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tor by telephone or letter do not require contractor acceptance by signature on the Standard Form 30.

(C) To otherwise modify the purchase order, and if not previously included in the purchase order, the changes clause in § 1-7.102-2 shall be incorporated in the Standard Form 30 (Amendment of Solicitation/Modification of Contract), and the contractor acceptance obtained by his signature on the Standard Form 30. Subsequent changes pursuant to the Changes clause shall not require contractor acceptance. However, other modifications outside the scope of the changes clause, such as the addition of the Government Property Clause, shall require contractor acceptance by signature on the Standard Form 30.

(iv) Termination of purchase orders. A purchase order which has not been accepted in writing or by delivery by the prospective contractor may be withdrawn or canceled by the contracting officer any time prior to acceptance. Notice of withdrawal or cancellation shall be in writing and shall request the prospective contractor's acknowledgement thereof. If the contractor has accepted the purchase order in writing or on a subsequently issued Standard Form 30, and it later becomes necessary to terminate the purchase order, the contractor should be asked to agree to cancellation of the order without cost or liability to either party. If he agrees, the cancellation shall be effected by use of Standard Form 30, as a No-Cost settlement in accordance with § 1-8.209-4, signed by the contracting officer and the contractor. If the contractor does not agree to a no-cost settlement of a purchase order which has been accepted, termination of a purchase order will be processed in accordance with the Termination for Convenience clause and Part 1-8 of Title 41.

(11) Debriefings and notification of unsuccessful quoters.

(i) Debriefings shall be provided in accordance with § 3-3.103-50 to unsuccessful quoters upon their request.

(ii) The notification of unsuccessful offerors in § 3-3.103-50(b)(2) is not applicable to procurements of $10,000 or less.

(12) Protests. There is nothing which prevents a quoter or an interested party from protesting against the placement or manner of handling a small purchase. Protests against small purchases shall be processed in accordance with § 3-2.407-8.

(c) Close out. Purchasing offices shall initiate the close out of small purchase files upon determination by the office accumulating the file that the order is complete. An order is completed when (1) the contractor has completed the required deliveries or supplies and the Government has inspected and accepted such supplies, (2) the contractor has performed all services and the Government has accepted such services, or (3) notice of termination has been given to the contractor by the Government or the parties mutually agree to a no cost cancellation. Rental, use, and storage agreements shall be considered to be complete when a notice of termination has been issued or the period has expired.

(d) Reports of small purchases. [Reserved]

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§ 3-3.604-3 Agency responsibilities.

(a) Requests to establish imprest funds shall be made to the responsible fiscal office.

(b) At larger activities where the agency cashier may not be conveniently located near the purchasing office, a Class C Cashier may be installed in the purchasing office.

(c) Documentation of cash purchases shall be in accordance with instructions contained in the HHS Voucher Audit Manual Part 1, Chapter 1-10.

(d) The amount of each imprest fund shall be established on the basis of the estimated monthly payment and the need for replenishment. A review shall be made by the responsible official at least quarterly to insure that the fund is not in excess of needs, and appropriate adjustments made accordingly.

[40 FR 29718, July 15, 1975]

§ 3-3.605 Purchase order forms.

§ 3-3.605-1 Standard Form 44, Purchase Order-Invoice-Voucher.

(a)-(c) [Reserved]

(d) Instructions for use. The responsible procurement office will instruct the user as to limitations and procedures for use of SF-44 as outlined in 1-3.605-1.

(e) Agency implementation. Since SF-44 is an accountable form, a record shall be maintained of serial numbers of forms, to whom issued and date issued. SF-44's shall be kept under adequate lock and key to prevent unauthorized use. A reservation of funds shall be established to cover total anticipated expenditures prior to use of SF-44.

[40 FR 29718, July 15, 1975]

§ 3-3.605-2 Standard Forms 147 and 148, Order for Supplies or Services.

(a) General. SF-147 and SF-148 are mandatory for use in the Department as the standard purchase order forms for small purchases not in excess of $2,500.

(1) [Reserved]

(2) SF-147 and 148 are mandatory for use in the Department as the standard purchase order forms for small purchases not in excess of $10,000.

(b) Terms and conditions. (1)-(2) [Reserved]

(3) The following terms and conditions shall be added or otherwise incorporated by reference whenever Standard Forms 18 and 147 are used for small purchases in excess of $2,500:

(i) Examination of records by Comptroller General. § 1-7.103-3.

(ii) Listing of employment openings. § 1-12.1102-2.

(iii) Employment of the handicapped. § 1-12.1304.

(iv) Termination for convenience of the government. § 1-8.705.

(4) The following terms and conditions shall be added or incorporated by reference whenever required by the Federal Procurement Regulations:

(i) Utilization of small business concerns. § 1-1.710-3(a). (All actions which may exceed $5,000.)

(ii) Utilization of labor surplus area concerns. § 1-1.805-3(a). (All actions which may exceed $5,000.)

(iii) Utilization of minority business enterprises. § 1-1.1310-2(a). (All actions which may exceed $5,000.)

