(e) Contracts for services. Due to the wide number of variables existing in this area no specific clause is provided for service contracts.

[35 FR 9924, June 17, 1970, as amended at 39 FR 35796, Oct. 4, 1974; 41 FR 27037, July 1, 1976]

§ 5A-1.317 Noncollusive bids and proposals.

The determinations required by § 51.317 and § 1-1.317, for transactions originating in the Procurement Operations Division, shall be made by the Assistant Commissioner for Procurement.

§ 5A-1.318 Disputes clause. [36 FR 6943, Apr 13, 1971]

§ 5A-1.318-1 Contracting officer's decision under the Disputes clause.

(a) The adequacy of the contracting officer's decision under the Disputes clause, as required by § 1-1.318-1, and of the contents of any subsequent notice of appeal, as provided for by § 5-60.201, shall be properly ensured. Accordingly, the following paragraphs shall be set forth in all contracting officer's decisions subject to the Disputes clause:

This decision is made in accordance with the Disputes clause and shall be final and conclusive as provided therein, unless a written Notice of Appeal addressed to the Administrator of General Services is mailed or otherwise furnished to the contracting officer. The Notice of Appeal, which is to be signed by you as the contractor or by an attorney acting on your behalf, and which may be in letter form, should indicate that an appeal is intended, should refer to this decision and should identify the contract by number. The Notice of Appeal should include a statement of the reason as why the decision is considered to be erroneous.

In the event you desire to file an appeal from this decision, there is enclosed for your convenience GSA Form 2465, Notice of Appeal, in triplicate, for completion and signature. All the items of information requested must be supplied. If sufficient space is not available on this form for each item, please attach a supplemental sheet sheets. Also attached is an additional copy of the form which should be completed and retained for your files. The Notice of Appeal

90-1337828

or

is to be signed by the appellant personally, if an individual, or, if not, by an authorized officer or duly authorized representative of the appellant organization and submitted in triplicate to the contracting officer.

The Notice of Appeal must be mailed or otherwise furnished to the contracting officer within 30 days from receipt of this decision or your appeal shall be considered untimely.

(b) Whenever a decision of the contracting officer is concerned with the termination of a contract and/or purchase order(s) for default, with a finding of inexcusability, GSA Form 2715, Decision of the Contracting Officer, as illustrated by §5A-16.950-2715, shall be used in lieu of that set forth in § 5A-1.318-1(a), above.

(c) Notice of appeal action under the above circumstances may be effected by use of GSA Form 2465, Notice of Appeal, as illustrated by 85A-16.9502465.

[36 FR 17576, Sept. 2, 1971, as amended at 37 FR 527, Jan. 13, 1972]

§ 5A-1.350 Advance notices of contract award.

Advance notice of award may be given by the contracting officer in writing, by telegraph, or orally. Notices shall include the identification of the invitation, description of the item quantity, price, and contract number assigned. Advance notices shall be followed as soon as possible by formal contract documents.

(a) Written notices. The form and content of written notices shall be essentially as shown in § 5A-76.101. Federal Supply Schedule contracts involving catalogs and price lists shall conform to the requirements of §5A73.120.

(b) Telegraphic notices. Telegraphic notices shall contain all of the information discussed in this § 5A-1.350. In addition, a statement that written confirmation will follow shall be made.

(c) Oral notices. Oral notices may be given only when the circumstances surrounding the procurement do not allow time for telegraphic notice and shall include all information normally included in written notices. Notices

shall also include a statement that written confirmation will follow.

(d) Circumstances which warrant advance notice. Advance notices of contract award may be issued by contracting officers under any of the circumstances listed below:

(1) A bid is about to expire and it is necessary to issue an award promptly. (2) Prompt action is necessary to give the contractor an opportunity to secure materials.

is

(3) Delivery or performance urgent and cannot await release of formal contract documents.

(4) Prompt action is necessary to secure advance predelivery samples.

(5) Prompt action is necessary to permit contractors to proceed with preparation of necessary catalogs and other Federal Supply Schedule data.

