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data and specifications, will be maintained by each purchasing office for supplying requests of prospective bidders.

(8) One copy of each Letter of Proposal and Request for Proposal (negotiated procurement), including data, publicized in the Department of Commerce Synopsis of Proposed Procurements, will be forwarded to the Procurement Information Center, Office of the Under Secretary of the Army, Old Post Office Building, 12th Street and Pennsylvania Ave. NW., Washington 25, D. C. See § 1001.204 for instructions as to forwarding a copy of each invitation for bids (formal advertisement) to the Procurement Information Center.

(e) Contents of synopses of proposed procurements. Each synopsis will include:

(1) Name and location of purchasing office;

(2) Description of item to be procured. The description will be clear, concise, and abbreviated wherever possible, with a minimum number of words for description but sufficient for understanding by interested parties; it will consist of a minimum general description and will include, when appropriate, commonly used names of supply items, basic materials from which fabricated, and general size or dimensions. Citation to specification and/or drawing numbers or other identifying data will be included, if this information will assist prospective suppliers in determining whether they are interested in the procurement.

(3) When purchasing offices believe it advisable for security reasons, quantities may be published as "more than__.

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(4) Number or identification of invitation for bids or request for proposals. Invitation-for-bids numbers will be followed by the letter "B". Request for proposals or quotations will be indicated by the letter "Q" or, if numbered, the number will be followed by the letter "Q".

(5) Date of opening of bids or last date for submission of proposals or quotations.

[18 F. R. 6260, Oct. 1, 1953]

§ 1000.315 Synopses of contract awards-(a) Statement of policy. The policy of the military Departments is to disseminate as widely as possible information relating to awards of unclassified contracts exceeding $25,000, whether

entered into by formal advertising or negotiation. One objective of this policy is to provide opportunities for small business concerns to learn of and solicit subcontracting work.

(b) Applicability. In accordance with the policy stated in paragraph (a) of this section, instructions in this section apply to all contracts (including contracts for the construction, alteration, or repair of buildings, bridges, roads, or other kinds of real property), whether entered into after formal advertising or negotiation, when:

(1) The contract exceeds $25,000; (2) The contract is unclassified, and (3) The contract is entered into by any purchasing office in the continental United States.

(c) Action by purchasing offices. Purchasing offices will prepare and forward single copies of synopses of contract awards to each of the addressees listed in subparagraphs (1) and (2) of this paragraph, before the close of business at the end of each week.

(1) Field Service Administrative Office, U. S. Department of Commerce, 433 W. Van Buren Street, Chicago 7, Illinois.

(2) Procurement Information Center, Office of the Under Secretary of the Army, Old Post Office Building, 12th Street and Pennsylvania Avenue NW., Washington 25, D. C.

(d) Contents of synopses of contract awards. Synopses of contract awards will contain the following information: (1) Name of purchasing office.

(2) Brief description of the commodity or service procured, followed in parentheses by the applicable Invitation for Bid number or Request for Proposal number. Description will be clear, concise, and abbreviated wherever possible, with a minimum number of words for description but sufficient for understanding by interested persons. It will include, where appropriate, commonly used names of supply items, basic materials from which fabricated, general size or dimensions, and so forth.

(3) Quantity of items.

(4) Statement of dollar amount. (5) Name and address of the contractor.

(e) Repeating synopsis of prime contracts. When a contractor indicates need for assistance in letting subcontracts, a synopsis of award of the prime

contract will be repeated as long as the need for such assistance continues. Purchasing offices will aggressively encourage the contractor to employ this medium of publicizing his subcontracting requirements. When repeating the synopsis of award of prime contract, a statement of industries, crafts, processes, or component items in or for which subcontracts are available and subcontractors are desired by prime contractors will be included, in substantially the following form: "Prime contractor has subcontracts open for the following: (Insert here industries, crafts, processes, or component items applicable)," (insert the following clause where applicable) "and desires that subcontractors be located in (insert here general area indicated by prime contractor, if any, such as: Southeast States, New England, west coast, etc.)."

