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following 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 eligibility 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. § 1-1.509 Preservation of records.

Executive agencies shall preserve, for enforcement or report purposes, at least one executed copy of any representation and completed Standard Form 119 (or statement in lieu of form), together with a record of any other pertinent data, including data as to action taken.

Subpart 1-1.6-Debarred and
Ineligible Bidders

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Healey Public Contracts Act (41 U.S.C. 35a). It is directly applicable to executive agencies in negotiated or advertised purchasing and in contracting for the 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.

§ 1-1.602 Establishment and maintenance of a list of firms or individuals debarred or ineligible.

(a) Each executive agency shall establish and maintain, on the bases contained in section 1-1.603, a consolidated list of firms and individuals to whom contracts will not be awarded and from whom bids or proposals will not be solicited as provided in section 1-1.604.

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

(1) The names of those firms 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.

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

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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 5.6(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 willful 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) Eight-Hour Law (40 U.S.C. 321). (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).

(d) Those the executive agency determines to debar administratively for any of the causes and under all of the appropriate conditions listed in section 1-1.605.

(e) 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.

(f) Those found by the Secretary of Labor ineligible to be awarded contracts for the reason that they do not qualify as "manufacturers" or "regular dealers" within the meaning of section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)).

§ 1-1.604 Treatment to be accorded firms or individuals in debarred or ineligible status.

Firms or individuals listed by the agency as debarred or ineligible shall be treated as follows:

(a) Total restrictions. Contracts shall not be awarded to firms or individuals that are listed on the basis of section 1-1.603 (a), (b), or (d), or to any firm, corporation, partnership, or association in which such firm or individual has 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 even when a firm or individual is listed as debarred on the basis of section 1-1.603(d).

(b) Restrictions under statutes designated in the regulations of the Secretary of Labor. A contractor listed on the basis of section 1-1.603 (c), or any firm, corporation, partnership, or association in which such contractor has a controlling interest, shall be ineligible for a period of three years (from the date of publication by the Comptroller General) to receive any contracts subject to any of the statutes listed in section 1-1.603 (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 firms or individuals listed on the basis of section 1-1.603, 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) Ineligibility restrictions of the Walsh-Healey Act. Contracts shall not be awarded to firms or individuals in any amount exceeding $10,000 for those materials, supplies, articles, or equipment with respect to which the firm or individual has been found to be ineligible to be awarded a contract by the Secretary of Labor, as provided in section 1-1.603 (f). However, firms or individuals listed on this basis may, in the discretion of each executive agency, be

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(1) Conviction for commisison of a criminal offence as an incident to obtaining a contract or in an attempt to obtain a contract or in the performance thereof. (2) Conviction under the Federal Antitrust Statutes arising out of the submission of bids or proposals.

(3) Violation of contract provisions, as set forth below, of a character which is regarded by the agency involved to be so serious as to justify debarment action

(i) Willful failure to perform in accordance with the specifications or within the time limit provided in the contract.

(ii) A history of unsatisfactory performance of one or more Government contracts.

(iii) Violation of the contractual provision against contingent fees.

(iv) Acceptance of a contingent fee, which is paid in violation of contractual provision against contingent fees.

(4) Debarment by some other executive agency.

(b) Conditions.

(1) Debarment for any of the causes of (a) shall be made only upon approval of the head of the executive agency or his duly authorized representative.

(2) Causes (a) (1) and (2) shall have been established by criminal conviction by a court of competent jurisdiction. In the event appeal taken from such conviction results in reversal of conviction, the debarment shall be removed if the bidder so requests. Criminal conviction for the above mentioned offenses does not necessarily require that the firm or individual be debarred, since

the decision to debar is still within the discretion of the executive agency concerned. The seriousness of the offense, the civil satisfaction received by the Government or available to the Government, and all mitigating factors should be considered in making the determination to debar.

(3) Cause (a) (3) shall be established by evidence which the executive agency determines to be clear and convincing.

(4) Debarment for cause (a) (4) shall be made on the same bases as provided for whichever of causes (a) (1) to (3) is appropriate, and may be based entirely upon the record of facts obtained by the original debarring agency, or upon a combination of additional facts with the record of facts of the original debarring agency.

(5) The debarment shall be for a reasonable, definitely stated period of time commensurate with the seriousness of the offense.

(6) The firm or individual shall be given written notice of the debarment or of the intent to debar, except in the case of cause (a) (4). The notice shall state, as a minimum, the period of the proposed debarment, including effective dates; the reasons for debarment, including a statement of the specific instances of dereliction; and shall provide reasonable opportunity for the contractor to present information for consideration upon his behalf. When the contractor does present such information he shall be given written notice of the final decision, and, if the decision provides for debarment, the period and effective dates thereof. § 1-1.606 Agency procedure.

Each executive agency shall:

(a) Establish internal procedures and methods for giving effect to this Subpart 1-1.6.

(b) Notify the General Services Administration (GSA) of the name and address of its central office where debarment information should be sent.

(c) Furnish to GSA at time of issuance a copy of the notice of debarment on those debarments made under provisions of section 1-1.605(a), or the Buy American Act, and of any removals from such debarments.

(d) Check the list of debarred bidders furnished by GSA, and consider firms or

individuals listed thereon for inclusion upon its own list, in accordance with the provisions of this Subpart 1-1.6.

(e) As needed, request from GSA a copy of the notice on any debarment case appearing on the list herein provided to be compiled and distributed by GSA. If desired, direct inquiry concerning any debarment case may be made of the agency which originated the action.

