Federal Acquisition Regulation; Reorganization of FAR Part 13, Simplified Acquisition Procedures

Federal RegisterSep 13, 1996

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SUMMARY: The Federal Acquisition Regulatory Council is proposing to

amend the Federal Acquisition Regulation (FAR) to reorganize Part 13

for clarity and make other changes to facilitate the use of electronic

commerce in contracting. This effort was initiated as a result of

public comments received during the comment period on FAR Case 94-770

published in the Federal Register as an interim rule on July 3, 1995

(60 FR 34741). This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993. This is not a major rule under 5 U.S.C. 804.

DATES: Comments on the proposed rule should be submitted on or before

November 12, 1996 to be considered in the formulation of the final

rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th and F

Streets, NW, Room 4037, Washington, DC 20405. Please cite FAR Case 94-

772 in all correspondence related to this issue.

FOR FURTHER INFORMATION CONTACT: For further information, contact Paul

Linfield at (202) 501-1757 or the FAR Secretariat, Room 4037, GS

Building, Washington, DC 20405; (202) 501-4755. Please cite FAR case

94-772.

SUPPLEMENTARY INFORMATION:

A. Background

FAR Case 94-772 was initiated in November 1995 as a result of

comments received on FAR Case 94-770 published as an interim rule in

the Federal Register on July 3, 1995. Two commenters noted that the

poor organization of Part 13 and the significant increase in the number

of quotes to be evaluated when using FACNET to conduct acquisitions

under the simplified acquisition threshold could detract from the

realization of the Administration's and the Congress' goals for

acquisition reform.

In its comments, the General Services Administration observed that

the deficiencies in the organization of Part 13 would become even more

apparent as the dual objectives of the Administration and the Congress

of reducing the number of contracting officers holding warrants and

empowering program personnel to make purchasing decisions were

realized. These individuals' reliance on their purchasing activities to

support their program requirements would be reduced substantially.

However, as a consequence, these individuals would be forced to rely on

the FAR in making purchasing decisions, especially under the micro-

purchase threshold ($2,500). The GSA noted, for example, that the FAR

was virtually silent on the use of the Governmentwide commercial

purchase card, a special credit card that agencies could make available

to individuals to make and/or to pay for purchases, especially ones

that were valued at less than the micro-purchase threshold. Both the

National Performance Review and the Congress anticipate expansion of

the use of the Governmentwide commercial purchase card will compensate

for or allow agencies to make further reductions in contracting

personnel.

Micro-purchases and other contract actions under the simplified

acquisition threshold comprise approximately 95 percent of the total

Governmentwide contract actions made annually. Most of these are made

using procedures authorized in Part 13. For this reason, the GSA

stressed that this part of the FAR needs to be written in a clear and

cohesive manner.

In its comments, the Office of Federal Procurement Policy described

how the use of the Federal Acquisition Computer Network (FACNET) to

conduct acquisitions under the simplified acquisition threshold was

expected to result in a substantial increase in the number of quotes

and products submitted by small businesses in response to agency

solicitations. FACNET is authorized in the Federal Acquisition

Streamlining Act (FASA) and is intended to promote the evolution of the

Government's acquisition process from one that is primarily paper-

oriented to one that is conducted primarily through electronic

commerce. A logical consequence of using FACNET to conduct acquisitions

under the simplified acquisition threshold was that the traditional

select vendor community that previously was the primary source for

small dollar transactions would be replaced by a nationwide vendor

community made up of many unknown suppliers offering unfamiliar

products. This greatly increased supplier base offering many unfamiliar

products would have to be evaluated by substantially reduced agency

procurement workforces that had not been exempted from the downsizing

experienced by Federal agencies over the last several years.

As a result of issues posed in these comments, a small interagency

team was formed to review the interim rule, the disposition of public

comments, and to reorganize FAR Part 13 in a more logical and process

oriented manner. Included in the tasking to the team was that the

reorganization should emphasize such goals of acquisition reform as

maximizing the use of (1) FACNET versus paper contracts, (2) simplified

acquisition procedures for all procurements under the simplified

acquisition threshold, and (3) the Governmentwide commercial purchase

card. The team was also asked to develop strategies that facilitated

the use of FACNET for purchases made using simplified acquisition

procedures and to eliminate inconsistencies between Part 12 and Part 13

(e.g., the use of Standard Form 1449, Solicitation/Contract/Order for

Commercial Items).

Elements of this direction that could not be implemented in the

final rule on FAR Case 94-770 published in the Federal Register on July

26, 1996 are the subject of this proposed rule. The most important

organizational changes made in this proposed rule were the

consolidation in Subpart 13.3 of all simplified acquisition procedures

for conducting micro-purchases and other purchases under the simplified

acquisition threshold and the consolidation of forms used in simplified

acquisitions in a new section 13.309. Other changes of note to Part 13

were the placement of existing guidance in more appropriate sections,

resulting in the removal of five existing sections and the development

of a new Subpart 13.2 for micro-purchases; the addition of section

13.303 providing guidance on the use of the Governmentwide commercial

purchase card, a subject on which the current Part 13 is virtually

silent; the addition of section 13.306 providing a ``streamlined''

optional clause for use in simplified acquisitions for other than

commercial items that parallels certain aspects of 52.212-4 for

commercial items. Collateral changes

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are proposed in other FAR parts to make necessary citation changes

because of material relocated within Part 13.

To facilitate the use of FACNET and reduce the size of agency

solicitations, revisions are proposed to Part 52 to permit any

provision or clause prescribed in agency acquisition regulations to be

incorporated by reference if it can be accessed by potential

contractors on the Internet. Section 52.102 has been retitled and

rewritten. Other changes proposed include revisions to sections 52.252-

1, Solicitation Provisions Incorporated by Reference; 52.252-2, Clauses

Incorporated by Reference; and the addition of a new section 52.252-xx,

Agency and FAR Provisions and Clauses Accessible Electronically.

Comments on whether the proposed rule improves the utility to users

of Part 13 are encouraged. Comments on new material added in Parts 13

and 52, especially with regard to the clauses, are also encouraged.

Comments previously submitted on FAR Case 94-770 were considered in

drafting the final rule.

This rule does not address changes called for by section 4203 of

the Federal Acquisition Reform Act. That section requires that the FAR

establish special simplified procedures for the acquisition of

commercial items with a value greater than the simplified acquisition

threshold but not greater than $5 million. A separate rule is being

published to implement section 4203. A reconciliation of these two

rules will take place after receipt of public comments.

B. Regulatory Flexibility Act

Changes proposed to Part 13 are not expected to have a significant

impact on small entities. However, revisions proposed in Part 52 may

have an economic effect on a substantial number of small entities,

since it will encourage those small entities that desire to do business

with Federal agencies to have the ability to access electronically

provisions and clauses used in Federal agency procurements.

Accordingly, an initial regulatory flexibility analysis has been

prepared and submitted to the Chief Counsel for Advocacy of the Small

Business Administration.

This initial regulatory flexibility analysis explains how the

current trend in both the private sector and the Government to reduce

the use of paper transactions by conducting business electronically

will accelerate in the future. FACNET, authorized by FASA, already

requires entities desiring to do business with Federal agencies to

possess a computer and modem and subscribe to a Value Added Network

(VAN). This same equipment would be used to access Internet.

Consequently, the additional expense to small entities is anticipated

to be the cost of acquiring Internet access if they do not currently

subscribe.

While provisions and clauses are not required for micro-purchases,

estimated to account for 40 percent of contract actions below $25,000,

the proposed rule still would apply to approximately 3.9 million

contract actions awarded annually to small business concerns.

Currently, the FAR requires that when provisions and clauses are

incorporated by reference, the contracting officer, upon request, must

make the full text available to the requester. The proposed rule

retains this requirement.

Expanded usage of incorporation by reference can reduce the costs

associated with participating in agency procurement opportunities for

many small entities, since some VANs charge their subscribers by the

number of characters sent or received. Incorporation by reference

permits agencies to abbreviate the size of solicitations and award

documents and also reduces the amount of data that potential

contractors must submit back to the contracting officer.

A copy of the IRFA may be obtained from the FAR Secretariat (see

ADDRESSES). Comments are invited. Comments from small entities

concerning the affected FAR subpart will be considered in accordance

with 5 U.S.C. 610. Such comments must be submitted separately and

should cite 5 U.S.C. 601, et seq., FAR Case 94-772, in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

rule does not impose any additional reporting or information collection

requirements which require Office of Management and Budget approval

under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 4, 12, 13, 16, 41, 43, 49, 52, and

Government procurement.

Dated: September 9, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

For the reasons set forth above it is proposed that 48 CFR Parts 4,

12, 13, 16, 41, 43, 49, 52, and 53 be amended as set forth below:

1. The authority citation for 48 CFR Parts 4, 12, 16, 41, 43, 49,

52 and 53 continues to read as follows.

