970.3102-21 Fines and penalties.

It is Department of Energy policy not to reimburse management and operating contractors for fines and penalties except as provided in 48 CFR (DEAR) 970.5204-13(e)(12), Allowable Costs and Fixed Fee (Management and Operating Contracts), 48 CFR (DEAR) 970.5204-14(e)(10), Allowable Costs and Fixed Fee (Support Contracts), and 48 CFR (DEAR) 970.5204-75, Preexisting Conditions.

[62 FR 34865, June 27, 1997]

970.3103 Contract clauses.

(a) The appropriate cost principles clause at 970.5204-13 or 970.5204-14 shall be included in a management and operating contract.

(b) The political activity cost prohibition clause at 48 CFR 970.5204-17 shall be included in all M&O contracts.

(c) The clause setting forth cost prohibitions related to legal and other proceedings at 970.5204-61 shall be included in all M&O contracts.

(d) The clause at 970.5204-75, Preexisting Conditions, shall be included in management and operating contracts. Alternate I of the clause shall be inserted in management and operating contracts with incumbent contractors. Alternate II shall be inserted in contracts with contractors not previously working at that particular site or facility.

[49 FR 12090, Mar. 28, 1984. Correctly designated at 52 FR 1610, Jan. 14, 1987, and amended at 53 FR 21648, June 9, 1988; 58 FR 61628, Nov. 22, 1993; 62 FR 34865, June 27, 1997; 63 FR 5276, Feb. 2, 1998]

Subpart 970.32-Contract
Financing

970.3202 Advance payments.

(a) The Head of the Contracting Activity, shall authorize advance payments without interest; and approve the findings, determinations and the contract terms and conditions concerning advance payments in accordance with the procedures set forth in FAR Subpart 32.4, Advance Payments, as amended by subpart 932.4.

(b) Advance payments shall be made under a letter-of-credit arrangement for deposit in a special bank account.

(c) Prior to providing any advance payments, the contracting officer shall enter into an agreement with the contractor and a financial institution, regarding a special bank account where the advanced funds are to be deposited by the Government. Such agreement shall (1) provide that DOE shall retain title to the unexpended balance of funds in the special bank account including revenues if any, deposited by the contractor; and that such title shall be superior to any claim or lien of the bank of deposit and (2) incorporate as necessary or appropriate, additional financial provisions required by Treasury or Departmental financial regulations.

(d) Deviations from these specified requirements cited in paragraph (c) above shall be considered a deviation requiring approval of the Head of the Contracting Activity.

(e) Letter-of-Credit arrangements shall be prepared in accordance with FAR 32.406, Letters of Credit, and shall be coordinated between the procurement and finance organizations.

970.3270 Clauses.

The clauses at 970.5204-16 shall be included in management and operating contracts when advances of funds are to be placed in a special bank account. They may be appropriately modified to incorporate any additional provisions that may be required by governing financial regulations of the Treasury Department or the Department.

970.3271 Special bank account agree ment.

NOTE: The following agreement shall be used with special bank accounts in accordance with 970.3202(c).

(a) On the date of 19, DOE and the Contractor entered into Contract(s) No. or a supplemental agreement thereto, providing for the making of advances of Government funds to the contractor a copy of such advance provisions has been furnished to the Bank.

(b) DOE requires that amounts advanced to the Contractor under said contract or supplemental agreement be deposited in a Special Bank Account or accounts with a bank designated by the Treasury Department as depositary and financial agent of the Government (Section 10 of the Act of June 11, 1942, 56 Stat. 356; 12 U.S.C. 265), separate from any of the Contractor's general or other funds; and, the Bank being such a bank, the parties are agreeable to so depositing said amounts with the Bank.

In consideration of the foregoing, and for other good and valuable considerations, it is agreed that,

(1) The Government shall have title to the credit balance in said account to secure the return of all advances made to the contractor, which title shall be superior to any lien or claim of the Bank or others with respect to such account.

