Agriculture Acquisition Regulation; Revision

DEPARTMENT OF AGRICULTURE

Procurement and Property Management

48 CFR Parts 401 through 453

RIN 0599-AA00

Agriculture Acquisition Regulation; Revision

AGENCY: Procurement and Property Management, Agriculture.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture is publishing a revised

Agriculture Acquisition Regulation (AGAR) as a final rule. We are

revising the AGAR to reflect changes in acquisition law and regulations

since the AGAR's last major revision in 1988, to update organizational

references throughout the AGAR, and to streamline the AGAR as part of

the President's Regulatory Reform Initiative.

EFFECTIVE DATE: This regulation is effective November 14, 1996.

FOR FURTHER INFORMATION CONTACT: Joseph J. Daragan, (202) 720-5729.

SUPPLEMENTARY INFORMATION:

I. Background

II. Analysis of comments

III. Procedural Requirements

A. Executive Order Nos. 12866 and 12988.

B. Regulatory Flexibility Act.

C. Paperwork Reduction Act.

D. Small Business Regulatory Enforcement Fairness Act.

I. Background

The AGAR implements the Federal Acquisition Regulation (FAR) (48

CFR Ch. 1) where further implementation is needed, and supplements the

FAR when coverage is needed for subject matter not covered by the FAR.

The AGAR is being revised as part of the National Performance Review

(NPR) program to eliminate unnecessary regulations and improve those

that remain in force.

As an initial step in the NPR regulatory review initiative, the

Department of Agriculture (USDA) identified parts of the AGAR which

required updating or streamlining. USDA's review indicated that almost

all parts required revision. Accordingly, USDA has reviewed and made

revisions to substantially all parts of the AGAR. In an Advance Notice

of Proposed Rulemaking (61 FR 7456, February 28, 1996), USDA sought

comments and suggestions from the public concerning what changes should

be made to the AGAR. In a Notice of Proposed Rulemaking (61 FR 37032,

July 16, 1996), USDA announced that the proposed revision of the AGAR

was available for public review and comment during a 60 day comment

period. The proposed rule was made available in hard copy, as an

electronic file, and as a file on the Internet. The Department of

Agriculture received comments on the proposed rule from 4 Departmental

agencies. No comments were received from individuals, private business

concerns (large or small), state or local governments, or other Federal

agencies. In this rulemaking document, the Department of Agriculture is

finalizing the proposed revision to the AGAR, with changes made to

reflect certain comments received as well as recent amendments to the

FAR.

II. Analysis of Comments

As noted, the Department of Agriculture has carefully considered

the comments submitted in response to the Notice of Proposed Rulemaking

and, as discussed below, is modifying a few portions of the rule as

proposed in adopting it as final. The discussion below is focused on

the major areas of comment regarding the proposed rule changes.

One USDA agency commented that it was unclear why the public would

need more than the FAR to understand USDA acquisition policy and

procedures. We believe that an agency supplement to the FAR provides an

accessible source of information about agency acquisition policies

which may have an effect on businesses dealing with USDA. An agency

supplement may also inform the public in general terms about which

official or level of authority may control acquisition decisions within

the agency. Furthermore, FAR subpart 1.3 requires that agency

acquisition regulations be published in the Federal Register when they

have a significant effect beyond the internal operating procedures of

the agency or have a significant cost or administrative impact on

contractors or offerors. The FAR also may require that FAR policies be

implemented in accordance with agency regulations (see FAR 3.301), or

may provide that agencies may deviate from FAR procedures if specified

in agency acquisition regulations (see FAR 5.303(a)). USDA maintains

the AGAR to provide implementing and supplementing regulations in

accordance with these provisions of the FAR.

One USDA agency commented that the AGAR, whenever possible,

designate the contracting officer as the official responsible for

making acquisition determinations and carrying out responsibilities

outlined in the FAR and the AGAR. Where this is not possible, the

agency commented that the head of the contracting activity (HCA) should

be designated as the responsible official with authority to redelegate

to any level. We do not disagree that authority to conduct acquisitions

and to manage contracts should be delegated to the lowest appropriate

level. We have sought to do this throughout the AGAR to the extent

permitted by the FAR. In some cases, we have sought to delegate

authority to an intermediate level between the contracting officer and

the HCA, such as the chief of the contracting office. ``Chief of the

contracting office'' is a term used in the FAR and in the current AGAR,

and may be applied by contracting activities to a level of authority

consistent with their organizational structure. Accordingly, while we

have corrected some references to authority levels which were

inconsistent or confusing, we

[[Page 53646]]

otherwise have not adopted this comment.

Two agencies commented concerning proposed AGAR 419.201-71(d),

which requires small business coordinators (OSDBU coordinators) to

ensure that purchases ``under the simplified acquisition threshold''

are reserved for small business concerns. Both agencies noted that this

paragraph is inconsistent with the FAR, which establishes a small

business reserve for purchases between the $2,500 micropurchase

threshold and the simplified acquisition threshold. We have corrected

AGAR 419.201-71(d) to conform to the FAR.

One agency commented that AGAR 433.103, Protests to the Agency, did

not imply that protests should be filed with the HCA, and recommended

that protests be filed with the contracting officer. AGAR 433.103

establishes USDA's procedure for agency protests. It designates the HCA

as an alternate forum for resolution of agency protests. Contractors

may file protests either with the contracting officer or the HCA.

Accordingly, we have not adopted this comment. However, the comment did

suggest one potential ambiguity in this section. To clarify the protest

procedure, we have added a requirement that the protester provide a

copy of the protest to the contracting officer if the protest is filed

with the HCA.

The following additional changes have been made to the rule. These

changes were made either to incorporate agency suggestions or to

reflect changes in the FAR.:

(a) AGAR 401.602-3(b) is amended to delegate ratification authority

to the Chief of the Contracting Office.

(b) AGAR 403.408, Evaluation of the SF 119, has been removed to

reflect an amendment to the FAR.

(c) AGAR subpart 406.5 has been amended to designate the Chief,

Procurement Policy Division, Procurement and Property Management, as

Departmental Competition Advocate.

(d) AGAR part 413 has been revised to reflect an amendment to the

FAR.

(e) AGAR 416.404-2 has been amended to provide that the head of the

contracting activity may designate a fee determination official for

award fee contracts.

(f) AGAR 416.505 has been added to designate the Chief, Procurement

Policy Division, Procurement and Property Management, as Departmental

Delivery/Task Order Ombudsman.

(g) AGAR subpart 422.70, Compliance with the Immigration and

Nationality Act, has been removed because the issue is now addressed in

FAR subpart 9.4.

(h) AGAR 425.102(b) and 425.202(b), concerning Buy American Act

nonavailability determinations, have been removed because they

duplicate material in the FAR.

(i) AGAR 425.7, Restrictions on Certain Foreign Purchases, has been

removed to reflect an amendment to the FAR.

(j) AGAR 436.203 has been amended to clarify when construction cost

estimates may be disclosed by the contracting officer.

(k) AGAR 449.111 has been amended to allow contracting activities

to establish procedures for review of termination settlements

III. Procedural Requirements

A. Executive Order Nos. 12866 and 12988

A work plan was prepared for this regulation and submitted to the

Office of Management and Budget pursuant to Executive Order No. 12866.

The proposed rule has been determined to be not significant for the

purposes of Executive Order No. 12866. Therefore, the proposed rule has

not been reviewed by the Office of Management and Budget. This rule has

been reviewed in accordance with Executive Order No. 12988.

B. Review Under the Regulatory Flexibility Act

The proposed rule was reviewed under the Regulatory Flexibility

Act, 5 U.S.C. 601-611, which requires preparation of a regulatory

flexibility analysis for any rule which is likely to have significant

economic impact on a substantial number of small entities. The AGAR is

issued to implement or supplement the FAR, and does not materially add

to the impact of the FAR regulations it implements or supplements. USDA

certifies that this proposed rule will not have a significant economic

effect on a substantial number of small entities, and, therefore, no

regulatory flexibility analysis has been prepared. However, comments

from small entities concerning the impact of the proposed rule were

solicited in the Notice of Proposed Rulemaking which announced the

availability of the proposed rule for comment (61 FR 37032, July 16,

1996). No comments from small entities were received.

C. Paperwork Reduction Act

Information collection and recordkeeping required by the AGAR have

been approved by the OMB. OMB control numbers 0505-0010, 0505-0011,

0505-0013, 0505-0014, 0505-0015, and 0505-0016 apply to the AGAR. No

additional information collection or recordkeeping requirements are

imposed on the public by this final rule. Accordingly no OMB clearance

is required by section 350(h) of the Paperwork Reduction Act, 44 U.S.C.

3501, et. seq., or OMB's implementing regulation at 5 CFR Part 1320.

D. Small Business Regulatory Enforcement Fairness Act

This final rule has been submitted to each House of Congress and

the Comptroller General in accordance with the Small Business

Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, et seq.

List of Subjects in 48 CFR Parts 401 Through 453

Government contracts, Government procurement.

For the reasons set out in the preamble, 48 CFR chapter 4 (parts

401 through 453) is revised as set forth below:

W.R. Ashworth,

Director, Procurement and Property Management.

Agriculture Acquisition Regulation

SUBCHAPTER A--GENERAL

Part 401--Agriculture Acquisition Regulation System

Part 402--Definitions of Words and Terms

Part 403--Improper Business Practices and Personal Conflicts of

Interest

Part 404--Administrative Matters

SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING

Part 405--Publicizing Contract Actions

Part 406--Competition Requirements

Part 407--Acquisition Planning

Part 408--Required Sources of Supplies and Services

Part 409--Contractor Qualifications

Part 410--[Reserved]

Part 411--Describing Agency Needs

Part 412--Acquisition of Commercial Items

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

Part 413--Simplified Acquisition Procedures

Part 414--Sealed Bidding

Part 415--Contracting by Negotiation

Part 416--Types of Contracts

Part 417--Special Contracting Methods

Part 418--[Reserved]

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

Part 419--Small Business Programs

Part 420--[Reserved]

Part 421--[Reserved]

Part 422--Application of Labor Laws to Government Acquisitions

Part 423--Environment, Conservation, Occupational Safety, and Drug-

Free Workplace

Part 424--Protection of Privacy and Freedom of Information

Part 425--Foreign Acquisition

Part 426--[Reserved]

[[Page 53647]]

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

Part 427--Patents, Data, and Copyrights

Part 428--Bonds and Insurance

Part 429--[Reserved]

Part 430--Cost Accounting Standards Administration

Part 431--Contract Cost Principles and Procedures

Part 432--Contract Financing

Part 433--Protests, Disputes and Appeals

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

Part 434--Major System Acquisition

Part 435--Research and Development Contracting

Part 436--Construction and Architect-Engineer Contracts

Part 437--Service Contracting

Part 438--[Reserved]

Part 439--[Reserved]

Part 440--[Reserved]

Part 441--Acquisition of Utility Services

SUBCHAPTER G--CONTRACT MANAGEMENT

Part 442--Contract Administration

Part 443--[Reserved]

Part 444--[Reserved]

Part 445--Government Property

Part 446--Quality Assurance

Part 447--Transportation

Part 448--[Reserved]

Part 449--Termination of Contracts

Part 450--Extraordinary Contractual Actions

Part 451--[Reserved]

SUBCHAPTER H--CLAUSES AND FORMS

Part 452--Solicitation Provisions and Contract Clauses

Part 453--Forms

SUBCHAPTER A--GENERAL

PART 401--AGRICULTURE ACQUISITION REGULATION SYSTEM

Sec.

401.000 Scope of part.

Subpart 401.1--Purpose, Authority, Issuance

401.101 Purpose.

401.103 Authority.

401.104 Applicability.

401.105 Issuance.

401.105-1 Publication and code arrangement.

401.105-2 Arrangement of regulations.

401.105-3 Copies.

401.106 OMB approval under the Paperwork Reduction Act.

Subpart 401.2--Administration

401.201 Maintenance of the FAR.

401.201-1 The two councils.

Subpart 401.3--Agency Acquisition Regulations

401.301 Policy.

401.304 Agency control and compliance procedures.

401.370 Exclusions.

401.371 AGAR Advisories.

401.372 Departmental directives.

Subpart 401.4--Deviations From the FAR and AGAR

401.402 Policy.

401.403 Individual deviations.

401.404 Class deviations.

Subpart 401.6--Contracting Authority and Responsibilities

401.601 General.

401.602 Contracting officers.

401.602-3 Ratification of unauthorized commitments.

401.603 Selection, appointment, and termination of appointment.

401.603-1 General.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

401.000 Scope of part.

This part presents basic policies and general information about the

Department of Agriculture's (USDA) Acquisition Regulation, subsequently

referred to as the AGAR. The AGAR is an integral part of the Federal

Acquisition Regulations System.

Subpart 401.1--Purpose, Authority, Issuance

401.101 Purpose.

(a) The AGAR provides for the codification and publication of

uniform policies and procedures for acquisitions by contracting

activities within USDA.

(b) The purpose of the AGAR is to implement the Federal Acquisition

Regulation (FAR), where further implementation is needed, and to

supplement the FAR when coverage is needed for subject matter not

covered in the FAR. The AGAR is not by itself a complete document, as

it must be used in conjunction with the FAR.

401.103 Authority.

The AGAR and amendments thereto are issued under 5 U.S.C. 301 and

40 U.S.C. 486(c). The Senior Procurement Executive (SPE) has the

delegated authority to promulgate Departmental acquisition regulations.

401.104 Applicability.

The FAR and AGAR apply to all USDA acquisitions of supplies and

services (including construction) which obligate appropriated funds,

unless otherwise specified in this chapter or excepted by law.

401.105 Issuance.

401.105-1 Publication and code arrangement.

(a) The AGAR is codified in the Code of Federal Regulations (CFR)

as Chapter 4 of Title 48, Federal Acquisition Regulations System, to

implement and supplement Chapter 1 which constitutes the FAR. Parts 400

through 499 have been assigned to USDA by the Office of the Federal

Register.

(b) The AGAR and its subsequent changes are published in:

(1) Daily issues of the Federal Register,

(2) Cumulative form in the CFR, and

(3) Loose-leaf form for distribution within USDA.

(c) Section 553(a)(2) of the Administrative Procedure Act, 5 U.S.C.

553, provides an exception from the standard public rulemaking

procedures to the extent that the rule involves a matter relating to

agency management or personnel or to public property, loans, grants,

benefits, or contracts. OFPP Policy Letter 83-2 requires rulemaking for

substantive acquisition rules but allows discretion in the matter for

other than significant issues meeting the stated criteria. The AGAR has

been promulgated and may be revised from time to time in accordance

with the rulemaking procedures of the Administrative Procedure Act and

OFPP Policy Letter 83-2.

401.105-2 Arrangement of regulations.

AGAR coverage parallels the FAR in format, arrangement, and

numbering system. However, subdivisions below the section and

subsection levels may not always correlate directly to FAR designated

paragraphs and subparagraphs.

401.105-3 Copies.

Copies of the AGAR published in CFR form may be purchased from the

Superintendent of Documents, Government Printing Office, Washington,

D.C. 20402. Requests should reference Chapter 4 of Title 48 CFR.

401.106 OMB approval under the Paperwork Reduction Act.

The following OMB control numbers apply to USDA solicitations and

specified information collections within the AGAR:

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

OMB Control

AGAR segment No.

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411.170.................................................... 0505-0014

415.4...................................................... 0505-0013

436.575.................................................... 0505-0011

437.110.................................................... 0505-0015

437.270.................................................... 0505-0016

452.211-1.................................................. 0505-0014

452.215-71................................................. 0505-0013

452.236-75................................................. 0505-0011

452.237-74................................................. 0505-0015

452.237-76................................................. 0505-0016

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[[Page 53648]]

Subpart 401.2--Administration

401.201 Maintenance of the FAR.

401.201-1 The two councils.

(a) USDA's representative on the Civilian Agency Acquisition

Council is designated by the SPE.

(b) The Procurement Policy Division will coordinate proposed FAR

revisions with interested contracting activities.

Subpart 401.3--Agency Acquisition Regulations

401.301 Policy.

(a) The SPE, subject to the authorities in 401.103 and FAR 1.301,

may issue and publish Departmental regulations, that together with the

FAR, constitute Department-wide policies, procedures, solicitation

provisions, and contract clauses governing the contracting process or

otherwise controlling the relationship between USDA (including any of

its contracting activities) and contractors or prospective contractors.

(b) Each designated head of a contracting activity (HCA) is

authorized to issue or authorize the issuance of, at any organizational

level, internal guidance which does not have a significant effect

beyond the internal operating procedures of the activity, or a

significant cost or administrative impact on offerors or contractors.

