§ 1.302-4 Foreign purchases.

Foreign purchases shall be made in accordance with the provisions of Part 6 of this title and upon compliance with any other applicable provisions of the subchapter.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.302-5 Planned emergency producer.

A "Planned Emergency Producer" is a concern with which one or more Government procuring activities have negotiated an emergency production assignment and which holds a valid planned emergency production schedule signed by the responsible Armed Services Procurement Planning Officer (ASPPO). In procurements of items for which there are planned emergency producers, such producers shall be solicited. [25 F.R. 14082, Dec. 31, 1960]

§ 1.302-6 Contracts between the Government and its employees or business organizations substantially owned or controlled by Government employees.

(a) Contracts shall not knowingly be entered into between the Government and employees of the Government or business organizations which are substantially owned or controlled by Government employees, except for the most compelling reasons, such as cases where the needs of the Government cannot reasonably be otherwise supplied.

(b) When a contracting officer has reason to believe that an exception as described in paragraph (a) of this section should be made, approval of the Head of a Procuring Activity shall be obtained prior to entering into any such contract.

(c) Nothing in paragraph (a) of this section shall authorize a "Personal Services" contract in violation of § 22-102 of this chapter.

[27 F.R. 8869, Sept. 6, 1962, as amended at 34 F.R. 13830, Aug. 29, 1969]

major issues and the resolution of particularly difficult or controversial issues. Such exchange and coordination of information is particularly beneficial during the period of procurement planning, presolicitation, evaluation, and preaward survey.

(b) Where substantial purchases of major items are involved or where the purchasing activity deems it desirable, it shall request appropriate information (on both the end item and on major subcontracted components) from other purchasing activities responsible for buying similar items. Each activity receiving such requests shall furnish the information requested. The contracting officer, early in a negotiation of a contract, or in connection with the review of a subcontract, shall request the contractor to furnish information as to the contractor's or subcontractor's previous Government contracts and subcontracts for the same or similar end items and major subcontractor components. [27 F.R. 11644, Nov. 27, 1962]

§ 1.304 Procurement of privately developed items.

[33 F.R. 7347, May 18, 1968]

§ 1.304-1 General.

It is Department of Defense policy: (a) To make all procurements on a competitive basis to the maximum practicable extent, and

(b) To provide an incentive to industry creativity by honoring the rights in data resulting from private development and by limiting the demands for such data to that which is essential for Government purposes.

It is important that the efforts directed toward increasing competition do not demand or use privately developed data in a manner which is contrary to the policies and procedures established in Subpart B, Part 9 of this chapter. Accordingly, when the two policies stated above produce situations which require the contracting officer to decide whether to procure data for future competitive procurement, the provisions of Subpart B, of Part 9 of this chapter, as supplemented by §§ 1.304-1.304-2, shall govern.

[33 F.R. 7347, May 18, 1968] § 1.304-2

ods.

Specific procurement meth

(a) Where Defense requirements are for items which are available from more

than one source as a result of either licensing, competitive copying, or independent development, the contracting officer shall seek full and free competition for such items.

(b) Where the Government desires to purchase privately developed items but does not have necessary data with unlimited rights for use in a specification for competitive procurement, the contracting officer shall use one of the following alternative procedures with preference in the order of this listing (see also § 1.313).

(1) Where practical, procurement shall be competitive using performance or other specifications, including purchase descriptions, which do not contain data developed at private expense to which the Government does not have unlimited rights. Procurement on this basis will normally not provide items of identical design. However, it frequently is not necessary that items of identical design be purchased. There are two methods of competitive procurement which may provide items of the same or of similar design and suitable performance. One of these is purchase by two-step formal advertising. The other is by the use of "brand name or equal" purchase descriptions. To encourage participation by technically oriented firms that are desirous of offering their privately developed products in competition with similar articles, procuring activities should consider incorporating a requirement in the IFB or RFP for a bid sample to be used for evaluation purposes only (see §§ 1.1206 through 1.1206-4 and 2.202-4 of this chapter).

