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"Negotiation" means the procedure for making contracts without formal advertising.

§ 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.

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"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 § 1-1.301 Methods of procurement. § 1-1.301-1 Competition.

All purchases and contracts, whether by formal advertising or by negotiation, shall be made on a competitive basis to the maximum practicable extent. § 1-1.301-2 Formal advertising.

Contracts for property and services shall be made by formal advertising in all cases in which the use of such method is feasible and practicable under the existing conditions and circumstances. Procurement by formal advertising shall be in accordance with detailed requirements and procedures set forth in Part 2 of this chapter. § 1-1.301-3

Negotiation.

If the use of formal advertising is not feasible and practicable, purchases and contracts for property and services may be negotiated in accordance with the de

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(a) Before taking procurement action, In accordance with this chapter, agencies shall have compiled 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 offers ("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 ensure 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. Offers shall not knowingly be solicited on the basis of race, creed, color, sex, age, or national origin of prospective sources.

[29 FR 10104, July 24, 1964, as amended at 41 FR 38166, Sept. 9, 1976]

§ 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 pool agreement governing their organization, relationship, and procedure; and (3) whose 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). Pool participants are exempt from the "manufacturer or regular dealer" requirement of the WalshHealey Public Contracts Act. (See subpart 1-12.6.)

(b) General rule. Except as provided in this § 1-1.302–2, a 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 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 Emergency Planning (OEP) notification of approval of the pool. If the contracting officer has any question as to whether a given pool has been approved, he shall consult the regional office of the SBA. Each executive agency should expeditiously disseminate to appropriate contracting officers information received from SBA or OEP concerning the approval of production pools.

(d) Contracting with pools. (1) A bid or proposal of a pool is not eligible for award to the pool unless submitted either by the pool in its own name or by an individual member 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 pursuant to Subpart 1-1.12.

[29 F.R. 10104, July 24, 1964, as amended at 36 F.R. 17419, Aug. 31, 1971]

§ 1-1.302-3 Contracts between the Government and Government employees or business concerns substantially owned or controlled by Government employees.

(a) Contracts shall not knowingly be entered into between the Government and employees of the Government or business concerns or organizations which are substantially owned or controlled by Government employees, except for the most compelling reasons, such as cases where the needs of the Government cannot reasonably be otherwise supplied.

(b) When a contracting officer has reason to believe that an exception as described in paragraph (a) of this section, should be made, approval of the decision to make such an exception shall be handled in accordance with agency procedures and shall be obtained prior to entering into any such contract. [30 F.R. 9589, July 31, 1965]

§ 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 Designation of solicitation

opening time.

The statement of the time designated as bid opening time in the case of solicitations for advertised procurement, or the time fixed for receipt of offers in the case of solicitations for negotiated procurement, shall include the phrase "local time at the place of bid opening," or "local time at the place designated for receipt of offers" in the case of proposals. Where a particular block or blank space on a standard form does not readily permit inclusion of the phrase, an asterisk may be used to call attention to an explanatory phrase which shall be set forth elsewhere in the solicitation, preferably on the same page. Procurement documents shall not refer to "daylight time" or "daylight saving time" and abbreviations such as "EDT" or "PDT" shall not be used.

[35 F.R. 15994, Oct. 10, 1970]

§ 1-1.305 Specifications.1

"Specification," as used in this § 11.305, 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:

(a) Federal. A specification covering those materials, products, or services, used by or for potential use of two or more Federal agencies (at least one of which is a civil agency), or new items of potential general application, promulgated by the General Services Administration and mandatory for use by all executive agencies.

(b) Interim Federal. A potential Federal specification issued in interim form, for optional use by agencies. Interim amendments to Federal Specifications are included in this definition.

(c) Military (MIL). A specification Issued by the Department of Defense, used solely or predominantly by and mandatory on military activities. (This definition includes both fully coordinated and limited coordination military specifications.)

(d) Departmental. A specification developed and prepared by, and of interest primarily to a particular Federal civil agency, but which may be of use in procurement by other Federal agencies. [29 F.R. 10104, July 24, 1964, as amended at 80 F.R. 16110, Dec 28, 1965]

§ 1-1.305-1 Mandatory use of Federal Specifications.

