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§ 1.109

Deviations from this subchapter and Department of Defense publications governing procurement.

[25 FR. 14079, Dec. 31, 1960]

§ 1.109-1 Applicability.

For the purpose of this section, a deviation shall be considered to be any of the following:

(a) When a contract clause is set forth verbatim in this subchapter, use of a contract clause covering the same subject matter which varies from the coverage of this subchapter, or use of a collateral provision which modifies either the clause or its prescribed application constitutes a deviation; however, in the case of a purchase or contract of an offshore contracting activity with a foreign contractor made outside the United States, its possessions, or Puerto Rico, such contract clauses may (subject to the direction of authority above the level of the contracting officer) be modified if no change in intent, principle, or substance is made (Offshore contracting activities shall keep the cognizant unified Commander advised of significant deviations effected under this paragraph.)

(b) Commission of any mandatory contract clause constitutes a deviation;

(c) When a Standard, DD, or other form is prescribed by this subchapter or a Department of Defense Directive, use of any other form for the same purpose constitutes a deviation;

(d) Alteration of a Standard, DD, or other form (other than Departmental forms), except as authorized by this subchapter or a Department of Defense Directive constitutes a deviation;

(e) When limitations are imposed in this subchapter or a Department of Defense Directive upon the use of a contract clause, form, procedure, type of contract, or any other procurement action, including but not limited to the making or amendment of a contract, or actions taken in connection with the solicitation of bids or proposals, award, administration or settlement of contracts, the imposition of lesser or greater limitations constitutes a deviation; or

(f) When a policy, procedure, method or practice of conducting procurement actions of any kind at any stage of the procurement process is covered by this subchapter, any policy, procedure, method, or practice which is inconsistent

with that set forth constitutes a deviation.

[29 F.R. 14815, Oct. 31, 1964]

§ 1.109-2 Deviations affecting one contract or transaction.

Deviations from this subchapter or a Department of Defense Directive which affect only one contract or procurement may be made or authorized in accordance with Departmental procedures providing (a) special circumstances justify a deviation and (b) written notice of such deviation is furnished to the Assistant Secretary of Defense (Installations and Logistics) and in the case of the Department of the Army, to the Assistant Secretary of the Army (I&L), Attn: ASPR Policy Member; the Department of the Navy, the Chief of Naval Material, Attn: Code MAT 21C; Department of the Air Force, Director of Procurement Management, DCS/S&L, Attn: AFSPMAS; and the Defense Supply Agency, Executive Director, Procurement and Production, Attn: DSAH-PM. Such written notice shall be given in advance of the effective date of such deviations unless exigency of the situation requires immediate action.

[25 F.R. 14815, Oct. 31, 1964]

§ 1.109-3 Deviations affecting more than one contract or contractor. Except as authorized in § 1.109-2, deviations from this subchapter or a Department of Defense Directive will not be effected unless approved in advance by the Assistant Secretary of Defense (Installations and Logistics): Provided, however, That unanimous approval by the members of the ASPR Committee will constitute approval of the Assistant Secretary of Defense (Installations and Logistics) of all matters except those involving major policy. Written requests for such approval will be submitted to the Assistant Secretary of Defense (Installations and Logistics) through the ASPR Committee as far in advance as exigencies of the situation will permit, or alternatively, at the option of the Materiel Secretary concerned, through use of the Materiel Secretaries' Weekly Conference.

[26 FR. 5296, June 14, 1961]

§ 1.109-4 Deviations required by Government-to-Government agreements. Notwithstanding §§ 1.109-2 and 1.1093, any deviation from this subchapter that is required in order to comply

with a treaty or executive agreement to which the United States is a party is authorized unless the deviation would substantively affect a provision of this subchapter that is based on the requirements of a law enacted after execution of the treaty or executive agreement. In the latter event, the deviation shall, in accordance with Departmental procedures, be referred to the ASPR Committee for consideration, and the cognizant unified Commander shall be advised of such action. Any procurement action which constitutes a deviation from an ASPR provision based on such a requirement of law shall be held in abeyance pending consideration by the ASPR Committee. However, if the subject matter of the ASPR provision is not covered in such a treaty or executive agreement and it is decided to treat the subject matter of such an ASPR provision in the contract, the treatment must be in accord with the intent, principle, and substance of the ASPR provision; provided that, if such treatment involves a significant deviation from a clause set forth verbatim in this subchapter, the cognizant unified commander shall be advised.

