servicing the contractor's plant. Where Government inspection at destination is required in interdepartmental procurenients, the agency requiring the supplies may be requested to arrange for the inspection.

§ 1-14.103 Use of Government inspec. tion facilities.

§ 1-14.103-1 General.

By appropriate inspection agreements, executive agencies shall provide for the use of inspection services of other agencies when such use will assure the most economical and effective inspection consistent with the best interest of the Government.

(a) Inspection services may be arranged for on the basis of individual plants, geographic areas, specified contracts, or groups or classes of contracts or commodities.

(b) Inspection agreements shall set forth the arrangements regarding reimbursement, if any, for inspection services (see 1-14.103-5) and shall include specific provisions for (1) use of the practices, records, and forms of the activity_performing Inspection, unless the use of others is mutually agreeable; (2) channels of communications; and (3) designation of source and delivery date of any Government inspection equipment to be supplied.

§ 1-14.103-2 Inspection interchange agreements.

(a) Wherever there are multiple Government inspection assignments in a supplier's plant, the agencies involved shall by an inspection interchange agreement provide for the interchange of inspection services. Specific contracts may be exempted from interchange agreements if they are:

(1) Contracts for research, development, testing, or experimental work involving inspection tasks that the contracting agency determines can be most effectively performed by its own inspection activity; or

(2) Production contracts which can be effectively serviced only by the contracting agency's inspectors because they have acquired special skills required to perform the unusual or highly technical tasks involved.

(c) Agency procedures should permit detailed inspection interchange agreements to be initiated and completed at the operating level which is in a position to insure coordinated and effective implementation. Where operating level activities are unable to reach inspection interchange agreements or the propriety of exemptions is questioned and cannot be resolved, such matters shall be referred independently by each operating level activity through channels to the head of its agency for resolution. § 1-14.103-3 Inspection services available from Federal agencies.

(a) General Services Administration. (1) Agencies may arrange with the nearest General Services Administration regional Quality Control Division for inspection services (including sampling and laboratory, chemical, and physical testing) and advice required for the proper acceptance of purchased supplies and services. Requests which involve unusually large or continuing inspection programs should be made to the General Services Administration. Federal Supply Service, Quality Control Division, General Services Regional Office Building, Washington, D.C., 20407. Such inspection services and advice will be rendered to the maximum extent that current workload permits and in accordance with the reimbursement policy outlined in § 1-14.103-5. Special attention will be given to assisting ordering offices in the inspection of supplies and services procured under Federal Supply Schedule contracts.

(2) If the General Services Administration is unable to render the inspection assistance requested, it will endeavor to arrange for another Federal agency to provide the required services.

(b) Other agencies. In addition to the General Services Administration, many Federal agencies have quality control or inspection organizations which provide inspection services. Information as to the type of services available from these agencies, their policy on performing services for other Federal agencies, and the making of arrangements for their services, is contained in the Directory of U.S. Government Inspection Services and Testing Laboratories (see (c) of this § 1-14.103-3).

(c) Directory of U.S. Government Inspection Services and Testing Laboratories. The "Directory of U.S. Government Inspection Services and Testing

Laboratories," issued by the General Services Administration, contains pertinent information concerning the major inspection offices and testing laboratories of the Federal Government. It should be used by all Federal agencies when requiring inspection services. The Directory will be helpful in determining the facility best equipped, staffed, and geographically located to perform the desired services most economically. Copies of the Directory are available to Federal agencies upon request to the General Services Administration (FMQP), Washington, D.C. 20406. Copies of the Directory may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.

[29 FR 10281, July 24, 1964, as amended at 42 FR 23507, May 9, 1977]

(a) Any executive agency may supply, without reimbursement or transfer of funds therefor, services, work, materials. and equipment to another executive agency in connection with the inspection of supplies being purchased by the latter agency. The determination whether or not to require monetary reimbursement for inspection services rendered rests with the agency performing the services. Such determination should be made in accordance with the following:

(1) Agencies may, and should, to the maximum extent practicable, exchange inspection services on a reimbursementin-kind basis without requiring cross billing or monetary reimbursement.

(2) Agencies may perform inspection services of any value without requiring reimbursement where resident or itinerant inspectors are available in a manufacturing plant or nearby and where the additional work will not necessitate personnel increases.

(3) Agencies should, generally, waive reimbursements of less than $100 and,

In any event, should not seek reimbursement if the cost of the administrative procedures attendant to billing and collecting for inspection services would equal or exceed the cost of the services performed.