[18 F. R. 6260, Oct. 1, 1953]

§ 1000.316 Defense Production Pools-(a) Statement of principles of contracting with defense pools-(1) Definition. A Defense Production Pool consists primarily of a group of manufacturing concerns having among themselves production facilities, whose owners have associated together to obtain and perform jointly, or in conjunction with each other, contracts for the production of articles, equipment, supplies, and materials, and the furnishing of services for defense use, and who have agreed among themselves concerning their organization, relationship, and procedure, and which has been approved as a Defense Production Pool in accordance with the Defense Production Act of 1950, as amended.

(2) Exemption from Walsh-Healey Act. Approved Production Pools and members thereof are not required to conform to the definition of "regular dealer or manufacturer" as set forth in §1.201-9 of this title by reason of an exemption granted by the Secretary of Labor by order dated June 14, 1951, with respect to section 1 (a) of the WalshHealey Act. In all other respects, financial responsibility and performance capability of the Production Pool will be determined as for any contractor in accordance with departmental procedures. (3) General policy. The general policy of the Departments of Defense and the Air Force is to conduct business with Defense Production Pools on the same basis as with all other bidders and con

tractors. Pools will neither be discriminated against nor favored over other bidders and contractors solely by reason of the form of their organization.

(4) Determination of status. The contracting officer is responsible for determining whether a group of firms seeking to do business with the Government is an authorized Defense Production Pool. In the absence of official notification as provided below, a Defense Production Pool will be required to inclose a photostatic copy of its notification of approval when applying for inclusion on appropriate bidders' lists. (The list of approved Defense Production Pools will be published in Air Force Procurement Instructions.)

(5) Solicitation of bids and quotations from pools. On request, duly authorized Defense Production Pools will be placed on appropriate bidders' lists. Invitations for bids and requests for proposals (quotations) will be furnished to Defense Production Pools on an appropriate bidders' list for a specified item or group of items. Each Defense Production Pool normally will be consid ered as one source of supply, irrespective of the number of its membership, and generally will be furnished with one set of bid or proposal (quotation) forms. Membership in a pool will not of itself preclude individual members from bidding on procurements for which they are qualified.

(6) Award of contracts. (i) Bids and quotations submitted by Defense Production Pools will be analyzed pursuant to the same procedures and principles which pertain to all other prospective contractors.

(ii) Defense Production Pools will be granted the preferences and privileges accorded to small business concerns when the Administrator of Small Defense Plants Administration designates a particular pool "small business." Contracting officers are responsible for ascertaining whether the pool has been so designated.

(iii) Where the pool will substantially perform a contract in plants located in areas of labor surplus, the preferences granted to contractors performing work in such areas will be applied to the award of the contract.

(iv) Before awarding a contract to a pool, the contracting officer will insure that:

(a) There will be performance, both as to quality and delivery. Pre-award surveys and facilities capability surveys will be conducted to determine the capability of performance of a pool in the same manner as for any other contractor. To insure the uninterrupted production of the manufacture of supplies or the furnishing of services to be undertaken by a pool, the financial resources to be employed in or available for the performance of the contract will be examined just as in the case of an individual contractor, to determine whether they are sufficient to give reasonable assurance of unsatisfactory performance.

(b) The Pool Agreement adequately binds each participating member who agrees to undertake part of the work on a contract to comply with his obligation to do so.

(7) Execution of contracts with pools. Contracts awarded to Defense Production Pools normally will be made in the name of the Defense Production Pool. A written statement will be submitted by the pool and signed by each member of the pool who is to participate in the performance of the Government contract. This statement, which will certify to current membership in the pool, will be appended to the contract, will contain a guarantee or other assurance by each signatory firm that it will satisfactorily perform its allotted portion of the contract, and will also set forth the extent of each participant's financial liability for such performance. If the terms of the Pool Agreement provide for a member to enter into a contract in the name of the member, a copy of the Pool Agreement will be submitted with the bid, together with evidence of specific authorization of the individual member to so act, and the contract may be executed in the name of the individual member, who in so doing will be required to assume full responsibility for performance of the contract.

