See 10 CFR Part 9, Public Records, for regulations relating to the availability of AEC records to the public.

§ 9-3.150 Treatment of proposal information.

[35 F.R. 14653, Sept. 19, 1970] § 9-3.150-1 General.

It is the general policy of AEC to use information contained in proposals only for evaluation purposes except to the extent such information is generally available to the public, is already the property of the Government or the Government already has unrestricted use rights, or is or has been made available to the Government from other sources, including the proposer, without restriction. As a practical matter, AEC cannot assume any responsibility for disclosure or use of any such information unless it is identified by the proposer in accordance with this section. AEC will not refuse to consider an unsolicited proposal, or a solicited proposal unless the solicitation specifies otherwise, merely because the proposal is restrictively marked. (See also Subparts 9-4.51 and 9-4.52, and 10 CFR Part 9.)

[35 F.R. 14653, Sept. 19, 1970]

§ 9-3.150-2 Proprietary data.

A proposal may, unless the solicitation specifies otherwise in the case of a solicited proposal, include proprietary data which the proposer does not want disclosed to the public or used by the Government for any purpose other than proposal evaluation. Such proprietary data must be specifically identified and marked as such on every page where it may be contained, in which event it will be used only for proposal evaluation purposes unless it is within the exception set forth in § 9-3.150-1. In such cases, the data so identified and marked will not be otherwise used or disclosed without the proposer's written permission, except to the extent it is within the exception in § 9-3.150-1 or as provided in any resulting contract.

[35 F.R. 14653, Sept. 19, 1970]

This proposal shall be used, or duplicated, only for AEC evaluation purposes and this notice shall be applied to any reproduction or abstract thereof. Disclosure of this proposal outside the Government for AEC evaluation purposes shall not be made unless the provisions of AEC Procurement Regulation 9-3.150-5 are followed. The restrictions contained in this notice do not apply to any data or business information contained in this proposal if it is already generally available to the public, is already available to the Government on an unrestricted basis or is the property of the Government, or is or becomes available from another source, including the proposer, without restriction.

[35 F.R. 14653, Sept. 19, 1970]

§ 9-3.150-5 Disclosure outside Govern

ment.

(a) Policy. It is the policy of AEC to have proposals evaluated by the most competent persons available in Government and contractor organizations operating and managing AEC facilities. In addition, AEC frequently meets its evaluation needs by having proposals reviewed by evaluators outside the Government (or contractor organizations operating and managing AEC facilities). Such latter outside evaluations may be made:

(1) Of research proposals from educational and other appropriate not-forprofit institutions pursuant to § 94.5106-3, provided any proposal which

expressly indicates that only Government evaluation is authorized shall not be disclosed without the proposer's written consent.

(2) Of other proposals, provided the requirements in (b) and (c) below are met.

(b) Approval. Decisions in AEC Headquarters to evaluate proposals covered by § 9-3.150-5(a)(2) outside the Government (or contractor organizations operating and managing AEC facilities) for AEC evaluation purposes shall be made by the responsible program Division Director, and in AEC field offices by the Field Office Manager. Such decisions shall take into consideration AEC requirements for avoidance of organizational conflicts of interest set forth in Subpart 9-1.54 and the competitive relationship, if any, between the proposer and the prospective outside evaluator. In addition, if the proposal under consideration expressly indicates that only Government evaluation is authorized and evaluation outside the Government is nevertheless desired, the proposer should be advised that AEC may be unable to give full consideration to the proposal unless the proposer consents in writing to having the proposal evaluated outside the Government.

(c) Agreement with evaluator. Where it is determined pursuant to § 9-3.1505(b) to evaluate a proposal outside the Government (or contractor organizations operating and managing AEC facilities) the following agreement, or an equivalent arrangement for the treatment of the proposal, shall be obtained from the outside evaluator before AEC furnishes a copy of the proposal to such person. In addition, care should be taken that the note required by § 9-3.150-4 is affixed to the proposal before it is disclosed to the evaluator.

