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() The con

(1) To comg
and the rules
ant to the Act
operation of ar
uals in order
tion when the
(1) the system
the work to be

in terms of a
following: (A)
(C) operation

(2) to inclu
contained in
ton and resul
subcontract a
when the state
ment, or opere
Individuals to
tlon; and

(3) to inclu
paragraph (3)
pursuant to to
design, develo
system of recc

(b) In the
a civil action
Agency involve

the design, de
system of rec
plish an agenc
ties may be in
ployees of th
concerns the
on individuals
tion. For purt
tract is for
records on
agency functi
ployee of the
an employee

(c) The ter
following mea

(1) "Opera
means perfor
25sociated wi
records inclu
semination o

(2) "Recor
or grouping
vidual that I
cluding, but
inancial tra
criminal or
contains his
ber, symbol,
assigned to
or volce prin

(3) "Syst
means & gro

is retrieved
by some ide
140 FR 4450

tractor to do one or more of the follor

The refer- ing goods and services to the hit
tor and his Government; or
e agency is (11) An agency contracts with il
ses of the or private educational organista
and not to provide training, and the recordar

language, erated on contract students puru
ny other their attendance (admission is

grade reports) are similar to thoed
tained on other students and are !
mingled with their records on it

ncy con [40 FR 44503, Sept. 26, 1975)
nent, op-

ystem of $ 1-1.337–5 Procedures.
lf of the (a) All procurement require
7 agency shall be reviewed to determine the
- the re-

the design, development, or operste

a system of records on individuakt hat con- complish an agency function will ividuals quired, and the related contracts

are de- identify specifically which of those unction tions is to be performed by the cost by the tor. If the design, development

, ore 3 of the tion of such a system is required

, I solicitations and contracts shall be appli- the notification set forth in $1-15 -5, it is (b) and the clause set forth in 3 11 a con 5(c). Pertinent implementing and nose of rules and regulations shall be made s iduals able in accordance with agency i nplish dures. All contract work statementes ре ар

specifically identify (1) the system

systems of records and (2) the Fu

be performed by the contractor in te
state (ii) development, or (ili) operation

as a

(a) The contractor agrees:

(1) To comply with the Privacy Act of 1974
and the rules and regulations issued pursu-
ant to the Act in the design, development, or
operation of any system of records on individ-
uals in order to accomplish an agency func-
tion when the contract specifically identifies
(1) the system or systems of records and (11)
the work to be performed by the contractor
In terms of any one or combination of the
following: (A) Design, (B) development, or
(C) operation;

(2) to include the solicitation notification contained in this contract in every solicitation and resulting subcontract and in every subcontract awarded without a solicitation when the statement of work in the proposed subcontract requires the design, development, or operation of a system of records on Individuals to accomplish an agency function; and

(3) to include this clause, including this paragraph (3), in all subcontracts awarded pursuant to this contract which require the design, development, or operation of such a system of records.

(b) In the event of violations of the Act, & civil action may be brought against the agency involved where the violation concerns the design, development, or operation of a system of records on individuals to accomplish an agency function, and criminal penalties may be imposed upon the officers or employees of the agency where the violation concerns the operation of a system of records on Individuals to accomplish an agency function. For purposes of the Act when the contract is for the operation of a system of records on individuals to accomplish an agency function, the contractor and any employee of the contractor is considered to be an employee of the agency.

(c) The terms used in this clause have the following meanings:

(1) "Operation of a system of records" means performance of any of the activities associated with maintaining the system of records including the collection, use, and dissemination of records.

(2) "Record" means any item, collection,
or grouping of information about an indi-
vidual that is maintained by an agency, in-
cluding, but not limited to, his education,
financial transactions, medical history, and
criminal or employment history and that
contains his name, or the identifying num-
ber, symbol, or other identifying particular
assigned to the individual, such as a finger
or voice print or a photograph.

(3) "System of records" on individuals
means a group of any records under the con-
trol of any agency from which information
is retrieved by the name of the individual or
by some Identifying number, symbol, or other
Identifying particular assigned to the indi-
(40 FR 44503, Sept. 26, 1975)

Subpart 1-1.4

sibility SOURCE: The po 1-1.4 appear at 32 unless otherwise a 81-1.400

Scope This subpart ment responsibili head of the proc tracting officer a and 1-1.207, and designation of cc § 1-1.401 Respo

the procuring The head of te responsible for ti sonal property ar (including constr tent that respon signed to his activ § 1-1.402 Authc

cers. Contracting of enter into and a personal property ices (including c of the Governm findings and dete limitations of th to them. In the e Ity, they are subj in § 1-1.403 and ments, consistent curement Regula contracting agend 8 1-1.403 Requi

fore entering No contract sh less all applicabl. Executive orders been met. The cludes those issu: agency whether referenced in the Regulations. $ 1-1.404 Select


tracting office Contracting of designated as suc tions terminated procedures. Suci shall conform to $ 1-1.404. $ 1-1.404-) Sel.