(2) The Bank will be bound by the provisions of said contract or contracts relating to the deposit and withdrawal of funds in the above Special Bank Account, but shall not be responsible for the application of funds properly withdrawn from said account. After receipt by the Bank of written directions from the contracting officer, or from the duly authorized representative of the contracting officer, the Bank shall act thereon and shall be under no liability to any party hereto for any action taken in accordance with the said written directions.

(3) The Government, or its authorized representatives, shall have access to the books and records maintained by the Bank with respect to such Special Bank Account at all reasonable times and for all reasonable purposes, including, without limitation, the inspection or copying of such books and

records and any and all memoranda, checks, correspondence, or documents pertaining thereto. Except as agreed upon by the Government and the Bank, all books and records pertaining to the Special Bank Account in the possession of the Bank relating to the Special Bank Account agreement shall be preserved by the Bank for a period of three (3) years after final payment under the contract to which the Special Bank Account agreement pertains or otherwise disposed of in such manners as may be agreed upon by the Government and the Bank.

(4) In the event of the services of any writ of attachment, levy of execution, or commencement of garnishment proceedings with respect to the Special Bank Account, the Bank will promptly notify the Head of the Contracting Activity, DOE.

In witness whereof the parties hereto have caused this Agreement to be executed, as of the day and year first above written. (Signatures and Official Titles)

[49 FR 12063, Mar. 28, 1984, as amended at 59 FR 9110, Feb. 25, 1994]

970.3272 Reduction or suspension of advance, partial, or progress payments.

(a) The procedures prescribed at FAR 32.006 shall be followed.

(b) The agency head has delegated their responsibilities under this section to the Senior Procurement Executive.

(c) The remedy coordination official is responsible for receiving, assessing, and making recommendations to the Senior Procurement Executive.

(d) The contracting officer shall insert the clause at 48 CFR 970.5204-85, Reduction or suspension of contract payments, in management and operating contracts.

[63 FR 5276, Feb. 2, 1998]

Subpart 970.36-Construction and A-E Contracts

970.3601 Special construction clause for operating contracts.

The clause in 970.5204-38 shall be used in management and operating contracts when the contractor will not perform covered work with its own forces but may procure construction by subcontract.

[49 FR 12063, Mar. 28, 1984. Redesignated at 53 FR 24231, June 27, 1988]

(a) Utility services defined at FAR 41.101 for the furnishing of electricity, gas (natural or manufactured), steam, water, and/or sewerage to facilities owned or leased by DOE shall be acquired directly by DOE and not by a contractor using a subcontractor arrangement, except as provided in (b) below.

(b) Where it is determined to be in the best interest of the Government, a Contracting Activity may authorize a management and operating contractor for a facility to acquire such utility service for the facility, after requesting and receiving concurrence to make such an authorization from the Director, Public Utilities Branch, Headquarters. Any request for such concurrence should be included in the Utility Service Requirements and Options Studies required by DOE directives in subseries 4540 (Public Services). Alternatively, it may be made in a separate document submitted to the Director of that office early in the acquisition cycle. Any request shall set forth why it is in the best interst of the DOE to acquire utilitiy service(s) by subcontract, i.e., what the benefits are, such as economic advantage.

(c) The requirements of FAR part 41, this section, and DOE directives in subseries 4540 shall be applied to a subcontract level acquisition for furnishing utility services to a facility owned or leased by DOE.

[56 FR 41965, Aug. 26, 1991, as amended at 59 FR 9109, Feb. 25, 1994. Redesignated and amended at 62 FR 2312, Jan. 16, 1997.]

(a) Management and operating contractors should meet their acquisition requirements from Government sources of supply, when these sources are made available to them and if it is economically advantageous or otherwise in the best interest of the Government.

