proval requests or negotiation memoranda; and (10) Participation in discussions with reviewing authorities regarding the treatment accorded costs in negotiations in which the liaison auditor participated. assistance. The (d) Negotiating "team concept" in negotiated procurement shall be utilized to the maximum extent practicable. As may be evident from the foregoing, this includes, in appropriate cases, participation of the liaison auditor or field auditor in both prenegotiation and negotiation meetings internally and with the contractor whenever (1) substantial amounts of costs are questioned, (2) cost considerations are influenced by method of accounting, or (3) any other cost or accounting matter of substance requires professional accounting assistance in its disposition. Operation under the team concept, however, does not relieve the contracting officer of the sole responsibility of controlling and conducting negotiations and making final determinations with respect to prices, nor does such participation change the auditor's position to other than advisory. (e) Special audit services available. In addition to the advisory audit reports enumerated in paragraph (b) of this section the cognizant audit offices will furnish upon request, special reports on aspects of the contractor's general operations or on matters pertaining to specific contracts such as: (1) Accounting practices and internal controls, especially the adequacy with respect to the administration of various types of flexible price contracts; 43 Subpart E-Procurement of Blind-Made Supplies 1205.505 Clearances. 1205.505-50 Statement of nonavailability. Subpart F-Procurement of Printing and Related Supplies 1205.601 Printing and related supplies. Subpart G-Procurement Under the Economy Act From or Through Another Federal Agency 1205.750 Procurement of items from Commodity Stabilization Service (CSS), U.S. Department of Agriculture. Subpart H-Procurement of Certain Utility Services by Use of General Services Administration Area Contracts [Reserved] Subpart I Use of General Services Administration Supply Sources by Prime Contractors in Performing Cost-Reimbursement Type Contracts 1205.907 Contract Clause. Subpart J-Procurement for the National Aeronautics and Space Administration [Reserved] Subpart K-Coordinated Procurement [Reserved] Subpart L-Commodity Assignments [Reserved] AUTHORITY: The provisions of this Part 1205 issued under R.S. 161, sec. 2(a), 72 Stat. 514, secs. 2202, 2301, 2314, 70A Stat. 120, 127, sec. 1, 76 Stat. 528; 5 U.S.C. 22, 171a(c); 10 U.S.C. 2202, 2301-2314; DoD Directive 5105.22, November 6, 1961. SOURCE: The provisions of this Part 1205 appear at 28 F.R. 2639, Mar. 19, 1963, unless otherwise noted. Subpart A-Procurement Under Federal Supply Schedule Contracts § 1205.101 Federal Supply Schedule Contracts. (a) Responsibilities. While the General Services Administration (GSA) awards Federal Supply Schedule contracts and exercises general supervision over such contracts, ordering officers who are authorized to place orders under mandatory contracts are responsible for issuing delivery orders, determining that performance meets contract terms, and processing payments. Ordering officers have the same responsibilities for delivery orders issued under optional type contracts when the orders are accepted by the suppliers. Subject to the provisions of the contracts and the conditions stated in this section ordering officers shall deal directly with contractors for the following: (1) Arranging for inspection of supplies or services. (See §§ 14.101(b) and 14.106 of this title for type and extent of inspection required); (2) Accepting or rejecting supplies or services tendered. (Nonconforming supplies or services tendered may be accepted as provided in § 14.205 of this title); (3) Terminating the contract for default in accordance with provisions of § 8.602-3 of this title and § 1208.602-3. (4) Purchasing replacement supplies or services and charging excess costs against the defaulting contractor. (See paragraphs (b) and (c) of this section concerning liaison with GSA on excess costs); and (5) Processing payments to contractor for supplies or services accepted. (b) Alleged excusable failure by contractor. Should the contractor allege that the failure in performance was due to an excusable cause precluding assess ment costs under the provisions of the contract, the GSA office executing the schedule contract shall be notified promptly. In the absence of a decision on the contractors appeal, by the contracting officer executing the contract, or by the GSA Administrator or his duly authorized representative the ordering officer is free to charge against the contractor any excess cost resulting from the default. When the ordering officer is aware that the defaulting contractor has alleged the failure to be excusable, he may elect to postpone the assessment of excess costs until a decision is made in order to avoid unnecessary accounting actions. (c) Failure to collect excess costs. The ordering officer shall report to the GSA office executing the Federal Supply Schedule Contract involved, those instances where they have been unsuccessful in collecting excess costs which have accrued against a defaulting contractor. Reports shall be made within 45 days from date of final payment to the new contractor from whom the replacement purchase was made and may be in letter form. Such reports shall provide complete information SO as to identify properly the transaction and furnish necessary data, such as the name of the defaulting contractor, contract number, item number and description, schedule price, and the amount of excess costs to be collected. In addition, complete information shall be reported concerning the supplier from whom substitute purchase was made, such as the name and address of the supplier, purchase price, order number or numbers on which payment was made, and contract number, if any. (d) Disputes. All disputes concerning questions of fact arising under the contract which cannot be settled satisfactorily between the ordering officer and the contractor shall be decided by the GSA