PART 14

GENERAL CONTRACT ADMINISTRATION POLICIES

# Table of Contents

14.1 CONTRACT MANAGEMENT. [2](#contract-management.)

14.2 BASIC RESPONSIBILITY FOR CONTRACT ADMINISTRATION.
[2](#basic-responsibility-for-contract-administration.)

14.3 ASSIGNMENT OF CONTRACT ADMINISTRATION.
[2](#assignment-of-contract-administration.)

14.3.1 Designation of Contracting Officer\'s Representatives.
[2](#designation-of-contracting-officers-representatives.)

14.3.2 Clause Usage Prescriptions. [2](#clause-usage-prescriptions.)

14.4 BASIC CONTRACT ADMINISTRATION CLAUSES.
[3](#basic-contract-administration-clauses.)

14.4.1 Order of Precedence Clause. [3](#order-of-precedence-clause.)

14.4.1.1 Clause Usage Prescriptions. [3](#clause-usage-prescriptions.-1)

14.4.2 Other Rights at Law Clause. [3](#__RefHeading___Toc20894679)

14.4.2.1 Clause Usage Prescriptions. [3](#clause-usage-prescriptions.-2)

14.5 COMMUNICATIONS WITH SUPPLIERS. [3](#__RefHeading___Toc20894681)

14.5.1 Relationships with Suppliers. [3](#relationships-with-suppliers.)

14.6 VARIATION IN QUANTITY. [4](#variation-in-quantity.)

14.6.1 Supply Contracts. [4](#supply-contracts.)

14.6.1.1 Clause Usage Prescriptions. [4](#clause-usage-prescriptions.-3)

14.6.2 Service and Construction Contracts.
[4](#__RefHeading___Toc20894686)

14.6.2.1 Clause Usage Prescriptions. [4](#clause-usage-prescriptions.-4)

14.7 USE OF GOVERNMENT SUPPLY SOURCES BY SUPPLIERS.
[4](#__RefHeading___Toc20894688)

14.8 USE OF DOE EXCESS EQUIPMENT [5](#use-of-doe-excess-equipment)

14.9 BPA CONSENT TO SUBCONTRACT. [5](#bpa-consent-to-subcontract.)

14.9.1 Clause Usage Prescriptions. [5](#clause-usage-prescriptions.-5)

14.10 CONTRACT MODIFICATIONS AND CHANGES.
[6](#__RefHeading___Toc20894692)

14.10.1 Definitions. [6](#definitions.)

14.10.2 Policy. [6](#policy.)

14.10.3 Types of Contract Modifications.
[6](#types-of-contract-modifications.)

14.10.4 Extension of Contracts. [7](#extension-of-contracts.)

14.10.5 Changes. [7](#changes.)

14.10.5.1 Changes Made with a Changes Clause.
[7](#changes-made-with-a-changes-clause.)

14.10.5.1.1 Clause Usage Prescriptions.
[8](#clause-usage-prescriptions.-6)

14.10.5.2 Changes Made without a Changes Clause.
[8](#__RefHeading___Toc20894700)

14.10.6 Forms. [9](#forms.)

14.11 EXERCISING OPTIONS. [9](#exercising-options.)

14.12 SUSPENSION AND STOP WORK ORDERS.
[9](#suspension-and-stop-work-orders.)

14.12.1 Clause Usage Prescriptions. [10](#clause-usage-prescriptions.-7)

14.13 NOVATION AND CHANGE-OF-NAME AGREEMENTS.
[10](#__RefHeading___Toc20894705)

14.13.1 Definitions. [10](#definitions.-1)

14.13.2 Responsibility for Executing Agreements.
[11](#responsibility-for-executing-agreements.)

14.13.3 Agreement to Recognize a Successor in Interest (Novation
Agreement).
[11](#agreement-to-recognize-a-successor-in-interest-novation-agreement.)

14.13.4 Processing Agreements. [12](#processing-agreements.)

14.13.5 Contractor\'s Change of Name. [13](#contractors-change-of-name.)

14.14 COPIES OF TECHNICAL REPORTS. [13](#copies-of-technical-reports.)

14.14.1 Clause Usage Prescriptions. [13](#clause-usage-prescriptions.-8)

14.15 USE OF PRIVATELY-OWNED US FLAG VESSELS.
[14](#__RefHeading___Toc20894713)

14.15.1 Clause usage prescriptions. [14](#clause-usage-prescriptions.-9)

14.15.2 Remedy for U.S. Flag Vessel Noncompliance.
[14](#__RefHeading___Toc20894715)

14.16 CONTRACTOR PERFORMANCE MEASURES
[14](#contractor-performance-measures)

[14.17]{.smallcaps} INDIRECT COST RATES. [15](#indirect-cost-rates.)

14.17.1 General Discussion. [15](#general-discussion.)

14.17.2 Cognizant Federal (Audit) Agency.
[15](#cognizant-federal-audit-agency.)

14.17.2.1 Cognizant Federal Agency \-- State and Local Governments.
[15](#cognizant-federal-agency----state-and-local-governments.)

14.17.2.2 Cognizant Federal Agency \-- Nonprofit Organizations.
[16](#cognizant-federal-agency----nonprofit-organizations.)

14.17.2.3 Cognizant Federal Agency - Educational Institutions.
[16](#cognizant-federal-agency---educational-institutions.)

14.17.3 Indirect Cost Rates. [16](#indirect-cost-rates.-1)

14.17.3.1 Provisional Rates. [17](#provisional-rates.)

14.17.3.2 Final Indirect Cost Rates. [17](#final-indirect-cost-rates.)

14.17.3.3 Predetermined Final Indirect Cost Rates.
[17](#predetermined-final-indirect-cost-rates.)

14.17.3.4 Fixed Indirect Cost Rates with Carry-Forward.
[18](#fixed-indirect-cost-rates-with-carry-forward.)

14.17.4 Limitations on Indirect Cost Rates.
[18](#limitations-on-indirect-cost-rates.)

14.17.5 Quick-Close-Out of Cost-Reimbursement Contracts.
[19](#quick-close-out-of-cost-reimbursement-contracts.)

14.50 TEXT OF CLAUSES. [19](#text-of-clauses.)

### 14.1 CONTRACT MANAGEMENT.

***POLICY:*** Contracts shall be managed to insure that BPA receives a
specific product or service in a timely manner. Situations occasionally
arise where the insistence upon strict compliance with contractual
requirements may not be in the best interests of BPA. In certain
circumstances, a relaxation of the contractual requirements, with or
without consideration from the contractor, may be in the best interest
of BPA. If such a situation arises, the CO shall document the
circumstances. If the CO intends to substantially alter the obligations
of the parties without consideration, the CO shall obtain the
concurrence of the HCA prior to execution.

### 14.2 BASIC RESPONSIBILITY FOR CONTRACT ADMINISTRATION.

\(a\) ***POLICY:*** COs are responsible for administering contracts
covered by the BPI. This is accomplished through a team effort with the
program office, working through CORs and COTRs.

\(b\) ***INFORMATION:*** General information concerning the technical
administration of contracts may be found in BPI Appendix 14-A,
Contracting Officer\'s Technical Representative\'s Guide for Contract
Administration.

### 14.3 ASSIGNMENT OF CONTRACT ADMINISTRATION.

#### 14.3.1 Designation of Contracting Officer\'s Representatives.

***POLICY:*** The CO shall advise the Contractor in writing at the time
of initial assignment and whenever a change is made in the CO, COR, or
COTR on a contract. COTRs shall notify the Contractors and the CO in
writing at the time of initial assignment and whenever a change is made
in the field inspector(s) on a contract.

#### 14.3.2 Clause Usage Prescriptions.

***PROCEDURE:***

\(a\) The CO may include a clause similar to 14-1, Contracting
Officer\'s Representatives - Construction Contracts, in construction
solicitations and contracts in lieu of clause 14-2, Contract
Administration Representatives, if desired.

\(b\) The CO shall include a clause similar to 14-2, Contract
Administration Representatives, in solicitations and contracts,
including IGCs, which require the involvement of representatives of the
CO.

### 14.4 BASIC CONTRACT ADMINISTRATION CLAUSES.

#### 14.4.1 Order of Precedence Clause.

***INFORMATION:*** It is generally helpful to include an Order Of
Precedence clause in contracts to assist the parties in case of
inconsistencies. As a general rule of contract law, specific terms take
precedence over general terms and \"custom\" terms take precedence over
pre-printed terms.

