§ 5-2.406-4 Disclosure of mistakes after award.

(a) Where rescission or reformation of a contract is proposed, the contracting officer shall prepare an appropriate findings of fact and determination regarding the alleged mistake, including the relief, if any, to be granted pursuant to § 1-2.406-4(b). The findings and determination shall be prepared in duplicate and both copies signed by the contracting officer. These copies shall be forwarded, with the data required by § 1-2.406-4(f), to legal counsel, as prescribed in (b) below.

(b) Cases arising in regional offices shall be forwarded through channels to the Regional Counsel for review in connection with form, technical accuracy of the findings and determination, and general adequacy of the supporting evidence. The Regional Counsel shall then transmit the case with appropriate recommendations to the Office of General Counsel. Cases arising in the Central Office shall be forwarded by the contracting officer through channels to the Office of General Counsel.

(c) The findings and determination shall be reviewed and approved or disapproved by the General Counsel or his representative (an Associate or Assistant General Counsel). [26 F.R. 3307, Apr. 19, 1961]

§ 5-2.406-50 Submissions to the Comptroller General.

(a) Except as provided in (b) below, where the General Counsel determines that a mistake in bid case is sufficiently doubtful or that an administrative determination is precluded by the limitations set forth in § 1-2.406, a decision on the matter shall be requested from the Comptroller General.

(b) If time is of the essence, a contracting officer may submit, with the concurrence of legal counsel, cases of mistake in bid alleged prior to award, directly to the Comptroller General. [26 F.R. 3308, Apr. 19, 1961]

§ 5-2.407-6 Equal low bids, preferences. For the purpose of applying the policy established by § 1-2.407-6 of this title and to preclude any bidder from gaining an unfair advantage through the submission of multiple bids which are equal in all respects to other low bids received under the same invitation for bids, only one such bid shall be considered in the award by lot. The selection of the bid

AUTHORITY: §§ 5-3.102-50 to 5-3.650 issued under sec. 205(c), 63 Stat. 390; 40 U.S.C. 486 (c).

SOURCE: §§ 5-3.102-50 to 5-3.650 appear at 25 F.R. 5574, June 21, 1960, except as otherwise noted.

Subpart 5-3.1-Use of Negotiation § 5-3.102-50 Security requirements.

Where making classified information available to contractors or prospective contractors is contemplated, the request for proposals shall include the appropriate security requirements clause required by § 5-7.150, § 5-7.650, or § 5-7.5101. (See also § 5-2.201-50.) The release of classified information to contractors or prospective contractors shall be effected in accordance with the provisions of § 5-53.202.

[26 F.R. 12693, Dec. 29, 1961]

Subpart 5-3.2-Circumstances Permitting Negotiation

(a) Findings. In accordance with the requirements of sections 302 (c) (1) and 307 of the Federal Property and Administrative Services Act of 1949 (hereinafter referred to in this section as "the Act") and FPR 1-3.201, the Administrator of General Services has made the following findings:

(1) Section 302(c) (1) of the Act provides that purchases and contracts may be negotiated if determined to be necessary in the public interest during the period of a national emergency declared by the President or by the Congress.

(2) A state of national emergency exists by reason of Presidential Proclamation 2914, dated December 16, 1950 (3 CFR, 1949-1953 Comp., p. 99).

(3) As an anti-recession measure, designed to provide relief in labor surplus areas by a reversal of economic decline and a restoration of the Nation's economy to its full potential of productivity, the President has directed that prompt steps be taken to improve the machinery by which Federal contracts can be channeled to firms located in labor surplus areas.

(4) For the purpose of reducing dollar expenditures abroad and improving the Government's current balance of payments position, the President, in his message of February 6, 1961, to the Congress on this subject, declared that the policy inaugurated in November 1960 of emphasizing United States procurement for United States military forces abroad, wherever practicable, would be continued, even though some increased budgetary costs might be incurred.

(5) In furtherance of the Government's small business programs, the public interest will be served, under appropriate circumstances, by the negotiation of unilateral set-aside contracts with small business concerns where joint set-aside determinations by the Small Business Administration and the General Services Administration are not feasible.

(b) Determinations. Based upon the findings in paragraph (a) of this section, the Administrator of General Services has determined, within the purview of section 302 (c) (1) of the Act, that it is necessary in the public interest, during the period of the national emergency proclaimed by the President, to negotiate purchases and contracts without advertising in the following situations

and in accordance with regulations and procedures applicable to such negotiation:

(1) Procurements shall be set aside for negotiation exclusively with firms which will perform, or cause to be performed, a substantial proportion of the production under the contract within labor surplus areas, in accordance with the policies for assistance to labor surplus areas stated in the Office of Civil and Defense Mobilization Defense Manpower Policy No. 4, revised June 6, 1960 (25 F.R. 5283).

(2) When providing supply support to United States military forces abroad, procurement shall be restricted, wherever practicable, to supplies, equipment, and materiel of United States origin.

