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who had developed the equipment, with respect to which this authority and thereby either assure to the Gov may be used: ernment the benefit of the techniques, (1) When procurement by negotiatooling, and equipment already ac tion is necessary to keep vital facilities quired by that supplier or avoid undue or suppliers in business or to make delay arising from a new supplier's them available in the event of national having to acquire such techniques, emergency. tooling, and equipment. This excep (2) When procurement by negotiation should not be used to avoid dupli- tion with selected suppliers is necescation of private investment unless sary in order to train them in the furthis duplication would be likely to nishing of critical supplies to prevent result in additional cost to the Gov the loss of their ability and employee ernment.

skills, or to maintain active engineer(c) Limitations. The authority of

ing, research, and development work. this section requires a determination

(3) When procurement by negotiaand findings by the Commandant

tion is necessary to maintain properly which states:

balanced sources of supply for meeting (1) The supplies are of a technical or

the requirements of procurement pro

grams in the interest of industrial mospecial nature requiring a substantial investment or an extended period of

bilization. (When the quanity required preparation for manufacture; and

is substantially larger than the quanti

ty which must be awarded in order to (2) Procurement by formal advertis

meet the objectives of this authority, ing either:

that portion not required to meet such (i) Would be likely to result in addi

objectives will ordinarily be procured tional cost to the Government by

by formal advertising or by negotiareason of duplication of investment; or

tion under another appropriate negoti(ii) Would result in duplication of

ation exception.) necessary preparation which would

(c) Limitations. The authority cited unduly delay the procurement.

in this section shall not be used unless 8 12-3.251 Purchases in the interest of na.

and until the Commandant has deter

mined that: tional defense or industrial mobiliza

(1) It is in the interest of national tion.

defense to have a particular plant, (a) Authority. Pursuant to 10 U.S.C. mine, or other facility or a particular 2304(a)(16), purchases and contracts producer, manufacturer, or other supmay be negotiated if "he (the Com plier available for furnishing supplies mandant) determines that (1) it is in or services in case of national emerthe interest of national defense to gency and negotiation is necessary to have a plant, mine, or other facility, or that end; or a producer, manufacturer or other (2) The interests of industrial mobisupplier, available for furnishing prop lization in the case of a national emererty or services in case of a national gency would be subserved by negotiaemergency; or (2) the interests of in- tion with a particular supplier; or dustrial mobilization, in the case of (3) The interest of national defense such an emergency, or the interests of in maintaining active engineering, renational defense in maintaining active search and development would be subengineering, research, and develop- served by negotiation with a particular ment, would otherwise be subserved.” supplier.

(b) Application. The authority cited (d) Reporting requirements. Reports in this section may be used to effectu- required by section 2304(e) of 10 ate such plans and programs as may U.S.C. to be made to the Congress on be evolved under the direction of the May 19 and November 19 of each year Commandant to provide incentives to will be made by the Chief, Procuremanufacturers to maintain and keep ment Division (Commandant (FSP)), active, engineering and design staffs by May 1 and November 1 of each year and manufacturing facilities available to the Department of Transportation, for maximum production. The follow- Director of Installations and Logistics, ing are illustrative of circumstances TAD-60, of the purchases and con

8 12-3.305-50 Format for D&F for author.

ity to negotiate a contract.

DEPARTMENT OF TRANSPORTATION

(Name of Administration)

DETERMINATION AND FINDINGS

tracts made under 10 U.S.C. 2304(a)(16) since the date of last reporting.

(1) Reports shall contain the following information:

(i) Name of contractor.

(ii) Dollar amount of contract (including amendments).

(iii) Brief description of the work required to be performed under the contract. (When necessary, because of the national security, the word “classified" may be used in lieu of description.)

(2) Negative reports are not required.

Authority to negotiate a contract under

EEEE

(insert authority)

FINDINGS 1. The proposed contract provides for the procurement of (describe here the nature and scope of the work to be performed, including estimated cost).

2. (In this and any subsequent paragraphs, set forth the facts and circumstances that clearly and convincingly establish that formal advertising would not be feasible and practicable for the procurement.)

8 12-3.252 Negotiation of construction

contracts for work to be performed in the United States, its possessions and

Puerto Rico. (a) Authority. Section 2304(a) (1), (2), (3), (10), (11), (12), or (15) of 10 U.S.C. shall be cited as authority for Coast Guard procurement under this section. The appropriate code provi. sion shall be cited in the contract as authority for the negotiation.

(b) Limitation. Coast Guard contracts to be performed under this section may not be negotiated pursuant to 10 U.S.C. 2304(a)(6).

DETERMINATION Upon the basis of these findings, I hereby determine that the proposed contract may be negotiated without formal advertising pursuant to

- (insert authority). Dated:

Subpart 12-3.3-Determinations,

Findings and Authorities

8 12-3.305-51 Format for D&F for use of

cost reimbursable or fixed-price incen-
tive type contracts.
DEPARTMENT OF TRANSPORTATION

(Name of Administration)

DETERMINATION AND FINDINGS
Authority to use a -

(insert type) contract.