[18 F. R. 6260, Oct. 1, 1953]

§ 1000.317 Implementation of Defense Manpower Policy No. 4. This section sets forth the policies and procedures for the placement of procurements by negotiation in labor surplus areas, certified by the Director, Office of Defense Mobilization, under Defense Manpower Policy No. 4, Placement of Procurement in areas of Current or Im

minent Labor Surplus, issued as of February 7, 1952. (17 F. R. 1195)

(a) Policy. (1) Defense Manpower Policy No. 4 contemplates the placement of procurement contracts by negotiation with responsible concerns for substantial performance in areas of current or imminent labor surplus in cases where the public interest dictates the need for so doing in order to achieve stipulated objectives.

(2) A Surplus Manpower Committee has been created, whose members are appointed by the Chairman of the Manpower Policy Committee from representative departments and agencies. The Defense Manpower Administration of the Department of Labor certifies, under standards established by the Secretary of Labor, the existence of labor surplus areas; whereupon, the Committee obtains from appropriate agencies, manpower and facilities information, and makes suitable findings and reports them to the Director of Defense Mobilization with a recommendation that he notify the Department of Defense and the General Services Administration that the Director has concluded it to be in the public interest to give preference to such labor surplus areas in the placement of contracts. This conclusion is made after the review of the Committee's recommendations by the Office of Defense Mobilization to ascertain whether such findings and recommendations may be reconciled with other policies affecting procurement for which policies the Office of Defense Mobilization has responsibility. Official notifications are issued by the Director, Office of Defense Mobilization, designating those areas or industries which are to receive preferential considerations in accordance with the provisions of the notifications.

(3) The Department of the Air Force, on receipt of an official notification, shall (i) determine what procurement contracts can be fulfilled by utilization of the manpower skills and facilities described in the Committee's surveys and findings, (ii) take all practicable steps, consistent with other procurement and military objectives, other than price (where a price differential is authorized), to locate procurement in the areas covered by the Committee's findings, and (iii) within a reasonable time, report the steps taken and furnish any other relevant information requested.

(4) The Secretary of Defense has directed that:

(i) Any contract giving preference in the form of a price differential to a distressed area must be approved by the Secretary of the Air Force before it becomes effective.

(ii) There shall be submitted monthly to the Senate and House Armed Services Committees and the Senate and House Appropriations Committees a list of contracts awarded as a result of any preference under Defense Manpower Policy No. 4. This report shall show for each contract the amount, if any, of any price differential allowed.

(b) Applicability. This section covers the application within the Department of the Air Force of the policies mentioned in paragraph (a) of this section, in the placement by the military departments of supply contracts in excess of $25,000 as to which a substantial portion of the production may be undertaken in an area of labor surplus. This section does not apply to the placement of contracts with firms in those industries which are excluded pursuant to the provisions of notifications issued under Defense Manpower Policy No. 4. Procurements within industries which are the subject of specific notifications issued by the Director, Office of Defense Mobilization, shall be handled in accordance with these procedures as modified or supplemented by such notifications, except as special instructions are issued by Headquarters USAF relating to such industries. industry.)

(See § 1000.318 for textile

(c) Formal advertising. (1) The policies prescribed in this section do not in any way alter the present method of awarding contracts after formal advertising. Therefore, if formal advertising is determined to be the appropriate method to be utilized for a particular procurement, invitations for bid will be issued and awards made in precise accord with the provisions of Part 2 of this title, and the respective departmental procedures pertaining to formal advertising. In implementing this section, contracting officers will not engage in the practice of inviting bids by formally advertised procurement and then rejecting all bids and resorting to negotiation. Special care will be exercised to insure that bidders situated in labor surplus areas whose names appear on the

appropriate bidders' list will receive an opportunity to participate.

(2) The policy provided in § 2.406-4 of this title relating to the awarding of contracts in a "distressed employment area" shall be deemed to apply to both Group IV, Areas of Labor Surplus, appearing in the Bi-monthly Summary of Labor Market Developments in Major Areas, published by the Labor Department, and labor surplus areas as may be certified by the Director of Defense Mobilization.

