chase Orders issued to satisfy requisitions bearing UMMIPS priority 01 through 06 shall be assigned Surveillance Criticality Designator B.

Subpart B-Production Reporting § 1225.202 Recurring production progress reports by contractors.

The requirement for Production Progress Reports (DD Form 375) will be limited to the following and then only when circumstances make such reporting appropriate:

(a) Items required to satisfy requisitions bearing UMMIPS priority 01

through 06.

(b) Items that have been designated by the DSC Commanders as being in a critical supply position.

(c) Items on the DOD, Military Service, or DSA critical list.

(d) Items in direct support of the DOD MUL categories.

(e) Items reported to HQ DSA under DOD Instruction 4200.14, Production Acceptances covering selected major items of munitions and equipment.

(f) Items which require Material Readiness Studies under DSAR 4140.3. (g) Contractors on the Military Services or DSA Contractor Experience List.

PART 1230-APPENDIXES

Appendix E-DSA Contract Financing Regulations.

Appendix S-The DSA Small Business Program.

Appendix E-DSA Contract Financing Regulations

E-001 Purpose. This appendix outlines the methods by which the provisions of ASPR Appendix E will be applied in DSA (other than DCASRS).

E-003 Implementation. Changes and additions to, as well as interpretations of, this appendix will be developed within the Accounting and Finance Division, Office of the Comptroller, HQ DSA.

PART 2-BASIC POLICIES E-200 Scope of part.

E-200.50 Submission of contractual instruments for audit by the U.S. General Accounting Office. DSA contractual instruments required by the U.S. General Accounting Office for audit purposes must be submitted to one of the Military Service finance centers. The appropriate center for a specific DSA contractual instrument can be determined by reference to the accounting and finance (disbursing) office designated to make payment under the basic contractual instrument, e.g., if the disbursing office

operates under an Army disbursing station number, the contractual instruments should be transmitted to Indianapolis. The addresses of these centers are as follows:

Army:

Processing and Disposal Branch, Retained Accounts Division, Settlement Operations, Finance Center, U.S. Army, Indianapolis, Ind. 46249.

Air Force:

Air Force Accounting and Finance Center, Attention: SAA, 3800 York Street, Denver, Colo. 80205.

Navy:

Navy Finance Center, Administrative Services Department, Code S, Cleveland, Ohio.

Marine Corps:

Commandant, Marine Corps, Headquarters, Washington, D.C. 20380.

E-218 Deviations-Amendments.

E-218.50 Submission of request for deviations. Request for authority to deviate from the provisions of ASPR Appendix E will be submitted (in an original and four copies) to HQ DSA, Attention: DSAH-CF.

E-219 Interpretations. Problems of interpretations and applications of the type indicated in ASPR E-219 should be transmitted to HQ DSA, Attention: DSAH-PP. This office will effect any necessary coordination with the DSA Contract Financing Office and determine whether dissemination to the other procuring activities is appropriate.

E-220 Foreign procurement.

E-220.50 Use of foreign currencies. Foreign currencies owned by the U.S. Government shall be used, when feasible, to make payments under contracts in foreign countries. The provisions of DSAR 7000.2, Use of U.S.-owned Foreign Currencies for Payment of Contracts in Foreign Countries, will govern.

PART 3-GUARANTEED LOANS E-303 Procedure on application of a private financing institution.

E-303.50 Submission of applications and supporting documents. Any application based on a contract which cites or will cite DSA funds will be transmitted to HQ DSA, Attention: DSAH-CF. This address will be used regardless of the office responsible for administration of or payment under the

(b) The single central accounting office responsible for maintaining the accounting records of the DSA's guaranteed loan program is the Office of the Comptroller (Contract Financing Office), HQ DSA.

(c) The single disbursing office which shall be responsible for taking up all collections and making all disbursements incident to DSA's guaranteed loan program is the Accounting and Finance Office, Disbursing Symbol 5016, DSASC, Cameron Station, Alexandria, Va. 22314.

PART 4-ADVANCE PAYMENTS

E-412 Action by contracting officerapproval.

E 412.50 Transmittal of documents. The contracting officer's report should be forwarded in original and two copies in the format and outline indicated by ASPR E-412. Unless otherwise requested, the contracting officer should furnish the items indicated by ASPR E-412 (v) and (vi); this action will normally obviate the need for the separate comments required by ASPR E-412(vii). If the contracting officer recommends disapproval (ASPR E-412.1) he should include suggestions as to alternate financing methods. The documents should be transmitted to HQ DSA, Attention: DSAH-CF, if the contract cites DSA funds; the office administering or making payments under the contracts or maintaining the allotments records to which the payment will finally be charged are not pertinent.

