**TITLE 48 CHAPTER 9 CODE OF FEDERAL REGULATIONS**

**DEPARTMENT OF ENERGY ACQUISITION REGULATION**

**TABLE OF CONTENTS**

**Subchapter A --- General**

901 - Federal Acquisition Regulations System

902 - Definitions of words and terms

903 - Improper business practices and personal conflicts of interest

904 - Administrative matters

**Subchapter B --- Acquisition Planning**

905 - Publicizing contract actions

906 - Competition requirements

907 - Acquisition planning

908 - Required sources of supplies and services

909 - Contractor qualifications

911 - Describing Agency needs

912 - Acquisition of Commercial Items

**Subchapter C --- Contracting Methods and Contract Types**

913 - Simplified acquisition procedures

914 - Sealed bidding

915 - Contracting by negotiation

916 - Types of contracts

917 - Special contracting methods

**Subchapter D --- Socioeconomic Programs**

919 - Small business programs

922 - Application of labor laws to Government acquisition

923 - Environment, conservation, occupational safety, and drug-free
workplace

925 - Foreign acquisition

926 - Other socioeconomic programs

**Subchapter E --- General Contracting Requirements**

927 - Patents, data and copyrights

928 - Bonds and insurance

931 - Contract cost principles and procedures

932 - Contract financing

933 - Protests, disputes and appeals

**Subchapter F --- Special Categories of Contracting**

935 - Research and development contracting

936 - Construction and architect-engineer contracts

937 - Service contracting

939 - Acquisition of Federal information processing resources by
contracting

941 - Acquisition of utility services

**Subchapter G --- Contract Management**

942 - Contract administration

945 - Government property

947 - Transportation

949 - Termination of contracts

950 - Extraordinary contractual actions

951 - Use of government sources by contractors

**Subchapter H --- Clauses and Forms**

952 - Solicitation provisions and contract clauses

**Subchapter I --- Agency Supplementary Regulations**

970 - DOE Management and Operating contracts

**PART 901 --- FEDERAL ACQUISITION REGULATIONS SYSTEM**

**Subpart 901.1 --- Purpose, Authority, Issuance**

Sec.

901.101 Purpose

901.102 Authority

901.103 Applicability

901.104 Issuance

901.104-1 Publication and Code Arrangement

901.104-2 Arrangement of Regulations

901.104-3 Copies

901.105 OMB Control Numbers

**Subpart 901.3 --- Agency Acquisition Regulations**

901.301-70 Other Issuances Related to Acquisition.

**Subpart 901.6 --- Contracting Authority and Responsibilities**

901.601 General.

901.602-3 Ratification of Unauthorized Commitments.

Authority: 42 U.S.C. 2201; 2282a; 2282b; 2282c; 41 U.S.C. 7101, et seq;
41 U.S.C. 418b; 50 U.S.C. 2401, et seq.

Source: 61 FR 41702, Aug. 9, 1996, unless otherwise noted.

**Subpart 901.1 --- Purpose, Authority, Issuance**

**901.101 Purpose.**

The Department of Energy Acquisition Regulation (DEAR) in this chapter
establishes uniform acquisition policies which implement and supplement
the Federal Acquisition Regulation (FAR).

**901.102 Authority.**

The DEAR and amendments thereto are issued by the Procurement Executive
pursuant to a delegation from the Secretary in accordance with the
authority of section 644 of the Department of Energy Organization Act
(42 U.S.C. 7254), section 205(c) of the Federal Property and
Administrative Services Act of 1949, as amended, (40 U.S.C. 486(c)), and
other applicable law.

**901.103 Applicability.**

The FAR and DEAR apply to all DOE acquisitions of supplies and services
which obligate appropriated funds unless otherwise specified in this
chapter.

**901.104 Issuance.**

**901.104-1 Publication and Code Arrangement.**

\(a\) The DEAR and its subsequent changes are published in the Federal
Register, cumulative form in the Code of Federal Regulations, and a
separate loose-leaf edition.

\(b\) The DEAR is issued as Chapter 9 of Title 48 of the Code of Federal
Regulations.

**901.104-2 Arrangement of Regulations.**

\(a\) General. The DEAR is divided into the same parts, subparts,
sections, subsections and paragraphs as is the FAR.

\(b\) Numbering. The numbering illustrations at (FAR) 48 CFR 1.104-2(b)
apply to the DEAR, but the DEAR numbering will be preceded with a 9 or a
90. Material which supplements the FAR will be assigned the numbers 70
and up.

**901.104-3 Copies.**

Copies of the DEAR published in the Federal Register or Code of Federal
Regulations may be purchased from the Superintendent of Documents,
Government Printing Office, Washington, DC 20402.

**901.105 OMB Control Numbers.**

The Paperwork Reduction Act of 1980, Public Law 98-511, and the Office
of Management and Budget\'s implementing regulations at 5 CFR part 1320,
require that reporting and record keeping requirements affecting 10 or
more members of the public be cleared by that Office. The OMB control
number for the collection of information under 48 CFR chapter 9 is
1910-4100, except for the following: Reporting and Recordkeeping
Requirements for Safety Management (see 48 CFR 970.5223-1), OMB number
1910-5103.

\[62 FR 34842, Jun. 27, 1997; 65 FR 80994, Dec. 22, 2000 and 71 FR
16241\]

**Subpart 901.3 --- Agency Acquisition Regulations**

**901.301-70 Other Issuances Related to Acquisition.**

In addition to the FAR and DEAR, there are other issuances which deal
with acquisition. Among these are the Federal Property Management
Regulations, the DOE Property Management Regulations, and DOE
Directives.

**Subpart 901.6 --- Contracting Authority and Responsibilities**

**901.601 General.**

\(a\) Contracting authority vests in the Secretary of Energy. The
Secretary has delegated this authority to the Procurement Executive. The
Procurement Executive has redelegated this authority to the Heads of
Contracting Activities (HCA). These delegations are formal written
delegations containing dollar limitations and conditions. Each HCA in
turn makes formal contracting officer appointments within the
contracting activity.

\(b\) The Procurement Executive has been authorized, without power of
redelegation, to perform the functions set forth at 48 CFR 1.601(b)
regarding the assignment of contracting functions and responsibilities
to another agency, and the creation of joint or combined offices with
another agency to exercise acquisition functions and responsibilities.

\[62 FR 53754, Oct. 16, 1997\]

**901.602-3 Ratification of unauthorized commitments \[DOE coverage
paragraph (b)\].**

\(b\) (2) The Procurement Executive is authorized to ratify an
unauthorized commitment.

\(3\) The ratification authority of the Procurement Executive in
paragraph (b)(2) of this section is delegated to the Head of the
Contracting Activity (HCA) for individual unauthorized commitments of
\$25,000 or under. The ratification authority of the HCA is
nondelegable.

\[61 FR 41702, Aug. 9, 1996\]

**PART 902 DEFINITIONS OF WORDS AND TERMS**

**Subpart 902.2 --- Definitions Clause**

Sec.

902.200 Definitions Clause

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11940, Mar. 28, 1984, unless otherwise noted.

**Subpart 902.2 --- Definitions Clause**

**902.200 Definitions clause.**

As prescribed by FAR Subpart 2.2, insert the clause at FAR 52.202-1,
Definitions, but modify it to limit the definition at paragraph (a) of
the clause, to encompass only the Secretary, Deputy Secretary, or the
Under Secretaries of the Department of Energy, and the Chairman, Federal
Energy Regulatory Commission. The contracting officer shall also add
paragraphs (h) and (i) or (g) and (h) if Alternate I of the FAR clause
is used. Paragraph (h) defines "DOE" as meaning the United States
Department of Energy, "FERC" as meaning the Federal Energy Regulatory
Commission, and "NNSA" as meaning the National Nuclear Security
Administration. Paragraph (i) identifies the Senior Procurement
Executive, DOE, as the Director, Office of Procurement and Assistance
Management; the Senior Procurement Executive, NNSA, as the Administrator
for Nuclear Security, NNSA; and the Senior Procurement Executive, FERC,
as the Chairman, Federal Energy Regulatory Commission.

\[50 FR 12183, Mar. 27, 1985; 65 FR 80994, Dec. 22, 2000; 67 FR 14870,
March 28, 2002\]

**PART 903 IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST**

**Subpart 903.1 --- Safeguards**

Sec.

903.101 Standards of Conduct.

903.101-3 Agency Regulations

903.104-3 Definitions

903.104-10 Violations or Possible Violations

**Subpart 903.2 --- Contractor Gratuities to Government Personnel**

903.203 Reporting Suspected Violations of the Gratuities Clause.

903.204 Treatment of Violations.

**Subpart 903.3 --- Reports of Suspected Antitrust Violations**

903.303 Reporting Suspected Antitrust Violations.

**Subpart 903.4 --- Contingent Fees**

903.408-1 Responsibilities.

**Subpart 903.5 --- Other Improper Business Practices**

903.502 Subcontractor kickbacks.

**Subpart 903.6 --- Contracts with Government Employees or Organizations
Owned or Controlled by Them**

903.603 Responsibilities of the Contracting Officer.

**Subpart 903.9 --- Whistleblower Protection for Contractor Employees**

903.901 Scope.

903.902 Definition.

903.903 Applicability.

903.970 Remedies.

903.971 Contract clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11940, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**Subpart 903.1 --- Safeguards**

**903.101Standards of Conduct.**

**903.101-3 Agency Regulations.**

Detailed rules applicable to the conduct of DOE employees are set forth
in 10 CFR Part 1010.

\[60 FR 47307, Sept. 12, 1995\]

**903.104-3 Definitions.**

As used in this section and for the purposes of the post-employment
restrictions at 48 CFR (FAR) 3.104-4(d)

*Deputy program manager* means the individual within DOE who normally
acts as the program manager in the absence of the program manager, and
does not mean an individual who occasionally acts for the program
manager or the deputy program manager.

*Program manager* means the individual within DOE who:

\(1\) Exercises authority on a day-to-day basis to manage an acquisition
program-

\(i\) For a system attained through the acquisition process; and

\(ii\) With one or more contracts, at least one of which has a value
exceeding \$10,000,000; and

\(2\) Is generally the person at the lowest organizational level who has
authority to make technical and budgetary decisions on behalf of DOE.

*System* means a combination of elements that function together to
produce the capabilities required to fulfill a mission need, including,
but not limited to hardware, equipment, software, or any combination
thereof.

\[63 FR 56851, Oct 23, 1998\]

**903.104-10 Violations or Possible Violations \[DOE coverage paragraph
(a)\].**

\(a\) Except for Headquarters activities, the individual within DOE
responsible for fulfilling the requirements of 48 CFR 3.104-10(a) (1)
and (2) relative to contracting officer conclusions on the impact of a
violation or possible violation of subsections 27 (a), (b), (c) or (d)
of the Office of Federal Procurement Policy Act shall be the legal
counsel assigned direct responsibility for providing legal advice to the
contracting office making the award or selecting the source. The legal
counsel is the Chief Counsel for the Operations Offices or the Federal
Energy Technology Center; the Counsel, or the Chief Counsel, for the
Support Offices or the Naval Reactors Offices; and the General Counsel
for the Power Administrations. For Headquarters activities, the
individual designated to perform the responsibilities in 48 CFR
3.104-10(a) (1) and (2) regarding questions of disclosure of proprietary
or source selection information is the Assistant General Counsel for
Procurement and Financial Assistance. The designated individual for
other questions regarding 48 CFR 3.104-10(a) (1) and (2) for
Headquarters activities is the Agency Ethics Official (Designated Agency
Ethics Official).

\[59 FR 11197, Mar. 10, 1994; 62 FR 53754, Oct. 16, 1997\]

**Subpart 903.2 --- Contractor Gratuities to Government Personnel**

**903.203 Reporting Suspected Violations of the Gratuities Clause.**

\(a\) Suspected violations of the Gratuities clause shall be reported to
the Head of the Contracting Activity (HCA) in writing detailing the
circumstances. The HCA will evaluate the report, and, if the report
appears to substantiate the allegations, the matter will be referred to
the Procurement Executive for disposition.

**903.204 Treatment of Violations.**

Apparent violations will be processed in accordance with the debarment
and suspension rules set forth at Title 10, Part 1035, of the Code of
Federal Regulations.

**Subpart 903.3 --- Reports of Suspected Antitrust Violations**

**903.303.Reporting Suspected Antitrust Violations.**

\(a\) Potential anti-competitive practices, such as described in FAR
3.301, and antitrust law violations as described in FAR 3.303, evidenced
in bids or proposals, shall be reported to the Office of General Counsel
through the Head of the Contracting Activity with a copy to the
Procurement Executive. The Office of General Counsel will provide
reports to the Attorney General, as appropriate.

\[50 FR 12183, Mar. 27, 1985\]

**Subpart 903.4 --- Contingent Fees**

**903.408-1 Responsibilities.**

\(b\) Each Standard Form 119 completed in connection with a DOE
contract, together with other relevant information, shall be reviewed by
Counsel prior to the initiation of appropriate action.

**Subpart 903.5 --- Other Improper Business Practices**

**903.502 Subcontractor Kickbacks.**

\(b\) Contracting officers shall report suspected violations of the
Anti-Kickback Act through the Head of the Contracting Activity, or
designee, to the Office of General Counsel.

**Subpart 903.6 --- Contracts with Government Employees or Organizations
Owned or Controlled by Them**

**903.603 Responsibilities of the Contracting Officer.**

\(a\) When the needs of the Government cannot be reasonably supplied by
sources other than employees of the Government or sources which are
substantially owned or controlled by Government employees, the
contracting officer, in accordance with (FAR) 48 CFR 3.602, may submit,
through the HCA, a request to the Procurement Executive, with
appropriate justification, for approval of an exception to the
prohibitions contained in FAR 3.601.

**Subpart 903.9 --- Whistleblower Protection for Contractor Employees**

**903.901 Scope.**

This subpart implements the DOE Contractor Employee Protection Program
as set forth at 10 CFR part 708. Part 708 establishes criteria and
procedures for the investigation, hearing, and review of allegations
from DOE contractor employees of employer reprisal resulting from
employee disclosure of information to DOE, to Members of Congress, or to
the contractor; employee participation in proceedings before Congress or
pursuant to this subpart; or employee refusal to engage in illegal or
dangerous activities, when such disclosure, participation, or refusal
pertains to employer practices which the employee believes to be unsafe;
to violate laws, rules, or regulations; or to involve fraud,
mismanagement, waste, or abuse.

**903.902 Definition.**

Contractor, as used in this subpart, has the meaning contained in 10 CFR
708.2.

**903.903 Applicability.**

10 CFR part 708 is applicable to complaints of retaliation filed by
employees of contractors, and subcontractors, performing work on behalf
of DOE directly related to DOE-owned or leased facilities, if the
complaint stems from a disclosure, participation, or refusal described
in 10 CFR 708.5.

**903.970 Remedies.**

\(a\) Contractors found to have retaliated against an employee in
reprisal for such disclosure, participation or refusal are required to
provide relief in accordance with decisions issued under 10 CFR part
708.

\(b\) 10 CFR part 708 provides that for the purposes of the Contract
Disputes Act *(41 U.S.C. 605* and 606), a final decision issued pursuant
to 10 CFR part 708 shall not be considered to be a claim by the
Government against a contractor or a decision by the contracting officer
subject to appeal. However, a contractor\'s disagreement and refusal to
comply with a final decision could result in a contracting officer\'s
decision to disallow certain costs or to terminate the contract for
default. In such case, the contractor could file a claim under the
Disputes clause of the contract regarding the disallowance of cost or
the termination of the contract.

**903.971 Contract clause.**

The contracting officer shall insert the clause at 952.203-70,
Whistleblower Protection for Contractor Employees, in contracts that
involve work to be done on behalf of DOE directly related to activities
at DOE-owned or leased sites.

\[65 FR 80994, Dec. 22, 2000\]

**PART 904 --- ADMINISTRATIVE MATTERS**

**Subpart 904.4 --- Safeguarding Classified Information within
Industry**

Sec.

904.401 Definitions.

904.402 General.

904.404 Solicitation provision and contract clause. \[DOE coverage -
Paragraph (d)\]

**Subpart 904.6 --- \[Reserved\]**

**Subpart 904.7 --- Contractor Records Retention**

904.702 Applicability.

**Subpart 904.8 --- Contract Files**

904.803 Contents of contract files.

904.804-1 Closeout by the office administering the contract.

904.805 Disposal of contract files.

**Subpart 904.70 --- Facility Clearance**

904.7000 Purpose.

904.7001 Applicability.

904.7002 Definitions.

904.7003 Disclosure of Foreign Ownership, Control, or Influence.

904.7004 Findings, Determination, and Contract Award or Termination.

**Subpart 904.71 --- Prohibition on Contracting (National Security
Program Contracts)**

904.7100 Scope of subpart.

904.7101 Definitions.

904.7102 Waiver by the Secretary.

904.7103 Solicitation provision and contract clause.

**Subpart 904.72 --- Public Affairs**

904.7200 Purpose.

904.7201 Contract clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11941, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000; 67 FR
14873, Mar. 28, 2002 unless otherwise noted.

**Subpart 904.4 --- Safeguarding Classified Information within
Industry**

**904.401 Definitions.**

*Access Authorization* means an administrative determination that an
individual is eligible for access to classified information or is
eligible for access to, or control over, special nuclear material.

*Classified Information* means information that is classified as
Restricted Data or Formerly Restricted Data under the Atomic Energy Act
of 1954, as amended, or information determined to require protection
against unauthorized disclosure under Executive Order 12958, or prior
Executive Orders, which is identified as National Security Information.

*Facility Clearance* means an administrative determination that a
facility is eligible to access, produce, use or store classified
information, or special nuclear material.

*Restricted Data* means all data concerning the design, manufacture, or
utilization of atomic weapons; the production of special nuclear
material; or the use of special nuclear material in the production of
energy, but does not include data declassified or removed from the
Restricted Data category pursuant to section 142 of the Atomic Energy
Act of 1954, as amended (42 U.S.C. 2162).

\[67 FR 14875, Mar. 28, 2002\]

**904.402 General.**

\(a\) The basis of DOE's industrial security requirements is the Atomic
Energy Act of 1954, as amended, and Executive Orders 12958 and 12829.

\(b\) DOE security regulations concerning restricted data are codified
at 10 CFR Part 1045.

\[60 FR 47307, Sep. 12, 1995; 67 FR 14876, Mar. 28, 2002\]

(c)(1) Section 234B of the Atomic Energy Act (42 U.S.C. 2282b) requires
that DOE contracts include a clause that provides for an appropriate
reduction in the fees or amounts paid to the contractor under the
contract in the event of a violation by the contractor or any contractor
employee of any rule, regulation, or order relating to the safeguarding
or security of Restricted Data or other classified information. The
clause is required for all DOE prime contracts that involve any
possibility of contractor access to Restricted Data or other classified
information. The clause is required to specify various degrees of
violations and the amount of the reduction attributable to each degree
of violation. The clause prescribed at 48 CFR 904.404(d)(6) (Conditional
Payment of Fee or Profit -- Safeguarding Restricted Data and Other
Classified Information) or the clause prescribed at 48 CFR 923.7002(f)
(Conditional Payment of Fee or Profit -- Safeguarding Restricted Data
and Other Classified Information and Protection of Worker Safety and
Health) shall be used for this purpose unless the clause prescribed at
48 CFR 970.1504-5(c) (Conditional Payment of Fee, Profit, and Other
Incentives -- Facility Management Contracts) is used.

\(2\) The clause entitled "Conditional Payment of Fee or Profit --
Safeguarding Restricted Data and Other Classified Information" and the
clause entitled "Conditional Payment of Fee or Profit -- Safeguarding
Restricted Data and Other Classified Information and Protection of
Worker Safety and Health" provide for reductions of fee or profit that
is earned by the contractor depending upon the severity of the
contractor's failure to comply with contract terms or conditions
relating to the safeguarding of Restricted Data or other classified
information. When reviewing performance failures that would otherwise
warrant a reduction of earned fee, the contracting officer must consider
mitigating factors that may warrant a reduction below the applicable
range specified in the clause. Some of the mitigating factors that must
be considered are specified in the clause.

\(3\) The contracting officer must obtain the concurrence of the Head of
the Contracting Activity:

\(i\) Prior to effecting any reduction of fee or amounts otherwise
payable to the contractor in accordance with the terms and conditions of
the clause entitled "Conditional Payment of Fee or Profit --
Safeguarding Restricted Data and Other Classified Information" or of the
clause entitled "Conditional Payment of Fee or Profit -- Safeguarding
Restricted Data and Other Classified Information and Protection of
Worker Safety and Health;" and

\(ii\) For determinations that no reduction of fee is warranted for a
particular performance failure(s) that would otherwise warrant a
reduction.

\[68 FR 68771, Dec. 10, 2003\]

**904.404 Solicitation provision and contract clause. \[DOE coverage -
Paragraph (d)\]**

\(d\) The security clauses to be used in DOE contracts are found at
952.204. They are:

\(1\) Security, 952.204-2. This clause is required in contracts or
subcontracts, the performance of which involves or is likely to involve
classified information. DOE utilizes the National Industrial Security
Program but DOE\'s security authority is derived from the Atomic Energy
Act which contains specific language not found in other agencies\'
authorities. For this reason, DOE contracts must contain the clause at
952.204-2 rather than the clause at FAR 52.204-2.

\(2\) Classification/Declassification, 952.204-70. This clause is to be
used in all contracts which involve classified information.

\(3\) Sensitive foreign nation controls, 952.204-71. This clause is
required in unclassified research contracts which may involve making
unclassified information about nuclear technology available to certain
sensitive foreign nations. The contractor shall be provided at the time
of award the listing of nations referenced in DOE N 142.1. (The
attachment referred to in the clause shall set forth the applicable
requirements of the DOE regulations on dissemination of unclassified
published and unpublished technical information to foreign nations.)

\(4\) Disclosure of information, 952.204-72. This clause may be used in
place of the clauses entitled \"Security\" and \"Classification\" in
contracts with educational institutions for research work performed in
their own institute facilities that are not likely to produce classified
information.

\(5\) *Facility Clearance, 952.204-73*. This solicitation provision
should be used in solicitations expected to result in contracts and
subcontracts that require employees to possess access authorizations.

\[49 FR 11941, Mar. 28, 1984; 49 FR 38949, Oct. 2, 1984, as amended at
54 FR 27646, June 30, 1989 and 59 FR 24357, May 11, 1994;

67 FR 14876, Mar. 28, 2002\]

\(6\) Except as prescribed in 48 CFR 970.1504-5(c), the contracting
officer shall insert the clause at 48 CFR 952.204-76, Conditional
Payment of Fee or Profit -- Safeguarding Restricted Data and Other
Classified Information, in all contracts that contain the clause at 48
CFR 952.204-2, Security, but that do not contain the clause at 48 CFR
952.250-70, Nuclear hazards indemnity agreement.

\[68 FR 68771, Dec. 10, 2003\]

\(7\) Computer Security, 952.204-77. This clause is required in
contracts in which the contractor may have access to computers owned,
leased or operated on behalf of the Department of Energy.

\[71 FR 40880, Jul. 19, 2006\]

**Subpart 904.6 --- \[Reserved\]**

\[52 FR 28717, Aug. 3, 1987; 60 FR 47307, Sept. 12, 1995; 62 FR 2310,
Jan. 16, 1997\]

**Subpart 904.7 --- Contractor Records Retention**

**904.702 Applicability.**

\(b\) Contracts containing the Safety and Health clause at 952.223-71,
the Radiation Protection and Nuclear Criticality clause at 952.223-72,
or the Nuclear Safety clause at 952.223-74 must also include the
Preservation of Individual Occupational Radiation Exposure Records
clause at 952.223-75 which will necessitate retention of records in
accordance with schedules contained in

applicable DOE Directives in the records management series and any
pertinent superseding provisions, rather than those found at FAR 4.7.

\[60 FR 47307, Sept. 12, 1995; 62 FR 2310, Jan. 16, 1997\]

**Subpart 904.8 --- Contract Files**

**904.803 Contents of contract files.**

\(a\) (29) The record copy of the Individual Procurement Action Report
shall be included in the file section containing procurement management
reports.

**904.804-1 Closeout by the office administering the contract \[DOE
Coverage paragraphs (a) and (b)\].**

\(a\) The Head of the Contracting Activity shall ensure that necessary
procedures and milestone schedules are established to meet the
requirements of FAR 4.804-1, and that resources are applied to effect
the earliest practicable deobligation of excess funds and the timely
closeout of all contract files which are physically completed or
otherwise eligible for closeout action.

\(b\) Quick closeout procedures for cost reimbursable and other than
firm fixed price type contracts are covered under 48 CFR 42.708.

\[62 FR 53754, Oct. 16, 1997\]

**904.805 Disposal of Contract Files.**

Contract files shall be disposed of in accordance with applicable DOE
Order 1324.2 (See current version).

**Subpart 904.70 --- Facility Clearance.**

**904.7000 Purpose.**

This subpart sets forth the Department of Energy policies and procedures
regarding Facility Clearances for contractors and subcontractors that
require access to classified information or special nuclear material. A
Facility Clearance is based upon a determination that satisfactory
safeguards and security measures are carried out for classified
activities being performed at the facility and upon a favorable foreign
ownership, control, or influence (FOCI) determination.

**904.7001 Applicability.**

The provisions of this subpart shall apply to all offerors, contractors,
and subcontractors who will or do have access to classified information
or a significant quantity of special nuclear material as defined in 10
CFR Part 710. In this subpart, the term \"contractor\" shall also mean
subcontractor at any tier, the term \"contract\" shall also mean
subcontract at any tier, and the term

\"special nuclear material\" shall also mean significant quantity of
special nuclear material as defined in 10 CFR Part 710.

**904.7002 Definitions.**

*Contracting Officer* means the DOE contracting officer.

*Facility Clearance* means an administrative determination that a
facility is eligible to access, produce, use, or store classified
information, or special nuclear material.

*Foreign Interest* means any of the following:

\(1\) Foreign government or foreign government agency or instrumentality
thereof;

\(2\) Any form of business enterprise organized under the laws of any
country other than the United States or its possessions;

\(3\) Any form of business enterprise organized or incorporated under
the laws of the U.S., or a State or other jurisdiction within the U.S.
which is owned, controlled, or influenced by a foreign government,
agency, firm, corporation, or person, or

\(4\) Any person who is not a U.S. citizen.

*Foreign Ownership, Control, or Influence* means the situation where the
degree of ownership, control, or influence over an offeror or a
contractor by a foreign interest is such that a reasonable basis exists
for concluding that compromise of classified information or special
nuclear material may possibly result.

**904.7003 Disclosure of Foreign Ownership, Control, or Influence.**

\(a\) If a contract requires a contractor to have a Facility Clearance,
DOE must determine whether the contractor is or may be subject to
foreign ownership, control or influence before a contract can be
awarded.

\(b\) If, during the performance of a contract, the contractor comes
under FOCI, then the DOE must determine whether a continuation of the
Facility Clearance may pose an undue risk to the common defense and
security through the possible compromise of that information or
material. If the DOE determines that such a threat or potential threat
exists, the contracting officer shall consider the alternatives of
negotiating an acceptable method of isolating the foreign interest which
owns, controls, or influences the contractor or terminating the
contract.

\(c\) It is essential for the DOE to obtain information about FOCI which
is sufficient to help the Department determine whether award of a
contract to a person or firm, or the continued performance of a contract
by a person or firm, may pose undue risk to the common defense and
security. Therefore, the provision specified at 952.204-73 shall be
included in solicitations that involve offeror or contractors that are
subject to 904.7001.

\(d\) The contracting officer shall not award or extend any contract
subject to this subpart, exercise any options under a contract, modify
any contracts subject to this subpart, or approve or consent to a
subcontract subject to this subpart unless:

\(1\) The contractor provides the information required by the
solicitation provision at 48 CFR 952.204-73, and

\(2\) The contracting officer has made a positive determination in
accordance with 48 CFR 904.7004. \[62 FR 42072, Aug. 5, 1997; 67 FR
14876, Mar. 28, 2002\]

**904.7004 Findings, Determination, and Contract Award or Termination.**

\(a\) Based on the information disclosed by the offeror or contractor,
and after consulting with the DOE Office of Safeguards and Security, the
contracting officer must determine that award of a contract to an
offeror or continued performance of a contract by a contractor will not
pose an undue risk to the common defense and security. The contracting
officer need not prepare a separate finding and determination addressing
FOCI; however, the memorandum of negotiation shall include a discussion
of the applicability of this subpart and the resulting determination.

\(b\) In those cases where FOCI does exist, and the DOE determines that
an undue risk to the common defense and security may exist, the offeror
or contractor shall be requested to propose within a prescribed period
of time a plan of action to avoid or mitigate the foreign influences by
isolation of the foreign interest.

\(c\) The types of plans that a contractor can propose are: measures
which provide for physical or organizational separation of the facility
or organizational component containing the classified information or
special nuclear material; modification or termination of agreements with
foreign interests; diversification or reduction of foreign source
income; assignment of specific security duties and responsibilities to
board members or special executive level committees; or any other
actions to negate or reduce FOCI to acceptable levels. The plan of
action may vary with the type of foreign interest involved, degree of
ownership, and information involved so that each plan must be negotiated
on a case by case basis. If the offeror or contractor and the DOE

cannot negotiate a plan of action that isolates the offeror or
contractor from FOCI satisfactory to the DOE, then the offeror shall not
be considered for contract award and affected existing contracts with a
contractor shall be terminated.

**904.7005 \[Removed\]**

\[62 FR 42072, Aug. 5, 1997; 67 FR 14876, Mar. 28, 2002\]

**Subpart 904.71 --- Prohibition on Contracting (National Security
Program Contracts)**

**904.7100 Scope of Subpart.**

This subpart implements section 836 of the Fiscal Year 1993 Defense
Authorization Act (Pub. L. 102-484) which prohibits the award of a
Department of Energy contract under the national security program to an
entity controlled by a foreign government if it is necessary for that
entity to be given access to information in a proscribed category of
information in order to perform the contract.

**904.7101 Definitions.**

*Effectively owned or controlled* means that a foreign government or an
entity controlled by a foreign government has the power, either directly
or indirectly, whether exercised or exercisable, to control or influence
the election or appointment of the Offeror\'s officers, directors,
partners, regents, trustees, or a majority of the Offeror\'s board of
directors by any means, e.g., ownership, contract, or operation of law.

*Entity controlled by a foreign government* means any domestic or
foreign organization or corporation that is effectively owned or
controlled by a foreign government or any individual acting on behalf of
a foreign government. See 925.7 for a statement of the prohibition.

*Foreign government* means any governing body organized and existing
under the laws of any country other than the United States and its
possessions and trust territories and any agent or instrumentality of
that government.

*Proscribed information* means

\(1\) Top Secret information;

\(2\) Communications Security (COMSEC) information, except classified
keys used to operate secure telephone units (STU IIIs);

\(3\) Restricted Data, as defined in the Atomic Energy Act of 1954, as
amended;

\(4\) Special Access Program (SAP) information; or,

\(5\) Sensitive Compartmented Information (SCI).

**904.7102 Waiver by the Secretary.**

\(a\) 10 U.S.C. 2536(b)(1)(A) allows the Secretary of Energy to waive
the prohibition on the award of contracts set forth in 10 U.S.C. 2536(a)
if the Secretary determines that a waiver is essential to the national
security interests of the United States. Any request for a waiver
regarding award of a contract or execution of a novation agreement shall
address:

\(1\) Identification of the proposed awardee and description of the
control by a foreign government;

\(2\) Description of the procurement and performance requirements;

\(3\) Description of why a waiver is essential to the national security
interests of the United States;

\(4\) The availability of other entities to perform the work; and

\(5\) A description of alternate means available to satisfy the
requirement.

\(b\) 10 U.S.C. 2536(b)(1)(B) allows the Secretary of Energy to waive
the prohibition on the award of contracts set forth in 10 U.S.C. 2536(a)
for environmental restoration, remediation or waste management contracts
at a DOE facility if the Secretary determines that a waiver will advance
the environmental restoration, remediation or waste management
objectives of DOE; will not harm the national security interests of the
United States; and may be authorized because the entity to which the
contract is to be awarded is controlled by a foreign government with
which the Secretary is authorized to exchange Restricted Data under
Section 144.c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)). Any
request for such a waiver regarding award of a contract or execution of
a novation agreement shall address:

\(1\) Identification of the proposed awardee and description of the
control by a foreign government;

\(2\) Description of the procurement and performance requirements;

\(3\) A description of how the Department\'s environmental restoration,
remediation, or waste management objectives will be advanced;

\(4\) A description of why a waiver will not harm the national security
interests of the United

States;

\(5\) The availability of other entities to perform the work;

\(6\) A description of alternate means available to satisfy the
requirement; and

\(7\) Evidence that the entity to which a contract is to be awarded is
controlled by a foreign government with which the Secretary is
authorized to exchange Restricted Data under Section 144.c. of the
Atomic Energy Act of 1954 (42 U.S.C. 2164(c)).

\(c\) Any request for a waiver under paragraph (a) or (b) of this
section shall be forwarded by the Head of the Contracting Activity to
the Office of Contract Management within the Headquarters procurement
organization.

\(d\) If the Secretary decides to grant a waiver for an environmental
restoration, remediation, or waste management contract, the Secretary
shall notify Congress of this decision. The contract may be awarded or
the novation agreement executed only after the end of the 45-day period
beginning on the date notification is received by the Senate Committee
on Armed Services and the House Committee on National Security.

\(e\) Any request for a waiver under this subpart shall be accompanied
by the information required by DEAR 952.204-73 that has been developed
by the Safeguards and Security Lead Responsible Office at the
contracting activity.

\[67 FR 14876, Mar. 28, 2002\]

**904.7103Solicitation Provision and Contract Clause.**

\(a\) Any solicitation, including those under simplified acquisition
procedures, for a contract under the national security program which
will require access to proscribed information shall include the
provision at 48 CFR 952.204-73.

\(b\) Any contract, including those awarded under simplified acquisition
procedures, under the national security program which require access to
proscribed information to enable performance, shall include the clause
at 48 CFR 952.204-2.

\[59 FR 6221, Feb. 10, 1994; 61 FR 21975, May 13, 1996; 62 FR 42072,
Aug. 5, 1997; 67 FR 14876, Mar. 28, 2002\]

**Subpart 904.72 --- Public Affairs**

**904.7200 Purpose.**

It is the policy of the Department of Energy to provide to the public
and the news media, accurate and timely unclassified information on
Departmental policies, programs, and activities. The Department\'s
contractors share the responsibility for releasing unclassified
information related to efforts under their contracts and must coordinate
the release of unclassified information with the cognizant contracting
officer and appropriate DOE Public Affairs personnel.

**904.7201 Contract clause.**

The contracting officer shall insert the clause at 952.204-75 in
solicitations and contracts that require the contractor to release
unclassified information related to efforts under its contract regarding
DOE policies, programs, and activities.

\[65 FR 80994, Dec. 22, 2000\]

**PART 905 PUBLICIZING CONTRACT ACTIONS**

**Subpart 905.5 --- Paid Advertisements**

905.502 Authority.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11936, Mar. 28, 1984, unless otherwise noted.

**Subpart 905.5 --- Paid Advertisements**

**905.502Authority.**

\(a\) Newspapers. When it is deemed necessary to use paid advertisements
in newspapers and trade journals, written authority for such publication
shall be obtained from the Head of the Contracting Activity or designee.

\[49 FR 11943, Mar. 28, 1984\]

**PART 906 --- COMPETITION REQUIREMENTS**

**Subpart 906.1 --- Full and Open Competition**

Sec.

906.102 Use of competitive procedures.

**Subpart 906.2 --- Full and Open Competition After Exclusion of
Sources**

906.202 Establishing or maintaining alternative sources.

**Subpart 906.3 --- Other Than Full and Open Competition**

906.304 Approval of the justification.

**Subpart 906.5 --- Competition Advocates**

906.501 Requirement.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 50 FR 12183, Mar. 27, 1985, unless otherwise noted.

**Subpart 906.1 --- Full and Open Competition**

**906.102 Use of competitive procedures.**

\(d\) Other competitive procedures.

\(1\) Professional architect-engineer services shall be negotiated in
accordance with Subpart 936.6 and FAR Subpart 36.6.

\(4\) Competitive selection of research proposals for award received in
response to a Program Research and Development Announcement (see Subpart
917.73 and Part 935).

\(5\) Competitive selection for award of proposals offered in response
to program opportunity notices (See Subpart 917.72).

**Subpart 906.2 --- Full and Open Competition After Exclusion of
Sources**

**906.202 Establishing or maintaining alternative sources.**

(b)(1) Every proposed contract action under the authority of FAR
6.202(a) shall be supported by a determination and finding (D&F) signed
by the Procurement Executive.

**Subpart 906.3 --- Other Than Full and Open Competition**

**906.304 Approval of the justification.**

\(c\) Class justifications within the delegated authority of a Head of
the Contracting Activity may be approved for:

\(1\) Contracts for electric power or energy, gas (natural or
manufactured), water, or other utility services when such services are
available from only one source;

\(2\) Contracts under the authority cited in FAR 6.302-4 or 6.302-5; or

\(3\) Contracts for educational services from nonprofit institutions.
Class justifications for classes of actions that may exceed \$10,000,000
require the approval of the Procurement Executive.

**Subpart 906.5 --- Competition Advocates**

**906.501 Requirement.**

The Secretary of Energy has delegated the authority for appointment of
the agency and contracting activity competition advocates to the
Procurement Executive. The Procurement Executive has delegated authority
to the Head of the Contracting Activity to appoint contracting activity
competition advocates. Procedural guidance is provided in internal DOE
Directives.

**PART 907 --- ACQUISITION PLANNING**

**Subpart 907.3 --- Contractor Versus Government Performance**

Sec.

907.307 Appeals.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11944, Mar. 28, 1984, unless otherwise noted.

**Subpart 907.3 --- Contractor Versus Government Performance**

**907.307 Appeals.**

An appeal of a decision to convert to contract or to continue in-house
performance may be made by an affected party. Appeals shall be made in
writing, be based only on specific alleged material deviation (or
deviations),from OMB Circular A-76, and be supported by appropriate
documentation. Appeals must be delivered within 15 working days of the
announced

decision, to the contracting officer. The contracting officer shall
process any such appeal in accordance with internal Departmental
procedures.

**PART 908 --- REQUIRED SOURCES OF SUPPLIES AND SERVICES**

**Subpart 908.8 --- Acquisition of Printing and Related Supplies**

908.802 Policy.

**Subpart 908.11 --- Leasing of Motor Vehicles**

908.1102 Presolicitation requirements.

908.1104 Contract clauses.

908.1170 Leasing of fuel-efficient vehicles.

**Subpart 908.71 --- Acquisition of Special Items**

908.7100 Scope of subpart.

908.7101 Motor vehicles.

908.7101-1 Scope of section.

908.7101-2 Consolidated acquisition of new vehicles by General Services
Administration.

908.7101-3 Direct acquisition.

908.7101-4 Replacement of motor vehicles.

908.7101-5 Used vehicles.

908.7101-6 Acquisition of fuel-efficient vehicles.

908.7101-7 Government license tags.

908.7102 Aircraft.

908.7103 Office machines.

908.7104 Office furniture and furnishings.

908.7105 Filing cabinets.

908.7106 Security cabinets.

908.7107 Alcohol.

908.7108 Helium.

908.7109 Fuels and packaged petroleum products.

908.7110 Coal.

908.7111 Arms and ammunition.

908.7112 Materials handling equipment replacement standards.

908.7113 Calibration services.

908.7114 Wiretapping and eavesdropping equipment.

908.7115 Forms.

908.7116 Electronic data processing tape.

908.7117 Tabulating machine cards.

908.7118 Rental of post office boxes.

908.7119 Reserved.

908.7120 Reserved.

908.7121 Special materials.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c). Source: 49 FR 11945, Mar.
28, 1984, unless otherwise noted.

**Subpart 908.8 --- Acquisition of Printing and Related Supplies**

**908.802 Policy \[DOE coverage paragraph (b)\].**

\(b\) Inclusion of printing requirements (limited exceptions are set
forth in paragraphs 35-2 through 35-4 of the Government Printing and
Binding Regulations in contracts for supplies and services is prohibited
unless specifically approved by the Director, Office of Administrative
Services, Headquarters. Contracting officers shall insert the clause at
48 CFR 952.208-70.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38949, Oct. 2, 1984; 60 FR 47307,
Sept. 12, 1995; 61 FR 41702, Aug 9, 1996\]

**Subpart 908.11 --- Leasing of Motor Vehicles**

**908.1102 Presolicitation requirements \[DOE coverage paragraph
(a)\].**

(a)(4) Commercial vehicle lease sources may be used only when the
General Services Administration (GSA) has advised that it cannot furnish
the vehicle(s) through the Interagency Motor Pool System and it has been
determined that the vehicle(s) are not available through the GSA
Consolidated Leasing Program.

**908.1104 Contract clauses. \[DOE coverage paragraph (e)\].**

\(e\) The clause at 48 CFR 952.208-7, Tagging of Leased Vehicles, shall
be inserted whenever a vehicle(s) is to be leased over 60 days, except
for those vehicles exempted by (FPMR) 41 CFR 101-38.6.

**908.1170 Leasing of fuel-efficient vehicles.**

\(a\) All sedans and station wagons and certain types of light trucks,
as specified by GSA, that are acquired by lease for 60 continuous days
or more for official use by DOE or its authorized contractors, are
subject to the requirements of the Energy Policy and Conservation Act of
1975 (EPCA), Public Law 94-163 and of Executive Order 12003 and
subsequent implementing regulations.

\(b\) Leased vehicles will meet the miles-per-gallon criteria of, and be
incorporated in, the approved plan of the fiscal year in which leases
are initiated, reviewed, extended, or increased in scope. Vehicle leases
will specify the vehicle model type to be provided.

**Subpart 908.71 --- Acquisition of Special Items**

**908.7100 Scope of subpart.**

This subpart sets forth requirements and procedures for the acquisition
of special items by DOE and contractors authorized to use special
sources of supply to the extent indicated herein.

**908.7101 Motor vehicles.**

**908.7101-1 Scope of section.**

Acquisitions by purchase of motor vehicles shall be in accordance with
this section.

**908.7101-2 Consolidated acquisition of new vehicles by General
Services Administration.**

\(a\) New vehicles shall be procured in accordance with FPMR 41 CFR
101-25.304, 101-26.501, and 101- 38.13, and DOE-PMR 41 CFR 109-25.304,
109- 38.13, and 109-38.51.

\(b\) Orders for all motor vehicles shall be submitted on GSA Form 1781,
Motor Vehicle Requisition.Delivery Order.Invoice, in accordance with
FPMR 41 CFR 101- 26.501. Requisitions for sedans, station wagons, and
certain light trucks as specified by

GSA, should contain a certification that the acquisition is in
conformance with Pub. L. 94-163, and Executive Order 12003 and 12375 and
subsequent implementations.

\(c\) The schedule of dates for submission of orders is contained in
FPMR 41 CFR 101-26.501-4. The Heads of Contracting Activities shall
consolidate and submit their requirements for passenger automobiles
early in the fiscal year. Requisitions for sedans, station wagons and
certain types of light trucks shall be submitted through Headquarters as
outlined in 908.7101-6.

Requisitions for all other types of vehicles shall be submitted directly
to GSA.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38949, Oct. 2, 1984\]

**908.7101-3 Direct acquisition.**

Vehicles may be acquired by DOE activities directly rather than through
GSA when a waiver has been granted by GSA. A copy of the activity\'s
request to GSA for a waiver shall be forwarded to the Director, Office
of Property Management, within the Headquarters procurement
organization. In those cases involving general purpose vehicles where
GSA refuses to grant a

waiver and where it is believed that acquisition through GSA would
adversely affect or otherwise impair the program, authority for direct
acquisition shall be obtained from the above-mentioned Headquarters
official, prior to acquisition. In the acquisition of

special purpose vehicles for use by DOE and its authorized contractors,
the Head of the Contracting Activity may authorize direct purchases. The
purchase price for sedans and station wagons, shall not exceed any
statutory limitation in effect at the time the acquisition is made. (See
DOE-PMR 41 CFR 109- 38.5102-4).

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7101-4 Replacement of motor vehicles.**

\(a\) The replacement of motor vehicles shall be in accordance with the
replacement standards prescribed in FPMR 41 CFR 101-38.9 and DOE-PMR 41
CFR 109-38.9.

\(b\) The Heads of Contracting Activities may arrange to sell, as
exchange sales, used motor vehicles being replaced and to apply the
proceeds to the purchase of similar new vehicles. However, in the event
personnel are not available to make such sales, or it is in the best
interest of the DOE office, GSA may be requested to sell the used
vehicles.

**908.7101-5 Used vehicles.**

Normally, DOE does not purchase or authorize contractors to purchase
used vehicles. However, the Heads of Contracting Activities may
authorize the purchase of used vehicles where justified by special
circumstances; e.g., when new vehicles are in short supply, the vehicles
are to be used for experimental or test purposes, or the vehicles are
acquired from exchange sale. In

accordance with DOE-PMR 41 CFR 109-38.5102, the statutory passenger
vehicle allocation requirements for DOE shall apply to any purchase of
used vehicles except in the case of vehicles to be used exclusively for
experimental or test purposes.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7101-6 Acquisition of fuel-efficient vehicles.**

\(a\) All purchases of sedans and station wagons, and certain types of
light trucks as specified by GSA, are subject to the requirements of the
Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94-163, and
of Executive Orders 12003 and 12375 and subsequent implementing
regulations. Accordingly, the Director of Administration and the Heads
of Contracting Activities will submit annually to the Director, Office
of Property Management, within the Headquarters procurement
organization, for approval, a forecast of plans for the purchase of such
vehicles during the fiscal year. Such forecast shall be submitted so as
to arrive at Headquarters on or before December 1 of each year.
Additionally, the original and 2 copies of requisitions (GSA form 1781)
for purchase of such vehicles shall also be forwarded to the above
official for review and certification/approval prior to submission to
GSA. All such documentation will be reviewed by this official and a
determination made as to conformance with applicable annual forecasts
and pertinent public laws and their implementations. (see DOE-PMR 41 CFR
109-38.13.)

\(b\) Sedans, station wagons, and light trucks requisitioned according
to an approved forecast, but not contracted for by GSA until the
subsequent fiscal year, will be included in the acquisition plan for the
miles-per-gallon criteria of the year in which GSA signs the purchase
contract along with the new vehicles planned for acquisition that year.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7101-7 Government license tags.**

\(a\) Government license tags shall be procured and assignments recorded
by DOE offices in accordance with FPMR 41 CFR 101-38.303.

\(b\) The letter \"E\" has been designated as the prefix symbol for all
DOE official license tags. Assignments of specific \"blocks\" of tag
numbers and the maintenance of tag assignment records, are performed by
the Director, Office of Property Management, within the Headquarters
procurement organization. Assignments of additional blocks of tag
numbers will be made upon receipt of written requests from field
offices.

\(c\) Special license tags for security purposes shall be purchased in
accordance with state and local laws, regulations, and procedures.

\(d\) In the District of Columbia, official Government tags shall be
obtained from the Department of Transportation, Motor Vehicles Services
Branch, District of Columbia, for all motor vehicles (except vehicles
exempt for security purposes) based or housed in the District.

\(e\) See DOE-PMR 41 CFR 109-38.3 and 109-38.6 for additional guidance.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7102 Aircraft.**

Acquisition of aircraft shall be in accordance with DOE-PMR 41 CFR
109-38.5205.

**908.7103 Office machines.**

Acquisitions of office machines by DOE offices and its authorized
contractors shall be in accordance with FPMR 41 CFR 101-25.104,
101-25.302, 101-25.302- 3, 101-25.302-4, and 101-25.302-6, and
101-25.403, and DOE-PMR 41 CFR 109-25.302, 109-25.302-3, and 109-25.4.

**908.7104 Office furniture and furnishings.**

Acquisitions of office furniture and furnishings by DOE offices shall be
in accordance with FPMR 41 CFR 101- 25.104, 101-25.302, 101-25.302-1,
101-25.302-5, 101-25.302-7, and 101-25.302-8, 101-25.404 and 101-26.505,
and DOE-PMR 41 CFR 109-25.302, 109-25.302-1, and 109-25.350.

**908.7105 Filing cabinets.**

Acquisitions of filing cabinets shall be in accordance with FPMR 41 CFR
101-26.308 and 101-25.302-2 and DOE-PMR 41 CFR 109-25.302-2.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7106 Security cabinets.**

\(a\) Acquisitions of security cabinets shall be in accordance with FPMR
41 CFR 101-26.507 and the \"prerequisites to ordering\" criteria
contained in FPMR 41 CFR 101-25.302-2 and DOE-PMR 41 CFR 109- 25.302-2.

\(b\) Fixed-price prime contractors and lower tier subcontractors may
use GSA acquisition sources for security cabinets in accordance with
FPMR 41 CFR 101-26.407 and FAR 51.

\[49 FR 11945, Mar. 28, 1984; 49 FR 38950, Oct. 2, 1984\]

**908.7107 Alcohol.**

\(a\) This section covers (1) Bureau of Alcohol, Tobacco and Firearms,
(ATF), Treasury Department, alcohol regulations applicable to DOE, (2)
delegations of authority to submit applications to purchase tax-free
alcohol or specially denatured alcohol, and (3) purchases of alcohol by
DOE or authorized contractors. To the fullest extent practicable,
alcohol for use by

DOE or its cost-type contractors shall be procured on a tax-free basis.

\(b\) ATF regulations relating to the acquisition and use of alcohol
free of tax, by Government agencies, are set forth in 26 CFR
213.141-213.146. Copies of excerpts from these regulations may be
secured from the Bureau of Alcohol, Tobacco and Firearms, Department of
Treasury, Washington, D.C. 20226. These regulations shall be followed in
the acquisition of alcohol.

\(c\) ATF Form 1444/1486, \"Tax Free Spirits or Specially Denatured
Spirits for Use of United States,\" shall be used for acquisitions of
specially denatured alcohol and ethyl alcohol. Section I of the form is
the application for permission to acquire and Section II is the permit.
If acquisition from more than one warehouse is desirable, separate
applications must be made for withdrawal from each warehouse. When
permits are no longer required, they should be forwarded to the Bureau
of Alcohol, Tobacco and Firearms for cancellation. Alcohol procured by
use of the ATF form referred to in this subsection shall be used
exclusively on DOE work.

\(d\) The Procurement Executive has been authorized to sign and delegate
to others authority to sign applications under Bureau of Alcohol,
Tobacco and Firearms regulations relating to the acquisition and use of
alcohol free of tax. Specific DOE personnel have been delegated
authority to execute Part I of Form 1444/1486 by letters to the
Director, Bureau of Alcohol, Tobacco and Firearms without power of
redelegation. Copies of such letters have been furnished to field
offices. Only the individuals so authorized shall execute Section I of
these forms. Requests by field offices for new authorizations or changes
to existing authorizations shall be submitted by letter to the
Procurement Executive.

\(e\) Applications on the ATF Form 1444/1486 shall be executed in
duplicate by an authorized DOE official and mailed directly to the
address on the application. Only one permit will be provided to each
field organization. Due to the numerous locations managed by field
operations offices, the exact shipping address need not be shown in
block 3 of the form. Shipments, however, must be addressed to the
\"Department of Energy at various locations within the United States\".
The ATF will assign the application a permit number and return it to the
requestor. Distribution of certified copies shall be controlled and each
holder of a certified copy recorded.

\(f\) Annually, the Bureau of Alcohol, Tobacco and Firearms publishes
printed lists of Distilled Spirits Plants, Bonded Warehouses and
Denaturing Plants Authorized to Operate. Copies of these lists and
supplies of Form 1444/1486 may be secured by written request to the
Director, Bureau of Alcohol, Tobacco and Firearms, Special Operations
Branch, Washington, DC 20226.

\(g\) A signed copy of the permit shall accompany the original purchase
order issued to the plant or warehouse, where it shall be retained or
returned with the shipment. Subsequent orders shall refer to the permit
on file in the plant or warehouse if it was retained.

\(h\) When alcohol is shipped, the shipper prepares the required form as
specified by Bureau of Alcohol, Tobacco and Firearms regulations and
forwards them to the consignee. Upon receipt of the receiving report
covering the shipment, the officer who signed the purchase order shall
execute the certificate of receipt and forward it to the appropriate
Regional Director, Bureau of

Alcohol, Tobacco and Firearms. The carrier transporting the alcohol
shall also be given a receipt as specified by Bureau of Alcohol, Tobacco
and Firearms regulations.

\(i\) Abandoned and forfeited alcohol which has come into the custody or
control of a Federal agency may be obtained by following the procedure
set forth in FPMR 41 CFR 101-48.1.

**908.7108 Helium.**

\(a\) Acquisitions of helium by DOE and its authorized contractors shall
be in accordance with this section.

\(b\) The Helium Act (Pub. L. 86-777, as amended (50 U.S.C. 167(d))
provides that, to the extent that supplies are readily available,
whether in gaseous or liquid form, DOE shall purchase all major
requirements of helium from the Secretary of Interior, Bureau of Mines,
or from the Bureau of Mines distribution contractors eligible to sell
Bureau of Mines helium to

Federal agencies and their users in accordance with 30 CFR Part 602.

(c)(1) Purchases may be made directly from the Bureau of Mines by
forwarding a purchase order in duplicate to: Bureau of Mines, Division
of Helium Operations, 1100 South Fillmore Street, Amarillo, Texas 79101.

\(2\) Purchases may be made from those commercial firms listed in the
Bureau of Mines as eligible to sell helium to Federal users.

\(i\) The purchase document shall contain the following statement:
\"Helium furnished under this contract shall be Bureau of Mines
Helium.\"

\(ii\) A copy of each acquisition document shall be furnished to the
address in paragraph (c)(1) of this section.

**908.7109 Fuels and packaged petroleum products.**

Acquisitions of fuel and packaged petroleum products by DOE offices
shall be in accordance with FPMR 41 CFR 101-26.602. When contractors are
authorized, consistent with 951, to acquire such products from Defense
sources, they shall do so in accordance with FPMR 41 CFR 101-26.602.

**908.7110 Coal.**

DOE offices and authorized contractors may participate in the Defense
Fuel Supply Center (DFSC) coal contracting program for carload or larger
lots. If participation is desired, estimates shall be submitted to DFSC
in accordance with FPMR 41 CFR 101-26.602.

**908.7111 Arms and ammunition.**

Pursuant to 10 U.S.C. 4655, the Secretary of the Army is authorized to
furnish arms, suitable accouterments for use therewith, and ammunition
for the protection of public money and property.

\(a\) The Department of the Army has granted clearance for Federal
agencies to procure, without further reference to or clearance from that
Department, all arms and ammunition of types which are not peculiar to
the military services, and which are readily procurable in the civilian
market.

\(b\) Acquisition of arms and ammunition readily procurable in the
civilian market shall be made in accordance with regular acquisition
procedures.

\(c\) Acquisition of arms and ammunition which are peculiar to the
military services shall be made by submission of order form to the
Commanding General, Headquarters, U.S. Army Material Development and
Readiness Command, 5001 Eisenhower Avenue, Alexandria, VA 22333.

\[49 FR 11945, Mar. 28, 1984, as amended at 49 FR 38950, Oct. 2, 1984\]

**908.7112 Materials handling equipment replacement standards.**

Materials handling equipment shall be purchased for replacement purposes
in accordance with the standards in FPMR 41 CFR 101-25.405 and DOE-PMR
41 CFR 109-25.4. The Heads of Contracting Activities are authorized to
replace an item earlier than the date specified in such standards under
unusual circumstances. A written justification shall be placed in the
purchase file.

**908.7113 Calibration services.**

Orders for calibration services may be placed with the National Bureau
of Standards, Washington, D.C. 20234, by either DOE acquisition offices
or its authorized contractors. Copies of the letters authorizing
contractors to order calibration services on behalf of DOE shall be sent
to the Bureau of Standards, Attention: \"Administrative Services
Division.\"

**908.7114 Wiretapping and eavesdropping equipment.**

Acquisition by DOE offices and contractors of devices primarily designed
to be used surreptitiously to overhear or record conversations is
prohibited.

**908.7115 Forms.**

\(a\) DOE forms shall be obtained by DOE offices in accordance with the
DOE Order 1322.2 (See current version). Cost-type contractors shall
obtain DOE forms through the DOE contracting officer.

\(b\) Standard, optional, and certain other agency forms as listed in
the GSA Supply Catalog will be obtained by DOE offices in accordance
with FPMR 41 CFR 101- 26.302.

\(c\) Marginally punched continuous forms shall be obtained in
accordance with FPMR 41 CFR 101- 26.703.

**908.7116 Electronic data processing tape.**

\(a\) Acquisitions of electronic data processing tape by DOE offices
shall be in accordance with FPMR 41 CFR 101-26.508.

\(b\) Acquisitions of electronic data processing tape by authorized
contractors shall be in accordance with FPMR 41 CFR 101-26.508-1.
However, if adequate justification exists, the Heads of the Contracting
Activities may authorize contractors to obtain their tape from other
sources. When such an authorization is granted, a copy of the
authorization and justification shall be retained in the contract file.

**908.7117 Tabulating machine cards.**

DOE offices shall acquire tabulating machine cards in accordance with
FPMR 41 CFR 101-26.509.

**908.7118 Rental of post office boxes.**

DOE offices and authorized contractors may rent post office boxes on an
annual basis, or for shorter periods by quarters, where necessary.
Payments for annual rentals are to be made in advance at the beginning
of the fiscal year, and for periods of less than a year, either in
advance for the whole period or at the beginning of each quarter in
which the box is to be used.

**908.7119 \[Reserved\]**

**908.7120 \[Reserved\]**

**908.7121 Special materials.**

This section covers the purchase of materials peculiar to the DOE
program. While purchases of these materials are unclassified, the
specific quantities, destination or use may be classified. See
appropriate sections of the Classification Guide. Contracting activities
shall require authorized contractors to obtain the special materials
identified in the following subsections in accordance with the
procedures stated therein.

\(a\) Heavy water. The Senior Program Official or designee controls the
acquisition and production of heavy water for a given program. Request
for orders shall be placed directly with the cognizant Senior Program
Official or designee.

\(b\) Precious metals. The DOE Oak Ridge Operations Office is
responsible for maintaining the DOE supply of precious metals. These
metals are platinum, palladium, iridium, osmium, rhodium, ruthenium,
gold and silver. The DOE Oak Ridge Operations Office has assigned
management of these metals to Martin Marrietta Energy Systems, Inc.,
MS8207, P.O. Box

2009, Oak Ridge, TN. 37831. DOE offices and authorized contractors shall
coordinate with the operating contractor regarding the availability of
the above metals prior to the purchase of these metals on the open
market.

\(c\) Lithium. Lithium is available at no cost other than normal
packing, handling, and shipping charges from Oak Ridge. The excess
quantities at Oak Ridge are to be considered as the first source of
supply prior to procurement of lithium compounds from any other source.

\[54 FR 27646, June 30, 1989; 62 FR 2310, Jan. 16, 1997\]

**PART 909 CONTRACTOR QUALIFICATIONS PART**

**Subpart 909.1 --- Responsible Prospective Contractors**

Sec.

909.104-1 General Standards.

909.104-3 Application of Standards.

**Subpart 909.4 --- Debarment, Suspension, and Ineligibility**

909.400 Scope of subpart.

909.401 Applicability.

909.403 Definitions.

909.405 Effect of listing.

909.406 Debarment.

909.406-2 Causes for debarment.

909.406-3 Procedures.

909.406-6 Requests for reconsideration of debarment.

909.407-2 Causes for suspension.

909.407-3 Procedures.

**Subpart 909.5 --- Organizational and Consultant Conflicts of
Interest**

909.503 Waiver.

909.504 Contracting Officer\'s Responsibility.

909.507 Solicitation provisions and contract clause.

909.507-1 Solicitation provisions.

909.507-2 Contract Clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11949, Mar. 28, 1984, unless otherwise noted and 59 FR
66259, Dec. 23, 1994.

**Subpart 909.1 --- Responsible Prospective Contractors**

**909.104-1 General Standards. (DOE coverage paragraph (h))**

\(h\) For solicitations for contract work subject to the provisions of
10 CFR part 707, Workplace Substance Abuse Programs at DOE Sites, the
prospective contractor must agree, in accordance with 48 CFR 970.5223-3,
Agreement Regarding Workplace Substance Abuse Programs at DOE Sites, to
provide the contracting officer with its written workplace substance
abuse program in order to be determined responsible and, thus, eligible
to receive the contract award.

\[57 FR 32675, July 22, 1992; 62 FR 42072, Aug. 5, 1997; 65 FR 80994,
Dec. 22, 2000\]

**909.104-3 Application of Standards (DOE coverage - paragraph (e))**

\(e\) DOE may select an entity which was newly created to perform the
prospective contract, including, but not limited to, a joint venture or
other similarly binding corporate partnership. In such instances when
making the determination of responsibility pursuant to 48 CFR 9.103, the
contracting officer may evaluate the financial resources of other
entities only to the extent that those entities are legally bound,
jointly and severally if more than one, by means of a performance
guarantee or other equivalent enforceable commitment to supply the
necessary resources to the prospective contractor and to assume all
contractual obligations of the prospective contractor. The guaranteeing
corporate entity(ies) must be found to have sufficient resources in
order to satisfy its guarantee.

\[64 FR 16649, April 6, 1999\]

**Subpart 909.4 --- Debarment, Suspension, and Ineligibility**

**909.400 Scope of subpart**.

This subpart:

\(a\) Prescribes policies and procedures governing the debarment and
suspension of organizations and individuals from participating in
Department of Energy (DOE) contracts, procurement sales contracts, and
real property purchase agreements, and from participating in DOE
approved subcontracts and subagreements.

\(b\) Sets forth the causes, procedures, and requirements for
determining the scope, duration, and effect of DOE debarment and
suspension actions; and

\(c\) Implements and supplements FAR subpart 9.4 with respect to the
exclusion of organizations and individuals from procurement contracting
and Government approved subcontracting.

**909.401 Applicability**.

The provisions of this subpart apply to all procurement debarment and
suspension actions initiated by DOE on or after the effective date of
this subpart. Nonprocurement debarment and suspension rules are codified
in 10 CFR Part 1036.

**909.403 Definitions**.

In addition to the definitions set forth at FAR 9.403, the following
definitions apply to this subpart:

[*Debarring Official*.]{.underline} The Debarring Official for DOE
contracts is the Director, Office of Procurement and Assistance
Management, DOE, or designee. The Debarring Official for NNSA contracts
is the Director, Office of Acquisition and Supply Management, NNSA, or
designee.\
[*Suspending Official*.]{.underline} The Suspending Official for DOE
contracts is the Director, Office of Procurement and Assistance
Management, DOE, or designee. The Suspending Official for NNSA contracts
is the Director, Office of Acquisition and Supply Management, NNSA, or
designee.

69 FR 75001, December 15, 2004

**909.405 Effect of listing \[DOE coverage paragraph (e), (f), (g) and
(h)\].**

\(e\) The Department of Energy may not solicit offers from, award
contracts to or consent to subcontract with contractors debarred,
suspended or proposed for debarment unless the Deputy Assistant
Secretary for Procurement and Assistance Management makes a written
determination justifying that there is a compelling reason for such
action in accordance with FAR 9.405(a).

\(f\) DOE may disapprove or not consent to the selection (by a
contractor) of an individual to serve as a principal investigator, as a
project manager, in a position of responsibility for the administration
of Federal funds, or in another key personnel position, if the
individual is on the GSA List.

\(g\) DOE shall not conduct business with an agent or representative of
a contractor if the agent\'s or representative\'s name appears on the
GSA List.

\(h\) DOE shall review the GSA List before conducting a preaward survey
or soliciting proposals, awarding contracts, renewing or otherwise
extending the duration of existing contracts, or approving or consenting
to the award, extension, or renewal of subcontracts.

**909.406 Debarment.**

**909.406-2 Causes for debarment \[DOE coverage paragraphs (c) and
(d)\].**

\(c\) The Debarring Official may debar a contractor for any other cause
of so serious or compelling a nature that it affects the present
responsibility of a DOE contractor. Such cause may include but is not
limited to:

\(1\) Commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a private contract or
subcontract; and

\(2\) Inexcusable, prolonged, or repeated failure to pay a debt
(including disallowed costs and overpayments) owed to DOE, provided the
contractor has been notified of the determination of indebtedness, and
further provided that the time for initiating any administrative or
legal action to oppose or appeal the determination of indebtedness has
expired or that such action, if initiated, has been concluded.

\(d\) The Debarring Official may debar a contractor:

\(1\) On the basis that an individual or organization is an affiliate of
a debarred contractor, subject to the requirements of FAR 9.406-1(b) and
9.406- 3(c);

\(2\) For failure to observe the material provisions of a voluntary
exclusion (see 10 CFR 1036.315 for discussion of voluntary exclusion).

**909.406-3 Procedures. (DOE coverage paragraphs (a), (b) and (d))**

\(a\) *Investigation and referral*. (1) Offices responsible for the
award and administration of contracts are responsible for reporting to
both the Deputy Assistant Secretary for Procurement and Assistance
Management and the DOE Inspector General information about possible
fraud, waste, abuse, or other wrongdoing which may constitute or
contribute to a cause(s) for debarment under this subpart. Circumstances
that involve possible criminal or fraudulent activities must be reported
to the Office of the Inspector General in accordance with 10 CFR Part
1010, Conduct of Employees, Sec. 1010.217(b), Cooperation with the
Inspector General.

\(2\) At a minimum, referrals for consideration of debarment action
should be in writing and should include the following information:

\(i\) The recommendation and rationale for the referral;

\(ii\) A statement of facts;

\(iii\) Copies of documentary evidence and a list of all witnesses,
including addresses and telephone numbers, together with a statement
concerning their availability to appear at a fact-finding proceeding and
the subject matter of their testimony;

\(iv\) A list of parties including the contractor, principals, and
affiliates (including last known home and business addresses, zip codes
and DUNS Number);

\(v\) DOE\'s acquisition history with the contractor, including recent
experience under contracts and copies of pertinent contracts;

\(vi\) A list of any known active or potential criminal investigations,
criminal or civil proceedings, or administrative claims before the Board
of Contract Appeals; and

\(vii\) A statement regarding the impact of the debarment action on DOE
programs. This statement is not required for referrals by the Inspector
General.

\(3\) Referrals may be returned to the originator for further
information or development.

\(b\) *Decision making process*. Contractors proposed for debarment
shall be afforded an opportunity to submit information and argument in
opposition to the proposed debarment.

\(1\) In actions based upon a conviction or civil judgment, or in which
there is no genuine dispute over material facts, the Debarring Official
shall make a decision on the basis of all the information in the
administrative record, including any submissions made by the contractor.
If the respondent fails to submit a timely written response to a notice
of proposed debarment, the Debarring Official shall notify the
respondent in accordance with FAR 9.406-3(e) that the contractor is
debarred.

\(2\) In actions not based upon a conviction or civil judgment, the
contractor may request a fact-finding hearing to resolve a genuine
dispute of material fact. In its request, the contractor must identify
the material facts in dispute and the basis for disputing the facts. If
the Debarring Official determines that there is a genuine dispute of
material fact, the Debarring Official shall refer the matter to the
Energy Board of Contract Appeals for a fact-finding conference.

\(3\) *Meeting*. Upon receipt of a timely request therefor from a
contractor proposed for debarment, the Debarring Official shall schedule
a meeting between the Debarring Official and the respondent, to be held
no later than 30 days from the date the request is received. The
Debarring Official may postpone the date of the meeting if the
respondent requests a postponement in writing. At the meeting, the
respondent, appearing personally or through an attorney or other
authorized representative, may present and explain evidence that causes
for debarment do not exist, evidence of any mitigating factors, and
arguments concerning the imposition, scope, or duration of a proposed
debarment or debarment.

\(4\) *Fact-finding conference*. The purpose of a fact-finding
conference under this section is to provide the respondent an
opportunity to dispute material facts through the submission of oral and
written evidence; resolve facts in dispute; and provide the Debarring
Official with findings of fact based, as applicable, on adequate
evidence or on a preponderance of the evidence. The fact-finding
conference shall be conducted in accordance with rules consistent with
FAR 9.406-3(b) promulgated by the Energy Board of Contract Appeals. The
Energy Board of Contract Appeals will notify the affected parties of the
schedule for the hearing. The Energy Board of Contract Appeals shall
deliver written findings of fact to the Debarring Official (together
with a transcription of the proceeding, if made) within a certain time
period after the hearing record closes, as specified in the Energy Board
of Contract Appeals Rules. The findings shall resolve any disputes over
material facts based upon a preponderance of the evidence, if the case
involves a proposal to debar, or on adequate evidence, if the case
involves a suspension. Since convictions or civil judgments generally
establish the cause for debarment by a preponderance of the evidence,
there usually is no genuine dispute over a material fact that would
warrant a fact-finding conference for those proposed debarments based on
convictions or civil judgments.

\(d\) *Debarring Official\'s decision*. (4) The Debarring Official\'s
final decision shall be based on the administrative record. In those
actions where additional proceedings are necessary as to disputed
material facts, written findings of fact shall be prepared and included
in the final decision. In those cases where the contractor has requested
and received a fact-finding conference, the written findings of fact
shall be those findings prepared by the Energy Board of Contract
Appeals. Findings of fact shall be final and conclusive unless within 15
days of receipt of the findings, the Department or the respondent
requests reconsideration, as provided in the Board\'s Rules, or unless
set aside by a court of competent jurisdiction. The Energy Board of
Contract Appeals shall be provided a copy of the Debarring Official\'s
final decision.

**909.406-6 Requests for reconsideration of debarment**.

\(a\) At any time during a period of debarment, a respondent may submit
to the Debarring or Suspending Official a written request for
reconsideration of the scope, duration, or effects of the
suspension/debarment action because of new information or changed
circumstances, as discussed at FAR 9.406-4(c).

\(b\) In reviewing a request for reconsideration, the Debarring or
Suspending Official may, in his or her discretion, utilize any of the
procedures (meeting and fact-finding) set forth in 48 CFR (DEAR)
909.406-3 and 909.407-3. The Debarring or Suspending Official\'s final
disposition of the reconsideration request shall be in writing and shall
set forth the reasons why the request has been granted or denied. A
notice transmitting a copy of the disposition of the request for
reconsideration shall be sent to the respondent and, if a fact-finding
conference under 48 CFR (DEAR) 909.406-3(b)(4) is pending (as in the
case of a request for reconsideration of a suspension, where the
proposed debarment is the subject of a fact-finding conference), a copy
of the disposition shall be transmitted to the Energy Board of Contract
Appeals.

**909.407-2 Causes for suspension \[DOE coverage paragraph (d)\].**

\(d\) The Suspending Official may suspend an organization or individual:

\(1\) Indicted for or suspected, upon adequate evidence, of the causes
described in 48 CFR (DEAR) 909.406-2(c)(1).

\(2\) On the basis of the causes set forth in 48 CFR (DEAR)
909.406-2(d)(2).

\(3\) On the basis that an organization or individual is an affiliate of
a suspended or debarred contractor.

**909.407-3 Procedures. (DOE coverage paragraphs (b) and (e))**

\(b\) Decision making process.

\(1\) In actions based on an indictment, the Suspending Official shall
make a decision based upon the administrative record, which shall
include submissions made by the contractor in accordance with 48 CFR
(DEAR) 909.406-3(b)(1) and 909.406-3(b)(3).

\(2\) For actions not based on an indictment, the procedures in 48 CFR
(DEAR) 909.406-3(b)(2) and FAR 9.407-3(b)(2) apply.

\(3\) Coordination with Department of Justice. Whenever a meeting or
fact-finding conference is requested, the Suspending Official\'s legal
representative shall obtain the advice of appropriate Department of
Justice officials concerning the impact disclosure of evidence at the
meeting or fact-finding conference could have on any pending civil or
criminal investigation or legal proceeding. If such Department of
Justice official requests in writing that evidence needed to establish
the existence of a cause for suspension not be disclosed to the
respondent, the Suspending Official shall:

\(i\) Decline to rely on such evidence and withdraw (without prejudice)
the suspension or proposed debarment until such time as disclosure of
the evidence is authorized; or

\(ii\) Deny the request for a meeting or fact-finding and base the
suspension decision solely upon the information in the administrative
record, including any submission made by the respondent.

\(e\) Notice of suspending official\'s decision. In actions in which
additional proceedings have been held, following such proceedings, the
Suspending Official shall notify respondent, as applicable, in
accordance with paragraphs (e)(1) or (e)(2) of this section.

\(1\) Upon deciding to sustain a suspension, the Suspending Official
shall promptly send each affected respondent a notice containing the
following information:

\(i\) A reference to the notice of suspension, the meeting and the
fact-finding conference;

\(ii\) The Suspending Official\'s findings of fact and conclusions of
law;

\(iii\) The reasons for sustaining a suspension;

\(iv\) A reference to the Suspending Official\'s waiver authority under
48 CFR (DEAR) 909.405;

\(v\) A statement that the suspension is effective throughout the
Executive Branch as provided in FAR 9.407-1(d);

\(vi\) Modifications, if any, of the initial terms of the suspension;

\(vii\) A statement that a copy of the suspension notice was sent to GSA
and that the respondent\'s name and address will be added to the GSA
List; and

\(viii\) If less than an entire organization is suspended, specification
of the organizational element(s) or individual(s) included within the
scope of the suspension.

\(2\) If the Suspending Official decides to terminate a suspension, the
Suspending Official shall promptly send, by certified mail, return
receipt requested, each affected respondent a copy of the final decision
required under this section.

\[61 FR 39857, July 31, 1996\]

**Subpart 909.5 --- Organizational and Consultant Conflicts of
Interest**

**909.503 Waiver.**

Heads of Contracting Activities are delegated the authorities in 48 CFR
(FAR) 9.503 regarding waiver of OCI requirements.

\[62 FR 40748, July 30, 1997\]

**909.504 Contracting Officer\'s Responsibility. (DOE
coverage-paragraphs (d) and (e)).**

\(d\) The contracting officer shall evaluate the statement by the
apparent successful offeror or, where individual contracts are
negotiated with all firms in the competitive range, all such firms for
interests relating to a potential organizational conflict of interest in
the

performance of the proposed contract. Using that information and any
other credible information, the contracting officer shall make written
determination of whether those interests create an actual or significant
potential organizational conflict of interest and identify any actions
that may be taken to avoid, neutralize, or mitigate such conflict. In
fulfilling their responsibilities for identifying and resolving
potential conflicts, contracting officers should avoid creating
unnecessary delays, burdensome information requirements, and excessive
documentation.

\(e\) The contracting officer shall award the contract to the apparent
successful offeror unless a conflict of interest is determined to exist
that cannot be avoided, neutralized, or mitigated. Before determining to
withhold award based on organizational conflict of interest
considerations, the contracting officer shall notify the offeror,
provide the reasons therefor, and allow the offeror a reasonable
opportunity to respond. If the conflict cannot be avoided, neutralized,
or mitigated to the contracting officer\'s satisfaction, the contracting
officer may disqualify the offeror from award and undertake the
disclosure, evaluation, and determination process with the firm next in
line for award. If the contracting officer finds that it is in the best
interest of the United States to award the contract notwithstanding a
conflict of interest, a request for waiver shall be submitted in
accordance with 48 CFR 909.503. The waiver request and decisions shall
be included in the contract file.

\[62 FR 40748, July 30, 1997\]

**909.507 Solicitation provisions and contract clause.**

**909.507-1 Solicitation provisions. (DOE coverage paragraph (e)).**

\(e\) The contracting officer shall insert the provision at 48 CFR
952.209-8, Organizational Conflicts of Interest Disclosure-Advisory and
Assistance Services, in solicitations for advisory and assistance
services expected to exceed the simplified acquisition threshold. In
individual procurements, the Head of the Contracting Activity may
increase the period subject to disclosure in 952.209-8 (c)(1) up to 36
months.

\[62 FR 40748, July 30, 1997\]

**909.507-2 Contract Clause.**

(a)(1) The contracting officer shall insert the clause at 48 CFR
952.209-72, Organizational Conflicts of Interest, in each solicitation
and contract for advisory and assistance services expected to exceed the
simplified acquisition threshold.

\(2\) Contracting officers may make appropriate modifications where
necessary to address the potential for organizational conflicts of
interest in individual contracts. Contracting officers shall determine
the appropriate term of the bar of paragraph (b)(1)(i) of the clause at
48 CFR 952.209-72 and enter that term in the blank provided. In the
usual case of a contract for advisory and assistance services a period
of three, four, or five years is appropriate; however, in individual
cases the contracting officer may insert a term of greater or lesser
duration.

\(3\) The contracting officer shall include Alternate I with the clause
in instances in which a meaningful amount of subcontracting for advisory
and assistance services is expected.

\(b\) Contracts, which are not subject to part 970 but provide for the
operation of a DOE site or facility or environmental remediation of a
specific DOE site or sites, shall contain the organizational conflict of
interest clause at 48 CFR 952.209-72. The organizational conflicts of
interest clause in such contracts shall include Alternate I to that
clause.

\[62 FR 40748, July 30, 1997\]

**PART 911 --- DESCRIBING AGENCY NEEDS**

**Subpart 911.3 --- Priorities and Allocations**

Sec.

911.600 Scope of subpart.

911.602 General.

911.604 Solicitation provision and contract clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11936, Mar. 28, 1984, unless otherwise noted.

**Subpart 911.6 --- Priorities and Allocations**

**911.600 Scope of Subpart.**

This subpart implements and supplements FAR Subpart 11.6, Priorities and
Allocations, and implements the regulations and procedures of the
Defense Priorities and Allocations System (DPAS) in solicitations and
contracts in support of authorized national defense programs. (See 15
CFR Part 700.)

\[73 FR 10980 February 29, 2008\]

**911.602General.**

\(e\) The Heads of Contracting Activities shall ensure that members of
their staffs and contractors under their jurisdiction are advised of the
provisions of the DPAS regulation and that the related procedures are
followed to ensure adherence to the regulation throughout the industrial
supply chain. Under DPAS, it is mandatory that the priority rating be
extended through the

industrial chain from supplier to supplier.

\[61 FR 21975, May 13, 1996\]

**911.604 Solicitation Provision and Contract Clause**.

\(a\) The contracting officer shall insert the provision at 952.211-70,
Priorities and Allocations (Atomic Energy), in solicitations that will
result in the placement of rated orders for authorized DOE atomic energy
programs.

\(b\) The contracting officer shall insert the clause at 952.211-71,
Priorities and Allocations (Atomic Energy) in contracts that are placed
in support of authorized DOE atomic energy programs.

\(c\) The use of the provisions at 952.211-70 and the clause at
952.211-71 is optional for industrial delivery orders of \$5,000 or
less.

\[73 FR 10980 February 29, 2008\]

**PART 912 --- ACQUISITION OF COMMERCIAL ITEMS**

**Subpart 912.3 --- Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items**

Sec.

912.302 Tailoring of provisions and clauses for the acquisition of
commercial items.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 62 FR 53754, Oct. 16, 1997

**Subpart 912.3 --- Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items**

**912.302 Tailoring of provisions and clauses for the acquisition of
commercial items \[DOE coverage paragraph (c)\].**

\(c\) The waiver required by 48 CFR 12.302(c) shall be in writing and
approved by the contracting officer.

**PART 913 --- SIMPLIFIED ACQUISITION PROCEDURES**

**Subpart 913.3 --- Simplified Acquisition Methods.**

Sec.

913.307 Forms

**Subpart 913.4 --- \[Removed and reserved\]**

**Authority**: 42 U.S.C. 7101 et seq., 41 U.S.C. 418(b); 50 U.S.C. 2401
et seq.

**Source**: 67 FR 14871, Mar. 27, 2002, unless otherwise noted.

**Subpart 913.3 --- Simplified Acquisition Methods**

**913.307 Forms.**

\(b\) Optional Forms 347 and 348, or DOE F 4250.3, may be used for
purchase orders using simplified acquisition procedures. These forms
shall not be used as the contractor's invoice. See 48 CFR 12.204
regarding the use of SF-1449 for the acquisition of commercial items
using simplified acquisition procedures.

**Subpart 913.4 --- \[Removed and reserved\]**

\[49 FR 11954, Mar. 28, 1984; 67 FR 14871; 60 FR 14869, March 28, 2002;
and 72 FR 29431, May 29, 2007\]

**PART 914 --- SEALED BIDDING**

**Subpart 914.4 --- Opening of Bids and Award of Contract**

Sec.

914.404-1 Cancellation of invitations after opening.

914.407 Mistakes in bids.

914.407-3 Other mistakes disclosed before award.

914.407-4 Mistakes after award.

914.408-2 Award of classified contracts.

**Subpart 914.5 --- Two-Step Sealed Bidding**

914.502 Conditions for use.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11954, Mar. 28, 1984, unless otherwise noted.

**Subpart 914.4 --- Opening of Bids and Award of Contract**

**914.404-1 Cancellation of invitations after opening.**

\(c\) The Procurement Executive has been delegated authority to make the
determination under FAR 14.404-1(c) and (e) and has redelegated this
authority to the Heads of the Contracting Activities without power of
redelegation.

\[50 FR 12184, Mar. 27, 1985\]

**914.407 Mistakes in bids.**

**914.407-3 Other mistakes disclosed before award.**

\(e\) Pursuant to FAR 14.407-3(e), the Procurement Executive, has been
delegated authority by the Secretary to make the determinations under
FAR 14.407-3. In the case of mistakes in bids alleged after opening of
bids and before award, the Procurement Executive has redelegated this
authority to the Heads of Contracting Activities without power of
redelegation and to make administrative determinations regarding
withdrawal of bids as provided for in FAR 14.407-3, providing that each
such determination shall be approved by Legal Counsel.

\[49 FR 11954, Mar. 28, 1984, as amended at 56 FR 41964, Aug. 26, 1991;
67 FR14869, Mar. 28, 2002\]

**914.407-4 Mistakes after award.**

The Procurement Executive has been delegated authority to make the
determinations under FAR 14.407-4. Mistakes in bids after award,
together with the data set forth in FAR 14.407-4(e), shall be submitted
to the Procurement Executive for decision.

\[67 FR 14869, Mar. 28, 2002\]

**914.408-2 Award of classified contracts.**

DOE regulations regarding the safeguarding of restricted data and
procedures for its destruction are contained at 10 CFR Part 1016.

\[60 FR 14869, Mar. 28, 2002\]

**Subpart 914.5 --- Two-Step Sealed Bidding**

**914.502 Conditions for use.**

\(c\) Use of the two-step sealed bidding method shall be approved by the
Head of the Contracting Activity. The contracting officer shall submit a
written request for approval justifying its use in accordance with FAR
14.502.

\[50 FR 12184, Mar. 27, 1985\]

**PART 915 --- CONTRACTING BY NEGOTIATION**

**Subpart 915.2 --- Solicitation and Receipt of Proposals and
Information**

915.200 Scope of subpart

915.201 Exchanges with industry before receipt of proposals

915.207-70 Handling of proposals during evaluation

**Subpart 915.3 --- Source Selection**

915.305 Proposal evaluation

**Subpart 915.4 --- Contract Pricing**

915.404-1 Information to support proposal analysis.

915.404-2-70 Audit as an aid in proposal analysis

915.404-4 Profit

915.404-4-70 DOE structured profit and fee system.

915.404-4-70-1 General

915.404-4-70-2 Weighted guidelines system

915.404-4-70-3 Documentation

915.404-4-70-4 Exceptions

915.404-4-70-5 Special considerations - contracts with nonprofit
organizations

(other than educational institutions).

915.404-4-70-6 Contracts with educational institutions

915.404-4-70-7 Alternative techniques

915.404-4-70-8 Weighted guidelines application considerations

915.404-4-71 Profit and fee-system for construction and construction
management contracts.

915.404-4-71-1 General

915.404-4-71-2 Limitations

915.404-4-71-3 Factors for determining fees

915.404-4-71-4 Considerations affecting fee amounts

915.404-4-71-5 Fee schedules

915.404-4-71-6 Fee base

915.404-4-72 Special considerations for cost-plus-award-fee contracts

915.408 Solicitation provision and contract clause

**Subpart 915.6 --- Unsolicited Proposals**

915.602 Policy

915.603 General

915.605 Content of unsolicited proposals

915.606 Agency procedures

915.607 Criteria for acceptance of an unsolicited proposal

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 63 FR 56851, Oct. 23, 1998, unless otherwise noted.

**Subpart 915.2 --- Solicitation and Receipt of Proposals and
Information**

**915.200 Scope of subpart.**

FAR 15.2 is not applicable to Program Opportunity Notices (See 48 CFR
917.72) or Program Research and Development Announcements (See 48 CFR
917.73). \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.201 Exchanges with industry before receipt of proposals. (DOE
coverage-paragraph (e)).**

\(e\) Approval for the use of solicitations for information or planning
purposes shall be obtained from the Head of the Contracting Activity.
\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.207-70 Handling of proposals during evaluation.**

\(a\) Proposals furnished to the Government are to be used for
evaluation purposes only. Disclosure outside the Government for
evaluation is permitted only to the extent authorized by, and in
accordance with, the procedures in this subsection.

\(b\) While the Government's limited use of proposals does not require
that the proposal bear a restrictive notice, proposers should, if they
desire to maximize protection of their trade secrets or confidential or
privileged commercial and financial information contained in them, apply
the restrictive notice prescribed in paragraph (e) of the provision at
48 CFR 52.215-1 to such information. In any event, information contained
in proposals will be protected to the extent permitted by law, but the
Government assumes no liability for the use or disclosure of information
(data) not made subject to such notice in accordance with paragraph (e)
of the provision at 48 CFR 52.215-1.

\(c\) If proposals are received with more restrictive conditions than
those in paragraph (e) of the provision at 48 CFR 52.215-1, the
contracting officer or coordinating officer shall inquire whether the
submitter is willing to accept the conditions of paragraph (e). If the
submitter does not, the contracting officer or coordinating officer
shall, after consultation with counsel, either return the proposal or
accept it as marked. Contracting officers shall not exclude from
consideration any proposals merely because they contain an authorized or
agreed to notice, nor shall they be prejudiced by such notice.

\(d\) Release of proposal information (data) before decision as to the
award of a contract, or the transfer of valuable and sensitive
information between competing offerors during the competitive phase of
the acquisition process, would seriously disrupt the Government's
decision-making process and undermine the integrity of the competitive
acquisition process, thus adversely affecting the Government's ability
to solicit competitive proposals and award a contract which would best
meet the Government's needs and serve the public interest. Therefore, to
the extent permitted by law, none of the information (data) contained in
proposals, except as authorized in this subsection, is to be disclosed
outside the Government before the Government's decision as to the award
of a contract. In the event an outside evaluation is to be obtained, it
shall be only to the extent authorized by, and in accordance with the
procedures of, this subsection.

(e)(1) In order to maintain the integrity of the procurement process and
to assure that the propriety of proposals will be respected, contracting
officers shall assure that the following notice is affixed to each
solicited proposal prior to distribution for evaluation:

**Government Notice for Handling Proposals**

> This proposal shall be used and disclosed for evaluation purposes
> only, and a copy of this Government notice shall be applied to any
> reproduction or abstract thereof. Any authorized restrictive notices
> which the submitter places on this proposal shall also be strictly
> complied with. Disclosure of this proposal outside the Government for
> evaluation purposes shall be made only to the extent authorized by,
> and in accordance with, the procedures in DEAR subsection 915.207-70.

(End of Notice)

\(2\) The notice at FAR 15.609 (d) for unsolicited proposals shall be
affixed to a cover sheet attached to each such proposal upon receipt by
DOE. Use of the notice neither alters any obligation of the Government,
nor diminishes any rights in the Government to use or disclose data or
information.

(f)(1) Normally, evaluations of proposals shall be performed only by
employees of the Department of Energy. As used in this section,
"proposals" includes the offers in response to requests for proposals,
sealed bids, program opportunity announcements, program research and
development announcements, or any other method of solicitation where the
review of proposals or bids is to be performed by other than peer
review. In certain cases, in order to gain necessary expertise,
employees of other agencies may be used in instances in which they will
be available and committed during the period of evaluation. Evaluators
or advisors who are not Federal employees, including employees of DOE
management and operating contractors, may be used where necessary. Where
such non-Federal employees are used as evaluators, they may only
participate as members of technical evaluation committees. They may not
serve as members of the Source Evaluation Board or equivalent board or
committee.

(2)(i) Pursuant to section 6002 of Pub. L. 103-355, a determination is
required for every competitive procurement as to whether sufficient DOE
personnel with the necessary training and capabilities are available to
evaluate the proposals that will be received. This determination,
discussed at FAR 37.204, shall be made in the memorandum appointing the
technical evaluation committee by the Source Selection Official, in the
case of Source Evaluation Board procurements, or by the Contracting
Officer in all other procurements.

\(ii\) Where it is determined such qualified personnel are not available
within DOE but are available from other Federal agencies, a
determination to that effect shall be made by the same officials in the
same memorandum. Should such qualified personnel not be available, a
determination to use non-Federal evaluators or advisors must be made in
accordance with paragraph (f)(3) of this subsection.

\(3\) The decision to employ non-Federal evaluators or advisors,
including employees of DOE management and operating contractors, in
Source Evaluation Board procurements must be made by the Source
Selection Official with the concurrence of the Head of the Contracting
Activity. In all other procurements, the decision shall be made by the
senior program official or designee with the concurrence of the Head of
the Contracting Activity. In a case where multiple solicitations are
part of a single program and would call for the same resources for
evaluation, a class determination to use non-Federal evaluators may be
made by the DOE Procurement Executive.

\(4\) Where such non-Federal evaluators or advisors are to be used, the
solicitation shall contain a provision informing prospective offerors
that non-Federal personnel may be used in the evaluation of proposals.

\(5\) The nondisclosure agreement as it appears in paragraph (f)(6) of
this subsection shall be signed before DOE furnishes a copy of the
proposal to non-Federal evaluators or advisors, and care should be taken
that the required handling notice described in paragraph (e) of this
subsection is affixed to a cover sheet attached to the proposal before
it is disclosed to the evaluator or advisor. In all instances, such
persons will be required to comply with nondisclosure of information
requirements and requirements involving Procurement Integrity, see FAR
3.104; with requirements to prevent the potential for personal conflicts
of interest; or, where a non-Federal evaluator or advisor is acquired
under a contract with an entity other than the individual, with
requirements to prevent the potential for organizational conflicts of
interest.

\(6\) Non-Federal evaluators or advisors shall be required to sign the
following agreement prior to having access to any proposal:

**Nondisclosure Agreement**

> Whenever DOE furnishes a proposal for evaluation, I, the recipient,
> agree to use the information contained in the proposal only for DOE
> evaluation purposes and to treat the information obtained in
> confidence. This requirement for confidential treatment does not apply
> to information obtained from any source, including the proposer,
> without restriction. Any notice or restriction placed on the proposal
> by either DOE or the originator of the proposal shall be conspicuously
> affixed to any reproduction or abstract thereof and its provisions
> strictly complied with. Upon completion of the evaluation, it is
> agreed all copies of the proposal and abstracts, if any, shall be
> returned to the DOE office which initially furnished the proposal for
> evaluation. Unless authorized by the Contracting Officer, I agree that
> I shall not contact the originator of the proposal concerning any
> aspect of its elements.
>
> Recipient:
>
> Date:
>
> (End of Agreement)

\(g\) The submitter of any proposal shall be provided notice adequate to
afford an opportunity to take appropriate action before release of any
information (data) contained therein pursuant to a request under the
Freedom of Information Act (5 U.S.C. 552); and, time permitting, the
submitter should be consulted to obtain assistance in determining the
eligibility of the information (data) in question as an exemption under
the Act. (See also 48 CFR 24.2, Freedom of Information Act.) \[Final
rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.305 Proposal evaluation \[DOE coverage paragraph (d)\].**

\(d\) Personnel from DOE, other Government agencies, consultants, and
contractors, including those who manage or operate Government-owned
facilities, may be used in the evaluation process as evaluators or
advisors when their services are necessary and available. When personnel
outside the Government, including those of contractors who operate or
manage Government-owned facilities, are to be used as evaluators or
advisors, approval and nondisclosure procedures as required by 48 CFR
(DEAR) 915.207-70 shall be followed and a notice of the use of
non-Federal evaluators shall be included in the solicitation. In all
instances, such personnel will be required to comply with DOE conflict
of interest and nondisclosure requirements. \[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**915.404-2 Information to support proposal analysis \[DOE coverage
paragraphs (a), (c) and (e)\].**

(a)(1) Field pricing assistance as discussed in FAR 15.404-2 (a) is not
required for the negotiation of DOE contract prices or modifications
thereof. The term "field pricing assistance" refers to the Department of
Defense (DOD) system for obtaining a price and/or cost analysis report
from a cognizant DOD field level contract management office wherein
requests for the review of a proposal submitted by an offeror are
initiated and the recommendations made by the various specialists of the
management office are consolidated into a single report that is
forwarded to the office making the contract award for use in conducting
negotiations. In the DOE, such review activities, except for reviews
performed by professional auditors, are expected to be accomplished by
pricing support personnel located in DOE Contracting Activities. The DOE
contracting officer shall formally request the assistance of appropriate
pricing support personnel, other than auditors, for the review of any
proposal that exceeds \$500,000, unless the contracting officer has
sufficient data to determine the reasonableness of the proposed cost or
price. Such pricing support may be requested for proposals below
\$500,000, if considered necessary for the establishment of a reasonable
pricing arrangement. Contracting officers, however, are not precluded by
this section from requesting pricing assistance from a cognizant DOD
contract management office, provided an appropriate cross-servicing
arrangement for pricing support services exists between the DOE and the
servicing agency.

(c)(1) When an audit is required pursuant to 48 CFR 915.404-2-70, "Audit
as an aid in proposal analysis," the request for audit shall be sent
directly to the Federal audit office assigned cognizance of the offeror
or prospective contractor. When the cognizant agency is other than the
Defense Contract Audit Agency or the Department of Health and Human
Services, and an appropriate interagency agreement has not been
established, the need for audit assistance shall be coordinated with the
Office of Policy, within the Headquarters procurement organization.

\(2\) The request for audit shall establish the due date for receipt of
the auditor's report and in so doing shall allow as much time as
possible for the auditor's review.

(e)(6) Copies of technical analysis reports prepared by DOE technical or
other pricing support personnel shall not normally be provided to the
auditor. The contracting officer or the supporting price, cost, or
financial analyst at the contracting activity shall determine the
monetary impact of the technical findings.\[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**915.404-2-70 Audit as an aid in proposal analysis.**

\(a\) When a contract price will be based on cost or pricing data
submitted by the offerors, the DOE contracting officer or authorized
representative shall request a review by the cognizant Federal audit
activity prior to the negotiation of any contract or modification
including modifications under advertised contracts in excess of:

\(1\) \$500,000 for a firm fixed-price contract or a fixed-price
contract with economic price adjustment provisions; or adjustment
provisions; or

\(2\) \$1,000,000 for all other contract types, including initial
prices, estimated costs of cost-reimbursement contracts, interim and
final price redeterminations, and target and settlement of incentive
contracts.

\(b\) The requirement for auditor reviews of proposals which exceed the
thresholds specified in paragraph (a) of this section may be waived at a
level above the contracting officer when the reasonableness of the
negotiated contract price can be determined from information already
available. The contract file shall be documented to reflect the reason
for any such waiver, provided, however, that independent Government
estimates of cost or price shall not be used as the sole justification
for any such waiver. \[Final rule, 63 FR 56849, 10/23/98, effective
11/23/98\]

**915.404-4 Profit \[DOE coverage paragraphs (c) and (d)\]**

(c)(4)(i) Contracting officer responsibilities. The statutory
limitations on profit and fees as set forth in FAR 15.404-4 (c)(4)(i)
shall be followed, except as exempted for DOE architect-engineer
contracts covering Atomic Energy Commission (AEC) and Bonneville Power
Administration (BPA) functions. Pursuant to section 602(d) (13) and (20)
of the Federal Property and Administration Services Act of 1949, as
amended, those former AEC functions, as well as those of the BPA, now
being performed by DOE are exempt from the 6 percent of cost restriction
on contracts for architect-engineer services. The estimated costs on
which the maximum fee is computed shall include facilities capital cost
of money when this cost is included in cost estimates.

(c)(6) In cases where a change or modification calls for substantially
different work than the basic contract, the contractor's effort may be
radically changed and a detailed analysis of the profit factors would be
a necessity. Also, if the dollar amount of the change or contract
modification is very significant in comparison to the contract dollar
amount, a detailed analysis should be made.

\(d\) Profit-analysis factors. A profit/fee analysis technique designed
for a systematic application of the profit factors in FAR 15.404-4 (d)
provides contracting officers with an approach that will ensure
consistent consideration of the relative value of the various factors in
the establishment of a profit objective and the conduct of negotiations
for a contract award. It also provides a basis for documentation of this
objective, including an explanation of any significant departure from it
in reaching a final agreement. The contracting officer's analysis of
these prescribed factors is based on information available prior to
negotiations. Such information is furnished in proposals, audit data,
performance reports, preaward surveys and the like. \[Final rule, 63 FR
56849, 10/23/98, effective 11/23/98\]

**915.404-4-70 DOE structured profit and fee system.**

This section implements FAR 15.404-4 (b) and (d). \[Final rule, 63 FR
56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-1 General.**

\(a\) Objective. It is the intent of DOE to remunerate contractors for
financial and other risks which they may assume, resources they use, and
organization, performance and management capabilities they employ.
Profit or fee shall be negotiated for this purpose; however, when profit
or fee is determined as a separate element of the contract price, the
aim of negotiation should be to fit it to the acquisition, giving due
weight to effort, risk, facilities investment, and special factors as
set forth in this subpart.

\(b\) Commercial (profit) organization. Profit or fee prenegotiation
objectives for contracts with commercial (profit) organizations shall be
determined as provided in this subpart.

\(c\) Nonprofit organizations. It is DOE's general policy to pay fees in
contracts with nonprofit organizations other than educational
institutions and governmental bodies; however, it is a matter of
negotiation whether a fee will be paid in a given case. In making this
decision, the DOE negotiating official should consider whether the
contractor is ordinarily paid fees for the type of work involved. The
profit objective should be reasonable in relation to the task to be
performed and the requirements placed on the contractor.

\(d\) Educational institutions. It is DOE policy not to pay fees under
contracts with educational institutions.

\(e\) State, local and Indian tribal governments. Profit or fee shall
not be paid under contracts with State, local, and Indian tribal
Governments. \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-2 Weighted guidelines system.**

\(a\) To properly reflect differences among contracts and the
circumstances relating thereto and to select an appropriate relative
profit/fee in consideration of these differences and circumstances,
weightings have been developed for application by the contracting
officer to standard measurement bases representative of the prescribed
profit factors cited in FAR 15.404-4 (d) and paragraph (d) of this
section. This is a structured system, referred to as weighted
guidelines. Each profit factor or subfactor, or component thereof, has
been assigned weights relative to their value to the contract's overall
effort. The range of weights to be applied to each profit factor is also
set forth in paragraph (d) of this section. Guidance on how to apply the
weighted guidelines is set forth in 48 CFR 915.404-4-70-8.

\(b\) Except as set forth in 48 CFR 915.404-4-70-4, the weighted
guidelines shall be used in establishing the profit objective for
negotiation of contracts where cost analysis is performed.

\(c\) The negotiation process does not contemplate or require agreement
on either estimated cost elements or profit elements. Accordingly,
although the details of analysis and evaluation may be discussed in the
fact-finding phase of the negotiation process in order to develop a
mutual understanding of the logic of the respective positions, specific
agreement on the exact weights of values of the individual profit
factors is not required and need not be attempted.

\(d\) The factors set forth in the following table are to be used in
determining DOE profit objectives. The factors and weight ranges for
each factor shall be used in all instances where the weighted guidelines
are applied.

  ----------------------------------- -----------------------------------
  Profit Factors                      Weight Ranges (percent)

  I. Contractor Effort (Weights       
  applied to cost)                    

  A. Material Acquisitions:           

  1\. Purchased parts                 1 to 3

  2\. Subcontracted items             1 to 4

  3\. Other materials                 1 to 3

  B. Labor skills:                    

  1\. Technical and managerial:       

  a\. Scientific                      10 to 20

  b\. Project                         8 to 20
  management/administration           

  c\. Engineering                     8 to 14

  2\. Manufacturing                   4 to 8

  3\. Support services                4 to 14

  C. Overhead                         

  1\. Technical and managerial        5 to 8

  2\. Manufacturing                   3 to 6

  3\. Support services                3 to 7

  D. Other direct costs               3 to 8

  E. G&A (General Management)         5 to 7
  expenses                            

  II\. Contract Risk (type contract   0 to 8
  -- weights applied to total cost of 
  items IA thru E)                    

  III\. Capital Investment (Weights   5 to 20
  applied to net book value of        
  allocable facilities)               

  IV\. Independent Research and       
  Development                         

  A. Investment in IR&D program       5 to 7
  (Weights applied to allocable IR&D  
  costs)                              

  B. Developed items employed         0 to 20
  (Weights applied to total of profit 
  \$ for items IA thru E)             

  V. Special Program Participation    -5 to +5
  (Weights applied to total of profit 
  \$ for items IA thru E)             

  VI\. Other Considerations (Weights  -5 to +5
  applied to total of profit \$ for   
  items IA thru E)                    

  VII\. Productivity/Performance      (N/A)
  (special computation)               
  ----------------------------------- -----------------------------------

\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-3 Documentation.**

Determination of the profit or fee objective, in accordance with this
subpart shall be fully documented. Since the profit objective is the
contracting officer's pre-negotiation evaluation of a total profit
allowance for the proposed contract, the amounts developed for each
category of cost will probably change in the course of negotiation.
Furthermore, the negotiated amounts will probably vary from the
objective and from the pre-negotiation detailed application of the
weighted guidelines technique to each element of the contractor's input
to total performance. Since the profit objective is viewed as a whole
rather than as its component parts, insignificant variations from the
pre-negotiation profit objective, as a result of changes to the
contractor's input to total performance, need not be documented in
detail. Conversely, significant deviations from the profit objective
necessary to reach a final agreement on profit or fee shall be explained
in the price negotiation memorandum prepared in accordance with FAR
15.406-3. \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-4 Exceptions.**

\(a\) For contracts not expected to exceed \$500,000, the weighted
guidelines need not be used; however, the contracting officer may use
the weighted guidelines for contracts below this amount if he or she
elects to do so.

\(b\) For the following classes of contracts, the weighted guidelines
shall not be used:

\(1\) Commercialization and demonstration type contracts;

\(2\) Management and operating contracts;

\(3\) Construction contracts;

\(4\) Construction management contracts;

\(5\) Contracts primarily requiring delivery of material supplied by
subcontractors;

\(6\) Termination settlements; and

\(7\) Contracts with educational institutions.

\(c\) In addition to paragraphs (a) and (b) of this section, the
contracting officer need not use the weighted guidelines in unusual
pricing situations where the weighted guidelines method has been
determined by the DOE negotiating official to be unsuitable. Such
exceptions shall be justified in writing and shall be authorized by the
Head of the Contracting Activity. The contract file shall include this
documentation and any other information that may support the exception.

\(d\) If the contracting officer makes a written determination that the
pricing situation meets any of the circumstances set forth in this
section, other methods for establishing the profit objective may be
used. For contracts other than those subject to 48 CFR 917.6, the
selected method shall be supported in a manner similar to that used in
the weighted guidelines (profit factor breakdown and documentation of
profit objectives); however, investment or other factors that would not
be applicable to the contract shall be excluded from the profit
objective determination. It is intended that the methods will result in
profit objectives for noncapital intensive contracts that are below
those generally developed for capital intensive contracts. \[Final rule,
63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-5 Special considerations - contracts with nonprofit
organizations (other than educational institutions).**

\(a\) For purposes of identification, nonprofit organizations are
defined as those business entities organized and operated exclusively
for charitable, scientific, or educational purposes, of which no part of
the net earnings inure to the benefit of any private shareholder or
individual, of which no substantial part of the activities is attempting
to influence legislation or participating in any political campaign on
behalf of any candidate for public office, and which are exempt from
Federal income taxation under section 501 of the Internal Revenue Code.

\(b\) In computing the amount of profit or fee to be paid, the DOE
negotiating official shall take into account the tax benefits received
by a nonprofit organization. While it is difficult to establish the
degree to which a remuneration under any given contract contributes to
an organization's overall net profit, the DOE negotiating official
should assume that there is an element of profit in any amount to be
paid.

\(c\) In order to assure consideration of the tax posture of nonprofit
organizations during a profit or fee negotiation, the DOE negotiating
official shall calculate the fee as for a contract with a commercial
concern and then reduce it at least 25 percent. However, depending on
the circumstances, the contracting officer may pay profit or fees
somewhere between this amount and the appropriate profit or fee as if it
were a commercial concern. When this is the case, the contract file
shall be documented to specifically state the reason or reasons.

\(d\) Where a contract with a nonprofit organization is for the
operation of Government-owned facilities, the fee should be calculated
using the procedures and schedules applicable to operating contracts as
set forth in 48 CFR part 970. \[Final rule, 63 FR 56849, 10/23/98,
effective 11/23/98\]

**915.404-4-70-6 Contracts with educational institutions.**

In certain situations the DOE may contract with a university to manage
or operate Government-owned laboratories. These efforts are generally
apart from, and not in conjunction with, their other activities, and the
complexity and magnitude of the work are not normally found in standard
university research or study contracts. Such operating contracts are
subject to the applicable provisions set forth in 48 CFR part 970.
\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-70-7 Alternative techniques.**

\(a\) Profit or fees to be paid on construction contracts and
construction management contracts shall be determined in accordance with
the applicable profit/fee technique for such contracts set forth in 48
CFR 915.404-4-71.

\(b\) Profit and fee to be paid on contracts under \$500,000, not using
the weighted guidelines, shall be judgmentally developed by the
contracting officer by assigning individual dollar amounts to the
factors appropriate to DOE profit considerations discussed in 48 CFR
915.404-4-70-2(d).

\(c\) Contracts which require only delivery or furnishing of goods or
services supplied by subcontractors shall include a fee or profit which,
in the best judgment of the contracting officer, is appropriate. It
would be expected that there would be a declining relationship of
profit/fee dollars in relation to total costs. The higher the cost of
subcontracts, for example, the lower the profit/fee ratio to these
costs.

\(d\) Profit/Fee considerations in termination settlements are often a
question of equity. They are a matter of negotiation. They should not,
however, exceed what would have otherwise been payable under weighted
guidelines had the termination not occurred. \[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**915.404-4-70-8 Weighted guidelines application considerations.**

The Department has developed internal procedures to aid the contracting
officer in the application of weighted guidelines and to assure a
reasonable degree of uniformity across the Department. \[Final rule, 63
FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-71 Profit and fee-system for construction and construction
management contracts. (No Text)**

\[Reserved.\]

**915.404-4-71-1 General.**

\(a\) Business concerns awarded a DOE construction or construction
management contract shall be paid a profit or fee if requested or
solicited. The profit or fee objective for a construction or
construction management contract shall be an amount appropriate for the
type of effort contained therein. It is the intent of DOE to

\(1\) Reward contractors based on the complexity of work,

\(2\) Reward contractors who demonstrate and establish excellent records
of performance and

\(3\) Reward contractors who contribute their own resources, including
facilities and investment of capital.

\(b\) Standard fees or across-the-board agreements will not be used or
made. Profit or fee objectives are to be determined for each contract
according to the effort or task contracted for thereunder.

\(c\) Profit or fee payable on fixed-price and cost-reimbursable
construction or construction management contracts shall be established
in accordance with the appropriate procedures and schedules set forth in
this subpart. \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-71-2 Limitations.**

Amounts payable under construction and construction management contracts
shall not exceed amounts derived from the schedules established for this
purpose. Requests to pay fees in excess of these levels shall be
forwarded to the Procurement Executive for review and approval. \[Final
rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-71-3 Factors for determining fees.**

\(a\) The profit policy stated in 48 CFR 915.404-4-71-1(a) reflects, in
a broad sense, recognition that profit is compensation to contractors
for the entrepreneurial function of organizing and managing resources
(including capital resources), and the assumption of risk that all costs
of performance (operating and capital) may not be reimbursable.

\(b\) The best approach calls for a structure that allows judgmental
evaluation and determination of fee dollars for prescribed factors which
impact the need for, and the rewards associated with, fee or profit, as
follows.

\(1\) Management risk relating to performance, including the

\(i\) Quality and diversity of principal work tasks required to do the
job,

\(ii\) Labor intensity of the job,

\(iii\) Special control problems, and

\(iv\) Advance planning, forecasting and other such requirements;

\(2\) The presence or absence of financial risk, including the type and
terms of the contract;

\(3\) The relative difficulty of work, including consideration of
technical and administrative knowledge, skill, experience and clarity of
technical specifications;

\(4\) Degree and amount of contract work required to be performed by and
with the contractor's own resources, including the extent to which the
contractor contributes plant, equipment, computers, or working capital
(labor, etc.);

\(5\) Duration of project;

\(6\) Size of operation;

\(7\) Benefits which may accrue to the contractor from gaining
experience and know-how, from establishing or enhancing a reputation, or
from being enabled to hold or expand a staff whose loyalties are
primarily to the contractor; and

\(8\) Other special considerations, including support of Government
programs such as those relating to small, small disadvantaged, and
women-owned small business in subcontracting, energy conservation, etc.

\(c\) The total fee objective and amount for a particular negotiation is
established by judgmental considerations of the factors in paragraph (b)
of this section, assigning fee values as deemed appropriate for each
factor and totaling the resulting amounts.

\(d\) In recognition of the complexities of this process, and to assist
in promoting a reasonable degree of consistency and uniformity in its
application, fee schedules have been developed which set forth maximum
fee amounts that contracting activities are allowed to negotiate for a
particular transaction without obtaining prior approval of the
Procurement Executive. In addition, the fee negotiation objective
established in accordance with 48 CFR 915.404-4-71-3(a), (b), and (c)
shall not exceed the applicable fee schedule amounts without prior
approval of the Procurement Executive. To facilitate application to a
contract, the fee amounts are related to the total cost base which is
defined as total operating and capital costs. \[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**915.404-4-71-4 Considerations affecting fee amounts.**

\(a\) In selecting final fee amounts for the various factors in 48 CFR
915.404-4-71-3 of this section, the DOE negotiating official will have
to make several judgments as discussed in this subsection.

\(b\) Complexity of a construction project shall be considered by
analysis of its major parts. For a project which includes items of work
of different degrees of complexity, a single average classification
should be considered, or the work should be divided into separate
classifications. The following class identifications are appropriate for
proper fee determinations.

\(1\) Class A - Manufacturing plants involving operations requiring a
high degree of design layout or process control; nuclear reactors;
atomic particle accelerators; complex laboratories or industrial units
especially designed for handling radioactive materials.

\(2\) Class B - Normal manufacturing processes and assembly operations
such as ore dressing, metal working plant and simple processing plants;
power plants and accessory switching and transformer stations; water
treatment plants; sewage disposal plants; hospitals; and ordinary
laboratories.

\(3\) Class C - Permanent administrative and general service buildings,
permanent housing, roads, railroads, grading, sewers, storm drains, and
water and power distribution systems.

\(4\) Class D - Construction camps and facilities and other construction
of a temporary nature.

\(c\) Normal management elements of principal tasks relating to a
construction contract cover several categories of tasks with differing
rates of application throughout the construction period. The principal
elements of management effort are outlined in this paragraph. Although
each project has a total management value equal to 100% for all
elements, the distribution of effort among the various elements will be
different for each project due to differences in project character or
size. The basic management elements and the normal range of efforts
expected to apply for a normal sized project are as follows. When the
normally expected effort will not be performed by a contractor, this
fact should be considered in arriving at appropriate fee amounts.

+------------------------------------------+-------------+-------------+
|                                          | Range of    |             |
|                                          | Effort      |             |
+------------------------------------------+-------------+-------------+
| MANAGEMENT ELEMENTS                      | Minimum     | Maximum     |
|                                          | Effort      | Effort      |
+------------------------------------------+-------------+-------------+
| I. Broad project planning. Overall       | 15          | 25          |
| project planning and scheduling,         |             |             |
| establishment of key project             |             |             |
| organization and consultation with the A |             |             |
| E and DOE. Performed by highest level of |             |             |
| contractor's officers, technical         |             |             |
| personnel and project manager            |             |             |
+------------------------------------------+-------------+-------------+
| II\. Field planning. Mobilization and    | 18          | 28          |
| demobilization of top field organization |             |             |
| from the contractor's existing           |             |             |
| organization and from other sources as   |             |             |
| necessary. Detailed project planning and |             |             |
| scheduling for construction of           |             |             |
| facilities. Performed by the project     |             |             |
| manager and top field professional staff |             |             |
+------------------------------------------+-------------+-------------+
| III\. Labor supervision. Direct          | 12          | 16          |
| supervision of manual employees.         |             |             |
| Performed by contractor's                |             |             |
| subprofessional staff, such as           |             |             |
| superintendents and foremen (some        |             |             |
| salaried and some hourly rate). This     |             |             |
| includes the contractor's                |             |             |
|                                          |             |             |
| personnel to coordinate and expedite the |             |             |
| work                                     |             |             |
|                                          |             |             |
| of Subcontractors                        |             |             |
+------------------------------------------+-------------+-------------+
| IV\. Acquisition and subcontracting.     | 12          | 16          |
| Acquisition of                           |             |             |
|                                          |             |             |
| other than special equipment. Selection  |             |             |
| of subcontractors and execution and      |             |             |
| administration of subcontracts.          |             |             |
| Performed by contractor's staff under    |             |             |
| supervision and                          |             |             |
|                                          |             |             |
| direction of elements I and II           |             |             |
+------------------------------------------+-------------+-------------+
| V. Labor relations and recruitment       | 7           | 11          |
| (manual). Performed by the contractor's  |             |             |
| staff under supervision and direction of |             |             |
| elements I, II and III. This includes    |             |             |
| demobilization of work forces.           |             |             |
+------------------------------------------+-------------+-------------+
| VI\. Recruitment of supervisory staff.   | 4           | 6           |
| Staffing required to supplement the      |             |             |
| organization under elements I and II,    |             |             |
| and demobilization during completion of  |             |             |
| the project. Performed by contractor's   |             |             |
| permanent staff and recruitment          |             |             |
| personnel under supervision and          |             |             |
| direction of                             |             |             |
|                                          |             |             |
| management elements I and II             |             |             |
+------------------------------------------+-------------+-------------+
| VII\. Expediting. Expediting contracting | 4           | 6           |
| performed                                |             |             |
|                                          |             |             |
| by contractor's staff and by             |             |             |
| subcontractors.                          |             |             |
|                                          |             |             |
| Performed by contractor's staff under    |             |             |
|                                          |             |             |
| supervision and direction of elements I  |             |             |
| and II                                   |             |             |
+------------------------------------------+-------------+-------------+
| VIII\. Construction equipment            | 4           | 6           |
| operations. This includes mobilization   |             |             |
| and demobilization. Performed by         |             |             |
| contractor's staff under supervision,    |             |             |
| direction and coordination of elements   |             |             |
| I, II, and IV                            |             |             |
+------------------------------------------+-------------+-------------+
| IX\. Other services. Timekeeping, cost   | 4           | 6           |
| accounting,                              |             |             |
|                                          |             |             |
| estimating, reporting, security, etc.,   |             |             |
| by the contractor's staff under          |             |             |
| supervision and direction of elements I  |             |             |
| and II                                   |             |             |
+------------------------------------------+-------------+-------------+

\(d\) Fee considerations dealing with the duration of a project are
usually provided by the consideration given to the degree of complexity
and magnitude of the work. In only very unusual circumstances should it
be necessary to separately weight, positively or negatively, for the
period of services or length of time involved in the project when
determining fee levels.

\(e\) The size of the operation is to a considerable degree a
continuation of the complexity factor, and the degree and amount of work
required to be performed by and with the contractor's own resources.
Generally, no separate weighting, positively or negatively, is required
for consideration of those factors.

\(f\) The degree and amount of work required to be performed by and with
the contractor's own resources affect the level of fees. Reasonable fees
should be based on expectations of complete construction services
normally associated with a construction or construction management
contract. In the case of a construction contract, reduced services can
be in the form of excessive subcontracting or supporting acquisition
actions and labor relations interfaces being made by the government. If
an unusual amount of such work is performed by other than the
contractor, it will be necessary to make downward adjustments in the fee
levels to provide for the reduction in services required.

\(g\) The type of contract to be negotiated and the anticipated
contractor cost risk shall be considered in establishing the appropriate
fee objective for the contract.

