§ 1003.303 Determinations and findings by the head of a procuring activity. (a) By § 3.303 of this title the Commander, AMC, is authorized to make determinations and findings required by 10 U.S.C. 2307, in support of incentive type and cost-reimbursement type contracts.

(b) The Director of Procurement and Production, Hq AMC, has been redelegated this authority, with power of redelegation, provided such determinations and findings will not, in any event, be made by the contracting officer for the procurement involved.

(c) The authority vested in the Director of Procurement and Production, Hq AMC, to make determinations and findings supporting the use of cost, costplus-a-fixed-fee, or cost-plus-incentivefee contract, or a fixed-price incentive contract, has been redelegated to the following, subject to the provisions of paragraph (d) of this section.

(1) Deputy Directors of the Directorate of Procurement and Production, Hq AMC.

(2) Commander, AMC centers, with power of redelegation.

(3) Commanders of air materiel areas, Dayton AF Depot, and 2709th Vehicle Control Group with power of redelegation not below the level of a deputy director of procurement and production or comparable level.

(4) Commander, ARDC, with respect to research and development procurement (excludes base procurement) with power of redelegation.

(5) Commander, Military Air Transport Service, with respect to cost and CPFF type contracts for services involving CRAF Senior Lodger and Working Group contracts only. Redelegation may not be made below the level of the Chief, Procurement Division, Hq MATS.

(d) The delegations set forth in paragraph (c) of this section are subject to the following limitations:

(1) No person will exercise the authority redelegated if he is himself the contracting officer in the procurement involved.

(2) The officials to whom authority is redelegated will exercise such authority * only within the jurisdictional limits of their respective duty assignments.

(e) The Director of Procurement and Production, Hq AMC, has delegated to the Director, Air Force Academy Construction Agency, the authority to make determinations and findings supporting

the use of cost and cost-plus-a-fixed-fee type contracts (except those for procurement of items in production quantities), and fixed-price incentive contracts, provided the delegee is not the contracting officer in the procurement involved.

(f) Delegation to the Air Training Command with respect to making determinations and findings supporting the use of a cost or cost-plus-a-fixed-fee type contract is set forth in Subpart D, Part 1001 of this chapter.

(g) The Director of Procurement and Production, Hq AMC, has delegated authority to make findings and determinations supporting the use of cost-plus-afixed-fee type contracts for procurement of maintenance and overhaul services only to the Commander and Deputy Commander, AMFPA and AMFEA. [27 F.R. 2406, Mar. 14, 1962, as amended at 27 F.R. 6269, July 3, 1962]

§ 1003.304 Determinations and findings by a contracting officer. See § 1003.303(b).

§ 1003.306 Procedure with respect to determinations and findings.

(a) Contracting officer's determinations and findings; negotiated contracts. There is no approved format for individual determinations and findings with respect to the negotiation of contracts under the authority of § 3.202 of this title but those set forth for the Secretarial determinations and findings may be used as a guide.

(b) Approval of determinations and findings under §§ 3.202 and 3.210 of this title and §§ 1003.202 and 1003.210; negotiated contracts. Determinations and findings under §§ 3.202 and 3.210 (except § 3.210-2(m) for procurements exceeding $50,000) requires contracting officer's signature and will be subject to the following written approvals.

(1) AMC centers.

(i) Branch chiefs or their deputiesprocurements initially estimated to be in excess of $10,000 but not in excess of $50,000.

(ii) Division chiefs (WSPOS, ESPOS, or comparable level) or their deputies— procurements initially estimated to be in excess of $50,000.

(2) AMC field procurement activities (other than centers).

(i) Chiefs or deputy chiefs of divisions-procurements initially estimated to be in excess of $10,000 but not in excess of $50,000.

(ii) Directors or deputy directors of procurement and production procurements initially estimated to be in excess of $50,000.

(3) Hq ARDC and ARDC centers and divisions.

(i) Chief or deputy chief of buying divisions-procurements initially estimated to be in excess of $10,000 but not in excess of $50,000.

(ii) Director or deputy director of procurement-procurements initially estimated to be in excess of $50,000.

(4) Purchasing activities other than those stated in subparagraphs (1), (2), and (3) of this paragraph: Chief or deputy chief of the purchasing officeprocurements initially estimated to be in excess of $10,000.

