[Federal Register: May 26, 2006 (Volume 71, Number 102)]
[Proposed Rules]
[Page 30519-30545]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26my06-33]
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Part III
Department of Health and Human Services
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Office of the Secretary
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48 CFR Chapter 3
Acquisition Regulations; Proposed Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
48 CFR Chapter 3
Acquisition Regulations
AGENCY: Department of Health and Human Services (HHS).
ACTION: Proposed rule with request for comments.
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SUMMARY: The Department of Health and Human Services proposes to amend
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reorganizations and to update or remove outdated text and references.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 proposal 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: Comments must be received by July 25, 2006.
ADDRESSES: You may submit comments by either of the following methods:
E-mail: Katherine.Hughes@hhs.gov or by mail to: Katherine Hughes, HHS,
Division of Acquisition Policy, Office of Acquisition Management and
Policy, 200 Independence Ave., SW., Room 336E, Washington, DC 20201.
Please state ``48 CFR 3'' on the subject line.
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 emphasizes that it is not proposing significant
amendments to the existing HHSAR. The amendments being proposed to the
HHSAR concern internal procedural matters which are administrative in
nature, and would 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. 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.
C. 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).
List of Subjects in 48 CFR Chapter 3
Government procurement.
Under the authority of 5 U.S.C. 301; 40 U.S.C. 486(c), the
Department of Health and Human Services proposes to amend 48 CFR
Chapter 3 as set forth below.
Dated: May 16, 2006.
Joe W. Ellis,
Assistant Secretary for Administration and Management.
CHAPTER 3--HEALTH AND HUMAN SERVICES
1. The authority citation for 48 CFR chapter 3, parts 301-370
continues to read as follows:
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
2. 48 CFR chapter 3 is amended by removing ``Office of Acquisition
Management'' and adding ``Division of Acquisition Policy (DAP)'' in its
place each time it appears.
PART 301--HHS ACQUISITION REGULATION SYSTEM
3. 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.
* * * * *
4. Amend section 301.270 by revising paragraphs (c) and (d) to read
as follows:
301.270 Executive Committee for Acquisition.
* * * * *
(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.
5. 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).
6. 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 Director,
Office of Acquisition Management and Policy.
7. 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
Deputy Assistant Secretary for Acquisition Management and Policy. A
deviation may be requested verbally in an exigency situation; however,
the request must be confirmed in writing as soon as possible.
* * * * *
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8. 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, why the contracting office was
not used, why the proposed contractor was selected, other sources
considered, a description of the requirement, the estimated or agreed
price, funds citation, and whether the contractor has commenced work.
(2) The Contracting Officer will review the submitted material and
prepare it for ratification following a determination 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.
* * * * *
9. Revise sections 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 the authority for a Contracting Officer warrant. For
those OPDIVs that have Contracting Officers/Contract Specialists with
dual signature warrants within some of the offices, the appointment and
termination of Contracting Officers/Contract Specialists is done in
accordance with OPDIV procedures.
(b) The Contracting Officer appointment document for personnel in
the GS-1102 series, as well as personnel in any other series who will
obligate the Government to the expenditure of funds in excess of the
micro-purchase threshold, shall be the Standard Form (SF) 1402,
``Certificate of Appointment,'' and shall indicate the Contracting
Officer's warrant level and threshold and any other limitations.
Appointing officials shall ensure that individuals delegated warrant
authority meet the requirements stipulated in the HHS Acquisition
Workforce Training and Certification Handbook (herein referred to as
``Handbook''), are certified in accordance with Chapter 4 of the
Handbook, and meet the skills currency training and other specific
OPDIV standards that may apply. (The Handbook is located at the
following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/toc.htm
). 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 (see
Chapter 4 of the Handbook at the following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap4.htm
) as a
prerequisite to being appointed as a Contracting Officer with authority
to obligate funds in excess of the micro-purchase threshold. 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/Contract Specialists (GS-1102s) are
prohibited from signing actions, including modifications, options, or
any other action that 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 issued against IDIQ contracts are processed
differently. Once an IDIQ contract is awarded by a Contracting Officer
with the appropriate authority, orders against the contract may be
issued by other Contracting Officers/Contract Specialists up to their
delegated warrant authority, assuming that each order is separate and
distinct (that is, not a follow-on of another order) from each other.