##### 14.4.1.1 Clause Usage Prescriptions.

***PROCEDURE:*** A clause similar to Clause 14-3, Order of Precedence,
shall be included in all solicitations and contracts over \$50,000
except those for commercial supplies and services. CO\'s should modify
the clause to meet the needs of a particular purchase. If the
contractor\'s proposal is incorporated into the contract, the clause
shall be modified to identify its place in the order of precedence.

#### 14.4.2 Other Rights at Law Clause.

***INFORMATION.*** In order to preserve BPA\'s rights under the common
law, a clause similar to those used by commercial organizations is
provided.

##### 14.4.2.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO shall include Clause 14-4, Other Rights at Law,
in solicitations and contracts under \$50,000, and in solicitations and
contracts of any dollar amount for commercial supplies, commercial
services, or commercial construction.

### 14.5 COMMUNICATIONS WITH SUPPLIERS.

***INFORMATION:*** COs are encouraged to establish close working
relationships with suppliers and representatives of the CO so that the
supplier and BPA personnel are working on the contract as a team. Post
award conferences, either in person or by telephone, are one means to
continue the teamwork begun during the negotiation phase. Continuing
communications are also essential to ensure that the teamwork continues
on the contract. Such communications have among their objectives (1) to
be sure persons working on the contract understand the objectives of the
contract, (2) that any potential problem areas or scheduling
difficulties are identified and addressed before they have an adverse
impact on either BPA or the contractor, and (3) that the persons
involved in the project are approaching it with a common goal. Such
communications should occur:

\(a\) At the beginning of the contract activity

\(b\) Whenever either party detects a problem

\(c\) Prior to and following significant milestones

\(d\) Routinely throughout the life of the contract effort, even though
no problems have been encountered.

#### 14.5.1 Relationships with Suppliers.

***POLICY:*** BPA supports the development of close working
relationships with its suppliers. Such relationships are less
adversarial, and produce a better value product. The objective of such
relationships is to jointly execute projects in a supportive and
cooperative manner. BPA shall

administer contracts with the objective of developing positive long-term
relationships (See subpart 7.2.1.) Such relationships are typically
referred to as partnering, strategic alliances, supplier management, and
other similar terms.

### 14.6 VARIATION IN QUANTITY.

\(a\) ***PROCEDURE:*** COs should consider using a variation in quantity
clause in circumstances where quantities of work required by the
contract are estimated, where manufacturing or packaging processes
common in the industry do not result in exact quantities being produced,
or similar circumstances. Typically, such clauses are used only in
fixed-price type contracts with unit-priced items.

\(b\) ***POLICY:*** Variation in quantity clauses shall not be used in
place of options to acquire additional quantities based on possible
future requirements. They are to be used to determine pricing for BPA\'s
known requirements that may vary from those stated in the contract
because of manufacturing processes or existing physical conditions. They
are not to be used to price new requirements.

#### 14.6.1 Supply Contracts.

***INFORMATION:*** Variation in quantity clauses provide that BPA may
accept a variation of quantity in the items called for if the variation
is caused by packaging or manufacturing processes typical in the
industry. Variations are permissible as either increases or decreases
from the stated quantity, and are typically stated as percentages. No
standard percentages are prescribed \-- they should be developed jointly
between the contractor and BPA during the negotiation process, taking
into consideration the commercial practices applied to the specific
product or service.

##### 14.6.1.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO may include a clause similar to 14-5, Variation
in Quantity - Supply Contracts, in solicitations and contracts where the
CO believes it would be useful.

#### 14.6.2 Service and Construction Contracts.

***INFORMATION:*** Some types of service contracts (e.g. brush cutting,
window cleaning) and construction contracts may provide for variation in
estimated quantities of unit price items. When the variation between the
estimated quantity and the actual quantity of an item exceeds the
established range, BPA and the contractor, at the request of either,
will negotiate for a revised unit price for the units of work actually
performed outside the established range.

##### 14.6.2.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO may include a clause similar to 14-6, Variation
in Estimated Quantity \-- Service and Construction Contracts, in
solicitations and contracts where the CO believes it would be useful.
The standard variation is 10% for services contracts and 25% for
construction contracts. However, the CO may change the standard
variation if desirable.

### 14.7 USE OF GOVERNMENT SUPPLY SOURCES BY SUPPLIERS.

***POLICY.*** CO\'s may authorize contractors to use Government supply
sources if supplies or services are required by a contract. Generally
this would be most useful in cost-reimbursement contracts, but it may
also be useful in other types of contracts. COs should weigh the
incremental cost of such authorization and use of the Government supply
system against the potential savings before providing the authorization.
Such supply sources include:

\(a\) General Services Administration

\(b\) Department of Defense

\(c\) Veterans Administration

\(d\) Federal Supply Schedules

(e) Interagency Fleet Management System

(f) US Bureau of Reclamation

\(g\) US Corps of Engineers

### 14.8 USE OF DOE EXCESS EQUIPMENT

***INFORMATION:*** BPA cost reimbursement contractors may make use of
excess BPA or other Federal Agency equipment if this would be a good
business decision. Upon written request by the contractor and approval
by the CO, the Property Management functional group in Shared Services
will make arrangements for such property.

### 14.9 BPA CONSENT TO SUBCONTRACT.

\(a\) ***INFORMATION:*** Consent to subcontract can be addressed at two
levels. The first level involves the approval of the action of
subcontracting itself. The second level involves the review and approval
of the qualifications of a specific subcontractor proposed to be used
for a specific activity.

\(b\) ***INFORMATION:*** Consent to subcontract is normally useful in
the following types of situations:

\(1\) The work to be subcontracted is complex.

\(2\) The dollar value of the subcontracted effort is substantial.

\(3\) BPA\'s interest is not protected by competition among
subcontractors.

\(4\) Environmentally sensitive issues are involved.

\(5\) Hazardous materials are involved.

\(6\) The initial contract award was based upon the proposed
subcontractor\'s capabilities.

This list is not an inclusive one. There may be other circumstances
which would make it prudent to impose the restriction to require BPA
approval before subcontracting a portion of the contract. The decision
to require subcontracting approval is at the discretion of the CO.

\(c\) ***POLICY:*** BPA approval of the use of specific subcontractors
is also optional at the discretion of the CO. A review of the
qualifications and approval of proposed subcontractors should be
required when BPA considers the contract effort to be sensitive and
desires stricter accountability.

#### 14.9.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO may include a clause similar to 14-7,
Subcontracts, in solicitations and contracts where it is determined that
consent to subcontract is required. Use the clause with its Alternate I
when the effort to be subcontracted involves the management or handling
of

hazardous or toxic wastes. When using Alternate I, add a subparagraph
(a) designator to the basic clause, and add paragraph (b) of the
alternate.

### 14.10 CONTRACT MODIFICATIONS AND CHANGES.

#### 14.10.1 Definitions.

***INFORMATION:***

\"Administrative change\" means a unilateral contract change that does
not substantially affect the rights of the parties (e.g., a change in
the paying office or accounting data).

\"Constructive change\" means an act or failure to act by the CO (or
representatives of the CO) which will be construed as if a change was
actually issued.

\"Contract modification\" means any written change in the terms of a
contract.

\"Change Order\" means a written order, signed by the CO directing the
contractor to make a change that the Changes clauses authorize the CO to
order without the contractor\'s concurrence.

#### 14.10.2 Policy.

\(a\) Only COs, or persons delegated specific authority to execute
contract modifications by a CO (see 2.3.3), may execute contract
modifications.

\(b\) Contract modifications should be priced before their execution, if
this can be done without adversely affecting the interests of BPA.

#### 14.10.3 Types of Contract Modifications.

***INFORMATION:*** Contract modifications fall into the following
categories:

\(a\) Bilateral. A bilateral modification is a contract modification
that is agreed to jointly by the CO and the contractor. The
contractor\'s oral or written agreement will be sufficient to indicate
contractor agreement. Bilateral modifications are used to \--

\(1\) Make negotiated equitable adjustments when necessary;

\(2\) Definitize quick-response contracts; or

\(3\) Reflect other agreements of the parties which modify the terms of
contracts; or

\(4\) Make changes requested by the contractor.

\(b\) Unilateral. A unilateral modification is a contract modification
that is made by the CO without advance concurrence by the contractor.
Unilateral modifications are used to\--

\(1\) Make administrative changes;

\(2\) Issue changes under the changes clause; or

\(3\) Make changes authorized by clauses other than a changes clause
(e.g., Property clause, Options clause, Differing Site Conditions
clause.)

