not filled by awards made in accordance with the provisions of the Notice of Labor Surplus Area Set-Aside (see 1.804); or (B) disaster area programs; and

(ii) procurements made in keeping with the small business programs (A) after unilateral determinations for set-asides; or (B) to place the total or any part of the requirements set-aside unilateral or joint which are not filled by awards to small business concerns, when no other negotiating authority is appropriate and the use of formal advertising is not feasible and practicable (see 1.706-8).

GEORGE J. VECCHIETTI,
Director of Procurement.

GENERAL SERVICES ADMINISTRATION

APPENDIX L

(Information regarding GSA awards to small business in fiscal year 1968 follows:)

Date: October 25, 1968.

Reply to attention of: Harold T. McCullough, ALIB.

Subject: Procurement report by civilian executive agencies.

To: Mr. Henry Robinson.

Attached is a copy of the transmittal letter addressed to the various committees indicated thereon concerning the report on procurement by civilian executive agencies for fiscal year 1968. The data for the General Services Administration you requested is as follows:

DEFENSE SUPPLY AGENCY

APPENDIX M

(National Production Authority Regulation No. 2 follows:)
U.S. DEPARTMENT OF COMMERCE-NATIONAL PRODUCTION AUTHORITY
Title 32A-National Defense, Appendix

CHAPTER VI—NATIONAL PRODUCTION AUTHORITY, DEPARTMENT OF COMMERCE (NPA Reg. 2, as amended March 23, 1953)

Reg. 2-Basic rules of the priorities system

This regulation, as amended, is found necessary and appropriate to promote the national defense and is issued pursuant to the Defense Production Act of 1950, as amended. In the formulation of this regulation as amended, consultation with industry representatives has been rendered impracticable because this regulation applies to all trades and industries.

EXPLANATORY

This regulation, as amended, affects NPA Reg. 2, as amended November 10, 1952, and as further amended by Amendment 1 of March 11, 1953, as follows: In order to conform with the Defense Materials System regulations and Direction 21 to CMP Regulation No. 1, which will become effective March 23, 1953, the changes in NPA Reg. 2 referred to in this paragraph have been made. In section 3, paragraph (a) (1), the reference to B5 as a suffix is omitted. In the same section, paragraph (c)) is amended and paragraph (d) is deleted. Minor changes are made in section 8, paragraph (a), and in section 9, paragraph (d). A new sentence is inserted at the end of section 12, paragraph (a). In section 14, paragraph (d) is deleted, and paragraphs (e) and (f) are redesignated (d) and (e), respectively. A new section 26 is inserted and former section 26 is redesignated section 27. An additional item is added to paragraph 1 of List A.

Sec.

1. What this regulation does.

2. Definitions.

3. Ratings authorized.

REGULATORY PROVISIONS

4. When ratings may be assigned or applied.

5. When ratings may be extended for material.

6. Additional restrictions upon the use of ratings for certain materials.

7. Use of ratings for services.

8. How to apply or extend a rating.

9. Special provisions applicable to extensions; grouping of orders.

10. Rules for acceptance and rejection of rated orders.

11. Report to NPA of improperly rejected orders.

12. Cancellation of ratings.

13. Sequence of filling rated orders.

14. How changes in customers' orders affect ratings.

15. Delivery or performance dates.

16. Mandatory orders and directives.

17. Use or disposition of material acquired under this regulation.

18. Delivery for unlawful purposes prohibited.

19. Intracompany deliveries.

20. Effect of ratings upon materials subject to inventory restrictions. 21. Scope of regulations and orders.

22. Defense against claims for damages.

23. Request for adjustment or exception.

24. Records and reports.

25. Communications.

26. False statements. 27. Violations.

AUTHORITY: Sections 1 to 27 issued under sec. 704, 64 Stat. 816, Pub. Law 429, 82d Cong.; 50 U.S.C. App. Sup. 2154. Interpret or apply sec. 101, 64 Stat. 799, Pub. Law 429, 82d Cong.; 50 U.S.C. App. Sup. 2071; sec. 101, E.O. 10161, Sept. 9, 1950, 15 F.R. 6105; 3 CFR, 1950 Supp.; sec. 2, E.O. 10200, Jan. 3, 1951, 16 F.R. 61; 3 CFR, 1951 Supp.; secs. 402, 405, E.O. 10281, Aug. 28, 1951, 16 F.R. 8789; 3 CFR, 1951 Supp. SECTION 1. What this regulation does. This regulation states the basic rules of the priorities system to be administered by the National Production Authority. It states what kind of orders are rated orders, how to place them, and the preference status of such orders. These rules apply to all business transactions within the jurisdiction of NPA unless more specific regulations, orders, or directives of NPA state otherwise.

SEC. 2. Definitions. (a) "Person" means any individual, corporation, partnership, association, or any other organized group of persons, and includes any agency of the United States or any other government.

(b) "Materials" means any raw, in-process, or manufactured commodity, equipment, component, accessory, part, assembly, or product of any kind. (c) "NPA" means the National Production Authority.

(d) "Rated order" means any purchase order, contract, or other form of procurement for materials or services bearing an authorized rating and the certification required by this regulation or any other applicable regulation or order of NPA.

(e) “Assignment" of a rating. A rating is assigned when NPA, or a Government agency that it has authorized, grants a person the right to use the rating. (f) "Application" of a rating. A rating is applied when the person to whom it is assigned uses the rating.

