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cups, double cups, and orifice jewels. As used herein, the term "jewel bearings" includes "related items."

(2) "Related items" means other synthetic sapphire or ruby components. Examples of related items are pivots, knife edges, insulators, spacers, windows, and striking surfaces other than pallet stones.

(3) "Price list" means the official U.S. Government Jewel Bearing Price List for Jewel bearings produced by the William Langer Jewel Bearing Plant. This list is issued periodically by the General Services Administration.

(4) "Plant" means the Government-owned William Langer Jewel Bearing Plant, Rolla, N. Dak.

(5) "Military Standard Jewel Bearing" means a jewel bearing conforming to Military Specification No. MIL-B-27497 (latest revision) entitled "Bearings, Jewel, Sapphire or Ruby, Synthetic."

(b) Jewel bearings required in the performance of this contract shall be procured from the Plant at prices established in the price list dated (date to be filled in by Contracting Officer). Each purchase order issued to the Plant under this contract shall include the prime contract number and date of the price list cited above. The Contractor agrees that the quantities, types, and sizes (including tolerances) of jewel bearings so ordered will be those required for the performance of this contract. Within 90 calendar days after the effective date of this contract the Contractor shall furnish to the Contracting Officer a certification that the required jewel bearings were ordered pursuant to this clause. The Contractor agrees to notify the Contracting Officer promptly of the rejection of his (or any subcontractor's) purchase order in whole or in part by the Plant. The requirement for purchase and use of jewel bearings from the Plant will be waived to the extent of orders rejected because of the Plant's inability to deliver. If such a waiver is granted, an equitable adjustment shall be made in the contract price or delivery schedule, or both, in accordance with the "Changes" clause of this contract. Further, the requirement for use (but not the requirement for purchase from the Plant) of jewel bearings may be waived by the Contracting Officer when such waiver is determined by him to be consistent with established policy.

(c) The Contractor agrees to use the Langer-made jewel bearings in the production of subassemblies or end items either under this contract or in his commercial production.

(d) Whenever it is necessary for the Contractor or any subcontractor to redesign or reengineer jeweled items in order to satisfy specific performance requirements, the Contractor or subcontractor shall provide in such redesign for the use of military standard Jewel bearings. This requirement does not

apply when the dimensional tolerances or configurations of military standard jewel bearings are such that their use in the product would prevent attainment of the required level of performance specified for the item. However, when one or more nonstandard bearings must be used to satisfy performance requirements of the jeweled item but military standard jewel bearings will function satisfactorily for other applications within the same item, the item will be required to be redesigned to provide for the use of military standard jewel bearings in such "other" applications. The Contractor or subcontractor is not required to redesign a jeweled item solely for the purpose of converting from the use of nonstandard to military standard jewel bearings. Nothing in this contract shall prevent any Contractor or subcontractor from voluntarily redesigning a jeweled item solely to accommodate the use of military standard jewel bearings.

(e) If at the end of the contract period, the total quantity of end items actually ordered under this contract is less than the total estimated quantity, and the Contractor, pursuant to paragraph (b) of this clause, has purchased a larger quantity of Langer-made jewel bearings than used in deliveries made under this contract, an equitable adjustment shall be made (if requested by the Contractor within 90 days after the end of the contract period) to reimburse the Contractor for any additional costs resulting from such excess purchase but in no event shall such additional costs cover more jewel bearings than necessary to deliver the total estimated quantity of end items. Such excess jewel bearings shall be disposed of as directed by the Contracting Officer. However, such excess jewel bearings may be used in partial satisfaction of the requirements to purchase 'Langer-made jewel bearings pursuant to paragraph (b) of this clause where a subsequent contract to furnish similar end items to the Government is entered into with the same Contractor. In this situation the requirement to purchase and use jewel bearings from the Plant will be waived up to the amount of such excess jewel bearings in Contractor's possession upon submission of a written request by the Contractor. Such request shall contain documented evidence in support of the waiver of purchase and nonuse of such excess jewel bearings. If such waiver is granted, an equitable adjustment to the extent of differences in price lists shall be made in the contract price in accordance with the "Changes" clause of this contract.

