than anticipated costs with the expectation of either (a) increasing the contract price during the period of performance through change orders or other means, or (b) receiving future "follow-on" contracts at prices high enough to recover any losses on the original "buy-in" contract. Such a practice is not favored since its long term effects may diminish competition and it may result in poor contract performance. Where there is reason to believe that "buying in" has occurred, contracting officers shall assure that amounts thereby excluded in the development of the original contract price are not recovered in the pricing of change orders or in follow-on procurements subject to cost analysis. § 18-1.312

Voluntary refunds.

(a) General. A voluntary refund is a payment or credit, not required by any contractual or other legal obligation, made to the Government by a contractor or subcontractor either as a payment or as an adjustment under one or more contracts or subcontracts. It may be unsolicited or it may be made in response to a request by the Government. Where it is desired to solicit a voluntary refund from a subcontractor, the prime contractor should be encouraged to facilitate the making of such refund. In deciding whether to solicit a voluntary refund or to accept an unsolicited refund, the contracting officer shall ask legal counsel to review the contract or contracts and all data relevant thereto to determine whether the Government's rights would be jeopardized or impaired by the contracting officer's proposed action.

(b) Solicited refunds. Voluntary refunds may be requested during or after contract performance. They shall be requested only when it is considered that the Government was overcharged under a contract or was inadequately compensated for the use of Government-owned property or in the disposition of contractor inventory, and retention by the contractor or subcontractor of the amount in question would be contrary to good conscience and equity. Generally, retention by the contractor or subcontractor shall not be considered contrary to good conscience and equity, and thus a voluntary refunds shall not be requested, unless the overcharge or inadequate compensation was due, at least in part, to the fault of the contractor or subcontractor. The decision to solicit a

voluntary refund shall be made by the Deputy Administrator or his designee after coordination with the Director of

Procurement.

(c) Disposition of voluntary refunds. (1) If a refund is offered prior to final payment, it is preferable that the contract price be appropriately modified to reflect the refund. In such a case, the amount of the refund shall be credited to the applicable appropriation cited in the contract.

(2) In cases where the refund is to be made by check rather than by an adjustment in the contract price, the check shall be made payable to the National Aeronautics and Space Administration and shall be forwarded immediately to the Financial Management Office of the appropriate installation. When forwarded, the check shall be accompanied by a letter identifying it as a voluntary refund, giving the number of the contract or contracts involved and, where possible, giving the account number of the appropriation to which the refund should be credited.

§ 18-1.314 Disputes and appeals.

(a) When a dispute cannot be settled by agreement and a decision under the "Disputes" clause is necessary, the contracting officer shall review the available facts pertinent to the dispute before making his final decision. When there is any doubt as to whether the issue in dispute is subject to the disputes procedure, a decision will be made pursuant to the "Disputes" clause. The disputes procedure shall not be invoked in cases when a dispute is clearly not subject to the procedure. The contracting officer shall obtain, from assigned legal and other advisors, such advice and assistance as is required to render a decision. The decision must be that of the contracting officer (or his representative if such representative has been authorized by the contracting officer to make final decisions pursuant to the "Disputes" clause); however, prior to making the decision, the contracting officer (or representative authorized to render final decisions) may consult with any other Government personnel involved in the dispute.

(b) The final decision should include a statement of facts sufficient to enable the contractor to understand both the decision and the basis therefor. Normally, the decision should (1) recite the contractor's claim or otherwise describe

the nature of the dispute, with necessary references to pertinent contract provisions; (2) state the facts relevant to the dispute on which the parties are in agreement and, as clearly as possible, the facts on which they are in disagreement; and (3) set forth the contracting officer's decision and the basis therefor.

