This subpart applies to all contracts. § 18-1.503 Covenant against contingent fees clause. Every contract except when Standard Forms 19 and 19A are used for formally advertised construction contracts, shall contain the clause set forth below: COVENANT AGAINST CONTINGENT FEES The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the Government shall have the right to annul this contract without liability or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee. § 18-1.504 Improper influence. The term "improper influence" means influence, direct or indirect, which induces or tends to induce consideration or action by any employee or officer of the United States with respect to any Government contract on any basis other than the merits of the matter. § 18-1.505 General principles and standards applicable to the covenant. The principles and standards set forth in this subpart are intended to be used as a guide in the negotiation, award, administration, and enforcement of all contracts. § 18-1.505-1 Contingent character of the fee. Any fee, whether called commission, percentage, brokerage, or contingent fee, or otherwise denominated, is within the purview of the covenant if, in fact, any portion thereof is dependent upon success in obtaining or securing the Government contract or contracts involved. The fact, however, that a fee of a contingent nature is involved does not preclude a relationship which qualifies under the exceptions to the prohibition of the covenant. § 18-1.505-2 Exceptions to the prohi bition of the covenant. Excepted from the prohibition of the covenant are "bona fide employees" and "bona fide established or selling agencies maintained by the contractor for the purpose of securing business." § 18-1.505-3 Bona fide employee. The term "bona fide employee," for the purpose of the exception to the prohibition of the covenant, means an individual (including a corporate officer) employed in good faith by a concern to devote his full time to such concern and no other concern and over whom the concern has the right to exercise supervision and control as to time, place, and manner of performance of work. It is recognized that a concern, especially a small business concern, may employ an individual who represents other concerns. The factors set forth in § 18-1.505-4, except paragraph (d) thereof, shall be applied to determine whether such an individual comes within the exception to the prohibition of the covenant. (However, in applying such factors, the word "employee" shall be substituted for the word or words "agent" and "selling agency" as they appear throughout § 18-1.505-4. except paragraph (d) thereof.) (a) A person may be a bona fide employee whether his compensation is on a fixed salary basis, or, when customary in the trade, on a percentage, commission, or other contingent basis or a combination of the foregoing. (b) The hiring must contemplate some continuity and it may not be related only to the obtaining of one or more specific Government contracts. (c) An employee is not "bona fide" who seeks to obtain any Government contract or contracts for his employer through the use of improper influence or who holds himself out as being able to obtain any Government contract or contracts through improper influence. § 18-1.505-4 Bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business. In determining whether an agency is a "bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business," the factors set forth in paragraphs (a) through (e) of this section shall be considered. They are necessarily incapable of exact measurement or precise definition, and it is neither possible nor desirable to prescribe the relative weight to be given any single factor as against any other factor or as against all other factors. The conclusions to be reached in a given case will necessarily depend upon a careful evaluation of the agreement and other attendant facts and circumstances. (a) The fees charged should not be inequitable and exorbitant in relation to the services actually rendered. That is, the compensation should be commensurate with the nature and extent of the services and should not be excessive as compared with the fees customarily allowed in the trade concerned for similar services related to commercial (nonGovernment) business. In evaluating reasonableness of the fee, the services of the agent other than actual solicitation should be considered; for example, technical, consultant, or managerial services, and assistance in the procurement of essential personnel, facilities, equipment, materials, or subcontractors for performance of the contract. (b) The selling agency should have adequate knowledge of the products and the business of the concern represented, as well as other qualifications necessary to sell the products or services on their merits. (c) There should ordinarily be a continuity of relationship between the contractor and the agency. The fact that the agency has represented the contractor over a considerable period of time is a factor for favorable consideration. It is not intended, however, to disqualify a newly established contractor-agent relationship where a continuing relationship is contemplated by the parties. (d) It should appear that the agency is an established concern. The agency may be either one which has been in business for a considerable period of time or a new agency which is a presently going concern and which is likely to continue in business as a commercial or selling agency in the future. The business of the agency should be conducted in the agency name and characterized by the customary indications of the conduct of a regular business. (e) The fact that a selling agency confines its selling activities to the field of Government contracts does not, in and of itself, disqualify it under the covenant. The fact, however. that the selling agency is employed to secure business generally, that is, to represent the concern in connection with sales to the Government as well as regular commercial sales to non-Government activities, is a factor entitled to favorable consideration in evaluating the case as one coming within the authorized exception. Arrangements confined, however, to obtaining Government contracts, particularly those involving a selling agency organized immediately prior to or during periods of expanded procurement resulting from conditions of national emergency, must be closely scrutinized. However, any agency or agent is not "bona fide" which seeks to obtain any