#### 14.10.4 Extension of Contracts.

***POLICY:***

\(a\) Unilateral extensions. Contracts may be extended by issuing a
unilateral modification whenever such right is provided in the contract
and the appropriate factors concerning exercise of options (see 7.2.7
and 14.11) have been considered. The contract file should explain why
the CO ordered the extension.

\(b\) Bilateral extensions - unexpired contracts. Where the contract has
not expired and there is no option giving BPA the right to extend
contract performance, such extension may be negotiated with the
contractor. The contract file shall explain why the CO negotiated the
extension.

\(c\) Bilateral extensions - expired contracts. Where a contract has
expired by its terms but BPA has permitted performance to continue to
meet its needs, the contract may be extended by mutual agreement,
incorporating all the terms of the original contract. The effective date
of the modification shall be the expiration date of the original
contract. A new contract expiration date shall be established.

***PROCEDURE:***

With regard to paragraph (c) above, the reason for the delay in
extending the expired contract and the reason(s) that such action is in
BPA\'s best interests, shall be documented in the contract file. The
Contracting Officer and Contractor may mutually agree to extend a
contract that has been expired for no more than six months. Any
extension of a contract that expired more than three (3) months prior
must be requested in writing to and approved by the HCA.

#### 14.10.5 Changes.

##### 14.10.5.1 Changes Made with a Changes Clause.

\(a\) ***INFORMATION:*** BPA contracts may contain a \"Changes\" clause
that permits the CO to make unilateral changes within the general scope
of the contract. These changes are accomplished by issuing written
contract modifications (sometimes called change orders). The contractor
must continue performance of the contract as changed, except that in
cost-reimbursement or incrementally-funded contracts the contractor is
not obligated to continue performance or incur costs beyond the dollar
limit established in the contract. Pricing of equitable adjustments
should be based on the variance in the cost of performance of the
contract work following the change as compared to the contract cost
before the change.

\(b\) ***POLICY:*** Changes clauses are not generally used in
transactions for commercial items, unless such contracts include
ancillary complexities such as staged deliveries, multiple delivery
sites, etc.

\(c\) ***POLICY:*** Although unilateral changes are permitted under the
clause, it is generally preferable to execute a bilateral change in
order to obtain the agreement of both parties, and to avoid subsequent
disagreements. Bilateral changes should be used except when BPA and the
contractor cannot quickly agree on the terms of the change, including
price, and work must proceed. Only the CO or a person designated by the
CO may reach agreement on pricing adjustments. Whenever possible, BPA
prefers changes to be priced before work is initiated on the change.

\(d\) ***POLICY:*** Normally payments are not made for work performed
under undefinitized change orders. The CO may authorize provisional
payment if such payments are in BPA\'s interest.

\(e\) ***PROCEDURE:*** The CO should, whenever possible, confirm that
all elements of the change have been resolved by including a release in
the definitizing bilateral agreement similar to:

\"This modification constitutes the total equitable adjustment for the
changes described herein.\"

\(f\) ***PROCEDURE:*** The reasons for entering into both unilateral and
bilateral modifications, including price or cost as appropriate, shall
be documented in the contact file for changes within the scope of the
contract. See Subpart 4.2.1 for a general discussion of documentation
standards.

\(g\) ***PROCEDURE:*** Changes outside the scope of the contract shall
be documented as if the transaction was a new award. See 12.8.2,
Document of Award Decision.

\(h\) ***PROCEDURE:*** COs should use a Changes clause when it is
necessary to reserve the right for BPA to unilaterally order the types
of changes described in paragraph (a) of the Changes clauses. Changes
clauses are not normally used in contracts for commercial - type
supplies or services unless such contracts include ancillary
complexities such as staged deliveries, multiple delivery sites, etc.

###### 14.10.5.1.1 Clause Usage Prescriptions.

***PROCEDURE:***

\(a\) The CO may include a clause similar to 14-8, Changes -
Fixed-Price, in solicitations and fixed-price contracts when the CO may
want to direct the contractor to make specific changes in the work
during the contract. The CO may modify paragraph (a) to reflect the
specific portions of the contract to be subject to the clause.

\(b\) The CO may include a clause similar to 14-9, Changes -
Cost-Reimbursement, in solicitations and cost-reimbursement contracts
when the CO may want to direct the contractor to make specific changes
in the work during the contract. The CO may wish to modify paragraph (a)
to reflect the specific portions of the contract to be subject to the
clause.

\(c\) The CO may include a clause similar to 14-10, Changes - Time and
Materials, in solicitations and time and materials contracts when the CO
may want to direct the contractor to make specific changes in the work
during the contract. The CO may wish to modify paragraph (a) to reflect
the specific portions of the contract to be subject to the clause.

\(d\) The CO may include a clause similar to 14-11, Changes and Changed
Conditions - Construction Contracts, in solicitations and contracts for
construction as appropriate. However, this clause will generally not be
used in commercial construction contracts.

\(e\) The CO shall include clause 14-12, Pricing of Adjustments, in
solicitations and contracts exceeding \$50,000 except those for
commercial supplies and services, including construction.

\(f\) The CO may include clause 14-13, Modification Cost Proposal -
Price Breakdown, in solicitations and contracts when appropriate.

##### 14.10.5.2 Changes Made without a Changes Clause.

***PROCEDURE:*** Contract changes may be negotiated with the contractor
when the contract does not contain a changes clause. Pricing of such
changes shall be based on, but not necessarily limited to, costs of the
changed work, including appropriate overhead charges and profits; the
impact on changed and unchanged work, etc.

#### 14.10.6 Forms.

***PROCEDURE:*** The Business Enterprise System electronically generated
contract amendment form, or BPA F 4220.06 Modification of Contract,
shall be used for contract modifications.

### 14.11 EXERCISING OPTIONS.

\(a\) ***POLICY:*** An option provides a unilateral right in the
contract by which, for a specified time, the CO may elect to exercise
the terms of the option. The decision to exercise options shall be based
on the best buy for BPA.

\(b\) ***PROCEDURE:***

> \(1\) Options are discussed in Subpart 7.2.7.
>
> \(2\) COs shall consider the following before deciding whether or not
> to exercise an option:

\(A\) Will exercising this option, considering an analysis of prices, an
examination of the market, evaluation of the contractor performance, and
administrative expensive of re-competing the requirement obtain the best
buy for BPA?

\(B\) Are funds available?

\(C\) Does the requirement covered by the option fulfill an existing
need?

\(D\) How critical is BPA\'s need for continuity of operations and what
are the potential costs of disrupting operations?

\(3\) Upon exercise of an option, the CO will document the file.

### 14.12 SUSPENSION AND STOP WORK ORDERS.

\(a\) ***INFORMATION:*** Definitions:

\"Suspension of work\" means a temporary cessation of activity by the
contractor under a specific contract.

\"Stop work order\" means a written notice to the contractor to suspend
work.

\(b\) ***INFORMATION:*** Situations may arise during the conduct of a
contract that might cause the CO to order a suspension of work, such as:

\(1\) Delays caused by waiting for a decision from BPA;

\(2\) Weather-related reasons;

\(3\) Technological advancement;

\(4\) Production or engineering breakthroughs;

\(5\) Realignment of BPA programs or objectives;

\(6\) Public safety concerns, including identified unsafe work practices
and safety hazards;

\(7\) Emergency situations or other urgent conditions;

\(8\) Differing site conditions; and

\(9\) Violation of substantive contract terms, including BPA\'s safety,
smoking, harassment-free

workplace, or other policies.

\(c\) ***PROCEDURE:*** Except for safety related issues, generally, only
the CO is authorized to suspend work. Most often the decision to suspend
work will be made jointly by the CO and the program office, citing
Clause 14-14, Stop Work Order, as the basis for suspension of work.
However, in cases of public safety concerns (including identified unsafe
work practices and safety hazards), emergency situations, or other
urgent conditions, either the CO or COTR or field inspector shall
promptly notify the Contractor of noncompliance with safety requirements
of the contract. The Contractor is required to take immediate corrective
action as per the contract Safety and Health clause (see Clause 15-2,
Safety and Health, or Clause 15-4, Safety, Health and Property
Protection -- Services). If the Contractor fails or refuses to promptly
correct the public safety, emergency or urgent condition, the CO, COTR
or field inspector may suspend all or any portion of work affected by
the noncompliance, pending discussion with the program and Safety
office. Suspensions of work may be ordered orally, but should be
followed up with a written stop work order. The stop work order should
include information related to the following, as appropriate:

\(1\) A description of the work to be suspended, including whenever
applicable, identified unsafe work practices or work hazards;

\(2\) Instructions concerning the contractor\'s issuance of further
orders for materials or services;

\(3\) Guidance to the contractor on action to be taken on any affected
subcontracts; and

\(4\) Other suggestions for minimizing the contractor\'s costs.