(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 should 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.
10. Revise section 301.603-2 to read as follows:
301.603-2 Selection of Contracting Officers/Contract Specialists.
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/Contract Specialists shall be
submitted to the HCA through appropriate organizational channels for
review. The HCA is responsible for appointing Contracting Officers/
Contract Specialists in accordance with FAR 1.603. This authority is
not delegable. The nomination package, which typically is initiated by
the prospective Contracting Officer's immediate supervisor, shall
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http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap3.htm
(click on ``Selection, Appointment, and Termination of Contracting
Officers''). Additional information about appointment procedures is
listed in the Web site mentioned above. 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.
11. 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, education/training requirements listed in Chapter 4
entitled ``Training and Certification Requirements for the HHS
Acquisition Workforce,'' of the Handbook (available at the following
Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap4.htm
), meets acquisition certification requirements, and
meets the skills currency training and other OPDIV/Department standards
that may apply. The warrant levels are listed in the Handbook at the
following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap3.htm
.
(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 (1) year in total, and shall not be granted unless the individual
can meet the certification requirements within one (1) year from the
date of appointment. The HCA may extend an interim appointment when he/
she determines it is appropriate by granting additional time to
complete the requirements of a permanent appointment. The HCA and
Contracting Officer will discuss the timeframes for extension of an
interim appointment, to allow completion of the requirements, and the
HCA will make the final decision. If the certification requirements are
not met by that date, the appointment will automatically terminate.
12. 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.
13. 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.
14. Add sections 301.603-71 through 301.603-76 to read as follows:
301.603-71 Waivers to warrant standards.
Guidance on waivers to warrant standards are found in Chapter 3 of
the Handbook at the following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap3.htm
(under ``Selection,
Appointment and Termination of Contracting Officers'').
301.603-72 Training and certification requirements for Contracting
Officers/Contract Specialists.
Training and certification requirements are found in Chapter 4 of
the Handbook at the following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap4.htm
.
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 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
found in Chapter 4 of the Handbook at the following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap4.htm
.
301.603-76 Requirement for certification retention and maintaining
currency of acquisition knowledge and skills for Contracting Officers/
Contract Specialists and purchasing agents.
The requirement for certification retention and maintaining
currency of acquisition knowledge and skills is found in Chapter 4 of
the Handbook at the following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap4.htm
.
PART 302--DEFINITIONS OF WORDS AND TERMS
15. In section 302.101, add a definition for ``Agency head or head
of the Agency,'' remove the definition for ``Head of the agency or
agency head,'' revise the definition for ``Head of the Contracting
Activity (HCA),'' and add a definition for ``Project Officer,'' 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).
* * * * *
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Head of the contracting activity (HCA) 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
Each HCA is responsible for conducting an effective and efficient
acquisition program. Adequate controls shall be established to assure
compliance with applicable laws, regulations, procedures, and the
dictates of good management practices. Periodic reviews shall be
conducted and evaluated by qualified personnel, preferably assigned to
positions other than in the contracting office being reviewed, to
determine the extent of adherence to prescribed policies and
regulations, and to detect a need for guidance and/or training. The HCA
shall be certified, or be certifiable, at Level IV of the HHS
Acquisition Certification Program. Individuals appointed as HCAs who do
not meet the Level IV requirements shall have one year from the date of
appointment to obtain Level IV certification. The heads of contracting
activities may redelegate their HCA authorities to the extent that
redelegation is not prohibited by the terms of their respective
delegations of authority, by law, by the Federal Acquisition
Regulation, by the HHS Acquisition Regulation, or by other regulations.
However, HCA and other contracting approvals and authorities shall not
be redelegated below the levels specified in the HHS Acquisition
Regulation or, in the absence of coverage in the HHS Acquisition
Regulation, the Federal Acquisition Regulation. To ensure proper
control of redelegated acquisition authorities, 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. He or she 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).
16. 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
17. 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.
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 appropriate contract and contract
modifications award of the prior 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
[[Page 30524]]
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 paragraph (e) of section 304.7001 to read as follows:
304.7001 Numbering acquisitions.
* * * * *
(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 305.303 to read as follows:
305.303 Announcement of contract awards.
(a) Public announcement. Any contract, contract modification, or
order in the amount of $3 million or more, 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.