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 4--ADMINISTRATIVE MATTERS

4.800 [Amended]

2. Section 4.800 is amended to revise the reference in the

parenthetical to read ``13.302(d)''.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

3. Section 12.102 is amended to revise paragraph (d)(2) and (d)(3)

to read as follows:

12.102 Applicability.

* * * * *

(d) * * *

(2) Using the Standard Form 44 (see 13.309(d));

(3) Using the imprest fund (see 13.307); or

* * * * *

12.206, 12.301, and 12.602 [Amended]

4. Sections 12.206, 12.301(c)2), and 12.602 (a) and (b) are amended

to replace the references to 13.106-2 with 13.302.

5. Part 13 is revised to read to read as follows:

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

13.000 Scope of part.

Subpart 13.1--General

13.101 Definitions.

13.102 Purpose.

13.103 Policy.

13.104 Procedures.

13.105 Small business set-asides.

13.106 Legal effect of quotations.

13.107 Federal Acquisition Streamlining Act of 1994 (FASA) list of

inapplicable laws.

13.108 Inapplicable provisions and clauses.

Subpart 13.2--Micro-Purchases

13.201 General.

13.202 Purchase guidelines.

Subpart 13.3--Simplified Acquisition Procedures

13.301 Use of options.

13.302 Soliciting competition, evaluation of quotes or offers,

award, and documentation.

13.303 Governmentwide commercial purchase card.

13.304 Purchase orders.

13.304-1 General.

13.304-2 Unpriced purchase orders.

13.304-3 Obtaining contractor acceptance and modifying purchase

orders.

13.304-4 Termination or cancellation of purchase orders.

13.304-5 Clauses.

13.305 Blanket purchase agreements (BPAs).

13.305-1 General.

13.305-2 Establishment of BPAs.

13.305-3 Clauses.

13.305-4 Purchases under BPAs.

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13.305-5 Review procedures.

13.305-6 Completion of BPAs.

13.306 Optional clause.

13.307 Imprest funds and third party drafts.

13.307-1 General.

13.307-2 Agency responsibilities.

13.307-3 Conditions for use.

13.307-4 Procedures.

13.308 Fast payment procedure.

13.308-1 General.

13.308-2 Conditions for use.

13.308-3 Preparation and execution of orders.

13.308-4 Contract clause.

13.309 Forms.

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

13.000 Scope of part.

This part prescribes policies and procedures for the acquisition of

supplies and services, including construction, research and

development, and commercial items, the aggregate amount of which does

not exceed the simplified acquisition threshold (see 2.101). See Part

12, Acquisition of Commercial Items, for policies applicable to the

acquisition of commercial items exceeding the micro-purchase threshold.

See 36.602-5 for simplified procedures to be used when acquiring

architect-engineering services.

Subpart 13.1--General

13.101 Definitions.

``Bulk funding,'' as used in this part, means a system whereby a

contracting officer receives authorization from a fiscal and accounting

officer to obligate funds on purchase documents against a specified

lump sum of funds reserved for the purpose for a specified period of

time rather than obtaining individual obligational authority on each

purchase document.

``Governmentwide commercial purchase card,'' as used in this part,

means a purchase card, similar in nature to a commercial credit card,

issued to authorized agency personnel to use to acquire and to pay for

supplies and services.

``Imprest fund,'' as used in this part, means a cash fund of a

fixed amount established by an advance of funds, without charge to an

appropriation, from an agency finance or disbursing officer to a duly

appointed cashier, for disbursement as needed from time to time in

making payment in cash for relatively small amounts.

``Purchase order,'' as used in this part, means an offer by the

Government to buy supplies or services, including construction and

research and development, upon specified terms and conditions, using

simplified acquisition procedures.

``Third party draft,'' as used in this part, means an agency bank

draft, similar to a check, which is used to acquire and to pay for

supplies and services. (See Treasury Financial Management Manual,

Section 3040.70.)

13.102 Purpose.

The purpose of this part is to prescribe simplified acquisition

procedures in order to--

(a) Reduce administrative costs;

(b) Improve opportunities for small, small disadvantaged, and

women-owned small business concerns to obtain a fair proportion of

Government contracts;

(d) Avoid unnecessary burdens for agencies and contractors.

13.103 Policy.

(a) Simplified acquisition procedures shall be used to the maximum

extent practicable for all purchases of supplies or services not

exceeding the simplified acquisition threshold (including purchases

below the micro-purchase threshold), unless requirements can be met by

using required sources of supply under Part 8 (e.g., Federal Prison

Industries, Committee for Purchase from People who are Blind or

Severely Disabled, and Federal Supply Schedule contracts), existing

indefinite delivery/indefinite quantity contracts, or from other

established contracts.

(b) The contracting office shall not use simplified acquisition

procedures for contract actions exceeding $50,000 after December 31,

1999, unless the office's cognizant agency has certified full FACNET

capability in accordance with 4.505-2.

acquisition of supplies and services initially estimated to exceed the

simplified acquisition threshold even though resulting awards do not

exceed that threshold. Requirements aggregating more than the

simplified acquisition threshold or the micro-purchase threshold shall

not be broken down into several purchases that are less than the

applicable threshold merely to permit use of simplified acquisition

procedures, or to avoid any requirements that apply to purchases

exceeding the micro-purchase threshold.

(d) Simplified acquisition procedures may be used to acquire

personal services if the agency has specific statutory authority to

acquire personal services (see 37.104).

(e) In conducting simplified acquisitions the Governmentwide

commercial purchase card and electronic purchasing techniques shall be

used to the maximum extent practicable.

(f) FACNET shall be used to acquire supplies and services

(including construction, research and development, and Architect-

Engineer) for contract actions exceeding the micro-purchase threshold,

but not exceeding the simplified acquisition threshold when practicable

and cost effective (see 4.506). Drawings and lengthy specifications can

be provided off-line in hard copy or through other appropriate means.

(g) Contracting officers shall establish deadlines for the

submission of responses to solicitations which afford contractors a

reasonable opportunity to respond in accordance with 5.203. Contracting

officers shall consider all quotes/offers timely received. For

acquisitions conducted through FACNET, the contracting officer may

consider quotes/offers in accordance with 13.302(b)(2).

(h) Contracting officers are encouraged to use innovative

approaches in awarding contracts using the simplified acquisition

procedures under the authority of this part. For commercial items,

contracting officers have the flexibility to use any combination of the

procedures in Subpart 12.6 or Parts 13, 14, 15, 35, or 36 as

applicable. For other than commercial items, the procedures in other

FAR Parts may be appropriate. Other FAR Parts that may be used include,

but are not limited to, Parts 14, 15, 35, and 36 including the use of

Standard Form (SF) 1442, Solicitation, Offer and Award (Construction,

Alteration, or Repair), for construction contracts (see 36.701(b)).

13.104 Procedures.

(a) Purchases under this part should be made in the simplified

manner that is most suitable, efficient, and economical based on the

circumstances of each acquisition. Agencies and contracting offices are

encouraged to seek out opportunities to cooperate in achieving

efficiency and economy using the procedures authorized in this part.

Simplified acquisition procedures may be used to reduce the costs,

processing time, and/or documentation of acquisitions when using--

(1) Government supply sources (see Part 8), if their use is

authorized by the basic contract or concurred in by the source.

(2) Indefinite delivery contracts (see Subpart 16.5) that permit

task or delivery orders to be placed by several contracting or ordering

offices in one or more executive agencies.

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(3) Blanket purchase agreements (see 13.305) to fill repetitive

needs for supplies or services.

(4) The Governmentwide commercial purchase card (see 13.303) as a

method to acquire and/or to pay for supplies or services to the maximum

extent permitted by regulation.

(5) Bulk funding to the maximum extent practicable. Bulk funding is

particularly appropriate if numerous purchases using the same type of

funds are to be made during a given period.

(b)(1) Each contracting office should maintain a source list (or

lists, if more convenient). New supply sources for the list may be

obtained from a variety of sources, including the Procurement Automated

Source System (PASS) of the Small Business Administration and the

Central Contractor Registration Data Base (CCR) (see 4.503). The list

should identify the status of each source (when the status is made

known to the contracting office) in the following categories:

(i) Small business.

(ii) Small disadvantaged business.

(iii) Women-owned small business.

(2) The status information may be used as the basis to ensure that

small business concerns are provided the maximum practicable

opportunities to respond to solicitations issued using simplified

acquisition procedures.

should comply with the following procedures:

(1) Include related items (such as small hardware items or spare

parts for vehicles) in one solicitation and make award on an ``all-or-

none'' or ``multiple award'' basis provided suppliers are so advised

when quotations are requested.

(2) Adhere to the policy in 7.202 relating to economic purchase

quantities, when practicable.

(3) Adhere to the public display and synopsis requirements in 5.101

and 5.203.

(4) Make maximum effort to obtain trade and prompt payment

discounts (see 14.408-3). Prompt payment discounts shall not be

considered in the evaluation of quotations.

(5) Provide for the inspection of supplies or services as

prescribed in 46.404.

(6) Incorporate provisions and clauses by reference in

solicitations/awards under requests for quotations, provided the

requirements in 52.102 are satisfied.

