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(m) GOVERNMENT CONTRACTORS. contract to determine whether a purWhen an agency provides by a contract for pose of any system of records on indi. the operation by or on behalf of the agency

viduals which may be involved is to acof a system of records to accomplish an

complish an agency function. For the agency function, the agency shall, consistent with its authority, cause the require

Act to be applicable, the contract need ments of this section (Section 3 of the Pri

not have as its sole purpose the design, vacy Act and the agency's implementing development, or operation of such a regulations) to be applied to such system. system of records, but the contract For purposes of subsection (i) of this section should specifically state whether it in(the criminal sanctions set forth in 5 U.S.C.

volves the design, development, or op552a(i)), any such contractor and any em

eration of a system of records. The Act ployee of such contractor, if such contract is

is not applicable to a system of records agreed to on or after the effective date of this section (September 27, 1975), shall be

used by a contractor as a result of his considered to be an employee of an agency.

management discretion. For example,

it is not applicable to systems of perHowever, the criminal penalties of the

sonnel records maintained by contracAct do not extend to contractors or

tors on their own behalf. their employees who design or develop

(2) Illustrations of systems of recsystems of records pursuant to a Gov ords to which the Act applies include ernment contract.

the following: (c) An agency which, within the (i) The determinations on benefits limits of its authority, fails to require are made by Federal agencies; that systems of records on individuals (ii) Records are maintained for adoperated on its behalf under contracts ministrative functions of a Federal be maintained in accordance with the agency, such as personnel and payroll; Act may be civilly liable to individuals

or injured as a consequence of any subse (iii) Health records are maintained quent failure to maintain records in by an outside contractor engaged to conformance with the Act. Any officer provide health services to agency peror employee of the agency may be cri. sonnel. minally liable for violations of the Act. (3) Illustrations of systems of rec

The reference in the Act to the con- ords to which the Act does not apply tractor and his employees as employ- include the following: ees of the agency is intended only for (i) Records are maintained by the the purposes of the criminal penalties contractor on individuals whom the of the Act and not to suggest that, by contractor employs in the process of virtue of this language, they are em providing goods and services to the ployees for any other purposes.

Federal Government; or

(ii) An agency contracts with a State [40 FR 44503, Sept. 26, 1975)

or private educational organization to § 1-1.327-4 Applicability.

provide training, and the records gen(a) Whenever a Federal agency con

erated on contract students pursuant

to their attendance (admission forms, tracts for the design, development, op

grade reports) are similar to those eration, or maintenance of a system of

maintained on other students and are records on individuals on behalf of the

commingled with their records on agency in order to accomplish an

other students. agency function, the agency must apply the requirements of the Act to (40 FR 44503, Sept. 26, 1975) the contractor and his employees working on that contract. Systems of

§ 1-1.327-5 Procedures. records on individuals operated under (a) All procurement requirements a contract which are designed to ac- shall be reviewed to determine whethcomplish an agency function are er the design, development, or oper

med to be maintained by the ation of a system of records on individagency and are subject to Section 3 of uals to accomplish an agency function the Act.

will be required, and the related con(b)(1) In order to establish the appli- tract shall identify specifically which cability of the clause in § 1-1.327-5, it of those functions is to be performed is necessary for the agency awarding a by the contractor. If the design, devel


opment, or operation of such a system

s required, related solicitations and contracts shall include the notification set forth in § 1-1.327-5(b) and the clause set forth in § 1-1.327-5(c). Pertinent implementing agency rules and regulations shall be made available in accordance with agency procedures. All contract work statements shall specifically identify (1) the system or systems of records and (2) the work to be performed by the contractor in terms of any one of the following: (i) Design, (ii) development, or (iii) operation.

(b) The following notification shall be included in every solicitation and resulting contract, and in every contract awarded without a solicitation, when the statement of work requires the design, development, or operation of a system of records on individuals for an agency function:

PRIVACY ACT NOTIFICATION This procurement action requires the contractor to do one or more of the following: design, develop, or operate a system of records on individuals to accomplish an agency function in accordance with the Privacy Act of 1974, Public Law 93-579, December 31, 1974 (5 U.S.C. 552a) and applicable agency regulations. Violation of the Act may involve the imposition of criminal penalties.

(c) The following clause shall be included in every solicitation and resulting contract, and in every contract awarded without a solicitation, when the statement of work requires the design, development, or operation of a system of records on individuals to accomplish an agency function.

PRIVACY ACT (a) The contractor agrees:

(1) To comply with the Privacy Act of 1974 and the rules and regulations issued pursuant to the Act in the design, development, or operation of any system of records on individuals in order to accomplish an agency function when the contract specifically identifies (i) the system or systems of records and (ii) the work to be performed by the contractor in terms of any one or combination of the following: (A) Design, (B) development, or (C) operation;

(2) to include the solicitation notification contained in this contract in every solicitation and resulting subcontract and in every subcontract awarded without a solicitation when the statement of work in the proposed subcontract requires the design, development, or operation of a system of records on

individuals to accomplish an agency function; and

(3) to include this clause, including this paragraph (3), in all subcontracts awarded pursuant to this contract which require the design, development, or operation of such a system of records.

