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81-16.903 Department of Justice forms.

Department of Justice forms are illustrated in this section in the same manner and for the same purpose as is stated in § 1-16.901 for standard forms. § 1-16.903-DJ-1500 Form DJ-1500: Identical Bid Report for Procurement.

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TATE THE NATIONAL DEFENSE Sec. 1-17.000 Scope of parts

Subpart 1-17.1-General 1-17.101 Authority. 1-17.102 General policy. 1-17.103 Types of actions. 1-17.104 Definitions. 1-17.105 Reports. Subpart 1-17.2-Requests for Contractual

Adjustment 1-17.200 Scope of subpart. 1-17.201 (Reserved] 1-17.202 (Reserved) 1-17.203 (Reserved] 1-17.204 Standards for deciding cases. 1-17.204–1 General. 1-17.204-2 Amendments without considera

tion. 1-17.204-3 Mistakes. 1-17.2044 Informal commitments. 1-17.206 Limitations upon exercise of


Sec. 1-17.205-1 General limitations. 1-17.205-2 Additional limitations below 8oC

retarial level. 1-17.206 Contractual requirements. 1-17.207 Requests by contractors. 1-17.207-1 Filing requests. 1-17.207-2 Form of requests. 1-17.207-3 Preliminary record of requosta. 1-17.207-4 Facts and evidence. 1-17.208 Processing cases. 1-17.208-1 Investigation. 1-17.208-2 Interagency coordination. 1-17.208-3 Disposition. 1-17.208-4 Records.

Subpart 1-17.3_kosidual Powers 1-17 300 Scope of subpart. 1-17.301 Statutory limitation on delega

tion of authority. 1-17.302 Standards for using residual

powers. 1-17.303 Procedures. 1-17.304 Records. Subpan 1-17.4 Records of Requests and

Dispositions 1-17.400 Scope of subpart. 1-17.401 Preliminary records.

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oficials the power to make further dele1-17.402 Final records.

gations of such authority within theli 1-17.403 Sample format for preliminary

respective organizations. However, un. and inal records.

der the Act and the Executive Order, auSubpart 1-17.5—Act and Exocutivo Order thority to approve actions obligating the 1-17.500 Scope of subpart.

United States in an amount in excess of 1-17.501 The Act of August 28, 1958 (Pub $50,000 may not be delegated below the

lic Law 85-804; 50 U.S.C. 1431 secretarial level, as defined in § 1-17.104

1435). 1-17.502 Executive Order No. 10789 of November 14, 1958.

§ 1-17.102 General policy. AUTHORITY: The provisions of this Part a) Authority conferred by the Act 1-17 issued under sec. 205(c), 63 Stat. 390; shall be delegated in a manner which 40 U.S.C. 486(c).

will best serve the interests of the naSOURCE: The provisions of this Part 1-17 tional defense and, at the same time, re. appear at 29 F.R. 10348, July 24, 1964, unless

tain control over the exercise of the ctherwise noted.

authority at a level within the agency

which is high enough to insure uniform§ 1-17.000 Scope of part.

ity of action. As distinguished from the normal (b) The authority conferred by the principles and procedures set forth in Act shall not be utilized so as to en. the other parts of the FPR, this part courage carelessness and laxity on the establishes uniform regulations for en part of persons engaged in the defense tering into and amending or modifying effort nor be relied upon where other contracts to facilitate the national de adequate legal authority exists. fense under the extraordinary, emer (c) The actions authorized under the gency authority granted by the Act of Act shall be processed as expeditiously as August 28, 1958, Public Law 85-804 (50

practicable consistent with the care, reU.S.C. 1431–1435), set forth in g 1-17.501, straint, and exercise of sound judgment, hereinafter referred to in this Part 1-17 appropriate. to such extraordinary au. as “the Act,” and Executive Order No.

thority. 10789 of November 14, 1958 (3 CFR, 19541958 Comp., pp. 426-428), as amended by

$ 1-17.103 Types of actions. Executive Order No. 11051 of Septem- The following three types of actions ber 27, 1962 (3 CFR, 1959–1963 Comp., may be taken by or pursuant to the di. pp. 635-644), set forth in § 1-17.502, rection of an approving authority under hereinafter referred to in this Part 1-17 the Act: as “the Executive Order."

(a) Contractual adjustments such as

amendments without consideration, corSubpart 1-17.1—General

rection of mistakes, and formalization of 81-17.101 Authority.

informal commitments (see Subpart (a) The Act empowers the President


(b) Making advance payments (proto authorize departments and agencies exercising functions in connection with

cedures for making such payments are the national defense to enter into con set forth in Subpart 1-30.4). tracts or into amendments or modifica (c) Exercise of “residual powers," tions of contracts and to make advance which refers to all other authority under payments, without regard to other pro the Act (see Subpart 1–17.3). visions of law relating to the making,

§ 1-17.104 Definitions. performance, amendment, or modification of contracts, whenever he deems As used in this part 1-17, the following that such action would facilitate the terms have the meanings set forth: national defense. (Similar authority (a) “Approving authority” means an was formerly contained in Title II of the official or a contract adjustment board First War Powers Act, 1941, which, as having authority to approve actions unextended, expired June 30, 1958.)

der the Act. This authority is dis(b) The Executive Order authorizes tinguished from authority to take apthe head of each agency named therein propriate contractual action pursuant to to delegate the authority conferred upon such approval. him thereby to any other officials within (b) "Secretarial level” means an offihis agency, and to confer on any such cial at or above the level of an assistant head of an agency or his deputy, and a $1–17.201 [Reserved] contract adjustment board.

