(c) This subpart shall not be construed to authorize: (1) The procurement of personal property when such procurement is not otherwise authorized by law; (2) The procurement of personal property in contravention of (i) Any restriction upon the procurement of a commodity or commodities; or (ii) Any replacement policy or standard, prescribed by the President, the Congress, the Secretary of Defense, or by the Administrator of General Services Administration; (3) Procurement of personal property directly from a vendor when its acquisition through General Services Administration (GSA) sources is required under Subparts A, B, or C, Part 5 of this chapter (Federal Supply Schedule contracts, GSA Stores Depots, and Consolidated Purchasing Program; respectively). However, in acquiring an item or items from GSA sources in accordance with those subparts, the exchange allowance for, or proceeds from the sale of, similar items may be applied in whole or in part payment for the items being acquired; (4) The sale, transfer, or exchange of excess, surplus or foreign excess personal property in connection with the procurement of personal property even though otherwise eligible; (5) The sale or exchange of strategic and critical materials, unless such materials at any one location are in lots of less than the minimum quantities specified in Part 3, Chapter XV, of the Defense Disposal Manual (DoD 4160.21M) and the owning agency determines that there is no reasonable prospect of accumulating minimum quantities specified therein within 12 months; (6) The sale or exchange of Atomic Energy Commission-controlled materials except in accordance with applicable regulations of the Atomic Energy Commission (see 10 CFR Parts 30, 40, and 70); (7) The sale or exchange of narcotics, except in accordance with instructions contained in Part 3, Chapter XV, of the Defense Disposal Manual; (8) The sale of personal property in new or unused condition in connection with the procurement of personal property; (9) The sale or exchange of scrap materials in connection with the procurement of personal property; (10) Even though otherwise eligible, the sale or exchange of property which was originally acquired from another agency as excess or surplus, unless such property has been placed in use by the acquiring agency for at least 1 year. (d) This subpart does not apply to materials in the national stockpile (50 U.S.C. 90-98h), the supplemental stockpile (7 U.S.C. 1704(b)), or the Defense Production Act inventory (50 U.S.C. App. 2093). [34 F.R. 13841, Aug. 29, 1969] § 4.205-1 Offering property for ex (a) The objective shall be to obtain the maximum return to the Government from property sold or exchanged. Both cash and exchanged (trade-in) bids shall be solicited in each instance, except that: (1) Items may be exchanged without solicitation of bids when the personal property sought may be procured without solicitation of bids under applicable laws and regulations; (2) Cash bids need not be solicited when the items to be sold or exchanged may be disposed of without solicitation of bids under applicable laws and regulations; (3) Only one type of bid (cash or trade-in) need be solicited when recent solicitation for identical items has produced only that type of offer indicating the futility of further soliciting any other type of offer. (Since market conditions frequency change, tests should be made at reasonable intervals to ascertain the appropriateness of the continued use of the one type solicitation.); (4) Only one type of bid (cash or trade-in) need be solicited when solicitation for the other type of bid has proven clearly ineffective in reducing the cost of the acquisition; e.g., by reason of the commercial practice with respect to exchange or sale of such items (Test should be made at reasonable intervals to determine whether the use of the authority contained in this subparagraph may be continued.); (5) Only one type of bid (cash) need be solicited when used vehicles are disposed of for replacement purposes under a consolidated vehicle purchase program. (b) The following notation shall be included in the solicitation. The property described in items number is being offered in accordance with the exchange/sale provisions of the section 201(c) of the Federal Property and Administrative Services Act of 1949, 63 Stat. 384 (40 U.S.C. 481(c)). (c) Appropriate terms and conditions prescribed in Part 3, Chapter VII of the Defense Disposal Manual shall be included in the solicitation prefaced by a statement that such terms and conditions shall apply only as to any items for which cash bids or offers are made as distinguished from bids or offers of a tradein allowance. (d) If property located in a foreign country is offered for exchange/sale, the contracting officer shall comply with Chapter XVI of the Defense Disposal Manual in effecting any exchange/sale of such foreign property. (e) A minimum of 14 calendar days should be allowed in continental United States for the inspection of property being offered for exchange/sale. For sales outside continental United States, the minimum inspection period