(c) When a final decision of the contracting officer involves a dispute that is subject to the procedure of a "Disputes" clause, or when there is doubt as to whether the decision is subject to such procedure, a paragraph substantially as follows shall be included in such decision:

This is the final decision of the Contracting Officer on the question involved in this dispute. Decisions on disputed questions of fact and on other questions that are subject to the procedure of the Disputes clause may be appealed in accordance with the provisions of the Disputes clause. If you decide to make such an appeal from this decision, written notice thereof (in triplicate) must be mailed or otherwise furnished to the Contracting Officer within 30 days from the date you receive this decision. Such notice should indicate that an appeal is intended and should reference this decision and identify the contract by number. The NASA Board of Contract Appeals is the authorized representative of the Administrator for hearing and determining such disputes. The Rules of the NASA Board of Contract Appeals are set forth in Appendix A to the NASA Procurement Regulation (34 F.R. 3613-3616, Feb. 28, 1969).

(d) After an appeal has been filed, a controversy may be disposed of by agreement. However, processing of the appeal shall not be suspended by such efforts except upon order, or as otherwise authorized, by the NASA Board of Contract Appeals.

(e) In the event of an appeal, any amount determined to be payable in the decision of the contracting officer, less any portion previously paid, normally should be paid promptly following the contracting officer's decision, without prejudice to the rights of either party in the event of a subsequent appeal. § 18-1.315

ings.

Procurement of jewel bear

(a) It has been determined that the Government's interests require the continued maintenance of an active and versatile mobilization base for the production of jewel bearings. This base has been established at the Governmentowned William Langer Jewel Bearing Plant, Rolla, N. Dak. In support of this

policy, Government purchases of jewel bearings shall be made from that plant in all cases where it can meet purchase requirements. Additionally, all procurements of items containing jewel bearings shall provide, in the solicitations and resulting contracts, a requirement that jewel bearings in the quantities, and of the types and sizes necessary for the end items to be supplied under the contract, be purchased from the William Langer Jewel Bearing Plant and be incorporated in the delivered items, subject to the criteria provided in paragraphs (b), (c), and (d) of this section, except:

(1) When quantity requirements, quality standards, or delivery requirements cannot be satisfied by bearings manufactured at the William Langer Jewel Bearing Plant;

(2) For purchases of commercial end items having jeweled components used in commercial end items, when the quantities of such end items or components are such that the contracting officer either knows or reasonably expects that all such commercial end items are already manufactured and available from the stock of any dealer, wholesaler, distributor, or manufacturer; or

(3) For bearings used in items that are to be procured and used outside the United States, its possessions, and Puerto Rico.

(b) In order to assure that all bidders or offerors are competing on the same basis, it is necessary that the solicitation for items containing jewel bearings clearly state:

(1) The successful contractor will be required to purchase (directly or through subcontractors, as appropriate) William Langer Jewel Bearing Plant bearings at prices established in the U.S. Government Jewel Bearing Price List then in effect, and to incorporate such bearings in the items to be delivered; and

(2) Bids or proposals are to be predicated on this requirement.

If it should occur, after award, that the William Langer Jewel Bearing Plant rejects the contractor's (or subcontractor's) purchase order entirely or in part, the contractor (or subcontractor) shall be required to so notify the contracting officer who will effect an equitable adjustment in the contract price to reflect any costs or savings accruing to contractor by reason of any price differential for such bearings, pursuant to the clause of this contract entitled "Changes."

(c) To the extent William Langer Jewel Bearing Plant bearings are fungible with other bearings and it is not practical or would be costly to segregate jewel bearing inventories or work in process for items to be furnished the Government from that to be furnished commercial customers, or for other similar reasons, it may be in the Government's interest to waive the use requirements at the discretion of the contracting officer. No waiver will be granted to prospective contractors prior to award and no assurance will be given prior to award to any prospective contractors that such waiver will be granted after award. Minor inconvenience to contractors alone will not satisfy the need for demonstrating that the Government's interests are served by such waiver. When the use requirement is waived, an equitable adjustment for cost savings resulting therefrom shall be made.

(d) In circumstances where a procurement is not exempt from this procedure but it would be impractical or contrary to the Government's best interest to require actual use of all of the William Langer Jewel Bearing Plant bearings required to be purchased, the contracting officer may provide in the solicitation and resulting contract that a minimum fixed percentage of the total bearings requirements be of William Langer Jewel Bearing Plant origin, or that William Langer Jewel Bearing Plant bearings be purchased for and used in a certain number of the total items to be supplied.