In selecting indi tracting officers 35

ve as


rds the

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of any one of the following: (i) De

(b) The following notification shal included in every solicitation and res ing contract, and in every como awarded without a solicitation, when statement of work requires the del development, or operation of a syste records on individuals for an a function:

PRIVACY ACT NOTIFICATION This procurement action requires the design, develop, or operate a system of ten

on individuals to accomplish an agency d

tion in accordance with the Privacy 1974, Public Law 93-579, December 31, (5 U.S.C. 552a) and applicable agency der tions. Violation of the Act may involie Imposition of criminal penalties.

(c) The following clause shall be cluded in every solicitation and resul contract, and in every contract away without a solicitation, when the sw ment of work requires the desire development, or operation of a systes records on individuals to accomplish/ Agency function.


al ];


§ 1-1.404-2

Title 41

Public Contracts, Property Management

include authority to act as contracting § 1-1.405 Ratification of unauthorized officers, consideration shall be given to contract awards. experience, training, education, business Esecution of otherwise proper conacumen, judgment, character, reputa

tracts made by individuals without contion, and ethics. In considering experi

tracting authority, or by contracting ofence, training, and education, the follow

ficers in excess of the limits of their deleing shall be evaluated:

gated authority, may be later ratified. To (a) Experience in the field of procure

be effective, such ratification must be in ment Involved (e.g., supply, construction,

the form of a written document clearly etc.) gained in a Government or non stating that ratification of a previously Government procurement office, OT

unauthorized act is intended and must be otherwise;

signed by a person authorized to ratify (b) Formal education or special

such acts. Generally such ratification training, including Government con

may be made only by an official on whose ducted or sponsored courses, in perti

behalf the contract was made and then nent fields, such as business administra

only (a) if he could have given authority tion, law, accounting, engineering, archi

to enter into the contract before it was tecture, or related fields; and

awarded and (b) if he still has power to (c) Knowledge of applicable laws, E

do so at the time of ratification. ecutive orders, and regulations.

§ 1-1.406 Cost Accounting Standards. 8 1-1.404-2 Designation.

The contracting officer or his author. Designation of individuals to act as

ized representative shall: contracting officers may be accomplished

(a) Determine the adequacy of prime by delegation of authority to individuals

Contractor's Disclosure Statement(s)or to positions. In the latter case, unless otherwise provided by the agency, any

Cost Accounting Practices and Certifi.

cation (see § 1-3.1203(a)); individual authorized to serve in such a

(b) Determine whether prime conposition is a contracting officer. In either

tractor's Disclosure Statements are in case, however, the instrument of desig

compliance with Part 1-15 and Cost Acnation shall include, or make specific

counting Standards promulgated by the reference to, any limitations on the scope

Cost Accounting Standards Board (see of authority to be exercised, other than

§ 1-3.1220); those contained in applicable laws, regu

(c) Determine contractor compliance lations, or directives. Appropriate records

with Cost Accounting Standards and shall be maintained, whether designation

Disclosure Statements. If applicable; and be made by name or by reference to or

(d) Negotiate price adjustments and ganizational title or position designation.

execute supplemental agreements pursu§ 1-1.40443 Termination of designa. ant to the Cost Accounting Standards tion.

clause set forth in § 1-3.1204. Unless otherwise provided in the in 139 FR 43058, Dec. 10, 1974) strument designating an individual as a

Subpart 1-1.5—Contingent Fees contracting officer (e.g. stipulation of a specified term or a specific purpose), the $ 1-1.500 Scope of subpart. designation shall remain effective until

This subpart prescribes the use by exthe contracting officer is reassigned, his

ecutive agencies of the "covenant against employment is terminated, or his desig

contingent fees" and sets forth the nation is revoked. No revocation shall

policies, forms, methods, procedure, prinoperate retroactively.

ciples, and standards related thereto. § 1-1.40444 Assignment of duties to The requirements of this subpart have contracting officers.

as their objective the prevention of imIn the assignment of duties, including

proper influence in connection with the execution and administration of con

obtaining of Government contracts, the tracts, consideration shall be given to

elimination of arrangements which enthe ability, training, and experience of

courage the payment of inequitable and

exorbitant fees bearing no reasonable the contracting officer. Duties involving

relationship to the services actually percontracts of large dollar value and com formed, and the prevention of unwarplexity shall be given only to personnel ranted expenditure of public funds which with commensurate experience, training, Inevitably results therefrom. The methand ability.

ods used to achieve these objectives are 36

Accounting Standards promulgated by
e 41- Public Contracts, Property Map
tracting § 1-1.405 Ratification of murder
given to

contract awards.

