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fusal to consent to cancellation, the case should be formally submitted, under the signature of the Secretary of Agriculture, to the Comptroller General, and the vendor advised to suspend action pending the Comptroller's decision.

(b) Procedure-delivery made. If the vendor has proceeded with delivery before the error has been discovered, the following procedure will govern:

(1) Deliveries partially completed. The vendor should be immediately instructed to make no further deliveries. The matter should then be formally submitted to the Comptroller General for a decision as to action to be taken, and the vendor so advised.

(2) Delivery completed. The matter should then be presented through regular agency fiscal channels to the General Accounting Office for determination as to the amount due.

§ 4-2.450 Informalities of substance.

Informalities of substance are material deviations from requirements affecting price, quantity, or quality, or the rights of other bidders, or conditions imposed by a bidder to limit his liability to the Government for delays, failure to perform, etc. Rejection of bids containing such informalities is mandatory. This precludes the deletion after opening of bids of objectional conditions imposed by the bidder, even though such deletion would result in a responsive bid. [85 FR. 3681, Feb. 25, 1970]

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Continuing requirements under $2,500 annually.

Subpart 4-3.50-Negotiated Contracts for Research and Marketing With Other Than Educational Institutions

Authorities.

4-3.5001

4-3.5002

Purpose. Policy.

4-3.5003

4-3.5004

Contract negotiation procedures.

4-3.5005

Contract forms.

4-3.5006

Contract period.

4-3.5007

Contract floor.

4-3.5008

Publication.

Subpart 4-3.51-Negotiated Research Agreements With Educational Institutions

4-8.5100

Scope of subpart.

Definitions.

Authorities.

Contracts.

4-9.203

4-3.204

4-3.211

4-3.5101

4-8.5102

4-3.212

4-3.5102-1

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Sec.

4-8.5107

4-3.5108

4-3.5109

4-3.5110

4-3.5111

Nonexpendable property.
Records and reports.

Equal opportunity.

Changes in methodology, objec-
tives or phenomena.

Protection of human subjects of
research.

AUTHORITY: The provisions of this Part 4-3 issued under 5 U.S.C. 301, 40 US.C. 486(c).

SOURCE: The provisions of this Part 4-3 appear at 29 FR 14279, Oct. 16, 1964, unless otherwise noted.

Subpart 4-3.1-Use of Negotiation § 4-3.150 Board of contract awards.

(a) Establishment and duties. A Board of Contract Awards consisting of not less than three members shall be established at each agency headquarters and each field contracting office where negotiated contracts are awarded. Except as indicated in 4-3.150(b), it shall be the duty of the Board to (1) review all proposals received, (2) weigh the relative merits of each proposal, (3) select the prospective contractor, and (4) specify such price ceilings and contract terms and conditions as the Board deems appropriate for guidance in negotiating the contract. The contracting officer shall have the final responsibility for negotiation and award of the contract. A summary statement of the contract negotiations and the basis of award in accordance with Subpart 1-8.3 shall be made & part of the contract file.

(b) Exceptions. Negotiated contracts may be awarded by the contracting oficer without referral to a Board of Contract Awards when: (1) not in excess of $2,500; (2) for public exigency; (3) for procurements outside the United States, or (4) for subsistence supplies. Changes to existing contracts need not be referred to the Board.

Subpart 4-3.2-Circumstances Permitting Negotiation

§ 4-3.203 Purchases not in excess of $2,500.

(a) Application. The final consideration in determining whether to use this authority is the amount of money involved in the total known requirement that it is practicable to purchase at one time or provide by means of a term contract. In

determining practicability, available funds, storage facilities, market conditions, etc., are pertinent factors for consideration.

(b) Procedure. Purchases under this authority should be made without formal invitation for bids unless it is clearly in the best interest of the government to

do so. However, competition should be obtained in accordance with the policy stated in § 1-3.603-1.

§ 4-3.204 Personal or professional services.

(a) Limitations. (1) The use of purchasing procedures for obtaining personal services must be authorized under the statutes or conditions stated in 4-4.5068.

(2) Where exception to advertising requirements is contained in the statute authorizing purchase of personal services, that authority shall be cited and used rather than the authorities herein.

(3) Where this authority is to be used for obtaining professional engineering, architectural and landscape architectural services for any building or improvement (exclusive of bridges, roads, sidewalks, sewers, mains, or similar items), the construction cost of which is estimated to be $100,000 or more, prior approval of the Director of Plant and Operations is required.

[29 F.R. 14279, Oct. 16, 1964, as amended at 32 F.R. 1177, Feb. 2, 1967]

§ 4-3.211 Experimental, developmental, or research work.

(a) Authority. Pursuant to section 307(b) of the Act, the determination referred to in § 1-3.211 of this title shall be made by the Chief, Procurement and Contract Management Division, Office of Plant and Operations for requirements under $25,000; otherwise, the case shall be referred to the Director of Plant and Operations for his recommendation and referral to the Secretary.