$ 12-3.301 General.

The determinations and findings required to be made under FPR Part 1-3 by the Coast Guard shall cite the appropriate section of Chapter 137 of title 10 of the United States Code. Determinations and findings of all other Administrations shall cite the appropriate section of title 41 of the United States Code.

FINDINGS •1. The proposed contract provides for the procurement of

- (brief de scription of supplies or services) at an estimated cost of $--

2. (In this and any subsequent paragraphs set forth the facts that show why it is impracticable to secure supplies or services of the kind or quality required without the use of such type of contract, or that such method of contracting is likely to be less costly than other methods.)

DETERMINATION Upon the basis of these findings, I hereby determine that it is impracticable to secure supplies or services of the kind or quality required without the use of (insert type of contract). (Alternate: *** I hereby determine that the use of (insert type of contract) is likely to be less costly than other methods.) (When a cost-plus-a-fixed fee is involved, the following finding is also to be made:)

Pursuant to (insert “41 U.S.C. 254(b)” or “10 U.S.C. 2306(d),” as applicable), I hereby determine that the estimated cost of the contract, exclusive of the fee, is $---, that the fee in the amount of $--- is ---% of the estimated cost, exclusive of fee, and that the fee is within statutory and administrative limitations. Dated:

tract shall not exceed 50 percent of the total estimated cost of the procurement. Amendments to letter contracts to accomplish new procurement are subject to the same limitations as new letter contracts.

(c) Content. In addition to the requirements in FPR 1-3.408(d), the letter contract shall also:

(1) Incorporate, by reference or otherwise, all clauses required by statute, FPR, DOTPR, and optional standard and special clauses determined to be applicable.

(2) State that the definitive contract shall contain all provisions under paragraph (c)(1) of this section.

(3) Contain an overall price ceiling or a maximum ceiling on fee, where a quoted price has been received and it is considered appropriate to limit the Government's ultimate liability.

Subpart 12-3.4—Types of Contracts

8 12-3.408 Letter contract.

(a) Request for approval. The use of letter contracts must be approved in advance on a case-by-case basis by the head of the procuring activity, and variations from the limitations set forth in paragraph (b) of this section must be approved by the head of the procuring activity. The request for approval must state: The necessity and advantage to the Government in issuing the letter contract; why no other type of contract is suitable; name and address of the proposed contractor; duration of proposed letter contract in number of days from date of execution; amount of letter contract and estimated amount of definitive contract showing source and citation of funds with statement that funds are avail. able; the estimated delivery date or dates and the proposed type of definitive contract.

(b) Limitations. In addition to the limitations prescribed in FPR 13.408(c), the following apply to, and shall be expressly stated in, each letter contract:

(1) The period of effectiveness for the letter contract, including a specific date when definitization will be completed. This date shall not be later than the first to occur of the following:

(i) The expiration of 120 days from the date of the letter contract; or

(ii) The date by which 40 percent of the performance of the work will be completed.

(2) The maximum liability of the Government stated in the letter con

§ 12–3.450 Delivery orders.

(a) Except as to specialized procurements for which other instructions have been issued, delivery orders shall be used without monetary limitation for ordering supplies and services (1) under an established contract: Provided, The order is issued in accordance with the terms and conditions of the contract and the order refers to the particular contract involved, (2) from another Government agency whether or not a contract number has been assigned.

(b) When the delivery order is issued to another Government agency and the precise extent of the work to be done is not known at time of issuance, an estimated delivery order may be issued. Each estimated delivery order shall contain a provision reading substantially as follows:

NOTICE: Funds are available in the estimated amount stated below. If at any time the amount to be vouchered under this order is expected to exceed the estimated amount, withhold performance and immediately notify the Contracting Officer.

8 12-3.451 Letters of intent.

Letters of intent shall not be used.

33-139

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Subpart 12-3.6—Small Purchases

8 12-3.603-2 Data to support small pur

chases. DOT Form F 4230.1 titled "Small Purchase Summary” may be used to satisfy the foregoing documentation requirements.

8 12-3.650 Purchase orders.

§ 12-3.650-1 “Minimum billing" quota

tions. Occasionally an item can be obtained only from a supplier who quotes a minimum order price or a minimum order quantity, which either unreasonably exceeds the agency's needs or results in an unreasonable price for the quantity required. If practicable before placing the order the requiring activity should be informed in such cases of all facts regarding the quotation and consideration should be given to increasing the quantity, consolidation of orders, or other appropriate action. The file shall be documented to show the final action taken in such cases.

where prices are known to be competitive but exact prices are not known.