(3) Where small business joint setaside determinations are not feasible, unilateral set-aside contracts with small business concerns may be negotiated when it is determined by the contracting officer to be in the interest of (i) maintaining or mobilizing the Nation's full productive capacity, (ii) war or national defense programs, or (iii) assuring that a fair proportion of the total purchases and contracts for property and services for the Government is placed with small business concerns.

[26 F.R. 1631, Feb. 24, 1961]

(a) General. Except as specified in paragraphs (b) and (c) of this

§ 5-3.404-3, the fixed fee shall not exceed 10 percent of the estimated cost of the contract, exclusive of the fee, as determined by the head of the service conducting the procurement, at the time of entering into a cost-plus-a-fixed-fee contract.

(b) Experimental, developmental, or research work. The fixed fee shall not exceed 15 percent of the estimated cost of the contract, exclusive of the fee, as determined by the head of the service conducting the procurement, at the time of entering into a cost-plus-a-fixed-fee contract for experimental, developmental, or research work.

(c) Architectural or engineering services. The fixed fee shall not exceed 6 percent of the estimated cost of the project to which the fee is applicable, exclusive of fees, as determined by the

head of the service conducting the procurement, at the time of entering into a cost-plus-a-fixed-fee contract for architectural or engineering services relating to any public works or utility project. [25 F.R. 11030, Nov. 19, 1960]

§ 5-3.405-3 Letter contract.

(a) Limitation of use. Letter contracts shall be used only when the contracting officer has obtained prior approval of the head of the service conducting the specific procurement.

A

(b) Limitation of effectiveness. letter contract shall be superseded by a definitive contract not more than 90 days from the date of its execution unless prior approval is obtained from the head of the service conducting the procurement to extend the duration of the letter contract beyond 90 days.

(c) Limitation of liability. The maximum liability of the Government stated in a letter contract shall not exceed 50 percent of the total estimated cost of the procurement, except in cases where the cost of specialized equipment or materials (such as mechanical or electrical) to be acquired by the contractor as a part of the contract exceeds 50 percent of the total estimated cost thereof. The cost of the specialized equipment and material shall be the limitation in those cases where it exceeds the 50 percent limitation.

(d) Conditions for use. The authority to issue letter contracts is contingent on compliance with the following:

(1) Each letter contract shall contain all mandatory clauses and further shall contain a provision that the definitive contract will contain all mandatory clauses, and such other clauses, as are necessary to protect fully the interest of the Government.

(2) Each letter contract shall contain the estimated total cost of the procurement and a provision for further negotiation of the cost.

(3) The fixed fee in a cost-reimbursement type of letter contract shall not exceed the limitations set forth in § 53.404-3. In establishing the fixed fee, consideration shall be given to the following:

(i) The degree of risk to the contractor.

(ii) The estimated cost of the following as compared with the total estimated definitive contract price: material, sub

contracting, purchased parts, and "offthe-shelf" items.

(iii) The size of the proposed contract. (4) The profit to be paid shall be consistent with the protection afforded to the contractor in the minimizing or removal of risk to him, with due consideration given to the estimated cost of the following as compared to the total estimated definitive contract price: material, subcontracting, purchased parts, and "off-the-shelf" items.

[25 F.R. 11030, Nov. 19, 1960]

§ 5.3.450 Oral commitments-Defense Materials Service.

The Defense Materials Service may make oral commitments for the procurement of rubber and cordage fibers and such commitments must be confirmed on the approved GSA forms for the procurement of these commodities.

Subpart 5-3.6-Small Purchases § 5-3.602 Policy.

Where it is found that small purchases of special items not stocked by the Federal Supply Service or the GSA stockroom can be handled more economically at points of use, authority to make such purchases should be delegated to responsible employees of the requisitioning service or staff office. The requirements for procurement from mandatory sources of supply shall be complied with. § 5-3.603

§ 5-3.603-1

Competition.

Solicitation.

(a) Quotations may be solicited by use of written requests for quotations, telegram, telephone, or personal contact, whichever is considered the most appropriate for the particular transaction. It is the responsibility of the purchasing officer to determine in each instance the type of solicitation and quotation that is in the best interests of the Government.

(b) When written quotations are solicited for small purchases ($2500 or less), Standard Form 18 shall be used (see Subpart 1-16.2). It is not necessary to furnish prospective suppliers a copy to be retained unless requested by a supplier or it is known that a copy is desired. When Standard Form 18 is used by a purchasing activity, it constitutes merely a request for price quotations and is not an offer to purchase. Therefore, issu

ance by the Government of a purchase order pursuant to price quotations received on Standard Form 18 does not constitute acceptance but, instead, is a new offer to be accepted or rejected by the one quoting.

(c) When it is desirable to request quotations from outside the local trade area and time does not permit the use of written solicitations, telegraphic soTelegraphic licitation may be used.

solicitation shall not be used to solicit prices from local suppliers nor shall it be used if written requests for quotations will suffice.

