of Government officers and employees, every person in each department who is charged with the administration and expenditure of Government funds must refrain from such conduct as would interfere with the full, proper, and impartial discharge of his official duties, or as would give rise to a reasonable suspicion that his conduct was motivated by selfinterest rather than by the best interests of the Government.

(b) Air Force Regulation 70-5 is incorporated in these procedures by reference. Heads of procuring activities will insure that a copy of Air Force Regulation 70-5 is furnished to each person, both military and civilian, engaged in procurement activities.

(c) No member of the Department of the Air Force, military or civilian, may act as an agent of the United States Government in advising, recommending, making, or approving the purchase or disposition of supplies or other property, or in contracting therefor, if such person may be admitted to share or receive directly or indirectly any pecuniary profit or benefit from such purchase or contract.

(d) No member of the Department of the Air Force, military or civilian, shall be in direct charge of the negotiation of, or exercise authority for the final approval of, any contract with any corporation, joint-stock company, association, or firm, if at any time within 2 years prior to taking such action, the person was employed by or engaged in a course of substantial non-Governmental business dealings with the corporation, jointstock company, association, or firm.

(1) The Under Secretary of the Air Force is authorized to make exemptions to the policy referred to in paragraph (d) of this section, in cases where he considers the application of the policy impracticable and does not serve the best interests of the Government.

§ 1000.306 Hospitalization and medical care for contractor's employees at oversea installations. (a) Under existing statutes and procurement regulations, the Military Departments have the authority, under certain circumstances, to contract for the hospitalization and medical care of employees of contractors with the United States at oversea locations, as a part of the consideration for such contracts.

(b) During the present shortage of medical personnel, all practicable means should be employed to reduce the workload of the medical departments of the services and to make the most efficient use of available personnel. Accordingly, in negotiating such contracts, it is requested that all procurement authorities in the Military Departments be instructed to avoid conditions which would place upon the services the responsibility of providing medical and dental care and hospitalization for contractors' employees; except where isolation and lack of civilian facilities for hospitalization or economic advantage to the Government become overriding factors of importance.

(c) This policy does not apply to preventive medical functions overseas, which should remain the responsibility of the Military Departments.

(d) In negotiating contracts, all procurement personnel will avoid, to the extent possible, including conditions which would place upon the services the responsibility of providing medical and dental care (out patient), and hospitalization (in patient) for contractor's employees at oversea locations.

[18 F. R. 6260, Oct. 1, 1953]

§ 1000.307 Neutrality Act (International Traffic in Arms)-(a) Basic law. Section 12 of the act of November 4, 1939 (54 Stat. 10; 22 U. S. C. 452), also referred to as the "Neutrality Act of 1939," established the National Munitions Control Board, upon the recommendation of which the President was authorized to proclaim, from time to time, a list of articles which shall be considered arms, ammunition and implements of war for the purpose of said act. The Secretary of State promulgates rules and regulations with regard to said act and except where otherwise provided by law, the administration was vested in the Department of State. The Neutrality Act further provides for the registration of persons engaged in manufacturing, exporting, or importing any arms, ammunition, or implements of war listed in the President's Proclamation; and that no purchase of arms, ammunition, or implements of war shall be made on behalf of the United States from any person who shall have failed to register under provision of said act.

(b) Proclamation of the President. The President, in Proclamation 2776,

March 26, 1948 (13 F. R. 1623; 3 CFR 1948 Supp., p. 31), has proclaimed the articles which are considered arms, ammunition, and implements of war for purposes of the basic law as follows:

Category I-Small arms and machine guns

Rifles, carbines, revolvers, pistols, machine pistols, and machine guns (using ammunition of caliber .22 or over); barrels, mounts, breech mechanisms, and stocks therefor.

Category II-Artillery and projectors

Guns, howitzers, cannon, mortars, and rocket launchers (of all calibers), military flame throwers, military smoke, gas, or pyrotechnic projectors; barrels, mounts, and other components thereof.

Category III-Ammunition

Ammunition of caliber .22 or over for the arms enumerated under categories I and II above; cartridge cases, powder bags, bullets, jackets, cores, shells (excluding shotguns); projectiles and other missiles; percussion caps, fuses, primers, and other detonating devices for such ammunition.

Category IV-Bombs, torpedoes, and rockets

Bombs, torpedoes, grenades, rockets, mines, guided missiles, depth charges, and components thereof; apparatus and devices for the handling, control, discharge, detonation, or detection thereof.

