(4) Use of effective competitive techniques; (5) Reduction of performance risks associated with subcontractors, and facilitation of quality relationships which can include techniques such as partnering agreements, ombudsmen, and alternative disputes procedures; (6) Use of self-assessment and benchmarking techniques to support continuous improvement in purchasing; (7) Maintenance of the highest professional and ethical standards; and (8) Maintenance of file documentation appropriate to the value of the purchase and which is adequate to establish the propriety of the transaction and the price paid. [60 FR 28741, June 2, 1995] 970.7105 Purchasing from contractoraffiliated sources. (a) A management and operating contractor may purchase from sources affiliated with the contractor (any division, subsidiary, or affiliate of the contractor or its parent company) in the same manner as from other sources, provided: (1) The management and operating contractor's purchasing function is independent of the proposed contractor-affiliated source; (2) The same terms and conditions would apply if the purchase were from a third party; (3) Award is made in accordance with policies and procedures designed to permit effective competition which have been approved by the contracting officer. (This requirement for competition shall not preclude acquisition of technical services from contractor-affiliated entities where those entities have a special expertise, and the basis therefor is documented.); and (4) The award is legally enforceable where the entities are separately incorporated. (b) Subcontracts for performance of contract work itself (as distinguished from the purchase of supplies and services needed in connection with the performance of work) require DOE authorization and may involve an adjustment of the contractor's fee, if any. If the management and operating contractor seeks authorization to have some part of the contract work performed by a contractor-affiliated source, and that contractor's performance of that work was a factor in the negotiated fee, DOE approval would normally require: (1) That the contractor-affiliated source perform such work without fee or profit, or (2) An equitable downward adjustment to the management and operating contractor's fee, if any. (c) Determination on cost of money allowance as prescribed at FAR 31.20510 shall be treated as follows: (1) When a purchase from a contractor-affiliated source results from competition and is in accord with provisions and conditions of paragraphs (a)(1) through (a)(4) of this section, the contractor-affiliated source may include cost of money as an allowable element of the costs of its goods or services supplied to the contractor; provided: (i) The purchase is based on cost as set forth in 970.3102-15 and (ii) The cost of money amount is computed in accordance with FAR 31.205-10 and related procedures (see 970.30). (2) When a purchase from a contractor-affiliated source is made noncompetitively, cost of money shall not be considered an allowable element of the cost of the contractor-affiliated source purchase. [53 FR 24232, June 27, 1988, as amended at 62 FR 2313, Jan. 16, 1997] 970.7108 Review and approval. (a) The Heads of Contracting Activities shall establish thresholds by subcontract type and dollar level for the review and approval of proposed subcontracting actions by each management and operating contractor under their cognizance. Such thresholds may not exceed the authority delegated to the Head of the Contracting Activity by the Procurement Executive. In establishing these review and approval thresholds, the Heads of Contracting Activities should consider such factors as the following: (1) The nature of work to be performed under the management and operating contract; (2) The size, experience, ability, reliability, and organization of the management and operating contractor's purchasing function; (3) The internal controls, procedures, and organizational stature of the management and operating contractor's purchasing function; and (4) Policies with respect to such reviews and approvals established by the Procurement Executive. (b) Prior approval shall be required for the subcontracting of any work a contractor is obligated to perform under a contract entered into under section 41, entitled Production of Special Nuclear Material, of the Atomic Energy Act of 1954, as amended. (c) The Heads of Contracting Activities shall take such action as may be required to insure compliance with the procedure for purchasing from contractor-affiliated sources or the purchase of specific items, or classes of items, which by the terms of the contract may require DOE approval. (d) The Heads of Contracting Activities may raise or lower the review and approval thresholds established pursuant to paragraph (a) of this section at any time. Such action may be considered upon the periodic review of the contractor's purchasing system, but in any case those adjusted thresholds may not exceed the approval authority delegated to the Head of the Contracting Activity by the Procurement Executive. (e) Department of Energy approvals of specific proposed purchases pursuant to this subpart shall communicate that such approval does not relieve the management and operating contractor of any obligation under its prime contract with DOE; is given without prejudice to any rights or claims of the Government thereunder; creates no obligation on the part of the Government to the subcontractor, and is not a predetermination of the allowability of costs to be incurred under the subcontract. (f) Contracting officers shall assure that management and operating contractors establish and maintain subcontract files which contain those documents essential to present an accurate and adequate record of all purchasing transactions. (g) Contracting officers shall assure that management and operating contractors document purchases in writing, setting forth the information and data used in determining that the purchases are