(d) FFN will contact by letter (with copy to the contracting officer) the agency concerned with the nonpayment of invoice(s). The contracting officer shall promptly notify the contractor upon receipt of the agency's response to FFN's inquiry. If notification is not received from FFN within 10 calendar days after transmittal of the letter to FFN, the contracting officer shall contact them to determine its status.

§ 5A-73.506 Requests for waivers. See § 5A-1.305-70.

§ 5A-73.507 Contracts with renewal provisions.

The Renewal of Contracts clause in § 5A-73.217-9 shall be exercised unless the data collected in accordance with § 5A-73.507-1 clearly indicates that the renewal of the contract is not in the best interest of the Government. A justification not to renew shall be made in writing and be approved by the procuring director.

§ 5A-73.507-1 Factors to be considered prior to renewal.

The following factors shall be considered in making the determination to renew current schedule contracts or issue a solicitation for new contracts:

(a) New or additional clauses which must be incorporated in a renewal contract;

(b) Market trends reported in trade journals; and

(c) Price structure, i.e., price reductions made by contractor or potential competitors during the current contract period; prices which remained unchanged during the current contract period but which possess a potential for reduction because of improved production methods or for other reason; or price increases where for the same reasons, they should have remained unchanged or even to be reduced. Other issues which must be considered and evaluated with regard to price structure are:

(1) The data obtained from the contractor in connection with established catalog or market prices of commercial items sold in substantial quantities to the general public (see § 5A-3.8073(d)), as implemented by the "Basis

for Price Negotiation" clause in § 5A73.217-3;

(2) Savings to the contractor generated by his not having to print and distribute new catalogs and pricelists if the current contract were renewed;

(3) Reduction of taxes and duties which were included in current sale prices;

(4) Increases in profits, published in financial or trade papers;

(5) The most recent prices paid for similar items, or, in connection with definite quantity purchases, for the same items;

(6) By an informal investigation of prices or other examination of the market, especially whether better prices than those cited in the current contract would be obtainable;

(7) Changes in the cost of raw materials for or components of the prod ucts under the current contract;

(8) Changes in minimum wage rates established by the Secretary of Labor and, to the extent known, in wage rates otherwise changed pursuant to an agreement between the contractor and his employees;

(9) Changes in the contractor's distribution pattern;

(10) Actual value of purchases made by the Government during the current contract period compared with the estimated value when the current contract was entered into;

(11) Volume of sales (particularly of new items) which contractor has made to the public during the current contract period compared with the anticipated volume when the contract was entered into;

(12) Production licenses granted by the contractor to others and contractor's expired patent rights;

(13) Whether established prices are readily ascertainable and clearly indicate that the issuance of new solicitation would serve no useful purpose; and

(14) Changes in freight rates authorized by the ICC or other regulatory agencies which may affect the deliv ered price of items where freight is a factor.

§ 5A-73.507-2

Notice of intent to renew.

When it is determined to renew the contract the contractor shall be furnished a written notice of intent to renew containing the following elements:

(a) All revisions of or additions to the contract provisions;

(b) Confirmation of any changes in contract prices applicable to the renewed contract;

(c) A request for pricing, sales or other data in accordance with paragraph (e) of the Renewal of Contracts clause; and,

(d) Instructions on the extent to which new catalogs or pricelists are to be furnished for the renewal period, subject to possible changes as a result of any subsequent negotiations.

to

§ 5A-73.507-3 Notice of intent not renew a New Item Introductory Schedule (NIIS) contract.

Notices of intent not to renew contracts awarded under the NIIS shall be given to the contractor by letter not less than 30 calendar days prior to expiration of the contract. Contractors should also be advised of the reasons for the Government's decision not to renew. A copy of the notice not to renew shall be forwarded to the Director, Business Services Centers Staff (FI), and to the Regional Director of Business Affairs of the region in which the NIIS application (GSA Form 1171) originated. These copies shall be annotated in the upper right hand corner with the regional control number under which the application was submitted, e.g., R1-76-1.

§ 5A-73.507-4 Processing of contracts being renewed.

(a) In requesting approval of award of a contract, GSA Form 1535, "Request for approval of Awards", shall be used in the same manner as in the case of a new contract. (See § 5A1.375.) Completion of the price analysis portion of that form shall be given particular attention. The contract number for the renewed contract shall remain the same as the contract being renewed.

(b) Agencies shall be notified of renewal periods and of any other contract modifications by issuance of cu

mulative Federal Supply Schedules or amendments. Cumulative schedules and amendments shall be given the same distribution as the original schedule.

§ 5A-73.508 Processing of requirements in excess, or below, Maximum Order Limitations (MOL).

(a) Requirements in excess of a schedule's MOL. Requirements in excess of a schedule's MOL shall be procured by the procuring activity which awarded the schedule contract, with the exception of those requirements identified in paragraph (a) (1) and (2), of this section. When forwarding a requisition for excess requirements which will require procurement by negotiation, the forwarding regional activity shall ensure that the requisition is accompanied by the agency justification statement in accordance with FPMR 101-26.105.

(1) Exigency requirements. These requirements may be procured by the servicing region (after coordination with the nationally assigned contracting officer) in order to preclude delays incident to the referral of such requirements.

(2) Requirements from the Agency for International Development (AID). These requirements shall be forwarded to the Special Programs Division (FPZ) for procurement.

(b) Requirements below an MOL. Agency requirements for schedule items in quantities less than the MOL shall not be processed by an FSS procuring activity except when:

(1) The requiring activity is a mandatory user and does not have authority or trained personnel or facilities necessary to issue purchase or delivery orders.

(2) The requiring activity submits a requisition for purchase which combines schedule items and stock items or other program items in such a manner that:

(i) Extracting and returning a listing of schedule items to the requisitioning activity for their purchase action would not be justifiable because of the time and expense involved, or

(ii) The delay caused by returning a requisition would cause serious supply difficulties.

(3) Special purchasing programs authorize placing of schedule orders for another agency.

§ 5A-73.509 Administration of Price Reductions clause.

The procuring activity issuing the schedule is responsible for establishing controls to ensure submittal by the contractor of the certification statement required by the Price Reductions clause prescribed in § 5A-73.217-5.

§ 5A-73.510 Suspected violations of mandatory use provisions.

(a) Suspected violations of the mandatory use provision in Federal Supply Service contracts may be based on a review of planned procurements published in the Commerce Business Daily and of open market procurements by other agencies. This review is the responsibility of the Market Research and Marketing Division (FFM). FFM shall contact the office suspected of violating the mandatory use provisions to determine whether the items involved are mandatory schedule items or similar items. FFM shall also determine if the separate procurement is made (1) subsequent to the issuance of a waiver; (2) because agency requirements exceed the maximum order limitation; (3) because it involves an urgent requirement; or (4) because it is a small requirement excluded by § 101-26.401-4(b).

(b) Suspected violations may come to the attention of the contracting officer from various sources, particularly from contractors where an agency has purchased a contract item from some other source. In these instances, con

tracting officers shall provide the related information to FFM for appropriate action with agencies as stated in paragraph (d) of this section.

(c) To provide FFM with the information needed in communicating with the customer agency, the contracting officer shall furnish a copy of the authorizations granted agencies to procure over the MOL (contract maximum order limitation). Contracting officers who return Military Interdepartmental Purchase Requests (MIPR) for local procurement shall record information on an informal letter identifying the requisition involved, the item, and the dollars. A copy of this letter shall be sent to FFM.

(d) If a violation of the mandatory use provisions is believed to be present, FFM shall proceed as follows:

(1) Where an item to be procured is identical to a mandatory use schedule item, the agency shall be requested to cancel the solicitation and order from the existing Federal Supply Schedule.

(2) Where an item to be procured is similar to a mandatory schedule item. the agency shall be requested to either cancel the solicitation and use the existing Federal Supply Schedule, or stop action on the procurement and submit a request for waiver in accordance with § 101-26.401-3.

(3) Where a procurement is in excess of the maximum order limitation, and the contracting officer has not formally authorized the agency to procure on its own, the agency shall be requested to submit its requirements to GSA in accordance with the instructions in article 3 of GSA Form 2891, Instructions to Users of Federal Supply Schedules. [43 FR 23580, May 31, 1978]