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holding a certificate under section 401 of the Act. (49 U.S.C. 1371). (40 FR 60019, Dec. 31, 1975)

side thereof or between two places both of which are outside the United States.

(2) "U.S. flag air carrier" means one of a class of air carriers holding a certificate of public convenience and necessity issued by the Civil Aeronautics Board, approved by the President, authorizing operations between the United States and/or its territor. ies and one or more foreign countries.

(3) The term "United States" includes the fifty states, Commonwealth of Puerto Rico, possessions of the United States, and the District of Columbia.

(e) The contractor shall include the substance of this clause, including this paragraph (e), in each subcontract or purchase hereunder which may involve international

air transportation.

(40 FR 60019, Dec. 31, 1975)

8 1-1.323-2 Clause.

The contract clause prescribed by this section shall be included in (a) invitations for bids, (b) requests for proposals, and (c) contracts (including contracts resulting from unsolicited proposals) whenever it is possible that

national air transportation of personnel (and their personal effects) or property will be required in the performance of the contract. The requirements of this section do not apply to small purchases made in accordance with Subpart 1-3.6.

PREFERENCE FOR U.S. FLAG AIR CARRIERS

(a) Pub. L. 93-623 requires that all Federal agencies and Government contractors and subcontractors will use U.S. flag air carriers for international air transportation of per sonnel (and their personal effects) or property to the extent service by such carriers is available. It further provides that the Comptroller General of the United States shall disallow any expenditure from appropriated funds for international air transportation on other than a U.S. flag air carrier in the absence of satisfactory proof of the necessity therefor.

(b) The contractor agrees to utilize U.S. flag air carriers for international air transportation of personnel (and their personal effects) or property to the extent service by such carriers is available.

(c) In the event that the contractor selects a carrier other than a U.S. flag air carrier for international air transportation, he will include a certification on vouchers involving such transportation which is essentially as follows:

§ 1-1.323-3 Availability or unavailability

of certificated air carrier. Expenditures for service furnished by a noncertificated air carrier generally will be allowed only when service by a certificated air carrier or carriers is “unavailable" as indicated by the June 17, 1975, Comptroller General's memorandum (B-138942) entitled “Guidelines for Implementation of Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974." The criteria contained in the memorandum are reproduced in this section.

(a) Passenger or freight service by a certificated air carrier is considered "available" even though:

(1) Comparable or a different kind of service by a noncertificated air carrier costs less, or

(2) Service by a noncertificated air carrier can be paid for in excess foreign currency, or

(3) Service by a noncertificated air carrier is preferred by the agency or traveler needing air transportation, or

(4) Service by a noncertificated air carrier is more convenient for the agency or traveler needing air transportation.

(b) Passenger service by a certificated air carrier will be considered to be "unavailable":

(1) When the traveler, while en route, has to wait 6 hours or more to transfer to a certificated air carrier to proceed to the intended destination, or

(2) when any flight by a certificated air carrier is interrupted by a stop an

CERTIFICATION OF UNAVAILABILITY OF U.S.

FLAG AIR CARRIERS I hereby certify that transportation service for personnel (and their personal effects) or property by certificated air carrier was unavailable for the following reasons: (state reasons).

(d) The terms used in this clause have the following meanings:

(1) "International air transportation" means transportation of persons (and their personal effects) or property by air between a place in the United States and a place out

See Federal Procurement Regulations (41 CFR 1-1.323-3) or section 1-336.2 of the Armed Services Procurement Regulation, as applicable.

ticipated to be 6 hours or more for re- fest showing the underlying air carrifueling, reloading, repairs, etc., and no ers utilized with such justification cerother flight by a certificated air carri. tifications as they may have for the er is available during the 6 hour use of underlying noncertificated air period, or

carriers. Use of the prescribed certifi. (3) when by itself or in combination cation satisfies the justification rewith other certificated or noncertifi. quirement. cated air carriers (if certificated air

(40 FR 60020, Dec. 31, 1975) carriers are "unavailable") it takes 12 or more hours longer from the original 88 1-1.324-1-1.326 (Reserved) airport to the destination airport to accomplish the agency's mission than 8 1-1.327 Protection of the privacy of indiwould service by a noncertificated air viduals. carrier or carriers.

