description with the phrase "or equal" is not intended as a device to grant an advantage to particular manufacturers by favoring one product over other products or to substantiate a determination that no other manufacturer's products are equal in quality and performance to the products specifically named. Rejection of a low bid offering products as equal to the product named in the purchase description will be based on a determination that the products are in fact not the equal of the named product and do not meet the actual needs of the Government. Where a proper determination has been made that only one supplier can furnish the required item or items, the procurement must be accomplished by negotiation in accordance with Part 1-3 of this title.

(c) In a competitive procurement, before a contracting officer uses a purchase description containing an "or equal" standard, he shall either include the brand names of all products known to be "equal" or include a statement in the contract file, prior to solicitation of offers, describing efforts made to ascertain such brands and explaining the failure to name more than a single brand name in the purchase description. The cognizant Head of the Procuring Activity is responsible for assuring that each competitive procurement incorporating a “brand name or equal" standard be reviewed prior to solicitation with particular emphasis upon the following items:

(1) Eliminating the use of the "or equal" standard when it is not necessary (e.g., when the invitation for bid calls for a service which the contractor must provide in part by use of an air conditioner capable of performing a certain function, requiring use of a brand name air conditioner or equal is improper. Instead, the function which the air conditioner must be capable of performing should be described; or when a specification is used together with a brand name reference, and the specification itself, without reference to the brand name, adequately describes the Government's needs, the brand name reference should be omitted as being a requirement which serves no material purpose);

(2) Naming several acceptable brand name products and insuring that each is reasonably comparable with the other from the standpoint of quality and suitability for the Government's needs;

(3) Utilizing proper clauses and procedures as provided in § 1-1.307-6 of this title;

(4) Amplifying the requirement for furnishing with the bid descriptive material needed (i) to determine the equality of an offered "or equal" product, and (ii) to determine exactly what the bidder proposes to furnish, to make abundantly clear the information which said material must disclose (taking into account that where a bidder has previously furnished an acceptable equal item and offers to do so again the circumstances may justify omission of detailed descriptive data (40 Comp. Gen. 435); and

(5) Insuring that the characteristics described in § 1-1.307-4(b) of this title are stated in unambiguous terms, that they are generally descriptive of factors the Government considers essential, and that they are not so restrictive as to amount to a requirement for a single brand name product.

(d) Queries and requests to the contracting officer for clarification of brand name or equal standards from prospective offerors shall be coordinated with the appropriate technical and requirements personnel before reply. If an ambiguity exists in the solicitation, an appropriate clarifying amendment will be issued.

(e) The contracting officer must consider for award those bids offering prodIucts which differ from the brand name products referenced in the "brand name or equal" purchase description where he determines that the offered products are equal in all material respects to the products referenced. Bids shall not be rejected because of minor differences in design, construction, or features which do not affect the suitability of the products for their intended use.

(f) The contracting officer shall submit the description of an offered product to technical personnel for advice as to equivalency. The written advice of such personnel shall be given promptly upon the request therefor.

§ 2-1.310-10 Performance records.

(a) Contractor performance evaluation. Upon completion or termination of each contract exceeding $10,000 in value, a Contractor Performance Evaluation Form, FAA Form 3458 will be completed. The primary objective for evaluating and recording a contractor's performance is to provide a basis for determining the responsibility of the contractor in the award of future contracts. The form

(b) Source of information. shall be prepared by the contract specialist with the most intimate knowledge of the contractor's performance and it shall be approved by the contracting officer. Information in the contract files, as well as personal knowledge of the contractor's performance by the contract specialist, project manager, inspector, or other cognizant personnel should provide the basis for ratings. To assure equitable treatment for all contractors the form must be prepared factually and impartially. It should be clearly ascertained that delay in delivery or performance is the contractor's fault before charging him with responsibility for such delay. It is essential that the contractor specialist avail himself of all pertinent information before determining the appropriate ratings.

(c) Rating instructions. It is important that the ratings of "outstanding," "satisfactory," "unsatisfactory," assigned to the contractor for the various items accurately portray the contractor's performance, as they will be considered in determining the contractor's responsibleness for future awards. When a "satisfactory" rating is assigned to an item, no additional information is required to support the rating. When either an “outstanding” or “unsatisfactory” rating is assigned to an item, the reasons for such a rating must be included in the space provided.

(1) Application of adjective ratings. A contractor shall be rated "satisfactory” on the various items unless his performance is clearly above or below contractual requirements or general business practices in which case the rating of “outstanding" or "unsatisfactory," respectively, would apply. Below are examples of instances where the various adjective ratings might be appropriate. These

examples are provided solely for the purpose of achieving a degree of uniformity as to the interpretation of the adjective ratings and they do not include all matters which should be considered in rating each factor.

(i) Quality of end products or services-(a) Outstanding. Contractor provides a product or services of a quality above the contractual requirements, or on his own initiative, recommends ways and means of improving specifications with the result that a better end item is produced.

