Subpart H-Price Negotiation Policies and Techniques 1203.804 Conduct of negotiations. 1203.804-2 Late proposals. 1203.809 Audit as a pricing aid. 1203.810 1203.811 Exchange of information. Record of price negotiations. Subpart 1-Subcontracting Policies and AUTHORITY: The provisions of this Part 1203 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 1203 appear at 28 F.R. 2635, Mar. 19, 1963, unless otherwise noted. Subpart A-Use of Negotiation § 1203.200-50' Negotiation techniques. Where negotiation is contemplated and any determination and finding by the Assistant Secretary of Defense (I&L) is required, it is generally considered inappropriate to solicit offers, to hold meetings with potential contractors, or to take other actions concerning any form of negotiation, prior to securing Secretarial authority to negotiate. However, in the event urgency is a prime factor, solicitations of offers may be issued simultaneously with submission of the request for Secretarial authority to negotiate: Provided, That, in no event will the offers be opened or negotiations begun prior to obtaining the Secretary's signature on the required determination and findings. In such instances of urgency, the submitted request for authority to negotiate shall contain the reasons for urgency and a statement that although solicitations of offers have been released simultaneously with the submission of such request because of such urgency, the offers will not be opened or negotiations begun prior to the Secretary's signing of the determination and findings. § 1203.202 Public exigency. § 1203.202-2 Application. (a) It is DSA policy that negotiations will not be justified under the authority of 10 U.S.C. 2304(a) (2) when the award cannot be made within 30 days from the date of receipt of the purchase request by the purchasing office. (b) When negotiating under this authority, competition to the maximum extent practicable within the time allowed shall be obtained. (c) A procurement of material to effect necessary and emergency repairs to a broken water main would be appropriate under § 3.202 of this title and this section provided that the emergency conditions require immediate replacement of defective materials. This authority could also properly be cited for the emergency procurement of packing material required to effect an emergency air or rail shipment. The facts bearing on the emergency situation must clearly be shown in the determination and findings in sufficient detail to explain clearly the necessity for purchasing without formal advertising. The contracting officer's justification must be supported by the existence of specific emergency circumstances which in themselves relate to the particular purchase being effected. The facts bearing on the situation must clearly support the compelling and unusual urgency and indicate the extent to which the Government would be injured, financially or otherwise. (d) A short delivery or performance requirement in itself is not a justification for the use of 10 U.S.C. 2304(a)(2). The reasons for effecting delivery or performance by a certain date must be of such a nature that they will fully support the contracting officer's action in the use of this authority. When delivery requirements are of the utmost importance, officials supervising the issuance of procurement directives to contracting officers shall be responsible for clearly indicating in the directives the exigent importance for having the supplies delivered by certain dates, including the reasons therefor. In this connection, contracting officers should not be expected or required to negotiate contracts under this authority unless facts sufficient to support their actions are presented to them in writing. § 1203.202-50 Contract review by DSA. Nothwithstanding the requirement of § 1201.452-4 of this subchapter, the fol lowing will be submitted to the Executive Director, Procurement and Production, for review on an after-the-fact basis, unless both were previously submitted pursuant to § 1201.452-3 of this subchapter: (a) A copy of each contract negotiated under the authority of 10 U.S.C. 2304 (a) (2), and; (b) A copy of the contracting officer's determination and findings justifying the use of such authority. = § 1203.210 Supplies or services for which it is impractical to secure competition by formal advertising. § 1203.210-50 Contract review by DSA. Notwithstanding the requirement of § 1201.452-4, the following will be submitted to the Executive Director, Procurement and Production, for review on an after-the-fact basis, unless both were previously submitted pursuant to § 1201.452-3 of this subchapter. (a) A copy of each contract negotiated under the authority of 10 U.S.C. 2304 (a) (10), and (b) A copy of the contracting officer's determination and findings justifying the use of such authority. § 1203.210-51 Sole source negotiations. When the authority of 10 U.S.C. 2304 (a) (10) has been cited as the authority to negotiate a procurement of supplies or services with a sole source, as discussed in § 3.210-2 (i) of this title, and when any synopsis action pursuant to 1.1003-1 of this title results in receipt of an offer or offers more advantageous to the Government than that of the heretofore considered sole source, any contract resulting from such competitive negotiations may cite 10 U.S.C. 2304 (a) (10) as the authority for such negotiation. § 1203.215 Negotiation after advertising. 1. This procurement is for (describe scope of work or nature of property or services to be procured). 