TABLE OF CONTENTS
SUBPART 209.1--RESPONSIBLE PROSPECTIVE CONTRACTORS
209.101 Definitions.
209.103 Policy.
209.103-70 Contract clause.
209.104 Standards.
209.104-1 General standards.
209.104-4 Subcontractor responsibility.
209.104-70 Solicitation provisions.
209.106 Preaward surveys.
209.106-1 Conditions for preaward surveys.
209.106-2 Requests for preaward surveys.
SUBPART 209.2--QUALIFICATIONS REQUIREMENTS
209.202 Policy.
SUBPART 209.3--FIRST ARTICLE TESTING AND APPROVAL
209.303 Use.
209.305 Risk.
209.306 Solicitation requirements.
209.308 Contract clauses.
SUBPART 209.4--DEBARMENT, SUSPENSION, AND INELIGIBILITY
209.402 Policy.
209.403 Definitions.
209.405 Effect of listing.
209.405-2 Restrictions on subcontracting.
209.406 Debarment.
209.406-1 General.
209.406-2 Causes for debarment.
209.406-3 Procedures.
209.409 Solicitation provision and contract clause.
209.470 Military recruiting on campus.
209.470-1 Policy.
209.470-2 Procedures.
209.470-3 Contract clause.
SUBPART 209.1--RESPONSIBLE PROSPECTIVE CONTRACTORS
"Entity controlled by a foreign government," "foreign government," and "proscribed information" are defined in the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government.
(a)(i) Do not deny award to contractors subject to on-site inspection under the Intermediate-Range Nuclear Forces (INF) Treaty, or similar treaty, due to the actual or potential presence of Soviet inspectors at the contractor's facility unless-
(A) Necessary for reasons of national security;
(B) The decision is based on full information, including comment from the potential contractor or subcontractor on the security issues involved; and
(C) The department or agency acquisition executive reviews the decision and the Under Secretary of Defense (Acquisition & Technology) approves the decision.
(ii) Make any decision to deny consideration for award under paragraph (a)(i) of this section as early as possible in the acquisition process. Notify the firm in writing of any decision not to consider the firm for award of a contract or subcontract.
(c) The additional cost of contract administration and audit due to a contractor's performance risk may be considered in evaluating the contractor's price.
Use the clause at 252.209-7000, Acquisition from Subcontractors Subject to On-Site Inspection Under the Intermediate-Range Nuclear Forces (INF) Treaty, in all solicitations and contracts exceeding the simplified acquisition threshold, except solicitations and contracts for commercial items.
(e) For cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, the prospective contractor's accounting system and related internal controls must provide reasonable assurance that-
(i) Applicable laws and regulations are complied with;
(ii) The accounting system and cost data are reliable;
(iii) Risk of misallocations and mischarges are minimized; and
(iv) Contract allocations and charges are consistent with invoice procedures.
(g)(i) Ownership or control by the government of a terrorist country.
(A) Under 10 U.S.C. 2327(b), a contracting officer shall not award a contract of $100,000 or more to a firm or to a subsidiary of a firm when a foreign government-
(1) Either directly or indirectly, has a significant interest-
(i) In the firm; or
(ii) In the subsidiary or the firm that owns the subsidiary; and
(2) Has been determined by the Secretary of State under 50 U.S.C. App. 2405(j)(1)(A) to be a government of a country that has repeatedly provided support for acts of international terrorism.
(B) The Secretary of Defense may waive the prohibition in paragraph (g)(i)(A) of this subsection in accordance with 10 U.S.C. 2327(c). This waiver authority may not be delegated.
(ii) Ownership or control by a foreign government when access to proscribed information is required.
(A) Under 10 U.S.C. 2536(a), no DoD contract under a national security program may be awarded to an entity controlled by a foreign government if that entity requires access to proscribed information to perform the contract.
(B) Whenever the contracting officer has a question about application of the provision at 252.209-7002, the contracting officer may seek advice from the Director, Defense Security Programs, Office of the Assistant Secretary of Defense for Command, Control, Communications and Intelligence.
