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which are unreasonably tight or difficult of attainment are inimical to full competition, inconsistent with small business policies (see § 1.702(b) (6)), and may reIsult in higher contract prices. Therefore, prior to issuing an invitation for bids or request for proposals, the contracting officer shall question any delivery requirement which appears unrealistic, and, if necessary, initiate action to make appropriate adjustments, with due attention to relevant factors such as applicable transportation factors (see Subpart M of this part), and those listed below:

(1) Urgency of need for the supplies or services;

(2) Production time (quantity, complexity of design, etc.);

(3) Market conditions;
(4) Transportation time;
(5) Industry practices;

(6) Capabilities of small business concerns;

(7) Time for obtaining and evaluating bids or offers, and awarding contracts.

(8) Time for contractors to comply with any conditions precedent to contract performance; and

(9) Time for Government to perform its obligations under the contract (e.g., furnishing Government property to the contractor, approval of preproduction samples, and inspection).

(b) Where timely delivery or performance is unusually important to the Government, liquidated damages provisions may be used as provided in § 1.310.

(c) Invitations for bids and requests for proposals shall, except where clearly unnecessary, inform bidders or offerors of the basis on which their bids or proposals will be evaluated with respect to time of delivery or performance.

[25 F.R. 14083, Dec. 31, 1960, as amended at 29 F.R. 11809, Aug. 19, 1964]

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ing notice by receipt of contract document executed by the Government). The full period which the Government holds out as being available for contract performance should not be curtailed to the prejudice of the contractor by delay in giving notice of award. Accordingly, one of the provisions in paragraph (b) or (c) of this section shall be used in advertised procurements and may be suitability modified and used in appropriate negotiated procurements (other than small purchases).

(b) Where the delivery schedule is in terms of specific calendar dates, invitations for bids will include one of the following provisions:

(1) The foregoing delivery requirements are based on the assumption that the Government will make award by [purchasing activity insert calendar date]. Each delivery date in the delivery schedule set forth herein will be extended by the number of calendar days after the above date that the contract is in fact awarded. Attention is directed to paragraph 8(d) of the Terms and Conditions of the Invitation for Bids, which provides that a written award mailed or otherwise furnished to the successful bidder results in a binding contract. Therefore, in computing the available time for performance, the bidder should take into consideration the time required for notice of award to arrive through the ordinary mails.

(2) The foregoing delivery requirements are based on the assumption that the successful bidder will receive the notice of award by [purchasing activity insert calendar date]. The Government will extend each delivery date in the delivery schedule set forth herein by the number of calendar days after the above date that the contractor receives notice of award: provided, that the contractor promptly acknowledges such receipt.

(c) Where the delivery schedule is based on the date of contract (see paragraph (a) (2) of this section), the invitations for bids will include the following provision:

Attention is directed to paragraph 8(d) of the Terms and Conditions of the Invitation for Bids which provides that a written award mailed or otherwise furnished to the successful bidder results in a binding contract. Any award hereunder, or a preliminary notice thereof, will be mailed or otherwise furnished to the bidder the day the award is dated. Therefore, in computing the time available for performance, the bidder should take into consideration the time required for the notice of award to arrive through the ordinary mails. However, a bid offering delivery based on date of receipt by the contractor of the contract or notice of award

(rather than the contract date) will be evaluated by adding the maximum number of days normally required for delivery of the award through the ordinary mails. If, as so computed, the delivery date offered is later than the delivery date required in the invitation, the bid will be considered nonresponsive and rejected.

(d) Where the delivery schedule is based on the date of the contract (see paragraphs (a) (2) and (c) of this section), the contract, notice of award, acceptance of proposal, or other contract document executed by the Government shall be mailed or otherwise furnished the contractor on the day it is dated.

(e) Where the delivery schedule is based on date of receipt by the contractor of notice of award (see paragraph (a)(3) of this section), or where it is expressed in terms of specific calendar dates on the assumption that notice of award will be received by a specified date (see paragraph (b) (2) of this section), the notice of award, acceptance of proposal, or other contract document executed by the Government shall be sent by certified mail, return receipt requested, or shall be accompanied by a date of receipt acknowledgment card in accordance with Departmental procedures.

(f) When the required delivery schedule in the invitation for bids is based on the date of the contract (see paragraph (a)(2) of this section), a bid offering delivery based on date of receipt by the contractor of the contract or notice of award (see paragraph (a) (3) of this section):

(1) Shall be evaluated by adding the maximum number of days normally required for delivery of the award through the ordinary mails; and

(2) If the delivery date offered by the bid (computed in accordance with subparagraph (1) of this paragraph is later than the delivery date required in the invitation for bids, the bid shall be considered nonresponsive and rejected; but

(3) If award is made under subparagraph (1) of this paragraph, under the terms of the contract the delivery date will be the number of days, after actual receipt by the contractor of the notice of award, which were specified in the bid. [25 F.R. 14083, Dec. 31, 1960]

§ 1.305-4 Time of delivery clauses.