Government contract or contracts for its principals through the use of improper influence or which holds itself out as being able to obtain any Government contract or contracts through improper influence. § 18-1.505-5 Fees for information. Contingent fees paid for information leading to obtaining a Government contract or contracts are included in the prohibition and, accordingly, are in breach of the covenant unless the agent qualifies under the exception as a bona fide employee or a bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business. § 18-1.506 Representation and agreement required from prospective con tractors. (a) Except as provided in § 18-1.5072, contracting officers shall inquire of and secure a written representation from prospective contractors as to whether they have employed or retained any company or person (other than a full-time employee working solely for the prospective contractor) to solicit or secure the contract, and shall secure a written agreement to furnish information relating thereto as required by the contracting officer. (b) When an invitation for bids is issued, the requirements of paragraph (a) of this section shall be accomplished by requiring the bidder to check the appropriate boxes in the following statement to be included in the invitation or bid form (also, see § 18-1.507-50): Bidder or offeror represents: (a) That he has, has not, employed or retained any company or person (other than a full-time bona fide employee working solely for the bidder or offeror) to solicit or secure this contract, and (b) that he has, has not, paid or agreed to pay to any company or person (other than a full-time bona fide employee working solely for the bidder or offeror) any fee, commission, percentage, or brokerage fee, contingent upon or resulting from the award of this contract, and agrees to furnish information relating to (a) and (b) above as requested by the Contracting Officer. (For interpretation of the representation, including the term "bona fide employee," see Code of Federal Regulations, Title 44, Subpart 1-1.5.) (March 1970) (c) When a procurement is to be effected by negotiation, the requirements of paragraph (a) of this section will be accomplished by requiring the offeror either to (1) check the appropriate boxes in the above statement, or (2) execute a written representation which substantially conforms with the above statement. This may be accomplished by including the above statement in the request for proposals or quotations or by obtaining an appropriate statement during the course of negotiations (also see § 18-1.507-50). § 18-1.506-1 Interpretation of the representation. (a) For the purpose of the representation and agreement required from the prospective contractor, as described in § 18-1.506, the definition of "bona fide employee" is as specified in § 18-1.505-3. (b) The fact that the prospective contractor retains a person who does not devote his full time solely to the prospective contractor does not necessarily mean that the relationship involved is in violation of the convenant against contingent fees or that there is any stigma attached to the contractor-agent relationship. It does mean, however, that the prospective contractor must fill out the representation in the affirmative and, as required, furnish information with respect to such employment or retainer. (c) If the representation would otherwise be answered in the affirmative, the fact that the person employed or retained by the bidder or contractor is an attorney, or a public relations consultant, or has any other special or professional title, does not permit answering in the negative. § 18-1.507 Use of Standard Form 119. Except as provided in § 18-1.507-2, Standard Form 119 shall be used without deviation when either part of the inquiry provided for by § 18-1.506 is answered in the affirmative. The form shall also be used without deviation in any other case when the contracting officer desires to obtain such information. When, after use of the form, further information is required, it may be obtained in any appropriate manner. Normally, submission of the form will be required only of successful bidders and contractors. § 18-1.507-1 Statement in lieu of form. Any bidder or proposed contractor who has previously furnished a Standard Form 119 to the office issuing the invitation or negotiating the contract may be permitted to accompany his bid with, or submit in connection with the proposed contract, a signed statement: (a) Indicating when such completed form was previously furnished; (b) Identifying by number the previous invitation or contract in connection with which such form was submitted; and (c) Representing that the statements in such previously furnished form are applicable to such subsequent bid or contract. In such case, submission of an additional completed Standard Form 119 need not be required. See § 18-1.507-50. § 18-1.507-2 Exceptions. The inquiry and agreement specified in § 18-1.506 need not be made and submission of Standard Form 119 need not be requested in connection with the following: (a) Any advertised contract in which the aggregate amount involved does not exceed $25,000; (b) Any negotiated contract in which the aggregate amount involved does not exceed $5,000; (c) Any negotiated contract for perishable subsistence supplies in which the aggregate amount involved does not exceed $25,000; (d) Any contract for services which are required to be performed by an individual contractor in person under Government supervision and paid for on a time basis; (e) Any contract for public utility services furnished by a public utility company where the utility company's rates for the services furnished are subject to regulation by Federal, State, or other regulatory body and the public utility company is the sole source of supply; and (f) Contracts to be made in foreign countries. § 18-1.507-50 Additional provision. (a) In addition to the statement to be included in the invitation or bid form required by § 18-1.506, contracting officers may add the following provision to the invitation or bid form: If the bidder, by checking the appropriate box provided therefor in his bid, has represented that he has employed or retained a company or person (other than a full-time bona fide employee) to solicit or secure this contract, he may be requested by the Contracting Officer to furnish with his bid a completed Standard Form No. 119 (Contractor's Statement of Contingent or Other Fees for Soliciting or Securing