(7) Reject a quotation, oral or written, from a small business

concern determined to be nonresponsible (see Subpart 9.1) only after

satisfying the procedures described in Subpart 19.6 with respect to

Certificates of Competency.

(8) Agencies shall use United States-owned excess or near-excess

foreign currency, if appropriate, in making payments under simplified

acquisition procedures (see Subpart 25.3).

13.105 Small business set-asides.

(a) Each acquisition (non-FACNET and FACNET) of supplies or

services that has an anticipated dollar value exceeding $2,500 and not

exceeding $100,000, is reserved exclusively for small business concerns

and shall be set aside (see 19.000 and Subpart 19.5).

(b) Each written solicitation under a set-aside shall contain the

appropriate provisions prescribed by Part 19. If the solicitation is

oral, however, information substantially identical to that which is in

the provision shall be given to potential quoters.

13.106 Legal effect of quotations.

(a) A quotation is not an offer and, consequently, cannot be

accepted by the Government to form a binding contract (see 15.402(e)).

Therefore, issuance by the Government of an order for supplies or

services in response to a supplier's quotation does not establish a

contract. The order is an offer by the Government to the supplier to

buy certain supplies or services upon specified terms and conditions. A

contract is established when the supplier accepts the offer or begins

performance.

(b) When appropriate, the contracting officer may ask the supplier

to indicate acceptance of an order by notification to the Government,

preferably in writing, as defined at 2.101. In other circumstances, the

supplier may indicate acceptance by furnishing the supplies or services

ordered or by proceeding with the work to the point where substantial

performance has occurred.

the Government may (by written notice to the supplier, at any time

before acceptance occurs) withdraw, amend, or cancel its offer. (See

13.304-4 for procedures on termination or cancellation of purchase

orders.)

13.107 Federal Acquisition Streamlining Act of 1994 (FASA) list of

inapplicable laws.

(a) The following laws are inapplicable to all contracts and

subcontracts (if otherwise applicable to subcontracts) at or below the

simplified acquisition threshold:

(1) 41 U.S.C. 57 (a) and (b) (Anti-Kickback Act of 1986) (Only the

requirement for the incorporation of the contractor procedures for the

prevention and detection of violations, and the contractual requirement

for contractor cooperation in investigations are inapplicable.)

(2) 40 U.S.C. 270a (Miller Act) (Although the Miller Act no longer

applies to contracts at or below the simplified acquisition threshold;

alternative forms of payment protection for suppliers of labor and

material are still required if the contract exceeds $25,000.)

(3) 40 U.S.C. 327-333 (Contract Work Hours and Safety Standards

Act--Overtime Compensation).

(4) 41 U.S.C. 701(a)(1) (Section 5152 of the Drug Free Workplace

Act of 1988), except for individuals.

(5) 42 U.S.C. 6962 (Solid Waste Disposal Act) (Only the requirement

for providing the estimate of recovered material utilized in the

performance of the contract is inapplicable).

(6) 10 U.S.C. 2306(b) and 41 U.S.C. 254(a) (Contract Clause

Regarding Contingent Fees).

(7) 10 U.S.C. 2313 and 41 U.S.C. 254(c) (Authority to Examine Books

and Records of Contractors).

(8) 10 U.S.C. 2402 and 41 U.S.C. 253g (Prohibition on Limiting

Subcontractor Direct Sales to the United States).

(b) The Federal Acquisition Regulatory Council will include any law

enacted after October 13, 1994, that sets forth policies, procedures,

requirements, or restrictions for the procurement of property or

services, on the list set forth in paragraph (a) of this section,

unless the FAR Council makes a written determination that it is in the

best interests of the Government that the enactment should apply to

contracts or subcontracts not greater than the simplified acquisition

threshold.

laws that--

(1) Provide for criminal or civil penalties; or

(2) Specifically state that notwithstanding the language of Section

4101, Pub. L. 103-355, the enactment will be applicable to contracts or

subcontracts in amounts not greater than the simplified acquisition

threshold.

(d) Any individual may petition the Administrator of the Office of

Federal Procurement Policy to include any applicable provision of law

not included on the list set forth in paragraph (a) of this section

unless the FAR Council has already determined in writing that the law

is applicable. The Administrator of OFPP will include the law on the

list in paragraph (a) of this section unless the FAR Council makes a

determination that it is applicable within sixty days of receiving the

petition.

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13.108 Inapplicable provisions and clauses.

While certain statutes still apply, pursuant to Pub. L. 103-355,

the following provisions and clauses are inapplicable to contracts and

subcontracts at or below the simplified acquisition threshold:

(a) Clauses implementing Miller Act requirements in 28.102-3;

(b) 52.203-5, Covenant Against Contingent Fees;

Government;

(d) 52.203-7, Anti-Kickback Procedures;

(e) 52.215-2, Audits and Records-Negotiation;

(f) 52.222-4, Contract Work Hours and Safety Standards Act--

Overtime Compensation;

(g) 52.223-5, Certification Regarding a Drug-Free Workplace, except

for individuals;

(h) 52.223-6, Drug-Free Workplace, except for individuals; and

(i) 52.223-8, Estimate of Percentage of Recovered Material for

Designated Items to be Used in the Performance of the Contract.

Subpart 13.2--Micro-Purchases

13.201 General.

(a) Agency heads are encouraged to delegate micro-purchase

authority (see 1.603-3).

(b) The Governmentwide commercial purchase card shall be the

preferred method to purchase and to pay for micro-purchases.

using any of the procedures described in Subpart 13.3.

(d) Micro-purchases (see the definition in 2.101) conducted through

the procedures authorized in Part 12 or Subpart 13.3 do not require

provisions or clauses. This paragraph takes precedence over any other

FAR requirement to the contrary, but does not prohibit the use of any

clause prescribed elsewhere in the FAR when determined necessary by the

contracting officer.

(e) The requirements in Part 8, Required Sources of Supplies and

Services, apply to purchases below the micro-purchase threshold.

13.202 Purchase guidelines.

(a) Soliciting, evaluation of quotes, and award. (1) To the extent

practicable, micro-purchases shall be distributed equitably among

qualified suppliers.

(2) Micro-purchases may be awarded without soliciting competitive

quotations if the contracting officer or individual appointed in

accordance with 1.603-3(b) considers the price reasonable.

(3) The administrative cost of verifying the reasonableness of the

price for purchases may more than offset potential savings from

detecting instances of overpricing. Therefore, action to verify price

reasonableness need only be taken if--

(i) The contracting officer or individual appointed in accordance

with 1.603-3(b) suspects or has information to indicate that the price

may not be reasonable (e.g., comparison to the previous price paid or

personal knowledge of the supply or service); or

(ii) Purchasing a supply or service for which no comparable pricing

information is readily available (e.g., a supply or service that is not

the same as, or is not similar to, other supplies or services that have

recently been purchased on a competitive basis).

(b) Documentation. If competitive quotations were solicited and

award was made to other than the low quote, documentation to support

purchases may be limited to identification of solicited concerns and

explanation for the award decision.

Subpart 13.3--Simplified Acquisition Procedures

13.301 Use of options.

Options may be included provided the requirements of Subpart 17.2

are met, and the aggregate value of the acquisition and all options

does not exceed the dollar threshold for use of simplified acquisition

procedures under this part.

13.302 Soliciting competition, evaluation of quotes or offers, award,

and documentation.

(a) Soliciting competition. (1) Contracting officers shall promote

competition to the maximum extent practicable to ensure that the

purchase is advantageous to the Government, based, as appropriate, on

either price alone or price and other factors (e.g., past performance

and quality) including the administrative cost of the purchase.

Solicitations shall notify suppliers of the basis upon which award is

to be made.

(2) If FACNET is not available, or an exemption set forth in 4.506

applies, quotations may be solicited through other appropriate means.

The contracting officer shall comply with the requirements of 5.101

when not soliciting via FACNET. Sufficient information to permit

suppliers to develop quotations may be incorporated into the combined

synopsis/solicitation. In such cases, the contracting officer is not

required to issue a separate solicitation.

(3) Requests for quotations should be solicited orally to the

maximum extent practicable when FACNET is not available or a written

determination has been made that it is not practicable or cost-

effective to purchase via FACNET. However, oral solicitations may not

be practicable for contract actions exceeding $25,000 when synopsized

in accordance with 5.101. Paper solicitations for contract actions not

expected to exceed $25,000 should only be issued when obtaining

electronic or oral quotations is not considered economical or

practicable. Written solicitations shall be issued for construction

contracts over $2,000.

(4) If using simplified acquisition procedures and not using

FACNET, maximum practicable competition ordinarily can be obtained

without soliciting quotations or offers from sources outside the local

trade area. Generally, solicitation of at least three sources may be

considered to promote competition to the maximum extent practicable if

the contract action does not require synopsis pursuant to 5.101 and

5.202. If practicable, two sources not included in the previous

solicitation should be requested to furnish quotations. The following

factors influence the number of quotations required in connection with

any particular purchase:

(i) The nature of the article or service to be purchased and

whether it is highly competitive and readily available in several makes

or brands, or is relatively noncompetitive.

