energy conservation and efficiency criteria shall be considered for application along with price and other relevant factors in the preparation of solicitations, the evaluation of offers, and the selection of bids and proposals for award.

(b) When procuring consumer products, executive agencies shall take into consideration energy use and efficiency labels and prescribed energy efficiency standards as they become available.

[43 FR 14315, Apr. 5, 1978]

§ 1-1.339-3 Definitions.

(a) The term "consumer product" means any article (other than an automobile, as defined in section 501(1) of the Motor Vehicle Information and Cost Savings Act) of a type:

(1) Which in operation consumes, or is designed to consume, energy; and

(2) Which, to any significant extent, is distributed in commerce for personal use or consumption by individuals; without regard to whether such article of such type is in fact distributed in commerce for personal use or consumption by an individual.

(b) The term "covered product" means a consumer product of one of the following types:

(1) Refrigerators and refrigeratorfreezers.

(2) Freezers.

(3) Dishwashers.

(4) Clothes dryers.

(5) Water heaters.

(6) Room air-conditioners.

(7) Home heating equipment, not in

cluding furnaces.

(8) Television sets.

(9) Kitchen ranges and ovens.

(10) Clothes washers.

(11) Humidifiers and dehumidifiers. (12) Central air-conditioners.

(13) Furnaces.

(14) Any other type of product which the Secretary of Energy classifies as a covered product pursuant to 42 U.S.C. 6292(b).

(c) The term "energy use and efficiency label" means a label required to be provided by manufacturer of a covered product pursuant to 42 U.S.C. 6296.

(d) The term "manufacturer" means any person who manufactures a consumer product.

(e) The term "energy efficiency standard" means a performance standard:

(1) Which prescribes a minimum level of energy efficiency for a covered product, determined in accordance with test procedures prescribed under 42 U.S.C. 6293; and

(2) Which includes any other requirements which the Secretary of Energy may prescribe under 42 U.S.C. 6295(c).

(f) The term "manufacture" means to manufacture, produce, assemble, or import.

[43 FR 14315, Apr. 5, 1978]

§ 1-1.402 Authority of contracting offi

cers.

Contracting officers are authorized to enter into and administer contracts for personal property and nonpersonal services (including construction) on behalf of the Government and make related findings and determinations within the limitations of the authority delegated to them. In the exercise of such authority, they are subject to the requirements in § 1-1.403 and any further requirements, consistent with the Federal Procurement Regulations, imposed by the contracting agency.

§ 1-1.403 Requirements to be met before entering into contracts.

No contract shall be entered into unless all applicable requirements of law, Executive orders and regulations have been met. The term "regulations" includes those issued by any regulatory agency whether or not incorporated or referenced in the Federal Procurement Regulations.

§ 1-1.404 Selection, designation, and termination of designation of contracting officers.

Contracting officers shall be selected, designated as such, and their designations terminated as provided in agency procedures. Such agency procedures shall conform to the provisions of this § 1-1.404.

In selecting individuals to serve as contracting officers or in positions which include authority to act as contracting officers, consideration shall be given to experience, training, education, business acumen, judgment, character, reputation, and ethics. In considering experience, training, and education, the following shall be evaluated:

(a) Experience in the field of procurement involved (e.g., supply, construction, etc.) gained in a Government or non-Government procurement office, or otherwise;

(b) Formal education or special training, including Government conducted or sponsored courses, in pertinent fields, such as business administration, law, accounting, engineering, architecture, or related fields; and

(c) Knowledge of applicable laws, Executive orders, and regulations.

§ 1-1.404-2 Designation.