E-412.51 Accounting and disbursing procedures. Each of the three Military Departments employ different accounting and disbursing procedures for making and recouping advance payments. The prescribed procedures of each Department meet the requirements for advance payments and recoupments made under contracts citing DSA funds; therefore, the paying office designated In the contract and/or the allottee or suballottee, depending upon the local arrangement, should utilize the procedures outlined by the Military Department under which paying office operates.

PART 5-PROGRESS PAYMENTS BASED ON COSTS progress payments

E-505

Unusual

standards-procedures.

The

E-505.50 Submission of requests. documents indicated in the third subparagraph ASPR E-505, if the request concerns a contract which cites DSA funds, will be submitted for coordination and approval to HQ DSA, Attention: DSAH-CF. The command jurisdiction of the office administering the contract, making payments on the contract or maintaining accounting records of the allotment or suballotment which will be charged for the payment is not pertinent. E-506 Accounting system and controls. E-506.50 Accounting and disbursing procedures. Each of the three Military Departments employs different accounting and disbursing procedures for making progress payments. The prescribed procedures of each

Department meet the requirements for progress payments made under contracts citing DSA funds, therefore, the paying office designated in the contract and/or the allottee or suballottee should utilize the procedures outlined by the Military Department under which the paying office operates. Allottees and suballottees of DSA funds, whose allotments or suballotments are charged with progress payments, will render the same type of report to the allottor or suballottor as are required by the Military Department procedures under which the disbursing office, which services the allottee or suballottee, operates. The "same type report" means the same format, form, content and due dates prescribed by the appropriate Military Department directive. Allottees may consolidate the reports of suballottees or transmit them as received. Reports on progress payments should be submitted to the HQ DSA, Attention: DSAH-CF.

PART 6-CONTRACT DEBTS INTEREST—
DEFERRED PAYMENTS

Follow directions contained in DSAM 7000.1, chapter 12, sections I and II, and figures 12-1, 12-2, 12-3, 12-4, and 12-11. [34 F.R. 17289, Oct. 24. 1969]

Appendix S-The DSA Small
Business Program

PART I-INTRODUCTION

S-101 Scope of program. The DSA Small Business Program set forth in this Appendix is in addition to the provisions of ASPR I, Part 7; and to those of DSPR I, Part 7.

S-102 Applicability of program. This Program is applicable to all elements of DSA, both headquarters and field activities. S-103

Revision. Changes and additions to this Appendix will be the responsibility of and will be promulgated by the DSA Small Business Advisor.

S-104 Definitions.

S-104.1 Commodity is the item represented in a single FSC Class, or individual items within that class as may be governed by supplier groups in accordance with industry practice. For the purpose of this program "Commodity" includes "service." S-104.2 Principal Commodities any supply center, are those commodities (not to exceed 20) with the largest dollar value procurement programs for a specific fiscal year.

in

S-104.3 Secondary Commodities in any supply center, shall be all commodities other than principal commodities.

S-104.4 National Percentage is the percentage contributed by small business firms to the total dollar value of the national output of all firms in a given industry. (See S-304.)

S-104.5 Reasonable expectation or reasonably expect is a term used to describe, with respect to any commodity, the maximum percentage of a supply center's purchases awardable to small business. This percentage is computed by adjusting the

national percentage to reflect differences between military and civilian markets, traffic patterns, standards, characteristics and requirements.

S-104.6 "Pay Dirt" Commodity is a principal commodity for which the percentage of dollars awarded by DSA to small firms is substantially below the percentage which DSA might reasonably expect to award to such firms.

are

S-104.7 Improvable Commodities principal commodities (other than "pay dirt") and those secondary commodities for which there is a reasonable expectation of improvement in the percentage of awards to small business.

S-104.8 Terminal Commodities are those commodities for which there is no reasonable expectation that the percentage of awards to small firms can be increased.

Part II-Basic Policies

S-201 Scope. This part sets forth basic policies governing the DSA Small Business Program.

S-202 Relation of small business program to the DSA mission. The Small Business Program shall be conducted as an integral element in the DSA mission to achieve effective and efficient military supply.

S-203 Increasing small business competition. A continuing effort must be made to stimulate the maximum qualified competition for DSA contracts, with special emphasis directed toward promoting that of small business firms. Contracting personnel should prepare IFB's, RFP's, RFQ's, or NIP's so as to preclude insertion of provisions that may limit competition from small business firms. S-204 Impediments to increased competition by small firms. All cognizant personnel shall take all practicable actions to reduce the impediments to increase small business participation in DSA procurement programs. Among such impediments are:

(1) The complexity of bid and contract forms, and of specifications;

(ii) Sole source and proprietary items;
(iii) Restrictive specifications;

(iv) Unnecessary Qualified Products Lists; (v) Failure of the purchasing office to synopsize; and

(vi) Procedural obstacles, such as unnecessary short advertising time, unnecessary "all or none" procurement, etc.

