Credit Corporation

Procurement effected outside the United States. [Revoked]

Subpart F-Procurement of Livestock Products

4.601 General.

4.602

[Added]

Definition of livestock products.

4.603 Exception.

4.604

Procedures.

4.605 Statement of eligibility.

4.606 Humane method of livestock slaughter clause.

4.607 Reporting violations.

AUTHORITY: §§ 4.100 to 4.607 issued under sec. 2202, 70A Stat. 120; 10 U.S.C. 2202. Interpret or apply secs. 2301-2314, 70A Stat. 127-133; 10 U.S.C. 2801-2314.

Subpart A-Procurement of

Construction [Added]

SOURCE: $ 4.100-4.106 appear at 26 FR. 9636, Oct. 12, 1961, except as otherwise noted. § 4.100 Scope of subpart.

Contracting procedures peculiar to construction contracts are set forth in this subpart and, in certain instances, other portions of this subchapter having particular significance to construction contracts are cross-references herein. This subpart, however, does not contain or cross-reference all provisions of this subchapter applying to construction contracts. Other provisions of this subchapter are also applicable to construction contracts and shall be adhered to where applicable.

§ 4.101 § 4.101-1

General policy.

Methods of procurement.

The requirements of this subchapter prescribing the use of the formal advertising method of procurement are, in the case of construction contracts, based not only on the Armed Services Procurement Act, but also on Congressional enactments contained in other applicable acts such as the annual Military Construction Appropriation Act. Except in special instances, such as overseas construction and construction of a highly classified or experimental nature, construction shall ordinarily be procured by means of formal advertising. Notwithstanding the provisions of

§ 3.206-2 of this chapter, overseas construction may be procured by means of formal advertising provided that the Head of the Procuring Activity, or his designee, determines that the use of formal advertising in strict accordance with Part 2 of this chapter is practicable and advantageous to the U.S. as to a specific country or other geographic area outside the United States, its possessions, and Puerto Rico.

§ 4.101-2 Government estimates for fixed-price type contracts.

(a) An independent Government estimate shall be prepared for each proposed fixed-price type construction contract (whether lump sum or unit price), and for supplemental agreements and change orders to such contracts, anticipated to cost $10,000 or more. An estimate may be prepared, in the discretion of the contracting officer, in the case of a construction contract anticipated to cost less than $10,000. Except as provided below, access to or disclosure of information concerning the Government estimate shall be limited to Government personnel whose official duties require knowledge of the estimate.

(b) The Government estimate shall be designated "For Official Use Only" unless the nature of the information contained therein requires security classification, in which event it shall be handled in accordance with applicable security regulations. The "For Official Use Only" designation shall be removed only when the estimate is made public in accordance with instructions below.

(c) If the procurement is to be made by means of formal advertising, a copy of the Government estimate shall be sealed and kept locked with the bids until bid opening. Immediately after all bids have been opened, read, and recorded, the estimate shall be opened, the "For Official Use Only" designation removed and the estimate read and recorded in the same detail as the bids.

(d) In the case of a negotiated procurement, the "For Official Use Only" designation shall be removed immediately after award, and the estimate may then be released to an individual or firm upon request.

§ 4.101-3 Disclosure of approximate value of construction projects. Advance notices, invitations for bids and requests for proposals on construc

tion projects shall include, where the estimated value of the work is $25,000 or more, a statement of the approximate value of the proposed construction. Such statements shall be in increments indicative of the expected price range of the procurement as outlined below. In no event will the approximate value reveal the actual Government estimate. The following is a guide for disclosure of approximate values:

(a) The nearest multiple of $25,000 when approximate value is between $25,000 and $100,000;

(b) The nearest multiple of $100,000 when approximate value is between $100,000 and $1,000,000;

(c) The nearest multiple of $500,000 when approximate value is between $1,000,000 and $10,000,000; and

(d) Over $10,000,000 for all jobs whose approximate value is in excess of this amount.

§ 4.101-4 Statutory cost limitations.