\(h\) When a contract calls for the contractor to use its own resources,
including facilities and equipment, and to make its own cost investment
(i.e., when there is no letter-of-credit financing), a positive impact
on the fee amount shall be reflected. \[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**915.404-4-71-5 Fee schedules.**

\(a\) The schedules included in this paragraph, adjusted in accordance
with provisions of this section and 48 CFR 915.404-4-71-6, provide
maximum fee levels for construction and construction management
contracts. The fees are related to the estimated cost (fee base) for the
construction work and services to be performed. The schedule in
paragraph (d) of this section sets forth the basic fee schedule for
construction contracts. The schedule in paragraph (f) of this section
sets forth the basic fee schedule for construction management contracts.
A separate schedule in paragraph (h) of this section has been developed
for determining the fee applicable to special equipment purchases and to
reflect a differing level of fee consideration associated with the
subcontractor effort under construction management contracts. (See 48
CFR 915.404-4-71-6(c) and 915.404-4-71-6(d)).

\(b\) The schedules cited in paragraph (a) of this section provide the
maximum fee amount for a CPFF contract arrangement. If a fixed-price
type contract is to be awarded, the fee amount set forth in the fee
schedules shall be increased by an amount not to exceed 4 percent of the
fee base.

\(c\) The fee schedule shown in paragraphs (d) and (f) of this section
assumes a letter of credit financing arrangement. If a contract provides
for or requires the contractor to make their own cost investment for
contract performance (i.e., when there is no letter-of-credit
financing), the fee amounts set forth in the fee schedules shall be
increased by an amount equal to 5 percent of the fee amount as
determined from the schedules.

\(d\) The following schedule sets forth the base for construction
contracts:

  ---------------------- --------------- ---------------- -----------------
  Construction Contracts                                  
  Schedule                                                

  Fee Base (dollars)     Fee (dollars)   Fee (percent)    Incr. (percent)

  Up to \$1,000,000      ............    .............    5.47

  1,000,000              54,700          5.47             3.88

  3,000,000              132,374         4.41             3.28

  5,000,000              198,014         3.96             2.87

  10,000,000             341,328         3.41             2.60

  15,000,000             471,514         3.14             2.20

  25,000,000             691,408         2.77             1.95

  40,000,000             984,600         2.46             1.73

  60,000,000             1,330,304       2.22             1.56

  80,000,000             1,643,188       2.05             1.41

  100,000,000            1,924,346       1.92             1.26

  150,000,000            2,552,302       1.70             1.09

  200,000,000            3,094,926       1.55             0.80

  300,000,000            3,897,922       1.30             0.68

  400,000,000            4,581,672       1.15             0.57

  500,000,000            5,148,364       1.03             ....

  Over \$500,000,000     5,148,364       ....             0.57
  ---------------------- --------------- ---------------- -----------------

\(e\) When using the Construction Contracts Schedule for establishing
maximum payable basic fees, the following adjustments shall be made to
the Schedule fee amounts for complexity levels, excessive
subcontracting, normal contractor services performed by the government
or another contractor:

\(1\) The target fee amounts, set forth in the fee schedule, shall not
be adjusted for a Class A project, which is maximum complexity. A Class
B project requires a 10 percent reduction in amounts. Class C and D
projects require a 20 percent and 30 percent reduction, respectively.
The various classes are defined in 48 CFR 915.404-4-71-4(b).

\(2\) The target fee schedule provides for 45 percent of the contract
work to be subcontracted for such things as electrical and other
specialties. Excessive subcontracting results when such efforts exceed
45 percent of the total contract work. To establish appropriate fee
reductions for excessive subcontracting, the negotiating official should
first determine the amount of subcontracting as a percentage of the
total contract work. Next, the negotiating official should determine a
percentage by which the prime contractor's normal requirement (based on
a requirement for doing work with its own forces) is reduced due to the
excessive subcontracting and, finally, multiply the two percentages to
determine a fee reduction factor.

\(3\) If acquisition or other services normally expected of the
contractor (see 48 CFR 915.404-4-71-4(c)) are performed by the
government, or another DOE prime or operating contractor, a fee
reduction may also be required. The negotiating official should first
determine what percentage of the total procurement or other required
services is performed by others. Then the negotiating official should
apply this percentage reduction to the normally assigned weightings for
the management services or effort as discussed in 48 CFR
915.404-4-71-4(c) to arrive at the appropriate reduction factor.

\(f\) The following schedule sets forth the base for construction
management contracts:

  ---------------------- --------------- ---------------- -----------------
  Construction                                            
  Management Contracts                                    
  Schedule                                                

  Fee Base (dollars)     Fee (dollars)   Fee (percent)    Incr. (percent)

  Up to \$1,000,000      ............    .............    5.47

  1,000,000              54,700          5.47             3.88

  3,000,000              132,374         4.41             3.28

  5,000,000              198,014         3.96             2.87

  10,000,000             341,328         3.41             2.60

  15,000,000             471,514         3.14             2.20

  25,000,000             691,408         2.77             1.95

  40,000,000             984,600         2.46             1.73

  60,000,000             1,330,304       2.22             1.56

  80,000,000             1,643,188       2.05             1.41

  100,000,000            1,924,346       1.92             1.26

  150,000,000            2,552,302       1.70             1.09

  200,000,000            3,094,926       1.55             0.80

  300,000,000            3,897,922       1.30             0.68

  400,000,000            4,581,672       1.15             0.57

  500,000,000            5,148,364       1.03             ....

  Over \$500,000,000     5,148,364       ....             0.57
  ---------------------- --------------- ---------------- -----------------

\(g\) When applying the basic Construction Management Contracts Schedule
for determining maximum payable fees, no adjustments are necessary to
such payable fees for contractor Force account labor used for work which
should otherwise be subcontracted until such Force account work exceeds,
in the aggregate, 20 percent of the base. Excessive use of Force account
work results when such effort exceeds 20 percent of the fee base; and,
when this occurs, appropriate fee reductions for such excessive Force
account labor shall be computed as follows:

\(1\) Determine the percentage amount of Force account work to total
contractor effort.

\(2\) Determine the percentage amount of subcontract work reduced due to
the use of Force account work.

\(3\) Multiply the two percentages to determine the fee reduction
factor. It is not expected that reductions in the Construction
Management Contracts Schedule fee amounts will be made for complexity,
reduced requirements and similar adjustments as made for construction
contracts.

\(h\) The schedule of fees for consideration of special equipment
purchases and for consideration of the subcontract program under a
construction management contract is as follows:

  ----------------------- --------------- ---------------- -----------------
  Special Equipment                                        
  Purchases/Subcontract                                    
  Work Schedule                                            

  Fee Base (dollars)      Fee (dollars)   Fee (percent)    Incr. (percent)

  Up to \$1,000,000       ............    .............    1.64

  1,000,000               16,410          1.64             1.09

  2,000,000               27,350          1.37             0.93

  4,000,000               45,948          1.15             0.77

  6,000,000               61,264          1.02             0.71

  8,000,000               75,486          0.94             0.66

  10,000,000              88,614          0.89             0.61

  15,000,000              119,246         0.79             0.53

  25,000,000              171,758         0.69             0.47

  40,000,000              242,868         0.61             0.43

  60,000,000              329,294         0.55             0.39

  80,000,000              406,968         0.51             0.37

  100,000,000             480,266         0.48             0.28

  150,000,000             619,204         0.41             0.23

  200,000,000             732,980         0.37             0.13

  300,000,000             867,542         0.29             ....

  Over \$300,000,000      867,542         ....             0.13
  ----------------------- --------------- ---------------- -----------------

\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98; Final rule, 64
FR 12220, 3/11/99, effective 4/12/99\]

**915.404-4-71-6 Fee base.**

\(a\) The fee base shown in the Construction Contracts Schedule and
Construction Management Contracts Schedule represents that estimate of
cost to which a percentage factor is applied to determine maximum fee
allowances. The fee base is the estimated necessary allowable cost of
the construction work or other services which are to be performed. It
shall include the estimated cost for, but is not limited to, the
following as they may apply in the case of a construction or
construction management contract:

\(1\) Site preparation and utilities.

\(2\) Construction (labor-materials-supplies) of buildings and auxiliary
facilities.

\(3\) Construction (labor-materials-supplies) to complete/construct
temporary buildings.

\(4\) Design services to support the foregoing.

\(5\) General management and job planning cost.

\(6\) Labor supervision.

\(7\) Procurement and acquisition administration.

\(8\) Construction performed by subcontractors.

\(9\) Installation of government furnished or contractor acquired
special equipment and other equipment.

\(10\) Equipment (other than special equipment) which is to become
Government property (including a component of Government property).

\(b\) The fee base for the basic fee determination for a construction
contract and construction management contract shall include all
necessary and allowable costs cited in paragraph (a) of this section as
appropriate to the type of contract; except, any home office G&A expense
paid as a contract cost per cost principle guidance and procedures shall
be excluded from the fee base. The fee base shall exclude:

\(1\) Cost of land.

\(2\) Cost of engineering (A&E work).

\(3\) Contingency estimate.

\(4\) Equipment rentals or use charges. (See 48 CFR 936.70.)

\(5\) Cost of government furnished equipment or materials.

\(6\) Special equipment as defined in 48 CFR 936.7201.

\(c\) A separate fee base shall be established for special equipment for
use in applying the Special Equipment Purchases or Subcontract Work
Schedule (see 48 CFR 915.404-4-71-5(h)). The fee base for determination
of applicable fees on special equipment shall be based on the estimated
purchase price of the equipment.

\(d\) The fee base under the Construction Management Contracts Schedule
for a maximum basic fee determination for a construction management
contract shall be comprised of only the costs of the construction
manager's own efforts. However, it is recognized that in the case of
construction management contracts, the actual construction work will be
performed by subcontractors. In most cases the subcontract awards for
the construction work will be made by the construction management
contractor. Occasionally the contract may involve management of
construction performed under a contract awarded by the Department or by
one of the Department's operating contractors. In these cases, the
actual cost of the subcontracted construction work shall be excluded
from the fee base used to determine the maximum basic fee (under the
Construction Management Contracts Schedule) applicable to a construction
management contract. A separate fee base for additional allowances
(using the Special Equipment Purchases or Subcontract Work Schedule)
shall be established, which shall be comprised of those subcontract
construction costs, special equipment purchases, and other items' costs
that are contracted for or purchased by the construction manager.
\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.404-4-72 Special considerations for cost-plus-award-fee
contracts.**

\(a\) When a contract is to be awarded on a cost-plus-award-fee basis
several special considerations are appropriate. Fee objectives for
management and operating contracts or other contracts as determined by
the Procurement Executive, including those using the Construction,
Construction Management, or Special Equipment Purchases/Subcontract Work
schedules from 48 CFR 915.404-4-71-5, shall be developed pursuant to the
procedures set forth in 48 CFR 970.15404-4-8. Fee objectives for other
cost-plus-award-fee contracts shall be in accordance with 48 CFR
916.404-2 and be developed as follows:

\(1\) The base fee portion of the fee objective of an award fee contract
may range from 0% up to the 50% level of the fee amount for a
Cost-Plus-Fixed-Fee (CPFF) contract, arrived at by using the weighted
guidelines or other techniques (such as those provided in 48 CFR
915.404-4-71 for construction and construction management contracts).
However, the base amount should not normally exceed 50% of the otherwise
applicable fixed fee. In the event this 50% limit is exceeded,
appropriate documentation shall be entered into the contract file. In no
event shall the base fee exceed 60% of the fixed fee amount.

\(2\) The base fee plus the amount included in the award fee pool should
normally not exceed the fixed fee (as subjectively determined or as
developed from the fee schedule) by more than 50%. However, in the event
the base fee is to be less than 50% of the fixed fee, the maximum
potential award fee may be increased proportionately with the decreases
in base fee amounts.

\(3\) The following maximum potential award fees shall apply in award
fee contracts: (percent is stated as percent of fee schedule amounts).

  ----------------------- ----------------------- -----------------------
  Award Fee Schedule                              

  Base Fee Percent        Award Fee Percent       Maximum Total
                                                  Percentage

  50                      100                     150

  40                      120                     160

  30                      140                     170

  20                      160                     180

  10                      180                     190

  0                       200                     200
  ----------------------- ----------------------- -----------------------

\(b\) Prior approval of the Procurement Executive, is required for total
fee (base plus award fee pool) exceeding the guidelines in 48 CFR
915.404-4-72(a)(3). \[Final rule, 63 FR 56849, 10/23/98, effective
11/23/98; Final rule, 64 FR 12220, 3/11/99, effective 4/12/99\]

**915.408-70 Solicitation provision and contract clause.**

The contracting officer (after deleting "under the clause at 48 CFR
970.5203-3, Contractor's Organization" from paragraph (a) if not a
management and operating contract) shall insert the clause at 48 CFR
952.215-70, Key Personnel, in contracts under which performance is
largely dependent on the expertise of specific key personnel. \[Final
rule, 65 FR 80994, 12/22/2000, effective 1/22/2001\]

**915.602 Policy.**

\(a\) Present and future needs demand the involvement of all resources
in exploring alternative energy sources and technologies. To achieve
this objective, it is DOE policy to encourage external sources of unique
and innovative methods, approaches, and ideas by stressing submission of
unsolicited proposals for government support. In furtherance of this
policy and to ensure the integrity of the acquisition process through
application of reasonable controls, the DOE:

\(1\) Disseminates information on areas of broad technical concern whose
solutions are considered relevant to the accomplishment of DOE's
assigned mission areas;

\(2\) Encourages potential proposers to consult with program personnel
before expending resources in the development of written unsolicited
proposals;

\(3\) Endeavors to distribute unsolicited proposals to all interested
organizations within DOE;

\(4\) Processes unsolicited proposals in an expeditious manner and,
where practicable, keeps proposers advised as discrete decisions are
made;

\(5\) Assures that each proposal is evaluated in a fair and objective
manner; and, (6) Assures that each proposal will be used only for its
intended purpose and the information, subject to applicable laws and
regulations, contained therein will not be divulged without prior
permission of the proposer.

\(b\) Extensions of contract work resulting from unsolicited proposals
shall be processed in accordance with the procedures at 48 CFR 943.170.
\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.603 General. \[DOE coverage-paragraph (e)\].**

\(e\) Unsolicited proposals for the performance of support services are,
except as discussed in this paragraph, unacceptable as the performance
of such services is unlikely to necessitate innovative and unique
concepts. There may be rare instances in which an unsolicited proposal
offers an innovative and unique approach to the accomplishment of a
support service. If such a proposal offers a previously unknown or an
alternative approach to generally recognized techniques for the
accomplishment of a specific service(s) and such approach will provide
significantly greater economy or enhanced quality, it may be considered
for acceptance. Such acceptance shall, however, require approval of the
acquisition of support services in accordance with applicable DOE
Directives and be processed as a deviation to the prohibition in this
paragraph. \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.605 Content of unsolicited proposals. \[DOE coverage-paragraph
(b)\].**

(b)(5) Unsolicited proposals for nonnuclear energy demonstration
activities not covered by existing formal competitive solicitations or
program opportunity notices may include a request for federal assistance
or participation, and shall be subject to the cost sharing provisions of
48 CFR 917.70. \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**915.606 Agency procedures \[DOE coverage-paragraph (b)\].**

\(b\) Unless otherwise specified in a notice of program interest, all
unsolicited proposals should be submitted to the Unsolicited Proposal
Coordinator, U.S. Department of Energy, National Energy Technology
Laboratory (PGH), Pittsburgh, PA 15236-0940. If the proposer has
ascertained the cognizant program office through preliminary contacts
with program staff, the proposal may be submitted directly to that
office. In such instances, the proposer should separately send a copy of
the proposal cover letter to the unsolicited proposal coordinator to
assure that the proposal is logged in the Department's automated
tracking system for unsolicited proposals. \[Final rule, 63 FR 56849,
10/23/98, effective 11/23/98; Final rule, 67 FR 14869, 3/28/2002,
effective 4/29/2002\]

**915.607 Criteria for acceptance of an unsolicited proposal \[DOE
coverage paragraph (c)\].**

\(c\) DOE's cost participation policy, at 48 CFR 917.70, shall be
followed in determining the extent to which the DOE will participate in
the cost for the proposed effort.

\[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**PART 916** --- **TYPES OF CONTRACTS**

**916.2 --- Fixed-Price Contracts**

916.203 Fixed-price contracts with economic price adjustments.

916.203-4 Contract clauses.

**Subpart 916.3** --- **Cost-Reimbursement Contracts**

916.306 Cost-plus-fixed-fee contracts.

916.307 Contract clauses.

**Subpart 916-4** --- **Incentive Contracts.**

916.404-2 Cost-plus-award-fee contracts.

**Subpart 916.5** --- **Indefinite-Delivery Contracts**

916.504 Indefinite-delivery contracts.

916.505 Ordering.

**Subpart 916.6 --- Time-and-materials contracts, Labor-Hour, and Letter
Contracts**

916.601 Time and Materials \[(DOE coverage (c)\].

AUTHORITY: 42 U.S.C. 7254; 40 U.S.C. 486(c).

SOURCE: 49 FR 11974, Mar. 28, 1984; unless otherwise noted.

**Subpart 916.2 --- Fixed-Price Contracts**

**916.203 Fixed-price contracts with economic price adjustments.**

**916.203-4 Contract clauses.**

(d)(2) The Head of the Contracting Activity, or designee, for contracts
estimated to be within the limits of their delegated authority, may
approve the use of an economic price adjustment clause when appropriate
in accordance with (FAR) 48 CFR 16.203-4. \[Final rule, 59 FR 9102,
2/25/94, effective 4/26/94\]

**Subpart 916.3** --- **Cost-Reimbursement Contracts**

**916.306 Cost-plus-fixed-fee contracts.**

(c)(2) The Head of the Contracting Activity, or designee, for contracts
estimated to be within their delegated authority, may approve (sign) the
determination and findings establishing the basis for application of the
statutory price or fee limitations. \[Final rule, 59 FR 9102, 2/25/94,
effective 4/26/94\]

**916.307 Contract clauses.**

\(j\) The contracting officer shall insert the clause at [FAR
52.216-15]{.underline} , Predetermined Indirect Cost Rates, modified as
specified in 952.216-15 in solicitations and contracts when a
cost-reimbursement research and development contract with a State or
local government is contemplated and predetermined indirect cost rates
are to be used.

**Subpart 916.4 --- Incentive Contracts.**

**916.404 Cost-reimbursement incentive contracts.**

\[Reserved.\]

**916.404-2 Cost-plus-award-fee contracts.**

\(d\) *Fee Determination Plans.* Award fee arrangements limited to
technical performance considerations are prohibited because they may
increase cost disproportionately to any benefits gained. Instead, the
award fee arrangement shall include both technical performance
(including scheduling as appropriate) and business management
considerations tailored to the needs of the particular situation. In
addition, in a situation where cost estimating reliability and other
factors are such that the negotiation of a separate predetermined
incentive sharing arrangement applicable to cost performance is
determined both feasible and advantageous, cost incentives may be added.
The resulting contract would then be identified as a
cost-plus-incentive-fee/award-fee combination type. The goals and
evaluation criteria should be results-oriented. The award fee should be
concentrated on the end product of the contract, that is, output, be it
hardware, research and development, demonstration or services, together
with business management considerations. However, input criteria such as
equal employment opportunity, small business programs, functional
management areas, such as safety, security, etc., should not be
disregarded and may be appropriate criteria upon which to base some part
of the award fee. Specific goals or objectives shall be established in
relation to each performance evaluation criterion against which
contractor performance is measured. \[Final rule, 59 FR 9102, 2/25/94,
effective 4/26/94\]

**Subpart 916.5** --- **Indefinite-Delivery Contracts**

**DEAR 916.504 Indefinite-quantity contracts (DOE coverage-paragraph
(c)).**

\(c\) The contracting officer shall establish minimum ordering
guarantees with each awardee for all indefinite-quantity, multiple award
contracts to ensure that adequate consideration exists to contractually
bind each awardee to participate in the ordering process throughout the
term of the multiple award contract. Minimum ordering guarantees should
be equal among all awardees, and shall be determined on a case-by-case
basis for each acquisition commensurate with the size, scope and
complexity of the contract requirements. \[Final rule, 62 FR 53754,
10/16/97, effective 11/17/97\]

**916.505 Ordering \[DOE coverage paragraph (b)\].**

\(b\) (4) The Director, Office of Management Systems, Office of
Procurement and Assistance Management, is designated as the DOE
Ombudsman for task and delivery order contracts in accordance with 48
CFR 16.505(b)(4).

\(5\) The Heads of Contracting Activities shall designate a senior
manager to serve as the Contracting Activity Ombudsman for task and
delivery order contracts. If, for any reason, the Contracting Activity
Ombudsman is unable to execute the duties of the position, the Head of
the Contracting Activity shall designate an Acting Contracting Activity
Ombudsman.

\(6\) The Contracting Activity Ombudsman shall:

\(i\) Be independent of the contracting officer who awarded and/or is
administering the contract under which a complaint is submitted;

\(ii\) Not assume any duties and responsibilities pertaining to the
evaluation or selection of an awardee for the issuance of an order under
a multiple award, task or delivery order contract;

\(iii\) Review complaints from contractors awarded a task or delivery
order contract;

\(iv\) Collect all facts from the cognizant organizations or individuals
that are relevant to a complaint submitted to ensure that the
complainant and all contractors were afforded a fair opportunity to be
considered for the order issued in accordance with the procedures set
forth in each awardees\' contract;

\(v\) Maintain a written log to track each complaint submitted from
receipt through disposition;

\(vi\) Ensure that no information is released which is determined to be
proprietary or is designated as source selection information; and

\(vii\) Resolve complaints at the contracting activity for which they
have cognizance.

\(7\) If, upon review of all relevant information, the Contracting
Activity Ombudsman determines that corrective action should be taken,
the Contracting Activity Ombudsman shall report the determination to the
cognizant contracting officer. Issues which cannot be so resolved should
be forwarded to the DOE Ombudsman. \[Final rule, 62 FR 53754, 10/16/97,
effective 11/17/97\]

**Subpart 916.6** --- **Time-and-materials, Labor-Hour, and Letter
Contracts**

**916.601 Time and Materials \[DOE coverage (c)\].**

\(c\) Limitations. The Contracting Officer is not required to execute a
separate Determination and Findings as required by [FAR
16.601]{.underline} 3(c) if other file documentation adequately
justifies contract actions. \[Final rule, 67 FR 14869, 3/28/2002,
effective 4/29/2002\]

**PART 917 --- SPECIAL CONTRACTING METHODS**

**Subpart 917.6 --- Management and Operating Contracts**

917.600 Scope of subpart.

917.602 Policy

**Subpart 917.70 --- Cost Participation**

917.7000 Scope of subpart.

917.7001 Policy.

**Subpart 917.72 --- Program Opportunity Notices for** **Commercial
Demonstrations**

917.7200 Scope of subpart.

917.7201 Policy.

917.7201-1 General.

**Subpart 917.73 --- Program Research and Development Announcements**

917.7300 Scope of subpart.

917.7301 Policy and prerequisites.

917.7301-1 General.

**Subpart 917.74 --- Acquisition, Use, and Disposal of Real Estate**

917.7401 General.

917.7402 Policy.

917.7403 Application.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11974, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**Subpart 917.6 --- Management and Operating Contracts**

**917.600 Scope of subpart.**

\(a\) This subpart implements 48 CFR subpart 17.6, Management and
Operating Contracts. Departmental policies, procedures, provisions and
clauses to be used in the award and administration of management and
operating contracts that either implement or supplement the Federal
Acquisition Regulation and parts 901 through 952 of this chapter are
contained in 48 CFR Part 970.

\(b\) The requirements of this subpart apply to any Department of Energy
management and operating contract, including performance-based
management contracts as defined in 48 CFR 917.601. References in this
subpart to \"management and operating contracts\" include
performance-based management contracts. \[62 FR 34842, Jun. 27, 1997; 65
FR 80994, Dec. 22, 2000\]

**917.601 Definitions**.

*Performance-based contracting* has the meaning contained in 48 CFR
37.101.

*Performance-based management* *contract* means a management and
operating contract that employs, to the maximum extent practicable,
performance-based contracting concepts and methodologies through the
application of results-oriented statements of work; clear, objective
performance standards and measurement tools; and incentives to encourage
superior contractor performance. \[62 FR 34842, Jun. 27, 1997; 65 FR
80994, Dec. 22, 2000\]

**917.602 Policy**.

\(a\) The use of a management and operating contract must be authorized
by the Secretary, Deputy Secretary or Under Secretary.

\(b\) It is the policy of the Department of Energy to provide for full
and open competition in the award of management and operating contracts,
including performance-based management contracts.

\(c\) A management and operating contract may be awarded or extended at
the completion of its term without providing for full and open
competition only when such award or extension is justified under one of
the statutory authorities identified in 48 CFR 6.302 and only when
authorized by the Secretary. Documentation and processing requirements
for justifications for the use of other that full and open competition
shall be accomplished in accordance with internal agency procedures.
\[Interim rule 61 FR 32584, Jun. 24, 1996; final rule 62 FR 34872, Jun.
27, 1997; 65 FR 80994, Dec. 22, 2000\]

**Subpart 917.70 --- Cost Participation**

**917.7000 Scope of subpart.**

\(a\) This subpart sets forth the DOE policy on cost participation by
organizations performing research, development, and/or demonstration
projects under DOE prime contracts. This subpart does not cover efforts
and projects performed for DOE by other Federal agencies.

\(b\) Cost participation is a generic term denoting any situation where
the Government does not fully reimburse the performer for all allowable
costs necessary to accomplish the project or effort under the contract.
The term encompasses cost sharing, cost matching, cost limitation
(direct or indirect), participation in kind, and similar concepts.

**917.7001 Policy**.

\(a\) When DOE supports performer research, development, and/or
demonstration efforts, where the principal purpose is ultimate
commercialization and utilization of the technologies by the private
sector, and when there are reasonable expectations that the performer
will receive present or future economic benefits beyond the instant
contract as a result of performance of the effort, it is DOE policy to
obtain cost participation. Full funding may be provided for early phases
of development programs when the technological problems are still great.

\(b\) In making the determination to obtain cost participation, and
evaluating present and future economic benefits to the performer, DOE
will consider the technical feasibility, projected economic viability,
societal and political acceptability of commercial application, as well
as possible effects of other DOE-supported projects in competing
technologies.

\(c\) The propriety, manner, and amount of cost participation must be
decided on a case-by-case basis.

\(d\) Cost participation is required for demonstration projects unless
exempted by the Under Secretary. Demonstration projects, pursuant to
this subpart, include demonstrations of technological advances and field
demonstrations of new methods and procedures, and demonstrations of
prototype commercial applications for the exploration, development,
production, transportation, conversion, and utilization of energy
resources.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 917.72 --- Program Opportunity Notices for Commercial
Demonstrations**

**917.7200 Scope of subpart.**

\(a\) This subpart discusses the policy for the use of a program
opportunity notice solicitation approach to accelerate the demonstration
of the technical feasibility and commercial application of all
potentially beneficial non-nuclear energy sources and utilization
technologies.

\(b\) This subpart applies to demonstrations performed by individuals,
educational institutions, commercial or industrial organizations, or
other private entities, public entities, including State and local
governments, but not other Federal agencies. For purposes of this
subpart, commercial demonstration projects include demonstrations of
technological advances, field demonstrations of new methods and
procedures, and demonstration of prototype commercial applications for
the exploration, development, production, transportation, conversion,
and utilization of non-nuclear energy resources.

**917.7201 Policy**.

**917.7201-1 General**.

\(a\) It is DOE\'s intent to encourage the submission of proposals to
accelerate the demonstration of the technical, operational, economic,
and commercial feasibility and environmental acceptability of particular
energy technologies, systems, subsystems, and components. Program
opportunity notices will be used to provide information concerning
scientific and technological areas encompassed by DOE\'s programs. DOE
shall, from time to time, issue program opportunity notices for
proposals for demonstrations of various forms of non-nuclear energy and
technology utilization.

\(b\) Each program opportunity notice shall as a minimum describe: the
goal of the intended demonstration effort; the time schedule for award;
evaluation criteria; program policy factors; the amount of cost detail
required; and proposal submission information. Program policy factors
are those factors which, while not appropriate indicators of a
proposal\'s individual merit (i.e., technical excellence, proposer\'s
ability, cost, etc.), are relevant and essential to the process of
choosing which of the proposals received will, taken together, best
achieve the program objectives. All such factors shall be predetermined
and specified in the notice so as to notify proposers that factors which
are essentially beyond their control will affect the selection process.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 917.73 --- Program Research and Development Announcements**

**917.7300 Scope of subpart.**

\(a\) This subpart discusses the policy for the use of a program
research and development announcement (PRDA) solicitation approach to
obtain and select proposals from the private sector for the conduct of
research, development, and related activities in the energy field.

**917.7301 Policy**.

**917.7301-1 General**.

\(a\) PRDAs shall be used to provide potential proposers with
information concerning DOE\'s interest in entering into arrangements for
research, development, and related projects in specified areas of
interest. It is DOE\'s intent to solicit the submission of ideas which
will serve as a basis for research, development, and related activities
in the energy field. It is DOE\'s desire to encourage the involvement of
small business concerns, small disadvantage business concerns, and
women-owned small business concerns in research and development
undertaken pursuant to PRDAs.

\(b\) The PRDA should not replace existing acquisition procedures where
a requirement can be sufficiently defined for solicitation under
standard advertised or negotiated acquisition procedures. Similarly, it
should not inhibit or curtail the submission of unsolicited proposals.
However, a proposal which is submitted as though it were unsolicited but
is in fact germane to an existing PRDA shall be treated as though
submitted in response to the announcement or returned without action to
the proposer, at the proposer\'s option. Further, the PRDA is not to be
used in a competitive situation where it is appropriate to negotiate a
study contract to obtain analysis and recommendations to be incorporated
in the subsequent request for proposals.

\(c\) The PRDA is to be used only where:

\(1\) Research and development is required in support of a specific
project area within an energy program with the objective of advancing
the general scientific and technological base, and this objective is
best achieved through:

\(i\) A diversity of possible approaches, within the current state of
the art, available for solving the problems;

\(ii\) The involvement of a broad spectrum of organizations in seeking
out solutions to the problems posed;

\(iii\) The application of the unique qualifications or specialized
capabilities of many individual proposers which will enable them to
perform portions of the research project (without necessarily possessing
the qualifications to perform the entire project) so that the overall
support may be broken into segments which cannot be ascertained in
advance; and,

\(iv\) The fostering of new and creative solutions.

\(2\) Consistent with paragraph (c)(1) of this section, it is
anticipated that choices will have to be made among dissimilar concepts,
ideas, or approaches; and

\(3\) It is determined that a broad range of organizations exist that
would be capable of contributing towards the overall research and
development goals identified in paragraph (c)(1) of this section.

\(d\) Each PRDA shall as a minimum describe: the area(s) of program
interest; time schedule for award; proposal submittal information;
evaluation criteria; and program policy factors. The PRDA should clearly
emphasize to proposers that program policy factors are essentially
beyond their control and will affect the selection process. The PRDA
should also state that

DOE reserves the right to select for award or support any, all, or none
of the proposals received in response to an announcement.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 917.74 --- Acquisition, Use, and Disposal of Real Estate**

**917.7401 General.**

Special circumstances and situations may arise under cost-type contracts
when, in the performance of the contract or subcontract, the performer
shall be required, or otherwise find it necessary, to acquire real
estate or interests therein by:

\(a\) Purchase, on DOE\'s behalf or in its own name, with title
eventually vesting in the Government.

\(b\) Lease, and DOE assumes liability for, or otherwise will pay for
the obligation under the lease.

\(c\) Acquisition of temporary interest through easement, license or
permit, and DOE funds the cost of the temporary interest.

**917.7402 Policy**.

It is the policy of the Department of Energy that, when real estate
acquisitions are made, the following policies and procedures shall be
applied to such acquisitions:

\(a\) Real estate acquisitions shall be mission essential; effectively,
economically, and efficiently managed and utilized; and disposed of
promptly, when not needed;

\(b\) Acquisitions shall be justified, with documentation which
describes the need for the acquisitions, general requirements, cost,
acquisition method to be used, site investigation reports, site
recommended for selection, and property appraisal reports; and

\(c\) Acquisition by lease, in addition to the requirements in
paragraphs (a) and (b) of this section:

\(1\) Shall not exceed a one-year term if funded by one-year
appropriations.

\(2\) May exceed a one-year term, when the lease is for special purpose
space funded by no-year appropriations and approved by the Department.

\(3\) Shall contain an appropriate cancellation clause which limits the
Government\'s obligation to no more than the amount of rent to the
earliest cancellation date plus a reasonable cancellation payment.

\(4\) Shall be consistent with Government laws and regulations
applicable to real estate management.

**917.7403 Application**.

The clause at 48 CFR 952.217-70 shall be included in contracts or
modifications where contractor acquisitions are expected to be made.
\[61 FR 41702, Aug. 9, 1996\]

**PART 919 --- SMALL BUSINESS PROGRAMS**

**Subpart 919.2 --- Policies**

919.201 General policy.

**Subpart 919.5 --- Set-Asides for small business**

919.501 General.

919.502-2 Total Set-Asides.

919.503 Setting aside a class of acquisitions.

**Subpart 919.6 --- Certificates of competency and determinations of
eligibility**

919.602-1 Referral.

**Subpart 919.7 --- Subcontracting with small business, small
disadvantaged business and woman-owned small business**

919.705-6 Postaward responsibililties of the contracting officer.

**Subpart 919.8 --- Subcontracting with the Small Business
Administration (The 8(a) Program)**

919.805-2 Procedures

**Subpart 919.70 --- The Department of Energy Mentor-Protege Program**

919.7001 Scope of subpart

919.7002 Definitions

919.7003 General policies

919.7004 General prohibitions

919.7005 Eligibility to be a mentor

919.7006 Incentives for DOE contractor participation

919.7007 Eligibility to be a protege

919.7008 Selection of proteges

919.7009 Process for participation in the program

919.7010 Contents of the mentor-protege agreement

919.7011 Developmental assistance

919.7012 Review and approval process of the agreement by the Office of
Small Business Utilization (OSDBU)

919.7013 Reports

919.7014 Solicitation provision

Authority: 40 U.S.C. 486 (c); 42 U.S.C. 7101, et seq.; 42 U.S.C. 2201;
50 U.S.C. 2401, et seq.

Source: 49 FR 11997, Mar. 28, 1984, unless otherwise noted.

**919.201 General policy.**

\(c\) The Director, Office of Small and Disadvantaged Business
Utilization, Headquarters, is responsible for the administration of the
DOE small, small disadvantaged, and women-owned small business programs.
The Executive Director, Federal Energy Regulatory Commission, is
responsible for the administration of the Commission\'s small, small
disadvantaged, and women-owned small business programs. This includes
responsibility for developing, implementing, executing, and managing
these programs, providing advice on these programs, and representing DOE
before other Government agencies on matters primarily affecting small,
small disadvantaged, and women-owned small businesses. The Heads of
Contracting Activities (HCAs) shall appoint a small business specialist.
\[50 FR 12185, 3/27/85, effective 4/1/85; Final rule, 59 FR 9102,
2/25/94, effective 4/26/94; Final rule, 61 FR 21975, 5/13/96, effective
6/12/96\]

**919.501 General.**

\(c\) The Department has established an internal comprehensive review
and screening process for acquisitions exceeding the simplified
acquisition threshold. The review is intended to enhance the prospect of
participation by small business, small disadvantaged business, and
women-owned small business concerns.

\(g\) The policy prescribed by [FAR 19.501]{.underline} (g), which
requires that a product or service acquired by a successful small
business set-aside shall continue to be acquired on a set-aside basis,
is applicable to DOE on a contracting activity-wide basis. The small and
disadvantaged business specialist at a contracting activity shall
maintain a list of such small business set-aside awards. \[52 FR 38425,
10/16/87, effective 11/16/87; Final rule, 59 FR 9102, 2/25/94, effective
4/26/94; Final rule, 61 FR 21975, 5/13/96, effective 6/12/96\]

**919.502 Setting aside acquisitions.**

**\[Reserved.\]**

**919.502-2 Total set-asides.**

In considering set-asides in the area of architect engineer contracts,
contracting personnel must first consider the special procedures
required by the Brooks Act, Pub. L. 92-582 pertaining to this type
acquisition.

**919.503 Setting aside a class of acquisitions.**

By agreement with SBA, the DOE has established a class set-aside for
construction acquisitions not exceeding \$3 million, including new
construction and repair and alteration of structures. Lists of other
class set-asides shall be maintained by all DOE contracting offices.
These lists shall be updated at least annually.

**919.602 Procedures.**

**\[Reserved.\]**

**919.602-1 Referral.**

(a)(2) The contracting officer shall coordinate with the small business
specialist and the SBA procurement center representative prior to
referring a determination of nonresponsibility of a small business to
the SBA Area Office. \[52 FR 38425, 10/16/87, effective 11/16/87; Final
rule, 61 FR 21975, 5/13/96, effective 6/12/96; Final rule, 63 FR 56849,
10/23/98, effective 11/23/98\]

**919.705-6 Postaward responsibilities of the contracting officer.**

A copy of the notification to the SBA of awards of contracts, amendments
or modifications that contain subcontracting plans, as required by [FAR
19.705-6]{.underline} (a), shall be provided to the Office of Small and
Disadvantaged Business Utilization. \[Final rule, 59 FR 9102, 2/25/94,
effective 4/26/94\]

**919.805-2 Procedures.**

Acquisitions involving section 8(a) competition must comply with source
selection procedures set forth in the FAR in accordance with 13 CFR
124.311(e)(1). \[Final rule, 63 FR 56849, 10/23/98, effective 11/23/98\]

**Subpart 919.70 --- The Department of Energy Mentor-Protege Program**

**DEAR 919.7001 Scope of subpart.**

The Department of Energy (DOE) Mentor-Protege Program is designed to
encourage DOE prime contractors to assist small disadvantaged firms
certified by the Small Business Administration (SBA) under Section 8(a)
of the Small Business Act (8(a)), other small disadvantaged businesses,
women-owned small businesses, Historically Black Colleges and
Universities, and other minority institutions of higher learning, and
small business concerns owned and controlled by service disabled
veterans in enhancing their capabilities to perform contracts and
subcontracts for DOE and other Federal agencies. The program seeks to
foster long-term business relationships between these small business
entities and DOE prime contractors, and to increase the overall number
of these small business entities that receive DOE contract and
subcontract awards. \[Final rule, 65 FR 21367, 4/21/2000, effective
5/22/2000\]

**919.7002 Definitions.**

*Historically Black Colleges and Universities (HBCUs)* means an
institution determined by the Secretary of Education to meet the
requirements of 34 CFR 608.2.

*Other minority institutions of higher learning* means an institution
determined by the Secretary of Education to meet the requirements of 20
U.S.C. 1067k.

*Small business concern owned and controlled by service-disabled
veterans* means a small business concern as defined in Public Law
106-50, Veterans Entrepreneurship and Small Business Development Act of
1999.

*Small disadvantaged business* means a small business concern owned and
controlled by socially and economically disadvantaged individuals that
meets the requirements of 13 CFR part 124, subpart B.

*Women-owned small business* means a small business concern that meets
the requirements of 15 U.S.C. 637(d)(3)(D). \[Final rule, 65 FR 21367,
4/21/2000, effective 5/22/2000\]

**919.7003 General policy.**

\(a\) DOE contractors eligible under 48 CFR 919.7005 may enter into
agreements with businesses certified by the SBA in the 8(a) Program,
other small disadvantaged businesses, women-owned small businesses,
HBCUs, other minority institutions of higher learning, and small
business concerns owned and controlled by service disabled veterans to
provide those firms appropriate developmental assistance to enhance the
capabilities of Proteges.

\(b\) Costs incurred by a Mentor to provide developmental assistance, as
described in 919.7011, are allowable only to the extent that they are
incurred in performance of a contract identified in the Mentor-Protege
Agreement and are otherwise allowable in accordance with the cost
principles applicable to that contract.

\(c\) Headquarters Office of Small and Disadvantaged Business
Utilization (OSDBU) is the DOE Program Manager for the Mentor-Protege
Program. \[Final rule, 65 FR 21367, 4/21/2000, effective 5/22/2000\]

**919.7004 General prohibitions.**

DOE will not reimburse the costs of a Mentor in providing any form of
developmental assistance to a Protege except as provided in 919.7003(b).
\[Final rule, 65 FR 21367, 4/21/2000, effective 5/22/2000\]

**919.7005 Eligibility to be a Mentor.**

To be eligible for recognition by DOE as a Mentor, an entity must be
performing at least one contract for DOE. \[Final rule, 65 FR 21367,
4/21/2000, effective 5/22/2000\]

**919.7006 Incentives for DOE contractor participation.**

\(a\) Under cost-plus-award fee contracts, approved Mentor firms may
earn award fees associated with their performance as a Mentor. The award
fee plan may include provision for the evaluation of the contractor\'s
utilization of 8(a) firms, other small disadvantaged businesses,
women-owned small businesses, HBCUs, other minority institutions of
higher learning and small business concerns owned and controlled by
service disabled veterans. DOE may evaluate the Mentor\'s performance in
the DOE Mentor-Protege Program under any Mentor-Protege Agreement(s) as
a separate element of the award fee plan.

\(b\) Mentors shall receive credit for subcontracts awarded pursuant to
their Mentor-Protege Agreements toward subcontracting goals contained in
their subcontracting plan. \[Final rule, 65 FR 21367, 4/21/2000,
effective 5/22/2000\]

**919.7007 Eligibility to be a Protege.**

\(a\) To be eligible for selection as a Protege, a firm must:

\(1\) Be a small business certified under Section 8(a) of the Small
Business Act by SBA, other small disadvantaged business, a women-owned
small business, HBCU, or any other minority institution of higher
learning, or a small business concern owned and controlled by service
disabled veterans;

\(2\) Be eligible for receipt of government contracts;

\(3\) Have been in business for at least two (2) years prior to
application for enrollment into the Mentor-Protege Program; and

\(4\) Be able to certify as a small business according to the Standard
Industrial Code for the services or supplies to be provided by the
Protege under its subcontract with the Mentor.

\(b\) A prospective Mentor may rely in good faith on written
representations by a prospective Protege that the Protege meets the
requirements in paragraph (a) of this section. \[Final rule, 65 FR
21367, 4/21/2000, effective 5/22/2000\]

**919.7008 Selection of Proteges.**

\(a\) A Mentor firm is solely responsible for selecting one or more
Protege entities from firms eligible under 48 CFR 919.7007.

\(b\) A Mentor may have more than one Protege; however, a Protege may
have only one Mentor.

\(c\) The selection of Protege firms by Mentor firms may not be
protested, except as provided in paragraph (d) of this section.

\(d\) Only protests regarding the small business size status of a firm
to be a Protege will be considered and shall be submitted to the DOE
Office of Small and Disadvantaged Business Utilization for resolution.
If that office is unable to resolve a protest, it will refer the matter
to the Small Business Administration for resolution in accordance with
13 CFR part 121. \[Final rule, 65 FR 21367, 4/21/2000, effective
5/22/2000\]

**919.7009 Process for participation in the program.**

A prospective Mentor must submit the following to the DOE Mentor-Protege
Program Manager.

\(a\) A statement that it is eligible, as of the date of application,
for the award of Federal contracts;

\(b\) A statement that it is currently performing at least one contract
for DOE;

\(c\) The DOE contract number, type of contract, period of performance
(including options), title of technical program effort, name of DOE
technical program manager (including contact information) and the DOE
contracting activity; and

\(d\) An original and two copies of the Mentor-Protege Agreement signed
by the chief executive officer or designee of the Mentor firm and the
chief executive officer of the Protege firm. \[Final rule, 65 FR 21367,
4/21/2000, effective 5/22/2000\]

**919.7010 Contents of Mentor-Protege Agreement.**

The proposed Mentor-Protege Agreement must contain:

\(a\) Names, addresses and telephone numbers of Mentor and Protege firms
and a point of contact within each firm who will oversee the Agreement;

\(b\) Requirements for the Mentor firm or the Protege firm to notify the
other entity, DOE Headquarters OSDBU, and the contracting officer in
writing at least 30 days in advance of the Mentor firm\'s or the Protege
firm\'s intent to voluntarily terminate or withdraw from the
Mentor-Protege Agreement (such termination would not terminate any
existing subcontract between the Mentor and the Protege);

\(c\) A description of the form of developmental assistance program that
will be provided by the Mentor to the Protege firm, including a
description of any subcontract work, and a schedule for providing the
assistance and the criteria for evaluation of the Protege\'s
developmental success (48 CFR 919.7011);

\(d\) A listing of the number and types and estimated amount of
subcontracts to be awarded to the Protege firm;

\(e\) Term of the Agreement;

\(f\) Procedures to be invoked should DOE terminate its recognition of
the Agreement for good cause (such termination of DOE recognition would
not constitute a termination of the subcontract between the Mentor and
the Protege);

\(g\) Provision for the Mentor firm to submit to the DOE Mentor-Protege
Program Manager a \"lessons learned\" evaluation developed by the Mentor
at the conclusion of the Mentor-Protege Agreement;

\(h\) Provision for the submission by the Protege firm of a \"lessons
learned\" evaluation to the DOE Mentor-Protege Program Manager at the
conclusion of the Mentor-Protege Agreement;

\(i\) Description of how the development assistance will potentially
increase subcontracting opportunities for the Protege firm;

\(j\) Provision for the Mentor firm to brief the DOE Mentor-Protege
Program Manager, the technical program manager(s), and the contracting
officer at the conclusion of each year in the Mentor-Protege Program
regarding program accomplishments as pertains to the approved Agreement
(where possible, this review may be incorporated into the normal program
review for the Mentor\'s contract);

\(k\) Recognition that costs incurred by a Mentor to provide
developmental assistance, as described in 48 CFR 919.7011, are allowable
only to the extent that they are incurred in performance of a contract
identified in the Mentor-Protege Agreement and are otherwise allowable
in accordance with the cost principles applicable to that contract (the
DOE Mentor-Protege Program has no appropriation for paying for
developmental assistance); and

\(l\) Other terms and conditions, as appropriate. \[Final rule, 65 FR
21367, 4/21/2000, effective 5/22/2000\]

**919.7011 Developmental assistance.**

\(a\) The forms of developmental assistance a Mentor may provide to a
Protege include, but are not limited to:

\(1\) Management guidance relating to:

\(i\) Financial management,

\(ii\) Organizational management,

\(iii\) Overall business management planning,

\(iv\) Business development, and

\(v\) Marketing assistance;

\(2\) Engineering and other technical assistance;

\(3\) Noncompetitive award of subcontracts under DOE or other Federal
contracts where otherwise authorized;

\(4\) Award of subcontracts in the Mentor\'s commercial activities;

\(5\) Progress payments based on costs;

\(6\) Rent-free use of facilities and/or equipment owned or leased by
Mentor; and

\(7\) Temporary assignment of Mentor personnel to the Protege for
purposes of training.

\(b\) Costs incurred by a Mentor to provide developmental assistance, as
described in paragraph (a) of this section, are allowable only to the
extent provided at 48 CFR 919.7003(b). \[Final rule, 65 FR 21367,
4/21/2000, effective 5/22/2000\]

**919.7012 Review and approval process of agreement by OSDBU.**

\(a\) OSDBU will review the proposed Mentor-Protege Agreement under 48
CFR 919.7010 and will complete its review and assessment no later than
30 days after receipt. OSDBU will provide a copy of its assessment to
the cognizant DOE technical program manager and contracting officer for
review and concurrence.

\(b\) If OSDBU approves the Agreement, the Mentor may implement the
developmental assistance program.

\(c\) Upon finding deficiencies that DOE considers correctable, the
OSDBU will notify the Mentor and request information to be provided
within 30 days that may correct the deficiencies. The Mentor may then
provide additional information for reconsideration. The review of any
supplemental material will be completed within 30 days after receipt by
the OSDBU and the Agreement either approved or disapproved. \[Final
rule, 65 FR 21367, 4/21/2000, effective 5/22/2000\]

**919.7013 Reports.**

\(a\) Prior to performing an evaluation of a Mentor\'s performance under
its Mentor-Protege Agreement for use in award fee evaluations, the
Mentor-Protege Program Manager must consult with the cognizant DOE
technical program manager and must provide a copy of the performance
evaluation comments regarding the technical effort and Mentor-Protege
development to the contracting officer.

\(b\) The DOE Mentor-Protege Program Manager must submit semi-annual
reports to the cognizant contracting officer regarding the participating
Mentor\'s performance in the Program for use in the award fee
determination process.

\(c\) The Mentor firm must submit progress reports to the DOE
Mentor-Protege Program Manager semi-annually. \[Final rule, 65 FR 21367,
4/21/2000, effective 5/22/2000\]

**919.7014 Solicitation provision.**

The cognizant contracting officer must insert the provision at
952.219-70, DOE Mentor-Protege Program, in all solicitations with an
estimated value in excess of the simplified acquisition threshold.
\[Final rule, 65 FR 21367, 4/21/2000, effective 5/22/2000\]

**PART 922 --- APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION**

**Subpart 922.1 --- Basic Labor Policies**

922.103 Overtime

922.103-4 Approvals

922.103-5 Contract Clauses

**Subpart 922.6 --- Walsh-Healey Public Contracts Act**

922.608-3 Protest against eligibility

922.608-4 Award pending final determination

922.608-5 Award

922.608-6 Postaward

**Subpart 922.8 --- Equal Opportunity Employment**

922.800 Scope of subpart

922.802 General

922.803 Responsibilities

922.804 Affirmative action programs

922.804-1 Nonconstruction

922.804-2 Construction

922.807 Exemptions

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11998, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**Subpart 922.1 --- Basic Labor Policies**

**922.103 Overtime.**

**922.103-4 Approvals.**

\(d\) Approvals. (1) Where the cost to the Government may be affected,
approval of hours of work in excess of the normal workweek is justified
only in those instances and for those employees where it can be shown
that overtime would provide needed and demonstrable impetus to the
accomplishment of DOE objectives and that all other means of meeting
these objectives have been considered and found inadequate or not
feasible. Accordingly, the Heads of the Contracting Activities shall:

\(i\) Establish controls to prevent excess casual overtime and to assure
that such overtime work is in the best interest of the Government.
Casual overtime means (A) work in excess of the normal workweek (or in
excess of an authorized extended workweek) which cannot be regularly
scheduled in advance, or (B) regularly scheduled work in excess of the
normal workweek for a period of four consecutive weeks or less; and

\(ii\) Establish controls to assure that any use of any extended
workweek schedule is in the best interest of the Government. Extended
workweek means a workweek regularly scheduled and established in excess
of the normal workweek for a period in excess of four consecutive weeks.

**922.103-5 Contract clauses.**

In accordance with FAR 22.101-1(e) and FAR 22.103-5, the contracting
officer shall insert the clause at FAR 52.222-1, Notice to the
Government of Labor Disputes, in all solicitations and contracts for
protective services at DOE owned facilities requiring continuity of
services for public safety and national security reasons. The
contracting officer may insert this clause in other solicitations and
contracts where a significant need for continuity in contract
performance exists. See 937.70, Protective Services Contracting, for
additional policy guidance regarding protective services. \[58 FR 36149,
Jul. 6, 1993\]

**Subpart 922.6 --- Walsh-Healey Public Contracts Act**

**922.608-3 Protests against eligibility.**

When an eligibility determination made by the contracting officer is
challenged, this protest shall be handled in accordance with procedures
for agency protests against award, except the matter shall be submitted
to the Department of Labor for final determination. However, if the
eligibility determination challenged pertains to a small business, the
protest shall be forwarded to the Small Business Administration for
determination.

**922.608-4 Award pending final determination.**

\(a\) Award, as contemplated by FAR 22.608-4, may be made only with the
approval of the Head of the Contracting Activity.

**922.608-5 Award.**

The notice required by (FAR) 48 CFR 22.608-5 is to be sent to the
appropriate Department of Labor Regional Office in which the contractors
place of business is located. Regional Office locations are specified at
FAR 22.609.

**922.608-6 Postaward.**

\(c\) Any postaward actions of the type discussed at FAR 22.608-6 should
be coordinated in advance with the Office of Contractor Human Resource
Management, within the Headquarters procurement organization.

**Subpart 922.8 --- Equal Employment Opportunity**

**922.800 Scope of subpart.**

This subpart implements (FAR) 48 CFR Part 22, Subpart 22.8. It applies
to all DOE contracts and subcontracts.

**922.802 General.**

**922.803 Responsibilities.**

\(a\) The Director, Office of Federal Contract Compliance Programs of
the Department of Labor has been delegated authority and responsibility
for carrying out the requirements of Executive Order 11246, as amended.
In conjunction with the delegation, contracting officers shall be
familiar with existing and any updated provisions of 41 CFR Ch. 60, and
assist the Department of Labor in its compliance responsibilities. DOE
contracting officers will include the applicable Equal Employment
Opportunity (EEO)) and Affirmative Action Program (AAP) requirements in
their solicitations and obtain the applicable reports of compliance from
the Office of Federal Contract Compliance Programs (OFCCP) (when
required) prior to awarding of contracts. The provisions of 41 CFR Ch.
60, are applicable to all DOE contracts.

\(d\) The OFCCP requires that requests for pre-award clearances be
directed to the OFCCP Regional Office in which the contractor\'s
facility is (to be) located. If OFCCP finds the contractor in
compliance, the contracting officer will be notified. Findings of
non-compliance can be communicated to the contracting officer by the
OFCCP or Headquarters Director or his designee. The appropriate Regional
Office will provide the appropriate contact point in cases of
non-compliance. The Director, Office of Civil Rights, Headquarters, when
requested, will provide assistance to contracting officers resolving
non-compliance issues by providing assistance in obtaining a final
decision from the OFCCP.

\[49 FR 11998, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**922.804 Affirmative action programs.**

**922.804-1 Nonconstruction.**

In the event a prospective contractor or subcontractor is entering into
its first contract containing the Equal Opportunity clause, the
contracting officer shall determine that the prospective contractor
understands and appears able to conform to the requirements of the EEO
clause.

**922.804-2 Construction.**

\(a\) Construction contracts, including cost-sharing contracts, are
subject to OFCCP orders applicable in particular areas.

\(1\) When a proposed nonexempt construction contract is within a
geographic area where construction is subject to the provisions of
Federal EEO Bid Conditions, Part I or Part II, the solicitation shall
contain those bid conditions. The contracting officer shall include in
such solicitation a provision that \"the offeror shall adhere to the
affirmative action plan (bid conditions) set forth in this
solicitation.\"

\(2\) Lists of areas for which OFCCP has designated specific affirmative
action requirements are available through the Procurement Executive.
Contracting officers should assure that this list and copies of
pertinent orders are made available to all concerned DOE offices and to
DOE contractors and construction subcontractors for work to be performed
in the specified geographical areas.

\(b\) Other nonexempt construction contracts. (1) When a proposed
nonexempt construction contract is not in a \"plan area\" and is in the
amount of \$10,000 or more, offerors must agree to comply with the Equal
Employment Opportunity clause.

\(2\) When proposed nonexempt contracts of \$1,000,000 or over are not
in plan areas and have not been designated as high impact, offerors also
must submit to the contracting officer details regarding specific
affirmative action steps to be taken by the offeror in connection with
all work under the contract. Such details shall include estimates of the
percentage of minority group persons expected to be employed in each
craft involved in the performance of the contract work.. All
solicitations for construction contracts shall reference the affirmative
action requirements and the offeror\'s obligation to make good faith
efforts to employ women in craft positions.

\(3\) Pursuant to the OFCCP order dated August 30, 1976, agencies shall
develop \"Special Bid Conditions\" for use on high impact projects in
non-plan areas. These special bid conditions will include mandatory
goals and timetables for the utilization of minorities. The Procurement
Executive using the criteria issued by OFCCP will determine those
projects that are \"high impact.\" The contracting officer is
responsible for compliance with policies and procedures contained in the
OFCCP \"Construction Compliance Program Operations Manual.\" Language
for inclusion in solicitations or contracts contained in the manual may
be modified, provided all of the requirements are retained. The
contracting officer shall develop the goals and timetables and shall
confer with the appropriate OFCCP regional office. The Office of Civil
Rights, Headquarters will provide assistance as necessary, when
requested. Special bid conditions will be submitted by the contracting
officer to the appropriate OFCCP regional office for approval unless
otherwise directed by the Procurement Executive. When special bid
conditions are applicable, adequate presolicitation lead time should be
allowed for submission of the special bid conditions to OFCCP national
and regional offices.

\(c\) An attempt to limit in any major respect the equal opportunity
requirements included in an invitation for bids or request for proposals
for a construction contract shall constitute grounds for a determination
that the offeror does not qualify as a responsible offeror and for
rejection of the bid or proposal. In the case of construction
acquisition by DOE prime contractors, this determination shall be made
only with the approval of the DOE contracting officer. \[49 FR 11998,
Mar. 28, 1984, as amended at 56 FR 41965, Aug. 26, 1991 and 58 FR 36363,
Jul. 7, 1993\]

**922.807 Exemptions.**

\(c\) Contracting officer requests for exemption from E.O. 11246 should
be directed to the Procurement Executive for submission to the Director,
OFCCP.

**PART 923 --- ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND
DRUG-FREE WORKPLACE**

**Subpart 923.4 --- Use of Recovered Materials**.

923.405 Procedures \[DOE supplemental coverage -- paragraph (e)\].

923.471 Policy.

**Subpart 923.5 --- Workplace Substance Abuse Programs**.

923.570 Workplace substance abuse programs at DOE sites..

923.570-1 Applicability.

923.570-2 Solicitation provision and contract clause.

923.570-3 Suspension of payments, termination of contract, and debarment
and suspension.

**Subpart 923.7 --- Contracting for Environmentally Preferable and
Energy-efficient Products and Services.**

923.703 Policy.

**Subpart 923.70 --- Environmental, Conservation, and Occupational**

**Safety Programs.**

923.7001 Nuclear Safety.

923.7002 Worker Safety and Health.

923.7003 Contract clauses.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11936, Mar. 28, 1984, unless otherwise noted.

**Subpart 923.4 --- Use of Recovered Materials**

**923.405 Procedures \[DOE supplemental coverage - paragraph (e)\].**

\(e\) When acquiring items designated in the EPA Comprehensive
Procurement Guidelines, the EPA recommended percentage of
recovered/recycled content or range of content contained in the

Recovered Materials Advisory Notice (RMAN) shall be specified in the
solicitation and contract

as the minimum percentage of recovered/recycled content or range of
content. Acquisition of a product with recycled content exceeding the
RMAN recommended content or range of content is encouraged if the
product performs acceptably.

**923.471 \[Removed and Reserved\].** Source: 68 FR 6355, February 7,
2003

**Subpart 923.5 --- Workplace Substance Abuse Programs**

Source: 57 FR 32676, July 22, 1992, unless otherwise noted.

**923.570 Workplace Substance Abuse Programs at DOE Sites.**

\(a\) The Department of Energy (DOE), as part of its overall
responsibilities to protect the environment, maintain public health and
safety, and safeguard the national security, has established policies,
criteria, and procedures for contractors to develop and implement
programs that help maintain a workplace free from the use of illegal
drugs.

\(b\) Regulations concerning DOE\'s contractor workplace substance abuse
programs are promulgated at 10 CFR part 707, Workplace Substance Abuse
Programs at DOE Sites.

**923.570-1 Applicability.**

\(a\) The policies, criteria, and procedure specified in 10 CFR part
707, Workplace Substance Abuse Programs at DOE Sites, apply to contracts
for work performed at sites owned or controlled by DOE and operated
under the authority of the Atomic Energy Act of 1954, as amended, where
such work:

\(1\) Has a value of \$25,000 or more, and;

\(2\) Has been determined by DOE to involve:

\(i\) Access to or handling of classified information or special nuclear
materials;

\(ii\) High risk of danger to life, the environment, public health and
safety or national security; or

\(iii\) The transportation of hazardous materials to or from a DOE site.

\(b\) Except as otherwise provided for in this subpart, contracts
subject to the requirements of 10 CFR part 707 and this subpart shall
not be subject to FAR 23.5, Drug Free Workplace.

\[57 FR 32676, July 22, 1992; 57 FR 41974, Sept. 14, 1992\]

**923.570-2 Solicitation provision and contract clause.**

\(a\) The contracting officer shall insert the provision at 48 CFR
970.5223-3,

Agreement Regarding Workplace Substance Abuse Programs at DOE Sites,

in solicitations where the work to be performed by the contractor will
occur

on sites owned or controlled by DOE and operated under the authority of
the Atomic Energy Act of 1954, as amended, as specified in 48 CFR
923.570-1, Applicability.

\(b\) The contracting officer shall insert the clause at 48 CFR
970.5223-4,

Workplace Substance Abuse Programs at DOE Sites, in contracts where

the work to be performed by the contractor will occur on sites owned or

controlled by DOE and operated under the authority of the Atomic Energy

Act of 1954, as amended, as specified in 923.570-1, Applicability.

\[62 FR 42072, Aug. 5, 1997, 65 FR 80994, Dec. 22, 2000\]

**923.570-3 Suspension of payments, termination of contract, and**

**debarment and suspension actions.**

\(a\) The contracting officer shall comply with the procedures of FAR
23.506 regarding the suspension of contract payments, the termination of
the contract for default, and the debarment and suspension of a
contractor relative to failure to comply with 48 CFR 970.5223-4,
Workplace Substance Abuse Programs at DOE Sites.

\(b\) For purposes of 10 CFR part 707, the specific causes for
suspension

of contract payments, termination of the contract for default, and
debarment and suspension of the contractor are:

\(1\) The contractor fails to either comply with the requirements of 10
CFR

part 707 or perform in a manner consistent with its approved program;

\(2\) The contractor has failed to comply with the terms of the
provision at

48 CFR 970.5223-3; or,

\(3\) Such a number of contractor employees having been convicted of
violations of criminal drug statutes for violations occurring on the
DOE-owned or DOE-controlled site, as to indicate that the contractor has
failed to make a good faith effort to provide a drug free workplace.

\[62 FR 42072, Aug. 5, 1997, 65 FR 80994, Dec. 22, 2000\]

**Subpart 923.7 --- Contracting for Environmentally Preferable and
Energy-efficient Products and Services.**

**923.703 Policy**

Executive Order 13149, dated April 21, 2000, entitled *Greening the
Government Through Federal Fleet and Transportation Efficiency,*
provides that the Federal Government exercise leadership in the
reduction of petroleum consumption through improvements in its motor
fleet fuel efficiency and increases in its use of alternative fuel
vehicles and alternative fuels. The specific provisions affecting the
Department's acquisition program are as follows. Part 2 of the Executive
Order establishes goals for the reduction of petroleum consumption in
the motor vehicle fleet and requires the development of strategies for
the increased use of alternative fuel vehicles, increased use of
alternative fuels accompanied by improved alternative fuel
infrastructure, and the acquisition of higher fuel economy vehicles.
Procurement personnel involved in the acquisition of motor vehicles,
including lease, and motor vehicle products should familiarize
themselves with these requirements and assist their fleet management
personnel in acquiring vehicles and products which comply with the
requirements of the Executive Order and the Department's compliance
strategy. In addition, Section 403 of the Executive Order provides for
the acquisition of environmentally preferable motor vehicle products,
including the use of biobased motor vehicle products. Environmentally
preferable motor vehicle products include re-refined motor vehicle
lubricating oils, retread tires, recycled engine coolants, and bio-based
motor vehicle products. Use of these products is addressed by the
Department's Affirmative Procurement Program required by 48 CFR (FAR)
23.404, Agency affirmative procurement programs, as implemented by 48
CFR (DEAR) 923.405, Procedures \[DOE supplemental coverage - paragraph
(e)\]. Environmentally preferable motor vehicle products are among the
items designated in the Comprehensive Procurement Guidelines, which
lists products with recovered content that Federal agencies and their
contractors are to buy. That list is published by the Environmental
Protection Agency pursuant to the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. 6962, and regulations published at 40 CFR 247.

\[68 FR 52129 Sep. 2, 2003\]

**Subpart 923.70 --- Environmental, Conservation, and**

**Occupational Safety Programs**

**923.7001 Nuclear safety.**

\(a\) The DOE regulates the nuclear safety of its major facilities under
its own statutory authority derived from the Atomic Energy Act and other
legislation. The DOE also regulates, under certain specific conditions,
the use by its contractors of radioactive materials and ionizing
radiation producing machines. \[49 FR 12003, Mar. 28, 1984\]

**923.7002 Worker Safety and Health.**

(a)(1) Except when the clause prescribed at 48 CFR 970.1504-5(c) is
used, the clauses entitled "Conditional Payment of Fee or Profit --
Safeguarding Restricted Data and Other Classified Information and
Protection of Worker Safety and Health" and "Conditional Payment of Fee
or Profit -- Protection of Worker Safety and Health" implement the
requirements of section 234C of the Atomic Energy Act for the use of a
contract clause that provides for an appropriate reduction in the fee or
amount paid to the contractor under the contract in the event of a
violation by the contractor or any contractor employee of any
Departmental regulation relating to the enforcement of worker safety and
health concerns. The clauses, in part, provide for reductions in the
amount of fee, profit, or share of cost savings that is otherwise earned
by the contractor for performance failures relating to worker safety and
health violations under the Department's regulations.

\(2\) The clauses provide for reductions of fee or profit that is earned
by the contractor depending upon the severity of the contractor's
failure to comply with contract terms or conditions relating to worker
safety and health concerns. When reviewing performance failures that
would otherwise warrant a reduction of earned fee, the contracting
officer must consider mitigating factors that may warrant a reduction
below the applicable range specified in the clauses. Some of the
mitigating factors that must be considered are specified in the clauses.

\(3\) The contracting officer must obtain the concurrence of the Head of
the Contracting Activity

\(i\) Prior to effecting any reduction of fee or amounts otherwise
payable to the contractor in accordance with the terms and conditions of
the clause entitled "Conditional Payment of Fee or Profit --
Safeguarding Restricted Data and Other Classified Information and
Protection of Worker Safety and Health" or of the clause entitled
"Conditional Payment of Fee or Profit -- Protection of Worker Safety and
Health";" and

\(ii\) For determinations that no reduction of fee is warranted for a
particular performance failure(s) that would otherwise warrant a
reduction.

\(4\) Section 234C of the Atomic Energy Act provides that DOE shall
either pursue civil penalties (implemented at 10 CFR part 851) for a
violation under section 234C of the Atomic Energy Act (42 U.S.C. 2282c)
or a contract fee reduction, but not both.

\(5\) The contracting officer must coordinate with the Office of Price
Anderson Enforcement within the Office of the Assistant Secretary for
Environment, Safety and Health (or with any designated successor office)
before pursuing a contract fee reduction in the event of a violation by
the contractor or any contractor employee of any Departmental regulation
relating to the enforcement of worker health and safety concerns.

\[68 FR 68771, Dec. 10, 2003\]

**923.7003 Contract clauses.**

\(a\) A decision to include or not include environmental, safety and
health clauses in DOE contracts shall be made by the contracting officer
in consultation with appropriate environmental, safety and health
program management personnel.

\(b\) When work is to be performed at a facility where the DOE will
exercise its statutory authority to enforce occupational safety and
health standards applicable to the working conditions of the contractor
and subcontractor employees at such facility, the clause at 952.223-71
shall be used in such contract or subcontract if conditions (b) (1)
through (3), are satisfied:

\(1\) DOE work is segregated from the contractor\'s or subcontractor\'s
other work;

\(2\) The operation is of sufficient size to support its own safety and
health services; and

\(3\) The facility is government-owned, or leased by or for the account
of the government.

\(c\) In facilities not meeting the requirements of 923.7002(b) above
and which are a production or utilization facility where there is use or
possession of source, special nuclear, or byproduct materials, DOE
policy is not to enforce radiological safety and health standards
pursuant to the contract or subcontract but rather to rely upon Nuclear
Regulatory Commission (NRC) licensing requirements (including agreements
with states under section 274 of the Atomic Energy Act). Pursuant to
this policy, neither the clause found at 952.223-71 nor 952.223-72 is to
be incorporated in the contracts or subcontracts for work at such
facilities.

Notwithstanding this general policy with respect to facilities not
meeting the requirements of paragraph (b) above, the Secretary or his
designee may determine in special cases, that DOE needs to enforce
radiological safety and health standards pursuant to the contract or
subcontract (see paragraph (d) below). When such a determination is
made, the clause found at 952.223-72 shall be included in the contract
or subcontract.

\(d\) In facilities not meeting the requirements of either 923.7002(b)
or 923.7002(c) of this section and where there is a machine capable of
producing ionizing radiation, it is DOE policy not to regulate such
activity where it is adequately regulated by a state or other Federal
agency. In such cases, neither clause 952.223- 71 nor 952.223-72 shall
be incorporated in the contract. Where the contracting officer, with
appropriate environmental, safety and health advice determines that no
state or other Federal agency exists to adequately regulate the
operation and/or use of such machines, the clause found at 952.223-72
shall be included in the contract The Assistant Secretary for
Environment, Safety and Health (or designee) shall be consulted to
determine if a non-agreement (NRC) state or a facility located in a
non-agreement state has been reviewed by any other DOE office to
establish that the state agency has the essential authority and
resources for enforcing the radiation protection standards. This is to
assure reasonable consistency in the assessment of radiation protection
in non-agreement states and subsequent use of 952.223-72.

\(e\) In a situation where the contractor or subcontractor is performing
DOE work at more than one location, inclusion of either, or both,
952.223-71 and 952.223- 72 may be appropriate. In such cases, the
contract or subcontract must include language to specify the extent of
applicability of each clause used. For example, with a parenthetical:
(Applicable only to work performed at a contractor site which has
952.223-71 or 952.223-72 clause in its contract or subcontract). \[49 FR
12003, Mar. 28, 1984; 62 FR 2310, Jan. 16, 1997\]

\(f\) Except as prescribed in 48 CFR 970.1504-5(c), the contracting
officer shall insert the clause at 48 CFR 952.223-76, Conditional
Payment of Fee or Profit -- Safeguarding Restricted Data and Other
Classified Information and Protection of Worker Safety and Health, in
all contracts that contain both the clause at 48 CFR 952.204-2,
Security, and the clause at 48 CFR 952.250-70, Nuclear hazards indemnity
agreement.

\(g\) Except as prescribed in 48 CFR 970.1504-5(c), the contracting
officer shall insert the clause at 48 CFR 952.223-77, Conditional
Payment of Fee or Profit -- Protection of Worker Safety and Health, in
all contracts that do not contain the clause at 48 CFR 952.204-2,
Security, but that do contain the clause at 48 CFR 952.250-70, Nuclear
hazards indemnity agreement.

\[68 FR 68771, Dec. 10, 2003\]

**Part 925 --- FOREIGN ACQUISITION**

**Subpart 925.1** --- **Buy American Act Supplies**

925.102 Policy.

925.105 Evaluating offers.

925.108 Excepted articles, materials, and supplies.

**Subpart 925.2** --- **Buy American Act Construction Materials**

925.202 Policy.

925.202 Violations.

**Subpart 925.7** --- **Restrictions on Certain Foreign Purchases**

925.702 Restrictions.

**Subpart 925.9** **Additional Foreign Acquisition Clause**

925.901 Omission of the Audit Clause.

**Subpart 925.70** --- **Acquisition of Nuclear Hot Cell Services.**

925.7000 Scope of subpart.

925.7001 Definitions.

925.7002 Policy.

925.7003 Requirements.

925.7004 Contract clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12003, Mar. 28, 1984, unless otherwise noted; \[62 FR
2310, Jan. 16, 1997\]

**Subpart 925.1 --- Buy American Act Supplies**

**925.102 Policy**

\(b\) Contracting officers may make the determination required by FAR
25.102(a), provided such determination is factually supported in
writing. If the contract is estimated to exceed \$1 million, the Head of
the Contracting Activity shall approve the determination.

\[49 FR 12003, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**925.105 Evaluating offers.**

\(c\) Proposed awards shall be submitted (in triplicate) through the
Procurement Executive, to the Head of the Agency for decisions required
by FAR 25.105(c).

**925.108 Excepted articles, materials, and supplies.**

\(b\) Suggestions for changes and additions to the FAR 25.108(d)(1)
list, with appropriate justifications, shall be submitted to the
Procurement Executive.

**Subpart 925.2 --- Buy American Act Construction Materials**

**925.202 Policy.**

\(b\) Contracting officers may make the determination required by FAR
25.202(a)(3). If the cost of the materials is expected to exceed
\$100,000, the Head of the Contracting Activity shall approve the
determination.

**925.204 Violations.**

Contracting officers shall make a complete written report (in
triplicate) to the Secretary through the Procurement Executive of each
violation of the Buy American Act.Construction Materials clause at
52.225-5.

**Subpart 925.7 --- Restrictions on certain foreign purchases**

**925.702 Restrictions.**

No contract may be awarded to a company owned by an entity controlled by
a foreign government if performance of the contract will require access
to proscribed information. See 904.71 for additional guidance.

\[59 FR 6221, Feb. 10, 1994\]

**Subpart 925.9 --- Additional Foreign Acquisition Clauses**

**925.901 Omission of the Audit Clause**

\(c\) Conditions for omission.

Any proposed determinations and any reports mentioned at (FAR) 48 CFR
25.901 shall be forwarded to the Director, Office of Contract
Management, within the Headquarters procurement organization.

\[59 FR 9102, Feb 25, 1994; 61 FR 21975, May 13, 1996\]

**Subpart 925.70 --- Acquisition of Nuclear Hot Cell Services**

**925.7000 Scope of subpart.**

This subpart prescribes policies for selection for contract award of
nuclear hot cell services when one of the competitors is a foreign
company **.** This subpart does not apply to the acquisition and use of
nuclear hot cell facilities on-site at a DOE-owned or -leased facility.

**925.7001** **Definitions.**

*Costs related to the decommissioning of nuclear facilities*, as used in
this subpart, means any cost associated with the compliance with
regulatory requirements governing the decommissioning of nuclear
facilities licensed by the Nuclear Regulatory Commission. Such costs for
foreign facilities and for Department of Energy facilities are costs of
decommissioning associated with the compliance with foreign regulatory
requirements or the Department\'s own requirements.

*Costs related to the storage and disposal of nuclear waste*, as used in
this subpart, means any costs, whether required by regulation or
incurred as a matter of prudent business practice, associated with the
storage or disposal of nuclear waste.

*Foreign company*, as used in this subpart, means a company which offers
to perform nuclear hot cell services at a facility which is not subject
to the laws and regulations of the United States, its agencies, and its
political subdivisions.

*Nuclear hot cell services*, as used in this subpart, means services
related to the examination of, or performance of various operations on,
nuclear fuel rods, control assemblies, or other components that are
emitting large quantities of ionizing radiation, after discharge from
nuclear reactors, which are performed in specialized facilities located
away from commercial nuclear power plants, generally referred to in the
industry as \"hot cells.\"

*Nuclear waste*, as used in this subpart, means any radioactive waste
material subject to regulation by the Nuclear Regulatory Commission or
the Department of Energy, or in the case of foreign offers, by
comparable foreign organizations.

*United States company*, as used in this subpart, means a company which
offers to perform nuclear hot cell services at a facility subject to the
laws and regulations of the United States, its agencies, and its
political subdivisions.

**925.7002** **Policy.**

In selecting offer(s) for award of contracts for nuclear hot cell
services, costs related to the decommissioning of nuclear facilities and
storage and disposal of nuclear waste are to be considered in a way
which affords United States and foreign companies an equal competition
in accordance with 925.7003. Upon determining that no offer from a
foreign firm has a reasonable chance of being selected for award, the
requirements of this subpart will not apply.

**925.7003 Requirements.**

\(a\) For the acquisition of nuclear hot cell services under the
conditions in paragraph (b) below, the selection official in evaluating
competitive offers for selection purposes only shall:

\(1\) consider neither costs related to the decommissioning of nuclear
waste facilities nor costs related to the storage and disposal of
nuclear waste, or

\(2\) add these costs to offers of foreign companies.

\(b\) The requirements of this section apply under the following
circumstances:

\(1\) One or more of the offers is submitted by a United States company
and includes costs related to the decommissioning of nuclear facilities
and costs related to the storage and disposal of nuclear waste because
it is subject to such costs; and

\(2\) One or more of the offers is submitted by a foreign company and
does not include these types of costs. (A foreign company might not be
subject to such costs or might not have to include these types of costs
in its offer if the firm is subsidized in decommissioning activity or
storage and disposal of nuclear waste, or a foreign government is
performing the activities below the actual cost of the activity.)

**925.7004 Contract clause.**

The contracting officer shall insert the clause at 952.225-70,
Subcontracting for nuclear hot cell services, in solicitations and
contracts involving nuclear hot cell services. This clause does not flow
down to second-tier subcontracts. \[58 FR 8909, Feb. 18, 1993\]

**PART 926 OTHER SOCIOECONOMIC PROGRAMS**

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

**Subpart 926.70 --- Implementation of Section 3021 of the Energy Policy
Act of 1992**

926.7001 Policy.

926.7002 Responsibilities.

926.7003 Review of the procurement request.

926.7004 Size standard for Energy Policy Act procurements.

926.7005 Preferences under the Energy Policy Act.

925.7006 Goal measurement and reporting requirements.

926.7007 Solicitation provisions and contract clauses.

**Subpart 926.71 --- Implementation of Section 3161 of the National
Defense Authorization Act for Fiscal Year 1993**

926.7101 Policy.

926.7102 Definition.

926.7103 Requirements.

926.7104 Contract clause.

**Subpart 926.70 --- Implementation of Section 3021 of the Energy Policy
Act of 1992**

**926.7001 Policy.**

\(a\) Section 3021(a) of the Energy Policy Act of 1992 (Pub. L.102-486)
specifies that the Department of Energy shall, to the extent
practicable, provide that not less than 10 percent of the total combined
amounts obligated for competitively awarded contracts and subcontracts
under the Energy Policy Act be expended with

\(1\) Small business concerns controlled by socially and economically
disadvantaged individuals or by women;

\(2\) Historically Black colleges and universities; or

\(3\) Colleges and universities having a student body in which more than
20 percent of the students are Hispanic Americans or Native Americans.

\(b\) These three groups are collectively referred to in this section as
\"Energy Policy Act target groups.\"

\(c\) Awards of Energy Policy Act procurements should be in the
following descending order of preference:

\(1\) Competitive awards pursuant to a set-aside for small disadvantaged
business;

\(2\) Competitive awards to small businesses owned and controlled by
socially and economically disadvantaged individuals and by women for
Energy Policy Act requirements under the Small Business
Administration\'s section 8(a) program; and

\(3\) Competitive awards that provide an evaluation preference in
accordance with 926.7006 to offerors from the Energy Policy Act target
groups.

\(d\) The DOE implementation of Section 3021 requirements with regard to
the award of subcontracts under Energy Policy Act procurements is
discussed at 926.7006.

\(e\) Competitive procedures, for purposes of Energy Policy Act
implementation, consist of awards under set-asides to small
disadvantaged business and firms certified as 8(a) Small Business
Administration and competitive procedures in accordance with (FAR) 48
CFR 15.6 and (DEAR) 48 CFR 915.6. \[60 FR 22300, May 5, 1995\]

**926.7002 Responsibilities.**

Offices initiating procurement requests have primary responsibility to
identify potential contract requirements falling within the scope of
section 3021 of the Energy Policy Act. Identification shall occur at the
earliest possible point in time in the acquisition cycle, but not later
than the submission of the procurement request to the contracting
officer. For purposes of Section 3021, a contract requirement is any
award that directly satisfies an Energy Policy Act program or
requirement. \[60 FR 22300, May 5, 1995\]

**926.7003 Review of the procurement request.**

Any Energy Policy Act procurement, including basic research contracts
with educational institutions, shall be reviewed in accordance with the
Small Business and 8(a) Program Review Procedures in order to ensure
that full consideration is given to the potential for making Energy
Policy Act awards. \[60 FR 22300, May 5, 1995; 61 FR 21975, May 13,
1996\]

**926.7004 Size standard for Energy Policy Act procurements.**

The size standard for Energy Policy Act engineering services
procurements (SIC 8711) shall be the size standard specified for
military and aerospace equipment and military weapons. \[60 FR 22300,
May 5, 1995\]

**926.7005 Preferences under the Energy Policy Act**.

\(a\) *Prime contracts*. Solicitations for all competitive Energy Policy
Act procurements not for 8(a) firms and in excess of the simplified
acquisition threshold shall provide for an evaluation

preference for offers received from entities from among the Energy
Policy Act target groups. The evaluation criteria shall provide that in
instances in which two or more proposals being considered for final
selection are ranked as essentially equal after consideration of all
technical and cost evaluation factors, and if one of these proposals is
from an offeror from among an Energy Policy Act target group that
offeror will be selected for award.

\(b\) *Subcontracts.* (1) The contracting officer shall assure that all
competitive Energy Policy Act solicitations over the simplified
acquisition threshold contain:

\(i\) A solicitation provision providing for consideration of the extent
to which the offerors have provided for subcontracting opportunities to
entities from among the Energy Policy Act target groups; and

\(ii\) A clause providing for the maximum utilization of entities from
among Energy Policy Act target groups in the performance of Energy
Policy Act contracts.

\(2\) In addition, the contracting officer shall assure that all
competitive Energy Policy Act procurements expected to exceed \$500,000
(\$1,000,000 for construction) include a clause for reporting after
award as part of the Small Business and Small Disadvantaged Business
Subcontracting Plan process. \[60 FR 22300, May 5, 1995\]

**926.7006 Goal measurement and reporting requirements.**

\(a\) *General.* The following types of contract awards for Energy
Policy Act procurements shall be counted toward achievement by DOE of
the 10 percent goal:

\(1\) Any award set-aside for small disadvantaged business;

\(2\) Any competitive section 8(a) award;

\(3\) Any competitive award to one of the three target groups under an
unrestricted procurement;

\(4\) Any award to one of the three target groups conducted under
simplified acquisition procedures in excess of the micro-purchase
threshold; and,

\(5\) Any competitively awarded subcontract to one of the three target
groups under a prime award.

\(b\) *Prime contract awards*. Award values and dollars obligated under
prime contracts and modifications to prime contracts for Energy Policy
Act requirements shall be reported through the Department of Energy
Procurement and Assistance Data System.

\(c\) *Subcontract awards*. The contractor shall be required to report,
on an annual Federal Government fiscal year basis, its progress against
Section 3021 goals by providing the actual dollar value of subcontract
payments and the relationship of those payments to the incurred contract
cost. If the contract includes reporting requirements under (FAR) 48 CFR
52.219-9, Small Business and Small Disadvantaged Business Subcontracting
Plan, the contractor\'s progress against the Section 3021 goals shall be
included as an addendum to Standard Form (SF) 294, Subcontracting Report
for Individual Contracts, and/or SF 295, Summary Subcontract Report, as
applicable, for the period that corresponds to the end of the Federal
Government fiscal year. \[60 FR 22300, May 5, 1995\]

**926.7007 Solicitation provisions and contract clauses.**

\(a\) The contracting officer shall insert the provision at 952.226-70,
Subcontracting Goals under Section 3021(a) of the Energy Policy Act of
1992 (Pub. L. 102-486) (Energy Policy Act), in solicitations for Energy
Policy Act procurements.

\(b\) The contracting officer shall insert the clause at 952.226-71,
Utilization of Energy Policy Act Target Entities, in contracts for the
Energy Policy Act requirements with an award value in excess of the
simplified acquisition threshold.

\(c\) The contracting officer shall insert the clause at 952.226-72,
Energy Policy Act Subcontracting Goals and Reporting Requirements, in
contracts for Energy

Policy Act requirements with an award value in excess of \$500,000
(\$1,000,000 in the case of construction).

\(d\) The contracting officer shall insert the provision at 48 CFR
952.226-73, Energy Policy Act Target Group Representation, in
solicitations for Energy Policy Act procurements.

\(e\) The contracting officer shall insert the clause at (FAR) 48 CFR
52.219-14, Limitation on Subcontracting, in contracts for Energy Policy
Act requirements with an entity from among the Energy Policy Act target
groups. \[60 FR 22300, May 5, 1995; 62 FR 42072, Aug. 5, 1997\]

**Subpart 926.71 --- Implementation of Section 3161 of the National
Defense Authorization Act for Fiscal Year 1993**

**926.7101 Policy**.

Consistent with the requirements of Section 3161(c)(2), 42 U.S.C.
7474h(c)(2), in instances where DOE has determined that a change in
workforce at a DOE Defense Nuclear Facility is necessary, the
Department, to the extent practicable, is required to provide employees
under Department of Energy contracts whose employment in positions at
such a facility is terminated with a preference in any hiring of the
Department. Consistent with published DOE guidance regarding Section
3161, such preference in hiring extends to hiring by DOE contractors and
subcontractors. \[62 FR 34842, Jun. 27, 1997\]

**926.7102 Definition**.

Eligible employee means a current or former employee of a contractor or
subcontractor employed at a DOE Defense Nuclear Facility.

\(1\) Whose position of employment has been, or will be, involuntarily
terminated (except if terminated for cause),

\(2\) Who has met the eligibility criteria contained in Department of
Energy guidance for contractor work force restructuring, as may be
amended or supplemented from time to time, and

\(3\) Who is qualified for a job vacancy with the Department or one of
its contractors with respect to work under its contract with the
Department at the time a position is available. \[62 FR 34842, Jun. 27,
1997\]

**926.7103 Requirements**.

\(a\) Section 3161, 42 U.S.C. 7474h, confers a continuing right to a
preference in hiring to an eligible employee of Department of Energy
Defense Nuclear Facilities. This right to a preference in hiring
includes employment opportunities of any Department of Energy
contractor, regardless of the place of performance of the contract.
Accordingly, eligible former employees of contractors and subcontractors
employed at Department of Energy Defense Nuclear Facilities, to the
extent practicable, shall be provided a hiring preference in employment
opportunities of other Department of Energy contractors for work under
their contracts.

\(b\) The Office of Worker and Community Transition (WT) is responsible
for establishing policies and procedures relating to the Department of
Energy implementation of Section 3161. Contracting Officers, in concert
with representatives of the field office responsible for implementation
of Section 3161 at the Department of Energy Defense Nuclear Facility and
local counsel, should consult with the Office of Worker and Community
Transition to determine applicability of Section 3161 requirements,
including hiring preference requirements, for displaced workers. \[62 FR
34842, Jun. 27, 1997\]

**926.7104 Contract clause**.

The contracting officer shall insert the clause at 48 CFR (DEAR)
952.226-74, Displaced Employee Hiring Preference, in contracts (except
for contracts for commercial items, pursuant to 41 U.S.C. 403) which
exceed \$500,000 in value. \[62 FR 34842, Jun. 27, 1997\]

**PART 927 --- PATENTS, DATA, AND COPYRIGHTS**

**Subpart 927.2 --- Patents**

927.200 Scope of subpart.

927.201 Authorization and consent.

927.201-1 General.

927.206 Refund of royalties.

927.206-1 General.

927.206-2 Clause for refund of royalties.

927.207 Classified Contracts.

927.207-1 General.

**Subpart 927.3 --- Patent Rights Under Government Contracts**

927.300 General.

927.302 Policy.

927.303 Contract Clauses.

927.304 Procedures.

927.370 (Reserved).

**Subpart 927.4 --- Technical Data and Copyrights**

927.400 Scope of Subpart.

927.402 Acquisition and use of technical data.

927.402-1 General.

927.402-2 Policy.

927.403 Negotiations and deviations.

927.404 Rights in Technical Data in Subcontracts.

927.404-70 Statutory Programs.

927.408 Cosponsored research and development activities.

927.409 Solicitation provisions and contract clauses.

**Subpart 927.40 --- (Reserved)**

Authority: Sec. 644 of the Department of Energy Organization Act, Pub.
L. 95-91 (42 U.S.C. 7254); Sec. 148 of the Atomic Energy Act of 1954, as
amended (42 U.S.C. 2168); Federal Nonnuclear Energy Research and
Development Act of 1974, Sec. 9, (42 U.S.C. 5908); Atomic Energy Act of
1954, as amended, Sec. 152, (42 U.S.C. 2182); Department of Energy
National Security and Military Applications of Nuclear Energy
Authorization Act of 1987, as amended, Sec. 3131(a), (42 U.S.C. 7261a.)

Source: 49 FR 12004, Mar. 28, 1984, unless otherwise noted and 59 FR
66259, Dec. 23, 1995.

**Subpart 927.2-Patents**

**927.200 Scope of subpart**.

When consulting Subpart 27.2 of the FAR, consider \"research,
development, and demonstration\" to replace the phrase \"research and
development\" or \"R&D,\" for the purposes of DOE actions.

**927.201 Authorization and consent.**

**927.201-1 General.**

In certain contracting situations, such as those involving research,
development, or demonstration projects, consideration should be given to
the impact of third party-owned patents covering technology that may be
incorporated in the project which patents may ultimately affect
widespread commercial use of the project results. In such situations,
Patent Counsel shall be consulted to determine what modifications, if
any, are to be made to the utilization of the Authorization and Consent
and Patent Indemnity provisions or what other action might be deemed
appropriate.

**927.206 Refund of Royalties.**

**927.206-1 General.**

The clause at 952.227-9, Refund of Royalties, obligates the contractor
to inform DOE of the payment of royalties pertaining to the use of
intellectual property, either patent or data related, in the performance
of the contract. This information may result in identification of
instances in which the Government already has a license for itself or
others acting in its behalf or the right to sublicense others. Also,
there may be pending anti-trust actions or challenges to the validity of
a patent or the proprietary nature of the data, or the contractor may be
able to gain unrestricted access to the same data through other sources.
In such situations the contractor may avoid the payment of a royalty in
its entirety or may be charged a reduced royalty.

**927.206-2 Clause for refund of royalties.**

The contracting officer shall insert the clause at 952.227-9, Refund of
Royalties, in solicitations and contracts for experimental, research,
developmental, or demonstration work or other solicitations and
contracts in which the contracting officer believes royalties will have
to be paid by the contractor or a subcontractor of any tier.

**927.207 Classified contracts.**

**927.207-1 General.**

Unauthorized disclosure of classified subject matter, whether in a
patent application or resulting from the issuance of a patent, may be a
violation of the Atomic Energy Act of 1954, as amended, other laws
relating to espionage and national security, and provisions of the
proposed contract pertaining to disclosure of information.

**Subpart 927.3 --- Patent Rights Under** **Government Contracts**

**927.300 General.**

\(a\) One of the primary missions of the Department of Energy is the use
of its procurement process to ensure the conduct of research,
development, and demonstration leading to the ultimate commercialization
of efficient sources of energy. To accomplish its mission, DOE must work
in cooperation with industry in the development of new energy sources
and in achieving the ultimate goal of widespread commercial use of those
energy sources. To this end, Congress has provided DOE with the
authority to invoke an array of incentives to secure the
commercialization of new technologies developed for DOE. One such
important incentive is provided by the patent system.

\(b\) Pursuant to 42 U.S.C. 2182 and 42 U.S.C. 5908, DOE takes title to
all inventions conceived or first actually reduced to practice in the
course of or under contracts with large, for-profit companies, foreign
organizations, and others not beneficiaries of Pub. L. 96-517.
Regulations dealing with Department\'s authority to waive its title to
subject inventions, including the relevant statutory objectives, exist
at 10 CFR part 784, or successor regulation. Pursuant to those
regulations, DOE may waive the Government\'s patent rights in
appropriate situations at the time of contracting to encourage
industrial participation, foster commercial utilization and competition,
and make the benefits of DOE activities widely available to the public.
In addition to considering the waiver of patent rights at the time of
contracting, DOE will also consider the incentive of a waiver of patent
rights upon the reporting of an identified invention when requested by
such entities or by the employee-inventor with the permission of the
contractor. These requests can be made whether or not a waiver request
was made at the time of contracting. Waivers for identified inventions
will be granted where it is determined that the patent waiver will be a
meaningful incentive to achieving the development and ultimate
commercial utilization of inventions. Where DOE grants a waiver of the
Government\'s patent rights, either at the time of contracting or after
an invention is made, certain minimum rights and obligations will be
required by DOE to protect the public interest.

\(c\) Another major DOE mission is to manage the nation\'s nuclear
weapons and other classified programs, where research and development
procurements are directed toward processes and equipment not available
to the public. To accomplish DOE programs for bringing private industry
into these and other special programs to the maximum extent permitted by
national security and policy considerations, it is desirable that the
technology developed in these programs be made available on a selected
basis for use in the particular fields of interest and under controlled
conditions by properly cleared industrial and scientific research
institutions. To ensure such availability and control, the grant of
waivers in these programs may necessarily be more limited, either by the
imposition of field of use restrictions or national security measures,
than in other DOE programs.

\[63 FR 10499, Mar. 4, 1998\]

**927.302 Policy.**

\(a\) Except for contracts with organizations that are beneficiaries of
Pub. L. 96-517, the United States, as represented by DOE, shall normally
acquire title in and to any invention or discovery conceived or first
actually reduced to practice in the course of or under the contract,
allowing the contractor to retain a nonexclusive, revocable, paid-up
license in the invention and the right to request permission to file an
application for a patent and retain title to any ensuing patent in any
foreign country in which DOE does not elect to secure patent rights. DOE
may approve the request if it determines that such approval would be in
the national interest. The contractor\'s nonexclusive license may be
revoked or modified by DOE only to the extent necessary to achieve
expeditious practical application of the invention pursuant to any
application for and the grant of an exclusive license in the invention
to another party.

\(b\) In contracts having as a purpose the conduct of research,
development, or demonstration work and in certain other contracts, DOE
may need to require those contractors that are not the beneficiaries of
Pub. L. 96- 517 to license background patents to ensure reasonable
public availability and accessibility necessary to practice the subject
of the contract in the fields of technology specifically contemplated in
the contract effort. That need may arise where the contractor is not
attempting to take the technology resulting from the contract to the
commercial marketplace, or is not meeting market demands. The need for
background patent rights and the particular rights that should be
obtained for either the Government or the public will depend upon the
type, purpose, and scope of the contract effort, impact on the DOE
program, and the cost to the Government of obtaining such rights.

\(c\) Provisions to deal specifically with DOE background patent rights
are contained in paragraph (k) of the clause at 952.227-13. That
paragraph may be modified with the concurrence of Patent Counsel in
order to reflect the equities of the parties in particular contracting
situations. Paragraph (k) should normally be deleted for contracts with
an estimated cost and fee or price of \$250,000 or less and may not be
appropriate for certain types of study contracts; for planning
contracts; for contracts with educational institutions; for contracts
for specialized equipment for in-house Government use, not involving use
by the public; and for contracts the work products of which will not be
the subject of future procurements by the Government or its contractors.

\(d\) The Assistant General Counsel for Technology Transfer and
Intellectual Property shall:

\(1\) Make the determination that whether reported inventions are
subject inventions under the patent rights clause of the contract;

\(2\) Determine whether and where patent protection will be obtained on
inventions;

\(3\) Represent DOE before domestic and foreign patent offices;

\(4\) Accept assignments and instruments confirmatory of the
Government\'s rights to inventions; and

\(5\) Represent DOE in patent, technical data, and copyright matters not
specifically reserved to the Head of the Agency or designee under these
regulations.

**927.303 Contract clauses.**

\(a\) In solicitations and contracts for experimental, research,
developmental, or demonstration work (but see FAR 27.304-3 regarding
contracts for construction work or architect-engineer services), the
contracting officer shall include the clause:

\(1\) At 952.227-13, Patent Rights Acquisition by the Government, in all
such contracts other than those described in paragraphs (a)(2) and
(a)(3) of this section;

\(2\) At 952.227-11, Patent Rights by the Contractor (Short Form), in
contracts in which the contractor is a domestic small business or
nonprofit organization as defined at FAR 27.301, except where the work
of the contract is subject to an Exceptional Circumstances Determination
by DOE; and

\(3\) At 970.5227-10, 970.5227-11, or 970.5227-12, as discussed in
970.27, Patent, Data, and Copyrights, in contracts for the management
and operation of DOE laboratories and production facilities.

\(b\) DOE shall not use the clause at FAR 52.227-12 except in situations
where patent counsel grants a request for advance waiver, pursuant to 10
CFR part 784, and supplies the contracting officer with that clause with
appropriate modifications. Otherwise, in instances in which DOE grants
an advance waiver or waives its rights in an identified invention,
pursuant to 10 CFR part 784, contracting officers shall consult with
patent counsel for the appropriate clause.

\(c\) Any contract that has as a purpose the design, construction,
operation, or management integration of a collection of contracts for
the same purpose, of a Government-owned research, development,
demonstration or production facility must accord the Government certain
rights with respect to further use of the facility by or on behalf of
the Government upon termination of the contract. The patent rights
clause in such contracts must include the following facilities license
paragraph:

\[Insert appropriate paragraph no.\] Facilities License. In addition to
the rights of the parties with respect to inventions or discoveries
conceived or first actually reduced to practice in the course of or
under this contract, the Contractor agrees to and does hereby grant to
the Government an irrevocable, nonexclusive, paid-up license in and to
any inventions or discoveries regardless of when conceived or actually
reduced to practice or acquired by the Contractor at any time through
completion of this contract and which are incorporated or embodied in
the construction of the facility or which are utilized in the operation
of the facility or which cover articles, materials, or products
manufactured at the facility (1) to practice or have practiced by or for
the Government at the facility, and (2) to transfer such license with
the transfer of that facility. Notwithstanding the acceptance or
exercise by the Government of these rights, the Government may contest
at any time the enforceability, validity or scope of, title to, any
rights or patents herein licensed.

(End of paragraph)

\[63 FR 10499, Mar. 4, 1998; 65 FR 68932, Nov. 15, 2000; 65 FR 80994,
Dec. 22, 2000\]

**927.304 Procedures.**

Where the contract contains the clause at 952.227-11 and the contractor
does not elect to retain title to a subject invention, DOE may consider
and, after consultation with the contractor, grant requests for
retention of rights by the inventor subject to the provisions of 35
U.S.C. 200 et seq. This statement is in lieu of FAR 27.304-1(c).

**927.370 \[Reserved\]**

\[63 FR 10499, Mar. 4, 1998\]

**Subpart 927.4 --- Technical Data and** **Copyrights**

**927.400 Scope of subpart.**

This subpart sets forth DOE\'s policy, procedures, and instructions for
contract clauses with respect to the acquisition and use of technical
data and copyrights in contracts or subcontracts entered into, with or
for the benefit of the Government.

\[63 FR 10499, Mar. 4, 1998\]

**927.402 Acquisition and use of technical data.**

**927.402-1 General.**

\(a\) The provisions herein pertain to research, development,
demonstration and supply contracts. Special considerations for contracts
for the operation, design, or construction of Government-owned
facilities are covered by Subpart 970.27. Under DOE\'s broad charter to
perform research, development, and demonstration work, in both nuclear
and non-nuclear fields, and to meet the objectives stated in 927.402-2,
DOE has extensive needs for technical data. The satisfaction of these
needs and the achievement of DOE\'s objectives through a sound data
policy are found in the balancing of the needs and equities of the
Government, its contractors, and the general public.

\(b\) It is important to keep a clear distinction between contract
requirements for the delivery of technical data and rights in technical
data. The legal rights which the Government acquires in technical data
in DOE contracts, other than management and operating contracts (see 48
CFR 970.2704) and other contracts involving the production of data
necessary for the management or operation of DOE facilities or a DOE
site, are set forth in Rights in Data --- General clause at 48 CFR
52.227-14 as modified in accordance with 927.409 of this subpart. In
those contracts involving the production of data necessary for the
management or operation of DOE facilities or a DOE site, after
consultation with Patent Counsel the clause at 48 CFR 970.5227-1 shall
be used. However, those clauses do not obtain for the Government
delivery of any data whatsoever. Rather, known requirements for the
technical data to be delivered by the contractor shall be set forth as
part of the contract. The Additional Technical Data Requirements clause
at 48 CFR 52.227-16 may be used along with the Rights in Data ---
General clause to enable the contracting officer to require the
contractor to furnish additional technical data, the requirement for
which was not known at the time of contracting. There is, however, a
built-in limitation on the kind of technical data which a contractor may
be required to deliver under either the contract or the Additional
Technical Data Requirements clause. This limitation is found in the
withholding provision of paragraph (g) of the Rights in Data --- General
clause at 48 CFR 52.227-14, as amended at 48 CFR 927.409(a), which
provides that the Contractor need not furnish limited rights data or
restricted computer software. Unless Alternate II or III to the Rights
in Data --- General clause is used, it is specifically intended that the
contractor may withhold limited rights data or restricted computer
software even though a requirement for technical data specified in the
contract or called for delivery pursuant to the Additional Technical
Data Requirements clause would otherwise require the delivery of such
data.

\(c\) In contracts involving access to certain categories of DOE-owned
restricted data, as set forth in 10 CFR Part 725, DOE has reserved the
right to receive reasonable compensation for the use of its inventions
and discoveries, including its related data and technology. Accordingly,
in contracts where access to such restricted data is to be provided to
contractors, the following parenthetical phrase shall be inserted after
\"contract data\" in paragraph (b)(2)(ii) of the clause at 952.227-75,
after \"technical data\" in paragraph (b)(2) of the clause at
952.227-77, or after \"technical data\" in paragraph (b)(2)(ii) of the
clause at 952.227-78 as appropriate: \"(except Restricted Data in
category C-24, 10 CFR Part 725, in which DOE has reserved the right to
receive reasonable compensation for the use of its inventions and
discoveries, including related data and technology).\" In addition,
there are other types of contract situations (e.g., no cost contracts
for studies or evaluation) wherein the contractor is given access to
restricted data. In such contract situations, limitations on the use of
such data may be appropriate.

\[63 FR 10499, Mar. 4, 1998; 65 FR 80994, Dec. 22, 2000\]

**927.402-2 Policy.**

The technical data policy is directed toward achieving the following
objectives:

\(a\) Making the benefits of the energy research, development and
demonstration programs of DOE widely available to the public in the
shortest practicable time;

\(b\) Promoting the commercial utilization of the technology developed
under DOE programs;

\(c\) Encouraging participation by private persons in DOE energy
research, development, and demonstration programs; and

\(d\) Fostering competition and preventing undue market concentration or
the creation or maintenance of other situations inconsistent with the
antitrust laws.

**927.403 Negotiations and deviations.**

Contracting officers shall contact Patent Counsel assisting their
contracting activity or the Assistant General Counsel for Technology
Transfer and Intellectual Property for assistance in selecting,
negotiating, or approving appropriate data and copyright clauses in
accordance with the procedures set forth in this subpart and 48 CFR part
27.4. In particular, contracting officers shall seek the prompt and
timely advice of Patent Counsel regarding any situation not in
conformance with this subpart and prescribed clauses, including the
inclusion or modification of alternate paragraphs of the Rights in Data
clause at 48 CFR 52.227-14, as amended at 48 CFR 927.409(a), the
exclusion of specific items from said clause, the exclusion of the
Additional Technical Data Requirements clause at 48 CFR 52.227-16, and
the inclusion of any special provisions in a particular contract.

\[63 FR 10499, Mar. 4, 1998\]

**927.404 Rights in Technical Data in Subcontracts \[DOE coverage
paragraphs (g), (k), (l), and (m)\].**

(g)(4) Contractors are required by paragraph (d)(3) of the clause at FAR
52.227-14, as modified pursuant to 48 CFR 927.409(a)(1), to acquire
permission from DOE to assert copyright in any computer software first
produced in the performance of the contract. This requirement reflects
DOE\'s established software distribution program, recognized at FAR
27.404(g)(2), and the Department\'s statutory dissemination obligations.
When a contractor requests permission to assert copyright in accordance
with paragraph (d)(3) of the Rights in Data - General clause as
prescribed for use at 48 CFR 927.409(a)(1), Patent Counsel shall
predicate its decision on the considerations reflected in paragraph (e)
of the clause at 970.5204-82 Rights in Data - Technology Transfer.

\(k\) Subcontracts. (1)(i) It is the responsibility of prime contractors
and higher tier subcontractors, in meeting their obligations with
respect to contract data, to obtain from their subcontractor the rights
in, access to, and delivery of such data on behalf of the Government.
Accordingly, subject to the policy set forth in this subpart, and
subject to the approval of the contracting officer, where required,
selection of appropriate technical data provisions for subcontracts is
the responsibility of the prime contractors or higher-tier
subcontractors. In many, but not all instances, use of the Rights in
Technical Data clause of FAR 52.227-14, as modified pursuant to 48 CFR
927.409(a)(1), in a subcontract will provide for sufficient Government
rights in and access to technical data. The inspection rights afforded
in Alternate V of that clause normally should be obtained only in
first-tier subcontracts having as a purpose the conduct of research,
development, or demonstration work or the furnishing of supplies for
which there are substantial technical data requirements as reflected in
the prime contract.

\(ii\) If a subcontractor refuses to accept technical data provisions
affording rights in and access to technical data on behalf of the
Government, the contractor shall so inform the contracting officer in
writing and not proceed with the award of the subcontract without
written authorization of the contracting officer.

\(iii\) In prime contracts (or higher-tier subcontracts) which contain
the Additional Technical Data Requirements clause at FAR 52.227-16, it
is the further responsibility of the contractor (or higher-tier
subcontractor) to determine whether inclusion of such clause in a
subcontract is required to satisfy technical data requirements of the
prime contract (or higher-tier subcontract).

\(2\) As is the case for DOE in its determination of technical data
requirements, the Additional Technical Data Requirements clause at FAR
52.227-16 should not be used at any subcontracting tier where the
technical data requirements are fully known. Normally, the clause will
be used only in subcontracts having as a purpose the conduct of
research, development, or demonstration work. Prime contractors and
higher-tier subcontractors shall not use their power to award
subcontracts as economic leverage to acquire rights in the
subcontractor\'s limited rights data or restricted computer software for
their private use, and they shall not acquire rights to limited rights
data or restricted computer software on behalf of the Government for
standard commercial items without the prior approval of Patent Counsel.

\(l\) Contractor licensing. In many contracting situations the
achievement of DOE\'s objectives would be frustrated if the Government,
at the time of contracting, did not obtain on behalf of responsible
third parties and itself limited license rights in and to limited rights
data or restricted computer software or both necessary for the practice
of subject inventions or data first produced or delivered in the
performance of the contract. Where the purpose of the contract is
research, development, or demonstration, contracting officers should
consult with program officials and Patent Counsel to consider whether
such rights should be acquired. No such rights should be obtained from a
small business or non-profit organization, unless similar rights in
background inventions of the small business or non-profit organization
have been authorized in accordance with 35 U.S.C. 202(f). In all cases
when the contractor has agreed to include a provision assuring
commercial availability of background patents, consideration should be
given to securing for the Government and responsible third parties at
reasonable royalties and under appropriate restrictions, co-extensive
license rights for data which are limited rights data and restricted
computer software. When such license rights are deemed necessary, the
Rights in Data-General clause at FAR 52.227-14 should be supplemented by
the addition of Alternate VI as provided at 48 CFR 952.227-14. Alternate
VI will normally be sufficient to cover limited rights data and
restricted computer software for items and processes that were used in
the contract and are

necessary in order to insure widespread commercial use or practical
utilization of a subject of the contract. The expression \"subject of
the contract\" is intended to limit the licensing required in Alternate
VI to the fields of technology specifically contemplated in the contract
effort and may be replaced by a more specific statement of the fields of
technology intended to be covered in the manner described in the patent
clause at 48 CFR 952.227-13 pertaining to \"Background Patents.\" Where,
however, limited rights data and restricted computer software cover the
main purpose or basic technology of the research, development, or
demonstration effort of the contract, rather than subcomponents,
products, or processes which are ancillary to the contract effort, the
limitations set forth in subparagraphs (k)(1) through (k)(4) of
Alternate VI of 48 CFR 952.227-14 should be modified or deleted.
Paragraph (k) of 48 CFR 952.227-14 further provides that limited rights
data or restricted computer software may be specified in the contract as
being excluded from or not subject to the licensing requirements
thereof. This exclusion can be implemented by limiting the applicability
of the provisions of paragraph (k) of 48 CFR 952.227-14 to only those
classes or categories of limited rights data and restricted computer
software determined as being essential for licensing. Although
contractor licensing may be required under paragraph (k) of 48 CFR
952.227-14, the final resolution of questions regarding the scope of
such licenses and the terms thereof, including provisions for
confidentiality, and reasonable royalties, is then left to the
negotiation of the parties.

\(m\) Access to restricted data. In contracts involving access to
certain categories of DOE-owned Category C-24 restricted data, as set
forth in 10 CFR part 725, DOE has reserved the right to receive
reasonable compensation for the use of its inventions and discoveries,
including its related data and technology. Accordingly, in contracts
where access to such restricted data is to be provided to contractors,
Alternate VII shall be incorporated into the rights in technical data
clause of the contract. In addition, in any other types of contracting
situations in which the contractor may be given access to restricted
data, appropriate limitations on the use of such data must be specified.

\[63 FR 10499, Mar. 4, 1998; 65 FR 80994, Dec. 22, 2000\]

**927.404 Rights in Technical Data in Subcontracts \[DOE coverage
paragraphs (g), (k), (l), and (m)\].**

(g)(4) Contractors are required by paragraph (d)(3) of the clause at FAR
52.227-14, as modified pursuant to 48 CFR 927.409(a)(1), to acquire
permission from DOE to assert copyright in any computer software first
produced in the performance of the contract. This requirement reflects
DOE\'s established software distribution program, recognized at FAR
27.404(g)(2), and the Department\'s statutory dissemination obligations.
When a contractor requests permission to assert copyright in accordance
with paragraph (d)(3) of the Rights in DataGeneral clause as prescribed
for use at 48 CFR 927.409(a)(1), Patent Counsel shall predicate its
decision on the considerations reflected in paragraph (e) of the clause
at 48 CFR 970.5227-2 Rights in Data - Technology Transfer.

\(k\) Subcontracts. (1)(i) It is the responsibility of prime contractors
and higher tier subcontractors, in meeting their obligations with
respect to contract data, to obtain from their subcontractor the rights
in, access to, and delivery of such data on behalf of the Government.
Accordingly, subject to the policy set forth in this subpart, and
subject to the approval of the contracting officer, where required,
selection of appropriate technical data provisions for subcontracts is
the responsibility of the prime contractors or higher-tier
subcontractors. In many, but not all instances, use of the Rights in
Technical Data clause of FAR 52.227-14, as modified pursuant to 48 CFR
927.409(a)(1), in a subcontract will provide for sufficient Government
rights in and access to technical data. The inspection rights afforded
in Alternate V of that clause normally should be obtained only in
first-tier subcontracts having as a purpose the conduct of research,
development, or demonstration work or the furnishing of supplies for
which there are substantial technical data requirements as reflected in
the prime contract.

\(ii\) If a subcontractor refuses to accept technical data provisions
affording rights in and access to technical data on behalf of the
Government, the contractor shall so inform the contracting officer in
writing and not proceed with the award of the subcontract without
written authorization of the contracting officer.

\(iii\) In prime contracts (or higher-tier subcontracts) which contain
the Additional Technical Data Requirements clause at FAR 52.227-16, it
is the further responsibility of the contractor (or

higher-tier subcontractor) to determine whether inclusion of such clause
in a subcontract is required to satisfy technical data requirements of
the prime contract (or higher-tier subcontract).

\(2\) As is the case for DOE in its determination of technical data
requirements, the Additional Technical Data Requirements clause at FAR
52.227-16 should not be used at any subcontracting tier where the
technical data requirements are fully known. Normally, the clause will
be used only in subcontracts having as a purpose the conduct of
research, development, or

demonstration work. Prime contractors and higher-tier subcontractors
shall not use their power to award subcontracts as economic leverage to
acquire rights in the subcontractor\'s limited rights data or restricted
computer software for their private use, and they shall not acquire
rights to limited rights data or restricted computer software on behalf
of the Government for standard commercial items without the prior
approval of Patent Counsel.

\(l\) Contractor licensing. In many contracting situations the
achievement of DOE\'s objectives would be frustrated if the Government,
at the time of contracting, did not obtain on behalf of responsible
third parties and itself limited license rights in and to limited rights
data or restricted computer software or both necessary for the practice
of subject inventions or data first produced or delivered in the
performance of the contract. Where the purpose of the contract is
research, development, or demonstration, contracting officers should
consult with program officials and Patent Counsel to consider whether
such rights should be acquired. No such rights should be obtained from a
small business or non-profit organization, unless similar rights in
background inventions of the small business or non-profit organization
have been authorized in accordance with 35 U.S.C. 202(f). In all cases
when the contractor has agreed to include a provision assuring
commercial availability of background patents, consideration should be
given to securing for the Government and responsible third parties at
reasonable royalties and under appropriate restrictions, co-extensive
license rights for data which are limited rights data and restricted
computer software. When such license rights are deemed necessary, the
Rights in Data-General clause at FAR 52.227-14 should be supplemented by
the addition of Alternate VI as provided at 48 CFR 952.227-14. Alternate
VI will normally be sufficient to cover limited rights data and
restricted computer software for items and processes that were used in
the contract and are necessary in order to insure widespread commercial
use or practical utilization of a subject of the contract. The
expression \"subject of the contract\" is intended to limit the
licensing required in Alternate VI to the fields of technology
specifically contemplated in the contract effort and may be replaced by
a more specific statement of the fields of technology intended to be
covered in the manner described in the patent clause at 48 CFR
952.227-13 pertaining to \"Background Patents.\" Where, however, limited
rights data and restricted computer software cover the main purpose or
basic technology of the research, development, or demonstration effort
of the contract, rather than subcomponents, products, or processes which
are ancillary to the contract effort, the limitations set forth in
subparagraphs (k)(1) through (k)(4) of Alternate VI of 48 CFR 952.227-14
should be modified or deleted. Paragraph (k) of 48 CFR 952.227-14
further provides that limited rights data or restricted computer
software may be specified in the contract as being excluded from or not
subject to the licensing requirements thereof. This exclusion can be
implemented by limiting the applicability of the provisions of paragraph
(k) of 48 CFR 952.227-14 to only those classes or categories of limited
rights data and restricted computer software determined as being
essential for licensing. Although contractor licensing may be required
under paragraph (k) of 48 CFR 952.227-14, the final resolution of
questions regarding the scope of such licenses and the terms thereof,
including provisions for confidentiality, and reasonable royalties, is
then left to the negotiation of the parties.

\(m\) Access to restricted data. In contracts involving access to
certain categories of DOE-owned Category C-24 restricted data, as set
forth in 10 CFR part 725, DOE has reserved the right to receive
reasonable compensation for the use of its inventions and discoveries,
including its related data and technology. Accordingly, in contracts
where access to such restricted data is to be provided to contractors,
Alternate VII shall be incorporated into the rights in technical data
clause of the contract. In addition, in any other types of contracting
situations in which the contractor may be given access to restricted
data, appropriate limitations on the use of such data must be specified.

\[63 FR 10499, Mar. 4, 1998\]

**927.404-70 Statutory Programs**.

Occasionally, Congress enacts legislation that authorizes or requires
the Department to protect from public disclosure specific data first
produced in the performance of the contract. Examples of such programs
are \"the Metals Initiative\" and section 3001(d) of the Energy Policy
Act. In such cases DOE Patent Counsel is responsible for providing the
appropriate contractual provisions for protecting the data in accordance
with the statute. Generally, such clauses will be based upon the Rights
in Data-General clause prescribed for use at 48 CFR 927.409(a) with
appropriate modifications to define and protect the \"protected data\"
in accordance with the applicable statute. When contracts under such
statutes are to be awarded, contracting officers must acquire from
Patent Counsel the appropriate contractual provisions. Additionally, the
contracting officer must consult with DOE program personnel and Patent
Counsel to identify data first produced in the performance of the
contract that will be recognized by the parties as protected data and
what data will be made available to the public notwithstanding the
statutory authority to withhold the data from public dissemination.

\[63 FR 10499, Mar. 4, 1998\]

**927.408 Cosponsored research and development activities**.

Because of the Department of Energy\'s statutory duties to disseminate
data first produced under its contracts for research, development, and
demonstration, the provisions of FAR 27.408 do not apply to cosponsored
or cost shared contracts.

\[63 FR 10499, Mar. 4, 1998\]

**927.409 Solicitation provisions and contract clauses. \[DOE coverage
paragraphs (a), (h), (s), and (t)\]**.

(a)(1) The contracting officer shall insert the clause at FAR 52.227-14,
Rights in Data-General, substituting the following paragraph (a) and
including the following paragraph (d)(3) and Alternate V in
solicitations and contracts if it is contemplated that data will be
produced, furnished, or acquired under the contract; except contracting
officers are authorized to use Alternate IV rather than paragraph (d)(3)
in contracts for basic or applied research with educational institutions
except where software is specified for delivery or except where other
special circumstances exist:

\(a\) Definitions.

\(1\) Computer data bases, as used in this clause, means a collection of
data in a form capable of, and for the purpose of, being stored in,
processed, and operated on by a computer. The term does not include
computer software.

\(2\) Computer software, as used in this clause, means (i) computer
programs which are data comprising a series of instructions, rules,
routines, or statements, regardless of the media in which recorded, that
allow or cause a computer to perform a specific operation or series of
operations and (ii) data comprising source code listings, design
details, algorithms, processes, flow charts, formulae, and related
material that would enable the computer program to be produced, created,
or compiled. The term does not include computer data bases.

