# Acquisition Regulations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3AE6-21505 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** December 20, 2006 - **Citation:** 71 FR 76488 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Office of the Secretary 48 CFR Parts 301, 302, 303, 304, 305, 306, 307, 309, 311, 312, 314, 315, 316, 319, 323, 324, 325, 330, 332, 333, 334, 335, 339, 342, 352, and 370 Acquisition Regulations AGENCY: Department of Health and Human Services (HHS). ACTION: Final rule. SUMMARY: The Department of Health and Human Services is amending its acquisition regulations (HHSAR) to make administrative and editorial changes to reflect organizational title changes resulting from Office of the Secretary (OS) and Operating Division (OPDIV) reorganizations and to update or remove outdated text and references. The intent of the final rule is to bring the HHSAR up to date and to make the HHSAR consistent with the latest amendments to the Federal Acquisition Regulations (FAR). DATES: Effective Date: December 20, 2006. FOR FURTHER INFORMATION CONTACT: Katherine Hughes, Office of Acquisition Management and Policy, telephone (202) 690-7079, e-mail: Katherine.Hughes@hhs.gov. SUPPLEMENTARY INFORMATION: A. Background The Department is not making significant amendments to the existing HHSAR. The amendments to the HHSAR concern internal procedural matters which are administrative in nature, and will not have a major effect on the general public or on contractors or offerors supporting the Department. The majority of the amendments address the following: • HHS organizational title changes resulting from agency reorganizations. • Eliminating procedural guidance no longer deemed necessary. • Changing contracting review and approval authorities to situate them at levels more appropriate to simplification, streamlining, and empowerment. • Updating the HHSAR to bring it in line with the latest amendments made to the Federal Acquisition Regulation (FAR). • Clarifying authorities for selecting and terminating Contracting Officers. • Establishing minimum training requirements for certain positions. • Specifically referencing regulations of other Federal agencies. • Updating the text of clauses required to be inserted in solicitations and contracts. B. Comments on the Notice of Proposed Rulemaking The Department published a Notice of Proposed Rulemaking (NPRM) on May 26, 2006 (70 FR 30520). The comment period closed on July 25, 2006. The Department received one comment from the public regarding section 352.270-8. The commenter stated that the Office for Human Research Protections (OHRP), which was cited as an office within the National Institutes of Health (NIH), is now an office in the Office of Public Health and Science (OPHS). Section 352.270-8 has been corrected in this final rule to refer to the new office location. In addition, the Department's internal review of the NPRM has resulted in a number of editorial changes and corrections, none of which are substantive. C. Regulatory Flexibility Act The Department of Health and Human Service certifies this rulemaking 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. ) because it does not impose any new requirements. 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 that 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. D. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the HHSAR do not impose any record keeping or information collection requirements that require approval by the Office of Management and Budget under 44 U.S.C. 3501, et seq. Existing approvals cited in 48 CFR 301.106 remain in effect. The provisions of this regulation are issued under 5 U.S.C. 301; 40 U.S.C. 486(c). E. Administrative Procedure Act Exception This final rule imposes no new burdens on the public and merely updates, corrects, or clarifies existing regulations. Therefore, good cause exists under 5 U.S.C. 553(d) to dispense with the 30-day delay in the effective date requirement, and the Department of Health and Human Services is making the rule effective upon publication in the Federal Register . List of Subjects in 48 CFR Chapter 3 Government procurement. Dated: September 21, 2006. Joe W. Ellis, Assistant Secretary for Administration and Management. Editorial Note: This document was received in the Office of the Federal Register on December 13, 2006. Under the authority of 5 U.S.C. 301; 40 U.S.C. 486(c), the Department of Health and Human Services amends 48 CFR Chapter 3 as set forth below. CHAPTER 3—HEALTH AND HUMAN SERVICES 1. The authority citation for 48 CFR chapter 3, parts 301 through 370 continues to read as follows: Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). PART 301—HHS ACQUISITION REGULATION SYSTEM 2. Revise paragraph (b) of section 301.101 to read as follows: 301.101 Purpose. (b) The HHSAR implements FAR policies and procedures and provides additional policies and procedures that supplement the FAR to satisfy the needs of HHS. 3. Revise section 301.270 to read as follows: 301.270 Executive Committee for Acquisition. (a) The Deputy Assistant Secretary for Acquisition Management and Policy 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 Division of Acquisition Policy (DAP), Agency for Healthcare Research and Quality, Centers for Medicare & Medicaid Services, 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, Division of Acquisition Policy (DAP). All meetings will be held at the call of the Chair, and all activities will be carried out under the direction of the Chair. (c) The purposes of the ECA are to: (1) Advise and assist the Chair on major acquisition policy matters; (2) Review and evaluate the overall effectiveness of existing policies and procedures and the impact of new acquisition policies, procedures, and regulations on current acquisition policies and procedures. (d) The Chair will periodically issue a list of current members and alternates, including each person's name, title, organization, address, telephone number, and e-mail address. ECA members are responsible for apprising the Chair of any changes to the list. 4. Revise section 301.403 to read as follows: 301.403 Individual deviations. Requests for individual deviations to either the FAR or HHSAR shall be prepared in accordance with 301.470 and forwarded to the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP). 5. Revise section 301.404 to read as follows: 301.404 Class deviations. Requests for class deviations to either the FAR or HHSAR shall be prepared in accordance with 301.470 and forwarded to the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP). 6. Amend section 301.470 by revising paragraph (a) to read as follows: 301.470 Procedure. (a) Deviation requests shall be prepared in memorandum form and forwarded through the Head of the Contracting Activity (HCA) to the Director, Division of Acquisition Policy. A deviation may be requested verbally in an exigency situation; however, the request must be confirmed in writing as soon as possible. 7. Amend section 301.602-3 by revising paragraphs (b)(3), (e)(1), and (e)(2) to read as follows: 301.602-3 Ratification of unauthorized commitments. (b) * * * (3) Ratification authority for actions up to $100,000 may be redelegated by the HCA to the chief of the contracting office (CCO). No other redelegations are authorized. (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, a description of the requirement, the estimated or agreed upon price, the funds citation, an explanation of why the contracting office was not used and why the proposed contractor was selected, a list of other sources considered, and a statement as to whether the contractor has commenced work. (2) The Contracting Officer will review the submitted material and prepare it for ratification if it is determined that the commitment is 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. 8. Revise section 301.603 and 301.603-1 to read as follows: 301.603 Selection, appointment, and termination of appointment of Contracting Officers/Contract Specialists. 301.603-1 General. (a) The appointment, selection, and termination of appointment of Contracting Officers/Contract Specialists shall be made by the HCA. This authority is not delegable. The procedures for the selection and appointment of Contracting Officers/Contract Specialists shall apply to anyone seeking a Contracting Officer warrant. OPDIV procedures shall be followed in the appointment and termination of Contracting Officers/Contract Specialists in offices that have Contracting Officers/Contract Specialists with dual signature warrants. (b) Standard Form (SF) 1402, “Certificate of Appointment,” shall be used to appoint personnel in the 1102 series as Contracting Officers. It shall also be used for personnel in any other series who will obligate the Government to the expenditure of funds in excess of the micro-purchase threshold. The SF 1402 shall indicate the Contracting Officer's warrant level and threshold and any other limitations. The HCA may determine an alternate appointment document for appointments at or below the micropurchase threshold level. Contracting Officer warrants will be issued to civil service personnel only. A delegation of procurement authority shall be set forth in a memorandum that describes the spending limits and authority. 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 at the appropriate level as a prerequisite to being appointed as a Contracting Officer with authority to obligate funds in excess of the micro-purchase threshold (see 301.603-72). The HCA will determine and require training for individuals appointed as Contracting Officers/Contract Specialists at dollar levels below the micropurchase threshold. Individuals selected for Contracting Officer warrant authority must meet the education, training, and experience requirements that are established for the warrant level. An individual shall be appointed as a Contracting Officer only in instances where a valid organizational need is 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. (d) Contracting Officers (GS-1102's) shall not sign contracts or modifications to contracts which will result in the total amount of the contract exceeding their delegated warrant authority (as specified on the SF-1402). This includes Indefinite Delivery Indefinite Quantity (IDIQ) contracts. However, orders placed against an IDIQ may be issued by Contracting Officers up to their delegated authority provided that each order is separate and distinct. (e) Employees delegated warrant authority are the only individuals legally authorized to bind the Government by executing contracts or signing determinations and findings required by the FAR. The amount specified on the warrant shall cover the estimated maximum contract amount, including all option periods. For example, an employee with a $500,000 Contracting Officer Certificate of Appointment may not award a contract for a base year of $300,000 if the contract includes a one-year option for an additional $300,000. In this case, the total contract amount, including options, exceeds the amount stipulated in the warrant. If a warrant is limited to $500,000 (for example), the holder may not sign a contract for more than that amount, even if the additional amount is subject to the availability of funds. Contracting Officers with higher warrant levels may sign the action when modifications to orders and contracts make the total amount of the contract exceed the Contracting Officer's warrant limitation. 9. Revise section 301.603-2 to read as follows: 301.603-2 Selection of Contracting Officers. When it has been determined that the appointment is in the best interest of the OPDIV and/or Department and there is a demonstrated need for the procurement authority requested, nominations for appointment of Contracting Officers shall be submitted to the HCA through appropriate organizational channels for review. The HCA is responsible for appointing Contracting Officers in accordance with FAR 1.603. This authority is not delegable. The HCA will determine the documentation required, consistent with FAR 1.603-2, when the resulting appointment and authority will not exceed the micropurchase threshold. 10. Revise section 301.603-3 to read as follows: 301.603-3 Appointment of Contracting Officers. (a) Appointing officials must ensure that a warrant candidate meets the experience and education/training requirements listed in 301.603-72. (b) If it is essential to appoint an individual who does not fully meet the certification requirements for the Contracting Officer authority sought, an interim appointment may be granted by the HCA. HCAs are responsible for ensuring that training requirements are met within the specified time frame. Interim appointments may not exceed one year in total, and shall not be granted unless the individual can meet the certification requirements within one year from the date of appointment. The HCA may extend an interim appointment by granting additional time to complete the requirements of a permanent appointment. If the certification requirements are not completed by the extended date, the appointment will automatically terminate. 