§ 29-3.204 Personal or professional services.

Where statutory authority exists for both (a) the procurement of personal services and (b) the authorized deviation from advertising requirements for such procurement, § 1-3.215 of this title shall be the exception cited and not § 1-3.204 of this title. The statutory authority must be separate and apart from the Federal Property and Administrative Services Act of 1949, as amended, which authorizes the FPR and the DOLPR.

§ 29-3.204-50 Criteria for determining whether services are personal.

For purposes of applying the prohibition against personal services, the contracting officer shall make determinations on a case-by-case basis. In so doing, the contracting officer shall apply the circumstances of a particular case to the general criteria in this § 29-3.204-50. In determining whether services being procured are "personal" in nature, not all the criteria need be present in a particular case to justify the barring of a proposed procurement as being in violation of the proscription against personal services procurement.

(a) Government supervision. Based on decisions of the Comptroller Gen

eral and standards published by the Civil Service Commission, the following criteria constitute some of the general standards against which to measure a proposed procurement when "Government supervision" is a factor in order to determine whether the procurement requires special statutory authority to bring it within § 29-3.204. To determine the extent of Government supervision the contracting officer should look to all of the provisions of the entire contract, not merely the work statement, schedule, or specification. Some elements of Government supervision to consider, although they need not be answerable in the affirmative in a particular situation to warrant the conclusion that Government supervision exists, are:

(1) Will the work be performed at a Government site or in close proximity to the Government's authorized representative responsible for accepting or rejecting the work to be performed?

(2) Will Government-furnished tools and facilities be used in performing the work?

(3) Will the services be applied directly in furtherance of assigned functions or missions of DOL or one of its subparts, i.e., as opposed to supporting services or services of professional or staff assistants?

(4) Are identical or substantially comparable services meeting similar needs being performed in DOL and/or other Federal agencies by Civil Service personnel?

(5) Can the need for the particular services be said to be recurring or extending beyond 1 year, regardless of the term of the proposed procurement which, for appropriation purposes, might be limited to a year or less?

(6) Does a Government official or employee have full personal responsibility for the successful performance of the services?

(7) Does the Government control not only what services will be performed but also the full particulars of how the services will be performed?

(8) Does the contract provide payment for inputs, e.g., labor hours, as opposed to outputs, e.g., reports?

(b) Examples of nonpersonal services. Contracts requiring the collection of data, the delivery of lectures, serv

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ices by artists, physicians, dentists, and public stenographers are usually nonpersonal. Temporary services performed by those in mechanical trades such as plumbers, electricians, etc., for the performance of a particular job whether on a time or job basis are usually considered nonpersonal.

[36 FR 11647, June 17, 1971, as amended at 38 FR 15965, June 19, 1973; 42 FR 40202, Aug. 9, 1977]

§ 29-3.205 Services of educational institutions.

[42 FR 40202, Aug. 9, 1977]

§ 29-3.205-50 Limitations.

(a) This authority shall be used only for the procurement of or the issuance of grants for specialized noncommercial services which are customarily performed by educational institutions. Use of this authority for any services other than those listed in § 1-3.205(a) of this title shall require a written determination with supporting facts by the head of the procuring activity that the particular type of service is available only from educational institutions.

(b) Proposals shall be solicited from as many educational institutions as are known to possess the required capability. This shall be consistent with § 1-3.101(c) of this title. Solicitation of a single educational institution shall require a written justification for sole source procurement in accordance with the requirements of § 29-3.210 of this chapter.

(c) Where the circumstances of both paragraphs (a) and (b) of this section pertain in the same case, the required determinations shall be combined and made by the head of the procuring activity.

[42 FR 40202, Aug. 9, 1977]

petition exists regardless of whether the procurement is formally advertised or negotiated. However, there are circumstances where one organization or individual has exclusive or predominant capability by reason of experience, specialized facilities, or technical competence to perform the work within the time required and at a reasonable price. To insure that DOL procurements conform fully with the basic policy prescribing competitive procurement, any proposed noncompetitive procurement in excess of $10,000 must be fully justified and approved by the Assistant Secretary for Administration and Management or, in the case of research contracts of $25,000 or more, by the Assistant Secretary for Policy, Evaluation and Research. The contracting officer is responsible for assuring that proposed noncompetitive procurements below these dollar levels are in compliance with FPR and DOLPR requirements regarding maximum competition.