25. Revise section 305.502 to read as follows:
305.502 Authority.
The Contracting Officer is authorized to publish advertisements and
notices indicating that proposals are being sought in newspapers and
periodicals in accordance with the requirements and conditions
referenced in FAR subpart 5.5.
PART 306--COMPETITION REQUIREMENTS
26. 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.)
27. Revise section 306.303-1 to read as follows:
306.303-1 Requirements.
(a)(1) When a program office desires to obtain certain goods or
services by contract without full and open competition, it shall
provide the contracting office a justification explaining why full and
open competition is not feasible. The justification 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.
28. Revise section 306.303-2 to read as follows:
306.303-2 Content.
(a)(1) Each justification shall include the program office and
name, address, and telephone 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).
29. 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
[[Page 30525]]
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.
30. Revise section 306.501 to read as follows:
306.501 Requirement.
The Department's competition advocate is the Deputy Assistant
Secretary for Acquisition Management and Policy. The competition
advocates for each of the Department's OPDIVs are as follows:
AHRQ--Executive Officer
CDC--Director, Office of Program Support
CMS--Chief Operating Officer
FDA--Chief, Office of Shared Services
HRSA--Associate Administrator for Operations and Management
IHS--Director, Office of Management and Support
NIH--Senior Advisor for Policy, Office of Extramural Research (R&D) and
Senior Advisor to the Deputy Director for Intramural Research (Other
than R&D)
OS--Deputy Assistant Secretary for Acquisition Management and Policy
PSC--Director, Strategic Acquisition Service
SAMHSA--Associate Administrator for Management
PART 307--ACQUISITION PLANNING
31. 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).
32. 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 (offered through HHS University) ``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. 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 (offered through HHS University) ``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.
33. 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
[[Page 30526]]
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,'' or an equivalent Earned Value course.
34. Add sections 307.170-3 through 307.170-9 to read as follows:
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), 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 Required 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), 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.
The maintenance/refresher training requirement for program/project
managers and CORs/COTRs is found in Chapter 5 of the Handbook at the
following Web site: http://www.knownet.hhs.gov/acquisition/Cert_Training_Program/chap5.htm
.
307.170-6 Warranting of Other Transaction Officers for Other
Transactions.
The requirement for the warranting of Other Transaction Officers
for Other Transactions is found in Section I(H) of the HHS Guidebook on
Other Transactions Authority (available at the following Web site:
http://www.knownet.hhs.gov/acquisition/ota.htm).
307.170-7 Training Requirements for Other Transaction Officers.
Training requirements for an Other Transaction Officer are listed
in Section I(F) of the HHS Guidebook on Other Transaction Authority
(available at the following Web site: http://www.knownet.hhs.gov/acquisition/ota.htm
).
307.170-8 Appointment of an Other Transaction Officer Technical
Representative for an Other Transaction.
The requirement for the appointment of an Other Transaction Officer
Technical Representative for an Other Transaction is found in Section
I(I) of the HHS Guidebook on Other Transactions Authority (available at
the following Web site: http://www.knownet.hhs.gov/acquisition/ota.htm
).
307.170-9 Training requirement for an Other Transaction Officer
Technical Representative.
The training requirement for an Other Transaction Officer Technical
Representative is found in Section I(I) of the HHS Guidebook on Other
Transactions Authority (available at the following Web site: http://www.knownet.hhs.gov/acquisition/ota.htm
).
307.302, 307.303, 307.304, and 307.307 [Removed]
35. Remove subpart 307.3 (sections 307.302, 307.303, 307.304, and
307.307).
36. 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.
37. 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. Any required clearance
or approval. 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.
Comprehensive checklists of these and any OPDIV special approvals,
clearances, and requirements shall be provided for reference purposes
to program offices by the servicing contracting activity. If the
approval or clearance has been requested and is being processed at the
time of RFC submission, a footnote to this effect, including all
pertinent details, must be included in this section.
(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.
* * * * *
38. 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.
* * * * *
[[Page 30527]]
(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
39. 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.
40. 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.
* * * * *
41. 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) Decisionmaking process. The debarring official shall review the
results of the investigation, if any, and make a written determination
whether or not debarment procedures are to be commenced. A copy of the
determination shall be promptly sent through appropriate channels to
the initiating official and the Contracting Officer. If 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.