(b) In the event of violations of the Act, a civil action may be brought against the agency involved where the violation concerns the design, development, or operation of a system of records on individuals to accomplish an agency function, and criminal penalties may be imposed upon the officers or employees of the agency where the violation concerns the operation of a system of records on individuals to accomplish an agency function. For purposes of the Act when the contract is for the operation of a system of records on individuals to accomplish an agency function, the contractor and any employee of the contractor is considered to be an employee of the agency.

(c) The terms used in this clause have the following meanings:

(1) "Operation of a system of records" means performance of any of the activities associated with maintaining the system of records including the collection, use, and dissemination of records.

(2) "Record" means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.

(3) "System of records" on individuals means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. [40 FR 44503, Sept. 26, 1975]

§ 1-1.328—1-1.338 (Reserved) § 1-1.339 Energy conservation. [43 FR 14315, Apr. 5, 1978]

§ 1-1.339-1 Authority.

(a) The Energy Policy and Conservation Act (42 U.S.C. 6361(a)(1)) provides as follows: "The President shall, to the extent of his authority under other law, establish or coordinate Federal agency actions to develop mandatory standards with respect to energy conservation and energy efficiency to govern the procurement policies ind

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decisions of the Federal Government the Motor Vehicle Information and and all Federal agencies, and shall Cost Savings Act) of a typetake such steps as are necessary to (1) Which in operation consumes, or cause such standards to be implement is designed to consume, energy; and

(2) Which, to any significant extent, (b) The authority of the President is distributed in commerce for personunder the act was delegated by the al use or consumption by individuals, President to the Administrator of the without regard to whether such article Office of Federal Procurement Policy of such type is in fact distributed in in Executive Order 11912. The Admin- commerce for personal use or conistrator issued Policy Letter No. 76-1, sumption by an individual. which requested agencies“**. to (b) The term "covered product" ensure that the principles of energy means a consumer product of one of conservation and efficiency are ap- the following types: plied in the procurement of property (1) Refrigerators and refrigeratorand service whenever the application freezers. of such principles would be meaning (2) Freezers. ful and practicable and consistent with (3) Dishwashers. agency program and operational (4) Clothes dryers. needs." It also provided for implemen

(5) Water heaters. tation of the policy in the Federal Pro

(6) Room air-conditioners. curement Regulations.

(7) Home heating equipment, not in(43 FR 14315, Apr. 5, 1978)

cluding furnaces.

(8) Television sets. § 1-1.339-2 Procedures.

(9) Kitchen ranges and ovens. (a) Energy conservation and energy

(10) Clothes washers. efficiency criteria shall be applied in

(11) Humidifiers and dehumidifiers. the determination of requirements (12) Central air-conditioners. and source selection decisions when (13) Furnaces. ever the application of such criteria (14) Any other type of product would be meaningful, practical, and which the Secretary of Energy classiconsistent with agency programs and fies as a covered product pursuant to operational needs. Under this policy, 42 U.S.C. 6292(b). energy conservation and efficiency cri. (c) The term “energy use and effiteria shall be considered for applica- ciency label" means a label required to tion along with price and other rele- be provided by manufacturer of a covvant factors in the preparation of so- ered product pursuant to 42 U.S.C. licitations, the evaluation of offers, 6296. and the selection of bids and proposals (d) The term “manufacturer” means for award.

any person who manufactures a con(b) When procuring consumer prod. sumer product. ucts, executive agencies shall take into (e) The term "energy efficiency consideration energy use and efficien- standard" means a performance standcy labels and prescribed energy effi- ardciency standards as they become avail (1) Which prescribes a minimum able.

level of energy efficiency for a covered

product, determined in accordance (43 FR 14315, Apr. 5, 1978)

with test procedures prescribed under 81-1.339-3 Definitions.'

42 U.S.C. 6293; and

(2) Which includes any other re(a) The term "consumer product"

quirements which the Secretary of means any article (other than an auto

Energy may prescribe under 42 U.S.C. mobile, as defined in section 501(1) of 6295().

(f) The term "manufacture” means 'For temporary regulations affecting $$ 1 to manufacture, produce, assemble, or 1.340 and 1-1.341, see Appendix-Temporary import. Regulations, appearing at the end of Chapter 1.

[43 FR 14315, Apr. 5, 1978)

Subpart 1-1.4-Procurement

dures shall conform to the provisions

of this § 1-1.404. Responsibility and Authority

§ 1-1.404-1 Selection. SOURCE: Subpart 1-1.4 appears at 32 FR 16492, Dec. 1, 1967, unless otherwise noted.

In selecting individuals to serve as

contracting officers or in positions § 1-1.400 Scope of subpart.

which include authority to act as con

tracting officers, consideration shall This subpart deals with the procure

be given to experience, training, edument responsibility and authority of

cation, business acumen, judgment, the head of the procuring activity and

character, reputation, and ethics. In contracting officer as defined in 8$ 1

considering experience, training, and 1.206 and 1-1.207, and with the selec

education, the following shall be evaltion and designation of contracting of

uated: ficers.