CONDITIONS FOR EVALUATING PROPOSALS Whenever AEC furnishes a proposal for evaluation, the recipient agrees to use the information contained in the proposal only for AEC evaluation purposes. This requirement does not apply to information obtainable from another source, including the proposer, without restriction. Any notice or restriction placed on the proposal by either AEC or the originator of the proposal shall be conspicuously affixed to any reproduction or abstract thereof. Upon completion of the evaluation, the recipient shall return all copies of the proposal and abstracts, if any, to the AEC office which initially furnished the proposal for evaluation. Unless authorized

by the AEC initiating office, the recipient shall not contact the originator of the proposal concerning any aspect of its contents. [35 F.R. 14653, Sept. 19, 1970]

Subpart 9-3.2-Circumstances
Permitting Negotiation

§ 9-3.200 Scope of subpart.

Section 302(c) of the Federal Property and Administrative Services Act of 1949, as amended, authorizes the negotiation of contracts, and is applicable to AEC procurement. Section 302(c) (15) of the Federal Property and Administrative Services Act of 1949, as amended, permits negotiation when otherwise authorized by law, provided that in such event the requirements of that Act shall apply. Accordingly when the Federal Property and Administrative Services Act of 1949, as amended, or the Atomic Energy Act of 1954, as amended, or other law is used as the basis for negotiation, the requirements of section 304 of the Federal Property and Administrative Services Act of 1949, as amended, are applicable, except as provided in these regulations. [Reserved]

§ 9-3.202 § 9-3.204 ices. Formal advertising procedures shall not be used for contracts for architectengineer or other professional engineering services. Such contracts may be negotiated under section 302(c) (4) of the Federal Property and Administrative Services Act of 1949, as amended, or section 302(c) (15) of that Act and the Atomic Energy Act of 1954, as amended. However, the exemption provided for in § 9-3.405-5 (c) does not apply to contracts negotiated under section 302(c) (4) of the Federal Property and Administrative Services Act of 1949, amended.

Personal or professional serv

as

Technical equipment requiring standardization and interchangeability of parts.

If section 302(c) (15) of the Federal Property and Administrative Services Act of 1949, as amended, and the Atomic Energy Act of 1954, as amended, are used as the bases for negotiation, the example of findings and determinations set forth in FPR 1-3.213 (e) (2) shall be appropriately modified to state the authority for negotiation.

§ 9-3.215 Otherwise authorized by law.

(a) The Atomic Energy Act of 1954, as amended, and the Atomic Energy Community Act of 1955, as amended, contain various exemptions from section 3709 of the Revised Statutes, as amended. Pursuant to section 310 of the Federal Property and Administrative Services Act of 1949, as amended, these references to section 3709 shall be construed to authorize procurement pursuant to section 302 (c) (15) of the Federal Property and Administrative Services Act of 1949, as amended, without regard to the advertising requirements of sections 302(c) and 303 of that Act.

(b) The Atomic Energy Act of 1954, as amended, also provides in section 162 that the President may, in advance, exempt any specific action of the Commission in a particular matter from the provisions of law relating to contracts whenever he determines that such action is essential in the interest of the common defense and security.

(c) Every contract negotiated under the authority of section 302 (c) (15) of the Federal Property and Administrative Services Act of 1949, as amended, and the Atomic Energy Act of 1954, as amended, shall be supported by a determination and findings justifying use of such authority.

Subpart 9-3.3-Determinations,
Findings, and Authorities

the Federal Property and Administrative Services Act of 1949, section 302 (c) (11) (FPR 1-3.211), with respect to contracts which will not require the expenditure of more than $25,000 may be executed by Managers of Field Offices and appropriate Headquarters Division Directors. Findings and determinations for such contracts in excess of $25,000 and in support of contracts negotiated pursuant to sections 302(c) (12) and 302(c) (13) of the Federal Property and Administrative Services Act of 1949 (FPR 1-3.212 and 1-3.213) shall be executed by the General Manager.

Subpart 9-3.4-Types of Contracts § 9-3.404-3 Fixed-price contract with escalation.

(a) Upward price escalation should generally be limited to 10 percent of original contract unit prices. In cases where such a limitation would not be equitable either to the contractor or the Government, appropriate higher or lower percentages may be substituted. However, in a negotiated contract, when considering a higher limitation on escalation, the profit allowed should be considered in light of the risk assumed and, therefore, lower profit factors should be sought to offset decreased risks.

(b) The escalation articles in Subpart 9-7.50 do not provide for contract price modifications being tied to general or industry-wide indexes of material prices and wage rates, because:

(1) Such price indexes reflect average increases or decreases in material prices and wage rates and, therefore, generally, do not accurately reflect increases or decreases in a particular contractor's actual payments for material and labor. Contract price changes made on this basis are likely to be unfair, either to the contractor or the Government.

(2) Statistics included either in general or industry-wide price indexes are accumulated on broad, overall coverage basis and do not accurately reflect increases or decreases in material prices or wage rates as applied to the equipment or material being purchased under a particular contract.

For the foregoing reasons, it is preferable to use price escalation articles which provide for contract price modifications based on increases or decreases in the contractor's actual payments for material and labor. When it is determined, for cogent reasons, that a price escala

tion article based on increases or decreases in a general or industry-wide price index must be used, every effort should be made to select an index which a study of past experience for a representative period indicates most nearly conforms to the contractor's actual experience for the same period. The contract file will set forth the reasons for using an escalation article based on a general or industry-wide price index and also why the particular index used was selected.

§ 9-3.404-5 Prospective price redetermination at a stated time or times during performance.

See contract article set forth in 9-7.5007-5 and general discussion in § 9-3.404-51.

§ 9-3.404-7 Retroactive price redetermination after completion.

See contract article set forth in $9-7.5007-5 and general discussion in § 9-3.404-51.

§ 9-3.404-50 Lump-sum contract for architect-engineer services with reimbursement for certain costs.

(a) Description: This type of contract normally provides for a fixed amount or lump sum for the A-E services (see § 918.306-50(b) (1) of this chapter for definition of these services) plus reimbursement of, or payment of an additional lump sum for certain costs listed in § 916.703-50 of this chapter, Clause 15, paragraph (b) to the extent they are incurred in connection with the work and approved by the contracting officer. These costs generally are not susceptible of reasonable estimation in advance due to a wide variation in the extent the related services are required for various projects, or they are for services not normally a part of titles I, II, and III.

(b) Compensation is included in the lump sum derived from the fee schedule for all drawings, plans, and documents prepared and reproduced under title I, except those which are reimbursable in conjunction with field surveys and subsurface investigations; for all drawings, specifications, invitations for bid, and other related documents prepared and reproduced under title II, prior to approval of title II design by the Commission, and for preparation of reproducible copies and furnishing 20 copies of such drawings and documents after approval by the Commission; and for reproducible

"as-built" record drawings and markedup "as-built" specifications prepared under title III (including updated master linen tracings, or reproducible linen tracings from the master set, if so specified in the contract). The provisions of the applicable Government Printing and Binding Regulations must also be observed.

(c) Where the contractor's responsible supervising representative, or an officer, proprietor, executive, or administrative head of the contractor participates directly in the performance of any of the services listed in paragraph (b) (1) through (3) of § 9-16.703-50 of this chapter, Clause 15, he may be compensated for the time actually so engaged. The rate of compensation, including the allocation of home office expenses, if any, shall be subject to approval by the contracting officer and commensurate with the cost of employing another qualified person to do such work, but the salary portion should not exceed the actual salary rate of the individual concerned.

(d) The costs listed in paragraphs (a) and (c) of this section cover services that are normal to complete titles I, II, and III services. No profit should be included in the adidtional compensation for those services because the architect-engineer's profit for the service is included in the lump-sum amount determined from the fee schedule. In order to ensure adequate technical services, they may be paid for on an actual cost basis. However, if it is considered to be more advantageous to the Government, an additional lump sum should be negotiated to cover the costs. In the case of personal services such as inspectors, a daily rate may be negotiated. The calculation of the additional lump sum, or daily rate, should show clearly the amount allowed for each of the services or elements of cost.

(e) The services covered in paragraph (b) (4), (8), and (10) of § 916.703-50 of this chapter, Clause 15, may be furnished by the Commission instead of reimbursing the contractor for the expenses. The type of services that will be furnished should be stated in the contract.

(f) If services are furnished that are beyond titles I, II, and III, such as developmental work, special engineering studies, and the preparation of special documents such as operating and maintenance manuals, additional compensation, including profit, should be paid for such services. Note that preliminary pro

posals and construction completion reports normally are considered a part of titles I and III.

(g) Use of lump-sum contract:

(1) A lump-sum contract for architect-engineer services should be used wherever it is practicable to compile, in advance of the preparation of plans and specifications, adequate information specifically describing the character and extent of services required.

(2) When there is insufficient scope information available to permit contracting for complete services (titles I, II, and III) on a lump-sum basis, and when it may be to the advantage of the Government to do so, consideration should be given to contracting only for a study contract or for the preliminary engineering (title I), on either a reimbursable or lump-sum basis, in order to permit entering into a lump-sum contract for the remaining portion of architect-engineer services (titles II and III), based upon information developed in the first phase.

[36 F.R. 11095, June 9, 1971]

§ 9-3.404-51 Fixed-price contracts with provision for redetermination.

(a) This type of contract is a fixedprice contract with a special provision for redetermining the contract price upward or downward. It is used to obtain reasonable prices when substantial contingency charges otherwise would be included in a contract price due to such factors as prolonged delivery schedules, unstable market conditions for material or labor, lack of fully developed specifications, or uncertainty of cost of performance. Under this type of contract, the Government assumes the risk of certain contingencies which the contractor would otherwise include in its contract price, and the contract price is ultimately redetermined only to the extent that such contingencies actually occur. The assumption of a portion of the contract risk by the Government requires the negotiation of a lower rate of profit than would be the case when all risk was assumed by the contractor. An appropriate price redetermination article shall be used in fixed-price contracts in those instances where: (1) There are insufficient data to indicate reasonableness of price; (2) the estimate of the low offeror, or the only offeror, exceeds the independent Government estimate by an unreasonable amount; (3) it is necessary or desirable to eliminate charges for contingencies

from the price offered; or (4) there are other circumstances which require protection of the interests of the Government by use of a price redetermination provision. The length of the contract period is an important factor to be considered in determining whether to provide for price redetermination. As a general rule, the longer the contract period, the greater may be the need for price redetermination. Thus, in contracts running for a year or more, a price redetermination article may well be the most appropriate means of properly protecting the Government's interest. In instances where deliveries will be made over a period of 2 or more years, it is generally desirable to provide for price redetermination on an annual basis as a minimum requirement.

(b) The price redetermination article set forth in § 9-7.5007-5 permits upward as well as downward redetermination. Under such circumstances, provision is made for setting a limit on the amount of any upward price revision by fixing a ceiling price for the contract. Where upward price redetermination is allowed, a ceiling price should be set in order to encourage the contractor to perform efficiently. The range of allowable upward price revisions from the contract or target price (which should contain substantially no allowance for contingencies) to the ceiling price should be a reasonable measure of the contingencies against which the contractor is being protected. Any costs allowed the contractor in price redetermination above the contract or target price should be without profit. An upward price revision of 10 percent of the target price is generally regarded as a reasonable limit and except for unusual circumstances, 20 percent should be considered the maximum allowable limit.

(c) The profit margin included in the criginal contract price should be a reasonable measure of the risk being assumed by the contractor. Thus, where there is evidence of close pricing in the original contract price, subject to downward redetermination only, the contractor is deserving of a larger profit margin than would be the case where such contract price is known to include a substantial contingency allowance. Similarly, the greater the spread between the contract or target price and the ceiling price, the greater the extent to which, as a general rule, the Government is assuming contingent risks, and the lower the profit margin should be. Again, in a case where