[26 F.R. 5296, June 14, 1961]

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Request for approval of any deviation shall be forwarded to the approving authority through procurement channels. Each submission shall contain as a minimum:

(a) Identification of the requirement of this subchapter from which deviation is sought;

(b) A full description of the deviation and the circumstances in which it will be used;

(c) A description of the intended effect of the deviation;

(d) A copy of any pertinent document, including forms or clauses and the proposed contractor's request, if any;

(e) A statement of the period of time for which the deviation is needed; and (f) Detailed reasons supporting the request.

[25 F.R. 14815, Oct. 31, 1964]

§ 1.110 Reports of purchases and con

tracts.

Periodic and special reports on purchases and contracts are prescribed by the Department of Defense. These reports are designed to meet statutory

and other Congressional requirements. requirements of Federal agencies, and provide all levels of management with data on which to formulate procurement policy as well as to determine the extent of adherence to prescribed policy. Basic to the preparation of all these regular and special reports, so far as they affect individual contracting officers, is DD Form 350 (Individual Procurement Action Report). Each item of this form enters into the preparation of reports furnished the President, the Congress, and other Federal agencies, and is used for management purposes within the Department of Defense. The accuracy, completeness, and timeliness of these reports are fully dependent on the careful preparation and prompt submission of DD Form 350.

[25 F.R. 14080, Dec. 31, 1960, as amended at 26 F.R. 9633, Oct. 12, 1961; 27 F.R. 8869, Sept. 6, 1962]

§ 1.111 Reports of suspected criminal conduct and non-competitive practices.

[25 F.R. 14080, Dec. 31, 1960]

§ 1.111-1 Suspected criminal conduct.

Reports of possible violations of Federal criminal statutes relating to procurement shall be made by each respective Department in accordance with procedures prescribed by that Department. Department of Defense policies and procedures with respect to the debarment, ineligibility, and suspension of bidders are set forth in Subpart F of this Part 1.

[25 F.R. 14080, Dec. 31, 1960]

§ 1.111-2 Non-competitive practices.

(a) Unless bids or proposals are genuinely competitive, contract prices tend to be higher than they should be. If the Secretary concerned or his representative considers that any bid received after formal advertising evidences a violation of the antitrust laws, he is required by 10 U.S.C. 2305(d) to refer such bids to the Attorney General for appropriate action. Similarly, evidence of such violations in negotiated procurements should be referred to the Attorney General. Practices which are designed to eliminate competition or restrain trade and which may evidence possible violations of such laws include collusive bidding, follow-the-leader pricing, rotated low bids, uniform estimating systems, sharing of the business, identical bids, etc.

(b) Contracting officers will report such practices in accordance with Departmental procedures. Reports of identical or equal bids or proposals should not be submitted automatically, but only where there is some reason to believe that those bids or proposals may not have been arrived at independently. Such reports should be accompanied by conformed copies of bid or proposal and contract documents and by other supporting data. The report should set forth:

(1) The non-competitive pattern or situation under consideration;

(2) Purchase experience in the same product or service for a reasonable period of time (one or more years) prior to the receipt of the bids or proposals under consideration, including unit and total contract price and abstracts of bids;

(3) Community of financial interest among bidders, insofar as is known;

(4) The extent, if any, to which specification requirements or patents restrict competition;

(5) Information which may be available with respect to the pricing system employed in bids or proposals believed to reflect non-competitive practices; and

(6) Any other information deemed pertinent.

(c) Evidence of non-competitive bid practices which, in the opinion of the Secretary concerned or his representative, may violate the antitrust laws shall be forwarded to the Attorney General.

(d) The reports required by this section do not satisfy the reporting requirement contained in § 1.114.

[25 F.R. 14080, Dec. 31, 1960, as amended at 27 F.R. 11643, Nov. 27, 1962]

§ 1.112 Federal procurement regulations and General Services Administration regulations relating to procurement of supplies and services.