Designation of individuals to act as contracting officers may be accomplished by delegation of authority to individuals or to positions. In the latter case, unless otherwise provided by the agency, any individual authorized to serve in such a position is a contracting officer. In either case, however, the instrument of designation shall include, or make specific reference to, any limitations on the scope of authority to be exercised, other than those contained in applicable laws, regulations, or directives. Appropriate records shall be maintained, whether designation be made by name or by reference to organizational title or position designation.

ized act is intended and must be signed by a person authorized to ratify such acts. Generally such ratification may be made only by an official on whose behalf the contract was made and then only: (a) if he could have given authority to enter into the contract before it was awarded and (b) if he still has power to do so at the time of ratification.

§ 1-1.406 Cost Accounting Standards.

The contracting officer or his authorized representative shall:

(a) Determine the adequacy of prime Contractor's Disclosure Statement(s)—– Cost Accounting Practices and Certification (see § 1-3.1203(a));

(b) Determine whether prime contractor's Disclosure Statements are in compliance with Part 1-15 and Cost Accounting Standards promulgated by the Cost Accounting Standards Board (see § 1-3.1220);

(c) Determine contractor compliance with Cost Accounting Standards and Disclosure Statements, if applicable; and

(d) Negotiate price adjustments and execute supplemental agreements pursuant to the Cost Accounting Standards clause set forth in § 1-3.1204. [39 FR 43058, Dec. 10, 1974]

Subpart 1-1.5-Contingent Fees

§ 1-1.500 Scope of subpart.

This subpart prescribes the use by executive agencies of the "covenant against contingent fees" and sets forth the policies, forms, methods, procedure, principles, and standards related thereto. The requirements of this subpart have as their objective the prevention of improper influence in connection with the obtaining of Government contracts, the elimination of arrangements which encourage the payment of inequitable and exorbitant fees bearing no reasonable relationship to the services actually performed, and the prevention of unwarranted expenditure of public funds which inevitably results therefrom. The methods used to achieve these objectives are the requirement for disclosure of the details of arrangements under which agents represent con

COVENANT AGAINST CONTINGENT FEES

The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this contract without liability or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or contingent fee.

[31 FR 5880, Apr. 16, 1966]

§ 1-1.504 General principles and standards applicable to the covenant.

§ 1-1.504-1 Use of principles and standards.

The principles and standards set forth in this subpart are intended to be used as a guide in the negotiation, awarding, administration, and enforcement of Government contracts.

§ 1-1.504-2 Contingent character of the fee.

Any fee whether called commission, percentage, brokerage, or contingent fee, or otherwise denominated, is within the purview of the covenant if, in fact, any portion thereof is dependent upon success in obtaining or securing the Government contract or contracts involved. The fact, however, that a fee of a contingent nature is involved does not preclude a relationship which qualifies under the exceptions to the prohibition of the covenant.

§ 1-1.504-3 Exceptions to the prohibition.

There are excepted from the prohibition of the covenant "bona fide employees" and "bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business."

§ 1-1.504-4 Bona fide employee.

(a) The term "bona fide employee," for the purpose of the exception to the prohibition of the covenant, means an individual (including a corporate officer) employed by a concern in good faith to devote his full time to such concern and no other concern and over whom the concern has the right to exercise supervision and control as to time, place, and manner of performance of work. It is recognized that a concern, especially a small business concern, may employ an individual who represents other concerns. The factors set forth in § 1-1.504-5(b), except (4) thereof, shall be applied to determine whether such an individual comes within the exception to the prohibition of the covenant.

(b) The hiring must contemplate some continuity and it may not be related only to the obtaining of one or more specific Government contracts.

(c) An employee is not "bona fide" who seeks to obtain any Government contract or contracts for his employer through the use of improper influence or who holds himself out as being able to obtain any Government contract or contracts through improper influence.

(d) A person may be a bona fide employee whether his compensation is on a fixed salary basis or, when customary in the trade, on a percentage, commission or other contingent basis, or a combination of the foregoing.

§ 1-1.504-5

Bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business.

(a) An agency or agent is not "bona fide" which seeks to obtain any Government contract or contracts for its principals through the use of improper influence or which holds itself out as being able to obtain any Government contract or contracts through improper influence.

