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ment and Third Party Contract Subpart 12-1.3-General Policies Review, Washington, D.C.

§ 12-1.302-3 Contracts between the Gov. § 12–1.250 Administration.

ernment and Government employees or "Administration" means the Federal business concerns substantially owned Aviation Administration, the Federal or controlled by Government employ. Highway Administration, the Federal ees. Railroad Administration, the Urban Unless a higher authority is speciMass Transportation Administration, fied within an Administration, heads the Coast Guard, the St. Lawrence of procuring activities are authorized Seaway Development Corporation, to except individual contracts from and the National Highway Traffic the policy against awarding contracts Safety Administration. The term “Ad- to Government employees or business ministration" also includes the Trans concerns substantially owned or conportation Systems Center, and the trolled by Government employees. Office of Administrative Operations of Each such exception shall be evithe Office of the Secretary. The term

denced by a written determination “Administration” as used, for example,

signed by the head of the procuring in the phrase "in accordance with Ad

activity, setting forth the facts in suf

ficient detail to demonstrate that the ministration procedures" would in

exception is being granted for the clude the foregoing organizations,

most compelling reasons, and attachunless the paragraph states otherwise.

ing any supporting documentation. A $ 12–1.251 Procurement office.

copy of each such determination, with

attachments, shall be forwarded to the “Procurement office" means an Director of Installations and Logistics, office with a designated contracting

OST. officer with authority to enter into contracts over $10,000 in value.

$ 12-1.305-3 Deviations from Federal

specifications. & 12–1.252 Change order.

(a) Each Administration shall desig"Change order" means a unilateral nate an official to carry out the rewritten order signed by the contract- sponsibilities set forth in FPR 1-1.305– ing officer, and issued to a contractor 3. One copy of each such designation pursuant to the Changes clause of the shall be forwarded to the Director of contract.

Installations and Logistics, OST.

(b) Whenever a notification or rec8 12–1.253 Supplemental agreement. ommendation for a change in a Feder"Supplemental agreement” means

al Specification is submitted to the

General Services Administration, as any contract modification or contract

provided in FPR 1-1.305-3(b)(5), an inamendment which is accomplished by mutual action of the parties.

formation copy shall be forwarded to

the Director of Installations and Lo§ 12–1.254 Shall.

gistics, OST. Similarly, the Director of

Installations and Logistics shall be ad"Shallis imperative.

vised any time the General Services

Administration disapproves a devi8 12–1.255 May.

ation from a Federal Specification. Mayis permissive. However, the words "no person may ***" mean

8 12-1.305-50 Index to Federal and Dethat no person is required, authorized,

partment of Defense Specifications and or permitted to do the act proscribed.

Standards. The "Index of Federal Specifications and Standards” and the “Department of Defense Index of Specifications and Standards" are issued annually with periodic supplements. These indexes contain general information pertain

ing to their use and the availability of other Government specifications.

§ 12-1.306-1 Mandatory use and applica

tion of Federal Standards. Whenever a request for an exception to the use of a Federal Standard is submitted to the General Services Administration, an information copy of the submission and GSA's response shall be forwarded to the Director of Installations and Logistics, OST.

8 12-1.307-5 Limitations on use of "brand

name or equal” purchase description. Purchase descriptions containing the phrase “or equal” shall not be used 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. Where a proper determination has been made that only one supplier can furnish the required item or items, the procurement will be accomplished by negotiation in accordance with FPR Part 1-3.

actions and other data. Adherence to this policy will require the assembly of either the original or a copy of all documents pertaining to the procurement in a file consisting of one or more folders. It will also require documentation for the record of all understandings, oral agreements, and any other facts or information pertinent to the transaction. It is left to the discretion of the procurement official to determine the manner in which unwritten matters are documented. However, it would be expected, for example, that those of a complex nature would be carefully documented by typewritten "memorandum for the record”, while routine data might be recorded by a handwritten notation in the file. Photographs should be employed wherever they will serve to effectively document pertinent contract matters.

(b) Complete documentation will permit ready reconstruction of all stages of the transaction in order to:

(1) Support actions taken by various personnel in the procurement cycle.

(2) Provide information for internal management review and for reviews by the General Accounting Office.

(3) Supply data for use in preparing replies to legitimate inquiries.

(4) Furnish essential facts in the event of litigation

(c) Small purchase records shall be maintained in accordance with FPR Subpart 1-3.6 and DOTPR Subpart 12-3.6.

8 12-1.315 Use of liquidated damages pro

visions in procurement contracts.

§ 12-1.311 Priorities, allocations and allot

ments. The programs of the Coast Guard and certain programs of the Federal Aviation Administration are defenserelated programs to which the prior ities and allocations regulations apply. Rateable contracts and purchase orders shall contain the clause set forth in DOTPR 12-7.150-3 and the appropriate DO or DX rating (and the appropriate allotment number if the order calls for authorized controlled materials) in accordance with the provisions of DMS (Defense Materials System) Regulation 1 and BDSA Reg. ulation 2. These regulations are available from the Business and Defense Services Administration of the Department of Commerce. 8 12-1.313 Records of contract actions.

