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officer shall require the contractor to in- § 1-4.1107-20 Sole source procurement Iclude a provision in the rental contract stating that the Government will have the initial option to utilize any purchase or other benefits earned through rental payments.

(b) When leased ADPE is used on Government contract work under a costreimbursement type contract and less than 100 percent of the cost of the equipment is absorbed by the Government, the contracting officer should obtain for the Government, where possible, the right to accrued purchase credits, if the contractor elects not to exercise his purchase option. Accordingly, negotiation objectives for cost-reimbursement type contracts shall include the following when less than 100 percent of the cost of the equipment is absorbed by the Government.

(1) The contractor should be encouraged to incorporate in his ADP equipment lease the right to assign accrued purchase credits to the Government;

(2) The contracting officer should obtain for the Government, if possible, the right of first refusal on accrued purchase credits, if the contractor elects not to exercise his purchase option; and

(3) A 60-day advance notice should be provided to the Government when the contractor proposes to terminate his ADP equipment lease if the Government has been granted rights to accrued purchase credits.

(c) If the Government has been granted rights to purchase credits in accordance with (b) above and the contractor elects not to exercise his purchase option, the ADPE shall be reported through agency or GSA reutilization channels as set forth in Subpart 10132.3 of the FPMR.

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(d) If in accordance with (a) and (b) of this § 1-4.1107-18, the Government elects to exercise an option to purchase the leased ADPE, it is in the nature of a procurement. Accordingly, the applicable provisions of this subpart relating to the acquisition of ADPE would apply.

§ 1-4.1107-19 Assistance by GSA.

Assistance in any phase of the procurement process covered by this Subpart 1-4.11 shall be obtained by contacting the General Services Administration (CDP), Washington, D.C. 20405.

The following procurement documents, clearly marked "sole source procurement," shall be forwarded to the General Services Administration (CDPD), Washington, D.C. 20405, for each sole source acquisition of ADPE if the dollar value involved is between $10,000 and $50,000:

(a) A copy of the contract; or

(b) A copy of the purchase/delivery order issued against a GSA ADP Schedule contract.

§ 1-4.1108 Standard clauses.

The following clauses shall be used as specified in solicitations and contracts for ADP.

§ 1-4.1108-1

Late bids, proposals, modi fications, and withdrawals.

(a) The late bids, modifications of bids. or withdrawal of bids clause set forth in § 1-2.201 (a) (31) of the FPR or paragraph 7-2002.2 of the ASPR shall be inserted in all invitations for bids on ADPE, software, maintenance services, or supplies.

(b) The late proposals, modifications or proposals, and withdrawals of proposals clause set forth in § 1-3.802-1(a) of the FPR or paragraph 7–2002.4 of the ASPR shall be inserted in ali solicitation documents for negotiated procurements for ADPE software, maintenance services, or supplies except that the alternate clause set forth in § 1-3.802-2(b) of the FPR may be used in those instances in which overriding mitigating circumstances clearly make use of the alternate clause in the best interest of the Government; and

(1) The head of any agency or his designated representative authorizes use of the alternate clause for the individ ual procurement in question; and

(2) Prior specific approval is obtained from the Commissioner, Automated Data and Telecommunications Service, Washington, D.C. 20405.

§ 1-4.1108-2 Limitation of liability.

The following clause shall be used it all solicitations and contracts for ADPE software, maintenance, and related sup plies and services unless the contracting officer determines that a higher degre of protection is in the best interest the Government.

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WARRANTY EXCLUSION AND LIMITATION OF
DAMAGES

Except as expressly set forth in writing in this agreement, or except as provided in the clause entitled, "Commitments, Warranties, and Representations," if applicable, and except for the implied warranty of merchantability, there are no warranties expressed or implied. In no event will the Contractor be liable to the Government for consequential damages as defined in the Uniform Commercial Code, Section 2-715, in effect in the District of Columbia as of January 1, 1973; i.e.: Consequential damages resulting from the seller's breach include:

(a) Any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and

(b) Injury to person or property proxi mately resulting from any breach of warranty.

(End of Clause)

§ 1-4.1108-3 Contractor representation. The following clause shall be used in all solicitations and contracts for ADPE when the Government's requirement is set forth in the form of a data system specification and the value of the contract is expected to exceed $100,000:

CONTRACTOR REPRESENTATION

Unless the Contractor expressly states otherwise in his proposal, where functional requirements are expressly stated as part of the requirements of this solicitation, the Contractor, by responding, represents that in its opinion the system proposed is capable of meeting those requirements. However, once the functions have been demonstrated or put to use on the delivered system, Contractor responsibility under this clause ceases. In the event of any inconsistency between the detailed specifications and the functional specification contained in the solicitation, the former will control.

