agency shall report its agreements to the FPR Staff, Office of Procurement Management, AMC, 15 days after September 30. each year.

(e) A list of civilian agency basic agreements will be compiled by the General Services Administration. The list will be combined with the DOD list, and will be published at the beginning of each fiscal year in FPR Bulletins.

[40 FR 27655, July 1, 1975]

§ 1-3.410-3

Basic ordering agreement.

(a) Description. A basic ordering agreement is an agreement which is similar to a basic agreement (see § 1-3.410-1) except that it also includes a description, as specific as practicable, of the supplies to be furnished or services to be performed when ordered and a description of the method for determination of the prices, consistent with the contract types authorized by this subpart, to be paid to the contractor for such supplies or services. Either the specific terms and conditions of delivery or a description of the method for their determination shall be set forth in the basic ordering agreement. The basic ordering agreement shall list one or more activities which are authorized to issue orders under the agreement. Any activity so named may issue orders specifying the supplies or services required. which orders may be accepted by the contractor by whatever manner of acceptance is indicated in the basic ordering agreement. Each order will incorporate by reference the provisions of the basic ordering agreement.

(b) Application. The basic ordering agreement may be used as a means of expediting procurement where specific items, quantities, and prices are not known at the time of execution of the agreement but where past experience or future plans indicate that a substantial number of requirements for items or services of the type covered by the basic ordering agreement will result in procurements from the contractor during the term of the agreement. Under proper circumstances, use of the procedures under the agreement is advantageous and economical in ordering parts for equipment support since such procedures substantially shorten the administrative time required for placing such articles in a production status. thereby not only decreasing the amount of support inventory required to be carried but also decreasing the possibility

that parts procured will become obsolete as a result of design changes in the equipment.

(c) Limitations. (1) Supplies or servIces may be ordered under a basic ordering agreement only if it is determined at the time the order is placed that it is impracticable to obtain competition by either formal advertising or negotiation for such supplies or services.

(2) The Government shall neither make any final commitment nor authorize any work by the contractor pursuant to an order under a basic ordering agreement until prices have been established. unless the order establishes a monetary limitation on the obligation of the Government and either

(1) The order is subject to provisions contained in the basic ordering agreement which set forth adequate procedures for arriving at prices as early in contract performance as practical, but In no event shall such procedures permit the price of the entire order to be established on a retroactive basis (however incentive provisions consistent with this Subpart 1-3.4 are permitted); or

(ii) The need for the supplies or services is compelling and of unusual urgency, as when the Government would be seriously injured, financially or otherwise. if the supplies or services were not furnished by a certain date and when they could not be furnished by that date if the contractor is not allowed to proceed with work until prices have been established.

As a general rule, prices should be established prior to authorizing the contractor to begin work. However, where the contractor is allowed to begin work prior to pricing in accordance with this paragraph, the contractor and the contracting officer shall proceed with pricing as soon as practicable. The basic ordering agreement shall provide that failure to reach agreement on price in such circumstances will constitute a dispute subject to the procedures of the Disputes clause.

(3) Each order issued under a basic ordering agreement shall be subject to such reviews, approvals, and determinations and findings (including those pertaining to types of contracts) specified in this Part 1-3 as would be applicable if the order were a contract entered into apart from the basic ordering agreement.

(4) A basic ordering agreement shall be modified only by a revision of the

basic ordering agreement itself and shall not be modified or superseded by individual orders issued thereunder. Basic ordering agreements shall be reviewed at least annually, before the anniversary of their effective dates, and revised to conform with the current requirements of this Part 1-3. Modifications shall not have retroactive effect.

(5) The contracting officer issuing an order under a basic ordering agreement shall be responsible for assuring compliance with the provisions of (1), (2), and (3) of this § 1-3.410-2(c).

[29 FR 10155, July 24, 1964. Redesignated at 40 FR 27655, July 1, 1975]

Subpart 1-3.5-[Reserved]
Subpart 1-3.6-Small Purchases

§ 1-3.600 Scope of subpart.

