which are special or which are likely to cause harm. Where repetitive purchases are made of the same item from the same manufacturing source and there is good reason to rely upon the integrity of the manufacturer because of known safeguards and a significant history of defect-free purchases, such inspection may be further limited to a check of occasional purchases. [29 FR 10281, July 24, 1964, as amended at 40 FR 44141, Sept. 25, 1975] § 1-14.107 Rejection of nonconforming supplies or services. (a) Contractors ordinarily shall be given an opportunity to correct or replace nonconforming supplies or services if this can be done within the required delivery schedule. Unless the contract provides otherwise (as may be the case in some cost-reimbursement type contracts), such correction or replacement shall be without additional cost to the Government. The standard inspection clause in § 1-7.102-5 reserves to the Government the right to charge the contractor the cost of Government reinspection and retests because of prior rejection. (b) Notices of rejection of nonconforming supplies or services shall be in writing if (1) the supplies have been delivered to a point other than the contractor's plant; (2) the contractor persists in offering nonconforming supplies or services for acceptance; or (3) delivery or performance is, or is likely to be, overdue without excusable cause. The reasons for rejection shall be stated. Since under certain circumstances acceptance may be implied where timely notice of rejection is not furnished, notices of rejection should be furnished promptly to contractors. [29 FR 10281, July 24, 1964, as amended at 38 FR 6674, Mar. 12, 1973] § 1-14.108 Government inspection of supplies under subcontracts. Government inspection of subcontracted supplies shall be made only when required in the interest of the Government. The primary purpose of subcontract inspection is to assist the Government inspector at the prime contractor's plant in determining the conformance of supplies with contract requirements. It does not relieve the prime contractor of any of his responsibilities under the contract. Supplies that do not qualify under the criteria in § 1-14.105-2 for Government inspection at source shall not be inspected by the Government at the subcontractor's plant. Supplies for which certificates, records, reports, and similar evidence of quality are available at the prime contractor's plant shall not be Government inspected at the subcontractor's plant except occasionally to verify such evidence. However, Government inspection shall be performed at a subcontractor's plant whenever the Government contract requires. All oral and written statements and contract provisions relating to the inspection of subcontracted supplies shall be so worded as not to (a) affect the contractual the relationship between prime contractor and the Government or between the prime contractor and the subcontractor, (b) establish a contractual relationship between the Government and the subcontractor, or (c) constitute a waiver of the Government's right to inspect or reject supplies. § 1-14.109 Inspection for foreign govern ments. Inspection will be performed only for friendly foreign governments or international agencies and shall be administered in accordance with the foreign policy and security objectives of the United States. Such inspection will be provided only where consistent with or required by legislation, executive orders, or any agency policies concerning mutual security programs, setting forth foreign policy and security objectives. Subpart 1-14.2-Acceptance 81-14.201 General. As used in Government contracts, "acceptance" generally means the act of an authorized representative of the Government by which the Government assents to ownership by it of existing and identified supplies, or approves specific services rendered, as partial or complete performance of the contract. Except as provided in § 1-14.206, and subject to other terms and conditions of the contract, the Government thereby acknowledges, among other things, that the supplies or services are in conformity with contract requirements, including those of quality, quantity, packaging, and marking. Depending upon the provisions of the contract, acceptance may be effected before delivery, at the time of delivery, or after delivery. However, supplies and services shall not be accepted prior to inspection, except as permitted by § 1-14.205. Acceptance shall ordinarily be evidenced by execution of an acceptance certification on an inspection or receiving report form. Where acceptance is accomplished at a point other than destination, supplies shall not be reinspected at destination for acceptance purposes. However, such supplies should be examined at destination for damage in transit, quantity, and possible substitution or fraud. § 1-14.202 [Reserved] § 1-14.203 Point of acceptance. Each contract shall specify the point of acceptance. Contracts which provide for delivery f.o.b. destination shall provide for acceptance at destination whether inspection is to occur at destination or at source. Contracts which provide for delivery f.o.b. origin shall ordinarily provide for acceptance (and inspection) at source. § 1-14.204 Responsibility for acceptance. Acceptance is the responsibility of the contracting officer or his authorized representative. Where a contracting activity uses services of another Federal agency for the purpose of acceptance, the acceptance by the other agency is binding on the activity for which the services are performed. § 1-14.205 Certificates of conformance. A contractor's certification that supplies or services comply with contract requirements may be considered a proper element incident to acceptance of supplies or services. Standard or commercial items, or supplies of a