\(3\) Data, as used in this clause, means recorded information,
regardless of form or the media on which it may be recorded. The term
includes technical data and computer software. For the purposes of this
clause, the term does not include data incidental to the administration
of this contract, such as financial, administrative, cost and pricing,
or management information.

\(4\) Form, fit, and function data, as used in this clause, means data
relating to items, components, or processes that are sufficient to
enable physical and functional interchangeability, as well as data
identifying source, size, configuration, mating, and attachment
characteristics, functional characteristics, and performance
requirements; except that for computer software it means data
identifying source, functional characteristics, and performance
requirements but specifically excludes the source code, algorithm,
process, formulae, and flow charts of the software.

\(5\) Limited rights data, as used in this clause, means data, other
than computer software, developed at private expense that embody trade
secrets or are commercial or financial and confidential or privileged.
The Government\'s rights to use, duplicate, or disclose limited rights
data are as set forth in the Limited Rights Notice of subparagraph
(g)(2) of this section if included in this clause.

\(6\) Restricted computer software, as used in this clause, means
computer software developed at private expense and that is a trade
secret; is commercial or financial and is confidential or privileged; or
is published copyrighted computer software, including minor
modifications of any such computer software. The Government\'s rights to
use, duplicate, or disclose restricted computer software are as set
forth in the Restricted Rights Notice of subparagraph (g)(3) of this
section if included in this clause.

\(7\) Technical data, as used in this clause, means recorded data,
regardless of form or characteristic, that are of a scientific or
technical nature. Technical data does not include computer software, but
does include manuals and instructional materials and technical data
formatted as a computer data base.

\(8\) Unlimited rights, as used in this clause, means the rights of the
Government to use, disclose, reproduce, prepare derivative works,
distribute copies to the public, including by electronic means, and
perform publicly and display publicly, in any manner, including by
electronic means, and for any purpose whatsoever, and to have or permit
others to do so.

(d)(3) The Contractor agrees not to assert copyright in computer
software first produced in the performance of this contract without
prior written permission of the DOE Patent Counsel assisting the
contracting activity. When such permission is granted, the Patent
Counsel

shall specify appropriate terms, conditions, and submission requirements
to assure utilization, dissemination, and commercialization of the data.
The Contractor, when requested, shall promptly deliver to Patent Counsel
a duly executed and approved instrument fully confirmatory of all rights
to which the Government is entitled.

\(2\) However, rights in data in these specific situations will be
treated as described, where the contract is

\(i\) For the production of special works of the type set forth in FAR
27.405(a), but the clause at FAR 52.227-14, Rights in Data-General,
shall be included in the contract and made applicable to data other than
special works, as appropriate (See paragraph (i) of FAR 27.409);

\(ii\) For the acquisition of existing data works, as described in FAR
27.405(b) (See paragraph (j) of FAR 27.409);

\(iii\) To be performed outside the United States, its possessions, and
Puerto Rico, in which case agencies may prescribe different clauses (See
paragraph (n) of FAR 27.409);

\(iv\) For architect-engineer services or construction work, in which
case contracting officers shall utilize the clause at FAR 52.227-17,
Rights in Data-Special Works;

\(v\) A Small Business Innovation Research contract (See paragraph (l)
of FAR 27.409);

\(vi\) For management and operation of a DOE facility (See 48 CFR
970.2704) or other contracts involving the production of data necessary
for the management or operation of DOE facilities or a DOE site, after
consultation with Patent Counsel (See 927.402-1(b)); or

\(vii\) Awarded pursuant to a statute expressly providing authority for
the protection of data first produced thereunder from disclosure or
dissemination. (See 927.404-70).

\(h\) The contracting officer shall insert the clause at FAR 52.227-16,
Additional Data Requirements, in solicitations and contracts involving
experimental, developmental, research, or demonstration work (other than
basic or applied research to be performed solely by a university or
college where the contract amount will be \$500,000 or less) unless all
the requirements for data are believed to be known at the time of
contracting and specified in the contract. See FAR

27.406(b). This clause may also be used in other contracts when
considered appropriate.

\(s\) Contracting officers shall incorporate the solicitation provision
at FAR 52.227-23, Rights to Proposal Data (Technical), in all requests
for proposals.

\(t\) Contracting officers shall include the solicitation provision at
952.227-84 in all solicitations involving research, developmental, or
demonstration work..

\[63 FR 10499, Mar. 4, 1998; 65 FR 80994, Dec. 22, 2000\]

**Subpart 927.70 \[Reserved\]**

**PART 928 --- BONDS AND INSURANCE**

**Subpart 928.1** **Bonds**

928.101-1 Policy on use.

928.103-3 Payment Bonds.

928.103-70 Review of performance and payment bonds for other than
construction.

**Subpart 928.3 Insurance**

928.301 Policy.

928.370 Service-type insurance policies.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12010, Mar. 28, 1984, unless otherwise noted.

**Subpart 928.1.Bonds**

**928.101-1 Policy on use**.

In addition to the restriction on use of bid guarantees in FAR
28.101-1(a), a bid guarantee may be required only for fixed price or
unit price contracts entered into as a result of sealed bidding. They
may not be required for negotiated contracts.

**928.103-3 Payment bonds**.

A determination that is in the best interest of the Government to
require payment bonds in connection with other than construction
contracts may be made by the contracting officer on individual
acquisitions.

**928.103-70 Review of performance and payment bonds for other than
construction**.

A performance or payment bond, other than an annual bond, shall not
antedate the contract to which it pertains.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 928.3.Insurance**

**928.301 Policy**.

The DOE policies and procedures for indemnification of DOE contractors
are set forth in FAR Part 50 and 950.

**928.370 Service-type insurance policies**.

\(a\) Service-type insurance policies are cost-reimbursement type
contracts or subcontracts in which the insurer provides claim and loss
adjustment services on a cost reimbursement basis, which satisfies state
and Federal insurance requirements.

\(b\) Service-type insurance policies may be used with contracting
officer approval, when one or more of the following conditions are
present:

\(1\) Pure risk commercial insurance is not available or, if available,
cost is not considered reasonable;

\(2\) Inherent risks in the contract are new and a part of the process
of commercialization;

\(3\) The service-type insurance is needed to implement jointly funded
projects; or

\(4\) The service-type insurance arrangement is considered in the
Government\'s best interest.

**PART 931 --- CONTRACT COST PRINCIPLES AND PROCEDURES**

**Subpart 931.1 --- Applicability**

931.102 Fixed-price contracts

**Subpart 931.2 --- Contracts with Commercial Organizations**

931.205-18 Independent research and development and bid and proposal
costs

931.205-32 Precontract costs

931.205-33 Professional and consultant service costs. Department
coverage - paragraph (g)

931.205-47 Costs related to legal and other proceedings

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11936, Mar. 28, 1984, unless otherwise noted.

**Subpart 931.1 --- Applicability**

**931.102 Fixed-price contracts.**

The intent of the first sentence of FAR 31.102 is that applicable
subparts of FAR Part 31 shall be used by the Government in (a) pricing
fixed-price prime contracts and modifications, (b) evaluating the
reasonableness of a prime contractor\'s (or prospective prime
contractor\'s) proposed subcontract (or subcontract modification)
prices, and (c) determining the allowability of contractor payments to
subcontractors in accordance with the provisions of FAR 31.204(b).

\[49 FR 12011, Mar. 28, 1984\]

**Subpart 931.2 --- Contracts With Commercial Organizations**

**931.205-18 Independent research and development (IR&D) and bid and
proposal (B&P) costs.**

(c)(2) IR&D costs are recoverable under DOE contracts to the extent they
are reasonable, allocable, not otherwise unallowable, and have potential
benefit or relationship to the DOE program. The term \`\`DOE program\'\'
encompasses the DOE total mission and its objectives. B&P costs are
recoverable under DOE contracts to the extent they are reasonable,
allocable, and not otherwise unallowable.

\[49 FR 12011, Mar. 28, 1984; 60 FR 3004, Jun.7 1995; 67 FR 14869\]

**931.205-19 Insurance and Indemnification. (DOE coverage-paragraph
(h)).**

\(h\) The contracting officer shall insert the clause at 48 CFR
952.231-71 in non-management and operating cost reimbursement contracts
involving work performed at facilities owned or leased by the Department
exceeding \$100,000,000.

\[67 FR 14869, Mar. 28, 2002\]

**931.205-32 Precontract costs.**

\(a\) To the extent practical, known expenditures of precontract costs
under DOE contracts should be governed by establishing advance
understandings as contemplated by FAR 31.109. Contracts that include
authorized precontract costs shall include the \"Date of Incurrence of
Cost\" clause specified at 952.231-70.

\(b\) The following limitations apply to establishment of advance
understandings relative to precontract costs:

\(1\) Precontract cost authorizations shall not be used to cover a
period in excess of 15 days, unless a longer period is approved by the
HCA based upon a written finding that such an allowance is reasonable,
and shall not be extended or renewed. A copy of the findings shall be
forwarded to the Procurement Executive at the time of approval. If
prolonged coverage is necessary, a letter contract shall be issued.

\(2\) All precontract cost authorizations shall be reviewed and approved
at a management level above the contracting officer.

\(3\) Retroactive precontract cost authorization and the predating of
contractual agreements shall not be used.

\(4\) Precontract cost authorizations shall not authorize the delivery
or furnishing of any goods or services from a contractor until after the
contract is executed.

\[49 FR 12011, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**931.205-33 Professional and consultant service costs. (Departmental
coverage - paragraph (g)).**

(g)(1) Reasonable litigation and other legal expenses are allowable when
incurred in accordance with 10 CFR part 719, Contractor Legal Management
Requirements, if not otherwise made unallowable by law or regulation or
provisions of the contract.

(2)(A) Cost reimbursement contracts involving work performed at
facilities owned or leased by the Department for an amount exceeding
\$100,000.00 are covered by this cost principle and 10 CFR part 719.

\(B\) This cost principle and 10 CFR part 719 are applicable to legal
counsel retained by the Department itself for litigation and other legal
services where the legal costs over the life of the matter for which
counsel has been retained are expected to exceed \$100,000.00.

\(3\) Contractors described in paragraph (g)(2)(A) of this section are
required to submit a Legal Management Plan within 60 days of execution
of a contract.

\[66 FR 4627, Jan. 18, 2001\]

**931.205-47 Costs related to legal and other proceedings. (DOE
coverage-paragraph (h)).**

\(h\) Costs Associated with Whistleblower Actions.

\(1\) Definitions for purposes of this paragraph (h):

*Covered contractors* and subcontractors means those contractors and
subcontractors with contracts exceeding \$5,000,000.

*Employee whistleblower action* means any action filed by an employee in
Federal or state court for redress of a retaliatory act by a contractor
and any administrative procedure initiated by an employee under 29 CFR
Part 24, 48 CFR subpart 3.9, 10 CFR Part 708 or 42 U.S.C. 7239.

*Retaliatory act* means a discharge, demotion, reduction in pay,
coercion, restraint, threat, intimidation or other similar negative
action taken against an employee by a contractor as a result of an
employee\'s activity protected as a whistleblower activity by a Federal

or state statute or regulation.

*Settlement and award costs* means defense costs and costs arising from
judicial orders, negotiated agreements, arbitration, or an order from a
Federal agency or board and includes compensatory damages, underpayment
for work performed, and reimbursement for a complainant employee\'s
legal counsel.

\(2\) For costs associated with employee whistleblower actions where a
retaliatory act is alleged against a covered contractor or
subcontractor, the contracting officer:

\(i\) May authorize reimbursement of costs on a provisional basis, in
appropriate cases;

\(ii\) Must consult with the Office of General Counsel whistleblower
costs point of contact, who will consult with other Headquarters points
of contact as appropriate, before making a final allowability
determination; and

\(iii\) Must determine allowability of defense, settlement and award
costs on a case-by-case basis after considering the terms of the
contract, relevant cost regulations, and the relevant facts and
circumstances, including federal law and policy prohibiting reprisal
against whistleblowers, available at the conclusion of the employee
whistleblower action.

\(3\) Covered contractors and subcontractors must segregate legal costs,
including costs of in-house counsel, incurred in the defense of an
employee whistleblower action so that the costs are separately
identifiable.

\(4\) If a contracting officer provisionally disallows costs associated
with an employee whistleblower action for a covered contractor or
subcontractor, funds advanced by the Department may not be used to
finance costs connected with the defense, settlement and

award of an employee whistleblower action.

\(5\) Contractor defense, settlement and award costs incurred in
connection with the defense of suits brought by employees under section
2 of the Major Fraud Act of 1988 are excluded from coverage of this
section.

\[65 FR 62299, Oct. 18, 2000\]

**PART 932 --- CONTRACT FINANCING**

932.006 Procedures

**Subpart 932.1 --- General**

932.102 Description of Contract Financing Methods

**Subpart 932.3 --- Loan Guarantee for Defense Production**

932.304-2 Certificate of Eligibility

**Subpart 932.4 --- Advance Payments for Non-Commercial Items**

932.402 General

932.407 Interest

**Subpart 932.5 --- Progress Payments Based on Costs**

932.501-2 Unusual Progress Payments

**Subpart 932.6 --- Contract Debts**

932.605 Responsibility for Cooperation Among Government Officials

**Subpart 932.8 --- Assignment of Claims**

932.803 Policies

**Subpart 932.9 --- Prompt Payment**

932.970 Implementation of DOE Policies and Procedures

**Subpart 932.70 --- DOE Loan Guarantee Authority**

932.7002 Authority

932.7003 Policies

932.7004 Procedures

932.7004-1 Guaranteed Loans for Civilian Programs

932.7004-2 Criteria

932.7004-3 Eligibility

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12011, Mar. 28, 1984, unless otherwise noted.

**932.006-4 Procedures**.

\(a\) The remedy coordination official shall follow the procedures
identified in FAR 32.006-4.

\(b\) \[Reserved\]

\[63 FR 5272, Feb. 2, 1998\]

**Subpart 932.1 --- General**

**932.102 Description of contract financing methods \[DOE coverage
paragraph (e)\].**

(e)(2) Progress payments based on a percentage or stage of completion
may be authorized by the Head of the Contracting Activity when a
determination is made that progress payments based on costs cannot be
practically employed and that there are adequate safeguards provided for
the administration of progress payments based on a percentage or stage
of completion.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 932.3 --- Loan Guarantees for Defense Production**

**932.304-2 Certificate of eligibility.**

\(h\) Guaranteed loan applications shall be authorized and transmitted
to the Federal Reserve Bank only by the Secretary or designee specified
for that purpose.

**Subpart 932.4 --- Advance Payments for Non-Commercial Items**

**932.402 General.**

(e)(1) The Head of the Contracting Activity or designee shall have the
responsibility and authority for making findings and determinations, and
for approval of contract terms concerning advance payments.

\(2\) Before authorizing any advance payment arrangements, the approving
official shall obtain the advice, and other inputs of the servicing
finance office.

**932.407 Interest.**

(d)(4) Advance payments may be made without interest under
cost-reimbursement contracts for construction or engineering services.

**Subpart 932.5 --- Progress Payments Based on Costs**

**932.501-2 Unusual progress payments.**

(a)(3) The Head of the Contracting Activity shall forward all requests
which are considered favorable, with supporting information, to the
Procurement Executive, who, after coordination with the Chief Financial
Officer, Headquarters, will approve or deny the request.

\(d\) Requests for unusual progress payments will not be considered as a
handicap or adverse factor in the award of a contract; provided the bid
or proposal is not conditioned on approval of such request.

**Subpart 932.6 --- Contract Debts**

**932.605 Responsibilities and cooperation among Government officials.**

\(b\) The DOE contracting officer has primary responsibility for
determining the amount of contract debt and notifying the cognizant
finance office of such debt due the Government. The servicing DOE
finance office making payments under the contract has primary
responsibility for debt collection.

**Subpart 932.8 --- Assignment of Claims**

**932.803 Policies.**

\(d\) In the case of prime contracts, when it has been determined that
the financing of contracts will be facilitated in the interest of DOE
programs, it is the policy of DOE that such contracts provide, or be
amended without consideration (see Assignment of Claims Act of 1940) to
provide, in conformance with FAR 32.804, that payments to be made to an
assignee shall not be subject to reduction or setoff. In the case of
subcontracts, when loans are made for the purpose of financing
performance of subcontracts under DOE prime contracts, financing
institutions or the Government as guarantor in those instances in which
such loans are guaranteed should not be required to incur risks of loss
by reason of possible diversion of assigned subcontracts proceeds for
payment of other claims of the prime contractor against the borrower,
otherwise unrelated to the assigned subcontracts. The Head of the
Contracting Activity shall require the adoption of these policies and
practices by DOE prime contractors with respect to DOE subcontract work.
The Head of the Contracting Activity should inform the Chief Financial
Officer, Headquarters, of each DOE contractor who is unwilling to adopt
policies consistent with this paragraph and the reasons given in support
of the contractor\'s position.

**Subpart 932.9 --- Prompt Payment**

**932.970 Implementing DOE policies and procedures**.

\(a\) *Invoice payments*. (1) *Contract Settlement Date*. For purposes
of determining any interest penalties under cost-type contracts, the
effective date of contract settlement shall be the effective date of the
final contract modification issued to acknowledge contract settlement
and to close out the contract.

\(2\) *Constructive acceptance periods*. Where the contracting officer
determines, in writing, on a case-by-case basis, that it is not
reasonable or feasible for DOE to perform the acceptance or approval
function within the standard period, the contracting officer should
specify a longer constructive acceptance or approval period, as
appropriate. Considerations include, but are not limited to, the nature
of supplies or services involved, geographical site location, inspection
and testing requirements, shipping and acceptance terms, and available
DOE resources.

\(b\) *Contract financing payments*. Contracting officers may specify
payment due dates that are less than the standard 30 days when a
determination is made, in writing, on a case-by-case basis, that a
shorter contract financing payment cycle will be required to finance
contract work. In such cases, the contracting officer should coordinate
with the finance and program officials that will be involved in the
payment process to ensure that the contract payment terms to be
specified in solicitations and resulting contract awards can be
reasonably met. Consideration should be given to geographical
separation, workload, contractor ability to submit a proper request, and
other factors that could affect timing of payment. However, payment due
dates that are less than 7 days for progress payments or less than 14
days for interim payments on cost-type contracts are not authorized.

\[54 FR 9808, Mar. 8, 1989; 61 FR 41702, Aug. 9, 1996\]

**Subpart 932.70 --- DOE Loan Guarantee Authority**

**932.7002 Authority.**

Guaranteed loan applications shall be authorized and transmitted to the
Federal Reserve Board only by the Secretary, or designee specified for
that purpose, and only when made pursuant to enabling legislation or
other authority; e.g., by executive order or regulation.

**932.7003 Policies.**

The following policies governing the exercise of its loan guarantee
authority have been established by DOE:

\(a\) The use of the loan guarantee authority is not restricted to
contracts or subcontracts of any particular type or class. Each case is
to be evaluated on its own merits and under the particular circumstances
applicable thereto.

\(b\) The fact that a contract has been awarded as a result of
competitive bidding should not, of itself, render the loan ineligible
for guarantee by DOE if the contractor is financially responsible and
its need for working capital is the result of the impact of a defense
program or any other DOE program for which guaranteed loans are
authorized.

\(c\) The guarantee authority should, in general, not be used in
connection with loans to contractors required to furnish performance
bonds, except in those cases in which the time likely to be required for
the surety or DOE to take over in the event of default will result in
delays which cannot be tolerated by the particular program concerned.
When performance bonds have been furnished, the surety shall be required
to subordinate its rights in favor of the guaranteed loan.

\(d\) The criterion that the materials or services to be provided cannot
readily be acquired from alternative sources does not require the
finding that the materials or services are absolutely unobtainable
elsewhere. The criterion should be so applied as to permit guarantees of
loans when, although the materials or services can be obtained
elsewhere, such factors as the urgency of supply schedules, technical
capacity of the contractor, comparative prices, and time and expense
involved in reissuing the contract, including termination payment,
establish that it is to the Government\'s advantage not to resort to
alternative sources merely because the contractor or subcontractor may
require a guaranteed loan.

\(e\) If it is known at the time the contract is to be awarded that the
low offeror who is technically qualified and competent to furnish the
required materials and services will require a guaranteed loan, the
contracting officer should obtain appropriate advice and in reaching a
decision should consider at least the following:

\(1\) The savings to be realized by awarding the contract to the low
offeror;

\(2\) The risk to the Government in guaranteeing a loan; and

\(3\) The likelihood, if award is made to the second low offeror, of
that offeror\'s applying for a guaranteed loan at a later date.

Extreme care should be exercised in rejecting a low bid or proposal
simply because the low offeror requires a guaranteed loan.

\(f\) The amount of the loan should bear reasonable relationship to such
factors as the value and terms of the contract, the probable investment
required to be made by the contractor in payrolls and inventories, the
frequency with which contract payments are to be made, and the
borrower\'s current working capital position.

\(g\) Borrowings for working capital purposes under guaranteed loans
shall be limited to the amount necessary to perform the contract for
which the loan is sought. In order that the contractor will also use its
own funds in the performance of the contracts, amounts outstanding under
the loan or line-of-credit shall be limited to an amount not to exceed
90 percent of the borrower\'s investment in its contracts, regardless of
the total amount of the loan or line of credit authorized. The
borrower\'s investment includes all items for which the borrower would
be entitled to payment on performance or termination of contracts, but
does not include any items for which no work has been done nor
expenditures made.

\(h\) Unless there are exceptional circumstances, the loan should mature
not later than 30 days after the estimated date of final payment under
the contract.

**932.7004 Procedures.**

**932.7004-1 Guaranteed loans for civilian programs.**

The procedures for authorizing a guaranteed loan under legislation other
than section 301 of the Defense Production Act of 1950 (50 U.S.C. App.
2091) shall be essentially the same as those set forth in FAR 32.304,
Procedures, FAR 32.305, Loan Guarantees for Terminated Contracts, and
FAR 32.306 Loan Guarantee for Subcontracts; except that any contrary
provisions required by enabling legislation authorizing the loan shall
govern.

**932.7004-2 Criteria.**

\(a\) The materials or services to be furnished by the contractor are
necessary to the Government interest.

\(b\) The materials or services cannot as a practical matter be obtained
from alternate sources without delay or impeding the Government\'s
interest, except that no small business concern shall be held ineligible
for the issuance of such guarantee by reason of alternative sources of
supply.

\(c\) The contractor has demonstrated its inability to obtain the
necessary financing in conventional credit channels without the
guarantee.

\(d\) There is reasonable assurance that the loan can be repaid.

\(e\) The contractor is competent to perform the contract.

**932.7004-3 Eligibility.**

The applicant\'s eligibility for a guaranteed loan will be based on:

\(a\) Contracting officer determinations and findings regarding items
(a), (b) and (e) in 932.7004-2 as incorporated in a Certificate of
Eligibility (FAR 32.304-2); and

\(b\) The Chief Financial Officer\'s determination for items (c) and (d)
in 932.7004-2 based on information contained in the application, the
Federal Reserve Bank\'s report, and information furnished by the
contracting activity concerned.

**PART 933 --- PROTESTS, DISPUTES, AND APPEALS**

**Subpart 933.1 --- Protests.**

933.102 General \[DOE coverage paragraph (b)\].

933.103 Protests to the Agency.

933.104 Protests to GAO.

933.106 Solicitation provisions.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 51 FR 31336, Sept. 3, 1986, unless otherwise noted.

**Subpart 933.1 --- Protests.**

**933.102 General \[DOE coverage paragraph (b)\].**

\(b\) The Heads of Contracting Activities, for contracts estimated to be
within the limits of their delegated authority, may, without power of
redelegation, provide corrective relief in response to a protest in
accordance with 48 CFR 33.102(b).

\[62 FR 53754, Oct. 16, 1997\]

**933.103 Protests to the agency \[DOE coverage paragraphs (f), (i),
(j), and (k)\].**

\(f\) If FAR 33.103(f) requires that award be withheld or performance be
suspended or the awarded contract be terminated pending resolution of an
agency protest, authority to award and/or continue performance of the
protested contract may be requested by the Head of the Contracting
Activity (HCA), concurred in by counsel, and approved by the Procurement
Executive.

(i)(1) Protests filed with the contracting officer before or after award
shall be decided by the Head of the Contracting Activity except for the
following cases, which shall be decided by the Procurement Executive:

\(i\) The protester requests that the protest be decided by the
Procurement Executive.

\(ii\) The HCA is the contracting officer of record at the time the
protest is filed, having

signed either the solicitation where the award has not been made, or the
contract, where

the award or nomination of the apparent successful offeror has been
made.

\(iii\) The HCA concludes that one or more of the issues raised in the
protest have the potential for significant impact on DOE acquisition
policy.

\(2\) Upon receipt of a protest requesting a decision by the Procurement
Executive, the contracting activity shall immediately provide a copy of
the protest to the Office of Contract Management.

\(j\) The Department of Energy encourages direct negotiations between an
offeror

and the contracting officer in an attempt to resolve protests. In those
situations

where the parties are not able to achieve resolution, the Department
favors the use of

alternative dispute resolution (ADR) techniques to resolve protests. A
protest requesting

a decision at the Headquarters level shall state whether the protester
is willing to utilize

ADR techniques such as mediation or nonbinding evaluation of the protest
by a neutral. Upon receipt of a protest requesting a decision at the
Headquarters level, the Office of Contract Management will explore with
the protester whether the use of ADR techniques would be appropriate to
resolve the protest. Both parties must agree that the use of such
techniques is appropriate. If the parties do not mutually agree to
utilize ADR to resolve the protest, the protest will be processed in
accordance with the procedures set forth in paragraph (k).

\(k\) Upon receipt of a protest lodged with the Department, the
contracting officer shall prepare a report similar to that discussed in
FAR 33.104(a)(3)(iii). In the case of a protest filed at the
Headquarters level, the report shall be forwarded to the Office of
Contract Management within 21 calendar days of being notified of such a
protest with a proposed response to the protest.

The Procurement Executive (for protests at the Headquarters level or
those specific HCA protests cited in paragraph (i)(1) of this section)
or an HCA (for protests at the contracting activity level) will render a
decision on a protest within 35 calendar days, unless a longer period of
time is determined to be needed.

**933.104 Protests to GAO. \[DOE coverage paragraphs (a), (b), (c), and
(g)\]**.

(a)(2) The contracting officer shall provide the notice of protest.

\(b\) *Protests before award*. (1) When the Department has received
notice from the GAO

of a protest filed directly with the GAO, a contract may not be awarded
until the matter is

resolved, unless authorized by the Head of the Contracting Activity in
accordance with

FAR 33.104(b). Before the Head of the Contracting Activity authorizes
the award, the required finding shall be concurred in by the DOE counsel
handling the protest, endorsed by the Senior Program Official, and
approved by the Procurement Executive. The finding shall address the
likelihood that the protest will be sustained by the GAO.

\(c\) *Protests after award*. Before the Head of the Contracting
Activity authorizes performance, the finding required by FAR
33.104(c)(2) shall be concurred in by the DOE counsel handling the
protest, endorsed by the Senior Program Official, and approved by the
Procurement Executive.

\(g\) *Notice to GAO*. (1) The report to the GAO regarding a decision
not to comply with the GAO\'s recommendation, discussed at FAR
33.104(f), shall be provided by the HCA making the award, after approval
of the Procurement Executive. If a DOE-wide policy issue is involved,
the report shall be provided by the Procurement Executive.

\(2\) It is the policy of the Department to comply promptly with
recommendations set forth in

Comptroller General Decisions except for compelling reasons.

\(3\) The GAO does not have jurisdiction to consider subcontractor
protests.

**933.106 Solicitation provisions**.

\(a\) The contracting officer shall supplement the provision at FAR
52.233-2, Service of Protest,

in solicitations for other than simplified acquisitions by adding the
provision at 48 CFR 952.233-2.

\(b\) The contracting officer shall include the provision at 48 CFR
952.233-4 in solicitations for

purchases above the simplified acquisition threshold.

\(c\) The contracting officer shall include the provision at 48 CFR
952.233-5 in solicitations for

purchases above the simplified acquisition threshold.

\[61 FR 41702, Aug. 9, 1996\]

**PART 935 --- RESEARCH AND DEVELOPMENT CONTRACTING**

935.010 Scientific and technical reports.

935.070 Research misconduct.

935.071 Contract clause.

Authority: 42 U.S.C. 7101 *et seq.*; 41 U.S.C. 418b; 50 U.S.C. 2401 *et
seq.*

Source: 49 FR 12016, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**935.010 Scientific and technical reports.**

\(c\) All research and development contracts which require submission of
scientific and technical reports, shall include an instruction requiring
the contractor to submit all scientific and technical reports, and any
other notices or reports relating thereto, to the following address:
U.S. Department of Energy, Office of Scientific and Technical
Information, P.O. Box 62, Oak Ridge, TN 37831. The phrase \"any other
notices or reports relating thereto\" does not include notices or
reports concerning administrative matters such as contract cost or
financial data and information.

\(d\) Contractors shall be required to submit with each report a
completed DOE Form 1332.15, \"DOE and Major Contractor Recommendations
for Announcement and Distribution of Documents,\" except when the
contract is with an educational institution, in which case the
contractor shall be required to submit with each report a completed DOE
Form 1332.16, \"University Contractor, Grantee and Cooperative Agreement
Recommendations for Announcement and Distribution of Documents.\"

\[56 FR 41965, Aug. 26, 1991\]

**935.070 Research misconduct**.

\(a\) *Applicability*. The DOE research misconduct policy set forth at
10 CFR part 733 addresses research misconduct by individuals who
propose, perform or review research of any kind for the Department of
Energy pursuant to a contract. The regulation applies regardless of
where the research or other activity is conducted or by whom.

\(b\) *Definition.* Research misconduct means fabrication,
falsification, or plagiarism in proposing, performing, or reviewing
research, or in reporting research results. Research misconduct does not
include honest error or differences of opinion. A finding of research
misconduct means a determination based on a preponderance of the
evidence, that research misconduct has occurred, including a conclusion
that there has been a significant departure from accepted practices of
the relevant research community and that it be knowingly, intentionally,
or recklessly committed.

**935.071 Contract clause.**

The contracting officer must insert the clause at 952.235-71, Research
Misconduct, in contracts, including management and operating contracts,
that involve research.

\[70 FR 37010 Jun. 28, 2005\]

**PART 936 --- CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS**

**Subpart 936.2 --- Special Aspects of Contracting for Construction.**

936.202 Specifications.

**Subpart 936.6 --- Architect-Engineer Services.**

936.602-70 DOE selection criteria.

936.609-3 Work oversight in architect-engineer contracts.

**Subpart 936.7 --- Standard and Optional Forms for Contracting for
Construction, Architect-Engineer Services, and Dismantling, Demolition
or Removal of Improvements**

936.702 Forms for use in contracting architect-engineer services.

**Subpart 936.71 --- Inspection and Acceptance**

936.7100 Scope of subpart.

936.7101 Construction contracts.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12016, Mar. 28, 1984, unless otherwise noted.

**Subpart 936.2 --- Special Aspects of Contracting for Construction**

**936.202 Specifications.**

\(a\) To support all invitations for bids, plans and specifications will
be available on request to all prospective bidders, including general
contractors, subcontractors, and material and equipment suppliers. Where
the cost of reproduction is \$10 or more, the charge shall be a minimum
of \$10 and subject to a maximum of \$500, depending upon the size of
the project and the number of drawings and the volume of specifications
involved. Where the cost of reproduction is less than \$10, the
contracting officer has authority to make distribution at cost of
reproduction, or free of charge, as a particular situation dictates.

\(b\) No refund for the return of plans and specifications will be made
except when the invitation is canceled. Under such circumstances, refund
of payments will be made upon return of the plans and specifications in
good condition to the issuing office.

\(c\) Plans and specifications will be issued without charge to such
organizations as The Associated General Contractors of America, American
Road Builders\' Association, Dodge Reports, Blue Reports, Brown\'s
Letters, Inc., builders and contractors exchanges in the locality in
which the project is to be constructed, and others that maintain public
plan display rooms.

\(d\) Payments received for plans and specifications shall be handled in
accordance with the regulations prescribed by the General Accounting
Office in sections 3020-10 and 3030 of Title 7 of GAO Manual for
Guidance of Federal Agencies.

\(e\) If the contracting officer desires to have the architect-engineer
or construction manager handle the furnishing of plans and
specifications and payments therefor, the invitations for bids should so
state, and the architect-engineer or construction management contract
shall provide the manner in which the receipts are to be handled,
generally as a credit to the contract.

\(f\) No charge will be made to original receivers of plans and
specifications for revised sheets of drawings and revised pages of
specifications which are issued by amendments to invitations.

\(g\) Plans and specifications may be issued in complete sets only, or
in complete sets and parts of sets, as the Head of the Contracting
Activity determines to be best. If less than complete sets of plans and
specifications are issued, the distribution should be based on an
applicant\'s request for specific pages and drawing sheets.

\(h\) When a non-refundable fee is to be charged, a provision
substantially the same as 952.236-72 shall be included in the
solicitation.

\[60 FR 47308, Sept. 12, 1995\]

**Subpart 936.6 --- Architect-Engineer Services**

**936.602-70 DOE selection criteria.**

Contracting officers or architect-engineer evaluation boards shall apply
the evaluation criteria contained in this subsection, as appropriate,
and any special criteria developed for individual selections. When
special and additional criteria are to be used, they shall be set forth
in the public announcement required by 936.601, and a written
justification for their use shall be placed in the DOE file maintained
for the project.

\(a\) *General qualifications, including*:

\(1\) Reputation and standing of the firm and its principal members;

\(2\) Experience and technical competence of the firm in comparable
work;

\(3\) Past record in performing work for DOE, other Government agencies,
and private industry, including projects or contracts implemented with
no overruns; performance from the standpoint of cost including cost
overruns (last 5 years); the nature, extent, and effectiveness of
contractor\'s

cost reduction program; quality of work; and ability to meet schedules
including schedule overruns (last 5 years) (where applicable);

\(4\) The volume of past and present workloads;

\(5\) Interest of company management in the project and expected
participation and contribution of top officials;

\(6\) Adequacy of central or branch office facilities for the proposed
work, including facilities for any special services that may be
required;

\(7\) Geographic location of the home office and familiarity with the
locality in which the project is located;

\(8\) In addition to these requirements, consider the Architect-Engineer
firm\'s experience in energy efficiency, pollution prevention, waste
reduction, and the use of recovered and environmentally preferable
materials and other criteria at FAR 36.602-1.

(Source: 68 FR 6358, Feb. 7, 2003)

\(b\) *Personnel and organizations*.

\(1\) Specific experience and qualifications of personnel proposed for
assignment to the project, including, as required for various phases of
the work:

\(i\) Technical skills and abilities in planning, organizing, executing,
and controlling;

\(ii\) Abilities in overall project coordination and management; and

\(iii\) Experience in working together as a team;

\(2\) Proposed project organization, delegations of responsibility, and
assignments of authority;

\(3\) Availability of additional competent, regular employees for
support of the project, and the depth and size of the organization so
that any necessary expansion or acceleration could be handled
adequately;

\(4\) Experience and qualifications of proposed consultants and
subcontractors; and

\(5\) Ability to assign adequate qualified personnel from the proposed
organization (firms own organization, joint-venture organizations,
consulting firms, etc.) including key personnel

and a competent supervising representative.

\(c\) Additional (or special) criteria developed for the specific
project shall be considered and evaluated as may be appropriate.

**936.609-3 Work oversight in architect-engineer contracts.**

In addition to the clause at FAR 52.236-24, the contracting officer
shall insert the clause at 952.236-71 in architect-engineer contracts.

**Subpart 936.7 --- Standard and Optional Forms for Contracting for
Construction, Architect-Engineer Services, and Dismantling, Demolition,
or Removal of Improvements**

**936.702 Forms for use in contracting for architect-engineer
services.**

\(a\) The contracting officer shall also include the additional terms at
952.236 - 70 in Standard Form 252 item 6.

**Subpart 936.7100 --- Inspection and Acceptance**

**936.7100 Scope of subpart.**

This subpart implements and supplements FAR Part 36 by prescribing the
policies and requirements for inspection and acceptance under
construction contracts.

**936.7101 Construction contracts.**

\(a\) Inspection services may be performed by the architect-engineer
responsible for the design. Inspection services may not be procured from
a construction contractor with respect to its own work.

\(b\) When one contractor is to inspect the work of another, the
inspection contractor will be given written instructions defining its
responsibilities and stating that it is not authorized to modify the
terms and conditions of the contract, to direct additional work, to
waive any requirements of the contract, or to settle any claim or
dispute. Copies of the instructions will be given to the contractor who
is to be inspected, with a request to acknowledge receipt on a copy to
be returned to the contracting officer. In this manner, both contractors
are on express notice of the authority and limitations of the authority
of the inspecting contractor.

**PART 937 --- SERVICE CONTRACTING**

**Subpart 937.70 Protective services contracting**

937.7040 Contract clauses

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 11936, Mar. 28, 1984, unless otherwise noted.

**Subpart 937.70 --- Protective services contracting**

**937.7040 Contract clauses.**

The contracting officer shall insert the clause at 952.237-70 entitled
\"Collective bargaining agreements-protective services\" in all
protective services solicitations and contracts involving DOE-owned
facilities requiring continuity of services for public safety and
national defense reasons. See also, 922.103-5, Contract clauses, which
prescribes use of the clause at FAR 52.222-1, Notice to the Government
of Labor Disputes.

\[58 FR 36149, Jul. 6, 1993\]

**PART 939 --- ACQUISITION OF INFORMATION TECHNOLOGY**

**Subpart 939.70 --- Implementing DOE Policies and Procedures**

939.7000 Scope

939.7001 Outdated information technology equipment

939.7002 Contractor acquisition of information technology

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

\[62 FR 53754, Oct. 16, 1997\]

**Subpart 939.70 --- Implementing DOE Policies and Procedures**

**939.7000 Scope**.

This part sets forth the policies and procedures that apply to the
acquisition of information technology by the Department of Energy (DOE).

**939.7001 Outdated information technology equipment**.

Solicitations and contracts for, or using, outdated information
technology equipment shall be submitted to the Office of Management
Systems, Office of Procurement and Assistance Management for review and
approval. The Office of Information Management shall review these
documents and make the decision whether to allow the acquisition or use
of outdated information technology equipment.

**939.7002 Contractor acquisition of information technology**.

\(a\) Management and operating (M&O) contracts. Except as provided in
paragraph (c) of this section, M&O contractors and their subcontractors
shall not be used to acquire information technology unrelated to the
mission of the M&O contract either for sole use by DOE employees or
employees of other DOE contractors, or for use by other Federal agencies
or their contractors.

\(b\) Other than M&O contracts. Where it has been determined that a
contractor (other than an M&O contractor or its subcontractor) will
acquire information technology either for sole use by DOE employees or
for the furnishing of the information technology as government-
furnished property under another contract, and after receiving written
authorization from their cognizant DOE contracting office pursuant to 48
CFR part 51, DOE contractors working under cost-reimbursement-type
contracts may place orders against authorized contracts. All
authorizations to contractors shall expressly and specifically reference
the restriction regarding contractor use of the items acquired, cited at
48 CFR 951.102(e)(4)(iii).

\(c\) Consolidated contractor acquisitions. When common information
technology requirements in support of DOE programs have been identified
and it is anticipated that the consolidation of such requirements will
promote cost or other efficiencies, the Designated Senior Official for
Information Management may authorize an M&O contractor to acquire
information technology for use by the following:

\(1\) One or more other contractor(s) performing on-site at the same
DOE-owned or -leased facility as the M&O contractor, or

\(2\) Other M&O contractors.

\[62 FR 53754, Oct. 16, 1997\]

**PART 941 --- ACQUISITION OF UTILITY SERVICES**

**Subpart 941.2 --- Acquiring Utility Services**

941.201-70 DOE Directives

941.201-71 Use of Subcontracts

Authority: 42 U.S.C. 7254; 40 U.S.C. 486©.

Source: 61 FR 41702, Aug. 9, 1996

**Subpart 941.2 --- Acquiring Utility Services**

**941.201-70 DOE Directives.**

Utility services (defined at FAR 41.101) shall be acquired in accordance
with FAR part 41 and DOE Directives in subseries 4540 (Public Services).

**941.201-71 Use of subcontracts.**

Utility services for the furnishing of electricity, gas (natural or
manufactured), steam, water and/or sewerage at facilities owned or
leased by DOE shall not be acquired under a subcontract arrangement,
except as provided for at 48 CFR 970.4102-1 or if the prime contract is
with a utility company. \[65 FR 80994, Dec. 22, 2000\]

**PART 942.CONTRACT ADMINISTRATION**

**Subpart 942.2 --- Contract Administration Services**

940-270-1 Contracting Officers Representatives

940-270-2 Contract Clause

**Subpart 942.7 --- Indirect Costs**

942.704 Billing rates

942.705-1 Contracting officer determination procedure

942.705-3 Educational institutions

942.705-4 State and local governments

942.705-5 Nonprofit organizations other than educational institutions
and state and local governments

**Subpart 942.8 --- Disallowable Costs**

942.803 Disallowable costs after incurrence

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12026, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**Subpart 942.2 --- Contract Administration Services**

**942.270-1 Contracting Officer\'s Representatives.**

In accordance with internal agency procedures, a contracting officer may
designate other qualified personnel to be the Contracting Officer\'s
Representative (COR) for the purpose of performing certain technical
functions in administering a contract. These functions include, but are
not limited to, technical monitoring, inspection, approval of shop
drawings, testing, and approval of samples. The COR acts solely as a
technical representative of the contracting officer and is not
authorized to perform any function that results in a change in the
scope, price, terms or conditions of the contract. COR designations must
be made in writing by the contracting officer, and shall identify the
responsibilities and limitations of the designation. A copy of the COR
designation must be furnished to the contractor and the contract
administration office.

**942.270-2 Contract Clause.**

The clause at 952.242-70, or a clause substantially the same, may be
inserted in solicitations and contracts when a designated Contracting
Officer\'s Representative will issue technical direction to the
contractor under the contract.

\[65 FR 80994, Dec. 22, 2000\]

**Subpart 942.7 --- Indirect Cost Rates**

**942.704 Billing rates**.

\(b\) When the contracting officer or auditor responsible for
establishing billing rates, in accordance with FAR 42.704, has not
established such rates or such rates are not current for the performance
periods (contractor FY) under contract, the DOE contracting officer
responsible for administration of the contract shall establish an
appropriate rate(s) for billing purposes. If the contractor holds more
than one DOE contract covering that period of performance, the DOE
office with the largest unliquidated obligations as of the beginning of
that performance period shall take the lead in establishing the required
billing rate for use on DOE contracts. Once appropriate billing rates
are established by the responsible contracting officer designated by FAR
42.704, such rates shall be adopted by the contracting officer and all
billings and payments shall be retroactively revised to reflect the
agreed upon rate(s).

**942.705-1 Contracting officer determination procedure. \[DOE coverage
paragraphs (a) and (b)\]**.

(a)(3) The Department of Energy shall use the contracting officer
determination procedure for all business units for which it shall be
required to negotiate final indirect cost rates. A list of such business
units is maintained by the Office of Policy, within the Headquarters
procurement organization.

\(b\) (1) Pursuant to FAR 52.216-7, Allowable Cost and Payment,
contractors shall be requested to submit their final indirect cost rate
proposals reflecting actual cost experience during the covered period to
the cognizant contracting officer responsible for negotiating their
final rates.

The DOE negotiating official shall request all needed audit service in
accordance with internal procedures.

\[61 FR 41702, Aug. 9, 1996\]

**942.705-3 Educational institutions. \[DOE coverage paragraph (a)\]**

(a)(2) The negotiated rates established for the institutions cited in
OMB Circular No. A-88 are distributed to the Cognizant DOE Office (CDO)
assigned lead office responsibility for all DOE indirect cost matters
relating to a particular contractor by the Office of Policy, within the
Headquarters procurement organization.

\[61 FR 41702, Aug. 9, 1996\]

**942.705-4 State and local governments**.

A list of cognizant agencies for State/local government organizations is
periodically published in the Federal Register by the Office of
Management and Budget (OMB). The responsible agencies are notified of
such assignments. The current negotiated rates for State/local
government activities is distributed to each CDO by the Office of
Policy, within the Headquarters procurement organization.

\[61 FR 41702, Aug. 9, 1996\]

**942.705-5 Nonprofit organizations other than educational and state and
local governments**.

OMB Circular A-122 establishes the rules for assigning cognizant
agencies for the negotiation and approval of indirect cost rates. The
Federal agency with the largest dollar value of awards (contracts plus
federal financial assistance dollars) will be designated as the
cognizant agency. There is no published list of assigned agencies. The
Office of Policy, within the Headquarters procurement organization,
distributes to each CDO the rates established by the cognizant agency.

\[61 FR 41702, Aug. 9, 1996\]

**Subpart 942.8 --- Disallowance of Costs**

**942.803 Disallowing costs after incurrence.**

\(a\) Contracting officer receipt of vouchers. Vouchers and invoices
submitted to DOE shall be submitted to the contracting officer or
designee for review and approval for payment. If the examination of a
voucher or invoice raises a question regarding the allowability of a
cost submitted therein, the contracting officer, shall:

\(1\) Hold informal discussion with the contractor as appropriate.

\(2\) Issue a notice (letter, memo, etc.) to the contractor advising of
cost disallowed or to be disallowed and advising the contractor that it
may:

\(i\) Submit a written claim as to why the cost should be reimbursed if
in disagreement with the disallowance.

\(ii\) File a claim under the disputes clause, which will be processed
in accordance with disputes procedures in the event disagreements cannot
be settled.

\(3\) Process the voucher or invoice for payment and advise the finance
office to deduct the disallowed cost when scheduling the voucher for
payment.

\(c\) *Auditor reports and other sources of questioned costs*. (1) From
time to time reports are received from professional auditors that may
question the allowability of an incurred cost. Such reports are received
as the result of auditors, in their independent role under OMB Circular
A-73 or their own charters, scheduling and conducting financial or
compliance audits of government contracts or as the result of an
independent request for auditor service, as discussed in 942.70 Audit
Services.

\(2\) When auditor reports or other notifications question cost or
consider them unallowable, the contracting officer shall follow-up such
reports and resolve all such cost issues promptly by determining,
through discussions with the contractor and/or auditor within six months
of the audit report date, or date of receipt if a non-Federal audit. One
of the following courses of action shall be pursued:

\(i\) Accept and implement audit recommendations as submitted.

\(ii\) Accept the principle of the audit recommendation but reject the
cost questioned amount.

\(iii\) Reject audit findings and recommendations.

\(3\) When implementing the accepted course of action, the contracting
officer shall.

\(i\) Hold discussions with the auditor and contractor as appropriate.

\(ii\) Issue a notice in writing advising the contractor of the
government\'s intent to disallow the cost questioned, if the contracting
officer agrees with the auditor concerning the questioned costs.

\(iii\) Negotiate a mutual settlement of questioned costs if they are
agreed with in principle but there is a difference of opinion as to a
proper amount.

\(iv\) Negotiate a mutual settlement of questioned costs if the auditor
recommendations are acceptable to the contracting officer but the
contractor does not accept the finding or disallowance.

\(v\) Issue a final decision of the contracting officer disallowing the
questionable cost where differences cannot be resolved, advising of the
contractor\'s right to appeal the decision, and advising the procedure
to be followed if it is decided to make such an appeal.

\(vi\) Initiate immediate recoupment actions for all disallowed cost
owed the government by:

\(A\) Requesting the contractor to provide a credit adjustment (offset)
against amounts billed the government on the next or future invoice(s)
if such shall be submitted under a contract for which the disallowed
cost applies.

\(B\) Deducting (offset) the disallowed cost from the next or future
invoice(s) submitted under the contract; if the contractor provides no
adjustment under the contract for which the disallowed cost applies;
provided such reduction is deemed appropriate.

\(C\) Advising the contractor that a refund shall be directly payable to
the government in situations where there are insufficient payments owed
by the government to effect recovery via (A) or (B) above or an offset
is otherwise inappropriate.

\(vii\) Promptly notify the appropriate finance office of refunds
directly payable to the government to ensure proper billing and
follow-up action for collection.

\[49 FR 12026, Mar. 28, 1984, as amended at 59 FR 9107, Feb. 25, 1994\]

**PART 945 --- GOVERNMENT PROPERTY**

945.000 Scope of part.

**Subpart 945.1 --- General**

945.101 Definitions.

945.102-70 Reporting of contractor held property.

945.102-71 Maintenance of records.

**Subpart 945.3 --- Providing government property to contractors**

945.303-1 Policy.

**Subpart 945.4 --- Contractor Use and Rental of Government Property**

945.407 Non-Government use of plant equipment.

**Subpart 945.5 --- Management of Government Property in the Possession
of Contractors**

945.505-11 Records of transportation and installation costs of plant
equipment.

945.506 Identification.

945.570-2 Acquisition of motor vehicles.

945.570-7 Disposition of motor vehicles.

945.570-8 Reporting motor vehicle data.

**Subpart 945.6 --- Reporting, Redistribution, and Disposal of
Contractor Inventory**

945.601 Definitions.

945.603 Disposal methods.

945.603-70 Plant clearance function.

945.607-71 Disposal of radioactively contaminated personal property.

945.607-2 Recovering precious metals.

945.608-2 Standard screening.

945.608-3 Agency screening.

945.608-4 Limited screening.

945.608-5 Special items screening.

945.608-6 Waiver of screening requirements.

945.610-4 Contractor inventory in foreign countries.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12032, Mar. 28, 1984, unless otherwise noted.

**945.000 Scope of part.**

This part and FAR Part 45 are not applicable to the management of
property by operating and management contractors. In addition, the
policies and procedures contained in FAR Part 45 governing the
management, control, reporting, and disposal of special test equipment
and special tooling are not followed by the DOE.

**Subpart 945.1 --- General**

**945.101 Definitions.**

*Personal property*, as used in this part, means property of any kind or
interest therein, except real property; records of the Federal
Government; and nuclear and special source materials, atomic weapons,
and by-product materials.

*Capital equipment*, as used in this part, means personal property items
having a unit acquisition cost of \$5,000 or more and an anticipated
service life in excess of two years, regardless of type of funding, and
having the potential for maintaining their integrity as capital items;
i.e., not expendable due to use.

\[54 FR 27647, June 30, 1989\]

**945.102-70 Reporting of contractor-held property.**

Within 30 days after the end of each fiscal year, the Head of the
Contracting Activity shall report the following information to the
Office of Property Management, within the Headquarters procurement
organization:

\(a\) Name and address of each contractor with DOE property in their
possession, or in the possession of their subcontractors (do not include
grantees, cooperative agreements, interagency agreements, or agreements
with state or local governments).

\(b\) Contract number of each DOE contract with Government property.

\(c\) Date contractor\'s property management system was approved and by
whom (DOE office, Defense Contract Management Command, or the Office of
Naval Research).

\(d\) Date of most current appraisal of contractor\'s property
management system, who conducted the appraisal, and status of the system
(satisfactory or unsatisfactory).

\(e\) Total dollar value of DOE property as reported on last semiannual
asset report (including date of report), for each DOE contract
administered by the contracting activity.

**945.102-71 Maintenance of records.**

The contracting activity shall maintain records of approvals and reviews
of contractors\' property management systems, the dollar value of DOE
property as reported on the most recent semiannual financial report, and
records on property administration delegations to other Government
agencies.

**Subpart 945.3 --- Providing Government Property to Contractors**

**945.303-1 Policy.**

The DOE has established specific policies concerning special nuclear
material requirements needed under DOE contracts for fabricating end
items using special nuclear material, and for conversion or scrap
recovery of special nuclear material. *Special nuclear material* means
uranium enriched in the isotopes U233 or U235, and/or plutonium, other
than PU238. The policies to be followed are:

\(a\) Special nuclear material will be furnished by the DOE for
fixed-price contracts and subcontracts, at any tier, which call for the
production of special nuclear products, including fabrication and
conversion, for Government use. (The contractor or subcontractor must
have the appropriate license or licenses to receive the special nuclear
material. The Nuclear Regulatory Commission is the licensing agency.)

\(b\) Contracts and subcontracts for fabrication of end items using
special nuclear material generally shall be of the fixed-price type.
Cost-type contracts or subcontracts for fabrication shall be used only
with the approval of the Head of the Contracting Activity. This approval
authority shall not be further delegated.

\(c\) Contracts and subcontracts for conversion or scrap recovery of
special nuclear material shall be of a fixed-price type, except as
otherwise approved by the Head of the Contracting Activity.

**Subpart 945.4 --- Contractor Use and Rental of Government Property**

**945.407 Non-Government use of plant equipment.**

The type of plant equipment and dollar threshold for non-Government use
of DOE plant equipment will be determined by the Head of the Contracting
Activity which awarded the contract. Approval of the Head of the
Contracting Activity is required to authorize non-Government use
exceeding 25% of operational use.

**Subpart 945.5 --- Management of Government Property in the Possession
of Contractors**

**945.505-11 Records of transportation and installation costs of plant
equipment.**

The requirements of FAR 45.505-11 apply to plant equipment having a unit
cost of \$1,000 or more.

**945.506 Identification.**

The requirements of FAR 45.506 apply to Government property having a
unit cost of \$1,000 or more.

**945.570-2 Acquisition of motor vehicles.**

\(a\) The GSA Interagency Fleet Management System (GSA-IFMS) is the
first source of supply for providing motor vehicles to contractors;
however ,contracting officer approval is required for contractors to
utilize this service.

\(b\) Prior approval of GSA must be obtained before.

\(1\) Fixed-price contractors can use the GSA-IFMS;

\(2\) DOE-owned motor vehicles can be furnished to any contractor in an
area served by a GSA-IFMS; and

\(3\) A contractor can commercially lease a motor vehicle for more than
60 days.

\(c\) GSA has the responsibility for acquisition of motor vehicles for
Government agencies. All requisitions (GSA Form 1781) shall be processed
in accordance with 41 CFR 101-26.501.

\(d\) Contractors shall submit all motor vehicle requirements to the
contracting officer for approval.

\(e\) The acquisition of sedans and station wagons is limited to small,
subcompact, and compact vehicles which meet Government fuel economy
standards. The acquisition of light trucks is limited to those vehicles
which meet the current fuel economy standards set by Executive Orders
12003 and 12375.

\(f\) Cost reimbursement contractors may be authorized by the
contracting officer to utilize GSA Federal Supply Schedule 751, Motor
Vehicle Rental, for short term rentals not to exceed 60 days, and are
required to utilize available GSA consolidated leasing programs for long
term (60 continuous days or longer) commercial leasing of passenger
vehicles and light trucks.

\(g\) The Office of Property Management, within the Headquarters
procurement organization shall certify all requisitions prior to
submittal to GSA for the following:

\(1\) The acquisition of sedans and station wagons.

\(2\) The lease (60 continuous days or longer) of any passenger
automobile.

\(3\) The acquisition or lease (60 continuous days or longer) of light
trucks less than 8,500 GVWR.

\(h\) Purchase requisitions for other motor vehicles may be submitted
directly to GSA when approved by the contracting officer.

\(i\) Contractors shall thoroughly examine motor vehicles acquired under
a GSA contract for defects. Any defect shall be reported promptly to
GSA, and repairs shall be made under terms of the warranty.

**945.570-7 Disposition of motor vehicles.**

\(a\) The contractor shall dispose of DOE-owned motor vehicles as
directed by the contracting officer.

\(b\) DOE-owned motor vehicles may be disposed of as exchange/sale items
when directed by the contracting officer; however, a designated DOE
official must execute the Title Transfer forms.

**945.570-8 Reporting motor vehicle data.**

\(a\) Contractors conducting motor vehicle operations shall forward
annually (on or before December 1) to the contracting officer their plan
for acquisition of motor vehicles for the next fiscal year for review,
approval and submittal to DOE Headquarters. This plan shall conform to
the fuel efficiency standards for motor vehicles for the applicable
fiscal year, as established by Executive Orders 12003 and 12375 and as
implemented by GSA and current DOE directives.

Additional guidance for the preparation of the plan will be issued by
the contracting officer, as required.

\(b\) Contractors operating DOE-owned and/or commercially leased (for 60
continuous days or longer) motor vehicles shall prepare and submit the
following annual year-end reports to the contracting officer:

\(1\) DOE Report of Motor Vehicle Data (passenger vehicles).

\(2\) DOE Report of Truck Data.

\[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**Subpart 945.6 --- Reporting, Redistribution, and Disposal of
Contractor Inventory**

**945.601 Definitions.**

Personal property (See 945.101).

**945.603 Disposal methods.**

**945.603-70 Plant clearance function.**

If the plant clearance function has not been formally delegated to
another Federal agency, the contracting officer shall assume all
responsibilities of the plant clearance officer identified in FAR
Subpart 45.6.

**945.603-71 Disposal of radioactively contaminated personal property.**

Special procedures regarding the disposal of radioactively contaminated
property may be found at 41 CFR 109-45.50.

**945.607-2 Recovering precious metals.**

\(b\) Contractors generating contractor inventory containing precious
metals shall identify and promptly report such items to the contracting
officer for review, approval and reporting to the DOE precious metals
pool. This includes all precious metals in any form, including shapes,
scrap or radioactively contaminated, except for silver. Only high grade
nonradioactively contaminated silver should be reported to the precious
metals pool. The Oak Ridge Operations Office is responsible for
maintaining the DOE pool. Precious metals scrap will be reported to the
DOE precious metals pool, operated by Martin Marietta Energy

Systems, P.O. Box 2009, M.S. 8207, Oak Ridge, TN. 37831.

\[54 FR 27648, June 30, 1989\]

**945.608-2 Standard screening.**

(b)(1) Prior to reporting excess property to GSA, all reportable
property, as identified in Federal Property Management Regulations 41
CFR 101-43.4801, shall be reported to the contracting office. The
contracting office shall transmit this information via terminal
processing or hard copy to DOE Headquarters for centralized screening in
the DOE Reportable Excess Automated Property System (REAPS). Agency
screening will begin when the item is first included in the REAPS
monthly catalog and will end upon the issuance of the following monthly
catalog.

\(i\) REAPS requires the inclusion of a five character address code
which identifies the reporting contractor. The address code will be
assigned by DOE Headquarters upon receipt of a completed Address
Notification form for the contractor or DOE office reporting the
property as excess.

\(ii\) Excess screening documents and Address Notification forms shall
be submitted to the Office of Contractor Management and Administration,
within the Headquarters procurement organization.

\[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984; 62 FR 2310,
Jan. 16, 1997\]

**945.608-3 Agency screening.**

Items shall be reported to the contracting office and should be screened
informally within the contracting office\'s complex of contractors and
with other known users of the property at other DOE locations.

**945.608-4 Limited screening.**

\(a\) Prior to reporting to GSA, all non-reportable property, excluding
scrap and salvage, shall be reported to the contracting office for a 15
day informal screening within the contracting office\'s complex of
contractors and other appropriate DOE field locations.

**945.608-5 Special items screening.**

Prior to reporting to GSA, that property in FAR 45.608-5 (a), (b), and
(d) shall be reported and screened within DOE in accordance with
945.608-2 and 945.608-3.

\(c\) *Printing equipment*. All printing equipment excess to
requirements shall be reported to the Office of Administrative Services,
Headquarters.

**945.608-6 Waiver of screening requirements.**

\(a\) The Director of the Office of Property Management, within the
Headquarters procurement organization is the designee who may authorize
exceptions from screening requirements in accordance with the provisions
of FAR 45.608-6.

\(b\) A request to the Director of the Office of Property Management,
within the Headquarters procurement organization for the waiver of
screening requirements must be submitted by the HCA with a justification
setting forth the compelling circumstances warranting the exception.

\[54 FR 27648, June 30, 1989\]

**945.610-4 Contractor inventory in foreign countries.**

Contractor inventory located in foreign countries will be utilized and
disposed of in accordance with DOE-PMR 41 CFR 109-43.5, and 45.51.

\[49 FR 12032, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**PART 947 --- TRANSPORTATION**

**Subpart 947.5 --- Ocean Transportation by U.S. Flag Vessels**

947.506 Procedures.

**Subpart 947.70 --- Foreign Travel**

947.7000 (Reserved).

947.7001 Policy.

947.7002 Contract clause.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12038, Mar. 28, 1984; 65 FR 80994, Dec. 22, 2000, unless
otherwise noted.

**Subpart 947.5 --- Ocean Transportation by U.S. Flag Vessels**

**947.506 Procedures.**

For contract awards involving foreign suppliers which will necessitate
ocean transportation, a copy of the award document is to be furnished to
the Maritime Administration at the following address: Inter-Agency
Liaison, Division of National Cargo, Office of Market Development,
Maritime Administration, 400 7th Street, SW., Washington, DC 20590.

**Subpart 947.70 --- Foreign Travel**

**947.7000 \[Reserved\].**

**947.7001 Policy.**

Contractor foreign travel shall be conducted pursuant to the
requirements contained in DOE Order 551.1, Official Foreign Travel, or
any subsequent version of the order in effect at the time of award.

**947.7002 Contract clause.**

When foreign travel may be required under the contract, the contracting
officer shall insert the clause at 48 CFR 952.247-70, Foreign Travel.

\[65 FR 80994, Dec. 22, 2000\]

**PART 949 --- TERMINATION OF CONTRACTS**

**Subpart 949.1 --- General Principles**

949.101 Authorities and responsibilities

949.106 Fraud or other criminal conduct

949.111 Review of proposed settlements

**Subpart 949.5 --- Contract Termination Clauses**

949.501 General

949.505 Other termination clauses

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12038, Mar. 28, 1984, unless otherwise noted.

**Subpart 949.1 --- General Principles**

**949.101 Authorities and responsibilities.**

The Procurement Executive shall be notified prior to taking any action
to terminate (a) contracts for the operation of Government-owned
facilities, (b) any prime contract or subcontract in excess of \$10
million, and (c) any contract the termination of which is likely to
provoke unusual interest.

**949.106 Fraud or other criminal conduct.**

Any evidence of fraud or other criminal conduct in connection with the
settlement of a contract termination shall be reported in accordance
with 909.406.

**949.111 Review of proposed settlements.**

\(a\) The Heads of Contracting Activities shall establish settlement
review boards for the review of each termination settlement or
determination of amount due under the termination clause of a contract
or approval or ratification of a subcontract settlement when the action
involves \$50,000 or more.

\(b\) Settlement review boards may be established for actions below
\$50,000 when considered desirable by the Head of the Contracting
Activity or when specifically requested by the contracting officer.

\(c\) Proposed settlement agreements or determinations in excess of
contractual authority of the Heads of Contracting Activities will be
transmitted to the Procurement Executive for review and approval.

\(d\) Contracting officers shall not conclude proposed settlement or
determinations until the approvals required by this subsection have been
obtained.

**Subpart 949.5 --- Contract Termination Clauses**

**949.501 General.**

The standard clauses set forth in FAR Subpart 49.5 are applicable as
prescribed subject to the cost principles referenced in the various
termination articles shall be in accordance with Part 931.

**949.505 Other termination clauses.**

\(f\) The clause at 952.249-70 is suggested for use in
cost-plus-fixed-fee Architect-Engineer contracts.

**PART 950 --- EXTRAORDINARY CONTRACTUAL ACTIONS**

**Subpart 950.1 --- General**

950.104 \[Removed\]

**Subpart 950.70 --- Nuclear Indemnification of DOE Contractors**

950.7000 Scope of subpart

950.7001 Applicability

950.7002 Definitions

950.7003 Nuclear hazards indemnity

950.7004 Reserved

950.7005 Reserved

950.7006 Statutory nuclear hazards indemnity agreement

950.7007 Reserved

950.7008 Reserved

950.7009 Fees

950.7010 Financial protection requirements

**Subpart 950.71 --- General Contract Authority Indemnity**

950.7101 Applicability.

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12039, Mar. 28, 1984, unless otherwise noted.

**Subpart 950.1 --- General**

**950.104 \[Removed\]**

67 FR 14869, Mar. 28, 2002\]

**Subpart 950.70 --- Nuclear Indemnification of DOE Contractors**

**950.7000 Scope of subpart.**

This subpart describes the established policies concerning
indemnification of DOE contractors against public liability for a
nuclear incident arising out of or in connection with the contract
activity. \[49 FR 12039, Mar. 28, 1984, as amended at 56 FR 57827, Nov.
14, 1991\]

**950.7001 Applicability.**

The policies and procedures of this subpart shall govern DOE\'s entering
into agreements of indemnification with recipients of a contract whose
work under the contract involves the risk of public liability for a
nuclear incident or precautionary evacuation. \[56 FR 57827, Nov. 14,
1991\]

**950.7002 Definitions.**

*DOE contractor* means any DOE prime contractor, including any agency of
the Federal Government with which DOE has entered into an interagency
agreement.

*Nuclear incident* means any occurrence, including an extraordinary
nuclear occurrence, within the United States causing, within or outside
the United States, bodily injury, sickness, disease, or death, or loss
of or damage to property, or loss of use of property, arising out of or
resulting from the radioactive, toxic, explosive, or other hazardous
properties of source, special nuclear, or byproduct material. The term
includes any such occurrence outside the United States if such
occurrence involves source, special nuclear, or byproduct material owned
by, and used by or under contract with, the United States.

*Person indemnified* means:

\(1\) With respect to a nuclear incident occurring within the United
States or outside the United States as the term is defined above and
with respect to any nuclear incident in connection with the design,
development, construction, operation, repair, maintenance, or use of the
nuclear ship Savannah, the person with whom an indemnity agreement is
executed or who is required to maintain financial protection, and any
other person who may be liable for public liability; or

\(2\) With respect to any other nuclear incident occurring outside the
United States, the person with whom an indemnity agreement is executed
and any other person who may be liable for public liability by reason of
his

activities under any contract with the Secretary of Energy or any
project to which indemnification under the provisions of section 170d.
of the Atomic Energy Act of 1954, as amended, has been extended or under
any subcontract, purchase order, or other agreement, or any tier under
any such contract or project.

*Public liability* means any legal liability arising out of or resulting
from a nuclear incident or precautionary evacuation (including all
reasonable additional costs incurred by a State, or a political
subdivision of a State, in the course of responding to a nuclear
incident or precautionary evacuation), except: (1) Claims under State or
Federal workmen\'s compensation acts of employees of persons indemnified
who are employed at the site of and in connection with the activity
where the nuclear incident occurs; (2) claims arising out of an act of
war; and (3) whenever used in subsections a., c., and k. of section 170
of the Atomic Energy Act of 1954, as amended, claims for loss of, or
damage to, or loss of use of property which is located at the site of
and used in connection with the licensed activity where the nuclear
incident occurs. *Public liability* also includes damage to property of
persons indemnified: Provided, that such property is covered under the
terms of the financial protection required, except property which is
located at the site of and used in connection with the activity where
the nuclear incident occurs.

\[49 FR 12039, Mar. 28, 1984, as amended at 50 FR 12185, Mar. 27, 1985;
56 FR 57827, Nov. 14, 1991\]

**950.7003 Nuclear hazards indemnity.**

\(a\) Section 170d. of the Atomic Energy Act, as amended, requires DOE
\"to enter into agreements of indemnification with any person who may
conduct activities under a contract with (DOE) that involve the risk of
public liability. However, DOE contractors whose activities are already
subject to indemnification by the Nuclear Regulatory Commission are not
eligible for such statutory indemnity. See 950.7006 below.

\(b\) The Heads of Contracting Activities shall assure that contracts
subject to this requirement contain the appropriate nuclear hazards
indemnity provisions.

\[56 FR 57828, Nov. 14, 1991\]

**950.7004 \[Reserved\]**

**950.7005 \[Reserved\]**

**950.7006 Statutory nuclear hazards indemnity agreement.**

\(a\) The contract clause contained in 952.250-70 shall be incorporated
in all contracts in which the contractor is under risk of public
liability for a nuclear incident or precautionary evacuation arising out
of or in connection with the contract work, including such events caused
by a product delivered to a DOE-owned facility for use by DOE or its
contractors. The clause at 952.250-70 shall be included in contracts
with architect-engineer contractors for the design of a DOE facility,
the construction or operation of which may involve the risk of public
liability for a nuclear incident or a precautionary evacuation.

\(b\) However, this clause shall not be included in contracts in which
the contractor is subject to Nuclear Regulatory Commission (NRC)
financial protection requirements under section 170b. of the Act or NRC
agreements of indemnification under section 170c. or k. of the Act for
activities to be performed under the contract.

\[56 FR 57828, Nov. 14, 1991\]

**950.7007 \[Reserved\]**

**950.7008 \[Reserved\]**

**950.7009 Fees.**

No fee will be charged a DOE contractor for a statutory nuclear hazards
indemnity agreement.

\[49 FR 12039, Mar. 28, 1984, as amended at 56 FR 57828, Nov. 14, 1991\]

**950.7010 Financial protection requirements.**

DOE contractors with whom statutory nuclear hazards indemnity agreements
under the authority of section 170d. of the Atomic Energy Act of 1954,
as amended, are executed will not normally be required or permitted to
furnish financial protection by purchase of insurance to cover public
liability for nuclear incidents. However, if authorized by the DOE
Headquarters office having responsibility for contractor casualty
insurance programs, DOE contractors may be (a) permitted to furnish
financial protection to themselves or (b) permitted to continue to carry
such insurance at cost to the Government if they currently maintain
insurance for such liability.

\[56 FR 57828, Nov. 14, 1991\]

**Subpart 950.71.General Contract Authority Indemnity**

**950.7101 Applicability.**

\(a\) The DOE also has general contract authority to enter into
indemnity agreements with its contractors. Under such authority a
certain measure of protection is extended to the DOE contractor against
risk of liability, but the assumption of liability by DOE will be
expressly subject to the availability of appropriated funds. Prior to
enactment of section 170 of the Atomic Energy Act 1954, as amended, this
authority was exercised in a number of Atomic Energy Commission
contracts and this type of indemnification remains in some DOE
contracts.

\(b\) It is the policy of the DOE, subsequent to the enactment of
section 170, to restrict indemnity agreements with DOE contractors, with
respect to protection against public liability for a nuclear incident,
to the statutory indemnity provided under section 170. However, it is
recognized that circumstances may exist under which a DOE contractor may
be exposed to a risk of public liability for a nuclear occurrence which
would not be covered by the statutory indemnity.

\(c\) While it is normally DOE policy to require its non-management and
operating contractors to obtain insurance coverage against public
liability for nonnuclear risks, there may be circumstances in which a
contractual indemnity may be warranted to protect a DOE non-management
and operating contractor against liability for uninsured nonnuclear
risks.

\(d\) If circumstances as mentioned in paragraph (b) or (c) of this
section do arise, it shall be the responsibility of the Heads of
Contracting Activities to submit to the Head of the Agency or designee
for review and decision, all pertinent information concerning the need
for, or desirability of, providing a general authority indemnity to a
DOE contractor.

\(e\) Where the indemnified risk is nonnuclear, the amount of general
authority indemnity extended to a fixed-price contractor should normally
have a maximum obligation equivalent to the amount of insurance that the
contractor usually carries to cover such risks in its other commercial
operations or, if the risk involved is dissimilar to those normally
encountered by the contractor, the amount that it otherwise would have
reasonably procured to insure this contract risk.

\(f\) In the event that a DOE contractor has been extended both a
statutory indemnity and a general authority indemnity, the general
authority indemnity will not apply to the extent that the statutory
indemnity applies.

\(g\) The provisions of this subsection do not restrict or affect the
policy of DOE to pay its cost-reimbursement type contractors for the
allowable cost of losses and expenses incurred in the performance of the
contact work, within the maximum amount of the contract obligation.

\[49 FR 12039, Mar. 28, 1984, as amended at 56 FR 28102, June 19,
1991.Redesignated and amended at 56 FR 57828, Nov. 14, 1991; 61 FR
21975, May 13, 1996; 62 FR 34842, Jun. 27, 1997\]

**PART 951 --- USE OF GOVERNMENT SOURCES BY CONTRACTORS**

**Subpart 951.1 --- Contractor Use of Government Supply Sources**

951.101 Policy

951.102 Authorization to use Government supply sources

951.103 Ordering from Government supply sources

**Subpart 951.70 --- Contractor Employee Travel Discounts**

951.7002 Responsibilities

Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).

Source: 49 FR 12042, Mar. 28, 1984, unless otherwise noted.

**Subpart 951.1 --- Contractor Use of Government Supply Sources**

**951.101 Policy.**

\(a\) It is DOE policy that contractors performing under
cost-reimbursement contracts should meet their requirements from
Government sources of supply when these sources are available to them,
and if it is economically advantageous or otherwise in the best interest
of the Government.

**951.102 Authorization to use Government supply sources.**

\(a\) The Head of the Contracting Activity may authorize contractors
performing under cost-reimbursement contracts and subcontractors
performing under cost-reimbursement subcontracts, where all higher tier
contracts and subcontracts are cost-type, to use Government supply
sources in accordance with the requirements and procedures in FAR Part
51, DOE PMR 41 CFR 109-26, and any necessary approval from the agency
involved. This authority may be redelegated to the level of contracting
officer. Direct acquisition by the DOE, rather than by a contractor
under cost-reimbursement contracts, shall be required where deemed
necessary by the Head of the Contracting Activity in order to carry out
special requirements of appropriation acts or other applicable laws
relating to particular items.

(c)(1) The DOE central point of contact for the assignment, correction,
or deletion of FEDSTRIP activity address codes is the Office of Property
Management, within the Headquarters procurement organization.

(e)(4)(iii) Materials, supplies, and equipment acquired from Government
sources of supply under the procedures described herein must be used
exclusively in connection with Government work, except as otherwise
authorized by the Head of the Contracting Activity.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**951.103 Ordering from Government supply sources.**

\(b\) The Procurement Executive shall be informed of instances in which
GSA sources of supply are not used because of the quality of the items
available from GSA or when a Federal Supply Schedule contractor refuses
to honor an order.

**Subpart 951.70 --- Contractor Employee Travel Discounts**

**951.7002 Responsibilities.**

The contracting officer shall insert the clause at 952.251-70,
Contractor employee travel discounts, in all cost-reimbursable
solicitations and contracts when significant costs for rail travel, car
rental, or lodging will be required to perform the contract. The
contracting officer may furnish the contractor with appropriate
identification letters.

\[54 FR 17736, Apr. 25, 1989; 65 FR 80994, Dec. 22, 2000\]

**PART 952 --- SOLICITATION PROVISIONS AND CONTRACT CLAUSES**

**Subpart 952.0 --- General**

952.000 Scope of subpart.

952.001 General policy.

**Subpart 952.2 --- Text of Provisions and Clauses**

952.202 Clauses related to definitions.

952.202-1 Definitions.

952.203-70 Whistleblower Protection for Contractor Employees.

952.204 Clauses related to administrative matters.

952.204-2 Security requirements.

952.204-70 Classification/Declassification.

952.204-71 Sensitive foreign nations control.

952.204-72 Disclosure of information.

952.204-73 Facility Clearance.

952.204-75 Public Affairs.

952.204-76 Conditional payment of fee or profit --Safeguarding
restricted data and other classified information.

952.204-77 Computer security.

952.208 Clauses related to required sources of supply.

952.208-7 Tagging of leased vehicles.

952.208-70 Printing.

952.209 Clauses related to contractor\'s qualifications.

952.209-8 Organizational conflicts of interest-disclosure.

952.209-71 (Reserved).

952.209-72 Organizational conflicts of interest.

952.211 Clauses related to contract delivery or performance.

952.211-70 Priorities and allocations for energy programs
(solicitations).

952.211-71 Priorities and allocations for energy programs (contracts).

952.211-72 (Reserved).

952.211-73 (Reserved).

952.215-70 Key personnel.

952.216 Clauses related types of contracts.

952.216-7 Allowable cost and payment.

952.216-15 Predetermined indirect cost rates.

952.217-70 Acquisition of real property.

952.219-70 DOE Mentor-Protégé program.

952.223 Clauses related to environment, conservation, and occupational
safety.

952.223.71 Integration of environment, safety, and health into work
planning and execution.

952.223-72 Radiation protection and nuclear criticality.

952.223.74 (Reserved).

952.223-75 Preservation of individual occupational radiation exposure
records.

952.223-76 Condition payment of fee or profit -- Safeguarding restricted
data and other classified information and protection of worker safety
and health.

952.223-77 Conditional payment of fee or profit -- Protection of worker
safety and health.

952.224-70 Paperwork Reduction Act.

952.225-70 Subcontracting nuclear hot cell services.

952.226-70 Subcontracting goals under section 3021(a) of the Energy
Policy Act of 1992.

952.226-71 Utilization of the Energy Policy Act target entities.

952.226-72 Energy Policy Act subcontracting goals and reporting
requirements.

952.226-73 Energy Policy Act target group representation.

952.226-74 Displaced employee hiring preference.

952.227 Provisions and clauses related to patents, technical data and
copyright.

952.227-9 Refund of royalties.

952.227-11 Patent rights-retention by the contractor (short form).

952.227-13 Patent rights-acquisition by the Government.

952.227-14 Rights in data-general.

952.227-82 Rights to proposal data.

952.227-84 Notice of right to request patent waiver.

952.231-70 Date of incurrence of cost.

952.231-71 Insurance - litigation and claims.

952.233-2 Service of protests.

952.233-4 Notice of protest file availability.

952.233-5 Agency protest review.

952.235-70 Key personnel.

952.235-71 Research misconduct.

952.236 Construction and architect-engineer contracts.

952.236-70 Administrative terms for architect-engineer contracts.

952.236-71 Inspection in architect-engineer contracts.

952.236-72 Nonrefundable fee for plans and specifications.

952.237-70 Collective bargaining agreements-protective services.

952.242-70 Technical direction.

952.245 Clauses related to Government property.

952.245-2 Government property (fixed price contracts).

952.245-5 Government property (cost-reimbursement, time-and-materials,
or labor-hour contracts).

952.247-70 Foreign travel.

952.249 Clauses related to termination.

952.249-70 Termination clause for cost-reimbursement architect-engineer
contracts.

952.250 Clauses related to indemnification of contractors.

952.250-70 Nuclear hazards indemnity agreement.

952.251-70 Contractor employee travel discounts.

Authority: 42 U.S.C. 2201, 2282a, 2282b, 2282c, 7101 *[et
seq.]{.underline}*; 41 U.S.C. 418b; 50 U.S.C. 2401 *[et
seq.]{.underline}*

Source: 49 FR 12042, Mar. 28, 1984; 62 FR 2310, Jan. 16, 1997; 62 FR
34842, Jun. 27, 1997; 65 FR 80994, Dec.22, 2000, unless otherwise noted.

**Subpart 952.0 --- General**

**952.000 Scope of part.**

This part implements FAR Part 52 which sets forth contract clauses for
use in connection with the acquisition of personal property and
nonpersonal services (including construction), and supplements, as well
as modifies, FAR Part 52 by prescribing certain modifications to be made
to FAR clauses when used in DOE contracts and specifying certain DOE
contract clauses to be used in addition to or in place of such FAR
clauses.

**952.001 General policy.**

It is DOE policy to use the prescribed FAR and DOE contract clauses
wherever practicable. Uniformity in the use of contract clauses helps to
ensure impartial treatment of all contractors, expedites negotiation and
contract review, and facilitates contract administration.

\[59 FR 24357, May 11, 1995\]

**Subpart 952.2 --- Text of Provisions and Clauses**

**952.202 Clauses related to definitions.**

**952.202-1 Definitions.**

\(a\) As prescribed in 902.200, insert the clause at FAR 52.202-1 in all
contracts. The contracting officer shall substitute the following for
paragraph (a) of the clause.

\(a\) *Head of Agency* means: (*i)* The Secretary; (*ii)* Deputy
Secretary; (*iii)* Under Secretaries of the Department of Energy and
(*iv*) the Chairman, Federal Energy Regulatory Commission.

\(b\) The following shall be added as paragraphs (h) and (i) except that
they will be designated paragraphs (g) and (h) if Alternate I of the FAR
clause is used.

\(h\) The term *DOE* means the Department of Energy, *FERC* means the
Federal Energy Regulatory Commission, and *NNSA* means the National
Nuclear Security Administration.

\(i\) The term *Senior Procurement Executive* means, for DOE:

Department of Energy -- Director, Office of Procurement and Assistance
Management, DOE;

National Nuclear Security Administration -- Administrator for Nuclear
Security, NNSA; and

Federal Energy Regulatory Commission -- Chairman, FERC.

\[49 FR 12042, Mar. 28, 1984, as amended at 50 FR 12185, Mar. 27, 1985;
62 FR 2310, Jan. 16, 1997: 67 FR 14871 Mar. 28, 2002\]

**952.203-70 Whistleblower Protection for Contractor Employees.**

As prescribed in 48 CFR 903.971, insert the following clause:

WHISTLEBLOWER PROTECTION FOR CONTRACTOR EMPLOYEES (DEC 2000)

\(a\) The contractor shall comply with the requirements of \"DOE
Contractor Employee Protection Program\" at 10 CFR part 708 for work
performed on behalf of DOE directly related to activities at DOE-owned
or-leased sites.

\(b\) The contractor shall insert or have inserted the substance of this
clause, including this paragraph (b), in subcontracts at all tiers, for
subcontracts involving work performed on behalf of DOE directly related
to activities at DOE-owned or leased sites.

(End of Clause) \[65 FR 80994, Dec. 22, 2000\]

**952.204 Clauses related to administrative matters.**

**952.204-2 Security Requirements.**

As prescribed in 904.404(d)(1), the following clause shall be included
in contracts entered into under section 31 (research assistance) or 41
(ownership and operation of production facilities) of the Atomic Energy
Act of 1954, as amended, and in other contracts and subcontracts, which
involve or are likely to involve classified information.

SECURITY (MAY 2002)

\(a\) *Responsibility*. It is the contractor\'s duty to safeguard all
classified information, special nuclear material, and other DOE
property. The contractor shall, in accordance with DOE security
regulations and requirements, be responsible for safeguarding all
classified information and protecting against sabotage, espionage, loss
or theft of the classified documents and material in the contractor\'s
possession in connection with the performance of work under this
contract. Except as otherwise expressly provided in this contract, the
contractor shall, upon completion or termination of this contract,
transmit to DOE any classified matter in the possession of the
contractor or any person under the contractor\'s control in connection
with performance of this contract. If retention by the contractor of any
classified matter is required after the completion or termination of the
contract, the contractor shall identify the items and types or
categories of matter proposed for retention, the reasons for the
retention of the matter, and the proposed period of retention. If the
retention is approved by the contracting officer, the security
provisions of the contract shall continue to be applicable to the matter
retained. Special nuclear material shall not be retained after the
completion or termination of the contract.

\(b\) *Regulations*. The contractor agrees to comply with all security
regulations and requirements of DOE in effect on the date of award.

\(c\) *Definition of classified information*. The term \"classified
information\" means Restricted Data, Formerly Restricted Data, or
National Security Information.

\(d\) *Definition of restricted data*. The term \"Restricted Data\"
means all data concerning (1) design, manufacture, or utilization of
atomic weapons; (2) the production of special nuclear material; or (3)
the use of special nuclear material in the production of energy, but
shall not include data declassified or removed from the Restricted Data
category pursuant to Section 142 of the Atomic Energy Act of 1954, as
amended.

\(e\) *Definition of formerly restricted data*. The term *\"Formerly
Restricted Data\"* means all data removed from the Restricted Data
category under section 142 d. of the Atomic Energy Act of 1954, as
amended.

\(f\) *Definition of National Security Information*. The term \"National
Security Information\" means any information or material, regardless

of its physical form or characteristics, that is owned by, produced for
or by, or is under the control of the United States Government, that has
been determined pursuant to Executive Order 12356 or prior Orders to
require protection against unauthorized disclosure, and which is so
designated.

\(g\) *Definition of Special Nuclear Material (SNM)*. *SNM* means: (1)
plutonium, uranium enriched in the isotope 233 or in the isotope 235,
and any other material which pursuant to the provisions of Section 51 of
the Atomic Energy Act of 1954, as amended, has been determined to be
special nuclear material, but does not include source material; or (2)
any material artificially enriched by any of the foregoing, but does not
include source material.

\(h\) *Security clearance of personnel*. The contractor shall not permit
any individual to have access to any classified information, except in
accordance with the Atomic Energy Act of 1954, as amended, Executive
Order 12356, and the DOE\'s regulations or requirements applicable to
the particular level and category of classified information to which
access is required.

\(i\) *Criminal liability*. It is understood that disclosure of any
classified information relating to the work or services ordered
hereunder to any person not entitled to receive it, or failure to
safeguard any classified information that may come to the contractor or
any person under the contractor\'s control in connection with work under
this contract, may subject the contractor, its agents, employees, or
subcontractors to criminal liability under the laws of the United
States. (See the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2011
et seq.; 18 U.S.C. 793 and 794; and E.O. 12356.)

\(j\) Foreign Ownership, Control or Influence.

\(1\) The Contractor shall immediately provide the cognizant security
office written notice of any change in the extent and nature of foreign
ownership, control or influence over the Contractor which would affect
any answer to the questions presented in the Certificate Pertaining to
Foreign Interests, Standard Form 328 or the Foreign Ownership, Control
or Influence questionnaire executed by the Contractor prior to the award
of this contract. In addition, any notice of changes in ownership or
control which are required to be reported to the Securities and Exchange
Commission, the Federal Trade Commission, or the Department of Justice
shall also be furnished concurrently to the Contracting Officer.

\(2\) If a Contractor has changes involving foreign ownership, control
or influence, DOE must determine whether the changes will pose an undue
risk to the common defense and security. In making this determination,
DOE will consider proposals made by the Contractor to avoid or mitigate
foreign influences.

\(3\) If the cognizant security office at any time determines that the
Contractor is, or is potentially, subject to foreign ownership, control
or influence, the Contractor shall comply with such instructions as the
Contracting Officer shall provide in writing to safeguard any classified
information or special nuclear material.

\(4\) The Contractor agrees to insert terms that conform substantially
to the language of this clause, including this paragraph, in all
subcontracts under this contract that will require subcontractor
employees to possess access authorizations. Additionally, the Contractor
must require subcontractors to have an existing DOD or DOE Facility
Clearance or submit a completed Certificate Pertaining to Foreign
Interests, Standard Form 328, required in DEAR 952.204-73 prior to award
of a subcontract. Information to be provided by a subcontractor pursuant
to this clause may be submitted directly to the Contracting Officer. For
purposes of this clause, subcontractor means any subcontractor at any
tier and the term \"Contracting Officer\" means the DOE Contracting
Officer. When this clause is included in a subcontract, the term
\"Contractor\" shall mean Subcontractor and the term \"contract\" shall
mean subcontract.

\(5\) The Contracting Officer may terminate this contract for default
either if the Contractor fails to meet obligations imposed by this
clause or if the Contractor creates a FOCI situation in order to avoid
performance or a termination for default. The Contracting Officer may
terminate this contract for convenience if the Contractor becomes
subject to FOCI and for reasons other than avoidance of performance of
the contract, cannot, or chooses not to, avoid or mitigate the FOCI
problem. (End of Clause) \[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct.
2, 1984, as amended at 52 FR 38425, Oct. 16, 1987; 62 FR 2310, Jan. 16,
1997; 62 FR 42072, Aug. 5, 1997; 67 FR 14873, Mar. 28, 2002\]

**952.204-70 Classification/Declassification.**

As prescribed in 904.404(d)(2), the following clause shall be included
in all contracts which involve classified information.

CLASSIFICATION/DECLASSIFICATION (SEP 1997)

In the performance of work under this contract, the contractor or
subcontractor shall comply with all provisions of the Department of
Energy\'s regulations and mandatory DOE directives which apply to work
involving the classification and declassification of information,
documents, or material. In this section, \"information\" means facts,
data, or knowledge itself; \"document\" means the physical medium on or
in which information is recorded; and \"material\" means a product or
substance which contains or reveals information, regardless of its
physical form or characteristics. Classified information is \"Restricted
Data\" and \"Formerly Restricted Data\" (classified under the Atomic
Energy Act of 1954, as amended) and \"National Security Information\"
(classified under Executive Order 12958 or prior Executive Orders). The
original decision to classify or declassify information is considered an
inherently Governmental function. For this reason, only Government
personnel may serve as original classifiers, i.e., Federal Government
Original Classifiers. Other personnel (Government or contractor) may
serve as derivative classifiers which involves making classification
decisions based upon classification guidance which reflect decisions
made by Federal Government Original Classifiers.

The contractor or subcontractor shall ensure that any document or
material that may contain classified information is reviewed by either a
Federal Government or a Contractor Derivative Classifier in accordance
with classification regulations including mandatory DOE directives and
classification/declassification guidance furnished to the contractor by
the Department of Energy to determine whether it contains classified
information prior to dissemination. For information which is not
addressed in classification/declassification guidance, but whose
sensitivity appears to warrant classification, the contractor or
subcontractor shall ensure that such information is reviewed by a
Federal Government Original Classifier.

In addition, the contractor or subcontractor shall ensure that existing
classified documents (containing either Restricted Data or Formerly
Restricted Data or National Security Information) which are in its
possession or under its control are periodically reviewed by a Federal
Government or Contractor Derivative Declassifier in accordance with
classification regulations, mandatory DOE directives and
classification/declassification guidance furnished to the contractor by
the Department of Energy to determine if the documents are no longer
appropriately classified. Priorities for declassification review of
classified documents shall be based on the degree of public and
researcher interest and the likelihood of declassification upon review.
Documents which no longer contain classified information are to be
declassified. Declassified documents then shall be reviewed to determine
if they are publicly releasable. Documents which are declassified and
determined to be publicly releasable are to be made available to the
public in order to maximize the public\'s access to as much Government
information as possible while minimizing security costs.

The contractor or subcontractor shall insert this clause in any
subcontract which involves or may involve access to classified
information. (End of Clause)

\[62 FR 51800, Oct. 3, 1997\]

**952.204-71 Sensitive foreign nations controls.**

As prescribed in 904.404(d)(3), the contracting officer shall include
the following clause.

SENSITIVE FOREIGN NATIONS CONTROLS (APR 1994)

\(a\) In connection with any activities in the performance of this
contract, the contractor agrees to comply with the \"Sensitive Foreign
Nations Controls\" requirements attached to this contract, relating to
those countries, which may from time to time, be identified to the
contractor by written notice as sensitive foreign nations. The
contractor shall have the right to terminate its performance under this
contract upon at least 60 days\' prior written notice to the contracting
officer if the contractor determines that it is unable, without
substantially interfering with its polices or without adversely
impacting its performance to continue performance of the work under this
contract as a result of such notification. If the contractor elects to
terminate performance, the provisions of this contract regarding
termination for the convenience of the Government shall apply.

\(b\) The provisions of this clause shall be included in any
subcontracts.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984; 62 FR 2310,
Jan. 16, 1997\]

**952.204-72 Disclosure of information.**

As prescribed in 904.404(d)(4), this clause may be used in place of the
clauses entitled \"Security,\" 952.204-2, and \"Classification,\"
952.204-70, in contracts with educational institutions for research
involving nuclear technology which could but is not expected to produce
classified information or restricted data.

DISCLOSURE OF INFORMATION (APR 1994)

\(a\) It is mutually expected that the activities under this contract
will not involve classified information. It is understood, however, that
if in the opinion of either party, this expectation changes prior to the
expiration or terminating of all activities under this contract, said
party shall notify the other party accordingly in writing without delay.
In any event, the contractor shall classify, safeguard, and otherwise
act with respect to all classified information in accordance with
applicable law and the requirements of DOE, and shall promptly inform
DOE in writing if and when classified information becomes involved, or
in the mutual judgment of the parties it appears likely that classified
information or material may become involved. The contractor shall have
the right to terminate performance of the work under this contract and
in such event the provisions of this contract respecting termination for
the convenience of the Government shall apply.

\(b\) The contractor shall not permit any individual to have access to
classified information except in accordance with the Atomic Energy Act
1954, as amended, Executive Order 12356, and DOE\'s regulations or
requirements.

\(c\) The term \"Restricted Data\" as used in this article means all
data concerning the design, manufacture, or utilization of atomic
weapons,

the production of special nuclear material or the use of special nuclear
material in the production of energy, but shall not include data
declassified or removed from the Restricted Data category pursuant to
section 142 of the Atomic Energy Act of 1954, as amended.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984; 62 FR 2310,
Jan. 16, 1997\]

**952.204-73 Facility Clearance.**

As prescribed in 904.404(d)(5), insert the following provision in all
solicitations which require the use of Standard Form 328, Certificate
Pertaining to Foreign Interests for contracts or subcontracts subject to
the provisions of 904.70.

FACILITY CLEARANCE (MAY 2002)

**NOTICES**

Section 2536 of title 10, United States Code, prohibits the award of a
contract under a national security program to an entity controlled by a
foreign government if it is necessary for that entity to be given access
to information in a proscribed category of information in order to
perform the contract unless a waiver is granted by the Secretary of
Energy. In addition, a Facility Clearance and foreign ownership, control
and influence (FOCI) information are required when the contract or
subcontract to be awarded is expected to require employees to have
access authorizations.

Offerors who have either a Department of Defense or a Department of
Energy Facility Clearance generally need not resubmit the following
foreign ownership information unless specifically requested to do so.
Instead, provide your DOE Facility Clearance code or your DOD assigned
commercial and government entity (CAGE) code. If uncertain, consult the
office which issued this solicitation.

**(a) Use of Certificate Pertaining to Foreign Interests, Standard Form
328**

\(1\) The contract work anticipated by this solicitation will require
access to classified information or special nuclear material. Such
access will require a Facility Clearance for the Contractor organization
and access authorizations (security clearances) for Contractor personnel
working with the classified information or special nuclear material. To
obtain a Facility Clearance the offeror must submit a Certificate
Pertaining to Foreign Interests, Standard Form 328, and all required
supporting documents to form a complete Foreign Ownership, Control or
Influence (FOCI) Package.

\(2\) Information submitted by the offeror in response to the Standard
Form 328 will be used solely for the purposes of evaluating foreign
ownership, control or influence and will be treated by DOE, to the
extent permitted by law, as business or financial information submitted
in confidence.

\(3\) Following submission of a Standard Form 328 and prior to contract
award, the Contractor shall immediately submit to the Contracting
Officer written notification of any changes in the extent and nature of
FOCI which could affect the offeror's answers to the questions in
Standard Form 328. Following award of a contract, the Contractor must
immediately submit to the cognizant security office written notification
of any changes in the extent and nature of FOCI which could affect the
offeror's answers to the questions in Standard Form 328. Notice of
changes in ownership or control which are required to be reported to the
Securities and Exchange Commission, the Federal Trade Commission, or the
Department of Justice must also be furnished concurrently to the
cognizant security office.

\(b\) Definitions

\(1\) Foreign Interest means any of the following:

\(i\) A foreign government, foreign government agency, or representative
of a foreign government;

\(ii\) Any form of business enterprise or legal entity organized,
chartered or incorporated under the laws of any country other than the
United States or its possessions and trust territories; and

\(iii\) Any person who is not a citizen or national of the United
States.

\(2\) *Foreign Ownership, Control, or Influence (FOCI)* means the
situation where the degree of ownership, control, or influence over a
Contractor by a foreign interest is such that a reasonable basis exists
for concluding that compromise of classified information or special
nuclear material may result.

\(c\) Facility Clearance means an administrative determination that a
facility is eligible to access, produce, use or store classified
information, or special nuclear material. A Facility Clearance is based
upon a determination that satisfactory safeguards and security measures
are carried out for the activities being performed at the facility. It
is DOE policy that all Contractors or Subcontractors requiring access
authorizations be processed for a Facility Clearance at the level
appropriate to the activities being performed under the contract.
Approval for a Facility Clearance shall be based upon:

\(1\) A favorable foreign ownership, control, or influence (FOCI)
determination based upon the Contractor's response to the ten questions
in Standard Form 328 and any required, supporting data provided by the
Contractor;

\(2\) A contract or proposed contract containing the appropriate
security clauses;

\(3\) Approved safeguards and security plans which describe protective
measures appropriate to the activities being performed at the facility;

\(4\) An established Reporting Identification Symbol code for the
Nuclear Materials Management and Safeguards Reporting System if access
to nuclear materials is involved;

\(5\) A survey conducted no more than 6 months before the Facility
Clearance date, with a composite facility rating of satisfactory, if the
facility is to possess classified matter or special nuclear material at
its location;

\(6\) Appointment of a Facility Security Officer, who must possess or be
in the process of obtaining an access authorization equivalent to the
Facility Clearance; and, if applicable, appointment of a Materials
Control and Accountability Representative; and

\(7\) Access authorizations for key management personnel who will be
determined on a case-by-case basis, and must possess or be in the
process of obtaining access authorizations equivalent to the level of
the Facility Clearance.

\(d\) A Facility Clearance is required prior to the award of a contract
requiring access to classified information and the granting of any
access authorizations under a contract. Prior to award of a contract,
the DOE must determine that award of the contract to the offeror will
not pose an undue risk to the common defense and security as a result of
its access to classified information or special nuclear material in the
performance of the contract. The Contracting Officer may require the
offeror to submit such additional information as deemed pertinent to
this determination.

\(e\) A Facility Clearance is required even for contracts that do not
require the Contractor's corporate offices to receive, process,
reproduce, store, transmit, or handle classified information or special
nuclear material, but which require DOE access authorizations for the
Contractor's employees to perform work at a DOE location. This type
facility is identified as a non-possessing facility.

\(f\) Except as otherwise authorized in writing by the Contracting
Officer, the provisions of any resulting contract must require that the
contractor insert provisions similar to the foregoing in all
subcontracts and purchase orders. Any Subcontractors requiring access
authorizations for access to classified information or special nuclear
material shall be directed to provide responses to the questions in
Standard Form 328, Certificate Pertaining to Foreign Interests, directly
to the prime contractor or the Contracting Officer for the prime
contract.

**NOTICE TO OFFERORS - CONTENTS REVIEW**

**(PLEASE REVIEW BEFORE SUBMITTING)**

Prior to submitting the Standard Form 328, required by paragraph (a)(1)
of this clause, the offeror should review the FOCI submission to ensure
that:

\(1\) The Standard Form 328 has been signed and dated by an authorized
official of the company;

\(2\) If publicly owned, the Contractor\'s most recent annual report,
and its most recent proxy statement for its annual meeting of
stockholders have been attached; or, if privately owned, the audited,
consolidated financial information for the most recently closed
accounting year has been attached;

\(3\) A copy of the company's articles of incorporation and an attested
copy of the company's by-laws, or similar documents filed for the
company's existence and management, and all amendments to those
documents;

\(4\) A list identifying the organization\'s owners, officers,
directors, and executive personnel, including their names, social
security numbers, citizenship, titles of all positions they hold within
the organization, and what clearances, if any, they possess or are in
the process of obtaining, and identification of the government
agency(ies) that granted or will be granting those clearances; and,

\(5\) A summary FOCI data sheet.

NOTE: A FOCI submission must be attached for each tier parent
organization (i.e. ultimate parent and any intervening levels of
ownership). If any of these documents are missing, award of the contract
cannot be completed.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984, as amended at
56 FR 41965, Aug. 26, 1991, 59 FR 6221, Feb. 10, 1994; 62 FR 2310, Jan.
16, 1997; 62 FR 42072, Aug. 5, 1997; 67 FR 14873, Mar. 28, 2002\]

**952.204-74 \[Removed\]**

**952.204-75 Public Affairs.**

As prescribed in 48 CFR 904.7201, insert the following clause.

PUBLIC AFFAIRS (DEC 2000

\(a\) The Contractor must cooperate with the Department in releasing
unclassified information to the public and news media regarding DOE
policies, programs, and activities relating to its effort under the
contract. The responsibilities under this clause must be accomplished
through coordination with the Contracting Officer and appropriate DOE
public affairs personnel in accordance with procedures defined by the
Contracting Officer.

\(b\) The Contractor is responsible for the development, planning, and
coordination of proactive approaches for the timely dissemination of
unclassified information regarding DOE activities onsite and offsite,
including, but not limited to, operations and programs. Proactive public
affairs programs may utilize a variety of communication media, including
public workshops, meetings or hearings, open houses, newsletters, press
releases, conferences, audio/visual presentations, speeches, forums,
tours, and other appropriate stakeholder interactions.

\(c\) The Contractor\'s internal procedures must ensure that all
releases of information to the public and news media are coordinated
through, and approved by, a management official at an appropriate level
within the Contractor\'s organization.

\(d\) The Contractor must comply with DOE procedures for obtaining
advance clearances on oral, written, and audio/visual informational
material prepared for public dissemination or use.

\(e\) Unless prohibited by law, and in accordance with procedures
defined by the Contracting Officer, the Contractor must notify the
Contracting Officer and appropriate DOE public affairs personnel of
communications or contacts with Members of Congress relating to the
effort performed under the contract.

\(f\) In accordance with procedures defined by the Contracting Officer,
the Contractor must notify the Contracting Officer and appropriate DOE
public affairs personnel of activities or situations that may attract
regional or national news media attention and of non-routine inquiries
from national news media relating to the effort performed under the
contract.

\(g\) In releases of information to the public and news media, the
Contractor must fully and accurately identify the Contractor\'s
relationship to the Department and fully and accurately credit the
Department for its role in funding programs and projects resulting in
scientific, technical, and other achievements.

(End of Clause) \[65 FR 80994, Dec. 22, 2000\]

**952.204-76 Conditional Payment of Fee or Profit -- Safeguarding
Restricted Data and Other Classified Information.**

As prescribed at 48 CFR (DEAR) 904.404(d)(6), insert the following
clause.

CONDITIONAL PAYMENT OF FEE OR PROFIT -- SAFEGUARDING

RESTRICTED DATA AND OTHER CLASSIFIED INFORMATION \[JAN 2004\]

\(a\) General. (1) The payment of fee or profit (i.e., award fee, fixed
fee, and incentive fee or profit) under this contract is dependent upon
the contractor's compliance with the terms and conditions of this
contract relating to the safeguarding of Restricted Data and other
classified information (i.e., Formerly Restricted Data and National
Security Information) including compliance with applicable law,
regulation, and DOE directives. The term "contractor" as used in this
clause to address failure to comply shall mean "contractor or contractor
employee."

\(2\) In addition to other remedies available to the Government, if the
contractor fails to comply with the terms and conditions of this
contract relating to the safeguarding of Restricted Data and other
classified information, the contracting officer may unilaterally reduce
the amount of fee or profit that is otherwise payable to the contractor
in accordance with the terms and conditions of this clause.

\(3\) Any reduction in the amount of fee or profit earned by the
contractor will be determined by the severity of the contractor's
failure to comply with contract terms and conditions relating to the
safeguarding of Restricted data or other classified information pursuant
to the degrees specified in paragraph (c) of this clause.

\(b\) Reduction Amount. (1) If in any period (see 48 CFR 952.204-76
(b)(2)) it is found that the contractor has failed to comply with
contract terms and conditions relating to the safeguarding of Restricted
Data or other classified information, the contractor's fee or profit of
the period may be reduced. Such reduction shall not be less than 26% nor
greater than 100% of the total fee or profit earned for a first degree
performance failure, not less than 11% nor greater than 25% for a second
degree performance failure, and up to 10% for a third degree performance
failure. The contracting officer must consider mitigating factors that
may warrant a reduction below the specified range (see 48 CFR
904.402(c)). The mitigating factors include, but are not limited to, the
following:

\(i\) Degree of control the contractor had over the event or incident.

\(ii\) Efforts the contractor had made to anticipate and mitigate the
possibility of the event in advance.

\(iii\) Contractor self-identification and response to the event to
mitigate impacts and recurrence.

\(iv\) General status (trend and absolute performance) of safeguarding
Restricted Data and other classified information and compliance in
related security areas.

(2)(i) For purposes of this clause,(2)(i) Except in the case of
performance-based firm-fixed-price contracts (see paragraph (b)(3) of
this clause), the contracting officer, for purposes of this clause, will
at the time of contract award, or as soon as practicable thereafter,
allocate the total amount of fee or profit that is available under this
contract to equal periods of \[insert 6 or 12\] months to run
sequentially for the entire term of the contract (i.e., from the
effective date of the contract to the expiration date of the contract,
including all options). The amount of fee or profit to be allocated to
each period shall be equal to the average monthly fee or profit that is
available or otherwise payable during the entire term of the contract,
multiplied by the number of months established above for each period.

\(ii\) Under this clause, the total amount of fee or profit that is
subject to reduction in a period in which a performance failure occurs,
in combination with any reduction made under any other clause in the
contract that provides for a reduction to the fee or profit, shall not
exceed the amount of fee or profit that is earned by the contractor in
the period established pursuant to paragraph (b)(2)(i) of this clause.

\(3\) For performance-based firm-fixed-price contracts, the contracting
officer will at the time of contract award include negative monetary
incentives in the contract for contractor violations relating to the
safeguarding of Restricted Data and other classified information.

\(c\) Safeguarding Restricted Data and Other Classified Information.
Performance failures occur if the contractor does not comply with the
terms and conditions of this contract relating to the safeguarding of
Restricted Data and other classified information. The degrees of
performance failures relating to the contractor's obligations under this
contract for safeguarding of Restricted Data and other classified
information are as follows:

\(1\) [First Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have resulted in, or that can reasonably be expected to
result in, exceptionally grave damage to the national security. The
following are examples of performance failures or performance failures
of similar import that will be considered first degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating a risk of, loss,
compromise, or unauthorized disclosure of Top Secret Restricted Data or
other information classified as Top Secret, any classification level of
information in a Special Access Program (SAP), information identified as
sensitive compartmented information (SCI), or high risk nuclear
weapons-related data.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Top Secret
Restricted Data, or other information classified as Top Secret, any
classification level of information in a SAP, information identified as
SCI, or high risk nuclear weapons-related data.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Top Secret Restricted Data or other information classified
as Top Secret, any classification level of information in a SAP,
information identified as SCI, or high risk nuclear weapons-related
data.

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Top Secret Restricted
Data or other information classified as Top Secret, any classification
level of information in a SAP, information identified as SCI, or high
risk nuclear weapons-related data.

\(2\) [Second Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have actually resulted in, or that can reasonably be
expected to result in, serious damage to the national security. The
following are examples of performance failures or performance failures
of similar import that will be considered second degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Secret Restricted Data or other
information classified as Secret.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Secret Restricted
Data, or other information classified as Secret.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Restricted Data or other information regardless of
classification (except for information covered by paragraph (c)(1)(iii)
of this clause).

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Secret Restricted Data
or other information classified as Secret.

\(3\) [Third Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have actually resulted in, or that can reasonably be
expected to result in, undue risk to the common defense and security. In
addition, this category includes performance failures that result from a
lack of contractor management and/or employee attention to the proper
safeguarding of Restricted Data and other classified information. These
performance failures may be indicators of future, more severe
performance failures and/or conditions, and if identified and corrected
early would prevent serious incidents. The following are examples of
performance failures or performance failures of similar import that will
be considered third degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Restricted Data or other information
classified as Confidential.

\(ii\) Failure to promptly report alleged or suspected violations of
laws, regulations, or directives pertaining to the safeguarding of
Restricted Data or other classified information.

\(iii\) Failure to identify or timely execute corrective actions to
mitigate or eliminate identified vulnerabilities and reduce residual
risk relating to the protection of Restricted Data or other classified
information in accordance with the contractor's Safeguards and Security
Plan or other security plan, as applicable.

\(iv\) Contractor actions that result in performance failures which unto
themselves pose minor risk, but when viewed in the aggregate indicate
degradation in the integrity of the contractor's safeguards and security
management system relating to the protection of Restricted Data and
other classified information.

(End of Clause)

\[68 FR 68771, Dec. 10, 2003\]

952.204-77 Computer Security.

As prescribed in 904.404(d)(7), the following clause shall be included:

Computer Security (AUG 2006)

\(a\) Definitions.

\(1\) Computer means desktop computers, portable computers, computer
networks (including the DOE Network and local area networks at or
controlled by DOE organizations), network devices, automated information
systems, and or other related computer equipment owned by, leased, or
operated on behalf of the DOE.

\(2\) Individual means a DOE contractor or subcontractor employee, or
any other person who has been granted access to a DOE computer or to
information on a DOE computer, and does not include a member of the
public who sends an e-mail message to a DOE computer or who obtains
information available to the public on DOE Web sites.

\(b\) Access to DOE computers. A contractor shall not allow an
individual to have access to information on a DOE computer unless:

\(1\) The individual has acknowledged in writing that the individual has
no expectation of privacy in the use of a DOE computer; and,

\(2\) The individual has consented in writing to permit access by an
authorized investigative agency to any DOE computer used during the
period of that individual\'s access to information on a DOE computer,
and for a period of three years thereafter.

\(c\) No expectation of privacy. Notwithstanding any other provision of
law (including any provision of law enacted by the Electronic
Communications Privacy Act of 1986), no individual using a DOE computer
shall have any expectation of privacy in the use of that computer.

\(d\) Written records. The contractor is responsible for maintaining
written records for itself and subcontractors demonstrating compliance
with the provisions of paragraph (b) of this section. The contractor
agrees to provide access to these records to the DOE, or its authorized
agents, upon request.

\(e\) Subcontracts. The contractor shall insert this clause, including
this paragraph (e), in subcontracts under this contract that may provide
access to computers owned, leased or operated on behalf of the DOE.

(End of Clause)

\[71 FR 40880, Jul. 19, 2006\]

**952.208 Clauses related to required sources of supply.**

**952.208-7 Tagging of leased vehicles.**

As prescribed in 908.1104, insert the following clause when leasing
commercial vehicles for periods in excess of 60 days.

**TAGGING OF LEASED VEHICLES (APR 1984)**

\(a\) DOE intends to use U.S. Government license tags.

\(b\) While it is the intention that vehicles leased hereunder shall
operate on Federal tags, the DOE reserves the right to utilize State
tags if necessary to accomplish its mission. Should State tags be
required, the contractor shall furnish the DOE the documentation
required by the State to acquire such tags.

\[67 FR 14869, Mar. 28, 2002\]

**952.208-70 Printing.**

As prescribed in 908.802, insert the following clause.

PRINTING (APR 1984)

The contractor shall not engage in, nor subcontract for, any printing
(as that term is defined in Title I of the U.S. Government Printing and
Binding Regulations in effect on the effective date of this contract) in
connection with the performance of work under this contract. Provided,
however, that performance of a requirement under this contract involving
the duplication of less than 5,000 copies of a single unit, or no more
than 25,000 units in the aggregate of multiple units, will not be deemed
to be printing. A unit is defined as one sheet, size 8½ by 11 inches one
side only, one color. A requirement is defined as a single publication
document.

\(1\) The term \"printing\" includes the following processes:
composition, plate making, presswork, binding, microform publishing, or
the end items produced by such processes.

\(2\) If fulfillment of the contract will necessitate reproduction in
excess of the limits set forth above, the contractor shall notify the
contracting officer in writing and obtain the contracting officer\'s
approval prior to acquiring on DOE\'s behalf production, acquisition,
and dissemination of printed matter. Such printing must be obtained from
the Government Printing Office (GPO), a contract source designated by
GPO or a Joint Committee on Printing authorized federal printing plant.

\(3\) Printing services not obtained in compliance with this guidance
will result in the cost of such printing being disallowed.

\(4\) The Contractor will include in each of his subcontracts hereunder
a provision substantially the same as this clause including this
paragraph (4).

\[49 FR 12042, Mar. 28, 1984; 49 FR 38951, Oct. 2, 1984\]

**952.209 Clauses related to contractor\'s qualifications.**

**952.209-8 Organizational Conflicts of Interest-Disclosure.**

As prescribed in 48 CFR 909.507-1(e), insert the following provision:

ORGANIZATIONAL CONFLICTS OF INTEREST DISCLOSURE-ADVISORY AND ASSISTANCE
SERVICES (JUN 1997)

\(a\) Organizational conflict of interest means that because of other
activities or relationships with other persons, a person is unable or
potentially unable to render impartial assistance or advice to the
Government, or the person\'s objectivity in performing the contract work
is or might be otherwise impaired, or a person has an unfair competitive
advantage.

\(b\) An offeror notified that it is the apparent successful offeror
shall provide the statement described in paragraph (c) of this
provision. For purposes of this provision, \"apparent successful
offeror\" means the proposer selected for final negotiations or, where
individual contracts are negotiated with all firms in the competitive
range, it means all such firms.

\(c\) The statement must contain the following:

\(1\) A statement of any past (within the past twelve months), present,
or currently planned financial, contractual, organizational, or other
interests relating to the performance of the statement of work. For
contractual interests, such statement must include the name, address,
telephone number of the client or client(s), a description of the
services rendered to the previous client(s), and the name of a
responsible officer or employee of the offeror who is knowledgeable
about the services rendered to each client, if, in the 12 months
preceding the date of the statement, services were rendered to the
Government or any other client (including a foreign government or
person) respecting the same subject matter of the instant solicitation,
or directly relating to such subject matter. The agency and contract
number under which the services were rendered must also be included, if
applicable. For financial interests, the statement must include the
nature and extent of the interest and any entity or entities involved in
the financial relationship. For these and any other interests enough
such information must be provided to allow a meaningful evaluation of
the potential effect of the interest on the performance of the statement
of work.

\(2\) A statement that no actual or potential conflict of interest or
unfair competitive advantage exists with respect to the advisory and
assistance services to be provided in connection with the instant
contract or that any actual or potential conflict of interest or unfair
competitive advantage that does or may exist with respect to the
contract in question has been communicated as part of the statement
required by (b) of this provision.

\(d\) Failure of the offeror to provide the required statement may
result in the offeror being determined ineligible for award.
Misrepresentation or failure to report any fact may result in the
assessment of penalties associated with false statements or such other
provisions provided for by law or regulation.

(End of provision)

\[62 FR 40748, Jul. 30, 1997\]

**952.209-71 \[Reserved\].**

\[59 FR 66259, Dec. 23, 1994\]

**952.209-72 Organizational conflicts of interest.**

As prescribed at 48 CFR 909.507-2, insert the following clause:

ORGANIZATIONAL CONFLICTS OF INTEREST (JUN 1997)

\(a\) Purpose. The purpose of this clause is to ensure that the
contractor (1) is not biased because of its financial, contractual,
organizational, or other interests which relate to the work under this
contract, and (2) does not obtain any unfair competitive advantage over
other parties by virtue of its performance of this contract.

\(b\) Scope. The restrictions described herein shall apply to
performance or participation by the contractor and any of its affiliates

or their successors in interest (hereinafter collectively referred to as
\"contractor\") in the activities covered by this clause as a prime
contractor, subcontractor, cosponsor, joint venturer, consultant, or in
any similar capacity. For the purpose of this clause, affiliation occurs
when a business concern is controlled by or has the power to control
another or when a third party has the power to control both.

\(1\) Use of Contractor\'s Work Product. (i) The contractor shall be
ineligible to participate in any capacity in Department contracts,
subcontracts, or proposals therefor (solicited and unsolicited) which
stem directly from the contractor\'s performance of work under this
contract for a period of (Contracting Officer see DEAR 9.507-2 and enter
specific term) years after the completion of this contract. Furthermore,
unless so directed in writing by the contracting officer, the Contractor
shall not perform any advisory and assistance services work under this
contract on any of its products or services or the products or services
of another firm if the contractor is or has been substantially involved
in their development or marketing. Nothing in this subparagraph shall
preclude the contractor from competing for follow-on contracts for
advisory and assistance services.

\(ii\) If, under this contract, the contractor prepares a complete or
essentially complete statement of work or specifications to be used in
competitive acquisitions, the contractor shall be ineligible to perform
or participate in any capacity in any contractual effort which is based
on such statement of work or specifications. The contractor shall not
incorporate its products or services in such statement of work or
specifications unless so directed in writing by the contracting officer,
in which case the restriction in this subparagraph shall not apply.

\(iii\) Nothing in this paragraph shall preclude the contractor from
offering or selling its standard and commercial items to the Government.

\(2\) Access to and use of information. (i) If the contractor, in the
performance of this contract, obtains access to information, such as
Department plans, policies, reports, studies, financial plans, internal
data protected by the Privacy Act of 1974 (5 U.S.C. 552a), or data which
has not been released or otherwise made available to the public, the
contractor agrees that without prior written approval of the contracting
officer it shall not:

\(A\) use such information for any private purpose unless the
information has been released or otherwise made available to the public;

\(B\) compete for work for the Department based on such information for
a period of six (6) months after either the completion of this contract
or until such information is released or otherwise made available to the
public, whichever is first;

\(C\) submit an unsolicited proposal to the Government which is

based on such information until one year after such information is
released or otherwise made available to the public; and

\(D\) release such information unless such information has previously
been released or otherwise made available to the public by the
Department.

\(ii\) In addition, the contractor agrees that to the extent it receives
or is given access to proprietary data, data protected by the Privacy
Act of 1974 (5 U.S.C. 552a), or other confidential or privileged
technical, business, or financial information under this contract, it
shall treat such information in accordance with any restrictions imposed
on such information.