This subpart prescribes policies and procedures for the purchasing of supplies and nonpersonal services from commercial sources when the aggregate amount involved in any one transaction does not exceed $10,000. Such purchases shall be termed "small purchases." This subpart is not applicable to the procurement of supplies and services initially estimated to exceed $10,000 even though awards under such procurements do not exceed $10,000.

[40 FR 44138, Sept. 25, 1975]

couraged, consistent with other valid considerations such as price feasibility.

(c) When quotations are received on a number of related items (such as hardware items, spare parts for vehicles, or office supplies, etc.), one purchase order shall normally be issued to the firm quoting the lowest aggregate prices rather than issuing more than one purchase order on the basis of the lowest quotation on each item.

(d) In arriving at the aggregate amount involved in any one transaction, there must be included all supplies and services which would properly be grouped together in a single transaction and which would be included in a single advertisement for bids if the procurement were being effected by formal advertising. Requirements aggregating more than $10,000 shall not be broken down into several purchases which are less than $10,000 merely for the purpose of permitting negotiation or utilizing the small purchase methods authorized under this Subpart 1-3.6.

(e) Any one of the purchase methods set forth in this subpart which is determined the most suitable to the immediate requirement and which will accomplish the procurement in the most efficient and economical manner, shall be utilized. [29 FR 10155, July 24, 1964, as amended at 37 FR 13979, July 15, 1972; 39 FR 28437, Aug. 7, 1974; 40 FR 44138, Sept. 25, 1975] § 1-3.603-1

Solicitation.

(a) (1) Reasonable competition shall be obtained in making small purchases in excess of $500. As used in this § 1-3.603, reasonable competition means obtaining a sufficient number of quotations from qualified sources of supply to assure that the procurement is fair to the Government, price and other factors considered, including the administrative cost of the purchase. In arriving at the number of quotations to be solicited, due consideration should be given to the administrative costs associated with the proposed solicitation in relation to the potential benefits to be derived by the Government, consistent with good business practices. See § 1-1.1002-2 for the requirements regarding publicizing small purchases.

(2) Small purchases not in excess of $500 may be accomplished without securing competitive quotations if the prices quoted are considered to be reasonable. Such purchases shall be distributed equitably among qualified suppliers. When practicable a quotation

should be solicited from other than the previous supplier prior to placing a repeat order. The administrative cost of verifying the reasonableness of the price of purchases not in excess of $500 may more than offset potential savings in detecting instances of overpricing; therefore, action to verify the reasonableness of the price need be taken only when the buyer or contracting officer suspects that, or has information to indicate that, the price may not be reasonable, e.g., comparison to previous price paid, personal knowledge of the item involved, comparison to similar items.

(b) Reasonable competition for small purchases ordinarily can be obtained without soliciting quotations from sources outside the trade area in which the procurement office is located. However, solicitation shall not be limited to suppliers of well known and widely distributed makes or brands, nor shall quotations be solicited purely on selective personal preference basis. New supply sources, disclosed through trade journals or other media, shall be continuously reviewed and, when appropriate, added to the list of available sources. Each agency shall prescribe procedures for insuring that the small business and minority business enterprise status of each source is recorded on agency small purchase source lists, where lists are maintained, when such status is made known to the agency. Such status information shall be used to insure that small business concerns and minority business enterprises are given opportunities to submit quotations in response to small purchase solicitations. Small business size standards are set forth in Subpart 1-1.7, and minority business enterprise is defined in § 1-1.1310-2.

(c) The following factors influence the number of quotations required in connection with any particular purchase:

(1) The nature of the article or service to be procured, and whether highly competitive and readily available in several makes or brands, or relatively noncompetitive.

(2) Information obtained in making recent purchases of the same or similar item.

(3) The urgency of the proposed purchase.

(4) The dollar value of the proposed purchase.

(5) Past experience concerning specific dealers' prices.