Internal guidance issued by contracting activities will not be

published in the Federal Register. HCA's shall ensure that the

guidance, procedures, or instructions issued--

(1) Are consistent with the policies and procedures contained in

this chapter;

(2) Follow the format, arrangement, and numbering system of this

chapter to the extent practicable;

(3) Contain no material which duplicates, paraphrases, or is

inconsistent with this chapter; and

(4) Are numbered and identified by use of alphabetical suffixes to

the chapter number as follows:

4A [Reserved].

4B Agricultural Research Service.

4C Farm Service Agency.

4D Rural Development (mission area).

4E Food Safety and Inspection Service.

4F [Reserved].

4G Forest Service.

4H [Reserved].

4I Natural Resources Conservation Service.

4J [Reserved].

4K Food and Consumer Service.

4L Animal and Plant Health Inspection Service.

4M [Reserved].

4N Office of Operations.

4O [Reserved].

4P [Reserved].

4R Office of Inspector General.

4S [Reserved].

401.304 Agency control and compliance procedures.

(a) The AGAR System is under the direct oversight and control of

the SPE, who is responsible for review and issuance of all Department-

wide acquisition regulations published in the Federal Register to

assure compliance with FAR part 1.

(b) The SPE is also responsible for review and issuance of

unpublished, Department-wide internal guidance under the AGAR System.

(c) HCA's are responsible for establishment and implementation of

formal procedures for oversight and control of unpublished internal

guidance issued within the contracting activity to implement FAR or

AGAR requirements. These procedures shall be subject to the review and

approval by the SPE.

(d) The SPE is responsible for evaluating coverage under the AGAR

System to determine applicability to other agencies and for

recommending coverage to the FAR Secretariat for inclusion in the FAR.

(e) Recommendations for revision of existing FAR coverage or new

FAR coverage shall be submitted by the HCA to the SPE for further

action.

401.370 Exclusions.

Subject to the policies of FAR subpart 1.3, certain USDA

acquisition policies and procedures may be excluded from the AGAR under

appropriately justified circumstances, such as:

(a) Subject matter which is effective for a period less than 12

months.

(b) Subject matter which is instituted on an experimental basis for

a reasonable period.

(c) Acquisition procedures instituted on an interim basis to comply

with the requirements of statute, regulation, Executive Order, OMB

Circular, or OFPP Policy Letter.

401.371 AGAR Advisories.

The SPE may issue AGAR Advisories, consistent with the policies of

the FAR and the AGAR, for the following purposes:

(a) To communicate Department-wide policy and/or procedural

guidance to contracting activities;

(b) To delegate to procurement officials authority to make

determinations or to take action to implement the policies of the FAR

or the AGAR; and,

(c) To establish internal policy and procedures on an interim

basis, prior to incorporation in the AGAR or in a Departmental

Directive.

401.372 Departmental directives.

Subject to the policies of FAR 1.3, USDA from time to time may

issue internal directives to establish procedures, standards, guidance,

or methods of performing duties, functions, or operations. Such

directives include Departmental Regulations (DR's), Departmental

Notices, and Secretary's Memoranda.

Subpart 401.4--Deviations from the FAR and AGAR

401.402 Policy.

Requests for authority to deviate from the provisions of the FAR or

the AGAR shall be submitted in writing as far in advance as the

exigencies of the situation will permit. Each request for deviation

shall contain the following:

(a) A statement of the deviation desired, including identification

of the specific paragraph number(s) of the FAR and AGAR;

(b) The reason why the deviation is considered necessary or would

be in the best interest of the Government;

(c) If applicable, the name of the contractor and identification of

the contract affected;

(d) A statement as to whether the deviation has been requested

previously and, if so, circumstances of the previous request;

(e) A description of the intended effect of the deviation;

(f) A statement of the period of time for which the deviation is

needed; and

(g) Any pertinent background information which will contribute to a

full understanding of the desired deviation.

401.403 Individual deviations.

In individual cases, deviations from either the FAR or the AGAR

will be authorized only when essential to effect a necessary

acquisition or where special circumstances make such deviations clearly

in the best interest of the Government. Except for cost principles,

HCA's may approve individual deviations from the AGAR, after

coordinating with the General Counsel and the SPE. No deviations from

the FAR or AGAR may be authorized at the contracting office level. A

copy of each deviation and its supporting documentation shall be

provided to the SPE. Deviations from the FAR shall not be made unless

such action is authorized by the SPE after consultation with the Office

of the General Counsel and any other appropriate office, on the basis

of a written justification stating clearly the special circumstances

involved.

[[Page 53649]]

401.404 Class deviations.

Where deviations from the FAR or AGAR are considered necessary for

classes of contracts, requests for authority to deviate shall be

submitted in writing to the SPE for approval. The SPE may authorize

class deviations from the FAR without consulting the Chairperson of the

Civilian Agency Acquisition Council where urgency precludes

consultation. The SPE shall subsequently inform the Chairperson of the

Civilian Agency Acquisition Council of the deviation including the

circumstances under which it was required.

Subpart 401.6--Contracting Authority and Responsibilities

401.601 General.

(a) The authority and responsibility vested in the Secretary to

manage USDA's acquisition function is delegated through the Assistant

Secretary for Administration to the SPE. This broad authority includes,

but is not limited to, the following responsibilities:

(1) Prescribing and publishing Departmental acquisition policies,

regulations, and procedures.

(2) Taking any necessary actions consistent with policies,

regulations, and procedures with respect to purchases, contracts,

leases, and other transactions.

(3) Designating contracting officers.

(4) Establishing clear lines of contracting authority.

(5) Evaluating and monitoring the performance of USDA's acquisition

system.

(6) Managing and enhancing career development of the contracting

work force.

(7) Participating in the development of Government-wide acquisition

policies, regulations, and standards; and determining specific areas

where government-wide performance standards should be established and

applied.

(8) Determining areas of Department-unique standards and developing

unique Department-wide standards.

(9) Certifying to the Secretary that the acquisition system meets

approved standards.

(b) The SPE may delegate contracting authority to the Heads of

Contracting Activities (HCA's) and the responsibility to manage their

acquisition function.

(c) Unless prohibited by the FAR, the AGAR, or by other applicable

statutes and regulations, the SPE may redelegate to HCA's the authority

to make determinations as the agency head in order to implement the

policies and procedures of the FAR. Such delegations shall be in

writing, but need not be published.

(d) Unless prohibited by the FAR, the AGAR, or by other applicable

statutes or regulations, each HCA may designate one individual from the

contracting activity to carry out the functions of the HCA (HCAD). The

HCAD may exercise all authority delegated to the HCA.

401.602 Contracting officers.

401.602-3 Ratification of unauthorized commitments.

(a) Definitions. ``Ratification,'' as used in this section, means

the signed, documented action taken by an authorized official to

approve and sanction a previously unauthorized commitment.

``Unauthorized commitment,'' as used in this section, means an

agreement made by a Government representative who lacked the authority

to enter into a contract on behalf of the Government.

(b) Policy. The HCA may delegate ratification authority to the

chief of the contracting office.

(c) Procedure. Whenever an official of the cognizant contracting

activity who is authorized to ratify unauthorized commitments learns

that a person or firm has assumed work as a result of an unauthorized

commitment, that official shall take the following actions:

(1) Immediately inform any person who is performing work as a

result of an unauthorized commitment that the work is being performed

at that person's risk;

(2) Inform the individual who made the unauthorized commitment of

the seriousness of the act and the possible consequences;

(3) Ensure that the individual who made the unauthorized commitment

furnishes all records and documents concerning the commitment and a

complete, written statement of facts, including, but not limited to: a

statement as to why a contracting officer was not used; why the vendor

was selected and a list of sources considered; a description of work to

be performed or products to be furnished; the estimated or agreed

price; whether an appropriation is available for the work; and whether

performance has begun. Under exceptional circumstances, such as when

the individual who made the unauthorized commitment is no longer

available to attest to the circumstances of the unauthorized

commitment, the ratifying official may waive these requirements; and

(4) Decide whether ratification is proper and proceed as follows:

(i) If ratification is not justifiable, provide the cognizant

program office, contracting office, and the unauthorized contractor

with an explanation of the decision not to ratify.

(ii) If ratification appears adequately justified, ratify the

action and retain or assign the contract to a successor contracting

officer if necessary.

(iii) Maintain related approval, decisional, and background

documents in the contract file for audit purposes.

(iv) Notify the cognizant program supervisor or line officer about

the final disposition of the case; the notification may include a

recommendation that the unauthorized commitment should be further

considered a violation of USDA's employee conduct regulations.

401.603 Selection, appointment, and termination of appointment.

401.603-1 General.

An HCA may delegate contracting authority to the extent authorized

by the SPE in a general delegation of acquisition authority, by

appointing qualified individuals as contracting officers, in accordance

with the USDA Contracting Officer Warrant System, Departmental

Regulation 5001-1.

PART 402--DEFINITIONS OF WORDS AND TERMS

Sec.

402.000 Scope of part.

Subpart 402.1--Definitions

402.101 Definitions.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

402.000 Scope of part.

As used throughout this chapter, the following words and terms are

used as defined in this subpart unless the context in which they are

used clearly requires a different meaning, or a different definition is

prescribed for a particular part or portion of a part.

Subpart 402.1--Definitions

402.101 Definitions.

Acquisition official means an individual who has been delegated

authority to manage or to exercise acquisition functions and

responsibilities.

Agency head or Head of the Agency means the Secretary of

Agriculture, Deputy Secretary, or the Assistant Secretary for

Administration.

Head of the contracting activity (HCA) means the official who has

overall responsibility for managing the contracting activity (i.e.,

Chief, Forest Service; Administrator, Agricultural Research Service;

etc.), or the individual designated by such an official to carry out

the functions of the HCA.

[[Page 53650]]

Senior Procurement Executive (SPE) means the agency official

appointed as such by the head of the agency pursuant to Executive Order

12931. The Director, Procurement and Property Management, Policy

Analysis and Coordination Center, has been designated as the USDA SPE.

PART 403--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF

INTEREST

Subpart 403.1--Safeguards

Sec.

403.101 Standards of conduct.

403.101-3 Agency regulations.

403.104 Procurement integrity.

403.104-5 Disclosure, protection, and marking of proprietary and

source selection information.

403.104-11 Processing violations or possible violations.

Subpart 403.2--Contractor Gratuities to Government Personnel

403.203 Reporting suspected violations of the gratuities clause.

403.204 Treatment of violations.

Subpart 403.3--Reports of Suspected Antitrust Violations

403.303 Reporting suspected antitrust violations.

Subpart 403.4--Contingent Fees

403.409 Misrepresentations or violations of the Covenant Against

Contingent Fees.

Subpart 403.5--Other Improper Business Practices

403.502 Subcontractor kickbacks.

Subpart 403.6--Contracts With Government Employees or Organizations

Owned or Controlled by them

403.602 Exceptions.

403.603 Responsibilities of the contracting officer.

Subpart 403.8--Limitation on the Payment of Funds to Influence Federal

Transactions

403.806 Processing suspected violations

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 403.1--Safeguards

403.101 Standards of conduct.

403.101-3 Agency regulations.

(a) The standards of conduct for USDA procurement officials are the

uniform standards established by the Office of Government Ethics in 5

CFR Part 2635, Standards of Ethical Conduct for Employees of the

Executive Branch, and FAR 3.104, Procurement integrity.

(b) Procurement officials and other employees who require advice

concerning the application of standards of conduct to any acquisition

issue shall obtain ethics advisory opinions from ethics advisory

officials in their agency personnel offices.

403.104 Procurement integrity.

403.104-5 Disclosure, protection, and marking of proprietary and

source selection information.

For contracts and contract modifications in excess of $100,000, the

contracting officer shall assure that the information listed in FAR

3.104-5(d)(2) is maintained in the contract file.

403.104-11 Processing violations or possible violations.

(a) The contracting officer shall forward information concerning

any violation or possible violation of the Procurement Integrity Act

(41 U.S.C. 423) to the chief of the contracting office.

(b) Heads of contracting activities (HCA's) or their designees who

receive information concerning any violation or possible violation of

the Act shall take action in accordance with FAR 3.104-11(b)(1), (2),

(3), or (4).

Subpart 403.2--Contractor Gratuities to Government Personnel

403.203 Reporting suspected violations of the gratuities clause.

A suspected violation of the contract clause, FAR 52.203-3,

Gratuities, shall be reported immediately to the cognizant contracting

officer in writing, stating the circumstances surrounding the

incident(s), the date(s), and names of all parties involved. The

contracting officer shall review the report for completeness, add any

additional information deemed necessary and a recommendation for

action, and submit the report to the HCA.

403.204 Treatment of violations.

The HCA shall review the report and consult with the Offices of

General Counsel and Inspector General to determine whether further

action should be pursued. If it is found that the facts and

circumstances warrant further action, the HCA shall give the contractor

a formal written notice which summarizes the reported violation and

affords the contractor the opportunity to make a written or oral

response within a reasonable, specified period after receipt of the

notice. The notice shall be sent by certified mail with return receipt

requested. Oral presentations shall follow the procedures outlined in

FAR 3.204(b). The HCA shall furnish copies of any adverse determination

to the contracting officer and the Department Debarring Officer for

their subsequent considerations under FAR 3.204(c)(1) and (2),

respectively.

Subpart 403.3--Reports of Suspected Antitrust Violations

403.303 Reporting suspected antitrust violations.

Contracting officers shall report the circumstances of suspected

violations of antitrust laws to the Office of Inspector General in

accordance with procedures in Departmental Regulations (1700 series).

Subpart 403.4--Contingent Fees

403.409 Misrepresentations or violations of the Covenant Against

Contingent Fees.

(a) A suspected misrepresentation or violation of the Covenant

Against Contingent Fees shall be documented in writing by the

contracting officer and reported immediately to the chief of the

contracting office. The chief of the contracting office shall determine

if a violation has occurred and report any violation to the Office of

Inspector General. The chief of the contracting office shall take

action in accordance with FAR 3.409(b).

(b) If the chief of the contracting office decides to refer the

case to the Department of Justice, it should be referred through the

Office of Inspector General with a copy of the report and referral

submitted through the HCA to the Senior Procurement Executive.

Subpart 403.5--Other Improper Business Practices

403.502 Subcontractor kickbacks.

Contracting officers shall report the circumstances of suspected

violations of the Anti-Kickback Act (41 U.S.C. 51-54) to the Office of

Inspector General in accordance with procedures in Departmental

Regulations (1700 series).

Subpart 403.6--Contracts With Government Employees or Organizations

Owned or Controlled by Them

403.602 Exceptions.

The HCA is authorized to accept a contract from the policy in FAR

3.601.

403.603 Responsibilities of the contracting officer.

The contracting officer, when requesting authorization under

403.602, shall prepare a written determination and findings for the

signature of the HCA. The determination shall document compliance with

FAR 3.603, specifying the compelling reason(s) for award, and shall be

placed in the contract file.

[[Page 53651]]

Subpart 403.8--Limitation on the Payment of Funds to Influence

Federal Transactions

403.806 Processing suspected violations.

Suspected violations of the requirements of 31 U.S.C. 1352 shall be

referred to the Office of Inspector General in accordance with

procedures in Departmental Regulations (1700 series).

PART 404--ADMINISTRATIVE MATTERS

Subpart 404.4--Safeguarding Classified Information Within Industry

Sec.

404.403 Responsibilities of contracting officers.

Subpart 404.6--Contract Reporting

404.601 Record requirements.

404.602 Federal Procurement Data System.

Subpart 404.8--Contract Files

404.870 Document numbering system.

404.870-1 Purchase order/delivery order numbering system.

404.870-2 Contract numbering system.

Subpart 404.70--Precontract Notices

404.7001 Solicitation provision.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 404.4--Safeguarding Classified Information Within Industry

404.403 Responsibilities of contracting officers.

When a proposed solicitation is likely to require access to

information classified by USDA, the contracting officer shall consult

with the Director of Human Resources Management within the Policy

Analysis and Coordination Center of the Office of Assistant Secretary

for Administration, regarding the procedures that must be followed.

Subpart 404.6--Contract Reporting

404.601 Record requirements.

The Senior Procurement Executive (SPE) manages an automated

procurement reporting system for USDA. This system provides the Federal

Procurement Data System with all required contracting information.

404.602 Federal Procurement Data System.

Contracting activities shall report contract actions into the USDA

Procurement Reporting System in accordance with the instructions issued

or distributed by the SPE.

Subpart 404.8--Contract Files

404.870 Document numbering system.

404.870-1 Purchase order/delivery order numbering system.

