1-2, and no responsive bid has been received from a responsible bidder.

(4) When bids have been solicited pursuant to the requirements of Part 1-2 and the responsive bid or bids do not cover the quantitative requirements of the invitation for bids, in which case, negotiation is permitted for the remaining requirements.

(5) When the contemplated procurement is for electric power or energy, gas (natural or manufactured), water, or other utility services or when the contemplated procurement is for construction of a part of a utility system and it would not be practicable to allow a contractor other than the utility company 'tself to work upon the system.

(6) When the contemplated procurement is for training film, motion picture productions, or manuscripts.

(7) When the contemplated procurement is for technical nonpersonal services in connection with the assembly, installation, or servicing (or the instruction of personnel therein) of equipment of a highly technical or specialized nature.

(8) When the contemplated procurement is for studies or surveys other than those which may be negotiated under the authority cited in §§ 1-3.205 or 1-3.211.

(9) When the contemplated procurement involves maintenance, repair, alteration, or inspection and the exact nature or amount of the work to be done is not known.

(10) When the contemplated procurement is for stevedoring, terminal, warehousing, or switching services, and when either the rates are established by law or regulation, or the rates are so numerous or complex that it is impracticable to set them forth in the specifications of a formal invitation for bids.

(11) When the contemplated procurement is for commercial transportation, including time, space, trip, and voyage charters, except for such transportation services as are furnished by common carriers (for which negotiation is authorized under § 1-3.215 and section 321 of the Transportation Act of 1940, 49 U.S.C. 65, and including services for the operation of Government-owned vehicles, vessels, or aircraft.

(12) When the contemplated contract is for services related to the procurement of perishable subsistence, such as protective storage, icing, processing, packaging, handling, and transportation, and it is impracticable to advertise for

such services a sufficient time in advance of the delivery of the perishable subsistence.

(13) When it is impossible to draft for an invitation for bids adequate specifications or any other adequately detailed description of the required property or services.

(14) When the contemplated procurement is for parts or components being procured as replacement parts in support of equipment specially designed by the manufacturer, where data available is not adequate to assure that the part or component will perform the same function in the equipment as the part of component it is to replace.

(15) When the contemplated procurement involves construction where a contractor or group of contractors is already at work on the site, and it would not be practicable to allow another contractor or an additional contractor to work on the same site or when the mount is too small to interest other contractors to mobilize and demobilize.

(b) Limitations. The authority cited in this § 1-3.210 shall not be used under the circumstances described in paragraphs (3) and (4) of § 1-3.210(a) where "Small Business Restricted Advertising" has been used. However, it may be used in the case of partial set-asides unless in the judgment of the contracting officer the failure to obtain sufficient responsive bids on the non-set-aside portion was caused by the existence of the set-aside. Every contract negotiated under this authority shall be supported by a determination and findings justifying use of the authority. The determination and findings shall be prepared in accordance with Subpart 1-3.3 and signed by the contracting officer.

§ 1-3.211 Experimental, developmental, or research work.

Pursuant to the authority of section 302(c) (11) of the Act (41 U.S.C. 252 (c) (11)), purchases and contracts may be negotiated without formal advertising if "the agency head determines that the purchase or contract is for experimental, developmental, or research work, or for the manufacture or furnishing of property for experimentation, development, research, or test."

(a) Application. The following are illustrative of circumstances with respect to which this authority may be used:

(1) When the contemplated contract relates to theoretical analysis, explora

tory studies, and experimentation in any field of science or technology.

(2) When the contemplated contract is for developmental work and calls for the practical application of investigative findings and theories of a scientific or technical nature.

(3) When the contemplated contract is for such quantities and kinds of equipment, supplies, parts, accessories, or patent rights thereto, and drawings or designs thereof, as are necessary for experimentation, development, research, or

test.

(4) When the contemplated contract is for services, tests, and reports necessary or incidental to experimental, developmental, or research work.

(b) Limitations. This authority shall not be used for contracts for quantity production, except that such quantities may be purchased under this authority as are necessary to permit complete and adequate experimentation, development, research, or test; accordingly, research or development contracts which call for the production of a reasonable number of experimental or test models, or prototypes, shall not be regarded as contracts for quantity production. In order for this authority to be used, a determination and findings justifying use of the authority must be prepared in accordance with Subpart 1-3.3.

