# Acquisition Regulation > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A99-7 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** January 8, 1999 - **Citation:** 64 FR 1344 ## Text SUMMARY: The Department of Health and Human Services is republishing its acquisition regulation (HHSAR), Title 48 Code of Federal Regulations, Chapter 3, to streamline and simplify it in accordance with the tenets of the National Performance Review. In doing so, the Department believes it has eliminated some procedural guidance which is too encumbering for a simplified system while attempting to empower the appropriate levels of management and contracting personnel with the authorities required for them to successfully accomplish their mission with the least amount of resistance and oversight. DATES: Comments must be received by March 9, 1999. ADDRESSES: Comments should be sent to Mr. E. S. Lanham, Office of Acquisition Management, 200 Independence Avenue, Southwest--Room 517 D, Washington, D.C. 20201. FOR FURTHER INFORMATION CONTACT: E. S. Lanham, Office of Acquisition Management, telephone (202) 690-7590. SUPPLEMENTARY INFORMATION: The Department emphasizes that it is not making significant amendments to the existing HHSAR. The amendments being made to the HHSAR concern internal procedural matters which are administrative in nature, and will not have a major effect on the general public, or to contractors or offerors of the Department. The majority of the amendments eliminate procedural guidance no longer deemed necessary, or change contracting review and approval authorities to situate them at levels more appropriate to simplification, streamlining, and empowerment. The Department has also updated HHSAR to bring it in line with the latest amendments made to the Federal Acquisition Regulation (FAR). The Department of Health and Human Services certifies this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.); therefore, no regulatory flexibility statement has been prepared. Since this rule conveys existing acquisition policies or procedures and does not promulgate any new policies or procedures which would impact the public, it has been determined that this rule will not have a significant economic effect on a substantial number of small entities, and, thus, a regulatory flexibility analysis was not performed. Furthermore, this document does not contain new information collection requirements needing approval by the Office of Management and Budget under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Existing approvals cited in 48 CFR section 301.106 remain in effect. The provisions of this regulation are issued under 5 U.S.C. 301; 40 U.S.C. 486 (c). List of Subjects in 48 CFR Chapter 3 Government procurement. Under the authority of 5 U.S.C. 301; 40 U.S.C. 486(c), the Department of Health and Human Services revises 48 CFR Chapter 3 as set forth below. Dated: November 24, 1998. John J. Callahan, Assistant Secretary for Management and Budget. CHAPTER 3--HEALTH AND HUMAN SERVICES Table of Contents Subchapter A--General Part 301--HHS Acquisition Regulation System 302--Definitions of Words and Terms 303--Improper Business Practices and Personal Conflicts of Interest 304--Administrative Matters Subchapter B--Competition and Acquisition Planning 305--Publicizing Contract Actions 306--Competition Requirements 307--Acquisition Planning 309--Contractor Qualifications Subchapter C--Contracting Methods and Contract Types 313--Simplified Acquisition Procedures 314--Sealed Bidding 315--Contracting by Negotiation 316--Types of Contracts 317--Special Contracting Methods Subchapter D--Socioeconomic Programs 319--Small Business Programs 323--Environment, Conservation, Occupational Safety, and Drug-Free Workplace 324--Protection of Privacy and Freedom of Information 325--Foreign Acquisition Subchapter E--General Contracting Requirements 328--Bonds and Insurance 330--Cost Accounting Standards Administration 332--Contract Financing 333--Protests, Disputes, and Appeals Subchapter F--Special Categories of Contracting 334--Major System Acquisition 335--Research and Development Contracting Subchapter G--Contract Management 342--Contract Administration Subchapter H--Clauses and Forms 352--Solicitation Provisions and Contract Clauses 353--Forms Subchapter T--HHS Supplementations 370--Special Programs Affecting Acquisition SUBCHAPTER A--GENERAL PART 301--HHS ACQUISITION REGULATION SYSTEM Subpart 301.1--Purpose, Authority, Issuance Sec. 301.101 Purpose. 301.103 Authority. 301.106 OMB approval under the Paperwork Reduction Act. Subpart 301.2--Administration 301.270 Executive Committee for Acquisition. Subpart 301.4--Deviations from the FAR 301.403 Individual deviations. 301.404 Class deviations. 301.470 Procedure. Subpart 301.6--Career Development, Contracting Authority, and Responsibilities 301.602 Contracting officers. 301.602-3 Ratification of unauthorized commitments. 301.603 Selection, appointment, and termination of appointment. 301.603-1 General. 301.603-2 Selection. 301.603-3 Appointment. 301.603-4 Termination. 301.603-70 Delegation of contracting officer responsibilities. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 301.1--Purpose, Authority, Issuance 301.101 Purpose. (a) The Department of Health and Human Services Acquisition Regulation (HHSAR) is issued to establish uniform acquisition policies and procedures for the Department of Health and Human Services (HHS) which conform to the Federal Acquisition Regulation (FAR) System. (b) The HHSAR implements and supplements the FAR. (Implementing material expands upon or indicates the manner of compliance with related FAR material. Supplementing material is new material which has no counterpart in the FAR.) [[Page 1345]] (c) The HHSAR contains all formal departmental policies and procedures that govern the acquisition process or otherwise control contracting relationships between the Department's contracting offices and contractors. 301.103 Authority. (b) The HHSAR is prescribed by the Assistant Secretary for Management and Budget under the authority of 5 U.S.C. 301 and Section 205 (c) of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 486(c)), as delegated by the Secretary. (c) The HHSAR is issued in the Code of Federal Regulations (CFR) as Chapter 3 of Title 48, Department of Health and Human Services Acquisition Regulation. It may be referenced as ``48 CFR Chapter 3.'' 301.106 OMB approval under the Paperwork Reduction Act. The following OMB control numbers apply to the information collection and record keeping requirements contained in this regulation: ------------------------------------------------------------------------ OMB control HHSAR segment No. ------------------------------------------------------------------------ 315.4...................................................... 0990-0139 324.70..................................................... 0990-0136 342.7101................................................... 0990-0131 352.224-70................................................. 0990-0136 352.233-70................................................. 0990-0133 352.270-1.................................................. 0990-0129 352.270-2.................................................. 0990-0129 352.270-3.................................................. 0990-0129 352.270-5.................................................. 0990-0130 370.1...................................................... 0990-0129 370.2...................................................... 0990-0129 ------------------------------------------------------------------------ The OMB control number ``OMB No. 0990-0115'' is to be included in the upper right corner of the first page of all solicitations, purchase orders, and contracts issued by departmental contracting activities. The number represents approval of the HHS acquisition process and covers record keeping and reporting requirements which are unique to individual acquisitions (e.g., requirements contained in specifications, statements of work, etc.). Subpart 301.2--Administration 301.270 Executive Committee for Acquisition. (a) The Deputy Assistant Secretary for Grants and Acquisition Management has established the Executive Committee for Acquisition (ECA) to assist and facilitate the planning and development of departmental acquisition policies and procedures and to assist in responding to other agencies and organizations concerning policies and procedures impacting the Federal acquisition process. (b) The ECA consists of members and alternates from the Office of Acquisition Management, Administration for Children and Families, Health Care Financing Administration, Program Support Center, Centers for Disease Control and Prevention, Food and Drug Administration, Health Resources and Services Administration, Indian Health Service, National Institutes of Health, and Substance Abuse and Mental Health Services Administration. The ECA is chaired by the Director, Office of Acquisition Management. All meetings will be held at the call of the Chairman, and all activities will be carried out under to direction of the Chairman. (c) The ECA, to facilitate the planning, development, and coordination of governmentwide and departmentwide acquisition policies and procedures, is to: (1) Advise and assist the Chairman concerning major acquisition policy matters; (2) Review and appraise, at appropriate intervals, the overall effectiveness of existing policies and procedures; and (3) Review and appraise the impact of new major acquisition policies, procedures, regulations, and development on current acquisition policies and procedures. (d) The Chairman will periodically issue a list of current members and alternates specifying the name, title, organization, address, and telephone number of each. The member organizations are responsible for apprising the Chairman whenever a new member or alternate is to be appointed to the ECA. Subpart 301.4--Deviations from the FAR 301.403 Individual deviations. Requests for individual deviations to either the FAR or HHSAR shall be prepared in accordance with 301.470 and forwarded through administrative channels to the Director, Office of Acquisition Management for review and approval. 301.404 Class deviations. Requests for class deviations to either the FAR or HHSAR shall be prepared in accordance with 301.470 and forwarded through administrative channels to the Deputy Assistant Secretary for Grants and Acquisition Management for review and approval. 301.470 Procedure. (a) When a contracting office determines that a deviation is needed, it shall prepare a deviation request in memorandum form and forward it through administrative channels to the official designated in 301.403 or 301.404. In an exigency situation, the contracting office may request a deviation verbally, through normal acquisition channels, but is required to confirm the request in writing as soon as possible. (b) A deviation request shall clearly and precisely set forth the: (1) Nature of the needed deviation; (2) Identification of the FAR or HHSAR citation from which the deviation is needed; (3) Circumstances under which the deviation would be used; (4) Intended effect of the deviation; (5) Time-frame; and (6) Reasons which will contribute to complete understanding and support of the requested deviation. A copy of pertinent background papers such as a form or contractor's request should accompany the deviation request. Subpart 301.6--Career Development, Contracting Authority, and Responsibilities 301.602 Contracting officers. 301.602-3 Ratification of unauthorized commitments. (b) Policy. (1) The Government is not bound by agreements or contractual commitments made to prospective contractors by persons to whom contracting authority has not been delegated. However, execution of otherwise proper contracts made by individuals without contracting authority, or by contracting officers in excess of the limits of their delegated authority, may be later ratified. The ratification must be in the form of a written document clearly stating that ratification of a previously unauthorized act is intended and must be signed by the head of the contracting activity (HCA). (2) The HCA is the official authorized to ratify an unauthorized commitment (but see (b)(3) of this section). (3) Ratification authority for actions up to $25,000 may be redelegated by the HCA to the chief of the contracting office (CCO). No other redelegations are authorized. (c) Limitations. (5) The concurrence of legal counsel concerning the payment issue is optional. (e) Procedures. (1) The individual who made the unauthorized contractual commitment shall furnish the reviewing contracting officer all records and documents concerning the commitment and a complete written statement of facts, including, but not limited to: a [[Page 1346]] statement as to why the contracting office was not used, a statement as to why the proposed contractor was selected, a list of other sources considered, a description of work to be performed or products to be furnished, the estimated or agreed contract price, a citation of the appropriation available, and a statement whether the contractor has commenced performance. (2) The contracting officer will review the submitted material, and prepare the ratification document if he/she determines that the commitment may be ratifiable. The contracting officer shall forward the ratification document and the submitted material to the HCA or CCO with any comments or information which should be considered in evaluation of the request for ratification. If legal review is desirable, the HCA or CCO will coordinate the request for ratification with the Office of General Counsel, Business and Administrative Law Division. (3) If ratification is authorized by the HCA or CCO, the file will be returned, along with the ratification document, to the contracting officer for issuance of a purchase order or contract, as appropriate. 301.603 Selection, appointment, and termination of appointment. 301.603-1 General. (a) The appointment and termination of appointment of contracting officers shall be made by the head of the contracting activity (HCA). This authority is not delegable. (b) The contracting officer appointment document for personnel in the GS-1101, 1102, and 1105 series, as well as personnel in any other series who will obligate the Government to the expenditure of funds in excess of the micro-purchase threshold, shall be the Standard Form (SF)--1402, Certificate of Appointment. The HCA may determine an alternative appointment document for appointments below that threshold. Changes to appointments shall be made by issuing a new appointment document. Each appointment document shall be prepared and maintained in accordance with FAR 1.603-1 and shall state the limits of the individual's authority. (c) An individual must be certified under the HHS Acquisition Certification Program as a prerequisite to being appointed as a contracting officer with authority to obligate funds in excess of the micro-purchase threshold (see 301.603-3(a)). The HCA will determine and require appropriate training for individuals appointed as contracting officers at lower dollar levels. An individual shall be appointed as a contracting officer only in instances where a valid organizational need can be demonstrated. Factors to be considered in assessing the need for an appointment of a contracting officer include volume of actions, complexity of work, and structure of the organization. 