USDA purchasing activities shall number their purchase/delivery

orders in accordance with NFC Procedures Manual, ``Purchase Orders,''

Title II, Section 5.1.

404.870-2 Contract numbering system.

Contracting offices shall assign an 8 to 12-digit number to all

contracts. Contract numbers will be divided into four data elements and

formatted as follows:

(1)--------------------------------------(2)-----(3)-----------------(4)

Transaction Ordering Fiscal Control

Code Office Year Number

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

XX XXXX X X to XXXXX

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

(a) Transaction code. This two-position code identifies the

contract as being one of the following types:

(1) Code 50--construction contract;

(2) Code 51--[Reserved]

(3) Code 52--tree planting/thinning contract;

(4) Code 53--service contract;

(5) Code 54--supply contract;

(6) Code 55--aircraft rental (for fire-fighting purposes only)

contract;

(7) Code 56--personal equipment rental (rental of vehicular

equipment for firefighting purposes only) contract;

(8) Code 57--leasehold interest in real property contract.

(b) Ordering office. This four-position code corresponds to the

last four characters of the contracting office's GSA assigned

FEDSTRIP requisitioner number.

(c) Fiscal year. This one-position code corresponds to the last

digit of the fiscal year in which the contract becomes effective.

(d) Control number. This up-to-five position code (from one to

five characters may be used) will be assigned by the contracting

office. While contracts will generally be numbered consecutively (1

through 99999), contracting offices may assign codes in any manner

of their choosing. Codes may not be repeated, however, unless one of

the preceding data elements (transaction code, ordering office, or

fiscal year) changes. Alpha characters as well as numerals may be

used in any one or more of the five positions.

Subpart 404.70--Precontract Notices

404.7001 Solicitation Provision.

The contracting officer shall insert the provision at 452.204-70,

Inquiries, in all solicitations.

SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING

PART 405--PUBLICIZING CONTRACT ACTIONS

Subpart 405.3--Synopses of Contract Awards

Sec.

405.303 Announcement of contract awards.

Subpart 405.4--Release of Information

405.403 Requests from Members of Congress.

405.404 Release of long-range acquisition estimates.

405.404-1 Release procedures.

Subpart 405.5--Paid Advertisements

405.502 Authority.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 405.3--Synopses of Contract Awards

405.303 Announcement of contract awards.

Contracting officers shall make information available on any

contract award with an estimated total value over $1 million (including

options) to their agency congressional liaison office in sufficient

time for the agency to announce it by 5:00 p.m. Washington, DC time on

the day of award. The agency congressional liaison office shall,

concurrent with the public announcement, provide the award announcement

information to the USDA Congressional Relations Office.

Subpart 405.4--Release of Information

405.403 Requests from Members of Congress.

The head of the contracting activity (HCA) is the agency head

designee pursuant to FAR 5.403(a).

405.404 Release of long-range acquisition estimates.

405.404-1 Release procedures.

(a) HCA's shall establish written procedures to control the release

of long-range acquisition estimates, as authorized under FAR 5.404-1.

(b) Classified information shall not be released without the

approval of the USDA Security Officer, Policy Analysis and Coordination

Center--Human Resources Management. Departmental Manual and Regulation

(3400 series) contain guidance on classified information.

Subpart 405.5--Paid Advertisements

405.502 Authority.

(a) The authority vested in the agency head to authorize

publication of paid advertisements in newspapers (44

[[Page 53652]]

U.S.C. 3702) is delegated, with power of redelegation, to HCA's. HCA

redelegation of this authority shall be in writing.

(b) Policies and procedures regarding prior authorization required

for media other than newspapers are contained in USDA Departmental

Regulations 1400 series.

Part 406--Competition Requirements

Subpart 406.2--Full and Open Competition After Exclusion of Sources

Sec.

406.202 Establishing or maintaining alternative sources.

Subpart 406.3--Other Than Full and Open Competition

406.302 Circumstances permitting other than full and open

competition.

406.302-70 Otherwise authorized by law.

Subpart 406.5--Competition Advocates

406.501 Requirements.

Authority: 5 U.S.C. and 40 U.S.C. 486(c).

Subpart 406.2--Full and Open Competition After Exclusion of Sources

406.202 Establishing or maintaining alternative sources.

The Senior Procurement Executive is authorized to make

determinations pursuant to FAR 6.202(a) and sign the determination and

findings required by FAR 6.202(b).

Subpart 406.3--Other than Full and Open Competition

406.302 Circumstances permitting other than full and open competition.

406.302-70 Otherwise authorized by law.

(a) Authority. Section 1472 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3318) (the Act)

authorizes the Secretary of Agriculture to award contracts, without

competition, to further research, extension, or teaching programs in

the food and agricultural sciences.

(b) Limitations. The use of this authority is limited to those

instances where it can be determined that contracting without full and

open competition is in the best interest of the Government and

necessary to the accomplishment of the research, extension, or teaching

program. Therefore:

(1) Contracts under the authority of the Act shall be awarded on a

competitive basis to the maximum practicable extent.

(2) When full and open competition is not deemed appropriate, the

contracting officer shall make a written justification on a case-by-

case basis in accordance with procedures in FAR 6.303 and 6.304.

Subpart 406.5--Competition Advocates

406.501 Requirements.

(a) The Chief, Procurement Policy Division, Procurement and

Property Management, Policy Analysis and Coordination Center, has been

designated as the Competition Advocate for USDA.

(b) Each HCA shall designate a competition advocate for the

contracting activity.

PART 407--ACQUISITION PLANNING

Subpart 407.1--Acquisition Plans

Sec.

407.103 Agency-head responsibilities.

407.170 Advance acquisition plans.

Subpart 407.3--Contractor Versus Government Performance

407.302 General.

Subpart 407.5--Inherently Governmental Functions

407.503 Policy.

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

Subpart 407.1--Acquisition Plans

407.103 Agency-head responsibilities.

Heads of Contracting Activities (HCA's) shall develop procedures to

comply with FAR 7.103.

407.170 Advance acquisition plans.

Each HCA shall implement an advance acquisition planning system in

accordance with procedures in Departmental Directives (5000 series).

Subpart 407.3--Contractor Versus Government Performance

407.302 General.

The requirements of FAR subpart 7.3 and OMB Circular A-76 are

implemented by Departmental Directives (2100 series).

Subpart 407.5--Inherently Governmental Functions

407.503 Policy.

(a) HCA's shall establish procedures to ensure that requesting

activities provide the written determination required by FAR 7.503(e),

when submitting requests for procurement of services.

(b) In the event of a disagreement as to whether the functions to

be performed are inherently governmental, the HCA may refer the matter

to the Senior Procurement Executive (SPE) for resolution. When

submitting disagreements to the SPE for resolution the HCA shall

provide a summary of the areas of disagreement, supported by the

following:

(1) The HCA's assessment of whether the services are ``inherently

governmental'';

(2) The basis for that assessment (include references to the

definition and policy in FAR subpart 7.5 and/or Office of Federal

Procurement Policy letter 92-1);

(3) A copy of the statement of work; and,

(4) The requesting activity written determination in accordance

with FAR 7.503(e).

(c) Such disagreements shall be resolved prior to issuance of the

solicitation.

PART 408--REQUIRED SOURCES OF SUPPLIES AND SERVICES

Subpart 408.4--Federal Supply Schedules

Sec.

408.404 Using schedules.

408.404-3 Requests for waivers.

Subpart 408.7--Acquisition From Nonprofit Agencies Employing People Who

Are Blind or Severely Handicapped

408.701 Definitions.

408.705 Procedures.

408.705-2 Direct order process.

408.705-3 Allocation process.

408.705-4 Compliance with orders.

408.706 Purchase exemptions.

408.707 Prices.

408.711 Quality complaints.

408.712 Specification changes.

408.714 Communications with the central nonprofit agencies and the

Committee.

Subpart 408.8--Acquisition of Printing and Related Supplies

408.802 Policy.

Subpart 408.11--Leasing of Motor Vehicles

408.1103 Contract requirements.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 408.4--Federal Supply Schedules

408.404 Using schedules.

408.404-3 Requests for waivers.

A copy of the request for a waiver and the approval shall be placed

in the contract file to support the acquisition of items off schedule.

Subpart 408.7--Acquisition From Nonprofit Agencies Employing People

Who Are Blind or Severely Handicapped

408.701 Definitions.

Committee Member is the Presidential appointee representing USDA as

a member of the Committee for Purchase

[[Page 53653]]

from People Who Are Blind or Severely Disabled.

Organization head is the head of the contracting activity (HCA),

the head of a USDA corporation (as described in 31 U.S.C. 9101), or the

head of a USDA staff office.

408.705 Procedures.

(a) The organization head shall appoint one person as Javits-

Wagner-O'Day Act (JWOD) Advocate to represent the organization and to

coordinate the organization's actions with the Committee Member.

(b) JWOD advocates may represent more than one organization.

Advocates need not be acquisition officials.

(c) The organization head shall issue and maintain an action plan

to promote and enhance the organization's acquisitions from JWOD

participating nonprofit agencies.

(d) The action plan shall:

(1) Announce the organization's support for the JWOD Act;

(2) Establish a promotion program for the products and services

provided by the JWOD participating nonprofit agencies;

(3) Provide for the JWOD Advocate's role in acquisition planning;

(4) Establish measurable program goals for growth or other

accomplishment in the organization's JWOD program actions; and

(5) Establish an awards program for successful participation in the

JWOD program.

408.705-2 Direct order process.

(a) The chief of a contracting office may apply to a central

nonprofit agency for authorization to order specific supplies or

services directly from a JWOD participating nonprofit agency.

(b) A copy of the application should be provided to the JWOD

Advocate who will inform the USDA Committee Member.

408.705-3 Allocation process.

(a) The chief of a contracting office may apply to a central

nonprofit agency for a production allocation of specific supplies or

services to a JWOD participating nonprofit agency.

(b) A copy of the application should be provided to the JWOD

Advocate who will inform the USDA Committee Member.

408.705-4 Compliance with orders.

Prior to attempting to resolve a failure to perform by a

participating nonprofit agency with the Committee, the chief of the

contracting office should provide advance notice to the JWOD Advocate

who will inform the USDA Committee Member.

408.706 Purchase exemptions.

Prior to applying to the Committee for a purchase exemption, the

chief of the contracting office should provide advance notice to the

JWOD Advocate who will inform the USDA Committee Member.

408.707 Prices.

Prior to applying for a price revision, the chief of the

contracting office should provide advance notice to the JWOD Advocate

who will inform the USDA Committee Member.

408.711 Quality complaints.

Prior to attempting to resolve a complaint regarding the quality of

goods or services provided by participating nonprofit agency with the

Committee, the chief of the contracting office should provide advance

notice to the JWOD Advocate who will inform the USDA Committee Member.

408.712 Specification changes.

Prior to providing 90-days advance notification to the Committee on

actions that affect supplies and services on the Procurement List, the

chief of the contracting office should provide advance notice to the

JWOD Advocate who will inform the USDA Committee Member.

408.714 Communications with the central nonprofit agencies and the

Committee.

Any matter requiring referral to the Committee shall be provided to

the JWOD Advocate who will coordinate the matter with the Committee

Member.

Subpart 408.8--Acquisition of Printing and Related Supplies

408.802 Policy.

(a) The Director, Office of Communications (OC) has been designated

as the central printing authority in USDA, with the authority to

represent the USDA before the Joint Committee on Printing (JCP), the

Government Printing Office, and other Federal and State agencies on all

matters related to printing.

(b) Prior to contracting for any of the items defined in FAR 8.801,

the contracting officer shall verify that the requisite approval has

been received by the publication liaison officer or requisitioner.

(c) The approval from OC or the approval authority designated by OC

shall be maintained in the contract file.

Subpart 408.11--Leasing of Motor Vehicles

408.1103 Contract requirements.

If the requirement includes the need for the vendor to provide

operational maintenance such as oil and other fluid changes or

replenishment, the contracting officer shall include in the contract:

(1) A requirement for fluids containing the maximum available

amounts of recovered materials; and

(2) A preference for either retreaded tires meeting the Federal

retread specifications or retreading services for the tires on the

vehicle.

PART 409--CONTRACTOR QUALIFICATIONS

Subpart 409.4--Debarment, Suspension and Ineligibility

Sec.

409.403 Definitions.

409.404 List of parties excluded from Federal procurement and

nonprocurement programs.

409.405 Effect of listing.

409.405-1 Continuation of current contracts.

409.405-2 Restrictions on subcontracting.

409.406 Debarment.

409.406-3 Procedures.

409.407 Suspension.

409.407-3 Procedures.

409.470 Appeals.

Subpart 409.5--Organizational and Consultant Conflicts of Interest

409.503 Waiver.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 409.4--Debarment, Suspension and Ineligibility

409.403 Definitions.

Debarring official. The Senior Procurement Executive (SPE) is

designated as the debarring official (Department Debarring Officer)

pursuant to the Secretary's delegations of authority in 7 CFR 2.24.

However, for contracts awarded under the School Lunch and Surplus

Removal Programs (42 U.S.C. 1755 and 7 U.S.C. 612c), the Department

Debarring Officer has delegated debarring authority to the Agricultural

Marketing Service (AMS).

409.404 List of parties excluded from Federal procurement and

nonprocurement programs.

The Department Debarring Officer is USDA's single point of contact

with GSA for debarment and suspension actions taken under this subpart.

The debarring official for AMS shall notify the Department Debarring

Officer of each debarment and suspension action by promptly submitting

a copy of the debarment or suspension notice and any later changes to

the debarment or suspension status. The Department Debarring Officer

will forward a copy of each notice to GSA for inclusion in the

Government-wide list.

[[Page 53654]]

409.405 Effect of listing.

Compelling reasons are considered to be present where failure to

contract with the debarred or suspended contractor would seriously harm

the agency's programs and prevent accomplishment of mission

requirements. The SPE is authorized to make the determinations under

FAR 9.405. Requests for such determinations shall be submitted through

the head of the contracting activity (HCA) to the SPE.

409.405-1 Continuation of current contracts.

The HCA is authorized to make the determinations under FAR 9.405-1.

409.405-2 Restrictions on subcontracting.

The HCA is authorized to approve subcontracts with debarred or

suspended subcontractors under FAR 9.405-2.

409.406 Debarment.

409.406-3 Procedures.

(a) Investigation and referral. When a contracting officer becomes

aware of possible irregularities or any information which may be

sufficient cause for debarment, the case shall be immediately referred

through the HCA to the debarring official. The case must be accompanied

by a complete statement of the facts (including a copy of any criminal

indictments, if applicable) along with a recommendation for action.

Where the statement of facts indicates the irregularities to be

possible criminal offenses, or for any other reason further

investigation is considered necessary, the matter shall be referred to

the HCA who should consult with the Office of Inspector General to

determine if further investigation is required prior to referring to

the debarring official.

(b) Decision-making process. If, after reviewing the

recommendations and consulting with the Office of Inspector General and

Office of the General Counsel, as appropriate, the debarring official

determines debarment is justified, the debarring official shall

initiate the proposed debarment in accordance with FAR 9.406-3(c) and

notify the HCA of the action taken.

(c) Fact-finding proceeding. For actions listed under FAR 9.406-

3(b)(2), the contractor shall be given the opportunity to appear at an

informal hearing. The hearing should be held at a location and time

that is convenient to the parties concerned, if at all possible. The

contractor and any specifically named affiliates may be represented by

counsel or any duly authorized representative. Witnesses may be called

by either party. The proceedings shall be conducted expeditiously and

in such a manner that each party will have an opportunity to present

all information considered pertinent to the proposed debarment. The

contractor shall be provided a copy of a transcript of the proceedings

under the conditions established in FAR 9.406-3(b)(2)(ii).

409.407 Suspension.

409.407-3 Procedures.

(a) Investigation and referral. When a contracting officer becomes

aware of possible irregularities or any information which may be

sufficient cause for suspension, the case shall be immediately referred

through the HCA to the debarring official. The case must be accompanied

by a complete statement of the facts along with a recommendation for

action. Where the statement of facts indicates the irregularities to be

possible criminal offenses, or for any other reason further

investigation is considered necessary, the matter shall be referred to

the HCA who should consult with the Office of Inspector General to

determine if further investigation is required prior to referring it to

the debarring official.

(b) Decision-making process. If, after reviewing the

recommendations and consulting with the Office of Inspector General and

Office of the General Counsel, as appropriate, the debarring official

determines suspension is justified, the debarring official shall

initiate the proposed suspension in accordance with FAR 9.407-3(c) and

notify the HCA of the action taken.

(c) Fact-finding proceedings. For actions listed under FAR 9.407-

3(b)(2), the contractor shall be given the opportunity to appear at an

informal hearing, similar in nature to the hearing for debarments as

discussed in 409.406-3(c).

