[Federal Register Volume 64, Number 5 (Friday, January 8, 1999)]
[Proposed Rules]
[Pages 1344-1390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7]
[[Page 1343]]
_______________________________________________________________________
Part IV
Department of Health and Human Services
_______________________________________________________________________
Office of the Secretary
_______________________________________________________________________
48 CFR Chapter 3
Acquisition Regulation; Proposed Rule
Federal Register / Vol. 64, No. 5 / Friday, January 8, 1999 /
Proposed Rules
[[Page 1344]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
48 CFR Chapter 3
Acquisition Regulation
AGENCY: Department of Health and Human Services (HHS).
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Health and Human Services is republishing
its acquisition regulation (HHSAR), Title 48 Code of Federal
Regulations, Chapter 3, to streamline and simplify it in accordance
with the tenets of the National Performance Review. In doing so, the
Department believes it has eliminated some procedural guidance which is
too encumbering for a simplified system while attempting to empower the
appropriate levels of management and contracting personnel with the
authorities required for them to successfully accomplish their mission
with the least amount of resistance and oversight.
DATES: Comments must be received by March 9, 1999.
ADDRESSES: Comments should be sent to Mr. E. S. Lanham, Office of
Acquisition Management, 200 Independence Avenue, Southwest--Room 517 D,
Washington, D.C. 20201.
FOR FURTHER INFORMATION CONTACT: E. S. Lanham, Office of Acquisition
Management, telephone (202) 690-7590.
SUPPLEMENTARY INFORMATION: The Department emphasizes that it is not
making significant amendments to the existing HHSAR. The amendments
being made to the HHSAR concern internal procedural matters which are
administrative in nature, and will not have a major effect on the
general public, or to contractors or offerors of the Department. The
majority of the amendments eliminate procedural guidance no longer
deemed necessary, or change contracting review and approval authorities
to situate them at levels more appropriate to simplification,
streamlining, and empowerment. The Department has also updated HHSAR to
bring it in line with the latest amendments made to the Federal
Acquisition Regulation (FAR).
The Department of Health and Human Services certifies this document
will not have a significant economic effect on a substantial number of
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.); therefore, no regulatory flexibility statement has been
prepared. Since this rule conveys existing acquisition policies or
procedures and does not promulgate any new policies or procedures which
would impact the public, it has been determined that this rule will not
have a significant economic effect on a substantial number of small
entities, and, thus, a regulatory flexibility analysis was not
performed.
Furthermore, this document does not contain new information
collection requirements needing approval by the Office of Management
and Budget under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et
seq.). Existing approvals cited in 48 CFR section 301.106 remain in
effect. The provisions of this regulation are issued under 5 U.S.C.
301; 40 U.S.C. 486 (c).
List of Subjects in 48 CFR Chapter 3
Government procurement.
Under the authority of 5 U.S.C. 301; 40 U.S.C. 486(c), the
Department of Health and Human Services revises 48 CFR Chapter 3 as set
forth below.
Dated: November 24, 1998.
John J. Callahan,
Assistant Secretary for Management and Budget.
CHAPTER 3--HEALTH AND HUMAN SERVICES
Table of Contents
Subchapter A--General
Part
301--HHS Acquisition Regulation System
302--Definitions of Words and Terms
303--Improper Business Practices and Personal Conflicts of Interest
304--Administrative Matters
Subchapter B--Competition and Acquisition Planning
305--Publicizing Contract Actions
306--Competition Requirements
307--Acquisition Planning
309--Contractor Qualifications
Subchapter C--Contracting Methods and Contract Types
313--Simplified Acquisition Procedures
314--Sealed Bidding
315--Contracting by Negotiation
316--Types of Contracts
317--Special Contracting Methods
Subchapter D--Socioeconomic Programs
319--Small Business Programs
323--Environment, Conservation, Occupational Safety, and Drug-Free
Workplace
324--Protection of Privacy and Freedom of Information
325--Foreign Acquisition
Subchapter E--General Contracting Requirements
328--Bonds and Insurance
330--Cost Accounting Standards Administration
332--Contract Financing
333--Protests, Disputes, and Appeals
Subchapter F--Special Categories of Contracting
334--Major System Acquisition
335--Research and Development Contracting
Subchapter G--Contract Management
342--Contract Administration
Subchapter H--Clauses and Forms
352--Solicitation Provisions and Contract Clauses
353--Forms
Subchapter T--HHS Supplementations
370--Special Programs Affecting Acquisition
SUBCHAPTER A--GENERAL
PART 301--HHS ACQUISITION REGULATION SYSTEM
Subpart 301.1--Purpose, Authority, Issuance
Sec.
301.101 Purpose.
301.103 Authority.
301.106 OMB approval under the Paperwork Reduction Act.
Subpart 301.2--Administration
301.270 Executive Committee for Acquisition.
Subpart 301.4--Deviations from the FAR
301.403 Individual deviations.
301.404 Class deviations.
301.470 Procedure.
Subpart 301.6--Career Development, Contracting Authority, and
Responsibilities
301.602 Contracting officers.
301.602-3 Ratification of unauthorized commitments.
301.603 Selection, appointment, and termination of appointment.
301.603-1 General.
301.603-2 Selection.
301.603-3 Appointment.
301.603-4 Termination.
301.603-70 Delegation of contracting officer responsibilities.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 301.1--Purpose, Authority, Issuance
301.101 Purpose.
(a) The Department of Health and Human Services Acquisition
Regulation (HHSAR) is issued to establish uniform acquisition policies
and procedures for the Department of Health and Human Services (HHS)
which conform to the Federal Acquisition Regulation (FAR) System.
(b) The HHSAR implements and supplements the FAR. (Implementing
material expands upon or indicates the manner of compliance with
related FAR material. Supplementing material is new material which has
no counterpart in the FAR.)
[[Page 1345]]
(c) The HHSAR contains all formal departmental policies and
procedures that govern the acquisition process or otherwise control
contracting relationships between the Department's contracting offices
and contractors.
301.103 Authority.
(b) The HHSAR is prescribed by the Assistant Secretary for
Management and Budget under the authority of 5 U.S.C. 301 and Section
205 (c) of the Federal Property and Administrative Services Act of
1949, as amended (40 U.S.C. 486(c)), as delegated by the Secretary.
(c) The HHSAR is issued in the Code of Federal Regulations (CFR) as
Chapter 3 of Title 48, Department of Health and Human Services
Acquisition Regulation. It may be referenced as ``48 CFR Chapter 3.''
301.106 OMB approval under the Paperwork Reduction Act.
The following OMB control numbers apply to the information
collection and record keeping requirements contained in this
regulation:
------------------------------------------------------------------------
OMB control
HHSAR segment No.
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315.4...................................................... 0990-0139
324.70..................................................... 0990-0136
342.7101................................................... 0990-0131
352.224-70................................................. 0990-0136
352.233-70................................................. 0990-0133
352.270-1.................................................. 0990-0129
352.270-2.................................................. 0990-0129
352.270-3.................................................. 0990-0129
352.270-5.................................................. 0990-0130
370.1...................................................... 0990-0129
370.2...................................................... 0990-0129
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The OMB control number ``OMB No. 0990-0115'' is to be included in
the upper right corner of the first page of all solicitations, purchase
orders, and contracts issued by departmental contracting activities.
The number represents approval of the HHS acquisition process and
covers record keeping and reporting requirements which are unique to
individual acquisitions (e.g., requirements contained in
specifications, statements of work, etc.).
Subpart 301.2--Administration
301.270 Executive Committee for Acquisition.
(a) The Deputy Assistant Secretary for Grants and Acquisition
Management has established the Executive Committee for Acquisition
(ECA) to assist and facilitate the planning and development of
departmental acquisition policies and procedures and to assist in
responding to other agencies and organizations concerning policies and
procedures impacting the Federal acquisition process.
(b) The ECA consists of members and alternates from the Office of
Acquisition Management, Administration for Children and Families,
Health Care Financing Administration, Program Support Center, Centers
for Disease Control and Prevention, Food and Drug Administration,
Health Resources and Services Administration, Indian Health Service,
National Institutes of Health, and Substance Abuse and Mental Health
Services Administration. The ECA is chaired by the Director, Office of
Acquisition Management. All meetings will be held at the call of the
Chairman, and all activities will be carried out under to direction of
the Chairman.
(c) The ECA, to facilitate the planning, development, and
coordination of governmentwide and departmentwide acquisition policies
and procedures, is to:
(1) Advise and assist the Chairman concerning major acquisition
policy matters;
(2) Review and appraise, at appropriate intervals, the overall
effectiveness of existing policies and procedures; and
(3) Review and appraise the impact of new major acquisition
policies, procedures, regulations, and development on current
acquisition policies and procedures.
(d) The Chairman will periodically issue a list of current members
and alternates specifying the name, title, organization, address, and
telephone number of each. The member organizations are responsible for
apprising the Chairman whenever a new member or alternate is to be
appointed to the ECA.
Subpart 301.4--Deviations from the FAR
301.403 Individual deviations.
Requests for individual deviations to either the FAR or HHSAR shall
be prepared in accordance with 301.470 and forwarded through
administrative channels to the Director, Office of Acquisition
Management for review and approval.
301.404 Class deviations.
Requests for class deviations to either the FAR or HHSAR shall be
prepared in accordance with 301.470 and forwarded through
administrative channels to the Deputy Assistant Secretary for Grants
and Acquisition Management for review and approval.
301.470 Procedure.
(a) When a contracting office determines that a deviation is
needed, it shall prepare a deviation request in memorandum form and
forward it through administrative channels to the official designated
in 301.403 or 301.404. In an exigency situation, the contracting office
may request a deviation verbally, through normal acquisition channels,
but is required to confirm the request in writing as soon as possible.
(b) A deviation request shall clearly and precisely set forth the:
(1) Nature of the needed deviation;
(2) Identification of the FAR or HHSAR citation from which the
deviation is needed;
(3) Circumstances under which the deviation would be used;
(4) Intended effect of the deviation;
(5) Time-frame; and
(6) Reasons which will contribute to complete understanding and
support of the requested deviation. A copy of pertinent background
papers such as a form or contractor's request should accompany the
deviation request.
Subpart 301.6--Career Development, Contracting Authority, and
Responsibilities
301.602 Contracting officers.
301.602-3 Ratification of unauthorized commitments.
(b) Policy. (1) The Government is not bound by agreements or
contractual commitments made to prospective contractors by persons to
whom contracting authority has not been delegated. However, execution
of otherwise proper contracts made by individuals without contracting
authority, or by contracting officers in excess of the limits of their
delegated authority, may be later ratified. The ratification must be in
the form of a written document clearly stating that ratification of a
previously unauthorized act is intended and must be signed by the head
of the contracting activity (HCA).
(2) The HCA is the official authorized to ratify an unauthorized
commitment (but see (b)(3) of this section).
(3) Ratification authority for actions up to $25,000 may be
redelegated by the HCA to the chief of the contracting office (CCO). No
other redelegations are authorized.
(c) Limitations. (5) The concurrence of legal counsel concerning
the payment issue is optional.
(e) Procedures. (1) The individual who made the unauthorized
contractual commitment shall furnish the reviewing contracting officer
all records and documents concerning the commitment and a complete
written statement of facts, including, but not limited to: a
[[Page 1346]]
statement as to why the contracting office was not used, a statement as
to why the proposed contractor was selected, a list of other sources
considered, a description of work to be performed or products to be
furnished, the estimated or agreed contract price, a citation of the
appropriation available, and a statement whether the contractor has
commenced performance.
(2) The contracting officer will review the submitted material, and
prepare the ratification document if he/she determines that the
commitment may be ratifiable. The contracting officer shall forward the
ratification document and the submitted material to the HCA or CCO with
any comments or information which should be considered in evaluation of
the request for ratification. If legal review is desirable, the HCA or
CCO will coordinate the request for ratification with the Office of
General Counsel, Business and Administrative Law Division.
(3) If ratification is authorized by the HCA or CCO, the file will
be returned, along with the ratification document, to the contracting
officer for issuance of a purchase order or contract, as appropriate.
301.603 Selection, appointment, and termination of appointment.
301.603-1 General.
(a) The appointment and termination of appointment of contracting
officers shall be made by the head of the contracting activity (HCA).
This authority is not delegable.
(b) The contracting officer appointment document for personnel in
the GS-1101, 1102, and 1105 series, as well as personnel in any other
series who will obligate the Government to the expenditure of funds in
excess of the micro-purchase threshold, shall be the Standard Form
(SF)--1402, Certificate of Appointment. The HCA may determine an
alternative appointment document for appointments below that threshold.
Changes to appointments shall be made by issuing a new appointment
document. Each appointment document shall be prepared and maintained in
accordance with FAR 1.603-1 and shall state the limits of the
individual's authority.
(c) An individual must be certified under the HHS Acquisition
Certification Program as a prerequisite to being appointed as a
contracting officer with authority to obligate funds in excess of the
micro-purchase threshold (see 301.603-3(a)). The HCA will determine and
require appropriate training for individuals appointed as contracting
officers at lower dollar levels. An individual shall be appointed as a
contracting officer only in instances where a valid organizational need
can be demonstrated. Factors to be considered in assessing the need for
an appointment of a contracting officer include volume of actions,
complexity of work, and structure of the organization.
301.603-2 Selection.
Nominations for appointment of contracting officers shall be
submitted to the HCA through appropriate organizational channels for
review. The nomination package, which is usually initiated by the
prospective contracting officer's immediate supervisor, shall normally
include the nominee's current personal qualifications statement or job
history, including the information required by FAR 1.603-2, a copy of
his/her most recent performance appraisal, and a copy of the
certificate issued under the HHS Acquisition Certification Program
indicating the nominee's current certification level, if applicable.
The HCA will determine the documentation required, consistent with FAR
1.603-2, when the resulting appointment and authority will not exceed
the micro-purchase threshold.
301.603-3 Appointment.
(a) Contracting officer appointments shall be made at levels
commensurate with nominees' certification levels as follows:
(1) Level I--Purchasing Agent--Required for all personnel in the
GS-1102 and 1105 series having signature authority for simplified
acquisitions, including orders from GSA sources over the micro-purchase
threshold.
(2) Level II--Acquisition Official--Required for all personnel in
the GS-1102 series. Sufficient for delegation of contracting officer
authority up to $500,000.
(3) Level III--Senior Acquisition Official--Required for all
personnel in the GS-1102 series for delegation of contracting officer
authority above $500,000.
(4) Level IV--Acquisition Manager--Required for delegation of
preaward review and approval authority as specified in Subpart 304.71.
(b) If it is essential to appoint an individual who does not fully
meet the certification requirements of this section for the contracting
officer authority sought, an interim appointment may be granted by the
HCA. Interim appointments may not exceed one (1) year in total, and
shall not be granted unless the individual can meet the certification
requirements within one year from the date of appointment. If the
certification requirements are not met by that date, the appointment
will automatically terminate and cannot be renewed.
301.603-4 Termination.
Termination of contracting officer appointments shall be
accomplished in accordance with FAR 1.603-4.
301.603-70 Delegation of contracting officer responsibilities.
(a) Contracting officer responsibilities which do not involve the
obligation (or deobligation) of funds or result in establishing or
modifying contractual provisions may be delegated by the contracting
officer by means of a written memorandum which clearly delineates the
delegation and its limits.
(b) Contracting officers may designate individuals as ordering
officials to make purchases or place orders under blanket purchase
agreements, indefinite delivery contracts, or other pre-established
mechanisms. Ordering officials, including those under NIH's DELPRO, are
not contracting officers.
(c) Project officers are required to complete the training
specified in 307.170, while ordering officials and others should
receive sufficient instruction from the contracting officer to ensure
the appropriate exercise of the responsibilities and knowledge of their
limitations.
PART 302--DEFINITIONS OF WORDS AND TERMS
Subpart 302.1--Definitions
Sec.
302.101 Definitions.
Subpart 302.2--Definitions Clause
302.201 Contract clause.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 302.1--Definitions
302.101 Definitions.
Chief of the contracting office (CCO) is a mid-level management
official in charge of a contracting office who controls and oversees
the daily contracting operation of an Operating Division (OPDIV) or
major component of an OPDIV. The CCO is subordinate to the head of the
contracting activity, and is located at a management level above other
contracting personnel, usually as a branch chief or division director.
Head of the agency or agency head, unless otherwise specified,
means the head of the Operating Division (OPDIV) for ACF, HCFA, PSC,
CDCP, FDA, HRSA, IHS, NIH, and SAMHSA, or the Assistant Secretary for
Management and Budget (ASMB) for the Office of the Secretary (OS).
[[Page 1347]]
Head of the contracting activity (HCA) is defined in terms of
certain organizational positions within the Office of Grants and
Acquisition Management (OGAM), Administration for Children and Families
(ACF), Health Care Financing Administration (HCFA), Program Support
Center (PSC), Centers for Disease Control and Prevention (CDCP), Food
and Drug Administration (FDA), Health Resources and Services
Administration (HRSA), Indian Health Service (IHS), National Institutes
of Health (NIH), and Substance Abuse and Metal Health Services
Administration (SAMHSA), as follows:
OGAM-OS--Director, Office of Acquisition Management
ACF--Director, Division of Acquisition Management
HCFA--Director, Office of Acquisition and Grants
PSC--Director, Division of Acquisition Management
CDCP--Director, Procurement and Grants Office
FDA--Director, Office of Facilities, Acquisition, and Central Services
HRSA--Director, Division of Grants and Procurement Management
IHS--Director, Division of Contracts and Grants Policy
NIH--Director, Office of Contracts and Grants Management
SAMHSA--Director, Division of Contracts Management
In addition, the Deputy Assistant Secretary for Grants and
Acquisition Management (DASGAM) is designated as an HCA. Each HCA is
responsible for conducting an effective and efficient acquisition
program. Adequate controls shall be established to assure compliance
with applicable laws, regulations, procedures, and the dictates of good
management practices. Periodic reviews shall be conducted and evaluated
by qualified personnel, preferably assigned to positions other than in
the contracting office being reviewed, to determine the extent of
adherence to prescribed policies and regulations, and to detect a need
for guidance and/or training. The HCA shall be certified, or be
certifiable, at Level IV of the HHS Acquisition Certification Program.
Individuals appointed as HCA's who do not meet the Level IV
requirements shall have one year from the date of appointment to obtain
Level IV certification. The heads of contracting activities may
redelegate their HCA authorities to the extent that redelegation is not
prohibited by the terms of their respective delegations of authority,
by law, by the Federal Acquisition Regulation, by the HHS Acquisition
Regulation, or by other regulations. However, HCA and other contracting
approvals and authorities shall not be redelegated below the levels
specified in the HHS Acquisition Regulation or, in the absence of
coverage in the HHS Acquisition Regulation, the Federal Acquisition
Regulation. To ensure proper control of redelegated acquisition
authorities, HCA's shall maintain a file containing successive
delegations of HCA authority through and including the contracting
officer level. Personnel delegated responsibility for acquisition
functions must possess a level of experience, training, and ability
commensurate with the complexity and magnitude of the acquisition
actions involved.
Subpart 302.2--Definitions Clause
302.201 Contract clause.
The FAR clause, Definitions, at 52.202-1 shall be used as
prescribed in FAR 2.201, except as follows:
(a) Paragraph (a) at 352.202-1 shall be used in place of paragraph
(a) of the FAR clause.
(b) Paragraph (h), or its alternate, at 352.202-1 shall be added to
the end of the FAR clause. Use paragraph (h) when a fixed-priced
contract is anticipated; use the alternate to paragraph (h) when a
cost-reimbursement contract is anticipated.
PART 303--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
Subpart 303.1--Safeguards
Sec.
303.101 Standards of conduct.
303.101-3 Agency regulations.
Subpart 303.2--Contract Gratuities to Government Personnel
303.203 Reporting suspected violations of the Gratuities clause.
Subpart 303.3--Reports of Suspected Antitrust Violations
303.303 Reporting suspected antitrust violations.
Subpart 303.4--Contingent Fees
303.405 Misrepresentations or violations of the Covenant Against
Contingent Fees.
Subpart 303.6--Contracts With Government Employees or Organizations
Owned or Controlled by Them
303.602 Exceptions.
Subpart 303.7--Voiding and Rescinding Contracts
303.704 Policy.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 303.1--Safeguards
301.101 Standards of conduct.
303.101-3 Agency regulations.
The Department of Health and Human Services' Standards of Conduct
are prescribed in Part 73 of Title 45.
Subpart 303.2--Contractor Gratuities to Government Personnel
303.203 Reporting suspected violations of the Gratuities clause.
Departmental personnel shall report suspected violations of the
Gratuities clause in accordance with Subpart M, Reporting Violations,
of 45 CFR Part 73. Refer to Subpart B, Gifts from Outside Sources, (5
CFR 2635.201) for an explanation regarding what is prohibited and what
is permitted.
Subpart 303.3--Reports of Suspected Antitrust Violations
303.303 Reporting suspected antitrust violations.
A copy of each report of suspected antitrust violations submitted
to the Attorney General by the HCA shall also be submitted to the
Director, Office of Acquisition Management.
Subpart 303.4--Contingent Fees
303.405 Misrepresentations or violations of the Covenant Against
Contingent Fees.
(c) Reports shall be made promptly to the contracting officer.
(d)(4) Suspected fraudulent or criminal matters to be reported to
the Department of Justice shall be prepared in letter format and
forwarded through acquisition channels to the head of the contracting
activity for signature. The letter must contain all pertinent facts and
background information considered by the contracting officer and chief
of the contracting office that led to the decision that fraudulent or
criminal matters may be present. A copy of the signed letter shall be
sent to the Director, Office of Acquisition Management.
Subpart 303.6--Contracts With Government Employees or Organizations
Owned or Controlled by Them
303.602 Exceptions.
Approval of an exception to the policy stated in FAR 3.601 shall be
made by the HCA (not delegable).
Subpart 303.7--Voiding and Rescinding Contracts
303.704 Policy.
For purposes of implementing FAR Subpart 3.7, the authorities
granted to
[[Page 1348]]
the ``agency head or designee'' shall be exercised by the HCA (not
delegable).
PART 304--ADMINISTRATIVE MATTERS
Subpart 304.6--Contract Reporting
Sec.
304.602 Federal Procurement Data System.
Subpart 304.8--Government Contract Files
304.804-70 Contract closeout audits.
Subpart 304.70--Acquisition Instrument Identification Numbering System
304.7000 Scope of subpart.
304.7001 Numbering acquisitions.
Subpart 304.71--Review and Approval of Proposed Contract Awards
304.7100 Policy.
304.7101 Procedures.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 304.6--Contracting Reporting
304.602 Federal Procurement Data System (FPDS).
The Departmental Contracts Information System (DCIS) represents the
Department's implementation of the FPDS. All departmental contracting
activities are required to participate in the DCIS and follow the
procedures stated in the Enhanced Departmental Contracts Information
System Manual and amendments to it. The HCA (not delegable) shall
ensure that all required contract information is collected, submitted,
and received into the DCIS on or before the 15th of each month for all
appropriate contract and contract modifications award of the prior
month.
Subpart 304.8--Government Contract Files
304.804-70 Contract closeout audits.
(a) Contracting officers shall rely, to the maximum extent
possible, on non-Federal single audits to close physically completed
cost-reimbursement contracts with colleges and universities, hospitals,
non-profit firms, and State and local governments. In addition, where
appropriate, a sample of these contractors may be selected for audit,
in accordance with the decision-making process set forth in the
following paragraph (b).
(b) Contracting officers shall request contract closeout audits on
physically completed, cost-reimbursement, for-profit contracts as
follows:
(1) Decisions on: the need for and allocation of contract audit
resources and services; the selection of contracts or contractors to be
audited; the identification of the audit agency to perform the audit;
and the type or scope of closeout audit to be conducted, shall be made
by the Office of Inspector General (OIG) and Office of Grants and
Acquisition Management, in consultation with the Department's Contract
Audit Users Work Group. These decisions shall be based upon the needs
of the customer, risk analysis, return on investment, and the
availability of audit resources. When an audit is warranted prior to
closing a contract, the contracting officer shall submit the audit
request to the OIG's Office of Audit via the appropriate OPDIV
representative on the Contract Audit Users Work Group.
(2) Except where a contracting officer suspects misrepresentation
or fraud, contract closeout field audits shall not be requested if the
cost of performance is likely to exceed the potential cost recovery.
Contracts that are not selected for a field audit may be closed on the
basis of a desk review, subject to any later on-site audit findings.
The release executed by the contractor shall contain the following
statement:
The Contractor agrees, pursuant to the clause in this contract
entitled ``Allowable Cost'' or ``Allowable Cost and Fixed Fee'' (as
appropriate), that the amount of any sustained audit exceptions
resulting from any audit made after final payment shall be refunded
to the Government.''
Subpart 304.70--Acquisition Instrument Identification Numbering
System
304.7000 Scope of subpart.
This subpart prescribes policy and procedures for assigning
identifying numbers to contracts and related instruments, including
solicitation documents, purchase orders, and delivery orders. The HCA
(not delegable) is responsible for establishing the numbering system
within the OPDIV.
304.7001 Numbering acquisitions.
(a) Acquisitions which require numbering. The following
acquisitions shall be numbered in accordance with the system prescribed
in paragraph (b) of this section:
(1) Contracts, including letter contracts and task orders under
basis ordering agreements, which involve the payment of $2,500 or more
for the acquisition of personal property or nonpersonal services. (The
number assigned to a letter contract shall be assigned to the
superseding definitized contract).
(2) Contracts which involve the payment of $2,000 or more for
construction (including renovation or alteration).
(3) Contracts which involve more than one payment regardless of
amount.
(4) Requests for proposals and invitations for bids.
(5) Purchase and delivery orders.
(6) Requests for quotations.
(7) Basic ordering agreements.
(b) Numbering system for contracts. All contracts which require
numbering shall be assigned a number consisting of the following:
(1) The three digit identification code assigned to the contracting
office by the Office of Financial Operations, Program Support Center.
(2) A two digit fiscal year designation; and
(3) A four digit serial number. For example, the initial contract
executed by the Office of Acquisition Management, OS, for fiscal year
1996 would be numbered 100-96-0001. While it is required that a
different series of four digit serial numbers be used for each fiscal
year, serial numbers assigned need not be sequential.
(c) Numbering system for other acquisitions. The HCA is responsible
for developing a numbering system for the acquisitions other than
contracts listed in HHSAR 304.7001 (a)(4) through (a)(7), and any other
types of acquisitions that may be used.
(d) Assignment of identification codes. Each contracting office of
the Department shall be assigned a three digit identification code by
the Office of Financial Operations. Requests for the assignment of
codes for newly established contracting offices shall be submitted by
the headquarters acquisition staff office of the contracting activity
to the Office of Financial Operations must be notified. A listing of
the contracting office identification codes currently in use is
contained in the Enhanced Departmental Contracts Information System
Manual.
Subpart 304.71--Review and Approval of Proposed Contract Awards
304.7100 Policy.
This subpart requires each HCA (not delegable) to establish review
and approval procedures for proposed contracts actions to ensure that:
(a) Contract awards are in conformance with law, established
policies and procedures, and sound business practices;
(b) Contractual documents properly reflect the mutual understanding
of the parties; and
(c) The contracting officer is informed of deficiencies and items
of questionable acceptability, and corrective action is taken.
304.7101 Procedures.
(a) All contractual documents, regardless of dollar value, are to
be
[[Page 1349]]
reviewed by the contracting officer prior to award.
(b) The HCA is responsible for establishing review and approval
procedures and designating acquisition officials to serve as reviewers.
Each HCA is responsible for determining the criterion (criteria) to be
used in determining which contracts are to be reviewed, and that a
sampling of proposed contracts not included in the ``to be reviewed''
group are reviewed and approved.
(c) Officials assigned responsibility for review and approval of
contract actions must possess qualifications in the field of
acquisition commensurate with the level of review performed, and, at a
minimum, possess those acquisition skills expected of a contracting
officer. However, if any official is to serve as the contracting
officer and sign the contractual document, the review and approval
function shall be performed by an appropriate official at least one
level above.
PART 305--PUBLICIZING CONTRACT ACTIONS
Subpart 305.2--Synopsis of Proposed Contract Actions
Sec.
305.202 Exceptions.
Subpart 305.3--Synopsis of Contract Awards
305.303 Announcement of contract awards.
Subpart 305.5--Paid Advertisements
305.502 Authority.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 305.2--Synopsis of Proposed Contract Actions
305.202 Exceptions.
(b) When a contracting office believes that it has a situation
where advance notice is not appropriate or reasonable, it shall prepare
a memorandum citing all pertinent facts and details and send it,
through normal acquisition channels, to the Deputy Assistant Secretary
for Grants and Acquisition Management (DASGAM) requesting relief from
synopsizing. The DASGAM shall review the request and decide whether an
exception to synopsizing is appropriate or reasonable. If it is, the
DASGAM shall take the necessary coordinating actions required by FAR
5.202(b). Whatever the decision is on the request, the DASGAM shall
promptly notify the contracting office when a determination has been
made.
Subpart 305.3--Synopses of Contract Awards
305.303 Announcement of contract awards.
(a) Public announcement. Any contract, contract modification, or
delivery order in the amount of $3 million or more shall be reported by
the contracting officer to the Office of the Deputy Assistant Secretary
for Legislation (Congressional Liaison), Room 406G, Hubert H. Humphrey
Building. Notification shall be accomplished by providing a copy of the
contract or award document face page to the referenced office prior to
the day of award, or in sufficient time to allow for an announcement to
be made by 5:00 p.m. Washington, DC time on the day of award.
Subpart 305.5--Paid Advertisements
305.502 Authority.
The contracting officer is authorized to publish advertisements,
notices, and contract proposals in newspapers and periodicals in
accordance with the requirements and conditions referenced in FAR
Subpart 5.5.
PART 306--COMPETITION REQUIREMENTS
Subpart 306.2--Full and Open Competition After Exclusion of Sources
Sec.
306.202 Establishing or maintaining alternative sources.
Subpart 306.3--Other Than Full and Open Competition
306.302 Circumstances permitting other than full and open
competition.
306.302-1 Only one responsible source and no other supplies or
services will satisfy agency requirements.
306.302-7 Public interest.
306.303 Justification.
306.303-1 Requirements
306.303-2 Content.
306.304 Approval of the justification.
Subpart 306.5--Competition Advocates
306.501 Requirement.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 306.2--Full and Open Competition After Exclusion of Sources
306.202 Establishing or maintaining alternative sources.
(a) The reference to the agency head in FAR 6.202(a) shall mean the
appropriate competition advocate cited in 306.501.
(b)(1) The required determination and findings (D&F) shall be
prepared by the contracting officer based on the data provided by
program personnel, and shall be signed by the appropriate competition
advocate. The D&F signatory is not delegable.
Subpart 306.3--Other Than Full and Open Competition
306.302 Circumstances permitting other than full and open competition.
306.302-1 Only one responsible source and no other supplies or
services will satisfy agency requirements.
(a)(2)(ii) Follow-on contracts for the continuation of major
research and development studies on long-term social and health
programs, major research studies, or clinical trials may be deemed to
be available only from the original source when it is likely that award
to any other source would result in unacceptable delays in fulfilling
the Department's or OPDIV's requirements.
(b) Application. (4) When the head of the program office has
determined that a specific item of technical equipment or parts must be
obtained to meet the activity's program responsibility to test and
evacuate certain kinds and types of products, and only one source is
available. (This criterion is limited to testing and evaluation
purposes only and may not be used for initial outfitting or repetitive
acquisitions. Project officers should support the use of this criterion
with citations from their agency's legislation and the technical
rationale for the item of equipment required.)
306.302-7 Public interest.
(a) Authority. (2) Agency head, in this instance, means the
Secretary.
(b) Limitations. An ``approval package'' must be prepared by the
contracting officer and staffed through departmental acquisition
channels to the Secretary. The package shall include a determination
and findings for the Secretary to sign that contains all pertinent
information to support justification for exercising the exemption to
competition, and a letter for the Secretary to sign notifying Congress
of the determination to award a contract under the authority of 41
U.S.C. 253(c)(7).
306.303 Justifications.
306.303-1 Requirements.
(b) Preliminary arrangements or agreements with the proposed
contractor shall have no effect on the rationale used to support an
acquisition for other than full and open competition.
(f) When a program office desires to obtain certain goods or
services by contract without full and open competition, it shall, at
the time of
[[Page 1350]]
forwarding the requisition or request for contract, furnish the
contracting office a justification explaining why full and open
competition is not feasible. All justifications shall be initially
reviewed by the contracting officer.
(1) Justifications in excess of the simplified acquisition
threshold shall be in the form of a separate, self-contained document,
prepared in accordance with FAR 6.303 and 306.303, and called a
``JOFOC'' (Justification for Other Than Full and Open Competition).
Justifications at or below the simplified acquisition threshold may be
in the form of a paragraph or paragraphs contained in the requisition
or request for contract.
