and notices of award; contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for the issuance of job orders, task orders or task letters thereunder; letter contracts, letters of intent, and purchase orders. It also includes amendments and supplemental agreements with respect to any of the foregoing. [25 F.R. 14081, Dec. 31, 1960]

§ 1.201-5 Department and Military Department.

Department and Military Department include the Department of the Army, the Department of the Navy, the Department of the Air Force, the Defense Supply Agency, the Defense Communications Agency, and the Defense Atomic Support Agency. [30 F.R. 5960, Apr. 29, 1965]

§ 1.201-6

Department of Defense.

"Department of Defense" comprises the Office of the Secretary of Defense and the military departments. [25 F.R. 14081, Dec. 31, 1960]

§ 1.201-7 Head of a procuring activity.

"Head of a procuring activity" includes, for the Army, the chiefs of the technical services, the Zone of Interior Army commanders, the Chief of the National Guard Bureau, the Commanding General of the Military District of Washington, U. S. Army and the commanding generals of the major oversea commands; for the Navy, the Chief of each Bureau, the Chief of Naval Research, the Aviation Supply Officer, the Commander, Military Sea Transportation Service, and the Commandant of the United States Marine Corps; for the Air Force, the Commander, Air Materiel Command. It also includes the Executive Director of the Military Medical Supply Agency, the Executive Director of the Military Petroleum Supply Agency, and the head of any other procuring activity hereafter established. The number and designation of Heads of Procuring Activities within any military department may be changed by directive of the Secretary.

[25 F.R. 14081, Dec. 31, 1960]

§1.201-8 Includes.

"Includes" means "includes but is not limited to."

[25 F.R. 14081, Dec. 31, 1960]

"Possessions" in a geographic sense includes the Virgin Islands, the Canal Zone, Swan Islands, Guantanamo Bay, Johnston Island, American Samoa, Guam, Wake Island, Midway Island, and the guano islands but does not include Puerto Rico, leased bases, occupiedJapanese islands, or trust territories. [28 F.R. 4881, May 16, 1963]

§ 1.201-13 Procurement.

Procurement includes purchasing renting, leasing, or otherwise obtaining supplies or services. It also includes all functions that pertain to the obtaining of supplies and services, including description but not determination of requirements, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration.

[29 F.R. 6912, May 27, 1964] § 1.201-14

Procuring activity.

Procuring activity includes for the Army: U.S. Army Materiel Command and its subordinate commands; U.S. Continental Army Command and the Zone of Interior Armies; U.S. Army, Alaska; U.S. Forces Southern Command; U.S. Army Communications Zone, Europe; U.S. Army, Hawaii; U.S. Army, Japan; Military District of Washington, U.S. Army; National Guard Bureau; Office of the Chief of Engineers; Strategic Communications Command; Office of the Chief of Support Services; Office of The Surgeon General; U.S. Army Security Agency; and Military Traffic Management and Terminal Service; for the Navy: each Bureau, the Office of Naval Research, the Navy Aviation Supply Office, the Military Sea Transportation

Service, and the United States Marine Corps; for the Air Force: the Air Force Logistics Command and the Air Force Systems Command; for the Defense Supply Agency: the Office of the Deputy Director for Contract Administration Services; the Office of the Executive Director, Procurement and Production; the Defense Supply Centers; and the Defense Personnel Support Center; for the Defense Communications Agency: The Headquarters, Defense Communications Agency, and the Defense Commercial Communications Office; for the Defense Atomic Support Agency: Headquarters, Defense Atomic Support Agency. also includes any other procuring activity hereafter established. The number and designation of particular procuring activities of any Military Department may be changed by directive of the Secretary.

[30 F.R. 11997, Sept. 21, 1965]

§1.201-15 Secretary.

It

"Secretary" means the Secretary, the Under Secretary, or any Assistant Secretary of any Military Department. Secretary shall also include the Director and Deputy Director of the Defense Supply Agency, the Director of the Defense Communications Agency, and the Director, Defense Atomic Support Agency, except to the extent that any law or executive order limits the exercise of authority to persons at the Secretarial level. In the latter situation, such authority shall be exercised by the Assistant Secretary of Defense (Installations and Logistics.). [30 F.R. 5961, Apr. 29, 1965] §1.201-16 Shall.

"Shall" is used in an imperative sense. [25 F.R. 14081, Dec. 31, 1960]

§ 1.201-17 Small business concerns. See § 1.701-1.

[25 F.R. 14081, Dec. 31, 1960]

§1.201-18 Supplemental agreement.

"Supplemental agreement" means any contract modification which is accomplished by mutual action of the parties (see § 16.815-2 of this chapter). [30 F.R. 14071, Nov. 9, 1965]

§ 1.201-19 Supplies.

Supplies means all property except land or interests in land. It includes public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description,

See § 18.101-1 of this chapter. [30 F.R. 5961, Apr. 29, 1965]

§ 1.201-22 Classified procurement.