409.470 Appeals.

A debarred or suspended contractor may appeal the debarring

official's decision by mailing or otherwise furnishing a written notice

within 90 days from the date of the decision to the U.S. Department of

Agriculture Board of Contract Appeals, Washington, D.C. 20250. A copy

of the notice of appeal shall be furnished to the debarring officer

from whose decision the appeal is taken. Appeals under subpart 409.4

shall be governed by the rules and procedures of the U.S. Department of

Agriculture Board of Contract Appeals set forth in 7 CFR part 24.

Subpart 409.5--Organizational and Consultant Conflicts of Interest

409.503 Waiver.

(a) The HCA, on a non-delegable basis, is authorized to waive any

general rule or procedure in FAR 9.5 when in the Government's interest.

(b) Each request for waiver shall include:

(1) The general rule or procedure proposed to be waived;

(2) An analysis of the potential conflict, including the benefits

and detriments to the Government and prospective contractors;

(3) A discussion of why the conflict cannot be avoided,

neutralized, or mitigated; and

(4) Advice of counsel obtained under FAR 9.504(b).

PART 411--DESCRIBING AGENCY NEEDS

Subpart 411.1--Selecting and Developing Requirements Documents

Sec.

411.103 Market acceptance.

411.105 Purchase descriptions for service contracts.

411.170 Brand name or equal.

411.171 Solicitation provisions and contract clauses.

Subpart 411.2--Using and Maintaining Requirements Documents

411.202 Maintenance of standardization documents.

Subpart 411.4--Delivery or Performance Schedules

411.404 Contract clauses.

Subpart 411.6--Priorities and Allocations

411.600 Scope of subpart.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 411.1--Selecting and Developing Requirements Documents

411.103 Market acceptance.

(a) The head of the contracting activity (HCA) may determine that

offerors must demonstrate, in accordance with FAR 11.103(a), the market

acceptability of their items to be offered.

(b) The contracting officer shall place a copy of this

determination, signed by the HCA, in the solicitation file.

411.105 Purchase descriptions for service contracts.

When contract personnel are to be used, the requiring official

shall record on the requisition his or her determination whether harm

to the Government might occur should contractor personnel fail to

identify themselves as non-Government officials.

[[Page 53655]]

411.170 Brand name or equal.

(a) A ``brand name or equal'' purchase description shall include

the following type of information:

(i) Identification of the item by generic description.

(ii) Make, model number, catalog designation, or other description,

and identification of a commercial catalog where it is listed.

(iii) Name of manufacturer, producer, or distributor of the item

and complete address.

(iv) All salient characteristics of the ``brand name or equal''

product or products which have been determined by the requisitioner to

be essential to the Government's minimum requirements.

411.171 Solicitation provisions and contract clauses.

(a) Contracting officers shall insert the provision at 452.211-1,

Brand Name or Equal, in solicitations, other than those for

construction, where ``brand name or equal'' purchase descriptions are

used.

(b) Contracting officers shall insert the clause at 452.211-2,

Equal Products Offered, in solicitations, other than those for

construction, where the provision at 452.211-1 is included.

(c) Contracting officers shall insert the clause at 452.211-3,

Statement of Work/Specifications, when the description (statement of

work) or specification(s) is included in Section J of the solicitation.

(d) Contracting officers shall insert the clause at 452.211-4,

Attachment to Statement of Work/Specifications, when there are

attachments to the description (statement of work) or specifications.

Subpart 411.2--Using and Maintaining Requirements Documents

411.202 Maintenance of standardization documents.

Recommendations for changes to standardization documents are to be

submitted through the Senior Procurement Executive, who will coordinate

the submission of these recommendations to the cognizant preparing

activity.

Subpart 411.4--Delivery or Performance Schedules

411.404 Contract clauses.

(a) The contracting officer shall insert the clause at 452.211-5,

Period of Performance, when it is necessary to specify a period of

performance, beginning on the date of award, date of receipt of notice

of award, or a specified date.

(b) The contracting officer shall insert the clause at 452.211-6,

Effective Period of the Contract, when it is necessary to specify the

effective period of the contract.

Subpart 411.6--Priorities and Allocations

411.600 Scope of subpart.

The Defense Priorities and Allocation System (DPAS) excludes USDA

activities (see 15 CFR 700.18(b)). USDA Contracting Officers are not

authorized to place rated orders under DPAS.

Part 412--ACQUISITION OF COMMERCIAL ITEMS

Subpart 412.3--Solicitation Provisions and Contract Clauses for the

Acquisition of Commercial Items

Sec.

412.302 Tailoring of provisions and clauses for the acquisition of

commercial items.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 412.3--Solicitation Provisions and Contract Clauses for the

Acquisition of Commercial Items

412.302 Tailoring of provisions and clauses for the acquisition of

commercial items.

The head of the contracting activity is authorized to approve

waivers in accordance with FAR 12.302(c). The approved waiver may be

either for an individual contract or for a class of contracts for the

specific item. The approved waiver and supporting documentation shall

be incorporated into the contract file.

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

PART 413--SIMPLIFIED ACQUISITION PROCEDURES

Subpart 413.1--General

Sec.

413.103 Policy.

Subpart 413.4--Imprest Fund

413.401 General.

Subpart 413.5--Purchase Orders

413.505 Purchase order and related forms.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 413.1--General

413.103 Policy.

USDA policy and procedures on use of the Governmentwide commercial

purchase card are established in Departmental Regulation Series 5000.

Subpart 413.4--Imprest Fund

413.401 General.

Departmental Regulation 2000 series sets policies and guidelines

for the use of imprest funds within USDA. Departmental Regulation 5000

series establishes policies and procedures for the use of the Third

Party Draft System in USDA.

Subpart 413.5--Purchase Orders

413.505 Purchase order and related forms.

(a) Form AD-838, Purchase Order, is prescribed for use by USDA in

lieu of Optional Forms 347 and 348.

(b) The Standard Form 44 (and the previously prescribed USDA Form

AD-744) is not authorized for use within USDA.

PART 414--SEALED BIDDING

Subpart 414.2--Solicitation of Bids

Sec.

414.201 Preparation of invitations for bids.

414.201-6 Solicitation provision.

Subpart 414.4--Opening of bids and Award of Contract

414.404 Rejection of bids.

414.404-1 Cancellation of invitations after opening.

414.407 Mistakes in bids.

414.407-3 Other mistakes disclosed before award.

414.407-4 Mistakes after award.

414.409 Information to bidders.

414.409-2 Award of classified contracts.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 414.2--Solicitation of Bids

414.201 Preparation of invitations for bids.

414.201-6 Solicitation provisions.

The contracting officer shall insert the provision 452.214-70,

Award by Lot, when multiple items are segregated into clearly

identifiable lots and the contracting officer wants to reserve the

right to award by item within a lot, if award in that manner would be

advantageous to the Government.

Subpart 414.4--Opening of Bids and Award of Contract

414.404 Rejection of bids.

414.404-1 Cancellation of invitations after opening.

An acquisition official at a level above the contracting officer is

authorized to make the determinations under FAR 14.404-1(c) and (e)(1).

414.407 Mistakes in bids.

414.407-3 Other mistakes disclosed before award.

The authority to make the determinations under FAR 14.407-3(a),

(b), and (d) is delegated, without power of redelegation, to the head

of the contracting activity. The authority to

[[Page 53656]]

make the determination under FAR 14.407-3(c) is delegated to the

contracting officer. Each determination pursuant to FAR 14.407-3 shall

have the concurrence of the Office of the General Counsel (OGC).

414.407-4 Mistakes after award.

If a mistake in bid is disclosed after award, the contracting

officer shall make a final determination in accordance with the

provisions of FAR 14.407-4 (b) and (c) and shall coordinate each

proposed determination with OGC. Such coordination shall, at a minimum,

consist of the contracting officer providing the proposed determination

and the case file to OGC for comment.

414.409 Information to bidders.

414.409-2 Award of classified contracts.

Disposition of classified information shall be in accordance with

Departmental Regulation and Manual (3400 Series) and in accordance with

direction issued by the USDA Security Officer, Policy Analysis and

Coordination Center--Human Resources Management.

PART 415--CONTRACTING BY NEGOTIATION

Subpart 415.1--General Requirements for Negotiation

Sec.

415.103 Converting from sealed bidding to negotiation procedures.

Subpart 415.4--Solicitation and Receipt of Proposals and Quotations

415.406 Preparing requests for proposals (RFP's) and requests for

quotations (RFQ's).

415.406-1 Uniform contract format.

415.407 Solicitation provisions.

415.408 Issuing solicitations.

415.411 Receipt of proposals and quotations.

415.413 Disclosure and use of information before award.

415.413-2 Alternate II.

Subpart 415.5--Unsolicited Proposals

415.504 Advance guidance.

415.506 Agency procedures.

Subpart 415.6--Source Selection

415.607 Disclosure of mistakes before award.

415.608 Proposal evaluation.

415.612 Formal source selection.

Subpart 415.9--Profit

415.902 Policy.

Subpart 415.10--Preaward, Award, and Postaward Notifications, Protests

and Mistakes

415.1070 Post-award conference.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

=======================================================================

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

Subpart 415.1--General Requirements for Negotiation

415.103 Converting from sealed bidding to negotiation procedures.

An acquisition official at a level above the contracting officer is

authorized to make the determination to permit the use of negotiation

to complete an acquisition following the cancellation of an invitation

for bids.

Subpart 415.4--Solicitation and Receipt of Proposals and Quotations

415.406 Preparing requests for proposals (RFP's) and requests for

quotations (RFQ's).

415.406-1 Uniform contract format.

The Senior Procurement Executive is authorized to exempt contracts

from the uniform contract format.

415.407 Solicitation provisions.

(a) The provision at 452.215-71, Instructions for the Preparation

of Technical and Business Proposals, may be used when offerors will be

required to submit technical and business proposals. Contracting

officers should tailor the clause to reflect the degree of information

required for the specific acquisition.

(b) The contracting officer shall insert the provision at 452.215-

72, Amendments to Proposals, in solicitations which require the

submittal of lengthy, complex technical proposals.

415.408 Issuing solicitations.

Departmental Regulation and Manual (Series 3400), establishes

policy and procedures regarding classification, declassification and

safeguarding of classified information.

415.411 Receipt of proposals and quotations.

Departmental Regulation and Manual (Series 3400), contains guidance

on classification, declassification and safeguarding of classified

information.

415.413 Disclosure and use of information before award.

Contracting officers shall use the Alternate II procedures in FAR

15.413-2 and subsection 415.413-2 when releasing proposals outside the

Government for evaluation purposes.

415.413-2 Alternate II.

(a) The head of the contracting activity (HCA) is authorized to

approve the release of proposals outside the Government for evaluation

purposes. Each such decision shall be supported by a written

justification that shows in sufficient detail the special needs or

circumstances requiring the services of individuals outside the

Government.

(b) During the preaward period, only the contracting officer, the

chief of the contracting office, or others specifically authorized by

either of them may communicate technical or other information to, or

conduct discussions with, offerors. Information shall not be furnished

to an offeror if, alone or together with other information, it may

afford the offeror an advantage over other offerors. However, general

information that is not prejudicial to other offerors may be furnished.

(c) Agency personnel and non-Government evaluators having

authorized access to information contained in proposals shall disclose

neither the number of offerors nor their identity to the public or to

anyone in Government except as authorized in accordance with FAR 3.104

(See also FAR 5.403).

(d) The contracting officer shall obtain the following written

agreement from the non-Government evaluator prior to the release of any

proposal to that evaluator.

``AGREEMENT GOVERNING THE USE AND DISCLOSURE OF PROPOSALS''

RFP#-------------------------------------------------------------------

Offeror----------------------------------------------------------------

1. To the best of my knowledge and belief, no conflict of

interest exists that may diminish my capacity to perform an

impartial and objective review of the offeror's proposal, or may

otherwise result in a biased opinion or an unfair advantage. If a

potential conflict of interest arises or if I identify such a

conflict, I agree to notify the Government promptly concerning the

potential conflict. In determining whether any potential conflict of

interest exists, I agree to review whether me or my employer's

relationships with other persons or entities, including, but not

limited to, ownership of stocks, bonds, other outstanding financial

interests or commitments, employment arrangements (past, present, or

under consideration), and, to the extent known by me, all financial

interests and employment arrangements of my spouse, minor children,

and other members of my immediate household, may place me in a

position of conflict, real or apparent, with the evaluation

proceedings.

2. I agree to use proposal information only for evaluation

purposes. I understand that any authorized restriction on disclosure

placed upon the proposal by the prospective contractor or

subcontractor or by the Government shall be applied to any

reproduction or abstracted information of the proposal. I agree to

use my best effort to safeguard such information physically, and not

to disclose the contents of, or release any information relating to,

the proposal(s) to anyone outside of the Source Evaluation Board or

other panel assembled for this acquisition, the Contracting Officer,

or other individuals designated by the Contracting Officer.

[[Page 53657]]

3. I agree to return to the Government all copies of proposals,

as well as any abstracts, upon completion of the evaluation.

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

(Name and Organization)

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

(Date)

(End of provision)

(e) The release of a proposal outside the Government for evaluation

does not constitute the release of information for purposes of the

Freedom of Information Act (5 U.S.C. 552).

(f) The contracting officer shall attach a cover page bearing the

GOVERNMENT NOTICE FOR HANDLING PROPOSALS, as set forth in FAR 15.413-

2(e), to each proposal upon receipt. The last sentence of the notice

shall cite 48 CFR 415.413 as the agency implementing regulation.

Subpart 415.5--Unsolicited Proposals

415.504 Advance guidance.

HCA's are responsible for establishing procedures to ensure

compliance with the requirements of FAR 15.504.

415.506 Agency procedures.

HCA's are responsible for establishing the procedures for control

of unsolicited proposals required by FAR 15.506(a) and for identifying

the contact points as required by FAR 15.506(b).

Subpart 415.6--Source Selection

415.607 Disclosure of mistakes before award.

The HCA with the concurrence of the Office of the General Counsel

is authorized to make the determination permitting proposal correction

as required by FAR 15.607(c)(3).

415.608 Proposal evaluation.

An acquisition official above the level of the contracting officer

is authorized to make the determination to reject all proposals under

the circumstances listed in FAR 15.608(b).

415.612 Formal source selection.

The HCA shall determine when a formal source selection process will

be used and establish procedures for implementing the requirements of

FAR 15.612.

Subpart 415.9--Profit

415.902 Policy.

(a)(1) USDA will use a structured approach to determine the profit

or fee prenegotiation objective in acquisition actions when price

negotiation is based on cost analysis.

(2) The following types of acquisitions are exempt from the

requirements of the structured approach, but the contracting officer

shall comply with FAR 15.905-1 when analyzing profit for these

contracts or actions:

(i) Architect-engineer contracts;

(ii) Construction contracts;

(iii) Contracts primarily requiring delivery of material supplied

by subcontractors;

(iv) Termination settlements; and

(v) Cost-plus-award-fee contracts;

(b) Unless otherwise restricted by contracting activity procedures,

the Contracting Officer may use another Federal agency's structured

approach if that approach has been formalized and is maintained as part

of that Agency's acquisition regulations (i.e., included in that

Agency's assigned chapter of Title 48 of the Code of Federal

Regulations).

(c) The HCA is responsible for establishing procedures to ensure

compliance with this subpart.

Subpart 415.10--Preaward, Award, and Postaward Notifications,

Protests and Mistakes

415.1070 Post-Award Conference.

If a postaward conference is necessary, the contracting officer

shall insert clause 452.215-73, Post-Award Conference.

PART 416--TYPES OF CONTRACTS

Sec.

416.000 Scope of part.

Subpart 416.2--Fixed-Price Contracts

416.203 Fixed-price contracts with economic price adjustment.

416.203-4 Contract clauses.

Subpart 416.4--Incentive Contracts

416.404 Cost-reimbursement incentive contracts.

416.404-2 Cost-plus-award-fee contracts.

416.405 Contract clauses.

416.470 Solicitation provision.

Subpart 416.5--Indefinite-Delivery Contracts

416.505 Ordering.

416.506 Solicitation provision and contract clauses.

Subpart 416.6--Time-and-Materials, Labor-Hour, and Letter Contracts

416.603 Letter contracts.

416.603-2 Application.

416.603-4 Contract clauses.

416.670 Contract clauses.

Subpart 416.7--Agreements

416.702 Basic agreements.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

416.000 Scope of part.

Heads of contracting activities (HCA's) are authorized to establish

written procedures allowing the use of any contract type described in

FAR part 16 for acquisitions made under simplified acquisition

procedures in FAR part 13.