\(d\) ***PROCEDURE:*** As soon as feasible after the stop work order is
issued, the CO should work with the program office, and the Safety
Office whenever public safety (including work and safety hazards) are
involved, to resolve the outstanding issues, and make a decision to
terminate the contract, cancel the stop-work order, or continue the stop
work order while the issues are being resolved.

#### 14.12.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO may include a clause similar to 14-14, Stop Work
Order, in solicitations and contracts when it is desirable to retain the
right to suspend the work during contract performance.

### 14.13 NOVATION AND CHANGE-OF-NAME AGREEMENTS.

#### 14.13.1 Definitions.

***INFORMATION:***

\"Change-of-name agreement\" means a legal instrument executed by the
contractor and BPA recognizing a legal change of the contractor\'s name
without disturbing the original contractual rights and obligations of
the parties.

\"Novation agreement\" means a legal instrument executed by (a) the
contractor (transferor), (b) the successor in interest (transferee), and
(c) BPA, by which, among other things, the transferor guarantees
performance of the contract; the transferee assumes all obligations
under the contract; and BPA recognizes the transfer of the contract and
related assets.

#### 14.13.2 Responsibility for Executing Agreements.

***POLICY:*** The CO shall be responsible for processing and executing
novation and change of name agreements.

#### 14.13.3 Agreement to Recognize a Successor in Interest (Novation Agreement).

\(a\) ***INFORMATION:*** BPA may, if in its interest, recognize a third
party as the successor in interest to a BPA contract. Such transfers
usually result when another company purchases the original contracting
firm. The CO may also consider such actions when the original contractor
is unable to perform and another viable contractor stands willing to
assume the rights and duties under the contract.

\(b\) ***INFORMATION:*** When it is in BPA\'s interest not to concur in
the transfer of a contract from one company to another company, the
original contractor remains under contractual obligation to BPA, and the
contract may be terminated for default should the original contractor
not perform.

\(c\) ***PROCEDURE:*** When a contractor asks BPA to recognize a
successor in interest, the CO shall obtain from the contractor two
signed copies of the proposed novation agreement signed by the original
contractor and the successor in interest.

\(d\) ***PROCEDURE:*** When recognizing a successor in interest to a BPA
contract is consistent with BPA\'s interest, the responsible CO shall
execute a novation agreement with the transferor and the transferee. It
shall ordinarily provide that \--

\(1\) The transferee assumes all the transferor\'s obligations under the
contract;

\(2\) The transferor waives all rights under the contract against BPA;

\(3\) The transferor guarantees performance of the contract by the
transferee (a satisfactory performance bond may be accepted instead of
the guarantee); and

\(4\) Nothing in the agreement shall relieve the transferor or
transferee from compliance with any Federal law.

\(e\) ***PROCEDURE:*** The CO generally should use the following format
for agreements when the transferor and transferee are corporations and
all of the transferor\'s assets are transferred. This format may be
adapted to fit specific cases, and may be used as a guide in preparing
similar agreements for other situations.

\(f\) ***PROCEDURE*:** The CO shall coordinate with the BES Vendor
Maintenance Team to ensure that the contractor's BES vendor record
information is updated, including new TAX ID if changed. Use form BPA
4220.01e, Request New or Change Vendor Profile to collect the new
information. The CO may complete this form, or send it to the Contractor
for completion and submittal to the BES Vendor Maintenance Team.

NOVATION AGREEMENT

The purpose of the agreement is to recognize
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(transferee) as the successor in
interest to \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(transferor) under
BPA Contract No(s). \_\_\_\_\_\_\_\_\_.

\(1\) The Transferor hereby transfers all rights and obligations under
the contract(s) to the Transferee as of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(date). By making such transfer, the
Transferor waives any claims or rights it may have under the
contract(s). The transferor guarantees performance of the contract by
the transferee.

\(2\) The Transferee agrees to assume all rights and obligations
transferred in paragraph (1), and understands that, as of the date
specified, it stands in the same legal position as if it had been the
original contractor.

\(3\) BPA recognizes the Transferee as the Transferor\'s successor in
interest under the subject contract(s). Pursuant to this agreement, the
Transferee becomes entitled to all rights and interests under the
contract(s) as if the Transferee were the original contractor.

\(4\) Except as provided in this agreement, nothing in it shall be
construed as (a) a waiver of any rights BPA may have against the
Transferor, or (b) relieving the transferor or transferee from
compliance with any Federal law.

The parties hereby execute this agreement as of the date specified in
paragraph (1)

BONNEVILLE POWER ADMINISTRATION

By\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...

Title\...\...\...\...\...\...\...\...\...\...\...\...\...\...

(NAME OF TRANSFEROR)

By\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....

Title\...\...\...\...\...\...\...\...\...\...\...\...\...\.....

(NAME OF TRANSFEREE)

By\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...

Title\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...

(End of Agreement)

#### 14.13.4 Processing Agreements.

***PROCEDURE:***

\(a\) The contractor shall submit a written request to the CO to
recognize a successor in interest to one or more contracts.

\(b\) The CO shall confer with program offices and Disbursement
Operations to obtain a list of affected contracts, and request prompt
submission of any comments, which shall include technical
considerations, if appropriate.

\(c\) The CO shall determine whether or not it is in BPA\'s interest to
recognize the proposed successor in interest on the basis of the
comments received from the affected parties, and whether or not the
proposed successor is a viable supplier.

\(d\) The CO shall (1) forward a signed copy of the executed novation to
the transferor and to the transferee and (2) retain a signed copy in the
case file.

\(e\) The CO shall prepare the Business Enterprise System electronically
generated contract amendment form, or form BPA F 4220.06 Modification of
Contract, for each affected contract, incorporating a copy of the
agreement. The modification shall be distributed in the usual manner.

\(f\) The CO shall ensure that the BES Vendor Maintenance Team receives
the information to update the Vendor Record. See BPI 14.3.3 (f)

#### 14.13.5 Contractor\'s Change of Name.

***PROCEDURE:***

\(a\) If only a change of the contractor\'s name is involved and BPA\'s
and contractor\'s rights and obligations remain unaffected, the parties
shall execute an agreement to reflect the name change. The contractor
shall submit a written request to the CO to change the name.

b\) The CO shall prepare a contract modification in the new name of the
firm, and reference in the body of the modification the former name and
date of the supplier\'s request. The modification should be similar to:
\"This modification changes the name of the contractor from
\_\_\_\_\_\_\_\_\_\_(CO enter the old firm name) to that shown above.
This change is made at the request of the contractor dated
\_\_\_\_\_\_\_\_\_\_\_(CO insert date of request.)\"

### 14.14 COPIES OF TECHNICAL REPORTS.

***PROCEDURE:***

\(a\) Scientific and technical information delivered to BPA and
developed during work supported by BPA shall be reported promptly and
fully to the Department\'s Office of Scientific and Technical
Information (Reference DOE Order 241.1, 8-17-98.) This includes
narrative-type reports, as well as drawings, diagrams, computer
software, machine-readable databases, conference papers, conference
proceedings, environmental impact statements, and other key materials in
any medium used to document or transfer information developed during the
work. Exempted from this requirement is the submission of scientific and
technical computer software related to power and transmission system
operations, and technical information when Electric Power Research
Institute (EPRI) is a participant.

\(b\) This requires that the contractor prepare and submit to the COTR
scientific and technical information developed as a result of a contract
with BPA. If the information is prepared in paper format only, the
contractor must submit four (4) copies. If prepared in both paper and
electronic format, the contractor must submit two (2) paper copies of
the report plus the electronic version and the URL address. The
contractor must also provide a 50 to 300-word abstract (summary) of the
report. Acceptable electronic document interchange formats include HTML,
Postscript, and PDF. The contractor shall coordinate with the COTR for
preparation and transmittal of the electronic copy of the required
deliverables.

\(c\) The COTR shall forward either (1) two (2) paper copies, or (2) a
web-based electronic version (including the URL), of the final report to
the BPA Library - CILL. The BPA Library will transmit the electronic
information to the Office of Scientific and Technical Information.

#### 14.14.1 Clause Usage Prescriptions.

***PROCEDURE:*** The CO shall include clause 14-15, Scientific and
Technical Information Reporting Requirements, in solicitations and
contracts that require scientific information to be delivered to BPA.
Exempted from this requirement are the submissions of scientific and
technical computer software related to power and transmission system
operations, and technical information when Electric Power Research
Institute (EPRI) is a participant.