All policy and procedural matter of Federal Procurement Regulations (See Chapter I of Title 41) and General Services Administration regulations which are to be made applicable to the Department of Defense and are within the scope of this subchapter will be codified herein prior to compliance therewith by the Military Departments. The applicable Department of Defense Directives covering the assignments of responsibility for the purchasing of specific supplies under Interagency Purchase Assignment will be incorporated by reference in this subchapter. For Depart

ment of Defense implementation of Federal Supply Schedules, see § 5.103. [25 F.R. 12080, Dec. 31, 1960]

§ 1.113 Code of conduct. [29 F.R. 2809, Feb. 29, 1964]

§ 1.113-1 Government personnel.

While

All governmental personnel engaged in procurement and related activities shall · conduct business dealing with industry in a manner above reproach in every respect. Transactions relating to expenditure of public funds require the highest degree of public trust to protect the interests of the Government. many Federal laws and regulations place restrictions on the actions of governmental personnel, the latter's official conduct must, in addition, be such that the individual would have no reticence about making a full public disclosure thereof. See AR 600-50 and CPR C2, for the Army; SECNAV Instr. 5370.2B, revised 26 June 1963, for the Navy; AFR 30-30, for the Air Force; and DSAR 5500.1, for the Defense Supply Agency. [29 F.R. 14815, Oct. 31, 1964] § 1.113-2

interest.

Organizational conflicts of

(a) Department of Defense Directive 5500.10, promulgated June 1, 1963, Subject: Rules for the Avoidance of Organizational Conflicts of Interest, is set forth in Part 141 of this chapter.

(b) The Directive describes examples of various organizational conflicts of interest which might come into being and methods for avoidance of such conflicts. It provides that action must be taken to avoid placing a contractor in a position where his judgment might be biased or where he would have an unfair competitive advantage within the scope and intent of the rules. All prospective contractors in such situations will be advised of the extent of the applicability of these rules by a notice in solicitations and by a clause in resulting contracts. Such contract clause shall spell out the specific extent of any future restrictions on the contractor which are imposed by the contract. A standard form of notice for use in solicitations or contract clause is not prescribed in this subchapter since such notices in solicitations and contract clauses must be especially adapted to apply the principle of these rules to the specific facts of each contractual situation. The rules for avoidance of organizational conflict, as such, do not im

pose any contractual obligation on the contractor; such obligation is imposed only by the contract clause designed to carry out such rules. The contracting officer shall not impose restrictions on any contractor in reliance on these rules in the absence of a specific contractual agreement with that contractor. This, of course, does not require contract awards in circumstances that demonstrate a clear conflict of interests of a kind specifically not within the scope of the rules. The Military Departments and other Department of Defense Agencies will maintain a record of all such clauses incorporated in contracts and notices in solicitations for a period of time ending 30 June 1964.

[29 F.R. 2809, Feb. 29, 1964]

§ 1.114 Reporting of identical bids.

(a) General. Executive Order 10936 dated April 24, 1961, as implemented by the Department of Justice, requires a report to be submitted to the Attorney General on each formally advertised procurement (including small business restricted advertising) over $10,000 which involves identical bids. Identical bids are two or more bids for the same line item which:

(1) Are identical on their face (regardless of evaluation factors such as discount, transportation, etc.) either as to unit price or total line item amount;

or

(2) Are identical as evaluated either as to unit price or total line item amount. A line item is an item of supply or service which independently can be made the subject of an award by the Government. However, the reporting requirements herein established for line items shall be applicable to invitations calling for line item bidding even though the invitations or bids contained qualifying or restrictive limitations on award (e.g., all or none bids or award on one item being conditioned on award of other items). This reporting requirement is in addition to the reports required by § 1.111-2.

(b) Information to be obtained from bidders. Each invitation for bids for a procurement estimated to exceed $10,000 shall include substantially the following: PARENT COMPANY AND EMPLOYER IDENTIFICATION NUMBER

(a) Bidder represents that he [ ] is, [ ] is not, owned or controlled by a parent company. For this purpose a parent company is defined as one which either owns or controls his activities and basic business policies

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(c) Bidder will provide in the applicable space below, if he has no parent company, his own Employer's Identification Number (E.I. No.) (Federal Social Security Identification Number used on Federal Tax Return), or, if he has a parent company, the E. I. No. of his parent company. Bidder's E. I. No.

Parent Company's E. I. No.

If a bidder fails to provide the above information on an invitation for bids and if identical bids are involved, one inquiry will be made in an effort to obtain the information. Failure to provide information concerning the parent company or the employer's identification number is not a basis for rejection of bids.