(a) Examples of time of delivery clauses for invitations for bids are set forth below. They may be modified or

other clauses may be used to state particular delivery requirements or any special procedures to be used in the evaluation, rejection or award process as regards time of delivery. These clauses also may be suitably modified for use in negotiated procurements where appropriate.

(b) The following clause may be used where delivery by a particular time is necessary to meet the Government's requirements:

TIME OF DELIVERY

Delivery is REQUIRED to be made in accordance with the following schedule: Item No. Quantity Time [*]

Bids offering delivery of each quantity within the applicable delivery period specifiled above will be evaluated equally as regards time of delivery. Bids offering delivery of a quantity under such terms or conditions that delivery will not clearly fall within the applicable delivery period specified above will be considered nonresponsive and will be rejected. Where a bidder offers an earlier delivery schedule than that called for above, the Government reserves the right to award either in accordance with the REQUIRED schedule or in accordance with the schedule offered by the bidder. If the bidder offers no other delivery schedule, the delivery schedule stated above shall apply.

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In the interest of maintaining a minimum priorities and allocations system as a mobilization preparedness measure, it is national policy to require contractors to use rating and allotment authority to support military procurement, to the extent required by the Business and Defense Services Administration.

(a) DOD Priorities and Allocations Manual. Department of Defense implementation of all rules and regulations published by the Business and Defense Services Administration, with respect to which the Department of Defense is delegated administrative responsibility, will be published in the Priorities and Allocations Manual promulgated by Department of Defense Instruction 4410.1. Authorized deviations to the priorities and allocations rules and regulations will likewise be published in the Manual.

(b) Operating responsibility. In accordance with § 1.403 (a), the Departments shall comply with the priorities and allocations program, including the Defense Materials System, as set forth in the Priorities and Allocations Manual and in the rules and regulations published by the Business and Defense Services Administration.

[25 F.R. 14084, Dec. 31, 1960]

§ 1.307-2 Required use of priorities, allocations, and allotments clause.

The contract clause set forth in § 7.104-18 of this chapter shall be inserted in or attached to all rateable contracts, except that no such clause need be attached to purchase orders of less than $500 which are not rated. Rateable contracts are those contracts for supplies which are required to be supported with rating and allotment authority (see Priorities and Allocations Manual, section 2-1).

[26 F.R. 2599, Mar. 28, 1961]

§ 1.308 Records of contract actions.

(a) Each contract file shall contain documentation of actions taken with respect to the contract, including final disposition, sufficient to constitute a full history of the transaction, to permit ready reconstruction of all of the stages of the transaction to (1) support actions taken by various personnel in the procurement cycle, (2) provide information

for reviews conducted by the Department concerned, the Department of Defense, the General Accounting Office, or others, (3) supply data for use in preparing replies to Congressional inquiries, and (4) furnish essential facts in the event of litigation. To the extent that retained copies of documents do not represent all actions taken, suitable memoranda or summary statements of undocumented actions should be prepared promptly and be retained in the contract file in chronological order.

(b) Each contract file shall include the following data, if applicable:

(1) a copy of the procurement directives or request, or appropriate reference thereto;

(2) On negotiated procurement, the original or a copy of the Determination and Findings and any request for authority to negotiate;

(3) The list of sources solicited or justification for limiting such sources and a list of any firms or persons whose requests for copies of the solicitation were denied, together with the reasons for denial;

(4) Any small business or labor surplus set-aside determinations

§§ 1.706 and 1.804);

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(5) A copy of the Invitation for Bids or the Request for Proposals, including the drawings and specifications or an identifiable reference thereto;

(6) The Security Requirements Check List (DD Form 254) (see § 16.811 of this chapter);

(7) One copy of each signed bid or proposal received, together with an abstract of bids or proposals received (With respect to formally advertised procurements, unsuccessful bids may be removed and destroyed either after one year from date of award of the contract or after final payment has been made, whichever occurs later. However, in no event will such bids be destroyed prior to final resolution of any protest or complaint submitted by an unsuccessful bidder. Furthermore, when the contracting officer determines that technical data contained in an unsuccessful bid are of sufficient value to the Government or could be reasonably considered of value to the Government in the future, such bid shall be retained.);

(8) The bidders' Statements of Contingent Fees (see § 16.802 of this chapter);

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(10) Selection of the successful contractor, including:

(i) The reasons for selection,

(ii) The contracting officer's determination of the contractor's responsibility (see § 1.904-1);

(iii) Any Small Business Administration Certificate of Competency (see § 1.705-4);

(11) All price and cost data submitted or used, including Certificates of Current Cost or Pricing Data (see §§ 2.102-1(b), 3.807-3, and 3.807-4 of this chapter);

(12) A full record of negotiations, including but not limited to: participants; dates of meetings or phone calls; Government-furnished materials or facilities provided; subcontracting; terms and conditions agreed to; deviations, if any, from prescribed contract clauses; technical recommendations; and justification for final price;

