TABLE OF CONTENTS
SUBPART 217.1--MULTIYEAR CONTRACTING
217.103 Definitions
217.170 All Multiyear Contracts
217.171 Multiyear Contracts for services
217.172 Multiyear Contracts for supplies
217.173 Multiyear Contracts for weapon systems.
217.174 Multiyear Contracts that employ Economic Order Quantity procurement.
SUBPART 217.2--OPTIONS
217.202 Use of options.
217.208 Solicitation provisions and contract clauses.
[added per DFARS Case 97-D314, D.L. 98-004
217.207 Exercise of Options]
217.208-70 Additional clauses.
SUBPART 217.4--LEADER COMPANY CONTRACTING
217.401 General.
SUBPART 217.5--INTERAGENCY ACQUISITIONS UNDER THE ECONOMY ACT
217.503 Determinitations and findings requirementsl.
217.504 Ordering procedures.
SUBPART 217.6--MANAGEMENT AND OPERATING CONTRACTS
217.600 Scope of subpart.
SUBPART 217.70--EXCHANGE OF PERSONAL PROPERTY
217.7000 Scope of subpart.
217.7001 Definitions.
217.7002 Policy.
217.7003 Purchase request.
217.7004 Solicitation and award.
217.7005 Solicitation provision.
SUBPART 217.71--MASTER AGREEMENT FOR REPAIR AND ALTERATION OF VESSELS
217.7100 Scope of subpart.
217.7101 Definitions.
217.7102 General.
217.7103 Procedures.
217.7103-1 Content and format.
217.7103-2 Period of agreement.
217.7103-3 Solicitations for job orders.
217.7103-4 Award of a job order.
217.7103-5 Emergency work.
217.7103-6 Repair costs not readily ascertainable.
217.7103-7 Modification of master agreements.
217.7104 Contract clauses.
SUBPART 217.72--BAKERY AND DAIRY PRODUCTS
217.7200 Scope.
217.7201 Contract requirements for dairy products.
217.7202 Contract type.
217.7203 Contract clauses.
SUBPART 217.73--IDENTIFICATION OF SOURCES OF SUPPLY
217.7300 Scope.
217.7301 Policy.
217.7302 Procedures.
217.7303 Solicitation provision.
SUBPART 217.74--UNDEFINITIZED CONTRACT ACTIONS
217.7400 Scope
217.7401 Definitions.
217.7402 Exceptions.
217.7403 Policy.
217.7404 Limitations.
217.7404-1 Authorization.
217.7404-2 Price ceiling.
217.7404-3 Definitization schedule.
217.7404-4 Limitation on obligations.
217.7404-5 Exceptions.
217.7404-6 Allowable profit.
217.7405 Definitizations.
217.7406 Contract clauses.
SUBPART 217.75--ACQUISITION OF REPLENISHMENT PARTS
217.7500 Scope of subpart.
217.7501 General.
217.7502 Spares acquisition integrated with production (SAIP).
217.7503 Acquisition of parts when data is not available.
217.7504 Limitations on price increases.
SUBPART 217.76--CONTRACTS WITH PROVISIONING REQUIREMENTS
217.7600 Scope of subpart.
217.7601 Definitions.
217.7602 Contracting requirements.
217.7602-1 Contractual provisions.
217.7602-2 Issuance of provisioned items orders.
217.7603 Contract administration requirements.
217.7603-1 Provisioning conferences.
217.7603-2 Contract administration office monitoring.
217.7603-3 Negotiating and executing supplemental agreements.
SUBPART 217.77--OVER AND ABOVE WORK
217.7700 Scope of subpart.
217.7701 Procedures.
217.7702 Contract clause.
PART 217 SPECIAL CONTRACTING METHODS
SUBPART 217.1--MULTIYEAR CONTRACTING
Advance procurement, as used in this subpart, means an exception to the full funding policy that allows acquisition of long lead time items (advance long lead acquisition) or economic order quantities (EOQ) of items (advance EOQ acquisition) in a fiscal year in advance of that in which the related end item is to be acquired. Advance procurements may include materials, parts, components, and effort that must be funded in advance to maintain a planned production schedule.
217.170 All multiyear contracts.
(a) Before a multiyear contract is awarded, the cost of that contract shall be compared against the cost of an annual procurement approach, using a present value analysis. The multiyear contract shall not be awarded unless the analysis shows that it results in the lowest cost (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts).
(b) The head of the agency shall provide written notice to the Committees on Appropriations and National Security in the House of Representatives and in the Senate at least 10 days before termination of any multiyear contract (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts).
(c) The Secretary of Defense may instruct the head of the agency proposing a multiyear contract to include in that contract negotiated priced options for varying the quantities of end items to be procured over the life of the contract (10 U.S.C. 2306b(j)).
(d) Every multiyear contract must comply with FAR 17.104(c), unless an exception is approved through the budget process in coordination with the cognizant comptroller.
217.171 Multiyear contracts for services.
(a) 10 U.S.C. 2306(g).
(1) DoD may enter into multiyear acquisitions for the following services (and items of supply relating to such services), even though funds are limited by statute to obligation only during the fiscal year for which they were appropriated:
(i) Operation, maintenance, and support of facilities and installations.
(ii) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment.
(iii) Specialized training requiring high quality instructor skills (e.g., training for pilots and other aircrew members or foreign language training).
(iv) Base services (e.g., ground maintenance, in-plane refueling, bus transportation, and refuse collection and disposal).
(2) This authority may be used as long as the contract does not extend beyond 5 years.
(b) 10 U.S.C. 2829.