should normally be 21 calendar days. (f) The contracting officer may secure a bidders list, for use in connection with exchange/sale solicitations from the Defense Surplus Bidders Control Office at Defense Logistics Services Center. § 4.205-2 Purchase request and certifi cate. In connection with a procurement involving exchange/sale, the purchase request must be accomplished with a certificate stating that: (a) The property is eligible for exchange/sale within the terms of applicable statutes and regulations and specifying the restrictions and limitations on the offer for exchange/sale; (b) The property has been offered to Federal agencies known to use or distribute such property and such agencies have not requested a transfer to them; (c) The property has been rendered innocuous or demilitarized to the extent required by applicable regulations; and (d) A written determination has been made to apply the exchange allowances or proceeds of sale in procuring the items covered by the purchase request. § 4.205-3 Sale of exchange/sale property. A "sale" of exchange/sale property occurs when cash, as distinguished from a trade-in allowance, is received for such property. When, pursuant to criteria in §4.205-1(a) (3), (4), or (5), cash bids only are to be obtained for exchange/sale property, the sale of such property, properly designated as exchange/sale property (see § 4.205-1(b)), will be arranged with the disposal officer (not with the procuring contracting officer), in accordance with the Defense Disposal Manual. Proceeds will be handled as indicated in § 4.205-5. § 4.205-4 Exchange of exchange/sale property. (a) The normal procedure applicable to a procurement coupled with an exchange/sale transaction is formal advertising (also referred to in § 4.205-1 as "solicitation of bids"); however, exchange/sale property may be listed for exchange on a negotiated procurement in the same solicitation which seeks proposals on the new (replacement) items being procured. (b) If purchase of the new items is to be formally advertised (and except as provided in § 4.205-1(a)), each solicitation listing exchange/sale property, in addition to asking for prices for the new items being procured, shall ask for offers in terms of either cash or exchange (trade-in allowance) for the exchange/ sale property listed. Also the solicitation in such cases should provide for award(s) on the basis or bases resulting in the best overall arrangement for the Government. Examples: If the lowest net price to the Government of the items to be procured (i.e., the price of the new items less the amount offered for the exchange/ sale items either in cash or trade-in) results from an offer by a supplier of the new items who agrees to accept the exchange/sale items as a trade-in, a single award would be made which would cover both the acquisition by the Government of the new items and the disposal of the exchange/sale items by trade-in. If the lowest net price to the Government results from combining a low offered price from a supplier of the new items, and a high cash offer from a different offeror to purchase the exchange/sale items, two awards would be made-one for acquisition of the new items, and the other for sale of the exchange/sale property. (c) If new items are to be acquired by negotiation under proper application of an authority set forth in §§ 3.201 through 3.217 of this chapter (10 U.S.C. 2304(a) (1) through (17)), exchange/ sale property will be offered for exchange only (i.e., application of a trade-in allowance to the purchase price). Such Proceeds from sales of exchange/sale property which are transacted by a disposal officer will be handled as prescribed in Part 3, Chapter XI, paragraph I-3 of the Defense Disposal Manual. Such proceeds can then be used to apply to the acquisition of the new (replacement) items. Proceeds received by the procuring or administrative contracting officer from sale of exchange/sale property disposed of by the PCO or the ACO pursuant to this subpart shall be turned over to the appropriate finance officer properly identified as proceeds from exchange/sale property so that they may be applied to the purchase of new replacement items. Subparts C Through D-[Reserved] Subpart E-Procurement by BarterCommodity Credit Corporation SOURCE: The provisions of this Subpart E appear at 30 F.R. 12002, Sept. 21, 1965, unless otherwise noted. General. § 4.501 Except as provided in § 4.506, this subpart applies to procurement of supplies, services, and construction, for use outside the United States (see § 6.001 (c)). It applies to all purchasing offices, whether located inside or outside the United States. Except as stated in § 4.503, it affects only those procurements that are not required by applicable balance of payments directives to be restricted to United States end products, United States services, or United States concerns. In those instances where the determination has been made to procure a foreign end product offshore, each Military Department shall place such procurement by barter to the maximum Procedures for procurement by barter are set forth below. These procedures are also authorized for use when a purchasing office elects to utilize barter in connection with procurement of a foreign end product (see §§ 6.001(a) and 6.101 (a) and (c) of this chapter) from sources (contractors) within the United States for use outside the United States in anticipation of or in connection with authorization for foreign end product purchase under applicable balance of payment directives. In such instances, these procedures shall be used as a guide, adapted to the extent appropriate for the particular procurement. [32 F.R. 12098, Aug. 23, 1967] § 4.503-2 Steps one-susceptibility to 2. Proposals will be requested in the following countries 3. Estimated total dollar value 4. Performance period: (Date) to (date). 