[40 FR 44502, Sept. 26, 1975) (4) When the elapsed traveltime on a scheduled flight from origin to desti

§ 1-1.327–1 General. nation airports by noncertificated air

This section implements the Privacy carrier(s) is 3 hours or less, and service

Act of 1974 (Pub. L. 93-579, December by certificated air carrier(s) would in

31, 1974; 5 U.S.C. 552a), and OMB Cirvolve twice such scheduled traveltime.

cular No. A-108, July 9, 1975. In enact(40 FR 60019, Dec. 31, 1975, as amended at ing this legislation, Congress stated 41 FR 53662, Dec. 8, 1976)

that “the right to privacy is a personal

and fundamental right protected by § 1-1.323-4 Disallowance of expenditures.

the Constitution of the United The Act and the Comptroller Gener States." The Privacy Act concerns al's memorandum provide that he will rights of a citizen or a resident alien disallow any expenditures for commer

under the Act and does not extend to cial foreign air transportation on non the rights of proprietorships in their

ificated air carriers unless there is business capacity, partnerships, busiincluded in the appropriate voucher a nesses, or corporations. justification explaining why service by

(40 FR 44502, Sept. 26, 1975) certificated air carriers was "unavailable." The justification requirement is 81-1.327-2 Definitions. satisfied by the contractor's use of the certification contained in the contract

As used herein, the following terms clause which is prescribed by § 1-1.323

have the meanings set forth below:

(a) The term "agency" means any

executive department, military depart(40 FR 60019, Dec. 31, 1975)

ment, Government corporation, Gov

ernment controlled corporation, or § 1-1.323-5 Air freight forwarders.

other establishment in the executive (a) International air freight forward branch of the Government (including ers, as defined in 14 CFR 297.1(c) and the Executive Office of the President), 297.2 (1974) that are engaged in for or any independent regulatory agency. eign air transportation (49 U.S.C. (b) The term "individual" means a 1301(21)(c) (1970)), may be used for citizen of the United States or an alien Government-financed movements of lawfully admitted for permanent resiproperty. The rule stated in § 1-1.323- dence. 3 also applies to the use of underlying (c) The term "maintain" includes air carriers by international air freight maintain, collect, use, or disseminate. forwarders engaged in such foreign air (d) The term "record” means any transportation.

item, collection, or grouping of infor(b) In order that bills submitted by mation about an individual that is international air freight forwarders maintained by an agency, including, engaged in international air transpor- but not limited to, his education, fitation may be paid upon presentation, nancial transactions, medical history, such carriers shall submit with their and criminal or employment history bills a copy of the airway bill or mani. and that contains his name, or the

identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.

(e) The term "system of records on individuals" means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.

(f) The term "operation of a system of records" means performance of any of the activities associated with main.

ting the system of records, including the collection, use, and dissemination of records.

(g) The term “the Act" means the Privacy Act of 1974 (Pub. L. 93-579, December 31, 1974). (40 FR 44502, Sept. 26, 1975)

the civil and criminal penalties for noncompliance.

(b) The paragraph in Section 3 of the Act which pertains to Government contracts states as follows:

(m) GOVERNMENT CONTRACTORS.When an agency provides by a contract for the operation by or on behalf of the agency of a system of records to accomplish an agency function, the agency shall, consistent with its authority, cause the requirements of this section (Section 3 of the Pri. vacy Act and the agency's implementing regulations) to be applied to such system. For purposes of subsection (1) of this section (the criminal sanctions set forth in 5 U.S.C. 552a(i)), any such contractor and any employee of such contractor, if such contract is agreed to on or after the effective date of this section (September 27, 1975), shall be considered to be an employee of an agency, However, the criminal penalties of the Act do not extend to contractors or their employees who design or develop systems of records pursuant to a Government contract.