(2) Justifications, whether over or under the simplified
acquisition threshold, shall fully describe what is to be acquired,
offer reasons which go beyond inconvenience, and explain why it is not
feasible to obtain competition. The justifications shall be supported
by verifiable facts rather than mere opinions. Documentation in the
justification should be sufficient to permit an individual with
technical competence in the area to follow the rationale.
306.303-2 Content.
(a)(1) The program office and name, address, and telephone number
of the project officer shall also be included.
(2) This item shall include project identification such as the
authorizing program legislation, to include citations or other internal
program identification data such as title, contract number, etc.
(3) The description may be in the form of a statement of work,
purchase description, or specification. A statement is to be included
to explain whether the acquisition is an entity in itself, whether it
is one in a series, or part of a related group of acquisitions.
(c) Each JOFOC shall conclude with at least signature lines for the
project officer, project officer's immediate supervisor, contracting
officer, and approving official.
306.304 Approval of the Justification.
(a)(2) The competition advocates are listed in 306.501. This
authority is not delegable.
(3) The competition advocate shall exercise this approval
authority, except where the individual designated as the competition
advocate does not meet the requirements of FAR 6.304(a)(3)(ii). This
authority is not delegable.
(4) The senior procurement executive of the Department is the
Assistant Secretary for Management and Budget.
(c) A class justification shall be processed the same as an
individual justification.
Subpart 306.5--Competition Advocates
306.501 Requirement.
The Department's competition advocate is the Deputy Assistant
Secretary for Grants and Acquisition Management. The competition
advocates for the Department's primary contracting officers are as
follows:
ACF--Director, Office of Management Services
HCFA--Associate Administrator for Operations and Resource Management
OS--Deputy Assistant Secretary for Grants and Acquisition Management
PSC--Director, Administrative Services Center
AHCPR--Executive Officer
CDCP--Director, Office of Program Support
FDA--Associate Commissioner for Management
HRSA--Associate Administrator for Operations and Management
IHS--Associate Director, Office of Administration and Management
NIH--(R&D)--Associate Director for Extramural Affairs (Other than
R&D)--Associate Director for Intramural Affairs
SAMHSA--Associate Administrator for Management
PART 307--ACQUISITION PLANNING
Subpart 307.1--Acquisition Plans
Sec.
307.104 General procedures.
307.105 Contents of written acquisition plans.
307.170 Program training requirements.
307.170-1 Policy exceptions.
307.170-2 Training course prerequisites.
Subpart 307.3--Contractor Versus Government Performance
307.302 General.
307.303 Determining availability of private commercial sources.
307.304 Procedures.
307.307 Appeals.
Subpart 307.70--Considerations in Selecting an Award Instrument
307.7000 Scope of subpart.
307.7001 Distinction between acquisition and assistance.
307.7002 Procedures.
Subpart 307.71--Requests for Contract
307.7100 Scope of subpart.
307.7101 General.
307.7102 Procedures.
307.7103 Responsibilities.
307.7104 Transmittal.
307.7105 Format and content.
307.7106 Statement of work.
307.7107 Review.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 307.1--Acquisition Planning
307.104 General procedures.
(c) If use of other than full and open competition is anticipated,
see 307.104(h).
(d) Each contracting activity shall prepare an Annual Acquisition
Plan (AAP). The AAP is a macro plan, containing a list of anticipated
contract actions over the simplified acquisition threshold and their
associated funding, as well as the aggregate planned dollars for
simplified acquisitions by quarter, developed for each fiscal year. The
AAP shall conform to reasonable budget expectations and shall be
reviewed at least quarterly and modified as appropriate. The chief of
the contracting office (CCO) shall obtain this information from the
program planning/budget office of the contracting activity and use the
AAP to provide necessary reports and monitor the workload of the
contracting office. For contract actions, the plan shall contain, at a
minimum:
(1) A brief description (descriptive title, perhaps one or two
sentences if necessary);
(2) Estimated award amount;
(3) Requested award date;
(4) Name and phone number of contact person (usually the project
officer);
(5) Other information required for OPDIV needs.
(e) Once the AAP is obtained, the contracting officer/contract
specialist shall initiate discussions with the assigned project officer
for each planned negotiated acquisition over $100,000 except for:
(1) Acquisitions made under interagency agreements, and
(2) Contract modifications which exercise options, make changes
authorized by the Changes clause, or add funds to an incrementally
funded contract. (The HCA may prescribe procedures for contract actions
not covered by this subpart.)
(f) The purpose of the discussions between the contracting and
project officers is to develop an individual acquisition planning
schedule and to address the things that will need to be covered in the
request for contract (RFC), including clearances, acquisition strategy,
sources, etc. The project officer must either have a statement of work
(SOW) ready at this time or must discuss in more detail the nature of
the services/supplies that will be required.
(g) Standard lead-times for processing various types of
acquisitions and deadlines for submission of acceptable RFCs (that is,
RFCs which include all
[[Page 1351]]
required elements such as clearances, funding documents, and an
acceptable SOW) for award in a given fiscal year shall be established
by the HCA or designee not lower that the CCO.
(h) The outcome of the discussions referenced in 307.104 (f)
between the project officer and the contracting officer/contracting
specialist will be an agreement concerning the dates of significant
transaction-specific acquisition milestones, including the date of
submission of the RFC to the contracting officer. This milestone
schedule document will be prepared with those dates and will be signed
by the project officer and the contracting officer. The milestones
cannot be revised except by mutual agreement of these same individuals.
If the planning schedule indicates the need to obtain approval of a
Justification for Other than Full and Open Competition, the CCO must
sign the milestone agreement. This document shall be retained in the
contract file. All other considerations that will affect the
acquisition (technical, business, management) shall be addressed in the
RFC (see 307.71).
(A) RFCs submitted after the established deadline in paragraph (g)
of this section or the agreed-upon milestone for RFC submission in
paragraph (h) of this section will be accepted for processing on a
case-by-case basis.
307.105 Contents of written acquisition plans.
The written acquisition plan required by FAR 7.105 is contained in
the request for contract, as specified in Subpart 307.71, and is the
final product of the planning process.
307.170 Program training requirements.
(a) All program personnel selected to serve as project officer for
an HHS contract shall have successfully completed either the
Department's appropriate ``Basic Project Officer'' course, or an
equivalent course (see paragraph (c) of this section).
(b) At least fifty percent of the HHS program personnel performing
the function of technical proposal evaluator on a technical evaluation
team or panel for any competitively solicited HHS contract shall have
successfully completed the appropriate ``Basic Project Officer''
course, or an equivalent course (see paragraph (c) of this section).
This requirement applies to the initial technical proposal evaluation
and any subsequent technical evaluations that may be required.
(c) Determination of course equivalency shall be made by the HCA
(not delegable) of the cognizant contracting activity. The contracting
officer is responsible for ensuring that the project officer and
technical proposal evaluators have successfully completed the required
training discussed in 307.170-2.
307.170-1 Policy exceptions.
In the event there is an urgent requirement for a specific
individual to serve as a project officer and that individual has not
successfully completed the prerequisite training course, the HCA (not
delegable) may waive the training requirement and authorize the
individual to perform the project duties, provided that:
(a) The individual first meets with the cognizant contracting
officer to review the ``DHHS Project Officers' Contracting Handbook,''
and to discuss the important aspects of the contracting--program office
relationship as appropriate to the circumstances; and
(b) The individual attends the next scheduled and appropriate
``Basic Project Officer'' course.
307.170-2 Training course prerequisites.
(a) Project officers. (1) Newly appointed project officers, and
project officers with less than three years experience and no previous
related training, are required to take the appropriate ``Basic Project
Officer'' course. (The grade level for project officers attending the
course should be GS-7 and above.) All project officers are encouraged
to take the appropriate ``Writing Statements of Work'' course.
(2) Project officers with more than three years experience, and
project officers with less than three years experience who have
successfully completed the appropriate basic course, are qualified (and
encouraged) to take the ``Advanced Project Officer'' course.
(3) Additional information on prerequisites for attendance of these
courses may be found in the ``DHHS Acquisition Training and
Certification Handbook.''
(b) Technical proposal evaluators. Technical proposal evaluators,
regardless of experience, are required to take the appropriate ``Basic
Project Officer'' course. Upon successful completion of the basic
course, it is recommended that they take the appropriate ``Advanced
Project Officer'' course.
Subpart 307.3--Contractor Versus Government Performance
307.302 General.
(a) GAM Chapter 18-10, Commercial-Industrial Activities of the
Department of Health and Human Services Providing Products or Services
for Government Use, assigns responsibilities for making method-of-
performance decisions (contract vs. in-house performance) to various
management levels within the Department depending on the dollar amount
of capital investment or annual operating costs. It also requires that
each operating division (OPDIV) and staff division (STAFFDIV) designate
a ``Commercial-Industrial Control Officer'' (CICO) to be responsible
for ensuring compliance with the requirements of the Chapter.
(d) Besides contracts with annual operating costs under $100,000,
contracts with annual operating costs under an authorized acquisition
set-aside for small business concerns and contracts made pursuant to
section 8(a) of the Small Business Act are exempted from the
requirements of FAR Subpart 7.3, GAM Chapter 18-10, and OMB Circular
No. A-76.
307.303 Determining availability of private commercial sources.
In accordance with the provisions of GAM Chapter 18-10, OPDIVs and
STAFFDIVs must prepare and maintain a complete inventory of all
individual commercial or industrial activities, including those
conducted under contracts in excess of $100,000 annually. They must
also conduct periodic reviews of each activity and contract in the
inventory to determine if the existing performance, in-house or by
contract, continues to be in accordance with the policy guidelines of
GAM Chapter 18-10.
307.304 Procedures.
Contracting officers shall ensure that no acquisition action
involving a commercial-industrial activity is initiated unless it is in
compliance with the requirements of GAM Chapter 18-10. The contracting
officer must check each request for contract expected to result in a
contract in excess of $100,000 to ensure that it contains a statement
as to whether the proposed contract is or is not subject to review
under GAM Chapter 18-10 requirements. If the contracting officer has
any questions regarding the determination of applicability or
nonapplicability, or if the required statement is missing, the program
office submitting the request for contract should be contacted and the
situation rectified. If the issue cannot be resolved with the program
office, the contracting office shall refer the matter to the CICO for a
final determination. The HCA is responsible for ensuring that
contracting activities are in full compliance with FAR Subpart 7.3.
[[Page 1352]]
307.307 Appeals.
The review and appeals procedure discussed in FAR 7.307 are
addressed in GAM Chapter 18-10.
Subpart 307.70--Considerations in Selecting an Award Instrument
307.7000 Scope of subpart.
This subpart provides guidance on the appropriate selection of
award instruments consistent with the Federal Grant and Cooperative
Agreement Act of 1977 (41 U.S.C. 501). This subpart explains the use of
the contract as the award instrument for acquisition relationships, and
the grant or cooperative agreement as the instrument for assistance
relationships. This subpart provides guidance for determining whether
to use the acquisition or assistance process to fulfill program needs.
Detailed guidance on assistance instruments may be found in Chapter 1-
02 of the Grants Administration Manual.
307.7001 Distinction between acquisition and assistance.
(a) The Federal Grant and Cooperative Agreement Act of 1977
requires the use of contracts to acquire property or services for the
direct benefit or use of the Government and grants or cooperative
agreements to transfer money, property, services, or anything of value
to recipients to accomplish a public purpose of support or stimulation
authorized by Federal statute.
(b) A contract is to be used as the legal instrument to reflect a
relationship between the Federal Government and a recipient whenever:
(1) The principal purpose of the instrument is the acquisition, by
purchase, lease, or barter, of property or services for the direct
benefit or use of the Federal Government; or
(2) The Department determines in a specific instance that the use
of a type of contract is appropriate. That is, it is determined in a
certain situation that specific needs can be satisfied best by using
the acquisition process. However, this authority does not permit
circumventing the criteria for use of acquisition or assistance
instruments. Use of this authority is restricted to extraordinary
circumstances and only with the prior approval of the Deputy Assistant
Secretary for Grants and Acquisition Management (DASGAM).
(c) A grant or cooperative agreement is to be used as the legal
instrument to reflect a relationship between the Federal Government and
a recipient whenever the principal purpose of the relationship is the
transfer of money, property, services, or anything of value to the
recipient to accomplish a public purpose of support or stimulation
authorized by Federal statute.
(1) A grant is the legal instrument to be used when no substantial
involvement is anticipated between the Department and the recipient
during performance of the contemplated activity.
(2) A cooperative agreement is the legal instrument to be used when
substantial involvement is anticipated between the Department and the
recipient during performance of the contemplated activity.
(d) As a general rule, contracts are to be used for the following
purposes:
(1) Evaluation (including research of an evaluative nature) of the
performance of Government programs or projects or grantee activity
initiated by the funding agency for its direct benefit or use.
(2) Technical assistance rendered to the Government, or on behalf
of the Government, to any third party, including those receiving grants
or cooperative agreements.
(3) Surveys, studies, and research which provide specific
information desired by the Government for its direct activities, or for
dissemination to the public.
(4) Consulting services or professional services of all kinds if
provided to the Government or, on behalf of the Government, to any
third party.
(5) Training projects where the Government selects the individuals
or specific groups whose members are to be trained or specifies the
content of the curriculum (not applicable to fellowship awards.)
(6) Planning for Government use.
(7) Production of publications or audiovisual materials required
primarily for the conduct of the direct operations of the Government.
(8) Design or development of items for Government use or pursuant
to agency definition or specifications.
(9) Conferences conducted on behalf of the Government.
(10) Generation of management information or other data for
Government use.
307.7002 Procedures.
(a) OPDIV program officials should use existing budget and program
planning procedures to propose new activities and major changes in
ongoing programs. It is the responsibility of these program officials
to meet with the HCA and the principal grants management official, or
their designees, to distinguish the relationships and determine whether
award is to be made through the acquisition process or assistance
process. This determination should be made prior to the time when the
annual acquisition plan is reviewed and approved so that the plan will
reflect all known proposed contract actions. The cognizant contracting
officer will confirm the appropriateness of the use of the contract
instrument when reviewing the request for contract.
(b) Shifts from one award instrument to another must be fully
documented in the appropriate files to show a fundamental change in
program purpose that unequivocally justifies the rationale for the
shift.
(c) OPDIVs must ensure that the choice of instrument is determined
in accordance with the Federal Grant and Cooperative Agreement Act of
1977 and applicable departmental policies. If, however, there are major
individual transactions or programs which contain elements of both
acquisition and assistance in such a way that they cannot be
characterized as having a principal purpose of one or the other,
guidance should be obtained from the DASGAM, through normal channels,
before proceeding with a determination.
(d) Any public notice, program announcement, solicitation, or
request for applications or proposals must indicate whether the
intended relationship will be one of acquisition or assistance and
specify the award instrument to be used.
Subpart 307.71--Requests for Contract
307.7100 Scope of subpart.
This subpart prescribes the format and contents of the request for
contract (RFC) and provides procedures for its preparation and
submission.
307.7101 General.
The program office's preparation of the RFC and submission to the
contracting office completes the presolicitation phase of the
acquisition planning process and commences the solicitation phase. The
RFC is the formal document which initiates the preparation of the
request for proposals (RFP) by the contracting office and sets the
acquisition process in motion. It is the result of the planning by the
project officer and contracting officer and contains much of the
pertinent information necessary for the development of a sound,
comprehensive RFP.
307.7102 Procedures.
The program office should submit the RFC to the contracting office
no later than the date agreed to by the contracting officer and the
project officer in the milestone schedule (see
[[Page 1353]]
307.104(h)), unless a revised due date has been established by mutual
agreement.
307.7103 Responsibilities.
(a) It is the responsibility of the project officer to prepare the
RFC so that it complies with the requirements of this subpart and any
OPDIV guidance issued in accordance with this subpart.
(b) Prior to the submission of the RFC to the contracting office,
the head of the program office sponsoring the project shall review the
RFC to ensure that all required information is provided in the
prescribed format, and a technical review of the statement of work has
been made. The level and extent of the technical review is to be
commensurate with the estimated cost, importance, and complexity of the
proposed acquisition, and must be thorough enough to ensure that vague
and ambiguous language is eliminated, the statement of work is
structured by phases or tasks, if appropriate, and methods are
available for assessing the contractor's technical, cost, and delivery
performance.
307.7104 Transmittal.
The RFC must be conveyed to the contracting office by use of a
covering memorandum or other form of transmittal. The transmittal
document must be signed by the head of the sponsoring program office
and include both a statement attesting to the conclusiveness of the
review described in 307.7103(b) and a list identifying all attachments
to the RFC.
307.7105 Format and content.
The Department does not prescribe a standard format for the RFC. A
format similar to what is in this section is recommended. However, any
document or group of documents will be acceptable as an RFC as long as
all of the required information (paragraph (a) of this section), and as
much of the optional information (paragraph (b) of this section) as is
relevant, is included.
(a) The RFC must include:
(1) Purpose of the contract. A brief, general description of the
requirement, including the citation of the legislation which authorizes
the program or project, and a statement as to the intended purpose/use
of the proposed contract.
(2) Period of performance. The number of months (or other time
period) required for total performance and, if applicable, for each
phase of work indicated in the statement of work, as well as the
proposed starting date.
(3) Estimated cost and funds citation. An estimate of the total
cost of the proposed contract and, if applicable, the estimate for each
phase indicated in the statement of work. The project officer must
provide a cost breakdown of all contributing cost factors, an estimate
of the technical staff hours, direct material, subcontracting, travel,
etc., and may consult with contracting and cost advisory personnel in
developing this information. This section must include the
certification of funds availability for the proposed acquisition, along
with the appropriation and accounting information citations. When funds
for the proposed acquisition are not currently available for obligation
but are anticipated, a statement of intent to commit funds from the
financial management officer shall be included in lieu of the
certification of funds availability. (Contracts cannot be awarded
unless funds are available, but see FAR 32.703-2).
(4) Specification, purchase description, or statement or work. A
description of the work to be performed that may be in the form of a
specification, purchase description, or statement of work. Guidance
concerning the statement of work and its contents is contained in
307.7106. Specifications and purchase descriptions are not used to a
great extent in this Department. Use of the specification is primarily
limited to supply or service contracts where the material end item or
service to be delivered is well defined by the Government.
(5) Schedule of deliverables/reporting requirements. A description
of what is to be delivered, including, if applicable, technical and
financial progress reports and any final report, and the required date
of delivery for each deliverable. Reporting requirements should be
tailored to the instant acquisition and should not be unnecessarily
extensive or detailed. All delivery and reporting requirements shall
include the quantities, the place of delivery, and time of delivery.
(6) Sources for solicitation. A list of known potential sources by
name and mailing address. The project officer is encouraged to use
trade and professional journals and publications to identify new
prospective sources to supplement the list of known sources. Efforts to
identify set-aside possibilities, i.e., small disadvantaged, and women-
owned small businesses must be explained.
(7) Project officer and alternate. The project officer's name,
title, organization, mailing address, and telephone number, along with
the same data for the project officer's alternate, and a statement that
these individuals have completed the Department's project officer
training course (see 307.170)
(b) The RFC must include, if applicable to the acquisition:
(1) Background and need. The background, history, and necessity for
the proposed contract. This section is to include prior, present, and
planned efforts by the program office in the same or related areas, and
a description of efforts by other departmental activities and Federal
agencies in the same or related program areas, if known. In addition,
specific project information, such as the relevance or contribution to
overall program objectives, reasons for the need, priority, and project
overlap are to be provided.
(2) Reference materials. A list, by title and description, of study
reports, plans, drawings, and other data to be made available to
prospective offerors for use in preparation of proposals and/or the
contractor for use in performance of the contract. The project officer
must indicate whether this material is currently available or when it
will be available.
(3) Technical evaluation criteria and instructions. Technical
evaluation criteria, which have been developed based on the
requirements of the specific project, and any instructions and
information which will assist in the preparation of prospective
offerors' technical proposals. Evaluation factors may include
understanding of the problem, technical approach, experience,
personnel, facilities, etc. Criteria areas discussed in the statement
of work and the relative order of importance or weights assigned to
each of these areas for technical evaluation purposes must be
identified.
(4) Special program clearances or approvals. Any required clearance
or approval. The following special program clearances or approvals
should be reviewed for applicability to each acquisition. The ones
which are applicable should be addressed during the planning
discussions between the project officer and contracting officer/
contract specialist (see 307.104(f)) and immediate action should be
initiated by the project officer to obtain the necessary clearances or
approvals. Comprehensive checklists of these and any OPDIV special
approvals, clearances, and requirements shall be provided for reference
purposes to program offices by the servicing contracting activity. If
the approval or clearance has been requested and is being processed at
the time of RFC submission, a footnote to this effect, including all
pertinent details, must be included in this section.
[[Page 1354]]
(i) Commercial activities. (OMB Circular No. A-76). A request for
contract (RFC) must contain a statement as to whether the proposed
solicitation is or is not to be used as part of an OMB Circular No. A-
76 cost comparison. (See General Administrative Manual (GAM) Chapter
18-10; FAR Subpart 7.3, Subpart 307.3; OMB Circular No. A-76.)
(ii) Printing. The acquisition of printing and high volume
duplicating by contract is prohibited unless it is authorized by the
Joint Committee on Printing of the U.S. Congress. Procedures to be
followed are contained in the ``Government Printing and Binding
Regulations'' and the HHS Printing Management Manual and FAR Subpart
8.8.
(iii) Paperwork Reduction Act. Under the Paperwork Reduction Act of
1995, a Federal agency shall not collect information or sponsor the
collection of information from ten or more persons (other than Federal
employees acting within the scope of their employment) unless, in
advance, the agency has submitted a request for Office of Management
and Budget (OMB) review, to the OMB, and the OMB has approved the
proposed collection of information. Procedures for the approval may be
obtained by contacting the OPDIV reports clearance officer. (See Title
5 CFR Part 1320).
(iv) Publications. All projects that will result in contracts which
include more than one publication require review and approval by the
Office of the Assistant Secretary for Public Affairs (OASPA). Form HHS-
524, Request for Communications Contract Clearance, should be forwarded
to OASPA through the OPDIV public affairs officer. Publications are
defined in Chapter 5-00-15 of the Public Affairs Management Manual.
(v) Public affairs services. Projects for the acquisition of public
affairs services in excess of $5,000 require review and approval by the
Office of the Assistant Secretary for Public Affairs (OASPA). Form HHS-
524, Request for Communications Contract Clearance, should be forwarded
to OASPA through the OPDIV public affairs officer. Public affairs
services are defined in Chapter 8-00-20 of the Public Affairs
Management Manual.
(vi) Audiovisual. Any proposed acquisition of an audiovisual
production requires the submission of a Standard Form 282, Mandatory
Title Check, to the National Audiovisual Center (NAC). When the results
of this title check have been reviewed by the project office and if a
determination is made that existing materials are not adequate to
fulfill the requirements, a statement to that effect shall be prepared
by the project office. Audiovisuals are defined in Chapter 6-00-15 of
the Public Affairs Management Manual. For acquisitions in excess of
$5,000, a copy of that statement and Form HHS-524A, Audiovisual
Clearance Request, shall be submitted through the OPDIV public affairs
officer to the Office of the Assistant Secretary for Public Affairs
(OASPA) for review and approval. An approval copy of the Form HHS-524A
will be returned to the OPDIV for transmission to the contract
negotiator.
(vii) Privacy Act (Pub. L. 93-579). Whenever the Department
contracts for the design, development, operation, or maintenance of a
system of records on individuals on behalf of the Department to
accomplish a departmental function, the Privacy Act is applicable. The
program official, after consultation with the activity's Privacy Act
Coordinator and the Office of General Counsel, as necessary, shall
include a statement in the request for contract as to the applicability
of the Act. Whenever an acquisition is subject to the Act, the program
official prepares a ``system notice'' and has it published in the
Federal Register. (See HHS Privacy Act regulation, 45 CFR 5b; FAR
Subpart 24.1 and Subpart 324.1.)
(viii) Foreign research. All foreign research contract projects to
be conducted in a foreign country and financed by HHS funds (U.S.
dollars) must have clearance by the Department of State with respect to
consistency with foreign policy objectives. This clearance should be
obtained prior to negotiation. Procedures for obtaining this clearance
are set forth in the HHS General Administration Manual, Chapter 20-60.
(5) Identification and disposition of data. Identification of the
data expected to be generated by the acquisition and an indication of
whether the data are to be delivered to the Department or to be
retained by the contractor. The project officer must also include
information relative to the use, maintenance, disclosure, and
disposition of data. The project officer must include a statement as to
whether or not another acquisition, based upon the data generated by
the proposed acquisition, is anticipated.
(6) Government property. If known, the type of Government property,
individual items, and quantities of Government property to be furnished
to, or allowed to be acquired by, the resultant contractor. The project
officer must specify when the Government property is to be made
available. Refer to HHS Publication (OS) 686, ``Contractor's Guide for
Control of Government Property (1990).''
(7) Special terms and conditions. Any suggested special terms and
conditions not already covered in the statement of work or the
applicable contract general provisions.
(8) Justification for other than full and open competition. If the
proposed acquisition is to be awarded using other than full and open
competition, a justification prepared in accordance with FAR Subpart
6.3 and Subpart 306.3.
307.7106 Statement of work.
(a) General. A statement of work (SOW) differs from a
specifications and purchase description primarily in that it describes
work or services to be performed in reaching an end result rather than
a detailed, well defined description or specification of the end
product. The SOW may enumerate or describe the methods (statistical,
clinical, laboratory, etc.) that will be used. However, it is
preferable for the offeror to propose the method of performing the
work. The SOW should specify the desired results, functions, or end
items without telling the offeror what has to be done to accomplish
those results unless the method of performance is critical or required
for the successful performance of the contract. The SOW should be clear
and concise and must completely define the responsibilities of the
Government and the contractor. The SOW should be worded so as to make
more than one interpretation virtually impossible because it has to be
read and interpreted by persons of varied backgrounds, such as
attorneys, contracting personnel, cost estimators, accountants,
scientists, educators, functional specialists, etc. The SOW must
clearly define the obligations of both the contractor and the
Government so as to protect the interests of both. Ambiguous statements
of work can create unsatisfactory performance, delays, and disputes,
and can result in higher costs.
(b) Term (level of effort) vs. completion work statement. Careful
distinctions must be drawn between term (level of effort) SOWs, which
essentially require the furnishing of technical effort and a report
thereof, and completion type work statements, which require development
of tangible items designed to meet specific performance
characteristics. (See FAR 16.306(d) for distinction).
(1) Term (or level of effort). A term or level of effort type SOW
is appropriate to research where one seeks to discover the feasibility
of later development, or to gather general information. A term or level
of effort type SOW may only specify that some number of labor-hours
[[Page 1355]]
be expended on a particular course of research, or that a certain
number of tests be run, without reference to any intended conclusion.
(2) Completion. A completion type SOW is appropriate to development
work where the feasibility of producing an end item is already known. A
completion type SOW may describe what is to be achieved through the
contracted effort, such as development of new methods, new end items,
or other tangible results.
(c) Phasing. Individual research, development, or demonstration
projects frequently lie well beyond the present state of the art and
entail procedures and techniques of great complexity and difficulty.
Under these circumstances, a contractor, no matter how carefully
selected, may be unable to deliver the desired result. Moreover, the
job evaluating the contractor's progress is often difficult. Such a
contract is frequently phased and often divided into stages of
accomplishment, each of which must be completed and approved before the
contractor may proceed to the next. Phasing makes it necessary to
develop methods and controls, including reporting requirements for each
phase of the contract and criteria for evaluation of the report
submitted, that will provide, at the earliest possible time,
appropriate data for making decisions relative to future phases. A
phased contract may include stages of accomplishment such as research,
development, and demonstration. Within each phase, there may be a
number of tasks which should be included in the SOW. When phases of
work can be identified, the SOW will provide for phasing and the
request for proposals will require the submission of proposed costs by
phases. The resultant contract will reflect costs by phases, require
the contractor to identify incurred costs by phases, establish delivery
schedules by phase, and require the written acceptance of each phase.
The provisions of the Limitation of Cost clause shall apply to the
estimated cost of each phase. Contractors shall not be allowed to incur
costs for phases which are dependent upon successful completion of
earlier phases until written acceptance of the prior work is obtained
from the contracting officer.
(d) Elements of the SOW. The elements of the SOW will vary with the
objective, complexity, size, and nature of the acquisition. In general,
it should cover the following matters as appropriate.
(1) A general description of the required objectives and desired
results. Initially, a broad, nontechnical statement of the nature of
the work to be performed. This should summarize the actions to be
performed by the contractor and the results that the Government
expects.
(2) Background information helpful to a clear understanding of the
requirements and how they evolved. Include a brief historical summary
as appropriate and the relationship to overall program objectives.
(3) A detailed description of the technical requirements. A
comprehensive description of the work to be performed to provide
whatever details are necessary for prospective offerors to submit
meaningful proposals.
(4) Subordinate tasks or types of work. A listing of the various
tasks or types of work (it may be desirable in some cases to indicate
that this is not all-inclusive). The degree of task breakout is
directly dependent on the size and complexity of the work to be
performed and the logical groupings. A single cohesive task should not
be broken out merely to conform to a format. Indicate whether the tasks
are sequential or concurrent for offeror planning purposes.
(5) Reference material. All reference material to be used in the
conduct of the project that tells how the work is to be carried out
must be identified. Applicability should be explained, and a statement
made as to where the material can be obtained.
(6) Level of effort. When a level of effort is required, the number
and type of personnel required should be stated. If known, the type and
degree of expertise should be specified.
(7) Special requirements. (as applicable). An unusual or special
contractual requirement, which would impact on contract performance,
should be included as a separate section.
(8) Deliverables reporting requirements. All deliverables and/or
reports must be clearly and completely described.
307.7101 Review.
Upon receipt of the RFC, the contracting officer shall review its
contents to ensure that all pertinent information has been provided by
the program office and that it includes an acceptable SOW. If pertinent
information is missing or the SOW is inadequate, the contracting
officer shall obtain or clarify the information as soon as possible so
that the acquisition schedule can be met. If the program office delays
furnishing the information or clarification, the contracting officer
should notify the head of the sponsoring program office, in writing, of
the possible slippage in the acquisition schedule and the need for an
expeditious remedy. The contracting officer should also notify the
chief of the contracting office. A program office's or project
officer's continued failure to adhere to agreed on milestones should
also be reported to the head of the contracting activity.
PART 309--CONTRACTOR QUALIFICATIONS
Subpart 309.4--Debarment, Suspension, and Ineligibility
Sec.
309.403 Definitions.
309.404 List of parties excluded from Federal procurement and
nonprocurement programs.
309.405 Effect of listing.
309.406 Debarment.
309.406-3 Procedures.
309.407 Suspension.
309.407-3 Procedures.
309.470 Reporting of suspected causes of debarment, suspension, or
the taking of evasive actions.
309.470-1 Situations where reports are required.
309.470-2 Contents of reports.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 309.4--Debarment, Suspension, and Ineligibility
309.403 Definitions.
Acquiring agency's head or designee, as used in the FAR, shall
mean, unless otherwise stated in this subpart, the head of the
contracting activity. Acting in the capacity of the acquiring agency's
head, the head of the contracting activity may make the required
justifications or determinations, and take the necessary actions,
specified in FAR 9.405, 9.406 and 9.407 for his or her respective
activity, but only after obtaining the approval of the debarring or
suspending official, as the case may be.
Debarring official means the Assistant Secretary for Management and
Budget, or his/her designee.
Initiating official means either the contracting officer, the head
of the contracting activity, the Deputy Assistant Secretary for Grants
and Acquisition Management, or the Inspector General.
Suspending official means the Assistant Secretary for Management
and Budget, or his/her designee.
309.304 List of parties excluded from Federal procurement and
nonprocurement programs.
(c) The Office of Grants and Acquisition Management (OGAM) shall
perform the actions required by FAR 9.404(c).
(4) OGAM shall maintain all documentation submitted by the
[[Page 1356]]
initiating official recommending the debarment or suspension action and
all correspondence and other pertinent documentation generated during
the OGAM review.
309.405 Effect of listing.
(a) The head of the contracting activity (HCA) (not delegable) may,
with the concurrence of the debarring or suspending official, make the
determinations referenced in FAR 9.405(a), regarding contracts for
their respective activities.
(1) If a contracting officer considers it necessary to award a
contract, or consent to a subcontract with a debarred or suspended
contractor, the contracting officer shall prepare a determination,
including all pertinent documentation, and submit it through
acquisition channels to the head of the contracting activity. The
documentation must include the date by which approval is required and a
compelling reason for the proposed action. Some examples of
circumstances that may constitute a compelling reason for the award to,
or consent to a subcontract with, a debarred or suspended contractor
include:
(i) The property or services to be acquired are available only from
the listed contractor;
(ii) The urgency of the requirement dictates that the Department
deal with the listed contractor; or
(iii) There are other compelling reasons which require business
dealings with the listed contractor.
