The numbering system permits identification of every unit. The first digit represents the chapter number allocated to each agency, followed by a dash. This is followed by the part number which may be one or more digits followed by a decimal point. The numbers after the decimal point represent, respectively, the subpart, section (in two digits), and, after the dash, subsection, paragraph, subparagraph, and further inferior divisions. For example, this division is called "section 1-1.007-2," in which the first digit denotes the chapter, the second the part, the third the subpart, the fourth and fifth the section, and the sixth the subsection.

As used in these Regulations, the term "deviation" includes any of the following actions:

(a) When a prescribed contract clause is set forth verbatim, use of a contract clause covering the same subject matter which varies from that set forth.

(b) When a standard or other form is prescribed, use of any other form for the same purpose.

(c) Alteration of a prescribed standard or other form, except as may be authorized in the Regulations.

(d) The imposition of lesser or, where the regulation expressly prohibits, greater limitations than are imposed upon the use of a contract clause, form, procedure, type of contract, or upon any other procurement action, including but not limited to, the making or amendment of a contract, or actions taken in connection with the solicitation of bids or proposals, award, administration, or settlement of contracts.

(e) When a policy or procedure is prescribed, use of any inconsistent policy or procedure.

In the interest of establishing and maintaining uniformity to the greatest extent feasible, deviations from the Federal Procurement Regulations shall be kept to a minimum and controlled as follows:

(a) The head of each agency exercising procurement authority shall prescribe a formal procedure for the control of deviations within the agency. A copy of the procedure shall be furnished to the General Services Administration.

(b) In individual cases, deviations may be authorized by the head of the agency or the officers designated by him for this purpose, in accordance with procedures established by the agency. In each instance the file shall disclose the nature of the deviation and the reasons for such special action.

(c) Deviations in classes of cases shall be considered on an expedited basis jointly by the agency desiring the deviation and the General Services Administration unless, in the considered judgment of the agency and with due regard to the objective of uniformity, circumstances preclude such joint effort. such case, GSA will be notified of the deviation.

In

(d) Except as otherwise authorized, when any deviation in a contract form provision is authorized, physical change may not be made in the printed form but shall be made by appropriate provision in the schedule, specifications, or continuation sheet, as provided in agency procedures.

Subpart 1-1.1-[Reserved] Subpart 1-1.2-Definition of Terms § 1-1.201 Definitions.

For the purposes of this chapter, and unless otherwise indicated, the following terms have the meanings set forth in this subpart.

§ 1-1.202 Executive agency.

"Executive agency" means any executive department (including the Departments of the Army, the Navy, and the Air Force) or any independent establishment in the executive branch of the Government, including any wholly-owned Government corporation.

ment to an expenditure of funds and which, except as otherwise authorized, are in writing. In addition to a twosignature document, it includes all transactions resulting from acceptance of offers by awards or notices of awards; agreements and job orders or task letters issued thereunder; letter contracts; letters of intent; and orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance. It also includes contract modifications.

§ 1-1.209 Procurement.

"Procurement" means the acquisition (and directly related matters), from non-Federal sources, of personal property and nonpersonal services (including construction) by such means as purchasing, renting, leasing, contracting, or bartering, but not by seizure, condemnation, donation, or requisition.

(a) Who owns, operates, or maintains a factory or establishment that produces on the premises the materials, articles, or equipment required under the contract and of the general character described by the specifications; or

(b) Who, if newly entering into a manufacturing activity, has made all necessary prior arrangements for manufacturing space, equipment, and personnel, to perform the manufacturing operations required for contract performance; and

(c) Who, before being awarded a contract, satisfies the contracting officer that it qualifies under (a) or (b) of this section.

lishment in which the materials, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business; or

(2) In the case of articles of particular kinds (lumber and timber products, coal, machine tools, raw cotton, petroleum, green coffee, tea, agricultural liming materials, or hay, grain, feed, or straw), who satisfies the requirements of the Regulations of the Secretary of Labor (41 CFR 201.101 (b) and 201.603 (f)) under the Walsh-Healey Public Contracts Act; and

(3) Who, before being awarded a contract, satisfies the contracting officer that it is engaged in an established regular business meeting all the criteria of (1) or (2) of this paragraph (a).

(b) It is not enough in the case of a regular dealer to show only that arrangements have been made to set up such a business. Before an award can be made, the dealer must show that it is an established going business regularly dealing in the particular articles, or articles of the general character, sought by the Government.

§ 1-1.213 Construction contractor.

"Construction contractor" means a person (or firm) who, before being awarded a contract, satisfies the contracting officer that he qualifies as one:

(a) Who owns, operates, or maintains a place of business, regularly engaged in the construction, alteration, or repair of buildings, structures, communication facilities, or other engineering projects, including the furnishing and installing of necessary equipment; or

(b) Who, if newly entering into a construction activity, has made all necessary prior arrangements for personnel, construction equipment, and required licenses to perform construction work. § 1-1.214

Service contractor.

"Service contractor" means a person (or firm) who, before being awarded a contract, satisfies the contracting officer that he qualifies as one:

(a) Who owns, operates, or maintains a place of business, regularly engaged in performing nonpersonal services, such as the repair, maintenance, or rebuilding of personal property; the packing, crating, or moving of material; the operation of equipment or facilities; the rental of equipment or facilities; or the performance of administrative, professional, or technical functions; or

(b) Who, if newly entering into a service activity, has made all necessary prior arrangements for personnel, service equipment, and required licenses to perform services.

§ 1-1.215 Government instrumentality. "Government instrumentality" means any of the following:

(a) An instrumentality of the U.S. Government.