Federal Specifications shall be used by all executive agencies, including the Department of Defense, in the procurement of supplies and services covered by such specifications, except as provided in 88 1-1.305-2 and 1-1.305-3.

§ 1-1.305-2 Exceptions to mandatory use of Federal Specifications. Federal Specifications need not be used under the following circumstances:

(a) The purchase is required under a public exigency and a delay would be involved in using the applicable specification to obtain agency requirements.

1 Other instructions concerning specifications are contained in the Federal Property Management Regulations, Part 101-29.

(b) The total amount of the purchase does not exceed $10,000. (Multiple small purchases of the same item shall not be made for the purpose of avoiding the intent of this exception.)

(c) The purchase involves items of construction for new processes, new installations of equipment, or items for experiment, test, or research and development, until such time as specifications covering them are issued or it is determined by the General Services Administration, and the procuring agencies notified, that further deviations from the Federal Specifications will not be permitted: Provided, That, in connection with such deviations, existing Federal Specifications shall be used to the extent that they are applicable.

(d) The purchase involves spare parts, components, or materials required for repair or maintenance of existing equipment, or for similar items required for maintenance or operation of existing facilities or installations: Provided, That existing Federal Specifications shall be used to the extent that they are applicable.

(e) The items are purchased in foreign markets for use of overseas activities of agencies.

(f) An Interim Federal Specification is used by an agency in lieu of the Federal Specification.

(g) Where otherwise authorized by law.

[29 FR 10104, July 24, 1964, as amended at 40 FR 44137, Sept. 25, 1975]

§ 1-1.305-3 Deviations from Federal Specifications.

When the essential needs of an agency are not adequately covered by an existing Federal Specification, and the proposed purchase does not come within the exceptions described in § 1-1.305-2, the agency may authorize deviations from the Federal Specification; provided, that:

(a) Requirements of existing Federal Specifications shall be used to the maximum extent practicable.

(b) Each agency taking such deviations shall establish procedures whereby a designated official having substantial procurement responsibility shall be responsible for assuring that:

(1) Federal Specifications are used, and provisions for exceptions and deviations are complied with;

(2) Justifications for exceptions and deviations are subject to competent

review before authorization, and that such justifications can be fully substantiated if post audit is required;

(3) Major or repeated deviations are not taken except as prescribed in this § 1-1.305-3; and

(4) Notification or recommendation for change in the specification is sent promptly to the General Services Administration by the designated official or subdivision at the agency level, through established agency channels, when

(i) Deviations taken are of a major nature such as to result in the entrance of a new item into the supply system of the agency as evidenced by the development of a new item identification;

or

(ii) A deviation is taken repeatedly.

(5) Notification or recommendation for change in the specification shall be submitted, in duplicate, to the General Services Administration, Federal Supply Service, Washington, D.C. 20405. It shall include a statement of the deviations authorized by the agency, with justification therefor, and, where applicable, recommendation for revision or amendment of the specification.

(c) Deviations taken and reported by the agency in accordance with § 1-1.3053(b) may not be continued except under the following conditions:

(1) Upon notification by an agency that major or repeated deviations have been taken and where no recomendation for change in the specification is made by the agency, the General Services Administration will notify the agency as to whether such deviations may be continued in subsequent procurement. In cases where deviations are not approved and where procurement by the agency has progressed to a point where it would be impracticable to amend or cancel the action, such action may be completed, but the deviation shall not be authorized by the agency in subsequent procurement.

(2) Where an agency has recommended changing the specification consistent with the deviations it has taken and reported, those deviations may be continued until such time as the recommended change is coordinated and incorporated in the specification; provided, that where coordination with Federal agencies and industry, as applicable, does not result in acceptance of the change, such deviations shall not be

authorized by the agency in subsequent procurement.

§ 1-1.305-4 Optional use of Interim Federal Specifications.