(b) Unsatisfactory. Contractor is held in default for failure to furnish an acceptable product, or contractor had to repeatedly take corrective action to produce an acceptable product.

(ii) Timeliness of performance—(a) Outstanding. Contractor delivers or performs substantially before the contract due date either on his own initiative or by request of the contracting officer; or contractor accepts a tight delivery schedule and performs on time.

(b) Unsatisfactory. Contractor is substantially late due to his own deficiencies in performing his contract or fails to perform the contract and is held in default.

(iii) Compliance with clauses-(a) Outstanding. Contractor maintained an active and effective subcontracting program which provided maximum assistance to small business concerns and concerns located in labor surplus areas.

(b) Unsatisfactory. Contractor fails to comply with labor laws, nondiscrimination provisions, etc.; and it was necessary for the contracting officer to repeatedly instruct him to comply.

(iv) Cost contract management (applicable to cost-type contracts only). (a) Outstanding. Contractor has demonstrated ability to control costs for highly complex work under cost contracts, or contractor was extremely efficient in managing Government-furnished property and Government-owned facilities.

(b) Unsatisfactory. Contractor failed to properly manage contract resulting in substantial cost overruns, or he was careless in managing Government-owned property and facilities.

(v) General business conduct-(a) Outstanding. Contractor maintained an

effective line of communication with the contracting officer concerning progression of the contract, and anticipated delays; or demonstrated unusual perseverance and integrity in discharging his contractual responsibilities.

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(b) Unsatisfactory. Contractor nored instructions of the contracting officer to take corrective actions to comply with contract, failed to respond to communications, or in any way failed to demonstrate integrity in the conduct of his business dealings with the Government.

(d) Filing of completed form. The original shall be placed in the contract file.

(e) Interim notice. FAA Form 3458 is to be prepared upon the completion of termination of contracts exceeding $10,000. However, in the event a serious situation develops with a contractor before the form is due, the interim notice procedure set forth in this paragraph will be used. These serious situations would include such things as (1) anticipated bankruptcy, (2) labor statute violations so acute that a recommendation for debarment is contemplated, or (3) serious performance problems which indicate an inability or unwillingness to perform. When such situations develop, an interim notice in memo form shall be sent to the Washington Procurement Policy and Standards Division, IM-600, who in turn will alert all Agency procurement offices. If the contractor later cures his unsatisfactory performance or the condition which prompted the submission of the initial notice, the notice shall be supplemented stating what action was taken by the contractor to correct the deficiencies. The routing of any supplements shall be the same as the initial notice.

§ 2-1.315 Use of liquidated damages provisions in procurement contracts.

(1) Liquidated damages provisions will not be used routinely in Agency contracts, but they may be used when failure to meet the completion or delivery schedule in a proposed facility or equipment contract will seriously delay established commissioning dates. They may also be used in other situations when failure to perform will likely cause the Agency to suffer substantial damages, the amount of which is difficult or impossible to determine.

(2) Liquidated damages provisions generally should not be used: (i) In contracts for supplies or services that are for administrative purposes; (ii) in contracts for standard commercial or "shelf items"; (iii) in any contract where the needs of the Agency can be met by termination and reprocurement if the initial contractor defaults; (iv) in small purchases (under $2,500); and (v) in study, experimental, development or research contracts including equipment contracts requiring developmental work.

(3) In transactions involving an item where only a portion of the quantity ordered is for immediate programs, and liquidated damages provisions would be applicable in accordance with prescribed policies, care should be taken to have the liquidated damages provisions apply only to the urgent quantity.

(4) A fixed formula, based on percentage of value, shall not be used to establish the rate of damages. Consideration shall be given to the following factors in establishing the rate of damages: (i) The importance of the item in relation to the facility or project for which it is intended; (ii) the number of facilities or projects involved; (iii) the relative importance of the facility or project in the over-all program of the Agency; (iv) the tightness of the contract schedule and (v) any unusual damages that can be anticipated.

(5) Unless it is clear that partial delivery will proportionately reduce the extent of probable damages, rates shall not be applied to individual units of an item, but rather to quantities of an item, or to groups of items, which are required for delivery or completion at the same time. Rates should generally be expressed in terms of even dollars per day of delay with a minimum of $1.

Where rates are applied to quantities or groups, assessment of damages will not be prorated for delay of partial quantities.

(b) Positive followup on the contractor's performance and actions to eliminate delays in all contracts shall be maintained at all times. Serious consideration shall be given to termination of contracts which included liquidated damages provisions in any case where the accrued damages reach 15 percent of the contract value.

(c) Where liquidated damages provisions are used, they shall be strictly enforced. In making partial or progress payments, deductions for damages should be made on the basis of the actual number of days of delay multiplied by the rate. Exception may be made if the contractor has applied for an extension of time and provided sufficient information to permit a finding by the contracting officer, or if delays caused by the Government are clearly established. In such cases appropriate adjustments should be made and the contractor notified of the action taken. It is the contractor's responsibility to give notice of delays and to provide evidence to support any remission of damages or contract time extension.