\(iii\) The contractor may use technical data it first produces under
this contract for its private purposes consistent with paragraphs
(b)(2)(i) (A) and (D) of this clause and the patent, rights in data, and
security provisions of this contract.

\(c\) Disclosure after award. (1) The contractor agrees that, if
changes, including additions, to the facts disclosed by it prior to
award of this contract, occur during the performance of this contract,
it shall make an immediate and full disclosure of such changes in
writing to the contracting officer. Such disclosure may include a
description of any action which the contractor has taken or proposes to
take to avoid, neutralize, or mitigate any resulting conflict of
interest. The Department may, however, terminate the contract for
convenience if it deems such termination to be in the best interest of
the Government.

\(2\) In the event that the contractor was aware of facts required to be
disclosed or the existence of an actual or potential organizational
conflict of interest and did not disclose such facts or such conflict of
interest to the contracting officer, DOE may terminate this contract for
default.

\(d\) Remedies. For breach of any of the above restrictions or for
nondisclosure or misrepresentation of any facts required to be disclosed
concerning this contract, including the existence of an actual or
potential organizational conflict of interest at the time of or after
award, the Government may terminate the contract for default, disqualify
the contractor from subsequent related contractual efforts, and pursue
such other remedies as may be permitted by law or this contract.

\(e\) Waiver. Requests for waiver under this clause shall be directed in
writing to the contracting officer and shall include a full description
of the requested waiver and the reasons in support thereof. If it is
determined to be in the best interests of the Government, the
contracting officer may grant such a waiver in writing.

(End of clause)

Alternate I

In accordance with 909.507-2 and 970.0905, include the following
alternate in the specified types of contracts.

\(f\) Subcontracts. (1) The contractor shall include a clause,
substantially similar to this clause, including this paragraph (f), in
subcontracts expected to exceed the simplified acquisition threshold
determined in accordance with FAR Part 13 and involving the performance
of advisory and assistance services as that term is defined at FAR
37.201. The terms \`\`contract,\'\' \"contractor,\" and \"contracting
officer\" shall be appropriately modified to preserve the Government\'s
rights.

\(2\) Prior to the award under this contract of any such subcontracts
for advisory and assistance services, the contractor shall obtain from
the proposed subcontractor or consultant the disclosure required by DEAR
909.507-1, and shall determine in writing whether the interests
disclosed present an actual or significant potential for an
organizational conflict of interest. Where an actual or significant
potential organizational conflict of interest is identified, the
contractor shall take actions to avoid, neutralize, or mitigate the
organizational conflict to the satisfaction of the contractor. If the
conflict cannot be avoided or neutralized, the contractor must obtain
the approval of the DOE contracting officer prior to entering into the
subcontract.

(End of alternate)

\[49 FR 12042, Mar. 28, 1984, as amended at 52 FR 38425, Oct. 16, 1987
and 59 FR 66259, Dec. 23, 1994; 62 FR 40748, Jul. 30, 1997\]

**952.211 Clauses related to contract delivery or performance.**

\[61 FR 21975, May 13, 1996\]

**952.211-70 Priorities and allocations for energy programs
(solicitations).**

As prescribed in 911.604(a), insert the following provision in
solicitations that will result in the award of a contract in support of
DOE atomic energy programs.

PRIORITIES AND ALLOCATIONS (ATOMIC ENERGY) (APR 2008)

Contracts or purchase orders awarded as a result of this solicitation
shall be assigned a \[ \] DO-Rating; \[ \] DX-Rating; and certified for
national defense use in accordance with the Defense Priorities and
Allocations System (DPAS) regulation (15 CFR Part 700) (Contracting
officer check appropriate box.) (End of Provision)

\[73 FR 10980 February 29, 2008\]

**952.211-71 Priorities and allocations for energy programs
(contracts).**

As prescribed in 911.604(b), insert the following clause in contracts
and purchase orders that are placed in support of authorized DOE atomic
energy pursuant to the Atomic Energy Act of 1954, as amended.

PRIORITIES AND ALLOCATIONS (ATOMIC ENERGY) (APR 2008)

The Contractor shall follow the provisions of Defense Priorities and
Allocations System (DPAS) regulation (15 CFR Part 700) in obtaining
controlled materials and other products and materials needed to fill
this contract. (End of Clause) \[73 FR 10980 February 29, 2008\]

**952.211-72 \[Reserved\].**

**952.211-73 \[Reserved\].**

**952.215-70 Key Personnel.**

As prescribed in 48 CFR 915.408-70, the contracting officer shall insert
the following clause:

KEY PERSONNEL (DEC 2000)

\(a\) The personnel listed below or elsewhere in this contract \[Insert
cross-reference, if applicable\] are considered essential to the work
being performed under this contract. Before removing, replacing, or
diverting any of the listed or specified personnel, the Contractor must:
(1) Notify the Contracting Officer reasonably in advance; (2) submit
justification (including proposed substitutions) in sufficient detail to
permit evaluation of the impact on this contract; and (3) obtain the
Contracting Officer\'s written approval. Notwithstanding the foregoing,
if the Contractor deems immediate removal or suspension of any member of
its management team is necessary to fulfill its obligation to maintain
satisfactory standards of employee competency, conduct, and integrity
under the clause at 48 CFR 970.5203-3, Contractor\'s Organization, the
Contractor may remove or suspend such person at once, although the
Contractor must notify Contracting Officer prior to or concurrently with
such action.

\(b\) The list of personnel may, with the consent of the contracting
parties, be amended from time to time during the course of the contract
to add or delete personnel.

\[Insert List of Key Personnel unless listed elsewhere in the contract\]

(End of clause) \[65 FR 80994, Dec. 22, 2000\]

**952.216 Clauses related to types of contracts.**

**952.216-7 Allowable cost and payment.**

Alternate I

If the contract is with a nonprofit organization, other than an
educational institution; or a State or local government, modify the
clause at FAR 52.216-7 Allowable Cost and Payment by deleting from
paragraph (a) the phrase \"Subpart 31.2\" and substituting for it
\"Subpart 31.7.\"

Alternate II

When contracting with a commercial organization modify paragraph (a) of
the clause at FAR 52.216-7 by adding the phrase \"as supplemented by
Subpart 931.2 of the Department of Energy Acquisition Regulations
(DEAR),\" after the acronym \"(FAR)\".

**952.216-15 Predetermined indirect cost rates.**

Alternate (APR 1994):

As prescribed in 916.307(j), modify paragraph (c) of the clause at FAR
52.216-15,

Predetermined Indirect Cost Rates, by deleting the words \"Subpart
31.3\" and substituting for them \"Subpart 31.6\" and insert the clause
in solicitations and contracts when a cost-reimbursement research and
development contract with a State or local government is contemplated
and predetermined indirect cost rates are to be used.

\[62 FR 2310, Jan. 16, 1997\]

**952.217-70 Acquisition of real property.**

Insert the following clause when required by 917.7403.

ACQUISITION OF REAL PROPERTY (APR 1984)

\(a\) Notwithstanding any other provision of the contract, the prior
approval of the contracting officer shall be obtained when, in
performance of this contract, the contractor acquires or proposes to
acquire use of real property by:

\(1\) Purchase, on the Government\'s behalf or in the contractor\'s own
name, with title eventually vesting in the Government.

\(2\) Lease, and the Government assumes liability for, or will otherwise
pay for the obligation under the lease as a reimbursable contract cost.

\(3\) Acquisition of temporary interest through easement, license or
permit, and the Government funds the entire cost of the temporary
interest.

\(b\) Justification of and execution of any real property acquisitions
shall be in accordance and compliance with directions provided by the
contracting officer.

\(c\) The substance of this clause, including this paragraph (c), shall
be included in any subcontract occasioned by this contract under which
property described in paragraph (a) of this clause shall be acquired.

\[49 FR 12042, Mar. 28, 1984, as amended at 52 FR 38426, Oct. 16, 1987;
56 FR 41965, Aug. 26, 1991; 67 FR 14869\]

**952.219-70 DOE Mentor-Protégé program.**

In accordance with 919.7014 insert the following provision in applicable
solicitations.

DOE Mentor-Protégé Program (May 2000)

The Department of Energy has established a Mentor-Protégé Program to
encourage its prime contractors to assist firms certified under section
8(a) of the Small Business Act by SBA, other small disadvantaged
businesses, women-owned small businesses, Historically Black Colleges
and Universities and Minority Institutions, other minority institutions
of higher learning and small business concerns owned and controlled by
service disabled veterans in enhancing their business abilities. If the
contract resulting from this solicitation is awarded on a
cost-plus-award fee basis, the contractor\'s performance as a Mentor may
be evaluated as part of the award fee plan. Mentor and Protégé firms
will develop and submit \`\`lessons learned\'\' evaluations to DOE at
the conclusion of the contract. Any DOE contractor that is interested in
becoming a Mentor should refer to the applicable regulations at 48 CFR
919.70 and should contact the Department of Energy\'s Office of Small
and Disadvantaged Business Utilization.

\[FR Doc. 00-9981 Filed 4-20-00; 8:45 am\]

**952.223 Clauses related to environment, conservation, and occupational
safety.**

**952.223-71 Integration of environment, safety, and health into work
planning and execution.**

As prescribed in 923.7002, the clause set forth at 48 CFR 970.5223-1
shall be included in all contracts and subcontracts for, and be made
applicable to, work to be performed at a government-owned or leased
facility where DOE has elected to assert its statutory authority to
establish and enforce occupational safety and health standards
applicable to the work conditions of contractor and subcontractor
employees, and to the protection of the public health and safety.

\[62 FR 34842, Jun. 27, 1997; 65 FR 80994, Dec. 22, 2000\]

**952.223-72 Radiation protection and nuclear criticality.**

As prescribed in 923.7002, the clause set forth herein shall be included
in those contracts or subcontracts for, and be made applicable to, work
to be performed at a facility where DOE does not elect to assert its
statutory authority to enforce occupational safety and health standards
applicable to the working conditions of contractor and subcontractor
employees, but does need to enforce radiological safety and health
standards pursuant to provisions of the contract or subcontract rather
than by reliance upon Nuclear Regulatory Commission licensing
requirements (including agreements with states under section 274 of the
Atomic Energy Act).

RADIATION PROTECTION AND NUCLEAR CRITICALITY (APR 1984)

The contractor shall take all reasonable precautions in the performance
of work under this contract to protect the safety and health of
employees and of members of the public against the hazards of ionizing
radiation and radioactive materials and shall comply with all applicable
radiation protection and nuclear criticality safety standards and
requirements (including reporting requirements) of DOE. The contractor
shall submit a management program and implementation plan to the
contracting officer for review and approval within 30 days after the
effective date of this contract or modification. In the event that the
contractor fails to comply with said standards and requirements of DOE,
the contracting officer may, without prejudice to any other legal or
contractual rights of DOE, issue an order stopping all or any part of
the work. Thereafter, a start order for resumption of the work may be
issued at the discretion of the contracting officer. The contractor
shall make no claim for an extension of time or for compensation or
damages by reason of or in connection with such work stoppage.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984\]

**952.223-74 \[Reserved\].**

\[62 FR 34842, Jun. 27, 1997\]

**952.223-75 Preservation of individual occupational radiation exposure
records.**

The contracting officer shall insert this clause in contracts containing
952.223-71, Integration of environment, safety, and health into work
planning and execution, or 952.223-72, Radiation protection and nuclear
criticality.

PRESERVATION OF INDIVIDUAL OCCUPATIONAL RADIATION EXPOSURE RECORDS (APR
1984)

Individual occupational radiation exposure records generated in the
performance of work under this contract shall be subject to inspection
by DOE and shall be preserved by the contractor until disposal is
authorized by DOE or at the option of the contractor delivered to DOE
upon completion or termination of the contract. If the contractor
exercises the foregoing option, title to such records shall vest in DOE
upon delivery.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984; 62 FR 34842,
Jun. 27, 1997\]

952.223-76 Conditional Payment of Fee or Profit -- Safeguarding
Restricted Data and Other Classified Information and Protection of
Worker Safety and Health.

As prescribed at 48 CFR (DEAR) 923.7003(f), insert the following clause.

CONDITIONAL PAYMENT OF FEE OR PROFIT -- SAFEGUARDING RESTRICTED DATA

AND OTHER CLASSIFIED INFORMATION AND PROTECTION

OF WORKER SAFETY AND HEALTH \[JAN 2004\]

\(a\) General. (1) The payment of fee or profit (i.e., award fee, fixed
fee, and incentive fee or profit) under this contract is dependent upon
the contractor's compliance with the terms and conditions of this
contract relating to the safeguarding of Restricted Data and other
classified information (i.e., Formerly Restricted Data and National
Security Information) and relating to the protection of worker safety
and health, including compliance with applicable law, regulation, and
DOE directives. The term "contractor" as used in this clause to address
failure to comply shall mean "contractor or contractor employee."

\(2\) In addition to other remedies available to the Federal Government,
if the contractor fails to comply with the terms and conditions of this
contract relating to the safeguarding of Restricted Data and other
classified information or relating to the protection of worker safety
and health, the contracting officer may unilaterally reduce the amount
of fee or profit that is otherwise payable to the contractor in
accordance with the terms and conditions of this clause.

\(3\) Any reduction in the amount of fee or profit earned by the
contractor will be determined by the severity of the contractor's
failure to comply with contract terms and conditions relating to the
safeguarding of Restricted data or other classified information or
relating to worker safety and health pursuant to the degrees specified
in paragraphs (c) and (d) of this clause.

\(b\) Reduction Amount. (1) If in any period (see 48 CFR 952.223-76
(b)(2)) it is found that the contractor has failed to comply with
contract terms and conditions relating to the safeguarding of Restricted
Data or other classified information or relating to the protection of
worker safety and health, the contractor's fee or profit of the period
may be reduced. Such reduction shall not be less than 26% nor greater
than 100% of the total fee or profit earned for a first degree
performance failure, not less than 11% nor greater than 25% for a second
degree performance failure, and up to 10% for a third degree performance
failure. The contracting officer must consider mitigating factors that
may warrant a reduction below the specified range (see 48 CFR 904.402(c)
and 48 CFR 923.7001(b)). The mitigating factors include, but are not
limited to, the following (((v), (vi), (vii), and (viii) apply to WS&H
only):

\(i\) Degree of control the contractor had over the event or incident.

\(ii\) Efforts the contractor had made to anticipate and mitigate the
possibility of the event in advance.

\(iii\) Contractor self-identification and response to the event to
mitigate impacts and recurrence.

\(iv\) General status (trend and absolute performance) of: safeguarding
Restricted Data and other classified information and compliance in
related security areas; or of protecting WS&H and compliance in related
areas.

\(v\) Contractor demonstration to the Contracting Officer's satisfaction
that the principles of industrial WS&H standards are routinely practiced
(e.g., Voluntary Protection Program Star Status).

\(vi\) Event caused by \"Good Samaritan\" act by the contractor (e.g.,
offsite emergency response).

\(vii\) Contractor demonstration that a performance measurement system
is routinely used to improve and maintain WS&H performance (including
effective resource allocation) and to support DOE corporate
decision-making (e.g., policy, WS&H programs).

\(viii\) Contractor demonstration that an Operating Experience and
Feedback Program is functioning that demonstrably affects continuous
improvement in WS&H by use of lessons-learned and best practices inter-
and intra-DOE sites.

(2)(i) Except in the case of performance-based, firm-fixed-price
contracts (see paragraph (b)(3) of this clause), the contracting
officer, for purposes of this clause, will at the time of contract
award, or as soon as practicable thereafter, allocate the total amount
of fee or profit that is available under this contract to equal periods
of \[insert 6 or 12\] months to run sequentially for the entire term of
the contract (i.e., from the effective date of the contract to the
expiration date of the contract, including all options). The amount of
fee or profit to be allocated to each period shall be equal to the
average monthly fee or profit that is available or otherwise payable
during the entire term of the contract, multiplied by the number of
months established above for each period.

\(ii\) Under this clause, the total amount of fee or profit that is
subject to reduction in a period in which a performance failure occurs,
in combination with any reduction made under any other clause in the
contract that provides for a reduction to the fee or profit, shall not
exceed the amount of fee or profit that is earned by the contractor in
the period established pursuant to paragraph (b)(2)(i) of this clause.

\(3\) For performance-based firm-fixed-price contracts, the contracting
officer will at the time of contract award include negative monetary
incentives in the contract for contractor violations relating to the
safeguarding of Restricted Data and other classified information and
relating to protection of worker safety and health.

\(c\) Safeguarding Restricted Data and Other Classified Information.
Performance failures occur if the contractor does not comply with the
terms and conditions of this contract relating to the safeguarding of
Restricted Data and other classified information. The degrees of
performance failures relating to the contractor's obligations under this
contract for safeguarding of Restricted Data and other classified
information are as follows:

\(1\) [First Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have resulted in, or that can reasonably be expected to
result in, exceptionally grave damage to the national security. The
following are examples of performance failures or performance failures
of similar import that will be considered first degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating a risk of, loss,
compromise, or unauthorized disclosure of Top Secret Restricted Data or
other information classified as Top Secret, any classification level of
information in a Special Access Program (SAP), information identified as
sensitive compartmented information (SCI), or high risk nuclear
weapons-related data.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Top Secret
Restricted Data, or other information classified as Top Secret, any
classification level of information in a SAP, information identified as
SCI, or high risk nuclear weapons-related data.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Top Secret Restricted Data or other information classified
as Top Secret, any classification level of information in a SAP,
information identified as SCI, or high risk nuclear weapons-related
data.

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Top Secret Restricted
Data or other classified information classified as Top Secret, any
classification level of information in a SAP, information identified as
SCI, or high risk nuclear weapons-related data.

\(2\) [Second Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have actually resulted in, or that can reasonably be
expected to result in, serious damage to the national security. The
following are examples of performance failures or performance failures
of similar import that will be considered second degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Secret Restricted Data or other
information classified as Secret.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Secret Restricted
Data, or other information classified as Secret.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Restricted Data or other classified information regardless
of classification (except for information covered by paragraph
(c)(1)(iii) of this clause).

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Secret Restricted Data
or other information classified as Secret.

\(3\) [Third Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have actually resulted in, or that can reasonably be
expected to result in, undue risk to the common defense and security. In
addition, this category includes performance failures that result from a
lack of contractor management and/or employee attention to the proper
safeguarding of Restricted Data and other classified information. These
performance failures may be indicators of future, more severe
performance failures and/or conditions, and if identified and corrected
early would prevent serious incidents. The following are examples of
performance failures or performance failures of similar import will be
considered third degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Restricted Data or other information
classified as Confidential.

\(ii\) Failure to promptly report alleged or suspected violations of
laws, regulations, or directives pertaining to the safeguarding of
Restricted Data or other classified information.

\(iii\) Failure to identify or timely execute corrective actions to
mitigate or eliminate identified vulnerabilities and reduce residual
risk relating to the protection of Restricted Data or other classified
information in accordance with the contractor's Safeguards and Security
Plan or other security plan, as applicable.

\(iv\) Contractor actions that result in performance failures which unto
themselves pose minor risk, but when viewed in the aggregate indicate
degradation in the integrity of the contractor's safeguards and security
management system relating to the protection of Restricted Data and
other classified information.

\(d\) Protection of Worker Safety and Health. Performance failures occur
if the contractor does not comply with the contract's WS&H terms and
conditions, which may be included in the DOE approved contractor
Integrated Safety Management System (ISMS). The degrees of performance
failure under which reductions of fee or profit will be determined are:

\(1\) First Degree: Performance failures that are most adverse to WS&H
or could threaten the successful completion of a program or project. For
contracts including ISMS requirements, failure to develop and obtain
required DOE approval of WS&H aspects of an ISMS is considered first
degree. The Government will perform necessary review of the ISMS in a
timely manner and will not unreasonably withhold approval of the WS&H
aspects of the contractor's ISMS. The following performance failures or
performance failures of similar import will be deemed first degree:

\(i\) Type A accident (defined in DOE Order 225.1A).

\(ii\) Two Second Degree performance failures during an evaluation
period.

\(2\) Second Degree: Performance failures that are significantly adverse
to WS&H. They include failures to comply with approved WS&H aspects of
an ISMS that result in an actual injury, exposure, or exceedence that
occurred or nearly occurred but had minor practical long-term health
consequences. The following performance failures or performance failures
of similar import will be considered second degree:

\(i\) Type B accident (defined in DOE Order 225.1A).

\(ii\) Non-compliance with approved WS&H aspects of an ISMS that results
in a near miss of a Type A or B accident. A near miss is a situation in
which an inappropriate action occurs, or a necessary action is omitted,
but does not result in an adverse effect.

\(iii\) Failure to mitigate or notify DOE of an imminent danger
situation after discovery, where such notification is a requirement of
the contract.

\(3\) Third Degree: Performance failures that reflect a lack of focus on
improving WS&H. They include failures to comply with approved WS&H
aspects of an ISMS that result in potential breakdown of the
contractor's WS&H system. The following performance failures or
performance failures of similar import will be considered third degree:

\(i\) Failure to implement effective corrective actions to address
deficiencies/non-compliance documented through external (e.g., Federal)
oversight and/or reported per DOE Order 232.1A requirements, or internal
oversight of DOE O 440.1A requirements.

\(ii\) Multiple similar non-compliances identified by external (e.g.,
Federal) oversight that in aggregate indicate a significant WS&H system
breakdown.

\(iii\) Non-compliances that either have, or may have, significant
negative impacts to workers that indicate a significant WS&H system
breakdown.

\(iv\) Failure to notify DOE upon discovery of events or conditions
where notification is required by the terms and conditions of the
contract.

(End of Clause)

\[68 FR 68771, Dec. 10, 2003\]

**952.223-77 Conditional Payment of Fee or Profit -- Protection of
Worker Safety and Health.**

As prescribed at 48 CFR (DEAR) 923.7003(g), insert the following clause.

CONDITIONAL PAYMENT OF FEE OR PROFIT -- PROTECTION OF

WORKER SAFETY AND HEALTH \[JAN 2004\]

\(a\) General. (1) The payment of fee or profit (i.e., award fee, fixed
fee, and incentive fee or profit) under this contract is dependent upon
the contractor's compliance with the terms and conditions of this
contract relating to the protection of worker safety and health (WS&H),
including compliance with applicable law, regulation, and DOE
directives. The term "contractor" as used in this clause to address
failure to comply shall mean "contractor or contractor employee."

\(2\) In addition to other remedies available to the Federal Government,
if the contractor fails to comply with the terms and conditions of this
contract relating to the protection of worker safety and health, the
contracting officer may unilaterally reduce the amount of fee or profit
that is otherwise payable to the contractor in accordance with the terms
and conditions of this clause.

\(3\) Any reduction in the amount of fee or profit earned by the
contractor will be determined by the severity of the contractor's
failure to comply with contract terms and conditions relating to worker
safety and health pursuant to the degrees specified in paragraph (c) of
this clause.

\(b\) Reduction Amount. (1) If in any period (see 48 CFR 952.223-77
(b)(2)) it is found that the contractor has failed to comply with
contract terms and conditions relating to the protection of worker
safety and health, the contractor's fee or profit of the period may be
reduced. Such reduction shall not be less than 26% nor greater than 100%
of the total fee or profit earned for a first degree performance
failure, not less than 11% nor greater than 25% for a second degree
performance failure, and up to 10% for a third degree performance
failure. The contracting officer must consider mitigating factors that
may warrant a reduction below the specified range (see 48 CFR
923.7001(b)). The mitigating factors include, but are not limited to,
the following:

\(i\) Degree of control the contractor had over the event or incident.

\(ii\) Efforts the contractor had made to anticipate and mitigate the
possibility of the event in advance.

\(iii\) Contractor self-identification and response to the event to
mitigate impacts and recurrence.

\(iv\) General status (trend and absolute performance) of protecting
WS&H and compliance in related areas.

\(v\) Contractor demonstration to the Contracting Officer's satisfaction
that the principles of industrial WS&H standards are routinely practiced
(e.g., Voluntary Protection Program Star Status).

\(vi\) Event caused by \"Good Samaritan\" act by the contractor (e.g.,
offsite emergency response).

\(vii\) Contractor demonstration that a performance measurement system
is routinely used to improve and maintain WS&H performance (including
effective resource allocation) and to support DOE corporate
decision-making (e.g., policy, WS&H programs).

\(viii\) Contractor demonstration that an Operating Experience and
Feedback Program is functioning that demonstrably affects continuous
improvement in WS&H by use of lessons-learned and best practices inter-
and intra-DOE sites.

(2)(i) Except in the case of performance based firm-fixed-price
contracts (see paragraph (b)(3) below), the contracting officer, for
purposes of this clause, will at the time of contract award, or as soon
as practicable thereafter, allocate the total amount of fee or profit
that is available under this contract to equal periods of \[insert 6 or
12\] months to run sequentially for the entire term of the contract
(i.e., from the effective date of the contract to the expiration date of
the contract, including all options). The amount of fee or profit to be
allocated to each period shall be equal to the average monthly fee or
profit that is available or otherwise payable during the entire term of
the contract, multiplied by the number of months established above for
each period.

\(ii\) Under this clause, the total amount of fee or profit that is
subject to reduction in a period in which a performance failure occurs,
in combination with any reduction made under any other clause in the
contract that provides for a reduction to the fee or profit, shall not
exceed the amount of fee or profit that is earned by the contractor in
the period established pursuant to paragraph (b)(2)(i) of this clause.

\(3\) For performance-based firm-fixed-price contracts, the contracting
officer will at the time of contract award include negative monetary
incentives in the contract for contractor violations relating to the
protection of worker safety and health.

\(c\) Protection of Worker Safety and Health. Performance failures occur
if the contractor does not comply with the contract's WS&H terms and
conditions, which may be included in the DOE approved contractor
Integrated Safety Management System (ISMS). The degrees of performance
failure under which reductions of fee or profit will be determined are:

\(1\) First Degree: Performance failures that are most adverse to WS&H
or could threaten the successful completion of a program or project. For
contracts including ISMS requirements, failure to develop and obtain
required DOE approval of WS&H aspects of an ISMS is considered first
degree. The Government will perform necessary review of the ISMS in a
timely manner and will not unreasonably withhold approval of the WS&H
aspects of the contractor's ISMS. The following performance failures or
performance failures of similar import will be deemed first degree:

\(i\) Type A accident (defined in DOE Order 225.1A).

\(ii\) Two Second Degree performance failures during an evaluation
period.

\(2\) Second Degree: Performance failures that are significantly adverse
to WS&H. They include failures to comply with approved WS&H aspects of
an ISMS that result in an actual injury, exposure, or exceedence that
occurred or nearly occurred but had minor practical long-term health
consequences. The following performance failures or performance failures
of similar import will be considered second degree:

\(i\) Type B accident (defined in DOE Order 225.1A).

\(ii\) Non-compliance with approved WS&H aspects of an ISMS that results
in a near miss of a Type A or B accident. A near miss is a situation in
which an inappropriate action occurs, or a necessary action is omitted,
but does not result in an adverse effect.

\(iii\) Failure to mitigate or notify DOE of an imminent danger
situation after discovery, where such notification is a requirement of
the contract.

\(3\) Third Degree: Performance failures that reflect a lack of focus on
improving WS&H. They include failures to comply with approved WS&H
aspects of an ISMS that result in potential breakdown of the
contractor's WS&H system. The following performance failures or
performance failures of similar import will be considered third degree:

\(i\) Failure to implement effective corrective actions to address
deficiencies/non-compliance documented through external (e.g., Federal)
oversight and/or reported per DOE Order 232.1A requirements, or internal
oversight of DOE O 440.1A requirements.

\(ii\) Multiple similar non-compliances identified by external (e.g.,
Federal) oversight that in aggregate indicate a significant WS&H system
breakdown.

\(iii\) Non-compliances that either have, or may have, significant
negative impacts to workers that indicate a significant WS&H system
breakdown.

\(iv\) Failure to notify DOE upon discovery of events or conditions
where notification is required by the terms and conditions of the
contract.

(End of Clause)

\[68 FR 68771, Dec. 10, 2003\]

**952.224-70 Paperwork Reduction Act.**

Insert the following clause if it is anticipated that information
collection from 10 or more persons will be necessary under the contract.

PAPERWORK REDUCTION ACT (APR 1994)

\(a\) In the event that it subsequently becomes a contractual
requirement to collect or record information calling either for answer
to identical questions from 10 or more persons other than Federal
employees, or information from Federal employees which is to be used for
statistical compilations of general public interest, the Paperwork
Reduction Act will apply to this contract. No plan, questionnaire,
interview guide, or other similar device for collecting information
(whether repetitive or single-time) may be used without first obtaining
clearance from the Office of Management and Budget (OMB).

\(b\) The contractor shall request the required OMB clearance from the
contracting officer before expending any funds or making public contacts
for the collection of data. The authority to expend funds and to proceed
with the collection of data shall be in writing by the contracting
officer. The contractor must plan at least 90 days for OMB clearance.
Excessive delay caused by the Government which arises out of causes
beyond the control and without the fault or negligence of the contractor
will be considered in accordance with the clause entitled \"Excusable
Delays,\" if such clause is applicable. If not, the period of
performance may be extended pursuant to this clause if approved by the
contracting officer.

\[62 FR 2310, Jan. 16, 1997\]

**952.225-70 Subcontracting for nuclear hot cell services.**

As prescribed in 925.7004, insert the following clause in solicitations
and contracts.

SUBCONTRACTING FOR NUCLEAR HOT CELL SERVICES (MAR 1993)

\(a\) Definitions.

\"Costs related to the decommissioning of nuclear facilities,\" as used
in this clause, means any cost associated with the compliance with
regulatory requirements governing the decommissioning of nuclear
facilities licensed by the Nuclear Regulatory Commission. Such costs for
foreign facilities and for Department of Energy facilities are costs of
decommissioning associated with the compliance with foreign regulatory
requirements or the Department\'s own requirements.

\"Costs related to the storage and disposal of nuclear waste,\" as used
in this clause, means any costs, whether required by regulation or
incurred as a matter of prudent business practice, associated with the
storage or disposal of nuclear waste.

\"Foreign company,\" as used in this clause, means a company which
offers to perform nuclear hot cell services at a facility which is not
subject to the laws and regulations of the United States, its agencies,
and its political subdivisions.

\"Nuclear hot cell services,\" as used in this clause, means services
related to the examination of, or performance of various operations on,
nuclear fuel rods, control assemblies, or other components that are
emitting large quantities of ionizing radiation, after discharge from
nuclear reactors, which are performed in specialized facilities located
away from commercial nuclear power plants, generally referred to in the
industry as \"hot cells.\"

\"Nuclear waste,\" as used in this clause, means any radioactive waste
material subject to regulation by the Nuclear Regulatory Commission or
the Department of Energy, or in the case of foreign offers, by
comparable foreign organizations.

\"United States company,\" as used in this clause, means a company which
offers to perform nuclear hot cell services at a facility subject to the
laws and regulations of the United States, its agencies, and its
political subdivisions.

\(b\) In selecting a competitive offer for a first-tier subcontract
acquisition of nuclear hot cell services, the contractor shall (1)
consider neither costs related to the decommissioning of nuclear waste
facilities nor costs related to the storage and disposal of nuclear
waste, or (2) add these costs to offers of foreign companies, if

\(i\) one or more of the offers is submitted by a United States company
and includes costs related to the decommissioning of nuclear facilities
and costs related to the storage and disposal of nuclear waste because
it is subject to such cost; and

\(ii\) one or more of the offers is submitted by a foreign company and
does not include these types of costs. (A foreign company might not be
subject to such costs or might not have to include these types of cost
in its offer if the firm is subsidized in decommissioning activity or
storage and disposal of nuclear waste, or a foreign government is
performing the activities below the actual cost of the activity.).

\(c\) Upon determining that no offer from a foreign firm has a
reasonable chance of being selected for award, the requirements of this
clause will not apply.

\[58 FR 8909, February 18, 1993 as corrected\]

**952.226-70 Subcontracting goals under section 3021(a) of the Energy
Policy Act of 1992.**

As prescribed in 926.7007(a), insert the following provision:

SUBCONTRACTING GOALS UNDER SECTION 3021(A) OF THE ENERGY POLICY ACT OF
1992 (PUB. L. 102-486) (JUN 1996)

\(a\) Definition. Energy Policy Act target groups, as used in this
provision means:

\(1\) An institution of higher education that meets the criteria of 34
CFR 600.4(a) and has a student enrollment that consists of at least 20
percent:

\(i\) Hispanic Americans, i.e., students whose origins are in Mexico,
Puerto Rico, Cuba, or Central or South America, or any combination
thereof, or

\(ii\) Native Americans, i.e., American Indians, Eskimos, Aleuts, and
Native Hawaiians, or any combination thereof;

\(2\) Institutions of higher learning determined by the Secretary of
Education to be Historically Black Colleges and Universities pursuant to
34 CFR 608.2; and

\(3\) Small business concerns, as defined under section 3 of the Small
Business Act (15 U.S.C. 632), that are owned and controlled by
individuals who are both socially and economically disadvantaged within
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d))
or by a woman or women.

\(b\) Section 3021 of the Energy Policy Act (Pub. L. 102-486)
establishes a goal of award of 10 percent of the contract dollar value
for prime and subcontract Energy Policy Act awards to Energy Policy Act
target groups.

\(c\) The offeror, if other than one of the three groups specified in
paragraph (a) of this clause, shall submit, as part of its business
management proposal or, if this solicitation requires the submission of
a Small, Small Disadvantaged and Women-Owned Subcontracting Plan, then
as part of that plan, unless otherwise stated in the proposal
preparation instructions, individual subcontracting goals for each of
the three Energy Policy Act target groups. Individual goals shall be
expressed in terms of a percentage of the offeror\'s proposed contract
dollar value. In addition, the offeror shall provide a description of
the nature of the effort to be performed by each of the three groups,
and, if possible, the identity of the contemplated subcontractor(s).

\(d\) Unless otherwise stated, such goals shall be considered in the
evaluation of the Business Management Proposal as discussed in Section M
of this solicitation or, if applicable, as part of the evaluation of the
Small, Small Disadvantaged and Women-Owned Subcontracting Plan.

(End of provision) \[60 FR 22301, May 5, 1995; 61 FR 21975, May 13,
1996\]

**952.226-71 Utilization of Energy Policy Act target entities.**

As prescribed in 926.7007(b), insert the following clause:

UTILIZATION OF ENERGY POLICY ACT TARGET ENTITIES (JUN 1996)

\(a\) Definition. Energy Policy Act target groups, as used in this
provision means:

\(1\) An institution of higher education that meets the requirements of
34 CFR 600.4(a) and has a student enrollment that consists of at least
20 percent:

\(i\) Hispanic Americans, i.e., students whose origins are in Mexico,
Puerto Rico, Cuba, or Central or South America, or any combination
thereof, or

\(ii\) Native Americans, i.e., American Indians, Eskimos, Aleuts, and
Native Hawaiians, or any combination thereof;

\(2\) Institutions of higher learning determined to be Historically
Black Colleges and Universities by the Secretary of Education pursuant
to 34 CFR 608.2; and

\(3\) Small business concerns, as defined under section 3 of the Small
Business Act (15 U.S.C. 632), that are owned and controlled by
individuals who are both socially and economically disadvantaged within
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d))
or by a woman or women.

\(b\) Obligation. In addition to its obligations under the clause of
this contract entitled Utilization of Small, Small Disadvantaged and
Women-Owned Small Business Concerns, the contractor, in performance of
this contract, agrees to provide its best efforts to competitively award
subcontracts to entities from among the Energy Policy Act target groups.

(End of clause)

\[60 FR 22302, May 5, 1995; 61 FR 21975, May 13, 1996\]

**952.226-72 Energy Policy Act subcontracting goals and reporting
requirements.**

As prescribed in 926.7007(c), insert the following clause:

ENERGY POLICY ACT SUBCONTRACTING GOALS AND REPORTING REQUIREMENTS (JUN
1996)

\(a\) Definition. Energy Policy Act target groups, as used in this
provision means:

\(1\) An institution of higher education that meets the requirements of
34 CFR 600.4(a), and has a student enrollment that consists of at least
20 percent:

\(i\) Hispanic Americans, i.e., students whose origins are in Mexico,
Puerto Rico, Cuba, or Central or South America, or any combination
thereof, or

\(ii\) Native Americans, i.e., American Indians, Eskimos, Aleuts, and
Native Hawaiians, or any combination thereof;

\(2\) Institutions of higher learning determined to be Historically
Black Colleges and Universities by the Secretary of education pursuant
to 34 CFR 608.2; and

\(3\) Small business concerns, as defined under section 3 of the Small
Business Act (15 U.S.C. 632), that are owned and controlled by
individuals who are both socially and economically disadvantaged within
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d))
or by a woman or women.

\(b\) Goals. The contractor, in performance of this contract, agrees to
provide its best efforts to award subcontracts to the following classes
of entities:

\(1\) Small business concerns controlled by socially and economically
disadvantaged individuals or by women: \* \* \* percent;

\(2\) Historically Black colleges and universities: \* \* \* percent;

\(3\) Colleges or universities having a student body in which more than
20 percent of the students are Hispanic Americans or Native Americans:
\* \* \* percent.

\[\* \* \* These goals are stated in a percentage reflecting the
relationship of estimated award value of subcontracts to the value of
this contract and appear elsewhere in this contract.\]

\(c\) Reporting requirements. (1) The contractor agrees to report, on an
annual Federal Government fiscal year basis, its progress against the
goals by providing the actual annual dollar value of subcontract
payments for the preceding 12-month period, and the relationship of
those payments to the incurred contract costs for the same period.
Reports submitted pursuant to this clause must be received by the
contracting officer (or designee) not later than 45 days after the end
of the reporting period.

\(2\) If the contract includes reporting requirements under FAR
52.219-9, Small, Small Disadvantaged and Women-Owned Subcontracting
Plan, the contractor\'s progress against the goals stated in paragraph
(b) of this clause shall be included as an addendum to Standard Form
(SF) 294, Subcontracting Report for Individual Contracts, and/or SF 295,
Summary Subcontract Report, as applicable, for the period that
corresponds to the end of the Federal Government fiscal year. (End of
clause) \[60 FR 22302, May 5, 1995; 61 FR 21975, May 13, 1996\]

**952.226-73 Energy Policy Act target group representation.**

As prescribed in 926.7007(d), insert the following provision:

ENERGY POLICY ACT TARGET GROUP REPRESENTATION (SEP 1997)

\(a\) The offeror is:

\(1\) \_\_\_\_An institution of higher education that meets the
requirements of 34 CFR 600.4(a), and has a student enrollment that
consists of at least 20 percent:

\(i\) Hispanic Americans, i.e., students whose origins are in Mexico,
Puerto Rico, Cuba, or Central or South America, or any combination
thereof, or

\(ii\) Native Americans, i.e., American Indians, Eskimos, Aleuts, and
Native Hawaiians, or any combination thereof;

\(2\) \_\_\_\_An institution of higher learning determined to be a
Historically Black College and University by the Secretary of Education
pursuant to 34 CFR 608.2; or

\(3\) \_\_\_\_A small business concern, as defined under section 3 of
the Small Business Act (15 U.S.C. 632), that is owned and controlled by
individuals who are both socially and economically disadvantaged within
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 637(d))
or by a woman or women.

\(b\) By submission of an offer, the offeror agrees to provide to the
Contracting Officer, upon request, evidence satisfactory to the
contracting officer that the offeror is an entity from the Energy Policy
Act target group identified. (End of provision) \[60 FR 22302, May 5,
1995; 62 FR 42072, Aug. 5, 1997\]

**952.226-74 Displaced employee hiring preference.**

As prescribed in 48 CFR (DEAR) 926.7104, insert the following clause.

DISPLACED EMPLOYEE HIRING PREFERENCE (JUNE 1997)

\(a\) Definition.

Eligible employee means a current or former employee of a contractor or
subcontractor employed at a Department of Energy Defense Nuclear
Facility (1) whose position of employment has been, or will be,
involuntarily terminated (except if terminated for cause), (2) who has
also met the eligibility criteria contained in the Department of Energy
guidance for contractor work force restructuring, as may be amended or
supplemented from time to time, and (3) who is qualified for a
particular job vacancy with the Department or one of its contractors
with respect to work under its contract with the Department at the time
the particular position is available.

\(b\) Consistent with Department of Energy guidance for contractor work
force restructuring, as may be amended or supplemented from time to
time, the contractor agrees that it will provide a preference in hiring
to an eligible employee to the extent practicable for work performed
under this contract.

\(c\) The requirements of this clause shall be included in subcontracts
at any tier (except for subcontracts for commercial items pursuant to 41
U.S.C. 403) expected to exceed \$500,000.

\[62 FR 34842, Jun. 27, 1997\]

**952.227 Provisions and clauses related to patents, technical data and
copyrights.**

**952.227-9 Refund of royalties.**

As prescribed in 927.206-2, insert the following clause:

REFUND OF ROYALTIES (FEB 1995)

\(a\) The contract price includes certain amounts for royalties payable
by the Contractor or subcontractors or both, which amounts have been
reported to the Contracting Officer.

\(b\) The term \"royalties\" as used in this clause refers to any costs
or charges in the nature of royalties, license fees, patent or license
amortization costs, or the like, for the use of or for rights in patents
and patent applications in connection with performing this contract or
any subcontract here-under. The term also includes any costs or charges
associated with the access to, use of, or other right pertaining to data
that is represented to be proprietary and is related to the performance
of this contract or the copying of such data or data that is
copyrighted.

\(c\) The Contractor shall furnish to the Contracting Officer, before
final payment under this contract, a statement of royalties paid or
required to be paid in connection with performing this contract and
subcontracts hereunder together with the reasons.

\(d\) The Contractor will be compensated for royalties reported under
paragraph (c) of this clause, only to the extent that such royalties
were included in the contract price and are determined by the
Contracting Officer to be properly chargeable to the Government and
allocable to the contract. To the extent that any royalties that are
included in the contract price are not, in fact, paid by the Contractor
or are determined by the Contracting Officer not to be properly
chargeable to the government and allocable to the contract, the contract
price shall be reduced. Repayment or credit to the Government shall be
made as the Contracting Officer directs. The approval by DOE of any
individual payments or royalties shall not prevent the Government from
contesting at any time the enforceability, validity, scope of, or title
to, any patent or the proprietary nature of data pursuant to which a
royalty or other payment is to be or has been made.

\(e\) If, at any time within 3 years after final payment under this
contract, the Contractor for any reason is relieved in whole or in part
from the payment of the royalties included in the final contract price
as adjusted pursuant to paragraph (d) of this clause, the Contractor
shall promptly notify the Contracting Officer of that fact and shall
reimburse the Government in a corresponding amount.

\(f\) The substance of this clause, including this paragraph (f), shall
be included in any subcontract in which the amount of royalties reported
during negotiation of the subcontract exceeds \$250.

(End of clause) \[60 FR 11812, Mar. 2, 1995\]

**952.227-11 Patent rights-retention by the contractor (short form).**

As prescribed in 927.303(a), insert the following clause:

PATENT RIGHTS-RETENTION BY THE CONTRACTOR (SHORT FORM) (FEB 1995)

\(a\) Definitions.

\(1\) \"Invention\" means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).

\(2\) \"Made\" when used in relation to any invention means the
conception of first actual reduction to practice of such invention.

\(3\) \"Nonprofit organization\" means a university or other institution
of higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of l954 (26 U.S.C. 501(c)) and
exempt from taxation under section 501(a) of the Internal Revenue Code
(26 U.S.C. 501(a)) or any nonprofit scientific or educational
organization qualified under a state nonprofit organization statute.

\(4\) \"Practical application\" means to manufacture, in the case of a
composition or product; to practice, in the case of a process or method;
or to operate, in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that is benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(5\) \"Small business firm\" means a small business concern as defined
at section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing
regulations of the Administrator of the Small Business Administration.
For the purpose of this clause, the size standards for small business
concerns involved in Government procurement and subcontracting at 13 CFR
121.3-8 and 13 CFR 121.3-12, respectively, will be used.

\(6\) \"Subject invention\" means any invention of the contractor
conceived or first actually reduced to practice in the performance of
work under this contract, provided that in the case of a variety of
plant, the date of determination (as defined in section 41(d) of the
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during
the period of contract performance.

\(7\) \"Agency licensing regulations\" and \"agency regulations
concerning the licensing of Government-owned inventions\" mean the
Department of Energy patent licensing regulations at 10 CFR Part 781.

\(b\) Allocation of principal rights. The Contractor may retain the
entire right, title, and interest throughout the world to each subject
invention subject to the provisions of this clause and 35 U.S.C. 203.
With respect to any subject invention in which the Contractor retains
title, the Federal Government shall have a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States the subject invention
throughout the world.

\(c\) Invention disclosure, election of title, and filing of patent
application by Contractor. (1) The Contractor will disclose each subject
invention to the Department of Energy (DOE) within 2 months after the
inventor discloses it in writing to Contractor personnel responsible for
patent matters. The disclosure to DOE shall be in the form of a written
report and shall identify the contract under which the invention was
made and the inventor(s). It shall be sufficiently complete in technical
detail to convey a clear understanding to the extent known at the time
of the disclosure, of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale or public use of
the invention and whether a manuscript describing the invention has been
submitted for publication and, if so, whether it has been accepted for
publication at the time of disclosure. In addition, after disclosure to
the DOE, the Contractor will promptly notify that agency of the
acceptance of any manuscript describing the invention for publication or
of any on sale or public use planned by the Contractor. (2) The
Contractor will elect in writing whether or not to retain title to any
such invention by notifying DOE within 2 years of disclosure to DOE.
However, in any case where publication, on sale or public use has
initiated the l-year statutory period wherein valid patent protection
can still be obtained in the United States, the period for election of
title may be shortened by DOE to a date that is no more than 60 days
prior to the end of the statutory period. (3) The Contractor will file
its initial patent application on a subject invention to which it elects
to retain title within 1 year after election of title or, if earlier,
prior to the end of any statutory period wherein valid patent protection
can be obtained in the United States after a publication, on sale, or
public use. The Contractor will file patent applications in additional
countries or international patent offices within either 10 months of the
corresponding initial patent application or 6 months from the date
permission is granted by the Commissioner of Patents and Trademarks to
file foreign patent applications where such filing has been prohibited
by a Secrecy Order.

\(4\) Requests for extension of the time for disclosure, election, and
filing under subparagraphs (c)(l), (2), and (3) of this clause may, at
the discretion of the agency, be granted.

\(d\) Conditions when the Government may obtain title. The Contractor
will convey to the Federal agency, upon written request, title to any
subject invention

\(1\) If the Contractor fails to disclose or elect title to the subject
invention within the times specified in paragraph (c) of this clause, or
elects not to retain title; provided, that DOE may only request title
within 60 days after learning of the failure of the Contractor to
disclose or elect within the specified times. (2) In those countries in
which the Contractor fails to file patent applications within the times
specified in paragraph (c) of this clause; provided, however, that if
the Contractor has filed a patent application in a country after the
times specified in paragraph (c) of this clause, but prior to its
receipt of the written request of the Federal agency, the Contractor
shall continue to retain title in that country. (3) In any country in
which the Contractor decides not to continue the prosecution of any
application for, to pay the maintenance fees on, or defend in
reexamination or opposition proceeding on, a patent on a subject
invention.

\(e\) Minimum rights to Contractor and protection of the Contractor
right to file. (1) The Contractor will retain a nonexclusive
royalty-free license throughout the world in each subject invention to
which the Government obtains title, except if the Contractor fails to
disclose the invention within the times specified in paragraph (c) of
this clause. The Contractor\'s license extends to its domestic
subsidiary and affiliates, if any, within the corporate structure of
which the Contractor is a party and includes the right to grant
sublicenses of the same scope to the extent the Contractor was legally
obligated to do so at the time the contract was awarded. The license is
transferable only with the approval of the Federal agency, except when
transferred to the successor of that part of the Contractor\'s business
to which the invention pertains.

\(2\) The Contractor\'s domestic license may be revoked or modified by
DOE to the extent necessary to achieve expeditious practical application
of subject invention pursuant to an application for an exclusive license
submitted in accordance with applicable provisions at 37 CFR Part 404
and agency licensing regulations. This license will not be revoked in
that field of use or the geographical areas in which the Contractor has
achieved practical application and continues to make the benefits of the
invention reasonably accessible to the public. The license in any
foreign country may be revoked or modified at the discretion of DOE to
the extent the Contractor, its licensees, or the domestic subsidiaries
or affiliates have failed to achieve practical application in that
foreign country. (3) Before revocation or modification of the license,
DOE will furnish the Contractor a written notice of its intention to
revoke or modify the license, and the Contractor will be allowed 30 days
(or such other time as may be authorized by DOE for good cause shown by
the Contractor) after the notice to show cause why the license should
not be revoked or modified. The Contractor has the right to appeal, in
accordance with applicable regulations in 37 CFR Part 404 and agency
regulations concerning the licensing of Government owned inventions, any
decision concerning the revocation or modification of the license.

\(f\) Contractor action to protect the Government\'s interest. (1) The
Contractor agrees to execute or to have executed and promptly deliver to
DOE all instruments necessary to (i) establish or confirm the rights the
Government has throughout the world in those subject inventions to which
the Contractor elects to retain title, and (ii) convey title to DOE when
requested under paragraph (d) of this clause and to enable the
government to obtain patent protection throughout the world in that
subject invention. (2) The Contractor agrees to require, by written
agreement, its employees, other than clerical and nontechnical
employees, to disclose promptly in writing to personnel identified as
responsible for the administration of patent matters and in a format
suggested by the Contractor each subject invention made under contract
in order that the Contractor can comply with the disclosure provisions
of paragraph (c) of this clause, and to execute all papers necessary to
file patent applications on subject inventions and to establish the
Government\'s rights in the subject inventions. This disclosure format
should require, as a minimum, the information required by subparagraph
(c)(1) of this clause. The Contractor shall instruct such employees,
through employee agreements or other suitable educational programs, on
the importance of reporting inventions in sufficient time to permit the
filing of patent applications prior to U.S. or foreign statutory bars.
(3) The Contractor will notify DOE of any decision not to continue the
prosecution of a patent application, pay maintenance fees, or defend in
a reexamination or opposition proceeding on a patent, in any country,
not less than 30 days before the expiration of the response period
required by the relevant patent office. (4) The Contractor agrees to
include, within the specification of any United States patent
application and any patent issuing thereon covering a subject invention,
the following statement, \"This invention was made with Government
support under (identify the contract) awarded by the United States
Department of Energy. The Government has certain rights in the
invention.\"

\(g\) Subcontracts. (1) The Contractor will include this clause,
suitably modified to identify the parties, in all subcontracts,
regardless of tier, for experimental, developmental, or research work to
be performed by a small business firm or domestic nonprofit
organization. The subcontractor will retain all rights provided for the
Contractor in this clause, and the Contractor will not, as part of the
consideration for awarding the subcontract, obtain rights in the
subcontractor\'s subject inventions. (2) The contractor shall include in
all other subcontracts, regardless of tier, for experimental,
developmental, demonstration, or research work the patent rights clause
at 952.227-13. (3) In the case of subcontracts, at any tier, DOE,
subcontractor, and the Contractor agree that the mutual obligations of
the parties created by this clause constitute a contract between the
subcontractor and DOE with respect to the matters covered by the clause;
provided, however, that nothing in this paragraph is intended to confer
any jurisdiction under the Contract Disputes Act in connection with
proceedings under paragraph (j) of this clause.

\(h\) Reporting on utilization of subject inventions. The Contractor
agrees to submit, on request, periodic reports no more frequently than
annually on the utilization of a subject invention or on efforts at
obtaining such utilization that are being made by the Contractor or its
licensees or assignees. Such reports shall include information regarding
the status of development, date of first commercial sale or use, gross
royalties received, by the Contractor, and such other data and
information as DOE may reasonably specify. The Contractor also agrees to
provide additional reports as may be requested by DOE in connection with
any march-in proceeding undertaken by that agency in accordance with
paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE
agrees it will not disclose such information to persons outside the
Government without permission of the Contractor.

\(i\) Preference for United States industry. Notwithstanding any other
provision of this clause, the Contractor agrees that neither it nor any
assignee will grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that
any product embodying the subject invention or produced through the use
of the subject invention will be manufactured substantially in the
United States. However, in individual cases, the requirement for such an
agreement may be waived by DOE upon a showing by the Contractor or its
assignee that reasonable but unsuccessful efforts have been made to
grant licenses on similar terms to potential licensees that would be
likely to manufacture substantially in the United States or that under
the circumstances domestic manufacture is not commercially feasible.

\(j\) March-in rights. The Contractor agrees that, with respect to any
subject invention in which it has acquired title, DOE has the right in
accordance with the procedures in 37 CFR 401.6 and any supplemental
regulations of the agency to require the Contractor, an assignee or
exclusive licensee of a subject invention to grant a nonexclusive,
partially exclusive, or exclusive license in any field of use to a
responsible applicant or applicants, upon terms that are reasonable
under the circumstances, and, if the Contractor, assignee, or exclusive
licensee refuses such a request, DOE has the right to grant such a
license itself if DOE determines that (1) Such action is necessary
because the Contractor or assignee has not taken, or is not expected to
take within a reasonable time, effective steps to achieve practical
application of the subject invention in such field of use; (2) Such
action is necessary to alleviate health or safety needs which are not
reasonably satisfied by the Contractor, assignee, or their licensees;
(3) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees; or

\(4\) Such action is necessary because the agreement required by
paragraph (i) of this clause has not been obtained or waived or because
a licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.

\(k\) Special provisions for contracts with nonprofit organizations. If
the Contractor is a nonprofit organization, it agrees that (1) Rights to
a subject invention in the United States may not be assigned without the
approval of the Federal agency, except where such assignment is made to
an organization which has as one of its primary functions the management
of inventions; provided, that such assignee will be subject to the same
provisions as the Contractor; (2) The Contractor will share royalties
collected on a subject invention with the inventor, including Federal
employee co-inventors (when DOE deems it appropriate) when the subject
invention is assigned in accordance with 35 U.S.C. 202(e) and 37 CFR
401.10; (3) The balance of any royalties or income earned by the
Contractor with respect to subject inventions, after payment of expenses
(including payments to inventors) incidental to the administration of
subject inventions will be utilized for the support of scientific
research or education; and (4) It will make efforts that are reasonable
under the circumstances to attract licensees of subject inventions that
are small business firms, and that it will give a preference to a small
business firm when licensing a subject invention if the Contractor
determines that the small business firm has a plan or proposal for
marketing the invention which, if executed, is equally as likely to
bring the invention to practical application as any plans or proposals
from applicants that are not small business firms; provided, that the
Contractor is also satisfied that the small business firm has the
capability and resources to carry out its plan or proposal. The decision
whether to give a preference in any specific case will be at the
discretion of the contractor. However, the Contractor agrees that the
Secretary of Commerce may review the Contractor\'s licensing program and
decisions regarding small business applicants, and the Contractor will
negotiate changes to its licensing policies, procedures, or practices
with the Secretary of Commerce when that Secretary\'s review discloses
that the Contractor could take reasonable steps to more effectively
implement the requirements of this subparagraph (k)(4).

\(l\) Communications.

\(1\) The contractor shall direct any notification, disclosure, or
request to DOE provided for in this clause to the DOE patent counsel
assisting the DOE contracting activity, with a copy of the communication
to the Contracting Officer. (2) Each exercise of discretion or decision
provided for in this clause, except subparagraph (k)(4), is reserved for
the DOE Patent Counsel and is not a claim or dispute and is not subject
to the Contract Disputes Act of 1978. (3) Upon request of the DOE Patent
Counsel or the contracting officer, the contractor shall provide any or
all of the following:

\(i\) a copy of the patent application, filing date, serial number and
title, patent number, and issue date for any subject invention in any
country in which the contractor has applied for a patent;

\(ii\) a report, not more often than annually, summarizing all subject
inventions which were disclosed to DOE individually during the reporting
period specified; or

\(iii\) a report, prior to closeout of the contract, listing all subject
inventions or stating that there were none. (End of clause)

**952.227-13 Patent rights-acquisition by the Government.**

As prescribed at 927.303(a)(1), insert the following clause:

PATENT RIGHTS-ACQUISITION BY THE GOVERNMENT (SEP 1997)

\(a\) Definitions.

\"Invention\", as used in this clause, means any invention or discovery
which is or may be patentable or otherwise protectable under title 35 of
the United States Code or any novel variety of plant that is or may be
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et
seq.).

\"Practical application\", as used in this clause, means to manufacture,
in the case of a composition or product; to practice, in the case of a
process or method; or to operate, in the case of a machine or system;
and, in each case, under such conditions as to establish that the
invention is being utilized and that its benefits are, to the extent
permitted by law or Government regulations, available to the public on
reasonable terms.

\"Subject invention\", as used in this clause, means any invention of
the Contractor conceived or first actually reduced to practice in the
course of or under this contract.

\"Patent Counsel\", as used in this clause, means the Department of
Energy Patent Counsel assisting the procuring activity.

\"DOE patent waiver regulations\", as used in this clause, means the
Department of Energy patent waiver regulations at 41 CFR 9-9.109- 6 or
successor regulations. See 10 CFR part 784.

\"Agency licensing regulations\" and \"applicable agency licensing
regulations\", as used in this clause, mean the Department of Energy
patent licensing regulations at 10 CFR Part 781.

\(b\) Allocations of principal rights.

\(1\) Assignment to the Government. The Contractor agrees to assign to
the Government the entire right, title, and interest throughout the
world in and to each subject invention, except to the extent that rights
are retained by the Contractor under subparagraph (b)(2) and paragraph
(d) of this clause. (2) Greater rights determinations. (i) The
contractor, or an employee-inventor after consultation with the
Contractor, may request greater rights than the nonexclusive license and
the foreign patent rights provided in paragraph (d) of this clause on
identified inventions in accordance with the DOE patent waiver
regulations. A request for a determination of whether the Contractor or
the employee-inventor is entitled to acquire such greater rights must be
submitted to the Patent Counsel with a copy to the Contracting Officer
at the time of the first disclosure of the invention pursuant to
subparagraph (e)(2) of this clause, or not later than 8 months
thereafter, unless a longer period is authorized in writing by the
Contracting Officer for good cause shown in writing by the Contractor.
Each determination of greater rights under this contract shall be
subject to paragraph (c) of this clause, unless otherwise provided in
the greater rights determination, and to the reservations and conditions
deemed to be appropriate by the Secretary of Energy or designee.

\(ii\) Within two (2) months after the filing of a patent application,
the Contractor shall provide the filing date, serial number and title, a
copy of the patent application (including an English-language version if
filed in a language other than English), and, promptly upon issuance of
a patent, provide the patent number and issue date for any subject
invention in any country for which the Contractor has been granted title
or the right to file and prosecute on behalf of the United States by the
Department of Energy.

\(iii\) Not less than thirty (30) days before the expiration of the
response period for any action required by the Patent and Trademark
Office, notify the Patent Counsel of any decision not to continue
prosecution of the application.

\(iv\) Upon request, the Contractor shall furnish the Government an
irrevocable power to inspect and make copies of the patent application
file.

\(c\) Minimum rights acquired by the Government. (1) With respect to
each subject invention to which the Department of Energy grants the
Contractor principal or exclusive rights, the Contractor agrees as
follows:

\(i\) The Contractor hereby grants to the Government a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have
practiced each subject invention throughout the world by or on behalf of
the Government of the United States (including any Government agency).

\(ii\) The Contractor agrees that with respect to any subject invention
in which DOE has granted it title, DOE has the right in accordance with
the procedures in the DOE patent waiver regulations (10 CFR part 784) to
require the Contractor, an assignee, or exclusive licensee of a subject
invention to grant a nonexclusive, partially exclusive, or exclusive
license in any field of use to a responsible applicant or applicants,
upon terms that are reasonable under the circumstances, and if the
Contractor, assignee, or exclusive licensee refuses such a request, DOE
has the right to grant such a license itself if it determines that (A)
Such action is necessary because the Contractor or assignee has not
taken, or is not expected to take within a reasonable time, effective
steps to achieve practical application of the subject invention in such
field of use; (B) Such action is necessary to alleviate health or safety
needs which are not reasonably satisfied by the Contractor, assignee, or
their licensees; (C) Such action is necessary to meet requirements for
public use specified by Federal regulations and such requirements are
not reasonably satisfied by the Contractor, assignee, or licensees; or
(D) Such action is necessary because the agreement required by paragraph
(i) of this clause has neither been obtained nor waived or because a
licensee of the exclusive right to use or sell any subject invention in
the United States is in breach of such agreement.

\(iii\) The Contractor agrees to submit on request periodic reports no
more frequently than annually on the utilization of a subject invention
or on efforts at obtaining such utilization of a subject invention or on
efforts at obtaining such utilization that are being made by the
Contractor or its licensees or assignees. Such reports shall include
information regarding the status of development, date of first
commercial sale or use, gross royalties received by the Contractor, and
such other data and information as DOE may reasonably specify. The
Contractor also agrees to provide additional reports as may be requested
by DOE in connection with any march-in proceedings undertaken by that
agency in accordance with subparagraph (c)(1)(ii) of this clause. To the
extent data or information supplied under this section is considered by
the Contractor, its licensee, or assignee to be privileged and
confidential and is so marked, the Department of Energy agrees that, to
the extent permitted by law, it will not disclose such information to
persons outside the Government.

\(iv\) The Contractor agrees, when licensing a subject invention, to
arrange to avoid royalty charges on acquisitions involving Government
funds, including funds derived through a Military Assistance Program of
the Government or otherwise derived through the Government, to refund
any amounts received as royalty charges on a subject invention in
acquisitions for, or on behalf of, the Government, and to provide for
such refund in any instrument transferring rights in the invention to
any party.

\(v\) The Contractor agrees to provide for the Government\'s paid-up
license pursuant to subparagraph (c)(1)(i) of this clause in any
instrument transferring rights in a subject invention and to provide for
the granting of licenses as required by subparagraph (c)(1)(ii) of this
clause, and for the reporting of utilization information as required by
subparagraph (c)(1)(iii) of this clause, whenever the instrument
transfers principal or exclusive rights in a subject invention. (2)
Nothing contained in this paragraph (c) shall be deemed to grant to the
Government any rights with respect to any invention other than a subject
invention.

\(d\) Minimum rights to the Contractor. (1) The Contractor is hereby
granted a revocable, nonexclusive, royalty-free license in each patent
application filed in any country on a subject invention and any
resulting patent in which the Government obtains title, unless the
Contractor fails to disclose the subject invention within the times
specified in subparagraph (e)(2) of this clause. The Contractor\'s
license extends to its domestic subsidiaries and affiliates, if any,
within the corporate structure of which the Contractor is a part and
includes the right to grant sublicenses of the same scope to the extent
the Contractor was legally obligated to do so at the time the contract
was awarded. The license is transferable only with the approval of DOE
except when transferred to the successor of that part of the
Contractor\'s business to which the invention pertains. (2) The
Contractor\'s domestic license may be revoked or modified by DOE to the
extent necessary to achieve expeditious practical application of the
subject invention pursuant to an application for an exclusive license
submitted in accordance with applicable provisions in 37 CFR Part 404
and agency licensing regulations. This license will not be revoked in
that field of use or the geographical areas in which the Contractor has
achieved practical applications and continues to make the benefits of
the invention reasonably accessible to the public. The license in any
foreign country may be revoked or modified at the discretion of DOE to
the extent the Contractor, its licensees, or its domestic subsidiaries
or affiliates have failed to achieve practical application in that
foreign country. (3) Before revocation or modification of the license,
DOE will furnish the Contractor a written notice of its intention to
revoke or modify the license, and the Contractor will be allowed 30 days
(or such other time as may be authorized by DOE for good cause shown by
the Contractor) after the notice to show cause why the license should
not be revoked or modified. The Contractor has the right to appeal, in
accordance with applicable agency licensing regulations and 37 CFR Part
404 concerning the licensing of Government-owned inventions, any
decision concerning the revocation or modification of its license. (4)
The Contractor may request the right to acquire patent rights to a
subject invention in any foreign country where the Government has
elected not to secure such rights, subject to the conditions in
subparagraphs (d)(4)(i) through (d)(4)(vii) of this clause. Such request
must be made in writing to the Patent Counsel as part of the disclosure
required by subparagraph (e)(2) of this clause, with a copy to the DOE
Contracting Officer. DOE approval, if given, will be based on a
determination that this would best serve the national interest.

\(i\) The recipient of such rights, when specifically requested by DOE,
and three years after issuance of a foreign patent disclosing the
subject invention, shall furnish DOE a report stating:

\(A\) The commercial use that is being made, or is intended to be made,
of said invention, and

\(B\) The steps taken to bring the invention to the point of practical
application or to make the invention available for licensing.

\(ii\) The Government shall retain at least an irrevocable,
nonexclusive, paid-up license to make, use, and sell the invention
throughout the world by or on behalf of the Government (including any
Government agency) and States and domestic municipal governments, unless
the Secretary of Energy or designee determines that it would not be in
the public interest to acquire the license for the States and domestic
municipal governments.

\(iii\) If noted elsewhere in this contract as a condition of the grant
of an advance waiver of the Government\'s title to inventions under this
contract, or, if no advance waiver was granted but a waiver of the
Government\'s title to an identified invention is granted pursuant to
subparagraph (b)(2) of this clause upon a determination by the Secretary
of Energy that it is in the Government\'s best interest, this license
shall include the right of the Government to sublicense foreign
governments pursuant to any existing or future treaty or agreement with
such foreign governments.

\(iv\) Subject to the rights granted in subparagraphs (d)(1), (2), and
(3) of this clause, the Secretary of Energy or designee shall have the
right to terminate the foreign patent rights granted in this
subparagraph (d)(4) in whole or in part unless the recipient of such
rights demonstrates to the satisfaction of the Secretary of Energy or
designee that effective steps necessary to accomplish substantial
utilization of the invention have been taken or within a reasonable time
will be taken.

\(v\) Subject to the rights granted in subparagraphs (d)(1), (2), and
(3) of this clause, the Secretary of Energy or designee shall have the
right, commencing four years after foreign patent rights are accorded
under this subparagraph (d)(4), to require the granting of a
nonexclusive or partially exclusive license to a responsible applicant
or applicants, upon terms reasonable under the circumstances, and in
appropriate circumstances to terminate said foreign patent rights in
whole or in part, following a hearing upon notice thereof to the public,
upon a petition by an interested person justifying such hearing:

\(A\) If the Secretary of Energy or designee determines, upon review of
such material as he deems relevant, and after the recipient of such
rights or other interested person has had the opportunity to provide
such relevant and material information as the Secretary or designee may
require, that such foreign patent rights have tended substantially to
lessen competition or to result in undue market concentration in any
section of the United States in any line of commerce to which the
technology relates; or

\(B\) Unless the recipient of such rights demonstrates to the
satisfaction of the Secretary of Energy or designee at such hearing that
the recipient has taken effective steps, or within a reasonable time
thereafter is expected to take such steps, necessary to accomplish
substantial utilization of the invention.

\(vi\) If the contractor is to file a foreign patent application on a
subject invention, the Government agrees, upon written request, to use
its best efforts to withhold publication of such invention disclosures
for such period of time as specified by Patent Counsel, but in no event
shall the Government or its employees be liable for any publication
thereof.

\(vii\) Subject to the license specified in subparagraphs (d)(1), (2),
and (3) of this clause, the contractor or inventor agrees to convey to
the Government, upon request, the entire right, title, and interest in
any foreign country in which the contractor or inventor fails to have a
patent application filed in a timely manner or decides not to continue
prosecution or to pay any maintenance fees covering the invention. To
avoid forfeiture of the patent application or patent, the contractor or
inventor shall, not less than 60 days before the expiration period for
any action required by any patent office, notify the Patent Counsel of
such failure or decision, and deliver to the Patent Counsel, the
executed instruments necessary for the conveyance specified in this
paragraph.

\(e\) Invention identification, disclosures, and reports. (1) The
Contractor shall establish and maintain active and effective procedures
to assure that subject inventions are promptly identified and disclosed
o Contractor personnel responsible for patent matters within 6 months of
conception and/or first actual reduction to practice, whichever occurs
first in the performance of work under this contract. These procedures
shall include the maintenance of laboratory notebooks or equivalent
records and other records as are reasonably necessary to document the
conception and/or the first actual reduction to practice of subject
inventions, and records that show that the procedures for identifying
and disclosing the inventions are followed. Upon request, the Contractor
shall furnish the Contracting Officer a description of such procedures
for evaluation and for determination as to their effectiveness.

\(2\) The Contractor shall disclose each subject invention to the DOE
Patent Counsel with a copy to the Contracting Officer within 2 months
after the inventor discloses it in writing to Contractor personnel
responsible for patent matters or, if earlier, within 6 months after the
Contractor becomes aware that a subject invention has been made, but in
any event before any on sale, public use, or publication of such
invention known to the Contractor. The disclosure to DOE shall be in the
form of a written report and shall identify the contract under which the
invention was made and the inventor(s). It shall be sufficiently
complete in technical detail to convey a clear understanding, to the
extent known at the time of the disclosure, of the nature, purpose,
operation, and physical, chemical, biological, or electrical
characteristics of the invention. The disclosure shall also identify any
publication, on sale, or public use of the invention and whether a
manuscript describing the invention has been submitted for publication
and, if so, whether it has been accepted for publication at the time of
disclosure. In addition, after disclosure to DOE, the Contractor shall
promptly notify Patent Counsel of the acceptance of any manuscript
describing the invention for publication or of any on sale or public use
planned by the Contractor. The report should also include any request
for a greater rights determination in accordance with subparagraph
(b)(2) of this clause. When an invention is disclosed to DOE under this
paragraph, it shall be deemed to have been made in the manner specified
in Sections (a)(1) and (a)(2) of 42 U.S.C. 5908, unless the Contractor
contends in writing at the time the invention is disclosed that is was
not so made.

\(3\) The Contractor shall furnish the Contracting Officer the
following:

\(i\) Interim reports every 12 months (or such longer period as may be
specified by the Contracting Officer) from the date of the contract,
listing all subject inventions during that period, and including a
statement that all subject inventions have been disclosed (or that there
are not such inventions), and that such disclosure has been made in
accordance with the procedures required by paragraph (e)(1) of this
clause.

\(ii\) A final report, within 3 months after completion of the
contracted work listing all subject inventions or containing a statement
that there were no such inventions, and listing all subcontracts at any
tier containing a patent rights clause or containing a statement that
there were no such subcontracts.

\(4\) The Contractor agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose
promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
Contractor each subject invention made under contract in order that the
Contractor can comply with the disclosure provisions of paragraph (c) of
this clause, and to execute all papers necessary to file patent
applications on subject inventions and to establish the Government\'s
rights in the subject inventions. This disclosure format should require,
as a minimum, the information required by subparagraph (e)(2) of this
clause. (5) The Contractor agrees, subject to FAR 27.302(j), that the
Government may duplicate and disclose subject invention disclosures and
all other reports and

papers furnished or required to be furnished pursuant to this clause.

\(f\) Examination of records relating to inventions.

\(1\) The Contracting Officer or any authorized representative shall,
until 3 years after final payment under this contract, have the right to
examine any books (including laboratory notebooks), records, and
documents of the Contractor relating to the conception or first actual
reduction to practice of inventions in the same field of technology as
the work under this contract to determine whether

\(i\) Any such inventions are subject inventions;

\(ii\) The Contractor has established and maintains the procedures
required by subparagraphs (e)(1) and (4) of this clause;

\(iii\) The Contractor and its inventors have complied with the
procedures. (2) If the Contracting Officer learns of an unreported
Contractor invention which the Contracting Officer believes may be a
subject invention, the Contractor may be required to disclose the
invention to DOE for a determination of ownership rights.

\(3\) Any examination of records under this paragraph will be subject to
appropriate conditions to protect the confidentiality of the information
involved.

\(g\) Withholding of payment (NOTE: This paragraph does not apply to
subcontracts). (1) Any time before final payment under this contract,
the Contracting Officer may, in the Government\'s interest, withhold
payment until a reserve not exceeding \$50,000 or 5 percent of the
amount of this contract, whichever is less, shall have been set aside
if, in the Contracting Officer\'s opinion, the Contractor fails to

\(i\) Convey to the Government, using a DOE-approved form, the title
and/or rights of the Government in each subject invention as required by
this clause.

\(ii\) Establish, maintain, and follow effective procedures for
identifying and disclosing subject inventions pursuant to subparagraph
(e)(1) of this clause;

\(iii\) Disclose any subject invention pursuant to subparagraph (e)(2)
of this clause;

\(iv\) Deliver acceptable interim reports pursuant to subparagraph
(e)(3)(i) of this clause; or

\(v\) Provide the information regarding subcontracts pursuant to
subparagraph (h)(4) of this clause. (2) Such reserve or balance shall be
withheld until the Contracting Officer has determined that the
Contractor has rectified whatever deficiencies exist and has delivered
all reports, disclosures, and other information required by this clause.
(3) Final payment under this contract shall not be made before the
Contractor delivers to the Contracting Officer all disclosures of
subject inventions required by subparagraph (e)(2) of this clause, and
acceptable final report pursuant to subparagraph (e)(3)(ii) of this
clause, and the Patent Counsel has issued a patent clearance
certification to the Contracting Officer.

\(4\) The Contracting Officer may decrease or increase the sums withheld
up to the maximum authorized above. No amount shall be withheld under
this paragraph while the amount specified by this paragraph is being
withheld under other provisions of the contract. The withholding of any
amount or the subsequent payment thereof shall not be construed as a
waiver of any Government rights.

\(h\) Subcontracts.

\(1\) The contractor shall include the clause at 48 CFR 952.227-11
(suitably modified to identify the parties) in all subcontracts,
regardless of tier, for experimental, developmental, demonstration, or
research work to be performed by a small business firm or domestic
nonprofit organization, except where the work of the subcontract is
subject to an Exceptional Circumstances Determination by DOE. In all
other subcontracts, regardless of tier, for experimental, developmental,
demonstration, or research work, the contractor shall include this
clause (suitably modified to identify the parties). The contractor shall
not, as part of the consideration for awarding the subcontract, obtain
rights in the subcontractor\'s subject inventions.

\(2\) In the event of a refusal by a prospective subcontractor to accept
such a clause the Contractor

\(i\) Shall promptly submit a written notice to the Contracting Officer
setting forth the subcontractor\'s reasons for such refusal and other
pertinent information that may expedite disposition of the matter; and

\(ii\) Shall not proceed with such subcontract without the written
authorization of the Contracting Officer. (3) In the case of
subcontracts at any tier, DOE, the subcontractor, and Contractor agree
that the mutual obligations of the parties created by this clause
constitute a contract between the subcontractor and DOE with respect to
those matters covered by this clause. (4) The Contractor shall promptly
notify the Contracting Officer in writing upon the award of any
subcontract at any tier containing a patent rights clause by identifying
the subcontractor, the applicable patent rights clause, the work to be
performed under the subcontract, and the dates of award and estimated
completion. Upon request of the Contracting Officer, the Contractor
shall furnish a copy of such subcontract, and, no more frequently than
annually, a listing of the subcontracts that have been awarded. (5) The
contractor shall identify all subject inventions of the subcontractor of
which it acquires knowledge in the performance of this contract and
shall notify the Patent Counsel, with a copy to the contracting officer,
promptly upon identification of the inventions.

\(i\) Preference United States industry. Unless provided otherwise, no
Contractor that receives title to any subject invention and no assignee
of any such Contractor shall grant to any person the exclusive right to
use or sell any subject invention in the United States unless such
person agrees that any products embodying the subject invention will be
manufactured substantially in the United States. However, in individual
cases, the requirement may be waived by the Government upon a showing by
the Contractor or assignee that reasonable but unsuccessful efforts have
been made to grant licenses on similar terms to potential licensees that
would be likely to manufacture substantially in the United States or
that under the circumstances domestic manufacture is not commercially
feasible.

\(j\) Atomic energy.

\(1\) No claim for pecuniary award of compensation under the provisions
of the Atomic Energy Act of 1954, as amended, shall be asserted with
respect to any invention or discovery made or conceived in the course of
or under this contract.

\(2\) Except as otherwise authorized in writing by the Contracting
Officer, the Contractor will obtain patent agreements to effectuate the
provisions of subparagraph (e)(1) of this clause from all persons who
perform any part of the work under this contract, except nontechnical
personnel, such as clerical employees and manual laborers.

\(k\) Background Patents.

\(1\) Background Patent means a domestic patent covering an invention or
discovery which is not a subject invention and which is owned or
controlled by the Contractor at any time through the completion of this
contract:

\(i\) Which the contractor, but not the Government, has the right to
license to others without obligation to pay royalties thereon, and

\(ii\) Infringement of which cannot reasonably be avoided upon the
practice of any specific process, method, machine, manufacture, or
composition of matter (including relatively minor modifications thereof)
which is a subject of the research, development, or demonstration work
performed under this contract. (2) The Contractor agrees to and does
hereby grant to the Government a royalty-free, nonexclusive license
under any background patent for purposes of practicing a subject of this
contract by or for the Government in research, development, and
demonstration work only. (3) The Contractor also agrees that upon
written application by DOE, it will grant to responsible parties, for
purposes of practicing a subject of this contract, nonexclusive licenses
under any background patent on terms that are reasonable under the
circumstances. If, however, the Contractor believes that exclusive
rights are necessary to achieve expeditious commercial development or
utilization, then a request may be made to DOE for DOE approval of such
licensing by the Contractor.

\(4\) Notwithstanding subparagraph (k)(3) of this clause, the contractor
shall not be obligated to license any background patent if

the Contractor demonstrates to the satisfaction of the Secretary of
Energy or designee that:

\(i\) a competitive alternative to the subject matter covered by said
background patent is commercially available or readily introducible from
one or more other sources; or

\(ii\) the Contractor or its licensees are supplying the subject matter
covered by said background patent in sufficient quantity and at
reasonable prices to satisfy market needs, or have taken effective steps
or within a reasonable time are expected to take effective steps to so
supply the subject matter. l) Publication. It is recognized that during
the course of the work under this contract, the Contractor or its
employees may from time to time desire to release or publish information
regarding scientific or technical developments conceived or first
actually reduced to practice in the course of or under this contract. In
order that public disclosure of such information will not adversely
affect the patent interests of DOE or the Contractor, patent approval
for release of publication shall be secured from Patent Counsel prior to
any such release or publication.

m\) Forfeiture of rights in unreported subject inventions.

\(1\) The Contractor shall forfeit and assign to the Government, at the
request of the Secretary of Energy or designee, all rights in any
subject invention which the Contractor fails to report to Patent Counsel
within six months after the time the Contractor:

\(i\) Files or causes to be filed a United States or foreign patent
application thereon; or

\(ii\) Submits the final report required by subparagraph (e)(2)(ii) of
this clause, whichever is later. (2) However, the Contractor shall not
forfeit rights in a subject invention if, within the time specified in
subparagraph (m)(1) of this clause, the Contractor:

\(i\) Prepares a written decision based upon a review of the record that
the invention was neither conceived nor first actually reduced to
practice in the course of or under the contract and delivers the
decision to Patent Counsel, with a copy to the Contracting Officer; or

\(ii\) Contending that the invention is not a subject invention, the
Contractor nevertheless discloses the invention and all facts pertinent
to this contention to the Patent Counsel, with a copy to the Contracting
Officer; or

\(iii\) Establishes that the failure to disclose did not result from the
Contractor\'s fault or negligence. (3) Pending written assignment of the
patent application and patents on a subject invention determined by the
Secretary of Energy or designee to be forfeited (such determination to
be a final decision under the Disputes clause of this contract), the
Contractor shall be deemed to hold the invention and the patent
applications and patents pertaining thereto in trust for the Government.
The forfeiture provision of this paragraph (m) shall be in addition to
and shall not supersede other rights and remedies which the Government
may have with respect to subject inventions. (End of clause) \[60 FR
11812, Mar. 3, 1995; 62 FR 42072, Aug. 5, 1997; 63 FR 10499, Mar. 4,
1998\]

**952.227-14 Rights in data-general. (DOE coverage-alternates VI and
VII)**

Alternate VI (Feb 1998)

As prescribed at 48 CFR 927.404(l) insert Alternate VI to require the
contractor to license data regarded as limited rights data or restricted
computer software to the Government and third parties at reasonable
royalties upon request by the Department of Energy.

\(k\) Contractor Licensing. Except as may be otherwise specified in this
contract as data not subject to this paragraph, the contractor agrees
that upon written application by DOE, it will

grant to the Government and responsible third parties, for purposes of
practicing a subject of this contract, a nonexclusive license in any
limited rights data or restricted computer software on terms and
conditions reasonable under the circumstances including appropriate
provisions for confidentiality; provided, however, the contractor shall
not be obliged to license any such data if the contractor demonstrates
to the satisfaction of the Secretary of Energy or designee that:

\(1\) Such data are not essential to the manufacture or practice of
hardware designed or fabricated, or processes developed, under this
contract;

\(2\) Such data, in the form of results obtained by their use, have a
commercially competitive alternate available or readily introducible
from one or more other sources;

\(3\) Such data, in the form of results obtained by their use, are being
supplied by the contractor or its licensees in sufficient quantity and
at reasonable prices to satisfy market needs, or the

contractor or its licensees have taken effective steps or within a
reasonable time are expected to take effective steps to so supply such
data in the form of results obtained by their use; or

\(4\) Such data, in the form of results obtained by their use, can be
furnished by another firm skilled in the art of manufacturing items or
performing processes of the same general type and character necessary to
achieve the contract results. (End of Alternate)

Alternate VII (Feb 1998)

As prescribed in 48 CFR 927.404(m) make the change described in
Alternate VII to limit the contractor\'s use of DOE restricted data.

Insert the parenthetical phrase \" (except Restricted Data in category
C-24, 10 CFR part 725, in which DOE has reserved the right to receive
reasonable compensation for the use of its inventions and discoveries,
including related data and technology).\" after the phrase \"data first
produced or specifically used by the Contractor in the performance of
this contract\" in paragraph (b)(2)(i) of the clause at FAR 52.227-14.
(End of Alternate)

\[63 FR 10499, Mar. 4, 1998\]

**952.227-82 Rights to proposal data.**

Pursuant to 927.7002(d), include this clause in any contract which the
decision to make the award included consideration of a technical
proposal.

RIGHTS TO PROPOSAL DATA (APR 1994)

Except for technical data contained on pages \_\_\_\_ of the
contractor\'s proposal dated \_\_\_\_\_\_\_\_ which are asserted by the
contractor as being proprietary data, it is agreed that, as a condition
of the award of this contract, and notwithstanding the provisions of any
notice appearing on the proposal, the Government shall have the right to
use, duplicate, disclose and have others do so for any purpose
whatsoever, the technical data contained in the proposal upon which this
contract is based. (End of Clause) \[62 FR 2310, Jan. 16, 1997\]

**952.227-84 Notice of right to request patent waiver.**

Include this provision in all appropriate solicitations in accordance
with 48 CFR 927.409(t).

RIGHT TO REQUEST PATENT WAIVER (FEB 1998)

Offerors have the right to request a waiver of all or any part of the
rights of the United States in inventions conceived or first actually
reduced to practice in performance of the contract that may be awarded
as a result of this solicitation, in advance of or within 30 days after
the effective date of contracting. Even where such advance waiver is not
requested or the request is denied, the contractor will have a
continuing right under the contract to request a waiver of the rights of
the United States in identified inventions, i.e., individual inventions
conceived or first actually reduced to practice in performance of the
contract. Domestic small businesses and domestic nonprofit organizations
normally will receive the patent rights clause at DEAR 952.227-11 which
permits the contractor to retain title to such inventions, except under
contracts for management or operation of a Government-owned research and
development facility or under contracts involving exceptional
circumstances or intelligence activities. Therefore, small businesses
and nonprofit organizations normally need not request a waiver. See the
patent rights clause in the draft contract in this solicitation. See
DOE\'s patent waiver regulations at 10 CFR part 784. (End of Provision)
\[63 FR 10499, Mar. 4, 1998\]

**952.231-70 Date of incurrence of cost.**

In accordance with 931.205-32, insert the following clause when advance
understandings have been negotiated regarding costs incurred prior to
the contract effective date:

DATE OF INCURRENCE OF COST (APR 1984)

The Contractor shall be entitled to reimbursement for costs incurred in
an amount not to exceed

\$\_\_\_\_\_\_ on or after \_\_\_\_\_\_\_\_ which, if incurred after
this contract has been entered into, would have been reimbursable under
the provisions of this contract. (End of Clause)

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984\]

**952.231-71 Insurance-litigation and claims**

As prescribed in 48 CFR 931.205-19, insert the following clause in
applicable non-management and operating contracts:

INSURANCE-LITIGATION AND CLAIMS (APRIL 2002)

\(a\) The contractor may, with the prior written authorization of the
contracting officer, and shall, upon the request of the Government,
initiate litigation against third parties, including proceedings before
administrative agencies, in connection with this contract. The
contractor shall proceed with such litigation in good faith and as
directed from time to time by the contracting officer.

\(b\) The contractor shall give the contracting officer immediate notice
in writing of any legal proceeding, including any proceeding before an
administrative agency, filed against the contractor arising out of the
performance of this contract. Except as otherwise directed by the
contracting officer, in writing, the contractor shall furnish
immediately to the contracting officer copies of all pertinent papers
received by the contractor with respect to such action. The contractor,
with the prior written authorization of the contracting officer, shall
proceed with such litigation in good faith and as directed from time to
time by the contracting officer.

(c)(1) Except as provided in paragraph (c)(2) of this clause, the
contractor shall procure and maintain such bonds and insurance as
required by law or approved in writing by the contracting officer.

\(2\) The contractor may, with the approval of the contracting officer,
maintain a self-insurance program; provided that, with respect to
workers\' compensation, the contractor is qualified pursuant to
statutory authority.

\(3\) All bonds and insurance required by this clause shall be in a form
and amount and for those periods as the contracting officer may require
or approve and with sureties and insurers approved by the contracting
officer.

\(d\) The contractor agrees to submit for the contracting officer\'s
approval, to the extent and in the manner required by the contracting
officer, any other bonds and insurance that are maintained by the
contractor in connection with the performance of this contract and for
which the contractor seeks reimbursement. If an insurance cost (whether
a premium for commercial insurance or related to self-insurance)
includes a portion covering costs made unallowable elsewhere in the
contract, and the share of the cost for coverage for the unallowable
cost is determinable, the portion of the cost that is otherwise an
allowable cost under this contract is reimbursable to the extent
determined by the contracting officer.

\(e\) Except as provided in paragraphs (g) and (h) of this clause, or
specifically disallowed elsewhere in this contract, the contractor shall
be reimbursed-

\(1\) For that portion of the reasonable cost of bonds and insurance
allocable to this contract required in accordance with contract terms or
approved under this clause, and

\(2\) For liabilities (and reasonable expenses incidental to such
liabilities, including litigation costs) to third persons not
compensated by insurance or otherwise without regard to and as an
exception to the limitation of cost or limitation of funds clause of
this contract.

\(f\) The Government\'s liability under paragraph (e) of this clause is
subject to the availability of appropriated funds. Nothing in this
contract shall be construed as implying that the Congress will, at a
later date, appropriate funds sufficient to meet deficiencies.

\(g\) Notwithstanding any other provision of this contract, the
contractor shall not be reimbursed for liabilities (and expenses
incidental to such liabilities, including litigation costs, counsel
fees, judgment and settlements)-

\(1\) Which are otherwise unallowable by law or the provisions of this
contract; or

\(2\) For which the contractor has failed to insure or to maintain
insurance as required by law, this contract, or by the written direction
of the contracting officer.

\(h\) In addition to the cost reimbursement limitations contained in 48
CFR Part 31, as supplemented in 48 CFR Part 931, and notwithstanding any
other provision of this contract, the contractor\'s liabilities to third
persons, including employees but excluding costs incidental to workers\'
compensation actions (and any expenses incidental to such liabilities,
including litigation costs, counsel fees, judgments and settlements),
shall not be reimbursed if such liabilities were caused by contractor
managerial personnel\'s-

\(1\) Willful misconduct,

\(2\) Lack of good faith, or

\(3\) Failure to exercise prudent business judgment, which means failure
to act in the same manner as a prudent person in the conduct of
competitive business; or, in the case of a non-profit educational
institution, failure to act in the manner that a prudent person would
under the circumstances prevailing at the time the decision to incur the
cost is made.

\(i\) The burden of proof shall be upon the contractor to establish that
costs covered by paragraph (h) of this clause are allowable and
reasonable if, after an initial review of the facts, the contracting
officer challenges a specific cost or informs the contractor that there
is reason to believe that the cost results from willful misconduct, lack
of good faith, or failure to exercise prudent business judgment by
contractor managerial personnel.

(j)(1) All litigation costs, including counsel fees, judgments and
settlements shall be differentiated and accounted for by the contractor
so as to be separately identifiable. If the contracting officer
provisionally disallows such costs, then the contractor may not use
funds advanced by DOE under the contract to finance the litigation.

\(2\) Punitive damages are not allowable unless the act or failure to
act which gave rise to the liability resulted from compliance with
specific terms and conditions of the contract or written instructions
from the contracting officer.

\(3\) The portion of the cost of insurance obtained by the contractor
that is allocable to coverage of liabilities referred to in paragraph
(g)(1) of this clause is not allowable.

\(4\) The term \"contractor\'s managerial personnel\" is defined in the
Property clause in this contract.

\(k\) The contractor may at its own expense and not as an allowable cost
procure for its own protection insurance to compensate the contractor
for any unallowable or unreimbursable costs incurred in connection with
contract performance.

\(l\) If any suit or action is filed or any claim is made against the
contractor, the cost and expense of which may be reimbursable to the
contractor under this contract, and the risk of which is then uninsured
or is insured for less than the amount claimed, the contractor shall-

\(1\) Immediately notify the contracting officer and promptly furnish
copies of all pertinent papers received;

\(2\) Authorize Department representatives to collaborate with: in-house
or DOE-approved outside counsel in settling or defending the claim; or
counsel for the insurance carrier in settling or defending the claim if
the amount of the liability claimed exceeds the amount of coverage,
unless precluded by the terms of the insurance contract; and

\(3\) Authorize Department representatives to settle the claim or to
defend or represent the contractor in and/or to take charge of any
litigation, if required by the Department, if the liability is not
insured or covered by bond. In any action against more than one
Department contractor, the Department may require the contractor to be
represented by common counsel. Counsel for the contractor may, at the
contractor\'s own expense, be associated with the Department
representatives in any such claim or litigation. (End of Clause) \[60 FR
14869, Mar. 28, 2002\]

**952.233-2 Service of protest.**

As prescribed in 48 CFR 933.106(a), add the following to the end of the
Provision at FAR 52.233-2:

\(c\) Another copy of a protest filed with the General Accounting Office
shall be furnished to the following address within the time periods
described in paragraph (b) of this clause: U.S. Department of Energy,
Assistant General Counsel for Procurement and Financial Assistance
(GC-61), 1000 Independence Avenue, S.W., Washington, DC 20585, Fax:
(202) 586-4546.

\[61 FR 41702, Aug. 9, 1996; 67 FR 14869, Mar. 28, 2002\]

**952.233-4 Notice of protest file availability.**

As prescribed in 933.106(b), insert the following provision:

NOTICE OF PROTEST FILE AVAILABILITY (SEP 1996)

\(a\) If a protest of this procurement is filed with the General
Accounting Office (GAO) in accordance with 4 CFR Part 21, any actual or
prospective offeror may request the Department of Energy to provide it
with reasonable access to the protest file pursuant to FAR
33.104(a)(3)(ii), implementing section 1065 of Public Law 103- 355. Such
request must be in writing and addressed to the contracting officer for
this procurement.

\(b\) Any offeror who submits information or documents to the Department
for the purpose of competing in this procurement is hereby notified that
information or documents it submits may be included in the protest file
that will be available to actual or prospective offerors in accordance
with the requirements of FAR 33.104(a)(3)(ii). The Department will be
required to make such documents available unless they are exempt from
disclosure pursuant to the Freedom of Information Act. Therefore,
offerors should mark any documents as to which they would assert that an
exemption applies. (See 10 CFR part 1004.)

\[61 FR 41702, Aug. 9, 1996\]

**952.233-5 Agency protest review.**

As prescribed in 48 CFR 933.106(c), insert the following provision:

AGENCY PROTEST REVIEW (SEP 1996)

Protests to the Agency will be decided either at the level of the Head
of the Contracting Activity or at the Headquarters level. The Department
of Energy\'s agency protest procedures, set forth in 933.103, elaborate
on these options and on the availability of a suspension of a
procurement that is protested to the agency. The Department encourages
potential protesters to discuss their concerns with the contracting
officer prior to filing a protest.

\[61 FR 41702, Aug. 9, 1996 \]

**952.235-70 Key personnel.**

In accordance with 935.070, insert the following clause.

KEY PERSONNEL (APR 1994)

The personnel specified in an attachment to this contract are considered
to be essential to the work being performed hereunder. Prior to
diverting any of the specified individuals to other programs, the
Contractor shall notify the contracting officer reasonably in advance
and shall submit justification (including proposed substitutions) in
sufficient detail to permit evaluation of the impact on the program. No
diversion shall be made by the contractor without the written consent of
the contracting officer: Provided, that the contracting officer may
ratify in writing such diversion and such ratification shall constitute
the consent of the contracting officer required by this clause. The
attachment to this contract may be amended from time to time during the
course of the contract to either add or delete personnel, as
appropriate.

\[49 FR 12042, Mar. 28, 1984, as amended at 56 FR 41965, Aug. 26, 1991;
62 FR 2310, Jan. 16, 1997\]

**952.235-71 Research Misconduct.**

As prescribed in 48 CFR Part 935.071, insert the following clause:

RESEARCH MISCONDUCT (JUL 2005)

\(a\) The contractor is responsible for maintaining the integrity of
research performed pursuant to this contract award including the
prevention, detection, and remediation of research misconduct as defined
by this clause, and the conduct of inquiries, investigations, and
adjudication of allegations of research misconduct in accordance with
the requirements of this clause.

\(b\) Unless otherwise instructed by the contracting officer, the
contractor must conduct an initial inquiry into any allegation of
research misconduct. If the contractor determines that there is
sufficient evidence to proceed to an investigation, it must notify the
contracting officer and, unless otherwise instructed, the contractor
must:

\(1\) Conduct an investigation to develop a complete factual record and
an examination of such record leading to either a finding of research
misconduct and an identification of appropriate remedies or a
determination that no further action is warranted;

\(2\) If the investigation leads to a finding of research misconduct,
conduct an adjudication by a responsible official who was not involved
in the inquiry or investigation and is separated organizationally from
the element which conducted the investigation. The adjudication must
include a review of the investigative record and, as warranted, a
determination of appropriate corrective actions and sanctions.

\(3\) Inform the contracting officer if an initial inquiry supports a
formal investigation and, if requested by the contracting officer
thereafter, keep the contracting officer informed of the results of the
investigation and any subsequent adjudication. When an investigation is
complete, the contractor will forward to the contracting officer a copy
of the evidentiary record, the investigative report, any recommendations
made to the contractor's adjudicating official, and the adjudicating
official's decision and notification of any corrective action taken or
planned, and the subject's written response (if any).

\(c\) The Department may elect to act in lieu of the contractor in
conducting an inquiry or investigation into an allegation of research
misconduct if the contracting officer finds that:

\(1\) The research organization is not prepared to handle the allegation
in a manner consistent with this clause;

\(2\) The allegation involves an entity of sufficiently small size that
it cannot reasonably conduct the inquiry;

\(3\) DOE involvement is necessary to ensure the public heath, safety,
and security, or to prevent harm to the public interest; or,

\(4\) The allegation involves possible criminal misconduct.

\(d\) In conducting the activities under paragraphs (b) and (c)of this
clause, the contractor and the Department, if it elects to conduct the
inquiry or investigation, shall adhere to the following guidelines:

\(1\) [Safeguards for information and subjects of
allegations.]{.underline} The contractor shall provide safeguards to
ensure that individuals may bring allegations of research misconduct
made in good faith to the attention of the contractor without suffering
retribution. Safeguards include: protection against retaliation; fair
and objective procedures for examining and resolving allegations; and
diligence in protecting positions and reputations. The contractor shall
also provide the subjects of allegations confidence that their rights
are protected and that the mere filing of an allegation of research
misconduct will not result in an adverse action. Safeguards include
timely written notice regarding substantive allegations against them, a
description of the allegation and reasonable access to any evidence
submitted to support the allegation or developed in response to an
allegation and notice of any findings of research misconduct.

\(2\) [Objectivity and Expertise.]{.underline} The contractor shall
select individual(s) to inquire, investigate, and adjudicate allegations
of research misconduct who have appropriate expertise and have no
unresolved conflict of interest. The individual(s) who conducts an
adjudication must not be the same individual(s) who conducted the
inquiry or investigation, and must be separate organizationally from the
element that conducted the inquiry or investigation.

\(3\) [Timeliness.]{.underline} The contractor shall coordinate,
inquire, investigate and adjudicate allegations of research misconduct
promptly, but thoroughly. Generally, an investigation should be
completed within 120 days of initiation, and adjudication should be
complete within 60 days of receipt of the record of investigation.

\(4\) [Confidentiality.]{.underline} To the extent possible, consistent
with fair and thorough processing of allegations of research misconduct
and applicable law and regulation, knowledge about the identity of the
subjects of allegations and informants should be limited to those with a
need to know.

\(5\) [Remediation and Sanction.]{.underline} If the contractor finds
that research misconduct has occurred, it shall assess the seriousness
of the misconduct and its impact on the research completed or in
process. The contractor must take all necessary corrective actions. Such
action may include but are not limited to, correcting the research
record and as appropriate imposing restrictions, controls, or other
parameters on research in process or to be conducted in the future. The
contractor must coordinate remedial actions with the contracting
officer. The contractor must also consider whether personnel sanctions
are appropriate. Any such sanction must be considered and effected
consistent with any applicable personnel laws, policies, and procedures,
and shall take into account the seriousness of the misconduct and its
impact, whether it was done knowingly or intentionally, and whether it
was an isolated event or pattern of conduct.

\(e\) DOE reserves the right to pursue such remedies and other actions
as it deems appropriate, consistent with the terms and conditions of the
award instrument and applicable laws and regulations. However, the
contractor's good faith administration of this clause and the
effectiveness of its remedial actions and sanctions shall be positive
considerations and shall be taken into account as mitigating factors in
assessing the need for such actions. If DOE pursues any such action, it
will inform the subject of the action of the outcome and any applicable
appeal procedures.

\(f\) [Definitions.]{.underline}

*[Adjudication]{.underline}* means a formal review of a record of
investigation of alleged research misconduct to determine whether and
what corrective actions and sanctions should be taken.

*[Fabrication]{.underline}* means making up data or results and
recording or reporting them.

*[Falsification]{.underline}* means manipulating research materials,
equipment, or processes, or changing or omitting data or results such
that the research is not accurately represented in the research record.

*[Finding of Research Misconduct]{.underline}* means a determination,
based on a preponderance of the evidence, that research misconduct has
occurred. Such a finding requires a conclusion that there has been a
significant departure from accepted practices of the relevant research
community and that it be knowingly, intentionally, or recklessly
committed.

*[Inquiry]{.underline}* means information gathering and initial
fact-finding to determine whether an allegation or apparent instance of
misconduct warrants an investigation.

*[Investigation]{.underline}* means the formal examination and
evaluation of the relevant facts.

*[Plagiarism]{.underline}* means the appropriation of another person\'s
ideas, processes, results, or words without giving appropriate credit.

*[Research]{.underline}* means all basic, applied, and demonstration
research in all fields of science, medicine, engineering, and
mathematics, including, but not limited to, research in economics,
education, linguistics, medicine, psychology, social sciences
statistics, and research involving human subjects or animals.

*[Research Misconduct]{.underline}* means fabrication, falsification, or
plagiarism in proposing, performing, or reviewing research, or in
reporting research results, but does not include honest error or
differences of opinion.

*[Research record]{.underline}* means the record of all data or results
that embody the facts resulting from scientists' inquiries, including,
but not limited to, research proposals, laboratory records, both
physical and electronic, progress reports, abstracts, theses, oral
presentations, internal reports, and journal articles.

\(g\) By executing this contract, the contractor provides its assurance
that it has established an administrative process for performing an
inquiry, mediating if possible, or investigating, and reporting
allegations of research misconduct; and that it will comply with its own
administrative process and the requirements of 10 CFR part 733 for
performing an inquiry, possible mediation, investigation and reporting
of research misconduct.

\(h\) The contractor must insert or have inserted the substance of this
clause, including paragraph (g), in subcontracts at all tiers that
involve research.

(End of Clause)

\[70 FR 37010 Jun. 28, 2005\]

**952.236 Construction and architect-engineer contracts.**

**952.236-70 \[Removed\]**

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984; 67 FR 14871,
Mar. 28, 2002\]

**952.236-71 Inspection in Architect-Engineer contracts.**

As prescribed at 936.609-3 insert the following clause.

INSPECTION (APR 1994)

The Government, through any authorized representatives, has the right at
all reasonable times, to inspect, or otherwise evaluate the work
performed or being performed hereunder and the premises in which it is
being performed. If any inspection, or evaluation is made by the
Government on the premises of the Contractor or a subcontractor, the
Contractor shall provide and shall require his subcontractors to provide
all reasonable facilities and assistance for the safety and convenience
of the Government representatives in the performance of their duties.
All inspections and evaluations shall be performed in such a manner as
will not unduly delay the work.

\[62 FR 2310, Jan. 16, 1997\]

**952.236-72 Nonrefundable fee for plans and specifications.**

In accordance with the requirement at 936.202(h), include the following
in solicitations for construction.

NONREFUNDABLE FEE FOR PLANS AND SPECIFICATIONS (APR 1984)

A fee of \$\_\_\_\_ is required for the plans and specifications
referenced in this solicitation. Send check or money order
to\_\_\_\_\_\_. The fee is not refundable. Plans and specifications need
not be returned.

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984; 67 FR 14869\]

**952.237-70 Collective bargaining agreements protective services.**

As prescribed in 937.7040, insert the following clause:

COLLECTIVE BARGAINING AGREEMENTS

PROTECTIVE SERVICES (AUG 1993)

When negotiating collective bargaining agreements applicable to the work
force under this contract, the Contractor shall use its best efforts to
ensure such agreements contain provisions designed to assure continuity
of services. All such agreements entered into during the contract period
of performance should provide that grievances and disputes involving the
interpretation or application of the agreement will be settled without
resorting to strike, lockout, or other interruption of normal
operations. For this purpose, each collective bargaining agreement
should provide an effective grievance procedure with arbitration as its
final step, unless the parties mutually agree upon some other method of
assuring continuity of operations. As part of such agreements,
management and labor should agree to cooperate fully with the Federal
Mediation and Conciliation Service. The contractor shall include the
substance of this clause in any subcontracts for protective services.

\[58 FR 36149, Jul. 6, 1993\]

**952.242-70 Technical Direction.**

As prescribed in 48 CFR 942.270-2, insert the following clause.

TECHNICAL DIRECTION (DEC 2000)

\(a\) Performance of the work under this contract shall be subject to
the technical direction of the DOE Contracting Officer\'s Representative
(COR). The term \"technical direction\" is defined to include, without
limitation:

\(1\) Providing direction to the contractor that redirects contract
effort, shift work emphasis between work areas or tasks, require pursuit
of certain lines of inquiry, fill in details, or otherwise serve to
accomplish the contractual Statement of Work.

\(2\) Providing written information to the contractor that assists in
interpreting drawings, specifications, or technical portions of the work
description.

\(3\) Reviewing and, where required by the contract, approving,
technical reports, drawings, specifications, and technical information
to be delivered by the contractor to the Government.

\(b\) The contractor will receive a copy of the written COR designation
from the contracting officer. It will specify the extent of the COR\'s
authority to act on behalf of the contracting officer.

\(c\) Technical direction must be within the scope of work stated in the
contract. The COR does not have the authority to, and may not, issue any
technical direction that:

\(1\) Constitutes an assignment of additional work outside the Statement
of Work;

\(2\) Constitutes a change as defined in the contract clause entitled
\"Changes;\"

\(3\) In any manner causes an increase or decrease in the total
estimated contract cost, the fee (if any), or the time required for
contract performance;

\(4\) Changes any of the expressed terms, conditions or specifications
of the contract; or

\(5\) Interferes with the contractor\'s right to perform the terms and
conditions of the contract.

\(d\) All technical direction shall be issued in writing by the COR.

\(e\) The contractor must proceed promptly with the performance of
technical direction duly issued by the COR in the manner prescribed by
this clause and within its authority under the provisions of this
clause. If, in the opinion of the contractor, any instruction or
direction by the COR falls within one of the categories defined in
(c)(1) through (c)(5) of this clause, the contractor must not proceed
and must notify the Contracting Officer in writing within five (5)
working days after receipt of any such instruction or direction and must
request the Contracting Officer to modify the contract accordingly. Upon
receiving the notification from the contractor, the Contracting Officer
must:

\(1\) Advise the contractor in writing within thirty (30) days after
receipt of the contractor\'s letter that the technical direction is
within the scope of the contract effort and does not constitute a change
under the Changes clause of the contract;

\(2\) Advise the contractor in writing within a reasonable time that the
Government will issue a written change order; or

\(3\) Advise the contractor in writing within a reasonable time not to
proceed with the instruction or direction of the COR.

\(f\) A failure of the contractor and Contracting Officer either to
agree that the technical direction is within the scope of the contract
or to agree upon the contract action to be taken with respect to the
technical direction will be subject to the provisions of the clause
entitled \"Disputes.\" (End of Clause)

\[65 FR 80994, Dec. 22, 2000\]

**952.245 Clauses related to government property.**

**952.245-2 Government property (fixed-price contracts).**

Modify FAR 52.245-2 by adding \"and the DOE Acquisition Regulation
Subpart 945.5,\" after the reference to FAR Subpart 45.5 in the first
sentence of paragraphs (e)(1) and (e)(2) of the clause.

952.245-5 Government property (cost reimbursement, time-and-materials,
or labor-hour contracts.)

Modify FAR 52.245-5 by adding \"and DOE Acquisition Regulation Subpart
945.5\" after the reference to FAR Subpart 45.5 in paragraphs (e)(1) and
(e)(2) of the clause.

**952.247-70 Foreign travel.**

As prescribed in 48 CFR 947.7002, insert the following clause:

FOREIGN TRAVEL (DEC 2000)

Contractor foreign travel shall be conducted pursuant to the
requirements contained in DOE Order 551.1, Official Foreign Travel, or
any subsequent version of the order in effect at the time of award. (End
of Clause)

\[65 FR 81009, Dec. 22, 2000\]

**952.249 Clauses related to termination.**

**952.249-70 \[Removed\]**

\[49 FR 12042, Mar. 28, 1984; 49 FR 38952, Oct. 2, 1984; 62 FR 2310,
Jan. 16, 1997; 67 FR 14871, Mar. 28, 2002\]

**952.250 Clauses related to indemnification of contractors.**

**952.250-70 Nuclear hazards indemnity agreement.**

Insert the following clause in accordance with section 950.7006.

NUCLEAR HAZARDS INDEMNITY AGREEMENT (JUN 1996)

\(a\) Authority. This clause is incorporated into this contract pursuant
to the authority contained in subsection 170d. of the Atomic Energy Act
of 1954, as amended (hereinafter called the Act.)

\(b\) Definitions. The definitions set out in the Act shall apply to
this clause.

\(c\) Financial protection. Except as hereafter permitted or required in
writing by DOE, the contractor will not be required to provide or
maintain, and will not provide or maintain at Government expense, any
form of financial protection to cover public liability, as described in
paragraph (d)(2) below. DOE may, however, at any time require in writing
that the contractor provide and maintain financial protection of such a
type and in such amount as DOE shall determine to be appropriate to
cover such public liability, provided that the costs of such financial
protection are reimbursed to the contractor by DOE.

(d)(1) Indemnification. To the extent that the contractor and other
persons indemnified are not compensated by any financial protection
permitted or required by DOE, DOE will indemnify the contractor and
other persons indemnified against (i) claims for public liability as
described in subparagraph (d)(2) of this clause; and (ii) such legal
costs of the contractor and other persons indemnified as are approved by
DOE, provided that DOE\'s liability, including such legal costs, shall
not exceed the amount set forth in section 170e.(1)(B) of the Act in the
aggregate for each nuclear incident or precautionary evacuation
occurring within the United States or \$100 million in the aggregate for
each nuclear incident occurring outside the United States, irrespective
of the number of persons indemnified in connection with this contract.

\(2\) The public liability referred to in subparagraph (d)(1) of this
clause is public liability as defined in the Act which (i) arises out of
or in connection with the activities under this contract, including
transportation; and (ii) arises out of or results from a nuclear
incident or precautionary evacuation, as those terms are defined in the
Act.

(e)(1) Waiver of Defenses. In the event of a nuclear incident, as
defined in the Act, arising out of nuclear waste activities, as defined
in the Act, the contractor, on behalf of itself and other persons
indemnified, agrees to waive any issue or defense as to charitable or
governmental immunity.

\(2\) In the event of an extraordinary nuclear occurrence which:

\(i\) Arises out of, results from, or occurs in the course of the
construction, possession, or operation of a production or utilization
facility; or

\(ii\) Arises out of, results from, or occurs in the course of
transportation of source material, by-product material, or special
nuclear material to or from a production or utilization facility; or

\(iii\) Arises out of or results from the possession, operation, or use
by the contractor or a subcontractor of a device utilizing special
nuclear material or by-product material, during the course of the
contract activity; or

\(iv\) Arises out of, results from, or occurs in the course of nuclear
waste activities, the contractor, on behalf of itself and other persons
indemnified, agrees to waive:

\(A\) Any issue or defense as to the conduct of the claimant (including
the conduct of persons through whom the claimant derives its cause of
action) or fault of persons indemnified, including, but not limited to:

1\. Negligence;

2\. Contributory negligence;

3\. Assumption of risk; or

4\. Unforeseeable intervening causes, whether involving the conduct of a
third person or an act of God;

\(B\) Any issue or defense as to charitable or governmental immunity;
and

\(C\) Any issue or defense based on any statute of limitations, if suit
is instituted within 3 years from the date on which the claimant first
knew, or reasonably could have known, of his injury or change and the
cause thereof. The waiver of any such issue or defense shall be
effective regardless of whether such issue or defense may otherwise be
deemed jurisdictional or relating to an element in the cause of action.
The waiver shall be judicially enforceable in accordance with its terms
by the claimant against the person indemnified.

\(v\) The term extraordinary nuclear occurrence means an event which DOE
has determined to be an extraordinary nuclear occurrence as defined in
the Act. A determination of whether or not there has been an
extraordinary nuclear occurrence will be made in accordance with the
procedures in 10 CFR part 840.

\(vi\) For the purposes of that determination, \"offsite\" as that term
is used in 10 CFR part 840 means away from \"the contract location\"
which phrase means any DOE facility, installation, or site at which
contractual activity under this contract is being carried on, and any
contractor-owned or controlled facility, installation, or site at which
the contractor is engaged in the performance of contractual activity
under this contract.

\(3\) The waivers set forth above:

\(i\) Shall be effective regardless of whether such issue or defense may
otherwise be deemed jurisdictional or relating to an element in the
cause of action;

\(ii\) Shall be judicially enforceable in accordance with its terms by
the claimant against the person indemnified;

\(iii\) Shall not preclude a defense based upon a failure to take
reasonable steps to mitigate damages;

\(iv\) Shall not apply to injury or damage to a claimant or to a
claimant\'s property which is intentionally sustained by the claimant or
which results from a nuclear incident intentionally and wrongfully
caused by the claimant;

\(v\) Shall not apply to injury to a claimant who is employed at the
site of and in connection with the activity where the extraordinary
nuclear occurrence takes place, if benefits therefor are either payable
or required to be provided under any workmen\'s compensation or
occupational disease law;

\(vi\) Shall not apply to any claim resulting from a nuclear incident
occurring outside the United States;

\(vii\) Shall be effective only with respect to those obligations set
forth in this clause and in insurance policies, contracts or other proof
of financial protection; and

\(viii\) Shall not apply to, or prejudice the prosecution or defense of,
any claim or portion of claim which is not within the protection
afforded under (A) the limit of liability provisions under subsection
170e. of the Act, and (B) the terms of this agreement and the terms of
insurance policies, contracts, or other proof of financial protection.

\(f\) Notification and litigation of claims. The contractor shall give
immediate written notice to DOE of any known action or claim filed or
made against the contractor or other person indemnified for public
liability as defined in paragraph (d)(2). Except as otherwise directed
by DOE, the contractor shall furnish promptly to DOE, copies of all
pertinent papers received by the contractor or filed with respect to
such actions or claims. DOE shall have the right to, and may collaborate
with, the contractor and any other person indemnified in the settlement
or defense of any action or claim and shall have the right to (1)
require the prior approval of DOE for the payment of any claim that DOE
may be required to indemnify hereunder; and (2) appear through the
Attorney General on behalf of the contractor or other person indemnified
in any action brought upon any claim that DOE may be required to
indemnify hereunder, take charge of such action, and settle or defend
any such action. If the settlement or defense of any such action or
claim is undertaken by DOE, the contractor or other person indemnified
shall furnish all reasonable assistance in effecting a settlement or
asserting a defense.

\(g\) Continuity of DOE obligations. The obligations of DOE under this
clause shall not be affected by any failure on the part of the
contractor to fulfill its obligation under this contract and shall be
unaffected by the death, disability, or termination of existence of the
contractor, or by the completion, termination or expiration of this
contract.

\(h\) Effect of other clauses. The provisions of this clause shall not
be limited in any way by, and shall be interpreted without reference to,
any other clause of this contract, including the clause entitled
Contract Disputes, provided, however, that this clause shall be subject
to the clauses entitled Covenant Against Contingent Fees, and Accounts,
records, and inspection, and any provisions that are later added to this
contract as required by applicable Federal law, including statutes,
executive orders and regulations, to be included in Nuclear Hazards
Indemnity Agreements.

\(i\) Civil penalties. The contractor and its subcontractors and
suppliers who are indemnified under the provisions of this clause are
subject to civil penalties, pursuant to 234A of the Act, for violations
of applicable DOE nuclear-safety related rules, regulations, or orders.

\(j\) Criminal penalties. Any individual director, officer, or employee
of the contractor or of its subcontractors and suppliers who are
indemnified under the provisions of this clause are subject to criminal
penalties, pursuant to 223(c) of the Act, for knowing and willful
violation of the Atomic Energy Act of 1954, as amended, and applicable
DOE nuclear safety-related rules, regulations or orders which violation
results in, or, if undetected, would have resulted in a nuclear
incident.

\(k\) Inclusion in subcontracts. The contractor shall insert this clause
in any subcontract which may involve the risk of public liability, as
that term is defined in the Act and further described in paragraph
(d)(2) above. However, this clause shall not be included in subcontracts
in which the subcontractor is subject to Nuclear Regulatory Commission
(NRC) financial protection requirements under section 170b. of the Act
or NRC agreements of indemnification under section 170c. or k. of the
Act for the activities under the subcontract.

Effective date

( ) See Note II below for instructions related to this section on
Effective Date.

Relationship to general indemnity

( ) See Note III below for instructions related to this section on
Relationship to General Indemnity.

(End of clause)

NOTE I: Paragraph (i) of the clause will be replaced with \"Reserved\"
in contracts specifically exempted from civil penalties by section 234
of the Act. That subsection provides that the following DOE contractors
are not subject to the assessment of civil penalties:

\(1\) The University of Chicago (and any subcontractors or suppliers
thereto) for activities associated with Argonne National Laboratory;

\(2\) The University of California (and any subcontractors or suppliers
thereto) for activities associated with Los Alamos National Laboratory,
Lawrence Livermore National Laboratory, and Lawrence Berkeley National
Laboratory;

\(3\) American Telephone and Telegraph Company and its subsidiaries (and
any subcontractors or suppliers thereto) for activities associated with
Sandia National Laboratories;

\(4\) Universities Research Association, Inc. (and any subcontractors or
suppliers thereto) for activities associated with FERMI National
Laboratory:

\(5\) Princeton University (and any subcontractor or suppliers thereto)
for activities associated with Princeton Plasma Physics Laboratory;

\(6\) The Associated Universities, Inc. (and any subcontractors or
suppliers thereto) for activities associated with the Brookhaven
National Laboratory; and

\(7\) Battelle Memorial Institute (and any subcontractors or suppliers
thereto) for activities associated with Pacific Northwest Laboratory.

(End of Note)

NOTE II: Contracts with an effective date after the date of (June 12,
1996), do not require the effective date provision in this clause.
Delete the title.

Use the EFFECTIVE DATE title and the following language, for those
contracts:

\"( ) This indemnity agreement shall be applicable with respect to
nuclear incidents occurring on or after ..\"

\(1\) Those that contained an indemnity pursuant to Public Law 85-840
prior to August 20, 1988, include the effective date provision above,
inserting the effective date of the contract modification that replaced
the Public Law 85-804 indemnity with an interim Price-Anderson based
indemnity. Pursuant to the Price-Anderson Amendments Act, this
substitution must have taken place by February 20, 1989.