Execution of otherwise proge reputa- tracts made by Individual nikt expert- tracting authority, or by contra follow- icers in excess of the limits of te

gated authority, may be later that ocure

be effective, such ratification ex iction, the form of a written documes - non

stating that ratification of a person e, or

unauthorized act is intended ando

signed by & person authorized to u pecial such acts. Generally such notes con

may be made only by an oficial et perti

behalf the contract was made all stra

only (a) if he could have given som

awarded and (b) if he still has por
& S


to enter into the contract before !

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do so at the time of ratification
§ 1-1.406 Cost Accounting Standard

The contracting officer or his et
ized representative shall:

(a) Determine the adequacy d'i Contractor's Disclosure Statemeta

Cost Accounting Practices and of ny cation (see $ 1-3.1203(A));

(b) Determine whether primes

tractor's Disclosure Statements or & compliance with Part 1-15 and Cod


the requirement for disclosure of the de as a guide in the talls of arrangements under which administration, agents represent concerns in obtaining Government cont Government contracts, and the pro

8 1-1.504–2 Coi hibiting, by use of the covenant against

contingent fees, of certain types of con-
tractor-agent arrangements.

Any fee whet:

percentage, broke $ 1-1.501 Applicability.

or otherwise den The provisions of this subpart apply purview of the c to all contracts for the procurement of portion thereof 1 personal property and nonpersonal serv cess in obtaining ices, including the procurement of con ernment contrac struction. The Criminal Code will apply The fact, howeve In any case involving actual criminal tingent nature is conduct.

clude a relatio

under the except § 1-1.502 Improper influence

of the covenant. The term "Improper influence" means Influence, direct or indirect, which in

§ 1-1.504_3 Ex

duces or tends to induce consideration
or action by any employee or officer of

There are exce the United States with respect to any tion of the cov Government contract on any basis other ployees" and than the merits of the matter.

commercial or

tained by the con 8 1-1.503 Covenant.

of securing busine Executive agencies shall include in

§ 1-1.504_4 every negotiated or advertised contract & "covenant against contingent fees" (a) The term substantially as follows (set forth AS

for the purpose ( clause 11 of Standard Form 19, Invita prohibition of th tion, Bid, and Award (Construction, Al Individual (includ teration or Repair); as clause 17 of employed by a cc Standard Form 23-A, General Provi. devote his full tin sions (Construction Contract); and as no other concern clause 20 of Standard Form 32, General concern has the Provisions (Supply Contract)):


manner of perfo

recognized that a The Contractor warrants that no person

small business co or selling agency has been employed or re

individual who tained to solicit or secure this contract upon an agreement or understanding for a com

cerns. The facto mission, percentage, brokerage, or contingent 504–5(b), except fee, excepting bona fide employees or bons applied to determ Ade established commercial or selling agen dividual comes w cies maintained by the Contractor for the

the prohibition of purpose of securing business. For breach or violation of this warranty the Govern

(b) The hiring ment shall have the right to annul this con continuity and it tract without lability or in its discretion to to the obtaining deduct from the contract price or considera Government cont tion, or otherwise recover, the full amount

(c) An employ of such commission, percentage, brokerage, or

who seeks to ob contingent lee.

contract or cont (31 F.R. 5880, Apr. 16, 1966)

through the use § 1-1.504 General principles and stand.

or who holds hin ards applicable to the covenant.

to obtain any Go 81-1.504_1 Use of principles and contracts through standards.

(d) A person m The principles and standards set forth ployee whether h In this subpart are intended to be used a fixed salary bas


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Cost Accounting Standards Board !
$ 1-3.1220);

(c) Determine contractor complex
with Cost Accounting Standards !
Disclosure Statements

, if applicable's
(d) Negotiate price adjustments
execute supplemental agreements par
ant to the Cost Accounting Standar
clause set forth in 81-3.1204.
(39 FR 43058, Dec. 10, 1974)

Subpart 1-1.5.Contingent free
$ 1-1.500 Scope of mbpart.