Category V-Fire control equipment and range finders

Fire control equipment, range, position and height finders, spotting instruments, aiming devices (gyroscopic, optic, acoustic, atmospheric, or flash), bombsights, gunsights, and periscopes for the arms, ammunition, and implements of war enumerated in Proclamation 2776.

Category VI-Tanks and ordnance vehicles

Tanks, armed or armored vehicles, armored trains, artillery and small arms repair trucks, military half-tracks, tank recovery vehicles, tank destroyers; armor plate, turrets, tank engines, tank tread shoes, tank bogie wheels, and idlers therefor.

Category VII-Poison gases and toxicological agents

All military toxicological and lethal agents and gases; military equipment for the dissemination and detection thereof and defense therefrom.

Category VIII-Propellants and explosives Propellants for the articles enumerated in categories III, IV, and VII; military high explosives.

Category IX-Vessels of war

Vessels of war of all kinds, including amphibious craft, landing craft, naval tenders, naval transports, and naval patrol craft,

(7) Military electronic computing devices; (8) Military miniature and subminiature vacuum tubes and photoemissive tubes;

(9) Military armor plate;

(10) Military steel helmets;

(11) Military pyrotechnics;

(12) Synthetic training devices for military equipment;

(13) Military ultrasonic generators; (14) All other material used in warfare which is classified from the standpoint of military security.

(c) Interpretation of basic law by Department of State. Munitions Division Bulletin 1, Department of State, "New Requirements Relating to the Licensing for Export and Import of Articles Defined as Arms, Ammunition, and Implements of War," April 1, 1948, indicated the procedures to be followed by those engaged in the business of manufacturing, exporting, or importing any of the arms, ammunition, or implements of war enumerated in the President's Proclamation pending issuance of a revised edition of the pamphlet "International Traffic in Arms." Inquiries relative to the application of Proclamation 2776 should be submitted to the Munitions Division, Department of State, Washington 25, D. C.

(d) Registration of certain manufacturers. The Chief, Munitions Division, Department of State, has advised that:

The Department of State is of the opinion that the following, among others, are not obligated to register as manufacturers under the terms of the act:

(1) Producers or suppliers of articles or equipment, of common military use, but not specifically listed in Proclamation 2776.

(2) Producers or suppliers of small parts or components of the articles or major units enumerated in Proclamation 2776, when

such small parts or components have been interpreted as coming outside the purview of the Proclamation.

(3) Persons or firms engaged solely in research and development with resultant production for experimental or scientific purposes, when such production is not followed by manufacture in quantity for sale.

(4) Producers or suppliers of articles classified from the standpoint of military security if such articles are not adaptable to "use in warfare" in the sense of direct or indirect combat operations.

(5) Persons or firms engaged solely in the manufacture of arms, ammunition, and implements of war outside the jurisdiction of the United States.

In connection with the foregoing, it is my understanding that an administrative determination by the Department of State that a particular person or firm is not obligated to register under the provisions of the act will serve to relieve procurement officers of the Military Establishment of any responsibility in so far as applying the conditions of subsection (g) in their dealings with persons seeking military contracts, providing such persons present a statement by the Department of State expressing such an exemption. It is further understood that the foregoing arrangement is acceptable to the Office of the Comptroller General.

In cases of persons or firms required to register, they will be authorized to present in evidence thereof either a photostatic copy of their Certificate of Registration, or a statement from the Department certifying that they are registered, to that part of the Milltary Establishment from which they desire to obtain manufacturing or supplying contracts.

(e) Contract clause. The contract clause prescribed for insertion in contracts subject to the provisions of the basic law is set forth in Part 7 of this title.

[15 F. R. 8971, Dec. 16, 1950, as amended at 18 F. R. 6260, Oct. 1, 1953]

§ 1000.308 Robinson-Patman Act. The Attorney General has expressed the opinion that the act of October 15, 1914 (38 Stat. 730) as amended by the act of June 19, 1936 (49 Stat. 1526; 15 U. S. C. 12 et seq.), commonly referred to as the Robinson-Patman Act is not applicable to Government contracts for supplies (38 Op. Atty. Gen. 539). If a prospective bidder inquires concerning the application of the Robinson-Patman Act, he should be referred to the opinion of The Attorney General cited above.

