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(f) The term "manufacture” means to manufacture, produce, assemble, or import. (43 FR 14315, Apr. 5, 1978)

Subpart 1-1.4-Procurement Responsibility and Authority

SOURCE: Subpart 1-1.4 appears at 32 FR 16492, Dec. 1, 1967, unless otherwise noted.

§ 1-1.400 Scope of subpart.

This subpart deals with the procurement responsibility and authority of the head of the procuring activity and contracting officer as defined in 88 11.206 and 1-1.207, and with the selection and designation of contracting of. ficers.

§ 1-1.339-3 Definitions.

(a) The term "consumer product”. means any article (other than an automobile, as defined in section 501(1) of the Motor Vehicle Information and Cost Savings Act) of a type

(1) Which in operation consumes, or is designed to consume, energy; and

(2) Which, to any significant extent, is distributed in commerce for personal use or consumption by individuals; without regard to whether such article of such type is in fact distributed in commerce for personal use or consumption by an individual.

(b) The term "covered product" means a consumer product of one of the following types:

(1) Refrigerators and refrigerator freezers.

(2) Freezers.
(3) Dishwashers.
(4) Clothes dryers.
(5) Water heaters.
(6) Room air-conditioners.

(7) Home heating equipment, not including furnaces.

(8) Television sets.
(9) Kitchen ranges and ovens.
(10) Clothes washers.
(11) Humidifiers and dehumidifiers.
(12) Central air-conditioners.
(13) Furnaces.

(14) Any other type of product which the Secretary of Energy classifies as a covered product pursuant to 42 U.S.C. 6292(b).

(c) The term "energy use and efficiency label” means a label required to be provided by manufacturer of a covered product pursuant to 42 U.S.C. 6296.

(d) The term "manufacturer" means any person who manufactures a consumer product.

(e) The term "energy efficiency standard" means a performance standard

(1) Which prescribes a minimum level of energy efficiency for a covered product, determined in accordance with test procedures prescribed under 42 U.S.C. 6293; and

(2) Which includes any other requirements which the Secretary of Energy may prescribe under 42 U.S.C. 6295(c).

§ 1-1.401 Responsibility of the head of the

procuring activity. The head of the procuring activity is responsible for the procurement of personal property and nonpersonal services (including construction) to the full extent that responsibility has been assigned uo his activity.

§ 1-1.402 Authority of contracting offi.

cers. Contracting officers are authorized to enter into and administer contracts for personal property and nonpersonal services (including construction) on behalf of the Government and make related findings and determinations within the limitations of the authority delegated to them. In the exercise of such authority, they are subject to the requirements in § 1-1.403 and any further requirements, consistent with the Federal Procurement Regulations, imposed by the contracting agency.

81-1.403 Requirements to be met before

entering into contracts. No contract shall be entered into unless all applicable requirements of law, Executive orders and regulations have been met. The term “regulations" includes those issued by any regulatory agency whether or not incorporated or referenced in the Federal Procurement Regulations.

a contracting officer (e.g. stipulation of a specified term or a specific purpose), the designation shall remain effective until the contracting officer is reassigned, his employment is terminated, or his designation is revoked. No revocation shall operate retroactively.

8 1-1.404 Selection, designation, and ter

mination of designation of contracting

officers. Contracting officers shall be selected, designated as such, and their designations terminated as provided in agency procedures. Such agency procedures shall conform to the provisions of this § 1-1.404. § 1-1.404-1 Selection.

In selecting individuals to serve as contracting officers or in positions which include authority to act as contracting officers, consideration shall be given to experience, training, education, business acumen, judgment, character, reputation, and ethics. In considering experience, training, and education, the following shall be evaluated:

(a) Experience in the field of procurement involved (e.g., supply, construction, etc.) gained in a Government or non-Government procurement office, or otherwise;

(b) Formal education or special training, including Government conducted or sponsored courses, in pertinent fields, such as business administration, law, accounting, engineering, architecture, or related fields; and

(c) Knowledge of applicable laws, Executive orders, and regulations.

