from proposals that are not specifically solicited by the Government. Accordingly, contracts which result from unsolicited proposals shall provide for the contractor to bear a portion of the cost of performance as determined in accordance with § 15-3.405-3-52. However, where there is no measurable gain to the performing organization, there is no mutuality of interest, and, therefore, no means by which the extent of cost sharing may reflect a mutuality of interest.

(Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c)) [43 FR 1797, Jan. 12, 1978]

§ 15-3.405-3-52 Determination of amount of cost sharing.

the

When cost sharing is determined to be appropriate in accordance with § 15-3.405-3-50 or required by statute pursuant to § 15-3.405-3-51, amount of cost participation by the performing organization may vary in accordance with a number of factors relating to the performing organization and the character of the research effort. The amount of cost participation shall reflect the mutual agreement of the contracting officer and the contractor. Factors which contracting officers may consider in any negotiations with prospective contractors regarding the amount of cost participation include the following:

(a) Cost participation by educational institutions and other not-for-profit or nonprofit organizations should normally be at least 1 percent of total project cost. In many cases cost sharing of less than 5 percent of total project cost would be appropriate in view of the organization's nonprofit status and their normally limited ability to recover the cost of such participation from non-Federal sources. However, in some cases it may be appropriate for educational institutions to provide a higher degree of cost sharing, such as when the cost of the research consists primarily of the academic year salary of faculty members, or when the equipment acquired by the institution for the project will be of significant value to the institution in its educational activities.

(b) The amount of cost participation by commercial or industrial organizations should depend to a large extent

on whether the research effort or results are likely to enhance the performing organization's capability, expertise, or competitive position and the value of such enhancement to the performing organization. It should be recognized that those organizations which are predominantly engaged in research and development and have little or no production or other service activities may not be in a favorable position to derive a monetary benefit from their research under Federal agreements. Therefore, cost participation by commercial or industrial organizations could reasonably range from as little as 1 percent or less of the total project cost to more than 50 percent of total project cost.

(c) If the performing organization will not acquire title to, or the right to use, inventions, patents, or technical information resulting from the research project, it would generally be appropriate to obtain less cost sharing than in cases in which the performer acquires such rights.

(d) Where cost sharing is required by statute, cost participation of less than 1 percent may be appropriate if consistent with the provisions of the statute and the circumstances set forth in § 15-3.405-3-50(b) are present.

(e) A relatively low degree of cost sharing may be appropriate if, in the view of the Federal agency, an area of research requires special stimulus in the national interest.

(f) A fee or profit will usually not be paid to the performing organization if the organization is to contribute to the cost of the research effort, but the amount of cost sharing may be reduced to reflect the fact that the organization is foregoing its normal fee or profit on the research. However, if the research is expected to be of only minor value to the performing organization and if cost sharing is not required by statute, it may be appropriate for the performer to make a contribution in the form of a reduced fee or profit rather than sharing the costs of the project.

(Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c)) [43 FR 1797, Jan. 12, 1978]

§ 15-3.408 Letter contract.

(a) Limitations. (1) A letter contract may be entered into in accordance with § 1-3.408 only after approval by the:

(i) Director, Contracts Management Division, PM-214, in accordance with § 15-1.5403-2(b), when the face value of the complete contract and any individual modification thereto is expected to exceed $250,000.00, and

(ii) Chief officer responsible for procurement at the contracting activity when the face value of the complete contract and any individual modification thereto is not expected to exceed $250,000.00.

(2) A letter contract negotiated on a noncompetitive basis shall be justified as prescribed in EPA Order 1900.

(3) A letter contract shall be superseded by a definitive contract within ninety (90) days from the date the letter contract is accepted, unless a period of performance in excess of ninety (90) days is authorized by the chief officer responsible for procurement at the contracting activity. The letter contract shall specify the date by which the definitive contract is to be negotiated. In the event the letter contract is not negotiated and executed within ninety (90) days from date of acceptance, it shall be terminated unless the ninety (90) days period is extended by the chief officer responsible for procurement at the contracting activity.

(4) Ordinarily, letter contracts should not authorize payment to the contractor in excess of 50 percent of the estimated total of the anticipated definitive contract. The maximum monetary liability of the Government under the letter contract shall be stated in the contract schedule and shall not exceed 50 percent of the estimated total price or cost and fee of the definitive contract, unless a larger amount is authorized by the chief officer responsible for procurement at the contracting activity.

(5) A letter contract shall not describe, refer to, or otherwise commit the Government to a definitive contract in excess of funds available for obligation or commitment at the time the letter contract is executed. Also, the letter contract shall state, in ap

propriate situations (e.g., where award is based on price competition), the maximum price or cost and fee which may be negotiated for the definitive contract.