(b) In determining whether an agency is a "bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business," the factors set forth below shall be considered. They are necessarily incapable of exact measurement or precise definition and it is neither possible nor desirable to prescribe the relative weight to be given any single factor as against any other factor or as against all other factors. The conclusions to be reached in a given case will necessarily depend upon a careful evaluation of the agreement and other attendant facts and circumstances.

(1) The fees charged should not be inequitable and exhorbitant in relation to the services actually rendered. That is, the compensation should be commensurate with the nature and extent of the services and should not be excessive as compared with the fees customarily allowed in the trade concerned for similar services related to commercial (non-Government) business. In evaluating reasonableness of the fee, there should be considered services of the agent other than actual solicitation, as for example, technical, consultant or managerial services, and

assistance in the procurement of essential personnel, facilities, equipment, materials, or subcontractors for performance of the contract.

(2) The selling agency should have adequate knowledge of the products and the business of the concern represented, as well as other qualifications necessary to sell the products or services on their merits.

(3) There should ordinarily be a continuity of relationship between the contractor and the agency. The fact that the agency has represented the contractor over a considerable period of time is a factor for favorable consideration. It is not intended, however, to disqualify newly established contractor-agent relationships where a continuing relationship is contemplated by the parties.

(4) It should appear that the agency is an established concern. The agency may be either one which has been in business for a considerable period of time or a new agency which is a presently going concern and which is likely to continue in business as a commercial or selling agency in the future. The business of the agency should be conducted in the agency name and characterized by the customary indicia of the conduct of a regular business.

(5) The fact that a selling agency confines its selling activities to the field of Government contracts does not, in and of itself, disqualify it under the covenant. The fact, however, that the selling agency is employed to secure business generally, that is, to represent the concern in connection with sales to the Government as well as regular commercial sales to nonGovernment activities is a factor entitled to favorable consideration in evaluating the case as one coming within the authorized exception. Arrangements confined, however, to obtaining Government contracts, particularly those involving a selling agency organized immediately prior to or during ⚫ periods of expanded procurement resulting from conditions of national emergency, must be closely scrutinized.

§ 1-1.504-6 Fees for "information."

Contingent fees paid for "information" leading to obtaining a Govern

ment contract or contracts are included in the prohibition and, accordingly, are in breach of the covenant unless the agent qualifies under the exception as a bona fide employee or a bona fide established commercial or selling agency maintained by the contractor for the purpose of securing business.

§ 1-1.505 Representation and agreement required from prospective contractors. Except as provided in § 1-1.507-3, each executive agency shall inquire of and secure a written representation from prospective contractors as to whether they have employed or retained any company or person (other than a full-time employee working solely for the prospective contractor) to solicit or secure the contract, and shall secure a written agreement to furnish information relating thereto as required by the contracting officer. Where an invitation for bids is issued, this inquiry shall be made (and written representation and agreement secured) by requiring the bidder (or contractor) to check the appropriate box in the following statement (which appears on Standard Form 21, Bid Form (Construction Contract), Standard Form 30, Invitation and Bid (Supply Contract), and Standard Form 33, Invitation, Bid and Award (Supply Contract)) to be included in the invitation or bid form:

The bidder represents: (a) That he has, has not, employed or retained any company or person (other than a full-time bona fide employee working solely for the bidder) to solicit or secure this contract, and (b) that he has, has not, paid or agreed to pay any company or person (other than a full-time bona fide employee working solely for the bidder) any fee, commission, percentage or brokerage fee, contingent upon or resulting from the award of this contract; and agrees to furnish information relating to (a) and (b) above as requested by the Contracting Officer. (Note: For interpretation of the representation, including the term "bona fide employee," see Code of Federal Regulations, Title 41, Chapter I, Subpart 1-1.5.)

§ 1-1.506 Interpretation of the representation.

(a) For the purpose of the representation and agreement required from the prospective contractor, as de