81-1.404-4 Assignment of duties to con

tracting officers. In the assignment of duties, includ. ing execution and administration of contracts, consideration shall be given to the ability, training, and experience of the contracting officer. Duties involving contracts of large dollar value and complexity shall be given only to personnel with commensurate experience, training, and ability.

§ 1-1.405 Ratification of unauthorized

contract awards. Execution of otherwise proper contracts made by individuals without contracting authority, or by contracting officers in excess of the limits of their delegated authority, may be later ratified. To be effective, such ratification must be in the form of a written document clearly stating that ratification of a previously unauthorized act is intended and must be signed by a person authorized to ratify such acts. Generally such ratification may be made only by an official on whose behalf the contract was made and then only (a) if he could have given authority to enter into the contract before it was awarded and (b) if he still has power to do so at the time of ratification.

§ 1-1.404-2 Designation.

Designation of individuals to act as contracting officers may be accomplished by delegation of authority to individuals or to positions. In the latter case, unless otherwise provided by the agency, any individual author ized to serve in such a position is a contracting officer. In either case, however, the instrument of designation shall include, or make specific ref. erence to, any limitations on the scope of authority to be exercised, other than those contained in applicable laws, regulations, or directives. Appropriate records shall be maintained, whether designation be made by name or by reference to organizational title or position designation.

$ 1-1.406 Cost Accounting Standards.

The contracting officer or his authorized representative shall:

(a) Determine the adequacy of prime Contractor's Disclosure Statement(s)Cost Accounting Practices and Certification (see § 1-3.1203(a));

(b) Determine whether prime contractor's Disclosure Statements are in compliance with Part 1-15 and Cost Accounting Standards promulgated by the Cost Accounting Standards Board (see § 1-3.1220);

(c) Determine contractor compliance with Cost Accounting Standards and

§ 1-1.404-3 Termination of designation.

Unless otherwise provided in the instrument designating an individual as

Disclosure Statements, if applicable; 81-1.503 Covenant.
(d) Negotiate price adjustments and

Executive agencies shall include in execute supplemental agreements pur

every negotiated or advertised con

tract a "covenant against contingent suant to the Cost Accounting Stand

fees" substantially as follows (set ards clause set forth in § 1-3.1204.

forth as clause 11 of Standard Form (39 FR 43058, Dec. 10, 1974)

19, Invitation, Bid, and Award (Con

struction, Alteration or Repair); as Subpart 1-1.5—Contingent Fees

clause 17 of Standard Form 23-A, General Provisions (Construction Con

tract); and as clause 20 of Standard § 1-1.500 Scope of subpart.

Form 32, General Provisions (Supply This subpart prescribes the use by Contract)): executive agencies of the "covenant against contingent fees" and sets forth COVENANT AGAINST CONTINGENT FEES the policies, forms, methods, proce The Contractor warrants that no person dure, principles, and standards related or selling agency has been employed or rethereto. The requirements of this sub tained to solicit or secure this contract upon part have as their objective the pre an agreement or understanding for a comvention of improper influence in con

mission, percentage, brokerage, or contin.

gent fee, excepting bona fide employees or nection with the obtaining of Govern

bona fide established commercial or selling ment contracts, the elimination of ar

agencies maintained by the Contractor for rangements which encourage the pay the purpose of securing business. For ment of inequitable and exorbitant breach or violation of this warranty the fees bearing no reasonable relation Government shall have the right to annul ship to the services actually per.

this contract without liability or in its dis

cretion to deduct from the contract price or formed, and the prevention of unwar

consideration, or otherwise recover, the full ranted expenditure of public funds

amount of such commission, percentage, which inevitably results therefrom.

brokerage, or contingent fee. The methods used to achieve these objectives are the requirement for disclo

