་ ་ ་་ ,,,

"Unauthorized Disclosure Subject to Criminal Sanction"

or

(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 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by the contracting officer that classified data furnished to contractors in connection with classified procurements is obsolete or in excess of contractual and/or legal requirements, such classified data may be destroyed by the contractor upon written authorization of the contracting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

nent.

$737.1-300 General policies.

§ 737.1-302 Sources of supplies and services.

§ 737.1-302-2 Proposal evaluation and source selection.

SECNAV Instruction 5000.1 (Subj: System Acquisition in the Department of the Navy) of 13 March 1972, establishes Department of the Navy procedures and policies on evaluation of competitive proposals and source selection. Activities and contractors may obtain a copy of the Instruction by submitting a letter request to the Naval Publications and Forms Center, 5801 Tabor Avenue, Philadelphia, Pa. 19120.

§ 737.1-320 Industrial security.

(a) General. Security cognizance for contractor facilities participating in the Defense Industrial Security Program (DISP) is assigned to the De

fense Supply Agency. Security assignments are made on a geographic basis and security cognizance is exercised by the various Defense Contract Administration Services Regions (DCASRS). The geographical areas of responsibility are listed in Appendix VII to the DOD Industrial Security Manual, DOD 5220.22-M. Procuring activities shall be familiar with the DOD Information Security Program Regulation (DOD 5200.1R) with Department of the Navy Supplement (OPNAVINST 5510.1 Series), the DOD Industrial Security Regulation, DOD 5220.22-R (promulgated by OPNAVINST 5540.8 Series), as well as the DOD Industrial Security Manual and when appropriate, the Cryptographic Supplement to the Industrial Security Manual, DOD 5220.22-S when transmitting classified information to contractors.

(b) Contract Administration Services Components Industrial Security Responsibilities. Although DSA administers the DISP for the Department of Defense, under the DOD Plant Cognizance Program, Navy Contract Administration Services (CAS) components (see DOD 4105.54-H for list of activities) perform those ACO industrial security functions normally performed by the DCASRC where the Navy has cognizance. These ACO industrial security functions are contained in the Industrial Security Manual and the Regulation. An abbreviated listing of responsibilities may be found in Appendix C of the Industrial Security Regulation.

8 737.1-321 Warning notation on classified matter distributed to industry.

(a) Article 4-603, DOD Directive 5200.1-R, July 1972 (Information Security Program Regulation), Article N4-603, OPNAVINST 5510.1D Sep 1972 (Navy Supplement to DOD 5200.1-R and paragraph 11.b(1) of the Department of Defense Industrial Security Manual for Safeguarding Classified Information (Attachment to DD Form 44) require the following notation to be affixed to classified matter when disseminated outside the Executive Branch of the Government.

"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

§ 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.

8 737.1-362 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