ing supplies or services, or seek replacements, and, in case of default, terminate purchase orders, purchase from other sources, and charge contractors with resulting excess costs. In certain instances, Federal Supply Schedule contracts will provide for inspection at source, prior to shipment, by GSA. When the Federal Supply Schedule states that source inspection will be provided by GSA, ordering offices are relieved of dealing directly with contractors concerning specification compliance and acceptance or rejection of the supplies or services.

§ 101-26.403-2 Inspection.

(a) Acceptance inspection. (1) Acceptance inspection of supplies and services is necessary to assure compliance with the applicable specifications and other contractual requirements. Unless a particular Federal Supply Schedule specifically provides for source inspection by GSA, arrangements for inspection shall be the responsibility of the ordering agency. When assistance in inspection is desired, or the Federal Supply Schedule provides for source inspection by GSA, the ordering agency shall furnish two copies of the purchase order to the Chief, Quality Control Division, Federal Supply Service, at the GSA regional office serving the area where the plant is located or from which shipments are made. The purchase order shall indicate that inspection shall be performed at source, prior to shipment, by the Quality Control Division of the appropriate GSA regional office. In determining the need for assistance in inspection, when a Federal Supply Schedule does not provide for source inspection, the ordering agency shall consider the volume of the procurement, complexity of the items, and the past performance of the supplier.

(2) A copy of the GSA Form 308, Notice of Inspection, executed by the GSA Quality Control representative, will inform other than military consignees of acceptance and/or rejection determination. DD Form 250, Department of Defense Materiel Inspection and Receiving Report, will be used to inform military consignees of acceptance determination, and GSA Form 308, Notice of Inspection, will be used to inform the military consignees of rejection determination.

(3) Material which has been inspected by GSA and determined to be in com

pliance with specifications and technical contract requirements (quality inspection) shall not be reinspected by another agency for that purpose. Examination of delivery shall be limited to determination of quantity and condition upon receipt by consignee.

(b) Nonconforming supplies or services. (1) The ordering agency shall report to the GSA office executing the contract all significant instances where nonconforming supplies and services are received. Ordering officers have the right either to reject supplies defective in material or workmanship, or otherwise not in conformity with contract requirements, or to require their removal for correction or correction in place, by and at the expense of the contractor. Ordering offices may accept nonconforming supplies and services, and pay therefor at a proper reduction in price in accordance with the contract provisions, or may terminate the right of the contractor to proceed further under the purchase order. Unless the contractor corrects or replaces supplies within the delivery schedule, the ordering office may declare the contractor in default and purchase the supplies elsewhere against the contractor's account.

(2) When supplies have been inspected and rejected at source by GSA and replacement or correction will not be made by the contractor, the notice of rejection will so inform the ordering agency. The notice will contain appropriate recommendations regarding acceptance at a proper reduction in price or termination of the contractor's right to proceed and purchase elsewhere in accordance with § 101-26.403-5.

§ 101-26.403-3 Delinquent perform

ance.

Where the contractor fails to perform in accordance with the provisions of the contract, ordering offices may afford a further opportunity to perform or terminate the right of the contractor to proceed further under the purchase order, declare the contractor in default on the order, and purchase elsewhere against his account. Should the contractor allege that the failure in performance was due to an excusable cause precluding assessment of excess costs under the provisions of the contract, the GSA office executing the Schedule contract shall be notified promptly. In the absence of a decision by the contracting officer execut

All disputes concerning questions of fact arising under the contract which cannot be settled satisfactorily between the ordering office and the contractor shall be decided by the GSA contracting officer or by the Administrator, or his duly authorized representative, on appeal.

§ 101-26.403-5 Default; ordering office.