(1) The head of the agency may enter into multiyear contracts for supplies and services required for management, maintenance, and operation of military family housing and may pay the costs of such contracts for each year from annual appropriations for that year.
(2) This authority may be used as long as the contract does not extend beyond 4 years.
(c) Award of a multiyear contract for services requires a written determination by the head of the agency (10 U.S.C. 2306(g)(1)) that--
(1) There will be a continuing need for the services and incidental supplies;
(2) Furnishing the services and incidental supplies will require-- (i) A substantial initial investment in plant or equipment; or (ii) The incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force; and
(3) Using a multiyear contract will be in the best interest of the United States by encouraging effective competition and promoting economical business operations (e.g., economic lot purchases and more efficient production rates).
217.172 Multiyear contracts for supplies.
(a) This section applies to all multiyear contracts for supplies, including weapon systems. For policies that apply only to multiyear contracts for weapon systems, see 217.173.
(b) A multiyear contract for supplies may be used if, in addition to the conditions listed in FAR 17.105-1(b), the use of such a contract will promote the national security of the United States.
(c) The head of the agency shall provide written notice to the Committees on Appropriations and National Security in the House of Representatives and in the Senate at least 30 days before the contracting officer awards a multiyear contractincluding an unfunded contingent liability in excess of $20 million (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts).
(d) Agencies shall establish reporting procedures to meet the requirements of paragraph (c) of this section. Submit copies of the notifications to the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition and Technology) (OUSD(A&T)DP), and to the Deputy Under Secretary of Defense (Comptroller) (Program/ Budget) (OUSD(C)(P/B)).
217.173 Multiyear contracts for weapon systems.
(a) As authorized by 10 U.S.C. 2306b(a) and subject to the conditions in paragraph (b) of this section, the head of the agency may enter into a multiyear contract for--
(1) A weapon system and associated items, services, and logistics support for a weapon system; and
(2) Advance procurement of components, parts, and materials necessary to manufacture a weapon system, including advance procurement to achieve economic lot purchases or more efficient production rates (see 217.174 regarding economic order quantity procurement).
(b) The following conditions must be satisfied before a multiyear contract may be awarded under the authority described in paragraph (a) of this section:
(1) The multiyear exhibits required by DoD 7000.14-R, Financial Management Regulation, are included in the agency's budget estimate submission and the President's budget request.
(2) The Secretary of Defense certifies to Congress that the current 5-year defense program fully funds the support costs associated with the multiyear program (10 U.S.C. 2306b(i)(1)(A)).Information supporting this certification shall be submitted to USD(C)(P/B) for transmission to Congress through the Secretary of Defense.
(3) The proposed multiyear contract provides for production at not less than minimum economic rates, given the existing tooling and facilities (10 U.S.C. 2306b(i)(1)(B)). Information supporting the agency's determination that this requirement has been met shall be submitted to USD(C)(P/B) with the information supporting the certification required by paragraph (b)(2) of this section.
(4) If the value of the multiyear contract exceeds $500,000,000, the applicable Defense appropriations act specifically provides that a multiyear contract may be used to procure the particular system or system component (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts).
(5) All other requirements of law are met and there are no other statutory restrictions on using a multiyear contract for the specific system or component (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts). One such restriction may be the achievement of specified cost savings. If the agency finds, after negotiations with the contractor(s), that the specified savings cannot be achieved, the head of the agency shall assess the savings that, nevertheless, could be achieved by using a multiyear contract. If the savings are substantial, the head of the agency may request relief from the law's specific savings requirement. The request shall--
(i) Quantify the savings that can be achieved;
(ii) Explain any other benefits to the Government of using the multiyear contract;
(iii) Include details regarding the negotiated contract terms and conditions; and
(iv) Be submitted to OUSD(A&T)DP for transmission to Congress via the Secretary of Defense and the President (10 U.S.C. 2306b(i)(2)).
217.174 Multiyear contracts that employ economic order quantity procurement.
(a) The head of the agency shall provide written notice to the Committees on Appropriations and National Security in the House of Representatives and in the Senate at least 30 days before awarding--
(1) A multiyear contract providing for economic order quantity purchases in excess of $20 million in any year; or
(2) A contract for advance procurement leading to a mulityear contract that employs economic order quantity procurement in excess of $20 million in any year (Section 9021 of Pub. L. 101-165 and similar sections in subsequent Defense appropriations acts).
(b) Before initiating an advance procurement, the contracting officer shall verify that it is consistent with DoD policy (e.g., Part 3 of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, and the full funding policy in Volume 2A, Chapter 1, of DoD 7000.14-R, Financial Management Regulation).
(1) Options may be used for foreign military sales requirements.
(2) Consider use of surge options to support the Industrial Preparedness Production Planning program (see Subpart 208.72). A surge option allows the Government, prior to final delivery, to--
(i) Accelerate the contractor's production rate in accordance with a surge production plan or a delivery schedule provided by the contractor under the terms of the contract; and
(ii) Purchase additional quantities of supplies or services.
(3) See subpart 217.74 for limitations on the use of undefinitized options.
[added per DFARS Case 97-D314, D.L. 98-004]
217.207 Exercise of options.
(c) Except for contracts for the acquisition of commercial items, if the contractor has any contract containing the clause at FAR 52.222- 37, Employment Reports on Disabled Veterans and Veterans of the Vietnam Era, the contracting officer may exercise an option with a value exceeding the simplified acquisition threshold only after determining that the contractor has submitted the most recent report required by that clause (see 222.1304(b)).]