(2) Where items of design or composition similar or identical to a privately developed item are required and it is determined that competitive procurement is not practicable, procurement should be on a non-competitive basis from the firm which developed designed the item or process or its licensees, provided productive capacity and quality are adequate and price is fair and reasonable.

or

(3) Where additional sources are required for items of design or composition similar or identical to a privately developed item in order to meet total current or mobilization requirements, and the procedures in subparagraph (1) of this paragraph cannot practicably be used to create additional sources, the developer should be encouraged to license others to manufacture such items. Pro

27

curing activities should also consider the specific acquisition by the Government of the necessary rights in data. Where complex technical equipment is involved and the establishment of satisfactory additional sources will require, in addition to data, technical assistance from the primary source, consideration should be given to the use of the leader company procurement technique (see Subpart G, Part 4 of this chapter).

(4) As a last alternative, a design specification may be developed by the Government through inspection and analysis of the product (i.e., reverse engineering) and used for competitive procurement. Reverse engineering shall not be used unless significant cost savings can be reasonably demonstrated and the action is authorized by the Head of the Procuring Activity. In the case of the Air Force this authority may be delegated to the Commanders of the Air Force Systems Command Divisions and Centers and the Air Force Logistics Command Air Materiel Areas.

[33 F.R. 7347, May 18, 1968]

§ 1.304-3 Purchase of patented items when Government is a licensee.

Award of a contract shall not be refused to a bidder/offeror merely because he is not the owner of or a licensee under any patent involved in the procurement. If, at the time a solicitation is issued, the Government is obligated to pay royalties applicable to the proposed procurement because of a preexisting license agreement between the Government and a patent owner, the solicitation shall so state and shall: (a) Identify the patents and specify the royalty rate; and (b) advise that an amount equal to the royalty which the Government will be required to pay under the license agreement will be added as an evaluation factor to each bid/offer unless the bidder/offeror includes in his bid/offer a statement that he is the owner of or a licensee under the patents. (See §§ 2.201(a) (17) and (20) and 3.501(b) (15) and (17) of this chapter.)

[34 F.R. 9262, June 12, 1969]

§ 1.305 Time of delivery or perform

§ 1.302-4 Foreign purchases.

Foreign purchases shall be made in accordance with the provisions of Part 6 of this title and upon compliance with any other applicable provisions of the subchapter.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.302-5

Planned emergency producer.

A "Planned Emergency Producer" is a concern with which one or more Government procuring activities have negotiated an emergency production assignment and which holds a valid planned emergency production schedule signed by the responsible Armed Services Procurement Planning Officer (ASPPO). In procurements of items for which there are planned emergency producers, such producers shall be solicited.

[25 F.R. 14082, Dec. 31, 1960]

§ 1.302-6 Contracts between the Government and its employees or business organizations substantially owned or controlled by Government employees.

(a) Contracts shall not knowingly be entered into between the Government and employees of the Government or business organizations which are substantially owned or controlled by Government employees, except for the most compelling reasons, such as cases where the needs of the Government cannot reasonably be otherwise supplied.

(b) When a contracting officer has reason to believe that an exception as described in paragraph (a) of this section should be made, approval of the Head of a Procuring Activity shall be obtained prior to entering into any such contract.

(c) Nothing in paragraph (a) of this section shall authorize a "Personal Services" contract in violation of § 22-102 of this chapter.

[27 F.R. 8869, Sept. 6, 1962, as amended at 34 F.R. 13830, Aug. 29, 1969]

major issues and the resolution of particularly difficult or controversial issues. Such exchange and coordination of information is particularly beneficial during the period of procurement planning, presolicitation, evaluation, and pre

award survey.

