Prior Amendments 1961: 26 F.R. Mar. 28. Subpart F-Use of Government Owned Industrial Facilities on Work Other Than for a Military Department § 13.600 Scope of subpart. The preceding subparts of this part are intended to be applicable only to those situations in which Government property is provided to contractors or subcontractors of any tier, for use in connection with procurement by the military departments. This subpart relates to making available to contractors, former contractors, or other parties Government-owned industrial facilities under the control of a military department solely or principally for non-defense use. (As to making industrial facilities available principally for use in connection with procurement by military departments and incidentally for non-defense use, see § 13.407.) The question of making industrial facilities available for non-defense use may arise with respect to such property in the possession of the Government (e.g., machine tools in reserve storage) or in the possession of the potential user (e.g., where a contractor has completed the contract under which the property was originally provided.) Basic authority to permit the use of Government property on work other than for a military department is found in statutes authorizing the Secretaries to lease property under their control (see 10 U.S.C. 2667). [27 F.R. 1714, Feb. 22, 1962] Prior Amendments 1961: 26 F.R. 5309, June 14. § 13.601-1 General. Whenever industrial facilities are made available for nondefense use, the user shall be charged a fair and reasonable rental; provided, that under Departmental procedures consistent with § 13.407(a) rental may be waived with regard to such property furnished solely for use in performing work for Government agencies. Such rental unless otherwise specified herein shall be established on the basis of sound commercial practice, including any prevailing commercial rates. Except as otherwise provided in § 13.601-2, such rental may, where permitted by the law under which sources. the contract or agreement is executed, take into consideration obligations assumed by the user to protect and maintain the property as well as to perform other services as all or part of the consideration for the contract or agreement. The rental shall, in any event, be such as to prevent the user from obtaining an unfair competitive advantage by reason thereof over competitors who own their facilities or obtain them from private The rental shall be charged on the basis of the time during which the property is available for use rather than on the basis of the time during which the property is actually used, except in the case of facilities, other than those covered by § 13.601-2, where it is determined by the Secretary concerned, or his representative duly authorized to approve the contract or agreement by which the property is made available, to be impracticable or contrary to the best interest of the Government. The Government shall make no warranty, express or implied, regarding the condition or fitness for use of any item of property. [27 F.R. 1714, Feb. 22, 1962] department concerned under the Foreign Assistance Act of 1961 as amended or such use is legally authorized by an agreement with the foreign government; (c) The foreign government's placing of the contract directly with the contractor is consistent with the best interest of the United States; (d) It appears that the foreign government will place the contract with the contractor whether or not such use is authorized, or that no competitive pricing advantage will accrue to the contractor by virtue of such use; and (e) The contractor agrees that no charge for the use of the facilities or tooling shall be included in the price charged the foreign government under the contract. [27 F.R. 11662, Nov. 27, 1962] Subpart H-Transfer of Title to Equipment to Nonprofit Education or Research Institutions [Revoked] CODIFICATION: Subpart H (§§ 13.800 13.803) was revoked, 27 F.R. 6139, June 29, 1962. to Activities responsible for inspection. [Revised] Inspection interchange ments. [Revised] agree Contractor responsibility. [Revised] 14.105-1 General. [Revised] Subpart A-Inspection § 14.100-1 Inspection. Inspection means the examination (including testing) of supplies and services (including, when appropriate, raw materials, components, and intermediate assemblies) to determine whether the supplies and services conform to contract requirements. [27 F.R. 11662, Nov. 27, 1962] § 14.100-2 Testing. Testing is an element of inspection and generally denotes the determination by technical means of the properties or elements of supplies, or components thereof, and involves the application of established scientific principles and procedures. [27 F.R. 11662, Nov. 27, 1962] § 14.101 General. (a) Inspection on behalf of the Government shall be conducted in all cases prior to acceptance, except as permitted by § 14.204(b). Inspection shall be accomplished by or under the direction or supervision of Government personnel. Except as otherwise provided in the contract, test requirements may be performed in the contractor's or subcontractor's laboratory or any other laboratory acceptable to the Government. The contractor may be required under the terms of the contract to establish and maintain an acceptable inspection or quality control system to assure compliance with contract specifications with a minimum of Government inspection. manufacturer's certificate or other statement of quality or