(b) An agency or instrumentality of a State or local government thereof, Hawaii, possession, or Puerto Rico.

(c) An agency or instrumentality of a foreign government.

§ 1-1.216 United States.

"United States", when used in a geographic sense, means the States and the District of Columbia.

§ 1-1.219 Contract modification.

"Contract modification” means any written alteration in the specifications, delivery point, rate of delivery, contract period, price, quantity, or other contract provision of an existing contract, whether accomplished by unilateral action in accordance with a contract provision or by mutual action of the parties to the contract. It includes (a) bilateral actions, such as supplemental agreements and amendments, and (b) unilateral actions, such as change orders, notices of termination, and notices of the exercise of an option.

§ 1-1.220 Procurement item.

"Procurement item" means any personal property or nonpersonal service, including construction, alteration, repair, or installation, which is the object of procurement.

Subpart 1-1.3-General Policies § 1-1.300 Scope of subpart.

This subpart sets forth general policies with respect to (a) methods of procurement; (c) (b) procurement sources; types of contracts; (d) use of specifications, standards, and purchase descriptions; (e) transportation costs; and (f) priorities, allocations, and allotments. § 1-1.301

Methods of procurement.

It shall be the objective to use that method of procurement which will be most advantageous to the Governmentprice, quality, and other factors considered. Procurement shall be made on a competitive basis, whether by formal advertising or by negotiation, to the maximum practicable extent, in accordance with the policies and procedures set forth in this chapter. Procurement shall be effected by advertising for bids and thereafter awarding a contract to the lowest responsible bidder, except that when authorized procurement may be effected by negotiation in accordance with Part 1-3 of this chapter.

§ 1-1.302 Procurement sources. § 1-1.302-1

General.

(a) Before taking procurement action, in accordance with this chapter, agencies shall have complied with applicable laws and regulations relative to obtaining supplies or services from Government sources and from contracts of other Government agencies. These include excess and surplus stocks in the hands of any Government agency, Federal Supply Schedules, General Services Administration Stores Stock, Federal Supply Service Consolidated Purchase Programs, Federal Prison Industries, Inc., and National Industries for the Blind.

(b) Irrespective of whether the procurement of supplies or services from sources outside the Government is to be effected by formal advertising or by negotiation, competitive proposals ("bids" in the case of procurement by formal advertising, "proposals" in the

case of procurement by negotiation) shall be solicited from all such qualified sources as are deemed necessary by the contracting officer to assure such full and free competition as is consistent with the procurement of types of supplies and services necessary to meet the requirements of the agency concerned. § 1-1.302-2 Production and research and development pools.

(a) Description. A production or research and development pool is a group of concerns (1) which have associated together for the purpose of obtaining and performing jointly, or in conjunction with each other, contracts for supplies or services, or for research and development for defense use or to effectuate the purposes of the Small Business Act, (2) which have entered into a production pool agreement governing their organization, relationship, and procedure, and (3) the agreement has been approved either in accordance with section 708 of the Defense Production Act of 1950, as amended (Defense Production Pool), or in accordance with sections 9(d) or 11 of the Small Business Act (Small Business Pool). Production pool participants are exempt from the "manufacturer or regular dealer" requirement of the Walsh-Healey Public Contracts Act and of sections 1-1.211 and 1-1.212.

(b) General rule. Except as provided in this section 1-1.302-2, a production pool shall be treated for purposes of Government procurement on exactly the same basis as any other prospective or actual contractor.

(c) Ascertainment of status. The contracting officer is responsible for ascertaining whether a group of firms seeking to do business with the Government is a production pool. In ascertaining the status of a group representing that it is a pool, contracting officers may rely on a copy of the Small Business Administration (SBA) or the Office of Civil and Defense Mobilization (OCDM) notification of approval of the pool. Each executive agency should expeditiously disseminate to appropriate contracting officers information received from SBA or OCDM concerning the approval of production pools.

(d) Contracting with pools.

(1) A bid or proposal of a production pool is not eligible for award to the pool unless submitted either by the pool in its own name or by an individual mem

ber expressly disclosing that it is on behalf of the pool. Except as to contracts to be awarded to incorporated pools, the contracting officer shall prior to award to a pool require to be deposited with him a certified copy of a power of attorney from each member of the pool who is to participate in the performance of the contract authorizing an agent to execute the bid, proposal, or contract on behalf of such member. A copy of each such power of attorney shall be appended to each executed copy of the contract retained by the Government.

(2) Membership in a pool shall not of itself preclude individual members from submitting bids or proposals as individuals on appropriate procurements. Bids or proposals submitted by an individual member of a pool shall not be considered when the individual member has participated in the bid or proposal submitted by the pool.

(e) Responsibility of pool member. Where a member of a production pool has submitted a bid or proposal in its own name the pool agreement shall be considered in determining the pool member's responsibility.

§ 1-1.303 Approval signatures.

Approval signatures on contracts or purchase authorizations should be minimized to the greatest practical extent and, in the event that multiple approval signatures are required, they should, where possible, be obtained concurrently. § 1-1.304 [Reserved]

§ 1-1.305 Specifications.1

"Specification," as used in this section 1-1.305, is a clear and accurate description of the technical requirements for a material, product, or service, including the procedure by which it will be determined that the requirements have been met. Specifications for items or materials contain also preservation, packaging, packing, and marking requirements. The identification of categories and intended use of such specifications are as follows:

1 Other instructions concerning the use of specifications that are of interest and applicable to executive agencies, but which are of no interest to the public, are contained in General Services Administration Regulation 1-VI, Part 2.