(13) Justification for type of contract used (see § 3.303 of this chapter); (14) Any exceptions or exemptions from the Buy American Act or appropriations act restrictions (see Part 6 of this chapter);

(15) A copy of contract or award; (16) Required approvals of award; (17) A copy of Individual Procurement Action Report (DD Form 350);

(18) A copy of Statement and Certificate of Award (SF 1036) (see § 16.801 of this chapter);

(19) All pertinent correspondence;

(20) Copies of all change orders, and supplements, with supporting documents;

(21) Comprehensive termination data; (22) Copies of royalty reports received (see § 16.806 of this chapter);

(23) Final release upon completion of the contract; and

(24) Information appropriate for renegotiation purposes (see § 1.319); and (25) any additional documents reflecting actions peculiar to a specific activity or service.

(c) Complete record of all negotiated contract actions, including unsuccessful proposals, shall be preserved in the cognizant procuring activity or in the Department concerned for a period of six years following final payment on each contract.

(d) This section does not apply in the case of small purchases (see § 3.609 of this chapter).

[25 F.R. 14084, Dec. 31, 1960, as amended at 27 F.R. 3443, Apr. 11, 1962; 27 F.R. 6120, June 29, 1962; 27 F.R. 11644, Nov. 27, 1962; 28 F.R. 2093, Mar. 5, 1963; 28 F.R. 2572, Mar. 16, 1963; 28 F.R. 12576, Nov. 23, 1963; 29 F.R. 11809, Aug. 19, 1964] § 1.309

Solicitations for informational or planning purposes.

It is the general policy of the Department of Defense to solicit bids, proposals or quotations only where there is a definite intention to award a contract or purchase order. However, in some cases solicitation for informational or planning purposes may be justified. Invita

tions for bids and requests for proposals will not be used for this purpose. Requests for quotations may be issued for informational or planning purposes only with prior approval of an individual at a level higher than the contracting officer. In such cases, the request for quotation shall clearly state its purpose and, in addition, the following statement in capital letters shall be placed on the face of the request: THE GOVERNMENT DOES NOT INTEND TO AWARD A CONTRACT ON THE BASIS OF THIS REQUEST FOR QUOTATION, OR OTHERWISE PAY FOR THE INFORMATION SOLICITED. The foregoing does not prohibit the allowance, in accordance with § 15.205-3 of this chapter, of the cost of preparing such quotations.

[26 F.R. 2599, Mar. 28, 1961]

§ 1.310 Liquidated damages.

(a) This section applies to procurement by formal advertising and procurement by negotiation. Liquidated damages provisions normally will not be utilized but may be used where both: (1) The time of delivery or performance is such an important factor in the award of the contract that the Government may reasonably expect to suffer damages if the delivery or performance is delinquent, and (2) the extent or amount of such damages would be difficult or impossible of ascertainment or proof. Where a liquidated damages provision is to be used in a supply or service contract, insert the provision set forth in § 7.105-5 in accordance with the instructions thereof. Liquidated damages provisions for construction contracts are covered by the language in the Termination for Default-Damages for DelayTime Extension Clause in § 8.709.

(b) The rate of assessment of liquidated damages must be reasonable, considered in the light of procurement requirements on a case-by-case basis, since

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liquidated damages fixed without reference to probable actual damages may be held to be a penalty and therefore unenforceable.

(c) The law imposes the duty upon a party injured by another to mitigate the damages which result from such wrongful action. Therefore, where a liquidated damages provision is included in a contract and a basis for termination for default exists, appropriate action should be taken expeditiously by the Government to obtain performance by the contractor or to terminate the contract. If delivery or performance is desired after termination for default, efforts must be made to obtain either delivery or performance elsewhere within a reasonable time. For these reasons, particularly close administration over contracts containing liquidated damages provisions is imperative.

(d) Whenever any contract includes a provision for liquidated damages for delay, the Comptroller General on the recommendation of the Secretary concerned is authorized and empowered to remit the whole or any part of such damages as in his discretion may be just and equitable. Accordingly, recommendations concerning such remissions may be transmitted to the Secretary concerned in accordance with Departmental procedures.

[25 F.R. 14085, Dec. 31, 1960] § 1.311 "Buying In”.

"Buying in" refers to the practice of attempting in procurements involving price competition, to obtain a contract award by knowingly offering a price less than anticipated costs with the expectation of either (a) increasing the contract price during the period of performance through change orders or other means, or (b) receiving future "follow-on" contracts at prices high enough to recover any losses on the original "buy-in" contract. Such a practice is not favored by the Department of Defense since its longterm effects may diminish competition and it may result in poor contract performance. Where there is reason to believe that "buying in" has occurred, contracting officers shall assure that amounts thereby excluded in the development of the original contract price are not recovered in the pricing of change orders or of follow-on procurements subject to cost analysis.

[29 F.R. 9747, July 21, 1964]

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