$9-4.5401 Definition. For purpose of this support, offfial2puclear material means "uraniu than PU $9-4.5402 Policies. (a) Special nuclear material will be furnished by ERDA for use under fixed-price contracts and subcontracts, at any tier, which call for the production of special nuclear products, including fabrication and conversion, for Government use. (The contractor or subcontractor must have the appropriate license or licenses to receive the special nuclear material. The Nuclear Regulatory Commission is the licensing agency.) (b) Contracts and subcontracts for fabrication of end items using special nuclear material generally shall be of the fixed-price type. Cost-type contracts or subcontracts for fabrication shall be used only with the approval of the head of the procuring activity, and this approval authority shall not be redelegated. (c) Contracts and subcontracts for conversion of scrap recovery of special nuclear material shall be of a fixed-price type except as otherwise approved by the senior procurement official, Headquarters, or the head of the procuring activity. $9-4.5500 Scope. Subpart 9-4.55 Multiyear Procurement (a) This subpart sets forth policies and procedures applicable to competitive procurements on a fixed-price basis for known requirements of supplies or services over a multiyear period when the total funds required are not available for the entire procurement at the time the procurement contract is executed. This subpart does not apply to long-term contracts which are fully obligated at the time of execution, or which are otherwise specifically authorized by law (e.g., section 161u. of the Atomic Energy Act of 1954, as amended). (b) The policy in §9-4.5502 shall be applied to cost-type contractor procurements. (a) Multiyear procurement is a method for competitive contracting for known requirements for supplies or services, in quantities and total cost not in excess of planned requirements for five years set forth in approved ERDA programs, even though the total funds ultimately to be obligated by the contract are not available to the contracting officer at the time of entering into the contract. Under this method, contract quantities are budgeted for and financed in accordance with the program year for which each quantity is authorized. This procedure provides for solicitation of prices based either on award of the current one-year program quantity only, or, in the alternative, on the total multiyear quantities. Award is made on whichever of these two alternative bases reflects the lowest unit prices to the Government. If award is made on the multiyear basis, funds are obligated only for the first year's quantity, with succeeding years' contract quantities funded annually thereafter. In the event funds are not made available to support one or more succeeding years' quantities, cancellation is effected. The contractor is protected against loss resulting from cancellation by contract provisions allowing reimbursement of unrecovered nonrecurring costs considered in pricing the items subsequently cancelled. (b) Under this procedure: (1) nonrecurring costs are distributed over a larger number of units, thus narrowing any price advantage of a firm already in production; (2) there is a greater assurance of depreciation recovery for capital investment; and (3) the competitive base is broadened with better prospects for lower prices, where firms otherwise might be unwilling or unable to compete. $9-4.5502 Policy. (a) The multiyear procurement method is to be used to the maximum extent consistent with the requirements of this subpart in order to: stimulate maximum realistic competition by minimizing competitive disadvantage or disinterest in procurements involving, at least initially, substantial startup costs or make-ready expense; or obtain lower prices in those procurements which provide opportunity for substantial cost savings and other advantages through assurance of continuity of production or service over longer periods of time. (b) The multiyear procurement method shall not be used. (1) if funds covering the procurement are limited by statute for obligation during the fiscal year in which the procurement contract is executed; (2) when the supply or service being procured is regularly produced or provided and offered for sale in substantial quantities in a commercial market reasonably available; (3) for quantities in excess of the planned requirements set forth in, or in support of, current approved ERDA program and financial plans or for periods in excess of five years; or (4) when any one of the criteria set forth in §9-4.5503 is not present. (c) In any multiyear procurement, it is ERDA policy to consider the desirability of obtaining options to renew the contract for reasonable periods at prices not to include any nonrecurring costs such as charges for plant and equipment already amortized. In addition, where a multiyear procurement involves an initial investment in plant and equipment which will constitute an appreciable portion of the cost of contract performance, it is ERDA policy to consider the desirability of reserving the right, upon payment of the unamortized portion of the plant or equipment, to take title thereto under appropriate circumstances. $9-4.5503 Criteria for use of multiyear procurement. All