ties, and handled in the following

manner:

(1) Requests for deviation from Federal Specifications may be initiated by the contracting officer of any procuring activity of the Department or Postal Field Service and submitted as far in advance as the exigencies of the situation will permit. Each request shall:

(i) Cite the specific Federal Specification from which a deviation is requested; (ii) Contain a clear statement of the deviation desired;

(iii) State the reasons the deviation is considered necessary or would be in the best interest of the Government;

(iv) Contain a statement as to whether the deviation has been requested previously, and, if so, circumstances of the previous request;

(v) Provide any pertinent background information which will contribute to a full understanding of the desired deviation;

(vi) Furnish comments and recommendations as to whether the Federal Specification should be changed or amended consistent with the deviation requested.

(2) Requests should be routed through the head of the procuring activity for concurrence or additional comments. After the indicated concurrence has been obtained, requests shall be submitted to the Director, Procurement Division, Bureau of Facilities.

(b) If a requested deviation is warranted, approval will be accomplished as follows:

(1) The Chief, Inventory and Distribution Branch, Procurement Division, will request required technical assistance and advice from the Office of Research and Engineering.

(2) The Office of Research and Engineering will:

(i) Recommend if deviation is necessary and justifiable, based on service requirements, research and technical information developed;

(ii) Prepare formal justification to support recommendation for deviation that can be fully substantiated if post audit is required. It shall include positive reasons why Federal Specification does not meet requirements.

(iii) Forward written justification to the Chief, Inventory and Distribution Branch, Procurement Division, Bureau of Facilities, for submission to the Director, Procurement Division

(c) Notification to the General Services Administration of approved deviations will be made by the final approving official.

(d) The requesting officer will be notified by memorandum, with copies to other interested Bureaus or Offices, whenever a requested deviation is approved or disapproved. The contract file of the requesting office shall include a copy of the request and approval.

(e) Deviations taken and reported in accordance with these regulations may not be continued except as outlined in 41 CFR 1-1.305-3(c).

[30 F.R. 5793, Apr. 24, 1965]

§ 39-1.306-1__ Mandatory use and application of Federal Standards.

Section 39-1.305–3, PODPR, relating to Federal Specifications, has equal application to the use of Federal Standards. Exceptions to the use of Federal Standards shall be processed and approved in the same manner as exceptions to Federal Specifications.

[30 F.R. 5794, Apr. 24, 1965]

§ 39–1.315 Use of liquidated damages provisions in procurement contracts. [33 F.R. 4185, Mar. 6, 1968]

§ 39-1.315-1 General.

This 39-1.315 prescribes (a) policy which shall govern Post Office Department contracting officers in the use of liquidated damages provisions in contracts for supplies and services entered into by formal advertising or by negotiation, (b) a schedule, to be used as a guide in computing liquidated damages, and (c) provisions which shall be inserted in contracts for supplies and services when liquidated damages are stipulated. [33 F.R. 4185, Mar. 6, 1968]

§ 39-1.315-2 Policy.

(a) Liquidated damages provisions normally will not be utilized but may be used only (1) when the circumstances are such that the Government may suffer substantial financial loss or disruption to the mail service because of delay, (2) the necessity for delivery or performance as stated in the contract schedule is so imperative that a probable increase in contract cost is justified, and (3) the extent or amount of such damage would be difficult or impossible of ascertainment or proof. The amount of liquidated damages shall always be expressed on a per calendar day basis.

(b) Liquidated damages provisions shall not be used as insurance against selection of a nonresponsible bidder, as a substitute for efficient contract administration, nor as a penalty for failure to deliver or perform on time. Since damages suffered by delay in delivery or performance may be mitigated by timely exercise of termination for default, the maximum liquidated damages shall not exceed the rate per calendar day multiplied by 180.

(c) The following schedule of liquidated damages shall be used in procurements of fixed mechanization systems alterations and modifications to fixed mechanization systems, and may be used as a guide in other supplies and services contracts, provided the conditions described in paragraph (a) of this section obtain: The daily rates shown represent anticipated costs for contract administration and supervision, and for interest on the Government's investment. In unusual instances, rates other than those shown may be substituted with prior approval of the Director, Procurement Division.

"Liquidated Damages

"Article 11(f) of Standard Form 32, General Provisions (Supply Contract), is redesignated as Article 11(g) and the following is inserted as Article 11(f):

“(f) (1) In the event the Government exercises its right of termination as provided in paragraph (a) above, the Contractor shall be liable to the Government for excess costs as provided in paragraph (b) above and, in addition, for liquidated damages, in the amount set forth elsewhere in this contract, as fixed, agreed, and liquidated damages for each calendar day of delay, until such time as the Government may reasonably obtain delivery or performance of similar supplies or services; except that the amount of liquidated damages shall not exceed the cumulative amount specified in the 'Rate of Liquidated Damages' clause.

"(ii) If the contract is not so terminated, notwithstanding delay as provided in paragraph (a) above, the Contractor shall continue performance and be liable to the Gov. ernment for such liquidated damages for each calendar day of delay until the supplies are delivered or services performed; except that the amount of liquidated damages shall not exceed the cumulative amount specified in the 'Rate of Liquidated Damages' clause. "(iii) The Contractor shall not be liable for liquidated damages for delays due to causes which would relieve him from liability for excess costs as provided in paragraph (c) of this clause."

"Rate of Liquidated Damages

"In the case of failure on the part of the Contractor to complete delivery or performance within the time fixed in the contract or any extension thereof, the Contractor shall pay to the Government as liquidated damages, pursuant to Article 11, of Standard Form 32, General Provisions (Supply Contract), the sum of for each

calendar day of delay, except that the cumulative amount of such damages shall not exceed

§ 39-10.103-1 Policy on use.

(a) Normally, bid guarantees shall not be required; however, a bid guarantee may be required when all of the following obtain:

(1) The estimated cost of the procurement exceeds $5 million.

(2) The solicitation specifies that both a performance bond and a payment bond is required.

(b) Bid guarantees shall not be inIcluded in solicitations for supplies and services (including solicitations for fixed mechanization, and alterations and modifications to fixed mechanization) without prior approval of the Director, Procurement Division.

§ 39-10.103-2 Amount required.

See Post Office Department regulations in § 39-10.103-3(b).

§ 39-10.103-3 Invitation for bids pro

visions.

(a) When a bid guarantee provision has been approved pursuant to § 3910.103-1(b), insert in Standard Form 36 "Continuation Sheet" the clause set forth in FPR 1-10.103-3 (a) (2).

(b) Unless unusual circumstances prevail, the bid guarantee shall be in the amount of 20 percent of the total bid price (except that such guarantee shall not exceed $3 million).

§ 39-10.104 Performance bonds.

§ 39-10.104-1 Supplies and services

contracts.

(a) Performance bonds shall not be required in supplies and services contracts, except as provided in paragraphs (b) and (c) of this section. Performance bonds shall not be used as protection against selection of a nonresponsible contractor.

(b) Performance bonds may be required when the product or service is not scheduled for first delivery until at least 12 months after contract award and

(a) Payment bonds for procurements other than construction may be required only if a performance bond is also required.

(b) Payment bonds shall be required for the installation portion only of contracts involving fixed mechanization systems or the alteration and modification of fixed mechanization systems. Standard Form 25A "Payment Bond" shall be used for this purpose and the following clause inserted in Standard Form 36, "Continuation Sheet":

PAYMENT BOND

The successful bidder shall be required to furnish a payment bond applicable to the on-site installation portion only within 10 days after award of the contract. Bidder shall insert in the space below that percent of his total bid price that is applicable to on-site installation only.

(Insert percent here) If the price for the on-site installation portion of the contract is:

(1) Not more than $1 million, the penal amount shall be 50 percent of such amount.

(2) More than $1 million but not more than $5 million, the penal amount shall be 40 percent of such amount.

(3) More than $5 million, the penal amount shall be $2,500,000.