(e) In all procurements subject to these procedures, the following clause is required for use:

REQUIRED SOURCES FOR JEWEL BEARINGS (JULY 1968)

Jewel bearings required in the performance of this contract shall be procured from the William Langer Jewel Bearing Plant, Rolla, N. Dak, at prices established in the Official U.S. Government Jewel Bearing Price List dated (insert latest effective date). The Contractor agrees that the delivery dates specified for the quantities and types of jewel bearings so ordered will be reasonably related to manufacturing schedules and delivery requirements of this contract. The Contractor agrees to notify the Contracting Officer promptly of the rejection of his (or any subcontractor) purchase order in whole or in part by the William Langer Jewel Bearing Plant and further agrees to an equitable adjustment in the contract price pursuant to the "Changes" clause of this contract to reflect any costs or savings to the Contractor (or subcontractor) resulting from such rejection. The Contractor further agrees to incor

porate or to have his subcontractors incorporate the purchased William Langer Jewel Bearing Plant jewel bearings in the items to be delivered under this contract. The requirement for use (but not the requirement for purchase) of such bearings may be waived in the discretion of the Contracting Officer when such waiver is determined by him to be in the Government's interest, and where agreement is reached for an equitable adjustment in the contract price by reason of such waiver.

§ 18-1.316 Disclosure of contractor performance data to other government agencies and foreign governments.

(a) Subject to any applicable security requirements, NASA installations shall honor the requests of other Government agencies for readily available information relating to the performance of prime contractors. The agency requesting the information shall be advised that it will be responsible for any further release of such information.

(b) Requests from foreign governments should similarly be honored. When such information is furnished to a foreign government, a copy of the request from the foreign government and the information furnished will be forwarded to the Assistant Administrator for International Affairs, NASA Headquarters.

(c) If there is any question as to the propriety of divulging the information to other Government agencies or to any foreign government for any reason, including the security aspect, the request shall be forwarded to the Director of Procurement for consideration, with an explanation of the reasons why the release of such information is questioned. The Director of Procurement will, prior to approving the release of information, obtain the concurrence of:

(1) The General Counsel;

(2) The Assistant Administrator for International Affairs, if the request for

1 Where less than total purchase and usage of William Langer Jewel Bearing Plant bearings is to be required, substitute "The Contractor further agrees to purchase and incorporate William Langer Jewel Bearing Plant bearings in items to be delivered under this contract equivalent to at least ------ percent of the total quantity of bearings required to perform this contract." (Percentage to be inserted by Contracting Officer.) In lieu of a percentage, the clause may refer to specific quantities of items listed in the schedule for which William Langer Jewel Bearing Plant bearings must be purchased and used.

information is from a foreign government; and

(3) The Director, Security Division, NASA Headquarters, if the information appears to involve a problem of security. § 18-1.317 Lease versus purchase

criterion.

(a) There are many situations in which the Government's equipment requirements may be more economically filled by lease than by purchase. This is particularly true in the case of certain expensive commercial equipments. The decision to lease rather than purchase must be made on a case-by-case basis. Leasing should be used where it is in the Government's interest. The criteria to be considered in each case include the following:

(1) The Government requirement is of short duration, and purchase would be costlier than leasing (generally, longterm leasing should be avoided in the absence of compelling circumstances);

(2) The probability that the equipment will become obsolete and that replacement within a short period will be necessary; and

(3) The equipment is special or technical, and the lessor will provide the equipment, as well as maintenance and repair services, at a lower cost than would otherwise be available to the Government.

(b) Lease versus purchase decisions should be based on an economic analysis and the contract file documented to support the final decision (see §§ 18-3.501(b) (49) and 18-3.804-2(c) (2)).

(a) Authorization to span fiscal years. When an appropriation act so provides, contracts for maintenance and operation of facilities, and contracts for support services may be entered into for periods not in excess of 12 months beginning at any time during the fiscal year covered by such act. This authority should be used to reduce the number of contracts that would otherwise have to be placed at the beginning of the new fiscal year. However, it shall not be used to place contracts that exceed a 12-month period.

(b) Contracts conditioned upon the availability of funds. When it is necessary to initiate a procurement properly chargeable to funds of a new fiscal year prior to the availability of such funds,

the following clause shall be included in the invitation for bids or other solicitation and the resultant contract:

AVAILABILITY OF FUNDS (FEBRUARY 1967)

Funds are not presently available for this procurement. The Government's obligation hereunder is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money shall arise unless and until funds are made available to the Contracting Officer for this procurement and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(c) The authority set forth in paragraph (b) of this section shall be used only for administrative operations and continuing services (such as rentals, utilities, and items of supply) which are necessary for normal operation and for which the Congress consistently appropriates funds. When this authority is used, the supplies or services shall not be accepted by the Government until funds are available to the contracting officer for the procurement and until the contracting officer has given notice to the contractor (to be confirmed in writing) of such availability. Appropriate records will be maintained to insure adequate administrative control of funds. § 18-1.319 Renegotiation performance

competition obtained in the negotiation and award of the contract, the reasonableness of the prices, fees, and profits negotiated, any incentive and target formulae incorporated in the contract, the extent of risk assumed by the contractor, the contractor's efficiency in performance of the contract, and any other information which would facilitate compilation of the renegotiation performance reports described in § 18-1.319-3 below. This is particularly important in the case of incentive-type contracts where the question may be raised as to whether additional profits paid to the contractor by operation of the incentive provisions have been earned. Incentive-type contract information should be complete but succinct. To insure the collection of accurate and detailed information, the aforementioned data shall be included in the contract file as soon as it becomes available.

(a) Performance reports should provide complete, accurate, and objective data to the Renegotiation Board. When the Board requests contractor performance reports, the procuring installation concerned shall furnish information substantially in accordance with the checklist set forth below, including any favorable recommendations giving due credit for better than average contract performance and any unfavorable recommendations because of unsatisfactory performance. Extensive performance data shall be accumulated on incentivetype contracts in sufficient detail so that the report will clearly show, as to the basis for payment of any increments of profit or fee provided as a part of the incentive arrangement in the contract, whether such increments were earned as the result of the contractor's performance or as the result of unreliable cost estimates or unrealistic performance targets when the incentive arrangements were negotiated.

(1) Date of report;

(2) Installation making report;

(3) Source and date of request for report;

(4) Name and address of contractor (if subsidiary or division, show name of parent company);

(5) Period covered by report;

(6) List of contracts being performed during the period concerned, showing as to each:

(i) Contract number;

(ii) Date;

(iii) Total amount of contract;

(iv) Brief description of the scope of work, service, product, etc.;

(v) Method of procurement (advertised or negotiated, and extent of competition);

(vi) Type of contract;

(vii) Total billings during period; and (viii) Principal place of performance. (7) Brief description of manufacturing techniques and type of work normally performed by contractor (e.g., production, fabrication, assembly) and relative complexity of the work. State the percentage of work subcontracted;

(8) Information concerning contractor performance, including extent to which:

(i) The product or service exceeded, met, or fell below the contract requirements;

(ii) Delivery schedules were met (indicate reasons for failures to meet schedules, and compliance with requests for early deliveries, if any);

(iii) Rejections and spoilage rates were high or low and reasons therefor; (iv) Contractor met targets under incentive contracts and reasons therefor;

(v) Contractor was economical in use of materials, facilities, and manpower, and was otherwise effective in controlling production costs;

(vi) Contractor made effective use of his facilities (state whether he expanded facilities to undertake renegotiable business, and if so, was such expansion excessive); and

(vii) Strikes, stoppages, or other significant developments in labor management affected contract performance.

(9) Information concerning reasonableness of costs and profits, including:

(1) The basis for use of a particular type of contract in significant contracts (if an incentive contract, describe also the basis for negotiation of target and cost sharing formulae);

(ii) Adequacy and reliability of cost information furnished by the contractor;

(iii) Unusual risks assumed by contractor in particular contracts, e.g., close pricing, labor and material cost increases, engineering changes, shortage of materials, inventory spoilage and obsolescence, cutbacks, terminations, and quality or performance guarantees (explain extent to which risks were reduced or minimized by types of contracts used);