(b) Whenever inspection services are performed for other than an executive agency, reimbursement therefor shall be in accordance with applicable laws and regulations.

§ 1-14.104 Contractor responsibility.

(a) The standard inspection clause in § 1-7.101-5 (and in Standard Form 32, General Provisions (Supply Contract)) requires the contractor to maintain an inspection system acceptable to the Government and records of all inspection work performed by the contractor. The contractor's inspection system should be such as to provide reasonable assurance that the supplies subject to inspection will conform to contract requirements and should include any quality control procedures necessary to this end.

(b) Where quality control procedures are considered necessary (as may be the case, for example, when complex items are being purchased), a clause specifically requiring the contractor to maintain a quality control system acceptable to the Government shall be include in the contract unless the items are being purchased under specifications which in themselves contain adequate quality control provisions. In addition, the contract shall specify the quality control requirements to be complied with by the contractor, including control measures for manufacturing processes and documenttation pertinent to quality, testing and inspection, fabrication, and delivery.

(including any stage and period of manufacture, and including subcontractors' plants) as are necessary to determine that the supplies and services conform to contract requirements. Each contract shall designate the place or places at which the Government intends to perform inspection. Where the contract provides for inspection at source, the place or places of inspection may not be changed without the authorization of the contracting officer.

(b) Where a contract provides for delivery and acceptance at destination (see § 1-14.203) and the Government inspects the supplies for conformance with contract specifications at a place other than destination, the supplies shall not be reinspected at destination for such conformance. However, such supplies should be examined at destination for damage in transit, quantity, and possible substitution or fraud.

§ 1-14.105-2 Inspection at source. Supplies and services shall be inspected at source where:

(a) Inspection at any other point would require uneconomical disassembly or destructive testing:

(b) Considerable loss would result from the manufacture and shipment of unacceptable supplies or from the delay in making necessary corrections;

(c) Special instruments, gauges, or facilities required for inspection are available only at source;

(d) Inspection at any other point would destroy or require the replacement of costly special packing and packaging;

(e) A quality control system is required by the contract or inspection during performance of the contract is essential;

(f) Supplies requiring technical inspection are destined for points of embarkation for overseas shipment; or

(g) It is otherwise determined to be in the best interest of the Government. § 1-14.105-3 Inspection at destination. Supplies and services shall be inspected at destination where:

(a) Deliveries of supplies purchased "off the shelf" are made from a point other than that of manufacture;

(b) Necessary testing equipment is located only at destination;

(c) Products being purchased are processed under direct control of the National Institutes of Health or the Food

and Drug Administration, Department of Health, Education, and Welfare;

(d) Perishable subsistence supplies are purchased within the United States, except that perishable subsistence supplies destined for overseas shipment will normally be inspected for condition and quantity at points of embarkation;

(e) Brand name products are purchased for authorized resale (through commissaries or similar facilities), except that where supplies are destined for direct overseas shipment, inspection (and acceptance) may be accomplished by the contracting officer or his authorized representative on the basis of a tally sheet evidencing receipt of shipment signed by the port transportation officer or other designated official at the transshipment point; or

(f) It is otherwise determined to be in the best interest of the Government. § 1-14.106 Inspection of small purchases ($10,000 or less).

(a) This § 1-14.106 applies to all small purchases, including items described in Federal and military specifications, and qualified products. In determining the type and extent of Government inspection to be required on small purchases, the smallness of possible losses and the likelihood of uncontested replacement of defective articles shall be considered.

(b) Generally, inspection of small purchases shall be at destination. Purchasers, users, and installers may be considered inspectors for small purchase inspection purposes.

(c) Unless detailed technical inspection is necessary, inspection shall consist of examination of (1) type and kind; (2) quantity; (3) damage; (4) operability, If readily determinable; and (5) packaging and marking, if applicable.

(d) Detailed technical inspection shall be performed if special specifications are involved or if defective supplies are likely to harm personnel or equipment. Such inspection may also be necessary for other reasons (e.g., where the use of defective supplies may cause significant loss in program time or significant increase in program costs).

(e) Detailed technical inspection may be limited to those characteristics 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 Ishall 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 88 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 sub

contractor'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 relationship between the 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.

81-14.109 Inspection for foreign gov

ernments.

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

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 accepted 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 of 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 § 114.107). 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 and reasonable (see paragraph (b) of the standard inspection clause in § 1-7.102-5).

[38 FR 6674, Mar. 12, 1973]