(C) In accordance with 10 U.S.C. 2536(b)(1)(A), the Secretary of Defense may waive the prohibition in paragraph (g)(ii)(A) of this subsection upon determining that the waiver is essential to the national security interests of the United States. The Secretary has delegated authority to grant this waiver to the Assistant Secretary of Defense for Command, Control, Communications and Intelligence. Waiver requests, prepared by the requiring activity in coordination with the contracting officer, shall be processed through the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), and shall include a proposed national interest determination. The proposed national interest determination, prepared by the requiring activity in coordination with the contracting officer, shall include:
(1) Identification of the proposed awardee, with a synopsis of its foreign ownership (include solicitation and other reference numbers to identify the action);
(2) General description of the acquisition and performance requirements;
(3) Identification of the national security interests involved and the ways in which award of the contract helps advance those interests;
(4) A statement as to availability of another entity with the capacity, capability and technical expertise to satisfy defense acquisition, technology base, or industrial base requirements; and
(5) A description of any alternate means available to satisfy the requirement, e.g., use of substitute products or technology or alternate approaches to accomplish the program objectives.
(D) In accordance with 10 U.S.C. 2536(b)(1)(B), the Secretary of Defense may, in the case of a contract awarded for environmental restoration, remediation, or waste management at a DoD facility, waive the prohibition in paragraph (g)(ii)(A) of this subsection upon-
(1) Determining that-
(i) The waiver will advance the environmental restoration, remediation, or waste management objectives of DoD and will not harm the national security interests of the United States; and
(ii) The entity to which the contract is awarded is controlled by a foreign government with which the Secretary is authorized to exchange Restricted Data under section 144 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)); and
(2) Notifying Congress of the decision to grant the waiver. The contract may be awarded only after the end of the 45-day period beginning on the date the notification is received by the appropriate Congressional committees.
(iii) A contracting officer shall not enter into or renew a contract with a contractor that is subject to the reporting requirements of 38 U.S.C. 4212(d) pertaining to employment of veterans, but has not submitted the most recent report required by 38 U.S.C. 4212(d) for 1997 or a subsequent year (see 222.1304(b)).
209.104-4 Subcontractor responsibility.
Generally, the Canadian Commercial Corporation's (CCC) proposal of a firm as its subcontractor is sufficient basis for an affirmative determination of responsibility. However, when the CCC determination of responsibility is not consistent with other information available to the contracting officer, the contracting officer shall request from CCC and any other sources whatever additional information is necessary to make the responsibility determination.
209.104-70 Solicitation provisions.
(a) Use the provision at 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, in all solicitations expected to result in contracts of $100,000 or more. Any disclosure that the government of a terrorist country has a significant interest in an offeror or a subsidiary of an offeror shall be forwarded through the head of the agency to the Director, Defense Procurement, ATTN: OUSD(A&T)DP/
FC, 3060 Defense Pentagon, Washington, DC 20301-3060.
(b) Use the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government, in all solicitations, including those subject to the procedures in FAR Part 13, when access to proscribed information is necessary for contract performance.
(c) Use the provision at 252.209-7003, Compliance with Veterans' Employment Reporting Requirements, in solicitations with a value estimated to exceed the simplified acquisition threshold.
209.106-1 Conditions for preaward surveys.
(a) If a preaward survey is requested, include the rationale in block 23 of the SF 1403, Preaward Survey of Prospective Contractor (General).
209.106-2 Requests for preaward surveys.
(1) The surveying activity is the cognizant contract administration office as listed in DLAH 4105.4, DoD Directory of Contract Administration Services Components. When information is required as part of the survey on the adequacy of the contractor's accounting system or its suitability for administration of the proposed type of contract, the surveying activity will obtain the information from the auditor.
(2) Limited information may be requested by telephone.