Classified procurement is that which requires access to classified information ("Confidential", including "Confidential-Modified Handling Authorized”, or higher) either to submit a bid or proposal or to perform the contract or that which because of other considerations should not be publicly disclosed; see § 1.320. [28 F.R. 12546, Nov. 23, 1963] §1.201-23 Designee.

"Designee," as used, for example, in the phrase, "Head of a Procuring Activity or his designee", may include one or more officials.

[29 F.R. 14816, Oct. 31, 1964] § 1.201-24

Purchasing office.

by individual assignment to a contract administration office.

[30 F.R. 11997, Sept. 21, 1965] §1.201-27 Transfer of a contract.

"Transfer of a contract" means that process whereby all future responsibility for a contract held by an individual or office is transferred, in writing by proper authority, to another office to take action necessary to carry out the responsibility transferred.

[30 FR. 11997, Sept. 21, 1965]

Subpart C-General Policies § 1.300 Methods of procurement. [25 F.R. 14082, Dec. 31, 1960]

All procurements, whether by formal advertising or by negotiation, shall be made on a competitive basis to the maximum practicable extent.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.300-2 Formal advertising.

Purchases and contracts for supplies and services shall be made by formal advertising in all cases in which the use of such method is feasible and practicable under the existing conditions and circumstances. Procurement by formal advertising shall be in accordance with detailed requirements and procedures set forth in Part 2 of this subchapter. [25 F.R. 14082, Dec. 31, 1960]

§ 1.300-3 Negotiation.

If the use of formal advertising is not feasible and practicable, purchases and contracts for supplies and services may be negotiated in accordance with the detailed requirements and procedures set forth in Part 3 of this subchapter. [25 F.R. 14082, Dec. 31, 1960]

§ 1.301 Interdepartmental and coordinated procurement.

Supplies and services may be obtained in appropriate circumstances as provided in Part 5 of this subchapter by such means as interdepartmental and coordinated procurement.

[25 F.R. 14082, Dec. 31, 1960] § 1.302

ices.

Sources of supplies and serv

[27 F.R. 11644, Nov. 27, 1962]

§ 1.302-1 Existing government assets. To the extent possible, supplies shall be obtained from releasable assets of the

Department of Defense or from surplus or excess stocks in the hands of any other Government agency. Personnel responsible for issuing purchase requests shall insure compliance with policies pertaining to the utilization of existing Department of Defense material assets, as set forth in the Defense Utilization Manual (DSAM 4140.1) (AFM 67-11) (AR 1-38) (MCO P7020.5A). All purchase requests involving estimated expenditures of $50 or more for items centrally managed at inventory control points will be appropriately annotated with a statement to the effect that Department of Defensewide review of assets has been initiated or completed, as appropriate, in compliance with the Defense Utilization Manual. This procedure is not applicable to automated procurements where procedures have been established under the automated system for a review of assets in accordance with DSAM 4140.1. In addition, this procedure is not applicable to subsistence, bulk petroleum, and medical drugs, as presently provided or later modified in that manual, or to such other items as may be added thereto. Interdepartmental purchases shall be accomplished in accordance with the provisions of Part 5 of this chapter. [30 F.R. 1729, Feb. 9, 1965] § 1.302-2

ment.

Sources outside the Govern

Irrespective of whether the procurement of supplies or services from sources outside the Government is to be effected by formal advertising or by negotiation, competitive proposals ("bids" in the case of procurement by formal advertising, "proposals or quotations" in the case of procurement by negotiation) shall be solicited (see Subpart J of this part) from all such qualified sources of supplies or services as are deemed necessary by the contracting officer to assure such full and free competition as is consistent with the procurement of types of supplies and services necessary to meet the requirements of the military department concerned, and thereby to obtain for the Government the most advantageous contract-price, quality, and other

of concerns (1) who have associated together for the purpose of obtaining and performing jointly, or in conjunction with each other, contracts for supplies or services, or for research and development, for Defense use (2) who have entered into a pool agreement governing their organization, relationship, and procedure, and (3) whose agreement has been approved either in accordance with section 708 of the Defense Production Act of 1950, as amended (Defense Production Pool) or in accordance with sections 9(d) or 11 of the Small Business Act, P.L. 85-536 (Small Business Pools). Pool participants are exempt from the "manufacturer or regular dealer" requirement of the Walsh-Healey Public Contracts Act. (See Subpart F of Part 12 of this subchapter.) Information on types of small business production pools, their purpose, and procedures for establishing such pools and for securing their approval by the Small Business Administration (SBA) is contained in the SBA publication "Small Business Production Pools for Defense".

(b) General rule. Except as provided in this section, a pool shall be treated for purposes of Government procurement on exactly the same basis as any other prospective or actual contractor.

(c) Ascertainment of status. The contracting officer is responsible for ascertaining whether a group of firms seeking to do business with the Government is a pool. In ascertaining the status of a group representing that it is a pool, contracting officers may rely on a copy of the SBA or Office of Emergency Planning (OEP) notification of approval of the pool. If the contracting officer has any question as to whether a given pool has been approved, he shall consult the regional office of the SBA. Each department will expeditiously disseminate to contracting officers information received from SBA or OEP concerning the approval of pools.