(6) A letter contract shall not be modified to:

(i) Extend the period of performance or to increase the dollar amount without the prior approval of the officials designated in § 15-3.408(c)(1), or

(ii) Accomplish new procurement, unless the new procurement is inseparable from the procurement covered by the existing letter contract. Such modifications are subject to the same limitations as new letter contracts.

(b) Contents. A letter contract and the resulting definitive contract shall contain all applicable provisions required by law and regulation. The letter contract will be composed of a transmittal letter and signature page, administrative recitals, appropriate EPA General Provisions, special schedule articles, and other schedule articles peculiar to the procurement. A format for a letter contract is illustrated in § 15-16.553.

(c) Definitive contract. (1) The definitive contract resulting from a letter contract shall constitute the entire agreement between the parties and shall include in the contract Schedule any letter contract clauses, articles, terms or conditions which are to continue in effect. Also, the definitive contract shall contain a contract Schedule Article similar to the following:

(a) All purchases covered by the subpart shall be accomplished by negotiation and shall cite 41 U.S.C. 252(c)(3), in accordance with § 1-3.203 of this title.

(b) Small purchases and small business set-asides over $2,500 must be screened. If there is a set-aside for small business, the Notices prescribed in §§ 1-1.706-5 and 1-1.706-6 of this title must be included in any written Request for Quotation (RFQ). Also, notice of set-aside for small business must be included in any required synopsis.

§ 15-3.603 Competition.

more efficient, as might be the case, for example, where detailed specifications are to be used, or where the procurement of a large number of different items is involved. Oral solicitations may be used whenever written solicitations are not required. (Use of standing price quotations is considered equivalent to the use of written solicitations of quotations.)

(b)

When competitive quotations must be obtained. Competitive quotations shall be obtained in all small purchase actions, except

(1) When the purchase is estimated not to exceed $250 and the price is reasonable; or

(2) When a justification for noncompetitive procurement has been approved by the contracting officer and any required approvals have been obtained.

(c) Limited number of quotations in under-$5,000 purchases. When a purchase being handled competitively is estimated not to exceed $5,000, only three competitive quotations need be obtained.

(d) Purchases under $250. Although purchases estimated not to exceed $250 need not be conducted competitively (if the price is reasonable), such purchases shall be distributed equitably among qualified suppliers. Such purchases need not be supported by a justification for noncompetitive procurement nor by a determination of price reasonableness.

(e) Synopsis of proposed procurement. See § 1-1.1003-2 of this title.

§ 15-3.603-2 Data to support small purchases.

(a) EPA Form 1900-13, Worksheet for Small Purchases, shall be used to record oral quotations, to tabulate written quotations, and to document the purchase order file.

(b) When a purchase is not based on the lowest quotation obtained, the reasons for rejecting each lower quotation shall be included in the purchase order file by notation on the worksheet or by separate memorandum. Equal low quotations shall be treated in accordance with § 1-2.407-6 of this title.

(c) Notification to unsuccessful offerors shall be given only if requested.

60-123 0-80--29

(d) The Certification of Independent Price Determination which is required by § 1-1.317 of this title is preprinted on page 2 of Standard Form 18. It is not applicable to small purchases up to $10,000.

(e) Buy American Certificate which is required by § 1-6.104-3 of this title shall be obtained to comply with clause 5, Foreign Supplies, on page 2 of Standard Form 147.

(f) Labor surplus area. The notice provided in § 1-1.804-2 of this title, shall be placed in all Invitations for Bids or requests for proposals when labor surplus area set-asides have been made and for consideration of labor surplus areas as a factor in deciding between equal quotations.

(g) The requirement in § 1-12.905-3 of this title to forward Standard Form 98, Notice of Intention to Make a Service Contract, to the Department of Labor applies to any contract subject to the Service Contract Act (including small purchases) exceeding $2,500. The requirement of § 1-12.905-6 of this title to forward SF 99, Notice of Award of Contract, to the Department of Labor applies to any contract over $2,500 subject to the Act. When the purchase is for services subject to the Service Contract and the order is $2,500 or less, add the clause in § 112.904-2 of this title.

(h) The clause contained in § 16.804-4 of this title, U.S. Products and Services (Balance of Payments Program) shall be placed in all contracts resulting from the Balance of Payments Program.

§ 15-3.604 Imprest funds (petty cash) method.

(a) Imprest funds shall be utilized to the fullest extent for all authorized small purchases when this method results in savings.

(b) Imprest funds shall be established and operated in accordance with procedures issued by the Financial Management Division.

(c) Small purchases from imprest funds shall be in accordance with EPA Order 2545.1A.

(d) Small purchases from imprest funds shall be based upon an authorized Procurement Request/Requisi

tion, EPA Form 1900-8, or other suitable document.

§ 15-3.605 Purchase order forms.

