be made as provided in this section.
    (b) VA will provide reimbursement for those supplies that all 
students taking the same course or courses are customarily required to 
own personally. In addition, VA may provide reimbursement for items 
that the school does not specifically require for pursuit of the 
course, but that VA determines are needed because of the demands of the 
course, general possession by other students, and the disadvantage 
imposed on a veteran by not having the item. In no instance will VA 
provide reimbursement for supplies in a greater variety, quality, or 
amount than required of nonveteran students. In this instance, an item 
is not considered to be required if it is ``requested'' or ``desirable 
to have'' or ``necessary for a future profession or job but not 
required by the institution of all students in the course''.
    (c) When supplies are available in several prices, grades, or 
qualities, VA will provide reimbursement only for that quality or grade 
that will meet the requirements.
    (d) Partial payment agreements, in which VA shares payment with the 
veterans, are not allowed.
    (e) The institution's costs in connection with a veteran's thesis 
are considered supplies and are therefore authorized for reimbursement 
if the veteran's committee chairman, major professor, department head, 
or appropriate dean certifies that the thesis is a course requirement 
and the expenses are required to complete the thesis. These expenses 
may include research expenses, typing, printing, microfilming, or 
otherwise reproducing the required number of copies.
    (f) When the institution operates a bookstore or supply store for 
all students, reimbursement to the bookstore or supply store for 
supplies issued to trainees will be no greater than charges made to 
nonveteran students.
    (g) When the institution, training establishment, or employer 
arranges for stores or other non-institutionally owned establishments 
to issue supplies to all students and a veteran is to pay the store or 
establishment for supplies issued to trainees, VA will provide 
reimbursement for those charges if they are no greater than those 
nonveterans pay or paid to the institutions, whichever is the lesser.
    (h) Supplies that the institution purchases specifically for 
trainees will be reimbursed at the net cost to the institution.
    (i) When the institution does not provide or arrange for issuance 
of generally required books, tools and supplies for students attending 
the facility, the institution, in cooperation with VA, may designate 
certain stores and establishments to provide generally required books, 
tools and supplies for veterans pursuing a vocational rehabilitation 
program. The vendor will be reimbursed in the same manner as for 
supplies provided or arranged for by the institutions.
    (j) When it is customary in a survey class to permit each student 
to rent books for the subject (commonly referred to as a rental set), 
and the student is not required to own the books/materials, 
reimbursement is authorized for the rental charge as long as it does 
not exceed the charge made to nonveteran students.
    (k) Educational and training institutions that furnish supplies to 
trainees that all students pursuing the same or similar course are 
required to own personally or obtain may be compensated for furnishing 
the supplies in an amount not exceeding 10 percent of the allowable 
charge for the supplies furnished or rented subject to the following 
conditions:
    (1) When the tuition covers the charges for supplies or rentals or 
a stipulated fee is assessed to all students, handling charges are not 
allowable.
    (2) The handling charge is not allowable for Government-owned books 
that the institution procures from the Library of Congress.


831.7001-4  Medical services and hospital care.

    (a) VA may pay the customary student health fee when payment of the 
fee is required for similarly circumstanced nonveterans. If payment of 
the fee is not required for similarly circumstanced nonveterans, 
payment may be made if it is determined by the Veterans Health 
Administration that payment is in the best interest of the veteran and 
the Government.
    (b) When the customary student's health fee does not cover medical 
services or hospital care, but these medical services are available in 
a school-operated facility or with doctors and hospitals in the 
immediate area through a prior arrangement, the Veterans Benefits 
Administration may provide reimbursement for these services in a 
contract for the services if:

[[Page 2386]]

    (1) An arrangement is necessary to provide timely medical services 
for veterans attending the facility under provisions of Chapter 31; and
    (2) The general rates established for medical services do not 
exceed the rates established by the Under Secretary for Health.
    (c) VA may reimburse a rehabilitation facility for incidental 
medical services provided during a veteran's program at the facility.


831.7001-6  Consumable instructional supplies.

    (a) VA will provide reimbursement for consumable instructional 
supplies that the institution require for the instruction of all 
students, veteran or nonveteran, pursuing the same or comparable course 
or courses when:
    (1) The supplies are entirely consumed in the fabrication of a 
required project; or
    (2) The supplies are not consumed but are of such a nature that 
they cannot be salvaged from the end product for reuse by disassembling 
or dismantling the end product.
    (b) VA will not provide reimbursement for consumable instructional 
supplies if any of the following apply:
    (1) The supplies can be salvaged for reuse.
    (2) The supplies are used in a project that the student has elected 
as an alternate class project to produce an end product of greater 
value than that normally required to learn the skills of the occupation 
and the end product will become the veteran's property upon completion.
    (3) The supplies are used in a project that the institution has 
selected to provide the student with a more elaborate end product than 
is required to provide adequate instruction as an inducement to the 
veteran to elect a particular course of study.
    (4) The sale value of the end product is equal to or greater than 
the cost of supplies plus assembly, and the supplies have not been 
reasonably used so that the supplies are not readily salvaged from the 
end product to be reused for instructional purposes.
    (5) The end product is of permanent value and retained by the 
institution.
    (6) A third party loans the articles or equipment for repair or 
improvement and the third party would otherwise pay a commercial price 
for the repair or improvement.
    (7) The number of projects resulting in end products exceeds the 
number normally required to teach the recognized job operations and 
processes of the occupation stipulated in the approved course of study.
    (8) The cost of supplies is included in the charge for tuition or 
as a fee designated for such purpose.


831.7001-7  Reimbursement for other supplies and services.

    VA will provide reimbursement for other services and assistance 
that may be authorized under provisions of applicable Chapter 31 
regulations, including, but not limited to, employment and self-
employment services, initial and extended evaluation services, and 
independent living services.

PART 832--CONTRACT FINANCING

Sec.
832.006 Reduction or suspension of contract payments upon finding of 
fraud.
832.006-1 General.
832.006-2 Definitions.
832.006-3 Responsibilities.
832.006-4 Procedures.
Subpart 832.1--Non-Commercial Item Purchase Financing
832.111 Contract clauses for non-commercial purchases.
Subpart 832.2--Commercial Item Purchase Financing
832.201 Statutory authority.
832.202 General.
832.202-1 Policy.
832.202-4 Security for Government financing.
Subpart 832.4--Advance Payments for Non-Commercial Items
832.402 General.
832.404 Exclusions.
Subpart 832.5--Progress Payments Based on Costs
832.502 Preaward matters.
832.502-2 Contract finance office clearance.
Subpart 832.8--Assignment of Claims
832.805 Procedure.
832.805-70 Distribution/notification of assignment of claims.
Subpart 832.9--Prompt Payment
832.904 Determining payment due dates.
Subpart 832.11--Electronic Funds Transfer
832.1106 EFT mechanisms.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.


832.006  Reduction or suspension of contract payments upon finding of 
fraud.


832.006-1  General.

    The SPE is authorized to make determinations that there is 
substantial evidence that contractors' requests for advance, partial, 
or progress payments are based on fraud and may direct that further 
payments to the contractors be reduced or suspended, as provided in FAR 
32.006. This authority may not be redelegated.


832.006-2  Definitions.

    The remedy coordination official for VA is the DSPE.


832.006-3  Responsibilities.

    VA personnel must report suspected fraud related to advance, 
partial, or progress payments to the DSPE and VA Office of Inspector 
General. The report must include all available information supporting 
the suspicion.


832.006-4  Procedures.

    (a) Any recommendation from a VA employee through the DSPE to the 
SPE to reduce or suspend payment to a contractor under FAR 32.006 must 
address the considerations in FAR 32.006-4(d).
    (b) The DSPE shall carry out the responsibilities of the Secretary 
or designee in FAR 32.006-4(e) to notify the contractor of proposed 
action under FAR 32.006. The notice of proposed action will be sent to 
the last known address of the contractor, the contractor's counsel, or 
agent for service of process, by certified mail, return receipt 
requested, or any other method that provides signed evidence of 
receipt. In the case of a business, the notice of proposed action may 
be sent to any partner, principal, officer, director, owner or co-
owner, or joint venture. The contractor will be afforded an opportunity 
to appear before the DSPE to present information or argument in person 
or through a representative. The contractor may supplement the oral 
presentation with written information and argument. The proceedings 
will be conducted in an informal manner and without the requirement for 
a transcript. If the DSPE does not receive a reply from the contractor 
within 30 calendar days, the DSPE will base his or her recommendations 
on the information available. Any recommendation of the DSPE under 
paragraph (a) of this section must address the results of this 
notification and the information, if any, provided by the contractor.
    (c) The SPE must provide a copy of each final determination and the 
supporting documentation to the contractor, the DSPE and the 
contracting officer. The contracting officer will place a copy of the 
determination and the supporting documentation in the contract file.

Subpart 832.1--Non-Commercial Item Purchase Financing


832.111  Contract clauses for non-commercial purchases.

    In solicitations and contracts for construction that include the 
FAR clause at 52.232-5, Payments under

[[Page 2387]]

Fixed-Price Construction Contracts, the contracting officer must insert 
the following clauses:
    (a) If the solicitation or contract does not contain a section 
entitled ``Network Analysis System (NAS),'' the contracting officer 
must insert the clause at 852.236-82, Payments under Fixed-Price 
Construction Contracts (Without NAS). When the solicitation or contract 
includes guarantee period services, the contracting officer must use 
the clause with its Alternate I.
    (b) If the solicitation or contract contains a section entitled 
``Network Analysis System (NAS),'' the contracting officer must insert 
the clause at 852.236-83, Payments under Fixed-Price Construction 
Contracts (Including NAS). When the solicitation or contract includes 
guarantee period services, the contracting officer must use the clause 
with its Alternate I.

Subpart 832.2--Commercial Item Purchase Financing


832.201  Statutory authority.

    The contracting officer may make the determination that terms and 
conditions for payment for commercial items are appropriate and 
customary in the commercial marketplace and are in the best interest of 
the Government, provided the terms and conditions for payment do not 
conflict with FAR Subpart 32.2.


832.202  General.


832.202-1  Policy.

    As provided in FAR 32.202-1(d), contracting officers must obtain 
the approval of the DSPE before awarding a contract that includes 
unusual contract financing. The contracting officer must fully support 
the request with the reasons why the proposed unusual contract 
financing is in the best interest of the Government. In addition, 
contracting officers must not use commercial interim payment or 
commercial advance payment terms in solicitations or contracts without 
the approval of the DSPE.


832.202-4  Security for Government financing.

    An offeror's financial condition may be considered adequate 
security to protect the Government's interest when the Government 
provides contract financing. In assessing the offeror's financial 
condition, the contracting officer may obtain, to the extent required, 
the following information to establish the offeror's financial 
capability and to determine the offeror's financial condition:
    (a) A current year interim balance sheet and income statement and 
balance sheets and income statements for the two preceding fiscal 
years. The statements should be prepared in accordance with generally 
accepted accounting principles and must be audited and certified by an 
independent public accountant or an appropriate officer of the firm.
    (b) A cash flow forecast for the remainder of the contract term 
showing the planned origin and use of cash within the firm or branch 
performing the contract.
    (c) Information on financing arrangements disclosing the 
availability of cash to finance contract performance, the contractor's 
exposure to financial crisis, and credit arrangements.
    (d) A statement of the status of all State, local, and Federal tax 
accounts, including any special mandatory contributions.
    (e) A description and explanation of the financial effects of any 
leases, deferred purchase arrangements, patent or royalty arrangements, 
insurance, planned capital expenditures, pending claims, contingent 
liabilities, and other financial aspects of the business.
    (f) Any other financial information deemed necessary.
    (g) A Dun and Bradstreet Report on the company.

Subpart 832.4--Advance Payments for Non-Commercial Items


832.402  General.

    Authority to make the determination required by FAR 
32.402(c)(1)(iii) and to approve contract terms, as provided by FAR 
32.402(e)(1), is delegated to the SPE and is further delegated to the 
DSPE. Before award, contracting officers must submit a request for 
approval to use advance payment to the DSPE. The request must include 
the information required by FAR 32.409-1 and must address the standards 
for advance payment in FAR 32.402(c)(2).


832.404  Exclusions.

    (a) Under 31 U.S.C. 3324(d)(2), VA allows advance payment for 
subscriptions or other charges for newspapers, magazines, periodicals, 
and other publications for official use, notwithstanding the provisions 
of 31 U.S.C. 3324(a). The term ``other publications'' includes any 
publication printed, microfilmed, photocopied or magnetically or 
otherwise recorded for auditory or visual use.
    (b) Under 31 U.S.C. 1535, VA allows advance payment for services 
and supplies obtained from another Government agency.
    (c) Under 5 U.S.C. 4109, VA allows advance payment for all or any 
part of the necessary expenses for training Government employees in 
Government or non-Government facilities, including the purchase or 
rental of books, materials, and supplies or services directly related 
to the training of a Government employee.

Subpart 832.5--Progress Payments Based on Costs


832.502  Preaward matters.


832.502-2  Contract finance office clearance.

    Contracting officers must obtain approval from the DSPE before 
taking the actions listed in FAR 32.502-2. Full justification and the 
recommendations of the contracting officer must accompany requests for 
approval.

Subpart 832.8--Assignment of Claims


832.805  Procedure.


832.805-70  Distribution/notification of assignment of claims.

    (a) The contracting officer must:
    (1) File the retained copy of the notice of assignment and the 
certified copy of the original instrument of assignment with the 
Government Accountability Office copy of the contract; and
    (2) Forward a copy of the notice of assignment and instrument of 
assignment to the local finance office and to the payment office cited 
in the contract.
    (b) Contracting officers must notify field facilities of any 
recognized assignment of payments for contracts under which payment for 
articles and services is certified and approved for payment in the 
field.

Subpart 832.9--Prompt Payment


Sec.  832.904  Determining payment due dates.

    (a) When preparing specification packages, contracting officers 
must give full consideration to the time reasonably required for 
constructive acceptance or approval of the goods or services and for 
making invoice payments. Based on this analysis, contracting officers 
may, when authorized by FAR 32.904, modify the number of days allowed 
for notifying contractors of defects in invoices or, for construction 
solicitations, the number of days allowed for payment of invoices 
specified in the applicable prompt payment clause. Changes, if any, 
should be made before issuing the solicitation.
    (b)(1) For construction solicitations, the analysis specified in 
paragraph (a) of this section may routinely take more than the 7 days 
provided in paragraph (a)(2) of the FAR clause at 52.232-27,

[[Page 2388]]

Prompt Payment for Construction Contracts, to evaluate and return 
defective progress payment invoices.
    (2) It also may take more than the 14 days provided in paragraph 
(a)(1)(i)(A) of the prompt payment clause to adequately inspect the 
work, determine the adequacy of the contractor's performance, approve, 
and pay progress payment invoices.
    (3) Contracting officers should consider the following and, if 
necessary, revise the number of days stated in paragraphs (a)(2) and 
(a)(1)(i)(A) of the prompt payment clause before issuing construction 
solicitations (see FAR 32.904(d)(1)(i)):
    (i) Recent interest payment history.
    (ii) The complexity of the project.
    (iii) Workload.
    (iv) Work site location.
    (4) In no event may the number of days be set in excess of 14 days 
for return of a defective progress payment invoice or 30 days for 
payment of the invoice.

Subpart 832.11--Electronic Funds Transfer


832.1106  EFT mechanisms.

    (a) The Assistant Secretary for Management may, with the 
concurrence of the Department of the Treasury office responsible for 
making payment, authorize the use of EFT mechanisms other than those 
authorized under FAR 32.1106(a).
    (b) The Assistant Secretary for Management may, with the 
concurrence of the Department of the Treasury office responsible for 
making payment, authorize the use of EFT for payments to be received by 
or on behalf of a contractor outside the United States or Puerto Rico 
or for contracts paid in other than United States currency, as provided 
in FAR 32.1106(b).

PART 833--PROTESTS, DISPUTES, AND APPEALS

Subpart 833.1--Protests
Sec.
833.102 General.
833.103 Protests to VA.
833.104 Protests to GAO.
833.106 Solicitation provision and contract clause.
Subpart 833.2--Disputes and Appeals
833.209 Suspected fraudulent claims.
833.211 Contracting officer's decision.
833.212 Contracting officer's duties upon appeal.
833.213 Obligation to continue performance.
833.214 Alternative dispute resolution (ADR).
833.215 Contract clause.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 833.1--Protests


833.102  General.

    Solicitations must instruct interested parties (see FAR provision 
52.233-2) to send a copy of any protest filed with the Government 
Accountability Office (GAO) to the contracting officer and the 
appropriate VA Central Office activity as follows:
    (a) For contracts to be awarded by the Office of Facilities 
Management: Chief Facilities Management Officer, Office of Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (b) For all other contracts: Deputy Assistant Secretary for 
Acquisition and Materiel Management, Department of Veterans Affairs, 
810 Vermont Avenue, NW., Washington, DC 20420.


833.103  Protests to VA.

    (a) Filing of protests. (1) An interested party may protest to the 
contracting officer or, as an alternative, may request an independent 
review by filing a protest with the DAS for A&MM, or for solicitations 
issued by the Office of Facilities Management, the Chief Facilities 
Management Officer, Office of Facilities Management. A protest filed 
with the DAS for A&MM or the Chief Facilities Management Officer will 
not be considered if the interested party has a protest on the same or 
similar issues pending with the contracting officer.
    (2) Protests to the contracting officer must be in writing and 
addressed where offer/bid is to be submitted.
    (3) Protests requesting an independent review must be in writing 
and addressed to the Deputy Assistant Secretary for Acquisition and 
Materiel Management, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420; or, for solicitations issued by the 
Office of Facilities Management, to the Chief Facilities Management 
Officer, Office of Facilities Management, Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Washington, DC 20420.
    (4) The following types of protests may be dismissed by VA without 
consideration of the merits or forwarded to another agency for 
appropriate action.
    (i) Contract administration. Disputes between a contractor and VA 
are resolved under the disputes clause of the contract and the Contract 
Disputes Act of 1978. (41 U.S.C. 601-613).
    (ii) Small business size standards and standard industrial 
classification. Challenges of established size standards or the size 
status of particular firms, and challenges of the selected standard 
industrial classification are for review solely by the Small Business 
Administration. (15 U.S.C. 637(b)(6); 13 CFR 121.1002).
    (iii) Small business certificate of competency program. A protest 
made under section 8(b)(7) of the Small Business Act, or in regard to 
any issuance of a certificate of competency or refusal to issue a 
certificate under that section, is not reviewed in accordance with bid 
protest procedures unless there is a showing of possible fraud or bad 
faith on the part of Government officials.
    (iv) Protests under section 8(a) of the Small Business Act. The 
decision to place or not to place a procurement under the 8(a) program 
is not subject to review unless there is a showing of possible fraud or 
bad faith on the part of Government officials or that regulations may 
have been violated. (15 U.S.C. 637(a)).
    (v) Affirmative determination of responsibility by the Contracting 
Officer. An affirmative determination of responsibility will not be 
reviewed unless there is a showing that such determination was made 
fraudulently or in bad faith or that definitive responsibility criteria 
in the solicitation were not met.
    (vi) Walsh-Healey Public Contract Act. Challenges of the legal 
status of a firm as a regular dealer or manufacturer within the meaning 
of the Walsh-Healey Act is determined solely by the procuring agency, 
the Small Business Administration (if a small business is involved), 
and the Secretary of Labor. (41 U.S.C. 35-45).
    (vii) Subcontractor protests. The contracting agency will not 
consider subcontractor protests except where the subcontract is by or 
for the Government.
    (viii) Judicial proceedings. The contracting agency will not 
consider protests where the matter involved is the subject of 
litigation before a court of competent jurisdiction.
    (b) Alternative dispute resolution. Bidders/offerors and VA 
contracting officers are encouraged to use alternative dispute 
resolution (ADR) procedures to resolve protests at any stage in the 
protest process. The VA Board of Contract Appeals (VABCA) is an 
independent and neutral entity within VA and is available to serve as 
the third-party neutral (Neutral) for bid protests. If ADR is used, VA 
will not furnish any documentation in an ADR proceeding beyond what is 
allowed by the FAR.
    (c) Action upon receipt of protest. For protests filed with the 
contracting officer, the HCA will be the approving official for the 
determinations identified in FAR 33.103(f)(1) and (f)(3). If the HCA is 
also the contracting officer, the

[[Page 2389]]

approving official will be the DAS for A&MM. For protests filed with 
the DAS for A&MM or the Chief Facilities Management Officer, Office of 
Facilities Management, those individuals will be the approving 
officials for the determinations identified in FAR 33.103(f)(1) and 
(f)(3).
    (d) Requests for GAO advance decisions. When a written protest has 
been filed with the contracting officer and the contracting officer 
considers it desirable to do so, the contracting officer may request an 
advance decision from the Comptroller General. The contracting officer 
must send the submission to the Comptroller General through the DAS for 
A&MM or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, and must include the material listed in FAR 
33.104(a). The contracting officer must promptly notify the protesting 
individual or firm in writing of the decision of the Comptroller 
General.
    (e) Protest after award. When a written protest is filed with the 
contracting officer after contract award, the following requirements 
apply:
    (1) If FAR 33.103(f)(3) requires suspension of contract 
performance, the contracting officer must seek to obtain a mutual 
agreement with the contractor to suspend performance on a no-cost 
basis. If unsuccessful, the contracting officer must issue a stop-work 
order in accordance with contract clause FAR 52.233-3, Protest after 
Award.
    (2) If suspension of contract performance is not required by FAR 
33.103(f)(3) and if the contracting officer determines that the award 
was proper, the contracting officer must furnish the protester a 
written explanation of the basis for the award that is responsive to 
the allegations of the protest. The contracting officer will advise the 
protester that the protester may appeal the determination to one of the 
following:
    (i) The DAS for A&MM.
    (ii) The Chief Facilities Management Officer, Office of Facilities 
Management, in the case of a contract awarded by the Office of 
Facilities Management.
    (iii) The Comptroller General.
    (3) If suspension of contract performance is not required by FAR 
33.103(f)(3) but the contracting officer determines that the award is 
questionable, the contracting officer, after consulting with OGC, will 
advise the contractor of the protest and invite the contractor to 
submit comments and relevant information. The contracting officer must 
submit the case promptly to the DAS for A&MM, for advice. The DAS for 
A&MM may consult with OGC and will either advise the contracting 
officer of the appropriate action to take, or submit the case to the 
Comptroller General, through the Assistant Secretary for Management, 
for a decision. The contracting officer will provide interested parties 
with a copy of the final decision.
    (f) Agency appellate review of the contracting officer's protest 
decision. An interested party may request an independent review of a 
contracting officer's protest decision by filing an appeal with the DAS 
for A&MM or, for solicitations issued by the Office of Facilities 
Management, with the Chief Facilities Management Officer, Office of 
Facilities Management. To be considered timely, the appeal must be 
received by the appropriate officer named in this paragraph within 10 
calendar days of the date the interested party knew, or should have 
known, whichever is earlier, of the basis for the appeal. Appeals must 
be addressed as provided in paragraph (a)(2) of this section. Appeals 
do not extend GAO's timeliness requirements for appeals to GAO. By 
filing an appeal as provided in this paragraph, an interested party may 
waive its rights to further appeal to the Comptroller General at a 
later date. Agency responses to appeals submitted to the agency shall 
be reviewed and concurred in by OGC (025).


833.104  Protests to GAO.

    (a) General procedures. (1) Procedures for protests to the 
Government Accountability Office (GAO) are at 4 CFR Part 21 (GAO Bid 
Protest Regulations). If guidance concerning GAO procedure in this 
section differs from 4 CFR Part 21, 4 CFR Part 21 applies.
    (2) When a protest before or after award has been filed with GAO, 
the contracting officer must submit a report to the DAS for A&MM, or 
the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, within 5 workdays after receipt of verbal 
or written notice of the protest, whichever occurs first. The report 
must include a copy of the documentation indicated in FAR 33.104(a)(3).
    (3) Contracting officers are responsible for the notification 
procedures outlined in FAR 33.104(a)(4).
    (b) Protests before award. When VA receives notice from GAO of a 
pre-award protest filed directly with GAO, award will normally not be 
made until the matter is resolved. However, award may be made despite 
the protest if the DAS for A&MM, or the Chief Facilities Management 
Officer, Office of Facilities Management, as appropriate, approves the 
findings of the HCA required by FAR 33.104(b)(1) and GAO has been 
notified as provided by FAR 33.104(b)(2). The Director, Acquisition 
Resources Service, or the Chief Facilities Management Officer, as 
appropriate, is responsible for notifying GAO.
    (c) Protests after award. When, after award of a contract, VA 
receives notice from GAO of a protest filed directly with GAO, the 
contracting officer must, if required to do so by FAR 33.104(c)(1), 
immediately suspend performance. However, contract performance need not 
be suspended, despite the protest, if the SPE approves the HCA's 
findings required by FAR 33.104(c)(2) and GAO has been notified under 
FAR 33.104(c)(3). Authority to approve the HCA's findings is further 
delegated to the DSPE and, for solicitations issued by the Officer of 
Facilities Management, the Chief Facilities Management Officer. The 
Director, Acquisition Resources Service, or the Chief Facilities 
Management Officer, as appropriate, is responsible for notifying GAO.


833.106  Solicitation provisions.

    (a) The contracting officer will insert the provision at 852.233-
70, Protest Content/Alternative Disputes Resolution, in each 
solicitation expected to exceed the simplified acquisition threshold.
    (b) The contracting officer must insert the provision at 852.233-
71, Alternative Protest Procedure, in solicitations expected to exceed 
the simplified acquisition threshold.

Subpart 833.2--Disputes and Appeals


833.209  Suspected fraudulent claims.

    The contracting officer must refer matters relating to suspected 
fraudulent claims to the Office of Inspector General for investigation 
and referral to the Department of Justice. The contracting officer may 
not initiate any collection, recovery, or other settlement action while 
the matter is in the hands of the Department of Justice without first 
obtaining the concurrence of the U.S. Attorney concerned, through the 
Office of Inspector General.


833.211  Contracting officer's decision.

    (a) When a dispute cannot be settled by agreement and a final 
decision under the Disputes clause of the contract is necessary, the 
contracting officer must furnish the contractor the contracting 
officer's final decision in the matter.
    (b) The contracting officer must identify the decision, in writing, 
as a final decision and include a statement of facts in sufficient 
detail to enable the contractor to fully understand the

[[Page 2390]]

decision and the basis on which it was made. The decision must set 
forth those facts relevant to the dispute with which the contractor and 
the contracting officer are in agreement, and as clearly as possible, 
the area of disagreement.
    (c) The decision shall, in addition to the material required by FAR 
33.211(a)(4), contain the following statement:

    The VA Board of Contract Appeals (VABCA) is the authorized 
representative of the Secretary for hearing and determining such 
disputes. The rules of the VABCA are published in section 1.783 of 
title 38, Code of Federal Regulations. The address of the Board is: 
VA Board of Contract Appeals (09), 810 Vermont Avenue, NW., 
Washington, DC 20420.