§ 1000.309 Classified procurements; check list. Department of Defense Form 254, "Security Requirements Check List" will be used in precontract negotiations

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when applicable for procurements by formal advertising and by negotiation, when contractors and subcontractors must have access to classified matter. This form will be prepared in accordance with the instructions thereon and will accompany all contracts and subcontracts classified top secret, secret, confidential, or restricted, and all contracts and subcontracts involving access to classified matter by a contractor or subcontractor. In addition to the initial completion of the form, necessary changes in security classification will be made as appropriate and will be reflected on the form when down-grading action is taken in compliance with applicable regulations. This form shall not be considered a part of the contract but shall be used to implement the "Military Security Requirements Clause" and any secrecy agreement which may be existent.

[16 F. R. 2794, Mar. 30, 1951]

§ 1000.310 Unauthorized release of procurement information. All personnel of the Air Force, both military and civilian, are responsible for refraining from releasing to individual business concerns or their representatives any preknowledge such personnel may possess or have acquired in any way concerning procurements or purchases of supplies by any procuring activity of the Air Force. Such information will be released to all potential contractors at the same time, as far as possible, and only through duly designated agencies, so that one potential contractor may not be given an unfair advantage over another.

[16 F. R. 2794, Mar. 30, 1951]

§ 1000.312 Place of delivery—(a) Domestic shipments. Unless there are valid reasons to the contrary (such as, but not restricted to, industry practice, applicability of State taxes, or destination unknown) the procurement of supplies for delivery within the continental United States will be in accordance with the following policy:

(1) When it is estimated that any shipment to a single destination will not equal a minimum carload or truckload lot (a minimum lot shall be considered to weigh approximately 20,000 pounds), delivery will be made on the basis of all transportation charges paid to destina

tion.

(2) When it is estimated that any single contract will require a shipment of a minimum carload or truckload lot, delivery may be either on the basis of:

(i) F. o. b. carrier's equipment, or wharf, or freight station (at the Government's option), at or near contractor's plant, at a specified city or shipping point, or

(ii) On the basis of all transportation charges paid to destination, whichever is most advantageous to the Government. In formally advertised procurements the Invitation for Bids shall provide that bidders may bid on either or both bases set forth in this paragraph. Bids shall be evaluated on the basis of over-all cost to the Government.

(b) Oversea shipments. In case of supplies destined for overseas, wherever possible, regardless of the quantity of the shipment, delivery will be made on the basis of f. o. b. carrier's equipment, or wharf, or freight station (at the Government's option), at or near contractor's plant, at a specified city or shipping point. Oversea shipments inIclude those supplies shipped direct to a port area for export or to storage areas for subsequent reshipment to a port area for export.

[18 F. R. 6260, Oct. 1, 1953]

§ 1000.313 Broadening the industrial base of procurement programs. The following memorandum from the Secretary of Defense, December 18, 1950, is quoted for information and guidance:

Memorandum for

The Secretary of the Army. The Secretary of the Navy. The Secretary of the Air Force. Subject: Broadening the Industrial Base of Procurement Programs.

The President has declared a National Emergency. The issuance of this declaration permits the Secretaries of the Military Departments to authorize the negotiation of purchases and contracts pursuant to the authority contained in section 2 (c) (1) of the Armed Services Procurement Act of 1947. The Munitions Board has recommended, and I have approved, the following statement of policy.

The Military Departments have already received instructions to accelerate procurement actions in connection with 2d Supplemental 1951 Funds. It is essential, in complying with those instructions, that contracts be spread across industry as widely as possible in order to broaden the industrial base of our procurement program. Broadening the base will require wider use of negotiation. Formal advertising will con

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tinue to be used in appropriate cases, but not when such use will adversely affect the acceleration of procurement or the broadening of the industrial base contemplated by this directive.

The Military Departments should pay particular attention to:

(a) The greatest possible integration of current procurement contracts with the industrial mobilization program and the accepted schedules of production.

(b) The equitable distribution of procurement contracts among the maximum number of competent suppliers. The concentration of contracts with a few leader suppliers is to be avoided unless the necessity therefor is clear.

(c) The utilization of existing open industrial capacity to the maximum. Expansion of facilities should not be authorized Whenwhen open capacity can be found. ever time permits, and in order to broaden the mobilization base, additional contractors should be utilized in lieu of multi-shift or overtime operation.

(d) The fullest possible use of small busi

ness concerns.

(e) The utilization in negotiation of competition and multiple awards, whenever possible.

(f) The aggressive encouragement or requirement of subcontracting by prime contractors.