Interim Federal Specifications are for optional use. All agencies are urged to make maximum use of Interim Federal Specifications and to submit statements of suggested changes to the assigned agency for consideration in further development of the specifications for promulgation as Federal Specifications. § 1-1.305-5 Use of Federal and Interim Federal Specifications in Federal construction contracts.

When material, equipment, or services for which a Federal or Interim Federal Specification is available are specified in connection with Federal construction, the Federal or Interim Federal Specification shall be made a part of the specification for the construction contract, subject to the provisions in § 1-1.305. § 1-1.305-6 Military and departmental specifications.

If no Federal Specification is available, existing Interim Federal, military, and departmental specifications which are listed in the Index of Federal Specifications and Standards should be considered and, wherever practicable, used by any agency having need therefor, consistent with the agency's procedures establishing priority for use of such specifications.

§ 1-1.306 Standards.'

"Standards," as used in this § 1-1.306, are descriptions which establish engineering or technical limitations and applications for materials, processes, methods, designs, or drafting room and other engineering practices, or any related criteria deemed essential to achieve the highest practical degree of uniformity in materials or products, or interchangeability of parts used in those products; and which may be used in specifications, invitations for bids, proposals, and contracts. The identification of the categories and intended use o such standards are as follows:

(a) Federal Standards. A standard promulgated by the General Services Administration, mandatory for use by all

1 Other instructions concerning standards are contained in the Federal Property Management Regulations, Part 101-29.

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§ 1-1.306-1

Mandatory use and appli. cation of Federal Standards. Federal Standards shall be used by all executive agencies, including the Department of Defense. Exceptions to this mandatory use requirement are as follows:

(a) The exceptions in § 1-1.305 reiating to the mandatory use of Federal Specifications are for application to the use of Federal Standards.

(b) In a specific case or class of cases an executive agency may be granted an exception by the General Services Administration on submission of an adequate justification therefor.

§ 1-1.307 Purchase descriptions. § 1-1.307-1

Applicability.

(a) Purchase descriptions may be used in the procurement of supplies or services (excluding construction) only when the use of formal (including interim and other temporary) Government specifications and standards to describe such supplies or services is not required under applicable regulations. (See §§ 1-1.305 and 1-1.306). However, where the use of a formal specification or standard is required, use of supplementary descriptive information which is consistent with the specification or standard is permissible.

(b) Purchase descriptions used in competitive procurement shall not specify a product having features which are peculiar to the product of one manufacturer, producer, or distributor, and

thereby preclude consideration of a product of another company, unless it has been determined in writing by the user that those particular features are essential to the Government's requirements, and that similar products of other companies lacking those features would not meet the minimum requirements for the item. Purchase descriptions shall not inIclude either minimum or maximum restrictive dimensions, weights, materials, or other salient characteristics which would tend to eliminate competition by other products which are only marginally outside the restrictions, unless such restrictions are determined by the user in writing to be essential to the Government's requirements.

(c) Purchase descriptions, as well as other forms of specifications, must accurately reflect the needs of the Government.

[29 FR 10104, July 24, 1964, as amended at 40 FR 2810, Jan. 16, 1975] § 1-1.307-2

General requirements.

Except as otherwise provided in §§ 1-1.307-3 and 1-1.307-4, purchase descriptions shall clearly and accurately describe the salient technical requirements or desired performance characteristics of the supplies or services to be procured without including restrictions which do not significantly affect the technical requirements or performance characteristics and, when appropriate, shall describe the testing procedures which will be used in determining whether such requirements or characteristics are met. When necessary, preservation, packaging, packing, and marking requirements shall be included. Purchase descriptions may include references to formal Government specifications and standards which are to form a portion of the purchase description. [40 FR 2810, Jan. 16, 1975]

§ 1-1.307-3 Commercial, and State and local government specifications and standards.

Purchase descriptions may include or consist of references to specifications and standards issued, promulgated, or adopted by technical societies or associations, or State and local governments, if those specifications and standards (a) are widely recognized and used in commercial practice, (b) conform to the requirements of § 1-1.307-2, (c) are readily available to suppliers of the supplies or services to be procured, and (d) it has

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