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power of redelegation. A copy of each authorized deviation shall be sent to the Director of Installations and Logistics.

(d) Request for deviations from the FPR or DOTPR affecting more than one contract or contractor shall be forwarded to the Director of Installations and Logistics. Requests involving deviations from the FPR will be considered jointly by the Department and the General Services Administration, unless, in the judgment of the Assistant Secretary for Administration, after due consideration of the objective of uniformity and program responsibility of the Department, circumstances preclude such joint effort. In such cases, the Assistant Secretary for Administration will approve such class deviations as he determines necessary and will appropriately notify the General Services Administration.

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§ 12-1.204 Head of the agency.

"Head of the agency" means the Secretary and the following assistant chief officials: the Deputy Secretary, the Assistant Secretary for Administration; and for procurements within their Administrations, the Administrators of the Federal Aviation Administration, Federal Highway Administration, Federal Railroad Administration, Urban Mass Transportation Administration, National Highway Traffic

Safety Administration, St. Lawrence Seaway Development Corporation, and the Commandant, U.S. Coast Guard, and the Director, Transportation System Center.

§ 12-1.206 Head of the procuring activity. The following officials have been designated as "head of the procuring activity":

(a) In the Office of the Secretary:

(1) The Chief, Procurement and Supply Division, Transportation Systems Center, Cambridge, Mass.

(2) The Chief, Procurement Operations Division, Washington, D.C.

(b) In the Federal Aviation Administration:

(1) The Director, Logistics Service, Washington, D.C.

(2) The Director, Metropolitan Washington Airport Service, Gravelly Point, Va. Capital Airports, Falls Church, Va.

(3) The Director, Alaskan Region, Anchorage, Alaska.

(4) The Director, Western Region, Los Angeles, Calif.

(5) The Director, Southern Region, Atlanta, Ga.

(6) The Director, Pacific Region, Honolulu, Hawaii.

(7) The Director, Central Region, Kansas City, Mo.

(8) The Director, Eastern Region, New York, N.Y.

(9) The Director, Southwest Region, Fort Worth, Tex.

(10)

The Director, Aeronautical Center, Oklahoma City, Okla.

(11) The Director, National Aviation Facilities Experimental Center, Atlantic City, N.J.

(12) The Director, New England Region, Burlington, Mass.

(13) The Director, Great Lakes Region, Des Plaines, Ill.

(14) The Director, Rocky Mountain Region, Denver, Colo.

(15) The Director, Northwest Region, Seattle, Wash.

(c) In the Coast Guard, the Comptroller of the Coast Guard, Washington, D.C.

(d) For the Federal Highway Administration, the Associate Administrator for Administration, Washington, D.C.

(e) For the National Highway Traffic Safety Administration, the Associate Administrator for Administration, Washington, D.C.

(f) For the Federal Railroad Administration, the Associate Administrator for Administration, Washington, D.C.

(g) For the St. Lawrence Seaway Development Corporation, the Director, Office of Procurement and Supply, Massena, N.Y.

(h) For the Urban Mass Transportation, the Director, Office of Procure

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"Administration" means the Federal Aviation Administration, the Federal Highway Administration, the Federal Railroad Administration, the Urban Mass Transportation Administration, the Coast Guard, the St. Lawrence Seaway Development Corporation, and the National Highway Traffic Safety Administration. The term "Administration" also includes the Transportation Systems Center, and the Office of Administrative Operations of the Office of the Secretary. The term "Administration" as used, for example, in the phrase "in accordance with Administration procedures" would include the foregoing organizations, unless the paragraph states otherwise. § 12-1.251 Procurement office.

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Subpart 12-1.3-General Policies

§ 12-1.302-3 Contracts between the Government and Government employees or business concerns substantially owned or controlled by Government employ

ees.

Unless a higher authority is specified within an Administration, heads of procuring activities are authorized to except individual contracts from the policy against awarding contracts to Government employees or business concerns substantially owned or controlled by Government employees. Each such exception shall be evidenced by a written determination signed by the head of the procuring activity, setting forth the facts in sufficient detail to demonstrate that the exception is being granted for the most compelling reasons, and attaching any supporting documentation. A copy of each such determination, with attachments, shall be forwarded to the Director of Installations and Logistics, OST.

§ 12-1.305-3. Deviations from Federal specifications.

(a) Each Administration shall designate an official to carry out the responsibilities set forth in FPR 1-1.3053. One copy of each such designation shall be forwarded to the Director of Installations and Logistics, OST.

