$9-50.302 Subcontracting policies and procedures.

$9-50.302-1 General.

Procurement activities of operating and other onsite contractors are governed by contract provisions. Federal Procurement Regulations generally are not directly applicable. There are, however, requirements of certain Federal laws, executive orders, and regulations, including Federal Procurement Regulations, which pertain to procurements by these contractors. These requirements, together with implementing ERDA procurement Regulations which apply to contractor procurement, are identified in this section.

$9-50.302-2 Responsibility of contracting officers.

Contracting officers are responsible for assuring that procurement by operating and other onsite contractors conforms to contract requirements and provides effective and timely support to agency programs. In carrying out this responsibility, contracting officers: (1) assure that contracts include those provisions required by law or regulations, and such other provisions as are appropriate to implement ERDA policies and requirements; (2) review contractor procurement systems (including policies) as required by Part 9-23 and in accordance with the provisions of their contracts; (3) review individual procurement actions of certain types or above stated dollar levels; and (4) make periodic appraisals of the contractor's management of the procurement function in accordance with criteria established by the senior procurement official, Headquarters.

$9-50.302-3 Policies.

The following policies apply to contractor procurement. Within these policies it is expected that procurement systems and methods will vary according to the types and kinds of procurement to be made, the needs of the particular programs, and the experience, methods, and practices of the particular contractor.

(a) Procurement systems and methods used for ERDA contract work should be well defined, consistently applied, and follow good business practices appropriate for the requirement and amount of procurement involved.

(b) Procurement should be effected in the manner most advantageous to the Government--price, quality, and other factors considered. In order to assure this objective and the award of business on an impartial basis, procurement (from other than Government sources) shall be effected by methods calculated to assure such full and free competition as is consistent with securing the required supplies and

services.

Generally, procurement actions are carried out through one

of the following methods:

(1) Competitive offers or quotations and award. The competitive offer or quotation and award method of procurement, which normally assures the greatest degree of full and free competition, generally involves the following basic steps and objectives:

(i) Preparation of a solicitation document setting forth contract terms and conditions and describing the requirement clearly, accurately, and completely, avoiding unnecessarily restrictive specifications or requirements.

(ii) Publicizing such solicitations by distribution to a reasonable number of prospective offerors and by such other means as may be appropriate, in sufficient time to permit the preparation and submission of offers before the time set for receipt of offers. This time shall be uniform for all.

(iii) Handling solicitations in a manner which provides fair and equal treatment to all prospective contractors.

(iv) Making an award to the prospective contractor whose offer, in response to the solicitation, will be most advantageous to the Government, price and other factors considered. However, if upon evaluation it is determined to be in the best interests of the Government to enter into negotiations with prospective contractors before award, such negotations should be conducted in accordance with (2) below with respect to according fair and equal treatment to prospective contractors.

(2) Negotiation. Procurement by this method normally should be conducted by competitive negotiations through the solicitation and evaluation of proposals, from an adequate number of qualified sources to assure effective competition, consistent with securing the required supplies or services. Negotiated procurement involves advance planning, description of procurement and delivery requirements, and consideration of the effect these requirements may have on prices and competition. Requests for proposals should describe the property or services required as completely as possible; allow sufficient time for the submission of proposals; and establish a closing date for receipt of proposals. Proposals should be handled in a manner which provides fair and equal treatment to all prospective offerors. Selection of offerors for negotiation and award shall be consistent with FPR 1-3.805 and ERDA-PR §9-3.805.

(c) Price or cost analyses shall be performed in accordance with the requirements of FPR 1-3.807 and ERDA-PR §9-3.807, and FPR 1-3.809

and 9-3.809. Profits and fees objectives shall be consistent with guidance in §9-3.808.

(d) Supplies and services normally should be procured through the use of specifications, standards, or purchase descriptions which clearly and accurately describe the supplies or services to be procured. If such specifications, standards, or purchase decriptions are not available and it is impractical and uneconomical to prepare them, "brand name or equal" descriptions may be used, provided the particular physical functions, or other characteristics of the brand name item which are deemed essential are clearly identified and described.

(e) A fair proportion of supplies and services shall be procured from small business and minority concerns.

(f) The need for access authorizations to classified information shall not be a limiting factor in obtaining competition except where time will not permit securing additional access authorizations.