(3) The contracting officer may request a formal survey by telephone but must confirm immediately with SF 1403, Preaward Survey of Prospective Contractor (General). For a formal survey, send original and three copies of SF 1403, including necessary drawings and specifications.
(a) List additional factors in item H, Section III of the SF 1403 and explain them in block 23. For example-
(i) Information needed to determine a prospective contractor's eligibility under the Walsh-Healey Public Contracts Act. (Note that the Walsh-Healey Public Contracts Act, block 12 of Section I, only indicates what the contractor has represented its classification to be under Walsh-Healey.)
(ii) Evaluation of a contractor as a planned producer when the offered item is or may appear on the Industrial Preparedness Planning List (IPPL). When the preaward survey results in a recommendation for award, ask the office responsible for industrial preparedness planning to consider designating the prospective contractor as a planned producer. If the item is already on the IPPL or the prospective contractor is already a planned producer, note the information in block 23.
(iii) Evaluation of the prospective contractor's performance against small business subcontracting plans.
(c) On base level preaward surveys, technical personnel from the requiring installation should participate when there is concern about the ability of a prospective contractor to perform a base level service or construction contract.
(d) Allow more time for-
(i) Complex items;
(ii) New or inexperienced DoD contractors; and
(iii) Surveys with time-consuming requirements, e.g., secondary survey, accounting system review, financial capability analysis, or purchasing office participation.
(e) Only request those factors essential to the determination of responsibility. See 253.209-1(a) for an explanation of the factors in Section III, blocks 19 and 20 of the SF 1403.
SUBPART 209.2--QUALIFICATIONS REQUIREMENTS
(a)(1) The inclusion of qualification requirements in specifications for products which are to be included on a Qualified Products List, or manufactured by business firms included on a Qualified Manufacturers List, requires approval by the departmental standardization office in accordance with DoD Manual 4120.3-M, Defense Standardization Program Policies and Procedures. The inclusion of other qualification requirements in an acquisition or group of acquisitions requires approval by the chief of the contracting office.
SUBPART 209.3--FIRST ARTICLE TESTING AND APPROVAL
(d) The contracting officer may require that first articles be manufactured using the same facilities, production processes, methods, and materials to be used for production units under the contract.
The contracting officer may give this authorization to a contractor only after approval by a level higher than the contracting officer.
209.306 Solicitation requirements.
(a)(1) To be sure that the contractor and the Government clearly understand and interpret contract terms and conditions in the same manner, avoid describing first article requirements exclusively in general terms such as "visual," "dimensional," "workmanship," or "specification compliance."
Alternate I of the clauses at FAR 52.209-3, First Article Approval--Contractor Testing, or 52.209-4, First Article Approval--Government Testing, as appropriate, may be used when-
(1) The form, fit, or function of the product would be adversely affected by contractor changes in the production facilities, processes, methods, or materials subsequent to first article approval; and
(2) The Government has relied upon first article testing in the absence of complete design specifications to supplement a performance specification; or
(3) It is essential to have an approved first article to serve as a manufacturing standard.
SUBPART 209.4--DEBARMENT, SUSPENSION, AND INELIGIBILITY
(d) The suspension and debarment procedures in Appendix H are to be followed by all debarring and suspending officials.
(e) The department or agency shall provide a copy of Appendix H, Debarment and Suspension Procedures, to contractors at the time of their suspension or when they are proposed for debarment, and upon request to other interested parties.
"Debarring official."
(1) For DoD, the designees are-
Army--Commander, U.S. Army Legal Services Agency |
Navy--the General Counsel of the Department of the Navy |
Air Force--Deputy General Counsel (Contractor Responsibility) |
Defense Advanced Research Projects Agency--The Director |
Defense Information Systems Agency--The General Counsel |
Defense Logistics Agency--The Special Assistant for Contracting Integrity |
National Imagery and Mapping Agency--The General Counsel |
Defense Special Weapons Agency--The Director |
National Security Agency--The Director |
Ballistic Missile Defense Organization--The General Counsel |
Overseas installations--as designated by the agency head |
(2) Overseas debarring officials-
(i) Are authorized to debar or suspend contractors located within the official's geographic area of responsibility under any delegation of authority they receive from their agency head.
