**SIMPLIFIED ACQUISITION PROCEDURES**

**I. INTRODUCTION**

**A. SCOPE**

This guidance is intended to assist Acquisition Officials in the
organizational units responsible for acquisition activities at NSF:

-   Contracts Policy and Oversight (CPO) in BFA;

-   Division of Administrative Services (DAS) in IRM; and

-   Division of Information Systems (DIS) in IRM and other
    organizational units with staff that have acquisition authority.

This document is provided as a reference to guide, instruct, and train
staff who are responsible for acquisition personnel in conducting
simplified acquisitions and other streamlined acquisitions in accordance
with National Science Foundation (NSF) guidelines. It incorporates the
simplified acquisition procedures promulgated by the [*Federal
Acquisition Streamlining Act of
1994*](http://www.nsf.gov/home/grants/ecplan2.pdf) (FASA) and prescribed
by the [*Federal Acquisition Regulations* (FAR) Part
13](http://www.arnet.gov/far/current/html/13.html) for procuring
requirements valued up to the current simplified acquisition dollar
threshold of \$100,000.

The Policy Office will issue updates to this SOG as needed. Please
forward suggestions for additional material such as new FACs, OFPP or
GAO guidance, NSF policies, or any necessary revisions to the Policy
Office for possible inclusion in the next update.

Numbered attachments to this SOG include a description of NSF
Procurement and Contracting Assignments by division, a Glossary of Terms
with electronic links to sources, and a FAR Reference Table. To access a
resource electronically, click on the address.

**B. TYPES OF PURCHASE**

Simplified acquisition procedures describe the methods used for making
purchases of supplies or services by imprest funds, purchase orders,
blanket purchase agreements or Government-wide commercial purchase
cards. This guidance covers the use of simplified acquisition
procedures, including micro-purchase procedures.

**C. DIVISION OF RESPONSIBILITIES**

Several NSF organizational units have responsibilities for acquiring
goods and services for the Foundation. The division of most procurement
authority was described in a memorandum dated 18 July 1990, from the
Director, DGC**,** on the subject of \"Contracting/Grants Officer
Authority.\" A summary of the division of authority is attached as
***Attachment 1*** to this document. Although not discussed in this
document, Human Resources Management of the Division of Information and
Resource Management (IRM/HRM) is responsible for the acquisition of
training and human-capital development resources for Foundation
employees.

**II. SOURCE SELECTION AND PRIORITIES**

(FAR 8.001)

**A. COMPETITION** ([FAR
6.101](http://www.arnet.gov/far/current/html/06.html#6.101),[13.106-1](http://www.arnet.gov/far/current/html/13.html#13.106-1),[13.106-2](http://www.arnet.gov/far/current/html/13.html#13.106-2))

The Acquisition Official shall follow the priority of sourcing
stipulated in FAR 8.001. Requirements shall be filled at the highest
priority source for which the requirement is reasonably available. The
Acquisition Official shall use the optional Federal Supply Schedules
over open market, commercial sources as listed in [FAR Part
8.001](http://www.arnet.gov/far/current/html/08.html#8.001). The
Javits-Wagner-O'Day (JWOD) Programs (for the purchasing from blind
persons and persons with severe disabilities) remains applicable under
the \$100,000 threshold. The JWOD Program is not waived, superseded or
bypassed by micropurchasing authority or buying commercial items to
substitute JWOD.

**B. SMALL BUSINESS SET-ASIDES** (FAR 13.003(b)(1);19.202)

Unless otherwise authorized, all requirements between \$2,500 and
\$100,000 shall be reserved for small businesses (schedule contracts and
delivery orders issued under contracts are excluded). The requirement
may be procured on an unrestricted basis if the Acquisition Official
determines that there is no reasonable expectation that two or more
small businesses can provide the requirement on competitive terms (i.e.,
market price, quality and delivery), or if a reasonable quotation from a
small business under a set-aside is not received. Justification for
award to other than small business must be documented in the procurement
file. The NSF *Office of Small and Disadvantaged Business Utilization*
or the *US Small Business Administration* should be consulted and their
recommendation considered when making such a determination. For guidance
and assistance, contact NSF Small and Disadvantaged Business Utilization
Officer in Room 527 at 292-7082 or E-mail Donald Senich at
[\<dsenich@nsf.gov\>.](mailto:dsenich@nsf.gov)

The SBA\'s ProNet is a useful tool in locating small businesses. ProNet
is an internet-based database providing access to the profiles
(products, services, and references) of more than 170,000 small
businesses, including disadvantaged, *8(a)* certified, and women-owned
firms. ProNet can be accessed at <http://pro-net.sba.gov/>.

**C. SOURCE ELIGIBILITY**

Prior to soliciting sources, the Acquisition Official shall determine
whether the prospective sources are eligible for federal procurement
awards by verifying whether or not the prospective sources are listed on
the most recent List of Parties Excluded from Federal Procurement and
Non-procurement Programs, which is available under ***DGA, Debarred
Parties*** on the NSF Winstation.

**D. BRAND-NAME OR MAKE-AND-MODEL REQUIREMENTS**

A specific make-and-model requirement is one in which only the requested
make and model of a supplier or manufacturer can satisfy the agency's
need. Since this is considered a restrictive specification, a written
justification is required. The justification should be developed by the
Program Officer, with assistance as requested from the CPO/Contracts
Branch. A request to purchase a product exclusively by brand name should
trigger additional scrutiny as a potential sole-source procurement.

**E. MICRO-PURCHASES THRESHOLD**

Requirements valued at \$2,500 or less need not be competed if the price
is reasonable and appropriate. Simplified acquisitions over \$2,500 must
be justified in accordance with [FAR
13.106-2](http://www.arnet.gov/far/current/html/13.html#13.106-2) if
procured non-competitively.

**F. ACQUISITIONS OF \$25,000 OR LESS**

For simplified acquisitions of \$25,000 or less, the requirement for
competition may be fulfilled by soliciting a minimum of three potential
sources known to supply the requirement commercially and competitively.
The requirement for competition is satisfied even if only one solicited
source responds to the solicitation, if the price is determined to be
fair and reasonable.

