tractor and the agency. The fact that the agency has represented the contractor over a considerable period of time. is a factor for favorable consideration. It is not intended, however, to disqualify newly established contractor-agent relationships where a continuing relationship is contemplated by the parties.

(4) It should appear that the agency is an established concern. The agency may be either one which has been in business for a considerable period of time or a new agency which is a presently going concern and which is likely to continue in business as a commercial or selling agency in the future. The business of the agency should be conducted in the agency name and characterized by the customary indicia of the conduct of a regular business.

(5) The fact that a selling agency confines its selling activities to the field of Government contracts does not, in and of itself, disqualify it under the covenant. The fact, however, that the selling agency is employed to secure business generally, that is, to represent the concern in connection with sales to the Government as well as regular commercial sales to non-Government activities is a factor entitled to favorable consideration in evaluating the case as one coming within the authorized exception. Arrangements confined, however, to obtainIng. Government contracts, particularly those involving a selling agency organized immediately prior to or during periods of expanded procurement resulting from conditions of national emergency, must be closely scrutinized. § 1-1.504-6 Fees for "information."

Contingent fees paid for "information" leading to obtaining a Government contract or contracts are included in the prohibition and, accordingly, are in breach of the covenant unless the agent qualifies under the exception as a bona fide employee or a bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business.

§ 1-1.505 Representation and

agroo

ment required from prospective con

full-time employee working solely for the prospective contractor) to solicit or secure the contract, and shall secure a written agreement to furnish information relating thereto as required by the contracting officer. Where an invitation for bids is issued, this inquiry shall be made (and written representation and agreement secured) by requiring the bidder (or contractor) to check the appropriate box in the following statement (which appears on Standard Form 21, Bid Form (Construction Contract), Standard Form 30, Invitation and Bid (Supply Contract), and Standard Form 33, Invitation, Bid and Award (Supply Contract)) to be included in the invitation or bid form:

The bidder represents: (a) that he has, has not, employed or retained any company or person (other than a full-time bona filde employee working solely for the bidder) to solicit or secure this contract, and, (b) that he has, has not, paid or agreed to pay any company or person (other than a full-time bona fide employee working solely for the bidder) any fee, commission, percentage or brokerage fee, contingent upon or resulting from the award of this contract; and agrees to furnish information relating. to (a) and (b) above as requested by the Contracting Officer. (Note: For interpretation of the representation, including the term "bona fide employee," see Code of Federal Regulations, Title 41, Chapter I, Subpart 1-1.5.)

§ 1-1.506 Interpretation of the representation.

(a) For the purpose of the representation and agreement required from the prospective contractor, as described in § 1-1.505, the definition of "bona fide employee" is as specified in § 1-1.504-4.

(b) The fact that the prospective contractor retains a person who does not devote his full time solely to the prospective contractor does not necessarily mean that the relationship involved is in violation of the covenant against contingent fees or that there is any stigma attached to the contractor-agent relationship. It does mean, however, that the prospective contractor must fill out the representation in the affimative and, as required, furnish information with respect to such employment of retention.

(c) If the representation would otherwise be answered in the affimative, the fact that the person employed or retained by the bidder or contractor is an attorney, or a public relations consúltant, or

has any other special or professional title, does not permit answer in the negative.

§ 1-1.507 Use of Standard Form 119. § 1-1.507-1 Form prescribed.

Pursuant to the Act and in furtherarice of the objectives stated in § 1-1.500, Standard Form 119 (December 1952), Contractor's Statement of Contingent or Other Fees for Soliciting or Securing or Resulting from Award of Contract, is hereby prescribed and shall be used in accordance with the provisions of this subpart. Except as provided in § 11.507-3, this form shall be used without deviation by executive agencies whenever either part of the inquiry provided for in § 1-1.505 is answered in the affirmative. The form shall be used also, without deviation, in any other case where an executive agency desires to obtain such information. When, after use of the form, further information is required, it may be obtained in any appropriate manner. Submission of the form shall be required, normally, only of successful bidders and contractors.

