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applicable to the proposed procurement (5) Industry practices; because of a preexisting license agree (6) Capabilities of small business ment between the Government and a concerns; patent owner, the solicitation shall so (7) Time for obtaining and evaluating state and shall: (a) Identify the patents bids or offers, and awarding contracts; and specify the royalty rate; and (b) (8) Time for contractors to comply advise that an amount equal to the roy with any conditions precedent to contract alty which the Government will be re performance; and quired to pay under the license agree (9) Time for Government to perform ment will be added as an evaluation fac its obligations under the contract (e.g., tor to each bid/offer unless the bidder/ furnishing Government property to the offeror includes in his bid/offer a state- contractor, approval of preproduction ment that he is the owner of or a licensee samples, and inspection). under the patents. (See $$ 2.201(a) (b) Where timely delivery or per(2) (1x) and (4) (i) and (b) (16) and formance is unusually important to the (28), and 3.501(b) (2) (xix), (4)(x), and Government, liquidated damages pro(c) (44) of this chapter.

visions may be used as provided in (35 F.R. 46, Jan. 3, 1970)

$ 1.310.

(c) Invitations for bids and requests $ 1.305 Time of delivery or perform

for proposals shall, except where clearly ance.

unnecessary, inform bidders or offerors [25 F.R. 14083, Dec. 31, 1960)

of the basis on which their bids or pro§ 1.305-1 Scope.

posals will be evaluated with respect to

time of delivery or performance. Sections 1.30541.305-4 prescribe policy

125 F.R. 14083, Dec. 31, 1960, as amended at and procedure regarding requirements

33 F.R. 15380, Oct. 17, 1968) as to time of delivery or performance of contracts for supplies or services, ex

$ 1.305-3 Terms. cluding construction.

(a) Delivery schedules may be ex(25 F.R. 14083, Dec. 31, 1960)

pressed in terms of § 1.305–2 General.

(1) Specific calendar dates (e.g., on or

before, July 1, 1968); (a) The time of delivery or perform (2) Specified periods from date of conance is an essential element for inclusion tract (i.e., date of award or acceptin & contract and must be clearly set

ance by the Government, or date shown forth in invitations for bids and requests on contract document as effective date of for proposals. Delivery and performance contract); or schedules shall be designed to meet the (3) Specified periods from date of rerequirements of the particular procure ceipt by contractor of notice of award or ment, with due regard to all relevant acceptance by the Government (includfactors, and must be realistic. Delivery

ing notice by receipt of contract docuand performance schedules which are

ment executed by the Government). unreasonably tight or difficult of attain

The full period which the Government ment are inimical to full competition, inconsistent with small business policies

holds out as being available for contract (see $ 1.702(b) (6), and may result in

performance should not be curtailed to higher contract prices. Therefore, prior

the prejudice of the contractor by delay

in giving notice of award. Accordingly, to issuing an invitation for bids or request for proposals, the contracting offi

one of the provisions in paragraph (b) cer shall question any delivery require

or (c) of this section shall be used in ment which appears unrealistic, and, if

advertised procurements and may be necessary, initiate action to make appro

suitably modified and used in appropriate adjustments, with due attention

priate negotiated procurements (other to relevant factors such as applicable

than small purchases). transportation factors (see part 19 of

(b) Where the delivery schedule is in

terms of specific calendar dates, invitathis chapter) and those listed below:

tions for bids will include one of the fol(1) Urgency of need for the supplies

lowing provisions: or services; (2) Production time (quantity, com

(1) The foregoing delivery requirements

are based on the assumption that the Goyplexity of design, etc.);

ernment will make award by (purchasing ac(3) Market conditions;

tivity, insert calendar date). Each delivery (4) Transportation time;

date in the delivery schedule set forth herein

will be extended by the number of calendar days after the above date that the contract is in fact awarded. Attention is directed to paragraph 10(d) of the Solicitation Instructions and Conditions, which provides that a written award malled or otherwise furnished to the successful bidder results in a binding contract. Therefore, in computing the avall able time for performance, the bidder should take into consideration the time required for notice of award to arrive through the ordinary malls. (August 1967)

(11) The foregoing dellvery requirements are based on the assumption that the successful bidder will receive the notice of award by (purchasing activity, inserting calendar date). The Government will extend each dellvery date in the delivery schedule set forth herein by the number of calendar days after the above date that the contractor receives notice of award: Provided, That the contractor promptly acknowledges such receipt. (April 1959)