(2) If the HCA decides to approve the requested action, he/she
shall request the concurrence of the debarring or suspending official
and, if given, shall inform the contracting officer in writing of the
decision within the required time period.
309.406 Debarment.
309.406-3 Procedures.
(a) Investigation and referral. Whenever an apparent cause for
debarment becomes known to an initiating official, that person shall
prepare a report incorporating the information required by 309.470-2,
if known, and forward it through appropriate channels with a written
recommendation, to the debarring official. Contracting officers shall
forward their reports in accordance with 309.470-1. The debarring
official shall initiate an investigation through such means as he/she
deems appropriate.
(b) Decisionmaking process. The debarring official shall review the
results of the investigation, if any, and make a written determination
whether or not debarment procedures are to be commenced. A copy of the
determination shall be promptly sent through appropriate channels to
the initiating official, and the contracting officer, if necessary. If
the debarring official determines to commence debarment procedures, he/
she shall, after consultation with the Office of the General Counsel,
notify the contractor in accordance with FAR 9.406-3(c). If the
proposed action is not based on a conviction or judgement and the
contractor's submission in response to the notice raises a genuine
dispute over facts material to the proposed debarment, the debarring
official shall arrange for fact-finding hearings and take the necessary
action specified in FAR 406-3(b)(2). The debarring official shall also
ensure that written findings of facts are prepared, and shall base the
debarment decisions on the facts as found, after considering
information and argument submitted by the contractor and any other
information in the administrative record. The Office of the General
Counsel shall represent the Department at any fact-finding hearing and
may present witnesses for HHS and question any witnesses presented by
the contractor.
309.407 Suspension.
309.407-3 Procedures.
(a) Investigation and referral. Whenever an apparent cause for
suspension becomes known to an initiating official, that person shall
prepare a report incorporating the information required by 309.470-2,
if known, and forward it through appropriate channels, with a written
recommendation, to the suspending official. Contracting officers shall
forward their reports in accordance with 309.470-1. The suspending
official shall initiate an investigation through such means as he/she
deems appropriate.
(b) Decisionmaking process. The suspending official shall review
the results of the investigation, if any, and make a written
determination whether or not suspension should be imposed. A copy of
this determination shall be promptly sent through appropriate channels
to the initiating official and the contracting officer, if necessary.
If the suspending official determines to impose suspension, he/she
shall, after consultation with the Office of the General Counsel,
notify the contractor in accordance with FAR 9.407-3(c). If the action
is not based on an indictment, and, subject to the provisions of FAR
9.407-3(b)(2), the contractor's submission in response to the notice
raises a genuine dispute over facts material to the suspension, the
suspending official shall, after suspension has been imposed, arrange
for fact-finding hearings and take the necessary actions specified in
FAR 9.407-3(b)(2).
309.470 Reporting of suspected causes for debarment or suspension, or
the taking of evasive actions.
309.470-1 Situations where reports are required.
A report incorporating the information required by 309.470-2 shall
be forwarded, in duplicate, by the contracting officer through
acquisition channels to OGAM when:
(a) A contractor has committed, or is suspected of having
committed, any of the acts described in FAR 9.406-2 or FAR 9.407-2; or
(b) A contractor is suspected of attempting to evade the
prohibitions of debarment or suspension imposed under this regulation,
or any other comparable regulation, by changes of address, multiple
addresses, formation of new companies, or by other devices.
309.470-2 Contents of reports.
Each report prepared under 309.470-1 shall be coordinated with the
Office of the General Counsel and shall include the following
information, where available:
(a) Name and address of contractor.
(b) Name of the principal officers, partners, owners, or managers.
(c) All known affiliates, subsidiaries, or parent firms, and the
nature of the affiliation.
(d) Description of the contract or contracts concerned, including
the contract number, and office identifying numbers or symbols, the
amount of each contract, the amount paid the contractor and the amount
still due, and the percentage of work completed and to be completed.
(e) The status of vouchers.
(f) Whether contract funds have been assigned pursuant to the
Assignment of Claims Act, as amended, (31 U.S.C. 3727, 41 U.S.C. 15),
and, if so assigned, the name and address of the assignee and a copy of
the assignment.
(g) Whether any other contracts are outstanding with the contractor
or any affiliates, and, if so, the amount of the contracts, whether
these funds have been assigned pursuant to the Assignment of Claims
Act, as amended, (31 U.S.C. 3727, 41 U.S.C. 15), and the amounts paid
or due on the contracts.
(h) A complete summary of all available pertinent evidence.
(i) A recommendation as to the continuation of current contracts.
[[Page 1357]]
(j) An estimate of damages, if any, sustained by the Government as
a result of the action of the contractor, including an explanation of
the method used in making the estimate.
(k) The comments and recommendations of the contracting officer and
statements regarding whether the contractor should be suspended or
debarred, whether any limitations should be applied to the action, and
the period of any proposed debarment.
(l) As an enclosure, a copy of the contract(s) or pertinent
excerpts therefrom, appropriate exhibits, testimony or statements of
witnesses, copies of assignments, and other relevant documentation or a
written summary of any information for which documentation is not
available.
PART 313--SIMPLIFIED ACQUISITION PROCEDURES
Subpart 313.3--Simplified Acquisition Methods
Sec.
313.303 Blanket purchase agreements (BPAs).
313.303-5 Purchases under BPAs.
313.305 Imprest funds and third party drafts.
313.305-1 General.
313.306 SF 44, Purchase Order--Invoice--Voucher.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 313.3--Simplified Acquisition Methods.
313.303 Blanket Purchase Agreements (BPAs).
313.303-5 Purchase under BPAs.
(e)(5) Delivery documents, invoices, etc., signed by the Government
employee receiving the item or service will be forwarded to the fiscal
office or other paying office as designated by the OPDIV. Payment will
be made on the basis of the signed document, invoice, etc. Contracting
offices will ensure that established procedures allowing for
availability of funds are in effect prior to placement of orders.
313.305 Imprest funds and third party drafts.
313.305-1 General.
Requests to establish imprest funds shall be made to the
responsible fiscal office. At larger activities where the cashier may
not be conveniently located near the purchasing office, a Class C
Cashier may be installed in the purchasing office. Documentation of
cash purchases shall be in accordance with instructions contained in
the HHS Voucher Audit Manual Part 1, Chapter 1-10.
313.306 SF 44, Purchase Order--Invoice--Voucher.
(d) Since the Standard Form (SF) 44 is an accountable form, a
record shall be maintained of serial numbers of the form, to whom
issued, and date issued. SF 44's shall be kept under adequate lock and
key to prevent unauthorized use. A reservation of funds shall be
established to cover total anticipated expenditures prior to use of the
SF 44.
PART 314--SEALED BIDDING
Subpart 314.2--Solicitation of Bids
Sec.
314.202 General rules for solicitation of bids.
314.202-7 Facsimile bids.
314.213 Annual submission of representations and certifications.
Subpart 314.4--Opening of Bids and Award of Contract
314.404 Rejection of bids.
314.404-1 Cancellation of invitations after opening.
314.407 Mistakes in bids.
314.407-3 Other mistakes disclosed before award.
314.407-4 Mistakes after award.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 314.2--Solicitation of Bids
314.202 General rules for solicitation of bids.
314.202-7 Facsimile bids.
If the head of the contracting activity (HCA) (not delegable) has
determined that the contracting activity will allow use of facsimile
bids and proposals, the HCA shall prescribe internal procedures, in
accordance with the FAR, to ensure uniform processing and control.
314.213 Annual submission of representations and certifications.
Each HCA (not delegable) shall determine whether the contracting
activity will allow use of the annual submission of representations and
certifications by bidders.
Subpart 314.4--Opening of Bids and Award of Contract
314.404 Rejection of bids.
314.404-1 Cancellation of invitations after opening.
(c) The chief of the contracting office (CCO) (not delegable) shall
make the determination required by FAR 14.404-1(c).
314.407 Mistakes in bids.
314.407-3 Other mistakes disclosed before award.
(e) Authority has been delegated to the Departmental Protest
Control Officer, Office of Acquisition Management, Office of Grants and
Acquisition Management to make administrative determinations in
connection with mistakes in bid alleged after opening and before award.
This authority may not be redelegated.
(f) Each proposed determination shall have the concurrence of the
Chief, Business Law Branch, Business and Administrative Law Division,
Office of General Counsel.
(i) Doubtful cases shall not be submitted by the contracting
officer directly to the Comptroller General, but shall be submitted to
the Departmental Protest Control Officer.
314.407-4 Mistakes after award.
(c) Authority has been delegated to the Departmental Protest
Control Officer to make administrative determinations in connection
with mistakes in bid alleged after award. This authority may not be
redelegated.
(d) Each proposed determination shall have the concurrence of the
Chief, Business Law Branch, Business and Administrative Law Division,
Office of General Counsel.
PART 315--CONTRACTING BY NEGOTIATION
Subpart 315.2--Solicitation and Receipt of Proposals and Information
Sec.
315.204 Contract format.
315.204-5 Part IV--Representations and instructions.
315.208 Submission, modification, revision, and withdrawal of
proposals.
315.209 Solicitation provisions and contract clauses.
Subpart 315.3--Source Selection
315.305 Proposal evaluation.
315.306 Exchanges with offerors after receipt of proposals.
315.307 Final proposal revisions.
315.370 Finalization of details with the selected source.
315.371 Contract preparation and award.
315.372 Preparation of negotiation memorandum.
Subpart 315.4--Contract Pricing
315.404 Proposal analysis.
315.404-2 Information to support proposal analysis.
315.404-4 Profit.
Subpart 315.6--Unsolicited Proposals
315.605 Content of unsolicited proposals.
315.606 Agency procedures.
315.606-1 Receipt and initial review.
315.609 Limited use of data.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
[[Page 1358]]
Subpart 315.2--Solicitation and Receipt of Proposals and
Information
315.204 Contract format.
315.204-5 Part IV--Representations and instructions.
(a) Section K, Representations, certifications, and other
statements of offerors.
(1) This section shall begin with the following and continue with
the applicable representations and certifications:
To Be Completed by the Offeror: (The Representations and
Certifications must be executed by an individual authorized to bind
the offeror.) The offeror makes the following Representations and
Certifications as part of its proposal (check or complete all
appropriate boxes or blanks on the following pages).
(Name of Offeror)------------------------------------------------------
(RFP No.)--------------------------------------------------------------
(Signature of Authorized Individual)-----------------------------------
----------------------------------------------------------------------
(Date)-----------------------------------------------------------------
(Typed Name of Authorized Individual)----------------------------------
----------------------------------------------------------------------
Note: The penalty for making false statements in offers is
prescribed in 18 U.S.C. 1001.
(c) Section M, Evaluation factors for award.
(1) General. (i) The evaluation criteria must be developed by the
project officer and submitted to the contracting officer in the request
for contract (RFC) for inclusion in the request for proposal (RFP).
Development of these criteria and the assignment of the relative
importance or weight to each criterion require the exercise of
judgement on a case-by-case basis because they must be tailored to the
requirements of the individual acquisition. Since the criteria will
serve as a standard against which all proposals will be evaluated, it
is imperative that they be chosen carefully to emphasize those factors
considered to be critical in the selection of a contractor.
(ii) The finalized evaluation criteria and indications of their
relative importance or weight, as included in the RFP, cannot be
changed except by a formal amendment to the RFP issued by the
contracting officer. No factors other than those set forth in the RFP
shall be used in the evaluation of proposals.
(2) Review of evaluation criteria.
(i) The evaluation criteria should be reviewed by the contracting
officer in terms of the work statement. This review is not intended to
dictate technical requirements to the program office or project
officer, but rather to ensure that the evaluation criteria are clear,
concise, and fair so that all potential offerors are fully aware of the
bases for proposal evaluation and are given an equal opportunity to
compete.
(ii) The project officer and the contracting officer should then
review the evaluation criteria together to ascertain the following:
(A) The criteria are described in sufficient detail to provide the
offerors (and evaluators) with a total understanding of the factors to
be involved in the evaluation process;
(B) The criteria address the key programmatic concerns which the
offerors must be aware of in preparing proposals;
(C) The criteria are specifically applicable to the instant
acquisition and are not merely restatements of criteria from previous
acquisitions which are not relevant to this acquisition; and
(D) The criteria are selected to represent only the significant
areas of importance which must be emphasized rather than a multitude of
factors. (All criteria tend to lose importance if too many are
included. Using too many criteria will prove as detrimental as using
too few.)
(3) Examples of topics that form a basis for evaluation criteria.
Typical examples of topics that form a basis for the development of
evaluation criteria are listed in the following paragraphs. These
examples are intended to assist in the development of actual evaluation
criteria for a specific acquisition and should only be used if they are
applicable to that acquisition. They are not to be construed as actual
examples of evaluation criteria to be included in the RFP.
(i) Understanding of the problem and statement of work;
(ii) Method of accomplishing the objectives and intent of the
statement of work;
(iii) Soundness of the scientific or technical approach for
executing the requirements of the statement of work (to include, when
applicable, preliminary layouts, sketches, diagrams, other graphic
representations, calculations, curves, and other data necessary for
presentation, substantiation, justification, or understanding of the
approach);
(iv) Special technical factors, such as experience or pertinent
novel ideas in the specific branch of science or technology involved;
(v) Feasibility and/or practicality of successfully accomplishing
the requirements (to include a statement and discussion of anticipated
major difficulties and problem areas and recommended approaches for
their resolution);
(vi) Availability of required special research, test, and other
equipment or facilities;
(vii) Managerial capability (ability to achieve delivery or
performance requirements as demonstrated by the proposed use of
management and other personnel resources, and to successfully manage
the project, including subcontractor and/or consultant efforts, if
applicable, as evidenced by the management plan and demonstrated by
previous experience);
(viii) Availability, qualifications, experience, education, and
competence of professional, technical, and other personnel, to include
proposed subcontractors and consultants (as evidenced by resumes,
endorsements, and explanations of previous efforts); and
(ix) Soundness of the proposed staff time or labor hours, propriety
of personnel classifications (professional, technical, others),
necessity for type and quantity of material and facilities proposed,
validity of proposed subcontracting, and necessity of proposed travel.
(4) Relative importance or weight.
(i) A statement or indication of the relative importance or weight
must be assigned to each evaluation criterion (significant factor) to
inform prospective offerors (and evaluators) of the specific
significance of each criterion in comparison to the other criteria.
Similarly, if a criterion (factor) is subdivided into parts, each of
the parts (subfactors) must be assigned a statement or indication of
the relative importance or weight.
(ii) Cost or price is not generally included as one of the
evaluation criteria and is not assigned an indication of relative
importance or weight. However, a statement must be included in the RFP
to reflect the relationship of cost or price in comparison to the other
criteria. (See FAR 15.304(e)). The contracting officer and project
officer should work together in arriving at the final determination
regarding the relationship.
315.208 Submission, modification, revision, and withdrawal of
proposals.
(b) When the head of the contracting activity (HCA) for a health
agency determines that certain classes of biomedical or behavioral
research and development acquisitions should be subject to conditions
other than those specified in FAR 52.215-1(c)(3), the HCA may authorize
the use of the provision at 352.215-70 in addition to the provision at
FAR 52.215-1.
(2) When the provision at 352.215-70 is included in the
solicitation and a
[[Page 1359]]
proposal is received after the exact time specified for receipt, the
contracting officer, with the assistance of cost and technical
personnel, shall make a written determination as to whether the
proposal meets the requirements of the provision at 352.215-70 and,
therefore, can be considered.
315.209 Solicitation provisions and contract clauses.
(a) Paragraph (e) of the provision at 352.215-1 shall be used in
place of that specified at FAR 52.215-1(e).
(g) If the head of the contracting activity (HCA)(not delegable)
has determined that the contracting activity will allow the use of the
annual submission of representations and certifications by offerors,
the provisions of FAR 14.213 shall be followed.
Subpart 315.3--Source Selection
315.305 Proposal evaluation.
(a) (1) Cost or price evaluation. The contracting officer shall
evaluate business proposals adhering to the requirements for cost or
price analysis included in FAR 15.404. The contracting officer must
determine the extent of analysis in each case depending on the amount
of the proposal, the technical complexity and related cost or price,
and cost realism. The contracting officer should request the project
officer to analyze items such as the number of labor hours proposed for
various labor categories; the mix of labor hours and categories of
labor in relation to the technical requirements of the project; the
kinds and quantities of material, equipment, and supplies; types,
numbers and hours/days of proposed consultants; logic of proposed
subcontracting; analysis of the travel proposed including number of
trips, locations, purpose, and travelers; and kinds and quantities of
data processing. The project officer shall provide his/her opinion as
to whether these elements are necessary and reasonable for efficient
contract performance. Exceptions to proposed elements shall be
supported by adequate rationale to allow for effective negotiations or
award if discussions are not conducted. The contracting officer should
also request the assistance of a cost/price analyst when considered
necessary. In all cases, the negotiation memorandum must include the
rationale used in determining that the price or cost is fair and
reasonable.
(3) Technical evaluation.
(i) Technical evaluation plan.
(A) A technical evaluation plan may be required by the contracting
officer, at his/her discretion, when an acquisition is sufficiently
complex as to warrant a formal plan.
(B) The technical evaluation plan should include at least the
following:
(1) A list of recommended technical evaluation panel members, their
organizations, a list of their major consulting clients (if
applicable), their qualifications, and curricula vitae (if applicable);
(2) A justification for using non-Government technical evaluation
panel members. (Justification is not required if non-Government
evaluators will be used in accordance with standard contracting
activity procedures or policies);
(3) A statement that there is no apparent or actual conflict of
interest regarding any recommended panel member;
(4) A copy of each rating sheet, approved by the contracting
officer, to be used to assure consistency with the evaluation criteria;
and
(5) A brief description of the general evaluation approach.
(C) The technical evaluation plan must be signed by an official
within the program office in a position at least one level above the
project officer, or in accordance with contracting activity procedures.
(D) The technical evaluation plan should be submitted to the
contracting officer for review and approval before the solicitation is
issued. The contracting officer shall make sure that the principal
factors relating to the evaluation are reflected in the evaluation
criteria when conducting the review of the plan.
(ii) Technical evaluation panel.
(A) General. (1) A technical evaluation panel is required for all
acquisitions applicable to this subpart which are expected to exceed
$500,000 and in which technical evaluation is considered a key element
in the determination of making an award . The contracting officer has
the discretion to require a technical evaluation panel for acquisitions
not exceeding $500,000 based on the complexity of the acquisition.
(2) The technical evaluation process requires careful consideration
regarding the size, composition, expertise, and function of the
technical evaluation panel. The efforts of the panel can result in the
success or failure of the acquisition.
(B) Role of the project officer. (1) The project officer is the
contracting officer's technical representative for the acquisition
action. The project officer may be a voting member of the technical
evaluation panel, and may also serve as the chairperson of the panel,
unless he/she is prohibited by law or contracting activity procedures
to do so.
(2) The project officer is responsible for recommending panel
members who are knowledgeable in the technical aspects of the
acquisition and who are competent to identify strengths and weaknesses
of the various proposals. The program training requirements specified
in 307.170 must be adhered to when selecting prospective panel members
(government employees).
(3) The project officer shall ensure that persons possessing
expertise and experience in addressing issues relative to sex, race,
national origin, and handicapped discrimination be included as panel
members in acquisitions which address those issues. The intent is to
balance the composition of the panel so that qualified and concerned
individuals may provide insight to other panel members regarding ideas
and approaches to be taken in the evaluation of proposals.
(4) The project officer is to submit the recommended list of panel
members to an official within the program office in a position at least
one level above the project officer, or in accordance with contracting
activity procedures. This official will review the recommendations and
select the chairperson.
(5) The project officer shall arrange for adequate and secure
working space for the panel.
(C) Role of the contracting officer. (1) The term ``contracting
officer,'' as used in this subpart, may be the contracting officer or
his/her designated representative within the contracting office.
(2) The contracting officer shall not serve as a member of the
technical evaluation panel but should be available to:
(i) Address the initial meeting of the technical evaluation panel;
(ii) Provide assistance to the evaluators as required; and
(iii) Ensure that the scores adequately reflect the written
technical report comments.
(D) Conflict of interest. (1) If a panel member has an actual or
apparent conflict of interest related to a proposal under evaluation,
he/she shall be removed from the panel and replaced with another
evaluator. If a suitable replacement is not available, the panel shall
perform the review without a replacement.
(2) For the purposes of this subpart, conflicts of interest are
defined in the Standards of Ethical Conduct for Employees of the
Executive Branch (5 CFR 2635), Supplemental Standards of Ethical
Conduct for Employees of the
[[Page 1360]]
Department of Health and Human Services (5 CFR Part 5501), and the
Procurement Integrity Act. For outside evaluators serving on the
technical evaluation panel, see paragraph (F), (315.305(a)(3)(ii)(F)).
(E) Continuity of evaluation process. (1) The technical evaluation
panel is responsible for evaluating the original proposals, making
recommendations to the chairperson regarding weaknesses and
deficiencies of proposals, and, if required by the contracting officer,
assisting the contracting officer during communications and
discussions, and reviewing supplemental, revised and/or final proposal
revisions. To the extent possible, the same evaluators should be
available throughout the entire evaluation and selection process to
ensure continuity and consistency in the treatment of proposals. The
following are examples of circumstances when it would not be necessary
for the technical evaluation panel to evaluate revised proposals
submitted during the acquisition:
(i) The answers to questions do not have a substantial impact on
the proposal;
(ii) Final proposal revisions are not materially different from the
original proposals; or
(iii) The rankings of the offerors are not affected because the
revisions to the proposals are relatively minor.
(2) The chairperson, with the concurrence of the contracting
officer, may decide not to have the panel evaluate the revised
proposals. Whenever this decision is made, it must be fully documented
by the chairperson and approved by the contracting officer.
(3) When technical evaluation panel meetings are considered
necessary by the contracting officer, the attendance of evaluators is
mandatory. When the chairperson determines that an evaluator's failure
to attend the meetings is prejudicial to the evaluation, the
chairperson shall remove and/or replace the individual after discussing
the situation with the contracting officer and obtaining his/her
concurrence and the approval of the official responsible for appointing
the panel members.
(4) Whenever continuity of the evaluation process is not possible,
and either new evaluators are selected or a reduced panel is decided
upon, each proposal which is being reviewed at any stage of the
acquisition shall be reviewed at that stage by all members of the
revised panel unless it is impractical to do so because of the receipt
of an unusually large number of proposals.
(F) Use of outside evaluators. (1) The National Institutes of
Health (NIH) and the Substance Abuse and Mental Health Services
Administration (SAMHSA) are required to have a peer review of research
and development contracts in accordance with Public Law (Pub. L.) 93-
352 as amended by Pub. L. 94-63; 42 U.S.C. 289 1-4. This legislation
requires peer review of projects and proposals, and not more than one-
fourth of the members of a peer review group may be officers or
employees of the United States. NIH and SAMHSA are therefore exempt
from the provisions of 315.305(a)(3)(ii) to the extent that 42 U.S.C.
289 1-4 applies. Conflicts of interest are addressed in the Scientific
Peer Review of Research Grant Applications and Research and Development
Contract Projects (42 CFR Part 52 h).
(2) In general, decisions to disclose proposals outside the
Government for evaluation purposes shall be made by the official
responsible for appointing panel members for the acquisition, after
consultation with the contracting officer and in accordance with
operating division procedures. The decision to disclose either a
solicited or unsolicited proposal outside the Government for the
purpose of obtaining an evaluation shall take into consideration the
avoidance of organizational conflicts of interest and any competitive
relationship between the submitter of the proposal and the prospective
evaluator(s).
(3) When it is determined to disclose a solicited proposal outside
the Government for evaluation purposes, the following or similar
conditions shall be included in the written agreement with evaluator(s)
prior to disclosure:
Conditions for Evaluating Proposals
The evaluator agrees to use the data (trade secrets, business
data, and technical data) contained in the proposal only for
evaluation purposes.
The requirement does not apply to data obtained from another
source without restriction.
Any notice or legend placed on the proposal by either the
Department or the submitter of the proposal shall be applied to any
reproduction or abstract provided to the evaluator or made by the
evaluator. Upon completion of the evaluation, the evaluator shall
return the Government furnished copy of the proposal or abstract,
and all copies thereof, to the Departmental office which initially
furnished the proposal for evaluation.
Unless authorized by the Department's initiating office, the
evaluator shall not contact the submitter of the proposal concerning
any aspects of its contents.
The evaluator will be obligated to obtain commitments from its
employees and subcontractors, if any, to effect the purposes of
these conditions.
(iii) Receipt of proposals.
(A) After the closing date set by the solicitation for the receipt
of proposals, the contracting officer will use a transmittal memorandum
to forward the technical proposals to the project officer or
chairperson for evaluation. The business proposals will be retained by
the contracting officer for evaluation.
(B) The transmittal memorandum shall include at least the
following:
(1) A list of the names of the organizations submitting proposals;
(2) A reference to the need to preserve the integrity of the source
selection process;
(3) A statement that only the contracting officer is to conduct
discussions.
(4) A requirement for a technical evaluation report in accordance
with 315.305(a)(3)(vi); and
(5) The establishment of a date for receipt of the technical
evaluation report.
(iv) Convening the technical evaluation panel.
(A) Normally, the technical evaluation panel will convene to
evaluate the proposals. However, there may be situations when the
contracting officer determines that it is not feasible for the panel to
convene. Whenever this decision is made, care must be taken to assure
that the technical review is closely monitored to produce acceptable
results.
(B) When a panel is convened, the chairperson is responsible for
the control of the technical proposals provided to him/her by the
contracting officer for use during the evaluation process. The
chairperson will generally distribute the technical proposals prior to
the initial panel meeting and will establish procedures for securing
the proposals whenever they are not being evaluated to insure their
confidentiality. After the evaluation is complete, all proposals must
be returned to the contracting officer by the chairperson.
(C) The contracting officer shall address the initial meeting of
the panel and state the basic rules for conducting the evaluation. The
contracting officer shall provide written guidance to the panel if he/
she is unable to attend the initial panel meeting. The guidance should
include:
(1) Explanation of conflicts of interest;
(2) The necessity to read and understand the solicitation,
especially the statement of work and evaluation criteria, prior to
reading the proposals;
(3) The need for evaluators to restrict the review to only the
solicitation and the contents of the technical proposals;
(4) The need for each evaluator to review all the proposals;
[[Page 1361]]
(5) The need to watch for ambiguities, inconsistencies, errors, and
deficiencies which should be surfaced during the evaluation process;
(6) An explanation of the evaluation process and what will be
expected of the evaluators throughout the process;
(7) The need for the evaluators to be aware of the requirement to
have complete written documentation of the individual strengths and
weaknesses which affect the scoring of the proposals; and
(8) An instruction directing the evaluators that, until the award
is made, information concerning the acquisition must not be disclosed
to any person not directly involved in the evaluation process.
(v) Rating and ranking of proposals. The evaluators will
individually read each proposal, describe tentative strengths and
weaknesses, and develop preliminary scores in relation to each
evaluation criterion set forth in the solicitation. After this has been
accomplished, the evaluators shall discuss in detail the individual
strengths and weakness described by each evaluator and, if possible,
arrive at a common understanding of the major strengths and weaknesses
and the potential for correcting each offeror's weakness(es). Each
evaluator will score each proposal, and then the technical evaluation
panel will collectively rank the proposals. Generally, ranking will be
determined by adding the numerical scores assigned to the evaluation
criteria and finding the average for each offeror. The evaluators
should then identify whether each proposal is acceptable or
unacceptable. Predetermined cutoff scores shall not be employed.
(vi) Technical evaluation report. A technical evaluation report
shall be prepared and furnished to the contracting officer by the
chairperson and maintained as a permanent record in the contract file.
The report must reflect the ranking of the proposals and identify each
proposal as acceptable or unacceptable. The report must also include a
narrative evaluation specifying the strengths and weaknesses of each
proposal, a copy of each rating sheet, and any reservations,
qualifications, or areas to be addressed that might bear upon the
selection of sources for negotiation and award. Concrete technical
reasons supporting a determination of unacceptability with regard to
any proposal must be included. The report should also include specific
points and questions which are to be raised in discussions or
negotiations.
315.306 Exchanges with offerors after receipt of proposals.
(c) Competitive range. (1) Some of the factors which the
contracting officer should consider in determining the competitive
range are:
(i) The relative importance of cost or price as compared to
technical factors;
(ii) The susceptibility of significantly reducing a proposal with
an unreasonable high price or cost without undermining the technical
merit if the offeror otherwise has a reasonable chance to receive an
award; and
(iii) The likelihood of reducing cost or price of a proposal which
exceeds the Government's requirements.
(2) The contracting officer shall conduct a thorough review of the
technical evaluation report to be assured that:
(i) All determinations of unacceptability are supported by concrete
and comprehensive statements that are factual and convincing and are
consistent with the evaluation criteria set forth in the solicitation.
Every statement should be reviewed carefully to eliminate any doubts as
to the unacceptability of a proposal;
(ii) All recommendations to exclude proposals from the competitive
range are supported by persuasive rationale and sufficient facts to
substantiate a judgment that meaningful discussions are not possible or
there is no reasonable chance of the proposal being selected for award;
(iii) Those cases where only one organization is found to be
technically acceptable are fully scrutinized; and
(iv) Unacceptable proposals contain ``information'' deficiencies
which are so material as to preclude any possibility of upgrading the
proposal to a competitive level except through major revisions and
additions which would be tantamount to the submission of another
proposal.
(d) Exchanges with offerors after establishment of the competitive
range. The contracting officer and project officer should discuss the
uncertainties and/or deficiencies that are included in the technical
evaluation report for each proposal in the competitive range. Technical
questions should be developed by the project officer and/or the
technical evaluation panel and should be included in the technical
evaluation report. The management and cost or price questions should be
prepared by the contracting officer with assistance from the project
officer and/or panel as required. The method of requesting offerors in
the competitive range to submit the additional information will vary
depending on the complexity of the questions, the extent of additional
information requested, the time needed to analyze the responses, and
the time frame for making the award. However, to the extent
practicable, all questions and answers should be in writing. Each
offeror in the competitive range shall be given an equitable period of
time for preparation of responses to questions to the extent
practicable. The questions should be developed so as to disclose the
ambiguities, uncertainties, and deficiencies of the offeror.
315.307 Final proposal revisions.
(b) Final proposal revisions are subject to a final evaluation of
price or cost and other salient factors by the contracting officer and
project officer with assistance from a cost/price analyst, and an
evaluation of technical factors by the technical evaluation panel, as
necessary. Proposals may be technically rescored and reranked by the
technical evaluation panel and a technical evaluation report prepared.
To the extent practicable, the evaluation shall be performed by the
same evaluators who reviewed the original proposals.
315.370 Finalization of details with the selected source.
(a) After selection of the successful proposal, finalization of
details with the selected offeror may be conducted if deemed necessary.
However, no factor which could have any effect on the selection process
may be introduced after the common cutoff date for receipt of final
proposal revisions. The finalization process shall not in any way
prejudice the competitive interest or rights of the unsuccessful
offerors. Finalization of details with the selected offeror shall be
restricted to definitizing the final agreement on terms and conditions,
assuming none of these factors were involved in the selection process.
(b) Caution must be exercised by the contracting officer to insure
that the finalization process is not used to change the requirements
contained in the solicitation, nor to make any other changes which
would impact on the source selection decision. Whenever a material
change occurs in the requirements, the competition must be reopened and
all offerors submitting final proposal revisions must be given an
opportunity to resubmit proposals based on the revised requirements.
Whenever there is a question as to whether a change is material, the
contracting officer should obtain the advice of technical personnel and
legal counsel before reopening the competition. Significant changes in
the
[[Page 1362]]
offeror's cost proposal may also necessitate a reopening of competition
if the changes alter the factors involved in the original selection
process.
(c) Should finalization details beyond those specified in paragraph
(a) of this section be required for any reason, discussions must be
reopened with all offerors submitting final proposal revisions.
(d) Upon finalization of details, the contracting officer should
obtain a confirmation letter from the successful offeror which includes
any revisions to the technical proposal, the agreed to price or cost,
and, as applicable, a certificate of current cost or pricing data.
315.371 Contract preparation and award.
(a) The contracting officer must perform the following actions
after finalization details have been completed:
(1) Prepare the negotiation memorandum in accordance with 315.372;
(2) Prepare the contract containing all agreed to terms and
conditions and clauses required by law or regulation;
(3) Include in the contract file the pertinent documents referenced
in FAR 4.803; and
(4) Obtain the appropriate approval of the proposed contract
award(s) in accordance with Subpart 304.71 and contracting activity
procedures.
(b) After receiving the required approvals, the contract should be
transmitted to the prospective contractor for signature. The
prospective contractor must be informed that the contract is not
effective until accepted by the contracting officer.