in the best interest of the Government. The scope and detail of this documentation shall be consistent with the nature, dollar value, and complexity of the purchase. (h) The Heads of Contracting Activities will assure that the contracting activity establishes and maintains files of the documents associated with the review and approval of subcontract actions subject to DOE review and approval. Those files shall include, among other necessary documentation, an appraisal of the proposed action by the contracting activity and a copy of the approving or disapproving document forwarded to the management and operating contractor, containing a listing of any deficiencies, a listing of any required corrective actions, any suggestions, or other relevant comments. [53 FR 24232, June 27, 1988, as amended at 59 FR 9112, Feb. 25, 1994] 970.7109 Advance notification. (a) Pursuant to section 304(b) of the Federal Property and Administrative Service Act of 1949, as amended (41 U.S.C. 254(b)) contracting officers shall assure that the written description of the management and operating contractor's purchasing system and methods provides for advance notice to the DOE contracting officer of the proposed award of the following specified types of subcontracts, except as stated in paragraph (b) of this section: (1) Cost reimbursement-type subcontracts of any award value; and (2) Fixed price-type subcontracts which exceed $25,000; and (3) Purchases from contractor-affiliated sources over a value established by the HCA. (b) Pursuant to section 602(d)13 of the Act (40 U.S.C. 474(13)) referred to in paragraph (a) of this section, the advance notification requirement for the types of purchases listed in paragraphs (a) (1) and (2) of this section shall not apply to subcontracts relating to functions derived from the Atomic Energy Commission. (c) The advance notice shall contain, as a minimum, a description of work, estimated cost, type of contract or reimbursement provisions, and extent of competition, or justification for a noncompetitive purchase procurement. The contracting officer may at any time request additional information that must be furnished promptly and prior to award of the subcontract. 970.7110 Nuclear material transfers. (a) Management and operating contractors, in preparing contracts or other agreements in which monetary payments or credits depend on the quantity and quality of nuclear material, shall be required to assure that each such contract or agreement contains a: (1) Description of the material to be transferred; (2) Provision specifying the method by which the quantities are to be measured and reported; (3) Provision specifying the procedures to be used in resolving any differences arising as a result of such measurements; (4) Provision for the use of an independent third party as an umpire to settle unresolved differences in the analytical samples; and (5) Provision specifying in detail which party shall bear the costs of resolving a difference and what constitutes such costs. (b) The provisions providing for resolution of measurement differences must be such that resolution is always accomplished, while at the same time minimizing any advantage one party may have over the other. Subpart 970.72-Facilities 970.7201 Policy. Contractors managing DOE facilities shall be required to comply with the DOE Directives applicable to facilities management. To accomplish this, all management and operating contracts which include contractor management of a DOE-owned facility shall contain the clause at 970.5204-60, Facilities management, specifying the Directives applicable to the contractual situation at the DOE facility involved. [58 FR 34926, June 30, 1993] Subpart 970.73-Technology Transfer SOURCE: 60 FR 66515, Dec. 22, 1995, unless otherwise noted. 970.7310 General. This subpart prescribes policies and procedures for implementing the National Competitiveness Technology Transfer Act of 1989. The Act required that technology transfer be established as a mission of each Governmentowned laboratory operated under contract by a non-Federal entity. The National Defense Authorization Act for Fiscal Year 1994 expanded the definition of laboratory to include weapon production facilities that are operated for national security purposes and are engaged in the production, maintenance, testing, or dismantlement of a nuclear weapon or its components. 970.7320 Policy. All new awards for or extensions of existing DOE laboratory or weapon production facility management and operating contracts shall have technology transfer, including authorization to award Cooperative Research and Development Agreements (CRADAS), as a laboratory or facility mission under Section 11(a)(1) of the Stevenson-Wydler Technology Innovation Act of 1980, as amended. A management and operating contractor for a facility not deemed to be a laboratory or weapon production facility may be authorized on a case-by-case basis to support the DOE technology transfer mission including, but not limited to, participating in CRADAS awarded by DOE laboratories and weapon production facilities. 970.7330 Contract clause. (a) The contracting officer shall insert the clause at 970.5204 40, Technology transfer mission, in each solicitation for a new or an extension of an existing laboratory or weapon production facility management and operating contract. (b) If the contractor is a nonprofit organization or small business eligible under 35 U.S.C. 200 et seq., to receive title to any inventions under the contract and proposes to fund at private expense the maintaining, licensing, and marketing of the inventions, the contracting officer shall use the basic clause with its Alternate I. (c) The contracting officer may substitute the Alternate II phrase "weapon production facility" wherever the word "laboratory" appears in the clause where the facility is operated for national security purposes and engaged in the production, maintenance, testing, or dismantlement of a nuclear weapon or its components. |