2. The proposed procurement was formally advertised under Invitation for Bids dated which was forwarded to potential suppliers. The bid price(s) received from the (sole or lowest responsive and responsible bidder was or ranged from $---. to $-----. This (These) price (prices) is (are) considered (unreasonable or were not independently reached in open competition) because (here include brief concise summary of reasons for the consideration). DETERMINATION Upon the basis of the Findings set forth above, I hereby determine that the price bid by the (sole or lowest responsive and responsible bidder) is unreasonable and may be rejected. Negotiation of a contract for this procurement is hereby authorized provided (a) that prior notice of intention to negotiate be given to each responsible bidder responding to the invitation for bids; (b) the negotiated price is lower than the lowest rejected price of any responsible bidder, as determined above; and (c) the negotiated price is the lowest negotiated price offered by any responsible supplier. 10 U.S.C. 2304 (a) (17) and section 15 of the Small Business Act. (b) Transportation services by common carriers will be negotiated under authority of section 321, Part III, Interstate Commerce Act, 18 September 1940, 49 U.S.C. 65. (c) Blind-made supplies purchased through National Industries for the Blind as prescribed in § 5.504-2 of this title will be negotiated under authority of the Act of June 25, 1938, c. 697, section 3, 52 Stat. 1196 (41 U.S.C. 48). Such purchases made for resale may be negotiated under 10 U.S.C. 2304(a) (8). Subpart C-Determinations and Findings § 1203.304 Determinations and findings by a contracting officer. § 1203.304-50 Determinations and findings for procurement negotiated under 10 U.S.C. 2304(a) (10). Each determination and finding prepared by contracting officers to justify the use of 10 U.S.C. 2304(a) (10) for noncompetitive procurement due to lack of or inadequacy of technical data or other reasons will be supported by a written statement obtained from the requiring agency showing: (a) The actions being taken (1) to avoid subsequent noncompetitive procurements of the items or services and (2) to obtain the data prescribed in § 3.108(d) of this title; or (b) A complete explanation of the reasons why efforts to obtain competitive procurements would be unavailing and therefore actions that would permit competition are not being taken. § 1203.305 Forms of determinations and findings. Determinations and findings shall be prepared substantially in the format set forth below, except those invoking 10 U.S.C. 2304(a) (15) for which see § 1203.215-51. (a) Determination and finding for cost reimbursement contracts. DETERMINATION AND FINDINGS Authority To Use Cost-Reimbursement Type of Contract Upon the basis of the following findings which I hereby make as a Contracting Officer pursuant to the provisions of 10 U.S.C. 2311 and authority delegated thereunder, the proposed contract described below may be entered into on a cost-reimbursement basis pursuant to the authority of 10 U.S.C. 2306(c). FINDINGS 1. The proposed contract with (name of supplier) for (description of services) has an estimated cost of $-- (if contract is of the CPFF type, insert, "plus-a-fixed-fee of $------, which is -% of the estimated cost exclusive of the fixed-fee"). 2. (Here set forth the facts that show why it is impracticable to secure services of the kind of quality required without the use of the proposed type of contract or why the proposed method of contracting is likely to be less costly than other methods.) approval of the Assistant Secretary of Defense (I&L). Such requests shall (1) contain, in the letter of transmittal of the submitting procuring activity, a complete statement of facts and other data necessary to support the applicability of the cited negotiation authority; (2) include, on separate plain paper, a determination and findings prepared for the appropriate signature. (b) Requests for the granting of Secretarial authority to negotiate under 10 U.S.C. 2304(a) (13) or 10 U.S.C. 2304 (a) (16) will be signed by the Head of the Procuring Activity or his Deputy. (c) General information for determinations and findings: All requests for authority to negotiate under the provisions of 10 U.S.C. 2304 (a) (11) through 10 U.S.C. 2304(a) (16) shall include when appropriate: (1) Adequate description, in nontechnical language to the maximum extent practicable, of the supplies or services to be procured; (2) The estimated quantity of supplies, or amount of services to be procured, together with the estimated monetary value thereof (the estimated total number of contracts with their estimated total monetary value, for the time period to be covered, will be stated for proposed class determination and findings); (3) Anticipated commencement and completion dates of performance of the contract, or contracts, for which the negotiation authority is requested; (4) A statement regarding the extent of competition contemplated, including the names and places of performance of those to be solicited. When competition is to be restricted, a complete justification of such action is required. An unsupported statement that "no other sources are considered qualified", or that "the named supplier is considered best qualified" is not acceptable; (5) A brief description of the basis of evaluation of offers to be used in determining the ultimate contractor when price is not to be the deciding factor; (6) A definitive statement as to the availability of drawings, specifications, or other descriptive data which would enable procurement of the requirement by formal advertising and, if not currently available, the anticipated date of availability as well as a quantitative estimate of requirements for the same or similar supplies that will be required prior to the availability of such data; (7) A statement as to whether the procurement, or procurements, will be synopsized pursuant to § 1.1003 of this title, and if negative, the identification of the exception shown in § 1.1003-1 of this title used to support such action; (8) Indication of the type, or types, of contract expected to be used in the proposed action; (9) Date of the original contract, and total funds obligated to date thereunder, if the proposed negotiation will result in a modification of a current contract, together with a statement as to whether such current contract was formally advertised, or if negotiated, identification of authority for the negotiation; (10) Circumstances supporting the proprietary or sole source position of the proposed contractor; (11) The extent of Governmentowned industrial property to be made available to the resultant contractor or contractors, and the known or estimated monetary value thereof; and (12) Any material deviation from procedures prescribed by ASPR and DSPR contemplated in the proposed contractual action, and the known or estimated monetary value thereof. (d) Specific information relating to individual circumstances: In addition to the supporting data required by paragraph (c) of this section, the information as indicated below shall also be included in support of the specific circumstance for which approval is being requested: (1) 10 U.S.C. 2304(a) (11), the state reached in the development reflected by the proposed procurement (such as items now needed for test and evaluation of the things developed), and the known or estimated sums already obligated under previous states of the research, development, experimentation, or test; (2) 10 U.S.C. 2304(a) (12), sufficient information to identify the characteristics of the requirement warranting the security classification of the contract (such characteristics may be so explained as to enable the request and the determination and findings to remain unclassified); (3) 10 U.S.C. 2304(a) (13), the necessity for standardization, the benefits to the Government thereby, and the statement that the proposed procurement is not the initial procurement of the supplies being standardized; in (4) 10 U.S.C. 2304 (a) (14): (i) The stage reached in the production of the supplies being procured (such as the fact that the contemplated contract is for the third production run); (ii) The type and value (known or estimated) of the substantial vestment; (iii) The basis for the representation as to the advantageous lead time position of the proposed contractor, or contractors, and an explanation of the urgency of the requirement when such lead time ("preparation for manufacture") is the basis for restriction of competition or for nonuse of formal advertising; and (iv) The significance of the technical and specialized character of the supplies. § 1203.306-50 Class determinations and findings. (a) CDF's may be utilized when appropriate for negotiating a number of contracts for the same or related items where the use of individual determinations and findings would result in a repetition of the same set of facts or circumstances. CDF's should be submitted for secretarial signature only when: (1) Several procurements are to be effected within a reasonable period of time (normally one year or less) and are for items which are so related as to constitute a logical and distinctive category; (2) The required supplies or services are such that they can be secured only by negotiation, such as: supplies (i) Items of standardized meeting the criteria set forth in § 3.213 of this title; or (ii) Research and development programs which have not reached the production stage and for which consequently, adequate drawings, specifications, or other technical data are not available for formal advertising. (3) The nature of the required supplies is such that it is not only technical or specialized by the presence of military urgency or limited numbers of qualified suppliers (as related to previous investments by the Government or the suppliers, extended periods required for preparation for manufacture, or continued availability of the suppliers in the event of a national emergency) preclude the use of formal advertising during the proposed effective period of the CDF; (b) Class determinations and findings may not be extended beyond their ef fective periods as approved by the Secretary. When the authority of such CDF is required for an additional period, a new request therefor, together with a new CDF shall be submitted in accordance with this subchapter. Such new requests shall set forth a summary of the procurement actions completed under the earlier CDF as well as those actions contemplated under the new request. (c) Heads of procuring activities should periodically review the necessity for continued use of a CDF during its effective period to assure that circumstances supporting the granted negotiation authority continue to be present. § 1203.306-51 Requests for secretarial authority to negotiate. All requests for Secretarial authority to negotiate, and their attached determinations and findings, shall be submitted to the Executive Director, Procurement and Production, in triplicate, except those invoking 10 U.S.C. 2304 (a) (13) which will include an additional copy tabbed for retention by the Assistant Secretary of Defense (I & L) pursuant to § 3.213-4 of this title. § 1203.307 Distribution of copies of determinations and findings. (a) Individual determinations. One authenticated copy of each determination and findings required by Subpart C, Part 3 of this title shall be sent to the United States General Accounting Office citing the contract number of each contract executed thereunder. The original determination and findings shall be filed with the signed copy of the contract retained in the official files of the purchasing office or procuring activity concerned. Additional copies may be distributed in accordance with instructions issued by the head of the procuring activity concerned. (b) Class determinations. One authenticated copy of each determination and findings made with respect to classes of purchases or contracts shall be sent to the United States General Accounting Office citing the number of the first contract negotiated thereunder. Each subsequent contract negotiated thereunder shall refer on its face to the particular class determination and findings on file with the General Accounting Office, citing the number of the original contract. The original class determination and findings shall be filed with the |