(b) Where substantial purchases of major items are involved or where the purchasing activity deems it desirable, it shall request appropriate information (on both the end item and on major subcontracted components) from other purchasing activities responsible for buying similar items. Each activity receiving such requests shall furnish the information requested. The contracting officer, early in a negotiation of a contract, or in connection with the review of a subcontract, shall request the contractor to furnish information as to the contractor's or subcontractor's previous Government contracts and subcontracts for the same or similar end items and major subcontractor components. [27 F.R. 11644, Nov. 27, 1962]

§ 1.304 Procurement of privately developed items.

[33 F.R. 7347, May 18, 1968]

§ 1.304-1 General.

It is Department of Defense policy: (a) To make all procurements on a competitive basis to the maximum practicable extent, and

(b) To provide an incentive to industry creativity by honoring the rights in data resulting from private development and by limiting the demands for such data to that which is essential for Government purposes.

It is important that the efforts directed toward increasing competition do not demand or use privately developed data in a manner which is contrary to the policies and procedures established in Subpart B, Part 9 of this chapter. Accordingly, when the two policies stated above produce situations which require the contracting officer to decide whether to procure data for future competitive procurement, the provisions of Subpart B, of Part 9 of this chapter, as supplemented by §§ 1.304-1.304-2, shall govern.

[33 F.R. 7347, May 18, 1968] § 1.304-2

ods.

Specific procurement meth

(a) Where Defense requirements are for items which are available from more

than one source as a result of either licensing, competitive copying, or independent development, the contracting officer shall seek full and free competition for such items.

(b) Where the Government desires to purchase privately developed items but does not have necessary data with unlimited rights for use in a specification for competitive procurement, the contracting officer shall use one of the following alternative procedures with preference in the order of this listing (see also § 1.313).

(1) Where practical, procurement shall be competitive using performance or other specifications, including purchase descriptions, which do not contain data developed at private expense to which the Government does not have unlimited rights. Procurement on this basis will normally not provide items of identical design. However, it frequently is not necessary that items of identical design be purchased. There are two methods of competitive procurement which may provide items of the same or of similar design and suitable performance. One of these is purchase by two-step formal advertising. The other is by the use of "brand name or equal" purchase descriptions. To encourage participation by technically oriented firms that are desirous of offering their privately developed products in competition with similar articles, procuring activities should consider incorporating a requirement in the IFB or RFP for a bid sample to be used for evaluation purposes only (see §§ 1.1206 through 1.1206-4 and 2.202-4 of this chapter).

(2) Where items of design or composition similar or identical to a privately developed item are required and it is determined that competitive procurement is not practicable, procurement should be on a non-competitive basis from the firm which developed or designed the item or process or its licensees, provided productive capacity and quality are adequate and price is fair and reasonable.

(3) Where additional sources are required for items of design or composition similar or identical to a privately developed item in order to meet total current or mobilization requirements, and the procedures in subparagraph (1) of this paragraph cannot practicably be used to create additional sources, the developer should be encouraged to license others to manufacture such items. Pro

curing activities should also consider the specific acquisition by the Government of the necessary rights in data. Where complex technical equipment is involved and the establishment of satisfactory additional sources will require, in addition to data, technical assistance from the primary source, consideration should be given to the use of the leader company procurement technique (see Subpart G, Part 4 of this chapter).

(4) As a last alternative, a design specification may be developed by the Government through inspection and analysis of the product (i.e., reverse engineering) and used for competitive procurement. Reverse engineering shall not be used unless significant cost savings can be reasonably demonstrated and the action is authorized by the Head of the Procuring Activity. In the case of the Air Force this authority may be delegated to the Commanders of the Air Force Systems Command Divisions and Centers and the Air Force Logistics Command Air Materiel Areas.

[33 F.R. 7347, May 18, 1968]

§ 1.304-3 Purchase of patented items when Government is a licensee.