833.212  Contracting officer's duties upon appeal.

    (a) When a contracting officer receives notice of appeal in any 
form, the contracting officer must do the following:
    (1) Annotate the appeal with the date of mailing (or date of 
receipt, if otherwise conveyed).
    (2) Within 10 days, forward the original notice of appeal and a 
copy of the contracting officer's final decision letter to the VABCA.
    (3) Concurrently transmit copies of the notice of appeal and the 
final decision letter to the DAS for A&MM and OGC. (In cases of 
construction contracts administered by the Office of Facilities 
Management, copies of the appeal and the final decision letter need not 
be transmitted to the DAS for A&MM but instead should be sent to the 
Chief Facilities Management Officer.)
    (b) Within 20 days of receipt of an appeal, or advice that an 
appeal has been filed, the contracting officer must assemble and 
transmit to the VABCA, through OGC, an appeal file consisting of all 
documents pertinent to the appeal, including all of the following:
    (1) The decision and findings of fact that are being appealed.
    (2) The contract, including specifications and pertinent 
amendments, plans and drawings.
    (3) All correspondence between the parties pertinent to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued.
    (4) Transcripts of any testimony taken during the course of 
proceedings and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal with the 
VABCA.
    (5) Any additional information considered pertinent.


833.213  Obligation to continue performance.

    (a) As provided in FAR 33.213, contracting officers shall use FAR 
clause 52.233-1, Disputes, with its Alternate I. Clause 52.233-1 
requires the contractor to continue performance in accordance with the 
contracting officer's decision in the event of a claim arising under a 
contract. Alternate I expands this authority, adding a requirement for 
the contractor to continue performance in the event of a claim relating 
to the contract.
    (b) In the event of a dispute not arising under, but relating to, 
the contract, if the contracting officer directs continued performance, 
the contracting officer may consider providing financing for the 
continued performance, provided, that the Government's interests are 
properly secured. The contracting officer will contact the DAS for A&MM 
and OGC for advice prior to authorizing such financing.


833.214  Alternative dispute resolution (ADR).

    (a) Contracting officers and contractors are encouraged to use 
alternative dispute resolution (ADR) procedures, by using VA's ADR 
Program, to resolve contract disputes before they become appealable 
disputes.
    (b) Under VA's ADR Program, the Chair of the VA Board of Contract 
Appeals (VABCA or Board), who is VA's Dispute Resolution Specialist, 
will appoint a Board member (at no cost to either party) to serve as a 
Neutral to aid in resolving matters before the matters become 
appealable disputes. The administrative judges are trained Neutrals and 
are available to assist in ADR proceedings.
    (c) In the event a Board member serves as a Neutral in a matter 
that is not resolved using ADR, that Board member will keep all 
discussions confidential until the matter is finally resolved and may, 
at the request of either party involved, have no further input or 
contact with the parties or other Board members in subsequent Board 
activities relating to the dispute (ref. the Administrative Dispute 
Resolution Act, 5 U.S.C. 571-583; and FAR 33.214).
    (d) Contracting officers and contractors are also encouraged to use 
ADR in disputes that have already been appealed to the VABCA.


833.215  Contract clause.

    The contracting officer must use the clause at 52.233-1, Disputes, 
with its Alternate I (see 833.213).

Subchapter F--Special Categories of Contracting

PART 836--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

Subpart 836.2--Special Aspects of Contracting for Construction
Sec.
836.202 Specifications.
836.203 Government estimate of construction costs.
836.204 Disclosure of the magnitude of construction projects.
836.206 Liquidated damages.
836.209 Construction contracts with architect-engineer firms.
836.213 Special procedures for sealed bidding in construction 
contracting.
836.213-4 Notice of award.
836.213-70 Notice to proceed.
Subpart 836.5--Contract Clauses
836.500 Scope of subpart.
836.501 Performance of work by the contractor.
836.513 Accident prevention.
836.521 Specifications and drawings for construction.
836.570 Correspondence.
836.571 Reference to ``standards.''
836.572 Government supervision.
836.573 Daily report of workers and materials.
836.574 Subcontracts and work coordination.
836.575 Schedule of work progress.
836.576 Supplementary labor standards provisions.
836.577 Worker's compensation.
836.578 Changes--supplement.
836.579 Special notes.
Subpart 836.6--Architect-Engineer Services
836.602 Selection of firms for architect-engineer contracts.
836.602-1 Selection criteria.
836.602-2 Evaluation boards.
836.602-4 Selection authority.
836.602-5 Short selection process for contracts not to exceed the 
simplified acquisition threshold.
836.603 Collecting data on and appraising firms qualifications.
836.606 Negotiations.
836.606-70 General.
836.606-71 Architect-engineer's proposal.
836.606-72 Contract price.
836.606-73 Application of 6 percent architect-engineer fee 
limitation.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 836.2--Special Aspects of Contracting for Construction


836.202  Specifications.

    (a) The procedures described in Part 811 are applicable to 
construction specifications.
    (b) During the design stage, contract architect-engineers must not 
use ``brand name or equal'' or other restrictive specifications without 
the prior written approval of the contracting officer. The

[[Page 2391]]

contracting officer must inform prospective architect-engineers of this 
requirement during the negotiation phase, prior to award of a contract 
for design.
    (c) If VA has determined that only one product will meet the 
Government's minimum needs and VA will not allow the submission of 
``equal'' products, the contracting officer must include the clause 
found at 852.236-90, Restriction on Submission and Use of Equal 
Products, in the solicitation and complete the clause by listing the 
items to which the clause applies. This clause places bidders on notice 
that the ``brand name or equal'' provisions of the clause found at FAR 
52.236-5, Materials and Workmanship, and any other provision that may 
authorize the submission of an ``equal'' product, will not apply to the 
specific items listed.


836.203  Government estimate of construction costs.

    The overall amount of the Government estimate must not be disclosed 
until after award of the contract. After award, the contracting officer 
may disclose the overall amount upon request.


836.204  Disclosure of the magnitude of construction projects.

    In lieu of the estimated price ranges described in FAR 36.204, the 
contracting officer must identify the magnitude of a VA project in 
advance notices and solicitations in terms of one of the following 
price ranges:
    (a) Less than $25,000.
    (b) Between $25,000 and $100,000.
    (c) Between $100,000 and $250,000.
    (d) Between $250,000 and $500,000.
    (e) Between $500,000 and $1,000,000.
    (f) Between $1,000,000 and $2,000,000.
    (g) Between $2,000,000 and $5,000,000.
    (h) Between $5,000,000 and $10,000,000.
    (i) Between $10,000,000 and $20,000,000.
    (j) Between $20,000,000 and $50,000,000.
    (k) Between $50,000,000 and $100,000,000.
    (l) More than $100,000,000


836.206  Liquidated damages.

    The contracting officer may include a liquidated damages provision 
in a construction contract when the criteria of FAR 11.501 and 811.501 
are met. If partial performance may be accepted and used to the 
advantage of the Government, the contracting officer must include the 
clause substantially as set forth in 852.211-74, Liquidated Damages, in 
addition to the clause set forth in FAR 52.211-12.


836.209  Construction contracts with architect-engineer firms.

    (a) When the contracting officer considers it necessary or 
advantageous to award a contract for construction of a design-bid-build 
project, as defined at FAR 36.102, to a firm or person that designed 
the project, the contracting officer must request prior approval from 
one of the following:
    (1) The facility or VISN director, as appropriate, or, for National 
Cemetery Administration contracts, the Director, Technical Support 
Service, for contracts involving nonrecurring maintenance (NRM) funds.
    (2) The Chief Facilities Management Officer, Office of Facilities 
Management, for contracts involving construction funds.
    (b) The contracting officer must furnish complete justification in 
the request.
    (c) This section does not apply to design-build contracts, as 
defined at FAR 36.102.


836.213  Special procedures for sealed bidding in construction 
contracting.


836.213-4  Notice of award.

    The contracting officer must provide to the contractor a notice of 
award (letter of acceptance) for any contract award in excess of 
$25,000.


836.213-70  Notice to proceed.

    (a) The contracting officer must provide construction contractors 
with a written notice to proceed with the work. A notice to proceed 
will normally be sent only after the contractor has provided 
performance and payment bonds or payment protection and the completed 
contract forms, where applicable, and the contracting officer has 
accepted them. If the urgency of the work or other proper reason 
requires the contractor to begin work immediately, the contracting 
officer may include in the award letter a notice to proceed, with the 
reservation that payments are contingent upon receipt and approval of 
the required bonds or payment protection.
    (b) If the contract provides for liquidated damages, the 
contracting officer must send the notice to proceed by certified mail, 
return receipt requested, or any other method that provides signed 
evidence of receipt. The notice to proceed will advise the contractor 
that the work must be completed within------ (insert contract time for 
completion) calendar days from the date of receipt shown on the 
certified mail receipt card returned by the post office or on the proof 
of delivery provided by the delivery service.
    (c) If the contract does not provide for liquidated damages, 
certified mail is not required. In notices to proceed for these 
contracts, the contracting officer must establish a date for completion 
that takes into consideration the time required for the notice to 
arrive by regular mail.
    (d) At the time the notice to proceed is sent to the contractor, 
the contracting officer must furnish a copy to the resident engineer or 
the Chief, Engineering Service.
    (e) The contracting officer must file a copy of the notice to 
proceed with copy A of the contract. When certified mail or other 
method of certified delivery is used, the contracting officer must 
attach the certified mail receipt card returned by the post office or 
the proof of delivery provided by the delivery service to the copy of 
the notice to proceed. The contracting officer must file copies of the 
notice to proceed with copies C and D of the contract after the date of 
receipt has been established and indicated on the notice to proceed.

Subpart 836.5--Contract Clauses


836.500  Scope of subpart.

    (a) The clauses and provisions prescribed in this subpart are set 
forth for use in fixed-price construction contracts in addition to 
those in FAR Subpart 52.2.
    (b) Additional clauses and provisions not inconsistent with those 
in FAR Subparts 36.5 and 52.2 and those prescribed in this subpart are 
authorized when determined necessary or desirable by the contracting 
officer, and when approved as provided in Subpart 801.4.
    (c) Clauses and provisions that differ from those contained in FAR 
Subparts 36.5 and 52.2 and this subpart, but considered essential to 
the procurement of VA requirements, shall not be used unless the 
deviation procedure set forth in Subpart 801.4 has been complied with.


836.501  Performance of work by the contractor.

    The contracting officer must insert the clause at 852.236-72, 
Performance of Work by the Contractor, in solicitations and contracts 
for construction that contain the FAR clause at 52.236-1, Performance 
of Work by the Contractor. When the solicitations or contracts include 
a section entitled ``Network Analysis System (NAS),'' the contracting 
officer must use the clause with its Alternate I.

[[Page 2392]]

836.513  Accident prevention.

    The contracting officer must insert the clause at 852.236-87, 
Accident Prevention, in solicitations and contracts for construction 
that contain the clause at FAR 52.236-13, Accident Prevention.


836.521  Specifications and drawings for construction.

    The contracting officer must insert the clause at 852.236-71, 
Specifications and Drawings for Construction, in solicitations and 
contracts for construction that include the FAR clause at 52.236-21, 
Specifications and Drawings for Construction.


836.570  Correspondence.

    The contracting officer must insert the clause at 852.236-76, 
Correspondence, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold for construction 
(currently $2,000).


836.571  Reference to ``standards.''

    The contracting officer must insert the clause at 852.236-77, 
Reference to ``Standards,'' in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold for 
construction.


836.572  Government supervision.

    The contracting officer must insert the clause at 852.236-78, 
Government Supervision, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold for construction.


836.573  Daily report of workers and materials.

    The contracting officer must insert the clause at 852.236-79, Daily 
Report of Workers and Materials, in solicitations and contracts for 
construction expected to exceed the simplified acquisition threshold. 
The contracting officer may, when in the best interest of the 
Government, insert the clause in solicitations and contracts for 
construction when the contract amount is expected to be at or below the 
simplified acquisition threshold.


836.574  Subcontracts and work coordination.

    The contracting officer must insert the clause at 852.236-80, 
Subcontracts and Work Coordination, in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold for 
construction. When the solicitations or contracts are for new 
construction work with complex mechanical-electrical work, the 
contracting officer may use the clause with its Alternate I.


836.575  Schedule of work progress.

    The contracting officer must insert the clause at 852.236-84, 
Schedule of Work Progress, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
for construction and that do not contain a section entitled ``Network 
Analysis System (NAS).''


836.576  Supplementary labor standards provisions.

    The contracting officer must insert the clause at 852.236-85, 
Supplementary Labor Standards Provisions, in solicitations and 
contracts for construction that are expected to exceed the micro-
purchase threshold for construction.


836.577  Worker's compensation.

    The contracting officer must insert the clause at 852.236-86, 
Worker's Compensation, in solicitations and contracts for construction 
that are expected to exceed the micro-purchase threshold for 
construction.


836.578  Changes--supplement.

    (a) The contracting officer must insert the clause at 852.236-88, 
Contract Changes--Supplement, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
for construction. (This section has been promulgated as a deviation 
from the FAR as provided in 801.4.)
    (b) When negotiated changes exceed $500,000, paragraph (a) of the 
clause at 852.236-88 will apply. Because paragraph (a) does not provide 
ceiling rates for indirect expenses, the contractor must furnish cost 
breakdowns and other supporting data on its rates for indirect expenses 
as part of its price proposal. The contracting officer must negotiate 
the rates for indirect expenses with the contractor and may request an 
audit in accordance with FAR 15.404-2.
    (c) When the negotiated change will be $500,000 or less, paragraph 
(b) of the clause at 852.236-88 will apply. Because the indirect cost 
rates in paragraph (b) of the clause at 852.236-88 are ceiling rates, 
the contracting officer must negotiate indirect expense rates within 
the ceiling limitations.


836.579  Special notes.

    The contracting officer must insert the clause at 852.236-91, 
Special Notes, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold for construction.

Subpart 836.6--Architect-Engineer Services


836.602  Selection of firms for architect-engineer contracts.


836.602-1  Selection criteria.

    (a) In addition to the evaluation criteria set forth in FAR 36.602-
1, the evaluation board must consider the factors set forth in 
paragraph (b) of this section as they apply to the project or purpose 
of the selection. Values must be assigned to each factor in determining 
the relative qualifications of the firms identified as qualified 
through the pre-selection process. The board may adjust the assigned 
values after its discussions.
    (b) The following factors must be considered:
    (1) Reputation and standing of the firm and its principal officials 
with respect to professional performance, general management, and 
cooperativeness.
    (2) Record of significant claims against the firm because of 
improper or incomplete architectural and engineering services.
    (3) Specific experience and qualifications of personnel proposed 
for assignment to the project and their record of working together as a 
team.


836.602-2  Evaluation boards.

    (a) The Chief Facilities Management Officer, Office of Facilities 
Management, shall appoint an evaluation board to select architect-
engineer contractors for Office of Facilities Management projects. The 
Director, Office of Construction Management, shall appoint an 
evaluation board to select architect-engineer contractors for National 
Cemetery Administration projects. The facility or VISN director, as 
appropriate, shall appoint an evaluation board to select architect-
engineer contractors for field facility projects.
    (b) The Director, A/E Evaluation and Program Support Service, will 
chair the evaluation board for Office of Facilities Management 
architect-engineer contracts. The Chair may designate the Project 
Director or Project Manager to act as Chair when necessary. When 
appointing the board's members, the Chief Facilities Management 
Officer, Office of Facilities Management, must include the appropriate 
Project Manager and as many qualified professional architects or 
engineers from the Office of Facilities Management technical services 
as may be considered appropriate for the particular project. The Chief 
Facilities Management Officer may designate additional members from the 
Office of Facilities Management or

[[Page 2393]]

from other Department administrations and staff offices when 
appropriate.
    (c) The Director, Office of Construction Management, shall ensure 
that the board consists of no fewer than three members, one of whom 
must be a National Cemetery Administration senior level contracting 
officer. The Director shall designate one of the board members as the 
Chair.
    (d) The evaluation board for a VA field facility must consist of no 
fewer than two members, one of whom will be the HCA (or the senior 
contracting officer at the facility if there is no HCA on site) and the 
other will be the Chief, Engineering Service, or their alternates. 
Where a facility has two or more engineers on its staff, the facility 
or VISN director must appoint an additional engineer to the board. The 
Chair of the board will be the senior engineer.


836.602-4  Selection authority.

    The Chief Facilities Management Officer, Office of Facilities 
Management (for Central Office contracts), the Director, Office of 
Construction Management (for National Cemetery Administration 
contracts), and the facility or VISN director (for field facility 
contracts), or persons acting in those capacities, are designated as 
the approving officials for the recommendations of the respective 
evaluation boards.


836.602-5  Short selection process for contracts not to exceed the 
simplified acquisition threshold.

    Either of the procedures provided in FAR 36.602-5 may be used to 
select firms for architect-engineer contracts that are not expected to 
exceed the simplified acquisition threshold.


836.603  Collecting data on and appraising firms qualifications.

    The Chief Facilities Management Officer, Office of Facilities 
Management, for Central Office; the Director, Office of Construction 
Management, for National Cemetery Administration; and the Chief, 
Engineering Service, for field facilities, are responsible for 
collecting Standard Forms 330 and maintaining a data file on architect-
engineer qualifications.


836.606  Negotiations.


836.606-70  General.

    To assure that the fee limitation is not violated, the contracting 
officer must maintain suitable records to be able to isolate the amount 
in the total fee to which the 6-percent limitation applies.


836.606-71  Architect-engineer's proposal.

    (a) When the contract price is estimated to be $50,000 or more, the 
contracting officer must use VA Form 10-6298, Architect-Engineer Fee 
Proposal, to obtain the proposal and supporting cost data from the 
contractor and subcontractor in the negotiation of architect-engineer 
contracts for design services.
    (b) In obtaining architect-engineer services for research study, 
seismic study, master planning study, construction management and other 
related services contracts, the contracting officer must use VA Form 
10-6298 supplemented or modified as needed for the particular project 
type.


836.606-72  Contract price.

    (a) Where negotiations with the top-rated firm are unsuccessful, 
the contracting officer shall, after authorization by the Chief 
Facilities Management Officer, Office of Facilities Management, the 
Director, Office of Construction Management, or the facility or VISN 
director, as appropriate, terminate the negotiations and undertake 
negotiations with the firm next in order of preference.
    (b) The contracting officer shall submit a recommendation for award 
of the contract at the negotiated fee to the Chief Facilities 
Management Officer, Office of Facilities Management, the Director, 
Office of Construction Management, or the facility or VISN director, as 
appropriate. A copy of the negotiation memorandum prepared in 
accordance with FAR 15.406-3 and, whenever a field pricing report has 
been received, a copy of the report must accompany the recommendation.


836.606-73  Application of 6 percent architect-engineer fee limitation.

    (a) The total cost of the architect or engineer services contracted 
for must not exceed 6 percent of the estimated cost of the construction 
project plus any fees for related services and activities such as those 
shown in paragraph (c) of this section.
    (b) To support project submissions, the engineering officer or 
project engineer must use VA Form 10-1193, Application for Health Care 
Facility Project, and Form 10-6238, EMIS Construction Program Estimate 
Worksheet, and must show the proposed technical services where 
necessary and applicable.
    (c) The 6-percent fee limitation does not apply to the following 
architect or engineer services:
    (1) Investigative services including but not limited to:
    (i) Determination of program requirements, including schematic or 
preliminary plans and estimates;
    (ii) Determination of feasibility of proposed project;
    (iii) Preparation of measured drawings of existing facility;
    (iv) Subsurface investigation;
    (v) Structural, electrical, and mechanical investigation of 
existing facility; and
    (vi) Surveys: topographic, boundary, utilities, etc.
    (2) Special consultant services that are not normally available in 
organizations of architects or engineers and that are not specifically 
applied to the actual preparation of working drawings or specifications 
of the project for which the services are required.
    (3) Other:
    (i) Reproduction of approved designs through models, color 
renderings, photographs, or other presentation media;
    (ii) Travel and per diem allowances other than those required for 
the development and review of working drawings and specifications;
    (iii) Supervision or inspection of construction, review of shop 
drawings or samples, and other services performed during the 
construction phase; and
    (iv) All other services that are not an integral part of the 
production and delivery of plans, designs, and specifications.
    (4) The cost of reproducing drawings and specifications for bidding 
and their distribution to prospective bidders and plan file rooms.

PART 837--SERVICE CONTRACTING

Subpart 837.1--Service Contracts--General
Sec.
837.103 Contracting officer responsibility.
837.110 Solicitation provisions and contract clauses.
837.110-70 Services provided to eligible beneficiaries.
Subpart 837.2--Advisory and Assistance Services
837.203 Policy.
Subpart 837.4--Nonpersonal Health Care Services
837.403 Contract clause.
Subpart 837.70--Mortuary Services
837.7001 General.
837.7002 List of qualified funeral directors.
837.7003 Funeral authorization.
837.7004 Administrative necessity.
837.7005 Unclaimed remains--all other cases.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 837.1--Service Contracts--General


837.103  Contracting officer responsibility.

    When the contracting officer determines that legal assistance is

[[Page 2394]]

necessary in determining whether a proposed service contract is for 
personal or non-personal services, the contracting officer will request 
a legal opinion from the appropriate Regional Counsel.


837.110  Solicitation provisions and contract clauses.

    The contracting officer shall insert the clause at 852.237-70 
Contractor Responsibilities, in solicitations and contracts for 
services.


837.110-70  Services provided to eligible beneficiaries.

    Contracting officers shall include the clause at 852.271-70, 
Nondiscrimination in Services Provided to Beneficiaries, in all 
solicitations and contracts covering services provided to eligible 
beneficiaries.

Subpart 837.2--Advisory and Assistance Services


837.203  Policy.

    The definition of advisory and assistance services includes, in 
addition to examples listed in FAR 37.203, services to obtain peer 
review of research proposals.

Subpart 837.4--Nonpersonal Health Care Services


837.403  Contract clause.

    The contracting officer shall insert the clause at 852.237-7, 
Indemnification and Medical Liability Insurance, in lieu of FAR Clause 
52.237-7, in solicitations and contracts for nonpersonal health-care 
services, including contracts awarded under the authority of 38 U.S.C. 
7409, 38 U.S.C. 8151-8153, and part 873. The contracting officer may 
include the clause in bilateral purchase orders for nonpersonal health-
care services awarded under the procedures in FAR Part 13 and Part 813.

Subpart 837.70--Mortuary Services


837.7001  General.

    This subpart establishes the policies and procedures governing the 
procurement of funeral and burial services for deceased beneficiaries 
of VA, as provided in 38 U.S.C. 2302, 2303, and 2308.


837.7002  List of qualified funeral directors.

    Contracting officers will establish, in coordination with cognizant 
Chief, Medical Administration Service (MAS) personnel or other 
personnel designated by the facility director to perform these 
functions, a list of funeral directors capable of performing the burial 
services specified in 837.7003. The contracting officer will attempt to 
establish a commitment to perform these services within the statutory 
limitation of $300 (see 38 U.S.C. 2302). Each funeral director must be 
fully licensed in the jurisdiction in which the business operates. If 
there has been no prior experience with the funeral director that would 
ensure the adequacy of the funeral director's services and casket, 
arrangements will be made before contract negotiation to inspect the 
premises and the casket to be provided, as well as to check with the 
local business bureau and/or Chamber of Commerce. (38 U.S.C. 2302)


837.7003  Funeral authorization.

    (a) When a veteran dies while receiving care in a VA health care 
facility or in a non-VA institution at VA's expense, and the decedent's 
remains are unclaimed, the Chief, MAS, or the person designated by the 
facility director to perform these functions, will forward to the HCA a 
properly executed VA form 10-2065, Funeral Arrangements, requesting 
that funeral and burial services for the deceased be procured.
    (b) The contracting officer will enter into negotiations with local 
funeral directors to procure a complete funeral and burial service 
within the statutory allowance of $300. The purchase order must list 
the specific services to be provided. The services must consist of the 
following:
    (1) Preparation of the body, embalming.
    (2) Clothing.
    (3) Casket. (The casket, at a minimum, must be constructed from 
thick, strong particle board and must be of sufficient strength to 
support the weight of an adult human body. Cardboard or press paper or 
similar materials are not acceptable.)
    (4) The securing of all necessary permits.
    (5) Ensuring that a United States flag (provided the funeral 
director in accordance with M-1, Part I, paragraph 14.40) accompanies 
the casket to place of burial.
    (c) An additional allowance for transportation of the body to the 
place of burial is provided in 38 U.S.C. 2308. This allowance will 
cover the transportation cost of shipment of the body by common carrier 
or by hearse from the VA facility to the funeral home and to the place 
of burial, any charges for an outside shipping box, and the charges for 
securing all necessary permits for removal or shipment of the body. 
These costs are not chargeable against the $300 allowance.
    (d) In accordance with M-1, Part I, paragraph 14.37, the 
contracting officer will designate the Chief, MAS, or the person 
designated by the facility director to perform these functions, to be 
responsible for the medical inspection of the mortuary services 
performed and inspection of the merchandise furnished. This designee 
will also be responsible for certifying receipt on the receiving 
report.
    (e) The HCA will assist the Chief, MAS, or the person designated by 
the facility director to perform these functions, in developing the 
local procedures specified in M-1, Part I, paragraph 14.37c. (38 U.S.C. 
2302, 2303, and 2308)


837.7004  Administrative necessity.

    (a) VA may make arrangements and assume expenses for local burial 
under separate contractual agreement when:
    (1) A person dies under VA care who is not legally entitled to such 
care at VA's expense;
    (2) No relatives or friends claim the remains; and
    (3) The municipal, county, or State officials refuse to provide for 
final disposition.
    (b) When the contracting officer cannot obtain a full and complete 
funeral and burial service as prescribed in 837.7003 within the 
statutory allowance, before taking any further action, the contracting 
officer will secure from the facility or VISN director, as appropriate, 
a written determination that VA must accomplish the disposition of the 
remains as an administrative necessity. The facility director will also 
authorize in writing the expenditure of such additional funds as may be 
necessary for this purpose.
    (c) The contracting officer will make the facility director's 
determination and authorization a part of the contract file. (38 U.S.C. 
2302)


837.7005  Unclaimed remains--all other cases.

    Requests for information on the disposition of the unclaimed 
remains of a veteran whose death occurs while not under the direct care 
or treatment of VA will be referred to the Veterans Services Officer 
for processing in accordance with M27-1, Part II.

PART 841--ACQUISITION OF UTILITY SERVICES

Subpart 841.1--General
Sec.
841.100 Scope of part.
841.103 Statutory and delegated authority.
Subpart 841.2--Acquiring Utility Services


841.201  Policy.

    Authority: 40 U.S.C. 121(c) and (d); and 48 CFR 1.301-1.304.

[[Page 2395]]

Subpart 841.1--General


841.100  Scope of part.

    This part prescribes procedures for obtaining delegations of 
authority to award contracts for utility connection charges and 
provides guidance on review requirements for such proposed contracts.


841.103  Statutory and delegated authority.

    (a) The Assistant Commissioner for Procurement, General Services 
Administration (GSA), has delegated the Secretary of Veterans Affairs 
authority to enter into public utility contracts for connection charges 
for utility services.
    (b) Except as provided in paragraph (a) of this section, the 
authority to award all other contracts for utility services, as defined 
in FAR 41.101, is vested in GSA (see FAR 41.103). VA contracting 
officers who wish to award local contracts for utility services, other 
than for connection charges, must first obtain a delegation of 
authority to award such contracts from GSA. Contracting officers shall 
submit requests for delegation of authority directly to GSA.
    (c) Any authority described in paragraphs (a) or (b) of this 
section delegated to the Secretary is further delegated to the SPE and 
is further delegated to the DSPE and to VA contracting officers within 
the limits of their warrants.

Subpart 841.2--Acquiring Utility Services


841.201  Policy.

    As required by 801.602-71, contracting officers must submit 
solicitations and proposed agreements for utility services exceeding 
$50,000 in total costs to the appropriate Acquisition Resources Service 
office for technical and legal review.