Subpart 416.2--Fixed-Price Contracts

416.203 Fixed-price contracts with economic price adjustment.

416.203-4 Contract clauses.

An economic price adjustment clause based on cost indexes of labor

or material may be used under the conditions listed in FAR 16.203-4(d)

after approval by the HCA and consultation with the Office of the

General Counsel.

Subpart 416.4--Incentive Contracts

416.404 Cost-reimbursement incentive contracts.

416.404-2 Cost-plus-award-fee contracts.

The HCA may designate an acquisition official other than the

contracting officer as the fee determination official (FDO) to make the

final determination of the award fee. The designated official must have

warranted contracting authority at the same level as the contracting

officer or higher, and shall not have participated in preparing the

contractor performance evaluation. If the HCA does not designate an

FDO, the chief of the contracting office shall act as the FDO.

416.405 Contract clauses.

The contracting officer shall insert a clause substantially the

same as the clause at 452.216-70, Award Fee, in solicitations and

contracts which contemplate the award of cost-plus-award-fee contracts.

416.470 Solicitation provision.

The contracting officer shall insert the provision at 452.216-71,

Base Fee and Award Fee Proposal, in solicitations which contemplate the

award of a cost-plus-award-fee contract.

Subpart 416.5--Indefinite-Delivery Contracts

416.505 Ordering.

(a) The Chief, Procurement Policy Division, Procurement and

Property Management, Policy Analysis and Coordination Center, has been

designated as the Departmental Task Order Ombudsman.

(b) The Departmental Task Order Ombudsman shall designate a task

order ombudsman for each contracting activity. Contracting activity

ombudsmen shall review and resolve complaints from contractors

concerning task or delivery orders placed by the contracting activity.

(c) Any contractor who is not satisfied with the resolution of a

complaint by a

[[Page 53658]]

contracting activity ombudsman may request the Departmental Task Order

Ombudsman to review the complaint.

416.506 Solicitation provision and contract clauses.

(a) The contracting officer shall insert a provision substantially

the same as the provision at 452.216-72, Evaluation Quantities-

Indefinite-Delivery Contract, in solicitations which contemplate the

award of indefinite-quantity or requirements contracts to establish the

basis on which offers will be evaluated.

(b) The contracting officer shall insert the clause at 452.216-73,

Minimum and Maximum Contract Amounts, in indefinite-delivery,

indefinite-quantity contracts when the clause at FAR 52.216-18 is used.

Subpart 416.6--Time-and-Materials, Labor-Hour, and Letter Contracts

416.603 Letter contracts.

416.603-2 Application.

The HCA is authorized to extend the period for defining a letter

contract required by FAR 16.603-2(c) in extreme cases where it is

determined in writing that such action is in the best interest of the

Government.

416.603-4 Contract clauses.

The contracting officer shall insert the clause at 452.216-75,

Letter Contract, in a definitive contract superseding a letter

contract.

416.670 Contract clauses.

The contracting officer shall limit the Government's obligation

under a time-and-materials or labor-hour contract by inserting the

clause at 452.216-74, Ceiling Price.

Subpart 416.7--Agreements

416.702 Basic agreements.

Promptly after execution by the Government, the HCA shall furnish

to the Senior Procurement Executive a copy of each basic agreement

negotiated with contractors in accordance with FAR 16.702.

PART 417--SPECIAL CONTRACTING METHODS

Subpart 417.2--Options

Sec.

417.204 Contracts.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 417.2--Options

417.204 Contracts.

The head of the contracting activity is authorized to approve

contracts which exceed the 5 year limitation in FAR 17.204(e).

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

PART 419--SMALL BUSINESS PROGRAMS

Subpart 419.2--Policies

Sec.

419.201 General policy.

419.201-70 Office of Small and Disadvantaged Business Utilization

(OSDBU).

419.201-71 Small business coordinators.

419.201-73 Reports.

Subpart 419.5--Set-Asides for Small Business

419.508 Solicitation provisions.

Subpart 419.6--Certificates of Competency and Determinations of

Eligibility

419.602 Procedures.

419.602-1 Referral.

419.602-3 Resolving differences between the agency and the Small

Business Administration.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 419.2--Policies

419.201 General policy.

It is the policy of USDA to provide a fair portion of its

contracting and subcontracting opportunities to small, disadvantaged,

minority, and women-owned businesses.

419.201-70 Office of Small and Disadvantaged Business Utilization

(OSDBU).

The Office of Small and Disadvantaged Business Utilization (OSDBU)

develops rules, policy, procedures and guidelines for the effective

administration of USDA's small and disadvantaged business procurement

preference program to include minority and women-owned business.

419.201-71 Small business coordinators.

The head of the contracting activity (HCA) or a representative of

the HCA shall designate in writing a small business coordinator in each

contracting office. Supervisors of small business coordinators are

encouraged to provide sufficient time for the coordinators to carry out

their small business program duties. Coordinators' duties shall

include, but not be limited to, the following:

(a) Review each proposed acquisition expected to exceed the

simplified acquisition threshold prior to its solicitation. The

coordinator shall:

(1) Recommend section 8(a) action and identify potential

contractors, or

(2) Identify available minority and women-owned businesses to be

solicited by competitive procedures. Coordinators shall document the

contract file with recommendations made and actions taken.

(b) Participate in goal-setting procedures and planning activities

and establish aggressive minority and women-owned business goals based

on the annual review of advance acquisition plans.

(c) Participate in the review of those contracts which require the

successful offeror to submit written plans for the utilization of small

and small disadvantaged businesses as subcontractors.

(d) Ensure that purchases exceeding $2,500 and not exceeding the

simplified acquisition threshold are reserved exclusively for small

businesses, including minority and women-owned businesses. This policy

shall be implemented unless the contracting officer is unable to obtain

offers from two or more small business concerns that are competitive

with market prices and in terms of quality and delivery of the goods or

services being purchased.

(e) Maintain comprehensive source listings of small businesses.

(f) Upon written request, provide small, minority and women-owned

businesses the bidders mailing lists of individuals receiving

solicitations which will contain the subcontracting clause entitled

``Utilization of Small Business Concerns and Small Disadvantaged

Business Concerns.'' These lists may be limited to those supplies or

services of major interest to the requesting firms.

(g) Develop a program of contacts with local, small, minority, and

women-owned trade, business, and professional associations and

organizations and Indian tribal councils to apprise them of USDA's

program needs and recurring contract requirements.

(h) Periodically meet with program managers to discuss requirements

of the small business preference program, explore the feasibility of

breaking large complex requirements into smaller lots suitable for

participation by small firms, and encourage program managers to meet

with these firms so that their capabilities can be demonstrated.

(i) Establish internal operating procedures which implement the

requirements of the regulations as set forth in this part 419. Compile

data and prepare all reports pertaining to the small, minority and

women-owned business activities. Ensure that these reports are

accurate, complete and up-to-date.

[[Page 53659]]

(j) Assist and counsel small business firms and especially those

found to be nonresponsive or nonresponsible to help qualify them for

future awards.

(k) Review proposed large contract requirements to determine the

potential for breaking out components suitable for purchase from small

business firms.

(l) Ensure that the SBA Resident Procurement Center Representative

(PCR) is provided an opportunity and reasonable time to review any

solicitation that meets the dollar threshold for small business and

small disadvantaged business subcontracting plans.

419.201-73 Reports.

(a) The Director, OSDBU, shall be responsible for submitting

reports concerning USDA's progress and achievements in the procurement

preference program.

(b) Subcontracting data for an agency shall be collected by the

small business coordinators and submitted to OSDBU by April 10 and

November 20 of each year.

Subpart 419.5--Set-asides for Small Business

419.508 Solicitation provisions.

The contracting officer shall insert the provision at 452.219-70,

Size Standard and SIC Code Information, in solicitations that are set

aside for small businesses.

Subpart 419.6--Certificates of Competency and Determinations of

Eligibility

419.602 Procedures.

419.602-1 Referral.

Contracting officers shall refer determinations of non-

responsibility regarding small businesses directly to the SBA Regional

Office servicing the location where the contractor's office (home) is

located.

419.602-3 Resolving differences between the agency and the Small

Business Administration.

The HCA is authorized to file the formal appeal with the Small

Business Administration's Central Office as provided by FAR 19.602-

3(c).

PART 422--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Subpart 422.1--Basic Labor Policies

Sec.

422.103 Overtime.

422.103-4 Approvals.

Subpart 422.3--Contract Work Hours and Safety Standards Act

422.302 Liquidated damages and overtime pay.

Subpart 422.4--Labor Standards for Contracts Involving Construction

422.404 Davis-Bacon wage determinations.

422.404-6 Modifications of wage determinations.

422.406 Administration and enforcement.

422.406-8 Investigations.

Subpart 422.6--Walsh-Healey Public Contracts Act

422.604 Exemptions.

422.604-2 Regulatory exemptions.

422.608 Procedures.

422.608-4 Award pending final determination.

Subpart 422.8--Equal Employment Opportunity

422.803 Responsibilities.

422.804 Affirmative action programs.

422.804-2 Construction.

422.807 Exemptions.

Subpart 422.13--Special Disabled and Vietnam Era Veterans

422.1303 Waivers.

422.1306 Complaint procedures.

Subpart 422.14--Employment of the Handicapped

422.1403 Waivers.

422.1406 Complaint procedures.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 422.1--Basic Labor Policies

422.103 Overtime.

422.103-4 Approvals.

Requests for the use of overtime shall be approved by an

acquisition official at a level above the contracting officer in

accordance with the procedures in FAR 22.103-4 (a) and (b).

Subpart 422.3--Contract Work Hours and Safety Standards Act

422.302 Liquidated damages and overtime pay.

Heads of contracting activities (HCA's) are authorized to review

determinations of liquidated damages due under section 104(c) of the

Contract Work Hours and Safety Standards Act, and to take remedial

action, if appropriate, in accordance with FAR 22.302(c). Contractors

or subcontractors may request review of administrative determinations

of liquidated damages by written notice to the contracting officer. The

contracting officer shall promptly forward appeals of liquidated

damages determinations to the HCA.

Subpart 422.4--Labor Standards for Contracts Involving Construction

422.404 Davis-Bacon Act wage determinations.

422.404-6 Modifications of wage determinations.

HCA's are authorized to request extension of the 90 day period for

award after bid opening as provided in FAR 22.404-6(b)(6).

422.406 Administration and enforcement.

422.406.8 Investigations.

Reports of violations shall be forwarded to the HCA, who shall

process such reports in accordance with FAR 22.406-8(d).

Subpart 422.6--Walsh-Healey Public Contracts Act

422.604 Exemptions.

422.604-2 Regulatory exemptions.

The Assistant Secretary for Administration can request the

Secretary of labor to exempt contracts from the Walsh-Healey Public

Contracts Act pursuant to FAR 22.604-2(c). A written finding justifying

the request for exemption shall be prepared for the Assistant

Secretary's signature and submitted by the HCA to the Senior

Procurement Executive (SPE) for referral to the Assistant Secretary.

422.608 Procedures.

422.608-4 Award pending final determination.

The HCA is delegated authority to approve the contracting officer's

certification for award required by FAR 22.608-4.

Subpart 422.8--Equal Employment Opportunity

422.803 Responsibilities.

The contracting office shall submit questions involving the

applicability of Executive Order 11246 and FAR subpart 22.8 through the

HCA to the SPE for resolution.

422.804 Affirmative action programs.

422.804-2 Construction.

The HCA shall ensure that each contracting office, awarding

nonexempt construction contracts, maintains a current listing of

covered geographical areas subject to affirmative action requirements

specifying goals for minorities and women in covered construction

trades.

422.807 Exemptions.

(a) The Assistant Secretary for Administration is authorized to

make

[[Page 53660]]

the determination in FAR 22.807(a)(1) that a contract is essential to

the national security.

(b) The contracting officer shall submit requests for exemptions

under FAR 22.807(a)(1), (a)(2), and (b)(5) through the HCA to the SPE

for determination by the Assistant Secretary of Administration or

referral to the Director, Office of Federal Contract Compliance

Programs (OFCCP), as appropriate.

Subpart 422.13--Special Disabled and Vietnam Era Veterans

422.1303 Waivers.

(a) The Assistant Secretary for Administration is authorized to

make the waiver determinations under FAR 22.1303(a) and FAR 22.1303(b)

with concurrence of the Director, OFCCP.

(b) The contracting office shall submit requests for waivers

through the HCA to the SPE for determination by the Assistant Secretary

for Administration.

422.1306 Complaint procedures.

The contracting officer shall forward complaints received about the

administration of the Vietnam Era Veterans Readjustment Assistance Act

directly to the Department of Labor (DoL) as prescribed in FAR 22.1306.

Subpart 422.14--Employment of the Handicapped

422.1403 Waivers.

(a) The Assistant Secretary for Administration is authorized to

make the waiver determinations under FAR 22.1403(a) and (b) with

concurrence of the Director, OFCCP.

(b) The contracting officer shall submit requests for waivers

through the HCA to the SPE for determination by the Assistant Secretary

for Administration.

422.1406 Complaint procedures.

The contracting officer shall forward complaints received about the

administration of Section 503 of the Rehabilitation Act of 1973, as

amended, directly to the OFCCP as prescribed in FAR 22.1406.

PART 423--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-

FREE WORKPLACE

Subpart 423.1--Pollution Control and Clean Air and Water

Sec.

423.101 Applicability.

423.103 Policy.

423.104 Exemptions.

423.106 Delaying award.

423.107 Compliance responsibilities.

Subpart 423.2--Energy Conservation

423.203 Policy.

Subpart 423.4--Use of Recovered Materials

423.400 Scope of subpart.

423.402 Definitions.

423.404 Procedures.

423.404-70 Acquisition, Recycling, and Waste Prevention Program

(AR&WPP).

Subpart 423.5--Drug-Free Workplace

423.506 Suspension of payments, termination of contract, and

debarment and suspension actions.

Subpart 423.6--Notice of Radioactive Material

423.601 Requirements.

Subpart 423.7--Contracting for Environmentally Preferable and Energy-

Efficient Products and Services

423.704 Policy.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 423.1--Pollution Control and Clean Air and Water

423.101 Applicability.

In addition to the requirement in FAR 23.101, this subpart applies

to indefinite-delivery contracts, other than those for commercial

items, when the contracting officer estimates that the contract will

exceed $100.000.

423.103 Policy.

The head of the contracting activity (HCA) shall establish a system

of instructions to make available to each contracting officer the EPA

List of Violating Facilities and to ensure the contracting officer

reviews the list prior to each proposed award.

423.104 Exemptions.

(a) The Assistant Secretary for Administration is authorized to

grant an exemption described in FAR 23.104.

(b) The Senior Procurement Executive (SPE) is authorized to consult

with the EPA Administrator regarding a proposed class exemption.

423.106 Delaying award.

Prior to notifying EPA, the contracting officer shall advise the

SPE of the need to award before the requested time period expires.

423.107 Compliance responsibilities.

The HCA is authorized to notify the Administrator of EPA of known

or suspected noncompliance with clean air or water standards in

facilities used in performing nonexempt contracts. A copy of the

notification is to be provided to the SPE.

Subpart 423.2--Energy Conservation

423.203 Policy.

In the acquisition of products and services, USDA will give

preference to those that are more energy-efficient.

Subpart 423.4--Use of Recovered Materials

423.400 Scope of subpart.

This subpart implements and supplements FAR policies and procedures

for acquiring products and services when preference is given to offers

of products containing recovered materials. This subpart further

supplements FAR subpart 23.4 by providing guidance for recycling and

waste prevention programs in accordance with Executive Order 12873 and

42 U.S.C. 6962.

423.402 Definitions.

Mission areas are USDA organizational elements headed by an

Undersecretary or an Assistant Secretary.

USDA Acquisition, Recycling, and Waste Prevention Program, issued

by the USDA Environmental Executive, provides implementing guidance for

Departmental affirmative procurement, recycling, and waste reduction.

The USDA Environmental Executive is the Deputy Assistant Secretary

for Administration.

423.404 Procedures.

(a) The dollar thresholds described in FAR 23.404(a) apply to USDA

as a whole.

(b) EPA designated items. The officials identified as Acquisition,

Recycling, and Waste Prevention Program (AR&WPP) Coordinators are

authorized to approve determinations to buy EPA designated items which

do not meet EPA or USDA minimum recovered material content standards.

(c) Agency designated items. The USDA Environmental Executive may,

without further publication in this chapter, designate items or classes

of items containing recovered material to be acquired under the

procedures in FAR 23.4 and this subpart.

423.404-70 Acquisition, Recycling, and Waste Prevention Program

(AR&WPP).