(b) Contracting officers may authorize management and operating contractors and their subcontractors with cost-reimbursement type subcontracts, where all higher-tier subcontracts are cost-reimbursement types, to acquire materials and services directly from such Government sources of supply in accordance with the requirements of this subpart or the consent of agencies involved.

(c) Materials, supplies, and equipment procured from Government sources of supply under the procedures described herein must be used exclusively in connection with management and operating contract work, except as otherwise authorized by the Heads of Contracting Activities.

(d) Many supply facilities and contracts of the Department of Defense are made available to DOE and its management and operating contractors. Accordingly:

(1) Requisitions or purchase orders shall be submitted directly to these sources, unless otherwise specified. Field offices will be notified by the Procurement Executive, or designee,

when such contracts and facilities are made available. Inquiries in connection with these sources may be directed to the Procurement Executive.

(2) Contractor requisitions submitted to Defense Logistics Centers should include the following statement. “The consignee of the supplies and materials requisitioned herein is acting in behalf of and as agent for the Department of = Energy with respect to the expenditure of Government funds." Orders submitted directly to DOD contractors shall be accompanied by an authorization substantially similar to that in FAR 51.103.

(e) Contracting officers, when reviewand ing the procurement systems methods of contractors that have been authorized to use Government sources of supply, shall assure that provision is made for documenting the justification of procurements from commercial sources of items available from Government sources of supply.

(f) Direct procurement by DOE, rather than by a management and operating contractor, shall be required where deemed necessary by the Head of the Contracting Activity in order to carry out special requirements of appropriation acts or other applicable laws relating to particular items.

(g) The Procurement Executive shall be informed of instances in which Government sources of supply are not used because of the quality of the items available or when a Federal Supply Schedule contractor refuses to honor an order.

[49 FR 12063, Mar. 28, 1984; 49 FR 38953, Oct. 2, 1984, as amended at 59 FR 9110, Feb. 25, 1994]

970.5102 Use of interagency motor pool vehicles and related services. The provisions of FAR subpart 51.2, FPMR 41 CFR 101-39, and DOE-PMR 41 CFR 109-39 apply.

Subpart 970.52-Contract Clauses for Management and Operating Contracts

970.5201 General policy.

Many of the clauses set forth in subparts of FAR Part 52 and part 952 of this chapter apply to management and

operating contracts. The clauses in this subpart are to be used in addition to or in place of the FAR or the DEAR counterpart contract clauses where appropriate. Further modifications and notes to certain FAR clauses are also prescribed, in addition to those set forth in part 952.

970.5202 Deviations.

Deviations from FAR and DEAR contract clauses and solicitation provisions shall be made only in accordance with the deviation procedures of 48 CFR (FAR) subpart 1.4 and written internal Departmental procedures.

[63 FR 56867, Oct. 23, 1998]

970.5203 Modifications and notes to FAR clauses.

970.5203-1 Covenant against contingent fees.

Insert the clause at (FAR) 48 CFR 52.203-5 with the addition of the following paragraph.

(c) Subcontracts and purchase orders. Unless otherwise authorized by the contracting officer in writing, the contractor shall cause provisions similar to the foregoing to be inserted in all subcontracts and purchase orders entered into under this contract.

[49 FR 12063, Mar. 28, 1984, as amended at 59 FR 9110, Feb. 25, 1994; 60 FR 49516, Sept. 26, 1995]

970.5203-2 [Reserved]

970.5203-3 Buy American Act.

Insert the clause at (FAR) 48 CFR 52.225-3 but:

Substitute "use" for "deliver" in paragraph (b).

[49 FR 12063, Mar. 28, 1984, as amended at 56 FR 41965, Aug. 26, 1991; 59 FR 9110, Feb. 25, 1994]

970.5204 Clauses to be used in addition to or in place of the contract clauses set forth in FAR Part 52 and DEAR Part 952.

970.5204-1 Security.

(a) As prescribed in 970.0404–4(a)(1), insert the Security clause found at 952.204-2 and the Classification/Declassification clause found at 952.204-70.