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initial contract is awarded; and it is in the best interest of the Government to evaluate options in order to eliminate the possibility of a "buy-in," the following clause shall be inserted in solicitation documents with the data required for the clause "fill-ins" suitably highlighted:

FIXED PRICE OPTIONS

(a) This solicitation is being conducted on the basis that the known requirements exceed the basic contract period (and/or quantity) to be awarded, but due to the unavailability of funds the option (s) cannot be exercised at the time of award of the basic contract (although there is a reasonable certainty that funds will be available thereafter to permit exercise of the options); realistic competition for the option periods (and/or quantity) is impracticable once the initial contract is awarded; and it is in the best interest of the Government to evaluate options in order to eliminate the possibility of a "buy-in." Therefore, to safeguard the integrity of the Government's evaluation and because the Government is required to procure ADPE and related items on the basis of fulfilling system specifications at the lowest overall cost, subsequent (or additional) as well as initial requirements must be satisfied on a fixed price basis. Since the systems or items to be procured under this solicitation have an expected life of ---- months (hereafter referred to as "systems life," or "items life," as appropriate), and since lowest systems (items) life costs are synonymous with lowest overall costs, the contract resulting from this solicitation must contain options for renewals for subsequent fiscal years throughout the projected systems (items) life at fixed prices, and, if applicable, at fixed prices for all stated optional quantities of supplies or services not included in the initial requirement. Despite the foregoing, offerors are reminded that although the evaluation which will lead to contract award will be based on systems (items) life costs, the exercise of the option (s) is dependent not only on the continued existence of the requirement and the availability of funds, but also on an affirmative determination that such exercise is in the best interest of the Government. Should the offeror desire, separate charges, if any, which will incur to the Government should the latter fail to exercise the option(s) may be stated separately. Options included in offers submitted in response to this solicitation will be evaluated as follows:

(1) To be considered responsive to this solicitation, vendors must offer fixed prices for the initial contract period for the initial systems or items being procured. Fixed prices, or prices which can be finitely determined, must be quoted for each separate option renewal period and must remain in effect

throughout that period. Where optional quantities are offered, prices must be fixed or finitely determinable.

(2) Offers will be evaluated for purposes of award by adding the total price of all optional periods and, if applicable, all stated optional quantities to the total price for the initial contract period, covering the initial systems or items. These prices will be adjusted by the appropriate discount factors. Separate charges, if any, which will incur to the Government should the latter fall to exercise the options, will not be considered in the evaluation, except as stated in (3) below.

(3) An offer which is unbalanced as to prices for the basic and optional quantities may be rejected. An unbalanced offer is one which is based on prices significantly less than cost for some systems and/or items and prices which are significantly overstated for the other systems and/or items. In determining whether an offer is unbalanced as to prices, the Government will evaluate separate charges, if any, which the Government will incur for failure to exercise the options.

(b) Evaluation of options will not obligate the Government to exercise the options. Offers which do not include fixed or determinable systems (items) life prices cannot be evaluated for the total requirement and will be rejected. Offers which meet the mandatory requirements will be evaluated on the basis of lowest overall cost to the Government, including all stated options. The above notwithstanding, award will be made subject to the type of funds available. Accordingly, the following applicable provisions shall be included in any contract resulting from this solicitation:

OPTION TO EXTEND THE TERM OF
THE CONTRACT

This contract is renewable, at the option of the Government, by the Contracting Offcer giving written notice of renewal to the Contractor by the first day of each fiscal year or within 30 days after funds for that fiscal year become available, whichever date is the later; provided that the Contracting Officer shall have given preliminary notice of the Government's intention to renew at least

days before this contract is to expire. Such a preliminary notice shall not be deemed to commit the Government to renewals. If the Government exercises this option for renewal, the contract as renewed shall be deemed to include this option provision. However, the total duration of this contract, including the exercise of any options under this clause, shall not exceed

months. (Optional: Should the Government fail to exercise this option to extend the term of the contract, separate charges, as set forth elsewhere in this contract, shall incur.)

OPTION FOR INCREASED QUANTITY

The Government may increase the quantity of items called for herein by the amount stated elsewhere in this contract and at the unit prices specified therein. The Contracting Officer may exercise this option at any time within the period specified in the contract by giving written notice to the Contractor. Delivery of items added by exercise of this option shall be in accordance with the delivery schedule set forth elsewhere in this contract. (Optional: Should the Govern ment fail to exercise this option for increased quantity, separate charges as set forth elsewhere in this contract shall incur.) (End of Clause)

§ 1-4.1108-5 Standard clauses for im plementation of FIPS PUBS.

(a) Scope. The standard terminology as set forth in Subpart 101-32.13 of the FPMR shall be included in the solicitation for each Federal Information Processing Standards Publication (FIPS PUB) that is applicable to a procurement under this Subpart 1-4.11. Subpart 101-32.13 provides standard terminology for use in purchase agreements, solicitations, and offers for acquisitions of ADP equipment (ADPE), related software, services, and communications equipment to give effect to Federal Standards announced in FIPS PUBS Subpart 101-32.13 is also applicable where particular FIPS PUBS apply, t equipment acquired under Part 101-35 of the FPMR. FIPS PUBS are issued by the National Bureau of Standards and collectively constitute the Federal Information Processing Standards Regis ter. FIPS PUBS are available as set forth in § 101-32.1302 of the FPMR.