217.208 Solicitation provisions and contract clauses.
Sealed bid solicitations shall not include provisions for evaluations of options unless the contracting officer determines that there is a reasonable likelihood that the options will be exercised (10 U.S.C. 2301 (a)(7)). This limitation also applies to sealed bid solicitations for the contracts excluded by FAR 17.200.
217.208-70 Additional clauses.
(a) Use the clause at 252.217-7000, Exercise of Option to Fulfill Foreign Military Sales Commitments, when an option may be used for foreign military sale requirements.
(1) Use Alternate I when the foreign military sale country is not known at the time of solicitation or award.
(2) Do not use this clause in contracts for establishment or replenishment of DoD inventories or stocks, or acquisitions made under DoD cooperative logistics support arrangements.
(b) When a surge option is needed in support of industrial preparedness production planning (see Subpart 208.72), use the clause at 252.217-7001, Surge Option, in solicitations and contracts.
(1) Insert the percentage of increase the option represents in paragraph (a) of the clause.
(2) Change 30 days in paragraphs (b)(2) and (d)(1) to longer periods, if appropriate.
(3) Change the 24-month period in paragraph (c)(3), if appropriate.
SUBPART 217.4--LEADER COMPANY CONTRACTING
[per D.L. 98-018, DFARS Case 98-D007, 06 Aug, 98, effective 01 Oct 98]
217.401 General.
[(1)]When leader company contracting is to be considered, take special effort to select a small disadvantaged business (SDB) concern as the follower company [if--
(i) The follower company will be a subcontractor and the Standard Industrial Classification (SIC) Major Group of the acquisition is one in which use of a price evaluation adjustment is currently authorized (see FAR 19.201(b)).
(2) If the follower company will be a subcontractor, or if a price evaluation adjustment in the SICMajor Group is authorized, and] an SDB is [not] selected as the follower company, the contracting officer shall document the contract file to reflect[--
(i)] The extent of actions taken to identify SDB concerns for participation in the acquisition; and
[(ii)] The rationale for selection of a non-SDB as the follower company.
SUBPART 217.5--INTERAGENCY ACQUISITIONS UNDER THE ECONOMY ACT
217.503 Determinations and findings requirements.
(c) If requested, the contracting officer who normally would contract for the requesting activity should advise in the determination process.
(a) When the requesting agency is within DoD, a copy of the executed D&F shall be furnished to the servicing agency as an attachment to the order. When a DoD contracting office is acting as the servicing agency, a copy of the executed D&F shall be obtained from the requesting agency and placed in the contract file for the Economy Act order.
SUBPART 217.6--MANAGEMENT AND OPERATING CONTRACTS
217.600 Scope of subpart.
FAR Subpart 17.6 does not apply to DoD.
SUBPART 217.70--EXCHANGE OF PERSONAL PROPERTY
217.7000 Scope of subpart.
This subpart prescribes policy and procedures for exchange of nonexcess personal property concurrent with an acquisition. Section 201(c) of the Federal Property and Administrative Services Act of 1949, 63 Stat. 384, as amended (40 U.S.C. 481(c)) permits exchange of personal property and application of the exchange allowance to the acquisition of similar property. This subpart does not authorize the sale of nonexcess personal property.
217.7001 Definitions.
As used in this subpart,
(a) "Exchange (trade-in) property" means property which--
(1) Is not excess but is eligible for replacement (because of obsolescence, unserviceability, or other reason); and
(2) Is applied as whole or partial payment toward the acquisition of similar items (i.e., items designed and constructed for the same purpose).
(b) "Property" means items which fall within one of the generic categories listed in DoDI 4140.51,Exchange of Nonexcess Personal Property in the Department of Defense.
217.7002 Policy.
DoD policy is to exchange, rather than replace, eligible nonexcess property whenever exchange promotes economical and efficient program accomplishment. Exchange policy, authority, and applicability are governed by--
(a) The Federal Property Management Regulations issued by the Administrator of the General Services Administration; and
(b) DoDI 4140.51, Exchange of Nonexcess Personal Property in the Department of Defense.
217.7003 Purchase request.
Ensure that the requiring activity provides all of the following in support of the purchase request--
(a) A certification that the property is eligible for exchange and complies with all conditions and limitations of DoDI 4140.51;
(b) A written determination of economic advantage indicating--
(1) The anticipated economic advantage to the Government from use of the exchange authority;
(2) That exchange allowances shall be applied toward, or in partial payment of, the items to be acquired; and
(3) That, if required, the exchange property has been rendered safe or innocuous or has been demilitarized;
(c) All applicable approvals for the exchange; and
(d) A description of the property available for exchange (e.g., nomenclature, location, serial number, estimated travel value).
217.7004 Solicitation and award.
(a) Solicitations shall include a request for offerors to state prices--
(1) For the new items being acquired without any exchange; and
(2) For the new items with the exchange (trade-in allowance) for the exchange property listed.
(b) The contracting officer is not obligated to award on an exchange basis. If the lowest evaluated offer is an offer for the new items without any exchange, the contracting officer may award on that basis and forgo the exchange.
(c) Exchanges may be made only with the successful offeror. When the successful offer includes an exchange, award one contract for both the acquisition of the new property and the trade-in of the exchange property. The only exception is when the items must be acquired against a mandatory Federal supply schedule contract, in which case, award a separate contract for the exchange.
217.7005 Solicitation provision.
Use the provision at 252.217-7002, Offering Property for Exchange, when offering nonexcess personal property for exchange. Allow a minimum of 14 calendar days for the inspection period in paragraph (b) of the clause if the exchange property is in the continental United States. Allow at least 21 calendar days outside the United States.