simple, noncritical nature, may be ac cepted solely on the basis of a contractor's certificate of conformance if: (a) The contracting officer or his authorized representative determines (1) that acceptance on that basis is in the best interest of the Government, and (2) that, because of knowledge of the supplier's reputation or past performance, it is very likely that the supplies furnished will be acceptable and that any defective supplies would be replaced or corrected by the supplier without contest; and (b) The contract (initially, or by amendment) (1) reserves to the Government the right after acceptance to inspect the supplies within a reasonable time after delivery and to reject defective items, and (2) imposes upon the contractor the obligation, in the event of such rejection, to promptly replace or correct the defective items or to reimburse the Government therefor. § 1-14.206 Acceptance of supplies or services not conforming with contract requirements. Except as provided in this § 1-14.206, supplies or services tendered for acceptance which do not conform with contract requirements shall be rejected (see § 1-14.107). However, if it is in the best interest of the Government, for reasons of economy or the urgency of the requirement, acceptance of supplies or services which do not meet all contract requirements may occasionally be desirable. Prior to such acceptance, the contracting officer shall obtain the approval of the requiring activity. If the nonconformity is a significant deviation from contract requirements, or if the contracting officer determines that a price reduction is appropriate, the acceptance of nonconforming supplies or services shall be covered by an appropriate modification of the contract. A deviation is significant if it adversely affects safety; durability; performance; interchangeability of parts or assemblies; weight, where weight is a significant consideration; or any other basic objective of the specification. Where acceptance of nonconforming supplies or services is to be at a reduction in price, the amount of the reduction shall be fair Sec. 1-15.205-14 Dividends. 1-15.205-15 Fringe benefits. 1-15.205-16 Insurance and indemnification. 1-15.205-17 Interest and other financial costs. 1-15.205-18 Labor relations costs. 1-15.205-19 Losses on other contracts. 1-15.205-20 Maintenance and repair costs. 1-15.205-21 Manufacturing and production engineering costs. 1-15.205-22 Material costs. 1-15.205-23 Organization costs. 1-15.205-24 Other business expenses. 1-15.205-25 Relocation costs. 1-15.205-26 Patent costs. 1-15.205-27 Pension plans. 1-15.205-28 Plant protection costs. 1-15.205-29 Plant reconversion costs. 1-15.205-30 Precontract costs. 1-15.205-31 Professional and consultant service costs-legal, accounting, engineering, and other. 1-15.205-32 Gains and losses on disposition of depreciable property or other capital assets. 1-15.205-33 Recruitment costs. 1-15.205-34 Rental costs (including sale and leaseback of property). 1-15.205-35 costs. Research and development 1-15.205-36 Royalties and other costs for use of patents. 1-15.205-37 Selling costs. 1-15.205-38 Service and warranty costs. 1-15.205-39 Severance pay. 1-15.205-40 Special tooling and special test equipment costs. 1-15.205-41 Taxes. 1-15.205-42 Termination costs. 1-15.205-43 Trade, business, technical, and professional activity costs. 1-15.205-44 Training and educational costs. 1-15.205-45 Transportation costs. 1-15.205-46 Travel costs. 1-15.205-47 Economic planning costs. 1-15.205-48 Page charges in scientific jour nals. 1-15.205-49 Preservation of records. 1-15.205-50 Automatic data processing equipment (ADPE) leasing costs. Subpart 1-15.3—Contracts with Educational Institutions 1-15.300 Scope of subpart. 70 in connection with which cost principles and procedures are used, and the need for advance understandings. re 81-15.102 Negotiated supply, service, experimental, developmental, and search contracts, and contract changes with commercial organizations. This category includes all contracts and contract modifications for supplies, services, or experimental, developmental, or research work negotiated on the basis of cost with concerns other than educational institutions (see § 1-15.103), State and local governments (see § 1-15.108), and nonprofit organizations (see § 1-15.110). It does not include facilities contracts (see § 1-15.105) or construction and architect-engineer contracts (see § 115.104). Except with respect to the cost principles and procedures in §§ 115.201-4, Definition of allocability; 1– 15.205-3, Bidding costs; 1-15.205-6, Compensation for personal services; 1– 15.205-26, Patent costs; and 1-15.20535, Research and development costs, the use of which are optional, the remaining cost principles and procedures set forth in Subpart 1-15.2 are prescribed for mandatory use and shall be (a) used in the pricing of negotiated supply, service, experimental, developmental, and research contracts, and contract modifications with concerns other than educational institutions, State and local governments, and nonprofit organizations (but see § 1-15.110 (b)(4)) whenever cost analysis is to be performed pursuant to § 1-3.807-2, and (b) incorporated (by reference, if desired) in such contracts as the basis: (1) For determination of reimbursable costs under cost-reimbursement type contracts (§ 1-3.405), including cost-reimbursement type subcontracts thereunder, and the cost-reimbursement portion of time-and-materials contracts (§ 1-3.406-1) except in such contracts where material is priced on a basis other than at cost in accordance with § 1-3.406-1(d); (2) For the negotiation of overhead rates (Subpart 1-3.7); (3) For claiming, negotiating, or determining costs under terminated fixed-price and cost-reimbursement type contracts (§§ 1-8.203 and 1-8.213); |