This subpart prescribes the use by! ecutive agencies of the "covenant au contingent fees" and sets forth policies, forms, methods, procedure

. Por
ciples, and standards related them
The requirements of this subpart by
ss their objective the prevention of i
oroper influence in connection with

braining of Government contracte
<imination of arrangements which
kerage the payment of Inequitable w
rantant fees bearing no reasoned
'scanship to the services actually been
med and the prevention of unn
-werpenditure of public funds white

tresults therefrom. The met
su schiere these objectives &


written agreemen tion relating there contracting office Hon for bids is iss be made (and and agreement the bidder (or cop appropriate box i ment (which appe 21, Bid Form (CC Standard Form 3 (Supply Contract 33. Invitation, Bi Contract)) to be tion or bid form:

The bidder repre has, has not, er company or person bona alde employee bidder) to solicit or b) that he o be Agreed to pay any co than a full-time boc solely for the bidde percentage or broker op resulting from th and agrees to furn! to (a) and (b) abc Contracting Officer

the trade, on a percentage, commis Is not intended, however, to disqualify

or other contingent basis, or newly established contractor-agent relaubination of the foregoing.

tionships where a continuing relation-1.504-5 Bona fide established com

ship is contemplated by the parties. mercial or selling agency maintained

(4) It should appear that the agency by the contractor for the purpose of

Is an established concern. The agency securing business

may be either one which has been in

business for a considerable period of ) An agency or agent is not "bona

time or a new agency which is a pres- which seeks to obtain any Govern

ently going concern and which is likely -t contract or contracts for its prin

to continue in business as a commercial ls through the use of improper in

or selling agency in the future. The ce or which holds itself out as being

business of the agency should be conto obtain any Government contract

ducted in the agency name and characontracts through improper influence.

terized by the customary indicia of the -) In determining whether an agency

conduct of a regular business. "bona fide established commercial

(5) The fact that a selling agency lling agency maintained by the con

confines its selling activities to the field tor for the pupose of securing busi

of Government contracts does not, in and " the factors set forth below shall

of itself, disqualify It under the coveonsidered. They are necessarily in

nant. The fact, however, that the selling ble of exact measurement or precise

agency is employed to secure business nition and it is neither possible nor

generally, that is, to represent the conable to prescribe the relative weight

cern in connection with sales to the Gove given any single factor as against

ernment as well as regular commercial other factor or as against all other

sales to non-Government activities 18 a ors. The conclusions to be reached

factor entitled to favorable consideration given case will necessarily depend

In evaluating the case as one coming - a careful evaluation of the agree

within the authorized exception. Ar; and other attendant facts and

rangements confined, however, to obtain. imstances.

ing Government contracts, particularly The fees charged should not be

those involving a selling agency orgauitable and exhorbitant in relation

nized immediately prior to or during le services actually rendered. That

periods of expanded procurement ree compensation should be commen

sulting from conditions of national e with the nature and extent of

emergency, must be closely scrutinized. ervices and should not be excessive ompared with the fees customarily

81-1.504–6 Fees for "information." ed in the trade concerned for simi

Contingent fees paid for "Informaervices related to commercial (non

tion" leading to obtaining a Government rnment) business. In evaluating contract or contracts are included in the nableness of the fee, there should prohibition and, accordingly, are in nsidered services of the agent other

breach of the covenant unless the agent actual solicitation, as for example, qualifies under the exception as a bong nical, consultant or managerial serve

fide employee or a bona fide established and assistance in the procurement

commercial or selling agency maintained sential personnel, facilities, equip by the contractor for the purpose of , materials, or subcontractors for

securing business. rmance of the contract. The selling agency should have

8 1-1.505 Representation and agree mate knowledge of the products and

ment required from prospective COD

tractors. usiness of the concern represented. 11 as other qualifications necessary Except as provided in § 1-1.507–3. 1 the products or services on their each executive agency shall inquire of S.


a written representation There should ordinarily be a con from prospective contractors y of relationship between the con whether they have employed or retained er and the agency. The fact that any company or person (other than 8 gency has represented the contrac full-time employee working solely for er a considerable period of time the prospective contractor) to solicit or ctor for favorable consideration. It secure the contract, and shall secure &

Hon of the represe term "bona fide e Federal Regulations Rubpart 1-1.5.) $ 1-1.506 Interp

sentation. (a) For the put tation and agreen prospective contra 11-1.505, the def employee" is as s

(b) The fact th tractor retains a devote his full tim Hve contractor mean that the rela violation of the tingent fees or th Attached to the tlonship. It does


the prospective cc the representatic and, as required with respect to retention.

(c) If the repre wise be answered fact that the perso by the bidder or ney, or a public has any other title, does not negative.

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