Contract). If the bidder has previously furnished a complete Standard Form No. 119 to the office issuing this invitation for bids, he may accompany his bid with a signed statement, in lieu of Standard Form 119, (a) indicating when such completed Form was previously furnished; (b) identifying by number the previous invitation or contract in connection with which such Form was submitted; and (c) representing that the statements in such previously furnished Form are applicable to this bid. (February 1962) (b) The above statement, suitably modified, may be included in the request for proposals or quotations, in addition to the statement provided for in § 181.506(c). (b) If the indicated successful bidder or proposed contractor makes such representation in the affirmative, a completed Standard Form 119 shall be requested from the bidder or proposed contractor. In the case of formal advertising, the making of an award in accordance with the procedures set forth in this chapter need not be delayed pending receipt of the form. In the case of negotiation, if the proposed contractor makes such representation in the affirmative, he shall be required to file a completed Standard Form 119 prior to acceptance of the offer or execution of the contract, unless the Director of Procurement considers that the interest of the Government will be prejudiced by the suspension of negotiations pending receipt and consideration of an executed Standard Form 119. (c) If the indicated successful bidder or proposed contractor fails to furnish the representation and agreement as set forth in § 18-1.506, such failure shall be considered a minor informality and, prior to award, such bidder or proposed contractor shall be afforded a further opportunity to furnish such representation and agreement. A refusal or failure to furnish such representation and agreement after such opportunity has been afforded shall require rejection of the bid or offer. § 18-1.508-1 Failure or refusal to fur nish Standard Form 119. If the otherwise successful bidder or contractor, upon request, fails or refuses to furnish a completed Standard Form 119, or a statement in lieu thereof as provided in § 18-1.507-1, one of the following actions shall be taken: (a) If an award has not been made or an offer accepted, the matter shall be referred to the procurement officer for a determination as to whether the bid or offer should be rejected; or (b) If the contract has been awarded or offer accepted, the matter shall be referred to the Director of Procurement, supported by a statement and summary of all pertinent facts and appropriate recommendations, for a determination as to what actions should be taken, such as making an independent investigation or considering the eligibility of the contractor as a future contractor. § 18-1.508-2 Misrepresentations or violations of the covenant against contingent fees. In case of misrepresentation, or violation or breach of the covenant against contingent fees, or some other relevant impropriety, one or more of the following actions shall be taken: (a) If an award has not been made or an offer accepted, the matter shall be referred to the procurement officer for a determination as to whether the bid or offer should be rejected; or (b) If an award has been made or an offer accepted, the matter shall be referred to the Director of Procurement, supported by a statement and summary of all pertinent facts and appropriate recommendations, for a determination as to what actions should be taken, such as (1) Enforcing the covenant in accordance with its terms; that is, as the best interest of the Government may appear, annul the contract without liability or recover the full amount of the fee involved; (2) Considering the eligibility of the contractor as a future contractor; or (3) Referring the case to the Department of Justice. (See § 18-1.111.) § 18-1.509 Preservation of records. Contracting officers shall preserve, for enforcement or report purposes, at least one executed copy of any representation and completed Standard Form 119, or statement in lieu of the form, with a record of any other pertinent data, including data as to action taken. § 18-1.550 Responsibility for protecting information contained in completed Standard Form 119. Information contained in completed Standard Form 119 shall be considered private and personal. Personnel having access to this information shall not discuss or transmit the information gained by them to any other person not entitled or authorized to have access to such information. Subpart 18-1.6-Debarred, Ineligible, and Suspended Bidders § 18-1.600 Scope of subpart and definitions. (a) Scope. This subpart prescribes policies and procedures relating to the debarment of bidders for any cause, ineligibility of bidders under section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)), and the suspension of bidders for alleged fraud or other criminal conduct. (b) Definition of Affiliates. Business concerns are considered affiliates of each other when, either directly or indirectly: NASA will establish and maintain a list of firms and individuals whom it has debarred or suspended, to whom contract awards of any character, including sales, will not be made, and from whom bids or proposals will not be solicited as provided in this subpart. This list will supplement the Joint Consolidated List referred to in § 18-1.601-3. The Procurement Office, NASA Headquarters is responsible for the establishment and maintenance of the NASA list and will issue copies of this list to each procurement office. § 18-1.601-2 Information contained in NASA list. The NASA list shall show as a minimum the following information: (a) The names (in alphabetical order) of those firms or individuals debarred, ineligible, or suspended with appropriate cross-references where more than one name is involved in a single action; (b) The basis of authority for each action; (c) The extent of restrictions imposed; and (d) The termination date for each debarred listing. § 18-1.601-3 Joint consolidated list. The Department of the Army is responsible for the issuance of a Joint Consolidated List of firms and individuals ineligible, disqualified, debarred, suspended, or otherwise prohibited from entering into contractual relationship with the Departments of the Army, the Navy, and the Air Force. For the purposes of economy and uniformity, since the Military Departments contract essentially with the same segments of industry as NASA, the Joint Consolidated List is |