(c) [Reserved]

[29 F.R. 10155, July 24, 1964, as amended at 31 F.R. 1150, Jan. 28, 1966]

§ 1-3.212 Purchases not to be publicly disclosed.

Pursuant to the authority of section 302(c) (12) of the Act (41 U.S.C. 252(c) (12)), purchases and contracts may be negotiated without formal advertising if "for property or services as to which the agency head determines that the character, ingredients, or components thereof are such that the purchase or contract should not be publicly disclosed."

(a) Application. This authority may be used for purchases or contracts classified "Confidential" or higher, or where, because of other considerations, the contract should not be publicly disclosed.

(b) Limitations. In order for this authority to be used, a determination and findings justifying use of the authority must be prepared in accordance with Subpart 1-3.3.

§ 1-3.213 Technical equipment requir ing standardization and interchangeability of parts.

(a) Authority. (1) Pursuant to the authority of section 302(c) (13) of the Act (41 U.S.C. 252(c) (13)), purchases and contracts may be negotiated without formal advertising if "for equipment which the agency head determines to be technical equipment, and as to which he determines that the procurement thereof without advertising is necessary in special situations or in particular localitles in order to assure standardization of equipment and interchangeability of parts and that such standardization and interchangeability is necessary in the public interest."

(2) This § 1-3.213 provides authority only to employ negotiation as distinguished from advertising and does not constitute authority to make purchases of equipment. Authority for the latter must be elsewhere derived.

(b) Application. (1) This authority may be used for procuring additional units and replacement items of specified makes and models of technical equipment and spare parts by negotiation in order to assure standardization of equipment and interchangeability of parts where, in special situations or in particular localities, such standardization and interchangeability is determined necessary in the public interest. Examples of situations where this authority may be used are:

(i) Where, in special situations or in particular localities, it has been found necessary to limit the variety and quantity of parts that must be carried in stock.

(ii) Where standardization of technical equipment is necessary in special situations or in particular localities so that parts may be available and interchanged among items of damaged or worn equipment.

(iii) Where, in special situations or particular localities, technical equipment is available from a number of suppliers which would have such varying performance characteristics (notwithstanding detailed specifications and rigid inspection) as would prevent standardization and interchangeability of parts. (2) Consideration shall be given to the following and other pertinent factors before making a determination to procure specified makes and models under the authority of this § 1-3.213:

(1) The practicability of interchanging parts and cannibalizing equipment.

(ii) The probability that future procurement of the selected item of equipment can be affected at reasonable prices.

(iii) Whether the standardization will appreciably reduce the variety and quantity of parts that must be carried in stock.

(iv) The value of similar equipment and its supporting parts on hand.

(v) Possible savings in training personnel.

(vi) Whether the standardization will adversely affect existing specifications and standards.

(vii) The degree to which the current design of the specified make and model has been changed from the design of equipment of the same make and model already in the supply system.

(3) Standardization approval under this authority shall be for a stated period of time which bears a reasonable relationship to the life of the equipment.

(c) Justification. (1) In arriving at a determination that standardization of equipment and interchangeability of its parts are necessary in the public interest, such standardization must be in fact fully justified as genuinely "necessary in the public interest." It is not sufficient that it merely be generally desirable. Nor is an arbitrary or perfunctory conclusion sufficient. Facts must clearly show the compelling reasons why it is necessary, as for example:

(i) Substantial savings possible through standardization (estimated annual savings to be indicated when possible).

(ii) Minimizing potential breakdown of a specifically identified service or function which might endanger life, property or the orderly conduct of vital Government functions.

(2) The term "in special situations" precludes application of the authority to generally prevailing or generalized conditions The law assumes that it will be necessary to employ the authority only under unusual or abnormal conditions.