Award of a contract shall not be refused to a bidder/offeror merely because he is not the owner of or a licensee under any patent involved in the procurement. If, at the time a solicitation is issued, the Government is obligated to pay royalties applicable to the proposed procurement because of a preexisting license agreement between the Government and a patent owner, the solicitation shall so state and shall: (a) Identify the patents and specify the royalty rate; and (b) advise that an amount equal to the royalty which the Government will be required to pay under the license agreement will be added as an evaluation factor to each bid/offer unless the bidder/offeror includes in his bid/offer a statement that he is the owner of or a licensee under the patents. (See §§ 2.201(a) (17) and (20) and 3.501(b) (15) and (17) of this chapter.)

[34 F.R. 9262, June 12, 1969]

§ 1.305 Time of delivery or perform

ance.

(a) The time of delivery or performance is an essential element for inclusion in a contract and must be clearly set forth in invitations for bids and requests for proposals. Delivery and performance schedules shall be designed to meet the requirements of the particular procurement, with due regard to all relevant factors, and must be realistic. Delivery and performance schedules which are unreasonably tight or difficult of attainment are inimical to full competition, inconsistent with small business policies (see § 1.702(b)(6), and may result in higher contract prices. Therefore, prior to issuing an invitation for bids or request for proposals, the contracting officer shall question any delivery requirement which appears unrealistic, and, if necessary, initiate action to make appropriate adjustments, with due attention to relevant factors such as applicable transportation factors (see part 19 of this chapter) and those listed below:

(1) Urgency of need for the supplies or services;

(2) Production time (quantity, complexity of design, etc.);

(3) Market conditions;
(4) Transportation time;
(5) Industry practices;

(6) Capabilities of small business concerns;

(7) Time for obtaining and evaluating bids or offers, and awarding contracts;

(8) Time for contractors to comply with any conditions precedent to contract performance; and

(9) Time for Government to perform its obligations under the contract (e.g., furnishing Government property to the contractor, approval of preproduction samples, and inspection).

(b) Where timely delivery or performance is unusually important to the Government, liquidated damages provisions may be used as provided in § 1.310.

(c) Invitations for bids and requests for proposals shall, except where clearly unnecessary, inform bidders or offerors of the basis on which their bids or proposals will be evaluated with respect to time of delivery or performance.

[25 F.R. 14083, Dec. 31, 1960, as amended at 33 F.R. 15380, Oct. 17, 1968]

(a) Delivery schedules may be expressed in terms of

(1) Specific calendar dates (e.g., on or before, July 1, 1968);

(2) Specified periods from date of contract (i.e., date of award or acceptance by the Government, or date shown on contract document as effective date of contract); or

(3) Specified periods from date of receipt by contractor of notice of award or acceptance by the Government (including notice by receipt of contract document executed by the Government). The full period which the Government holds out as being available for contract performance should not be curtailed to the prejudice of the contractor by delay in giving notice of award. Accordingly, one of the provisions in paragraph (b) or (c) of this section shall be used in advertised procurements and may be suitably modified and used in appropriate negotiated procurements (other than small purchases).

(b) Where the delivery schedule is in terms of specific calendar dates, invitations for bids will include one of the following provisions:

(1) The foregoing delivery requirements are based on the assumption that the Government will make award by [purchasing activity, insert calendar date]. Each delivery date in the delivery schedule set forth herein will be extended by the number of calendar days after the above date that the contract is in fact awarded. Attention is directed to paragraph 10(d) of the Solicitation Instructions and Conditions, which provides that a written award mailed or otherwise furnished to the successful bidder results in a binding contract. Therefore, in computing the available time for performance, the bidder should take into consideration the time required for notice of award to arrive through the ordinary mails. (August 1967)

(11) The foregoing delivery requirements are based on the assumption that the successful bidder will receive the notice of award by [purchasing activity, inserting calendar date]. The Government will extend each delivery date in the delivery schedule set forth herein by the number of calendar days after the above date that the contractor receives notice of award: Provided, That the contractor promptly acknowledges such receipt. (April 1959)

(c) Where the delivery schedule is based on the date of contract (see paragraph (a) (2) of this section), the invitations for bids will include the following provision: