Sec.
Subpart 8-3.8-Price Negotiation Policies and
Techniques

8-3.800 Scope of subpart. 8-3.801 Basic policy.

8-3.801-2 Responsibility of contracting of ficers.

8-3.801-3 Responsibility of other personnel.

8-3.805 Selection of offerors for negotiation and award.

8-3.807 Pricing techniques.

8-3.807-3 Cost or pricing data.

8-3.808 Profit or fee.

8-3.808-1 General.

8-3.809 Contract audit as a pricing aid.

8-3.811 Record of price negotiation.

8-3.813 Preproduction and startup and other nonrecurring costs.

Subpart 8-3.9—Subcontracting Policies and Procedures

8-3.903-2 Review and approval of subcontracts.

AUTHORITY: 72 Stat. 1114, sec. 205(c), 63 Stat. 390; 38 U.S.C. 210, 40 U.S.C. 486(c).

Subpart 8-3.1-Use of Negotiation

§ 8-3.101 General requirements for negotiation.

(a) Contracts in excess of $10,000 or $1,000 for contracts made for repairs to properties acquired under Chapter 37, title 38, United States Code, will be entered into by negotiation only in the absence of any one or more of the elements essential to formal advertising set forth in § 8-2.102, or when:

(1) It is determined that the procurement should be effected from small business in accordance with FPR 1-1.7.

(2) It is determined that the procurement should be effected from labor surplus area concerns in accordance with FPR 1-1.8.

(3) Items to be purchased are for authorized resale.

(b) Proposed contracts for the purchase of a firm quantity of supplies or equipment, at a cost in excess of $200,000 are subject to the procedure set forth in § 8-2.407-1.

[30 FR 13228, Oct. 16, 1965, as amended at 39 FR 38378, Oct. 31, 1974; 40 FR 40803, Sept. 4, 1975]

Subpart 8-3.2-Circumstances

Permitting Negotiation

§ 8-3.200 Scope of subpart.

(a) Subject to the requirements and limitations prescribed in FPR 1-3.1, 13.2 and 1-3.3 and Subparts 8-3.1, 8-3.2 and 8-3.3, Veterans Administration contracting officers, acting within the scope of their authority, may negotiate contracts for the acquisition of supplies, equipment and services. Each such acquisition will cite the specific authority under which the procurement was negotiated.

(b) In those instances where a purchase in excess of $10,000 may be negotiated under more than one authority, the contracting officer will select the authority he/she deems most appropriate to accomplish the purchase and will include in the contract file complete justification for his/her selection.

[35 FR 13366, Aug. 21, 1970, as amended at 40 FR 40803, Sept. 4, 1975]

(a) Except as prescribed in § 8-3.20350, procurement of medical services and resources authorized by sections 4117 and 5053 of title 38, United States Code, costing less than $10,000 may be procured by negotiation under authority of FPR 1-3.203. Each such contract and revision thereof is, however, subject to the same approval as those costing in excess of $10,000. See § 83.204.

(b) Except as provided in this paragraph, purchases authorized to be negotiated under the special procurement authorities contained in title 38, United States Code, will be negotiated under the authority of FPR 1-3.203 when the amount of the purchase is not in excess of $10,000. An exception exists in the case of services or supplies purchased on account of any property acquired under the Loan Guaranty program. For such purchases, 38 U.S.C. 1820(b) requires formal advertising if the amount will exceed $1,000.

(c) Procurements of consulting, management, administrative and professional services costing less than

$10,000 and made under the authority of 38 U.S.C. 213 are subject to the controls set forth in Subpart 8-4.8.

[40 FR 40803, Sept. 4, 1975, as amended at 45 FR 16183, Mar. 13, 1980; 48 FR 54351, Dec. 2, 1983]

§ 8-3.203-50 Affiliated medical schools and related institutions.

Contracts of the type specified in paragraph (a) of § 8-3.203 may be negotiated with affiliated medical schools and related institutions without competition when such contracts are entered into in conjunction with the Veterans Administration affiliation program. Such contracts shall be negotiated under the authority of this § 8-3.203-50. Each such contract and revision thereof is, however, subject to the same approval as those costing in excess of $10,000. See § 8-3.204.

[48 FR 54351, Dec. 2, 1983]

§ 8-3.204 Personal or professional services.

(a) Various sections of title 38, United States Code, authorize the Administrator to enter into contracts for the purpose of acquiring personal or professional services. These authorizations do not, however, stipulate the manner in which such contracts are to be entered into, i.e., negotiation or formal advertising. Civilian agencies are, under the authority of FPR 13.204, authorized to procure such services by negotiation. Therefore, when the services listed in this section are to be acquired by the Veterans Administration, at a cost in excess of $10,000, a contract will be negotiated by the contracting officer. These contracts will cite in addition to the authority to negotiate, FPR 1-3.204, the appropriate section of title 38 which authorizes the contract.

(b) Architect-engineer services when required in conjunction with construction (see Subparts 8-4.10 and 8-16.7 of this chapter) will cite as the authority for such negotiation FPR 1-3.204-38 U.S.C. 5002.