(ii) Debar or suspend in accordance with the procedures in FAR Subpart 9.4 or under modified procedures approved by the agency head based on consideration of the laws or customs of the foreign countries concerned.
(iii) In addition to the bases for debarment in FAR 9.406-2, may consider the following additional bases-
(A) The foreign country concerned determines that a contractor has engaged in bid-rigging, price-fixing, or other anti-competitive behavior; or
(B) The foreign country concerned declares the contractor to be formally debarred, suspended, or otherwise ineligible to contract with that foreign government or its instrumentalities.
Under 10 U.S.C. 2393b, when a department or agency determines that a compelling reason exists for it to conduct business with a contractor that is on the list of parties excluded from procurement programs, it shall provide written notice of the determination to the General Services Administration, Office of Acquisition Policy. Examples of compelling reasons are-
(1) Only a listed contractor can provide the supplies or services;
(2) Urgency requires contracting with a listed contractor;
(3) The contractor and a department or agency have an agreement covering the same events which resulted in the listing and the agreement includes the department/
agency decision not to debar or suspend the contractor; or
(4) The national defense requires continued business dealings with the listed contractor.
209.405-1 Continuation of current contracts.
(b) Unless the agency head makes a written determination that a compelling reason exists to do so, ordering activities shall not-
(i) Place orders exceeding the guaranteed minimum under indefinite quantity contracts; or
(ii) When the agency is an optional user, place orders against Federal Supply Schedule contracts.
(c) This includes exercise of options.
209.405-2 Restrictions on subcontracting.
(a) The contracting officer shall not consent to any subcontract with a firm, or a subsidiary of a firm, that is identified by the Secretary of Defense as being owned or controlled by the government of a terrorist country unless the agency head states in writing the compelling reasons for the subcontract.
(a)(i) When the debarring official decides that debarment is not necessary, the official may require the contractor to enter into a written agreement which includes-
(A) A requirement for the contractor to establish, if not already established, and to maintain the standards of conduct and internal control systems prescribed by Subpart 203.70; and
(B) Other requirements the debarring official considers appropriate.
(ii) Before the debarring official decides not to suspend or debar in the case of an indictment or conviction for a felony, the debarring official must determine that the contractor has addressed adequately the circumstances that gave rise to the misconduct, and that appropriate standards of ethics and integrity are in place and are working.
209.406-2 Causes for debarment.
(a) Any person shall be considered for debarment if criminally convicted of intentionally affixing a label bearing a "Made in America" inscription to any product sold in or shipped to the United States that was not made in America (10 U.S.C. 2410f).
(i) The debarring official will make a determination concerning debarment not later than 90 days after determining that a person has been so convicted.
(ii) In cases where the debarring official decides not to debar, the debarring official will report that decision to the Director of Defense Procurement who will notify Congress within 30 days after the decision is made.
(a) Investigation and Referral.
(i) The contracting officer shall prepare a report containing the information required by paragraph (a)(ii) of this subsection when-
(A) A contractor has committed, or is suspected of having committed, any of the acts described in FAR 9.406-2 and 9.407-2;
(B) FAR 49.106 requires a report;
(C) Part 203 requires a report;
(D) The Government suspects a contractor of violating the Buy American Act (see FAR 25.204); or
(E) The Government suspects a contractor of attempting to evade the prohibitions of debarment or suspension by changes of address, multiple addresses, formation of new companies, or by other devices.