(f) Make its list available to all contracting officers within the agency.

[24 F.R. 1933, Mar. 17, 1959, as amended at 24 F.R. 4454, June 2, 1959]

§ 1-1.607 General Services Administration responsibility.

In addition to the agency procedure provided in section 1-1.606, GSA will:

(a) Compile and distribute to the designated central office address of each agency a listing of the administrative debarments and debarments under the Buy American Act taken by the agencies, including the basis of action, in order that each executive agency may be informed of actions taken by each other agency. In general application, this listing will be for information purposes only and it is not intended to take the place of, or be an addition to, the lists maintained by the various agencies.

(b) Furnish to any agency, on specific request, a copy of the notice reflecting the basis for debarment action taken by another agency for causes contained in section 1-1.605(a) or under the Buy American Act.

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§ 1-1.701-1 Small business concern (for Government procurement).

(a) (1) General definition. Except as provided in (2) and (3) of this § 1-1.7011(a), a small business concern for the purpose of Government procurement is a concern, including its affiliates, which is independently cwned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and (i) its number of employees does not exceed 500 persons, or (ii) it is Icertified as a small business concern by SBA. ("Concern" means any business entity organized for profit with a place of business located in the United States, its possessions, and Puerto Rico, including but not limited to, an individual, partnership, corporation, joint venture, association, or cooperative.)

(2) Specific industry definitions. Unless certified as a small business concern by SBA, in addition to being independently owned and operated, and not dominant in its field of operation, a small business concern in order to qualify as such must meet special criteria in the following industries:

(i) Construction industry. For the purpose of bidding on construction contracts, any concern is small if its average annual receipts for the preceding three fiscal years do not exceed $5,000,000; except that if the concern is located in Alaska, such receipts do not exceed $6,250,000. ("Annual receipts" means the annual receipts, less returns

and allowances, of a concern and its affiliates.)

(ii) Food canning and preserving industry. For the purpose of bidding on contracts for food canning and preserving, any concern is small if its number of employees does not exceed 500 persons exclusive of agricultural labor as defined in the Federal Unemployment Tax Act, 26 U.S.C. 3306(k).

(iii) Petroleum refining industry. For the purpose of bidding on contracts for petroleum, other than lubricants and miscellaneous petroleum products, any concern is small if its number of employees does not exceed 1,000 persons and it does not have more than 30,000 barrels-per-day crude-oil capacity from owned and leased facilities. ("Crudeoil capacity" means the maximum daily average crude throughput of a refinery in complete operation, with allowance for necessary shutdown time for routine maintenance, repairs, etc. It approximates the maximum daily average crude runs to stills that can be maintained for an extended period.)

(iv) Aircraft equipment industry. For the purpose of bidding on the aircraft equipment set forth below, any concern is small if its number of employees does not exceed 1,000 persons:

(A) Airframes and structural components.

(B) Aircraft propellers and hubs.
(C) Wheel and brake systems.
(D) Jet engines.

(E) Fuel tanks.

(F) Aircraft hydraulic systems.
(G) Aircraft vacuum systems.
(H) Aircraft air-conditioning.

(I) Heating and pressurizing equipment.

(J) Fire control systems.
(K) Flight instruments.

(L) Flight simulators (except small cockpit trainers).

(M) Aircraft de-icing systems.

(v) Air transportation industry. For the purpose of bidding on air transportation contracts, any concern is small if its number of employees does not exceed 1,000 persons.

(vi) Trucking and warehousing industry. For the purpose of bidding on contracts for trucking, warehousing. packing and crating, any concern is small if its annual receipts are $3,000,000 or less, except that if the concern is located in Alaska, such receipts are

$3,750,000 or less. No such concern, however, will be denied small business status for the purpose of Government procurement solely because of its relationship with an interstate van line, proIvided that its annual receipts have not exceeded $3,000,000 during the concern's most recently completed fiscal year, and provided further no more than 50 percent of such annual receipts are directly attributable to the concern's relationship with an interstate van line.

(3) Labor surplus area small business concerns. If a concern qualifies as a labor surplus area concern (see § 1-1.801), the pertinent size standard (i.e., number of employees or annual receipts) is increased by 25 percent.

(b) Small business non-manufacturer. Any concern which submits a bid or offer in its own name, other than for a construction or service contract, but which proposes to furnish a product not manufactured by itself, is deemed to be a small business concern when:

(1) It is a small business concern within the meaning of § 1-1.701-1(a), and

(2) In the case of Government procurement reserved for or involving the preferential treatment of small business concerns (including equal low bids), such non-manufacturer shall furnish in the performance of the contract products (i) of a small business manufacturer or producer, and (ii) which are manufactured or produced in the United States, its possessions, or Puerto Rico. However, if the goods to be furnished are wool, worsted, knitwear, duck, webbing and thread (spinning and finishing), non-manufacturers (dealers and converters) shall furnish such products which have been manufactured or produced by a small weaver (small knitter for knitwear) and, if finishing is required, by a small finisher.

§ 1-1.701-2 Affiliates.

Business concerns are affiliates of each other when either directly or indirectly (a) one concern controls or has the power to control the other, or (b) a third party controls or has the power to control both. In determining whether concerns are independently owned and operated and whether or not affiliation exists, consideration shall be given to all appropriate factors including common ownership, common management, and contractual relationships.

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