42. 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) Decisionmaking process. The suspending official shall review
the results of the investigation, if any, and make a written
determination whether or not suspension should be imposed. A copy of
this determination shall be promptly sent through appropriate channels
to the initiating official and the Contracting Officer. If 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).
43. 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:
* * * * *
[[Page 30528]]
44. Add part 311, Describing Agency Needs, and section 311.003 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.
45. Add part 312, Acquisition of Commercial Items; Subpart 312.1,
Acquisition of Commercial Items--General; and section 312.101 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://intranet2.hhs.gov/hwac/waiver.html. 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
46. 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]
47. Remove section 314.213.
48. Revise section 314.401-1 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.
49. 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.
50. 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
51. 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]
52. Remove section 315.204-5.
315.209 [Amended]
53. Amend section 315.209 by removing paragraph (g).
54. 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.
[[Page 30529]]
(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.
* * * * *
55. 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:
* * * * *
56. 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.
* * * * *
57. 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
[[Page 30530]]
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.
* * * * *
58. 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.
59. 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
60. 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.
PART 319--SMALL BUSINESS PROGRAMS
61. 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).
62. 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.
63. Revise the heading of part 323 to read as follows:
[[Page 30531]]
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
64. Amend section 324.103 by revising paragraphs (b) and (c) to
read as follows:
324.103 Procedures.
* * * * *
(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 Section H. contract
clause specified in 352.270-11 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, turn the records over to the Contracting Officer,
or keep the records, in which case the contractor must take measures,
as approved by the Contracting Officer, to keep the records
confidential and protect the individuals' privacy.
* * * * *
65. Amend section 324.202 by redesignating it as section 324.203
and revising paragraph (b) to read as follows:
Sec. 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 Sec. Sec. 5.65 and 5.66; also of interest are
Sec. Sec. 5.32, 5.33, and 5.35.
PART 325--[REMOVED]
66. Remove part 325, consisting of sections 325.102, 325.108, and
325.302.
PART 330--COST ACCOUNTING STANDARDS
67. Revise section 330.201-5 to read as follows:
Sec. 330.201-5 Waiver.
(b) Requests for waivers shall be forwarded through normal
acquisition channels to the Director, Office of Acquisition Policy
(DAP).
PART 332--CONTRACT FINANCING
68. Revise section 332.402 to read as follows:
Sec. 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.
69. Amend section 332.407 by revising paragragh (d) introductory
text to read as follows:
Sec. 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:
* * * * *
70. Revise section 332.501-2 to read as follows:
Sec. 332.501-2 Unusual progress payments.
(a)(3) The approval of an unusual progress payment shall be made by
the HCA (not delegable).
71. Revise section 332.702 to read as follows:
Sec. 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.
72. Revise section 332.703-1 to read as follows:
Sec. 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.
[[Page 30532]]
(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.
73. Revise section 332.704 to read as follows:
Sec. 332.704 Limitation of cost or funds.
See subpart 342.71, ``Administrative Actions for Cost Overruns,''
for procedures for handling anticipated cost overruns.
74. Revise section 332.705-2 to read as follows:
Sec. 332.705-2 Clauses for limitation of costs or funds.
(c)(2) The Contracting Officer shall also include a clause reading
as that shown in 352.232-74 in the resultant incrementally funded
contract.
(3) The request for proposals must inform prospective offerors of
the Department's intention to enter into an incrementally funded
contract. Therefore, the Contracting Officer shall include the
provision at 352.232-75 in the request for proposals whenever the use
of incremental funding is contemplated.
Sec. 332.902 [Removed]
75. Remove section 332.902.
PART 333--PROTESTS, DISPUTES, AND APPEALS
Sec. 333.102 [Amended]
76. Amend section 333.102 by removing paragraph (a).
77. Amend section 333.103 by revising paragraph (f)(3) to read as
follows:
Sec. 333.103 Protests to the agency.
(f) * * *
(3) Protests received after award shall be treated as indicated in
FAR 33.103(f)(3).
78. Revise section 333.104 to read as follows:
Sec. 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)-(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 technical evaluation report, when applicable, and
a copy of each evaluator's rating for relevant proposals.
(L) A copy of the negotiation memorandum, when applicable.
(M) The name and telephone number of the person in the contracting
office who may be contacted for information relevant to the protest.
(N) A copy of the competitive range memorandum.