**G. AGREEMENTS GREATER THAN \$25,000**

A synopsis of the requirements must be developed for all open market
solicitations exceeding \$25,000 [(FAR
5.101)](http://www.arnet.gov/far/current/html/05.html#5.101).

**H. FEDERAL SCHEDULE CONTRACTS**

Federal schedule contracts list items available to Federal purchasers at
pre-negotiated prices, terms and conditions, thereby satisfying NSF's
interest in competitive procurement. This requirement can be satisfied
by considering products and prices contained in any GSA Multiple Award
Schedules (MAS) automated information system, or reviewing at least
three MAS price lists. The MAS List is available electronically at:
<http://www.fss.gsa.gov/publications.html>

**I. COMMERCIAL ITEMS**

The Acquisition Official shall consider commercial items when they are
available to meet the needs of the agency. Commercial items (including
services and supplies) are subject to the policy and procedures
prescribed in [FAR Part
13](http://www.arnet.gov/far/current/html/13.html), Simplified
Acquisition Procedures.

**III. SOLICITATIONS**

(FAR Part 13)

For actions not expected to exceed \$25,000, paper solicitations should
be issued only when obtaining electronic or oral quotations is not
economical or practical. Written solicitations, however, shall be issued
for construction contracts estimated to exceed \$2,000. Instructions for
the use of NSF's credit-card purchasing system are available at
<http://www.inside.nsf.gov:80/oirm/das/ssb/visa/start.htm> .

**A. ORAL SOLICITATIONS**

Oral solicitations (i.e., not electronic, paper or fax) are the
preferred method, to the maximum extent practicable, to expedite
requirements not expected to exceed \$25,000. Oral solicitations between
\$10,000 and \$25,000 are not subject to the requirements for public
posting.

**1. Documentation of Oral Solicitations**

For oral solicitations, the Acquisition Official shall record the
amounts of the quotes received, the names of vendors contacted, and
terms and conditions quoted by each, in the procurement file. For
written solicitations the Acquisition Official shall record: notes;
requirements abstracts; quotation information showing pricing, terms and
conditions; and other supplier information, as appropriate.

**2. Documentation From Sources**

Sources responding to solicitations must provide:

-   complete name/address for addressing the order;

-   pricing information/data;

-   delivery terms;

-   prompt payment terms; and

-   delivery schedule.

The Acquisition Official shall obtain the following data for reporting
to the Federal Procurement Data System (FPDS): business size ([FAR
19.101](http://www.arnet.gov/far/current/html/19.html#19.101) and
[19.102](http://www.arnet.gov/far/current/html/19.html#19.102)); status
as a minority owned and operated or women-owned and operated business;
and tax identification number (TIN).

**B. PRODUCT DESCRIPTIONS AND STATEMENTS OF WORK** (FAR 11)

**1. Brand-Name Requests**

The Acquisition Official shall review requisitions to ensure that the
description of the procurement is sufficient to support a procurement
action and provide assistance forin doing so to program offices, as
needed. Requisitions which state that only a specific make and model, or
which include specifications peculiar to a single source, must be
justified in writing (as described above in section II, D.)

**2. Information Needed for Solicitations**

The Acquisition Official shall obtain all the information necessary for
issuance of the solicitation and making the award. This information
includes, but is not limited to, deliverables, schedules, acceptance
conditions, billing instructions, attachments or any supplemental
documentation.

**C. SERVICE CONTRACTS**

A *Service Contract* directly engages the time and effort of a
contractor whose primary purpose is to perform an identifiable task
rather than to furnish a tangible product. A service for NSF must be
non-personal and one that can be performed by an individual or
organization.

**1. Advisory and Assistance Services**

Advisory and assistance services are those services provided under
contract by non-NSF sources to support or improve:

> • organizational policy development;
>
> • decision-making;
>
> • management and administration;
>
> • program and/or project management and administration; or
>
> • research and development.

Government employees must be used in the decision-making role to
evaluate proposals for advisory- or assistance-services contract actions
unless Government personnel are not reasonably available. See [FAR
37.204](http://www.arnet.gov/far/current/html/37.html#37.204) for
procedures for determining the availability of Government personnel.

**2. Printing Services**

Printing services are procured by DAS under specific authority of the
*NSF Act* (42 USC §1870(g)).

**3.Personal Services Contract** [(FAR
37.104)](http://www.arnet.gov/far/current/html/37.html#37.104)

A personal services contract creates an employer-employee relationship
between NSF and an individual. Special, statutory approvals are required
for personal service contracting, so agreements with the potential to
create an employment relationship are reviewed carefully to ensure,
among other considerations, that competitive selection procedures are
not ignored and that human resource limitations are not exceeded. **NSF
does not have the statutory authority** **to enter into a contract for
personal services.** The Office of General Counsel (OGC) should be
consulted for advice, therefore, when an Acquisition Official receives a
requirement for services that may be construed to appear like personal
services. If it is determined that the services are considered to be
personal services, CPO or DAS will work with the initiating office in an
attempt to use some other mechanism to achieve the desired results.

**4. Considerations in Service Contracting**

Service contracts and modifications require a statement of work and
written determination that none of the functions to be performed is
inherently governmental, i.e., so intimately related to the public
interest that performance by Government employees is mandated. [(FAR
Subpart 7.503)](http://www.arnet.gov/far/current/html/07.html#7.503)
Examples of services that the Foundation is likely to acquire include:

-   Research and development[(Part
    35)](http://www.arnet.gov/far/current/html/35.html);

-   Advisory and assistance services;

-   Operation of Government-owned equipment, systems or facilities;

-   Architect-Engineering [(Subpart
    36.6)](http://www.arnet.gov/far/current/html/36.html#Subpart36.6);

-   Communications services;

-   Transportation and related services [(Part
    47)](http://www.arnet.gov/far/current/html/47.html); and

-   Maintenance, overhaul, repair, servicing, modernization, or
    modification of supplies, systems, real property or equipment.