(f) The Contractor agrees to retain for 3 years from the date of final payment under this contract and upon request of the Contracting Officer to make available during that period records showing compliance with this clause.

(g) The Contractor agrees to insert this clause, including this paragraph (g), in every subcontract and purchase order issued

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Public Law 86-695, September 2, 1960 (41 U.S.C. 51-54), prohibits the payment, directly or indirectly, by or on behalf of a subcontractor in any tier urder any Government negotiated contract of any fee, commission, compensation, gift, or gratuity to the prime contractor or any higher tier subcontractor or to any officer, partner, employee, or agent of the prime contractor, of any higher tier subcontractor, as an inducement or acknowledgment for the award of a subcontract or order. The Act further provides that the amount of any such fee, commission, or compensation, or the cost or expense of any such gratuity or gift, whether heretofore or hereafter paid by the subcontractor, shall not be charged, either directly or indirectly, as a part of the contract price charged by the subcontractor to the prime contractor or higher tier subcontractor. It also creates a conclusive presumption that the cost of any such prohibited payment has been included in the price of the subcontract or order and ultimately borne by the Government. The Act provides for the recovery on behalf of the United States of any such payment from either the subcontractor or recipient, by court action, or by setoff of moneys otherwise owing to the subcontractor either by the United States directly or by the prime contractor. The Act imposes criminal penalties on any person who knowingly makes or receives, directly or indirectly, any such prohibited payment.

130 FR 9539, July 31, 1965 |

§ 1-1.321 Stabilization of prices.

(a) Each solicitation for commodities or services issued after the effective date of this regulation shall include, to the extent practicable, the certification prescribed by this section. Where contracts for commodities or services are awarded without reference to a solicitation, the Certification prescribed by this section, to the extent practicable, shall be included in the contract.

PRICE STABILIZATION CERTIFICATION The bidder or offeror (Contractor) certifies that he is in compliance with the price

stabilization requirements of Executive Order 11723, dated June 13, 1973, and amendments thereof, and the regulations of the Cost of Living Council as set forth in title 6, Code of Federal Regulations, part 140, or any additions or revisions to title 6.

(b) Where an offeror fails to execute the certification, such failure shall not be deemed to render the bid nonresponsive. In the event of such a failure, the offeror shall be given an opportunity to correct the omission.

(c) Where price analyses are made in accordance with §§ 1-2.407-2 and 13.807-2, any suspected violation shall be reported to the Internal Revenue Service through agency channels. [38 FR 15963, June 19, 1973]

EFFECTIVE DATE: § 1-1.321 is effective until 11:59 p.m., e.s.t. August 12, 1973, or such other termination date as may be specified for Executive Order 11723, dated June 13, 1973. Executive Order 11723 superseded in part by Executive Order 11730, 38 FR 19345, July 19, 1973.

§ 1-1.322 Payment of interest on contractors' claims.

(a) It is the Government's policy to pay interest on a contractor's claim when such claim is ultimately decided in favor of the contractor pursuant to the disputes clause of his contract.

(b) In order to implement the policy set forth in paragraph (a) of this section, all contracts, except for small purchases covered by Subpart 1-3.6, which contain a disputes clause shall also include the payment of interest on contractors' claims clause set forth below: PAYMENT OF INTEREST ON CONTRACTORS' CLAIMS

(a) If an appeal is filed by the contractor from a final decision of the contracting officer under the disputes clause of this contract, denying a claim arising under the contract, simple interest on the amount of the claim finally determined owed by the Government shall be payable to the contractor. Such interest shall be at the rate determined by the Secretary of the Treasury pursuant to Public Law 92-41, 85 Stat. 97, from the date the contractor furnishes to the contracting officer his written appeal under the disputes clause of this contract, to the date of (1) a final judgment by a court of competent jurisdiction, or (2) mailing to the contractor of a supplemental agreement for execution either confirming completed negotiations between the parties or carrying out a decision of a board of contract appeals.

(b) Notwithstanding (a), above, (1) interest shall be applied only from the date payment was due, if such date is later than

the filing of appeal, and (2) interest shall not be paid for any period of time that the contracting officer determines the contractor has unduly delayed in pursuing his remedies before a board of contract appeals or a court of competent jurisdiction.

