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geographic code is specified, the au- based on an approved geographic thorized code will be deemed to be Geo- source waiver in the Schedule of the graphic Code 000, the U.S.

contract as provided for in 725.702. In (b) Individual country and geographic addition, the contracting officer shall codes are defined in the Agency Geo place a copy of any approved geographic Code Book.

graphic source waiver in the official [49 FR 13248, Apr. 3, 1984, as amended at 61

contract file. FR 39093, July 26, 1996)

(49 FR 13248, Apr. 3, 1984, as amended at 52

FR 4144, Feb. 10, 1987; 61 FR 39093, July 26, 725.703 Contractor employees.

1996; 62 FR 40468, July 29, 1997) (a) Except as specifically provided in paragraph (b) of this section, there are

PART 726OTHER no nationality restrictions on employ SOCIOECONOMIC PROGRAMS ees or consultants of either contractors or subcontractors providing services Subpart 726.70—Disadvantaged under an USAID-financed contract, ex

Enterprises Program cept that they must be citizens of a Geographic Code 935 country, or non-U.S.

Sec. citizens lawfully admitted for perma

726.7001 Scope of subpart.

726.7002 Definitions. nent residence in the U.S.

726.7003 Policy. (b) For USAID-financed construction

726.7004 Determination to use other than projects where the contract is awarded full and open competition. to a U.S. firm, at least half of the su- 726.7005 Exceptions. pervisors, and any other specified key 726.7006 Determination of status as a dispersonnel, working at the project site advantaged enterprise. must be U.S. citizens or permanent

726.7007 Requirement for subcontracting legal residents of the United States.

with disadvantaged enterprises.

726.7008 Limitations on subcontracting. Exceptions may be authorized by the Mission Director in writing if special

Subpart 726.71-Relocation of U.S. Busicircumstances make compliance im

nesses, Assistance to Export Procpractical.

essing Zones, Internationally Recog(51 FR 34985, Oct. 1, 1986)

nized Workers' Rights 725.704 Source, origin and nationality

726.7101 Policy. requirements Contract clause.

726.7102 PD 20 provision. The clause in 752.225–70 is required in

AUTHORITY: Sec. 621, Pub. L. 87-195, 75 Stat.

445, (22 U.S.C. 2381) as amended; E.0.12163, all USAID program-funded contracts

Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., under which the contractor may pro

p. 435. cure goods or services.

SOURCE: 55 FR 8470, Mar. 8, 1990, unless oth(62 FR 40468, July 29, 1997)

erwise noted. 725.705 Local procurement-contract

Subpart 726.70—Disadvantaged clause.

Enterprises Program Local procurement may be undertaken in accordance with the provi- 726.7001 Scope of subpart. sions of 22 CFR 228.40. All contracts in

This subpart supplements FAR part volving performance overseas shall

19 and implements the provisions of contain the clause in 752.225–71.

certain foreign assistance appropria[62 FR 40468, July 29, 1997]

tions acts (see section 706.302–71(a))

concerning disadvantaged enterprises 725.706 Geographic source waivers.

which require, in general, that not less (a) Authority to waive source, origin, than ten percent of the aggregate nationality, and transportation serv amount made available for developices requirements is set forth in chap ment assistance and for assistance for ters 103 and 310 of the ADS.

famine recovery and development in (b) The contracting officer shall in Africa shall be made available to dissert the authorized geographic code advantaged enterprises. See part 705

and part 706 for additional provisions on publicizing contract actions and using other than full and open competition. (58 FR 8702, Feb. 17, 1993. Redesignated and amended at 61 FR 39093, July 26, 1996; 62 FR 40468, July 29, 1997]

ment and daily business controlled by one or more such individuals.

(f) Socially disadvantaged individuals has the same meaning as in FAR 19.001, except that the term includes women. (56 FR 27209, June 13, 1991, as amended at 56 FR 52212, Oct. 18, 1991. Redesignated at 61 FR 39093, July 26, 1996)

726.7002 Definitions.

(a) Controlled by socially and economically disadvantaged individuals means management and daily business are controlled by one or more such individ

individ. uals.

(b) Disadvantaged enterprises means U.S. organizations or individuals that are:

(1) Business concerns (as defined in FAR 19.001) owned and controlled by socially and economically disadvantaged individuals;

(2) Institutions designated by the Secretary of Education, pursuant to 34 CFR 608.2, as historically black colleges and universities;

(3) Colleges or universities having a student body in which more than 40 percent of the students are Hispanic American; or

(4) Private voluntary organizations which are controlled by individuals who are socially and economically disadvantaged.

(c) Economically disadvantaged individuals has the same meaning as in FAR 19.001, except that the term includes women.

(d) Owned by socially and economically disadvantaged individuals means at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged, or a publicly owned business having at least 51 percent of its stock owned by one or more socially and economically disadvantaged individuals.