**IV. REVIEW CONSIDERATIONS**

**A. SPLIT REQUIREMENTS [(FAR
13.003(c)(1))](http://www.arnet.gov/far/current/html/13.html#13.003)**

**Generally, increasingly restrictive provisions are placed on purchases
as the dollar value of the purchased item increases. The term
\"splitting requirements\" refers to the practice of breaking down known
requirements into two or more purchases to reduce the dollar value of
each below restrictive thresholds for competitive simplified acquisition
procedures or full-and-open competitive procedures. The practice is
prohibited by[FAR
13.003(c)(1)](http://www.arnet.gov/far/current/html/13.html#13.003). In
some cases, the vendor offers price reductions in the form of purchase
discounts to customers who make larger purchases. Such price reductions
could be lost by artificially reducing the size of a procurement. If the
Administrative Officer (within the Directorate) or the Acquisition
Official suspects that a requirement has been split to circumvent a
pricing threshold, that concern should be discussed with the individual
who initiated the purchase request and, if necessary, the requisitions
returned for consolidation.**

**B. LABOR LAWS (FAR Parts 22, 36 and 37)**

**Labor laws may apply to simplified acquisitions (e.g., wages paid to
contractor personnel, work hours, working environments and other factors
affecting how the contractor performs the requirement). A prescribed FAR
clause, or provision for actions subject to these laws, must be included
in solicitations and awards using simplified acquisition procedures. The
labor laws that relate to procurement are summarized at
<http://www.ios.doi.gov/pam/1422-3.html> and at [FAR
22.](http://www.arnet.gov/far/current/html/22.html)**

**C. FUNDING OF ADMINISTRATIVE SUPPORT COSTS WITH PROGRAM FUNDS (NSF
Manual 17, *Financial Management Policy Manual)***

**The Foundation's Financial Management Policy distinguishes between
program support costs and administrative support costs. It stipulates
that administrative support costs shall be funded from the NSF Salaries
and Expenses appropriation. Requisitions that commit program funds for
administrative support costs must be approved by the Chief Financial
Officer (CFO) or the Deputy CFO before an agreement is signed.
(Reference Section 170 through 173 of NSF Manual 17, *Financial
Management Policy Manual* or at
[http://www.inside.nsf.gov/bfa/dfm/fpm/start.htm](http://www.inside.nsf.gov/bfa/dfm/fpm/170.htm).**

**D. EXCHANGE/SALE TRANSACTIONS (40 USC §481(c), *Federal Property
Management Regulation* (FPMR) Subpart 101-46.3)**

**1. Trade-In Value**

**In some circumstances, NSF-owned property can be offered for trade-in
value or exchanged to offset the purchase price of equipment that is
similar in kind to the existing equipment. The fair market value of the
equipment must be assessed and applied to the purchase of the new
equipment. The market value can be determined through a market survey of
dealers in used equipment or by assessing the residual value after
depreciation.**

**2. Exchange Documentation**

**Exchange transactions must be documented in writing by the Acquisition
Official. This documentation should be in the form of a *Determination
and Findings* (D&F) that includes a summary of the essential facts of
the transaction and a determination statement indicating that the legal
requirements for exchange/sale transactions have been met. The NSF
Property Officer shall be provided with a copy of each order that
involves an exchange transaction.**

**3. Evaluating Purchase Credit**

**Credit offered by vendors for trade-ins shall be considered when
evaluating quotations. Figure 1 illustrates an example of how this might
be done. In this example, Company B would be selected because it offers
the lowest overall price when trade-in value is considered.**

Figure 1

+---------------------+----------------+-------------+----------------+
| ** **               | **Company**    | **Company** | **Company**    |
|                     |                |             |                |
| **Cost**            | **A**          | **B**       | **C**          |
+---------------------+----------------+-------------+----------------+
| New Equipment       | \$58,000       | \$58,500    | \$59,000       |
+---------------------+----------------+-------------+----------------+
| Trade-in Value      | 0              | 600         | 800            |
+---------------------+----------------+-------------+----------------+
| **Total**           | **\$58,000**   | *           | **\$58,200**   |
|                     |                | *\$57,900** |                |
+---------------------+----------------+-------------+----------------+

**E. EQUIPMENT LEASE OR PURCHASE ([FAR Subpart
7.4](http://www.arnet.gov/far/current/html/07.html#7.4))**

**An Acquisition Official's analysis of the requirements should consider
whether it is more advantageous to lease or purchase equipment. The
Acquisition Official shall provide appropriate information and
assistance, as requested, to support the decision to lease or
purchase.**

**Purchasing equipment is generally advantageous if the leasing costs
will exceed the purchase costs. Leasing is appropriate if it is
advantageous to the agency or if it provides an interim measure when
circumstances require immediate use of equipment to meet program/system
goals. If leasing is justified, a lease with option to purchase is
preferred. The contract should specify the purchase price or a formula
reflecting how the purchase price will be established at the time of
purchase. For any purchase of equipment with a unit cost of \$5,000 or
more, the Acquisition Official shall provide the NSF Property Officer
with a copy of the order.**

**The Acquisition official shall consider \"life cycle costs\" (i.e.,
the cost of consumables and maintenance costs over a specified period)
for lease and purchase analysis. In the example below, the purchaser is
considering the relative benefits of purchasing vs. leasing a
medium-speed copier. In Figure 2A, the Purchase Scenario is expected to
cost \$18,300. In Figure 2B, the Lease Scenario is presented with
expected cost of \$13,150. In the Lease Scenario, the Foundation enters
into a \"Lease-to-Purchase\" (LTOP) arrangement wherein NSF assumes
ownership to the equipment at the conclusion of the lease.**

**[Lease-Purchase Evaluation]{.underline}**

Figure 2A---Purchase Scenario

  --------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------
                                                                                                            

  **PURCHASE COST**                                                                                         \$10,000

  LESS: Trade-In/Up                                                                                         [(\$2,500)]{.underline}
  Allowance                                                                                                 

  **Net Purchase Cost**                                                                                     **\$7,500**

                                                                                                            