(a) Applicability. The AR&WPP applies to all USDA organizations;

i.e., USDA mission areas, USDA corporations (as described in 31 U.S.C.

9101), and USDA staff offices not included within a mission area.

(b) Authority. The AR&WPP has been established to comply with the

requirements of Executive Order 12873 to coordinate all environmental

[[Page 53661]]

programs in the areas of procurement and acquisition, standards and

specification review, facilities management, waste prevention and

recycling, and logistics.

(c) Responsibilities. (1) Each USDA organization will identify one

or more AR&WPP Coordinators in writing to represent the mission area,

serve on the Council of Coordinators, and work in conjunction with the

USDA Environmental Executive.

(2) Each USDA organization periodically will conduct an audit

(survey or inventory) of the waste stream generated by the

organization. The goals of the audit are:

(i) To identify and measure the elements of waste generated in its

operations;

(ii) To identify processes, equipment, techniques, or materials

which generate waste in energy or materials;

(iii) To identify actions which can be taken to reduce and to

recycle or recover the wastes generated; and

(iv) To assign time frames to accomplish those actions.

(3) Each USDA organization will implement an avoidance or recovery

or recycling program based on the results of the waste stream audit.

(4) Each USDA organization will implement a plan to install on-

going waste prevention techniques.

(5) Each USDA organization will ensure that responsibility for

preparation, implementation, and monitoring of its affirmative

procurement program is shared between program personnel and procurement

personnel.

(6) Each USDA organization will establish measurable goals by which

the effectiveness of its participation in AR&WPP can be assessed on an

annual basis.

(7) Each USDA organization will sponsor annual awards to recognize

the most innovative environmental program of the year.

(d) Acquisition and administration. (1) Each USDA organization will

annually review its product descriptions to enhance the use of

recovered materials and environmentally preferable products and

services by eliminating from the product description:

(i) Any exclusion of recovered materials, and

(ii) Any requirement that items be manufactured from virgin

materials.

(2) Each USDA organization will create a promotion program to

internally and externally promote its desire to buy recycled products.

(3) Each USDA organization will implement the USDA electronic

acquisition system to reduce waste by eliminating unnecessary paper

transactions and to foster accurate data collection and reporting of

acquisitions.

(4) Each USDA organization will establish an affirmative

procurement program specifically for the needs and requirements of its

own organization, to maximize environmental benefits, consistent with

price, performance, and availability considerations.

(5) Each USDA organization will ensure that the on-going inspection

and production surveillance systems in place will monitor the

production or the testing of goods and services to verify the recovered

material contents reported.

(6) Each USDA organization will include

(i) Requirements in contracts for contractor operation of

Government-owned or leased facilities to provide for waste prevention

activities and the recycling of materials and

(ii) Environmental and recycling factors in the selection process

for the acquisition and management of real property.

Subpart 423.5--Drug-Free Workplace

423.506 Suspension of payments, termination of contract, and debarment

and suspension actions.

(a) The contracting officer may recommend waiver of the

determination to suspend payments, to terminate a contract, or to debar

or to suspend a contractor.

(b) The recommendation shall be submitted through the HCA to the

SPE and shall include a full description of the disruption of USDA

operations should the determination not be waived.

(c) The SPE will submit the request for a waiver to the Secretary

with a recommendation for action.

Subpart 423.6--Notice of Radioactive Material

423.601 Requirements.

The HCA shall establish a system of instructions to identify the

installation/facility radiation protection officer.

Subpart 423.7--Contracting for Environmentally Preferable and

Energy-Efficient Products and Services

423.704 Policy.

In its acquisitions, USDA will give preference to environmentally

preferable and energy-efficient products and services.

PART 424--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

Subpart 424.1--Protection of Individual Privacy

Sec.

424.103 Procedures.

424.104 Contract clauses.

Subpart 424.2--Freedom of Information Act

424.202 Policy.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 424.1--Protection of Individual Privacy

424.103 Procedures.

USDA regulations implementing the Privacy Act are found in 7 CFR,

subtitle A, part 1, subpart G. Contracting officers shall follow these

regulations when responding to requests for information or awarding

contracts that will involve the design, development, or operation of a

system of records on individuals to accomplish agency functions.

424.104 Contract clauses.

When applicable, the contracting officer shall insert the clause at

452.224-70, Confidentiality of Information, in contracts involving

confidential information.

Subpart 424.2--Freedom of Information Act

424.202 Policy.

USDA regulations implementing the Freedom of Information Act are

found in 7 CFR, subtitle A, part 1, subpart A. Contracting officers

shall follow these regulations when responding to requests for

information or awarding contracts that will involve the design,

development, or operation of a system of records on individuals to

accomplish agency functions.

PART 425--FOREIGN ACQUISITION

Subpart 425.1--Buy American Act--Supplies

Sec.

425.102 Policy.

425.105 Evaluating offers.

425.108 Expected articles, materials and supplies.

Subpart 425.2--Buy American Act--Construction Materials

425.202 Policy.

425.203 Evaluating offers.

425.204 Violations.

Subpart 425.3--Balance of Payments Program

425.302 Policy.

425.304 Excess and near-excess foreign currencies.

[[Page 53662]]

Subpart 425.4--Trade Agreements

425.402 Policy.

Subpart 425.9--Additional Foreign Acquisition Clauses

425.901 Omission of audit clause.

Subpart 425.10--Implementation of Sanctions Against Countries That

Discriminate Against United States Products or Services in Government

Procurement

425.1002 Trade sanctions.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 425.1--Buy American Act--Supplies

425.102 Policy.

The Senior Procurement Executive (SPE) shall make the determination

prescribed in FAR 25.102(a)(3).

425.105 Evaluating offers.

The SPE shall make the determinations prescribed in FAR 25.105.

Requests for SPE approval shall be submitted by the HCA, in writing,

and shall provide a detailed justification supporting why the proposed

award is in the best interest of the Government.

425.108 Excepted articles, materials, and supplies.

(a) Copies of determinations of nonavailability in accordance with

FAR 25.102(a)(4) or 25.202(a)(3), for articles, material or supplies

not listed in FAR 25.108, shall be submitted to the SPE for submission

to the FAR Council.

(b) Information required by FAR 25.108(c) shall be submitted to the

SPE for submission to the FAR Council.

Subpart 425.2--Buy American Act--Construction Materials

425.202 Policy.

The SPE shall make the determination prescribed in FAR

25.202(a)(2).

425.203 Evaluating offers.

(a) The SPE may determine that the use of a particular domestic

construction material would be impracticable or would unreasonably

increase the cost of the contract.

(b) If a contracting officer proposes that the use of a particular

domestic construction material should be waived for a contract, the

contracting officer shall submit the proposed award and the information

prescribed in FAR 25.203(b) through the HCA to the SPE for approval or

disapproval.

425.204 Violations.

Contracting officers shall, in accordance with the debarment

procedures prescribed in 409.4, refer all violations of FAR clause

52.225-5, Buy American Act--Construction Material, to the Department

Debarring Officer for possible debarment action.

Subpart 425.3--Balance of Payments Program

425.302 Policy.

The HCA shall make the determinations prescribed in FAR

25.302(b)(2) and (3) and may authorize differentials greater than 50

percent as prescribed in FAR 25.302(c).

425.304 Excess and near-excess foreign currencies.

HCA's shall make the determinations as to the feasibility of using

excess or near-excess currency.

Subpart 425.4--Trade Agreements

425.402 Policy.

Whenever the U.S. Trade Representative publishes a redetermination

of the dollar threshold at which the Trade Agreements Act applies, that

dollar threshold will be published in a Departmental Notice, 5025

series.

Subpart 425.9--Additional Foreign Acquisition Clauses

425.901 Omission of audit clause.

The SPE shall make the determination under FAR 25.901(c)(1).

Subpart 425.10--Implementation of Sanctions Against Countries That

Discriminate Against United States Products or Services in

Government Procurement

425.1002 Trade sanctions.

The Secretary, without power of redelegation, has the authority to

make the necessary determination(s) and authorize award(s) of

contract(s) in accordance with FAR 25.1002(c).

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

PART 427--PATENTS, DATA AND COPYRIGHTS

Subpart 427.1--General

Sec.

427.104 General guidance.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 427.1--General

427.104 General guidance

As used in FAR part 27, the agency head or agency head designee is

the Senior Procurement Executive, except under FAR 27.306(a) and (b).

Under FAR 27.306(a) and (b), the agency head is the Secretary without

power of redelegation.

PART 428--BONDS AND INSURANCE

Subpart 428.1--Bonds

Sec.

428.101 Bid guarantees.

428.101-1 Policy on use.

428.106 Administration.

428.106-6 Furnishing information.

Subpart 428.2--Sureties

428.203 Acceptability of individual sureties.

428.204 Alternatives in lieu of corporate or individual sureties.

428.204-2 Certified or cashier's checks, bank drafts, money orders,

or currency.

Subpart 428.3--Insurance

428.307 Insurance under cost-reimbursement contracts.

428.307-1 Group insurance plans.

428.310 Contract clause for work on a Government installation.

428.370 Government-owned vehicles operated in foreign countries.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 428.1--Bonds

428.101 Bid guarantees.

428.101-1 Policy on use.

The Senior Procurement Executive may authorize class waivers of the

requirement to obtain bid guarantees.

428.106 Administration.

428.106-6 Furnishing information.

Heads of contracting activities (HCA's) or their designees may

furnish certified copies of bonds and the contracts for which they were

given as provided by FAR 28.106-6(c). Requesters may be required to pay

costs of certification and copying established by the Departmental Fee

Schedule for records requests (7 CFR part 1, subpart A, appendix A).

Subpart 428.2--Sureties

428.203 Acceptability of individual sureties.

Evidence of possible criminal or fraudulent activities by an

individual surety shall be reported to the Office of Inspector General

in accordance with Departmental Regulations (1700 series).

428.204 Alternatives in lieu of corporate or individual sureties.

HCA's shall establish procedures to ensure protection and

conveyance of deposited securities of the types listed in FAR 28.204-1

through 28.204-3.

[[Page 53663]]

428.204-2 Certified or cashier's checks, bank drafts, money orders, or

currency.

The contracting officer shall insert the provision at 452.228-70,

Alternative Forms of Security, in a solicitation if a bond is required.

Subpart 428.3--Insurance

428.307 Insurance under cost-reimbursement contracts.

428.307-1 Group insurance plans.

Under cost-reimbursement contracts, before buying insurance under a

group insurance plan, the contractor shall submit the plan to the

contracting officer for review. During review, the contracting officer

shall use all sources of information available, such as audits,

industry practice, or other sources of information, to determine

whether acceptance of the plan submitted would be in the Government's

best interest.

428.310 Contract clause for work on a Government installation.

The contracting officer shall insert the clause at 452.228-71,

Insurance Coverage, in solicitations and contracts which include the

clause at FAR 52.228-5, Insurance--Work on a Government Installation.

If property liability insurance is required, the contracting officer

shall use the clause with its Alternate I.

428.370 Government-owned vehicles operated in foreign countries.

USDA is authorized to obtain insurance to cover liability incurred

by any of its employees while acting within the scope of their

employment and operating a Government-owned vehicle in a foreign

country. (7 U.S.C. 2262).

PART 430---COST ACCOUNTING STANDARDS ADMINISTRATION

Sec.

430.070 Definitions.

Subpart 430.2---CAS Program Requirements

430.201 Contract requirements.

430.201-5 Waiver.

430.202 Disclosure requirements.

430.202-2 Impracticality of submission.

430.202-8 Subcontractor Disclosure Statements.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

430.070 Definitions.

ACO, as used in this part and in FAR part 30, means administrative

contracting officer as described in FAR part 42.

Subpart 430.2---CAS Program Requirements

430.201 Contract requirements.

430.201-5 Waiver.

The Senior Procurement Executive (SPE), without the authority to

further redelegate, is authorized to request the Cost Accounting

Standards Board to waive the application of the Cost Accounting

Standards (CAS). Contracting officers shall prepare waiver requests in

accordance with 48 CFR chapter 99 (Appendix B, FAR loose-leaf edition),

subsection 9903.201-5, and submit them to the SPE through the head of

the contracting activity (HCA).

430.202 Disclosure requirements.

430.202-2 Impracticality of submission.

(a) The Secretary, without the power to delegate, is authorized to

determine, in accordance with FAR part 99 (Appendix B), subsection

9903.202-2, that the Disclosure Statement is impractical to secure and

to authorize award without obtaining the Disclosure Statement.

(b) The request for this determination is to be prepared in

accordance with FAR part 99 (Appendix B), subsection 9903.202-2 and is

to contain the proposed report to the CASB.

(c) Requests for a determination under paragraph (a) of this

section shall be prepared by the contracting officer and submitted

through the HCA to the SPE for concurrence and submittal to the

Secretary.

430.202-8 Subcontractor Disclosure Statements.

(a) The Secretary, without the power to redelegate, is authorized

to determine that the Disclosure Statement for a subcontractor is

impractical to secure and to authorize award without obtaining the

Disclosure Statement.

(b) Requests for this determination are to be prepared and

forwarded as described in 430.202-2.

PART 431--CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 431.1--Applicability

Sec.

431.101 Objectives.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 431.1--Applicability

431.101 Objectives.

(a) The SPE is designated as the official authorized to give

advance approval of an individual deviation concerning cost principles.

(b) The SPE is designated as the official authorized to give

advance approval of a class deviation concerning cost principles after

coordination with the Civilian Agency Acquisition Council.

(c) Requests for advance approval of class deviations concerning

cost principles must be submitted to the SPE through the HCA.

PART 432--CONTRACT FINANCING

Sec.

432.001 Definitions.

432.003 Simplified acquisition procedures financing.

432.006 Reduction or suspension of contract payments upon finding

of fraud.

432.006-2 Definitions.

432.006-3 Responsibilities.

432.006-4 Procedures.

432.006-5 Reporting.

Subpart 432.1--Non-Commercial Item Purchase Financing

432.102 Description of contract financing methods.

432.103 Progress payments under construction contracts.

432.111 Contract clauses for non-commercial purchases.

432.113 Customary contract financing.

432.114 Unusual contract financing.

Subpart 432.2--Commercial Item Purchase Financing

432.202 General.

432.202-1 Policy.

432.202-4 Security for Government financing.

432.206 Solicitation provisions and contract clauses.

432.207 Administration and payment of commercial financing

payments.

Subpart 432.3--Loan Guarantees for Defense Production

432.301 Definitions.

Subpart 432.4--Advance Payments for Non-Commercial Items

432.402 General.

432.406 Letters of credit.

432.407 Interest.

432.412 Contract clause.

Subpart 432.6--Contract Debts

432.601 Definition.

432.616 Compromise actions.

Subpart 432.7--Contract Funding

432.703 Contract funding requirements.

432.703-3 Contracts crossing fiscal years.

432.770 USDA specific funding limitations.

Subpart 432.8--Assignment of Claims

432.802 Conditions.

432.803 Policies.

432.805 Procedure.

432.806 Contract clauses.

Subpart 432.9--Prompt Payment

432.905 Invoice payments.

432.906 Contract financing payments.

[[Page 53664]]

Subpart 432.10--Performance-Based Payments

432.1007 Administration and payment of performance-based payments.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

432.001 Definitions.

The agency contract finance office is the office, other than the

office of the requisitioner, providing funding or performing funding

record keeping for the contract action.

Responsible fiscal authority is that officer in the agency contract

finance office with the responsibility to ensure that adequate funds

are available and usable for the intended purpose.

432.003 Simplified acquisition procedures financing.

(a) The chief of the contracting office may approve contract

financing on a contract to be entered under the simplified acquisition

procedures. Class approvals may not be made.

(b) The signed approval must contain the supporting rationale for

the action and an estimate of the cost and/or risk to the government.

432.006 Reduction or suspension of contract payments upon finding of

fraud.

432.006-2 Definitions.

(a) The USDA remedy coordination official (RCO) is the Assistant

Secretary for Administration.

(b) For the purposes of this part, head of the agency means,

exclusively, the Secretary or the Deputy Secretary.

432.006-3 Responsibilities.

When a contracting officer suspects that a request for advance,

partial, or progress payment is based on fraud, the request shall be

referred directly to the Office of Inspector General (OIG) in

accordance with their instructions. A copy of the referral shall be

submitted through the head of the contracting activity (HCA) to the

Senior Procurement Executive (SPE).

432.006-4 Procedures.

(a) Immediately upon submittal of the referral described in

432.006-3, the HCA and the contracting officer shall confer with the

SPE and representatives of the OIG to discuss the potential for

reduction or suspension of further payments based on the considerations

listed in FAR 32.006-4(d) (1) through (5).