§ 1-17.202 (Reserved] (c) “Defense contract" means an agreement of any kind (whether in the § 1-17.203 (Reserved] form of a letter of intent. purchase order, $ 1-17.204 Standards for deciding or otherwise) for property or services

cascs. necessary, appropriate, or convenient for

§ 1-17.204–1 General. the national defense.

The mere fact that losses occur under 81-17.105 Reports.

a defense contract is not, by itself, a suf(a) The Act and the Executive Order ficient basis for the exercise of the auprovide that each agency shall, by thority conferred by the Act. Whether, March 15 of each year, submit to the in a particular case, appropriate action Congress & report of all actions taken such as amendment without considerawithin the agency under the authority of tion, correction of a mistake or ambithe Act during the preceding calendar guity in a contract, or formalization of year.

an informal commitment, will facilitate (b) The report shall show the infor the national defense is a matter of sound mation set forth in (1) below for all ac judgment to be made ori the basis of all tions approved, and in (2) below for all the facts of such case. Although it is obactions denied. In addition, for each viously impossible to predict or enumerapproved action which involves actual or ate all the types of cases with respect potential cost to the Government in ex to which action may be appropriate, excess of $50,000, the report shall show: amples of certain cases or types of cases name of contractor, actual cost or esti where action may be proper are set forth mated potential cost, description of prop in S$ 1-17.204-2 through 1-17.204-4. erty or services involved, and a statement Even if all of the factors contained in of the circumstances justifying the any of the examples are present, other action.

factors or considerations in a particular (1) For actions approved :

case may warrant denial of the request (i) The total number of actions, total These examples are not intended to exdollar amount requested, and total dollar clude other cases where an approving amount approved; and

authority determines that the circum(11) By type of action (amendments stances warrant action. without consideration, correction of mis

§ 1-17.204-2 Amendments without con. takes, formalization of informal commit

sideration. ments, and such other actions as appropriate), the number of actions, dollar

(a) Where an actual or threatened amount requested, and dollar amount

loss under a defense contract, however

caused, will impair the productive ability approved.

of a contractor whose continued per(2) For actions denied:

formance on any defense contract or (i) The total number of actions and

whose continued operation as a source total dollar amount requested; and

of supply is found to be essential to the (ii) By type of action, the number of national defense, the contract may be actions and dollar amount requested. adjusted but only to the extent neces

(c) The report should omit any infor- sary to avoid such an impairment of the mation which is classified “Confidential" contractor's productive ability. or higher.

(b) Where a contractor suffers a loss (d) A report is not required if no ac- (not merely a diminution of anticipated tion (either approving or denying relief) profits) on a defense contract as a result was taken under the authority during of Government action, the character of the year.

the Government action will generally Subpart 1–17.2-Requests for

determine whether any adjustment in

the contract will be made and its extent. Contractual Adjustment

Where the Government action is di§ 1-17.200 Scope of subpart.

rected primarily at the contractor and This subpart sets forth standards and is taken by the Government in its capacprocedures for the disposition of re- ity as the other contracting party, the quests for contractual adjustment under contract may be adjusted if fairness so the Act.

requires; thus, where such Government

action, although not creating any u. ability on its part, increases the cost of performance, considerations of fairness may make appropriate some adjustment of the contract. & 1-17.204_3 Mistakes.

(a) A defense contract may be amended or modified to correct or mitigate the effect of a mistake. The following are examples:

(1) A mistake or ambiguity which consists of the failure to express, or to express clearly, in a written contract the agreement as both parties understood it.

(2) A mistake on the part of the contractor which is so obvious that it was or should have been apparent to the contracting officer.

(3) A mutual mistake as to a material fact.

(b) Amending defense contracts to correct mistakes with the least possible delay normally will facilitate the national defense by expediting the procurement program and by giving contractors proper assurance that such mistakes will be corrected expeditiously and fairly. § 1-17.20444 Informal commitments.

Informal commitments may be formalized under certain circumstances to permit payment to persons who have taken action without a formal defense contract; for example, where any person, pursuant to written or oral instructions from an official of an agency and relying in good faith upon the apparent authority of the official to issue such Instructions, has arranged to furnish or has furnished property or services to the agency or to a defense contractor or subcontractor without formal contractual coverage for such property or seryIces. Formalization of commitments under such circumstances normally will facilitate the national defense by assuring such persons that they will be treated fairly and paid expeditiously. § 1-17.205 Limitations upon exercise of

authority. § 1-17.205-) General limitations.