301.603-2 Selection. Nominations for appointment of contracting officers shall be submitted to the HCA through appropriate organizational channels for review. The nomination package, which is usually initiated by the prospective contracting officer's immediate supervisor, shall normally include the nominee's current personal qualifications statement or job history, including the information required by FAR 1.603-2, a copy of his/her most recent performance appraisal, and a copy of the certificate issued under the HHS Acquisition Certification Program indicating the nominee's current certification level, if applicable. The HCA will determine the documentation required, consistent with FAR 1.603-2, when the resulting appointment and authority will not exceed the micro-purchase threshold. 301.603-3 Appointment. (a) Contracting officer appointments shall be made at levels commensurate with nominees' certification levels as follows: (1) Level I--Purchasing Agent--Required for all personnel in the GS-1102 and 1105 series having signature authority for simplified acquisitions, including orders from GSA sources over the micro-purchase threshold. (2) Level II--Acquisition Official--Required for all personnel in the GS-1102 series. Sufficient for delegation of contracting officer authority up to $500,000. (3) Level III--Senior Acquisition Official--Required for all personnel in the GS-1102 series for delegation of contracting officer authority above $500,000. (4) Level IV--Acquisition Manager--Required for delegation of preaward review and approval authority as specified in Subpart 304.71. (b) If it is essential to appoint an individual who does not fully meet the certification requirements of this section for the contracting officer authority sought, an interim appointment may be granted by the HCA. Interim appointments may not exceed one (1) year in total, and shall not be granted unless the individual can meet the certification requirements within one year from the date of appointment. If the certification requirements are not met by that date, the appointment will automatically terminate and cannot be renewed. 301.603-4 Termination. Termination of contracting officer appointments shall be accomplished in accordance with FAR 1.603-4. 301.603-70 Delegation of contracting officer responsibilities. (a) Contracting officer responsibilities which do not involve the obligation (or deobligation) of funds or result in establishing or modifying contractual provisions may be delegated by the contracting officer by means of a written memorandum which clearly delineates the delegation and its limits. (b) Contracting officers may designate individuals as ordering officials to make purchases or place orders under blanket purchase agreements, indefinite delivery contracts, or other pre-established mechanisms. Ordering officials, including those under NIH's DELPRO, are not contracting officers. (c) Project officers are required to complete the training specified in 307.170, while ordering officials and others should receive sufficient instruction from the contracting officer to ensure the appropriate exercise of the responsibilities and knowledge of their limitations. PART 302--DEFINITIONS OF WORDS AND TERMS Subpart 302.1--Definitions Sec. 302.101 Definitions. Subpart 302.2--Definitions Clause 302.201 Contract clause. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 302.1--Definitions 302.101 Definitions. Chief of the contracting office (CCO) is a mid-level management official in charge of a contracting office who controls and oversees the daily contracting operation of an Operating Division (OPDIV) or major component of an OPDIV. The CCO is subordinate to the head of the contracting activity, and is located at a management level above other contracting personnel, usually as a branch chief or division director. Head of the agency or agency head, unless otherwise specified, means the head of the Operating Division (OPDIV) for ACF, HCFA, PSC, CDCP, FDA, HRSA, IHS, NIH, and SAMHSA, or the Assistant Secretary for Management and Budget (ASMB) for the Office of the Secretary (OS). [[Page 1347]] Head of the contracting activity (HCA) is defined in terms of certain organizational positions within the Office of Grants and Acquisition Management (OGAM), Administration for Children and Families (ACF), Health Care Financing Administration (HCFA), Program Support Center (PSC), Centers for Disease Control and Prevention (CDCP), Food and Drug Administration (FDA), Health Resources and Services Administration (HRSA), Indian Health Service (IHS), National Institutes of Health (NIH), and Substance Abuse and Metal Health Services Administration (SAMHSA), as follows: OGAM-OS--Director, Office of Acquisition Management ACF--Director, Division of Acquisition Management HCFA--Director, Office of Acquisition and Grants PSC--Director, Division of Acquisition Management CDCP--Director, Procurement and Grants Office FDA--Director, Office of Facilities, Acquisition, and Central Services HRSA--Director, Division of Grants and Procurement Management IHS--Director, Division of Contracts and Grants Policy NIH--Director, Office of Contracts and Grants Management SAMHSA--Director, Division of Contracts Management In addition, the Deputy Assistant Secretary for Grants and Acquisition Management (DASGAM) is designated as an HCA. Each HCA is responsible for conducting an effective and efficient acquisition program. Adequate controls shall be established to assure compliance with applicable laws, regulations, procedures, and the dictates of good management practices. Periodic reviews shall be conducted and evaluated by qualified personnel, preferably assigned to positions other than in the contracting office being reviewed, to determine the extent of adherence to prescribed policies and regulations, and to detect a need for guidance and/or training. The HCA shall be certified, or be certifiable, at Level IV of the HHS Acquisition Certification Program. Individuals appointed as HCA's who do not meet the Level IV requirements shall have one year from the date of appointment to obtain Level IV certification. The heads of contracting activities may redelegate their HCA authorities to the extent that redelegation is not prohibited by the terms of their respective delegations of authority, by law, by the Federal Acquisition Regulation, by the HHS Acquisition Regulation, or by other regulations. However, HCA and other contracting approvals and authorities shall not be redelegated below the levels specified in the HHS Acquisition Regulation or, in the absence of coverage in the HHS Acquisition Regulation, the Federal Acquisition Regulation. To ensure proper control of redelegated acquisition authorities, HCA's shall maintain a file containing successive delegations of HCA authority through and including the contracting officer level. Personnel delegated responsibility for acquisition functions must possess a level of experience, training, and ability commensurate with the complexity and magnitude of the acquisition actions involved. Subpart 302.2--Definitions Clause 302.201 Contract clause. The FAR clause, Definitions, at 52.202-1 shall be used as prescribed in FAR 2.201, except as follows: (a) Paragraph (a) at 352.202-1 shall be used in place of paragraph (a) of the FAR clause. (b) Paragraph (h), or its alternate, at 352.202-1 shall be added to the end of the FAR clause. Use paragraph (h) when a fixed-priced contract is anticipated; use the alternate to paragraph (h) when a cost-reimbursement contract is anticipated. PART 303--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST Subpart 303.1--Safeguards Sec. 303.101 Standards of conduct. 303.101-3 Agency regulations. Subpart 303.2--Contract Gratuities to Government Personnel 303.203 Reporting suspected violations of the Gratuities clause. Subpart 303.3--Reports of Suspected Antitrust Violations 303.303 Reporting suspected antitrust violations. Subpart 303.4--Contingent Fees 303.405 Misrepresentations or violations of the Covenant Against Contingent Fees. Subpart 303.6--Contracts With Government Employees or Organizations Owned or Controlled by Them 303.602 Exceptions. Subpart 303.7--Voiding and Rescinding Contracts 303.704 Policy. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 303.1--Safeguards 301.101 Standards of conduct. 303.101-3 Agency regulations. The Department of Health and Human Services' Standards of Conduct are prescribed in Part 73 of Title 45. Subpart 303.2--Contractor Gratuities to Government Personnel 303.203 Reporting suspected violations of the Gratuities clause. Departmental personnel shall report suspected violations of the Gratuities clause in accordance with Subpart M, Reporting Violations, of 45 CFR Part 73. Refer to Subpart B, Gifts from Outside Sources, (5 CFR 2635.201) for an explanation regarding what is prohibited and what is permitted. Subpart 303.3--Reports of Suspected Antitrust Violations 303.303 Reporting suspected antitrust violations. A copy of each report of suspected antitrust violations submitted to the Attorney General by the HCA shall also be submitted to the Director, Office of Acquisition Management. Subpart 303.4--Contingent Fees 303.405 Misrepresentations or violations of the Covenant Against Contingent Fees. (c) Reports shall be made promptly to the contracting officer. (d)(4) Suspected fraudulent or criminal matters to be reported to the Department of Justice shall be prepared in letter format and forwarded through acquisition channels to the head of the contracting activity for signature. The letter must contain all pertinent facts and background information considered by the contracting officer and chief of the contracting office that led to the decision that fraudulent or criminal matters may be present. A copy of the signed letter shall be sent to the Director, Office of Acquisition Management. Subpart 303.6--Contracts With Government Employees or Organizations Owned or Controlled by Them 303.602 Exceptions. Approval of an exception to the policy stated in FAR 3.601 shall be made by the HCA (not delegable). Subpart 303.7--Voiding and Rescinding Contracts 303.704 Policy. For purposes of implementing FAR Subpart 3.7, the authorities granted to [[Page 1348]] the ``agency head or designee'' shall be exercised by the HCA (not delegable). PART 304--ADMINISTRATIVE MATTERS Subpart 304.6--Contract Reporting Sec. 304.602 Federal Procurement Data System. Subpart 304.8--Government Contract Files 304.804-70 Contract closeout audits. Subpart 304.70--Acquisition Instrument Identification Numbering System 304.7000 Scope of subpart. 304.7001 Numbering acquisitions. Subpart 304.71--Review and Approval of Proposed Contract Awards 304.7100 Policy. 304.7101 Procedures. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 304.6--Contracting Reporting 304.602 Federal Procurement Data System (FPDS). The Departmental Contracts Information System (DCIS) represents the Department's implementation of the FPDS. All departmental contracting activities are required to participate in the DCIS and follow the procedures stated in the Enhanced Departmental Contracts Information System Manual and amendments to it. The HCA (not delegable) shall ensure that all required contract information is collected, submitted, and received into the DCIS on or before the 15th of each month for all appropriate contract and contract modifications award of the prior month. Subpart 304.8--Government Contract Files 304.804-70 Contract closeout audits. (a) Contracting officers shall rely, to the maximum extent possible, on non-Federal single audits to close physically completed cost-reimbursement contracts with colleges and universities, hospitals, non-profit firms, and State and local governments. In addition, where appropriate, a sample of these contractors may be selected for audit, in accordance with the decision-making process set forth in the following paragraph (b). (b) Contracting officers shall request contract closeout audits on physically completed, cost-reimbursement, for-profit contracts as follows: (1) Decisions on: the need for and allocation of contract audit resources and services; the selection of contracts or contractors to be audited; the identification of the audit agency to perform the audit; and the type or scope of closeout audit to be conducted, shall be made by the Office of Inspector General (OIG) and Office of Grants and Acquisition Management, in consultation with the Department's Contract Audit Users Work Group. These decisions shall be based upon the needs of the customer, risk analysis, return on investment, and the availability of audit resources. When an audit is warranted prior to closing a contract, the contracting officer shall submit the audit request to the OIG's Office of Audit via the appropriate OPDIV representative on the Contract Audit Users Work Group. (2) Except where a contracting officer suspects misrepresentation or fraud, contract closeout field audits shall not be requested if the cost of performance is likely to exceed the potential cost recovery. Contracts that are not selected for a field audit may be closed on the basis of a desk review, subject to any later on-site audit findings. The release executed by the contractor shall contain the following statement: The Contractor agrees, pursuant to the clause in this contract entitled ``Allowable Cost'' or ``Allowable Cost and Fixed Fee'' (as appropriate), that the amount of any sustained audit exceptions resulting from any audit made after final payment shall be refunded to the Government.'' Subpart 304.70--Acquisition Instrument Identification Numbering System 304.7000 Scope of subpart. This subpart prescribes policy and procedures for assigning identifying numbers to contracts and related instruments, including solicitation documents, purchase orders, and delivery orders. The HCA (not delegable) is responsible for establishing the numbering system within the OPDIV. 