SUBPART 217.71--MASTER AGREEMENT FOR REPAIR AND ALTERATION
OF VESSELS
217.7100 Scope of subpart.
This subpart contains acquisition policies and procedures for master agreements for repair and alteration of vessels.
(a) "Master agreement for repair and alteration of vessels"--
(1) Is a written instrument of understanding, negotiated between a contracting activity and a contractor that--
(A) Contains contract clauses, terms, and conditions applying to future contracts for repairs, alterations, and/or additions to vessels; and
(B) Contemplates separate future contracts that will incorporate by reference or attachment the required and applicable clauses agreed upon in the master agreement.
(2) Is not a contract.
(b) "Job order"--
(1) Is a fixed price contract incorporating, by reference or attachment, a master agreement for repair and alteration of vessels;
(2) May include clauses pertaining to subjects not covered by the master agreement; but applicable to the job order being awarded; and
(3) Applies to a specific acquisition and sets forth the scope of work, price, delivery date, and other appropriate terms that apply to the particular job order.
(a) Activities shall enter into master agreements for repair and alteration of vessels with all prospective contractors located within the United States, its possessions, or Puerto Rico, which--
(1) Request ship repair work; and
(2) Which possess the organization and facilities to perform the work satisfactorily. (Issuance of a master agreement does not indicate approval of the contractor's facility for any particular acquisition and is not an affirmative determination of responsibility under FAR Subpart 9.1 for any particular acquisition.)
(b) Activities may use master agreements in work with prospective contractors located outside the United States, its possessions, or Puerto Rico.
(c) Activities may issue job orders under master agreements to effect repairs, alterations, and/or additions to vessels belonging to foreign governments.
(1) Contractors shall treat vessels of a foreign government as if they were vessels of the U.S. Government whenever requested to do so by the contracting officer.
(2) Identify the vessel and the foreign government in the solicitation and job order.
217.7103-1 Content and format.
(a) A Master agreement shall contain all clauses required by 217.7104(a), statute and executive order.
(b) The following format may be adapted to fit specific circumstances:
MASTER AGREEMENT FOR REPAIR AND ALTERATION OF VESSELS
(1) This agreement is entered into this day of 19 , by the United States of America(the "Government":) represented by , the Contracting Officer, and , a corporation organized existing under the laws of the State of (the "Contractor").
(2) The clauses in this agreement, shall be incorporated, by reference or attachment, in job orders issued under this agreement to effect repairs,alterations, and/or additions to vessels.
(3) By giving 30 days written notice, either party to this agreement has the right to cancel it without affecting the rights and liabilities under any job order existing at the time of cancellation. The Contractor shall perform, under the terms of this agreement, all work covered by any job order awarded before the effective date of the cancellation.
(4) This agreement may be modified only by mutual agreement of the parties. A modification of this agreement shall not affect any job order in existence at the time of modification, unless the parties agree otherwise.
(5) The rights and obligations of the parties to this agreement are set forth in this agreement and the clauses of any job orders issued under this agreement. In the event there is an inconsistency between this agreement and any job order, the provisions of this agreement shall govern.
(6) This agreement shall remain in effect until cancelled by either party.
THE UNITED STATES OF AMERICA
by (Contracting Officer)
(Contractor)
by (Authorized Individual)
(Title)
217.7103-2 Period of agreement.
(a) Master agreements remain in effect until cancelled by either the contractor or the contracting officer.
(b) Master agreements can be cancelled by either the contractor or the contracting officer by giving 30 days written notice to the other.
(c) Cancellation of a master agreement does not affect the rights and liabilities under any job order existing at the time of cancellation. The contractor must continue to perform all work covered by any job order issued before the effective date of cancellation of the master agreement.
217.7103-3 Solicitations for job orders.
(a) When a requirement arises within the United States, its possessions, or Puerto Rico for the type of work covered by the master agreement, solicit offers from prospective contractors that--
(1) Previously executed a master agreement; or
(2) Have not previously executed a master agreement, but possess the necessary qualifications to perform the work and agree to execute a master agreement before award of a job order.
(b) Prepare the solicitation in the uniform contract format and in accordance with FAR Subparts 14.2 or 15.4, as applicable.
(c) Include in the solicitation--
(1) The nature of the work to be performed;
(2) The date the vessel will be available to the contractor;
(3) The date the work is to be completed; and
(4) Whether bulk ammunition is aboard the vessel.
(d) Unless the solicitation states otherwise, offers are to be based on performance at the contractor's site.
(e) Solicitations processed under negotiated acquisition procedures shall require offerors to include a breakdown of the price with reasonable supporting detail in whatever format and detail the contracting officer may request.
(f) Where practicable, afford potential offerors an opportunity to inspect the item needing repair or alteration.
217.7103-4 Award of a job order.
Award job orders in accordance with FAR Subparts 14.4 or 15.10.
(a) The contracting officer, without soliciting offers, may issue a written job order to a contractor that has previously executed a master agreement when--
(i) Delay in the performance of necessary repair work would endanger a vessel, its cargo or stores; or
(ii) Military necessity requires immediate work on a vessel.
(b) Process this type of undefinitized contract action in accordance with Subpart 217.74.
(c) Negotiate a price as soon as practicable after the issuance of an undefinitized order and definitize the job order upon completing negotiations.
217.7103-6 Repair costs not readily ascertainable.