(a) The Act is not authority for:

(1) The use of the cost-plus-a-percentage-of-cost system of contracting;

(2) The making of any contract in violation of existing law relating to limi. tation of profit or fees;

(3) The negotiation of purchases of or contracts for property or services required by law to be procured by formal advertising and competitive bidding; or

(4) The waiver of any bid, payment, performance or other bond required by law.

(b) No contracts, amendments, or modifications shall be entered into under authority of the Act:

(1) Unless a finding is made that the action will facilitate the national defense;

(2) Unless other legal authority within the agency concerned is deemed to be lacking or inadequate; and

(3) Except within the limits of the amounts appropriated and the statutory contract authorization.

(c) No contract shall be amended or modified:

(1) Unless the request therefor has been filed before all obligations (including final payment) under the contract have been discharged; and

(2) If the contract was negotiated under section 302 (c) (14) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 252(c) (14)) or under 10 U.S.C. 2304(a) (15), to increase the contract price to an amount higher than the lowest rejected bid of any responsible bidder.

(d) No informal commitment shall be formalized:

(1) Unless a request for payment has been filed within six months after arranging to furnish or furnishing property or services in reliance upon the commitment; and

(2) Unless it is found that at the time the commitment was made it was impracticable to use normal procurement procedures. &1-17.205-2 Additional limitations be.

low secretarial level. The exercise of authority by officials below the secretarial level shall be subJect to the following additional limitations:

(a) The action shall not deal with or directly affect any matter which has been submitted to the General AccountIng Office.

(b) The action shall not obligate the Government in an amount in excess of $50,000.

(c) The action shall not release a contractor from performance of an obligation

(1) Priced in excess of $50.000; or

(2) Where reprocurement is contemplated, unless the approving authority finds that the estimated actual or potential increase in cost to the Government will not exceed $50,000.

(d) The action shall not involve the disposal of Government surplus property.

(e) Mistakes shall not be corrected by Action obligating the Government in an amount in excess of $500 unless notice of the mistake was given to the contracting officer before completion of the contractor's work or the effective date of contract termination

(f) The correction of a contract because of a mistake in its making shall not result in increasing the original contract price above the next lowest responsive bid of a responsible bidder in the case of & formally advertised procurement, or the amount of the next lowest responsive proposal (at the time of award) of a responsible offeror considered in the case of a negotiated procurement. § 1-17.206 Contractual requirements.

Every contract entered into or amended or modified pursuant to this part 1-17 shall contain:

(a) A citation of the Act and the Executive Order:

(b) A brief statement of the circumstances justifying the action;

(c) A recital of the finding that the action will facilitate the national defense;

(d) The contract clause entitled "Covenant Against Contingent Fees," As set forth in § 1-1.503;

(e) A contract clause in accordance with the examination of records requirements of section 3(b) of the Act (see § 1-3.814-2(e)), unless (1) the contract Is for purchases authorized to be made outside the United States under the Foreign Assistance Act of 1961, and (2) pursuant to Executive Order No. 10784 of October 1, 1958 (3 CFR, 1954-1958 Comp., p. 422), as amended by Executive Order No. 10845 of October 12. 1959 (3 CFR, 1959-1963 Comp., p. 377). It is determined by the agency that inclusion of such

clause or compliance therewith (1 included) would be impracticable;

(f) The Equal Opportunity clause prescribed in § 1-7.102-16;

(g) The Assignment of Claims clause prescribed in § 1-7.102–8;

(h) If otherwise applicable, the contract clause entitled Walsh-Healey Public Contracts Act as set forth in § 112.605; the contract clauses entitled Davis-Bacon Act and Compliance with Copeland Regulations as set forth in Standard Form 19-A (see § 1-16.901-19A); and the contract clause entitled Contract Work Hours and Safety Standards Act-Overtime Compensation as prescribed in § 1-7.102–15.

. (1) Where an indemnification agreement is authorized under the Act, a contract clause providing that the Government's obligation under the agreement is expressly conditioned upon and subject to the availability of appropriated funds from which payment can be made; and

(1) Any other clauses which are appropriate to the particular procurement or required by law or regulation. (29 FR 10348, July 24, 1964, as amended at 38 FR 6675, Mar. 12, 1973) § 1-17.207 Requests by contractors. $ 1-17.207-) Filing requests.

Any person seeking an adjustment under the standards set forth in § 1-17.204 (hereinafter referred to in this subpart as the “contractor") may file a request in duplicate with the cognizant contract. ing officer or his duly authorized representative. If such filing is impracticable, requests will be deemed to be properly filed if filed with the agency head. § 1-17.207-2 Form of requests.

The contractor's request shall nor. mally consist ofa letter to the contracting officer stating:

(a) The precise adjustment requested;

(b) The essential facts summarized in chronological narrative form;

(c) The contractor's conclusions based on such facts and showing, in terms of the standards set forth in § 1-17.204, why the contractor considers himself en. titled to the adjustment requested;

(d) Whether all obligations have been discharged under the contracts involved;

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