(e) Small disadvantaged business means a small business concern (as defined in FAR 19.001) that is at least 51 percent unconditionally owned by one or more individuals who are both socially and economically disadvantaged (as defined in this section), or a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals (as defined in this section) and that has its manage

726.7003 Policy.

USAID promotes participation in its projects by disadvantaged enterprises. In order to achieve the goals in foreign assistance appropriation acts, contracts which are to be funded from amounts made available from the appropriations cited in section 706.30271(a)(1) are subject to the following policies:

(a) Authority in section 8(a) of the Small Business Act (15 U.S.C. 637(a)) shall be used to the maximum practicable extent;

(b) Other than full and open competition in contracting with certain disadvantaged enterprises shall be authorized in accordance with 706.302–71;

(c) Subcontracting with disadvantaged enterprises shall be carried out in accordance with section 726.7007;

(d) In accordance with 705.207, the Office of Small and Disadvantaged Business Utilization (OSDBU) shall be notified at least seven business days before publicizing a proposed procurement in excess of $100,000. (56 FR 27209, June 13, 1991. Redesignated at 61 FR 39093, July 26, 1996, as amended at 62 FR 40468, July 29, 1997)

726.7004 Determination to use other

than full and open competition. The determinations required in order to use the authority under 706.302–71 for other than full and open competition shall be made by the contracting officer in consultation with the Director of OSDBU. In the event of a disagreement between the contracting officer and the Director of OSDBU, the head of the contracting activity shall make the final determination. (55 FR 8470, Mar. 8, 1990. Redesignated at 61 FR 39093, July 26, 1996.)

726.7005 Exceptions.

The notification requirement in 705.207 and the subcontracting requirement in 726.7007 are based on statutory requirement and may not be deviated from under the provisions of subpart 701.4. By statute, the Administrator or designee may determine that these requirements do not apply to a particular contract or category of contracts. The M/OP Director has been designated to make such determinations. One such determination concerning subcontracting is set out in 726.7007. [58 FR 8702, Feb. 17, 1993. Redesignated at 61 FR 39093, July 26, 1996, as amended at 62 FR 40468, July 29, 1997; 64 FR 42040, Aug. 3, 1999)

modification which constitutes new procurement (except for a contract or modification with a disadvantaged enterprise as defined in 726.7002) with respect to which more than $500,000 is to be funded with amounts made available for development assistance or from the appropriations cited in section 706.302 71(a)(1) shall contain a provision requiring that not less than ten percent of the dollar value of the contract must be subcontracted to disadvantaged enterprises, including disadvantaged enterprises which are not small.

(b) This requirement does not apply when the contracting officer, with the concurrence of the Director of OSDBU, certifies there is no realistic expectation of U.S. subcontracting opportunities and so documents the file. If the contracting officer and the Director of OSDBU do not agree, the determination will be made by the head of the contracting activity. See 726.7005 for guidance on other potential exceptions.

(c) The contracting officer shall insert the clause in 752.226–2 in any solicitation or contract as provided in paragraph (a) of this section, unless exempted in accordance with the provisions of paragraph (b) of this section. (55 FR 8470, Mar. 8, 1990, as amended at 56 FR 27209, June 13, 1991; 56 FR 52213, Oct. 18, 1991; 58 FR 42255, Aug. 9, 1993. Redesignated at 61 FR 39093, July 26, 1996, as amended at 62 FR 40468, July 29, 1997; 62 FR 47532, Sept. 9, 1997)

726.7006 Determination of status as a

disadvantaged enterprise. (a) To be eligible for an award under AIDAR 706.302–71 providing for other than full and open competition, the contractor must qualify, as of both the date of submission of its offer and the date of contract award, as a small disadvantaged business (as defined in 726.7002), an historically black college or university, a college or university in which more than 40 percent of the students are Hispanic Americans, or a private voluntary organization controlled by individuals who are socially and economically disadvantaged. The contracting officer shall insert the provision at 752.226-1 in any solicitation or contract to be awarded under the provisions of 706.302–71.

(b) The contracting officer shall accept an offeror's representations and certifications under the provisions referenced above that it is a small disadvantaged business unless he or she determines otherwise based on information contained in a challenge of the offeror's status by the Small Business Administration or another offeror, or otherwise available to the contracting officer. (55 FR 8470, Mar. 8, 1990, as amended at 56 FR 27209, June 13, 1991. Redesignated at 61 FR 39093, July 26, 1996, as amended at 62 FR 40468, July 29, 1997)

726.7008 Limitations on subcon

tracting The contracting officer shall insert the clause at 752.226–3, Limitations on Subcontracting, in any solicitation and contract for technical assistance seryices which is to be awarded under the authority of 706.302–71. (58 FR 42255, Aug. 9, 1993. Redesignated at 61 FR 51235, Oct. 1, 1996]

Subpart 726.71-Relocation of U.S.

Businesses, Assistance to Export Processing Zones, Internationally Recognized Work

ers' Rights 726.7101 Policy.