Subchapter G--Contract Management

PART 842--CONTRACT ADMINISTRATION AND AUDIT SERVICES

Sec.
842.000 Scope of part.
842.070 Definitions.
Subpart 842.1--Contract Audit Services
842.101 Contract audit responsibilities.
842.102 Assignment of contract audit services.
Subpart 842.7--Indirect Cost Rates
842.705 Final indirect cost rates.
Subpart 842.8--Disallowance of Costs
842.801 Notice of intent to disallow costs.
842.801-70 Audit assistance prior to disallowing costs.
842.803 Disallowing costs after incurrence.
Subpart 842.12--Novation and Change-of-Name Agreements
842.1203 Processing agreements.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.


842.000  Scope of part.

    This part applies to all contracts, whether awarded through sealed 
bidding or negotiation.


842.070  Definitions.

    Contract administration is the coordination of actions required for 
the performance of a contract. This includes the contracting officer's 
guidance and supervision necessary to assure that the contractor 
fulfills all contractual obligations.

Subpart 842.1--Contract Audit Services


842.101  Contract audit responsibilities.

    (a) Contracting officers must use the support services of other 
agencies to the extent feasible. Examples of such services include: 
pre-award surveys; quality assurance and technical inspection of 
contract items; and review of contractors' procurement systems. 
Contracting officers obtaining support services from any other 
Government department or agency must do so on the basis of an approved 
negotiated interagency support agreement.
    (b) An interagency support agreement is a written instrument of 
understanding between the parties to the agreement. The agreement 
should clearly state the following:
    (1) The accord reached between the two parties involved, especially 
the obligations assumed and the rights granted each party.
    (2) The resources that both the supplying and receiving parties 
will provide.
    (3) The funding and reimbursement arrangements.
    (4) Clauses permitting revisions, modifications, or cancellation of 
the agreement.


842.102  Assignment of contract audit services.

    (a) When required, contracting officers shall request the 
assistance of the VA Office of the Inspector General (OIG), Contract 
Review and Evaluation Division, to provide pre- and post-award audit, 
review, and advisory services associated with the award or modification 
of:
    (1) Federal Supply Schedule and other contracts awarded by the VA 
National Acquisition Center;
    (2) Scarce medical specialist or sharing contracts awarded under 
the authority of 38 U.S.C. 7409 or 8153, and;
    (3) Claims involving such contracts.
    (b) Contracting officers may request the assistance of either the 
VA OIG Contract Review and Evaluation Division or the Defense Contract 
Audit Agency (DCAA) to provide pre- and post-award audit, review, and 
advisory services associated with other types of contracts or claims.

Subpart 842.7--Indirect Cost Rates


842.705  Final indirect cost rates.

    (a) Except when the quick-closeout procedures described in FAR 
42.708 are used, contracting officers must request audits on proposed 
final indirect cost rates and billing rates for use in cost 
reimbursement, fixed-price incentive, and fixed-price redeterminable 
contracts as prescribed in FAR Subpart 42.7.
    (b) When the quick closeout procedures are used, the contracting 
officers must perform a review and validation of the contractor's data 
for accuracy and reasonableness of the proposed rates for negotiating 
the settlement of indirect costs for a specific contract.

Subpart 842.8--Disallowance of Costs


842.801  Notice of intent to disallow costs.


842.801-70  Audit assistance prior to disallowing costs.

    If a contracting officer determines that costs should be disallowed 
during the performance of a cost reimbursement, fixed-price incentive, 
or fixed-price redetermination contract exceeding the thresholds 
specified in FAR 15.403-4, the contracting officer must request audit 
assistance. The VA Office of Inspector General shall conduct audits of 
contracts for health care resources and contracting officers shall 
request such audits directly from that office. For all other types of 
contracts, the contracting officer must obtain an audit control number 
from Acquisition Resources Service and send a formal request to conduct 
the audit directly to the nearest Defense Contract Audit Agency (DCAA) 
office, referencing the audit control number and the project number (if 
any).


842.803  Disallowing costs after incurrence.

    Contracting officers may approve or disapprove contractors' 
vouchers for payment and process them to the servicing fiscal office. 
Such approval or disapproval must be within the limitations of the 
contracting officer, and the contract for which the voucher is 
submitted must be within the

[[Page 2396]]

contracting officer's delegation of contracting authority.

Subpart 842.12--Novation and Change-of-Name Agreements


842.1203  Processing agreements.

    Before execution of novation and change-of-name agreements, 
contracting officers must submit all supporting agreements and 
documentation to the OGC for review as to legal sufficiency.

PART 846--QUALITY ASSURANCE

Subpart 846.3--Contract Clauses
Sec.
846.302 Fixed-price supply contracts.
846.302-70 Guarantee clause.
846.302-71 Inspection.
846.302-72 Frozen processed foods.
846.302-73 Noncompliance with packaging, packing and/or marking 
requirements.
846.312 Construction contracts.
Subpart 846.4--Government Contract Quality Assurance
846.408 Single-agency assignments of Government contract quality 
assurance.
846.408-70 Inspection of subsistence.
846.408-71 Waiver of USDA inspection and specifications.
846.470 Use of commercial organizations for inspections and grading 
services.
846.471 Determination authority.
846.472 Inspection of repairs for properties under the Loan Guaranty 
and Direct Loan Programs.
846.472-1 Repairs of $1,000 or less.
846.472-2 Repairs in excess of $1,000.
Subpart 846.7--Warranties
846.710 Contract clauses.
846.710-70 Special warranties.
846.710-71 Warranty for construction--guarantee period services.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 846.3--Contract Clauses


846.302  Fixed-price supply contracts.


846.302-70  Guarantee clause.

    The contracting officer shall insert the clause at 852.246-70, 
Guarantee, in solicitations for the acquisition of equipment.


846.302-71  Inspection.

    The contracting officer shall include a ``Rejected Goods'' contract 
clause in solicitations and contracts as follows:
    (a) Except as provided in paragraph (b) of this section, insert the 
clause at 852.246-71, Inspection, in solicitations and contracts for 
the acquisition of supplies or equipment.
    (b) In solicitations and contracts for packing house and dairy 
products, bread and bakery products, and for fresh and frozen fruits 
and vegetables, insert the Alternate I clause at 852.246-71, 
Inspection.


846.302-72  Frozen processed foods.

    The contracting officer shall insert the clause at 852.246-72, 
Frozen Processed Foods, in solicitations and contracts for frozen 
processed foods.


846.302-73  Noncompliance with packaging, packing and/or marking 
requirements.

    The contracting officer shall insert the clause at 852.246-73, 
Noncompliance with Packaging, Packing and/or Marking Requirements, in 
non-commercial item solicitations and contracts for supplies or 
equipment where there are special packaging, packing and/or marking 
requirements. The clause may be used in commercial item acquisitions if 
a waiver is approved in accordance with FAR 12.302(c) and 812.302.


846.312  Construction contracts.

    The contracting officer shall insert the clause at 852.236-74, 
Inspection of Construction, in solicitations and contracts for 
construction that include the FAR clause at 52.246-12, Inspection of 
Construction.

Subpart 846.4--Government Contract Quality Assurance


846.408  Single-agency assignments of Government contract quality 
assurance.


846.408-70  Inspection of subsistence.

    (a) Before issuing a solicitation for subsistence, the contracting 
officer must determine whether:
    (1) Representatives of the U.S. Department of Agriculture (USDA) or 
the Department of Commerce will inspect for specification compliance 
before shipment; or
    (2) Personnel of the purchasing activity will inspect for 
specification compliance at the time of delivery.
    (b) The contracting officer must indicate the time and place of 
inspection in the solicitation.
    (c) Because the requirement for USDA or Department of Commerce 
inspections and certifications result in additional contractor costs 
that may be ultimately reflected in bid prices, the contracting 
officer, in consultation with the Chief, Nutrition and Food Service, 
must evaluate the need for such inspections. The evaluation must 
include the following:
    (1) The quality assurance already provided by other mandatory 
inspection systems.
    (2) The proposed suppliers' own quality control system.
    (3) Experience with the proposed suppliers.
    (4) The pre-qualifying of the suppliers' quality assurance systems 
and subsequently waiving inspections and certifications for future 
solicitations.
    (5) The cost of the inspections.
    (d) When the contracting officer indicates that either the USDA or 
the Department of Commerce will conduct the inspection, the contracting 
officer must also provide in the solicitation that the contractor is 
responsible for all of the following:
    (1) Arranging and paying for inspection services.
    (2) Obtaining from the inspectors a certificate indicating that the 
product complies with specifications.
    (3) Assuring that the certificate, or copy, accompanies the 
shipment or is furnished to the receiving installation before shipment, 
or notifying the installation when the certificate is not immediately 
available.
    (4) Seeing that acceptable products are covered by an inspection 
agency checkloading certificate or stamped by the inspector as 
prescribed by the contracting officer.
    (5) Furnishing samples for inspection at the contractor's expense.
    (6) Indicating the address where inspection will occur.
    (e) The contracting officer must furnish a copy of the purchase 
document to the inspecting activity.


846.408-71  Waiver of USDA inspection and specifications.

    (a) When the amount of an item to be purchased will not exceed 500 
pounds per delivery, the contracting officer may purchase the following 
without reference to the specifications in Part IV of the Federal 
Supply Catalog, Stock List, FSC Group 89, Subsistence, Publication No. 
C8900-SL, and the USDA inspection requirements:
    (1) Butter.
    (2) Cheese (except cottage cheese).
    (3) Sausage.
    (4) Meat food products*.
    (5) Bacon, smoked.
    (6) Bacon, Canadian style.
    (b) When the items listed in paragraph (a) of this section are 
procured together with items that are not exempt, the contracting 
officer must include the following in the solicitation:
    Items * * * are not required to be in accordance with the 
specifications contained in Part IV of the Federal Supply Catalog, 
Stock List, FSC Group 89, Subsistence, Publication No. C8900-SL, and 
the special USDA inspection is not required. VA will inspect for 
quality and condition upon delivery at destination. These items are, 
however, subject to the quality controls stated herein.

[[Page 2397]]

    (c) As appropriate, the contracting officer must include the 
following statements in each invitation for bid, request for proposal, 
quotation, or purchase order:
    (1) Butter. This product must be graded by the USDA and labeled 
``Grade A'' or the grade specified herein.
    (2) Sausage and meat food products.*
    (i) This product must be a high commercial product and must have 
been prepared in a federally inspected plant and bear the USDA 
establishment number stamp evidencing that it is sound, healthful, 
wholesome, and fit for human consumption; and
    (ii) This product must bear a label complying with the Federal 
Food, Drug and Cosmetic Act that requires the listing of all 
ingredients in the order of their predominance.
    (3) Bacon, smoked; and bacon, Canadian style. This product must be 
a high commercial product and must have been prepared in a federally 
inspected plant and bear the USDA establishment number stamp evidencing 
that it is sound, healthful, wholesome, and fit for human consumption.
    (d) When using a ``brand name or equal'' purchase description, the 
contracting officer must list every brand name item that is known to be 
acceptable and available in the area.
    *``Meat food products'' means processed foods containing meat in 
substantial proportion and other listed ingredients including 
seasoning, e.g., frankfurters, coldcuts. Whole or prefabricated meats, 
e.g., pork chops, hamburger, are considered meats, not meat food 
products.


846.470  Use of commercial organizations for inspections and grading 
services.

    The contracting officer may use a commercial organization for 
inspection and grading services when the contracting officer determines 
that all of the following conditions exist:
    (a) The results of a technical inspection or grading are dependent 
upon the application of scientific principles or specialized 
techniques.
    (b) VA is unable to employ the personnel qualified to properly 
perform the services and is unable to locate another Federal agency 
capable of providing the service.
    (c) The inspection or grading results issued by a private 
organization are essential to verify the acceptance of rejection of a 
special commodity.
    (d) The services may be performed without direct Government 
supervision.


846.471  Determination authority.

    The following must make the determinations required in 846.470:
    (a) The Chief Facilities Management Officer, Office of Facilities 
Management, for those items and services for which purchase authority 
has been assigned to the Office of Facilities.
    (b) The Director, Veterans Canteen Service, for those items and 
services purchased, or contracted for, by the Veterans Canteen Service 
(except those items purchased from VA supply sources).
    (c) The DSPE for all other supplies, equipment, and services.


846.472  Inspection of repairs for properties under the Loan Guaranty 
and Direct Loan Programs.

    As provided in 846.472-1 and 846.472-2, management brokers or 
qualified fee or staff inspectors must conduct a final inspection of 
all repair programs upon completion. In addition, the broker or 
inspector must conduct intermediate or progress inspections on 
extensive or technical jobs as specified in the contract.


846.472-1  Repairs of $1,000 or less.

    (a) Generally, the management broker must make any required 
inspections for repairs of $1,000 or less. A qualified fee or staff 
inspector must make any required inspection for repairs of $1,000 or 
less if the contracting officer:
    (1) Has not assigned the property to a management broker; or,
    (2) Has determined that the nature of the repairs requires 
supervision by a technician.
    (b) There is no form prescribed for inspection of repairs of $1,000 
or less, but the inspector may use VA Form 26-1839, Compliance 
Inspection Report. Regardless of the form in which the report is 
submitted, the inspector must identify the contractor, property, and 
the repair program and provide sufficient detail to enable the 
contracting officer to make a determination that the work is being 
performed satisfactorily or completed in accordance with the terms of 
the contract.


846.472-2  Repairs in excess of $1,000.

    (a) A qualified fee or staff inspector must make the final 
inspection and any intermediate or progress inspections on repairs 
exceeding $1,000.
    (b) The inspector must make the report of inspection on VA Form 26-
1839, Compliance Inspection Report. The inspector must identify the 
property, contractor, and repair program and provide sufficient 
detailed information to enable the contracting officer to make a 
determination that the work is being performed satisfactorily or that 
it has been completed in accordance with the terms of the contract. The 
inspector must itemize any deficiencies and explain the deficiencies in 
detail.

Subpart 846.7--Warranties


846.710  Contract clauses.

    The contracting officer shall insert the clause at FAR 52.246-21, 
Warranty of Construction, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.


846.710-70  Special warranties.

    The contracting officer shall insert the clause at 852.246-74, 
Special Warranties, in solicitations and contracts for construction 
that include the FAR clause at 52.246-21, Warranty of Construction.


846.710-71  Warranty for construction--guarantee period services.

    The contracting officer shall insert the clause at 852.246-75, 
Warranty of Construction `` Guarantee Period Services, in solicitations 
and contracts for construction that include the FAR clause at 52.246-
21, Warranty of Construction, and that also include guarantee period 
services.

PART 847--TRANSPORTATION

Subpart 847.3--Transportation in Supply Contracts
Sec.
847.303 Standard delivery terms and contract clauses.
847.303-1 F.o.b. origin.
847.303-70 F.o.b. origin, freight prepaid, transportation charges to 
be included on the invoice.
847.305 Solicitation provisions, contract clauses, and 
transportation factors.
847.305-70 Potential destinations known but quantities unknown.
847.306 Transportation factors in the evaluation of offers.
847.306-70 Transportation payment and audit.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 847.3--Transportation in Supply Contracts


847.303  Standard delivery terms and contract clauses.


847.303-1  F.o.b. origin.

    Shipments falling within this category must be shipped on a Bill of 
Lading, except as provided in 41 CFR 102-118.40. Contracting officers 
must comply with 41 CFR parts 102-117 and 102-118. Contact the Traffic 
Manager for assistance in determining when to issue the applicable bill 
of lading (VA Commercial Bill of Lading for domestic

[[Page 2398]]

use or Government Bill of Lading for international shipments and 
domestic off-shore shipments) and for all freight estimates.


847.303-70  F.o.b. origin, freight prepaid, transportation charges to 
be included on the invoice.

    (a) The delivery terms will be stated as ``f.o.b. origin, 
transportation prepaid, with transportation charges to be included on 
the invoice,'' under any of the following circumstances:
    (1) When it is determined that an f.o.b. origin purchase or 
delivery order will have transportation charges that do not exceed $250 
and the occasional exception does not exceed that amount by more than 
$50.
    (2) Single parcel shipments via express, courier, small package, or 
similar carriers, regardless of shipping cost, if the shipped parcel 
weighs 70 pounds or less and does not exceed 108 inches in length and 
girth combined.
    (3) Multi-parcel shipments via express, courier small package, or 
similar carriers for which transportation charges do not exceed $250 
per shipment.
    (b) Orders issued on VA Form 90-2138, Orders for Supplies or 
Services, must identify shipping instructions on the reverse side of 
the form. When VA Form 90-2138 is not used, the vendor must do the 
following:
    (1) Consistent with the terms of the contract, pack, mark, and 
prepare shipment in conformance with carrier requirements to protect 
the personal property and assure the lowest applicable transportation 
charge. Follow package specifications found in the National Motor 
Freight Classification 100 Series.
    (2) Add transportation charges as a separate item on the invoice. 
The invoice must include the following certification: ``The invoiced 
transportation charges have been paid and evidence of such payment will 
be furnished upon the Government's request.''
    (3) Not include charges for insurance or valuation on the invoice 
unless the order specifically requires that the shipment be insured or 
the value be declared.
    (4) Not prepay transportation charges on the order if such charges 
are expected to exceed $250. Ship collect and annotate the commercial 
bill of lading, ``To be converted to VA Commercial Bill of Lading.'' 
Contact Traffic Manager for routing instructions and freight estimate.
    (c) Each contracting officer is responsible for:
    (1) Obtaining the most accurate estimate possible of transportation 
charges.
    (2) Using the authority in paragraph (a) of this section only when 
consistent with the circumstances in that paragraph.
    (d) When, in accordance with FAR Subpart 28.3 and FAR 47.102, a 
shipment must be insured or the value declared, the contracting officer 
will specifically instruct the vendor to do so on the order when a 
written order is used. If the order is oral, the vendor must annotate 
all copies of the purchase request to show that the insurance/declared 
value was specifically requested.


847.305  Solicitation provisions, contract clauses, and transportation 
factors.


847.305-70  Potential destinations known but quantities unknown.

    When the National Acquisition Center contracts with multiple 
bidders who will provide procured items directly to VA field 
installations, the evaluation of bids must follow specific procedures. 
To place each bid on an equal basis, even though specific quantities 
required by each facility cannot be predetermined, the contracting 
officer must use an anticipated demand factor in proportion to the 
number of hospital beds or patient workload. The clause prescribed in 
852.247-70 must be used in these instances.


847.306  Transportation factors in the evaluation of offers.


847.306-70  Transportation payment and audit.

    Transportation payments are audited by the Traffic Manager to 
ensure that payment and payment mechanisms for agency transportation 
are uniform and appropriate in accordance with 41 CFR part 102-118.

PART 849--TERMINATION OF CONTRACTS

Subpart 849.1--General Principles
Sec.
849.106 Fraud or other criminal conduct.
849.111 Review of proposed settlements.
849.111-70 Required review.
849.111-71 Submission of information.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

Subpart 849.1--General Principles


849.106  Fraud or other criminal conduct.

    (a) If the contracting officer suspects fraud or other criminal 
conduct related to the settlement of a terminated contract, the 
contracting officer must do the following:
    (1) Immediately discontinue all negotiations.
    (2) Submit all of the pertinent facts necessary to support the 
suspicions to either of the following:
    (i) The DSPE.
    (ii) The Chief Facilities Management Officer, in the case of 
contracting officers from the Office of Facilities Management.
    (3) Follow procedures as provided in 809.406-3 and 809.407-3.
    (b) The DSPE or the Chief Facilities Management Officer, Office of 
Facilities Management, must review the submission and fully develop the 
facts.
    (c) If the evidence indicates fraud or other criminal conduct, the 
DSPE or the Chief Facilities Management Officer, Office of Facilities 
Management, must forward the submission with recommendations through 
channels (to include OGC, if appropriate), to the Office of the 
Inspector General for referral to the Department of Justice.
    (d) The DSPE or the Chief Facilities Management Officer, Office of 
Facilities Management, will advise the contracting officer as to any 
further action to be taken. Pending receipt of this advice, no VA 
employee may discuss the matter with the contractor.
    (e) VA will not initiate a collection, recovery or other settlement 
action while the matter is in the hands of the Department of Justice 
without first obtaining the concurrence of the U.S. Attorney concerned, 
through the Office of the Inspector General.
    (f) If the contractor makes an inquiry, the contracting officer 
will advise only that the proposal has been forwarded to higher 
authority.


849.111  Review of proposed settlements.


849.111-70  Required review.

    (a) FAR 49.111 requires each agency to establish procedures, when 
necessary, for the administrative review of proposed termination 
settlements. Contracting officers shall submit proposed termination 
settlements or determinations of amounts due the contractor under a 
terminated contract that involve the expenditure of $100,000 or more of 
Government funds to the Director, Acquisition Program Management 
Division, or the Director, Acquisition Assistance Team, as appropriate, 
for technical and legal review (see 801.602-72(i)). Contracting 
officers shall not execute the settlement agreement or determination 
prior to receipt of the technical and legal review. The legal review of 
contracts awarded by or on behalf of the VA Office of Inspector General 
(OIG) will be conducted by the Counselor to the Inspector General.

[[Page 2399]]

    (b) If the contracting officer declines to implement one or more of 
the recommendations or comments contained in the review memorandum, the 
contracting officer shall submit a written response to the Director, 
Acquisition Program Management Division, or the Director, Acquisition 
Assistance Team, as appropriate, explaining why the recommendations or 
comments were not followed. For contracts awarded by or on behalf of 
the VA OIG, the response shall be submitted to the Counselor to the 
Inspector General.


849.111-71  Submission of information.

    (a) The contracting officer shall submit to the appropriate 
Acquisition Program Management Division or Acquisition Assistance Team 
office a copy of the proposed settlement agreement or determination, 
supported by such detailed information as is required for an adequate 
review. This information should normally include copies of:
    (1) The contractor's or subcontractor's settlement proposal.
    (2) The audit report.
    (3) The property disposed report and any required approvals in 
connection therewith,
    (4) The contracting officer's memorandum explaining the settlement, 
and
    (5) Any other relevant material that will assist the procurement 
analyst in the review. The procurement analyst may, at his or her 
discretion, require the submission of additional information.
    (b) The Director, Acquisition Program Management Division, or the 
Director, Acquisition Assistance Team, will obtain the concurrence or 
comments of OGC prior to forwarding the review to the contracting 
officer, except that the concurrence or comments will be obtained from 
the Counselor to the Inspector General for contracts awarded by or on 
behalf of the VA Office of Inspector General.

SUBCHAPTER H--CLAUSES AND FORMS

PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 852.1--Instructions for Using Provisions and Clauses

Sec.
852.101 Using Part 852.
852.102 Incorporating provisions and clauses.
Subpart 852.2--Text of Provisions and Clauses
852.203-70 Commercial advertising.
852.203-71 Display of Department of Veterans Affairs hotline poster.
852.207-70 Report of employment under commercial activities.
852.209-70 Organizational conflicts of interest.
852.211-70 Service data manuals.
852.211-71 Special notice.
852.211-72 Technical industry standards.
852.211-73 Brand name or equal.
852.211-74 Liquidated damages.
852.211-75 Product specifications.
852.214-70 Caution to bidders `` bid envelopes.
852.214-71 Restrictions on alternate item(s).
852.214-72 Alternate item(s).
852.214-73 Alternate packaging and packing.
852.214-74 Bid samples.
852.216-70 Estimated quantities.
852.222-70 Contract Work Hours and Safety Standards Act `` nursing 
home care contract supplement.
852.228-70 Bond premium adjustment.
852.228-71 Indemnification and insurance.
852.229-70 Sales or use taxes.
852.229-71 [Reserved].
852.233-70 Protest Content/Alternative Disputes Resolution.
852.233-71 Alternate Protest Procedure.
852.236-70 [Reserved].
852.236-71 Specifications and drawings for construction.
852.236-72 Performance of work by the contractor.
852.236-73 [Reserved].
852.236-74 Inspection of construction.
852.236-75 [Reserved].
852.236-76 Correspondence.
852.236-77 Reference to ``standards.''
852.236-78 Government supervision.
852.236-79 Daily report of workers and material.
852.236-80 Subcontracts and work coordination.
852.236-81 [Reserved].
852.236-82 Payments under fixed-price construction contracts 
(without NAS).
852.236-83 Payments under fixed-price construction contracts 
(including NAS).
852.236-84 Schedule of work progress.
852.236-85 Supplementary labor standards provisions.
852.236-86 Worker's compensation.
852.236-87 Accident prevention.
852.236-88 Contract changes--supplement.
852.236-89 Buy American Act.
852.236-90 Restriction on submission and use of equal products.
852.236-91 Special notes.
852.237-7 Indemnification and Medical Liability Insurance.
852.237-70 Contractor responsibilities.
852.246-70 Guarantee.
852.246-71 Inspection.
852.246-72 Frozen processed foods.
852.246-73 Noncompliance with packaging, packing and/or marking 
requirements.
852.246-74 Special warranties.
852.246-75 Warranties for construction--guarantee period services.
852.247-70 Determining transportation costs for bid evaluation.
852.252-70 Solicitation provisions or clauses incorporated by 
reference.
852.270-1 Representatives of contracting officers.
852.270-2 Bread and bakery products--quantities.
852.270-3 Purchase of shellfish.
852.271-70 Nondiscrimination in services provided to beneficiaries.
852.271-71 [Reserved].
852.271-72 Time spent by counselee in counseling process.
852.271-73 Use and publication of counseling results.
852.271-74 Inspection.
852.271-75 Extension of contract period.
852.273-70 Late offers.
852.273-71 Alternative negotiation techniques.
852.273-72 Alternative evaluation.
852.273-73 Evaluation `` health-care resources.
852.273-74 Award without exchanges.

    Authority: 38 U.S.C. 501 and 8151-8153; 40 U.S.C. 121(c); and 48 
CFR 1.301-1.304.

Subpart 852.1--Instructions for Using Provisions and Clauses


852.101  Using Part 852.

    Part 852 prescribes supplemental provisions and clauses to the FAR. 
Provision and clause numbering are as prescribed in FAR 52.101 (e.g., 
supplementary construction clauses under Part 836 are numbered 852.236-
71, 852.236-72, etc.).


852.102  Incorporating provisions and clauses.

    (a) As authorized by FAR 52.102(c), any 48 CFR Chapter 8 (VAAR) 
provision or clause may be incorporated in a quotation, solicitation, 
or contract by reference, provided the contracting officer complies 
with the requirements stated in FAR 52.102(c)(1), (c)(2), and (c)(3). 
To ensure compliance with FAR 52.102(c)(1) and (c)(2), contracting 
officers shall insert the provision found at 852.252-70, Solicitation 
Provisions or Clauses Incorporated by Reference, in full text in a 
quotation, solicitation, or contract if the quotation, solicitation, or 
contract incorporates by reference a FAR or 48 CFR Chapter 8 (VAAR) 
provision or clause that requires completion by the offeror or 
prospective contractor and submittal with the quotation or offer.
    (b) For any FAR or 48 CFR Chapter 8 (VAAR) provision or clause that 
requires completion by the contracting officer, the contracting officer 
shall, as a minimum, insert the title of the provision or clause and 
the paragraph that requires completion in full text in the quotation, 
solicitation, or contract. The balance of the provision or clause may 
be incorporated by reference.
    (c) When one or more FAR or 48 CFR Chapter 8 (VAAR) provisions, or 
portions thereof, are incorporated in a quotation or solicitation by 
reference, the contracting officer shall insert in the

[[Page 2400]]

quotation or solicitation the provision found at FAR 52.252-1, 
Solicitation Provisions Incorporated by Reference.
    (d) When one or more FAR or 48 CFR Chapter 8 (VAAR) clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the 
quotation, solicitation, or contract the clause found at FAR 52.252-2, 
Clauses Incorporated by Reference.
    (e) If one or more FAR provisions or clauses, or portions thereof, 
are incorporated in a quotation, solicitation, or contract by 
reference, the contracting officer shall insert in the FAR provision or 
clause required by paragraph (c) or (d) of this section the following 
Internet address: http://www.arnet.gov/far/.
    (f) If one or more 48 CFR Chapter 8 (VAAR) provisions or clauses, 
or portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the FAR 
provision or clause required by paragraph (c) or (d) of this section 
the following Internet address: http://www1.va.gov/oamm/vaar/vaarpdf.htm.