11. Revise section 301.603-4 to read as follows: 301.603-4 Termination or revocation of a Contracting Officer's appointment. Termination or revocation of Contracting Officer appointments shall be accomplished in accordance with FAR 1.603-4. 12. Revise section 301.603-70 to read as follows: 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 that 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 preestablished mechanisms. Ordering officials, including those under the National Institutes of Health's (NIH) Delegated Acquisition Program (DELPRO), are not Contracting Officers. 13. Add sections 301.603-71 through 301.603-76 to subpart 301.6 to read as follows: Subpart 301.6—Career Development, Contracting Authority, and Responsibilities 301.603-71 Waivers to warrant standards. 301.603-72 Training and certification requirements for Contracting Officers/Contract Specialists. 301.603-73 Earned value training requirement for Contracting Officers/Contract Specialists who administer an IT contract. 301.603-74 Training policy exception. 301.603-75 Training requirement for purchase cardholders, Approving Officials (AOs), and Agency/Organization Program Coordinators (A/OPCs). 301.603-76 Requirement for certification retention and maintaining currency of acquisition knowledge and skills for Contracting Officers/Contract Specialists and purchasing agents. Subpart 301.6—Career Development, Contracting Authority, and Responsibilities 301.603-71 Waivers to warrant standards. There may be an unusual circumstance that requires delegation of a warrant to an employee who does not meet the warrant standards in of the HHS Contracting Officer Warrant Program. Any requests for waivers requesting deviations from the requirements and policies of the HHS Contracting Officer Warrant Program shall be sent in writing to the SPE for approval. The SPE will either approve or disapprove in writing the request for a waiver to the warrant standards. The SPE may grant waivers on a case-by-case basis in unique situations only. 301.603-72 Training and certification requirements for Contracting Officers/Contract Specialists. (a) Federal Acquisition Certification in Contracting (FAC-C) certification is not mandatory for all GS-1102s; however, members of the workforce issued new Contracting Officer (CO) warrants on or after January 1, 2007, regardless of GS series, must be certified at an appropriate level to support their warrant obligations, pursuant to agency policy. New CO warrants are defined in OFPP Policy Letter 05-01 as warrants issued to employees for the first time at a department or agency. FAC-C certification does not apply to: (1) Senior level officials responsible for delegating procurement authority; (2) Non-1102s whose warrants are generally used to procure emergency goods and services; or (3) Non-1102s whose warrants are so limited as to be outside the scope of this program, as determined by the Chief Acquisition Officer (CAO). (b) HHS requires a senior level FAC-C certification for any employee issued an unlimited Contracting Officer's warrant on or after January 1, 2007. (c) Achievement of the FAC-C is based on three requirements: education, training, and experience, and the requirements are cumulative, (i.e., a person must meet the requirements of each previous certification level). (d) FAC-C training requirements are as follows: (1) FAC-C Level I: (i) CON 100 Shaping Smart Business Arrangements. (ii) CON 110 Mission Support Planning. (iii) CON 111 Mission Strategy Execution. (iv) CON 112 Mission Performance Assessment. (v) CON 120 Mission Focused Contracting. (vi) 1 Elective. (2) FAC-C Level II: (i) CON 202 Intermediate Contracting. (ii) CON 204 Intermediate Contract Pricing. (iii) CON 210 Government Contract Law. (iv) 2 Electives. (3) FAC-C Level III: (i) CON 353 Advanced Business Solutions for Mission Support. (ii) 2 Electives. (e) Those conducting simplified acquisitions from $2,500 to $100,000 will need to be issued an HHS Simplified Acquisition Certificate. Required training is as follows: (1) HHS Simplified Acquisition Certificate A: (ii) Basic Simplified Acquisition Procedures/DAU's CON 237. (iii) Advanced Simplified Acquisition Procedures or Appropriations Law. (2) HHS Simplified Acquisition Certificate B: (i) Basic Simplified Acquisition Procedures/DAU's CON 237. (ii) Advanced Simplified Acquisition Procedures or Appropriations Law. (iii) CON 100 (Shaping Smart Business Arrangements). (iv) CON 110 (Mission Support Planning). (f) For additional information, see http://www.knownet.hhs.gov/acquisition/careerhandbookver.1.0.doc. 301.603-73 Earned value training requirement for Contracting Officers/Contract Specialists who administer an IT contract. All GS-1102s who administer an IT contract, regardless of dollar threshold, are required to successfully complete the Department's (offered through HHS University) one-day course entitled “Early Warning Project Management Systems Workshop,” or an equivalent Earned Value training course. Determination of course equivalency shall be made jointly by the Office of Acquisition Management and Policy/ASAM and the HHS Office of the Chief Information Officer. 301.603-74 Training policy exception. In the event there is an urgent requirement for a Contracting Officer/Contract Specialist to award or administer an IT contract, and the Earned Value training requirement has not been met, the HCA (not delegable) may waive the training requirement and authorize the individual to perform the job duties, provided that the individual attends the next scheduled “Early Warning Project Management System Workshop” course, or an equivalent Earned Value course. 301.603-75 Training requirement for purchase cardholders, Approving Officials (AOs), and Agency/Organization Program Coordinators (A/OPCs). Training requirements for purchase cardholders, AOs, and A/OPCs are listed in the following table: Authority a Program participant Required training b Up to $2,500 Prospective/newly appointed purchase cardholders and Approving Officials Basic purchase card course (HHS University 1-day course) or an equivalent course that has been approved by the HHS Acquisition Training Coordinator prior to appointment. Training will include green-purchasing and Section 508 requirements. Purchase card holders and Approving Officials Refresher purchase card training, including green-purchasing training and Section 508 training, every 2 years. $2,501 to $25,000 Prospective/newly appointed purchase cardholders and Approving Officials • Basic Purchase Card course. • Basic Simplified Acquisition Procedures/DAU's CON 237. • Advanced Simplified Acquisition Procedures or Appropriations Law. Purchase card holders and Approving Officials Refresher purchase card training, including green-purchasing training and Section 508 training, every 2 years. $25,001 to $100,000 Prospective/newly appointed purchase cardholders and Approving Officials • Basic Purchase Card course. • Basic Simplified Acquisition Procedures/DAU's CON 237. • Advanced Simplified Acquisition Procedures or Appropriations Law. • CON 100 (Shaping Smart Business Arrangements). • CON 110 (Mission Support Planning). Purchase cardholders and Approving Officials Refresher purchase card training, including green-purchasing training and Section 508 training, every 2 years. Not applicable Prospective/newly appointed Agency/Organization Program Coordinators Basic Purchase Card course, Basic Simplified Acquisition Procedures or DAU's CON 237, Advanced Simplified Acquisition Procedures or Appropriations Law, CON 100 (Shaping Smart Business Arrangements), and CON 110 (Mission Support Planning). Agency/Organization Program Coordinators Refresher purchase card training, including green-purchasing training and Section 508 training, every 2 years (attendance at GSA's annual training conference satisfies refresher training). a Cardholders and Approving Officials with authorized increases in DPA have up to 6 months to complete the training requirements for the new DPA. b CON 237, CON 100, and CON 110 are available at the DAU Web site at http://www.dau.mil/registrar/enroll.asp . CON 100 is also offered through HHS University (see Web site at: http://learning.hhs.gov ). 301.603-76 Requirement for certification retention and maintaining currency of acquisition knowledge and skills for Contracting Officers/Contract Specialists and purchasing agents. To maintain a FAC-C, GS-1102s, including all warranted Contracting Officers regardless of series, shall earn 80 continuous learning points (CLPs) every two years beginning January 1, 2008. For GS-1105s and GS-1106s, a minimum of forty (40) hours (or continuous learning points) is required every two years after all mandatory training requirements have been met. Certification will expire if the CLPs are not earned every two years, and may result in a loss of warrant authority. PART 302—DEFINITIONS OF WORDS AND TERMS 14. Revise section 302.101 to read as follows: 302.101 Definitions. Agency head or head of the Agency , unless otherwise specified, means the head of the Operating Division (OPDIV) for Agency for Healthcare Research and Quality (AHRQ), Centers for Disease Control and Prevention (CDC), Centers for Medicare & Medicaid Services (CMS), Food and Drug Administration (FDA), Health Resources and Services Administration (HRSA), Indian Health Service (IHS), National Institutes of Health (NIH), Substance Abuse and Mental Health Services (SAMHSA), and the Deputy Secretary for the Office of the Secretary (OS). Chief of the Contracting Office (CCO) is typically a mid-level management official, usually an office director, division director, or branch chief, who manages and monitors the daily contract operations of an OPDIV or major component of an OPDIV. The CCO is subordinate to the Head of Contracting Activity (HCA), except where the HCA and CCO are the same individual. Head of the contracting activity (HCA)— (1) Occupies designated organization positions as follows: ASAM-OS —Deputy Assistant Secretary for Acquisition Management and Policy AHRQ —Director, Division of Contracts Management CMS —Director, Office of Acquisition and Grants Management PSC —Director, Division of Acquisition Management CDC —Director, Procurement and Grants Office FDA —Director, Office of Acquisitions & Grant Services HRSA —Director, Division of Procurement Management IHS —Director, Division of Acquisition Policy NIH —Director, Office of Acquisition Management and Policy SAMHSA —Director, Division of Contracts Management (2) 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. (3) 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, HCAs 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. Project Officer is a Federal employee who monitors contractor performance and provides technical guidance to the Contract Specialist/Contracting Officer. The Project Officer serves as the Contract Specialist/Contracting Officer's authorized representative to monitor specific aspects of the contract, thereby ensuring that the contractor's performance meets the standards set forth in the contract, the technical requirements under the contract are met by the delivery date(s) and/or within the period of performance, and performance is accomplished within the price or estimated cost stated in the contract. A Project Officer is required to comply with HHS Project Management Certification Program training requirements. The term “Project Officer” is synonymous with Contracting Officer's Representative (COR) and Contracting Officer's Technical Representative (COTR). 15. Revise section 302.201 to read as follows: 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) In accordance with 52.202-1(a)(1), paragraph (a) at 352.202-1 shall be used in place of paragraph (a) of the FAR clause. (b) In accordance with 52.202-1(a)(1), 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. This is an authorized deviation. PART 303—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST 16. Revise section 303.101-3 to read as follows: 303.101-3 Agency regulations. (a)(3) The Department of Health and Human Services' Standards of Conduct are prescribed in 45 CFR part 73. 17. Revise paragraph (a)(2)(i) of section 303.104-7 to read as follows: 303.104-7 Violations or possible violations of the Procurement Integrity Act. (a) * * * (2) * * * (i) Refer the matter immediately to the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP), Assistant Secretary for Administration and Management, Office of the Secretary, for review, which may consult with the Office of General Counsel (OGC) and the Office of Inspector General (OIG), as appropriate; and 18. Revise section 303.303 to read as follows: 303.303 Reporting suspected antitrust violations. (h) A copy of the agency report of suspected antitrust violations submitted to the Attorney General by the HCA shall also be submitted to the Director, Office of Acquisition Management and Policy. 