"NATIONAL SECURITY

INFORMATION"

"Unauthorized Disclosure Subject to Criminal Sanction"

(b) The proper marking of classified matter is the responsibility of the originator and the activity making the distribution. Under the provisions of Article N15-204 of OPNAV Instruction 5510.1D, it is permissive to transmit matter classified Confidential or Secret direct to the contractor; therefore, if subject notation is not made by the originator or the activity making the distribution, it is received by the contractor without the notation being affixed. However, field offices having Industrial Security responsibility as "via" addressees, shall review classified matter received from other activities for correctness of markings and to insert those markings which have been omitted.

(c) Procuring activities and distribution activities of the Department of the Navy that originate and/or distribute classified information to Department of Defense contractors are requested to take necessary action to effect compliance with Article 4-603, DOD Directive 5200.1-R, Article N4603, OPNAVINST 5510.1D and paragraph 11.b(1) of the Industrial Security Manual for Safeguarding Classified Information.

§ 737.1-322 Disposal of classified data furnished to contractors.

When it is determined by the contracting officer that classified data furnished to contractors in connection with classified procurements is obsolete or in excess of contractual and/or legal requirements, such classified data may be destroyed by the contractor upon written authorization of the contracting officer and pursuant to the Department of Defense Industrial Security Manual for Safeguarding Classified Information (attachment to DD Form 441).

§ 737.1-323 Publication by contractors of financial data invoicing security information.

(a) In order that contractors may disclose a maximum of public information relating to their financial status,

consistent with the requirements of security, the Secretary of the Navy prescribes the policies set forth below to govern such disclosure.

(b) Suppliers performing work under contracts which include the Military Security Requirements clause specified in §7.104-12 shall not publish operating statements or other financial reports which include rates of production, total production, designation of articles, or production processes under such contracts.

(c) Such suppliers may, unless their entire production is comprised of 75 percent or more of the same article, publish their total earning and total production by dollar value only, provided that approximate production by quantity or dollar value of a particular article shall not thereby be disclosed; and provided further, that special restrictions on such publication have not been imposed by the responsible contracting officer because of the extreme secrecy of particular contracts. Publication, where permitted as provided herein, may include the following:

(1) Quarterly statements showing by total dollar value the following:

(i) Orders unfilled or due at the beginning of the period;

(ii) New orders booked during the period;

(iii) Cancellations, adjustments, and cut-backs during the period;

(iv) Orders filled during the period; (v) Unfilled orders at the close of the period;

(vi) Finished goods on hand; (vii) Work in progress; and

(viii) Raw materials and supplies (one item);

(2) Quarterly statements of total earnings; and

(3) Annual reports and prospectuses showing by percentage how much of the total dollar sales was derived from goods manufactured through the use of facilities which will not require substantial reconversion for peacetime or civilian use, provided the percentage is not within 25 points of the percentage relationship of any particular classified article's dollar value to the total dollar value of all goods sold by the company.

(d) Notwithstanding the foregoing, the Secretary of the Navy, or the

Chief of Information as his authorized representative may, upon request in particular cases, permit the disclosure of financial information in addition to that provided for in paragraph (c) of this section. Any inquiries concerning the application of the policies herein set forth, or requests for additional disclosure, should be referred to the Office of Public Information of the Department.

$737.1-350 Scheduling of procurement.

§ 737.1-350-1 Minimum obligation of funds.

(a) To assure flexibility for changing programs, it is the general policy of the Navy to hold to a minimum the amount of funds under contract obligation, at any one time, for the supplies and services the Navy must buy. (b) Quantities of supplies or services being procured should meet requirements for a reasonable period of time. To this end, and consistent with the obtaining of reasonable prices, use should be made of indefinite quantity contracts or such other contractual methods for the obtaining of supplies or services when the total requirements are not firm but requirements for a lesser known quantity have been definitely established.

(c) It is not desired that purchases be made in quantities so small that prices are thereby increased or that this policy be applied to purchases which are so small as to render administrative cost disproportionate to results to be achieved.

(d) Procuring activities are permitted wide discretion in the implementation of § 737.1-350-1.

§ 737.1-350-2 Adequate procurement lead time.

(a) The period allowed for the solicitation of bids or offers is an important segment of necessary contract lead time. An adequate solicitation period is essential to obtain effective competition, provide for an orderly procurement process, and assure that resulting contracts are placed at reasonable prices. Accordingly, contracting activities shall ascertain what contract lead time is necessary in advance of deadline dates for final obligation purposes

to permit a normal solicitation period. At least once, early in each fiscal year, contracting activities shall formally advise the activities they regularly serve in a contracting capacity of deadline dates for submission of purchase requests.

(b) It is the policy of the Department of the Navy that the procurement lead time essential to obtaining adequate available competition shall not be curtailed for the purpose of obligating annual appropriations. (See also § 2.202-1.)