If the nature of any repairs is such that their extent and probable cost cannot be ascertained readily, the solicitation should--
(a) Solicit offers for determining the nature and extent of the repairs;
(b) Provide that upon determination by the contracting officer of what work is necessary, the contractor, if requested by the contracting officer, shall negotiate prices for performance of the repairs; and
(c) Provide that prices for the repairs, if ordered, will be set forth in a modification of the job order.
217.7103-7 Modification of master agreements.
(a) Review each master agreement at least annually before the anniversary of its effective date and revise it as necessary to conform to the requirements of the FAR and DFARS. Statutory or other mandatory changes may require review and revision earlier than one year.
(b) A master agreement shall be changed only by modifying the master agreement itself. It shall not be changed through a job order.
(c) A modification to a master agreement shall not affect job orders issued before the effective date of the modification.
(a) Use the following clauses in solicitations for, and in, master agreements for repair and alteration of vessels:
(1) 252.217-7003, Changes.
(2) 252.217-7004, Job Orders and Compensation.
(3) 252.217-7005, Inspection and Manner of Doing Work.
(4) 252.217-7006, Title.
(5) 252.217-7007, Payments.
(6) 252.217-7008, Bonds
(7) 252.217-7009, Default.
(8) 252.217-7010, Performance.
(9) 252.217-7011, Access to Vessel.
(10) 252.217-7012, Liability and Insurance.
(11) 252.217-7013, Guarantees.
(12) 252.217-7014, Discharge of Liens.
(13) 252.217-7015, Safety and Health.
(14) 252.217-7016, Plant Protection, as applicable.
(b)(1) Incorporate in solicitations for, and in, job orders, the clauses in the master agreement, and any other clauses on subjects not covered by the master agreement, but applicable to the job order to be awarded.
(2) Use the clause at 252.217-7016, Plant Protection, in job orders where performance is to occur at the contractor's facility.
SUBPART 217.72--BAKERY AND DAIRY PRODUCTS
217.7200 Scope.
This subpart provides special policies and requirements for acquisition of perishable bakery and dairy products.
217.7201 Contract requirements for dairy products.
(a) Include the following chemical and microbiological requirements in solicitations and resulting contracts for milk, milk products, and cultured products (as defined in the Veterinary/Medical Wholesomeness Assurance Program for Fresh and Cultured Dairy Products and Frozen Desserts (AR-40-70/NAVSUPINST 4355.6/AFR 161-46/MCO 10110.44)):
(1) Chemical requirements.
Products shall meet the chemical requirements for each specification cited in the contract on the date of award.
(2) Microbiological requirements.
Products shall meet microbiological requirements stated in Public Health Service Publication 229, Grade A Pasteurized Milk Ordnance, in effect on the date of award. In the event of conflict between these requirements and individual product specifications, the requirements of Public Health Service Publication 229 take precedence.
(b) When the contractor is required to furnish its own cabinets for dispensing milk from bulk containers--
(1) Include the following information in the solicitation--
(i) The number (or estimated number) of dispenser cabinets required;
(ii) Whether metal stands for the cabinets are required;
(iii) The number of cabinets required with a capacity of two containers each; and
(iv) The number required with a capacity of three containers each.
(2) Include the contractor's list of cabinet equipment in the schedule of the contract.
(c) The contracting officer shall notify the Government quality assurance representative of code changesapproved under the clause at 252.217-7022, Code Dating.
217.7202 Contract type.
Normally use requirements contracts for bakery and dairy products. Other indefinite delivery contracts and other contract types may be used as appropriate.
(a) Use the following additional clauses in solicitations and contracts for perishable bakery and dairy products--
(1) 252.217-7017, Time of Delivery. Use Alternate I when the contract is other than a requirements contract. Insert the number of hours in paragraph (c) of Alternate I.
(2) 252.217-7018, Change in Plant Location (sic).
(3) 252.217-7019, Sanitary Conditions. Use Alternate I when the contract is other than a requirements contract.
(4) 252.217-7022, Code Dating. Use this clause only when the schedule or a specification requires labels showing the date of pasteurization, manufacture, production, or processing.
(5) 252.217-7023, Marking. Do not use this clause when MIL-STD-129, Marking for Shipment and Storage, is required.
(6) 252.217-7024, Responsibility for Containers and Equipment. Use when contractor is required to provide reusable containers and equipment.
(b) Use the following additional clauses in solicitations and contracts for perishable dairy products--
(1) 252.217-7020, Examination and Testing. Use Alternate I when the contract is an indefinite quantity contract.
(2) 252.217-7021, Deficiency Adjustment.
(3) 252.217-7025, Containers and Equipment.
SUBPART 217.73--IDENTIFICATION OF SOURCES OF SUPPLY
217.7300 Scope.
This subpart implements 10 U.S.C. 2384. It contains policy and procedures for requiring contractors to identify the actual manufacturer of supplies furnished to DoD.
217.7301 Policy.
Contractors shall identify their sources of supply in contracts for supplies. Contractor identification of sources of supply enables solicitation, in subsequent acquisitions, of actual manufacturers or other suppliers of items. This enhances competition and potentially avoids payment of additional costs for no significant added value.
(a) Whenever practicable, include a requirement for contractor identification of sources of supply in all contracts for the delivery of supplies. The identification shall include--
(1) The item's actual manufacturer or producer, or all the contractor's sources for the item;
(2) The item's national stock number (if there is one);
(3) The item identification number used by--
(i) The actual manufacturer or producer of the item; or
(ii) Each of the contractor's sources for the item; and
(4) The source of any technical data delivered under the contract.
(b) The requirement in paragraph (a) of this section does not apply to commercial items.