(iv) U.S. products and services (Balance of Payments Program). § 1-6.8064. (All actions subject to the Balance of Payments program in excess of $2,500.)

(v) Contract work hours and Safety Standards Act. § 1-12.303. (All actions in excess of $2,500 which are not subject to the Service Contract Act of 1965.)

(vi) Service Contract Act of 1965. § 112.904-1. (Service contracts in excess of $2,500.) For services contracts not exceeding $2,500 use the clause in § 112.904-2.

(5) The following are the Certification requirements applicable to small purchases when the SF-147 is used.

(i) The Certification of independent price determination. § 1-1.317 is not applicable to small purchases.

(ii) The Buy American Certificate. (§ 1-6.104-3).

(iii) Labor Surplus Area Representation should be obtained when a labor surplus area set-aside has been made and for use in deciding between equal priced quotations.

[35 FR 9004, June 11, 1970, as amended at 40 FR 29718, July 15, 1975]

§ 3-3.606 Blanket purchase arrangements. § 3-3.606-4 Documentation.

(a) Each blanket purchase arrangement (BPA) shall be documented by issuance of a contractual instrument appropriately numbered. Each BPA shall contain the following provisions:

(1) Authorization to the supplier to furnish the supplies or services described in general terms, when ordered by authorized personnel listed therein.

(2) A statement that individual orders will not exceed $5,000 per call.

(3) A statement that the Government will be obligated only to the extent of the calls placed against the BPA by authorized personnel.

(4) A stipulation that the supplier's established discounts will apply to calls placed against the BPA.

(5) A requirement that all shipments be accompanied by delivery tickets containing the name of the supplier, BPA number, call number, date of call, name of individual placing the call, an itemized list of supplies or services furnished including unit price and extension of each item, applicable discount, date of delivery and the signature of the Government employee receiving the item or service.

(6) A requirement that the supplier shall submit an itemized invoice at least once each month or upon expiration of the BPA, whichever occurs first, covering all deliveries made during the billing period for which payment has not been received.

(7) Each BPA shall cite 41 U.S.C. 252(c)(3) as authority for negotiation. [41 FR 22354, June 3, 1976]

§ 3-3.606-5 Agency implementation.

(a) The procurement office shall review the blanket purchase arrangement files at least annually to assure that authorized procedures are being followed. In addition, the procurement office shall review and update as required each blanket purchase arrangement at least annually.

(b) Delivery tickets signed by the Government employee receiving the item or service will be forwarded to the fiscal office or other paying office as designated by the operating agency. Payment will be made on the basis of the delivery tickets and properly itemized invoice. Procurement activities will ensure that established procedures allowing for availability of funds are in effect prior to placement of orders.

(c)(1) Competition under BPAs will be obtained in accordance with HHSPR 3-3.603-1(a) and (b): When concurrent agreements are in effect for similar items, orders not in excess of $250 shall be equitably distributed. Where there is an insufficient number of BPAs for any given class of supplies or services to assure adequate competition on orders in excess of $250, the individual placing the order shall solicit quotations from other sources.

(2) Individual orders shall be recorded in simple form as determined by the operating agency. Orders will be numbered in sequence in a separate

series for each BPA and will consist of the BPA number followed by the serial number of the order.

(d) [Reserved]

(e) Delivery tickets signed by the Government employee receiving the item or service will be forwarded to the fiscal office or other paying office as designated by the operating agency. Payment will be made on the basis of the signed delivery tickets and properly itemized invoice. Procurement activities will ensure that established procedures allowing for availability of funds are in effect prior to placement of orders.

(f) [Reserved]

(g)(1) Competition under BPA's will be obtained in accordance with § 33.603-50(a)(1) and (b)(3). When concurrent agreements are in effect for similar items, orders not in excess of $500 shall be equitably distributed. Where there is an insufficient number of BPA's for any given class of supplies or services to assure adequate competition on orders in excess of $500, the individual placing the order shall solicit quotations from other sources in addition to the BPA

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of the significance of any reduction in cost or price to the Government offered by a late proposal. In order to determine if a late proposal offers a significant technical advantage to the Government, the contracting officer will first obtain a written statement from the individual responsible for the technical evaluation of proposals. The statement must clearly demonstrate that it is advantageous to the Government to consider the late proposal. It must also state what the proposal's significant advantages are and why they are important to the Government. This statement must be approved at a level equal to that of Division Director of the Program Office. The contracting officer will make the determination whether or not to consider the late proposal based on the data set forth in the statement from the individual responsible for the technical evaluation of proposals.

(g) Determination of the competitive range shall be made in accordance with 3-3.5107. Debriefings of unsuccessful offerors shall be made in accordance with § 3-3.103-50.

[43 FR 54250, Nov. 21, 1978]

3-3.807-2 Requirements for cost or price analysis.

(a)-(d) [Reserved]

(e) No negotiated contract may be awarded by any contracting officer unless the contract file contains documentation showing that the contract price was determined to be fair and reasonable. This determination shall be made utilizing the procedures set forth in § 1-3.807 of this title.