(c) Reportable bids. An identical bid report shall be submitted when identical bids are received and the bid value of all line items covered by the invitation for bids exceeds $10,000 (based on the apparent low bid for each line item) except that reports will not be submitted when:

(1) Bids are received only from foreign sources on invitations involving delivery and performance outside the United States, its possessions, or Puerto Rico;

(2) There is no line item on which the apparent low bids exceeds $2,500 (line item evaluation computations beyond those normally made to determine the low bidder are not required); or

(3) No identical bids are discovered in the normal process of evaluating bids for award and no identical bids are apparent on the face of the bid.

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printed as the cover sheet of each pad of these forms. Reports shall be made within 20 days following the disposition of all of one or more contracts or other action. Two completed copies of the report, a copy of the invitation for bids and a copy of the completed abstract of bids shall be sent to the Attorney General, Ref: AT-IBR, Washington 25, D.C. The abstract of bids need not be furnished when the number of line items on an invitation exceeds 100; in which event, the identical bid report shall be annotated to indicate (1) the number of line items and (2) the number of bidders on the invitation. A copy of the identical bid report shall be retained by the purchasing activity.

(e) Completion of reports. All bids for each line item on which reportable identical bids have been disclosed shall be reported regardless of whether the identical bids were the low bids. Reports are required on reportable identical bids regardless of whether an award is made on the line item, the invitation is canceled, or any other disposition is made subsequent to the public opening of the invitation.

[27 F.R. 11643, Nov. 27, 1962] § 1.115

Noncollusive bids and

posals.

pro

(a) In order to promote full and free competition for Government contracts, the following certification shall be included in all invitations for bids and requests for proposals or quotatons (other than for small purchases made in accordance with Subpart F, Part 3 of this chapter, and other than requests for technical proposals in connection with two-step formal advertising) involving firm fixed-price contracts and fixed-price contracts with escalation. When the solicitation authorizes the submission of oral offers and requires that such offers be confirmed in writing, it shall require that the certification be included with or be expressly incorporated by reference in and thereby made a part of the confirmation.

CERTIFICATION OF NONCOLLUSION (Nov. 1963)

(a) By submission of this bid or proposal, the bidder or offeror certifies in connection with this procurement that:

(1) The price in this bid or proposal has been independently arrived at without collusion with any other bidder or offeror or with any competitor;

(2) Unless otherwise required by law, the price in this bid or proposal has not been

knowingly disclosed and will not be knowingly disclosed prior to opening, in the case of a bid, or prior to award, in the case of a proposal, directly or indirectly to any other bidder or offeror or to any competitor; and

(3) No attempt has been or will be made to induce any other person or firm to submit or not to submit a bid or proposal.

(b) The person signing this bid or proposal certifies that he has fully informed himself regarding the accuracy of the statements contained in this certification.

(c) This certification is not applicable to a foreign bidder or offeror submitting a bid or proposal for a contract which requires performance or delivery outside the United States, its possessions, and Puerto Rico.

(d) A bid or proposal will not be considered for award where (a)(1), (a)(3), or (b) above has been deleted or modified. Where (a) (2) above has been deleted or modified, the bid or proposal will not be considered for award unless the bidder or offeror furnishes with the bid or proposal a signed statement which sets forth in detail the circumstances of the disclosure and the head of the agency, or his designee, determines that the disclosure was not made with collusive intent.

(b) The authority to make the determination described in paragraph (d) of the above certification shall not be delegated to an official below the level of the head of a procuring activity.

(c) When a certification is suspected of being false or there is indication of collusion, the matter shall be processed in accordance with § 1.111. For rejection of bids which are suspected of being collusive and for the negotiation of procurements subsequent to such rejection, see §§ 2.404-1(b) (7) and 3.215 of this chapter.

[29 F.R. 2809, Feb. 29, 1964, as amended at 29 F.R. 6911, May 27, 1964]

Subpart B-Definitions of Terms § 1.201

Definitions.

As used throughout this subchapter, the words and terms defined in this subpart shall have the meanings set forth in this subpart, unless (a) the context in which they are used clearly required a different meaning, or (b) a different definition is prescribed for a particular part or portion thereof. [27 F.R. 11643, Nov. 27, 1962]

§ 1.201-1 Change order.

"Change order" means a written order, signed by the contracting officer, directing the contractor to make changes which the Changes clause of the contract

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