that purpose including locked storage space. Imprest funds shall neither be deposited in any bank, regardless of in whose name or account it is established nor commingled with personal or other funds. Each imprest fund shall be maintained separately.

(b) Regular transactions. The cashier shall verify the signature of each DOL representative receiving cash with the signature on the DOL representative's DOL Identification (ID) Card. The ID Card number shall be recorded alongside the DOL representative's signature on the cashier's cash transaction record.

(c) Doubtful transactions. When the propriety of any disbursement is doubtful, the cashier may require written acceptance of responsibility from the official authorizing the disbursement. Such written acceptance of responsibility provides the cashier recourse to the official if the disbursement is later disallowed. The cashier may also request an advance written opinion with respect to a doubtful transaction.

(d) Review of transactions. Cashiers, including alternates shall periodically test vouchers submitted for payment by verifying the approving officer signature against a specimen signature maintained on file. In addition, the cashier, on selected vouchers, shall contract the approving officer and make a direct verification of the propriety of the vouchers and the amount claimed.

whether the public interest requires the cancellation of an order should include consideration of any Government liability resulting from the cancellation. Cancellation is generally acceptable to a vendor except where the vendor has already incurred expense in conjunction with the purchase order. In cases where the vendor will not concur in the cancellation and where in effect a contractual relationship exists, the order shall be terminated as prescribed in Subpart 1-8.2 of this title.

[36 FR 11647, June 17, 1971, as amended at 42 FR 40204, Aug. 9, 1977]

§ 29-3.605-51 Duplicate purchase orders.

If the vendor reports non-receipt, loss or other inability to locate an original purchase order and requests another copy, the purchasing officer may issue to the vendor a duplicate copy as the vendor's basis of performance. This second issue should be conspicuously marked "Duplicate Copy." To avoid the possibility of a duplicate shipment, a letter of transmittal or a notation on the purchase order should read somewhat as follows:

This is a duplicate copy of the lost original purchase order, furnished in accordance with your request of (Date). The Government will not be responsible for duplicate shipment.

[36 FR 11647, June 17, 1971, as amended at 42 FR 40204, Aug. 9, 1977]

§ 29-3.606 Blanket purchase arrange

ments.

§ 29-3.606-1 General.

The use of blanket purchase arrangements creates a vendor-agency relationship akin to an open account which has as its objectives the simplification of the ordering and billing in the purchase of small requirements of readily available supplies or services of the same general category. It essentially differs from other small purchase techniques in that purchase orders are not written for each purchase, billing for many items are submitted at preagreed intervals of not less than a month, and many purchases are processed with a single payment. Blanket purchase arrangements may be terminated by either party

upon the delivery of written notice to the other.

§ 29-3.606-3 Establishment of account.

Once the requirements of § 1-3.606-3 of this title have been met, the arrangement should be formalized by the issue of a purchase order or other written memorandum.

§ 29-3.606-4 Documentation.

(a) It is the responsibility of the vendor to determine that a purchase chargeable to the Department is made by one who is authorized to purchase from the vendor in the name of the Department. Vendors are generally accustomed to receiving Government purchase orders which they honor even though the signer may not be known to them. This they do somewhat at their own risk. To protect the Department against criticism and the vendor against loss due to unauthorized purchases, any arrangement with the vendor for making purchases without the use of a formal purchase order must be carefully worked out. While no standard documentation of the arrangement is required, it is desirable to have a record of the vendor having been informed.

(1) Who is authorized to make individual purchases;

(2) How purchases will be placed, i.e., by phone, by certain designated persons ordering and picking up supplies from the vendor, etc.;

(3) What the vendor must do to assure that only authorized purchases are made to obtain payment, i.e., prepare an itemized sales slip showing order number, if one is given, and whether it must be signed by an authorized person; send invoice with shipment; give invoice to person picking up supplies; payment to be made once a month, or quarterly, etc.;

(4) What discounts will be given (particularly on repair parts and labor); how time discounts will be handled;

(5) Limitations by class of item, time, or dollar amount.

(b) Because of the possible need for terminating the arrangement, term contracts on prescribed contract forms should be used where contractual

agreement is desired and the parties are to be bound.

(c) Each blanket purchase arrangement shall be numbered or otherwise identified in an appropriate manner and shall include reference to the authority of "41 U.S.C. 252(c)(3)."

[36 FR 11647, June 17, 1971, as amended at 42 FR 40204, Aug. 9, 1977]

Subpart 29-3.7-Negotiated Overhead Rates

§ 29-3.705 Procedure.

If the contracting officer has not received an advisory audit report on a proposed contractor, the contracting officer shall request the cognizant audit office to perform or otherwise obtain an advisory audit if the proposed contract is estimated to be $100,000 or more, and the proposed contract includes reimbursement for overhead costs. The contracting officer shall establish provisional or fixed overhead rates not to exceed the rates as set forth in the advisory audit report. The contracting officer shall also insure that the Government receives the benefit of "off-site" overhead rates. The procedures stated herein shall be applicable to grants if required by the Government program plan.