of the following criteria must be met in order to procure on a multiyear basis: (a) reduced unit prices can be reasonably anticipated over successive annual procurements by reason of elimination or reduction of repetitive startup costs or contingent expense, including such costs or expenses as preproduction engineering, special equipment or tooling, plant rearrangement, and assembly, training, or transportation of a specialized work force; (b) there is reasonable expectation that effective competition can be obtained; (c) there are known requirements for the supplies or services to be procured, and relatively stable production or service can be reasonably anticipated throughout the multiyear period; (d) the design and specifications of the item or the character of the service are expected to remain relatively stable for the multiyear periods; and (e) the items being procured are not regularly manufactured and offered for sale in substantial quantities in the commercial market, except that (1) when quantities to be procured by the Government represent a substantial portion of the total market and would require present a substantial portion of the total market and would require special manufacturing runs for all or substantially all of the Government's requirements and (2) significant cost savings would result from multi-year procurement. $9-4.5504 Exceptions. Exception, by reason of some overriding consideration, from any limitation set forth in §9-4.5502 or from any of the criteria set forth in §9-4.5503 shall not be made unless approved by the senior procurement official, Headquarters. $9-4.5505 Method of solicitation. Formal advertising, including two-step formal advertising, is the preferred method for use in multiyear procurement. In cases where the period of production is such that a contingency for labor and material costs is likely otherwise to be included in the multiyear contract price, the contracting officer should normally use a provision for price escalation. $9-4.5506 Procedure to be followed in multiyear procurement. Solicitations shall include the information described in the following paragraphs, as appropriate. $9-4.5506-1 Requirements. State the requirements, separately identified by bid or proposal item in the schedule, for (a) the first program year; and (b) the multiyear procurement including the quantities for each program year thereunder. $9-4.5506-2 Previous competition. When previous production procurements of the item have been made with competition: (a) include a provision that a price may be submitted for the total requirements of the first program year, or for the total multiyear requirements, or both; (b) when competition in future procurements of the items would be impracticable after award of a contract covering the first program year quantity alone, and the head of the procuring activity determines that, in order to eliminate the possibility of a first program year "buy-in," these provisions will be in the best interests of the Government, include provisions that a price may be submitted only for the total multiyear quantity and that prices on a single-year basis will not be considered for any purpose; or (c) a provision that if only one responsive offer on the multiyear requirement is received from responsible offeror, the Government reserves the right to cancel the solicitation and resolicit on a oneyear basis by whatever procedures are then appropriate. $9-4.5506-3 No previous competition. When there has been no previous competition for the production of the item: (a) include provisions that a price must be submitted for the total requirements of the first program year, that a price may be submitted for the total multiyear quantity, or that a bid or offer on the multiyear quantity only will be considered nonresponsive; and a provision that if only one responsive bid or offer on the multiyear requirements is received from a responsible bidder or offeror, the Government reserves the right to disregard the bid or offer on the multiyear quantity and to make an award only for the first program year requirements; (b) when competition in future procurements of the items would be impractical after award of a contract covering the first program year quantity alone, and the head of the procuring activity determines that, in order to eliminate the possibility of a first program year "buy-in," these provisions will be in the best interest of the Government, include provisions that a price may be submitted only for the total multiyear quantity and that prices on a single-year basis will not be considered for any purpose; or (c) a a provision that if only one responsive bid or offer on the multiyear requirements is received from a responsible bidder or offeror, the Government reserves the right to cancel the solicitation and resolicit on a single-year basis by whatever procedures are then appropriate. $9-4.5506-4 Pricing-unit price. Include a provision that the unit price of each item or service in the multiyear requirement shall be the same for all years included therein and that the portion of the cost of any plant and capital equipment amortized as a cost of performance should not exceed the ratio between the period of performance and the anticipated useful commercial life of such plant or equipment. . |