[37 FR 15152, July 28, 1972]

Subpart 1-1.4-Procurement Responsibility and Authority

SOURCE: The provisions of this Subpart 1-1.4 appear at 32 FR. 16492, Dec. 1, 1967, unless otherwise noted.

§ 1-1.400 Scope of subpart.

This subpart deals with the procurement responsibility and authority of the head of the procuring activity and contracting officer as defined in §§ 1-1.206 and 1-1.207, and with the selection and designation of contracting officers. § 1-1.401

Responsibility of the head of

the procuring activity.

The head of the procuring activity is responsible for the procurement of personal property and nonpersonal services (including construction) to the full extent that responsibility has been assigned to his activity.

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Contracting officers are authorized to enter into and administer contracts for personal property and nonpersonal services (including construction) on behalf of the Government and make related findings and determinations within the limitations of the authority delegated to them. In the exercise of such authority, they are subject to the requirements in 1-1.403 and any further requirements, consistent with the Federal Procurement Regulations, imposed by the contracting agency. § 1-1.403

Requirements to be met before entering into contracts. No contract shall be entered into unless all applicable requirements of law, Executive orders and regulations have been met. The term "regulations" includes those issued by any regulatory agency whether or not incorporated or referenced in the Federal Procurement Regulations.

§ 1-1.404 Selection, designation, and termination of designation of con. tracting officers.

Contracting officers shall be selected, designated as such, and their designa

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In selecting individuals to serve as contracting officers or in positions which include authority to act as contracting officers, consideration shall be given to experience, training, education, business acumen, judgment, character, reputation, and ethics. In considering experience, training, and education, the following shall be evaluated:

(a) Experience in the field of procurement involved (e.g., supply, construction, etc.) gained in a Government or nonGovernment procurement office, ΟΙ otherwise;

(b) Formal education or special training, including Government conducted or sponsored courses, in pertinent fields, such as business administration, law, accounting, engineering, architecture, or related fields; and

(c) Knowledge of applicable laws, Executive orders, and regulations. § 1-1.404-2 Designation.

Designation of individuals to act as contracting officers may be accomplished by delegation of authority to individuals or to positions. In the latter case, unless' otherwise provided by the agency, any individual authorized to serve in such a position is a contracting officer. In either case, however, the instrument of designation shall include, or make specific reference to, any limitations on the scope of authority to be exercised, other than those contained in applicable laws, regulations, or directives. Appropriate records shall be maintained, whether designation be made by name or by reference to organizational title or position designation. § 1-1.404-3 Termination of designa

tion.

Unless otherwise provided in the instrument designating an individual as a contracting officer (e.g. stipulation of a specified term or a specific purpose), the designation shall remain effective until the contracting officer is reassigned, his employment is terminated, or his designation is revoked. No revocation shall operate retroactively. § 1-1.404-4

Assignment of duties to contracting officers.

In the assignment of duties, including execution and administration of con

tracts, consideration shall be given to the ability, training, and experience of the contracting officer. Duties involving contracts of large dollar value and complexity shall be given only to personnel with commensurate experience, training, and ability. § 1-1.405

Ratification of unauthorized contract awards.

Execution of otherwise proper con.. tracts made by individuals without contracting authority, or by contracting officers in excess of the limits of their delegated authority, may be later ratified. To be effective, such ratification must be in the form of a written document clearly stating that ratification of a previously unauthorized act is intended and must be signed by a person authorized to ratify such acts. Generally such ratification may be made only by an official on whose behalf the contract was made and then only (1) if he could have given authority to enter into the contract before it was awarded and (2) if he still has power to do so at the time of ratification. § 1-1.406 Cost Accounting Standards.

The contracting officer or his authorIzed representative shall:

(a) Determine the adequacy of prime contractor's disclosure statements (see § 1-3.1203(a));

(b) Determine whether prime contractor's disclosure statements are in compliance with Part 1-15 and Cost Accounting Standards;

(c) Determine contractor compliance with Cost Accounting Standards and disclosure statements, if applicable; and

(d) Negotiate price adjustments and execute supplemental agreements pursuant to the Cost Accounting Standards clause set forth in Attachment B. [37 FR 13092, July 1, 1972]

Subpart 1-1.5-Contingent Fees § 1-1.500 Scope of subpart.