(3) The term "set-aside" as used in this section identifies that method of procurement whereby a portion of the requirement is withheld from formal advertising and negotiated exclusively for substantial production in labor surplus areas. Set-asides have been used to a limited extent heretofore. When in the public interest to do so, a more extensive use of set-asides is hereby directed. In situations in which a set-aside is used, the following procedures will apply:

(i) Determine the optimum quantity which, because of manufacturing processes, would probably yield the most favorable price and issue invitations for bid for that quantity (plus such additional quantity, if any, a contracting officer may deem appropriate), holding back a quantity at least equivalent to an economical production run for future placement by negotiation exclusively for substantial production in a labor surplus area. The invitation for bid covering the formally advertised portion shall give suitable notice that the set-aside procedure in aid of labor surplus areas may be utilized and that the right to participate in subsequent negotiation for any such set-aside portion of the procurement requires that the firm must have submitted a bid within 120 percent of the highest award made under such invitation. However, the portion withheld for negotiation shall not be revealed prior to the opening of bids.

(ii) Undertake to negotiate the setaside portion for substantial production in such labor surplus areas with responsible bidders who have submitted bids conforming to the invitation for bids:

(a) At a price equivalent to the lowest qualified bid received under the invitation for bids when the award (s) is for a single price.

(b) At a price determined by the contracting officer to be fair and reasonable but in no event at a price higher than

the highest price of an award made under the invitation for bids when the award (s) is at multiple prices. In the absence of changes in market trends and other factors requiring consideration, the contracting officer shall use for such fair and reasonable price the weighted average. The weighted average shall be ascertained by adding the total dollar amounts of all awards, then dividing such grand total by the total number of units included in all awards.

(4) When this method of procurement is utilized to give preference, negotiations shall be conducted in the following order of preference:

(i) Small business firms, beginning with the bidder who submitted the lowest responsive bid.

(ii) Large business firms, beginning with the bidder who submitted the lowest responsive bid.

(5) If full coverage is still not obtained, the unplaced portion of the set-aside may be procured in the most appropriate manner.

(d) Negotiated procurement. (1) Contracting officers will use their best efforts to award procurement contracts for supplies, including those in an amount of $25,000 or less, to contractors who will produce substantially within a labor surplus area to the extent that normal negotiation policies and procedures will permit. Such procurements are not considered as having resulted from the giving of a "preference" as that term is defined in subparagraph (2) of this paragraph.

(2) "Preference" within the meaning of Defense Manpower Policy No. 4 and notifications thereunder is defined to include any action necessary to award a procurement contract for production in a labor surplus area, solely because of the provisions of a notification under said policy and without which the contract would not be so awarded.

(3) When Office of Defense Mobilization notifications state that contractors in certified areas will be afforded the opportunity to meet prices obtainable in any labor market area classified by the Department of Labor as Group I, II, or III, the following will be adhered to:

(i) The best possible terms should be negotiated with each firm. When the lowest acceptable proposal has been obtained and when such proposal was obtained from a firm in a labor market

area classified I, II, or III by the Department of Labor, qualified firms in labor surplus areas which have submitted proposals not in excess of 120 percent of such lowest acceptable proposal shall be given the opportunity of receiving the award by meeting the otherwise acceptable proposal in the following order of preference:

(a) Small business firms, beginning with the firm which has submitted the lowest acceptable proposal.

(b) Large business firms, beginning with the firm which has submitted the lowest acceptable proposal: Provided however, That if the lowest acceptable proposal was obtained from a small business firm outside the labor surplus areas, a large business firm shall not be given the opportunity of receiving the award by meeting such lowest acceptable proposal.

In conducting these negotiations, the amount of the low acceptable proposal may be revealed but not the identity of the firm nor cost information pertaining to such proposal.

(ii) If, subsequent to the initial solicitation of proposals, additional suppliers which will produce substantially in labor surplus areas desire an opportunity to submit quotations, such quotations may be received if the original negotiation has not been concluded and if the additional negotiation will not unreasonably delay the procurement. If such late offer is received and negotiation is undertaken, negotiation will be conducted as provided in subdivision (i) of this subparagraph.

(e) Price differentials. Price differentials are not now authorized under this policy. If such differentials are authorized, a supplement to this section will be issued.

(f) Records and reports. Each negotiated contract covered by this section shall be documented to indicate:

(1) The reasons why the contract was not awarded for production in a labor surplus area, if such is the fact.

(2) If the contract was awarded for production in a labor surplus area, whether such action resulted from the application of normal negotiation procedures, or by reason of "preference" as defined in paragraph (d) (2) of this section. If the latter, the type of preference granted shall be indicated.

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