§ 1-1.507-2 Statement in lieu of form. Any bidder or proposed contractor who has previously furnished a Standard Form 119 to the office issuing the invitation or negotiating the contract may be permitted to accompany his bid, or submit in connection with the proposed contract, a signed statement (a) indicating when such completed form was previously furnished, (b) identifying by number the previous invitation or contract in connection with which such form was submitted, and (c) representing that the statements in such previously furnished form are applicable to such subsequent bid or contract. In such case, submission of an additional completed Standard Form 119 need not be required.

(c) Any negotiated contract for perishable subsistence supplies in which the aggregate amount involved does not exceed $25,000.

(d) Any contract for services which are required to be performed by an individual contractor in person under Government supervision and paid for on a time basis.

(e) Any contract for public utility services furnished by a public utility company where the utility company's rates for the services furnished are subject to regulation by Federal, State, or other regulatory body and the public utility company is the sole source of supply. (f) Contracts to be made in foreign countries.

(g) Any other contracts, individually or by class, of the Department of Defense, designated by the Secretary. Reports of any such exceptions shall be filed promptly with the Administrator of General Services.

§ 1-1.508-1 Failure or refusal to furnish representation and agreement. Each executive agency shall take the necessary steps to assure that the indicated successful bidder or proposed contractor has furnished a representation (negative or affirmative) and agreement as described in § 1-1.505.

(a) If the indicated successful bidder or proposed contractor makes such representation in the negative, such representation may be accepted and award made or offer accepted in accordance with established procedure.

(b) If the indicated successful bidder or proposed contractor makes such representation in the affimative, a completed Standard Form 119 shall be requested from the bidder or proposed contractor. In the case of formal advertising, the making of an award in accordance with established procedure need not be delayed pending receipt of the form. In the case of negotiation, if the proposed contractor makes such representation in the affirmative, he shall be required to file a completed Standard Form 119 prior to acceptance of the offer or execution of the contract unless the head of the executive agency concerned, or his authorized representative, considers that the interest of the Government will be prejudiced by the suspension of negotiations pending receipt and consideration of an executed Standard Form 119.

(c) If the indicated successful bidder

or proposed contractor fails to furnish the representation and agreement as described in § 1-1.505, such failure shall be considered a minor informality and. prior to award, such bidder or proposed contractor shall be afforded a further opportunity to furnish such representation and agreement. A refusal or failure to furnish such representation and agreement, after such opportunity has been afforded, shall require rejection of the bid or offer.

§ 1-1.508-2 Failure or refusal to furnish Standard Form 119.

If the successful bidder or contractor. upon request, refuses or fails to furnish a completed Standard Form 119, or 8 statement in lieu thereof as provided in § 1-1.507-2, the executive agency concerned shall take one or more of the followering actions, or other action, as may be appropriate:

(a) If an award has not been made or offer accepted, determine whether the bid or offer should be rejected.

(b) If the contract has been awarded or offer accepted, determine what action shall be taken, such as making an independent investigation or considering the eligibility of the contractor as a future contractor in accordance with established procedure.

§ 1-1.508-3 Misrepresentations or violations of the covenant against contingent fees.

In case of misrepresentation, or violation or breach of the covenant against contingent fees, or some other relevant Impropriety, the executive agency concerned shall take one or more of the following actions, or other action, as may be appropriate:

(a) If an award has not been made, or offer has not been accepted, determine whether the bid or offer should be rejected.

(b) If an award has been made or offer has been accepted, take action to enforce the covenant in accordance with its terms; that is, as the best interests of the Government may appear, annul the contract without liability or recover the amount of the fee involved.

(c) Consider the future eligiblity as a contractor of the bidder or contractor in accordance with established procedure.

(d) Determine whether the case should be referred to the Department of Justice in accordance with established procedure with respect to determining matters of fraud or criminal conduct.