304.7001 Numbering acquisitions. (a) Acquisitions which require numbering. The following acquisitions shall be numbered in accordance with the system prescribed in paragraph (b) of this section: (1) Contracts, including letter contracts and task orders under basis ordering agreements, which involve the payment of $2,500 or more for the acquisition of personal property or nonpersonal services. (The number assigned to a letter contract shall be assigned to the superseding definitized contract). (2) Contracts which involve the payment of $2,000 or more for construction (including renovation or alteration). (3) Contracts which involve more than one payment regardless of amount. (4) Requests for proposals and invitations for bids. (5) Purchase and delivery orders. (6) Requests for quotations. (7) Basic ordering agreements. (b) Numbering system for contracts. All contracts which require numbering shall be assigned a number consisting of the following: (1) The three digit identification code assigned to the contracting office by the Office of Financial Operations, Program Support Center. (2) A two digit fiscal year designation; and (3) A four digit serial number. For example, the initial contract executed by the Office of Acquisition Management, OS, for fiscal year 1996 would be numbered 100-96-0001. While it is required that a different series of four digit serial numbers be used for each fiscal year, serial numbers assigned need not be sequential. (c) Numbering system for other acquisitions. The HCA is responsible for developing a numbering system for the acquisitions other than contracts listed in HHSAR 304.7001 (a)(4) through (a)(7), and any other types of acquisitions that may be used. (d) Assignment of identification codes. Each contracting office of the Department shall be assigned a three digit identification code by the Office of Financial Operations. Requests for the assignment of codes for newly established contracting offices shall be submitted by the headquarters acquisition staff office of the contracting activity to the Office of Financial Operations must be notified. A listing of the contracting office identification codes currently in use is contained in the Enhanced Departmental Contracts Information System Manual. Subpart 304.71--Review and Approval of Proposed Contract Awards 304.7100 Policy. This subpart requires each HCA (not delegable) to establish review and approval procedures for proposed contracts actions to ensure that: (a) Contract awards are in conformance with law, established policies and procedures, and sound business practices; (b) Contractual documents properly reflect the mutual understanding of the parties; and (c) The contracting officer is informed of deficiencies and items of questionable acceptability, and corrective action is taken. 304.7101 Procedures. (a) All contractual documents, regardless of dollar value, are to be [[Page 1349]] reviewed by the contracting officer prior to award. (b) The HCA is responsible for establishing review and approval procedures and designating acquisition officials to serve as reviewers. Each HCA is responsible for determining the criterion (criteria) to be used in determining which contracts are to be reviewed, and that a sampling of proposed contracts not included in the ``to be reviewed'' group are reviewed and approved. (c) Officials assigned responsibility for review and approval of contract actions must possess qualifications in the field of acquisition commensurate with the level of review performed, and, at a minimum, possess those acquisition skills expected of a contracting officer. However, if any official is to serve as the contracting officer and sign the contractual document, the review and approval function shall be performed by an appropriate official at least one level above. PART 305--PUBLICIZING CONTRACT ACTIONS Subpart 305.2--Synopsis of Proposed Contract Actions Sec. 305.202 Exceptions. Subpart 305.3--Synopsis of Contract Awards 305.303 Announcement of contract awards. Subpart 305.5--Paid Advertisements 305.502 Authority. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 305.2--Synopsis of Proposed Contract Actions 305.202 Exceptions. (b) When a contracting office believes that it has a situation where advance notice is not appropriate or reasonable, it shall prepare a memorandum citing all pertinent facts and details and send it, through normal acquisition channels, to the Deputy Assistant Secretary for Grants and Acquisition Management (DASGAM) requesting relief from synopsizing. The DASGAM shall review the request and decide whether an exception to synopsizing is appropriate or reasonable. If it is, the DASGAM shall take the necessary coordinating actions required by FAR 5.202(b). Whatever the decision is on the request, the DASGAM shall promptly notify the contracting office when a determination has been made. Subpart 305.3--Synopses of Contract Awards 305.303 Announcement of contract awards. (a) Public announcement. Any contract, contract modification, or delivery order in the amount of $3 million or more shall be reported by the contracting officer to the Office of the Deputy Assistant Secretary for Legislation (Congressional Liaison), Room 406G, Hubert H. Humphrey Building. Notification shall be accomplished by providing a copy of the contract or award document face page to the referenced office prior to the day of award, or in sufficient time to allow for an announcement to be made by 5:00 p.m. Washington, DC time on the day of award. Subpart 305.5--Paid Advertisements 305.502 Authority. The contracting officer is authorized to publish advertisements, notices, and contract proposals in newspapers and periodicals in accordance with the requirements and conditions referenced in FAR Subpart 5.5. PART 306--COMPETITION REQUIREMENTS Subpart 306.2--Full and Open Competition After Exclusion of Sources Sec. 306.202 Establishing or maintaining alternative sources. Subpart 306.3--Other Than Full and Open Competition 306.302 Circumstances permitting other than full and open competition. 306.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements. 306.302-7 Public interest. 306.303 Justification. 306.303-1 Requirements 306.303-2 Content. 306.304 Approval of the justification. Subpart 306.5--Competition Advocates 306.501 Requirement. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 306.2--Full and Open Competition After Exclusion of Sources 306.202 Establishing or maintaining alternative sources. (a) The reference to the agency head in FAR 6.202(a) shall mean the appropriate competition advocate cited in 306.501. (b)(1) The required determination and findings (D&F) shall be prepared by the contracting officer based on the data provided by program personnel, and shall be signed by the appropriate competition advocate. The D&F signatory is not delegable. Subpart 306.3--Other Than Full and Open Competition 306.302 Circumstances permitting other than full and open competition. 306.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements. (a)(2)(ii) Follow-on contracts for the continuation of major research and development studies on long-term social and health programs, major research studies, or clinical trials may be deemed to be available only from the original source when it is likely that award to any other source would result in unacceptable delays in fulfilling the Department's or OPDIV's requirements. (b) Application. (4) When the head of the program office has determined that a specific item of technical equipment or parts must be obtained to meet the activity's program responsibility to test and evacuate certain kinds and types of products, and only one source is available. (This criterion is limited to testing and evaluation purposes only and may not be used for initial outfitting or repetitive acquisitions. Project officers should support the use of this criterion with citations from their agency's legislation and the technical rationale for the item of equipment required.) 306.302-7 Public interest. (a) Authority. (2) Agency head, in this instance, means the Secretary. (b) Limitations. An ``approval package'' must be prepared by the contracting officer and staffed through departmental acquisition channels to the Secretary. The package shall include a determination and findings for the Secretary to sign that contains all pertinent information to support justification for exercising the exemption to competition, and a letter for the Secretary to sign notifying Congress of the determination to award a contract under the authority of 41 U.S.C. 253(c)(7). 306.303 Justifications. 306.303-1 Requirements. (b) Preliminary arrangements or agreements with the proposed contractor shall have no effect on the rationale used to support an acquisition for other than full and open competition. (f) When a program office desires to obtain certain goods or services by contract without full and open competition, it shall, at the time of [[Page 1350]] forwarding the requisition or request for contract, furnish the contracting office a justification explaining why full and open competition is not feasible. All justifications shall be initially reviewed by the contracting officer. (1) Justifications in excess of the simplified acquisition threshold shall be in the form of a separate, self-contained document, prepared in accordance with FAR 6.303 and 306.303, and called a ``JOFOC'' (Justification for Other Than Full and Open Competition). Justifications at or below the simplified acquisition threshold may be in the form of a paragraph or paragraphs contained in the requisition or request for contract. (2) Justifications, whether over or under the simplified acquisition threshold, shall fully describe what is to be acquired, offer reasons which go beyond inconvenience, and explain why it is not feasible to obtain competition. The justifications shall be supported by verifiable facts rather than mere opinions. Documentation in the justification should be sufficient to permit an individual with technical competence in the area to follow the rationale. 306.303-2 Content. (a)(1) The program office and name, address, and telephone number of the project officer shall also be included. (2) This item shall include project identification such as the authorizing program legislation, to include citations or other internal program identification data such as title, contract number, etc. (3) The description may be in the form of a statement of work, purchase description, or specification. A statement is to be included to explain whether the acquisition is an entity in itself, whether it is one in a series, or part of a related group of acquisitions. (c) Each JOFOC shall conclude with at least signature lines for the project officer, project officer's immediate supervisor, contracting officer, and approving official. 306.304 Approval of the Justification. (a)(2) The competition advocates are listed in 306.501. This authority is not delegable. (3) The competition advocate shall exercise this approval authority, except where the individual designated as the competition advocate does not meet the requirements of FAR 6.304(a)(3)(ii). This authority is not delegable. (4) The senior procurement executive of the Department is the Assistant Secretary for Management and Budget. (c) A class justification shall be processed the same as an individual justification. Subpart 306.5--Competition Advocates 306.501 Requirement. The Department's competition advocate is the Deputy Assistant Secretary for Grants and Acquisition Management. The competition advocates for the Department's primary contracting officers are as follows: ACF--Director, Office of Management Services HCFA--Associate Administrator for Operations and Resource Management OS--Deputy Assistant Secretary for Grants and Acquisition Management PSC--Director, Administrative Services Center AHCPR--Executive Officer CDCP--Director, Office of Program Support FDA--Associate Commissioner for Management HRSA--Associate Administrator for Operations and Management IHS--Associate Director, Office of Administration and Management NIH--(R&D)--Associate Director for Extramural Affairs (Other than R&D)--Associate Director for Intramural Affairs SAMHSA--Associate Administrator for Management PART 307--ACQUISITION PLANNING Subpart 307.1--Acquisition Plans Sec. 307.104 General procedures. 307.105 Contents of written acquisition plans. 307.170 Program training requirements. 307.170-1 Policy exceptions. 307.170-2 Training course prerequisites. Subpart 307.3--Contractor Versus Government Performance 307.302 General. 307.303 Determining availability of private commercial sources. 307.304 Procedures. 307.307 Appeals. Subpart 307.70--Considerations in Selecting an Award Instrument 307.7000 Scope of subpart. 307.7001 Distinction between acquisition and assistance. 307.7002 Procedures. Subpart 307.71--Requests for Contract 307.7100 Scope of subpart. 307.7101 General. 307.7102 Procedures. 307.7103 Responsibilities. 307.7104 Transmittal. 307.7105 Format and content. 307.7106 Statement of work. 307.7107 Review. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 307.1--Acquisition Planning 307.104 General procedures. (c) If use of other than full and open competition is anticipated, see 307.104(h). (d) Each contracting activity shall prepare an Annual Acquisition Plan (AAP). The AAP is a macro plan, containing a list of anticipated contract actions over the simplified acquisition threshold and their associated funding, as well as the aggregate planned dollars for simplified acquisitions by quarter, developed for each fiscal year. The AAP shall conform to reasonable budget expectations and shall be reviewed at least quarterly and modified as appropriate. The chief of the contracting office (CCO) shall obtain this information from the program planning/budget office of the contracting activity and use the AAP to provide necessary reports and monitor the workload of the contracting office. For contract actions, the plan shall contain, at a minimum: (1) A brief description (descriptive title, perhaps one or two sentences if necessary); (2) Estimated award amount; (3) Requested award date; (4) Name and phone number of contact person (usually the project officer); (5) Other information required for OPDIV needs. (e) Once the AAP is obtained, the contracting officer/contract specialist shall initiate discussions with the assigned project officer for each planned negotiated acquisition over $100,000 except for: (1) Acquisitions made under interagency agreements, and (2) Contract modifications which exercise options, make changes authorized by the Changes clause, or add funds to an incrementally funded contract. (The HCA may prescribe procedures for contract actions not covered by this subpart.) (f) The purpose of the discussions between the contracting and project officers is to develop an individual acquisition planning schedule and to address the things that will need to be covered in the request for contract (RFC), including clearances, acquisition strategy, sources, etc. The project officer must either have a statement of work (SOW) ready at this time or must discuss in more detail the nature of the services/supplies that will be required. (g) Standard lead-times for processing various types of acquisitions and deadlines for submission of acceptable RFCs (that is, RFCs which include all [[Page 1351]] required elements such as clearances, funding documents, and an acceptable SOW) for award in a given fiscal year shall be established by the HCA or designee not lower that the CCO. (h) The outcome of the discussions referenced in 307.104 (f) between the project officer and the contracting officer/contracting specialist will be an agreement concerning the dates of significant transaction-specific acquisition milestones, including the date of submission of the RFC to the contracting officer. This milestone schedule document will be prepared with those dates and will be signed by the project officer and the contracting officer. The milestones cannot be revised except by mutual agreement of these same individuals. If the planning schedule indicates the need to obtain approval of a Justification for Other than Full and Open Competition, the CCO must sign the milestone agreement. This document shall be retained in the contract file. All other considerations that will affect the acquisition (technical, business, management) shall be addressed in the RFC (see 307.71). (A) RFCs submitted after the established deadline in paragraph (g) of this section or the agreed-upon milestone for RFC submission in paragraph (h) of this section will be accepted for processing on a case-by-case basis. 