217.7303 Solicitation provision.
(a) Use the provision at 252.217-7026, Identification of Sources of Supply, or one substantially the same, in all solicitations for supplies when the acquisition is being conducted under other than full and open competition, except when--
(1) Using FAR 6.302-5;
(2) The contracting officer already has the information required by the provision (e.g., the information was obtained under other acquisitions);
(3) The contract is for subsistence, clothing or textiles, fuels, or supplies purchased and used outside the United States;
(4) The contracting officer determines that it would not be practicable to require offerors/contractors to provide the information, e.g., nonrepetitive local purchases; or
(5) The contracting officer determines that the exception at 217.7302(b) applies to all items under the solicitation.
(b) If appropriate, use the provision at 252.217-7026, Identification of Sources of Supply, or one substantially the same, in service contracts requiring the delivery of supplies.
SUBPART 217.74--UNDEFINITIZED CONTRACT ACTIONS
217.7400 Scope.
This subpart prescribes policies and procedures implementing 10 U.S.C. 2326.
217.7401 Definitions.
As used in this subpart--
(a) "Contract action" means an action which results in a contract.
(1) It includes contract modifications for additional supplies or services.
(2) It does not include change orders, administrative changes, funding modifications, or any other contract modifications that are within the scope and under the terms of the contract, e.g., engineering change proposals, value engineering change proposals, and over and above work requests as described in Subpart 217.77.
(b) "Definitization" means the agreement on, or determination of, contract terms, specifications, and price, which converts the undefinitized contract action to a definitive contract.
(c) "Qualifying proposal" means a proposal containing sufficient information for the DoD to do complete and meaningful analyses and audits of the--
(1) Information in the proposal; and
(2) Any other information that the contracting officer has determined DoD needs to review in connection with the contract.
(d) "Undefinitized contract action" means any contract action for which the contract terms, specifications, or price are not agreed upon before performance is begun under the action. Examplesare letter contracts, orders under basic ordering agreements, and provisioned item orders, for which the price has not been agreed upon before performance has begun.
217.7402 Exceptions.
The following undefinitized contract actions (UCAs) are not subject to this subpart, but the contracting officer should apply the policy to them (and to changes under the Changes clause) to the maximum extent practicable--
(a) UCAs for foreign military sales;
(b) Purchases at or below the simplified acquisition threshold;
(c) Special access programs;
(d) Congressionally mandated long-lead procurement contracts.
217.7403 Policy.
DoD policy is that undefinitized contract actions shall--
(a) Be used only when--
(1) The negotiation of a definitive contract action is not possible in sufficient time to meet the Government's requirements; and
(2) The Government's interest demands that the contractor be given a binding commitment so that contract performance can begin immediately.
(b) Be as complete and definite as practicable under the particular circumstances.
217.7404-1 Authorization.
The contracting officer shall obtain approval from the head of the contracting activity before--
(a) Entering into a UCA. The request for approval must fully explain the need to begin performance before definitization, including the adverse impact on agency requirements resulting from delays in beginning performance.
(b) Including requirements for non-urgent spare parts and support equipment in a UCA. The request should show that inclusion of the non-urgent items is consistent with good business practices and in the best interest of the United States.
(c) Modifying the scope of a UCA when performance has already begun. The request should show that the modification is consistent with good business practices and in the best interests of the United States.
217.7404-2 Price ceiling.
UCAs shall include a not-to-exceed price.
217.7404-3 Definitization schedule.
(a) UCAs shall contain definitization schedules which provide for definitization by the earlier of the following dates--
(1) The date which is 180 days after issuance of the action (this date may be extended but may not exceed the date which is 180 days after the contractor submits a qualifying proposal); or
(2) The date on which the amount of funds spent under the contract action is equal to more than 50 percent of the not-to-exceed price.
(b) Submission of a qualifying proposal in accordance with the definitization schedule is a material element of the contract. If the contractor does not submit a timely qualifying proposal; the contacting officer may suspend or reduce progress payments under FAR 32.503-6, or take other appropriate action.
217.7404-4 Limitation on obligations.
The Government shall not obligate more than 50 percent of the not-to-exceed price before definitization. However, if a contractor submits a qualifying proposal before 50 percent of the not-to-exceed price has been obligated by the Government, then the limitation on obligations before definitization may be increased to no more than 75 percent (see 232.102-70 for coverage on provisional delivery payments).
(a) The limitations in 217.7404-2, -3, and -4 do not apply to UCAs for the purchase of initial spares.
(b) The head of an agency may waive the limitations in 217.7404-2, -3, and -4 for UCAs if the head of the agency determines that the waiver is necessary to support a contingency operation.
217.7404-6 Allowable profit.
When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the head of the agency shall ensure the profit allowed reflects--
(a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price; and
(b) The contractor's reduced cost risk for costs incurred during performance of the remainder of the contract.
[see AFAC 92-49,B1]
217.7405 Definitizations
For each definitization modification, the contracting officer shall include all data required by 243.171.
(a) Use the clause at 252.216-24, Limitation of Government Liability, in all UCAs, solicitations associated with UCAs, basic ordering agreements, indefinite delivery contracts, and any other type of contract providing for the use of UCAs.
(b) Use the clause at 252.217-7027, Contract Definitization, in all UCAs, solicitations associated with UCAs, basic ordering agreements, indefinite delivery contracts, and any other type of contract providing for the use of UCAs. Insert the applicable information in paragraphs (a), (b), and (d) of the clause. If, at the time of entering into the UCA, the contracting officer knows that the definitive contract action will meet the criteria of FAR 15.804-1 for not requiring submission of cost or pricing data, the words "and cost or pricing data" may be deleted from paragraph (a) of the clause.