(a) Experience in the field of pro§ 1-1.401 Responsibility of the head of the

curement involved (e.g., supply, con

struction, etc.) gained in a Governprocuring activity.

ment or non-Government procureThe head of the procuring activity is

ment office, or otherwise; responsible for the procurement of (b) Formal education or special personal property and nonpersonal training, including Government conservices (including construction) to

ducted or sponsored courses, in pertithe full extent that responsibility has

nent fields, such as business adminisbeen assigned to his activity.

tration, law, accounting, engineering,

architecture, or related fields; and § 1-1.402 Authority of contracting offi

(c) Knowledge of applicable laws, cers.

Executive orders, and regulations. Contracting officers are authorized to enter into and administer contracts § 1-1.404-2 Designation. for personal property and nonpersonal Designation of individuals to act as services (including construction) on contracting officers may be accombehalf of the Government and make plished by delegation of authority to related findings and determinations individuals or to positions. In the within the limitations of the authority latter case, unless otherwise provided delegated to them. In the exercise of by the agency, any individual authorsuch authority, they are subject to the ized to serve in such a position is a requirements in § 1-1.403 and any fur contracting officer. In either case, ther requirements, consistent with the however, the instrument of designaFederal Procurement Regulations, im tion shall include, or make specific refposed by the contracting agency.

erence to, any limitations on the scope

of authority to be exercised, other $ 1-1.403 Requirements to be met before

than those contained in applicable entering into contracts.

laws, regulations, or directives. ApproNo contract shall be entered into priate records shall be maintained, unless all applicable requirements of whether designation be made by name law, Executive orders and regulations or by reference to organizational title have been met. The term "regula- or position designation. tions" includes those issued by any regulatory agency whether or not in- § 1-1.404-3 Termination of designation. corporated or referenced in the Feder. Unless otherwise provided in the in al Procurement Regulations.

strument designating an individual as

a contracting officer (e.g. stipulation § 1-1.404 Selection, designation, and ter

of a specified term or a specific purmination of designation of contracting

pose), the designation shall remain efofficers.

fective until the contracting officer is Contracting officers shall be select- reassigned, his employment is termied, designated as such, and their desig nated, or his designation is revoked. nations terminated as provided in No revocation shall operate retroacagency procedures. Such agency proce- tively.

Subpart 1-1.5—Contingent Fees

§ 1-1.404-4 Assignment of duties to con

tracting officers. In the assignment of duties, including execution and administration of contracts, consideration shall be given to the ability, training, and experience of the contracting officer. Duties in volving contracts of large dollar value and complexity shall be given only to personnel with commensurate experience, training, and ability.

8 1-1.405 Ratification of unauthorized

contract awards. 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. To be effective, such 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 a person authorized to ratify such acts. Generally such ratification may be made only by an official on whose behalf the contract was made and then only (a) if he could have given authority to enter into the contract before it was awarded and (b) if he still has power to do so at the time of ratification.

§ 1-1.500 Scope of subpart.

This subpart prescribes the use by executive agencies of the “covenant against contingent fees" and sets forth the policies, forms, methods, proce. dure, principles, and standards related thereto. The requirements of this subpart have as their objective the prevention of improper influence in connection with the obtaining of Government contracts, the elimination of arrangements which encourage the payment of inequitable and exorbitant fees bearing no reasonable relationship to the services actually performed, and the prevention of unwarranted expenditure of public funds which inevitably results therefrom. The methods used to achieve these objectives are the requirement for disclosure of the details of arrangements under which agents represent concerns in obtaining Government contracts, and the prohibiting, by use of the covenant against contingent fees, of certain types of contractor-agent arrangements.

§ 1-1.501 Applicability.

The provisions of this subpart apply to all contracts for the procurement of personal property and nonpersonal services, including the procurement of construction. The Criminal Code will apply in any case involving actual criminal conduct.

§ 1-1.406 Cost Accounting Standards.

The contracting officer or his authorized representative shall:

(a) Determine the adequacy of prime Contractor's Disclosure Statement(s)Cost Accounting Practices and Certification (see § 1-3.1203(a));

(b) Determine whether prime contractor's Disclosure Statements are in compliance with Part 1-15 and Cost Accounting Standards promulgated by the Cost Accounting Standards Board (see § 1-3.1220);

(c) Determine contractor compliance with Cost Accounting Standards and Disclosure Statements, if applicable;

§ 1-1.502 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. 81-1.503 Covenant.

Executive agencies shall include in every negotiated or advertised contract a "Covenant against contingent fees” substantially as follows (set forth as clause 11 of Standard Form 19, Invitation, Bid, and Award (Construction, Alteration or Repair); as clause 17 of Standard Form 23-A, Gen


(d) Negotiate price adjustments and execute supplemental agreements pursuant to the Cost Accounting Standards clause set forth in § 1-3.1204. (39 FR 43058, Dec. 10, 1974)

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