(31 FR 5880, Apr. 16, 1966) sure of the details of arrangements

1-1.504 General principles and standards under which agents represent con

applicable to the covenant. cerns in obtaining Government contracts, and the prohibiting, by use of § 1-1.504-1 Use of principles and standthe covenant against contingent fees,

ards. of certain types of contractor-agent ar

The principles and standards set rangements.

forth in this subpart are intended to § 1-1.501 Applicability.

be used as a guide in the negotiation,

awarding, administration, and enforceThe provisions of this subpart apply

ment of Government contracts. to all contracts for the procurement of personal property and nonpersonal $ 1-1.504-2 Contingent character of the services, including the procurement of fee. construction. The Criminal Code will

Any fee whether called commission, apply in any case involving actual

percentage, brokerage, or contingent criminal conduct.

fee, or otherwise denominated, is

within the purview of the covenant if, § 1-1.502 Improper influence.

in fact, any portion thereof is dependThe term "improper influence" ent upon success in obtaining or securmeans influence, direct or indirect, ing the Government contract or conwhich induces or tends to induce con tracts involved. The fact, however, sideration or action by any employee that a fee of a contingent nature is inor officer of the United States with re- volved does not preclude a relationspect to any Government contract on ship which qualifies under the excepany basis other than the merits of the tions to the prohibition of the covmatter.


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$ 1-1.504-3 Exceptions to the prohibition. (b) In determining whether an

agency is a “bona fide established There are excepted from the prohi

commercial or selling agency mainbition of the covenant "bona fide em ployees" and "bona fide established

tained by the contractor for the pur

pose of securing business," the factors commercial or selling agencies maintained by the contractor for the pur

set forth below shall be considered.

They are necessarily incapable of pose of securing business."

exact measurement or precise defini. § 1-1.504-4 Bona fide employee.

tion and it is neither possible nor de

sirable to prescribe the relative weight (a) The term “bona fide employee,”

to be given any single factor as against for the purpose of the exception to

any other factor or as against all other the prohibition of the covenant,

factors. The conclusions to be reached means an individual (including a cor

in a given case will necessarily depend porate officer) employed by a concern

upon a careful evaluation of the agreein good faith to devote his full time to

ment and other attendant facts and such concern and no other concern

circumstances. and over whom the concern has the

(1) The fees charged should not be right to exercise supervision and control as to time, place, and manner of

inequitable and exhorbitant in relaperformance of work. It is recognized

tion to the services actually rendered. that a concern, especially a small busi

That is, the compensation should be

commensurate with the nature and ness concern, may employ an individual who represents other concerns. The

extent of the services and should not factors set forth in § 1-1.504-5(b),

be excessive as compared with the fees except (4) thereof, shall be applied to

customarily allowed in the trade condetermine whether such an individual

cerned for similar services related to comes within the exception to the pro

commercial (non-Government) busihibition of the covenant.

ness. In evaluating reasonableness of (b) The hiring must contemplate

the fee, there should be considered some continuity and it may not be re

services of the agent other than actual lated only to the obtaining of one or

solicitation, as for example, technical, more specific Government contracts.

consultant or managerial services, and (c) An employee is not "bona fide"

assistance in the procurement of eswho seeks to obtain any Government

sential personnel, facilities, equip. contract or contracts for his employer

ment, materials, or subcontractors for through the use of improper influence

performance of the contract. or who holds himself out as being able (2) The selling agency should have to obtain any Government contract or adequate knowledge of the products contracts through improper influence. and the business of the concern repre

(d) A person may be a bona fide em sented, as well as other qualifications ployee whether his compensation is on necessary to sell the products or serv. a fixed salary basis or, when custom- ices on their merits. ary in the trade, on a percentage, com (3) There should ordinarily be a conmission or other contingent basis, or a tinuity of relationship between the combination of the foregoing.