contracting officer executing the contract, or on appeal, by the GSA Administrator or his duly authorized representative. § 1205.102 Mandatory Federal Supply Schedules. § 1205.102-2 Exceptions to mandatory use. When an emergency purchase is made on the open market of supplies or services, listed in Federal Supply Schedules as mandatory on the Depart ment of Defense, finding will be made by the contracting officer that "the purchase was justified because such supplies or services could not be furnished under Federal Supply Schedule contracts at the time they were required". The determination that the supplier could not furnish such supplies or services by the time required can be made only if the suppliers in the applicable schedules have been given the opportunity to so state. In each instance, the finding will set forth the specific reasons why the time element made the emergency purchase necessary and a copy of the finding will be retained in the contract file. (a) Upon issuance of a delivery order to a mandatory Federal Supply Schedule contractor, the ordering office will record the obligation for the order and support the fiscal recording of obligation with a price extended copy of the order. (b) Upon issuance of a delivery order to a non-mandatory Federal Supply Schedule contractor, the ordering office will record the obligation upon issuance of the order if it is not a small purchase. Either recording action will be supported by a price extended copy of the order. (c) When the order is less than the minimum limitation of the Federal Supply Schedule, the ordering office will determine its source of supply and place the order accordingly. Subpart B-Procurement From Gen- Through Federal Supply Service Consolidated Purchasing Program § 1205.303 Order for supplies or serv ices. An order required to be placed with the National Buying Program of the General Services Administration will be recorded as an obligation at the time the order is placed: Provided, That it has been determined that the delivery requirements can be met, as required by § 5.301 of this title. The obligation will be supported by a price extended copy of the order. Subpart D-Procurement of PrisonMade Supplies § 1205.404 Mandatory procurement of prison-made supplies. (a) Purchasing Offices will obtain directly from Federal Prison Industries, Inc. (FPI), information concerning the extent of participation desired by FPI in a procurement or applicable clearance from FPI for all or part of the procurement. (b) Where feasible and practicable, available procurement program forecasts should be jointly reviewed through the media of arranged conferences to assure orderly programming and scheduling of mandatory items in proper increments throughout the fiscal year. Such procedure will permit the use of longer term contracts, thus reducing the number of contracts to be administered, or the issuance of general clearances on mandatory items where total FPI capacity has been utilized, thereby eliminating delays in procurement actions to be initiated from other sources. (c) Heads of procuring activities will assure that action is taken to advise the FPI of requirements to be procured as soon as possible after receipt of the purchase request, so that maximum lead time may be available to FPI where they desire to participate. § 1205.405 Nonmandatory procurements of prison-made supplies. § 1205.405-50 General. Contracting officers will obtain information from Federal Prison Industries, Inc. (FPI), concerning the extent of participation desired by FPI. (For exceptions, see § 5.407 of this title.) § 1205.406 Procurement procedure. § 1205.406-50_Pricing policies for awards to Federal Prison Industries, Inc. (a) Awards to FPI. (1) Prices in awards to FPI for partial or entire quantity of a procurement will not exceed current market prices. (2) On procurement involving multiple awards to both commercial contractors and to FPI of a mandatory item, the current market price will be a price considered by the contracting officer to reflect current market levels but in no event a unit price higher than the highest award price made on the unrestricted portion adjusted for the applicable cost factors designated herein, unless it is determined that such price was the result of a distressed bid, bidders mistake, or inflated because of Department of Defense requirements. In awards involving multiple destinations, each destination, for purposes of determining price to be paid FPI, will be considered a separate award. The term "unrestricted" as used in this part refers to the portion of the procurement not procured from Federal Prison Industries irrespective of whether a small business or labor surplus area set-aside has been made thereon. (3) When a procurement action involves allotment to FPI of the entire quantity of the required item and current market quotations are not available, prior procurement prices (adjusted to reflect changes in market prices of components since last procurement and differences in any other cost factors, i.e., labor, operating supplies, employee fringe benefits) will be used as the basis for determining the current market price. (4) A quotation from FPI at or less than the determined current market price will be accepted. (5) Awards to FPI will be on a f.o.b. origin basis unless otherwise specified. (6) Prices for FPI contracts will be rounded off to the nearest mill. (b) Cost factors in determination of current market price. (1) Factor to be excluded: Cost of transportation of government furnished property to both FPI and to commercial contractors. (2) Factors to be included: (i) Differences in government transportation costs of end items to same destination point under FPI award and under awards to commercial contractors. (ii) Variation in cost of governmentfurnished property, based on stated percentages of usage of government furnished property allowances. (c) Lack of information for or agreement on award price on mandatory procurement. Firm delivery orders will be given to FPI promptly upon determination of the quantity to be awarded FPI. The following procedures are to be utilized in determining