(c) Procedures. A realistic "Not To Exceed" limitation shall be placed on the order which shall be stated in the notice to supplier provision in the blank space provided. This amount shall be obligated subject to adjustment when the firm price is established. Each unpriced purchase order shall contain the following provision:

NOTICE TO SUPPLIER: This is a firm order if the total price does not exceed the amount of $--- If the amount to be invoiced will exceed the amount stated below, or if you cannot furnish the work described in exact accordance with the description and delivery schedule set forth herein, withhold performance and immediately notify the Contracting Officer giving your quotation or proposed substitution or changes. In no event will the total amount paid under this order exceed the amount stated unless and until the order has been amended in writing and signed by the Contracting Officer. The contracting officer or his designated representative shall certify that the invoiced price is fair and reasonable and process the invoice for payment. Suitable local records and controls of outstanding unpriced purchase orders shall be maintained to assure regular followup with suppliers until the order is firmly priced. These records should include any information available to support the fairness and reasonableness of the proposed monetary limitation. If the firm price exceeds the “not to exceed" price and the contracting officer determines, nevertheless, that such purchase be made from the supplier, the order shall be amended accordingly: Provided, That in no event may the amount of the order exceed $10,000. If the firm price does not exceed the “not to exceed” price, the order should not be amended for the sole purpose of changing the estimated price to a firm price.

8 12–3.650-2 Unpriced purchase orders.

(a) General. An unpriced purchase order is an order for supplies or services the price of which is not firmly established at the time of issuance of the order. Such orders shall contain a “Not To Exceed" provision. The contracting officer shall assure that suppliers receiving unpriced purchase orders are carefully selected.

(b) Conditions for use. An unpriced purchase order may be used only when all of the following conditions are present:

(1) The purchase will not exceed $10,000, and

(2) It is impractical to obtain pricing in advance of issuance of the purchase order, and

(3) The procurement is for (i) repairs to equipment requiring disassembly to determine the nature and extent of such repairs, (ii) sole source material for which cost cannot be readily established, or (iii) supplies or services

$ 12-3.650-3 Estimated purchase orders.

(a) General. An estimated purchase order is an order of $2,000 or less for supplies or services the price of which is not firmly established at the time of issuance of the order but which, unlike the unpriced purchase order, provides for approval and payment of

billed prices without referral to the material receipt purposes. Receiving contracting officer. Such orders may reports shall be accomplished immedibe issued when it is not practical to ately upon receipt and acceptance of obtain a firm price as when, for exam- material to assure expeditious payple, the need is urgent or the vendor is ment of orders and to obtain prompt other than a local source and the ad payment discounts. ministrative cost to secure a firm offer would be disproportionate to the value 812-3.651 Service Contract Act of 1965. of the order.

(b) Preparation of order. The word 812-3.651-1 General. “Estimated,” the total price, and a

The Service Contract Act of 1965 approvision reading substantially as fol- plies, with certain exceptions, to Fedlows shall be included on the order:

eral contracts whose principal purpose NOTICE TO SUPPLIER: This is a firm order if is to furnish services through the use the amount to be invoiced does not exceed of service employees. The Act applies the estimated amount stated by 10 percent.

without dollar limitation, but different In such cases, submit your invoice to the

contract clauses are required dependPaying Office. If the amount to be invoiced will exceed the stated limitations, withhold

ing upon whether the contract price

exceeds $2,500 in performance and immediately notify the

accordance with Contracting Officer. In no event will the FPR Subpart 1-12.9. total amount paid under this order exceed the stated amount by 10 percent unless and

§ 12-3.651-2 Purchase order transactions. until the order has been amended in writing

The Act applies to contracts made and signed by the Contracting Officer.

through use of purchase order forms 8 12-3.650-4 List of vendors.

if such contracts have as their princiEach procurement office shall estab

pal purpose the furnishing of services lish such lists of vendors as are neces

through the use of service employees sary for recurring requirements to

and if such contracts are not otherassure access to adequate sources of

wise exempt. The clause prescribed in supply. Where the number of firms on

FPR 1-12.904-2 shall be included in a list is considered excessive, the list

purchase orders subject to the Act's may be reduced by any method which

coverage. will promote competition commensurate with the dollar value of the pur

§ 12-3.652 Fast payment procedures. chase to be made. If a rotation method

8 12–3.652-1 General. is used, the vendors known to regularly submit the lowest price shall be so The procedure is designed to simplilicited.

fy the handling and payment of small

purchases. It provides for payment for $ 12-3.650-5 Follow-up.

supplies based on the vendor's submisEach procurement office shall estab- sion of an invoice which constitutes a lish and maintain a simple and effec- representation that ordered supplies tive followup system. It should permit

have been delivered in accordance maximum latitude for the exercise of with the provisions of the purchase initiative and judgment in the admin. order. The vendor agrees, by acceptistration process and be designed to ance of the order, to replace, repair, or assure that, to the maximum practica. correct supplies not received by the ble extent, purchase orders are com

consignee at destination, damaged in pleted in accordance with their terms.

transit, or not conforming to the The system may use copies of pur

order. chase orders, one or more cards, or the

8 12-3.652-2 Conditions for use.

(a) Except as set forth in paragraph § 12-3.650–6 Inspection and acceptance.

(b) of this section, the fast payment When inspection and acceptance are procedure should be used to the maxito be performed at destination, ad- mum extent practicable, provided its vance copies of the purchase order use is consistent with the other condishall be furnished to consignee(s) for tions of the procurement, when all of

like.

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