### 14.15 USE OF PRIVATELY-OWNED US FLAG VESSELS.

\(a\) ***INFORMATION:*** BPA has experienced excessive damage from the
cross-country rail shipment of sensitive materials acquired from foreign
vendors. BPA has determined that it is in its interest to require
shipment of sensitive foreign materials by ocean vessel to the port
nearest the site where the material will be used

(b) ***PROCEDURE:*** COs shall not require the use of U.S. Vessels for
    shipment of sensitive materials unless a U.S.-Flag Vessel serves a
    port in the BPA service area allowing minimal handling in rail
    shipment. In order to achieve the requirement that BPA obtain U.S.
    Flag Vessel shipping for 50 percent of the gross tonnage of
    foreign-produced materials, a provision requiring l00 percent of the
    gross tonnage for a contract will be used in those instances where
    it is not anticipated that damage will be caused by rail shipment
    and where contracts involve foreign manufacturing of materials or
    equipment. Subcontracts for purchase of commercial items or
    components are exempt from the use of U.S. Flag Vessels.

#### 14.15.1 Clause usage prescriptions.

***PROCEDURE:*** The CO shall include the clause at 14-16, Requirement
for U.S. Flag Vessels, in solicitations and contracts that exceed
\$100,000 and which will involve ocean transportation of materials or
equipment not easily damaged during cross country rail shipments, except
subcontracts for purchase of commercial items or components.

#### 14.15.2 Remedy for U.S. Flag Vessel Noncompliance.

***PROCEDURE:*** If, after award of the contract, the contractor is
unable to obtain a U.S. Flag Vessel, it may request BPA to waive the
requirements of the clause at 14-16, Requirement for U.S. Flag Vessels.
Such request will be supported by documentation showing that no U.S.
Flag Vessel was available, and that a timely attempt was made to obtain
one. If the CO waives the applicable clause, the difference in cost
between the U.S. Flag and Foreign Flag Vessel shipping costs will be
added to or deducted from the contract by modification as appropriate.

### 14.16 CONTRACTOR PERFORMANCE MEASURES

\(a\) ***POLICY:*** All aspects of a contractor\'s performance,
including safety record, may be key considerations when making source
selection decisions for future awards (See BPI 11.8.) COs are encouraged
to provide regular feedback to contractors to help contractors
continually improve their performance. However, COs are under no
obligation to do so. It is the responsibility of the contractor to
develop and maintain a solid reputation of performance. See 21.3.2 for
information on handling disagreements on contractor performance
evaluations.

\(b\) ***INFORMATION:*** Formal and informal systems which track
contractors long term performance are useful to continually improve the
quality of supplies and services purchased by BPA. There are many such
systems available. Informal systems may be no more complex than regular
communications with the BPA regarding a particular contractor's
performance for specific transactions. Formal systems may also include
supplier rating systems and preference programs such as supplier
certifications, preferred suppliers, etc. Factors considered in these
various systems vary, but always include past experience with the
contractor.

\(c\) ***PROCEDURE:*** Operational contracting offices may develop
procedures to implement contractor performance measurement systems. Such
systems shall be as administratively simple as possible. The complexity
and cost of developing and managing such systems should be commensurate
with the probable benefits. In general, such systems should be designed
to emphasize the measurement of performance for those supplies or
services which are repeatedly bought by BPA and are most critical to
meet BPA\'s mission. When possible, such systems should be designed to
encourage superior performance as well as identify substandard
performance.

### [14.17]{.smallcaps} INDIRECT COST RATES.

#### 14.17.1 General Discussion.

***INFORMATION:***

\(a\) \"Indirect costs\" are those costs which are not readily
identified as direct costs and which benefit more than one cost
objective. Costs may be allocated (1) on the basis of benefit - e.g.,
the cost benefits both the contract and other work and can be
distributed to them in reasonable proportion to the benefits received;
or (2) on the basis of necessity to the overall operation of the
contractor\'s business - e.g., supervision, management, facilities cost,
insurance, utilities, etc.

\(b\) \"Indirect cost rate\" means the percentage or dollar factor that
expresses the ratio of indirect expense incurred in a given period to
direct labor cost, manufacturing cost, or other appropriate base for the
same period.

\(c\) \"Indirect cost rate caps\" are ceilings which can be negotiated
by the CO which act as a limit (or ceiling) on the allowable rates
applied to each contract. If a Cognizant Federal Agency (CFA) has
established indirect rates, caps may be set at lower than the rate
determined by the CFA, but generally should not be set higher than the
rate determined by the CFA. Indirect cost rate caps are typically not
used when predetermined final indirect cost rates have been established
by the CFA for educational institutions.

\(d\) The determination and application of indirect cost rates to
contracts is a complicated subject, and cannot be covered thoroughly in
the BPI. This subpart briefly introduces the subject. Further detailed
information concerning application to a specific contract may be
obtained from experienced purchasing personnel, or the BPA Internal
Audit staff.

#### 14.17.2 Cognizant Federal (Audit) Agency.

\(a\) ***INFORMATION:*** \"Cognizant Federal Agency\" (CFA) means the
agency having the major financial interest in the organization. In some
cases, the CFA may be BPA. The CFA is responsible for establishing
indirect cost rates for the organization on behalf of all Federal
agencies. The CO should contact the CFA to determine the existence of
audits addressing proposed indirect costs. Requests for audit support
should request the minimum information necessary to determine the best
buy. A listing of CFA offices is contained in the Directory of Federal
Contract Audit Offices, available form DCAA. Questions regarding audit
offices may be referred to the Defense Contract Audit Agency, Attn: CMO
Publications Officer, 8725 John J. Kingman Road, Suite 2135, Fort
Belvoir, Virginia 22060-6219.

\(b\) ***POLICY:*** In general, COs shall accept and use the indirect
cost rates established by the CFA subject to any specific limitation or
cap negotiated for the contract (see 14.17.4). The CO shall not request
a preaward audit of indirect cost rates unless the information available
from an existing audit completed within the preceding 12 months is
considered inadequate for determining the reasonableness of proposed
indirect costs.

\(c\) ***POLICY:*** When BPA is the CFA, BPA\'s Manager of Internal
Audit Services is hereby delegated authority as the cognizant CO for
establishing, negotiating and approving such indirect cost rates on
behalf of BPA.

##### 14.17.2.1 Cognizant Federal Agency \-- State and Local Governments.

***INFORMATION:*** OMB Circular A-87 concerning cost principles for
state and local governments (including Indian Tribes) establishes the
cognizant agency concept and procedures for determining a cognizant
agency for approving state and local government indirect costs
associated with federally-funded programs and activities. The indirect
cost rates negotiated by the cognizant agency will be used by all
Federal agencies that also award contracts to these same state and local
governments.

##### 14.17.2.2 Cognizant Federal Agency \-- Nonprofit Organizations.

***INFORMATION:*** OMB Circular A-122 concerning cost principles for
nonprofit organizations establishes the cognizant agency concept and
procedures for determining a cognizant agency for approving nonprofit
organization indirect costs associated with federally-funded programs
and activities. The indirect cost rates negotiated by the cognizant
agency will be used by all Federal agencies that also award contracts to
these same nonprofit organizations.

##### 14.17.2.3 Cognizant Federal Agency - Educational Institutions.

***INFORMATION:***

\(a\) OMB Circular No. A-21, "Cost Principles for Educational
Institutions," assigns either Department of Health and Human Services
(HHS) or the Department of Defense's Office of Naval Research (DOD) as
the CFA for each educational institution, responsible for the
negotiation of indirect cost billing rates and, where appropriate,
predetermined final indirect cost rates for use by all Federal agencies.

\(b\) Most CFA\'s establish predetermined final indirect cost rates for
the payment of reimbursable indirect costs under cost reimbursement
research and development contracts with universities, colleges, or other
educational institutions. If they have been established, their use must
be extended to all the institution\'s Government contracts.

\(c\) ***POLICY:*** Post-determined final indirect cost rates shall be
used in the settlement of indirect costs for all cost-reimbursement
contracts with educational institutions, unless predetermined final
indirect cost rates are authorized and used. COs shall use provisional
(billing) rates established by the CFA to reimburse the contractor for
work performed during a period not covered by predetermined rates.

#### 14.17.3 Indirect Cost Rates.

\(a\) ***POLICY**:* COs shall use the final indirect cost rates of a
commercial organization for a given period, which shall be binding on
all the cost-reimbursement contracts of the organization for the period,
subject to any specific limitation in a contract or advance agreement;
unless the quick closeout procedure in 14.17.5 is used.