(g) Awards shall be made only to responsible prospective contractors. Awards shall not be made to firms or individuals on the ERDA List of Disqualified Bidders and Ineligible Contractors, unless it is determined that is in the best interests of the Government to do So. Such determination shall be forwarded to the senior procurement official, Headquarters for concurrence prior to issuance of the contract.

(h)

Selection of the type of contract to be used should be based on consideration of the nature of the supplies and services required and other circumstances surrounding the procurement. The cost-pluspercentage-of-cost system of contracting shall not be used in any

event.

(i) Small purchases (purchases not in excess of $10,000) should be made by methods designed to (1) obtain fair and reasonable prices, (2) reduce administrative costs of making such purchases to the minimum required to establish the propriety of placing the order at the price paid with the supplier concerned, and (3) improve opportunities for small and minority business concerns within the local trade area to obtain a fair proportion of purchases.

(j) (1) First-tier subcontracts and purchase orders for supplies and services for ERDA work normally should include provisions for resolving disputes to the same extent and in the same manner as in similar ERDA direct contracts.

(2) The disputes provision may be applied to lower-tier subcontracts and purchase orders provided all subcontracts and purchase orders of a higher tier are cost-type.

(3) A Disputes clause which can be used to carry out this policy is set forth in ERDA-PR 9-50.703-2.

$9-50.302-4 Procurement from contractor-controlled sources.

(a) When an operating or other onsite service contractor maintains a separate procurement function for performance of work in ERDA facilities on ERDA sites, procurement from contractor-controlled sources (any division, subsidiary, or affiliate of the contractor under a common control) may be treated in the same manner as procurement from other sources provided the procurement is made:

(1) under the same terms and conditions as would apply if the purchase were from a third party;

(2) in accordance with policies and procedures particularly designed to permit fair and open competition which have been approved by the contracting officer; and

(3) in a manner which results in legally enforceable terms and conditions.

When any of the conditions above cannot be met, procurements involving contractor-controlled sources should be made directly by, or with the prior approval of, ERDA.

(b) Subcontracts for performance of contract work itself (as distinguished from procurement of supplies and services needed in connection with the performance of work) require ERDA authorization which may involve an adjustment of the contractor's fixed- fee. If the contractor seeks authorization to have some part of the contract work performed by a contractor-controlled source, and the contractor's performance of that work was a factor in the negotiated fixed-fee, ERDA approval would normally require (1) that the contractorcontrolled source perform such work on a basis without profit or (2) an equitable downward adjustment to the contractor's (i.e., the contracting component's) fixed-fee.

(a) Heads of procuring activities shall require contractors to obtain the approval of the contracting officer before entering into any subcontracts or purchase orders within the following categories:

(1) Specified contract types. Approval shall be required before entering into cost-type, and time and materials, and labor-hour type subcontracts in excess of $500.

(2) Specified dollar amounts. Approval shall be required prior to entering into subcontracts or purchase orders above specified dollar amounts. Dollar limits will be established at the discretion of heads of procuring activities, taking into consideration such factors as the nature of work under each contract, the estimated cost of work under the contract, the contractor's procurement organization, other controls exercised over the contractor's procurement operations, and policies with respect to approvals established by Headquarters or field offices. Except as provided in paragraph 5(a) and 5(b) of this section, subcontracts or purchase orders in excess of the following amounts shall require prior ERDA approval:

shall be required for the subcontracting of any work a contractor is obligated to perform under a contract entered into under section 41 of the Atomic Energy Act of 1954, as amended.

Heads of

(4) Specified materials, equipment, or services. procuring activities shall take such action as may be required to insure compliance with the procedure for purchases from contractorcontrolled sources or the procurement of specific items, or classes of items which by the terms of the contract may require ERDA approval.

(5) Exceptions. (a) In the event (1) application of any of the dollar amount limitations established in subparagraph (2) would impair the ERDA program of the field office or would be impracticable under the circumstances, or (2) such higher levels would be in the Government's best interest, the head of a procuring activity may, upon making such determination, approve a dollar amount up to $100,000. Requests to establish dollar levels in excess of $100,000 shall be submitted to the senior procurement official, Headquarters, for approval.

(b) When a review has been made of the contractor's procurement system in accordance with Subpart 9-23 and the contractor's procurement system has been approved, the Head of the Procuring Activity (HPA) may raise the dollar limitations in paragraph (1) and (2) above as follows:

(i) if the review was performed by ERDA the limitations may be raised to the amount of the HPA's delegated authority, provided concurrence has been obtained required in section 9-23.107(a)

as

and