quantity may be considered in determining whether supplies or services are in conformity with the contract; but no provision of the contract shall preclude the Government from performing inspection. A (b) The type and extent of inspection needed depend on the particular procurement. For example, for items which would involve small losses in the event of defects and which would probably be replaced by suppliers without contest, inspection may consist only of checks for identity, quality, and shipping damage. [27 F.R. 11662, Nov. 27, 1962] § 14.102 Activities responsible for in spection. Inspection, or the arrangement therefor, is the responsibility of the contract ing activity. Where a Department or activity uses the inspection services of another Department or activity, the Department or activity performing such inspection has primary inspection cognizance and its inspection determinations are binding on the Department or activity for which the inspection services are performed. In coordinated or interdepartmental procurements where Government inspection is to be made at the source, it generally will be made by inspectors of the contracting agency; but this general rule does not alter inspection interchange agreements or preclude the use of inspectors of another Department or activity located at or servicing the contractor's plant or construction site. Where Government inspection at destination is required in coordinated or interdepartmental procurements, the requiring agency or activity may be requested to arrange for the inspection. [27 F.R. 11662, Nov. 27, 1962] § 14.103 Inspection interchange agree ments. (a) By appropriate inspection interchange agreements departments and activities shall provide for the use of inspection services of other departments, activities or Government agencies when such use will assure the most economical and effective inspection consistent with the best interest of the Government. Inspection interchange agreements shall be designed to eliminate duplication, overlapping, or multiple assignments of Government inspection activities in any one place. Wherever there are multiple Government inspection assignments in a supplier's plant, or place where the work is performed, each of the activities involved shall arrange for the interchange of the inspection services. Specific contracts may be exempted from interchange agreements if they are: (1) Contracts for research, development, testing or experimental work involving inspection tasks that the originating activity determines can be most effectively performed by the inspection activity of the same service; (2) Production contracts which can be effectively serviced only by inspectors having advanced training to perform unusual or highly technical tasks. The purpose of such exemptions is to economically utilize the special skills attained in the course of contracts exempted under subparagraph (1) of this paragraph, and/or to develop and main tain a cadre of inspectors trained to perform unusual or highly technical inspection tasks in support of mobilization requirements. (b) Departmental procedures should permit detailed inspection interchange agreements to be initiated and completed at the operating level which is in a position to insure coordinated and effective implementation. Where the operating levels of a Department are unable to reach inspection interchange agreements or the propriety of exemptions is questioned and cannot be resolved, such matters shall be referred independently by the operating level activity through channels to the head of the Department for resolution. (c) Inspection interchange agreements shall be in accordance with the following: (1) When inspection is to be made by other activities within the Department of Defense such inspection shall be performed without reimbursement except to the extent that reimbursement in kind is practicable. (2) When inspection is to be made by or for other Government agencies, such inspection will be made on a mutually acceptable basis. Reimbursement for inspection conducted for such agencies shall be on a mutually acceptable basis in accordance with Public Law 85-781, due consideration being given to possible savings and increased efficiency for the Government as a whole. (3) All agreements shall include specific provision for: (i) use of the practices, records, and forms of the activity performing inspection, unless the use of others is mutually agreeable; (ii) channels of communication; and (iii) designation of source and delivery date of any Government inspection equipment to be supplied. [27 F.R. 11663, Nov. 27, 1962] § 14.104 Contractor responsibility. The standard inspection clauses in Part 7 of this chapter require the contractor to maintain an inspection acceptable to the Government and records of all inspection work performed by the contractor. The contractor's inspection system should be such as to provide reasonable assurance that the supplies and work under the contract will conform to contract requirements and should include any quality control procedures necessary to this end. Contracts for complex supplies shall include the Quality Control System clause in § 7.104-28 of this chapter. This clause specifically requires contractors to maintain a quality control system acceptable to the Government. In this regard the contracting officer, or his representatives, shall assure that the contractor maintains adequate quality control measures for all manufacturing processes and