(c) An agency which, within the limits of its authority, fails to require that systems of records on individuals operated on its behalf under contracts be maintained in accordance with the Act may be civilly liable to individuals injured as a consequence of any subsequent failure to maintain records in conformance with the Act. Any officer or employee of the agency may be cri. minally liable for violations of the Act. The reference in the Act to the contractor and his employees as employ. ees of the agency is intended only for the purposes of the criminal penalties of the Act and not to suggest that, by virtue of this language, they are employees for any other purposes. (40 FR 44503, Sept. 26, 1975)

§ 1-1.327-3 Statutory requirements.

(a) The purpose of the Act as it pertains to Government contracts is to guard the individual's right of privacy whenever an agency system of records on individuals is operated under contract and not by the agency. The indi. vidual's privacy is ensured by requiring the contractor to observe all the rules on privacy that apply to the agency which awards the contract. Except as otherwise provided by law, Federal agencies must maintain (see § 1-1.327-2(c)) any record of identifiable information on individuals in a manner that meets the following criteria. The action must be for a necessary and lawful purpose, the information must be current and accurate for its intended use, and adequate safeguards must be provided to prevent misuse of such information. Each agency that maintains a system of records on indi. viduals is required, among other things, to establish rules of conduct for persons involved in the design, development, operation, or maintenance of any system of records on individuals, or in maintaining any record. Further, each agency is required to in struct each person involved regarding the rules and requirements of Section 3 of the Act (5 U.S.C. 552a), including any rules and procedures adopted by the agency pursuant to Section 3 and

§ 1-1.327-4 Applicability.

(a) Whenever a Federal agency contracts for the design, development, operation, or maintenance of a system of records on individuals on behalf of the agency in order to accomplish an agency function, the agency must apply the requirements of the Act to the contractor and his employees working on that contract. Systems of records on individuals operated under a contract which are designed to accomplish an agency function are

deemed to be maintained by the er the design, development, or operagency and are subject to Section 3 of ation of a system of records on individthe Act.

uals to accomplish an agency function (b)(1) In order to establish the appli- will be required, and the related concability of the clause in § 1-1.327-5, it tract shall identify specifically which is necessary for the agency awarding a of those functions is to be performed contract to determine whether a pur- by the contractor. If the design, develpose of any system of records on indi opment, or operation of such a system viduals which may be involved is to ac- is required, related solicitations and complish an agency function. For the contracts shall include the notification Act to be applicable, the contract need set forth in 81-1.327-5(b) and the not have as its sole purpose the design, clause set forth in § 1-1.327-5(c). Pertidevelopment, or operation of such a nent implementing agency rules and system of records, but the contract regulations shall be made available in should specifically state whether it in: accordance with agency procedures. volves the design, development, or op All contract work statements shall speeration of a system of records. The Act cifically identify (1) the system or sysis not applicable to a system of records tems of records and (2) the work to be used by a contractor as a result of his performed by the contractor in terms management discretion. For example, of any one of the following: (1) Design, it is not applicable to systems of per (ii) development, or (iii) operation. sonnel records maintained by contrac (b) The following notification shall tors on their own behalf.

be included in every solicitation and (2) Illustrations of systems of rec resulting contract, and in every conords to which the Act applies include tract awarded without a solicitation, the following:

when the statement of work requires (i) The determinations on benefits the design, development, or operation are made by Federal agencies;

of a system of records on individuals (ii) Records are maintained for ad for an agency function: ministrative functions of a Federal agency, such as personnel and payroll;

PRIVACY Act NOTIFICATION or

This procurement action requires the con(iii) Health records are maintained tractor to do one or more of the following: by an outside contractor engaged to design, develop, or operate a system of recprovide health services to agency per

ords on individuals to accomplish an agency

function in accordance with the Privacy Act sonnel.

of 1974, Public Law 93-579, December 31, (3) Illustrations of systems of rec.