(d) Submission to the Comptroller General with a recommendation for the remission of liquidated damages (41 U.S.C. 256A) shall be prepared for the signature of the Associate Administrator for Development and forwarded to IM600. All relevant facts and documents shall accompany the submission, e.g., (1) conditions which prompted the assessment of damages, (2) findings and decisions of the contracting officer, and (3) any decision of the Agency Contract Appeals Panel.

(e) If the contract is terminated, the contractor remains liable for liquidated damages that have accrued. Moreover, on a default termination of a fixed price supply contract, liquidated damages continue to accrue, even after default, until the FAA can reasonably obtain delivery of the supplies or performance of the services. This is in addition to any other FAA rights to damages under default provision for the excess costs of reproducing the supplies or services of the terminated contract.

§ 2-1.318 Contracting Officer's decision under a Disputes clause.

When a final decision of the contracting officer involves a dispute that is or may be subject to the Disputes clause, a paragraph substantially the same as that

set forth in § 1-1.318(a) of this title shall be included in the decision with the title "Administrator" inserted in the blank space in the paragraph. The decision shall also contain the following paragraph:

The FAA Contract Appeals Panel is the authorized representative of the Administrator in hearing, considering, and deciding such appeals. The rules of the FAA Contract Appeals Panel are set forth in the Code of Federal Regulations (41 CFR 2-60 et seq.). § 2-1.351

Agency policy on precontract and anticipatory costs.

Agency policy set forth in Agency Order 4450.2 requires that there be a contract in existence prior to permitting performance of work or services. No Agency employee may enter into informal, unauthorized arrangements with proposed contractors nor permit them to proceed with performance under "precontract cost," "anticipatory cost," or any other arrangements including "proceeding at the contractor's own risk." § 2-1.352 Sole source procurement.

It is basic Government policy that the selection of contractors shall be competitive among qualified persons and businesses. The requirement for competition exists whether the procurement is formally advertised or negotiated. The law requires that negotiated procurements must be, to the fullest practical extent, competitive. To insure that Agency procurement conforms fully with basic Government policy favoring competitive procurement, all proposed sole source procurements must be fully justified and approved in accordance with Agency Order 4400.8A, "Justification for Sole Source Procurement." As stated in Agency Order 4400.8A, "where follow-on contracts are anticipated, sufficient data should be obtained under early contracts to permit competition on later contracts."

Subpart 2-1.4-Procurement Responsibility and Authority

§ 2-1.400 Scope of subpart.

This subpart deals with procurement responsibility and authority of the head of a procuring activity, contracting officers and their representatives; and with delegations of contracting authority. This subpart also imposes limitations upon the authority to enter into contracts.

§ 2-1.401

Responsibility of the head of a procuring activity.

The head of a procuring activity (defined in § 2-1.206) is responsible for the procurement of supplies and services under or assigned to the procurement cognizance of his activity. This responsibility includes the authority to issue delegations of authority, to impose limitations upon the authority delegated, to require such approvals as he may prescribe, and maintain required surveillance over delegated procurement performance. Except as specifically limited or prohibited in the FPR, FAPR, Agency Orders, or by law, the authorities vested in the head of a procuring activity may be delegated with power of redelegation. § 2-1.402 General authority of contracting officers.

(a) Subject to any limitation in the orders or other instruments designating an individual as a contracting officer, a properly designated contracting officer is granted all authority conferred by law, FPR, FAPR, and procurement office instructions.

(b) A contracting officer may enter into, amend, modify, and take other action with respect to contracts, provided (1) prior approval of award has been obtained if approval is required, (2) the contract is in writing (on a standard or approved form if such form is prescribed), (3) the contract and modifications are authorized by law and comply with the provisions of FPR and FAPM with respect to the use of contract clauses and does not contain any clause or involve matters in conflict with the estabblished policy of higher authority, and (4) the contract complies with all other requirements of law, the FPR, FAPM, and applicable procurement office instructions.

(c) A contracting officer must assure himself that the contract is authorized by law and that funds are available.

(d) The acts of a contracting officer must be within the scope of the written orders designating him a contracting officer. Purchases, contractual commitments, and changes to contracts will be made only by duly designated contracting officers. Technical personnel and others whose duties require meetings and discussions with contractors, are without authority to direct changes in the

work which may change the contractual terms or result in claims against the Government.

§ 2-1.403

Requirements to be met before entering into contracts.

No contract shall be entered into unless all applicable requirements of law and of FPR and FAPM, and all other applicable procedures, including clearances and approvals, have been met. The contracting officer will coordinate, as appropriate, his procurement and contracting activities with:

(a) Appropriate legal counsel, as required by Order OA 2220.1,

(b) Agency contract auditors of the Office of Audit on the financial, accounting, and cost aspects of contractual actions, as required by Order 2930.1,

(c) Pricing and transportation specialists, where they have been assigned or are available to the procurement office, and

(d) Cognizant engineering and technical personnel where there are technical considerations involved in the procure