  **OPERATING COST**    Year 1               Year 2               Year 3               Total                

                                                                                                            

  Consumables\*         \$ 1,500             \$ 1,600             \$ 1,700             \$ 4,800             

  Maintenance           [\$                  [\$                  [\$                  [\$                  
                        2,000]{.underline}   2,000]{.underline}   2,000]{.underline}   6,000]{.underline}   

  **Total**             3,500                3,600                3,700                                     **[\$10,800]{.underline}**

                                                                                                            

  **COST TO PURCHASE**                                                                                      **\$18,300**

                                                                                                            
  --------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------

**\* The toner, developer and similar materials consumed in operating
the machine.**

** **

**[Figure 2B\--Lease]{.underline}**

**[Cost/Price Evaluation]{.underline}**

** **

  --------------------- -------------------- -------------------- -------------------- -------------------- ---------------------------
                        **Year 1**           **Year 2**           **Year 3**           **Subtotal**         **Total**

  **LEASE COST**        \$2,750              \$2,750              \$2,750                                   **\$8,250**

  LESS: Trade-In/Up                                                                                         [(\$2,500)]{.underline}
  Allowance                                                                                                 

  **Net Lease Cost**                                                                                        **\$4,750**

                                                                                                            

  **OPERATING COST**                                                                                        

                                                                                                            

  Consumables           \$ 1,250             \$ 1,300             \$ 1,300             \$ 3,900             

  Maintenance           [\$                  [\$                  [\$                  [\$                  
                        1,500]{.underline}   1,500]{.underline}   1,500]{.underline}   4,500]{.underline}   

  **Total**             2,750                2,800                2,850                                     **[\$8,400]{.underline}**

                                                                                                            

  **COST OF LEASE**                                                                                         **\$13,150**
  --------------------- -------------------- -------------------- -------------------- -------------------- ---------------------------

**F. CONSTRUCTION/REPAIRS/ALTERATIONS OF REAL PROPERTY**

**GSA has exclusive procurement authority for all work involving the
construction, repair or alteration of real property, including:**

-   **painting and the installation of wall coverings;**

-   **utilities, lighting, air conditioning/heating systems;**

-   **conduits and cable trays, wiring and cabling; and**

-   **flooring.**

**Requirements exceeding \$25,000 must be forwarded to the GSA Field
Office on a Reimbursable Work Authorization (GSA Form 2957). The
Foundation has been granted a limited delegation of procurement
authority for requirements valued at \$25,000 or less. This delegation
is granted to named DAS employees who may enter into contracts covered
by the delegation.**

**V. INFORMATION TECHNOLOGY (IT)**

**([FAR Parts 12](http://www.arnet.gov/far/current/html/12.html) and
[39](http://www.arnet.gov/far/current/html/39.html))**

**A. COMPUTER WORKSTATIONS**

**DIS has established a listing of recommended configurations and
manufacturer brands for computer workstations that will connect to the
local area network. It does not cover servers, portables or stand-alone
equipment. Additional information is also available electronically on
the DIS home page at:
<http://www.inside.nsf.gov/oirm/dis/pcmac/hardware.htm> .**

**To reduce cost and acquisition lead-time, each month CPO solicits
price quotes for each of the DIS-recommended configurations from
suppliers of the approved brands. Offices are encouraged to specify
their requirements for computer workstations in one or more recommended
configurations, and the Acquisition Official should work with offices to
purchase computing equipment that meets the requirements at the lowest
possible cost. Monthly price quotations are published from vendors able
to supply equipment that satisifies NSF's physical and performance
specifications.**

**B. ENERGY EFFICIENCY REQUIREMENTS**

**1. Energy Efficient Equipment**

**[*Executive Order
12845*](http://www.pub.whitehouse.gov/search/executive-orders.html),
requires agencies to purchase energy-efficient computing equipment,
including microcomputers (PCs), workstations, and video monitors and
printers. Computing and related equipment must meet the energy
efficiency requirements of the *Energy Star Computers Program* of the
Environmental Protection Agency (EPA). EPA publishes listings of
qualified equipment on its Web site at:
<http://www.epa.gov/appdstar/esoe/products.html>. Compliant equipment is
generally referred to as being *Energy Star Compliant* or *green*.**

**2. Purchasing Clauses**

**The Acquisition Official shall include an appropriate clause in all
solicitations and orders for subject equipment requiring vendors to
provide only Energy Star compliant equipment, and shall verify with
vendors prior to ordering that the equipment is Energy Star compliant.
Language for applicable solicitation and contract clauses is available
at <http://www.epa.gov/appdstar/esoe/faq.html>.**

**C. YEAR 2000 COMPLIANCE**

**All equipment and software that will perform date/time functions must
be able to accurately process dates and times occurring after December
31, 1999, known as Year 2000 (Y2K) compliance. All solicitations and
orders shall require that vendors provide only equipment and software
that is Y2K compliant.**

**D. SOFTWARE LICENSES**

**Commercial computer software (or commercial computer software
documentation) is acquired under licenses customarily provided to the
public in accordance with [FAR Part
12](http://www.arnet.gov/far/current/html/12.html). The principal
elements of such a license provide that:**

-   **Commercial software is protected by copyright and/or patent.**

-   **NSF purchases the right (license) to use software, but ownership
    remains with the author or publisher.**

-   **Commercial off-the-shelf software (commonly referred to as *COTS*
    or *shrink-wrapped*) that is intended for use on a single station
    includes the producer's *standard licensing* *agreement* and usually
    carries the proviso that by opening the package the customer accepts
    the terms and conditions contained therein.**

-   **NSF accepts *standard license* *agreements* without negotiation.**

-   ***Site Licenses* allow NSF to make copies for its own use under
    specific terms and conditions but they must conform to NSF policy.**

-   **The Acquisition Official shall obtain technical and legal advice
    as necessary in reviewing site-licensing agreements and negotiate
    with the manufacturer, as necessary, to modify objectionable
    terms.**

