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Subpart 9-56.4 Policy Governing

Particular Types of Contracts $ 9–56.401 Replacement of contractors

operating AEC-owned plants or labo

ratories. (a) Where any of the following conditions exist, contractors operating AECowned plants or laboratories at AECowned locations are subject to replacement at the time their contracts are proposed for extension, and they will not be considered for selection to continue to operate such plants or laboratories, unless that action would be contrary to the Government's interest and if other qualified firms are available:

(1) Marginal performance;

(2) Conflict of interests between commercial and contract activities when found to outweigh the advantages of using contractors who are demonstrating a sufficient interest in the field of atomic energy to have maintained their own commercial program and thus are assisting in establishing a private, competitive nuclear industry; or

(3) Overconcentration of the firm's activities in the Atomic Energy Commission's program.

(b) Where any of the following conditions apply, the normal selection process (i.e., requesting proposals from industry and others) will be considered for the selection of contractors described in paragraph (a) of this section at the time such existing contracts are proposed for extension, if qualified firms are available:

(1) Where the existing operating contractor's performance is considered not better than average; or

(2) Where the circumstances underscore the high desirability of giving adequate opportunity to other organizations to compete for the business of supplying services to the AEC. § 9–56.402 Replacement of service-type

contractors performing services of a continuing nature for the AEC at

AEC-owned locations. The policy set forth in § 9-56.401 above is applicable to the replacement of onsite service-type contractors.

$ 9–56.403 Selection of new on-site serv.

ice contractors. Normally a firm will not be considered for selection for an on-site service contract where the work to be performed under the AEC contract, together with work being performed for other Government agencies and others, would place the firm in a predominant position in a field of industrial activity germane to the contract work, unless that action would be contrary to the Government's interest and if other qualified firms are available. 89-56.404 Selection of research and de

velopment contracts for work in com

mercial facilities. In selecting recipients of research and development work, it is basic AEC policy to assign the work where it can be done most effectively and efficiently. Where it is otherwise appropriate to assign the work to a commercial concern, it is also the policy of the AEC to make such wide distribution of contract awards as will encourage broad participation by qualified research and development contractors performing work in their own facilities in order to:

(a) Maintain a competitive industrial bases; and

(b) Prevent firms from attaining a predominant position in a major seg. ment of the atomic energy industry. & 9-56.405 Selection of contractors for

engineering and construction work. (a) It is the policy of the AEC to encourage broad participation by qualified architect-engineers and constructors in the atomic energy programs to the fullest extent practicable in order to:

(1) Avoid undue concentration of work with any firm or group of firms in a particular field of work (architectengineer or construction); and

(2) Develop and maintain a broad base of contractors with atomic energy experience and/or nuclear capability which may be used for AEC or commercial requirements (Note A).

(b) A firm currently under contract to AEC or to a cost-type AEC contractor

shall not be invited to submit a proposal for work in the same field if the proposed project would be performed concurrently with the existing contract and if the estimated cost of the new construction work involved is in excess of $10,000,000, or the estimated cost of the architectengineer services is in excess of $1,000,000 where a construction cost estimate cannot be determined. If, for cogent reasons, the designating official believes that such a firm should be invited, approval shall be obtained from the Division of Contracts in accordance with Subpart 9–56.3. This requirement shall not apply to:

(1) Firms currently engaged only on AEC fixed-price construction contracts awarded as a result of formal advertising or invited bids;

(2) Any firm currently engaged on AEC contracts in the same field, the total of which involves construction costs of less than $10,000,000; or

(3) Any architect-engineer firm after it has completed Title I work, exclusive of checking shop drawings, even though it still has Title III inspection services to perform.

NOTE A: Normally, only those firms which are compatible with the size and complexity of the job requirements should be invited; that is for a small relatively simple job, firms whose resources and qualifications are far in excess of the job requirements should not be solicited, and where size and simplicity of the job permit, Invitees should be limited to the geographic area of the job.


TION EQUIPMENT Sec. 9-58.000 Scope of part. 9-58.001 Applicability. 9-58.002 General policy. Subpart 9-58.1-Rental of Contractor-Owned

Equipment 9-58.101 Rental agreement. 9-58.102 Rental period. 9-58.103 Rental rates. 9–58.104 Application of rates. 9-58.105 Insurance. 9-58.106 Rental limitation. 9-58.107 Record of negotiation. 9-58.108 Responsibility for repair and re

placement. 9-58.109 Equipment condition and inspec


Subpart 9–58.2—Rental of Third Party-Owned

Equipment 9-58.201 Rental agreement. 9-58.202 Rental rates. 9–58.203 Insurance. 9-58.204 Option to purchase equipment.