(c) Where the delivery schedule is based on the date of contract (see paragraph (a) (2) of this section), the invitations for bids will include the following provision:

Attention is directed to paragraph 10(d) of the Solicitation Instructions and Conditions, which provides that a written award mailed or otherwise furnished to the successful bidder results in a binding contract. Any award hereunder, or a preliminary notice thereof, will be mailed or otherwise furnished to the bidder the day the award is dated. Therefore, in computing the time available for performance, the bidder should take into consideration the time required for the notice of award to arrive through the ordinary mails. However, a bid offering delivery based on date of receipt by the contractor of the contract or notice of award (rather than the contract date) will be evaluated by adding the maximum number of days normally required for delivery of the award through the ordinary mails. If, as so computed, the delivery date offered is later than the delivery date required in the invitation, the bid will be considered nonresponsive and rejected. (August 1967)

(d) Where the delivery schedule is based on the date of the contract (see paragraphs (a) (2) and (c) of this section), the contract, notice of award, acceptance of proposal, or other contract document executed by the Government shall be mailed or otherwise furnished the contractor on the day it is dated.

(e) Where the delivery schedule is based on date of receipt by the contractor of notice of award (see paragraph (a) (3) of this section), or where It is expressed in terms of specific calendar dates on the assumption that notice of award will be received by &

specified date (see paragraph (b) (2) of this section), the notice of award, acceptance of proposal, or other contract document executed by the Government shall be sent by certified mail, return receipt requested, or shall be accompanied by a date of receipt acknowledgment card in accordance with Departmental procedures.

(f) When the required delivery schedule in the invitation for bids is based on the date of the contract (see paragraph (a) (2) of this section), a bid offering delivery based on date of receipt by the contractor of the contract or notice of award (see paragraph (a) (3) of this section):

(1) Shall be evaluated by adding the maximum number of days normally required for delivery of the award through the ordinary mails; and

(2) If the delivery date offered by the bid (computed in accordance with subparagraph (1) of this paragraph) is later than the delivery date required in the invitation for bids, the bid shall be considered nonresponsive and rejected; but

(3) If award is made under subparagraph (1) of this paragrapii, under the terms of the contract the delivery date will be the number of days, after actual receipt by the contractor of the notice of award, which were specified in the bid. [25 F.R. 14083, Dec. 31, 1960, as amended at 32 F.R. 16398, Nov. 30, 1967; 35 F.R. 6806, Apr. 30, 1970) $ 1.305-4 Time of delivery clauses.

(a) Examples of time of delivery clauses for invitations for bids are set forth below. They may be modified or other clauses may be used to state particular delivery requirements or any special procedures to be used in the evaluation, rejection or award process as regards time of delivery. These clauses also may be suitably modified for use in negotiated procurements where appropriate.

(b) The following clause may be used where delivery by a particular time is necessary to meet the Government's requirements:

TIME OF DELIVERY Delivery is REQUIRED to be made in accordance with the following schedule:

Item No. Quantity Time 11

11

See footnote on next page.

Bids offering delivery of each quantity within the applicable delivery period spect fed above will be evaluated equally as regards time of delivery. Bids offering delivery of a quantity under such terms or conditions that delivery will not clearly fall within the applicable delivery period specified above will be considered nonresponsive and will be rejected. Where a bidder offers an earlier delivery schedule than that called for above, the Government reserves the right to award either in accordance with the REQUIRED schedule or in accordance with the schedule offered by the bidder. If the bidder offers no other delivery schedule, the delivery schedule stated above shall apply. BIDDER'S PROPOSED DELIVERY SCHEDULE

(To be completed by bidder) Item No. Quantity Time 11

Bids offering delivery of a quantity under such terms or conditions that delivery will not clearly fall within the applicable REQUIRED delivery period specified above will be considered nonresponsive and will be rejected.

If the bidder does not propose a different delivery schedule, the Government's DESIRED delivery schedule shall apply. BIDDER'S PROPOSED DELIVERY SCHEDULE

(To be completed by bidder) Item No. Quantity Time

1

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*Contracting offer shall insert the appropriate one of the following phrases, in both of the indicated spaces:

1. "(On) (on or before) the date(s) specified below."

2. "Within the number of days stated below after date of contract."

3. “Within the number of days stated below after the date of receipt of & written notice of award."

4. “Within the periods specified below." (NOTE: When this phrase is inserted, the wording "during month(s) of ----or "not sooner than -------- and not later than ----------" should be used to specify the periods.