307.105 Contents of written acquisition plans. The written acquisition plan required by FAR 7.105 is contained in the request for contract, as specified in Subpart 307.71, and is the final product of the planning process. 307.170 Program training requirements. (a) All program personnel selected to serve as project officer for an HHS contract shall have successfully completed either the Department's appropriate ``Basic Project Officer'' course, or an equivalent course (see paragraph (c) of this section). (b) At least fifty percent of the HHS program personnel performing the function of technical proposal evaluator on a technical evaluation team or panel for any competitively solicited HHS contract shall have successfully completed the appropriate ``Basic Project Officer'' course, or an equivalent course (see paragraph (c) of this section). This requirement applies to the initial technical proposal evaluation and any subsequent technical evaluations that may be required. (c) Determination of course equivalency shall be made by the HCA (not delegable) of the cognizant contracting activity. The contracting officer is responsible for ensuring that the project officer and technical proposal evaluators have successfully completed the required training discussed in 307.170-2. 307.170-1 Policy exceptions. In the event there is an urgent requirement for a specific individual to serve as a project officer and that individual has not successfully completed the prerequisite training course, the HCA (not delegable) may waive the training requirement and authorize the individual to perform the project duties, provided that: (a) The individual first meets with the cognizant contracting officer to review the ``DHHS Project Officers' Contracting Handbook,'' and to discuss the important aspects of the contracting--program office relationship as appropriate to the circumstances; and (b) The individual attends the next scheduled and appropriate ``Basic Project Officer'' course. 307.170-2 Training course prerequisites. (a) Project officers. (1) Newly appointed project officers, and project officers with less than three years experience and no previous related training, are required to take the appropriate ``Basic Project Officer'' course. (The grade level for project officers attending the course should be GS-7 and above.) All project officers are encouraged to take the appropriate ``Writing Statements of Work'' course. (2) Project officers with more than three years experience, and project officers with less than three years experience who have successfully completed the appropriate basic course, are qualified (and encouraged) to take the ``Advanced Project Officer'' course. (3) Additional information on prerequisites for attendance of these courses may be found in the ``DHHS Acquisition Training and Certification Handbook.'' (b) Technical proposal evaluators. Technical proposal evaluators, regardless of experience, are required to take the appropriate ``Basic Project Officer'' course. Upon successful completion of the basic course, it is recommended that they take the appropriate ``Advanced Project Officer'' course. Subpart 307.3--Contractor Versus Government Performance 307.302 General. (a) GAM Chapter 18-10, Commercial-Industrial Activities of the Department of Health and Human Services Providing Products or Services for Government Use, assigns responsibilities for making method-of- performance decisions (contract vs. in-house performance) to various management levels within the Department depending on the dollar amount of capital investment or annual operating costs. It also requires that each operating division (OPDIV) and staff division (STAFFDIV) designate a ``Commercial-Industrial Control Officer'' (CICO) to be responsible for ensuring compliance with the requirements of the Chapter. (d) Besides contracts with annual operating costs under $100,000, contracts with annual operating costs under an authorized acquisition set-aside for small business concerns and contracts made pursuant to section 8(a) of the Small Business Act are exempted from the requirements of FAR Subpart 7.3, GAM Chapter 18-10, and OMB Circular No. A-76. 307.303 Determining availability of private commercial sources. In accordance with the provisions of GAM Chapter 18-10, OPDIVs and STAFFDIVs must prepare and maintain a complete inventory of all individual commercial or industrial activities, including those conducted under contracts in excess of $100,000 annually. They must also conduct periodic reviews of each activity and contract in the inventory to determine if the existing performance, in-house or by contract, continues to be in accordance with the policy guidelines of GAM Chapter 18-10. 307.304 Procedures. Contracting officers shall ensure that no acquisition action involving a commercial-industrial activity is initiated unless it is in compliance with the requirements of GAM Chapter 18-10. The contracting officer must check each request for contract expected to result in a contract in excess of $100,000 to ensure that it contains a statement as to whether the proposed contract is or is not subject to review under GAM Chapter 18-10 requirements. If the contracting officer has any questions regarding the determination of applicability or nonapplicability, or if the required statement is missing, the program office submitting the request for contract should be contacted and the situation rectified. If the issue cannot be resolved with the program office, the contracting office shall refer the matter to the CICO for a final determination. The HCA is responsible for ensuring that contracting activities are in full compliance with FAR Subpart 7.3. [[Page 1352]] 307.307 Appeals. The review and appeals procedure discussed in FAR 7.307 are addressed in GAM Chapter 18-10. Subpart 307.70--Considerations in Selecting an Award Instrument 307.7000 Scope of subpart. This subpart provides guidance on the appropriate selection of award instruments consistent with the Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. 501). This subpart explains the use of the contract as the award instrument for acquisition relationships, and the grant or cooperative agreement as the instrument for assistance relationships. This subpart provides guidance for determining whether to use the acquisition or assistance process to fulfill program needs. Detailed guidance on assistance instruments may be found in Chapter 1- 02 of the Grants Administration Manual. 307.7001 Distinction between acquisition and assistance. (a) The Federal Grant and Cooperative Agreement Act of 1977 requires the use of contracts to acquire property or services for the direct benefit or use of the Government and grants or cooperative agreements to transfer money, property, services, or anything of value to recipients to accomplish a public purpose of support or stimulation authorized by Federal statute. (b) A contract is to be used as the legal instrument to reflect a relationship between the Federal Government and a recipient whenever: (1) The principal purpose of the instrument is the acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government; or (2) The Department determines in a specific instance that the use of a type of contract is appropriate. That is, it is determined in a certain situation that specific needs can be satisfied best by using the acquisition process. However, this authority does not permit circumventing the criteria for use of acquisition or assistance instruments. Use of this authority is restricted to extraordinary circumstances and only with the prior approval of the Deputy Assistant Secretary for Grants and Acquisition Management (DASGAM). (c) A grant or cooperative agreement is to be used as the legal instrument to reflect a relationship between the Federal Government and a recipient whenever the principal purpose of the relationship is the transfer of money, property, services, or anything of value to the recipient to accomplish a public purpose of support or stimulation authorized by Federal statute. (1) A grant is the legal instrument to be used when no substantial involvement is anticipated between the Department and the recipient during performance of the contemplated activity. (2) A cooperative agreement is the legal instrument to be used when substantial involvement is anticipated between the Department and the recipient during performance of the contemplated activity. (d) As a general rule, contracts are to be used for the following purposes: (1) Evaluation (including research of an evaluative nature) of the performance of Government programs or projects or grantee activity initiated by the funding agency for its direct benefit or use. (2) Technical assistance rendered to the Government, or on behalf of the Government, to any third party, including those receiving grants or cooperative agreements. (3) Surveys, studies, and research which provide specific information desired by the Government for its direct activities, or for dissemination to the public. (4) Consulting services or professional services of all kinds if provided to the Government or, on behalf of the Government, to any third party. (5) Training projects where the Government selects the individuals or specific groups whose members are to be trained or specifies the content of the curriculum (not applicable to fellowship awards.) (6) Planning for Government use. (7) Production of publications or audiovisual materials required primarily for the conduct of the direct operations of the Government. (8) Design or development of items for Government use or pursuant to agency definition or specifications. (9) Conferences conducted on behalf of the Government. (10) Generation of management information or other data for Government use. 307.7002 Procedures. (a) OPDIV program officials should use existing budget and program planning procedures to propose new activities and major changes in ongoing programs. It is the responsibility of these program officials to meet with the HCA and the principal grants management official, or their designees, to distinguish the relationships and determine whether award is to be made through the acquisition process or assistance process. This determination should be made prior to the time when the annual acquisition plan is reviewed and approved so that the plan will reflect all known proposed contract actions. The cognizant contracting officer will confirm the appropriateness of the use of the contract instrument when reviewing the request for contract. (b) Shifts from one award instrument to another must be fully documented in the appropriate files to show a fundamental change in program purpose that unequivocally justifies the rationale for the shift. (c) OPDIVs must ensure that the choice of instrument is determined in accordance with the Federal Grant and Cooperative Agreement Act of 1977 and applicable departmental policies. If, however, there are major individual transactions or programs which contain elements of both acquisition and assistance in such a way that they cannot be characterized as having a principal purpose of one or the other, guidance should be obtained from the DASGAM, through normal channels, before proceeding with a determination. (d) Any public notice, program announcement, solicitation, or request for applications or proposals must indicate whether the intended relationship will be one of acquisition or assistance and specify the award instrument to be used. Subpart 307.71--Requests for Contract 307.7100 Scope of subpart. This subpart prescribes the format and contents of the request for contract (RFC) and provides procedures for its preparation and submission. 307.7101 General. The program office's preparation of the RFC and submission to the contracting office completes the presolicitation phase of the acquisition planning process and commences the solicitation phase. The RFC is the formal document which initiates the preparation of the request for proposals (RFP) by the contracting office and sets the acquisition process in motion. It is the result of the planning by the project officer and contracting officer and contains much of the pertinent information necessary for the development of a sound, comprehensive RFP. 307.7102 Procedures. The program office should submit the RFC to the contracting office no later than the date agreed to by the contracting officer and the project officer in the milestone schedule (see [[Page 1353]] 307.104(h)), unless a revised due date has been established by mutual agreement. 307.7103 Responsibilities. (a) It is the responsibility of the project officer to prepare the RFC so that it complies with the requirements of this subpart and any OPDIV guidance issued in accordance with this subpart. (b) Prior to the submission of the RFC to the contracting office, the head of the program office sponsoring the project shall review the RFC to ensure that all required information is provided in the prescribed format, and a technical review of the statement of work has been made. The level and extent of the technical review is to be commensurate with the estimated cost, importance, and complexity of the proposed acquisition, and must be thorough enough to ensure that vague and ambiguous language is eliminated, the statement of work is structured by phases or tasks, if appropriate, and methods are available for assessing the contractor's technical, cost, and delivery performance. 