(O) Any document which is referred to in the Contracting Officer's
statement of facts. The files shall be assembled in an orderly manner
and shall include 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 to the DPCO within fourteen (14) calendar days from receipt of
the protest. The Contracting Officer shall provide the documentation
required by FAR 33.104(a)(3)(ii) to the DPCO 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 Director, Office of Acquisition Management
and Policy (Director, OAMP).
(2) If the request to make an award notwithstanding the protest is
approved by the Director, OAMP, 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
Director, OAMP, 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 Director,
Division of Acquisition Policy (DAP). 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 Director, Office of Acquisition Management
and Policy shall be the official to comply with the requirements of FAR
33.104(g).
79. Revise section 333.203 to read as follows:
Sec. 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.
80. Revise section 333.211 to read as follows:
Sec. 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
[[Page 30533]]
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.
81. Revise section 333.212 to read as follows:
Sec. 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.
82. 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]
83. Remove part 334.
PART 335--RESEARCH AND DEVELOPMENT CONTRACTING
84. 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.
* * * * *
85. Add part 339, consisting of sections 339.201-10 and 339.201-70,
to read as follows:
PART 339--ACQUISITION OF INFORMATION TECHNOLOGY
Sec.
339.201-10 Clarification.
339.201-70 Required provision and contract clause.
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
[[Page 30534]]
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
86. Revise section 342.705 to read as follows:
342.705 Final indirect cost rates.
(a) Each 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.
87. 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.
88. 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
[[Page 30535]]
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.
89. 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.
90. 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.
91. 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.
92. 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.
93. 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.
* * * * *
[[Page 30536]]
PART 352--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
94. 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, Administrator or Commissioner of the
Department of Health and Human Services; and the term ``his/her duly
authorized representative'' means any person, persons, or board
authorized to act for the Secretary.''
(b) In accordance with 52.202-1(a)(1), add the following
paragraph (h):
``(h) The term ``Project Officer'' means the person who monitors
the technical aspects of contract performance. The Project Officer
is not authorized to issue any instructions or directions which
cause any increase or decrease in the scope of work which would
result in the increase or decrease in the price of this contract, or
changes in the delivery schedule or period of performance of this
contract. If applicable, the Project Officer is not authorized to
receive or act upon any notification or revised cost estimate
provided by the Contractor in accordance with the Limitation of Cost
or Limitation of Funds clauses of this contract.''
95. Revise section 352.215-1 to read as follows:
352.215-1 Instructions to offerors--Competitive acquisition.
Insert the following paragraph (e) in place of paragraph (e) of the
provision at FAR 52.215-1:
(e) Restriction on disclosure and use of data. (1) The proposal
submitted in response to this request may contain data (trade
secrets; business data, e.g., commercial information, financial
information, and cost and pricing data; and technical data) which
the offeror, including its prospective subcontractor(s), does not
want used or disclosed for any purpose other than for evaluation of
the proposal. The use and disclosure of any data may be so
restricted; provided, that the Government determines that the data
is not required to be disclosed under the Freedom of Information
Act, 5 U.S.C. 552, as amended, and the offeror marks the cover sheet
of the proposal with the following statements, specifying the
particular portions of the proposal which are to be restricted:
``Unless disclosure is required by the Freedom of Information Act, 5
U.S.C. 552, as amended, (the Act) as determined by Freedom of
Information (FOI) officials of the Department of Health and Human
Services, data contained in the portions of this proposal which have
been specifically identified by page number, paragraph, etc. by the
offeror as containing restricted information shall not be used or
disclosed except for evaluation purposes.
The offeror acknowledges that the Department may not be able to
withhold a record (data, document, etc.) nor deny access to a record
requested pursuant to the Act and that the Department's FOI
officials must make that determination. The offeror hereby agrees
that the Government is not liable for disclosure if the Department
has determined that disclosure is required by the Act.
If a contract is awarded to the offeror as a result of, or in
connection with, the submission of this proposal, the Government
shall have the right to use or disclose the data to the extent
provided in the contract. Proposals not resulting in a contract
remain subject to the Act.
The offeror also agrees that the Government is not liable for
disclosure or use of unmarked data and may use or disclose the data
for any purpose, including the release of the information pursuant
to requests under the Act. The data subject to this restriction are
contained in pages (insert page numbers, paragraph designations,
etc. or other identification).''