Any ordering office may, in respect to any one or more purchase orders placed by it under a contract, declare the contractor in default in accordance with the applicable contract provisions. However, before declaring a contractor in default, it is suggested that ordering offices should ordinarily notify the contractor in writing that unless satisfactory performance occurs within a specified time, which should allow a reasonable time for performance, the ordering office will terminate his right to proceed further under the purchase order and he will be held liable for any excess costs resulting from purchasing the supplies or services elsewhere. Such notice would not ordinarily be given when the default involves an attempted fraud on the United States, or when it would be obviously futile as, for example, when the contractor has already declined to perform. Where excess costs are anticipated, the ordering office may likewise withhold sufficient funds otherwise due the contractor as offset security. Ordering offices shall endeavor to minimize excess costs to be charged against the contractor and to collect by check or set off any excess costs owed (see § 18.602-6). The GSA office executing the contract shall be notified of all cases where an ordering office has declared a Federal Supply Schedule contractor in default.

§ 101-26.403-6 Default; GSA.

GSA may declare a contractor in default on an overall basis for any or all items covered by the contract, in accordance with the applicable contract provisions, as distinguished from ordering office action on individual orders. When notified of such action by GSA, ordering offices shall thereafter refuse to accept further performance by the contractor, shall not place further purchase orders with him, and shall purchase against the account of the contractor from replacing contractors designated by GSA, or in such other manner as directed by GSA. § 101-26.403-7 Failure to collect ex

cess costs.

Ordering offices shall report to the GSA office executing the Federal Supply Schedule contract involved those instances where they have been unsuccessful in collecting excess costs which have accrued against a defaulting contractor. Reports shall be made within sixty days from date of final payment to the new contractor from whom the replacement purchase was made and may be in letter form. Such reports shall provide complete information so as to identify properly the transaction and furnish necessary data, such as the name of the defaulting contractor, contract number, item number and description, Schedule price, and the amount of excess costs to be collected. In addition, complete information shall be reported concerning the supplier from whom substitute purchase was made, such as the name of the supplier, purchase price, order number or numbers on which payment was made, and contract number, if any. The GSA office will consolidate such data as reported and, in the absence of an available offset in that office, will submit such data through channels to the General Accounting Office for collection. § 101-26.404 [Reserved] § 101-26.405

Automatic data process

ing equipment.

The procurement of automatic data processing equipment, software, maintenance services, and supplies, is governed by Subpart 101-32.4. In connection with the procurement of these items from Federal Supply Schedule contracts, the special instructions in § 101-32.407 shall be observed in addition to the instructions in this Subpart 101-26.4. Where the provisions of this

Subpart 101-26.4 and Subpart 101-32.4 are in conflict, the latter shall govern. [34 F.R. 1239, Jan. 25, 1969]

§ 101-26.406 U.S. Government National Credit Card for use in obtaining service station deliveries and services.

§ 101-26.406-1 General.

(a) Standard Form 149, U.S. Government National Credit Card (illustrated in § 101-26.4901-149) is authorized for use by Federal agencies for obtaining authorized services and delivery of supplies at service stations dispensing supplies of contractors listed in Defense Fuel Supply Center Contract Bulletin DSA600-3.33. Activities requiring copies of the bulletin should submit requests to: Commander, Defense Fuel Supply Center, Attention: DFSC:PS, Cameron Station, Alexandria, Va., 22314.

(b) The use of Standard Form 149 is optional. However, the use of the form within an agency must be on a bureauwide or equivalent basis.

[35 F.R. 6708, Apr. 28, 1970]

§ 101-26.406-2 Billing code.

The billing code is a 10-digit number and always is the first embossed line on the Standard Form 149. Nine of the digits are assigned by the using agency in accordance with the following instructions:

(a) The first three digits of the billing code will always be 000 or 002. The digits 002 are special account numbers and may not be used unless authorized by General Services Administration, Federal Supply Service, Procurement Operations Division-FPN, Washington, D.C. 20406. These digits signify to the contractors that a Federal contract is involved.

(b) The fourth digit may be used by the agency to designate the vehicle class or for other purposes to meet the agency's requirements. If not used for any such purpose, the fourth digit will be zero.