19. Revise section 303.405 to read as follows: 303.405 Misrepresentations or violations of the Covenant Against Contingent Fees. (a) Reports shall be made promptly to the Contracting Officer. (b)(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 and Policy. 20. Revise section 303.704 to read as follows: 303.704 Policy. (a) For purposes of implementing FAR subpart 3.7, the authorities granted to the “agency head or designee” shall be exercised by the HCA (not delegable). PART 304—ADMINISTRATIVE MATTERS 21. Revise section 304.602 to read as follows: 304.602 Federal Procurement Data System—Next Generation (FPDS-NG). The Departmental Contracts Information System (DCIS) represents the Department's implementation of the FPDS-NG. All departmental contracting activities are required to use the DCIS and follow the procedures stated in the Enhanced Departmental Contracts Information System Manual, available at http://dcis.hhs.gov , and amendments to the manual. 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 contracts and contract modifications awarded in the previous month. 22. Amend 304.804-70 by revising paragraphs (a) and (b)(1) to read as follows: 304.804-70 Contract closeout audits. (a) Contracting Officers shall rely, to the maximum extent possible, on 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 paragraph (b) of this section. (b) * * * (1) The Office of the Inspector General (OIG) and ASAM's Deputy Assistant Secretary for Acquisition Management and Policy in conjunction with the OPDIV's cost advisory/audit focal point, determine which contracts or contractors will be audited, which audit agency will perform the audit, and the type and scope of closeout audit to be performed. 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 OPDIV's cost advisory/audit focal point. 23. Revise paragraphs (b)(3), (b)(6), and (e) of section 304.7001 to read as follows: 304.7001 Numbering acquisitions. (b) * * * (3) The three digit numeric identification code assigned by the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP) to the contracting office within the servicing agency; (6) A one digit code describing the type of contract action: A Commercial Item Acquisition C New Definitive Contract P Purchase Using Simplified Acquisition I Indefinite Delivery Contract (IDIQ) O Basic Ordering Agreement (BOA) B Blanket Purchase Agreement (BPA) F Facilities Contract U Contracts placed with or through other Government departments, GSA contracts, or against mandatory source contracts such as the National Industries for the Blind (NIB), the National Industries for the Severely Handicapped (NISH), and the Federal Prison Industries (UNICOR) L Lease Agreement W Government-wide Acquisition Contract (GWAC) E Letter Contract G Federal Supply Schedule M Micropurchase For example, the first contract for NIH, National Cancer Institute, for fiscal year 2005 may be numbered HHSN261200500001C. (e) Assignment of identification codes. Each contracting office of the Department shall be assigned a three digit identification code by the ASAM/OAMP. Requests for the assignment of codes for newly established contracting offices shall be submitted by a headquarters official from the new contracting office to the OAMP. A listing of the contracting office identification codes currently in use is contained in the Enhanced Departmental Contracts Information System Manual, available at http://dcis.hhs.gov. PART 305—PUBLICIZING CONTRACT ACTIONS 24. Revise section 305.202 to read as follows: 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 Acquisition Management and Policy (DASAMP) requesting relief from synopsizing. The DASAMP shall review the request and decide whether an exception to synopsizing is appropriate or reasonable. If it is, the DASAMP shall take the necessary coordinating actions required by FAR 5.202(b). Whatever the decision is on the request, the DSAMP shall promptly notify the contracting office when a determination has been made. 25. Revise section 305.303 to read as follows: 305.303 Announcement of contract awards. (a) Public announcement. Awards over $3.5 million, not otherwise exempt under FAR 5.303, shall be reported by the Contracting Officer to the Office of the 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 p.m. Washington, DC time on the day of award. Notification may also be accomplished by e-mailing a copy of the contract or award document face page to grantfax@hhs.gov, or faxing to (202) 205-2420. 26. Revise section 305.502 to read as follows: 305.502 Authority. The Contracting Officer may advertise or place notices in newspapers and periodicals to announce that proposals are being sought. PART 306—COMPETITION REQUIREMENTS 27. Revise section 306.302-1 to read as follows: 306.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements. (a)(2)(iv) 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. (5) When the head of the program office has determined that only specified makes and models of technical equipment or parts must be obtained to meet the activity's program responsibility to test and evaluate 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.) 28. Revise section 306.303-1 to read as follows: 306.303-1 Requirements. (a)(1) The Program Office must provide a written justification whenever it requests that certain goods or services be obtained without full and open competition. The justification must explain why full and open competition is not feasible and must be submitted with the requisition or request for contract. (i) 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. (ii) 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. (iii) Sole source justifications using the Federal Supply Schedule shall include the content listed in FAR 6.303-2. (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. 29. Revise section 306.303-2 to read as follows: 306.303-2 Content. (a)(1) Each justification shall include the name of the program office; the name, address, and phone number of the Project Officer; and project identification, such as the authorizing program legislation, to include citations or other internal program identification data such as title, contract number, etc. (2) 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) JOFOCs shall be signed by the Project Officer, the Project Officer's immediate supervisor, the Contracting Officer, and the approving official (if the approving official is not the Contracting Officer). 30. Revise section 306.304 to read as follows: 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 Deputy Assistant Secretary for Acquisition Management and Policy. This designation has been made pursuant to the OFPP Act (41 U.S.C. 414(c)(2)(B). (c) A class justification shall be processed the same as an individual justification. 31. Revise section 306.501 to read as follows: 306.501 Requirement. The Department's competition advocate is the Director, Strategic Acquisition Service, Program Support Center (PSC). The competition advocates for each of the Department's contracting activities are as follows: AHRQ —Director, Office of Performance Accountability, Resources and Technology CDC —Chief Information Officer CMS —Chief Operating Officer FDA —Chief, Office of Shared Services HRSA —Associate Administrator, Office of Administration and Financial Management IHS —Director, Office of Management Services NIH —Senior Scientific Advisor for Extramural Research, Office of Extramural Research (R&D) and Senior Advisor to the Director (Other than R&D) PSC —Director, Strategic Acquisition Service SAMHSA —Executive Officer PART 307—ACQUISITION PLANNING 32. Revise section 307.104 to read as follows: 307.104 General procedures. (a) 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 HCA or the 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. (b) Once the AAP is obtained from the program planning/budget office, 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.) (c) The purpose of the discussions between the Contracting and Project Officers is to develop an individual acquisition planning schedule and to address areas 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. (d) Standard lead-times for processing various types of acquisitions and deadlines for submission of acceptable RFCs (that is, RFCs which include all 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 than the CCO. (e) The outcome of the discussions referenced in paragraph (c) of this section between the Project Officer and the Contracting Officer/Contract 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 HCA or 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). 33. Revise section 307.170 to read as follows: 307.170 Program training requirements. (a) HHS will maintain a program for certifying employees before they may be considered eligible for appointment as a program/project manager or COR/COTR. (b) All HHS program/project managers, alternate program/project managers, CORs/COTRs, alternate CORs/COTRs, and at least fifty percent of the HHS program personnel performing the function of technical proposal evaluator on a technical evaluation team or panel for a competitively solicited HHS contract, shall have successfully completed the Department's “Basic Project Officer” course, or an equivalent course, before assuming the duties of their designated role, or take the next available class. This requirement applies to the initial technical proposal evaluation and any subsequent technical evaluations that may be required. (*Peer and objective reviewers are excluded from these requirements). Course equivalency for the “Basic Project Officer” course will be determined by the ASAM/OAMP. The Contracting Officer is responsible for ensuring that the program/project manager, COR/COTR, and proposal evaluators have successfully completed the required training. Non-information technology (IT) program/project managers and non-IT CORs/COTRs who have successfully completed the appropriate “Basic Project Officer” course, or an equivalent course, are highly encouraged to take the Department's one-day course entitled “Early Warning Project Management System Workshop,” or an equivalent Earned Value course. Program/Project managers and CORs/COTRs are highly encouraged to take the Department's “Writing Statements of Work” course, or an equivalent course. Peer and objective reviewers are excluded from these requirements. (*The peer review process pertains specifically to NIH in the peer review of applications for grants and contracts. Applications are evaluated by a peer review group composed of scientists from the extramural research community.) All courses are offered through HHS University. 34. Revise section 307.170-1 to read as follows: 307.170-1 Training policy exceptions. In the event there is an urgent requirement for a specific individual to serve as a program/project manager and COR/COTR (or alternate program/project manager and alternate COR/COTR) and that individual has not successfully completed the prerequisite training course(s), 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 HHS “Project Officer's Contracting Handbook” to discuss the important aspects of the contracting-program office relationship as appropriate to the circumstances; and (b) The individual attends the next scheduled “Basic Project Officer” course, or an equivalent course, and, for those current and proposed IT program/project managers, as well as alternate IT program/project managers and IT CORs/COTRs (as well as alternate CORs/COTRs) assigned to HHS IT projects (including those designated as major or tactical by HHS), the next “Early Warning Project Management System Workshop.” 35. Add sections 307.170-3 through 307.170-9 to subpart 307.1 to read as follows: Subpart 307.1—Acquisition Planning 307.170-3 Earned value training requirement for IT program/project managers and IT CORs/COTRs. 307.170-4 Required training in HHS' portfolio management tool. 307.170-5 Maintenance/refresher training requirement for program/project managers and CORs/COTRs. 307.170-6 Warranting of Other Transaction Officers for Other Transactions. 307.170-7 Training Requirements for Other Transaction Officers. 307.170-8 Appointment of an Other Transaction Officer Technical Representative for an Other Transaction. 307.170-9 Training requirement for an Other Transaction Officer Technical Representative. Subpart 307.1—Acquisition Planning 307.170-3 Earned value training requirement for IT program/project managers and IT CORs/COTRs. All current and proposed IT program/project managers, alternate IT program/project managers, IT CORs/COTRs, and alternate CORs/COTRs assigned to HHS IT projects (including those IT projects designated as major or tactical), regardless of dollar threshold, must successfully complete the Department's (offered through HHS University) one-day course entitled “Early Warning Project Management System Workshop,” or an equivalent Earned Value training course. Course equivalency will be determined jointly by the ASAM/OAMP and the HHS Office of the Chief Information Officer. 