**V. EVALUATION OF QUOTATIONS**

**(FAR 9, 13 and 19)**

**A. EVALUATION CRITERIA**

**All quotations or offers received must be considered. Quotations may
be evaluated and awarded on the basis of price alone, which is the
preferred method, or on price and other factors when appropriate (e.g.,
such as past performance quality of service, technology or
qualifications, delivery terms or warranties). Generally, the
Acquisition Official accepts the representations and certifications
supplied by vendors unless there is evidence to the contrary or reason
to believe otherwise. Determinations of non-responsibility of a small
business, however, are referred to the *US Small Business
Administration* in accordance with [FAR
19.302.](http://www.arnet.gov/far/current/html/19.html#19.302)
Comparative evaluations may be conducted. An award is generally made to
the responsible vendor offering the best value item(s) at the lowest
delivered price. The basis of award is documented in the file.**

**B. PREFERRED PRACTICE**

**Requirements that will be solicited on an all-or-none basis specify
that prospective sources must supply all of the requested items in order
to be considered. The preferred practice is to determine the lowest cost
alternative between a single award and multiple awards to vendors, based
on the quoted prices for each item and the administrative costs of
making multiple awards, as illustrated for Companies A and B below in
Figure 3 below. The amount of \$500 is the administrative cost for each
additional award.**

**[Figure 3]{.underline}**

Cost/Price Evaluation

  ------------- --------- -------------- -------------- -------------- --------------
  **Item**      **Qty**   **A**          **B**          **C**          **LCPI\***

  CLIN 01       500       \$**5,000**    \$7,500        \$10,000       \$5,000

  CLIN 02       500       7,500          6,000          **5,000**      5,000

  CLIN 03       500       10,000         10,000         **5,000**      5,000

  ACPAA\*\*                                                            500

  **Total**               **\$22,500**   **\$23,500**   **\$20,000**   **\$15,500**
  ------------- --------- -------------- -------------- -------------- --------------

**\*LCPI - Lowest Cost Per Item**

**\*\*ACPAA - Administrative Cost Per Additional Award**

**Comparison of individual line items in Figure 3 reveals that the
lowest line item prices were offered by Contractor A for Cost Line Item
Number (CLIN) 01, and Contractor C for CLINs 02 and 03. After applying
the \$500 administrative cost for the additional award and comparing the
total amount of two awards at \$15,500 to the total price of the lowest
offered price of \$20,000, it appears that award of multiple contracts
is warranted.**

**C. DISCOUNTS**

**There are several types of discounts that should be considered during
the procurement process.**

**1. Quantity Discount**

**A quantity discount is a price reduction given to a buyer for
purchasing increasingly larger quantities of items. Such a discount is
usually offered for purchasing a specific quantity of items at one time,
for purchasing a specified dollar total at one time, or for purchasing a
specified dollar total over an agreed-upon time period (also known as a
cumulative discount). The Acquisition Official is encouraged to seek
quantity discounts when appropriate.**

**2. Trade Discounts**

**A trade discount from the list price is one that is offered to all
customers. This may include promotion of seasonal, new or slow-selling
items or special discounts offered by the manufacturer or dealer.**

**3. Prompt Payment Discount**

**A prompt payment discount is one that is offered by a vendor for
payment by the Government (buyer) prior to the date payment is due. Such
discounts are not considered in the evaluation of bids or offers but any
discount offered is included in the contract award. [(FAR Subpart
32.9)](http://www.arnet.gov/far/current/html/32.html#Subpart32.9)**

**D. SHIPPING/TRANSPORTATION [(FAR Part
47)](http://www.arnet.gov/far/current/html/47.html)**

**When considering transportation costs in the procurement of supplies,
the term *Free on Board* (FOB) is used to determine the responsibility
and basis for payment of freight charges and the point at which title
for goods passes to the buyer or consignee. The two most common
shipping-related terms the Foundation uses are *FOB Origin* and *FOB
Destination*.**

**1. FOB Origin**

**The seller (or *consignor)* places the goods on the conveyance and the
buyer (or *consignee*) is responsible for the cost of shipping. Shipping
charges should be listed as a separate line item in the contract. The
risk of loss or damage to supplies passes from the contractor to the
Government when supplies are delivered to a carrier, unless otherwise
specified in the contract. This mode of shipping should be avoided if
possible.**

**2. FOB Destination**

**The seller (or consignor) delivers the goods on its conveyance to the
location specified by NSF (e.g., warehouse unloading platform or
receiving dock or project site) and the seller (or consignor) is
responsible for the cost of shipping. Shipping charges are included in
the total price of the contract and should not be listed as a separate
line item. The risk of loss or damage to supplies passes from the
contractor to the Government upon acceptance by NSF (or delivery to a
Government location), unless otherwise specified in the contract.**

**E. DELIVERY/ACCEPTANCE [(FAR Part
46)](http://www.arnet.gov/far/current/html/46.html)**

**1. Inspection Requirements**

**[FAR clause
52.246-1](http://www.arnet.gov/far/current/html/52.html#52_246),
*Contractor Inspection Requirements*, should be included, when
appropriate, in solicitations and contracts for supplies or services
when the anticipated contract amount does not exceed the simplified
acquisition threshold. The contractor is responsible for ensuring that
all necessary inspections are performed to substantiate conformance of
supplies or services to the requirements of the contract.**

**2. Inspection Criteria**

**Generally, for acquisitions of supplies or services NSF shall perform
inspection at destination. Supply shipments are normally received at
NSF's loading dock or warehouse. The receiving personnel will perform a
\"visual inspection\" of supplies for quantities received, any visible
damages, duplicate shipments, etc. The supplies are then forwarded to
the end-user for complete inspection and actual acceptance.**

**3. Acceptance**

**Acceptance is the act of an authorized agent of the Government
assuming ownership (title) of supplies or approving specific services
provided under a contract. It indicates that the supplies or services
provided by a contractor conform to all requirements of the contract
including quality, quantity and condition of the supplies. When actual
acceptance is not accomplished, acceptance may be implied by the
Government's delay, conduct or other behavior.**

**4. Rejection**

**The Acquisition Official should reject supplies or services that do
not conform to the contract's requirements. The contractor shall be
given the opportunity to correct or replace nonconforming supplies or
services at no additional cost to the Government.**