(a) In compliance with the requirements of FPR 1-1.313, each procure ment office shall maintain for each procurement exceeding $10,000 a con. tract file containing a comprehensive record of all pre-award and post-award

8 12-1.315-2 Policy.

(a) Criteria for use. (1) In proposed contracts involving an item where only a portion of the quantity ordered is for immediate programs, and liquidated damages provisions are considered to be necessary, care shall be taken to have the liquidated damages provisions apply only to the urgent quantity.

(2) The use of liquidated damages provisions should never be construed as relieving procurement officials of the obligation of establishing realistic delivery or performance schedules. Realistic delivery or performance sched

ules should be a prerequisite to the (c) Enforcement. Where liquidated use of liquidated damages.

damages provisions are used, they (3) Liquidated damages provisions shall be strictly enforced. In making generally should not be used:

partial or progress payments, deduc(i) In contracts for supplies or sery tions for damages should be made on ices required for routine administra the basis of the actual number of days tive purposes.

of delay multiplied by the rate. (ii) In contracts for standard com

(d) Termination. If the contract is mercial or "shelf items”.

terminated, the contractor remains (iii) In any contract where time

liable for liquidated damages that would permit the needs of the Depart

have accrued. Moreover, on a default ment to be met by termination and re

termination, liquidated damages conprocurement if the initial contractor

tinue to accrue even after default, defaults.

until the Department can reasonably (iv) In small purchases.

obtain delivery of the supplies or per(v) In study, experimental, develop

formance of the service. This is in adment, or research contracts, including equipment contracts requiring devel.

dition to any other rights of the Govopmental work.

ernment to damages under default (b) Rate of assessment. (1) Contract

provisions for the excess costs of reing officers must assure that the rate

procuring the supplies or services of of liquidated damages stipulated for a

the terminated contract. given contract is a reasonable forecast

(e) Remission. An information copy of the Government's anticipated dam

of each submission to the Comptroller ages. A fixed formula, based on per- General of a recommendation for the centage of value, shall not be used to remission of liquidated damages shall establish the rate of damages. The be forwarded to the Director of Instalminimum amount of liquidated dam lations and Logistics, OST. ages should be based on the estimated cost of inspection and superintendence

§ 12-1.318 Disputes clause. for each day of delay in completion. In When a dispute cannot be settled by addition, the following factors are ex

agreement and a decision under the amples of matters to be considered in Disputes clause is necessary, the conestablishing the rate of damages:

tracting officer shall review the availa(i) The importance of the item in re

ble facts pertinent to the dispute lation to the facility or project for

before making his final decision. which it is intended.

When there is any doubt as to wheth(ii) The relative importance of the

er the issue in dispute is subject to the item to the facility or project in the

disputes procedure, a decision will be overall program of the Department. (iii) Any rental of facilities necessi

made pursuant to the Disputes clause.

The disputes procedure shall not be tated by the delay in a construction

invoked in cases when a dispute is completion date. (iv) Cost of additional maintenance

clearly not subject to the procedure. required on structures being replaced

The contracting officer shall obtain,

from assigned legal and other advisors, by contract items. (v) Any unusual damages that can be

such advice and assistance as is reanticipated.

quired to render a decision. However, (2) Unless it is clear that partial de

the decision must be that of the conlivery will proportionately reduce the

tracting officer. extent of probable damages, rates shall not be specified to be applicable

8 12-1.318-50 Contracting officer's deci. to individual units of an item, but

sion under the Disputes clause. rather to quantities of an item or to When a final decision of the congroups of items which are required for tracting officer concerns a dispute delivery or completion at the same that is or may be subject to the Distime. Rates should generally be ex- putes clause, the following paragraph pressed in terms of even dollars per shall be added to the paragraph conday of delay.

tained in FPR 1-1.318-1:

The Department of Transportation Con- (b) In cases where the question of tract Appeals Board is the authorized repre

entitlement only has been decided by sentative of the Secretary in hearing, con

the Board and the matter of amount sidering, and deciding such appeals. The

has been remanded to the parties for rules of the Department of Transportation Contract Appeals Board are set forth in the

negotiation, if agreement is not Code of Federal Regulations (41 CFR Part reached the appellant will be afforded 12-60 et seq.).

a prompt decision and an opportunity

to appeal on the matter of amount. $ 12–1.318-51 Agreement after appeal is filed.

8 12-1.320 Subcontractor gifts and kickAfter an appeal has been filed, con backs. tracting agencies are encouraged to

Reports of suspected violations and seek agreement as to disposition of the action being taken

action being taken shall be furnished controversy. However, such efforts to

to the Director of Installations and dispose of a controversy shall not be

Logistics, OST. conducted in lieu of formal Board actions or hearings and shall not result 8 12–1.351 Contract number prefixes. in suspension of processing of an

All contracts, exclusive of purchase appeal, except as ordered or authorized by the Department of Transporta

orders, issued by the Department will tion Contract Appeals Board.

be identified by a number or combina

tion of letters and numbers, in accord8 12-1.318-52 Payment after appeal is ance with Department Order 4220.1A filed.

