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territories, Puerto Rico and Canada. Offices which may wish to let classified contracts for performance outside the United States, its territories, Puerto Rico or Canada shall consult with their appropriate security staff.


tract” subject to the procedures of this section, even though the contract document itself is unclassified.

(c) All proposed procurements shall be reviewed specifically to determine if access to classified information will be required by prospective contractors during the solicitation period or by a contractor at any time in the performance of the contract. If access to classified information will be required during the solicitation period, the security staff of the headquarters of the Administration, as designated in DOT Order 1640.4, dated 12/12/72 shall be advised immediately and furnished the list of firms to be solicited. Initiations for bid or requests for proposals shall not be issued until notification has been received from the appropriate security staff that the firms to be solicited have a valid facility security clearance. If access to classified information will not be required during the solicitation period but will be required during the performance of the contract, the invitation for bids or requests for proposals shall so state, and award shall only be made after the facility security clearance of the proposed contractor has been verified and approved by the appropriate security staff.

(d) Immediately upon the award of a classified contract, or in connection with precontract negotiations, if appropriate, the contracting officer shall furnish a copy of DD Form 254, Contract Security Classification Specification, to the prime contractor.

(e) Any DOT contract, the performance of which will require access to classified information by the contractor or any of his employees, shall contain a security requirements clause. For classified contracts of the type cited in this regulation the Military Security Requirements clause as set forth in this regulation shall be used. Other types of classified contracts shall contain the appropriate Military Security Requirements clause of Section VII of ASPR.

(f) The Industrial Security Program encompassed by the publications cited in paragraph (a) of this section applies only to contracts involving access to classified information which are performed within the United States, its

8 12-1.353 Variation in quantity.

(a) To the extent that a variation in quantity is caused by any of the conditions specified in the Variation in Quantity clause at FPR 1-7.102-4, the varied quantity may be accepted only to the extent specified in the contract. The Extent of Quantity Variation clause in DOTPR 12-7.102-450, or a substantially similar clause, shall be used for this purpose. The acceptable variation stated in the Extent of Quantity Variation clause shall be stated as a percentage of the required quantity, and may be an increase, a decrease, a combination of both. There should be no standard or usual percentage or variation. The variation in quantity permitted in any procurement should be based upon the normal commercial practices of the particular industry for the particular items, and the permitted percentage should be no larger than is necessary to afford a contractor reasonable protection against the conditions specified in the Variation in Quantity clause. In no event may the acceptable variation exceed plus or minus 10 percent. The clause set forth in DOTPR 12-7.102-450 may be included in the contract only when one or more of the conditions specified in the Variation in Quantity clause is foreseeable at the time of solicitation in the case of an advertised procurement, or at the time of award in the case of a negotiated procurement.

(b) Consideration shall be given to the quantity to which the percentage variation applies. For example, when it is contemplated that delivery will be made to multiple destinations and it is desired that the quantity variation extend to the item quantity for each destination, this requirement must be set forth with particularity. Similarly, when it is desired that the quantity variation extend to the total quantity of each item and not to the quantity for each destination, it may be desira

ther design or engineering effort by the end item contractor in respect to the component is unlikely to be required.

(5) Whether any problems of quality control and realibility of the component can be resolved without requiring effort by the item contractor.

(6) Whether breakout can be accomplished without jeopardizing delivery requirements of the end item.

(c) Support parts which are to be stocked as separate items should be considered for separate procurement, as should such required services as installation services or contractor-conducted instruction courses. Component items of an equipment system (such common test equipment) which are to be physically separate from the basic equipment and which will require no modification or installation as an integral part of a more complex system or component, shall be procured separately unless separate procurement is found to be not economical or practicable.


ble to express a percentage limitation for each destination to prevent unrealistic distribution of any increase or decrease.

& 12-1.354 Standards of conduct.

All government personnel engaged in procurement and related activities shall conduct business dealings with industry in a manner above reproach in every respect. Transactions relating to expenditure of public funds require the highest degree of public trust to protect the interests of the Government. While many Federal laws and regulations place restrictions on the action of government personnel, the latter's official conduct must, in addition, be such that the individual would not be reluctant to make a full public disclosure thereof. DOT regulations on Employee Responsibilities and Conduct are set forth in the Department of Transportation regulations (49 CFR Part 99).

8 12-1.356 General procurement policy

Departmental orders.
DOT policy on selected subjects re-
lated to procurement matters is set
forth in the Departmental orders con-
tained in DOTPR Part 12-99.

Subpart 12-1.4-Procurement
Responsibility and Authority

8 12-1.355 Breakout of component items.

(a) Consideration shall be given to the breakout of component items (including services) of an end product for separate procurement whenever the possiblility exists that such breakout would be both economical and practicable.