(5) Determinations and findings for procurements exceeding $50,000 to be negotiated under the provisions of § 3.210-2(m) of this title and § 1003.2102(m) will be approved by the Director, Deputy Directors, or assistant to the Director of Procurement and Production, Hq AMC. Such determinations and findings will be prepared and signed by the contracting officer. An original and four carbon copies will be submitted to AMC (MCPC) and will include a copy of the procurement plan, including the number of sources to be solicited, the form to be used in solicitation (e.g., SF 18, DD Form 746, letter request for proposal), and type of contract contemplated. (Where the D and F covers only the procurement of data, the foregoing procedure is waived and D and Fs will be approved according to the applicable provisions of subparagraphs 1 through 4 of this paragraph.)

(c) Limitation. No person will exercise the authority redelegated in paragraph (b) of this section if he is the contracting officer in the procurement involved. This limitation does not apply to WSPOS at ASC (or comparable organizations) where the chief of the WSPO is the only contracting officer appointed for such WSPO. In these instances, the determination and finding will indicate that the person executing the determination and finding is both the contracting officer and the chief of the WSPO and no further approval of such determination and finding will be required.

(d) Procedure for Secretarial determinations and findings. (1) Determinations and findings authorizing negotiation under 10 U.S.C. 2304(a) (11) and

(14) will be prepared and processed as soon as the procurement program becomes reasonably firm, i.e., at least 3 months and preferably, but not more than, 6 months prior to estimated contract placement date. Since, in certain situations, this will require submission of determinations and findings prior to receipt of Purchase Authorizations and Requests, the supporting documentation will recite the total estimated quantities, scope of services, or effort expected to be procured and will set forth the procurement plan and the assumptions on which it is based.

(2) Determinations and findings will be prepared on plain bond paper, undated, and without signature block. An original and 10 copies wil be submitted with a letter of transmittal containing complete justification for the determinations and findings.

(3) The letter transmitting a determinations and findings to the Secretary is a most important document. In addition to setting forth sufficient facts to satisfy the statutory requirements for negotiation, it should inform the Secretary about the competitive or noncompetitive aspects of the proposed procurement. In cases involving noncompetitive negotiations, it will include an explanation of the background causes that led to the present noncompetitive situation and the actions taken or planned, if any, to eliminate the impediments to competition in the future. It is especially important to highlight those impediments which are beyond the capability of procurement personnel to correct without the active cooperation of other operating or staff agencies. Letter of transmittal will also reference previous determinations and findings, if any, authorizing negotiation for the same item during the past two fiscal years and will state the required contract placement date for the current request.

(4) Letters of transmittal (original and five copies) for 10 U.S.C. 2304(a) (14) determinations and findings will be signed by commander or deputy commander of the initiating activity and for 10 U.S.C. 2304(a) (11) determinations and findings by Director or Deputy Director of Procurement or by Director of Research and Development Contracting. They will be forwarded to Hq USAF (AFSPM-PO-1) through the following channels:

(i) AFLC activities-AFLC (MCPC). (ii) AFSC activities-AFSC (SCMK). (iii) OAR activities-OAR (RRK). (iv) Other major commands-AFLC (MCPC).

(e) Quantitative change in requirements. Whenever a quantitative increase in the requirement or scope of effort over that recited in the justification for a Secretarial determinations and findings occurs prior to or after the execution of the contract, the following policies will govern:

(1) In determinations and findings authorizing negotiation for research and development, the scope of the effort to be incorporated in the contract will not exceed the scope of effort recited in the original request. However, minor modifications within the stated scope of the I work occurring prior to execution of contract are authorized.

(2) Secretarial determinations and = findings authorizing negotiation under 10 U.S.C. 2304 (a) (14) will be considered to authorize increase in quantities for or configuration changes in items provided the net result does not invalidate the basis for the original determinations and findings nor constitute a basic change in the procurement. In any event, if the aggregate increase in quantities exceeds 50 percent or if any quantity is to be added to an existing contract after 6 months from the date of the determinations and findings, an amendment to the determinations and findings must be obtained. Such can be obtained by a message to Hq USAF (AFSPM-PO-1) setting forth the new quantity and either a statement that the factors cited to justify the original submission have not altered or a brief explanation of any significant changes in these factors.

