examples of such obvious or apparent mistakes are the following: obvious error in placing decimal point; obvious discount errors (for example: 1 percent 10 days, 2 percent 20 days, 5 percent 30 days); erroneous quotations of a lower price f. o. b. destination than f. o. b. factory.

§ 401.405-2 Mistakes other than obvious or apparent mistakes of a clerical nature. (a) In the case of any suspected or alleged mistake in a bid other than an obvious or apparent clerical mistake on the face of the bid, the Contracting Officer shall obtain from the bidder, prior to award, either a verification of the bid or evidence in support of the mistake, whereupon the case shall be processed to the General Accounting Office in accordance with procedures prescribed by each respective Department: Provided, That:

(1) If the bidder fails or refuses to furnish evidence in support of the mistake, the Contracting Officer shall consider the bid in the form submitted; or

(2) If time does not permit processing in accordance with customary procedures, and if there is no room for doubt as to the price or other terms intended in the bid in which a mistake occurred, the Contracting Officer (i) in the case of a mistake in the lowest bid which as clearly intended would not be the lowest bid, may disregard such bid, or (ii) in the case of a mistake in the lowest bid which as clearly intended would still be the lowest bid, shall make the award on the basis of such low bid as originally submitted, but subject to correction if authorized by the General Accounting Office, or (iii) in the case of a mistake in any bid other than the lowest bid, shall consider such bid on the basis of its price or other terms as clearly intended.

(b) Whenever a mistake in bid is to be processed in accordance with customary procedures, the following papers should accompany a copy of the bid which contains the suspected or alleged mistake:

(1) A copy of the invitation for bids; (2) An abstract or record of bids received;

(3) A statement from the bidder, and any additional supporting evidence such as work sheets or other data used in preparing the bid, setting forth the complete facts on which the allegation of mistake is based and requesting such

definite relief as withdrawal of the bid, change in bid price, etc.; and

(4) A statement from the Contracting Officer showing the date when notice of the alleged mistake was received, and any additional information he may have as to the alleged mistake, together with his recommendations.

§ 401.405-3 Disclosure of mistakes after award. When an alleged mistake in a bid is disclosed after award has been made, the case shall be processed in accordance with procedures prescribed by each respective Department.

§ 401.406

Award. Award shall be made with reasonable promptness by written notice to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, price and other factors considered: Provided, That an award shall not be made to other than the lowest responsible bidder except in accordance with procedures prescribed by each respective Department. Award will be effected by mailing or delivering to the bidder a properly executed award or preliminary notice of award.

§ 401.406-1 Responsible bidder. A "responsible bidder" is a bidder who satisfies all of the following requirements:

(a) Is a manufacturer or regular dealer, as defined in § 400.201-9 of this subchapter;

(b) Is financially and otherwise able to perform the contract; and

(c) Is otherwise qualified and eligible by law and under this subchapter.

§ 401.406-2 Discounts. In determining which of several bids received is the lowest, any discount offered shall be deducted from the bid price under the assumption that the discount shall be taken, unless it is known with reasonable certainty that the Government cannot take advantage of the discount within the time specified. If, when the bids are opened, facts become known which render it necessary to disregard a discount, a full statement of the facts and circumstances and of the reasons for the action taken shall be entered upon the abstract or record of bids and on U. S. Standard Form 1036 (as referred to in § 401.406-5) whenever such bid would have been the lowest bid received if the discount offered were taken.

§ 401.406-3 Other factors to be considered. Among other factors besides

price that may be considered in making an award are the following:

(a) Judgment, skill, and integrity of a bidder;

(b) Reputation and experience of a bidder, and prior work of a similar nature done by him;

(c) Foreseeable costs or delays to the Government resulting from differences in inspection, shipping, location of supplies, etc.;

(d) Changes made or requested in any of the provisions of the solicitation, to the extent that any such change does not constitute ground for rejection of the bid under the provisions of § 401.403;

(e) Restrictions or conditions imposed in the bid; and

(f) Advantages or disadvantages to the Government that might result from making multiple awards.

§ 401.406-4 Equal low bids. (a) When two or more low bids are equal in all respects (taking into consideration cost of transportation, cash discounts, and all other factors properly to be considered), award shall be made by a drawing by lot which shall be witnessed by at least three persons and which may be attended by the bidders or their representatives: Provided:

(1) Subject to subparagraphs (2), (3), and (4) of this paragraph, (i) in the case of equal low bids, one of which is submitted by a small business concern, as defined in § 400.302–3 of this subchapter, award shall be made to the small business concern, and (ii) in the case of equal low bids, two or more of which are submitted by small business concerns, award shall be made by a drawing by lot limited to the small business concerns.