\(2\) Those that contained, and continue to contain, either of the
previous Nuclear Hazards Indemnity clauses, include the effective date
provision above, inserting \"August 20, 1988.\"

\(3\) Those with an effective date between August 20, 1988, and the date
of the Final Rule, that (a) had \"interim coverage\" or (b) did not have
\"interim coverage\" but have now been determined to be covered under
the PAAA, include the effective date provision above, inserting the
contract effective date.

NOTE III: The following alternate will be added to the above Nuclear
Hazards Indemnity Agreement clause for all contracts that contain a
general authority indemnity pursuant to 950.7101. Caution: Be aware that
for contracts that will have this provision added which do not contain
an effective date provision, this paragraph shall be marked (1). In the
event an Effective Date provision has been included, it shall be market
(m).

\"( ) To the extent that the contractor is compensated by any financial
protection, or is indemnified pursuant to this clause, or is effectively
relieved of public liability by an order or orders limiting same,
pursuant to 170e of the Act, the provisions of the clause providing
general authority indemnity shall not apply.\"

(End of note)

\[56 FR 57828, Nov. 14, 1991 as amended at 58 FR 32306, Jun. 9, 1993; 65
FR 80994, Dec. 22, 2000\]

**952.251-70 Contractor employee travel discounts.**

As prescribed in 48 CFR 951.70, insert the following clause.

CONTRACTOR EMPLOYEE TRAVEL DISCOUNTS (DEC 2000)

\(a\) The contractor shall take advantage of travel discounts offered to
Federal contractor employee travelers by AMTRAK, hotels, motels, or car
rental companies, when use of such discounts would result in lower
overall trip costs and the discounted services are reasonably available.
Vendors providing these services may require the contractor employee to
furnish them a letter of identification signed by the authorized
contracting officer.

\(b\) Contracted airlines. Contractors are not eligible for GSA contract
city pair fares.

\(c\) Discount rail service. AMTRAK voluntarily offers discounts to
Federal travelers on official business and sometimes extends those
discounts to Federal contractor employees.

\(d\) Hotels/motels. Many lodging providers extend their discount rates
for Federal employees to Federal contractor employees.

\(e\) Car rentals. The Military Traffic Management Command (MTMC) of the
Department of Defense negotiates rate agreements with car rental
companies that are available to Federal travelers on official business.
Some car rental companies extend those discounts to Federal contractor
employees.

\(f\) Obtaining travel discounts.

\(1\) To determine which vendors offer discounts to Government
contractors, the contractor may review commercial publications such as
the Official Airline guides Official Traveler, Innovata, or National
Telecommunications. The contractor may also obtain this information from
GSA contract Travel Management Centers or the Department of Defense\'s
Commercial Travel Offices.

\(2\) The vendor providing the service may require the Government
contractor to furnish a letter signed by the contracting officer. The
following illustrates a standard letter of identification.

OFFICIAL AGENCY LETTERHEAD

TO: Participating Vendor

SUBJECT: OFFICIAL TRAVEL OF GOVERNMENT CONTRACTOR

(FULL NAME OF TRAVELER), the bearer of this letter is an employee of
(COMPANY NAME) which has a contract with this agency under Government
contract (CONTRACT NUMBER). During the period of the contract (GIVE
DATES), AND WITH THE APPROVAL OF THE CONTRACT VENDOR, the employee is
eligible and authorized to use available travel discount rates in
accordance with Government contracts and/or agreements. Government
Contract City Pair fares are not available to Contractors.

SIGNATURE, Title and telephone number of Contracting Officer

\[54 FR 17737, Apr. 25, 1989; 54 FR 26045, June 21, 1989; 60 FR 30005,
Jun. 7, 1995; 65 FR 80994, Dec. 22, 2000\]

Revised: August 27, 2002

**PART 970 --- DOE MANAGEMENT AND OPERATING CONTRACTS**

Sec.

**Subpart 970.01 --- Management and Operating Contract Regulatory
System**

970.0100 Scope of part.

970.0103 Publication and codification.

**Subpart 970.03 --- Improper Business Practices and Personal Conflicts
of Interest**

970.0309 Whistleblower protection of contractor employees.

970.0309-1 Applicability.

970.0370 Management controls and improvements.

970.0370-1 Policy.

970.0370-2 Contract clause.

970.0371 Conduct of employees of DOE management and operating
contractors.

970.0371-1 Scope of section.

970.0371-2 Applicability.

970.0371-3 Definition.

970.0371-4 Gratuities.

970.0371-5 Use of privileged information.

970.0371-6 Incompatibility between regular duties and private interests.

970.0371-7 Outside employment of contractor employees.

970.0371-8 Employee disclosure concerning other employment services.

970.0371-9 Contract clause.

**Subpart 970.04 --- Administrative Matters**

970.0404 Safeguarding classified information.

970.0404-1 Definitions.

970.0404-2 General.

970.0404-3 Responsibilities of contracting officers.

970.0404-4 Solicitation provision and contract clauses.

970.0407 Contractor records retention.

970.0407-1 Applicability.

970.0407-1-1 Alternate retention schedules.

970.0407-1-2 Access to and ownership of records.

970.0407-1-3 Contract clause.

970.0470 Department of Energy Directives.

970.0470-1 General.

970.0470-2 Contract clause.

**Subpart 970.08 --- Required Sources of Supplies and Services**

970.0801 Excess personal property.

970.0801-1 Policy.

970.0808 Acquisition of printing.

970.0808-1 Scope of section.

970.0808-2 Policy.

970.0808-3 Contract clause.

**Subpart 970.09 --- Contractor Qualifications**

970.0905 Organizational conflicts of interest.

970.0970 Performance guarantees.

970.0970-1 Determination of responsibility.

970.0970-2 Solicitation provision.

**Subpart 970.11 --- Describing Agency Needs**

970.1100 Policy.

970.1100-1 Performance-based contracting.

970.1100-2 Additional considerations.

970.1103-4 Contract clause.

970.1170 Work authorization.

970.1170-1 Policy.

970.1170-2 Contract provision.

**Subpart 970.15 --- Contracting by Negotiation**

970.1504 Contract pricing.

970.1504-1 Price analysis

970.1504-1-1 Fees for management and operating contracts.

970.1504-1-2 Fee policy.

970.1504-1-3 Special considerations: Laboratory management and
operation.

970.1504-1-4 Types of contracts and fee arrangements.

970.1504-1-5 General considerations and techniques for determining fixed
fees.

970.1504-1-6 Calculating fixed fee.

970.1504-1-7 Fee base.

970.1504-1-8 Special equipment purchases.

970.1504-1-9 Special considerations: Cost-plus-award-fee.

970.1504-1-10 Special considerations: Fee limitations.

970.1504-1-11 Documentation.

970.1504-2 Price negotiation.

970.1504-3 Documentation.

970.1504-3-1 Cost or pricing data.

970.1504-4 Special cost or pricing areas.

970.1504-4-1 \[Removed and Reserved.\]

970.1504-4-2 \[Removed and Reserved.\].

970.1504-4-3 \[Removed and Reserved.\]

970.1504-5 Solicitation provision contract clauses.

**Subpart 970.17 --- Special Contracting Methods**

970.1706 Management and operating contracts.

970.1706-1 Award, renewal, and extension.

970.1706-2 Contract clause.

970.1707 Work for others.

970.1707-1 Scope.

970.1707-2 Purpose.

970.1707-3 Terms governing work for others.

970.1707-4 Contract clause.

**Subpart 970.19 --- Small, Small Disadvantaged and Women-Owned Small
Business Concerns**

970.1907 Subcontracting with Small Business, Small Disadvantaged
Business and Woman- owned Small Business Concerns.

970.1907-1 Subcontracting plan requirements.

**Subpart 970.22 Application of Labor Policies**

970.2200 Scope of subpart.

970.2201 Basic labor policies.

970.2201-1 Labor relations.

970.2201-1-1 General.

970.2201-1-2 Policies.

970.2201-1-3 Contract clause.

970.2201-2 Overtime management.

970.2201-2-1 Policy.

970.2201-2-2 Contract clause.

970.2204 Labor standards for contracts involving construction.

970.2204-1 Statutory and regulatory requirements.

970.2204-1-1 Administrative controls and criteria for application of the
Davis-Bacon Act in operational or maintenance activities.

970.2208 Equal Employment Opportunity.

970.2210 Service contract act.

970.2270 Unemployment compensation.

**Subpart 970.23 --- Environmental, Conservation, and Occupational
Safety and Drug Free Work Place**

970.2303 Hazardous materials identification and material safety.

970.2303-1 General.

970.2303-2 Contract clauses.

970.2304 Use of recovered/recycled materials.

970.2304-1 General.

970.2304-2 Contract clause.

970.2305 Workplace substance abuse programs-Management and operating
contracts.

970.2305-1 General.

970.2305-2 Applicability.

970.2305-3 Definitions.

970.2305-4 Solicitation provision and contract clause.

970.2306 Suspension of payments, termination of contract, and debarment
and suspension actions.

970.2307 Contracting for Environmentally Preferable and Energy-efficient
Products and Services.

970.2307-1 Motor vehicle fleet operations.

970.2307-2 Contract clause.

**Subpart 970.26 --- Other Socioeconomic Programs**

970.2670 Implementation of Section 3021 of the Energy Policy Act of
1992.

970.2670-1 Requirements.

970.2671 Diversity.

970.2671-1 Policy.

970.2671-2 Contract clause.

970.2672 Implementation of Section 3161 of the National Defense
Authorization Act for Fiscal Year 1993.

970.2672-1 Policy.

970.2672-2 Requirements.

970.2672-3 Contract clause.

970.2673 Regional partnerships.

970.2673-1 Policy.

970.2673-2 Contract clause.

**Subpart 970.27 --- Patents, Data, and Copyrights**

970.2701 General.

970.2701-1 Applicability.

970.2702 Patent related clauses.

970.2702-1 Authorization and consent.

970.2702-2 Notice and assistance regarding patent and copyright
infringement.

970.2702-3 Patent indemnity.

970.2702-4 Royalties.

970.2702-5 Rights to proposal data.

970.2702-6 Notice of right to request patent waiver.

970.2703 Patent rights.

970.2703-1 Purposes of patent rights clauses.

970.2703-2 Patent rights clause provisions for management and operating
contractors.

970.2704 Rights in data.

970.2704-1 General.

970.2704-2 Procedures.

970.2704-3 Contract clauses.

970.2770 Technology transfer.

970.2770-1 General.

970.2770-2 Policy.

970.2770-3 Technology transfer and patent rights.

970.2770-4 Contract clause.

**Subpart 970.28 --- Bonds and Insurance**

970.2803 Insurance.

970.2803-1 Workers\' compensation insurance.

970.2803-2 Contract clause.

**Subpart 970.29 --- Taxes**

970.2902 Federal excise taxes.

970.2902-1 Exemptions from federal excise taxes.

970.2903 State and local taxes.

970.2903-1 Applicability of state and local taxes to the Government.

970.2904 Contract clauses.

970.2904-1 Management and operating contracts.

**Subpart 970.30 --- Cost Accounting Standards**

970.3002 CAS Program Requirements.

970.3002-1 Applicability.

**Subpart 970.31 --- Contract Cost Principles and Procedures**

970.3101-00-70 Scope of subpart.

970.3101-9 Advance agreements.

970.3101-10 Cost certification.

970.3102-3-70 Home office expenses

970.3102-05 Application of cost principles.

970.3102-05-4 Bonding costs.

970.3102-05-6 Compensation for personal services.

970.3102-05-18 Independent research and development and bid and proposal
costs.

970.3102-05-19 Insurance and indemnification.

970.3102-05-22 Lobbying and political activity costs.

970.3102-05-28 Other business expenses.

970.3102-05-30 Patent costs and technology transfer costs.

970.3102-05-33 Professional and consultant service costs \[Departmental
coverage - paragraph (g)\].

970.3102-05-46 Travel costs.

970.3102-05-47 Costs related to legal and other proceedings.

970.3102-05-70 Preexisting conditions.

970.3170 Contract clause.

**Subpart 970.32 --- Contract Financing**

970.3200 Policy.

970.3200-1 Reduction or suspension of advance, partial, or progress
payments.

970.3200-1-1 Contract clause.

970.3204 Advance payments.

970.3204-1 Applicability.

970.3270 Standard financial management clauses.

**Subpart 970.34 --- Major System Acquisition**

970.3400 General requirements.

970.3400-1 Mission-oriented solicitation.

**Subpart 970.35 --- Research and Development Contracting**

970.3500 Scope of subpart.

970.3501 Federally funded research and development centers.

970.3501-1 Sponsoring agreements.

970.3501-2 Using an FFRDC.

970.3501-3 Reviewing FFRDC\'s.

970.3501-4 Contract Clause.

**Subpart 970.36 --- Construction and Architect-Engineer Contracts.**

970.3605 Contract clauses.

970.3605-1 Other contracts.

970.3605-2 Special construction clause for operating contracts.

**Subpart 970.37 --- Facilities Management Contracting**

970.3770 Facilities management.

970.3770-1 Policy.

970.3770-2 \[Removed and reserved\]

**Subpart 970.41 --- Acquisition of Utility Services**

970.4102 Acquiring utility services.

970.4102-1 Policy.

**Subpart 970.42 --- Contract Administration**

970.4207-03-02 Certificate of costs.

970.4207-03-70 Contract clause.

970.4207-05-01 Contracting officer determination procedure.

**Subpart 970.43 --- Contract Modifications**

970.4302 Changes.

970.4302-1 Contract Clause.

**Subpart 970.44 --- Management and Operating Contractor Purchasing**

970.4400 Scope.

970.4401 Responsibilities.

970.4401-1 General.

970.4401-2 Review and approval.

970.4401-3 Advance notification.

970.4402 Contractor purchasing system.

970.4402-1 Policy.

970.4402-2 General requirements.

970.4402-3 Purchasing from contractor-affiliated sources.

970.4402-4 Nuclear material transfers.

970.4403 Contract clause.

**Subpart 970.45 --- Government Property**

970.4501 General.

970.4501-1 Contract clause.

**Subpart 970.49 --- Termination of Contracts**

970.4905 Contract termination clause.

970.4905-1 Termination for convenience of the government and default.

**Subpart 970.50 --- Extraordinary Contractual Actions**

970.5004 Residual powers.

970.5004-1 Contract clause.

970.5070 Indemnification.

970.5070-1 Scope and applicability.

970.5070-2 General.

970.5070-3 Contract clauses.

**Subpart 970.52 --- Solicitation Provisions and Contract Clauses for
Management and Operating Contracts**

970.5200 Scope of subpart.

970.5201 Text of provisions and clauses.

970.5203-1 Management controls.

970.5203-2 Performance improvement and collaboration.

970.5203-3 Contractor\'s organization.

970.5204-1 Counterintelligence.

970.5204-2 Laws, regulations, and DOE directives.

970.5204-3 Access to and ownership of records.

970.5208-1 Printing.

970.5209-1 Requirement for guarantee of performance.

97-.5211-1 Work authorization.

970.5215-1 Total Available Fee: Base fee amount and performance fee
amount.

970.5215-2 \[Removed and Reserved\].

970.5215-3 Conditional payment of fee, profit, and other incentives --
facility management contracts.

970.5215-4 Cost reduction.

970.5215-5 Limitation on fee.

970.5217-1 Work for others.

970.5222-1 Collective bargaining agreements-management and operating
contracts.

970.5222-2 Overtime management.

970.5223-1 Integration of environment, safety, and health into work
planning and execution.

970.5223-2 Affirmative Procurement Program.

970.5223-3 Agreement regarding workplace substance abuse programs at DOE
facilities.

970.5223-4 Workplace Substance Abuse Programs at DOE sites.

970.5223-5 Motor vehicle fleet fuel efficiency.

970.5226-1 Diversity plan.

970.5226-2 Workforce restructuring under Section 3161 of the National
Defense Authorization Act for Fiscal Year 1993.

970.5226-3 Community commitment.

970.5227-1 Rights in data-facilities.

970.5227-2 Rights in data-technology transfer.

970.5227-3 Technology transfer mission.

970.5227-4 Authorization and consent.

970.5227-5 Notice and assistance regarding patent and copyright
infringement.

970.5227-6 Patent indemnity-subcontracts.

970.5227-7 Royalty information.

970.5227-8 Refund of royalties.

970.5227-9 Notice of right to request patent waiver.

970.5227-10 Patent rights-management and operating contracts, nonprofit
organization or small business firm contractor.

970.5227-11 Patent rights-management and operating contracts, for-profit
contractor, non- technology transfer.

970.5227-12 Patent rights-management and operating contracts, for-profit
contractor, advance class waiver.

970.5228-1 Insurance-Litigation and claims.

970.5229-1 State and local taxes.

970.5231-4 Preexisting conditions.

970.5232-1 Reduction or suspension of advance, partial, or progress
payments upon finding of substantial evidence of fraud.

970.5232-2 Payments and advances.

970.5232-3 Accounts, records, and inspection.

970.5232-4 Obligation of funds.

970.5232-5 Liability with respect to cost accounting standards.

970.5232-6 Work for others funding authorization.

970.5232-7 Financial management system.

970.5232-8 Integrated accounting.

970.5235-1 Federally funded research and development center sponsoring
agreement.

970.5236-1 Government facility subcontract approval.

970.5237-2 \[Removed and reserved\].

970.5242-1 Penalties for unallowable costs.

970.5243-1 Changes.

970.5244-1 Contractor purchasing system.

970.5245-1 Property.

Authority: 42 U.S. C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101, et.
seq.; 41 U.S.C. 418b; 50 U.S.C. 2401, et seq.

**Subpart 970.01 Management and Operating Contract Regulatory System**

**970.0100 Scope of part.**

This part provides Departmental policies, procedures, provisions, and
clauses that implement and supplement the Federal Acquisition Regulation
(FAR) and other parts of the Department of Energy Acquisition Regulation
(DEAR) for the award and administration of the Department\'s management
and operating contracts, as defined at 48 CFR subpart 17.6. The FAR and
other parts of the DEAR apply to management and operating contracts. See
48 CFR 970.5200 for guidance regarding which provisions and clauses
(from FAR, DEAR Part 970, or other parts of the DEAR) to include in
management and operating contracts.

**970.0103 Publication and codification.**

\(a\) Organization of Part 970. (1) To the extent possible, the titles
and text of the subparts, sections, and subsections of this part are
numbered to correspond with related material that is contained in the
FAR.

\(2\) The number to the left of the decimal point represents the DEAR
part number (i.e., 970). The numbers to the right of the decimal point
and to the left of the dash represent, in order, the DEAR subpart (first
two digits), and the DEAR section number (second two digits). The
numbers to the right of the dash represent the DEAR subsection. A second
dash may follow the DEAR subsection number. As applicable, numbers to
the right of the second dash represent subordinate subsections.

\(3\) To the extent practicable, the subpart number corresponds with the
FAR part which contains related coverage, and the section number
corresponds with the FAR subpart which contains related coverage (e.g.,
the coverage contained in DEAR 970.0309 corresponds with material
contained in FAR 3.9).

\(4\) Where the FAR does not contain related coverage on a particular
subject, the DEAR section number will be numbered using numbers of 70
and up (e.g., 970.0370).

\(b\) Special Note Regarding Clause Numbering. The section number for
clauses prescribed in Part 970 are numbered to correspond with the
subpart in which the clause is prescribed (e.g., 970.5203-1 is
prescribed for use at subpart 970.03).

**Subpart 970.03 Improper Business Practices and Personal Conflicts of
Interest**

**970.0309 Whistleblower Protection of Contractor Employees.**

**970.0309-1 Applicability.**

The contracting officer shall refer to 48 CFR subpart 903.9 regarding
the applicability of the DOE Employee Protection Program to management
and operating contracts.

**970.0370 Management Controls and Improvements.**

**970.0370-1 Policy.**

\(a\) Management and operating contractors shall develop and maintain
systems of management and quality control to discourage waste, fraud and
abuse; and to ensure that components, products, and services that are
provided to DOE satisfy the contractor\'s obligations under the
contract.

\(b\) As a part of the required overall management structure, the
contractor must maintain management control systems which, in compliance
with the requirements of the clause at 48 CFR 970.5203-1:

\(1\) Are documented and satisfactory to DOE;

\(2\) Ensure that all levels of management are accountable for effective
management systems and internal controls within their areas of assigned
responsibility;

\(3\) Cover both programmatic and administrative functions;

\(4\) Provide reasonable assurance that Government resources are
safeguarded against theft, fraud, waste, and unauthorized use;

\(5\) Promote efficient and effective operations;

\(6\) Ensure that all obligations and costs incurred are in compliance
with the intended purposes and the terms and conditions of the contract;

\(7\) Properly record, manage, and report all revenues, expenditures,
transactions and assets;

\(8\) Maintain financial, statistical and other reports necessary to
maintain accurate, reliable, and timely accountability and management
controls;

\(9\) Are periodically reviewed to ensure that the systems provide
reasonable assurance that the objectives of the system are being
accomplished and that these controls are working effectively;

\(10\) Are in accordance with the Comptroller General\'s standards for
internal controls, as set forth in the General Accounting Office Policy
and Procedures Manual For Guidance To Federal Agencies, (Oct 1984), as
amended.

\(c\) Management and operating contractors shall also develop and
maintain a baseline program of quality assurance that will implement
documented performance and quality standards, and management controls
and assessment techniques to ensure components, services, and products
meet DOE\'s, design criteria and other governing and applicable
specifications.

\(d\) DOE expects all its contractors to seek to identify improvements
in any aspect of performance. Management and operating contracts are
very large and complex; therefore, the opportunities to identify changes
in performance that will increase the effectiveness or efficiency of
contract performance are more prevalent than under other contracts. The
clause at 48 CFR 970.5203-2 requires DOE management and operating
contractors to affirmatively seek to identify, evaluate, and institute,
where appropriate, processes that will improve the effectiveness or
efficiency of any aspect of contract performance. It further requires
the contractor to communicate any such improvements to DOE, other
management and operating contractors, and DOE major facilities
contractors. The contractor is required to participate in efforts by
those contractors to address common problems or the institution of
improvements. It allows the contractor to enlist the aid of the DOE
contracting officer where necessary to institute or communicate the
improvements. The obligations under the clause in no way affect the
contractor\'s obligations under other provisions of the contract to
notify or acquire the approval of the contracting officer.

**970.0370-2 Contract clause.**

\(a\) The contracting officer shall insert the clause at 970.5203-1,
Management Controls, in all management and operating contracts.

\(b\) The contracting officer shall insert the clause at 970.5203-2,
Performance Improvement and Collaboration, in all management and
operating contracts.

**970.0371 Conduct of employees of DOE management and operating
contractors.**

**970.0371-1 Scope of section.**

This section establishes the policies for maintaining satisfactory
standards of conduct on the part of individuals employed by DOE
management and operating contractors.

**970.0371-2 Applicability.**

The policies in this section are applicable to all DOE management and
operating contractors.

**970.0371-3 Definition.**

Employees, as used in this section, are defined to mean individuals
employed by the contractor, both full and part-time, who are assigned to
work under a DOE management and operating contract.

**970.0371-4 Gratuities.**

Employees of a management and operating contractor shall not, under
circumstances which might reasonably be interpreted as an attempt to
influence the recipients in the conduct of their duties, accept any
gratuity or special favor from individuals or organizations with whom
the contractor is doing business, or proposing to do business, in
accomplishing the work under the contract. Reference is made to the
requirements prescribed in 48 CFR 3.502.

**970.0371-5 Use of privileged information.**

Management and operating contractor employees shall not use privileged
information for personal gain, or make other improper use of privileged
information which is acquired in connection with their employment on
contract work. For the purposes of this subsection, the term
\"privileged information\" includes but is not limited to, unpublished
information relating to technological and scientific developments;
medical, personnel, or security records of individuals; anticipated
materials\' requirements or pricing action; possible new sites for DOE
program operations; internal DOE decisions; policy development; and
knowledge of selections of contractors or subcontractors in advance of
official announcement.

**970.0371-6 Incompatibility between regular duties and private
interests.**

\(a\) Employees of a management and operating contractor shall not be
permitted to make or influence any decisions on behalf of the contractor
which directly or indirectly affect the interest of the Government, if
the employee\'s personal concern in the matter may be incompatible with
the interest of the Government. For example: An employee of a contractor
will not negotiate, or influence the award of, a subcontract with a
company in which the individual has an employment relationship or
significant financial interest; and an employee of a contractor will not
be assigned the preparation of an evaluation for DOE or for any DOE
contractor of some technical aspect of the work of another organization
with which the individual has an employment relationship, or significant
financial interest, or which is a competitor of an organization (other
than the contractor who is the individual\'s regular employer) in which
the individual has an employment relationship or significant financial
interest.

\(b\) The contractor shall be responsible for informing employees that
they are expected to disclose any incompatibilities between duties
performed for the contractor and their private interests and to refer
undecided questions to the contractor.

**970.0371-7 Outside employment of contractor employees.**

Employees of a management and operating contractor are entitled to the
same rights and privileges with respect to outside employment as other
citizens. Therefore, there is no general prohibition against contractor
employees having outside employment. However, no employee of a
contractor performing work on a full or part-time basis under a DOE
management and operating contract may engage in employment outside
official hours of duty or while on leave if such employment will:

\(a\) In any manner interfere with the proper and effective performance
of the duties of the position;

\(b\) Appear to create a conflict-of-interest situation, or

\(c\) Appear to subject DOE or the contractor to public criticism or
embarrassment.

**970.0371-8 Employee disclosure concerning other employment services.**

\(a\) Management and operating contractors are responsible for requiring
its employees to file with the contractor, a written disclosure
statement concerning outside employment services which involve the use
of information in the area of the employee\'s employment with the
contractor. The disclosure shall contain such information concerning the
outside employment as the contractor may prescribe. As a minimum, the
employee\'s disclosure shall:

\(1\) Acknowledge that the employee has read and is familiar with:

\(i\) The requirements and restrictions prescribed in this section,

\(ii\) DOE publication entitled, \"Reporting Results of Scientific and
Technical Work Funded by DOE\", and

\(iii\) The requirements of the contractor\'s contract with DOE relating
to patents.

\(2\) Include information concerning any rate of remuneration
significantly in excess of the employee\'s regular rate of remuneration;

\(3\) Identify any actual or potential conflicts with DOE\'s policies
regarding conduct of employees of DOE\'s contractors set forth in this
section;

\(4\) Address any potential impacts that such employment may have on the
contractor\'s responsibility to report fully and promptly to DOE all
significant research and development information; and

\(5\) Identify any potential conflicts such employment may have with the
patent provisions of the contractor\'s contract with DOE.

\(b\) The contractor shall provide a copy of all disclosures to the
contracting officer.

**970.0371-9 Contract clause.**

The contracting officer shall insert the clause at 970.5203-3,
Contractor\'s Organization, in all management and operating contracts.
The approval authority of the Secretary of Energy required in paragraph
(c) may not be delegated. In paragraph (a) the words \"and managerial
personnel (see 48 CFR 970.5245-1(j))\" may be inserted after \"(see 48
CFR 952.215-70)\".

**Subpart 970.04 Administrative Matters.**

**970.0404 Safeguarding classified information.**

**970.0404-1 Definitions.**

*Access Authorization* means an administrative determination that an
individual is eligible for access to classified information or is
eligible for access to, or control over, special nuclear material.

*Classified Information* means any information or material that is owned
by or produced for, or is under the control of the United States
Government, and determined pursuant to provisions of Executive Order
12356 of April 2, 1982 (3 CFR, 1982 Comp., p. 166), or prior orders, or
as authorized under the Atomic Energy Act of 1954, as amended, to
require protection against unauthorized disclosure, and is so
designated.

Counterintelligence means information gathered and activities conducted
to protect against espionage, other intelligence activities, sabotage,
or assassinations conducted for or on behalf of foreign powers,
organizations or persons, or international terrorist activities, but not
including personnel, physical, document or communication security
programs.

*Facility Clearance* means an administrative determination that a
facility is eligible to access, produce, use or store classified
information or special nuclear material.

*Restricted Data* means all data concerning design, manufacture, or
utilization of atomic weapons; the production of special nuclear
material; or the use of special nuclear material in the production of
energy; but shall not include data declassified or removed from the
Restricted Data category pursuant to section 142 of the Atomic Energy
Act of 1954, as amended, (42 U.S.C. 2162).

67 FR 14873, Mar. 28, 2002

**970.0404-2 General.**

\(a\) Guidance regarding the National Industrial Security Program as
implemented by the Department of Energy may be found at 904.4,
Safeguarding Classified Information Within Industry. Additional
information concerning contractor ownership when national security or
atomic energy information is involved may be found at 904.70.
Information regarding contractor ownership involving national security
program contracts may be found at 904.71.

\(b\) Executive Order 12333, United States Intelligence Activities,
provides for the organization and control of United States foreign
intelligence and counterintelligence activities. DOE has established a
counterintelligence program subject to this Executive Order which is
described in DOE Order 5670.3 (as amended). All DOE elements, including
management and operating contractors and other contractors managing
DOE-owned facilities which require access authorizations, should
undertake the necessary precautions to ensure that DOE and covered
Contractor personnel, programs and resources are properly protected from
foreign intelligence threats and activities.

67 FR 14873, Mar. 28, 2002

\(c\) For DOE management and operating contracts and other contracts
designated by the Procurement Executive, or designee, the clause
entitled, "Conditional Payment of Fee, Profit, and Other Incentives --
Facility Management Contracts," implements the requirements of section
234B of the Atomic Energy Act (see 48 CFR 904.402(c)(1)) for the use of
a contract clause that provides for an appropriate reduction in the fee
or amount paid to the contractor under the contract in the event of a
violation by the contractor or any contractor employee of any rule,
regulation, or order relating to the safeguarding or security of
Restricted Data or other classified information. The clause, in part,
provides for reductions in the amount of fee, profit, or share of cost
savings that is otherwise earned by the contractor for performance
failures relating to the safeguarding of Restricted Data and other
classified information.

\[68771, Dec. 10, 2003\]

**970.0404-3 Responsibilities of contracting officers.**

\(a\) Management and operating contracts which may require the
processing or storage of Restricted Data or Special Nuclear Material
require application of the applicable DOE Directives in the safeguards
and security series.

\(b\) The contracting officer shall refer to 48 CFR 904.71 for guidance
concerning the prohibition on award of a DOE contract under a national
security program to a company owned by an entity controlled by a foreign
government when access to proscribed information is required to perform
the contract.

67 FR 14873, Mar. 28, 2002

**970.0404-4 Solicitation provision and contract clauses.**

\(a\) The contracting officer shall insert the clause at 970.5204-1,
Counterintelligence, into all management and operating contracts and
other contracts for the management of DOE-owned facilities which include
the security and classification/declassification clauses.

\(b\) The contracting officer shall refer to 48 CFR 904.404 and 48 CFR
904.7103 for the prescription of solicitation provisions and contract
clauses relating to safeguarding classified information and foreign
ownership, control, or influence over contractors.

**970.0407 Contractor records retention.**

**970.0407-1 Applicability.**

**970.0407-1-1 Alternate retention schedules.**

Records produced under the Department\'s contracts involving management
and operation responsibilities relative to DOE-owned or-leased
facilities are to be retained and disposed of in accordance with the
guidance contained in DOE G 1324.5B, Records Management Program and DOE
Records Schedules (see current version), rather than those set forth at
48 CFR subpart 4.7, Contractor Records Retention.

**970.0407-1-2 Access to and ownership of records.**

Contracting officers may agree to contractor ownership of certain
categories of records designated in the instruction contained in
paragraph (b) of the clause at 48 CFR 970.5204-3, Access to and
Ownership of Records, provided the Government\'s rights to inspect,
copy, and audit these records are not limited. These rights must be
retained by the Government in order to carry out the Department\'s
statutory responsibilities required by the Atomic Energy Act and other
statutes for oversight of its contractors, including compliance with the
Department\'s health, safety and reporting requirements, and protection
of the public interest.

**970.0407-1-3 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5204-3,
Access to and Ownership of Records, in management and operating
contracts.

**970.0470 Department of Energy Directives.**

**970.0470-1 General.**

\(a\) The contractor is required to comply with the requirements of
applicable Federal, State and local laws and regulations, unless relief
has been granted by the appropriate authority. For informational
purposes, the contracting officer may append the contract with a list of
applicable laws or regulations (see 970.5204-2, Laws, Regulations, and
DOE Directives, paragraph (a)).

\(b\) The Department of Energy Directives System is a system of
instructions, including orders, notices, manuals, guides, and standards,
for Departmental elements. In certain circumstances, requirements
contained in these directives may apply to a contractor through
operation of a contract clause. Program and requirements personnel are
responsible for identifying requirements in the Directives System which
are applicable to a contract, and for developing a list of applicable
requirements and providing it to the contracting officer for inclusion
in the contract.

\(c\) Where directives requirements are established using either the
Standards/Requirements Identification Process or the Work Smart
Standards Process, the applicable process should also be used to
establish the environment, safety, and health portion of the list
identified in paragraph (b) of this section.

\(d\) Environmental, safety, and health (ES&H) requirements appropriate
for work conducted under a management and operating contract may be
determined by a DOE approved process to evaluate the work and the
associated hazards, and identify an appropriately tailored set of
standards, practices, and controls, such as a tailoring process included
in a DOE approved Safety Management System implemented under 48 CFR
970.5223-1, Integration of Environment, Safety, and Health into Work
Planning and Execution. When such a process is used, the contracting
officer shall ensure that the set of tailored requirements, as approved
by DOE pursuant to the process, is incorporated into the list identified
in paragraph (b) of this section. These requirements shall supersede, in
whole or in part, the contractual environmental, safety, and health
requirements previously made applicable to the contract by List B. If
the tailored set of requirements identifies an alternative requirement
which varies from an ES&H requirement of an otherwise applicable law or
regulation, the contractor must request an exemption or other
appropriate regulatory relief that may be specified in the governing
regulation.

**970.0470-2 Contract clause.**

The contracting officer shall insert the clause at DEAR 970.5204-2,
Laws, Regulations, and DOE Directives, in management and operating
contracts. The contracting officer may modify the clause to indicate the
location in the contract of List A, List B, or both.

**Subpart 970.08 Required sources of supplies and services**

**970.0801 Excess personal property.**

**970.0801-1 Policy.**

The provisions of 48 CFR subpart 8.1 (Federal Acquisition Regulation),
41 CFR 101-43 (Federal Property Management Regulation), and 41 CFR
109-43 (DOE Property Management Regulation) apply to DOE\'s management
and operating contracts.

**970.0808 Acquisition of printing.**

**970.0808-1 Scope of section.**

This section prescribes the Department\'s policy concerning duplicating
or printing services which may be required in the performance of
management and operating contracts.

**970.0808-2 Policy.**

Management and operating contractors shall provide or secure duplication
and printing services in accordance with the Government Printing and
Binding Regulations, Title 44 of the U.S. Code, and applicable DOE
Directives.

**970.0808-3 Contract clause.**

The contracting officer shall insert the clause at 970.5208-1, Printing,
in all management and operating contracts.

**Subpart 970.09 Contractor qualifications**

**970.0905 Organizational conflicts of interest.**

Management and operating contracts shall contain an organizational
conflict of interest clause substantially similar to the clause at 48
CFR 952.209-72, Organizational Conflicts of Interest, and which is
appropriate to the statement of work of the individual contract. In
addition, the contracting officer shall assure that the clause contains
appropriate restraints on intra-corporate relations between the
contractor\'s organization and personnel operating the Department\'s
facility and its parent corporate body and affiliates. Such restraints
shall include personnel access to the facility, technical transfer of
information from the facility, and the availability from the facility of
other advantages flowing from performance of the contract. The
contracting officer is responsible for ensuring that M&O contractors
adopt policies and procedures in the award of subcontracts that will
meet the Department\'s need to safeguard against a biased work product
and an unfair competitive advantage. To this end, the organizational
conflicts of interest clause in management and operating contracts shall
include Alternate I.

**970.0970 Performance guarantees.**

**970.0970-1 Determination of responsibility.**

\(a\) In the award of a management and operating contract, the
contracting officer shall determine that the prospective contractor is a
responsible contractor and is capable of providing all necessary
financial, personnel, and other resources in performance of the
contract.

\(b\) DOE contracts with entities that have been created solely for the
purpose of performing a specific management and operating contract.
Generally, such newly created entities will have very limited financial
and other resources. In such instances, when making the determination of
responsibility required under this section, the contracting officer may
evaluate the financial resources of other entities only to the extent
that those entities are legally bound, jointly and severally if more
than one, by means of a performance guarantee or other equivalent
enforceable commitment to supply the necessary resources to the
prospective contractor and to assume all contractual obligations of the
prospective contractor. A performance guarantee should be the means used
unless an equivalent degree of commitment can be obtained by an
alternative means.

\(c\) The guaranteeing corporate entity(ies) must be found to have
sufficient resources in order to satisfy its guarantee.

**970.0970-2 Solicitation provision.**

The contracting officer shall insert the provision at 48 CFR 970.5209-1,
Requirement for Guarantee of Performance, in solicitations when the
awardee will be required to be organized solely for performance of the
requirement.

**Subpart 970.11 Describing Agency Needs.**

**970.1100 Policy.**

**970.1100-1 Performance-based contracting.**

\(a\) It is the policy of the Department of Energy to use, to the
maximum extent practicable, performance-based contracting methods in its
management and operating contracts. Office of Federal Procurement Policy
Letter 91-2 provides guidance concerning the development and use of
performance-based contracting concepts and methodologies that may be
generally applied to management and operating contracts.
Performance-based contracts: Describe performance requirements in terms
of results rather than methods of accomplishing the work; use measurable
(i.e., terms of quality, timeliness, quantity) performance standards and
objectives and quality assurance surveillance plans; provide performance
incentives (positive or negative) where appropriate; and specify
procedures for award or incentive fee reduction when work activities are
not performed or do not meet contract requirements.

\(b\) The use of performance-based statements of work, where feasible,
is the preferred method for establishing work requirements. Such
statements of work and other documents used to establish work
requirements (such as work authorization directives) should describe
performance requirements and expectations in terms of outcome, results,
or final work products, as opposed to methods, processes, or design.

\(c\) Contract performance requirements and expectations should be
consistent with the Department\'s strategic planning goals and
objectives, as made applicable to the site or facility through
Departmental programmatic and financial planning processes. Measurable
performance criteria, objective measures, and where appropriate,
performance incentives, shall be structured to correspond to the
performance requirements established in the statement of work and other
documents used to establish work requirements.

\(d\) Quality assurance surveillance plans shall be developed to
facilitate the assessment of contractor performance and ensure the
appropriateness of any award or incentive fee payment. Such plans shall
be tailored to the contract performance objectives, criteria, and
measures, and shall, to the maximum extent practicable, focus on the
level of performance required by the performance objectives rather than
the methodology used by the contractor to achieve that level of
performance.

**970.1100-2 Additional considerations.**

\(a\) While it is not feasible to set forth standard language which
would apply to every contract situation, language must be designed for
inclusion in a management and operating contract to describe clearly the
work being undertaken; the controls, as appropriate, to be exercised by
DOE over the performance of that work; and the relationship contemplated
between the parties.

\(b\) The language shall also include the following with respect to
subcontracting performance of the work described pursuant to paragraph
(a) of this section: \"The contractor shall, when directed by DOE and
may, but only when authorized by DOE, enter into subcontracts for the
performance of any part of the work under this clause.\"

\(c\) The provisions required in paragraphs (a) and (b) of this section
shall be set forth in the statement of work of the contract.

**970.1103-4 Contract clause.**

Insert the clause at 48 CFR 52.211-5, Material Requirements, in
solicitations and contracts.

**970.1170 Work authorization.**

**970.1170-1 Policy.**

Each contract for the management and operation of a DOE site or
facility, and other contracts designated by the DOE or NNSA Procurement
Executive, must contain a scope of work section that describes, in
general terms, work planned and/or required to be performed. Work to be
performed under the contract shall be assigned through the use of a work
authorization to control individual work activities performed within the
scope of work. Work authorizations must be issued prior to the
commencement of the work and incurrence of any costs.

**970.1170-2 Contract provision.**

The Contracting Officer shall insert the clause at 48 CFR 970.5211-1,
Work authorization, in each solicitation and contract for the management
and operation of a DOE site or facility and in other contracts
designated by the DOE or NNSA Procurement Executive.

**Subpart 970.15 Contracting by Negotiation**

**970.1504 Contract pricing.**

**970.1504-1 Price analysis.**

**970.1504-1-1 Fees for management and operating contracts.**

This subsection sets forth the Department\'s policies on fees for
management and operating contracts and may be applied to other contracts
as determined by the Procurement Executive, or designee.

**970.1504-1-2 Fee policy.**

\(a\) DOE management and operating contractors may be paid a fee in
accordance with the requirements of this subsection.

\(b\) There are three basic principles underlying the Department\'s fee
policy:

\(1\) The amount of available fee should reflect the financial risk
assumed by the contractor.

\(2\) It is the policy of the Department, when work elements cannot be
fixed price, incentive fees (including award fees) tied to objective
measures should be used to the maximum extent appropriate.

\(3\) When work elements cannot be fixed price and award fees are
employed, they should be tied to either objective or subjective
measures. Each measure should, to the maximum extent appropriate, be
directly tied to a specific portion of the fee pool.

\(c\) Fee objectives and amounts are to be determined for each contract.
Standard fees or across-the-board fee agreements will not be used or
made. Due to the nature of funding management and operating contracts,
it is anticipated that fee shall be established in accordance with the
annual funding cycle; however, with the prior approval of the
Procurement Executive, or designee, a longer period may be used where
necessary to incentivize performance objectives that span funding cycles
or to optimize cost reduction efforts.

\(d\) Annual fee amounts shall be established in accordance with this
subsection. Annual amounts shall not exceed maximum amounts derived from
the appropriate fee schedule (and Classification Factor, if applicable)
unless approved in advance by the Procurement Executive, or designee. In
no event shall any fee exceed statutory limits imposed by *41 U.S.C.
254*(b).

(e)(1) Contracting Officers shall include negative fee incentives in
contracts when appropriate. A negative fee incentive is one in which the
contractor will not be paid the full target fee amount when the actual
performance level falls below the target level established in the
contract.

\(2\) Negative fee incentives may only be used when:

\(i\) A target level of performance can be established, which the
contractor can reasonably be expected to reach;

\(ii\) The value of the negative incentive is commensurate with the
lower level of performance and any additional administrative costs;

\(iii\) Factors likely to prevent attainment of the target level of
performance are clearly within the control of the contractor; and

\(iv\) The contract indicates clearly a level below which performance is
not acceptable.

\(f\) Prior to the issuance of a competitive solicitation or the
initiation of negotiations for an extension of an existing contract, the
HCA shall coordinate the maximum available fee, as allowed by 48 CFR
970.1504-1-1, and the fee amount targeted for negotiation, if less, with
the Procurement Executive, or designee. Solicitations shall identify
maximum available fee under the contract and may invite offerors to
propose fee less than the maximum available.

\(g\) When a contract subject to this subsection requires a contractor
to use its own facilities or equipment, or other resources to make its
own cost investment for contract performance, (e.g., when there is no
letter-of-credit financing) consideration may be given, subject to
approval by the Procurement Executive, or designee, to increasing the
total available fee amount above that otherwise provided by this
subsection.

\(h\) Multiple fee arrangements should be used in accordance with 48 CFR
970.1504-1-4.

(i)(1) In addition to other performance requirements specified in the
contract, DOE management and operating contractors and other contractors
designated by the Procurement Executive, or designee, are subject to
performance requirements relating to: environment, safety, and health
(ES&H), including worker safety and health (WS&H); and safeguarding of
Restricted Data and other classified information. Performance
requirements relating to ES&H will be set forth in the contract's ES&H
terms and conditions, including a DOE approved Integrated Safety
Management System (ISMS), or similar document. As applicable,
performance requirements relating to the safeguarding of Restricted Data
and other classified information will be set forth in the clauses of the
contract entitled "Security" and "Laws, Regulations, and DOE
Directives," as well as in other terms and conditions that prescribe
requirements for the safeguarding of Restricted Data and other
classified information.

\(2\) If the contractor does not meet the performance requirements of
the contract relating to ES&H or to the safeguarding of Restricted Data
and other classified information, otherwise earned fee, fixed fee,
profit, or share of cost savings may be unilaterally reduced by the
contracting officer in accordance with the clause entitled "Conditional
Payment of Fee, Profit, and Other Incentives -- Facility Management
Contracts."

\(3\) The clause entitled "Conditional Payment of Fee, Profit, and Other
Incentives -- Facility Management Contracts," provides for reductions of
earned fee, fixed fee, profit, or share of cost savings under the
contract depending upon the severity of the contractor's performance
failure relating to ES&H requirements and, if applicable, relating to
the safeguarding of Restricted Data and other classified information.
When reviewing performance failures that would otherwise warrant a
potential reduction of earned fee, fixed fee, profit, or share of cost
savings, the contracting officer must consider mitigating factors that
may warrant a reduction below the applicable range specified in the
clause. Some of the mitigating factors that must be considered are
included in the clause.

\(4\) The contracting officer must obtain the concurrence of the
cognizant Program Secretarial Officer

\(i\) Prior to effecting any reduction of fee or profit in accordance
with the terms and conditions of the clause entitled, "Conditional
Payment of Fee, Profit, and Other Incentives -- Facility Management
Contracts;" and

\(ii\) For determinations that no reduction of fee or profit is
warranted for a particular performance failure(s) that would otherwise
be subject to a reduction.

\[68 FR68771, Dec. 10, 2003\]

**970.1504-1-3 Special considerations: Laboratory management and
operation.**

\(a\) For the management and operation of a laboratory, the contracting
officer shall consider whether any fee is appropriate. Considerations
should include:

\(1\) The nature and extent of financial or other liability or risk
assumed or to be assumed under the contract;

\(2\) The proportion of retained earnings (as established under
generally accepted accounting methods) that are utilized to fund the
performance of work related to the DOE contracted effort;

\(3\) Facilities capital or capital equipment acquisition plans;

\(4\) Other funding needs, to include contingency funding, working
capital funding, and provision for funding unreimbursed costs deemed
ordinary and necessary;

\(5\) The utility of fee as a performance incentive; and

\(6\) The need for fee to attract qualified contractors, organizations,
and institutions.

\(b\) In the event fee is considered appropriate, the contracting
officer shall determine the amount of fee in accordance with this
subsection.

\(1\) Costs incurred in the operation of a laboratory that are allowable
and allocable under the cost principles (i.e., commercial using 48 CFR
31.2, nonprofit using OMB Circular A-122, or university-affiliated using
OMB Circular A-21), regulations (including 48 CFR 970.31), or statutes
applicable to the operating contractor should be classified as direct or
indirect (overhead or G&A) charges to the contract and not included as
proposed fee. Exceptions must be approved by the Procurement Executive,
or designee.

\(2\) Except as specified in 48 CFR 970.1504-1-3(c)(3), the maximum
total amount of fee shall be calculated in accordance with 48 CFR
970.1504-1-5 or 48 CFR 970.1504-1-9, as appropriate. The total amount of
fee under any laboratory management and operating contract or other
designated contract shall not exceed, and may be significantly less
than, the result of that calculation. In determining the total amount of
fee, the contracting officer shall consider the evaluation of the
factors in paragraph (a) of this subsection as well as any benefits the
laboratory operator will receive due to its tax status.

\(c\) In the event fee is considered appropriate, the contracting
officer shall establish the type of fee arrangement in accordance with
this subsection.

\(1\) The amount of fee may be established as total available fee with a
base fee portion and a performance fee portion. Base fee, if any, shall
be an amount in recognition of the risk of financial liability assumed
by the contractor and shall not exceed the cost risk associated with
those liabilities or the amount calculated in accordance with 48 CFR
970.1504-1-5, whichever is less. The total available fee, excepting any
base fee, shall normally be associated with performance at or above the
target level of performance as defined by the contract. If performance
in either of the two general work categories appropriate for
laboratories (science/technology and support) is rated at less than the
target level of performance, the total amount of the available fee shall
be subject to downward adjustment. Such downward adjustment shall be
subject to the terms of the clause at 48 CFR 970.5215-3, Conditional
Payment of Fee, Profit, and Other Incentives --- Facility Management
Contracts, if contained in the contract.

\[68 FR 68771, Dec. 10, 2003\]

\(2\) The amount of fee may be established as a fixed fee in recognition
of the risk of financial liability to be assumed by the contractor, with
such fixed fee amount not exceeding the cost risk associated with the
liabilities assumed or the amount of fee calculated in accordance with
48 CFR 970.1504-1-5, whichever is less.

\(3\) If the fixed fee or total available fee exceeds 75% of the fee
that would be calculated per 48 CFR 970.1504-1-5 or 48 CFR 970.1504-1-9;
or if a fee arrangement other than one of those set forth in paragraphs
(c) (1) or (2) of this subsection is considered appropriate, the
approval of the Procurement Executive, or designee, shall be obtained
prior to its use.

\(4\) Fee, if any, as well as the type of fee arrangement, will normally
be established for the life of the contract. It will be established at
time of award, as part of the extend/compete decision, at the time of
option exercise, or at such other time as the parties can mutually reach
agreement, e.g., negotiations. Such agreement shall require the approval
of the Procurement Executive, or designee.

\(5\) Fee established for longer than one year shall be subject to
adjustment in the event of a significant change (greater than ±10% or a
lesser amount if appropriate) to the budget or work scope.

\(6\) Retained earnings (reserves) shall be identified and a plan for
their use and disposition developed.

\(7\) The use of retained earnings as a result of performance of
laboratory management and operation may be restricted if the operator is
an educational institution.

**970.1504-1-4 Types of contracts and fee arrangements.**

\(a\) Contract types and fee arrangements suitable for management and
operating contracts may include cost, cost-plus-fixed-fee,
cost-plus-award-fee, cost-plus-incentive-fee, fixed-price incentive,
firm-fixed-price or any combination thereof (see 48 CFR 16.1). In
accordance with 48 CFR 970.1504-1-2(b)(1), the fee arrangement chosen
for each work element should reflect the financial risk for project
failure that contractors are willing to accept. Contracting officials
shall structure each contract and the elements of the work in such a
manner that the risk is manageable and, therefore, assumable by the
contractor.

\(b\) Consistent with the concept of a performance-based management
contract, those contract types which incentivize performance and cost
control are preferred over a cost-plus-fixed-fee arrangement.
Accordingly, a cost-plus-fixed-fee contract in instances other than
those set forth in 48 CFR 970.1504-1-3(c)(2) may only be used when
approved in advance by the Procurement Executive, or designee.

\(c\) A cost-plus-award-fee contract is generally the appropriate
contract type for a management and operating contract.

\(1\) Where work cannot be adequately defined to the point that a fixed
price contract is acceptable, the attainment of acquisition objectives
generally will be enhanced by using a cost-plus-award-fee contract or
other incentive fee arrangement to effectively motivate the contractor
to superior performance and to provide the Department with flexibility
to evaluate actual performance and the conditions under which it was
achieved.

\(2\) The construct of fee for a cost-plus-award-fee management and
operating contract is that total available fee will equal a base fee
amount and a performance fee amount. The total available fee amount
including the performance fee amount the contractor may earn, in whole
or in part during performance, shall be established annually (or as
otherwise agreed to by the parties and approved by the Procurement
Executive, or designee), in an amount sufficient to motivate performance
excellence.

\(3\) However, consistent with concepts of performance-based
contracting, it is Departmental policy to place fee at risk based on
performance. Accordingly, a base fee amount will be available only when
approved in advance by the Procurement Executive, or designee, except as
permitted in 48 CFR 970.1504-1-3(c)(1). Any base fee amount shall be
fixed, expressed as a percent of the total available fee at inception of
the contract, and shall not exceed that percent during the life of the
contract.

\(4\) The performance fee amount may consist of an objective fee
component and a subjective fee component. Objective performance
measures, when appropriately applied, provide greater incentives for
superior performance than do subjective performance measures and should
be used to the maximum extent appropriate. Subjective measures should be
used when it is not feasible to devise effective predetermined objective
measures applicable to cost, technical performance, or schedule for
particular work elements.

\(d\) Consistent with performance-based contracting concepts,
performance objectives and measures related to performance fee should be
as clearly defined as possible and, where feasible, expressed in terms
of desired performance results or outcomes. Specific measures for
determining performance achievement should be used. The contract should
identify the amount and allocation of fee to each performance result or
outcome.

\(e\) Because the nature and complexity of the work performed under a
management and operating contract may be varied, opportunities may exist
to utilize multiple contract types and fee arrangements. Consistent with
paragraph (a) of this subsection and 48 CFR 16.1, the contracting
officer should apply that contract type or fee arrangement most
appropriate to the work component. However, multiple contract types or
fee arrangements:

\(1\) Must conform to the requirements of 48 CFR part 915 and 48 CFR
parts 15 and 16, and

\(2\) Where appropriate to the type, must be supported by:

\(i\) Negotiated costs subject to the requirements of the Truth in
Negotiations Act,

\(ii\) A pre-negotiation memorandum, and

\(iii\) A plan describing how each contract type or fee arrangement will
be administered.

\(f\) Cost reduction incentives are addressed in the clause at 48 CFR
970.5215-4, Cost Reduction. This clause provides for incentives for
quantifiable cost reductions associated with contractor proposed changes
to a design, process, or method that has an established cost, technical,
and schedule baseline, is defined, and is subject to a formal control
procedure. The clause is to be included in management and operating
contracts as appropriate. Proposed changes must be: Initiated by the
contractor, innovative, applied to a specific project or program, and
not otherwise included in an incentive under the contract. Such cost
reduction incentives do not constitute fee and are not subject to
statutory or regulatory fee limitations; however, they are subject to
all appropriate requirements set forth in this subpart.

\(g\) Operations and field offices shall take the lead in developing and
implementing the most appropriate pricing arrangement or cost reduction
incentive for the requirements. Pricing arrangements which provide
incentives for performance and cost control are preferred over those
that do not. The operations and field offices are to ensure that the
necessary resources and infrastructure exist within both the
contractor\'s and government\'s organizations to prepare, evaluate, and
administer the pricing arrangement or cost reduction incentive prior to
its implementation.

**970.1504-1-5 Solicitation provision and contract clauses.**

\(a\) The Department\'s fee policy recognizes that fee is remuneration
to contractors for the entrepreneurial function of organizing and
managing resources, the use of their resources (including capital
resources), and, as appropriate, their assumption of the risk that some
incurred costs (operating and capital) may not be reimbursed.

\(b\) Use of a purely cost-based structured approach for determining fee
objectives and amounts for DOE management and operating contracts is
inappropriate considering the limited level of contractor cost, capital
goods, and operating capital outlays for performance of such contracts.
Instead of being solely cost-based, the desirable approach calls for a
structure that allows evaluation of the following eight significant
factors, as outlined in order of importance, and the assignment of
appropriate fee values (subject to the limitations on fixed fee in 48
CFR 970.1504-1-6):

\(1\) The presence or absence of financial risk, including the type and
terms of the contract;

\(2\) The relative difficulty of work, including specific performance
objectives, environment, safety and health concerns, and the technical
and administrative knowledge, and skill necessary for work
accomplishment and experience;

\(3\) Management risk relating to performance, including:

\(i\) Composite risk and complexity of principal work tasks required to
do the job;

\(ii\) Labor intensity of the job;

\(iii\) Special control problems; and

\(iv\) Advance planning, forecasting and other such requirements;

\(4\) Degree and amount of contract work required to be performed by and
with the contractor\'s own resources, as compared to the nature and
degree of subcontracting and the relative complexity of subcontracted
efforts, subcontractor management and integration;

\(5\) Size and operation (number of locations, plants, differing
operations, etc.);

\(6\) Influence of alternative investment opportunities available to the
contractor (i.e., the extent to which undertaking a task for the
Government displaces a contractor\'s opportunity to make a profit with
the same staff and equipment in some other field of activity);

\(7\) Benefits which may accrue to the contractor from gaining
experience and knowledge of how to do something, from establishing or
enhancing a reputation, or from having the opportunity to hold or expand
a staff whose loyalties are primarily to the contractor; and

\(8\) Other special considerations, including support of Government
programs such as those relating to small and minority business
subcontracting, energy conservation, etc.

\(c\) (1) The contracting officer shall insert the clause at 48 CFR
970.5215-3, Conditional Payment of Fee, Profit, and Other Incentives --
Facility Management Contracts, in all DOE management and operating
contracts and other contracts determined by the Procurement Executive,
or designee.

\(2\) The contracting officer shall include the clause with its
Alternate I in contracts that do not contain the clause at 48 CFR
952.204-2, Security.

\(3\) The contracting officer shall include the clause with its
Alternate II in contracts that are awarded on a cost-plus-award-fee
basis. The contracting officer should consider including the clause with
its Alternate II in contracts that are awarded on a multiple fee basis
if the cost-plus-award-fee portion of the contract is significant.

\[68 FR 68771, Dec. 10, 2003\]

**970.1504-1-6 Calculating fixed fee.**

\(a\) In recognition of the complexities of the fee determination
process, and to assist in promoting a reasonable degree of consistency
and uniformity in its application, the following fee schedules set forth
the maximum amounts of fee that contracting activities are allowed to
award for a particular fixed fee transaction calculated annually.

\(b\) Fee schedules representing the maximum allowable annual fixed fee
available under management and operating contracts have been established
for the following management and operating contract efforts:

\(1\) Production;

\(2\) Research and Development; and

\(3\) Environmental Management.

\(c\) The schedules are:

  ----------------- ------------------------ ------------------------ -----------------
  **PRODUCTION                                                        
  EFFORTS                                                             
  SCHEDULE**                                                          

  FEE BASE          FEE DOLLARS              FEE (PERCENT)            INCR. (PERCENT)
  (DOLLARS)                                                           

  Up to \$1 Million ......................   ......................   7.66

  1,000,000         \$76,580                 7.66                     6.78

  3,000,000         212,236                  7.07                     6.07

  5,000,000         333,670                  6.67                     4.90

  10,000,000        578,726                  5.79                     4.24

  15,000,000        790,962                  5.27                     3.71

  25,000,000        1,161,828                4.65                     3.35

  40,000,000        1,663,974                4.16                     2.92

  60,000,000        2,247,076                3.75                     2.57

  80,000,000        2,761,256                3.45                     2.34

  100,000,000       3,229,488                3.23                     1.45

  150,000,000       3,952,622                2.64                     1.12

  200,000,000       4,510,562                2.26                     0.61

  300,000,000       5,117,732                1.71                     0.53

  400,000,000       5,647,228                1.41                     0.45

  500,000,000       6,097,956                1.22                     ......

  Over              6,097,956                ......                   0.45
  \$500,000,000                                                       
  ----------------- ------------------------ ------------------------ -----------------

  ----------------- ------------------------ ------------------------ -----------------
  **RESEARCH AND                                                      
  DEVELOPMENT                                                         
  EFFORTS                                                             
  SCHEDULE**                                                          

  FEE BASE          FEE DOLLARS              FEE (PERCENT)            INCR. (PERCENT)
  (DOLLARS)                                                           

  Up to \$1 Million ......................   ......................   8.42

  1,000,000         \$84,238                 8.42                     7.00

  3,000,000         224,270                  7.48                     6.84

  5,000,000         361,020                  7.22                     6.21

  10,000,000        671,716                  6.72                     5.71

  15,000,000        957,250                  6.38                     4.85

  25,000,000        1,441,892                5.77                     4.22

  40,000,000        2,075,318                5.19                     3.69

  60,000,000        2,813,768                4.69                     3.27

  80,000,000        3,467,980                4.33                     2.69

  100,000,000       4,006,228                4.01                     1.69

  150,000,000       4,850,796                3.23                     1.14

  200,000,000       5,420,770                2.71                     0.66

  300,000,000       6,083,734                2.03                     0.58

  400,000,000       6,667,930                1.67                     0.50

  500,000,000       7,172,264                1.43                     ......

  Over              7,172,264                ......                   0.50
  \$500,000,000                                                       
  ----------------- ------------------------ ------------------------ -----------------

  ----------------- ------------------------ ------------------------ -----------------
  **ENVIRONMENTAL                                                     
  MANAGEMENT                                                          
  EFFORTS                                                             
  SCHEDULE**                                                          

  FEE BASE          FEE DOLLARS              FEE (PERCENT)            INCR. (PERCENT)
  (DOLLARS)                                                           

  Up to \$1 Million ......................   ......................   7.33

  1,000,000         \$73,298                 7.33                     6.49

  3,000,000         203,120                  6.77                     5.95

  5,000,000         322,118                  6.44                     5.40

  10,000,000        592,348                  5.92                     4.83

  15,000,000        833,654                  5.56                     4.03

  25,000,000        1,236,340                4.95                     3.44

  40,000,000        1,752,960                4.38                     3.29

  60,000,000        2,411,890                4.02                     3.10

  80,000,000        3,032,844                3.79                     2.49

  100,000,000       3,530,679                3.53                     1.90

  150,000,000       4,479,366                2.99                     1.48

  200,000,000       5,2197924                2.61                     1.12

  300,000,000       6,337,250                2.11                     0.88

  400,000,000       7,219,046                1.80                     0.75

  500,000,000       7,972,396                1.59                     0.58

  750,000,000       9,423,463                1.26                     0.55

  1,000,000,000     10,786,788               1.08                     .....

  Over \$1 Billion  10,786,788               .....                    0.55
  ----------------- ------------------------ ------------------------ -----------------

**970.1504-1-7 Fee Base.**

\(a\) The fee base is an estimate of necessary allowable costs, with
some exclusions. It is used in the fee schedules to determine the
maximum annual fee for a fixed fee contract. That portion of the fee
base that represents the cost of the Production, Research and
Development, or Environmental Management work to be performed, shall be
exclusive of the cost of source and special nuclear materials; estimated
costs of land, buildings and facilities whether to be leased, purchased
or constructed; depreciation of Government facilities; and any estimate
of effort for which a separate fee is to be negotiated.

\(b\) Such portion of the fee base, in addition to the adjustments in
paragraph (a) of this subsection, shall exclude:

\(1\) Any part of the estimated cost of capital equipment (other than
special equipment) which the contractor procures by subcontract or other
similar costs which is of such magnitude or nature as to distort the
technical and management effort actually required of the contractor;

\(2\) At least 20% of the estimated cost or price of subcontracts and
other major contractor procurements;

\(3\) Up to 100% of the estimated cost or price of subcontracts and
other major contractor procurements if they are of a magnitude or nature
as to distort the technical and management effort actually required of
the contractor;

\(4\) Special equipment as defined in 48 CFR 970.1504-1-8;

\(5\) Estimated cost of Government-furnished property, services and
equipment;

\(6\) All estimates of costs not directly incurred by or reimbursed to
the operating contractor;

\(7\) Estimates of home office or corporate general and administrative
expenses that shall be reimbursed through the contract;

\(8\) Estimates of any independent research and development cost or bid
and proposal expenses that may be approved under the contract;

\(9\) Any cost of work funded with uncosted balances previously included
in a fee base of this or any other contract performed by the contractor;

\(10\) Cost of rework attributable to the contractor; and

\(11\) State taxes.

\(c\) In calculating the annual fee amounts associated with the
Production, Research and Development, or Environmental Management work
to be performed, the fee base is to be allocated to the category
reflecting the work to be performed and the appropriate fee schedule
utilized.

\(d\) The portion of the fee base associated with the Production,
Research and Development, or Environmental Management work to be
performed and the associated schedules in this part are not intended to
reflect the portion of the fee base or related compensation for unusual
architect-engineer, construction services, or special equipment provided
by the management and operating contractor. Architect-engineer and
construction services are normally covered by special agreements based
on the policies applying to architect-engineer or construction
contracts. Fees paid for such services shall be calculated using the
provisions of 48 CFR 91504-1-5 relating to architect-engineer or
construction fees and shall be in addition to the operating fees
calculated for the Production, Research and Development, or
Environmental Management work to be performed. Special equipment
purchases shall be addressed in accordance with the provisions of 48 CFR
970.1504-1-8 relating to special equipment.

\(e\) No schedule set forth in 48 CFR 915.404-4-71-5 or 48 CFR
970.1504-1-6 shall be used more than once in the determination of the
fee amount for an annual period, unless prior approval of the
Procurement Executive, or designee, is obtained.

**970.1504-1-8 Special equipment purchases.**

\(a\) Special equipment is sometimes procured in conjunction with
management and operating contracts. When a contractor procures special
equipment, the DOE negotiating official shall determine separate fees
for the equipment which shall not exceed the maximum fee allowable as
established using the schedule in 48 CFR 915.404-4-71-5(h).

\(b\) In determining appropriate fees, factors such as complexity of
equipment, ratio of procurement transactions to volume of equipment to
be purchased and completeness of services should be considered. Where
possible, the reasonableness of the fees should be checked by their
relationship to actual costs of comparable procurement services.

\(c\) For purposes of this subsection, special equipment is equipment
for which the purchase price is of such a magnitude compared to the cost
of installation as to distort the amount of technical direction and
management effort required of the contractor. Special equipment is of a
nature that requires less management attention. When a contractor
procures special equipment, the DOE negotiating official shall determine
separate fees for the equipment using the schedule in 48 CFR
915.404-4-71-5(h). The determination of specific items of equipment in
this category requires application of judgment and careful study of the
circumstances involved in each project. This category of equipment would
generally include:

\(1\) Major items of prefabricated process or research equipment; and

\(2\) Major items of preassembled equipment such as packaged boilers,
generators, machine tools, and large electrical equipment. In some
cases, it would also include special apparatus or devices such as
reactor vessels and reactor charging machines.

**970.1504-1-9 Special considerations: Cost-plus-award-fee.**

\(a\) When a management and operating contract is to be awarded on a
cost-plus-award-fee basis, several special considerations are
appropriate.

\(b\) All annual performance incentives identified under these contracts
are funded from the annual total available fee, which consists of a base
fee amount (which may be zero) and a performance fee amount (which
typically will consist of an incentive fee component for objective
performance requirements, an award fee component for subjective
performance requirements, or both).

\(c\) The annual total available fee for the contract shall equal the
product of the fee(s) that would have been calculated for an annual
fixed fee contract and the classification factor(s) most appropriate for
the facility/task. If more than one fee schedule is applicable to the
contract, the annual total available fee shall be the sum of the
available fees derived proportionately from each fee schedule;
consideration of significant factors applicable to each fee schedule;
and application of a Classification Factor(s) most appropriate for the
work.

\(d\) Classification Factors applied to each Facility/Task Category are:

  ----------------------------------- -----------------------------------
  Facility/Task Category              Classification Factor

  A                                   3.0

  B                                   2.5

  C                                   2.0

  D                                   1.25
  ----------------------------------- -----------------------------------

\(e\) The contracting officer shall select the Facility/Task Category
after considering the following:

\(1\) Facility/Task Category A. The main focus of effort performed is
related to:

\(i\) The manufacture, assembly, retrieval, disassembly, or disposal of
nuclear weapons with explosive potential;

\(ii\) The physical cleanup, processing, handling, or storage of nuclear
radioactive or toxic chemicals with consideration given to the degree
the nature of the work advances state of the art technologies in
cleanup, processing or storage operations and/or the inherent difficulty
or risk of the work is significantly demanding when compared to similar
industrial/DOE settings (i.e., nuclear energy processing, industrial
environmental cleanup);

\(iii\) Construction of facilities such as nuclear reactors, atomic
particle accelerators, or complex laboratories or industrial units
especially designed for handling radioactive materials;

\(iv\) Research and development directly supporting paragraphs
(e)(1)(i), (ii), or (iii) of this subsection and not conducted in a
laboratory, or

\(v\) As designated by the Procurement Executive, or designee.
(Classification factor 3.0)

\(2\) Facility/Task Category B. The main focus of effort performed is
related to:

\(i\) The safeguarding and maintenance of nuclear weapons or nuclear
material;

\(ii\) The manufacture or assembly of nuclear components;

\(iii\) The physical cleanup, processing, handling, or storage of
nuclear radioactive or toxic chemicals, or other substances which pose a
significant threat to the environment or the health and safety of
workers or the public, if the nature of the work uses state of the art
technologies or applications in such operations and/or the inherent
difficulty or risk of the work is more demanding than that found in
similar industrial/DOE settings (i.e., nuclear energy, chemical or
petroleum processing, industrial environmental cleanup);

\(iv\) The detailed planning necessary for the assembly/disassembly of
nuclear weapons/components;

\(v\) Construction of facilities involving operations requiring a high
degree of design layout or process control;

\(vi\) Research and development directly supporting paragraphs
(e)(2)(i), (ii), (iii), (iv) or (v) of this subsection and not conducted
in a laboratory; or

\(vii\) As designated by the Procurement Executive, or designee.
(Classification factor 2.5)

\(3\) Facility/Task Category C. The main focus of effort performed is
related to:

\(i\) The physical cleanup, processing, or storage of nuclear
radioactive or toxic chemicals if the nature of the work uses routine
technologies in cleanup, processing or storage operations and/or the
inherent difficulty or risk of the work is similar to that found in
similar industrial/DOE settings (i.e., nuclear energy, chemical
processing, industrial environmental cleanup);

\(ii\) Plant and facility maintenance;

\(iii\) Plant and facility security (other than the safeguarding of
nuclear weapons and material);

\(iv\) Construction of facilities involving operations requiring normal
processes and operations; general or administrative service buildings;
or routine infrastructure requirements;

\(v\) Research and development directly supporting paragraphs (e)(3)(i),
(ii), (iii) or (iv) of this subsection and not conducted in a
laboratory; or

\(vi\) As designated by the Procurement Executive, or designee.
(Classification factor 2.0)

\(4\) Facility/Task Category D. The main focus of the effort performed
is research and development conducted at a laboratory. (Classification
factor 1.25)

\(f\) Where the Procurement Executive, or designee, has approved a base
fee, the Classification Factors shall be reduced, as approved by the
Procurement Executive, or designee.

\(g\) Any risks which are indemnified by the Government (for example, by
the Price-Anderson Act) will not be considered as risk to the
contractor.

\(h\) All management and operating contracts awarded on a
cost-plus-award-fee basis shall set forth in the contract, or the
Performance Evaluation and Measurement Plan(s) required by the contract
clause at 48 CFR 970.5215-1, Total Available Fee: Base Fee Amount and
Performance Fee Amount, a site specific method of rating the
contractor\'s performance of the contract requirements and a method of
fee determination tied to the method of rating.

\(i\) Prior approval of the Procurement Executive, or designee, is
required for an annual total available fee amount exceeding the
guidelines in paragraph (c) of this subsection.

\(j\) DOE Operations/Field Office Managers must ensure that all
important areas of contract performance are specified in the contract or
Performance Evaluation and Measurement Plan(s), even if such areas are
not assigned specific weights or percentages of available fee.

**970.1504-1-10 Special considerations: Fee limitations.**

In situations where the objective performance incentives are of unusual
difficulty or where the successful completion of the performance
incentives would provide extraordinary value to the Government, fees in
excess of those allowed under 48 CFR 970.1504-1-5 and 48 CFR
970.1504-1-9 may be allowed with the approval of the Procurement
Executive, or designee. Requests to allow fees in excess of those
provided under other provisions of this fee policy must be accompanied
by a written justification with detailed supporting rationale as to how
the specific circumstances satisfy the two criteria listed in this
subsection.

**970.1504-1-11 Documentation.**

The contracting officer shall tailor the documentation of the
determination of fee prenegotiation objective based on 48 CFR 15.406-1,
Prenegotiation objectives, and the determination of the negotiated fee
in accordance with 48 CFR 15.406-3, Documenting the negotiation. The
contracting officer shall include as part of the documentation: the
rationale for the allocation of cost and the assignment of Facility/Task
Categories; a discussion of the calculations described in 48 CFR
970.1504-1-5; and discussion of any other relevant provision of this
subsection.

**970.1504-2 Price negotiation.**

\(a\) Management and operating contract prices (fee) and DOE obligations
to support contract performance shall be governed by:

\(1\) The level of activity authorized and the amount of funds
appropriated for DOE approved programs by specific program legislation;

\(2\) Congressional budget and reporting limitations;

\(3\) The amount of funds apportioned to DOE;

\(4\) The amount of obligational authority allotted to program officials
and Approved Funding Program limitations; and

\(5\) The amount of funds actually available to the DOE operating
activity as determined in accordance with applicable financial
regulations and directives.

\(b\) Funds shall be obligated and made available by contract provision
or modification after the funds become available for obligation for
payment to support performance of DOE approved projects, tasks, work
authorizations, or services.

\(c\) Contractor expenditures shall be limited to the overall amount of
funds available and obligated on the contract. As prescribed at 48 CFR
970.3270(b), the clause at 48 CFR 970.5232-4, Obligation of Funds, is
used for this purpose.

**970.1504-3 Documentation.**

**970.1504-3-1 Cost or pricing data.**

\(a\) The certification requirements of 48 CFR 15.406-2 are not applied
to DOE cost-reimbursement management and operating contracts.

\(b\) The contracting officer shall ensure that management and operating
contractors and their subcontractors obtain cost or pricing data prior
to the award of a negotiated subcontract or modification of a
subcontract in accordance with 48 CFR 15.406-2, and incorporate
appropriate contract provisions similar to those set forth at 48 CFR
52.215-10 and 48 CFR 52.215-11 that provide for the reduction of a
negotiated subcontract price by any significant amount that the
subcontract price was increased because of the submission of defective
cost or pricing data by a subcontractor at any tier.

\(c\) The clauses at 48 CFR 52.215-12 and 48 CFR 52.215-13 shall be
included in management and operating contracts.

**970.1504-4 Special cost or pricing areas.**

**970.1504-4-1 \[Removed and Reserved\].**

**970.1504-4-2 \[Removed and Reserved\].**

**970.1504-4-3 \[Removed and Reserved\].**

**970.1504-5 Solicitation provision contract clauses.**

\(a\) The contracting officer shall insert the clause at 48 CFR
970.5215-1, Total Available Fee: Base Fee Amount and Performance Fee
Amount, in management and operating contracts, and other contracts
determined by the Procurement Executive, or designee, that include
cost-plus-award-fee arrangements.

\(1\) The contracting officer shall include the clause with its
Alternate I when the award fee cycle consists of two or more evaluation
periods.

\(2\) The contracting officer shall include the clause with its
Alternate II when the award fee cycle consists of one evaluation period.

\(3\) The contracting officer shall include the clause with its
Alternate III when the DOE Operations/Field Office Manager, or designee,
requires the contractor to submit a self-assessment.

\(4\) The contracting officer shall include the clause with its
Alternate IV when the DOE Operations/Field Office Manager, or designee,
permits the contractor to submit a self-assessment at the contractor\'s
option.

\(b\) (1) The contracting officer shall insert the clause at 48 CFR
970.5215-3, Conditional Payment of Fee, Profit, and Other Incentives --
Facility Management Contracts, in all DOE management and operating
contracts and other contracts determined by the Procurement Executive,
or designee.

\(2\) The contracting officer shall include the clause with its
Alternate I in contracts that do not contain the clause at 48 CFR
952.204-2, Security.

\(3\) The contracting officer shall include the clause with its
Alternate II in contracts that are awarded on a cost-plus-award-fee
basis. The contracting officer should consider including the clause with
its Alternate II in contracts that are awarded on a multiple fee basis
if the cost-plus-award-fee portion of the contract is significant.

\(c\) The contracting officer shall insert the clause at 48 CFR
970.5215-4, Cost Reduction, in management and operating contracts, and
other contracts determined by the Procurement Executive, or designee, if
cost savings programs are contemplated.

\(d\) The Contracting officer shall insert the provision at 48 CFR
970.5215-5, Limitation on Fee, in solicitations for management and
operating contracts, and other contracts determined by the Procurement
Executive, or designee.

**Subpart 970.17 Special Contracting Methods**

**970.1706 Management and operating contracts.**

**970.1706-1 Award, renewal, and extension.**

\(a\) Contract term. Effective work performance under a management and
operating contract is facilitated by the use of a relatively long
contract term of up to ten (10) years. Accordingly, management and
operating contracts shall provide for a basic contract term not to
exceed five (5) years and may include an option(s) to extend the term
for additional periods; provided, that no one option period exceeds five
(5) years in duration and the total term of the contract, including any
options exercised, does not exceed ten (10) years. The specific term of
the base period and of any options periods shall be determined at the
time of the authorization to compete or extend the contract. The term
\"option\" as used in this subpart means a unilateral right in the
contract by which the Government can extend the term of the contract.
Accordingly, except as may be provided for through the inclusion of an
option(s) in the contract to extend the term, any extension to continue
the contract with the incumbent contractor beyond its term shall only
occur when such extension can be justified under one of the statutory
authorities identified in 48 CFR 6.302 and when authorized by the Head
of the Agency.

\(b\) Exercise of option. As part of the review required by 48 CFR
17.605(b), the contracting officer shall assess whether competing the
contract will produce a more advantageous offer than exercising the
option. The incumbent contractor\'s past performance under the contract,
the extent to which performance-based management contract provisions are
present, or can be negotiated into, the contract, and the impact of a
change in a contractor on the Department\'s discharge of its programs
are considerations that shall be addressed in the contracting officer\'s
decision that the exercise of the option is in the Government\'s best
interest. The contracting officer\'s decision shall be approved by the
Procurement Executive and the cognizant Assistant Secretary(s).

\(c\) Conditional Authorization of Non-competitive Extension Made
Pursuant to Authority Under CICA. Authorization to extend a management
and operating contract by the Head of the Agency shall be considered
conditional upon the successful negotiation of the contract to be
extended in accordance with the Department\'s negotiation objectives.
The Head of the Contracting Activity shall advise the Procurement
Executive no later than 6 months after receipt of the conditional
authorization as to whether the Department\'s objectives will be met
and, if not, the contracting activity\'s plans for competing the
requirement.

**970.1706-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 52.217-9,
Option to Extend the Term of the Contract, in all management and
operating contracts when the inclusion of an option is appropriate.

**970.1707 Work for others.**

**970.1707-1 Scope.**

Pursuant to Section 33 of the Atomic Energy Act of 1954, as amended (42
U.S.C. 2053), DOE is authorized to make its facilities available to
other Federal and non-Federal entities (sponsors) for the conduct of
certain research and development and training activities. Pursuant to
the Economy Act of 1932, as amended (31 U.S.C. 1535), or other
applicable authority, other Federal entities may request DOE to conduct
work. DOE has implemented these and other statutory authorities and
requirements in its Work for Others Program. DOE's internal procedures
governing the Work for Others Program are described in DOE Order 481.1C,
WORK FOR OTHERS (NON-DEPARTMENT OF ENERGY FUNDED WORK).

**970.1707-2 Purpose.**

The purpose of DOE's Work for Others Program is to:

\(a\) Provide access for non-DOE entities to highly specialized or
unique DOE facilities, services, or technical expertise, when private
facilities are inadequate;

\(b\) Increase research and development interactions among DOE's
management and operating contractors and industry in order to transfer
DOE technologies to industry for further development or
commercialization;

\(c\) Maintain facility core competencies;

\(d\) Enhance the science and technology capabilities at DOE facilities;
and,

\(e\) Provide assistance to other Federal agencies and non-Federal
entities in accomplishing goals that may otherwise be unattainable and
to avoid the possible duplication of effort at Federal facilities.

**970.1707-3 Terms governing work for others.**

\(a\) DOE's internal review and approval procedural requirements for
individual work for others agreements are set forth in DOE Order 481.1C
(as supplemented by DOE Manual 481.1-1A for agreements with non-Federal
entities), which may be amended from time to time, and such other
guidance as may be issued by DOE. Contracting officers must ensure that
the contractor's procedures for its operations are consistent with DOE's
procedural requirements.

\(b\) A contractor may perform work for other Federal or non-Federal
sponsors only if:

\(1\) The contractor is authorized by contract clause to perform such
work;

\(2\) The work is not directly funded by DOE appropriations and is fully
reimbursed by the sponsor;

\(3\) The DOE Contracting Officer or authorized designee approves the
work in advance; and,

\(4\) The work is performed in accordance with DOE policies, procedures
and directives applicable to the contract.

\(c\) Contracting officers must ensure that the requesting Federal
entity certifies that:

\(1\) The interagency agreement with DOE complies with the Economy Act
of 1932 (31 U.S.C. 1535) and other applicable statutory authorities and
48 CFR 6.002, which prohibits the use of an Interagency Agreement for
the purpose of avoiding the competition requirements of the Federal
Acquisition Regulation; and,

\(2\) The work to be performed will not place the DOE contractor in
direct competition with the domestic private sector.

**970.1707-4 Contract clause.**

Insert the clause at 970.5217-1, Work for Others Program (Non-DOE Funded
Work), in

any contract that may involve work under the Work for Others Program,
pursuant to 970.1707-3(b).

69 FR 75001, December 15, 2004

**Subpart 970.19 Small, Small Disadvantaged and Women-Owned Small
Business Concerns**

**970.1907 Subcontracting with Small Business, Small Disadvantaged
Business and Woman-Owned Small Business Concerns.**

**970.1907-1 Subcontracting plan requirements.**

Pursuant to the clause at 48 CFR 52.219-9, Small Business Subcontracting
Plan, which is required for all management and operating contracts, each
management and operating contract shall include a subcontracting plan
which is effective for the term of the contract. Goals for the contract
shall be negotiated annually when revised funding levels are determined.
The plan should include provisions for revising the goals or any other
sections of the plan. Such revisions shall be in writing, approved by
the contracting officer, and shall be specifically made a material part
of the contract.

**Subpart 970.22 Application of Labor Policies**

**970.2200 Scope of subpart.**

This subpart prescribes Department of Energy labor policies pertaining
to the award and administration of management and operating contracts.

**970.2201 Basic labor policies.**

**970.2201-1 Labor relations.**

**970.2201-1-1 General.**

Contracting officers shall, in appropriate circumstances, follow the
guidance in 48 CFR Subpart 22.1, as supplemented in this section, in the
award and administration of management and operating contracts.

**970.2201-1-2 Policies.**

\(a\) The extent of Government ownership of the nation\'s energy plant
and materials, and the overriding concerns of national defense and
security, impose special conditions on personnel and labor relations in
the energy program. Such special conditions include the need for
continuity of vital operations at DOE installations; retention by DOE of
absolute authority on all questions of security; and DOE review of labor
expenses under management and operating contracts as a part of its
responsibility for assuring judicious expenditure of public funds. It is
the intent of DOE that personnel and labor policies throughout the
energy program reflect the best experience of American industry in
aiming to achieve the type of stable labor-management relations that are
essential to the proper development of the energy program. The following
enunciates the principles upon which the DOE policy is based:

\(1\) Employment standards. (i) Management and operating contractors are
expected to bring experienced, proven personnel from their private
operations to staff key positions on the contract work and to recruit
other well-qualified personnel as needed. Such personnel should be
employed and treated during employment without discrimination by reason
of race, color, religion, sex, or national origin. Contractors shall be
required to take affirmative action to achieve these objectives.

\(ii\) The job qualifications and suitability of prospective employees
should be established by the contractor prior to employment by careful
personnel investigations. Such personnel investigations should include,
as appropriate: A credit check; verification of high school
degree/diploma or degree/diploma granted by an institution of higher
learning within the last 5 years; contacts with listed personal
references; contacts with listed employers for the past 3 years
(excluding employment of less than 60 days duration, part-time
employments, and craft/union employments); and local law enforcement
checks when such checks are not prohibited by State or local law or
regulation, and when the individual resides in the jurisdiction where
the contractor is located. When a DOE access authorization (security
clearance) will be required, the aforementioned pre-employment checks
must be conducted and the applicant\'s job qualifications and
suitability must be established before a request is made to the DOE to
process the applicant for access authorization. Evidence must be
furnished to the DOE with the applicant\'s security forms that specify:
The date each check was conducted, the entity contacted that provided
information concerning the applicant, a synopsis of the information
provided as a result of each contact, and a statement that all
information available has been reviewed and favorably adjudicated in
accordance with the contractor\'s personnel policies. When an applicant
is being hired specifically for a position which requires a DOE access
authorization, the applicant shall not be placed in that position prior
to the access authorization being granted by the DOE unless an exception
has been obtained from the Head of the Contracting Activity, or
designee. If an applicant is placed in that position prior to access
authorization being granted by the DOE, the applicant may not be
afforded access to classified matter or special nuclear materials (in
categories requiring access authorization) until the DOE notifies the
employer that access authorization has been granted. Management and
operating contractors and other contractors operating DOE facilities may
include the requirements set forth in this subsection in subcontracts
(appropriately modified to identify the parties) wherein subcontract
employees will be required to hold DOE access authorization in order to
perform on-site duties, such as protective force operations.

\(iii\) Consistent with the policies set forth in this subpart, the
contractor is responsible for maintaining satisfactory standards for
employee qualifications, performance, conduct, and business ethics under
its own personnel policies.

\(2\) Security. On all matters of security at its facilities, DOE
retains absolute authority and neither the regulations and policies
pertaining to security, nor their administration, are matters for
collective bargaining between the contractor\'s management and labor.
Insofar as DOE security regulations affect the collective bargaining
process, the security policies and regulations will be made known to
both parties. To the fullest extent feasible, DOE will consult with
representatives of the contractor\'s management and labor when
formulating security regulations and policies that may affect the
collective bargaining process.

\(3\) Wages, salaries, and employee benefits. (i) Wages, salaries, and
employee benefits shall be administered in a manner designated to adapt
the normal practices and conditions of industry or institutions of
higher education to the contract work, and to provide for appropriate
review by DOE. Area practices, valid patterns, and well-established
commercial or academic practices of the contractors, as appropriate,
form the criteria for the establishment and adjustment of compensation
schedules.

\(ii\) The aspects of wages, hours, and working conditions which are the
substance of collective bargaining in normal organized industries will
be left to the orderly processes of negotiation and agreement between
DOE contractor management and employee representatives with maximum
possible freedom from Government interference.

\(4\) Employee relations. The handling of employee relations on contract
work, including such matters as the conduct and discipline of the work
force and the handling of employee grievances, is part of the normal
management responsibility of the contractor.

\(5\) Collective bargaining. (i) DOE review of collective bargaining
practices will be premised on the view that management\'s trusteeship
for the operation of the Government facilities includes the duty to
adopt practices which are fundamental to the friendly adjustment of
disputes, and which experience has shown, promote orderly collective
bargaining relationships. Practices inconsistent with this view may be
objected to if not found to be otherwise clearly warranted.

\(ii\) Consistent with the policy of assuring continuity of operation of
vital facilities, all collective bargaining agreements at DOE-owned
facilities should provide that grievances and disputes involving the
interpretation or application of the agreement will be settled without
resorting to strike, lockout, or other interruption of normal
operations. For this purpose, each collective bargaining agreement
entered into during the period of performance of this contract should
provide an effective grievance procedure with arbitration as its final
step, unless the parties mutually agree upon some other method of
assuring continuity of operation for the term of the collective
bargaining agreement.

\(iii\) DOE expects its management and operating contractors and the
unions representing the contractor\'s employees to cooperate fully with
the Federal Mediation and Conciliation Service.

\(6\) Personnel training. DOE encourages and supports personnel training
programs aimed at improving work efficiency or developing needed skills
which are not otherwise obtainable.

\(7\) Working conditions. Accident, fire, health, and occupational
hazards associated with DOE activities will be held to a practical
minimum level and controlled in the interest of maintenance of health
and prevention of accidents. Subject to DOE control, contractors shall
be required to maintain comprehensive continuous preventive and
protective programs appropriate to the particular activities throughout
all operations. Appropriate financial protection in case of occupational
disability must be provided to employees on DOE projects.

\(b\) Title to payroll and associated records under certain contracts
for the management and operation of DOE facilities, and for necessary
miscellaneous construction incidental to the function of these
facilities, shall vest in the Government. Such records are to be
disposed of in accordance with DOE directions. For such contracts, the
Solicitor of Labor has granted a tolerance from the Department of Labor
Regulations to omit from the prescribed labor clauses the requirement
for the retention of payrolls and associated records for a period of
three years after completion of the contract. Under this tolerance, the
records retention requirements for all labor clauses in the contract and
the Fair Labor Standards Act are satisfied by disposal of such records
in accordance with applicable DOE directives.

**970.2201-1-3 Contract clause.**

In addition to the clause at 48 CFR 52.222-1, Notice to the Government
of Labor Disputes, the contracting officer shall insert the clause at
970.5222-1, Collective Bargaining Agreements-Management and Operating
Contracts, in all management and operating contracts.

**970.2201-2 Overtime management.**

**970.2201-2-1 Policy.**

Contracting officers shall ensure that management and operating
contractors manage overtime cost effectively and use overtime only when
necessary to ensure performance of work under the contract.

**970.2201-2-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5222-2,
Overtime Management, in management and operating contracts.

**970.2204 Labor standards for contracts involving construction.**

**970.2204-1 Statutory and regulatory requirements.**

**970.2204-1-1 Administrative controls and criteria for application of
the Davis-Bacon Act in operational or maintenance activities.**

\(a\) Particular work items falling within one or more of the following
criteria normally will be classified as noncovered by the Davis-Bacon
Act, hereinafter referred to in this section as the \"Act.\"

\(1\) Individual work items estimated to cost \$2,000 or less. The total
dollar amount of the management and operating contract is not a factor
to be considered and bears no relation to individual work items
classified as construction, alteration and/or repair, including painting
and decorating. However, no item of work, the cost of which is estimated
to be in excess of \$2,000, shall be artificially divided into portions
less than \$2,000 for the purpose of avoiding the application of the
Act.

\(2\) Work and services that are a part of operational and maintenance
activities or which, being very closely and directly involved therewith,
are more in the nature of operational activities than construction,
alteration, and/or repair work. This includes work and services which
would involve a material risk to continuity of operations, to life or
property, or to DOE operating requirements, if performed by persons
other than the contractor\'s regular production and maintenance forces.
However, any decision that contracts or work items are noncovered for
these reasons must be made by the Head of the Contracting Activity
without power of delegation.

\(3\) Assembly, modification, setup, installation, replacement, removal,
rearrangement, connection, testing, adjustment, and calibration of
machinery and equipment. However, it is noted that these activities are
covered if they are part of, or would be a logical part of, the
construction of a facility, or if construction-type work which is not
\"incidental\" to the overall effort is involved.

\(4\) Experimental development of equipment, processes, or devices,
including assembly, fitting, installation, testing, reworking, and
disassembly. This refers to equipment, processes, and devices which are
assembled for the purpose of conducting a test or experiment. The design
may be only conceptual in character, and professional personnel who are
responsible for the experiment participate in the assembly. Specifically
excluded from the category of experimental development are buildings and
building utility services, as distinguished from temporary connections
thereto. Also specifically excluded from this category is equipment to
be used for continuous testing (e.g., a machine to be continuously used
for testing the tensile strength of structural members).

\(5\) Experimental work in connection with peaceful uses of nuclear
energy. This refers to equipment, processes and devices which are
assembled and/or set in place and interconnected for the purpose of
conducting a test or experiment. The nature of the test or experiment is
such that professional personnel who are responsible for the test or
experiment and/or data to be derived therefrom must, by necessity,
participate in the assembly and interconnections. Specifically excluded
from experimental work are buildings, building utility services,
structural changes, drilling, tunneling, excavation, and back-filling
work which can be performed according to customary drawings and
specifications, and utility services of modifications to utility
services, as distinguished from temporary connections thereto. Work in
this category may be performed in mines or in other locations
specifically constructed for tests or experiments.

\(6\) Emergency work to combat the effects of fire, flood, earthquake,
equipment failure, accident, or other casualties, and to restart the
operational activity following the casualty. Work which is not directly
related to restarting the activity or which involves rebuilding or
replacement of a structure, structural components, or equipment is
excluded from this category.

\(7\) Decontamination, including washing, scrubbing, and scraping to
remove contamination; removal of contaminated soil or other material;
and painting or other resurfacing, provided that such painting or
resurfacing is an integral part of the decontamination activity and
performed by the employees of the contractors performing the
decontamination.

\(8\) Burial of contaminated soil waste or contained liquid; however,
initial preparatory work readying the burial ground for use (e.g., any
grading or excavating that is a part of initial site preparation,
fencing, drilling wells for continued monitoring of contamination,
construction of guard or other office space) is covered. Work performed
subsequent to burial which involves the placement of concrete or other
like activity is also covered.

\(b\) The classification of a contract as a contract for operational or
maintenance activities does not necessarily mean that all work and
activities at the contract location are classifiable as outside coverage
of the Act since it may be necessary to separate work which should be
classified as covered. Therefore, the Heads of Contracting Activities
shall establish and maintain controls for the careful scrutiny of
proposed work assignments under such contracts to assure that:

\(1\) Contractors whose contracts do not contemplate the performance of
work covered by the Act with the contractor\'s own forces are neither
asked nor authorized to perform work within the scope of the Act. If the
actual work assignments do involve covered work, the contract should be
modified to include applicable provisions of the Act.

\(2\) Where covered work is performed by a contractor whose contract
contains provisions required by the Act, such work is performed as
required by law and the contract. After the contractor has been
informed, as provided in paragraph (b)(3) of this subsection, that
certain work is covered, the responsibilities of the Head of the
Contracting Activity to assure compliance is the same as it would be if
the work were being performed under a separate construction contract.

\(3\) Controls provided for above include consideration by the Head of
the Contracting Activity and the contractor, before work is begun or
contracted out, of the relation of the Act to the annual programming of
work; the contractor\'s work orders; and work contracted out in excess
of \$2,000. The Head of the Contracting Activity may, if consistent with
DOE\'s responsibilities as described in this subsection, prescribe from
time to time classes of work as to which applicability or
nonapplicability of the Act is clear, for which the Head of the
Contracting Activity will require no further DOE determination on
coverage in advance of the work. For all work, controls to be
established by the Head of the Contracting Activity should provide for
notification to the contractor before work is begun as to whether such
work is covered. The Head of the Contracting Activity is responsible for
submitting to the Wage and Hours Division, Employment Standards
Administration, Department of Labor, Washington, D.C. 20210, all DOE
requests for project area or installation wage determinations, or
individual determinations, or extensions or modification thereto.
Requests for such determinations shall be made on Standard Form 308, at
least 30 calendar days before they are required for use in advertising
for bids or requests for proposals.

\(c\) Experimental installations. Within DOE programs, a variety of
experiments are conducted involving materials, fuels, coolants, and
processing equipment. Certain types of situations where tests and
experiments have presented coverage questions are described as follows:

\(1\) Set-ups of device and/or processes. The proving out of
investigative findings and theories of a scientific and technical nature
may require the set-up of various devices and/or processes at an early,
pre-prototype stage of development. These may range from laboratory
bench size to much larger set-ups. As a rule, these set-ups are made
within established facilities (normally laboratories), required utility
connections are made to services provided as a part of the basic
facilities, and the activity as a whole falls within the functional
purpose of the facility. Such set-ups are generally not covered.
However, the erection of structures which are public works is covered if
construction type work, other than incidental work, is involved.
Preparatory work for the set-up requiring structural changes or
modifications of basic utility services, as distinguished from
connections thereto, is covered. The following are illustrations of
noncovered set-ups of devices and/or processes:

\(i\) Assembly of piping and equipment within existing \"hot cell\"
facilities for proving out a conceptual design of a chemical processing
unit;

\(ii\) Assembly of equipment, including adaptation and modification
thereof, in existing \"hot cell\" facilities to prove out a conceptual
design for remotely controlled machining equipment;

\(iii\) Assembly of the first graphite pile in a stadium at Stagg Field
in Chicago;

\(iv\) Assembly of materials and equipment for particular aspects of the
direct current thermonuclear experiments to explore feasibility and to
study other ramifications of the concept of high energy injection and to
collect data thereon.

\(2\) Loops. Many experiments are carried on in equipment assemblies,
called loops, in which liquids or gases are circulated under monitored
and controlled conditions. For purposes of determining coverage under
the Act, loops may be classed as loop facilities or as loop set-ups.
Both of these classes of loops can include in-reactor loops and
out-of-reactor loops. In differentiating between clearly identified loop
set-ups and loop facilities, an area exists in which there have been
some questions of coverage, such as certain loops at the Material Test
Reactor and at Engineering Test Reactor and the Idaho National
Engineering and Environmental Laboratory site. Upon clarification of
this area, further illustrations will be added. In the meantime, the
differentiation between loop set-ups and loop facilities must be made on
a case-by-case basis, taking into account the total criteria set forth
in this subpart.

\(i\) Loop set-ups. The assembly, erection, modification, and
disassembly of a loop set-up is noncovered. A noncontroversial example
of a loop set-up is one which is assembled in a laboratory, e.g., Oak
Ridge National Laboratory, Argonne National Laboratory, or Lawrence
Livermore National Laboratory, for a particular test and thereafter
disassembled. However, preparatory work for a loop set-up requiring
structural changes or modifications of basic utility services as
distinguished from connections thereto is covered, as are material and
equipment that are installed for a loop set-up which is a permanent part
of the facility or which is use for a succession of experimental
programs.

\(ii\) Loop facilities. A loop facility differs from a loop set-up in
that it is of a more permanent character. It is usually, but not always,
of greater size. It normally involves the building or modification of a
structure. Sometimes it is installed as a part of construction of the
facility. It may be designed for use in a succession of experimental
programs over a longer period of time. Examples of loop facilities are
the in-reactor \"K\" loops at Hanford and the large Aircraft Nuclear
Propulsion loop at the Idaho National Engineering and Environmental
Laboratory site. The on-site assembly and erection of such loop
facilities are covered. However, once a loop facility is completed and
becomes operational, the criteria set forth in this paragraph for
operational and maintenance activities apply.

\(3\) Reactor component experiments. Other experiments are carried on by
insertion of experimental components within reactor systems without the
use of a loop assembly. An example of reactor facilities erected for
such experimental purposes are the special power excursion test reactors
(SPETRs) at the National Reactor Test Site which are designed for
studying reactor behavior and performance characteristics of certain
reactor components. Such a facility may consist of a reactor vessel,
pressurizing tank, coolant loops, pumps, heat exchangers, and other
auxiliary equipment as needed. The facility also may include sufficient
shielding to permit work on the reactor to proceed following a short
period of power interruption, and buildings as needed to house the
reactor and its auxiliary equipment. The erection and on-site assembly
of such a reactor facility is covered, but the components whose
characteristics are under study are excluded from coverage. To
illustrate, one of the SPETRs planned for studies of nuclear reactor
safety is designed to accommodate various internal fuel and control
assemblies. The internal structure of the pressure vessel is designed so
that cores of different shapes and sizes may be placed in the vessel for
investigation, or the entire internal structure may be easily removed
and replaced by a structure which will accept a different core design.
Similarly, the control rod assembly is arranged to provide for
flexibility in the removal of instrument leads and experimental
assemblies from within the core.

\(4\) Tests or experiments in peaceful uses of nuclear energy. These
tests or experiments are varied in nature and some are only in a
planning stage. They consist of one or more nuclear or nonnuclear
detonations for the purposes of acquiring data. The data can include
seismic effects, radiation effects, amount of heat generated, amount of
material moved and so forth. Some of these tests are conducted in
existing mines, while others are conducted in facilities specifically
constructed for the tests or experiments. In general, all work which can
be performed in accordance with customary drawings and specifications,
as well as other work in connection with preparation of facilities is
treated as covered work. Such work includes tunneling, drilling,
excavation and back-filling, erection of buildings or other structures,
and installation of utilities. The installation of the nonnuclear
material or nuclear device to be detonated, and the instrumentation and
connection between such material or device and the instrumentation are
treated as noncovered work.

\(5\) Tests or experiments in military uses of nuclear energy. As in
970.2204-1-1(c)(4), these tests or experiments can be varied in nature.
However, under this category it is intended to include only detonation
of nonnuclear material or nuclear devices. The material or devices can
be detonated either underground, at ground level, or above the ground.
These tests or experiments have been conducted in, on, or in connection
with facilities specifically constructed for such tests or experiments.
As in tests or experiments in peaceful uses of nuclear energy, all work
which can be performed in accord with customary drawings and
specifications, as well as other work in connection with preparation of
facilities are treated as covered work. Such work includes building
towers or similar structures, tunneling, drilling, excavation and
backfilling, erection of buildings or other structures, and installation
of utilities. The installation of the nonnuclear material or nuclear
devices and instrumentation are treated as noncovered work.

\(d\) Construction site contiguous to an established manufacturing
facility. As DOE-owned property sometimes encompasses several thousand
acres of real estate, a number of separate facilities may be located in
areas contiguous to each other on the same property. These facilities
may be built over a period of years, and established manufacturing
activities may be regularly carried on at one site at the same time that
construction of another facility is underway at another site. On
occasion, the regular manufacturing activities of the operating
contractor at the first site may include the manufacture, assembly, and
reconditioning of components and equipment which in other industries
would normally be done in established commercial plants. While the
manufacture of components and equipment in the manufacturing plant is
noncovered, the installation of any such manufactured items on a
construction job is covered.

**970.2208 Equal employment opportunity.**

The equal employment opportunity provisions of 48 CFR subpart 22.8 and
subpart 922.8 of this chapter, including Executive Order 11246 and 41
CFR part 60, are applicable to DOE management and operating contracts.

**970.2210 Service Contract Act.**

The Service Contract Act of 1965 is not applicable to contracts for the
management and operation of DOE facilities, but it is applicable to
subcontracts under such contracts (see 48 CFR 970.5244-1).

**970.2270 Unemployment compensation.**

\(a\) Each state has its own unemployment compensation system to provide
payments to workers who become unemployed involuntarily and through no
fault of their own. Funds are provided for unemployment compensation
benefits through a payroll tax on employers. Most DOE contractors are
subject to the unemployment compensation tax laws of the states in which
they are located. It is the policy to assure, both in the negotiation
and administration of cost-reimbursement type contracts, that economical
and practical arrangements are made and practiced with respect to
unemployment compensation.

\(b\) Contract exempt from state laws. (1) Some contractors are exempt
from state unemployment compensation laws, usually on grounds that they
are nonprofit organizations or subdivisions of State governments. Most
states, however, permit such employers to elect unemployment
compensation coverage on a voluntary basis. Under such circumstances,
all existing or prospective cost-reimbursement contractors shall be
encouraged to provide unemployment compensation coverage or equivalent
substitutes.

\(2\) It is also DOE policy that, prior to the award or extension of a
management and operating contract, exempt contractors or prospective
contractors shall be required to submit to the contracting officer a
statement that they will either elect coverage or provide equivalent
substitutes for unemployment compensation, or in the alternative, submit
evidence that it is impractical to do so. If any exempt contractor or
prospective contractor submits that it is impractical to elect coverage
or to provide an equivalent substitute, appropriate Office of Contract
and Resource Management, within the Headquarters procurement
organization, staff shall review that position prior to recommending an
award or extension of the contract. If there are substantial reasons for
not electing coverage or for not providing equivalent substitutes, a
contract may be awarded or extended. Headquarters\' staff review and
recommendation shall be based on such factors as:

\(i\) The specific provisions of the unemployment compensation law of
the State;

\(ii\) The extent to which the establishment of special conditions on
DOE work may have an adverse effect on the contractor\'s general
policies and operating costs in its private operations;

\(iii\) The numerical relationship between the contractor\'s private
work force and its employees performing only work for DOE;

\(iv\) The contractor\'s record with respect to work force stability and
the general outlook with respect to future work force stability;

\(v\) In a replacement contractor situation, whether or not the prior
contractor had coverage or suitable substitutes; and

\(vi\) The particular labor relations implications involved.

**Subpart 970.23 Environment, Conservation, Occupational Safety and Drug
Free Work Place**

**970.2303 Hazardous materials identification and material safety.**

**970.2303-1 General.**

\(a\) The Department of Energy regulates the nuclear safety of its major
facilities under its own statutory authority derived from the Atomic
Energy Act and other legislation. The Department also regulates, under
certain specific conditions, the use by its contractors of radioactive
materials and ionizing radiation producing machines.

\(b\) The inclusion of environmental, safety and health clauses in DOE
contracts shall be made by the contracting officer in accordance with
this subpart and in consultation with appropriate environmental, safety
and health program management personnel.

(c)(1) For DOE management and operating contracts and other contracts
designated by the Procurement Executive, or designee, the clause
entitled "Conditional Payment of Fee, Profit, and Other Incentives -
Facility Management Contracts" implements the requirements of section
234C of the Atomic Energy Act for the use of a contract clause that
provides for an appropriate reduction in the fee or amount paid to the
contractor under the contract in the event of a violation by the
contractor or any contractor employee of any Departmental regulation
relating to the enforcement of worker safety and health concerns. The
clause, in part, provides for reductions in the amount of fee, profit,
or share of cost savings that is otherwise earned by the contractor for
performance failures relating to worker safety and health violations
under the Department's regulations.

(2)(i) Section 234C of the Atomic Energy Act states that DOE shall
either pursue civil penalties (implemented at 10 CFR part 851) for a
violation under section 234C of the Atomic Energy Act (42 U.S.C. 2282c)
or a contract fee reduction, but not both.

\(ii\) The contracting officer must coordinate with the Office of Price
Anderson Enforcement within the Office of the Assistant Secretary for
Environment, Safety and Health (or with any designated successor office)
before pursuing contract fee reduction in the event of a violation by
the contractor or any contractor employee of any Departmental regulation
relating to the enforcement of worker safety and health concerns.

\[68 FR 68771, Dec. 10, 2003\]

**970.2303-2 Contract clauses.**

\(a\) When work under management and operating contracts and
subcontracts thereunder is to be performed at a facility where DOE will
exercise its statutory authority to enforce occupational safety and
health standards applicable to the working conditions of the contractor
and subcontractor employees at such facility, the clause at 48 CFR
970.5223-1, Integration of Environment, Safety and Health into Work
Planning and Execution, shall be used in such contract or subcontract
and made applicable to the work if conditions in paragraphs (a)(1)
through (3) of this section, are satisfied:

\(1\) DOE work is segregated from the contractor\'s or subcontractor\'s
other work;

\(2\) The operation is of sufficient size to support its own safety and
health services; and

\(3\) The facility is government-owned, or leased by or for the account
of the government.

\(b\) The clause set forth in 952.223-72, Radiation Protection and
Nuclear Criticality, shall be included in those contracts or
subcontracts for, and be made applicable to, work to be performed at a
facility where DOE does not elect to assert its statutory authority to
enforce occupational safety and health standards applicable to the
working conditions of contractor and subcontractor employees, but does
need to enforce radiological safety and health standards pursuant to
provisions of the contract or subcontract rather than by reliance upon
Nuclear Regulatory Commission licensing requirements (including
agreements with States under section 274 of the Atomic Energy Act).

**970.2304 Use of recovered/recycled materials.**

**970.2304-1 General.**

The policy for the acquisition and use of EPA designated items, i.e.,
items with

recovered/recycled content, is set forth at 48 CFR (FAR) 23.4 - Use of
Recovered Materials as supplemented by 48 CFR (DEAR) 923.405(e) and by
48 CFR (FAR) 23.704, Application to Government-owned or leased
facilities, and 48 CFR (FAR) 23.705, Contract clause.

**970.2304-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR (FAR)
52.223-10, Waste

Reduction Program, and the clause at 48 CFR (DEAR) 970.5223-2,
Affirmative Procurement

Program, in contracts for the management of DOE facilities, including
national laboratories. If the contractor subcontracts a significant
portion of the operation of the Government facility which includes the
acquisition of items designated in EPA\'s Comprehensive Procurement
Guidelines, the subcontract shall contain a clause substantially the
same as that at 48 CFR (DEAR) 970.5223-2. The EPA Comprehensive
Procurement Guidelines identify products which Federal agencies and
their contractors are to procure with recycled content pursuant to 40
CFR 247. Examples of such subcontracts would be operation of the
facility supply function, construction or remodeling at the facility, or
maintenance of the facility motor vehicle fleet. In

situations in which the facility management contractor can reasonably
determine the amount of products with recovered/recycled content to be
acquired under the subcontract, the facility management contractor is
not required to flow down the reporting requirement of the 970.5223-2

clause. Instead, the facility management contractor may include the
subcontract quantities in its own report and include an agreement in the
subcontract that such products will be acquired with

recovered/recycled content and that the subcontractor will advise if it
is unable to procure such products with recovered/recycled content
because the product is not available:

\(a\) competitively within a reasonable time;

\(b\) at a reasonable price; or,

\(c\) within the performance requirements.

(68 FR 6359, Feb. 7, 2003)

**970.2305 Workplace substance abuse programs --- management and
operating contracts.**

**970.2305-1 General.**

\(a\) The Department of Energy (DOE), as part of its overall
responsibilities to protect the environment, maintain public health and
safety, and safeguard the national security, has established policies,
criteria, and procedures for management and operating contractors to
develop and implement programs that help maintain a workplace free from
the use of illegal drugs.

\(b\) Regulations concerning DOE\'s management and operating contractor
workplace substance abuse programs are promulgated at 10 CFR part 707,
Workplace Substance Abuse Programs at DOE Sites.

**970.2305-2 Applicability.**

\(a\) All management and operating contracts awarded under the authority
of the Atomic Energy Act of 1954, as amended, are required to implement
the policies, criteria, and procedures of 10 CFR part 707, Workplace
Substance Abuse Programs at DOE Sites.

\(b\) Except as otherwise provided for in this subpart, management and
operating contracts subject to the requirements of 10 CFR part 707 and
this subpart shall not be subject to 48 CFR 23.5, Drug Free Workplace.

**970.2305-3 Definitions.**

Terms and words relating to DOE\'s Workplace Substance Abuse Programs,
as used in this section, have the same meanings assigned to such terms
and words in 10 CFR part 707.

**970.2305-4 Solicitation provision and contract clause.**

\(a\) The contracting officer shall insert the provision at 48 CFR
970.5223-3, Agreement Regarding Workplace Substance Abuse Programs at
DOE Sites, in solicitations for the management and operation of
DOE-owned or-controlled sites operated under the authority of the Atomic
Energy Act of 1954, as amended.

\(b\) The contracting officer shall insert the clause at 970.5223-4,
Workplace Substance Abuse Programs at DOE Sites, in contracts for the
management and operation of DOE-owned or-controlled sites operated under
the authority of the Atomic Energy Act of 1954, as amended.

**970.2306 Suspension of payments, termination of contract, and
debarment and suspension actions.**

\(a\) The contracting officer shall comply with the procedures of 48 CFR
23.506 regarding the suspension of contract payments, the termination of
the contract for default, and the debarment and suspension of a
contractor relative to failure to comply with the clause at 48 CFR
970.5223-4, Workplace Substance Abuse Programs at DOE Sites.

\(b\) For purposes of 10 CFR part 707, the specific causes for
suspension of contract payments, termination of the contract for
default, and debarment and suspension of the contractor are:

\(1\) The contractor fails to either comply with the requirements of 10
CFR part 707 or perform in a manner consistent with its approved
program;

\(2\) The contractor has failed to comply with the terms of the
provision at 48 CFR 970.5223-3, Agreement Regarding Workplace Substance
Abuse Programs at DOE Sites;

\(3\) Such a number of contractor employees having been convicted of
violations of criminal drug statutes for violations occurring on the
DOE-owned or-controlled site, as to indicate that the contractor has
failed to make a good faith effort to provide a drug free workplace; or,

\(4\) The offeror has submitted a false certification in response to the
provision at 48 CFR 970.5223-3, Agreement Regarding Workplace Substance
Abuse Programs at DOE Sites.

**970.2307 Contracting for Environmentally Preferable and
Energy-Efficient Products and Services.**

**970.2307-1 Motor vehicle fleet operations.**

Executive Order 13149 provides that the Federal motor vehicle fleet will
serve as an example and provide a leadership role in the reduction of
petroleum consumption through improvements in fleet fuel efficiency and
the use of alternative fuel vehicles and alternative fuels. Part 2 of
the Order establishes goals for Federal Government fleet efficiency and
requires the development of strategies to accomplish the goals. Section
403 of the Order provides that environmentally preferable motor vehicle
products, including biobased motor vehicle products, will be used in the
maintenance of Federal fleet motor vehicles when these products are
reasonably available and meet vehicle manufacturers' recommended
performance standards. Environmentally preferable motor vehicle products
are among the products contained in the Comprehensive Procurement
Guidelines list of products with recycled content to be procured
pursuant to the clause at 48 CFR 970.5223-2. Section 505 of Executive
Order 13149 requires that the goals and requirements of the Order be
included in all management contracts which include Federal motor vehicle
fleet operations. Section 506 of Executive Order 13149 exempts military
tactical, law enforcement, and emergency vehicles from the requirements
of the order.

**970.2307-2 Contract clause.**

Include the clause at 970.5223-5, DOE Motor Vehicle Fleet Fuel
Efficiency, in all management contracts providing for Contractor
management of the motor vehicle fleet.

\[68 FR 52129 Sep 2, 2003\]

**Subpart 970.26 Other Socioeconomic Programs**

**970.2670 Implementation of Section 3021 of the Energy Policy Act of
1992.**

**970.2670-1 Requirements.**

The goal requirements of section 3021 of the Energy Policy Act of 1992,
and the attendant reporting requirements shall be included in the
subcontracting plan for the management and operating contract and shall
apply to the annual dollar obligations specifically provided to the
contractor for competitively awarded subcontracts that fulfill Energy
Policy Act requirements.

**970.2671 Diversity.**

**970.2671-1 Policy**.

Department of Energy policy recognizes that full utilization of the
talents and capabilities of a diverse work force is critical to the
achievement of its mission. The principal goals of this policy are to
foster and enhance partnerships with small, small disadvantaged,
women-owned small businesses, and educational institutions; to match
capabilities with existing opportunities; to track small, small
disadvantaged, women-owned small business, and educational activity; and
to develop innovative strategies to increase opportunities.

**970.2671-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5226-1,
Diversity Plan, in all management and operating contracts.

**970.2672 Implementation of Section 3161 of the National Defense
Authorization Act for Fiscal Year 1993.**

**970.2672-1 Policy.**

Consistent with the objectives of section 3161 of the National Defense
Authorization Act for Fiscal Year 1993, *42 U.S.C. 7274h,* in instances
where the Department of Energy has determined that a change in work
force at a DOE Defense Nuclear Facility is necessary, DOE contractors
and subcontractors at DOE Defense Nuclear Facilities shall accomplish
work force restructuring or displacement so as to mitigate social and
economic impacts and in a manner consistent with any DOE work force
restructuring plan in effect for the facility or site. In all cases,
mitigation shall include the requirement for hiring preferences for
employees whose positions have been terminated (except for termination
for cause) as a result of changes to the work force at the facility due
to restructuring accomplished under the requirements of section 3161.
Where applicable, contractors may take additional actions to mitigate
consistent with the Department\'s Workforce Restructuring Plan for the
facility or site.

**970.2672-2 Requirements.**

The requirements set forth in 48 CFR 926.71, Implementation of Section
3161 of the National Defense Authorization Act for Fiscal Year 1993, for
contractors and subcontractors to provide a hiring preference for
employees under Department of Energy contracts whose employment in
positions at a Department of Energy Defense Nuclear Facility is
terminated (except for a termination for cause) applies to management
and operating contracts.

**970.2672-3 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5226-2,
Workforce Restructuring Under Section 3161 of the National Defense
Authorization Act for Fiscal Year 1993, in contracts for the management
and operation of Department of Energy Defense Nuclear Facilities and, as
appropriate, in other contracts that include site management
responsibilities at a Department of Energy Defense Nuclear Facility.

**970.2673 Regional partnerships.**

**970.2673-1 Policy.**

It is the policy of the DOE to be a constructive partner in the
geographic region in which DOE conducts its business. The basic elements
of this policy include:

\(a\) Recognizing the diverse interests of the region and its
stakeholders,

\(b\) Engaging regional stakeholders in issues and concerns of mutual
interest, and

\(c\) Recognizing that giving back to the community is a worthwhile
business practice.

**970.2673-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5226-3,
Community Commitment, in all management and operating contracts.

**Subpart 970.27 Patents, Data, and Copyrights**

**970.2701 General.**

**970.2701-1 Applicability.**

This subpart applies to negotiation of patent rights, rights in
technical data provisions and other related provisions for the
Department of Energy contracts for the management and operation of
DOE\'s major sites or facilities, including the conduct of research and
development and nuclear weapons production, and contracts which involve
major, long-term or continuing activities conducted at a DOE site.

970.2702 Patent related clauses.

**970.2702-1 Authorization and consent.**

Contracting officers must use the clause at 970.5227-4, Authorization
and Consent, instead of the clause at 48 CFR 52.227-1.

**970.2702-2 Notice and assistance regarding patent and copyright
infringement.**

Contracting officers must use the clause at 970.5227-5, Notice and
Assistance Regarding Patent and Copyright Infringement, instead of the
clause at 48 CFR 52.227-2.