\(b\) ***INFORMATION:*** Various types of indirect cost rates are
discussed below. The choice of which type of rate to use in a specific
transaction is subject to negotiation between the contractor and the CO.
The types of rates typically used at BPA are:

\(1\) Provisional (or billing) Indirect Cost Rates (see 14.17.3.1);

\(2\) Final Indirect Cost Rates (see 14.17.3.2);

\(3\) Predetermined Final Indirect Cost Rates (see 14.17.3.3); and

\(4\) Fixed Indirect Cost Rates with Carry forward (See 14.17.3.4).

##### 14.17.3.1 Provisional Rates.

\(a\) ***INFORMATION:*** \"Provisional rates\" (often referred to as
\"billing rates\") are indirect cost rates established temporarily for
interim reimbursement of incurred indirect costs and adjusted, as
necessary, until establishment of final indirect cost rates. They are
rates established in anticipation of performance, and are subject to
annual review or final audit at the end of contract performance.
Provisional rates are negotiated, and may be based on the rate
established by the CFA, or negotiated between the CO and the contractor.
Negotiating a lower provisional rate may reduce interim billings for
indirect costs. In contracts without indirect cost rate caps, BPA will
pay the final audited rate for the entire period of performance,
regardless of the provisional rate established at the beginning of, or
during, the contract, and paid throughout the contract performance
period. This could result in a refund to BPA if the audited rate is
lower than the provisional rate, or require BPA to make an additional
payment to the contractor if the final audited rate is higher than the
provisional rate. Any amounts due to higher final rates are still
subject to the contract price ceiling and the contract ceiling clause.

\(b\) ***PROCEDURE:*** The CO shall establish a provisional rate on the
basis of recent review, previous audits or experience, or similar
reliable data or experience of other contracting activities. In
establishing the provisional rate, the CO should ensure that it is as
close as possible to the final indirect cost rate anticipated for the
contractor\'s fiscal period, as adjusted for any unallowable costs. When
the CO determines that the value of contracts requiring use of a
provisional rate does not warrant submission of a detailed provisional
rate proposal, the provisional rate may be established by making
appropriate adjustments from the prior year\'s indirect cost experience
to eliminate unallowable and non-recurring costs and to reflect new or
changing conditions. In establishing the provisional rate, the CO may
request advisory audit services from BPA Internal Audit or other audit
organizations when deemed necessary.

\(c\) ***PROCEDURE:*** Once established, provisional rates may be
prospectively or retroactively revised by mutual agreement of the CO and
the contractor, at either party\'s request, to prevent substantial
overpayment or underpayment.

##### 14.17.3.2 Final Indirect Cost Rates.

\(a\) ***INFORMATION:*** \"Final indirect cost rates\" are established
based on audits which determine the actual costs for the covered period
and agreed upon by the CO and the contractor as final.

\(b\) ***PROCEDURE:*** When BPA is the CFA, the CO shall assure that the
contractor submits a final annual indirect cost rate proposal together
with supporting cost or pricing data in accordance with the clause at
22-5, Basis of Payment - Cost Reimbursement. The proposal shall be
submitted within 90 days after expiration of the contractor\'s fiscal
year and shall reflect actual cost experience for that period.

##### 14.17.3.3 Predetermined Final Indirect Cost Rates.

***INFORMATION:***

\(a\) \"Predetermined final indirect cost rates\" are typically
established by the CFA only for educational institutions with cost
reimbursement research and development contracts based on an estimate of
the costs to be incurred during the covered period. They are established
at the beginning of the contract, and are not subject to audit at the
end of the contract. (See clause 22-6.) They may be modified during the
contract period if negotiated between the parties. COs may accept a
lower predetermined rate than was established by the CFA if it is
offered by the institution. However, the CO shall not attempt to
negotiate such a lower rate (see 14.17.2.3).

\(b\) Predetermined final indirect cost rates may be negotiated by BPA
COs for other than cost reimbursement research and development contracts
with educational institutions when the contractor has not been assigned
to a CFA for negotiation of indirect cost rates. Situations where a CO
may want to consider negotiation of predetermined final indirect cost
rates are:

\(1\) Where the contractor is a newly formed entity with no previous
cost experience;

\(2\) Where BPA has had a long term relationship with the contractor and
the contractor has had a history of relatively stable indirect cost
rates; or

\(3\) Where the indirect cost rate could be frequently manipulated by
small business owners.

##### 14.17.3.4 Fixed Indirect Cost Rates with Carry-Forward.

***INFORMATION:***

\(a\) Fixed indirect cost rates with carry-forward are typically
established by the CFA for state and local governments, including Indian
tribes. They are a blend of both provisional (billing) rates and
predetermined final indirect cost rates. Like the predetermined final
rate, a rate is established based on the estimate of a future period\'s
cost and is not subject to revision. However, differences between the
estimated costs and actual costs, when they become known, are carried
forward and are considered in the negotiation of rates for subsequent
periods. As an example, if an agency\'s costs are more then estimated,
the amount of the increase is added to the estimate for the next period
to determine the fixed rate for the next period. Conversely, if an
agency\'s costs are less than estimated, the difference between the
fixed rate and the actual cost is subtracted from the estimate of the
next period to determine the fixed rate for the next period. (See Clause
22-19.)

\(b\) The fixed rate with carry forward is not used where:

\(1\) There is only short term or widely fluctuating Federal funding;

\(2\) There is likelihood of organizational change; or

\(3\) There is a fluctuating level of operation which would make the
projection of costs unrealistic.

#### 14.17.4 Limitations on Indirect Cost Rates.

***INFORMATION:***

(a)(1) Some situations may make it prudent to provide a final indirect
cost rate ceiling or cap in a contract. Examples of such circumstances
are when the proposed contractor;

\(A\) Is a new or recently reorganized company, and there may be no past
or recent record of incurred indirect costs;

\(B\) May have a recent record of a rapidly increasing indirect cost
rate due to a declining volume of sales without a commensurate decline
in indirect expenses;

\(C\) May be seeking to enhance its competitive position in a particular
circumstance by basing its proposal on indirect costs rates lower than
those that may reasonably be expected to occur during contract
performance, thereby causing a cost overrun; or

\(D\) Will participate (share) in the costs of the contract by accepting
indirect cost rates lower than the anticipated actual rates. In such
cases, a negotiated indirect cost rate ceiling may be incorporated into
the cost-sharing contracts for prospective application.

\(2\) In such cases, indirect cost rate caps covering the final indirect
cost rates may be negotiated and specified in the contract. This ceiling
(cap) may be negotiated as an individual rate for each indirect cost
category (i.e., labor overhead, materials overhead, general and
administrative expense, etc.) or may be negotiated as a composite of all
indirect expenses (e.g., \"all indirect expenses added together shall
not exceed 134.5% of allowable direct costs\"). In either case care
should be taken to ensure the cap conforms to the contractor\'s indirect
rate accounting practices.

\(b\) When ceiling (cap) provisions are utilized, the contract shall
also provide that

\(1\) BPA will not be obligated to pay any additional amount should the
final indirect cost rates exceed the negotiated ceiling (cap) rates
unless required by law or regulation, and

\(2\) In the event the final indirect costs rates are less than the
negotiated ceiling (cap) rates, BPA shall make payment based on the
actual final indirect cost rate.

#### 14.17.5 Quick-Close-Out of Cost-Reimbursement Contracts.

***PROCEDURE:***

\(a\) COs may negotiate settlement of indirect costs for a specific
cost-reimbursement contract in advance of the determination of final
indirect cost rates if\--

\(1\) The contract is physically complete;

\(2\) The amount of unsettled indirect costs to be allocated to the
contract is relatively insignificant; and

\(3\) Agreement can be reached on a reasonable estimate of allocable
dollars.

\(b\) Use of the quick-close-out procedure provided for by Clause 22-5,
Basis of Payment - Cost Reimbursement, shall be subject to agreement
that the determination of indirect costs is final for the contract it
covers and that no adjustment shall be made to other contracts for over-
or under-recoveries of costs allocable to the contract covered by the
agreement.

\(c\) Indirect cost rates used in the quick close-out of a contract
shall not be considered a binding precedent when establishing the final
indirect cost rates for other contracts.