AUTHORITY: The provisions in this part 9-58 issued under sec. 161, 68 Stat. 948; 42 U.S.C. 2201; sec. 205, 63 Stat. 390; 40 U.S.C. 486.

SOURCE: The provisions of this part 9–58 appear at 29 F.R. 3004, Mar. 5, 1964, unless otherwise noted.

8 9–58.002 General policy.

It is the policy of the AEC:

(a) To use presently owned AEC construction equipment to the fullest extent. Careful investigation shall be made of the equipment available not only at the Field Office concerned, but at other Field Offices to determine whether such equip. ment can be economically utilized on the job. The Office of the Controller, Headquarters, can assist in the investigation of excess equipment available in other offices.

(b) To rent construction equipment, where available, rather than purchase it, unless in the case of third party-owned equipment the Field Office determines that accrued rentals on a particular item of equipment will approximate the cost of ownership of it; except, however, individual items of construction equipment having an original cost of less than $1,000 ordinarily should be purchased and not rented. Where it is clearly to the advantage of the Government, items having a cost of less than $1,000 may be rented with the approval of the Manager of the Field Office. Whenever it is practical, cost and other factors considered, contractor-owned equipment shall be rented in preference to renting third party-owned equipment.

(c) To pay rental for construction equipment at rates not higher than those prevailing in the locality, except under unusual circumstances, and at as low & rate as is consistent with securing modern equipment in good operating condition. Costs of repair, job interruption due to poor equipment, transportation, and in-transit rental may well offset any apparent savings in rental rates. Rental paid shall be subject to any Government price ceiling regulations that may be in effect.

§ 9–58.000 Scope of part.

This part sets forth general policy and instructions relating to rental of construction equipment for use by AEC costtype contractors. 8 9–58.001 Applicability.

This part applies to the rental of equipment for use by AEC cost-type prime contractors and by their cost-type subcontractors, regardless of the contract tier.

Subpart 9-58.1-Rental of Contrac- ment Distributors' "Compilation of Avertor-Owned Equipment

aged Rental Rates for Construction

Equipment". However, Managers of $ 9–58.101 Rental agreement.

Field Offices may approve rates in ex

cess of 65 percent of the current A.E.D. The terms and conditions governing

schedule when local conditions require rental by the AEC of construction equip

higher rates. When it becomes necesment from a prime cost-type construction contractor are set forth in AECPR

sary as a general practice to exceed 65 8–16.5002–12, Outline of agreement for

percent of the current A.E.D. schedule,

the Manager of the Field Office shall adrental of contractor-owned construction

vise the Director, Division of Contracts, equipment. This form of agreement is. designed for use as an appendix to an

Headquarters, explaining the circum

stances. AEC cost-type construction contract. It may be modified for rental of equipment

(b) For items of equipment that are under other contractual arrangements,

not covered by the A.E.D. schedule, use such as an operating contractor renting

the latest edition of “Contractors' Equipfrom a cost-type construction subcon

ment Ownership Expense" document tractor, and it may be modified for use published by The Associated General as a separate contract or as an attach

Contractors of America, Inc., and informent to a subcontract. Some of the as

mation on prevailing local rates for depects of this agreement to which par

veloping rates that would be consistent ticular attention should be given are set

with the 35 percent reduction in the forth in $$ 9–58.102 and 9-58.109.

A.E.D. rates (i.e., taking into considera(29 F.R. 15646, Nov. 21, 1964)

tion the expenses paid by the Govern

ment under the rental agreement). 8 9–58.102 Rental period.

(29 F.R. 3004, Mar. 5, 1964, as amended at

29 F.R. 15646, Nov. 21, 1964) The base rental period shall extend from the time the equipment is accepted & 9-58.104 Application of rates. at the job site until the contractor is

The rental rates shall be applied in notified in writing by the AEC's repre

accordance rith the following rules: sentative that the equipment is no longer

(a) Basis of rates. The rates shall required. Subject to applicable limita

be based upon one shift of 8 hours per tions covered in the rental agreement

day, 40 hours per week, or 176 hours per form, the contractor shall be paid rental

month of a 30 consecutive-day period. during the in-transit time and during the time required for equipment repair

(b) Apportionment of rates. The

monthly rate and its pro rata shall apor replacement prior to return to the

ply to all rental periods of one month contractor.

or more. The weekly rate and its pro

rata shall apply to all rental periods of $9–58.103 Rental rates.