(g) The provision of maximum incentive of the producer for the reduction of his costs.

(h) The placement of contracts with a view to economies in the use of transportation facilities.

(i) The availability of manpower in distressed employment areas or in areas of manpower shortages.

(j) The reservation of special skills and abilities for the more difficult production tasks.

To the extent necessary, Departmental procurement procedures and practices should be modified to conform to the foregoing. Particular attention should be paid to the caliber of personnel engaged in the negotiation of contracts.

(Signed) G. C. MARSHALL. [16 F. R. 2794, Mar. 30, 1951]

§ 1000.314 Synopses of proposed procurements-(a) Statement of policy. (1) The policy of the Military Departments is that all unclassified, negotiated, and advertised procurements exceeding $10,000 made in the continental United States be publicized, except:

(i) Research and development projects which are not susceptible of accomplishment by small business.

(ii) Procurements for studies or surveys.

(iii) Major items, of equipment, such as tanks, engines, airframes, ships, and

Page 313

so forth, when it can clearly be demonstrated that the tem can only be manufactured, produced, or developed by large

v Other items which small business firms could not supply because of patent Hallits, copyrights, or secret processes.

V Purchases which must be made too quickly to permit prospective conTraccets, dependent on the synopses for mocination, to obtain Invitations for Bids or Requests for Proposals and to propare and submit them.

(2) Synopses of Proposed Procurements, which are designed to furnish potential suppliers with sufficient information to determine whether they will be interested in bidding or quoting, will be prepared in accordance with the instructions set forth in this section.

(3) Policies with respect to dissemination of information to unsuccessful bidders and suppliers concerning awards are set forth in Subchapter A, Chapter I of this title, and §§ 1001.407 and 1002.104 of this subchapter. Instructions pertaining to synopses of awards are set forth in § 1000.315.

(b) Applicability. In accordance with the policy stated in paragraph (a) of this section, instructions in this section shall apply to all proposed procurements (including procurements for the construction, alteration, or repair of buildings, bridges, roads, or other kinds of real property), whether negotiated or formally advertised, when:

(1) The estimated amount exceeds $10,000;

(2) The procurement is unclassified; (3) The procurement is effected by any purchasing office in the continental United States, including (i) the principal purchasing office listed in § 1000.202 and (ii) all other field purchasing offices and activities located in the United States; and

(4) None of the exceptions set forth in paragraph (a) (1) of this section, are applicable to the procurement.

(c) Action by Small Business Specialists. The Small Business Specialist in the purchasing office mentioned in paragraph (b) (3) of this section will be responsible for screening all proposed procurements and taking necessary action to see that all procurements coming within the above cited policy are promptly publicized in the Department of Commerce Synopsis of Proposed Pro

curements.

Proposed procurements will be screened immediately upon receipt of procurement directive, purchase request, or similar purchase authorization, so that there will be no delay in the procurement action.

(d) Action by purchasing offices. (1) Purchase requests and similar documents which authorize or direct the initiation of purchase actions will be made available to the Small Business Specialist, simultaneously with receipt thereof by contracting officers, for examination and determination as to whether the proposed procurement is required to be publicized in accordance with this section.

(2) Purchasing offices will prepare and forward synopses of proposed procurements at the earliest practicable time prior to issuance of invitations for bids or requests for proposals (quotations), or prior to commencement of negotiations in any form; and, in any event, immediately on completion of final drafts of any written solicitation.

(3) Synopses of proposed procurements will be teletyped at the end of each day (or as they occur), in accordance with instructions issued by the Commanding General, Air Materiel Command, to the following address:

Synopsis, Commerce Department, Field Service, Chicago, Ill.

(4) Where access to the Air Force comunications network is not available, synopses will be dispatched via air mail to the following address:

Field Service, Administrative Office, U. S. Department of Commerce, 433 West Van Buren Street, Chicago 7, Ill.

(5) A copy of each synopsis forwarded will be made available at purchasing offices for examination by interested persons. These copies will contain columnar headings and a statement to the effect that further information will be supplied upon request, if available.

(6) In addition, one copy of each synopsis will be sent at the end of each day (or as they occur) to the Procurement Information Center, Office of the Under Secretary of the Army, Old Post Office Building, 12th Street and Pennsylvania Ave. NW., Washington 25, D. C.

(7) A reasonable number of copies of each letter of Proposal, Request for Proposal, and Invitation for Bids, publicized in the Department of Commerce Synopsis of Proposed Procurements, including