(2) In addition, the offeror must mark each page of data it
wishes to restrict with the following statement:
``Use or disclosure of data contained on this page is subject to
the restriction on the cover sheet of this proposal or quotation.''
(3) Offerors are cautioned that proposals submitted with
restrictive statements or statements differing in substance from
those cited above may not be considered for award. The Government
reserves the right to reject any proposal submitted with
nonconforming statement(s).
96. Revise section 352.215-70 to read as follows:
352.215-70 Late proposals and revisions.
As prescribed in 315.208, the following provision may be included
in the solicitation:
Late Proposals and Revisions (January 2006)
Notwithstanding the procedures contained in FAR 52.215-1(c)(3)
of the provision of this solicitation entitled Instructions to
Offerors-Competitive Acquisition, a proposal received after the date
specified for receipt may be considered if it appears to offer the
best value to the Government and it was received before proposals
were distributed for evaluation, or within five calendar days after
the exact time specified for receipt, whichever is earlier.
(End of provision)
97. Amend section 352.216-72 by revising the heading and paragraph
(a)(4) of the ``Additional Cost Principles'' clause to read as follows:
352.216-72 Additional cost principles.
* * * * *
Additional Cost Principles (January 2006)
(a) * * *
(4) Bid and proposal costs do not include independent research
and development costs covered by the following paragraph, or
preaward costs covered by paragraph 36 of Attachment B to OMB
Circular A-122.
* * * * *
98. Revise section 352.223-70 to read as follows:
352.223-70 Safety and health.
The following clause shall be used as prescribed in 323.7002:
Safety and Health (January 2006)
(a) To help ensure the protection of the life and health of all
persons, and to help prevent damage to property, the Contractor
shall comply with all Federal, State and local laws and regulations
applicable to the work being performed under this contract. These
laws are implemented and/or enforced by the Environmental Protection
Agency, Occupational Safety and Health Administration and other
agencies at the Federal, State and local levels (Federal, State and
local regulatory/enforcement agencies).
(1) In addition, the following regulations must be followed when
developing and implementing health and safety operating procedures
and practices for both personnel and facilities involving the use or
handling of hazardous materials and the conduct of research,
development, or test projects:
(i) 29 CFR 1910.1030, Bloodborne pathogens; 29 CFR 1910.1450,
Occupational exposure to hazardous chemicals in laboratories; and
other applicable occupational health and safety standards issued by
the Occupational Health and Safety Administration (OSHA) and
included in 29 CFR Part 1910. These regulations are available at
http://www.osha.gov/comp-links.html.
(ii) Nuclear Regulatory Commission Standards and Regulations,
pursuant to the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et
seq.). Copies may be obtained from the U.S. Nuclear Regulatory
Commission, Washington, DC 20555-0001.
(2) The following guidelines are recommended for use in
developing and implementing health and safety operating procedures
and practices for both personnel and facilities:
(i) Biosafety in Microbiological and Biomedical Laboratories,
CDC and NIH, HHS. This publication is available at http://bmbl.od.nih.gov/index.htm
.
(ii) Prudent Practices for Safety in Laboratories (1995),
National Research Council, National Academy Press, 500 Fifth Street,
NW, Lockbox 285, Washington, DC 20055 (ISBN 0-309-05229-7). This
publication can be obtained by telephoning 800-624-8373. It also is
available at http://www.nap.edu/catalog/4911.html.
(b) Further, the Contractor shall take or cause to be taken
additional safety measures as the Contracting Officer, in
conjunction with the project or other appropriate officers,
determines to be reasonably necessary. If compliance with these
additional safety measures results in an increase or decrease in the
cost or time required for performance of any part of work under this
contract, an equitable adjustment will be made in accordance with
the applicable ``Changes'' clause set forth in this contract.
[[Page 30537]]
(c) The Contractor shall maintain an accurate record of, and
promptly report to the Contracting Officer, all accidents or
incidents resulting in the exposure of persons to toxic substances,
hazardous materials or hazardous operations; the injury or death of
any person; and/or damage to property incidental to work performed
under the contract and all violations for which the Contractor has
been cited by any Federal, State or local regulatory/enforcement
agency. The report shall include a copy of the notice of violation
and the findings of any inquiry or inspection, and an analysis
addressing the impact these violations may have on the work
remaining to be performed. The report shall also state the required
action(s), if any, to be taken to correct any violation(s) noted by
the Federal, State or local regulatory/enforcement agency and the
time frame allowed by the agency to accomplish the necessary
corrective action.