(d) While there are instances where quotations should be solicited from additional sources, soliciting quotations from 2 to 4 suppliers ordinarily is sufficient although even this requirement may be reduced on full consideration of the factors set forth in § 1-3.603-1(c). Care should be taken to prevent administrative costs from being disproportionate to the amount of the purchase. The number of quotations obtained and considered or the number of sources of supply utilized when making small purchases will depend to a large extent on what knowledge the purchasing officer has of the current availability and price of the desired item in commercial markets. Such information may be available from past experience with the item or may require development.

§ 5-3.603-2 Data to support small purchases.

When other than the lowest quotation is used as the basis for the purchase, the reason(s) for rejecting the lower quotation shall be entered on the quotation form concerned.

§ 5-3.604 Imprest funds (petty cash) method.

and the quantity involved will generally govern the action to be taken. If a special item costing only a few dollars is required, a minimum amount of time and expense should be devoted to consummating the transaction. However, as a general rule purchases should be made from firms offering the best prices.

§ 5-3.604-6 Procurement and payment.

Purchases through use of imprest funds shall be accomplished by whichever of the following methods is determined to be most practical:

(a) Purchases by imprest fund cashiers. Imprest fund cashiers will make small purchases when so requested by an authorized ordering employee. In such cases the authorized ordering employee, or his designated agent, shall furnish the cashier with necessary information, such as unit, quantity, description, and delivery requirements. The cashier will make all necessary arrangements to consummate the purchase, including the arrangements for delivery.

(b) Purchases by ordering employees. Purchases by authorized ordering employees may be made either with advances of cash or with their own funds.

(c) Payment when Standard Form 44 is used. When small purchases are made locally on Standard Form 44, arrangement should be made where feasible to have an imprest fund cashier make payments therefor from his fund, within established limitations. It is more economical for the Government to pay by cash than to schedule the standard form to the disbursing officer and to issue a Government check, as well as being generally more acceptable to the vendors.

(d) Receipts. Authorized ordering employees, or their designated agents, shall comply with the receipt requirements on imprest fund transactions as prescribed herein. Each purchase made should be supported by an original bill, sales slip, cash register ticket, invoice, et cetera, of the dealer or by Standard Form 1165, or equivalent receipt form, itemizing the articles or services purchased and amount thereof.

§ 5-3.606-3 Establishment of account.

(a) Blanket purchase orders shall be established for a specific period of time (usually one month) during which individual purchases may be made against them. The using office should be requested to make specific arrangements with the purchasing activity concerning renewal orders. Blanket purchase orders shall not exceed $2,500 and, as a general rule, individual purchases made against such orders should not exceed $100. Users of blanket purchase orders shall also be subject to all applicable administrative instructions issued by the services and staff offices, such as restrictions on the dollar amounts for single purchases, or otherwise.

(b) The advantages both to the supplier and to the Government should be explained to the supplier. The supplier should be advised that the arrangement does not obligate the Government to buy.

(c) To the extent practicable, blanket purchase orders for like items shall be equitably distributed over a period of time among different suppliers. § 5-3.606-4

Documentation.

(a) After negotiations have been completed, blanket purchase orders normally

shall be documented on GSA Form 300, Furchase Order. Each blanket purchase order shall contain appropriate provisions relating to the following:

(1) Authorization to the supplier to furnish the supplies or services described in general terms in the order when called for by authorized person(s) listed therein during the period specified. Blanket purchase orders may be limited to specified items, commodity groups or classes, or the scope of the blanket purchase order may be unlimited for all items that the supplier is in a position to furnish.

(2) The aggregate amount authorized in any single blanket purchase order shall not exceed $2,500. As a general rule individual calls against such orders shall not exceed $100.

(3) The Government will be obligated only to the extent of the call orders actually made against the blanket purchase order by authorized persons.

(4) Suppliers shall be required to submit an invoice, no more frequently than monthly. The original of each delivery ticket shall accompany the invoice.

(5) When feasible, the blanket purchase order should specify the place (s) to which deliveries are to be made. (Usually the order will provide for delivery to the requiring activity.)

(6) The order should state, insofar as practicable, the discount terms which will apply to orders placed against the blanket purchase order.

(b) Only the persons whose names are listed in the blanket purchase order shall be permitted to request deliveries. Delivery (call) orders normally shall be made orally, either by telephone or in person. Procurement under blanket purchase orders may not be effected if the requirements are available from regular supply channels. Therefore, prior to placing calls against the blanket purchase order, each requirement shall be screened for availability from mandatory sources of supply. Necessary controls shall be maintained by the person placing call orders under the blanket purchase order to insure that the monetary limitation stated thereon is not exceeded. After the necessary screening of the requirements has been accomplished, the authorized person will place the call. The person placing the call will identify himself to the vendor and, after determining that the required supplies or services can be furnished, will establish