This subpart prescribes policies and procedures relating to: (a) The debarment of bidders for cause, (b) the suspension of bidders for cause under prescribed conditions, and (c) the placement of bidders in ineligibility status for violations of the provisions of the Equal Opportunity clause. It is directly applicable to the advertised and negotiated purchases and contracts of executive agencies, including contracts for construction, repair, alteration, destruction, or dismantlement of public works or buildings. Other Federal agencies are requested to comply therewith in conducting their purchasing and contracting operations.

[37 FR 23337, Nov. 2, 1972] § 1-1.601

General.

Debarment, suspension, and placement in ineligibility status are measures which may be invoked by the Government either to exclude or to disqualify bidders and contractors from participation in Government contracting or subcontracting. These measures should be used for the purpose of protecting the interests of the Government and not for punishment. To assure the Government the benefits to be derived from the full and free competition of interested bidders, these measures should not be instituted for any time longer than deemed necessary to protect the interests of the Government, and should preclude awards only for the probable duration of the period of non-responsibility. § 1-1.601-1

Definitions.

(a) "Debarment" means, in general, an exclusion from Government contracting and subcontracting for a reasonable, specified period of time commensurate with the seriousness of the offense or failure or the inadequacy of performance. However, in connection with Executive Order 11246 of September 24.

1965, as implemented by the rules, regulations, and relevant orders of the Secretary of Labor in 41 CFR Part 60, the term "debarment" also means an exclusion by reason of ineligibility under the Secretary's rules from Government contracting or subcontracting for an indefinite period of time pending the elimination of the circumstances for which the exclusion was imposed.

(b) "Suspension" means a disqualification from Government contracting and subcontracting for a temporary period of time because a concern or individual is suspected upon adequate evidence (see § 1-1.605) of engaging in criminal, fraudulent, or seriously improper conduct.

(c) A "debarment list" or "debarred bidders list" means a list of names of concerns or individuals against whom any or all of the measures referred to in this section have been invoked.

(d) "Bidders" means, wherever the term is used in this subpart, any offerors bidding pursuant to an invitation for bids or a request for proposals.

(e) "Affiliates" means business concerns which are affiliates of each other when either directly or indirectly one concern or individual controls or has the power to control another, or when a third party controls or has the power to control both.

[37 FR 23337, Nov. 2, 1972]

§ 1-1.602 Establishment and mainte nance of a list of concerns or individuals debarred, suspended, or declared ineligible.

(a) Each executive agency shall establish and maintain, on the bases contained in § 1-1.602-1, a consolidated list of concerns and individuals to whom contracts will not be awarded and from whom bids or proposals will not be solicited as provided in § 1-1.603.

(b) The list shall show as a minimum the following information:

(1) The names of those concerns or Individuals debarred or ineligible (in alphabetical order) with appropriate cross reference where more than one name is involved in a single action;

(2) The basis of authority for each action;

(3) The extent of restrictions imposed; and

(4) The termination date for each debarred listing.

(c) Each executive agency shall determine, in its discretion, as the interests of the national security may require, the necessity for and degree of classification of its list and correspondence relating thereto. If the agency determines that its list shall not be classified, the list should be marked "For Official Use Only" or with a word or phrase of equivalent meaning to prevent inspection of the contents by any and other than personnel required to have access thereto.

(d) The list shall be kept current by issuance of notices of additions and deletions.

§ 1-1.602-1 Bases for entry on the debarred, suspended, and ineligible bidders list.

Entry shall be made on the debarred, suspended, and ineligible list of firms or individuals on the following bases:

(a) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Walsh-Healey Public Contracts Act (41 U.S.C. 37), which have been found by the Secretary of Labor to have violated any of the agreements or representations required by that Act.

(b) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Davis-Bacon Act (40 U.S.C. 276a-2(a)), as found by the Comptroller General to have violated said Act.