(c) Except as prescribed in § 8-3.20450, contracts with medical schools, clinics, and any other group or individual capable of furnishing such services to provide scarce medical specialist

services at Veterans Administration facilities (including but not limited to services of physicians, dentists, nurses, physicians' assistants, dentists' assistants, technicians, and other medical support personnel) will be negotiated under authority of FPR 1-3.204 and 38 U.S.C. 4117.

(d) Except as prescribed in § 8-3.20450, contracts with other hospitals (or other medical installations having hospital facilities) or medical schools, or clinics in the medical community for:

(1) The mutual use, or exchange of use, of specialized medical resources when such a contract will obviate the need for a similar resource to be provided in a Veterans Administration facility; or

(2) The mutual use, or exchange of use, of specialized medical resources in a Veterans Administration facility, which have been justified on the basis of veterans' care, but which are not utilized to their maximum effective capacity will be negotiated under authority of FPR 1-3.204-38 U.S.C. 5053.

(e) Proposed contracts for the services and resources specified in paragraphs (c) and (d) of this section may be entered into for 1 year only. When deemed essential to the mission of the stations, proposed renewal contracts will be negotiated for the subsequent year. Except as provided in paragraph (f) of this section, such proposed contracts will be submitted for approval to the appropriate Regional Director (13C) when authority is 38 U.S.C. 5053, or Director, Office of Procurement and Supply (93) when authority is 38 U.S.C. 4117, so as to reach Central Office 60 days prior to the effective date of the contract.

(1) Complete justification for all contracts will be submitted, as approval depends on the adequacy of the justification.

(2) Proposed contracts under authority of 38 U.S.C. 4117 will be submitted in five copies, and contracts under authority of 38 U.S.C. 5053 will be submitted in six copies.

(3) The transmittal letter and each supporting document will be submitted in the same number of copies as the contract. As an incomplete submission delays processing of the proposed contract in Central Office, care should

be exercised to assure that the proper number of copies are submitted, and that submissions are complete (e.g., complete name and address of the other party or parties to the contract are included).

(4) Proposed contracts of the type specified in paragraphs (d) (1) and (2) of this section will be accompanied by a recommendation of the head of the station as to the geographical limits to be applied to the medical community.

(5) A copy of all executed sharing contracts, both new and renewal, will be forwarded to the appropriate Regional Medical Director (13C) for post audit and for purposes of making the annual report to Congress as required by 38 U.S.C. 5057.

(f) Proposed renewal sharing contracts under the authority of 38 U.S.C. 5053 and proposed renewal scarce medical specialist services contracts under the authority of 38 U.S.C. 4117 may be approved by the appropriate Medical District Director when such contract proposals meet the following conditions:

(1) There shall be no new services added to sharing contract renewals and no increases in full-time equivalent employee requirements for scarce medical specialist services contracts. Services may be deleted from the contract without Central Office approval only if such deletions do not effectively result in an individual item or total cost increase in excess of 10 percent over the cost in the previous contract.

(2) No individual cost item that is being procured by sharing agreement from the contractor (non-Veterans Administration facility identified in the contract) shall increase in cost more than 10 percent over the cost for that same item in the previous contract. The total cost of a scarce medical specialist services contract shall not increase more than 10 percent over the total cost of the previous contract.

(3) The proposal has been reviewed for legal sufficiency by the District Counsel responsible for servicing the Veterans Administration facility involved. The District Counsel shall be sent, along with the proposal, a copy of the previous agreement for the same services so that a comparison can be made of the two documents.

(4) All contract clauses required by Chapters 1 and 8, Title 41, Code of Federal Regulations, are included in the proposal.

(5) Equal Employment Opportunity clearance has been obtained, when required.

(g) Contracts for professional or technical services with private or public agencies not specifically authorized in any other section of title 38, United States Code, may be acquired under 38 U.S.C. 213 and negotiated under FPR 1-3.204 when the cost of such services will exceed $10,000. Controls over the procurement of consulting, management, administrative and professional services are set forth in Subparts 8-4.8.

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(h) Personal service contracts having employer-employee relationship, except to the extent indicated in paragraph (c) of this section, will not be negotiated under this authority but will be consummated in accordance with MP-5, Parts I and II. The determination as to whether a contract is of this nature is primarily the responsibility of the appointing official. Contracting officers should, however, be alert to the conditions or circumstances set forth in this paragraph which, if present, could result in an invalid contract. If any of those conditions or circumstances are present, any doubts will be resolved by consultation with the requester and by seeking legal advice.

(1) Contracts with individuals. (i) The contract does not call for an end product which is adequately described in the contract.

(ii) The contract price or fee is based on the time actually worked rather than the results to be accomplished.

(iii) The services are to be of a continuing rather than a temporary or intermittent nature.

Veterans Administration personnel to perform the same functions.

(iv) The Veterans Administration retains the right to control and direct the means and methods by which contractor-furnished personnel accomplish this work.