(b) Whenever a notification or recommendation for a change in a Federal Specification is submitted to the General Services Administration, as provided in FPR 1-1.305-3(b)(5), an information copy shall be forwarded to the Director of Installations and Logistics, OST. Similarly, the Director of Installations and Logistics shall be advised any time the General Services Administration disapproves a deviation from a Federal Specification.

§ 12-1.305-50 Index to Federal and Department of Defense Specifications and Standards.

The "Index of Federal Specifications and Standards" and the "Department of Defense Index of Specifications and Standards" are issued annually with periodic supplements. These indexes contain general information pertain

ing to their use and the availability of other Government specifications.

§ 12-1.306-1 Mandatory use and application of Federal Standards.

Whenever a request for an exception to the use of a Federal Standard is submitted to the General Services Administration, an information copy of the submission and GSA's response shall be forwarded to the Director of Installations and Logistics, OST.

§ 12-1.307-5 Limitations on use of "brand name or equal" purchase description. Purchase descriptions containing the phrase "or equal" shall not be used as a device to grant an advantage to particular manufacturers by favoring one product over other products, or to substantiate a determination that no other manufacturer's products are equal in quality and performance to the products specifically named. Where a proper determination has been made that only one supplier can furnish the required item or items, the procurement will be accomplished by negotiation in accordance with FPR Part 1-3.

§ 12-1.311 Priorities, allocations and allotments.

The programs of the Coast Guard and certain programs of the Federal Aviation Administration are defenserelated programs to which the priorities and allocations regulations apply. Rateable contracts and purchase orders shall contain the clause set forth in DOTPR 12-7.150-3 and the appropriate DO or DX rating (and the appropriate allotment number if the order calls for authorized controlled materials) in accordance with the provisions of DMS (Defense Materials System) Regulation 1 and BDSA Regulation 2. These regulations are available from the Business and Defense Services Administration of the Department of Commerce.

§ 12-1.313 Records of contract actions.

(a) In compliance with the requirements of FPR 1-1.313, each procurement office shall maintain for each procurement exceeding $10,000 a contract file containing a comprehensive record of all pre-award and post-award

actions and other data. Adherence to this policy will require the assembly of either the original or a copy of all documents pertaining to the procurement in a file consisting of one or more folders. It will also require documentation for the record of all understandings, oral agreements, and any other facts or information pertinent to the transaction. It is left to the discretion of the procurement official to determine the manner in which unwritten matters are documented. However, it would be expected, for example, that those of a complex nature would be carefully documented by typewritten "memorandum for the record", while routine data might be recorded by a handwritten notation in the file. Photographs should be employed wherever they will serve to effectively document pertinent contract matters.

(b) Complete documentation will permit ready reconstruction of all stages of the transaction in order to: (1) Support actions taken by various personnel in the procurement cycle.

(2) Provide information for internal management review and for reviews by the General Accounting Office.

(3) Supply data for use in preparing replies to legitimate inquiries.

(4) Furnish essential facts in the event of litigation.

(c) Small purchase records shall be maintained in accordance with FPR Subpart 1-3.6 and DOTPR Subpart 12-3.6.

§ 12-1.315 Use of liquidated damages provisions in procurement contracts.

§ 12-1.315-2 Policy.

(a) Criteria for use. (1) In proposed contracts involving an item where only a portion of the quantity ordered is for immediate programs, and liquidated damages provisions are considered to be necessary, care shall be taken to have the liquidated damages provisions apply only to the urgent quantity.

(2) The use of liquidated damages provisions should never be construed as relieving procurement officials of the obligation of establishing realistic delivery or performance schedules. Realistic delivery or performance sched

ules should be a prerequisite to the use of liquidated damages.

(3) Liquidated damages provisions generally should not be used:

(i) In contracts for supplies or services required for routine administrative purposes.

(ii) In contracts for standard commercial or "shelf items".

(iii) In any contract where time would permit the needs of the Department to be met by termination and reprocurement if the initial contractor defaults.

(iv) In small purchases.

(v) In study, experimental, development, or research contracts, including equipment contracts requiring developmental work.

(b) Rate of assessment. (1) Contracting officers must assure that the rate of liquidated damages stipulated for a given contract is a reasonable forecast of the Government's anticipated damages. A fixed formula, based on percentage of value, shall not be used to establish the rate of damages. The minimum amount of liquidated damages should be based on the estimated cost of inspection and superintendence for each day of delay in completion. In addition, the following factors are examples of matters to be considered in establishing the rate of damages:

(i) The importance of the item in relation to the facility or project for which it is intended.

(ii) The relative importance of the item to the facility or project in the overall program of the Department.

(iii) Any rental of facilities necessitated by the delay in a construction completion date.

(iv) Cost of additional maintenance required on structures being replaced by contract items.

(v) Any unusual damages that can be anticipated.

(2) Unless it is clear that partial delivery will proportionately reduce the extent of probable damages, rates shall not be specified to be applicable to individual units of an item, but rather to quantities of an item or to groups of items which are required for delivery or completion at the same time. Rates should generally be expressed in terms of even dollars per day of delay.

(c) Enforcement. Where liquidated damages provisions are used, they shall be strictly enforced. In making partial or progress payments, deductions for damages should be made on the basis of the actual number of days of delay multiplied by the rate.

(d) Termination. If the contract is terminated, the contractor remains liable for liquidated damages that have accrued. Moreover, on a default termination, liquidated damages continue to accrue even after default, until the Department can reasonably obtain delivery of the supplies or performance of the service. This is in addition to any other rights of the Government to damages under default provisions for the excess costs of reprocuring the supplies or services of the terminated contract.

(e) Remission. An information copy of each submission to the Comptroller General of a recommendation for the remission of liquidated damages shall be forwarded to the Director of Installations and Logistics, OST.

§ 12-1.318 Disputes clause.

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. However, the decision must be that of the contracting officer.

8 12-1.318-50 Contracting officer's decision under the Disputes clause.

When a final decision of the contracting officer concerns a dispute that is or may be subject to the Disputes clause, the following paragraph shall be added to the paragraph contained in FPR 1-1.318-1:

The Department of Transportation Contract Appeals Board is the authorized representative of the Secretary in hearing, considering, and deciding such appeals. The rules of the Department of Transportation Contract Appeals Board are set forth in the Code of Federal Regulations (41 CFR Part 12-60 et seq.).

§ 12-1.318-51 Agreement after appeal is filed.

After an appeal has been filed, contracting agencies are encouraged to seek agreement as to disposition of the controversy. However, such efforts to dispose of a controversy shall not be conducted in lieu of formal Board actions or hearings and shall not result in suspension of processing of an appeal, except as ordered or authorized by the Department of Transportation Contract Appeals Board.

§ 12-1.318-52 Payment after appeal is filed.

In the event of an appeal, the amount determined to be payable in the decision of the contracting officer, less any portion previously paid, normally should be paid in advance of any decision by the Board without prejudice to the rights of either party or the appeal.

§ 12-1.318-53 Implementation of decisions of the Contract Appeals Board.

(a) It is the policy of the Department of Transportation to take prompt action to effect payment in accordance with any decision of the Contract Appeals Board wholly or partially favorable to the appellant. If, however, an Administration believes such decision is not "appropriate for review in court under prevailing statutory and judicial standards", it may recommend that action be taken to seek juIdicial review of the Board's decision. The recommendation shall be made to the DOT General Counsel who shall determine whether or not judicial review of the Board's decision will be sought. In the event that the DOT General Counsel determines that judicial review will be sought, the matter shall be referred to the Department of Justice and the appellant shall be promptly advised that payment in accordance with the Board's decision will not be made.

(b) In cases where the question of entitlement only has been decided by the Board and the matter of amount has been remanded to the parties for negotiation, if agreement is not reached the appellant will be afforded a prompt decision and an opportunity to appeal on the matter of amount.

§ 12-1.320 Subcontractor gifts and kickbacks.

Reports of suspected violations and action being taken shall be furnished to the Director of Installations and Logistics, OST.

§ 12-1.351 Contract number prefixes.

All contracts, exclusive of purchase orders, issued by the Department will be identified by a number or combination of letters and numbers, in accordance with Department Order 4220.1A (set forth in DOTPR Part 12-99).

§ 12-1.352 Industrial security.

(a) Pursuant to Executive Order 10865 (3 CFR, 1959-63 Comp.) an agreement between the Department of Defense and the Department of Transportation was entered into on June 1, 1967, extending regulations prescribed by the Secretary of Defense under the Executive order to apply to protect releases of classified information relating to DOT contracts and releases of other classified information which DOT has the responsibility for safeguarding. The Office of Investigations and Security, OST, has been designated as the Department of Transportation liaison for industrial security matters. The Defense Logistics Agency will perform all cognizant security office functions specified in, and will have the authority and responsibilities prescribed by, Department of Defense Industrial Security Regulations (ISR) (DOD 5220.22R) and Department of Defense Industrial Security Manual (DOD 5220.22M).

(b) Any DOT contract or prospective contract which would require access to classified information by the contractor or any of his employees in the bid, negotiation, award, performance, or termination of the contract, including clearances required for visit purposes, is considered to be a "classified con

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