(6) Prospective contractor requests early notification and gives sufficient reason to the satisfaction of the contracting officer.

(7) Other circumstances which have been approved by the head of the procuring activity warrant advance notice.

(e) Prevalidation. If the contract requires prevalidation, funds shall be obligated prior to the release of the advance notice of award.

[39 FR 33516, Sept. 18, 1974]

§ 5A-1.352 Contract numbering.

§ 5A-1.352-2 Numbering system.

(a) Contract numbers shall be placed in the space provided on the applicable procurement forms, or if no space is provided, in the upper right hand corner of the contract document. Different contract numbers will be assigned for stock and nonstock items when they are combined in the same solicitation for offers.

(b) Contract numbers shall be assigned in sequence from 00001 thru 99999. When all numbers have been assigned, the sequence will begin again at 00001. The procuring activity shall maintain records to ensure continuity and control of issuance of contract numbers. (See § 5A-1.352-4.)

(c) Each contract number shall be prefixed by use of the symbol "GS," followed by a dash and the appropriate activity designation set forth in § 5A-1.352-2(d).

(d) The following designations shall be used to identify the appropriate activity (Central Office or GSA region) in which the procuring activity is located:

00 Central Office 01 Region 1 02 Region 2 03 Region 3

04 Region 4

05 Region 5

06 Region 6

07 Region 7

All contracts and agreements involving the payment of $20,000 or more in a single payment and all multiple-payment contracts, regardless of amount, shall be numbered. Contracts involving the payment of less than $20,000 in a single payment may or may not be numbered depending upon the needs of the procuring activity. In case of doubt whether the amount to be paid under a contract will be more or less than $20,000, or whether more than one payment may be necessary, the contract shall be numbered.

[39 FR 33516, Sept. 18, 1974]

10 Region 10

(e) The following designations shall be used to identify the procuring office:

C-Automated Data and Telecommunications Service.

E-Office of Administration.

J-Office of Property Management, FSS. S-Office of Procurement, FSS.

T-Office of Transportation and Public Utilities, FSS.

W-Office of Personal Property Disposal,

FSS.

(f) An example of the numbering system is: GS-02S-00001.

(1) The letters "GS" denote the General Services Administration.

(2) The number "02" identifies the location of the procuring office, in this case Region 2.

(3) The letter "S" identifies the procuring office, in this case the Office of Procurement.

(4) The number "00001" identifies the first contract made by the procuring office in this series.

(g) Each negotiated contract shall contain the symbol "NEG" inserted immediately above the contract number. Additional identification not inconsistent with that prescribed above may be used if necessary for the internal control and routing of contracts and related documents. Additional identification should be held to the minimum consistent with adequate control of contracts.

[39 FR 33516, Sept. 18, 1974, as amended at 41 FR 27037, July 1, 1976]

§ 5A-1.352-3 Numbering of small contracts.

Contracts negotiated under small purchase procedures in § 1-3.203 shall not normally be numbered. However, a contract number may be assigned (for reference and reporting purposes) when the resulting purchase order is to be written by an office other than the office awarding the contract. Purchase orders of this type shall be identified by special entries as provided below:

(a) An assigned contract number and a notation that the number was assigned for reference purposes only.

(b) A reference to the supplier's quotation.

(c) A reference to "Sec. 302(c)(3), 41 U.S.C. 252(c)(3)."

[39 FR 33516, Sept. 18, 1974]

§ 5A-1.352-4 Contract Register.

GSA Form 2728, Procurement Contract Register, shall be used to ensure continuity and control of contract numbers and for registering pertinent contract data. See § 5A-16.950-2728 of this chapter for illustration of the form.

[39 FR 33516, Sept. 18, 1974] § 5A-1.370 Warranties.

§ 5A-1.370-1 General.