(c) Those listed by the Comptroller General in accordance with the provisions of Part 5, section 56(b) of the Regulations of the Secretary of Labor issued pursuant to authority granted under Reorganization Plan 14 of 1950, as found by the Secretary of Labor to be in aggravated or wilful violation of the prevailing wage or overtime pay provisions of any of the following statutes. (1) Davis-Bacon Act (40 U.S.C. 276a). (2) Anti-Kickback Act (18 U.S.C. 874, 40 U.S.C. 276b, c).

(3) The Contract Work Hours Standards Act (40 U.S.C. 327-330).

(4) National Housing Act (12 U.S.C. 1703).

(5) Hospital Survey and Construction Act (42 U.S.C. 291).

(6) Federal Airport Act (49 U.S.C. 1101).

(7) Housing Act of 1949 (42 U.S.C. 1401).

(8) School Survey and Construction Act of 1950 (20 U.S.C. 251).

(9) Defense Housing and Community Facilities and Services Act of 1951 (42 U.S.C. 1591).

(10) Federal Civil Defense Act of 1950 (50 App. U.S.C. 2281 (1)).

(11) Area Redevelopment Act of 1961 (42 U.S.C. 2518).

(12) Delaware River Basin Compact (sec. 15.1, 75 Stat. 714).

(13) Health Professions Educational Assistance Act of 1963 (sec. 721, 77 Stat. 167).

(14) Mental Retardation Facilities Construction Act (secs. 101, 122, 135, 77 Stat. 282, 284, 288).

(15) Community Mental Health Centers Act (sec. 205, 77 Stat. 292).

(d) Those the executive agency determines to debar administratively for any of the causes and under all of the appropriate conditions listed in § 1-1.604.

(e) Those listed by the Director of the Office of Federal Contract Compliance of the Department of Labor on the Contract Ineligibility List, which gives the names of prime contractors and subcontractors that have been declared ineligible to participate in Government contracting or subcontracting by reason of noncompliance with the Equal Opportunity clause.

(f) Those the executive agency determines to suspend administratively for the reasons and under the conditions set forth in § 1-1.605.

(g) Those determined by an executive agency in accordance with section 3(b) of the Buy American Act (41 U.S.C. 10b (b)) to have failed to comply with the provisions of section 3(a) of that Act under any contract containing the specific provision required by said section 3(a) and made by the agency for construction, alteration, or repair of any public building or public work.

[29 FR 10104, July 24, 1964, as amended at 37 FR 23337, Nov. 2, 1972]

602-1 (a), (b), (d), or (e), or to any concern, corporation, partnership, or association in which the listed concern or individual has actual control or a controlling interest; nor shall bids or proposals be solicited therefrom. However, when it is determined essential in the public interest by the head of an agency or his designee, an exception may be made with respect to a particular procurement action when a concern or individual is listed as debarred on the basis of § 1-1.602-1(d).

(b) Restrictions under statutes designated in the regulations of the Secretary of Labor. A contractor listed on the basis of § 1-1.602-1(c), or any concern, corporation, partnership, or association in which that contractor has actual control or a controlling interest, shall be ineligible for a period of 3 years (from the date of publication by the Comptroller General) to receive any contracts subject to any of the statutes listed in § 1-1.602-1(c).

(c) Buy American Act restrictions. As specified in the Buy American Act (41 U.S.C. 10b (b)), contracts shall not be awarded for construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere to concerns or their affiliates or individuals listed on the basis of § 11.602-1(g); nor shall bids or proposals therefor be solicited therefrom. However, firms or individuals listed on this basis may be awarded contracts and may be solicited for bids or proposals for other than construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere.

(d) Restrictions for noncompliance with the Equal Opportunity clause. A concern or individual debarred for noncompliance with the Equal Opportunity clause shall not be awarded a Government contract.

(e) Restrictions on subcontracting. If a concern or individual listed on the debarred bidders list is proposed as a subcontractor, the contracting officer shall decline to approve subcontracting with that firm or individual in any instance in which consent is required of the Government before the subcontract is made, unless it is determined by the agency to be in the best interest of the Government to grant approval.

[37 FR 23337, Nov. 2, 1972]