§ 737.1-351 Preparation and distribution of contractual documents.

§ 737.1-351-2 Referencing publications in contractual documents.

In the preparation of contractual documents, instructions to the contractor shall not be incorporated by reference to publications except in cases where the referenced publication is readily available to the contractor. Otherwise such instructions shall be set forth in the contractual document itself or shall be made available by attaching thereto a copy of the publication or the applicable portion thereof. § 737.1-351-5 Copies of contracts requested in Navy MIPR's. See § 737.5-1106-1.

§ 737.1-351-7 Notification to field contract administrator of the identification of the organizational unit or code within the contracting activity responsible for contract administration functions.

In the interest of improving channels of communications, where a contracting officer anticipates a repetitive need for correspondence or contact between the contracting office and an activity designated to perform field contract administration, the organizational unit or code and its specific area of responsibility within the contracting office responsible for the administration of the contract should be furnished to the field contract administrator by any appropriate means.

§ 737.1-351-9 Delivery status information on procurements for the ILP.

(a) Contracts and purchase orders awarded in support of requisitions for the ILP shall:

(1) Identify the requirement as a separate contract line item or subline item in accordance with § 20.304-2. The applicable requisition number plus:

(i) The country and case identifier (MIL STRIP CC 31-32 and 48-50) for FMS (Foreign Military Sales);

(ii) The Record Control/Program/ Directive number identifier (MIL STRIP CC 46-50) shall be entered immediately under the line or subline item for GA (Grant Aid). (Navy/ Marine Corps ILP requisitions are identified by the letter P or K preceding the requisition number, Army is B, Air Force is D, Defense is T (MILSTRIP CC 30).)

(2) Provide for the designated contract administration services component to distribute to the Navy International Logistics Control Office, Bayonne, New Jersey, a copy of any report or document which indicates an anticipated or actual delay in delivery of line or subline items for the ILP. Copies of such reports distributed to Navy International Logistics Control Office, shall include the requisition number applicable to the line or subline item involved and shall be in addition to any other distribution required by the contract or directives applicable to the contract administration services component.

§ 737.1-352 Limitation on contract amendments for new procurement.

It is the policy of the Department of the Navy to avoid the use of contract amendments for additional quantities as a means of purchasing new requirements of supplies, when such a procedure would result in prolonging the life of the contract beyond the time when final settlement would normally be made. The practice of extending contracts for this purpose has the following undesirable results:

(a) Possible use of obsolete or outmoded forms of contracts;

(b) Possible loss of the rights of the parties in a confusion of paperwork; and

(a) Contractors frequently include in some of their commercial advertisements reference to their participation in Navy programs. Prior to placement of these advertisements the contractor may seek approval thereof from some Departmental office, generally the cognizant field contract administrator. It is the general policy of the Department of the Navy not to object to such advertisements provided they do not:

(1) Directly or indirectly constitute an endorsement by the Department or any member thereof of the contractor's product or service;

(2) Indicate or imply in any manner Departmental preference of the contractor;

(3) Contain reference to contract numbers or other contractual details;

or

(4) Disclose classified military information.

(b) Contractors are not required to obtain prior clearance for advertisements. However, any Departmental office that becomes aware of any advertisement which appears to conflict with the conditions of paragraph (a) of this section shall immediately bring it to the attention of the cognizant field contract administration office. The cognizant field office shall take necessary action with the contractor to resolve the matter in consonnance with the aforesaid policy. In the event this matter cannot be resolved to the satisfaction of the cognizant field office, the matter shall be referred by letter report to the Chief of Naval Material (MAT 021). The letter report shall include a statement of all facts and circumstances in sufficient detail to enable the Chief of Naval Material to take appropriate action.

§ 737.1-362 Purchase of liquid carbon dioxide.

(a) As a result of an antitrust judgment certain companies are not permitted to sell or lease liquid carbon dioxide storage tanks and related

equipment if the sale or lease is conditioned on an agreement or understanding that the purchaser (lessor) of the storage tanks will purchase carbon dioxide from either the storage tank supplier or any source designated by the storage tank supplier.

(b) Accordingly, requirements for the furnishing of carbon dioxide storage tanks and the liquid carbon dioxide to fill such tanks shall be solicited, evaluated and awarded independently of one another. The two may be solicited and awarded in the same transaction provided they are identified and evaluated separately.

(c) The solicitation document for these requirements shall stipulate that "all-or-none" bids will be rejected as nonresponsive. Further, the solicitation shall not require that the bidder quote on both items.

(d) Attention is invited to § 5.102-3, which makes mandatory with certain exceptions the purchase of FSC 6830 (which includes carbon dioxide) from Federal Supply Schedules.

§ 737.1-363 Participation by contract administration officers in RFP preparation evaluation of proposals and source selection.