(c) The contract shall not be issued until the finance office
certifies that the funds are available for obligation.
315.372 Preparation of negotiation memorandum.
The negotiation memorandum or summary of negotiations is a complete
record of all actions leading to award of a contract and is prepared by
the contract negotiator to support the source selection decision
discussed in FAR 15.308. It should be in sufficient detail to explain
and support the rationale, judgments, and authorities upon which all
actions were predicated. The memorandum will document the negotiation
process and reflect the negotiator's actions, skills, and judgments in
concluding a satisfactory agreement for the Government. Negotiation
memorandums shall contain discussion of the following or a statement of
nonapplicability; however, information already contained in the
contract file need not be reiterated. A reference to the document which
contains the required information is acceptable.
(a) Description of articles and services and period of performance.
A description of articles and services, quantity, unit price, total
contract amount, and period of contract performance should be set forth
( if Supplemental Agreement--show previous contract amount as revised,
as well as information with respect to the period of performance).
(b) Acquisition planning. Summarize or reference any acquisition
planning activities that have taken place.
(c) Synopsis of acquisition. A statement as to whether the
acquisition has or has not been publicized in accordance with FAR
Subpart 5.2. A brief statement of explanation should be included with
reference to the specific basis for exemption under the FAR, if
applicable.
(d) Contract type. Provide sufficient detail to support the type of
contractual instrument recommended for the acquisition. If the contract
is a cost-sharing type, explain the essential cost-sharing features.
(e) Extent of competition. The extent to which full and open
competition was solicited and obtained must be discussed. The
discussion shall include the date of solicitation, sources solicited,
and solicitation results. If a late proposal was received, discuss
whether or not the late proposal was evaluated and the rationale for
the decision.
(f) Technical evaluation. Summarize or reference the results
presented in the technical evaluation report.
(g) Business evaluation. Summarize or reference results presented
in the business report.
(h) Competitive range (if applicable). Describe how the zone of
consideration or competitive range was determined and state the
offerors who were included in the competitive range and the ones who
were not.
(i) Cost breakdown and analysis. Include a complete cost breakdown
together with the negotiator's analysis of the estimated cost by
individual cost elements. The negotiator's analysis should contain
information such as:
(1) A comparison of cost factors proposed in the instant case with
actual factors used in earlier contracts, using the same cost centers
of the same supplier or cost centers of other sources having recent
contracts for the same or similar item.
(2) Any pertinent Government-conducted audit of the proposed
contractor's record of any pertinent cost advisory report.
(3) Any pertinent technical evaluation inputs as to necessity,
allocability and reasonableness of labor, material and other direct
expenses.
(4) Any other pertinent information to fully support the basis for
and rationale of the cost analysis.
(5) If the contract is an incentive type, discuss all elements of
profit and fee structure.
(6) A justification of the reasonableness of the proposed
contractor's estimated profit or fixed fee, considering the
requirements of FAR 15.404-4 and HHSAR 315.404-4.
(j) Cost realism. Describe the cost realism analysis performed on
proposals.
(k) Government-furnished property and Government-provided
facilities. With respect to Government-furnished or Government-provided
facilities, equipment, tooling, or other property, include the
following:
(1) Where no property is to be provided, a statement to that
effect.
(2) Where property is to be provided, a full description, the
estimated dollar value, the basis of price comparison with competitors,
and the basis of rental charge, if rental is involved.
(3) Where the furnishing of any property or the extent has not been
determined and is left open for future resolution, a detailed
explanation.
(l) Negotiations. Include a statement as to the date and place
negotiations were conducted, and identify members of both the
Government and contractor negotiating teams by area of responsibility.
Include negotiation details relative to the statement of work, terms
and conditions, and special provisions. The results of cost or price
negotiations must include the information required by FAR 31.109 and
15.406-3. In addition, if cost or pricing data was required to be
submitted and certified, the negotiation record must also contain the
extent to which the contracting officer relied upon the factual cost or
pricing data submitted and used in negotiating the cost or price.
(m) Other considerations. Include coverage of areas such as:
(1) Financial data with respect to a contractor's capacity and
stability.
(2) Determination of contractor responsibility.
(3) Details as to why the method of payment, such as progress
payment, advance payment, etc., is necessary. Also cite any required D
& F's.
(4) Information with respect to obtaining of a certificate of
current cost or pricing data.
[[Page 1363]]
(5) Other required special approvals.
(6) If the contract represents an extension of previous work, the
status of funds and performance under the prior contract(s) should be
reflected. Also, a determination should be made that the Government has
obtained enough actual or potential value from the work previously
performed to warrant continuation with the same contractor. (Project
officer should furnish the necessary information.)
(7) If the contract was awarded by full and open competition, state
where the unsuccessful offerors' proposals are filed.
(8) State that equal opportunity provisions of the proposed
contract have been explained to the contractor, and it is aware of its
responsibilities. Also state whether or not a clearance is required.
(9) If the contract is for services, a statement must be made, in
accordance with FAR 37.103, that the services to be acquired are
nonpersonal in nature.
(n) Terms and conditions. Identify the general and special clauses
and conditions that are contained in the contract, such as option
arrangements, incremental funding, anticipatory costs, deviations from
standard clauses, etc. The basis and rationale for inclusion of any
special terms and conditions must be stated and, where applicable, the
document which granted approval for its use identified.
(o) Recommendation. A brief statement setting forth the
recommendations for award.
(p) Signature. The memorandum must be signed by the contract
negotiator who prepared the memorandum.
Subpart 315.4--Contract Pricing
315.404 Proposal analysis.
315.404-2 Information to support proposal analysis.
(a)(2) When some or all information sufficient to determine the
reasonableness of the proposed cost or price is already available or
can be obtained by phone from the cognizant audit agency, contracting
officers may request less-than-complete field pricing support
(specifying in the request the information needed) or may waive in
writing the requirement for audit and field pricing support by
documenting the file to indicate what information is to be used instead
of the audit report and the field pricing report.
(3) When initiating audit and field pricing support, the
contracting officer shall do so by sending a request to the cognizant
administrative contracting officer (ACO), with an information copy to
the cognizant audit office. When field pricing support is not
available, the contracting officer shall initiate an audit by sending,
in accordance with agency procedures, two (2) copies of the request to
the OIG Office of Audits' Regional Audit Director. In both cases, the
contracting officer shall, in the request:
(i) Prescribe the extent of the support needed;
(ii) State the specific areas for which input is required;
(iii) Include the information necessary to perform the review (such
as the offeror's proposal and the applicable portions of the
solicitation, particularly those describing requirements and delivery
schedules);
(iv) Provide the complete address of the location of the offeror's
financial records that support the proposal;
(v) Identify the office having audit responsibility if other than
the HHS Regional Audit Office; and
(vi) Specify a due date for receipt of a verbal report to be
followed by a written audit report. (If the time available is not
adequate to permit satisfactory coverage of the proposal, the auditor
shall so advise the contracting officer and indicate the additional
time needed.) One copy of the audit request letter that was submitted
to the Regional Audit Director and a complete copy of the contract
price proposal shall be submitted to OIG/OA/DAC. Whenever an audit
review has been conducted by the Office of Audits, two (2) copies of
the memorandum of negotiation shall be forwarded to OIG/OA/DAC by the
contracting officer.
315.404-4 Profit.
(b) Policy. (1) The structured approach for determining profit or
fee (hereafter referred to as profit) provides contracting officers
with a technique that will ensure consideration of the relative value
of the appropriate profit factors described in 315.404-4(d) in the
establishment of a profit objective for the conduct of negotiations.
The contracting officer's analysis of these profit factors is based on
information available to him/her prior to negotiations. The information
is furnished in proposals, audit data, assessment reports, preaward
surveys and the like. The structured approach also provides a basis for
documentation of this objective, including an explanation of any
significant departure from this objective in reaching an agreement. The
extent of documentation should be directly related to the dollar value
and complexity of the proposed acquisition. Additionally, the
negotiation process does not require agreement on either estimated cost
elements or profit elements. The profit objective is a part of an
overall negotiation objective which, as a going-in objective, bears a
distinct relationship to the cost objective and any proposed sharing
arrangement. Since profit is merely one of several interrelated
variables, the Government negotiator generally should not complete the
profit negotiation without simultaneously agreeing on the other
variables. Specific agreement on the exact weights or values of the
individual profit factors is not required and should not be attempted.
(ii) The profit-analysis factors set forth at FAR 15.404-4(d) shall
be used for establishing profit objectives under the following listed
circumstances. Generally, it is expected that this method will be
supported in a manner similar to that used in the structured approach
(profit factor breakdown and documentation of the profit objective);
however, factors within FAR 15.404-4(d) considered inapplicable to the
acquisition will be excluded from the profit objective.
(A) Contracts not expected to exceed $100,000;
(B) Architect-engineer contracts;
(C) Management contracts for operations and/or maintenance of
Government facilities;
(D) Construction contracts;
(E) Contracts primarily requiring delivery of material supplies by
subcontractors;
(F) Termination settlements; and
(G) Cost-plus-award-fee contracts (However, contracting officers
may find it advantageous to perform a structured profit analysis as an
aid in arriving at an appropriate fee arrangement). Other exceptions
may be made in the negotiation of contracts having unusual pricing
situations, but shall be justified in writing by the contracting
officer in situations where the structured approach is determined to be
unsuitable.
(c) Contracting officer responsibilities. A profit objective is
that part of the estimated contract price objective or value which, in
the judgment of the contracting officer, constitutes an appropriate
amount of profit for the acquisition being considered. This objective
should realistically reflect the total overall task to be performed and
the requirements placed on the contractor. Development of a profit
objective should not begin until a thorough review of proposed contract
work has been made; a review of all available knowledge regarding the
contractor pursuant to FAR Subpart 9.1, including audit data, preaward
survey reports and financial statements, as appropriate, has been
conducted; and an
[[Page 1364]]
analysis of the contractor's cost estimate and comparison with the
Government's estimate or projection of cost has been made.
(d) Profit--analysis factors--(1) Common factors. The following
factors shall be considered in all cases in which profit is to be
negotiated. The weight ranges listed after each factor shall be used in
all instances where the structured approach is used.
------------------------------------------------------------------------
Profit factors Weight ranges (percent)
------------------------------------------------------------------------
Contractor effort:
Material acquisition.................. 1 to 5.
Direct labor.......................... 4 to 15.
Overhead.............................. 4 to 9.
General management (G&A).............. 4 to 8.
Other costs........................... 1 to 5.
Other factors:
Cost risk............................. 0 to 7.
Investment............................ -2 to +2.
Performance........................... -1 to +1.
Socioeconomic programs................ -.5 to +.5.
Special situations....................
------------------------------------------------------------------------
(i) Under the structured approach, the contracting officer shall
first measure ``Contractor Effort'' by the assignment of a profit
percentage within the designated weight ranges to each element of
contract cost recognized by the contracting officer. The amount
calculated for the cost of money for facilities capital is not to be
included for the computation of profit as part of the cost base. The
suggested categories under ``Contractor Effort'' are for reference
purposes only. Often individual proposals will be in a different
format, but since these categories are broad and basic, they provide
sufficient guidance to evaluate all other items of cost.
(ii) After computing a total dollar profit for ``Contractor
Effort,'' the contracting officer shall then calculate the specific
profit dollars assigned for cost risk, investment, performance,
socioeconomic programs, and special situations. This is accomplished by
multiplying the total Government Cost Objective, exclusive of any cost
of money for facilities capital, by the specific weight assigned to the
elements within the ``Other Factors'' category. Form HHS-674,
Structured Approach Profit/Fee Objective, should be used, as
appropriate, to facilitate the calculation of this profit objective.
Form HHS-674 is illustrated in 353.370-674.
(iii) In making a judgment of the value of each factor, the
contracting officer should be governed by the definition, description,
and purpose of the factors together with considerations for evaluating
them.
(iv) The structured approach was designed for arriving at profit
objectives for other than nonprofit organizations. However, if
appropriate adjustments are made to reflect differences between profit
and nonprofit organizations, the structured approach can be used as a
basis for arriving at profit objectives for nonprofit organizations.
Therefore, the structured approach, as modified in paragraph
(d)(1)(iv)(B) of this section, shall be used to establish profit
objectives for nonprofit organizations.
(A) For purposes of this section, nonprofit organizations are
defined as those business entities organized and operated exclusively
for charitable, scientific, or educational purposes, no part of the net
earnings of which inure to the benefit of any private shareholder or
individual, and which are exempt from Federal income taxation under
Section 501 of the Internal Revenue Code.
(B) For contracts with nonprofit organizations where profit is
involved, an adjustment of up to 3 percentage points will be subtracted
from the total profit objective percentage. In developing this
adjustment, it will be necessary to consider the following factors;
(1) Tax position benefits;
(2) Granting of financing through advance payments; and
(3) Other pertinent factors which may work to either the advantage
or disadvantage of the contractor in its position as a nonprofit
organization.
(2) Contractor effort. Contractor effort is a measure of how much
the contractor is expected to contribute to the overall effort
necessary to meet the contract performance requirement in an efficient
manner. This factor, which is apart from the contractor's
responsibility for contract performance, takes into account what
resources are necessary and what the contractor must do to accomplish a
conversion of ideas and material into the final service or product
called for in the contract. This is a recognition that within a given
performance output, or within a given sales dollar figure, necessary
efforts on the part of individual contractors can vary widely in both
value and quantity, and that the profit objective should reflect the
extent and nature of the contractor's contribution to total
performance. A major consideration, particularly in connection with
experimental, developmental, or research work, is the difficulty or
complexity of the work to be performed, and the unusual demands of the
contract, such as whether the project involves a new approach unrelated
to existing technology and/or equipment or only refinements to these
items. The evaluation of this factor requires an analysis of the cost
content of the proposed contract as follows:
(i) Material acquisition. (Subcontracted items, purchased parts,
and other material.) Analysis of these cost items shall include an
evaluation of the managerial and technical effort necessary to obtain
the required subcontracted items, purchased parts, material or
services. The contracting officer shall determine whether the
contractor will obtain the items or services by routine order from
readily available sources or by detailed subcontracts for which the
prime contractor will be required to develop complex specifications.
Consideration shall also be given to the managerial and technical
efforts necessary for the prime contractor to select subcontractors and
to perform subcontract administration functions. In application of this
criterion, it should be recognized that the contribution of the prime
contractor to its purchasing program may be substantial. Normally, the
lowest unadjusted weight for direct material is 2 percent. A weighting
of less than 2 percent would be appropriate only in unusual
circumstances when there is a minimal contribution by the contractor.
(ii) Direct Labor. (Professional, service, manufacturing and other
labor). Analysis of the various labor categories of the cost content of
the contract should include evaluation of the comparative quality and
quantity of professional and semiprofessional talents, manufacturing
and service skills, and experience to be employed. In evaluating
professional and semiprofessional labor for the purpose of assigning
profit dollars, consideration should be given to the amount of notable
scientific talent or unusual or scarce talent needed in contrast to
nonprofessional effort. The assessment should consider the contribution
this talent will provide toward the achievement of contract objectives.
Since nonprofessional labor is relatively plentiful and rather easily
obtained by the contractor and is less critical to the successful
performance of contract objectives, it cannot be weighted nearly as
high as professional or semiprofessional labor. Service contract labor
should be evaluated in a like manner by assigning higher weights to
engineering or professional type skills required for contract
performance. Similarly, the variety of manufacturing and other
categories of labor skills required and the contractor's manpower
resources for meeting these requirements should be considered. For
purposes of evaluation, categories of labor (i.e., quality control,
receiving and
[[Page 1365]]
inspection, etc.) which do not fall within the definition for
professional, service or manufacturing labor may be categorized as
appropriate. However, the same evaluation considerations as outlined
above will be applied.
(iii) Overhead and general management (G&A). (A) Analysis of these
overhead items of cost should include the evaluation of the makeup of
these expenses and how much they contribute to contract performance. To
the extent practicable, analysis should include a determination of the
amount of labor within these overhead pools and how this labor should
be treated if it were considered as direct labor under the contract.
The allocable labor elements should be given the same profit
considerations that they would receive if they were treated as direct
labor. The other elements of these overhead pools should be evaluated
to determine whether they are routine expenses, such as utilities and
maintenance, and hence given lesser profit consideration, or whether
they are significant contributing elements. The composite of the
individual determinations in relation to the elements of the overhead
pools will be the profit consideration given the pools as a whole. The
procedure for assigning relative values to these overhead expenses
differs from the method used in assigning values of the direct labor.
The upper and lower limits assignable to the direct labor are absolute.
In the case of overhead expenses, individual expenses may be assigned
values outside the range as long as the composite ratio is within the
range.
(B) It is not necessary that the contractor's accounting system
break down overhead expenses within the classifications of research
overhead, other overhead pools, and general administrative expenses,
unless dictated otherwise by Cost Accounting Standards (CAS). The
contractor whose accounting system reflects only one overhead rate on
all direct labor need not change its system (if CAS exempt) to
correspond with the above classifications. The contracting officer, in
an evaluation of such a contractor's overhead rate, could break out the
applicable sections of the composite rate which could be classified as
research overhead, other overhead pools, and general and administrative
expenses, and follow the appropriate evaluation technique.
(C) Management problems surface in various degrees and the
management expertise exercised to solve them should be considered as an
element of profit. For example, a contract for a new program for
research or an item which is on the cutting edge of the state of the
art will cause more problems and require more managerial time and
abilities of a higher order than a follow-on contract. If new contracts
create more problems and require a higher profit weight, follow-ons
should be adjusted downward because many of the problems should have
been solved. In any event, an evaluation should be made of the
underlying managerial effort involved on a case-by-case basis.
(D) It may not be necessary for the contracting officer to make a
separate profit evaluation of overhead expenses in connection with each
acquisition action for substantially the same project with the same
contractor. Where an analysis of the profit weight to be assigned to
the overhead pool has been made, that weight assigned may be used for
future acquisitions with the same contractor until there is a change in
the cost composition of the overhead pool or the contract
circumstances, or the factors discussed in paragraph (d)(2)(iii)(C) of
this section are involved.
(iv) Other costs. Analysis of this factor should include all other
direct costs associated with contractor performance (e.g., travel and
relocation, direct support, and consultants). Analysis of these items
of cost should include, the significance of the cost of contract
performance, nature of the cost, and how much they contribute to
contract performance. Normally, travel costs require minimal
administrative effort by the contractor and, therefore, usually receive
a weight no greater than 1%. Also, the contractor may designate
individuals as ``consultants'' but in reality these individuals may be
obtained by the contractor to supplement its workforce in the
performance of routine duties required by contract. These costs would
normally receive a minimum weight. However, there will be instances
when the contractor may be required to locate and obtain the services
of consultants having expertise in fields such as medicine or human
services. In these instances, the contractor will be required to expend
greater managerial and technical effort to obtain these services and,
consequently, the costs should receive a much greater weight.
(3) Other factors--(i) Contract cost risk. The contract type
employed basically determines the degree of cost risk assumed by the
contractor. For example, where a portion of the risk has been shifted
to the Government through cost-reimbursement provisions, unusual
contingency provisions, or other risk-reducing measures, the amount of
profit should be less than where the contractor assumes all the risk.
(A) In developing the prenegotiation profit objective, the
contracting officer will need to consider the type of contract
anticipated to be negotiated and the contractor risk associated
therewith when selecting the position in the weight range for profit
that is appropriate for the risk to be borne by the contractor. This
factor should be one of the most important in arriving at
prenegotiation profit objective. Evaluation of this risk requires a
determination of the degree of cost responsibility the contractor
assumes; the reliability of the cost estimates in relation to the task
assumed; and the complexity of the task assumed by the contractor. This
factor is specifically limited to the risk of contract costs. Thus,
risks on the part of the contractor such as reputation, losing a
commercial market, risk of losing potential profits in other fields, or
any risk which falls on the contracting office, such as the risk of not
acquiring a satisfactory report, are not within the scope of this
factor.
(B) The first and basic determination of the degree of cost
responsibility assumed by the contractor is related to the sharing of
total risk of contract cost by the Government and the contractor
through the selection of contract type. The extremes are a cost-plus-a-
fixed-fee contract requiring the contractor to use its best efforts to
perform a task and a firm fixed-price contract for a service or a
complex item. A cost-plus-a-fixed-fee contract would reflect a minimum
assumption of cost responsibility, whereas a firm-fixed-price contract
would reflect a complete assumption of cost responsibility. Where
proper contract selection has been made, the regard for risk by
contract type would usually fall into the following percentage ranges:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Cost-reimbursement type contracts............................ 0-3
Fixed-price type contracts................................... 2-7
------------------------------------------------------------------------
(C) The second determination is that of the reliability of the cost
estimates. Sound price negotiation requires well-defined contract
objectives and reliable cost estimates. Prior experience assists the
contractor in preparing reliable cost estimates on new acquisitions for
similar related efforts. An excessive cost estimate reduces the
possibility that the cost of performance will exceed the contract
price, thereby reducing the contractor's assumption of contract cost
risk.
(D) The third determination is that of the difficulty of the
contractor's task.
[[Page 1366]]
The contractor's task can be difficult or easy, regardless of the type
of contract.
(E) Contractors are likely to assume greater cost risk only if
contracting officers objectively analyze the risk incident to proposed
contracts and are willing to compensate contractors for it. Generally,
a cost-plus-fixed fee contract will not justify a reward for risk in
excess of 0.5 percent, nor will a firm fixed-price contract justify a
reward of less than the minimum in the structured approach. Where
proper contract-type selection has been made, the reward for risk, by
contract type, will usually fall into the following percentage ranges:
(1) Type of contract and percentage ranges for profit objectives
developed by using the structured approach for research and development
and manufacturing contracts:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Cost-plus-fixed fee........................ 0 to 0.5.
Cost-plus-incentive fee:
With cost incentive only............... 1 to 2.
With multiple incentives............... 1.5 to 3.
Fixed-price-incentive:
With cost incentive only............... 2 to 4.
With multiple incentives............... 3 to 5.
Prospective price redetermination...... 3 to 5.
Firm fixed-price....................... 5 to 7.
------------------------------------------------------------------------
(2) Type of contract and percentage ranges for profit objectives
developed by using the structured approach for service contracts:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Cost-plus-fixed-fee........................ 0 to 0.5.
Cost-plus-incentive fee.................... 1 to 2
Fixed-price incentive...................... 2 to 3.
Firm fixed-price........................... 3 to 4.
------------------------------------------------------------------------
(F) These ranges may not be appropriate for all acquisitions. For
instance, a fixed-price-incentive contract that is closely priced with
a low ceiling price and high incentive share may be tantamount to a
firm fixed-price contract. In this situation, the contracting officer
may determine that a basis exists for high confidence in the
reasonableness of the estimate and that little opportunity exists for
cost reduction without extraordinary efforts. On the other hand, a
contract with a high ceiling and low incentive formula can be
considered to contain cost-plus incentive-fee contract features. In
this situation, the contracting officer may determine that the
Government is retaining much of the contract cost responsibility and
that the risk assumed by the contractor is minimal. Similarly, if a
cost-plus-incentive-fee contract includes an unlimited downward
(negative) fee adjustment on cost control, it could be comparable to a
fixed-price-incentive contract. In such a pricing environment, the
contracting officer may determine that the Government has transferred a
greater amount of cost responsibility to the contractor than is typical
under a normal cost-plus-incentive-fee contract.
(G) The contractor's subcontracting program may have a significant
impact on the contractor's acceptance or risk under a contract form. It
could cause risk to increase or decrease in terms of both cost and
performance. This consideration should be a part of the contracting
officer's overall evaluation in selecting a factor to apply for cost
risk. It may be determined, for instance, that the prime contractor has
effectively transferred real cost risk to a subcontractor and the
contract cost risk evaluation may, as a result, be below the range
which would otherwise apply for the contract type being proposed. The
contract cost risk evaluation should not be lowered, however, merely on
the basis that a substantial portion of the contract costs represents
subcontracts without any substantial transfer of contractor's risk.
(H) In making a contract cost risk evaluation in an acquisition
action that involves definitization of a letter contract, unpriced
change orders, and unpriced orders under basic ordering agreements,
consideration should be given to the effect on total contract cost risk
as a result of having partial performance before definitization. Under
some circumstances it may be reasoned that the total amount of cost
risk has been effectively reduced. Under other circumstances it may be
apparent that the contractor's cost risk remained substantially
unchanged. To be equitable, the determination of profit weight for
application to the total of all recognized costs, both those incurred
and those yet to be expended, must be made with consideration to all
attendant circumstances--not just the portion of costs incurred or
percentage of work completed prior to definitization.
(I) Time and material and labor hour contracts will be considered
to be cost-plus-a-fixed-fee contracts for the purpose of establishing
profit weights unless otherwise exempt under 315.404-4(b)(ii) in the
evaluation of the contractor's assumption of contract cost risk.
(ii) Investment. HHS encourages its contractors to perform their
contracts with the minimum of financial, facilities, or other
assistance from the Government. As such, it is the purpose of this
factor to encourage the contractor to acquire and use its own resources
to the maximum extent possible. The evaluation of this factor should
include an analysis of the following:
(A) Facilities. (Including equipment). To evaluate how this factor
contributes to the profit objective requires knowledge of the level of
facilities utilization needed for contract performance, the source and
financing of the required facilities, and the overall cost
effectiveness of the facilities offered. Contractors who furnish their
own facilities which significantly contribute to lower total contract
costs should be provided with additional profit. On the other hand,
contractors who rely on the Government to provide or finance needed
facilities should receive a corresponding reduction in profit. Cases
between the above examples should be evaluated on their merits with
either positive or negative adjustments, as appropriate, in profit
being made. However, where a highly facilitized contractor is to
perform a contract which does not benefit from this facilitization or
where a contractor's use of its facilities has a minimum cost impact on
the contract, profit need not be adjusted. When applicable, the
prospective contractor's computation of facilities capital cost of
money for pricing purposed under CAS 414 can help the contracting
officer identify the level of facilities investment to be employed in
contract performance.
(B) Payments. In analyzing this factor, consideration should be
given to the frequency of payments by the Government to the contractor.
The key to this weighting is to give proper consideration to the impact
the contract will have on the contractor's cash flow. Generally,
negative consideration should be given for advance payments and
payments more frequent than monthly with maximum reduction being given
as the contractor's working capital approaches zero. Positive
consideration should be given for payments less frequent than monthly
with additional consideration given for a capital turn-over rate on the
contract which is less than the contractor's or the industry's normal
capital turn-over rate.
(iii) Performance. (Cost-control and other past accomplishments.)
The contractor's past performance should be evaluated in such areas as
quality of service or product, meeting performance schedules,
efficiency in cost control (including need for and reasonableness of
cost incurred), accuracy and reliability of previous cost estimates,
degree of cooperation by the contractor (both business and technical),
timely processing of changes and compliance with other contractual
provisions, and management of subcontract programs. Where a contractor
has consistently
[[Page 1367]]
achieved excellent results in the foregoing areas in comparison with
other contractors in similar circumstances, this performance merits a
proportionately greater opportunity for profit. Conversely, a poor
record in this regard should be reflected in determining what
constitutes a fair and reasonable profit.
(iv) Federal socioeconomic programs. This factor, which may apply
to special circumstances or particular acquisitions, relates to the
extent of a contractor's successful participation in Government
sponsored programs such as small business, small disadvantaged
business, women-owned small business, and energy conservation efforts.
The contractor's policies and procedures which energetically support
Government socioeconomic programs and achieve successful results should
be given positive considerations. Conversely, failure or unwillingness
on the part of the contractor to support Government socioeconomic
programs should be viewed as evidence of poor performance for the
purpose of establishing a profit objective.
(v) Special situations--(A) Inventive and developmental
contributions. The extent and nature of contractor-initiated and
financed independent development should be considered in developing the
profit objective, provided that the contracting officer has made a
determination that the effort will benefit the contract. The importance
of the development in furthering health and human services purposes,
the demonstrable initiative in determining the need and application of
the development, the extent of the contractor's cost risk, and whether
the development cost was recovered directly or indirectly from
Government sources should be weighed.
(B) Unusual pricing agreements. Occasionally, unusual contract
pricing arrangements are made with the contractor wherein it agrees to
cost ceilings, e.g., a ceiling on overhead rates for conditions other
than those discussed at FAR 42.707. In these circumstances, the
contractor should receive favorable consideration in developing the
profit objective.
(C) Negative factors. Special situations need not be limited to
those which only increase profit levels. A negative consideration may
be appropriate when the contractor is expected to obtain spin-off-
benefits as a direct result of the contract (e.g., products or services
with commercial application).
(4) Facilities capital cost of money. When facilities capital cost
of money (cost of capital committed to facilities) is included as an
item of cost in the contractor's proposal, a reduction in the profit
objective shall be made in an amount equal to the amount of facilities
capital cost of money allowed in accordance with the Facilities Capital
Cost-of Money Cost Principal. If the contractor does not propose this
cost, a provision must be inserted in the contract that facilities
capital cost of money is not an allowable cost.
Subpart 315.6--Unsolicited Proposals
315.605 Content of unsolicited proposals.
(d) Certification by offeror--To ensure against contracts between
Department employees and prospective offerors which would exceed the
limits of advance guidance set forth in FAR 15.604 resulting in an
unfair advantage to an offeror, the contracting officer shall ensure
that the following certification is furnished to the prospective
offeror and the executed certification is included as part of the
resultant unsolicited proposal:
Unsolicited Proposal
Certification by Offeror
This is to certify, to the best of my knowledge and belief,
that:
(a) This proposal has not been prepared under Government
supervision.
(b) The methods and approaches stated in the proposal were
developed by this offeror.
(c) Any contact with employees of the Department of Health and
Human Services has been within the limits of appropriate advance
guidance set forth in FAR 15.604.
(d) No prior commitments were received from departmental
employees regarding acceptance of this proposal.
Date:------------------------------------------------------------------
Organization:----------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
(This certification shall be signed by a responsible official of
the proposing organization or a person authorized to contractually
obligate the organization.)
315.606 Agency procedures.
(a) The HCA is responsible for establishing procedures to comply
with FAR 15.606(a).
(b) The HCA or his/her designee shall be the point of contract for
coordinating the receipt and handling of unsolicited proposals.
315.606-1 Receipt and initial review.
(d) An unsolicited proposal shall not be refused consideration
merely because it was initially submitted as a grant application.
However, contracts shall not be awarded on the basis of unsolicited
proposals which have been rejected for grant support on the grounds
that they lack scientific merit.
315.609 Limited use of data.
The legend, Use and Disclosure of Data, prescribed in FAR 15.609(a)
is to be used by the offeror to restrict the use of data for evaluation
purposes only. However, data contained within the unsolicited proposal
may have to be disclosed as a result of a request submitted pursuant to
the Freedom of Information Act. Because of this possibility, the
following notice shall be furnished to all prospective offerors of
unsolicited proposals whenever the legend is provided in accordance
with FAR 15.604(a) (7):
The Government will attempt to comply with the ``Use and
Disclosure of Data'' legend. However, the Government may not be able
to withhold a record (data, document, etc.) nor deny access to a
record requested by an individual (the public) when an obligation is
imposed on the Government under the Freedom of Information Act, 5
U.S.C. 552, as amended. The Government determination to withhold or
disclose a record will be based upon the particular circumstances
involving the record in question and whether the record may be
exempted from disclosure under the Freedom of Information Act.
Records which the offeror considers to be trade secrets and
commercial or financial information and privileged or confidential
must be identified by the offeror as indicated in the referenced
legend.
PART 316--TYPES OF CONTRACTS
Subpart 316.3--Cost-Reimbursement Contracts
Sec.
316.307 Contract clauses.
Subpart 316.6--Time-and-Materials, Labor-Hour, and Letter Contracts
316.603 Letter contracts.
316.603-3 Limitations.
316.603-70 Information to be furnished when requesting authority to
issue a letter contract.
316.603-71 Approval for modifications to letter contracts.
Subpart 316.7--Agreements
316.770 Unauthorized types of agreements.
316.770-1 Letter of intent.
316.770-2 Memorandums of understanding.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 316.3--Cost-Reimbursement Contracts
316.307 Contract clauses.
(a) If the contract is with a hospital (profit or nonprofit),
modify the ``Allowable Cost and Payment'' clause at FAR 52.216-7 by
deleting from paragraph (a) the words ``Subpart 31.2 of the Federal
Acquisition Regulation (FAR)'' and substituting ``45 CFR Part 74
Appendix E.''
(j) The contracting officer shall insert the clause at 352.216-72,
Additional
[[Page 1368]]
Cost Principles, in all solicitations and resultant cost-reimbursement
contracts.
Subpart 316.6--Time-and-Materials, Labor-Hour, and Letter Contracts
316.603 Letter contracts.
316.603-3 Limitations.
An official one level above the contracting officer shall execute
the prescribed written statement.