(3) If a change in requirements exxceeds the authorized limitations, the procurement will not be consummated until a new determinations and findings covering the increase has been obtained according to prescribed procedures.

(f) Cancellation. If total requirements are cancelled or if a signed Secretarial determinations and findings is - cancelled or not used for any other reason, Hq USAF (AFSPM-PO-1) will be so notified through the same channels prescribed for submission of requests for determinations and findings. This notification will be made immediately after deciding that the determinations and

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findings will not be needed; and the determinations and findings will be marked "cancelled" and placed, together with a copy of the letter of notification, in the cancelled PR/MIPR case file. [27 F.R. 6269, July 3, 1962]

Subpart D-Types of Contracts SOURCE: §§ 1003.404 to 1003.410-50 appear at 27 F.R. 10158, Oct. 17, 1962, except as otherwise noted.

§ 1003.404 Fixed-price contracts. § 1003.404-3 Fixed-price contract with escalation (FPE).

(a) FPE clauses. Depending upon the type of escalation, clauses in §§ 7.106 and 7.107 of this title apply.

(a) Description. The firm target incentive contract is identified by the symbol FPIF. The successive target incentive contract is identified by the symbol FPIS.

(b) Limitations. The determinations and findings required to support use of these contracts will be made as outlined in § 1003.303.

(c) FPIF and FPIS clauses. The clause in § 7.108 of this title applies for the FPIF contract, and the clause in § 1007.108-50 of this subchapter for the FPIS contract.

§ 1003.404-5 Prospective price redetermination at a stated time or times during performance (FPR-A). FPR-A clause. Section 7.109-2 of this title applies.

§ 1003.404-6 Retroactive and prospective price redetermination at a stated time during performance (FPR-C). (a) Limitations. To obtain Hq AFSC or Hq AFLC written approval for use of this contract, as required by § 3.404-6(c) (8) of this title, contracting officers located in AFSC procurement activities and Office of Aerospace Research (OAR) will address requests to AFSC (ASXKF), WPAFB, Ohio; requests from contracting officers located in all other AF procurement activities will be addressed to AFLC (MCPKP). Requests for approval will be signed by the contracting officer and will contain the following information:

(1) Name of proposed contractor and brief description of supplies or services being procured.

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(2) Unit and total prices, including both billing and ceiling prices.

(3) Delivery schedule of supplies to be furnished, or scheduled date for completion of performance if services are being procured.

(4) Method of source selection. If competitive, indicate also the contract type, and the unit and total prices proposed by each rejected offeror, including ceiling prices, if applicable.

(5) Copy of the record of price negotiation.

(6) Statement indicating that each of the requirements under § 3.404-6(c) (1) through (7) of this title has been considered and complied with.

§ 1003.404-7 Retroactive price redetermination after completion (FPR-E). (a) Limitations. To obtain Hq AFSC or Hq AFLC written approval for use of this contract, as required by § 3.404-7 (c) (4) of this title, contracting officers located in AFSC procurement activities and OAR will address requests to AFSC (ASXKF) WPAFB, Ohio; requests from contracting officers located in all other AF procurement activities will be addressed to AFLC (MCPKP). Requests for approval will be signed by the contracting officer and will include the same information required by § 1003.404-6(a) (1) through (5), together with a statement indicating that each of the requirements under § 3.404-7(c) of this title has been considered and complied with.

(b) FPR-E clause. Section 7.109-4 of this title applies.

§ 1003.404-50

Redetermination upon happening of a specified contingency (FPR-X).

(a) Description. This contract provides for an equitable upward revision of prices upon the happening of a contingency specified in the clause as a "basic assumption."

(b) Application. This contract is available for Air Force use pursuant to a blanket ASPR deviation. It is appropriate for use when, except for the specified contingency, realistic, firm fixed prices can be negotiated initially. Its purpose is to limit any upward revision to the identified contingency situation, which is beyond the contractor's control. The major difference between the FPE and FPR-X contract types is that the FPR-X contemplates certain identifiable contingent situations.

(c) Limitations. This contract typ will not be used unless all of the follow ing conditions are met:

(1) The procurement is for motio picture production.

(2) The contractor warrants that th price does not include any charge fo the contingency.

(3) The contingency is outside th contractor's control, such as weathe conditions, failure of the Government t furnish equipment, etc.