A warranty clause gives the Government a contractual right to assert claims regarding the deficiency of sup

plies or services furnished, notwithstanding any other contractual provision pertaining to acceptance by the Government. Such a clause allows the Government additional time after acceptance in which to assert a right to correction of the deficiencies or defeats, reperformance, an equitable adjustment in contract price, or other remedies. This additional period of time may begin at the time of delivery or at the occurrence of a specified event and may run for a given number of days or months or until occurrence of another specified event. The value of a warranty clause depends upon the circumstances of the procurement; and its use, terms, and conditions are influenced by many factors (see § 5A1.370-3(b)). A warranty clause may be tailored to fit the individual procurement or class of procurements and may include special provisions for items shipped to overseas customers. [37 FK 22614, Oct. 20, 1972]

§ 5A-1.370-2 Policy.

(a) A warranty clause shall be used when it is found to be in the best interests of the Government after an analysis of the factors listed in § 5A1.370-3(b).

(b) Any warranty clause included in a contract shall not limit any rights afforded to the Government by the provision of the inspection clause relating to latent defects, fraud, and gross mistakes that amount to fraud. Care should be taken to insure that the warranty clause used and any other warranty provision in the contract (e.g., in the specification) are consistent, especially where performance specifications are used.

[37 FR 22614, Oct. 20, 1972]

§ 5A-1.370-3 Use of a warranty.

(a) Except for commercial warranties and warranties contained in Federal or military specifications, the decision to use a warranty clause shall be approved at the branch level in the Procurement Operations Division and at the division level in the Special Programs Division and the regional offices. Except for FSC class 8010 items, the approval of the Assistant Commissioner for Procurement, FSS, shall be

obtained prior to using any warranty clause not substantially similar to the warranty clause set forth in §5A1.370-4. For FSC class 8010, see § 5A72.106-7.

(b) In deciding whether to use a warranty clause, the following factors shall be considered:

(1) Nature of the item and its end use;

(2) Cost of the warranty and degree of price competition as it may affect this cost:

(3) Criticality of meeting specifications;

(4) Damages to the Government that might be expected to arise in the event of defective performance;

(5) Cost of correction or replacement, either by the contractor or another source, in the absence of a warranty;

(6) Administrative cost and difficulty of enforcing the warranty;

(7) Ability to take advantage of the warranty, as conditioned by storage time, distance of the using agency from the source, or other factors;

(8) Operation of the warranty as a deterrent against deficiencies;

(9) The extent to which Government acceptance is to be based upon contractor inspection or quality control;

(10) Whether because of the nature of the items the Government inspection system would not be likely to provide adequate protection without a warranty;

(11) Whether the industry's present quality program is reliable enough to provide adequate protection without a warranty, or, if not, whether a warranty would cause the contractor to institute an effective and reliable quality program;

(12) Reliance on "brand-name" integrity;

(13) Whether a warranty is regularly given for a commercial component of the end item being procured;

(14) Criticality of item for protection of personnel or property;

(15) Extent to which specifications safeguard the interest of the Government;

(16) The stage of development of the item and the state of art; and

(17) Customary trade practices. (c) Scope of warranty clause:

(1) The terms and conditions of a warranty clause vary with the circumstances of the procurement. The clause must state the duration of the warranty. The clause may either provide that the contractor will be liable for defects or nonconformance to contract requirements existing at the time of delivery or provide that the contractor will be liable for such defects or nonconformance which develop prior to the expiration of a specified period of time or before the occurrence of a specified event.

(2) Where the Government specifies the design of the item and its precise measurements, tolerances, materials, tests, or inspection requirements, the contractor's liability for defects or nonconformance should usually be limited to those in existence at the time of delivery.

(3) Where a contract contains performance specifications and design is of minor importance, the contractor's liability may extend to defects or nonconformance to specifications which may arise after delivery of the supplies or acceptance of the services. Normally, the warranty should be limited to defects or nonconformance existing at the time of delivery of the supplies or acceptance of the services. (4) Ordinarily, the remedy provided under a warranty clause to return nonconforming supplies to the contractor for correction or replacement should satisfy the Government's needs. However, where the supplies are of such nature (e.g., subsistence or drugs) that correction or replacement does not afford adequate remedy to the Government, the clause should provide: (i) That the contracting officer may either return the supplies to the contractor, dispose of them in a reasonable manner, or replace with similar supplies, and (ii) that the contractor shall be liable for any cost occasioned to the Government thereby.