316.603-70 Information to be furnished when requesting authority to
issue a letter contract.
The following information should be included by the contracting
officer in any memorandum requesting approval to issue a letter
contract:
(a) Name and address of proposed contractor.
(b) Location where contract is to be performed.
(c) Contract number, including modification number, if possible.
(d) Brief description of work and services to be performed.
(e) Performance or delivery schedule.
(f) Amount of letter contract.
(g) Estimated total amount of definitized contract.
(h) Type of definitive contract to be executed (fixed price, cost-
reimbursement, etc.)
(i) Statement of the necessity and advantage to the Government of
the use of the proposed letter contract.
(j) Statement of percentage of the estimated cost that the
obligation of funds represents. In rare instances where the obligation
represents 50 percent or more of the proposed estimated cost of the
acquisition, a justification for that obligation must be included which
would indicate the basis and necessity for the obligation (e.g., the
contractor requires a large initial outlay of funds for major
subcontract awards or an extensive purchase of materials to meet an
urgent delivery requirement). In every case, documentation must assure
that the amount to be obligated is not in excess of an amount
reasonably required to perform the work.
(k) Period of effectiveness of a proposed letter contract. If more
than 180 days, complete justification must be given.
(l) Statement of any substantive matters that need to be resolved.
316.603-71 Approval for modifications to letter contracts.
All letter contract modifications (amendments) must be approved one
level above the contracting officer. Request for authority to issue
letter contract modifications shall be processed in the same manner as
requests for authority to issue letter contracts and shall include the
following:
(a) Name and address of the contractor.
(b) Description of work and services.
(c) Date original request was approved and indicate approving
official.
(d) Letter contract number and date issued.
(e) Complete justification as to why the letter contract cannot be
definitized at this time.
(f) Complete justification as to why the level of funding must be
increased.
(g) Complete justification as to why the period of effectiveness is
increased beyond 180 days, if applicable.
(h) If the funding of the letter contract is to be increased to
more than 50 percent of the estimated cost of the acquisition, the
information required by 316.603-70(j) must be included.
Subpart 316.7--Agreements
316.770 Unauthorized types of agreements.
316.770-1 Letters of intent.
A letter of intent is an informal unauthorized agreement between
the Government and a prospective contractor which indicates that
products or services will be produced after completion of funding and/
or other contractual formalities. Letters of intent are often solicited
by prospective contractors or may be originated by Government
personnel. Letters of intent are not authorized by the FAR and are
prohibited for use by Department personnel.
316.770-2 Memorandums of understanding.
A ``memorandum of understanding'' is an unauthorized agreement,
usually drafted during the course of negotiations, to modify mandatory
FAR and HHSAR provisions in such a manner as to make them more
acceptable to a prospective contractor. It may be used to bind the
contracting officer in attempting to exercise rights given the
Government under the contract, or may contain other matters directly
contrary to the language of the solicitation or prospective contractual
document. Use of memorandums of understanding is not authorized. Any
change in a solicitation or contract shall be made by amendment or
modification to that document. When a change to a prescribed contract
clause is considered necessary, a deviation shall be requested.
PART 317--SPECIAL CONTRACTING METHODS
Subpart 317.2--Options
Sec.
317.201 Definition.
Subpart 317.71--Supply and Service Acquisitions Under the Government
Employees Training Act.
317.7100 Scope of subpart.
317.7101 Applicable regulations.
317.7102 Acquisition of training.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 317.2--Options
317.201 Definitions.
An option must:
(a) Identify the supplies or services as a discrete option quantity
in addition to the basic quantity of supplies or services to be
delivered under the initial contract award;
(b) Establish a price or specify a method of calculation which will
make the price certain;
(c) Be agreed to and included in the initial contract award; and
(d) Permit the Government the right to exercise the option
unilaterally.
Subpart 317.71--Supply and Service Acquisitions Under the
Government Employees Training Act
317.7100 Scope of subpart.
This subpart provides alternate methods for obtaining training
under the Government Employees Training Act (GETA), 5 U.S.C. Chapter
41.
317.7101 Applicable regulations.
Basic policy, standards, and delegations of authority to approve
training are contained in HHS Personnel Manual Instruction 410-1.
317.7102 Acquisition of training.
(a) Off-the-shelf training, whether for individuals or for groups
of employees, shall be acquired under the GETA by officials delegated
authority in HHS Transmittal 95.5, Personnel Manual (3/30/95).
(b) Training must be acquired through the contracting office if
there are costs for training course development or for modification of
off-the-shelf training courses.
PART 319--SMALL BUSINESS PROGRAMS
Subpart 319.2--Policies
Sec.
319.201 General policy.
[[Page 1369]]
Subpart 319.5--Set-Asides for Small Business
319.501 General.
319.505 Rejecting Small Business Administration recommendations.
319.506 Withdrawing or modifying set-asides.
Subpart 319.7--Subcontracting with Small Business, Small Disadvantaged
Business and Women-Owned Small Business Concerns
319.705 Responsibilities of the contracting officer under the
subcontracting assistance program.
319.705-5 Awards involving subcontracting plans.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 319.2--Policies
319.201 General policy.
(b) The functional management responsibilities for the Department's
small, small disadvantaged, and women-owned small business programs are
delegated to the Director of the Office of Small and Disadvantaged
Business Utilization (OSDBU).
(d) The Head of each OPDIV shall appoint a qualified full-time
small business specialist (SBS) in the following activities:
Administration for Children and Families (ACF), Health Care Financing
Administration (HCFA), Substance Abuse and Mental Health Services
Administration (SAMHSA), Food and Drug Administration (FDA), Health
Resources and Services Administration (HRSA), Indian Health Service
(IHS), National Institutes of Health (NIH), Centers for Disease Control
and Prevention (CDCP), and Program Support Center (PSC). A SBS shall
also be appointed for the Office of the Secretary (OS). As deemed
necessary, additional small business specialists may be appointed in
larger contracting activities.
(1) When the volume of contracting does not warrant assignment of a
full-time SBS, an individual shall be appointed as the specialist on a
part-time basis. The responsibilities of this assignment shall take
precedence over other responsibilities. The specialist shall be
responsible directly to the appointing authority and shall be at an
organizational level outside the direct acquisition chain of command,
i.e., should report directly to the head of the contracting activity
(HCA), where appropriate.
(2) The Director, OSDBU will exercise functional management
authority over small business specialists regarding small, small
disadvantaged, and women-owned small business programs. Appointments of
SBS's shall only be made after consultation with the Director, OSDBU. A
copy of each appointment and termination of appointment of specialists
shall be forwarded to the Director, OSDBU.
Subpart 319.5--Set-Asides for Small Business
319.501 General.
(c) Prior to the contracting officer's review, the SBS shall review
each proposed acquisition to determine the feasibility of recommending
a small business set-aside. The SBS's recommendation shall be entered
on Form HHS-653, Small Business Set Aside Review Form, with the reasons
for the type of set-aside recommended, or the reasons for not
recommending a set-aside, and provided to the contracting officer. Upon
receipt of the Form HHS-653, the contracting officer shall promptly
concur or nonconcur with the SBS's recommendation. The contracting
officer will make the final determination as to whether the proposed
acquisition will be set-aside or not. If the contracting officer
approves the SBS's set-aside recommendation, the proposed acquisition
will be set-aside as specified. However, if the contracting officer
disapproves the SBS's set-aside recommendation, the reasons must be
documented on the Form HHS-653, and the form signed. (See 319.505 for
options available to the SBS regarding the contracting officer's
disapproval of a set-aside recommendation.) In all cases, the completed
Form HHS-653 is to be retained by the contracting officer and placed in
the contract file.
319.505 Rejecting Small Business Administration recommendations.
(a) If the contracting officer rejects the SBS's recommendation for
a set-aside and an SBA procurement center representative (PCR) is not
assigned or available, the SBS may appeal, in writing, to the head of
the contracting activity (HCA). The SBS shall provide the HCA all the
pertinent information concerning the set-aside disagreement, and the
HCA shall respond in writing within seven working days. The HCA's
decision is final and not appealable. The decision by the HCA shall be
attached to the Form HHS-653 and placed in the contract file. After
receipt of a final decision by the HCA, and if the decision approves
the action of the contracting officer, the SBS shall forward, for
information and management purposes, complete documentation of the case
to the OSDBU Director. Documentation transmitted shall include, as a
minimum, a copy of the appeal memorandum submitted to the HCA, a copy
of the IFB or RFP, a list of proposed sources, a copy of the Form HHS-
653 and attachments completed by the SBS and the contracting officer, a
copy of the HCA's decision, and all other written material considered
by the HCA in arriving at the decision. The SBS's transmittal
memorandum shall contain an affirmative statement that the attachments
constitute the complete file reviewed and considered by the HCA in
making the final decision. If an SBA PCR is assigned or available and
the SBS refers the case to that person, the SBA PCR may either concur
with the decision of the contracting officer not to set-aside the
proposed acquisition or recommend to the contracting officer that it be
set-aside. For the SBA PCR to make a comprehensive review, at least the
following should be provided as attachments to the Form HHS-653: the
statement of work, evaluation criteria, Government cost estimate,
source list including size of firms, and a copy of any justification
for other than small business considerations that may be applicable.
Once the case has been referred to the SBA PCR, no further appeal
action shall be taken by the SBS. (Refer to FAR 19.505 for the
procedures available to the SBA PCR if the contracting officer rejects
the set-aside recommendation.)
319.506 Withdrawing or modifying set-asides.
(d) Immediately upon notice from the contracting officer, the SBS
shall provide telephone notification regarding all set-aside
withdrawals to the OSDBU Director.
Subpart 319.7--Subcontracting with Small Business, Small
Disadvantaged Business and Women-Owned Small Business Concerns
319.705 Responsibilities of the contracting officer under the
subcontracting assistance program.
319.705-5 Awards involving subcontracting plans.
(a)(3) The SBA PCR shall be allowed a period of one to five working
days to review the contract award package, depending upon the
circumstances and complexity of the individual acquisition.
PART 323--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-
FREE WORKPLACE
Subpart 323.70--Safety and Health
Sec.
323.7000 Scope of subpart.
323.7001 Policy.
323.7002 Actions required.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
[[Page 1370]]
Subpart 323.70--Safety and Health
323.7000 Scope of subpart.
This subpart prescribes the use of a safety and health clause in
contracts involving hazardous materials or operations, and provides
procedures for administering safety and health provisions.
323.7001 Policy.
Various statutes and regulations (e.g. Walsh-Healy Act; Service
Contract Act) require adherence to minimum safety and health standards
by contractors engaged in potentially hazardous work. The guidance
contained in FAR Subpart 23.3 shall be used for hazardous materials as
the primary reference. When the guidance is judged insufficient or does
not meet the safety and health situation in the instant acquisition,
this subpart shall be followed.
323.7002 Actions required.
(a) Contracting activities. Contracting activities shall use the
clause set forth in 352.223-70, or a clause reading substantially the
same, in prospective contracts and subcontracts involving hazardous
materials or operations for the following:
(1) Services or products;
(2) Research, development, or test projects;
(3) Transportation of hazardous materials; and
(4) Construction, including construction of facilities on the
contractor's premises.
(b) Safety officers. OPDIV safety officers shall advise and assist
initiators of acquisition requests and contracting officers in:
(1) Determining whether safety and health provisions should be
included in a prospective contract;
(2) Evaluating a prospective contractor's safety and health
programs; and
(3) Conducting post-award reviews and surveillance to the extent
deemed necessary.
(c) Initiators. Initiators of acquisition requests for items
described in paragraph (a) of this section shall:
(1) During the preparation of a request for contract, and in the
solicitation, ensure that hazardous materials and operations to be used
in the performance of the contract are clearly identified; and
(2) During the period of performance:
(i) Apprise the contracting office of any noncompliance with safety
and health provisions identified in the contract; and
(ii) Cooperate with the safety officer in conducting review and
surveillance activities.
PART 324--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION
Subpart 324.1--Protection of Individual Privacy
Sec.
324.100 Scope of subpart.
324.102 General.
324.103 Procedures.
Subpart 324.2--Freedom of Information Act
324.202 Policy.
Subpart 324.70--Confidentiality of Information
324.7001 General.
324.7002 Policy.
324.7003 Applicability.
324.7004 Required clause.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 324.1--Protection of Individual Privacy
324.100 Scope of subpart.
This subpart implements 45 CFR Part 5b, Privacy Act Regulations,
and FAR Subpart 24.1, Protection of Individual Privacy, which
implements the Privacy Act of 1974 (Pub. L. 93-579, December 31, 1974;
5 U.S.C. 552a) and OMB Circular No. A-108, July 9, 1975.
324.102 General.
(a) It is the Department's policy to protect the privacy of
individuals to the maximum possible extent while permitting the
exchange of records required to fulfill the Department's administrative
and program responsibilities and its responsibilities for disclosing
records to which the general public is entitled under the Freedom of
Information Act (5 U.S.C. 552). The Privacy Act of 1974 and the
Department's implementation under 45 CFR Part 5b apply ``when an agency
provides by a contract for the operation by or on behalf of the agency
of a system of records to accomplish any agency function * * *'' The
key factor is whether a departmental function is involved. Therefore,
the Privacy Act requirements apply to a departmental contract when,
under the contract, the contractor must maintain or operate a system of
records to accomplish a departmental function.
(e) The program official, and, as necessary, the official
designated as the activity's Privacy Act Coordinator and the Office of
General Counsel, shall determine the applicability of the Act to each
proposed acquisition. The program official is required to include a
statement in the request for contract indicating whether the Privacy
Act is or is not applicable to the proposed acquisition.
(f) Whenever the contracting officer is informed that the Privacy
Act is not applicable, but the resultant contract will involve the
collection of individually identifiable personal data by the
contractor, the contracting officer shall include provisions to protect
the confidentiality of the records and the privacy of individuals
identified in the records (see Subpart 324.70).
324.103 Procedures.
(a) All requests for contract shall be reviewed by the contracting
officer to determine whether the Privacy Act requirements are
applicable. If applicable, the contracting officer shall include the
solicitation notification and contract clause required by FAR 24.104 in
the solicitation, and the contract clause in the resultant contract. In
addition, the contracting officer shall ensure that the solicitation
notification, contract clause, and other pertinent information
specified in this subpart are included in any contract modification
which results in the Privacy Act requirements becoming applicable to a
contract.
(b)(1) The contracting officer shall identify the system(s) of
records on individuals in solicitations, contracts, and contract
modifications to which the Privacy Act and the implementing regulations
are applicable.
(2) The contracting officer shall include a statement in the
contract notifying the contractor that the contractor and its employees
are subject to criminal penalties for violations of the Act (5 U.S.C.
552a(i)) to the same extent as employees of the Department. The
statement shall require that the contractor assure that each contractor
employee knows the prescribed rules of conduct, and each contractor
employee is aware that he/she can be subjected to criminal penalties
for violations of the Act. The contracting officer shall provide the
contractor with a copy of the rules of conduct and other requirements
set forth in 45 CFR 5b.
(c) The contracting officer shall include in the contract the
disposition to be made of the system(s) of records on individuals upon
completion of performance of the contract. For example, the contract
may require the contractor to completely destroy the records, to remove
personal identifiers, to turn the records over to the Department, or to
keep the records but take certain measures to keep the records
confidential and protect the individuals' privacy.
(d) Whenever an acquisition is determined to be subject to the
Privacy
[[Page 1371]]
Act requirements, a ``system notice,'' prepared by the program official
and describing the Department's intent to establish a new system of
records on individuals, to make modifications to an existing system, or
to disclose information in regard to an existing system, is required to
be published in the Federal Register. A copy of the ``system notice''
shall be attached to the request for contract or purchase request. If a
``system notice'' is not attached, the contracting officer shall
inquire about its status and shall obtain a copy from the program
official for inclusion in the contract file. If a ``system notice'' has
not been published in the Federal Register, the contracting officer may
proceed with the acquisition but shall not award the contract until the
``system notice'' is published, and publication is verified by the
contracting officer.
Subpart 324.2--Freedom of Information Act
324.202 Policy.
(a) The Department's regulation implementing the Freedom of
Information Act (FOIA), 5 U.S.C. 552, as amended, is set forth in 45
CFR Part 5.
(b) The contracting officer, upon receiving a FOIA request, shall
follow Department and operating division procedures. As necessary,
actions should be coordinated with the cognizant Freedom of Information
(FOI) Officer and the Business and Administrative Law Division of the
Office of General Counsel. The contracting officer must remember that
only the FOI Officer has the authority to release or deny release of
records. While the contracting officer should be familiar with the
entire FOIA regulation in 45 CFR Part 5, particular attention should be
focused on sections 5.65 and 5.66; also of interest are sections 5.32,
5.33, and 5.35.
Subpart 324.70--Confidentiality of Information
324.7001 General.
In performance of certain HHS contracts, it is necessary for the
contractor to generate data, or be furnished data by the Government,
which is about individuals, organizations, or Federal programs. This
subpart and the accompanying contract clause require contractors to
prudently handle disclosure of certain types of information not subject
to the Privacy Act or the HHS human subject regulations set forth in 45
CFR Part 46. This subpart and contract clause address the kinds of data
to be generated by the contractor and/or data to be furnished by the
Government that are considered confidential and how it should be
treated.
324.7002 Policy.
It is the policy of HHS to protect personal interests of
individuals, corporate interests of non-governmental organizations, and
the capacity of the Government to provide public services when
information from or about individuals, organizations, or Federal
agencies is provided to or obtained by contractors in performance of
HHS contracts. This protection depends on the contractor's recognition
and proper handling of the information. As a result, the
``Confidentiality of Information'' contract clause was developed.
324.7003 Applicability.
(a) The ``Confidentiality of Information'' clause, set forth in
352.224-70, should be used in solicitations and resultant contracts
whenever the need exists to keep information confidential. Examples of
situations where the clause may be appropriate include:
(1) Studies performed by the contractor which generate information
or involve Government-furnished information that is personally
identifiable, such as medical records, vital statistics, surveys, and
questionnaires;
(2) Contracts which involve the use of salary structures, wage
schedules, proprietary plans or processes, or confidential financial
information of organizations other than the contractor's; and
(3) Studies or research which may result in preliminary or
invalidated findings which, upon disclosure to the public, might create
erroneous conclusions which, if acted upon, could threaten public
health or safety.
(b) With regard to protecting individuals, this subpart and
contract clause are not meant to regulate or control the method of
selecting subjects and performing studies or experiments involving
them. These matters are dealt with in the HHS regulation entitled
``Protection of Human Subjects,'' 45 CFR Part 46. If a system of
records under contract, or portions thereof, is determined to be
subject to the requirements of the Privacy Act, in accordance with FAR
24.1 and 324.1 and Title 45 CFR Part 5b, the procedures cited in those
references are applicable and the Privacy Act contract clause shall be
included in the contract. If the contract also involves confidential
information, as described herein, which is not subject to the Privacy
Act, the contract shall include the ``Confidentiality of Information''
clause in addition to the Privacy Act clause.
324.7004 Required clause.
The clause set forth in 352.224-70 shall be included in any RFP and
resultant contract(s) where it has been determined that confidentiality
of information provisions may apply. Any RFP announcing the intent to
include this clause in any resultant contract(s) shall indicate, as
specifically as possible, the types of data which would be covered and
requirements for handling the data.
PART 325--FOREIGN ACQUISITION
Subpart 325.1--Buy American Act--Supplies
Sec.
325.102 Policy.
325.108 Excepted articles, materials, and supplies.
Subpart 325.3--Balance of Payments Program
325.302 Policy.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 325.1--Buy American Act--Supplies
325.102 Policy.
(b) The head of the contracting activity (not delegable) shall make
the determinations required by FAR 25.102(a)(1) through (5) and
25.102(b)(2).
325.108 Excepted articles, materials, and supplies.
(b) Articles, materials, and supplies not listed in FAR 25.108(d)
may be excepted only after a written determination has been made by the
head of the contracting activity (not delegable). These determinations
are required only in instances where it has been determined that only
suppliers of foreign source end items shall be solicited. However,
approvals and determinations covering individual acquisitions in the
following categories may be made by the contracting officer:
(1) Acquisition of spare and replacement parts for foreign
manufactured items, if the acquisition must be restricted to the
original manufacturer or its supplier; and
(2) Acquisition of foreign drugs when it has been determined, in
writing, by the responsible program official, that only the requested
foreign drug will fulfill the requirement.
[[Page 1372]]
Subpart 325.3--Balance of Payments Program
325.302 Policy.
All determinations addressed in FAR 25.302 shall be made by the
head of the contracting activity (not delegable).
PART 328--BONDS AND INSURANCE
Subpart 328.3--Insurance
Sec.
328.301 Policy.
328.311 Solicitation provision and contract clause on liability
insurance under cost-reimbursement contracts.
328.311-2 Agency solicitation provisions and contract clauses.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 328.3--Insurance
328.301 Policy.
It is Department policy to limit the Government's reimbursement of
its contractors' liability to third persons for claims not covered by
insurance in cost-reimbursement contracts to the Limitations of Funds
or Limitation of Cost clause of the contract. In addition, the amount
of the Government's reimbursement will be limited to final judgments or
settlements approved in writing by the Government.
328.311 Solicitation provision and contract clause on liability
insurance under cost-reimbursement contracts.
328.311-2 Agency solicitation provisions and contract clauses.
The contracting officer shall insert the clause at 352.228-7,
Insurance--Liability to Third Persons, in all solicitations and
resulting cost-reimbursement contracts, in lieu of the clause at FAR
52.228-7 required by FAR 28.311-1.
PART 330--COST ACCOUNTING STANDARDS
Subpart 330.2--CAS Program Requirements
Sec.
330.201 Contract requirements.
330.201-5 Waiver.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 330.2--CAS Program Requirements
330.201 Contract requirements.
330.201-5 Waiver.
(c) The requirements of FAR 30.201-5 shall be exercised by the
Director, Office of Acquisition Management (DOAM). Requests for waivers
shall be forwarded through normal acquisition channels to the DOAM.
PART 332--CONTRACT FINANCING
Subpart 332.4--Advance Payments
Sec.
332.402 General.
332.403 Applicability.
332.407 Interest.
332.409 Contracting officer action.
332.409-1 Recommendation for approval.
Subpart 332.5--Progress Payments Based on Cost
332.501 General.
332.501-2 Unusual progress payments.
Subpart 332.7--Contract Funding
332.702 Policy.
332.703 Contract funding requirements.
332.703-1 General.
332.704 Limitations of cost or funds.
332.705 Contract clauses.
332.705-2 Clauses for limitation of costs or funds.
Subpart 332.9--Prompt Payment
332.902 Definitions.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 332.4--Advance Payments
332.402 General.
(e) The determination that the making of an advance payment is in
the public interest (see FAR 32.402(c)(1)(iii)(A)) shall be made by the
respective chief of the contracting office (CCO) (not delegable).
332.403 Applicability.
All contracts for research work with educational institutions
located in the United States shall provide for financing by use of
advance payments, in reasonable amounts, unless otherwise prohibited by
law.
332.407 Interest.
(d) The HCA (not delegable) is authorized to make the
determinations in FAR 32.407(d) and as follows. In addition to the
interest-free advance payments for the types of contracts listed in FAR
32.407(d), advance payments without interest may be approved for
nonprofit contracts which are without fee with educational institutions
and other nonprofit organizations, whether public or private, which are
for the performance of work involving health services, educational
programs, or social service programs, including, but not limited to,
programs such as:
(1) Community health representative services for an Indian Tribe or
Band;
(2) Narcotic addict rehabilitative services;
(3) Comprehensive health care service program for Model
Neighborhood programs;
(4) Planning and development of health maintenance organizations;
(5) Dissemination of information derived from educational research;
(6) Surveys or demonstrations in the field of education;
(7) Producing or distributing educational media for handicapped
persons including captioned films for the hearing impaired;
(8) Operation of language or area centers;
(9) Conduct of biomedical research and support services;
(10) Research surveys or demonstrations involving the training and
placement of health manpower and health professionals, and
dissemination of related information; and
(11) Surveys or demonstrations in the field of social service.
332.409 Contracting officer action.
332.409-1 Recommendation for approval.
The information in FAR 32.409-1 (or FAR 32.409-2) shall be
transmitted to the HCA in the form of a briefing memorandum.
Subpart 332.5--Progress Payments Based on Cost
332.501 General.
332.501-2 Unusual progress payments.
(a)(3) The approval of an unusual progress payment shall be made by
the head of the contracting activity (HCA) (not delegable).
Subpart 332.7--Contract Funding
332.702 Policy.
An incrementally funded contract is a contract in which the total
work effort is to be performed over multiple time periods and funds are
allotted to cover discernible phases or increments of performance.
(a) Incremental funding may be applied to cost-reimbursement type
contracts for the acquisition of research and development and other
types of nonpersonal, nonseverable services. It shall not be applied to
contracts for construction services, architect-engineer services, or
severable services. Incremental funding allows nonseverable cost-
reimbursement contracts, awarded for more than one year, to be funded
from succeeding fiscal years.
(b) It is departmental policy that contracts for projects of
multiple year duration be fully funded, whenever possible, to cover the
entire project. However, incrementally funded contracts may be used
when:
(1) A project, which is part of an approved program, is anticipated
to be of multiple year duration, but funds are
[[Page 1373]]
not currently available to cover the entire project;
(2) The project represents a valid need for the fiscal year in
which the contract is awarded and of the succeeding fiscal years of the
project's duration, during which additional funds may be obligated by
increasing the allotment to the contract;
(3) The project is so significant to the approved program that
there is reasonable assurance that it will command a high priority for
proposed appropriations to cover the entire multiple year duration; and
(4) The statement of work is specific and is defined by separate
phases or increments so that, at the completion of each, progress can
be effectively measured.
332.703 Contract funding requirements.
332.703-1 General.
(b) The following general guidelines are applicable to
incrementally funded contracts:
(1) The estimated total cost of the project (all planned phases or
increments) is to be taken into consideration when determining the
requirements which must be met before entering into the contract; i.e.,
justification for noncompetitive acquisition, approval or award, etc.
(2) The RFP and resultant contract are to include a statement of
work which describes the total project covering the proposed multiple
year period of performance and indicating timetables consistent with
planned phases or increments and corresponding allotments of funds.
(3) Offerors will be expected to respond to RFPs with technical and
cost proposals for the entire project indicating distinct break-outs of
the planned phases or increments, and the multiple year period of
performance.
(4) Negotiations will be conducted based upon the total project,
including all planned phases or increments, and the multiple year
period of performance.
(5) Sufficient funds must be obligated under the basic contract to
cover no less than the first year of performance, unless the
contracting officer determines it is advantageous to the Government to
fund the contract for a lesser period. In that event, the contracting
officer shall ensure that the obligated funds are sufficient to cover a
complete phase or increment of performance representing a material and
measurable part of the total project, and the contract period shall be
reduced accordingly.
(6) Because of the magnitude of the scope of work and multiple year
period of performance under an incrementally funded contract, there is
a critical need for careful program planning. Program planning must
provide for appropriate surveillance of the contractor's performance
and adequate controls to ensure that projected funding will not impinge
on the program office's ability to support, within anticipated
appropriations, other equally important contract or grant programs.
(7) An incrementally funded contract must contain precise
requirements for progress reports to enable the project officer to
effectively monitor the contract. The project officer should be
required to prepare periodic performance evaluation reports to
facilitate the program office's ultimate decision to allot additional
funds under the contract.
332.704 Limitation of cost or funds.
For detailed instruction regarding administrative actions in
connection with anticipated cost overruns, see Subpart 342.71.
332.705 Contract clauses.
332.705-2 Clauses for limitation of costs or funds.
(c)(1) When using the Limitation of Funds clause (FAR 52.232-22) in
the solicitation and resultant incrementally funded contract, the
contracting officer shall insert the following legend between the
clause title and the clause text:
(This clause supersedes the Limitation of Cost clause found in the
General Provisions of this contract)
(2) The contracting officer shall also include a clause reading
substantially as that shown in 352.232-74 in the Special Provisions of
the resultant incrementally funded contract.
(3) The request for proposals must inform prospective offerors of
the Department's intention to enter into an incrementally funded
contract. Therefore, the contracting officer shall include the
provision at 352.232-75 in the request for proposals whenever the use
of incremental funding is contemplated.
Subpart 332.9--Prompt Payment
332.902 Definitions.
Fiscal office means the office responsible for: determining whether
interest penalties are due a contractor and, if so, the amount;
determining whether an invoice offers a financially advantageous
discount; maintaining records for and submission of prompt payment
reports to the Deputy Assistant Secretary, Finance (DASF), ASMB, OS;
and processing payments to the Treasury Department to allow for payment
to a contractor when due. The fiscal office shall fulfill the roles of
the ``designated billing office'' and the ``designated payment
office.''
PART 333--PROTESTS, DISPUTES, AND APPEALS
Subpart 333.1--Protests
Sec.
333.102 General.
333.103 Protests to the agency.
333.104 Protests to GAO.
Subpart 333.2--Disputes and Appeals
333.203 Applicability.
333.209 Suspected fraudulent claims.
333.211 Contracting officer's decision.
333.212 Contracting officer's duties upon appeal.
333.212-70 Formats.
333.213 Obligation to continue performance.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 333.1--Protests
333.102 General.
(a) Contracting officers shall consider all protests or objections
regarding the award of a contract, whether submitted before or after
award, provided the protests are filed in a timely manner and are
submitted by interested parties. To be considered timely, protests
based on alleged improprieties in any type of solicitation which are
apparent before bid opening or the closing date for receipt of
proposals shall be filed prior to bid opening or the closing date for
receipt of proposals. In the case of negotiated acquisitions, alleged
improprieties which do not exist in initial solicitations, but which
are subsequently incorporated by amendment, must be protested not later
than the next closing date for receipt of proposals following the
incorporation. In other cases, protests shall be filed not later than
ten (10) calendar days after the basis for protest is known or should
have been known, whichever is earlier. Provided a protest has been
filed initially with the contracting officer, any subsequent protest to
the Secretary or GAO filed within ten (10) calendar days of
notification of adverse action will be considered. Written confirmation
of all oral protests shall be requested from protestants and must be
timely filed.
(d)(1) The Office of Acquisition Management (OAM) has been
designated as the headquarters office to serve as the liaison for
protests lodged with GAO. Within the OAM, the Departmental Protest
Control Officer (DPCO) has been designated as the individual to be
contacted by GAO.
[[Page 1374]]
(3) Each contracting activity shall designate a protest control
officer to serve as an advisor to the contracting officer and to
monitor protests from the time of initial notification until the
protest has been resolved. The protest control officer should be a
senior acquisition specialist in the headquarters acquisition staff
office. In addition, contracting activities should designate similar
officials within their principal components to the extent practicable
and feasible. A copy of each appointment and termination of appointment
of protest control officers shall be forwarded to the Director, OAM.
333.103 Protests to the agency.
(a)(2) The contracting officer is authorized to make the
determination, using the criteria in FAR 33.103(a), to award a contract
notwithstanding the protest after obtaining the concurrence of the
contracting activity's protest control officer and the Office of
General Council--Business and Administrative Law Division (OGC-BAL). If
the protest has been lodged with the Secretary, is addressed to the
Secretary, or requests referral to the Secretary, approval shall also
be obtained from the Director, OAM before making the award.
(3) The contracting officer shall require written confirmation of
any oral protest. To be considered timely, the written confirmation
must be filed in accordance with the applicable provisions in
333.102(a). In the following cases, written protests received by the
contracting officer before award shall be forwarded, through
acquisition channels, to the DPCO for processing. Files concerning
these protests shall be submitted in duplicate, by the most expeditious
means, marked ``IMMEDIATE ACTION--PROTEST BEFORE AWARD'', and contain
the documentation referenced in 333.104(a)(3).
(i) The protestant requests referral to the Secretary of Health and
Human Services;
(ii) The protest is known to have been lodged with the Comptroller
General or the Secretary, or is addressed to either; or
(iii) The contracting officer entertains some doubt as to the
proper action regarding the protest or believes it to be in the best
interest of the Government that the protest be considered by the
Secretary or the Comptroller General. Otherwise, protests addressed to
the contracting officer may be answered by the contracting officer,
with the concurrence of the contracting activity's protest control
officer and OGC-BAL.
(4) Protests received after award shall be treated as indicated in
333.103(a)(3).
333.104 Protests to GAO.
(a) General. (3) Protests lodged with GAO, whether before or after
award, shall be processed by the DPCO. Protest files shall be prepared
by the contracting office and distributed as follows: two copies to the
DPCO, one copy to the contracting activity's protest control officer,
and one copy to OGC-BAL. Files shall include the following
documentation:
(i) The contracting officer's statement of facts and circumstances,
including a discussion of the merits of the protest, and conclusions
and recommendations, including documentary evidence on which they are
based.
(ii) A copy of the IFB or RFP.
