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For all other contracts, progress payment provisions shall be based on costs, as provided in FAR 32.5, as supplemented by Subpart 432.5, except that progress payments based on a percentage or stage of completion may be authorized on a case-by-case basis by the HCA or designee when a determination is made that progress payments based on costs cannot be employed practically and that there are adequate safeguards provided for the administration of progress payments based on a percentage or stage of completion. [50 FR 14198, Apr. 10, 1985]

432.103 Progress payments construction contracts.

The Government does not, in the course of making progress payments under a fixed-price construction contract, reimburse the contractor for any amount of paid bond premiums in addition to the stated contract price. When the contractor furnishes evidence to the contracting officer that the surety company has been paid in full for bond premiums and requests reimbursement therefore, the first subsequent progress payment shall include the total amount attributable to such bond premiums and the Government shall pay that amount in full without proration or affixing any retainage then or later. [53 FR 6067, Feb. 29, 1988]

432.111 Contract clause.

The contracting officer shall insert the clause at 452.232-74, Reimbursement for Bond Premiums-Fixed-Price Construction, whenever the clause at FAR 52.232-5 is used in a contract. [53 FR 6067, Feb. 29, 1988]

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resolution and notify the protester in writing of the action taken. The written final decision shall include a paragraph substantially as follows:

This decision shall be final and conclusive unless a further written notice of protest is filed with the General Accounting Office in accordance with 4 CFR Part 21 or, when applicable, with the General Services Board of Contract Appeals in accordance with 48 CFR Part 61.

The contracting officer need not notify the contractor if the protest can be promptly resolved. If the protest appears to have merit, or if the contracting officer denies the protest but has reason to believe that the protester will file a protest with the GAO or the GSBCA, the contracting officer should promptly notify the contractor in writing and consider suspending contract performance.

433.104 Protests to GAO.

(a) The Director, Office of Operations, has furnished to the GAO a list of the name, title, address and telephone number of an official in each of the contracting activities whom the GAO can contact regarding protests. Contracting activities shall promptly notify the Chief, 00, Procurement Division, of any changes to the list.

(b) Protests received after award shall be handled in accordance with the contracting activities' internal procedures.

(c) If the protest involves significant legal issues, the Office of Operations and the Office of the General Counsel will, upon request, assist contracting activities to reach a proper resolution of the protest.

(d) The HCA shall report to the GAO pursuant to FAR 33.104(f) when the contracting activity has decided not to comply with the GAO's recommendation.

433.105 Protests to GSBCA.

(a) Upon receiving notification of a protest filed with the GSBCA, the contracting officer shall promptly notify the Assistant General Counsel, Research and Operations Division, and coordinate with OGC the contracting activity's response to the protest. The OGC will provide necessary legal counsel.

(b) The HCA shall make the determination under FAR 33.105(d)(2) whether to proceed with award of a contract that has been protested to the GSBCA and is pending a final decision.

Subpart 433.2-Disputes and
Appeals

SOURCE: 49 FR 12125, Mar. 28, 1984, unless otherwise noted. Correctly redesignated at 51 FR 41790, Nov. 19, 1986.

433.203 Applicability.

(a) The Assistant Secretary for Administration is authorized to determine the applicability of the Contract Disputes Act to contracts with foreign governments pursuant to FAR 33.203.

(b) A written determination shall be prepared for the Assistant Secretary's signature and submitted by the HCA to the Director, Office of Operations, for review and referral to the Assistant Secretary.

433.203-70 Agriculture Board of Contract Appeals.

The Agriculture Board of Contract Appeals (AGBCA) is authorized by the Secretary of Agriculture to hear, consider and determine appeals by contractors from decisions of USDA contracting officers under a contract or relating to a contract made by the Department or by any other executive

agency when such agency or the Administrator for Federal Procurement Policy has designated the Board to decide the appeal. All appeals brought before the Board are subject to the AGBCA Rules of Procedure in 7 CFR, Part 24.

All correspondence and documents to be filed with the Board should be addressed to the Board of Contract Appeals, U.S. Department of Agriculture, Washington, DC 20250.

433.209 Suspected fraudulent claims.

The contracting officer shall refer all matters related to suspected fraudulent claims by a contractor under the conditions in FAR 33.209 to the Office of the Inspector General for further action or investigation.

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SUBCHAPTER F-SPECIAL CATEGORIES OF CONTRACTING

PART 434-MAJOR SYSTEM ACQUISITION

Sec.

434.001 Implementation.

434.002 Policy.

434.003 Responsibilities.

434.004 Acquisition strategy.

AUTHORITY: 5 U.S.C. 301 and 40 U.S.C.

486(c).

SOURCE: 49 FR 12126, Mar. 28, 1984, unless otherwise noted.

434.001 Implementation.

(a) Definition. For the purpose of applying the policy and procedures of OMB Circular No. A-109 within the USDA, the definition of a major system contained in the Circular is to be followed subject to the following:

(1) All system acquisitions which are expected to result in at least 50 million dollars of acquisition costs with private industry are considered to be major system acquisitions and are subject to the requirements of OMB Circular No. A-109.