[36 FR 11647, June 17, 1971, as amended at 42 FR 40204, Aug. 9, 1977]

§ 29-3.707 Cost-sharing rates and limitation on overhead cost.

§ 29-3.707-50 Overhead cost ceiling.

(a) The decision for or against the use of overhead ceiling shall be governed by the contracting officer's determination of the Government's best interests, program and cost considered.

(b) A newly organized, "for profit" contractor may have an unusually high rate of overhead type costs incident to starting a business which is usually manifested in an inordinately high ratio of indirect to direct contract costs. Typically, the first contract of a newly formed contractor will absorb as indirect costs, unless the contracting officer imposes a ceiling, the cost of consumable and other sup

plies for which outlays are made by the contractor at an extraordinarily high rate consistent with "start-up” needs.

(c) In those instances where the proposed contractor is a not-for-profit or nonprofit organization and has no alternate source of income to absorb increases in overhead costs after the contract has been negotiated, the contracting officer may consider, in lieu of an overhead ceiling, review-type administrative devices designed to curb extravagant use of indirect costs.

[36 FR 11647, June 17, 1971, as amended at 42 FR 40204, Aug. 9, 1977]

Subpart 29-3.8—Price Negotiation Policies and Techniques

§ 29-3.802 Preparation for negotiation. (a) General. At no time shall a prospective offeror be advised in the Request for Proposals (RFP) or otherwise furnished the Department's cost estimate or the amount of funds, it has available to effect a particular procurement. In addition, RFP's shall avoid any statement which, while not indicating a specific sum, indicates a range within which that sum may be determined. Exceptions to the above policy shall be limited to the extremely unusual circumstance wherein the parameters of a study proposal are necessarily vague. In such case, the Director, Office of Grants, Procurement and ADP Management Policy, OASAM, may authorize the publication in the RFP, or otherwise, an indication of what the Department considers an estimate of either the range in costs or professional labor time (e.g., 2 to 3 work-years) which the contractor will be required to expend to perform the work contemplated. Such range will never be narrowed to the point where the maximum is less than 50 percent more than the minimum. This exception, when authorized, shall be accompanied by suitable language in the form of a disclaimer as to any guarantee of the accuracy of the Department's estimate and inviting proposals, even if they contradict the Department's estimate, with the concomitant assurance that proposals outside the estimated range of the Gov

ernment's estimate will not be rejected solely for that reason.

(b) Request for Proposals. (1) the RFP shall require that that proposal be in two parts; A "Technical Proposal" and a "Business Proposal." Each proposal shall be separate and complete in itself so that evaluation of one may be accomplished independently of and concurrently with the other. The RFP shall provide that the "Technical Proposal" not contain any reference to cost. However, it shall provide that resource information such as data concerning labor hours and categories, materials, subcontracts, travel, and computer time shall be included in the "Technical Proposal" so that the offeror's understanding of the scope of work may be evaluated.

(2) The instructions to the offerors concerning the "Business Proposal" shall require submission of cost information in sufficient detail to allow a complete cost analysis. (See § 1-3.807-3 of this title for requirements for cost or pricing data.) Categories and amounts of labor, materials, travel, and computer time, as well as information with regard to contractor past performance (including contracts or subcontracts for like services or supplies), financial capacity, certifications and representations, and other pertinent administrative and business information should also be requested.

(3) Evaluation criteria must be developed by technical personnel at the time of initiation of the procurement request for inclusion by the contracting officer in the RFP. These criteria and their relative importance or weight require the exercise of judgment on a case-by-case basis, since the criteria must be tailored to the requirements of each particular procurement. These criteria must be submitted to the contracting officer in sufficient time to allow for this review before the issuance of the request for proposals. Since these criteria will serve as the standards against which all proposals will be evaluated, it is imperative that they be chosen carefully to emphasize those factors considered to be critical to the selection of a contractor.

[42 FR 40204, Aug. 9, 1977]

§ 29-3.805-50 Criteria for award.

(a) The RFP must set forth all significant matters which affect the opportunities of suppliers to compete on an equal basis, including any special evaluation factors. Evaluation factors are defined as (1) any minimum standards which will be required with respect to any particular element of the procurement, as well as (2) reasonably definite information as to the degree of importance to be given particular factors in relation to one another. Although a mathematical formula need not be used in the evaluation process, when the numerical rating is used, the RFP must inform the offerors of the major factors to be considered and the broad scheme of scoring to be used.

(b) An example of a mathematical evaluation process is set forth herein. The evaluation factors are examples only and should be changed to meet the particular needs of the individual request for proposals.

CRITERIA FOR AWARD

Prospective suppliers are advised that the selection of an offeror for contract award is to be made after a careful evaluation of the proposals received by a panel of specialists within the Department. Each panelist will evaluate the proposals for acceptability with emphasis on the various factors enumerated below, assigning to that factor a numerical weighting within the range shown for each of these factors. The scores will then be averaged to select an offeror or develop a list of offerors.