(c) The following clause may be used where delivery by a certain time is desired, but not essential, and delivery by & specified later time is necessary to meet the Government's requirements.

TIME OF DELIVERY Delivery is DESIRED by the Government in accordance with the following schedule:

Item No. Quantity Time (*)

*Phrases for insertion as indicated above:

1. "On) (on or before) the date(s) specifed below.'

2. “Within the number of days stated below after date of contract."

3. "Within the number of days stated be. low after the date of receipt of a written notice of award."

4. "Within the periods specified below." (NOTE: When this phrase is inserted, the wording "during the month(s) of --------" or "not sooner than -------- and not later than . -----" should be used to specify the periods.) [25 F.R. 14083, Dec. 31, 1960) § 1.305–5 Research, exploratory devel

opment and advanced development. Solicitations shall generally indicate either a desired term of performance or a completion date. In cases where development of a tangible item by a given date is urgent, solicitations shall indicate such urgency. Generally, solicitations to conduct research and exploratory development work will specify a level of effort for a term of performance. However, solicitations calling for a specific item in the category of such exploratory or advanced development will specify a completion date. A contractor may propose an alternate term of performance or completion date without disqualification of his proposal. (32 F.R. 10157, July 11, 1967) $ 1.306 Approval signatures.

Approval signatures on contracts or purchase authorizations shall be minimized to the greatest practical extent and, in the event that multiple approval signatures are required, they shall, where possible, be obtained concurrently. (25 F.R. 14084, Dec. 31, 1960) 8 1.307 Priorities, allocations and allot.

ments. (25 F.R. 14084, Dec. 31, 1960)

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$ 1.307-1 General.

In the interest of maintaining a minimum priorities and allocations system as a mobilization preparedness measure, it is national policy to require contractors to use ratings and allotment authority to support military procurement, to the extent required by the Bureau of Domestic Commerce (BDC).

(a) DOD Priorities and Allocations Manual. Department of Defense implementation of all rules and regulations published by the Bureau of Domestic Commerce, with respect to which the Department of Defense is delegated administrative responsibility, will be published in the Priorities and Allocations Manual promulgated by Department of Defense Instruction 4410.1. Authorized deviations to the priorities and allocations rules and regulations will likewise be published in the Manual.

(b) Operating responsibility. In accordance with $ 1.403, the Military Departments shall comply with the priorities and allocations program, including the Defense Materials System, as set forth in the Priorities and Allocations Manual and in the rules and regulations published by the Bureau of Domestic Commerce. 136 F.R. 21121, Nov. 4, 1971) 8 1.307-2 Required use of priorities,

allocations, and allotments clause. The contract clause set forth in $ 7.104-18 of this chapter shall be inserted in or attached to all rateable contracts, except that no such clause need be attached to purchase orders of less than $500 which are not rated. Rateable contracts are those contracts for supplies which are required to be supported with rating and allotment authority (see Priorities and Allocations Manual, section 2-1). [26 F.R. 2599, Mar. 28, 1961) 8 1.307–3 Inadequate response to solic

itations. (a) In accordance with the policies and procedures of the Priorities and Allocations System rated contracts and purchase orders or Authorized Controlled Material Orders may be placed on selected suppliers when adequate response to a solicitation is not received. Therefore, when there are no bids or proposals received as a result of a solicitation or if the bids or proposals received do not cover the entire requirement, normal procurement procedures shall be fol

lowed in attempting to locate sources, to the extent exigencies of the procurement will permit. If such efforts are unsuccessful, and it is determined at this point in time that the procurement must be accomplished, then rated orders in the form of rated contracts, rated purchase orders or an Authorized Controlled Material Order shall be presented, to one or more (as appropriate) selected suppliers or manufacturers qualified to produce the item or material. This will be accomplished by a cover letter signed by the contracting officer, citing the requirements of the Defense Production Act and BDC Regulation 2, and requesting timely acceptance thereof by the contractor. The letter shall also request that any reasons for rejection be promptly furnished in writing, as required by the BDC Regulations. Rated orders will be placed pursuant to appropriate negotiation authority. Contracts and purchase orders shall contain, as a minimum, the following information in addition to normal contractual requirements to be a valid rated order:

(1) DO or DX rating on contracts or purchase orders as appropriate.

(2) DMS allotment number or Authorized Controlled Material Orders.