(c) The fifth and sixth digits will be the Agency Code; except where the first four digits have been assigned to designate the agency, in which case the agency may use the fifth and sixth digits for any purpose desired. Agency codes are shown in Treasury Department booklet "Receipt, Appropriation, and Other Fund Account Symbols and Titles."

(d) The seventh, eighth, and ninth digits indicate the agency billing address code number; except where the first four digits cover the agency, in which case

the agency may use the seventh, eighth, and ninth digits for any purpose desired. Each Federal agency will assign its own billing address code numbers when the seventh, eighth, and ninth digits are used for such purpose.

(e) The tenth digit is the reject number for use in automatic billing operations of the contractors. This number is not assigned by the agency but will be determined by the Federal Supply Schedule, FSC Group 75, Part VII, embossing contractor, or by the GSA regional office embossing the card.

[29 F.R. 15611, Nov. 20, 1964, as amended at 34 F.R. 19977, Dec. 20, 1969]

The billing address is the name of the agency and the address to which contractors should send statements covering the purchases of supplies and services by the user of the Standard Form 149, U.S. Government National Credit Card. The number of lines in the billing address is limited to three, and shall always be the second, third, and fourth embossed lines.

§ 101-26.406-4 Administrative control of credit cards.

(a) When it is determined by Federal agencies that it is essential to maintain administrative control of Standard Form 149, U.S. Government National Credit Card, cr for any other justifiable reason, any or all of the following controls may be utilized:

(1) The tag or registration number of the vehicle may be embossed on the fifth line of the credit card so that it may be used only for supplies and services for the vehicle bearing the tag or registration number marked thereon. If no number is shown, the credit card may be used for supplies and services for any properly identified U.S. Government vehicle, boat, or small aircraft.

(2) An expiration date (month and year) may be embossed on the extreme right side of the fourth line of the credit card.

(3) An agency series mark to identify the credit card as a replacement may be embossed on the extreme right side of the fifth line of the credit card.

(b) In the event a credit card is lost, stolen, or damaged, the agency shall secure and issue a replacement card. If the lost, stolen, or damaged credit card is recovered, it shall be destroyed. Whenever a credit card is embossed with a tag

number and the license tag is destroyed or expires or if the credit card bears an expiration date which has expired, it shall be destroyed.

[35 F.R. 6708, Apr. 28, 1970]

§ 101-26.406-5 Methods of obtaining Standard Form 149: U.S. Government National Credit Card.

(a) Orders for 50 or more. (1) Agency purchase orders for 50 or more of embossed Standard Form 149 shall be forwarded to the embossing contractor as provided in Federal Supply Schedule, FSC Group 75, Part VII.

(2) The embossing contractor will bill ordering agencies directly.

(b) Requisition for 49 or less. (1) Agency requisitions for 49 or less of embossed Standard Form 149 shall be forwarded to the Transportation and Communications Service, Motor Equipment Division, of the nearest GSA regional office.

(2) Each agency shall furnish the billing code and billing address and, where appropriate, the vehicle tag or registration number, for each Standard Form 149 requisitioned. Such information shall accompany the requisition and shall be limited to five lines with no more than 22 characters (including spaces) per line. Where appropriate, the expiration date and the agency series mark shall also be included in the requisition.

(3) GSA will bill requisitioning agencies or will accept cash payment.

[29 F.R. 15611, Nov. 20, 1964, as amended at 31 F.R. 15571, Dec. 10, 1966; 35 F.R. 6708, Apr. 28, 1970]

The billing code(s) and billing address(es) as listed below, or attached hereto, to Standard Form 149:

NOTE: Tag or registration number, expiration date, and agency series mark optional on part of requesting activity.

(b) Once GSA has been officially notified of the assignment of billing codes and billing addresses, the agency may order additional Standard Form 149's using the same billing code and billing address without reporting such use. Changes in billing codes and billing addresses must be furnished GSA so that the contractors furnishing supplies and services may be informed. This is essential for proper control of billing procedures.