**5. Receiving Report**

**A receiving report is the document that accomplishes the formal
acceptance of supplies or services performed under a Government
contract. The authorized Government agent signs the document that serves
as the authorization for payment to the contractor. A receiving report
is the document that accomplishes the formal acceptance of supplies or
services performed. The receiving report may also be used to determine
that supplies were received at destination. The person at the loading
dock can check in supplies received by using the purchase order's
receiving copy.**

**VI ADMINISTRATION**

**A. REPORTING REQUIREMENTS ([FAR
4.6-4.9](http://www.arnet.gov/far/current/html/04.html#Subpart4.6))**

**1. Tax Reporting on Purchase Orders Over \$600**

**The Internal Revenue Service requires certain purchase order payments
of \$600 or more to be reported to both the individual and the Internal
Revenue Service each tax year on a Form 1099-Misc *Miscellaneous
Income*. To enable DFM to identify those purchase order payments that
are 1099 reportable, the Acquisition Official should follow the
procedures below in paragraphs 2 and 3.**

**2. Tax Reporting on Sole Proprietorship**

**Whenever a purchase order is issued that is considered to be 1099
reportable, object class code 2527 is used when the vendor is the sole
proprietor and either Salaries and Expenses (S&E) or Non-S&E
appropriations are used. (Note that the following are not 1099
reportable: acquisition of supplies; and object class code 2520, which
is used if the vendor is not a sole proprietor.)**

**3. Tax Identification Number**

**When inputting an award to an institution that is a first-time
awardee, the Contract Specialist must contact the awardee to obtain the
Institution Number. The first time an Identification Number is used to
issue a purchase order determined to be 1099 reportable, provide a
completed W9 form to DFM/FSB. The W9 will provide the necessary
nine-position Tax Identification Number, which is either an Employer
Identification Number (EIN) or an individual Social Security number
(SSN), and an identifier as to whether the number is an EIN or an SSN.
On the W9, include the Institution Number and the pay categories used to
classify 1099 reportable purchase order payments. The pay categories and
their descriptions generally used by NSF are as follows:**

  ------------------------------ ----------------------------------------
  **Category**                   **Description**

  1                              Rents (all types) unless paid to real
                                 estate agents (e.g., office space and
                                 machine rentals such as copiers,
                                 bulldozers, computers, etc.)

  6                              Medical or Health Care Services

  7                              Non-employee Compensation (includes
                                 fees, commissions, prizes and awards for
                                 services performed or other forms of
                                 compensation for services performed by
                                 an individual who is not the agency's
                                 employee)
  ------------------------------ ----------------------------------------

***B. FEDERAL PROCUREMENT DATA SYSTEM (FPDS)***

**Awards shall be reported on the FPDS as prescribed by [FAR
4.6](http://www.arnet.gov/far/current/html/04.html#Subpart4.6). Actions
of \$25,000 or less are reported on a consolidated basis on the SF 281
*Summary Contract Action Report*. Dollar actions greater than \$25,000
are reported individually using a SF 279 *Individual Contract Action
Report*. Dollar modifications of actions previously reported using a SF
279 must also be reported using a SF 279. The Acquisition Official is
responsible for ensuring that the relevant data for each procurement is
captured for reporting purposes.**

**C. DISTRIBUTION**

**The original copy of orders shall be sent to the vendor and a copy
retained for the official acquisition file. One copy of each order shall
be distributed to the requesting office, the receiving office, DFM, the
NSF Property Officer in DAS (if order is for accountable property) and
other individuals when applicable.**

**D. AWARD FILE DOCUMENTATION**

**1. Minimum Documentation Requirements**

**Award (file) folders for purchase contracts/orders and delivery orders
shall include the following items to document the procurement:**

-   **a signed copy of the order with attachments, if any;**

-   **the original copy of the initiating requisition;**

-   **a copy of the system printout of funds committed against the
    requisition;**

-   **the original copy of each approved justification and/or waiver as
    appropriate (e.g., a sole source justification, a waiver of *Energy
    Star* requirements, or similar type of document);**

-   **a record of how the procurement was publicized, if required (e.g.,
    a copy of a CBD synopsis or other public notice) or a statement why
    the procurement was not publicized;**

-   **a copy of written solicitation, if used, or a brief description of
    the method of solicitation used;**

-   **a record of sources solicited, bids/quotations received, and
    evaluation of bids/quotes;**

-   **a notation that the vendor is not listed on the most current *List
    of Parties Excluded from Federal Procurement and Non-procurement
    Programs* (available under the DGA submenu on the Winstation menu);
    and**

-   **any other documentation relevant to the procurement.**

**2. File Organization**

**Documentation should be labeled and segregated in the award folder so
that it may be easily associated with the corresponding procurement
action. Documentation for the original award, and for each amendment,
should be labeled and tabbed as such.**

**3. Unsuccessful Solicitations**

**Unsuccessful quotations, including samples, and solicitation
correspondence may be retained in a separate folder from the award
folder.**

**4. Record Retention Requirements**

**Award files must be retained, closed out and disposed of in accordance
with the record retention schedule specified in** **[FAR
4.804](http://www.arnet.gov/far/current/html/04.html#4.804) and
[4.805](http://www.arnet.gov/far/current/html/04.html#4.805). Generally,
award files for simplified acquisitions may be closed out upon evidence
of physical completion of the order and final payment. The retention
period is three years after final payment for construction orders of
\$2,000 or less and other orders of \$25,000 or less; for other orders,
the retention period is six years and three months.**

**E. TERMINATION OR CANCELLATION OF PURCHASE ORDER** **[(FAR
13.504](http://www.arnet.gov/far/current/html/13.html#13.504) and
[49](http://www.arnet.gov/far/current/html/49.html))**

**1. Termination of a Purchase Order**

**Action that must be taken to terminate a purchase order depends on
whether performance has begun or whether the order has been accepted by
other means.**

a.  **If the contractor did not accept the order in writing, the
    Acquisition Official can cancel the order in writing through a
    modification, and request that the contractor provide written
    acceptance of the cancellation and proceed as follows:**