Invitations for bids and requests for proposals for construction items shall identify each type of item subject to a statutory cost limitation, indicate the amount of the applicable limitation, and require that bids and proposals contain one or several schedules setting forth separately the price for each such type of item. Bidders and proposers shall be required to certify that each such price includes an approximate apportionment of all estimated applicable costs, direct and indirect, as well as overhead and profit. The provisions of the invitation for bids requiring such certification shall direct the attention of bidders to the statement made on the face of the invitation for bids required by § 2.201(a) (11) of this chapter; requests for proposals shall contain a similar provision. A bid or proposal containing prices that are within applicable statutory cost limitations only because such bid or proposal is materially unbalanced shall be rejected. A bid or proposal containing prices that exceed applicable statutory cost limitations shall be rejected, except that, if appropriate provision is made in the invitation for bids or request for proposals, separate award may be made on individual items whose price is within, or not subject to, any applicable statutory cost limitation. No such provision for separate award shall be made unless it is determined to be in the interests of the Government.

§ 4.102

Formal advertising. § 4.102-1 Mailing or delivery to prospective bidders.

On request, preinvitation notices and invitations for bid (with plans and specifications) for unclassified construction work will be furnished without charge to organizations which maintain plan display rooms for the benefit of contractors, subcontractors and material suppliers, without charge to the public. Requests from organizations in the United States may be honored on an annual or semiannual basis for all or for a stated class of construction projects. The geographical extent of this distribution shall be as determined on a case by case basis by the contracting officer. § 4.103

Negotiation.

In order to control subcontracting on such projects, the clause set forth in § 4.104-2 shall be used as prescribed therein.

§ 4.104-2 Contract clause.

The clause set forth below shall be included in all construction contracts estimated to exceed $1 million. In addition, this clause may be included in any other construction contract as may be deemed appropriate. When this clause is to be used in formally advertised construction contracts, appropriate instructions as set forth in § 2.201 (c) (2) of this chapter shall be included in invitations for bids; similar instructions shall be included in requests for proposals. The purpose of the subject clause is to assure adequate interest in, and supervision of construction work by prime contractors. However, it is also essential that the need be considered, on a case by case basis, for requiring adequate, specifically described supervision. PERFORMANCE OF WORK BY CONTRACTOR (Aug. 1961)

The Contractor shall perform on the site, and with his own organization, work equivalent to at least * percent (-- %)

of the total amount of the work to be performed under the contract. If during the progress of the work hereunder, the Contractor requests a reduction in such percentage, and the Contracting Officer determines that it would be to the Government's advantage, the percentage of the work required to be performed by the Contractor may be reduced; provided, written approval of such reduction is obtained by the Contractor from the Contracting Officer.

*NOTE: The required percentage shall be the maximum consistent with customary or necessary specialty subcontracting, complexity and magnitude of the work, and shall not, under any circumstances, be less than 20 percent.

§ 4.105 Types of construction contracts.

Construction contracts, generally, shall be of the firm fixed-price type unless another type contract is clearly more appropriate. Where the quantities of work, such as excavation, fill, dredging, squares of roofing to be repaired, etc., are estimated, consideration should be given to including a provision for adjustment of the unit price due to variation in quantities of the estimated items. Cost-plus-a-fixed-fee type contracts for construction in the United States, estimated to cost more than $25,000 and using Military Construction

funds, shall not be used without the approval of the Assistant Secretary of Defense (Installations and Logistics).

§ 4.106 Small construction contracts.

Notwithstanding the provision

of

§ 3.602(a) of this subchapter, all proposed small purchases of construction estimated to cost more than $2,000 shall be formally advertised, and lesser small purchases may be formally advertised. However, where negotiations have been commenced and the contract price proves to be more than $2,000 but not more than $2,500, § 3.203 of this subchapter may be used as authority to negotiate. Either Standard Form 19 or DD Form 1155 shall be used for construction contracts of $2,000 or less. (See § 16.401-3 of this subchapter.) [27 F.R. 3449, Apr. 11, 1962]

Prior Amendments

1962: 27 F.R. 1696, Feb. 22.

Subpart B-Procurement of Research

and Development [Added] SOURCE: §§ 4.200 to 4.214-4 appear at 27 F.R. 6124, June 29, 1962, except as otherwise noted.

§ 4.200 Scope of subpart.

Procurement procedures of special application to research and development contracts are set forth in this subpart, and in certain instances other portions of this subchapter having particular significance to research and development contracts are cross-referenced herein. This subpart however, does not purport to contain or cross-reference all provisions of this subchapter applying to research and development contracts. Other provisions of this subchapter are also applicable to research and develop

(a) "Basic Research" means that type of research which is directed toward increase of knowledge in science. In such research, the primary aim of the investigator is a fuller knowledge or understanding of the subject under study, rather than any practical application thereof.