(b) The DOL recognizes that noncompetitive awards may be made where the items or services are unique; where time is of the essence and only one known source can meet the Government's needs within the required time frame; or where it is necessary that the desired items manufactured by one source be compatible and interchangeable with existing equipment. In the event that a nonprofit, taxexempt, or volunteer citizens' group falls within one of the preceding examples, a noncompetitive procurement may be justified. However, there is no authority justifying a sole source procurement when the factors are based solely on a firm's status as either a nonprofit organization, a tax-exempt entity, or a volunteer citizens' group. In addition, there is no authority justifying a sole source procurement on the basis that a firm can perform the services with greater ease than any other firm.

(c) Where follow-on contracts are anticipated, sufficient data should be obtained to permit competition of later contracts. In study or research contracts, where practical, the contractor's work papers shall be stipulated as a deliverable end product along with the final report. Work papers

minations and findings may only be used for a finite group of prospective procurements with a common background, purpose and identical justification for exemption from the statutory requirement to procure by formal advertising. The group of procurements must be described in detail, including the nature of the program, the approximate number of contract actions, the cumulative dollar value of the procurements covered, the type of contracts to be let, the similarity in performance requirements and objectives and the general identity of contractors (the specific identity, if known). The class determinations and findings should also contain any other information supporting the conclusion that authority to negotiate should be extended to all of the procurements in the group or class being described. A class determinations and findings shall not extend the authority to negotiate or award the procurements that are part of the class after the expiration of the fiscal year for which the class determinations and findings were approved. Class determinations and findings may be renewed from year to year. A particular procurement, identified in a prior year's class determinations and findings, if covered by the renewal, is authorized for negotiation. However, renewal of a class determinations and findings is not a renewal of expired appropriations, regardless of whether such funds had been set-aside previously for the particular procurements whose negotiation was covered by a previous class determinations and whose negotiation authority is now being renewed.

Subpart 29-3.4-Types of Contracts

§ 29-3.403 Selection of contract type.

In preparing its negotiation position, the Government must include as one of its negotiation goals the type of contract that it prefers to consummate the particular transaction. The contract type selected as a goal requires consideration of all the circumstances of the transaction, not merely the deliverable end item. Such circumstances include the anticipated terms of the contract, product reliability of the item, the relationship between the

cost risk to the Government and contractor's performance risk, the urgency of the Government's needs and the availability and/or acceptability of substitute items. The availability of competition from prospective suppliers for the item is an important factor to consider, in addition to those in § 13.403 of this title, in selecting a contract type.

§ 29-3.404 Fixed-price contracts.

§ 29-3.404-3 Fixed-price contract with escalation.

(a) Description. The purpose of using an escalation clause in a fixedprice contract is to avoid the inequitable impact on either party of a known, identifiable and extraordinary contingency that can be isolated from the usual, less severe risks of performance. Frequently, the less desirable cost-reimbursement type contract is the only alternative to an escalation clause to protect the interest of the parties against performance or cost risk in a contract that would otherwise lend itself to a fixed-price contract. Fixedprice contracts with escalation shall not be awarded without maximum limitations on the upward and/or downward price adjustment. Such limitations shall not exceed 10 percent of the contract price without the express written approval of the head of the agency. An attempt shall be made, where applicable, to make the escalation factor reciprocal where the contingency factor shows both an upward and downward vacillation from a base or index. Care shall be taken in using this type of contract that no ambiguity surrounds the terms or amount of the escalation. Each source of bases or indices used shall be of such a caliber as to be generally considered authentic by specialists in the field and published in trade journals or other business-type publications available to the public. Moreover, the base or index shall have as much correlation as possible to the variation in price of the contingency covered by the escalation clause. Where the contingency can be anticipated in advance, it may be spelled out in an appropriate escalation clause in the invitation for bid, as set out in § 1-2.104-3 of this title, or re

quest for proposal, with no provision for deviation from the clause in the bid or proposal. Providing an escalation clause without deviation in the solicitation eliminates the problem of considering variations in this factor when evaluating competing bids or proposals.