307.170-4 Reqired training in HHS' portfolio management tool. All current and proposed IT program/project managers, as well as alternate IT program/project managers and IT CORs/COTRs (as well as alternate IT CORs/COTRs), regardless of dollar threshold, must successfully complete training in HHS' portfolio management tool (contact the HHS Office of the Chief Information Officer for additional information). 307.170-5 Maintenance/refresher training requirement for program/project managers and CORs/COTRs. Program/Project Managers and CORs/COTRs who monitor one or more contracts are required to take 40 CLPs each year. 307.170-6 Warranting of Other Transaction Officers for Other Transactions. (a) Other Transaction (OT) Officers shall possess the qualifications necessary to ensure that OTs are in compliance with applicable laws and regulations. The ASAM/OAMP will have the sole authority to warrant OT Officers at HHS. To receive a warrant as an HHS OT Officer, the individual must be a Contracting Officer, preferably with an unlimited warrant, with a Federal Acquisition Certification in Contracting (FAC-C) Level III, or a Level III or IV certified Grants Officer within HHS. Nominations for appointment of OT Officers shall be submitted to the Head of Contracting Activity in writing through appropriate organizational channels for review. The nomination package shall include the following: (1) A completed Appendix A (“OT Officer's Warrant Application Form”) of HHS Other Transaction Authority Guidebook; (2) A recommendation from the employee's immediate supervisor providing justification for the appointment of an HHS OT Officer; (3) Current resume/OF 612/SF 171 and/or other documentation describing the employee's experience, education, and training relevant to the position for which warrant authority is being sought; (4) A copy of the employee's most recent performance appraisal; (5) Type of work to be performed under the warrant, i.e., executing OTs; (6) A copy of the certificate issued under the HHS Acquisition Certification Program indicating the employee's current certification level and a copy of previous warrant certificate, if applicable; or a copy of the certificate issued under the HHS Grants Certification Program, if applicable; and (7) Proof of successful completion of the “Cooperative Agreements, CRADAs & Other Transactions” course taught by Federal Publications Seminars, or an equivalent course. (b) For additional information, see http://www.knownet.hhs.gov/acquisition/hhs_epp_postings/HHSGuidebook1-OTAMarch2005.doc. 307.170-7 Training Requirements for Other Transaction Officers. OT Officers must successfully complete the “Cooperative Agreements, CRADAs & Other Transactions” course, or an equivalent course, prior to appointment as an OT Officer. Grants Officers who serve as OT Officers are required to have successfully completed the following courses: CON 110 (“Mission Support Planning”); CON 111 (“Mission Strategy Execution,”); CON 112 (“Mission Performance,”) or CON 120 (“Mission Focused Contracting.”), or equivalent courses prior to being appointed as an OT Officer. The HHS OTA Board will determine course equivalency. 307.170-8 Appointment of an Other Transaction Officer Technical Representative for an Other Transaction. The program office nominates the Other Transaction Officer Technical Representative (OTR). The OT Officer prepares an OTR delegation memorandum that describes the OTR's authority and assigns the OTR specific responsibilities, with limitations of authority, in writing. The OTR represents the OT Officer only to the extent delegated in the written appointment and does not have the authority to change the terms and conditions of the OT. 307.170-9 Training requirement for an Other Transaction Officer Technical Representative. (a) Program personnel selected to serve as an OTR or an alternate OTR assigned to an OT, and at least fifty percent of the technical evaluators that review the initial and any subsequent proposals or revisions thereof, shall successfully complete the Department's “Basic Project Officer” course, or an equivalent course prior to being appointed. Determination of course equivalency shall be made by the HHS OTA Board. (b) In addition to the Department's required “Basic Project Officer” course, the OTR or alternate OTR assigned to an OT, and at least fifty percent of the technical evaluators that review the initial and any subsequent proposals or revisions thereof, shall successfully complete the “Cooperative Agreements, CRADAs & Other Transactions” course, or an equivalent course, prior to being appointed and prior to assuming job duties associated with the OT. (c) Refresher training in the policies and procedures of awarding cooperative agreements, CRADAs and OTs is required every three years. 307.302, 307.303, 307.304, and 307.307 [Removed] 36. Remove subpart 307.3 (sections 307.302, 307.303, 307.304, and 307.307). 37. Revise paragraph (b)(2) of section 307.7001 to read as follows: 307.7001 Distinction between acquisition and assistance. (b) * * * (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 Acquisition Management and Policy (DASAMP). 38. Revise section 307.7104 to read as follows: 307.7104 Transmittal. The RFC must be conveyed to the contracting office by use of a cover memorandum. The cover memorandum 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. 39. Amend section 307.7105 by revising the introductory text for the section, the introductory text for paragraph (b)(4), and paragraphs (b)(4)(i) and (b)(7) to read as follows: 307.7105 Format and content. The Department is in the process of standardizing a format for the RFC. In the interim, the information in paragraph (a) of this section must be included. Paragraph (b) contains information that must also be included if applicable. (b) * * * (4) Special program clearances or approvals. The following special program clearances or approvals should be reviewed for applicability to each acquisition. Those which are applicable should be addressed during the planning discussions between the Project Officer and Contracting Officer/Contract Specialist (see 307.104(c)) and immediate action should be initiated by the Project Officer to obtain the necessary clearances or approvals. The Contracting Officer/Contract Specialist shall provide a comprehensive checklist of these and any OPDIV special approvals, clearances, and requirements to the program office. 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. (i) Commercial activities. (OMB Circular No. A-76). An 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 public-private cost comparison. (See OMB Circular No. A-76, Performance of Commercial Activities.) (7) Special terms and conditions. Any suggested special terms and conditions not already covered in the statement of work. 40. Amend section 307.7106 by revising paragraphs (a) and (d) to read as follows: 307.7106 Statement of work. (a) General. A statement of work (SOW) describes the work or services to be performed in reaching an end result without describing the method that will be used unless the method of performance is critical or required in order to obtain successful performance. The SOW should be clear and concise and must completely define the responsibilities of both the contractor and the Government. The SOW should be worded to make more than one interpretation virtually impossible. (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 include the following: (1) Purpose of the project. This includes a general description of the objectives of the project and the desired results. (2) Background information. This includes a brief history of the project and the importance of the project to the overall program objectives. (3) A detailed description of the technical requirements. The statement of work should provide sufficient detail to accurately reflect the Government's requirement. It should state what is to be done without prescribing the method to be used and should include performance standards. The statement of work may be broken down into tasks and subtasks. The degree of breakout depends on the size and complexity of the project. The statement of work should indicate whether the tasks are sequential or concurrent. (4) Reference material. All reference material to be used in the conduct of the project that indicates 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. (5) 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. (6) Special requirements. (as applicable). An unusual or special contractual requirement, which would impact on contract performance, should be included as a separate section. (7) Deliverables reporting requirements. All deliverables and/or reports must be clearly and completely described. Include the timeframe for completion, the format, and the number of copies. PART 309—CONTRACTOR QUALIFICATIONS 41. Revise section 309.403 to read as follows: 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 written approval of the debarring or suspending official, as the case may be. Debarring official means the Assistant Secretary for Administration and Management, or his/her designee. Initiating official means either the contracting officer, the head of the contracting activity, the Deputy Assistant Secretary for Acquisition Management and Policy, or the Inspector General. Suspending official means the Assistant Secretary for Administration and Management, or his/her designee. 42. Revise section 309.404 to read as follows: 309.404 List of parties excluded from Federal procurement and nonprocurement programs. (c) The Office of Acquisition Management and Policy (OAMP) shall perform the actions required by FAR 9.404(c). (4) OAMP shall maintain all documentation submitted by the initiating official recommending the debarment or suspension action and all correspondence and other pertinent documentation generated during the OAMP review. 43. Amend section 309.405 by revising paragraph (a)(1) to read as follows: 309.405 Effect of listing. (a) * * * (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. Compelling reasons for award of a contract 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; or (ii) The urgency of the requirement dictates that the Department conduct business with the listed contractor. 44. Revise section 309.406-3 to read as follows: 309.406-3 Procedures. (a) Investigation and referral. When an apparent cause for debarment becomes known, the initiating official shall prepare a report containing the information required by 309.470-2, along with a written recommendation, and forward it through appropriate channels to the debarring official. Reports shall be forwarded in accordance with 309.470-1. The debarring official, the Deputy Assistant Secretary for Acquisition Management and Policy, shall initiate an investigation. (b) Decision making 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 it is determined that debarment procedures shall commence, the debarring official shall consult with the Office of General Counsel and then notify the contractor in accordance with FAR 9.406-3(c). If the proposed action is not based on a conviction or judgment 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 9.406-3(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. 45. Revise section 309.407-3 to read as follows: 309.407-3 Procedures. (a) Investigation and referral. When an apparent cause for suspension becomes known, the initiating official shall prepare a report containing the information required by 309.470-2 along with a written recommendation and forward it through appropriate channels to the suspending official. Reports shall be forwarded in accordance with 309.470-1. The suspending official shall initiate an investigation. (b) Decision making 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 it is determined that suspension shall be imposed, the suspending official shall consult with the Office of General Counsel and then 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). 46. Amend section 309.470-1 by revising the introductory text to read as follows: 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 OAMP when: 47. Add part 311 to read as follows: PART 311—DESCRIBING AGENCY NEEDS Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). 311.003 Defining Electronic Information Technology (EIT) requirements. HHS officials who are defining agency needs for EIT products and services and performing market research to meet those needs can use the Buy Accessible Wizard ( http://www.buyaccessible.gov ) managed by the General Services Administration to document EIT requirements, identify the applicable Section 508 standards, and document the market research. 