(ii) Information obtained in making recent purchases of the same or

similar item.

(iii) The urgency of the proposed purchase.

(iv) The dollar value of the proposed purchase.

(v) Past experience concerning specific dealers' prices.

(5) Contracting officers may solicit from one source if the

contracting officer determines that the circumstances of the contract

action deem only one source reasonably available (e.g., urgency,

exclusive licensing agreements, or industrial mobilization).

(6) Contracting officers shall not solicit quotations based on

personal preference. Except as provided in subparagraph (a)(7) of this

section, solicitations shall not be restricted to suppliers of well

known and widely distributed makes or brands.

(7) If the acquisition was conducted through FACNET, agencies need

not

[[Page 48537]]

respond to inquiries that are made telephonically or by facsimile

unless they are unable to receive inquiries through FACNET. In

addition, an agency is not required to receive questions through any

medium (including through FACNET) if doing so would interfere with its

ability to conduct the procurement in an efficient manner.

(8) Agency requirements shall not be restricted to only one brand

name, product, or feature of a product, peculiar to one manufacturer,

thereby precluding consideration of a product manufactured by another

company, unless the contracting officer determines that the particular

brand name, product or feature is essential to the Government's

requirements, and that other companies' similar products, or products

lacking the particular feature, would not meet the Government's

requirements. This limitation does not prohibit the identification of a

requirement:

(i) By use of a brand name, provided the brand name is followed by

words such as ``or equal,'' or

(ii) Alternatively, if the requirement does not exceed $25,000, by

use of at least three different brand names.

(b) Evaluation of quotes or offers. (1) Contracting officers may

evaluate quotations or offers based on price alone or price and other

factors (see subparagraph (a)(1) of this section). If price and other

factors are used, the contracting officer shall use the procedures that

will ensure that the evaluation of quotations can be performed in an

efficient and minimally burdensome fashion. Formal evaluation plans,

conduct of discussions, and scoring of quotes or offers are not

required. Evaluation of past performance does not require the creation

or existence of a formal data base, but may be based on such

information as the contracting officer's knowledge of and previous

experience with the item or service being purchased, customer surveys,

or other reasonable basis.

(2) For purchases conducted using FACNET, the contracting officer

may--

(i) After preliminary consideration of all offers, identify from

all quotes received one that is suitable to the user, such as the

lowest-priced brand name product and quickly screen all lower-priced

quotes based on readily discernible value indicators, such as past

performance, warranty conditions, and maintenance availability; or

(ii) Where an evaluation is based only on price and past

performance, make an award based on whether the lowest priced offer

having the highest past performance rating possible represents the best

value when compared to any lower priced quotes.

(3) Standing price quotations may be used in lieu of obtaining

individual quotations each time a purchase is contemplated, provided

the contracting officer ensures that the pricing information is current

and that the Government obtains the benefit of maximum discounts before

award is made.

(4) Quotations shall be evaluated inclusive of transportation

charges from the shipping point of the supplier to the delivery

destination.

supplier who quotes a minimum order price or quantity that either

unreasonably exceeds stated quantity requirements or results in an

unreasonable price for the quantities required. In these instances, the

contracting officer should inform the requiring activity of all facts

regarding the quotation and ask it to confirm or alter its requirement.

The file shall be documented to support the final action taken.

(2) Except for awards conducted through FACNET, notification to

unsuccessful suppliers shall be given only if requested.

(3) If a supplier requests information on an award which was based

on factors other than price alone, a brief explanation of the basis for

the contractaward decision shall be provided (see 15.1002(c)(2)).

(d) Documentation. (1) The determination that a proposed price is

reasonable should be based on competitive quotations/offers. If only

one response is received, a statement shall be included in the contract

file giving the basis of the determination of fair and reasonable

price. The determination may be based on market research, a comparison

of the proposed price with prices found reasonable on previous

purchases, current price lists, catalogs, advertisements, similar items

in a related industry, value analysis, the contracting officer's

personal knowledge of the item being purchased, comparison to an

independent government estimate, or any other reasonable basis.

(2) When other than price related factors are considered in

selecting the supplier (see subparagraph(b)(1) of this section), the

contracting officer shall document the file to support the final award

decision.

(3) If only one source is solicited, an additional notation shall

be made to explain the absence of competition, except for acquisition

of utility services available only from one source.

(4) Documentation should be kept to a minimum. The following

illustrate the extent to which quotation/offer information should be

recorded.

(i) Oral solicitations. The contracting office should establish and

maintain informal records of oral price quotations in order to reflect

clearly the propriety of placing the order at the price paid with the

supplier concerned. In most cases this will consist merely of showing

the names of the suppliers contacted and the prices and other terms and

conditions quoted by each.

(ii) Written solicitations (see 2.101). Written records of

solicitations/offers may be limited to notes or abstracts to show

prices, delivery, references to printed price lists used, the supplier

or suppliers contacted, and other pertinent data.

(5) Purchasing offices shall retain data supporting purchases

(paper or electronic) to the minimum extent and duration necessary for

management review purposes (see Subpart 4.8).

13.303 Governmentwide commercial purchase card.

(a) The Governmentwide commercial purchase card is authorized for

use in making and/or paying for purchases. The Governmentwide

commercial purchase card may be used by contracting officers and other

individuals designated in 1.603-3.

(b) Agencies using the Governmentwide commercial purchase card

shall establish procedures for the use and control of the card which

comply with the Treasury Financial Manual for Guidance of Departments

and Agencies (TFM 4-4500) and are consistent with the terms and

conditions of the GSA Federal Supply Service Contract Guide for

Governmentwide Commercial Purchase Card Service. Agency procedures

should not limit the use of the Governmentwide commercial purchase card

to micro-purchases. They should encourage use in greater amounts by

contracting officers to place orders and pay for purchases against

contracts established under Part 8 procedures, when authorized, and to

make purchases and/or make payment, under other contracts, basic

ordering agreements, or blanket purchase agreements when agreed to by

the contractor.

(1) Place a task or delivery order (if authorized in the basic

contract, basic ordering agreement, or blanket purchase agreement);

(2) Purchase supplies, services, or construction; or

[[Page 48538]]

(3) Make payments, when the contractor agrees to accept payment by

the card.

13.304 Purchase orders.

13.304-1 General.

(a) Except as provided under the unpriced purchase order method

(see 13.304-2), purchase orders generally are issued on a fixed-price

basis. See Part 12 for acquisition of commercial items.

(b) Purchase orders shall--

(1) Specify the quantity of supplies or scope of services ordered.

(2) Contain a determinable date by which delivery of the supplies

or performance of the services is required.

(3) Provide for inspection as prescribed in Part 46. Generally,

inspection and acceptance should be at destination. Source inspection

should be specified only if required by Part 46. When inspection and

acceptance will be performed at destination, advance copies of the

purchase order or equivalent notice shall be furnished to consignee(s)

for material receipt purposes. Receiving reports shall be accomplished

immediately upon receipt and acceptance of supplies.

(4) Specify f.o.b. destination for supplies to be delivered within

the United States, except Alaska or Hawaii, unless there are valid

reasons to the contrary.

(5) Include any trade and prompt payment discounts that are

offered, consistent with the applicable principles in 14.408-3.

in accordance with 4.101 and the definitions at 2.101. Facsimile and

electronic signature may be used in the production of purchase orders

by automated methods.

(d) Distribution of copies of purchase orders and related forms

shall be limited to those copies required for essential administration

and transmission of contractual information.

13.304-2 Unpriced purchase orders.

(a) An unpriced purchase order is an order for supplies or

services, the price of which is not established at the time of issuance

of the order.

(b) An unpriced purchase order may be used only when--

(1) It is impractical to obtain pricing in advance of issuance of

the purchase order; and

(2) The purchase is for

(i) Repairs to equipment requiring disassembly to determine the

nature and extent of repairs;

(ii) Material available from only one source and for which cost

cannot be readily established; or

(iii) Supplies or services for which prices are known to be

competitive but exact prices are not known (e.g., miscellaneous repair

parts, maintenance agreements).

purchase orders or electronically. A realistic monetary limitation,

either for each line item or for the total order, shall be placed on

each unpriced purchase order. The monetary limitation shall be an

obligation subject to adjustment when the firm price is established.

The contracting office shall follow-up each order to ensure timely

pricing. The contracting officer or the contracting officer's

designated representative shall review the invoice price and, if

reasonable (see 13.302(d)), process the invoice for payment.

13.304-3 Obtaining contractor acceptance and modifying purchase

orders.

(a) When it is desired to consummate a binding contract between the

parties before the contractor undertakes performance, the contracting

officer shall require written (see 2.101) acceptance of the purchase

order by the contractor.

(b) Each purchase order modification shall identify the order it

modifies and shall contain an appropriate modification number.

be required to be in writing only if--

(1) Determined by the contracting officer to be necessary to ensure

the contractor's compliance with the purchase order as revised; or

(2) Required by agency regulations.