(b) "Applied Research" means that type of effort which (1) normally follows basic research, but may not be severable from the related basic research, (2) attempts to determine and expand the potentialities of new scientific discoveries or improvements in technology, materials, processes, methods, devices, and techniques, and (3) attempts to "advance the state of the art". Applied research does not include any such efforts when their principal aim is the design, development, or test of specific articles or services to be offered for sale, which are within the definition of the term development as hereinafter provided.

(c) "Development" is the systematic use of scientific knowledge which is directed toward the production of, or improvements in, useful products to meet specific performance requirements, but exclusive of manufacturing and production engineering.

(d) "Educational or other nonprofit organization" means any corporation, foundation, trust, or institution operated for scientific, educational, or medical purposes, not organized for profit, no part of the net earnings of which inures to the profit of any private shareholder or individual.

(e) "Unsolicited proposal" is a research or development proposal which is made to the Government by a prospective contractor without prior formal or informal solicitation from a purchasing activity.

§ 4.202 General policy.

A fundamental mission of research and development programs is to maintain scientific and technological superiority requisite to promote and advance the effectiveness of military operations. The accomplishment of this mission requires the broadest possible base of contractor and subcontractor sources including the optimum use of manpower and resources. It is essential that the best technical competence be located and fully utilized. The procurement pattern

of research and development must be responsive to the achievement of these goals on a timely basis.

§ 4.203

Publicizing procurement actions and expanding sources.

The Departments shall continually search for and develop information on sources (including small business concerns) competent to perform research and development. Advance publicity, including use of the Commerce Business Daily (see § 1.1003-4 of this chapter) to the fullest extent practicable, shall be given for this purpose. The search should include (a) a review of relevant data or brochures furnished by sources seeking research and development work and (b) a cooperative effort by technical personnel, small business specialists, and contracting officers to obtain information and recommendations with respect to potential sources and to consider the desirability of seeking other sources by publication of proposed procurements, in addition to the synopsis requirement. [28 F.R. 12561, Nov. 23, 1963

§ 4.204 Method of contracting.

In research and development procurements it is generally not possible to formulate precise specifications necessary for formal advertising and, therefore, negotiation is necessary. The inherent difficulties in obtaining research and development by formal advertising are recognized by the exception in § 3.211 of this chapter. However, twostep formal advertising as stated in Subpart E, Part 2 of this chapter, may be useful, for example, in the case of an advanced developmental project. While the use of negotiation is the general rule for research and development contracts, this does not diminish the obligation to obtain competition to the maximum practicable extent. (See Subparts A and B, Part 3 of this chapter.)

§ 4.205 Selection of research and de velopment contractors.

§ 4.205-1 Selection of sources.

(a) General. Through its research and development programs, the Department of Defense must seek the most advanced scientific knowledge attainable and the best possible equipment, weapons, and weapons systems that can be devised and produced. This means two things. First, it means seeking the best scientific and technological sources.

Second, it means unremitting efforts to increase the number of sources, and to encourage participation by small business concerns, as well as others, in Defense research and development.

(b) Small business sources. (1) Contracting officers, technical personnel, and small business specialists shall cooperatively seek and develop information on the technical competence of small business concerns for research and development contracts. Small business specialists shall regularly bring to the attention of contracting officers and technical personnel descriptive data, brochures, and other information as to small business concerns that are apparently competent to perform research or development work in fields in which the purchasing activity is interested.

(2) In order to cooperate with the Small Business Administration in carrying out its responsibility of assisting small business concerns to obtain contracts for research and development, contracting officers, technical personnel and small business specialists shall, upon request, provide to authorized SBA representatives information necessary to understand the Government's needs concerning research and development programs under consideration for specific future procurement actions. Normally, this information shall be provided to SBA representatives assigned to a purchasing activity, as early as practicable, and shall cover the Government's requirements for each proposed research and development procurement exceeding $10,000. To the maximum extent feasible, SBA shall be afforded a minimum of 15 working days to provide pertinent information concerning qualified potential small business sources developed through its investigation of the capabilities of specific firms in the particular field of research and development covered by such procurements. Full evaluation shall be given to any such information in selecting qualified sources. Exception to the policy of providing SBA a minimum 15 working day interval to recommend additional qualified small research and development sources for a proposed procurement will be permitted only in those cases where the head of the purchasing activity or his designated representative advises the SBA representative that such action would result in unjustifiable delay.

[Subparagraph (2) amended, 28 F.R. 12561 Nov. 23, 1963]