This subpart prescribes the use by executive agencies of the "covenant against contingent fees" and sets forth the policies, forms, methods, procedure, principles, and standards related thereto. The requirements of this subpart have as their objective the prevention of improper influence in connection with the obtaining of Government contracts, the elimination of arrangements which encourage the payment of inequitable and exorbitant fees bearing no reasonable

relationship to the services actually performed, and the prevention of unwarranted expenditure of public funds which inevitably results therefrom. The methods used to achieve these objectives are the requirement for disclosure of the details of arrangements under which agents represent concerns in obtaining Government contracts, and the prohibiting, by use of the covenant against contingent fees, of certain types of contractor-agent arrangements.

§ 1-1.501 Applicability.

The provisions of this subpart apply to all contracts for the procurement of personal property and nonpersonal services, including the procurement of construction. The Criminal Code will apply in any case involving actual criminal conduct.

§ 1-1.502 Improper influence.

The term "improper influence" means influence, direct or indirect, which induces or tends to induce consideration or action by any employee or officer of the United States with respect to any Government contract on any basis other than the merits of the matter.

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Executive agencies shall include in every negotiated or advertised contract a "covenant against contingent fees" substantially as follows (set forth as clause 11 of Standard Form 19, Invitation, Bid, and Award (Construction, Alteration or Repair); as clause 17 of Standard Form 23-A, General Provisions (Construction Contract); and as clause 20 of Standard Form 32, General Provisions (Supply Contract)):

COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencles maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this contract without liability or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee.

[31 F.R. 5880, Apr. 16, 1966]

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There are excepted from the prohibition of the covenant "bona fide employees" and "bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business."

§ 1-1.504-4 Bona fide employee.

(a) The term "bona fide employee." for the purpose of the exception to the prohibition of the covenant, means an individual (including a corporate officer) employed by a concern in good faith to devote his full time to such concern and no other concern and over whom the concern has the right to exercise supervision and control as to time, place, and manner of performance of work. It is recognized that a concern, especially a small business concern, may employ an individual who represents other concerns. The factors set forth in § 1-1.504-5(b), except (4) thereof, shall be applied to determine whether such an individual comes within the exception to the prohibition of the covenant.

(b) The hiring must contemplate some continuity and it may not be related only to the obtaining of one or more specific Government contracts.

(c) An employee is not "bona fide" who seeks to obtain any Government contract or contracts for his employer through the use of improper influence or who holds himself out as being able

to obtain any Government contract or contracts through improper influence.

(d) A person may be a bona fide employee whether his compensation is on a fixed salary basis or, when customary in the trade, on a percentage, commission or other contingent basis, or 8 combination of the foregoing.

§ 1-1.504-5 Bona fide established com. mercial or selling agency maintained by the contractor for the purpose of securing business.

(a) An agency or agent is not "bona fide" which seeks to obtain any Government contract or contracts for its principals through the use of improper influence or which holds itself out as being able to obtain any Government contract or contracts through improper influence.

(b) In determining whether an agency is a "bona fide established commercial or selling agency maintained by the contractor for the pupose of securing business," the factors set forth below shall be considered. They are necessarily incapable of exact measurement or precise definition and it is neither possible nor desirable to prescribe the relative weight tc be given any single factor as against any other factor or as against all other factors. The conclusions to be reached in a given case will necessarily depend upon a careful evaluation of the agreement and other attendant facts and circumstances.

(1) The fees charged should not be inequitable and exhorbitant in relation to the services actually rendered. That is, the compensation should be commensurate with the nature and extent of the services and should not be excessive as compared with the fees customarily allowed in the trade concerned for similar services related to commercial (nonGovernment) business. In evaluating reasonableness of the fee, there should be considered services of the agent other than actual solicitation, as for example, technical, consultant or managerial services, and assistance in the procurement of essential personnel, facilities, equipment, materials, or subcontractors for performance of the contract.

(2) The selling agency should have adequate knowledge of the products and the business of the concern represented, as well as other qualifications necessary to sell the products or services on theimerits.

(3) There should ordinarily be a continuity of relationship between the con

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