(iii) A copy of the abstract of bids or proposals.
(iv) A copy of the bid or proposal of the successful offeror to
whom award has been made or is proposed to be made.
(v) A copy of the bid or proposal of the protestant, if any.
(vi) The current status of award. When award has been made, this
shall include whether performance has commenced, shipment or delivery
has been made, or a stop work order has been issued.
(vii) A copy of any mutual agreement to suspend work on a no-cost
basis, when appropriate (see FAR 33.104(c)(4)).
(viii) Copies of the notice of protest given offerors and other
parties when the notice is appropriate (see FAR 33.104 (a)(4)).
(ix) A copy of the technical evaluation report, when applicable,
and a copy of each evaluator's rating for all proposals.
(x) A copy of the negotiation memorandum, when applicable.
(xi) The name and telephone number of the person in the contracting
office who may be contacted for information relevant to the protest.
(xii) A copy of the competitive range memorandum. and
(xiii) Any document which is referred to in the contracting
officer's statement of facts. The files shall be assembled in an
orderly manner and shall include an index of enclosures.
(4) The contracting officer is responsible for making the necessary
notifications referenced in FAR 33.104 (a)(4). Copies of the views of
interested parties submitted in response to the notification shall be
immediately provided to the DPCO upon receipt by the contracting
officer.
(5) The contracting officer shall furnish the protest file
containing the documentation specified in 333.104(a)(3), except item
(a)(3)(i), to the DPCO within fourteen (14) calendar days from receipt
of the protest. The contracting officer shall provide the documentation
required by item (a)(3)(i) of 333.104 to the DPCO within twenty-one
(21) calendar days from receipt of the protest. Since the statute
allows only a short time period in which to respond to protests lodged
with GAO, the contracting officer shall handle each protest on a
priority basis. The DPCO shall prepare the report and submit it and the
protest file to GAO in accordance with FAR 33.104(a)(5).
(6)(i) Take DPCO shall take the necessary actions specified in FAR
33.104(a)(6)(i) after receiving all the documentation required by
333.104(a)(3) from the contracting officer.
(ii) Since the DPCO will furnish the report to GAO, the protestor,
and other interested parties, comments on the report from the protestor
and other interested parties will be requested to be sent to the DPCO.
(7) The Office of Acquisition Management (OAM) has been designated
as the headquarters office, and the DPCO as the individual, that GAO
should contract concerning all protests lodged with GAO.
(b) Protests before award. (1) To make an award notwithstanding a
protest, the contracting officer shall prepare a finding using the
criteria in FAR 33.104(b)(1), have it executed by the head of the
contracting activity (HCA)(not delegable), and forward it, along with a
written request for approval to make the award, to the Director, OAM.
(2) If the request to make an award notwithstanding the protest is
approved by the Director, OAM, the DPCO shall notify GAO. Whether the
request is approved or not, the DPCO shall telephonically notify the
contracting activity's protest control officer of the decision of the
Director, OAM, and the contracting activity's protest control officer
shall immediately notify the contracting officer. The DPCO shall
confirm the decision by memorandum to the contracting activity's
protest control officer.
(4) The contracting officer shall prepare the protest file in
accordance with 333.104(a)(3), and forward it, in duplicate, to the
DPCO (see 333.104(a)(5)).
(c) Protests after award. (2) If the contracting officer believes
performance should be allowed to continue notwithstanding the protest,
a finding shall be prepared by the contracting officer, executed by the
HCA (not
[[Page 1375]]
delegable), and forwarded, along with a written request for approval,
to the Director, OAM. The same procedures for notification stated in
333.104(b)(2) shall be followed.
(6) The contracting officer shall prepare the protest file in
accordance with 333.104(a)(3), and forward it, in duplicate, to the
DPCO (see 333.104 (a)(5)).
(d) Findings and notice. The contracting officer shall perform the
actions required by FAR 33.104 (d); however, notification to GAO shall
be made by the DPCO.
(g) Notice to GAO. The Deputy Assistant Secretary for Grants and
Acquisition Management shall be the official to comply with the
requirements of FAR 33.104 (g).
(i) Express option. When GAO invokes the express option, the
contracting officer shall prepare the complete protest file as
described in 333.104 (a)(3), to include item (a)(3)(i), and deliver it
(hand-carry, if necessary) to the DPCO in time to meet the submittal
date established by GAO. The DPCO will notify the contracting officer
of the submittal date after GAO has finalized its requirements.
Subpart 333.2--Disputes and Appeals
333.203 Applicability.
(c) The Armed Services Board of Contract Appeals (ASBCA) has been
designated by the Secretary as the authorized ``Board'' to hear and
determine disputes for the Department.
333.209 Suspected fraudulent claims.
The contracting officer shall submit any instance of a contractor's
suspected fraudulent claim to the Office of the Inspector General for
investigation.
333.211 Contracting officer's decision.
(a)(2) The contracting officer shall refer a proposed final
decision to the Office of General Counsel, Business and Administrative
Law Division (OGC-BAL), for advice as to the legal sufficiency and
format before sending the final decision to the contractor. The
contracting officer shall provide OGC-BAL with the pertinent documents
with the submission of each proposed final decision.
(a)(4)(v) When using the paragraph in FAR 33.211 (a)(4)(v), the
contracting officer shall insert the words ``Armed Services'' before
each mention of the term ``Board of Contract Appeals''.
(h) At any time within the period of appeal, the contracting
officer may modify or withdraw his/her final decision. If an appeal
from the final decision has been taken to the ASBCA, the contracting
officer will forward his/her recommended action to OGC-BAL with the
supplement to the contract file which supports the recommended
correction or amendment.
333.212 Contracting officer's duties upon appeal.
(a) Appeals shall be governed by the rules set forth in the ``Rules
of the Armed Services Board of Contract Appeals'', or by the rules
established by the U.S. Court of Federal Claims, as appropriate.
(b) OGC-BAL is designated as the Government Trial Attorney to
represent the Government in the defense of appeals before the ASBCA. A
decision by the ASBCA will be transmitted by the Government Trial
Attorney to the appropriate contracting officer for compliance in
accordance with the ASBCA's decision.
(c) If an appeal is filed with the ASBCA, the contracting officer
shall assemble a file within 30 days of receipt of an appeal, or advice
that an appeal has been filed, that consists of all documents pertinent
to the appeal, including:
(1) The decision and findings of fact from which the appeal is
taken;
(2) The contract, including specifications and pertinent
modifications, 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 witness on the matter
in dispute made prior to the filing of the notice of appeal with the
Board; and
(5) Any additional information considered pertinent. The
contracting officer shall furnish the appeal file to the Government
Trial Attorney for review and approval. After approval, the contracting
officer shall prepare four copies of the file, one for the ASBCA, one
for the appellant, one for the Government Trial Attorney, and one for
the contracting office.
(d) At all times after the filing of an appeal, the contracting
officer shall render whatever assistance is requested by the Government
Trial Attorney. When an appeal is set for hearing, the concerned
contracting officer, acting under the guidance of the Government Trial
Attorney, shall be responsible for arranging for the presence of
Government witnesses and specified physical and documentary evidence at
both the pre-hearing conference and hearing.
(e) If a contractor which has filed an appeal with the ASBCA elects
to accept fully the decision from which the appeal was taken, or any
modification to it, and gives written notification of acceptance to the
Government Trial Attorney or the concerned contracting officer, the
Government Trial Attorney will notify the ASBCA of the disposition of
the dispute in accordance with Rule 27 of the ASBCA.
(f) If the contractor has elected to appeal to the U.S. Court of
Federal Claims, the U.S. Department of Justice will represent the
Department. However, the contracting officer shall still coordinate all
actions through OGC-BAL.
333.212-70 Formats.
(a) The following format is suggested for use in transmitting
appeal files to the ASBCA:
Your reference: ____________-------------------------------------------
(Docket No.)
(Name)
Recorder, Armed Services Board of Contract Appeals
Skyline Six
5109 Leesburg Pike
Falls Church, Virginia 22041
Dear (Name):
Transmitted herewith are documents relative to the appeal under
Contract No. ____________ with the (name of contractor) in
accordance with the procedures under Rule 4.
The Government Trial Attorney for this case is (Insert Division
of Business and Administrative Law, Office of General Counsel,
Department of Health and Human Services, 330 Independence Avenue,
S.W., Washington, D.C. 20201).
The request for payment of charges resulting from the processing
of this appeal should be addressed to:
----------------------------------------------------------------------
(Insert name and address of cognizant finance office.)
----------------------------------------------------------------------
Sincerely yours,
Contracting Officer
Enclosures
(b) The following format is suggested for use in notifying the
appellant that the appeal file was submitted to the ASBCA:
(Contractor Address)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Dear ____________:-----------------------------------------------------
An appeal file has been compiled relative to the appeal under
Contract No. ________, and has been submitted to the Armed Services
Board of Contract Appeals (ASBCA). The enclosed duplicate of the
appeal file is identical to that submitted to the Board, except that
contract documents which you already have been excluded. You may
furnish or suggest any additional information deemed pertinent to
the appeal to the Armed
[[Page 1376]]
Services Board of Contract Appeals according to their rules.
The ASBCA will provide you with further information concerning
this appeal.
Sincerely yours,
Contracting Officer
Enclosure
333.213 Obligation to continue performance.
(a) The Disputes clause at FAR 52.233-1 shall be used without the
use of Alternate I. However, if the contracting officer determines that
the Government's interest would be better served by use of paragraph
(i) in Alternate I, he/she must request approval for its use from the
chief of the contracting office.
PART 334--MAJOR SYSTEM ACQUISITION
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
334.003 Agency head responsibilities.
The Department's implementation of OMB Circular No. A-109 may be
found in Chapter 1-150 of the General Administration Manual.
PART 335--RESEARCH AND DEVELOPMENT CONTRACTING
Sec.
335.070 Cost-sharing.
335.070-1 Policy.
335.070-2 Amount of cost-sharing.
335.070-3 Method of cost-sharing.
335.070-4 Contract award.
335.071 Special determinations and findings affecting research and
development contracting.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
335.070 Cost-sharing.
335.070-1 Policy.
(a) The use of cost-sharing type contracts should be encouraged to
contribute to the cost of performing research where there is a
probability that the contractor will receive present or future benefits
from participation, such as, increased technical know-how, training to
employees, acquisition of equipment, use of background knowledge in
future contracts, etc. Cost-sharing is intended to serve the mutual
interests of the Government and the performing organization by helping
to assure efficient utilization of the resources available for the
conduct of research projects and by promoting sound planning and
prudent fiscal policies by the performing organization. Encouragement
should be given to organizations to contribute to the cost of
performing research under contracts unless the contracting officer
determines that a request for cost-sharing would not be appropriate
because of the following circumstances:
(1) The particular research objective or scope of effort for the
project is specified by the Government rather than proposed by the
performing organization. This would usually include any formal
Government request for proposals for a specific project.
(2) The research effort has only minor relevance to the non-Federal
activities of the performing organization, and the organization is
proposing to undertake the research primarily as a service to the
Government.
(3) The organization has little or no non-Federal sources or funds
from which to make a cost contribution. Cost-sharing should generally
not be requested if cost-sharing would require the Government to
provide funds through some other means (such as fees) to enable the
organization to cost-share. It should be recognized that those
organizations which are predominantly engaged in research and
development and have little or no production or other service
activities may not be in a favorable position to make a cost
contribution.
(b) The responsibility for negotiating cost-sharing is that of the
contracting office. Each research contract file should show whether the
contracting officer considered cost-sharing appropriate for that
particular contract and in what amount. If cost-sharing was not
considered appropriate, the file must indicate the factual basis for
that decision, e.g., ``Because the contractor will derive no benefits
from this award that can be applied to its commercial activities, cost-
sharing is not considered appropriate.'' The contracting officer may
wish to coordinate with the project officer before documenting this
decision.
(c) If the contracting officer considers cost-sharing to be
appropriate for a research contract and the contractor refuses to
accept this type of contract, the award may be made without cost-
sharing, if the contracting officer concludes that payment of the full
cost of the research effort is necessary in order to obtain the
services of that particular contractor.
335.070-2 Amount of cost-sharing.
When cost-sharing is determined to be appropriate, the following
guidelines shall be utilized in determining the amount of cost
participation by the contractor.
(a) The amount of cost participation should depend to a large
extent on whether the research effort or results are likely to enhance
the performing organization's capability, expertise, or competitive
position, and the value of this enhancement to the performing
organization. It should be recognized that those organizations which
are predominantly engaged in research and development have little or no
production or other service activities and may not be in a favorable
position to derive a monetary benefit from their research under Federal
agreements. Therefore, contractor cost participation could reasonably
range from as little as 1 percent or less of the total project cost, to
more than 50 percent of the total project cost. Ultimately, the
contracting officer should bear in mind that cost-sharing is a
negotiable item. As such, the amount of cost-sharing should be
proportional to the anticipated value of the contractor's gain.
(b) If the performing organization will not acquire title or the
right to use inventions, patents, or technical information resulting
from the research project, it would generally be appropriate to obtain
less cost-sharing than in cases in which the performer acquires these
rights.
(c) A fee or profit will usually not be paid to the performing
organization if the organization is to contribute to the cost of the
research effort, but the amount of cost-sharing may be reduced to
reflect the fact that the organization is foregoing its normal fee or
profit in the research. However, if the research is expected to be of
only minor value to the performing organization and if cost-sharing is
not required by statute, it may be appropriate for the performer to
make a contribution in the form of a reduced fee or profit rather than
sharing costs of the project.
(d) The organization's participation may be considered over the
total term of the project so that a relatively high contribution in one
year may be offset by a relatively low contribution in another.
(e) A relatively low degree of cost-sharing may be appropriate if,
in the view of the operating divisions or their subordinate elements,
an area of research requires special stimulus in the national interest.
335.070-3 Method of cost-sharing.
Cost-sharing on individual contracts may be accomplished either by
a contribution of part or all of one or more elements of allowable cost
of the work being performed, or by a fixed amount or stated percentage
of the total allowable costs of the project. Costs so contributed may
not be charged to the Government under any other grant or contract
(including allocations to other grants or contracts as part of any
[[Page 1377]]
independent research and development program).
335.070-4 Contract award.
In consonance with the Department's objectives of competition and
support of the small business program, award of contracts should not be
made solely on the basis of ability or willingness to cost-share.
Awards should be made primarily on the contractor's competence and only
after adequate competition has been obtained among large and small
business organizations whenever possible. The offeror's willingness to
share costs should not be considered in the technical evaluation
process but as a business consideration, which is secondary to
selecting the best qualified source.
335.071 Special determinations and findings affecting research and
development contracting.
OPDIV heads for health agencies shall sign individual and class
determinations and findings for:
(a) Acquisition or construction of equipment or facilities on
property not owned by the United States pursuant to 42 U.S.C.
241(a)(7); and
(b) Use of an indemnification provision in a research contract
pursuant to 42 U.S.C. 241(a)(7).
PART 342--CONTRACT ADMINISTRATION
Subpart 342.7--Indirect Cost Rates
342.705 Final indirect cost rates.
Subpart 342.70--Contract Monitoring
342.7001 Purpose.
342.7002 Contract monitoring responsibilities.
342.7003 Withholding of contract payments.
342.7003-1 Policy.
342.7003-2 Procedures.
342.7003-3 Withholding payments.
Subpart 342.71--Administrative Actions for Cost Overruns
342.7001 Scope of subpart.
342.7101 Contract administration.
342.7101-1 General.
342.7101-2 Procedures.
342.7102 Contract modifications.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 342.7--Indirect Cost Rates
342.705 Final indirect cost rates.
The Director, Division of Cost Allocation of the Program Support
Center within the servicing HHS regional office has been delegated the
authority to establish indirect cost rates, research patient care
rates, and, as necessary, fringe benefit, computer, and other special
costing rates for use in contracts and grants awarded to State and
local governments, colleges and universities, hospitals, and other
nonprofit organizations.
Subpart 342.70--Contract Monitoring
342.7001 Purpose.
Contract monitoring is an essential element of contract
administration and the acquisition process. This subpart describes the
Department's operating concepts regarding contract monitoring,
performed jointly by the project officer and the contracting officer,
to ensure that the required monitoring is performed, timely remedial
action is taken when necessary, and a determination is made that
contract objectives have been met.
342.7002 Contract monitoring responsibilities.
(a) Upon execution of the contract, the mutual obligations of the
Government and the contractor are established by, and limited to, the
written stipulations in the contract. Unless authorized by the
contracting officer, HHS personnel shall not direct or request the
contractor to assume any obligation or take any actions not
specifically required by the contract. Only the contracting officer may
impose a requirement which will result in a change to the contract. All
contract changes must be directed in writing or confirmed in writing by
the contracting officer.
(b) The contracting officer is responsible for assuring compliance
with all terms of the contract, especially the statutory, legal,
business, and regulatory provisions. Whether or not a postaward
conference is held, the contracting officer shall inform the contractor
by letter (if not already stipulated by contract provisions) of the
authorities and responsibilities of the Government personnel with whom
the contractor will be dealing throughout the life of the contract.
(c) The contracting officer must depend on program, technical, and
other personnel for assistance and advice in monitoring the
contractor's performance, and in other areas of postaward
administration. The contracting officer must assure that
responsibilities assigned to these personnel are understood and carried
out. The individual roles and corresponding responsibilities typically
involve, but are not limited to, the following:
(1) The role of program and technical personnel in monitoring the
contract to assist or advise the contracting officer (or act as his/her
representative when so designated by the contracting officer) in
activities such as:
(i) Providing technical monitoring during contract performance, and
issuing letters to the contractor and contracting officer relating to
delivery, acceptance, or rejection in accordance with the terms of the
contract;
(ii) Assessing contractor performance, including inspection and
testing of products and evaluation of reports and data;
(iii) Recommending necessary changes to the schedule of work and
period of performance in order to accomplish the objectives of the
contract. This shall be accomplished by a written request to the
contracting officer, together with an appropriate justification and
funds availability citation;
(iv) Reviewing invoices/vouchers and recommending approval/
disapproval action by the contracting officer, to include comments
regarding anything unusual discovered in the review;
(v) Reviewing and recommending approval or disapproval of
subcontractors, overtime, travel, and key personnel changes; and
(vi) Participating, as necessary, in various phases of the contract
closeout process.
(2) The role of the project officer in performing required aspects
of the contract monitoring process. In addition to those applicable
activities set forth in paragraph (c)(1) of this section, the project
officer shall:
(i) Submit periodic reports to the contracting officer that
concisely explain the status of the contract, and include recommended
actions for any problems reported. Provide the contracting officer with
written notification of evaluation and approval/disapproval of contract
deliverables and of completion of tasks or phases. The contracting
officer will, in turn, provide the contractor with written notification
of approval or disapproval unless the responsibility has been delegated
by the contracting officer, in which case the person responsible for
such action will notify the contractor and provide a copy to the
contracting officer for inclusion in the contract file;
(ii) Monitor the technical aspects of the contractor's business and
technical progress, identify existing and potential problems that
threaten performance, and immediately inform the contracting officer of
deviations from contract objectives, or from any technical or delivery
requirements, so that remedial measures may be instituted accordingly;
(iii) Provide immediate notification to the head of the program
office responsible for the program whenever it is determined that
program objectives are not being met, together with specific
[[Page 1378]]
recommendations of action to be taken. A copy of the project officer's
report and recommendation shall be transmitted to the contracting
officer for appropriate action;
(iv) Submit, within 120 days after contract completion, a final
assessment report to the contracting officer. The report should include
analysis of the contractor's performance, including the contract and
program objectives achieved and misses. A copy of the final assessment
report shall be forwarded to the head of the program office responsible
for the program for management review and follow-up, as necessary; and
(v) Accompany and/or provide, when requested, technical support to
the HHS auditor in the conduct of floor checks.
(3) The role of the contract administrator, auditor, cost analyst,
and property administrator in assisting or advising the contracting
officer in postaward administration activities such as:
(i) Evaluation of contractor systems and procedures, to include
accounting policies and procedures, purchasing policies and practices,
property accounting and control, wage and salary plans and rate
structures, personnel policies and practices, etc.;
(ii) Processing of disputes under the Disputes clause and any
resultant appeals;
(iii) Modification or termination of the contract; and
(iv) Determination of the allowability of cost charges to incentive
or cost-reimbursement type contracts and progress payments under fixed-
price contracts. This is especially important when award is made to new
organizations or those with financial weaknesses.
(d) The contracting officer is responsible for assuring that
contractor performance and contract monitoring are carried out in
conformance with contract provisions. If performance is not
satisfactory or if problems are anticipated, it is essential that the
contracting officer take immediate action to protect the Government's
rights under the contract. The contracting officer shall notify his/her
immediate supervisor of problems that cannot be resolved within
contract limitations and whenever contract or program objectives are
not met. The notification shall include a statement of action being
take by the contracting officer.
342.7003 Withholding of contract payments.
342.7003-1 Policy.
(a) All solicitations and resultant contracts shall contain a
withholding of contract payments clause and an excusable delays clause,
or a clause which incorporates the definition of excusable delays.
(b) The transmittal letter used to convey the contract to each
contractor shall contain a notice which highlights the contractor's
agreement with the withholding of contract payments clause.
(c) No contract payment shall be made when any report required to
be submitted by the contractor is overdue, or the contractor fails to
perform or deliver work or services as required by the contract.
(d) The contracting officer shall issue a ten-day cure notice or
initiate appropriate termination action for any failure in the
contractor's performance as stated in the preceding paragraph (c).
342.7003-2 Procedures.
(a) The contracting officer is responsible for initiating immediate
action to protect the Government's rights whenever the contractor fails
to comply with either the delivery or reporting provisions of the
contract. Compliance with the reporting provisions includes those
reports to be submitted directly to the payment office. If such a
report is not submitted on time, the contracting officer is to be
notified promptly by the payment officer.
(b) When the contract contains a termination for default clause,
the contractor's failure to either submit any required report when due
or perform or deliver services or work when required by the contract is
to be considered a default in performance. In either circumstance, the
contracting officer is to immediately issue a formal ten-day cure
notice pursuant to the default clause. The cure notice is to follow the
format prescribed in FAR 49.607 and is to include a statement to the
effect that contract payments will be withheld if the default is not
cured or is not determined to be excusable.
(1) If the default is cured or is determined to be excusable, the
contracting officer is not to initiate the withholding action.
(2) If the default is not determined to be excusable or a response
is not received within the allotted time, the contracting officer is to
initiate withholding action on all contract payments and is to
determine whether termination for default or other action would be in
the best interest of the Government.
(c) When the contract does not contain a termination for default
clause, the contractor's failure to either submit any required report
when due or perform or deliver services or work when required by the
contract is to be considered a failure to perform. In either
circumstance, the contracting officer is to immediately issue a written
notice to the contractor specifying the failure and providing a period
of ten days, or longer period as determined necessary by the
contracting officer, in which the contractor is to cure the failure or
establish an excusable delay. The contracting officer is to include a
statement in the written notice to the effect that contract payments
will be withheld if the failure is not cured or is not determined to be
excusable.
(1) If the failure is cured or is determined to be excusable, the
contracting officer is not to initiate the withholding action.
(2) If the failure is not determined to be excusable or a response
is not received within the allotted time, the contracting officer is to
initiate withholding action on all contract payments and is to
determine whether termination for convenience or other action would be
in the best interest of the Government.
(d) The contracting officer should consult FAR Subpart 49.4 for
further guidance before taking any of the actions described in this
section.
342.7003-3 Withholding payments.
(a) When making the determination that contract payments should be
withheld in accordance with the Withholding of Contract Payments
clause, the contracting officer is to immediately notify the servicing
finance office in writing of the determination to suspend payments. The
notice of suspension is to contain all elements of information required
by the payment office to properly identify the contract and the
applicable accounts involved.
(b) The contracting officer is to immediately notify the contractor
in writing that payments have been suspended until the default or
failure is cured.
(c) When the contractor cures the default or failure, the
contracting officer is to immediately notify, in writing, all
recipients of the notice of suspension that the suspension is to be
lifted and contract payments are to be resumed.
(d) When exercising actions regarding the withholding of payment
procedures, the contracting officer must be careful not to waive any of
the Government's rights when corresponding with the
[[Page 1379]]
contractor or when taking any other actions.
Subpart 342.71--Administrative Actions for Cost Overruns
342.7100 Scope of subpart.
This subpart sets forth the procedures to be followed when a cost
overrun is anticipated; i.e., the allowable actual cost of performing a
cost-reimbursement type contract is expected to exceed the total
estimated cost specified in the contract.
342.7101 Contract administration.
342.7101-1 General.
Upon receipt of information that a contractor's accumulated cost
and projected expenditures will exceed the limit of funds obligated by
the contract, the contracting officer shall coordinate immediately with
the appropriate program office to determine whether the contract should
be modified or terminated. If the contracting officer receives
information from a source other than the contractor that a cost overrun
is anticipated, the contracting officer shall verify the information
with the contractor, and remind the contractor of the notification
requirements of the Limitation of Cost clause.
342.7101-2 Procedures.
(a) Upon notification that a cost overrun is anticipated, the
contracting officer shall inform the contractor to submit a request for
additional funds which is to include:
(1) Name and address of contractor.
(2) Contract number and expiration date.
(3) Contract item(s) and amount(s) creating overrun.
(4) The elements of cost which changed from the original estimate
(i.e., labor, material, travel, overhead, etc.) to be furnished in the
following format:
(i) Original estimate,
(ii) Costs incurred to date,
(iii) Estimated cost to completion,
(iv) Revised estimate, and
(v) Amount of adjustment.
(5) The factors responsible for the increase, i.e., error in
estimate, changed conditions, etc.
(6) The latest date by which funds must be available for commitment
to avoid contract slippage, work stoppage, or other program impairment.
(b) When the contractor submits a notice of an impending overrun,
the contracting officer shall:
(1) Immediately advise the appropriate program office and furnish a
copy of the notice and any other data received;
(2) Request audit or cost advisory services, and technical support,
as necessary, for evaluation of information and data received; and
(3) Maintain continuous follow-up with the program office to obtain
a timely decision as to whether the work under the contract should be
continued and additional funds provided, or the contract terminated.
The decision of the program office must be supported by an appropriate
written statement and funding authority, or a formal request for
termination, when applicable. After a programming and funding decision
is received from the program office, the contracting officer shall
promptly notify the contractor in writing that:
(i) A specified amount of additional funds has been allotted to the
contract by a contractual instrument; or
(ii) Work will be discontinued when the funds allotted to the
contract have been exhausted, and that any work performed after that
date is at the contractor's risk; or
(iii) The Government is considering whether additional funds should
be allotted to the contract and will notify the contractor as soon as
possible, but that any work performed after the funds then allocated to
the contract have been exhausted is at the contractor's risk. Timely,
formal notification of the Government's intention is essential in order
to preclude loss of contractual rights in the event of dispute,
termination, or litigation.
(c) If program requirements permit, contracting officers should
refrain from issuing any contractual documents which will require new
work or an extension of time, pending resolution of an overrun or
additional fund request.
342.7102 Contract modifications.
(a) Modifications to contracts containing the Limitation of Cost
clause shall include either:
(1) A provision increasing the estimated or ceiling amount referred
to in the Limitation of Cost clause of the contract and stating that
the clause will thereafter apply in respect to the increased amount; or
(2) A provision stating that the estimated or ceiling amount
referred to in the contract is not changed by the modification and that
the Limitation of Cost clause will continue to apply with respect to
the amount in effect prior to the modification.
(b) A fixed-fee provided in a contract shall not be changed when
funding a cost overrun. Changes in fixed-fee will be made only to
reflect changes in the scope of work which justify an increase or
decrease in fee.
PART 352--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
Subpart 352.2--Texts of Provisions and Clauses
Sec.
352.202-1 Definitions.
352.215-1 Instructions to offerors--Competitive acquisition.
352.215-70 Late proposals and revisions.
352.216-72 Additional cost principles.
352.223-70 Safety and health.
352.224-70 Confidentiality of information.
352.228-7 Insurance--Liability to third persons.
352.232-9 Withholding of contract payments.
352.232-74 Estimated cost and fixed fee--Incrementally funded
contract.
352.232-75 Incremental funding.
352.233-70 Litigation and claims.
352.242-71 Final decisions on audit findings.
352.249-14 Excusable delays.
352.270-1 Accessibility of meetings, conferences, and seminars to
persons with disabilities.
352.270-2 Indian preference.
352.270-3 Indian preference program.
352.270-4 Pricing of adjustments.
352.270-5 Key personnel.
352.270-6 Publications and publicity.
352.270-7 Paperwork Reduction Act.
352.270-8 Protection of human subjects.
352.270-9 Care of laboratory animals.
Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).
Subpart 352.2--Texts of Provisions and Clauses
352.202-1 Definitions.
As prescribed in 302.201, the FAR Definitions clause at 52.202-1 is
to be used as modified:
Definitions (Jan 1997)
(a) Substitute the following as paragraph (a):
``(a) The term ``Secretary'' or ``Head of the Agency'' (also
called ``Agency Head'') means the Secretary, Under Secretary, or any
Assistant Secretary, Administrator or Commissioner of the Department
of Health and Human Services; and the term ``his/her duly authorized
representative'' means any person, persons, or board authorized to
act for the Secretary.''
(b) Add the following paragraph (h) or its alternate, as
appropriate:
(h) The term ``Project Officer'' means the person representing
the Government for the purpose of technical monitoring of contract
performance. The Project Officer is not authorized to issue any
instructions or directions which effect any increases or decreases
in the scope of work or which would result in the increase or
decrease of the price of this contract or a change in the delivery
dates or performance period of this contract.''
or
Alternate:
``(h) The term ``Project Officer'' means the person representing
the Government for the
[[Page 1380]]
purpose of technical monitoring of contract performance. The Project
Officer is not authorized to issue any instructions or directions
which effect any increases or decreases in the scope of work or
which would result in the increase or decrease of the cost of this
contract or a change in performance period of this contract. In
addition, the Project Officer is not authorized to receive or act
upon the Contractor's notification of a revised cost estimate
pursuant to the Limitation of Cost or Limitation of Funds clause of
this contract.''
352.215-1 Instructions to offerors--Competitive acquisition.
Insert the following paragraph (e) in place of paragraph (e) of the
provision at FAR 52.215-1:
(e) Restriction on disclosure and use of data. (1) The proposal
submitted in response to this request may contain data (trade
secrets; business data, e.g., commercial information, financial
information, and cost and pricing data; and technical data) which
the offeror, including its prospective subcontractor(s), does not
want used or disclosed for any purpose other than for evaluation of
the proposal. The use and disclosure of any data may be so
restricted; provided, that the Government determines that the data
is not required to be disclosed under the Freedom of Information
Act, 5 U.S.C. 552, as amended, and the offeror marks the cover sheet
of the proposal with the following legend, specifying the particular
portions of the proposal which are to be restricted in accordance
with the conditions of the legend. The Government's determination to
withhold or disclose a record will be based upon the particular
circumstances involving the record in question and whether the
record may be exempted from disclosure under the Freedom of
Information Act. The legend reads:
Unless disclosure is required by the Freedom of Information Act,
5 U.S.C. 552, as amended, (the Act) as determined by Freedom of
Information (FOI) officials of the Department of Health and Human
Services, data contained in the portions of this proposal which have
been specifically identified by page number, paragraph, etc. by the
offeror as containing restricted information shall not be used or
disclosed except for evaluation purposes.
The offeror acknowledges that the Department may not be able to
withhold a record (data, document, etc.) nor deny access to a record
requested pursuant to the Act and that the Department's FOI
officials must make that determination. The offeror hereby agrees
that the Government is not liable for disclosure if the Department
has determined that disclosure is required by the Act.
If a contract is awarded to the offeror as a result of, or in
connection with, the submission of this proposal, the Government
shall have right to use or disclose the data to the extent provided
in the contract. Proposals not resulting in a contract remain
subject to the Act.
The offeror also agrees that the Government is not liable for
disclosure or use of unmarked data and may use or disclose the data
for any purpose, including the release of the information pursuant
to requests under the Act.
The data subject to this restriction are contained in pages
(insert page numbers, paragraph designations, etc. or other
identification).
(2) In addition, the offeror should mark each page of data it
wishes to restrict with the following statement:
``Use or disclosure of data contained on this page is subject to
the restriction on the cover sheet of this proposal or quotation.''
(3) Offerors are cautioned that proposals submitted with
restrictive legends or statements differing in substance from the above
legend may not be considered for award. The Government reserves the
right to reject any proposal submitted with a nonconforming legend.
352.215-70 Late proposals and revisions.
As prescribed in 315.208, the following provision may be included
in the solicitation:
Late Proposals and Revisions (Nov 1986)
Notwithstanding the procedures contained in FAR 52.215-1(c)(3)
of the provision of this solicitation entitled Instructions to
Offerors--Competitive Acquisition, a proposal received after the
date specified for receipt may be considered if it offers
significant cost or technical advantages to the Government; and it
was received before proposals were distributed for evaluation, or
within five calendar days after the exact time specified for
receipt, whichever is earlier.