    -   **If the contractor agrees to a no-cost cancellation and does
        not claim that costs were incurred as a result of beginning
        performance, no further action is needed.**

    -   **If the contractor does not agree to a no-cost cancellation or
        claims that costs were incurred as a result of beginning
        performance, termination action must be processed by the
        Contracting Officer as prescribed in FAR Part 49.**

b.  **If the contractor has accepted the order in writing by signature
    on the purchase order or a subsequently issued modification, or
    performance has begun, termination action must be processed by the
    Acquisition Official as prescribed in [FAR Part
    49.](http://www.arnet.gov/far/current/html/49.html)**

**2. Internal Notification**

**When canceling a purchase order, provide Finance with written notice
so that they can properly deobligate funds.**

**ATTACHMENT 1**

**Information in this Attachment is taken from the Memorandum dated July
18, 1990 from Director, DGC to Branch chiefs and Section Heads on the
subject of \"Contracting/Grants officer Authority\" updated to reflect
the current organizational status.**

**NSF PROCUREMENT/CONTRACTING ASSIGNMENTS**

**Division of Administrative Services**

**[Procurement Section]{.underline}**

**A. All S&E requirements of \$100,000 or less from the open market or
from Federal Supply Schedule Awards for commercially available:**

1.  **Supplies, including ADP standard software but excluding site
    licensing agreements**

2.  **Equipment, excluding ADP purchase/lease/rental**

3.  **Services, including NSF central administrative support and
    housekeeping services such as: electrical, carpentry,
    alterations/renovations, construction, maintenance (excluding awards
    for ADP maintenance resulting from RFPs that exceed \$25,000),
    moving, printing, regulated utilities, courier/messenger, mailing,
    etc. but excluding professional and expert-type services such as
    consulting, audit, health, ADP, public relations, training,
    audio-visual, etc.**

**B. S&E requirements over the above amount specifically delegated by
the Procurement Executive on an individual award basis. Examples of such
delegations include building lease, regular telephone service, parking
service, subscription service. The following requirements will not be
delegated: telecommunications, contracting out of previous NSF in-house
functions such as mail and warehouse services.**

**C. Program fund requirements limited to the rental of space for panel
meetings and conferences and the printing of program materials.**

**[Property Section]{.underline}**

**Disposition (loan, transfer or removal from inventory) of excess or
other property obtained under NSF awards, except where such action
changes the terms of the award (to be handled by DGA or CPO). Prior DGA
or CPO concurrence required if property is accountable under a NSF award
or where NSF has retained title.**

**Division of Contracts Policy and Oversight**

**A. All Program fund requirements regardless of amount except printing,
rental of space for panel meetings and conferences (handled by DAS), and
IPAs (handled by HRM).**

**B. All S&E requirements, including small purchases, for:**

1.  **site licensing agreements**

2.  **ADP equipment purchase/lease/rental**

3.  **ADP maintenance awards, exceeding \$25,000, that result from
    RFPs**

4.  **professional and expert type services, such as consulting, audit,
    health, ADP, public relations, training, audio-visual, etc.**

**C. S&E requirements over \$100,000 unless specifically delegated to
DAS Procurement Section by Procurement Executive on an individual award
basis.**

**ATTACHMENT 2**

**GLOSSARY OF TERMS**

**Acquisition Official**

**A person who has the authority and responsibility to acquire goods and
services in accordance with agency procedures and FAR guidelines.**

**Blanket Purchase Agreement [(FAR
13.2)](http://www.arnet.gov/far/current/html/13.html#13.2)**

**A Blanket Purchase Agreement (BPA) is a set of pre-negotiated terms
and conditions governing future transactions between the Government and
the vendor. It is not a contract, but simply an agreement on specific
conditions or terms for future actions when they occur. A BPA may be
established with any responsible vendor when there is a likelihood that
there will be repetitive purchases during a stated period within a broad
class of goods (e.g., office supplies), and the exact items, quantities
and delivery requirements cannot be accurately forecasted. The
Acquisition Official should consider establishing multiple BPA's with
qualified vendors when appropriate.**

**Delivery/Task Orders[(FAR
16.505)](http://www.arnet.gov/far/current/html/16.html#16.505)**

**The terms \"delivery order\" and \"task order\" apply to orders for
goods and services under established indefinite delivery/indefinite
quantity (IDIQ) contracts. The terms and conditions for placing orders
are specified in the governing contracts.**

**FEDSTRIP**

**FEDSTRIP orders placed with the Federal Supply Services including
orders placed through the Federal Stock Program. Procedures for these
methods are not provided in this document. The use of this method of
acquisition is described in GSA's publications, FEDSTRIP Operating Guide
and FEDSTRIP Desk Guide.**

**Government-wide Commercial Purchase Cards**

**The Government-wide Commercial Purchase Cards is the method of
acquiring goods and services whenever possible for all supply and
micro-purchases less than \$2,500. The purchase card simplifies the
purchasing and payment process and reduces the transaction cost
associated with small acquisitions. The use is explained in DAS's
*\"National Science Foundation IMPAC Purchase Card Program Operating
Procedures and* is available electronically at:
<http://www.inside.nsf.gov/oirm/dis/pcmac/hardware.htm>**

**GSA Advantage**

**GSA Advantage is available on-line via GSA's home page at
<http://www.fss.gsa.gov/>.**

**GSA Customer Supply Center**

**GSA Customer Supply Center accounts are described in GSA's Customer
Assistance Guide.**

**Micro-Purchase[(FAR
2.101,](http://www.arnet.gov/far/current/html/02.html#2.101) and
[13.2)](http://www.arnet.gov/far/current/html/13.html#13.2)**

**a. The term \"micro-purchase\" refers to a simplified acquisition that
is valued at \$2,500 (\$2,000 for construction) or less. It may be
awarded without competition if the price is considered reasonable. The
Acquisition Official should [not]{.underline} take special steps to
verify price reasonableness unless there is reason to believe that a
quoted price for a micro-purchase is unreasonable or if there is no
comparable pricing data to establish price reasonableness.**

**b. The Acquisition Official encourages program offices to make
micro-purchases using the Government-wide commercial purchase cards.
However, if this option is unavailable, then the Acquisition Official
will procure the needed products or services using the procedures
described in this guidance.**

**Purchase Order**

**A purchase order is an offer made by the Government to a commercial
source. It is distinguished from a delivery, task or call order in that
each action is a separately negotiated transaction without
pre-negotiated terms and conditions. The issuance of a purchase order
does not create a binding contractual agreement. A vendor may accept or
reject it. To create a binding agreement, the vendor must indicate
acceptance of the order by beginning performance, or by written or oral
communication.**

**ATTACHMENT 3**

**REFERENCES**

The following is provided to aid in locating additional information when
acquiring supplies or services using simplified acquisition procedures.