(b) Breakout decisions will be based largely on the degree and significance of the probable risks to quality, performance, reliability, timely delivery of the end item, and on the estimated overall cost savings. The following fac. tors should be considered in determining whether to procure component items of an end product separately;

(1) In the case of sole source procurement of the end product, whether there is another source capable of supplying the component.

(2) Whether breakout will result in significant net cost savings.

(3) Whether breakout would cause over-fragmentation of the end item, and thereby materially impede administration and performance of the end item contract and identification of the cause of any end item failure.

(4) Whether the design of the component (and the design of the end item insofar as it will affect the component) is sufficiently stable that fur

§ 12-1.402-50 Contracting officer's repre

sentatives. (a) A contracting officer may designate Government personnel to act as his authorized representatives for such functions as inspection, approval of shop drawings, testing, approval of samples and other functions of a technical nature not involving a change in the scope, price, terms or conditions of the contract or order. Such designation shall be in writing and shall contain specific instructions as to the extent to which the representative may take action for the contracting officer, but will not contain authority to sign contractual documents. The responsibilities and limitations of the contracting officer's representatives may be set forth in the contract or in

Subpart 12-1.6—Debarred, Suspended, and Ineligible Bidders

a separate letter, a copy of which shall be furnished to the contractor.

(b) A person assigned to and performing his primary duty within a procurement office, and who is under the supervision of a contracting officer, does not require designation as a representative to perform his assigned duties. Such a person is considered to be an employee of the contracting officer, acting in his behalf and as such has the authority to perform acts as assigned by the contracting officer. The contracting officer cannot, with out delegating contracting officer authority, authorize his employees to sign any contract document or letter where the signature of a contracting officer is required.

8 12-1.602 Establishment and mainte

nance of a list of concerns or individuals debarred, suspended, or declared ineligible. The Federal Aviation Administration is delegated authority to compile, print, and distribute on a Departmentwide basis, the Department of Transportation Consolidated List of Debarred, Ineligible, and Suspended Contractors. Refer to Departmental Order DOT 4200.5 dated January 15, 1968, contained in DOTPR 12-99.

8 12-1.450 Responsibility of procurement

personnel to question requirements

and reaffirm their validity. (a) Procurement personnel have a responsibility to question any contemplated procurement action which appears inconsistent with their knowledge of commodities, markets, prices, and normal processes of doing business, or inconsistent with the authority of the requisitioner.

(b) When the award of a proposed procurement has been prolonged over an extended period of time or when during the processing of the procurement, matters are disclosed which give rise to questioning the magnitude of or necessity for the requirement, procurement personnel should reaffirm the validity of the requirement before award of contract.

8 12-1.604-1 Procedural requirements re

lating to the imposition of debarment. (a) Administrative debarment by the Department shall be initiated within each Administration or OST in accordance with the procedures set forth in FPR 1-1.604-1. The written notice required by FPR 1-1.604-1 shall be signed by the head of the agency. Where no hearing on the basis of either oral testimony or a written statement is requested by the concern or individual sought to be debarred, debarment may be imposed by the head of the agency and shall be applicable to the entire Department. Where a hearing is properly requested, the debarment, if any, shall be imposed by the Secretary upon recommendation of the Chairman of the Department of Transportation Contract Appeals Board (DOTCAB), and shall be similarly applicable to the entire Department.

(b) The written notice of proposed debarment to be furnished in accord. ance with FPR 1-1.604-1 shall, in addition to the requirements specified therein, apprise the concern or indi. vidual that if such party desires to present information, either in person or in writing, in opposition to such action, at a hearing, (1) a request therefor is to be made to the Chairman of the DOTCAB by that party within 20 days following receipt of the notice of the proposed debarment, and (2) the request for a hearing is to be accompanied by a statement setting forth the grounds upon which the proposed debarment will be contested. In

Subpart 12-1.5—Contingent Foos

8 12-1.508-3 Misrepresentation or viola

tions of the covenant against contingent fees. The views of the Office of the General Counsel, OST, shall be obtained prior to the referral of a case to the Department of Justice.

1.604-1(b) for a notice of proposed debarment.

8 12-1.605 Suspension of bidders.

Where a suspension is effected by the Department, it shall be invoked by the Secretary upon recommendation of the General Counsel, OST.

addition, the notice shall include a notification that debarment, if imposed, shall be applicable throughout the Department. The notice shall be sent by registered or certified mail, return receipt requested, to the last known address of the concern or individual, but where actual or personal delivery is not effected by the Post Office, a debarment may be imposed by the head of the agency; but any such debarment shall, upon the submission of an appropriate application, be subject to reopening and in such event a hearing shall be accorded with respect to the debarment. A copy of each such notice shall be sent to TAD-60.