S-205 Information on subcontracting opportunities. Procurement officials and Small Business Specialists shall take all possible and reasonable actions to inform small business firms of subcontracting opportunities being offered by prime contractors.

S-206 Cooperation with other federal, state and local agencies, and private organizations. In conjunction with efforts to seek qualified new sources of supply in order to increase small business competition for DSA contracts, cooperation and assistance may be enlisted from field offices of U.S. Government agencies listed and other local organizations including, but not limited to:

Governors' and Mayors' Advisory Councils.
State Development Commissions.
Chambers of Commerce.

Trade Associations.
Trade and Local Press.
Service Clubs.

Other Businessmen's Groups.

All contacts at Departmental level with the above Federal agencies will be made through the DSA Small Business Advisor. Any agreements or arrangements with agencies and organizations shall be subject to all applicable laws and regulations.

S-207 Participation in procurement clinics, fairs, etc.

(a) To the maximum extent practicable supply centers shall participate in industrial assistance events. These include procurement clinics, small business opportunity fairs and workshops, expositions, and similar activities designed to increase the competition of qualified small business firms for Government contracts.

(b) Participation in these events should be primarily directed toward attendance by Small Business Specialists and procurement personnel for the purpose of counseling and advising businessmen on how they may do business with DSA. Exhibits of DSA items, talks by DSA officials, and the showing of relevant DSA films may be included when appropriate.

(c) The type of participation by each center should reflect the extent to which the businessmen attending the event may be potential supply sources for DSA. Efforts should be made to announce procurements of items of interest to these businessmen in time to permit appropriate counseling at the event.

(d) An individual supply center may also develop and sponsor industrial assistance events oriented exclusively to its own procurement programs. Planning for such events should be effected n close coordination with the DSA Small Business Advisor.

(e) Participation in industrial assistance events shall be conducted in accordance with the DOD Industrial Assistance Events Program.

PART III-COMMODITY CLASSIFICATION

S-301 Scope. This part covers the procedures for the classification of commodities. S-302 Identification of principal commodities.

(a) Each center shall provide the DSA Small Business Advisor with a list of current fiscal year principal commodities as soon as

they can be identifie Each center shall indicate, where possible, the approximate dollar value of the proposed fiscal year procurement program for each principal commodity and the approximate percentage generally awarded to small business.

(b) Each center will inform the DSA Small Business Advisor immediately whenever changes are made in the procurement program which modify the Principal Commodity List.

S-303 Identification of secondary commodities. A list of secondary commodities is not required to be provided to the DSA Small Business Advisor. However, the centers will note those secondary items with the largest proposed annual procurement programs, and add them to the Principal Commodity List whenever the expected dollar volumes So warrant.

S-304 Determination and use of national percentages.

(a) The DSA Small Business Advisor using Department of Commerce information shall:

(i) Determine the "national percentage" for industries of interest to DSA; and

(ii) Convert these industry data to the commodity data upon which DSA procurement programs are based.

(b) Centers using the converted national percentages as a guide, will determine the percentage of total anticipated dollar volume for the fiscal year that could reasonably be expected to be awarded to small business firms for each principal commodity.

S-305 Identification of "Pay Dirt" commodities.

(a) The Small Business Specialist will compare the percentage as determined in S-304(b) above, for each principal commodity with the actual percentage which was awarded to small firms in the most recent fiscal year.

(b) After review of these comparisons for each principal commodity, the DSA Small Business Advisor, the cognizant Small Business Specialist, and center procurement personnel will determine which of the principal commodities should be classed as "pay dirt" commodities. (See S-104.6.)

S-306 Identification of improvable commodities. No identification need be made of "improvable commodities" (see S-104.7) until requested by the DSA Small Business Advisor.

(iii) The priorities governing the efforts of the supply centers and of HQ DSA, for increasing the number of small business firms submitting bids for DSA contracts.

S-402. Sources of Information. (See S-206.) S-402.1 Federal Government agencies. The DSA Small Business Advisor will initiate and develop with other Federal and State agencies all necessary arrangements to enlist their assistance in the identification of new small business sources. The DSA Small Business Advisor will decentralize to the centers, as soon as possible, the further development and implementation of such arrangements at the field level.

S-402.2 Local Government organizations. Initiation and development of all arrangements and agreements with local government organizations (with the exception of those organizations with representatives in Washington, D.C.) shall be the responsibility of the centers.

S-402.3 Non-Governmental organizations. In general, arrangements and agreements with non-Governmental organizations, national in scope, will be initiated and developed by the DSA Small Business Advisor in coordination with the DSA Special Assistant for Public Affairs. Similar contacts with local organizations shall be effected at the centers.