(d) If the Contractor fails or refuses to comply with the
Federal, State or local regulatory/enforcement agency's directive(s)
regarding any violation(s) and prescribed corrective action(s), the
Contracting Officer may issue an order stopping all or part of the
work until satisfactory corrective action (as approved by the
Federal, State or local regulatory/enforcement agencies) has been
taken and documented to the Contracting Officer. No part of the time
lost due to any stop work order shall be subject to a claim for
extension of time or costs or damages by the Contractor.
(e) The Contractor shall insert the substance of this clause in
each subcontract involving toxic substances, hazardous materials, or
hazardous operations. Compliance with the provisions of this clause
by subcontractors will be the responsibility of the Contractor.
(End of clause)
99. Revise section 352.224-70 to read as follows:
352.224-70 Confidentiality of information.
The following clause covers the policy set forth in subpart 324.70
and is used in accordance with the instructions set forth in 324.7004.
Confidentiality of Information (January 2006)
(a) Confidential information, as used in this clause, means
information or data of a personal nature about an individual, or
proprietary information or data submitted by or pertaining to an
institution or organization.
(b) The Contracting Officer and the Contractor may, by mutual
consent, identify elsewhere in this contract specific information
and/or categories of information which the Government will furnish
to the Contractor or that the Contractor is expected to generate
which is confidential. Similarly, the Contracting Officer and the
Contractor may, by mutual consent, identify such confidential
information from time to time during the performance of the
contract. Failure to agree will be settled pursuant to the
``Disputes'' clause.
(c) If it is established elsewhere in this contract that
information to be utilized under this contract, or a portion
thereof, is subject to the Privacy Act, the Contractor will follow
the rules and procedures of disclosure set forth in the Privacy Act
of 1974, 5 U.S.C. 552a, and implementing regulations and policies,
with respect to systems of records determined to be subject to the
Privacy Act.
(d) Confidential information, as defined in paragraph (a) of
this clause, shall not be disclosed without the prior written
consent of the individual, institution, or organization.
(e) Whenever the Contractor is uncertain with regard to the
proper handling of material under the contract, or if the material
in question is subject to the Privacy Act or is confidential
information subject to the provisions of this clause, the Contractor
should obtain a written determination from the Contracting Officer
prior to any release, disclosure, dissemination, or publication.
(f) Contracting Officer determinations will reflect the result
of internal coordination with appropriate program and legal
officials.
(g) The provisions of paragraph (d) of this clause shall not
apply to conflicting or overlapping provisions in other Federal,
State, or local laws.
(End of clause)
100. Amend section 352.228-7 by revising paragraph (d) of the
``Insurance--Liability to Third Persons'' clause to read as follows:
352.228-7 Insurance--Liability to third persons.
* * * * *
(d) The Government's liability under paragraph (c) of this
clause is limited to the amounts reflected in final judgments, or
settlements approved in writing by the Government, but in no event
to exceed the funds available under the Limitation of Cost or
Limitation of Funds clause of this contract. Nothing in this
contract shall be construed as implying that, at a later date, the
Government will request, or the Congress will appropriate, funds
sufficient to meet any deficiencies.
* * * * *
101. Revise section 352.232-9 to read as follows:
352.232-9 Withholding of contract payments.
Insert the following clause in all solicitations and contracts
other than awards made using simplified acquisition procedures:
Withholding of Contract Payments (January 2006)
Notwithstanding any other payment provisions of this contract,
failure of the Contractor to submit required reports when due or
failure to perform or deliver required work, supplies, or services,
may result in the withholding of payments under this contract unless
such failure arises out of causes beyond the control, and without
the fault or negligence of the Contractor as defined by the clause
entitled ``Excusable Delays'' or ``Default'', as applicable. The
Government shall immediately notify the Contractor of its intention
to withhold payment of any invoice or voucher submitted.
(End of clause)
352.232-74 [Removed]
102. Remove section 352.232-74.
103. Revise section 352.232-75 to read as follows:
352.232-75 Incremental funding.
The following provision shall be included in all requests for
proposals whenever the use of incremental funding is