**1. DELIVERY ORDERS**

-   Terms and conditions of the governing contract apply [FAR
    16.505](http://www.arnet.gov/far/current/html/16.html#16.505);
    [16.506(a)](http://www.arnet.gov/far/current/html/16.html#16.506)

-   Fair opportunity to multiple award contractors must be provided for
    actions exceeding \$2,500; no further competition required for
    requirements contracts [FAR
    16.505(b)](http://www.arnet.gov/far/current/html/16.html#16.505)

-   Small business set-aside applies to the basic contract, not each
    individual delivery order

-   Posting/synopsis/display requirements do not apply if the basic
    contract was previously synopsized[FAR
    5.101(a)(2)(ii)](http://www.arnet.gov/far/current/html/05.html#5.101),
    [FAR
    5.202(a)(6)](http://www.arnet.gov/far/current/html/05.html#5.202),
    [FAR
    5.202(a)(6)](http://www.arnet.gov/far/current/html/05.html#5.202)

> **2. MICRO-PURCHASES**

**[ACQUISITIONS ESTIMATED NOT TO EXCEED \$2,500]{.underline}**

**[(\$2,000 FOR CONSTRUCTION)]{.underline}**

-   Micro-purchase procedures apply [FAR
    13.1](http://www.arnet.gov/far/current/html/13.html#13.1)

-   Government-wide commercial purchase card is preferred means to
    purchase and pay for micro-purchases [FAR
    13.201(b)](http://www.arnet.gov/far/current/html/13.html#13.201)

-   Government-wide commercial purchase card and electronic purchasing
    techniques are encouraged [FAR
    13.003(e)](http://www.arnet.gov/far/current/html/13.html#13.003)

-   Must comply with required sources of supplies and services in FAR
    Part 8 [FAR
    13.201(e)](http://www.arnet.gov/far/current/html/13.html#13.201)

-   Purchases shall be distributed equitably among qualified suppliers
    [FAR
    13.202(a)(1)](http://www.arnet.gov/far/current/html/13.html#13.202)

-   Requirements may not be broken down to permit use of simplified
    acquisition procedures [FAR
    13.003(c)(1)](http://www.arnet.gov/far/current/html/13.html#13.003)

-   Competitive quotations are not required if the Contracting Officer
    determines the price is reasonable [FAR
    13.202(a)(2)](http://www.arnet.gov/far/current/html/13.html#13.202)

-   Small business set-aside does not apply [FAR
    19.502-1(b)](http://www.arnet.gov/far/current/html/19.html#19.502-1)

**3. ACQUISITIONS EXCEEDING \$2,500**

***a. The estimated value of the acquisition is more than \$2,500 but
not greater than \$25,000.***

-   Simplified acquisition procedures apply [FAR
    13.003(a)](http://www.arnet.gov/far/current/html/13.html#13.003)

-   Must comply with required sources of supply under [FAR Part
    8](http://www.arnet.gov/far/current/html/08.html), [FAR
    13.003(a)(1)](http://www.arnet.gov/far/current/html/13.html#13.003)

-   For written solicitations, display public notice that is proposed
    contract action for actions estimated to exceed \$10,000 but not
    \$25,000 [FAR
    5.101(a)(2)](http://www.arnet.gov/far/current/html/05.html#5.101)

    -   remain posted 10 calendar days after solicitation issuance or
        until after quotations are opened, whichever is later

-   Requests for quotations should be solicited orally [FAR
    13.106-1(c)](http://www.arnet.gov/far/current/html/13.html#13.106-1)

    -   issue written solicitations only if obtaining electronic or oral
        quotations is not economical or practical

-   Small business set-aside applies [FAR
    13.003(b)(1)](http://www.arnet.gov/far/current/html/13.html#13.003)

-   All timely quotations from responsible sources must be considered
    [FAR
    13.003(h)(3)](http://www.arnet.gov/far/current/html/13.html#13.003)

    -   Contracting Officers shall promote competition to the maximum
        extent practicable [FAR
        13.104](http://www.arnet.gov/far/current/html/13.html#13.104)

        -   generally at least three sources may be considered [FAR
            13.104(b)](http://www.arnet.gov/far/current/html/13.html#13.104)

    -   Exempt from selected provisions and clauses [FAR
        13.006](http://www.arnet.gov/far/current/html/13.html#13.006)

***b. The estimated value of the acquisition is more than \$25,000 but
not greater than \$100,000.***

In addition to the elements from number 1 above, include the following:

-   Synopsis in the CBD is required when written solicitations are used
    [FAR
    5.101(a)(1)](http://www.arnet.gov/far/current/html/05.html#5.101);
    [FAR 5.201](http://www.arnet.gov/far/current/html/05.html#5.201)

***c. The estimated value of the acquisition is more than \$100,000.***

-   Simplified acquisition procedures shall not be used [FAR
    13.003(c)](http://www.arnet.gov/far/current/html/13.html#13.003)

```{=html}
<!-- -->
```
-   FAR Parts 12/14/15 procedures apply

-   Requirements shall not be broken down into several purchases that
    are less than the threshold to permit use of simplified acquisition
    procedures [FAR
    13.003(c)(1)](http://www.arnet.gov/far/current/html/13.html#13.003)