documentation pertinent to quality, testing and inspection, fabrication, and delivery. Government inspection activities shall plan and conduct systematic evaluation and verification of suppliers' inspection systems, quality control systems, and supplies, for the purpose of obtaining the maximum assurance of quality consistent with efficient use of Government and contractor manpower and facilities. In any case, when military or Federal specifications are used to establish requirements in the contract, the supplier shall be required to perform all examinations and tests called for by the contract requirements and specifications except those which are reserved for performance by the Government. [27 F.R. 11663, Nov. 27, 1962] § 14.105-1 General. Each contract shall designate the place or places of inspection. Inspection of supplies and services shall be made at such times and places (including any stage during the period of manufacture, and including subcontractors' plants) as are necessary to determine that the supplies and services conform to contract requirements. Where the contract provides for inspection at source, shipment prior to inspection may be authorized if it is determined to be in the best interest of the Government. In such cases, to the extent appropriate, the contract should be modified prior to shipment with respect to (a) risk of loss in transit, and (b) shipping and other expenses incurred in the event of rejection at destination. Where the contract provides for inspection at source, the place or places of inspection may not be changed without the authorization of the contracting officer. [27 F.R. 11663, Nov. 27, 1962] ing performance of the contract is essential; [Paragraph (e) amended, 27 F.R. 11663, Nov. 27, 1962] § 14.107 Rejection of nonconforming supplies or services. Contractors ordinarily shall be given an opportunity to correct or replace nonconforming supplies or services if this can be done within the required delivery schedule. Unless the contract provides otherwise, such correction or replacement shall be without additional cost to the Government. The standard inspection clause in § 7.103-5(c) of this chapter reserves to the Government the right to charge the contractor the cost of Government reinspection and retests because of prior rejection. Notices of rejection of nonconforming supplies or services need not be in writing unless (a) the supplies have been delivered to a point other than the contractor's plant, (b) the contractor persists in offering nonconforming supplies or services for acceptance, or (c) delivery or performance is overdue without excusable cause. The reasons for rejection normally shall be stated. If timely notice of rejection is not furnished to the contractor, acceptance may in certain cases be implied as a matter of law from such omission. Therefore, notices of rejection should be furnished promptly to contractors whenever rejection is intended. [27 F.R. 11663, Nov. 27, 1962] § 14.108 Government inspection under subcontracts. Government inspection of subcontracted supplies or services shall be made only when required in the interest of the Government. The primary purpose of subcontract inspection is to assist the Government inspector cognizant of the prime contractor in determining the conformance of supplies or services with contract requirements. It does not relieve the prime contractor of any of his responsibilities under the contract. Supplies and services that do not qualify under the criteria in § 14.105-2 for Government inspection at source shall not be inspected by the Government at the subcontractor's plant or at a construction site. Supplies and workmanship for which certificates, records, reports, and similar evidence of quality are available at the prime contractor's plant or site shall not be Government inspected at the subcontractor's plant except occasionally to verify such evidence. However, Government inspection shall be performed at a subcontractor's plant or site whenever the Government prime contract requires. All oral and written statements and contract provisions relating to the inspection of subcontracted supplies shall be so worded as not to (a) affect the contractual relationship between the prime contractor, and the Government or between the prime contractor and the subcontractor, (b) establish a contractual relationship between the Government and the subcontractor or (c) constitute a waiver of the Government's right to inspect or reject supplies. (27 F.R. 11663, Nov. 27, 1962] Inspection will be performed only for friendly foreign governments or international agencies and shall be administered in accordance with the foreign policy and security objectives of the United States. Such inspection will be provided only where consistent with or required by legislation, executive orders, or Department of Defense or departmental policies concerning mutual security programs, setting forth foreign policy and security objectives. When inspection is performed outside the United States, the levels of technical capability and the administrative procedures not already prescribed in existing laws, executive orders, or Department of Defense policies will be in accordance with arrangements suitable and acceptable to United States country teams or commanders of unified and specified commands, as appropriate. [27 F.R. 11663, Nov. 27, 1962] 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] § 14.204 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 |