SUBPART 217.75--ACQUISITION OF REPLENISHMENT PARTS
217.7500 Scope of subpart.
This subpart provides guidance on additional requirements related to acquisition of replenishment parts (asdefined in Appendix E).
217.7501 General.
Departments and agencies--
(a) May acquire replenishment parts concurrently with production of the end item.
(b) Shall provide for full and open competition when fully adequate drawings and any other needed data are available with the right to use for acquisition purposes (see Part 227). However--
(1) When data is not available for a competitive acquisition, use one of the procedures in 217.7503.
(2) Replenishment parts must be acquired so as to ensure the safe, dependable, and effective operation of the equipment. Where this assurance is not possible with new sources, competition may be limited to the original manufacturer of the equipment or other sources that have previously manufactured or furnished the parts as long as the action is justified.
(c) Shall follow the limitations on price increases in 217.7504.
217.7502 Spares acquisition integrated with production (SAIP).
(a) Spares acquisition integrated with production (SAIP) is a technique used to acquire replenishment parts concurrently with parts being produced for the end item.
(b) DoD acquisition managers select parts for SAIP under the criteria in DoDI 4245.12, Spares Acquisition Integrated With Production (SAIP).
(c) Include appropriately tailored provisions in the contract when SAIP is used.
217.7503 Acquisition of parts when data is not available.
When acquiring a part for which the Government does not have necessary data with rights to use in a specification or drawing for competitive acquisition, use one of the following procedures in order of preference--
(a) When items of identical design are not required, the acquisition may still be conducted through full and open competition by using a performance specification or other similar technical requirement or purchase description that does not contain data with restricted rights. Two methods are--
(1) Two-step sealed bidding; and
(2) Brand name or equal purchase descriptions.
(b) When other than full and open competition is authorized under FAR Part 6, acquire the part from the firm which developed or designed the item or process, or its licensees, provided productive capacity and quality are adequate and the price is fair and reasonable.
(c) When additional sources are needed and the procedures in paragraph (a) of this section are not practicable, consider the following alternatives--
(1) Encourage the developer to license others to manufacture the parts;
(2) Acquire the necessary rights in data;
(3) Use a leader company acquisition technique (FAR Subpart 17.4) when complex technical equipment is involved and establishing satisfactory additional sources will require technical assistance as well as data; or
(4) Incorporate a priced option in the contract which allows the Government to require the contractor to establish a second source.
(d) As a last alternative, the contracting activity may develop a design specification for competitive acquisition through reverse engineering. Contracting activities shall not do reverse engineering unless--
(1) Significant cost savings can be demonstrated; and
(2) The action is authorized by the head of the contracting activity.
217.7504 Limitations on price increases.
This section provides implementing guidance for Section 1215 of Pub. L. 98-94 (10 U.S.C. 2452 note).
(a) The contracting officer shall not award, on a sole source basis, a contract for any centrally managed replenishment part when the price of the part has increased by 25 percent or more over the most recent 12-month period.
(1) Before computing the percentage difference between the current price and the prior price, adjust for quantity, escalation, and other factors necessary to achieve comparability.
(2) Departments and agencies may specify an alternate percentage or percentages for contracts within the small purchase limitation in FAR Part 13.
(b) The contracting officer may award a contract for a part, the price of which exceeds the limitation in paragraph (a) of this section, if the contracting officer certifies in writing to the head of the contracting activity before award that--
(1) The contracting officer has evaluated the price of the part and concluded that the price increase is fair and reasonable; or
(2) The national security interests of the United States require purchase of the part despite the price increase.
(c) The fact that a particular price has not exceeded the limitation in paragraph (a) of this section does not relieve the contracting officer of the responsibility for obtaining a fair and reasonable price.
(d) Contracting officers may include a provision in sole source solicitations requiring that the offeror supply with its proposal, price and quantity data on any government orders for the replenishment part issued within the most recent 12 months.
SUBPART 217.76--CONTRACTS WITH PROVISIONING REQUIREMENTS
217.7600 Scope of subpart.
This subpart contains contract requirements and procedures for items to be provisioned. For technical requirements of provisioning, see DoDD 4140.40, Provisioning of End Items of Material. For breakout requirements, see Appendix E.
217.7601 Definitions.
As used in this subpart,
(a) "Provisioning" means the process of determining and acquiring the range and quantity of spare and repair parts, and support and test equipment required to operate and maintain an end item for an initial period of service.
(b) "Provisioned item" means any item selected under provisioning procedures.
(c) "Provisioned items order" (PIO) means an undefinitized order issued under a contract which includes the Government's requirements for provisioned items. (Provisioned items with firm prices are acquired by supplemental agreement or by separate contract.)
(d) "Provisioning activity" means the organization responsible for selecting and determining requirements for provisioned items.
(e) "Provisioning requirements statement" means the contractual document listing the specificprovisioning requirements for that contract. The statement normally includes:
(1) Instructions, such as the provisioning method to be used;
(2) The extent of provisioning technical documentation and data needed (including administrative requirements for submission and distribution);
(3) The type and location of provisioning conferences;
(4) Sample article requirements;
(5) The delivery schedule;
(6) Packaging and marking requirements for provisioned items; and
(7) Requirements for provisioning screening.
(f) "Provisioning technical documentation" means the data needed for the identification, selection, determination of initial requirements, and cataloging of support items to be acquired through the provisioning process. It includes such things as provisioning lists and logistics support analysis summaries. Descriptive data such as drawings and photographs are referred to as "supplementary provisioning technical documentation."