48. Add part 312 to read as follows: PART 312—ACQUISITION OF COMMERCIAL ITEMS Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). Subpart 312.1—Acquisition of Commercial Items—General 312.101 Policy. (a) It is HHS policy to maximize its buying power, reduce acquisition administrative costs, and develop long-term, mutually beneficial, open partnerships with best-in-class providers of products and services. Accordingly, HHS has implemented a Strategic Sourcing Program under which Indefinite-Delivery/Indefinite-Quantity contracts (IDIQs) and Blanket Purchase Agreements (BPAs), known as HHS-wide Acquisition Contracts (HWACs), are awarded to allow for savings for commercial items and services across HHS and make the acquisition process more efficient. (b) If consideration is being given to soliciting or acquiring a product or service from a source, other than HHS Contract Closeout IDIQs or Strategic Sourcing BPAs, when the category of the current requirement (e.g. Lab Supplies, Events Management) is encompassed in the portfolio of existing IDIQ or BPA categories a waiver request must be prepared and approved in advance of a purchase or processing of a requirement. (c) The instructions, including approval requirements, and waiver form, are available at http://dbh.ogam2000.com/HHS_Strategic_Sourcing/Data_Collection/waiver.asp . The following links provide more detailed information regarding the supplies, equipment, and services in each of the HWACs: the HHS Acquisition Integration and Modernization Web site: http://intranet.hhs.gov/hwac/index.html and the HHS Strategic Sourcing Web site: http://intranet.hhs.gov/ssc/ . PART 314—SEALED BIDDING 49. Revise section 314.202-7 to read as follows: 314.202-7 Facsimile bids. (c) If the 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 [Removed] 50. Remove section 314.213. 51. Revise section 314.404-1 to read as follows: 314.404-1 Cancellation of invitations after opening. (c) The HCA or CCO (not delegable) shall make the determinations required to be made by the agency head in FAR 14.404-1. 52. Revise section 314.407-3 to read as follows: 314.407-3 Other mistakes disclosed before award. (e) Authority has been delegated to the Departmental Protest Control Officer, Office of Acquisition Management and Policy, 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, General Law Division, Office of General Counsel. (i) Doubtful cases shall not be submitted by the Contracting Officer directly to the Comptroller General, but, instead, shall be submitted to the Departmental Protest Control Officer. 53. Amend section 314.407-4 by revising paragraph (d) to read as follows: 314.407-4 Mistakes after award. (d) Each proposed determination shall have the concurrence of the Chief, General Law Division, Office of General Counsel. PART 315—CONTRACTING BY NEGOTIATION 54. Add section 315.204-1 to read as follows: 315.204-1 Uniform contract format. (a) When preparing solicitations and resulting contracts, Contracting Officers/Contract Specialists are strongly encouraged to use as a guide the HHS Solicitation/Contract Structure Document found at http://www.knownet.hhs.gov/acquisition/policy.htm . 315.204-5 [Removed] 55. Remove section 315.204-5. 315.209 [Amended] 56. Amend section 315.209 by removing paragraph (g). 57. Amend section 315.305 by revising paragraphs (a)(1), (a)(3)(i)(D), (a)(3)(ii)(B), the introductory text of (a)(3)(ii)(E)( 1 ), (a)(3)(ii)(E)( 4 ), (a)(3)(ii)(F)( 2 ), and (a)(3)(ii)(F)( 3 ) to read as follows: 315.305 Proposal evaluation. (a)(1) Cost or price evaluation. (i) The Contracting Officer shall evaluate business proposals in accordance with the requirements set forth in FAR 15.404. The extent of cost or price analysis in each case depends on the contract type, the amount of the proposal, the technical complexity, and related cost or price. The Project Officer shall be requested to analyze the following elements, if applicable, to determine if they are necessary and reasonable for efficient contract performance: (A) The number of labor hours proposed for the various labor categories and the mix in relation to the technical requirements; (B) Types, numbers and hours/days of proposed consultants; (C) The kinds and quantities of material, equipment, supplies, and services; (D) Kinds and quantities of information technology; (E) Logic of proposed subcontracting; and (F) Travel proposed, including number of trips, locations, purpose, and travelers. (ii) The Project Officer shall provide written comments, including the rationale for any exceptions to the elements. The Project Officer's comments shall be used for negotiations or to support award without discussions. The Contracting Officer should also request assistance of a cost/price analyst, when necessary. The Contracting Officer's negotiation memorandum must include the rationale used in determining that the price or cost is fair and reasonable. (3) Technical evaluation. (i) * * * (D) The technical evaluation plan shall be submitted to the Contracting Officer for review and approval before the solicitation is issued. The Contracting Officer shall make sure that the significant factors and subfactors relating to the evaluation are reflected in the evaluation criteria when conducting the review of the plan. (ii) * * * (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 prohibited by law or contracting activity procedures. ( 2 ) The Project Officer is responsible for recommending panel members who are knowledgeable in the technical aspects of the acquisition and capable of identifying strengths and weaknesses in the proposals received. Government employees serving as panel members must be selected in accordance with the requirements set forth in 307.170. ( 3 ) The Project Officer shall ensure that persons possessing expertise and experience in addressing issues relative to sex, race, national origin, and handicapped discrimination are included as panel members for acquisitions in which such issues are applicable. ( 4 ) The Project Officer shall submit the list of recommended panel members to an official within the project office in a position at least one level higher. This official will review the list and select the chairperson. ( 5 ) The Project Officer shall arrange for adequate and secure working space for the panel. (E) Continuity of evaluation process. ( 1 ) The technical evaluation panel shall evaluate all original proposals, make recommendations to the chairperson regarding strengths and weaknesses of proposals, and, if required by the Contracting Officer, assist the Contracting Officer during communications and discussions, and review 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: ( 4 ) When continuity of the evaluation process is not possible, and either new evaluators are selected or the size of the evaluation panel is reduced, all proposals shall be reviewed by each panel member at the current stage of the acquisition (i.e., initial proposal, final proposal revisions, etc.). Also, guidance should be provided concerning what to do if an unusually large number of proposals are received, including how to determine what constitutes an unusually large number of proposals. (F) * * * ( 2 ) Decisions to disclose proposals to evaluators outside of the Government shall be made by the official responsible for appointing panel members in accordance with operating division procedures. The avoidance of organization conflict of interest and competitive relationships must be taken into consideration when making the decision to use outside evaluators. ( 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 for evaluation purposes only. The foregoing 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 to the Government the 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's employees and subcontractors shall abide by these conditions. 58. Amend section 315.371 by revising the introductory text of paragraph (a) to read as follows: 315.371 Contract preparation and award. (a) After details have been finalized with the selected offeror, the Contracting Officer shall: 59. Amend section 315.372 by revising the introductory text and paragraph (a) to read as follows: 315.372 Preparation of negotiation memorandum. The negotiation memorandum or summary of negotiations is a complete record of all actions leading to award of a contract and is prepared by the Contracting Officer/Contract Specialist to support the source selection decision discussed in FAR 15.308. It should be in sufficient detail to explain and support the rationale, judgments, and authorities upon which all actions were predicated. The memorandum will document the negotiation process and reflect the negotiator's actions, skills, and judgments in concluding a satisfactory agreement for the Government. The negotiation memorandum shall address each item listed below. If an item is not applicable, it shall be so stated in the memorandum. Information already contained in the contract file may be referenced rather than reiterated. (a) Description of articles and services and period of performance. A description of articles and services, quantity, unit price, total contract amount, and period of contract performance should be set forth. 60. Amend section 315.404-4 by revising paragraphs (b)(1), the introductory text of (b)(1)(ii), (c), (d)(1)(i), (d)(1)(ii), the introductory text of (d)(1)(iv), and (d)(3)(iv) to read as follows: 315.404-4 Profit. (b) Policy. (1) The structured approach for determining profit or fee (hereafter called profit) provides a technique for establishing a profit objective for negotiation. A profit objective is that part of the estimated contract price objective or value which, in the judgment of the Contracting Officer, constitutes an appropriate amount of profit for the acquisition being considered. This technique allows for consideration of the profit factors described in paragraph (d) of this section. The Contracting Officer's analysis of these factors is based on available information such as proposals, audit data, assessment reports, preaward surveys, etc. The structured approach provides a basis for documenting the profit objective. Any significant departure from this objective shall be explained. The amount of documentation depends on the dollar value and complexity of the proposed acquisition. The profit objective is a part of the overall negotiation objective and is directly related to the cost objective and any proposed sharing arrangement. The profit objective should be negotiated at the same time as the other cost items. The profit objective should be negotiated as a whole and not as individual profit factors. (ii) The profit analysis factors in FAR 15.404-4(d) shall be used in lieu of the structured approach in the following circumstances. Factors considered inapplicable to the acquisition shall be excluded from the profit objective. Documentation shall be provided which includes the profit factor breakdown. (c) Contracting Officer responsibilities. The Contracting Officer shall develop the profit objective. This objective shall realistically reflect the total overall task to be performed and the requirements placed on the contractor. The Contracting Officer shall not begin to develop the profit objective until a thorough review of proposed contract work has been made; a review of all available knowledge regarding the contractor pursuant to FAR subpart 9.1, including audit data, preaward survey reports and financial statements, as appropriate, has been conducted; and an analysis of the contractor's cost estimate and comparison with the Government's estimate or projection of cost has been made. (d) * * * (1) * * * (i) The Contracting Officer shall measure “Contractor Effort” by assigning a profit percentage within the designated weight range to each element of contract cost. The categories listed are for reference purposes only, but are broad and basic enough to provide guidance to other elements of cost. Facilities capital cost of money is not to be included. A total dollar profit shall be computed for “Contractor Effort.” (ii) The Contracting Officer shall use the total dollar profit for the “Contractor Effort” to calculate specific profit dollars for “Other Factors”—cost risk, investment, performance, socioeconomic programs, and special situations. The Contracting Officer shall multiply the total dollar profit for the “Contractor Effort” by the weight assigned to each of the elements in the “Other Factors” category. Facilities capital cost of money is not included. Form HHS-674, Structured Approach Profit/Fee Objective, should be used. Form HHS-674 is illustrated in 353.370-674. (iv) The structured approach was designed for arriving at profit objectives for other than nonprofit organizations. However, the structured approach can be used for nonprofit organizations if appropriate adjustments are made. The Contracting Officer shall use the modified structured approach in paragraph (d)(1)(iv)(B) of this section to establish profit objectives for nonprofit organizations. (3) * * * (iv) Federal socioeconomic programs. This factor, which may apply to special circumstances or particular acquisitions, relates to the extent of a contractor's successful participation in Government sponsored programs such as small business, small disadvantaged business, women-owned small business, service-disabled veterans, handicapped sheltered workshops, and energy conservation efforts. The contractor's policies and procedures which energetically support Government socioeconomic programs and achieve successful results should be given positive considerations. Conversely, failure or unwillingness on the part of the contractor to support Government socioeconomic programs should be viewed as evidence of poor performance for the purpose of establishing a profit objective. 