1974 (5 U.S.C. 552a) and applicable agency ords to which the Act does not apply regulations. Violation of the Act may ininclude the following:

volve the imposition of criminal penalties. (i) Records are maintained by the

(c) The following clause shall be incontractor on individuals whom the

cluded in every solicitation and resultcontractor employs in the process of providing goods and services to the

ing contract, and in every contract

awarded without a solicitation, when Federal Government; or

the statement of work requires the (ii) An agency contracts with a State

design, development, or operation of a or private educational organization to

system of records on individuals to acprovide training, and the records gen

complish an agency function. erated on contract students pursuant to their attendance (admission forms,

PRIVACY ACT grade reports) are similar to those maintained on other students and are

(a) The contractor agrees:

(1) To comply with the Privacy Act of commingled with their records on

1974 and the rules and regulations issued other students.

pursuant to the Act in the design, develop(40 FR 44503. Sept. 26, 1975)

ment, or operation of any system of records

on individuals in order to accomplish an § 1-1.327-5 Procedures.

agency function when the contract specifi

cally identifies (i) the system or systems of (a) All procurement requirements records and (ii) the work to be performed by shall be reviewed to determine wheth the contractor in terms of any one or combi

30-103 0–79—4

nation of the following: (A) Design, (B) de velopment, or (C) operation;

(2) to include the solicitation notification contained in this contract in every solicita. tion and resulting subcontract and in every subcontract awarded without a solicitation when the statement of work in the proposed subcontract requires the design, develop ment, or operation of a system of records on individuals to accomplish an agency function; and

(3) to include this clause, including this paragraph (3), in all subcontracts awarded pursuant to this contract which require the design, development, or operation of such a system of records.

(b) In the event of violations of the Act, a civil action may be brought against the agency involved where the violation concerns the design, development, or operation of a system of records on individuals to accomplish an agency function, and criminal penalties may be imposed upon the officers or employees of the agency where the violation concerns the operation of a system of records on individuals to accomplish an agency function. For purposes of the Act when the contract is for the operation of a system of records on individuals to accomplish an agency function, the contractor and any employee of the contractor is consid. ered to be an employee of the agency.

(c) The terms used in this clause have the following meanings:

(1) "Operation of a system of records” means performance of any of the activities associated with maintaining the system of records including the collection, use, and dissemination of records.

(2) "Record" means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and crimi. nal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph.

(3) "System of records" on individuals means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. (40 FR 44503, Sept. 26, 1975)

1-1.339-1 Authority.

(a) The Energy Policy and Conservation Act (42 U.S.C. 6361(a)(1)) provides as follows: "The President shall, to the extent of his authority under other law, establish or coordinate Federal agency actions to develop mandatory standards with respect to energy conservation and energy efficiency to govern the procurement policies and decisions of the Federal Government and all Federal agencies, and shall take such steps as are necessary to cause such standards to be implemented.”

(b) The authority of the President under the act was delegated by the President to the Administrator of the Office of Federal Procurement Policy in Executive Order 11912. The Administrator issued Policy Letter No. 76-1, which requested agencies "*•• to ensure that the principles of energy conservation and efficiency are applied in the procurement of property and service whenever the application of such principles would be meaning. ful and practicable and consistent with agency program and operational needs." It also provided for implementation of the policy in the Federal Procurement Regulations. (43 FR 14315, Apr. 5, 1978) § 1-1.339-2 Procedures.

(a) Energy conservation and energy efficiency criteria shall be applied in the determination of requirements and source selection decisions whenever the application of such criteria would be meaningful, practical, and consistent with agency programs and operational needs. Under this policy, energy conservation and efficiency criteria shall be considered for application along with price and other relevant factors in the preparation of solicitations, the evaluation of offers, and the selectio and the selection of bids and proposals for award.

(b) When procuring consumer prod. ucts, executive agencies shall take into consideration energy use and efficiency labels and prescribed energy efficiency standards as they become avail. able. (43 FR 14315, Apr. 5, 1978)

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