13.304-4 Termination or cancellation of purchase orders.

(a) If a purchase order that has been accepted in writing by the

contractor is to be terminated, the contracting officer shall process

the termination in accordance with--

(1) 12.403(d) and 52.212-4(l) for commercial items; or

(2) Part 49 or 13.306 and 52.213-XX for other than commercial

items.

(b) If a purchase order that has not been accepted in writing by

the contractor is to be canceled, the contracting officer shall notify

the contractor in writing that the purchase order has been canceled,

request the contractor's written (see 2.101) acceptance of the

cancellation, and proceed as follows:

(1) If the contractor accepts the cancellation and does not claim

that costs were incurred as a result of beginning performance under the

purchase order, no further action is required (i.e., the purchase order

shall be considered canceled).

(2) If the contractor does not accept the cancellation or claims

that costs were incurred as a result of beginning performance under the

purchase order, the contracting officer shall process the termination

action as prescribed in paragraph (a) of this subsection.

13.304-5 Clauses.

(a) Each purchase order (and each purchase order modification (see

13.304-3)) shall incorporate all clauses required for or applicable to

the particular acquisition.

(b) The contracting officer shall insert the clause at 52.213-2,

Invoices, in purchase orders that authorize advance payments (see 31

U.S.C. 3324(d)(2)) for subscriptions or other charges for newspapers,

magazines, periodicals, or other publications (i.e., any publication

printed, microfilmed, photocopied, or magnetically or otherwise

recorded for auditory or visual usage).

Notice to Supplier, in unpriced purchase orders.

13.305 Blanket purchase agreements (BPAs).

13.305-1 General.

(a) A BPA is a simplified method of filling anticipated repetitive

needs for supplies or services by establishing ``charge accounts'' with

qualified sources of supply (see Subpart 16.7 for additional coverage

of agreements).

(b) BPAs should be established for use by the level responsible for

providing supplies for its own operations or for other offices,

installations, projects, or functions. Such levels, for example, may be

organized supply points, separate independent or detached field

parties, or one-person posts or activities.

responsibility for keeping obligations and expenditures within

available funds.

13.305-2 Establishment of BPAs.

(a) The following are circumstances under which contracting

officers may establish BPAs:

(1) There is a wide variety of items in a broad class of supplies

or services that are generally purchased, but the exact items,

quantities, and delivery requirements are not known in advance and may

vary considerably.

(2) There is a need to provide commercial sources of supply for one

or more offices or projects in a given area that do not have or need

authority to purchase otherwise.

[[Page 48539]]

(3) The use of this procedure would avoid the writing of numerous

purchase orders.

(b) After determining a BPA would be advantageous, contracting

officers shall--

(1) Establish the parameters to limit purchases to individual items

or commodity groups or classes, or permit the supplier to furnish

unlimited supplies or services; and

(2) Consider suppliers whose past performance have shown them to be

dependable, who offer good quality at consistently lower prices, and

who have provided numerous purchases at or below the simplified

acquisition threshold.

(1) More than one supplier for supplies or services of the same

type to provide maximum practicable competition;

(2) A single firm from which numerous individual purchases at or

below the simplified acquisition threshold will likely be made in a

given period; or

(3) Federal Supply Schedule contractors, if not inconsistent with

the terms of the applicable schedule contract.

(d) BPAs should be prepared without a purchase requisition and only

after contacting suppliers to make the necessary arrangements for--

(1) Securing maximum discounts;

(2) Documenting individual purchase transactions;

(3) Periodic billings; and

(4) Incorporating other necessary details.

(e) BPAs shall be prepared on the forms specified in 13.309(b) and

shall not cite accounting and appropriation data (see 13.305-4(e)(4)).

(1) The following terms and conditions are mandatory:

(i) Description of agreement. A statement that the supplier shall

furnish supplies or services, described in general terms, if and when

requested by the contracting officer (or the authorized representative

of the contracting officer) during a specified period and within a

stipulated aggregate amount, if any.

(ii) Extent of obligation. A statement that the Government is

obligated only to the extent of authorized purchases actually made

under the BPA.

(iii) Pricing. A statement that the prices to the Government shall

be as low or lower than those charged the supplier's most favored

customer for comparable quantities under similar terms and conditions,

in addition to any discounts for prompt payment.

(iv) Purchase limitation. A statement that specifies the dollar

limitation for each individual purchase under the BPA (see 13.305-

4(b)).

(v) Individuals authorized to purchase under the BPA. A statement

that a list of individuals authorized to purchase under the BPA,

identified either by title of position or by name of individual,

organizational component, and the dollar limitation per purchase for

each position title or individual shall be furnished to the supplier by

the contracting officer.

(vi) Delivery tickets. A requirement that all shipments under the

agreement, except subscriptions and other charges for newspapers,

magazines, or other periodicals, shall be accompanied by delivery

tickets or sales slips which shall contain the following minimum

information:

(A) Name of supplier.

(B) BPA number.

(D) Purchase number.

(E) Itemized list of supplies or services furnished.

(F) Quantity, unit price, and extension of each item, less

applicable discounts (unit prices and extensions need not be shown when

incompatible with the use of automated systems; provided, that the

invoice is itemized to show this information).

(G) Date of delivery or shipment.

(vii) Invoices. One of the following statements shall be included

(except that the statement in paragraph (e)(1)(vii)(C) of this section

should not be used if the accumulation of the individual invoices by

the Government materially increases the administrative costs of this

purchase method):

(A) A summary invoice shall be submitted at least monthly or upon

expiration of this BPA, whichever occurs first, for all deliveries made

during a billing period, identifying the delivery tickets covered

therein, stating their total dollar value, and supported by receipt

copies of the delivery tickets.

(B) An itemized invoice shall be submitted at least monthly or upon

expiration of this BPA, whichever occurs first, for all deliveries made

during a billing period and for which payment has not been received.

These invoices need not be supported by copies of delivery tickets.

each delivery, these invoices shall be accumulated; provided, that--

(1) A consolidated payment will be made for each specified period;

and

(2) The period of any discounts will commence on the final date of

the billing period or on the date of receipt of invoices for all

deliveries accepted during the billing period, whichever is later.

(D) An invoice for subscriptions or other charges for newspapers,

magazines, or other periodicals shall show the starting and ending

dates and shall state either that ordered subscriptions have been

placed in effect or will be placed in effect upon receipt of payment.

(2) If the fast payment procedure is used, the requirements stated

under 13.308-3 shall be included.

13.305-3 Clauses.

(a) The contracting officer shall insert in each BPA the clauses

prescribed elsewhere in this part that are required for or applicable

to the particular BPA.

(b) Unless a clause prescription specifies otherwise (e.g., see

22.305(a), 22.605(a)(5), or 22.1006), if the prescription includes a

dollar threshold, the amount to be compared to that threshold is that

of any particular order under the BPA.

13.305-4 Purchases under BPAs.

(a) The use of a BPA does not authorize purchases that are not

otherwise authorized by law or regulation. For example, the BPA, being

a method of simplifying the making of individual purchases, shall not

be used to avoid the simplified acquisition threshold.

(b) Unless otherwise specified in agency regulations, individual

purchases, except under BPAs established in accordance with 13.305-

2(c)(3), shall not exceed $100,000.

set-asides. The requirements of 13.105 and Subpart 19.5 also apply to

each order under a BPA.

(d) The existence of a BPA does not justify purchasing from only

one source. A synopsis shall be published if required by Subpart 5.2.

If for a particular purchase under $2,500 there is an insufficient

number of BPAs to ensure maximum practicable competition (see

13.302(a)(4)), the contracting officer shall--

(1) Solicit quotations from other sources and make the purchase as

appropriate; and

(2) Establish additional BPAs to facilitate future purchases if--

(i) Recurring requirements for the same or similar items or

services seem likely;

(ii) Qualified sources are willing to accept BPAs; and

(iii) It is otherwise practical to do so.

(e) Documentation of purchases shall be limited to essential

information and forms as follows:

[[Page 48540]]

(1) Purchases generally should be made electronically, or orally

when it is not considered economical or practical to use electronic

methods.

(2) A paper purchase document may be issued if written

communications are necessary to ensure that the vendor and the

purchaser agree concerning the transaction.

(3) If a paper document is not issued, the essential elements

(e.g., date, vendor, items or services, price, delivery date) shall be

recorded on the purchase requisition, in an informal memorandum, or on

a form developed locally for the purpose.

(4) Documentation of purchases shall also cite the pertinent

purchase requisitions and the accounting and appropriation data.

(5) When delivery is made or the services are performed, the

vendor's sales document, delivery document, or invoice may (if it

reflects the essential elements) be used for the purpose of recording

receipt and acceptance of the items or services. However, if the

purchase is assigned to another activity for administration, receipt

and acceptance of supplies or services shall be documented by signature

and date on the agency specified form by the authorized Government

representative after verification and notation of any exceptions.

13.305-5 Review procedures.