(2) Where two or more equal low bids are received from small business concerns, one of which is submitted by a bidder who will perform the contract in a distressed employment area, designated as such by or on behalf of the President, award shall be made to the small business concern who will perform the contract in the distressed employment area.

(3) In the case of equal low bids, two or more of which are submitted by small business concerns who will perform the contract in a distressed employment area, award shall be made by a drawing by lot limited to the small business concerns in the distressed employment area.

(4) Where two or more equal low bids are received, one bid being from a business concern (whether small or not) not in a distressed employment area and the other being from a bidder who, although not a small business concern, will perform the contract in a distressed employment area, award shall be made to the latter.

(b) When award is to be made by lot and the information available shows that the product of a particular manufacturer is offered by more than one bidder, a preliminary drawing by lot shall be made to ascertain which of the bidders offering the product of a particular manufacturer will be included in the final drawing to determine the award.

§ 401.406-5

Statement and certificate

of award. In connection with every purchase made by formal advertising, the Contracting Officer shall prepare and execute a statement and certificate of award on U. S. Standard Form 1036, which shall be attached to the original documents and papers constituting the contract which are forwarded to the General Accounting Office. Such certificate shall either (a) state that the accepted bid was the lowest bid received, or (b) list all lower bids and set forth reasons for accepting a bid other than the lowest. In each case where an award is made pursuant to § 401.406-4 (a) (1), (2), (3), or (4), such certificate shall briefly recite the circumstances under which award was made and shall contain a statement that it has been administratively determined that the award will further the Congressional policy with respect to small business expressed in section 2 (b) of the Armed Services Procurement Act of 1947 or will further the President's policy with respect to distressed employment areas, or both, as the case may be.

§ 401.407 Information to bidders. To the extent reasonable and practicable, and in accordance with procedures prescribed by each respective Department, any bidder or his authorized representative shall be furnished with authorized information in response to proper questions, including the names of the successful bidders and the prices at which awards were made for items on which the inquirer submitted bids, or in the alternative shall be informed that a copy

of the abstract or record of bids is available for inspection at the purchasing office.

SUBPART E-QUALIFIED PRODUCTS

§ 401.500 Scope of subpart. This subpart deals with (a) qualified products, (b) lists of such products established by each respective Department and by the Munitions Board Standards Agency, and (c) the purpose and use of such lists in connection with the procurement of supplies.

§ 401.501 Authority for qualified products. In those instances where it has been shown to be necessary in the light of existing performance requirements to obtain products of requisite quality, each Department may subject certain products and materials to qualification tests, and may approve them for use. The results of such testing and approval may be set forth in a Qualified Products List. Such lists, together with the Qualified Products Lists established by the Munitions Board Standards Agency, shall be used for the purpose and in the manner set forth in this subpart.

§ 401.502 Justification for inclusion of products on Qualified Products List. A product may be included in any Qualifiled Products List only when one of the following conditions exists:

(a) The time required for testing after award would unduly delay delivery of the supplies being purchased;

(b) The cost of repetitive testing would be excessive;

(c) The tests would require expensive or complicated testing apparatus not commonly available;

(d) The interest of the Government requires assurance, prior to award, that the product is satisfactory for its intended use;

(e) The determination of acceptability would require performance data to supplement technical requirements contained in the specifications.

§ 401.503 Qualification of products.

§ 401.503-1 Opportunity to qualify. Upon determination that a product is to be covered by a Qualified Products List, opportunity shall be given, and manufacturers urged, to submit for qualification tests any product of the general type desired. Publicity shall be given to the following:

(a) Intention to place a product on a Qualified Products List; and

(b) In making future awards, the fact that consideration may be given only to such products as have been accepted for inclusion in a Qualified Products List.

§ 401.503-2 Testing of product. The manner, extent, and cost of testing shall be in accordance with procedures prescribed by each respective Department. Each Department shall inform the other Departments of such tests, and upon request shall furnish reports thereon to the other Departments. As a result of such testing each Department shall decide whether or not the product should be placed on the Qualified Products List of that Department. Products tested and qualified by any Department may be included in the Qualified Products List of any other Department.