(5) When it can be foreseen that it will not be practical to return an article for correction or replacement because of the nature of its use or the cost of preparation for its return (e.g., where operating equipment installed in a vessel, automobile, or truck needs only a correction or adjustment but to return it would require substantial ex

pense of removal from where it is installed), the clause should provide that the contractor or the Government may: (i) Correct the article in place at its location at the contractor's expense, or (ii) provide that the contractor shall furnish necessary replacement parts.

(6) Where it is determined that a warranty for the entire item is not advisable, a warranty may be required for a particular aspect of the item which may need special protection (e.g., installation, components, accessories, parts, subassemblies and preservation, packaging, and packing, etc.).

(d) Where a warranty clause is used in a supply contract, consideration shall be given to the inclusion of a provision requiring that the warranted items be so marked or that a warranty notice be furnished with the items. The marking or notice need not state the complete warranty; however, a statement noting that a warranty exists, its duration, and whom to notify concerning defects usually will suffice.

[37 FR 22614, Oct. 20, 1972]

§ 5A-1.370-4 Warranty clause for supply contracts.

(a) The following sets forth provisions to be used when developing a warranty clause for a specific commodity. These provisions may be modified to accommodate special requirements (but see § 5A-1.370-3(a)).

WARRANTY OF SUPPLIES

(a) Notwithstanding inspection and acceptance by the Government of supplies furnished under the contract or any provision of this contract concerning the conclusiveness thereof, the Contractor warrants that for (enter specific warranty period (such as "one (1) year after specified date") or other applicable warranty provision) all supplies furnished under this contract will be free from defects in material or workmanship and will conform with the specifications and all other requirements of this contract. Unless otherwise provided, the warranty period shall begin 60 days after date of shipment.

(b) Unless otherwise provided, this warranty is applicable both within and outside the continental limits of the United States. (c) Within a reasonable time after discovery of any breach of this warranty, the Contracting Officer or other Government repre

sentative shall give written notice to the Contractor and either: (i) Require the prompt correction or replacement of any supplies or part thereof (including preservation, packaging, packing, and marking) that do not conform with the requirements of this contract within the meaning of paragraph (a) of this clause; or (ii) retain such supplies, whereupon the contract price thereof shall be reduced by the Contracting Officer in an amount which is negotiated and agreed upon as being equitable under the circumstances, and the Contractor shall promptly make appropriate repayment.

(d) When return, correction, or replacement is required, the Contracting Officer or other Government representative shall return the supplies or part thereof, where feasible, and transportation charges and responsibility for such supplies while in transit shall be borne by the Contractor. However, the Contractor's liability for such transportation charges shall not exceed an amount equal to the cost of transportation by the usual commercial method of shipment between the designated destination point under this contract and the Contractor's plant, and return.

(e) If the Contractor fails or refuses to correct or replace the nonconforming supplies within a period of ten (10) days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice from the Contracting Officer or other Government representative specifying such failure or refusal, the Contracting Officer may by contract or otherwise correct or replace them with similar supplies and charge to the Contractor the cost occasioned to the Government thereby. In addition, if the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor's account in a reasonable manner, in which case the Government is entitled to reimbursement from the Contractor or from the proceeds for the reasonable expenses of the care and disposition of the nonconforming supplies as well as for excess costs incurred or to be incurred.

(f) Any supplies or parts thereof corrected or furnished in replacement pursuant to this clause shall also be subject to all the provisions of this clause to the same extent as supplies initially delivered.

(g) Failure to agree upon any determination to be made under this clause shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(h) The word "supplies" as used herein includes related services.

(i) The rights and remedies of the Government provided in this clause are in addition to and do not limit any rights afforded to