(b) Applicability. The provisions of Subpart 101-32.13 are applicable to all Federal agencies unless the agencies are otherwise excepted. Waiver proce dures and exceptions are prescribed in the applicable FIPS PUBS.

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Orders under Federal Supply
Schedule contracts.

Orders for GSA stores stock.

Furnishing information to contractors.

Payment for GSA stores stock.

Subpart 1-5.10 [Reserved]

AUTHORITY: The provisions of this Part 1-5 Issued under sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c).

Subpart 1-5.1-[Reserved]

Subpart 1-5.2-[Reserved]

Subpart 1-5.3-Excess Personal

Property

SOURCE: The provisions of this Subpart 1-5.3 appear at 29 F.R. 10187, July 24, 1964. unless otherwise noted.

§ 1-5.300 Scope of subpart.

This subpart sets forth policies and related material regarding the use of excess personal property as a source of supply. This subpart does not include, modify, or supersede instructions concerning the reassignment of personal property within executive agencies and the transfer of excess, or other instructions concerning the utilization of Government-owned personal property, which are contained in Part 101-43 of the Federal Property Management Regulations.

(30 F.R. 16111, Dec. 28, 1965]

§ 1-5.301 Definition of excess personal property.

"Excess personal property" means any personal property under the control of any Federal agency which is not required for its needs and the discharge of its responsibilities, as determined by the head thereof.

§ 1-5.302 Policy.

To the fullest extent practicable, agencies shall use excess personal property as the first source of supply in fulfilling their requirements and requirements of their cost-type contractors.

§ 1-5.303

Title 41-Public Contracts, Property Management

§ 1-5.303 Implementation of policy.

(a) In giving effect to the policy stated in § 1-5.302, agencies should provide that:

(1) Personnel authorized to approve actions for procurement or other acquisition of personal property will make positive efforts to obtain excess before such actions are undertaken.

(2) Personnel mentioned in (1) of this 1-5.303 (a) will receive available information concerning excess personal property from appropriate General Serv. ices Administration regional offices.

(b) Prior to procurement or other acquisition of property, careful and receptive consideration shall be given to utilization of known usable excess personal property of a similar type, including the possibility of substitution or adaptation of excess items not identical with requested items, whether the excess items are unused, rehabilitated, or in used of condition, and regardless whether the intended acquisition would be from General Services Administration stores stock or from other sources of supply.

81-5.304 Assistance by General Serv

ices Administration in filling require-
ments from excess.

(a) Information regarding the availability of excess personal property may be obtained through the following:

(1) Personal contact with the General Services Administration or the holding installation.

(2) Review of excess personal property catalogs and bulletins circularized by the General Services Administration.

(3) Submission of personal property requirements to the regional offices of the General Services Administration. (GSA Form 1539, Request for Excess Personal Property, is available for this purpose.)

(4) Examination and inspection of reports and samples of excess personal property assembled for this purpose in General Services Administration regional offices.

(b) The General Services Administration will assist agencies in meeting their requirements for property of the types excepted from reporting as excess by 101-43.312 of the Federal Property Regulations. Federal Management agencies requiring such property should contact the appropriate GSA regional office. GSA area utilization officers, stationed at military points throughout the

United States which generate the largest
amounts of excess, are screening and of-
fering for Government use nonreported
excess personal property as it becomes
available for transfer.

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[29 F.R. 10187, July 24, 1964, as amended at 1-54
30 F.R. 16111, Dec. 28, 1965]

Subpart 1-5.4-Procurement of Prison.
made Products

SOURCE: 39 FR 41710, Dec. 2, 1974, unless
otherwise noted.

§ 1-5.400 Scope of subpart.

This subpart prescribes the policies and procedures to be followed in the procur ment of products and services produced or performed by Federal Prison Industries, Inc. (FPI).

§ 1-5.401

General.

(a) Federal Prison Industries, Inc. a wholly owned government corporation of the District of Columbia which was established in 1934 by Act of Congres and an Executive order. The corporatio now operates under the authority of U.S.C. 4121-4128.

(b) The corporation is self-supporting and administered by a board of six d rectors appointed by the President serve without compensation. The boar represents industry, labor, agricultur retailers and consumers, the Departme of Defense, and the Attorney General

(c) The chief function of the corpor tion is to provide training and emplo ment for prisoners confined in Feder penal and correctional institutions. substantial part of the earnings of th corporation is expended in carrying a comprehensive vocational train program under which more than half the prisoners receive occupational tra ing in connection with the industries & the maintenance activities of the stitutions themselves.

(d) Diversified products and serv are produced or provided so that no sing private industry shall bear an und burden of competition from the produ of prison workshops or activities and th there is minimum competition with vate industry and free labor.

§ 1-5.402 Mandatory procurement prison-made products.

Federal departments, agencies, all other government institutions of United States shall purchase the p ucts which are produced by FPI listed in their "Schedule of Prod

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