(b) Application. Where escalation provisions are incorporated in the terms of a negotiated procurement, the parties shall give due recognition of the downward impact on the contractor's risk resulting from the elimination of the contingency. Since the amount of risk and who bears it are two of the dominant factors in determining a fair level of profit, reduction in risk shall be reflected in the lower level of profit negotiated. Fixed-price contracts with escalation provision shall not be used unless the overall price of the item being procured on a fixed-price basis would have been higher than the base price under the fixed-price with escalation contract.

§ 29-3.404-4 Fixed-price tract.

incentive con

Description-General. Next to firm fixed-price contracting, the fixed-price incentive contract imposes the maximum risk and motivation on the contractor. It is especially valuable for use in a procurement where the parties would otherwise have not been able to agree on an equitable price. Cost-plusincentive-fee contracts as described in § 29-3.405-4 similarly also provide for a reward and penalty. A cost-plus-incentive-fee contract can focus on many different nonprice performance factors and can even achieve an order of priority among those factors. The fixed-price incentive contract is designed to motivate the contractor to hold his costs down while at the same time limit the risk to the Government if costs are not controlled. The fixedprice incentive contract requires for its application the delivery of an end product which can be precisely described and which will, at contract completion, be accepted or rejected on the basis of objective standards. Where various measurable levels of quality can be anticipated and the Government wants the contractor to be motivated toward the highest qual

ity, then the fixed-price incentive contract, which motivates a contractor to be only cost conscious, should not be used. In such a case, a cost-plus-incentive-fee contract would be desirable.

[36 FR 11647, June 17, 1971, as amended at 42 FR 40202, Aug. 9, 1977]

§ 29-3.404-7 Retroactive price redetermination after completion.

This type of contract has narrowly limited application. Its distinctive characteristic is the combination of a ceiling price and a provision for a postperformance "downward-only" price redetermination. This fixed-price contract type offers an advantage over others where negotiation between the parties is impeded by their disagreement over the relationship between risk and price in a prospective contract of relatively short duration and low dollar value. Thus, typically, it would be applicable where a contractor will accept a fixed price contract together with the risks associated with that type of contract and yet insist on adding unrealistically (in the Department's view) high contingency factors into the fixed price the individual is willing to negotiate. In using this type of contract, care should be taken that the ceiling price represents some contractor risks; otherwise the contract takes on some of the characteristics of

§ 29-3.405-3 Cost-sharing contract.

Caution in the use of this type of contract is required to prevent the costs agreed to be assumed by the contractor from being recirculated in the contractor's accounting system and recharged against the cost-sharing contract or other Government contracts, directly or indirectly. When used, this type of contract shall contain a clause specifically prohibiting the recharge of any part of the contractor's "share." A cost-sharing contract providing for the contractor to share cost overruns as well as costs less than the

contract ceiling will not obligate the Department to add additional funds. The contractor in such a contract is only obligated to continue to share costs if the Department elects to extend the contract with additional funds. Contracts containing a requirement that the parties share in overruns shall contain a maximum limit beyond which neither party assumes any liability for further participation in overruns. Where the mutuality of interest of both the Department and prospective suppliers is present, requests for proposals may include language recognizing the prospective joint benefits and stating that the willingness of contractors to share costs will be a factor in determining award. In no event, however, shall a lack of willingness to share costs by a prospective supplier, in and of itself, justify the rejection of a proposal as nonresponsive. To do otherwise could operate to exclude technologically superior suppliers who may not wish to share costs.

§ 29-3.405-5 Cost-plus-a-fixed-fee contract. (a) Limitations. There is no departmentwide fixed-fee ceiling schedule other than the limitations imposed in § 1-3.405-5(c)(2) of this title. Within those limitations, the head of each procuring activity may establish a fee ceiling for the activity.

(b) Administrative limitations. In addition to the statutory limitations described in § 1-3.405-5(c)(2) of this title, fees under cost-plus-a-fixed-fee type contracts are subject to the administrative limitations set forth below:

(1) Nine percent of the estimated cost, exclusive of the fee, for any costplus-a-fixed-fee contract for experimental, evaluation, developmental, or research work; or