307.7104 Transmittal. The RFC must be conveyed to the contracting office by use of a covering memorandum or other form of transmittal. The transmittal document must be signed by the head of the sponsoring program office and include both a statement attesting to the conclusiveness of the review described in 307.7103(b) and a list identifying all attachments to the RFC. 307.7105 Format and content. The Department does not prescribe a standard format for the RFC. A format similar to what is in this section is recommended. However, any document or group of documents will be acceptable as an RFC as long as all of the required information (paragraph (a) of this section), and as much of the optional information (paragraph (b) of this section) as is relevant, is included. (a) The RFC must include: (1) Purpose of the contract. A brief, general description of the requirement, including the citation of the legislation which authorizes the program or project, and a statement as to the intended purpose/use of the proposed contract. (2) Period of performance. The number of months (or other time period) required for total performance and, if applicable, for each phase of work indicated in the statement of work, as well as the proposed starting date. (3) Estimated cost and funds citation. An estimate of the total cost of the proposed contract and, if applicable, the estimate for each phase indicated in the statement of work. The project officer must provide a cost breakdown of all contributing cost factors, an estimate of the technical staff hours, direct material, subcontracting, travel, etc., and may consult with contracting and cost advisory personnel in developing this information. This section must include the certification of funds availability for the proposed acquisition, along with the appropriation and accounting information citations. When funds for the proposed acquisition are not currently available for obligation but are anticipated, a statement of intent to commit funds from the financial management officer shall be included in lieu of the certification of funds availability. (Contracts cannot be awarded unless funds are available, but see FAR 32.703-2). (4) Specification, purchase description, or statement or work. A description of the work to be performed that may be in the form of a specification, purchase description, or statement of work. Guidance concerning the statement of work and its contents is contained in 307.7106. Specifications and purchase descriptions are not used to a great extent in this Department. Use of the specification is primarily limited to supply or service contracts where the material end item or service to be delivered is well defined by the Government. (5) Schedule of deliverables/reporting requirements. A description of what is to be delivered, including, if applicable, technical and financial progress reports and any final report, and the required date of delivery for each deliverable. Reporting requirements should be tailored to the instant acquisition and should not be unnecessarily extensive or detailed. All delivery and reporting requirements shall include the quantities, the place of delivery, and time of delivery. (6) Sources for solicitation. A list of known potential sources by name and mailing address. The project officer is encouraged to use trade and professional journals and publications to identify new prospective sources to supplement the list of known sources. Efforts to identify set-aside possibilities, i.e., small disadvantaged, and women- owned small businesses must be explained. (7) Project officer and alternate. The project officer's name, title, organization, mailing address, and telephone number, along with the same data for the project officer's alternate, and a statement that these individuals have completed the Department's project officer training course (see 307.170) (b) The RFC must include, if applicable to the acquisition: (1) Background and need. The background, history, and necessity for the proposed contract. This section is to include prior, present, and planned efforts by the program office in the same or related areas, and a description of efforts by other departmental activities and Federal agencies in the same or related program areas, if known. In addition, specific project information, such as the relevance or contribution to overall program objectives, reasons for the need, priority, and project overlap are to be provided. (2) Reference materials. A list, by title and description, of study reports, plans, drawings, and other data to be made available to prospective offerors for use in preparation of proposals and/or the contractor for use in performance of the contract. The project officer must indicate whether this material is currently available or when it will be available. (3) Technical evaluation criteria and instructions. Technical evaluation criteria, which have been developed based on the requirements of the specific project, and any instructions and information which will assist in the preparation of prospective offerors' technical proposals. Evaluation factors may include understanding of the problem, technical approach, experience, personnel, facilities, etc. Criteria areas discussed in the statement of work and the relative order of importance or weights assigned to each of these areas for technical evaluation purposes must be identified. (4) Special program clearances or approvals. Any required clearance or approval. The following special program clearances or approvals should be reviewed for applicability to each acquisition. The ones which are applicable should be addressed during the planning discussions between the project officer and contracting officer/ contract specialist (see 307.104(f)) and immediate action should be initiated by the project officer to obtain the necessary clearances or approvals. Comprehensive checklists of these and any OPDIV special approvals, clearances, and requirements shall be provided for reference purposes to program offices by the servicing contracting activity. If the approval or clearance has been requested and is being processed at the time of RFC submission, a footnote to this effect, including all pertinent details, must be included in this section. [[Page 1354]] (i) Commercial activities. (OMB Circular No. A-76). A request for contract (RFC) must contain a statement as to whether the proposed solicitation is or is not to be used as part of an OMB Circular No. A- 76 cost comparison. (See General Administrative Manual (GAM) Chapter 18-10; FAR Subpart 7.3, Subpart 307.3; OMB Circular No. A-76.) (ii) Printing. The acquisition of printing and high volume duplicating by contract is prohibited unless it is authorized by the Joint Committee on Printing of the U.S. Congress. Procedures to be followed are contained in the ``Government Printing and Binding Regulations'' and the HHS Printing Management Manual and FAR Subpart 8.8. (iii) Paperwork Reduction Act. Under the Paperwork Reduction Act of 1995, a Federal agency shall not collect information or sponsor the collection of information from ten or more persons (other than Federal employees acting within the scope of their employment) unless, in advance, the agency has submitted a request for Office of Management and Budget (OMB) review, to the OMB, and the OMB has approved the proposed collection of information. Procedures for the approval may be obtained by contacting the OPDIV reports clearance officer. (See Title 5 CFR Part 1320). (iv) Publications. All projects that will result in contracts which include more than one publication require review and approval by the Office of the Assistant Secretary for Public Affairs (OASPA). Form HHS- 524, Request for Communications Contract Clearance, should be forwarded to OASPA through the OPDIV public affairs officer. Publications are defined in Chapter 5-00-15 of the Public Affairs Management Manual. (v) Public affairs services. Projects for the acquisition of public affairs services in excess of $5,000 require review and approval by the Office of the Assistant Secretary for Public Affairs (OASPA). Form HHS- 524, Request for Communications Contract Clearance, should be forwarded to OASPA through the OPDIV public affairs officer. Public affairs services are defined in Chapter 8-00-20 of the Public Affairs Management Manual. (vi) Audiovisual. Any proposed acquisition of an audiovisual production requires the submission of a Standard Form 282, Mandatory Title Check, to the National Audiovisual Center (NAC). When the results of this title check have been reviewed by the project office and if a determination is made that existing materials are not adequate to fulfill the requirements, a statement to that effect shall be prepared by the project office. Audiovisuals are defined in Chapter 6-00-15 of the Public Affairs Management Manual. For acquisitions in excess of $5,000, a copy of that statement and Form HHS-524A, Audiovisual Clearance Request, shall be submitted through the OPDIV public affairs officer to the Office of the Assistant Secretary for Public Affairs (OASPA) for review and approval. An approval copy of the Form HHS-524A will be returned to the OPDIV for transmission to the contract negotiator. (vii) Privacy Act (Pub. L. 93-579). Whenever the Department contracts for the design, development, operation, or maintenance of a system of records on individuals on behalf of the Department to accomplish a departmental function, the Privacy Act is applicable. The program official, after consultation with the activity's Privacy Act Coordinator and the Office of General Counsel, as necessary, shall include a statement in the request for contract as to the applicability of the Act. Whenever an acquisition is subject to the Act, the program official prepares a ``system notice'' and has it published in the Federal Register. (See HHS Privacy Act regulation, 45 CFR 5b; FAR Subpart 24.1 and Subpart 324.1.) (viii) Foreign research. All foreign research contract projects to be conducted in a foreign country and financed by HHS funds (U.S. dollars) must have clearance by the Department of State with respect to consistency with foreign policy objectives. This clearance should be obtained prior to negotiation. Procedures for obtaining this clearance are set forth in the HHS General Administration Manual, Chapter 20-60. (5) Identification and disposition of data. Identification of the data expected to be generated by the acquisition and an indication of whether the data are to be delivered to the Department or to be retained by the contractor. The project officer must also include information relative to the use, maintenance, disclosure, and disposition of data. The project officer must include a statement as to whether or not another acquisition, based upon the data generated by the proposed acquisition, is anticipated. (6) Government property. If known, the type of Government property, individual items, and quantities of Government property to be furnished to, or allowed to be acquired by, the resultant contractor. The project officer must specify when the Government property is to be made available. Refer to HHS Publication (OS) 686, ``Contractor's Guide for Control of Government Property (1990).'' (7) Special terms and conditions. Any suggested special terms and conditions not already covered in the statement of work or the applicable contract general provisions. (8) Justification for other than full and open competition. If the proposed acquisition is to be awarded using other than full and open competition, a justification prepared in accordance with FAR Subpart 6.3 and Subpart 306.3. 307.7106 Statement of work. (a) General. A statement of work (SOW) differs from a specifications and purchase description primarily in that it describes work or services to be performed in reaching an end result rather than a detailed, well defined description or specification of the end product. The SOW may enumerate or describe the methods (statistical, clinical, laboratory, etc.) that will be used. However, it is preferable for the offeror to propose the method of performing the work. The SOW should specify the desired results, functions, or end items without telling the offeror what has to be done to accomplish those results unless the method of performance is critical or required for the successful performance of the contract. The SOW should be clear and concise and must completely define the responsibilities of the Government and the contractor. The SOW should be worded so as to make more than one interpretation virtually impossible because it has to be read and interpreted by persons of varied backgrounds, such as attorneys, contracting personnel, cost estimators, accountants, scientists, educators, functional specialists, etc. The SOW must clearly define the obligations of both the contractor and the Government so as to protect the interests of both. Ambiguous statements of work can create unsatisfactory performance, delays, and disputes, and can result in higher costs. (b) Term (level of effort) vs. completion work statement. Careful distinctions must be drawn between term (level of effort) SOWs, which essentially require the furnishing of technical effort and a report thereof, and completion type work statements, which require development of tangible items designed to meet specific performance characteristics. (See FAR 16.306(d) for distinction). (1) Term (or level of effort). A term or level of effort type SOW is appropriate to research where one seeks to discover the feasibility of later development, or to gather general information. A term or level of effort type SOW may only specify that some number of labor-hours [[Page 1355]] be expended on a particular course of research, or that a certain number of tests be run, without reference to any intended conclusion. (2) Completion. A completion type SOW is appropriate to development work where the feasibility of producing an end item is already known. A completion type SOW may describe what is to be achieved through the contracted effort, such as development of new methods, new end items, or other tangible results. (c) Phasing. Individual research, development, or demonstration projects frequently lie well beyond the present state of the art and entail procedures and techniques of great complexity and difficulty. Under these circumstances, a contractor, no matter how carefully selected, may be unable to deliver the desired result. Moreover, the job evaluating the contractor's progress is often difficult. Such a contract is frequently phased and often divided into stages of accomplishment, each of which must be completed and approved before the contractor may proceed to the next. Phasing makes it necessary to develop methods and controls, including