§ 401.503-3 Notification to manufacturer. Each Department shall notify the manufacturer submitting a product for test of the approval or rejection of the product. In the event that the product is approved for inclusion in a Qualified Products List, notification thereof shall be given to the manufacturer together with a statement to the effect that such listing does not (a) guarantee acceptance of the product in any future purchase, (b) constitute a waiver of the requirements of the schedule or the specifications as to acceptance, inspection, testing, or other provisions of any contract involving such product, or (c) permit any statement of approval to be reproduced, circulated, referred to or otherwise used for private commercial sales, promotional or advertising purposes, and that if so used such approval is subject to cancellation by the Department concerned. In the event that the product is not approved for inclusion in a Qualified Products List, notice thereof shall be given to the manufacturer, with a report covering the results obtained by the test. Whether a product is approved or rejected, it will be returned after test to the manufacturer "as is" (unless destroyed in testing).

§ 401.504 Qualified products lists. Products qualified by qualification tests, as described in § 401.503, shall be listed for reference by the Departments. The information contained in these lists may be made available to interested bidders

or contractors whenever specifications or solicitations of bids require qualified products.

§ 401.504-1 Joint Army-Navy-Air Force lists. Where qualification is in accordance with tests prescribed by joint Army-Navy-Air Force specifications, the compilation, preparation, maintenance, and administration of Qualified Products Lists shall be in accordance with the requirements of the Munitions Board Standards Agency.

§ 401.504-2 Department lists. Where qualification is in accordance with tests prescribed by a Department, Qualified Products Lists shall be compiled, prepared, maintained, and administered in accordance with procedures prescribed by each respective Department.

§ 401.504-3 Form and distribution of lists. Each Qualified Products List shall include substantially the following information: Government designation, manufacturer's designation, test or qualification reference, and manufacturer's name and address. Each Department shall furnish copies of its list (including changes thereto) to each of the other Departments.

purposes.

§ 401.504-4 Promotional No Department shall authorize the reproduction of lists or any reference to lists, in whole or in part, for advertising or promotional purposes except in connection with or for the purpose of furnishing supplies to a Department.

§ 401.504-5 Requirement that lists be kept open. The lists shall always be open for inclusion of products from additional manufacturers as their products are submitted for qualification and become qualified.

§ 401.504-6 Withdrawal of approval. The approval of a product may be withdrawn by the Department concerned if it is subsequently determined that the product does not meet requirements. In such event, the manufacturer shall be notified that his product is being considered for withdrawal from a Qualified Products List, and the reasons therefor shall be communicated to him. If, after a reasonable length of time, no satisfactory response has been received from such manufacturer in answer to such communication, and it is decided by the Department concerned that approval should be withdrawn, the manufacturer shall be notified of such withdrawal. A

product may be removed from a list at the request of a manufacturer.

§ 401.505 Procurement of qualified products.

§ 401.505-1 Contracts entered into by formal advertising. Whenever procurement of qualified products by a Department is made pursuant to formal advertising in accordance with the provisions of this part, only bids offering products which have been approved or qualified need be considered in making an award. Manufacturers having products not listed should be given consideration and an opportunity to qualify if qualification testing of the product may be accomplished in the time interval before final award must be made.

§ 401.505-2 Solicitation of bids. Each solicitation of bids involving qualified products shall be distributed to known sources of supplies in accordance with the requirements of Subparts A and B of this part, and shall contain a statement substantially as follows:

In the procurement of products requiring qualification the right is reserved to reject bids on products that have not been subjected to the required test and found satisfactory for inclusion in the Qualified Products List of [insert designation of particular list or lists]. The attention of suppliers is called to this requirement, and manufacturers are urged to communicate with the [insert name and address of sources of information] and arrange to have the products that they propose to offer tested for qualification.

§ 401.505-3 Contracts entered into by negotiation. Nothing in this subpart shall be construed to prohibit reference to Qualified Products Lists for prospective sources of supplies in connection with contracts entered into by negotiation pursuant to Part 402 of this subchapter.

Part 402-Procurement by
Negotiation

Sec. 402.000

402.100 402.101

402.102

402.103

402.104

Scope of part.

Subpart A-Use of Negotiation

Scope of subpart.

Negotiation as distinguished from formal advertising.

General requirements for negotiation.

Records and reports of negotiated contracts.

Aids to small business in negotiated procurement.