(g) "Extension" of a rating. A rating is extended when it is used by the person to whom it was applied or when it is further used by another person to whom it was extended.

SEC. 3. Ratings authorized. (a) The following ratings are authorized:

(1) A DO rating. This rating will be indicated by the prefix DO and an identification of the program which must be furnished a supplier by the person who is using the rating.

(2) A DX rating. This rating will be indicated by the prefix DX and an identification of the program. The DX rating will be authorized for use only as an emergency rating, to obtain products and materials in cases of extreme urgency. Except where expressly provided to the contrary in any NPA regulation or order, any provision of any NPA regulation or order applicable to any DO rating shall also be applicable to any DX rating. For example, in the case of an NPA order which provides for a limitation on the acceptance of DO-rated orders by a supplier, a DX-rated order shall be considered, only for the purpose of such limitation, as though it were a DO-rated order.

(b) Rated orders shall have the following preferential status:

(1) All DX rated orders will have equal preferential status. Any DX rated order shall take priority over any unrated or DO rated order.

(2) All DO rated orders will have equal preferential status. Any DO rated order shall take priority over any unrated order.

(c) A rating shall have no effect on deliveries on orders calling for delivery of "controlled materials" as defined in CMP regulations or DMS regulations. SEC. 4. When ratings may be assigned or applied. (a) A claimant agency, or other person designated by NPA, may be authorized by NPA to assign or apply a rating. However, no authorization to assign or apply ratings, whether by delegation, regulation, or otherwise, shall include authority to assign or apply a DX rating, unless expressly so stated therein.

(b) When a regulation, order, or certificate assigns a rating to any person either by naming him or by describing the class of persons to which he belongs, that person may apply the rating to get delivery of materials or the performance of certain services.

(c) No person may place rated orders for more material than he is authorized to rate even though he intends to cancel some of the orders or reduce the quantity of material ordered to the authorized amount before it is all delivered.

SEC. 5. When ratings may be extended for material. (a) When a person has received a rated order for the delivery of material, he may extend the rating to get the material which he will deliver on that order, or which will be physically incorporated in the material which he will deliver, including containers and packaging materials required to make the delivery, and including also chemicals 84-790-68-82

directly used in the production of the material. If the material is to be processed, this includes the portion of it which would normally be consumed or converted into scrap or byproducts in the course of processing. However, he may not extend such a rating to get material for plant improvement, expansion, or construction, or to get machine tools or other items which he will carry as capital equipment, or to get maintenance, repair, or operating supplies.

(b) If a person has made delivery of material or has incorporated it into the material which he has delivered on a rated order, he may extend the rating to replace it in his inventory subject to the inventory provisions of any NPA regulation or order. Any material ordered with a rating as replacement in inventory must be substantially the same as the material which the person delivered or incorporated in the material which he delivered, except for minor variations in size, shape, or design.

SEC. 6. Additional restrictions upon the use of ratings for certain materials. The ratings established by this regulation shall have no effect upon deliveries of any of the items listed or referred to in List A of this regulation. No person shall use ratings to obtain any of such items, and no person selling any such items shall require a rating as a condition of sale. Any rating purporting to be used to obtain any such items on a preferred basis shall be void.

SEC. 7. Use of ratings for services. (a) When a person is entitled to use a rating to get processed material, he may furnish the unprocessed material to a processor and use the same rating to get the material processed.

(b) If NPA specifically authorizes a person to use a rating to get services, he may use it for that purpose.

(c) Except as provided in paragraphs (a) and (b) of this section, no person may use a rating to get services.

(d) A person to whom a rating for services, as distinct from the production or delivery of material, has been applied or extended may not extend the rating for any purpose.

SEC. 8. How to apply or extend a rating. (a) When a person applies or extends a rating, he must put the prefix DO and an identification of the program supplied to him; for example, DO-A9 or DO-D9, on his purchase order, or on a separate piece of paper attached to the order or clearly identifying it, together with the words "Certified under NPA Reg. 2," signed as prescribed in this section. This certificate constitutes a representation to the supplier and to NPA that the purchaser is authorized under the provisions of this regulation or CMP regulations or DMS regulations to use the rating for the delivery of the materials covered by the purchase order. A certification under any CMP regulation or DMS regulation shall be deemed to be a certification under this regulation.

(b) Certifications on purchase or delivery orders must be signed by the person placing the order or by a responsible individual who is duly authorized to sign for that purpose. The signature must be either by hand or in the form of a rubber stamp or other facsimile reproduction of a handwritten signature. If a facsimile signature is used, the individual who uses it must be duly authorized in writing to use it for this purpose by the person whose signature it is, and a written record of the authorization must be kept.

(c) When a rated order is placed by telegram, the rating identification and certificate must be set out in full in the telegram. It will be sufficient if the file copy of the telegram is signed in the manner required for certification by this regulation.

(d) On rated orders requiring shipment within 7 days, the substance of the certification may be stated verbally or by telephone. However, the following rules must be complied with:

(1) The person making the statement for the buyer must be a person duly authorized to make the certification.

(2) Both the buyer and the seller must promptly make a written record of the fact that the certification was given orally and the record must be signed by the buyer in the same way as a certification.

(e) The person who places a rated order, the individual whose signature is used, and the individual who approves the use of the signature, will each be considered to be making a representation to NPA that the statements contained in the certification are true to the best of his knowledge and belief. The person receiving the certification and any other information required to be included with it shall be entitled to rely on it as a representation of the buyer unless he knows or has reason to believe that it is false.