(f) Prior to cost/price negotiations with each offeror, the Government's cost/price objectives shall be established and documented in the contract file.

(g) When price analysis is performed, the procedures set forth in § 1-3.807-2 of this title shall be used as the basis for establishment of negotiation objectives or the basis for the determination that the price(s) is fair and reasonable.

(h) When cost analysis is required to be performed in accordance with § 13.807-2(c) of this title, the evaluation shall reflect the use made of audit reports and reviews by technical person

nel to determine the reasonableness of cost elements; e.g.,

(1) Need for the categories of labor proposed;

(2) Reasonableness of labor hours proposed;

(3) Need for and reasonableness of other source data, e.g., computer time, number and destination of trips, materials and subcontracts;

(4) Whether the labor rates used are:

(i) Current or projected rates,

(ii) Average rates for the institution as a whole, or for a particular division or the particular department which will perform the work, or

(iii) Specific individual rates for the personnel who will perform the work;

(5) Basis for the use of the indirect cost rates and the appropriateness of the base(s) to which they are applied, and

(6) Appropriate review of other costs.

[45 FR 64911, Oct. 1, 1980]

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(d) When cost or pricing data is required to be obtained and the offeror stands a reasonable chance of receiving the award, the contracting officer shall determine or cause to be determined that the data is complete. Instructional material pertaining to the adequacy and completeness of cost or pricing data may be found in the Armed Services Procurement Regulation Manual for Contract Pricing (ASPM No. 1) (see § 1-3.807-2(d) and § 1-3.807-3(d)(4) of this title). If certain data necessary for a cost analysis is not included in the cost proposal, it shall be obtained from the offeror prior to conducting the cost analysis. After it is determined that the submission is complete, the contracting officer shall cause a cost analysis of the proposal to be conducted.

[45 FR 64912, Oct. 1, 1980]

§ 3-3.809 Contract audit as a pricing aid. (a)-(c) [Reserved]

(d) The contracting officer or his/ her representative shall determine the need for an audit of the contract price proposal by the cognizant audit agency. This determination shall be made in accordance with the requirements of § 1-3.809 of this title and shall consider whether information already available is adequate for the proposed procurement or whether such data can be obtained by phone from the cognizant audit

agency.

Whenever it is clear that either of these conditions exist, the contracting officer may waive the audit and document the contract file to reflect the reasons for the waiver and how the proposed price was determined to be reasonable.

(e) If it is determined that an audit is required, two (2) copies of the request, including a copy of the complete contract price proposal, shall be submitted, in accordance with established agency procedures, to the OIG Audit Agency's Regional Audit Director. The request shall:

(1) Contain the complete address of the location of the offeror's financial records that support the proposal;

(2) Identify any areas requiring special audit attention or effort and identify areas for which data is already available;

(3) Identify the office having audit responsibility if other than an HHS Regional Audit Office; and

(4) Specify a due date for receipt of a verbal report to be followed by a written audit report. (If the time available is not adequate to permit satisfactory coverage of the proposal, the auditor shall so advise the contracting officer and indicate the additional time needed (see § 1-3.809(b)(2) of this title). Normally, the Audit Agency will need 30 days after receipt of the proposal for submission of oral results. However, the Audit Agency's ability to conduct reviews by the due date will be influenced by the POC's ability to properly plan its procurements. If the Audit Agency requires additional time to conduct the review, the contracting officer has the option, at the time the auditor acknowledges receipt of the request, to accept the revised due date

or cancel the request and use cost advisory services within the agency to satisfy the requirement. In such cases, the contracting officer shall immediately advise OIG/AA/Regional Audit Director and the OIG/AA/Division of Audit Coordination (OIG/AA/DAC)

of the revised due date or cancellation of the request.

(f) One copy of the audit request letter that was submitted to the Regional Audit Director and a complete copy of the contract price proposal shall be submitted to OIG/AA/DAC.

(g) Whenever an audit review has been conducted by the Audit Agency, two (2) copies of the memorandum of negotiation shall be forwarded to OIG/AA/DAC by the contracting officer (see § 1-3.811(b) of this title).

[45 FR 64912, Oct. 1, 1980]

Subpart 3-3.51-Selection of Offerors for Negotiation and Award

SOURCE: 38 FR 2212, Jan. 23, 1973, unless otherwise noted.

§ 3-3.5100 Scope of subpart.

This section provides guidance to all DHHS personnel regarding (a) evaluation of the technical and other aspects of proposals and (b) the requirement for "written or oral discussion" with concerns whose proposals are "within a competitive range," under competitive negotiated procurements.

§ 3-3.5101 Applicability.

This section is applicable to all competitive negotiated procurements conducted by DHHS under the authority of the Federal Procurement Regulations (FPR). Those portions of this section concerning written or oral discussions need not be applied: (a) To procurements in implementation of authorized set-aside programs; (b) to procurements where the existence of adequate competition or accurate prior cost experience with the item being procured clearly demonstrates that acceptance of an initial proposal without discussions would result in fair and reasonable prices, provided the request for proposals notifies all offerors of the possibility that award may be made without discussion and

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