**970.2702-3 Patent indemnity.**

\(a\) Contracting officers must use the clause at 970.5227-6, Patent
Indemnity-Subcontracts to assure that subcontracts appropriately address
patent indemnity.

\(b\) Normally, the clause at 48 CFR 52.227-3 would not be appropriate
for an M&O contract; however, if there is a question, such as when the
mission of the contractor involves production, the contracting officer
must consult with local patent counsel and use the clause where
appropriate.

**970.2702-4 Royalties.**

Contracting officers must use the solicitation provision at 970.5227-7,
Royalty Information, and the clause at 970.5227-8, Refund of Royalties
instead of the provision at 48 CFR 52.227-8 and the clause at 48 CFR
52.227-9, respectively.

**970.2702-5 Rights to proposal data.**

Contracting officers must include the clause at 48 CFR 52.227-23, Rights
to Proposal Data, in all solicitations and contracts for the management
and operation of DOE sites and facilities.

**970.2702-6 Notice of right to request patent waiver.**

Contracting officers must include the provision at 970.5227-9 in all
solicitations for contracts for the management and operation of DOE
sites or facilities.

**970.2703 Patent rights.**

**970.2703-1 Purposes of patent rights clauses.**

\(a\) DOE sites and facilities are managed and operated on behalf of the
Department of Energy by a contractor, pursuant to management and
operating contracts that are generally awarded for a five (5) year term,
with the possibility for renewal. Special provisions relating to patent
rights are appropriately incorporated into an M&O contract because of
the unique circumstances and responsibilities of managing and operating
a Government-owned facility, as compared to other federally funded
research and development contracts.

(b)(1) Technology transfer mission clause. In accordance with Public Law
101-189, section 3133(d), DOE may grant technology transfer authority to
M&O contractors operating a DOE facility. Generally, M&O contractors
have the right to elect to retain title to inventions made under the
contract, whether a nonprofit or educational organizations, as a result
of *35 U.S.C. 200* et seq. (Bayh-Dole Act), or a large business, as a
result of a class patent waiver issued pursuant to 10 CFR part 784.
Under such contracts, the M&O contractor assumes responsibilities for
commercializing retained inventions, in accordance with the Technology
Transfer Mission clause provided at 970.5227-3. That clause also governs
such activities as the distribution of royalties earned from inventions
made under the contract and the transfer of patent rights in inventions
made under the contract to successor contractors.

\(2\) If the M&O contractor is a nonprofit organization or small
business firm having technology transfer authority, the following
clauses are inserted into the M&O contract: 970.5227-3 and 970.5227-10.

\(3\) If the M&O contract has technology transfer as a mission and is to
be performed by a for-profit, large business firm that has been granted
an advance class waiver, the following clauses are inserted into the M&O
contract: 970.5227-3 and 970.5227-12. The terms of the clause at
970.5227-12 are subject to modification to conform to the terms of the
class waiver.

\(4\) If the M&O contract does not have a technology transfer mission
and is to be performed by a for-profit, large business firm and does not
have advance class waiver under 10 CFR part 784, the patent rights
clause at 970.5227-11 is inserted into the M&O contract, and the
Technology Transfer Mission clause is inapplicable.

\(5\) If the contractor is an educational institution, a non-profit
organization or a small business firm and is conducting privately funded
technology transfer activities, involving the use of private funds to
conduct licensing and marketing activities related to inventions made
under the contract in accordance with the Bayh-Dole Act, DOE may modify
the patent rights clause (970.5227-10) to address issues such as the
disposition of royalties earned under the privately funded technology
transfer program, the transfer of patent rights to a successor
contractor, allowable cost restrictions concerning privately funded
technology transfer activities, and the Government\'s freedom from any
liability related to licensing under the contractor\'s privately funded
technology transfer program.

\(c\) Contracting officers must consult with DOE patent counsel
assisting the contracting activity or the Assistant General Counsel for
Technology Transfer and Intellectual Property for assistance in
selecting for use in the solicitation, negotiating, or approving
appropriate patent rights clauses for a M&O contract. It may be
appropriate to include more than one patent rights clause in a
solicitation if the successful contractor could, for instance, be either
an educational or a large business. If a large business may be selected
for performance of a contract that will include a technology transfer
clause, the solicitation must include the clause at 970.5227-12 to
reflect the waiver that will likely be granted. If the solicitation
includes more than one patent clause, it must include an explanation of
the circumstances under which the appropriate clause will be used. The
final award must contain only one patent rights clause.

970.2703-2 Patent rights clause provisions for management and operating
contractors.

\(a\) Allocation of Principal Rights: Bayh-Dole provisions. If the
management and operating contractor is an educational institution or
nonprofit organization, the patent rights clause provided at 970.5227-10
must be inserted into the M&O contract. Such entities are beneficiaries
of Bayh-Dole Act, including the paramount right of the contractor to
elect to retain title to inventions conceived or first actually reduced
to practice in performance of work under the contract, except in
DOE-exempted areas of technology or in operation of DOE facilities
primarily dedicated to naval nuclear propulsion or weapons related
programs.

\(b\) Allocation of Principal Rights: Government title. (1) The patent
rights clause provided at 970.5227-11 must be incorporated into the M&O
contract if the contractor is a for-profit, large business firm and the
contract does not have a technology transfer mission or if, without
regard to the type of contractor, the contract is for the operation of a
DOE facility primarily dedicated to naval nuclear propulsion or weapons
related programs. That clause provides for DOE\'s statutory obligation
to take title to inventions conceived or first actually reduced to
practice in the course of or under an M&O contract, and does not
contemplate an advance class waiver of Government rights in inventions,
or participation by the contractor in technology transfer activities.

\(2\) While only in rare circumstances does a for-profit large business
contractor whose contract contains no technology transfer mission
receive rights in or title to inventions made under the contract, the
contractor does have the right to request a license or foreign patent
rights in inventions made under the contract, and may petition for a
waiver of Government rights in identified inventions. The patent rights
clause 970.5227-11 does not include many of the provisions of patent
rights clauses 970.5227-10 and 970.5227-12, related to the filing of
patent applications by the contractor, the granting of rights in
inventions by the contractor to third parties (preference for United
States industry), and conditions allowing the Government to grant
licenses to third parties in inventions retained by the contractor
(march-in rights). Any instrument granting rights in inventions made
under a contract governed by patent rights clause 970.5227-11 must
include these additional provisions within its terms and conditions.

\(c\) Allocation of Principal Rights: Contractor right to elect title
under an advance class waiver. If the M&O contractor is a for-profit,
large business firm and the Government has granted an advance class
waiver of Government rights in inventions made in the course of or under
the M&O contract, under the authority of the Atomic Energy Act of 1954
*(42 U.S.C. 2182)* and the Federal Nonnuclear Energy Act of 1974 *(42
U.S.C. 5908*(c)), the patent rights clause provided at 970.5227-12 must
be inserted into the M&O contract, unless the terms and conditions of
such an approved waiver alter or replace the patent rights clause
provisions pursuant to 10 CFR part 784.

\(d\) Extensions of time-DOE discretion. The patent rights clauses for
M&O contracts require the contractor to take certain actions within
prescribed time periods to comply with the contract and preserve its
rights in inventions. The M&O contractor may request extensions of time
in which to take such actions by submitting written justification to
DOE, and DOE may grant the contractor\'s requests, on a case-by-case
basis. If the time period expired due to negligence by the contractor,
DOE may grant a request for an extension of time upon a showing by the
contractor that corrective procedures are in place to avoid such
negligence in the future. If a contractor is requesting an extension of
time in which to elect to retain title to an invention, DOE may grant
the request if the extension allows the contractor to conduct further
experimentation, market research, or other analysis helpful to determine
contractor interest in electing title to the invention, among other
considerations. Generally, the extensions of time are for periods of
between six (6) months to one (1) year.

\(e\) Facilities license. These include the rights to make, use,
transfer, or otherwise dispose of all articles, materials, products, or
processes embodying inventions or discoveries used or embodied in the
facility regardless of whether or not conceived or first actually
reduced to practice under or in the course of such a contract. The
patent rights clauses, 970.5227-10, 970.5227-11, 970.5227-12, each
contain a provision granting the Government this facilities license.

\(f\) Deletion of classified inventions provision. If DOE determines
that the research, development, demonstration or production work to be
performed during the course of a management and operating contract most
probably will not involve classified subject matter or result in any
inventions that require security classification, DOE patent counsel may
advise the contracting officer to delete the patent rights clause
provision entitled, \"Classified Inventions\" from the M&O contract.

\(g\) Alternate 1-Weapons Related Research or Production. If DOE grants
technology transfer authority to a DOE facility, pursuant to Public Law
101-189, section 3133(d), and the DOE owned facility is involved in
weapons related research and development, or production, then Alternate
1 of the patent rights clauses must be inserted into the M&O contract.
Alternate 1 defines weapons related subject inventions and restricts the
contractor\'s rights with respect to such inventions.

**970.2704 Rights in data.**

**970.2704-1 General.**

\(a\) Rights in data relating to the performance of the contract and to
all facilities are significant in assuring continuity of the management
and operation of DOE facilities. It is crucial in assuring DOE\'s
continuing ability to perform its statutory missions that DOE obtain
rights to all data produced or specifically used by its management and
operating contractors and appropriate subcontractors. In order to obtain
the necessary rights in technical data, DOE contracting officers shall
assure that management and operating contracts contain either the Rights
in Data clause at 48 CFR 970.5227-1, Rights in Data-Facilities, or the
clause at 48 CFR 970.5227-2, Rights in Data-Technology Transfer.
Selection of the appropriate clause is dependent upon whether technology
transfer is a mission of the management and operating contract pursuant
to the National Competitiveness Technology Transfer Act of 1989, Public
Law 101-189, *(15 U.S.C. 3711* et seq., as amended). If technology
transfer is not a mission of the management and operating contract, the
clause at 48 CFR 970.5227-1, Rights in Data-Facilities, shall be used.
In those instances in which technology transfer is a mission of the
contract, the clause at 48 CFR 970.5227-2, Rights in Data-Technology
Transfer, shall be used.

\(b\) Employees of the management and operating contractor may not be
used to assist in the preparation of a proposal or bid for services
which are similar or related to those being performed under the
contract, which are to be performed by the contractor or its parent or
affiliate organization for commercial customers unless the employee has
been separated from work under the DOE contract for such period as the
Head of the Contracting Activity or designee shall have directed.

**970.2704-2 Procedures.**

\(a\) The clauses at 48 CFR 970.5227-1, Rights in Data-Facilities, and
48 CFR 970.5227-2, Rights in Data-Technology Transfer, both provide
generally for Government ownership and for unlimited rights in the
Government for all data first produced in the performance of the
contract and unlimited rights in data specifically used in the
performance of the contract. Both clauses provide that, subject to
patent, security, and other provisions of the contract, the contractor
may use contract data for its private purposes. The contractor, under
either clause, must treat any data furnished by DOE or acquired from
other Government agencies or private entities in the performance of
their contracts in accordance with any restrictive legends contained
therein.

\(b\) Since both clauses secure access to and, if requested, delivery of
technical data used in the performance of the contract, there is
generally no need to use the Additional Technical Data Requirements
clause at 48 CFR 52.227-16 in the management and operating contract.

(c)(1) Paragraph (d) of the clause at 48 CFR 970.5227-1, Rights in
Data-Facilities, and paragraph (f) of the clause at 48 CFR 970.5227-2,
Rights in Data-Technology Transfer, provide for the inclusion in
subcontracts of the Rights in Technical Data-General clause at 48 CFR
52.227-14, with Alternate V, and modified in accordance with DEAR
927.409. Those clauses also provide for the inclusion in appropriate
subcontracts Alternates II, III, and IV to the clause at 48 CFR
52.227-14 with DOE\'s prior approval and the inclusion of the Additional
Technical Data Requirements clause at 48 CFR 52.227-16 in all
subcontracts for research, development, or demonstration and all other
subcontracts having special requirements for the production or delivery
of data. In subcontracts, including subcontracts for related support
services, involving the design or operation of any plants or facilities
or specially designed equipment for such plants or facilities that are
managed or operated by the contractor under its contract with DOE, the
management and operating contractor shall use the Rights in
Data-Facilities clause at 48 CFR 970.5227-1.

\(2\) Where, however, a subcontract is to be awarded by the management
and operating contractor in connection with a program, as discussed at
927.404-70, which provides statutory authority to protect from public
disclosure, data first produced under contracts awarded pursuant to the
program, contracting officers shall ensure that the management and
operating contractor includes in that subcontract the rights in data
clause provided by DOE Patent Counsel, consistent with any accompanying
guidance.

\(3\) Management and operating contractors and higher-tier
subcontractors shall not use their power to award subcontracts as
economic leverage to acquire rights in a subcontractor\'s limited rights
data or restricted computer software for their private use, nor may they
acquire rights in a subcontractor\'s limited rights data or restricted
computer software except through the use of Alternate II or III to the
clause at 48 CFR 52.227-14, respectively, without the prior approval of
DOE Patent Counsel.

(d)(1) Paragraphs (e) and (f) of the clause at 48 CFR 970.5227-1, Rights
in Data-Facilities, and paragraphs (g) and (h) of the clause at 48 CFR
970.5227-2, Rights in Data-Technology Transfer, provide for the
contractor\'s granting a nonexclusive license in any limited rights data
and restricted computer software specifically used in performance of the
contract.

\(2\) In certain instances the objectives of DOE would be frustrated if
the Government did not obtain, at the time of contracting, limited
license rights on behalf of responsible third parties and the
Government, and to limited rights data or restricted computer software
or both necessary for the practice of subject inventions or data first
produced or delivered in the performance of the contract. This situation
may arise in the performance of management and operating contracts and
contracts for the management or operation of a DOE facility or site.
Contracting officers should consult with program officials and Patent
Counsel. No such rights should be obtained from a small business or
non-profit organization, unless similar rights in background inventions
of the small business or non-profit organization have been authorized in
accordance with *35 U.S.C. 202*(f). Where such a background license is
in DOE\'s interest, a provision that provides substantially as Alternate
VI at 48 CFR 952.227-14 should be added to the appropriate clause, 48
CFR 970.5227-1, Rights in Data-Facilities, or 48 CFR 970.5227-2, Rights
in Data-Technology Transfer.

\(e\) The Rights in Data-Technology Transfer clause at 48 CFR 970.5227-2
differs from the clause at 48 CFR 970.5227-1, Rights in Data-Facilities,
in the context of its more detailed treatment of copyright. In
management and operating contracts that have technology transfer as a
mission, the right to assert copyright in data first produced under the
contract will be a valuable right, and commercialization of such data,
including computer software, will assist the management and operating
contractor in advancing the technology transfer mission of the contract.
The clause at 48 CFR 970.5227-2, Rights in Data-Technology Transfer,
provides for DOE approval of DOE\'s taking a limited copyright license
for a period of five years, and, in certain rare cases, specified longer
periods in order to contribute to commercialization of the data.

\(f\) Contracting officers should consult with Patent Counsel to assure
that requirements regarding royalties and conflicts of interest
associated with asserting copyright in data first produced under the
contract are appropriately addressed in the Technology Transfer Mission
clause (48 CFR 970.5227-3) of the management and operating contract.
Where it is not otherwise clear which DOE program funded the development
of a computer software package, such as where the development was funded
out of a contractor\'s overhead account, the DOE program which was the
primary source of funding for the entire contract is deemed to have
administrative responsibility. This issue may arise, among others, in
the decision whether to grant the contractor permission to assert
copyright. See paragraph (e) of the Rights in Data-Technology Transfer
clause at 970.5227-2.

\(g\) In management and operating contracts involving access to
DOE-owned Category C-24 restricted data, as set forth in 10 CFR part
725, DOE has reserved the right to receive reasonable compensation for
the use of its inventions and discoveries, including its related
restricted data and technology. Alternate I to each clause shall be used
where access to Category C-24 restricted data is contemplated in the
performance of a contract.

**970.2704-3 Contract clauses.**

\(a\) The contracting officer shall insert the clause at 48 CFR
970.5227-1, Rights in Data-Facilities, in management and operating
contracts which do not contain the clause at 48 CFR 970.5227-2, Rights
in Data-Technology Transfer. The contracting officer shall include the
clause with its Alternate I in contracts where access to Category C-24
restricted data, as set forth in 10 CFR part 725, is to be provided to
contractors.

\(b\) The contracting officer shall insert the clause at 970.5227-2,
Rights in Data-Technology Transfer, in management and operating
contracts which contain the clause at 970.5227-3, Technology Transfer
Mission. The contracting officer shall include the clause with its
Alternate I in contracts where access to Category C-24 restricted data,
as set forth in 10 CFR part 725, is to be provided to contractors.

**970.2770 Technology Transfer.**

**970.2770-1 General.**

This subpart prescribes policies and procedures for implementing the
National Competitiveness Technology Transfer Act of 1989, Public Law
101-189, *(15 U.S.C. 3711* et seq., as amended). The Act requires that
technology transfer be established as a mission of each Government-owned
laboratory operated under contract by a non-Federal entity. The National
Defense Authorization Act for Fiscal Year 1994 expanded the definition
of \"laboratory\" to include weapon production facilities that are
operated for national security purposes and are engaged in the
production, maintenance, testing, or dismantlement of a nuclear weapon
or its components.

**970.2770-2 Policy.**

All new awards for or extensions of existing DOE laboratory or weapon
production facility management and operating contracts shall have
technology transfer, including authorization to award Cooperative
Research and Development Agreements (CRADAs), as a laboratory or
facility mission under Section 11(a)(1) of the Stevenson-Wydler
Technology Innovation Act of 1980, Public Law 96-480 *(15 U.S.C. 3701*
et seq., as amended). A management and operating contractor for a
facility not deemed to be a laboratory or weapon production facility may
be authorized on a case-by-case basis to support the DOE technology
transfer mission including, but not limited to, participating in CRADAs
awarded by DOE laboratories and weapon production facilities.

**970.2770-3 Technology transfer and patent rights.**

The National Competitiveness Technology Transfer Act of 1989 (NCTTA)
established technology transfer as a mission for Government-owned,
contractor-operated laboratories, including weapons production
facilities, and authorizes those laboratories to negotiate and award
cooperative research and development agreements with public and private
entities for purposes of conducting research and development and
transferring technology to the private sector. In implementing the
NCTTA, DOE has negotiated technology transfer clauses with the
contractors managing and operating its laboratories. Those technology
transfer clauses must be read in concert with the patent rights clause
required by this subpart. Thus, each management and operating contractor
holds title to subject inventions for the benefit of the laboratory or
facility being managed and operated by that contractor.

**970.2770-4 Contract clause.**

\(a\) The contracting officer shall insert the clause at 970.5227-3,
Technology Transfer Mission, in each solicitation for a new or an
extension of an existing laboratory or weapon production facility
management and operating contract.

\(b\) If the contractor is a nonprofit organization or small business
eligible under *35 U.S.C. 200* et seq., to receive title to any
inventions under the contract and proposes to fund at private expense
the maintaining, licensing, and marketing of the inventions, the
contracting officer shall use the basic clause with its Alternate I.

\(c\) If the facility is operated for national security purposes and
engaged in the production, maintenance, testing, or dismantlement of a
nuclear weapon or its components, the contracting officer shall use the
basic clause with its Alternate II.

**Subpart 970.28 Bonds and Insurance**

**970.2803 Insurance.**

**970.2803-1 Workers\' Compensation Insurance.**

\(a\) Policies and requirements. (1) Workers\' compensation insurance
protects employers against liability imposed by workers\' compensation
laws for injury or death to employees arising out of, or in the course
of, their employment. This type of insurance is required by state laws
unless employers have acceptable programs of self-insurance.

\(2\) Special requirements. Certain workers\' compensation laws contain
provisions which result in limiting the protection afforded persons
subject to such laws. The policy with respect to these limitations as
they affect persons employed by management and operating contractors is
set forth as follows:

\(i\) Elective provisions. Some worker\'s compensation laws permit an
employer to elect not to be subject to its provisions. It is DOE policy
to require these contractors to be subject to workers\' compensation
laws in jurisdictions permitting election.

\(ii\) Statutory immunity. Under the provisions of some workers\'
compensation laws, certain types of employers; e.g., nonprofit
educational institutions, are relieved from liability. If a contractor
has a statutory option to accept liability, it is DOE policy to require
the contractor to do so.

\(iii\) Limited medical benefits. Some workers\' compensation laws limit
the liability of the employer for medical care to a maximum dollar
amount or to a specified period of time. In such cases, a contractor\'s
workers\' compensation insurance policy should contain a standard
extrastatutory medical coverage endorsement.

\(iv\) Limits on occupational disease coverage and employers\'
liability. Some workers\' compensation laws do not provide coverage for
all occupational diseases. In such situations, a contractor\'s workers\'
compensation insurance policy should contain voluntary coverage for all
occupational diseases.

\(3\) Contractor \"employees\' benefit plan\" - self-insurers. The
policies and requirements set forth in paragraph (a)(2) of this section
apply where management and operating contractors purchase workers\'
compensation insurance. With respect to self-insured contractors, the
objectives specified in paragraph (a)(2) also shall be met through
primary or excess workers\' compensation and employers\' liability
insurance policy(ies) or an approved combination thereof. \"Employees\"
benefit plans\" which were established in prior years may be continued
to contrast termination at existing benefit levels.

\(b\) Assignment of responsibilities. (1) Office of Contract and
Resource Management, within the Headquarters procurement organization,
other officials, and the Heads of Contracting Activities, consistent
with their delegations of responsibility, shall assure management and
operating contracts are consistent with the policies and requirements of
paragraph (a) of this section.

\(2\) In discharging assigned responsibility, the Heads of Contracting
Activities shall:

\(i\) Periodically review workers\' compensation insurance programs of
management and operating contractors in the light of applicable
workers\' compensation statutes to assure conformance with the
requirements of paragraph (a) of this section.

\(ii\) Evaluate the adequacy of coverage of \"self-insured\" workers\"
compensation programs;

\(iii\) Provide arrangements for the administration of any existing
\"employees\" benefit plans until such plans\" are terminated; and

\(iv\) Submit to the Office of Contract and Resource Management, within
the Headquarters procurement organization, all proposals for the
modification of existing \"employees\' benefit plans.\"

\(3\) The Office of Contract and Resource Management, within the
Headquarters procurement organization, is responsible for approving
management and operating contractor \"employees\' benefit plans.\"

**970.2803-2 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5228-1,
Insurance-Litigation and Claims, in all management and operating
contracts. Paragraphs (h)(3) and (j)(2) of that clause apply to a
nonprofit contractor only to the extent specifically provided in the
individual contract.

**Subpart 970.29 Taxes**

**970.2902 Federal excise taxes.**

**970.2902-1 Exemptions from Federal excise taxes.**

\(a\) The exemption respecting taxes on communication services or
facilities has been held to extend to such services when furnished to
DOE management and operating contractors who pay for such services or
facilities from advances made to them by DOE under their contracts.

\(b\) Where it is considered that a request for an additional exemption
in the performance of a management and operating contract would be
justified, a recommendation that such a request be made should be
forwarded to the Chief Financial Officer, Headquarters.

\(c\) Where tax exemption certificates are required in connection with
the taxes cited in this section, the Head of the Contracting Activity
will supply standard Government forms (SF 1094, U.S. Tax Exemption
Certificate) on request.

**970.2903 State and local taxes.**

**970.2903-1 Applicability of state and local taxes to the government.**

It is DOE policy to secure those immunities or exemptions from state and
local taxes to which it is entitled under the Federal Constitution or
state laws. In carrying out this policy, the Heads of Contracting
Activities shall:

\(a\) Take all necessary steps to preclude payment of any taxes for
which any of the immunities or exemptions cited in this subpart are
available. Advice of Counsel should be sought as to the availability of
such immunities or exemptions;

\(b\) Acquire directly and furnish to contractors as Government
furnished property, equipment, material, or services when, in the
opinion of the Head of the Contracting Activity:

\(1\) Such direct acquisition will result in substantial savings to the
Government, taking into consideration any additional administrative
costs;

\(2\) Such direct acquisition will not have a substantial adverse effect
on the relationship between DOE and its contractor; and

\(3\) Such direct acquisition will not have a substantial adverse effect
on the DOE program or schedules.

**970.2904 Contract clauses.**

**970.2904-1 Management and operating contracts.**

\(a\) Pursuant to 48 CFR 29.401-6(b), the clause at 48 CFR 52.229-10,
State of New Mexico Gross Receipts and Compensating Tax, is applicable
to management and operating contracts that meet the three conditions
stated. The contracting officer shall modify paragraph (b) of the clause
to replace the phrase \"Allowable Cost and Payment clause\" with the
phrase \"Payments and advances.\"

\(b\) Contracting officers shall include the clause at 48 CFR
970.5229-1, State and Local Taxes, in management and operating
contracts.

**Subpart 970.30 Cost Accounting Standards**

**970.3002 CAS program requirements.**

**970.3002-1 Applicability.**

The provisions of 48 CFR part 30 and 48 CFR chapter 99 (FAR Appendix)
shall be followed for management and operating contracts.

**Subpart 970.31Contract Cost Principles and Procedures**

**970.3101-00-70 Scope of subpart.**

\(a\) The Procurement Executive is responsible for developing and
revising the policy and procedures for the determination of allowable
costs reimbursable under a management and operating contract, and for
coordination with other Headquarters\' offices having joint interests.

\(b\) The Head of the Contracting Activity is responsible for following
the policy, principles and standards set forth in this subpart in
establishing the compensation and reimbursement provisions of contracts
and subcontracts and for submission of deviations for Headquarters
consideration and approval.

**970.3101-9 Advance agreements (DOE coverage-paragraph (i)).**

\(i\) At any time, in accordance with the contract terms and conditions,
the contracting officer may pursue an advance agreement in connection
with any cost item under a contract.

**970.3101-10 Cost certification.**

\(a\) Certain contracts require certification of the costs proposed for
final payment purposes. Section 48 CFR 970.4207-03-02 states the
administrative procedures for the certification provisions and the
related contract clause prescription.

\(b\) If unallowable costs are included in final cost settlement
proposals, penalties may be assessed. Section 48 CFR 970.4207-03-02
states the administrative procedures for penalty assessment provisions
and the related clause prescription.

**970.3102-3-70 Home office expenses.**

\(a\) For on-site work, DOE\'s fee for management and operating
contracts, determined under the policy of and calculated per the
procedures in 48 CFR 970.1504-1-3, generally provides adequate
compensation for home or corporate office general and administrative
expenses incurred in the general management of the contractor\'s
business as a whole.

\(1\) DOE recognizes that some Home Office Expenses are incurred for the
benefit of a management and operating contract. DOE has elected to
recognize that benefit through fee due to the difficulty of determining
the dollar value applicable to any management and operating contract.
The difficulty arises because:

\(i\) The general construct of a management and operating contract
results in minimal Home Office involvement in the contract work, and

\(ii\) Conventional Home Office Expense allocation techniques that use
bases such as total operating costs, labor dollars, hours etc., are not
appropriate because they inherently assume significant contractor
investment (in terms of its own resources, such as, labor, material,
overhead, etc.). Contractor investments are minimal under DOE\'s
operating and management contracts. The contracts are totally financed
by DOE advance payments, and DOE provides government-owned facilities,
property, and other needed resources.

\(2\) From time to time, the fee for a management and operating contract
may not be adequate compensation for Home Office Expenses incurred for
the benefit of the contract. An indication that such a case exists is
the need for significant home office support to deal with issues at the
site that occur without the fault or negligence of the contractor, for
example, the need for home office legal support to deal with third
party, environmental, safety, or health issues.

\(3\) In such a case, the contracting officer, after obtaining the
HCA\'s approval, may consider a contractor request for additional
compensation. The contractor may request:

\(i\) Fee in addition to its normal fee (but see 48 CFR
970.1504-1-3(b)(1) if the contract is for the management and operation
of a laboratory); or

\(ii\) Compensation on the basis of actual cost.

\(4\) Because the contract\'s fee provides some compensation for Home
Office Expenses, the contractor\'s request for additional compensation
must always be for an amount less than the Home Office Expenses that are
incurred for the benefit of the management and operating contract.

\(b\) For off-site work, the DOE allows Home Office Expenses under
architect-engineer, supply and research contracts with commercial
contractors performing the work in their own facilities. Home Office
Expenses may, however, be included for reimbursement under such DOE
off-site architect-engineer, supply and research contracts, only to the
extent that they are determined, after careful examination, to be
allowable, reasonable, and properly allocable to the work. Work
performed in a contractor\'s own facilities under a management and
operating or construction contract may likewise be allowed to bear the
properly allocable portion of allowable Home Office Expenses.

**970.3102-05 Application of cost principles.**

**970.3102-05-4 Bonding costs. \[DOE coverage paragraph (d)\]**

\(d\) The allowability of bonding costs shall be determined pursuant to
48 CFR 970.5228-1, Insurance-litigation and claims.

**970.3102-05-6 Compensation for personal services. \[DOE
coverage-paragraphs (a) and (p)\]**

(a)(6) In determining the reasonableness of compensation, the
compensation of each individual contractor employee normally need not be
subjected to review and approval. Generally, the compensation paid
individual employees should be left to the judgment of contractors
subject to the limitations of DOE-approved compensation policies,
programs, classification systems, and schedules, and amounts of money
authorized for wage and salary increases for groups of employees.
However, the contracting officer shall designate a compensation
threshold appropriate for the particular situation. The contract shall
specifically provide that contracting officer approval is required for
compensating an individual contractor employee above the threshold if a
total of 50 percent or more of such compensation is reimbursed under DOE
cost-type contracts. For purposes of designating the threshold, total
compensation includes only the employee\'s salary and cash bonus or
incentive compensation.

(7)(i) Reimbursable costs for compensation for personal services are to
be set forth in a personnel appendix which is a part of the contract.
This personnel appendix shall be negotiated using the principles and
policies of 48 CFR 31.205-6, Compensation, as supplemented by this
section, 970.3102-05-6, and other pertinent parts of the DEAR. Costs
that are unallowable under other contract terms shall not be allowable
as compensation for personnel services.

\(ii\) The personnel appendix sets forth in detail personnel costs and
related expenses allowable under the contract and documents personnel
policies, practices and plans which have been found acceptable by the
contracting officer. The contractor will advise DOE of any proposed
changes in any matters covered by these policies, practices or plans
which relate to personnel costs. The personnel appendix may be modified
from time to time in writing by mutual agreement of the contractor and
DOE without execution of an amendment to the contract. Such
modifications shall be evidenced by execution of written numbered
approval letters from the contracting officer or his representative.
Types of personnel costs and related expenses addressed in the personnel
appendix, or amendments thereto, are as follows: Salaries and wages;
bonuses and incentive compensation; overtime, shift differential,
holiday, and other premium pay for time worked; welfare benefits and
retirement programs; paid time off, and salaries and wages to employees
in their capacity as union stewards and committeemen for time spent in
handling grievances, or serving on labor management (contractor)
committees provided, however, that the contracting officer\'s approval
is required in each instance of total compensation to an individual
employee above an annual rate as specified in the personnel appendix.

(p)(1) Notwithstanding the costs cited in this subsection, incurred for
compensation of a senior executive in excess of the benchmark
compensation amount determined applicable for the contractor fiscal year
by the Administrator, Office of Federal Procurement Policy, are
unallowable. Allowable costs of executive compensation shall be
determined pursuant to Federal Acquisition Regulation 31.205-6(p).

**970.3102-05-18 Independent research and development and bid and
proposal costs. \[DOE coverage-paragraphs (c)\].**

\(c\) Independent Research and Development and Bid and Proposal costs
are unallowable. However, contracting officer approved Laboratory
Directed Research and Development costs and those costs incurred in
support of the Department\'s various reimbursable programs are
allowable.

**970.3102-05-19 Insurance and indemnification.**

The supplemental material on the costs of insurance and indemnification
is found in 48 CFR 970.5228-1, Insurance-Litigation and Claims.

**970.3102-05-22 Lobbying and political activity costs. \[DOE
coverage-paragraph(b)\].**

\(b\) Costs of the following activities are excepted from 48 CFR
31.205-22, Lobbying and political activity costs, coverage, provided
that the resultant costs are reasonable and otherwise fall into the
following exceptions:

\(1\) Providing Members of Congress, their staff members or staff of
cognizant legislative committees, in response to a request (written or
oral, prior or contemporaneous) from Members of Congress, their staff
members or staff of cognizant legislative committees, or as otherwise
directed by the Contracting Officer, information or expert advice of a
factual, technical, or scientific nature, with respect to topics
directly related to the performance of the contract or proposed
legislation. In providing this information or expert advice, the
contractor shall indicate to the recipient that it is not presenting the
views of DOE. Reasonable costs for transportation, lodging or meals
incurred by contractor employees for the purpose of providing such
information or expert advice shall also be reimbursable, provided the
request for such information or expert advice is a prior written request
signed by a Member of Congress.

\(2\) Providing State legislatures or subdivisions thereof, their staff
members, or staff of cognizant legislative committees, in response to a
prior written request from a State legislator, or as otherwise directed
by the Contracting Officer, information or expert advice of a factual,
technical, or scientific nature, with respect to topics directly related
to the performance of the contract or proposed legislation. In providing
this information or expert advice, the contractor shall indicate to the
recipient that it is not presenting the views of DOE. Reasonable costs
for transportation, lodging, or meals incurred by contractor employees
shall be reimbursable.

**970.3102-05-28 Other business expenses. \[DOE coverage-paragraph
(i)\].**

\(i\) Reasonable costs associated with the establishment and maintenance
of financial institution accounts in connection with the work hereunder
are allowable, including, but not limited to, service charges, the cost
of disbursing cash, necessary guards, cashiers, and paymasters. If
payments to employees are made by check, facilities and arrangements for
cashing checks may be provided without expense to the employees, subject
to the approval of the contracting officer.

**970.3102-05-30 Patent costs and technology transfer costs.**

\(a\) For management and operating contracts that do not include the
clause at 970.5227-3, Technology Transfer Mission, the cost principle at
48 CFR 31.205-30 applies.

\(b\) For management and operating contracts that do include the clause
at 970.5227-3, Technology Transfer Mission, the following patent and
technology transfer costs are allowable:

\(1\) Costs of preparing invention disclosures, reports, and other
patent related documents required by the contract;

\(2\) Costs of searching the art relating to invention disclosures;

\(3\) Costs incurred in connection with the filing and prosecution of
patent applications for subject inventions, except where those costs are
incurred as part of a privately funded technology transfer program
recognized under the contract; and

\(4\) Other costs incurred in accordance with the patent rights clause
and the Technology Transfer Mission clause included in the contract.

**970.3102-05-33 Professional and consultant service costs.
\[Departmental coverage - paragraph (g)\]**

\(g\) Section 931.205-33 is applicable to management and operating
contracts under this part.

\[66 FR 4627, Jan. 18, 2001\]

**970.3102-05-46 Travel costs.**

\(a\) Costs for transportation, lodging, meals, and incidental expenses.

\(1\) Costs incurred by contractor personnel on official company
business are allowable, subject to the limitations contained in this
subsection. Costs for transportation may be based on mileage rates,
actual costs incurred, or on a combination thereof, provided the method
used results in a reasonable charge. Costs for lodging, meals, and
incidental expenses may be based on per diem, actual expenses, or a
combination thereof, provided the method used results in a reasonable
charge.

\(2\) Except as provided in paragraph (a)(3) of this subsection, costs
incurred for lodging, meals, and incidental expenses (as defined in the
regulations cited in paragraphs (a)(2)(i) through (iii) of this
subsection) shall be considered to be reasonable and allowable only to
the extent that they do not exceed on a daily basis the maximum per diem
rates in effect at the time of travel as set forth in the-

\(i\) Federal Travel Regulation, prescribed by the General Services
Administration (41 CFR chapters 300 through 304), for travel in the
conterminous 48 United States, available on a subscription basis from
the Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402, Stock No. 922-002-00000-2;

\(ii\) Joint Travel Regulations, DoD Civilian Personnel, Appendix A,
prescribed by the Department of Defense, for travel in Alaska, Hawaii,
The Commonwealth of Puerto Rico, and territories and possessions of the
United States, available on a subscription basis from the Superintendent
of Documents, U.S. Government Printing Office, Washington, DC 20402,
Stock No. 908-010-00000-1; or

\(iii\) Standardized Regulations (Government Civilians, Foreign Areas),
section 925, \"Maximum Travel Per Diem Allowances for Foreign Areas,\"
prescribed by the Department of State, for travel in areas not covered
in paragraphs (a)(2)(i) and (ii) of this subsection, available on a
subscription basis from the Superintendent of Documents, U.S. Government
Printing Office, Washington, DC 20402, Stock No. 744-008-00000-0.

\(3\) In special or unusual situations, actual costs in excess of the
maximum per diem rates are allowable provided that such amounts do not
exceed the higher amounts authorized for Federal civilian employees as
permitted in the regulations referenced in paragraphs (a)(2)(i), (ii),
or (iii) of this subsection. For such higher amounts to be allowable,
all of the following conditions must be met:

\(i\) One of the conditions warranting approval of the actual expense
method, as set forth in the regulations referred to in paragraphs
(a)(2)(i), (ii), or (iii) of this subsection, must exist.

\(ii\) A written justification for use of the higher amounts must be
approved by an officer of the contractor\'s organization or designee to
ensure that the authority is properly administered and controlled to
prevent abuse.

\(iii\) If it becomes necessary to exercise the authority to use the
higher actual expense method repetitively or on a continuing basis in a
particular area, the contractor must obtain advance approval from the
contracting officer.

\(iv\) Documentation to support actual costs incurred shall be in
accordance with the contractor\'s established practices, subject to
paragraph (a)(7) of this subsection, and provided that a receipt is
required for each expenditure of \$75.00 or more. The approved
justification required by paragraph (a)(3)(ii) and, if applicable,
paragraph (a)(3)(iii) of this subsection must be retained.

\(4\) Paragraphs (a)(2) and (a)(3) of this subsection do not incorporate
the regulations cited in paragraphs (a)(2)(i), (ii), and (iii) of this
subsection in their entirety. Only the maximum per diem rates, the
definitions of lodging, meals, and incidental expenses, and the
regulatory coverage dealing with special or unusual situations are
incorporated in this subsection.

\(5\) An advance agreement (see 48 CFR 31.109 and 48 CFR 970.3101-9)
with respect to compliance with paragraphs (a)(2) and (a)(3) of this
subsection may be useful and desirable.

(6)(i) The maximum per diem rates referenced in paragraph (a)(2) of this
subsection generally would not constitute a reasonable daily charge-

\(A\) When no lodging costs are incurred; and/or

\(B\) On partial travel days (e.g., day of departure and return).

\(ii\) Appropriate downward adjustments from the maximum per diem rates
would normally be required under these circumstances. While these
adjustments need not be calculated in accordance with the Federal Travel
Regulation or Joint Travel Regulations, they must result in a reasonable
charge.

\(7\) Costs shall be allowable only if the following information is
documented:

\(i\) Date and place (city, town, or other similar designation) of the
expenses;

\(ii\) Purpose of the trip; and

\(iii\) Name of person on trip and that person\'s title or relationship
to the contractor.

\(b\) Travel costs incurred in the normal course of overall
administration of the business are allowable and shall be treated as
indirect costs.

\(c\) Travel costs directly attributable to specific contract
performance are allowable and may be charged to the contract under 48
CFR 31.202.

\(d\) Airfare costs in excess of the lowest customary standard, coach,
or equivalent airfare offered during normal business hours are
unallowable except when such accommodations require circuitous routing,
require travel during unreasonable hours, excessively prolong travel,
result in increased cost that would offset transportation savings, are
not reasonably adequate for the physical or medical needs of the
traveler, or are not reasonably available to meet mission requirements.
However, in order for airfare costs in excess of the standard airfare to
be allowable, the applicable condition(s) must be documented and
justified.

(e)(1) \"Cost of travel by contractor-owned,-leased, or-chartered
aircraft,\" as used in this paragraph, includes the cost of lease,
charter, operation (including personnel), maintenance, depreciation,
insurance, and other related costs.

\(2\) The costs of travel by contractor-owned,-leased, or-chartered
aircraft are limited to the standard airfare described in paragraph (d)
of this subsection for the flight destination unless travel by such
aircraft is specifically required by contract specification, term, or
condition, or a higher amount is approved by the contracting officer. A
higher amount may be agreed to when one or more of the circumstances for
justifying higher than standard airfare listed in paragraph (d) of this
subsection are applicable, or when an advance agreement under paragraph
(e)(3) of this subsection has been executed. In all cases, travel by
contractor-owned,-leased, or-chartered aircraft must be fully documented
and justified. For each contractor-owned,-leased, or-chartered aircraft
used for any business purpose which is charged or allocated, directly or
indirectly, to a Government contract, the contractor must maintain and
make available manifest/logs for all flights on such company aircraft.
As a minimum, the manifest/log shall indicate-

\(i\) Date, time, and points of departure;

\(ii\) Destination, date, and time of arrival;

\(iii\) Name of each passenger and relationship to the contractor;

\(iv\) Authorization for trip; and

\(v\) Purpose of trip.

\(3\) Where an advance agreement is proposed (see 31.109), consideration
may be given to the following:

\(i\) Whether scheduled commercial airlines or other suitable, less
costly, travel facilities are available at reasonable times, with
reasonable frequency, and serve the required destinations conveniently;

\(ii\) Whether increased flexibility in scheduling results in time
savings and more effective use of personnel that would outweigh
additional travel costs.

\(f\) Costs of contractor-owned or-leased automobiles, as used in this
paragraph, include the costs of lease, operation (including personnel),
maintenance, depreciation, insurance, etc. These costs are allowable, if
reasonable, to the extent that the automobiles are used for company
business. That portion of the cost of company-furnished automobiles that
relates to personal use by employees (including transportation to and
from work) is compensation for personal services and is unallowable as
stated in 48 CFR 31.205-6(m)(2).

**970.3102-05-47 Costs related to legal and other proceedings. \[DOE
coverage-paragraph (h)\].**

\(h\) Costs Associated with Whistleblower Actions.

Section 931.205-47(h) of this chapter is applicable to management and
operating contracts under this part and must be included in the
contract\'s cost reimbursement subcontracts.

**970.3102-05-70 Preexisting conditions.**

Clause 48 CFR 970.5231-4, Preexisting conditions, provides guidance on
situations where this category of costs may be allowable.

\[67 FR 14871, Mar. 28, 2002\]

**970.3170 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5231-4,
Preexisting Conditions, in all management and operating contracts.

\(a\) The contracting officer shall include the clause with its
Alternate I in contracts with incumbent management and operating
contractors.

\(b\) The contracting officer shall include the clause with its
Alternate II in contracts with management and operating contractors not
previously working at that particular site or facility.

**Subpart 970.32Contract Financing**

**970.3200 Policy.**

It is the policy of the DOE to finance management and operating
contracts through advance payments and the use of special financial
institution accounts.

**970.3200-1 Reduction or suspension of advance, partial, or progress
payments.**

\(a\) The procedures prescribed at 48 CFR 32.006 shall be followed
regarding the reduction or suspension of payments under management and
operating contracts.

\(b\) Agency head responsibilities under 48 CFR 32.006 have been
delegated to the Senior Procurement Executive.

\(c\) The remedy coordination official is responsible for receiving,
assessing, and making recommendations to the Senior Procurement
Executive.

**970.3200-1-1 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5232-1,
Reduction or suspension of contract payments, in management and
operating contracts.

**970.3204 Advance payments.**

**970.3204-1 Applicability.**

\(a\) The Head of the Contracting Activity shall authorize advance
payments without interest, and approve the findings, determinations and
the contract terms and conditions concerning advance payments in
accordance with the procedures set forth in 48 CFR subpart 32.4, Advance
Payments, as supplemented by 48 CFR subpart 932.4.

\(b\) Advance payments shall be made under a payments cleared financing
arrangement for deposit in a special financial institution account or,
at the option of the Government, by direct payment or other payment
mechanism to the contractor.

\(c\) Prior to providing any advance payments, the contracting officer
shall enter into an agreement with the contractor and a financial
institution regarding a special financial institution account where the
advanced funds will be deposited by the Government. Such agreement
shall:

\(1\) Provide that DOE shall retain title to the unexpended balance of
funds in the special financial institution account including
collections, if any, deposited by the contractor;

\(2\) Provide that the title in paragraph (c)(1) of this subsection
shall be superior to any claim or lien of the financial institution of
deposit or others; and

\(3\) Incorporate all applicable requirements, as determined by the
Office of Chief Financial Officer.

\(d\) Deviations from the requirements cited in paragraph (c) of this
subsection shall be considered a deviation requiring approval of the
Head of the Contracting Activity.

\(e\) Letter-of-credit arrangements shall be prepared in accordance with
48 CFR 32.406, Letters of Credit, and shall be coordinated between the
procurement and finance organizations.

**970.3270 Standard financial management clauses.**

\(a\) The following DEAR and FAR clauses are standard financial
management clauses. The contracting officer shall insert them in all
management and operating contracts:

\(1\) 48 CFR 970.5232-2, Payments and Advances.

\(i\) The contracting officer shall insert the basic clause with its
Alternate I if a separate fixed-fee is provided for a separate item of
work.

\(ii\) The contracting officer shall insert the basic clause with its
Alternate II when total available fee provisions in the basic clause are
used.

\(iii\) The contracting officer shall insert the basic clause with its
Alternate III in management and operating contracts with integrated
accounting systems.

\(iv\) The contracting officer shall insert the basic clause with its
Alternate IV in management and operating contracts without integrated
accounting systems.

\(2\) 48 CFR 970.5232-3, Accounts, records, and inspection.

If the contract includes the clause at 48 CFR 52.215-11, Price Reduction
for Defective Cost or Pricing Data, the contracting officer shall use
the clause with its Alternate I.

\(3\) 48 CFR 970.5232-4, Obligation of funds. The contracting officer
may use the clause with its Alternate I in contracts which, expressly or
otherwise, provide a contractual basis for equivalent controls in a
separate clause.

\(4\) 48 CFR 970.5203-1, Management controls.

\(5\) 48 CFR 970.5232-5, Liability with respect to Cost Accounting
Standards.

\(6\) 48 CFR 970.5232-6, Work for others funding authorization.

\(7\) 48 CFR 52.230-2, Cost Accounting Standards.

\(8\) 48 CFR 52.230-6, Administration of Cost Accounting Standards.

\(b\) The following DEAR clauses are standard financial management
clauses. The contracting officer shall insert them in all management and
operating contracts with integrated accounting systems:

\(1\) 48 CFR 970.5232-7, Financial management system.

\(2\) 48 CFR 970.5232-8, Integrated accounting.

\(c\) Any deviations from the standard financial management clauses
specified in paragraphs (a) and (b) of this section require the approval
of the Head of the Contracting Activity and the written concurrence of
the Department\'s Chief Financial Officer.

**Subpart 970.34 Major System Acquisition**

**970.3400 General requirements.**

**970.3400-1 Mission-oriented solicitation.**

Contractors shall be required to promptly advise the DOE contracting
officer of any advance notices of, or solicitations for, requirements
which would logically involve DOE facilities or resources operated or
managed by the contractor, which are received from another agency
pursuant to 48 CFR 34.005. Management and operating contracts shall
provide that the contractor shall not respond or otherwise propose to
participate in response to the requirements of such solicitations unless
the contractor has obtained the prior written approval of the DOE
manager of the field activity having cognizance over the contract. Such
approval shall not be given except in compliance with applicable DOE
directives, and with the concurrence of the cognizant Senior Program
Official.

**970.35 Research and development contracting.**

**970.3500 Scope of subpart.**

This subpart implements 48 CFR 35.017 regarding the establishment, use,
review, and termination of Federally Funded Research and Development
Centers (FFRDCs) sponsored by the Department of Energy.

**970.3501 Federally funded research and development centers.**

**970.3501-1 Sponsoring agreements.**

\(a\) The contract award document constitutes the sponsoring agreement
between the Department of Energy and the contractor operating an FFRDC.

\(b\) The contract statement of work shall define the purpose and
mission of the FFRDC.

\(c\) Other elements of the sponsoring agreement which shall be
incorporated into the contract include:

\(1\) The appropriate termination clause of the contract (as prescribed
in 48 CFR subpart 49.5).

\(2\) The plan for the identification, use, and disposition of retained
earnings developed pursuant to 48 CFR 970.1504-1-3(c)(6), if applicable;

\(3\) The clause entitled \"Federally Funded Research and Development
Center Sponsoring Agreement,\" which, in part, prescribes limitations on
the FFRDC competing with the private sector, and requirements for the
FFRDC\'s acceptance of work from a nonsponsor; and

\(4\) Other terms and conditions considered necessary for the particular
circumstances of the FFRDC (e.g., advance understandings on particular
cost items).

**970.3501-2 Using an FFRDC.**

The contractor may only accept work from a nonsponsor (as defined in 48
CFR 35.017) in accordance with the requirements of DOE Order 481.1, Work
for Others (Non-Department of Energy Funded Work).

**970.3501-3 Reviewing FFRDC\'s.**

\(a\) All Department of Energy sponsored FFRDC\'s are operated by
management and operating contractors.

\(b\) Coincident with the review required by 48 CFR 17.605(b) and 48 CFR
970.1702-1(b) regarding the decision to extend or compete a management
and operating contract, the contracting officer shall, in accordance
with internal Departmental procedures:

\(1\) Conduct the review required by 48 CFR 35.017-4 concerning the use
and need for the FFRDC; and

\(2\) Recommend for Secretarial approval, the continuation or
termination of the Department\'s sponsorship of an FFRDC at the time
authorization is required to extend or compete a management and
operating contract.

**970.3501-4 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5235-1,
Federally Funded Research and Development Center Sponsoring Agreement,
in all solicitations and contracts for the management and operation of
an FFRDC sponsored by the Department of Energy.

**Subpart 970.36Construction and Architect-Engineer Contracts**

**970.3605 Contract clauses.**

**970.3605-1 Other contracts.**

The clause in 48 CFR 52.236-8, Other Contracts, shall be used in all
management and operating contracts.

**970.3605-2 Special construction clause for operating contracts.**

The clause in 48 CFR 970.5236-1, Government Facility Subcontract
Approval, shall be used in management and operating contracts when the
contractor will not perform covered work with its own forces but may
procure construction by subcontract.

**Subpart 970.37 Facilities Management Contracting**

**970.3770 Facilities management.**

**970.3770-1 Policy.**

Contractors managing DOE facilities shall be required to comply with the
DOE Directives applicable to facilities management.

**970.3770-2 \[Removed and reserved\].**

**Subpart 970.41 Acquisition of Utility Services**

**970.4102 Acquiring utility services.**

**970.4102-1 Policy.**

\(a\) Utility services defined at 48 CFR 41.101 for the furnishing of
electricity, gas (natural or manufactured), steam, water, and/or
sewerage to facilities owned or leased by DOE shall be acquired directly
by DOE and not by a contractor using a subcontractor arrangement, except
as provided in paragraph (b) of this subsection.

\(b\) Where it is determined to be in the best interest of the
Government, a DOE contracting activity may authorize a management and
operating contractor for a facility to acquire such utility service for
the facility, after requesting and receiving concurrence to make such an
authorization from the Director, Public Utilities Branch, Headquarters.
Any request for such concurrence should be included in the Utility
Service Requirements and Options Studies required by DOE directives in
subseries 4540 (Public Services). Alternatively, it may be made in a
separate document submitted to the Director of that office early in the
acquisition cycle. Any request shall set forth why it is in the best
interest of the DOE to acquire utility service(s) by subcontract, i.e.,
what the benefits are, such as economic advantage.

\(c\) The requirements of 48 CFR part 41, this section, and DOE
directives in subseries 4540 shall be applied to a subcontract level
acquisition for furnishing utility services to a facility owned or
leased by DOE.

**Subpart 970.42Contract Administration**

**970.4207-03-02 Certificate of costs.**

\(a\) The contracting officer shall require that management and
operating contractors provide a submission, pursuant to 48 CFR
970.5232-2-(j), for settlement of costs incurred during the period
stipulated on the submission and a certification that the costs included
in the submission are allowable. The contracting officer shall assess a
penalty pursuant to 48 CFR 970.5242-1 if unallowable costs are included
in the submission. Unallowable costs are either expressly unallowable or
determined unallowable.

\(1\) An expressly unallowable cost is a particular item or type of cost
which, under the express provisions of an applicable law, regulation, or
this contract, is specifically named and stated to be unallowable.

\(2\) A cost determined unallowable is one which, for that contractor,

\(i\) Was subject to a contracting officer\'s final decision and not
appealed;

\(ii\) The Department\'s Board of Contract Appeals or a court has
previously ruled as unallowable; or

\(iii\) was mutually agreed to be unallowable.

\(b\) If, during the review of the submission, the contracting officer
determines that the submission contains an expressly unallowable cost or
a cost determined to be unallowable prior to the submission, the
contracting officer shall assess a penalty.

\(c\) If the contracting officer determines that a cost submitted by the
contractor in its submission for settlement is:

\(1\) Expressly unallowable, then the contracting officer shall assess a
penalty in an amount equal to the disallowed cost allocated to the
contract plus interest on the paid portion of the disallowed cost.
Interest shall be computed from the date of overpayment to the date of
repayment using the interest rate specified by the Secretary of the
Treasury pursuant to Public Law 92-41 (85 Stat. 97).

\(2\) Determined unallowable, then the contracting officer shall assess
a penalty in an amount equal to two times the amount of the disallowed
cost allocated to the contract.

\(d\) The contracting officer may waive the penalty provisions when:

\(1\) The contractor withdraws the submission before the formal
initiation of an audit of the submission and submits a revised
submission;

\(2\) The amount of the unallowable costs allocated to covered contracts
is \$10,000 or less; or

\(3\) The contractor demonstrates to the contracting officer\'s
satisfaction that:

\(i\) It has established appropriate policies, personnel training, and
an internal control and review system that provides assurances that
unallowable costs subject to penalties are precluded from the
contractor\'s submission for settlement of costs; and

\(ii\) The unallowable costs subject to the penalty were inadvertently
incorporated into the submission.

\(e\) The Head of the Contracting Activity may waive the certification
when-

\(1\) It determines that it would be in the best interest of the United
States to waive such certification; and

\(2\) It states in writing the reasons for that determination and makes
such determination available to the public.

**970.4207-03-70 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5242-1,
Penalties for unallowable costs, in all management and operating
solicitations and contracts.

**970.4207-05-01 Contracting officer determination procedure \[DOE
coverage-paragraph (b)\].**

(b)(4) A contracting officer shall not resolve any questioned costs
until the contracting officer has obtained:

\(i\) Adequate documentation with respect to such costs; and

\(ii\) The opinion of the Department of Energy\'s auditor on the
allowability of such costs.

\(5\) The contracting officer shall ensure that the documentation
supporting the final settlement addresses the amount of the questioned
costs and the subsequent disposition of such questioned costs.

\(6\) The contracting officer shall ensure, to the maximum extent
practicable, that the Department of Energy\'s auditor is afforded an
opportunity to attend any negotiation or meeting with the contractor
regarding a determination of allowability.

**Subpart 970.43 Contract Modifications**

**970.4302 Changes.**

**970.4302-1 Contract clause.**

The contracting officer shall insert the clause at 48 CFR 970.5243-1,
Changes, in all management and operating contracts.

**Subpart 970.44 Management and Operating Contractor Purchasing**

**970.4400 Scope.**

This subpart prescribes policies and procedures concerning the
purchasing systems and activities of management and operating
contractors.

**970.4401 Responsibilities.**

**970.4401-1 General.**

\(a\) In the Department of Energy, overall responsibility for the
oversight of the performance of management and operating contractors,
including their purchasing activities, rests with the cognizant DOE
contracting activity and, in particular, the Head of the Contracting
Activity (HCA). Contracting officers are responsible for the management
and operating contractors\' conformance with this subpart and the
applicable terms and conditions of their contracts, and for determining
whether those purchasing activities provide timely and effective support
to DOE programs.

\(b\) In carrying out their overall responsibilities, HCAs shall:

\(1\) Require management and operating contractors to maintain written
descriptions of their individual purchasing systems and methods and
further require that, upon award or extension of the contract, the
entire written description be submitted to the contracting officer for
review and acceptance;

\(2\) Require that any changes to the management and operating
contractor\'s written description having any substantive impact upon the
contractor\'s purchasing system and methods be submitted to the
contracting officer for review and acceptance prior to issuance;

\(3\) Ensure the review of individual purchasing actions of certain
types, or above stated dollar levels, by the contracting officer
pursuant to 48 CFR subpart 44.2 or as set forth in the contractor\'s
approved system and methods; and

\(4\) Ensure that periodic appraisals of the contractor\'s management of
all facets of the purchasing function, including compliance with the
contractor\'s approved system and methods, are performed by the
contracting officer. Such appraisals shall be performed through either
of the following methodologies:

\(i\) Contractor Purchasing System Reviews, conducted in accordance with
48 CFR subpart 44.3; or

\(ii\) When approved by the contracting officer, contractor
participation in the conduct of the Balanced Scorecard performance
measurement and performance management system.

\(c\) In performing the reviews required by paragraphs (b)(1) and (2),
and the appraisals required by paragraph (b)(4) of this subsection, HCAs
shall assure that contracting officers determine that the contractors\'
written systems and methods are consistent with this subpart and the
applicable terms and conditions of their contracts.

**970.4401-2 Review and approval.**

\(a\) The Heads of the Contracting Activities shall establish
thresholds, by subcontract type and dollar level, for the review and
approval of proposed subcontracting actions by each management and
operating contractor under their cognizance. Such thresholds may not
exceed the authority delegated to the Head of the Contracting Activity
by the Senior Procurement Executive. In establishing these thresholds,
the Heads of the Contracting Activities should consider such factors as
the following:

\(1\) The nature of work to be performed under the management and
operating contract;

\(2\) The size, experience, ability, reliability, and organization of
the management and operating contractor\'s purchasing function;

\(3\) The internal controls, procedures, and organizational stature of
the management and operating contractor\'s purchasing function; and

\(4\) Policies with respect to such reviews and approvals established by
the Senior Procurement Executive.

\(b\) Prior approval shall be required for the subcontracting of any
work a contractor is obligated to perform under a contract entered into
under section 41, entitled Production of Special Nuclear Material, of
the Atomic Energy Act of 1954, as amended.

\(c\) The Heads of the Contracting Activities shall take such action as
may be required to insure compliance with the procedure for purchasing
from contractor-affiliated sources or the purchase of specific items, or
classes of items, which by the terms of the contract may require DOE
approval.

\(d\) The Heads of the Contracting Activities may raise or lower the
review and approval thresholds established pursuant to paragraph (a) of
this subsection at any time. Such action may be considered upon the
periodic review of the contractor\'s purchasing system, but in any case
those adjusted thresholds may not exceed the approval authority
delegated to the Head of the Contracting Activity by the Senior
Procurement Executive.

\(e\) DOE approvals of specific proposed purchases pursuant to this
subpart shall communicate that such approval does not relieve the
management and operating contractor of any obligation under its prime
contract with DOE; is given without prejudice to any rights or claims of
the Government thereunder; creates no obligation on the part of the
Government to the subcontractor, and is not a predetermination of the
allowability of costs to be incurred under the subcontract.

\(f\) Contracting officers shall assure that management and operating
contractors establish and maintain subcontract files which contain those
documents essential to present an accurate and adequate record of all
purchasing transactions.

\(g\) Contracting officers shall assure that management and operating
contractors document purchases in writing, setting forth the information
and data used in determining that the purchases are in the best interest
of the Government. The scope and detail of this documentation shall be
consistent with the nature, dollar value, and complexity of the
purchase.

\(h\) The Heads of the Contracting Activities shall assure that the
contracting activity establishes and maintains files of the documents
associated with the review and approval of subcontract actions subject
to DOE review and approval. Those files shall include, among other
necessary documentation, an appraisal of the proposed action by the
contracting activity and a copy of the approving or disapproving
document forwarded to the management and operating contractor, including
a listing of any deficiencies, a listing of any required corrective
actions, any suggestions, or other relevant comments.

**970.4401-3 Advance notification.**

\(a\) Contracting officers shall assure that the written description of
the management and operating contractor\'s purchasing system and methods
provides for advance notice to the DOE contracting officer of the
proposed award of the following specified types of subcontracts, except
as stated in paragraph (b) of this subsection:

\(1\) Pursuant to section 304(b) of the Federal Property and
Administrative Service Act of 1949, as amended *(41 U.S.C. 254*(b)):

\(i\) Cost reimbursement-type subcontracts of any award value; and

\(ii\) Fixed price-type subcontracts which exceed the simplified
acquisition threshold, or 5 percent of the total estimated cost of the
prime contract.

\(2\) Purchases from contractor-affiliated sources over a value
established by the HCA.

\(b\) Pursuant to section 602(d)13 of the Act *(40 U.S.C. 474*(13))
referred to in paragraph (a) of this section, the advance notification
requirement for the types of purchases listed in paragraphs (a) (1) and
(2) of this subsection shall not apply to subcontracts relating to
functions derived from the Atomic Energy Commission.

\(c\) The advance notice shall contain, at a minimum, a description of
work, estimated cost, type of contract or reimbursement provisions, and
extent of competition, or justification for a noncompetitive purchase
procurement. The contracting officer may at any time request additional
information that must be furnished promptly and prior to award of the
subcontract.

**970.4402 Contractor purchasing system.**

**970.4402-1 Policy.**

\(a\) DOE contracts for the management and operation of its facilities,
the design and production of nuclear weapons, energy research and
development, and the performance of other services. These management and
operating (M&O) contractors have been selected for their technical and
managerial expertise and are expected to bring to bear these technical
and managerial skills to accomplish the significant Federal mission(s)
described in their contracts with, and work plans approved by, DOE.

\(b\) Purchasing done by management and operating contractors is one
area in which the particular skills of the contractors will be brought
to bear in order to more readily accomplish the contractors\' assigned
missions. The contracting procedures of the contractor\'s organization,
therefore, form the basis for the development of a purchasing system and
methods that will comply with its contract with DOE and this subpart.

**970.4402-2 General requirements.**

The following shall apply to the purchasing systems of management and
operating contractors:

\(a\) The objective of a management and operating contractor\'s
purchasing system is to deliver to its customers on a timely basis those
best value products and services necessary to accomplish the purposes of
the Government\'s contract. To achieve this objective, contractors are
expected to use their experience, expertise and initiative consistent
with this subpart.

\(b\) The purchasing systems and methods used by management and
operating contractors shall be well-defined, consistently applied, and
shall follow purchasing practices appropriate for the requirement and
dollar value of the purchase. It is anticipated that purchasing
practices and procedures will vary among contractors and according to
the type and kinds of purchases to be made.

\(c\) Contractor purchases are not Federal procurements, and are not
directly subject to the Federal Acquisition Regulations in 48 CFR.
Nonetheless, certain Federal laws, Executive Orders, and regulations may
affect contractor purchasing, as required by statute, regulation, or
contract terms and conditions.

\(d\) Contractor purchasing systems shall identify and apply the best in
commercial purchasing practices and procedures (although nothing
precludes the adoption of Federal procurement practices and procedures)
to achieve system objectives. Where specific requirements do not
otherwise apply, the contractor purchasing system shall provide for
appropriate measures to ensure the:

\(1\) Acquisition of quality products and services at fair and
reasonable prices;

\(2\) Use of capable and reliable subcontractors who either:

\(i\) Have track records of successful past performance, or

\(ii\) Can demonstrate a current superior ability to perform;

\(3\) Minimization of acquisition lead-time and administrative costs of
purchasing;

\(4\) Use of effective competitive techniques;

\(5\) Reduction of performance risks associated with subcontractors, and
facilitation of quality relationships which can include techniques such
as partnering agreements, ombudsmen, and alternative disputes
procedures;

\(6\) Use of self-assessment and benchmarking techniques to support
continuous improvement in purchasing;

\(7\) Maintenance of the highest professional and ethical standards;

\(8\) Maintenance of file documentation appropriate to the value of the
purchase and which is adequate to establish the propriety of the
transaction and the price paid; and

\(9\) Maximization of opportunities for small business, HUBZone small
business, small disadvantaged business, and woman-owned small business
concerns to participate in contract performance.

**970.4402-3 Purchasing from contractor-affiliated sources.**

\(a\) A management and operating contractor may purchase from sources
affiliated with the contractor (any division, subsidiary, or affiliate
of the contractor or its parent company) in the same manner as from
other sources, provided:

\(1\) The management and operating contractor\'s purchasing function is
independent of the proposed contractor-affiliated source;

\(2\) The same terms and conditions would apply if the purchase were
from a third party;

\(3\) Award is made in accordance with policies and procedures designed
to permit effective competition which have been approved by the
contracting officer. (This requirement for competition shall not
preclude acquisition of technical services from contractor-affiliated
entities where those entities have a special expertise, and the basis
therefor is documented.); and

\(4\) The award is legally enforceable where the entities are separately
incorporated.

\(b\) Subcontracts for performance of contract work itself (as
distinguished from the purchase of supplies and services needed in
connection with the performance of work) require DOE authorization and
may involve an adjustment of the contractor\'s fee, if any. If the
management and operating contractor seeks authorization to have some
part of the contract work performed by a contractor-affiliated source,
and that contractor\'s performance of that work was a factor in the
negotiated fee, DOE approval would normally require:

\(1\) That the contractor-affiliated source perform such work without
fee or profit, or

\(2\) An equitable downward adjustment to the management and operating
contractor\'s fee, if any.

\(c\) Determination on cost of money allowance as prescribed at 48 CFR
31.205-10 shall be treated as follows:

\(1\) When a purchase from a contractor-affiliated source results from
competition and is in accord with provisions and conditions of
paragraphs (a)(1) through (a)(4) of this subsection, the
contractor-affiliated source may include cost of money as an allowable
element of the costs of its goods or services supplied to the
contractor; provided:

\(i\) The purchase is based on cost as set forth in 48 CFR 970.3102-3-21
and

\(ii\) The cost of money amount is computed in accordance with 48 CFR
31.205-10 and related procedures (see 48 CFR 970.30).

\(2\) When a purchase from a contractor-affiliated source is made
non-competitively, cost of money shall not be considered an allowable
element of the cost of the contractor-affiliated source purchase.

**970.4402-4 Nuclear material transfers.**

\(a\) Management and operating contractors, in preparing subcontracts or
other agreements in which monetary payments or credits depend on the
quantity and quality of nuclear material, shall be required to assure
that each such subcontract or agreement contains a:

\(1\) Description of the material to be transferred;

\(2\) Provision specifying the method by which the quantities are to be
measured and reported;

\(3\) Provision specifying the procedures to be used in resolving any
differences arising as a result of such measurements;

\(4\) Provision for the use of an independent third party as an umpire
to settle unresolved differences in the analytical samples; and

\(5\) Provision specifying in detail which party shall bear the costs of
resolving a difference and what constitutes such costs.

\(b\) The provisions providing for resolution of measurement differences
must be such that resolution is always accomplished, while at the same
time minimizing any advantage one party may have over the other.

**970.4403 Contract clause.**

The contracting officer shall insert the clause at 970.5244-1,
Contractor Purchasing System, in all management and operating contracts.

**Subpart 970.45 Government Property**

**970.4501 General.**

**970.4501-1 Contract clause.**

\(a\) The contracting officer shall insert the clause at 970.5245-1,
Property, in management and operating contracts. Paragraph (f)(1)(i)(c)
of the clause applies to a non-profit contractor only to the extent
specifically provided in the individual contract. Specific managerial
personnel may be listed in paragraph (j), provided their listing is
consistent with the clause and the DEAR.

\(b\) The contracting officer shall insert the basic clause with its
Alternate I in contracts with nonprofit contractors.

**Subpart 970.49 Termination of Contracts**

**970.4905 Contract termination clause.**

**970.4905-1 Termination for convenience of the government and
default.**

\(a\) The contracting officer shall include the clause at 48 CFR
52.249-6, Termination (Cost Reimbursement), as modified pursuant to
paragraph (b) of this subsection, in all cost-reimbursement management
and operating contracts, regardless of whether the contract is for
production, or research and development with an educational or nonprofit
institution.

\(b\) The contracting officer shall modify paragraph (i) of the clause
to insert \"as supplemented in subpart 970.31 of the Department of
Energy Acquisition Regulation,\" after the phrase, \"part 31 of the
Federal Acquisition Regulation.\"

**Subpart 970.50 Extraordinary Contractual Actions**

**970.5004 Residual powers.**

**970.5004-1 Contract clause.**

When use of the clause at 48 CFR 52.250-1, Indemnification Under Public
Law 85-804, is appropriate, the contracting officer may substitute the
words \"Obligation of funds\" for the words \"Limitation of Cost or
Limitation of Funds.\"

**970.5070 Indemnification.**

**970.5070-1 Scope and applicability.**

\(a\) Section 170d. of the Atomic Energy Act of 1954, as amended,
requires DOE to enter into agreements of indemnity with contractors
whose work involves the risk of public liability for the occurrence of a
nuclear incident or precautionary evacuation.

\(b\) Details of such indemnification are discussed at 48 CFR 950.70.

**970.5070-2 General.**

DOE contractors with whom statutory nuclear hazards indemnity agreements
under the authority of section 170d. of the Atomic Energy Act of 1954,
as amended, are executed will not normally be required or permitted to
furnish financial protection by purchase of insurance to cover public
liability for nuclear incidents. However, if authorized by the DOE
Headquarters office having responsibility for contractor casualty
insurance programs, DOE contractors may be

\(a\) Permitted to furnish financial protection to themselves, or

\(b\) Permitted to continue to carry such insurance at cost to the
Government if they currently maintain insurance for such liability.

**970.5070-3 Contract clauses.**

\(a\) The clause at 48 CFR 952.250-70, Nuclear Hazards Indemnity
Agreement, shall be included in all management and operating contracts
involving the risk of public liability for the occurrence of a nuclear
incident or precautionary evacuation arising out of or in connection
with the contract work, including such events caused by a product
delivered to a DOE-owned, facility for use by DOE or its contractors.
The clause at 48 CFR 952.250-70 also shall be included in any management
and operating contract for the design of a DOE facility, the
construction or operation of which may involve the risk of public
liability for a nuclear incident or a precautionary evacuation.

\(b\) The clause at 48 CFR 952.250-70 shall not be included in contracts
in which the contractor is subject to Nuclear Regulatory Commission
(NRC) financial protection requirements under section 170b. of the Act
or NRC agreements of indemnification under section 170 c. or k. of the
Act for activities to be performed under the contract.

**Subpart 970.52 Solicitation Provisions and Contract Clauses for
Management and Operating Contracts**

**970.5200 Scope of subpart.**

This subpart prescribes some of the solicitation provisions and contract
clauses for use in management and operating contracts. The provisions
and clauses contained in this subpart supplement the provisions and
clauses prescribed in the FAR and in other parts of the DEAR (48 CFR 901
through 48 CFR 952), and, pursuant to the individual provision or clause
prescription, are to be used in addition to or in place of such clauses.
Management and operating contracts are hybrid contracts, in some cases
including aspects of several FAR contract types, for example, supplies
and construction. For some FAR solicitation provisions and contract
clauses, this subpart prescribes their use despite the hybrid nature of
the work required. To assist Departmental contracting personnel in
determining the applicability of FAR and DEAR clauses to management and
operating contracts, additional guidance is published and made available
by the Office of Procurement and Assistance Policy, within the
Headquarters procurement organization.

**970.5201 Text of provisions and clauses.**

**970.5203-1 Management controls.**

As prescribed in 48 CFR 970.0370-2(a) and 48 CFR 970.3270(a)(4), insert
the following clause:

MANAGEMENT CONTROLS (JUN 2007)

(a)(1) The contractor shall be responsible for maintaining, as an
integral part of its organization, effective systems of management
controls for both administrative and programmatic functions. Management
controls comprise the plan of organization, methods, and procedures
adopted including consideration of outsourcing of functions by
management to reasonably ensure that: the mission and functions assigned
to the contractor are properly executed; efficient and effective
operations are promoted; resources are safeguarded against waste, loss,
mismanagement, unauthorized use, or misappropriation; all encumbrances
and costs that are incurred under the contract and fees that are earned
are in compliance with applicable clauses and other current terms,
conditions, and intended purposes; all collections accruing to the
contractor in connection with the work under this contract,
expenditures, and all other transactions and assets are properly
recorded, managed, and reported; and financial, statistical, and other
reports necessary to maintain accountability and managerial control are
accurate, reliable, and timely.

\(2\) The systems of controls employed by the contractor shall be
documented and satisfactory to DOE.

\(3\) Such systems shall be an integral part of the contractor\'s
management functions, including defining specific roles and
responsibilities for each level of management, and holding employees
accountable for the adequacy of the management systems and controls in
their areas of assigned responsibility.

\(4\) The contractor shall, as part of the internal audit program
required elsewhere in this contract, periodically review the management
systems and controls employed in programs and administrative areas to
ensure that they are adequate to provide reasonable assurance that the
objectives of the systems are being accomplished and that these systems
and controls are working effectively. Annually, or at other intervals
directed by the contracting officer, the contractor shall supply to the
contracting officer copies of the reports reflecting the status of
recommendations resulting from management audits performed by its
internal audit activity and any other audit organization. This
requirement may be satisfied in part by the reports required under
paragraph (i) of 970.5232-3, Accounts, records, and inspection.

\(b\) The contractor shall be responsible for maintaining, as a part of
its operational responsibilities, a baseline quality assurance program
that implements documented performance, quality standards, and control
and assessment techniques.

(End of Clause)

**970.5203-2 Performance improvement and collaboration.**

As prescribed in 48 CFR 970.0370-2(b), insert the following clause:

PERFORMANCE IMPROVEMENT AND COLLABORATION (MAY 2006)

\(a\) The contractor agrees that it shall affirmatively identify,
evaluate, and institute practices, where appropriate, that will improve
performance in the areas of environmental and health, safety, scientific
and technical, security, business and administrative, and any other
areas of performance in the management and operation of the contract.
This may entail the alteration of existing practices or the institution
of new procedures to more effectively or efficiently perform any aspect
of contract performance or reduce overall cost of operation under the
contract. Such improvements may result from changes in organization,
outsourcing decisions, simplification of systems while retaining
necessary controls, or any other approaches consistent with the
statement of work and performance measures of this contract.

\(b\) The contractor agrees to work collaboratively with the Department,
all other management and operating, DOE major facilities management
contractors and affiliated contractors which manage or operate DOE sites
or facilities for the following purposes: (i) to exchange information
generally, (ii) to evaluate concepts that may be of benefit in resolving
common issues, in confronting common problems, or in reducing costs of
operations, and (iii) to otherwise identify and implement
DOE-complex-wide management improvements discussed in paragraph (a). In
doing so, it shall also affirmatively provide information relating to
its management improvements to such contractors, including lessons
learned, subject to security considerations and the protection of data
proprietary to third parties.

\(c\) The contractor may consult with the contracting officer in those
instances in which improvements being considered pursuant to paragraph
(a) involve the cooperation of the DOE. The contractor may request the
assistance of the contracting officer in the communication of the
success of improvements to other management and operating contractors in
accordance with paragraph (b) of this clause.

\(d\) The contractor shall notify the contracting officer and seek
approval where necessary to fulfill its obligations under the contract.
Compliance with this clause in no way alters the obligations of the
Contractor under any other provision of this contract.

(End of Clause)

**970.5203-3 Contractor\'s organization.**

As prescribed in 48 CFR 970.0371-9, insert the following clause:

CONTRACTOR\'S ORGANIZATION (DEC 2000)

\(a\) Organization chart. As promptly as possible after the execution of
this contract, the contractor shall furnish to the contracting officer a
chart showing the names, duties, and organization of key personnel (see
48 CFR 952.215-70) to be employed in connection with the work, and shall
furnish supplemental information to reflect any changes as they occur.

\(b\) Supervisory representative of contractor. Unless otherwise
directed by the contracting officer, a competent full-time resident
supervisory representative of the contractor satisfactory to the
contracting officer shall be in charge of the work at the site, and any
work off-site, at all times.

\(c\) Control of employees. The contractor shall be responsible for
maintaining satisfactory standards of employee competency, conduct, and
integrity and shall be responsible for taking such disciplinary action
with respect to its employees as may be necessary. In the event the
contractor fails to remove any employee from the contract work whom DOE
deems incompetent, careless, or insubordinate, or whose continued
employment on the work is deemed by DOE to be inimical to the
Department\'s mission, the contracting officer may require, with the
approval of the Secretary of Energy, the contractor to remove the
employee from work under the contract. This includes the right to direct
the contractor to remove its most senior key person from work under the
contract for serious contract performance deficiencies.

\(d\) Standards and procedures. The contractor shall establish such
standards and procedures as are necessary to implement the requirements
set forth in 48 CFR 970.0371. Such standards and procedures shall be
subject to the approval of the contracting officer.

(End of Clause)

**970.5204-1 Counterintelligence.**

\(a\) As prescribed in 48 CFR 970.0404-4(a), insert the following clause
in contracts containing the clauses at 48 CFR 952.204-2, Security, and
48 CFR 952.204-70, Classification/Declassification:

COUNTERINTELLIGENCE (DEC 2000)

\(a\) The contractor shall take all reasonable precautions in the work
under this contract to protect DOE programs, facilities, technology,
personnel, unclassified sensitive information and classified matter from
foreign intelligence threats and activities conducted for governmental
or industrial purposes, in accordance with DOE Order 5670.3,
Counterintelligence Program; Executive Order 12333, U.S. Intelligence
Activities; and other pertinent national and Departmental
Counterintelligence requirements.

\(b\) The contractor shall appoint a qualified employee(s) to function
as the Contractor Counterintelligence Officer. The Contractor
Counterintelligence Officer will be responsible for conducting defensive
Counterintelligence briefings and debriefings of employees traveling to
foreign countries or interacting with foreign nationals; providing
thoroughly documented written reports relative to targeting, suspicious
activity and other matters of Counterintelligence interest; immediately
reporting targeting, suspicious activity and other Counterintelligence
concerns to the DOE Headquarters Counterintelligence Division; and
providing assistance to other elements of the U.S. Intelligence
Community as stated in the aforementioned Executive Order, the DOE
Counterintelligence Order, and other pertinent national and Departmental
Counterintelligence requirements.

(End of Clause)

**970.5204-2 Laws, regulations, and DOE directives.**

As prescribed in 48 CFR 970.0470-2, insert the following clause:

LAWS, REGULATIONS, AND DOE DIRECTIVES (DEC 2000)

\(a\) In performing work under this contract, the contractor shall
comply with the requirements of applicable Federal, State, and local
laws and regulations (including DOE regulations), unless relief has been
granted in writing by the appropriate regulatory agency. A List of
Applicable Laws and regulations (List A) may be appended to this
contract for information purposes. Omission of any applicable law or
regulation from List A does not affect the obligation of the contractor
to comply with such law or regulation pursuant to this paragraph.

\(b\) In performing work under this contract, the contractor shall
comply with the requirements of those Department of Energy directives,
or parts thereof, identified in the List of Applicable Directives (List
B) appended to this contract. Except as otherwise provided for in
paragraph (d) of this clause, the contracting officer may, from time to
time and at any time, revise List B by unilateral modification to the
contract to add, modify, or delete specific requirements. Prior to
revising List B, the contracting officer shall notify the contractor in
writing of the Department\'s intent to revise List B and provide the
contractor with the opportunity to assess the effect of the
contractor\'s compliance with the revised list on contract cost and
funding, technical performance, and schedule; and identify any potential
inconsistencies between the revised list and the other terms and
conditions of the contract. Within 30 days after receipt of the
contracting officer\'s notice, the contractor shall advise the
contracting officer in writing of the potential impact of the
contractor\'s compliance with the revised list. Based on the information
provided by the contractor and any other information available, the
contracting officer shall decide whether to revise List B and so advise
the contractor not later than 30 days prior to the effective date of the
revision of List B. The contractor and the contracting officer shall
identify and, if appropriate, agree to any changes to other contract
terms and conditions, including cost and schedule, associated with the
revision of List B pursuant to the clause of this contract entitled,
\"Changes.\"

\(c\) Environmental, safety, and health (ES&H) requirements appropriate
for work conducted under this contract may be determined by a DOE
approved process to evaluate the work and the associated hazards and
identify an appropriately tailored set of standards, practices, and
controls, such as a tailoring process included in a DOE approved Safety
Management System implemented under the clause entitled \"Integration of
Environment, Safety, and Health into Work Planning and Execution.\" When
such a process is used, the set of tailored (ES&H) requirements, as
approved by DOE pursuant to the process, shall be incorporated into List
B as contract requirements with full force and effect. These
requirements shall supersede, in whole or in part, the contractual
environmental, safety, and health requirements previously made
applicable to the contract by List B. If the tailored set of
requirements identifies an alternative requirement varying from an ES&H
requirement of an applicable law or regulation, the contractor shall
request an exemption or other appropriate regulatory relief specified in
the regulation.

\(d\) Except as otherwise directed by the contracting officer, the
contractor shall procure all necessary permits or licenses required for
the performance of work under this contract.

\(e\) Regardless of the performer of the work, the contractor is
responsible for compliance with the requirements of this clause. The
contractor is responsible for flowing down the requirements of this
clause to subcontracts at any tier to the extent necessary to ensure the
contractor\'s compliance with the requirements.

(End of Clause)

**970.5204-3 Access to and ownership of records.**

As prescribed in 48 CFR 970.0407-1-3, insert the following clause:

ACCESS TO AND OWNERSHIP OF RECORDS (JUL 2005)

\(a\) Government-owned records. Except as provided in paragraph (b) of
this clause, all records acquired or generated by the contractor in its
performance of this contract shall be the property of the Government and
shall be delivered to the Government or otherwise disposed of by the
contractor either as the contracting officer may from time to time
direct during the progress of the work or, in any event, as the
contracting officer shall direct upon completion or termination of the
contract.

\(b\) Contractor-owned records. The following records are considered the
property of the contractor and are not within the scope of paragraph (a)
of this clause. \[The contracting officer shall identify which of the
following categories of records will be included in the clause.\]

\(1\) Employment-related records (such as worker's compensation files;
employee relations records, records on salary and employee benefits;
drug testing records, labor negotiation records; records on ethics,
employee concerns; records generated during the course of responding to
allegations of research misconduct; records generated during other
employee related investigations conducted under an expectation of
confidentiality; employee assistance program records; and personnel and
medical/health-related records and similar files), and non-employee
patient medical/health-related records, except for those records
described by the contract as being maintained in Privacy Act systems of
records.

\[70 FR 37010 Jun. 28, 2005\]

\(2\) Confidential contractor financial information, and correspondence
between the contractor and other segments of the contractor located away
from the DOE facility (i.e., the contractor\'s corporate headquarters);

\(3\) Records relating to any procurement action by the contractor,
except for records that under 48 CFR 970.5232-3, Accounts, Records, and
Inspection, are described as the property of the Government; and

\(4\) Legal records, including legal opinions, litigation files, and
documents covered by the attorney-client and attorney work product
privileges; and

\(5\) The following categories of records maintained pursuant to the
technology transfer clause of this contract:

\(i\) Executed license agreements, including exhibits or appendices
containing information on royalties, royalty rates, other financial
information, or commercialization plans, and all related documents,
notes and correspondence.

\(ii\) The contractor\'s protected Cooperative Research and Development
Agreement (CRADA) information and appendices to a CRADA that contain
licensing terms and conditions, or royalty or royalty rate information.

\(iii\) Patent, copyright, mask work, and trademark application files
and related contractor invention disclosures, documents and
correspondence, where the contractor has elected rights or has
permission to assert rights and has not relinquished such rights or
turned such rights over to the Government.

\(c\) Contract completion or termination. In the event of completion or
termination of this contract, copies of any of the contractor-owned
records identified in paragraph (b) of this clause, upon the request of
the Government, shall be delivered to DOE or its designees, including
successor contractors. Upon delivery, title to such records shall vest
in DOE or its designees, and such records shall be protected in
accordance with applicable federal laws (including the Privacy Act), as
appropriate.

\(d\) Inspection, copying, and audit of records. All records acquired or
generated by the contractor under this contract in the possession of the
contractor, including those described at paragraph (b) of this clause,
shall be subject to inspection, copying, and audit by the Government or
its designees at all reasonable times, and the contractor shall afford
the Government or its designees reasonable facilities for such
inspection, copying, and audit; provided, however, that upon request by
the contracting officer, the contractor shall deliver such records to a
location specified by the contracting officer for inspection, copying,
and audit. The Government or its designees shall use such records in
accordance with applicable federal laws (including the Privacy Act), as
appropriate.

\(e\) Applicability. Paragraphs (b), (c), and (d) of this clause apply
to all records without regard to the date or origination of such
records.

\(f\) Records retention standards. Special records retention standards,
described at DOE Order 200.1, Information Management Program (version in
effect on effective date of contract), are applicable for the classes of
records described therein, whether or not the records are owned by the
Government or the contractor. In addition, the contractor shall retain
individual radiation exposure records generated in the performance of
work under this contract until DOE authorizes disposal. The Government
may waive application of these record retention schedules, if, upon
termination or completion of the contract, the Government exercises its
right under paragraph (c) of this clause to obtain copies and delivery
of records described in paragraphs (a) and (b) of this clause.

\(g\) Subcontracts. The contractor shall include the requirements of
this clause in all subcontracts that are of a cost-reimbursement type if
any of the following factors is present:

\(1\) The value of the subcontract is greater than \$2 million (unless
specifically waived by the contracting officer);

\(2\) The contracting officer determines that the subcontract is, or
involves, a critical task related to the contract; or

\(3\) The subcontract includes 48 CFR 970.5223-1, Integration of
Environment, Safety, and Health into Work Planning and Execution, or
similar clause.

(End of Clause)

**970.5208-1 Printing.**

As prescribed in 48 CFR 970.0808-3, insert the following clause:

PRINTING (DEC 2000)

\(a\) To the extent that duplicating or printing services may be
required in the performance of this contract, the Contractor shall
provide or secure such services in accordance with the Government
Printing and Binding Regulations, Title 44 of the U.S. Code, and DOE
Directives relative thereto.

\(b\) The term \"Printing\" includes the following processes:
Composition, plate making, presswork, binding, microform publishing, or
the end items produced by such processes. Provided, however, that
performance of a requirement under this contract involving the
duplication of less than 5,000 copies of a single page, or no more than
25,000 units in the aggregate of multiple pages, will not be deemed to
be printing.

\(c\) Printing services not obtained in compliance with this guidance
shall result in the cost of such printing being disallowed.

\(d\) The Contractor shall include the substance of this clause in all
subcontracts hereunder which require printing (as that term is defined
in Title I of the U.S. Government Printing and Binding Regulations).

(End of Clause)

**970.5209-1 Requirement for guarantee of performance.**

As prescribed in 48 CFR 970.0970-2, the contracting officer shall insert
the following provision in solicitations for management and operating
contracts:

REQUIREMENT FOR GUARANTEE OF PERFORMANCE (DEC 2000)

The successful offeror is required by other provisions of this
solicitation to organize a dedicated corporate entity to carry out the
work under the contract to be awarded as a result of this solicitation.
The successful offeror will be required, as part of the determination of
responsibility of the newly organized, dedicated corporate entity and as
a condition of the award of the contract to that entity, to furnish a
guarantee of that entity\'s performance. That guarantee of performance
must be satisfactory in all respects to the Department of Energy.

(End of Clause)

**970.5211-1 Work authorization.**

As prescribed in 970.1170-2, insert the following clause

WORK AUTHORIZATION (May 2007)

\(a\) Work authorization proposal. Prior to the start of each fiscal
year, the Contracting Officer or designee shall provide the contractor
with program execution guidance in sufficient detail to enable the
contractor to develop an estimated cost, scope, and schedule. In
addition, the Contracting Officer may unilaterally assign work. The
Contractor shall submit to the Contracting Officer or other designated
official, a detailed description of work, a budget of estimated costs,
and a schedule of performance for the work it recommends be undertaken
during that upcoming fiscal year.

\(b\) Cost estimates. The Contractor and the Contracting Officer shall
establish a budget of estimated costs, description of work, and schedule
of performance for each work assignment. If agreement cannot be reached
as to scope, schedule, and estimated cost, the Contracting Officer may
issue a unilateral work authorization, pursuant to this clause. The work
authorization, whether issued bilaterally or unilaterally shall become
part of the contract. No activities shall be authorized or costs
incurred prior to Contracting Officer issuance of a work authorization
or direction concerning continuation of activities of the contract.

\(c\) Performance. The Contractor shall perform work as specified in the
work authorization, consistent with the terms and conditions of this
contract.

\(d\) Modification. The Contracting Officer may at any time, without
notice, issue changes to work authorizations within the overall scope of
the contract. A proposal for adjustment in estimated costs and schedule
for performance of work, recognizing work made unnecessary as a result,
along with new work, shall be submitted by the contractor in accordance
with paragraph (a) of this clause. Resolution shall be in accordance
with paragraph (b) of this clause.

\(e\) Increase in estimated cost. The Contractor shall notify the
Contracting Officer immediately whenever the cost incurred, plus the
projected cost to complete work is projected to differ (plus or minus)
from the estimate by 10 percent. The Contractor shall submit a proposal
for modification in accordance with paragraph (a) of this clause.
Resolution shall be in accordance with paragraph (b) of this clause.

\(f\) Expenditure of funds and incurrence of costs. The expenditure of
monies by the contractor in the performance of all authorized work shall
be governed by the \`\`Obligation of Funds\'\' or equivalent clause of
the contract.

\(g\) Responsibility to achieve environment, safety, health, and
security compliance. Notwithstanding other provisions of the contract,
the contractor may, in the event of an emergency, take that corrective
action necessary to sustain operations consistent with applicable
environmental, safety, health, and security statutes, regulations, and
procedures. If such action is taken, the Contractor shall notify the
Contracting Officer within 24 hours of initiation and, within 30 days,
submit a proposal for adjustment in estimated costs and schedule
established in accordance with paragraphs (a) and (b) of this clause.

(End of clause) (72 FR 29429, May 29, 2007)

**970.5215-1 Total available fee: Base fee amount and performance fee
amount.**

As prescribed in 48 CFR 970.1504-5(a), insert the following clause. The
clause should be tailored to reflect the contract\'s actual inclusion of
base fee amount and performance fee amount.

TOTAL AVAILABLE FEE: BASE FEE AMOUNT AND

PERFORMANCE FEE AMOUNT (DEC 2000)

\(a\) Total available fee. Total available fee, consisting of a base fee
amount (which may be zero) and a performance fee amount (consisting of
an incentive fee component for objective performance requirements, an
award fee component for subjective performance requirements, or both)
determined in accordance with the provisions of this clause, is
available for payment in accordance with the clause of this contract
entitled, \"Payments and advances.\"

\(b\) Fee Negotiations. Prior to the beginning of each fiscal year under
this contract, or other appropriate period as mutually agreed upon and,
if exceeding one year, approved by the Senior Procurement Executive, or
designee, the contracting officer and Contractor shall enter into
negotiation of the requirements for the year or appropriate period,
including the evaluation areas and individual requirements subject to
incentives, the total available fee, and the allocation of fee. The
contracting officer shall modify this contract at the conclusion of each
negotiation to reflect the negotiated requirements, evaluation areas and
individual requirements subject to incentives, the total available fee,
and the allocation of fee. In the event the parties fail to agree on the
requirements, the evaluation areas and individual requirements subject
to incentives, the total available fee, or the allocation of fee, a
unilateral determination will be made by the contracting officer. The
total available fee amount shall be allocated to a twelve month cycle
composed of one or more evaluation periods, or such longer period as may
be mutually agreed to between the parties and approved by the Senior
Procurement Executive, or designee.

\(c\) Determination of Total Available Fee Amount Earned. (1) The
Government shall, at the conclusion of each specified evaluation period,
evaluate the contractor\'s performance of all requirements, including
performance based incentives completed during the period, and determine
the total available fee amount earned. At the contracting officer\'s
discretion, evaluation of incentivized performance may occur at the
scheduled completion of specific incentivized requirements.

\(2\) The DOE Operations/Field Office Manager, or designee, will be
(insert title of DOE Operations/Field Office Manager, or designee). The
contractor agrees that the determination as to the total available fee
earned is a unilateral determination made by the DOE Operations/Field
Office Manager, or designee.

\(3\) The evaluation of contractor performance shall be in accordance
with the Performance Evaluation and Measurement Plan(s) described in
subparagraph (d) of this clause unless otherwise set forth in the
contract. The Contractor shall be promptly advised in writing of the fee
determination, and the basis of the fee determination. In the event that
the contractor\'s performance is considered to be less than the level of
performance set forth in the Statement of Work, as amended to include
the current Work Authorization Directive or similar document, for any
contract requirement, it will be considered by the DOE Operations/Field
Office Manager, or designee, who may at his/her discretion adjust the
fee determination to reflect such performance. Any such adjustment shall
be in accordance with the clause entitled, \"Conditional Payment of Fee,
Profit, and Other Incentives --- Facility Management Contracts\" if
contained in the contract.

\(d\) Performance Evaluation and Measurement Plan(s). To the extent not
set forth elsewhere in the contract:

\(1\) The Government shall establish a Performance Evaluation and
Measurement Plan(s) upon which the determination of the total available
fee amount earned shall be based. The Performance Evaluation and
Measurement Plan(s) will address all of the requirements of contract
performance specified in the contract directly or by reference. A copy
of the Performance Evaluation and Measurement Plan(s) shall be provided
to the Contractor:

\(i\) prior to the start of an evaluation period if the requirements,
evaluation areas, specific incentives, amount of fee, and allocation of
fee to such evaluation areas and specific incentives have been mutually
agreed to by the parties; or

\(ii\) not later than thirty days prior to the scheduled start date of
the evaluation period, if the requirements, evaluation areas, specific
incentives, amount of fee, and allocation of fee to such evaluation
areas and specific incentives have been unilaterally established by the
contracting officer.

\(2\) The Performance Evaluation and Measurement Plan(s) will set forth
the criteria upon which the Contractor will be evaluated relating to any
technical, schedule, management, and/or cost objectives selected for
evaluation. Such criteria should be objective, but may also include
subjective criteria. The Plan(s) shall also set forth the method by
which the total available fee amount will be allocated and the amount
earned determined.

\(3\) The Performance Evaluation and Measurement Plan(s) may, consistent
with the contract statement of work, be revised during the period of
performance. The contracting officer shall notify the contractor:

\(i\) of such unilateral changes at least ninety calendar days prior to
the end of the affected evaluation period and at least thirty calendar
days prior to the effective date of the change;

\(ii\) of such bilateral changes at least sixty calendar days prior to
the end of the affected evaluation period; or

\(iii\) if such change, whether unilateral or bilateral, is urgent and
high priority, at least thirty calendar days prior to the end of the
evaluation period.

\(e\) Schedule for total available fee amount earned determinations. The
DOE Operations/Field Office Manager, or designee, shall issue the final
total available fee amount earned determination in accordance with: the
schedule set forth in the Performance Evaluation and Measurement
Plan(s); or as otherwise set forth in this contract. However, a
determination must be made within sixty calendar days after the receipt
by the contracting officer of the Contractor\'s self-assessment, if one
is required or permitted by paragraph (f) of this clause, or seventy
calendar days after the end of the evaluation period, whichever is
later, or a longer period if the Contractor and contracting officer
agree. If the contracting officer evaluates the Contractor\'s
performance of specific requirements on their completion, the payment of
any earned fee amount must be made within seventy calendar days (or such
other time period as mutually agreed to between the contracting officer
and the Contractor) after such completion. If the determination is
delayed beyond that date, the Contractor shall be entitled to interest
on the determined total available fee amount earned at the rate
established by the Secretary of the Treasury under section 12 of the
Contract Disputes Act of 1978 *(41 U.S.C. 611)* that is in effect on the
payment date. This rate is referred to as the \"Renegotiation Board
Interest Rate,\" and is published in the Federal Register semiannually
on or about January 1 and July 1. The interest on any late total
available fee amount earned determination will accrue daily and be
compounded in 30-day increments inclusive from the first day after the
schedule determination date through the actual date the determination is
issued. That is, interest accrued at the end of any 30-day period will
be added to the determined amount of fee earned and be subject to
interest if not paid in the succeeding 30-day period.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(1), when
the award fee cycle consists of two or more evaluation periods, add the
following to paragraph (c):

\(4\) At the sole discretion of the Government, unearned total available
fee amounts may be carried over from one evaluation period to the next,
so long as the periods are within the same award fee cycle.

Alternate II (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(2), when
the award fee cycle consists of one evaluation period, add the following
to paragraph (c):

\(4\) Award fee not earned during the evaluation period shall not be
allocated to future evaluation periods.

Alternate III (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(3), when
the DOE Operations/Field Office Manager, or designee, requires the
contractor to submit a self-assessment, add the following as paragraph
(f):

\(f\) Contractor self-assessment. Following each evaluation period, the
Contractor shall submit a self-assessment within (Insert Number)
calendar days after the end of the period. This self-assessment shall
address both the strengths and weaknesses of the Contractor\'s
performance during the evaluation period. Where deficiencies in
performance are noted, the Contractor shall describe the actions planned
or taken to correct such deficiencies and avoid their recurrence. The
DOE Operations/Field Office Manager, or designee, will review the
Contractor\'s self-assessment, if submitted, as part of its independent
evaluation of the contractor\'s management during the period. A
self-assessment, in and of itself may not be the only basis for the
award fee determination.

Alternate IV (DEC 2000). As prescribed in 48 CFR 970.1504-5(a)(4), when
the DOE Operations/Field Office Manager, or designee, permits the
contractor to submit a self-assessment at the contractor\'s option, add
the following text as paragraph (f):

\(f\) Contractor self-assessment. Following each evaluation period, the
Contractor may submit a self-assessment, provided such assessment is
submitted within (Insert Number) calendar days after the end of the
period. This self-assessment shall address both the strengths and
weaknesses of the Contractor\'s performance during the evaluation
period. Where deficiencies in performance are noted, the Contractor
shall describe the actions planned or taken to correct such deficiencies
and avoid their recurrence. The DOE Operations/Field Office Manager, or
designee, will review the Contractor\'s self-assessment, if submitted,
as part of its independent evaluation of the Contractor\'s management
during the period. A self-assessment, in and of itself may not be the
only basis for the award fee determination.

**970.5215-2 \[Removed and Reserved\].**

\[71 FR 16241, Mar. 31, 2006\]

**970.5215-3 Conditional payment of fee, profit, or incentives.**

As prescribed in 48 CFR 970.1504-5(c), insert the following clause:

CONDITIONAL PAYMENT OF FEE, PROFIT, AND OTHER

INCENTIVES --- FACILITY MANAGEMENT CONTRACTS (JAN 2004)

\(a\) General. (1) The payment of earned fee, fixed fee, profit, or
share of cost savings under this contract is dependent upon:

\(i\) The contractor\'s or contractor employees' compliance with the
terms and conditions of this contract relating to environment, safety
and health (ES&H), which includes worker safety and health (WS&H),
including performance under an approved Integrated Safety Management
System (ISMS); and

\(ii\) The contractor\'s or contractor employees' compliance with the
terms and conditions of this contract relating to the safeguarding of
Restricted Data and other classified information.

\(2\) The ES&H performance requirements of this contract are set forth
in its ES&H terms and conditions, including the DOE approved contractor
ISMS or similar document. Financial incentives for timely mission
accomplishment or cost effectiveness shall never compromise or impede
full and effective implementation of the ISMS and full ES&H compliance.

\(3\) The performance requirements of this contract relating to the
safeguarding of Restricted Data and other classified information are set
forth in the clauses of this contract entitled, "Security" and "Laws,
Regulations, and DOE Directives," as well as in other terms and
conditions.

\(4\) If the contractor does not meet the performance requirements of
this contract relating to ES&H or to the safeguarding of Restricted Data
and other classified information during any performance evaluation
period established under the contract pursuant to the clause of this
contract entitled, \`\`Total Available Fee: Base Fee Amount and
Performance Fee Amount,\'\' otherwise earned fee, fixed fee, profit or
share of cost savings may be unilaterally reduced by the contracting
officer.

\(b\) Reduction Amount. (1) The amount of earned fee, fixed fee, profit,
or share of cost savings that may be unilaterally reduced will be
determined by the severity of the performance failure pursuant to the
degrees specified in paragraphs (c) and (d) of this clause.

\(2\) If a reduction of earned fee, fixed fee, profit, or share of cost
savings is warranted, unless mitigating factors apply, such reduction
shall not be less than 26% nor greater than 100% of the amount of earned
fee, fixed fee, profit, or the contractor\'s share of cost savings for a
first degree performance failure, not less than 11% nor greater than 25%
for a second degree performance failure, and up to 10% for a third
degree performance failure.

\(3\) In determining the amount of the reduction and the applicability
of mitigating factors, the contracting officer must consider the
contractor's overall performance in meeting the ES&H or security
requirements of the contract. Such consideration must include
performance against any site specific performance criteria/requirements
that provide additional definition, guidance for the amount of
reduction, or guidance for the applicability of mitigating factors. In
all cases, the contracting officer must consider mitigating factors that
may warrant a reduction below the applicable range (see 48 CFR
970.1504-1-2). The mitigating factors include, but are not limited to,
the following ((v), (vi), (vii) and (viii) apply to ES&H only).

\(i\) Degree of control the contractor had over the event or incident.

\(ii\) Efforts the contractor had made to anticipate and mitigate the
possibility of the event in advance.

\(iii\) Contractor self-identification and response to the event to
mitigate impacts and recurrence.

\(iv\) General status (trend and absolute performance) of: ES&H and
compliance in related areas;

or of safeguarding Restricted Data and other classified information and
compliance in related areas.

\(v\) Contractor demonstration to the contracting officer's satisfaction
that the principles of industrial ES&H standards are routinely practiced
(e.g., Voluntary Protection Program, ISO 14000).

\(vi\) Event caused by \"Good Samaritan\" act by the contractor (e.g.,
offsite emergency response).

\(vii\) Contractor demonstration that a performance measurement system
is routinely used to improve and maintain ES&H performance (including
effective resource allocation) and to support DOE corporate
decision-making (e.g., policy, ES&H programs).

\(viii\) Contractor demonstration that an Operating Experience and
Feedback Program is functioning that demonstrably affects continuous
improvement in ES&H by use of lessons-learned and best practices inter-
and intra-DOE sites.

(4)(i) The amount of fee, fixed fee, profit, or share of cost savings
that is otherwise earned by a contractor during an evaluation period may
be reduced in accordance with this clause if it is determined that a
performance failure warranting a reduction under this clause occurs
within the evaluation period.

\(ii\) The amount of reduction under this clause, in combination with
any reduction made under any other clause in the contract, shall not
exceed the amount of fee, fixed fee, profit, or the contractor\'s share
of cost savings that is otherwise earned during the evaluation period.

\(iii\) For the purposes of this clause, earned fee, fixed fee, profit,
or share of cost savings for the evaluation period shall mean the amount
determined by the contracting officer or fee determination official as
otherwise payable based on the contractor\'s performance during the
evaluation period. Where the contract provides for financial incentives
that extend beyond a single evaluation period, this amount shall also
include: any provisional amounts determined otherwise payable in the
evaluation period; and, if provisional payments are not provided for,
the allocable amount of any incentive determined otherwise payable at
the conclusion of a subsequent evaluation period. The allocable amount
shall be the total amount of the earned incentive divided by the number
of evaluation periods over which it was earned.

\(iv\) The Government will effect the reduction as soon as practicable
after the end of the evaluation period in which the performance failure
occurs. If the Government is not aware of the failure, it will effect
the reduction as soon as practical after becoming aware. For any portion
of the reduction requiring an allocation the Government will effect the
reduction at the end of the evaluation period in which it determines the
total amount earned under the incentive. If at any time a reduction
causes the sum of the payments the contractor has received for fee,
fixed fee, profit, or share of cost savings to exceed the sum of fee,
fixed fee, profit, or share of cost savings the contractor has earned
(provisionally or otherwise), the contractor shall immediately return
the excess to the Government. (What the contractor "has earned" reflects
any reduction made under this or any other clause of the contract.)

\(v\) At the end of the contract:

\(A\) The Government will pay the contractor the amount by which the sum
of fee, fixed fee, profit, or share of cost savings the contractor has
earned exceeds the sum of the payments the contractor has received; or

\(B\) The contractor shall return to the Government the amount by which
the sum of the payments the contractor has received exceeds the sum of
fee, fixed fee, profit, or share of cost savings the contractor has
earned. (What the contractor "has earned\'\' reflects any reduction made
under this or any other clause of the contract.)

\(c\) Environment, Safety and Health (ES&H). Performance failures occur
if the contractor does not comply with the contract's ES&H terms and
conditions, including the DOE approved contractor ISMS. The degrees of
performance failure under which reductions of earned or fixed fee,
profit, or share of cost savings will be determined are:

\(1\) First Degree: Performance failures that are most adverse to ES&H.
Failure to develop and obtain required DOE approval of an ISMS is
considered first degree. The Government will perform necessary review of
the ISMS in a timely manner and will not unreasonably withhold approval
of the contractor's ISMS. The following performance failures or
performance failures of similar import will be considered first degree.

\(i\) Type A accident (defined in DOE Order 225.1A).

\(ii\) Two Second Degree performance failures during an evaluation
period.

\(2\) Second Degree: Performance failures that are significantly adverse
to ES&H. They include failures to comply with an approved ISMS that
result in an actual injury, exposure, or exceedence that occurred or
nearly occurred but had minor practical long-term health consequences.
They also include breakdowns of the Safety Management System. The
following performance failures or performance failures of similar import
will be considered second degree:

\(i\) Type B accident (defined in DOE Order 225.1A).

\(ii\) Non-compliance with an approved ISMS that results in a near miss
of a Type A or B accident. A near miss is a situation in which an
inappropriate action occurs, or a necessary action is omitted, but does
not result in an adverse effect.

\(iii\) Failure to mitigate or notify DOE of an imminent danger
situation after discovery, where such notification is a requirement of
the contract.

\(3\) Third Degree: Performance failures that reflect a lack of focus on
improving ES&H. They include failures to comply with an approved ISMS
that result in potential breakdown of the System. The following
performance failures or performance failures of similar import will be
considered third degree:

\(i\) Failure to implement effective corrective actions to address
deficiencies/non-compliances documented through: external (e.g.,
Federal) oversight and/or reported per DOE Order 232.1A requirements; or
internal oversight of DOE Order 440.1A requirements.

\(ii\) Multiple similar non-compliances identified by external (e.g.,
Federal) oversight that in aggregate indicate a significant programmatic
breakdown.

\(iii\) Non-compliances that either have, or may have, significant
negative impacts to the worker, the public, or the environment or that
indicate a significant programmatic breakdown.

\(iv\) Failure to notify DOE upon discovery of events or conditions
where notification is required by the terms and conditions of the
contract.

\(d\) Safeguarding Restricted Data and Other Classified Information.
Performance failures occur if the contractor does not comply with the
terms and conditions of this contract relating to the safeguarding of
Restricted Data and other classified information. The degrees of
performance failure under which reductions of fee, profit, or share of
cost savings will be determined are as follows:

\(1\) First Degree: Performance failures that have been determined, in
accordance with applicable law, DOE regulation, or directive, to have
resulted in, or that can reasonably be expected to result in,
exceptionally grave damage to the national security. The following are
examples of performance failures or performance failures of similar
import that will be considered first degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating a risk of, loss,
compromise, or unauthorized disclosure of Top Secret Restricted Data or
other information classified as Top Secret, any classification level of
information in a Special Access Program (SAP), information identified as
sensitive compartmented information (SCI), or high risk nuclear
weapons-related data.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Top Secret
Restricted Data, or other information classified as Top Secret, any
classification level of information in a SAP, information identified as
SCI, or high risk nuclear weapons-related data.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Top Secret Restricted Data, or other information
classified as Top Secret, any classification level of information in a
SAP, information identified as SCI, or high risk nuclear weapons-related
data.

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Top Secret Restricted
Data or other information classified as Top Secret, any classification
level of information in a SAP, information identified as SCI, or high
risk nuclear weapons-related data.

\(2\) Second Degree: Performance failures that have been determined, in
accordance with applicable law, DOE regulation, or directive, to have
actually resulted in, or that can reasonably be expected to result in,
serious damage to the national security. The following are examples of
performance failures or performance failures of similar import that will
be considered second degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Secret Restricted Data or other
information classified as Secret.

\(ii\) Contractor actions that result in a breakdown of the safeguards
and security management system that can reasonably be expected to result
in the loss, compromise, or unauthorized disclosure of Secret Restricted
Data, or other information classified as Secret.

\(iii\) Failure to promptly report the loss, compromise, or unauthorized
disclosure of Restricted Data or other classified information regardless
of classification (except for information covered by paragraph
(d)(1)(iii) of this clause).

\(iv\) Failure to timely implement corrective actions stemming from the
loss, compromise, or unauthorized disclosure of Secret Restricted Data
or other classified information classified as Secret.

\(3\) [Third Degree]{.underline}: Performance failures that have been
determined, in accordance with applicable law, regulation, or DOE
directive, to have actually resulted in, or that can reasonably be
expected to result in, undue risk to the common defense and security. In
addition, this category includes performance failures that result from a
lack of contractor management and/or employee attention to the proper
safeguarding of Restricted Data and other classified information. These
performance failures may be indicators of future, more severe
performance failures and/or conditions, and if identified and corrected
early would prevent serious incidents. The following are examples of
performance failures or performance failures of similar import that will
be considered third degree:

\(i\) Non-compliance with applicable laws, regulations, and DOE
directives actually resulting in, or creating risk of, loss, compromise,
or unauthorized disclosure of Restricted Data or other information
classified as Confidential.

\(ii\) Failure to promptly report alleged or suspected violations of
laws, regulations, or directives pertaining to the safeguarding of
Restricted Data or other classified information.

\(iii\) Failure to identify or timely execute corrective actions to
mitigate or eliminate identified vulnerabilities and reduce residual
risk relating to the protection of Restricted Data or other classified
information in accordance with the contractor's Safeguards and Security
Plan or other security plan, as applicable.

\(iv\) Contractor actions that result in performance failures which unto
themselves pose minor risk, but when viewed in the aggregate indicate
degradation in the integrity of the contractor's safeguards and security
management system relating to the protection of Restricted Data and
other classified information.

(End of Clause)

Alternate I \[JAN 2004\]. As prescribed in 48 CFR 970.1504-5(c)(2),
replace paragraphs (a), (b)(1), (b)(2), and (b)(3) of the basic clause
with the following paragraphs (a), (b)(1), (b)(2), and (b)(3) and delete
paragraph (d).

\(a\) General. (1) The payment of earned fee, fixed fee, profit, or
share of cost savings under this contract is dependent upon the
contractor\'s or contractor employees' compliance with the terms and
conditions of this contract relating to environment, safety and health
(ES&H), which includes worker safety and health (WS&H), including
performance under an approved Integrated Safety Management System
(ISMS).

\(2\) The ES&H performance requirements of this contract are set forth
in its ES&H terms and conditions, including the DOE approved contractor
ISMS or similar document. Financial incentives for timely mission
accomplishment or cost effectiveness shall never compromise or impede
full and effective implementation of the ISMS and full ES&H compliance.

\(3\) If the contractor does not meet the performance requirements of
this contract relating to ES&H during any performance evaluation period
established under the contract pursuant to the clause of this contract
entitled, \`\`Total Available Fee: Base Fee Amount and Performance Fee
Amount,\'\' otherwise earned fee, fixed fee, profit or share of cost
savings may be unilaterally reduced by the contracting officer.

\(b\) Reduction Amount. (1) The amount of earned fee, fixed fee, profit,
or share of cost savings that may be unilaterally reduced will be
determined by the severity of the performance failure pursuant to the
degrees specified in paragraph (c) of this clause.

\(2\) If a reduction of earned fee, fixed fee, profit, or share of cost
savings is warranted, unless mitigating factors apply, such reduction
shall not be less than 26% nor greater than 100% of the amount of earned
fee, fixed fee, profit, or the contractor\'s share of cost savings for a
first degree performance failure, not less than 11% nor greater than 25%
for a second degree performance failure, and up to 10% for a third
degree performance failure.

\(3\) In determining the amount of the reduction and the applicability
of mitigating factors, the contracting officer must consider the
contractor's overall performance in meeting the ES&H requirements of the
contract. Such consideration must include performance against any site
specific performance criteria/requirements that provide additional
definition, guidance for the amount of reduction, or guidance for the
applicability of mitigating factors. In all cases, the contracting
officer must consider mitigating factors that may warrant a reduction
below the applicable range (see 48 CFR 970.1504-1-2). The mitigating
factors include the following.

\(i\) Degree of control the contractor had over the event or incident.

\(ii\) Efforts the contractor had made to anticipate and mitigate the
possibility of the event in advance.

\(iii\) Contractor self-identification and response to the event to
mitigate impacts and recurrence.

\(iv\) General status (trend and absolute performance) of ES&H and
compliance in related areas.

\(v\) Contractor demonstration to the Contracting Officer's satisfaction
that the principles of industrial ES&H standards are routinely practiced
(e.g., Voluntary Protection Program Star Status, or ISO 14000
Certification).

\(vi\) Event caused by \"Good Samaritan\" act by the contractor (e.g.,
offsite emergency response).

\(vii\) Contractor demonstration that a performance measurement system
is routinely used to improve and maintain ES&H performance (including
effective resource allocation) and to support DOE corporate
decision-making (e.g., policy, ES&H programs).

\(viii\) Contractor demonstration that an Operating Experience and
Feedback Program is functioning that demonstrably affects continuous
improvement in ES&H by use of lessons-learned and best practices inter-
and intra-DOE sites.

Alternate II \[JAN 2004\]. As prescribed in 48 CFR 970.1504-5(c)(3),
insert the following as paragraphs (e) and (f) in contracts awarded on a
cost-plus-award fee, incentive fee or multiple fee basis (if Alternate I
is also used, redesignate the following as paragraphs (d) and (e)).

\(e\) Minimum requirements for specified level of performance. (1) At a
minimum the contractor must perform the following:

\(i\) The requirements with specific incentives which do not require the
achievement of cost efficiencies in order to be performed at the level
of performance set forth in the Statement of Work, Work Authorization
Directive, or similar document unless an otherwise minimum level of
performance has been established in the specific incentive;

\(ii\) All of the performance requirements directly related to
requirements specifically incentivized which do not require the
achievement of cost efficiencies in order to be performed at a level of
performance such that the overall performance of these related
requirements is at an acceptable level; and

\(iii\) All other requirements at a level of performance such that the
total performance of the contract is not jeopardized.

\(2\) The evaluation of the Contractor\'s achievement of the level of
performance shall be unilaterally determined by the Government. To the
extent that the Contractor fails to achieve the minimum performance
levels specified in the Statement of Work, Work Authorization Directive,
or similar document, during the performance evaluation period, the DOE
Operations/Field Office Manager, or designee, may reduce any otherwise
earned fee, fixed fee, profit, or shared net savings for the performance
evaluation period. Such reduction shall not result in the total of
earned fee, fixed fee, profit, or shared net savings being less than 25%
of the total available fee amount. Such 25% shall include base fee, if
any.

\(f\) Minimum requirements for cost performance. (1) Requirements
incentivized by other than cost incentives must be performed within
their specified cost constraint and must not adversely impact the costs
of performing unrelated activities.

\(2\) The performance of requirements with a specific cost incentive
must not adversely impact the costs of performing unrelated
requirements.

\(3\) The contractor\'s performance within the stipulated cost
performance levels for the performance evaluation period shall be
determined by the Government. To the extent the contractor fails to
achieve the stipulated cost performance levels, the DOE Operations/Field
Office Manager, or designee, may reduce in whole or in part any
otherwise earned fee, fixed fee, profit, or shared net savings for the
performance evaluation period. Such reduction shall not result in the
total of earned fee, fixed fee, profit or shared net savings being less
than 25% of the total available fee amount. Such 25% shall include base
fee, if any.

\[68 FR 68771, Dec. 10, 2003\]

**970.5215-4 Cost reduction.**

As prescribed in 48 CFR 970.1504-5(d), insert the following clause:

COST REDUCTION (DEC 2000)

\(a\) General. It is the Department of Energy\'s (DOE\'s) intent to have
its facilities and laboratories operated in an efficient and effective
manner. To this end, the Contractor shall assess its operations and
identify areas where cost reductions would bring cost efficiency to
operations without adversely affecting the level of performance required
by the contract. The Contractor, to the maximum extent practical, shall
identify areas where cost reductions may be effected, and develop and
submit Cost Reduction Proposals (CRPs) to the contracting officer. If
accepted, the Contractor may share in any shared net savings from
accepted CRPs in accordance with paragraph (g) of this clause.

\(b\) Definitions. Administrative cost is the contractor cost of
developing and administering the CRP.

Design, process, or method change is a change to a design, process, or
method which has established cost, technical and schedule baseline, is
defined, and is subject to a formal control procedure. Such a change
must be innovative, initiated by the contractor, and applied to a
specific project or program.

Development cost is the Contractor cost of up-front planning,
engineering, prototyping, and testing of a design, process, or method.