5. No requirement exists for restriction to U.S. end products, services or sources. Advise ASAP whether susceptible to barter. [34 F.R. 17890, Nov. 5, 1969] § 4.503-4 Step three-preliminary determination by CCC. The CCC will determine whether the procurement is susceptible to barter and will reply promptly, normally within five working days after receipt of the inquiry. If timely reply is not received from the CCC, the purchasing office may make further inquiry of the CCC, or proceed with cash (non-barter) procurement. When the CCC finds that a procurement is susceptible to barter, it will distribute to United States firms who are barter contractors (i.e. firms which have had barter contracts with the CCC for the export of surplus agricultural commodities) a notice entitled "Proposed Offshore Military Procurements Approved by the CCC as Susceptible to Barter." This notice will contain (a) the information furnished the CCC in Step Two, (b) the name and address of the cognizant purchasing office, and (c) an invitation to contact potential military suppliers through the purchasing office, so as to negotiate the necessary private arrangements between barter contractors and potential military suppliers. Notwithstanding the provisions of § 2.205-5, upon request of a barter contractor, the interested purchasing activity will furnish to him a list of the names and addresses of those potential suppliers to whom an invitation for bids or request for proposal has been sent. 1692), which authorize the disposal by barter or exchange of surplus agricultural commodities for use outside the United States, its possessions and Puerto Rico. (2) If you submit a bid or proposal on a barter basis which is accepted, the mechanism of barter herein contemplated does not require an exchange of your product or service for surplus agricultural commodities of the United States to be delivered to you. Payments by the United States on contracts awarded pursuant to this solicitation will be assigned by you to the Commodity Credit Corporation, and paid over to the Commodity Credit Corporation as earned under your contract. Provision for payments to you will be made by separate agreement between you and a barter contractor who will have informed the Commodity Credit Corporation of its willingness to enter into a barter contract with the Commodity Credit Corporation for the export of surplus United States agricultural commodities. (3) Enclosed for your information is a listing from the Commodity Credit Corporation, entitled "U.S. Firms Which Have Been Barter Contractors," attached to which is a list entitled "U.S. Firms Which Have Been Agricultural Commodity Agents of Barter Contractors." * (4) To make a bid or proposal involving barter, you will need to have an agreement with a United States firm (barter contractor) acceptable to the Commodity Credit Corporation, specifying the terms, conditions and amounts of payments to you, and identifying the barter contractor's disposal fee, stated as a percentage of the total price of your barter proposal responding to this solicitation. You will need to obtain competitive proposals from at least two barter contractors, since the Commodity Credit Corporation requires assurance that a barter contractor's disposal fee has been arrived at on a competitive basis. The Commodity Credit Corporation will not recognize any fee or other charge to be paid to intermediaries between you and a barter contractor, such as brokers or agents. It is obviously in your interest to negotiate a low disposal fee. (5) A barter bid or proposal offers possible advantages to you as a United States Government Contractor. The possible advantages to be derived from your agreement with a barter contractor include lower cost of financing your performance, more rapid payment, and payment in a currency of your choice. You may also receive the benefit of a preference for barter under the circumstances described in (6) below. (6) It is requested that your bid or proposal be submitted in the alternative, with one price on a barter basis and an alternative *Alternatively, if the above lists have been furnished by a purchasing office to potential suppliers, reference may be made to the previous transmittal, without redistribution. Purchasing offices which have not received these listings, may obtain them on request to the Commodity Credit