(c) Hearings requested in connection with debarment proceedings as provided in FPR 1-1.604-1(b) shall be conducted before the DOTCAB. An opportunity shall be afforded the concern or individual to appear with witnesses and counsel to show cause why such concern or individual should not be debarred. Where a concern or individual requests a hearing and fails to appear, the DOTCAB shall consider the case on the basis of the records and information made available to it. In any instance where a party has requested a hearing, he may elect to forego the submission of oral testimony and may submit a written statement (together with any information relating thereto) in opposition to the proposed action. Hearings shall be held by the DOTCAB within 30 days after receipt of the request for a hearing, unless the Chairman of the DOTCAB grants additional time. The Chairman shall include in his recommendation to the Secretary whether or not debarment is warranted under the particular circumstances and, where debarment is warranted, a recommended period thereof.

(d) When debarment is imposed by the head of the agency, or by the Secretary, the concern or individual shall be notified of the decision and of the period during which such debarment shall be effective. If a proposed debarment is not upheld by the Secretary, the concern or individual shall be so notified. Notice as to the imposition of a debarment shall be furnished to the concern or individual in the same manner as provided in DOTPR 12

8 12-1.606 Agency procedure.

(a) Each administration and OST, as applicable, shall furnish the notifications to GSA required by FPR 11.606(c), for debarments initiated by it, and shall concurrently forward a like copy to (1) Federal Aviation Administration, Logistics Service, Contracts Division, Management and Services Branch, ALG-380 for inclusion on or removal from the Department list, and (2) the Director of Installations and Logistics, OST, for information.

(b) Requests for standard distribution and for individual copies of the Department Consolidated List shall be made to the Federal Aviation Administration, Logistics Service, Contracts Division Procurement Management and Services Branch, ALG-380, Washington, D.C. 25091.

Subpart 12-1.7—Small Business


8 12-1.701-1 Small business concern (for

Government procurement). (a) When the solicitation is for a manufactured product classified within an industry set forth in FPR 11.701-1(h), and small business set-aside procedures are utilized, a size standard reading substantially as follows shall be included in the solicitation: The small business employment size standard prescribed for this procurement is not more than--_1 employees, except when the concern is a small business non-manufacturer in which case the employment size standard is not more than 500 employees.

(b) When the solicitation is for a manufactured product that is not classified within an industry set forth in FPR 1-1.701-1(h), and small business set-aside procedures are utilized, a size

'Insert "750", "1,000", or "1,500", as appropriate.

standard reading substantially as follows shall be included in the solicitation:

The small business employment size standard prescribed for this procurement is not more than 500 employees.

(c) Similar language shall be used to prescribe other size standard criteria.

§ 12-1.704 Agency program direction and

operation. Each Administration of the Department will establish and maintain a strong and viable small business program, designed to further the small business policies as set forth in FPR 11.702.

$ 12-1.704-50 Small business assistance

officer. Each administration, will designate an individual as the Administration's small business assistance officer. The small business assistance officer will be responsible, either on a full time basis or as a collateral duty, for the establishment, implementation and execution of the small business program of his administration. He will be the central point of contact within his administration for inquiries concerning the small business program such as from industry, the Small Business Administration (SBA), the Congress or the Office of the Secretary of Transportation. His duties shall include developing a plan of operation to increase the share of contracts awarded to small business by his Administration.

signment shall in no way relieve the individual from full responsibility for effectively accomplishing the activity's small business program requirements.

(b) In larger offices, where practical, the small business specialist shall not be the contracting officer nor an individual under the supervision of a contracting officer. He shall be given the authority to exercise independent judgment in his areas of responsibility. In small offices the assignment of the small business specialist should promote maximum effectiveness within the capabilities of the office.

(c) The small business specialist appointed pursuant to paragraph (a) of this section shall perform such of the following duties as are determined by the administration to be appropriate for his procurement office:

(1) Maintain a program designed to locate capable small business sources for current and future procurements;

(2) Coordinate inquiries and requests for advice from small business concerns on procurement matters;

(3) Review proposed solicitations for supplies and services, assuring that small business concerns will be afforded an equitable opportunity to compete, and as appropriate initiating recommendations for small business setasides;

(4) Take action to assure the avail. ability of adequate specifications and drawings, when necessary, to obtain small business participation in a procurement;

(5) Review proposed procurements for possible breakout of items suitable for procurement from small business concerns;

(6) Advise small business concerns with respect to the financial assistance available under existing laws and regulations and assist such concerns in applying for financial assistance;

(7) Participate in determinations concerning the responsibility of a prospective small business contractor;

(8) Participate in the evaluation of a prime contractor's small business subcontracting programs;

(9) Assure that adequate records are maintained, and accurate reports prepared, concerning small business participation in the procurement program;

§ 12--1.704-51 Small business specialists.

(a) A small business specialist shall be appointed by name, in writing, for each procurement office, to operate on either a full time or collateral duty basis. Only those individuals possessing the necessary business acumen, knowledge of the Department's procurement policies and procedures, training and background to accomplish effectively the objectives of the small business program shall be considered for appointment. In any instance where the duty of a small business specialist is on a part-time basis, the appointment shall clearly indicate that the part-time nature of the as

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