reporting requirements for each phase of the contract and criteria for evaluation of the report submitted, that will provide, at the earliest possible time, appropriate data for making decisions relative to future phases. A phased contract may include stages of accomplishment such as research, development, and demonstration. Within each phase, there may be a number of tasks which should be included in the SOW. When phases of work can be identified, the SOW will provide for phasing and the request for proposals will require the submission of proposed costs by phases. The resultant contract will reflect costs by phases, require the contractor to identify incurred costs by phases, establish delivery schedules by phase, and require the written acceptance of each phase. The provisions of the Limitation of Cost clause shall apply to the estimated cost of each phase. Contractors shall not be allowed to incur costs for phases which are dependent upon successful completion of earlier phases until written acceptance of the prior work is obtained from the contracting officer. (d) Elements of the SOW. The elements of the SOW will vary with the objective, complexity, size, and nature of the acquisition. In general, it should cover the following matters as appropriate. (1) A general description of the required objectives and desired results. Initially, a broad, nontechnical statement of the nature of the work to be performed. This should summarize the actions to be performed by the contractor and the results that the Government expects. (2) Background information helpful to a clear understanding of the requirements and how they evolved. Include a brief historical summary as appropriate and the relationship to overall program objectives. (3) A detailed description of the technical requirements. A comprehensive description of the work to be performed to provide whatever details are necessary for prospective offerors to submit meaningful proposals. (4) Subordinate tasks or types of work. A listing of the various tasks or types of work (it may be desirable in some cases to indicate that this is not all-inclusive). The degree of task breakout is directly dependent on the size and complexity of the work to be performed and the logical groupings. A single cohesive task should not be broken out merely to conform to a format. Indicate whether the tasks are sequential or concurrent for offeror planning purposes. (5) Reference material. All reference material to be used in the conduct of the project that tells how the work is to be carried out must be identified. Applicability should be explained, and a statement made as to where the material can be obtained. (6) Level of effort. When a level of effort is required, the number and type of personnel required should be stated. If known, the type and degree of expertise should be specified. (7) Special requirements. (as applicable). An unusual or special contractual requirement, which would impact on contract performance, should be included as a separate section. (8) Deliverables reporting requirements. All deliverables and/or reports must be clearly and completely described. 307.7101 Review. Upon receipt of the RFC, the contracting officer shall review its contents to ensure that all pertinent information has been provided by the program office and that it includes an acceptable SOW. If pertinent information is missing or the SOW is inadequate, the contracting officer shall obtain or clarify the information as soon as possible so that the acquisition schedule can be met. If the program office delays furnishing the information or clarification, the contracting officer should notify the head of the sponsoring program office, in writing, of the possible slippage in the acquisition schedule and the need for an expeditious remedy. The contracting officer should also notify the chief of the contracting office. A program office's or project officer's continued failure to adhere to agreed on milestones should also be reported to the head of the contracting activity. PART 309--CONTRACTOR QUALIFICATIONS Subpart 309.4--Debarment, Suspension, and Ineligibility Sec. 309.403 Definitions. 309.404 List of parties excluded from Federal procurement and nonprocurement programs. 309.405 Effect of listing. 309.406 Debarment. 309.406-3 Procedures. 309.407 Suspension. 309.407-3 Procedures. 309.470 Reporting of suspected causes of debarment, suspension, or the taking of evasive actions. 309.470-1 Situations where reports are required. 309.470-2 Contents of reports. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 309.4--Debarment, Suspension, and Ineligibility 309.403 Definitions. Acquiring agency's head or designee, as used in the FAR, shall mean, unless otherwise stated in this subpart, the head of the contracting activity. Acting in the capacity of the acquiring agency's head, the head of the contracting activity may make the required justifications or determinations, and take the necessary actions, specified in FAR 9.405, 9.406 and 9.407 for his or her respective activity, but only after obtaining the approval of the debarring or suspending official, as the case may be. Debarring official means the Assistant Secretary for Management and Budget, or his/her designee. Initiating official means either the contracting officer, the head of the contracting activity, the Deputy Assistant Secretary for Grants and Acquisition Management, or the Inspector General. Suspending official means the Assistant Secretary for Management and Budget, or his/her designee. 309.304 List of parties excluded from Federal procurement and nonprocurement programs. (c) The Office of Grants and Acquisition Management (OGAM) shall perform the actions required by FAR 9.404(c). (4) OGAM shall maintain all documentation submitted by the [[Page 1356]] initiating official recommending the debarment or suspension action and all correspondence and other pertinent documentation generated during the OGAM review. 309.405 Effect of listing. (a) The head of the contracting activity (HCA) (not delegable) may, with the concurrence of the debarring or suspending official, make the determinations referenced in FAR 9.405(a), regarding contracts for their respective activities. (1) If a contracting officer considers it necessary to award a contract, or consent to a subcontract with a debarred or suspended contractor, the contracting officer shall prepare a determination, including all pertinent documentation, and submit it through acquisition channels to the head of the contracting activity. The documentation must include the date by which approval is required and a compelling reason for the proposed action. Some examples of circumstances that may constitute a compelling reason for the award to, or consent to a subcontract with, a debarred or suspended contractor include: (i) The property or services to be acquired are available only from the listed contractor; (ii) The urgency of the requirement dictates that the Department deal with the listed contractor; or (iii) There are other compelling reasons which require business dealings with the listed contractor. (2) If the HCA decides to approve the requested action, he/she shall request the concurrence of the debarring or suspending official and, if given, shall inform the contracting officer in writing of the decision within the required time period. 309.406 Debarment. 309.406-3 Procedures. (a) Investigation and referral. Whenever an apparent cause for debarment becomes known to an initiating official, that person shall prepare a report incorporating the information required by 309.470-2, if known, and forward it through appropriate channels with a written recommendation, to the debarring official. Contracting officers shall forward their reports in accordance with 309.470-1. The debarring official shall initiate an investigation through such means as he/she deems appropriate. (b) Decisionmaking process. The debarring official shall review the results of the investigation, if any, and make a written determination whether or not debarment procedures are to be commenced. A copy of the determination shall be promptly sent through appropriate channels to the initiating official, and the contracting officer, if necessary. If the debarring official determines to commence debarment procedures, he/ she shall, after consultation with the Office of the General Counsel, notify the contractor in accordance with FAR 9.406-3(c). If the proposed action is not based on a conviction or judgement and the contractor's submission in response to the notice raises a genuine dispute over facts material to the proposed debarment, the debarring official shall arrange for fact-finding hearings and take the necessary action specified in FAR 406-3(b)(2). The debarring official shall also ensure that written findings of facts are prepared, and shall base the debarment decisions on the facts as found, after considering information and argument submitted by the contractor and any other information in the administrative record. The Office of the General Counsel shall represent the Department at any fact-finding hearing and may present witnesses for HHS and question any witnesses presented by the contractor. 309.407 Suspension. 309.407-3 Procedures. (a) Investigation and referral. Whenever an apparent cause for suspension becomes known to an initiating official, that person shall prepare a report incorporating the information required by 309.470-2, if known, and forward it through appropriate channels, with a written recommendation, to the suspending official. Contracting officers shall forward their reports in accordance with 309.470-1. The suspending official shall initiate an investigation through such means as he/she deems appropriate. (b) Decisionmaking process. The suspending official shall review the results of the investigation, if any, and make a written determination whether or not suspension should be imposed. A copy of this determination shall be promptly sent through appropriate channels to the initiating official and the contracting officer, if necessary. If the suspending official determines to impose suspension, he/she shall, after consultation with the Office of the General Counsel, notify the contractor in accordance with FAR 9.407-3(c). If the action is not based on an indictment, and, subject to the provisions of FAR 9.407-3(b)(2), the contractor's submission in response to the notice raises a genuine dispute over facts material to the suspension, the suspending official shall, after suspension has been imposed, arrange for fact-finding hearings and take the necessary actions specified in FAR 9.407-3(b)(2). 309.470 Reporting of suspected causes for debarment or suspension, or the taking of evasive actions. 309.470-1 Situations where reports are required. A report incorporating the information required by 309.470-2 shall be forwarded, in duplicate, by the contracting officer through acquisition channels to OGAM when: (a) A contractor has committed, or is suspected of having committed, any of the acts described in FAR 9.406-2 or FAR 9.407-2; or (b) A contractor is suspected of attempting to evade the prohibitions of debarment or suspension imposed under this regulation, or any other comparable regulation, by changes of address, multiple addresses, formation of new companies, or by other devices. 309.470-2 Contents of reports. Each report prepared under 309.470-1 shall be coordinated with the Office of the General Counsel and shall include the following information, where available: (a) Name and address of contractor. (b) Name of the principal officers, partners, owners, or managers. (c) All known affiliates, subsidiaries, or parent firms, and the nature of the affiliation. (d) Description of the contract or contracts concerned, including the contract number, and office identifying numbers or symbols, the amount of each contract, the amount paid the contractor and the amount still due, and the percentage of work completed and to be completed. (e) The status of vouchers. (f) Whether contract funds have been assigned pursuant to the Assignment of Claims Act, as amended, (31 U.S.C. 3727, 41 U.S.C. 15), and, if so assigned, the name and address of the assignee and a copy of the assignment. (g) Whether any other contracts are outstanding with the contractor or any affiliates, and, if so, the amount of the contracts, whether these funds have been assigned pursuant to the Assignment of Claims Act, as amended, (31 U.S.C. 3727, 41 U.S.C. 15), and the amounts paid or due on the contracts. (h) A complete summary of all available pertinent evidence. (i) A recommendation as to the continuation of current contracts. [[Page 1357]] (j) An estimate of damages, if any, sustained by the Government as a result of the action of the contractor, including an explanation of the method used in making the estimate. (k) The comments and recommendations of the contracting officer and statements regarding whether the contractor should be suspended or debarred, whether any limitations should be applied to the action, and the period of any proposed debarment. (l) As an enclosure, a copy of the contract(s) or pertinent excerpts therefrom, appropriate exhibits, testimony or statements of witnesses, copies of assignments, and other relevant documentation or a written summary of any information for which documentation is not available. PART 313--SIMPLIFIED ACQUISITION PROCEDURES Subpart 313.3--Simplified Acquisition Methods Sec. 313.303 Blanket purchase agreements (BPAs). 313.303-5 Purchases under BPAs. 313.305 Imprest funds and third party drafts. 313.305-1 General. 313.306 SF 44, Purchase Order--Invoice--Voucher. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 313.3--Simplified Acquisition Methods. 313.303 Blanket Purchase Agreements (BPAs). 313.303-5 Purchase under BPAs. (e)(5) Delivery documents, invoices, etc., signed by the Government employee receiving the item or service will be forwarded to the fiscal office or other paying office as designated by the OPDIV. Payment will be made on the basis of the signed document, invoice, etc. Contracting offices will ensure that established procedures allowing for availability of funds are in effect prior to placement of orders. 313.305 Imprest funds and third party drafts. 313.305-1 General. Requests to establish imprest funds shall be made to the responsible fiscal office. At larger activities where the cashier may not be conveniently located near the purchasing office, a Class C Cashier may be installed in the purchasing office. Documentation of cash purchases shall be in accordance with instructions contained in the HHS Voucher Audit Manual Part 1, Chapter 1-10. 