S-402.4 Industrial assistance events. All DSA personnel participating in "Industrial Assistance Events", shall make every effort to identify attending representatives of small business firms not currently competing for DSA contracts. Representatives of those firms should be introduced to the attending DSA Supply Center Small Business Specialists for discussion and possible assistance.

S-402.5 Inactive names on bidders lists. Contracting officers will provide to Small Business Specialists the names of small firms which respond to DSA Invitations for Bids or Requests for Proposals, but do not submit bids. These firms should be designated for future approach and counseling service. (See Part V.)

S-403 Contacting new small business

Government procurement. This will be done in coordination with the DSA Special Assistant for Public Affairs. This fully coordinated staffing procedure will afford maximum usage of the numerous Government-industry activities being conducted by Headquarters, DSA. The approved plans will be implemented to the centers as expeditiously as possible.

S-403.3 Geographical responsibilities. Each center shall assist in the development and implementation of campaigns to attract new small business sources in its geographical area for particular commodities (e.g., "pay dirt" commodities), irrespective of the commodity responsibilities assigned to the center.

S-404 Priorities. The first priority of effort will be given to the increasing of competition for "pay dirt" commodities; then for improvable commodities; and lastly for terminal commodities.

S 404.1 Within each center. Maximum efforts shall be made to increase qualified small business competition for specific items in accordance with the priorities set forth above. This effort must be part of a coordinated procurement plan in order to assure that related invitations for bids or requests for proposals will be publicly announced coincidentally with such effort.

S-404.2 Within HQ DSA. The DSA Small Business Advisor will determine, in coordination with the Special Assistant for Public Affairs, priorities for DSA-wide efforts to increase qualified small business competition for DSA contracts.

S-405 Continuing actions. DSA-wide efforts to increase qualified small business competition will be conducted on a commodity basis. All centers will participate to the optimum extent. In those centers where geographical considerations do not require major efforts to support a DSA-wide special program to increase competition for a specific commodity, actions taken to develop new small business sources will be conducted in accordance with the priorities set forth in paragraph S-404 above.

Part V-Counseling Assistance

S-501 Scope. This part covers the general objectives of counseling, and provides guidance to the Small Business Specialist in the conduct of his counseling activities. It also covers the materials that may be used in counseling practice.

S-502 Objectives. Each Small Business Specialist shall develop a personalized approach to, and pattern for, his counseling activities, to include the following concepts:

(1) The basic attitude toward counseling must be that of "service" to the businessman. Each DSA Small Business Specialist is a counselor for all DSA centers. Under no circumstances is an inquiry to be handled casually in an endeavor to dispose of the problem with the least amount of effort, nor should an inquirer be told to get in touch

with another DSA center. When a Small Business Specialist determines that an inquirer's problem can best be handled in another DSA center, he should make the necessary contact, introduction, and appointment. To the maximum extent possible, the same approach should be taken when the inquirer's problem must be handled by another element of the Department of Defense or by another Government agency.

(ii) The major objective of counseling is to attract the maximum number of qualified competitors for DSA contracts.

(iii) A supporting objective of counseling is to provide as complete as possible service to all inquirers. Whether or not a businessman is found to be a potential bidder for DSA contracts, efforts shall be made to identify for him other Government agencies which might be interested in what he has to offer.

S-503 Limits of counseling. The primary role of the Small Business Specialist is to assist a businessman in his attempt to do business with DSA and, secondarily, with other element of the U.S. Government. The Small Business Specialist, however, must not attempt to interpret invitations for bid, specifications, or related documents. In the event that the need for such interpretation becomes evident, the Small Business Specialist shall arrange for the businessman an interview with the appropriate contracting officer or his designee.

S-504 Publications.

(a) Small Business Specialist shall maintain adequate stocks of all Government publications designed to assist the operator of a small business in his approach to selling to DSA and to other elements of the U.S. Government. The Specialists must have available for reference the cataloging handbooks, Federal Supply Classifications, regulations, and directories necessary to provide adequate information to inquiring businessmen.

(b) The DSA Small Business Advisor will serve as a focal point for arranging for the initial distribution and replenishment stockage of those publications made available by Government agencies; and will assist, if requested, in arranging for replenishment of these documents.

(c) Centers are urged to develop pamphlets and brochures describing the opportunities for businessmen which they provide. When these documents are published, provisions shall be made to supply the DSA Small Business Specialists in the other supply centers and the DSA Small Business Advisor with an initial stock of 50 copies. The initial distribution shall be accompanied by instructions for replenishment. The provision of copies for the Special Assistant for Public Affairs should be coordinated with the local Public Affairs Office.

S-505 Display rooms. Each center except DPSC shall provide as soon as possible, an adequate display room in which the following shall be displayed: