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(d) The Director of Procurement (or DCS/Procurement and Production) will exhaust every available means to obtain the refund or adjustment. If unable to secure the adjustment, he will report his actions to the commander of the major command and recommend what further action should be taken. The Commander will then exhaust every available means and, if necessary, forward the matter to Hq USAF (AFSPPDA) or (AFSPPCB) as appropriate, with recommendations for further action.

(e) Regarding refunds involving responses to GAO reports, a determination may be made to seek or accept a refund less than that recommended by GAO. If so, such a decision must be fully documented by the Director of Procurement (or DCS/Procurement and Production) and have the concurrence of the commander of the major command. If the Command concurs in the recommendation but fails to obtain a refund because of the contractor's refusal, the response should state the basis for the refusal and whether or not the Command agrees with it.

(f) Attention is directed to the need for thorough analysis and justification of our position in any case in which a GAO recommendation to seek an adjustment is not complied with since our position will be contained in a final report addressed to the Congress. If a GAO recommendation to seek a refund is rejected, the response to GAO will adequately state the facts and arguments supporting the Command's position and the response should also indicate that legal recourse was considered and the results of such consideration.

[30 F.R. 13631, Oct. 27, 1965]

§ 1001.313 Procurement of parts. [27 F.R. 11760, Nov. 29, 1962]

§ 1001.313-50 Initial procurement.

Initial quantities of spare parts, with the exception of military, industry, and contractor standard items, will normally be procured from the end item manufacturer. These parts may be procured through provisioning procedures, when appropriate, utilizing authorized contractual provisioning documents. Any proposal for deviations received and/or initiated by any AF activities to authorized contractual provisioning documents or their application, must be submitted to AFLC (MCSCP) for review and coordination prior to submitting the request

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Spare parts will be procured using the DO or DX rating (§ 1001.460) assigned to the end item being supported.

[27 F.R. 1606, Feb. 21, 1962]

§ 1001.314 Contracting officer's decision under the Disputes clause.

(a) This section deals with preparing decisions and processing appeals under the Disputes clause by contracting officers. The application of the following instructions are limited to cases where the Disputes clause contained in § 7.10312 of this title is used. Where the Disputes clause of § 1007.4205-8 of this subchapter is used, the oversea command staff judge advocate rather than the Staff Judge Advocate, Hq AFLC, will be the source of advice regarding proposed decisions and will be the channel for forwarding data relating to appeals (also see the instructions preceding the clause in § 1007.4205-8 of this subchapter).

(b) Preparation of decision. Where mutual agreement on a question of fact proves impossible, a findings and decision must be prepared by the contracting officer. This single document should contain a simple and concise statement of: (1) The claim, (2) the decision, (3) the findings of fact which support the decision, and (4) a reference to the Disputes clause. The factual determination must be relevant to the issues and supported by documents or oral statements. [28 F.R. 2270, Mar. 8, 1963, as amended at 31 F.R. 2683, Feb. 12, 1966]

§ 1001.314-52 Contractor's compliance and withdrawal after appeal is filed. Whenever the contractor, subsequent to filing an appeal with the Armed Services Board of Contract Appeals, elects nevertheless to accept fully the findings and decision from which appeal was taken or any amendment thereof, and gives written notification of such acceptance to the contracting officer concerned, the contracting officer will be responsible for promptly sending the contractor's notice of acceptance to the Staff Judge Advocate, Hq AFLC. Upon receipt of the notice the Staff Judge Advocate in col

laboration with the contractor will prepare and submit a joint motion of withdrawal to the Board. Similar action will be taken by the contracting officer in instances where the contractor, after filing an appeal with the Armed Services Board of Contract Appeals, in writing signifies partial acceptance with the findings and decision of the contracting officer.

[28 F.R. 2271, Mar. 8, 1963]

§ 1001.314-56 Delegation of authority to process contract appeals.

The Commander, AFLC, has been delegated authority to process all contract appeals directly to the Armed Services Board of Contract Appeals and the Appeal Board, Office of Contract Settlement. The Commander, AFLC, has further delegated this authority to the Staff Judge Advocate, Hq AFLC, with power of redelegation.

[28 F.R. 2271, Mar. 8, 1963]

§ 1001.314-57

Chief Trial Attorney.

The Staff Judge Advocate, Hq AFLC, has designated the Chief, Contract Appeals Division, Office of the Staff Judge Advocate, Hq AFLC, as the Chief Trial Attorney to represent the Government in the defense of appeals before the Armed Services Board of Contract Appeals. Decisions of the Armed Services Board of Contract Appeals will be transmitted by the Chief Trial Attorney to the appropriate contracting officer for action according to the Board's decision. [28 F.R. 9580, Aug. 31, 1963]

§ 1001.315 Procurement of jeweled bearings.

Jeweled bearings required in the performance of AF contracts will comply with Specifications MIL B-27497A, and MS Standards referenced therein.

[31 F.R. 2683, Feb. 12, 1966]

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any) to the requirement being procured, (b) information relevant to taxes, duties, etc., (c) security requirements applicable to area concerned, (d) estimated costs and availability of indigenous employees and foreign-origin supplies in the event such resources may be acquired consistent with the balance of payments and other restrictions, (e) standards of conduct to be observed by the prospective contractor and his employees including action that will be taken against the prospective contractor and/or his employees in the event required standards are not maintained; and (f) requirements on use of foreign currencies including applicability of U.S. holdings of excess foreign currencies. Also, the oversea commander should be advised as to the: (1) Need for organic logistics support to be provided the contractor, (2) date contractor will arrive overseas, and (3) contract performance period, etc.

[31 F.R. 2683, Feb. 12, 1966]

§ 1001.325 Variation in quantity. [30 F.R. 13631, Oct. 27, 1965]

§ 1001.325-1 Processing variations permitted by the contract.

Whenever the quantity delivered by a contractor contains an overrun or underrun within the limits and for the causes permitted by the contract, the delivery may be accepted by the appropriate AF personnel usually responsible for accepting deliveries. Disbursement vouchers will be used to adjust obligations upward in the instance of overruns; deobligation and decommitment action will be taken by the accounting and finance activities, in the case of underruns, after payment of the final voucher and upon the receipt of AFPI Form 14, Contract Records Disposition Notice, from the ACO. No action by the procuring contracting officer or ACO is required either to approve quantities delivered by the contractor or to adjust obligations within the permitted variation. Where necessary, additional shipping instructions, required as a result of overruns, will be obtained from the buyer.

[30 F.R. 13631, Oct. 27, 1965]

§ 1001.325-2 Processing variations not permitted by the contract.

(a) Overruns. If the contractor produces an overrun under a contract which does not provide for any variation in quantity, or if the overrun exceeds the percentage permitted by the contract, the Government is under no obligation

to accept the unanticipated excess. Ordinarily, the contractor will be notified by the ACO that the Government does not consider itself obligated to, and does not desire to accept the extra quantity. The unanticipated excess will then be returned or tendered to the contractor for disposition by the contractor at his expense, including all transportation and handling charges. When the unanticipated overrun for an individual shipment is: (1) Less than $10, it will be considered inconsequential and be ignored, (2) $10 or more, the ACO will promptly make an investigation upon receipt of an AF Form 672, Report of Discrepancy, from the receiving activity and within 30 days send written instructions to the receiving activity for the proper disposition to be made of the overrun.

(b) Underruns. It is the responsibility of the contractor to deliver and of the Air Force to accept the quantities called for by the terms of the contract, unless the contract has been terminated according to the terms of the contract. If the contractor requests the Air Force to accept quantities less than those permitted by the variation clause, the ACO will carefully consider the reasons for the underrun as extended by the contractor and determine whether acceptance of the underrun is warranted. Where acceptances appear justified, the ACO will submit the facts to the buyer, who will reply, stating the decision made and the action to be taken by the procuring contracting officer. If the contractor, however, underruns the quantity called for on an FP contract for $5,000 or under, which does not contain a variation in quantity clause, the underruns will be considered inconsequential and will be ignored if it does not exceed 5 percent of the quantity of any one item, or an aggregate of $50 of the total contract obligation.

[30 F.R. 13631, Oct. 27, 1965]
§ 1001.353 Utilization of funds.

By law, funds are required to be used only for the purpose for which they were appropriated and no other. Moreover, obligations must not be incurred unless funds are available. Where essentially similar items are procured, whether on one or more contracts, the same funds must be cited. Similarly, where contracts are amended, as, for example, to make changes or additions to work called for under a construction contract, which changes are essentially the same

character of work, only construction funds should be used. This is not intended to preclude the citation of different, but appropriate, funds for different supplies or services in the same contract where such supplies or services are properly being procured under one contract.

[27 F.R. 6108, Feb. 21, 1962]

§ 1001.356 Tests of contractor manufactured equipment.

Only personnel designated by the Government and the contractor whose products are being tested should be permitted to witness such tests. Such contractor may designate others not in his organization to attend provided such request is in writing and approved by the Government.

[27 F.R. 1608, Feb. 21, 1962]

§ 1001.357 Use of new contracts for follow-on procurement.

(a) All follow-on procurements (adding articles in the prosecution of subsequent fiscal year programs) will be accomplished on separate and distinct contractual instruments and not as supplements to existing contracts.

(b) Chiefs or directors of procurement and production of AMAS, AFSC divisions, AFSC centers, APRE, APRFE, and staff officers responsible within major air commands may authorize exceptions to this policy when the best interests of the Government will be served. This authority will be exercised only where compliance with the policy is not practicable. The procurement file will include a statement by the contracting officer of justification with approval indicated by higher authority. Except as authorized in paragraph (c) of this section, the use of existent contracts will not be authorized for follow-on procurements when followon procurements cite funds of different appropriations or cite funds of the same appropriation subsequent to 3 years from the date of the contract.

(c) Authorization of exceptions to the policy in this section is not required in the following cases provided it is impossible to segregate costs between procurements:

(1) Follow-on procurements for pilotless aircraft or missiles when requirement is released on a partial basis, such as purchase of materials and assembly. (2) Indefinite delivery, basic ordering agreements.

(3) Research contracts where the period of performance will not exceed 5 years from the date of the initial contract.

(4) Exploratory and advanced development contracts where the period of performance will not exceed 3 years from the date of the initial contract.

(5) Instances where Government exercises its rights under the option clause in the contract.

[28 F.R. 5569, June 6, 1963, as amended at 29 F.R. 3145, Mar. 7, 1964; 29 F.R. 4094, Mar. 28, 1964]

§ 1001.358

Policy regarding the consideration of loyalty of scientific researchers on unclassified research contracts.

(a) The problems of security and possible unauthorized release of classified information do not arise under unclassified scientific research contracts. The major consideration regarding the individuals involved should be their scientific integrity and ability. The only consideration relating to the loyalty of individual scientists engaged in work under Government contracts is the principle that it would appear to be against the national interest to give aid and comfort to a person disloyal to the United States. In conformance with this principle, the following policy has been adopted:

(1) The AF policy in considering proposals for contracts in support of unclassified research not involving security considerations is to assure that, in appraising the merit of a proposal submitted by or on behalf of a scientist, his experience, competence, and integrity are always taken carefully into account. Purchasing activities will not knowingly award or continue a contract in support of research for one who is:

(i) An acknowledged Communist or anyone established as being a Communist by a judicial proceeding, or anyone who advocates change in the United States Government by other than constitutional means.

(ii) An individual who has been convicted of sabotage, espionage, sedition, subversive activity under the Smith Act, or a similar crime involving the Nation's security.

(b) Whenever any purchasing activity has reason to believe that the activities described in paragraph (a) (1) (i) and (ii) of this section apply to a scientific researcher whose services will be used in

a proposed contract, or whose services are being used in an existing contract, all pertinent information will be forwarded by AFSC and OAR activities through AFSC (SCKP), and all other activities through AFLC (MCIMF) to the Directorate of Procurement Policy (AFSPPBA), Hq. USAF for resolution.

(c) Where a purchasing activity receives information indicating that a potential or an actual scientific researcher may have violated a Federal statute, an immediate report will be made in the manner prescribed for reporting the commission of suspected crimes.