### 14.50 TEXT OF CLAUSES.

The following clauses are referred to in BPI Part 14:

14-1 Contracting Officer\'s Representatives - Construction Contracts

14-2 Contract Administration Representatives

14-3 Order of Precedence

14-4 Other Rights at Law

14-5 Variation in Quantity- Supply Contracts

14-6 Variation in Estimated Quantity \-- Service and Construction
Contracts

14-7 Subcontracts

14-8 Changes - Fixed-Price

14-9 Changes - Cost-Reimbursement

14-10 Changes - Time and Materials

14-11 Changes And Changed Conditions - Construction Contracts

14-12 Pricing of Adjustments

14-13 Modification Cost Proposal- Price Breakdown

14-14 Stop Work Order

14-15 Scientific and Technical Information Reporting Requirements

14-16 Requirement for U. S. Flag Vessels

######### Clause 14-1 CONTRACTING OFFICER\'S REPRESENTATIVES - CONSTRUCTION CONTRACTS Sep 98) (BPI 14.3.2)

\(a\) The Field Inspector is an authorized representative of the
Contracting Officer's Technical Representative (COTR) for technical
oversight of contract performance. This includes the functions of
inspection and review of work performed.

\(b\) The Contracting Officer's Technical Representative (COTR) is
responsible for all technical oversight of the contract. The functions
of the COTR include interpretation of specifications and drawings, and
processing of payments.

\(c\) The Contracting Officer\'s Representative (COR) is the authorized
representative of the Contracting Officer for administrative matters,
including payment, updated delivery schedules, and changes.

\(d\) These representatives are authorized to act for the Contracting
Officer in all matters pertaining to the contract, except: (1) contract
modifications that change the contract price, technical requirements or
time for performance, unless delegated field modification authority (see
clause 24-25); (2) suspension or termination of the Contractor\'s right
to proceed, either for default or for convenience of BPA; and (3) final
decisions on any matters subject to appeal, as provided in the disputes
clause. In addition, the COTR may not make final acceptance under the
contract.

(End of clause)

######### Clause 14-2 CONTRACT ADMINISTRATION REPRESENTATIVES (Sep 98)(BPI 14.3.2)

\(a\) In the administration of this contract, the Contracting Officer
may be represented by one or more of the following: Contracting
Officer\'s Representative for administrative matters, and Contracting
Officer\'s Technical Representative, Receiving Inspector, and/or Field
Inspector for technical matters.

\(b\) These representatives are authorized to act on behalf of the
Contracting Officer in all matters pertaining to the contract, except:
(1) contract modifications that change the contract price, technical
requirements or time for performance, unless delegated field
modification authority (see clause 24-25); (2) suspension or termination
of the Contractor\'s right to proceed, either for default or for
convenience of BPA; and (3) final decisions on any matters subject to
appeal, as provided in a disputes clause. In addition, Field Inspectors
may not make final acceptance under the contract.

(End of clause)

######### Clause 14-3 ORDER OF PRECEDENCE (Sep 98)(14.4.1.1)

Any inconsistency in this solicitation or contract shall be resolved by
giving precedence in the following order: (a) the Schedule (excluding
the specifications or statement of work); (b) contract clauses; (c) the
specifications or statement of work; and (d) other documents, exhibits,
and attachments.

(End of Clause)

######### Clause 14-4 OTHER RIGHTS AT LAW (Sep 98)(BPI 14.4.2.1)

Unless superseded specifically by this contract, BPA reserves any other
rights it may have at law.

(End of Clause)

######### Clause 14-5 VARIATION IN QUANTITY - SUPPLY CONTRACTS (Aug02) (BPI 14.6.1.1)

\(a\) A variation in the quantity of any contract item will not be
accepted unless the variation has been caused by conditions of packing
or allowances in manufacturing processes, and then no more than
\_\_\_\_\_\_% more or less than the specified quantity. This percentage
variation applies to each item separately, without regard to designated
delivery location.

(End of clause)

######### Clause 14-6 VARIATION IN ESTIMATED QUANTITY- SERVICE AND CONSTRUCTION CONTRACTS. (Sep 98)(BPI 14.6.2.1)

If the quantity of a unit-priced item in this contract is an estimated
quantity and the actual quantity of the item varies more than \_\_\_\_\_
(usually 10% for service contracts and 25% for construction contracts)
from the estimated quantity, an equitable adjustment in the unit price
of units performed outside of the established range shall be made at the
request of either party, if the variation in quantity alters the cost of
the performance of the work.

(End of Clause)

######### Clause 14-7 SUBCONTRACTS. (Sep 98) (BPI 14.9.1)

The Contractor shall not subcontract any work without prior approval of
the Contracting Officer, except work specifically agreed upon at the
time of award. BPA reserves the right to approve specific subcontractors
for work considered to be particularly sensitive. Consent to subcontract
any portion of the contract shall not relieve the contractor of any
responsibility under the contract.

(End of Clause)

######### Alternate I (Sep 98)

(b)(1) If the subcontract is for the management or handling of hazardous
or toxic wastes, before work may begin, BPA must receive:

\(A\) a copy of EPA Notification of Hazardous Waste Activity (EPA form
8700-12) or equivalent) and

\(B\) acknowledgment of the notification filing (EPA form 8700-12A or
equivalent).

\(2\) If the subcontract involves management of PCBs, before work may
begin, BPA must receive:

\(A\) a copy of EPA Notification of PCB Activity (EPA form 7710-53 or
equivalent), and

\(B\) acknowledgment of the filing (a letter from EPA). The
acknowledgment from EPA will include the EPA identification number
assigned.

(End of Alternate I)

######### Clause 14-8 CHANGES - FIXED-PRICE. (Sep 98)(BPI 14.10.5.1.1)

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract to any one or more of the following:

\(1\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for BPA in accordance with
the drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery or performance.

\(4\) Description of services to be performed.

\(5\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(6\) BPA-furnished property.

\(7\) Place of inspection or acceptance.

\(b\) If any such change causes an increase or decrease in the cost of,
or the time required for, performance of any part of the work under this
contract, whether or not changed by the order, the Contracting Officer
shall make an equitable adjustment in the contract price, the delivery
schedule, or both, and shall modify the contract.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order, but
not later than final payment.

\(d\) Failure to agree to any adjustment shall be a dispute under a
disputes clause if one is included in this contract. However, nothing in
this clause shall excuse the Contractor from proceeding with the
contract as changed.

\(e\) Constructive Changes. If the Contractor considers that a BPA
action or inaction constitutes a change to the contract (constructive
change), and the change is not identified as such in writing and signed
by the CO, the Contractor shall promptly notify the CO in writing. No
equitable adjustment will be made for costs incurred more than 20 days
before the Contractor gives written notice of the constructive change.

\(f\) Notwithstanding other provisions herein, only the Contracting
Officer, or persons specifically delegated authority to do so by the
Contracting Officer, are authorized to orally modify or affect the terms
of this contract. Contractor response to oral direction from any other
source is at its own risk of liability.

(End of clause)

######### Clause 14-9 CHANGES - COST-REIMBURSEMENT. (Sep 98) (BPI 14.10.5.1.1)

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract to any one or more of the following:

\(1\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for BPA in accordance with
the drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery or performance.

\(4\) Description of services to be performed.

\(5\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(6\) BPA-furnished property.

\(7\) Place of inspection or acceptance.

\(b\) If any such change causes an increase or decrease in the estimated
cost of, or the time required for, performance of any part of the work
under this contract, whether or not changed by the order, or if it
otherwise affects any other terms and conditions of this contract, the
Contracting Officer shall make an equitable adjustment in (1) the
estimated cost, delivery or completion schedule, or both; (2) the amount
of any fixed fee; and (3) other affected terms and shall modify the
contract accordingly.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order, but
not later than final payment.

\(d\) Failure to agree to any adjustment shall be a dispute under a
disputes clause, if one is included in this contract. However, nothing
in this clause shall excuse the Contractor from proceeding with the
contract as changed.

\(e\) Notwithstanding the terms and conditions of paragraphs (a) and (b)
above, the estimated cost of this contract and, if this contract is
incrementally funded, the funds allotted for the performance of this
contract shall not be increased or considered to be increased except by
specific written modification of the contract indicating the revised
contract estimated cost and, if this contract is incrementally funded,
the additional amount allotted to the contract. Until this modification
is made, the Contractor shall not be obligated to continue performance
or incur costs beyond the point established in the Limitation of Cost or
Limitation of Funds clause of this contract.

\(f\) Notwithstanding other provisions herein, only the Contracting
Officer, or persons specifically delegated authority to do so by the
Contracting Officer, are authorized to orally modify or affect the terms
of this contract. Contractor response to oral direction from any other
source, is at its own risk of liability.