(a) The contracting officer placing orders under a BPA, or the

designated representative of the contracting officer, shall review a

sufficient random sample of the BPA files at least annually to ensure

that authorized procedures are being followed.

(b) The contracting officer that entered into the BPA shall--

(1) Ensure that each BPA is reviewed at least annually and, if

necessary, updated at that time; and

(2) Maintain awareness of changes in market conditions, sources of

supply, and other pertinent factors that may warrant making new

arrangements with different suppliers or modifying existing

arrangements.

a BPA is authorized to make purchases under that BPA, the agency that

has jurisdiction over the office authorized to make the purchases shall

ensure that the procedures in paragraph (a) of this subsection are

being followed.

13.305-6 Completion of BPAs.

An individual BPA is considered complete when the purchases under

it equal its total dollar limitation, if any, or when its stated time

period expires.

13.306 Optional clause.

The clause at 52.213-XX, Terms and Conditions-Simplified

Acquisitions (Other than Commercial Items), is prescribed for use in

simplified acquisitions exceeding the micro-purchase threshold of

supplies and services that are other than commercial items (see 12.301

for commercial items).

(a) The clause is a compilation of the required clauses and the

most commonly used clauses that apply to simplified acquisitions and

its structure parallels clauses prescribed at 12.301 for commercial

items. The clause may be used in lieu of individual clauses prescribed

in the FAR.

(b) Except for paragraphs (a) through (d), the clause may be

modified to fit the individual acquisition (but see paragraph (c) of

this section). Any modification, (i.e., addition, deletion, or

substitution) must not create a void or internal contradiction in the

clause. For example, do not add an inspection and acceptance or

termination for convenience requirement unless the existing requirement

is deleted. Also, do not delete a paragraph without providing for an

appropriate substitute.

other than commercial items (e.g., architect-engineer and

construction). If used in other simplified acquisitions of other than

commercial items, paragraph (b) may also be modified.

13.307 Imprest funds and third party drafts.

13.307-1 General.

Imprest funds and third party drafts may be used to acquire and to

pay for supplies or services. Policies and regulations concerning the

establishment of and accounting for imprest funds and third party

drafts, including the responsibilities of designated cashiers and

alternates, are contained in Part IV of the Treasury Financial Manual

for Guidance of Departments and Agencies, Title 7 of the General

Accounting Office Policy and Procedures Manual for Guidance of Federal

Agencies, and the agency implementing regulations. Agencies shall also

be guided by the Manual of Procedures and Instructions for Cashiers,

issued by the Financial Management Service, Department of the Treasury.

13.307-2 Agency responsibilities.

Each agency using imprest funds and third party drafts shall--

(a) Periodically review and determine whether there is a continuing

need for each fund or third party draft account established, and that

amounts of those funds or accounts are not in excess of actual needs;

(b) Take prompt action to have imprest funds or third party draft

accounts adjusted to a level commensurate with demonstrated needs

whenever circumstances warrant such action; and

regulations shall include (but are not limited to) procedures

covering--

(1) Designation of personnel authorized to make purchases using

imprest funds or third party drafts; and

(2) Documentation of purchases using imprest funds or third party

drafts, including documentation of--

(i) Receipt and acceptance of supplies and services by the

Government;

(ii) Receipt of cash or third party draft payments by the

suppliers; and

(iii) Cash advances and reimbursements.

13.307-3 Conditions for use.

Imprest funds or third party drafts may be used for purchases

when--

(a) The imprest fund transaction does not exceed $500 or such other

limits as have been approved by the agency head;

(b) The third party draft transaction does not exceed $2,500,

unless authorized at a higher level in accordance with Treasury

restrictions;

be advantageous to the Government; and

(d) The use of imprest funds or third party drafts for the

transaction otherwise complies with any additional conditions

established by agencies and with the policies and regulations

referenced in 13.307-1.

13.307-4 Procedures.

(a) Each purchase using imprest funds or third party drafts shall

be based upon an authorized purchase requisition, contracting officer

verification statement, or other agency approved method of insuring

adequate funds are available for the purchase.

(b) Normally, purchases should be placed orally and without

soliciting competition if prices are considered reasonable.

placement of the order and delivery of the items, clauses are not

required for purchases using imprest funds or third party drafts.

(d) Forms prescribed at 13.309(e) may be used if a written order is

considered necessary (e.g., if required by the supplier for discount,

tax exemption, or other reasons). If a purchase order is

[[Page 48541]]

used for this purpose, it shall be endorsed ``Payment to be made from

Imprest Fund'' (or ``Payment to be made from third party draft,'' as

appropriate).

(e) The individual authorized to make purchases using imprest funds

or third party drafts shall--

(1) Furnish to the imprest fund or third party draft cashier a copy

of the document required under paragraph (a) of this subsection

annotated to reflect--

(i) That an imprest fund or third party draft purchase has been

made;

(ii) The unit prices and extensions;

(iii) The supplier's name and address; and

(2) Require the supplier to include with delivery of the supplies

an invoice, packing slip, or other sales instrument giving--

(i) The supplier's name and address;

(ii) List and quantity of items;

(iii) Unit prices and extensions; and

(iv) Cash discount, if any.

13.308 Fast payment procedure.

13.308-1 General.

(a) The fast payment procedure allows payment under limited

conditions to a contractor prior to the Government's verification that

supplies have been received and accepted. The procedure provides for

payment for supplies based on the contractor's submission of an invoice

that constitutes a representation that--

(1) The supplies have been delivered to a post office, common

carrier, or point of first receipt by the Government; and

(2) The contractor agrees to replace, repair, or correct supplies

not received at destination, damaged in transit, or not conforming to

purchase agreements.

(b) The contracting officer shall be primarily responsible for

collecting debts resulting from failure of contractors to properly

replace, repair, or correct supplies lost, damaged, or not conforming

to purchase requirements (see 32.605(b) and 32.606).

13.308-2 Conditions for use.

If the conditions in paragraphs (a) through (f) of this subsection

are present, the fast payment procedure may be used, provided that use

of the procedure is consistent with the other conditions of the

purchase. The conditions for use of the fast payment procedure are as

follows:

(a) Individual purchasing instruments do not exceed $25,000, except

that executive agencies may permit higher dollar limitations for

specified activities or items on a case-by-case basis.

(b) Deliveries of supplies are to occur at locations where there is

both a geographical separation and a lack of adequate communications

facilities between Government receiving and disbursing activities that

will make it impractical to make timely payment based on evidence of

Government acceptance.

(1) Upon delivery to a post office or common carrier for mailing or

shipment to destination; or

(2) Upon receipt by the Government if the shipment is by means

other than Postal Service or common carrier.

(d) The supplier agrees to replace, repair, or correct supplies not

received at destination, damaged in transit, or not conforming to

purchase requirements.

(e) The purchasing instrument is a firm-fixed price contract, a

purchase order, or a delivery order for supplies.

(f) A system is in place to ensure--

(1) Documenting evidence of contractor performance under fast

payment acquisitions;

(2) Timely feedback to the contracting officer in case of

contractor deficiencies; and

(3) Identification of suppliers who have a current history of

abusing the fast payment procedure (also see Subpart 9.1).

13.308-3 Preparation and execution of orders.

Priced or unpriced contracts, purchase orders, or BPAs using the

fast payment procedure shall include the following:

(a) A requirement that the supplies be shipped transportation or

postage prepaid.

(b) A requirement that invoices be submitted directly to the

finance or other office designated in the order, or in the case of

unpriced purchase orders, to the contracting officer (see 13.304-2(c)).

Consignee's Notification to Purchasing Activity of Nonreceipt, Damage,

or Nonconformance

The consignee shall notify the purchasing office promptly after

the specified date of delivery of supplies not received, damaged in

transit, or not conforming to specifications of the purchase order.

Unless extenuating circumstances exist, the notification should be

made not later than 60 days after the specified date of delivery.

13.308-4 Contract clause.

The contracting officer shall insert the clause at 52.213-1, Fast

Payment Procedure, in solicitations and contracts when the conditions

in 13.308-2 are applicable and it is intended that the fast payment

procedure be used in the contract (in the case of BPAs, the contracting

officer may elect to insert the clause either in the BPA or in orders

under the BPA).

13.309 Forms.

(a) Commercial items. SF 1449, Solicitation/Contract/Order for

Commercial Items, shall be used by the contracting officer when issuing

a paper solicitation for commercial items, except when using a combined

synopsis/solicitation (see Subpart 12.6).

(b) Other than commercial items. (1) SF 18, Request for Quotations;

SF 1449; or an agency form/automated format may be used for written

solicitations. Each agency request for quotations form/automated format

should conform with SF 18 or SF 1449 to the maximum extent practicable.

(2) Both SF 1449 and OF 347, Order for Supplies or Services, are

multipurpose forms used for negotiated purchases of supplies or

services, delivery or task orders, inspection and receiving reports,

and invoices. An agency form/automated format may also be used.

(1) OF 336, Continuation Sheet, may be used for written solicitations

when additional space is needed.