61. Amend section 315.606 by revising paragraph (b) to read as follows: 315.606 Agency procedures. (b) The HCA or the HCA's designee shall be the point of contact for coordinating the receipt and handling of unsolicited proposals. 62. Amend section 315.609 by revising the introductory text to read as follows: 315.609 Limited use of data. The legend, Use and Disclosure of Data, prescribed in FAR 15.609(a) is to be used by the offeror to restrict the use of data for evaluation purposes only. However, data contained within the unsolicited proposal may have to be disclosed as a result of a request submitted pursuant to the Freedom of Information Act. Because of this possibility, the following notice shall be provided to all prospective offerors of unsolicited proposals: PART 316—TYPES OF CONTRACTS 63. Add section 316.505 to read as follows: 316.505 Ordering. (b)(5) The Department's task-order and delivery-order ombudsman is the Director, Strategic Acquisition Service, Program Support Center (PSC). The task-order and delivery-order ombudsmen for each of the Department's contracting activities are as follows: AHRQ—Director, Office of Performance Accountability, Resources and Technology CDC—Chief Information Officer CMS—Chief Operating Officer FDA—Director, Office of Acquisitions and Grants Services HRSA—Associate Administrator, Office of Administration and Financial Management Indian Health Service—Director, Office of Management Services NIH—Senior Scientific Advisor for Extramural Research, Office of Extramural Research (R&D) and Senior Advisor to the Director (Other than R&D) PSC—Director, Strategic Acquisition Service SAMHSA—Executive Officer 64. Revise section 316.603-3 to read as follows: 316.603-3 Limitations. An official one level above the Contracting Officer shall make the written determination. 316.770-1 [Removed] 65. Remove section 316.770-1. PART 319—SMALL BUSINESS PROGRAMS 66. Amend section 319.201 by revising paragraph (e) to read as follows: 319.201 General policy. (e)(1) The Department's Small Business Program shall be carried out by appointed small business specialists (SBS) co-located within the OPDIVs. Appointments, and termination of appointments, shall be made in writing by the Director, Office of Small and Disadvantaged Business Utilization (OSDBU). The Director, OSDBU, will exercise full management authority over small business specialists. (2) One or more qualified SBS shall be appointed in the following activities: Agency for Healthcare Research and Quality (AHRQ), Centers for Medicare & Medicaid Services (CMS), Substance Abuse and Mental Health Services Administration (SAMHSA), Food and Drug Administration (FDA), Health Resources and Services Administration (HRSA), Indian Health Service (IHS), National Institutes of Health (NIH), Centers for Disease Control (CDC), Program Support Center (PSC), and the Office of the Secretary (OS). 67. Revise section 319.501 to read as follows: 319.501 General. (e) Subsequent to the Contracting Officer's recommendation on Form HHS-653, Small Business Set-Aside Review Form, the SBS shall review each proposed acquisition strategy and either concur or non-concur with the Contracting Officer's recommendation. The Small Business Administration's Procurement Center Representative (SBA/PCR) shall also review the acquisition strategy and either concur or non-concur with the Contracting Officer's recommendation. If the Contracting Officer disapproves the SBS's and/or the SBA PCR's set-aside recommendation, the reasons must be documented on the Form HHS-653, and the form placed in the contract file. The Contracting Officer will make the final determination as to whether the proposed acquisition will be set-aside or not. 68. Revise the heading of part 323 to read as follows: PART 323—ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE PART 324—PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION 69. Amend section 324.103 by revising paragraphs (a), (b), and (c) to read as follows: 324.103 Procedures. (a) All requests for contract shall be reviewed by the contracting officer to determine whether the Privacy Act requirements are applicable. The Privacy Act requirements are applicable when the contract will require the contractor to design, develop, or operate any Privacy Act system of records on individuals to accomplish an agency function. When applicable, the contracting officer shall include the solicitation notification and contract clause required by FAR 24.104 in the solicitation, and the contract clause in the resultant contract. In addition, the contracting officer shall ensure that the solicitation notification, contract clause, and other pertinent information specified in this subpart are included in any contract modification which results in the Privacy Act requirements becoming applicable to a contract. (b)(1) The Contracting Officer shall identify in the contract work statement the system(s) of records to which the Privacy Act and the implementing regulations are applicable. (2) The Contracting Officer shall include the clause specified in 352.270-11 in Section H of any RFP or resulting contract to notify the contractor that it and its employees are subject to criminal penalties for violations of the Act (5 U.S.C. 552a(i)) to the same extent as HHS employees. The clause also requires that the contractor ensure that each of its employees knows the prescribed rules of conduct and each contractor employee is aware that he/she is subject to criminal penalties for violations of the Act. These provisions also apply to all subcontracts awarded under the contract which require the design, development or operation of a system of records. The Contracting Officer shall send the contractor a copy of 45 CFR part 5b, which includes the rules of conduct and other Privacy Act requirements. (c) The Contracting Officer shall specify in the contract work statement and award the disposition to be made of the system(s) of records upon completion of contract performance. The contract work statement may require the contractor to destroy the records, remove personal identifiers, or turn the records over to the Contracting Officer. If there is a legitimate need for a contractor to keep copies of the records after completion of a contract, the contractor must take measures, as approved by the Contracting Officer, to keep the records confidential and protect the individuals' privacy. 324.202 [Redesignated as 324.203] 70-A. Redesignate section 324.202 as section 324.203. 70-B. Amend section 324.203 by revising paragraph (b) to read as follows: 324.203 Policy. (b) The Contracting Officer, upon receiving a Freedom of Information Act (FOIA) request, shall follow Department and OPDIV procedures. As necessary, actions should be coordinated with the cognizant Freedom of Information (FOI) Officer and the General Law Division of the Office of General Counsel. The Contracting Officer must remember that only the FOI Officer has the authority to release or deny release of records. While the Contracting Officer should be familiar with the entire FOIA regulation in 45 CFR part 5, particular attention should be focused on §§ 5.65 and 5.66; also of interest are §§ 5.32, 5.33, and 5.35. PART 325—[REMOVED] 71. Remove part 325. PART 330—COST ACCOUNTING STANDARDS 72. Revise section 330.201-5 to read as follows: 330.201-5 Waiver. (c) The requirements of FAR 30.201-5 shall be exercised by the Director, Division of Acquisition Policy (DAP). Requests shall be forwarded through normal acquisition channels to the DAP. PART 332—CONTRACT FINANCING 73. Revise section 332.402 to read as follows: 332.402 General. (e) The HCA shall determine whether an advance payment is in the public interest in accordance with FAR 32.402(c)(1)(iii)(A). This authority is non delegable. 74. Amend section 332.407 by revising the introductory text of paragraph (d) to read as follows: 332.407 Interest. (d) The HCA (not delegable) is authorized to make the determinations in FAR 32.407(d) and as follows. Interest-free advance payments may also be approved for educational institutions and other nonprofit organizations, whether public or private, performing work under nonprofit contracts (without fee) involving health services, educational programs, or social service programs, such as: 75. Revise section 332.501-2 to read as follows: 332.501-2 Unusual progress payments. (a)(3) The approval of an unusual progress payment shall be made by the HCA (not delegable). 76. Revise section 332.702 to read as follows: 332.702 Policy. An incrementally funded contract is a multiple year contract in which funds are allocated to cover specific phases or increments of performance. (a) Incremental funding may be used in cost-reimbursement type contracts for the acquisition of severable services. It shall not be used in contracts for construction or architect-engineer services. Incremental funding allows severable cost-reimbursement type contracts awarded for more than one year to be funded from succeeding fiscal years. (b) It is Departmental policy that multiple year contracts be fully funded whenever possible. However, incrementally funded contracts may be used when: (1) A project, which is part of an approved program, is anticipated to be of multiple year duration, but funds are not currently available to cover the entire project; (2) The project represents a valid need for the fiscal year in which the contract is awarded and for the succeeding fiscal years of the project's duration; (3) The project is so significant to the approved program that there is reasonable assurance that it will command a high priority for proposed appropriations to cover the entire multiple year duration; and (4) The statement of work is specific and is defined by separate phases or increments so that, at the completion of each, progress can be effectively measured. 77. Revise section 332.703-1 to read as follows: 332.703-1 General. (b) The following general guidelines are applicable to incrementally funded contracts: (1) The estimated total cost of the project (all planned phases or increments) is to be taken into consideration when determining the requirements which must be met before entering into the contract; i.e., justification for noncompetitive acquisition, approval of award, etc. (2) The RFP and resultant contract are to include a statement of work which describes the total project covering the proposed multiple year period of performance and indicating timetables consistent with planned phases or increments and corresponding allotments of funds. (3) Offerors' technical and cost proposals must include the entire project and shall show distinct phases or increments and the multiple year period of performance. (4) Negotiations will be conducted based upon the total project, including all planned phases or increments, and the multiple year period of performance. (5) Sufficient funds must be obligated under the basic contract to cover no less than the first year of performance, unless the Contracting Officer determines it is advantageous to the Government to fund the contract for a lesser period. In that event, the Contracting Officer shall ensure that the obligated funds are sufficient to cover a complete phase or increment of performance representing a material and measurable part of the total project and the period of time that the funds cover shall be stated in the contract. (6) An incrementally funded contract must contain precise requirements for progress reports to be sent to the Project and Contracting Officers. These reports will enable the contract to be effectively monitored. The Project Officer shall prepare periodic performance evaluation reports and provide them to the Contracting Officer. 78. Revise section 332.704 to read as follows: 332.704 Limitation of cost or funds. See subpart 342.71, “Administrative Actions for Cost Overruns,” for procedures for handling anticipated cost overruns. 332.705 [Removed] 79. Remove section 332.705. 