[40 FR 40803, Sept. 4, 1975, as amended at 45 FR 16183, Mar. 13, 1980; 47 FR 18866, May 3, 1982; 48 FR 54351, Dec. 2, 1983]

§ 8-3.204-50

Affiliated medical schools and related institutions. Contracts of the type specified in § 8-3.204, paragraphs (c) and (d), may be negotiated with affiliated medical schools and related institutions without competition when such contracts are entered into in conjunction with the Veterans Administration affiliation program. Such contracts shall be negotiated under the authority of this § 8-3.204-50 and 38 U.S.C. 4117 and 38 U.S.C. 5053 as appropriate. The requirements of § 8–3.204, paragraphs (e) and (f), shall be applicable to all such procurement actions.

[48 FR 54351, Dec. 2, 1983]

§ 8-3.207 Medicines or medical supplies.

(a)(1) Except as provided in this section or when specific prior approval has been granted by the Director, Office of Procurement and Supply to a field station contracting officer, no Veterans Administration contracting officer shall enter into a contract by negotiation under authority of FPR 13.207, when the estimated cost of the item(s) required, singly or collectively, is in excess of $10,000 for a single transaction.

(2) When an individual is designated to act in the capacity of one of the positions specified in this section, that individual is authorized to consummate contracts in excess of $10,000 in the same manner as the incumbent of the position. The contracting officer's title will be indicated on the contract documents and official correspondence with the contractor. This will verify to the contractor that the contracting officer possesses the necessary contracting authority. Additionally, the contracting officer's title will appear on the applicable determinations and findings.

(b) The following contracting officers are authorized to award negotiated contracts in excess of $10,000 for medicines or medical items:

(1) Director, Office of Procurement and Supply.

(2) Director, Procurement Service. (3) Director, Veterans Administration Marketing Center.

(4) Chief of each of the following Marketing Divisions:

(i) Medical Supplies;

(ii) Medical Equipment;

(iii) Federal Supply Schedules; (iv) Pharmaceutical Products.

(5) Four contracting officers for each Marketing Division when so designated by the Marketing Division Chief.

[43 FR 24532, June 6, 1978, as amended at 43 FR 51634, Nov. 6, 1978; 45 FR 63844, Sept. 26, 1980; 47 FR 4083, Jan. 28, 1982; 48 FR 54351, Dec. 2, 1983]

§ 8-3.209 Subsistence supplies.

(a)(1) Except as provided in this section or when specific prior approval has been granted by the Director, Office of Procurement and Supply to a field station contracting officer, no Veterans Administration contracting officer shall enter into a contract by negotiation under authority of FPR 13.209 when the estimated cost of the item(s) required, singly or collectively, is in excess of $10,000 for a single transaction.

(2) When an individual is designated to act in the capacity of one of the positions specified in this section, that individual is authorized to consummate contracts in excess of $10,000 in the same manner as the incumbent of the position.

(b) The following contracting officers are authorized to negotiate contracts in excess of $10,000 for the purchase of subsistence supplies:

(1) Director, Office of Procurement and Supply.

(2) Director, Procurement Service. (3) Director, Veterans Administration Marketing Center.

(4) Chief, Marketing Division for Subsistence.

(5) Three senior contracting officers, Marketing Division for Subsistence when so designated by the Marketing Division Chief.

[33 FR 10848, July 31, 1968, as amended at 34 FR 12782, Aug. 6, 1969; 41 FR 46436, Oct. 21, 1976; 45 FR 36844, Sept. 26, 1980; 47 FR 4083, Jan. 28, 1982; 48 FR 54351, Dec. 2, 1983]

§ 8-3.210 Impracticable to secure competition by formal advertising.

(a) Contracts for paid advertising for community placement homes and for recruitment purposes, may be negotiated under the authority of this section, after the request for the procurement of such advertising has been approved by one of the officials designated in 38 CFR 2.3 and 2.4.

(b) Contracts for the procurement of paid advertising in the purchase or sale of supplies, equipment or services, may be negotiated under authority of this section, only after the request for such procurement has been approved by the Administrator.

[31 FR 16312, Dec. 21, 1966, as amended at 33 FR 6292, Apr. 23, 1968; 33 FR 14166, Sept. 19, 1968; 43 FR 51635, Nov. 6, 1978; 48 FR 54351, Dec. 2, 1983]

§ 8-3.211 Experimental, developmental, or research work.

Research authorized to be conducted by the Veterans Administration, in accordance with the provisions of title 38, United States Code, will be negotiated under the authority of FPR 13.211 (except that prosthetics research authorized by 38 U.S.C. 5023 will be negotiated under the authority of FPR 1-3.215)

[46 FR 22897, Apr. 22, 1981]

§ 8-3.215 Otherwise authorized by law.

Various sections of title 38, United States Code, authorize the Administrator to enter into certain contracts, and certain types of contracts, without regard to any other provision of law. Veterans Administration contracting officers entering into contracts by negotiation for any of the following items or services, estimated to cost in excess of $10,000, will cite, in addition to FPR 1-3.215, the appropriate section of title 38, United States Code as their authority to do so:

(a) Contracts for orthopedic and prosthetic appliances and related serv