one week or more up to one month. (a) Rates for rental of contractor- The daily rate and its pro rata shall owned equipment shall be fair and apply to all rental periods up to one equitable. The rental rates.contemplate week. that the AEC will pay incoming and out- (c) Overtime. Inasmuch as there are going transportation costs and rental certain elements of cost to an equipment during in-transit time for both inbound owner which do not change even though and outbound transportation of equip- the equipment is used on more than one ment; however, terms more favorable to shift per day, it is believed equitable to the AEC may be negotiated where appro- pay a lower rental rate during a second priate. The rental rates to be paid for and third shift than would be paid the use of contractor-owned equipment during a single shift. Therefore, the under normal conditions should not ex- rental agreement form provides for payceed 65 percent of the rates quoted in the ment for overtime at a rate equal to latest edition of the Associated Equip- one-half the rate for the first shift.

& 9-58.105 Insurance.

sulting from normal wear and tear, pro(a) Generally, rental rates should in

vided they were necessary in order to clude the cost of insurance or self

continue the equipment in service. Howinsurance covering loss of or damage to

ever, when the equipment is no longer

required on the job, the extent of the the equipment during rental periods. The rental agreement for contractor

AEC's obligation is only to return the

equipment to the contractor in as good owned equipment is so worded. (b) However, if the Contracting Offi

operating condition as when received,

less normal wear and tear. cer determines that it is not practical to include the cost of such insurance in the § 9-58.109 Equipment condition and rental rates, paragraphs 3(d) and 7(a)

inspection. shall be amended as indicated in the ap

(a) Inspection. Construction equipplicable notes following these paragraphs

ment shall be given a rigid and detailed in AECPR 9-16.5002–12.

inspection by representatives of the & 9-58.106 Rental limitation.

AEC and, at the contractor's option, by

representatives of the contractor, before The rental agreement form provides

its shipment and acceptance or use on that when the total amount of rental

the job. Equipment shall be inspected paid to the contractor for any one unit

under actual workloads insofar as pracof equipment equals 75 percent of the

ticable. In cases where it is not practical mutually agreed value of that unit as set forth in the initial inspection report,

to inspect equipment prior to its ship

ment to the job site, the contractor the equipment is to remain available for

should be informed of the extent of inthe work under the construction con

spection and the expected condition of tract as long as it will be required with

his equipment. In the event the equipout any further rental payments to the

ment does not meet required standards, contractor. The rental ceiling of 75 per

the transportation, rental or any other cent of the agreed-upon value of the

expenses shall not be paid by the AEC equipment applies to all rental paid, in

unless at contractor's expense the equipcluding rental paid during in-transit

ment is repaired to acceptable standards time to and from the site of the work

in a reasonable length of time. A similar and down time for any operating repairs

inspection shall be made immediately or restoration of the equipment after it

prior to scheduled return shipment of an is no longer needed at the site. The

item of equipment. purpose of this provision is to prevent the Government from paying rental in

(b) Inspection report. The detailed

inspection report shall follow in general excess of the contractor's investment, and

AECPR 9–16.5002–14, Outline of inspecit is included in lieu of an “option to purchase clause.” Once a particular

tion report of equipment, and shall be

signed by each representative inspecting. piece of equipment has been released,

The initial inspection report shall be the contractor will not be required to re

used at the time of release as a basis for turn it to the job under the original

determining the repairs necessary to rental period.

place the equipment in as good operating § 9-58.107 Record of negotiation.

condition as when accepted, less normal The record of negotiation shall set

wear and tear. After necessary repairs forth the information used to determine

are completed, a final inspection report the reasonableness of the rental rates,

shall be completed by representatives of including a breakdown of the contrac

the AEC and, at his option, the contor's equipment ownership


expense similar to that itemized in The Asso

(c) Trial period and defects. If initial ciated General Contractors of America's

detailed inspection discloses that the document, "Contractors' Equipment

condition of the equipment is doubtful, Ownership Expense.”

arrangements should be made with the

contractor for a trial period of operation 8 9-58.108 Responsibility for repair

to prove the equipment, with provision and replacement.

that if equipment is found unacceptable The rental agreement describes the re- in the trial period, no rental, transportasponsibilities of the parties with respect tion, or other expenses will be due the to maintenance and repair necessary to contractor. Repairs to equipment which the operation of the rented equipment, fails in service due to defects not reasonor replacement of such equipment. The ably ascertainable on initial inspection AEC's responsibility includes repairs re- shall be at the contractor's expense.

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