(End of provision)
352.216-72 Additional cost principles.
As prescribed in 316.307(j), insert the following clause in all
solicitations and resultant cost-reimbursement contracts:
Additional Cost Principles (Oct 90)
(a) Bid and proposal costs. (1) Bid and proposal costs are the
immediate costs of preparing bids, proposals, and applications for
potential Federal and non-Federal contracts, grants, and agreements,
including the development of scientific, cost, and other data needed
to support the bids, proposals, and applications.
(2) Bid and proposal costs of the current accounting period are
allowable as indirect costs.
(3) Bid and proposal costs of past accounting periods are
unallowable in the current period. However, if the organization's
established practice is to treat these costs by some other method,
they may be accepted if they are found to be reasonable and
equitable.
(4) Bid and proposal costs do not include independent research
and development costs covered by the following paragraph, or
preaward costs covered by paragraph 33 of Attachment B to OMB
Circular A-122.
(b) Independent research and development costs. (1) Independent
research and development is research and development conducted by an
organization which is not sponsored by Federal or non-Federal
contracts, grants, or other agreements.
(2) Independent research and development shall be allocated its
proportionate share of indirect costs on the same basis as the
allocation of indirect costs to sponsored research and development.
(3) The cost of independent research and development, including
its proportionate share of indirect costs, are unallowable.
(End of clause)
352.223-70 Safety and health.
The following clause, or one reading substantially the same, shall
be used as prescribed in 323.7002:
Safety and Health (Jan 1998)
(a) To help ensure the protection of the life and health of all
persons, and to help prevent damage to property, the Contractor
shall comply with all Federal, State and local laws and regulations
applicable to the work being performed under this contract. These
laws are implemented and/or enforced by the Environmental Protection
Agency, Occupational Safety and Health Administration and other
agencies at the Federal, State and local levels (Federal, State and
local regulatory/enforcement agencies).
(b) Further, the Contractor shall take or cause to be taken
additional safety measures as the Contracting Officer, in
conjunction with the project or other appropriate officers,
determines to be reasonably necessary. If compliance with these
additional safety measures results in an increase or decrease in the
cost or time required for performance of any part of work under this
contract, an equitable adjustment will be made in accordance with
the applicable ``Changes'' clause set forth in this contract.
(c) The Contractor shall maintain an accurate record of, and
promptly report to the Contracting Officer, all accidents or
incidents resulting in the exposure of persons to toxic substances,
hazardous materials or hazardous operations; the injury or death of
any person; and/or damage to property incidental to work performed
under the contract and all violations for which the Contractor has
been cited by any Federal, State or local regulatory/enforcement
agency. The report shall include a copy of the notice of violation
and the findings of any inquiry or inspection, and an analysis
addressing the impact these violations may have on the work
remaining to be performed. The report shall also state the required
action(s), if any, to be taken to correct any violation(s) noted by
the Federal, State or local regulatory/enforcement agency and the
time frame allowed by the agency to accomplish the necessary
corrective action.
(d) If the Contractor fails or refuses to comply with the
Federal, State or local regulatory/enforcement agency's directive(s)
regarding any violation(s) and prescribed corrective action(s), the
Contracting Officer may issue an order stopping all or part of the
work until satisfactory corrective action (as approved by the
Federal, State or local regulatory/enforcement agencies) has been
taken and documented to the Contracting Officer. No part of the time
lost due to any
[[Page 1381]]
stop work order shall be subject to a claim for extension of time or
costs or damages by the Contractor.
(e) The Contractor shall insert the substance of this clause in
each subcontract involving toxic substances, hazardous materials, or
hazardous operations. Compliance with the provisions of this clause
by subcontractors will be the responsibility of the Contractor.
(End of Clause)
352.224-70 Confidentiality of information.
The following clause is covered by the policy set forth in Subpart
324.70 and is to be used in accordance with the instructions set forth
in 324.7004.
Confidentiality of Information (Apr 1984)
(a) Confidential information, as used in this clause, means
information or data of a personal nature about an individual, or
proprietary information or data submitted by or pertaining to an
institution or organization.
(b) In addition to the types of confidential information
described in paragraph (a) of this clause, information which might
require special consideration with regard to the timing of its
disclosure may derive from studies or research, during which public
disclosure of preliminary unvalidated findings could create
erroneous conclusions which might threaten public health or safety
if acted upon.
(c) The Contracting Officer and the Contractor may, by mutual
consent, identify elsewhere in this contract specific information
and/or categories of information which the Government will furnish
to the Contractor or that the Contractor is expected to generate
which is confidential. Similarly, the Contracting Officer and the
Contractor may, by mutual consent, identify such confidential
information from time to time during the performance of the
contract. Failure to agree will be settled pursuant to the
``Disputes'' clause.
(d) If it is established elsewhere in this contract that
information to be utilized under this contract, or a portion
thereof, is subject to the Privacy Act, the Contractor will follow
the rules and procedures of disclosure set forth in the Privacy Act
of 1974, 5 U.S.C. 552a, and implementing regulations and policies,
with respect to systems of records determined to be subject to the
Privacy Act.
(e) Confidential information, as defined in paragraph (a) of
this clause, that is information or data of a personal nature about
an individual, or proprietary information or data submitted by or
pertaining to an institution or organization, shall not be disclosed
without the prior written consent of the individual, institution, or
organization.
(f) Written advance notice of at least 45 days will be provided
to the Contracting Officer of the Contractor's intent to release
findings of studies or research, which have the possibility of
adverse effects on the public or the Federal agency, as described in
paragraph (b) of this clause. If the Contracting Officer does not
pose any objections in writing within the 45-day period, the
Contractor may proceed with disclosure. Disagreements not resolved
by the Contractor and the Contracting Officer will be settled
pursuant to the ``Disputes'' clause.
(g) Whenever the Contractor is uncertain with regard to the
proper handling of material under the contract, or if the material
in question is subject to the Privacy Act or is confidential
information subject to the provisions of this clause, the Contractor
should obtain a written determination from the Contracting Officer
prior to any release, disclosure, dissemination, or publication.
(h) Contracting Officer determinations will reflect the result
of internal coordination with appropriate program and legal
officials.
(i) The provisions of paragraph (e) of this clause shall not
apply when the information is subject to conflicting or overlapping
provisions in other Federal, State or local laws.
(End of clause)
352.228-7 Insurance--Liability to third persons.
As prescribed in 328.311-2, contracting officers shall include the
following clause in all cost-reimbursement contracts, in lieu of the
clause at FAR 52.228-7:
Insurance--Liability to Third Persons (Dec 1991)
(a)(1) Except as provided in paragraph (a)(2) immediately
following, or in paragraph (h) of this clause (if the clause has a
paragraph (h)), the Contractor shall provide and maintain workers'
compensation, employer's liability, comprehensive general liability
(bodily injury), comprehensive automobile liability (bodily injury
and property damage) insurance, and such other insurance as the
Contracting Officer may require under this contract.
(2) The Contractor may, with the approval of the Contracting
Officer, maintain a self-insurance program; provided that, with
respect to workers' compensation, the Contractor is qualified
pursuant to statutory authority.
(3) All insurance required by this paragraph shall be in form
and amount and for those periods as the Contracting Officer may
require or approve and with insurers approved by the Contracting
Officer.
(b) The Contractor agrees to submit for the Contracting
Officer's approval, to the extent and in the manner required by the
Contracting Officer, any other insurance that is maintained by the
Contractor in connection with performance of this contract and for
which the Contractor seeks reimbursement.
(c) Except as provided in paragraph (h) of this clause (if the
clause has a paragraph (h)), the Contractor shall be reimbursed:
(1) For that portion of the reasonable cost of insurance
allocable to this contract, and required or approved under this
clause; and
(2) For certain liabilities (and expenses incidental to such
liabilities) to third persons not compensated by insurance or
otherwise within the funds available under the Limitation of Cost or
the Limitation of Funds clause of this contract. These liabilities
must arise out of the performance of this contract, whether or not
caused by the negligence of the Contractor or the Contractor's
agents, servants, or employees, and must be represented by final
judgements or settlements approved in writing by the Government.
These liabilities are for:
(i) Loss of or damage to property (other than property owned,
occupied, or used by the Contractor, rented to the Contractor, or in
the care, custody, or control of the Contractor); or
(ii) Death or bodily injury.
(d) The Government's liability under paragraph (c) of this
clause is limited to the amounts reflected in final judgements, or
settlements approved in writing by the Government, but in no event
to exceed the funds available under the Limitation of Cost or
Limitation of Funds clause of this contract. Nothing in this
contract shall be construed as implying that, at a later date, the
Government will request, or the Congress will appropriate, funds
sufficient to meet any deficiencies.
(e) The Contractor shall not be reimbursed for liabilities (and
expenses incidental to such liabilities):
(1) For which the Contractor is otherwise responsible under the
express terms of any clause specified in the Schedule or elsewhere
in the contract:
(2) For which the Contractor has failed to insure or to maintain
insurance as required by the Contracting Officer; or
(3) That result from willful misconduct or lack of good faith on
the part of the Contractor's directors, officers, managers,
superintendents, or other representatives who have supervision or
direction of:
(i) All or substantially all of the Contractor's business;
(ii) All or substantially all of the Contractor's operations at
any one plant or separate location in which this contract is being
performed; or
(iii) A separate and complete major industrial operation in
connection with the performance of this contract.
(f) The provisions of paragraph (e) of this clause shall not
restrict the right of the Contractor to be reimbursed for the cost
of insurance maintained by the Contractor in connection with the
performance of this contract, other than insurance required in
accordance with this clause; provided, that such cost is allowable
under the Allowable Cost and Payment clause of this contract.
(g) If any suit or action is filed or any claim is made against
the Contractor, the cost and expense of which may be reimbursable to
the Contractor under this contract, and the risk of which is then
uninsured or is insured for less than the amount claimed, the
Contractor shall:
(1) Immediately notify the Contracting Officer and promptly
furnish copies of all pertinent papers received;
(2) Authorize Government representatives to collaborate with
counsel for the insurance carrier in settling or defending the claim
when the amount of the liability claimed exceeds the amount of
coverage; and
(3) Authorize Government representatives to settle or defend the
claim and to represent the Contractor in or to take charge of any
litigation, if required by the Government,
[[Page 1382]]
when the liability is not insured or covered by the bond. The
Contractor may, at its own expense, be associated with the
Government representatives in any such claim or litigation.
(End of clause)
Alternate I (APR 1984). If the successful offeror represents in
the offer that the offeror is partially immune from tort liability
as a State agency, add the following paragraph (h) to the basic
clause:
(h) Notwithstanding paragraphs (a) and (c) of this clause--
(1) The Government does not assume any liability to third
persons, nor will the Government reimburse the Contractor for its
liability to third persons, with respect to loss due to death,
bodily injury, or damage to property resulting in any way from the
performance of this contract or any subcontract under this contract;
and
(2) The Contractor need not provide or maintain insurance
coverage as required by paragraph (a) of this clause; provided, that
the Contractor may obtain any insurance coverage deemed necessary,
subject to approval by the Contracting Officer as to form, amount,
and duration. The Contractor shall be reimbursed for the cost of
such insurance and, to the extent provided in paragraph (c) of this
clause, to liabilities to third persons for which the Contractor has
obtained insurance coverage as provided in this paragraph, but for
which such coverage is insufficient in amount.
(End of clause)
Alternate II (APR 1984). If the successful offeror represents in
the offer that the offeror is totally immune from tort liability as
a State agency, substitute the following paragraphs (a) and (b) for
paragraphs (a) and (b) of the basic clause:
(a) The Government does not assume any liability to third
persons, nor will the Government reimburse the Contractor for its
liability to third persons, with respect to loss due to death,
bodily injury, or damage to property resulting in any way from the
performance of this contract or any subcontract under this contract.
(b) If any suit or action is filed, or if any claim is made
against the Contractor, the cost and expense of which may be
reimbursable to the Contractor under this contract, the Contractor
shall immediately notify the Contracting Officer and promptly
furnish copies of all pertinent papers received by the Contractor.
The Contractor shall, if required by the Government, authorize
Government representatives to settle or defend the claim and to
represent the Contractor in or take charge of any litigation. The
Contractor may, at its own expense, be associated with the
Government representatives in any such claims or litigation
(End of clause)
352.232-9 Withholding of contract payments.
Insert the following clause in all solicitations and contracts
other than purchase orders:
Withholding of Contract Payments (Apr 1984)
Notwithstanding any other payment provisions of this contract,
failure of the Contractor to submit required reports when due or
failure to perform or deliver required work, supplies, or services,
will result in the withholding of payments under this contract
unless such failure arises out of causes beyond the control, and
without the fault or negligence of the Contractor as defined by the
clause entitled ``Excusable Delays'' or ``Default'', as applicable.
The Government shall promptly notify the Contractor of its intention
to withhold payment of any invoice or voucher submitted.
(End of clause)
352.232-74 Estimated cost and fixed fee-Incrementally funded contract.
The following clause, or one reading substantially as it, shall
be included in the Special Provisions of an incrementally funded
contract:
Consideration-Estimated Cost and Fixed Fee (Apr 1984)
(a) It is estimated that the total cost to the Government for
full performance of this contract will be $______, of which the sum
of $______ represents the estimated reimbursable costs and $______
represents the fixed-fee.
(b) Total funds currently available for payment and allotted to
this contract are $______, of which $ represents the estimated
reimbursement costs and $______ represents the fixed-fee. For
further provisions on funding, see the Limitations of Funds clause.
(c) It is estimated that the amount currently allotted will
cover performance of Phase I which is scheduled to be completed by
(date) ______.
(d) The Contracting Officer may allot additional funds to the
contract without the concurrence of the Contractor.
(End of clause)
352.232-75 Incremental funding.
The following provision shall be included in all requests for
proposals whenever the use of incremental funding is contemplated:
Incremental Funding (Apr 1984)
(a) Sufficient funds are not presently available to cover the
total cost of the complete multiple year project described in this
solicitation. However, it is the Government's intention to negotiate
and award a contract using the incremental funding concepts
described in the clause entitled Limitation of Funds. Under the
clause, which will be included in the resultant contract, initial
funds will be obligated under the contract to cover the first year
of performance. Additional funds are intended to be allotted to the
contract by contract modification, up to and including the full
estimated cost of the contract, to accomplish the entire project.
While it is the Government's intention to progressively fund this
contract over the entire period of performance up to and including
the full estimated cost, the Government will not be obligated to
reimburse the Contractor for costs incurred in excess of the
periodic allotments, nor will the Contractor be obligated to perform
in excess of the amount allotted.
(b) The Limitation of Funds clause to be included in the
resultant contract shall supersede the Limitation of Cost clause
found in the General Provisions.
(End of provision)
352.233-70 Litigation and claims.
Insert the following clause in all solicitations and resultant
cost-reimbursement contracts:
Litigation and Claims (Apr 1984)
The Contractor shall give the Contracting Officer immediate
notice in writing of any action, including any proceeding before an
administrative agency, filed against the Contractor arising out of
the performance of this contract, including, but not limited to the
performance of any subcontract hereunder; and any claim against the
Contractor the cost and expense of which is allowable under the
clause entitled ``Allowable Cost and Payment.'' Except as otherwise
directed by the Contracting Officer, the Contractor shall furnish
immediately to the Contracting Officer copies of all pertinent
papers received by the Contractor with respect to such action or
claim. To the extent not in conflict with any applicable policy of
insurance, the Contractor may, with the Contracting Officer's
approval, settle any such action or claim. If required by the
Contracting Officer, the Contractor shall effect an assignment and
subrogation in favor of the Government of all the Contractor's
rights and claims (except those against the Government) arising out
of any such action or claim against the Contractor; and authorize
representatives of the Government to settle or defend any such
action or claim and to represent the Contractor in, or to take
charge of, any action. If the settlement or defense of an action or
claim is undertaken by the Government, the Contractor shall furnish
all reasonable assistance in effecting a settlement or asserting a
defense. Where an action against the Contractor is not covered by a
policy of insurance, the Contractor shall, with the approval of the
Contracting Officer, proceed with the defense of the action in good
faith. The Government shall not be liable for the expense of
defending any action or for any costs resulting from the loss
thereof to the extent that the Contractor would have been
compensated by insurance which was required by law or regulation or
by written direction of the Contracting Officer, but which the
Contractor failed to secure through its own fault or negligence. In
any event, unless otherwise expressly provided in this contract, the
Contractor shall not be reimbursed or indemnified by the Government
for any liability loss, cost or expense, which the Contractor may
incur or be subject to by reason of any loss, injury or damage, to
the person or to real or personal property of any third parties as
may accrue during, or arise from, the performance of this contract.
(End of clause)
[[Page 1383]]
352.242-71 Final decisions on audit findings.
Insert the following clause in all solicitations and resultant
cost-reimbursement contracts.
Final Decisions on Audit Findings (Apr 1984)
For the purpose of issuing final decisions under the Disputes
clause of this contract concerning monetary audit findings, the
Contracting Officer shall be that person with ultimate
responsibility for making that decision in accordance with Chapter
1-105, Resolution of Audit Findings, of the Department's Grants
Administration Manual.
(End of clause)
352.249-14 Excusable delays.
Insert the following clause in all solicitations and resultant
contracts other than purchase orders which do not have either a default
or excusable delays clause.
Excusable Delays (Apr 1984)
(a) Except with respect to failures of subcontractors, the
Contractor shall not be considered to have failed in performance of
this contract if such failure arises out of causes beyond the
control and without the fault or negligence of the Contractor.
(b) Such causes may include, but are not restricted to, acts of
God or of the public enemy, acts of the Government in either its
sovereign or contractual capacity, fires, floods, epidemics,
quarantine restrictions, strikes, freight embargoes, and unusually
severe weather, but in every case the failure to perform must be
beyond the control and without the fault or negligence of the
Contractor. If the failure to perform is caused by the failure of a
subcontractor to perform, and if such failure arises out of causes
beyond the control of both the Contractor and subcontractor, and
without the fault or negligence of either of them, the Contractor
shall not be deemed to have failed in performance of the contract,
unless: the supplies or services to be furnished by the
subcontractor were obtainable from other sources, the Contracting
Officer shall have ordered the Contractor in writing to procure such
supplies or services from such other sources, and the Contractor
shall have failed to comply reasonably with such order. Upon request
of the Contractor, the Contracting officer shall ascertain the facts
and extent of such failure and, if he/she shall determine that any
failure to perform was occasioned by any one or more of the said
causes, the delivery schedule shall be revised accordingly, subject
to the rights of the Government under the termination clause hereof.
(As used in this clause, the terms ``subcontractor'' and
``subcontractors'' mean subcontractor(s) at any tier.)
(End of clause)
352.270-1 Accessibility of meetings, conferences, and seminars to
persons with disabilities.
The following clause is to be used in accordance with 370.102:
Accessibility of Meetings, Conferences, and Seminars to Persons with
Disabilities (Jan 1999)
The Contractor agrees as follows:
(a) Planning. The Contractor will develop a plan to assure that
any meeting, conference, or seminar held pursuant to this contract
will meet or exceed the minimum accessibility standards set forth in
28 CFR 36.101-36.500 and Appendix A: ADA Accessibility Guidelines
(ADAAG). The plan shall be submitted to the project officer for
approval prior to initiating action. ( A consolidated or master plan
for contracts requiring numerous meetings, conferences, or seminars
may be submitted in lieu of separate plans.)
(b) Facilities. Any facility to be utilized for meetings,
conferences, or seminars in performance of this contract shall be in
compliance with 28 CFR 36.101-36.500 and Appendix A. The Contractor
shall determine, by an on-site inspection, that the facility meets
these requirements.
(1) Parking. Parking shall be in compliance with 28 CFR 36.101-
36.500 and Appendix A.
(2) Entrances. Entrances shall be in compliance with 28 CFR
36.101-36.500 and Appendix A.
(3) Meeting Rooms. Meeting rooms, including seating
arrangements, shall be in compliance with 28 CFR 36.101-36.500 and
Appendix A. In addition, stages, speaker platforms, etc. which are
to be used by persons in wheelchairs must be accessible by ramps or
lifts. When used, the ramp may not necessarily be independently
negotiable if space does not permit. However, any slope over 1:12
must be approved by the Project Officer and the Contractor must
provide assistance to negotiate access to the stage or platform.
(4) Restrooms. Restrooms shall be in compliance with 28 CFR
36.101-36.500 and Appendix A.
(5) Eating Facilities. Eating facilities in the meeting facility
must also comply with 28 CFR 36.101-36.500 and Appendix A.
(6) Overnight Facilities. If overnight accommodations are
required, the facility providing the overnight accommodations shall
also comply with 28 CFR 36.101-36.500 and Appendix A.
(7) Water Fountains. Water fountains shall comply with 28 CFR
36.101-36.500 and Appendix A.
(8) Telephones. Public telephones shall comply with 28 CFR
36.101-36.500 and Appendix A.
(c) Provisions of Services for Attendees with Sensory
Impairments.
(1) The Contractor, in planning the meeting, conference, or
seminar, shall include in all announcements and other materials
pertaining to the meeting, conference, or seminar a notice
indicating that services will be made available to persons with
sensory impairments attending the meeting, if requested within five
(5) days of the date of the meeting, conference, or seminar. The
announcement(s) and other material(s) shall indicate that persons
with sensory impairments may contact a specific person(s), at a
specific address and phone number(s), to make their service
requirements known. The phone number(s) shall include a
telecommunication device for the deaf (TDD).
(2) The Contractor shall provide, at no additional cost to the
individual, those services required by persons with sensory
impairments to insure their complete participation in the meeting,
conference, or seminar.
(3) As a minimum, when requested in advance, the Contractor
shall provide the following services:
(i) For persons with hearing impairments, qualified
interpreters. Also, the meeting rooms will be adequately illuminated
so signing by interpreters can be easily seen.
(ii) For persons with vision impairments, readers and/or
cassette materials, as necessary, to enable full participation.
Also, meeting rooms will be adequately illuminated.
(iii) Agenda and other conference material(s) shall be
translated into a usable form for persons with sensory impairments.
Readers, braille translations, large print text, and/or tape
recordings are all acceptable. These materials shall be available to
individuals with sensory impairments upon their arrival.
(4) The Contractor is responsible for making a reasonable effort
to ascertain the number of individuals with sensory impairments who
plan to attend the meeting, conference, or seminar. However, if it
can be determined that there will be no person with sensory
impairment in attendance, the provision of those services under
paragraph (c) of this clause for the nonrepresented group, or
groups, is not required.
(End of clause)
352.270-2 Indian preference.
The following clause shall be used as prescribed in 370.202(a):
Indian Preference (Apr 1984)
(a) The Contractor agrees to give preference in employment
opportunities under this contract to Indians who can perform
required work, regardless of age (subject to existing laws and
regulations), sex, religion, or tribal affiliation. To the extent
feasible and consistent with the efficient performance of this
contract, the Contractor further agrees to give preference in
employment and training opportunities under this contract to Indians
who are not fully qualified to perform regardless of age (subject to
existing laws and regulations), sex, religion, or tribal
affiliation. The Contractor also agrees to give preference to Indian
organizations and Indian-owned economic enterprises in the awarding
of any subcontracts to the extent feasible and consistent with the
efficient performance of this contract. The Contractor shall
maintain statistical records as are necessary to indicate compliance
with this paragraph.
(b) In connection with the Indian employment preference
requirements of this clause, the Contractor shall provide
opportunities for training incident to such employment. Such
training shall include on-the-job, classroom or apprenticeship
training which is designed to increase the vocational effectiveness
of an Indian employee.
(c) If the Contractor is unable to fill its employment and
training opportunities after giving full consideration to Indians as
required by this clause, those needs may be
[[Page 1384]]
satisfied by selection of persons other than Indians in accordance
with the clause of this contract entitled ``Equal Opportunity.''
(d) If no Indian organizations or Indian-owned economic
enterprises are available under reasonable terms and conditions,
including price, for awarding of subcontracts in connection with the
work performed under this contract, the Contractor agrees to comply
with the provisions of this contract involving utilization of small
business concerns, small disadvantaged business concerns, and women-
owned small business concerns.
(e) As used in this clause:
(1) ``Indian'' means a person who is a member of an Indian
Tribe. If the Contractor has reason to doubt that a person seeking
employment preference is an Indian, the Contractor shall grant the
preference but shall require the individual to provide evidence
within thirty (30) days from the Tribe concerned that the person is
a member of the Tribe.
(2) ``Indian Tribe'' means an Indian Tribe, pueblo, band,
nation, or other organized group or community, including Alaska
Native village or regional or village corporation as defined in or
established pursuant to the Alaska Native Claims Settlement Act (85
Stat. 688; 43 U.S.C. 1601) which is recognized as eligible for the
special programs and services provided by the United States to
Indians because of their status as Indians.
(3) ``Indian organization'' means the governing body of any
Indian Tribe or entity established or recognized by such governing
body in accordance with the Indian Financing Act of 1974 (88 Stat.
77; 25 U.S.C. 1451); and
(4) ``Indian-owned economic enterprise'' means any Indian-owned
commercial, industrial, or business activity established or
organized for the purpose of profit, provided that such Indian
ownership shall constitute not less than 51 percent of the
enterprise, and that ownership shall encompass active operation and
control of the enterprise.
(f) The Contractor agrees to include the provisions of this
clause, including this paragraph (f) of this clause, in each
subcontract awarded at any tier under this contract.
(g) In the event of noncompliance with this clause, the
Contracting Officer may terminate the contract in whole or in part
or may impose any other sanctions authorized by law or by other
provisions of the contract.
(End of clause)
352.270-3 Indian preference program.
The following clause shall be used as prescribed in 370.202(b):
Indian Preference Program (Apr 1984)
(a) In addition to the requirements of the clause of this
contract entitled ``Indian Preference,'' the Contractor agrees to
establish and conduct an Indian preference program which will expand
opportunities for Indians to receive preference for employment and
training in connection with the work to be performed under this
contract, and which will expand the opportunities for Indian
organizations and Indian-owned economic enterprises to receive a
preference in the awarding of subcontracts. In this connection, the
Contractor shall:
(1) Designate a liaison officer who will maintain liaison with
the Government and the Tribe(s) on Indian preference matters;
supervise compliance with the provisions of this clause; and
administer the Contractor's Indian preference program.
(2) Advise its recruitment sources in writing and include a
statement in all advertisements for employment that Indian
applicants will be given preference in employment and training
incident to such employment.
(3) Not more than twenty (20) calendar days after award of the
contract, post a written notice in the Tribal office of any
reservations on which or near where the work under this contract is
to be performed that sets forth the Contractor's employment needs
and related training opportunities. The notice shall include the
approximate numbers and types of employees needed; the approximate
dates of employment; the experience or special skills required for
employment, if any; training opportunities available; and other
pertinent information necessary to advise prospective employees of
any other employment requirements. The Contractor shall also request
the Tribe(s) on or near whose reservation(s) the work is to be
performed to provide assistance to the Contractor in filling its
employment needs and training opportunities. The Contracting Officer
will advise the Contractor of the name, location, and phone number
of the Tribal officials to contact in regard to the posting of
notices and requests for Tribal assistance.
(4) Establish and conduct a subcontracting program which gives
preference to Indian organizations and Indian-owned economic
enterprises as subcontractors and suppliers under this contract. The
Contractor shall give public notice of existing subcontracting
opportunities and, to the extent feasible and consistent with the
efficient performance of this contract, shall solicit bids or
proposals only from Indian organizations or Indian-owned economic
enterprises. The Contractor shall request assistance and information
on Indian firms qualified as suppliers or subcontractors from the
Tribe(s) on or near whose reservation(s) the work under the contract
is to be performed. The Contracting Officer will advise the
Contractor of the name, location, and phone number of the Tribal
officials to be contacted in regard to the request for assistance
and information. Public notices and solicitations for existing
subcontracting opportunities shall provide an equitable opportunity
for Indian firms to submit bids or proposals by including: A clear
description of the supplies or services required, including
quantities, specifications, and delivery schedules which facilitate
the participation of Indian firms; A statement indicating that
preference will be given to Indian organizations and Indian-owned
economic enterprises in accordance with section 7(b) of Public Law
93-638 (88 Stat. 2205; 25 U.S.C. 450e(b)); Definitions for the terms
``Indian organization'' and ``Indian-owned economic enterprise'' as
prescribed under the ``Indian Preference'' clause of this contract;
A statement to be completed by the bidder or offeror that it is an
Indian organization or Indian-owned economic enterprise; and A
closing date for receipt of bids or proposals which provides
sufficient time for preparation and submission of a bid or proposal.
If after soliciting bids or proposals from Indian organizations and
Indian-owned economic enterprises, no responsive bid or acceptable
proposal is received, the Contractor shall comply with the
requirements of paragraph (d) of the ``Indian Preference'' clause of
this contract. If one or more responsible bids or acceptable
proposals are received, award shall be made to the low responsible
bidder or acceptable offeror if the price is determined to be
reasonable. If the low responsive bid or acceptable proposal is
determined to be unreasonable as to price, the Contractor shall
attempt to negotiate a reasonable price and award a subcontract. If
a reasonable price cannot be agreed upon, the Contractor shall
comply with the requirements of paragraph (d) of the ``Indian
Preference'' clause of this contract.
(5) Maintain written records under this contract which indicate:
The numbers of Indians seeking employment for each employment
position available under this contract; The number and types of
positions filled by Indians and non-Indians, and the total number of
Indians employed under this contract; For those positions where
there are both Indian and non-Indian applicants, and a non-Indian is
selected for employment, the reason(s) why the Indian applicant was
not selected; Actions taken to give preference to Indian
organizations and Indian-owned economic enterprises for
subcontracting opportunities which exist under this contract;
Reasons why preference was not given to Indian firms as
subcontractors or suppliers for each requirement where it was
determined by the Contractor that such preference would not be
consistent with the efficient performance of the contract; and The
number of Indian organizations and Indian-owned economic enterprises
contacted, and the number receiving subcontract awards under this
contract.
(6) Submit to the Contracting Officer for approval a quarterly
report which summarizes the Contractor's Indian preference program
and indicates the number and types of available positions filled by
Indians and non-Indians, and the dollar amounts of all subcontracts
awarded to Indian organizations and Indian-owned economic
enterprises, and to all other firms.
(7) Maintain records pursuant to this clause and keep them
available for review by the Government until expiration of one (1)
year after final payment under this contract, or for such longer
period as may be required by any other clause of this contract or by
applicable law or regulation.
(b) For purposes of this clause, the following definitions of
terms shall apply:
(1) The terms ``Indian,'' ``Indian Tribe,'' ``Indian
Organization,'' and ``Indian-owned economic enterprise'' are defined
in the clause of this contract entitled ``Indian Preference.''
(2) ``Indian reservation'' includes Indian reservations, public
domain Indian
[[Page 1385]]
Allotments, former Indian reservations in Oklahoma, and land held by
incorporated Native groups, regional corporations, and village
corporations under the provisions of the Alaska Native Claims
Settlement Act (85 Stat. 688; 43 U.S.C. 1601 et seq.)
(3) ``On or near an Indian Reservation'' means on a reservation
or reservations or within that area surrounding an Indian
reservation(s) where a person seeking employment could reasonably be
expected to commute to and from in the course of a work day.
(c) Nothing in the requirements of this clause shall be
interpreted to preclude Indian Tribes from independently developing
and enforcing their own Indian preference requirements. Such
requirements must not conflict with any Federal statutory or
regulatory requirement dealing with the award and administration of
contracts.
(d) The Contractor agrees to include the provisions of this
clause, including this paragraph (d), in each subcontract awarded at
any tier under this contract and to notify the Contracting Officer
of such subcontracts.
(e) In the event of noncompliance with this clause, the
Contracting Officer may terminate the contract in whole or in part
or may impose any other sanctions authorized by law or by other
provisions of the contract.
(End of clause)
352.270-4 Pricing of adjustments.
Insert the following clause in all solicitations and resultant
fixed-priced contracts other than purchase orders.
Pricing of Adjustments (Apr 1984)
When costs are a factor in determination of a contract price
adjustment pursuant to the ``Changes'' clause or any provision of
this contract, such costs shall be determined in accordance with the
applicable cost principles and procedures set forth below:
------------------------------------------------------------------------
Principles Types of organizations
------------------------------------------------------------------------
(a) Subpart 31.2 of the Federal Commercial.
Acquisition Regulation.
(b) Subpart 31.3 of the Federal Educational.
Acquisition Regulation.
(c) Subpart 31.6 of the Federal State or local governments.
Acquisition Regulation.
(d) 45 CFR Part 74 Appendix E............. Hospitals.
(e) Subpart 31.7 of the Federal Other nonprofit
Acquisition Regulation. institutions.