Subpart 852.2--Texts of Provisions and Clauses


852.203-70  Commercial advertising.

    As prescribed in 803.570-2, insert the following clause:

Commercial Advertising (Date)

    The bidder or offeror agrees that if a contract is awarded to him/
her, as a result of this solicitation, he/she will not advertise the 
award of the contract in his/her commercial advertising in such a 
manner as to state or imply that the Department of Veterans Affairs 
endorses a product, project or commercial line of endeavor.


(End of Clause)


852.203-71  Display of Department of Veterans Affairs hotline poster.

    As prescribed in 803.7001, insert the following clause:

Display of Department of Veterans Affairs Hotline Poster (Dec 1992)

    (a) Except as provided in paragraph (c) below, the Contractor shall 
display prominently in common work areas within business segments 
performing work under Department of Veterans Affairs contracts, 
Department of Veterans Affairs Hotline posters prepared by the 
Department of Veterans Affairs Office of Inspector General.
    (b) Department of Veterans Affairs Hotline posters may be obtained 
from the Department of Veterans Affairs Office of Inspector General 
(53E), P.O. Box 34647, Washington, DC 20043-4647.
    (c) The Contractor need not comply with paragraph (a) above, if the 
Contractor has established a mechanism, such as a hotline, by which 
employees may report suspected instances of improper conduct, and 
instructions that encourage employees to make such reports.


(End of Clause)


852.207-70  Report of employment under commercial activities.

    As prescribed in 807.304-77 and 873.110, the following clause will 
be included in A-76 cost comparison solicitations and solicitations 
issued under the authority of 38 U.S.C. 8151-8153 which may result in 
conversion, from in-house to contract performance, of work currently 
being performed by VA personnel:

Report of Employment Under Commercial Activities (Date)

    (a) Consistent with the Government post-employment conflict of 
interest regulations, the contractor shall give adversely affected 
Federal personnel the right of first refusal for all employment 
openings under this contract for which they are qualified.
    (b) Definitions.
    (1) Adversely affected Federal personnel means:
    (i) Permanent Federal personnel who are assigned to the government 
commercial activity, or
    (ii) Federal personnel who are identified for release from their 
competitive levels or separated as a result of the contract.
    (2) Employment openings means position vacancies created by this 
contract that the contractor is unable to fill with personnel in the 
contractor's employ at the time of the contract award. The term 
includes positions within a 50-mile radius of the commercial activity 
that indirectly arise in the contractor's organization as a result of 
the contractor's reassignment of employees due to the award of this 
contract.
    (3) Contract start date means the first day of contractor 
performance.
    (c) Filling employment openings. (1) For a period beginning with 
contract award and ending 90 calendar days after the contract start 
date, no person other than adversely affected Federal personnel on the 
current listing provided by the contracting officer shall be offered an 
employment opening until all adversely affected and qualified Federal 
personnel identified by the contracting officer have been offered the 
job and refused it.
    (2) The contractor may select any person for an employment opening 
when there are no qualified adversely affected Federal personnel on the 
latest current listing provided by the contracting officer.
    (d) Contracting reporting requirements. (1) No later than 5 working 
days after contract award, the contractor shall furnish the contracting 
officer with the following:
    (i) A list of employment openings including salaries and benefits,
    (ii) Sufficient job application forms for adversely affected 
Federal personnel.
    (2) By the contract start date, the contractor shall provide the 
contracting officer with the following:
    (i) The names of adversely affected Federal personnel offered an 
employment opening,
    (ii) The date the offer was made,
    (iii) A brief description of the position,
    (iv) The date of acceptance of the offer and the effective date of 
employment,
    (v) The date of rejection of the offer, if applicable, and the 
salary and benefits contained in the rejected offer, and
    (vi) The names of any adversely affected Federal personnel who 
applied but were not offered employment and the reason(s) for 
withholding an offer.
    (3) For the first 90 calendar days after the contract start date, 
the contractor shall provide the contracting officer with the names of 
all persons hired or terminated under the contract within 5 working 
days of such hiring or termination.
    (e) Information provided to the contractor. (1) No later than 10 
calendar days after the contract award, the contracting officer shall 
furnish the contractor a current list of adversely affected Federal 
personnel exercising the right of first refusal, along with their 
completed job application forms.
    (2) Between the contract award and start dates, the contracting 
officer shall inform the contractor of any reassignment or transfer of 
adversely affected Federal personnel to other Federal positions.
    (3) For a period of up to 90 calendar days after the contract start 
date, the contracting officer will periodically provide the contractor 
with an updated listing of adversely affected Federal personnel 
reflecting personnel who were recently released from their competitive 
levels or separated as a result of the contract award.
    (f) Qualifications determination. The contractor has a right under 
this clause to determine adequacy of the qualifications of adversely 
affected Federal personnel for any employment openings. However, 
adversely affected

[[Page 2401]]

Federal personnel who held jobs in the Government commercial activity 
that directly correspond to an employment opening shall be considered 
qualified for the job. Questions concerning the qualifications of 
adversely affected Federal personnel for specific employment openings 
shall be referred to the contracting officer for determination. The 
contracting officer's determination shall be final and binding on all 
parties.
    (g) Relating to other statutes, regulations and employment 
policies. The requirements of this clause shall not modify or alter the 
contractor's responsibilities under statutes, regulations or other 
contract clauses pertaining to the hiring of veterans, minorities, or 
persons with disabilities.
    (h) Penalty for noncompliance. Failure of the contractor to comply 
with any provision of the clause may be grounds for termination for 
default.


(End of Clause)


852.209-70  Organizational conflicts of interest.

    As prescribed in 809.507-1(b), insert the following provision:

Organizational Conflicts of Interest (Date)

    (a) It is in the best interest of the Government to avoid 
situations which might create an organizational conflict of interest or 
where the offeror's performance of work under the contract may provide 
the contractor with an unfair competitive advantage. The term 
``organizational conflict of interest'' means that because of other 
activities or relationships with other persons, a person is 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 person has an unfair competitive advantage.
    (b) The offeror shall provide a statement with its offer which 
describes, in a concise manner, all relevant facts concerning any past, 
present, or currently planned interest (financial, contractual, 
organizational, or otherwise) or actual or potential organizational 
conflicts of interest relating to the services to be provided under 
this solicitation. The offeror shall also provide statements with its 
offer containing the same information for any consultants and 
subcontractors identified in its proposal and which will provide 
services under the solicitation. The offeror may also provide relevant 
facts that show how its organizational and/or management system or 
other actions would avoid or mitigate any actual or potential 
organizational conflicts of interest.
    (c) Based on this information and any other information solicited 
or obtained by the contracting officer, the contracting officer may 
determine that an organizational conflicts of interest exists which 
would warrant disqualifying the contractor for award of the contract 
unless the organizational conflicts of interest can be mitigated to the 
contracting officer's satisfaction by negotiating terms and conditions 
of the contract to that effect. If the conflict of interest cannot be 
mitigated and if the contracting officer finds that it is in the best 
interest of the United States to award the contract, the contracting 
officer shall request a waiver in accordance with FAR 9.503 and 48 CFR 
809.503.
    (d) Nondisclosure or misrepresentation of actual or potential 
organizational conflicts of interest at the time of the offer, or 
arising as a result of a modification to the contract, may result in 
the termination of the contract at no expense to the Government.


(End of Provision)


852.211-70  Service data manuals.

    (a) As prescribed in 811.107(a), insert the following clause:

Service Data Manuals (Nov 1984)

    (a) The successful bidder will supply operation/maintenance 
(service data) manuals with each piece of equipment in the quantity 
specified in the solicitation and resulting purchase order. As a 
minimum, the manual(s) shall be bound and equivalent to the manual(s) 
provided the manufacturer's designated field service representative as 
well as comply with all the requirements in paragraphs (b) through (i) 
of this clause. Sections, headings and section sequence identified in 
(b) through (i) of this clause are typical and may vary between 
manufacturers. Variances in the sections, headings and section 
sequence, however, do not relieve the manufacturer of his/her 
responsibility in supplying the technical data called for therein.
    (b) Title Page and Front Matter. The title page shall include the 
equipment nomenclature, model number, effective date of the manual and 
the manufacturer's name and address. If the manual applies to a 
particular version of the equipment only, the title page shall also 
list that equipment's serial number. Front matter shall consist of the 
Table of Contents, List of Tables, List of Illustrations and a 
frontispiece (photograph or line drawing) depicting the equipment.
    (c) Section I, General Description. This section shall provide a 
generalized description of the equipment or devices and shall describe 
its purpose or intended use. Included in this section will be a table 
listing all pertinent equipment specifications, power requirements, 
environmental limitations and physical dimensions.
    (d) Section II, Installation. Section II shall provide pertinent 
installation information. It shall list all input and output connectors 
using applicable reference designators and functional names as they 
appear on the equipment. Included in this listing will be a brief 
description of the function of each connector along with the connector 
type. Instructions shall be provided as to the recommended method of 
repacking the equipment for shipment (packing material, labeling, 
etc.).
    (e) Section III, Operation. Section III will fully describe the 
operation of the equipment and shall include a listing of each control 
with a brief description of its function and step-by-step procedures 
for each operating mode. Procedures will use the control(s) 
nomenclature as it appears on the equipment and will be keyed to one or 
more illustrations of the equipment. Operating procedures will include 
any preoperational checks, calibration adjustments and operation tests. 
Notes, cautions and warnings shall be set off from the text body so 
they may easily be recognizable and will draw the attention of the 
reader. Illustrations should be used wherever possible depicting 
equipment connections for test, calibration, patient monitoring and 
measurements. For large, complex and/or highly versatile equipment 
capable of many operating modes and in other instances where the 
Operation Section is quite large, operational information may be bound 
separately in the form of an Operators Manual. The providing of a 
separate Operators manual does not relieve the supplier of his 
responsibility for providing the minimum acceptable maintenance data 
specified herein. When applicable, flow charts and narrative 
descriptions of software shall be provided. If programming is either 
built-in and/or user modifiable, a complete software listing shall be 
supplied. Equipment items with software packages shall also include 
diagnostic routines and sample outputs. Submission information shall be 
given in the Maintenance Section to identify equipment malfunctions 
that are software related.
    (f) Section IV, Principles of Operation. This section shall 
describe in narrative form the principles of operation of the 
equipment. Circuitry shall be discussed in sufficient detail to be 
understood by

[[Page 2402]]

technicians and engineers who possess a working knowledge of 
electronics and a general familiarity with the overall application of 
the devices. The circuit descriptions should start at the overall 
equipment level and proceed to more detailed circuit descriptions. The 
overall description shall be keyed to a functional block diagram of the 
equipment. Circuit descriptions shall be keyed to schematic diagrams 
discussed in paragraph (i) below. It is recommended that for complex or 
special circuits, simplified schematics should be included in this 
section.
    (g) Section V, Maintenance. The maintenance section shall contain a 
list of recommended test equipment, special tools, preventive 
maintenance instructions and corrective information. The list of test 
equipment shall be that recommended by the manufacturer and shall be 
designated by manufacturer and model number. Special tools are those 
items not commercially available or those that are designed 
specifically for the equipment being supplied. Sufficient data will be 
provided to enable their purchase by the Department of Veterans 
Affairs. Preventive maintenance instructions shall consist of those 
recommended by the manufacturer to preclude unnecessary failures. 
Procedures and the recommended frequency of performance shall be 
included for visual inspection, cleaning, lubricating, mechanical 
adjustments and circuit calibration. Corrective maintenance shall 
consist of the data necessary to troubleshoot and rectify a problem and 
shall include procedures for realigning and testing the equipment. 
Troubleshooting shall include either a list of test points with the 
applicable voltage levels or waveforms that would be present under a 
certain prescribed set of conditions, a troubleshooting chart listing 
the symptom, probable cause and remedy, or a narrative containing 
sufficient data to enable a test technician or electronics engineer to 
determine and locate the probable cause of malfunction. Data shall also 
be provided describing the preferred method of repairing or replacing 
discrete components mounted on printed circuit boards or located in 
areas where special steps must be followed to disassemble the 
equipment. Procedures shall be included to realign and test the 
equipment at the completion of repairs and to restore it to its 
original operating condition. These procedures shall be supported by 
the necessary waveforms and voltage levels, and data for selecting 
matched components. Diagrams, either photographic or line, shall show 
the location of printed circuit board mounted components.
    (h) Section VI, Replacement Parts List. The replacement parts list 
shall list, in alphanumeric order, all electrical/electronic, 
mechanical and pneumatic components, their description, value and 
tolerance, true manufacturer and manufacturers' part number.
    (i) Section VII, Drawings. Wiring and schematic diagrams shall be 
included. The drawings will depict the circuitry using standard symbols 
and shall include the reference designations and component values or 
type designators. Drawings shall be clear and legible and shall not be 
engineering or productions sketches.


(End of Clause)

    Alternate I (Date). If the bid or proposal will result in the 
initial purchase (including each make and model) of a centrally 
procured item, insert the following paragraph:
    (j) Initial purchase. The contractor agrees, when requested by the 
contracting officer, to furnish not more than three copies of the 
technical documentation required by paragraph 852.211-70(a) to the 
Service and Reclamation Division, Hines, IL. In addition, the 
contractor agrees to furnish two additional copies of the technical 
documentation required by 852.211-70(a) with each piece of equipment 
sold as a result of the invitation for bid or request for proposal.


(End of Clause)

    (b) As prescribed in 811.107(b), insert the following clause:

Service Data Manuals, Mechanical Equipment (Date)

    The contractor agrees to furnish two hard copies of a manual, 
handbook or brochure containing operating, installation, and 
maintenance instructions (including pictures or illustrations, 
schematics, and complete repair/test guides as necessary). Where 
applicable, it will include electrical data and connection diagrams for 
all utilities. The instructions shall also contain a complete list of 
all replaceable parts showing part number, name, and quantity required.


(End of Clause)


852.211-71  Special notice.

    As prescribed in 870.112, insert the following provision:

Special Notice (Date)

    Descriptive literature. The submission of descriptive literature 
with offers is not required and voluntarily submitted descriptive 
literature that qualifies the offer will require rejection of the 
offer. However, within 5 days after award of contract, the contractor 
will submit to the contracting officer literature describing the 
equipment he/she intends to furnish and indicating strict compliance 
with the specification requirements. The contracting officer will, by 
written notice to the contractor within 20 calendar days after receipt 
of the literature, approve, conditionally approve, or disapprove the 
equipment being proposed. The notice of approval or conditional 
approval will not relieve the contractor from complying with all 
requirements of the specifications and all other terms and conditions 
of this contract. A notice of conditional approval will state any 
further action required of the contractor. A notice of disapproval will 
cite reasons therefore. If the equipment is disapproved by the 
Government, the contractor will be subject to action under the Default 
or Termination for Cause provision of this contract. However, prior to 
default or termination for cause action the contractor will be 
permitted a period (at least 10 days) under that clause to submit 
additional descriptive literature on equipment originally offered or 
descriptive literature on other equipment. The Government reserves the 
right to require an equitable adjustment of the contract price for any 
extension of the delivery schedule necessitated by additional 
descriptive literature evaluations.


(End of Provision)


852.211-72  Technical industry standards.

    As prescribed in 811.103-70, insert the following provision:

Technical Industry Standards (Date)

    The supplies or equipment required by this invitation for bid or 
request for proposal must conform to the standards of the [ ]* and [ ]* 
as to [ ]**. The successful bidder or offeror will be required to 
submit proof that the item(s) he/she furnishes conforms to this 
requirement. This proof may be in the form of a label or seal affixed 
to the equipment or supplies, warranting that they have been tested in 
accordance with and conform to the specified standards. Proof may also 
be furnished in the form of a certificate from one of the above listed 
organizations certifying that the item(s) furnished have been tested in 
accordance with and conform to the specified standards.


(End of Provision)

    *Insert name(s) of organization(s), the standards of which are 
pertinent to the Government's needs.

[[Page 2403]]

    **Insert pertinent standards, i.e., fire and casualty, safety and 
fire protection, etc.


852.211-73  Brand name or equal.

    As prescribed in 811.104-71, insert the following clause:

Brand Name or Equal (Date)

    (Note:
    As used in this clause, the term ``brand name'' includes 
identification of products by make and model.)

    (a) If items called for by this invitation for bids have been 
identified in the schedule by a ``brand name or equal'' description, 
such identification is intended to be descriptive, but not restrictive, 
and is to indicate the quality and characteristics of products that 
will be satisfactory. Bids offering ``equal'' products (including 
products of the brand name manufacturer other than the one described by 
brand name) will be considered for award if such products are clearly 
identified in the bids and are determined by the Government to meet 
fully the salient characteristics requirements listed in the 
invitation.
    (b) Unless the bidder clearly indicates in his bid that he is 
offering an ``equal'' product, his bid shall be considered as offering 
a brand name product referenced in the invitation for bids.
    (c)(1) If the bidder proposes to furnish an ``equal'' product, the 
brand name, if any, of the product to be furnished shall be inserted in 
the space provided in the Invitation or Bids, or such product shall be 
otherwise clearly identified in the bid. The evaluation of bids and the 
determination as to equality of the product offered shall be the 
responsibility of the Government and will be based on information 
furnished by the bidder or identified in his/her bid as well as other 
information reasonably available to the purchasing activity. CAUTION TO 
BIDDERS. The purchasing activity is not responsible for locating or 
securing any information that is not identified in the bid and 
reasonably available to the purchasing activity. Accordingly, to insure 
that sufficient information is available, the bidder must furnish as a 
part of his/her bid all descriptive material (such as cuts, 
illustrations, drawings or other information) necessary for the 
purchasing activity to:
    (i) Determine whether the product offered meets the salient 
characteristics requirement of the Invitation for Bids, and
    (ii) Establish exactly what the bidder proposes to furnish and what 
the Government would be binding itself to purchase by making an award. 
The information furnished may include specific references to 
information previously furnished or to information otherwise available 
to the purchasing activity.
    (2) If the bidder proposes to modify a product so as to make it 
conform to the requirements of the Invitation for Bids, he/she shall:
    (i) Include in his/her bid a clear description of such proposed 
modifications, and
    (ii) Clearly mark any descriptive material to show the proposed 
modifications.
    (3) Modifications proposed after bid opening to make a product 
conform to a brand name product referenced in the Invitation for Bids 
will not be considered.


(End of Clause)


852.211-74  Liquidated damages.

    As prescribed in 811.503 and 836.206, the contracting officer may 
insert the following clause when appropriate:

Liquidated Damages (Date)

    If any unit of the work contracted for is accepted in advance of 
the whole, the rate of liquidated damages assessed will be in the ratio 
that the value of the unaccepted work bears to the total amount of the 
contract. If a separate price for unaccepted work has not been stated 
in the contractor's bid, determination of the value thereof will be 
made from schedules of costs furnished by the contractor and approved 
by the contracting officer, as specified elsewhere in the contract.


(End of Clause)


852.211-75  Product specifications.

    As prescribed in 811.204, insert the following the following 
clause:

Product Specifications (Date)

    The products offered under this solicitation shall be type --------
--------, grade ----------------, in accordance with [type of 
specification] No. ----------------, dated ---------------- and 
amendment ---------------- dated ----------------, except for 
paragraphs ---------------- and ---------------- which are amended as 
follows: [List any amendments to the specifications]


(End of Clause)


852.214-70  Caution to bidders--bid envelopes.

    As provided in 814.201-6(a), the following provision will be 
included in all invitations for bid:

Caution to Bidders--Bid Envelopes (Date)

    It is the responsibility of each bidder to take all necessary 
precautions, including the use of proper mailing cover, to insure that 
the bid price cannot be ascertained by anyone prior to bid opening. If 
a bid envelope is furnished with this invitation, the bidder is 
requested to use this envelope in submitting the bid. The bidder may, 
however, use any suitable envelope, identified by the invitation number 
and bid opening time and date. If an Optional Form (OF) 17, Sealed Bid 
Label, is furnished with this invitation in lieu of a bid envelope, the 
bidder is advised to complete and affix the OF 17 to the lower left 
corner of the envelope used in submitting the bid.


(End of Provision)


852.214-71  Restrictions on alternate item(s).

    As prescribed in 814.201-6(b)(1), insert the following provision:

Restrictions on Alternate Item(s) (Date)

    Bids on [ ]* will be considered only if acceptable bids on [ ]** 
are not received or do not satisfy the total requirement.


(End of Provision)

    *Contracting officer will insert an alternate item that is 
considered acceptable.
    **Contracting officer will insert the required item and item 
number.


852-214-72  Alternate item(s).

    As prescribed in 814.201-6(b)(2), insert the following provision:

Alternate Item(s) (Date)

    Bids on [ ]* will be given equal consideration along with bids on [ 
]** and any such bids received may be accepted if to the advantage of 
the Government. Tie bids will be decided in favor of [ ].**


(End of Provision)

    *Contracting officer will insert an alternate item that is 
considered acceptable.
    **Contracting officer will insert the required item and item 
number.


852.214-73  Alternate packaging and packing.

    As prescribed in 814.201-6(b)(3), insert the following provision:

Alternate Packaging and Packing (Date)

    The bidders offer must clearly indicate the quantity, package size, 
unit, or other different feature upon which the quote is made. 
Evaluation of the alternate or multiple alternates will be

[[Page 2404]]

made on a common denominator such as per ounce, per pound, etc., basis.


(End of Provision)


852.214-74  Bid samples.

    As prescribed in 814.201-6(c), insert the following provision:

Bid Samples (Date)

    Any bid sample(s) furnished must be in the quantities specified in 
the solicitation and plainly marked with the complete lettering/
numbering and description of the related bid item(s); the number of the 
Invitation for Bids; and the name of the bidder submitting the bid 
sample(s). Cases or packages containing any bid sample(s) must be 
plainly marked ``Bid Sample(s)'' and all changes pertaining to the 
preparation and transportation of bid sample(s) must be prepaid by the 
bidder. Bid sample(s) must be received at the location specified in the 
solicitation by the time and date for receipt of bids.


(End of Provision)


852.216-70  Estimated quantities.

    As prescribed in 816.504(a), insert the following clause:

Estimated Quantities (Apr 1984)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles or services 
that may be ordered during the contract term, except as he/she 
otherwise indicates in his/her bid and except as otherwise provided 
herein. Bids will be considered if made with the proviso that the total 
quantities delivered shall not exceed a certain specified quantity. 
Bids offering less than 75 percent of the estimated requirement or 
which provide that the Government shall guarantee any definite 
quantity, will not be considered. The fact that quantities are 
estimated shall not relieve the contractor from filling all orders 
placed under this contract to the extent of his/her obligation. Also, 
the Department of Veterans Affairs shall not be relieved of its 
obligation to order from the contractor all articles or services that 
may, in the judgment of the ordering officer, be needed except that in 
the public exigency procurement may be made without regard to this 
contract.


(End of Clause)

    Alternate I (APR 1984). As prescribed in 816.504(b), insert the 
following clause:

Estimated Quantities (Apr 1984)

    The estimated requirements shown in this invitation for bids cover 
the requirements for the entire contract period. It is understood and 
agreed that during the period of this contract the Government may order 
and the contractor will haul such coal as may, in the opinion of the 
Government, be required, except that in the public exigency procurement 
may be made without regard to this contract.


(End of Clause)

    Alternate II (APR 1984). As prescribed in 816.504(c), insert the 
following clause:

Estimated Quantities (Apr 1984)

    The supplies and/or services listed in the attached schedule will 
be furnished at such time and in such quantities as they are required.


(End of Clause)

    Alternate III (JUL 1989). As prescribed in 816.504(a), insert the 
following clause:

Estimated Quantities (Jul 1989)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles that may be 
ordered during the contract term, except as he or she otherwise 
indicates in his or her bid and except as otherwise provided herein. 
Bids will be considered if made with the proviso that the total 
quantities delivered shall not exceed a certain specified quantity. The 
fact that quantities are estimated shall not relieve the contractor 
from filling all orders placed under this contract to the extent of 
his/her obligation. Also, the Department of Veterans Affairs shall not 
be relieved of its obligation to order from the contractor all articles 
that may, in the judgment of the ordering officer, be needed except 
that in the public exigency procurement may be made without regard to 
this contract.


(End of Clause)


852.222-70  Contract Work-Hours and Safety Standards Act--nursing home 
care contract supplement.

    As prescribed in 822.305, for nursing home care requirements, 
insert the following clause:

Contract Work Hours and Safety Standard Act--Nursing Home Care Contract 
Supplement (Date)

    The following exemption to FAR clause 52.222-4, Contract Work Hours 
and Safety Standards Act--Overtime Compensation, applies to this 
contract:
    A Contractor and subcontractor under this contract will not be 
required to pay overtime wages to their employees for work in excess of 
40 hours in any workweek, which would otherwise be a violation of the 
Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708), 
provided:
    (a) The contractor or subcontractor is primarily engaged in the 
care of nursing home patients residing on the contractor's or 
subcontractor's premises;
    (b) There is an agreement or understanding between the contractor 
or subcontractor and their employees, before performance of work, that 
a work period of 14 consecutive days is acceptable in lieu of a work 
period of 7 consecutive days for the purpose of overtime compensation;
    (c) Employees receive overtime compensation at a rate no less than 
1\1/2\ times the employees' regular hourly rate of pay for work in 
excess of 80 hours in any 14 day period; and
    (d) Pay is otherwise computed in accordance with the requirements 
of the Fair Labor Standards Act of 1938, as amended.


(End of Clause)


852.228-70  Bond premium adjustment.

    As prescribed in 828.106-70, insert the following clause:

Bond Premium Adjustment (Apr 1984)

    When net changes in original contract price affect the premium of a 
Corporate Surety Bond by $5 or more, the Government in determining 
basis for final settlement, will provide for bond premium adjustment 
computed at the rate shown in the bond.


(End of Clause)


852.228-71  Indemnification and insurance.

    As prescribed in 828.306, insert the following clause:

Indemnification and Insurance (Date)

    (a) Indemnification. The contractor expressly agrees to indemnify 
and save the Government, its officers, agents, servants, and employees 
harmless from and against any and all claims, loss, damage, injury, and 
liability, however caused, resulting from, arising out of, or in any 
way connected with the performance of work under this agreement. 
Further, it is agreed that any negligence or alleged negligence of the 
Government, its officers, agents, servants, and employees, shall not be 
a bar to a claim for indemnification unless the act or omission of the 
Government, its officers, agents, servant, and employees is the sole, 
competent, and producing cause of such claims, loss, damage, injury, 
and liability. At the option of the contractor, and subject to the 
approval by the contracting officer of the sources, insurance coverage 
may

[[Page 2405]]

be employed as guaranty of indemnification.
    (b) Insurance. Satisfactory insurance coverage is a condition 
precedent to award of a contract. In general, a successful bidder must 
present satisfactory evidence of full compliance with State and local 
requirements, or those below stipulated, whichever are the greater. 
More specifically, workmen's compensation and employer's liability 
coverage will conform to applicable State law requirements for the 
service contemplated, whereas general liability and automobile 
liability of comprehensive type, shall in the absence of higher 
statutory minimums, be required in the amounts per vehicle used of not 
less than $200,000 per person and $500,000 per occurrence for bodily 
injury and $20,000 per occurrence for property damage. State approved 
sources of insurance coverage ordinarily will be deemed acceptable to 
the Department of Veterans Affairs installation, subject to timely 
certifications by such sources of the types and limits of the coverages 
afforded by the sources to the bidder. (In those instances where 
airplane service is to be used, substitute the word ``aircraft'' for 
``automobile'' and ``vehicle'' and modify coverage to require aircraft 
public and passenger liability insurance of at least $200,000 per 
passenger and $500,000 per occurrence for bodily injury, other than 
passenger liability, and $200,000 per occurrence for property damage. 
Coverage for passenger liability bodily injury shall be at least 
$200,000 multiplied by the number of seats or passengers, whichever is 
greater.)