(b) The SPE will determine whether the contractor has contracts

with other Departments or contracting activities and will involve them,

as necessary, in the decision making process.

(c) The OIG will determine the need for and the extent of an

investigation.

(d) Immediately upon completion of the OIG investigation (or, if

deemed necessary by the OIG and the SPE, before completion of the

investigation) the SPE, in coordination with the HCA, the contracting

officer, and the OIG, shall make a report on the action to the RCO.

(e) Upon receipt of the report, the RCO will submit a

recommendation to the Secretary.

(f) Upon receipt of the RCO's report the Secretary will:

(1) Notify the contractor in writing, allowing 30 calendar days

after receipt of the notice, that the contractor may submit in writing

information and arguments in opposition to the recommendation; and

(2) Consider the RCO's recommendation, the SPE's report, the

response of the contractor, and any other relevant information in order

to make an appropriate final determination.

(g) This determination will be provided to the contractor and to

the SPE for distribution to the agencies involved and for appropriate

action under the determination.

(h) The determination and the supporting documentation will be

placed in the contract file(s) and a copy will be maintained by the

SPE.

(i) The contracting officer will advise the SPE of the actual date

of the reduction or suspension action.

(j) Not later than 150 calendar days after the actual date of the

reduction or suspension action, the SPE will prepare for the RCO a

review of the agency head's determination, and will propose a

recommendation from the RCO to the agency head as to whether the

reduction or suspension action should continue. The RCO will submit the

recommendation (including a recommendation for the time period of a

follow up review) to the agency head. This recommendation will be

considered by the Secretary and handled as a final action described in

paragraph (f) of this section.

(k) The contract may not be closed nor final payment made prior to

a final determination by the Secretary.

432.006-5 Reporting.

The annual report required by FAR 32.006-5 is to be prepared by the

SPE and to be submitted to the Secretary within 90 calendar days after

the end of the fiscal year. When signed by the Secretary, the report is

to be maintained by the SPE.

Subpart 432.1--Non-commercial Item Purchase Financing

432.102 Description of contract financing methods.

Progress payments based on a percentage or stage of completion are

authorized for use as a payment method under USDA contracts or

subcontracts for construction, alteration or repair, and shipbuilding

and conversion. Such payments also are authorized for service

contracts, if the contracting officer determines that progress payments

based on costs are not practicable and adequate safeguards are provided

to administer progress payments based on a percentage or stage of

completion. For all other contracts, progress payment provisions shall

be based on costs except that the HCA may authorize progress payments

based on a percentage or stage of completion on a case-by-case basis.

Each authorization by the HCA shall include a determination and finding

that progress payments based on costs cannot be employed practically

and that there are adequate safeguards provided for the administration

of progress payments based on a percentage or stage of completion.

432.103 Progress payments under construction contracts.

(a) When approving a progress payment under a construction

contract, the contracting officer shall indicate the amount to be paid

by the payment office and include in the contract file the rationale in

support of the payment.

(b) When a retainage is made on a progress payment under a

construction contract, the contracting officer shall place in the

contract file a written determination stating the reason(s) for the

retainage.

(c) When a progress payment under a construction contract has been

approved, the amount to be paid, the amount of any retainage withheld,

and the reason(s) for the retainage shall be provided to the contractor

by the contracting officer in writing before the payment due date.

(d) When the contractor, under a fixed-price construction contract,

furnishes evidence to the contracting officer that the surety has been

paid in full for bond premiums and requests reimbursement, the first

subsequent progress payment shall include the total amount attributable

to such bond premiums and the Government shall pay that amount in full.

This amount paid for the bond premiums is not an amount in addition to

the stated contract price.

[[Page 53665]]

432.111 Contract clauses for non-commercial purchases.

The contracting officer shall insert the clause at 452.232-1,

Reimbursement for Bond Premiums--Fixed Price Construction Contracts,

whenever the clause at FAR 52.232-5, Payments under Fixed-Price

Construction Contracts, is used in a contract.

432.113 Customary contract financing.

The contracting officer may determine the necessity for customary

contract financing. The determination and finding that customary

contract financing is needed shall be placed in the contract file.

432.114 Unusual contract financing.

The HCA is authorized to approve unusual contract financing. The

signed determination and finding supporting this approval shall be

included in the contract file.

Subpart 432.2--Commercial Item Purchase Financing

432.202 General.

432.202-1 Policy.

In the case of unusual contract financing, the approval by the HCA

shall be recorded in a determination and finding and maintained in the

contract file.

432.202-4 Security for Government financing.

Prior to determining that an offeror's financial condition is

adequate security, the contracting officer must obtain the concurrence

of the funding activity in the proposed determination.

432.206 Solicitation provisions and contract clauses.

The responsibility for administration of the liquidation provisions

of a contract may not be transferred from the contracting officer.

432.207 Administration and payment of commercial financing payments.

The responsibility for receiving, reviewing, and approval of

contract financing requests may not be transferred from the contracting

officer.

Subpart 432.3--Loan Guarantees for Defense Production

432.301 Definitions.

Within this subpart, the ``agency'' or ``guaranteeing agency'' is

the ``head of the contracting activity'' (HCA) and may not be

redelegated.

Subpart 432.4--Advance Payments for Non-commercial Items

432.402 General.

The HCA is designated as the individual responsible for making the

findings and determination, and for approval of the contract terms

concerning advance payments.

432.406 Letters of credit.

The HCA is designated as the individual responsible for

coordination with the Department of Treasury concerning letters of

credit.

432.407 Interest.

(a) The HCA is designated as the individual who may authorize, on a

case by case basis, advance payments without interest for the contract

types described in FAR 32.407(d)(1), (2), (3), and (4). The signed

determination and findings supporting these authorizations shall be

included in the contract files.

(b) The SPE is designated as the individual who may authorize

advance payments without interest other than those described in

paragraph (a) of this section.

432.412 Contract clause.

The decision to use Alternates I or III to clause 52.232-12 must be

supported by a determination and finding.

Subpart 432.6--Contract Debts

432.601 Definition.

Responsible official means the contracting officer.

432.616 Compromise actions.

Compromise of a debt within the proceedings under appeal to the

Board of Contract Appeals is the responsibility of the contracting

officer.

Subpart 432.7--Contract Funding

432.703 Contract funding requirements.

432.703-3 Contracts crossing fiscal years.

Funds appropriated to USDA may be used for one-year contracts which

are to be performed in two fiscal years so long as the total amount for

such contracts is obligated in the year for which the funds are

appropriated (7 U.S.C. 2209c).

432.770 USDA specific funding limitations.

(a) The USDA is authorized to subscribe for newspapers as may be

necessary to carry out its authorized work: Provided, that such

subscriptions shall not be made unless provision is made therefor in

the applicable appropriation and the cost thereof is not in excess of

limitations prescribed therein (7 U.S.C. 2258).

(b) The expenditure of any USDA appropriation for any consulting

service through any contract, pursuant to section 3109 of Title 5 of

the U.S. Code shall be limited to those contracts where such

expenditures are a matter of public record and available for public

inspection, except where otherwise provided under existing law, or

under existing Executive Order issued pursuant to existing law (7

U.S.C. 2225a).

Subpart 432.8--Assignment of Claims

432.802 Conditions.

Written notices of assignment and a true copy of the assigned

instrument are to be sent to the contracting officer rather than the

agency head. Other copies are distributed as directed in FAR 32.802.

432.803 Policies.

The HCA may make a determination of need to include a no-setoff

commitment in a contract.

432.805 Procedure.

The information described in FAR 32.805 shall be filed with the

contracting officer.

432.806 Contract clauses.

The contracting officer may make the determination whether to

include the clause at FAR 52.232-23 in any purchase order expected to

exceed the micro-purchase threshold.

Subpart 432.9--Prompt Payment

432.905 Invoice payments.

The payment terms for supplies and services on the Procurement List

and provided by a Javits-Wagner-O'Day Act participating nonprofit

agency are governed by FAR 8.709.

432.906 Contract financing payments.

The HCA may prescribe, on a case-by-case basis, a shorter period

for financing payments.

Subpart 432.10--Performance-Based Payments

432.1007 Administration and payment of performance-based payments.

The responsibility for receiving, reviewing, and approval of

performance-based payment requests may not be transferred from the

contracting officer.

[[Page 53666]]

PART 433--PROTESTS, DISPUTES AND APPEALS

Subpart 433.1--Protests

Sec.

433.102 General.

433.103 Protests to the agency.

433.104 Protests to GAO.

Subpart 433.2--Disputes and Appeals

433.203 Applicability.

433.203-70 Agriculture Board of Contract Appeals.

433.209 Suspected fraudulent claims.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 433.1--Protests

433.102 General.

(a) The Senior Procurement Executive (SPE) is responsible for

coordinating the handling of bid protests lodged with the General

Accounting Office (GAO).

(b) The head of the contracting activity (HCA), on a non-delegable

basis, may resolve protests and authorize reimbursement of costs in

accordance with FAR 33.102(b).

433.103 Protests to the agency.

(a) Actual or prospective bidders or offerors may file protests

either with the HCA, as provided by 433.102(b), or with the contracting

officer. Protesters who file protests with the HCA shall furnish a

complete copy to the contracting officer no later than 1 day after the

protest is filed with the HCA.

(b) When a protest is received, the adjudicating official shall

take prompt action towards resolution and notify the protester in

writing of the action taken. The written final decision shall include a

paragraph substantially as follows:

This decision shall be final and conclusive unless a further

written notice of protest is filed with the General Accounting

Office in accordance with 4 CFR part 21. Neither the filing of a

protest with USDA nor the filing of a protest with the General

Accounting Office affects your right to file an action in a district

court of the United States or the United States Court of Federal

Claims.

433.104 Protests to GAO.

The contracting activity shall furnish a copy of all reports

submitted to the GAO, including all relevant documents, to the SPE

simultaneously with their submission to the GAO.

Subpart 433.2--Disputes and Appeals

433.203 Applicability.

The Assistant Secretary for Administration is authorized to

determine the applicability of the Contract Disputes Act to contracts

with foreign governments pursuant to FAR 33.203.

433.203-70 Agriculture Board of Contract Appeals.

The organization, jurisdiction, and functions of the Agriculture

Board of Contract Appeals, together with its Rules of Procedure, are

set out in 7 CFR part 24.

433.209 Suspected fraudulent claims.

The contracting officer shall refer all matters related to

suspected fraudulent claims by a contractor under the conditions in FAR

33.209 to the Office of Inspector General for additional action or

investigation.

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

PART 434--MAJOR SYSTEM ACQUISITION

Subpart 434.0--General

Sec.

434.001 Definitions.

434.002 Policy.

434.003 Responsibilities.

434.004 Acquisition strategy.

434.005 General requirements.

434.005-6 Full production.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 434.0--General

434.001 Definitions.

Pursuant to OMB Circular No. A-109 (A-109) and the definition at

FAR 34.001, within USDA, a system shall be considered a major system

if:

(a) The total acquisition costs with private industry are estimated

to be $50 million or more, or

(b) The system has been specifically designated to be a major

system by the USDA Acquisition Executive, even if the acquisition costs

are not expected to exceed $50 million.

434.002 Policy.

In addition to the policy guidance at FAR 34.002, the policies

outlined in paragraph 6 of A-109 should serve as guidelines for all

contracting activities in planning and developing systems, major or

otherwise.

434.003 Responsibilities.

(a) The Secretary of Agriculture or other designated USDA key

executive is responsible for making four key decisions in each major

system acquisition process. These are listed in paragraph 9 of A-109

and elaborated on in paragraphs 10 through 13. The key executives of

USDA (Secretary, Deputy Secretary, Under Secretaries and Assistant

Secretaries) individually or as a group will participate in this

decision making process.

(b) The Assistant Secretary for Administration (ASA) is the USDA

Acquisition Executive. The ASA will ensure that A-109 is implemented in

USDA and that the management objectives of the Circular are realized.

The ASA is responsible for designating the program manager for each

major system acquisition, designating an acquisition to be a major

system acquisition, and approving the written charter and project

control system for each major system acquisition.

(c) The Procurement and Property Management staff is responsible

for assisting the ASA in carrying out the above responsibilities.

(d) Heads of contracting activities must:

(1) Ensure compliance with the requirements of A-109, FAR part 34

and AGAR 434.

(2) Ensure that potential major system acquisitions are brought to

the attention of the USDA Acquisition Executive.

(3) Recommend qualified candidates for designation as program

managers for each major system acquisition within their jurisdiction.

(4) Ensure that program managers fulfill their responsibilities and

discharge their duties.

(5) Cooperate with the ASA in implementing the requirements of A-

109.

(e) The program manager is responsible for planning and executing

the major system acquisition, ensuring appropriate coordination with

the USDA Acquisition Executive and other key USDA executives.

434.004 Acquisition strategy.

(a) The program manager will develop, in coordination with the

Acquisition Executive, a written charter outlining the authority,

responsibility, accountability, and budget for accomplishing the

proposed objective.

(b) The program manager will develop, subject to the approval of

the Acquisition Executive, a project control system to schedule,

monitor, and regularly report on all aspects of the project. The

control system shall establish reporting periods and milestones

consistent with the key decisions listed in paragraph 9 of A-109.

(c) Upon initiation of the project, the program manager will report

regularly to the Acquisition Executive.

434.005 General requirements.

434.005-6 Full production.

The Secretary or the USDA key executive designated by the Secretary

for the specific program is the agency head for the purposes of FAR

34.005-6.

[[Page 53667]]

PART 435--RESEARCH AND DEVELOPMENT CONTRACTING

Sec.

435.010 Scientific and technical reports.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

435.010 Scientific and technical reports.

Research and development contracts shall contain a provision

requiring that the contractor send copies of all scientific and

technical reports to the National Technical Information Service at the

address indicated in FAR 35.010(b). The release of research and

development contract results to other government activities and to the

private sector is subject to the provisions of FAR subpart 4.4.

PART 436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

Subpart 436.2--Special Aspects of Contracting for Construction

Sec.

436.201 Evaluation of contractor performance.

436.203 Government estimate of construction costs.

436.204 Disclosure of the magnitude of construction projects.

436.205 Statutory cost limitations.

436.209 Construction contracts with architect-engineer firms.

Subpart 436.3--Special Aspects of Sealed Bidding in Construction

Contracting

436.302 Presolicitation notices.

Subpart 436.5--Contract Clauses

436.500 Scope of subpart.

436.571 Prohibition against the use of lead-based paint.

436.572 Use of premises.

436.573 Archeological or historic sites.

436.574 Control of erosion, sedimentation, and pollution.

436.575 Maximum workweek-construction schedule.

436.576 Samples and certificates.

436.577 Emergency response.

436.578 Standard specifications for construction of roads and

bridges.

436.579 Opted timber sale road requirements.

Subpart 436.6--Architect-Engineer Services

436.601 Policy

436.601-3 Applicable contracting procedures.

436.602 Selection of firms for architect-engineer contracts.

436.602-1 Selection criteria.

436.602-2 Evaluation boards.

436.602-3 Evaluation board functions.

436.602-4 Selection authority.

436.602-5 Short selection process for contracts not to exceed the

simplified acquisition threshold.

436.603 Collecting data on and appraising firms' qualifications.

436.604 Performance evaluation.

436.605 Government cost estimate for architect-engineer work.

436.609 Contract clauses.

436.609-1 Design within funding limitations.

436.670 Firms ineligible for award--construction.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 436.2--Special Aspects of Contracting for Construction

436.201 Evaluation of contractor performance.

Preparation of performance evaluation reports. In addition to the

requirements of FAR 36.201, performance evaluation reports shall be

prepared for indefinite-delivery type contracts when either the

contract maximum or the contracting activity's reasonable estimate of

services to be ordered exceeds $500,000.00. For these contracts,

performance evaluation reports shall be prepared for each order at the

time of final acceptance of the work under the order.

436.203 Government estimate of construction costs.

For acquisitions using sealed bid procedures, the contracting

officer may disclose the overall amount of the Government's estimate of

construction costs following identification of the responsive bid most

advantageous to the Government; verification of that bid's price

reasonableness; and verification of the bidder's responsibility. For

acquisitions using other than sealed bid procedures (e.g.,

negotiation), the contracting officer may disclose the overall amount

of the estimate after contract award.

436.204 Disclosure of the magnitude of construction projects.

In the case of indefinite-delivery type contracts, the reasonable

estimate of work to be done or the maximum in the solicitation, both

including all options, is to be used to select the price range.

Contracting officers may elect to use both a price range for the base

period of services and the total, inclusive of options, to best

describe the magnitude of the solicitation.