prices to be included on these delivery orders: (1) When a concurrent commercial procurement is being made, the price quoted by FPI will be cited on the delivery order and the statement provided in (5) of this paragraph will be included on the order. In the event the current market price determined by the contracting officer under the "unrestricted" procurement is lower than the quoted FPI price, adjustment will be made to the lower price: Provided, however, That in the time elapsed between the delivery order to FPI and the opening date on the "unrestricted" portion, there has been no significant change in market conditions. Should there have been a significant change in market conditions, the current market price for the FPI order will be determined under the provisions of paragraph (a) (3) of this section. (2) When the circumstances described in paragraph (a) (3) of this section exist, immediate action will be taken to determine the current market price. Should such price be lower than the quoted price, prompt contact will be made by the most expeditious means with the FPI and the circumstances and factors used in such determination explained. Should an agreement not be reached as to the current market price within five consecutive days from date of contract, the order will be promptly issued on the basis of the current market price determined by the contracting officer, and the statement provided in subparagraph (5) of this paragraph will be included on the delivery order. (3) After issuance of a delivery order containing the statement in subparagraph (5) of this paragraph. Every effort will be made by the purchasing office to reach an agreement as to the current market price applicable to the order. Agreements reached will be confirmed by a revision to the delivery order stating price applicable to the order and deleting the statement in subparagraph (5) of this paragraph. (4) Efforts to obtain agreement, to include exchange of data on which current market price was based, may continue up to the time of inspection and acceptance of the first delivery for payment. If agreement should not be reached by that time, the case will be submitted to the Executive Director, Procurement and Production, DSA, as unresolvable and will contain a detailed explanation of the factors determining the current market price which was not acceptable to the FPI. (5) Statement to be included on delivery order to FPI pending determination of current market price is as follows: The price in this contract is subject to later adjustment between the Commissioner of the Federal Prison Industries, Inc., and the Executive Director, Procurement and Production, Defense Supply Agency, and the arbitration provisions of Section 4124 of Title 18, United States Code shall not be invoked except in the case of a disagreement on the part of the Commissioner of the Federal Prison Industries, Inc., and the Executive Director, Procurement and Production, Defense Supply Agency. Subpart E-Procurement of BlindMade Supplies § 1205.505 Clearances. § 1205.505-50 Statement of nonavailability. A copy of the statement of nonavailability furnished by National Industries for the Blind will be attached to the General Accounting Office copy and official office file copy of each contract placed with a commercial source. Subpart F-Procurement of Printing and Related Supplies (a) The CSS will be queried relative to supplying at least carlot items listed in Commodity Credit Corporation (CCC) monthly inventories or an f.o.b. destination offer from CCC. Written requests will be forwarded to: Office, Deputy Administrator, Price Support, (b) Requests for offers will state: (3) Packaging and packing requirements. (4) Required delivery dates. In all communications with CSS/CCC relative to proposed procurements, ad vice will be furnished that the procurement information is not to be disclosed to unauthorized sources. (c) If the U.S. Department of Agriculture advises that no quotation will be submitted or that they are unable to meet specification requirements, the procurement will proceed from commercial sources in the usual manner. (d) If a quotation is received from the Department of Agriculture, and the commodity meets the specifications and requirements, a comparative price analysis will be made to determine whether the price(s) quoted exceeds current market prices from commercial sources. The comparative analysis will take into consideration applicable adjustments for crop or pack year; packing, shipping, and handling charges. (e) If the analysis indicates that the price quoted exceeds current market price, CCC will be advised with a view to obtaining a price not in excess of current market price. (f) If the CC price is equal to or lower than the current market price, the order will be placed with CCC, otherwise, procurement will be made from commercial sources in the usual manner. (g) If it is determined that procurement will be made commercially because of price or specification consideration, the CCC will be so advised. (h) If it is found that offers from commercial sources will result in a higher cost than acceptance of the CCC offer, negotiations will be reopened with CCC. (i) Inspection of items procured from CSS will be made in conformance with established inspection procedures. (j) The following will apply to all procurements of bagged commodities from CSS: An official weighmaster's certificate based on origin weights shall accompany each shipment and a copy shall be attached to the CCC invoice. CCC invoice shall be for the number of pounds shown on the official weighmaster's certificate. Quantity receipted for by receiving officer at destination shall be the same quantity less damage in transit, except where a different quantity is actually received. In either event receiving officer will prepare DOD 808 report and attach to receiving report submitted to paying office. Over or short shipment adjustment to be requested in instances where number of bags unloaded differs from number shown on documents accompanying shipment in which case receiving officer shall accompany report with bag tally, or with an official |