(4) The following contingencies ar not covered by the contract clause: (1 Changes in taxes or duties, (ii) change in wage rates or employment conditions (iii) changes in material costs, (iv) risk arising in relation to patents, and (V termination of the contract in whole o in part.

(d) FPR-X clause. Section 1007.109 50 applies. § 1003.405

contracts.

§ 1003.405-1

Cost-reimbursement

General.

typ

(a) Limitations. (1) For contract placed by AFSC or AFLC procurement activities, those officials who have been authorized to make determinations and findings to support the use of CPFF and CPIF contracts (see § 1003.303) are als authorized to approve fixed and targe fees within the prescribed ASPR admin istrative limitations.

(2) To obtain Secretarial approval exceed the prescribed ASPR administra tive limitations on fixed and target fee the procuring activity will forward request for approval to the Director Procurement Management, Hq USA AFSC procurement activities and OA will route such requests through AFS (SCMK-3); all other AF procuremen activities will route requests throu

AFLC (MCPC). The request will contain a full statement of facts and recommendations, identifying the supplies or service being procured and the type of procurement involved (research, development, production, architectural or engineering services, etc.), the need for the supplies or services being procured, estimated (target) costs, percentage of fixed (target) fee proposed, fees on prior contracts for similar work with the same or other contractors, description of the incentive arrangement if CPIF, and all other pertinent information.

§ 1003.406 Other types of contracts. § 1003.406-1 Time and materials contract (T-M).

(a) Limitations. The determination that no other type of contract will suitably serve may be accomplished by the contracting officer placing the contract if the total consideration is not in excess of $5,000. For contracts in excess of $5,000, the determination will be accomplished by the following, subject to the provisions of subparagraph (3) of this paragraph:

(1) Staff officer in charge of procurement at the AFLC or AFSC procurement activity concerned, or the staff officer responsible for procurement within APRE, FEAPR, or OAR.

(2) The commander of the major command concerned (or a duly authorized representative not below the level of the staff officer responsible for procurement within the headquarters of the first echelon of command immediately subordinate to the major command), except that for contracts to be placed outside the United States, its territories and its possessions, the determination also may be made by air attaches and chiefs of AF foreign missions, as appropriate.

(3) The authority set forth in this paragraph is subject to the following limitations: (i) No person will exercise the authority if he is himself the contracting officer in the procurement involved, and (ii) the officials to whom authority is delegated will exercise such authority only within the jurisdictional limits of their respective duty assignments.

vision will be made that there will be no direct reimbursement for any materials used or consumed in the performance of the L-H contract.

[27 F.R. 10158, Oct. 7, 1962, as amended at 27 F.R. 11761, Nov. 29, 1962]

§ 1003.407 Additional incentives. § 1003.407-2 Contracts with performance incentives.

Contracts containing a performance incentive will be identified by adding "P" to the symbol designating the basic pricing provision of the contract; i.e., FPIF-P, CPIF-P.

§ 1003.407-3 Contracts with value engineering incentives.

(a) Description. Contracts containing value engineering incentives will be identified by adding "V" to the symbol designating the basic pricing provision of the contract: e.g., FPIFV or FPR-CV.

(b) Application. Many of the contract types described in this Subpart, when properly negotiated and administered provide the contractor with an incentive for reducing costs. However, under these contract types, this incentive applies only to cost reductions which the contractor is able to achieve while performing according to existing contractual requirements. The objective of special value engineering incentive provisions is to motivate the contractor to develop and submit cost reduction ideas involving a change in contractual requirements. Value engineering incentive clauses will be used in development, production, and modification procurements in excess of $100,000 where (1) potentialities exist for significant cost reduction, and (2) governing specifications are such that engineering efforts will result in cost reduction ideas which, to be acceptable under the contract, would necessitate issuing a contractual change. For development contracts where governing specifications are not detailed, use paragraph (e) of this section. Whenever a clause according to either paragraph (d) or (e) of this section is omitted from a contract over the dollar limitation set forth in this paragraph, such omission will be justified in writing by the contracting officer and approved specifically by the official manually approving the contract, if manual approval is otherwise required.

(c) Limitations. Use of value engineering incentive provisions, providing the clauses in § 1007.4064 of this sub