313.306 SF 44, Purchase Order--Invoice--Voucher. (d) Since the Standard Form (SF) 44 is an accountable form, a record shall be maintained of serial numbers of the form, to whom issued, and date issued. SF 44's shall be kept under adequate lock and key to prevent unauthorized use. A reservation of funds shall be established to cover total anticipated expenditures prior to use of the SF 44. PART 314--SEALED BIDDING Subpart 314.2--Solicitation of Bids Sec. 314.202 General rules for solicitation of bids. 314.202-7 Facsimile bids. 314.213 Annual submission of representations and certifications. Subpart 314.4--Opening of Bids and Award of Contract 314.404 Rejection of bids. 314.404-1 Cancellation of invitations after opening. 314.407 Mistakes in bids. 314.407-3 Other mistakes disclosed before award. 314.407-4 Mistakes after award. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 314.2--Solicitation of Bids 314.202 General rules for solicitation of bids. 314.202-7 Facsimile bids. If the head of the contracting activity (HCA) (not delegable) has determined that the contracting activity will allow use of facsimile bids and proposals, the HCA shall prescribe internal procedures, in accordance with the FAR, to ensure uniform processing and control. 314.213 Annual submission of representations and certifications. Each HCA (not delegable) shall determine whether the contracting activity will allow use of the annual submission of representations and certifications by bidders. Subpart 314.4--Opening of Bids and Award of Contract 314.404 Rejection of bids. 314.404-1 Cancellation of invitations after opening. (c) The chief of the contracting office (CCO) (not delegable) shall make the determination required by FAR 14.404-1(c). 314.407 Mistakes in bids. 314.407-3 Other mistakes disclosed before award. (e) Authority has been delegated to the Departmental Protest Control Officer, Office of Acquisition Management, Office of Grants and Acquisition Management to make administrative determinations in connection with mistakes in bid alleged after opening and before award. This authority may not be redelegated. (f) Each proposed determination shall have the concurrence of the Chief, Business Law Branch, Business and Administrative Law Division, Office of General Counsel. (i) Doubtful cases shall not be submitted by the contracting officer directly to the Comptroller General, but shall be submitted to the Departmental Protest Control Officer. 314.407-4 Mistakes after award. (c) Authority has been delegated to the Departmental Protest Control Officer to make administrative determinations in connection with mistakes in bid alleged after award. This authority may not be redelegated. (d) Each proposed determination shall have the concurrence of the Chief, Business Law Branch, Business and Administrative Law Division, Office of General Counsel. PART 315--CONTRACTING BY NEGOTIATION Subpart 315.2--Solicitation and Receipt of Proposals and Information Sec. 315.204 Contract format. 315.204-5 Part IV--Representations and instructions. 315.208 Submission, modification, revision, and withdrawal of proposals. 315.209 Solicitation provisions and contract clauses. Subpart 315.3--Source Selection 315.305 Proposal evaluation. 315.306 Exchanges with offerors after receipt of proposals. 315.307 Final proposal revisions. 315.370 Finalization of details with the selected source. 315.371 Contract preparation and award. 315.372 Preparation of negotiation memorandum. Subpart 315.4--Contract Pricing 315.404 Proposal analysis. 315.404-2 Information to support proposal analysis. 315.404-4 Profit. Subpart 315.6--Unsolicited Proposals 315.605 Content of unsolicited proposals. 315.606 Agency procedures. 315.606-1 Receipt and initial review. 315.609 Limited use of data. Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). [[Page 1358]] Subpart 315.2--Solicitation and Receipt of Proposals and Information 315.204 Contract format. 315.204-5 Part IV--Representations and instructions. (a) Section K, Representations, certifications, and other statements of offerors. (1) This section shall begin with the following and continue with the applicable representations and certifications: To Be Completed by the Offeror: (The Representations and Certifications must be executed by an individual authorized to bind the offeror.) The offeror makes the following Representations and Certifications as part of its proposal (check or complete all appropriate boxes or blanks on the following pages). (Name of Offeror)------------------------------------------------------ (RFP No.)-------------------------------------------------------------- (Signature of Authorized Individual)----------------------------------- ---------------------------------------------------------------------- (Date)----------------------------------------------------------------- (Typed Name of Authorized Individual)---------------------------------- ---------------------------------------------------------------------- Note: The penalty for making false statements in offers is prescribed in 18 U.S.C. 1001. (c) Section M, Evaluation factors for award. (1) General. (i) The evaluation criteria must be developed by the project officer and submitted to the contracting officer in the request for contract (RFC) for inclusion in the request for proposal (RFP). Development of these criteria and the assignment of the relative importance or weight to each criterion require the exercise of judgement on a case-by-case basis because they must be tailored to the requirements of the individual acquisition. Since the criteria will serve as a standard against which all proposals will be evaluated, it is imperative that they be chosen carefully to emphasize those factors considered to be critical in the selection of a contractor. (ii) The finalized evaluation criteria and indications of their relative importance or weight, as included in the RFP, cannot be changed except by a formal amendment to the RFP issued by the contracting officer. No factors other than those set forth in the RFP shall be used in the evaluation of proposals. (2) Review of evaluation criteria. (i) The evaluation criteria should be reviewed by the contracting officer in terms of the work statement. This review is not intended to dictate technical requirements to the program office or project officer, but rather to ensure that the evaluation criteria are clear, concise, and fair so that all potential offerors are fully aware of the bases for proposal evaluation and are given an equal opportunity to compete. (ii) The project officer and the contracting officer should then review the evaluation criteria together to ascertain the following: (A) The criteria are described in sufficient detail to provide the offerors (and evaluators) with a total understanding of the factors to be involved in the evaluation process; (B) The criteria address the key programmatic concerns which the offerors must be aware of in preparing proposals; (C) The criteria are specifically applicable to the instant acquisition and are not merely restatements of criteria from previous acquisitions which are not relevant to this acquisition; and (D) The criteria are selected to represent only the significant areas of importance which must be emphasized rather than a multitude of factors. (All criteria tend to lose importance if too many are included. Using too many criteria will prove as detrimental as using too few.) (3) Examples of topics that form a basis for evaluation criteria. Typical examples of topics that form a basis for the development of evaluation criteria are listed in the following paragraphs. These examples are intended to assist in the development of actual evaluation criteria for a specific acquisition and should only be used if they are applicable to that acquisition. They are not to be construed as actual examples of evaluation criteria to be included in the RFP. (i) Understanding of the problem and statement of work; (ii) Method of accomplishing the objectives and intent of the statement of work; (iii) Soundness of the scientific or technical approach for executing the requirements of the statement of work (to include, when applicable, preliminary layouts, sketches, diagrams, other graphic representations, calculations, curves, and other data necessary for presentation, substantiation, justification, or understanding of the approach); (iv) Special technical factors, such as experience or pertinent novel ideas in the specific branch of science or technology involved; (v) Feasibility and/or practicality of successfully accomplishing the requirements (to include a statement and discussion of anticipated major difficulties and problem areas and recommended approaches for their resolution); (vi) Availability of required special research, test, and other equipment or facilities; (vii) Managerial capability (ability to achieve delivery or performance requirements as demonstrated by the proposed use of management and other personnel resources, and to successfully manage the project, including subcontractor and/or consultant efforts, if applicable, as evidenced by the management plan and demonstrated by previous experience); (viii) Availability, qualifications, experience, education, and competence of professional, technical, and other personnel, to include proposed subcontractors and consultants (as evidenced by resumes, endorsements, and explanations of previous efforts); and (ix) Soundness of the proposed staff time or labor hours, propriety of personnel classifications (professional, technical, others), necessity for type and quantity of material and facilities proposed, validity of proposed subcontracting, and necessity of proposed travel. (4) Relative importance or weight. (i) A statement or indication of the relative importance or weight must be assigned to each evaluation criterion (significant factor) to inform prospective offerors (and evaluators) of the specific significance of each criterion in comparison to the other criteria. Similarly, if a criterion (factor) is subdivided into parts, each of the parts (subfactors) must be assigned a statement or indication of the relative importance or weight. (ii) Cost or price is not generally included as one of the evaluation criteria and is not assigned an indication of relative importance or weight. However, a statement must be included in the RFP to reflect the relationship of cost or price in comparison to the other criteria. (See FAR 15.304(e)). The contracting officer and project officer should work together in arriving at the final determination regarding the relationship. 315.208 Submission, modification, revision, and withdrawal of proposals. (b) When the head of the contracting activity (HCA) for a health agency determines that certain classes of biomedical or behavioral research and development acquisitions should be subject to conditions other than those specified in FAR 52.215-1(c)(3), the HCA may authorize the use of the provision at 352.215-70 in addition to the provision at FAR 52.215-1. (2) When the provision at 352.215-70 is included in the solicitation and a [[Page 1359]] proposal is received after the exact time specified for receipt, the contracting officer, with the assistance of cost and technical personnel, shall make a written determination as to whether the proposal meets the requirements of the provision at 352.215-70 and, therefore, can be considered. 315.209 Solicitation provisions and contract clauses. (a) Paragraph (e) of the provision at 352.215-1 shall be used in place of that specified at FAR 52.215-1(e). (g) If the head of the contracting activity (HCA)(not delegable) has determined that the contracting activity will allow the use of the annual submission of representations and certifications by offerors, the provisions of FAR 14.213 shall be followed. Subpart 315.3--Source Selection 315.305 Proposal evaluation. (a) (1) Cost or price evaluation. The contracting officer shall evaluate business proposals adhering to the requirements for cost or price analysis included in FAR 15.404. The contracting officer must determine the extent of analysis in each case depending on the amount of the proposal, the technical complexity and related cost or price, and cost realism. The contracting officer should request the project officer to analyze items such as the number of labor hours proposed for various labor categories; the mix of labor hours and categories of labor in relation to the technical requirements of the project; the kinds and quantities of material, equipment, and supplies; types, numbers and hours/days of proposed consultants; logic of proposed subcontracting; analysis of the travel proposed including number of trips, locations, purpose, and travelers; and kinds and quantities of data processing. The project officer shall provide his/her opinion as to whether these elements are necessary and reasonable for efficient contract performance. Exceptions to proposed elements shall be supported by adequate rationale to allow for effective negotiations or award if discussions are not conducted. The contracting officer should also request the assistance of a cost/price analyst when considered necessary. In all cases, the negotiation memorandum must include the rationale used in determining that the price or cost is fair and reasonable. (3) Technical evaluation. (i) Technical evaluation plan. (A) A technical evaluation plan may be required by the contracting officer, at his/her discretion, when an acquisition is sufficiently complex as to warrant a formal plan. (B) The technical evaluation plan should include at least the following: (1) A list of recommended technical evaluation panel members, their organizations, a list of their major consulting clients (if applicable), their qualifications, and curricula vitae (if applicable); (2) A justification for using non-Government technical evaluation panel members. (Justification is not required if non-Government evaluators will be used in accordance with standard contracting activity procedures or policies); (3) A statement that there is no apparent or actual conflict of interest regarding any recommended panel member; (4) A copy of each rating sheet, approved by the contracting officer, to be used to assure consistency with the evaluation criteria; and (5) A brief description of the general evaluation approach. (C) The technical evaluation plan must be signed by an official within the program office in a position at least one level above the project officer, or in accordance with contracting activity procedures. (D) The technical evaluation plan should be submitted to the contracting officer for review and approval before the solicitation is issued. The contracting officer shall make sure that the principal factors relating to the evaluation are reflected in the evaluation criteria when conducting the review of the plan. (ii) Technical evaluation panel. (A) General. (1) A technical evaluation panel is required for all acquisitions applicable to this subpart which are expected to exceed $500,000 and in which