USAID Policy Determination (PD) 20, “Guidelines to Assure USAID Programs do not Result in the Loss of Jobs

726.7007 Requirement for subcon

tracting with disadvantaged enter

prises. (a) In addition to the requirements in FAR subpart 19.7, any new contract or

in the U.S.” implemented statutory prohibitions on expenditure of appropriated funds. The PD contains a standard provision for inclusion in USAID-funded grants and inter-agency agreements and indicates that when the PD applies to a contract, appropriate provisions covering the subject matter are to be included. When the provisions of PD 20 do apply to a contract, the cognizant technical office shall provide to the contracting officer appropriate language tailored to the specific circumstances for the contract statement of work, or if applicable to the circumstances, the provision included in the PD (see 726.7102) may be used as a clause in the contract. The provision is not required in subcontracts. (61 FR 39093, July 26, 1996)

726.7102 PD 20 provision. RELOCATION OF U.S. BUSINESSES, ASSISTANCE

TO EXPORT PROCESSING ZONES, INTERNATIONALLY RECOGNIZED WORKERS' RIGHTS (JAN 1994) No funds or other support provided hereunder may be used in an activity reasonably likely to involve the relocation or expansion outside of the United States of an enterprise located in the United States if non-U.S. production in such relocation or expansion replaces some or all of the production of, and reduces the number of employees at, said enterprise in the United States.

No funds or other support provided hereunder may be used in an activity the purpose of which is the establishment or development in a foreign country of any export processing zone or designated area where the labor, environmental, tax, tariff, and safety laws of the country would not apply, without the prior approval of USAID.

No funds or other support provided hereunder may be used in an activity which contributes to the violation of internationally recognized rights of workers in the recipient country, including those in any designated zone or area in that country. (61 FR 39093, July 26, 1996]

SUBCHAPTER E-GENERAL CONTRACTING REQUIREMENTS

PART 728-BONDS AND

during the term of the contract, no reINSURANCE

lease should be issued to the surety

until all advances made and to be made Subpart 728.1—Bonds

under the contract have been fully liq

uidated in accordance with the proviSec.

sions of the contract, such as no-pay 728.105–1 Advance payment bonds.

vouchers, reports of expenditures, or by

refund. Where the surety's obligation Subpart 728.3—Insurance

under the bond is limited to advances 728.305-70 Overseas worker's compensation

made during a specified period of time, and war-hazard insurance-waivers and

no release should be issued to the surUSAID insurance coverage.

ety until all advances made and to be 728.307-2 Liability.

made during the specified period have 728.30770 Medical Evacuation (MEDEVAC) been liquidated as aforesaid.

Services (Mar 1993). 728.309 Contract clause for worker's com

[49 FR 13249, Apr. 3, 1984, as amended at 50 pensation insurance.

FR 50302, Dec. 10, 1985; 55 FR 6802, Feb. 27, 728.313 Contract clauses for insurance of

1990; 56 FR 67224, Dec. 30, 1991; 59 FR 33446,

1990; 56 transportation or transportation-related June 29, 1994) services.

Subpart 728.3— Insurance AUTHORITY: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163,

728.305–70 Overseas worker's comSept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., p. 435.

pensation and war-hazard insur

ance-waivers and USAID insurSOURCE: 49 FR 13249, Apr. 3, 1984, unless ance coverage. otherwise noted.

(a) Upon the recommendation of the

USAID Administrator, the Secretary of Subpart 728.1-Bonds

Labor may waive the applicability of

the Defense Base Act (DBA) with re728.105–1 Advance payment bonds.

spect to any contract, subcontract, or (a) Generally, advance payment subordinate contract, work location, or bonds will not be required in connec classification of employees. Either the tion with USAID contracts containing contractor or USAID can request a an advance payment provision. In lieu waiver from coverage. Such a waiver thereof, contracting officers will follow can apply to any employees who are procedures set forth in FAR 32.409–3. not U.S. citizens, not residents of, or

(b) Whenever a contracting officer not hired in the United States. Waivers considers that an advance payment requested by the contractor are subbond is necessary, the contracting offi- mitted to the contracting officer for cer will: (1) Establish a bond penalty approval and further submission to the that will adequately protect interests Department of Labor, which grants the of the Government, (2) use the USAID waiver. Application for a waiver is subAdvance Payment Bond format, (3) mitted on Labor Department Form place bond with a surety currently ap- BEC 565. USAID has a number of blanproved by the U.S. Treasury Depart ket waivers already in effect for cerment according to the latest Treasury tain countries that are applicable to its Department Circular 570, (4) stipulate direct contracts with contractors perthat the cost of the bond shall not ex- forming in such countries. Where such ceed a rate of $7.50 per $1,000 per annum waivers are granted from coverage based on the penalty of the bond, with under the DBA, the waiver is condiout the prior written approval of the tioned on providing other worker's Office of Procurement, Policy Division compensation coverage to employees (M/OP/P).

to which the waiver applies. Usually (c) Where the surety's obligation this takes the form of securing workunder an advance payment bond covers er's compensation coverage of the all advances made to the contractor country where work will be performed

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