(End of Clause)


852.229-70  Sales or use taxes.

    As prescribed in 829.302-70, insert the following provision:

Sales Or Use Taxes (Date)

    This clause replaces paragraph (k) of Federal Acquisition 
Regulation clause 52.212-4, Contract Terms and Conditions--Commercial 
Items. The articles listed in this solicitation will be purchased from 
the personal funds of patients and prices submitted herein include any 
sales or use tax heretofore imposed by any State, or by any duly 
constituted taxing authority therein, having jurisdiction to levy such 
a tax, applicable to the material in this solicitation.


(End of Clause)


852.229-71  [Reserved].


852.233-70  Protest Content/Alternative Dispute Resolution.

    As prescribed in 833.106, insert the following provision:

Protest Content/Alternative Dispute Resolution (Date)

    (a) Any protest filed by an interested party shall:
    (1) Include the name, address, fax number, and telephone number of 
the protester;
    (2) Identify the solicitation and/or contract number;
    (3) Include an original signed by the protester or the protester's 
representative and at least one copy;
    (4) Set forth a detailed statement of the legal and factual grounds 
of the protest, including a description of resulting prejudice to the 
protester, and provide copies of relevant documents;
    (5) Specifically request a ruling of the individual upon whom the 
protest is served;
    (6) State the form of relief requested; and
    (7) Provide all information establishing the timeliness of the 
protest.
    (b) Failure to comply with the above may result in dismissal of the 
protest without further consideration.
    (c) Bidders/offerors and contracting officers are encouraged to use 
alternative dispute resolution (ADR) procedures to resolve protests at 
any stage in the protest process. The Department of Veterans Affairs 
Board of Contract Appeals (VABCA) is an independent and neutral entity 
within the Department of Veterans Affairs and is available to serve as 
the third party neutral (Neutral) for bid protests. If ADR is used, the 
Department of Veterans Affairs will not furnish any documentation in an 
ADR proceeding beyond what is allowed by the Federal Acquisition 
Regulation.


(End of Provision)


852.233-71  Alternate Protest Procedure.

    As prescribed in 833.106, insert the following provision:

Alternate Protest Procedure (Jan 1998)

    As an alternative to filing a protest with the contracting officer, 
an interested party may file a protest with the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, or for solicitations issued by the 
Office of Facilities Management, the Chief Facilities Management 
Officer, Office of Facilities Management, 810 Vermont Avenue, NW., 
Washington, DC 20420. The protest will not be considered if the 
interested party has a protest on the same or similar issues pending 
with the contracting officer.


(End of Provision)


852.236-70  [Reserved].


852.236-71  Specifications and drawings for construction.

    As prescribed in 836.521, insert the following clause:

Specifications and Drawings for Construction (Jul 2002)

    The clause entitled ``Specifications and Drawings for 
Construction'' in FAR 52.236-21 is supplemented as follows:
    (a) The contracting officer's interpretation of the drawings and 
specifications will be final, subject to the disputes clause.
    (b) Large scale drawings supersede small scale drawings.
    (c) Dimensions govern in all cases. Scaling of drawings may be done 
only for general location and general size of items.
    (d) Dimensions shown of existing work and all dimensions required 
for work that is to connect with existing work shall be verified by the 
contractor by actual measurement of the existing work. Any work at 
variance with that specified or shown in the drawings shall not be 
performed by the contractor until approved in writing by the 
contracting officer.


(End of Clause)


852.236-72  Performance of work by the contractor.

    As prescribed in 836.501, insert the following clause:

Performance of Work by the Contractor (Jul 2002)

    The clause entitled ``Performance of Work by the Contractor'' in 
FAR 52.236-1 is supplemented as follows:
    (a) Contract work accomplished on the site by laborers, mechanics, 
and foremen/forewomen on the contractor's payroll and under his/her 
direct supervision shall be included in establishing the percent of 
work to be performed by the contractor. Cost of material and equipment 
installed by such labor may be included. The work by the contractor's 
executive, supervisory and clerical forces shall be excluded in 
establishing compliance with the requirements of this clause.
    (b) The contractor shall submit, simultaneously with the schedule 
of costs required by the Payments Under Fixed-Price Construction 
Contracts

[[Page 2406]]

clause of the contract, a statement designating the branch or branches 
of contract work to be performed with his /her forces. The approved 
schedule of costs will be used in determining the value of a branch or 
branches, or portions thereof, of the work for the purpose of this 
article.
    (c) If, during the progress of work hereunder, the contractor 
requests a change in the branch or branches of the work to be performed 
by his/her forces and the contracting officer determines it to be in 
the best interest of the Government, the contracting officer may, at 
his/her discretion, authorize a change in such branch or branches of 
said work. Nothing contained herein shall permit a reduction in the 
percentage of work to be performed by the contractor with his/her 
forces, it being expressly understood that this is a contract 
requirement without right or privilege of reduction.
    (d) In the event the contractor fails or refuses to meet the 
requirement of the FAR clause at 52.236-1, it is expressly agreed that 
the contract price will be reduced by 15 percent of the value of that 
portion of the percentage requirement that is accomplished by others. 
For the purpose of this clause, it is agreed that 15 percent is an 
acceptable estimate of the contractor's overhead and profit, or mark-
up, on that portion of the work which the contractor fails or refuses 
to perform, with his/her own forces, in accordance with the FAR clause 
at 52.236-1.


(End of Clause)

    Alternate I (Date). For requirements which include Network Analysis 
System (NAS), substitute the following paragraphs (b) and (c) for 
paragraphs (b) and (c) of the basic clause:
    (b) The contractor shall submit, simultaneously with the cost per 
activity of the construction schedule required by Section 01310 or 
01311, NETWORK ANALYSIS SYSTEM, a responsibility code for all 
activities of the network for which the contractor's forces will 
perform the work. The cost of these activities will be used in 
determining the portions of the total contract work to be executed by 
the contractor's forces for the purpose of this article.
    (c) If, during progress of work hereunder, the contractor requests 
a change in activities of work to be performed by the contractor's 
forces and the contracting officer determines it to be in the best 
interest of the Government, the contracting officer may, at his or her 
discretion, authorize a change in such activities of said work.


852.236-73  [Reserved].


852.236-74  Inspection of construction.

    As prescribed in 846.312, insert the following clause:

Inspection of Construction (Jul 2002)

    The clause entitled ``Inspection of Construction'' in FAR 52.246-12 
is supplemented as follows:
    (a) Inspection of materials and articles furnished under this 
contract will be made at the site by the resident engineer, unless 
otherwise provided for in the specifications.
    (b) Final inspection will not be made until the contract work is 
ready for beneficial use or occupancy. The contractor shall notify the 
contracting officer, through the resident engineer, fifteen (15) days 
prior to the date on which the work will be ready for final inspection.


(End of Clause)


852.236-75  [Reserved].


852.236-76  Correspondence.

    As prescribed in 836.570, insert the following clause:

Correspondence (Apr 1984)

    All correspondence relative to this contract shall bear the 
Specification Number, Project Number, Department of Veterans Affairs 
Contract Number, title of project and name of facility.


(End of Clause)


852.236-77  Reference to ``standards''.

    As prescribed in 836.571, insert the following clause:

Reference to ``Standards'' (Jul 2002)

    Any materials, equipment, or workmanship specified by references to 
number, symbol, or title of any specific Federal, Industry or 
Government Agency Standard Specification shall comply with all 
applicable provisions of such standard specifications, except as 
limited to type, class or grade, or modified in contract 
specifications. Reference to ``Standards'' referred to in the contract 
specifications, except as modified, shall have full force and effect as 
though printed in detail in the specifications.


(End of Clause)


852.236-78  Government supervision.

    As prescribed in 836.572, insert the following clause:

Government Supervision (Apr 1984)

    (a) The work will be under the direction of the Department of 
Veterans Affairs contracting officer, who may designate another VA 
employee to act as resident engineer at the construction site.
    (b) Except as provided below, the resident engineer's directions 
will not conflict with or change contract requirements.
    (c) Within the limits of any specific authority delegated by the 
contracting officer, the resident engineer may, by written direction, 
make changes in the work. The contractor shall be advised of the extent 
of such authority prior to execution of any work under the contract.


(End of Clause)


852.236-79  Daily report of workers and material.

    As prescribed in 836.573, insert the following clause:

Daily Report of Workers and Material (Apr 1984)

    The contractor shall furnish to the resident engineer each day a 
consolidated report for the preceding work day in which is shown the 
number of laborers, mechanics, foremen/forewomen and pieces of heavy 
equipment used or employed by the contractor and subcontractors. The 
report shall bear the name of the firm, the branch of work that they 
perform, such as concrete, plastering, masonry, plumbing, sheet metal 
work, etc. The report shall give a breakdown of employees by crafts, 
location where employed, and work performed. The report shall also list 
materials delivered to the site on the date covered by the report.


(End of Clause)


852.236-80  Subcontracts and work coordination.

    As prescribed in 836.574, insert the following clause:

Subcontracts and Work Coordination (Apr 1984)

    (a) Nothing contained in this contract shall be construed as 
creating any contractual relationship between any subcontractor and the 
Government. Divisions or sections of specifications are not intended to 
control the contractor in dividing work among subcontractors, or to 
limit work performed by any trade.
    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and of the subcontractors and 
their employees. The contractor shall also be responsible for 
coordination of the work of the trades, subcontractors, and material 
suppliers.
    (c) The Government or its representatives will not undertake to

[[Page 2407]]

settle any differences between the contractor and subcontractors or 
between subcontractors.
    (d) The Government reserves the right to refuse to permit 
employment on the work or require dismissal from the work of any 
subcontractor who, by reason of previous unsatisfactory work on 
Department of Veterans Affairs projects or for any other reason, is 
considered by the contracting officer to be incompetent or otherwise 
objectionable.


(End of Clause)

    Alternate I (JUL 2002). For new construction work with complex 
mechanical-electrical work, the following paragraph relating to work 
coordination may be substituted for paragraph (b) of the basic clause:
    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and subcontractors and their 
employees. The contractor shall also be responsible for coordination of 
the work of the trades, subcontractors, and material suppliers. The 
contractor shall, in advance of the work, prepare coordination drawings 
showing the location of openings through slabs, the pipe sleeves and 
hanger inserts, as well as the location and elevation of utility lines, 
including, but not limited to, conveyor systems, pneumatic tubes, 
ducts, and conduits and pipes 2 inches and larger in diameter. These 
drawings, including plans, elevations, and sections as appropriate, 
shall clearly show the manner in which the utilities fit into the 
available space and relate to each other and to existing building 
elements. Drawings shall be of appropriate scale to satisfy the 
previously stated purposes, but not smaller than \3/8\-inch scale. 
Drawings may be composite (with distinctive colors for the various 
trades) or may be separate but fully coordinated drawings (such as 
sepias or photographic paper reproducibles) of the same scale. Separate 
drawings shall depict identical building areas or sections and shall be 
capable of being overlaid in any combination. The submitted drawings 
for a given area of the project shall show the work of all trades that 
will be involved in that particular area. Six complete composite 
drawings or six complete sets of separate reproducible drawings shall 
be received by the Government not less than 20 days prior to the 
scheduled start of the work in the area illustrated by the drawings, 
for the purpose of showing the contractor's planned methods of 
installation. The objectives of such drawings are to promote carefully 
planned work sequence and proper trade coordination, in order to assure 
the expeditious solutions of problems and the installation of lines and 
equipment as contemplated by the contract documents while avoiding or 
minimizing additional costs to the contractor and to the Government. In 
the event the contractor, in coordinating the various installations and 
in planning the method of installation, finds a conflict in location or 
elevation of any of the utilities with themselves, with structural 
items or with other construction items, he/she shall bring this 
conflict to the attention of the contracting officer immediately. In 
doing so, the contractor shall explain the proposed method of solving 
the problem or shall request instructions as to how to proceed if 
adjustments beyond those of usual trades coordination are necessary. 
Utilities installation work will not proceed in any area prior to the 
submission and completion of the Government review of the coordinated 
drawings for that area, nor in any area in which conflicts are 
disclosed by the coordination drawings, until the conflicts have been 
corrected to the satisfaction of the contracting officer. It is the 
responsibility of the contractor to submit the required drawings in a 
timely manner consistent with the requirements to complete the work 
covered by this contract within the prescribed contract time.


852.236-81  [Reserved].


852.236-82  Payments under fixed-price construction contracts (without 
NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that do not contain a section entitled ``Network Analysis System 
(NAS).''

Payments Under Fixed-Price Construction Contracts (Apr 1984)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
    (a) Retainage:
    (1) The contracting officer may retain funds:
    (i) Where performance under the contract has been determined to be 
deficient or the contractor has performed in an unsatisfactory manner 
in the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following:
    (i) Unsatisfactory progress as determined by the contracting 
officer;
    (ii) Failure to meet schedule in Schedule of Work Progress;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications, or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this subparagraph shall be construed as limiting 
the contracting officer's right to withhold funds under other 
provisions of the contract or in accordance with the general law and 
regulations regarding the administration of Government contracts.
    (b) The contractor shall submit a schedule of cost to the 
contracting officer for approval within 30 calendar days after date of 
receipt of notice to proceed. Such schedule will be signed and 
submitted in triplicate. The approved cost schedule will be one of the 
bases for determining progress payments to the contractor for work 
completed. This schedule shall show cost by the branches of work for 
each building or unit of the contract, as instructed by the resident 
engineer.
    (1) The branches shall be subdivided into as many sub-branches as 
are necessary to cover all component parts of the contract work.
    (2) Costs as shown on this schedule must be true costs and, should 
the resident engineer so desire, he/she may require the contractor to 
submit the original estimate sheets or other information to 
substantiate the detailed makeup of the schedule.
    (3) The sum of the sub-branches, as applied to each branch, shall 
equal the total cost of such branch. The total cost of all branches 
shall equal the contract price.
    (4) Insurance and similar items shall be prorated and included in 
the cost of each branch of the work.
    (5) The cost schedule shall include separate cost information for 
the systems listed in the table in this paragraph (b)(5). The 
percentages listed below are proportions of the cost listed in the 
contractor's cost schedule and identify, for payment purposes, the 
value of the work to adjust, correct and test systems after the 
material has been installed. Payment of the listed percentages will be 
made only after the contractor has demonstrated that each of the 
systems is substantially complete and operates as required by the 
contract.

[[Page 2408]]



           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                            System                              Percent
------------------------------------------------------------------------
Pneumatic tube system........................................         10
Incinerators (medical waste and trash).......................          5
Sewage treatment plant equipment.............................          5
Water treatment plant equipment..............................          5
Washers (dish, cage, glass, etc.)............................          5
Sterilizing equipment........................................          5
Water distilling equipment...................................          5
Prefab temperature rooms (cold, constant temperature)........          5
Entire air-conditioning system (Specified under 600 Sections)          5
Entire boiler plant system (Specified under 700 Sections)....          5
General supply conveyors.....................................         10
Food service conveyors.......................................         10
Pneumatic soiled linen and trash system......................         10
Elevators and dumbwaiters....................................         10
Materials transport system...................................         10
Engine-generator system......................................          5
Primary switchgear...........................................          5
Secondary switchgear.........................................          5
Fire alarm system............................................          5
Nurse call system............................................          5
Intercom system..............................................          5
Radio system.................................................          5
TV (entertainment) system....................................          5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the contractor in preparing his/her bid and will not 
be binding as pertaining to any contract changes.
    (d) The contracting officer will consider for monthly progress 
payments material and/or equipment procured by the contractor and 
stored on the construction site, as space is available, or at a local 
approved location off the site, under such terms and conditions as such 
officer approves, including but not limited to the following:
    (1) The material or equipment is in accordance with the contract 
requirements and/or approved samples and shop drawings.
    (2) Only those materials and/or equipment as are approved by the 
resident engineer for storage will be included.
    (3) Such materials and/or equipment will be stored separately and 
will be readily available for inspection and inventory by the resident 
engineer.
    (4) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (5) All of the other terms, provisions, conditions and covenants 
contained in the contract shall be and remain in full force and effect 
as therein provided.
    (6) A supplemental agreement will be executed between the 
Government and the contractor with the consent of the contractor's 
surety for off-site storage.
    (e) The contractor, prior to receiving a progress or final payment 
under this contract, shall submit to the contracting officer a 
certification that the contractor has made payment from proceeds of 
prior payments, or that timely payment will be made from the proceeds 
of the progress or final payment then due, to subcontractors and 
suppliers in accordance with the contractual arrangements with them.
    (f) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other things required by 
this contract, have been submitted to the satisfaction of the 
contracting officer.


(End of Clause)

    Alternate I (JUL 2002). If the specifications include guarantee 
period services, the contracting officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:
    (6)(i) The contractor shall at the time of contract award furnish 
the total cost of the guarantee period services in accordance with 
specification section(s) covering guarantee period services. The 
contractor shall submit, within 15 calendar days of receipt of the 
notice to proceed, a guarantee period performance program that shall 
include an itemized accounting of the number of work-hours required to 
perform the guarantee period service on each piece of equipment. The 
contractor shall also submit the established salary costs, including 
employee fringe benefits, and what the contractor reasonably expects to 
pay over the guarantee period, all of which will be subject to the 
contracting officer's approval.
    (ii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and the 
contracting officer shall inform the contractor of the unsatisfactory 
performance, allowing the contractor 10 days to correct deficiencies 
and comply with the contract. The guarantee period service is subject 
to those provisions as set forth in the Payments and Default clauses.


852.236-83  Payments under fixed-price construction contracts 
(including NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that contain a section entitled ``Network Analysis System (NAS).''

Payments Under Fixed-Price Construction Contracts (Jul 2002)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
    (a) Retainage:
    (1) The contracting officer may retain funds:
    (i) Where the performance under the contract has been determined to 
be deficient or the contractor has performed in an unsatisfactory 
manner in the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following:
    (i) Unsatisfactory progress as determined by the contracting 
officer;
    (ii) Failure either to meet schedules in Section Network Analysis 
System (NAS), or to process the Interim Arrow Diagram/Complete Project 
Arrow Diagram;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications, or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this subparagraph shall be construed as limiting 
the contracting officer's right to withhold funds under other 
provisions of the contract or in accordance with the general law and 
regulations regarding the administration of Government contracts.
    (b) The contractor shall submit a schedule of costs in accordance 
with the requirements of Section Network Analysis System (NAS) to the 
contracting officer for approval within 90 calendar days after date of 
receipt of notice to proceed. The approved cost schedule will be one of 
the bases for determining progress payments to the contractor for work 
completed.
    (1) Costs as shown on this schedule must be true costs and, should 
the resident engineer so desire, he/she may require the contractor to 
submit his/her original estimate sheets or other

[[Page 2409]]

information to substantiate the detailed makeup of the cost schedule.
    (2) The total costs of all activities shall equal the contract 
price.
    (3) Insurance and similar items shall be prorated and included in 
each activity cost of the critical path method (CPM) network.
    (4) The CPM network shall include a separate cost loaded activity 
for adjusting and testing of the systems listed in the table in 
paragraph (b)(5) of this section. The percentages listed below will be 
used to determine the cost of adjust and test activities and identify, 
for payment purposes, the value of the work to adjust, correct and test 
systems after the material has been installed.
    (5) Payment for adjust and test activities will be made only after 
the contractor has demonstrated that each of the systems is 
substantially complete and operates as required by the contract.

           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                            System                              Percent
------------------------------------------------------------------------
Pneumatic tube system........................................         10
Incinerators (medical waste and trash).......................          5
Sewage treatment plant equipment.............................          5
Water treatment plant equipment..............................          5
Washers (dish, cage, glass, etc.)............................          5
Sterilizing equipment........................................          5
Water distilling equipment...................................          5
Prefab temperature rooms (cold, constant temperature)........          5
Entire air-conditioning system (Specified under 600 Sections)          5
Entire boiler plant system (Specified under 700 Sections)....          5
General supply conveyors.....................................         10
Food service conveyors.......................................         10
Pneumatic soiled linen and trash system......................         10
Elevators and dumbwaiters....................................         10
Materials transport system...................................         10
Engine-generator system......................................          5
Primary switchgear...........................................          5
Secondary switchgear.........................................          5
Fire alarm system............................................          5
Nurse call system............................................          5
Intercom system..............................................          5
Radio system.................................................          5
TV (entertainment) system....................................          5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the contractor in preparing his/her bid and will not 
be binding as pertaining to any contract changes.
    (d) The contracting officer will consider for monthly progress 
payments material and/or equipment procured by the contractor and 
stored on the construction site, as space is available, or at a local 
approved location off the site, under such terms and conditions as such 
officer approves, including but not limited to the following:
    (1) The material or equipment is in accordance with the contract 
requirements and/or approved samples and shop drawings.
    (2) Only those materials and/or equipment as are approved by the 
resident engineer for storage will be included.
    (3) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (4) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (5) All of the other terms, provisions, conditions and covenants 
contained in the contract shall be and remain in full force and effect 
as therein provided.
    (6) A supplemental agreement will be executed between the 
Government and the contractor with the consent of the contractor's 
surety for off-site storage.
    (e) The contractor, prior to receiving a progress or final payment 
under this contract, shall submit to the contracting officer a 
certification that the contractor has made payment from proceeds of 
prior payments, or that timely payment will be made from the proceeds 
of the progress or final payment then due, to subcontractors and 
suppliers in accordance with the contractual arrangements with them.
    (f) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other things required by 
this contract, have been submitted to the satisfaction of the 
contracting officer.


(End of Clause)

    Alternate I (JUL 2002). If the specifications include guarantee 
period services, the contracting officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:
    (6)(i) The contractor shall show on the critical path method (CPM) 
network the total cost of the guarantee period services in accordance 
with the guarantee period service section(s) of the specifications. 
This cost shall be priced out when submitting the CMP cost loaded 
network. The cost submitted shall be subject to the approval of the 
contracting officer. The activity on the CPM shall have money only and 
not activity time.
    (ii) The contractor shall submit with the CPM a guarantee period 
performance program which shall include an itemized accounting of the 
number of work-hours required to perform the guarantee period service 
on each piece of equipment. The contractor shall also submit the 
established salary costs, including employee fringe benefits, and what 
the contractor reasonably expects to pay over the guarantee period, all 
of which will be subject to the contracting officer's approval.
    (iii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and the 
contracting officer shall inform the contractor of the unsatisfactory 
performance, allowing the contractor 10 days to correct and comply with 
the contract. The guarantee period service is subject to those 
provisions as set forth in the Payments and Default clauses.


852.236-84  Schedule of work progress.

    As prescribed in 836.575, insert the following clause:

Schedule of Work Progress (Nov 1984)

    (a) The contractor shall submit with the schedule of costs, a 
progress schedule that indicates the anticipated installation of work 
versus the elapsed contract time, for the approval of the contracting 
officer. The progress schedule time shall be represented in the form of 
a bar graph with the contract time plotted along the horizontal axis. 
The starting date of the schedule shall be the date the contractor 
receives the ``Notice to Proceed.'' The ending date shall be the 
original contract completion date. At a minimum, both dates shall be 
indicated on the progress schedule. The specific item of work, i.e., 
``Excavation'', ``Floor Tile'', ``Finish Carpentry'', etc., should be 
plotted along the vertical axis and indicated by a line or bar at which 
time(s) during the contract this work is scheduled to take place. The 
schedule shall be submitted in triplicate and signed by the contractor.
    (b) The actual percent completion will be based on the value of 
installed work divided by the current contract amount. The actual 
completion percentage will be indicated on the monthly progress report.
    (c) The progress schedule will be revised when individual or 
cumulative time extensions of 15 calendar days or more are granted for 
any reason. The revised schedule should indicate the new contract 
completion date and should reflect any changes to the

[[Page 2410]]

installation time(s) of the items of work affected.
    (d) The revised progress schedule will be used for reporting future 
scheduled percentage completion.


(End of Clause)


852.236-85  Supplementary labor standards provisions.

    As prescribed in 836.576, insert the following clause:

Supplementary Labor Standards Provisions (Apr 1984)

    (a) The wage determination decision of the Secretary of Labor is 
set forth in section GR, General Requirements, of this contract. It is 
the result of a study of wage conditions in the locality and 
establishes the minimum hourly rates of wages and fringe benefits for 
the described classes of labor in accordance with applicable law. No 
increase in the contract price will be allowed or authorized because of 
payment of wage rates in excess of those listed.
    (b) The contractor shall submit the required copies of payrolls to 
the contracting officer through the resident engineer or engineer 
officer, when acting in that capacity. Department of Labor Form WH-347, 
Payroll, available from the Superintendent of Documents, Government 
Printing Office, Washington, DC 20402, may be used for this purpose. 
If, however, the contractor or subcontractor elects to use an 
individually composed payroll form, it shall contain the same 
information shown on Form WH-347, and in addition be accompanied by 
Department of Labor Form WH-348, Statement of Compliance, or any other 
form containing the exact wording of this form.


(End of Clause)


852.236-86  Worker's Compensation.

    As prescribed in 836.577, insert the following clause:

Worker's Compensation (Date)

    Public Law 107-217 (40 U.S.C. 3172) authorizes the constituted 
authority of States to apply their worker's compensation laws to all 
lands and premises owned or held by the United States.


(End of Clause)


852.236-87  Accident prevention.

    As prescribed in 836.513, insert the following clause:

Accident Prevention (Sep 1993)

    The Resident Engineer on all assigned construction projects, or 
other Department of Veterans Affairs employee if designated in writing 
by the Contracting Officer, shall serve as Safety Officer and as such 
has authority, on behalf of the Contracting Officer, to monitor and 
enforce Contractor compliance with FAR 52.236-13, Accident Prevention. 
However, only the Contracting Officer may issue an order to stop all or 
part of the work while requiring satisfactory or corrective action to 
be taken by the Contractor.


(End of Clause)


852.236-88  Contract changes--supplement.