(3) Certification "Certified for National Defense Use Under DMS Regulation 1 or BDC Regulation 2 (as appropriate)."

(4) Delivery schedule.
(5) Signature.

(b) Rated orders or Authorized Controlled Material Orders which are rejected by suppliers shall be forwarded to BDC, through established Departmental priorities assistance channels, for such action as BDC considers appropriate. (36 F.R. 21121, Nov. 4, 1971) § 1.308 Documentation of procurement

actions; maintenance and disposition

of contract files. (a) Each office performing purchasing, contract administration, or contract paying functions shall maintain oficial records of all actions with respect to solicitations and contracts in accordance with the provisions of this section, except that the application of these provisions to small purchases and other simplified procurements covered by Subpart F Part 3 of this chapter, is optional. The head of each such office shall be responsible for the establishment, currency, completeness, and review of this

documentation, and for its final disposition, in accordance with Supplement 2 entitled “Contract File Maintenance, Closeout, and Disposition."

(b) The combination of official contract files listed in S2-101 shall contain documentation of all actions taken with respect to the contract, including final disposition, suficient to constitute a full history of the transaction and permit ready reconstruction of all stages of the transaction, for the purpose of (1) providing a complete background to assure informed decisions at each step in the procurement, (2) supporting actions taken by personnel in the procurement cycle, (3) providing information for reviews and investigations conducted by the Department concerned, the Department of Defense, the General Accounting Office, or others, and (4) furnishing essential facts in the event of Utigation or Congressional inquiries. (32 F.R. 10157, July 11, 1967) $ 1.309 Solicitations for informational

or planning purposes. It is the general policy of the Department of Defense to solicit bids, proposals or quotations only where there is a definite intention to award a contract or purchase order. However, in some cases solicitation for informational or planning purposes may be justified. Invitations for bids and requests for proposals will not be used for this purpose. Requests for quotetions may be issued for informational or planning purposes only with prior approval of an individual at & level higher than the contracting officer. In such cases, the request for quotation shall clearly state its purpose and, in addition, the following statement in capital letters shall be placed on the face of the request: THE GOVERNMENT DOES NOT INTEND TO AWARD A CONTRACT ON THE BASIS OF THIS REQUEST FOR QUOTATION, OR OTHERWISE PAY FOR THE INFORMATION SOLICITED. The foregoing does not probibit the allowance, in accordance with $ 15.205-3 of this chapter, of the cost of preparing such quotations, 126 FR. 2599, Mar. 28, 1961) & 1.310 Liquidated damages.

(a) This section applies to procurement by formal advertising and procurement by negotiation. Liquidated damages provisions may be used when both (1) the time of delivery or performance is such an important factor that the Government may reasonably expect to suffer

damages if the delivery or performance is delinquent, and (2) the extent or amount of such damages would be difficult or impossible of ascertainment or proof. When a liquidated damages provision is to be used in a supply or service contract, insert the provision in 8 7.105-5 of this chapter in accordance with the instructions thereof. Liquidated damage provisions for construction contracts are covered by $$ 18.1:3, 7.603-39, and 8.709 of this chapter.

(b) When a liquidated damages clause is used, the contract shall set forth the amount which is to be assessed against the contractor for each calendar day of delay. The rate of assessment of liquidated damages must be reasonably considered in the light of procurement requirements on a case-by-case basis, since liquidated damages fixed without reference to probable actual damages may be held to be a penalty and therefore unenforceable. If appropriate to reflect the probable damages, considering that the Government can terminate for default or take other appropriate action, the rate of assessment of liquidated damages may be in two or more increments which provide a declining rate of assessment as the delinquency continues. The contract may also include an overall maximum dollar amount or period of time, or both, during which liquidated damages may be assessed, to assure that the result is not an unreasonable assessment of liquidated damages.

(c) The law imposes the duty upon & party injured by another to mitigate the damages which result from such wrongful action. Therefore, where & liquidated damages provision is included in a contract and a basis for termination for default exists, appropriate action should be taken expeditiously by the Government to obtain performance by the contractor or to terminate the contract. If delivery or performance is de. sired after termination for default, efforts must be made to obtain either delivery or performance elsewhere within a reasonable time. For these reasons, particularly close administration over contracts containing liquidated damages provisions is imperative.

(d) Whenever any contract includes 8. provision for liquidated damages for delay. the Comptroller General on the recommendation of the Secretary concerned is authorized and empowered to remit the whole or any part of such damages as in his discretion may be just

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