(End of clause)

######### Clause 14-10 CHANGES - TIME AND MATERIALS. (Sep 98)(BPI 14.10.5.1.1)

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract to any one or more of the following:

\(1\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for BPA in accordance with
the drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery or performance.

\(4\) Description of services to be performed.

\(5\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(6\) BPA-furnished property.

\(7\) Place of inspection or acceptance.

\(b\) If any change causes an increase or decrease in any hourly rate,
the ceiling price, or the time required for performance of any part of
the work under this contract, whether or not changed by the order, the
Contracting Officer shall make an equitable adjustment in the (1)
ceiling price, (2) hourly rates, (3) delivery schedule, and (4) other
affected terms, and shall modify the contract accordingly.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order, but
not later than final payment.

\(d\) Failure to agree to any adjustment shall be a dispute under a
disputes clause, if one is included in this contract. However, nothing
in this clause shall excuse the Contractor from proceeding with the
contract as changed.

\(e\) Notwithstanding the terms and conditions of paragraphs (a) and (b)
above, the estimated cost of this contract and, if this contract is
incrementally funded, the funds allotted for the performance of this
contract, shall not be increased or considered to be increased except by
specific written modification of the contract indicating the revised
contract estimated cost and, if this contract is incrementally funded,
the additional amount allotted to the contract. Until this modification
is made, the Contractor shall not be obligated to continue performance
or incur costs beyond the point established in the Limitation of Cost or
Limitation of Funds clause of this contract.

\(f\) Notwithstanding other provisions herein, only the Contracting
Officer, or persons specifically delegated authority to do so by the
Contracting Officer, are authorized to orally modify or affect the terms
of this contract. Contractor response to oral direction from any other
source is at its own risk of liability.

(End of clause)

######### Clause 14-11 CHANGES AND CHANGED CONDITIONS - CONSTRUCTION CONTRACTS. (Sep 98)(BPI 14.10.5.1.1)

\(a\) The Contracting Officer may, in writing, order changes in the
drawings and specifications within the general scope of the contract.

\(b\) The Contractor shall promptly notify the Contracting Officer, in
writing, of subsurface or latent physical conditions differing
materially from those indicated in this contract or unknown unusual
physical conditions at the site before proceeding with the work.

\(c\) If changes under paragraph (a) or conditions under paragraph (b)
increase or decrease the cost of, or time required for performing the
work, the Contracting Officer shall make an equitable adjustment (see
paragraph (d)) upon assertion of a claim by the Contractor before final
payment under the contract.

\(d\) The Contracting Officer shall not make an equitable adjustment
under paragraph (b) unless\--

\(1\) The Contractor has submitted and the Contracting Officer has
received the required written notice; or

\(2\) The Contracting Officer waives the requirement for the written
notice.

\(e\) Failure to agree to any adjustment shall be a dispute under a
disputes clause, if one is included in this contract.

(End of clause)

######### CLAUSE 14-12 PRICING OF ADJUSTMENTS (Sep 98)(BPI 14.10.5.1.1)

When costs are a factor in any determination of a contract price
adjustment pursuant to the Changes clause or any other modification in
connection with this contract, such costs shall be in accordance with
the contract cost principles and procedures in Part 13 of the Bonneville
Purchasing Instructions which are in effect on the date of this
contract.

(End of Clause)

######### CLAUSE 14-13 MODIFICATION COST PROPOSAL - PRICE BREAKDOWN (Sep 98)(BPI 14.10.5.1.1)

\(a\) The contractor, in connection with any proposal it makes for a
contract modification, shall furnish a price breakdown, itemized as
required by the Contracting Officer. The breakdown shall be in enough
detail to permit an analysis of all material, labor, equipment,
subcontract, and overhead costs, as well as profit, and shall cover all
work involved in the modification, whether such work was deleted, added
or changed. Any amount claimed for subcontracts shall be supported by
similar price breakdowns from those subcontractors.

\(b\) In addition, if the proposal includes a time extension, a
justification thereof shall also be furnished. Notwithstanding any other
provisions of this contract, it is mutually understood that the time
extension for changes in the work will depend upon the extent, if any,
by which the changes cause delay in the completion of the various
elements of work. The contract completion dates will be extended only
for those specific elements so delayed and the remaining contract
completion dates for all other portions of the work will not be altered.

\(c\) The proposal, together with the price breakdown and time extension
justification, shall be furnished by the date specified by the
Contracting Officer.

(End of clause)

######### Clause 14-14 STOP WORK ORDER (Sep 98)(BPI 14.12.1)

\(a\) The Contracting Officer may order the Contractor to suspend all or
any part of the work of this contract for the period of time that the
Contracting Officer determines appropriate for the convenience of BPA.

\(b\) The contractor shall immediately comply with the Contracting
Officer\'s order and take all reasonable steps to minimize the
incurrence of costs allocable to the work covered by the order.

\(c\) If a stop work order is issued for the convenience of BPA, the
Contracting Officer shall make an equitable adjustment in the delivery
schedule or contract price, or both, if the order results in a

change in the time required for, or the costs properly allocable to, the
performance of any part of this contract.

\(d\) A claim under this clause shall not be allowed (1) for any cost
incurred more than 20 days before the Contractor notified the
Contracting Officer of the basis of the claim in writing, and (2) unless
the claim stating the amount of time or money requested, is asserted in
writing as soon as practicable after the termination of the delay or
interruption, but not later than the day of final payment under the
contract.

(End of clause)

######### Clause 14-15 SCIENTIFIC AND TECHNICAL INFORMATION REPORTING REQUIREMENTS (Sep 98)(BPI 14.14.1)

\(a\) The contractor shall prepare scientific and technical information
developed as a result of this contract in accordance with the required
report format for publications. A 50 to 300 word abstract (summary) of
the report must also be provided. The contractor shall coordinate with
the Contracting Officer's Technical Representative (COTR) for
preparation and transmittal of the electronic copy of the required
deliverables. Recognized electronic document interchange formats include
HTML, Postscript, and PDF.

\(b\) The COTR shall forward electronic form DOE F 241.1 plus two (2)
paper copies of the final report to the BPA Library.

(End of clause)

######### Clause 14-16 REQUIREMENT FOR U.S. FLAG VESSELS (Sep 98)(BPI 14.15.1)

\(a\) The Contractor shall use privately owned United States flag
commercial vessels to ship 100 percent of the gross tonnage involved in
this contract (computed separately for dry bulk carriers, dry cargo
liners, and tankers) whenever shipping any equipment, materials, or
commodities to the extent such vessels are available at rates that are
fair and reasonable for United States flag commercial vessels.

(b)(1) The Contractor shall submit one legible copy of a rated on-board
ocean bill of lading for each shipment to both (i) the Contracting
Officer and (ii) the Division of National Cargo, Office of Market
Development, Maritime Administration, U.S. Department of Transportation,
Washington, D.C. 20590. Subcontractor bills of lading shall be submitted
through the Prime Contractor.

\(2\) The Contractor shall furnish these bill of lading copies (i)
within 20 working days of the date of loading for shipments originating
in the United States, or (ii) within 30 working days for shipments
originating outside the United States. Each bill of lading copy shall
contain the following information:

\(A\) Sponsoring U.S. Government agency.

\(B\) Name of vessel.

\(C\) Vessel flag of registry.

\(D\) Date of loading.

\(E\) Port of loading.

\(F\) Port of final discharge.

\(G\) Description of commodity.

\(H\) Gross weight in kilograms and cubic meters if available.

\(I\) Total ocean freight revenue in U.S. dollars.

\(c\) Guidance regarding fair and reasonable rates for privately owned
U.S.-flag commercial vessels may be obtained from the Division of
National Cargo, Office of Market Development, Maritime Administration,
U.S. Department of Transportation, Washington, D.C. 20590, Phone: (202)
366-4610.

\(d\) In the event that the contractor is unable to obtain a U.S. Flag
Vessel, it may request BPA to waive the requirements of this clause.
Such request will be supported by documentation showing that no U.S.
flag vessel was available, and that a timely attempt was made to obtain
one. If the CO waives the applicable clause, the difference in cost
between the U.S. Flag and Foreign Flag Vessel shipping costs will be
added to or deducted from the contract by modification, as appropriate.

\(e\) Where a contract may involve shipment on U.S. Flag vessels, BPA
may furnish information on the award to the Maritime Administration so
that it can assist the Contractor in locating such vessels. However,
Maritime\'s relationship to the Contractor is noncontractual.

(End of clause)