(2) OF 348, Order for Supplies or Services Schedule--Continuation,

or an agency form/automated format may be used for negotiated purchases

when additional space is needed. Agencies may print on those forms the

clauses considered to be generally suitable for purchases.

(3) SF 30, Amendment of Solicitation/Modification of Contract, or a

purchase order form may be used to modify a purchase order, unless an

agency form/automated format is prescribed in agency regulations.

(d) SF 44, Purchase Order-Invoice-Voucher, is a multipurpose

pocket-size purchase order form designed primarily for on-the-spot,

over-the-counter purchases of supplies and nonpersonal services while

away from the purchasing office or at isolated activities. It can also

be used as a receiving report, invoice, and public voucher.

(1) This form may be used if all of the following conditions are

satisfied:

(i) The amount of the purchase is at or below the micro-purchase

threshold, except for purchases made under unusual and compelling

urgency or in support of contingency operations. Agencies may establish

higher dollar limitations for specific activities or items.

[[Page 48542]]

(ii) The supplies or services are immediately available.

(iii) One delivery and one payment will be made.

(iv) Its use is determined to be more economical and efficient than

use of other simplified acquisition procedures.

(2) General procedural instructions governing the form's use are

printed on the form and on the inside front cover of each book of

forms.

(3) Since there is, for all practical purposes, simultaneous

placement of the order and delivery of the items, clauses are not

required for purchases using this form.

(4) Agencies shall provide adequate safeguards regarding the

control of forms and accounting for purchases.

(e) SF 1165, Receipt for Cash-Subvoucher, or an agency purchase

order form may be used for purchases using imprest funds or third party

drafts.

PART 16--TYPES OF CONTRACTS

16.701 [Amended]

6. Section 16.701 is amended to delete the words ``Subpart 13.2''

in the parenthetical and insert ``13.305.''

16.703 [Amended]

7. Section 16.703 is amended in paragraph (c)(1)(vi) to replace the

reference to 13.303 with 13.308-3.

PART 41--ACQUISITION OF UTILITY SERVICES

41.202 [Amended]

8. Section 41.202 is amended in paragraph (c)(1) to replace the

reference to Subpart 13.5 with 13.304.

PART 43--CONTRACT MODIFICATIONS

43.301 [Amended]

9. Section 43.301 is amended in paragraph (a)(2)(iii) to replace

the reference to 13.503 with 13.304-3.

PART 49--TERMINATION OF CONTRACTS

49.002 [Amended]

10. Section 49.002 is amended in paragraph (a) to delete the

reference to 13.504(b) and substitute 13.304-4.

11. Section 49.501 is amended to add as the second sentence the

following:

49.501 General.

* * * This subpart does not apply to contracts that use the clause

at 52.213-XX, Terms and Conditions-Simplified Acquisitions (Other than

Commercial Items). * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

12. Section 52.101 is amended to revise paragraph (e)(2)(i) to read

as follows:

52.101 Using Part 52.

* * * * *

(e) Matrix. * * *

(2) * * *

(i) Whether incorporation by reference is or is not authorized (see

52.102);

* * * * *

13. Section 52.102 is revised to read as follows:

52.102 Incorporating provisions and clauses.

(a) Provisions and clauses should be incorporated by reference to

the maximum practical extent, rather than being incorporated in full

text, even if they--

(1) Are used with one or more alternates or on an optional basis;

(2) Are prescribed on a ``substantially as follows'' or

``substantially the same as'' basis; provided, that they are used

verbatim;

(3) Require modification or the insertion by the Government of

fill-in material (see 52.104); or

(4) Require completion by the offeror or prospective contractor.

This instruction also applies to provisions completed as annual

representations and certifications.

(b) Except for provisions and clauses prescribed in 52.107, any

provision or clause that can be accessed electronically by the offeror

or prospective contractor may be incorporated by reference in

solicitations and/or contracts. However, the contracting officer, upon

request, shall provide the full text of any provision or clause

incorporated by reference.

acquisition regulations and provisions and clauses not authorized by

Subpart 52.3 to be incorporated by reference need not be incorporated

in full text, provided the contracting officer includes in the

solicitation and/or contract a statement that--

(1) Identifies all provisions and/or clauses that require

completion by the offeror or prospective contractor;

(2) Makes specific reference that the provisions/clauses must be

completed by the offeror or prospective contractor and must be

submitted with the quote or offer; and

(3) Identifies to the offeror or prospective contractor at least

one electronic address where the full text may be accessed.

(d) An agency may develop a group listing of provisions and clauses

that apply to a specific category of contracts. An agency group listing

may be incorporated by reference in solicitations/contracts in lieu of

citing the provisions and clauses individually, provided the group

listing is made available electronically to offerors and prospective

contractors.

(e) A provision or clause that is not available electronically to

offerors and prospective contractors shall be incorporated in

solicitations/contracts in full text if it is:

(1) A FAR provision or clause that otherwise is not authorized to

be incorporated by reference (see Subpart 52.3); or

(2) A provision or clause prescribed for use in an agency

acquisition regulation.

(f) Provisions or clauses may not be incorporated by reference by

being listed in the:

(1) Provision at 52.252-3, Alterations in Solicitations, or

(2) Clause at 52.252-4, Alterations in Contract.

52.102-1 and 52.102-2 [Removed]

14. Sections 52.102-1 and 52.102-2 are removed.

52.103 [Amended]

15. Section 52.103 is amended in the last sentence of paragraph (a)

to replace ``52.107(e) and (f)'' with ``52.107(f) and (g).''

16. Section 52.107 is amended to redesignate paragraphs (c) through

(f) as (d) through (g) and to add paragraph (c) to read as follows:

52.107 Provisions and clauses prescribed in Subpart 52.1.

* * * * *

Solicitation Provisions and Clauses Accessible Electronically, to

satisfy the requirements in 52.102(c).

* * * * *

52.213-1 [Amended]

17. Section 52.213-1 is amended in the introductory text to replace

``13.305'' with ``13.308-4.''

52.213-2 [Amended]

18. Section 52.213-2 is amended in the introductory text to replace

``13.507(b)'' with ``13.304-5(b)''.

52.213-3 [Amended]

19. Section 52.213-3 is amended in the introductory text to replace

``13.507(c)'' with ``13.304-5(c)''.

20. Section 52.213-XX is added to read as follows:

[[Page 48543]]

52.213-XX Terms and Conditions--Simplified Acquisitions (Other Than

Commercial Items).

As prescribed in 13.306, insert the following clause:

Terms and Conditions--Simplified Acquisitions (Other Than Commercial

Items) (XXX 1996)

(a) The Contractor shall comply with the following clauses that

are incorporated by reference:

(1) The clauses listed below implement provisions of law or

executive order:

(i) 52.222-3, Convict Labor (APR 1984) (E.O. 11755).

(ii) 52.233-3, Protest After Award (OCT 1995) (31 U.S.C. 3553

and 40 U.S.C. 759).

(2) Listed below are additional clauses that also apply:

(i) 52.225-11, Restrictions on Certain Foreign Purchases (MAY

1992).

(ii) 52.232-1, Payments (APR 1984).

(iii) 52.232-8, Discounts for Prompt Payment (APR 1989).

(iv) 52.232-11, Extras (APR 1984).

(v) 52.232-25, Prompt Payment (MAR 1984).

(vi) 52.232-28, Electronic Funds Transfer Payment Methods (APR

1989).

(vii) 52.233-1, Disputes (OCT 1995).

(viii) 52.253-1, Computer Generated Forms (JAN 1991).

(b) The Contractor shall comply with the following clauses,

incorporated by reference, unless the circumstances do not apply:

(1) The clauses listed below implement provisions of law or

executive orders:

(i) 52.222-20, Walsh-Healey Public Contracts Act (APR 1984) (41

U.S.C. 35-45) (Applies to supply contracts over $10,000 in the U.S).

(ii) 52.222-26, Equal Opportunity (APR 1984) (E.O. 11246)

(Applies to contracts over $10,000).

(iii) 52.222-35, Affirmative Action for Special Disabled and

Vietnam Era Veterans (APR 1984) (38 U.S.C. 4212) (Applies to

contracts over $10,000).

(iv) 52.222-36, Affirmative Action for Handicapped Workers (APR

1984) (29 U.S.C. 793) (Applies to contracts over $2,500).

(v) 52.222-37, Employment Reports on Special Disabled Veterans

and Veterans of the Vietnam Era (JAN 1988) (38 U.S.C. 4212) (Applies

to contracts over $10,000).

(vi) 52.222-41, Service Contract Act of 1965, as amended (MAY

1989) (41 U.S.C. 351 et seq.) (Applies to service contracts over

$2,500).

(vii) 52.222-47, SCA Minimum Wages and Fringe Benefits

Applicable to Successor Contract Pursuant to Predecessor Contractor

Collective Bargaining Agreement (CBA) (MAY 1989) (41 U.S.C. 351 et

seq.).