(a) When feasible, contract administration offices shall be requested to review, prior to completion of drafting, the RFP (Request for Proposal), Schedule, General Provisions, Specifications, or other provisions of proposed major weapon systems contracts for the purpose of planning for contract administration and for determining the adequacy of such contractural requirements for contract administration purposes. In addition, contract administration offices may be requested to participate in the technical evaluation of proposals and in source selection, in order to provide guidance to the purchasing activity on contract administration matters and on the ability of the contractor to perform the type of work contemplated. Contract administration offices may also be requested to participate in negotiation. Such participation is in addition to field pricing support provided the PCO (Procuring Contracting Officer) as required by § 3-801 of this Title 32.

8 737.1-401-51 Responsibility of the Naval Supply Systems Command.

(a) General. Only The Naval Supply Systems Command has cognizance of the procurement of materials and services throughout the Department of the Navy for which no other procuring activity, office, or command is otherwise delegated procurement authority.

(b) Consolidated Bid Room Facilities. (1) Under the direction of the Naval Supply Systems Command, a common bid room shall be established and operated by the Naval Regional Procurement Office, Washington, for all formally advertised procurements of the Systems Command Headquarters. Bid rooms will no longer be operated by Systems Commanders, except that the Commander, Naval Facilities Engineering Command may operate a separate bid room for formally advertised construction contracts.

(2) Common bid room functions shall be as follows:

(i) Naval Regional Procurement Office, Washington:

(A) Issue invitations for bids, complete with applicable specifications, drawings, and other descriptive data (unless the required specifications, drawings, or descriptive data is to be mailed directly from the Systems

Command to the bidders included on the mailing list for the invitation for bids);

(B) Receive, open and abstract bids; make any determination concerning late bids; annotate retained Abstract of Bids to show award of contract(s) or other disposition;

(C) Supplement the list of bidders supplied by the Systems Command as appropriate; and,

(D) Furnish, or arrange to have furnished, upon request from prospective bidders, bid forms and applicable specifications, drawings, and descriptive data.

(ii) Systems Commands:

(A) Prepare invitations for bids (including assignment of the Systems Commands Procurement Instrument Identification Number and opening date) and submit in a form ready for reproduction;

(B) Furnish NRPO Washington a list of bidders to be solicited and address labels;

(C) Provide in a mailable condition sufficient copies of applicable specifications, drawings, and other descriptive data required for distribution to the initial list of bidders plus copies to satisfy expected additional requests. If desired, specifications, drawings, and descriptive data may be mailed directly by the Systems Commanders concurrently with the issuance of the invitation for bid;

(D) Synopsize proposed procurement and award;

(E) Prepare and furnish to NRPO Washington in a form ready for reproduction any required modification to an invitation for bid;

(F) Evaluate bids, make affirmative determinations of responsibility, and award contracts; and,

(G) Advise Naval Regional Procurement Office, Washington for awards made (or other actions if no award is made under an IFB).

§ 737.1-401-52 Responsibility of Office of Naval Research for research contracts with educational and nonprofit institutions.

Paragraph 5a(12) of SECNAV Instruction 5430.20B of 18 November 1969 is set forth below:

1. The Chief of Naval Research shall be responsible for negotiation, preparation, execution, administration and scientific and technical cognizance of all research contracts with educational and nonprofit institutions. The Chief of Naval Research may authorize other naval activities to assume responsibility for any or all of the aforementioned functions as circumstances warrant. The Chief of Naval Research may assume the responsibilities listed above for development contracts with educational and non-profit institutions at the request of each systems command, bureau or office.

§ 737.1-401-53 Naval Facilities Engineering Command (NAVFACENGCOM) cognizance of public works and civil works.

(a) Responsibility for Construction. (1) Civil Works. SECNAV Instruction 4860.41A and NAVMAT Instruction 4860.13A make NAVFACENGCOM responsible for construction, including related design, at Navy-owned-contractor operated facilities which would be considered public works or public utilities at a shore activity of the Naval Establishment. Such construction shall hereinafter be called Civil Works.

(2) Summary of Responsibilities. NAVFACENGCOM is responsible for the administration of all contracts for Public and Civil Works and for the Civil Works portions of facilities and other contracts, for all construction work otherwise accomplished, and particularly for ensuring that applicable legal requirements have been satisfied and that the work will meet the requirements of the Navy.

(b) Delegation of Responsibility for Administration of Construction. Current legislation provides that delegation to another Government agency or bureau of the responsibility outlined in paragraph (a) of this section for public works, as authorized by annual authorization acts, within the United States or its possessions, must be approved by the Secretary of Defense. Where it is considered to be in the best interests of the Navy that such a public works project be administered by a systems command or office other than NAVFACENGCOM, a request shall be forwarded to the Assistant Secretary of the Navy (I&L) via NAV FACENGCOM. Before forwarding a request for delegation of responsibility