DOE cost is the Government cost incurred implementing and validating the
CRP.

Implementation cost is the Contractor cost of tooling, facilities,
documentation, etc., required to effect a design, process, or method
change once it has been tested and approved.

Net Savings means a reduction in the total amount (to include all
related costs and fee) of performing the effort where the savings revert
to DOE control and may be available for deobligation. Such savings may
result from a specific cost reduction effort which is negotiated on a
cost-plus-incentive-fee, fixed-price incentive, or firm-fixed-price
basis, or may result directly from a design, process, or method change.
They may also be savings resulting from formal or informal direction
given by DOE or from changes in the mission, work scope, or routine
reorganization of the Contractor due to changes in the budget.

Shared Net Savings are those net savings which result from:

\(1\) a specific cost reduction effort which is negotiated on a
cost-plus-incentive-fee or fixed-price incentive basis, and is the
difference between the negotiated target cost of performing an effort as
negotiated and the actual allowable cost of performing that effort; or

\(2\) a design, process, or method change, which occurs in the fiscal
year in which the change is accepted and the subsequent fiscal year, and
is the difference between the estimated cost of performing an effort as
originally planned and the actual allowable cost of performing that same
effort utilizing a revised plan intended to reduce costs along with any
Contractor development costs, implementation costs, administrative
costs, and DOE costs associated with the revised plan. Administrative
costs and DOE costs are only included at the discretion of the
contracting officer. Savings resulting from formal or informal direction
given by the DOE or changes in the mission, work scope, or routine
reorganization of the Contractor due to changes in the budget are not to
be considered as shared net savings for purposes of this clause and do
not qualify for incentive sharing.

\(c\) Procedure for submission of CRPs. (1) CRPs for the establishment
of cost-plus-incentive-fee, fixed-price incentive, or firm-fixed-price
efforts or for design, process, or methods changes submitted by the
Contractor shall contain, at a minimum, the following:

\(i\) Current Method (Baseline)-A verifiable description of the current
scope of work, cost, and schedule to be impacted by the initiative, and
supporting documentation.

\(ii\) New Method (New Proposed Baseline)-A verifiable description of
the new scope of work, cost, and schedule, how the initiative will be
accomplished, and supporting documentation.

\(iii\) Feasibility Assessment-A description and evaluation of the
proposed initiative and benefits, risks, and impacts of implementation.
This evaluation shall include an assessment of the difference between
the current method (baseline) and proposed new method including all
related costs.

\(2\) In addition, CRPs for the establishment of
cost-plus-incentive-fee, fixed-price incentive, or firm-fixed-price
efforts shall contain, at a minimum, the following:

\(i\) The proposed contractual arrangement and the justification for its
use; and

\(ii\) A detailed cost/price estimate and supporting rationale. If the
approach is proposed on an incentive basis, minimum and maximum cost
estimates should be included along with any proposed sharing
arrangements.

\(d\) Evaluation and Decision. All CRPs must be submitted to and
approved by the contracting officer. Included in the information
provided by the CRP must be a discussion of the extent the proposed cost
reduction effort may:

\(1\) Pose a risk to the health and safety of workers, the community, or
to the environment;

\(2\) Result in a waiver or deviation from DOE requirements, such as DOE
Orders and joint oversight agreements;

\(3\) Require a change in other contractual agreements;

\(4\) Result in significant organizational and personnel impacts;

\(5\) Create a negative impact on the cost, schedule, or scope of work
in another area;

\(6\) Pose a potential negative impact on the credibility of the
Contractor or the DOE; and

\(7\) Impact successful and timely completion of any of the work in the
cost, technical, and schedule baseline.

\(e\) Acceptance or Rejection of CRPs. Acceptance or rejection of a CRP
is a unilateral determination made by the contracting officer. The
contracting officer will notify the Contractor that a CRP has been
accepted, rejected, or deferred within (Insert Number) days of receipt.
The only CRPs that will be considered for acceptance are those which the
Contractor can demonstrate, at a minimum, will:

\(1\) Result in net savings (in the sharing period if a design, process,
or method change);

\(2\) Not reappear as costs in subsequent periods; and

\(3\) Not result in any impairment of essential functions.

\(f\) The failure of the contracting officer to notify the Contractor of
the acceptance, rejection, or deferral of a CRP within the specified
time shall not be construed as approval.

\(g\) Adjustment to Original Estimated Cost and Fee. If a CRP is
established on a cost-plus-incentive-fee, fixed-price incentive or
firm-fixed-price basis, the originally estimated cost and fee for the
total effort shall be adjusted to remove the estimated cost and fee
amount associated with the CRP effort.

\(h\) Sharing Arrangement. If a CRP is accepted, the Contractor may
share in the shared net savings. For a CRP negotiated on a
cost-plus-incentive-fee or fixed-price incentive basis, with the
specific incentive arrangement (negotiated target costs, target fees,
share lines, ceilings, profit, etc.) set forth in the contractual
document authorizing the effort, the Contractor\'s share shall be the
actual fee or profit resulting from such an arrangement. For a CRP
negotiated as a cost savings incentive resulting from a design, process,
or method change, the Contractor\'s share shall be a percentage, not to
exceed 25% of the shared net savings. The specific percentage and
sharing period shall be set forth in the contractual document.

\(i\) Validation of Shared Net Savings. The contracting officer shall
validate actual shared net savings. If actual shared net savings cannot
be validated, the contractor will not be entitled to a share of the net
shared savings.

\(j\) Relationship to Other Incentives. Only those benefits of an
accepted CRP not rewardable under other clauses of this contract shall
be rewarded under this clause.

\(k\) Subcontracts. The Contractor may include a clause similar to this
clause in any subcontract. In calculating any estimated shared net
savings in a CRP under this contract, the Contractor\'s administration,
development, and implementation costs shall include any subcontractor\'s
allowable costs, and any CRP incentive payments to a subcontractor
resulting from the acceptance of such CRP. The Contractor may choose any
arrangement for subcontractor CRP incentive payments, provided that the
payments not reduce the DOE\'s share of shared net savings.

(End of Clause)

**970.5215-5 Limitation on fee.**

As prescribed in 48 CFR 970.1504-5(e), the contracting officer shall
insert the following provision:

LIMITATION ON FEE (DEC 2000)

\(a\) For the purpose of this solicitation, fee amounts shall not exceed
the total available fee allowed by the fee policy at 48 CFR
970.1504-1-1, or as specifically stated elsewhere in the solicitation.

\(b\) The Government reserves the unilateral right, in the event an
offeror\'s proposal is selected for award, to limit: fixed fee to not
exceed an amount established pursuant to 48 CFR 970.1504-1-5; and total
available fee to not exceed an amount established pursuant to 48 CFR
970.1504-1-9; or fixed fee or total available fee to an amount as
specifically stated elsewhere in the solicitation.

(End of Clause)

**970.5217-1 Work for Others Program.**

As prescribed in 48 CFR (DEAR) 970.1707-4 insert the following clause:

WORK FOR OTHERS PROGRAM (NON-DOE FUNDED WORK)(JAN 2005)

\(a\) Authority to Perform Work for Others. Pursuant to the Economy Act
of 1932, as amended (31 U.S.C. 1535), and the Atomic Energy Act of 1954,
as amended (42 U.S.C. 2011 *et seq.*) or other applicable authority, the
Contractor may perform work for non-DOE entities (sponsors) on a fully
reimbursable basis in accordance with this clause.

\(b\) Contractor's Implementation. The Contractor must draft, implement,
and maintain formal policies, practices, and procedures in accordance
with this clause, which must be submitted to the Contracting Officer for
review and approval.

\(c\) Conditions of Participation in Work for Others Program. The
Contractor:

\(1\) Must not perform Work for Others activities that would place it in
direct competition with the domestic private sector;

\(2\) Must not respond to a request for proposals or any other
solicitation from another Federal agency or non-Federal organization
that involves direct comparative competition, either as an offeror, team
member, or subcontractor to an offeror; however, the Contractor may,
following notification to the Contracting Officer, respond to Broad
Agency Announcements, Financial Assistance solicitations, and similar
solicitations from another Federal Agency or non-Federal organizations
when the selection is based on merit or peer review, the work involves
basic or applied research to further advance scientific knowledge or
understanding, and a response does not result in direct, comparative
competition;

\(3\) Must not commence work on any Work for Others activity until a
Work for Others proposal package has been approved by the DOE
Contracting Officer or designated representative;

\(4\) Must not incur project costs until receipt of DOE notification
that a budgetary resource is available for the project, except as
provided in 48 CFR 970.5232-6;

\(5\) Must ensure that all costs associated with the performance of the
work, including specifically all DOE direct costs and applicable
surcharges, are included in any Work for Others proposal;

\(6\) Must maintain records for the accumulation of costs and the
billing of such work to ensure that DOE's appropriated funds are not
used in support of Work for Others activities and to provide an
accounting of the expenditures to DOE and the sponsor upon request;

\(7\) Must perform all Work for Others projects in accordance with the
standards, policies, and procedures that apply to performance under this
contract, including but not limited to environmental, safety and health,
security, safeguards and classification procedures, and human and animal
research regulations;

\(8\) May subcontract portion(s) of a Work for Others project; however,
the Contractor must select the subcontractor and the work to be
subcontracted. Any subcontracted work must be in direct support of the
DOE contractor's performance as defined in the DOE approved work for
others proposal package; and,

\(9\) Must maintain a summary listing of project information for each
active Work for Others project, consisting of:

> \(i\) Sponsoring agency;
>
> \(ii\) Total estimated costs;
>
> \(iii\) Project title and description;
>
> \(iv\) Project point of contact; and,
>
> \(v\) Estimated start and completion dates.

\(d\) Negotiation and Execution of Work for Others Agreement.

\(1\) When delegated authority by the Contracting Officer, the
Contractor may negotiate the terms and conditions that will govern the
performance of a specific Work for Others project. Such terms and
conditions must be consistent with the terms, conditions, and
requirements of the Contractor's contract with DOE. The Contractor may
use DOE-approved contract terms and conditions as delineated in DOE
Manual 481.1-1A or terms and conditions previously approved by the
responsible Contracting Officer or authorized designee for agreements
with non-Federal entities. The Contractor must not hold itself out as
representing DOE when negotiating the proposed Work for Others
agreement.

\(2\) The Contractor must submit all Work for Others agreements to the
DOE Contracting Officer for DOE review and approval. The Contractor may
not execute any proposed agreement until it has received notice of DOE
approval.

\(e\) Preparation of Project Proposals. When the Contractor proposes to
perform Work for Others activities pursuant to this clause, it may
assist the project sponsor in the preparation of project proposal
packages including the preparation of cost estimates.

\(f\) Work for Others Appraisals. DOE may conduct periodic appraisals of
the Contractor's compliance with its Work for Others Program policies,
practices and procedures. The Contractor must provide facilities and
other support in conjunction with such appraisals as directed by the
Contracting Officer or authorized designee.

\(g\) Annual Work for Others Report. The Contractor must provide
assistance as required by the Contracting Officer or authorized designee
in the preparation of a DOE Annual Summary Report of Work for Others
Activities under the contract.

69 FR 75001, December 15, 2004

**970.5222-1 Collective Bargaining Agreements Management and Operating
Contracts.**

As prescribed in 48 CFR 970.2201-1-3, insert the following clause:

COLLECTIVE BARGAINING AGREEMENTS-MANAGEMENT

AND OPERATING CONTRACTS (DEC 2000)

When negotiating collective bargaining agreements applicable to the work
force under this contract, the Contractor shall use its best efforts to
ensure such agreements contain provisions designed to assure continuity
of services. All such agreements entered into during the contract period
of performance should provide that grievances and disputes involving the
interpretation or application of the agreement will be settled without
resorting to strike, lockout, or other interruption of normal
operations. For this purpose, each collective bargaining agreement
should provide an effective grievance procedure with arbitration as its
final step, unless the parties mutually agree upon some other method of
assuring continuity of operations. As part of such agreements,
management and labor should agree to cooperate fully with the Federal
Mediation and Conciliation Service. The contractor shall include the
substance of this clause in any subcontracts for protective services or
other services performed on the DOE-owned site which will affect the
continuity of operation of the facility.

(End of Clause)

**970.5222-2 Overtime management.**

As prescribed in 48 CFR 970.2201-2-2, insert the following clause:

OVERTIME MANAGEMENT (DEC 2000)

\(a\) The contractor shall maintain adequate internal controls to ensure
that employee overtime is authorized only if cost effective and
necessary to ensure performance of work under this contract.

\(b\) The contractor shall notify the contracting officer when in any
given year it is likely that overtime usage as a percentage of payroll
may exceed 4%.

\(c\) The contracting officer may require the submission, for approval,
of a formal annual overtime control plan whenever contractor overtime
usage as a percentage of payroll has exceeded, or is likely to exceed,
4%, or if the contracting officer otherwise deems overtime expenditures
excessive. The plan shall include, at a minimum:

\(1\) An overtime premium fund (maximum dollar amount);

\(2\) Specific controls for casual overtime for non-exempt employees;

\(3\) Specific parameters for allowability of exempt overtime;

\(4\) An evaluation of alternatives to the use of overtime; and

\(5\) Submission of a semi-annual report that includes for exempt and
non-exempt employees:

\(i\) Total cost of overtime;

\(ii\) Total cost of straight time;

\(iii\) Overtime cost as a percentage of straight-time cost;

\(iv\) Total overtime hours;

\(v\) Total straight-time hours; and

\(vi\) Overtime hours as a percentage of straight-time hours.

(End of Clause)

**970.5223-1 Integration of environment, safety, and health into work
planning and execution.**

As prescribed in 48 CFR 970.2303-2(a), insert the following clause:

INTEGRATION OF ENVIRONMENT, SAFETY, AND HEALTH

INTO WORK PLANNING AND EXECUTION (DEC 2000)

\(a\) For the purposes of this clause,

\(1\) Safety encompasses environment, safety and health, including
pollution prevention and waste minimization; and

\(2\) Employees include subcontractor employees.

\(b\) In performing work under this contract, the contractor shall
perform work safely, in a manner that ensures adequate protection for
employees, the public, and the environment, and shall be accountable for
the safe performance of work. The contractor shall exercise a degree of
care commensurate with the work and the associated hazards. The
contractor shall ensure that management of environment, safety and
health (ES&H) functions and activities becomes an integral but visible
part of the contractor\'s work planning and execution processes. The
contractor shall, in the performance of work, ensure that:

\(1\) Line management is responsible for the protection of employees,
the public, and the environment. Line management includes those
contractor and subcontractor employees managing or supervising employees
performing work.

\(2\) Clear and unambiguous lines of authority and responsibility for
ensuring (ES&H) are established and maintained at all organizational
levels.

\(3\) Personnel possess the experience, knowledge, skills, and abilities
that are necessary to discharge their responsibilities.

\(4\) Resources are effectively allocated to address ES&H, programmatic,
and operational considerations. Protecting employees, the public, and
the environment is a priority whenever activities are planned and
performed.

\(5\) Before work is performed, the associated hazards are evaluated and
an agreed-upon set of ES&H standards and requirements are established
which, if properly implemented, provide adequate assurance that
employees, the public, and the environment are protected from adverse
consequences.

\(6\) Administrative and engineering controls to prevent and mitigate
hazards are tailored to the work being performed and associated hazards.
Emphasis should be on designing the work and/or controls to reduce or
eliminate the hazards and to prevent accidents and unplanned releases
and exposures.

\(7\) The conditions and requirements to be satisfied for operations to
be initiated and conducted are established and agreed-upon by DOE and
the contractor. These agreed-upon conditions and requirements are
requirements of the contract and binding upon the contractor. The extent
of documentation and level of authority for agreement shall be tailored
to the complexity and hazards associated with the work and shall be
established in a Safety Management System.

\(c\) The contractor shall manage and perform work in accordance with a
documented Safety Management System (System) that fulfills all
conditions in paragraph (b) of this clause at a minimum. Documentation
of the System shall describe how the contractor will:

\(1\) Define the scope of work;

\(2\) Identify and analyze hazards associated with the work;

\(3\) Develop and implement hazard controls;

\(4\) Perform work within controls; and

\(5\) Provide feedback on adequacy of controls and continue to improve
safety management.

\(d\) The System shall describe how the contractor will establish,
document, and implement safety performance objectives, performance
measures, and commitments in response to DOE program and budget
execution guidance while maintaining the integrity of the System. The
System shall also describe how the contractor will measure system
effectiveness.

\(e\) The contractor shall submit to the contracting officer
documentation of its System for review and approval. Dates for
submittal, discussions, and revisions to the System will be established
by the contracting officer. Guidance on the preparation, content,
review, and approval of the System will be provided by the contracting
officer. On an annual basis, the contractor shall review and update, for
DOE approval, its safety performance objectives, performance measures,
and commitments consistent with and in response to DOE\'s program and
budget execution guidance and direction. Resources shall be identified
and allocated to meet the safety objectives and performance commitments
as well as maintain the integrity of the entire System. Accordingly, the
System shall be integrated with the contractor\'s business processes for
work planning, budgeting, authorization, execution, and change control.

\(f\) The contractor shall comply with, and assist the Department of
Energy in complying with, ES&H requirements of all applicable laws and
regulations, and applicable directives identified in the clause of this
contract entitled \"Laws, Regulations, and DOE Directives.\" The
contractor shall cooperate with Federal and non-Federal agencies having
jurisdiction over ES&H matters under this contract.

\(g\) The contractor shall promptly evaluate and resolve any
noncompliance with applicable ES&H requirements and the System. If the
contractor fails to provide resolution or if, at any time, the
contractor\'s acts or failure to act causes substantial harm or an
imminent danger to the environment or health and safety of employees or
the public, the contracting officer may issue an order stopping work in
whole or in part. Any stop work order issued by a contracting officer
under this clause (or issued by the contractor to a subcontractor in
accordance with paragraph (i) of this clause) shall be without prejudice
to any other legal or contractual rights of the Government. In the event
that the contracting officer issues a stop work order, an order
authorizing the resumption of the work may be issued at the discretion
of the contracting officer. The contractor shall not be entitled to an
extension of time or additional fee or damages by reason of, or in
connection with, any work stoppage ordered in accordance with this
clause.

\(h\) Regardless of the performer of the work, the contractor is
responsible for compliance with the ES&H requirements applicable to this
contract. The contractor is responsible for flowing down the ES&H
requirements applicable to this contract to subcontracts at any tier to
the extent necessary to ensure the contractor\'s compliance with the
requirements.

\(i\) The contractor shall include a clause substantially the same as
this clause in subcontracts involving complex or hazardous work on site
at a DOE-owned or-leased facility. Such subcontracts shall provide for
the right to stop work under the conditions described in paragraph (g)
of this clause. Depending on the complexity and hazards associated with
the work, the contractor may choose not to require the subcontractor to
submit a Safety Management System for the contractor\'s review and
approval.

(End of Clause)

**970.5223-2 Affirmative procurement program.**

As prescribed in 48 CFR (DEAR) 970.2304-2, insert the following clause
in contracts for the management and operation of DOE facilities,
including national laboratories.

AFFIRMATIVE PROCUREMENT PROGRAM (MAR 2003)

\(a\) In the performance of this contract, the Contractor shall comply
with the requirements of Executive Order 13101 and the U.S. Department
of Energy (DOE) Affirmative Procurement Program Guidance. This guidance
includes requirements concerning environmentally preferable products and
services, recycled content products and biobased products. This guidance
is available on the Internet.

\(b\) In complying with the requirements of paragraph (a) of this
clause, the Contractor shall coordinate its activities with the DOE
Recycling Coordinator. Reports required by paragraph (c) of this clause
shall be submitted through the DOE Recycling Coordinator.

\(c\) The Contractor shall prepare and submit reports, at the end of the
Federal fiscal year, on matters related to the acquisition of items
designated in EPA\'s Comprehensive Procurement Guidelines that Federal
agencies and their Contractors are to procure with recovered/recycled
content.

\(d\) If the Contractor subcontracts a significant portion of the
operation of the Government facility which includes the acquisition of
items designated in EPA\'s Comprehensive Procurement Guidelines, the
subcontract shall contain a clause substantially the same as this
clause. The EPA Comprehensive Procurement Guidelines identify products
which Federal agencies and their Contractors are to procure with
recycled content pursuant to 40 CFR 247. Examples of such a subcontract
would be operation of the facility supply function, construction or
remodeling at the facility, or maintenance of the facility motor vehicle
fleet. In situations in which the facility management contractor can
reasonably determine the amount of products with recovered/recycled
content to be acquired under the subcontract, the facility management
contractor is not required to flow down the reporting requirement of
this clause. Instead, the facility management contractor may include
such quantities in its own report and include an agreement in the
subcontract that such products will be acquired with recovered/recycled
content and that the subcontractor will advise if it is unable to
procure such products with recovered/recycled content because the
product is not available (i) competitively within a reasonable time,
(ii) at a reasonable price, or, (iii) within the performance
requirements. If reports are required of the subcontractor, such reports
shall be submitted to the facility management contractor. The reports
may be submitted at the conclusion of the subcontract term provided that
the subcontract delivery term is not multi-year in nature. If the
delivery term is multi-year, the subcontractor shall report its
accomplishments for each Federal fiscal year in a manner and at a time
or times acceptable to both parties

\(e\) When this clause is used in a subcontract, the word \"Contractor\"
will be understood to mean \"subcontractor\" and the term \"DOE
Recycling Coordinator\" will be understood to mean \"Contractor
Recycling Coordinator."

(End of Clause)

**970.5223-3 Agreement regarding Workplace Substance Abuse Programs at
DOE facilities.**

As prescribed in 970.2305-4(a), the contracting officer shall insert the
following provision:

AGREEMENT REGARDING WORKPLACE SUBSTANCE

ABUSE PROGRAMS AT DOE SITES (DEC 2000)

\(a\) Any contract awarded as a result of this solicitation will be
subject to the policies, criteria, and procedures of 10 CFR part 707,
Workplace Substance Abuse Programs at DOE Sites.

\(b\) By submission of its offer, the officer agrees to provide to the
contracting officer, within 30 days after notification of selection for
award, or award of a contract, whichever occurs first, pursuant to this
solicitation, its written workplace substance abuse program consistent
with the requirements of 10 CFR part 707.

\(c\) Failure of the offeror to agree to the condition of responsibility
set forth in paragraph (b) of this provision, renders the offeror
unqualified and ineligible for award.

(End of Provision)

**970.5223-4 Workplace Substance Abuse Programs at DOE Sites.**

As prescribed in 48 CFR 970.2305-4(b), insert the following clause:

WORKPLACE SUBSTANCE ABUSE PROGRAMS AT DOE SITES (DEC 2000)

\(a\) Program Implementation. The contractor shall, consistent with 10
CFR part 707, Workplace Substance Abuse Programs at DOE Sites,
incorporated herein by reference with full force and effect, develop,
implement, and maintain a workplace substance abuse program.

\(b\) Remedies. In addition to any other remedies available to the
Government, the contractor\'s failure to comply with the requirements of
10 CFR part 707 or to perform in a manner consistent with its approved
program may render the contractor subject to: the suspension of contract
payments, or, where applicable, a reduction in award fee; termination
for default; and suspension or debarment.

\(c\) Subcontracts. (1) The contractor agrees to notify the contracting
officer reasonably in advance of, but not later than 30 days prior to,
the award of any subcontract the contractor believes may be subject to
the requirements of 10 CFR part 707.

\(2\) The DOE prime contractor shall require all subcontracts subject to
the provisions of 10 CFR part 707 to agree to develop and implement a
workplace substance abuse program that complies with the requirements of
10 CFR part 707, Workplace Substance Abuse Programs at DOE Sites, as a
condition for award of the subcontract. The DOE prime contractor shall
review and approve each subcontractor\'s program, and shall periodically
monitor each subcontractor\'s implementation of the program for
effectiveness and compliance with 10 CFR part 707.

\(3\) The contractor agrees to include, and require the inclusion of,
the requirements of this clause in all subcontracts, at any tier, that
are subject to the provisions of 10 CFR part 707.

(End of clause)

**970.5223-5 DOE motor vehicle fleet fuel efficiency.**

As prescribed in 48 CFR 970.2307-2, insert the following clause in
contracts providing for Contractor management of the motor vehicle
fleet.

DOE MOTOR VEHICLE FLEET FUEL EFFICIENCY (OCT 2003)

When managing Government-owned vehicles for the Department of Energy,
the Contractor will conduct operations relating to such vehicles in
accordance with the goals and requirements of *Executive Order 13149,
Greening the Government Through Federal Fleet and Transportation
Efficiency*, and implementing guidance contained in the document
entitled *U.S. Department of Energy Compliance Strategy for Executive
Order 13149* (April 2001) and future revisions of this compliance
strategy that are identified in writing by the Contracting Officer.
Section 506 of Executive Order 13149 exempts military tactical, law
enforcement, and emergency vehicles from the requirements of the order.

(End of Clause)

\[68 FR 52129 Sep 2, 2003\]

**970.5226-1 Diversity plan.**

As prescribed in 48 CFR 970.2671-2, insert the following clause:

DIVERSITY PLAN (DEC 2000)

The Contractor shall submit a Diversity Plan to the contracting officer
for approval within 90 days after the effective date of this contract
(or contract modification, if appropriate). The contractor shall submit
an update to its Plan annually or with its annual fee proposal. Guidance
for preparation of a Diversity Plan is provided in Appendix. The Plan
shall include innovative strategies for increasing opportunities to
fully use the talents and capabilities of a diverse work force. The Plan
shall address, at a minimum, the Contractor\'s approach for promoting
diversity through (1) the Contractor\'s work force, (2) educational
outreach, (3) community involvement and outreach, (4) subcontracting,
(5) economic development (including technology transfer), and (6) the
prevention of profiling based on race or national origin.

(End of Clause)

**970.5226-2 Workforce restructuring under section 3161 of the National
Defense Authorization Act for fiscal year 1993.**

As prescribed in 48 CFR 970.2672-3, insert the following clause:

WORKFORCE RESTRUCTURING UNDER SECTION 3161 OF THE NATIONAL

DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1993 (DEC 2000)

\(a\) Consistent with the objectives of Section 3161 of the National
Defense Authorization Act for Fiscal Year 1993, *42 U.S.C. 7274h,* in
instances where the Department of Energy has determined that a change in
workforce at a Department of Energy Defense Nuclear Facility is
necessary, the contractor agrees to (1) comply with the Department of
Energy Workforce Restructuring Plan for the facility, if applicable, and
(2) use its best efforts to accomplish workforce restructuring or
displacement so as to mitigate social and economic impacts.

\(b\) The requirements of this clause shall be included in subcontracts
at any tier (except subcontracts for commercial items pursuant to *41
U.S.C. 403)* expected to exceed \$500,000.

(End of Clause)

**970.5226-3 Community commitment.**

As prescribed in 48 CFR 970.2673-2, insert the following clause:

COMMUNITY COMMITMENT (DEC 2000)

It is the policy of the DOE to be a constructive partner in the
geographic region in which DOE conducts its business. The basic elements
of this policy include: (1) Recognizing the diverse interests of the
region and its stakeholders, (2) engaging regional stakeholders in
issues and concerns of mutual interest, and (3) recognizing that giving
back to the community is a worthwhile business practice. Accordingly,
the Contractor agrees that its business operations and performance under
the Contract will be consistent with the intent of the policy and
elements set forth above.

(End of Clause)

**970.5227-1 Rights in data-facilities.**

As prescribed in 48 CFR 970.2704-3(a), insert the following clause:

RIGHTS IN DATA-FACILITIES (DEC 2000)

\(a\) Definitions. (1) Computer data bases, as used in this clause,
means a collection of data in a form capable of, and for the purpose of,
being stored in, processed, and operated on by a computer. The term does
not include computer software.

\(2\) Computer software, as used in this clause, means (i) computer
programs which are data comprising a series of instructions, rules,
routines, or statements, regardless of the media in which recorded, that
allow or cause a computer to perform a specific operation or series of
operations and (ii) data comprising source code listings, design
details, algorithms, processes, flow charts, formulae, and related
material that would enable the computer program to be produced, created,
or compiled. The term does not include computer data bases.

\(3\) Data, as used in this clause, means recorded information,
regardless of form or the media on which it may be recorded. The term
includes technical data and computer software. The term \"data\" does
not include data incidental to the administration of this contract, such
as financial, administrative, cost and pricing, or management
information.

\(4\) Limited rights data, as used in this clause, means data, other
than computer software, developed at private expense that embody trade
secrets or are commercial or financial and confidential or privileged.
The Government\'s rights to use, duplicate, or disclose limited rights
data are as set forth in the Limited Rights Notice of subparagraph (e)
of this clause.

\(5\) Restricted computer software, as used in this clause, means
computer software developed at private expense and that is a trade
secret; is commercial or financial and is confidential or privileged; or
is published copyrighted computer software, including minor
modifications of any such computer software. The Government\'s rights to
use, duplicate, or disclose restricted computer software are as set
forth in the Restricted Rights Notice of paragraph (f) of this clause.

\(6\) Technical data, as used in this clause, means recorded data,
regardless of form or characteristic, that are of a scientific or
technical nature. Technical data does not include computer software, but
does include manuals and instructional materials and technical data
formatted as a computer data base.

\(7\) Unlimited rights, as used in this clause, means the right of the
Government to use, disclose, reproduce, prepare derivative works,
distribute copies to the public, including by electronic means, and
perform publicly and display publicly, in any manner, including by
electronic means, and for any purpose whatsoever, and to have or permit
others to do so.

\(b\) Allocation of Rights. (1) The Government shall have:

\(i\) Ownership of all technical data and computer software first
produced in the performance of this Contract;

\(ii\) Unlimited rights in technical data and computer software
specifically used in the performance of this Contract, except as
provided herein regarding copyright, limited rights data, or restricted
computer software, or except for other data specifically protected by
statute for a period of time or, where, approved by DOE, appropriate
instances of the DOE Work for Others Program;

\(iii\) The right to inspect technical data and computer software first
produced or specifically used in the performance of this Contract at all
reasonable times. The Contractor shall make available all necessary
facilities to allow DOE personnel to perform such inspection;

\(iv\) The right to have all technical data and computer software first
produced or specifically used in the performance of this Contract
delivered to the Government or otherwise disposed of by the Contractor,
either as the contracting officer may from time to time direct during
the progress of the work or in any event as the contracting officer
shall direct upon completion or termination of this Contract. The
Contractor agrees to leave a copy of such data at the facility or plant
to which such data relate, and to make available for access or to
deliver to the Government such data upon request by the contracting
officer. If such data are limited rights data or restricted computer
software, the rights of the Government in such data shall be governed
solely by the provisions of paragraph (e) of this clause (\"Rights in
Limited Rights Data\") or paragraph (f) of this clause (\"Rights in
Restricted Computer Software\"); and

\(v\) The right to remove, cancel, correct, or ignore any markings not
authorized by the terms of this Contract on any data furnished hereunder
if, in response to a written inquiry by DOE concerning the propriety of
the markings, the Contractor fails to respond thereto within 60 days or
fails to substantiate the propriety of the markings. In either case DOE
will notify the Contractor of the action taken.

\(2\) The Contractor shall have:

\(i\) The right to withhold limited rights data and restricted computer
software unless otherwise provided in accordance with the provisions of
this clause; and

\(ii\) The right to use for its private purposes, subject to patent,
security or other provisions of this Contract, data it first produces in
the performance of this Contract, except for data in DOE\'s Uranium
Enrichment Technology, including diffusion, centrifuge, and atomic vapor
laser isotope separation, provided the data requirements of this
Contract have been met as of the date of the private use of such data.

\(3\) The Contractor agrees that for limited rights data or restricted
computer software or other technical, business or financial data in the
form of recorded information which it receives from, or is given access
to by, DOE or a third party, including a DOE Contractor or
subcontractor, and for technical data or computer software it first
produces under this Contract which is authorized to be marked by DOE,
the Contractor shall treat such data in accordance with any restrictive
legend contained thereon.

\(c\) Copyrighted Material. (1) The Contractor shall not, without prior
written authorization of the Patent Counsel, assert copyright in any
technical data or computer software first produced in the performance of
this contract. To the extent such authorization is granted, the
Government reserves for itself and others acting on its behalf, a
nonexclusive, paid-up, irrevocable, world-wide license for Governmental
purposes to publish, distribute, translate, duplicate, exhibit, and
perform any such data copyrighted by the Contractor.

\(2\) The Contractor agrees not to include in the technical data or
computer software delivered under the contract any material copyrighted
by the Contractor and not to knowingly include any material copyrighted
by others without first granting or obtaining at no cost a license
therein for the benefit of the Government of the same scope as set forth
in paragraph (c)(1) of this clause. If the Contractor believes that such
copyrighted material for which the license cannot be obtained must be
included in the technical data or computer software to be delivered,
rather than merely incorporated therein by reference, the Contractor
shall obtain the written authorization of the contracting officer to
include such material in the technical data or computer software prior
to its delivery.

\(d\) Subcontracting. (1) Unless otherwise directed by the contracting
officer, the Contractor agrees to use in subcontracts in which technical
data or computer software is expected to be produced or in subcontracts
for supplies that contain a requirement for production or delivery of
data in accordance with the policy and procedures of 48 CFR Subpart 27.4
as supplemented by 48 CFR 927.401 through 927.409, the clause entitled,
\"Rights in Data-General\" at 48 CFR 52.227-14 modified in accordance
with 927.409(a) and including Alternate V. Alternates II through IV of
that clause may be included as appropriate with the prior approval of
DOE Patent Counsel, and the Contractor shall not acquire rights in a
subcontractor\'s limited rights data or restricted computer software,
except through the use of Alternates II or III, respectively, without
the prior approval of DOE Patent Counsel. The clause at 48 CFR
52.227-16, Additional Data Requirements, shall be included in
subcontracts in accordance with DEAR 927.409(h). The contractor shall
use instead the Rights in Data-Facilities clause at 48 CFR 970.5227-1 in
subcontracts, including subcontracts for related support services,
involving the design or operation of any plants or facilities or
specially designed equipment for such plants or facilities that are
managed or operated under its contract with DOE.

\(2\) It is the responsibility of the Contractor to obtain from its
subcontractors technical data and computer software and rights therein,
on behalf of the Government, necessary to fulfill the Contractor\'s
obligations to the Government with respect to such data. In the event of
refusal by a subcontractor to accept a clause affording the Government
such rights, the Contractor shall:

\(i\) Promptly submit written notice to the contracting officer setting
forth reasons or the subcontractor\'s refusal and other pertinent
information which may expedite disposition of the matter, and

\(ii\) Not proceed with the subcontract without the written
authorization of the contracting officer.

\(3\) Neither the Contractor nor higher-tier subcontractors shall use
their power to award subcontracts as economic leverage to acquire rights
in a subcontractor\'s limited rights data or restricted computer
software for their private use.

\(e\) Rights in Limited Rights Data. Except as may be otherwise
specified in this Contract as data which are not subject to this
paragraph, the Contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, paid-up license by or for the
Government, in any limited rights data of the Contractor specifically
used in the performance of this Contract, provided, however, that to the
extent that any limited rights data when furnished or delivered is
specifically identified by the Contractor at the time of initial
delivery to the Government or a representative of the Government, such
data shall not be used within or outside the Government except as
provided in the \"Limited Rights Notice\" set forth. All such limited
rights data shall be marked with the following \"Limited Rights
Notice\":

Limited Rights Notice

These data contain \"limited rights data,\" furnished under Contract No.
with the United States Department of Energy which may be duplicated and
used by the Government with the express limitations that the \"limited
rights data\" may not be disclosed outside the Government or be used for
purposes of manufacture without prior permission of the Contractor,
except that further disclosure or use may be made solely for the
following purposes:

\(a\) Use (except for manufacture) by support services contractors
within the scope of their contracts;

\(b\) This \"limited rights data\" may be disclosed for evaluation
purposes under the restriction that the \"limited rights data\" be
retained in confidence and not be further disclosed;

\(c\) This \"limited rights data\" may be disclosed to other contractors
participating in the Government\'s program of which this Contract is a
part for information or use (except for manufacture) in connection with
the work performed under their contracts and under the restriction that
the \"limited rights data\" be retained in confidence and not be further
disclosed;

\(d\) This \"limited rights data\" may be used by the Government or
others on its behalf for emergency repair or overhaul work under the
restriction that the \"limited rights data\" be retained in confidence
and not be further disclosed; and

\(e\) Release to a foreign government, or instrumentality thereof, as
the interests of the United States Government may require, for
information or evaluation, or for emergency repair or overhaul work by
such government. This Notice shall be marked on any reproduction of this
data in whole or in part.

(End of Notice)

\(f\) Rights in Restricted Computer Software. (1) Except as may be
otherwise specified in this Contract as data which are not subject to
this paragraph, the Contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, paid-up, license by or for the
Government, in any restricted computer software of the Contractor
specifically used in the performance of this Contract, provided,
however, that to the extent that any restricted computer software when
furnished or delivered is specifically identified by the Contractor at
the time of initial delivery to the Government or a representative of
the Government, such data shall not be used within or outside the
Government except as provided in the \"Restricted Rights Notice\" set
forth below. All such restricted computer software shall be marked with
the following \"Restricted Rights Notice\":

Restricted Rights Notice-Long Form

\(a\) This computer software is submitted with restricted rights under
Department of Energy Contract No.-. It may not be used, reproduced, or
disclosed by the Government except as provided in paragraph (b) of this
notice.

\(b\) This computer software may be:

\(1\) Used or copied for use in or with the computer or computers for
which it was acquired, including use at any Government installation to
which such computer or computers may be transferred;

\(2\) Used, copied for use, in a backup or replacement computer if any
computer for which it was acquired is inoperative or is replaced;

\(3\) Reproduced for safekeeping (archives) or backup purposes;

\(4\) Modified, adapted, or combined with other computer software,
provided that only the portions of the derivative software consisting of
the restricted computer software are to be made subject to the same
restricted rights; and

\(5\) Disclosed to and reproduced for use by contractors under a service
contract (of the type defined in 48 CFR 37.101) in accordance with
subparagraphs (b)(1) through (4) of this Notice, provided the Government
makes such disclosure or reproduction subject to these restricted
rights.

\(c\) Notwithstanding the foregoing, if this computer software has been
published under copyright, it is licensed to the Government, without
disclosure prohibitions, with the rights set forth in the restricted
rights notice above.

\(d\) This Notice shall be marked on any reproduction of this computer
software, in whole or in part.

(End of Notice)

\(2\) Where it is impractical to include the Restricted Rights Notice on
restricted computer software, the following short-form Notice may be
used.

Restricted Rights Notice-Short Form

Use, reproduction, or disclosure is subject to restrictions set forth in
the Long Form Notice of DOE Contract No.- with (name of Contractor).

(End of Notice)

\(3\) If the software is embedded, or if it is commercially impractical
to mark it with human readable text, then the symbol R and the clause
date (mo/yr), in brackets or a box, a \[R-mo/yr\], may be used. This
will be read to mean restricted computer software, subject to the rights
of the Government as described in the Long Form Notice, in effect as of
the date indicated next to the symbol. The symbol shall not be used to
mark human readable material. In the event this Contract contains any
variation to the rights in the Long Form Notice, then the contract
number must also be cited.

\(4\) If restricted computer software is delivered with the copyright
notice of *17 U.S.C. 401,* the software will be presumed to be published
copyrighted computer software licensed to the Government without
disclosure prohibitions and with unlimited rights, unless the Contractor
includes the following statement with such copyright notice
\"Unpublished-rights reserved under the Copyright Laws of the United
States.\"

\(g\) Relationship to patents. Nothing contained in this clause creates
or is intended to imply a license to the Government in any patent or is
intended to be construed as affecting the scope of any licenses or other
rights otherwise granted to the Government under any patent.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.2704-3(a), where
access to Category C-24 restricted data is contemplated in the
performance of a contract the contracting officer shall insert the
phrase \"and except Restricted Data in category C-24, 10 CFR part 725,
in which DOE has reserved the right to receive reasonable compensation
for the use of its inventions and discoveries, including related data
and technology\" after \"laser isotope separation\" and before the comma
in paragraph (b)(2)(ii) of the clause at 48 CFR 970.5227-1, Rights in
Data-Facilities, as appropriate.

(End of Clause)

**970.5227-2 Rights in data-technology transfer.**

As prescribed in 48 CFR 970.2704-3(b), insert the following clause:

RIGHTS IN DATA-TECHNOLOGY TRANSFER (DEC 2000)

\(a\) Definitions. (1) Computer data bases, as used in this clause,
means a collection of data in a form capable of, and for the purpose of,
being stored in, processed, and operated on by a computer. The term does
not include computer software.

\(2\) Computer software, as used in this clause, means (i) computer
programs which are data comprising a series of instructions, rules,
routines, or statements, regardless of the media in which recorded, that
allow or cause a computer to perform a specific operation or series of
operations and (ii) data comprising source code listings, design
details, algorithms, processes, flow charts, formulae, and related
material that would enable the computer program to be produced, created,
or compiled. The term does not include computer data bases.

\(3\) Data, as used in this clause, means recorded information,
regardless of form or the media on which it may be recorded. The term
includes technical data and computer software. The term \"data\" does
not include data incidental to the administration of this contract, such
as financial, administrative, cost and pricing, or management
information.

\(4\) Limited rights data, as used in this clause, means data, other
than computer software, developed at private expense that embody trade
secrets or are commercial or financial and confidential or privileged.
The Government\'s rights to use, duplicate, or disclose limited rights
data are as set forth in the Limited Rights Notice of paragraph (g) of
this clause.

\(5\) Restricted computer software, as used in this clause, means
computer software developed at private expense and that is a trade
secret; is commercial or financial and is confidential or privileged; or
is published copyrighted computer software, including minor
modifications of any such computer software. The Government\'s rights to
use, duplicate, or disclose restricted computer software are as set
forth in the Restricted Rights Notice of subparagraph (h) of this
clause.

\(6\) Technical data, as used in this clause, means recorded data,
regardless of form or characteristic, that are of a scientific or
technical nature. Technical data does not include computer software, but
does include manuals and instructional materials and technical data
formatted as a computer data base.

\(7\) Unlimited rights, as used in this clause, means the rights of the
Government to use, disclose, reproduce, prepare derivative works,
distribute copies to the public, including by electronic means, and
perform publicly and display publicly, in any manner, including by
electronic means, and for any purpose whatsoever, and to have or permit
others to do so.

\(b\) Allocation of Rights. (1) The Government shall have:

\(i\) Ownership of all technical data and computer software first
produced in the performance of this Contract;

\(ii\) Unlimited rights in technical data and computer software
specifically used in the performance of this Contract, except as
provided herein regarding copyright, limited rights data, or restricted
computer software, and except for data subject to the withholding
provisions for protected Cooperative Research and Development Agreement
(CRADA) information in accordance with Technology Transfer actions under
this Contract, or other data specifically protected by statute for a
period of time or, where, approved by DOE, appropriate instances of the
DOE Work for Others Program;

\(iii\) The right to inspect technical data and computer software first
produced or specifically used in the performance of this Contract at all
reasonable times. The Contractor shall make available all necessary
facilities to allow DOE personnel to perform such inspection;

\(iv\) The right to have all technical data and computer software first
produced or specifically used in the performance of this Contract
delivered to the Government or otherwise disposed of by the Contractor,
either as the contracting officer may from time to time direct during
the progress of the work or in any event as the contracting officer
shall direct upon completion or termination of this Contract. The
Contractor agrees to leave a copy of such data at the facility or plant
to which such data relate, and to make available for access or to
deliver to the Government such data upon request by the contracting
officer. If such data are limited rights data or restricted computer
software. the rights of the Government in such data shall be governed
solely by the provisions of paragraph (g) of this clause (\"Rights in
Limited Rights Data\") or paragraph (h) of this clause (\"Rights in
Restricted Computer Software\"); and (v) The right to remove, cancel,
correct, or ignore any markings not authorized by the terms of this
Contract on any data furnished hereunder if, in response to a written
inquiry by DOE concerning the propriety of the markings, the Contractor
fails to respond thereto within 60 days or fails to substantiate the
propriety of the markings. In either case DOE will notify the Contractor
of the action taken.

\(2\) The Contractor shall have:

\(i\) The right to withhold limited rights data and restricted computer
software unless otherwise provided in provisions of this clause;

\(ii\) The right to use for its private purposes, subject to patent,
security or other provisions of this Contract, data it first produces in
the performance of this Contract, except for data in DOE\'s Uranium
Enrichment Technology, including diffusion, centrifuge, and atomic vapor
laser isotope separation, provided the data requirements of this
Contract have been met as of the date of the private use of such data;
and

\(iii\) The right to assert copyright subsisting in scientific and
technical articles as provided in paragraph (d) of this clause and the
right to request permission to assert copyright subsisting in works
other than scientific and technical articles as provided in paragraph
(e) of this clause.

\(3\) The Contractor agrees that for limited rights data or restricted
computer software or other technical business or financial data in the
form of recorded information which it receives from, or is given access
to by DOE or a third party, including a DOE contractor or subcontractor,
and for technical data or computer software it first produces under this
Contract which is authorized to be marked by DOE, the Contractor shall
treat such data in accordance with any restrictive legend contained
thereon.

\(c\) Copyright (General). (1) The Contractor agrees not to mark,
register, or otherwise assert copyright in any data in a published or
unpublished work, other than as set forth in paragraphs (d) and (e) of
this clause.

\(2\) Except for material to which the Contractor has obtained the right
to assert copyright in accordance with either paragraph (d) or (e) of
this clause, the Contractor agrees not to include in the data delivered
under this Contract any material copyrighted by the Contractor and not
to knowingly include any material copyrighted by others without first
granting or obtaining at no cost a license therein for the benefit of
the Government of the same scope as set forth in paragraph (d) of this
clause. If the Contractor believes that such copyrighted material for
which the license cannot be obtained must be included in the data to be
delivered, rather than merely incorporated therein by reference, the
Contractor shall obtain the written authorization of the contracting
officer to include such material in the data prior to its delivery.

\(d\) Copyrighted works (scientific and technical articles). (1) The
Contractor shall have the right to assert, without prior approval of the
contracting officer, copyright subsisting in scientific and technical
articles composed under this contract or based on or containing data
first produced in the performance of this Contract, and published in
academic, technical or professional journals, symposia, proceedings, or
similar works. When assertion of copyright is made, the Contractor shall
affix the applicable copyright notice of *17 U.S.C. 401* or 402 and
acknowledgment of Government sponsorship (including contract number) on
the data when such data are delivered to the Government as well as when
the data are published or deposited for registration as a published work
in the U.S. Copyright Office. The Contractor grants to the Government,
and others acting on its behalf, a nonexclusive, paid-up, irrevocable,
world-wide license in such copyrighted data to reproduce, prepare
derivative works, distribute copies to the public, and perform publicly
and display publicly, by or on behalf of the Government.

\(2\) The contractor shall mark each scientific or technical article
first produced or composed under this Contract and submitted for journal
publication or similar means of dissemination with a notice, similar in
all material respects to the following, on the front reflecting the
Government\'s non-exclusive, paid-up, irrevocable, world-wide license in
the copyright.

Notice: This manuscript has been authored by \[insert the name of the
Contractor\] under Contract No. \[insert the contract number\] with the
U.S. Department of Energy. The United States Government retains and the
publisher, by accepting the article for publication, acknowledges that
the United States Government retains a non-exclusive, paid-up,
irrevocable, world-wide license to publish or reproduce the published
form of this manuscript, or allow others to do so, for United States
Government purposes.

(End of Notice)

\(3\) The title to the copyright of the original of unclassified
graduate theses and the original of related unclassified scientific
papers shall vest in the author thereof, subject to the right of DOE to
retain duplicates of such documents and to use such documents for any
purpose whatsoever without any claim on the part of the author or the
contractor for additional compensation.

\(e\) Copyrighted works (other than scientific and technical articles
and data produced under a CRADA). The Contractor may obtain permission
to assert copyright subsisting in technical data and computer software
first produced by the Contractor in performance of this Contract, where
the Contractor can show that commercialization would be enhanced by such
copyright protection, subject to the following:

\(1\) Contractor Request to Assert Copyright.

\(i\) For data other than scientific and technical articles and data
produced under a CRADA, the Contractor shall submit in writing to Patent
Counsel its request to assert copyright in data first produced in the
performance of this Contract pursuant to this clause. The right of the
Contractor to copyright data first produced under a CRADA is as
described in the individual CRADA. Each request by the Contractor must
include:

\(A\) The identity of the data (including any computer program) for
which the Contractor requests permission to assert copyright, as well as
an abstract which is descriptive of the data and is suitable for
dissemination purposes, (B) The program under which it was funded, (C)
Whether, to the best knowledge of the Contractor, the data is subject to
an international treaty or agreement, (D) Whether the data is subject to
export control, (E) A statement that the Contractor plans to
commercialize the data in compliance with the clause of this contract
entitled, \"Technology Transfer Mission,\" within five (5) years after
obtaining permission to assert copyright or, on a case-by-case basis, a
specified longer period where the Contractor can demonstrate that the
ability to commercialize effectively is dependent upon such longer
period, and (F) For data other than computer software, a statement
explaining why the assertion of copyright is necessary to enhance
commercialization and is consistent with DOE\'s dissemination
responsibilities.

\(ii\) For data that is developed using other funding sources in
addition to DOE funding, the permission to assert copyright in
accordance with this clause must also be obtained by the Contractor from
all other funding sources prior to the Contractor\'s request to Patent
Counsel. The request shall include the Contractor\'s certification or
other documentation acceptable to Patent Counsel demonstrating such
permission has been obtained.

\(iii\) Permission for the Contractor to assert copyright in excepted
categories of data as determined by DOE will be expressly withheld. Such
excepted categories include data whose release (A) would be detrimental
to national security, i.e., involve classified information or data or
sensitive information under Section 148 of the Atomic Energy Act of
1954, as amended, or are subject to export control for nonproliferation
and other nuclear-related national security purposes, (B) would not
enhance the appropriate transfer or dissemination and commercialization
of such data, (C) would have a negative impact on U.S. industrial
competitiveness, (D) would prevent DOE from meeting its obligations
under treaties and international agreements, or (E) would be detrimental
to one or more of DOE\'s programs. Additional excepted categories may be
added by the Assistant General Counsel for Technology Transfer and
Intellectual Property. Where data are determined to be under export
control restriction, the Contractor may obtain permission to assert
copyright subject to the provisions of this clause for purposes of
limited commercialization in a manner that complies with export control
statutes and applicable regulations. In addition, notwithstanding any
other provision of this Contract, all data developed with Naval
Reactors\' funding and those data that are classified fall within
excepted categories. The rights of the Contractor in data are subject to
the disposition of data rights in the treaties and international
agreements identified under this Contract as well as those additional
treaties and international agreements which DOE may from time to time
identify by unilateral amendment to the Contract; such amendment listing
added treaties and international agreements is effective only for data
which is developed after the date such treaty or international agreement
is added to this Contract. Also, the Contractor will not be permitted to
assert copyright in data in the form of various technical reports
generated by the Contractor under the Contract without first obtaining
the advanced written permission of the contracting officer.

\(2\) DOE Review and Response to Contractor\'s Request. The Patent
Counsel shall use its best efforts to respond in writing within 90 days
of receipt of a complete request by the Contractor to assert copyright
in technical data and computer software pursuant to this clause. Such
response shall either give or withhold DOE\'s permission for the
Contractor to assert copyright or advise the Contractor that DOE needs
additional time to respond, and the reasons therefor.

\(3\) Permission for Contractor to Assert Copyright.

\(i\) For computer software, the Contractor shall furnish to the DOE
designated, centralized software distribution and control point, the
Energy Science and Technology Software Center, at the time permission to
assert copyright is given under paragraph (e)(2) of this clause: (A) An
abstract describing the software suitable for publication, (B) the
source code for each software program, and (C) the object code and at
least the minimum support documentation needed by a technically
competent user to understand and use the software. The Patent Counsel,
for good cause shown by the Contractor, may allow the minimum support
documentation to be delivered within 60 days after permission to assert
copyright is given or at such time the minimum support documentation
becomes available. The Contractor acknowledges that the DOE designated
software distribution and control point may provide a technical
description of the software in an announcement identifying its
availability from the copyright holder.

\(ii\) Unless otherwise directed by the contracting officer, for data
other than computer software to which the Contractor has received
permission to assert copyright under paragraph (e)(2) of this clause
above, the Contractor shall within sixty (60) days of obtaining such
permission furnish to DOE\'s Office of Scientific and Technical
Information (OSTI) a copy of such data as well as an abstract of the
data suitable for dissemination purposes. The Contractor acknowledges
that OSTI may provide an abstract of the data in an announcement to DOE,
its contractors and to the public identifying its availability from the
copyright holder.

\(iii\) For a five year period or such other specified period as
specifically approved by Patent Counsel beginning on the date the
Contractor is given permission to assert copyright in data, the
Contractor grants to the Government, and others acting on its behalf, a
paid-up, nonexclusive, irrevocable worldwide license in such copyrighted
data to reproduce, prepare derivative works and perform publicly and
display publicly, by or on behalf of the Government. Upon request, the
initial period may be extended after DOE approval. The DOE approval will
be based on the standard that the work is still commercially available
and the market demand is being met.

\(iv\) After the period approved by Patent Counsel for application of
the limited Government license described in paragraph (e)(3)(iii) of
this clause, or if, prior to the end of such period(s), the Contractor
abandons commercialization activities pertaining to the data to which
the Contractor has been given permission to assert copyright, the
Contractor grants to the Government, and others acting on its behalf, a
paid-up, nonexclusive, irrevocable worldwide license in such copyrighted
data to reproduce, distribute copies to the public, prepare derivative
works, perform publicly and display publicly, and to permit others to do
so.

\(v\) Whenever the Contractor asserts copyright in data pursuant to this
paragraph (e), the Contractor shall affix the applicable copyright
notice of *17 U.S.C. 401* or 402 on the copyrighted data and also an
acknowledgment of the Government sponsorship and license rights of
paragraphs (e)(3) (iii) and (iv) of this clause. Such action shall be
taken when the data are delivered to the Government, published, licensed
or deposited for registration as a published work in the U.S. Copyright
Office. The acknowledgment of Government sponsorship and license rights
shall be as follows: Notice: These data were produced by (insert name of
Contractor) under Contract No.- with the Department of Energy. For
(period approved by DOE Patent Counsel) from (date permission to assert
copyright was obtained), the Government is granted for itself and others
acting on its behalf a nonexclusive, paid-up, irrevocable worldwide
license in this data to reproduce, prepare derivative works, and perform
publicly and display publicly, by or on behalf of the Government. There
is provision for the possible extension of the term of this license.
Subsequent to that period or any extension granted, the Government is
granted for itself and others acting on its behalf a nonexclusive,
paid-up, irrevocable worldwide license in this data to reproduce,
prepare derivative works, distribute copies to the public, perform
publicly and display publicly, and to permit others to do so. The
specific term of the license can be identified by inquiry made to
Contractor or DOE. Neither the United States nor the United States
Department of Energy, nor any of their employees, makes any warranty,
express or implied, or assumes any legal liability or responsibility for
the accuracy, completeness, or usefulness of any data, apparatus,
product, or process disclosed, or represents that its use would not
infringe privately owned rights.

(End of Notice)

\(vi\) With respect to any data to which the Contractor has received
permission to assert copyright, the DOE has the right, during the five
(5) year or specified longer period approved by Patent Counsel as
provided for in paragraph (e) of this clause, to request the Contractor
to grant a nonexclusive, partially exclusive or exclusive license in any
field of use to a responsible applicant(s) upon terms that are
reasonable under the circumstances, and if the Contractor refuses such
request, to grant such license itself, if the DOE determines that the
Contractor has not made a satisfactory demonstration that either it or
its licensee(s) is actively pursuing commercialization of the data as
set forth in subparagraph (e)(1)(A) of this clause. Before licensing
under this subparagraph (vi), DOE shall furnish the Contractor a written
request for the Contractor to grant the stated license, and the
Contractor shall be allowed thirty (30) days (or such longer period as
may be authorized by the contracting officer for good cause shown in
writing by the Contractor) after such notice to show cause why the
license should not be granted. The Contractor shall have the right to
appeal the decision of the DOE to grant the stated license to the
Invention Licensing Appeal Board as set forth in 10 CFR
781.65-\"Appeals.\"

\(vii\) No costs shall be allowable for maintenance of copyrighted data,
primarily for the benefit of the Contractor and/or a licensee which
exceeds DOE Program needs, except as expressly provided in writing by
the contracting officer. The Contractor may use its net royalty income
to effect such maintenance costs.

\(viii\) At any time the Contractor abandons commercialization
activities for data for which the Contractor has received permission to
assert copyright in accordance with this clause, it shall advise OSTI
and Patent Counsel and upon request assign the copyright to the
Government so that the Government can distribute the data to the public.

\(4\) The following notice may be placed on computer software prior to
any publication and prior to the Contractor\'s obtaining permission from
the Department of Energy to assert copyright in the computer software
pursuant to paragraph (c)(3) of this section.

Notice: This computer software was prepared by \[insert the
Contractor\'s name and the individual author\], hereinafter the
Contractor, under Contract \[insert the Contract Number\] with the
Department of Energy (DOE). All rights in the computer software are
reserved by DOE on behalf of the United States Government and the
Contractor as provided in the Contract. You are authorized to use this
computer software for Governmental purposes but it is not to be released
or distributed to the public. NEITHER THE GOVERNMENT NOR THE CONTRACTOR
MAKES ANY WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY LIABILITY FOR THE
USE OF THIS SOFTWARE. This notice including this sentence must appear on
any copies of this computer software.

(End of Notice)

\(5\) a similar notice can be used for data, other than computer
software, upon approval of DOE Patent Counsel.

\(f\) Subcontracting. (1) Unless otherwise directed by the contracting
officer, the Contractor agrees to use in subcontracts in which technical
data or computer software is expected to be produced or in subcontracts
for supplies that contain a requirement for production or delivery of
data in accordance with the policy and procedures of 48 CFR Subpart 27.4
as supplemented by 48 CFR 927.401 through 927.409, the clause entitled,
\"Rights in Data-General\" at 48 CFR 52.227-14 modified in accordance
with 927.409(a) and including Alternate V. Alternates II through IV of
that clause may be included as appropriate with the prior approval of
DOE Patent Counsel, and the Contractor shall not acquire rights in a
subcontractor\'s limited rights data or restricted computer software,
except through the use of Alternates II or III, respectively, without
the prior approval of DOE Patent Counsel. The clause at 48 CFR
52.227-16, Additional Data Requirements, shall be included in
subcontracts in accordance with 48 CFR 927.409(h). The Contractor shall
use instead the Rights in Data-Facilities clause at 48 CFR 970.5227-1 in
subcontracts, including subcontracts for related support services,
involving the design or operation of any plants or facilities or
specially designed equipment for such plants or facilities that are
managed or operated under its contract with DOE.

\(2\) It is the responsibility of the Contractor to obtain from its
subcontractors technical data and computer software and rights therein,
on behalf of the Government, necessary to fulfill the Contractor\'s
obligations to the Government with respect to such data. In the event of
refusal by a subcontractor to accept a clause affording the Government
such rights, the Contractor shall:

\(i\) Promptly submit written notice to the contracting officer setting
forth reasons or the subcontractor\'s refusal and other pertinent
information which may expedite disposition of the matter, and

\(ii\) Not proceed with the subcontract without the written
authorization of the contracting officer.

\(3\) Neither the Contractor nor higher-tier subcontractors shall use
their power to award subcontracts as economic leverage to acquire rights
in a subcontractor\'s limited rights data and restricted computer
software for their private use.

\(g\) Rights in Limited Rights Data. Except as may be otherwise
specified in this Contract as data which are not subject to this
paragraph, the Contractor agrees to and does hereby grant to the
Government an irrevocable nonexclusive, paid-up license by or for the
Government, in any limited rights data of the Contractor specifically
used in the performance of this Contract, provided, however, that to the
extent that any limited rights data when furnished or delivered is
specifically identified by the Contractor at the time of initial
delivery to the Government or a representative of the Government, such
data shall not be used within or outside the Government except as
provided in the \"Limited Rights Notice\" set forth below. All such
limited rights data shall be marked with the following \"Limited Rights
Notice:\"

Limited Rights Notice

These data contain \"limited rights data,\" furnished under Contract
No.- with the United States Department of Energy which may be duplicated
and used by the Government with the express limitations that the
\"limited rights data\" may not be disclosed outside the Government or
be used for purposes of manufacture without prior permission of the
Contractor, except that further disclosure or use may be made solely for
the following purposes:

\(a\) Use (except for manufacture) by support services contractors
within the scope of their contracts;

\(b\) This \"limited rights data\" may be disclosed for evaluation
purposes under the restriction that the \"limited rights data\" be
retained in confidence and not be further disclosed;

\(c\) This \"limited rights data\" may be disclosed to other contractors
participating in the Government\'s program of which this Contract is a
part for information or use (except for manufacture) in connection with
the work performed under their contracts and under the restriction that
the \"limited rights data\" be retained in confidence and not be further
disclosed;

\(d\) This \"limited rights data\" may be used by the Government or
others on its behalf for emergency repair or overhaul work under the
restriction that the \"limited rights data\" be retained in confidence
and not be further disclosed; and

\(e\) Release to a foreign government, or instrumentality thereof, as
the interests of the United States Government may require, for
information or evaluation, or for emergency repair or overhaul work by
such government.

This Notice shall be marked on any reproduction of this data in whole or
in part.

(End of Notice)

\(h\) Rights in Restricted Computer Software. (1) Except as may be
otherwise specified in this Contract as data which are not subject to
this paragraph, the Contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, paid-up, license by or for the
Government, in any restricted computer software of the Contractor
specifically used in the performance of this Contract; provided,
however, that to the extent that any restricted computer software when
furnished or delivered is specifically identified by the Contractor at
the time of initial delivery to the Government or a representative of
the Government, such data shall not be used within or outside the
Government except as provided in the \"Restricted Rights Notice\" set
forth below. All such restricted computer software shall be marked with
the following \"Restricted Rights Notice:\"

Restricted Rights Notice-Long Form

\(a\) This computer software is submitted with restricted rights under
Department of Energy Contract No.-. It may not be used, reproduced, or
disclosed by the Government except as provided in paragraph (b) of this
notice.

\(b\) This computer software may be:

\(1\) Used or copied for use in or with the computer or computers for
which it was acquired, including use at any Government installation to
which such computer or computers may be transferred;

\(2\) Used, copied for use, in a backup or replacement computer if any
computer for which it was acquired is inoperative or is replaced;

\(3\) Reproduced for safekeeping (archives) or backup purposes;

\(4\) Modified, adapted, or combined with other computer software,
provided that only the portions of the derivative software consisting of
the restricted computer software are to be made subject to the same
restricted rights; and

\(5\) Disclosed to and reproduced for use by contractors under a service
contract (of the type defined in 48 CFR 37.101) in accordance with
subparagraphs (b)(1) through (4) of this Notice, provided the Government
makes such disclosure or reproduction subject to these restricted
rights.

\(c\) Notwithstanding the foregoing, if this computer software has been
published under copyright, it is licensed to the Government, without
disclosure prohibitions, with the rights set forth in the restricted
rights notice above.

\(d\) This Notice shall be marked on any reproduction of this computer
software, in whole or in part.

(End of Notice)

\(2\) Where it is impractical to include the Restricted Rights Notice on
restricted computer software, the following short-form Notice may be
used in lieu thereof:

Restricted Rights Notice-Short Form

Use, reproduction, or disclosure is subject to restrictions set forth in
the Long Form Notice of DOE Contract No.- with (name of Contractor).

(End of Notice)

\(3\) If the software is embedded, or if it is commercially impractical
to mark it with human readable text, then the symbol R and the clause
date (mo/yr) in brackets or a box, a \[R-mo/yr\], may be used. This will
be read to mean restricted computer software, subject to the rights of
the Government as described in the Long Form Notice, in effect as of the
date indicated next to the symbol. The symbol shall not be used to mark
human readable material. In the event this Contract contains any
variation to the rights in the Long Form Notice, then the contract
number must also be cited.

\(4\) If restricted computer software is delivered with the copyright
notice of *17 U.S.C. 401,* the software will be presumed to be published
copyrighted computer software licensed to the Government without
disclosure prohibitions and with unlimited rights, unless the Contractor
includes the following statement with such copyright notice
\"Unpublished-rights reserved under the Copyright Laws of the United
States.\"

\(i\) Relationship to patents. Nothing contained in this clause creates
or is intended to imply a license to the Government in any patent or is
intended to be construed as affecting the scope of any licenses or other
rights otherwise granted to the Government under any patent.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.2704-3(b), where
access to Category C-24 restricted data is contemplated in the
performance of a contract the contracting officer shall insert the
phrase \"and except Restricted Data in category C-24, 10 CFR part 725,
in which DOE has reserved the right to receive reasonable compensation
for the use of its inventions and discoveries, including related data
and technology\" after \"laser isotope separation\" and before the comma
in paragraph (b)(2)(ii) of the clause at 48 CFR 970.5227-2, Rights in
Data-Technology Transfer, as appropriate.

(End of Clause)

**970.5227-3 Technology transfer mission.**

As prescribed in 48 CFR 970.2770-4(a), insert the following clause:

TECHNOLOGY TRANSFER MISSION (AUG 2002)

This clause has as its purpose implementation of the National
Competitiveness Technology Transfer Act of 1989 (Sections 3131, 3132,
3133, and 3157 of Pub. L. 101-189 and as amended by Pub. L. 103-160,
Sections 3134 and 3160). The Contractor shall conduct technology
transfer activities with a purpose of providing benefit from Federal
research to U.S. industrial competitiveness.

\(a\) Authority. (1) In order to ensure the full use of the results of
research and development efforts of, and the capabilities of, the
Laboratory, technology transfer, including Cooperative Research and
Development Agreements (CRADAs), is established as a mission of the
Laboratory consistent with the policy, principles and purposes of
Sections 11(a)(1) and 12(g) of the Stevenson-Wydler Technology
Innovation Act of 1980, as amended *(15 U.S.C. 3710a);* Section 3132(b)
of Pub. L. 101-189, Sections 3134 and 3160 of Pub. L. 103-160, and of
Chapter 38 of the Patent Laws *(35 U.S.C. 200* et seq.); Section 152 of
the Atomic Energy Act of 1954, as amended *(42 U.S.C. 2182);* Section 9
of the Federal Nonnuclear Energy Research and Development Act of 1974
*(42 U.S.C. 5908);* and Executive Order 12591 of April 10, 1987.

\(2\) In pursuing the technology transfer mission, the Contractor is
authorized to conduct activities including but not limited to:
identifying and protecting Intellectual Property made, created or
acquired at or by the Laboratory; negotiating licensing agreements and
assignments for Intellectual Property made, created or acquired at or by
the Laboratory that the Contractor controls or owns; bailments;
negotiating all aspects of and entering into CRADAs; providing technical
consulting and personnel exchanges; conducting science education
activities and reimbursable Work for Others (WFO); providing information
exchanges; and making available laboratory or weapon production user
facilities. It is fully expected that the Contractor shall use all of
the mechanisms available to it to accomplish this technology transfer
mission, including, but not limited to, CRADAs, user facilities, WFO,
science education activities, consulting, personnel, assignments, and
licensing in accordance with this clause.

\(b\) Definitions. (1) Contractor\'s Laboratory Director means the
individual who has supervision over all or substantially all of the
Contractor\'s operations at the Laboratory.

\(2\) Intellectual Property means patents, trademarks, copyrights, mask
works, protected CRADA information, and other forms of comparable
property rights protected by Federal Law and other foreign counterparts.

\(3\) Cooperative Research and Development Agreement (CRADA) means any
agreement entered into between the Contractor as operator of the
Laboratory, and one or more parties including at least one non-Federal
party under which the Government, through its laboratory, provides
personnel, services, facilities, equipment, intellectual property, or
other resources with or without reimbursement (but not funds to
non-Federal parties) and the non-Federal parties provide funds,
personnel, services, facilities, equipment, intellectual property, or
other resources toward the conduct of specified research or development
efforts which are consistent with the missions of the Laboratory; except
that such term does not include a procurement contract, grant, or
cooperative agreement as those terms are used in sections 6303, 6304,
and 6305 of Title 31 of the United States Code.

\(4\) Joint Work Statement (JWS) means a proposal for a CRADA prepared
by the Contractor, signed by the Contractor\'s Laboratory Director or
designee which describes the following:

\(i\) Purpose;

\(ii\) Scope of Work which delineates the rights and responsibilities of
the Government, the Contractor and Third Parties, one of which must be a
non-Federal party;

\(iii\) Schedule for the work; and

\(iv\) Cost and resource contributions of the parties associated with
the work and the schedule.

\(5\) Assignment means any agreement by which the Contractor transfers
ownership of Laboratory Intellectual Property, subject to the
Government\'s retained rights.

\(6\) Laboratory Biological Materials means biological materials capable
of replication or reproduction, such as plasmids, deoxyribonucleic acid
molecules, ribonucleic acid molecules, living organisms of any sort and
their progeny, including viruses, prokaryote and eukaryote cell lines,
transgenic plants and animals, and any derivatives or modifications
thereof or products produced through their use or associated biological
products, made under this contract by Laboratory employees or through
the use of Laboratory research facilities.

\(7\) Laboratory Tangible Research Product means tangible material
results of research which

\(i\) are provided to permit replication, reproduction, evaluation or
confirmation of the research effort, or to evaluate its potential
commercial utility;

\(ii\) are not materials generally commercially available; and

\(iii\) were made under this contract by Laboratory employees or through
the use of Laboratory research facilities.

\(8\) Bailment means any agreement in which the Contractor permits the
commercial or non-commercial transfer of custody, access or use of
Laboratory Biological Materials or Laboratory Tangible Research Product
for a specified purpose of technology transfer or research and
development, including without limitation evaluation, and without
transferring ownership to the bailee.

\(c\) Allowable Costs. (1) The Contractor shall establish and carry out
its technology transfer efforts through appropriate organizational
elements consistent with the requirements for an Office of Research and
Technology Applications (ORTA) pursuant to paragraphs (b) and (c) of
Section 11 of the Stevenson-Wydler Technology Innovation Act of 1980, as
amended *(15 U.S.C. 3710).* The costs associated with the conduct of
technology transfer through the ORTA including activities associated
with obtaining, maintaining, licensing, and assigning Intellectual
Property rights, increasing the potential for the transfer of
technology, and the widespread notice of technology transfer
opportunities, shall be deemed allowable provided that such costs meet
the other requirements of the allowable costs provisions of this
Contract. In addition to any separately designated funds, these costs in
any fiscal year shall not exceed an amount equal to 0.5 percent of the
operating funds included in the Federal research and development budget
(including Work For Others) of the Laboratory for that fiscal year
without written approval of the contracting officer.

\(2\) The Contractor\'s participation in litigation to enforce or defend
Intellectual Property claims incurred in its technology transfer efforts
shall be as provided in the clause entitled \"Insurance-Litigation and
Claims\" of this contract.

\(d\) Conflicts of Interest-Technology Transfer. The Contractor shall
have implementing procedures that seek to avoid employee and
organizational conflicts of interest, or the appearance of conflicts of
interest, in the conduct of its technology transfer activities. These
procedures shall apply to other persons participating in Laboratory
research or related technology transfer activities. Such implementing
procedures shall be provided to the contracting officer for review and
approval within sixty (60) days after execution of this contract. The
contracting officer shall have thirty (30) days thereafter to approve or
require specific changes to such procedures. Such implementing
procedures shall include procedures to:

\(1\) Inform employees of and require conformance with standards of
conduct and integrity in connection with the CRADA activity in
accordance with the provisions of paragraph (n)(5) of this clause;

\(2\) Review and approve employee activities so as to avoid conflicts of
interest arising from commercial utilization activities relating to
Contractor-developed Intellectual Property;

\(3\) Conduct work performed using royalties so as to avoid interference
with or adverse effects on ongoing DOE projects and programs;

\(4\) Conduct activities relating to commercial utilization of
Contractor-developed Intellectual Property so as to avoid interference
with or adverse effects on user facility or WFO activities of the
Contractor;

\(5\) Conduct DOE-funded projects and programs so as to avoid the
appearance of conflicts of interest or actual conflicts of interest with
non-Government funded work;

\(6\) Notify the contracting officer with respect to any new work to be
performed or proposed to be performed under the Contract for DOE or
other Federal agencies where the new work or proposal involves
Intellectual Property in which the Contractor has obtained or intends to
request or elect title;

\(7\) Except as provided elsewhere in this Contract, obtain the approval
of the contracting officer for any licensing of or assignment of title
to Intellectual Property rights by the Contractor to any business or
corporate affiliate of the Contractor;

\(8\) Obtain the approval of the contracting officer prior to any
assignment, exclusive licensing, or option for exclusive licensing, of
Intellectual Property to any individual who has been a Laboratory
employee within the previous two years or to the company in which the
individual is a principal; and

\(9\) Notify non-Federal sponsors of WFO activities, or non-Federal
users of user facilities, of any relevant Intellectual Property interest
of the Contractor prior to execution of WFOs or user agreements.

\(10\) Notify DOE prior to evaluating a proposal by a third party or
DOE, when the subject matter of the proposal involves an elected or
waived subject invention under this contract or one in which the
Contractor intends to elect to retain title under this contract.

\(e\) Fairness of Opportunity. In conducting its technology transfer
activities, the Contractor shall prepare procedures and take all
reasonable measures to ensure widespread notice of availability of
technologies suited for transfer and opportunities for exclusive
licensing and joint research arrangements. The requirement to widely
disseminate the availability of technology transfer opportunities does
not apply to a specific application originated outside of the Laboratory
and by entities other than the Contractor.

\(f\) U.S. Industrial Competitiveness. (1) In the interest of enhancing
U.S. Industrial Competitiveness, the Contractor shall, in its licensing
and assignments of Intellectual Property, give preference in such a
manner as to enhance the accrual of economic and technological benefits
to the U.S. domestic economy. The Contractor shall consider the
following factors in all of its licensing and assignment decisions
involving Laboratory intellectual property where the Laboratory obtains
rights during the course of the Contractor\'s operation of the
Laboratory under this contract:

\(i\) whether any resulting design and development will be performed in
the United States and whether resulting products, embodying parts,
including components thereof, will be substantially manufactured in the
United States; or

\(ii\) (A) whether the proposed licensee or assignee has a business unit
located in the United States and whether significant economic and
technical benefits will flow to the United States as a result of the
license or assignment agreement; and

\(B\) in licensing any entity subject to the control of a foreign
company or government, whether such foreign government permits United
States agencies, organizations or other persons to enter into
cooperative research and development agreements and licensing
agreements, and has policies to protect United States Intellectual
Property rights.

\(2\) If the Contractor determines that neither of the conditions in
paragraphs (f)(1)(i) or (ii) of this clause are likely to be fulfilled,
the Contractor, prior to entering into such an agreement, must obtain
the approval of the contracting officer. The contracting officer shall
act on any such requests for approval within thirty (30) days.

\(3\) The Contractor agrees to be bound by the provisions of *35 U.S.C.
204* (Preference for United States industry).

\(g\) Indemnity-Product Liability. In entering into written technology
transfer agreements, including but not limited to, research and
development agreements, licenses, assignments and CRADAs, the Contractor
agrees to include in such agreements a requirement that the U.S.
Government and the Contractor, except for any negligent acts or
omissions of the Contractor, be indemnified for all damages, costs, and
expenses, including attorneys\' fees, arising from personal injury or
property damage occurring as a result of the making, using or selling of
a product, process or service by or on behalf of the Participant, its
assignees or licensees which was derived from the work performed under
the agreement. The Contractor shall identify and obtain the approval of
the contracting officer for any proposed exceptions to this requirement
such as where State or local law expressly prohibit the Participant from
providing indemnification or where the research results will be placed
in the public domain.

\(h\) Disposition of Income. (1) Royalties or other income earned or
retained by the Contractor as a result of performance of authorized
technology transfer activities herein shall be used by the Contractor
for scientific research, development, technology transfer, and education
at the Laboratory, consistent with the research and development mission
and objectives of the Laboratory and subject to Section 12(b)(5) of the
Stevenson-Wydler Technology Innovation Act of 1980, as amended *(15
U.S.C. 3710a*(b)(5)) and Chapter 38 of the Patent Laws *(35 U.S.C. 200*
et seq.) as amended through the effective date of this contract award or
modification. If the net amounts of such royalties and income received
from patent licensing after payment of patenting costs, licensing costs,
payments to inventors and other expenses incidental to the
administration of Subject Inventions during any fiscal year exceed 5
percent of the Laboratory\'s budget for that fiscal year, 75 percent of
such excess amounts shall be paid to the Treasury of the United States,
and the remaining amount of such excess shall be used by the Contractor
for the purposes as described above in this paragraph. Any inventions
arising out of such scientific research and development activities shall
be deemed to be Subject Inventions under the Contract.

\(2\) The Contractor shall include as a part of its annual Laboratory
Institutional Plan or other such annual document a plan setting out
those uses to which royalties and other income received as a result of
performance of authorized technology transfer activities herein will be
applied at the Laboratory, and at the end of the year, provide a
separate accounting for how the funds were actually used. Under no
circumstances shall these royalties and income be used for an illegal
augmentation of funds furnished by the U.S. Government.

\(3\) The Contractor shall establish subject to the approval of the
contracting officer a policy for making awards or sharing of royalties
with Contractor employees, other coinventors and coauthors, including
Federal employee coinventors when deemed appropriate by the contracting
officer.

\(i\) Transfer to Successor Contractor. In the event of termination or
upon the expiration of this Contract, any unexpended balance of income
received for use at the Laboratory shall be transferred, at the
contracting officer\'s request, to a successor contractor, or in the
absence of a successor contractor, to such other entity as designated by
the contracting officer. The Contractor shall transfer title, as one
package, to the extent the Contractor retains title, in all patents and
patent applications, licenses, accounts containing royalty revenues from
such license agreements, including equity positions in third party
entities, and other Intellectual Property rights which arose at the
Laboratory, to the successor contractor or to the Government as directed
by the contracting officer.

\(j\) Technology Transfer Affecting the National Security. (1) The
Contractor shall notify and obtain the approval of the contracting
officer, prior to entering into any technology transfer arrangement,
when such technology or any part of such technology is classified or
sensitive under Section 148 of the Atomic Energy Act *(42 U.S.C. 2168).*
Such notification shall include sufficient information to enable DOE to
determine the extent that commercialization of such technology would
enhance or diminish security interests of the United States, or diminish
communications within DOE\'s nuclear weapon production complex. DOE
shall use its best efforts to complete its determination within sixty
(60) days of the Contractor\'s notification, and provision of any
supporting information, and DOE shall promptly notify the Contractor as
to whether the technology is transferable.

\(2\) The Contractor shall include in all of its technology transfer
agreements with third parties, including, but not limited to, CRADAs,
licensing agreements and assignments, notice to such third parties that
the export of goods and/or Technical Data from the United States may
require some form of export control license or other authority from the
U.S. Government and that failure to obtain such export control license
may result in criminal liability under U.S. laws.

\(3\) For other than fundamental research as defined in National
Security Decision Directive 189, the Contractor is responsible to
conduct internal export control reviews and assure that technology is
transferred in accordance with applicable law.

\(k\) Records. The Contractor shall maintain records of its technology
transfer activities in a manner and to the extent satisfactory to the
DOE and specifically including, but not limited to, the licensing
agreements, assignments and the records required to implement the
requirements of paragraphs (e), (f), and (h) of this clause and shall
provide reports to the contracting officer to enable DOE to maintain the
reporting requirements of Section 12(c)(6) of the Stevenson-Wydler
Technology Innovation Act of 1980, as amended *(15 U.S.C. 3710a*(c)(6)).
Such reports shall be made annually in a format to be agreed upon
between the Contractor and DOE and in such a format which will serve to
adequately inform DOE of the Contractor\'s technology transfer
activities while protecting any data not subject to disclosure under the
Rights in Technical Data clause and paragraph (n) of this clause. Such
records shall be made available in accordance with the clauses of this
Contract pertaining to inspection, audit and examination of records.

\(l\) Reports to Congress. To facilitate DOE\'s reporting to Congress,
the Contractor is required to submit annually to DOE a technology
transfer plan for conducting its technology transfer function for the
upcoming year, including plans for securing Intellectual Property rights
in Laboratory innovations with commercial promise and plans for managing
such innovations so as to benefit the competitiveness of United States
industry. This plan shall be provided to the contracting officer on or
before October 1st of each year.

\(m\) Oversight and Appraisal. The Contractor is responsible for
developing and implementing effective internal controls for all
technology transfer activities consistent with the audit and record
requirements of this Contract. Laboratory Contractor performance in
implementing the technology transfer mission and the effectiveness of
the Contractor\'s procedures will be evaluated by the contracting
officer as part of the annual appraisal process, with input from the
cognizant Secretarial Officer or program office.

\(n\) Technology Transfer Through Cooperative Research and Development
Agreements. Upon approval of the contracting officer and as provided in
a DOE approved Joint Work Statement (JWS), the Laboratory Director, or
designee, may enter into CRADAs on behalf of the DOE subject to the
requirements set forth in this paragraph.

\(1\) Review and Approval of CRADAs. (i) Except as otherwise directed in
writing by the contracting officer, each JWS shall be submitted to the
contracting officer for approval. The Contractor\'s Laboratory Director
or designee shall provide a program mission impact statement and shall
include an impact statement regarding related Intellectual Property
rights known by the Contractor to be owned by the Government to assist
the contracting officer in the approval determination.

\(ii\) The Contractor shall also include (specific to the proposed
CRADA), a statement of compliance with the Fairness of Opportunity
requirements of paragraph (e) of this clause.

\(iii\) Within thirty (30) days after submission of a JWS or proposed
CRADA, the contracting officer shall approve, disapprove or request
modification to the JWS or CRADA. The contracting officer shall provide
a written explanation to the Contractor\'s Laboratory Director or
designee of any disapproval or requirement for modification of a JWS or
proposed CRADA.

\(iv\) Except as otherwise directed in writing by the contracting
officer, the Contractor shall not enter into, or begin work under, a
CRADA until approval of the CRADA has been granted by the contracting
officer. The Contractor may submit its proposed CRADA to the contracting
officer at the time of submitting its proposed JWS or any time
thereafter.

\(2\) Selection of Participants. The Contractor\'s Laboratory Director
or designee in deciding what CRADA to enter into shall:

\(i\) Give special consideration to small business firms, and consortia
involving small business firms;

\(ii\) Give preference to business units located in the United States
which agree that products or processes embodying Intellectual Property
will be substantially manufactured or practiced in the United States
and, in the case of any industrial organization or other person subject
to the control of a foreign company or government, take into
consideration whether or not such foreign government permits United
States agencies, organizations, or other persons to enter into
cooperative research and development agreements and licensing
agreements;

\(iii\) Provide Fairness of Opportunity in accordance with the
requirements of paragraph (e) of this clause; and

\(iv\) Give consideration to the Conflicts of Interest requirements of
paragraph (d) of this clause.

\(3\) Withholding of Data. (i) Data that is first produced as a result
of research and development activities conducted under a CRADA and that
would be a trade secret or commercial or financial data that would be
privileged or confidential, if such data had been obtained from a
non-Federal third party, may be protected from disclosure under the
Freedom of Information Act as provided in the Stevenson-Wydler
Technology Innovation Act of 1980, as amended *(15 U.S.C. 3710a*(c)(7))
for a period as agreed in the CRADA of up to five (5)years from the time
the data is first produced. The DOE shall cooperate with the Contractor
in protecting such data.

\(ii\) Unless otherwise expressly approved by the contracting officer in
advance for a specific CRADA, the Contractor agrees, at the request of
the contracting officer, to transmit such data to other DOE facilities
for use by DOE or its Contractors by or on behalf of the Government.
When data protected pursuant to paragraph (n)(3)(i) of this clause is so
transferred, the Contractor shall clearly mark the data with a legend
setting out the restrictions against private use and further
dissemination, along with the expiration date of such restrictions.

\(iii\) In addition to its authority to license Intellectual Property,
the Contractor may enter into licensing agreements with third parties
for data developed by the Contractor under a CRADA subject to other
provisions of this Contract. However, the Contractor shall neither use
the protection against dissemination nor the licensing of data as an
alternative to the submittal of invention disclosures which include data
protected pursuant to paragraph (n)(3)(i) of this clause.

\(4\) Work For Others and User Facility Programs. (i) WFO and User
Facility Agreements (UFAs) are not CRADAs and will be available for use
by the Contractor in addition to CRADAs for achieving utilization of
employee expertise and unique facilities for maximizing technology
transfer. The Contractor agrees form prospective CRADA participants,
which are intending to substantially pay full cost recovery for the
effort under a proposed CRADA, of the availability of alternative forms
of agreements, i.e., WFO and UFA, and of the Class Patent Waiver
provisions associated therewith.

\(ii\) Where the Contractor believes that the transfer of technology to
the U.S. domestic economy will benefit from, or other equity
considerations dictate, an arrangement other than the Class Waiver of
patent rights to the sponsor in WFO and UFAs, a request may be made to
the contracting officer for an exception to the Class Waivers.

\(iii\) Rights to inventions made under agreements other than funding
agreements with third parties shall be governed by the appropriate
provisions incorporated, with DOE approval, in such agreements, and the
provisions in such agreements take precedence over any disposition of
rights contained in this Contract. Disposition of rights under any such
agreement shall be in accordance with any DOE class waiver (including
Work for Others and User Class Waivers) or individually negotiated
waiver which applies to the agreement.

\(5\) Conflicts of Interest. (i) Except as provided in paragraph
(n)(5)(iii) of this clause, the Contractor shall assure that no employee
of the Contractor shall have a substantial role (including an advisory
role) in the preparation, negotiation, or approval of a CRADA, if, to
such employee\'s knowledge:

\(A\) Such employee, or the spouse, child, parent, sibling, or partner
of such employee, or an organization (other than the Contractor) in
which such employee serves as an officer, director, trustee, partner, or
employee-

\(1\) holds financial interest in any entity, other than the Contractor,
that has a substantial interest in the preparation, negotiation, or
approval of the CRADA;

\(2\) receives a gift or gratuity from any entity, other than the
Contractor, that has a substantial interest in the preparation,
negotiation, or approval of the CRADA; or

\(B\) A financial interest in any entity, other than the Contractor,
that has a substantial interest in the preparation, negotiation, or
approval of the CRADA, is held by any person or organization with whom
such employee is negotiating or has any arrangement concerning
prospective employment.

\(ii\) The Contractor shall require that each employee of the Contractor
who has a substantial role (including an advisory role) in the
preparation, negotiation, or approval of a CRADA certify through the
Contractor to the contracting officer that the circumstances described
in paragraph (n)(5)(i) of this clause do not apply to that employee.

\(iii\) The requirements of paragraphs (n)(5)(i) and (n)(5)(ii) of this
clause shall not apply in a case where the contracting officer is
advised by the Contractor in advance of the participation of an employee
described in those paragraphs in the preparation, negotiation or
approval of a CRADA of the nature of and extent of any financial
interest described in paragraph (n)(5)(i) of this clause, and the
contracting officer determines that such financial interest is not so
substantial as to be considered likely to affect the integrity of the
Contractor employee\'s participation in the process of preparing,
negotiating, or approving the CRADA.

\(o\) Technology Transfer in Other Cost-Sharing Agreements. In
conducting research and development activities in cost-shared agreements
not covered by paragraph (n) of this clause, the Contractor, with prior
written permission of the contracting officer, may provide for the
withholding of data produced thereunder in accordance with the
applicable provisions of paragraph (n)(3) of this clause.

\(p\) Technology Partnership Ombudsman.

\(1\) The Contractor agrees to establish a position to be known as
"Technology Partnership Ombudsman," to help resolve complaints from
outside organizations regarding the policies and actions of the
contractor with respect to technology partnerships (including CRADAs),
patents owned by the contractor for inventions made at the laboratory,
and technology licensing.

\(2\) The Ombudsman shall be a senior official of the Contractor's
laboratory staff, who is not involved in day-to-day technology
partnerships, patents or technology licensing, or, if appointed from
outside the laboratory or facility, shall function as such senior
official.

\(3\) The duties of the Technology Partnership Ombudsman shall include:

\(i\) Serving as the focal point for assisting the public and industry
in resolving complaints and disputes with the laboratory or facility
regarding technology partnerships, patents, and technology licensing;

(ii Promoting the use of collaborative alternative dispute resolution
techniques such as mediation to facilitate the speedy and low cost
resolution of complaints and disputes, when appropriate; and

\(iii\) Submitting a quarterly report, in a format provided by DOE, to
the Secretary of Energy, the Administrator for Nuclear Security, the
Director of the DOE Office of Dispute Resolution, and the Contracting
Officer concerning the number and nature of complaints and disputes
raised, along with the Ombudsman's assessment of their resolution,
consistent with the protection of confidential and sensitive
information.

(End of clause)

Alternate I (AUG 2002). As prescribed in 48 CFR 970.2770-4(b), add the
following definition under paragraph (b) and the following new paragraph
(q):

(b)(8) Privately funded technology transfer means the prosecuting,
maintaining, licensing, and marketing of inventions which are not owned
by the Government (and not related to CRADAs) when such activities are
conducted entirely without the use of Government funds.

\(q\) Nothing in paragraphs (c) Allowable Costs, (e) Fairness of
Opportunity, (f) U.S. Industrial Competitiveness, (g) Indemnity-Product
Liability, (h) Disposition of Income, and (i) Transfer to Successor
Contractor of this clause are intended to apply to the contractor\'s
privately funded technology transfer activities if such privately funded
activities are addressed elsewhere in the contract.

Alternate II (DEC 2000). As prescribed in 48 CFR 970.2770-4(c), the
contracting officer shall substitute the phrase \"weapon production
facility\" wherever the word \"laboratory\" appears in the clause.

Final Rule 67 FR 48568 July 25, 2002

**970.5227-4 Authorization and consent.**

Insert the following clause in solicitations and contracts in accordance
with 970.2702-1:

AUTHORIZATION AND CONSENT (AUG 2002)

\(a\) The Government authorizes and consents to all use and manufacture
of any invention described in and covered by a United States patent in
the performance of this contract or any subcontract at any tier.

(b)If the Contractor is sued for copyright infringement or anticipates
the filing of such a lawsuit, the Contractor may request authorization
and consent to copy a copyrighted work from the contracting officer.
Programmatic necessity is a major consideration for DOE in determining
whether to grant such request.

(c)(1) The Contractor agrees to include, and require inclusion of, the
Authorization and Consent clause at 52.227-1, without Alternate 1, but
suitably modified to identify the parties, in all subcontracts expected
to exceed \$100,000 at any tier for supplies or services, including
construction, architect-engineer services, and materials, supplies,
models, samples, and design or testing services.

\(2\) The Contractor agrees to include, and require inclusion of,
paragraph (a) of this Authorization and Consent clause, suitably
modified to identify the parties, in all subcontracts at any tier for
research and development activities expected to exceed \$100,000.

\(3\) Omission of an authorization and consent clause from any
subcontract, including those valued less than \$100,000 does not affect
this authorization and consent.

(End of clause)

Final Rule 67 FR 48568 July 25, 2002

**970.5227-5 Notice and assistance regarding patent and copyright
infringement.**

Insert the following clause in solicitations and contracts in accordance
with 970.2702-2:

NOTICE AND ASSISTANCE REGARDING PATENT

AND COPYRIGHT INFRINGEMENT (AUG 2002)

\(a\) The Contractor shall report to the Contracting Officer promptly
and in reasonable written detail, each notice or claim of patent or
copyright infringement based on the performance of this contract of
which the Contractor has knowledge.

\(b\) If any person files a claim or suit against the Government on
account of any alleged patent or copyright infringement arising out of
the performance of this contract or out of the use of any supplies
furnished or work or services performed hereunder, the Contractor shall
furnish to the Government, when requested by the Contracting Officer,
all evidence and information in possession of the Contractor pertaining
to such suit or claim. Except where the Contractor has agreed to
indemnify the Government, the Contractor shall furnish such evidence and
information at the expense of the Government.

\(c\) The Contractor agrees to include, and require inclusion of, this
clause suitably modified to identify the parties, in all subcontracts at
any tier expected to exceed \$100,000.

(End of clause)

Final Rule 67 FR 48568 July 25, 2002

**970.5227-6 Patent indemnity subcontracts.**

Insert the following clause in solicitations and contracts in accordance
with 970.2702-3:

PATENT INDEMNITY-SUBCONTRACTS (DEC 2000)

Except as otherwise authorized by the Contracting Officer, the
Contractor shall obtain indemnification of the Government and its
officers, agents, and employees against liability, including costs, for
infringement of any United States patent (except a patent issued upon an
application that is now or may hereafter be withheld from issue pursuant
to a secrecy order by the Government) from Contractor\'s subcontractors
for any contract work subcontracted in accordance with FAR 48 CFR
52.227-3.

(End of clause)

**970.5227-7 Royalty information.**

Insert the following provision in solicitations in accordance with
970.2702-4:

ROYALTY INFORMATION (DEC 2000)

\(a\) Cost or charges for royalties. If the response to this
solicitation contains costs or charges for royalties totaling more than
\$250, the following information shall be included in the response
relating to each separate item of royalty or license fee:

\(1\) Name and address of licensor;

\(2\) Date of license agreement;

\(3\) Patent numbers, patent application serial numbers, or other basis
on which the royalty is payable;

\(4\) Brief description, including any part or model numbers of each
contract item or component on which the royalty is payable;

\(5\) Percentage or dollar rate of royalty per unit;

\(6\) Unit price of contract item;

\(7\) Number of units; and

\(8\) Total dollar amount of royalties.

\(b\) Copies of current licenses. In addition, if specifically requested
by the Contracting Officer before execution of the contract, the offeror
shall furnish a copy of the current license agreement and an
identification of applicable claims of specific patents or other basis
upon which the royalty may be payable.

(End of provision)

**970.5227-8 Refund of royalties.**

Insert the following clause in solicitations and contracts in accordance
with 970.2702-4:

REFUND OF ROYALTIES (AUG 2002)

\(a\) During performance of this Contract, if any royalties are proposed
to be charged to the Government as costs under this Contract, the
Contractor agrees to submit for approval of the Contracting Officer,
prior to the execution of any license, the following information
relating to each separate item of royalty:

\(1\) Name and address of licensor;

\(2\) Patent numbers, patent application serial numbers, or other basis
on which the royalty is payable;

\(3\) Brief description, including any part or model numbers of each
contract item or component on which the royalty is payable;

\(4\) Percentage or dollar rate of royalty per unit;

\(5\) Unit price of contract item;

\(6\) Number of units;

\(7\) Total dollar amount of royalties; and

\(8\) A copy of the proposed license agreement.

\(b\) If specifically requested by the Contracting Officer, the
Contractor shall furnish a copy of any license agreement entered into
prior to the effective date of this clause and an identification of
applicable claims of specific patents or other basis upon which
royalties are payable.

\(c\) The term "royalties" as used in this clause refers to any costs or
charges in the nature of royalties, license fees, patent or license
amortization costs, or the like, for the use of or for rights in patents
and patent applications that are used in the performance of this
contract or any subcontract hereunder.

\(d\) The Contractor shall furnish to the Contracting Officer, annually
upon request, a statement of royalties paid or required to be paid in
connection with performing this Contract and subcontracts hereunder.

\(e\) For royalty payments under licenses entered into after the
effective date of this Contract, costs incurred for royalties proposed
under this paragraph shall be allowable only to the extent that such
royalties are approved by the Contracting Officer. If the Contracting
Officer determines that existing or proposed royalty payments are
inappropriate, any payments subsequent to such determination shall be
allowable only to the extent approved by the Contracting Officer.

\(f\) Regardless of prior DOE approval of any individual payments or
royalties, DOE may contest at any time the enforceability, validity,
scope of, or title to a patent for which the Contractor makes a royalty
or other payment.

\(g\) If at any time within 3 years after final payment under this
contract, the Contractor for any reason is relieved in whole or in part
from the payment of any royalties to which this clause applies, the
Contractor shall promptly notify the Contracting Officer of that fact
and shall promptly reimburse the Government for any refunds received or
royalties paid after having received notice of such relief.

\(h\) The Contractor agrees to include, and require inclusion of, this
clause, including this paragraph (h), suitably modified to identify the
parties in any subcontract at any tier in which the amount of royalties
reported during negotiation of the subcontract exceeds \$250.

(End of clause) Final Rule 67 FR 48568 July 25, 2002

**970.5227-9 Notice of right to request patent waiver.**

Insert the following provision in solicitations in accordance with
970.2704-6:

NOTICE OF RIGHT TO REQUEST PATENT WAIVER (DEC 2000)

Offerors have the right to request a waiver of all or any part of the
rights of the United States in inventions conceived or first actually
reduced to practice in performance of the contract, in advance of or
within 30 days after the effective date of contracting. If such advance
waiver is not requested or the request is denied, the Contractor has a
continuing right under the contract to request a waiver of the rights of
the Government in identified inventions, i.e., individual inventions
conceived or first actually reduced to practice in performance of the
contract. Contractors that are domestic small businesses and domestic
nonprofit organizations may not need a waiver and will have included in
their contracts a patent clause reflecting their right to elect title to
subject inventions pursuant to the Bayh-Dole Act *(35 U.S.C. 200* et
seq.).

(End of provision)

**970.5227-10 Patent rights management and operating contracts,
nonprofit organization or small business firm contractor.**

As prescribed in 970.2703-1(b)(2), insert the following clause:

PATENT RIGHTS-MANAGEMENT AND OPERATING CONTRACTS, NONPROFIT

ORGANIZATION OR SMALL BUSINESS FIRM CONTRACTOR (AUG 2002)

\(a\) Definitions.

\(1\) DOE licensing regulations means the Department of Energy patent
licensing regulations at 10 CFR Part 781.

\(2\) Exceptional circumstance subject invention means any subject
invention in a technical field or related to a task determined by the
Department of Energy to be subject to an exceptional circumstance under
*35 U.S.C. 202*(a)(ii) and in accordance with 37 CFR 401.3(e).

\(3\) Invention means any invention or discovery which is or may be
patentable or otherwise protectable under Title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act *(7 U.S.C. 2321* et seq.).

\(4\) Made when used in relation to any invention means the conception
or first actual reduction to practice of such invention.

\(5\) Nonprofit organization means a university or other institution of
higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 *(26 U.S.C. 501*(c)) and
exempt from taxation under section 501(a) of the Internal Revenue Code
*(26 U.S.C. 501*(a)) or any nonprofit scientific or educational
organization qualified under a state nonprofit organization statute.

\(6\) Patent Counsel means the Department of Energy (DOE) Patent Counsel
assisting the DOE contracting activity.

\(7\) Practical application means to manufacture, in the case of a
composition or product; to practice, in the case of a process or method;
or to operate, in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(8\) Small business firm means a small business concern as defined at
section 2 of Pub. L. 85-536 *(15 U.S.C. 632)* and implementing
regulations of the Administrator of the Small Business Administration.
For the purpose of this clause, the size standards for small business
concerns involved in Government procurement and subcontracting at 13 CFR
121.3-8 and 13 CFR 121.3-12, respectively, are used.

\(9\) Subject Invention means any invention of the contractor conceived
or first actually reduced to practice in the performance of work under
this contract, provided that in the case of a variety of plant, the date
of determination (as defined in section 41(d) of the Plant Variety
Protection Act, *7 U.S.C. 2401*(d)) shall also occur during the period
of contract performance.

\(b\) Allocation of Principal Rights.

\(1\) Retention of title by the Contractor. Except for exceptional
circumstance subject inventions, the contractor may retain the entire
right, title, and interest throughout the world to each subject
invention subject to the provisions of this clause and *35 U.S.C. 203.*
With respect to any subject invention in which the Contractor retains
title, the Federal government shall have a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States the subject invention
throughout the world.

\(2\) Exceptional circumstance subject inventions. Except to the extent
that rights are retained by the Contractor in a determination of
exceptional circumstances or granted to a contractor through a
determination of greater rights in accordance with subparagraph (b)(4)
of this clause, the Contractor does not have a right to retain title to
any exceptional circumstance subject inventions and agrees to assign to
the Government the entire right, title, and interest, throughout the
world, in and to any exceptional circumstance subject inventions.

\(i\) Inventions within or relating to the following fields of
technology are exceptional circumstance subject inventions:

\(A\) uranium enrichment technology;

\(B\) storage and disposal of civilian high-level nuclear waste and
spent fuel technology; and

\(C\) national security technologies classified or sensitive under
Section 148 of the Atomic Energy Act *(42 U.S.C. 2168).*

\(ii\) Inventions made under any agreement, contract or subcontract
related to the following are exceptional circumstance subject
inventions:

\(A\) DOE Steel Initiative and Metals Initiative;

\(B\) U.S. Advanced Battery Consortium; and

\(C\) any funding agreement which is funded in part by the Electric
Power Research Institute (EPRI) or the Gas Research Institute (GRI).

\(iii\) DOE reserves the right to unilaterally amend this contract to
modify, by deletion or insertion, technical fields, tasks, or other
classifications for the purpose of determining DOE exceptional
circumstance subject inventions.

\(3\) Treaties and international agreements. Any rights acquired by the
Contractor in subject inventions are subject to any disposition of
right, title, or interest in or to subject inventions provided for in
treaties or international agreements identified at Appendix \[ Insert
Reference \] to this contract. DOE reserves the right to unilaterally
amend this contract to identify specific treaties or international
agreements entered into or to be entered into by the Government after
the effective date of this contract and to effectuate those license or
other rights which are necessary for the Government to meet its
obligations to foreign governments, their nationals and international
organizations\[\*81060\]under such treaties or international agreements
with respect to subject inventions made after the date of the amendment.

\(4\) Contractor request for greater rights in exceptional circumstance
subject inventions. The Contractor may request rights greater than
allowed by the exceptional circumstance determination in an exceptional
circumstance subject invention by submitting such a request in writing
to Patent Counsel at the time the exceptional circumstance subject
invention is disclosed to DOE or within eight (8) months after
conception or first actual reduction to practice of the exceptional
circumstance subject invention, whichever occurs first, unless a longer
period is authorized in writing by the Patent Counsel for good cause
shown in writing by the Contractor. DOE may, in its discretion, grant or
refuse to grant such a request by the Contractor.

\(5\) Contractor employee-inventor rights. If the Contractor does not
elect to retain title to a subject invention or does not request greater
rights in an exceptional circumstance subject invention, a Contractor
employee-inventor, after consultation with the Contractor and with
written authorization from the Contractor in accordance with 10 CFR
784.9(b)(4), may request greater rights, including title, in the subject
invention or the exceptional circumstance invention from DOE, and DOE
may, in its discretion, grant or refuse to grant such a request by the
Contractor employee-inventor.

\(6\) Government assignment of rights in Government employees\' subject
inventions. If a Government employee is a joint inventor of a subject
invention or of an exceptional circumstance subject invention to which
the Contractor has rights, the Government may assign or refuse to assign
to the Contractor any rights in the subject invention or exceptional
circumstance subject invention acquired by the Government from the
Government employee, in accordance with 48 CFR 27.304-1(d). The rights
assigned to the Contractor are subject to any provision of this clause
that is applicable to subject inventions in which the Contractor retains
title, including reservation by the Government of a nonexclusive,
nontransferable, irrevocable, paid-up license, except that the
Contractor shall file its initial patent application claiming the
subject invention or exceptional circumstance invention within one (1)
year after the assignment of such rights. The Contractor shall share
royalties collected for the manufacture, use or sale of the subject
invention with the Government employee.

\(c\) Subject Invention Disclosure, Election of Title and Filing of
Patent Application by Contractor.

\(1\) Subject invention disclosure. The contractor will disclose each
subject invention to the Patent Counsel within two months after the
inventor discloses it in writing to contractor personnel responsible for
patent matters. The disclosure to the agency shall be in the form of a
written report and shall identify the contract under which the invention
was made and the inventor(s) and all sources of funding by B&R code for
the invention. It shall be sufficiently complete in technical detail to
convey a clear understanding to the extent known at the time of the
disclosure, of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale or public use of
the invention and whether a manuscript describing the invention has been
submitted for publication and, if so, whether it has been accepted for
publication at the time of disclosure. The disclosure shall include a
written statement as to whether the invention falls within an
exceptional circumstance field. DOE will make a determination and advise
the Contractor within 30 days of receipt of an invention disclosure as
to whether the invention is an exceptional circumstance subject
invention. In addition, after disclosure to the Patent Counsel, the
Contractor will promptly notify the agency of the acceptance of any
manuscript describing the invention for publication or of any on sale or
public use planned by the contractor. The Contractor shall obtain
approval from Patent Counsel prior to any release or publication of
information concerning any nonelectable subject invention such as an
exceptional circumstance subject invention or any subject invention
related to a treaty or international agreement.

\(2\) Election by the Contractor. Except as provided in paragraph (b)(2)
of this clause, the Contractor will elect in writing whether or not to
retain title to any such invention by notifying the Federal agency
within two years of disclosure to the Federal agency. However, in any
case where publication, on sale or public use has initiated the one year
statutory period wherein valid patent protection can still be obtained
in the United States, the period for election of title may be shortened
by the agency to a date that is no more than 60 days prior to the end of
the statutory period.

\(3\) Filing of patent applications by the Contractor. The Contractor
will file its initial patent application on a subject invention to which
it elects to retain title within one year after election of title or, if
earlier, or prior to the end of any 1-year statutory period wherein
valid patent protection can be obtained in the United States after a
publication, on sale, or public use. The Contractor will file patent
applications in additional countries or international patent offices
within either ten months of the corresponding initial patent application
or six months from the date permission is granted by the Commissioner of
Patents and Trademarks to file foreign patent applications where such
filing has been prohibited by a Secrecy Order.

\(4\) Contractor\'s request for an extension of time. Requests for an
extension of the time for disclosure, election, and filing under
subparagraphs (c)(1), (2) and (3) may, at the discretion of Patent
Counsel, be granted.

\(5\) Publication Approval. During the course of the work under this
contract, the Contractor or its employees may desire to release or
publish information regarding scientific or technical developments
conceived or first actually reduced to practice in the course of or
under this contract. In order that public disclosure of such information
will not adversely affect the patent interest of DOE or the Contractor,
approval for release or publication shall be secured from the Contractor
personnel responsible for patent matters prior to any such release or
publication. Where DOE\'s approval of publication is requested, DOE\'s
response to such requests for approval shall normally be provided within
90 days except in circumstances in which a domestic patent application
must be filed in order to protect foreign rights. In the case involving
foreign patent rights, DOE shall be granted an additional 180 days with
which to respond to the request for approval, unless extended by mutual
agreement.

\(d\) Conditions When the Government May Obtain Title.

The Contractor will convey to the DOE, upon written request, title to
any subject invention-

\(1\) If the Contractor fails to disclose or elect title to the subject
invention within the times specified in paragraph (c) of this clause, or
elects not to retain title; provided, that DOE may only request title
within sixty (60) days after learning of the failure of the Contractor
to disclose or to elect within the specified times.

\(2\) In those countries in which the Contractor fails to file a patent
application within the times specified in subparagraph (c) of this
clause; provided, however, that if the Contractor has filed a patent
application in a country after the times specified in subparagraph (c)
above, but prior to its receipt of the written request of the DOE, the
Contractor shall continue to retain title in that country.

\(3\) In any country in which the Contractor decides not to continue the
prosecution of any application for, to pay the maintenance fees on, or
defend in a reexamination or opposition proceeding on, a patent on a
subject invention.

\(4\) If the Contractor requests that DOE acquire title or rights from
the Contractor in a subject invention to which the Contractor had
initially retained title or rights, or in an exceptional circumstance
subject invention to which the Contractor was granted greater rights,
DOE may acquire such title or rights from the Contractor, or DOE may
decide against acquiring such title or rights from the Contractor, at
DOE\'s sole discretion.

\(e\) Minimum Rights of the Contractor and Protection of the
Contractor\'s Right to File.

\(1\) Request for a Contractor license. The Contractor may request the
right to reserve a revocable, nonexclusive, royalty-free license
throughout the world in each subject invention to which the Government
obtains title, except if the Contractor fails to disclose the invention
within the times specified in paragraph (c) of this clause. DOE may
grant or refuse to grant such a request by the Contractor. When DOE
approves such reservation, the Contractor\'s license will normally
extend to its domestic subsidiaries and affiliates, if any, within the
corporate structure of which the Contractor is a party and includes the
right to grant sublicenses of the same scope to the extent the
Contractor was legally obligated to do so at the time the contract was
awarded. The license is transferable only with the approval of DOE
except when transferred to the successor of that part of the
contractor\'s business to which the invention pertains.

\(2\) Revocation or modification of a Contractor license. The
Contractor\'s domestic license may be revoked or modified by DOE to the
extent necessary to achieve expeditious practical application of the
subject invention pursuant to an application for an exclusive license
submitted in accordance with applicable provisions at 37 CFR Part 404
and DOE licensing regulations at 10 CFR Part 781. This license will not
be revoked in the field of use or the geographical areas in which the
Contractor has achieved practical application and continues to make the
benefits of the subject invention reasonably accessible to the public.
The license in any foreign country may be revoked or modified at the
discretion of DOE to the extent the Contractor, its licensees, or the
domestic subsidiaries or affiliates have failed to achieve practical
application of the subject invention in that foreign country.

\(3\) Notice of revocation of modification of a Contractor license.
Before revocation or modification of the license, DOE will furnish the
Contractor a written notice of its intention to revoke or modify the
license, and the Contractor will be allowed thirty days (or such other
time as may be authorized by DOE for good cause shown by the Contractor)
after the notice to show cause why the license should not be revoked or
modified. The Contractor has the right to appeal, in accordance with
applicable regulations in 37 CFR part 404 and DOE licensing regulations
at 10 CFR part 781 concerning the licensing of Government owned
inventions, any decision concerning the revocation or modification of
the license.

\(f\) Contractor Action to Protect the Government\'s Interest.

\(1\) Execution of delivery of title or license instruments. The
Contractor agrees to execute or to have executed, and promptly deliver
to the Patent Counsel all instruments necessary to accomplish the
following actions:

\(i\) establish or confirm the rights the Government has throughout the
world in those subject inventions to which the Contractor elects to
retain title, and

\(ii\) convey title to DOE when requested under subparagraphs (b) or
paragraph (d) of this clause and to enable the Government to obtain
patent protection throughout the world in that subject invention.

\(2\) Contractor employee agreements. The Contractor agrees to require,
by written agreement, its employees, other than clerical and
nontechnical employees, to disclose promptly in writing to Contractor
personnel identified as responsible for the administration of patent
matters and in a format suggested by the Contractor, each subject
invention made under this contract in order that the Contractor can
comply with the disclosure provisions of paragraph (c) of this clause,
and to execute all papers necessary to file patent applications on
subject inventions and to establish the Government\'s rights in the
subject inventions. This disclosure format should require, as a minimum,
the information required by subparagraph (c)(1) of this clause. The
Contractor shall instruct such employees, through employee agreements or
other suitable educational programs, on the importance of reporting
inventions in sufficient time to permit the filing of patent
applications prior to U.S. or foreign statutory bars.

\(3\) Notification of discontinuation of patent protection. The
contractor will notify the Patent Counsel of any decision not to
continue the prosecution of a patent application, pay maintenance fees,
or defend in a reexamination or opposition proceeding on a patent, in
any country, not less than thirty days before the expiration of the
response period required by the relevant patent office.

\(4\) Notification of Government rights. The contractor agrees to
include, within the specification of any United States patent
applications and any patent issuing thereon covering a subject
invention, the following statement, \"This invention was made with
government support under (identify the contract) awarded by (identify
the Federal agency). The government has certain rights in the
invention.\"

\(5\) Invention Identification Procedures. The Contractor shall
establish and maintain active and effective procedures to ensure that
subject inventions are promptly identified and timely disclosed and
shall submit a written description of such procedures to the Contracting
Officer so that the Contracting Officer may evaluate and determine their
effectiveness.

\(6\) Invention Filing Documentation. If the Contractor files a domestic
or foreign patent application claiming a subject invention, the
Contractor shall promptly submit to Patent Counsel, upon request, the
following information and documents:

\(i\) the filing date, serial number, title, and a copy of the patent
application (including an English-language version if filed in a
language other than English);

\(ii\) an executed and approved instrument fully confirmatory of all
Government rights in the subject invention; and

\(iii\) the patent number, issue date, and a copy of any issued patent
claiming the subject invention.

\(7\) Duplication and disclosure of documents. The Government may
duplicate and disclose subject invention disclosures and all other
reports and papers furnished or required to be furnished pursuant to
this clause; provided, however, that any such duplication or disclosure
by the Government is subject to the confidentiality provision at *35
U.S.C. 205* and 37 CFR Part 40.

\(g\) Subcontracts.

\(1\) Subcontractor subject inventions. The Contractor shall not obtain
rights in the subcontractor\'s subject inventions as part of the
consideration for awarding a subcontract.

\(2\) Inclusion of patent rights clause-non-profit organization or small
business firm subcontractors. Unless otherwise authorized or directed by
the Contracting Officer, the Contractor shall include the patent rights
clause at 48 CFR 952.227-11, suitably modified to identify the parties,
in all subcontracts, at any tier, for experimental, developmental,
demonstration or research work to be performed by a small business firm
or domestic nonprofit organization, except subcontracts which are
subject to exceptional circumstances in accordance with *35 U.S.C. 202*
and subparagraph (b)(2) of this clause. The subcontractor retains all
rights provided for the contractor in the patent rights clause at 48 CFR
952.227-11.

\(3\) Inclusion of patent rights clause-subcontractors other than
non-profit organizations and small business firms. Except for the
subcontracts described in subparagraph (g)(2) of this clause, the
Contractor shall include the patent rights clause at 48 CFR 952.227-13,
suitably modified to identify the parties, in any contract for
experimental, developmental, demonstration or research work. For
subcontracts subject to exceptional circumstances, the contractor must
consult with DOE patent counsel with respect to the appropriate patent
clause.

\(4\) DOE and subcontractor contract. With respect to subcontracts at
any tier, DOE, the subcontractor, and the Contractor agree that the
mutual obligations of the parties created by this clause constitute a
contract between the subcontractor and DOE with respect to the matters
covered by the clause; provided, however, that nothing in this paragraph
is intended to confer any jurisdiction under the Contract Disputes Act
in connection with proceedings under paragraph (j) of this clause.

\(5\) Subcontractor refusal to accept terms of patent clause. If a
prospective subcontractor refuses to accept the terms of a patent rights
clause, the Contractor shall promptly submit a written notice to the
Contracting Officer stating the subcontractor\'s reasons for such a
refusal, including any relevant information for expediting disposition
of the matter, and the Contractor shall not proceed with the subcontract
without the written authorization of the Contracting Officer.

\(6\) Notification of award of subcontract. Upon the award of any
subcontract at any tier containing a patent rights clause, the
Contractor shall promptly notify the Contracting Officer in writing and
identify the subcontractor, the applicable patent rights clause, the
work to be performed under the subcontract, and the dates of award and
estimated completion. Upon request of the Contracting Officer, the
Contractor shall furnish a copy of a subcontract.

\(7\) Identification of subcontractor subject inventions. If the
Contractor in the performance of this contract becomes aware of a
subject invention made under a subcontract, the Contractor shall
promptly notify Patent Counsel and identify the subject invention.

\(h\) Reporting on Utilization of Subject Inventions. The Contractor
agrees to submit to DOE on request, periodic reports, no more frequently
than annually, on the utilization of a subject invention or on efforts
at obtaining such utilization that are being made by the Contractor or
its licensees or assignees. Such reports shall include information
regarding the status of development, date of first commercial sale or
use, gross royalties received by the Contractor, and such other data and
information as DOE may reasonably specify. The Contractor also agrees to
provide additional reports as may be requested by DOE in connection with
any march-in proceeding undertaken by DOE in accordance with paragraph
(j) of this clause. As required by *35 U.S.C. 202*(c)(5), DOE agrees it
will not disclose such information to persons outside the Government
without permission of the Contractor.

\(i\) Preference for United States Industry. Notwithstanding any other
provision of this clause, the Contractor agrees that neither it nor any
assignee will grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that
any product embodying the subject invention or produced through the use
of the subject invention will be manufactured substantially in the
United States. However, in individual cases, the requirement for such an
agreement may be waived by DOE upon a showing by the Contractor or its
assignee that reasonable but unsuccessful efforts have been made to
grant licenses on similar terms to potential licensees that would be
likely to manufacture substantially in the United States or that under
the circumstances domestic manufacture is not commercially feasible.