(3) The term "particular localities" has reference to remote locations which are not only remote in the sense of physical distance from large metropolitan areas. but remote from available stocks or replacement parts and, possibly, related service facilities. For example, it is not enough to conclude that standardization is required of a motor vehicle in

20-126 0-74-10

Alaska because of remote location if in fact replacement parts of various vehicle makes are readily available. It must be shown expressly, and not by inference, (i) that the location involved is inaccessible because of stated conditions, such as the absence of a connected road system, or (ii) that there are not available within stated reasonable distances, adequate stocks of replacement parts or personnel and facilities necessary to perform required services, and that there are circumstances which make it impractical to maintain at the location such stocks and furnish such service for more than a particular number of makes of vehicles. Most using activities within the United States excluding Alaska) could not be considered to meet these requirements. However, there may be cases where, because of extremely unusual conditions, standardization at a particular location within the United States may be necessary in the public interest.

(d) Limitations. (1) This authority shall not be used for initial procurement of equipment and spare parts which ultimately will be standardized, or for the purpose of selecting arbitrarily the equipment of certain suppliers; nor shall it be used unless and until the agency head has determined that:

(i) The equipment constitutes technical equipment:

(ii) Standardization of such equipment and interchangeability of its parts are necessary in the public interest; and

(iii) Negotiation is necessary in special situations or in particular localities in order to assure required standardization of equipment and interchangeability of parts.

(e) Determination and findings. (1) In order for this authority to be used, a determination and findings justifying use of the authority must be prepared in accordance with Subpart 1-3.3.

(2) The following example of findings and determinations is illustrative of the type and amount of information which may be considered sufficient to justify negotiation under section 302 (c) (13) of the Act:

DEPARTMENT OF THE INTERIOR

FINDINGS AND DETERMINATIONS UNDER SECTION 302 (C) (13) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 Findings

In accordance with the requirements of sections 302(c) (13) and 307 of the Federal

Property and Administrative Services Act of 1949, 63 Stat. 377, as amended, I make the following findings:

1. The Alaska Road Commission has stated that it has a requirement for 25

(Make and trucks as set forth in (letter) or (reqtype) uisition) dated and has submitted, by letter dated -; signed by information in justifica

(Name and title)

tion for such purchase under section 302 (c) (13), as described or included in the findings set forth below.

2. The trucks in question are required for use at Alaska. This 10

(District or area) cation is accessible only by

(Indicate: 1.e. "boat" and for several months

or "boat and air" etc.) each year is accessible only by The Government's operations which consist of require the use

(General description only)

of trucks of this type. The location presently has of these trucks with stocks of spare parts determined necessary from experience to maintain these trucks in proper operational efficiency. There are also trucks of other manufacture with required stocks of spare parts which will gradually be eliminated by standardization. No commercial supply or service centers are maintained at this remote location or within approximately miles thereof.

3. It is impractical to provide service and repair facilities for numerous makes of vehicles and to maintain stocks of parts necessary to keep the various makes in operating condition. Each make of vehicle usually requires additional special equipment for proper servicing and repair. This results in added cost, housing, and related administrative expense. Similarly each additional make requires the maintenance of separate stocks of spare service and repair parts which require additional bins, storage, and clerical and administrative expenses. The annual savings in cost estimated to result from the maintenance of reduced stocks of parts made possible by standardizing on these trucks is

4. (State other factors and details as applicable.)

5. Under these circumstances the Alaska Road Commission regards the standardization and interchangeability as necessary in the public interest.

Determinations

1. Based upon the foregoing findings, I hereby determine, within the meaning of section 302 (c) (13) of the Federal Property and Administrative Services Act of 1949, that:

A. The equipment described is technical equipment;

B. Negotiation is necessary. in the situation and in the locality described, in order to assure standardization of the equipment and interchangeability of parts: and

C. Such standardization and interchangeability is necessary in the public interest. 2. Upon the basis of these findings and determinations, I hereby authorized the negotiation of a contract (or contracts) for procurement of the equipment described in these findings pursuant to section 302 (c) (13) of the Federal Property and Administrative Services Act of 1949.

Secretary of the Interior. § 1-3.214 Negotiation after advertising. Pursuant to the authority of section 302(c) (14) of the Act (41 U.S.C. 252(c) (14)), purchases and contracts may be negotiated without formal advertising if "for property or services as to which the agency head determines that bid prices after advertising therefor are not reasonable (either as to all or some part of the requirements) or have not been independently arrived at in open competition."