(viii) 52.225-3, Buy American Act--Supplies (JAN 1994) (41

U.S.C. 10) (Applies to supplies and services involving the

furnishing of supplies unless one or more of the circumstances in

25.109(e) apply).

(ix) 52.225-21, Buy American Act--North American Free Trade

Agreement Implementation Act--Balance of Payments Program (JAN 1996)

(41 U.S.C. 10 and Pub. L. 103-187) (Applies to supplies if the

contract was not set aside for small business concerns and was

subject to NAFTA (see 25.402(a)(3) (ii) and 25.403(b)).

(2) Listed below are additional clauses that may apply:

(i) 52.209-6, Protecting the Government's Interest When

Subcontracting with Contractors Debarred, Suspended, or Proposed for

Debarment (JULY 1995) (Applies to contracts over $25,000).

(ii) 52.247-29, F.o.b. Origin (JUN 1988) (Applies to supplies if

delivery is f.o.b. origin).

(iii) 52.247-34, F.o.b. Destination (NOV 1991) (Applies to

supplies if delivery is f.o.b. destination).

contract incorporates one or more clauses by reference, with the

same force and effect as if they were given in full text. Upon

request, the Contracting Officer will make their full text

available. Also, the full text of a clause may be accessed

electronically at this/these address(es):

----------------------------------------------------------------------

(Insert one or more Internet addresses)

(d) 52.244-6, Subcontracts for Commercial Items and Commercial

Components (OCT 1995).

(1) Definitions.

``Commercial item'', as used in this clause, has the meaning

contained in the clause at 52.202-1, Definitions.

``Subcontract'', as used in this clause, includes a transfer of

commercial items between divisions, subsidiaries, or affiliates of

the Contractor or subcontractor at any tier.

(2) To the maximum extent practicable, the Contractor shall

incorporate, and require its subcontractors at all tiers to

incorporate, commercial items or nondevelopmental items as

components of items to be supplied under this contract.

(3) Notwithstanding any other clause of this contract, the

Contractor is not required to include any FAR provision or clause,

other than those listed below to the extent they are applicable and

as may be required to establish the reasonableness of prices under

Part 15, in a subcontract at any tier for commercial items or

commercial components:

(a) 52.222-26, Equal Opportunity (E.O. 11246);

(b) 52.222-35, Affirmative Action for Special Disabled and

Vietnam Era Veterans (38 U.S.C. 4212(a));

U.S.C. 793); and

(d) 52.247-64, Preference for Privately-Owned U.S.-Flagged

Commercial Vessels (46 U.S.C. 1241) (flow down not required for

subcontracts awarded beginning May 1, 1996).

(4) The Contractor shall include the terms of this clause,

including this paragraph (d), in subcontracts awarded under this

contract.

(e) Inspection/Acceptance. The Contractor shall only tender for

acceptance those items that conform to the requirements of this

contract. The Government reserves the right to inspect or test any

supplies or services that have been tendered for acceptance. The

Government may require repair or replacement of nonconforming

supplies or reperformance of nonconforming services at no increase

in contract price. The Government must exercise its postacceptance

rights (1) within a reasonable time after the defect was discovered

or should have been discovered; and (2) before any substantial

change occurs in the condition of the item, unless the change is due

to the defect in the item.

(f) Termination for the Government's convenience. The Government

reserves the right to terminate this contract, or any part hereof,

for its sole convenience. In the event of such termination, the

Contractor shall immediately stop all work hereunder and shall

immediately cause any and all of its suppliers and subcontractors to

cease work. Subject to the terms of this contract, the Contractor

shall be paid a percentage of the contract price reflecting the

percentage of the work performed prior to the notice of termination,

plus reasonable charges the Contractor can demonstrate to the

satisfaction of the Government using its standard record keeping

system, have resulted from the termination. The Contractor shall not

be required to comply with the cost accounting standards or contract

cost principles for this purpose. This paragraph does not give the

Government any right to audit the Contractor's records. The

Contractor shall not be paid for any work performed or costs

incurred which reasonably could have been avoided.

(g) Termination for cause. The Government may terminate this

contract, or any part hereof, for cause in the event of any default

by the Contractor, or if the Contractor fails to comply with any

contract terms and conditions, or fails to provide the Government,

upon request, with adequate assurances of future performance. In the

event of termination for cause, the Government shall not be liable

to the Contractor for any amount for supplies or services not

accepted, and the Contractor shall be liable to the Government for

any and all rights and remedies provided by law. If it is determined

that the Government improperly terminated this contract for default,

such termination shall be deemed a termination for convenience.

(h) Warranty. The Contractor warrants and implies that the items

delivered hereunder are merchantable and fit for use for the

particular purpose described in this contract.

(End of clause)

21. Section 52.252-1 is revised to read as follows:

52.252-1 Solicitation Provisions Incorporated by Reference.

As prescribed in 52.107(a), insert the following provision:

Solicitation Provisions Incorporated by Reference (XXX 1996)

This solicitation incorporates one or more solicitation

provisions by reference, with the same force and effect as if they

were given in full text. Upon request, the Contracting Officer will

make their full text available. Also, the full text of a

solicitation provision may be accessed electronically at this/these

address(es):

[[Page 48544]]

----------------------------------------------------------------------

(Insert one or more Internet addresses)

(End of provision)

22. Section 52.252-2 is revised to read as follows:

52.252-2 Clauses Incorporated by Reference.

As prescribed in 52.107(b), insert the following clause:

Clauses Incorporated by Reference (XXX 1996)

This contract incorporates one or more clauses by reference,

with the same force and effect as if they were given in full text.

Upon request, the Contracting Officer will make their full text

available. Also, the full text of a clause may be accessed

electronically at this/these address(es):

----------------------------------------------------------------------

(Insert one or more Internet addresses)

(End of clause)

23. Section 52.252-XX is added to read as follows:

52.252-XX Agency and FAR Provisions and Clauses Accessible

Electronically.

As prescribed in 52.107(c), insert the following clause:

Agency and FAR Provisions and Clauses Accessible Electronically (XXX

1996)

(a) This solicitation incorporates the provisions and clauses

listed below by reference, with the same force and effect as if they

were given in full text. The offeror is cautioned that the listed

provisions and clauses may include blocks that must be completed by

the offeror and submitted with the quote or offer. In lieu of

submitting the full text of those provisions/clauses, the offeror

may identify the provision/clause by paragraph identifier and

provide the appropriate information with its quote or offer.

(b) Upon request, the Contracting Officer will make their full

text available. Also, the full text of a provision or clause may be

accessed electronically at this/these address(es):

----------------------------------------------------------------------

(Insert one or more Internet addresses)

----------------------------------------------------------------------

(d) Other provisions and clauses incorporated by reference:

----------------------------------------------------------------------

(End of clause)

PART 53--FORMS

24. Section 53.213 is revised to read as follows:

53.213 Simplified acquisition procedures (SF's 18, 30, 44, 1165, 1449,

OF's 336, 347, 348).

The following forms are prescribed as stated below for use in

simplified acquisition procedures, orders under existing contracts or

agreements, and orders from required sources of supplies and services:

(a) SF 18 (REV 6/95), Request for Quotations, or SF 1449 (10/95

Ed.), Solicitation/Contract/Order for Commercial Items. SF 18

prescribed in 53.215-1(a) or SF 1449 prescribed in 53.212, (or approved

agency forms/automated formats) shall be used in obtaining price, cost,

delivery, and related information from suppliers as specified in

13.309(b).

(b) SF 30 (REV 10/83), Amendment of Solicitation/Modification of

Contract. SF 30, prescribed in 53.243, may be used for modifying

purchase orders, as specified in 13.309(c).

prescribed for use in simplified acquisition procedures, as specified

in 13.309(d).

(d) SF 1165 (6/83 Ed.), Receipt for Cash-Subvoucher. SF 1165 (GAO)

may be used for imprest fund purchases, as specified in 13.309(e).

(e) OF 336 (4/86 Ed.), Continuation sheet. OF 336, prescribed in

53.214(h), may be used as a continuation sheet in solicitations, as

specified in 13.309(c).

(f) SF 1449 (10/95 Ed.), Solicitation/Contract/Order for Commercial

Items, prescribed in 53.212, OF 347 (REV 6/95), Order for Supplies or

Services, and OF 348 (10/83 Ed.), Order for Supplies or Services--

Schedule Continuation. SF 1449, OF's 347 and 348 (or approved agency

forms/automated formats) may be used as follows:

(1) To accomplish acquisitions under simplified acquisition

procedures, as specified in 13.309.

(2) To establish blanket purchase agreements (BPA's), as specified

in 13.305-2(e), and to make purchases under BPA's, as specified in

13.305-4(e).

(3) To issue orders under basic ordering agreements, as specified

in 16.703(d)(2)(i).

(4) As otherwise specified in this regulation (e.g., see

5.503(a)(2), 8.405-2, 36.701(c), and 51.102(e)(3)(ii)).

[FR Doc. 96-23419 Filed 9-12-96; 8:45 am]

BILLING CODE 6820-EP-U

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.