Corporation. price on a non-barter basis. However, alternate bids or proposals are not required, and consideration will be given to bids or proposals limited to either cash or barter. (7) All bids or proposals shall be submitted directly to the purchasing office which has Issued the invitation for bids or request for proposals. All proposed prices shall be stated in dollars and not in terms of quantities of surplus agricultural commodities. (8) The lowest bid or proposal on a barter basis acceptable to the Commodity Credit Corporation will be considered and evaluated by the purchasing office in connection with the evaluation of non-barter bids or proposals received hereunder. For the purpose of evaluating prices, the total price on a barter basis, excluding any amount in excess of the non-barter price which is attributable to the barter arrangement and is to be absorbed by the Commodity Credit Corporation. shall be compared with the lowest total price on a non-barter basis. Where the net barter price is equal to or less than the non-barter price, and all other terms are deemed equally advantageous to the United States, preference shall be given to the barter bid or proposal; except that when the non-barter price offered by a supplier located in the United States is equal to or less than the unadjusted barter price, preference shall be given to the non-barter bid or proposal (such preference to United States suppliers extends only to United States supplies and services). (9) As a condition of award to you on a barter basis, you will be required to assign irrevocably to the Commodity Credit Corporation the right to receive all moneys due and to become due under the contract, and to furnish a copy of such assignment to the Contracting Officer. This assignment is to be made pursuant to the clause of the contract entitled Assignment of Claims and notwithstanding any language to the contrary contained therein. The contract awarded on a barter basis will contain a provision reciting the irrevocable assignment to the Commodity Credit Corporation of the Contractor's claims for payment. Pursuant to that assignment, amounts earned and billed by you under the contract will be paid to the Commodity Credit Corporation. Assignments must be duly authorized and executed, in form and substance acceptable to the Commodity Credit Corporation. The assignment is to be in connection with arrangements between the Commodity Credit Corporation and a responsible barter contractor, for delivery and disposal of United States surplus agricultural commodities, and in consideration of the private arrangement between that barter contractor and your firm regarding payments to you. However, if this solicitation specifies that only a portion of the items or services will be on a barter basis, the assignment of amounts earned under the contract will be limited to that part of the contract which is on a barter basis. [30 F.R. 12002, Sept. 21, 1965, as amended at 32 F.R. 12098, Aug. 23, 1967] § 4.503-6 Step five-review of bids or proposals-negotiations. After receipt and review of bids or proposals and completion of any negotiations that may be appropriate, further action will be taken in conformity with the solicitation statements of step four. § 4.503-7 Step six-further informa. tion to the CCC. The purchasing office shall furnish the following by telegraphic communication to the CCC prior to contract award: (a) Name and address of potential supplier who has submitted lowest acceptable barter bid or proposal; (b) Amount of that barter bid or proposal; (c) Source country or countries from which military supplies will be furnished on that barter bid or proposal; (d) Name and address of the United States barter contractor designated by the potential military supplier, and the United States barter contractor offering next lowest barter cost and amount (percentage) of such cost; and (e) Name and address of supplier who has submitted lowest acceptable cash (non-barter) bid or proposal, and the amount of that proposal. § 4.503-8 Step seven-the CCC action. Within five working days after receipt of the message in step six, the CCC will reply, indicating approval or rejection of the barter bid or proposal. Approval reply will indicate: (a) The amount of barter cost, if any, to be absorbed by CCC; and (b) The designated barter contractor to act as principal in executing the surplus agricultural commodity contract with CCC. If the CCC does not make timely reply, or if the CCC rejects the barter proposal, or if the CCC reply does not agree that CCC will absorb the price differential by which the low barter bid or proposal exceeds the low non-barter bid or proposal, the contracting officer may award on a cash (non-barter) basis. However, if the contracting officer considers that time permits further effort to procure on a barter basis, he may ask the CCC to seek other competitive disposal fee offers from barter contractors. Upon such request, the CCC will issue solicitations for competitive disposal fee offers, with the understanding that approval by the CCC will be subject to the making of a private |