Negotiations will be initiated, if necessary, with one or more of the offerors, within the competitive range as the situation warrants, beginning with the head of the list, i.e., the offeror with the highest score, determined by the factors shown below:

ed to achieve a minimum standard of technical excellence at the lowest cost, or whether cost is considered secondary to technical excellence.

(c) Whenever the contract is to have a fixed price, price may not be disregarded in selecting a contractor. This is particularly true where more than one acceptable offer from technically qualified sources remains for consideration after conduct of negotiations. If a lower priced, lower scored offer meets the Government's needs, acceptance of a higher priced, higher scored offer shall be supported by a specific determination by the contracting officer that the technical superiority of the higher priced offer warrants the additional cost involved in the award of a contract to that offeror.

(d) For award of cost-reimbursement contracts, the estimated costs and proposed fees shall not be the controlling factors where offerors are not substantially equal on a technical basis. However, where offerors are substantially equal as to technical ability and resources, the price becomes the controling factor, and the contract should be awarded to the lowest offeror. The award of cost-reimbursement contracts requires procurement personnel to exercise informed judgments as to whether submitted proposals are realistic with regard to proposed costs and technical approaches.

(e) The RFP evaluation criteria shall not be modified except by a formal amendment to the RFP.

[42 FR 40204, Aug. 9, 1977]

§ 29-3.805-51 Evaluation of technical proposals.

(a) The technical proposals received by the contracting officer shall be forwarded to the technical evaluators for evaluation; the business portion of the proposals shall be retained by the contracting officer for evaluation.

(b) The technical evaluators shall evaluate each proposal in strict conformity with the evaluation criteria of the RFP and shall assign each proposal a score. A technical ranking shall then be compiled. The technical evaluators shall then identify each proposal as either acceptable or unaccept

able. Predetermined cutoff scores shall not be employed.

(c) The technical evaluators shall then determine whether any proposal which has been rated as unacceptable might be considered acceptable upon the furnishing of clarifying data by the offeror, and the contracting officer will be so informed. The contracting officer will arrange for the submission of clarifying data in writing or by consultation, and furnish it to the technical evaluators for their consideration.

(d) It is essential to the competitive procurement process that all information contained in offerors' proposals be maintained in strict confidence. In no event, during the evaluation period, shall any offeror be told the number of proposals received, prices, cost ranges, or the Government cost estimate. Discussions with offerors relative to any aspect of the procurement shall be held only with the contracting officer or his authorized representative.

(e) A technical evaluation report shall be prepared and signed by the technical evaluators, furnished to the contracting officer, and maintained as a permanent record in the contract file. The report shall reflect the scoring of each proposal and the ranking of the proposals, and shall identify each proposal as acceptable or unacceptable. The report shall also include a narrative evaluation specifying the strengths and weaknesses of each proposal, and any reservations or qualifications that might bear upon the selection of sources for negotiation and award. Concrete technical reasons supporting a determination of unacceptability with regard to any proposal shall be included.

[42 FR 40205, Aug. 9, 1977]

§ 29-3.805-52 Competitive range.

The competitive range consists of the proposals of those offerors, which, based either on an evaluation by a mathematical formula or by other means, are grouped more or less at the same level and are competitive with one another. In all cases it is important that the criteria used in establishing a competitive range be meaningful and realistic and in no way arbitrary.

firms which are not within a competitive range is a matter of administrative discretion which must be exercised in a reasonable manner. A determination of the limits of the competitive range requires the comparison of each proposal against the other proposals. Therefore, there is no way to predetermine the number of or percentage of proposals that will be competitive with one another. The limits of what constitutes competitive range in a particular case is a judgment matter for determination by the contracting officer. Such discretion will be reasonable and justified and shall not be exercised in an arbitrary or capricious manner.

[42 FR 40205, Aug. 9, 1977]

§ 29-3.805-53 Conduct of discussions.

(a) In accordance with § 1-3.805-1(a) of this title, where discussions or other negotiations are to be conducted, the contracting officer must negotiate regarding the work to be performed, the cost or price of the work, and other relevant topics with all those offerors within the competitive range.

(b) The contracting officer shall point out to each such offeror the ambiguities, uncertainties, and deficiencies, if any, in its proposal. This official shall give each offeror a reasonable opportunity (with a common cutoff date for all) to support, clarify, correct, improve, or revise its proposal. Discussions with one offeror will not identify areas in which another has apparently achieved a higher evaluation or provided more detail. Nor will information be transmitted by the Government which could give one offeror a competitive advantage over another. Cost estimates made by the Government will not be disclosed.

(c) Careful judgment will be exercised in determining the extent of discussions. In some cases, good business practice may require more than one round of discussions with all of the offerors within the competitive range. The time available, the expense and administrative limitations, and the size and significance of the procurement should all be considered in deciding on the type, duration, and depth of the discussions.