    As prescribed in 836.578, insert the following clause:

Contract Changes--Supplement (Jul 2002)

    The clauses entitled ``Changes'' in FAR 52.243-4 and ``Differing 
Site Conditions'' in FAR 52.236-2 are supplemented as follows:
    (a) Paragraphs (a)(1) through (a)(4) apply to proposed contract 
changes costing over $500,000.
    (1) When requested by the contracting officer, the contractor shall 
submit proposals for changes in work to the resident engineer. 
Proposals, to be submitted as expeditiously as possible but within 30 
calendar days after receipt of request, shall be in legible form, 
original and two copies, with an itemized breakdown that will include 
material, quantities, unit prices, labor costs (separated into trades), 
construction equipment, etc. (Labor costs are to be identified with 
specific material placed or operation performed.) The contractor must 
obtain and furnish with a proposal an itemized breakdown as described 
above, signed by each subcontractor participating in the change 
regardless of tier. When certified cost or pricing data are required 
under FAR Subpart 15.403, the cost or pricing data shall be submitted 
in accordance with FAR 15.403-5.
    (2) When the necessity to proceed with a change does not allow 
sufficient time to negotiate a modification or because of failure to 
reach an agreement, the contracting officer may issue a change order 
instructing the contractor to proceed on the basis of a tentative price 
based on the best estimate available at the time, with the firm price 
to be determined later. Furthermore, when the change order is issued, 
the contractor shall submit a proposal, which includes the information 
required by paragraph (a)(1), for cost of changes in work within 30 
calendar days.
    (3) The contracting officer will consider issuing a settlement by 
determination to the contract if the contractor's proposal required by 
paragraphs (a)(1) or (a)(2) of this clause is not received within 30 
calendar days or if agreement has not been reached.
    (4) Bond premium adjustment, consequent upon changes ordered, will 
be made as elsewhere specified at the time of final settlement under 
the contract and will not be included in the individual change.
    (b) Paragraphs (b)(1) through (b)(11) apply to proposed contract 
changes costing $500,000 or less:
    (1) When requested by the contracting officer, the contractor shall 
submit proposals for changes in work to the resident engineer. 
Proposals, to be submitted as expeditiously as possible but within 30 
calendar days after receipt of request, shall be in legible form, 
original and two copies, with an itemized breakdown that will include 
material, quantities, unit prices, labor costs (separated into trades), 
construction equipment, etc. (Labor costs are to be identified with 
specific material placed or operation performed.) The contractor must 
obtain and furnish with a proposal an itemized breakdown as described 
above, signed by each subcontractor participating in the change 
regardless of tier. When certified cost or pricing data or information 
other than cost or pricing data are required under FAR 15.403, the data 
shall be submitted in accordance with FAR 15.403-5. No itemized 
breakdown will be required for proposals amounting to less than $1,000.
    (2) When the necessity to proceed with a change does not allow 
sufficient time to negotiate a modification or because of failure to 
reach an agreement, the contracting officer may issue a change order 
instructing the contractor to proceed on the basis of a tentative price 
based on the best estimate available at the time, with the firm price 
to be determined later. Furthermore, when the change order is issued, 
the contractor shall submit within 30 calendar days a proposal, which 
includes the information required by paragraph (b)(1), for the cost of 
the changes in work.
    (3) The contracting officer will consider issuing a settlement by 
determination to the contract if the contractor's proposal required by 
paragraphs (b)(1) or (b)(2) of this clause is not received within 30 
calendar days, or if agreement has not been reached.
    (4) Allowances not to exceed 10 percent each for overhead and 
profit for the party performing the work will be based on the value of 
labor, material, and use of construction equipment required to 
accomplish the change. As the value of the change increases, a

[[Page 2411]]

declining scale will be used in negotiating the percentage of overhead 
and profit. Allowable percentages on changes will not exceed the 
following: 10 percent overhead and 10 percent profit on the first 
$20,000; 7\1/2\ percent overhead and 7\1/2\ percent profit on the next 
$30,000; 5 percent overhead and 5 percent profit on balance over 
$50,000. Profit shall be computed by multiplying the profit percentage 
by the sum of the direct costs and computed overhead costs.
    (5) The prime contractor's or upper-tier subcontractor's fee on 
work performed by lower-tier subcontractors will be based on the net 
increased cost to the prime contractor or upper-tier subcontractor, as 
applicable. Allowable fee on changes will not exceed the following: 10 
percent fee on the first $20,000; 7\1/2\ percent fee on the next 
$30,000; and 5 percent fee on balance over $50,000.
    (6) Not more than four percentages, none of which exceed the 
percentages shown above, will be allowed regardless of the number of 
tiers of subcontractors.
    (7) Where the contractor's or subcontractor's portion of a change 
involves credit items, such items must be deducted prior to adding 
overhead and profit for the party performing the work. The contractor's 
fee is limited to the net increase to contractor of subcontractors' 
portions cost computed in accordance herewith.
    (8) Where a change involves credit items only, a proper measure of 
the amount of downward adjustment in the contract price is the 
reasonable cost to the contractor if he/she had performed the deleted 
work. A reasonable allowance for overhead and profit are properly 
includable as part of the downward adjustment for a deductive change. 
The amount of such allowance is subject to negotiation.
    (9) Cost of Federal Old Age Benefit (Social Security) tax and of 
Worker's Compensation and Public Liability insurance appertaining to 
changes are allowable. While no percentage will be allowed thereon for 
overhead or profit, prime contractor's fee will be allowed on such 
items in subcontractors' proposals.
    (10) Overhead and contractor's fee percentages shall be considered 
to include insurance other than mentioned herein, field and office 
supervisors and assistants, security police, use of small tools, 
incidental job burdens, and general home office expenses and no 
separate allowance will be made therefore. Assistants to office 
supervisors include all clerical, stenographic and general office help. 
Incidental job burdens include, but are not necessarily limited to, 
office equipment and supplies, temporary toilets, telephone and 
conformance to OSHA requirements. Items such as, but not necessarily 
limited to, review and coordination, estimating and expediting relative 
to contract changes are associated with field and office supervision 
and are considered to be included in the contractor's overhead and/or 
fee percentage.
    (11) Bond premium adjustment, consequent upon changes ordered, will 
be made as elsewhere specified at the time of final settlement under 
the contract and will not be included in the individual change.


(End of Clause)


852.236-89  Buy American Act.

    As prescribed in Table 825.1102, insert the following clause:

Buy American Act (Date)

    (a) Reference is made to the clause entitled ``Buy American Act--
Construction Materials,'' FAR 52.225-9.
    (b) Notwithstanding a bidder's right to offer identifiable foreign 
construction material in its bid pursuant to FAR 52.225-9, VA does not 
anticipate accepting an offer that includes foreign construction 
material.
    (c) If a bidder chooses to submit a bid that includes foreign 
construction material, that bidder must provide a listing of the 
specific foreign construction material he/she intends to use and a 
price for said material. Bidders must include bid prices for comparable 
domestic construction material. If VA determines not to accept foreign 
construction material and no comparable domestic construction material 
is provided, the entire bid will be rejected.
    (d) Any foreign construction material proposed after award will be 
rejected unless the bidder proves to VA's satisfaction: (1) It was 
impossible to request the exemption prior to award, and (2) said 
domestic construction material is no longer available, or (3) where the 
price has escalated so dramatically after the contract has been awarded 
that it would be unconscionable to require performance at that price. 
The determinations required by (1), (2), and (3) of this paragraph 
shall be made in accordance with Subpart 825.2 and FAR 25.2.
    (e) By signing this bid, the bidder declares that all articles, 
materials and supplies for use on the project shall be domestic unless 
specifically set forth on the Bid Form or addendum thereto.


(End of Cause)

    Alternate I (Date). As prescribed in Table 825.1102, substitute the 
following paragraphs for paragraphs (a) and (b) of the basic clause:
    (a) Reference is made to the clause entitled ``Buy American Act--
Construction Materials under Trade Agreements,'' FAR 52.225-11.
    (b) The restrictions contained in this clause 852.236-89 are waived 
for designated country construction material as defined in FAR 52.225-
11. Notwithstanding a bidder's right to offer identifiable foreign 
construction material in its bid pursuant to FAR 52.225-11, VA does not 
anticipate accepting an offer that includes foreign construction 
material, other than designated country construction material.
    Alternate II (Date). As prescribed in Table 825.1102, substitute 
the following paragraphs for paragraphs (a) and (b) of the basic 
clause:
    (a) Reference is made to the clause entitled ``Buy American Act--
Construction Materials under Trade Agreements,'' FAR 52.225-11 and its 
Alternate I.
    (b) The restrictions contained in this clause 852.236-89 are waived 
for World Trade Organization (WTO) Government Procurement Agreement 
(GPO) country, Australian, Chilean, least developed country, or 
Caribbean Basin country construction material, as defined in FAR 
52.225-11 and its Alternate I. Notwithstanding a bidder's right to 
offer identifiable foreign construction material in its bid pursuant to 
FAR 52.225-11, VA does not anticipate accepting an offer that includes 
foreign construction material, other than WTO GPO country, Australian, 
Chilean, least developed country, or Caribbean Basin country 
construction material.


852.236-90  Restriction on submission and use of equal products.

    As prescribed in 836.202(c), the following clause shall be included 
in the solicitation if it is determined that only one product will meet 
the Government's minimum needs and the Department of Veterans Affairs 
will not allow the submission of ``equal'' products:

Restriction on Submission and Use of Equal Products (Nov 1986)

    The clause applies to the following items:

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

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

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


Notwithstanding the ``Material and Workmanship'' clause of this 
contract, FAR 52.236-5(a), nor any other

[[Page 2412]]

contractual provision, ``equal'' products will not be considered by the 
Department of Veterans Affairs and may not be used.

(End of Clause)


852.236-91  Special notes.

    As prescribed in 836.579, insert the following clause:

Special Notes (Jul 2002)

    (a) Signing of the bid shall be deemed to be a representation by 
the bidder that:
    (1) Bidder is a construction contractor who owns, operates, or 
maintains a place of business, regularly engaged in construction, 
alteration, or repair of buildings, structures, and communications 
facilities, or other engineering projects, including furnishing and 
installing of necessary equipment; or
    (2) If newly entering into a construction activity, bidder has made 
all necessary arrangements for personnel, construction equipment, and 
required licenses to perform construction work; and
    (3) Upon request, prior to award, bidder will promptly furnish to 
the Government a statement of facts in detail as to bidder's previous 
experience (including recent and current contracts), organization 
(including company officers), technical qualifications, financial 
resources and facilities available to perform the contemplated work.
    (b) Unless otherwise provided in this contract, where the use of 
optional materials or construction is permitted, the same standard of 
workmanship, fabrication and installation shall be required 
irrespective of which option is selected. The contractor shall make any 
change or adjustment in connecting work or otherwise necessitated by 
the use of such optional material or construction, without additional 
cost to the Government.
    (c) When approval is given for a system component having functional 
or physical characteristics different from those indicated or 
specified, it is the responsibility of the contractor to furnish and 
install related components with characteristics and capacities 
compatible with the approved substitute component as required for 
systems to function as noted on drawings and specifications. There 
shall be no additional cost to the Government.
    (d) In some instances it may have been impracticable to detail all 
items in specifications or on drawings because of variances in 
manufacturers' methods of achieving specified results. In such 
instances the contractor will be required to furnish all labor, 
materials, drawings, services and connections necessary to produce 
systems or equipment which are completely installed, functional, and 
ready for operation by facility personnel in accordance with their 
intended use.
    (e) Claims by the contractor for delay attributed to unusually 
severe weather must be supported by climatological data covering the 
period and the same period for the 10 preceding years. When the weather 
in question exceeds in intensity or frequency the 10-year average, the 
excess experienced shall be considered ``unusually severe.'' Comparison 
shall be on a monthly basis. Whether or not unusually severe weather in 
fact delays the work will depend upon the effect of weather on the 
branches of work being performed during the time under consideration.


(End of Clause)


852.237-7  Indemnification and Medical Liability Insurance.

    As prescribed in 837.403, insert the following clause:

Indemnification and Medical Liability Insurance (Oct 1996)

    (a) It is expressly agreed and understood that this is a non-
personal services contract, as defined in Federal Acquisition 
Regulation (FAR) 37.101, under which the professional services rendered 
by the Contractor or its health-care providers are rendered in its 
capacity as an independent contractor. The Government may evaluate the 
quality of professional and administrative services provided but 
retains no control over professional aspects of the services rendered, 
including by example, the Contractor's or its health-care providers' 
professional medical judgment, diagnosis, or specific medical 
treatments. The Contractor and its health-care providers shall be 
liable for their liability-producing acts or omissions. The Contractor 
shall maintain or require all health-care providers performing under 
this contract to maintain, during the term of this contract, 
professional liability insurance issued by a responsible insurance 
carrier of not less than the following amount(s) per specialty per 
occurrence: Contracting Officer insert the dollar amount value(s) of 
standard coverage(s) prevailing within the local community as to the 
specific medical specialty, or specialties, concerned, or such higher 
amount as the Contracting Officer deems necessary to protect the 
Government's interests. However, if the Contractor is an entity or a 
subdivision of a State that either provides for self-insurance or 
limits the liability or the amount of insurance purchased by State 
entities, then the insurance requirement of this contract shall be 
fulfilled by incorporating the provisions of the applicable State law.
    (b) An apparently successful offeror, upon request of the 
Contracting Officer, shall, prior to contract award, furnish evidence 
of the insurability of the offeror and/or of all health-care providers 
who will perform under this contract. The submission shall provide 
evidence of insurability concerning the medical liability insurance 
required by paragraph (a) of this clause or the provisions of State law 
as to self-insurance, or limitations on liability or insurance.
    (c) The Contractor shall, prior to commencement of services under 
the contract, provide to the Contracting Officer Certificates of 
Insurance or insurance policies evidencing the required insurance 
coverage and an endorsement stating that any cancellation or material 
change adversely affecting the Government's interest shall not be 
effective until 30 days after the insurer or the Contractor gives 
written notice to the Contracting Officer. Certificates or policies 
shall be provided for the Contractor and/or each health-care provider 
who will perform under this contract.
    (d) The Contractor shall notify the Contracting Officer if it, or 
any of the health-care providers performing under this contract, change 
insurance providers during the performance period of this contract. The 
notification shall provide evidence that the Contractor and/or health-
care providers will meet all the requirements of this clause, including 
those concerning liability insurance and endorsements. These 
requirements may be met either under the new policy, or a combination 
of old and new policies, if applicable.
    (e) The Contractor shall insert the substance of this clause, 
including this paragraph (e), in all subcontracts for health-care 
services under this contract. The Contractor shall be responsible for 
compliance by any subcontractor or lower-tier subcontractor with the 
provisions set forth in paragraph (a) of this clause.


(End of Clause)


852.237-70  Contractor responsibilities.

    As prescribed in 837.110, insert the following clause:

Contractor Responsibilities (Apr 1984)

    The contractor shall obtain all necessary licenses and/or permits 
required to perform this work. He/she shall take all reasonable 
precautions necessary to protect persons and property from injury or 
damage during the performance of this contract. He/she

[[Page 2413]]

shall be responsible for any injury to himself/herself, his/her 
employees, as well as for any damage to personal or public property 
that occurs during the performance of this contract that is caused by 
his/her employees' fault or negligence, and shall maintain personal 
liability and property damage insurance having coverage for a limit as 
required by the laws of the State of [ ]. Further, it is agreed that 
any negligence of the Government, its officers, agents, servants and 
employees, shall not be the responsibility of the contractor hereunder 
with the regard to any claims, loss, damage, injury, and liability 
resulting therefrom.


(End of Clause)


852.246-70  Guarantee.

    As prescribed in 846.302-70, insert the following clause:

Guarantee (Date)

    The contractor guarantees the equipment against defective material, 
workmanship and performance for a period of [ ],\1\ said guarantee to 
run from date of acceptance of the equipment by the Government. The 
contractor agrees to furnish, without cost to the Government, 
replacement of all parts and material that are found to be defective 
during the guarantee period. Replacement of material and parts will be 
furnished to the Government at the point of installation, if 
installation is within the continental United States, or f.o.b. the 
continental U.S. port to be designated by the contracting officer if 
installation is outside of the continental United States. Cost of 
installation of replacement material and parts shall be borne by the 
contractor.\2\

    \1\ Normally, insert one year. If industry policy covers a 
shorter or longer period, i.e., 90 days or for the life of the 
equipment, insert such period.
    \2\ The above clause will be modified to conform to standards of 
the industry involved.

---------------------------------------------------------------------------
(End of Clause)

    Alternate I (Date). If it is industry policy to furnish, but not 
install, replacement material and parts at the contractor's expense, 
the last sentence will be changed to indicate that cost of installation 
shall be borne by the Government. Where it is industry policy to:
    (1) Guarantee components for the life of the equipment (i.e., 
crystals in transmitters and receivers in radio communications 
systems); or
    (2) Require that highly technical equipment be returned to the 
factory (at contractor's or Government's expense) for replacement of 
defective materials or parts; the clause used will be revised to be 
compatible with such policy.


852.246-71  Inspection.

    As prescribed in 846.302-71(a), insert the following clause:

Inspection (Date)

    Rejected goods will be held subject to contractors order for not 
more than 15 days, after which the rejected merchandise will be 
returned to the contractor's address at his/her risk and expense. 
Expenses incident to the examination and testing of materials or 
supplies that have been rejected will be charged to the contractor's 
account.


(End of Clause)

    Alternate I (Date). As provided in 846.302-71(b), insert the 
following clause:

Inspection (Date)

    The contractor shall remove rejected supplies within 48 hours after 
notice of rejection. Supplies determined to be unfit for human 
consumption will not be removed without permission of the local health 
authorities. Supplies not removed within the allowed time may be 
destroyed. The Department of Veterans Affairs will not be responsible 
for nor pay for products rejected. The contractor will be liable for 
costs incident to examination of rejected products.


(End of Clause)


852.246-72  Frozen processed foods.

    As prescribed in 846.302-72, insert the following clause:

Frozen Processed Foods (Date)

    The products delivered under this contract shall be in excellent 
condition, shall not show evidence of defrosting, refreezing, or 
freezer burn and shall be transported and delivered to the consignee at 
a temperature of 0 degrees Fahrenheit or lower.


(End of Clause)


852.246-73  Noncompliance with packaging, packing, and/or marking 
requirements.

    As prescribed in 846.302-73, insert the following clause:

Noncompliance With Packaging, Packing and/or Marking Requirements 
(Date)

    Failure to comply with the packaging, packing and/or marking 
requirements indicated herein, or incorporated herein by reference, may 
result in rejection of the merchandise and request for replacement or 
repackaging, repacking, and/or marking. The Government reserves the 
right, without obtaining authority from the contractor, to perform the 
required repackaging, repacking, and/or marking services and charge the 
contractor at the actual cost to the Government for the same or have 
the required repackaging, repacking, and/or marking services performed 
commercially under Government order and charge the contractor at the 
invoice rate. In connection with any discount offered, time will be 
computed from the date of completion of such repackaging, repacking 
and/or marking services.


(End of Clause)


852.246-74  Special warranties.

    As prescribed in 846.710-70, insert the following clause:

Special Warranties (Date)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-21 
is supplemented as follows:
    Any special warranties that may be required under the contract 
shall be subject to the elections set forth in the FAR clause at 
52.246-21, Warranty of Construction, unless otherwise provided for in 
such special warranties.


(End of Clause)


852.246-75  Warranty for construction--guarantee period services.

    As prescribed in 846.710-71, insert the following clause:

Warranty for Construction--Guarantee Period Services (Date)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-21 
is supplemented as follows:
    Should the contractor fail to prosecute the work or fail to proceed 
promptly to provide guarantee period services after notification by the 
contracting officer, the Government may, subject to the default clause 
contained at FAR 52.249-10, Default (Fixed-Price Construction), and 
after allowing the contractor 10 days to correct and comply with the 
contract, terminate the right to proceed with the work (or the 
separable part of the work) that has been delayed or unsatisfactorily 
performed. In this event, the Government may take over the work and 
complete it by contract or otherwise, and may take possession of and 
use any materials, appliance, and plant on the work site necessary for 
completing the work. The contractor and its sureties shall be liable 
for any damages to the Government resulting from the contractor's 
refusal or failure to complete the work within this specified time, 
whether or not the contractor's right to proceed with the work is 
terminated. This liability includes any

[[Page 2414]]

increased costs incurred by the Government in completing the work.


(End of Clause)


852.247-70  Determining transportation costs for bid evaluation.

    As prescribed in 847.305-70, insert the following provision:

Determining Transportation Costs for Bid Evaluation (Apr 1984)

    For the purpose of evaluating bids and for no other purpose, the 
delivered price per unit will be determined by adding the nationwide 
average transportation charge to the f.o.b. origin bid prices. The 
nationwide average transportation charge will be determined by applying 
the following formula: Multiply the guaranteed shipping weight by the 
freight, parcel post, or express rate, whichever is proper, to each 
destination shown below and then multiply the resulting transportation 
charges by the anticipated demand factor shown for each destination. 
Total the resulting weighted transportation charges for all 
destinations and divide the total by 20 to give the nationwide average 
transportation charge.

                           Anticipated Demand
------------------------------------------------------------------------
                       Area destination                          Factor
------------------------------------------------------------------------
Oakland, California..........................................          3
Dallas, Texas................................................          2
Omaha, Nebraska..............................................          3
Fort Wayne, Indiana..........................................          4
Atlanta, Georgia.............................................          3
New York, New York...........................................          5
                                                              ----------
    Total of factors.........................................         20
------------------------------------------------------------------------



(End of Provision)


852.252-70  Solicitation provisions or clauses incorporated by 
reference.

    As prescribed in 852.102(a), insert the following provision:

Solicitation Provisions or Clauses Incorporated by Reference (Date)

    The following provisions or clauses incorporated by reference in 
this solicitation must be completed by the offeror or prospective 
contractor and submitted with the quotation or offer. Copies of these 
provisions or clauses are available on the Internet at the web sites 
provided in the provision at FAR 52.252-1, Solicitation Provisions 
Incorporated by Reference, or the clause at FAR 52.252-2, Clauses 
Incorporated by Reference. Copies may also be obtained from the 
contracting officer.
    [Contracting officer shall list all FAR and 48 CFR Chapter 8 (VAAR) 
provisions and clauses incorporated by reference that must be completed 
by the offeror or prospective contractor and submitted with the 
quotation or offer.]


(End of Provision)


852.270-1  Representatives of contracting officers.

    As prescribed in 801.603-70(d), insert the following provision:

Representatives of Contracting Officers (Date)

    The contracting officer reserves the right to designate 
representatives to act for him/her in furnishing technical guidance and 
advice or generally monitor the work to be performed under this 
contract. Such designation will be in writing and will define the scope 
and limitation of the designee's authority. A copy of the designation 
shall be furnished the contractor.


(End of Provision)


852.270-2  Bread and bakery products--quantities.

    As prescribed in 870.111-3, insert the following clause:

Bread and Bakery Products--Quantities (Date)

    The bidder agrees to furnish up to 25 percent more or 25 percent 
less than the quantities awarded when ordered by the Department of 
Veterans Affairs.


(End of Clause)


852.270-3  Purchase of shellfish.

    As prescribed in 870.111-3, insert the following clause:

Purchase of Shellfish (Apr 1984)

    The bidder certifies that oysters, clams, and mussels will be 
furnished only from plants approved by and operated under the 
supervision of shellfish authorities of States whose certifications are 
endorsed currently by the U.S. Public Health Service, and the names and 
certificate numbers of those shellfish dealers must appear on current 
lists published by the U.S. Public Health Service. These items shall be 
packed and delivered in approved containers, sealed in such manner that 
tampering is easily discernible, and marked with packer's certificate 
number impressed or embossed on the side of such containers and 
preceded by the State abbreviation. Containers shall be tagged or 
labeled to show the name and address of the approved producer or 
shipper, the name of the State of origin, and the certificate number of 
the approved producer or shipper.


(End of Clause)


852.271-70  Nondiscrimination in services provided to beneficiaries.

    As prescribed in 837.110-70 and 871.212, insert the following 
provision:

Nondiscrimination in Services Provided to Beneficiaries (Date)

    The contractor agrees to provide all services specified in this 
contract for any person determined eligible by the Department of 
Veterans Affairs, regardless of the race, color, religion, sex, or 
national origin of the person for whom such services are ordered. The 
contractor further warrants that he/she will not resort to 
subcontracting as a means of circumventing this provision.


(End of Provision)


852.271-71  [Reserved].


852.271-72  Time spent by counselee in counseling process.

    As prescribed in 871.212, insert the following clause:

Time Spent by Counselee in Counseling Process (Apr 1984)

    The contractor agrees that no counselee referred under the 
provisions of this agreement will be required to give any extra time in 
connection with the counseling process to supply test results or other 
information for purposes other than those specified in this contract.


(End of Clause)


852.271-73  Use and publication of counseling results.

    As prescribed in 871.212, insert the following clause:

Use and Publication of Counseling Results (Date)

    The contractor agrees that none of the information or data gathered 
in connection with the services specified in this contract or studies 
or materials based thereon or relating thereto will be publicized 
without the prior approval of the Under Secretary for Benefits or his/
her designee.


(End of Clause)


852.271-74  Inspection.

    As prescribed in 871.212, insert the following clause:

Inspection (Date)

    The contractor will permit the duly authorized representative of 
the Department of Veterans Affairs to visit the place of instruction or 
the counseling and testing operations as may be necessary and examine 
the training facilities, the work of the veterans in training under 
this contract, and the records of these operations.


[[Page 2415]]



(End of Clause)


852.271-75  Extension of contract period.

    As prescribed in 871.212, insert the following clause:

Extension of Contract Period (Apr 1984)

    This contract may be extended from year to year if agreeable to 
both parties provided the agreement for extension is consummated 30 
days prior to the expiration date, and further provided that there is 
no change in the provisions, terms, conditions, or rate of payment. Any 
extension made hereunder is subject to the availability of funds during 
the period covered by the extension.


(End of Clause)


852.273-70  Late offers.

    As prescribed in 873.110(a), insert the following provision:

Late Offers (Jan 2003)

    This provision replaces paragraph (f) of FAR provision 52.212-1. 
Offers or modifications of offers received after the time set forth in 
a request for quotations or request for proposals may be considered, at 
the discretion of the contracting officer, if determined to be in the 
best interest of the Government. Late bids submitted in response to an 
invitation for bid (IFB) will not be considered.


(End of Provision)


852.273-71  Alternative negotiation techniques.

    As prescribed in 873.110(b), insert the following provision:

Alternative Negotiation Techniques (Jan 2003)

    The contracting officer may elect to use the alternative 
negotiation techniques described in section 873.111(e) of 48 Code of 
Federal Regulations Chapter 8 in conducting this procurement. If used, 
offerors may respond by maintaining offers as originally submitted, 
revising offers, or submitting an alternative offer. The Government may 
consider initial offers unless revised or withdrawn, revised offers, 
and alternative offers in making the award. Revising an offer does not 
guarantee an offeror an award.


(End of provision)


852.273-72  Alternative evaluation.

    As prescribed in 873.110(c), insert the following provision:

Alternative Evaluation (Jan 2003)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror submitting the lowest priced 
offer that conforms to the solicitation. During the specified period 
for receipt of offers, the amount of the lowest offer will be posted 
and may be viewed by--[Contracting officer insert description of how 
the information may be viewed electronically or otherwise]--. Offerors 
may revise offers anytime during the specified period. At the end of 
the specified time period for receipt of offers, the responsible 
offeror submitting the lowest priced offer will be in line for award.
    (b) Except when it is determined not to be in the Government's best 
interest, the Government will evaluate offers for award purposes by 
adding the total price for all options to the total price for the basic 
requirement. The Government may determine that an offer is unacceptable 
if the option prices are materially unbalanced. Evaluation of options 
shall not obligate the Government to exercise the option(s).


(End of provision)


852.273-73  Evaluation--health-care resources.