217.7602 Contracting requirements.
217.7602-1 Contractual provisions.
Contracts containing provisioning requirements shall--
(a) List the provisioning functions to be performed and who will perform them;
(b) Include a provisioning requirements statement or specify a time limit for its incorporation into the contract by modification (revisions to the provisioning requirements statement shall also be incorporated by contract modification);
(c) Include on the DD Form 1423, Contract Data Requirements List, a schedule for delivery of provisioning technical documentation, or provide for the schedule to be incorporated later by contract modification;
(d) Require flowdown of the appropriate provisioning technical documentation requirement when the subcontractor prepares the documentation;
(e) Specify any applicable procedures for interim release by the contractor of long lead time items, and include ordering and funding instructions for such items. As a minimum, the instructions shall require the contractor to advise the contracting officer or provisioning activity at least 30 days before release of the items, their estimated costs, and the effective date of release;
(f) Specify the activity designated to issue provisioned items orders, i.e., contracting officer, provisioning activity, or administrative contracting officer. When it is expected that more than one activity will place provisioned items orders against the contract, state the requirements for provisioned items of each activity as separate contract line items;
(g) Provide a definitization schedule (normally 120 days after receipt of the contractor's proposal), and a timeframe for the contractor to furnish price proposals for provisioned items orders (normally 60 days after order issuance);
(h) Specify exhibit identifiers applicable to the contract line/subline items; and
(i) Include procedures for processing changes (including cancellations) in quantities of items ordered.
217.7602-2 Issuance of provisioned items orders.
(a) Use the Standard Form 30, Amendment of Solicitation/Modification of Contract, to--
(1) Issue provisioned items orders;
(2) Decrease or cancel quantities of items ordered; and
(3) Cover the contractor's interim release of long lead items when the contracting officer approves the release (if the release is not approved, the contracting officer shall notify the contractor to cancel the items).
(b) Include in Block 14 of the Standard Form 30--
(1) The term PROVISIONED ITEMS ORDER in capital letters and underlined; and
(2) The appropriate exhibit identifier(s) for all attached exhibits.
(c) Obligate funds to cover the estimated price of the items being ordered. Show individual estimated prices for each exhibit line item on the accounting and payment office copies.
(d) Distribution is the same as for the basic contract (see FAR 4.2). However, if the exhibits are voluminous, the contracting officer may restrict distribution of the exhibits to the contract administration office.
(e) See Subpart 217.74 for additional guidance and limitations on the use of undefinitized contract actions.
217.7603 Contract administration requirements.
217.7603-1 Provisioning conferences.
When requested by the contracting officer or provisioning activity, the contract administration office shall assist the contracting officer or provisioning activity in scheduling and determining the types of provisioning conferences required, e.g., guidance meetings, long lead time items conferences, source coding meetings.
217.7603-2 Contract administration office monitoring.
The contract administration office (CAO) shall monitor contracts containing provisioning requirements. As a minimum the CAO shall--
(a) Ensure that the contractor understands the provisioning requirements;
(b) Review contractor progress in the preparation of provisioning technical documentation and, if requested by the contracting officer or provisioning activity, inspect it for format and content;
(c) Ensure the prime contractor flows-down provisioning requirements to any subcontractor charged with preparation of documentation;
(d) Advise the contracting office or provisioning activity of delays in delivery of provisioning technical documentation or other related problems (see FAR Subpart 42.11);
(e) Ensure contractor compliance with contract requirements concerning the assignment of national stock numbers; and
(f) Ensure that the contractor complies with contractual criteria for release of long lead time items.
217.7603-3 Negotiating and executing supplemental agreements.
(a) The administrative contracting officer (ACO) shall definitize provisioned items orders within the prescribed schedule.
(b) If the provisioned items order does not contain a delivery date, or the contractor cannot meet the date, the ACO shall coordinate the negotiated schedule with the contracting officer or provisioning activity before execution of the supplemental agreement.
(c) The ACO shall maintain records of provisioned items orders showing--
(1) The adequacy of obligated funds;
(2) Due dates for price proposals; and
(3) Actions taken to obtain additional funds or to deobligate excess funds.
SUBPART 217.77--OVER AND ABOVE WORK
217.7700 Scope of subpart.
This subpart prescribes policies and procedures for acquisition of over and above work.
(a) Contracts for the performance of maintenance, overhaul, modification, and repair of various items (e.g., aircraft, engines, ground support equipment, ships) generally contain over and above work requirements. When they do, the contracting officer shall establish a separate contract line item for the over and above work.
(b) Over and above requirements task the contractor to identify needed repairs and recommend corrective action during contract performance. The contractor submits a work request to identify the over and above work and, as appropriate, the Government authorizes the contractor to proceed.
(c) The clause at 252.217-7028, Over and Above Work, requires the contractor and the contracting officer responsible for administering the contract to negotiate specific procedures for Government administration and contractor performance of over and above work requests.
(d) The contracting officer may issue a blanket work request authorization describing the manner in which individual over and above work requests will be administered and setting forth a dollar limitation for all over and above work under the contract. The blanket work request authorization may be in the form of a letter or contract modification (Standard Form 30).
(e) Over and above work requests are within the scope of the contract. Therefore, procedures in Subpart 217.74, Undefinitized Contractual Actions, do not apply.
(f) To the maximum extent practical, over and above work shall be negotiated prior to performance of the work.
217.7702 Contract clause.
Use the clause at 252.217-7028, Over and Above Work, in solicitations and contracts containing requirements for over and above work, except as provided for in Subpart 217.71.