(b) Limitations. Negotiation under this authority 13 subject to the prior approval of the Chief, Procurement and Contract Management Division, Office of Plant and Operations.

[29 F.R. 14279, Oct. 16, 1964, as amended at 32 F.R. 1177, Feb. 2, 1967]

§ 4-3.212 Purchases not to be publicly disclosed.

Pursuant to section 307(b) of the Act, the power of the Secretary to make the determination referred to in § 1-3.212 of this title is not delegable. Requests for use of this authority shall be submitted to the Director of Plant and Operations, for his approval and submission to the Secretary.

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Pursuant to section 307(b) of the Act, the power of the Secretary to make the determination referred to in § 1-3.213(a) (1) of this title is not delegable. Requests for use of this authority shall be submitted to the Director of Plant and Operations, for his approval and submission to the Secretary.

§ 4-3.214 Negotiation after advertising.

Rejected items may be readvertised, in accordance with § 1-3.214; however, if proposed to be negotiated, the reasons therefor are to be submitted to the Chief, Procurement and Contract Management Division, for his determination in accordance with sections 302 (c) (14) and 303(b) of the Act.

Subpart 4-3.3-Determinations,

Findings, and Authorities

§ 4-3.305 Form and requirements of determinations and findings.

No specific form of determinations is required.

Subpart 4-3.4-Types of Contracts § 4-3.408

Letter contract.

Prior approval of the Director of Plant and Operations is required for the use of a letter contract.

[30 F.R. 14374, Nov. 17, 1965]

§ 4-3.409 Indefinite delivery type con

tracts.

(a) General. When there exists a recurrent need for supplies or services, it may be economical to execute a term contract in lieu of continued individual purchases. No such term contract (except for public utility service and Forest Service aerial facilities and services) shall be made for a period extending beyond the fiscal year in which executed unless the appropriation adequate for its fulfillment is available for both the fiscal year in which the contract was executed and the next succeeding fiscal year as well. Additionally, contracts for stationery or other supplies for a longer term than 1 year from the time the contract is made may not be made unless the authority for the contract specifically exempts it from 41 U.S.C. 13. (41 U.S.C. 11 and 13.) There are several types of term contracts that may be executed to meet varying needs; they are as follows:

(b) Definite quantity. A definite quantity term contract runs for a specifiled length of time with successive deliveries according to schedules established by the Government, or ordered as the need arises. When the quantities specified in a definite-quantity term contract have been delivered, the contract shall be considered completed and no additional quantities shall be ordered under the contract. The apparent probability that the additional supplies may be furnished at less expense by the original contractor because of being engaged upon the original work or otherwise is not controlling of the matter as to whether additional requirements must be advertised. Whether the original contractor can furnish the supplies at less expense to the Government than any other contractor is possible of aefinite determination only by soliciting competitive bids as contemplated under said section. (See 11 Comp. Gen. 183 and 5 Comp. Gen. 508.)

(c) Estimated quantity with variance clause. It may be impossible to determine in advance exactly what the needs will be over a stated period of time, yet the quantity required can be estimated with reasonable accuracy. The procedure to follow in such instances is to execute a term contract for an estimated quantity with a reasonable variance to the extent it can be definitely established. This estimated amount should be obtained from records of consumption during a prior similar period or, in the event this is an entirely new requirement, by carefully weighing the probable needs for the stated period. (See 14 Comp. Gen. 446, and 11 Comp. Gen. 183.)

(d) Source of supply. When it is impossible to meet the need for certain supplies or services by either individual definite-quantity term-contracts, or estimated-quantity-with-variance-clause term contracts, there may be executed term contracts for such quantities as may be required during a stated period. These contracts are sometimes called "source of supply" contracts. Contracts of this character should not be made, however, if the need can be met by one of the types of contracts mentioned above, for there is a possibility that bidders may quote higher prices than for definitequantity contracts to protect themselves against possible contingencies.

(1) Mutuality of consideration. When advertising of bids on an indefinitequantity term contract ("source of sup

ply") basis there must be included therein an estimate of the probable needs during the stated contract period (based upon the best information available at that time) so that all bidders will be on notice of the probable quantities to be required under the contract; also, appropriate language must be included to the effect that this esimate of needs is for information only and is not intended to imply that the estimate is an exact indication of the quantity that will be required. Further, to insure mutually of consideration so that there will exist a valid and legal contract, the invitation for bids and resultant contract must specifically provide that the Department of Agriculture activity or activities involved will procure all of their needs during the stated contract period from the successful bidder (contractor) at the prices quoted and accepted by award of contract and that in consideration thereof, the successful bidder (contractor) guarantees, by the submission of his bid in response thereto, to furnish all of the contract materials that may be required by the activity or activities involved, during the stated contract period. (See United States v. Purcell Envelope Company, 249 U.S. 313, as distinguished by the Supreme Court of the United States in Willard Sutherland & Company v. United States, 262 U.S. 489 regarding mutuality of consideration.)

(2) Application of estimated quantities to award evaluation. If the invitation for bids on a "source of supply" contract basis includes a single item only, or there is more than one item but award is to be made by items, the low bidder(s) is ascertained by a comparison of the unit prices. However, it is sometimes necessary for efficient operation of a contract to stipulate in the invitation for bids that award will be made on "all or none" basis, 1.e., award will be made to one bidder for all items. Under these conditions, the invitation for bids should also prescribe the basis of award, 1.e., how the low bidder will be determined. This may be accomplished by including a provision to the effect that award will be determined by evaluating the various unit prices quoted with the estimate of needs shown in the advertisement. This is done by multiplying the unit prices quoted by such bidder by the estimate of the respective items as shown in the advertisement and then totaling the items for each bidder; this will give the estimated total cost which will decide the

bidder to receive the award if otherwise satisfactory.

(e) Approximate quantities. 14 Comp. Gen. 723 deals with a contract executed for "approximately 60,000 pounds" of gray iron castings to be delivered over a 12-month period. In rendering this decision, the Comptroller General finds such contracts to be of doubtful legality and requests that they not be executed. Subpart 4-3.6-Small Purchases § 4-3.602 Policy.

[33 F.R. 11764, Aug. 20, 1968]

§ 4-3.602-50 Purchasing authority.

(a) Definition. "Purchasing authority" is an authority in which the designated officer is authorized to issue purchase orders or requisitions which do not involve the solicitation and acceptance of bids or signing of agreements or contracts. (This should not be construed as precluding the signing of informal agreements which may be required in connection with negotiated purchases.)

(b) Delegation policy. The decentrallzation of the procurement function facilitates the prosecution of agency programs. Delegations of authority are granted to aid effective operations by providing for any necessary purchasing authorities as closely as practicable to the points at which the services are needed.

(c) Delegation to agency heads. Heads of agencies of the Department may delegate purchasing authority under such limitations and instructions as they may prescribe, to competent employees and incumbents of responsible positions in Washington and in the field.

(d) Limitations. These delegated authorities are subject to laws, regulations, and instructions applicable to, or issued by, the Department and to a continuing review by the Office of Plant and Operations.

[33 F.R. 11764, Aug. 20, 1968]

§ 4-3.604 Imprest funds (petty cash) method.

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The authority for these instructions is derived from the individual series of instructions of the General Services Administration, the Treasury Department, and the General Accounting Office, insofar as they relate to their respective areas of responsibility. Agencies shall utilize the cash payment techniques set forth in §§ 1-3.604 and 4-3.604 whenever practical.

§ 4-3.604-51 Definition of cashier.

A "Cashier" is an employee of the Department designated as a cashier in accordance with § 4-3.604-52 of this subpart. An "Alternate Cashier" is one who has been designated in the same manner as a cashier but who will function in such capacity (a) during the absence of the principle cashier and/or (b) where the volume of work requires the principle to have alternates, in which case the principle will advance funds on the basis of a receipt signed by the alternate.

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able to account for the full amount of the fund, either by cash, uncashed Government checks, unscheduled subvouchers, unpaid reimbursement vouchers, or interim receipts for cash. Employees designated to serve as cashiers will act as agents of the disbursing officers who advance them the necessary funds. Since cashiers are personally accountable and responsible for the custody of and payments made from the fund, employees upon whom this authority is conferred should be notified of their responsibility. They are required to utilize, to the fullest extent available, means of safeguarding cash advanced to them, and agencies should take necessary steps to furnish cashiers with suitable facilities for that purpose. Such facilities will depend upon equipment that can be made available and the size of the imprest fund to be safeguarded, but as a minimum, locked storage space must be provided. Consideration should be given to the determinations necessary under 4-3.60454 (c) in the event of loss or theft of imprest funds. Imprest funds may not be deposited in any bank nor commingled with personal or other funds. Each imprest fund shall be maintained separately. (See Treasury Manual of Procedures and Instructions, Section 4.)

(b) Responsibility for doubtful transactions. The cashier is authorized, where doubt exists as to the propriety of any transaction, to require written acceptance of responsibility for such transaction from the official authorizing the procurement to provide him recourse to such employee for reimbursement to the fund if the transaction is later disallowed. The cashier may also request an advance written opinion from the certifying officer with respect to a doubtful transaction.

(c) Physical loss or deficiency. In the event of physical loss or deficiency in the imprest fund, the General Accounting Office is authorized, in concurrence with determinations and recommendations of the Secretary of Agriculture, to relieve the cashier of responsibility, provided the Secretary determines (1) that such loss or deficiency occurred while the cashier was acting in the discharge of official duties, and (2) that such loss or deficiency occurred without fault or negligence on the part of the cashier. (31 U.S.C. 82a-1.) § 4-3.605

Purchase order forms. [35 FR. 3681, Feb. 25, 1970]

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