[31 F.R. 15571, Dec. 10, 1966 and 35 F.R. 6708, Apr. 28, 1970]

§ 101–26.406-7 Government Office waiver.

Printing

(a) Based on recommendations of the Interdepartmental Committee on Internal Security, it has been determined essential that security cabinets be made available for purchase under Federal Supply Schedule contracts by all Government contractors and subcontractors (at any tier) who are required to maintain custody of security classified records and information under any type of contract or subcontract.

(b) In accordance with section 201 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 481), the Administrator of General Services has determined that the purchase of security cabinets under Federal Supply Schedule contracts by Government prime contractors and their subcontractors for the protection of security classified in

formation represents procurement for the "use of executive agencies" under the statute.

§ 101-26.407-2 Applicability.

The provisions of this § 101-26.407 apply only to the purchase of security cabinets under Federal Supply Schedule contracts by fixed-price prime contractors and by first and lower tier subcontractors under any type of contract. They do not apply to the purchase of security cabinets under Federal Supply Schedule contracts by cost-type prime contractors. Such purchases are subject to the requirements of Subpart 1-5.9. § 101-26.407-3 Procedure for ordering security cabinets.

(a) Cognizant security offices will arrange to notify prime contractors and subcontractors who require security cabinets for the protection of security classified information that, subject to the conditions described in this § 101-26.4073 and in accordance with procedures included in Federal Supply Schedules, they may purchase such cabinets under the applicable Federal Supply Schedule contracts.

(b) Purchase orders for security cabinets under Federal Supply Schedule contracts submitted by fixed-price prime contractors or subcontractors under any type of contract shall contain a statement that such cabinets are needed for housing Government security classified information and that the purchase of such cabinets is required to comply with the security provision of a Government contract.

(c) A statement substantially as follows shall be placed on orders for security cabinets placed with Federal Supply Schedule contractors:

In the event of any inconsistency between the terms and conditions of this order and those of your Federal Supply Schedule contract, the latter will govern.

[31 F.R. 10923, Aug. 17, 1966, as amended at 36 F.R. 2600, Feb. 9, 1971]

§ 101-26.408-1 Description.

(a) Multiple-award Federal Supply Schedules cover contracts made with more than one supplier for comparable items at either the same or different prices for delivery to the same geographical area. These Schedules are identified by the inclusion, in the Special Provisions, of a paragraph entitled "Multiple Awards."

(b) Federal Supply Schedule contracts are made on a multiple-award basis when doing so is to the advantage of the Government in providing effective utilization of industry production and distribution facilities or in providing selectivity from among comparable items when there are no prescribed standards or specifications. [30 F.R. 11603, Sept. 10, 1965] § 101-26.408-2

price.

Procurement at lowest

Each purchase made from a multipleaward Schedule by agencies required to use such Schedules shall be made at the lowest delivered price available under that Schedule, unless the ordering agency fully justifies the purchase of a higher priced item. Other agencies using the Schedules are apprised of the advisability of fully justifying any orders placed with other than the contractor offering the lowest delivered price. [30 F.R. 11603, Sept 10, 1965] § 101-26.408-3 Justifications.

(a) Justifications of purchases made at prices other than the lowest delivered price available should be based on specific or definitive needs which are clearly associated with the achievement of program objectives. Mere personal preference cannot be regarded as an appropriate basis for a justification. Justifications should be clear and fully expressed. Recital of, or reference to, one of the factors set forth in paragraph (b) of this § 101– 26.408-3 is not sufficient.

(b) The following examples illustrate factors that may be used in support of justifications, when used with assertions that are fully set forth and documented.

(1) Special features of one item, not provided by comparable items, are required in effective program performance.

(2) An actual need exists for special characteristics to accomplish identified

tasks.

(3) It is essential that the item selected be compatible with items or systems already existing within using offices.