(set forth in DOTPR Part 12-99). In the event of an appeal, the

812-1.352 Industrial security. amount determined to be payable in the decision of the contracting officer,

(a) Pursuant to Executive Order less any portion previously paid, nor 10865 (3 CFR, 1959-63 Comp.) an mally should be paid in advance of any agreement between the Department of decision by the Board without preju- Defense and the Department of Transdice to the rights of either party or portation was entered into on June 1, the appeal.

1967, extending regulations prescribed

by the Secretary of Defense under the 8 12-1.318-53 Implementation of decisions

Executive order to apply to protect reof the Contract Appeals Board.

leases of classified information relat(a) It is the policy of the Depart ing to DOT contracts and releases of ment of Transportation to take other classified information which prompt action to effect payment in ac- DOT has the responsibility for safecordance with any decision of the Con- guarding. The Office of Investigations tract Appeals Board wholly or partial and Security, OST, has been designatly favorable to the appellant. If, how. ed as the Department of Transportaever, an Administration believes such tion liaison for industrial security matdecision is not “appropriate for review ters. The Defense Logistics Agency in court under prevailing statutory will perform all cognizant security and judicial standards”, it may recom- office functions specified in, and will mend that action be taken to seek ju have the authority and responsibilities dicial review of the Board's decision. prescribed by, Department of Defense The recommendation shall be made to Industrial Security Regulations (ISR) the DOT General Counsel who shall (DOD 5220.22R) and Department of determine whether or not judicial Defense Industrial Security Manual review of the Board's decision will be (DOD 5220.22M). sought. In the event that the DOT (b) Any DOT contract or prospective General Counsel determines that judi. contract which would require access to cial review will be sought, the matter classified information by the contracshall be referred to the Department of tor or any of his employees in the bid, Justice and the appellant shall be negotiation, award, performance, or promptly advised that payment in ac- termination of the contract, including cordance with the Board's decision clearances required for visit purposes, will not be made.

is considered to be a "classified con

territories, Puerto Rico and Canada. Offices which may wish to let classified contracts for performance outside the United States, its territories, Puerto Rico or Canada shall consult with their appropriate security staff.

tract” subject to the procedures of this section, even though the contract document itself is unclassified.

(c) All proposed procurements shall be reviewed specifically to determine if access to classified information will be required by prospective contractors during the solicitation period or by a contractor at any time in the performance of the contract. If access to classified information will be required during the solicitation period, the security staff of the headquarters of the Administration, as designated in DOT Order 1640.4, dated 12/12/72 shall be advised immediately and furnished the list of firms to be solicited. Initiations for bid or requests for proposals shall not be issued until notification has been received from the appropriate security staff that the firms to be solicited have a valid facility security clearance. If access to classified information will not be required during the solicitation period but will be required during the performance of the contract, the invitation for bids or requests for proposals shall so state, and award shall only be made after the facility security clearance of the proposed contractor has been verified and approved by the appropriate security staff.

(d) Immediately upon the award of a classified contract, or in connection with precontract negotiations, if appropriate, the contracting officer shall furnish a copy of DD Form 254, Contract Security Classification Specification, to the prime contractor.

(e) Any DOT contract, the performance of which will require access to classified information by the contractor or any of his employees, shall contain a security requirements clause For classified contracts of the type cited in this regulation the Military Security Requirements clause as set forth in this regulation shall be used. Other types of classified contracts shall contain the appropriate Military Security Requirements clause of Section VII of ASPR.

(f) The Industrial Security Program encompassed by the publications cited in paragraph (a) of this section applies only to contracts involving access to classified information which are performed within the United States, its

8 12-1.353 Variation in quantity.

(a) To the extent that a variation in quantity is caused by any of the conditions specified in the Variation in Quantity clause at FPR 1-7.102-4, the yaried quantity may be accepted only to the extent specified in the contract. The Extent of Quantity Variation clause in DOTPR 12–7.102-450, or a substantially similar clause, shall be used for this purpose. The acceptable variation stated in the Extent of Quantity Variation clause shall be stated as a percentage of the required quantity, and may be an increase, a decrease, or a combination of both. There should be no standard or usual percentage or variation. The variation in quantity permitted in any procurement should be based upon the normal commercial practices of the particular industry for the particular items, and the permitted percentage should be no larger than is necessary to afford a contractor reasonable protection against the conditions specified in the Variation in Quantity clause. In no event may the acceptable variation exceed plus or minus 10 percent. The clause set forth in DOTPR 12-7.102-450 may be included in the contract only when one or more of the conditions specified in the Variation in Quantity clause is foreseeable at the time of solicitation in the case of an advertised procurement, or at the time of award in the case of a negotiated procurement.

(b) Consideration shall be given to the quantity to which the percentage variation applies. For example, when it is contemplated that delivery will be made to multiple destinations and it is desired that the quantity variation extend to the item quantity for each destination, this requirement must be set forth with particularity. Similarly, when it is desired that the quantity variation extend to the total quantity of each item and not to the quantity for each destination, it may be desir

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