\(j\) March-in Rights. The Contractor agrees that, with respect to any
subject invention in which it has acquired title, DOE has the right in
accordance with the procedures in 37 CFR 401.6 and any DOE supplemental
regulations to require the Contractor, an assignee or exclusive licensee
of a subject invention to grant a nonexclusive, partially exclusive, or
exclusive license in any field of use to a responsible applicant or
applicants, upon terms that are reasonable under the circumstances, and,
if the Contractor, assignee or exclusive licensee refuses such a
request, DOE has the right to grant such a license itself if DOE
determines that-

\(1\) Such action is necessary because the Contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use;

\(2\) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Contractor, assignee, or their
licensees;

\(3\) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees; or

\(4\) Such action is necessary because the agreement required by
paragraph (i) of this clause has not been obtained or waived, or because
a licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.

\(k\) Special Provisions for Contracts With Nonprofit Organizations. If
the Contractor is a nonprofit organization, it agrees that-

\(1\) DOE approval of assignment of rights. Rights to a subject
invention in the United States may not be assigned by the Contractor
without the approval of DOE, except where such assignment is made to an
organization which has as one of its primary functions the management of
inventions; provided, that such assignee will be subject to the same
provisions of this clause as the Contractor.

\(2\) Small business firm licensees. It will make efforts that are
reasonable under the circumstances to attract licensees of subject
inventions that are small business firms, and that it will give a
preference to a small business firm when licensing a subject invention
if the Contractor determines that the small business firm has a plan or
proposal for marketing the invention which, if executed, is equally as
likely to bring the invention to practical application as any plans or
proposals from applicants that are not small business firms; provided,
that the Contractor is also satisfied that the small business firm has
the capability and resources to carry out its plan or proposal. The
decision whether to give a preference in any specific case will be at
the discretion of the Contractor. However, the Contractor agrees that
the Secretary of Commerce may review the Contractor\'s licensing program
and decisions regarding small business firm applicants, and the
Contractor will negotiate changes to its licensing policies, procedures,
or practices with the Secretary of Commerce when that Secretary\'s
review discloses that the Contractor could take reasonable steps to more
effectively implement the requirements of this subparagraph (k)(2).

\(3\) Contractor licensing of subject inventions. To the extent that it
provides the most effective technology transfer, licensing of subject
inventions shall be administered by Contractor employees on location at
the facility.

\(l\) Communications. The Contractor shall direct any notification,
disclosure or request provided for in this clause to the Patent Counsel
assisting the DOE contracting activity.

\(m\) Reports.

\(1\) Interim reports. Upon DOE\'s request, the Contractor shall submit
to DOE, no more frequently than annually, a list of subject inventions
disclosed to DOE during a specified period, or a statement that no
subject inventions were made during the specified period; and a list of
subcontracts containing a patent clause and awarded by the Contractor
during a specified period, or a statement that no such subcontracts were
awarded during the specified period.

\(2\) Final reports. Upon DOE\'s request, the Contractor shall submit to
DOE, prior to closeout of the contract, a list of all subject inventions
disclosed during the performance period of the contract, or a statement
that no subject inventions were made during the contract performance
period; and a list of all subcontracts containing a patent clause and
awarded by the Contractor during the contract performance period, or a
statement that no such subcontracts were awarded during the contract
performance period.

\(n\) Examination of Records Relating to Subject Inventions. (1)
Contractor compliance. Until the expiration of three (3) years after
final payment under this contract, the Contracting Officer or any
authorized representative may examine any books (including laboratory
notebooks), records, documents, and other supporting data of the
Contractor, which the Contracting Officer or authorized representative
deems reasonably pertinent to the discovery or identification of subject
inventions, including exceptional circumstance subject inventions, or to
determine Contractor compliance with any requirement of this clause.

\(2\) Unreported inventions. If the Contracting Officer is aware of an
invention that is not disclosed by the Contractor to DOE, and the
Contracting Officer believes the unreported invention may be a subject
invention, including exceptional circumstance subject inventions, DOE
may require the Contractor to submit to DOE a disclosure of the
invention for a determination of ownership rights.

\(3\) Confidentiality. Any examination of records under this paragraph
is subject to appropriate conditions to protect the confidentiality of
the information involved.

\(4\) Power of inspection. With respect to a subject invention for which
the Contractor has responsibility for patent prosecution, the Contractor
shall furnish the Government, upon request by DOE, an irrevocable power
to inspect and make copies of a prosecution file for any patent
application claiming the subject invention.

\(o\) Facilities License. In addition to the rights of the parties with
respect to inventions or discoveries conceived or first actually reduced
to practice in the course of or under this contract, the Contractor
agrees to and does hereby grant to the Government an irrevocable,
nonexclusive, paid-up license in and to any inventions or discoveries
regardless of when conceived or actually reduced to practice or acquired
by the Contractor at any time through completion of this contract and
which are incorporated or embodied in the construction of the facility
or which are utilized in the operation of the facility or which cover
articles, materials, or product manufactured at the facility (1) to
practice or have practiced by or for the Government at the facility, and
(2) to transfer such license with the transfer of that facility.
Notwithstanding the acceptance or exercise by the Government of these
rights, the Government may contest at any time the enforceability,
validity or scope of, or title to, any rights or patents herein
licensed.

\(p\) Atomic Energy.

\(1\) Pecuniary awards. No claim for pecuniary award of compensation
under the provisions of the Atomic Energy Act of 1954, as amended, may
be asserted with respect to any invention or discovery made or conceived
in the course of or under this contract.

\(2\) Patent agreements. Except as otherwise authorized in writing by
the Contracting Officer, the Contractor shall obtain patent agreements
to effectuate the provisions of subparagraph (p)(1) of this clause from
all persons who perform any part of the work under this contract, except
nontechnical personnel, such as clerical employees and manual laborers.

\(q\) Classified Inventions. (1) Approval for filing a foreign patent
application. The Contractor shall not file or cause to be filed an
application or registration for a patent disclosing a subject invention
related to classified subject matter in any country other than the
United States without first obtaining the written approval of the
Contracting Officer.

\(2\) Transmission of classified subject matter. If in accordance with
this clause the Contractor files a patent application in the United
States disclosing a subject invention that is classified for reasons of
security, the Contractor shall observe all applicable security
regulations covering the transmission of classified subject matter. If
the Contractor transmits a patent application disclosing a classified
subject invention to the United States Patent and Trademark Office
(USPTO), the Contractor shall submit a separate letter to the USPTO
identifying the contract or contracts by agency and agreement number
that require security classification markings to be placed on the patent
application.

\(3\) Inclusion of clause in subcontracts. The Contractor agrees to
include the substance of this clause in subcontracts at any tier that
cover or are likely to cover subject matter classified for reasons of
security.

\(r\) Patent Functions. Upon the written request of the Contracting
Officer or Patent Counsel, the Contractor agrees to make reasonable
efforts to support DOE in accomplishing patent-related functions for
work arising out of the contract, including, but not limited to, the
prosecution of patent applications, and the determination of questions
of novelty, patentability, and inventorship.

\(s\) Educational Awards Subject to *35 U.S.C. 212.* The Contractor
shall notify the Contracting Officer prior to the placement of any
person subject to *35 U.S.C. 212* in an area of technology or task (1)
related to exceptional circumstance technology or (2) which is subject
to treaties or international agreements as set forth in paragraph (b)(3)
of this clause or agreements other than funding agreements. The
Contracting Officer may disapprove of any such placement.

\(t\) Annual Appraisal by Patent Counsel. Patent Counsel may conduct an
annual appraisal to evaluate the Contractor\'s effectiveness in
identifying and protecting subject inventions in accordance with DOE
policy.

(End of clause)

Alternate 1 Weapons Related Subject Inventions. As prescribed at
970.2703-2(g), insert the following as subparagraphs (a)(10) and (b)(7),
respectively:

\(a\) Definitions. (10) Weapons Related Subject Invention means any
subject invention conceived or first actually reduced to practice in the
course of or under work funded by or through defense programs, including
Department of Defense and intelligence reimbursable work, or the Naval
Nuclear Propulsion Program of the Department of Energy or the National
Nuclear Security Administration.

\(b\) Allocation of Principal Rights. (7) Weapons related subject
inventions. Except to the extent that DOE is solely satisfied that the
Contractor meets certain procedural requirements and DOE grants rights
to the Contractor in weapons related subject inventions, the Contractor
does not have the right to retain title to any weapons related subject
inventions.

(End of Alternate)

Final Rule 67 FR 48568 July 25, 2002

**970.5227-11 Patent rights management and operating contracts,
for-profit contractor, non-technology transfer.**

Insert the following clause in solicitations and contracts in accordance
with 970.2703-1(b)(4):

PATENT RIGHTS-MANAGEMENT AND OPERATING CONTRACTS, FOR-PROFIT

CONTRACTOR, NON-TECHNOLOGY TRANSFER (DEC 2000)

\(a\) Definitions. (1) DOE licensing regulations means the Department of
Energy patent licensing regulations at 10 CFR Part 781.

\(2\) DOE patent waiver regulations means the Department of Energy
patent waiver regulations at 10 CFR Part 784.

\(3\) Invention means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act *(7 U.S.C. 2321,* et seq.).

\(4\) Made when used in relation to any invention means the conception
or first actual reduction to practice of such invention.

\(5\) Patent Counsel means DOE Patent Counsel assisting the contracting
activity.

\(6\) Practical application means to manufacture, in the case of a
composition or product; to practice, in the case of a process or method;
or to operate, in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(7\) Subject Invention means any invention of the contractor conceived
or first actually reduced to practice in the course of or under this
contract, provided that in the case of a variety of plant, the date of
determination (as defined in section 41(d) of the Plant Variety
Protection Act, *7 U.S.C. 2401*(d)) shall also occur during the period
of contract performance.

\(b\) Allocation of Principal Rights. (1) Assignment to the Government.
Except to the extent that rights are retained by the Contractor by a
determination of greater rights in accordance with subparagraph (b)(2)
of this clause or by a request for foreign patent rights in accordance
with subparagraph (d)(2) of this clause, the Contractor agrees to assign
to the Government the entire right, title, and interest throughout the
world in and to each subject invention.

\(2\) Greater rights determinations. The Contractor, or an Contractor
employee-inventor after consultation with the Contractor and with the
written authorization of the Contractor in accordance with DOE patent
waiver regulations, may request greater rights, including title, in an
identified subject invention than the nonexclusive license and the
foreign patent rights provided for in paragraph (d) of this clause, in
accordance with the DOE patent waiver regulations. Such a request shall
be submitted in writing to Patent Counsel with a copy to the Contracting
Officer at the time the subject invention is first disclosed to DOE in
accordance with subparagraph (c)(2) of this clause, or not later than
eight (8) months after such disclosure, unless a longer period is
authorized in writing by the Contracting Officer for good cause shown in
writing by the Contractor. DOE may grant or refuse to grant such a
request by the Contractor or Contractor employee-inventor. Unless
otherwise provided in the greater rights determination, any rights in a
subject invention obtained by the Contractor pursuant to a determination
of greater rights are subject to a nonexclusive, nontransferable,
irrevocable, paid-up license to the Government to practice or have
practiced the subject invention throughout the world by or on behalf of
the Government of the United States (including any Government agency),
and to any reservations and conditions deemed appropriate by the
Secretary of Energy or designee.

\(c\) Subject Invention Disclosures. (1) Contractor procedures for
reporting subject inventions to Contractor personnel. Subject inventions
shall be reported to Contractor personnel responsible for patent matters
within six (6) months of conception and/or first actual reduction to
practice, whichever occurs first in the performance of work under this
contract. Accordingly, the Contractor shall establish and maintain
effective procedures for ensuring such prompt identification and timely
disclosure of subject inventions to Contractor personnel responsible for
patent matters, and the procedures shall include the maintenance of
laboratory notebooks, or equivalent records, and other records that are
reasonably necessary to document the conception and/or the first actual
reduction to practice of subject inventions, and the maintenance of
records demonstrating compliance with such procedures. The Contractor
shall submit a written description of such procedures to the Contracting
Officer, upon request, for evaluation of the effectiveness of such
procedures by the Contracting Officer.

\(2\) Subject invention disclosure. The Contractor shall disclose each
subject invention to Patent Counsel with a copy to the Contracting
Officer within two (2) months after the subject invention is reported to
Contractor personnel responsible for patent matters, in accordance with
subparagraph (c)(1) of this clause, or, if earlier, within six (6)
months after the Contractor has knowledge of the subject invention, but
in any event before any on sale, public use, or publication of the
subject invention. The disclosure to DOE shall be in the form of a
written report and shall include:

\(i\) the contract number under which the subject invention was made;

\(ii\) the inventor(s) of the subject invention;

\(iii\) a description of the subject invention in sufficient technical
detail to convey a clear understanding of the nature, purpose and
operation of the subject invention, and of the physical, chemical,
biological or electrical characteristics of the subject invention, to
the extent known by the Contractor at the time of the disclosure;

\(iv\) the date and identification of any publication, on sale or public
use of the invention;

\(v\) the date and identification of any submissions for publication of
any manuscripts describing the invention, and a statement of whether the
manuscript is accepted for publication, to the extent known by the
Contractor at the time of the disclosure;

\(vi\) a statement indicating whether the subject invention concerns
exceptional circumstances pursuant to *35 U.S.C. 202*(ii), related to
national security, or subject to a treaty or an international agreement,
to the extent known or believed by Contractor at the time of the
disclosure;

\(vii\) all sources of funding by Budget and Resources (B&R) code; and

\(viii\) the identification of any agreement relating to the subject
invention, including Cooperative Research and Development Agreements and
Work-for-Others agreements. Unless the Contractor contends otherwise in
writing at the time the invention is disclosed, inventions disclosed to
DOE under this paragraph are deemed made in the manner specified in
Sections (a)(1) and (a)(2) of *42 U.S.C. 5908.*

\(3\) Publication after disclosure. After disclosure of the subject
invention to the DOE, the Contractor shall promptly notify Patent
Counsel of the acceptance for publication of any manuscript describing
the subject invention or of any expected or on sale or public use of the
subject invention, known by the Contractor.

\(4\) Contractor employee agreements. The Contractor agrees to require,
by written agreement, its employees, other than clerical and
nontechnical employees, to disclose promptly in writing to Contractor
personnel identified as responsible for the administration of patent
matters and in a format suggested by the Contractor, each subject
invention made under this contract, and to execute all papers necessary
to file patent applications claiming subject inventions or to establish
the Government\'s rights in the subject inventions. This disclosure
format shall at a minimum include the information required by
subparagraph (c)(2) of this clause. The Contractor shall instruct such
employees, through employee agreements or other suitable educational
programs, on the importance of reporting inventions in sufficient time
to permit the filing of patent applications prior to U.S. or foreign
statutory bars.

\(5\) Contractor procedures for reporting subject inventions to DOE. The
Contractor agrees to establish and maintain effective procedures for
ensuring the prompt identification and timely disclosure of subject
inventions to DOE. The Contractor shall submit a written description of
such procedures to the Contracting Officer, upon request, for evaluation
of the effectiveness of such procedures by the Contracting Officer.

\(6\) Duplication and disclosure of documents. The Government may
duplicate and disclose subject invention disclosures and all other
reports and papers furnished or required to be furnished pursuant to
this clause; provided, however, that any such duplication or disclosure
by the Government is subject to *35 U.S.C. 205* and 37 CFR 401.13.

\(d\) Minimum Rights of the Contractor. (1) Contractor License. (i)
Request for a Contractor license. Except for subject inventions that the
Contractor fails to disclose within the time periods specified at
subparagraph (c)(2) of this clause, the Contractor may request a
revocable, nonexclusive, royalty-free license in each patent application
filed in any country claiming a subject invention and any resulting
patent in which the Government obtains title, and DOE may grant or
refuse to grant such a request by the Contractor. If DOE grants the
Contractor\'s request for a license, the Contractor\'s license extends
to its domestic subsidiaries and affiliates, if any, within the
corporate structure of which the Contractor is a party and includes the
right to grant sublicenses of the same scope to the extent the
Contractor was legally obligated to do so at the time the contract was
awarded.

\(ii\) Transfer of a Contractor license. DOE shall approve any transfer
of the Contractor\'s license in a subject invention, and DOE may
determine the Contractor\'s license is non-transferrable, on a
case-by-case basis.

\(iii\) Revocation or modification of a Contractor license. DOE may
revoke or modify the Contractor\'s domestic license to the extent
necessary to achieve expeditious practical application of the subject
invention pursuant to an application for an exclusive license submitted
in accordance with applicable provisions in 37 CFR Part 404 and DOE
licensing regulations. DOE may not revoke the Contractor\'s domestic
license in that field of use or the geographical areas in which the
Contractor, its licensee, or its domestic subsidiaries or affiliates
achieved practical applications and continues to make the benefits of
the invention reasonably accessible to the public. DOE may revoke or
modify the Contractor\'s license in any foreign country to the extent
the Contractor, its licensees, or its domestic subsidiaries or
affiliates failed to achieve practical application in that foreign
country.

\(iv\) Notice of revocation or modification of a Contractor license.
Before revocation or modification of the license, DOE shall furnish the
Contractor a written notice of its intention to revoke or modify the
license, and the Contractor shall be allowed thirty (30) days from the
date of the notice (or such other time as may be authorized by DOE for
good cause shown by the Contractor) to show cause why the license should
not be revoked or modified. The Contractor has the right to appeal any
decision concerning the revocation or modification of its license, in
accordance with applicable regulations in 37 CFR Part 404 and DOE
licensing regulations.

\(2\) Contractor\'s right to request foreign patent rights. If the
Government has title to a subject invention and the Government decides
against securing patent rights in a foreign country for the subject
invention, the Contractor may request such foreign patent rights from
DOE, and DOE may grant the Contractor\'s request, subject to a
nonexclusive, nontransferable, irrevocable, paid-up license to the
Government to practice or have practiced the subject invention in the
foreign country, and any reservations and conditions deemed appropriate
by the Secretary of Energy or designee. Such a request shall be
submitted in writing to the Patent Counsel as part of the disclosure
required by subparagraph (c)(2) of this clause, with a copy to the DOE
Contracting Officer, unless a longer period is authorized in writing by
the Contracting Officer for good cause shown in writing by the
Contractor. DOE may grant or refuse to grant such a request, and may
consider whether granting the Contractor\'s request best serves the
interests of the United States.

\(e\) Examination of Records Relating to Inventions. (1) Contractor
compliance. Until the expiration of three (3) years after final payment
under this contract, the Contracting Officer or any authorized
representative may examine any books (including laboratory notebooks),
records, and documents and other supporting data of the Contractor,
which the Contracting Officer or authorized representative deems
reasonably pertinent to the discovery or identification of subject
inventions, or to determine Contractor (and inventor) compliance with
the requirements of this clause, including proper identification and
disclosure of subject inventions, and establishment and maintenance of
invention disclosure procedures.

\(2\) Unreported inventions. If the Contracting Officer is aware of an
invention that is not disclosed by the Contractor to DOE, and the
Contracting Officer believes the unreported invention may be a subject
invention, DOE may require the Contractor to submit to DOE a disclosure
of the invention for a determination of ownership rights.

\(3\) Confidentiality. Any examination of records under this paragraph
is subject to appropriate conditions to protect the confidentiality of
the information involved.

\(f\) Subcontracts. (1) Subcontractor subject inventions. The Contractor
shall not obtain rights in the subcontractor\'s subject inventions as
part of the consideration for awarding a subcontract.

\(2\) Inclusion of patent rights clause-non-profit organization or small
business firm subcontractors. Unless otherwise authorized or directed by
the Contracting Officer, the Contractor shall include the patent rights
clause at 48 CFR 952.227-11, suitably modified to identify the parties
in all subcontracts, at any tier, for experimental, developmental,
demonstration or research work to be performed by a small business firm
or domestic nonprofit organization, except subcontracts which are
subject to exceptional circumstances in accordance with *35 U.S.C.
202*(a)(ii).

\(3\) Inclusion of patent rights clause-subcontractors other than
non-profit organizations and small business firms. Except for the
subcontracts described in subparagraph (f)(2) of this clause, the
Contractor shall include the patent rights clause at 48 CFR 952.227-13,
suitably modified to identify the parties, in any contract for
experimental, developmental, demonstration or research work.

\(4\) DOE and subcontractor contract. With respect to subcontracts at
any tier, DOE, the subcontractor, and the Contractor agree that the
mutual obligations of the parties created by this clause constitute a
contract between the subcontractor and DOE with respect to those matters
covered by this clause.

\(5\) Subcontractor refusal to accept terms of patent rights clause. If
a prospective subcontractor refuses to accept the terms of a patent
rights clause, the Contractor shall promptly submit a written notice to
the Contracting Officer stating the subcontractor\'s reasons for such a
refusal, including any relevant information for expediting disposition
of the matter, and the Contractor shall not proceed with the subcontract
without the written authorization of the Contracting Officer.

\(6\) Notification of award of subcontract. Upon the award of any
subcontract at any tier containing a patent rights clause, the
Contractor shall promptly notify the Contracting Officer in writing and
identify the subcontractor, the applicable patent rights clause, the
work to be performed under the subcontract, and the dates of award and
estimated completion. Upon request of the Contracting Officer, the
Contractor shall furnish a copy of a subcontract.

\(7\) Identification of subcontractor subject inventions. If the
Contractor in the performance of this contract becomes aware of a
subject invention made under a subcontract, the Contractor shall
promptly notify Patent Counsel and identify the subject invention, with
a copy of the notification and identification to the Contracting
Officer.

\(g\) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary award
of compensation under the provisions of the Atomic Energy Act of 1954,
as amended, may be asserted with respect to any invention or discovery
made or conceived in the course of or under this contract.

\(2\) Patent Agreements. Except as otherwise authorized in writing by
the Contracting Officer, the Contractor shall obtain patent agreements
to effectuate the provisions of subparagraph (g)(1) of this clause from
all persons who perform any part of the work under this contract, except
nontechnical personnel, such as clerical employees and manual laborers.

\(h\) Publication. The Contractor shall receive approval from Patent
Counsel prior to releasing or publishing information regarding
scientific or technical developments conceived or first actually reduced
to practice in the course of or under this contract, to ensure such
release or publication does not adversely affect the patent interests of
DOE or the Contractor.

\(i\) Communications. The Contractor shall direct any notification,
disclosure, or request provided for in this clause to the Patent Counsel
assisting the DOE contracting activity, with a copy of the communication
to the Contracting Officer.

\(j\) Reports. (1) Interim reports. Upon DOE\'s request, the Contractor
shall submit to DOE, no more frequently than annually, a list of subject
inventions disclosed to DOE during a specified period, or a statement
that no subject inventions were made during the specified period; and/or
a list of subcontracts containing a patent clause and awarded by the
Contractor during a specified period, or a statement that no such
subcontracts were awarded during the specified period. The interim
report shall state whether the Contractor\'s invention disclosures were
submitted to DOE in accordance with the requirements of subparagraphs
(c)(1) and (c)(5) of this clause.

\(2\) Final reports. Upon DOE\'s request, the Contractor shall submit to
DOE, prior to closeout of the contract or within three (3) months of the
date of completion of the contracted work, a list of all subject
inventions disclosed during the performance period of the contract, or a
statement that no subject inventions were made during the contract
performance period; and/or a list of all subcontracts containing a
patent clause and awarded by the Contractor during the contract
performance period, or a statement that no such subcontracts were
awarded during the contract performance period.

\(k\) Facilities License. In addition to the rights of the parties with
respect to inventions or discoveries conceived or first actually reduced
to practice in the course of or under this contract, the Contractor
agrees to and does hereby grant to the Government an irrevocable,
nonexclusive, paid-up license in and to any inventions or discoveries
regardless of when conceived or actually reduced to practice or acquired
by the contractor at any time through completion of this contract and
which are incorporated or embodied in the construction of the facility
or which are utilized in the operation of the facility or which cover
articles, materials, or products manufactured at the facility (1) to
practice or have practiced by or for the Government at the facility, and
(2) to transfer such license with the transfer of that facility.
Notwithstanding the acceptance or exercise by the Government of these
rights, the Government may contest at any time the enforceability,
validity or scope of, or title to, any rights or patents herein
licensed.

\(l\) Classified Inventions. (1) Approval for filing a foreign patent
application. The Contractor shall not file or cause to be filed an
application or registration for a patent disclosing a subject invention
related to classified subject matter in any country other than the
United States without first obtaining the written approval of the
Contracting Officer.

\(2\) Transmission of classified subject matter. If in accordance with
this clause the Contractor files a patent application in the United
States disclosing a subject invention that is classified for reasons of
security, the Contractor shall observe all applicable security
regulations covering the transmission of classified subject matter. If
the Contractor transmits a patent application disclosing a classified
subject invention to the United States Patent and Trademark Office
(USPTO), the Contractor shall submit a separate letter to the USPTO
identifying the contract or contracts by agency and agreement number
that require security classification markings to be placed on the patent
application.

\(3\) Inclusion of clause in subcontracts. The Contractor agrees to
include the substance of this clause in subcontracts at any tier that
cover or are likely to cover subject matter classified for reasons of
security.

\(m\) Patent Functions. Upon the written request of the Contracting
Officer or Patent Counsel, the Contractor agrees to make reasonable
efforts to support DOE in accomplishing patent-related functions for
work arising out of the contract, including, but not limited to, the
prosecution of patent applications, and the determination of questions
of novelty, patentability, and inventorship.

\(n\) Annual Appraisal by Patent Counsel. Patent Counsel may conduct an
annual appraisal to evaluate the Contractor\'s effectiveness in
identifying and protecting subject inventions in accordance with DOE
policy.

(End of Clause)

**970.5227-12 Patent rights management and operating contracts,
for-profit contractor, advance class waiver.**

Insert the following clause in solicitations and contracts in accordance
with 970.2703-1(b)(3):

PATENT RIGHTS-MANAGEMENT AND OPERATING CONTRACTS, FOR-PROFIT

CONTRACTOR, ADVANCE CLASS WAIVER (AUG 2002)

\(a\) Definitions. (1) DOE licensing regulations means the Department of
Energy patent licensing regulations at 10 CFR Part 781.

\(2\) DOE patent waiver regulations means the Department of Energy
patent waiver regulations at 10 CFR Part 784.

\(3\) Exceptional Circumstance Subject Invention means any subject
invention in a technical field or related to a task determined by the
Department of Energy to be subject to an exceptional circumstance under
*35 U.S.C. 202*(a)(ii), and in accordance with 37 CFR 401.3(e).

\(4\) Invention means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act *(7 U.S.C. 2321,* et seq.).

\(5\) Made when used in relation to any invention means the conception
or first actual reduction to practice of such invention.

\(6\) Patent Counsel means DOE Patent Counsel assisting the contracting
activity.

\(7\) Practical application means to manufacture, in the case of a
composition or product; to practice, in the case of a process or method;
or to operate, in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(8\) Subject Invention means any invention of the contractor conceived
or first actually reduced to practice in the course of or under this
contract, provided that in the case of a variety of plant, the date of
determination (as defined in section 41(d) of the Plant Variety
Protection Act, *7 U.S.C. 2401*(d)) shall also occur during the period
of contract performance.

\(b\) Allocation of Principal Rights. (1) Assignment to the Government.
Except to the extent that rights are retained by the Contractor by the
granting of an advance class waiver pursuant to subparagraph (b)(2) of
this clause or a determination of greater rights pursuant to
subparagraph (b)(7) of this clause, the Contractor agrees to assign to
the Government the entire right, title, and interest throughout the
world in and to each subject invention.

\(2\) Advance class waiver of Government rights to the Contractor. DOE
may grant to the Contractor an advance class waiver of Government rights
in any or all subject inventions, at the time of execution of the
contract, such that the Contractor may elect to retain the entire right,
title and interest throughout the world to such waived subject
inventions, in accordance with the terms and conditions of the advance
class waiver. Unless otherwise provided by the terms of the advance
class waiver, any rights in a subject invention retained by the
Contractor under an advance class waiver are subject to *35 U.S.C. 203*
and the provisions of this clause, including the Government license
provided for in subparagraph (b)(3) of this clause, and any reservations
and conditions deemed appropriate by the Secretary of Energy or
designee.

\(3\) Government license. With respect to any subject invention to which
the Contractor retains title, either under an advance class waiver
pursuant to subparagraph (b)(2) or a determination of greater rights
pursuant to subparagraph (b)(7) of this clause, the Government has a
nonexclusive, nontransferable, irrevocable, paid-up license to practice
or have practiced for or on behalf of the United States the subject
invention throughout the world.

\(4\) Foreign patent rights. If the Government has title to a subject
invention and the Government decides against securing patent rights in a
foreign country for the subject invention, the Contractor may request
such foreign patent rights from DOE, and DOE may grant the Contractor\'s
request, subject to *35 U.S.C. 203* and the provisions of this clause,
including the Government license provided for in subparagraph (b)(3) of
this clause, and any reservations and conditions deemed appropriate by
the Secretary of Energy or designee.

\(5\) Exceptional circumstance subject inventions. Except to the extent
that rights are retained by the Contractor by a determination of greater
rights in accordance with subparagraph (b)(7) of this clause, the
Contractor does not have the right to retain title to any exceptional
circumstance subject inventions and agrees to assign to the Government
the entire right, title, and interest, throughout the world, in and to
any exceptional circumstance subject inventions.

\(i\) Inventions within or relating to the following fields of
technology are exceptional circumstance subject inventions:

\(A\) uranium enrichment technology;

\(B\) storage and disposal of civilian high-level nuclear waste and
spent fuel technology; and

\(C\) national security technologies classified or sensitive under
Section 148 of the Atomic Energy Act *(42 U.S.C. 2168).*

\(ii\) Inventions made under any agreement, contract or subcontract
related to the following initiatives or programs are exceptional
circumstance subject inventions:

\(A\) DOE Steel Initiative and Metals Initiative;

\(B\) U.S. Advanced Battery Consortium; and

\(C\) any funding agreement which is funded in part by the Electric
Power Research Institute (EPRI) or the Gas Research Institute (GRI).

\(iii\) DOE reserves the right to unilaterally amend this contract to
modify, by deletion or insertion, technical fields, programs,
initiatives, and/or other classifications for the purpose of defining
DOE exceptional circumstance subject inventions.

\(6\) Treaties and international agreements. Any rights acquired by the
Contractor in subject inventions are subject to any disposition of
right, title, or interest in or to subject inventions provided for in
treaties or international agreements identified at Appendix \[ Insert
Reference \], to this contract. DOE reserves the right to unilaterally
amend this contract to identify specific treaties or international
agreements entered into or to be entered into by the Government after
the effective date of this contract and to effectuate those license or
other rights which are necessary for the Government to meet its
obligations to foreign governments, their nationals and international
organizations under such treaties or international agreements with
respect to subject inventions made after the date of the amendment.

\(7\) Contractor request for greater rights. The Contractor may request
greater rights in an identified subject invention, including an
exceptional circumstance subject invention, to which the Contractor does
not have the right to elect to retain title, in accordance with the DOE
patent waiver regulations, by submitting such a request in writing to
Patent Counsel with a copy to the Contracting Officer at the time the
subject invention is first disclosed to DOE pursuant to subparagraph
(c)(1) of this clause, or not later than eight (8) months after such
disclosure, unless a longer period is authorized in writing by the
Contracting Officer for good cause shown in writing by the Contractor.
DOE may grant or refuse to grant such a request by the Contractor.
Unless otherwise provided in the greater rights determination, any
rights in a subject invention obtained by the Contractor under a
determination of greater rights is subject to *35 U.S.C. 203* and the
provisions of this clause, including the Government license provided for
in subparagraph (b)(3) of this clause, and to any reservations and
conditions deemed appropriate by the Secretary of Energy or designee.

\(8\) Contractor employee-inventor rights. If the Contractor does not
elect to retain title to a subject invention or does not request greater
rights in a subject invention, including an exceptional circumstance
subject invention, to which the Contractor does not have the right to
elect to retain title, a Contractor employee-inventor, after
consultation with the Contractor and with written authorization from the
Contractor in accordance with 10 CFR 784.9(b)(4), may request greater
rights, including title, in the subject invention or the exceptional
circumstance invention from DOE, and DOE may grant or refuse to grant
such a request by the Contractor employee-inventor.

\(9\) Government assignment of rights in Government employees\' subject
inventions. If a DOE employee is a joint inventor of a subject invention
to which the Contractor has rights, DOE may assign or refuse to assign
any rights in the subject invention acquired by the Government from the
DOE employee to the Contractor, consistent with 48 CFR 27.304-1(d).
Unless otherwise provided in the assignment, the rights assigned to the
Contractor are subject to the Government license provided for in
subparagraph (b)(3) of this clause, and to any provision of this clause
applicable to subject inventions in which rights are retained by the
Contractor, and to any reservations and conditions deemed appropriate by
the Secretary of Energy or designee. The Contractor shall share
royalties collected for the manufacture, use or sale of the subject
invention with the DOE employee.

\(c\) Subject Invention Disclosure, Election of Title, and Filing of
Patent Application by Contractor. (1) Subject invention disclosure. The
Contractor shall disclose each subject invention to Patent Counsel with
a copy to the Contracting Officer within two (2) months after an
inventor discloses it in writing to Contractor personnel responsible for
patent matters or, if earlier, within six (6) months after the
Contractor has knowledge of the subject invention, but in any event
before any on sale, public use, or publication of the subject invention.
The disclosure to DOE shall be in the form of a written report and shall
include:

\(i\) the contract number under which the subject invention was made;

\(ii\) the inventor(s) of the subject invention;

\(iii\) a description of the subject invention in sufficient technical
detail to convey a clear understanding of the nature, purpose and
operation of the subject invention, and of the physical, chemical,
biological or electrical characteristics of the subject invention, to
the extent known by the Contractor at the time of the disclosure;

\(iv\) the date and identification of any publication, on sale or public
use of the invention;

\(v\) the date and identification of any submissions for publication of
any manuscripts describing the invention, and a statement of whether the
manuscript is accepted for publication, to the extent known by the
Contractor at the time of the disclosure;

\(vi\) a statement indicating whether the subject invention is an
exceptional circumstance subject invention, related to national
security, or subject to a treaty or an international agreement, to the
extent known or believed by Contractor at the time of the disclosure;

\(vii\) all sources of funding by Budget and Resources (B&R) code; and

\(viii\) the identification of any agreement relating to the subject
invention, including Cooperative Research and Development Agreements and
Work-for-Others agreements.

Unless the Contractor contends otherwise in writing at the time the
invention is disclosed, inventions disclosed to DOE under this paragraph
are deemed made in the manner specified in Sections (a)(1) and (a)(2) of
*42 U.S.C. 5908.*

\(2\) Publication after disclosure. After disclosure of the subject
invention to the DOE, the Contractor shall promptly notify Patent
Counsel of the acceptance for publication of any manuscript describing
the subject invention or of any expected or on sale or public use of the
subject invention, known by the Contractor. The Contractor shall obtain
approval from Patent Counsel prior to any release or publication of
information concerning an exceptional circumstance subject invention or
any subject invention related to a treaty or international agreement.

\(3\) Election by the Contractor under an advance class waiver. If the
Contractor has the right to elect to retain title to subject inventions
under an advance class waiver granted in accordance with subparagraph
(b)(2) of this clause, and unless otherwise provided for by the terms of
the advance class waiver, the Contractor shall elect in writing whether
or not to retain title to any subject invention by notifying DOE within
two (2) years of the date of the disclosure of the subject invention to
DOE, in accordance with subparagraph (c)(1) of this clause. The
notification shall identify the advance class waiver, state the
countries, including the United States, in which rights are retained,
and certify that the subject invention is not an exceptional
circumstance subject invention or subject to a treaty or international
agreement. If a publication, on sale or public use of the subject
invention has initiated the 1-year statutory period under *35 U.S.C.
102*(b), the period for election may be shortened by DOE to a date that
is no more than sixty (60) days prior to the end of the 1-year statutory
period.

\(4\) Filing of patent applications by the Contractor under an advance
class waiver. If the Contractor has the right to retain title to a
subject invention in accordance with an advance class waiver pursuant to
subparagraph (b)(2) of this clause or a determination of greater rights
pursuant to paragraph (b)(7) of this clause, and unless otherwise
provided for by the terms of the advance class waiver or greater rights
determination, the Contractor shall file an initial patent application
claiming the subject invention to which it retains title either within
one (1) year after the Contractor\'s election to retain or grant of
title to the subject invention or prior to the end of any 1-year
statutory period under *35 U.S.C. 102*(b), whichever occurs first. Any
patent applications filed by the Contractor in foreign countries or
international patent offices shall be filed within either ten (10)
months of the corresponding initial patent application or, if such
filing has been prohibited by a Secrecy Order, within six (6) months
from the date permission is granted by the Commissioner of Patents and
Trademarks to file foreign patent applications.

\(5\) Submission of patent information and documents. If the Contractor
files a domestic or foreign patent application claiming a subject
invention, the Contractor shall promptly submit to Patent Counsel the
following information and documents:

\(i\) The filing date, serial number, title, and a copy of the patent
application (including an English-language version if filed in a
language other than English);

\(ii\) An executed and approved instrument fully confirmatory of all
Government rights in the subject invention; and

\(iii\) The patent number, issue date, and a copy of any issued patent
claiming the subject invention.

\(6\) Contractor\'s request for an extension of time. Requests for an
extension of the time to disclose a subject invention, to elect to
retain title to a subject invention, or to file a patent application
under subparagraphs (c)(1), (3), and (4) of this clause may be granted
at the discretion of Patent Counsel or DOE.

\(7\) Duplication and disclosure of documents. The Government may
duplicate and disclose subject invention disclosures and all other
reports and papers furnished or required to be furnished pursuant to
this clause; provided, however, that any such duplication or disclosure
by the Government is subject to *35 U.S.C. 205* and 37 CFR Part 40.

\(d\) Conditions When the Government May Obtain Title Notwithstanding an
Advance Class Waiver. (1) Return of title to a subject invention. If the
Contractor requests that DOE acquire title or rights from the Contractor
in a subject invention, including an exceptional circumstance subject
invention, to which the Contractor retained title or rights under
subparagraph (b)(2) or subparagraph (b)(7) of this clause, DOE may
acquire such title or rights from the Contractor, or DOE may decide
against acquiring such title or rights from the Contractor, at DOE\'s
sole discretion.

\(2\) Failure to disclose or elect to retain title. Title vests in DOE
and DOE may request, in writing, a formal assignment of title to a
subject invention from the Contractor, and the Contractor shall convey
title to the subject invention to DOE, if the Contractor elects not to
retain title to the subject invention under an advance class waiver, or
the Contractor fails to disclose or fails to elect to retain title to
the subject invention within the times specified in subparagraphs (c)(1)
and (c)(3) of this clause.

\(3\) Failure to file domestic or foreign patent applications. In those
countries in which the Contractor fails to file a patent application
within the times specified in subparagraph (c)(4) of this clause, DOE
may request, in writing, title to the subject invention from the
Contractor, and the Contractor shall convey title to the subject
invention to DOE; provided, however, that if the Contractor has filed a
patent application in any country after the times specified in
subparagraph (c)(4) of this clause, but prior to its receipt of DOE\'s
written request for title, the Contractor continues to retain title in
that country.

\(4\) Discontinuation of patent protection by the Contractor. If the
Contractor decides to discontinue the prosecution of a patent
application, the payment of maintenance fees, or the defense of a
subject invention in a reexamination or opposition proceeding, in any
country, DOE may request, in writing, title to the subject invention
from the Contractor, and the Contractor shall convey title to the
subject invention to DOE.

\(5\) Termination of advance class waiver. DOE may request, in writing,
title to any subject inventions from the Contractor, and the Contractor
shall convey title to the subject inventions to DOE, if the advance
class waiver granted under subparagraph (b)(2) of this clause is
terminated under paragraph (u) of this clause.

\(e\) Minimum Rights of the Contractor. (1) Request for a Contractor
license. Except for subject inventions that the Contractor fails to
disclose within the time periods specified at subparagraph (c)(1) of
this clause, the Contractor may request a revocable, nonexclusive,
royalty-free license in each patent application filed in any country
claiming a subject invention and any resulting patent in which the
Government obtains title, and DOE may grant or refuse to grant such a
request by the Contractor. If DOE grants the Contractor\'s request for a
license, the Contractor\'s license extends to its domestic subsidiaries
and affiliates, if any, within the corporate structure of which the
Contractor is a party and includes the right to grant sublicenses of the
same scope to the extent the Contractor was legally obligated to do so
at the time the contract was awarded.

\(2\) Transfer of a Contractor license. DOE shall approve any transfer
of the Contractor\'s license in a subject invention, and DOE may
determine that the Contractor\'s license is non-transferrable, on a
case-by-case basis.

\(3\) Revocation or modification of a Contractor license. DOE may revoke
or modify the Contractor\'s domestic license to the extent necessary to
achieve expeditious practical application of the subject invention
pursuant to an application for an exclusive license submitted in
accordance with applicable provisions in 37 CFR Part 404 and DOE
licensing regulations. DOE may not revoke the Contractor\'s domestic
license in that field of use or the geographical areas in which the
Contractor, its licensees or its domestic subsidiaries or affiliates
have achieved practical applications and continues to make the benefits
of the invention reasonably accessible to the public. DOE may revoke or
modify the Contractor\'s license in any foreign country to the extent
the Contractor, its licensees, or its domestic subsidiaries or
affiliates failed to achieve practical application in that foreign
country.

\(4\) Notice of revocation or modification of a Contractor license.
Before revocation or modification of the license, DOE shall furnish the
Contractor a written notice of its intention to revoke or modify the
license, and the Contractor shall be allowed thirty (30) days from the
date of the notice (or such other time as may be authorized by DOE for
good cause shown by the Contractor) to show cause why the license should
not be revoked or modified. The Contractor has the right to appeal any
decision concerning the revocation or modification of its license, in
accordance with applicable regulations in 37 CFR Part 404 and DOE
licensing regulations.

\(f\) Contractor Action to Protect the Government\'s Interest. (1)
Execution and delivery of title or license instruments. The Contractor
agrees to execute or have executed, and to deliver promptly to DOE all
instruments necessary to accomplish the following actions:

\(i\) establish or confirm the Government\'s rights throughout the world
in subject inventions to which the Contractor elects to retain title;

\(ii\) convey title in a subject invention to DOE pursuant to
subparagraph (b)(5) and paragraph (d) of this clause; or

\(iii\) enable the Government to obtain patent protection throughout the
world in a subject invention to which the Government has title.

\(2\) Contractor employee agreements. The Contractor agrees to require,
by written agreement, its employees, other than clerical and
nontechnical employees, to disclose promptly in writing to Contractor
personnel identified as responsible for the administration of patent
matters and in a format suggested by the Contractor, each subject
invention made under this contract, and to execute all papers necessary
to file patent applications claiming subject inventions or to establish
the Government\'s rights in the subject inventions. This disclosure
format shall at a minimum include the information required by
subparagraph (c)(1) of this clause. The Contractor shall instruct such
employees, through employee agreements or other suitable educational
programs, on the importance of reporting inventions in sufficient time
to permit the filing of patent applications prior to U.S. or foreign
statutory bars.

\(3\) Contractor procedures for reporting subject inventions to DOE. The
Contractor agrees to establish and maintain effective procedures for
ensuring the prompt identification and timely disclosure of subject
inventions to DOE. The Contractor shall submit a written description of
such procedures to the Contracting Officer, upon request, for evaluation
and approval of the effectiveness of such procedures by the Contracting
Officer.

\(4\) Notification of discontinuation of patent protection. With respect
to any subject invention for which the Contractor has responsibility for
patent prosecution, the Contractor shall notify Patent Counsel of any
decision to discontinue the prosecution of a patent application, payment
of maintenance fees, or defense of a subject invention in a
reexamination or opposition proceeding, in any country, not less than
thirty (30) days before the expiration of the response period for any
action required by the corresponding patent office.

\(5\) Notification of Government rights. With respect to any subject
invention to which the Contractor has title, the Contractor agrees to
include, within the specification of any United States patent
application and within any patent issuing thereon claiming a subject
invention, the following statement, \"This invention was made with
Government support under (identify the contract) awarded by the United
States Department of Energy. The Government has certain rights in the
invention.\"

\(6\) Avoidance of Royalty Charges. If the Contractor licenses a subject
invention, the Contractor agrees to avoid royalty charges on
acquisitions involving Government funds, including funds derived through
a Military Assistance Program of the Government or otherwise derived
through the Government, to refund any amounts received as royalty
charges on a subject invention in acquisitions for, or on behalf of, the
Government, and to provide for such refund in any instrument
transferring rights in the subject invention to any party.

\(7\) DOE approval of assignment of rights. Rights in a subject
invention in the United States may not be assigned by the Contractor
without the approval of DOE.

\(8\) Small business firm licensees. The Contractor shall make efforts
that are reasonable under the circumstances to attract licensees of
subject inventions that are small business firms, and may give a
preference to a small business firm when licensing a subject invention
if the Contractor determines that the small business firm has a plan or
proposal for marketing the invention which, if executed, is equally as
likely to bring the invention to practical application as any plans or
proposals from applicants that are not small business firms; provided,
the Contractor is also satisfied that the small business firm has the
capability and resources to carry out its plan or proposal. The decision
as to whether to give a preference in any specific case is at the
discretion of the Contractor.

\(9\) Contractor licensing of subject inventions. To the extent that it
provides the most effective technology transfer, licensing of subject
inventions shall be administered by Contractor employees on location at
the facility.

\(g\) Subcontracts. (1) Subcontractor subject inventions. The Contractor
shall not obtain rights in the subcontractor\'s subject inventions as
part of the consideration for awarding a subcontract.

\(2\) Inclusion of patent rights clause-non-profit organization or small
business firm subcontractors. Unless otherwise authorized or directed by
the Contracting Officer, the Contractor shall include the patent rights
clause at 48 CFR 952.227-11, suitably modified to identify the parties,
in all subcontracts, at any tier, for experimental, developmental,
demonstration or research work to be performed by a small business firm
or domestic nonprofit organization, except subcontracts which are
subject to exceptional circumstances in accordance with *35 U.S.C. 202*
and subparagraph (b)(5) of this clause.

\(3\) Inclusion of patent rights clause-subcontractors other than
non-profit organizations or small business firms. Except for the
subcontracts described in subparagraph (g)(2) of this clause, the
Contractor shall include the patent rights clause at 48 CFR 952.227-13,
suitably modified to identify the parties and any applicable exceptional
circumstance, in any contract for experimental, developmental,
demonstration or research work.

\(4\) DOE and subcontractor contract. With respect to subcontracts at
any tier, DOE, the subcontractor and Contractor agree that the mutual
obligations of the parties created by this clause constitute a contract
between the subcontractor and DOE with respect to those matters covered
by this clause; provided, however, that nothing in this paragraph is
intended to confer any jurisdiction under the Contract Disputes Act in
connection with proceedings under paragraph (j) of this clause.

\(5\) Subcontractor refusal to accept terms of patent rights clause. If
a prospective subcontractor refuses to accept the terms of a patent
rights clause, the Contractor shall promptly submit a written notice to
the Contracting Officer stating the subcontractor\'s reasons for such
refusal and including relevant information for expediting disposition of
the matter; and the Contractor shall not proceed with the subcontract
without the written authorization of the Contracting Officer.

\(6\) Notification of award of subcontract. Upon the award of any
subcontract at any tier containing a patent rights clause, the
Contractor shall promptly notify the Contracting Officer in writing and
identify the subcontractor, the applicable patent rights clause, the
work to be performed under the subcontract, and the dates of award and
estimated completion. Upon request of the Contracting Officer, the
Contractor shall furnish a copy of a subcontract.

\(7\) Identification of subcontractor subject inventions. If the
Contractor in the performance of this contract becomes aware of a
subject invention made under a subcontract, the Contractor shall
promptly notify Patent Counsel and identify the subject invention, with
a copy of the notification and identification to the Contracting
Officer.

\(h\) Reporting on Utilization of Subject Inventions. Upon request by
DOE, the Contractor agrees to submit periodic reports, no more
frequently than annually, describing the utilization of a subject
invention or efforts made by the Contractor or its licensees or
assignees to obtain utilization of the subject invention. The reports
shall include information regarding the status of development, date of
first commercial sale or use, gross royalties received by the
Contractor, and other data and information reasonably specified by DOE.
Upon request by DOE, the Contractor also agrees to provide reports in
connection with any march-in proceedings undertaken by DOE, in
accordance with paragraph (j) of this clause. If any data or information
reported by the Contractor in accordance with this provision is
considered privileged and confidential by the Contractor, its licensee,
or assignee and the Contractor properly marks the data or information
privileged or confidential, DOE agrees not to disclose such information
to persons outside the Government, to the extent permitted by law.

\(i\) Preference for United States Industry. Notwithstanding any other
provision of this clause the Contractor agrees that with respect to any
subject invention in which it retains title, neither it nor any assignee
may grant to any person the exclusive right to use or sell any subject
invention in the United States unless such person agrees that any
products embodying the subject invention or produced through the use of
the subject invention will be manufactured substantially in the United
States. However, in individual cases, DOE may waive the requirement for
such an agreement upon a showing by the Contractor or its assignee that
reasonable but unsuccessful efforts have been made to grant licenses on
similar terms to potential licensees that would be likely to manufacture
substantially in the United States or that under the circumstances
domestic manufacture is not commercially feasible.

\(j\) March-In Rights. With respect to any subject invention to which
the Contractor has elected to retain or is granted title, DOE may, in
accordance with the procedures in the DOE patent waiver regulations,
require the Contractor, an assignee or exclusive licensee of a subject
invention to grant a nonexclusive, partially exclusive or exclusive
license in any field of use to a responsible applicant or applicants,
upon terms that are reasonable under the circumstances. If the
Contractor, assignee or exclusive licensee refuses such a request, DOE
has the right to grant such a license itself if DOE determines that-

\(1\) Such action is necessary because the Contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use;

\(2\) Such action is necessary to alleviate health or safety needs that
are not reasonably satisfied by the Contractor, assignee, or their
licensees;

\(3\) Such action is necessary to meet requirements for public use
specified by government regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees; or

\(4\) Such action is necessary because the agreement to substantially
manufacture in the United States and required by paragraph (i) of this
clause has neither been obtained nor waived or because a licensee of the
exclusive right to use or sell any subject invention in the United
States is in breach of such agreement.

\(k\) Communications. The Contractor shall direct any notification,
disclosure, or request provided for in this clause tothe Patent Counsel
identified in the contract.

\(l\) Reports. (1) Interim reports. Upon DOE\'s request, the Contractor
shall submit to DOE, no more frequently than annually, a list of subject
inventions disclosed to DOE during a specified period, or a statement
that no subject inventions were made during the specified period; and/or
a list of subcontracts containing a patent clause and awarded by the
Contractor during a specified period, or a statement that no such
subcontracts were awarded during the specified period. The interim
report shall state whether the Contractor\'s invention disclosures were
submitted to DOE in accordance with the requirements of subparagraphs
(f)(3) and (f)(4) of this clause.

\(2\) Final reports. Upon DOE\'s request, the Contractor shall submit to
DOE, prior to closeout of the contract or within three (3) months of the
date of completion of the contracted work, a list of all subject
inventions disclosed during the performance period of the contract, or a
statement that no subject inventions were made during the contract
performance period; and/or a list of all subcontracts containing a
patent clause and awarded by the Contractor during the contract
performance period, or a statement that no such subcontracts were
awarded during the contract performance period.

\(m\) Facilities License. In addition to the rights of the parties with
respect to inventions or discoveries conceived or first actually reduced
to practice in the course of or under this contract, the Contractor
agrees to and does hereby grant to the Government an irrevocable,
nonexclusive, paid-up license in and to any inventions or discoveries
regardless of when conceived or actually reduced to practice or acquired
by the contractor at any time through completion of this contract and
which are incorporated or embodied in the construction of the facility
or which are utilized in the operation of the facility or which cover
articles, materials, or products manufactured at the facility (1) to
practice or have practiced by or for the Government at the facility, and
(2) to transfer such license with the transfer of that facility.
Notwithstanding the acceptance or exercise by the Government of these
rights, the Government may contest at any time the enforceability,
validity or scope of, or title to, any rights or patents herein
licensed.

\(n\) Atomic Energy. (1) Pecuniary awards. No claim for pecuniary award
of compensation under the provisions of the Atomic Energy Act of 1954,
as amended, may be asserted with respect to any invention or discovery
made or conceived in the course of or under this contract.

\(2\) Patent Agreements. Except as otherwise authorized in writing by
the Contracting Officer, the Contractor shall obtain patent agreements
to effectuate the provisions of subparagraph (o)(1) of this clause from
all persons who perform any part of the work under this contract, except
nontechnical personnel, such as clerical employees and manual laborers.

\(o\) Classified Inventions. (1) Approval for filing a foreign patent
application. The Contractor shall not file or cause to be filed an
application or registration for a patent disclosing a subject invention
related to classified subject matter in any country other than the
United States without first obtaining the written approval of the
Contracting Officer.

\(2\) Transmission of classified subject matter. If in accordance with
this clause the Contractor files a patent application in the United
States disclosing a subject invention that is classified for reasons of
security, the Contractor shall observe all applicable security
regulations covering the transmission of classified subject matter. If
the Contractor transmits a patent application disclosing a classified
subject invention to the United States Patent and Trademark Office
(USPTO), the Contractor shall submit a separate letter to the USPTO
identifying the contract or contracts by agency and agreement number
that require security classification markings to be placed on the patent
application.

\(3\) Inclusion of clause in subcontracts. The Contractor agrees to
include the substance of this clause in subcontracts at any tier that
cover or are likely to cover subject matter classified for reasons of
security.

\(p\) Examination of Records Relating to Inventions. (1) Contractor
compliance. Until the expiration of three (3) years after final payment
under this contract, the Contracting Officer or any authorized
representative may examine any books (including laboratory notebooks),
records, and documents and other supporting data of the Contractor,
which the Contracting Officer or authorized representative deems
reasonably pertinent to the discovery or identification of subject
inventions, including exceptional circumstance subject inventions, or to
determine Contractor (and inventor) compliance with the requirements of
this clause, including proper identification and disclosure of subject
inventions, and establishment and maintenance of invention disclosure
procedures.

\(2\) Unreported inventions. If the Contracting Officer is aware of an
invention that is not disclosed by the Contractor to DOE, and the
Contracting Officer believes the unreported invention may be a subject
invention, DOE may require the Contractor to submit to DOE a disclosure
of the invention for a determination of ownership rights.

\(3\) Confidentiality. Any examination of records under this paragraph
is subject to appropriate conditions to protect the confidentiality of
the information involved.

\(4\) Power of inspection. With respect to a subject invention for which
the Contractor has responsibility for patent prosecution, the Contractor
shall furnish the Government, upon request by DOE, an irrevocable power
to inspect and make copies of a prosecution file for any patent
application claiming the subject invention.

\(q\) Patent Functions. Upon the written request of the Contracting
Officer or Patent Counsel, the Contractor agrees to make reasonable
efforts to support DOE in accomplishing patent-related functions for
work arising out of the contract, including, but not limited to, the
prosecution of patent applications, and the determination of questions
of novelty, patentability, and inventorship.

\(r\) Educational Awards Subject to *35 U.S.C. 212.* The Contractor
shall notify the Contracting Officer prior to the placement of any
person subject to *35 U.S.C. 212* in an area of technology or task (1)
related to exceptional circumstance technology or (2) any person who is
subject to treaties or international agreements as set forth in
paragraph (b)(6) of this clause or to agreements other than funding
agreements. The Contracting Officer may disapprove of any such
placement.

\(s\) Annual Appraisal by Patent Counsel. Patent Counsel may conduct an
annual appraisal to evaluate the Contractor\'s effectiveness in
identifying and protecting subject inventions in accordance with DOE
policy.

\(t\) Publication. The Contractor shall receive approval from Patent
Counsel prior to releasing or publishing information regarding
scientific or technical developments conceived or first actually reduced
to practice in the course of or under this contract, to ensure such
release or publication does not adversely affect the patent rights of
DOE or the Contractor.

\(u\) Termination of Contractor\'s Advance Class Waiver. If a request by
the Contractor for an advance class waiver pursuant to subparagraph
(b)(2) of this clause or a determination of greater rights pursuant to
paragraph (c) of this clause contains false material statements or fails
to disclose material facts, and DOE relies on the false statements or
omissions in granting the Contractor\'s request, the waiver or grant of
any Government rights (in whole or in part) to the subject invention(s)
may be terminated at the discretion of the Secretary of Energy or
designee. Prior to termination, DOE shall provide the Contractor with
written notification of the termination, including a statement of facts
in support of the termination, and the Contractor shall be allowed
thirty (30) days, or a longer period authorized by the Secretary of
Energy or designee for good cause shown in writing by the Contractor, to
show cause for not terminating the waiver or grant. Any termination of
an advance class waiver or a determination of greater rights is subject
to the Contractor\'s license as provided for in paragraph (f) of this
clause.

(End of Clause)

Alternate 1 Weapons Related Subject Inventions. As prescribed at
970.2703-2(g), insert the following as subparagraphs (a)(9)and (b)(10),
respectively:

\(a\) Definitions. (9) Weapons Related Subject Invention means any
subject invention conceived or first actually reduced to practice in the
course of or under work funded by or through defense programs, including
Department of Defense and intelligence reimbursable work, or the Naval
Nuclear Propulsion Program of the Department of Energy or the National
Nuclear Security Administration.

\(b\) Allocation of Principal Rights. (10) Weapons related subject
inventions. Except to the extent that DOE is solely satisfied that the
Contractor meets certain procedural requirements and DOE grants rights
to the Contractor in weapons related subject inventions, the Contractor
does not have a right to retain title to any weapons related subject
inventions.

(End of Alternate)

Final Rule 67 FR 48568 July 25, 2002

**970.5228-1 Insurance-litigation and claims.**

As prescribed in 48 CFR 970.2803-2, insert the following clause:

INSURANCE - LITIGATION AND CLAIMS (MAR 2002)

\(a\) The contractor may, with the prior written authorization of the
contracting officer, and shall, upon the request of the Government,
initiate litigation against third parties, including proceedings before
administrative agencies, in connection with this contract. The
contractor shall proceed with such litigation in good faith and as
directed from time to time by the contracting officer.

\(b\) The contractor shall give the contracting officer immediate notice
in writing of any legal proceeding, including any proceeding before an
administrative agency, filed against the contractor arising out of the
performance of this contract. Except as otherwise directed by the
contracting officer, in writing, the contractor shall furnish
immediately to the contracting officer copies of all pertinent papers
received by the contractor with respect to such action. The contractor,
with the prior written authorization of the contracting officer, shall
proceed with such litigation in good faith and as directed from time to
time by the contracting officer.

(c)(1) Except as provided in paragraph (c)(2) of this clause, the
contractor shall procure and maintain such bonds and insurance as
required by law or approved in writing by the contracting officer.

\(2\) The contractor may, with the approval of the contracting officer,
maintain a self-insurance program; provided that, with respect to
workers\' compensation, the contractor is qualified pursuant to
statutory authority.

\(3\) All bonds and insurance required by this clause shall be in a form
and amount and for those periods as the contracting officer may require
or approve and with sureties and insurers approved by the contracting
officer.

\(d\) The contractor agrees to submit for the contracting officer\'s
approval, to the extent and in the manner required by the contracting
officer, any other bonds and insurance that are maintained by the
contractor in connection with the performance of this contract and for
which the contractor seeks reimbursement. If an insurance cost (whether
a premium for commercial insurance or related to self-insurance)
includes a portion covering costs made unallowable elsewhere in the
contract, and the share of the cost for coverage for the unallowable
cost is determinable, the portion of the cost that is otherwise an
allowable cost under this contract is reimbursable to the extent
determined by the contracting officer.

\(e\) Except as provided in subparagraphs (g) and (h) of this clause, or
specifically disallowed elsewhere in this contract, the contractor shall
be reimbursed-

\(1\) For that portion of the reasonable cost of bonds and insurance
allocable to this contract required in accordance with contract terms or
approved under this clause, and

\(2\) For liabilities (and reasonable expenses incidental to such
liabilities, including litigation costs) to third persons not
compensated by insurance or otherwise without regard to and as an
exception to the clause of this contract entitled \"Obligation of
Funds.\"

\[67 FR 14871, Mar. 28, 2002\]

\(f\) The Government\'s liability under paragraph (e) of this clause is
subject to the availability of appropriated funds. Nothing in this
contract shall be construed as implying that the Congress will, at a
later date, appropriate funds sufficient to meet deficiencies.

\(g\) Notwithstanding any other provision of this contract, the
contractor shall not be reimbursed for liabilities (and expenses
incidental to such liabilities, including litigation costs, counsel
fees, judgment and settlements)-

\(1\) Which are otherwise unallowable by law or the provisions of this
contract; or

\(2\) For which the contractor has failed to insure or to maintain
insurance as required by law, this contract, or by the written direction
of the contracting officer.

\(h\) In addition to the cost reimbursement limitations contained in 48
CFR Part 31, as supplemented by 48 CFR 970.31, and notwithstanding any
other provision of this contract, the contractor\'s liabilities to third
persons, including employees but excluding costs incidental to worker\'s
compensation actions, (and any expenses incidental to such liabilities,
including litigation costs, counsel fees, judgments and settlements)
shall not be reimbursed if such liabilities were caused by contractor
managerial personnel\'s-

\[67 FR 14871, Mar. 28, 2002\]

\(1\) Willful misconduct,

\(2\) Lack of good faith, or

\(3\) Failure to exercise prudent business judgment, which means failure
to act in the same manner as a prudent person in the conduct of
competitive business; or, in the case of a non-profit educational
institution, failure to act in the manner that a prudent person would
under the circumstances prevailing at the time the decision to incur the
cost is made.

\(i\) The burden of proof shall be upon the contractor to establish that
costs covered by paragraph (h) of this clause are allowable and
reasonable if, after an initial review of the facts, the contracting
officer challenges a specific cost or informs the contractor that there
is reason to believe that the cost results from willful misconduct, lack
of good faith, or failure to exercise prudent business judgment by
contractor managerial personnel.

(j)(1) All litigation costs, including counsel fees, judgments and
settlements shall be differentiated and accounted for by the contractor
so as to be separately identifiable. If the contracting officer
provisionally disallows such costs, then the contractor may not use
funds advanced by DOE under the contract to finance the litigation.

\(2\) Punitive damages are not allowable unless the act or failure to
act which gave rise to the liability resulted from compliance with
specific terms and conditions of the contract or written instructions
from the contracting officer.

\(3\) The portion of the cost of insurance obtained by the contractor
that is allocable to coverage of liabilities referred to in paragraph
(g)(1) of this clause is not allowable.

\(4\) The term \"contractor\'s managerial personnel\" is defined in
clause paragraph (j) of 48 CFR 970.5245-1.

\[67 FR 14871, Mar. 28, 2002\]

\(k\) The contractor may at its own expense and not as an allowable cost
procure for its own protection insurance to compensate the contractor
for any unallowable or unreimbursable costs incurred in connection with
contract performance.

\(l\) If any suit or action is filed or any claim is made against the
contractor, the cost and expense of which may be reimbursable to the
contractor under this contract, and the risk of which is then uninsured
or is insured for less than the amount claimed, the contractor shall-

\(1\) Immediately notify the contracting officer and promptly furnish
copies of all pertinent papers received;

\(2\) Authorize Department representatives to collaborate with: in-house
or DOE-approved outside counsel in settling or defending the claim; or
counsel for the insurance carrier in settling or defending the claim if
the amount of the liability claimed exceeds the amount of coverage,
unless precluded by the terms of the insurance contract; and

\(3\) Authorize Department representatives to settle the claim or to
defend or represent the contractor in and/or to take charge of any
litigation, if required by the Department, if the liability is not
insured or covered by bond. In any action against more than one
Department contractor, the Department may require the contractor to be
represented by common counsel. Counsel for the contractor may, at the
contractor\'s own expense, be associated with the Department
representatives in any such claim or litigation.

(End of Clause)

**970.5229-1 State and local taxes.**

As prescribed in 48 CFR 970.2904-1(b), insert the following clause in
management and operating contracts. The requirement for the notice
prescribed in paragraph (a) of the clause may be broadened to include
all State and local taxes which may be claimed as allowable costs when
considered to be appropriate.

STATE AND LOCAL TAXES (DEC 2000)

\(a\) The contractor agrees to notify the contracting officer of any
State or local tax, fee, or charge levied or purported to be levied on
or collected from the contractor with respect to the contract work, any
transaction thereunder, or property in the custody or control of the
contractor and constituting an allowable item of cost if due and
payable, but which the contractor has reason to believe, or the
contracting officer has advised the contractor, is or may be
inapplicable or invalid; and the contractor further agrees to refrain
from paying any such tax, fee, or charge unless authorized in writing by
the contracting officer. Any State or local tax, fee, or charge paid
with the approval of the contracting officer or on the basis of advice
from the contracting officer that such tax, fee, or charge is applicable
and valid, and which would otherwise be an allowable item of cost, shall
not be disallowed as an item of cost by reason of any subsequent ruling
or determination that such tax, fee, or charge was in fact inapplicable
or invalid.

\(b\) The contractor agrees to take such action as may be required or
approved by the contracting officer to cause any State or local tax,
fee, or charge which would be an allowable cost to be paid under
protest; and to take such action as may be required or approved by the
contracting officer to seek recovery of any payments made, including
assignment to the Government or its designee of all rights to an
abatement or refund thereof, and granting permission for the Government
to join with the contractor in any proceedings for the recovery thereof
or to sue for recovery in the name of the contractor. If the contracting
officer directs the contractor to institute litigation to enjoin the
collection of or to recover payment of any such tax, fee, or charge
referred to above, or if a claim or suit is filed against the contractor
for a tax, fee, or charge it has refrained from paying in accordance
with this clause, the procedures and requirements of the clause entitled
\"Insurance-Litigation and Claims\" shall apply and the costs and
expenses incurred by the contractor shall be allowable items of costs,
as provided in this contract, together with the amount of any judgment
rendered against the contractor.

\(c\) The Government shall hold the contractor harmless from penalties
and interest incurred through compliance with this clause. All
recoveries or credits in respect of the foregoing taxes, fees, and
charges (including interest) shall inure to and be for the sole benefit
of the Government.

(End of Clause)

**970.5231-4 Preexisting conditions.**

As prescribed in 48 CFR 970.3170, insert the following clause:

PREEXISTING CONDITIONS (DEC 2000)

\(a\) The Department of Energy agrees to reimburse the contractor, and
the contractor shall not be held responsible, for any liability
(including without limitation, a claim involving strict or absolute
liability and any civil fine or penalty), expense, or remediation cost,
but limited to those of a civil nature, which may be incurred by,
imposed on, or asserted against the contractor arising out of any
condition, act, or failure to act which occurred before the contractor
assumed responsibility on \[Insert date contract began\]. To the extent
the acts or omissions of the contractor cause or add to any liability,
expense or remediation cost resulting from conditions in existence prior
to \[Insert date contract began\], the contractor shall be responsible
in accordance with the terms and conditions of this contract.

\(b\) The obligations of the Department of Energy under this clause are
subject to the availability of appropriated funds.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.3170 (a), in
contracts with incumbent management and operating contractors,
substitute the following for paragraph (a) of the basic clause:

\(a\) Any liability, obligation, loss, damage, claim (including without
limitation, a claim involving strict or absolute liability), action,
suit, civil fine or penalty, cost, expense or disbursement, which may be
incurred or imposed, or asserted by any party and arising out of any
condition, act or failure to act which occurred before \[Insert date
this clause was included in contract\], in conjunction with the
management and operation of \[Insert name of facility\], shall be deemed
incurred under Contract No. \[Insert number of prior contract\].

Alternate II (DEC 2000). As prescribed in 48 CFR 970.3170 (b), add the
following paragraph (c) to the basic clause in contracts with management
and operating contractors not previously working at that particular site
or facility:

\(c\) The contractor has the duty to inspect the facilities and sites
and timely identify to the contracting officer those conditions which it
believes could give rise to a liability, obligation, loss, damage,
penalty, fine, claim, action, suit, cost, expense, or disbursement or
areas of actual or potential noncompliance with the terms and conditions
of this contract or applicable law or regulation. The contractor has the
responsibility to take corrective action, as directed by the contracting
officer and as required elsewhere in this contract.

(End of Clause)

**970.5232-1 Reduction or suspension of advance, partial, or progress
payments upon finding of substantial evidence of fraud.**

As prescribed in 48 CFR 970.3200-1-1, insert the following clause:

Reduction or Suspension of Advance, Partial,

or Progress Payments (DEC 2000)

\(a\) The contracting officer may reduce or suspend further advance,
partial, or progress payments to the contractor upon a written
determination by the Senior Procurement Executive that substantial
evidence exists that the contractor\'s request for advance, partial, or
progress payment is based on fraud.

\(b\) The contractor shall be afforded a reasonable opportunity to
respond in writing.

(End of Clause)

**970.5232-2 Payments and advances.**

As prescribed in 48 CFR 970.3270(a)(1), insert the following clause:

PAYMENTS AND ADVANCES (DEC 2000)

\(a\) Installments of fixed-fee. The fixed-fee payable under this
contract shall become due and payable in periodic installments in
accordance with a schedule determined by the contracting officer.
Fixed-fee payments shall be made by direct payment or withdrawn from
funds advanced or available under this contract, as determined by the
contracting officer. The contracting officer may offset against any such
fee payment the amounts owed to the Government by the contractor,
including any amounts owed for disallowed costs under this contract. No
fixed-fee payment may be withdrawn against the payments cleared
financing arrangement without prior written approval of the contracting
officer.

\(b\) Payments on Account of Allowable Costs. The contracting officer
and the contractor shall agree as to the extent to which payment for
allowable costs or payments for other items specifically approved in
writing by the contracting officer (for example, negotiated fixed
amounts) shall be made from advances of Government funds. When pension
contributions are paid by the contractor to the retirement fund less
frequently than quarterly, accrued costs therefor shall be excluded from
costs for payment purposes until such costs are paid. If pension
contribution are paid on a quarterly or more frequent basis, accrual
therefor may be included in costs for payment purposes, provided that
they are paid to the fund within 30 days after the close of the period
covered. If payments are not made to the fund within such 30-day period,
pension contribution costs shall be excluded from cost for payment
purposes until payment has been made.

\(c\) Special financial institution account-use. All advances of
Government funds shall be withdrawn pursuant to a payments cleared
financing arrangement prescribed by DOE in favor of the financial
institution or, at the option of the Government, shall be made by direct
payment or other payment mechanism to the contractor, and shall be
deposited only in the special financial institution account referred to
in the Special Financial Institution Account Agreement, which is
incorporated into this contract as Appendix-. No part of the funds in
the special financial institution account shall be commingled with any
funds of the contractor or used for a purpose other than that of making
payments for costs allowable and, if applicable, fees earned under this
contract, negotiated fixed amounts, or payments for other items
specifically approved in writing by the contracting officer. If the
contracting officer determines that the balance of such special
financial institution account exceeds the contractor\'s current needs,
the contractor shall promptly make such disposition of the excess as the
contracting officer may direct.

\(d\) Title to funds advanced. Title to the unexpended balance of any
funds advanced and of any special financial institution account
established pursuant to this clause shall remain in the Government and
be superior to any claim or lien of the financial institution of deposit
or others. It is understood that an advance to the contractor hereunder
is not a loan to the contractor, and will not require the payment of
interest by the contractor, and that the contractor acquires no right,
title or interest in or to such advance other than the right to make
expenditures therefrom, as provided in this clause.

\(e\) Financial settlement. The Government shall promptly pay to the
contractor the unpaid balance of allowable costs (or other items
specifically approved in writing by the contracting officer) and fee
upon termination of the work, expiration of the term of the contract, or
completion of the work and its acceptance by the Government after:

\(1\) Compliance by the contractor with DOE\'s patent clearance
requirements, and

\(2\) The furnishing by the contractor of:

\(i\) An assignment of the contractor\'s rights to any refunds, rebates,
allowances, accounts receivable, collections accruing to the contractor
in connection with the work under this contract, or other credits
applicable to allowable costs under the contract;

\(ii\) A closing financial statement;

\(iii\) The accounting for Government-owned property required by the
clause entitled \"Property\"; and

\(iv\) A release discharging the Government, its officers, agents, and
employees from all liabilities, obligations, and claims arising out of
or under this contract subject only to the following exceptions:

\(A\) Specified claims in stated amounts or in estimated amounts where
the amounts are not susceptible to exact statement by the contractor;

\(B\) Claims, together with reasonable expenses incidental thereto,
based upon liabilities of the contractor to third parties arising out of
the performance of this contract; provided that such claims are not
known to the contractor on the date of the execution of the release; and
provided further that the contractor gives notice of such claims in
writing to the contracting officer promptly, but not more than one (1)
year after the contractor\'s right of action first accrues. In addition,
the contractor shall provide prompt notice to the contracting officer of
all potential claims under this clause, whether in litigation or not
(see also Contract Clause, DEAR 970.5228-1, \"Insurance-Litigation and
Claims\");

\(C\) Claims for reimbursement of costs (other than expenses of the
contractor by reason of any indemnification of the Government against
patent liability), including reasonable expenses incidental thereto,
incurred by the contractor under the provisions of this contract
relating to patents; and

\(D\) Claims recognizable under the clause entitled, Nuclear Hazards
Indemnity Agreement.

\(3\) In arriving at the amount due the contractor under this clause,
there shall be deducted,

\(i\) Any claim which the Government may have against the contractor in
connection with this contract, and

\(ii\) Deductions due under the terms of this contract, and not
otherwise recovered by or credited to the Government. The unliquidated
balance of the special financial institution account may be applied to
the amount due and any balance shall be returned to the Government
forthwith.

\(f\) Claims. Claims for credit against funds advanced for payment shall
be accompanied by such supporting documents and justification as the
contracting officer shall prescribe.

\(g\) Discounts. The contractor shall take and afford the Government the
advantage of all known and available cash and trade discounts, rebates,
allowances, credits, salvage, and commissions unless the contracting
officer finds that action is not in the best interest of the Government.

\(h\) Collections. All collections accruing to the contractor in
connection with the work under this contract, except for the
contractor\'s fee and royalties or other income accruing to the
contractor from technology transfer activities in accordance with this
contract, shall be Government property and shall be processed and
accounted for in accordance with applicable requirements imposed by the
contracting officer pursuant to the Laws, regulations, and DOE
directives clause of this contract and, to the extent consistent with
those requirements, shall be deposited in the special financial
institution account or otherwise made available for payment of allowable
costs under this contract, unless otherwise directed by the contracting
officer.

\(i\) Direct payment of charges. The Government reserves the right, upon
ten days written notice from the contracting officer to the contractor,
to pay directly to the persons concerned, all amounts due which
otherwise would be allowable under this contract. Any payment so made
shall discharge the Government of all liability to the contractor
therefor.

\(j\) Determining allowable costs. The contracting officer shall
determine allowable costs in accordance with the Federal Acquisition
Regulation subpart 31.2 and the Department of Energy Acquisition
Regulation subpart 48 CFR 970.31 in effect on the date of this contract
and other provisions of this contract.

Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(i), if a
separate fixed-fee is provided for a separate item of work, paragraph
(a) of the basic clause should be modified to permit payment of the
entire fixed-fee upon completion of that item.

Alternate II (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(ii),
when total available fee provisions are used, replace paragraph (a) of
the basic clause with the following paragraph (a):

\(a\) Payment of Total available fee: Base Fee and Performance Fee. The
base fee amount, if any, is payable in equal monthly installments. Total
available fee amount earned is payable following the Government\'s
Determination of Total Available Fee Amount Earned in accordance with
the clause of this contract entitled \"Total Available Fee: Base Fee
Amount and Performance Fee Amount.\" Base fee amount and total available
fee amount earned payments shall be made by direct payment or withdrawn
from funds advanced or available under this contract, as determined by
the contracting officer. The contracting officer may offset against any
such fee payment the amounts owed to the Government by the contractor,
including any amounts owed for disallowed costs under this contract. No
base fee amount or total available fee amount earned payment may be
withdrawn against the payments cleared financing arrangement without the
prior written approval of the contracting officer.

Alternate III (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(iii),
the following paragraph (k) shall be included in management and
operating contracts with integrated accounting systems:

\(k\) Review and approval of costs incurred. The contractor shall
prepare and submit annually as of September 30, a \"Statement of Costs
Incurred and Claimed\" (Cost Statement) for the total of net
expenditures accrued (i.e., net costs incurred) for the period covered
by the Cost Statement. The contractor shall certify the Cost Statement
subject to the penalty provisions for unallowable costs as stated in
sections 306(b) and (i) of the Federal Property and Administrative
Services Act of 1949 *(41 U.S.C. 256),* as amended. DOE, after audit and
appropriate adjustment, will approve such Cost Statement. This approval
by DOE will constitute an acknowledgment by DOE that the net costs
incurred are allowable under the contract and that they have been
recorded in the accounts maintained by the contractor in accordance with
DOE accounting policies, but will not relieve the contractor of
responsibility for DOE\'s assets in its care, for appropriate subsequent
adjustments, or for errors later becoming known to DOE.

Alternate IV (DEC 2000). As prescribed in 48 CFR 970.3270(a)(1)(iv), the
following paragraph (k) shall be included in management and operating
contracts without integrated accounting systems:

\(k\) Certification and penalties. The contractor shall prepare and
submit a \"Statement of Costs Incurred and Claimed\" (Cost Statement)
for the total of net expenditures incurred for the period covered by the
Cost Statement. It is anticipated that this will be an annual submission
unless otherwise agreed to by the contracting officer. The contractor
shall certify the Cost Statement subject to the penalty provisions for
unallowable costs as stated in sections 306(b) and (i) of the Federal
Property and Administrative Services Act of 1949 *(41 U.S.C. 256),* as
amended.

**970.5232-3 Accounts, records, and inspection.**

As prescribed in 48 CFR 970.3270(a)(2), insert the following clause:

ACCOUNTS, RECORDS, AND INSPECTION (JUN 2007)

\(a\) Accounts. The contractor shall maintain a separate and distinct
set of accounts, records, documents, and other evidence showing and
supporting: all allowable costs incurred; collections accruing to the
contractor in connection with the work under this contract, other
applicable credits, negotiated fixed amounts, and fee accruals under
this contract; and the receipt, use, and disposition of all Government
property coming into the possession of the contractor under this
contract. The system of accounts employed by the contractor shall be
satisfactory to DOE and in accordance with generally accepted accounting
principles consistently applied.

\(b\) Inspection and audit of accounts and records. All books of account
and records relating to this contract shall be subject to inspection and
audit by DOE or its designees in accordance with the provisions of
Clause, Access to and ownership of records, at all reasonable times,
before and during the period of retention provided for in paragraph (d)
of this clause, and the contractor shall afford DOE proper facilities
for such inspection and audit.

\(c\) Audit of subcontractors\' records. The contractor also agrees,
with respect to any subcontracts (including fixed-price or unit-price
subcontracts or purchase orders) where, under the terms of the
subcontract, costs incurred are a factor in determining the amount
payable to the subcontractor of any tier, to either conduct an audit of
the subcontractor\'s costs or arrange for such an audit to be performed
by the cognizant government audit agency through the contracting
officer.

\(d\) Disposition of records. Except as agreed upon by the Government
and the contractor, all financial and cost reports, books of account and
supporting documents, system files, data bases, and other data
evidencing costs allowable, collections accruing to the contractor in
connection with the work under this contract, other applicable credits,
and fee accruals under this contract, shall be the property of the
Government, and shall be delivered to the Government or otherwise
disposed of by the contractor either as the contracting officer may from
time to time direct during the progress of the work or, in any event, as
the contracting officer shall direct upon completion or termination of
this contract and final audit of accounts hereunder. Except as otherwise
provided in this contract, including provisions of Clause, Access to and
ownership of records, all other records in the possession of the
contractor relating to this contract shall be preserved by the
contractor for a period of three years after final payment under this
contract or otherwise disposed of in such manner as may be agreed upon
by the Government and the contractor.

\(e\) Reports. The contractor shall furnish such progress reports and
schedules, financial and cost reports, and other reports concerning the
work under this contract as the contracting officer may from time to
time require.

\(f\) Inspections. The DOE shall have the right to inspect the work and
activities of the contractor under this contract at such time and in
such manner as it shall deem appropriate.

\(g\) Subcontracts. The contractor further agrees to require the
inclusion of provisions similar to those in paragraphs (a) through (g)
and paragraph (h) of this clause in all subcontracts (including
fixed-price or unit-price subcontracts or purchase orders) of any tier
entered into hereunder where, under the terms of the subcontract, costs
incurred are a factor in determining the amount payable to the
subcontractor.

\(h\) Comptroller General. (1) The Comptroller General of the United
States, or an authorized representative, shall have access to and the
right to examine any of the contractor\'s directly pertinent records
involving transactions related to this contract or a subcontract
hereunder.

\(2\) This paragraph may not be construed to require the contractor or
subcontractor to create or maintain any record that the contractor or
subcontractor does not maintain in the ordinary course of business or
pursuant to a provision of law.

\(3\) Nothing in this contract shall be deemed to preclude an audit by
the General Accounting Office of any transaction under this contract.

\(i\) Internal audit. The contractor agrees to design and maintain an
internal audit plan and an internal audit organization.

\(1\) Upon contract award, the exercise of any contract option, or the
extension of the contract, the contractor must submit to the contracting
officer for approval an Internal Audit Implementation Design to include
the overall strategy for internal audits. The Audit Implementation
Design must describe:

\(i\) The internal audit organization\'s placement within the
contractor\'s organization and its reporting requirements;

\(ii\) The audit organization\'s size and the experience and educational
standards of its staff;

\(iii\) The audit organization\'s relationship to the corporate entities
of the contractor;

\(iv\) The standards to be used in conducting the internal audits;

\(v\) The overall internal audit strategy of this contract, considering
particularly the method of auditing costs incurred in the performance of
the contract;

\(vi\) The intended use of external audit resources;

\(vii\) The plan for audit of subcontracts, both pre-award and
post-award; and

\(viii\) The schedule for peer review of internal audits by other
contractor internal audit organizations, or other independent third
party audit entities approved by the DOE contracting officer.

\(2\) By each January 31 of the contract performance period, the
contractor must submit an annual audit report, providing a summary of
the audit activities undertaken during the previous fiscal year. That
report shall reflect the results of the internal audits during the
previous fiscal year and the actions to be taken to resolve weaknesses
identified in the contractor\'s system of business, financial, or
management controls.

\(3\) By each June 30 of the contract performance period, the contractor
must submit to the contracting officer an annual audit plan for the
activities to be undertaken by the internal audit organization during
the next fiscal year that is designed to test the costs incurred and
contractor management systems described in the internal audit design.

\(4\) The contracting officer may require revisions to documents
submitted under paragraphs (i)(1), (i)(2), and (i)(3) of this clause,
including the design plan for the internal audits, the annual report,
and the annual internal audits.

\(j\) Remedies. If at any time during contract performance, the
contracting officer determines that unallowable costs were claimed by
the contractor to the extent of making the contractor\'s management
controls suspect, or the contractor\'s management systems that validate
costs incurred and claimed suspect, the contracting officer may, in his
or her sole discretion, require the contractor to cease using the
special financial institution account in whole or with regard to
specified accounts, requiring reimbursable costs to be claimed by
periodic vouchering. In addition, the contracting officer, where he or
she deems it appropriate, may: Impose a penalty under 970.5242-1,
Penalties for unallowable costs; require a refund; reduce the
contractor\'s otherwise earned fee; and take such other action as
authorized in law, regulation, or this contract.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(2)(i), if
the contract includes the clause at 48 CFR 52.215-11, Price Reduction
for Defective Cost or Pricing Data, the basic clause shall be modified
as follows:

\(a\) Paragraph (a) of the basic clause shall be modified by adding the
words \"or anticipated to be incurred\" after the words \"allowable
costs incurred.\"

\(b\) Paragraph (g) of the basic clause shall be modified by adding the
following:

The contractor further agrees to include an \"Audit\" clause, the
substance of which is the \"Audit\" clause set forth at 48 CFR 52.215-2,
in each subcontract which does not include provisions similar to those
in paragraph (a) through paragraph (g) and paragraph (h) of this clause,
but which contains a \"defective cost or pricing data\" clause.

**970.5232-4 Obligation of funds.**

As prescribed in 48 CFR 970.3270(a)(3), insert the following clause:

OBLIGATION OF FUNDS (DEC 2000)

\(a\) Obligation of funds. The amount presently obligated by the
Government with respect to this contract is dollars (\$). Such amount
may be increased unilaterally by DOE by written notice to the contractor
and may be increased or decreased by written agreement of the parties
(whether or not by formal modification of this contract). Estimated
collections from others for work and services to be performed under this
contract are not included in the amount presently obligated. Such
collections, to the extent actually received by the contractor, shall be
processed and accounted for in accordance with applicable requirements
imposed by the contracting officer pursuant to the Laws, regulations,
and DOE directives clause of this contract. Nothing in this paragraph is
to be construed as authorizing the contractor to exceed limitations
stated in financial plans established by DOE and furnished to the
contractor from time to time under this contract.

\(b\) Limitation on payment by the Government. Except as otherwise
provided in this contract and except for costs which may be incurred by
the contractor pursuant to the Termination clause of this contract or
costs of claims allowable under the contract occurring after completion
or termination and not released by the contractor at the time of
financial settlement of the contract in accordance with the clause
entitled \"Payments and Advances,\" payment by the Government under this
contract on account of allowable costs shall not, in the aggregate,
exceed the amount obligated with respect to this contract, less the
contractor\'s fee and any negotiated fixed amount. Unless expressly
negated in this contract, payment on account of those costs excepted in
the preceding sentence which are in excess of the amount obligated with
respect to this contract shall be subject to the availability of:

\(1\) collections accruing to the contractor in connection with the work
under this contract and processed and accounted for in accordance with
applicable requirements imposed by the contracting officer pursuant to
the Laws, regulations, and DOE directives clause of this contract, and

\(2\) other funds which DOE may legally use for such purpose, provided
DOE will use its best efforts to obtain the appropriation of funds for
this purpose if not otherwise available.

\(c\) Notices-Contractor excused from further performance. The
contractor shall notify DOE in writing whenever the unexpended balance
of available funds (including collections available under paragraph (a)
of this clause), plus the contractor\'s best estimate of collections to
be received and available during the day period hereinafter specified,
is in the contractor\'s best judgment sufficient to continue contract
operations at the programmed rate for only days and to cover the
contractor\'s unpaid fee and any negotiated fixed amounts, and
outstanding encumbrances and liabilities on account of costs allowable
under the contract at the end of such period. Whenever the unexpended
balance of available funds (including collections available under
paragraph (a) of this clause), less the amount of the contractor\'s fee
then earned but not paid and any negotiated fixed amounts, is in the
contractor\'s best judgment sufficient only to liquidate outstanding
encumbrances and liabilities on account of costs allowable under this
contract, the contractor shall immediately notify DOE and shall make no
further encumbrances or expenditures (except to liquidate existing
encumbrances and liabilities), and, unless the parties otherwise agree,
the contractor shall be excused from further performance (except such
performance as may become necessary in connection with termination by
the Government) and the performance of all work hereunder will be deemed
to have been terminated for the convenience of the Government in
accordance with the provisions of the Termination clause of this
contract.

\(d\) Financial plans; cost and encumbrance limitations. In addition to
the limitations provided for elsewhere in this contract, DOE may,
through financial plans, such as Approved Funding Programs, or other
directives issued to the contractor, establish controls on the costs to
be incurred and encumbrances to be made in the performance of the
contract work. Such plans and directives may be amended or supplemented
from time to time by DOE. The contractor agrees

\(1\) to comply with the specific limitations (ceilings) on costs and
encumbrances set forth in such plans and directives,

\(2\) to comply with other requirements of such plans and directives,
and

\(3\) to notify DOE promptly, in writing, whenever it has reason to
believe that any limitation on costs and encumbrances will be exceeded
or substantially underrun.

\(e\) Government\'s right to terminate not affected. The giving of any
notice under this clause shall not be construed to waive or impair any
right of the Government to terminate the contract under the provisions
of the Termination clause of this contract.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.3270(a)(3)(i),
paragraph (d) of the clause may be omitted in contracts which, expressly
or otherwise, provide a contractual basis for equivalent controls in a
separate clause.

**970.5232-5 Liability with respect to cost accounting standards.**

As prescribed in 48 CFR 970.3270(a)(5), insert the following clause:

LIABILITY WITH RESPECT TO COST ACCOUNTING STANDARDS (DEC 2000)

\(a\) The contractor is not liable to the Government for increased costs
or interest resulting from its failure to comply with the clauses of
this contract entitled, \"Cost Accounting Standards,\" and
\"Administration of Cost Accounting Standards,\" if its failure to
comply with the clauses is caused by the contractor\'s compliance with
published DOE financial management policies and procedures or other
requirements established by the Department\'s Chief Financial Officer or
Procurement Executive.

\(b\) The contractor is not liable to the Government for increased costs
or interest resulting from its subcontractors\' failure to comply with
the clauses at FAR 52.230-2, \"Cost Accounting Standards,\" and FAR
52.230-6, \"Administration of Cost Accounting Standards,\" if the
contractor includes in each covered subcontract a clause making the
subcontractor liable to the Government for increased costs or interest
resulting from the subcontractor\'s failure to comply with the clauses;
and the contractor seeks the subcontract price adjustment and cooperates
with the Government in the Government\'s attempts to recover from the
subcontractor.

**970.5232-6 Work for others funding authorization.**

As prescribed in 48 CFR 970.3270(a)(6), insert the following clause:

WORK FOR OTHERS FUNDING AUTHORIZATION (DEC 2000)

Any uncollectible receivables resulting from the contractor utilizing
contractor corporate funding for reimbursable work shall be the
responsibility of the contractor, and the United States Government shall
have no liability to the contractor for the contractor\'s uncollected
receivables. The contractor is permitted to provide advance payment
utilizing contractor corporate funds for reimbursable work to be
performed by the contractor for a non-Federal entity in instances where
advance payment from that entity is required under the Laws,
regulations, and DOE directives clause of this contract and such advance
cannot be obtained. The contractor is also permitted to provide advance
payment utilizing contractor corporate funds to continue reimbursable
work to be performed by the contractor for a Federal entity when the
term or the funds on a Federal interagency agreement required under the
Laws, regulations, and DOE directives clause of this contract have
elapsed. The contractor\'s utilization of contractor corporate funds
does not relieve the contractor of its responsibility to comply with all
requirements for Work for Others applicable to this contract.

**970.5232-7 Financial management system.**

As prescribed in 48 CFR 970.3270(b)(1), insert the following clause:

Financial Management System (DEC 2000)

The contractor shall maintain and administer a financial management
system that is suitable to provide proper accounting in accordance with
DOE requirements for assets, liabilities, collections accruing to the
contractor in connection with the work under this contract,
expenditures, costs, and encumbrances; permits the preparation of
accounts and accurate, reliable financial and statistical reports; and
assures that accountability for the assets can be maintained. The
contractor shall submit to DOE for written approval an annual plan for
new financial management systems and/or subsystems and major
enhancements and/or upgrades to the currently existing financial systems
and/or subsystems. The contractor shall notify DOE thirty (30) days in
advance of any planned implementation of any substantial deviation from
this plan and, as requested by the contracting officer, shall submit any
such deviation to DOE for written approval before implementation.

**970.5232-8 Integrated accounting.**

As prescribed in 48 CFR 970.3270(b)(2), insert the following clause:

INTEGRATED ACCOUNTING (DEC 2000)

Integrated accounting procedures are required for use under this
contract. The contractor\'s financial management system shall include an
integrated accounting system that is linked to DOE\'s accounts through
the use of reciprocal accounts and that has electronic capability to
transmit monthly and year-end self-balancing trial balances to the
Department\'s Primary Accounting System for reporting financial activity
under this contract in accordance with requirements imposed by the
contracting officer pursuant to the Laws, regulations, and DOE
directives clause of this contract.

**970.5235-1 Federally funded research and development center sponsoring
agreement.**

As prescribed in 48 CFR 970.3501-4, the contracting officer shall insert
the following clause:

Federally Funded Research and Development Center

Sponsoring Agreement (DEC 2000)

\(a\) Pursuant to 48 CFR 35.017-1, this contract constitutes the
sponsoring agreement between the Department of Energy and the
contractor, which establishes the relationship for the operation of a
Department of Energy sponsored Federally Funded Research and Development
Center (FFRDC).

\(b\) In the operation of this FFRDC, the contractor may be provided
access beyond that which is common to the normal contractual
relationship, to Government and supplier data, including sensitive and
proprietary data, and to Government employees and facilities needed to
discharge its responsibilities efficiently and effectively. Because of
this special relationship, it is essential that the FFRDC be operated in
the public interest with objectivity and independence, be free from
organizational conflicts of interest, and have full disclosure of its
affairs to the Department of Energy.

\(c\) Unless otherwise provided by the contract, the contractor may
accept work from a nonsponsor (as defined in 48 CFR 35.017) in
accordance with the requirements and limitations of DOE Order 481.1,
Work for Others (Non-Department of Energy Funded Work) (see current
version).

\(d\) As an FFRDC, the contractor shall not use its privileged
information or access to government facilities to compete with the
private sector. Specific guidance on restricted activities is contained
in DOE Order 481.1.

(End of Clause)

**970.5236-1 Government facility subcontract approval.**

As prescribed in 48 CFR 970.3605-2, insert the following clause:

Government Facility Subcontract Approval (DEC 2000)

Upon request of the contracting officer and acceptance thereof by the
contractor, the contractor shall procure, by subcontract, the
construction of new facilities or the alteration or repair of
Government-owned facilities at the plant. Any subcontract entered into
under this paragraph shall be subject to the written approval of the
contracting officer and shall contain the provisions relative to labor
and wages required by law to be included in contracts for the
construction, alteration, and/or repair, including painting and
decorating, of a public building or public work.

(End of Clause)

**970.5237-2 \[Removed and reserved\]**

(72 FR 29431, May 29, 2007)

**970.5242-1 Penalties for unallowable costs.**

As prescribed in 48 CFR 970.4207-03-70, insert the following clause:

PENALTIES FOR UNALLOWABLE COSTS (DEC 2000)

\(a\) Contractors which include unallowable cost in a submission for
settlement for cost incurred, may be subject to penalties.

\(b\) If, during the review of a submission for settlement of cost
incurred, the contracting officer determines that the submission
contains an expressly unallowable cost or a cost determined to be
unallowable prior to the submission, the contracting officer shall
assess a penalty.

\(c\) Unallowable costs are either expressly unallowable or determined
unallowable.

\(1\) An expressly unallowable cost is a particular item or type of cost
which, under the express provisions of an applicable law, regulation, or
this contract, is specifically named and stated to be unallowable.

\(2\) A cost determined unallowable is one which, for that contractor,

\(i\) was subject to a contracting officer\'s final decision and not
appealed;

\(ii\) the Department\'s Board of Contract Appeals or a court has
previously ruled as unallowable; or

\(iii\) was mutually agreed to be unallowable.

\(d\) If the contracting officer determines that a cost submitted by the
contractor in its submission for settlement of cost incurred is:

\(1\) expressly unallowable, then the contracting officer shall assess a
penalty in an amount equal to the disallowed cost allocated to this
contract plus interest on the paid portion of the disallowed cost.
Interest shall be computed from the date of overpayment to the date of
repayment using the interest rate specified by the Secretary of the
Treasury pursuant to Pub. L. 92-41 (85 Stat. 97); or

\(2\) determined unallowable, then the contracting officer shall assess
a penalty in an amount equal to two times the amount of the disallowed
cost allocated to this contract.

\(e\) The contracting officer may waive the penalty provisions when

\(1\) the contractor withdraws the submission before the formal
initiation of an audit of the submission and submits a revised
submission;

\(2\) the amount of the unallowable costs allocated to covered contracts
is \$10,000 or less; or

\(3\) the contractor demonstrates to the contracting officer\'s
satisfaction that:

\(i\) it has established appropriate policies, personnel training, and
an internal control and review system that provides assurances that
unallowable costs subject to penalties are precluded from the
contractor\'s submission for settlement of costs; and

\(ii\) the unallowable costs subject to the penalty were inadvertently
incorporated into the submission.

(End of clause)

**970.5243-1 Changes.**

As prescribed in 48 CFR 970.4302-1, the contracting officer shall insert
the following clause in all management and operating contracts:

CHANGES (DEC 2000)

\(a\) Changes and adjustment of fee. The contracting officer may at any
time and without notice to the sureties, if any, issue written
directions within the general scope of this contract requiring
additional work or directing the omission of, or variation in, work
covered by this contract. If any such direction results in a material
change in the amount or character of the work described in the
\"Statement of Work,\" an equitable adjustment of the fee, if any, shall
be made in accordance with the agreement of the parties and the contract
shall be modified in writing accordingly. Any claim by the contractor
for an adjustment under this clause must be asserted in writing within
30 days from the date of receipt by the contractor of the notification
of change; provided, however, that the contracting officer, if it is
determined that the facts justify such action, may receive and act upon
any such claim asserted at any time prior to final payment under this
contract. A failure to agree on an equitable adjustment under this
clause shall be deemed to be a dispute within the meaning of the clause
entitled \"Disputes.\"

\(b\) Work to continue. Nothing contained in this clause shall excuse
the contractor from proceeding with the prosecution of the work in
accordance with the requirements of any direction hereunder.

(End of Clause)

**970.5244-1 Contractor purchasing system.**

As prescribed in 48 CFR 970.4402-5, insert the following clause:

CONTRACTOR PURCHASING SYSTEM (MAY 2006)

\(a\) General. The contractor shall develop, implement, and maintain
formal policies, practices, and procedures to be used in the award of
subcontracts consistent with this clause and 48 CFR 970.44. The
contractor\'s purchasing system and methods shall be fully documented,
consistently applied, and acceptable to DOE in accordance with 48 CFR
970.4401-1. The contractor shall maintain file documentation which is
appropriate to the value of the purchase and is adequate to establish
the propriety of the transaction and the price paid. The contractor\'s
purchasing performance will be evaluated against such performance
criteria and measures as may be set forth elsewhere in this contract.
DOE reserves the right at any time to require that the contractor submit
for approval any or all purchases under this contract. The contractor
shall not purchase any item or service the purchase of which is
expressly prohibited by the written direction of DOE and shall use such
special and directed sources as may be expressly required by the DOE
contracting officer. DOE will conduct periodic appraisals of the
contractor\'s management of all facets of the purchasing function,
including the contractor\'s compliance with its approved system and
methods. Such appraisals will be performed through the conduct of
Contractor Purchasing System Reviews in accordance with 48 CFR subpart
44.3, or, when approved by the contracting officer, through the
contractor\'s participation in the conduct of the Balanced Scorecard
performance measurement and performance management system. The
contractor\'s approved purchasing system and methods shall include the
requirements set forth in paragraphs (b) through (y) of this clause.

\(b\) Acquisition of utility services. Utility services shall be
acquired in accordance with the requirements of 48 CFR 970.41.

\(c\) Acquisition of Real Property. Real property shall be acquired in
accordance with 48 CFR Subpart 917.74.

\(d\) Advance Notice of Proposed Subcontract Awards. Advance notice
shall be provided in accordance with 48 CFR 970.4401-3.

\(e\) Audit of Subcontractors. (1) The contractor shall provide for:

\(i\) periodic post-award audit of cost-reimbursement subcontractors at
all tiers, and

\(ii\) audits, where necessary, to provide a valid basis for pre-award
or cost or price analysis.

\(2\) Responsibility for determining the costs allowable under each
cost-reimbursement subcontract remains with the contractor or next
higher-tier subcontractor. The contractor shall provide, in appropriate
cases, for the timely involvement of the contractor and the DOE
contracting officer in resolution of subcontract cost allowability.

\(3\) Where audits of subcontractors at any tier are required,
arrangements may be made to have the cognizant Federal agency perform
the audit of the subcontract. These arrangements shall be made
administratively between DOE and the other agency involved and shall
provide for the cognizant agency to audit in an appropriate manner in
light of the magnitude and nature of the subcontract. In no case,
however, shall these arrangements preclude determination by the DOE
contracting officer of the allowability or unallowability of
subcontractor costs claimed for reimbursement by the contractor.

\(4\) Allowable costs for cost reimbursable subcontracts are to be
determined in accordance with the cost principles of 48 CFR Part 31,
appropriate for the type of organization to which the subcontract is to
be awarded, as supplemented by 48 CFR Part 931. Allowable costs in the
purchase or transfer from contractor-affiliated sources shall be
determined in accordance with 48 CFR 970.4402-3 and 48 CFR
970.3102-3-21(b).

\(f\) Bonds and Insurance. (1) The contractor shall require performance
bonds in penal amounts as set forth in 48 CFR 28.102-2(a) for all fixed
priced and unit-priced construction subcontracts in excess of \$100,000.
The contractor shall consider the use of performance bonds in fixed
price nonconstruction subcontracts, where appropriate.

\(2\) For fixed-price, unit-priced and cost reimbursement construction
subcontracts in excess of \$100,000 a payment bond shall be obtained on
Standard Form 25A modified to name the contractor as well as the United
States of America as obligees. The penal amounts shall be determined in
accordance with 48 CFR 28.102-2(b).

\(3\) For fixed-price, unit-priced and cost-reimbursement construction
subcontracts, greater than \$25,000, but not greater than \$100,000, the
contractor shall select two or more of the payment protections at 48 CFR
28.102-1(b), giving particular consideration to the inclusion of an
irrevocable letter of credit as one of the selected alternatives.

\(4\) A subcontractor may have more than one acceptable surety in both
construction and other subcontracts, provided that in no case will the
liability of any one surety exceed the maximum penal sum for which it is
qualified for any one obligation. For subcontracts other than
construction, a co-surety (two or more sureties together) may reinsure
amounts in excess of their individual capacity, with each surety having
the required underwriting capacity that appears on the list of
acceptable corporate sureties.

\(g\) Buy American. The contractor shall comply with the provisions of
the Buy American Act as reflected in 48 CFR 52.225-3 and 48 CFR
52.225-5. The contractor shall forward determinations of nonavailability
of individual items to the DOE contracting officer for approval. Items
in excess of \$100,000 require the prior concurrence of the Head of
Contracting Activity. If, however, the contractor has an approved
purchasing system, the Head of the Contracting Activity may authorize
the contractor to make determinations of nonavailability for individual
items valued at \$100,000 or less.

\(h\) Construction and Architect-Engineer Subcontracts. (1) Independent
Estimates. A detailed, independent estimate of costs shall be prepared
for all construction work to be subcontracted.

\(2\) Specifications. Specifications for construction shall be prepared
in accordance with the DOE publication entitled \"General Design
Criteria Manual.\"

\(3\) Prevention of Conflict of Interest. (i) The contractor shall not
award a subcontract for construction to the architect-engineer firm or
an affiliate that prepared the design. This prohibition does not
preclude the award of a \"turnkey\" subcontract so long as the
subcontractor assumes all liability for defects in design and
construction and consequential damages.

\(ii\) The contractor shall not award both a cost-reimbursement
subcontract and a fixed-price subcontract for construction or
architect-engineer services or any combination thereof to the same firm
where those subcontracts will be performed at the same site.

\(iii\) The contractor shall not employ the construction subcontractor
or an affiliate to inspect the firm\'s work. The contractor shall assure
that the working relationships of the construction subcontractor and the
subcontractor inspecting its work and the authority of the inspector are
clearly defined.

\(i\) Contractor-Affiliated Sources. Equipment, materials, supplies, or
services from a contractor-affiliated source shall be purchased or
transferred in accordance with 48 CFR 970.4402-3.

\(j\) Contractor-Subcontractor Relationship. The obligations of the
contractor under paragraph (a) of this clause, including the development
of the purchasing system and methods, and purchases made pursuant
thereto, shall not relieve the contractor of any obligation under this
contract (including, among other things, the obligation to properly
supervise, administer, and coordinate the work of subcontractors).
Subcontracts shall be in the name of the contractor, and shall not bind
or purport to bind the Government.

\(k\) Government Property. Identification, inspection, maintenance,
protection, and disposition of Government property shall conform with
the policies and principles of 48 CFR Part 45, 48 CFR 945, the Federal
Property Management Regulations 41 CFR Chapter 101, the DOE Property
Management Regulations 41 CFR Chapter 109, and their contracts.

\(l\) Indemnification. Except for Price-Anderson Nuclear Hazards
Indemnity, no subcontractor may be indemnified except with the prior
approval of the Senior Procurement Executive.

\(m\) Leasing of Motor Vehicles. Contractors shall comply with 48 CFR
8.11 and 48 CFR 908.11.

\(n\) \[Removed and Reserved\] \[71 FR 16241, Mar. 31, 2006\]

\(o\) Management, Acquisition and Use of Information Resources.
Requirements for automatic data processing resources and
telecommunications facilities, services, and equipment, shall be
reviewed and approved in accordance with applicable DOE Orders and
regulations regarding information resources.

\(p\) Priorities, Allocations and Allotments. Priorities, allocations
and allotments shall be extended to appropriate subcontracts in
accordance with the clause or clauses of this contract dealing with
priorities and allocations.

\(q\) Purchase of Special Items. Purchase of the following items shall
be in accordance with the following provisions of 48 CFR 908.71 and the
Federal Property Management Regulations, 41 CFR Chapter 101:

\(1\) Motor vehicles-48 CFR 908.7101

\(2\) Aircraft-48 CFR 908.7102

\(3\) Security Cabinets-48 CFR 908.7106

\(4\) Alcohol-48 CFR 908.7107

\(5\) Helium-48 CFR 908.7108

\(6\) Fuels and packaged petroleum products-48 CFR 908.7109

\(7\) Coal-48 CFR 908.7110

\(8\) Arms and Ammunition-48 CFR 908.7111

\(9\) Heavy Water-48 CFR 908.7121(a)

\(10\) Precious Metals-48 CFR 908.7121(b)

\(11\) Lithium-48 CFR 908.7121(c)

\(12\) Products and services of the blind and severely handicapped-41
CFR 101-26.701

\(13\) Products made in Federal penal and correctional institutions-41
CFR 101-26.702

\(r\) Purchase vs. Lease Determinations. Contractors shall determine
whether required equipment and property should be purchased or leased,
and establish appropriate thresholds for application of lease vs.
purchase determinations. Such determinations shall be made:

\(1\) at time of original acquisition;

\(2\) when lease renewals are being considered; and

\(3\) at other times as circumstances warrant.

\(s\) Quality Assurance. Contractors shall provide no less protection
for the Government in its subcontracts than is provided in the prime
contract.

\(t\) Setoff of Assigned Subcontractor Proceeds. Where a subcontractor
has been permitted to assign payments to a financial institution, the
assignment shall treat any right of setoff in accordance with 48 CFR
932.803.

\(u\) Strategic and Critical Materials. The contractor may use strategic
and critical materials in the National Defense Stockpile.

\(v\) Termination. When subcontracts are terminated as a result of the
termination of all or a portion of this contract, the contractor shall
settle with subcontractors in conformity with the policies and
principles relating to settlement of prime contracts in 48 CFR Subparts
49.1, 49.2 and 49.3. When subcontracts are terminated for reasons other
than termination of this contract, the contractor shall settle such
subcontracts in general conformity with the policies and principles in
48 CFR Subparts 49.1, 49.2, 49.3 and 49.4. Each such termination shall
be documented and consistent with the terms of this contract.
Terminations which require approval by the Government shall be supported
by accounting data and other information as may be directed by the
contracting officer.

\(w\) Unclassified Controlled Nuclear Information. Subcontracts
involving unclassified uncontrolled nuclear information shall be treated
in accordance with 10 CFR part 1017.

\(x\) Subcontract Flowdown Requirements. In addition to terms and
conditions that are included in the prime contract which direct
application of such terms and conditions in appropriate subcontracts,
the contractor shall include the following clauses in subcontracts, as
applicable:

\(1\) Davis-Bacon clauses prescribed in 48 CFR 22.407.

\(2\) Foreign Travel clause prescribed in 48 CFR 952.247-70.

\(3\) Counterintelligence clause prescribed in 48 CFR 970.0404-4(a).

\(4\) Service Contract Act clauses prescribed in 48 CFR 22.1006.

\(5\) State and local taxes clause prescribed in 48 CFR 970.2904-1.

\(6\) Cost or pricing data clauses prescribed in 48 CFR 970.1504-3-1(b).

\(y\) Legal Services. Contractor purchases of litigation and other legal
services are subject to the requirements in 10 CFR part 719 and the
requirements of this clause.

(End of Clause)

**970.5245-1 Property.**

As prescribed in 48 CFR 970.4501-1(a), insert the following clause:

PROPERTY (DEC 2000)

\(a\) Furnishing of Government property. The Government reserves the
right to furnish any property or services required for the performance
of the work under this contract.

\(b\) Title to property. Except as otherwise provided by the contracting
officer, title to all materials, equipment, supplies, and tangible
personal property of every kind and description purchased by the
contractor, for the cost of which the contractor is entitled to be
reimbursed as a direct item of cost under this contract, shall pass
directly from the vendor to the Government. The Government reserves the
right to inspect, and to accept or reject, any item of such property.
The contractor shall make such disposition of rejected items as the
contracting officer shall direct. Title to other property, the cost of
which is reimbursable to the contractor under this contract, shall pass
to and vest in the Government upon (1) issuance for use of such property
in the performance of this contract, or (2) commencement of processing
or use of such property in the performance of this contract, or (3)
reimbursement of the cost thereof by the Government, whichever first
occurs. Property furnished by the Government and property purchased or
furnished by the contractor, title to which vests in the Government,
under this paragraph are hereinafter referred to as Government property.
Title to Government property shall not be affected by the incorporation
of the property into or the attachment of it to any property not owned
by the Government, nor shall such Government property or any part
thereof, be or become a fixture or lose its identity as personality by
reason of affixation to any realty.

\(c\) Identification. To the extent directed by the contracting officer,
the contractor shall identify Government property coming into the
contractor\'s possession or custody, by marking and segregating in such
a way, satisfactory to the contracting officer, as shall indicate its
ownership by the Government.

\(d\) Disposition. The contractor shall make such disposition of
Government property which has come into the possession or custody of the
contractor under this contract as the contracting officer may direct
during the progress of the work or upon completion or termination of
this contract. The contractor may, upon such terms and conditions as the
contracting officer may approve, sell, or exchange such property, or
acquire such property at a price agreed upon by the contracting officer
and the contractor as the fair value thereof. The amount received by the
contractor as the result of any disposition, or the agreed fair value of
any such property acquired by the contractor, shall be applied in
reduction of costs allowable under this contract or shall be otherwise
credited to account to the Government, as the contracting officer may
direct. Upon completion of the work or the termination of this contract,
the contractor shall render an accounting, as prescribed by the
contracting officer, of all government property which had come into the
possession or custody of the contractor under this contract.

\(e\) Protection of government property-management of high-risk property
and classified materials. (1) The contractor shall take all reasonable
precautions, and such other actions as may be directed by the
contracting officer, or in the absence of such direction, in accordance
with sound business practice, to safeguard and protect government
property in the contractor\'s possession or custody.

\(2\) In addition, the contractor shall ensure that adequate safeguards
are in place, and adhered to, for the handling, control and disposition
of high-risk property and classified materials throughout the life cycle
of the property and materials consistent with the policies, practices
and procedures for property management contained in the Federal Property
Management regulations (41 CFR chapter 101), the Department of Energy
Property Management regulations (41 CFR chapter 109), and other
applicable regulations.

\(3\) High-risk property is property, the loss, destruction, damage to,
or the unintended or premature transfer of which could pose risks to the
public, the environment, or the national security interests of the
United States. High-risk property includes proliferation sensitive,
nuclear related dual use, export controlled, chemically or radioactively
contaminated, hazardous, and specially designed and prepared property,
including property on the militarily critical technologies list.

\(f\) Risk of loss of Government property. (1)(i) The contractor shall
not be liable for the loss or destruction of, or damage to, Government
property unless such loss, destruction, or damage was caused by any of
the following:

\(A\) Willful misconduct or lack of good faith on the part of the
contractor\'s managerial personnel;

\(B\) Failure of the contractor\'s managerial personnel to take all
reasonable steps to comply with any appropriate written direction of the
contracting officer to safeguard such property under paragraph (e) of
this clause; or

\(C\) Failure of contractor managerial personnel to establish,
administer, or properly maintain an approved property management system
in accordance with paragraph (i)(1) of this clause.

\(ii\) If, after an initial review of the facts, the contracting officer
informs the contractor that there is reason to believe that the loss,
destruction of, or damage to the government property results from
conduct falling within one of the categories set forth above, the burden
of proof shall be upon the contractor to show that the contractor should
not be required to compensate the government for the loss, destruction,
or damage.

\(2\) In the event that the contractor is determined liable for the
loss, destruction or damage to Government property in accordance with
(f)(1) of this clause, the contractor\'s compensation to the Government
shall be determined as follows:

\(i\) For damaged property, the compensation shall be the cost of
repairing such damaged property, plus any costs incurred for temporary
replacement of the damaged property. However, the value of repair costs
shall not exceed the fair market value of the damaged property. If a
fair market value of the property does not exist, the contracting
officer shall determine the value of such property, consistent with all
relevant facts and circumstances.

\(ii\) For destroyed or lost property, the compensation shall be the
fair market value of such property at the time of such loss or
destruction, plus any costs incurred for temporary replacement and costs
associated with the disposition of destroyed property. If a fair market
value of the property does not exist, the contracting officer shall
determine the value of such property, consistent with all relevant facts
and circumstances.

\(3\) The portion of the cost of insurance obtained by the contractor
that is allocable to coverage of risks of loss referred to in paragraph
(f)(1) of this clause is not allowable.

\(g\) Steps to be taken in event of loss. In the event of any damage,
destruction, or loss to Government property in the possession or custody
of the contractor with a value above the threshold set out in the
contractor\'s approved property management system, the contractor:

\(1\) Shall immediately inform the contracting officer of the occasion
and extent thereof,

\(2\) Shall take all reasonable steps to protect the property remaining,
and

\(3\) Shall repair or replace the damaged, destroyed, or lost property
in accordance with the written direction of the contracting officer. The
contractor shall take no action prejudicial to the right of the
Government to recover therefore, and shall furnish to the Government, on
request, all reasonable assistance in obtaining recovery.

\(h\) Government property for Government use only. Government property
shall be used only for the performance of this contract.

\(i\) Property Management. (1) Property Management System. (i) The
contractor shall establish, administer, and properly maintain an
approved property management system of accounting for and control,
utilization, maintenance, repair, protection, preservation, and
disposition of Government property in its possession under the contract.
The contractor\'s property management system shall be submitted to the
contracting officer for approval and shall be maintained and
administered in accordance with sound business practice, applicable
Federal Property Management regulations and Department of Energy
Property Management regulations, and such directives or instructions
which the contracting officer may from time to time prescribe.

\(ii\) In order for a property management system to be approved, it must
provide for:

\(A\) Comprehensive coverage of property from the requirement
identification, through its life cycle, to final disposition;

\(B\) Employee personal responsibility and accountability for
Government-owned property;

\(C\) Full integration with the contractor\'s other administrative and
financial systems; and

\(D\) A method for continuously improving property management practices
through the identification of best practices established by \"best in
class\" performers.

\(iii\) Approval of the contractor\'s property management system shall
be contingent upon the completion of the baseline inventory as provided
in subparagraph (i)(2) of this clause.

\(2\) Property Inventory. (i) Unless otherwise directed by the
contracting officer, the contractor shall within six months after
execution of the contract provide a baseline inventory covering all
items of Government property.

\(ii\) If the contractor is succeeding another contractor in the
performance of this contract, the contractor shall conduct a joint
reconciliation of the property inventory with the predecessor
contractor. The contractor agrees to participate in a joint
reconciliation of the property inventory at the completion of this
contract. This information will be used to provide a baseline for the
succeeding contract as well as information for closeout of the
predecessor contract.

\(j\) The term \"contractor\'s managerial personnel\" as used in this
clause means the contractor\'s directors, officers and any of its
managers, superintendents, or other equivalent representatives who have
supervision or direction of:

\(1\) All or substantially all of the contractor\'s business; or

\(2\) All or substantially all of the contractor\'s operations at any
one facility or separate location to which this contract is being
performed; or

\(3\) A separate and complete major industrial operation in connection
with the performance of this contract; or

\(4\) A separate and complete major construction, alteration, or repair
operation in connection with performance of this contract; or

\(5\) A separate and discrete major task or operation in connection with
the performance of this contract.

\(k\) The contractor shall include this clause in all cost reimbursable
subcontracts.

(End of Clause)

Alternate I (DEC 2000). As prescribed in 48 CFR 970.4501-1(b), when the
award is to a nonprofit contractor, replace paragraph (j) of the basic
clause with the following paragraph (j):

\(j\) The term \"contractor\'s managerial personnel\" as used in this
clause means the contractor\'s directors, officers and any of its
managers, superintendents, or other equivalent representatives who have
supervision or direction of all or substantially all of:

\(1\) The contractor\'s business; or

\(2\) The contractor\'s operations at any one facility or separate
location at which this contract is being performed; or

\(3\) The contractor\'s Government property system and/or a Major System
Acquisition or Major Project as defined in DOE Order 4700.1 (Version in
effect on effective date of contract).