[27 F.R. 1608, Feb. 21, 1962, as amended at 29 F.R. 3145, Mar. 7, 1964]

§ 1001.360 Requests from foreign entities for information as to acquisition of production and sales rights to United States military end items.

(a) This section provides instructions for processing a request of a foreign entity for information concerning acquisition of production and sales rights to United States military end items.

(b) This section applies to AFSC procurement activities and AFLC field procurement activities assigned prime class procurement, all major oversea commands, Air Procurement Region, Far East (APRFE), and Air Procurement Region, Europe (APRE).

(c) It is AF policy to assist potential foreign producers of AF military end items to identify the United States qualified production sources. Whenever a foreign production source (either a friendly foreign government or a private entity of a friendly foreign government) requests information on the appropriate procedure to be followed in acquiring production or patent rights to an AF military end item, it is deemed essential that AF personnel provide a complete list of United States military department sources, together with addresses, as expeditiously as possible.

(d) AF personnel initially contacted by the foreign entity will assist the inquirer in identifying each AF item by stock number and nomenclature designation. In addition, the offshore unit will determine the AF activity which has procurement responsibility of each item and advise the inquirer to write directly to the director of procurement and production of that activity.

(e) Upon receiving such requests, the appropriate AF activity within the continental United States will:

(1) Secure a complete list of United States Military sources together with addresses presently on record at that activity for the item involved.

(2) Send this list directly to the foreign entity and advise the foreign potential producer to contact the United States source(s) direct. This letter will be substantially as follows:

Forwarded herewith according to your request is a list of United States military sources presently on record at this activity as United States manufacturer of

(Item)

Inasmuch as the ultimate decision insofar as patent rights and technical assistance arrangements are concerned, rests with the owner of the patents which may be involved and the United States producers of the item, no commitment is made on behalf of the United States Government.

If further information is desired, it is requested that the attached list be utilized for contacting the United States manufacturers direct.

(3) No other information will be released to a foreign entity without the approval and coordination of the local office of the staff judge advocate.

(f) At the same time the list is forwarded, each United States producer whose name has been included on the list will be advised of the inquiry. Since the ultimate decision, insofar as patent rights and technical assistance are concerned, rests with the owner of the patents which may be involved and the United States producer(s) of the item, no position will be taken in this respect and no commitments made on behalf of the United States Government. This letter will be substantially as follows:

It is the policy of the Department of the Air Force to assist potential foreign producers of Air Force military end items to identify the United States qualified production

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No further action on this matter will be taken by this activity. However, it is hoped that the Air Force has been of some assistance to you in establishing contact between your own concern and a potential foreign source of

(Item)

(g) If a request is received from a foreign entity which contemplates production in other than a friendly country or if the AF item is classified, the request will be referred with recommendations to Hq USAF (AFSPP).

(h) The AF policy is to lend every assistance in identifying the interested parties and to aid United States private entities in processing an application to the United States Department of State or Commerce for export license or approval of a contemplated production and sales program abroad. The procedures outlined in this section afford the Department of the Air Force ample opportunity at Hq USAF to make recommendations to the Department of Defense which, after review, forwards the Department of Defense recommendations to the Department of State. The Department of State is the established and solely authorized United States Government instrumentality for final determination in respect to release of United States military end items for production and sale outside the continental United States by foreign entities. [27 F.R. 1609, Feb. 21, 1962, as amended at 28 F.R. 3385, Apr. 6, 1963; 28 F.R. 8141, Aug. 8, 1963]

§ 1001.361

Hospitalization and medical care for contractor's employees at oversea installations.

The following policy contained in DOD Directive 6310.4, will be followed by all procurement activities.

(a) Under existing statutes and procurement regulations, the Military Departments have the authority, under certain circumstances, to contract for the hospitalization and medical care of employees of contractors with the United States at oversea locations, as a part of the consideration for such contracts.

(b) During the present shortage of medical personnel, all practical means should be employed to reduce the workload of the medical departments of the services and to make the most efficient use of available personnel. Accordingly, in negotiating such contracts, it is requested that all procurement authorities

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