(b) As prescribed in 970.0404–4(a)(2), insert the following Counterintelligence clause in contracts containing the security and classification/declassification clauses:

COUNTERINTELLIGENCE (SEP 1997)

(a) The contractor shall take all reasonable precautions in the work under this contract to protect DOE programs, facilities, technology, personnel, unclassified sensitive information and classified matter from foreign intelligence threats and activities conducted for governmental or industrial purposes, in accordance with DOE Order 5670.3, Counterintelligence Program; Executive Order 12333, U.S. Intelligence Activities; and other pertinent national and Departmental Counterintelligence requirements.

(b) The contractor shall appoint a qualified employee(s) to function as the Contractor Counterintelligence Officer. The Contractor Counterintelligence Officer will be responsible for conducting defensive Counterintelligence briefings and debriefings of employees traveling to foreign countries or interacting with foreign nationals; providing thoroughly documented written reports relative to targeting, suspicious activity and other matters of Counterintelligence interest; immediately reporting targeting, suspicious activity and other Counterintelligence concerns to the DOE Headquarters Counterintelligence Division; and providing assistance to other elements of the U.S. Intelligence Community as stated in the aforementioned Executive Order, the DOE Counterintelligence Order, and other pertinent national and Departmental Counterintelligence requirements.

[62 FR 51804, Oct. 3, 1997]

970.5204-2 Integration of environment, safety, and health into work planning and execution.

As prescribed in 48 CFR (DEAR) 970.2303-2(a), insert the following clause.

INTEGRATION OF ENVIRONMENT, SAFETY, AND HEALTH INTO WORK PLANNING AND EXECUTION (JUN 1997)

(a) For the purposes of this clause,

(1) Safety encompasses environment, safety and health, including pollution prevention and waste minimization; and

(2) Employees include subcontractor employees.

(b) In performing work under this contract, the contractor shall perform work safely, in a manner that ensures adequate protection for employees, the public, and the environment, and shall be accountable for the safe performance of work. The contractor shall

exercise a degree of care commensurate with the work and the associated hazards. The contractor shall ensure that management of environment, safety and health (ES&H) functions and activities becomes an integral but visible part of the contractor's work planning and execution processes. The contractor shall, in the performance of work, ensure that:

(1) Line management is responsible for the protection of employees, the public, and the environment. Line management includes those contractor and subcontractor employees managing or supervising employees performing work.

(2) Clear and unambiguous lines of authority and responsibility for ensuring ES&H are established and maintained at all organizational levels.

(3) Personnel possess the experience, knowledge, skills, and abilities that are necessary to discharge their responsibilities.

(4) Resources are effectively allocated to address ES&H, programmatic, and operational considerations. Protecting employees, the public, and the environment is a priority whenever activities are planned and performed.

(5) Before work is performed, the associated hazards are evaluated and an agreedupon set of ES&H standards and requirements are established which, if properly implemented, provide adequate assurance that employees, the public, and the environment are protected from adverse consequences.

(6) Administrative and engineering controls to prevent and mitigate hazards are tailored to the work being performed and associated hazards. Emphasis should be on designing the work and/or controls to reduce or eliminate the hazards and to prevent accidents and unplanned releases and exposures. (7) The conditions and requirements to be satisfied for operations to be initiated and conducted are established and agreed-upon by DOE and the contractor. These agreedupon conditions and requirements are requirements of the contract and binding upon the contractor. The extent of documentation and level of authority for agreement shall be tailored to the complexity and hazards associated with the work and shall be established in a Safety Management System.

(c) The contractor shall manage and perform work in accordance with a documented Safety Management System (System) that fulfills all conditions in paragraph (b) of this clause at a minimum. Documentation of the System shall describe how the contractor will:

(1) Define the scope of work;

(2) Identify and analyze hazards associated with the work;

(3) Develop and implement hazard controls (4) Perform work within controls; and