(2) Other system acquisitions not expected to result in acquisition costs in excess of this 50 million dollar limit may be specifically designated major system acquisitions subject to A-109 by the USDA Acquisition Executive.

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(3) Classification as a major system acquisition is independent of the number of component USDA contracting activities involved in the process. A major system acquisition may occur entirely within the jurisdiction of a single contracting activity or may involve more than one component USDA contracting activity.

(4) The Major Missions of USDA are documented in the USDA Program Structure Dictionary. All major system acquisitions will be in response to a "need" of one of these Major Missions.

(b) Exemption. Acquisition of major ADP systems which would otherwise be subject to the requirements of this section and OMB Circular A-109 are exempted from these requirements. USDA has other existing controls which provide the necessary reviews,

approval and monitoring procedures to manage major ADP systems acquisitions.

434.002 Policy.

USDA concurs with the objecives of OMB Circular A-109 to assure effectiveness and efficiency in acquiring major systems and also views the guidelines stated in A-109 as necessary steps in the acquisition of any system, be it major or otherwise. The steps outlined in the Circular should serve as a guide to all contracting activities in the planning and developing of all systems. These steps should include:

(a) Expressing needs in "mission terms" to encourage innovation;

(b) Emphasizing initial activities of the system acquisition process;

(c) Communicating with Congress at an early stage;

(d) Establishing clear lines of authority, responsibility, and accountability; (e) Designating focal points for integration and unification of activities; and

(f) Relying on private industry in accordance with the policies established by OMB Circular No. A-76.

434.003 Responsibilities.

(a) The Secretary of Agriculture is charged by OMB Circular No. A-109 with the responsibility for making four key decisions in each major system acquisition process. These are summarized in paragraph nine of the Circular and elaborated in paragraphs ten through thirteen.

(b) The key executives of USDA, i.e., the Secretary, Deputy Secretary, Under Secretaries, and Assistant Secretaries, individually or as a group, will participate in the identification and definition of specific mission needs to be fulfilled in USDA and in the assignment of priorities to these needs. They will also be involved in assisting the Secretary in making the "key decisions" identified in A-109.

(c) The Assistant Secretary for Administration has been designated by the Secretary to be the Departmental Acquisition Executive. The Assistant Secretary will assure that OMB Cir

cular No. A-109 is implemented in USDA and ensure that the management objectives of the Circular are realized. The Acquisition Executive is responsible for designating the program manager for each Major System Acquisition designating any acquisition in the Department as a Major System Acquisition and approving the written charter and project control system for each Major System Acquisition.

(d) The Office of Operations will serve as the cognizant staff office in assisting the Assistant Secretary for Administration in carrying out the above responsibilities. The Office of Operations will access the budget development and review process to identify potential major system acquisitions and bring them to the attention of the Assistant Secretary.

(e) HCA's must:

(1) Become familiar with the requirements of OMB Circular No. A-109 and ensure that contracting activity personnel are knowledgeable regarding the Circular.

(2) Take such steps as are necessary to ensure that all potential Major System Acquisitions are brought to the attention of the Acquisitions Executive.

(3) Recommend qualified candidates for designations as program managers for each major system acquisition within their jurisdictions.

(4) Ensure that program managers fulfill their responsibilities and discharge their duties.

(5) Cooperate with the Assistant Secretary for Administration and the Office of Finance and Management in implementing the requirements of the Circular.

(6) Adhere to the principles outlined in the Circular with regard to all major system acquisitions.

(7) Use the principles outlined in the Circular as a guideline for other acquisitions.

(f) Program Managers will:

(1) Plan and carry out the proposed objective of the Major System Acquisition.

(2) Schedule and monitor all aspects of the projects using an appropriate project control system.

(3) Provide analysis papers to recommend decisions to the key executives of USDA and the Secretary.

(4) Document USDA compliance with A-109.

434.004 Acquisition strategy.

(a) The Program Manager will assume operational responsibility for the planning and execution of the Major System Acquisition upon designation by the Acquisition Executive.

(b) The Program Manager will work closely with the Acquisition Executive to develop a written charter outlining the authority, responsibility, accountability, and budget for accomplishing the proposed objective.

(c) The Program Manager will develop a project control system to schedule, monitor, and regularly report on all aspects of the project. The control system will be presented to the Acquisition Executive for approval. In developing the control system, the Program Manager shall provide for appropriate reporting periods and for checkpoints consistent with the "key decisions" Section No. 9 of OMB Circular No. A-109.

(d) Upon initiation of the project, the Program Manager will report regularly (at least monthly) to the Acquisition Executive on the progress achieved to that point. The reports shall include information with regard to the requirements of OMB Circular No. A-109 and how the objectives of the Circular have been realized to present time. Also, the reports shall contain a statement as to what is planned for the next reporting period both in terms of the project itself and the requirements of A-109.

(e) As each "key decision" point is reached, the Program Manager will prepare detailed analysis, findings and recommendations to be submitted, through the Acquisition Executive, to the key executives in the Department. The program manager shall also prepare additional reports and documentation as requested by the key executives.

(f) The Program Manager will work closely with the Director, Office of Finance and Management, with regard to budgeting and financing for the system and will provide the necessary information to OMB and Congress as required by Circular A-109.

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