technical evaluation is considered a key element in the determination of making an award . The contracting officer has the discretion to require a technical evaluation panel for acquisitions not exceeding $500,000 based on the complexity of the acquisition. (2) The technical evaluation process requires careful consideration regarding the size, composition, expertise, and function of the technical evaluation panel. The efforts of the panel can result in the success or failure of the acquisition. (B) Role of the project officer. (1) The project officer is the contracting officer's technical representative for the acquisition action. The project officer may be a voting member of the technical evaluation panel, and may also serve as the chairperson of the panel, unless he/she is prohibited by law or contracting activity procedures to do so. (2) The project officer is responsible for recommending panel members who are knowledgeable in the technical aspects of the acquisition and who are competent to identify strengths and weaknesses of the various proposals. The program training requirements specified in 307.170 must be adhered to when selecting prospective panel members (government employees). (3) The project officer shall ensure that persons possessing expertise and experience in addressing issues relative to sex, race, national origin, and handicapped discrimination be included as panel members in acquisitions which address those issues. The intent is to balance the composition of the panel so that qualified and concerned individuals may provide insight to other panel members regarding ideas and approaches to be taken in the evaluation of proposals. (4) The project officer is to submit the recommended list of panel members to an official within the program office in a position at least one level above the project officer, or in accordance with contracting activity procedures. This official will review the recommendations and select the chairperson. (5) The project officer shall arrange for adequate and secure working space for the panel. (C) Role of the contracting officer. (1) The term ``contracting officer,'' as used in this subpart, may be the contracting officer or his/her designated representative within the contracting office. (2) The contracting officer shall not serve as a member of the technical evaluation panel but should be available to: (i) Address the initial meeting of the technical evaluation panel; (ii) Provide assistance to the evaluators as required; and (iii) Ensure that the scores adequately reflect the written technical report comments. (D) Conflict of interest. (1) If a panel member has an actual or apparent conflict of interest related to a proposal under evaluation, he/she shall be removed from the panel and replaced with another evaluator. If a suitable replacement is not available, the panel shall perform the review without a replacement. (2) For the purposes of this subpart, conflicts of interest are defined in the Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR 2635), Supplemental Standards of Ethical Conduct for Employees of the [[Page 1360]] Department of Health and Human Services (5 CFR Part 5501), and the Procurement Integrity Act. For outside evaluators serving on the technical evaluation panel, see paragraph (F), (315.305(a)(3)(ii)(F)). (E) Continuity of evaluation process. (1) The technical evaluation panel is responsible for evaluating the original proposals, making recommendations to the chairperson regarding weaknesses and deficiencies of proposals, and, if required by the contracting officer, assisting the contracting officer during communications and discussions, and reviewing supplemental, revised and/or final proposal revisions. To the extent possible, the same evaluators should be available throughout the entire evaluation and selection process to ensure continuity and consistency in the treatment of proposals. The following are examples of circumstances when it would not be necessary for the technical evaluation panel to evaluate revised proposals submitted during the acquisition: (i) The answers to questions do not have a substantial impact on the proposal; (ii) Final proposal revisions are not materially different from the original proposals; or (iii) The rankings of the offerors are not affected because the revisions to the proposals are relatively minor. (2) The chairperson, with the concurrence of the contracting officer, may decide not to have the panel evaluate the revised proposals. Whenever this decision is made, it must be fully documented by the chairperson and approved by the contracting officer. (3) When technical evaluation panel meetings are considered necessary by the contracting officer, the attendance of evaluators is mandatory. When the chairperson determines that an evaluator's failure to attend the meetings is prejudicial to the evaluation, the chairperson shall remove and/or replace the individual after discussing the situation with the contracting officer and obtaining his/her concurrence and the approval of the official responsible for appointing the panel members. (4) Whenever continuity of the evaluation process is not possible, and either new evaluators are selected or a reduced panel is decided upon, each proposal which is being reviewed at any stage of the acquisition shall be reviewed at that stage by all members of the revised panel unless it is impractical to do so because of the receipt of an unusually large number of proposals. (F) Use of outside evaluators. (1) The National Institutes of Health (NIH) and the Substance Abuse and Mental Health Services Administration (SAMHSA) are required to have a peer review of research and development contracts in accordance with Public Law (Pub. L.) 93- 352 as amended by Pub. L. 94-63; 42 U.S.C. 289 1-4. This legislation requires peer review of projects and proposals, and not more than one- fourth of the members of a peer review group may be officers or employees of the United States. NIH and SAMHSA are therefore exempt from the provisions of 315.305(a)(3)(ii) to the extent that 42 U.S.C. 289 1-4 applies. Conflicts of interest are addressed in the Scientific Peer Review of Research Grant Applications and Research and Development Contract Projects (42 CFR Part 52 h). (2) In general, decisions to disclose proposals outside the Government for evaluation purposes shall be made by the official responsible for appointing panel members for the acquisition, after consultation with the contracting officer and in accordance with operating division procedures. The decision to disclose either a solicited or unsolicited proposal outside the Government for the purpose of obtaining an evaluation shall take into consideration the avoidance of organizational conflicts of interest and any competitive relationship between the submitter of the proposal and the prospective evaluator(s). (3) When it is determined to disclose a solicited proposal outside the Government for evaluation purposes, the following or similar conditions shall be included in the written agreement with evaluator(s) prior to disclosure: Conditions for Evaluating Proposals The evaluator agrees to use the data (trade secrets, business data, and technical data) contained in the proposal only for evaluation purposes. The requirement does not apply to data obtained from another source without restriction. Any notice or legend placed on the proposal by either the Department or the submitter of the proposal shall be applied to any reproduction or abstract provided to the evaluator or made by the evaluator. Upon completion of the evaluation, the evaluator shall return the Government furnished copy of the proposal or abstract, and all copies thereof, to the Departmental office which initially furnished the proposal for evaluation. Unless authorized by the Department's initiating office, the evaluator shall not contact the submitter of the proposal concerning any aspects of its contents. The evaluator will be obligated to obtain commitments from its employees and subcontractors, if any, to effect the purposes of these conditions. (iii) Receipt of proposals. (A) After the closing date set by the solicitation for the receipt of proposals, the contracting officer will use a transmittal memorandum to forward the technical proposals to the project officer or chairperson for evaluation. The business proposals will be retained by the contracting officer for evaluation. (B) The transmittal memorandum shall include at least the following: (1) A list of the names of the organizations submitting proposals; (2) A reference to the need to preserve the integrity of the source selection process; (3) A statement that only the contracting officer is to conduct discussions. (4) A requirement for a technical evaluation report in accordance with 315.305(a)(3)(vi); and (5) The establishment of a date for receipt of the technical evaluation report. (iv) Convening the technical evaluation panel. (A) Normally, the technical evaluation panel will convene to evaluate the proposals. However, there may be situations when the contracting officer determines that it is not feasible for the panel to convene. Whenever this decision is made, care must be taken to assure that the technical review is closely monitored to produce acceptable results. (B) When a panel is convened, the chairperson is responsible for the control of the technical proposals provided to him/her by the contracting officer for use during the evaluation process. The chairperson will generally distribute the technical proposals prior to the initial panel meeting and will establish procedures for securing the proposals whenever they are not being evaluated to insure their confidentiality. After the evaluation is complete, all proposals must be returned to the contracting officer by the chairperson. (C) The contracting officer shall address the initial meeting of the panel and state the basic rules for conducting the evaluation. The contracting officer shall provide written guidance to the panel if he/ she is unable to attend the initial panel meeting. The guidance should include: (1) Explanation of conflicts of interest; (2) The necessity to read and understand the solicitation, especially the statement of work and evaluation criteria, prior to reading the proposals; (3) The need for evaluators to restrict the review to only the solicitation and the contents of the technical proposals; (4) The need for each evaluator to review all the proposals; [[Page 1361]] (5) The need to watch for ambiguities, inconsistencies, errors, and deficiencies which should be surfaced during the evaluation process; (6) An explanation of the evaluation process and what will be expected of the evaluators throughout the process; (7) The need for the evaluators to be aware of the requirement to have complete written documentation of the individual strengths and weaknesses which affect the scoring of the proposals; and (8) An instruction directing the evaluators that, until the award is made, information concerning the acquisition must not be disclosed to any person not directly involved in the evaluation process. (v) Rating and ranking of proposals. The evaluators will individually read each proposal, describe tentative strengths and weaknesses, and develop preliminary scores in relation to each evaluation criterion set forth in the solicitation. After this has been accomplished, the evaluators shall discuss in detail the individual strengths and weakness described by each evaluator and, if possible, arrive at a common understanding of the major strengths and weaknesses and the potential for correcting each offeror's weakness(es). Each evaluator will score each proposal, and then the technical evaluation panel will collectively rank the proposals. Generally, ranking will be determined by adding the numerical scores assigned to the evaluation criteria and finding the average for each offeror. The evaluators should then identify whether each proposal is acceptable or unacceptable. Predetermined cutoff scores shall not be employed. (vi) Technical evaluation report. A technical evaluation report shall be prepared and furnished to the contracting officer by the chairperson and maintained as a permanent record in the contract file. The report must reflect the ranking of the proposals and identify each proposal as acceptable or unacceptable. The report must also include a narrative evaluation specifying the strengths and weaknesses of each proposal, a copy of each rating sheet, and any reservations, qualifications, or areas to be addressed that might bear upon the selection of sources for negotiation and award. Concrete technical reasons supporting a determination of unacceptability with regard to any proposal must be included. The report should also include specific points and questions which are to be raised in discussions or negotiations. 315.306 Exchanges with offerors after receipt of proposals. (c) Competitive range. (1) Some of the factors which the contracting officer should consider in determining the competitive range are: (i) The relative importance of cost or price as compared to technical factors; (ii) The susceptibility of significantly reducing a proposal with an unreasonable high price or cost without undermining the technical merit if the offeror otherwise has a reasonable chance to receive an award; and (iii) The likelihood of reducing cost or price of a proposal which exceeds the Government's requirements. (2) The contracting officer shall conduct a thorough review of the technical evaluation report to be assured that: (i) All determinations of unacceptability are supported by concrete and comprehensive statements that are factual and convincing and are consistent with the evaluation criteria set forth in the solicitation. Every statement should be reviewed carefully to eliminate any doubts as to the unacceptability of a proposal; (ii) All recommendations to exclude proposals from the competitive range are supported by persuasive rationale and sufficient facts to substantiate a judgment that meaningful discussions are not possible or there is no reasonable chance of the proposal being selected for award; (iii) Those cases where only one organization is found to be technically acceptable are fully scrutinized; and (iv) Unacceptable proposals contain ``information'' deficiencies which are so material as to preclude any possibility of upgrading the proposal to a competitive level except through major revisions and additions which would be tantamount to the submission of another proposal. (d) Exchanges with offerors after establishment of the competitive range. The contracting officer and project officer should discuss the uncertainties and/or deficiencies that are included in the technical evaluatio [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%3A99-7. Public record. Not legal advice.