332.902 [Removed] 80. Remove section 332.902. PART 333—PROTESTS, DISPUTES, AND APPEALS 333.102 [Amended] 81. Amend section 333.102 by removing paragraph (a). 82. Amend section 333.103 by revising paragraph (f)(3) to read as follows: 333.103 Protests to the agency. (f) * * * (3) Protests received after award shall be treated as indicated in FAR 33.103(f)(3). 83. Revise section 333.104 to read as follows: 333.104 Protests to GAO. (a) General procedures. (3)(ii) The DPCO shall process protests filed with GAO, whether pre- or post award. Protest files shall be prepared by the contracting office and distributed as follows: Two copies to the DPCO, one copy to the contracting activity's protest control officer, and one copy to OGC-GLD. In addition to the items listed in 33.104(a)(3)(ii)(A) through (G), the protest file shall include the following documents: (H) The current status of award. When award has been made, this shall include whether performance has commenced, shipment or delivery has been made, or a stop work order has been issued. (I) A copy of any mutual agreement to suspend work on a no-cost basis, when appropriate (see FAR 33.104(c)(4)). (J) Copies of the notice of protest given offerors and other parties when the notice is appropriate (see FAR 33.104(a)(2)). (K) A copy of the negotiation memorandum, when applicable. (L) The name and telephone number of the person in the contracting office who may be contacted for information relevant to the protest. (M) A copy of the competitive range memorandum. (N) The contracting officer's statement of facts and circumstances, including a discussion of the merits of the protest, and conclusions and recommendations, including documentary evidence on which they are based. The files shall be assembled in an orderly manner and shall have an index of enclosures and any document referred to therein. (4) The DPCO is responsible for making the necessary distributions referenced in FAR 33.104(a)(4). (5) The Contracting Officer shall furnish the protest file containing the documentation specified in paragraph (a)(3)(ii) of this section (with the exception of the contracting officer statement of facts and circumstances) and FAR 33.104(a)(3)(ii)(A) through (G) to the DPCO within fourteen (14) calendar days from receipt of the protest. The contracting officer shall submit the contracting officer's statement of facts and circumstances within twenty-one (21) calendar days from receipt of the protest. Since the statute allows only a short time period in which to respond to protests lodged with GAO, the Contracting Officer shall handle each protest on a priority basis. The DPCO shall submit copies of the protest file to GAO, the protestor, and any intervenors in accordance with FAR 33.104(a)(4)(i). (6) Since the DPCO will furnish the protest file to GAO, the protestor, and any intervenors, comments on the file from the protestor and any intervenors will be sent to the DPCO. (7) The DPCO, Division of Acquisition Policy (DAP), shall serve as the GAO point of contact for protests lodged with GAO. (b) Protests before award. (1) To make an award notwithstanding a protest, the Contracting Officer shall prepare a finding using the criteria in FAR 33.104(b)(1), have it executed by the HCA (not delegable), and forward it, along with a written request for approval to make the award, to the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP). (2) If the request to make an award notwithstanding the protest is approved by the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP), the DPCO shall notify GAO. Whether the request is approved or not, the DPCO shall telephonically notify the contracting activity's protest control officer of the decision of the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP), and the contracting activity's protest control officer shall immediately notify the Contracting Officer. The DPCO shall confirm the decision by memorandum to the contracting activity's protest control officer. (c) Protests after award. (2) If the Contracting Officer believes performance should be allowed to continue notwithstanding the protest, a finding shall be prepared by the Contracting Officer using the criteria in FAR 33.104(c)(2), executed by the HCA (not delegable), and forwarded, along with a written request for approval, to the Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP). The same procedures for notification stated in paragraph (b)(2) of this section shall be followed. (d) Findings and notice. The written notice required by FAR 33.104(d) shall be provided to the protestor and any intervenors by the DPCO. (g) Notice to GAO. The Deputy Assistant Secretary for Acquisition Management and Policy (DASAMP) shall be the official to comply with the requirements of FAR 33.104(g). 84. Revise section 333.203 to read as follows: 333.203 Applicability. (c) The Secretary has designated the Armed Services Board of Contract Appeals (ASBCA) as the authorized “Board” to hear and determine disputes for the Department. 85. Revise section 333.211 to read as follows: 333.211 Contracting officer's decision. (a)(2) The contracting officer shall refer a proposed final decision to the Office of General Counsel-General Law Division (OGC-GLD), for advice as to the legal sufficiency and format before sending the final decision to the contractor. The contracting officer shall provide OGC-GLD with the pertinent documents with the submission of each proposed final decision. (a)(4)(v) When using the paragraph in FAR 33.211 (a)(4)(v), the contracting officer shall insert the words “Armed Services” before each mention of the term “Board of Contract Appeals”. (h) At any time within the period of appeal, the contracting officer may modify or withdraw his/her final decision. If an appeal from the final decision has been taken to the ASBCA, the contracting officer will forward his/her recommended action to OGC-GLD with the supplement to the contract file which supports the recommended correction or amendment. 86. Revise section 333.212 to read as follows: 333.212 Contracting officer's duties upon appeal. (a) Appeals shall be governed by the rules set forth in the “Rules of the Armed Services Board of Contract Appeals,” or by the rules established by the U.S. Court of Federal Claims, as appropriate. (b) The Office of General Counsel-General Law Division (OGC-GLD) is designated as the Government Trial Attorney to represent the Government in the defense of appeals before the ASBCA. A decision by the ASBCA will be transmitted by the Government Trial Attorney to the appropriate contracting officer for compliance in accordance with the ASBCA's decision. (c) If an appeal is filed with the ASBCA, the contracting officer shall assemble a file within 30 days of receipt of an appeal, or advice that an appeal has been filed, that consists of all documents pertinent to the appeal, including: (1) The decision and findings of fact from which the appeal is taken; (2) The contract, including specifications and pertinent modifications, plans and drawings; (3) All correspondence between the parties pertinent to the appeal, including the letter or letters of claim in response to which the decision was issued; (4) Transcripts of any testimony taken during the course of proceedings, and affidavits or statements of any witness on the matter in dispute made prior to the filing of the notice of appeal with the Board; and (5) Any additional information considered pertinent. The contracting officer shall furnish the appeal file to the Government Trial Attorney for review and approval. After approval, the contracting officer shall prepare four copies of the file, one for the ASBCA, one for the appellant, one for the Government Trial Attorney, and one for the contracting office. (d) At all times after the filing of an appeal, the contracting officer shall render whatever assistance is requested by the Government Trial Attorney. When an appeal is set for hearing, the concerned contracting officer shall be responsible for providing Government witnesses and specified physical and documentary evidence to the Trial Attorney. The Trial Attorney shall ensure the presence of all witnesses and documentary evidence at both the pre-hearing conference and hearing. (e) If a contractor which has filed an appeal with the ASBCA elects to accept fully the decision from which the appeal was taken, or any modification to it, and gives written notification of acceptance to the Government Trial Attorney or the concerned contracting officer, the Government Trial Attorney will notify the ASBCA of the disposition of the dispute in accordance with Rule 27 of the ASBCA. (f) If the contractor has elected to appeal to the U.S. Court of Federal Claims, the U.S. Department of Justice will represent the Department. However, the contracting officer shall still coordinate all actions through OGC-GLD. 87. Amend section 333.212-70 by revising paragraph (a) to read as follows: 333.212-70 Formats. (a) The following format is suggested for use in transmitting appeal files to the ASBCA: Your reference: (Docket No.) (Name) Recorder, Armed Services Board of Contract Appeals Skyline Six 5109 Leesburg Pike Falls Church, Virginia 22041 Dear (Name): Transmitted herewith are documents relative to the appeal under Contract No. __ with the ______ (Name of contractor) in accordance with the procedures under Rule 4. The Government Trial Attorney for this case is ( Insert General Law Division, Office of General Counsel, Department of Health and Human Services, 330 Independence Avenue, SW., Washington, DC 20201 ). The request for payment of charges resulting from the processing of this appeal should be addressed to: (Insert name and address of cognizant finance office.) Sincerely yours, Contracting Officer Enclosures PART 334—[REMOVED] 88. Remove part 334. PART 335—RESEARCH AND DEVELOPMENT CONTRACTING 89. Amend section 335.070-2 by revising the introductory text and paragraph (a) to read as follows: 335.070-2 Amount of cost-sharing. When cost-sharing is appropriate, use the following guidelines to determine the amount of cost participation by the contractor: (a) The amount of cost participation should depend on the extent to which the research effort or results are likely to enhance the performing organization's capability, expertise, or competitive position, and the value of this enhancement to the performing organization. It should be recognized that those organizations which are predominantly engaged in research and development have little or no production or other service activities and may not be in a favorable position to derive a monetary benefit from their research under Federal agreements. Therefore, contractor cost participation could reasonably range from as little as 1 percent or less of the total project cost, to more than 50 percent of the total project cost. Ultimately, the Contracting Officer should bear in mind that cost-sharing is a negotiable item. As such, the amount of cost-sharing should be proportional to the anticipated value of the contractor's gain. 90. Add part 339 to read as follows: PART 339—ACQUISITION OF INFORMATION TECHNOLOGY Authority: 5 U.S.C. 301; 40 U.S.C. 486(c). 339.201-10 Clarification. FAR Subpart 39.2, Electronic and Information Technology, requires Federal agencies to ensure that, when acquiring EIT, Federal employees with disabilities and members of the public with disabilities have access to and use of information and data that is comparable to individuals without disabilities. This EIT access requirement does not apply to a contractor's internal workplaces. EIT that is not used nor accessed by Federal employees or members of the public is not subject to the Architectural and Transportation Barriers Compliance Board (Access Board) standards. Contractors in their professional capacity are not members of the public for purposes of Section 508. 339.201-70 Required provision and contract clause. When acquiring EIT, the Contracting Officer shall insert the provision at 352.270-19(a) in solicitations and the clause in 352.270-19(b) in contracts and orders for projects that will develop, purchase, maintain, or use electronic and information technology (EIT), unless these EIT products and/or services are incidental to the project. (Note: Other exceptions to this requirement can be found at FAR 39.204.) PART 342—CONTRACT ADMINISTRATION 91. Revise section 342.705 to read as follows: 342.705 Final indirect cost rates. (a) The Director, Division of Cost Allocation of the Program Support Center, within each servicing HHS regional office, has been delegated the authority to establish indirect cost rates, research patient care rates, and, as necessary, fringe benefit, computer, and other special costing rates for use in contracts and grants awarded to State and local governments, colleges and universities, hospitals, and other nonprofit organizations. (b) The Division of Financial Advisory Services of the National Institutes of Health has the authority to establish indirect cost rates, fringe benefit rates, etc., for use in contracts and grants awarded to commercial organizations. 