(d) Contracting with pools. (1) A bid or proposal of a pool is not eligible for award to the pool unless submitted either by the pool in its own name or by an individual member expressly disclosing that it is on behalf of the pool. Except as to contracts to be awarded to incorporated pools, the contracting officer shall prior to award to a pool require to be deposited with him a certified copy of

a power of attorney from each member of the pool who is to participate in the performance of the contract authorizing an agent to execute the bid, proposal, or contract on behalf of such member. A copy of each such power of attorney shall be appended to each executed copy of the contract retained by the Government.

(2) Membership in a pool shall not of itself preclude individual members from submitting bids or proposals as individuals on appropriate procurements. Bids or proposals submitted by an individual member of a pool shall not be considered when the individual member has participated in the bid or proposal submitted by the pool.

(e) Responsibility of pool member. Where a member of a production pool has submitted a bid or proposal in its own name and not on behalf of a pool, the pool agreement shall be a factor to be considered in determining its responsibility pursuant to Subpart I of this part.

(f) Small business status. Approval of an organization as a defense production or research and development pool under the Defense Production Act of 1950, as amended, does not confer upon such pool the preferences and privileges accorded to "small business concerns". Such preferences and privileges shall be accorded only to those pools which have been approved under the Small Business Act, Public Law 85-536, as amended. [28 F.R. 12546, Nov. 23, 1963, as amended at 29 F.R. 14816, Oct. 31, 1964]

§ 1.302-4 Foreign purchases.

Foreign purchases shall be made in accordance with the provisions of Part 6 of this title and upon compliance with any other applicable provisions of the subchapter.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.302-5 Planned emergency producer.

A "Planned Emergency Producer" is a concern with which one or more Government procuring activities have negotiated an emergency production assignment and which holds a valid planned emergency production schedule signed by the responsible Armed Services Procurement Planning Officer (ASPPO). In procurements of items for which there are planned emergency producers, such producers shall be solicited.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.302-6 Contracts between the Government and its employees or business organizations substantially owned or controlled by Government employees.

(a) Contracts shall not knowingly be entered into between the Government and employees of the Government or business organizations which are substantially owned or controlled by Government employees, except for the most compelling reasons, such as cases where the needs of the Government cannot reasonably be otherwise supplied.

(b) When a contracting officer has reason to believe that an exception as described in paragraph (a) of this section should be made, approval of the Head of a Procuring Activity shall be obtained prior to entering into any such contract.

[27 F.R. 8869, Sept. 6, 1962]

(a) Where the same item or class of items is being purchased by more than one Department, or by more than one procuring activity within a Department, the exchange and coordination of pertinent information, particularly cost and pricing data, between these Departments or procuring activities is necessary to promote uniformity of treatment of major issues and the resolution of particularly difficult or controversial issues. Such exchange and coordination of information is particularly beneficial during the period of procurement planning, presolicitation, evaluation, and preaward survey.

(b) Where substantial purchases of major items are involved or where the purchasing activity deems it desirable, it shall request appropriate information (on both the end item and on major subcontracted components) from other purchasing activities responsible for buying similar items. Each activity receiving such requests shall furnish the information requested. The contracting officer, early in a negotiation of a contract, or in connection with the review of a subcontract, shall request the contractor to furnish information as to the contractor's or subcontractor's previous Government contracts and subcontracts for the same or similar end items and major subcontractor components. [27 F.R. 11644, Nov. 27, 1962]

§ 1.304 Selection of items involving data subject to limited rights or other restrictive factors.

In some cases, the procurement of an item would involve data subject to limited rights (see § 9.201(b) of this chapter) or other factors which would restrict sources of procurement or limit competition, but alternative items can be procured which would meet the military needs involved. In such cases, consideration should be given in selecting the item to be procured, to the relative advantages for national defense purposes of the item which involves such data subject to limited rights or other factors as against the disadvantages of a restricted source of supply and possible increased cost to the Government because of lack of competition. However, where a particular item best meets military needs, the contracting activity should not refrain from procuring the item solely because it would involve such restrictions or limitations. [30 F.R. 6965, May 25, 1965]

§ 1.305 Time of delivery or perform

(a) The time of delivery or performance is an essential element for inclusion in a contract and must be clearly set forth in invitations for bids and requests for proposals. Delivery and performance schedules shall be designed to meet the requirements of the particular procurement, with due regard to all relevant factors, and must be realistic. Delivery and performance schedules which are unreasonably tight or difficult of attainment are inimical to full competition, inconsistent with small business policies (see § 1.702(b) (6)), and may result in higher contract prices. Therefore, prior to issuing an invitation for bids or request for proposals, the contracting officer shall question any delivery requirement which appears unrealistic, and, if necessary, initiate action to make appropriate adjustments, with due attention to relevant factors such as applicable transportation factors (see