§ 15-3.605-1 Standard Form 44 Purchase Order-Invoice-Voucher.

(a) Standard Form 44, Purchase Order-Invoice-Voucher may be authorized for use when all the following conditions are satisfied:

(1) The transaction is not in excess of $250 except on a case-by-case basis when the Regional Administrator, or the head of the activity delegated authority to use Standard Form 44, approves a higher dollar level. In no event shall such dollar level exceed $2,500.

(2) Supplies or services are immediately available.

(3) One delivery and one payment will be made. Standard Form 44 shall not be used when the use of imprest funds or blanket purchase arrangements are feasible. Standard Form 44 shall not be used to procure nonexpendable property unless the Property officer authorizes its use.

(b) Since Standard Form 44 is an accountable form, a record shall be maintained of serial numbers of forms, to whom issued and dates issued. Standard Form 44's shall be kept under adequate lock and key to prevent unauthorized use. A reservation of funds must be established prior to use of Standard Form 44's.

§ 15-3.605-2 Standard Forms 147 and 148, order for supplies or services.

(a) Standard Forms 147 and 148 shall be used for small purchases not in excess of $10,000, delivery orders against Government prime contracts, blanket purchase arrangements, and modifications to these documents.

(b) Additional terms and conditions may be added to the Standard Form 147 provided they are not in conflict with those printed on the form. The following clauses and procedures shall be used as applicable:

(1) For bulk quantity items, and those subject to shrinkage, evaporation, miscount, weight, or footage variance, the allowable variation in quantity (normally not over 10 percent)

shall be specified in the order by use of the following clause:

VARIATION CLAUSE

Variation in the quantity delivered will be accepted in any amount within +

percent of the quantity for each item. When the quantity received is within the range of the variation clause such item shall be considered complete, and if additional shipments are made to apply against such item, the Government reserves the right to return such shipment to the Contractor, transportation charges collect.

(2) When Government property is exchanged, the written administrative determination required by § 10146.202(b)(4) of this title shall be included in the file. The purchase order shall specify the acquisition price of the new item less the trade-in price, and shall include the following statement:

"The being acquired under this order is/are bona fide replacement(s) and similar to the being offered

for credit. The application of exchange allowance is in accordance with the Exchange/Sale Provision of the Federal Property and Administrative Services Act of 1949, as amended."

(3) When Government property is returned to a contractor for repair, the purchase order shall include a statement that the Contractor assumes the responsibility for loss of or damage to equipment, except for normal wear and tear.

(4) F.O.B. destination prices shall be obtained whenever possible. If vendors will not quote F.O.B. destination, the delivery terms and procedures prescribed in Subpart 115-19.3 shall be applied.

(5) The order shall specify that the vendor's invoice shall be forwarded directly to the appropriate Accounting Operations Office for payment. Receiving reports shall be processed in accordance with § 115-27.5009 of this title. The Accounting Operations Office shall be furnished the receiving report as expeditiously as possible to facilitate payment of invoices.

(c) Following are guidelines for completion of Standard Form 147:

(1) Issuing office. Enter name and address of the purchasing activity.

(2) Date of Order. Enter date of order. The date of verbal award shall

be entered if order is being issued on a confirming basis.

(3) Contract Number. Enter the number of the GSA or other prime contract when issuing a delivery order. If more than one contract number is applicable, or if the contract is not applicable to all items, insert "see Schedule" and list the information in the schedule.

(4) Order No. Enter the order number in accordance with instructions issued for each fiscal year.

(5) Accounting and Appropriation Data. Enter the appropriate accounting codes (appropriation, account number, commitment transaction number and object class) in accordance with instructions issued by the Financial Management Division.

(6) Requisitioning Office. Enter appropriate identification.

(7) Requisition No./purchase authority. Enter the Procurement Request Requisition Number.

(8) Contractor. Enter the full business name and address of the Contractor. If the order is placed through a dealer and the invoice will be submitted by a manufacturer, enter the name of the manufacturer, and insert "care of (c/o)" before the dealer's name and address.

(9) Ship to. Enter the name and complete address of the receiving activity. Indicate the method of shipment after "Via" if order is F.O.B. Origin.

(10) Type of order. Indicate by checking the appropriate box whether order is a purchase or delivery order. If a purchase order, identify the quotation; e.g., written quotation number and date, or telephone quotation with name of quoter and date.

(11) F.O.B. point. Enter delivery terms in accordance with Subpart 119.3 of this title.

(12) Government B/L No. Enter the GBL number if the contractor is being furnished a GBL with the order.

(13) Delivery to F.O.B. point on or before. If a single date of delivery is applicable to the entire order, it shall be entered in this block. Multiple delivery dates shall be listed in the schedule and this block annotated (see Schedule).

(14) Discount terms. Enter the discount for prompt payment in terms of