92. Revise section 342.7001 to read as follows: 342.7001 Purpose. Contract monitoring is an essential element of contract administration and is performed jointly by the Project Officer and the Contracting Officer. This subpart describes the Department's operating concepts. 93. Revise section 342.7002 to read as follows: 342.7002 Contract monitoring responsibilities. (a) The contract establishes the obligations of both the Government and the contractor. The Contracting Officer is the only person authorized to make changes to the contract. The Contracting Officer must confirm all changes in writing. (b) The Contracting Officer is responsible for assuring compliance with all the terms and conditions of the contract. The Contracting Officer shall inform the contractor by letter (if not already stipulated in the contract) of the authorities and responsibilities of the Government personnel involved with the contract. (c) The Contracting Officer must depend on program, technical, and other personnel for assistance and advice in monitoring the contractor's performance, and in other areas of postaward administration. The Contracting Officer must assure that these individuals understand and carry out their assigned responsibilities. The individual roles and corresponding responsibilities typically involve, but are not limited to, the following: (1) The role of program and technical personnel in monitoring the contract is to assist and/or advise the Contracting Officer or act as his/her representative when so designated by the Contracting Officer. Activities may include: (i) Providing technical monitoring during contract performance, and issuing letters to the contractor and Contracting Officer relating to delivery, acceptance, or rejection in accordance with the terms of the contract; (ii) Assessing contractor performance, including inspection and testing of products and evaluation of reports and data; (iii) Recommending necessary changes to the schedule of work and period of performance in order to accomplish the objectives of the contract. Program officials must provide the Contracting Officer a written request along with an appropriate justification and a funding document if additional funds are needed; (iv) Reviewing invoices/vouchers and recommending approval/disapproval action by the Contracting Officer, to include comments regarding anything unusual discovered in the review; (v) Reviewing and recommending approval or disapproval of subcontractors, overtime, travel, and key personnel changes; and (vi) Participating, as necessary, in various phases of the contract closeout process. (2) The role of the Project Officer in monitoring the contract includes the applicable activities set forth in paragraph (c)(1) of this section. The Project Officer also shall do the following: (i) Submit periodic reports to the Contracting Officer that concisely explain the status of the contract, and include recommended actions for any problems reported. Provide the Contracting Officer with written notification of evaluation and approval/disapproval of contract deliverables and of completion of tasks or phases. The Contracting Officer or designee will provide the contractor with written notification of approval or disapproval and include a copy in the contract file; (ii) Monitor the technical aspects of the contract, identify existing and potential problems that threaten performance, and immediately inform the Contracting Officer of deviations from contract objectives or from any technical or delivery requirements; (iii) Immediately notify the head of the program office whenever it is determined that objectives are not being met and provide specific recommendations of actions to be taken. The Contracting Officer shall receive a copy of the Project Officer's report and recommendations; (iv) Within 120 days after contract completion, submit a final written assessment report to the Contracting Officer. The report should include analysis of the contractor's performance, including the contract and program objectives achieved and missed. A copy of the final assessment report shall be forwarded to the head of the program office responsible for the program for management review and follow-up, as necessary; and (v) Accompany and/or provide, when requested, technical support to the HHS auditor in the conduct of visual inspections. (3) The roles of the contract administrator, auditor, cost analyst, and property administrator are to assist and/or advise the Contracting Officer in postaward administration activities such as: (i) Evaluation of contractor systems and procedures, to include accounting policies and procedures, purchasing policies and practices, property accounting and control, wage and salary plans and rate structures, personnel policies and practices, etc.; (ii) Processing of disputes under the Disputes clause and any resultant appeals; (iii) Modification or termination of the contract; and (iv) Determination of the allowability of cost charges to incentive or cost-reimbursement type contracts and progress payments under fixed-price contracts. This is especially important when award is made to new organizations or those with financial weaknesses. (d) The Contracting Officer is responsible for assuring that contractor performance and contract monitoring conform with contract terms. If performance is not satisfactory or if problems are anticipated, it is essential that the Contracting Officer take immediate action to protect the Government's rights under the contract. The Contracting Officer shall notify his/her immediate supervisor of problems that cannot be resolved within contract limitations and whenever contract or program objectives are not met. The notification shall include a statement of action being taken by the Contracting Officer. 94. Revise section 342.7003-1 to read as follows: § 342.7003-1 Policy. (a) All solicitations and resultant contracts (other than awards made using simplified acquisition procedures) shall contain the withholding of contract payments clause at 352.232-9, and an excusable delays clause, or a clause which incorporates the definition of excusable delays. Use the excusable delays clause at 352.249-14 when the solicitation and resultant contract (other than purchase orders) does not contain a default or other excusable delays clause. (b) When appropriate, the Contracting Officer may withhold any contract payment when a required report is overdue, or the contractor fails to perform or deliver required work or services. 95. Revise section 342.7003-2 to read as follows: § 342.7003-2 Procedures. (a) The Contracting Officer is responsible for initiating immediate action to protect the Government's rights whenever the contractor fails to comply with either the delivery or reporting terms of the contract. Compliance with the reporting terms includes those reports to be submitted directly to the payment office. The payment office shall notify the Contracting Officer promptly when such a report is not submitted on time. (b) When the contract contains a termination for default clause, the contractor's failure to submit any report, perform services, or deliver work when required by the contract is considered a default in performance. The Contracting Officer shall immediately issue a formal ten-day cure notice pursuant to FAR 49.607. The notice shall include a statement to the effect that payments will be withheld if the default is not cured within the time frame specified in the notice or if the default is not determined to be excusable. (1) If the default is cured or is determined to be excusable, the Contracting Officer shall not initiate the withholding action. (2) If the default is not determined to be excusable or a response is not received within the allotted time, the Contracting Officer shall initiate withholding action on all contract payments and shall determine whether termination for default or other action would be in the best interest of the Government. (c) When the contract does not contain a termination for default clause, the contractor's failure to submit any required report, perform services, or deliver work when required by the contract shall be considered a failure to perform. The Contracting Officer shall immediately issue a written notice to the contractor specifying the failure and providing a ten-day period (or longer period if the Contracting Officer deems it necessary) in which the contractor shall cure the failure or provide reasons for an excusable delay. The notice shall include a statement to the effect that payments will be withheld if the default is not cured within the time specified in the notice or if the default is not determined to be excusable. (1) If the failure is cured or is determined to be excusable, the Contracting Officer shall not initiate the withholding action. (2) If the failure is not determined to be excusable or a response is not received within the allotted time, the Contracting Officer shall initiate withholding action on all contract payments and shall determine whether termination for convenience or other action would be in the best interest of the Government. (d) The Contracting Officer should consult FAR subpart 49.4 for further guidance before taking any of the actions described in this section. 96. Revise section 342.7003-3 to read as follows: § 342.7003-3 Withholding payments. (a) When making the determination that contract payments should be withheld in accordance with the Withholding of Contract Payments clause, the Contracting Officer shall immediately notify the servicing finance office in writing of the determination to withhold payments. The notice of suspension shall contain all information necessary for the finance office to identify the contract, i.e. , contract number, task/delivery order number, contractor name and address, etc. (b) The Contracting Officer shall immediately notify the contractor in writing that payments have been suspended until the default or failure is cured. (c) When the contractor cures the default or failure, the Contracting Officer shall immediately notify, in writing, all recipients of the notice of suspension that the suspension is to be lifted and contract payments are to be resumed. (d) When exercising actions regarding the withholding of payment procedures, the Contracting Officer must be careful not to waive any of the Government's rights when corresponding with the contractor or when taking any other actions. 97. Revise section 342.7100 to read as follows: § 342.7100 Scope of subpart. This subpart sets forth the procedures to follow when a cost overrun is anticipated. A cost overrun occurs when the allowable actual cost of performing a cost-reimbursement type contract exceeds the total estimated cost specified in the contract. 98. Amend section 342.7101-2 by revising the introductory text of paragraph (a) and paragraph (b)(3) to read as follows: § 342.7101-2 Procedures. (a) Upon notification that a cost overrun is anticipated, the Contracting Officer shall inform the contractor to submit a request for additional funds which shall include: (b) * * * (3) Maintain continuous follow-up with the program office to obtain a timely decision as to whether the work under the contract should continue and additional funds be provided, or the contract terminated. An appropriate written statement and funding authority, or a formal request for termination, must support the decision of the program office. After receiving the decision by the program office, the Contracting Officer shall promptly notify the contractor in writing of the following: (i) The specified amount of additional funds allotted to the contract; or (ii) Work will be discontinued when the allotted funds are exhausted, and any work performed after that date is at the contractor's risk; or (iii) The Government is considering whether to allot additional funds to the contract and will notify the contractor as soon as possible, but that any work performed after the currently allotted funds are exhausted is at the contractor's risk. Timely, formal notification of the Government's intention is essential in order to preclude loss of contractual rights in the event of dispute, termination, or litigation. PART 352—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 99. Revise section 352.202-1 to read as follows: § 352.202-1 Definitions. As prescribed in 302.201, use the FAR Definitions clause at 52.202-1 as modified: Definitions (January 2006) (a) In accordance with 52.202-1(a)(1), substitute the following as paragraph (a): “(a) The term “Secretary” or “Head of the Agency” (also called “Agency Head”) means the Secretary, Deputy Secretary, or any Assistant Secretary, Adminis [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%3AE6-21505. Public record. Not legal advice.