contractor and the agency. The fact

that the agency has represented the 8 1-1.504-5 Bona fide established commer contractor over a considerable period

cial or selling agency maintained by of time is a factor for favorable considthe contractor for the purpose of se- eration. It is not intended, however, to curing business.

disqualify newly established contrac(a) An agency or agent is not "bona tor-agent relationships where a confide" which seeks to obtain any Gov tinuing relationship is contemplated ernment contract or contracts for its by the parties. principals through the use of improp (4) It should appear that the agency er influence or which holds itself out is an established concern. The agency as being able to obtain any Govern- may be either one which has been in ment contract or contracts through business for a considerable period of improper influence.

time or a new agency which is a pres

ently going concern and which is ten representation and agreement se. likely to continue in business as a com- cured) by requiring the bidder (or conmercial or selling agency in the future. tractor) to check the appropriate box The business of the agency should be in the following statement (which apconducted in the agency name and pears on Standard Form 21, Bid Form characterized by the customary indicia (Construction Contract), Standard of the conduct of a regular business. Form 30, Invitation and Bid (Supply (5) The fact that a selling agency Contract), and

Contract), and Standard Form 33, Inconfines its selling activities to the vitation, Bid and Award (Supply Confield of Government contracts does tract)) to be included in the invitation not, in and of itself, disqualify it under or bid form: the covenant. The fact, however, that

The bidder represents: (a) That he has, the selling agency is employed to

has not, employed or retained any compasecure business generally, that is, to ny or person (other than a full-time bona represent the concern in connection fide employee working solely for the bidder) with sales to the Government as well to solicit or secure this contract, and (b) as regular commercial sales to non that he has, o has not, paid or agreed to Government activities is a factor enti

pay any company or person (other than a

full-time bona fide employee working solely tled to favorable consideration in eval

for the bidder) any fee, commission, per. uating the case as one coming within

centage or brokerage fee, contingent upon the authorized exception. Arrange- or resulting from the award of this contract; ments confined, however, to obtaining and agrees to furnish information relating Government contracts, particularly to (a) and (b) above as requested by the those involving a selling agency orga

Contracting Officer. (Note: For interpretanized immediately prior to or during

tion of the representation, including the

term “bona fide employee," see Code of Fedperiods of expanded procurement re

eral Regulations, Title 41, Chapter I, Subsulting from conditions of national

part 1-1.5.) emergency, must be closely scruti. nized.

§ 1-1.506 Interpretation of the representa

tion. § 1-1.504-6 Fees for “information."

(a) For the purpose of the represenContingent fees paid for "informa- tation and agreement required from tion" leading to obtaining a Govern the prospective contractor, as dement contract or contracts are includ. scribed in § 1-1.505, the definition of ed in the prohibition and, accordingly, "bona fide employee" is as specified in are in breach of the covenant unless 81-1.504-4. the agent qualifies under the excep (b) The fact that the prospective tion as a bona fide employee or a bona

contractor retains a person who does fide established commercial or selling not devote his full time solely to the agency maintained by the contractor

prospective contractor does not necesfor the purpose of securing business.

sarily mean that the relationship in

volved is in violation of the covenant § 1-1.505 Representation and agreement

against contingent fees or that there is required from prospective contractors.

any stigma attached to the contractorExcept as provided in § 1-1.507-3, agent relationship. It does mean, howeach executive agency shall inquire of ever, that the prospective contractor and secure a written representation must fill out the representation in the from prospective contractors as to affirmative and, as required, furnish whether they have employed or re- information with respect to such emtained any company or person (other ployment of retention. than a full-time employee working (c) If the representation would othsolely for the prospective contractor) erwise be answered in the affirmative, to solicit or secure the contract, and the fact that the person employed or shall secure a written agreement to retained by the bidder or contractor is furnish information relating thereto an attorney, or a public relations conas required by the contracting officer. sultant, or has any other special or Where an invitation for bids is issued, professional title, does not permit this inquiry shall be made (and writ- answer in the negative.

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