------------------------------------------------------------------------
(End of clause)
352.270-5 Key personnel.
Insert the following clause in all solicitations and resultant
cost-reimbursement contracts.
Key Personnel (Apr 1984)
The personnel specified in this contract are considered to be
essential to the work being performed hereunder. Prior to diverting
any of the specified individuals to other programs, the Contractor
shall notify the Contracting Officer reasonably in advance and shall
submit justification (including proposed substitutions) in
sufficient detail to permit evaluation of the impact on the program.
No diversion shall be made by the Contractor without the written
consent of the Contracting Officer; provided, that the Contracting
Officer may ratify in writing such diversion and such ratification
shall constitute the consent of the Contracting Officer required by
this clause. The contract may be modified from time to time during
the course of the contract to either add or delete personnel, as
appropriate.
(End of clause)
352.270-6 Publications and Publicity.
Insert the following clause in all solicitations and resultant
contracts.
Publications and Publicity (Jul 1991)
(a) Unless otherwise specified in this contract, the Contractor
is encouraged to publish the results of its work under this
contract. A copy of each article submitted by the Contractor for
publication shall be promptly sent to the Project Officer. The
Contractor shall also inform the Project Officer when the article or
other publication is published, and furnish a copy of it as finally
published.
(b) The Contractor shall include in any publication resulting
from work performed under this contract a disclaimer reading as
follows:
The content of this publication does not necessarily reflect the
views or policies of the Department of Health and Human Services,
nor does mention of trade names, commercial products, or
organizations imply endorsement by the U.S. Government.''
(End of clause)
352.270-7 Paperwork Reduction Act.
Insert the following clause in all solicitations and contracts.
Paperwork Reduction Act (Apr 1984)
(a) In the event that it subsequently becomes a contractual
requirement to collect or record information calling either for
answers to identical questions from 10 or more persons other than
Federal employees, or information from Federal employees which is
outside the scope of their employment, for use by the Federal
government or disclosure to third parties, the Paperwork Reduction
Act of 1995 (Pub. L. 104-13) shall apply to this contract. No plan,
questionnaire, interview guide or other similar device for
collecting information (whether repetitive or single-time) may be
used without first obtaining clearance from the Office of Management
and Budget (OMB). Contractors and Project Officers should be guided
by the provisions of 5 CFR Part 1320, Controlling Paperwork Burdens
on the Public, and seek the advice of the HHS operating division or
Office of the Secretary Reports Clearance Officer to determine the
procedures for acquiring OMB clearance.
(b) The Contractor shall obtain the required OMB clearance
through the Project Officer before expending any funds or making
public contracts for the collection of data. The authority to expend
funds and proceed with the collection of information shall be in
writing by the Contracting Officer. The Contractor must plan at
least 120 days for OMB clearance. Excessive delays caused by the
Government which arises out of causes beyond the control and without
the fault or negligence of the Contractor will be considered in
accordance with the Excusable Delays or Default clause of this
contract
(End of clause)
352.270-8 Protection of human subjects.
(a) The following provision shall be included in solicitations
expected to involve human subjects:
Notice to Offerors of Requirements of 45 CFR Part 46, Protection of
Human Subjects (Jan 1999)
(a) Copies of the Department of Health and Human Services
(Department) regulations for the protection of human subjects, 45
CFR Part 46, are available from the Office for Protection from
Research Risks (OPRR), National Institutes of Health, Bethesda,
Maryland 20892. The regulations provide a systematic means, based on
established ethical principles, to safeguard the rights and welfare
of individuals who participate as subjects in research activities
supported or conducted by the Department.
(b) The regulations define a human subject as a living
individual about whom an investigator (whether professional or
student) conducting research contains data through intervention or
interaction with the individual, or identifiable private
information. The regulations extend to the use of human organs,
tissue, and body fluids from individually identifiable human
subjects as well as to graphic, written, or recorded information
derived from individually identifiable human subjects. The use of
autopsy materials is governed by applicable State and local law and
is not directly regulated by 45 CFR Part 46.
(c) Activities in which the only involvement of human subjects
will be in one or more of the categories set forth in 45 CFR
46.101(b)(1-6) are exempt from coverage.
(d) Inappropriate designations of the noninvolvement of human
subjects or of exempt categories of research in a project may result
in delays in the review of a proposal. The National Institutes of
Health will make a final determination of whether the proposed
activities are covered by the regulations or are in an exempt
category, based on the information provided in the proposal. In
doubtful cases, prior consultation with OPRR, (telephone: 301-496-
7014), is recommended.
(e) In accordance with 45 CFR Part 46, prospective Contractors
being considered for award shall be required to file with OPRR an
acceptable Assurance of Compliance with the regulations, specifying
review procedures and assigning responsibilities for the protection
of human subjects. The initial and continuing review of a research
project by an institutional review board shall assure that the
rights and welfare of the human subjects involved are adequately
protected, that the risks to the subjects are reasonable in relation
to the potential benefits, if any, to the subjects and the
importance of the knowledge to be gained, and that informed
[[Page 1386]]
consent will be obtained by methods that are adequate and
appropriate. Prospective Contractors proposing research that
involves human subjects shall be contacted by OPRR and given
detailed instructions for establishing an institutional review board
and filing an Assurance of Compliance.
(f) It is recommended that OPRR be consulted for advice or
guidance concerning either regulatory requirements or ethical issues
pertaining to research involving human subjects.
(End of provision)
(b) The following clause shall be included in solicitations and
resultant contracts involving human subjects:
Protection of Human Subjects (Jan 1999)
(a) The Contractor agrees that the rights and welfare of human
subjects involved in research under this contract shall be protected
in accordance with 45 CFR Part 46 and with the Contractor's current
Assurance of Compliance on file with the Office for Protection from
Research Risks (OPRR), National Institutes of Health (NIH), Public
Health Service. The Contractor further agrees to provide
certification at least annually that the Institutional Review Board
has reviewed and approved the procedures, which involve human
subjects in accordance with 45 CFR Part 46 and the Assurance of
Compliance.
(b) The Contractor shall bear full responsibility for the
performance of all work and services involving the use of human
subjects under this contract in a proper manner and as safely as is
feasible. The parties hereto agree that the Contractor retains the
right to control and direct the performance of all work under this
contract. Nothing in this contract shall be deemed to constitute the
Contractor or any subcontractor, agent or employee of the
Contractor, or any other person, organization, institution, or group
of any kind whatsoever, as the agent or employee of the Government.
The Contractor agrees that it has entered into this contract and
will discharge its obligations, duties, and undertakings and the
work pursuant thereto, whether requiring professional judgement or
otherwise, as an independent contractor without imputing liability
on the part of the Government for the acts of the Contractor or its
employees.
(c) If at any time during the performance of this contract, the
Contracting officer determines, in consultation with the OPRR, NIH,
that the Contractor is not in compliance with any of the
requirements and/or standards stated in paragraphs (a) and (b)
above, the Contracting Officer may immediately suspend, in whole or
in part, work and further payments under this contract until the
Contractor corrects the noncompliance. Notice of the suspension may
be communicated by telephone and confirmed in writing. If the
Contractor fails to complete corrective action within the period of
time designated in the Contracting Officer's written notice of
suspension, the Contracting Officer may, in consultation with OPRR,
NIH, terminate this contract in whole or in part, and the
Contractor's name may be removed from the list of those contractors
with approved Health and Human Services Human Subject Assurances.
(End of clause)
352.270-9 Care of laboratory animals.
(a) The following provision shall be included in solicitations
expected to involve vertebrate animals:
Notice to Offerors of Requirement for Adequate Assurance of Protection
of Vertebrate Animal Subjects (Sep 1985)
The PHS Policy on Humane Care and Use of Laboratory Animals by
Awardee Institutions establishes a number of requirements for
research activities involving animals. Before a PHS award may be
made to an applicant organization, the organization shall file, with
the Office for Protection from Research Risks (OPRR), National
Institutes of Health (NIH), PHS, a written Animal Welfare Assurance
which commits the organization to comply with the provisions of the
PHS Policy on Humane Care and Use of Laboratory Animals by Awardee
Institutions, the Animal Welfare Act, and the Guide for the Care and
Use of Laboratory Animals prepared by the Institute of Laboratory
Animal Resources. In accordance with the PHS Policy on Humane Care
and Use of Laboratory Animals by Awardee Institutions, applicant
organizations must establish a committee, qualified through the
experience and expertise of its members, to oversee the
institution's animal program, facilities and procedures. No PHS
award involving the use of animals shall be made unless the Animal
Welfare Assurance has been approved by OPRR. Prior to award, the
Contracting Officer will notify Contractor(s) selected for projects
that involve live vertebrate animals that an Animal Welfare
Assurance is required. The Contracting Officer will request that
OPRR negotiate an acceptable Animal Welfare Assurance with those
Contractor(s). For further information, OPRR may be contacted at
NIH, Bethesda, Maryland 20892 (301-496-7041).
(End of provision)
(b) The following clause shall be included in all solicitations and
resultant contracts involving research on vertebrate animals:
Care of Live Vertebrate Animals (Jan 1999)
(a) Before undertaking performance of any contract involving
animal related activities, the Contractor shall register with the
Secretary of Agriculture of the United States in accordance with 7
U.S.C. 2316 and 9 CFR sections 2.25 through 2.28. The Contractor
shall furnish evidence of the registration to the Contracting
Officer.
(b) The Contractor shall acquire vertebrate animals used in
research from a dealer licensed by the Secretary of Agriculture
under 7 U.S.C. 2133 and 9 CFR Sections 2.1-2.11, or from a source
that is exempt from licensing under those sections.
(c) The Contractor agrees that the care and use of any live
vertebrate animals used or intended for use in the performance of
this contract will conform with the PHS Policy on Humane Care of Use
of Laboratory Animals, the current Animal Welfare Assurance, the
Guide for the Care and Use of Laboratory Animals prepared by the
Institute of Laboratory Animal Resources and the pertinent laws and
regulations of the United States Department of Agriculture (see 7
U.S.C. 2131 et seq. and 9 CFR Subchapter A, Parts 1-3). In case of
conflict between standards, the more stringent standard shall be
used.
(d) If at any time during performance of this contract, the
Contracting Officer determines, in consultation with the Office for
Protection from Research Risks (OPRR), National Institutes of Health
(NIH), that the Contractor is not in compliance with any of the
requirements and/or standards stated in paragraphs (a) through (c)
above, the Contracting Officer may immediately suspend, in whole or
in part, work and further payments under this contract until the
Contractor corrects the noncompliance. Notice of the suspension may
be communicated by telephone and confirmed in writing. If the
Contractor fails to complete corrective action within the period of
time designated in the Contracting Officer's written notice of
suspension, the Contracting Officer may, in consultation with OPRR,
NIH, terminate this contract in whole or in part, and the
Contractor's name may be removed from the list of those contractors
with approved PHS Animal Welfare Assurances.
Note: The Contractor may request registration of its facility
and a current listing of licensed dealers from the Regional Office
of the Animal and Plant Health Inspection Service (APHIS), USDA, for
the region in which its research facility is located. The location
of the appropriate APHIS Regional Office, as well as information
concerning this program may be obtained by contacting the Animal
Care Staff, USDA/APHIS, 4700 River Road, Riverdale, Maryland 20737.
(End of Clause)
Part 353--FORMS
Subpart 353.3--Illustrations of Forms
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 353.3--Illustrations of Forms
353.370-674 Form HHS 674, Structured Approach Profit/Fee Objective.
This form is available through local cost advisory personnel. For
copies of the form, contact the Program Support Center at (301) 443-
6740.
PART 370--SPECIAL PROGRAMS AFFECTING ACQUISITION
Subpart 370.1--Accessibility of Meetings, Conferences, and Seminars to
Persons with Disabilities
Sec.
370.101 Policy.
370.102 Responsibilities.
Subpart 370.2--Indian Preference in Employment, Training, and
Subcontracting Opportunities
370.201 Statutory requirements.
370.202 Applicability.
370.203 Definitions.
370.204 Compliance enforcement.
370.205 Tribal preference requirements.
[[Page 1387]]
Subpart 370.3--Acquisitions Involving Human Subjects
370.300 Scope of subpart.
370.301 Policy.
370.302 Types of assurances.
370.303 Notice to offerors.
370.304 Contract clause.
Subpart 370.4--Acquisitions Involving the Use of Laboratory Animals
370.400 Scope of subpart.
370.401 Policy.
370.402 Assurances.
370.403 Notice to offerors.
370.404 Contract clause.
Subpart 370.5--Acquisitions Under the Buy Indian Act
370.500 Scope of subpart.
370.501 Policy.
370.502 Definitions.
370.503 Requirements.
370.504 Competition.
370.505 Responsibility determinations.
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Subpart 370.1--Accessibility of Meetings, Conferences, and Seminars
to Persons With Disabilities
370.101 Policy.
(a) It is the policy of HHS that all meetings, conferences, and
seminars be accessible to persons with disabilities. For the purpose of
this policy, accessibility is defined as both physical access to
meeting, conference, and seminar sites, and aids and services to enable
individuals with sensory disabilities to fully participate in meetings,
conferences, and seminars.
(b) In regard to acquisition, the policy is applicable to all
contracts where the statement of work requires the contractor to
conduct meetings, conferences, or seminars that are open to the public
or involve HHS personnel, but not to ad hoc meetings that may be
necessary or incidental to contract performance.
370.102 Responsibilities.
(a) The contracting officer shall include the clause in 352.270-1
in every solicitation and resulting contract when the statement of work
requires the contractor to conduct meetings, conferences, or seminars
in accordance with 370.101(b).
(b) The project officer shall be responsible for obtaining,
reviewing, and approving the contractor's plan, which is to be
submitted in response to paragraph (a) of the contract clause in
352.270-1. A consolidated or master plan for contracts requiring
numerous meetings, conferences, or seminars will be acceptable. The
project officer, prior to approving the plan, should consult with the
Office of Engineering Services serving the region where the meeting,
conference, or seminar is to be held, to assure that the contractor's
plan meets the accessibility requirements of the contract clause. The
Office of Engineering Services should determine the adequacy of the
contractor's plan, and notify the project officer, in writing, within
ten (10) working days of receiving the request from the project
officer.
Subpart 370.2--Indian Preference in Employment, Training, and
Subcontracting Opportunities
370.201 Statutory requirements.
Section 7(b) of the Indian Self-Determination and Education
Assistance Act, Public Law 93-638, 88 Stat. 2205, 25 U.S.C. 450e(b),
requires:
Any contract, subcontract, grant, or subgrant pursuant to this
Act, the Act of April 16, 1934 (48 Stat. 596), as amended, or any
other Act authorizing Federal contracts with or grants to Indian
organizations or for the benefit of Indians, shall require that to
the greatest extent feasible:
(1) Preferences and opportunities for training and employment in
connection with the administration of such contracts or grants shall
be given to Indians; and
(b) Preference in the award of subcontracts and subgrants in
connection with the administration of such contracts or grants shall
be given to Indian organizations and to Indian-owned economic
enterprises as defined in section 3 of the Indian Financing Act of
1974 (88 Stat. 77).
370.202 Applicability.
The Indian Preference clause set forth in 352.270-2 and the Indian
Preference Program clause set forth in 352.270-3 have been developed to
implement section 7(b) of Public Law 93-638 for all activities of the
Department. The clauses shall be used by any affected departmental
contracting activity as follows, except solicitations issued and
contracts awarded pursuant to Title I of Public Law 93-638 (25 U.S.C.
450 et seq.) are exempted:
(c) The Indian Preference clause (352.270-2) shall be included in
each solicitation and resultant contract, regardless of dollar amount:
(1) When the contract is to be awarded pursuant to an act
specifically authorizing contracts with Indian organizations; or
(2) Where the work to be performed under the contract is
specifically for the benefit of Indians and is in addition to any
incidental benefits which might otherwise accrue to the general public.
(b) The Indian Preference Program clause (352.270-3) shall be
included in each solicitation and resultant contract when:
(1) The dollar amount of the acquisition is expected to equal or
exceed $50,000 for nonconstruction work or $100,000 for construction
work;
(2) The Indian Preference clause is to be included in the
solicitation and resultant contract; and
(3) The determination is made, prior to solicitation, that the work
to be performed under the resultant contract will take place in whole
or in substantial part on or near an Indian reservation(s). In
addition, the Indian Preference Program clause may be included in any
solicitation and resultant contract below the $50,000 or $100,000 level
for nonconstruction or construction contracts, respectively, but which
meet the requirements of paragraphs (b)(2) and (3) of this 370.202,
and, in the opinion of the contracting activity, offer substantial
opportunities for Indian employment, training, and subcontracting.
370.203 Definitions.
For purposes of this subpart 370.2, the following definitions shall
apply:
(a) Indian means a person who is a member of an Indian Tribe. If
the contractor has reason to doubt that a person seeking employment
preference is an Indian, the contractor shall grant the preference but
shall require the individual to provide evidence within thirty (30)
days from the Tribe concerned that the person is a member of the Tribe.
(b) Indian Tribe means an Indian Tribe, pueblo, band, nation, or
other organized group or community, including any Alaska Native Village
or regional or village corporation as defined in or established
pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688, 43
U.S.C. 1601) which is recognized as eligible for the special programs
and services provided by the United States to Indians because of their
status as Indians.
(c) Indian organization means the governing body of any Indian
Tribe or entity established or recognized by such governing body in
accordance with the Indian Financing Act of 1974 (88 Stat. 77, 25
U.S.C. 1451).
(d) Indian-owned economic enterprise means any Indian-owned
commercial, industrial, or business activity established or organized
for the purpose of profit, provided that such Indian ownership shall
constitute not less than 51 percent of the enterprise, and the
ownership shall encompass active operation and control of the
enterprise.
(e) Indian reservation includes Indian reservations, public domain
Indian allotments, former Indian reservations in Oklahoma, and land
held by incorporated Native groups, regional corporations, and village
corporations
[[Page 1388]]
under the provisions of the Alaska Native Claims Settlement Act (85
Stat. 688, 43 U.S.C. 1601 et seq.)
(f) On or near an Indian Reservation means on a reservation or
reservations or within that area surrounding an Indian reservation(s)
where a person seeking employment could reasonably be expected to
commute to and from in the course of a work day.
370.204 Compliance enforcement.
(a) The concerned contracting activity shall be responsible for
conducting periodic reviews to insure contractor compliance with the
requirements of the clauses set forth in 352.270-2 and 352.270-3. These
reviews may be conducted with the assistance of the Indian Tribe(s)
concerned.
(b) Complaints of noncomplaince with the requirements of the
clauses set forth in 352.270-2 and 352.270-3 which are filed in writing
with the contracting activity shall be promptly investigated and
resolved by the contracting officer.
370.205 Tribal preference requirements.
(a) Where the work under a contract is to be performed on an Indian
reservation, the contracting activity may supplement the clause set
forth in 352.270-3 by adding specific Indian preference requirements of
the Tribe on whose reservation the work is to be performed. The
supplemental requirements shall be jointly developed for the contract
by the contracting activity and the Tribe. Supplemental preference
requirements must represent a further implementation of the
requirements of section 7(b) of Public Law 93-638 and must be approved
by the affected program director and approved for legal sufficiency by
the Business and Administrative Law Division, OGC, or a regional
attorney before being added to a solicitation and resultant contract.
Any supplemental preference requirements to be added to the clause in
352.270-3 shall be included in the solicitation and clearly identified
in order to insure uniform understanding or the additional requirements
by all prospective bidders or offerors.
(b) Nothing in this part shall be interpreted to preclude Tribes
from independently developing and enforcing their own tribal preference
requirements. Such independently developed tribal preference
requirements shall not, except as provided in paragraph (a) of this
section, become a requirement in contracts covered under this Subpart
370.2, and must not conflict with any Federal statutory or regulatory
requirement concerning the award and administration of contracts.
Subpart 370.3--Acquisitions Involving Human Subjects
370.300 Scope of subpart.
This subpart applies to all research and development activities
involving human subjects conducted under contract (see 45 CFR 46.102(d)
and (f)).
370.301 Policy.
It is the policy of the Department of Health and Human Services
(DHHS) that no contract involving human subjects shall be awarded until
acceptable assurance has been given that the activity will be subject
to initial and continuing review by an appropriate Institutional Review
Board (IRB) as described in DHHS regulations at 45 CFR 46.103. An
applicable Multiple Project Assurance (MPA) or Single Project Assurance
(SPA), approved by the Office for Protection from Research Risks
(OPRR), National Institutes of Health (NIH), shall be required of each
contractor, subcontractor, or cooperating institution having
responsibility for human subjects involved in performance of the
contract. The OPRR, NIH, is responsible for negotiating assurances
covering all DHHS-supported or DHHS-conducted activities involving
human subjects. Contracting officers shall be guided by OPRR regarding
nonaward or termination of a contract due to inadequate assurance or
breech of assurance for protection of human subjects.
370.302 Types of assurances.
Assurances may be one of two types:
(a) Multiple Project Assurance (MPA). An MPA describes the
oversight procedures applicable to all DHHS-supported human subjects
activities within an institution having a significant number of
concurrent projects. An MPA listed in OPRR's current ``List of
Institutions Which Have an Approved MPA'' will be considered acceptable
for purposes of this policy.
(b) Single Project Assurance (SPA). An SPA describes the oversight
procedures applicable to a single DHHS-supported human subjects
activity. SPAs may be approved in modified form to meet unusual
requirements. SPAs are not solicited from institutions with OPRR
approved MPAs. Copies of proposals selected for negotiation and
requiring one or more SPAs shall be forwarded to the Human Subjects
Assurance Branch, OPRR, NIH MSC 7507, 6100 Executive Blvd., Room 3B01,
Rockville, Maryland 20892, as early as possible so that timely action
may be taken to secure the SPA(s).
370.303 Notice to offerors.
(a) Solicitations shall contain the notice to offerors in 352.270-
8(a) whenever contract performance is expected to involve human
subjects.
(b) IRB approval of proposals submitted by institutions having an
OPRR-approved MPA should be certified in the manner required by
instructions for completion of the contract proposal; or by completion
of a DHHS Form 310, Protection of Human Subjects Assurance
Identification/Certification/Declaration; or by letter indicating the
institution's OPRR-assigned MPA number, the date of IRB review and
approval, and the type of review (convened or expedited). The date of
IRB approval must not be more than 12 months prior to the deadline for
proposal submission.
(c) SPAs for contractors, subcontractors, or cooperating
institutions generally will not be requested prior to determination
that a contract proposal has been selected for negotiation. When an SPA
is submitted, it provides certification for the initial contract
period. No additional documentation is required. If the contract
provides for additional years to complete the project, the
noncompetitive renewal proposal shall be certified in the manner
described in the preceding paragraph.
370.304 Contract clause.
The clause set forth in 352.270-8(b) shall be inserted in all
solicitations and resultant contracts involving human subjects.
Subpart 370.4--Acquisitions Involving the Use of Laboratory Animals
370.400 Scope of subpart.
This subpart applies to all research, research training and
biological testing activities involving live vertebrate animals
conducted under contract (see Public Health Service Policy on Humane
Care and Use of Laboratory Animals (PHS Policy), Rev. 1986, Repr.
1996).
370.401 Policy.
(a) It is the policy of the Department of Health and Human Services
(DHHS) and the Public Health Service agencies that no contract
involving live vertebrate animals shall be awarded until acceptable
assurance has been given that the activity will be subject to initial
and continuing review by an appropriate Institutional Animal Care and
Use Committee (IACUC) as described in the PHS Policy at IV. B. 6.
[[Page 1389]]
and 7. An applicable Full Animal Welfare Assurance or
Interinstitutional Agreement/Assurance, approved by the Office for
Protection from Research Risks (OPRR), National Institutes of Health
(NIH), shall be required of each contractor, subcontractor, or
cooperating institution having responsibility for animal care and use
involved in performance of the contract (see PHS Policy II., IV. A.,
And V. B.).
(b) The OPRR, NIH, is responsible for negotiating assurances
covering all DHHS/PHS-supported or DHHS/PHS-conducted activities
involving the care and use of live vertebrate animals. Contracting
officers shall be guided by OPRR regarding adequate animal care, and
use, approval, disapproval, restriction, or withdrawal of approval of
assurances (see PHS Policy V. A.).
370.402 Assurances.
(a) Assurances may be one of two types:
(1) Full Animal Welfare Assurance (AWA). An AWA describes the
institution's complete program for the care and use of animals,
including but not limited to the facilities, occupational health,
training, veterinary care, IACUC procedures and lines of authority and
responsibility. An AWA listed in OPRR's list of institutions which have
an approved full AWA will be considered acceptable for purposes of this
policy.
(2) Interinstitutional Agreement/Assurance (IAA). An IAA describes
the arrangements between an offeror and usually a subcontractor where
animal activities will occur. An IAA is limited to the specific award
or single project.
(b) Copies of proposals selected for negotiation and requiring an
assurance shall be forwarded to the Assurance Branch, Division of
Animal Welfare, OPRR, NIH MSC 7507, 6100 Executive Blvd., Room 3B01,
Rockville, Maryland 20892, as early as possible in order that timely
action may be taken to secure the necessary assurances.
(c) A contractor providing animal care services at an assured
entity, such as a Government-owned, contractor-operated (GOCO) site,
does not need a separate assurance because the GOCO site normally
covers the contractor services in the GOCO site assurance.
370.403 Notice to offerors.
Solicitations shall contain the notice to offerors in 352.270-9(a)
whenever contract performance is expected to involve the use of live
vertebrate animals.
(a) For offerors having a full AWA on file with OPRR, IACUC
approval of the use of animals shall be submitted in the manner
required by instructions for completion of the contract proposal, but
prior to the technical review of the proposal.
Note: The date of IACUC review and approval must not be more
than 36 months prior to the deadline for proposal submission.
(b) Non-assured offerors are not required to submit assurances or
IACUC approval with proposals. OPRR will contact contractors,
subcontractors and cooperating institutions to negotiate necessary
assurances and verify IACUC approvals when requested by appropriate
DHHS/PHS staff.
370.404 Contract clause.
The clause set forth in 352.270-9(b) shall be included in all
solicitations and resultant contracts involving the care and use of
live vertebrate animals.
Subpart 370.5--Acquisitions Under the Buy Indian Act
370.500 Scope of subpart.
This subpart sets forth the policy on preferential acquisition from
Indians under the negotiation authority of the Buy Indian Act.
Applicability of this subpart is limited to acquisitions made by or on
behalf of the Indian Health Service of the Public Health Service.
370.501 Policy.
(a) The Indian Health Service will utilize the negotiation
authority of the Buy Indian Act to give preference to Indians whenever
the use of that authority is authorized and is practicable. The Buy
Indian Act was enacted as a proviso to section 23 of the Act of June
25, 1910, Chapter 431, Pub. L. 313, 61st Congress, 36 Stat. 861, and
prescribes the application of the advertising requirements of section
3709 of the Revised Statutes to the acquisition of Indian supplies. As
set out in 25 U.S.C. 47, the Buy Indian Act provides as follows:
So far as may be practicable Indian labor shall be employed, and
purchases of the products of Indian industry may be made in open
market in the discretion of the Secretary of the Interior.
(b) The functions, responsibilities, authorities, and duties of the
Secretary of the Interior for maintenance and operation of hospital and
health facilities for Indians and for the conservation of the health of
Indians were transferred to the Secretary of Health, Education, and
Welfare, on July 1, 1955 by Pub. L. 568, 83rd Congress, 42 U.S.C. 2001
et seq. Accordingly, the Secretary of Health and Human Services is
authorized to use the Buy Indian Act in the acquisition of products of
Indian industry in connection with the maintenance and operation of
hospital and health facilities for Indians and for the conservation of
the health of Indians. This authority has been delegated exclusively to
the Indian Health Service and is not available for use by any other HHS
component (unless that component is making an acquisition on behalf of
the Indian Health Service).
(c) Use of the Buy Indian Act negotiation authority has been
emphasized in subsequent legislation, particularly Pub. L. 94-437 and
Pub. L. 96-537.
370.502 Definitions.
Buy Indian contract means any contract involving activities covered
by the Buy Indian Act that is negotiated under the provisions of 41
U.S.C. 252(c)(15) and 25 U.S.C. 47 between an Indian firm and a
contracting officer representing the Indian Health Service.
Indian means a member of any tribe, pueblo, band, group, village or
community that is recognized by the Secretary of the Interior as being
Indian or any individual or group of individuals that is recognized by
the Secretary of the Interior or the Secretary of Health and Human
Services. The Secretary of Health and Human Services in making
determinations may take into account the determination of the tribe
with which affiliation is claimed.
Indian firm means a sole enterprise, partnership, corporation, or
other type of business organization owned, controlled, and operated by
one or more Indians (including, for the purpose of sections 301 and 302
of Pub. L. 94-437, former or currently federally recognized Indian
tribes in the State of New York) or by an Indian firm; or a nonprofit
firm organized for the benefit of Indians and controlled by Indians
(see 370.503(a)).
Product of Indian industry means anything produced by Indians
through physical labor or by intellectual effort involving the use and
application of skills by them.
370.503 Requirements.
(a) Indian ownership. The degree of Indian ownership of an Indian
firm shall be at least 51 percent during the period covered by a Buy
Indian contract.
(b) Joint ventures. An Indian firm may enter into a joint venture
with other entities for specific projects as long as the Indian firm is
the managing partner. However, the joint venture must be approved by
the contracting officer prior to the award of a contract under the Buy
Indian Act.
[[Page 1390]]
(c) Bonds. In the case of contracts for the construction,
alteration, or repair of public buildings or public works, performance
and payment bonds are required by the Miller Act (40 U.S.C. 270a) and
FAR Part 28. In the case of contracts with Indian tribes or public
nonprofit organizations serving as governmental instrumentalities of an
Indian tribe, bonds are not required. However, bonds are required when
dealing with private business entities which are owned by an Indian
tribe or members of an Indian tribe. Bonds may be required of private
business entities which are joint ventures with, or subcontractors of,
an Indian tribe or a public nonprofit organization serving as a
governmental instrumentality of an Indian tribe. A bid guarantee or bid
bond is required only when a performance or payment bond is required.
(d) Indian preference in employment, training and subcontracting.
Contracts awarded under the Buy Indian Act are subject to the
requirements of section 7(b) of the Indian Self-Determination and
Education Assistance Act (Pub. L. 93-638), which requires that
preference be given to Indians in employment, training, and
subcontracting. The Indian Preference clause set forth in 352.270-2
shall be included in all Buy Indian solicitations and resultant
contracts. The Indian Preference Program clause set forth in 352.270-3
shall be used as specified in 370.202(b). All requirements set forth in
Subpart 370.2 which are applicable to the instant Buy Indian
acquisition shall be followed by the contracting officer, e.g.,
sections 370.204 and 370.205.
(e) Subcontracting. Not more than 50 percent of the work to be
performed under a prime contract awarded pursuant to the Buy Indian Act
shall be subcontracted to other than Indian firms. For this purpose,
work to be performed does not include the provision of materials,
supplies, or equipment.
(f) Wage rates. A determination of the minimum wage rates by the
Secretary of Labor as required by the Davis-Bacon Act (40 U.S.C. 276a-
5) shall be included in all contracts awarded under the Buy Indian Act
for over $2,000 for construction, alteration, or repair, including
painting and decorating, of public buildings and public works, except
contracts with Indian tribes or public nonprofit organizations serving
as governmental instrumentalities of an Indian tribe. The wage rate
determination is to be included in contracts with private business
entities even if they are owned by an Indian tribe or a member of an
Indian tribe and in connection with joint ventures with, or
subcontractors of, an Indian tribe or a public nonprofit organization
serving as a governmental instrumentality of an Indian tribe.
370-504 Competition.
(a) Contracts to be awarded under the Buy Indian Act shall be
subject to competition among Indians or Indian concerns to the maximum
extent that competition is determined by the contracting officer to be
practicable. When competition is determined not to be practicable, a
Justification for Other than Full and Open Competition shall be
prepared in accordance with 306.303 and subsequently retained in the
contract file.
(b) Solicitations must be synopsized and publicized in the Commerce
Business Daily and copies of the synopses sent to the tribal office of
the Indian tribal government directly concerned with the proposed
acquisition as well as to Indian concerns and others having a
legitimate interest. The synopsis should state that the acquisition is
restricted to Indian firms under the Buy Indian Act.
370.505 Responsibility determinations.
(a) A contract may be awarded under the Buy Indian Act only if it
is first determined that the project or function to be contracted for
is likely to be satisfactorily performed under that contract and the
project or function is likely to be properly completed or maintained
under that contract.
(b) The determination called for by paragraph (a) of this section,
to be made prior to the award of a contract, will be made in writing by
the contracting officer reflecting an analysis of the standards set
forth in FAR 9.104-1.
[FR Doc. 99-7 Filed 1-7-99; 8:45 am]
BILLING CODE 4150-04-P