    As prescribed in 873.110(d), in lieu of FAR provision 52.212-2, the 
contracting officer may insert a provision substantially as follows:

Evaluation--Health-Care Resources (Jan 2003)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror whose offer, conforming to the 
solicitation, will be most advantageous to the Government, price and 
other factors considered. The following information or factors shall be 
used to evaluate offers: --[Contracting officer insert evaluation 
information or factors, such as technical capability to meet the 
Government's requirements, past performance, or such other evaluation 
information or factors as the contracting officer deems necessary to 
evaluate offers. Price must be evaluated in every acquisition. The 
contracting officer may include the evaluation information or factors 
in their relative order of importance, such as in descending order of 
importance. The relative importance of any evaluation information must 
be stated in the solicitation.]--
    (b) Except when it is determined not to be in the Government's best 
interest, the Government will evaluate offers for award purposes by 
adding the total price for all options to the total price for the basic 
requirement. The Government may determine that an offer is unacceptable 
if the option prices are materially unbalanced. Evaluation of options 
shall not obligate the Government to exercise the option(s).
    (c) If this solicitation is a request for proposals (RFP), a 
written notice of award or acceptance of an offer, mailed or otherwise 
furnished to the successful offeror within the time for acceptance 
specified in the offer, shall result in a binding contract without 
further action by either party. Before the offer's specified expiration 
time, the Government may accept an offer (or part of an offer), whether 
or not there are negotiations after its receipt, unless a written 
notice of withdrawal is received before award.


(End of provision)


852.273-74  Award without exchanges.

    As prescribed in 873.110(e), insert the following provision:

Award Without Exchanges (Jan 2003)

    The Government intends to evaluate proposals and award a contract 
without exchanges with offerors. Therefore, each initial offer should 
contain the offeror's best terms from a cost or price and technical 
standpoint. However, the Government reserves the right to conduct 
exchanges if later determined by the contracting officer to be 
necessary.


(End of provision)

PART 853--FORMS

Sec.
853.000 Scope of part.
Subpart 853.1--General
853.107 Obtaining forms.
Subpart 853.2--Prescription of Forms
853.201 Federal acquisition system.
853.201-1 Contracting authority and responsibilities (SF 1402).
853.213 Simplified acquisition procedures (SF's 18, 30, 44, 1165, 
1449, and OF's 336, 347, and 348).
853.215 Contracting by negotiation.
853.215-70 VA Form 10-1170, Application for Furnishing Nursing Home 
Care to Beneficiaries of VA.
853.236 Construction and architect-engineer contracts.
853.236-70 VA Form 10-6298, Architect-Engineer Fee Proposal.
853.271 Loan Guaranty, Education and Vocational Rehabilitation and 
Employment Service.
853.271-1 Loan Guaranty Program (VA Forms 26-6724 and 26-1839).
853.271-2 Education Programs.
Subpart 853.3--Illustration of Forms
853.300 Scope of subpart.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.


853.000  Scope of part.

    This part prescribes VA forms for use in the acquisition of goods 
and services. It only identifies forms that are used

[[Page 2416]]

between VA and its contractors or the general public. It does not 
identify forms for uses internal to VA or between VA and another 
Federal agency.

Subpart 853.1--General


853.107  Obtaining forms.

    The VA forms may be obtained from any VA contracting office or by 
requesting such forms from the Deputy Assistant Secretary for 
Acquisition and Material Management, Department of Veterans Affairs, 
810 Vermont Avenue, NW., Washington, DC 20420.

Subpart 853.2--Prescription of Forms


853.201  Federal acquisition system.


853.201-1  Contracting authority and responsibilities (SF 1402).

    Standard Form (SF) 1402, Certificate of Appointment, is used in 
accordance with FAR 1.603-3, Appointment, to appoint VA contracting 
officers under VA's Contracting Officer Certification Program (see 
801.690-6).


853.213  Simplified acquisition procedures (SF's 18, 30, 44, 1165, 
1449, and OF's 336, 347, and 348).

    The following forms are prescribed as stated in this section for 
use in simplified acquisition procedures, orders under existing 
contracts or agreements, orders from required sources of supplies and 
services, and orders for other supplies or services:
    (a) VA Forms 90-2138, Order for Supplies or Services, or 90-2138-
ADP, Purchase Order for Supplies or Service, shall be used as indicated 
in 813.307. They will be used in lieu of but similar to OF 347, Order 
of Supplies and Services, or Standard Form 1449, Solicitation/Contract/
Order for Commercial Items.
    (b) The following forms are for use for obtaining indicated medical 
and dental services within the limitations prescribed in 813.307:
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record Authorization and Invoice for 
Outpatient Service.
    (c) VA Form 10-2511, Authority and Invoice for Travel by Ambulance 
or Other Hired Vehicle, will be used as prescribed in 813.307.
    (d) VA Form 10-2421, Prosthetics Authorization and Items and 
Services, will be used for indicated procurements not to exceed $300 as 
prescribed in 813.307.


853.215  Contracting by negotiation.


853.215-70  VA Form 10-1170, Application for Furnishing Nursing Home 
Care to Beneficiaries of VA.

    VA Form 10-1170, Application for Furnishing Nursing Home Care to 
Beneficiaries of VA, will be used for establishing contract nursing 
home care for VA beneficiaries.


853.236  Construction and architect-engineer contracts.


853.236-70  VA Form 10-6298, Architect-Engineer Fee Proposal.

    VA Form 10-6298, Architect-Engineer Fee Proposal, shall be used as 
prescribed in 836.606-71.


853.271  Loan Guaranty, Education and Vocational Rehabilitation and 
Counseling Programs.


853.271-1  Loan Guaranty Program (VA Forms 26-6724 and 26-1839).

    (a) VA Form 26-6724, Invitation, Bid, and/or Acceptance or 
Authorization, will be used in obtaining services specified in Subpart 
871.1.
    (b) VA Form 26-1839, Compliance Inspection Report, will be used for 
inspection of repairs for properties under the Loan Guaranty Program as 
specified in 846.472.


853.271-2  Education Programs.

    To obtain education or rehabilitation services, contracting 
officers may use an individual written contract or VA Form 28-1905, 
Authorization and Certification of Entrance or Reentrance into 
Rehabilitation and Certification of Status.

Subpart 853.3--Illustration of Forms


853.300  Scope of subpart.

    VA Forms will not be illustrated in this VAAR. Persons wishing to 
obtain copies of VA forms prescribed in the VAAR may do so in 
accordance with 853.107. VA forms may also be available on the Web at 
http://www.va.gov/vaforms/.

SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS

PART 870--SPECIAL PROCUREMENT CONTROLS

Subpart 870.1--Controls
Sec.
870.111 Subsistence.
870.111-3 Contract Clauses.
870.111-5 Frozen processed food products.
870.112 Telecommunications equipment.
870.113 Paid use of conference facilities.
870.115 Food service equipment.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 870.1--Controls


870.111  Subsistence.


870.111-3  Contract clauses.

    (a) The contracting officer shall include the clause at 852.270-2, 
Bread and Bakery Products--Quantities, in solicitations and contracts 
for bread and bakery products.
    (b) The contracting officer shall include the clause at 852.270-3, 
Purchase of Shellfish, in solicitations and contracts for shellfish.


870.111-5  Frozen processed food products.

    (a) The following frozen processed food products must have a label 
complying with the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 
et seq.), which requires that all ingredients be listed according to 
the order of their predominance:
    (1) Frozen processed food products that contain meat, poultry, or a 
significant proportion of eggs.
    (2) Frozen, processed food products that contain fish or fish 
products.
    (3) Frozen bakery products.
    (b) All procured frozen processed food products that contain meat, 
poultry or a significant proportion of eggs must meet the following 
requirements:
    (1) The products must be processed or prepared in plants operating 
under the supervision of the U.S. Department of Agriculture (USDA).
    (2) The product must be inspected and approved in accordance with 
USDA regulations governing meat, poultry, or egg inspection. A label or 
seal that indicates compliance with USDA regulations, affixed to the 
container, will be accepted as evidence of compliance.
    (c) All procured frozen, processed food products that contain fish 
or fish products must meet the following requirements:
    (1) The product must be processed or prepared in plants operated 
under the supervision of the U.S. Department of Commerce (DOC). The 
products listed in DOC's publication, ``Approved List of Sanitarily 
Inspected Fish Establishments'' are processed in plants under Federal 
inspection of the National Marine Fisheries Service, National Oceanic 
and Atmospheric Administration, DOC. The inspected products packed 
under various labels bearing the brand names are produced in accordance 
with current U.S. Grade Standards or official product specifications, 
packed under optimum hygienic conditions, and must meet Federal, State, 
and city sanitation and health regulations. Such brand label or

[[Page 2417]]

DOC seal indicating compliance with DOC regulations, affixed to a 
container, will be accepted as evidence of compliance.
    (2) If the condition in paragraph (c)(1) of this section was not 
met (no seal), the shipment may be lot inspected by the DOC and 
containers stamped to indicate acceptance or a Certification of 
Inspection issued to accompany the shipment.
    (d) Producers of frozen bakery products that ship products in 
interstate commerce are required to comply with the Federal Food, Drug 
and Cosmetic Act. Therefore, the product must be verified as shipped 
interstate or that the producer ships products to other purchasers 
interstate.


870.112  Telecommunications equipment.

    (a) The contracting officer must include the clause at 852.211-71, 
Special Notice, in solicitations, including those for construction, 
that are based on detailed purchase descriptions or formal 
specifications for telecommunications equipment, as defined in VA 
manual MP-6, Part VIII, (available at any VA facility).
    (b) The Telecommunications Support Service must review and approve 
the descriptive literature required by the clause in 852.211-71, 
Special Notice, furnished by the contractor after award, before 
delivery or installation by the contractor. Promptly upon receipt of 
the descriptive literature, contracting officers will forward it, 
together with a copy of the contract, the formal specification, or the 
detailed purchase description, to the DSPE.
    (c) Solicitations, including those for construction, for 
telecommunications equipment based on ``brand name or equal'' purchase 
description are subject to the following:
    (1) Before award, contracting officers will forward to the DSPE the 
abstract of bids, one copy of each offer received, including 
descriptive literature and pertinent letters, and the comments and 
recommendations of the contracting officer.
    (2) No commitments are to be made to contractors before receiving 
Central Office's response.
    (3) The solicitation must allow at least 30 calendar days for 
acceptance to allow sufficient time for the review required by this 
paragraph. (See FAR 52.214-16.)


870.113  Paid use of conference facilities.

    When contracting for the use of conference facilities, contracting 
officers shall follow and comply with the Federal Travel Regulation, 41 
CFR Part 301-74, Conference Planning, and shall document the contract 
file as specified therein, including documentation of efforts to locate 
Government-owned space and efforts to reduce costs.


870.115  Food service equipment.

    (a) All new food service equipment purchased for Dietetic Service 
through other than Defense General Supply Center sources must meet 
requirements set forth by the National Sanitation Foundation.
    (b) The contracting officer will accept an affixed National 
Sanitation Foundation label and/or documentation of the certification 
by National Sanitation Foundation from the contractor as evidence that 
the subject equipment meets sanitation standards issued by the National 
Sanitation Foundation.

PART 871--LOAN GUARANTY AND VOCATIONAL REHABILITATION AND 
EMPLOYMENT PROGRAMS

Subpart 871.1--Loan Guaranty and Direct Loan Programs
Sec.
871.100 Scope of subpart.
871.101 Policy.
871.102 Authorization for repairs to properties.
871.104 Qualification of bidders.
871.106 Lien waivers.
871.107 Stipulations against liens.
Subpart 871.2--Vocational Rehabilitation and Employment Service
871.200 Scope of subpart.
871.201 General.
871.201-1 Requirements for the use of contracts.
871.201-2 Requirements when contracts are not required.
871.201-3 Medical services.
871.201-4 Letter contracts.
871.202 Marking and release of supplies.
871.203 Renewals or supplements to contracts.
871.204 Guaranteed payment.
871.205 Proration of charges.
871.206 Other fees and charges.
871.207 Payment of tuition or fees.
871.208 Rehabilitation facilities.
871.209 Records and reports.
871.210 Correspondence courses.
871.211 Information concerning correspondence courses.
871.212 Contract clauses.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-
1.304.

Subpart 871.1--Loan Guaranty and Direct Loan Programs


871.100  Scope of subpart.

    This subpart sets forth policy and procedures with respect to the 
loan guaranty and direct loan programs as they pertain to property 
management, including the acquisition, management, and disposition of 
property, real, personal, or mixed, that were secured by loans 
guaranteed, insured, or made under Title 38, U.S.C.


871.101  Policy.

    All acquisitions for the repair and maintenance of VA property 
acquired under 38 U.S.C. Chapter 37 must be made in accordance with FAR 
Parts 14, 15, and 16, Parts 814, 815, and 816 of this chapter, and this 
subpart.


871.102  Authorization for repairs to properties.

    (a) Except as provided in this subpart, Directors, Loan Guaranty 
Officers, and Assistant Loan Guaranty Officers, VA Regional Offices, 
are authorized to approve a repair program for any VA property acquired 
under Chapter 37, Title 38, U.S.C., if the cost does not exceed 
$25,000. A repair program means the aggregate amount of the proposed 
contracts that are contemplated in a property analysis by the Loan 
Guaranty activity.
    (b) In cases where the expenditure is known or estimated to exceed 
$25,000, the Loan Guaranty Officer, or his or her designee, must 
forward the request, together with the loan guaranty folder, to the 
Under Secretary for Benefits for approval.
    (c) During the period when VA has assumed custody of the property 
from a holder and before its conveyance to VA under 38 CFR 36.4320, 
repairs not in excess of $3,500 are authorized, when appropriate to 
make the property ready for sale at an earlier date than would 
otherwise be possible if the repair program was delayed until VA 
acquired absolute title. In cases where the expenditure is known or 
estimated to exceed $3,500, the Loan Guaranty Officer, or his or her 
designee, must forward the request, together with the loan guarantee 
folder, to the Under Secretary for Benefits for approval.
    (d) The holder must not make repairs to a property when it has 
continued custody, except for emergency repairs not in excess of $500, 
unless the holder gives adequate notice to the Director, Regional 
Office. Emergency repairs means immediate action to preserve the 
property from serious damage or to correct a situation imminently 
dangerous to life or limb, including the initial cleanup of the 
property to prevent the risk of damage by fire or vandalism.
    (e) An approved management broker may be authorized, when the 
property is assigned, to incur expenses for fuel and utilities or other 
recurring items that VA is required to furnish to its tenants or are 
required to maintain the property if the following conditions are met:

[[Page 2418]]

    (1) Advance blanket authorization to a management broker must be 
limited to repairs not in excess of $500 in any transaction.
    (2) The management broker must either submit receipts with an 
invoice or maintain receipts for inspection.
    (3) Expenditures in excess of $500 require prior approval of the 
Director, Regional Office, having jurisdiction of the property.
    (4) The management broker must aggregate the costs of repairs when 
determining whether prior approval is required.


871.104  Qualification of bidders.

    (a) Bidders must be qualified in accordance with procedures 
outlined in FAR Subpart 9.1 and Subpart 809.1 of this chapter.
    (b) Management brokers are not acceptable bidders for a repair 
contract due to their close association on a fee basis with VA. This 
restriction also applies to any contracting firm in which the 
management broker has an interest and in which it could be presumed 
that the firm would have an advantage over the other bidders. This does 
not preclude the management broker from performing routine recurring 
maintenance or minor repairs. When seeking payment for maintenance or 
repairs, the management broker must establish that any charges are not 
in excess of the prevailing fees for similar services in the area.


871.106  Lien waivers.

    (a) In a contract for $2,500 or more, the contracting officer must 
include the following requirements:
    (1) The contractor must sign a formal release in full or a lien 
waiver before payment may be made.
    (2) The contractor must notify the Director, Regional Office, of 
any subcontracts for services or materials in excess of $2,500. Each 
subcontractor must sign the release or waiver jointly with the prime 
contractor or exercise a release or waiver in the subcontractor's own 
name.
    (b) The contracting officer must not pay the contractor unless the 
release or waiver accompanies the contractor's invoice.
    (c) Before any authorized partial payment, the contractor must 
execute a release or waiver.
    (d) Due to the variations of local law, no standard release or 
waiver is prescribed. Each release or waiver must be prepared in 
accordance with local law and must be in a form acceptable to the 
District Counsel.


871.107  Stipulations against liens.

    (a) In a contract for an amount less than $2,500, when determined 
necessary by the Director, Regional Office, the contracting officer may 
include the following:
    The contractor expressly waives any and all rights to file or 
maintain any mechanics lien or claim against the aforesaid premises.
    (b) In a contract for $2,500 or more when there is doubt that the 
final responsibility of the contractor will provide maximum protection 
to the Government, the contracting officer must include any 
requirements that are available under local law. The contracting 
officer must obtain advice and approval of any contract stipulation or 
legal stipulations against liens from the District Counsel.

Subpart 871.2--Vocational Rehabilitation and Employment Service


871.200  Scope of subpart.

    This subpart establishes policy and procedures for the vocational 
rehabilitation and employment services as it pertains to the following:
    (a) Contracts for training and rehabilitation services.
    (b) Approval of institutions (including rehabilitation facilities), 
training establishments, and employers under 38 U.S.C. Chapter 31.
    (c) Contracts for counseling services under 38 U.S.C. Chapters 30, 
31, 32, 35, and 36 and 10 U.S.C. Chapters 106, 107, and 1606.


871.201  General.


871.201-1  Requirements for the use of contracts.

    The VA negotiates contracts for tuition, fees, books, supplies, and 
other allowable expenses incurred by an institution, training 
establishment, or employer for the training and rehabilitation of 
eligible veterans under 38 U.S.C. Chapter 31 when the following 
services are provided:
    (a) Courses of instruction by correspondence means a course of 
education or training conducted by mail consisting of regular lessons 
or reading assignments, the preparation of required written work that 
involves the application of principles studied in each lesson, the 
correction of assigned work with such suggestions or recommendation as 
may be necessary to instruct the student, the keeping of student 
achievement records, and issuance of a diploma, certificate, or other 
evidence to the student upon satisfactorily completing the requirements 
of the course.
    (b) Special services or special courses that are furnished at the 
request of the VA. Special services or courses are those services or 
courses that VA requests that are over and above those the institution 
customarily provides for similarly circumstanced non-veterans and that 
the contracting officer considers to be necessary for the 
rehabilitation of the trainee.


871.201-2  Requirements when contracts are not required.

    (a) For the purpose of this section a contract is not required when 
all tuition, fees, and charges for books, supplies, or services 
necessary to train or educate an eligible veteran under 38 U.S.C. 
Chapter 31 are published in the school catalog or other published 
document.
    (b) When a contract is not required, the Vocational Rehabilitation 
and Employment Officer must obtain a signed statement of charges from 
the educational institution or training establishment for courses to be 
offered, including the rate of tuition, fees, and separate charges, if 
any, for books, supplies, and equipment handling charges, refund 
policy, and other provisions as are required to determine proper 
payment. The statement of charges may be in the form of a statement on 
VA Form 28-1905, Authorization and Certification of Entrance or 
Reentrance Into Rehabilitation and Certification Status, that charges 
will be in accordance with catalog or other published document 
(identify publication). The statement of charges may not exceed those 
charges nonveterans pay or that are published in the school catalog or 
other published document.


871.201-3  Medical services.

    The medical services provided trainees under vocational 
rehabilitation and education contracts, agreements, or arrangements are 
separate and distinct from any other medical service under the 
jurisdiction of the Veterans Health Administration to which the veteran 
may be entitled. No certificate of eligibility is required from the 
Veterans Health Administration before the veteran may be provided such 
services.


871.201-4  Letter contracts.

    Letter contracts are authorized for use in accordance with the 
provision of FAR 16.603 and in those cases in which it is not possible 
to complete a formal contract with an approved educational institution 
before the enrollment of eligible veterans for training.


871.202  Marking and release of supplies.

    The educational institution or training establishment is not 
required to mark

[[Page 2419]]

supplies to indicate ownership by the United States. Supplies are 
considered to be the property of the trainee at the time they are 
furnished.


871.203  Renewals or supplements to contracts.

    Except for contracts for educational and vocational counseling, the 
contracting office may renew contracts from year to year by completing 
a renewal agreement no later than 30 days before the expiration of the 
contract. There must be no change in the schedule of provisions in the 
original contract.
    (a) Supplements may be negotiated at any time during the contract 
period upon the completion of the supplemental agreement.
    (b) Contracts for educational and vocational counseling may provide 
for automatic extension from year to year.


871.204  Guaranteed payment.

    A contracting officer may not award a contract or agreement to any 
institution or training establishment that requires VA to pay a minimum 
charge, or to enroll a minimum number of participants per quarter, 
semester, term, course, or other period.


871.205  Proration of charges.

    A contract must include the exact formula agreed on for the 
proration of charges in the event that the veteran's program is 
interrupted or discontinued before the end of the term, semester, 
quarter, or other period, or the program is completed in less time than 
stated in the contract.


871.206  Other fees and charges.

    VA may pay fees and other charges that are not prescribed by law 
but are required by nongovernmental organizations, such as initiation 
fees required to become a member of a labor union and the dues 
necessary to maintain membership incidental to training on the job or 
to obtaining employment during a period in which the veteran is a 
chapter 31 participant, provided there are no facilities feasibly 
available where the necessary training can be feasibly accomplished or 
employment obtained without paying such charges. Payment for such fees 
must be made in accordance with Part 813.


871.207  Payment of tuition or fees.

    (a) Contracts, agreements, or arrangements requiring the payment of 
tuition or fees must provide either of the following:
    (1) Payment for tuition or fees must be made in arrears and must be 
prorated in installments over the school year or the length of the 
course.
    (2) An institution may be paid in accordance with paragraph (b) of 
this section, if the institution operates on a regular term, quarter, 
or semester basis and normally accepts students only at the beginning 
of the term, quarter, or semester and if the institution is one of the 
following:
    (i) An institution of higher learning that uses a standard unit of 
credit recognized by accrediting associations. Such institutions 
include those that are members of recognized national or regional 
educational accrediting associations, and those that, although not 
members of such accrediting associations, grant standard units of 
credit acceptable at full value without examination by collegiate 
institutions that are members of national or regional accrediting 
associations.
    (ii) A public tax-supported institution.
    (iii) An institution operated and controlled by a State, county, or 
local board of education.
    (b) An institution that meets the exceptions of paragraph (a)(2) of 
this section and that has a refund policy providing for a graduated 
scale of charges for purposes of determining refunds may be paid part 
or all such tuitions or fees for a term, quarter, or other period of 
enrollment immediately following the date on which the refund expires.
    (c) Proration of charges does not apply to a fee for noncontinuing 
service, such as registration fee, etc.
    (d) The period for which payment of charges may be made is the 
period of actual enrollment and is subject to the following:
    (1) The effective date is the date of the trainee's entrance into 
training status, except that payment may be made for an entire 
semester, quarter, or term in institutions operating on that basis if 
the trainee enters no later than the final date set by the institution 
for enrolling for full credit.
    (2) In those cases where the institution has not set a final date 
for enrolling for full credit or does not set a date acceptable to VA, 
payment may be prorated on the basis of attendance, regardless of the 
refund policy.
    (3) If an institution customarily charges for the amount of credit 
or number of hours of attendance for which a trainee enrolls, payment 
may be made on that basis when a trainee enrolls after the final date 
permitted for carrying full credit for the semester or term.


871.208  Rehabilitation facilities.

    Charges by rehabilitation facilities for the rehabilitation 
services provided under 38 U.S.C. Chapter 31 are paid in the same 
manner as charges for educational and vocational services through 
contract, agreement, or other arrangement.


871.209  Records and reports.

    Contracts, agreements, or arrangements must provide for the number 
and frequency of reports, adequate financial records to support payment 
for each trainee, and maintenance of attendance and progress records. 
Such records must be preserved for a period of three years.


871.210  Correspondence courses.

    Contracts with institutions for correspondence courses must provide 
for the following:
    (a) Major changes in courses or course material are not binding on 
the VA until a supplemental agreement to the contract is negotiated.
    (b) Minor changes in course or course material not affecting the 
length of the course or number of lessons and not lowering the 
educational value of the course or the quality of the course material, 
such as revision of text, the substitution of a newer lesson for an 
older one, or the substitution of equipment of equal or greater value, 
are permitted without supplemental agreements. The institution must 
place such minor changes and revisions on file with the contracting 
officer at the time of the change or revision.
    (c) Trainees must be provided with prompt and adequate lessons 
service and, unless otherwise specified in the contract, must be 
furnished the same texts, lessons service, diplomas, and other services 
as are normally provided for regularly enrolled non-veteran students.
    (d) That all lessons must be adequately serviced on an individual 
basis. Grouping of lessons into units or partial servicing does not 
meet this requirement.
    (e) Each lesson must have a separate examination that is adequate 
in terms of lesson content.
    (f) The training of persons under a VA contract or the fact that 
the United States is using the facilities of the institution for 
training veterans must not be used in any way to advertise the 
institution. References in the advertising media or correspondence of 
the institution shall be limited to a list of courses under 38 U.S.C. 
Chapter 31 and must not be directed or pointed specifically to 
veterans.

[[Page 2420]]

    (g) The rates, fees, and charges must not be in excess of those 
charged nonveterans.
    (h) Payment must be made on a lesson-completed basis in areas for 
assignments sent in by trainees and serviced during a pay period as 
established by the contract.
    (i) Payment must be made only once for each lesson even though it 
is necessary to service a lesson more than once.


871.211  Information concerning correspondence courses.

    Specific questions on correspondence courses as to the content of 
courses, academic credit, and entrance requirements for courses 
included in VA contracts may be directed to the institutions offering 
the courses.


871.212  Contract clauses.

    Contracting officers must use the following clauses, as 
appropriate, in solicitations and contracts for vocational 
rehabilitation and employment services as they pertain to training and 
rehabilitation services and contracts for counseling services:
    (a) 852.271-70 Nondiscrimination in Services Provided to 
Beneficiaries.
    (b) 852.271-72 Time Spent by Counselee in Counseling Process.
    (c) 852.271-73 Use and Publication of Counseling Results.
    (d) 852.271-74 Inspection.
    (e) 852.271-75 Extension of Contract Period.

PART 872--[RESERVED]

PART 873--SIMPLIFIED ACQUISITION PROCEDURES FOR HEALTH-CARE 
RESOURCES

Sec.
873.101 Policy.
873.102 Definitions.
873.103 Priority sources.
873.104 Competition requirements.
873.105 Acquisition planning.
873.106 Presolicitation exchanges with industry.
873.107 Socioeconomic programs.
873.108 Publicizing contract actions.
873.109 General requirements for acquisition of health-care 
resources.
873.110 Solicitation provisions.
873.111 Acquisition strategies for health-care resources.
873.112 Evaluation information.
873.113 Exchanges with offerors.
873.114 Best value pool.
873.115 Proposal revisions.
873.116 Source selection decision.
873.117 Award to successful offeror.
873.118 Debriefings.

    Authority: 38 U.S.C. 501 and 8151-8153; 40 U.S.C. 121(c); and 48 
CFR 1.301-1.304.