436.205 Statutory cost limitations.

(a) When it appears that funds available for a project may be

insufficient for all the desired features of construction, the

contracting officer may provide in the solicitation for a base bid item

covering the work generally as specified and for one or more additive

or deductive bid items which progressively add or omit specified

features of the work in a stated order of priority. In this case, the

contracting officer shall insert the provision at 452.236-70, Additive

or Deductive Items, in solicitations for construction.

(b) In the alternative to the process in paragraph (a) of this

section, the contracting officer may use the policies and procedures

found in FAR 17.2.

436.209 Construction contracts with architect-engineer firms.

The head of the contracting activity (HCA) is authorized to approve

the award of a contract to construct a project, in whole or in part, to

the firm (inclusive of its subsidiaries or affiliates) that designed

the project.

Subpart 436.3--Special Aspects of Sealed Bidding in Construction

Contracting

436.302 Presolicitation notices.

The authority to waive a presolicitation notice is restricted to

the HCA.

Subpart 436.5--Contract Clauses

436.500 Scope of subpart.

This subpart prescribes clauses for insertion in USDA solicitations

and contracts for construction and for dismantling, demolition, or

removal of improvements or structures. The contracting officer shall

use the clauses as prescribed, in contracts that exceed the simplified

acquisition threshold. The contracting officer may use the clauses if

the contract amount is expected to be within the simplified acquisition

threshold.

436.571 Prohibition against the use of lead-based paint.

The contracting officer shall insert the clause at 452.236-71,

Prohibition Against the Use of Lead-Based Paint, in solicitations and

contracts, if the work involves construction or rehabilitation

(including dismantling, demolition, or removal) of residential

structures. This clause may be used in contracts for other than

residential structures.

436.572 Use of premises.

The contracting officer shall insert the clause at 452.236-72, Use

of Premises, if the contractor will be permitted to use land or

premises administered by USDA.

436.573 Archeological or historic sites.

The contracting officer shall insert the clause at 452.236-73,

Archeological or Historic Sites, if the contractor will be working in

an area where such sites may be found. Use of the clause is optional in

service contracts for on-the-ground work, e.g. reforestation,

silvicultural,

[[Page 53668]]

land stabilization, or other agricultural-related projects.

436.574 Control of erosion, sedimentation, and pollution.

The contracting officer shall insert the clause at 452.236-74,

Control of Erosion, Sedimentation and Pollution, if there is a need for

applying environmental controls in the performance of work. Use of the

clause is optional in service contracts for on-the-ground e.g.,

reforestation, silvicultural, land stabilization, or other

agricultural-related projects.

436.575 Maximum workweek-construction schedule.

The contracting officer shall insert the clause at 452.236-75,

Maximum Workweek-Construction Schedule, if the contractor's work

schedule is restricted by access to the facility or must be coordinated

with the schedule of contract administration personnel.

436.576 Samples and certificates.

The contracting officer shall insert the clause at 452.236-76,

Samples and Certificates, in all contracts.

436.577 Emergency response.

The contracting officer may insert the clause at 452.236-77,

Emergency Response, in construction contracts awarded for the Forest

Service.

436.578 Standard specifications for construction of roads and bridges.

The contracting officer shall insert the clause at 452.236-78,

Forest Service Standard Specifications for Construction of Roads and

Bridges, in construction contracts that incorporate the standard

specifications.

436.579 Opted timber sale road requirements.

The contracting officer shall insert the clause at 452.236-79,

Opted Timber Sale Road Requirements, in road construction contracts

resulting from a timber sale turnback.

Subpart 436.6--Architect-Engineer Service.

436.601 Policy.

436.601-3 Applicable contracting procedures.

The technical official's listing of areas where recovered materials

cannot be used shall be referred to the contracting activity's official

designated in accordance with FAR 23.404. A copy of the listing and of

any approval or disapproval by that official is to be retained in the

solicitation file.

436.602 Selection of firms for architect-engineer contracts.

436.602-1 Selection criteria.

The HCA is authorized to approve the use of design competition

under the conditions in FAR 36.602-1(b).

436.602-2 Evaluation boards.

HCA's shall establish written procedures for providing permanent or

ad hoc architect-engineer evaluation boards as prescribed in FAR

36.602-2. The procedures may provide for the appointment of private

practitioners of architecture, engineering, or related professions when

such action is determined by the HCA to be essential to meet the

Government's minimum needs.

436.602-3 Evaluation board functions.

The selection report required in FAR 36.602-3(d) shall be prepared

for the approval of the HCA. The HCA may authorize an acquisition

official above the level of the contracting officer to execute the

required approval.

436.602-4 Selection authority.

(a) The HCA shall serve as the selection authority in accordance

with FAR 36.602-4. The HCA may authorize an acquisition official above

the level of the contracting officer to serve as the selection

authority.

(b) A copy of the final selection, inclusive of the supporting

documents, shall be provided to the contracting officer and maintained

in the solicitation file.

436.602-5 Short selection process for contracts not to exceed the

simplified acquisition threshold.

The HCA may include either or both procedures in FAR 36.602-5 in

the procedures for evaluation boards.

436.603 Collecting data on and appraising firms' qualifications.

(a) HCA's which require architect-engineer services shall establish

procedures to comply with the requirements of FAR 36.603.

(b) The procedures shall include a list of names, addresses, and

phone numbers of offices or boards assigned to maintain architect-

engineer qualification data files. The list shall be updated annually.

436.604 Performance evaluation.

Preparation of performance evaluation reports. (a) In addition to

the requirements of FAR 36.604, performance evaluation reports shall be

prepared for indefinite-delivery type contracts when either the

contract maximum or the contracting activities reasonable estimate of

services to be ordered exceeds $25,000.00. For these contracts,

performance evaluation reports shall be prepared for each order at the

time of final acceptance of the work under the order.

(b) The contracting officer may require a performance evaluation

report on the work done by the architect-engineer after the completion

of or during the construction of the designed project.

436.605 Government cost estimate for architect-engineer work.

The contracting officer may release the Government's total cost

estimate in accordance with FAR 36.605(b).

436.609 Contract clauses.

436.609-1 Design within funding limitations.

(a) Should the head of the contracting activity appoint a designee

to make the determination in FAR 36.609-1(c)(1), the appointment may be

to one no lower than the official authorized to commit program funds

for the work being acquired.

(b) The contracting officer, with the advice of appropriate

technical representatives, may make the determination in FAR 36.609-

1(c)(2) or (3).

(c) A copy of the determinations described in paragraph (b) and (c)

of this section shall be maintained in the contract file.

436.670 Firms ineligible for award--construction.

The contracting officer shall insert the clause at 452.236-80,

Firms Ineligible For Award--Construction, in the contract for

architect-engineering services except as provided in FAR 36.209 and

AGAR 436.209.

PART 437--SERVICE CONTRACTING

Subpart 437.1--Service Contracts--General

Sec.

437.104 Personal services contracts.

437.110 Solicitation provisions and contract clauses.

Subpart 437.2--Advisory and Assistance Services

437.203 Policy.

437.270 Solicitation provisions and contracts clauses.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 437.1--Service Contracts--General

437.104 Personal services contracts.

USDA has the following specific statutory authorities to contract

for personal services:

[[Page 53669]]

(a) Section 706(a) of the Organic Act of 1944 (7 U.S.C. 2225)

authorizes contracting with persons or organizations on a temporary

basis, without regard to civil service compensation classification

standards in 5 U.S.C., Chapter 51 and Subchapter III of Chapter 53,

Provided:

(1) That no expenditures shall be made unless specifically provided

for in the applicable appropriation, and

(2) Expenditures do not exceed any limitations prescribed in the

appropriation.

(b) 7 U.S.C. 1627 authorizes the Secretary of Agriculture to

contract with technically qualified persons, firms or organizations to

perform research, inspection, classification, technical, or other

special services, without regard to the civil-service laws, Provided:

it is for a temporary basis and for a term not to exceed six months in

any fiscal year.

437.110 Solicitation provisions and contract clauses.

(a) The contracting officer shall insert a clause substantially the

same as the clause at 452.237-70, Loss Damage, Destruction or Repair,

in contracts for equipment rental, whether the equipment is furnished

with or without operator.

(b) The contracting officer shall insert a provision substantially

the same as the clause at 452.237-71, Pre-Bid/Pre-Proposal Conference,

in all solicitations if a conference with prospective offerors will be

held prior to the submittal of bids or proposals.

(c) The contracting officer shall insert the provision at 452.237-

73, Equipment Inspection visit, in solicitations if work is to be done

on Government equipment and an offeror's inspection is encouraged for

an understanding of the work to be performed prior to submittal of bids

or proposals.

(d) The contracting officer shall insert a clause substantially the

same as the clause at 452.237-74, Key Personnel, in contracts if

contract performance requires identification of the contractor's key

personnel.

(e) The contracting officer shall insert a clause substantially the

same as the clause at 452.237-75, Restrictions Against Disclosure, in

service contracts (including architect-engineer contracts) requiring

restrictions on release of information developed or obtained in

connection with performance of the contract.

Subpart 437.2--Advisory and Assistance Services

437.203 Policy.

Contracting for advisory and assistance services is subject to the

policy and procedures in Departmental Regulations (5000 series).

437.270 Solicitation and contract clauses.

(a) The contracting officer shall insert a clause substantially the

same as the clause at 452.237-76, Progress Reporting, in all contracts

for advisory and assistance services. It may also be used in other

service contracts.

(b) The contracting officer shall insert a clause substantially the

same as the clause at 452.237-78, Contracts with Consulting Firms for

Services, in solicitations and contracts for consulting services which

prohibit follow-on contracts with the contracting firm.

PART 441--ACQUISITION OF UTILITY SERVICES

Subpart 441.2--Acquiring Utility Services

441.201 Policy.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 441.2--Acquiring Utility Services

441.201 Policy.

As used in FAR 41.201(d)(2)(i) and 41.201(d)(3) the Federal agency

head designee is the head of the contracting activity.

SUBCHAPTER G--CONTRACT MANAGEMENT

PART 442--CONTRACT ADMINISTRATION

Subpart 442.1--Interagency Contract Administration and Audit Services

Sec.

442.102 Procedures.

Subpart 442.15--Contractor Performance Information

442.1502 Policy.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 442.1--Interagency Contract Administration and Audit

Services

442.102 Procedures.

(a) The Office of Inspector General (OIG), Audit Division, has

established a cross-servicing arrangement with the Defense Contract

Audit Agency (DCAA) to provide contract audit services required by the

FAR.

(b) All contract audit services required by contracting officers,

except those which can be accomplished in-house, shall be coordinated

through the cognizant OIG Regional Inspector General--Auditing (RIG-A).

Cognizance is determined on the basis of the contractor's location.

There is no charge for DCAA audit services coordinated through OIG.

(c) In order to ensure compliance with this requirement and to

evaluate the results of audits, contracting officers shall forward to

the RIG-A copies of all price negotiation memoranda prepared for

contracts and contract modifications in excess of $500,000.

Subpart 442.15--Contractor Performance Information

442.1502 Policy.

The head of the contracting activity shall be responsible for

establishing past performance evaluation procedures and systems as

required by FAR 42.1502 and 42.1503.

PART 445--GOVERNMENT PROPERTY

Subpart 445.3--Providing Government Property to Contractors

Sec.

445.302 Providing facilities.

445.302-1 Policy.

Subpart 445.4--Contractor Use and Rental of Government Property

445.403 Rental--Use and Charges clause.

445.407 Non-Government use of plant equipment.

Subpart 445.6--Reporting, Redistribution and Disposal of Contractor

Inventory

445.608 Screening of contracting inventory.

445.608-6 Waiver of screening requirements.

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 445.3--Providing Government Property to Contractors

445.302 Providing facilities.

445.302-1 Policy.

Heads of contracting activities (HCA's) are authorized to make

determinations for providing facilities to a contractor as prescribed

in FAR 45.302-1(a)(4).

Subpart 445.4--Contractor Use and Rental of Government Property

445.403 Rental--Use and Charges clause.

HCA's are authorized to make determinations for charging rent on

the basis of use under the Use and Charges clause in FAR 52.245-9 as

prescribed in FAR 45.403(a).

445.407 Non-Government use of plant equipment.

Requests for non-Government use of plant equipment as prescribed in

FAR 45.407 shall be submitted by the HCA to the Senior Procurement

Executive (SPE) for approval.

[[Page 53670]]

Subpart 445.6--Reporting, Redistribution and Disposal of Contractor

Inventory

445.608 Screening of contractor inventory.

445.608-6 Waiver of screening requirements.

Requests to waive screening requirements as prescribed in FAR

46.608-6 shall be submitted by the HCA to the SPE for approval.

PART 446--QUALITY ASSURANCE

Subpart 446.3--Contract Clauses

Sec.

446.370 Inspection and acceptance.

Authority: 5 U.S.C. 30 and 40 U.S.C. 486(c).

Subpart 446.3--Contract Clauses

446.370 Inspection and acceptance.

The Contracting Officer shall insert the clause at 452.246-70,

Inspection and Acceptance, in contracts where inspection and acceptance

will be performed at the same location. The clause with its Alternate I

is for use when inspection and acceptance will be performed at

different locations.

PART 447--TRANSPORTATION

Subpart 447.3--Transportation in Supply Contracts

Sec.

447.302 Place of delivery--F.O.B. point.

447.305 Solicitation provisions, contract clauses, and

transportation factors.

447.305-10 Packing, marking, and consignment instructions.

Authority: 5 U.S.C. 30 and 40 U.S.C. 486(c).

Subpart 447.3--Transportation in Supply Contracts

447.302 Place of delivery--F.O.B. point.

The contracting officer shall insert a clause substantially the

same as the clause at 452.247-70, Delivery Location, in supply

contracts when it is necessary to specify delivery locations. If

appropriate, the clause may reference an attachment which lists various

delivery locations and other delivery details (e.g., quantities to be

delivered to each location, etc.).

447.305 Solicitation provisions, contract clauses, and transportation

factors.

447.305-10 Packing, marking, and consignment instructions.

(a) The contracting officer shall insert a clause substantially the

same as the clause at 452.247-71, Marking Deliverables, in

solicitations and contracts if special marking on deliverables (other

than reports) are required.

(b) The contracting officer shall insert the clause at 452.247-72,

Packing for Domestic Shipment, in contracts when item(s) will be

delivered for immediate use to a destination in the continental United

States; when the material specification or purchase description does

not provide preservation, packaging, packing, and/or marking

requirements; and/or when the requiring activity has not cited a

specific specification for packaging.

(c) The contracting officer shall insert the clause at 452.247-73,

Packing for Overseas Shipment, in contracts when item(s) will be

delivered to an overseas destination for immediate use, the material

specification does not specify packing levels, and the required

activity has not specified such requirements.

PART 449--TERMINATION OF CONTRACTS

Subpart 449.1--General Principles

Sec.

449.106 Fraud or other criminal conduct.

449.111 Review of proposed settlements.

Subpart 449.4--Termination for Default

449.402 Termination of fixed-price contracts for default.

449.402-3 Procedure for default.

Subpart 449.5--Contract Termination Clauses

449.501 General

Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 449.1--General Principles

449.106 Fraud or other criminal conduct.

(a) If the contracting officer suspects fraud or other criminal

conduct a written report documenting the facts shall be submitted by

the head of the contracting activity (HCA) to the Office of Inspector

General. Copies of documents or other information connected with the

suspected fraud or criminal conduct shall be provided with the report.

Concurrently, a copy of the report shall also be submitted to the

Senior Procurement Executive.

(b) Depending on the findings of the Office of Inspector General,

the HCA may initiate suspension or debarment action as prescribed in

FAR part 9.4 and part 409.4.

449.111 Review of proposed settlements.

Proposed settlement agreements shall be reviewed and approved in

accordance with contracting activity procedures.

Subpart 449.4--Termination for Default

449.402 Termination of fixed-price contracts for default.

449.402-3 Procedure for default.

In addition to the requirements of FAR 49.402-3(g), the notice of

termination shall contain instructions regarding the disposition of any

Government property in the possession of the contractor (see FAR

45.508-1) and, in the case of construction contracts, such materials,

appliances, and structures as may be on the site of the construction

work. The notice shall also contain a statement concerning the

liability of the contractor or its surety for any liquidated damages

(see FAR 49.402-7).

Subpart 449.5--Contract Termination Clauses

449.501 General.

Use of special purpose termination clauses pursuant to the

authority of FAR 49.501 shall be approved in advance by the HCA.

PART 450--EXTRAORDINARY CONTRACTUAL ACTIONS

Sec.

450.001 Definitions.

Subpart 450.1--General

450.104 Reports.

Subpart 450

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