(ii) Include the following information, when available, in the report required by paragraph (a)(i) of this subsection-
(A) Name, address, and telephone number of the point of contact for the activity making the report;
(B) Name, contractor and Government entity (CAGE) code, and address of the contractor;
(C) Name and addresses of the members of the board, principal officers, partners, owners, and managers;
(D) Name and addresses of all known affiliates, subsidiaries, or parent firms, and the nature of the business relationship;
(E) For each contract affected by the conduct being reported-
(1) The contract number;
(2) All office identifying numbers or symbols;
(3) Description of supplies or services;
(4) The amount;
(5) The percentage of completion;
(6) The amount paid the contractor;
(7) Whether the contract is assigned under the Assignment of Claims Act and, if so, to whom; and
(8) The amount due the contractor;
(F) For any other contracts outstanding with the contractor or any of its affiliates-
(1) The contract number;
(2) The amount;
(3) The amounts paid the contractor;
(4) Whether the contract is assigned under the Assignment of Claims Act and, if so, to whom; and
(5) The amount due the contractor;
(G) A complete summary of all pertinent evidence and the status of any legal proceedings involving the contractor;
(H) An estimate of any damages sustained by the Government as a result of the contractor's action (explain how the estimate was calculated);
(I) The comments and recommendations of the contracting officer and of each higher level contracting review authority regarding-
(1) Whether to suspend or debar the contractor;
(2) Whether to apply limitations to the suspension or debarment;
(3) The period of any recommended debarment; and
(4) Whether to continue any current contracts with the contractor (explain why a recommendation regarding current contracts is not included);
(J) When appropriate, as an enclosure to the report-
(1) A copy or extracts of each pertinent contract;
(2) Witness statements or affidavits;
(3) Copies of investigative reports;
(4) Certified copies of indictments, judgments, and sentencing actions; and
(5) Any other appropriate exhibits or documentation.
(iii) Send three copies of each report, including enclosures, to the debarring official in 209.403.
209.409 Solicitation provision and contract clause.
Use the clause at 252.209-7004, Subcontracting with Firms That Are Owned or Controlled by the Government of a Terrorist Country, in solicitations and contracts with a value of $100,000 or more.
209.470 Military recruiting on campus.
(a)(1) Section 558 of the National Defense Authorization Act for Fiscal Year 1995 (Pub. L. 103-337) provides that no funds available to DoD may be provided by grant or contract to any institution of higher education that has a policy of denying or that effectively prevents the Secretary of Defense from obtaining for military recruiting purposes-
(i) Entry to campuses or access to students on campuses; or
(ii) Access to directory information pertaining to students.
(2) Section 541 of the National Defense Authorization Act for Fiscal Year 1996 (10 U.S.C. 983) provides that no funds appropriated or otherwise available to DoD may be obligated by contract or by grant, including a grant of funds to be available for student aid, to any institution of higher education that, as determined by the Secretary of Defense, has an anti-ROTC policy and at which, as determined by the Secretary, the Secretary would otherwise maintain or seek to establish a unit of the Senior Reserve Officer Training Corps, or at which the Secretary would otherwise enroll or seek to enroll students for participation in a unit of the Senior Reserve Officer Training Corps at another nearby institution of higher education. This prohibition applies to new contracts and all contract modifications (see 243.105). This prohibition shall cease to apply to that institution upon a determination by the Secretary that the institution no longer has an anti-ROTC policy.
(b) Institutions of higher education that are determined under 32 CFR Part 216 to have the policy or practice in paragraph (a)(1) or (a)(2) of this subsection shall be listed as ineligible on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs published by the General Services Administration (see FAR 9.404).
(c) In cases where a determination is made under 32 CFR Part 216 that specific subordinate elements of an institution of higher education, rather than the institution as a whole, have the policy or practice in paragraph (a)(1) or (a)(2) of this subsection, 32 CFR Part 216 provides that the prohibition on use of DoD funds applies only to those subordinate elements.
(a) Agencies shall not solicit offers from, award contracts to, or consent to subcontracts with ineligible contractors.
(b) After a determination of ineligibility under 209.470-1(a)(1), departments and agencies shall make no further payments under existing contracts with the institutions, and shall initiate termination action.
Use the clause at 252.209-7005, Military Recruiting on Campus, in all solicitations and contracts with institutions of higher education.