(a) Application. This authority is designed to cope with cases where bids received after advertising are too high. although not actually identical or apparently collusive, and cases of indicated possible collusive bidding. Indications of possible violation of antitrust laws or collusive bidding are to be reported in accordance with Subpart 1-1.9. Where, after advertising, some of the bids do not appear reasonable, and the reasonable bids do not cover the full quantity required, the contracting officer may, at his discretion, accept the reasonable bids. Negotiation for the balance of the quantity required is subject to the requirements of § 1-3.214(b).

(b) Limitations. This authority shall not be used unless it has been determined in accordance with Subpart 1-3.3 that the bid prices, after formal advertising for the property or services, are not reasonable or were not independently arrived at in open competition. Also, after such determination has been made and after rejection of bids, no contract shall be negotiated under this authority unless;

(1) Notification of intention to negotiate and reasonable opportunity to negotiate have been given to each responsible bidder which submitted a bid in response to the invitation for bids; and

(2) The negotiated price is the lowest negotiated price offered by any responsible supplier.

§ 1-3.215 Otherwise authorized by law.

(a) Pursuant to the authority of sec. tion 302(c) (15) of the Act (41 U.S.C. 252(c) (15)). purchases and contracts may be negotiated without formal advertising if "otherwise authorized by law." This provision preserves the authority to negotiate contracts conferred by other legislation. The following are typical examples:

(1) Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.).

(2) Small Business Act (15 U.S.C. 631).

(3) Section 321 of the Transportation Act of 1940 (49 U.S.C. 65). (This law permits negotiation for transportation services when the services required can be procured from any common carrier. This authority shall not be used to eliminate competition from companies which are not common carriers when the services may also be performed by such companies.)

(b) When negotiating pursuant to other statutory authority:

(1) The law so authorizing should be cited in the purchase or contract instrument.

(2) The requirements of section 304 of the Act shall apply. These pertain to the covenant against contingent fees, examination of records, and various aspects of cost-type contracting.

(c) Other statutory authority of an agency to procure "without advertising" or "without regard to section 3709 of the Revised Statutes" is construed to authorize negotiation pursuant to section 302(c) (15) of the Act and without regard to the advertising requirements of sections 302(c) and 303 of the Act.

[29 F.R. 10155, July 24, 1964, as amended at 31 F.R. 348. Jan. 12, 1966]

Subpart 1-3.3-Determinations,
Findings, and Authorities

a-fixed-fee contracts, (5) waive a requirement for the submission and certification by contractors or subcontractors of cost or pricing data, or (6) omit the Examination of Records clause from negotiated contracts with foreign contractors and foreign subcontractors, where agencies desire to omit such clause under the authority of section 304 (c) of the Act (41 U.S.C. 254 (c)).

(b) Determinations and findings ordinarily shall be made only with respect to individual purchases or contracts. However, where class determinations and findings are made, they shall not be construed to authorize the procurement by negotiation of supplies or services within the class which feasibly and practicably could be procured through formal advertising (see § 1-1.301-2).

(c) Pursuant to section 307 of the Act (41 U.S.C. 257), the determinations and decisions provided in Title III of the Act to be made by the agency head, and the written findings in support of the determinations required by §§ 1-3.211 through 1-3.214 and paragraphs (a), (b), and (d) of § 1-3.302, shall be final.

[29 F.R. 10155, July 24, 1964, as amended at 34 F.R. 6844, Apr. 24, 1969] § 1-3.302

Determinations and findings

required.

In addition to the determinations and findings required by Subpart 1-3.2, the following determinations in connection with the negotiation of contracts are required to be made in writing, supported by written findings as specified in § 13.305:

(a) The determination required by section 304 (b) of the Act (41 U.S.C. 254 (b)) as to estimated cost of, and fees to be paid under, cost-plus-a-fixed-fee contracts (see §§ 1-3.401, 1-3.405-4, and 13.405-5 (c) (2));

(b) The determination required by section 304 (b) of the Act that the use of a cost or a cost-plus-a-fixed-fee contract or an incentive-type contract is likely to be less costly than other methods or that it is impracticable to secure property or services of the kind or quality required without the use of a cost or cost-plus-afixed-fee contract or an incentive-type contract (see §§ 1-3.404-4 and 1-3.405-1);

(c) The determination required by section 303(b) of the Act (41 U.S.C. 253 (b)) that it is in the public interest to reject all bids;