(d) Solicitation of quotations may be effected orally for purchases estimated not to exceed $5,000. Written solicitations shall be used for all purchases estimated to exceed $5,000, and should be used for purchases not in excess of $5,000 in such circumstances as where (1) the suppliers are located outside the local area, (2) special specifications are involved, (3) a large number of items are included in a single proposed procurement, or (4) obtaining oral quotations is not considered efficient. Standard Form 18, Request for Quotations, shall be used for written solicitation of quotations in accordance with § 1-16.201.

(e) Where it is the practice for supliers to furnish standing price quotations on supplies or services required on an intermittent and recurring basis, this Information may be used in lieu of obtaining individual quotations each time a purchase is contemplated. In such cases, the purchaser shall assure that the price information is current and that the Government obtains the benefit of maximum discounts.

(a) The manner of securing quotations and the nature and extent of information to be required for small purchases, are for determination by the procuring agency, but should be limited to only that deemed necessary to conclude purchase action.

(b) The following are illustrative of the extent to which quotation information should be recorded:

(1) Oral solicitations. When oral price quotations are obtained. informal records should be established which will reflect clearly the propriety of placing the order at the price paid with the supplier concerned. In most cases. this will consist merely of showing the names of the suppliers contacted and the prices and other terms and conditions quoted by each. Handwritten notations on the purchase action request form of the agency, or whatever medium the purchaser is using as his basis for making the purchase, are satisfactory for this purpose.

(2) Written solicitations. Retention in the purchase files of written quotations received, or references to printed price lists used. will usually suffice as the record supporting the price paid.

This § 1-3.604 prescribes policies and procedures for making small purchases of supplies and nonpersonal services through the use of imprest funds. Related policies and regulations concerning the establishment of and accounting for imprest funds are contained in Part IV of the Treasury Fiscal Requirements Manual for Guidance of Departments and Agencies.

[40 FR 44139, Sept. 25, 1975]

§ 1-3.604-2 Definition of imprest fund.

The term "imprest fund” means a fixed cash or petty cash fund in the form of currency, coin, or Government check which has been advanced by an official Government disbursing office, without charge to a Government appropriation or fund account, to a duly authorized cashier for cash payment or other cash requirement purposes as specified in his designation or authorization. The fund may be of a revolving type, replenished to a fixed amount as spent or used, or of a stationary nature such as a change making fund.

§ 1-3.604-3 Agency responsibilities.

Each agency using imprest funds for small cash purchases of supplies or nonpersonal services shall have the responsibility of periodically reviewing and determining whether there is continuing need for each fund established, and that amounts of such funds are not in excess of actual needs. Agencies should take prompt action to have imprest funds adjusted to a level commensurate with demonstrated needs whenever circumstances warrant such action. In this connection, each agency shall:

(a) Study agency practices to insure that full advantage is taken of all small purchase processes; and

(b) Develop and issue appropriate implementing regulations.

§ 1-3.604-4 Use of imprest funds.

(a) The cash payment processes described in this section should be used for making small purchases whenever advantageous to the Government. Cash purchases will generally be advantageous in the following circumstances:

(1) When vendors are reluctant to honor small purchase orders.

(2) When vendors are not equipped to bill agencies for purchases in accordance with normal business practices.

(3) When supplies or nonpersonal services are needed at locations not served by purchase offices or when the established sources of issue are not conveniently accessible to point of use.

(4) When provisions for local credit arrangements and monthly billings by vendors are impracticable.

(b) The following are typical procurements for which the use of imprest funds would be suitable:

(1) Emergency, fill-in, occasional, or special purchases of supplies or services. (2) Repair of equipment.

(3) Perishable subsistence.

(4) Public utility bills where location of the activity is so situated as to make cash payment more efficient.

(5) Postage stamps, parcel post, COD, postal charges, local drayage, transportation tokens or passes (including cash fares), and taxi fares.

