# Agriculture Acquisition Regulation; Revision > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A96-25427 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** October 15, 1996 - **Citation:** 61 FR 53645 ## Text 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. ----------------------------------------------------------------------- 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. ------------------------------------------------------------------------ 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 ------------------------------------------------------------------------ [[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 prog [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-25427. Public record. Not legal advice.