§ 14.110-2 Alternative procedure-contractor release for shipment. (a) The inspecting activity servicing the contract may authorize the supplier to release supplies for shipment when: (1) When the stamping or signing of the shipping papers by the Government inspector impairs the operation of a planned technical inspection program or places an unreasonable demand on the inspector's time; (2) There is sufficient continuity of production to permit the establishment of a systematic and continuing Government evaluation of the supplier's control of quality; and (3) The contractor has a record of adequate quality assurance, including quality pertaining to preparation for shipment. (b) When the alternative procedure is used, the supplier shall type or stamp and sign the following statement on each copy of the shipping papers: The supplies comprising this shipment have been subjected to and have passed all examinations and tests required by the contract, were shipped in accordance with authorized shipping instruction, and conform to the quality, identity and condition called for in contractual requirements and to the quantity shown on this document. This shipment was released in accordance with the Department of Defense Procedure for Authorizing Shipment of Supplies under authority granted by (Name and Title of inspector) in a letter dated (date of authorizing letter). (Signature and title of supplier's authorized representative) [29 F.R. 11824, Aug. 19, 1964] § 14.110-3 Administration of alternative procedure. (a) Departmental level. Each Department shall: (1) Determine, in accordance with AMCR 715–508 and 715–509, ONM Notice 4355 dated 14 March 1963, AFSC Manual 74-1, or DSA-H-4155.1, the extent to which this procedure is to be used by its inspecting activities; (2) Designate the field offices responsible for authorizing suppliers to use this procedure; (3) Inform its receiving activities that a packing sheet bearing the statement in § 14.110-2(b) identifies supplies that have received Government inspection; and (4) Require receiving activities to transmit promptly information that might warrant withdrawal of the authorization. (b) Field level. The office responsible for authorizing suppliers to use this procedure shall: (1) Determine, in accordance with AMCR 715-508 and 715–509, ONM Notice 4355 dated 14 March 1963, AFSC Manual 74-1, or DSA-H-4155.1, that the supplier has established satisfactory quality control; (2) Provide a Government inspection program to assure that the supplier continues to maintain satisfactory quality control; (3) Notify the supplier, in writing, that he is authorized to use this procedure; and (4) Notify the supplier, in writing, when authorization to use this procedure is withdrawn. (c) Supplier plant level. The cognizant inspector for the plant of a contractor or subcontractor authorized to use this procedure shall: (1) Instruct the supplier of his responsibility for the performance of inspections required by the contract and for the processing and release of supplies for shipment; (2) Where acceptance and delivery are at point of origin, sign and date Block A of those copies of DD Form 250 which are to be attached to the contractor's invoice for submission to the paying activity; and (3) Where the criteria in § 14.110-2 (b) are not being met, recommend to the office in paragraph (b) of this section that the authorization be withdrawn. (d) Receiving level. The cognizant inspector at any location receiving supplies released under this procedure shall: (1) Inform the receiving activity of the purpose of this procedure; (2) Instruct the receiving activity that the statement in § 14.110-2(b) identifies supplies that have received Government inspection at the supplier's plant; and (3) Promptly notify the cognizant inspector at the supplier's plant of inadequacies in supplies that might be cause for withdrawal of the authorization to use this procedure. [29 F.R. 11824, Aug. 19, 1964] Subpart B-Acceptance ernment assents to ownership by it of existing and identified supplies, or approves specific services rendered, as partial or complete performance of the contract. Except as provided in § 14.205, and subject to other terms and conditions of the contract, the Government thereby acknowledges that the supplies or services are in conformity with contract requirements, including those of quality, quantity, packaging, and marking. Depending upon the provisions of the contract, acceptance may be effected prior to, at the time of, or after delivery. However, supplies and services shall not be accepted prior to inspection, except as permitted in § 14.204. Acceptance shall ordinarily be accomplished by execution of an acceptance certificate on the applicable inspection and receiving report form (for example, DD Form 250, DD Form 1155, or Standard Form 44) or other written notice of acceptance. Where acceptance is accomplished at a point other than destination, supplies shall not be reinspected at destination for acceptance purposes. However, such supplies should be examined at destination for damage in transit, quantity, and possible substitution or fraud. [27 F.R. 11663, Nov. 27, 1962] § 14.202 Delivery under F.O.B. origin contracts. (a) Satisfactory evidence of delivery is required before payment other than progress or advance payments may be made under fixed-price supply contracts. Under contracts calling for deliveries F.O.B. origin, the contracting officer or his authorized representative, in certifying that delivery has been made, may in his discretion rely on the contractor's signed statement on his invoice that delivery has been made on a specified date to a named carrier or to a representative of the Government. When necessary to protect the Government's interest, the contracting officer may require either that the contractor furnish a receipted copy of the bill of lading or postal receipt, or that a representative of the Government certify as to actual delivery on the applicable inspection and receiving report form. Invoicing instructions to F.O.B. origin contractors shall require that the contractor state on all invoices (1) the date of shipment, name of carrier, and bill of lading number, or (2) the name and title of the Government representative to whom delivery was made and date of such delivery. (b) Where payment has been made on the basis of a certificate, and the supplies have not been received at destination, prompt follow-up and remedial action will be initiated. [25 F.R. 14292, Dec. 31, 1960] § 14.203 Point of acceptance. Each contract shall specify the point of acceptance. Contracts which provide for delivery F.O.B. destination shall provide for acceptance at destination whether inspection is to occur at destination or at origin. Contracts which provide for delivery F.O.B. origin shall ordinarily provide for acceptance (and inspection) at origin. [25 F.R. 14292, Dec. 31, 1960] § 