(6) Expenses incident to travel and emergency travel advances (in accordance with Part IV of the Treasury Fiscal Requirements Manual for Guidance of Departments and Agencies, Section 3040).

[29 FR 10155, July 24, 1964, as amended at 40 FR 44139, Sept. 25, 1975] § 1-3.604-5 Limitations.

(a) Small purchases made pursuant to imprest fund procedures may not exceed $150 for any one transaction, except that under emergency conditions the amount for any one transaction may be increased not to exceed $300. Exceptions or additions needed in connection with procurement matters described in §1-3.604-4, as well as the maximum dollar limitation for any one procurement transaction, should be addressed to the Treasury Department pursuant to Part IV of the Treasury Fiscal Requirements Manual

for Guidance of Departments and Agencies. The granting of any such exceptions or additions will be coordinated with the Administrator of General Services or his designee. Approved exceptions now existing will automatically be continued without specific request from the agency to which exceptions have been granted.

(b) Supplies or services subject to restrictions under any provisions of law or regulation may not be purchased through use of imprest funds except with such statutory and regulatory restrictions.

[29 FR 10155, July 24, 1964, as amended at 40 FR 44139, Sept. 25, 1975] § 1-3.604-6

Procurement and payment.

(a) Small purchases utilizing imprest funds may be made only by authorized employees.

(b) When payment for small purchases is made from imprest funds, no purchase order need be issued unless it is advantageous to the Government, for example, when required by the vendor to grant Government discounts. When so required, any authorized purchase order form may be used and will be endorsed "payment to be made in cash."

(c) Receipts must be secured for each payment from imprest funds (pursuant to the provisions of GAO Manual 7 GAO 5120).

(d) The cashier may either reimburse employees for amounts paid by them for authorized purchases or furnish the cash necessary to consummate such purchases. Purchases for which cash has been furnished in advance should be confirmed within five work days from the date of advance.

§ 1-3.604-7 Tax exemption certificates.

Government tax exemption certificates (Standard Form 1094-Revised) will not be required unless the amount of the taxes on any one bill or purchase exceeds one dollar. (See GAO Manual of Policles and Procedures, Title 7, section 4820.10).

chase order, receiving report, invoice, and public voucher.

(b) Prescribed use. Standard Form 44 is prescribed for use in connection with the documenation of purchases when all of the following conditions are satisfied:

(1) Except for purchases made under public exigency circumstances, the amount of the purchase is not in excess of $2,500.

(2) The supplies or services are immediately available.

(3) One delivery and one payment will be made.

(4) Its use is determined to be more economical and efficient than use of other small purchase methods.

(c) Terms and conditions. There are no written terins and conditions included on Standard Form 44. Since there is, for all practical purposes, simultaneous placing of purchase orders on Standard Form 44 and delivery of the items ordered, written terms and conditions are not considered necessary.

(d) Instructions for use. General procedural instructions governing the use of Standard Form 44 are printed on the form and on the inside front cover of each book of forms.

(e) Agency implementation. Agency Implementation shall be consistent with this 1-3.605-1. and shall provide adequate safeguards regarding the control of forms and accounting for purchases.

(f) Description and availability of form. (1) Standard Form 44 is available from General Services Administration supply depots in four-part carbon interleaved sets made up into books, consisting of twenty-five sets per book. Each set of forms consists of the following copies: Seller's Invoice, Seller's Copy of Order, Receiving Report-Accounting Copy, and Memorandum Copy. Standard Form 44 may be ordered in the same manner as other standard forms, or the form may be ordered specially printed in accordance with paragraph (f) (2) of this 1-3.605-1.

(2) Standard Form 44 may be ordered specially printed (1) to include agency name, address, and serial numbers; and (ii) on special weight of paper and with the type of construction, number of sets per book, and number of parts per set, as specified by the ordering agency. Also, the administrative instructions on the inside front cover of the books may be supplemented by using agencies. However, the format of Standard Form 44 may not be changed unless