873.101  Policy.

    The simplified acquisition procedures set forth in this Department 
of Veterans Affairs Acquisition Regulation (VAAR) part apply to the 
acquisition of health-care resources consisting of commercial services 
or the use of medical equipment or space. These procedures shall be 
used in conjunction with the Federal Acquisition Regulation (FAR) and 
other parts of VAAR. However, when a policy or procedure in FAR or 
another part of VAAR differs from the procedures contained in this 
part, this part shall apply. These procedures contain more flexibility 
than provided in FAR or elsewhere in VAAR. (38 U.S.C. 8153)


873.102  Definitions.

    Commercial service means a service, except construction exceeding 
$2,000 and architect-engineer services, that is offered and sold 
competitively in the commercial marketplace, is performed under 
standard commercial terms and conditions, and is procured using firm-
fixed price contracts. (38 U.S.C. 8153)
    Health-care providers includes health-care plans and insurers and 
any organizations, institutions, or other entities or individuals who 
furnish health-care resources. (38 U.S.C. 8152)
    Health-care resource includes hospital care and medical services 
(as those terms are defined in section 1701 of title 38 United States 
Code (U.S.C.), any other health-care service, and any health-care 
support or administrative resource, including the use of medical 
equipment or space. (38 U.S.C. 8152)


873.103  Priority sources.

    Without regard to FAR 8.002(a)(2), except for the acquisition of 
services available from the Committee for Purchase From People Who Are 
Blind or Severely Disabled, pursuant to the Javits-Wagner-O'Day Act (41 
U.S.C. 46-48c) and FAR Subpart 8.7, there are no priority sources for 
the acquisition of health-care resources consisting of commercial 
services or the use of medical equipment or space. (38 U.S.C. 8153)


873.104  Competition requirements.

    (a) Without regard to FAR Part 6, if the health-care resource 
required is a commercial service, the use of medical equipment or 
space, or research, and is to be acquired from an institution 
affiliated with the Department in accordance with section 7302 of title 
38 U.S.C., including medical practice groups and other approved 
entities associated with affiliated institutions (entities will be 
approved if determined legally to be associated with affiliated 
institutions), or from blood banks, organ banks, or research centers, 
the resource may be acquired on a sole source basis. (38 U.S.C. 8153)
    (b) Acquisition of health-care resources identified in paragraph 
(a) of this section are not required to be publicized as otherwise 
required by 873.108 or FAR 5.101. In addition, written justification, 
as otherwise set forth in section 303(f) of the Federal Property and 
Administration Services Act of 1949 (41 U.S.C. 253(f)) and FAR Part 6, 
is not required. (38 U.S.C. 8153)
    (c) Without regard to FAR 6.101, if the health-care resource 
required is a commercial service or the use of medical equipment or 
space, and is to be acquired from an entity not described in paragraph 
(a) of this section, contracting officers must seek competition to the 
maximum extent practicable and must permit all responsible sources, as 
appropriate under the provisions of this part, to submit a bid, 
proposal or quotation (as appropriate) for the resources to be procured 
and provide for the consideration by the Department of bids, proposals, 
or quotations so submitted. (38 U.S.C. 8153)
    (d) Without regard to FAR 5.101, acquisition of health-care 
resources identified in paragraph (c) of this section shall be 
publicized as otherwise required by 873.108. Moreover, for any such 
acquisition described in paragraph (c) of this section to be conducted 
on a sole source basis, the contracting officer must prepare a 
justification that includes the information and is approved at the 
levels prescribed in section 303(f) of the Federal Property and 
Administration Services Act of 1949 (41 U.S.C. 253(f)) and FAR Part 6. 
(38 U.S.C. 8153)


873.105  Acquisition planning.

    (a) Acquisition planning is an indispensable component of the total 
acquisition process.
    (b) For the acquisition of health-care resources consisting of 
commercial services or the use of medical equipment or space, where the 
acquisition is expected to exceed the simplified acquisition threshold 
(SAT), an acquisition team must be assembled. The team shall be 
tailored by the contracting officer for each particular acquisition 
expected to exceed the SAT. The team should consist of a mix of staff, 
appropriate to the complexity of the acquisition, and may include 
contracting, fiscal, legal, administrative, and technical personnel, 
and such other expertise as necessary to assure a comprehensive 
acquisition plan. The team should include the small business

[[Page 2421]]

advocate representing the contracting activity or a higher level 
designee and the SBA Procurement Center Representative (PRC), if 
available. As a minimum, the team must include the contracting officer 
and a representative of the requesting service. (38 U.S.C. 8153)
    (c) Prior to determining whether a requirement is suitable for 
acquisition using these simplified acquisition procedures, the 
contracting officer or the acquisition team, as appropriate, must 
conduct market research to identify interested businesses. It is the 
responsibility of the contracting officer to ensure the requirement is 
appropriately publicized and information about the procurement 
opportunity is adequately disseminated as set forth in 873.108. (38 
U.S.C. 8153)
    (d) In lieu of the requirements of FAR Part 7 addressing 
documentation of the acquisition plan, the contracting officer may 
conduct an acquisition strategy meeting with cognizant offices to seek 
approval for the proposed acquisition approach. If a meeting is 
conducted, briefing materials shall be presented to address the 
acquisition plan topics and structure in FAR 7.105. Formal written 
minutes shall be prepared to summarize decisions, actions, and 
conclusions and included in the contract file, along with a copy of the 
briefing materials. (38 U.S.C. 8153)


873.106  Presolicitation exchanges with industry.

    (a) This section shall be used in lieu of FAR Part 10, except as 
provided in paragraph (b)(3) of this section. In conducting market 
research, exchange of information by all interested parties involved in 
an acquisition, from the earliest identification of a requirement 
through release of the solicitation, is encouraged. Interested parties 
include potential offerors, end users, Government acquisition and 
support personnel, and others involved in the conduct or outcome of the 
acquisition. The nature and extent of presolicitation exchanges between 
the Government and industry shall be a matter of the contracting 
officer's discretion (for acquisitions not exceeding the simplified 
acquisition threshold) or the acquisition team's discretion, as 
coordinated by the contracting officer. (38 U.S.C. 8153)
    (b) Techniques to promote early exchange of information include--
    (1) Industry or small business conferences;
    (2) Public hearings;
    (3) Market research in accordance with FAR 10.002(b), which shall 
be followed to the extent that the provisions therein would provide 
relevant information;
    (4) One-on-one meetings with potential offerors;
    (5) Presolicitation notices;
    (6) Draft Requests for proposals (RFPs);
    (7) Requests for information (RFIs);
    (8) Presolicitation or preproposal conferences;
    (9) Site visits;
    (10) Electronic notices (e.g., Internet); and
    (11) Use of the Central Contractor Registration (CCR) (https://www.bpn.gov/ccrinq/scripts/search.asp) and the ``Advanced Search'' 
feature on VetBiz Vendor Information Pages (http://vip.vetbiz.gov/search/default.asp) to search for vendors. (38 U.S.C. 8153)


873.107  Socioeconomic programs.

    (a) Implementation. This section provides additional authority, 
over and above that found at FAR 19.502, to waive small business set-
asides. For acquisitions above the micro-purchase threshold, if, 
through market research, the contracting officer determines that there 
is reasonable expectation that reasonably priced bids, proposals, or 
quotations will be received from two or more responsible small 
businesses, a requirement for health-care resources must be reserved 
for small business participation. Without regard to FAR 13.003(b)(1), 
19.502-2, and 19.502-3, the head of the contracting activity (HCA) may 
approve a waiver from the requirement for any set-aside for small 
business participation when a waiver is determined to be in the best 
interest of the Government. (38 U.S.C. 8153)
    (b) Rejecting Small Business Administration (SBA) recommendations. 
(1) The contracting officer (or, if a waiver has been approved in 
accordance with paragraph (a) of this section, the HCA) must consider 
and respond to a recommendation from an SBA representative to set a 
procurement aside for small business within 5 working days. If the 
recommendation is rejected by the contracting officer (or, if a waiver 
has been approved, by the HCA) and if SBA intends to appeal that 
determination, SBA must, within 2 working days after receipt of the 
determination, notify the contracting officer involved of SBA's 
intention to appeal.
    (2) Upon receipt of the notification of SBA's intention to appeal 
and pending issuance of a final Department appeal decision to SBA, the 
contracting officer involved must suspend action on the acquisition 
unless the contracting officer makes a determination in writing that 
proceeding to contract award and performance is in the public interest. 
The contracting officer must promptly notify SBA of the determination 
to proceed with the solicitation and/or contract award and must provide 
a copy of the written determination to SBA.
    (3) SBA shall be allowed 10 working days after receiving the 
rejection notice from the contracting officer (or the HCA, if a waiver 
has been approved) for acquisitions not exceeding $5 million, or 15 
working days after receiving the rejection notice for acquisitions 
exceeding $5 million, to file an appeal. SBA must notify the 
contracting officer within this 10 or 15 day period whether an appeal 
has, in fact, been taken. If notification is not received by the 
contracting officer within the applicable period, it shall be deemed 
that an appeal was not taken.
    (4) SBA shall submit appeals to the Secretary. Decisions shall be 
made by the Procurement Executive, whose decisions shall be final. (38 
U.S.C. 8153)
    (c) Contracting with the Small Business Administration (the 8(a) 
Program). The procedures of FAR 19.8 shall be followed where a 
responsible 8(a) contractor has been identified.
    (d) Certificates of Competency and determinations of 
responsibility. The Director, Office of Small and Disadvantaged 
Business Utilization (OSDBU), Department of Veterans Affairs (VA), and 
the Assistant Administrator, Office of Industrial Assistance, Small 
Business Administration (SBA), shall serve as ombudsmen to assist VA 
contracting officers on any issues relating to Certificates of 
Competency (COC). Copies of all COC referrals to SBA shall be submitted 
to the Director, OSDBU (00SB).


873.108  Publicizing contract actions.

    (a) Without regard to FAR 5.101, all acquisitions under this part 
873, except as provided in paragraph (b) of this section, for dollar 
amounts in excess of the simplified acquisition threshold (SAT), as set 
forth in FAR Part 13, shall be publicly announced utilizing a medium 
designed to obtain competition to the maximum extent practicable and to 
permit all responsible sources, as appropriate under the provisions of 
this part, to submit a bid, proposal, or quotation (as appropriate).
    (1) The publication medium may include the Internet, including the 
Governmentwide point of entry (GPE), and local, regional or national 
publications or journals, as appropriate, at the discretion of the 
contracting

[[Page 2422]]

officer, depending on the complexity of the acquisition.
    (2) Without regard to FAR 5.203, notice shall be published for a 
reasonable time prior to issuance of a request for quotations (RFQ) or 
a solicitation, depending on the complexity or urgency of the 
acquisition, in order to afford potential offerors a reasonable 
opportunity to respond. If the notice includes a complete copy of the 
RFQ or solicitation, a prior notice is not required, and the RFQ or 
solicitation shall be considered to be announced and issued at the same 
time.
    (3) The notice may include contractor qualification parameters, 
such as time for delivery of service, credentialing or medical 
certification requirements, small business or other socio-economic 
preferences, the appropriate small business size standard, and such 
other qualifications as the contracting officer deems necessary to meet 
the needs of the Government. (38 U.S.C. 8153)
    (b) The requirement for public announcement does not apply to sole 
source acquisitions, described in 873.104(a), from institutions 
affiliated with the Department in accordance with section 7302 of title 
38 U.S.C., including medical practice groups and other approved 
entities associated with affiliated institutions (entities will be 
approved if determined legally to be associated with affiliated 
institutions), or from blood banks, organ banks, or research centers. 
In addition, the requirement for public announcement does not apply to 
sole source acquisitions of hospital care and medical services (as 
those terms are defined in section 1701 of title 38 U.S.C.) or any 
other health-care services, including acquisitions for the mutual use 
or exchange of use of such services. However, as required by 38 U.S.C. 
8153(a)(3)(D), acquisitions from non-affiliates, if conducted on a sole 
source basis, must still be justified and approved (see 873.104(d)). 
(38 U.S.C. 8153)
    (c) For acquisitions below the SAT, a public announcement is 
optional. (38 U.S.C. 8153)
    (d) Each solicitation issued under these procedures must 
prominently identify that the requirement is being solicited under the 
authority of 38 U.S.C. 8153 and part 873. (38 U.S.C. 8153)


873.109  General requirements for acquisition of health-care resources.

    (a) Source selection authority. Contracting officers shall be the 
source selection authority for acquisitions of health-care resources, 
consisting of commercial services or the use of medical equipment or 
space, utilizing the guidance contained in this part 873. (38 U.S.C. 
8153)
    (b) Statement of work/Specifications. Statements of work or 
specifications must define the requirement and should, in most 
instances, include qualifications or limitations such as time limits 
for delivery of service, medical certification or credentialing 
restrictions, and small business or other socio-economic preferences. 
The contracting officer may include any other such terms as the 
contracting officer deems appropriate for each specific acquisition. 
(38 U.S.C. 8153)
    (c) Documentation. Without regard to FAR 13.106-3(b), 13.501(b), or 
15.406-3, the contract file must include:
    (1) A brief written description of the procedures used in awarding 
the contract;
    (2) The market research, including the determination that the 
acquisition involves health-care resources;
    (3) The number of offers received; and
    (4) An explanation, tailored to the size and complexity of the 
acquisition, of the basis for the contract award decision. (38 U.S.C. 
8153)
    (d) Time for receipt of quotations or offers. (1) Without regard to 
FAR 5.203, contracting officers shall set a reasonable time for receipt 
of quotations or proposals in requests for quotations (RFQs) and 
solicitations.
    (2) Without regard to FAR 15.208 or 52.212-1(f), quotations or 
proposals received after the time set forth in an RFQ or request for 
proposals (RFP) may be considered at the discretion of the contracting 
officer if determined to be in the best interest of the Government. 
Contracting officers must document the rationale for accepting 
quotations or proposals received after the time specified in the RFQ or 
RFP. This paragraph (d)(2) shall not apply to RFQs or RFPs if 
alternative evaluation techniques described in 873.111(e)(1)(ii) are 
used. This paragraph (d)(2) does not apply to invitations for bid 
(IFBs). (38 U.S.C. 8153)
    (e) Cancellation of procurements. Without regard to FAR 14.404-1, 
any acquisition may be canceled by the contracting officer at any time 
during the acquisition process if cancellation is determined to be in 
the best interest of the Government. (38 U.S.C. 8153)


873.110  Solicitation provisions.

    (a) As provided in 873.109(d), contracting officers shall insert 
the provision at 852.273-70, Late Offers, in all requests for 
quotations (RFQs) and requests for proposals (RFPs) exceeding the 
micro-purchase threshold. (38 U.S.C. 8153)
    (b) The contracting officer shall insert a provision in RFQs and 
solicitations, substantially the same as the provision at 852.273-71, 
Alternative Negotiation Techniques, when either of the alternative 
negotiation techniques described in 873.111(e)(1) will be used. (38 
U.S.C. 8153)
    (c) The contracting officer shall insert the provision at 852.273-
72, Alternative Evaluation, in lieu of the provision at 52.212-2, 
Evaluation--Commercial Items, when the alternative negotiation 
technique described in 873.111(e)(1)(ii) will be used. (38 U.S.C. 8153)
    (d) When evaluation information, as described in 873.112, is to be 
used to select a contractor under an RFQ or RFP for health-care 
resources consisting of commercial services or the use of medical 
equipment or space, the contracting officer may insert the provision at 
852.273-73, Evaluation--Health-Care Resources, in the RFQ or RFP in 
lieu of FAR provision 52.212-2. (38 U.S.C. 8153)
    (e) As provided at 873.113(f), if award may be made without 
exchange with vendors, the contracting officer shall include the 
provision at 852.273-74, Award Without Exchanges, in the RFQ or RFP. 
(38 U.S.C. 8153)
    (f) The contracting officer shall insert the clauses at FAR 52.207-
3, Right of First Refusal of Employment, and at 852.207-70, Report of 
Employment Under Commercial Activities, in all RFQs, solicitations, and 
contracts issued under the authority of 38 U.S.C. 8151-8153 which may 
result in a conversion, from in-house performance to contract 
performance, of work currently being performed by Department of 
Veterans Affairs employees. (38 U.S.C. 8153)


873.111  Acquisition strategies for health-care resources.

    Without regard to FAR 13.003 or 13.500(a), the following 
acquisition processes and techniques may be used, singly or in 
combination with others, as appropriate, to design acquisition 
strategies suitable for the complexity of the requirement and the 
amount of resources available to conduct the acquisition. These 
strategies should be considered during acquisition planning. The 
contracting officer shall select the process most appropriate to the 
particular acquisition. There is no preference for sealed bid 
acquisitions. (38 U.S.C. 8153)
    (a) Request for quotations. (1) Without regard to FAR 6.1 or 6.2, 
contracting officers must solicit a sufficient number of sources to 
promote competition to the maximum extent practicable and to

[[Page 2423]]

ensure that the purchase is advantageous to the Government, based, as 
appropriate, on either price alone or price and other factors (e.g., 
past performance and quality). RFQs must notify vendors of the basis 
upon which the award is to be made.
    (2) For acquisitions in excess of the SAT, the procedures set forth 
in FAR Part 13 concerning RFQs may be utilized without regard to the 
dollar thresholds contained therein. (38 U.S.C. 8153)
    (b) Sealed bidding. FAR Part 14 provides procedures for sealed 
bidding.
    (c) Negotiated acquisitions. If the procedures of FAR Parts 12, 13, 
and 15 differ from the procedures of this part, the procedures of this 
part shall govern. (38 U.S.C. 8153)
    (d) Multiphase acquisition technique. (1) General. Without regard 
to FAR 15.202, multiphase acquisitions may be appropriate when the 
submission of full proposals at the beginning of an acquisition would 
be burdensome for offerors to prepare and for Government personnel to 
evaluate. Using multiphase techniques, the Government may seek limited 
information initially, make one or more down-selects, and request a 
full proposal from an individual offeror or limited number of offerors. 
Provided that the notice notifies offerors, the contracting officer may 
limit the number of proposals during any phase to the number that will 
permit an efficient competition among proposals offering the greatest 
likelihood of award. The contracting officer may indicate in the notice 
an estimate of the greatest number of proposals that will be included 
in the down-select phase. The contracting officer may down-select to a 
single offeror.
    (2) First phase notice. In the first phase, the Government shall 
publish a notice (see 873.108) that solicits responses and that may 
provide, as appropriate, a general description of the scope or purpose 
of the acquisition and the criteria that will be used to make the 
initial down-select decision. The notice may also inform offerors of 
the evaluation criteria or process that will be used in subsequent 
down-select decisions. The notice must contain sufficient information 
to allow potential offerors to make an informed decision about whether 
to participate in the acquisition. The notice must advise offerors that 
failure to participate in the first phase will make them ineligible to 
participate in subsequent phases. The notice may be in the form of a 
synopsis in the Governmentwide point of entry (GPE) or a narrative 
letter or other appropriate method that contains the information 
required by this paragraph.
    (3) First phase responses. Offerors shall submit the information 
requested in the notice described in paragraph (d)(2) of this section. 
Information sought in the first phase may be limited to a statement of 
qualifications and other appropriate information (e.g., proposed 
technical concept, past performance information, limited pricing 
information).
    (4) First phase evaluation and down-select. The Government shall 
evaluate all offerors' submissions in accordance with the notice and 
make a down-select decision.
    (5) Subsequent phases. Additional information shall be sought in 
the second phase so that a down-select can be performed or an award 
made without exchanges, if necessary. The contracting officer may 
conduct exchanges with remaining offeror(s), request proposal 
revisions, or request best and final offers, as determined necessary by 
the contracting officer, in order to make an award decision.
    (6) Debriefing. Without regard to FAR 15.505, contracting officers 
must debrief offerors as required by 873.118 when they have been 
excluded from the competition. (38 U.S.C. 8153)
    (e) Alternative negotiation techniques. (1) Contracting officers 
may utilize alternative negotiation techniques for the acquisition of 
health-care resources. Alternative negotiation techniques may be used 
when award will be based on either price or price and other factors. 
Alternative negotiation techniques include but are not limited to:
    (i) Indicating to offerors a price, contract term or condition, 
commercially available feature, and/or requirement (beyond any 
requirement or target specified in the solicitation) that offerors will 
have to improve upon or meet, as appropriate, in order to remain 
competitive.
    (ii) Posting offered prices electronically or otherwise (without 
disclosing the identity of the offerors) and permitting revisions of 
offers based on this information.
    (2) Except as otherwise permitted by law, contracting officers 
shall not conduct acquisitions under this section in a manner that 
reveals the identities of offerors, releases proprietary information, 
or otherwise gives any offeror a competitive advantage (see FAR 3.104). 
(38 U.S.C. 8153)


873.112  Evaluation information.

    (a) Without regard to FAR 15.304 (except for 15.304(c)(1) and 
(c)(3), which do apply to acquisitions under this authority), the 
criteria, factors, or other evaluation information that apply to an 
acquisition, and their relative importance, are within the broad 
discretion of agency acquisition officials as long as the evaluation 
information is determined to be in the best interest of the Government. 
(38 U.S.C. 8153)
    (b) Price or cost to the Government must be evaluated in every 
source selection. Past performance shall be evaluated in source 
selections for negotiated competitive acquisitions exceeding the SAT 
unless the contracting officer documents that past performance is not 
an appropriate evaluation factor for the acquisition. (38 U.S.C. 8153)
    (c) The quality of the product or service may be addressed in 
source selection through consideration of information such as past 
compliance with solicitation requirements, technical excellence, 
management capability, personnel qualifications, and prior experience. 
The information required from quoters, bidders, or offerors shall be 
included in notices or solicitations, as appropriate. (38 U.S.C. 8153)
    (d) The relative importance of any evaluation information included 
in a solicitation must be set forth therein. (38 U.S.C. 8153)


873.113  Exchanges with offerors.

    (a) Without regard to FAR 15.201 or 15.306, negotiated acquisitions 
generally involve exchanges between the Government and competing 
offerors. Open exchanges support the goal of efficiency in Government 
by providing the Government with relevant information (in addition to 
that submitted in the offeror's initial proposal) needed to understand 
and evaluate the offeror's proposal. The nature and extent of exchanges 
between the Government and offerors is a matter of contracting officer 
judgment. Clarifications, communications, and discussions, as provided 
for in the FAR, are concepts not applicable to acquisitions under this 
part 873. (38 U.S.C. 8153)
    (b) Exchanges with potential offerors may take place throughout the 
source selection process. Exchanges may start in the planning stages 
and continue through contract award. Exchanges should occur most often 
with offerors determined to be in the best value pool (see 873.114). 
The purpose of exchanges is to ensure there is mutual understanding 
between the Government and the offerors on all aspects of the 
acquisition, including offerors' submittals/proposals. Information 
disclosed as a result of oral or written exchanges with an offeror may 
be considered in the evaluation of an offeror's proposal. (38 U.S.C. 
8153)

[[Page 2424]]

    (c) Exchanges may be conducted, in part, to obtain information that 
explains or resolves ambiguities or other concerns (e.g., perceived 
errors, perceived omissions, or perceived deficiencies) in an offeror's 
proposal. (38 U.S.C. 8153)
    (d) Exchanges shall only be initiated if authorized by the 
contracting officer and need not be conducted with all offerors. (38 
U.S.C. 8153)
    (e) Except for acquisitions based on alternative negotiation 
techniques contained in 873.111(e)(1), the contracting officer and 
other Government personnel involved in the acquisition shall not 
disclose information regarding one offeror's proposal to other offerors 
without consent of the offeror in accordance with FAR Parts 3 and 24. 
(38 U.S.C. 8153)
    (f) Award may be made on initial proposals without exchanges if the 
solicitation states that the Government intends to evaluate proposals 
and make award without exchanges, unless the contracting officer 
determines that exchanges are considered necessary. (38 U.S.C. 8153)


873.114  Best value pool.

    (a) Without regard to FAR 15.306(c), the contracting officer may 
determine the most highly rated proposals having the greatest 
likelihood of award based on the information or factors and subfactors 
in the solicitation. These vendors constitute the best value pool. This 
determination is within the sole discretion of the contracting officer. 
Competitive range determinations, as provided for in the FAR, are not 
applicable to acquisitions under this part 873. (38 U.S.C. 8153)
    (b) In planning an acquisition, the contracting officer may 
determine that the number of proposals that would otherwise be included 
in the best value pool is expected to exceed the number at which an 
efficient, timely, and economical competition can be conducted. In 
reaching such a conclusion, the contracting officer may consider such 
factors as the results of market research, historical data from 
previous acquisitions for similar services, and the resources available 
to conduct the source selection. Provided the solicitation notifies 
offerors that the best value pool can be limited for purposes of making 
an efficient, timely, and economical award, the contracting officer may 
limit the number of proposals in the best value pool to the greatest 
number that will permit an efficient competition among the proposals 
offering the greatest likelihood of award. The contracting officer may 
indicate in the solicitation the estimate of the greatest number of 
proposals that will be included in the best value pool. The contracting 
officer may limit the best value pool to a single offeror. (38 U.S.C. 
8153)
    (c) If the contracting officer determines that an offeror's 
proposal is no longer in the best value pool, the proposal shall no 
longer be considered for award. Written notice of this decision must be 
provided to unsuccessful offerors at the earliest practicable time. (38 
U.S.C. 8153)


873.115  Proposal revisions.

    (a) Without regard to FAR 15.307, the contracting officer may 
request proposal revisions as often as needed during the proposal 
evaluation process at any time prior to award from vendors remaining in 
the best value pool. Proposal revisions shall be submitted in writing. 
The contracting officer may establish a common cutoff date for receipt 
of proposal revisions. Contracting officers may request best and final 
offers. In any case, contracting officers and acquisition team members 
must safeguard proposals, and revisions thereto, to avoid unfair 
dissemination of an offeror's proposal. (38 U.S.C. 8153)
    (b) If an offeror initially included in the best value pool is no 
longer considered to be among those most likely to receive award after 
submission of proposal revisions and subsequent evaluation thereof, the 
offeror may be eliminated from the best value pool without being 
afforded an opportunity to submit further proposal revisions. (38 
U.S.C. 8153)
    (c) Requesting and/or receiving proposal revisions do not 
necessarily conclude exchanges. However, requests for proposal 
revisions should advise offerors that the Government may make award 
without obtaining further revisions. (38 U.S.C. 8153)


873.116  Source selection decision.

    (a) An integrated comparative assessment of proposals should be 
performed before source selection is made. The contracting officer 
shall independently determine which proposal(s) represents the best 
value, consistent with the evaluation information or factors and 
subfactors in the solicitation, and that the prices are fair and 
reasonable. The contracting officer may determine that all proposals 
should be rejected if it is in the best interest of the Government. (38 
U.S.C. 8153)
    (b) The source selection team, or advisory boards or panels, may 
conduct comparative analysis(es) of proposals and make award 
recommendations, if the contracting officer requests such assistance. 
(38 U.S.C. 8153)
    (c) The source selection decision must be documented in accordance 
with FAR 15.308.


873.117  Award to successful offeror.

    (a) The contracting officer shall award a contract to the 
successful offeror by furnishing the contract or other notice of the 
award to that offeror. (38 U.S.C. 8153)
    (b) If a request for proposal (RFP) process was used for the 
solicitation and if award is to be made without exchanges, the 
contracting officer may award a contract without obtaining the 
offeror's signature a second time. The offeror's signature on the offer 
constitutes the offeror's agreement to be bound by the offer. If a 
request for quotation (RFQ) process was used for the solicitation, and 
if the contracting officer determines there is a need to establish a 
binding contract prior to commencement of work, the contracting officer 
should obtain the offeror's acceptance signature on the contract to 
ensure formation of a binding contract. (38 U.S.C. 8153)
    (c) If the award document includes information that is different 
than the latest signed offer, both the offeror and the contracting 
officer must sign the contract award. (38 U.S.C. 8153)
    (d) When an award is made to an offeror for less than all of the 
items that may be awarded and additional items are being withheld for 
subsequent award, each notice shall state that the Government may make 
subsequent awards on those additional items within the offer acceptance 
period. (38 U.S.C. 8153)


873.118  Debriefings.

    Offerors excluded from a request for proposals (RFP) may submit a 
written request for a debriefing to the contracting officer. Without 
regard to FAR 15.505, preaward debriefings may be conducted by the 
contracting officer when determined to be in the best interest of the 
Government. Post-award debriefings shall be conducted in accordance 
with FAR 15.506. (38 U.S.C. 8153)

[FR Doc. 06-215 Filed 1-12-06; 8:45 am]
BILLING CODE 8320-01-P