14.204 Responsibility for acceptance. (a) Acceptance is the responsibility of the contracting officer, or his authorized representative. Where an activity uses services of another activity or Department for the purpose of acceptance, acceptance by the other activity or Department is binding on the activity for which the services are performed. (b) Certificates of conformance may be required by the contract when the value of supplies or the condition of purchase, delivery, receipt or use thereof make it desirable to have additional assurance that supplies conform to contract requirements. A contractor's certificate of conformance with requirements may be considered a proper element incident to acceptance of supplies or services. However, in instances where small losses would be incurred in the event of defects or where knowledge of the supplier's reputation or past performance provides assurance that the supplies would be replaced without contest, such certificate may be used as the sole basis for acceptance. At the discretion of the contracting officer, a clause may be inserted in contracts requiring the contractor to certify that supplies or services comply with contract requirements. In no case shall the Government's right to inspect supplies or services be jeopardized (see § 14.101). (c) When the contracting officer determines that it is in the best interest of the Government for acceptance to precede inspection, a clause will be used to reserve the Government's right after acceptance to inspect supplies within a reasonable time after delivery and to reject defective items. [27 F.R. 11663, Nov. 27, 1962] § 14.205 Acceptance of supplies or services not conforming with contract requirements. When supplies or services tendered for acceptance do not conform with contract requirements, the applicable contract provisions shall govern the action to be taken. See § 14.107. For reasons of economy or the urgency of the requirement, acceptance of supplies or services which do not meet all contract requirements may occasionally be desirable. Prior to such acceptance, the contracting officer shall obtain the approval of the requiring activity where the nonconformity with contract requirements (a) affects matters such as safety, durability, performance, or interchangeability of parts or assemblies, (b) results in material increases in weight, where weight is a significant consideration, or (c) affects the basic objectives of the specifications. Acceptance of these types of nonconforming supplies or services shall be covered by an appropriate modification of the contract. Acceptance of other types of nonconforming supplies and services shall be covered by contract modification if determined necessary by the contracting officer. [25 F.R. 14292, Dec. 31, 1960] PART 15-CONTRACT COST PRINCIPLES AND PROCEDURES Sec. 15.000 Scope of part. Subpart A Applicability 15.101 Scope of subpart. 15.205-33 15.102 Cost-reimbursement supply and research contracts with concerns other than educational institutions. 15.205-34 Rental costs (including sale and 15.205-35 15.205-36 tracts with educational institutions. Research and development costs. Royalties and other costs for use of patents. 15.603 Cost principles and their use. AUTHORITY: The provisions of this Part 15 issued under R.S. 161, secs. 2202, 2301-2314, 70A Stat. 120, 127-133; 5 U.S.C. 22, 10 U.S.C. 2202, 2301-2314. § 15.000 Scope of part. This part contains general cost principles and procedures for the determination and allowance of costs in connection with the negotiation and administration of cost-reimbursement type contracts and contains guidelines for use, where appropriate, in the evaluation of costs in connection with certain negotiated fixedprice type contracts and contracts terminated for the convenience of the Government. [25 F.R. 14293, Dec. 31, 1960] Subpart A Applicability § 15.101 Scope of subpart. This subpart describes the applicability of succeeding subparts of this part to the various types of contracts in connection with which cost principles and procedures are used. [25 F.R. 14293, Dec. 31, 1960] § 15.102 Cost-reimbursement supply and research contracts with concerns other than educational institutions. This category includes all cost-reimbursement type contracts (§ 3.405 of this chapter) for supplies, services, or experimental, developmental, or research work (other than with educational institutions, as to which § 15.103 applies), except that it does not include facilities contracts (see § 15.105) or construction contracts (see § 15.104). The cost principles and procedures set forth in Subpart B of this part shall be incorporated by reference in cost-reimbursement supply and research contracts with other than educational institutions as the basis (a) For determination of reimbursable costs under such contracts, includ ing cost-reimbursement type subcon tracts thereunder, and the cost reimbursement portion of time-andmaterials contracts (§ 3.406-1) of this chapter) except in such contracts where material is priced on a basis other than at cost in accordance with § 3.406-1(d) of this chapter; (b) For the negotiation of overhead rates (Subpart G, Part 3 of this chapter); and (c) For the determination of costs of terminated cost-reimbursement type contracts where the contractor elects to "voucher out" its costs (Subpart D, Part 8, of this chapter), and for settlement of such contracts by determination (§ 8.209-7 of this chapter). [25 F.R. 14239, Dec. 31, 1960, as amended st 26 F.R. 9641, Oct. 12, 1961; 27 FR. 4016, Apr. 27, 1962] § 15.103 Cost-reimbursement research contracts with educational institu tions. This category includes all cost-reimbursement type contracts (§ 3.405 of this chapter) for experimental, developmental, or research work with educational institutions. The cost principles and procedures set forth in Subpart C of this part shall be incorporated by reference in cost-reimbursement research contracts with educational institutions $4 the basis (a) For determination of reimbursable costs under cost-reimbursement type contracts, including cost-reimbursement type subcontracts thereunder; (b) For the negotiation of overhead rates (Subpart G, Part 3 of this chap ter); and (c) For the determination of costs d terminated cost-reimbursement type contracts where the contractor elects to "voucher out" its costs (Subpart D, Par 8, of this chapter), and for settlement of such contracts by determination (§ 8.209-7 of this chapter). In addition, Subpart C of this part is to be used in determining the allowable costs of research and development performed by educational institutions under grants. [25 F.R. 14293, Dec. 31, 1960, as amended at 27 F.R. 4015, Apr. 27, 1962] § 15.104 Construction contracts. (a) Subpart D of this part contains principles and procedures for the evalu ation and determination of costs in connection with contracts and subcontracta |